CSL Limited  
Annual Report  
2015–2016  
Contents  
0
0
2
3
About CSL  
Financial Report  
Our Businesses  
54  
62  
81  
Directors’ Report  
0
4
Celebrating 100 years  
Auditor’s Independence Declaration  
Consolidated Statement of  
Comprehensive Income  
Year in Review  
8
8
2
3
Consolidated Balance Sheet  
0
1
1
8
0
2
Business Highlights  
Financial Highlights  
Year in Review  
Consolidated Statement of  
Changes in Equity  
8
4
Consolidated Statement of  
Cash Flows  
Business Features  
8
1
1
5
Notes to the Financial Statements  
2
2
3
0
8
2
CSL Behring  
20 Directors’ Declaration  
Seqirus  
21 Independent Auditor’s Report  
Research and Development  
124 Medical Glossary  
Our Company  
3
3
4
4
4
6
8
0
1
3
Directors  
Global Leadership Group  
Share Information  
Shareholder Information  
Corporate Governance  
1
2016  
Annual General Meeting  
Wednesday 12 October 2016 at 10.00am AEDT  
Function Centre, National Tennis Centre  
Melbourne Park, Batman Avenue  
Melbourne 3000  
1
1
1
7
1
3
7 August  
Annual profit and final dividend announcement  
3 September Shares traded ex-dividend  
4 September Record date for final dividend  
October  
Final dividend paid  
AGM Live Webcast  
The CSL Limited Annual General Meeting  
will be webcast through CSL’s website  
www.csl.com.au  
2 October  
1 December  
Annual General Meeting  
Half year ends  
Half year ends  
3
1 December  
Log on to the home page of CSL’s  
website and then click on the item called  
Annual General Meeting webcast.  
2
017  
1
1
1
1
3
1
1
1
1
1
3
5 February  
5 March  
6 March  
3 April  
Half year profit and interim dividend announcement  
Shares traded ex-dividend  
Share Registry  
Computershare Investor Services Pty Limited  
Yarra Falls, 452 Johnston Street  
Abbotsford VIC 3067  
Record date for interim dividend  
Interim dividend paid  
0 June  
Year ends  
6 August  
Annual profit and final dividend announcement  
Postal Address: GPO Box 2975  
Melbourne VIC 3001  
2 September Shares traded ex-dividend  
3 September Record date for final dividend  
Enquiries within Australia: 1800 646 882  
Enquiries outside Australia: +61 3 9415 4178  
Website: www.investorcentre.com  
3 October  
8 October  
1 December  
Final dividend paid  
Annual General Meeting  
Half year ends  
Please see inside back cover for legal notice  
2
About CSL  
Driven by its promise, CSL is a global specialty biotherapeutics company that  
develops and delivers innovative biotherapies that save lives and help people  
with life-threatening medical conditions live full lives. Our Values guide us in  
creating sustainable value for our stakeholders.  
Delivering on promises is what we do at  
CSL. Starting a century ago in Melbourne,  
Australia, we made a promise to save lives  
and protect the health of people who  
were stricken with a range of serious and  
chronic medical conditions. Today, as a  
leading global biotherapeutics company,  
that same promise has never been stronger,  
conducting business in over 60 countries  
with more than 16,000 employees  
Innovation has been in the DNA of CSL since  
our beginning in 1916 and continues as the  
core of everything we do today. Innovation  
spans all across our organisation - reflected  
in our 1,100 dedicated R&D experts who  
focus every day on solving patients’ unmet  
needs, to our unique capability in creating  
one of the largest and most efficient plasma  
collection networks in the world, right  
through to safely and effectively producing  
medicines.  
CSL’s continuing priority is to ensure the  
ongoing safety and quality of our medicines,  
while improving access to innovative  
therapies that make a real and lasting  
difference to the lives of people who need  
them. To achieve this, we drive a culture  
of continuous improvement in quality  
and compliance and undertake capacity  
expansion around the world.  
CSL’s operational excellence, commercial  
capability, combined with a focused global  
R&D organisation and proven management,  
give us the confidence to efficiently identify,  
successfully develop, and dependably deliver  
innovations that patients need and want.  
For 100 years, CSL has earned a reputation  
as a passionate yet responsible organisation  
which is driven to care for patients and  
deliver on its commitments. Today, our  
future has never looked brighter.  
CSL also invests in life cycle management  
and market development for our existing  
products, and in the development of new  
product opportunities for the longer term.  
We understand the unique challenges faced  
by people stricken with life threatening  
medical conditions because of our long  
experience, deep knowledge and dedicated  
focus on preventing and treating serious  
diseases. We expect that emerging new  
innovations and support programs can  
provide unprecedented opportunities to  
improve patient wellbeing unlike any other  
time in history.  
who are driven by our deep passion to  
serve thousands of patients and other  
stakeholders around the world.  
CSL supports patient, biomedical and  
local communities by improving access to  
therapies, advancing scientific knowledge,  
supporting future medical researchers,  
and engaging our staff in the support of  
local communities. We also contribute to  
humanitarian programs and relief efforts  
around the world.  
CSL focuses its world-class research  
and development (R&D), high-quality  
manufacturing, and patient-centred  
management to develop and deliver  
innovative biotherapies and support  
programs – all to help save lives and treat  
people with life-threatening medical  
conditions.  
+
3
3
0
Countries  
US$2.3Billion  
ꢚꢔ oꢒꢇꢍꢊtꢅoꢁs ꢊꢍouꢁꢎ tꢖꢇ ꢗoꢍꢉꢎ  
ꢀꢁ ꢂꢃꢄ ꢅꢁꢆꢇstꢈꢇꢁts ꢅꢁ ꢉꢊst ꢋ ꢌꢇꢊꢍs  
ꢊꢎꢆꢊꢁꢏꢇs ꢇꢐꢏꢅtꢅꢁꢑ ꢒꢅꢒꢇꢉꢅꢁꢇ  
1
,1 00+  
ꢂꢃꢄ ꢇꢈꢒꢉoꢌꢇꢇs  
US$6.0  
+Billion  
ꢁ ꢊꢁꢁuꢊꢉ ꢍꢇꢆꢇꢁuꢇ  
7
+
+
1
6,000  
ꢓꢊꢁuꢔꢊꢏtuꢍꢅꢁꢑ sꢅtꢇs  
140  
ꢘꢉꢊsꢈꢊ ꢏoꢉꢉꢇꢏtꢅoꢁ ꢏꢇꢁtꢍꢇs ꢊꢏꢍoss  
ꢕuꢍoꢒꢇ ꢊꢁꢎ ꢙoꢍtꢖ Aꢈꢇꢍꢅꢏꢊ  
ꢕꢈꢒꢉoꢌꢇꢇs ꢊꢍouꢁꢎ tꢖꢇ ꢗoꢍꢉꢎ  
Austꢍꢊꢉꢅꢊ  
ꢝꢇꢍꢈꢊꢁꢌ  
ꢜꢗꢅtꢞꢇꢍꢉꢊꢁꢎ  
ꢛꢁꢅtꢇꢎ ꢟꢅꢁꢑꢎoꢈ  
ꢛꢁꢅtꢇꢎ ꢜtꢊtꢇs  
Our Businesses  
are shifting treatment paradigms around the  
world, CSL Behring knows how to meet the  
needs of these unique populations.  
Seqirus is the world’s second largest influenza products made in the national interest  
CSL Behring  
vaccine company and a major partner in the  
prevention and control of influenza globally.  
It is a reliable supplier of influenza vaccine for  
Northern and Southern Hemisphere markets  
and a transcontinental partner in pandemic  
preparedness and response.  
for the Australian Government, including  
antivenoms and Q fever vaccine.  
CSL Behring is a global leader in biotherapies  
with the broadest range of quality products  
in our industry and substantial markets in  
North America, Europe, Asia and Australia.  
Our therapies are indicated for treatment  
of bleeding disorders including haemophilia  
and von Willebrand disease, primary and  
secondary immune deficiencies, hereditary  
angioedema, neurological disorders and  
inherited respiratory disease. Our products  
are also used to prevent haemolytic disease  
in newborns, for urgent warfarin reversal  
in patients with acute major bleeding, to  
prevent infection in solid organ transplant  
recipients and treat specific infections, and to  
help victims of trauma, shock and burns.  
CSL Plasma, a division of CSL Behring,  
Research and Development  
operates one of the world’s largest and most  
efficient plasma collection networks with more  
than 140 centres in the United States (US) and  
Europe. With an integrated manufacturing  
platform and production facilities located in  
the US, Germany, Switzerland and Australia,  
we use the most sophisticated production  
methods available meeting or exceeding  
stringent international safety and quality  
standards. Each step of our manufacturing  
process – from plasma donor to patient –  
reflects CSL Behring’s unyielding commitment  
to ensuring its products are safe and effective.  
CSL continues to invest in the development  
of protein-based medicines to treat serious  
human illnesses. Today, most of our licensed  
medicines are purified from human plasma.  
CSL has also built the capabilities required to  
develop new and innovative products using  
recombinant technology.  
Seqirus operates state-of-the-art production  
facilities in the US, the UK and Australia,  
and manufactures influenza vaccines using  
both egg-based and cell-based technologies.  
It has leading R&D capabilities, a broad  
portfolio of differentiated products and  
commercial operations in more than  
20 countries. Seqirus employs more  
than 1,900 people.  
Global R&D activities support CSL’s existing  
licensed products and development of new  
therapies that align with our technical and  
commercial capabilities in immunoglobulins,  
specialty products, haemophilia and  
coagulation therapies and breakthrough  
medicines.  
In Australia and the Asia Pacific region,  
Seqirus is a leading provider of in-licensed  
vaccines and specialty pharmaceuticals. It  
also manufactures and markets diagnostics  
for immunhaemotology laboratories and  
is the sole supplier of a unique range of  
From our emerging family of recombinant  
coagulation products that aim to  
dramatically improve the lives of patients  
with bleeding disorders, to industry leading  
immunoglobulin and specialty products that  
Seqirus  
Seqirus was established on 31 July 2015  
following CSL’s acquisition of the Novartis  
influenza vaccines business and its subsequent  
integration with bioCSL.  
4
1
00 years ago the Commonwealth Serum Laboratories was established to protect the  
health of a nation. Today CSL is a global biotherapeutics leader, delivering innovative  
medicines to patients and populations all over the world. We are proud to share our  
journey and to recognise those who have contributed along the way.  
Our past achievements inspire our future with our promise to save and improve lives  
continuing to drive us. In fact, in many ways, we’re just getting started.  
1
904  
1940  
Nobel Prize winner Dr Emil von  
Behring establishes Behringwerke  
in Marburg, Germany, to produce  
sera and vaccines.  
1925  
Collaborating with Harvard’s  
Dr Edwin Cohn, Chicago-based  
Armour Laboratories becomes  
the largest supplier of human  
albumin to the US military  
during WWII.  
1
917  
1920  
CSL starts producing sera to  
prevent and treat infectious  
diseases.  
1935  
The Walter and Eliza Hall Institute  
of Medical Research (WEHI)  
provides CSL with free temporary  
accommodation in Melbourne.  
CSL expands its product range  
to include five sera, 24 vaccines,  
four tuberculins, plus a range of  
diagnostic agents.  
An independent research  
department is established at CSL  
under Dr Bill Keogh.  
1
915  
1927  
Due to medicine shortages  
during WWI, the Commonwealth  
Government announces it  
will establish a ‘federal serum  
institute’.  
Dr Penfold leaves CSL and is  
succeeded as Director by Dr FG  
Morgan.  
1944  
CSL manufactures large  
1918  
1922  
quantities of a new vaccine  
developed by the CSIRO to  
prevent black disease in sheep.  
CSL starts production of  
influenza virus vaccine,  
supplying one million doses  
to Australian and British  
troops.  
CSL moves to a permanent site  
in Parkville, where it continues to  
operate today.  
CSL introduces veterinary  
products to help protect  
Australia’s agricultural interests.  
1930  
1
916  
After collaborating with WEHI,  
CSL releases antivenom against  
the deadly tiger snake.  
1939  
1
919  
1923  
Dr William Penfold is  
appointed founding Director  
of the Commonwealth  
Serum Laboratories, starting  
his first day of work on 25  
April.  
During WWII, CSL becomes an  
essential provider of blood-  
typing sera for service personnel  
and issues millions of doses  
of preventative medicines for  
infectious diseases.  
CSL starts production of  
penicillin, providing urgent  
supplies to Australian and US  
forces. Australia becomes the first  
country to provide penicillin to  
civilians.  
When the Spanish Flu strikes  
Australia, CSL responds  
rapidly with three million  
doses of a mixed bacterial  
vaccine.  
Soon after the discovery  
of insulin in Canada, CSL  
becomes one of only four  
laboratories in the world  
licensed to make it.  
1934  
CSL opens an additional site in  
Broadmeadows, Melbourne.  
Certain milestones achieved by Behringwerke, ZLB, Nabi and Novartis Influenza Vaccines before they became part of CSL have been included in our timeline because of their significance to the operations of CSL today.  
5
1973  
1983  
1
957-1958  
CSL begins to re-assort influenza  
strains so they grow better in  
eggs, providing them to the  
WHO to share with all flu vaccine  
manufacturers.  
CSL adds protection against  
cheesy gland to its popular  
five-in-one vaccine for sheep,  
producing the top-selling product  
CSL responds quickly to protect  
Australians from the Asian Flu  
pandemic, producing 1.6 million  
doses of vaccine.  
®
GLANVAC .  
1
953  
1
961  
1974  
1988-1980  
CSL manufactures Triple Antigen  
vaccine to protect children  
from diphtheria, tetanus, and  
whooping cough.  
1
946  
CSL is incorporated as a  
Commonwealth Statutory  
Authority in an attempt to make  
it become more commercial and  
profitable.  
Dr Neville McCarthy from  
multinational pharmaceutical  
company, ER Squibb & Co, is  
appointed as CSL Director.  
The Australian Government  
approves construction  
Behringwerke is the first  
company in Europe to begin  
fractionating human blood  
plasma on an industrial scale.  
of a world-class plasma  
fractionation facility on CSL’s  
Broadmeadows site.  
Armour Laboratories opens its  
new plasma fractionating facility  
in Kankakee, near Chicago.  
1979  
CSL’s Animal Health division  
develops a five-in-one vaccine  
that becomes Australia’s most  
popular veterinary product.  
CSL launches the unique  
Q fever vaccine, Q VAX ,  
1
949  
®
ZLB, in collaboration with  
Sandoz AG, Switzerland,  
launches the world’s first purified  
immunoglobulinproduct for  
intravenous infusion.  
The Swiss Red Cross  
1954  
protecting Australians who  
work with animals.  
establishes Zentrallaboratorium  
Blutspendedienst (ZLB), in Bern,  
Switzerland.  
ZLB issues the world’s first  
plasma protein solution and  
develops modifications to the  
Cohn fractionation process.  
CSL starts plasma fractionation  
for New Zealand, and later for  
Hong Kong, Malaysia, Singapore  
and Taiwan.  
1990  
CSL appoints 33 year-old  
Dr Brian McNamee as the  
company’s CEO.  
1
951  
1980-1981  
The World Health Organisation  
1956  
CSL enters an ongoing  
(
WHO) designates CSL as an  
1966-1967  
partnership with US based Merck  
& Co to distribute Merck & Co.,  
Inc. vaccines in Australia and NZ.  
Dr Morgan retires from CSL and  
is succeeded by Dr Percival ‘Val’  
Bazeley.  
Influenza Reference Laboratory.  
1991  
In a world first, CSL issues  
Rhesus (D) immunoglobulin for  
the prevention of haemolytic  
disease in newborns.  
ZLB ensures the supply of blood  
products through the Swiss Red  
Cross Blood Transfusion Service.  
CSL is corporatised by the  
Australian Government to build  
a “great and independent  
Australian company”.  
Elusive to scientists for 50 years,  
a funnel web spider antivenom  
is finally developed by CSL’s  
Dr Struan Sutherland.  
Just a few months  
after Jonas Salk’s US  
breakthrough, CSL  
commences large scale  
production of polio vaccine.  
The disease is virtually  
eliminated in Australia  
within a decade.  
1
952  
1968-1969  
CSL collaborates with  
Professor Ian Frazer, and  
later Merck & Co., Inc., to  
develop the world’s first HPV  
vaccine.  
CSL starts fractionation of  
plasma collected by the  
Australian Red Cross from  
voluntary blood donors.  
CSL acts quickly to protect  
Australia during the Hong Kong  
Flu pandemic, producing five  
million doses of vaccine.  
Behringwerke launches  
®
HAEMATE , the world’s first  
pasteurised factor VIII product for  
the treatment of Haemophilia A.  
6
2007  
2004  
2
010  
CSL’s share price breaks through  
the A$100 mark and the  
company undertakes a 3-for-1  
share split.  
In a bold move CSL acquires  
Aventis Behring for A$1.23  
billion, combining it with  
ZLB operations to create CSL  
Behring, a global leader in  
biotherapeutics.  
CSL announces a new biotech  
facility for experimental  
recombinant therapies and a new  
plasma manufacturing plant for  
1
998  
CSL acquires US-based Animal  
Health business Biocor from  
Bayer for A$15 million.  
CSL Behring launches  
®
PRIVIGEN in Broadmeadows.  
®
category-leading PRIVIGEN ,  
the first and only liquid  
intravenous immunoglobulin  
requiring no refrigeration or  
reconstitution.  
CSL commences clinical trials  
for novel recombinant therapies  
for people with Haemophilia A  
and B.  
1
999  
2005  
Centeon changes its name to  
Aventis Behring when its parent  
companies merge to become  
Aventis.  
As part of the strategy to reshape  
the company, CSL divests JRH  
Biosciences to Sigma-Aldrich for  
A$458 million and its Animal  
Health business to Pfizer for  
A$162 million.  
CSL Behring launches  
2009  
®
HIZENTRA , the first and  
1994  
CSL’s rapid response to the  
H1N1 (Swine Flu) pandemic sees  
Australia become one of the first  
nations to supply vaccine to its  
population.  
only 20% subcutaneous  
immunoglobulin for patients  
with primary immune  
deficiency.  
CSL debuts on the Australian  
Securities Exchange with a  
value of $299 million and a  
day one closing share price  
of A$2.43*.  
2000  
CSL acquires ZLB from  
2006  
the Swiss Red Cross for  
A$930 million; a major step  
towards global leadership in  
plasma therapeutics.  
CSL acquires Melbourne biotech  
company Zenyth Therapeutics  
for A$104 million, strengthening  
CSL’s pipeline and recombinant  
protein capabilities.  
CSL Plasma opens its first  
‘Centre of the Future’ in the US,  
enhancing the donor experience  
and improving plasma collection  
efficiencies.  
In Knoxville, Tennessee, CSL  
Behring establishes the world’s  
largest and most advanced  
plasma testing laboratory.  
*
Equivalant of A$0.81 today  
1
992  
following the companies 3-for-1  
share split in 2007.  
Aventis Behring acquires  
CSL purchases local animal sera  
supplier, Filtron, for A$2 million  
to boost its cell culture business.  
4
2 plasma donation centres  
CSL acquires US-based cell  
from US-based Serologicals  
Corporation, creatingthe world’s  
largest plasma collection  
business.  
The FDA approves the world’s  
first HPV vaccine, GARDASIL®  
which goes on to deliver royalties  
to CSL of upto A$100 million  
each year.  
CSL formally establishes an office  
in China to support increased  
demand for albumin and future  
growth in the region.  
2012  
culture company JRH Biosciences  
for A$27 million; an important  
first step towards globalisation.  
The WHO designates CSL as an  
Influenza Collaborating Centre.  
CSL delivers a US$1 billion net  
profit after tax for the first time  
since listing.  
As part of pandemic  
1
993  
1996  
2001  
CSL Behring starts construction  
on a new manufacturing facility  
in Bern for next generation  
immunoglobulin products  
preparedness, the US  
Government and Novartis  
announce a new cell-based  
manufacturing facility for  
influenza vaccines.  
CSL integrates its Broadmeadows  
operations with CSL Behring and  
creates a stand-alone vaccines,  
pharmaceuticals and diagnostics  
business called bioCSL.  
The Australian Government  
A joint venture is established  
between Armour Pharmaceuticals  
and Behringwerke, called  
Centeon.  
CSL acquires 47 plasma donor  
centres and testing facilities from  
US-based Nabi for A$317 million  
and creates ZLB Plasma Services.  
transfers ownership of the partly  
completed plasma fractionation  
facility at Broadmeadows to CSL.  
®
®
PRIVIGEN and HIZENTRA .  
7
2015  
CSL acquires the Novartis  
influenza vaccine business  
for US$275 million,  
combining it with bioCSL to  
create Seqirus, the world’s  
second-largest flu vaccine  
manufacturer.  
2016  
CSL Behring achieves major  
regulatory milestones for its  
novel recombinant therapies,  
starting with the approval  
®
of IDELVION , a long-acting  
2
013  
CSL’s share price exceeds A$100  
per share again, climbing from  
A$36.36 in 2007 when CSL  
undertook a 3-for-1 share split.  
clotting factor for patients  
with haemophilia B and  
AFSTYLA , the first and only  
single-chain product for  
haemophilia A.  
1994  
2016  
Paul Perreault, CSL Behring  
President at the time, is  
named CEO following  
Dr Brian McNamee’s decision  
to step down after 23 years  
leading the company.  
®
CREATING  
SHAREHOLDER  
VALUE  
Seqirus achieves FDA approval  
®
for FLUAD , the only licensed  
CSL announces a global hub  
for research and translational  
medicine at the Bio21 Institute,  
University of Melbourne.  
adjuvanted seasonal influenza  
vaccine and advances  
development of quadrivalent flu  
vaccines.  
®
HIZENTRA is granted approval  
in Japan, CSL Behring’s first  
major product approval in  
Japan since the Aventis Behring  
acquisition.  
A purchase of A$1,000 worth of  
CSL shares when the company  
listed on the ASX in 1994 would  
be worth A$217,039 at 30  
June, 2016*. This represents an  
investment return of 27.6% per  
annum over the period.  
CSL begins planning for phase  
III clinical trials of a novel  
plasma-derived therapy for acute  
coronary syndrome.  
CSL Behring starts construction  
of a new large-scale production  
facility in Lengnau, Switzerland  
for its novel recombinant  
therapies.  
2
014  
CSL celebrates its centenary  
as a A$50 billion global  
biotherapeutics leader, employing  
over 16,000 people in more than  
30 countries and serving patients  
all around the world.  
CSL Behring’s site in Kankakee  
gets FDA approval for a  
major plasma manufacturing  
expansion, which will support  
future demand for biotherapies.  
CSL Behring issues its first  
®
exports of PRIVIGEN from the  
new Turner manufacturing facility  
at its Broadmeadows site.  
*With dividends reinvested  
8
Business Highlights  
CSL delivers another strong performance with double digit growth in all plasma  
therapy groups. This year we secured approvals and launches for five new products,  
including our two novel recombinant coagulation products IDELVION and AFSTYLA  
®
®
and three differentiated influenza vaccine products.  
CSL’s reported net profit after tax  
was US$1,242 million for the year  
ended 30 June 2016. On a constant  
currency basis , net profit after tax  
was US$1,357 million.  
CSL Behring’s immunoglobulin  
R&D investment this year reached  
US$614 million. Over the reporting  
period approval for two of CSL’s  
novel recombinant therapies to  
treat haemophilia was achieved.  
IDELVION (Coagulation Factor IX  
(Recombinant), Albumin Fusion  
Protein) was approved by the US  
FDA, the European Medicines  
Agency (EMA) and Health Canada.  
AFSTYLA (Antihemophilic Factor  
Our R&D group continues to make  
significant progress in the earlier  
stage recombinant monoclonal  
antibody (mAb) projects, such as  
CSL324 for the possible treatment of  
inflammatory diseases associated with  
neutrophil infiltration and CSL362  
for the treatment of acute myeloid  
leukaemia.  
and speciality product groups both  
grew by 11% at constant currency.  
Sales in albumin, driven by ongoing  
significant demand in China and the  
US, rose 12% on constant currency,  
with plasma-derived haemophilia  
product sales growing by 14%.  
#
Our latest share buyback of up to  
A$1 billion, together with previous  
share buybacks, has contributed to  
a 26% boost to earnings per share.  
Seqirus, the world’s second largest  
influenza vaccine provider in the  
world, has commenced the transition  
to quadrivalent influenza vaccines  
Capacity expansion projects to  
position CSL to meet future demand  
continue across all major sites in  
Australia, the US, Switzerland and  
Germany. In addition, CSL Plasma  
continues to extend its world leading  
plasma collection network opening  
a total of 22 new plasma collection  
centres across the US and Europe  
during the year.  
CSL’s total revenue reached  
US$6,129 million up 8% on a  
constant currency basis.  
(Recombinant), Single Chain) was  
also approved by the US FDA.  
(QIV), achieving US Food and Drug  
Administration (FDA) approval of  
FLUCELVAX QUADRIVAENT™,  
the world’s only licensed QIV that  
is manufactured using cell-based  
technology.  
CSL Behring continues to perform  
well delivering product sales of  
US$5,245 million, an increase  
of 10% on constant currency  
when compared to the prior  
comparable period.  
#
Constant currency removes the impact of exchange rate movements to facilitate comparability of operational performance. For further details refer to the Directors’ Report on page 55.  
9
Since listing on the Australian  
Securities Exchange in 1994,  
we have achieved through  
to 30 June 2016:  
Compound annual growth  
in net profit of 23%  
Compound annual growth  
in CSL share price of 25%  
Compound annual growth  
in market capitalisation of 26%  
10  
Financial Highlights  
Dividends  
Interim Unfranked  
Final Unfranked  
Total Ordinary  
dividend of  
dividend of  
dividends 2015-16  
$
US  
$US  
+
.58 0.68 1.26  
(1)  
per share per share  
$US  
=
0
per share  
Five Year Summary  
2
015-16  
2015-16  
2014-15  
Reported  
2013-14  
Reported  
2012-13  
Reported  
2011-12  
Reported  
(
3)  
Constant  
Reported  
(2)  
Currency  
All figures are in US$ million unless stated otherwise  
Total revenue  
6,435  
6,210  
643  
6,129  
5,909  
614  
5,628  
5,459  
463  
5,524  
5,335  
466  
5,130  
4,950  
427  
4,814  
4,616  
370  
Sales revenue  
R&D investment  
Profit before income tax expense  
Net profit  
1,705  
1,357  
1,556  
1,242  
566  
1,714  
1,379  
414  
1,604  
1,307  
402  
1,461  
1,211  
450  
1,270  
1,024  
309  
Capital investment  
(
1) For shareholders with an Australian registered address,  
Total assets at 30 June  
Total equity at 30 June  
Net tangible assets per share at 30 June ($)  
Weighted average number of shares (million)  
Basic earnings per share ($)  
Dividend per share ($)  
7,563  
2,567  
3.56  
6,401  
2,746  
3.92  
6,278  
3,162  
4.71  
5,974  
3,018  
4.44  
5,901  
3,477  
5.15  
dividends will be paid in A$ at an amount of A$0.886652  
per share (at an exchange rate of A$1.3039/US$1.00),  
and for shareholders with a New Zealand registered  
address, dividends will be paid in NZD at an amount  
of NZ$0.943364 per share (at an exchange rate of  
NZ$1.3873/US$1.00).  
462  
472  
484  
499  
519  
(2) Constant currency removes the impact of exchange rate  
movements to facilitate comparability. For further details  
please refer to the Directors’ Report.  
2.689  
1.260  
2.923  
1.240  
2.701  
1.130  
2.429  
1.020  
1.972  
0.865  
(3) The Group’s reported results are in accordance with the  
Australian Equivalents to International Financial Reporting  
Standards (A-IFRS).  
11  
Our Financial Performance  
CSL Earnings  
Per Share (US$)  
CSL R&D Investment  
(US$ millions)  
CSL Total Revenue  
(US$ millions)  
CSL Net Profit  
(US$ millions)  
1.97  
2.43  
2.70  
2.92  
2.69  
370  
427  
466  
463  
614  
4,814  
5,130  
5,524  
5,628  
6,129  
1,024  
1,211  
1,307  
1,379  
1,242  
11-12  
12-13  
13-14  
14-15  
15-16  
11-12  
12-13  
13-14  
14-15  
15-16  
11-12  
12-13  
13-14  
14-15  
15-16  
11-12  
12-13  
13-14  
14-15  
15-16  
CSL ꢀroup Saleꢁ  
ꢂꢃ Reꢄion 201ꢅꢆ16  
CSL ꢀroup Saleꢁ  
ꢂꢃ ꢇaꢈor ꢉroduꢊtꢁ 201ꢅꢆ16  
ꢋortꢌ Ameriꢊa 46%  
ꢍurope 27%  
Auꢁtralia 8%  
Aꢁia 11%  
ꢏmmunoꢄloꢂulinꢁ 42%  
ꢐaemopꢌilia 17%  
Alꢂumin 14%  
Speꢊialtꢃ 16%  
Seꢑiruꢁ 11%  
ꢎtꢌer 8%  
12  
Year in Review  
On 25 April 1916, the Commonwealth Serum Laboratories was established  
and set the foundation for the CSL of today. This year we celebrate a  
distinctive milestone, 100 years serving and protecting the health and  
wellbeing of millions of people around the world.  
We have evolved from an organisation that largely brought international  
discoveries to Australians – to a company which translates our own early  
research into commercial therapies for patients around the globe.  
Our heritage is rich and our future looks bright.  
We are now a global biotherapeutics leader, employing more  
than 16,000 people and providing life-saving and life-changing  
therapies to people in more than 60 countries.  
Take a moment to celebrate with us 100 years of success  
via our centenary website www.csl100.com.au.  
13  
Dividends and  
CSL Behring  
Financial Results  
CSL Behring’s portfolio of albumin products  
delivered sales of US$811 million, an  
increase of 12% in constant currency  
terms, driven by ongoing strong global  
demand. China delivered another strong  
year of albumin growth supported by our  
ongoing successful sales penetration into  
second and third tier cities.  
CSL Behring delivered an exceptional  
year, with growth in all product sales  
groups. Total sales of US$5.2 billion  
grew 10% in constant currency over the  
previous year with sales growth of 11% for  
immunoglobulins, 12% for albumin, 4%  
for haemophilia products and 11% in the  
specialty products portfolio.  
CSL’s reported net profit after tax  
was US$1,242 million for the year  
ended 30 June 2016. On a constant  
currency basis, net profit after tax was  
US$1,357 million.  
On 15 April 2016, CSL shareholders  
received an interim unfranked dividend  
of US$0.58 per share. A final unfranked  
dividend of US$0.68 per share will be paid  
on 7 October 2016. Total ordinary dividends  
for the year were US$1.26 per share.  
This year we gained approval for two of  
our novel recombinant therapies to treat  
Immunoglobulins represent our largest  
therapy area and contributed product  
sales of US$2,457 million, up 11% in  
constant currency over last year. Intravenous  
immunoglobulin (IVIG) sales growth was  
underpinned by solid demand for PRIVIGEN  
with sales growth of 7% over the prior  
comparable period. PRIVIGEN’s expanded  
indication in Europe to include its use in  
the treatment of chronic inflammatory  
demyelinating polyneuropathy (CIDP) was  
a significant contributor to growth in this  
region, especially in France and the UK. The  
November launch of PRIVIGEN in Australia  
also contributed to the brands strong  
performance as did US sales into the non-  
acute segment.  
®
haemophilia. IDELVION (Coagulation  
Factor IX (Recombinant), Albumin Fusion  
Protein), our long-acting recombinant  
albumin fusion protein for treating  
On 12 October 2015, CSL announced  
an on-market share buyback of up to  
A$1 billion which, as of 30 June 2016,  
was 91% complete with 8.9 million  
shares repurchased for A$908.5 million.  
The benefit to shareholders comes from  
improved investment return ratios, including  
earnings per share and return on equity. This  
latest share buyback together with previous  
share buybacks has contributed to a 26%  
boost to earnings per share.  
®
haemophilia B was approved in the US, the  
European Union and Canada. IDELVION is  
the only recombinant factor IX therapy that  
delivers high-level protection maintaining  
factor IX activity levels above five percent  
in most patients over 14-days, resulting in  
a median annualised spontaneous bleeding  
rate of zero. Additionally, appropriate  
patients can go up to 14 days between  
infusions and achieve excellent bleeding  
control. The flexibility to reduce their  
dosing cycle is an important attribute  
for patients who require a prophylactic  
regimen but don’t want treatment to  
disrupt their active lives. Additionally,  
CSL business activities reported here  
include CSL Behring, Seqirus and our global  
Research and Development operations.  
Sales of subcutaneous immunoglobulin  
product, HIZENTRA , were up 31% at  
constant currency, led by strong demand in  
the US and Europe. New patient starts on  
HIZENTRA and those converting from IVIG  
were key drivers of growth.  
®
CSL Behripies  
to treat h
AFSTYLAS,  
with IDELVION also receiving approval in  
the European Union and Canada.  
®
AFSTYLA (Antihemophilic Factor  
(
Recombinant), Single Chain) was approved  
in the US and is under review by Europe.  
14  
Year in Review continued  
AFSTYLA is the first and only single-chain  
product for haemophilia A specifically  
designed for long-lasting protection from  
bleeds with twice weekly dosing available.  
Both products are off to a promising start  
with ongoing approvals in various countries  
and launches planned in the coming year.  
European countries in the upcoming year.  
RESPREEZA is a maintenance treatment  
for severe Alpha-1 Antitrypsin Deficiency  
patients and has been shown to slow the  
progression of hereditary emphysema.  
Increased awareness and diagnosis of  
heriditary angioedema (HAE) in Europe saw  
form of apolipoprotein A-1, currently  
being investigated to reduce the high  
risk of early recurrent events following  
an acute myocardial infarction or heart  
attack. In Marburg, Germany, CSL Behring  
is continuing its €180 million, five-year  
modernisation and capacity expansion  
activities where a new 4,600-square-metre  
quality control, filling and packaging facility  
is nearing completion. In June, the Board  
endorsed further enhancements in Marburg  
and approved €245 million for construction  
of a new base fractionation facility. This  
state of the art automated facility will  
increase the company’s overall capacity and  
productivity, and is expected to meet the  
needs of patients for many years to come.  
At the Kankakee, US, site the construction  
of a significant, new base fractionation plant  
is also well progressed.  
Within CSL Plasma, we continue to expand  
our fleet of plasma collection centres,  
opening 22 locations in 2015-2016,  
®
strong growth of CSL’s BERINERT , C1-  
esterase inhibitor concentrate.  
Overall, the haemophilia product franchise  
increased 4% in constant currency,  
versus the prior year to US$1,000 million.  
Plasma derived haemophilia sales grew  
bringing our total fleet to more than 140  
centres in the US and Europe. As one of the  
largest and most efficient plasma collection  
operations in the world, this unparalleled  
growth gives us confidence we can collect  
sufficient plasma to stay ahead of demand  
and assure reliable supply of our products to  
our patients well into the future.  
CSL Behring continues to invest in state-  
of-the-art manufacturing facilities around  
the world to meet growing demand for its  
products, increase efficiency and support its  
cohesive global manufacturing network.  
1
4% following successful tenders for the  
®
provision of BERIATE in Iran and Russia  
and strong sales in Europe. Solid HUMATE  
growth in the US was underpinned by  
expanded use in surgeries and immune  
tolerance therapy. A decline in sales of  
®
CSL Behring’s new manufacturing operation  
for the recombinant coagulation products in  
Lengnau, Switzerland celebrated the laying  
of its foundation stone in May 2016, and  
construction on site is making excellent  
progress. Once operational, the state-of-the-  
art manufacturing facility will support the  
commercial production of the company’s  
novel recombinant coagulation family of  
therapies.  
®
HELIXATE , CSL’s licensed recombinant  
®
CSL Behring operator in the PRIVIGEN buffer  
factor VIII, to a large extent offset the  
growth in plasma derived therapies as  
competition intensifies following the  
launch of a number of new generation  
recombinant FVIII products including CSL’s  
recently approved AFSTYLA.  
plant at Broadmeadows, Australia. In December  
2015, the first shipment of PRIVIGEN was made  
to the US from the state-of-the-art facility at CSL  
Behring Australia.  
Our specialty products grew 11% in  
In December, the first shipment of PRIVIGEN  
was made to the US from the Turner  
Privigen facility, a new manufacturing  
facility in Broadmeadows, Australia.  
Construction of a new albumin production  
facility at the same site continues. In  
Bern, Switzerland, and Kankakee, US, we  
successfully completed construction on  
our facility to produce clinical products for  
the phase III study of CSL112, our novel  
constant currency terms to sales of US$977  
®
million. Sales of KCENTRA (4 factor pro-  
thrombin complex concentrate) in the  
US were particularly strong following an  
increased level of promotion and increasing  
brand awareness. Following marketing  
authorisation being granted for RESPREEZA  
in Europe, this product was launched  
in Germany, Czech Republic, Slovakia  
and Spain with plans for rollout in other  
®
15  
On 24 November, the FDA approved  
FLUAD™, an adjuvanted trivalent influenza  
vaccine (TIV) for use in adults aged 65  
years and older in the US. Manufactured  
in our Liverpool facility and approved in  
Europe since 1997, FLUAD is the world’s  
only licensed adjuvanted seasonal influenza  
vaccine. Adjuvants can help boost the  
immune response of vaccines in certain  
populations and potentially reduce the  
amount of antigen required in each dose.  
In addition to supporting the regulatory  
filings of products approved this year, our  
R&D group based in Cambridge US and  
Amsterdam continued to progress clinical  
programs to support the introduction of  
our products in other markets as well as the  
development of a quadrivalent formulation  
of FLUAD and paediatric indications for both  
FLUAD and AFLURIA QUAD.  
Seqirus’ in-licensing division in Australia  
and New Zealand made a solid contribution  
to total revenue for the period. There was  
strong performance across the vaccine  
portfolio, particularly the shingles vaccine  
ZOSTAVAX* in the private market, as well  
as the Human Papilloma Virus (HPV) vaccine  
GARDASIL*, and the paediatric portfolio in  
the National Immunisation Program. The  
immunohematology group also performed  
well and won a major supply tender with  
the Australian Red Cross Blood Service.  
Seqirus  
On 31 July 2015, CSL acquired the Novartis  
influenza vaccine business (NVS-IV) and  
began the process of integrating it with  
bioCSL to create the world’s second largest  
influenza vaccine company, Seqirus.  
In its first year of operation, Seqirus  
delivered solid performance and achieved a  
number of significant product milestones.  
The key near term strategic focus continues  
to be the execution of a turnaround plan to  
achieve profitability by financial year 2018.  
Overall revenue for the period totalled  
US$652 million, tempered by the moderate  
winter in the Northern Hemisphere. The  
transition to QIVs continues in major  
markets, however demand for lower-priced  
TIVs remains reasonably robust.  
On 23 May, the FDA approved FLUCELVAX  
QUADRIVALENT™, a quadrivalent influenza  
vaccine (QIV) for use in people aged four  
years and above in the US, replacing the  
trivalent formulation of the vaccine which  
was indicated for use in people aged 18  
years and above. Manufactured in our Holly  
Springs facility, FLUCELVAX QUADRIVALENT  
is the world’s only licensed QIV that is  
A further strategic objective for Seqirus is  
to use our unique capabilities to contribute  
to public health. In June, at the request  
of the WHO and Fijian Ministry of Health,  
Seqirus donated 20,000 doses of influenza  
vaccine to Fiji to help combat a spike in  
seasonal influenza. The vaccine was used  
to protect pregnant women and healthcare  
workers. Seqirus also continued to support  
antivenom projects in Papua New Guinea  
and Myanmar.  
Following the acquisition of NVS-IV, a full  
integrated functional leadership team took  
effect from 9 November, and the combined  
business began to formally operate as  
Seqirus. On 27 November, the (then) UK  
Home Secretary and local member, The Rt  
Hon Theresa May MP opened Seqirus’ new  
global headquarters in Maidenhead, UK.  
Seqirus has a strong pandemic and pre-  
pandemic franchise, with major contracts  
in the US, UK and Australia. During the  
period, the business continued to meet  
its obligations under these contracts,  
including pandemic readiness and  
stockpiling. New contracts were signed  
with Singapore and New Zealand  
governments and discussions began with  
the World Health Organisation (WHO) about  
our capacity to support developing countries  
in the event of a pandemic.  
manufactured using cell-based technology.  
On 15 July, the Therapeutic Goods  
The potential to drive growth through  
geographic expansion of the combined  
portfolio was a key factor in our decision to  
acquire NVS-IV. We achieved a number of  
significant approvals for our differentiated  
products this year.  
Administration approved AFLURIA QUAD™  
for people aged 18 years and above in  
Australia. Manufactured in our Parkville  
facility, AFLURIA QUAD will replace our TIV,  
®
FLUVAX , in the 2017 Southern Hemisphere  
season. We expect approval for the use of  
AFLURIA QUAD in the US in the first quarter  
of financial year 2017.  
*ZOSTAVAX and GARDASIL are trademarks of Merck & Co., Inc.  
16  
Year in Review continued  
Reꢅearꢆꢇ and  
ꢈeꢉelopment ꢊnꢉeꢅtment  
ꢋꢌSꢍ millionꢅꢎ  
CSL has made good progress bringing new  
and improved products to market and our  
strong commitment to investment in research  
and development continues to be reflected in  
pipeline advances.  
An R&D priority is the development of new  
breakthrough medicines such as CSL112,  
a novel formulation of apolipoprotein  
A-I (apoA-I). A Phase IIb global placebo  
controlled, dose ranging study investigating  
the safety and tolerability of multiple dose  
administration of CSL112 in 1,200 patients  
who experienced an acute myocardial  
infarction or heart attack has been completed  
with results from this study and an ongoing  
study in patents with renal impairment  
expected in late 2016 and throughout 2017.  
Research and Development  
Global R&D activities support CSL’s marketed  
products and the development of new  
therapies that align with our technical and  
commercial capabilities in immunoglobulins,  
specialty products, haemophilia and  
ꢃꢖ0  
ꢄ2ꢖ  
ꢄ66  
ꢄ6ꢃ  
614  
In addition to IDELVION and AFSTYLA,  
advancement of the development of  
a family of novel recombinant coagulation  
factor medicines continued during  
coagulation and breakthrough medicines.  
Achieving licenses and expanding the  
medically justified use of therapies in major  
regulatory jurisdictions is a critical objective  
of our R&D programs. During the year, major  
highlights included registration in US and  
European markets of IDELVION, our long-  
acting fusion protein linking recombinant  
coagulation factor IX with recombinant  
albumin for the treatment of haemophilia B,  
and registration in the US of AFSTYLA, our  
novel factor VIII single chain indicated for  
adolescents and adults with haemophilia A.  
For more on these milestones see feature on  
page 32.  
2015-2016, with solid progress also being  
made in unlocking the medical significance  
and value of our specialty plasma-derived  
products. An international Phase III  
study has been successfully completed,  
demonstrating the use of a volume-reduced,  
subcutaneous formulation of C1-esterase  
inhibitor concentrate (C1-Inh) for treatment  
of patients with frequent hereditary  
angioedema (HAE) attacks.  
Significant progress has also been made in  
the earlier stage recombinant monoclonal  
antibody (mAb) projects. A first in human  
study to evaluate the use of a human  
antibody (CSL324) that neutralises G-CSF  
activity for the treatment of inflammatory  
diseases associated with neutrophil infiltration  
was recently commenced following the  
successful completion of non-human primate  
and other studies that demonstrated CSL324  
to be safe and well tolerated. Other advances  
include the continuation of a Phase II study  
for CSL362 (anti-IL-3R mAb) in acute myeloid  
leukaemia and the commencement of an  
exploratory study to evaluate the use of  
CSL362 in systemic lupus erythematosus (an  
autoimmune disease) by our partner Janssen  
Biotech Inc.  
11ꢁ12  
12ꢁ1ꢃ  
1ꢃꢁ1ꢄ  
1ꢄꢁ1ꢀ  
1ꢀꢁ16ꢂ  
New Product Development aꢆtiꢉitieꢅ  
ꢏoꢆuꢅ on innoꢉatiꢉe neꢐ tꢇerapieꢅ ꢏor  
liꢏeꢁtꢇreateninꢑ diꢅeaꢅeꢅꢒ  
®
BERIPLEX , 4 factor Prothrombin Complex  
Market Development ꢅtrateꢑieꢅ ꢅeeꢓ  
to ꢔrinꢑ tꢇerapieꢅ to neꢐ marꢓetꢅ and  
neꢐ indiꢆationꢅꢒ  
Concentrate, received Orphan Drug  
Designation in Japan in March 2016, as a  
first in class therapy to reverse the effects  
of vitamin K antagonists (e.g. warfarin) for  
bleeding related to over-anticoagulation and  
patients needing urgent surgery.  
RESPREEZA, a highly purified alpha-1  
therapy for maintenance treatment to slow  
the progression of hereditary emphysema  
in adults with severe alpha-1 antitrypsin  
deficiency (AATD) was approved in Europe  
in August 2015. Following successful  
approval for the biweekly administration and  
flexible dosing of HIZENTRA subcutaneous  
immunoglobulin last year in the US and  
Europe, approval was granted in Australia in  
April 2016 and a submission for approval was  
made to New Zealand authorities in  
May 2016.  
Life Cycle Management enꢅureꢅ  
ꢆontinuouꢅ improꢉement oꢏ  
eꢕiꢅtinꢑ produꢆtꢅꢒ  
*
Includes R&D for CSL Behring and Seqirus.  
17  
Investment in R&D remains an important  
driver for CSL’s future growth. We have a  
high quality and potentially valuable portfolio  
of projects in various stages of development.  
We continue to make a balanced investment  
in the life cycle management and market  
development of existing products that bring  
short to mid-term commercial benefits, and  
we make strategic investments in longer  
term, higher risk and high opportunity new  
product development activities.  
& Development, Human Resources,  
Our People  
Commercial Operations, Manufacturing,  
Health & Safety and Public Affairs. This  
critical process helps to identify sustainability  
aspects most important to our business and  
stakeholders with the view to identifying  
strengths and opportunities. Results of the  
assessment will be published in late 2016.  
Our people’s expertise and commitment  
are the very foundation on which CSL’s  
continued success in bringing innovative  
and life-saving products to patients has  
been built. At CSL, we offer our people a  
workplace that provides challenging career  
opportunities and a work environment  
that supports their wellbeing and changing  
needs during their career with CSL.  
In October 2015, following its  
implementation of a water scoring  
methodology across all companies for  
the first time, CSL achieved a B- (the  
healthcare and water global 500 average)  
for its submission to CDP Water – an  
investor led initiative to drive transparency  
and continuous improvement in water  
management. CSL was one of 14 Australian  
companies who participated in the initiative.  
Over the reporting period, we are proud  
to note that we have received a number  
of employer awards. CSL Behring Bern  
received the Swiss Employer of the Year  
in the large company category (1,000+  
employees), CSL Behring Marburg was  
awarded the most Family Friendly Company  
in the region, CSL Plasma was awarded  
the 2015 Employer of the Year from the  
Education Corporation of America, and CSL  
Italy was voted a Great Place to Work.  
Corporate Responsibility  
In December 2015, CSL published its  
seventh Corporate Responsibility (CR)  
Report, detailing our performance across  
key sustainability topics. Our performance  
and interactions with stakeholders is guided  
by our long-held values and Code of  
Responsible Business Practice. A full version  
of the report is available on our website,  
www.csl.com.au/corporate-responsibility.  
Sandra Ruckstuhl, Head of Communications at  
Bern, and Uwe Jocham, at that time SVP and  
GM Bern and Lengnau, in receipt of the Swiss  
Employer of the Year Award.  
In addition, in January 2016, CSL was once  
again recognised for strong environmental,  
social and governance (ESG) performance  
with a listing on the FTSE4Good Index  
Series. The globally recognised index is  
designed to measure the ESG performance  
of companies assisting investors with  
investment decisions.  
Over the reporting year, CSL’s Global CR  
Committee concluded our second global  
materiality assessment. The Committee is  
comprised of senior executive members  
from Quality & Business Services, Finance,  
Legal & Risk Management, Research  
18  
This year, the growth of the company has  
provided opportunities for development  
and career advancement for current  
staff. In addition, it has allowed us to  
attract top talent from outside. These  
activities continue to build our pipeline for  
future growth. We continue to also use  
international moves for business needs and  
staff development.  
In respect of gender diversity, CSL’s excellent  
track record in terms of the comparatively  
high representation of women at all levels  
of management was achieved again during  
this financial year. More information on  
CSL’s diversity position and a report on our  
measurable diversity objectives can be found  
in the Corporate Governance Statement (see  
page 46) and is available on our website at  
www.csl.com.au.  
Our Thanks  
With an unwavering focus on our promise  
to patients – to deliver life-saving and  
life-improving therapies that help many  
thousands of people live full lives – it is our  
dedicated management and employees that  
drive our performance.  
Your Board of Directors recognises and  
appreciates their commitment and  
contribution in achieving our obligations  
to stakeholders and most importantly the  
patients who depend on our products for  
their quality of life.  
Our growing and complex international  
business, along with an expanding  
workforce, demands consistent and effective  
management of all data and information  
related to the employment of our people.  
CSL successfully implemented the first  
phase of a new Global Human Resource  
Information System to provide improved  
access to data and reporting capabilities  
and, for employees and managers, the  
ability to access information directly.  
During the upcoming financial year,  
we will continue to expand the  
capabilities of this system.  
CSL is proud of its strong diversity position  
which has been achieved through the  
fostering of a highly inclusive culture. We  
understand that it is critical to continually  
listen to our leaders and employees to  
ensure that this enviable position is not  
compromised. In 2015-2016, we have  
focused ensuring we have a strong  
employee value proposition that will not  
only retain our current talent but support us  
in attracting new talent.  
John Shine AO  
Paul Perreault  
Chairman  
Chief Executive Officer  
and Managing Director  
19  
CSL’s long-held values guide our performance  
and interactions with stakeholders  
Customer Focus:  
We are passionate about meeting the needs of our customers  
Innovation:  
We seek better ways of doing things  
Integrity:  
We are ethical and honest at all times  
Collaboration:  
We work together to achieve better results  
Superior Performance:  
We strive to be the best at what we do  
20  
CSL Behring  
CSL Behring has been at the forefront of biotherapeutics research and development for more than  
100 years. We trace our roots to Emil von Behring, the first Nobel Prize recipient in physiology and  
medicine. CSL Behring and the collective group of CSL businesses have a heritage of outstanding  
contributions to medicine and human health.  
Throughout the years our passion and  
commitment to delivering on our promise  
to save and improve the lives of people  
with rare and serious diseases has remained  
strong. We are proud of our history, and  
we’re excited about the future because  
we are just getting started. Our ability to  
innovate and deliver lifesaving products for  
patients with unmet medical needs around  
the world continues to grow in response to  
the demand for our products.  
the broadest range of quality plasma-  
derived and recombinant therapies in the  
protein biotherapeutics industry, and have  
substantial markets in North America,  
Europe, Asia and Australia.  
We focus on patients  
Recognised and respected  
by patient organisations  
worldwide  
We strive to be the best at what we do,  
and we are proud that our pioneering work  
in developing therapies to treat rare and  
serious conditions has received recognition  
from patient organisations worldwide.  
The people who trust and rely on our  
products come first in everything we do.  
We are keenly aware that our therapies are  
essential to their health and well-being, and  
we bring that sense of purpose to work  
every day. We are passionate about meeting  
the needs of our customers, which begins  
with listening to them and their healthcare  
providers.  
Our products are used around the world to  
treat the following conditions:  
• immune disorders;  
• bleeding disorders;  
• hereditary angioedema;  
This includes the National Hemophilia  
Foundation’s (NHF) 2015 Corporate  
Leadership Award, the 2012 EURORDIS  
(European Organization for Rare Diseases)  
Award, and the 2011 Corporate Award  
from the National Organization of Rare  
Disorders.  
inherited respiratory disease; and  
neurological disorders.  
We work with patient groups, plasma  
donors, researchers, physicians, nurses,  
pharmacists and home healthcare  
companies to achieve better results.  
This includes promoting quality care,  
improving patient access to care, expanding  
educational and outreach efforts, and  
affecting public healthcare policy.  
Today, we are one of the largest and  
fastest growing protein biotherapeutics  
businesses in the world with more than  
1
4,000 employees and conducting business  
in more than 60 countries. We offer  
The thousands of talented employees at CSL  
Behring who share our vision, values and  
passion for saving lives are the engine that  
drives our superior performance.  
21  
Broadest range of therapies  
to treat rare diseases  
Major therapeutic products marketed by CSL Behring  
HAEMATOLOGY  
SPECIALTY CARE  
PULMONOLOGY  
CSL Behring is a global leader in  
immunoglobulins (Ig). Our portfolio of  
innovative medicines includes a wide  
range of recombinant and plasma-derived  
products for treating bleeding disorders,  
and our specialty products treat hereditary  
angioedema and inherited respiratory  
disease.  
®
®
Recombinant Therapies  
C1-Esterase Inbibitor  
n
Respreeza / Zemaira  
®
n
Berinert  
Factor VIII Single Chain  
®
n
Afstyla  
Prothrombin Complex Concentrates  
® ®  
IMMUNODEFICIENCY DISEASES  
®
Beriplex P/N / Confidex / Kcentra  
Fibrinogen Concentrate  
n
Recombinant Factor IX Albumin Fusion Protein  
Intravenous Immunoglobulins  
®
n
Idelvion  
®
n
n
n
Privigen  
®
n
Haemocomplettan P  
®
Factor VIII  
Carimune NF  
Sandoglobulin / Sanglopor  
®
®
®
n
n
n
Helixate FS  
Albumin Management  
CSL Behring also manufactures critical care  
products that are used in cardiac surgery  
and organ transplantation, and to treat  
trauma, shock, burns and acquired bleeding.  
They are also used to reverse the effects of  
warfarin and to prevent haemolytic disease  
of the newborn.  
®
®
Helixate NexGen  
n
n
n
n
Albuminar  
®
Subcutaneous Immunoglobulins  
®
®
Iblias  
Alburex / AlbuRx  
Human Albumin Behring  
Humanalbin  
®
n
Hizentra  
®
Plasma-derived Therapies  
®
Specific Immunoglobulin  
®
Factor VIII and von Willebrand Factor  
n
n
n
n
n
n
n
Beriglobin P  
Berirab P  
Plasma-derived Antithrombin III concentrate  
®
®
n
n
n
n
n
n
Beriate  
®
n
Kybernin P  
®
®
Monoclate P  
Humate P  
Haemate P  
Hepatitis B Immunoglobulin P Behring  
®
®
Other Products  
Rhophylac  
®
®
Tetagam P  
Wound healing therapies are used to facilitate  
®
®
Voncento  
Varicellon P  
World-class R&D: unlocking  
the promise of proteins  
Innovation has been in our DNA since 1916  
and continues at the core of everything  
we do today. Our integrated R&D global  
organisation is driven by an experienced  
team of research experts who work  
collaboratively at worldwide locations.  
They continually explore new innovations  
to unlock the promise of biotherapies. Their  
contributions to medicine and human health  
have been possible because we continually  
grow our investment in R&D.  
healing.  
®
®
Biostate  
Cytogam  
®
n
n
n
Beriplast P Combi-Set  
Fibrogammin P  
Tachocomb*  
®
Factor IX  
®
n
Berinin P  
Mononine  
®
n
Factor I (Fibrinogen)  
Haemocomplettan P / RiaSTAP  
®
®
n
Factor X  
Factor X P Behring  
®
n
Product availability varies from country to  
country, depending on registration status.  
Plasma-derived Factor XIII  
®
®
®
n
Corifact / Fibrogammin P / Cluvot  
For more information about these products,  
see www.cslbehring.com  
Other Products  
®
n
Stimate  
Octostim*  
* Octostim is a trademark of Ferring GmbH  
* Tachocomb is a trademark of Nycomed  
n
22  
CSL Behring continued  
Enhancing patients’ access to care through global advocacy  
Patients around the world with rare and  
serious diseases share the same challenges,  
including the need to build community,  
share information and overcome the  
isolation that so many of them experience.  
CSL Behring’s global advocacy initiatives  
work to partner with patient organisations  
to address these areas and strive to increase  
awareness, diagnosis and treatment of rare  
diseases.  
In the US, there has been a trend of  
PATIENT ADVOCACY GROUPS  
CSL marked World Hemophilia Day 2016  
by contributing more than 1.5 million  
international units (IUs) of treatments for  
haemophilia A and/or von Willebrand  
Disease. The contribution is a part of CSL  
Behring’s three-year promise to provide  
more than 10 million IUs of specialty  
biotherapeutics to World Federation of  
Hemophilia to treat haemophilia in the  
developing world.  
increasing cost sharing for patients and  
other access impediments (like formularies  
and step therapy) to levels that can impede  
needed access and treatment. In Europe,  
CSL Behring is working for timely patient  
access to therapies after a product has been  
licensed. In all jurisdictions, it is critical for  
authorities to recognise the importance  
and special nature of therapies for rare  
and serious conditions and to have access  
policies in place that reflect that.  
We have collaborative relationships with  
patient advocacy groups around the world  
such as the European Organisation for Rare  
Diseases and the National Organization for  
Rare Disorders. On regional and market  
levels, we support numerous patient groups.  
An example of this is the Primary  
Immunodeficiency League in Hong Kong,  
which we support in organising patient  
activities and educational programs. In the  
Nordic Region we contribute to summer  
educational programs for young people with  
bleeding disorders and primary immune  
deficiency from Sweden, Norway, Finland  
and Denmark. These are just a few of the  
many patient advocacy programs that we  
support worldwide.  
Our worldwide advocacy initiatives also  
rely on building stakeholder relationships  
with governments and key opinion leaders.  
We engage with stakeholders in helping  
to inform and shape public policy that  
serves patients’ needs and further enables  
biopharmaceutical innovation and supply.  
For more than a century, we have earned a  
reputation as a passionate yet responsible  
organisation driven to care for patients and  
keep our word, a reputation that is reflected  
in our advocacy initiatives worldwide.  
CSL Behring’s advocacy initiatives rely on  
building stakeholder relationships with  
governments, patient groups and key  
opinion leaders. We also have active  
memberships and leadership roles in trade  
associations that work to advance positive  
policies including BIO and EuropaBio.  
ACCESS TO CARE  
SM  
Of all our advocacy efforts, none is more  
important than enhancing patient access  
to care. We work assiduously to advance  
policies that help ensure patients can  
access their therapies in a timely manner,  
and payers appropriately cover the cost of  
treatment.  
In the US, the Gettin’ in the Game  
Key in these efforts is achieving  
program has been hugely successful in  
helping children with bleeding disorders  
exercise, play sports, learn more about their  
disease and share their experiences with  
others facing similar challenges.  
understanding and focus on the value of  
therapies to patients, their families and  
society, not simply their cost. At CSL  
Behring, we have embarked on an effort to  
share that information with our employees  
as well as external decision makers. All of  
these initiatives are helping to maintain an  
environment that is conducive to patient  
care, commercial operations and innovation.  
23  
Major biotherapies produced by CSL Behring in Australia  
Biotherapies distributed by  
CSL Behring in Australia  
COAGULATION DISORDERS  
IMMUNE DISORDERS AND IMMUNE  
THERAPY  
TOLL FRACTIONATION  
PRIVIGEN®  
(10% liquid intravenous immunoglobulin)  
Coagulation therapies are used to treat bleeding  
disorders such as haemophilia and von Willebrand  
disease.  
In Australia, CSL Behring performs plasma  
fractionation for the National Blood Authority,  
a role pivotal to Australia’s policy of self-  
sufficiency. CSL Behring is also the national  
plasma fractionator of New Zealand, Hong Kong,  
Malaysia, Singapore and Taiwan.  
Immunoglobulins are used to treat  
immunodeficiency, modify the function of the  
immune system, and for protection against  
specific infections.  
HIZENTRA®  
(20% liquid subcutaneous immunoglobulin)  
®
®
®
RHOPHYLAC®  
(human Rh (D) immunoglobulin, for IV use)  
n
Biostate / Aleviate / Voncento  
human coagulation factor VIII/von Willebrand  
factor)  
(
®
n
n
n
Intragam P  
(
RIASTAP®  
(fibrinogen concentrate)  
6% liquid intravenous immunoglobulin for  
intravenous administration)  
®
n
n
MonoFIX -VF  
(
human coagulation factor IX)  
BERINERT®  
(C1 esterase inhibitor)  
®
Intragam 10 NF  
®
Prothrombinex -VF  
(
10% liquid intravenous immunoglobulin for  
intravenous administration)  
(human prothrombin complex)  
FIBROGAMMIN®  
(human coagulation factor XIII)  
®
Evogam  
CRITICAL CARE CONDITIONS  
(16% liquid intravenous immunoglobulin for  
subcutaneous administration)  
Critical care products are used in fluid  
resuscitation, for replacement of albumin, and to  
treat specific factor deficiencies.  
SPECIAL ACCESS SCHEME  
n
n
n
n
n
n
Normal Immunoglobulin-VF  
Under Australia’s Special Access Scheme, CSL  
Behring distributes several additional life-saving,  
plasma products for the treatment of rare  
conditions.  
(
human normal immunoglobulin)  
Rh(D) Immunoglobulin-VF  
human Rh (D) immunoglobulin)  
CMV Immunoglobulin-VF  
human cytomegalovirus immunoglobulin)  
Hepatitis B Immunoglobulin-VF  
human hepatitis B immunoglobulin)  
Zoster Immunoglobulin-VF  
human zoster immunoglobulin)  
Tetanus Immunoglobulin-VF  
human tetanus immunoglobulin)  
®
n
Albumex  
(human albumin)  
(
®
n
Thrombotrol -VF  
(human antithrombin III)  
(
(
(
(
24  
CSL Behring continued  
Delivering on our promise through global expansion  
CSL Behring’s promise to save lives and  
protect the health of people stricken with a  
broad range of serious and chronic medical  
conditions means more than developing  
new therapies, it also means ensuring that  
we make our therapies available to people  
who need them most around the globe. For  
us, this means continuing to expand our  
presence by commencing operations in new  
markets. CSL Behring conducts business in  
more than 60 countries.  
RUSSIA  
Other countries also represent significant  
opportunity for us to bring our products to  
patients in need.  
therapies, and there is opportunity for our  
growing portfolio of recombinant products.  
In Poland, early diagnosis for bleeding  
disorders is much higher than for immune  
deficiencies, at a level comparable to the  
rest of Europe.  
We established a presence in Russia earlier  
this year and we are now licensed to  
market seven products. Today the greatest  
demand in Russia is for factor VIII to treat  
haemophilia A. In addition, CSL Behring  
was the first biotherapeutics company to  
introduce von Willebrand factor in Russia –  
a significant accomplishment that resulted  
in the Russian government including  
CHILE AND TURKEY  
While Chile is a much smaller market than  
Russia or China, CSL Behring is establishing  
a presence and has recently begun licensing  
products. To date, our biggest success  
One of our major achievements this  
year was obtaining reimbursement for  
BERINERT, which is used to treat hereditary  
angioedema. This was a significant  
challenge because there is a single national  
state-owned health fund in Poland.  
®
story is the introduction of HIZENTRA , our  
®
Ig therapy which can be subcutaneously  
administered. When hospitals and  
healthcare centres may be hundreds of miles  
apart, the ability to dose in one’s home is  
transformational.  
HAEMATE under the state coverage  
program.  
Two markets that hold significant potential  
for CSL Behring are Russia and China.  
Immune deficiency is also a therapeutic  
area of need, with low per capita use of  
immunoglobulin (Ig) in Russia. CSL Behring  
launched PRIVIGEN this year and is now  
working to build awareness and increase the  
diagnosis of primary immune deficiency.  
There is much that remains to be done to  
educate patients and doctors in Poland  
about early diagnosis. For example,  
®
CSL Behring is also expanding in Turkey,  
®
RHOPHYLAC use in pregnant women  
®
where BERINERT will represent a significant  
is low, and CSL Behring has introduced  
programs to educate gynaecologists about  
the product and its use. In addition, we  
are still developing the HIZENTRA market,  
aided by a new policy that allows patients to  
take home a three-month supply from the  
hospital.  
innovation that is changing people’s lives as  
we continue to deliver on our promise to  
patients, partners and investors.  
CHINA  
In China, where we are currently licensed  
to sell three albumin brands, sales have  
doubled in the past three years. The  
demand for our albumin products, which  
are used for volume replacement therapies  
and treatments of liver disease, burn and  
trauma, continues to grow. CSL Behring is  
the market leader in albumin in China.  
POLAND  
It is estimated that as many as 75% of  
people in Poland with an immune deficiency  
may be undiagnosed. CSL Behring  
established a direct presence in Poland in  
2012. In the last four years we significantly  
increased sales of PRIVIGEN and are now a  
market leader in immunoglobulins.  
To support future growth in China, we are  
looking beyond albumin and exploring how  
we can reach patients with our recombinant  
factor products as well as other biotherapies  
in the next five to ten years.  
We are also one of the major companies  
in Poland in sales of coagulation factor  
CEO Paul Perreault, GM Russia and CIS Anna  
Drozdova, and VP and GM Intercontinental  
Commercial Operations Markus Staempfli at the  
opening of the branch office in Moscow.  
25  
The power of a team can move mountains  
Climbing a mountain is challenging enough,  
but when the hiker has Alpha-1 Antitrypsin  
deficiency (Alpha-1), it’s a whole other  
story. This rare genetic condition can result  
in serious lung disease and patients often  
suffer from shortness of breath, wheezing,  
chronic bronchitis and asthma.  
year’s trek was different for two reasons.  
She explains, “I really didn’t know if I was  
going to make it. I began to cry, but as I  
looked at my team I knew then there was  
no turning back. They cheered me on,  
step by step, ignoring their own physical  
exhaustion. With our team song, “The  
Fight,” playing faintly from a mobile phone  
and soft words of encouragement beside  
me, “you got this Dee, just a little more to  
go,” I no longer felt my bodily discomfort  
or shortage of oxygen. What I felt was the  
warmth and love of a team of people from  
here and there. People who didn’t know me  
prior to this expedition, or realise that the  
work they do at CSL Behring has already  
enabled me to climb mountains in my life.”  
Dee dedicated this hike to her brother,  
Steve, who also suffered from Alpha-1 and  
passed away just six months before the  
climb. In addition, she had the power of a  
team behind her.  
Dee was accompanied by Tim Grams, an  
experienced hiker and one of CSL Behring’s  
Last August, Dee Meisner (in yellow in  
photo third from right), a police officer from  
Cocoa, Florida and an Alpha-1 patient,  
tackled Mt. Rainier, the highest peak in  
the state of Washington in the US. Despite  
Dee’s condition, which leaves her with  
only 50% lung capacity, she has made a  
personal commitment to increase awareness  
of Alpha-1 by hiking mountains. This was  
her second attempt on Mount Rainier, after  
falling just short of her goal last year. This  
SM  
Gettin’ In the Game athletes who has  
haemophilia A. Dee and Tim were joined  
by 15 CSL Behring employees who were  
chosen at random to join “Team CSL” on  
the full-day, nine-mile round-trip hike. The  
13-hour hike included steep angles, packed  
snow and quick-changing weather, but  
Dee’s determination was infectious and  
the encouragement of her team members  
motivated her to press on to Camp Muir.  
New father and outdoor adventurer inspires others  
Tim Grams lives with his wife, Abby, and  
newborn daughter in Morrison, Colorado.  
Living in Colorado, outdoor adventures are  
an important part of his life.  
experience prolonged or spontaneous  
bleeding, especially into the muscles, joints  
or internal organs.  
in the US. Through this program he shares  
his story with kids to educate them about  
overcoming adversity and the importance of  
remaining active when living with a bleeding  
disorder.  
“Both of my grand uncles had severe  
I enjoy being in the open-air – mountain  
biking, hiking, and skiing,” Tim said.  
Whatever I’m doing I need to be  
haemophilia, so my brother and I were  
diagnosed as infants,” Tim said. “While  
haemophilia impacted a lot of my life  
growing up, I did not let it hold me back  
from doing what I love.”  
“I hope people with bleeding disorders  
have big dreams and realise they can  
still accomplish their goals despite their  
disorder,” added Tim. “Because of  
treatment advancements, such as CSL  
challenged, pushing boundaries.”  
One challenge Tim has faced throughout  
his life is severe haemophilia A. Primarily  
affecting males, haemophilia A is congenital  
and characterised by deficient or defective  
factor VIII. People with haemophilia A may  
A former high school and college swimming  
champion – Tim is a member of CSL  
®
Behring’s AFSTYLA (Antihemophilic Factor  
(
Recombinant), Single Chain) and innovative  
SM  
Behring’s Gettin’ in the Game program  
programs I feel that our future is bright.”  
26  
CSL Behring continued  
CSL Plasma  
Since beginning its program of expansion in  
US Headquarters  
2011, CSL Plasma has grown to become one  
Boca Raton, Florida  
of the largest plasma collection networks in  
the world, providing human plasma to CSL  
Behring for the manufacture and distribution  
of plasma protein biotherapeutics. Its  
expanded laboratory and logistics operations  
have increased CSL Plasma’s testing and  
storage capacity to meet the growing need  
for plasma-derived therapies.  
US Testing Laboratory  
Knoxville, Tennessee  
US Logistics Centres  
Indianapolis, Indiana  
Mesquite, Texas  
EU Headquarters  
Marburg, Germany  
EU Testing Laboratory  
CSL Plasma has collection centres throughout  
the US, Germany and now Hungary, with  
plasma testing laboratories and logistics  
centres in US and Germany.  
Goettingen, Germany  
EU Logistics Centre  
Schwalmstadt, Germany  
The Global and US headquarters of CSL  
Plasma is located in Boca Raton, Florida, with  
the European (EU) headquarters located  
in Marburg, Germany. Within the US and  
Germany, logistics centres are located in  
Indianapolis, Indiana (US), Mesquite, Texas  
(US) and Schwalmstadt, Germany, while the  
plasma testing laboratories are located in  
Knoxville, Tennessee (US) and Goettingen,  
Germany.  
In a highly regulated industry, CSL Behring  
and CSL Plasma use the most sophisticated  
systems and continue to explore avenues of  
innovation.  
27  
Brothers with XLA don’t let it define them  
Jane Chauvin is a busy mother who has three  
active boys. While the boys enjoy outdoor  
sports and appear to be healthy, each suffers  
from Primary Immunodeficiency (PI). The  
boys also have been diagnosed with X-Linked  
Agammaglobulinemia or XLA.  
he was 10 months old. We knew something  
She points out that IVIg has made an  
was wrong. John suffered numerous and  
successive ear infections with two different  
ear tube placements. Ultimately, he endured  
five days in the hospital with a bad case of  
pneumonia. John was always the happy,  
quiet, eat-everything-in-sight baby, but  
one who was constantly suffering these  
ear infections, nasal discharge, and even a  
spontaneous ruptured eardrum. It was all  
very strange and frightening.”  
incredible difference in the health and  
well-being of her sons. Jane says, “In the  
last ten years, we have had perhaps two or  
three ear infections among all three boys.  
Sinus infections are still pretty frequent, at  
least three a year per child, as the IVIg does  
not provide much protection for mucosal  
membranes. Prophylactic antibiotics are  
standard for us during the winter months.”  
XLA is an inherited immunodeficiency disease  
in which patients lack the ability to produce  
antibodies, the proteins that make up the  
gamma globulin or immunoglobulin fraction  
of blood plasma. According to the US based  
Immune Deficiency Foundation, patients with  
XLA are prone to develop infections because  
they lack antibodies. The infections frequently  
occur at or near the surfaces of mucus  
membranes, such as the middle ear (otitis),  
sinuses (sinusitis) and lungs (pneumonia or  
bronchitis), but in some instances infections  
can involve the bloodstream or internal organs  
as well. Gastrointestinal infections can also  
be a problem with abdominal pain, diarrhea  
and poor growth or loss of serum proteins like  
gamma globulin.  
Jane adds that she and her husband are very  
open with their friends, family and community  
about the medical issues their boys face. “We  
encourage our sons to live their life despite  
their disorder. All three are especially active in  
sports. We have soccer in the fall, basketball  
in the winter, baseball in the spring, and  
swimming in the summer. As one might  
imagine, we are one busy family but PI doesn’t  
manage us, we manage it. People who have  
only recently met us are quite surprised to  
hear of the medical issues since John, Connor  
and James act and look like every healthy  
child. We do not treat them as though they  
have a disability; this is not a crutch for them.  
It’s simply THEIR normal.”  
Fortunately, help arrived. “We credit an ears,  
nose and throat (ENT) specialist along with  
our pediatrician in finding out what was  
really wrong with John. They put their heads  
together to find an answer for our baby.  
These doctors recognised there must be a  
deeper issue causing John’s problems that was  
beyond the scope of their specialty areas,”  
she adds. Finally the diagnosis was received  
and a plan for treatment discussed with Jane  
and her husband Charlie. Jane says, “Hearing  
your beautiful baby has a disorder requiring  
lifelong treatment is shocking. However, now  
we know how ‘normal’ life can be with the  
proper diagnosis and treatment.”  
The Chauvin boys with XLA include John,  
who is the oldest. He is 11 and is a rising sixth  
grader. Next, Connor is age eight and will be  
entering the third grade the next school year.  
The youngest, James, is five-years-old and will  
be a first grader in the near future.  
Brothers John, Connor and James at hospital  
receiving their IVIg treatment for their Primary  
Immunodeficiency.  
When Connor and James were born, it did  
not take a year to diagnose them. Jane  
explains, “Since the disorder is genetic,  
we were able to test Connor and James at  
three weeks of age. Both received their first  
intravenous immunoglobulin (IVIg) infusion at  
six weeks of age.”  
As Jane thinks about her sons and the need  
for plasma-based therapies, she states,  
“Plasma donation is essential to the continued  
health of our children. Some 50 years ago all  
three of our incredible children would have  
been dead by the age of five. Without plasma  
donors, they wouldn’t be here. Today, my  
family thanks CSL for all you do.”  
It was the Chauvin’s first son, John, who was  
first diagnosed. According to Jane, “Prior to  
John’s diagnosis we never heard of a Primary  
Immunodeficiency. It wasn’t discovered until  
28  
Seqirus  
While Seqirus was established just one year ago, it has a rich pedigree in influenza vaccine research,  
development and manufacture. As part of CSL, its involvement with influenza dates right back to  
the Spanish flu pandemic of 1918. The experience left an indelible mark on the organisation and has  
now led to the creation of a new global force in the prevention and control of influenza.  
Towards the end of World War I, a deadly  
form of influenza began to spread around the  
world and threatened Australian shores. The  
fledgling CSL swung into action, producing  
tested with great effect during the Asian Flu  
Pandemic in 1957 and the Hong Kong Flu  
Pandemic in 1968/69. The following year the  
company was invited to join a new committee  
time, the US Government and Novartis  
agreed to build a large facility in North  
Carolina to manufacture flu vaccine using  
emerging cell-based technology as part of  
pandemic preparedness plans.  
had important pandemic preparedness  
responsibilities to consider. A strategic  
acquisition was the solution.  
In 2015, CSL acquired the Novartis influenza  
vaccine (NVS-IV) business and combined  
it with bioCSL to create Seqirus, now  
the world’s second largest flu vaccine  
company. The combined business has three  
manufacturing plants, one of which uses a  
novel cell culture technology, a differentiated  
product portfolio, global commercial reach,  
major pandemic contracts and a late stage  
product development pipeline.  
three million doses of a mixed bacterial vaccine to advise the Australian Government on the  
to help protect the nation. The pandemic took  
the lives of 12,000 Australians, but the death  
toll could have been far worse.  
correct flu strains to put in the vaccine  
each season.  
When the Swine Flu Pandemic was declared  
in 2009, CSL was one of the first in the  
world to develop and roll-out a pandemic  
vaccine to global markets. The following year  
its seasonal flu vaccine was associated with  
unexpected reactions in children in Australia,  
which after extensive scientific investigations  
led CSL to change its standard manufacturing  
process. During this time, CSL created  
In 1973, CSL scientists began adapting flu  
strains so they would grow better in eggs  
and shared the resulting ‘seeds’ with all flu  
manufacturers via the WHO. Through the  
70s and 80s, the company began to supply  
flu vaccine to other Southern Hemisphere  
countries. In 1992, CSL’s capabilities were  
further recognised when it was designated a  
WHO influenza collaborating centre.  
During the 1930s influenza was found to  
be caused by a virus, and with World War II  
looming, the race began to develop a new  
vaccine. In 1942, CSL produced one million  
doses of the new virus vaccine using the egg-  
based method pioneered by the Australian  
virologist, Macfarlane Burnet. Seasonal  
production began thereafter, and in 1952,  
CSL was asked to assist the World Health  
Organization (WHO) with global surveillance  
of the ever-changing virus.  
With a century of experience in flu, and  
the combined strength of the bioCSL and  
NVS-IV assets and capabilities, Seqirus is  
well positioned for global leadership. The  
prospect of new technologies and growth  
opportunities in complementary spaces only  
add to the potential. While its rich heritage  
will continue to be a guiding light for the  
business, it’s now time for Seqirus to write its  
very own history.  
bioCSL to focus solely on its important legacy  
activities, in particular flu vaccines.  
After privatisation in 1994, CSL set its sights  
on Northern Hemisphere markets. It initially  
supplied bulk antigen to other manufacturers  
While bioCSL continued to live up to its  
reputation of early, reliable supply of  
flu vaccines to global markets, it lacked  
global scale and questions arose around  
its sustainability. But the company wasn’t  
ready to give up on the flu expertise it had  
developed over the past century. It also  
Regular production of influenza vaccine meant before securing approval of its own seasonal  
that CSL was in a constant state of pandemic  
readiness for Australia. This capability was  
flu vaccine brands in Europe and the US  
during the mid-to-late 2000s. Around this  
100 years of flu  
29  
2009  
1916  
The H1N1 (Swine Flu) pandemic is  
declared. CSL is one of the first to  
produce a vaccine, supplying doses  
to Australia, the US and several other  
countries.  
CSL is established to protect  
Australians from disease threats and  
later locates its production facilities in  
Parkville, Melbourne.  
1
968-69  
Hong Kong flu spreads across the  
world, resulting in 1 million deaths.  
CSL produces 5 million doses of  
vaccine, helping to lessen the impact  
in Australia.  
1918-19  
2015  
To enhance pandemic readiness,  
Novartis and the US Government  
open a state-of-the art facility in the  
US to manufacture flu vaccines using  
cell-culture technology.  
The Spanish flu pandemic spreads  
around the world killing millions of  
people. CSL acts to protect Australia  
by producing three million doses of a  
mixed bacterial vaccine.  
bioCSL acquires the rights to  
commercialise an intravenous  
treatment for acute complicated  
influenza, RAPIVAB™.  
1970  
An influenza committee is established  
CSL acquires the Novartis influenza  
vaccine business and combines it with  
bioCSL to create Seqirus, the second  
largest flu vaccine company in the  
world.  
in Australia to recommend the strains 2010  
1933  
to be included in the vaccine annually.  
CSL is represented on the committee.  
®
CSL’s seasonal flu vaccine, FLUVAX ,  
is associated with unexpected  
reactions in children in Australia.  
Extensive investigations lead CSL to  
manufacturing changes.  
British researchers discover that a  
virus, not bacteria, is the cause of  
influenza.  
1973  
CSL begins to adapt flu strains so  
they grow better eggs. The resulting  
strains are shared with all flu vaccine  
manufacturers via the WHO.  
The FDA approves Seqirus’  
adjuvanted trivalent flu vaccine  
FLUAD™ for use in the US, the only  
licensed seasonal flu vaccine of its  
type in the world.  
1942  
CSL produces influenza virus vaccine  
for the first time, supplying one  
million doses to Australian and British  
armed forces. It protects against two  
strains of the flu virus.  
2011  
The new Novartis facility in the  
US produces its first batches of  
cell-culture influenza vaccine for the  
US Government; a H5N1 pandemic  
vaccine for stockpiling.  
1978  
CSL transitions its seasonal flu  
vaccine from a bivalent (two strains)  
to a trivalent (three strains) vaccine.  
2016  
The FDA approves Seqirus’ cell-based  
quadrivalent flu vaccine, FLUCELVAX  
QUADRIVALENT™ for use in the US,  
the only licensed product of its type in  
the world.  
1951  
CSL becomes a WHO Influenza  
Reference Laboratory to assist with  
surveillance of the ever-changing  
virus in the Southern Hemisphere.  
2012  
1992  
CSL reorganises its Australian  
businesses and creates bioCSL  
to focus on vaccines and  
pharmaceuticals.  
CSL is designated as a WHO Influenza  
Collaborating Centre, strengthening  
its role in the global flu network.  
The Therapeutic Goods Administration  
and the FDA approve Seqirus’  
egg-based four-strained flu vaccine,  
AFLURIA QUAD™ for use in Australia  
and the US respectively, providing  
a broad portfolio of differentiated  
portfolio.  
1
957  
The Asian flu pandemic causes  
around two million deaths worldwide. CSL supplies bulk antigen to flu  
2002  
The FDA approves Novartis’ cell  
culture-based trivalent influenza  
vaccine, FLUCELVAX™ for use in the  
US, the only licensed seasonal flu  
vaccine of its type in the world.  
CSL acts quickly to produce 1.6  
million doses of vaccine to protect  
Australians.  
vaccine to producers in the Northern  
Hemisphere, resulting in year round  
production.  
1
968  
2007  
The WHO begins to recommend a  
fourth strain for inclusion in seasonal  
flu vaccines as industry prepares  
for the phased introduction of  
quadrivalent formulations.  
Seqirus is first to ship seasonal  
influenza vaccines to the US  
market for the 2016/17 flu season,  
demonstrating the company’s  
commitment to early, reliable supply.  
CSL introduces virus splitting  
The FDA approves CSL’s seasonal flu  
technology in the production of its flu vaccine, AFLURIA in the US market.  
vaccines, greatly improving the quality The vaccine is also licensed  
®
of the product.  
in Germany.  
30  
Seqirus continued  
Major vaccines, pharmaceutical and diagnostic products marketed by Seqirus  
INFLUENZA PRODUCTS  
VACCINES & PHARMACEUTICALS  
Seqirus also markets a broad range of vaccines and pharmaceuticals in both Australia and New Zealand:  
Seqirus markets a comprehensive portfolio of influenza products in various countries around the world:  
Seasonal influenza products  
Vaccine  
For the prevention of  
®
^
®
Afluria  
Trivalent influenza vaccine  
ADT Booster  
Diphtheria and Tetanus  
Cholera  
Cervical cancer and genital warts  
Hepatitis B infection  
®
^^  
Aggripal  
Trivalent influenza vaccine, egg-based  
Trivalent influenza vaccine, egg-based  
Adjuvanted trivalent influenza vaccine, egg-based  
Quadrivalent influenza vaccine, cell-based  
Intravenous influenza antiviral  
Dukoral*  
®
Fluvirin  
Gardasil*  
H-B-Vax* II  
Jespect*  
Menjugate*  
Menveo*  
M-M-R*II  
Pneumovax* 23  
ProQuad*  
Rabipur*  
Fluad™  
Flucelvax QIV™  
RapiVab™*  
Japanese encephalitis  
Meningococcal C disease  
Meningococcal (A, C W-135,Y)  
Measles, mumps and rubella  
Pneumococcal infection  
Measles, mumps, rubella and varicella  
Rabies infection  
Pre-pandemic influenza vaccines  
®
Foclivia  
H5N1 influenza vaccine, egg-based  
H5N1 influenza vaccine, egg-based  
®
Aflunov  
^
®
®
®
Also registered as Enzira , Fluvax and Nilgrip in various different markets  
Also registered as Begripal , Fluazur , Sandovac , Agriflu in various different markets  
^
^
®
®
®
®
RotaTeq*  
Vaqta*  
Rotavirus-induced gastroenteritis  
Hepatitis A infection  
Varivax*  
Varicella  
PANDEMIC VACCINES  
Vivotif Oral*  
Zostavax*  
Typhoid infection  
Shingles and Post Herpetic Neuralgia  
®
®
Panvax & Panvax Junior  
H1N1 influenza vaccine, egg-based  
H5N1 adjuvanted influenza vaccine, egg-based  
H1N1 influenza vaccine, egg-based  
H1N1 influenza vaccine, cell-based  
®
®
Panvax & Panvax Junior  
Focetria  
Pharmaceuticals  
For the treatment of:  
Acarizax*  
BenPen*  
Allergies and Asthma  
Bacterial infections  
Celtura  
Burinex*  
Oedema  
Caldolor*  
Copaxone*  
Flomaxtra*  
Fucidin*  
Pain and fever  
Multiple Sclerosis  
Benign prostatic hyperplasia  
Bacterial infections  
Modavigil*  
Palexia*  
Tramal*  
Vesicare*  
Versatis*  
Tetrabenazine*  
Excessive daytime sleepiness in narcolepsy  
Moderate to severe chronic pain  
Moderate to severe pain  
Overactive Bladder Syndrome  
Post Herpetic Neuralgia  
Movement disorders  
Additional products are also marketed in New Zealand only,  
details of which can be found at www.seqirus.com.nz.  
31  
PRODUCTS OF NATIONAL SIGNIFICANCE  
TRADEMARKS  
Seqirus manufactures and distributes a range of uniquely Australian products in the  
national interest under contract with the Commonwealth Department of Health.  
® Registered trademark of CSL Limited  
or its affiliates  
Antivenoms  
* Trademarks of companies other than CSL and referred to on this page are listed below:  
For treatment of envenomation from land snakes:  
Astellas  
Flomaxtra  
Vesicare  
Novartis  
Menjugate  
Menveo  
Rabipur  
n
n
n
n
n
n
Black snake antivenom  
Brown snake antivenom  
Death adder antivenom  
Taipan antivenom  
Tiger snake antivenom  
Polyvalent antivenom  
BioCryst  
RapiVab  
PaxVax  
Sandoz  
Teva  
Vivotif Oral  
BenPen  
Cumberland  
Pharmaceuticals Inc. Caldolor  
Grunenthal GmbH  
Tramal  
Palexia  
Versatis  
Copaxone  
Modavigil  
For the treatment of envenomation from spiders:  
n
n
Funnel web spider antivenom  
Red back spider antivenom  
Valeant  
Valneva  
Tetrabenazine  
Leo Pharmaceutical  
Products Limited AS Burinex  
Jespect  
Dukoral  
For the treatment of envenomation from marine animals:  
Fucidin  
n
n
n
Box jelly fish antivenom  
Sea Snake antivenom  
Stone fish antivenom  
Merck & Co. Inc.  
Gardasil  
H-B-Vax II  
M-M-R II  
Pneumovax  
ProQuad  
RotaTeq  
Vaqta  
Vaccines  
®
n
n
Q-Vax for the prevention of Q fever  
®
Q-Vax Skin Test for the detection of Q fever antibodies  
Varivax  
DIAGNOSTIC PRODUCTS  
Zostavax  
Seqirus develops, manufactures and markets in vitro diagnostic products for  
immunohaematology and snake venom detection.  
n
n
n
n
Reagent Red Blood Cells  
Monoclonal Reagents  
Supplementary Reagents  
Snake Venom Detection Products (used to detect venom in snakebite victims  
and indicate the appropriate monovalent antivenom for treatment).  
32  
Research and Development  
Innovation in coagulation medicines  
CSL has been committed to saving lives  
and improving the quality of life for people  
with bleeding disorders for over a century.  
We remain a world leader in innovative  
coagulation medicines and technologies.  
Our medicines are used to treat patients who  
are deficient in some of their natural blood  
proteins making them vulnerable to crippling  
and life threatening bleeding.  
Our portfolio includes more than a dozen  
coagulation products used for the treatment  
of haemophilia A, haemophilia B and the  
most inherited bleeding disorder in the world,  
von Willebrand disease (vWD). Many of these  
therapies are derived from human plasma. We  
have also now developed new recombinant  
products which offer patients more  
In March 2016, the FDA approved IDELVION  
- CSL’s novel, long-acting albumin fusion  
protein linking recombinant coagulation  
factor IX with recombinant albumin for the  
treatment of haemophilia B.  
The approval of IDELVION is based on results  
from the PROLONG-9FP clinical development  
program. PROLONG-9FP includes Phase I  
through Phase III open-label, multicentre  
studies evaluating the safety and efficacy  
of IDELVION in children and adults (ages 1  
to 61 years) with haemophilia B (factor IX  
levels ≤ 2%). Data from PROLONG-9FP were  
recently published in the American Society of  
Hematology’s publication Blood.  
efficacious and convenient treatment options.  
CSL’s recombinant factor development  
pipeline is built on its strength in protein  
research and development and scientific  
expertise in bleeding disorders, coupled with  
a long-standing commitment to the bleeding  
community.  
CSL’s centenary year is marked with two  
IDELVION is approved for children and adults  
with haemophilia B for routine prophylaxis to  
prevent or reduce the frequency of bleeding  
episodes; on-demand control and prevention  
of bleeding episodes; and the perioperative  
management of bleeding (around the time of  
surgery). It is the first and only haemophilia  
®
special milestones. IDELVION is the first  
®
product and AFSTYLA the second from our  
innovative recombinant factor development  
program to receive US FDA approval during  
2016 adding to our growing portfolio of  
bleeding disorder products.  
33  
B therapy that delivers high-level protection  
with up to 14-day dosing intervals. This dosing  
interval has been achieved while maintaining  
high levels of factor IX activity, above five  
percent over a prolonged period of time.  
This provides excellent bleeding control, and  
reduces the monthly number of units needed  
for prophylaxis therapy thereby potentiating  
improvement of quality of life.  
product for haemophilia A that is specifically  
designed for increased molecular stability  
and duration of action, thereby providing  
long-lasting protection from bleeds with two  
to three times weekly dosing. Once activated,  
AFSTYLA is identical to natural factor VIII.  
AFSTYLA is indicated in adults and children  
with haemophilia A for routine prophylaxis to  
reduce the frequency of bleeding episodes;  
on-demand treatment and control of bleeding  
episodes; and the perioperative management  
of bleeding. The approval of AFSTYLA is  
based on results from the AFFINITY clinical  
development program. AFFINITY includes  
two pivotal and one extension open-label  
multi-centre studies evaluating the safety and  
efficacy of AFSTYLA in children, adolescents  
and adults with haemophilia A.  
IDELVION was also approved by Health  
Canada in March and the European Union  
in May. Additionally, regulatory authorities  
in Australia, Switzerland and Japan are  
currently reviewing our license applications for  
IDELVION. We look forward to bringing this  
innovative treatment option to haemophilia  
B patients in these markets in the coming  
months and years.  
Research and Development Strategy  
Immunoglobulins  
Products such as HIZENTRA and  
PRIVIGEN  
Breakthrough Medicines  
®
Protein-based therapies such  
as anti IL-3R antibody (CSL362)  
and reconstituted High Density  
Lipoprotein (CSL112).  
®
.
Direction: Maintain leadership  
position through focus on  
improved patient convenience,  
yield improvements, expanded  
labels, new formulation science  
and specialty Igs.  
Direction: Develop new protein-  
based therapies for significant  
unmet medical needs and  
multiple indications.  
In May 2016, the second of our developed  
recombinant factors was approved by  
the FDA - AFSTYLA, a novel long-lasting  
recombinant factor VIII single-chain therapy  
for adults and children with haemophilia A.  
AFSTYLA is the first and only single-chain  
Together, these two therapies lead the  
way for our industry-leading portfolio of  
coagulation therapies and exemplify CSL’s  
commitment to save lives and improve  
the quality of life for people with bleeding  
disorders around the world.  
Haemophilia Products  
Specialty Products  
Plasma-derived products such as  
HAEMATE P and recombinant  
For acquired and perioperative bleeding  
®
® ®  
such as BERIPLEX and RIASTAP , and  
® ® ®  
coagulation factors such as  
BERINERT , CORIFACT and ZEMAIRA ,  
for certain types of deficiencies.  
®
®
IDELVION and AFSTYLA .  
Direction: Support and enhance  
plasma products and develop a  
novel recombinant portfolio with  
a focus on scientific and product  
innovation and patient benefit.  
Direction: Leverage our high quality,  
broad specialty plasma products  
portfolio through new markets,  
novel indications and new modes  
of administration.  
34  
Research and Development continued  
Research and  
Development  
employs over  
1,100 scientists  
globally.  
CSL centenary fellowships  
R&D represents both the past and the future  
of CSL. CSL believes Australia’s medical  
research community is world-class and a rich  
source of potential discoveries to address the  
world’s unmet medical needs. With CSL’s  
global R&D hub based in Australia and in  
honour of CSL’s 100th anniversary, CEO and  
Managing Director, Paul Perreault, announced  
at the CSL Centenary Gala event held in  
Melbourne in April 2016, the establishment  
of a new flagship A$25 million fellowship  
program for early stage and translational  
research in Australia.  
The fellowships pay tribute to CSL’s origins by  
supporting Australia’s scientific community.  
Their intent is to foster excellence in Australian  
medical research by supporting mid-career  
Australian scientists to pursue world class  
research in Australian academic institutions.  
The fellowships are primarily awarded  
for discovery and translational research  
with a focus on rare and serious diseases,  
immunology and inflammation.  
The fellowships are overseen by a five person  
Selection Committee, comprising three  
independent members: Professor Ashley  
Dunn; Professor Carola Vinuesa; and Professor  
Stephen Jane, and two CSL representatives:  
Dr Andrew Nash and Dr Andrea Douglas.  
The CSL Centenary Fellowships are high-value  
awards - amongst the highest offered in  
Australia - available to outstanding Australian  
researchers who seek to consolidate their  
career and undertake research in an Australian  
academic institution. Two five-year fellowships  
will be awarded each calendar year, for 10  
years. The total value of each award will be  
A$1.25 million.  
Applications for the first two CSL Centenary  
Fellowships opened on 1 June 2016.  
Fellows will be announced in October  
for commencement 1 January 2017.  
35  
CSL’s Global Research and Development Pipeline Achievements 2015-16  
Research/pre-clinical  
Clinical development  
Registration/post launch  
Market  
development  
Privigen® (10% intravenous Ig) in CIDP in Europe  
Hizentra® (20% subcutaneous Ig) in PID in Japan  
Hizentra® (20% subcutaneous Ig) individualised dosing in Europe and US  
Hizentra® (20% subcutaneous Ig) in CIDP  
Cytogam® (Cytomegalovirus intravenous Ig) in CMV transmission*  
Privigen® Japan  
Respreeza® (Alpha1-Proteinase Inhibitor) in Europe  
Berinert® (C1 Esterase Inhibitor) Subcutaneous  
Beriplex® (Prothrombin Complex Concentrate) for bleeding in Japan  
New  
product  
development  
Idelvion® (rIX-FP)  
Afstyla® (rFVIII-SingleChain)  
CSL689 (rVIIa-FP)  
CSL640 (rIX-FP sub cut)  
CSL626 rD'D3-FP (VIII 1/2 life ext)  
CAM3001 (GMCSFR mAb) in RA - MedImmune*  
CSL112 (ApoA-1) in ACS  
CSL362 (Anti IL-3R mAb) in AML - Janssen*  
CSL324 (Anti-G-CSFR mAb)  
CSL346 (Anti-VEGFB mAb)  
CSL’s pipeline also includes  
life cycle managment projects  
which address regulatory  
post marketing commitments,  
pathogen safety, capacity  
expansions, yield improvements  
and new packages and sizes.  
CSL312 (Anti-FXIIa mAb) in HAE  
CSL334 (Anti-IL-13R mAb) in Asthma - ASLAN*  
Partnered Vaccine Programs*  
P. Gingivalis POD  
Core capabilities  
Immunoglobulins  
Partnered projects  
Breakthrough Medicines  
Haemophilia/Coagulation  
Vaccines and Licensing  
Specialty Products  
*
Important advances in 2015-16  
36  
Directors  
FRCPA, FAHMS -  
l industry  
(resident in Pennsylvannia, US)  
Independent: No  
67)  
ent  
(resident in Western Australia)  
Independent: Yes  
– (Age 61)  
(resident in Victoria)  
Pharmaceutical Industry and Medicine  
resident in New South Wales)  
Industry  
(resident in Pennsylvania, US)  
Independent: Yes  
(
Independent: Yes  
Independent: Yes  
Chief Executive Officer  
and Managing Director  
Mr John Akehurst was appointed to  
the CSL Board in April 2004. He had  
30 years’ executive experience in the  
international hydrocarbon industry,  
including seven years as Managing  
Director and CEO of Woodside  
Mr David Anstice was appointed to  
the CSL Board in September 2008.  
He was a longtime member of the  
Board of Directors and Executive  
Committee of the US Biotechnology  
Industry Organisation, and has over  
45 years’ experience in the global  
pharmaceutical industry. Until his  
retirement in August 2008, Mr  
Mr Bruce Brook was appointed  
to the CSL Board in August 2011.  
He is currently Chairman of  
Chairman  
Professor John Shine AO was appointed Mr Paul Perreault was appointed to  
to the CSL Board in June 2006 and  
became Chairman in October 2011.  
He is Professor of Molecular Biology  
and Professor of Medicine at the  
the CSL Board in February 2013 and  
was appointed as the Chief Executive  
Officer and Managing Director in July  
2013. He joined a CSL predecessor  
company in 1997 and has held  
senior roles in sales, marketing and  
operations with his most recent prior  
position being President, CSL Behring. Exploration Pty Ltd. He was formerly  
Mr Perreault has also worked in senior Chairman of Alinta Limited and  
leadership roles with Wyeth, Centeon, of Coogee Resources Limited and  
Programmed Maintenance Services  
Limited and a Director of Newmont  
Mining Corporation. Mr Brook has  
previously been Chairman of Energy  
Developments Limited and a Director  
of Boart Longyear Limited, Lihir Gold  
Limited and Consolidated Minerals  
Limited. During his executive career,  
he was Chief Financial Officer of  
WMC Resources Limited and prior  
to that the Deputy Chief Financial  
Officer of the ANZ Banking Group.  
Petroleum Ltd. Mr Akehurst is a  
University of NSW, and a Director of  
many scientific research and medical  
bodies throughout Australia. Professor  
Shine is President of the Museum of  
Applied Arts and Science (Powerhouse  
Museum and Sydney Observatory) and  
was formerly Executive Director of the  
Garvan Institute of Medical Research.  
He was also formerly Chairman of the  
National Health and Medical Research  
Council and a Member of the Prime  
Minister’s Science, Engineering and  
Innovation Council. In November 2010,  
Professor Shine was awarded the 2010  
Prime Minister’s Prize for Science.  
member of the Board of the Reserve  
Bank of Australia and is a Director of  
Origin Energy Limited, and Transform  
Anstice was for many years a senior  
executive of Merck & Co., Inc.,  
serving at various times as President  
of Human Health for US/Canada/  
Latin America, Europe and Asia, and  
at retirement was an Executive Vice  
President. He is a Director of Alkermes  
Plc, Dublin, Ireland, and a Director of  
the United States Studies Centre at  
the University of Sydney.  
Aventis Bioservices and Aventis  
is a former Director of Oil Search  
Limited. Mr Akehurst is Chairman  
of the National Centre for Asbestos  
Related Diseases and the Fortitude  
Behring. He was previously Chairman  
of the Global Board for the Plasma  
Protein Therapeutics Association. Mr  
Perreault has had more than 30 years’ Foundation.  
experience in the global healthcare  
Mr Brook is Chairman of the Audit  
and Risk Management Committee  
and a member of the Nomination  
Committee.  
Mr Akehurst is Chairman of the  
industry.  
Human Resources and Remuneration  
Committee and a member of the  
Nomination Committee.  
Mr Anstice is a member of the  
Human Resources and Remuneration  
Committee, the Innovation and  
Development Committee and the  
Nomination Committee.  
Mr Perreault is a member of the  
Innovation and Development  
Committee.  
Professor Shine is Chairman of the  
Nomination Committee and a member  
of the Innovation and Development  
Committee.  
37  
(resident in Victoria)  
Independent: Yes  
l Industry  
(resident in New South Wales)  
Independent: Yes  
BE  
MD, BA - (Age 71)  
International Pharmaceutical Industry  
and Medicine  
(resident in Washington, US)  
Independent: Yes  
e 60)  
gement  
Independent: Yes  
Ms Marie McDonald was appointed  
to the CSL Board in August 2013.  
For many years she has practised  
in company and commercial law  
and she was a partner of Ashurst  
(formerly Blake Dawson) until July  
2014. Ms McDonald was Chair of  
the Corporations Committee of  
the Business Law Section of the  
Law Council of Australia from 2012  
to 2013, having previously been  
the Deputy Chair, and was also a  
member of the Australian Takeovers  
Panel from 2001 to 2010.  
Ms Christine O’Reilly was appointed  
to the CSL Board in February 2011.  
She is a Director of the Transurban  
Group, Energy Australia, Medibank  
Private Limited, Baker IDI and  
Deputy Chair of Care Australia. Ms  
O’Reilly has in excess of 30 years  
financial and operational business  
experience in domestic and off-shore  
organisations. During her executive  
career, she was Co- Head of Unlisted  
Mr Maurice Renshaw was appointed  
to the CSL Board in July 2004.  
Formerly, he was Vice President  
of Pfizer Inc, USA, Executive Vice  
President, Pfizer Global Consumer  
Group and President of Pfizer’s  
Global Consumer Healthcare  
Division. Prior to his positions  
in Pfizer, Mr Renshaw was Vice  
Dr Megan Clark AC was appointed to  
the CSL Board in February 2016. She  
is currently a Director of Rio Tinto and  
a member of the Australian advisory  
board of the Bank of America Merrill  
Lynch. Dr Clark was Chief Executive  
of the Commonwealth Scientific  
Dr Tadataka Yamada was appointed  
to the Board in September 2016.  
He is presently a Venture Partner at  
Frazier Healthcare Partners, a leading  
provider of growth capital to healthcare  
companies, a position that he has held  
since 2015. Prior to this, he was the Chief  
Medical and Scientific Officer at Takeda  
and Industrial Research Organisation  
(CSIRO) from 2009 to 2014. Prior  
President of Warner Lambert Co. and Pharmaceuticals, as well as a member of  
President of Parke-Davis USA. He has  
to CSIRO, she was a Director at NM  
Rothschild and Sons (Australia) and  
was Vice President Technology and  
subsequently Vice President Health,  
Safety and Environment at BHP Billiton  
from 2003 to 2008.  
the Board. Prior to Takeda, Dr Yamada  
was President of the Bill & Melinda Gates  
Foundation Global Health Program and  
prior to that was Chairman of Research  
and Development at GlaxoSmithKline. He  
currently serves as a director of Agilent  
Technologies, Inc. and the Clinton Health  
Access Initiative and a member of the  
Council of the National Academy of  
Medicine. Dr Yamada is also a Fellow  
of the Imperial College of Medicine,  
a Master of the American College of  
Physicians, a Fellow of the Royal College  
of Physicians.  
Infrastructure Investments at Colonial had more than 35 years’ experience  
First State Global Asset Management  
and prior to that was the Chief  
Executive Officer of the GasNet  
Australia Group.  
in the global pharmaceutical  
industry with responsibility for R&D,  
Regulatory, Manufacturing, Finance,  
Marketing and General Management  
across Europe, the US and Asia  
including Japan and China.  
Ms McDonald is a member of  
the Audit and Risk Management  
Committee and the Nomination  
Committee.  
Dr Clark is a member of the Innovation  
and Development Committee and the  
Nomination Committee.  
Ms O’Reilly is a member of the Audit  
and Risk Management Committee,  
the Human Resources and  
Remuneration Committee, and the  
Nomination Committee.  
Mr Renshaw is Chairman of the  
Innovation and Development  
Committee and a member of the  
Nomination Committee.  
Dr Yamada is a member of the  
Innovation and Development Committee  
and the Nomination Committee.  
Edward Bailey  
LLB, BCom, FGIA – (Age 50)  
Company Secretary  
38  
Global Leadership Group  
on AO  
, FAHMS  
MBA, CPA  
Chief Executive Officer  
and Managing Director  
Executive Vice President,  
Legal and CSL Group General Counsel  
President, Seqirus  
Chief Scientific Officer  
and R&D Director  
Paul was appointed to the CSL Board  
in February 2013 and was appointed  
as the Chief Executive Officer and  
Managing Director in July 2013. He  
joined a CSL predecessor company  
in 1997 and has held senior roles  
in sales, marketing and operations  
with his most recent prior position  
being President, CSL Behring. Paul  
has also worked in senior leadership  
roles with Wyeth, Centeon, Aventis  
Bioservices and Aventis Behring.  
He was previously Chairman of the  
Global Board for the Plasma Protein  
Therapeutics Association. Paul has had  
more than 30 years’ experience in the  
global healthcare industry.  
Chief Financial Officer  
(until 31 December 2015)  
David was appointed as Chief Financial  
Officer in January 2016. As Chief  
Financial Officer, he is responsible  
for managing the financial aspects  
of CSL’s strategy which includes  
financial planning and reporting,  
capital management, tax, treasury  
and investor relations. Immediately  
prior to joining CSL, he was the Chief  
Financial Officer and an Executive  
Director at MMG since 2010. Prior  
to this, David served as CFO for  
several leading multi-national public  
companies across a range of industries  
since 1999 – including MMG Limited,  
Oz Minerals Limited, PaperlinX  
Greg was appointed Group General  
Counsel in 2009 and is responsible  
for worldwide legal operations for  
all CSL Group companies. He joined  
CSL in 2001, serving as General  
Counsel for what became the CSL  
Behring business. In addition to his  
legal role, Greg is also responsible for  
overseeing Risk Management and  
Compliance for the Group as well as  
global Communications and Public  
Affairs. Prior to joining CSL, Greg was  
Vice President and Senior Counsel for  
CB Richard Ellis International, after  
working ten years in private  
Andrew was appointed as Chief  
Scientific Officer and R&D Director  
in 2000. He is responsible for CSL’s  
global Research and Development  
operations. Andrew joined CSL in  
Gordon was appointed Chief Financial  
Officer in 2010. He joined CSL in 1987  
and has held many operational and  
corporate roles in different parts of  
the CSL Group. In April 2015, Gordon  
was appointed to a new position as  
President of CSL’s global influenza  
business. Previously, Gordon was  
based in the US and responsible for  
CSL Behring’s global supply chain, the  
supply of plasma for CSL Behring and  
CSL’s global information systems.  
1997 as Director of Research. He  
trained in medicine and science at  
the University of Melbourne, the  
Walter and Eliza Hall Institute, the  
Howard Florey Institute and the  
National Institutes of Health in the US.  
Andrew was then a Senior Scientist at  
Genentech, Inc. in San Francisco.  
legal practice.  
Limited, BHP Billiton’s energy & coal  
and carbon steel materials divisions,  
and Incitec Pivot Limited. He is a  
qualified Chartered Accountant and a  
member of the Institute of Chartered  
Accountants (Australia).  
39  
ional  
Development) – (Age 52)  
e 57)  
52)  
Executive Vice President,  
Executive Vice President,  
Executive Vice President,  
Senior Vice President,  
Quality and Business Services  
Global Commercial Operations  
Senior Vice President,  
Human Resources  
Manufacturing and Planning  
Strategy and Business Development  
Karen was appointed as Executive  
Vice President, Quality and  
Business Services in April 2013  
with responsibility for quality,  
Bob was appointed as Executive  
Vice President, Global Commercial  
Operations in July 2014 with  
Val was appointed as Executive  
Vice President Manufacturing and  
Planning in January 2015. In 1998  
he joined Centeon, a predecessor  
company of CSL Behring, and has  
held a broad range of management  
and R&D positions in the US and  
Switzerland. During his R&D tenure,  
CSL Behring had more than 25  
product or indication approvals in the  
US, Europe and Japan. Prior to his  
current position, Val was Senior Vice  
President, Global Plasma R&D.  
Alan was appointed as Senior Vice  
President, Strategy and Business  
Development in February 2015.  
He is responsible for strategy,  
Laurie was appointed as Senior Vice  
President, Human Resources in March  
2014 and is responsible for leading  
responsibility for a variety of global  
functions including sales, marketing,  
commercial development, medical  
affairs and public policy. Prior  
to joining CSL, he held senior  
management roles at a number of  
pharmaceutical companies including  
Cephalon and Wyeth. Bob has over  
30 years of commercial experience  
including biotech and specialty  
markets.  
Human Resources (HR) practices  
and objectives that focus on talent  
development, reward systems, culture  
development and an employee-  
oriented, high performance culture  
at the CSL Group of Companies.  
She previously served as the Head of  
Human Resources for CSL Behring.  
Laurie has more than 20 years of  
HR experience in both the regional  
banking industry in the US as well  
as in the pharmaceutical industry  
globally.  
information, technology, logistics,  
sourcing, enterprise excellence and  
environment, health and safety.  
Prior to that, she was Executive Vice  
President, Plasma, Supply Chain  
and Information Technology. Karen  
joined CSL as a Product Manager  
at JRH Biosciences in 1991 and  
progressed through a number of  
positions in technical services, quality  
management and research and  
development. Prior to joining CSL,  
she was Director of Developmental  
Research at Endotech Corporation.  
portfolio management and  
business development activities at  
CSL Behring. Prior to joining CSL,  
Alan was Executive Vice President,  
Corporate Development at Auxilium  
Pharmaceuticals. He was previously  
head of corporate strategy for  
Bristol- Myers Squibb and Pfizer,  
and has worked in strategy and  
business development roles at United  
Healthcare and Stanford Medical  
Center. Alan began his career with the  
Boston Consulting Group.  
40  
Share Information  
CSL Limited  
In June 2014, CSL commenced a sponsored  
Level 1 American Depository Receipts (ADR)  
program with the Bank of New York Mellon.  
The sponsored ADR program replaced the  
unsponsored ADR programs that have  
Substantial Shareholders  
In accordance with the CSL Act, CSL’s  
Constitution provides that the votes attaching  
to significant foreign shareholdings are not  
to be counted when they pertain to the  
appointment, removal or replacement of more  
than one-third of the directors of CSL who  
hold office at any particular time. A significant  
foreign shareholding is one where a foreign  
person has a relevant interest in 5% or more  
of CSL’s voting shares.  
Issued Capital Ordinary Shares:  
As at 30 June 2016, Commonwealth Bank of  
Australia and its subsidiaries was a substantial  
shareholder in CSL.  
456,649,152 as at 30 June 2016  
Details of Incorporation  
Voting Rights  
CSL’s activities were carried on within the  
Commonwealth Department of Health until  
the Commonwealth Serum Laboratories  
Commission was formed as a statutory  
corporation under the Commonwealth  
Serum Laboratories Act 1961 (Cth) [the  
CSL Act] on 2 November 1961. On 1 April  
previously operated with CSL’s involvement.  
At a general meeting, subject to restrictions  
imposed on significant foreign shareholdings  
and some other minor exceptions, on a show  
of hands each shareholder present has one  
vote. On a poll, each shareholder present  
has one vote for each fully paid share held in  
person or by proxy.  
The ADR are tradeable via licensed US brokers  
in the ordinary course of trading in the  
Over-The-Counter (OTC) market in the US.  
Particulars for the sponsored ADR program  
are: US Exchange – OTC and DR Ticker  
Symbol – CSLLY.  
Significant Foreign Shareholdings  
As at 30 June 2016, there were no significant  
foreign shareholdings in CSL.  
1991, the Corporation was converted to  
a public company limited by shares under  
the Corporations Law of the Australian  
Capital Territory and it was renamed  
Commonwealth Serum Laboratories Limited.  
These changes were brought into effect by  
the Commonwealth Serum Laboratories  
Distribution of Shareholdings as at 30 June 2016  
Range  
(Conversion into Public Company) Act 1990  
Total Holders  
Units  
% of Issued Capital  
(Cth). On 7 October 1991, the name was  
changed to CSL Limited. The Commonwealth  
divested all of its shares by public float on 3  
June 1994.  
1
- 1,000  
,001 - 5,000  
5,001 - 10,000  
0,001 - 100,000  
00,001 and over  
108,520  
24,239  
4,093  
1,731  
64  
31,961,432  
56,086,670  
28,254,092  
31,292,807  
309,054,151  
456,649,152  
7.00  
12.28  
6.19  
1
The CSL Sale Act 1993 (Cth) amends the  
CSL Act to impose certain restrictions on the  
voting rights of persons having significant  
foreign shareholdings, and certain restrictions  
on CSL itself. CSL ordinary shares have been  
traded on the Australian Securities Exchange  
1
6.85  
1
67.68  
100  
Total shareholders and shares on issue  
138,647  
(ASX) since 30 May 1994. Melbourne is the  
Home Exchange.  
Unmarketable Parcels  
Minimum Parcel Size  
Holders  
Units  
Minimum A$500.00 parcel at A$112.18 per unit  
5
457  
750  
41  
Shareholder Information  
Share Registry for CSL is overseen by  
Computershare. Shareholders with enquiries  
should go to www.investorcentre.com where  
most common questions can be answered  
by virtual agent “Penny”. There is an option  
to contact the Share Registry by email if the  
virtual agent cannot provide the answer.  
Alternatively, shareholders may telephone  
or write to the Share Registry at the  
below address.  
Change of address should be notified to the  
Share Registry online via the Investor Centre at  
www.investorcentre.com, by telephone or in  
writing without delay. Shareholders who are  
broker sponsored on the CHESS sub-register  
must notify their sponsoring broker of a  
change of address.  
CSL now offers shareholders the opportunity  
to receive dividend payments in US dollars  
by direct credit to a US bank account. This  
option is available for the 2016 final dividend  
payment (payment date 7 October 2016).  
Shareholders who wish to avail themselves  
of this payment option for the 2016 final  
dividend payment must provide their valid  
US bank account details to the Share Registry  
by the dividend record date of 14 September  
than one or you wish to be removed from  
the mailing list for the Annual Report, please  
advise the Share Registry. You will continue to  
receive Notices of Meeting and Proxy forms.  
The Annual General Meeting will be held at  
the Function Centre, National Tennis Centre,  
Melbourne Park, Batman Avenue, Melbourne  
at 10:00am AEDT on Wednesday 12 October  
2016. There is a public car park adjacent to  
the Function Centre which will be available to  
shareholders at no charge.  
Direct payment of dividends into a nominated  
account is mandatory for shareholders with  
a registered address in Australia or New  
Zealand. All shareholders are encouraged  
to use this option by providing a payment  
instruction online via the Investor Centre at  
www.investorcentre.com or by obtaining a  
direct credit form from the Share Registry or  
by advising the Share Registry in writing with  
particulars.  
2016.  
Separate shareholdings may be consolidated  
by advising the Share Registry in writing or  
by completing a Request to Consolidate  
Holdings form which can be found online  
at www.investorcentre.com.  
The Annual Report is produced for your  
information. The default option is an  
online Annual Report via CSL’s website  
www.csl.com.au. If you opted to continue to  
receive a printed copy and you receive more  
Share Registry  
Shareholders as at 30 June 2016  
Computershare Investor  
Services Pty Limited  
Shareholders  
Shares  
Yarra Falls, 452 Johnston Street  
Abbotsford VIC 3067  
Australian Capital Territory  
New South Wales  
Northern Territory  
Queensland  
2,263  
40,710  
324  
2,310,237  
192,595,187  
268,615  
Postal Address:  
GPO Box 2975 Melbourne VIC 3001  
15,754  
7,086  
15,738,773  
9,506,034  
Enquiries within Australia:  
1
800 646 882  
Enquiries outside Australia:  
1 3 9415 4178  
South Australia  
Tasmania  
1,543  
1,482,907  
6
Victoria  
43,733  
20,579  
6,655  
217,303,266  
11,947,838  
5,496,295  
Investor enquiries online:  
www.investorcentre.com/contact  
Western Australia  
International Shareholders  
Total shareholders and shares on issue  
Website:  
www.investorcentre.com  
138,647  
456,649,152  
42  
Shareholder Information continued  
CSL’s Twenty Largest Shareholders as at 30 June 2016  
Shareholder  
Shares  
% Total Shares  
1
2
3
4
5
6
7
8
9
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED  
J P MORGAN NOMINEES AUSTRALIA LIMITED  
NATIONAL NOMINEES LIMITED  
123,511,997  
71,444,109  
44,523,907  
25,634,429  
10,257,064  
5,550,968  
3,995,877  
2,301,048  
1,647,652  
1,509,022  
1,495,000  
1,151,376  
1,051,952  
980,947  
27.05  
15.65  
9.75  
5.61  
2.25  
1.22  
0.88  
0.50  
0.36  
0.33  
0.33  
0.25  
0.23  
0.21  
0.17  
0.17  
0.13  
0.13  
0.13  
0.12  
CITICORP NOMINEES PTY LIMITED  
BNP PARIBAS NOMS PTY LTD  
CITICORP NOMINEES PTY LIMITED  
BNP PARIBAS NOMINEES PTY LTD  
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED  
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED  
AMP LIFE LIMITED  
10  
11  
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED  
MUTUAL TRUST PTY LTD  
12  
13  
ARGO INVESTMENTS LIMITED  
14  
CUSTODIAL SERVICES LIMITED  
15  
D W S NOMINEES PTY LTD  
793,090  
16  
NAVIGATOR AUSTRALIA LTD  
781,253  
17  
DIVERSIFIED UNITED INVESTMENT LTD  
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED  
MILTON CORPORATION LIMITED  
600,000  
18  
598,041  
19  
592,198  
20  
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA  
549,810  
Top 20 holders of ordinary fully paid shares  
Remaining holders balance  
298,969,740  
157,679,412  
456,649,152  
65.47  
34.53  
100  
Total shares on issue  
In addition, as at 30 June 2016, a substantial shareholder notice has been received from:  
Commonwealth Bank of Australia and its subsidiaries  
43  
Corporate Governance  
This statement outlines CSL’s principal  
corporate governance practices in  
place during the financial year ended  
The Board and management remain  
committed to continuing to review  
1. THE BOARD OF DIRECTORS  
Relevant governance documents:  
Board also delegates specific responsibilities to  
ad hoc committees from time to time.  
CSL’s corporate governance practices in  
response to changes in market conditions  
or recognised best practices, including the  
implementation of any changes to the  
ASX Corporate Governance Principles and  
Recommendations or ASX Listing Rules.  
CSL has entered into a written agreement with  
each director and senior executive setting out  
the terms of their appointment, including their  
respective roles and responsibilities.  
Board Charter  
Nomination Committee Charter  
30 June 2016. This statement has been  
approved by the Board. Copies of all  
governance documents referred to in this  
statement can be found in the ‘Corporate  
Governance’ section of CSL’s website at  
www.csl.com.au/about/governance.htm.  
The Company Secretary is responsible to  
the Board for ensuring that Board and  
committee procedures are complied with and  
advising the Board and its committees on  
governance matters. The Company Secretary  
is accountable directly to the Board, through  
the Chairman, on all matters to do with the  
proper functioning of the Board. All directors  
have access to the Company Secretary for  
advice and services. The Board approves any  
appointment or removal of the Company  
Secretary.  
1.1 Role of the Board  
The Board has a formal charter documenting  
its membership, operating procedures and the  
allocation of responsibilities between the Board  
and management.  
Throughout the year ended 30 June 2016,  
the Board believes that CSL’s corporate  
governance practices have complied with  
the recommendations contained in the 3rd  
edition of the ASX Corporate Governance  
Council’s Corporate Governance Principles  
and Recommendations’, released in March  
The Board and management maintain  
high standards of corporate governance  
as part of their commitment to maximise  
shareholder value through effective  
strategic planning, risk management,  
transparency and corporate responsibility.  
The Board is responsible for oversight of the  
management of CSL and providing strategic  
direction. It monitors operational and financial  
performance, human resources policies  
and practices and approves CSL’s budgets  
and business plans. It is also responsible for  
overseeing CSL’s risk management, financial  
reporting and compliance framework.  
2014 (the ASX Corporate Governance  
Principles and Recommendations). The  
following table indicates where they are  
dealt with in this statement.  
Directors are entitled to access independent  
professional advice at CSL’s expense to assist  
them in fulfilling their responsibilities. To do  
so, a director must first obtain the approval of  
the Chairman. The director should inform the  
Chairman of the reason for seeking the advice,  
the name of the person from whom the advice  
is to be sought, and the estimated cost of the  
advice. Professional advice obtained in this way  
is made available to the whole Board.  
The Board has delegated the day-to-day  
management of CSL, and the implementation  
of approved business plans and strategies,  
to the Managing Director, who in turn may  
further delegate to senior management. In  
addition, a detailed authorisations policy sets  
out the decision-making powers which may be  
exercised at various levels of management.  
ASX Corporate Governance  
Principles and Recommendations  
Section reference  
in this statement  
Principle 1 – Lay solid foundations for management and oversight  
Principle 2 – Structure the Board to add value  
Principle 3 – Act ethically and responsibly  
1, 2  
1, 4  
3
Details of Board meetings held during the  
year and individual directors’ attendance at  
these meetings can be found on page 54  
of the Directors’ Report attached to the  
financial report.  
In addition, the Board has delegated specific  
authority to five Board Committees that assist  
it in discharging its responsibilities by examining  
various issues and making recommendations  
to the Board. A description of each committee  
and their responsibilities from time to time  
is set out in section 4 of this statement. The  
Principle 4 – Safeguard integrity in corporate reporting  
Principle 5 – Make timely and balanced disclosure  
Principle 6 – Respect the rights of security holders  
Principle 7 – Recognise and manage risk  
4, 5  
4, 6  
6
4, 5  
4, 7  
Principle 8 – Remunerate fairly and responsibly  
44  
Corporate Governance continued  
1
.2 Board Composition  
the ASX Corporate Governance Principles  
and Recommendations, and other facts,  
information and circumstances that the Board  
considers relevant.  
The Chairman of the Board, Professor John  
Shine, is an independent, non-executive  
director. The responsibilities of the Chairman  
are described in the Board Charter. The roles of  
the Chairman and the Managing Director are  
exercised by separate individuals.  
CSL provides its shareholders with all material  
information (that is in CSL’s possession) relevant  
to a decision on whether or not to elect or re-  
elect a director (including any material adverse  
information revealed by the above checks).  
Throughout the year there were between eight  
and nine directors on the Board. Each director,  
their length of service and their status as an  
independent or non-independent director is set  
out below.  
In determining whether an interest or  
relationship is considered to interfere with a  
director’s independence, the Board has regard  
to the materiality of the interest or relationship.  
For this purpose, the Board adopts a  
conservative approach to materiality consistent  
with Australian accounting standards.  
1
.5 Induction of New Directors  
1
.4 Nomination and  
and Ongoing Development  
1.3 Director Independence  
Appointment of Directors  
CSL provides an induction program to assist  
new directors to gain an understanding of:  
The Board considers that an independent  
director is a director who is independent of  
management and free of any interest, position,  
association or relationship that could, or could  
reasonably be perceived to, materially interfere  
with the exercise of their unfettered and  
independent judgement.  
One new director, Dr Megan Clark, was  
appointed to the Board during the financial  
year. Each of Mr David Anstice and Mr Maurice  
Renshaw were re-elected as directors at the  
CSL’s financial, strategic, operational and  
risk management position;  
The Board Charter sets guidelines as to the  
desired length of service of non-executive  
directors. However, fixed tenure limits for non-  
executive directors have not been set. Tenure  
remains a matter for the Board’s discretion on  
a case-by-case basis.  
• the culture and values of CSL;  
2015 Annual General Meeting.  
the rights, duties and responsibilities of the  
directors;  
Prior to the expiry of a director’s current term  
of office, the Board reviews that director’s  
performance.  
Information about any such interests or  
relationships, including any related financial  
or other details, is assessed by the Board to  
determine whether the interest, position,  
association or relationship could, or could  
reasonably be perceived to, materially interfere  
with the exercise of a director’s unfettered  
and independent judgement. As part of  
this process, the Board takes into account  
each of the factors relevant to assessing  
the independence of a director set out in  
the roles and responsibilities of senior  
executives;  
The Board assesses the independence of new  
directors upon appointment, and also makes  
an annual assessment of each non-executive  
director to determine whether it considers the  
director to be independent.  
In addition, before a director is nominated  
for election or re-election, it is CSL’s policy to  
ask directors to acknowledge to the Board  
that they have sufficient time to meet CSL’s  
expectations of them. The Board requires that  
all of its members devote the time necessary  
to ensure that their contribution to CSL is of  
the highest possible quality. The Board Charter  
sets out procedures relating to the removal of  
a director whose contribution is found not to  
be effective.  
the role of the Board committees;  
• meeting arrangements; and  
director interaction with each other, senior  
executives and other stakeholders.  
The Board has determined that all of its non-  
executive directors are independent, and were  
independent for the duration of the reporting  
period. Accordingly, a majority of the directors  
on the Board are independent.  
In addition to the briefing papers, agenda  
and related information regularly supplied  
to directors, the Board has an ongoing  
professional development and education  
program designed to give directors further  
insight into the operation of CSL’s business,  
and to provide opportunities for directors to  
develop and maintain the skills and knowledge  
needed to perform their role as a director  
effectively. The program includes education  
on key developments in respect of CSL and  
the industry and environment within which  
it operates. As part of this program, directors  
have the opportunity to visit CSL’s facilities,  
including all major operating sites in the US,  
Europe and Australia, and to attend meetings  
and information sessions with CSL’s local  
management and employees.  
Length of Service  
In the case of long-serving non-executive  
Directors who are standing for re-election at  
an AGM but who intend to retire from the  
Board within their next term, this intention  
to retire will be clearly disclosed in the AGM  
notice of meeting.  
Director  
(as at 30 June 2016)  
Independent/Non-Independent  
Professor John Shine AO  
Mr Paul Perreault  
10 years  
Independent, non-executive director  
Non-independent, executive director  
Independent, non-executive director  
Independent, non-executive director  
Independent, non-executive director  
Independent, non-executive director  
Independent, non-executive director  
Independent, non-executive director  
Independent, non-executive director  
3 years, 5 months  
12 years, 2 months  
7 years, 9 months  
4 years, 10 months  
0 years, 5 months  
2 years, 10 months  
5 years, 5 months  
11 years, 11 months  
Mr John Akehurst  
Mr David Anstice  
Before a person is appointed as a director, or  
put forward to shareholders as a candidate  
for election as a director, CSL undertakes  
appropriate checks in respect of that person,  
which include checks as to the person’s  
character, experience, education, criminal  
record and bankruptcy history.  
Mr Bruce Brook  
Dr Megan Clark AC  
Ms Marie McDonald  
Ms Christine O’Reilly  
Mr Maurice Renshaw  
The relevant skills, expertise, qualifications and experience of each of the directors are set out in  
the directors’ profiles on pages 36 and 37 of this Report.  
45  
1
.6 Knowledge, Skills  
Board Skills Matrix  
General Experience  
Board Representation  
and Experience  
The Board is looking to maintain an  
appropriate mix of skills and diversity in the  
membership of the Board. This includes  
diversity of skills, experience and background  
in the pharmaceutical industry, international  
business, finance and accounting and  
management, as well as gender diversity.  
Managing and Leading  
9
9
9
9
Success in business at a senior level in a successful career.  
Global Experience  
Senior executive or equivalent exposure to a range of political, cultural, regulatory and business environments.  
Business/Commercial  
Senior executive or equivalent experience in business/commerce in a large business enterprise.  
The following Board skills matrix describes  
the combined capabilities of the Board  
across a range of general and specialist  
areas. The Board considers that collectively  
the directors have the appropriate range  
of skills and experience necessary to direct  
CSL’s businesses and achieve CSL’s strategic  
objectives.  
Strategy  
Track record of developing and implementing successful strategies.  
Governance  
Commitment to high standards of governance, including experience with a large business enterprise which is subject to  
rigorous governance standards.  
9
Specialist Experience  
Industry-specific knowledge  
4
7
Senior executive experience in a large biopharmaceutical, pharmaceutical or medical organisation.  
Finance/Legal/Risk management  
Board audit/risk management membership or senior executive or equivalent experience in financial accounting and reporting,  
corporate finance, internal financial controls or the provision of legal services to large business enterprises.  
Marketing  
Senior executive experience in marketing and a detailed understanding of the Group’s corporate objective to create long-term  
value through the provision of innovative products.  
4
Capital Projects  
8
8
Experience in an industry with projects involving large-scale capital outlays and long term investment horizons.  
Health, Safety & Environment  
Experience related to workplace health, safety, environment and social responsibility within a large business enterprise.  
Remuneration  
Board remuneration committee membership or senior executive or equivalent experience relating to remuneration, including  
incentive programs.  
8
8
5
4
Government Affairs  
Experience in liaising with government and experience with public and regulatory policy.  
R&D/Product Development  
Experience in research and development or product development with a large biopharmaceutical, pharmaceutical or medical  
organisation.  
Manufacturing/Quality  
Experience in manufacturing or quality operations with a large biopharmaceutical, pharmaceutical or medical organisation.  
46  
Corporate Governance continued  
2
. DIVERSITY  
2.2 Gender Diversity at CSL  
2.3 Report on measurable objectives  
for 2015-2016:  
Germany locations, multiple apprenticeships  
are provided by CSL in these fields. In  
the US, partnerships with universities  
exist in CSL’s Kankakee and Boca Rotan  
locations. These partnerships provide both  
intern and job opportunities for students.  
The Broadmeadows facility in Australia  
successfully implemented a graduate  
program where newly graduated university  
students complete multiple six-month  
rotations prior to having the opportunity to  
be placed within CSL.  
CSL has continued to advance its strong  
gender diversity position during 2015-2016,  
ensuring that top talent is attracted to and  
retained within its workforce.  
Relevant governance documents:  
The Diversity Policy includes requirements  
for the Board to set measurable objectives  
for achieving, among other things, gender  
diversity and to assess annually both the  
objectives and CSL’s process towards achieving  
those objectives.  
Diversity Policy  
Code of Responsible Business Practice  
The respective proportions of women and  
men on the Board, in senior executive  
positions (Vice President level and above),  
other management roles and across the whole  
organisation as at 31 December 2015* are set  
out below:  
2
.1 Diversity at CSL  
CSL promotes an inclusive culture, providing  
it with a competitive advantage especially  
when attracting and retaining top talent.  
People serve as the foundation for CSL’s  
business success. CSL remains committed to  
further building on its inclusive culture and  
our people’s capabilities to help ensure strong  
financial performance and sustainable  
business growth.  
In CSL’s 2015 Annual Report, CSL announced  
three measurable objectives for achieving  
gender diversity to be undertaken in the 2015-  
2016 financial year. The Board is pleased to  
report that all objectives were met:  
As a ‘relevant employer’ and as required by  
the Workplace Gender Equality Act 2012,  
CSL lodged its most recent ‘Gender Equality  
Indicators’ (as defined in and published under  
that Act), which can be accessed through the  
WGEA website.  
Talent Access: The hiring manager  
must ensure a balanced slate of  
candidates for review for all Vice  
President level and above positions, to  
ensure there is no gender, age, race or  
other unconscious bias in the selection  
process.  
CSL has focused on ensuring that a broad  
slate of qualified talent is presented to hiring  
managers. During 2015-2016, CSL hired a  
total of 10 roles at the Vice President (VP)  
and above, with four (4) of these 10 hires  
being female.  
• Education Support: In at least 2  
of our 4 major regions (Australia,  
Germany, Switzerland and US), CSL  
will implement programs and hold  
information forums through schools  
and universities to attract women  
to potential careers in science,  
manufacturing and the range of  
opportunities in the biomedical field  
and in CSL.  
CSL’s inclusive culture benefits CSL, work  
teams, our people and the stakeholders that  
it serves around the world. Each employee  
contributes a unique set of capabilities,  
experiences and characteristics. All forms of  
diversity (including but not limited to gender,  
age, ethnicity and cultural background) are  
valued throughout CSL.  
The Board and executive team will continue to  
monitor the percentage of females in senior  
leadership positions and will seek to maintain  
the level of female participation at or above  
3
0% for senior executive positions and at or  
above 40% for other management roles. It is  
encouraging to note that these levels, which  
have been achieved for each financial year  
since (and including) 2012-2013, were achieved  
again for the current financial year.  
In all four of CSL’s major regions, CSL  
has conducted programs at the tertiary  
and undergraduate levels to introduce  
current students to the benefits of  
studying programs focused on science and  
manufacturing. In CSL’s Switzerland and  
Data Analytics/Workforce  
CSL has a Diversity Policy, which confirms  
the importance of diversity and inclusiveness  
to CSL and describes how CSL incorporates  
diversity into its business practices.  
Planning: Through implementation  
of a new Global Human Resources  
Information System, provide  
leaders with access to data that  
will help them understand current  
employee demographic and talent  
data and forecasting for future  
requirements. Enable line managers to  
understand their organisation and key  
gender and age based metrics through  
the implementation of interactive and  
accessible reporting tools. Develop  
a suite of standard reports with key  
gender and age based metrics.  
Board  
Senior Executive  
Management  
Employees  
ale 67%  
ꢀale 69%  
ꢀale 56%  
ꢀale 43%  
ꢁemale 33%  
ꢁemale 31%  
ꢁemale 44%  
ꢁemale 57%  
*
The data does not include employees who joined CSL as part of the Novartis influenza vaccine business acquisition. The Board data is current as at 30 June 2016.  
47  
CSL successfully implemented a new Global  
Human Resources Information System that  
significantly expanded the access to data  
for employees and managers in May 2016.  
Specifically, managers are able to use a  
CSL-customized dashboard and reporting  
capabilities to better understand staff  
demographics, time of service, education,  
experience and other key data points. With  
this information, managers will be better  
equipped to understand their organisation  
and the impact of development and  
and biomedicine. Each major market will  
hold at least two (2) of these programs. We  
will measure the impact of these programs  
by targeting specific programs at chosen  
locations and attendee response ratings.  
3. CORPORATE RESPONSIBILITY  
Relevant governance documents:  
The Code has been distributed to all directors,  
senior executives and employees and a training  
program has been implemented across the  
CSL Group.  
Code of Responsible Business Practice  
Anti-Bribery and Anti-Corruption Policy  
3.3 Internal Whistleblower Policy  
Ensuring a diverse pool of candidates  
for opens roles An inclusive culture  
requires that hiring practices surface the  
best and brightest talent. In 2016-2017, CSL  
will broaden its commitment to ensuring we  
are accessing the best and brightest talent  
in the market without bias. Hiring managers  
must ensure a representative candidate  
pool of diverse and qualified candidates for  
review for all Senior Director level and above  
positions, to ensure there is no gender,  
age, race or other unconscious bias in the  
selection process.  
In accordance with the Code, CSL is committed  
to ensuring that employees, contractors,  
suppliers and partners are able to raise  
CSL’s approach to Corporate Responsibility is  
guided by the CSL group values, the Code of  
Responsible Business Practice (the Code) and  
related policies.  
concerns regarding any illegal conduct or  
malpractice and to have such concerns properly  
investigated. This commitment is implemented  
through CSL’s internal Whistleblower Policy,  
which sets out the mechanism by which  
employees, contractors, suppliers and partners  
can confidently, and anonymously if they  
wish, voice such concerns in a responsible  
manner without being subject to victimisation,  
harassment or discriminatory treatment.  
3.1 Group Values  
hiring decisions. This system provides  
the foundation from which more robust  
workforce planning and talent development  
programs can be launched.  
CSL has developed a set of values (Group  
Values) common to the diverse business units  
that form the CSL Group. The Group Values,  
endorsed by the Board, serve as the foundation  
for every day decision-making. These values  
are superior performance, innovation, integrity,  
collaboration and customer focus.  
2
.4 Measurable objectives supporting  
Gender diversity for 2016-2017  
Improve Selected Diversity Measures  
chosen from Employee Opinion Survey  
The Board has set the following measurable  
objectives for the financial year commencing  
July 2016. These objectives will continue to  
build on successes that CSL has demonstrated.  
CSL will report against these measurable  
objectives in its 2017 Annual Report.  
3.4 Anti-Bribery and Anti-Corruption  
The mindsets, behaviours and decisions  
3
.2 Code of Responsible  
1
of leadership significantly impact the extent  
to which CSL achieves its strategic and  
financial objectives. CSL’s culture is based  
on its Core Values and requires protection  
and advancement through steadfast focus  
from senior executives as we grow, hire  
and promote new leaders. This focus  
requires ensuring that our workforce is  
diverse in terms of gender, age, ethnicity,  
socio-economic status, sexual orientation,  
profession and education. For 2016-2017,  
CSL will strengthen its culture by defining  
the leadership mindsets and behaviours  
that are central to a values-based culture  
where diverse people and perspectives  
are important. We will measure the  
The Code provides a high level policy  
statement on preventing bribery and  
inducements. In addition, the Board has  
adopted an Anti-Bribery and Anti-Corruption  
Policy. This Policy builds on the policy  
statement in the Code and also supports  
the considerable amount of work being  
undertaken in many areas of CSL’s operations  
to ensure that CSL is acting with integrity (one  
of CSL’s core values) at all times.  
Business Practice  
CSL first established a Code in December  
2008, with the current version of the Code  
being adopted by the Board to take effect from  
Supporting Science Education for  
Females CSL is committed to enhancing  
students’ knowledge of careers in science,  
manufacturing and biomedicine as a way  
to increase graduates in these educational  
specialties. CSL will engage students prior to  
meaningful milestones in their education to  
encourage them to choose careers focused  
in science, manufacturing and biomedicine.  
This will be accomplished by identifying  
local secondary schools in all major markets  
for CSL (Australia, Germany, Switzerland,  
UK and US) and partnering with those  
schools to bring students on-site at CSL  
locations and participate in programs where  
the students can experience the types of  
jobs available within science, manufacturing  
1
July 2013. Based upon the Group Values and  
other guiding principles, the Code outlines  
CSL’s commitment to responsible business  
practices and ethical standards. The Code sets  
out the rights and obligations that all directors,  
senior executives and employees have in the  
conduct of CSL’s business, including in relation  
to business integrity, safety and quality of  
products and maintaining a safe and fair  
workplace. CSL also expects that its contractors  
and suppliers will observe the principles set out  
in the Code.  
CSL has established training programs for  
relevant employees across the CSL Group  
to raise awareness of CSL’s ‘zero tolerance’  
approach to bribery and corrupt business  
practices at any level within CSL’s global  
operations.  
effectiveness of our culture through our  
Employee Opinion Survey and create team-  
based action plans to address continuous  
improvement opportunities.  
48  
Corporate Governance continued  
4
. OPERATION OF THE BOARD  
In addition, the Board may establish ad-hoc  
Committees to oversee specific activities. In  
the year ending 30 June 2016, the Board  
established a Capital Structuring Committee  
to oversee the US$500 million (or equivalent  
in foreign currency) private placement offering  
in the US and the re-financing of bank debt  
facilities of US$1.25 billion. The Capital  
Structuring Committee comprised Mr Bruce  
Brook (Chair), Ms Marie McDonald and Ms  
Christine O’Reilly and met on three occasions  
during the year.  
4.3 Performance Evaluation  
The Nomination Committee is responsible for  
periodically evaluating the performance of  
the Managing Director, who in turn evaluates  
the performance of all other senior executives  
and makes recommendations in respect of  
their remuneration. These evaluations are  
based on specific criteria, including CSL’s  
business performance, whether the long term  
strategic objectives are being achieved and  
the achievement of individual performance  
objectives.  
The Nomination Committee meets annually  
to review the performance of the Board,  
individual directors and the Board committees.  
Relevant governance documents:  
Board Charter  
Nomination Committee Charter  
Audit and Risk Management  
Committee Charter  
The Nomination Committee’s review process  
includes seeking relevant feedback from all  
directors and executive management, by way  
of a questionnaire that is circulated to those  
persons, with their responses then collated and  
provided to the Nomination Committee.  
Human Resources and  
Remuneration Committee Charter  
Innovation and Development  
Committee Charter  
Securities and Market Disclosure  
Committee Charter  
The effectiveness of the Board and its  
committees is assessed against the roles and  
responsibilities set out in the Board Charter and  
each Committee Charter. Matters considered  
in the evaluation include:  
These performance evaluations took place in  
accordance with the processes described above  
during the last financial year.  
4
.2 Remuneration of Directors  
and Senior Executives  
4
.1 Board Committees  
the conduct of Board and Committee  
meetings, including the effectiveness of  
discussion and debate at those meetings;  
As described above, CSL has established five  
Board committees, being:  
CSL is committed to ensuring that it has  
competitive remuneration and human  
resources policies and practices that offer  
appropriate and fair rewards and incentives  
to directors and employees in the countries in  
which they are employed. CSL also seeks to  
align the interests of senior management and  
shareholders.  
the Nomination Committee;  
• the effectiveness of the Board’s and  
Committees’ processes and relationship  
with management;  
the Audit and Risk Management  
Committee;  
the Human Resources and Remuneration  
Committee;  
the timeliness and quality of meeting  
agendas, Board and Committee papers and  
secretariat support; and  
the Innovation and Development  
Committee; and  
Details regarding the Human Resources and  
Remuneration Committee charter, and CSL’s  
remuneration policies and practices are set  
out in the Remuneration Report on pages 64  
to 79 of the Directors’ Report attached to the  
financial report.  
the composition of the Board and each  
Committee, focussing on the skills,  
the Securities and Market Disclosure  
Committee.  
experience, expertise and diversity of the  
Board necessary to enable it to oversee the  
delivery of CSL’s objectives and strategy.  
Each Committee is governed by a formal  
Charter setting out its composition, functions  
and responsibilities. Each Committee’s Charter  
is approved by the Board.  
The Remuneration Report includes details of  
the remuneration of directors (executive and  
non-executive) and other key management  
personnel of the CSL Group, details of CSL’s  
short-term incentive plans, and details of CSL’s  
long-term incentive plans.  
The Chairman also holds discussions with  
individual directors to facilitate peer review.  
Details of each Committee meeting held during  
the year and individual directors’ attendance at  
these meetings can be found on page 54  
of the Directors’ Report attached to the  
financial report.  
As a result of the Nomination Committee’s  
most recent annual review, the Nomination  
Committee suggested a number of actions for  
improvement. Actions agreed by the Board in  
response were documented and subsequently  
actioned by the Board.  
A high level description of each committee and  
their responsibilities is set out below.  
49  
Committee  
Members  
Composition  
Key Responsibilities  
Nomination  
Committee  
Prof John Shine  
(Chair)  
• All of the independent, non-executive directors.  
• Reviewing the membership of the Board and ensuring appropriate mix of skills, experience,  
expertise and diversity to enable the Board to oversee the delivery of CSL’s objectives and  
strategy.  
Chaired by Board Chairman.  
Mr John Akehurst  
Mr David Anstice  
Mr Bruce Brook  
In the absence of Board Chairman, chaired by another  
independent, non-executive director elected by the  
members present.  
Reviewing the membership of Board Committees.  
Conducting annual performance reviews of the Board, individual directors and Board  
Committees.  
Dr Megan Clark  
Settling and following the procedure for the selection of new directors for nomination.  
Ms Marie McDonald  
Ms Christine O’Reilly  
Mr Maurice Renshaw  
Audit and Risk Mr Bruce Brook  
• Between three to five directors, all of whom are non-  
executive directors, and one of whom should have financial  
expertise.  
• Overseeing and reviewing CSL’s financial and risk management systems, compliance systems  
and internal control framework (as set out in CSL’s Risk Framework).  
Management  
Committee  
(Chair)  
Ms Marie McDonald  
Ms Christine O’Reilly  
• Overseeing CSL’s system of financial reporting with a view to safeguarding its integrity.  
• Monitoring the activities and effectiveness of both internal and external audit functions.  
Majority of members will be independent directors.  
An independent Chair who is not Chair of the Board.  
Reviewing CSL’s global health, safety and environmental performance.  
In the absence of Committee Chair, chaired by another  
independent, non-executive director elected by the  
members present.  
Human  
Mr John Akehurst  
(Chair)  
At least three non-executive directors.  
• Assisting the Board in fulfilling its responsibilities with respect to human resources and  
remuneration matters.  
Resources and  
Remuneration  
Committee  
Members will be independent directors.  
Chaired by an independent director.  
Mr David Anstice  
• Overseeing the establishment of and regular review of CSL’s diversity policy.  
Ms Christine O’Reilly  
• Reviewing and recommending to the board the design of any share, performance option,  
performance rights, retention and deferred cash incentive plans including performance  
measures and any amendments to such schemes or plans.  
In the absence of Committee Chair, chaired by another  
independent, non-executive director elected by the  
members present.  
Innovation and Mr Maurice Renshaw • At least three directors, being at least two non-executive  
• Overseeing CSL’s technology, research and product development opportunities.  
Development  
Committee  
(Chair)  
directors and the Managing Director.  
Ensuring relevant investments are undertaken in ways that are most likely to create long term  
value for shareholders.  
Prof John Shine  
Mr Paul Perreault  
Dr Megan Clark  
Mr David Anstice  
• Chaired by an independent, non-executive director.  
• In the absence of Committee Chair, chaired by another  
independent, non-executive director elected by the  
members present.  
• Monitoring the strategic direction of CSL’s technology, research and product development  
programs.  
Providing guidance on issues and priorities, additions to the research and development pipeline  
and significant development milestones.  
CSL’s Chief Scientific Officer is a required attendee of  
committee meetings.  
Overseeing the management of risk associated with the research and development projects.  
Securities  
Prof John Shine  
(Chair)  
• A minimum of any two directors, one of whom must be an • Assists CSL in complying with reporting and disclosure obligations under the Corporations Act  
and Market  
Disclosure  
Committee  
independent director.  
and ASX Listing Rules, including continuous disclosure obligations and trading halts.  
Mr Paul Pearrault  
• Chaired by Board Chairman.  
• Approving the allotment and issue, and registration of transfers, of CSL shares.  
In the absence of Board Chairman, chaired by another non- • Overseeing compliance with other formalities which may be urgently required in relation to  
executive director elected by the non-executive directors  
present.  
matters affecting CSL’s share capital.  
50  
Corporate Governance continued  
5
. RISK MANAGEMENT AND FINANCIAL  
5.2 Risk Framework  
• established corporate and business  
strategies are implemented, and objectives  
are achieved;  
implementing, coordinating and facilitating  
the risk management process across the  
CSL Group. This includes quantifying and  
monitoring certain business risks identified  
and evaluated as part of the risk management  
process, including those relating to operating  
systems, the environment, health and safety,  
product quality, physical assets, security,  
disaster recovery, insurance and compliance.  
Each manufacturing site and each major  
function in the Group has its own Risk  
Management Committee which reports to  
the Operational Risk Management Team on  
a quarterly basis.The CSL Group also has a  
Global Risk and Insurance Manager who is  
responsible for monitoring and coordinating  
the implementation of the Risk Framework  
throughout the CSL Group. The governance  
and oversight of risk management as described  
above is illustrated below.  
REPORTING  
CSL has adopted and follows a detailed and  
structured Risk Framework to ensure that risks  
in the CSL Group are identified, evaluated,  
monitored and managed. This Risk Framework  
sets out the risk management processes and  
internal compliance and control systems, the  
roles and responsibilities for different levels  
of management, the matrix of risk impact  
and likelihood for assessing risk and risk  
management reporting requirements.  
Relevant governance documents:  
any material exposure to risk is identified  
and adequately monitored and managed;  
Audit and Risk  
Management Committee Charter  
Corporate Responsibility Report  
Code of Responsible Business Practice  
• significant financial, managerial and  
operating information is accurate, relevant,  
timely and reliable; and  
there is an adequate level of compliance  
with policies, standards, procedures and  
applicable laws and regulations.  
5.1 Role of the Audit and Risk  
Management Committee  
The risk management processes and internal  
compliance and control systems are made up  
of various CSL policies, processes, practices  
and procedures, which have been established  
by management and/or the Board to provide  
reasonable assurance that:  
As part of the Risk Framework, an Operational  
Risk Management Team of responsible  
executives reports to a Global Risk Leadership  
Team which in turn reports to the Audit and  
Risk Management Committee, including as  
to the effectiveness of CSL’s management of  
material risks. These teams are responsible for  
The Audit and Risk Management Committee  
assists the Board in overseeing the integrity  
of financial reporting, the effectiveness of risk  
management and compliance systems and  
internal control framework and the external  
and internal audit functions.  
The Audit and Risk Management Committee  
has (in conjunction with management)  
reported to the Board as to CSL’s effective  
management of its material business risks in  
respect of the financial year ended 30 June  
Board  
Responsibility  
2016.  
Senior executives and internal and external  
auditors frequently attend meetings on  
invitation by the Audit and Risk Management  
Committee. The Audit and Risk Management  
Committee holds regular meetings with both  
the internal and external auditors without  
management or executive directors present.  
Any director who is not a member of the Audit  
and Risk Management Committee may attend  
any meeting of the committee in an ex-officio  
capacity.  
Oversight of Risk  
Audit & Risk  
Internal Audit  
Management and materiality  
Management Committee  
Implementation of process  
and Board reporting  
Global Risk  
Leadership Team  
SD/GRIM/Insurance  
Specialist Risk Strategy and  
implementation of standards  
IA  
Strategy  
CSLB  
ComOps  
Global  
Quality  
R&D  
Finance  
Governance &  
Sustainability  
Quality &  
Business Services  
Oversight and implementation  
Risk Framework for BU application  
Operational Risk  
Management Team  
Logistics  
Legal  
EHSS  
MBR  
BERN  
KAN  
PLASMA  
BMW  
PKV  
SEQIRUS  
LVP  
SOURCING  
BT  
HS  
51  
The oversight of risk management associated  
with research and development projects is  
one of the responsibilities of the Innovation  
and Development Committee (see above). The  
research and development operations have  
a number of management committees that  
report into the Innovation and Development  
Committee.  
5.4 External Auditor  
5.5 Internal Auditor  
5.6 Integrity in Financial Reporting and  
Regulatory Compliance  
One of the chief functions of the Audit and  
Risk Management Committee is to review and  
monitor the performance and independence  
of the external auditor. CSL’s external auditor  
for the financial year was Ernst & Young, who  
were appointed by shareholders at the 2002  
Annual General Meeting.  
Another important function of the Audit and  
Risk Management Committee is to review  
and monitor the performance of CSL’s internal  
audit operation. CSL’s internal auditor for the  
financial year was PricewaterhouseCoopers.  
The Board is committed to ensuring the  
integrity and quality of its financial reporting,  
risk management and compliance and control  
systems.  
The role of CSL’s internal audit function is to  
provide independent and objective assurance  
to the Audit and Risk Management Committee  
and executive management regarding the  
effectiveness of CSL’s risk management  
processes (including the state of any material  
risks) and internal compliance and control  
systems.  
Prior to giving their directors’ declaration in  
respect of the annual and half-year financial  
statements, the Board requires the Managing  
Director and the Chief Financial Officer to sign  
written declarations to the Board that, in their  
opinion:  
The oversight of the management of  
risks which are not the subject of the Risk  
Framework or associated with research and  
development projects, such as strategic  
and reputational risk, is a responsibility  
of the Board.  
The Audit and Risk Management Committee  
has established a policy in relation to the  
engagement of the external auditor for non-  
audit services so as to ensure the independence  
of the external auditor.  
the financial statements and associated  
notes comply with IFRS Accounting  
Standards as required by the Corporations  
Act, the Corporations Regulations and the  
CSL Group Accounting Policies;  
The signing partner for the external auditor  
is normally to be rotated at least every five  
years, and the auditor is required to make an  
independence declaration annually. CSL notes  
that, in accordance with the requirements  
of the Corporations Act, the Board and the  
Audit and Risk Management Committee  
approved Mr Glenn Carmody to act as the  
signing partner for Ernst & Young for a  
sixth year in 2015-2016 (as a result of some  
changes in personnel at Ernst & Young which  
directly affected the transition plans for the  
replacement of Ernst & Young’s signing  
partner). Mr Rodney Piltz has been approved  
to act as the signing partner for Ernst & Young  
for the 2016-2017 financial year.  
Risk assessment and management policies are  
reviewed periodically, including by the CSL  
Group’s internal audit function.  
As noted above in section 5.2, the internal  
compliance and control systems are made up  
of various CSL policies, processes, practices and  
procedures.  
5.3 Sustainability Risks  
• the financial statements and associated  
notes give a true and fair view of the  
financial position as at the relevant balance  
date and performance of CSL for the  
relevant period then ended as required by  
the Corporations Act;  
An internal audit plan is prepared by the  
internal auditor, and reviewed and approved by  
the Audit and Risk Management Committee  
on an annual basis (for the upcoming financial  
year). The internal audit plan seeks to cover,  
over a rolling basis, all significant activities of  
CSL, including its controlled entities and their  
operations.  
In the course of CSL’s business operations,  
CSL is exposed to a variety of risks that are  
inherent to the pharmaceutical industry, and  
in particular the plasma therapies industry. Key  
business/industry risks are tabled in section 5  
of the Director’s Report (see pages 56 to 59 of  
this Report) and key financial risks are tabled in  
Note 11 to the Financial Statements (see pages  
that CSL’s financial records for the relevant  
period have been properly maintained in  
accordance with the Corporations Act; and  
In addition, CSL’s internal auditor may be  
requested to perform investigative reviews  
on suspected fraudulent activities or  
100 to 105 of this Report).  
• they have established and maintained an  
adequate risk management and internal  
compliance and control system to facilitate  
the preparation of a reliable financial report  
and the maintenance of the financial  
records, which, in all material respects,  
implements the policies adopted by the  
Board, and the statements made above are  
based on that system, which is operating  
effectively.  
In addition, further detail regarding CSL’s  
ongoing efforts to operate ethically and  
responsibly in respect of sustainability are set  
out in CSL’s annual Corporate Responsibility  
Report.  
The external auditor attends each Annual  
General Meeting and is available to answer  
questions from shareholders relevant to the  
audit and the preparation and content of the  
auditor’s report.  
Whistleblower complaints. In line with CSL’s  
Whistleblower Policy, any complaint made  
against the Managing Director, any member of  
CSL’s Global Leadership Group or any regional  
Whistleblower reports co-ordinator, must be  
investigated by CSL’s internal auditor, and the  
internal auditor’s written report in respect of  
that investigation must be provided directly to  
the Audit and Risk Management Committee.  
These written declarations were received by  
the Board prior to its approval of the financial  
statements for the financial year ended 30 June  
2016.  
52  
Corporate Governance continued  
6. MARKET DISCLOSURE  
6.2 Shareholder Communication  
To ensure that shareholders and other  
7. SECURITIES DEALING  
stakeholders have a full understanding of CSL’s  
performance and strategies, CSL will convene  
a number of analyst briefings and investor  
presentations and roadshows each year. These  
updates provide an opportunity for analysts  
and investors to speak directly with senior  
management and ask questions.  
In addition to its formal disclosure obligations  
under the ASX Listing Rules and the  
Corporations Act, the Board uses a number  
of additional means of communicating with  
shareholders and investors. These include:  
Relevant governance documents:  
Relevant governance documents:  
– Securities Dealing Policy  
Communications and  
External Disclosure Policy  
By promoting director and employee  
the half-year and annual report and  
Shareholder Review;  
ownership of shares, the Board hopes to  
encourage directors and employees to become  
long-term holders of CSL securities, aligning  
their interests with those of CSL. CSL, and its  
equity-based remuneration scheme, do not  
condone short-term or speculative trading in  
CSL securities by directors and employees, nor  
do they permit directors or employees to enter  
into any price protection arrangements with  
third parties to hedge such securities or margin  
loan arrangements in relation to CSL securities.  
6
.1 Communications and  
External Disclosure  
The Board is committed to monitoring  
ongoing developments that may enhance  
communication with shareholders,  
including technological developments,  
regulatory changes and the continuing  
development of ‘best practice’ in the  
market, and to implementing changes to  
CSL’s communications strategies whenever  
reasonably practicable to reflect any such  
developments.  
posting media releases, public  
announcements, notices of general  
meetings and voting results, and other  
investor related information on CSL’s  
website; and  
CSL has a Communications and External  
Disclosure Policy. This policy operates in  
conjunction with CSL’s more detailed internal  
continuous disclosure policy. Together,  
these policies are designed to facilitate CSL’s  
compliance with its obligations under the ASX  
Listing Rules and the Corporations Act by:  
annual general meetings, including  
webcasting which permits shareholders  
worldwide to view proceedings.  
providing guidance as to the types of  
information that may require disclosure,  
including examples of practical application  
of the rules;  
CSL has a dedicated Governance page on  
CSL’s website (see www.csl.com.au/about/  
governance.htm), which supplements the  
communication to shareholders in the annual  
report regarding CSL’s corporate governance  
policies and practices. The Communications  
and External Disclosure Policy outlines the  
ways in which CSL seeks to communicate  
and interact with shareholders, facilitate  
and encourage participation at shareholder  
meetings and how shareholders may elect to  
receive electronic communications from, and  
communicate electronically to, CSL.  
CSL has a comprehensive securities dealing  
policy which applies to all directors and  
employees. The policy aims to inform directors  
and employees of the law relating to insider  
trading, and provide them with practical  
guidance for avoiding unlawful transactions in  
CSL securities.  
providing practical guidance for dealing  
with market analysts and the media;  
identifying the correct channels for passing  
on potentially market-sensitive information  
as soon as it comes to hand;  
A copy of CSL’s Securities Dealing Policy has  
been lodged with the ASX in accordance with  
Listing Rule 12.9.  
establishing regular occasions at which  
senior executives and directors are actively  
prompted to consider whether there is any  
potentially market-sensitive information  
which may require disclosure; and  
allocating responsibility for approving the  
substance and form of any public disclosure  
and communications with investors.  
John Shine AO  
Chairman  
17 August 2016  
53  
5
6
4
2
DIRECTORS’ REPORT  
CSL Limited  
AUDITOR’S INDEPENDENCE DECLARATION  
Financial Report  
81 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME  
8
8
8
8
2
3
4
5
CONSOLIDATED BALANCE SHEET  
2015–2016  
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY  
CONSOLIDATED STATEMENT OF CASH FLOWS  
NOTES TO THE FINANCIAL STATEMENTS  
120 DIRECTORS’ DECLARATION  
121 INDEPENDENT AUDITOR’S REPORT  
54  
Directors’ Report  
1
.
Directors  
2. Company Secretaries  
The Board of Directors of CSL Limited  
The following persons were Directors of CSL during the whole  
of the year and up to the date of this report:  
Mr E H C Bailey, B.Com/LLB, FGIA, was appointed to the  
position of Company Secretary on 1 January 2009 and  
continues in offi ce at the date of this report. Mr Bailey joined  
CSL in 2000 and had occupied the role of Assistant Company  
Secretary from 2001. Before joining CSL, Mr Bailey was a Senior  
Associate with Arthur Robinson & Hedderwicks. On 16 August  
(CSL) has pleasure in presenting their  
Professor J Shine AO (Chairman)  
report on the consolidated entity for  
the year ended 30 June 2016.  
Mr P R Perreault (Chief Executive Offi cer and Managing  
Director)  
2
011, Mr J A G Levy, CPA, was appointed as Assistant Company  
Mr J H Akehurst  
Secretary. Mr Levy has held a number of senior fi nance positions  
within the CSL Group since joining CSL in 1989.  
Mr D W Anstice  
Mr B R Brook  
3. Directors’ Attendances at Meetings  
Ms M E McDonald  
The table below shows the number of directors’ meetings  
held (including meetings of Board Committees) and number  
of meetings attended by each of the directors of CSL during  
the year. In addition, a Capital Structuring Committee was  
set up to oversee the up to US$500 million (or equivalent in  
foreign currency) private placement offering in the US and  
the re-financing of existing and new debt facilities of up to  
US$1.25 billion. The Capital Structuring Committee comprised  
Mr B R Brook (Chair), Ms M E McDonald and Ms C E O’Reilly  
and met on three occasions during the year. The directors also  
visited various of the CSL Group’s operations inside and outside  
Australia and met with local management.  
Ms C E O’Reilly  
Mr M A Renshaw  
Dr M E Clark AC was appointed as a Director on 16 February  
2
016 and continues in offi ce as at the date of this report.  
Particulars of the directors’ qualifications, independence,  
experience, all directorships of public listed companies held for  
the past three years, special responsibilities, ages and the period  
for which each has been a director are set out in the Directors’  
Profiles section of the Annual Report and on CSL’s website,  
www.csl.com.  
Audit & Risk  
Management  
Committee  
Human Resources  
& Remuneration  
Committee  
Innovation &  
Development  
Committee  
Board of  
Directors  
Securities & Market  
Disclosure Committee  
Nomination  
Committee  
A
8
7
8
8
B
8
8
8
8
2
8
8
8
8
A
B
A
A
B
A
B
A
9
7
7
9
B
9
9
9
9
3
9
1
1
J Shine  
3
12  
6
4
4
1
J H Akehurst  
D W Anstice  
B R Brook  
8
8
8
3
2
6
3
4
1
4
4
1
1
5
5
5
5
3
4
4
3
2
2
M E Clark  
3
1
4
1
2
1
M McDonald  
P R Perreault  
C E O’Reilly  
M A Renshaw  
8
5
3
8
9
2
8
8
8
5
13  
4
1
5
8
8
9
9
9
9
1
2
4
1
Attended for at least part in ex officio capacity  
Attended for at least part by invitation  
A
B
Number of meetings (including meetings of Board Committees) attended during the period.  
Maximum number of meetings that could have been attended during the period.  
2
55  
4
.
Principal Activities  
(b) Operating Review  
chronic inflammatory demyelinating polyneuropathy (CIDP).  
The introduction of IG IsoLo , a manufacturing step to reduce  
®
The principal activities of the consolidated entity during the  
fi nancial year were the research, development, manufacture,  
marketing and distribution of biopharmaceutical and allied  
products.  
CSL Behring product sales of US$5,245 million increased  
10% at constant currency when compared to the prior  
comparable period.  
isoagglutinin levels which contributes to further improving the  
product safety profile, has been well received. In Australia,  
®
Privigen was introduced into the market following a successful  
Immunoglobulin product sales of US$2,457 million grew  
tender with Australia’s National Blood Authority.  
1
1% at constant currency.  
5.  
Operating and Financial Review  
and Future Prospects  
Haemophilia product sales of US$1,000 million grew 4% at  
constant currency. Plasma derived haemophilia sales grew 14%  
at constant currency. This increase was largely driven by solid  
®
The key growth driver has been Hizentra , CSL Behring’s  
subcutaneous immunoglobulin product where demand has  
been strong in both the US and Europe. Hizentra grew  
sales 31% at constant currency. New patient starts, selective  
partnering in the Specialty Pharmacy segment and the increase  
in home treatment contributed to the strong performance.  
(a) Financial Review  
®
®
demand for Beriate , led by Poland and Germany and successful  
The CSL Group announced a net profit after tax of US$1,242.4  
million for the twelve months ended 30 June 2016, down 10%  
when compared to the prior comparable period. Underlying  
Net Profit after Tax at constant currency grew 5.2% when  
compared to the prior comparable period. Sales Revenue  
was US$5,909.5 million, up 8.6% on an underlying constant  
currency basis when compared to the prior comparable period,  
with research and development expenditure of US$613.8  
million. Cash fl ow from operations was US$1,178.6 million.  
®
tenders in Russia and Iran. Strong demand for Humate in the  
US also contributed.  
1
,2  
The strong growth in plasma derived therapies was offset to a  
Demand for intravenous immunoglobulin has also been solid led  
®
large extent by the decline in sales of Helixate , CSL’s licensed  
®
by Privigen , which delivered sales growth of 7% at constant  
recombinant factor VIII product. Competition in this market  
continues to increase with the launch of new generation  
recombinant FVIII products including CSL’s recently  
currency. In the US, market share was maintained in the highly  
competitive hospital setting. In Europe, Privigen saw strong  
growth, especially in France and UK, driven by Privigen’s  
expanded indication to include its use in the treatment of  
®
®
®
approved Afstyla .  
1
2
Constant currency removes the impact of exchange rate movements to facilitate comparability of operational performance for the  
Group. This is done in three parts: a) by converting the current year net profit of entities in the group that have reporting currencies other  
than US Dollars, at the rates that were applicable to the prior comparable period (translation currency effect); b) by restating material  
transactions booked by the group that are impacted by exchange rate movements at the rate that would have applied to the transaction if  
it had occurred in the prior comparable period (transaction currency effect); and c) by adjusting for current year foreign currency gains  
and losses (foreign currency effect). The sum of translation currency effect, transaction currency effect and foreign currency effect is the  
amount by which reported net profit is adjusted to calculate the result at constant currency.  
Underlying Net Profit after Tax at constant currency  
At the time of the 2015 results CSL provided guidance to the market excluding the Novartis Influenza business (NVS-IV) that was acquired  
by the Group on 31 July 2015. Guidance to the market was presented excluding the anticipated fi nancial performance of NVS-IV given the  
uncertainty around that performance at the time of the publication of the 2015 results.  
There are three elements that bridge the constant currency result noted above to the Underlying Net Profit after Tax at constant currency:  
a) Operational Performance NVS-IV NPAT ($205.5m)  
Operational performance of the NVS-IV business – the business recorded a Net Loss after Tax of $205.5m  
Summary NPAT  
Reported net profit after tax  
Translation currency effect (a)  
Transaction currency effect (b)  
Foreign Currency losses (c)  
US$1,242.4m  
US$85.5m  
US$(7.7m)  
US$37.2m  
US$1,357.4m  
b) One off items NPAT ($86.6m)  
One off items comprise acquisition and integration costs that were incurred during the year. Acquisition costs include professional fees  
and travel. Integration costs are those costs incurred in bringing the acquired business into the CSL Group, these include salary costs,  
professional fees and travel. Together acquisition and integration costs are $86.6m after tax – these costs have been charged to the income  
statement of the Group.  
Constant currency net profit after tax *  
c) Gain on acquisition NPAT $176.1m  
a) Translation currency effect NPAT $85.5m  
The acquisition gave rise to a gain as the fair value of net assets acquired was greater than the consideration paid. Full details of the gain  
are included in the fi nancial statements in Note 1b.  
Average Exchange rates used for calculation in major currencies (twelve months to June 16/June 15) were as follows: USD/EUR (0.90/0.82);  
USD/CHF (0.98/0.94).  
Constant currency net profit after tax *  
Operational performance of NVS-IV (a)  
One-off items (b)  
US$1,357.4m  
US$205.5m  
US$86.6m  
b) Transaction Currency Effect ($7.7m)  
Transaction currency effect is calculated by reference to the applicable prior year exchange rates. The calculation takes into account the  
timing of sales both internally within the CSL Group (ie from a manufacturer to a distributor) and externally (ie to the fi nal customer) and  
the relevant exchange rates applicable to each transaction.  
Gain on acquisition (c)  
FY16 underlying constant currency NPAT  
US$(176.1m)  
US$1,473.4m  
c) Foreign currency effect NPAT $37.2m  
Foreign currency losses during the period as recorded in the fi nancial statements.  
Summary Sales  
Reported sales  
US$5,909.5m  
US$300.1m  
US$6,209.6m  
US$283.8m  
US$5,925.8m  
Currency effect  
Constant currency sales (Group)  
NVS-IV sales  
*
Constant currency net profit after tax and sales have not been audited or reviewed in accordance with Australian Auditing Standards.  
Underlying FY16 Sales  
56  
Directors’ Report continued  
Specialty products sales of US$977 million grew 11% at  
constant currency. Sales of Kcentra (4 factor pro-thrombin  
complex concentrate) in the US were strong driven by our fully  
established sales force and greater brand awareness.  
On 3 August 2015, CSL announced the closing of the  
acquisition of the Novartis’ global influenza vaccine  
business for US$275 million;  
CSL intends to develop new products which are protected by  
its own intellectual property and which are high margin human  
health medicines marketed and sold by CSL’s global operations.  
®
On 12 August 2015, CSL announced its full year results for  
the year ending 30 June 2015;  
This is underpinned by CSL’s research and development strategy  
that comprises four main areas:  
®
Berinert (C1-esterase inhibitor concentrate) was another solid  
contributor. Berinert is used for the treatment of acute attacks  
On 9 October 2015, CSL announced the closing of the  
US$500 million (or its foreign currency equivalent) private  
placement offering in the US;  
Immunoglobulins – support and enhance the current  
portfolio with improved patient convenience, yield  
improvements, expanded labels and new formulation  
science;  
®
in patients with hereditary angioedema (HAE). Berinert has  
seen strong growth in Europe due to the increased awareness  
and diagnosis of HAE.  
On 9 October 2015, CSL announced Mr David Lamont had  
been appointed as the new Chief Financial Offi cer of CSL;  
®
Respreeza (Alpha-1 Proteinase Inhibitor) was launched in  
Haemophilia Products – support and enhance the current  
portfolio with new plasma-derived products, recombinant  
coagulation factors and coagulation research;  
a number of European countries following the granting of  
®
On 15 October 2015, CSL announced its intention to  
conduct an on-market buyback of up to A$1 billion;  
marketing authorisation. Respreeza is a maintenance treatment  
for severe Alpha-1 Antitrypsin Deficiency patients and has  
been shown to slow the progression of emphysema. Following  
the initial launch, Respreeza will be rolled out more broadly in  
Europe this year.  
Speciality Products – expand the use of speciality plasma-  
derived products through new markets, novel indications  
and new modes of administration; and  
On 10 December 2015, CSL announced its Research and  
Development Day briefing to Analysts;  
On 21 December 2015, CSL announced that it had put in  
place new debt facilities up to US$1.25 billion;  
Breakthrough Medicines – develop new protein-based  
therapies for significant unmet medical needs and multiple  
indications.  
Albumin sales of US$811 million rose 12% at constant currency,  
driven by ongoing significant global demand particularly  
in China and the US. In China, demand for albumin is  
exceptionally strong and is expected to continue. CSL is well  
positioned with a broad portfolio of products and an extensive  
distribution network that is focused on the fast growing second  
and third tier cities in China.  
On 16 February 2016, CSL announced its half year results  
for the half year ending 31 December 2015;  
Further comments on likely developments and expected  
results of certain aspects of the operations of the consolidated  
entity and on the business strategies and prospects for future  
fi nancial years of the consolidated entity, are contained in the  
Year in Review in the Annual Report and in section 5 (b) of  
this Directors’ Report. Additional information of this nature  
can be found on CSL’s website, www.csl.com.au. Any further  
information of this nature has been omitted as it would  
unreasonably prejudice the interests of CSL to refer further to  
such matters.  
®
On 7 March 2016, CSL announced that Idelvion (rFIX-FP)  
had been approved by the US FDA;  
®
On 12 May 2016, CSL announced that Idelvion (rFIX-FP)  
Seqirus sales of US$652 million refl ect 11 months of sales since  
the acquisition of Novartis’ influenza vaccines business on 31  
July 2015. Sales of influenza vaccine were adversely impacted by  
a mild influenza season in the northern hemisphere. The Seqirus  
business turnaround program remains on track.  
had been approved by the European Commission;  
On 24 May 2016, CSL announced that Flucelvax  
Quadrivalent™ (Influenza Vaccine) had been approved by  
the US FDA; and  
®
On 26 May 2016, CSL announced that Afstyla (rFVIII-  
CSL Intellectual Property revenue of US$123 million declined  
Single Chain) had been approved by the US FDA.  
In the course of CSL’s business operations, CSL is exposed to a  
variety of risks that are inherent to the pharmaceutical industry,  
and in particular the plasma therapies industry. The following  
details some of the key business risks that could affect CSL’s  
business and operations but are not the only risks CSL faces.  
Key fi nancial risks are set out in Note 11 to the Financial  
Statements. Other risks besides those detailed below or in the  
Financial Statements could also adversely affect CSL’s business  
and operations, and key business risks below should not be  
considered an exhaustive list of potential risks that may  
affect CSL.  
10% at constant currency. The prior comparable period  
included a payment from CSL’s licensee Janssen Biotech Inc. to  
develop and commercialise CSL362, a product used to treat  
patients with acute myeloid leukaemia.  
Full details of all information disclosed to the ASX during the  
period under review can be obtained from the ASX website  
(www.asx.com.au).  
Set out below is a summary of the key information disclosed  
to the Australian Securities Exchange (ASX) during the period  
under review:  
(c) Future Prospects (including Key Risks)  
In the medium term CSL expects to continue to grow through  
developing differentiated plasma-derived and recombinant  
products, receiving royalty fl ows from the exploitation of the  
Human Papillomavirus Vaccine by Merck & Co, Inc, and the  
commercialisation of CSL’s technology. Over the longer term  
On 28 July 2015, CSL announced that the US FDA had  
accepted a Biologics License Application for its recombinant  
FVIII;  
57  
Description of Key Risk  
Key Risk Management  
Healthcare Industry Risk  
CSL faces competition from pharmaceutical companies and biotechnology companies. The introduction • Along with regular reviews of key markets and geographies of strategic value and potential, CSL  
of new competitive products or follow-on biologics by our competitors, may impact our ability to access  
fast-growing/strategic markets, and may result in reduced product sales and lower prices. In addition,  
industry wide shifts in demand for our products may affect our business and operations.  
monitors our competitive markets to understand what new competitive products may be emerging and  
the ongoing demand for our products. We ensure a diverse product pipeline with a focus on product  
lifecycle development, and seek to ensure that the pricing of our products remains competitive.  
Accessing fast-growing or strategic markets and executing on value-creating business development  
deals are key growth opportunities for CSL. If these activities are unsuccessful our business and fi nancial  
performance could be adversely affected.  
• CSL identifies and assesses new business development and market expansion opportunities that align  
with our long term strategic objectives. Broader input from a variety of functions is engaged when  
opportunities reach specific points in the due diligence process, to ensure appropriate evaluation,  
integration and business continuity in operations should we enter fast-growing strategic markets or  
make an acquisition.  
CSL operates in many countries and changes in the regulatory framework under which we operate in  
these countries, particularly with regard to the reimbursement of healthcare expenses, could have a  
negative impact on our business and results of operations.  
• CSL seeks to understand the current and emerging regulatory frameworks and looks to adapt, where  
possible, our product development to meet any changes or additional requirements. Internal audit  
processes and government liaison activities also serve to identify areas of regulatory compliance needs.  
Manufacturing & Supply Risk  
The manufacture of CSL’s products, in accordance with regulatory requirements, is a complex process  
including fractionation, purification, fi lling and fi nishing. Any challenges experienced in the continuity of  
this process, and/or the quality of supply, could have a negative impact on our business results.  
• CSL has a robust management process to ensure that any process is well is maintained through our  
strategy to operate large, long-life and effi cient manufacturing facilities. This includes adoption of,  
and compliance with, a broad suite of internationally recognised standards (GxP) including Good  
Manufacturing Practice (GMP).  
CSL depends on a limited group of companies that supply our raw materials and supply and maintain  
our equipment. If there is a material interruption to the supply or quality of a critical raw material or  
fi nished product, this could disrupt production or our commercial operations. If the equipment should  
malfunction or suffer damage, the repair or replacement of the machinery may require substantial time  
and cost, which could disrupt production and other operations.  
• CSL seeks to maintain appropriate levels of inventory and safety stock and ensures that, where  
practicable, we have alternative supply arrangements in place. We have a robust preventative  
maintenance program and access to remedial maintenance when necessary. We undertake quality  
audits of suppliers and maintain and review business continuity plans which can be actioned in the event  
of any significant event.  
CSL also depends on plasma donors for the supply of plasma. Ineffective management of donors has the  
potential to impact supply and may also have reputational consequences.  
• CSL responsibly sources plasma from donors, complying with voluntary and regulatory standards. The  
donor experience is closely monitored to ensure the comfort, health and safety of donors.  
Research and Development/Commercialisation Risk  
Our future success depends significantly on our ability to continue to successfully develop new products. • CSL seeks to ensure that our development programs, including our early stage research and clinical trials,  
The success of such development efforts involves great challenge and uncertainty. To achieve this, we  
must conduct, at our own expense, early stage research and clinical trials to demonstrate proof of  
concept and the safety and effi cacy of the product candidates. Clinical trials are expensive, diffi cult to  
design and implement, can take multiple years to complete and are uncertain as to outcome.  
are undertaken responsibly and ethically within an appropriate governance framework that includes  
multiple decision points where the science and commercialisation opportunities are robustly analysed  
and risk-assessed.  
CSL undertakes extensive advance planning and transitioning work to ensure research and development  
activities and technologies are effectively transitioned to business operations. We also actively source  
partners/subcontractors, where necessary, to ensure business continuity in product development or  
general operations.  
Commercialisation requires effective transition of research and development activities to business  
operations.  
Business Combination Risk  
Potential business combinations could require significant management attention and prove diffi cult to  
integrate with CSL’s business.  
• CSL takes a disciplined approach to acquisitions. We focus on strategically aligned opportunities,  
including those where we can derive synergies through our substantial existing knowledge and expertise.  
We also seek to ensure that a detailed review and assessment of potential business combinations occurs  
prior to any acquisition.  
CSL may not realise the anticipated benefits, or it may take longer to do so than anticipated, from any  
business combination we may undertake in the future and any benefits we do realise may not justify the  
acquisition price.  
• CSL seeks to ensure that integration activities are well planned and executed, leveraging our existing  
capabilities and knowledge base, as well as those of highly qualified and reputable advisors.  
58  
Directors’ Report continued  
Description of Key Risk  
Key Risk Management  
Information Security, including Cybersecurity  
Most of CSL’s operations are computer-based and information technology (IT) systems are essential to  
maintaining effective operations.  
• CSL has developed numerous security controls for our IT systems and data centre infrastructure that are  
based on our understanding of known threats and best practice industry knowledge. We continually  
reassess the appropriateness of, and seek to continuously improve, these controls in light of the evolving  
nature of such threats, and through regular training and awareness campaigns ensure our employees  
can respond appropriately to relevant threats.  
CSL’s IT Systems are exposed to risks of complete or partial failure of IT systems or data centre  
infrastructure, the inadequacy of internal or third-party IT systems due to, amongst other things, failure  
to keep pace with industry developments and the capacity of existing systems to effectively address  
growth, unauthorised access and integration of existing operations.  
• CSL employs robust IT Disaster Recovery planning, as well as Business Continuity planning to mitigate  
operational interruptions. We also seeks to continuously improve, update and implement new IT  
systems, in part to assist us to satisfy regulator demands, ensure information security, enhance the  
manufacture and supply of our products and integration of our operations.  
Intellectual Property Risk  
CSL relies on an ability to obtain and maintain protection for our intellectual property (IP) in the countries • CSL seeks appropriate patent and trademark protection and manages any specifically identified IP risks.  
in which we operate. Along with dedicated IP personnel to manage IP opportunity and risk, we use specialist advisors by  
jurisdiction to inform this approach.  
CSL’s products or product candidates may infringe, or be accused of infringing, on one or more claims  
of an issued patent, or may fall within the scope of one or more claims in a published patent application • CSL ensures that our projects, products and related activities include an appropriate assessment of any  
that may be subsequently issued and to which we do not hold a licence or other rights.  
third party IP profile and our IP profile.  
Personnel Risk  
Providing a safe and rewarding work environment for CSL’s employees is critical to our sustainability.  
• CSL has in place a robust workplace health and safety management system in line with industry best  
practice. Incident prevention, monitoring and reporting, along with early injury intervention, assist in  
mitigating risks to employee health and safety.  
CSL is dependent on the principal members of our executive and scientific teams. The loss of the services  
of any of these persons might impede the achievement of our research, development, operational and  
commercialization objectives.  
• CSL seeks to ensure that our remuneration and retention arrangements are competitive in the  
employment markets in which we operate. We have plans and processes in place to develop our future  
leaders, such as succession planning and talent development.  
Unexpected Side Effects Risk  
As for all pharmaceutical products, the use of CSL’s products can produce undesirable or unintended side • CSL seeks to maintain processes and procedures that meet good pharmacovigilance practice standards.  
effects or adverse reactions (referred to cumulatively as “adverse events”). The occurrence of adverse  
events for a particular product or shipment may result in a loss, and could have a negative impact on our  
business and reputation, as well as results of operations.  
We ensure that our product information is up to date and contains all relevant information to assist  
healthcare practitioners to appropriately use our products.  
Market Practice Risk  
CSL’s marketplace is diverse and complex, presenting many opportunities and challenges. Breach of  
regulations, local or international law, or industry codes of conduct, may subject us to fi nancial penalty  
and reputational damage. Such instances may invite further regulation that may negatively affect our  
ability to market therapies.  
• CSL ensures our employees, contractors and suppliers are aware of our expectations in relation to  
their interaction with stakeholders. We undertake relevant training and monitoring of our Code of  
Responsible Business Practice. We undertake internal audits of functions, processes and activities across  
our operating geographies.  
59  
CSL has adopted and follows a detailed and structured Risk  
Framework to ensure that risks in the CSL Group are identified,  
evaluated, monitored and managed. This Risk Framework sets  
out the risk management processes and internal compliance and  
control systems, the roles and responsibilities for different levels  
of management, the risk tolerance of CSL, the matrix of risk  
impact and likelihood for assessing risk and risk management  
reporting requirements.  
6. Dividends  
8. Significant events after year end  
The following dividends have been paid or determined since  
the end of the preceding fi nancial year:  
Other than as disclosed in the fi nancial statements, the Directors  
are not aware of any other matter of circumstance which has  
arisen since the end of the fi nancial year which has significantly  
affected or may significantly affect the operations of the  
consolidated entity, results of those operations or the state of  
affairs of the consolidated entity in subsequent fi nancial years.  
2
014-2015 An interim dividend of US$0.58 per share,  
unfranked, was paid on 10 April 2015. CSL’s Directors  
determined a fi nal dividend of US$0.66 per ordinary share,  
unfranked, for the year ended 30 June 2015 that was paid  
on 2 October 2015.  
9.  
Environment, Health,  
Safety & Sustainability Performance  
The risk management processes and internal compliance and  
control systems are made up of various CSL policies, processes,  
practices and procedures, which have been established by  
management and/or the Board to provide reasonable assurance  
that:  
2
015-2016 An interim dividend of US$0.58 per share,  
unfranked, was paid on 15 April 2016. CSL’s Directors have  
determined a fi nal dividend of US$0.68 per ordinary share,  
unfranked, for the year ended 30 June 2016.  
CSL has an Environment, Health, Safety and Sustainability  
(EHS2) Strategic Plan which ensures its facilities operate to  
internationally recognised standards. This strategy includes  
compliance with government regulations and commitments to  
continuously improve the health and safety of the workforce  
as well as minimising the impact of operations on the  
environment. CSL utilises an overall integrated management  
systems approach with several manufacturing sites maintaining  
individual certifications to relevant external Environment,  
Occupational Health and Safety, and Energy management  
systems which include: the EU Eco-Management and Audit  
Scheme (EMAS); ISO 14001 Environmental Management  
Systems; AS/NZ4801 & OHSAS 18001 Occupational Health  
and Safety Management Systems; and the ISO 50001 Energy  
Management Systems.  
In accordance with determinations by the Directors, CSL’s  
dividend reinvestment plan remains suspended.  
established corporate and business strategies are  
implemented, and objectives are achieved;  
Total dividends for the 2015-2016 year are:  
any material exposure to risk is identified and adequately  
monitored and managed;  
On Ordinary shares  
US$m  
significant fi nancial, managerial and operating information  
is accurate, relevant, timely and reliable; and  
Interim dividend paid on 15 April 2016  
Final dividend payable on 7 October 2016  
285.6  
310.5  
there is an adequate level of compliance with policies,  
standards, procedures and applicable laws and regulations.  
Further details of CSL’s risk management framework are  
contained in CSL’s corporate governance statement.  
7. Significant changes in the State of Affairs  
On 15 October 2015, CSL announced its intention to conduct  
a further on-market buyback of up to A$1 billion, representing  
approximately 2% of shares then on issue. Up to 30 June  
The Global Total Recordable Incident Rate continues to  
demonstrate an improving trend in performance. Our  
Australian operations maintain a Tier 3 status in regards to  
CSL Limited’s self-insurance licence as granted by the Safety,  
Rehabilitation and Compensation Commission  
2
016, CSL purchased 8,913,732 shares under this announced  
buyback, returning A$908.5 million to shareholders. From 1  
July 2016 to 11 July 2016, an additional 143,412 shares were  
purchased, bringing the total returned to shareholders to  
A$924.5 million. Since 11 July 2016 up to 16 August 2016, no  
further shares have been bought back.  
No environmental breaches have been notified by the  
Environment Protection Authority in Victoria, Australia or by any  
other equivalent Australian interstate or foreign government  
agency in relation to CSL’s Australian, European, North  
American or Asia Pacific operations during the year ended 30  
June 2016. Non-compliances with requirements for wastewater  
quality discharged to the sewer system from both the  
Broadmeadows and Parkville, Australian sites identified during  
the year have subsequently been resolved to the satisfaction of  
the relevant water authorities.  
On 3 August 2015, CSL announced that it had on 31 July 2015  
closed the acquisition of the Novartis’ global influenza vaccine  
business for US$275 million. The business has been combined  
with CSL’s subsidiary bioCSL to create the number two player  
in the global influenza vaccine industry, with manufacturing  
operations in the US, UK, Germany and Australia.  
There were no other significant changes in the state of affairs of  
the consolidated entity during the fi nancial year not otherwise  
disclosed in this report or the fi nancial statements.  
60  
Directors’ Report continued  
Environmental obligations and waste discharge quotas are  
regulated under applicable Australian and foreign laws.  
Environmental performance is monitored and subjected from  
time to time to government agency audits and site inspections.  
The EHS2 function continues to refi ne standards, processes and  
data collection systems to ensure we are well prepared for new  
regulatory requirements.  
10. Directors’ Shareholdings and Interests  
13. Indemnification of Directors and Offi cers  
At the date of this report, the interests of the directors who held  
offi ce at 30 June 2016 in the shares, options and performance  
rights of CSL are set out in the Remuneration Report – Tables  
During the fi nancial year, the insurance and indemnity  
arrangements discussed below were in place concerning  
directors and offi cers of the consolidated entity:  
1
0 and 14 for executive Key Management Personnel (KMP) and  
CSL has entered into a Director’s Deed with each director  
regarding access to Board papers, indemnity and insurance.  
Each deed provides:  
Table 15 for Non-Executive Directors. It is contrary to Board  
policy for KMP to limit exposure to risk in relation to these  
securities. From time to time the Company Secretary makes  
inquiries of KMP as to their compliance with this policy.  
As part of compliance and continuous improvement in  
regulatory and voluntary environmental performance, CSL  
continues to report on key environmental issues including  
energy consumption, emissions, water use and management of  
waste as part of CSL’s annual Corporate Responsibility Report  
and submission to the Carbon Disclosure Project. CSL has met  
its reporting obligations under the Australian Government’s  
National Greenhouse and Energy Reporting Act (2007) and  
Victorian Government’s Industrial Waste Management Policy  
(
a) an ongoing and unlimited indemnity to the relevant  
director against liability incurred by that director in or  
arising out of the conduct of the business of CSL or of  
a subsidiary (as defined in the Corporations Act 2001)  
or in or arising out of the discharge of the duties of that  
director. The indemnity is given to the extent permitted by  
law and to the extent and for the amount that the relevant  
director is not otherwise entitled to be, and is not actually,  
indemnified by another person or out of the assets of a  
corporation, where the liability is incurred in or arising out  
of the conduct of the business of that corporation or in the  
discharge of the duties of the director in relation to that  
corporation;  
11. Directors’ Interests in Contracts  
Section 13 of this Report sets out particulars of the Directors  
Deed entered into by CSL with each director in relation to  
access to Board papers, indemnity and insurance.  
12. Performance Rights and Options  
(National Pollutant Inventory).  
As at the date of this report, the number of unissued ordinary  
shares in CSL under options and under performance rights are  
set out in Note 18 of the Financial Statements.  
Globally, EHS2 continues to evaluate potential risks to CSL and  
its operations associated with climate change. To date, studies  
indicate that climate change, and measures introduced or  
announced by various governments to address climate change,  
do not pose a significant risk or fi nancial impact to CSL in  
the short to medium term. Climate change risks and control  
measures continue to be monitored to ensure compliance to  
new and emerging regulatory requirements.  
Holders of options or performance rights do not have any right,  
by virtue of the options or performance rights, to participate in  
any share issue by CSL or any other body corporate or in any  
interest issued by any registered managed investment scheme.  
(
(
b) that CSL will purchase and annually renew a liability  
insurance program which covers all past, present and future  
directors and offi cers against liability for acts and omissions  
in their respective capacity on behalf of CSL. Coverage will  
be maintained for a minimum of seven years following the  
cessation of offi ce for each director appointment for acts or  
omissions during their time served; and  
The number of options and performance rights exercised during  
the fi nancial year and the exercise price paid to acquire fully  
paid ordinary shares in CSL is set out in Note 18 of the Financial  
Statements. Since the end of the fi nancial year, 18,586 shares  
were issued under CSL’s Performance Rights Plan.  
Further details related to Environment, Health, Safety and  
Sustainability performance can be found in CSL’s sustainability  
report, Our Corporate Responsibility, available on CSL’s website,  
www.csl.com.au.  
c) the relevant director with a right of access to Board papers  
relating to the director’s period of appointment as a  
director for a period of seven years following that director’s  
cessation of offi ce. Access is permitted where the director  
is, or may be, defending legal proceedings or appearing  
before an inquiry or hearing of a government agency or  
an external administrator, where the proceedings, inquiry  
or hearing relates to an act or omission of the director in  
performing the director’s duties to CSL during the director’s  
period of appointment.  
61  
In addition to the Director’s Deeds, Rule 95 of CSL’s constitution  
requires CSL to indemnify each “offi cer” of CSL and of each  
wholly owned subsidiary of CSL out of the assets of CSL  
15. Auditor independence and non-audit services  
Ernst & Young and its related practices received or are due to  
receive the following amounts for the provision of non-audit  
services in respect to the year ended 30 June 2016:  
CSL may decide to employ the auditor on assignments  
additional to their statutory audit duties where the auditor’s  
expertise and experience with CSL and/or the consolidated  
entity are important.  
“to the relevant extent” against any liability incurred by the  
US$  
offi cer in the conduct of the business of CSL or in the conduct  
of the business of such wholly owned subsidiary of CSL or  
in the discharge of the duties of the offi cer unless incurred  
in circumstances which the Board resolves do not justify  
indemnification.  
Due diligence and completion audits  
Compliance and other services  
607,405  
607,405  
Details of the amounts paid or payable to the entity’s auditor,  
Ernst & Young, for non-audit services provided during the year  
are set out below. The directors, in accordance with the advice  
received from the Audit and Risk Management Committee, are  
satisfied that the provision of non-audit services is compatible  
with the general standard of independence for auditors  
imposed by the Corporations Act 2001. The directors are  
satisfied that the provision of non-audit services by the auditor  
did not compromise the auditor independence requirements of  
the Corporations Act 2001 for the following reasons:  
Total fee paid for non-audit services  
For this purpose, “offi cer” includes a director, executive offi cer,  
secretary, agent, auditor or other offi cer of CSL. The indemnity  
only applies to the extent CSL is not precluded by law from  
doing so, and to the extent that the offi cer is not otherwise  
entitled to be or is actually indemnified by another person,  
including under any insurance policy, or out of the assets  
of a corporation, where the liability is incurred in or arising  
out of the conduct of the business of that corporation or in  
the discharge of the duties of the offi cer in relation to that  
corporation.  
The signing partner for the auditor is normally to be rotated  
at least every fi ve years, and the auditor is required to make  
an independence declaration annually. CSL notes that, in  
accordance with the requirements of the Corporations Act,  
the Board and the Audit and Risk Management Committee  
approved Mr Glenn Carmody to act as the signing partner for  
Ernst & Young for a sixth year in 2015-16 (as a result of some  
changes in personnel at Ernst & Young which directly affected  
the transition plans for the replacement of Ernst & Young’s  
signing partner). Mr Rodney Piltz has been approved to act  
as the signing partner for Ernst & Young for the 2016-2017  
fi nancial year.  
all non-audit services have been reviewed by the Audit and  
Risk Management Committee to ensure that they do not  
impact the impartiality and objectivity of the auditor; and  
none of the services undermine the general principles  
relating to auditor independence as set out in Professional  
Statement F1, including reviewing or auditing the auditor’s  
own work, acting in a management or a decision making  
capacity for CSL, acting as an advocate for CSL or jointly  
sharing economic risks and rewards.  
CSL paid insurance premiums of US$796,734 in respect of  
a contract insuring each individual director of CSL and each  
full time executive offi cer, director and secretary of CSL and  
its controlled entities, against certain liabilities and expenses  
16. Rounding  
(including liability for certain legal costs) arising as a result of  
The amounts contained in this report and in the fi nancial report  
have been rounded to the nearest $100,000 (where rounding is  
applicable) unless specifically stated otherwise under the relief  
available to CSL under ASIC Corporations Instrument 2016/19.  
CSL is an entity to which the Instrument applies.  
work performed in their respective capacities, to the extent  
permitted by law.  
A copy of the auditors’ independence declaration as required  
under section 307C of the Corporations Act 2001 accompanies  
this Report.  
14. Indemnification of auditors  
To the extent permitted by law, CSL has agreed to indemnify  
its auditors, Ernst & Young, as part of the terms of its audit  
engagement agreement against claims by third parties arising  
from the audit (for an unspecified amount). No payment has  
been made to indemnify Ernst & Young during or since the  
fi nancial year.  
62  
Directors’ Report continued  
63  
1
7. Remuneration Report  
Dear Shareholder,  
Remuneration key messages  
Sustained value creation for shareholders requires focus on both short and long  
term objectives. Within CSL, this includes the immediate challenges of the effi cient  
running of a complex global supply chain which manufactures and delivers life  
saving products to customers in over 30 countries and the planning and execution of  
sophisticated research programs with very long lead times to bring new products into  
the portfolio on an ongoing basis in the future. For success, teamwork is essential.  
Our remuneration framework is designed to support shareholder value creation by  
recognising and rewarding individual and team performance in achieving CSL’s annual  
business plans and longer term strategic goals.  
As shown in the Operating and Financial Review, 2016 was a year of solid performance for  
CSL with business growth in our key markets outpacing our competitors’;  
To maintain fi xed remuneration alignment with market benchmarks, an average increase of  
5% was applied to executive KMP fi xed remuneration;  
The targets set for the fi nancial component of Short Term Incentive (STI) awards, related  
to growth in Net Profit after Tax (NPAT) and Revenue at constant currency. For 2016,  
performance at constant currency as reported in section 5 of the Directors’ Report, shows  
NPAT growth was 5.2% against a guidance of 5%, and Revenue was 8.2% against a  
guidance of 7%. These measures excluded the results for the Novartis Influenza business  
We aim to provide remuneration which is fair, equitable and market competitive  
in the countries in which we operate in order to attract and retain highly talented  
people. We believe that the remuneration outcomes for our executive Key  
Management Personnel (KMP), and the fees paid to our Non-Executive Directors,  
refl ect this in 2016.  
(NVS-IV) given the uncertainty of the transaction at the time scorecards were set;  
In 2016, the Board has decided to no longer require mandatory deferral of a portion of STI.  
This will bring us more in line with the remuneration practices of our global peers. Details are  
provided on page 67 of this Report;  
There have been no fundamental changes to executive KMP remuneration framework  
in 2016 and details of this framework are provided in the body of this report. The  
Board is confident that our current remuneration framework is well aligned with  
our strategy and aligns the remuneration interests of our executive KMP and  
shareholders.  
The Earnings per Share (EPS) measurement period for long term incentives (LTI) issued in  
2011 (50% of Tranche 2) and 2012 (50% of Tranche 1) ended during the year, with strong  
EPS growth leading to 100% vesting of the awards; the relative Total Shareholder Return  
measurement period for long term incentives issued in 2011 (50% of Tranche 2) and 2012  
(50% of Tranche 1) ended during the year, with 100% vesting of the 2011 award and 0%  
vesting of 2012 award. The 2012 award will be retested in 2017;  
Awards were made under our LTI and Executive Deferred Incentive Plan in line with our  
remuneration framework; and  
As disclosed in our 2015 Annual Report, CSL Board and Committee fees were increased  
by 3% effective 1 July 2015.  
We welcome feedback on this Report and our remuneration practices.  
John Akehurst  
Chairman  
John Shine AO  
Chairman  
Human Resources and Remuneration Committee  
CSL Limited  
This letter does not form part of the audited Remuneration Report  
64  
Directors’ Report continued  
Format of the Remuneration Report  
1
Introduction  
2
Executive Remuneration  
Section  
Page  
64  
64  
64  
66  
67  
69  
71  
72  
73  
73  
73  
74  
74  
74  
This Report describes CSL’s remuneration framework and details  
the remuneration outcomes for the 2016 fi nancial year.  
2.1 Framework  
1
2
. Introduction  
CSL’s executive remuneration framework refl ects the global  
nature of the research, manufacturing and commercial activities  
which the Company undertakes and the many markets in  
which we operate. Our international footprint requires global  
leadership and, with executives based in different countries, it  
is essential that as well as achieving their individual objectives,  
they work closely together to achieve shared outcomes. Our  
executive reward seeks to be locally competitive for our  
employees in different geographies and functional groups, while  
achieving internal fairness and driving team work. The direct  
link between the Company’s long term strategy, business plans  
and individual performance objectives and the mix of short and  
long term incentives ensures that executive remuneration and  
sustained shareholder value creation are closely linked.  
This Report sets out remuneration information for Key  
. Executive Remuneration  
Management Personnel (KMP) which includes Non-Executive  
Directors (NEDs), the Executive Director (i.e. the Chief Executive  
Offi cer (CEO) and Managing Director) and those key executives  
who have authority and responsibility for planning, directing  
and controlling the major activities of CSL during the fi nancial  
year (executive KMP). Within our executive KMP, there is a sub-  
set of executives called the Strategic Leadership Group (SLG).  
Mr Paul Perreault, Dr Andrew Cuthbertson, Mr David Lamont,  
Mr Gordon Naylor, Mr Robert Repella and Mr Val Romberg were  
executive KMP members of the SLG for the 2016 fi nancial year.  
2
2
2
2
2
2
.1 Framework  
.2 Fixed Remuneration  
.3 Short Term Incentives  
.4 Long Term Incentives  
.5 Executive Deferred Incentive Plan  
.6 Statutory Remuneration Disclosure  
3. Non-Executive Director Remuneration  
How remuneration information has been measured is explained  
in detail in section 5.1 of the Report.  
3
3
3
.1 Framework  
.2 Non-Executive Director Fees  
.3 Statutory Remuneration Disclosure  
In summary, CSL’s remuneration framework is designed to:  
Independent audit of the report  
Align rewards to business outcomes that create value for  
shareholders;  
The Remuneration Report has been audited by Ernst & Young.  
Please see page 121 of the Financial Statements for Ernst &  
Young’s report.  
4. Remuneration Governance  
Provide fair and equitable rewards that are competitive in  
each of our global employment markets;  
4.1 Human Resources and  
Remuneration Committee  
Drive a high performance culture by rewarding the  
achievement of strategic and business objectives;  
4.2 Use of external remuneration consultants  
75  
75  
75  
75  
76  
77  
Changes in KMP  
Dr Megan Clark AC was appointed as a NED effective 16  
February 2016;  
5. Additional Information  
• Encourage collaboration;  
5
5
5
5
.1 How remuneration is measured  
.2 Contractual requirements  
.3 Shareholdings  
Mr Gordon Naylor, previously Chief Financial Offi cer (CFO),  
was appointed President for Seqirus (the combined bioCSL/  
Novartis Influenza business) and remains an executive KMP;  
and  
• Ensure an appropriate pay mix to balance our focus on  
both short term and longer term performance; and  
Attract, retain and motivate high calibre employees  
in a competitive industry.  
.4 Other transactions with Executive KMP  
and Non-executive Directors  
• Mr David Lamont was appointed CFO to replace Mr Naylor,  
effective 4 January 2016.  
5.5 Further information on Performance Rights  
77  
and Performance Options  
65  
Remuneration framework  
The diagram below provides a snapshot of our framework and the way in which each element of remuneration has been structured to support our remuneration objectives.  
Remuneration Element  
How it is set  
Performance conditions  
Vesting period  
Objective  
Fixed  
Fixed remuneration  
Reviewed annually by the Board None  
None  
-
Determined based on the scope, complexity and responsibility of role ensuring  
(FR) (comprising salary,  
internal consistency;  
superannuation and non-  
monetary benefits)  
-
-
Set at competitive levels, to attract, retain and engage key talent; and  
Regularly compared against external benchmarks.  
Performance Short term incentive (STI) (cash  
at risk’ component awarded for  
% of Fixed Remuneration  
see section 2.3.1  
for executive KMP)  
Targets for  
- Financial performance;  
None  
-
-
-
-
Rewards performance that creates value for shareholders;  
Drives a high performance culture;  
(
performance over a 12 month  
period)  
-
-
Business performance; and  
Individual performance  
Threshold fi nancial targets must be met for an award to be granted;  
Business targets focus on overall fi nancial performance and encourage  
collaboration between divisions; and  
-
Individual targets focus on leadership within the business and functionally  
focused targets.  
5
Long term  
Long Term Incentive (LTI) (equity % of Fixed Remuneration  
see section 2.4.1  
Performance Rights  
Three years and nine months  
Performance Rights  
performance related ‘at risk’ component)  
(
-
Relative Total Shareholder Return (rTSR);  
-
Link remuneration to long term shareholder value, including shareholder returns  
and consistent profitable growth.  
-
Performance Rights  
for list by executive KMP)  
-
Earnings Per Share growth (EPSg)  
-
Performance Options  
Number of Performance  
Options and Performance Rights  
calculated based on independent  
valuation  
targets; and  
Performance Options  
-
Individual performance targets  
-
Provided to executive KMP to align with typical local remuneration structures;  
and  
-
Increase the proportion of remuneration linked to long term share price growth  
and consistent achievement of individual performance metrics.  
Performance Options  
-
Share price appreciation from grant  
date; and  
-
Individual performance targets  
Executive Deferred Incentive Plan % of Fixed Remuneration  
EDIP)  
-
-
Continued employment (retention)  
Individual performance targets  
Three years  
-
Common discretionary award scheme in which all senior managers in CSL are  
eligible to participate (much broader than executive KMP);  
(
(
see section 2.5.1  
for list by executive KMP)  
-
-
-
Award intended to attract talent and encourage retention;  
Converted into Notional Shares at  
grant date  
Requires the consistent achievement of individual performance metrics; and  
Value of the award is linked to the share price, further encouraging a focus on  
long term shareholder value.  
5
The vesting period is from the date of grant to test date. The performance period is four years.  
66  
Directors’ Report continued  
How the framework is applied  
Benchmarking  
Components of total target reward  
To meet our objectives, the remuneration of executive KMP is  
structured with:  
CSL benchmarks executive KMP remuneration against the local  
market in which it competes to attract and retain talent. When  
benchmarking, consideration is given to size and responsibilities  
of the specific job role, the norm for the mix of remuneration  
components and the quantum of total remuneration in that  
market. Market data for executive KMP based in Australia  
utilises benchmarks from the ASX Top 30. Benchmarks for most  
other executive KMP are based on peer data from international  
biomedical and pharmaceutical companies obtained from a  
number of market surveys, including the Radford Global Life  
Sciences Survey.  
Fixed  
STI  
Rights  
Options  
EDIP  
6%  
3%  
A high proportion of variable (i.e. ‘at risk’) remuneration  
compared to fi xed components;  
9%  
8
%
7%  
8
%
8
%
11%  
11%  
12%  
3%  
1
16%  
16%  
15%  
13%  
1
2
7%  
24%  
4%  
2
Short and long term ’at risk’ components, with long term  
incentives generally given greater weighting in the total  
remuneration mix; and  
2%  
2
20%  
1%  
21%  
21%  
20%  
2
2
6%  
3
2%  
32%  
3%  
23%  
28  
%
23  
%
26%  
6%  
2
26%  
The opportunity to achieve additional rewards if targets  
are exceeded in both STI and LTI.  
2
2%  
32%  
37%  
32%  
38%  
34%  
33%  
30%  
31%  
The focus on ’at risk’ elements reinforces the strong link to  
shareholder value and has been used to align the executive  
KMP’s total target remuneration to the markets where CSL  
operates and the executive KMP is based.  
2
.2 Fixed Remuneration (FR)  
How it is determined  
Each executive KMP’s remuneration is structured to refl ect  
both their role and their geographic location. The components  
of total target remuneration (on award) for each executive  
are shown in the following chart. Note that the subsequent  
FR comprises base salary, superannuation and non-monetary  
benefits. Reviewed on an annual basis by the Board with the  
assistance of external consultants, FR is determined based  
on the scope, complexity and responsibility of the role and  
benchmarking against similar roles in the local external market.  
Internal relativities, qualifications and experience are also  
considered.  
The maximum potential of ‘at risk’ components are described in  
the table below.  
‘take-home’ amounts will depend on individual and company  
performance over the short and long term.  
Executive  
P Perreault  
G Boss  
Total ‘At Risk’  
82%  
STI  
LTI  
In 2016 Mr Lamont was awarded both commencement  
benefits and a 2016 award under the LTI and EDIP programs.  
Performance Rights were granted under the 2015 and 2016 LTI  
programs of 15,278 and 12,266 respectively. Notional Shares  
were granted under the EDIP with 7,400 Notional Shares vesting  
on 30 September 2016, 10,500 Notional Shares vesting on  
34%  
30%  
40%  
30%  
40%  
36%  
30%  
34%  
34%  
48%  
42%  
29%  
42%  
28%  
35%  
41%  
40%  
39%  
Outcome in 2016  
72%  
A Cuthbertson  
K Etchberger  
D Lamont  
G Naylor  
69%  
In 2016, all executive KMP received an increase to their FR,  
refl ecting either a change in role or to maintain their FR at  
market competitive levels. The average increase across this  
group was 5%.  
72%  
68%  
3
3
0 September 2017 and 2,010 Notional Shares vesting on  
0 September 2018.  
71%  
L Reed  
71%  
The details of Mr Lamont’s components of total target reward  
and both LTI and EDIP as a percentage of fi xed remuneration  
displayed in the tables and graphs ahead, refl ect the awards  
related to the 2016 year as a serving employee and exclude  
Mr Lamont’s commencement benefits.  
R Repella  
V Romberg  
74%  
73%  
67  
2
.3 Short Term Incentives (STI)  
How potential awards are determined  
2.3.2 STI performance targets  
Target and maximum potential STI awards are defined as a  
percentage of FR for each executive KMP. These percentages  
are shown in the chart below. In each case, the maximum STI  
percentage is 150% of target.  
Personal and group performance metrics derived from the  
Company’s business plan are set for each executive KMP at  
the start of the fi nancial year. These targets are set by the  
Board for the CEO and by the CEO in conjunction with the  
Human Resources and Remuneration Committee (HRRC) for all  
other executive KMP. All targets are approved by the Board. A  
summary of these targets, their weightings, the rationale for  
their selection and information on performance in the 2016  
year is shown on the following page.  
2
.3.1 Summary  
The STI for the fi nancial year ended June 2016 is awarded  
to executive KMP after the full year performance review  
(September 2016). It is a cash bonus.  
In 2016 mandatory deferral of STI for the SLG has been  
removed. Were an executive KMP to commit any act of  
fraud, defalcation, gross misconduct, dishonesty or have been  
in breach of their obligations, or in the event of a material  
misstatement of fi nancials or other significant discovery which,  
had it been known at the time of the award, would have made  
a difference to the offer or quantum of the award, the Board in  
its absolute discretion may adjust or forfeit any incentive award,  
including LTI and EDIP. The Board may also reduce, including to  
zero, the STI outcome for the future performance year.  
Potential maximum STI  
as a percentage of fixed remuneration  
Target  
Maximum  
In 2016, the fi nancial performance targets have been set as  
follows:  
6
0%  
NPAT: At a target of 5% growth in NPAT at constant currency  
(excluding the NVS-IV business given the uncertainty of the  
transaction at the time scorecards were set), 100% of the  
NPAT component of fi nancial performance will vest. Maximum  
vesting of 150% will occur where growth at constant currency  
is 5% above target. Threshold vesting of 50% of the potential  
award will occur where NPAT growth at constant currency is 4%  
below target. There is no vesting of the award if performance  
is below threshold and there is straight line vesting between the  
threshold and target and target and maximum.  
3%  
43%  
43%  
43%  
43%  
4
5%  
35%  
35%  
3
The Board believes that this change will bring CSL more in line  
with the remuneration practices of its global peers and that the  
mechanisms described above are appropriate to protect CSL.  
120% 70%  
85%  
70%  
85%  
85%  
70%  
85%  
85%  
Revenue: Revenue growth of 7% at constant currency has  
been set as the target which would result in 100% vesting of  
the Revenue component of fi nancial performance. Similar to  
NPAT, there is no vesting of the Revenue component of fi nancial  
performance where Revenue growth does not meet threshold.  
5
0% vesting will occur where threshold Revenue at constant  
currency is 4% below target with the maximum of 150%  
vesting at growth of 6% above target at constant currency.  
There is straight line vesting between the threshold and target  
and target and maximum.  
68  
Directors’ Report continued  
2
016 STI performance targets and achievements  
STI award mechanism  
Performance  
For each executive KMP, awards are structured as follows: if  
the performance outcome for a particular metric falls below  
a minimum threshold, there is a zero contribution to STI from  
this component; if the threshold is exceeded but target not  
achieved, a proportional award is made; if target is achieved,  
hurdle/weighting  
What is it?  
Why is it important?  
Achievements  
Financial performance - CEO - Net Profit after Tax  
-
Top line growth is the foundation  
of long term sustainability  
and evidences our competitive  
advantage;  
-
-
-
NPAT US$1,242.4m  
(NPAT); and  
CEO: 40%  
Total Revenue US$6,129.2m  
Executive KMP and G  
Naylor - Revenue and NPAT.  
Executive KMP: 30%  
G Naylor: 30%  
The financial performance outcomes resulted in a STI outcome  
of 44.17% for Mr Perreault, 33.06% for executive KMP  
excluding Mr Repella, and 32.99% for Mr Repella; and  
1
00% of STI for this component is awarded; and if target is  
exceeded, up to a maximum of 150% of the target award may  
be granted. The Board retains ultimate discretion with respect  
to all STI awards.  
-
-
Ensuring such growth is profitable  
aligns employee and shareholder  
objectives; and  
-
Discussed in more detail in the Operating and Financial Review.  
Measurement at constant currency  
encourages our executive KMP to  
focus on factors within their control.  
2
.3.3 Outcome in 2016  
The STI awarded to each executive KMP is set out below. The  
table also shows each executive KMP’s performance across the  
three performance hurdles and the relative weighting of each.  
®
Business performance – (i) Research and  
-
-
Setting all executive KMP targets  
related to overall business  
performance encourages teamwork  
and collaboration; and  
-
-
Approvals received for Idelvion (rFIX-FP) in the US and  
Europe, Afstyla (rFVIII-SC) approved in US and Respreeza  
approved in Europe;  
®
®
development (R&D)  
investment and  
achievement of key  
research milestones; and  
CEO: 30%  
Executive KMP: 20%  
G Naylor: N/A  
STI Award  
% of  
Financial  
Business  
Individual  
Strong manufacturing performance, including the opening  
of 22 new plasma collection centres (20 in the US and  
2 in Hungary); approval of the Turner Privigen Facility,  
6
Executive  
Cash  
maximum Performance Performance Performance  
Our focus is on R&D and  
P Perreault  
G Boss  
2,472,413  
420,309  
609,215  
389,697  
386,517  
794,217  
304,328  
633,779  
537,891  
78%  
68%  
74%  
69%  
69%  
63%  
66%  
80%  
69%  
40% n 30% n 30% n  
30% n 20% n 50% n  
30% n 20% n 50% n  
30% n 20% n 50% n  
30% n 20% n 50% n  
(ii) Operational targets  
operational efficiency as these are  
fundamental to CSL’s success.  
representing key  
Broadmeadows, Melbourne, including distribution of the first  
IgIV products from the facility; and ground breaking for CSL’s  
recombinant manufacturing facility in Lengnau, Switzerland;  
outcomes supporting  
achievement of CSL’s  
long-term strategy.  
A Cuthbertson  
K Etchberger  
D Lamont7  
G Naylor  
-
-
Successful system upgrades in our Human Resources and  
Operations groups; and  
30% n  
70% n  
Additional details are discussed in the Operating and Financial  
Review.  
L Reed  
30% n 20% n 50% n  
30% n 20% n 50% n  
30% n 20% n 50% n  
n Between threshold and target  
R Repella  
V Romberg  
Individual performance – Targets based on individual  
-
Individual performance targets  
enable us to align executive KMP  
incentives to the strategic priorities  
most relevant to that individual’s  
role; and  
A broad range of successful strategic initiatives were achieved  
during the year, including:  
responsibilities across the  
following categories:  
CEO: 30%  
-
-
-
Solid performance across the business, as shown in the  
segment analysis in the financial statements;  
Executive KMP: 50%  
G Naylor: 70%  
n Below threshold  
n Between target and maximum n Maximum  
(i) Divisional performance;  
(ii) Achievement of  
strategic objectives;  
Successful debt raising and private placement take up during  
the year;  
-
-
Encourage the right behaviours  
within the organisation, including  
teamwork and collaboration; and  
6
The Australian Dollar (AUD), British pound (GBP) and Swiss franc (CHF) awards during the  
year ended 30 June 2016 have been converted to US Dollars (USD) at an average rate for  
the year.  
The STI payment for D Lamont reflects payment for the period as executive KMP being 4  
January 2016 to 30 June 2016.  
(iii) Improvement in  
operations, risk  
Seqirus, the number two global influenza vaccines  
7
manufacturer, successfully formed and successful approval  
Balances performance in areas that  
do not have a direct impact on  
financial outcomes.  
®
management,  
compliance, health and  
safety and quality; and  
of Fluad by US FDA;  
-
-
Significant progress in market access, including the opening  
of a Country Office in Russia, operations expansion, and HR  
systems implementation; and  
(iv) Leadership  
performance.  
Diversity and health and safety targets met or exceeded.  
69  
2
.4 Long Term Incentives  
They have the following key features:  
2
.4.1 Summary of the plan  
Feature  
Performance Rights  
Performance Options  
Long term incentives (LTI) are in the form of either Performance  
Rights or Performance Options and are granted in October (Mr  
Lamont’s award was granted on his commencement in January  
Performance Period  
A four year performance period applies.  
Performance Hurdle  
Tranche 1: Vesting of tranche 1 is subject to CSL’s rTSR performance hurdle.  
Share price growth hurdle (exercise  
price) of A$89.52 for the awards  
granted in 2016.  
2016). Each Performance Right and Performance Option is to  
Tranche 2: Vesting of tranche 2 is subject to CSL achieving its “Target” EPSg performance hurdles.  
acquire one share in the Company. An executive KMP must pay  
an exercise price when electing to exercise the Performance  
Options (being the fi ve day Volume Weighted Average Price  
from 24 – 30 September 2015 of A$89.52). There is no  
payment on the exercise of Performance Rights.  
Tranche 3: Vesting of tranche 3 is subject to CSL achieving its “Upside” EPSg performance  
In addition an executive KMP must  
meet their performance expectations  
as defined in their work plan or the  
grant is forfeited.  
hurdles.  
The executive KMP must also meet their performance expectations as defined in their work plan.  
Performance Rights are issued in tranches with hurdles based  
on relative Total Shareholder Return (rTSR), measured against a  
cohort of global Pharmaceutical and Biotechnology companies  
Vesting Schedule  
For those Performance Rights in Tranche 1  
(subject to the rTSR Performance Measure):  
If the performance hurdle is met the  
award will vest 100%.  
(
listed in section 5.5.2) and growth in Earnings per Share (EPSg).  
-
-
-
No Performance Rights will vest if CSL’s TSR performance is less than the 50th percentile;  
If performance is at the 50th percentile, then 50% of the Performance Rights will vest; and  
An additional 2% of Performance Rights will vest for each one percentile increase above the  
These performance hurdles were chosen as the Board believes  
they refl ect performance and relative wealth creation and  
therefore provide a direct link between executive KMP reward  
and shareholder return. Performance Options only have value  
where the share price on exercise exceeds the exercise price.  
50th percentile up to the 75th percentile at which 100% will vest.  
For those Performance Rights in Tranche 2  
(
-
-
subject to the “Target” EPSg Performance Measure):  
No vesting if CSL’s EPSg is less than 8%; and  
Vesting for the EPSg “Target” Performance Rights will occur on a straight line scale  
from 35% vesting where EPSg is at 8% through to 100% where EPSg is at 13%.  
For those Performance Rights in Tranche 3  
(subject to the EPSg “Upside” Performance Measure):  
-
Vesting will occur on a straight line scale from 0% vesting  
at EPSg of 13% through to 100% at 15%.  
Retesting  
There is no retesting of LTI awarded under the current scheme (grants from 2014 onward).  
Cessation of  
Employment  
A “good leaver” (such as retirement) will retain a pro-rata number of Performance Options and Performance Rights based on time elapsed  
since the grant date, held subject to original terms and conditions including test date. Vested Performance Options and Performance Rights  
have an expiry date of six months from vesting. For other leavers, Performance Options and Performance Rights lapse on cessation of  
employment.  
Dividends  
No dividends are paid on unvested LTI awards.  
70  
Directors’ Report continued  
How potential awards are determined  
Use of Performance Options  
2.4.2 Overview of performance in the year  
LTI is set as a proportion of FR, with the relative proportions for  
each executive KMP shown in the chart below. Note that the  
Board has flexibility in the amount awarded up to these levels.  
For Performance Rights, Tranches 1 and 2 represent Target (each  
Performance Options form part of LTI for executive KMP  
based on market benchmarks. It is market practice outside of  
Australia that a higher proportion of the total remuneration  
package be “at risk” and related to share price performance.  
Performance Options are widely used for this purpose and CSL  
is aligned with this practice. This is not the case in Australia and  
so Performance Options are not currently included in the LTI mix  
for Australian based executive KMP.  
The performance measures for the LTI Plan, namely Earnings  
per Share growth (EPSg) and relative Total Shareholder Return  
(rTSR) provide a direct link between executive KMP reward and  
the long term creation of shareholder wealth. The table below  
illustrates CSL’s share price at the beginning and end of the  
relevant year and dividend payments over the past five years in  
Australian Dollars, along with Earnings per Share in US Dollars  
over the same period.  
50% of the Target award) and Tranche 3 Maximum (Maximum  
is 25% of Tranche 2).  
LTI as a percentage of fixed remuneration  
CSL currently has a capital management strategy to improve the  
efficiency of the balance sheet through buybacks. This strategy  
has been in place each year since 2010 and has entailed buying  
back approximately A$900m of CSL shares on an annual basis.  
Therefore the EPS growth target upon which executive KMP  
are rewarded is based off a year that included the impact of the  
buyback and will require a four year annual compound growth  
rate to be achieved. We have not adjusted the EPS growth  
target in any year that the buyback has been undertaken.  
LTI Performance Rights – Target  
LTI Performance Rights – Maximum  
LTI Performance Options – Target  
Financial  
Year  
Dividends Paid  
during the year (A$)  
Share Price Share Price  
1 July (A$) 30 June (A$)  
EPS (US$)  
2.689  
2.923  
0%  
2016  
1.71  
1.39  
1.15  
0.95  
0.81  
86.47  
66.55  
61.58  
39.42  
33.06  
112.18  
86.47  
66.55  
61.58  
39.42  
8
2015  
5%  
2014  
2013  
2012  
2.701  
1
5
0%  
50%  
8%  
0%  
45%  
8%  
45%  
8%  
40%  
8%  
4
2.429  
8%  
8%  
8%  
8%  
1.972  
1
20% 65%  
65%  
65%  
65%  
65%  
65%  
65%  
65%  
Compound growth for Performance Right vesting purposes are  
as follows:  
Compound EPS Growth to end of financial year  
Year of  
Grant  
Test  
Currency  
2013  
2014  
17.0%  
11.2%  
2015  
14.0%  
9.7%  
2016*  
8.1%  
2
012  
013  
USD  
USD  
USD  
USD  
23.2%  
2
3.4%  
To determine the number of Performance Options or  
Performance Rights to issue, CSL engages an external provider  
2014  
2015  
8.2%  
-0.2%  
-8.0%  
(PricewaterhouseCoopers) to assess the fair value of the awards.  
The proportion of FR earned for each element of the LTI is  
divided by the calculated fair value to determine the number  
of awards. The number and fair value (as determined by  
accounting standards) of Performance Rights and Performance  
Options awarded to executive KMP in 2016 is shown in  
section 2.4.3.  
*
The amounts in this column have been updated, due to a transcription error, from the version  
of the Remuneration Report lodged with the ASX on 17 August 2016.  
71  
Vesting outcomes in 2016  
2.5 Executive Deferred Incentive Plan (EDIP)  
.5.1 Summary of the plan  
For awards measured in 2016 (i.e. those vesting this year) rTSR and EPSg outcomes are shown below. Indicative rTSR  
measurements of unvested awards are provided in section 5.5.4.  
2
The EDIP is our Group-wide incentive scheme for senior management,  
with approximately 1,900 employees eligible to participate. The plan  
is designed to attract key talent and encourage retention, through its  
three year vesting period (subject to the same ‘good leaver’ provisions  
as the LTI). The award also links participant’s outcomes to shareholder  
returns via share price growth through the use of Notional Shares  
Performance Options  
Relative TSR  
Percentile Ranking  
Grant Date  
Vesting Outcome  
EPSg - 100% vested  
rTSR – 100% vested  
Exercise Price (A$)  
Annual EPS growth  
19%  
N/A  
N/A  
5
October 2011  
29.34  
95%  
Performance Rights  
Grant Date  
(participants receive the cash equivalent of those shares value at the  
Relative TSR  
Percentile Ranking  
vesting date, based on a fi ve day weighted average of the CSL share  
price at that time). In addition the employee must continue to meet their  
performance expectations as defined in their work plan through the  
vesting period or the grant is forfeited.  
Vesting Outcome  
EPSg - 100% vested  
rTSR - 100% vested  
EPSg - 100% vested  
rTSR - 0% vested  
Exercise Price (A$)  
Annual EPS growth  
19%  
N/A  
N/A  
95%  
N/A  
5
1
October 2011  
October 2012  
-
14%  
N/A  
The EDIP is used in our executive KMP framework as a discretionary  
award where there is additional retention risk or a gap between that  
executive KMP’s remuneration and local market benchmarks (particularly  
in relation to the mix of LTI).  
-
Below MSCI Gross  
Pharmaceutical Index  
2
.4.3 Awards granted and vested in 2016  
The table below summarises the number and fair value of awards granted and vested in the 2016 year for each executive  
KMP and is presented in US Dollars. Mr D Lamont received two grants of Performance Rights on commencement of  
employment. The fi rst award refl ects the grant made to executive KMP in October 2014 and the second grant the October  
How potential awards are determined  
EDIP awards are at the absolute discretion of the Board, but are typically  
awarded as a proportion of FR. The proportion of FR and the number  
of Notional Shares it represented that were awarded in 2016 is set out  
below. The Notional Shares were granted on 1 October 2015 with a  
2015 grant. The LTI target for Mr Lamont was 65% of fi xed remuneration for each award.  
Granted in 20168  
Vested in 2016  
Performance Rights Performance Options  
Performance Rights  
Performance Options  
3
0 September 2018 vesting date and were calculated using a weighted  
Executive  
Number  
Value9  
Number  
Value10  
Number  
Value11  
Number  
Value11  
average share price (WASP) of A$89.52. For Mr Lamont, Notional Shares  
were granted in January 2016 and the average WASP was A$76.09.  
Current executive KMP  
P Perreault  
G Boss  
47,138  
8,536  
9,098  
7,801  
27,544  
14,748  
6,415  
9,098  
9,056  
2,455,877  
444,721  
474,007  
406,435  
1,761,150  
768,365  
334,219  
474,007  
471,820  
147,911  
30,909  
-
1,455,389  
304,133  
-
15,255  
7,460  
12,195  
5,720  
-
992,172  
485,192  
793,152  
372,024  
-
9,310  
4,730  
7,600  
3,610  
-
406,569  
206,560  
331,893  
157,649  
-
2016 EDIP grant details  
EDIP target as a percentage of fixed remuneration  
A Cuthbertson  
K Etchberger  
D Lamont  
28,245  
-
277,920  
-
%
40  
5%  
35%  
3
2
5%  
2
0%  
25%  
25%  
G Naylor  
42,717  
20,907  
29,649  
26,233  
420,319  
205,717  
291,735  
258,123  
15,200  
-
988,594  
-
9,460  
-
413,120  
-
15  
%
0%  
1
L Reed  
R Repella  
-
-
-
-
V Romberg  
4,700  
305,684  
2,870  
125,333  
8
9
The Performance Rights and Performance Options had a grant date of 1 October 2015 and a vesting date of August 2019. Mr Lamont’s grants were made in January 2016.  
The number of Performance Rights is calculated based on an assessment of the fair market value of the instruments in accordance with the accounting standards (refer to Note 18 in the  
Financial Statements). The fair value of each Performance Right granted was Tranche 1: A$60.92; Tranches 2 and 3: A$83.12 for all executive KMP excluding D Lamont. For D Lamont  
the fair values were Tranche 1 (2014 award): A$79.58; Tranche 1 (2015 award): A$75.97; Tranches 2 and 3 (2014 award): A$99.69 and Tranches 2 and 3 (2015 award): A$97.73.  
The number of Options is calculated based on an assessment of the fair market value of the instruments in accordance with the accounting standards (refer to Note 18 in the Financial  
Statements). The fair value of each Performance Option granted was A$13.51.  
11,161  
2,332  
1,988  
2,131  
19,910  
1,611  
1,752  
3,480  
3,464  
Notional Shares granted  
1
0
1
1
Performance Options (less exercise price) and Performance Rights vested during the year, multiplied by the share price at the date of vesting. The AUD value was converted to USD at an  
average exchange rate for the year.  
72  
Directors’ Report continued  
2
.6 Statutory Remuneration Disclosure - Executive KMP Remuneration  
See section 5.1 for more information on the measurement of executive KMP remuneration. All amounts are presented in US Dollars.  
Post-  
employment  
%
of  
Short term benefits  
Other long term  
Share Based Payments13  
remuneration  
performance  
related  
Performance  
Performance  
Options  
Executive  
Year12  
Salary and fees  
1,855,579  
1,771,920  
585,362  
564,041  
679,995  
718,337  
524,359  
492,308  
467,025  
-
Cash bonus  
2,472,413  
1,139,000  
420,309  
397,889  
609,215  
410,552  
389,697  
350,000  
386,517  
-
Cash sign on Non-monetary Superannuation  
LSL  
Deferred STI14  
Rights  
1,222,419  
829,501  
295,106  
274,113  
407,762  
429,031  
258,138  
227,902  
251,002  
-
EDIP15  
1,221,451  
1,160,222  
291,407  
337,185  
90,865  
30,720  
Total  
8,169,649  
5,806,477  
1,794,999  
1,666,878  
2,130,345  
1,988,505  
1,581,433  
1,378,024  
2,812,669  
-
P Perreault  
CEO & Managing Director  
2
016  
015  
016  
015  
016  
015  
016  
015  
016  
015  
016  
015  
016  
015  
016  
015  
016  
015  
016  
015  
-
56,327  
45,660  
35,134  
19,287  
29,944  
-
18,550  
18,550  
18,499  
22,768  
25,491  
29,339  
16,783  
15,500  
12,746  
-
-
635,425  
687,485  
201,991  
149,182  
51,595  
-
76%  
68%  
64%  
64%  
64%  
61%  
63%  
62%  
67%  
-
2
-
639,633  
G Boss  
2
-
-
-
EVP Legal &  
Group General Counsel  
2
-
-
A Cuthbertson  
Chief Scientific Officer  
2
-
25,527  
261,546  
2
17,965  
335,684  
16,877  
133,307  
44,053  
-
K Etchberger  
2
-
38,739  
19,513  
14,747  
-
-
-
220,410  
228,748  
1,232,906  
-
EVP Quality &  
Business Services  
2
-
-
1
6
D Lamont  
Chief Financial Officer  
2
436,993  
10,733  
-
-
2
-
-
G Naylor  
President, Seqirus  
2
1,001,918  
851,059  
449,633  
398,790  
628,474  
613,869  
597,959  
282,316  
-
794,217  
504,296  
304,328  
240,000  
633,779  
341,700  
537,891  
149,677  
-
-
-
-
-
104,019  
11,814  
21,330  
11,963  
47,683  
19,167  
331,277  
50,008  
-
25,491  
29,339  
19,950  
20,136  
18,505  
34,883  
21,332  
15,768  
-
95,676  
324,667  
407,892  
-
541,470  
532,471  
131,962  
52,344  
299,150  
20,920  
103,322  
28,635  
151,610  
42,951  
110,480  
27,172  
-
74,079  
25,024  
3,260,687  
2,400,154  
1,198,427  
963,401  
62%  
62%  
59%  
55%  
66%  
56%  
52%  
53%  
-
2
17,339  
1
7
L Reed  
2
-
167,902  
211,533  
231,893  
215,597  
166,082  
80,809  
SVP Human Resources  
2
-
-
R Repella  
EVP Commercial Operations  
2
-
59,093  
42,075  
33,354  
21,238  
-
300,546  
202,561  
165,644  
106,024  
-
2,071,583  
1,512,803  
1,964,020  
733,012  
2
-
V Romberg  
2
-
EVP Manufacturing  
Operations & Planning  
2
-
-
1
8
M Sontrop  
2
-
-
EVP Manufacturing  
Operations & Planning  
2
329,852  
156,476  
48,844  
(9,638)  
5,924  
70,882  
119,172  
7,363  
230,204  
959,079  
61%  
1
2
3
The AUD, GBP and CHF compensation paid during the years ended 30 June 2015 and 30 June 2016 have been converted to USD at an average exchange rate for the year. Both the amount of remuneration and any movement in comparison to prior years may be influenced by changes in  
the AUD/USD, GBP/USD and CHF/USD exchange rates.  
The Performance Rights and Performance Options have been valued using a combination of the Binomial and Black Scholes option valuation methodologies including Monte Carlo simulation as at the grant date adjusted for the probability of hurdles being achieved. This valuation was  
undertaken by PricewaterhouseCoopers. The amounts disclosed have been determined by allocating the value of the Performance Options and Performance Rights evenly over the period from grant date to vesting date in accordance with applicable accounting standards. As a result, the  
current year includes Performance Options and Performance Rights that were granted in prior years.  
1
14  
15  
16  
17  
18  
The fair value of the deferred incentive (STI deferral) has been measured by reference to the CSL share price at reporting date, adjusted for the dividend yield and the number of days left in the vesting period.  
The fair value of the EDIP cash settled deferred payment has been measured by reference to the CSL share price at reporting date, adjusted for the dividend yield and the number of days left in the vesting period.  
D Lamont was executive KMP for the period 4 January 2016 to 30 June 2016.  
L Reed was reported in 2015 as L Cowan.  
M Sontrop was the former EVP Manufacturing Operations & Planning and retired from this role 31 December 2014.  
73  
3
.2 Non-Executive Director Fees  
3
Non-Executive Director Remuneration  
The table below provides details of current Board and  
committee fees from 1 July 2015. Committee fees are not  
payable to the Chairman and to members of the Nomination  
and Securities & Market Disclosure Committees.  
3
.1 Framework  
Feature  
Strategy objective  
Description  
CSL’s NED remuneration strategy is designed to enable CSL to attract and retain suitably qualified directors with appropriate experience  
and expertise and remunerate them appropriately for their Board responsibilities and activities on Board committees.  
Board Chairman Base Fee  
Board NED Base Fee  
A$680,000  
A$205,000  
Aggregate fees approved The current fee pool for NEDs of A$3,000,000 was approved by shareholders on 15 October 2014 and has applied from 1 July  
by shareholders  
2014. The annual total of NED fees including superannuation contributions is within this agreed limit. NEDs may be reimbursed for  
reasonable expenses incurred by them in the course of discharging their duties and this reimbursement is not included within this limit.  
Committee  
Member  
Committee Fees  
Committee Chair  
A$52,000  
Audit & Risk Management  
Human Resources & Remuneration  
Innovation & Development  
A$27,000  
A$27,000  
A$27,000  
Remuneration reviews  
The Board reviews NED fees on an annual basis in line with general industry practice. Fees are set with reference to the responsibilities  
and time commitments expected of NEDs along with consideration to the level of fees paid to NEDs of comparable companies.  
A$52,000  
A$52,000  
Independence of NEDs  
NED Share Plan  
To ensure independence and impartiality is maintained, NEDs do not receive any performance related remuneration.  
NEDs participate in the Non-Executive Directors’ Share Plan (the NED Share Plan) approved by shareholders at the 2002 Annual  
General Meeting (AGM), as amended. The NED Share Plan requires that each NED takes at least 20% of their after-tax director’s base  
fee (excluding superannuation guarantee contributions) in the form of shares in CSL Limited. Shares are purchased by NEDs on-market  
at prevailing share prices, twice yearly, after the announcement of CSL’s half and full year results.  
In 2016, following an external review by KPMG of fees paid  
by ASX Top 25 companies of similar market capitalisation and  
consideration of eight Global Biopharmaceutical companies of  
similar market capitalisation, the Board determined to increase  
NED fees for the 2017 fi nancial year. From 1 July 2016 the  
Board Chairman fee will increase to A$700,000 and the Board  
NED base fee to A$212,000; Committee Chair fees will increase  
to A$54,000 and Committee Member fees to A$28,000. The  
review indicated that CSL’s committee fee structure varies  
when compared with many companies in so far as CSL has  
elected to pay the same fees for each of the three remunerated  
committees recognising their equal importance and impact.  
CSL targets Board and committee fees at market midpoint  
based on market capitalisation. At the 2016 AGM, shareholders  
will be asked to approve an increase to the Non-Executive  
Director pool from A$3,000,000 to A$4,000,000 to, amongst  
other things, allow for Board succession opportunities.  
Post-Employment  
Benefits  
Superannuation contributions are made in accordance with legislation and are included in the reported base fee. NEDs are not entitled  
to any compensation on cessation of appointment.  
Employment Contracts  
There are no specific employment contracts with NEDs. NEDs are appointed under a letter of appointment and are subject to ordinary  
election and rotation requirements as stipulated in the ASX Listing Rules and CSL Limited’s constitution.  
74  
Directors’ Report continued  
3
.3 Statutory Remuneration Disclosure – Non-Executive Director Remuneration  
4
Remuneration Governance  
See section 5.1 for more information on the measurement of KMP remuneration. All amounts are presented in US Dollars.  
4
.1 Human Resource and Remuneration  
Committee (HRRC)  
Remuneration for CSL is overseen by the Human Resources and  
Remuneration Committee (HRRC) of the Board. The HRRC is  
responsible for reviewing and making recommendations to the  
Board with regard to:  
Short term benefits  
Cash salary and fees20  
Post-employment  
Superannuation  
Non-Executive Director  
Year19  
Retirement benefits  
Total  
495,258  
518,545  
187,179  
201,936  
188,636  
201,936  
187,179  
201,936  
63,363  
-
J Shine  
Chairman  
2
016  
015  
016  
015  
016  
015  
016  
015  
016  
015  
016  
015  
016  
015  
016  
015  
469,767  
489,206  
173,117  
186,191  
172,270  
184,416  
173,117  
186,191  
57,866  
-
25,491  
29,339  
14,062  
15,745  
16,366  
17,520  
14,062  
15,745  
5,497  
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Executive remuneration design and approval of awards  
to the CEO and executive KMP;  
2
J Akehurst  
Non-Executive Director  
2
Senior executive succession planning;  
2
The design and implementation of any incentive plan  
(including equity based arrangements);  
D Anstice  
Non-Executive Director  
2
2
The remuneration and other benefits applicable to NEDs; and  
B Brook  
Non-Executive Director  
2
• The CSL diversity policy and measurable objectives for  
achieving gender diversity.  
2
M Clarke  
Non-Executive Director  
2
Full responsibilities of the HRRC are outlined in its Charter,  
which is reviewed annually. The Charter is available on CSL’s  
website at http://www.csl.com.au/about/governance.htm  
2
M McDonald  
Non-Executive Director  
2
154,311  
168,187  
174,573  
186,191  
170,940  
184,417  
14,660  
15,978  
14,062  
15,745  
16,239  
17,520  
168,971  
184,165  
188,635  
201,936  
187,179  
201,937  
The HRRC comprises three independent NEDs: Mr John  
Akehurst (Chairman), Mr David Anstice and Ms Christine  
O’Reilly. The HRRC may invite the Chairman of the Board,  
members of the management team and external advisers to  
attend its meetings.  
2
C O’Reilly  
Non-Executive Director  
2
2
M Renshaw  
Non-Executive Director  
2
2
HRRC Activities  
1
9
0
The AUD compensation paid during the years ended 30 June 2015 and 30 June 2016 have been converted to USD at an average exchange rate for the year. Both the amount of  
remuneration and any movement in comparison to prior years may be influenced by changes in the AUD/USD exchange rates.  
As disclosed in the section titled “Non-Executive Director Remuneration”, NEDs participate in the NED Share Plan under which NEDs are required to take at least 20% of their after-tax base  
fees (excluding superannuation guarantee contributions) in the form of shares in the Company which are purchased on-market at prevailing share prices. The value of this remuneration  
element is included in cash, salary and fees.  
During 2016, the HRRC met on eight occasions, with  
remuneration and talent matters key agenda items for  
discussion. The Committee’s activities included:  
2
Annual review of the remuneration structure and policy;  
Appointment of external remuneration consultants;  
Review of senior executive appointments and remuneration  
arrangements;  
75  
Review of STI and LTI arrangements, and reward outcomes  
for key senior executives;  
• In some circumstances, amounts are recorded as LTI  
remuneration when no shares vest to the executive and in  
other cases there can be negative remuneration from LTIs in  
a given year if performance or service conditions are not met.  
5
Additional Information  
Review of the CSL diversity report and gender pay review and  
progress against diversity objectives;  
5.1 How remuneration is measured  
Remuneration of KMP is measured based on the requirements  
of Australian Accounting Standards and the Corporations  
Act 2001. These requirements measure remuneration based  
on when the service is performed for the company, rather  
than when the benefit is received by the executive. This  
is readily comparable with other companies but presents  
some elements of remuneration based on their value when  
awarded, rather than the value (if any) that the executive  
actually receives.  
In addition, remuneration amounts are presented in US Dollars,  
consistent with the rest of the Report. Remuneration levels are  
set and remuneration is paid in the currency of the country  
in which the executive is based. In addition, CSL shares are  
traded in Australian Dollars, so all share based incentives are  
determined in Australian Dollars. Changes in exchange rates  
can therefore lead to fl uctuations in remuneration.  
Review of talent and succession planning for senior  
executives;  
Review of the Human Resource strategy and key  
achievements;  
Review of NED remuneration; and  
Review of the HRRC Charter.  
5
.2 Contractual requirements  
4
.2 Use of external remuneration consultants  
Examples of how this impacts upon CSL’s remuneration  
disclosures are as follows:  
The Board and the HRRC engage the services of independent  
consultants for the provision of market remuneration data and  
to advise on the remuneration of executive KMP and NEDs.  
Contractual provisions for executive KMP  
For 2014 and 2015, 33% of STI awards for the SLG are  
deferred into Notional Shares for three years. These are  
recognised as an expense over four years, being the year  
of the award and the three year deferral period. While  
the number of Notional Shares is determined based on  
the share price when granted, because they are eventually  
settled in cash the amount expensed each year changes  
as the share price moves. These changes can increase  
or decrease remuneration in a given year and may be  
significant if there are large movements in the share price.  
This is also the case for Notional Shares issued under the  
EDIP, which are recognised over a three year period;  
The CEO and executive KMP are employed on individual service  
contracts that outline the terms of their employment, which  
include:  
In 2016, KPMG was selected as a Remuneration Consultant  
to provide advice in respect to the market competitiveness of  
CSL’s NED fees. KPMG was commissioned and instructed by the  
Chairman of the HRRC.  
Duration of  
contract  
Notice Period  
Employee  
Notice Period  
CSL*  
Termination  
Payment  
No Fixed Term  
Six months  
Six months  
12 months  
Aon Hewitt was engaged to provide benchmarking data  
in respect of all executive KMP and to provide information  
on global pharmaceutical and biopharmaceutical market  
remuneration practice, trends and data. The engagement of,  
and provision of instructions to Aon Hewitt was undertaken  
by the Chairman of the HRRC.  
*CSL may also terminate at any time without notice for serious misconduct and/or breach of contract.  
Clawback / Cancellation / Reduction  
Were an executive KMP to commit any act of fraud, defalcation,  
gross misconduct, dishonesty or have been in breach of their  
obligations, or in the event of a material misstatement of  
fi nancials or other significant discovery which, had it been  
known at the time of the award, would have made a difference  
to the offer or quantum of the award, the Board in its absolute  
discretion may adjust or forfeit any incentive award, including  
LTI and EDIP. The Board may also reduce, including to zero,  
the STI outcome for the future performance year. In the event  
of CSL being faced with a material misstatement or similar  
situation the Board’s response and the actions taken will be  
detailed in the Remuneration Report.  
Performance rights issued under the LTI scheme are  
recognised over their respective performance period based  
on their market value on the day they are granted to  
the executive. The value attributed to each performance  
right at the time they are granted incorporates the risk  
that the performance targets may not be met and may  
be significantly different to the value of the rights if and  
when they vest to the executive. The accounting value of  
these rights is set on the day they are granted and is not  
revisited; and  
The terms of engagement with our Remuneration Consultants  
required a declaration of independence from the executive  
KMP and NEDs to whom their recommendations related, to be  
provided with their report to ensure that the HRRC and Board  
may be satisfied the remuneration advice and recommendations  
were made free from undue influence from CSL’s executive KMP  
and NEDs.  
Neither KPMG or Aon Hewitt made any ‘remuneration  
recommendations’ as defined in the Corporations Act 2001  
during the 2016 fi nancial year.  
76  
Directors’ Report continued  
Change of Control Provisions  
5.3 Shareholdings  
In the event of a change of control, the Board, in its absolute  
discretion, may determine that some or all of the awards made  
under the LTI Plan and the EDIP vest having regard to the  
performance of CSL during the vesting period to the date of the  
change of control event. Vesting may occur at the date of the  
change of control event or an earlier vesting date as determined  
by the Board.  
It is the expectation of the Board that all NEDs and executive KMP hold CSL Limited shares. The Board encourages all NEDs and  
executive KMP to accumulate significant holdings over time subject to individual circumstances. No minimum for the number of  
shares held is specified.  
Executive KMP Shareholdings  
Shares acquired on  
exercise of Performance  
Options during year  
Shares acquired on  
exercise of Performance  
Executive  
Balance at 1 July 2015  
Rights during year (Shares Sold) / Purchased  
Balance at 30 June 2016  
Securities Dealing  
P Perreault  
G Boss  
36,071  
7,367  
111,948  
22,087  
775  
9,310  
15,255  
(18,965)  
41,671  
7,465  
114,143  
6,938  
775  
The CSL Group Securities Dealing Policy prohibits employees  
from using price protection arrangements (e.g. hedging) in  
respect of CSL securities, or allowing them to be used. The  
Policy also provides that no CSL securities can be used in  
connection with a margin loan. Upon vesting of an award an  
employee may only deal in their CSL securities in accordance  
with the Policy. A breach of the Policy may result in disciplinary  
action. A copy of the Policy is available on the CSL Limited  
website at http://www.csl.com.au/about/governance.htm.  
18,820  
7,460  
(26,182)  
A Cuthbertson  
7,600  
12,195  
(17,600)  
K Etchberger  
29,640  
5,720  
(50,509)  
21  
D Lamont  
G Naylor  
L Reed  
-
-
-
-
-
-
-
37,865  
-
47,320  
(69,846)  
15,339  
-
-
-
-
-
-
R Repella  
-
-
22  
V Romberg  
592  
108  
700  
2
1
The opening balance for D Lamont is 4 January 2016 being the date D Lamont became executive KMP.  
Restated opening balance to include related party holdings.  
22  
Non-executive Director Shareholdings  
Non-executive Director  
J Shine  
Balance at 1 July 2015 (Shares sold) / purchased  
Balance at 30 June 2016  
9,387  
31,532  
10,864  
4,300  
-
664  
204  
10,051  
31,736  
13,118  
4,502  
524  
J Akehurst  
D Anstice  
2,254  
202  
B Brook  
23  
M Clark  
524  
M McDonald  
C O’Reilly  
1,003  
2,670  
8,788  
1,213  
202  
2,216  
2,872  
8,990  
M Renshaw  
202  
23  
The opening balance for M Clark is 16 February 2016 being the date M Clark became a NED.  
There have been no movements in shareholdings of executive KMP  
or NEDs between 30 June 2016 and the date of this Report.  
77  
5
.4 Other transactions with Executive KMP  
and Non-executive Directors  
5.5 Further information on Performance Rights  
and Performance Options  
5.5.2 Total Shareholder Return calculations for  
unvested Performance Rights  
There have been no loans made to executive KMP or NEDs  
during 2016. Executive KMP, NEDs and their related entities  
have conducted the following transactions with CSL. These  
transactions occur as part of a normal supplier relationship on  
Shown below is CSL’s indicative Total Shareholder Return (TSR)  
performance over the relevant performance periods up to 30  
June 2016 for as yet unvested Performance Rights. Vesting  
is solely dependent on the formal relative TSR calculations  
undertaken at the relevant test dates, with these calculations  
for information purposes only.  
5
.5.1 Cap on Issue of Equity to Employees  
The Performance Rights Plan Rules, governing the LTI Plan,  
approved by shareholders at the 2003 AGM require that, at  
any point in time, the aggregate number of CSL shares that:  
‘arm’s length’ terms.  
a) have previously been issued to employees under the  
Company’s employee equity plans and which remain subject  
to the rules of the relevant plan (e.g. a disposal restriction);  
and  
Corporate accounts with CityLink, operated by Transurban  
Group of which Ms Christine O’Reilly is a Director;  
Relative TSR Performance from Grant Date  
to 30 June 2016 – Selected Peer Group  
Indicative Relative  
CSL has entered into a number of contracts with Monash  
University, including collaborative research agreements,  
of which Dr Megan Clark is a member of the Council of  
Monash University;  
b) would be issued if all outstanding share options under  
such plans (whether or not vested at the time) were to be  
exercised, must not exceed 7.5% of the total number of CSL  
shares on issue at that time.  
Performance  
Rights Issue  
TSR Percentile  
Ranking  
Peer Group  
October 2014  
Selected global Pharmaceutical and  
Biotechnology companies  
76.1%  
Supply of commercial energy from Origin Energy Limited  
of which Mr John Akehurst is a Director; and  
As at 30 June 2016, the aggregate number of CSL shares under  
a) and b) above was 0.55% of the total number of CSL shares  
on issue.  
October 2015  
Selected global Pharmaceutical and  
Biotechnology companies  
86.2%  
Labour hire contracts with Skilled, a business operated by  
Programmed Maintenance Services Limited, of which Mr  
Bruce Brook is a Director.  
Relative TSR Performance from Grant Date to  
30 June 2016 – MSCI Gross Pharmaceutical Index (“Index”)  
In addition, to satisfy a condition of the exemption granted by  
the Australian Securities and Investments Commission from  
certain prospectus and licensing laws, CSL must ensure that,  
at the time of each offer of shares or share options under an  
employee equity plan, the aggregate number of CSL shares  
which are:  
During 2016, CSL completed two on-market purchases of  
shares for the purposes of Non-Executive Directors’ Share Plan.  
A total of 1,954 shares were purchased during the reporting  
period and the average price paid per share was A$91.93.  
Performance  
Rights Issue  
October 2012  
October 2013  
Index TSR Outcome  
65.7%  
CSL TSR Outcome  
86.9%  
28.7%  
43.9%  
the subject of outstanding offers of shares or share options  
to, or outstanding share options held by employees in  
Australia; and  
Members of the Selected Peer Group for 2016 Grant (1  
October 2015 award)  
AbbVie, Acadia; Actelion; Alexion; Alkermes; Alnylam; Amgen;  
Astellas; AstraZeneca; Bayer; Biogen; Biomarin; Bristol-Myers-  
Squibb; BTG; Celgene; Celldex; Chugai; Daiichi; Daiinippon  
Sumitomo; Eisai; Eli Lilly; Endo; Gilead; Grifols; GlaxoSmithKline;  
Incyte; Innoviva; Ipsen; Ionis Pharmaceuticals; Jazz; Johnson  
issued to employees in Australia under the Company’s equity  
plans in the fi ve year period preceding the offer, in each  
case, after disregarding offers to or holdings of exempt offer  
recipients, must not exceed 10% of the total number of CSL  
shares on issue at the time of the offer.  
&
Johnson; Kyowa; Meda; Medivation; Merck; Merck KGaA;  
Mesoblast; Mitsubishi-Tanabe; Morphosys; Novartis; Novo  
Nordisk; Ono Pharmaceutical; Orion; Pfizer; Regeneron; Roche;  
Sanofi; Sawai Pharmaceutical; Seattle Genetics; Shionogi; Shire;  
Swedish Orphan; Takeda; Teijin; UCB; United Therapeutics;  
Valeant; and Vertex.  
78  
Directors’ Report continued  
5
.5.3 Unvested LTI schemes of previous years  
Terms and conditions of Options and Performance Rights granted in 2014 and 2015  
Value per Instrument at  
Grant Date24  
Instrument  
Rights  
Tranche  
Grant Date (A$)  
47.69  
25  
Exercise Price (A$)  
First Test Date  
1 July 2018  
1 July 2018  
1 July 2018  
1 July 2019  
1 July 2019  
1 July 2019  
Exercise Period  
August 2018 – 30 September 2019  
August 2018 – 30 September 2019  
August 2018 – 30 September 2019  
August 2019 – 30 September 2020  
August 2019 – 30 September 2020  
August 2019 – 30 September 2020  
Expiry Date  
30 September 2019  
30 September 2019  
30 September 2019  
30 September 2020  
30 September 2020  
30 September 2020  
1
1
1
1
1
1
October 2014  
October 2014  
October 2014  
October 2015  
October 2015  
October 2015  
1
2 & 3  
1
-
Rights  
68.64  
-
73.93  
-
Options  
Rights  
12.29  
1
60.92  
Rights  
2 & 3  
1
83.12  
-
Options  
13.51  
89.52  
2
4
For D Lamont the 2014 and 2015 Performance Rights awards were granted January 2016.  
For D Lamont the fair values for the 2014 award were Tranche 1 A$79.58 and Tranches 2 and 3 A$99.69. The fair values for the 2015 award were Tranche 1 A$75.97 and Tranches 2 and 3 A$97.73.  
25  
Key Characteristics of prior fi nancial year Performance Option and Performance Right grants  
Feature  
2008 – 2010  
2011 - 2012  
2013 – 2014  
2015  
Instrument  
Tranches  
60% Performance Options and 40% Performance Rights 20% Performance Options and 80% Performance Rights  
Performance Rights  
Performance Options and Performance Rights  
Three tranches:T1 - 25% of grant,T2 - 35% and T3 -  
0%  
Two tranches:T1 - 50% of grant and T2 - 50%  
One tranche of Performance Options and three  
tranches of Performance Rights  
4
Performance Period  
Performance Hurdle  
T1 – 2 years, T2 – 3 years;T3– 4 years  
Performance Options - EPSg  
T1 – 3 years and T2 – 4 years  
50% - EPSg  
4 years  
Performance Options - Individual performance targets  
Performance Rights T1 – rTSR and T2 and T3 - EPSg  
50% - rTSR  
Peer Group  
Selected ASX Top 100  
Selected ASX Top 100  
MSCI Gross Pharmaceutical Index  
EPSg < 8% – 0% vesting  
Selected global Pharmaceutical and Biotechnology  
companies  
Vesting Schedule  
EPSg 10% or above – 100% vesting  
EPSg 10% or above - 100% vesting  
Consistent with section 2.4.1  
rTSR at or above 50th percentile – 100% vesting  
rTSR below 50th percentile - 0% vesting  
EPSg 8% to 12% - Straight line vesting from  
0% to 100%  
5
rTSR at 50th percentile - 50% vesting  
EPSg 12% or above – 100% vesting  
rTSR between 50th and 75th percentile - Straight line  
vesting from 50% to 100%  
rTSR at or below performance of Index – 0%  
vesting  
rTSR ≥ 75th percentile - 100%  
rTSR exceeds performance of Index – 100%  
Retesting  
T1 – 3 retests, T2 – 2 retests and T3 – 1 retest  
1 retest per tranche, after an additional 12 months  
No retest  
Opportunities  
79  
5
.5.4 Performance Rights and Performance Options Holdings  
Balance at 30 June 2016  
Value of LTI  
Balance at  
1 July 2015  
Number Lapsed /  
Forfeited  
Balance at  
30 June 2016  
Number Vested  
during year  
Exercised during Average Price Paid  
26  
Executive  
Instrument  
Number Granted Number Exercised  
Vested  
Unvested  
year (US$)  
per Share  
P Perreault  
G Boss  
Options  
Rights  
104,138  
88,040  
39,957  
29,029  
7,600  
45,568  
48,233  
24,004  
-
147,911  
47,138  
30,909  
8,536  
-
9,310  
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
242,739  
119,923  
52,046  
30,105  
-
9,310  
15,255  
4,730  
7,460  
7,600  
12,195  
3,610  
5,720  
-
-
242,739  
119,923  
52,046  
30,105  
-
412,672  
29.34  
15,255  
-
1,002,171  
-
Options  
Rights  
18,820  
-
972,594  
31.40  
7,460  
-
506,194  
-
A Cuthbertson  
K Etchberger  
Options  
Rights  
7,600  
-
354,090  
29.34  
9,098  
28,245  
7,801  
-
12,195  
42,471  
46,838  
26,085  
-
-
42,471  
46,838  
26,085  
-
821,041  
-
Options  
Rights  
29,640  
-
1,429,098  
32.37  
5,720  
-
411,476  
-
27  
D Lamont  
G Naylor  
L Reed  
Options  
Rights  
-
-
-
-
-
27,544  
42,717  
14,748  
20,907  
6,415  
29,649  
9,098  
26,233  
9,056  
-
27,544  
76,357  
101,197  
35,782  
12,234  
51,961  
26,242  
48,812  
27,836  
-
-
27,544  
42,717  
56,137  
35,782  
12,234  
51,961  
26,242  
45,942  
23,136  
-
-
Options  
Rights  
80,960  
89,441  
14,875  
5,819  
22,312  
17,144  
22,579  
18,780  
47,320  
9,460  
15,200  
-
33,640  
2,393,716  
35.80  
2,992  
45,060  
239,705  
-
-
-
-
-
-
-
Options  
Rights  
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
R Repella  
Options  
Rights  
-
-
-
V Romberg  
Options  
Rights  
2,870  
4,700  
2,870  
4,700  
2
6
7
The value at exercise date has been determined by the share price at the close of business on exercise date less the Performance Option/Performance Right exercise price (if any) multiplied by the number of Performance Options/Performance Rights exercised during 2016. The AUD value  
was converted to USD at an average exchange rate for the year.  
The opening balance for D Lamont is at 4 January 2016 being the date D Lamont became executive KMP.  
2
80  
Directors’ Report continued  
This report has been made in accordance with a resolution  
of directors.  
John Shine AO  
Paul Perreault  
Chairman  
Chief Executive Offi cer  
and Managing Director  
Melbourne  
17 August 2016  
This report has been made in accordance with a resolution of directors.  
®
Registered trademark of CSL or its affi liates.  
81  
Consolidated Statement of Comprehensive Income for the year ended 30 June 2016  
Consolidated Entity  
2
016  
2015  
US$m  
Notes  
US$m  
Continuing operations  
Sales revenue  
2
5,909.5  
(3,034.8)  
2,874.7  
219.7  
5,458.6  
(2,605.9)  
2,852.7  
169.4  
Cost of sales  
Gross profit  
Other revenue  
2
6
Research and development expenses  
Selling and marketing expenses  
General and administration expenses  
Finance costs  
(613.8)  
(620.9)  
(408.3)  
(71.6)  
(462.7)  
(498.3)  
(287.5)  
(59.6)  
2
Gain on acquisition  
1b  
176.1  
-
Profit before income tax expense  
Income tax expense  
1,555.9  
(313.5)  
1,242.4  
1,714.0  
(335.0)  
1,379.0  
3
Net profit for the period  
Other comprehensive income  
Items that may be reclassified subsequently to profit or loss  
Exchange differences on translation of foreign operations, net of hedges on foreign  
investments  
12  
(126.9)  
(444.1)  
Items that will not be reclassified subsequently to profit or loss  
Actuarial gains/(losses) on defined benefit plans, net of tax  
Total of other comprehensive income/(expenses)  
(71.9)  
(198.8)  
1,043.6  
(64.3)  
(508.4)  
870.6  
Total comprehensive income for the period  
Earnings per share (based on net profit for the period)  
US$  
2.689  
2.683  
US$  
2.923  
2.914  
Basic earnings per share  
10  
10  
Diluted earnings per share  
The consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.  
82  
Consolidated Balance Sheet as at 30 June 2016  
Consolidated Entity  
2
016  
2015  
US$m  
Notes  
US$m  
CURRENT ASSETS  
Cash and cash equivalents  
Trade and other receivables  
Inventories  
14  
15  
4
556.6  
1,107.2  
2,152.0  
1.6  
556.8  
1,003.7  
1,755.6  
20.4  
Current tax assets  
Other fi nancial assets  
Total Current Assets  
NON-CURRENT ASSETS  
Other receivables  
Other fi nancial assets  
Property, plant and equipment  
Deferred tax assets  
0.6  
3,818.0  
2.6  
3,339.1  
15  
15.6  
2.9  
2,389.6  
389.0  
942.6  
5.0  
11.2  
0.5  
1,841.3  
274.4  
926.9  
7.6  
8
3
7
Intangible assets  
Retirement benefit assets  
Total Non-Current Assets  
TOTAL ASSETS  
18  
3,744.7  
7,562.7  
3,061.9  
6,401.0  
CURRENT LIABILITIES  
Trade and other payables  
Interest-bearing liabilities  
Current tax liabilities  
Provisions  
Deferred government grants  
Derivative fi nancial instruments  
Total Current Liabilities  
NON-CURRENT LIABILITIES  
Other non-current liabilities  
Interest-bearing liabilities  
Deferred tax liabilities  
Provisions  
15  
11  
996.1  
62.3  
207.3  
99.6  
3.1  
6.0  
700.8  
3.2  
143.9  
84.3  
2.1  
16  
9
1.8  
936.1  
1,374.4  
15  
11  
3
16  
9
18.8  
3,081.0  
119.2  
40.5  
35.0  
326.6  
3,621.1  
4,995.5  
2,567.2  
17.2  
2,277.7  
138.2  
31.9  
31.9  
221.1  
2,718.0  
3,654.1  
2,746.9  
Deferred government grants  
Retirement benefit liabilities  
Total Non-Current Liabilities  
TOTAL LIABILITIES  
18  
NET ASSETS  
EQUITY  
Contributed equity  
Reserves  
Retained earnings  
TOTAL EQUITY  
12  
12  
19  
(4,213.0)  
187.9  
6,592.3  
2,567.2  
(3,560.4)  
306.5  
6,000.8  
2,746.9  
The consolidated balance sheet should be read in conjunction with the accompanying notes.  
83  
Consolidated Statement of Changes in Equity for the year ended 30 June 2016  
Foreign currency  
translation reserve  
US$m  
Share based  
payment reserve  
US$m  
Contributed Equity  
US$m  
Retained earnings  
US$m  
Total  
US$m  
Consolidated Entity  
2
016  
2015  
2016  
155.4  
-
2015  
2016  
2015  
2016  
6,000.8  
1,242.4  
(71.9)  
2015  
2016  
2015  
3,162.0  
1,379.0  
(508.4)  
870.6  
As at the beginning of the year  
Profit for the period  
(3,560.4)  
(2,797.8)  
599.5  
-
151.1  
138.8  
5,221.5  
1,379.0  
(64.3)  
2,746.9  
1,242.4  
(198.8)  
1,043.6  
-
-
-
-
-
-
-
-
Other comprehensive income  
Total comprehensive income for the full year  
Transactions with owners in their capacity as owners  
Share based payments  
(126.9)  
(444.1)  
-
-
-
-
-
-
-
-
-
-
8.3  
12.3  
-
(579.0)  
-
-
(535.4)  
-
8.3  
(579.0)  
(670.0)  
12.3  
(535.4)  
(798.6)  
Dividends  
-
-
-
-
Share buy back  
(670.0)  
(798.6)  
Share issues  
-
Employee share scheme  
17.4  
36.0  
-
-
-
-
-
-
17.4  
36.0  
As at the end of the year  
(4,213.0)  
(3,560.4)  
28.5  
155.4  
159.4  
151.1  
6,592.3  
6,000.8  
2,567.2  
2,746.9  
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes.  
84  
Consolidated Statement of Cash Flows for the year ended 30 June 2016  
Consolidated Entity  
2
016  
2015  
US$m  
US$m  
Cash fl ows from Operating Activities  
Receipts from customers (inclusive of goods and services tax)  
Payments to suppliers and employees (inclusive of goods and services tax)  
5,982.7  
5,640.6  
(3,957.0)  
1,683.6  
(281.0)  
15.0  
(4,417.0)  
1,565.7  
Income taxes paid  
(326.2)  
14.1  
Interest received  
Borrowing costs  
(75.0)  
(54.0)  
Net cash inflow from operating activities  
Cash fl ows from Investing Activities  
Proceeds from sale of property, plant and equipment  
Payments for property, plant and equipment  
Payments for intangible assets  
1,178.6  
1,363.6  
0.1  
(495.1)  
(70.6)  
(244.6)  
0.1  
0.3  
(347.8)  
(66.0)  
-
Payments for business acquisition (Net of cash acquired)  
Receipts from other fi nancial assets  
0.2  
Net cash outflow from investing activities  
Cash fl ows from Financing Activities  
Proceeds from issue of shares  
(810.1)  
(413.3)  
17.4  
(579.0)  
1,564.3  
(716.9)  
(648.2)  
(362.4)  
6.1  
34.7  
(535.4)  
494.2  
(3.0)  
Dividends paid  
Proceeds from borrowings  
Repayment of borrowings  
Payment for shares bought back  
(818.6)  
(828.1)  
122.2  
606.3  
(173.0)  
555.5  
Net cash outflow from fi nancing activities  
Net increase (decrease) in cash and cash equivalents  
Cash and cash equivalents at the beginning of the fi nancial year  
Exchange rate variations on foreign cash and cash equivalent balances  
Cash and cash equivalents at the end of the fi nancial year  
555.5  
(6.3)  
555.3  
The consolidated statement of cash fl ows should be read in conjunction with the accompanying notes.  
85  
Notes to the fi nancial statements for the year ended 30 June 2016  
a. Basis of preparation  
About this Report  
Contents  
This general purpose fi nancial report has been prepared in  
accordance with Australian Accounting Standards, other  
authoritative pronouncements of the Australian Accounting  
Standards Board, International Financial Reporting Standards  
(IFRS) and the Corporations Act 2001. It presents information  
on a historical cost basis, except for fi nancial assets and  
liabilities (including derivative instruments), which have been  
measured at fair value. Amounts have been rounded off to the  
nearest hundred thousand dollars.  
About this Report  
85  
85  
86  
Notes to the fi nancial statements:  
Notes to the fi nancial statements:  
Our Current Performance  
Corporate information  
CSL Limited (CSL) is a for-profit company incorporated and  
domiciled in Australia and limited by shares publicly traded on  
the Australian Securities Exchange. This fi nancial report covers  
the fi nancial statements for the consolidated entity consisting of  
CSL and its subsidiaries (together referred to as the Group). The  
fi nancial report was authorised for issue in accordance with a  
resolution of directors on 17 August 2016.  
Note 1: Segment Information  
and Business Combinations  
86  
89  
Note 2: Revenue and Expenses  
Note 3: Tax  
90  
Note 4: Inventories  
92  
The report is presented in US Dollars, because this currency is  
the pharmaceutical industry standard currency for reporting  
purposes. It is the predominant currency of the Group’s  
worldwide sales and operating expenses.  
Note 5: People Costs  
93  
Our Future  
96  
A description of the nature of the Group’s operations and its  
principal activities is included in the directors’ report.  
Note 6: Research & Development  
Note 7: Intangible Assets  
96  
96  
b. Principles of consolidation  
Note 8: Property, Plant and Equipment  
Note 9: Deferred Government Grants  
Returns, Risk & Capital Management  
Note 10: Shareholder Returns  
Note 11: Financial Risk Management  
Note 12: Equity and Reserves  
Note 13: Commitments and Contingencies  
Effi ciency of Operation  
98  
The consolidated fi nancial statements comprise the fi nancial  
statements of CSL and its subsidiaries as at 30 June 2016. CSL  
has control of its subsidiaries when it is exposed to, and has  
the rights to, variable returns from its involvement with those  
entities and when it has the ability to affect those returns. A  
list of significant controlled entities (subsidiaries) at year-end is  
contained in Note 17. During the year ended 30 June 2016 CSL  
assumed control of entities acquired as part of the acquisition  
of the Novartis Influenza business. Details of the acquisition are  
contained in Note 1b.  
99  
99  
99  
100  
106  
107  
108  
108  
109  
110  
110  
110  
111  
Note 14: Cash and Cash Equivalents, Cash Flows  
Note 15: Trade Receivables and Payables  
Note 16: Provisions  
The fi nancial statements of the subsidiaries are prepared using  
consistent accounting policies and for the same reporting period  
as the parent company.  
Other Notes  
In preparing the consolidated fi nancial statements, all  
intercompany balances and transactions have been eliminated  
in full. The Group has formed a trust to administer the Group’s  
employee share scheme. This trust is consolidated as it is  
controlled by the Group.  
Note 17: Related Party Transactions  
Note 18: Detailed Information – People Costs  
Note 19: Detailed Information – Shareholder Returns 115  
Note 20: Auditors Remuneration  
Note 21: Deed of Cross Guarantee  
Note 22: Parent Entity Information  
Note 23: Subsequent Events  
116  
116  
118  
119  
119  
120  
Note 24: New and Revised Accounting Standards  
Directors’ Declaration  
86  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
c. Foreign currency  
e. Key judgements and estimates  
Our Current Performance  
While the presentation currency of the Group is US dollars,  
entities in the Group may have other functional currencies,  
refl ecting the currency of the primary economic environment  
in which the relevant entity operates. The parent entity, CSL  
Limited, has a functional currency of Australian dollars.  
In the process of applying the Group’s accounting policies,  
management has made a number of judgements and estimates  
of future events. Material judgements and estimates are found  
in the following notes:  
Note 1: Segment Information  
and Business Combinations  
Note 1b:  
Note 3:  
Note 4:  
Note 5:  
Note 7:  
Note 15:  
Business Combination  
Tax  
Page 88  
Page 92  
Page 93  
Page 94  
Page 97  
Page 109  
The Group’s segments represent strategic business units that  
offer different products and operate in different industries  
and markets. They are consistent with the way the CEO (who  
is the chief operating decision-maker) monitors and assesses  
business performance in order to make decisions about  
resource allocation. Performance assessment is based on EBIT  
If an entity in the Group has undertaken transactions in foreign  
currency, these transactions are translated into that entity’s  
functional currency using the exchange rates prevailing at the  
dates of the transactions. Where the functional currency of a  
subsidiary is not US dollars, the subsidiary’s assets and liabilities  
are translated on consolidation to US dollars using the exchange  
rates prevailing at the reporting date, and its profit and loss is  
translated at average exchange rates. All resulting exchange  
differences are recognized in other comprehensive income and  
in the foreign currency translation reserve in equity.  
Inventories  
People Costs  
Intangible Assets  
Trade Receivables & Payables  
(earnings before interest and tax) and EBITDA (earnings before  
f. The notes to the fi nancial statements  
interest, tax, depreciation and amortisation). These measures  
are different from the profit or loss reported in the consolidated  
fi nancial statements which is shown after net interest and  
tax expense. This is because decisions that affect net interest  
expense and tax expense are made at the Group level. It is not  
considered appropriate to measure segment performance at the  
net profit after tax level.  
The notes to these fi nancial statements have been organised  
into logical groupings to help users fi nd and understand the  
information they need. Where possible, related information has  
been provided in the same place. More detailed information (for  
example, valuation methodologies and certain reconciliations)  
has been placed at the rear of the document and cross-  
referenced where necessary. CSL has also reviewed the notes for  
materiality and relevance and provided additional information  
where it is helpful to an understanding of the Group’s  
performance.  
d. Other accounting policies  
Significant accounting policies that summarise the measurement  
basis used and are relevant to an understanding of the fi nancial  
statements are provided throughout the notes to the fi nancial  
statements.  
The Group’s operating segments are:  
CSL Behring – manufactures, markets, and develops plasma  
therapies (plasma products and recombinants).  
Seqirus – manufactures and distributes non-plasma  
biotherapeutic products. The Seqirus segment is the  
combination of the previously disclosed bioCSL segment  
and the acquired Novartis influenza business which are  
now managed as a single business.  
g. Significant changes in the  
current reporting period  
There were no changes in accounting policy during the  
year ended 30 June 2016, nor did the introduction of new  
accounting standards lead to any change in measurement or  
disclosure in these fi nancial statements. See Note 24 for details  
of new accounting standards introduced this fi nancial year.  
CSL Intellectual Property – revenue and associated expenses  
from the licensing of intellectual property generated by  
the Group to unrelated third parties, and research and  
development expenses on projects where the Group has  
yet to determine the ultimate commercialisation strategy.  
87  
CSL Behring  
US$m  
Seqirus  
US$m  
CSL Intellectual Property Intersegment Elimination  
US$m US$m  
Consolidated Entity  
US$m  
2
016  
2015  
5,046.7  
2.3  
2016  
2015  
411.9  
13.4  
2016  
2015  
-
2016  
2015  
2016  
5,909.5  
204.7  
2015  
Sales to external customers  
Other revenue / Other income (excl interest income)  
Total segment revenue  
Interest income  
5,257.4  
2.4  
652.1  
79.4  
-
-
-
-
-
-
-
5,458.6  
152.6  
5,611.2  
15.6  
122.9  
122.9  
136.9  
136.9  
5,259.8  
5,049.0  
731.5  
425.3  
6,114.2  
13.9  
Unallocated revenue/income  
Consolidated revenue  
1.1  
1.2  
6,129.2  
1,494.8  
(57.3)  
1,437.5  
176.1  
5,628.0  
1,833.1  
(75.1)  
1,758.0  
-
Segment EBIT  
1,802.6  
1,776.5  
(335.7)  
15.5  
27.9  
41.1  
-
-
Unallocated revenue/income less unallocated costs  
Consolidated EBIT  
Gain on Business Acquisition  
Interest income  
13.9  
15.6  
Finance costs  
(71.6)  
1,555.9  
(313.5)  
1,242.4  
36.4  
(59.6)  
1,714.0  
(335.0)  
1,379.0  
25.0  
Consolidated profit before tax  
Income tax expense  
Consolidated net profit after tax  
Amortisation  
27.0  
145.9  
24.2  
131.8  
9.4  
23.0  
0.8  
6.2  
-
-
-
-
-
-
-
-
Depreciation  
6.3  
7.1  
175.2  
145.1  
2,003.2  
(75.1)  
11.2  
Segment EBITDA  
1,975.5  
1,932.5  
(303.3)  
22.5  
34.2  
48.2  
1,706.4  
(57.3)  
8.7  
Unallocated revenue/income less unallocated costs  
Unallocated depreciation and amortisation  
Consolidated EBITDA  
1,657.8  
1,939.3  
Segment assets  
6,763.4  
2,505.6  
6,089.0  
2,320.0  
1,129.9  
1,035.8  
366.5  
106.2  
25.6  
3.8  
23.5  
3.5  
(100.9)  
(100.9)  
(42.2)  
(42.2)  
7,818.0  
1,968.9  
(2,224.2)  
7,562.7  
3,444.3  
3,775.4  
(2,224.2)  
4,995.5  
6,436.8  
1,259.8  
(1,295.6)  
6,401.0  
2,387.5  
2,562.2  
(1,295.6)  
3,654.1  
Other unallocated assets  
Elimination of amounts between operating segments and unallocated  
Total assets  
Segment liabilities  
Other unallocated liabilities  
Elimination of amounts between operating segments and unallocated  
Total liabilities  
Other information – capital expenditure excluding Business  
Acquisition  
Payments for property, plant and equipment  
Unallocated payments for property, plant and equipment  
Payments for intangibles  
449.2  
56.7  
321.8  
32.3  
38.2  
13.9  
8.5  
4.1  
-
7.8  
-
-
-
-
-
491.5  
3.6  
338.1  
9.7  
33.7  
70.6  
565.7  
66.0  
413.8  
Total capital expenditure excluding Business Acquisition  
88  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Inter-segment sales  
Inter-segment sales are carried out on an arm’s length basis and refl ect current market prices.  
Geographical areas of operation  
The Group operates predominantly in Australia, the USA, Germany, Switzerland and the UK. The rest of the Group’s operations are spread across many countries and are collectively disclosed as ‘Rest of World’.  
Australia  
US$m  
United States  
US$m  
Germany  
US$m  
Switzerland  
US$m  
UK  
US$m  
Rest of world  
US$m  
Total  
US$m  
Geographic areas  
2
016  
513.6  
541.1  
2015  
553.5  
535.5  
2016  
2015  
2016  
2015  
739.0  
340.2  
2016  
2015  
2016  
2015  
198.1  
33.9  
2016  
2015  
2016  
2015  
5,458.6  
2,768.2  
External sales revenue  
2,407.8  
1,203.9  
2,135.5  
825.8  
680.4  
377.8  
200.7  
163.7  
274.7  
179.3  
1,832.3  
10.1  
1,668.8  
8.1  
5,909.5  
3,332.2  
Property, plant, equipment and intangible assets  
1,020.0  
1,024.7  
The fair value of assets and liabilities acquired are:  
Since the publication of the CSL Group half year accounts for  
the period ended 31 December 2015 a number of changes  
have been made to the asset allocation in the acquisition  
balance sheet.  
Note 1b: Business Combination  
On 31 July 2015 CSL completed the acquisition of Novartis’  
global influenza vaccine business. The acquiring entity was  
Seqirus Inc. (a 100% owned subsidiary of CSL Limited) for the  
US business and Seqirus UK Limited (a 100% owned subsidiary  
of CSL Limited) for the business excluding the US. The acquired  
business has been combined with CSL’s existing influenza  
business to create Seqirus, one of the top influenza businesses  
globally.  
Asset Class  
US$m  
35.9  
Cash  
Trade and other receivables  
Inventory  
81.7  
The total fair value of the acquired business at $456.6m and  
the gain on acquisition at $176.1m are unchanged.  
193.8  
7.8  
Land  
The changes in asset allocation are a $3.6m increase in the fair  
value of inventory; a reallocation between land (reduced from  
Buildings  
48.6  
Plant & equipment  
Intangible assets  
Deferred tax assets  
Other non-current assets  
Trade creditors & accruals  
Non-current liabilities  
Fair Value of Net Assets Acquired  
Consideration paid  
Gain on acquisition  
227.8  
31.6  
$
45m to $7.8m), buildings ($48.6m) and plant & equipment  
(increased from $210.1m to 227.8m); a reduction in deferred  
tax assets from $49.8m to $22.6m; a decrease in other current  
assets of $0.2m; and an increase in trade creditors and accruals  
of $5.3m.  
The acquirer has assumed control of 100% of the acquired  
business with effect from 31 July 2015. The transaction  
involved the acquisition of shares in a number of entities and  
assets for the remaining parts of the business. Certain entities  
are subject to a delayed legal close for employee  
and/or regulatory reasons however CSL exercises control over  
those business and is exposed to, and has the ability to affect,  
the variable returns associated with its involvement with those  
entities.  
22.6  
2.6  
(183.7)  
(12.1)  
456.6  
280.5  
176.1  
These changes were required because additional information  
was available that permitted an improved allocation between  
asset classes.  
The gain on acquisition arises due to the bargain purchase  
nature of the transaction. Novartis had previously announced  
the sale of their entire vaccine business to GSK, a competitor in  
the influenza business. Under the arrangement, Novartis had  
a put option to sell the influenza vaccine business to GSK for  
The consideration was paid 100% in cash and there is no  
contingent consideration in this transaction.  
$
250m. We believe that competition regulators were unlikely  
to approve the acquisition of the influenza business by GSK  
and as a result Novartis conducted a separate sale process for  
the influenza business. CSL was able to negotiate a purchase  
price below the fair value of the business in light of Novartis’  
intention to fully exit vaccines.  
89  
The gain is recognised in the Statement of Comprehensive Income.  
The gain on acquisition is the difference between the fair value  
of net assets acquired and the consideration paid or payable. Fair  
value has been determined by generating a long term fi nancial  
model of the acquired business and discounting the resultant cash  
fl ows to a present value using an appropriate discount rate. The  
construction of such a model requires the exercise of considerable  
judgement in areas such as future sales volume and price, cost  
of sales, operating expenses and levels of working capital and  
capital expenditure. In determining an appropriate discount rate  
consideration has been given to the different risk profile of the  
acquired business when compared to the broader CSL business  
and a higher discount rate than historically applied to the Group’s  
impairment tests has been used to refl ect a higher level of risk.  
The model was also used to allocate fair value to asset classes and  
geographies.  
Note 2: Revenue and Expenses  
2
016  
2015  
US$m  
2016  
US$m  
2015  
US$m  
Revenue  
US$m  
Expenses  
Sales  
5,909.5  
119.9  
13.9  
5,458.6  
106.8  
15.6  
Finance costs  
71.6  
183.7  
36.6  
59.6  
156.2  
25.1  
Royalties  
Depreciation and amortisation of fi xed assets  
Amortisation of intangibles  
Finance revenue  
Licence revenue  
Pandemic facility reservation fees  
Other  
3.1  
29.6  
Total depreciation and amortisation expense  
Write-down of inventory to net realisable value  
Rental expenses relating to operating leases  
Employee benefits expense  
220.3  
57.3  
181.3  
57.1  
68.7  
7.5  
14.1  
9.9  
47.4  
40.7  
Total revenue from  
6,129.2  
5,628.0  
1,454.3  
47.5  
1,247.6  
32.0  
continuing operations  
Net foreign exchange loss  
Recognition and measurement of revenue  
Recognition and measurement of expenses  
Finance costs: Includes interest expense and borrowing costs.  
The acquired business has contributed $344m of revenue and  
Revenue is recognised and measured at the fair value of the  
consideration that has been or will be received. The Group recognises These are recognised as an expense when incurred, except  
revenue when the amount of revenue can be reliably measured  
and it is probable that the future economic benefits will fl ow to the  
Group.  
$306.6m of net losses after tax, excluding the gain on acquisition,  
in the period from 31 July 2015 to 30 June 2016. Due to the  
seasonal nature of the influenza business it is not practicable to  
reliably estimate the revenue and profitability for the month of July  
where fi nance costs are directly attributable to the acquisition or  
construction of a qualifying asset. In this case they are capitalised  
as part of the cost of the asset. Interest-bearing liabilities and  
borrowings are stated at amortised cost. Any difference between  
the borrowing proceeds (net of transaction costs) and the  
redemption value is recognised in the statement of comprehensive  
income over the borrowings’ period using the effective interest  
method.  
2015 and we have been unable to obtain this information from  
Further information about each source of revenue and the criteria for  
recognition follows.  
the vendor.  
Sales: Revenue earned (net of returns, discounts and allowances)  
from the sale of products. Sales are recognised when the significant  
risks and rewards of ownership of the goods have passed to the  
buyer.  
Depreciation and amortisation: Refer to Note 8 for details on  
depreciation and amortisation of fi xed assets and Note 7 for details  
on amortisation of intangibles.  
Royalties: Income received or receivable from licensees of CSL  
intellectual property, where the amount payable is based on sales of  
product, is recognised as it accrues which is when the Group has a  
legally enforceable claim.  
Write-down of inventory to net realisable value: Included in  
Cost of Sales in the Statement of Comprehensive Income. Refer to  
Note 4 for details of inventories.  
Finance revenue: Income from cash deposits is recognised as it  
accrues.  
Employee benefits expense: Refer to Note 5 for further details.  
Rental expenses relating to operating leases:  
Operating leases are leases in which a significant portion of the  
risks and rewards of ownership are not transferred to the Group.  
Payments made under operating leases are charged to the  
statement of comprehensive income on a straight-line basis  
over the period of the lease.  
Licence revenue: Milestone income received or receivable from  
licensees of CSL intellectual property is recognised as it accrues.  
Pandemic facility reservation fees: Income received from  
governments in return for access to influenza manufacturing facilities  
in the event of a pandemic. Contracts are time based and revenue is  
accrued progressively over the life of the relevant contract.  
Other: Rent, proceeds from sale of fi xed assets and other income is  
recognised as it accrues.  
90  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Goods and Services Tax and other  
foreign equivalents (GST)  
Note 3: Tax  
2
016  
2015  
US$m  
Revenues, expenses and assets are recognised net of GST,  
except where GST is not recoverable from a taxation authority,  
in which case it is recognised as part of an asset’s cost of  
acquisition or as part of the expense.  
US$m  
a. Income tax expense recognised in the statement of comprehensive income  
Current tax expense  
Current year  
419.5  
344.6  
Deferred tax expense  
Origination and reversal of temporary differences  
Total deferred tax expense/(recovery)  
Over provided in prior years  
(98.5)  
(98.5)  
(7.5)  
16.3  
16.3  
(25.9)  
335.0  
Income tax expense  
313.5  
b. Reconciliation between tax expense and pre-tax net profit  
The reconciliation between tax expense and the product of accounting profit before income tax  
multiplied by the Group’s applicable income tax rate is as follows:  
Accounting profit before income tax  
1,555.9  
466.8  
(98.5)  
(15.7)  
(7.5)  
1,714.0  
514.2  
(152.4)  
(13.6)  
(25.9)  
-
Income tax calculated at 30% (2015: 30%)  
Effects of different rates of tax on overseas income  
Research and development  
Over provision in prior year  
Intercompany restructuring  
12.0  
Non taxable gain on acquisition  
Other non-deductible expenses  
Income tax expense  
(52.8)  
9.2  
313.5  
-
12.7  
335.0  
c. Income tax recognised directly in equity  
Deferred tax benefit  
Share-based payments  
Income tax (expense)/benefit recognised in equity  
0.9  
0.9  
(5.3)  
(5.3)  
91  
2
016  
2015  
US$m  
US$m  
d. Deferred tax assets and liabilities  
Deferred tax asset  
Deferred tax liability  
389.0  
(119.2)  
269.8  
274.4  
(138.2)  
136.2  
Net deferred tax asset  
Deferred tax balances refl ect temporary differences attributable to:  
Amounts recognised in the statement of comprehensive income  
Inventories  
114.6  
(82.5)  
(102.4)  
18.5  
155.6  
53.5  
10.2  
(2.2)  
10.0  
80.4  
87.0  
(83.9)  
(85.3)  
17.0  
48.9  
29.2  
15.3  
7.5  
Property, plant and equipment  
Intangible assets  
Trade and other payables  
Recognised carry forward tax losses  
a
Retirement liabilities, net  
Research and development offsets  
Trade and other receivables  
Other assets  
Other liabilities and provisions  
Tax bases not in net assets – share-based payments  
(3.9)  
84.3  
5.0  
(1.4)  
254.3  
121.1  
Amounts recognised in equity  
Share-based payments  
15.5  
15.1  
Net deferred tax asset  
269.8  
136.2  
e. Movement in temporary differences during the year  
Opening balance  
136.2  
22.6  
98.5  
15.7  
0.9  
171.4  
-
Acquired through business acquisition  
Credited/(charged) to profit before tax  
Credited/(charged) to other comprehensive income  
Credited to equity  
(16.3)  
13.7  
(5.3)  
(27.3)  
136.2  
Currency translation difference  
(4.1)  
269.8  
Closing balance  
Unrecognised deferred tax assets  
Deferred tax assets have not been recognised for the following items:  
b
Tax losses with no expiry date  
0.4  
0.4  
a
Deferred tax assets in respect of carry forward tax losses are principally recorded in CSL entities in Switzerland and the UK (prior year:  
Switzerland) and are recognised as it is probable that future taxable profit will be available in those entities to utilise the losses.  
Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available  
b
for utilisation in the entities that have recorded these losses.  
92  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Current taxes  
Note 4: Inventories  
Current tax assets and liabilities are the amount expected to be  
recovered from (or paid to) tax authorities, under the tax rates  
and laws in each jurisdiction. These include any rates or laws  
that are enacted or substantively enacted as at the balance  
sheet date.  
2
016  
2015  
US$m  
Key Judgements and Estimates -  
Tax  
US$m  
Raw materials  
550.5  
486.2  
546.1  
Work in progress  
Finished products  
Total inventories  
816.9  
784.6  
723.3  
Management regularly assesses the risk of uncertain  
tax positions, and recognition and recoverability of  
Deferred taxes  
2,152.0  
1,755.6  
Deferred tax liabilities are recognised for taxable temporary  
differences. Deferred tax assets are recognised for deductible  
temporary differences, carried forward unused tax assets and  
unused tax losses, only if it is probable that taxable profit will be  
available to utilise them.  
deferred tax assets. To do this requires judgements  
about the application of income tax legislation in  
jurisdictions in which the Group operates and the  
future operating performance of entities with carry  
forward losses. These judgements and assumptions,  
which include matters such as the availability and  
timing of tax deductions and the application of the  
arm’s length principle to related party transactions,  
are subject to risk and uncertainty. Changes in  
circumstances may alter expectations and affect the  
carrying amount of deferred tax assets and liabilities.  
Any resulting adjustment to the carrying value of  
a deferred tax item will be recorded as a credit or  
charge to the statement of comprehensive income.  
Raw Materials  
Raw materials comprise collected and purchased plasma,  
chemicals, fi lters and other inputs to production that will be  
further processed into saleable products but have yet to be  
allocated to manufacturing.  
The carrying amount of deferred income tax assets is reviewed  
at the reporting date. If it is no longer probable that taxable  
profit will be available to utilise them, they are reduced  
accordingly.  
Work in Progress  
Work in progress comprises all inventory items that are  
currently in use in manufacturing and intermediate products  
such as pastes generated from the initial stages of the plasma  
production process.  
Deferred tax is measured using tax rates and laws that are  
enacted at the reporting date and are expected to apply when  
the related deferred income tax asset is realised or when the  
deferred income tax liability is settled.  
Deferred tax assets and liabilities are offset only if a legally  
enforceable right exists to set-off current tax assets against  
current tax liabilities and if they relate to the same taxable entity  
or group and the same taxation authority.  
Income taxes attributable to amounts recognised in other  
comprehensive income or directly in equity are also recognised  
in other comprehensive income or in equity, and not in the  
income statement.  
CSL Limited and its 100% owned Australian subsidiaries have  
formed a tax consolidated group effective from 1 July 2003.  
93  
Finished Products  
Salaries and wages  
Note 5: People Costs  
Finished products comprise material that is ready for sale and  
has passed all quality control tests.  
Wages and salaries include non-monetary benefits, annual leave  
and long service leave. These are recognised and presented in  
different ways in the fi nancial statements:  
a. Employee benefits  
Inventories generally have expiry dates and the Group provides  
for product that is short dated. Expiry dates for raw material are  
no longer relevant once the materials are used in production.  
At this stage the relevant expiry date is that applicable to the  
resultant intermediate or fi nished product.  
Employee benefits include salaries and wages, annual leave and  
long-service leave, defined benefit and defined contribution  
plans and share-based payments incentive awards.  
The liability for annual leave and the portion of long  
service leave expected to be paid within twelve months is  
measured at the amount expected to be paid.  
$
31.5m  
6.1m  
25.5m  
2016  
$39.5m  
$
The liability for long service leave and annual leave  
expected to be paid after one year is measured as the  
present value of expected future payments to be made  
in respect of services provided by employees up to the  
reporting date.  
$1,454.3m  
$
Inventories are carried at the lower of cost or net realisable  
value. Cost includes direct material and labour and an  
appropriate proportion of variable and fi xed overheads. Fixed  
overheads are allocated on the basis of normal operating  
capacity.  
The liability for annual leave and the portion of long service  
leave that has vested at the reporting date is included in  
the current provision for employee benefits.  
Net realisable value is the estimated revenue that can be earned  
from the sale of a product less the estimated costs of both  
completion and selling. The Group assesses net realisable value  
of plasma derived products on a basket of products basis given  
their joint product nature.  
The portion of long service leave that has not vested at the  
reporting date is included in the non-current provision for  
employee benefits.  
$1,351.7m  
Key judgements and estimates -  
Inventory  
$25.5m  
6.0m  
28.6m  
2
$
015  
1,247.6m  
$26.7m  
$
$
Various factors affect the assessment of recoverability  
of the carrying value of inventory, including  
regulatory approvals and future demand for the  
Group’s products. These factors are taken into account  
in determining the appropriate level of provisioning  
for inventory.  
$1,160.8m  
Defined benefit  
plan expense  
Defined contribution  
plan expense  
Equity settled share-based  
payments expense (LTI)  
Cash settled share-based  
payments expense (EDIP)  
Salaries and wages  
94  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Defined benefit plans  
Defined contribution plans  
The Group makes contributions to various defined contribution  
pension plans and the Group’s obligation is limited to these  
contributions. The amount recognised as an expense for the  
year ended 30 June 2016 was $31.5m (2015: $25.5m).  
2
016  
2015  
US$m  
US$m  
Expenses/(gains) recognised in the statement of comprehensive income are as follows:  
Current service costs  
27.7  
3.8  
25.4  
1.6  
Equity settled share-based payments expense  
Net Interest cost  
Share-based payments expenses arise from plans that award  
long-term incentives.  
Past service costs  
8.0  
(0.3)  
26.7  
Total included in employee benefits expense  
39.5  
Detailed information about the terms and conditions of the  
share-based payments arrangements is presented in Note 18.  
Defined benefit pension plans provide either a defined  
lump sum or ongoing pension benefits for employees upon  
retirement, based on years of service and fi nal average salary.  
Key judgements and estimates -  
People Costs  
Liabilities or assets in relation to these plans are recognised  
in the balance sheet, measured as the present value of the  
obligation less the fair value of the pension fund’s assets at that  
date.  
The determination of certain employee benefit  
liabilities requires an estimation of future employee  
service periods and salary levels and the timing of  
benefit payments. These assessments are made based  
on past experience and anticipated future trends.  
The expected future payments are discounted using  
the rate applicable to high quality corporate bonds.  
Discount rates are matched to the expected payment  
dates of the liabilities.  
Present value is based on expected future payments to the  
reporting date, calculated by independent actuaries using the  
projected unit credit method. Past service costs are recognised  
in income on the earlier of the date of plan amendments  
or curtailment, and the date that the Group recognises  
restructuring related costs.  
Detailed information about the Group’s defined benefit plans is  
in Note 18.  
95  
Outstanding share-based payment equity instruments  
The number and weighted average exercise price for each share-based payment scheme outstanding is as follows. All schemes are settled by physical delivery of shares except for instruments granted  
to good leavers from 2012 onwards which may be settled in cash at the discretion of the company.  
Global Employee  
Share Plan (GESP)  
#
Options  
Performance Rights  
Total  
Weighted average  
exercise price  
Weighted average  
Weighted average  
Number  
Number  
756,517  
231,312  
165,446  
29,281  
19,998  
-
exercise price  
A$0.00  
A$0.00  
A$0.00  
A$0.00  
A$0.00  
-
Number  
75,882  
152,189  
150,842  
-
exercise price  
A$73.50  
A$82.83  
A$77.57  
-
Outstanding at the beginning of the year  
Granted during the year  
705,322  
348,594  
373,364  
-
A$40.80  
A$89.52  
A$33.12  
-
1,537,721  
732,095  
689,652  
29,281  
Exercised during the year  
Cash settled during the year  
Forfeited during the year  
2,408  
-
A$32.04  
-
-
-
22,406  
#
GESP True-up  
(1,499)  
75,730  
A$73.50  
A$87.81  
(1,499)  
Closing balance at the end of the year  
678,144  
125,546  
A$74.27  
A$32.46  
773,104  
84,779  
A$0.00  
A$0.00  
1,526,978  
210,325  
Exercisable at the end of the year  
#
The exercise price at which GESP plan shares are issued is calculated at a 15% discount to the lower of the ASX market price on the fi rst and last dates of the contribution period. Accordingly the exercise price and the fi nal number of shares to be issued is not yet known  
and may differ from the assumptions and fair values disclosed above). The number of shares which may ultimately be issued from entitlements granted on 1 March 2016 has been estimated based on information available as at 30 June 2016.  
(
The share price at the dates of exercise (expressed as a  
weighted average) by equity instrument type, is as follows:  
and 1 April 2016, additional notional shares were granted  
of 29,048, 67,782 and 10,309, respectively. These notional  
shares will generate a cash payment to participants based on  
a prorated vesting period from the respective grant dates and  
must comply with the employment and performance criteria  
previously noted. The amount of the cash payment will be  
determined by reference to the CSL share price immediately  
before the award maturity date.  
b. Key management personnel disclosures  
The remuneration of Directors and key management personnel  
is disclosed in section 17 of the Directors’ Report and has been  
audited.  
2016  
2015  
Options  
A$101.87  
A$98.02  
A$97.37  
A$79.18  
A$78.58  
A$83.50  
Performance Rights  
GESP  
Total compensation for key management personnel  
2016  
2015  
US$  
US$  
The October 2012 EDIP grant vested during the period ended  
Total of short term  
remuneration elements  
14,454,863  
9,938,338  
Cash-settled share-based payments expense  
3
0 June 2016 and an amount of $22.8m was paid to employees  
On 1 October 2015, 257,850 notional shares were granted to  
employees under the Executive Deferred Incentive Plan (EDIP)  
(2015: $33.8m). The carrying amount of the liability at 30 June  
2016 attributable to the 2013, 2014 and 2015 grants is $42.3m  
(2015: $39.7m) measured at fair value. Fair value is determined  
by reference to the CSL share price at reporting date, adjusted  
for expected future dividends that will be paid between  
reporting date and vesting date.  
Total of post-employment elements  
Total of other long term elements  
Total of share-based payments  
Total of all remuneration elements  
177,347  
1,446,020  
8,905,582  
24,983,812  
176,645  
1,558,632  
5,734,718  
17,408,333  
(October 2014: 268,760). The notional shares will generate a  
cash payment to participants in three years’ time, provided they  
are still employed by the company and receive a satisfactory  
performance review over that period. On 1 January, 1 March  
96  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Our Future  
Note 6: Research & Development  
The Group conducts research and development activities to  
support future development of products to serve our patient  
communities, to enhance our existing products and to develop  
new therapies.  
All costs associated with these activities are expensed as  
incurred as uncertainty exists up until the point of regulatory  
approval as to whether a research and development project  
will be successful. At the point of approval the total cost of  
development has largely been incurred.  
For the year ended 30 June 2016, the research costs, net of  
recoveries, were $613.8m (2015: $462.7m). Further information  
about the Group’s research and development activities can be  
found on the CSL website.  
Note 7: Intangible Assets  
Intangible capital  
work in progress  
US$m  
Goodwill  
US$m  
Intellectual property  
US$m  
Software  
US$m  
Total  
US$m  
Year  
2016  
2015  
705.3  
-
2016  
2015  
2016  
2015  
124.5  
(72.4)  
52.1  
2016  
51.0  
-
2015  
2016  
2015  
1,233.1  
(306.2)  
926.9  
Cost  
674.3  
-
383.3  
(246.0)  
137.3  
365.7  
169.6  
(89.6)  
80.0  
37.6  
-
1,278.2  
(335.6)  
942.6  
Accumulated amortisation  
Net carrying amount  
(233.8)  
131.9  
674.3  
705.3  
51.0  
37.6  
Movement  
Net carrying amount at the beginning of the year  
Additions  
705.3  
731.1  
131.9  
4.9  
118.7  
33.7  
-
52.1  
1.9  
47.2  
0.3  
37.6  
61.7  
-
27.1  
30.4  
-
926.9  
68.5  
31.6  
-
924.1  
64.4  
-
-
-
Business acquisition  
-
-
31.6  
-
-
-
Transfers from intangible capital work in progress  
Transfers to/from property, plant and equipment  
Disposals  
-
-
(3.1)  
-
45.4  
-
20.0  
0.2  
(45.4)  
(0.2)  
-
(16.9)  
1.2  
-
-
-
-
-
(0.2)  
(0.7)  
(36.6)  
(46.9)  
942.6  
1.4  
-
-
-
-
-
-
(0.7)  
(18.6)  
(0.1)  
80.0  
-
-
1
Amortisation for the year  
(18.0)  
(13.1)  
137.3  
(10.3)  
(7.1)  
131.9  
(14.8)  
(0.8)  
52.1  
-
-
(25.1)  
(37.9)  
926.9  
Currency translation differences  
(31.0)  
674.3  
(25.8)  
705.3  
(2.7)  
51.0  
(4.2)  
37.6  
Net carrying amount at the end of the year  
1
The amortisation charge is recognised in general and administration expenses in the statement of comprehensive income.  
97  
Goodwill  
Software  
Impairment losses recognised in respect of cash generating  
units are allocated fi rst to reduce the carrying amount of any  
goodwill allocated to cash generating units, and then to reduce  
the carrying amount of the other assets in the unit on a pro-rata  
basis.  
Any excess of the fair value of the purchase consideration of  
an acquired business over the fair value of the identifiable net  
assets (minus incidental expenses) is recorded as goodwill.  
Costs incurred in developing or acquiring software, licences  
or systems that will contribute future fi nancial benefits are  
capitalised. These include external direct costs of materials and  
service and direct payroll and payroll related costs of employees’  
time spent on the project. Amortisation is calculated on a  
straight line basis over periods generally ranging from 3 to 10  
years. IT development costs include only those costs directly  
attributable to the development phase and are only recognised  
following completion of technical feasibility, where the Group  
has the intention and ability to use the asset.  
Goodwill is allocated to each of the cash-generating units (the  
business unit which represents the lowest level within the Group  
at which goodwill is monitored) expected to benefit from the  
combination. The aggregate carrying amounts of goodwill  
allocated to each business unit are as follows:  
Key judgements and estimates  
2
016  
2015  
$m  
$m  
The impairment assessment process requires  
Recognition and measurement  
CSL Behring  
665.4  
8.9  
696.0  
9.3  
management to make significant judgements.  
Determining whether goodwill has been impaired  
requires an estimation of the recoverable amount  
of the cash generating units using a discounted cash  
fl ow methodology. This calculation uses cash fl ow  
projections based on operating budgets and a three-  
year strategic business plan, after which a terminal  
value, based on management’s view of the longer  
term growth profile of the business is applied. Cash  
fl ows have been discounted using an implied pre-tax  
discount rate of 8.9% (2015: 8.0%) which is calculated  
with reference to external analyst views, long-term  
government bond rates and the company’s pre-tax  
cost of debt. In the context of intangible assets of  
indefinite life, this requires an estimation of the  
discounted net cash inflows that may be generated  
through the use or sale of the intangible asset. The  
determination of cash fl ows over the life of an asset  
requires judgement in assessing the future demand  
for the Group’s products, any changes in the price and  
cost of those products and of other costs incurred by  
the Group.  
CSL Intellectual Property  
Closing balance of goodwill as at 30 June  
The useful lives of intangible assets are assessed to be either  
fi nite or indefinite.  
674.3  
705.3  
Intangible assets with fi nite lives are amortised over the useful  
life of the asset. The amortisation period and method is  
reviewed at each fi nancial year end at a minimum.  
Goodwill is not amortised, but is measured at cost less any  
accumulated impairment losses. Impairment occurs when a  
business unit’s recoverable amount falls below the carrying  
value of its net assets.  
Intangible assets with indefinite useful lives are not amortised.  
The useful life of these intangibles is reviewed each reporting  
period to determine whether indefinite life assessment  
continues to be supportable.  
The results of the impairment test show that each business  
unit’s recoverable amount exceeds the carrying value of its net  
assets, inclusive of goodwill. Consequently, there is no goodwill  
impairment as at 30 June 2016.  
Impairment of intangible assets  
Assets with fi nite lives are subject to amortisation and are  
reviewed for impairment whenever events or changes in  
circumstances indicate that the carrying amount may not be  
recoverable.  
A change in assumptions significant enough to lead to  
impairment is not considered a reasonable possibility.  
Intellectual property  
Intangible assets that have an indefinite useful life (including  
goodwill) are not subject to amortisation and are tested  
annually for impairment or more frequently if events or changes  
in circumstances indicate that they may be impaired.  
Intellectual property acquired separately or in a business  
combination is initially measured at cost, which is its fair value at  
the date of acquisition. Following initial recognition, it is carried  
at cost less any amortisation and impairment.  
An impairment loss is recognised in the statement of  
comprehensive income for the amount by which the asset’s  
carrying amount exceeds its recoverable amount. The  
recoverable amount is the higher of an asset’s fair value less  
costs to sell and value in use. For the purpose of assessing  
impairment, assets are grouped at the lowest levels for  
which there are separately identifiable cash fl ows (cash  
generating units).  
Intellectual property with a fair value of $31.6m was acquired  
with the Novartis Influenza vaccines business. This intellectual  
property relates to an adjuvant technology that is used in the  
production of Seqirus’ adjuvanted influenza vaccine and is also  
licensed to a third party. All intellectual property has a fi nite life.  
98  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Note 8: Property, Plant and Equipment  
Leasehold  
improvements  
US$m  
Leased property, plant  
and equipment  
US$m  
Capital work in  
progress  
Land  
US$m  
Buildings  
US$m  
Plant and equipment  
US$m  
Total  
US$m  
US$m  
2
016  
2015  
19.6  
-
2016  
2015  
409.3  
2016  
223.3  
(59.1)  
164.2  
2015  
2016  
2015  
1,937.9  
(1,062.2)  
875.7  
2016  
33.8  
2015  
32.5  
2016  
621.2  
-
2015  
2016  
2015  
3,087.0  
(1,245.7)  
1,841.3  
Cost  
26.4  
-
502.2  
(131.0)  
371.2  
185.6  
2,354.7  
502.1  
-
3,761.6  
(1,372.0)  
2,389.6  
Accumulated depreciation / amortization  
Net carrying amount  
(117.9)  
291.4  
(48.6) (1,163.5)  
(18.4)  
15.4  
(17.0)  
15.5  
26.4  
19.6  
137.0  
1,191.2  
621.2  
502.1  
Movement  
Net carrying amount at the start of the year  
Transferred from capital work in progress  
Business Acquisition  
19.6  
23.9  
291.4  
55.1  
48.6  
0.7  
219.7  
110.7  
-
137.0  
36.4  
-
114.8  
36.5  
-
875.7  
266.0  
227.8  
11.3  
792.7  
289.5  
-
15.5  
-
17.4  
-
502.1  
662.5  
1,841.3  
-
1,831.0  
-
-
-
-
-
-
-
-
-
(357.5)  
(436.7)  
7.8  
-
-
-
493.8  
(0.4)  
0.2  
-
-
353.3  
(2.6)  
(1.2)  
-
284.2  
511.3  
(30.8)  
0.2  
-
Other Additions  
-
-
-
-
-
2.5  
2.3  
0.2  
7.1  
3.2  
(1.8)  
-
2.9  
(3.9)  
-
366.0  
(56.9)  
(1.4)  
(156.2)  
50.7  
Disposals  
(0.1)  
-
(0.5)  
-
(0.4)  
-
(1.4)  
-
(28.1)  
-
(48.5)  
(0.2)  
(127.3)  
45.7  
Transferred to/from intangibles  
Depreciation / amortisation for the year  
(17.1)  
0.1  
(14.5)  
0.5  
(11.0)  
0.4  
(11.9)  
1.4  
(153.0)  
25.8  
(2.6)  
1.2  
(2.5)  
3.1  
(183.7)  
27.5  
Accumulated depreciation / amortisation on  
disposals  
-
-
Currency translation differences  
(1.0)  
26.4  
(4.3)  
19.6  
(7.5)  
(27.0)  
291.4  
(0.5)  
(2.6)  
(34.3)  
(83.3)  
875.7  
(0.1)  
15.4  
(1.5)  
15.5  
(17.0)  
621.2  
(73.2)  
502.1  
(60.4)  
(191.9)  
1,841.3  
Net carrying amount at the end of the year  
371.2  
164.2  
137.0  
1,191.2  
2,389.6  
Property, plant and equipment  
Gains and losses on disposals of items of property, plant and  
equipment are determined by comparing proceeds with carrying  
amounts and are included in the statement of comprehensive  
income when realised.  
included in interest bearing liabilities and borrowings. Each lease  
payment is allocated between the liability and fi nance cost. The  
fi nance cost is charged to the statement of comprehensive income  
over the lease period so as to produce a constant periodic rate of  
interest on the remaining balance of the liability for each period.  
The property, plant and equipment acquired under a fi nance lease  
is depreciated over the shorter of the asset’s useful life and the  
lease term.  
Land, buildings, capital work in progress and plant and equipment  
assets are recorded at historical cost less, where applicable,  
depreciation and amortisation.  
40% of the Holly Springs facility, acquired with the Novartis  
Depreciation is on a straight-line basis over the estimated useful  
life of the asset.  
Influenza business, is legally owned by the US Government.  
Full legal title will transfer to CSL on the completion of the Final  
Closeout Technical Report, expected in the next three to fi ve years.  
CSL has full control of the asset and 100% of the value of the  
facility is included in the consolidated fi nancial statements.  
Buildings  
5 – 40 years  
3 – 15 years  
5 – 10 years  
Plant and equipment  
Leasehold improvements  
Leasehold improvements  
The cost of improvements to leasehold properties is amortised  
over the unexpired period of the lease or the estimated useful life  
of the improvement, whichever is the shorter.  
Assets under Finance Leases  
Assets’ residual values and useful lives are reviewed and adjusted  
if appropriate at each reporting date. Items of property, plant and  
equipment are derecognised upon disposal or when no further  
economic benefits are expected from their use or disposal.  
Leases of property, plant and equipment where the Group, as  
lessee, has substantially all the risks and rewards of ownership  
are classified as fi nance leases. A fi nance lease is capitalised at  
the lease’s inception at the fair value of the leased property or,  
if lower, the present value of the minimum lease payments. The  
corresponding rental obligations, net of fi nance charges, are  
Impairment testing for property, plant and equipment occurs if an  
impairment trigger is identified. No impairment triggers have been  
identified in the current year.  
99  
Earnings per Share  
Note 9: Deferred Government Grants  
Returns, Risk & Capital Management  
CSL’s basic and diluted EPS are calculated using the Group’s  
net profit for the fi nancial year of US$1,242.4m (2015:  
US$1,379.0m).  
Note 10: Shareholder Returns  
2
016  
2015  
$m  
$m  
Dividends  
Current deferred income  
3.1  
35.0  
38.1  
2.1  
31.9  
34.0  
2
016  
2015  
Non-current deferred income  
Total deferred government grants  
Dividends are paid from the retained earnings and profits of CSL  
Limited, as the parent entity of the Group. (See Note 19 for the  
Group’s retained earnings). During the year, the parent entity  
reported profits of A$814.2m (2015: A$1,251.9m). The parent  
entity’s retained earnings as at 30 June 2016 were A$4,956.7m  
(2015: A$4,877.6m). During the fi nancial year A$791.5m (the  
equivalent of US$579.0m) was distributed to shareholders by  
way of a dividend, with a further A$403.2m (the equivalent of  
US$310.5m) being determined as a dividend payable subsequent  
to the balance date.  
Basic EPS  
US$2.689  
US$2.923  
Weighted average number of  
ordinary shares  
461,999,573  
471,817,239  
Government grants are recognised at their fair value where there  
is reasonable assurance that the grant will be received and the  
Group will comply with all attached conditions. Government  
grants relating to an expense item are deferred and recognised  
in the statement of comprehensive income over the period  
necessary to match them with the expenses that they are intended  
to compensate. Government grants received for which there  
are no future related costs are recognised in the statement of  
comprehensive income immediately. Government grants relating  
to the purchase of property, plant and equipment are included  
in current and non-current liabilities as deferred income and are  
released to the statement of comprehensive income on a straight  
line basis over the expected useful lives of the related assets.  
Diluted EPS  
US$2.683  
US$2.914  
Adjusted weighted average  
number of ordinary shares,  
represented by:  
463,117,064  
473,165,225  
Weighted average ordinary  
shares  
461,999,573  
471,817,239  
FY2016 FY2015  
Plus:  
Dividend paid  
US$m  
US$m  
2
Employee share schemes  
1,117,491  
1,347,986  
Paid: Final ordinary dividend of US$0.66 per  
share, unfranked, paid on 2 October 2015 for  
FY15 (prior year: US$0.60 per share, unfranked  
paid on 3 October 2014 for FY14)  
293.4 268.5  
2
Subsequent to 30 June 2016, 18,586 shares were issued, as required under the  
Employee Performance Rights Plan. There have been no other ordinary shares issued  
since the reporting date and before the completion of this fi nancial report.  
Paid: Interim ordinary dividend of US$0.58 per  
share, unfranked, paid on 15 April 2016 for FY16  
285.6 266.9  
Diluted EPS differs from Basic EPS as the calculation takes into  
account potential ordinary shares arising from employee share  
schemes operated by the Group.  
(prior year: US$0.58 per share, unfranked paid on  
10 April 2015 for FY15)  
On-market Share Buyback  
Total paid  
579.0 535.4  
310.5 306.8  
During the year, the Group carried out an on-market share buyback  
of up to A$1b as an element of its capital management program.  
As at 30 June 2016, shares to a value of A$908.5m have been  
purchased.  
Dividend determined, but not paid at year  
end:  
Final ordinary dividend of US$0.68 per share,  
unfranked, expected to be paid on 7 October  
2
016 for FY16, based on shares on issue at  
The on-market buyback was chosen as the most effective method  
to return capital to shareholders after consideration of the various  
alternatives. The on-market buyback provides the Group with  
maximum fl exibility and allows shareholders to choose whether to  
participate through normal equity market processes.  
reporting date. The aggregate amount of the  
proposed dividend will depend on actual number  
of shares on issue at dividend record date (prior  
year: US$0.66 per share, unfranked paid on 3  
October 2015 for FY15)  
The Group’s contributed equity includes the Share Buyback Reserve  
of (US$4,213.0m) (2015: (US$3,560.4m)). The Group’s ordinary  
share contributed equity has been reduced to nil from previous share  
buybacks.  
The distribution in respect of the 2016 fi nancial year represents a  
US$1.26 dividend paid for FY2016 on each ordinary share held.  
These dividends are approximately 46.9% of the Group’s basic  
earnings per share (“EPS”) of US$2.689.  
100  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Contributed Equity  
Note 11: Financial Risk Management  
3
TThe following table illustrates the movement in the Group’s contributed equity .  
CSL holds fi nancial instruments that arise from the Group’s  
need to access fi nancing, from the Group’s operational  
activities and as part of the Group’s risk management activities.  
2016  
2015  
The Group is exposed to fi nancial risks associated with its  
fi nancial instruments. Financial instruments comprise cash  
and cash equivalents, receivables, payables, bank loans and  
overdrafts, unsecured notes, lease liabilities and derivative  
instruments.  
Number of shares  
US$m  
Number of shares  
US$m  
Opening balance at 1 July  
464,832,827  
(3,560.4)  
474,788,269  
(2,797.8)  
Shares issued to employees (see also Note 18):  
Performance Options Plan  
373,364  
165,446  
9.0  
-
995,207  
274,782  
28.8  
-
The primary risks these give rise to are:  
Performance Rights Plan (for nil  
consideration)  
Foreign exchange risk.  
Interest rate risk.  
Global Employee Share Plan (GESP)  
150,842  
(8,913,732)  
456,608,747  
8.4  
(670.0)  
135,962  
(11,361,393)  
464,832,827  
7.2  
(798.6)  
Share buy-back, inclusive of cost  
Credit risk.  
Closing balance  
(4,213.0)  
(3,560.4)  
Funding and liquidity risk.  
Capital management risk.  
3
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. Where the  
Group reacquires its own shares, for example as a result of a share buy-back, those shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid to  
acquire the shares, including any directly attributable transaction costs net of income taxes, is recognised directly as a reduction in equity.  
These risks, and the strategies used to mitigate them, are  
outlined below.  
101  
Source of Risk  
Risk Mitigation  
a. Foreign exchange risk  
b. Interest rate risk  
c. Credit risk  
The Group is exposed to foreign exchange risk because of its international operations.  
These risks relate to future commercial transactions, assets and liabilities denominated  
in other currencies and net investments in foreign operations.  
Where possible CSL takes advantage of natural hedging (i.e., the existence of payables  
and receivables in the same currency). Where this is not possible, CSL’s policy is to hedge  
contractual commitments denominated in a foreign currency by entering into forward  
exchange contracts to buy and sell specified amounts of foreign currencies in the future at  
predetermined exchange rates.  
The Group is exposed to interest rate risk through its primary fi nancial assets and  
liabilities.  
The Group mitigates interest rate risk on borrowings primarily by entering into fi xed rate  
arrangements, which are not subject to interest rate movements in the ordinary course.  
If necessary, CSL also hedges interest rate risk using derivative instruments. As at 30 June  
2016, no derivative fi nancial instruments hedging interest rate risk were outstanding  
(2015: Nil).  
The Group is exposed to credit risk from fi nancial instruments contracts and trade and  
other receivables. The maximum exposure to credit risk at reporting date is the carrying  
amount, net of any provision for impairment, of each fi nancial asset in the balance  
sheet.  
The Group mitigates credit risk from fi nancial instruments contracts by only entering into  
transactions with counterparties who have sound credit ratings and with whom the Group  
has a signed netting agreement. Given their high credit ratings, management does not  
expect any counterparty to fail to meet its obligations.  
The Group minimises the credit risk associated with trade and other debtors by  
undertaking transactions with a large number of customers in various countries.  
Creditworthiness of customers is reviewed prior to granting credit, using trade references  
and credit reference agencies.  
d. Funding and liquidity risk  
The Group is exposed to funding and liquidity risk from operations and from external  
borrowing.  
The Group mitigates funding and liquidity risks by ensuring that:  
The Group has suffi cient funds on hand to achieve its working capital and investment  
objectives  
One type of this risk is credit spread risk, which is the risk that in refi nancing its debt,  
CSL may be exposed to an increased credit spread.  
The Group focusses on improving operational cash fl ow and maintaining a strong  
balance sheet  
Another type of this risk is liquidity risk, which is the risk of not being able to refi nance  
debt obligations or meet other cash outflow obligations when required.  
Short-term liquidity, long-term liquidity and crisis liquidity requirements are effectively  
managed, minimising the cost of funding and maximising the return on any surplus  
funds through effi cient cash management  
Liquidity and re-financing risks are not significant for the Group, as CSL has a prudent  
gearing level and strong cash fl ows.  
It has adequate fl exibility in fi nancing to balance short-term liquidity requirements and  
long-term core funding and minimise refi nancing risk  
e. Capital Risk Management  
The Group’s objectives when managing capital are to safeguard its ability to continue  
as a going concern while providing returns to shareholders and benefits to other  
stakeholders. Capital is defined as the amount subscribed by shareholders to the  
Company’s ordinary shares and amounts advanced by debt providers to any Group  
entity.  
The Group aims to maintain a capital structure, which refl ects the use of a prudent level of  
debt funding. The aim is to reduce the Group’s cost of capital without adversely affecting  
the credit margins applied to the Group’s debt funding.  
Each year the Directors determine the dividend taking into account factors such as  
profitability and liquidity.  
The Directors propose a share buyback consistent with the aim of maintaining an effi cient  
balance sheet, and with the ability to cease a buyback at any point should circumstances  
such as liquidity conditions change. Refer to Note 10 for details of share buybacks.  
102  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Risk management approach  
Sensitivity analysis – USD values  
b. Interest rate risk  
The Group uses sensitivity analysis (together with other methods)  
to measure the extent of fi nancial risks and decide if they need to  
be mitigated.  
Profit after tax – sensitivity to general movement of 1%  
At 30 June 2016, it is estimated that a general movement of one  
percentage point in the interest rates applicable to investments of cash  
and cash equivalents would have changed the Group’s profit after tax  
by approximately $3.9m. This calculation is based on applying a 1%  
movement to the total of the Group’s cash and cash equivalents at  
year end.  
A movement of 1% in the USD exchange rate against AUD, EUR,  
CHF and GBP would not generate a material impact to profit after  
tax.  
If so, the Group’s policy is to use derivative fi nancial instruments,  
such as foreign exchange contracts and interest rate swaps, to  
support its objective of achieving fi nancial targets while seeking to  
protect future fi nancial security.  
Equity – sensitivity to general movement of 1%  
Any change in equity is recorded in the Foreign Currency  
Translation Reserve.  
At 30 June 2016, it is estimated that a general movement of one  
percentage point in the interest rates applicable to fl oating rate  
unsecured bank loans would have changed the Group’s profit after tax  
by approximately $6.8m. This calculation is based on applying a 1%  
movement to the total of the Group’s fl oating rate unsecured bank  
loans at year end.  
The aim is to reduce the impact of short-term fl uctuations  
in currency or interest rates on the Group’s earnings.  
FX Sensitivity Analysis on Equity  
Derivatives are exclusively used for this purpose and not as trading  
or other speculative instruments.  
US$m  
As at 30 June 2016, the Group had the following bank facilities,  
unsecured notes and fi nance leases:  
a. Foreign exchange risk  
12  
The objective is to match the contracts with committed future  
cash fl ows from sales and purchases in foreign currencies to  
protect the Group against exchange rate movements. Contracts to  
buy and sell foreign currencies are also entered into from time to  
time to offset purchase and sale obligations.  
1
0
8
6
4
2
0
• Three revolving committed bank facilities totalling $1,317.4m.  
Of these facilities $58.5m mature in November 2016 and the  
balance matures in December 2020. Interest on the facilities is  
paid quarterly in arrears at a variable rate. As at the reporting date  
the Group had $342.4m in undrawn funds available under these  
facilities;  
The Group reduces its foreign exchange risk on net investments  
in foreign operations by denominating external borrowings in  
currencies that match the currencies of its foreign investments.  
US$1,350m of Senior Unsecured Notes in the US Private Placement  
market. The notes mature in March 2018 (US$100m), November  
Due to the international nature of the Group’s operations, it incurs  
foreign exchange risk in most group entities. In order to manage  
the stand alone fi nancial results of group entities, these entities  
enter into forward exchange contracts with fi nancial institutions.  
Many of the exposures managed in this way arise from inter-  
company transactions which eliminate on consolidation.  
2
(
018 (US$200m), March 2020 (US$150m), November 2021  
US$250m), March 2023 (US$150m), November 2023 (US$200m),  
March 2025 (US$100m), October 2025 ($100m) and November  
026 (US$100m). The weighted average interest rate on the notes  
2
AUD  
EUR  
CHF  
GBP  
is fi xed at 3.43%;  
EUR350m of Senior Unsecured Notes in the US Private Placement  
market. The Notes mature in November 2022 (EUR100m),  
November 2024 (EUR150m) and November 2026 (EUR100m). The  
weighted average interest rate on the notes is fi xed at 1.90%;  
The total value of forward exchange contracts in place at reporting  
date is $1.3bn (2015: $0.9bn). These contracts are entered into  
with a rolling monthly maturity thereby mitigating significant fair  
value risk. The contracts are placed with fi nancial institutions and  
expose the Group to counterparty credit risk. This risk is managed  
by only dealing with fi nancial institutions with counterparties with  
sound credit ratings and by imposing caps on the exposure to any  
single counterparty.  
This calculation is based on changing the actual exchange rate  
of US Dollars to AUD, EUR, CHF and GBP as at 30 June 2016 by  
1% and applying these adjusted rates to the net assets (excluding  
investments in subsidiaries) of the foreign currency denominated  
fi nancial statements of various Group entities.  
CHF400m of Senior Unsecured Notes in the US Private Placement  
market. The notes mature in October 2023 (CHF150m) and  
October 2025 (CHF250m). The weighted average interest rate on  
the notes is fi xed at 0.88%; and  
Finance leases with an average lease term of 8 years (2015: 9  
years). The weighted average discount rate implicit in the leases  
is 4.85% (2015: 4.93%). The Group’s lease liabilities are secured  
by leased assets of $15.4 million (2015: $15.5m). In the event of  
default, leased assets revert to the lessor.  
103  
The Group is in compliance with all debt covenants. The maturity  
profile of the Group’s debt is shown in the following chart.  
c. Credit Risk  
The Group only invests its cash and cash equivalent fi nancial assets with fi nancial institutions having a credit rating of at least ‘A’ or  
better, as assessed by independent rating agencies.  
Average Closing  
interest Rate  
%
Maturity Profile of Debt by Facility  
US$m  
Floating rate4  
US$m  
Non-interest bearing  
US$m  
Total  
US$m  
2016  
2015  
2016  
2015  
2016  
2015  
2016  
2015  
1
000  
Financial Assets  
Cash and cash equivalents  
Trade and other receivables  
Other fi nancial assets  
556.6  
556.8  
-
1,122.8  
3.5  
-
1,015.0  
3.2  
556.6  
1,122.8  
3.5  
556.8  
1,015.0  
3.2  
0.8%  
1.6%  
9
8
7
6
5
4
3
2
1
00  
00  
00  
00  
00  
00  
00  
00  
00  
0
-
-
-
-
-
-
-
-
556.6  
556.8  
1,126.3  
1,018.2  
1,682.9  
1,575.0  
4
Floating interest rates represent the most recently determined rate applicable to the instrument at balance sheet date. All interest rates on fl oating rate fi nancial assets and liabilities  
are subject to reset within the next six months.  
Credit Quality of Financial Assets (30 June 2016)  
Credit Quality of Financial Assets (30 June 2015)  
2
82.5m  
$252.2m  
$
587.5m  
$561.3m  
Private Placement  
Bank Debt  
Leases  
$
160.9m  
$114m  
$
475.9m  
$463.6m  
$
183.9m  
$
176.1m  
Hospitals  
Financial Institutions*  
Buying Groups  
Governments  
Other  
Financial Institutions*  
Buying Groups  
Governments  
Other  
Hospitals  
*
US$556.6m of the assets held with fi nancial institutions are held as cash or cash  
equivalents. All fi nancial assets held with non-financial institutions of US$1,122.8m are  
trade and other receivables.  
* US$556.8m of the assets held with fi nancial institutions were held as cash or cash  
equivalents. All fi nancial assets held with non-financial institutions of US$1,015.0m  
were trade and other receivables.  
104  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Financial assets are considered impaired where there is evidence  
that the Group will not be able to collect all amounts due  
according to the original trade and other receivable terms. Factors  
considered when determining if a fi nancial asset is impaired  
Trade Receivables  
Provision  
Gross  
016  
US$m  
Net  
2016  
US$m  
2
2015  
US$m  
2016  
US$m  
2015  
US$m  
2015  
US$m  
include ageing and timing of expected receipts and the credit  
Trade receivables:  
worthiness of counterparties. Where required, a provision for  
current  
809.9  
46.8  
772.5  
46.7  
1.6  
2.2  
4.8  
1.2  
808.3  
44.6  
767.7  
45.5  
impairment is created for the difference between the fi nancial  
less than 30 days overdue  
asset’s carrying amount and the present value of estimated future  
between 30 and 90 days overdue  
31.8  
41.2  
0.9  
1.2  
30.9  
40.0  
receipts. The Group’s trading terms do not generally include the  
requirement for customers to provide collateral as security for  
more than 90 days overdue  
70.3  
55.5  
26.4  
31.1  
17.7  
24.9  
43.9  
37.8  
fi nancial assets.  
958.8  
915.9  
927.7  
891.0  
The Group has not renegotiated any material collection/repayment  
terms of any fi nancial assets in the current fi nancial year.  
d. Funding and liquidity risk  
Government or government-backed entities (such as hospitals)  
often account for a significant proportion of trade receivables. As  
a result, the Group carries receivables from a number of Southern  
European governments. The credit risk associated with trading in  
these countries is considered on a country-by-country basis and  
the Group’s trading strategy is adjusted accordingly. The factors  
taken into account in determining the credit risk of a particular  
country include recent trading experience, current economic and  
political conditions and the likelihood of continuing support from  
agencies such as the European Central Bank. An analysis of trade  
receivables that are past due and, where required, the associated  
provision for impairment, is as follows. All other fi nancial assets  
are less than 30 days overdue.  
The following table analyses the Group’s fi nancial liabilities.  
Interest-bearing liabilities and borrowings are recognised initially at  
fair value, net of transaction costs incurred. Subsequent to initial  
recognition, interest-bearing liabilities and borrowings are stated  
at amortised cost, with any difference between the proceeds  
Interest-bearing  
liabilities and borrowings  
2016  
US$m  
2015  
US$m  
Current  
(net of transaction costs) and the redemption value recognised in  
Bank overdrafts – Unsecured  
Bank Borrowings – Unsecured  
Lease liability – Secured  
1.3  
58.5  
2.5  
1.3  
-
the statement of comprehensive income over the period of the  
borrowings.  
1.9  
3.2  
Fees paid on the establishment of loan facilities that are yield  
related are included as part of the carrying amount of the loans  
and borrowings. Borrowings are classified as current liabilities  
unless the Group has an unconditional right to defer settlement  
of the liability for at least 12 months after the reporting date.  
62.3  
Non-current  
Bank loans – Unsecured  
Senior Unsecured Notes  
Lease liability – Secured  
916.5  
2,142.2  
22.3  
617.0  
1,637.9  
22.8  
3,081.0  
2,277.7  
105  
The following table categorises the fi nancial liabilities into relevant maturity periods, taking into account the remaining period at the reporting date and the contractual maturity date. The amounts disclosed in  
the table are the contractual undiscounted cash fl ows and hence will not necessarily reconcile with the amounts disclosed in the balance sheet.  
Contractual payments due  
1
year or less  
US$m  
Between 1 year and 5 years  
US$m  
Over 5 years  
US$m  
Total  
US$m  
Average interest Rate  
%
2
016  
2015  
700.8  
6.5  
2016  
18.8  
951.1  
-
2015  
17.2  
620.2  
-
2016  
2015  
2016  
2015  
718.0  
626.7  
1.3  
2016  
-
2015  
Trade and other payables (non-interest bearing)  
Bank loans – unsecured (floating rates)  
Bank overdraft – unsecured (floating rates)  
Senior unsecured notes (fixed rates)  
996.1  
68.6  
1.3  
-
-
-
-
-
-
1,014.9  
1,019.7  
1.3  
-
1.1%  
0.0%  
2.7%  
4.8%  
-
1.1%  
0.0%  
3.1%  
4.9%  
-
1.3  
57.2  
3.9  
50.1  
3.3  
652.2  
14.0  
-
636.2  
14.1  
-
1,824.4  
19.4  
1,329.4  
20.4  
2,533.8  
37.3  
2,015.7  
37.8  
Lease liabilities (fixed rates)  
Other fi nancial liabilities (non-interest bearing)  
6.0  
1.8  
-
-
6.0  
1.8  
1,133.1  
763.8  
1,636.1  
1,287.7  
1,843.8  
1,349.8  
4,613.0  
3,401.3  
Floating interest rates represent the most recently determined rate  
applicable to the instrument at balance sheet date. All interest  
rates on fl oating rate fi nancial assets and liabilities are subject  
to reset within the next six months.  
Derivatives  
Valuation of fi nancial instruments  
Derivative fi nancial instruments are initially recognised at  
fair value on the date the contract is entered into and are  
For fi nancial instruments measured and carried at fair value, the  
Group uses the following to categorise the method used:  
subsequently remeasured at fair value at reporting date. The  
gain or loss on re-measurement is recognised in the statement  
of comprehensive income. The fair value of forward foreign  
exchange contracts is calculated by reference to current forward  
exchange rates for contracts with similar maturity profiles.  
Level 1: Items traded with quoted prices in active markets  
for identical liabilities  
Fair value of fi nancial assets and fi nancial liabilities  
Level 2: Items with significantly observable inputs other  
than quoted prices in active markets  
The carrying value of fi nancial assets and liabilities is materially the  
same as the fair value. The following methods and assumptions  
were used to determine the net fair values of fi nancial assets  
and liabilities.  
Level 3: Items with unobservable inputs (not based on  
observable market data)  
Interest bearing liabilities  
Fair value is calculated based on the discounted expected  
principal and interest cash fl ows, using rates currently available  
for debt of similar terms, credit risk and remaining maturities.  
All derivatives are classified as level 2 fi nancial liabilities.  
Cash  
There were no transfers between Level 1 and 2 during the year.  
The carrying value of cash equals fair value, due to the liquid  
nature of cash.  
The Group also has external loans payable that have been  
designated as a hedge of its investment in foreign subsidiaries  
Trade and other receivables/payables  
(
known as a net investment hedge).  
The carrying value of trade and other receivables/payables with  
a remaining life of less than one year is deemed to be equal to  
its fair value.  
An effective hedge is one that meets certain criteria. Gains or  
losses on the net investment hedge that relate to the effective  
portion of the hedge are recognised in equity. Gains or losses  
relating to the ineffective portion, if any, are recognised in the  
consolidated statement of comprehensive income.  
106  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Note 12: Equity and Reserves  
b. Reserves  
Share-based payments  
Foreign currency translation  
(ii)  
reserve  
US$m  
a. Contributed Equity  
(i)  
reserve  
US$m  
Total  
US$m  
2
016  
2015  
US$m  
US$m  
Movement in reserves  
2016  
2015  
138.8  
6.0  
2016  
2015  
2016  
2015  
738.3  
6.0  
Ordinary shares issued and fully paid  
Share buy-back reserve  
-
-
(3,560.4)  
(3,560.4)  
Opening balance  
151.1  
5.7  
2.6  
-
155.4  
599.5  
306.5  
5.7  
(4,213.0)  
(4,213.0)  
Share-based payments expense  
Deferred tax on share-based payments  
-
-
-
-
Total contributed equity  
6.3  
2.6  
6.3  
Net exchange gains / (losses) on translation of  
foreign subsidiaries, net of hedge  
-
(126.9)  
(444.1)  
(126.9)  
(444.1)  
Ordinary shares receive dividends as declared and, in the event of  
winding up the company, participate in the proceeds from the sale  
of all surplus assets in proportion to the number of and amounts  
paid up on shares held. Ordinary shares entitle their holder to one  
vote, either in person or proxy, at a meeting of the company.  
Closing balance  
159.4  
151.1  
28.5  
155.4  
187.9  
306.5  
Nature and purpose of reserves  
i.  
Share-based payments reserve  
Due to share buy-backs being undertaken at higher prices than  
the original subscription prices, the balance for ordinary share  
contributed equity has been reduced to nil, and a reserve created  
to refl ect the excess value of shares bought over the original  
amount of subscribed capital. Refer to Note 10 for further  
information about on-market share buy-backs.  
The share-based payments reserve is used to recognise the  
fair value of options, performance rights and GESP rights  
issued to employees.  
ii. Foreign currency translation reserve  
Where the functional currency of a subsidiary is not US  
Information relating to employee performance option plans and  
GESP, including details of shares issued under the scheme, is set  
out in Note 5.  
dollars, its assets and liabilities are translated on consolidation  
to US dollars using the exchange rates prevailing at the  
reporting date, and its profit and loss is translated at  
average exchange rates. All resulting exchange differences  
are recognized in other comprehensive income and in the  
foreign currency translation reserve in equity. Exchange  
differences arising from borrowings designated as hedges of  
net investments in foreign entities are also included in  
this reserve.  
107  
Note 13: Commitments and Contingencies4  
The present value of fi nance lease liabilities is as follows:  
2
016  
2015  
US$m  
a.  
Commitments  
US$m  
Not later than one year  
2.5  
1.9  
6.7  
Operating leases entered into relate predominantly to leased land and rental properties. The leases have varying terms and renewal  
rights. Rental payments under the leases are predominantly fi xed, but generally contain inflation escalation clauses.  
Later than one year but not later  
than fi ve years  
7.4  
Finance leases entered into relate predominantly to leased plant and equipment. The leases have varying terms but lease payments are  
generally fi xed for the life of the agreement. In some instances, at the end of the lease term the Group has the option to purchase the  
equipment.  
Later than fi ve years  
Total  
14.9  
24.8  
16.1  
24.7  
No operating or fi nance lease contains restrictions on fi nancing or other leasing activities.  
Commitments in relation to non-cancellable operating leases, fi nance leases and capital expenditure contracted but not provided for in  
the fi nancial statements are payable as follows:  
b. Contingent assets and liabilities  
Litigation  
Operating Leases  
US$m  
Finance Leases  
US$m  
Capital Commitments  
US$m  
Total  
US$m  
The Group is involved in litigation in the ordinary course  
of business.  
2
016  
2015  
2016  
2015  
2.8  
9.7  
2016  
222.8  
7.9  
2015  
2016  
2015  
178.8  
152.5  
Not later than one year  
46.4  
40.4  
3.3  
135.6  
10.9  
272.5  
182.1  
Later than one year but  
not later than fi ve years  
163.9  
131.9  
10.3  
Later than fi ve years  
Sub-total  
363.9  
574.2  
-
316.9  
489.2  
-
17.7  
31.3  
(6.5)  
24.8  
19.6  
32.1  
(7.4)  
24.7  
-
230.7  
-
-
146.5  
-
381.6  
836.2  
(6.5)  
336.5  
667.8  
(7.4)  
Future fi nance charges  
Total  
574.2  
489.2  
230.7  
146.5  
829.7  
660.4  
4
Commitments and contingencies are disclosed net of the amount of GST (or equivalent) recoverable from, or payable to, a taxation authority  
108  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Cash, cash equivalents and bank overdrafts  
Effi ciency of Operation  
Cash and cash equivalents are held for the purpose of meeting  
short term cash commitments rather than for investment or other  
purposes. They are made up of:  
Note 14: Cash and Cash Equivalents, Cash Flows  
2
016  
2015  
US$m  
Cash on hand.  
US$m  
At call deposits with banks or fi nancial institutions.  
Reconciliation of cash and cash equivalents  
Investments in money market instruments with original  
maturities of six months or less that are readily convertible to  
known amounts of cash and subject to insignificant risk of  
changes in value.  
Cash at bank and on hand  
Cash deposits  
442.0  
114.6  
(1.3)  
186.8  
370.0  
(1.3)  
Less bank overdrafts  
Total cash and cash equivalents  
555.3  
555.5  
For the purposes of the cash fl ow statement, cash at the end of  
the fi nancial year is net of bank overdraft amounts.  
Reconciliation of Profit after tax to Cash Flows from Operations  
Profit after tax  
Cash fl ows are presented on a gross basis. The GST component of  
cash fl ows arising from investing and fi nancing activities that are  
recoverable from or payable to a taxation authority are presented  
as part of operating cash fl ows.  
1,242.4  
1,379.0  
Non-cash items in profit after tax:  
Depreciation, amortisation and impairment charges  
220.3  
2.3  
181.3  
0.7  
(Gain)/loss on disposal of property, plant and equipment  
Gain on acquisition  
(176.1)  
6.1  
Share-based payments expense  
Changes in assets and liabilities:  
Increase in trade and other receivables  
6.0  
(45.3)  
(216.5)  
2.3  
(127.3)  
(272.2)  
(0.3)  
54.0  
53.7  
-
(
(
(
Increase) in inventories  
Increase)/decrease in retirement benefit assets  
Increase)/decrease in net tax assets  
(12.7)  
116.0  
4.5  
Increase in trade and other payables  
Increase in deferred government grants  
Increase in provisions  
19.7  
-
Increase in retirement benefit liabilities  
Net cash inflow from operating activities  
15.6  
88.7  
1,363.6  
1,178.6  
Non-cash fi nancing activities  
Acquisition of plant and equipment by means of fi nance leases  
3.2  
2.9  
109  
Note 15: Trade Receivables and Payables  
a. Trade and other receivables  
Key judgements and estimates  
2
US$  
016  
2015  
US$  
In applying the Group’s accounting policy to trade  
and other receivables with governments and related  
entities in South Eastern Europe as set out in Note  
Current  
Trade receivables  
958.8  
(31.1)  
915.9  
(24.9)  
891.0  
67.5  
1
1, significant judgement is involved in fi rst assessing  
Less: Provision for impairment loss  
whether or not trade or other receivable amounts  
are impaired and thereafter in assessing the extent  
of impairment. Matters considered include recent  
trading experience, current economic and political  
conditions and the likelihood of continuing support  
from agencies such as the European Central Bank.  
927.7  
Sundry receivables  
115.0  
64.5  
Prepayments  
Carrying amount of current trade and other receivables  
45.2  
1
,107.2  
1,003.7  
Non-Current  
Related parties - Loans to employees  
Long term deposits/other receivables  
Carrying amount of non-current other receivables5  
-
0.1  
11.1  
11.2  
15.6  
15.6  
5
The carrying amount disclosed above is a reasonable approximation of fair value. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of  
receivable disclosed above. Refer to Note 11 for more information on the risk management policy of the Group and the credit quality of trade receivables.  
Trade and other receivables are initially recorded at fair value and  
are generally due for settlement within 30 to 60 days from date  
of invoice. Collectability is regularly reviewed at an operating unit  
level. Debts which are known to be uncollectible are written off  
when identified. A provision for impairment loss is recognised  
when there is objective evidence that all amounts due may  
not be fully recovered. The provision amount is the difference  
between the receivable’s carrying amount and the present value  
of estimated future cash fl ows that may ultimately be recovered.  
Cash fl ows relating to short-term receivables are not discounted  
if the effect of discounting is immaterial. When a trade receivable  
for which a provision for impairment has been recognised  
becomes uncollectible in a subsequent period, it is written off  
against the provision.  
Other current receivables are recognised and carried at the  
nominal amount due. Non-current receivables are recognised and  
carried at amortised cost. They are non-interest bearing and have  
various repayment terms.  
As at 30 June 2016, the Group had made provision for  
impairment of $31.1m (2015: $24.9m).  
2016  
US$m  
2015  
US$m  
Opening balance at 1 July  
24.9  
6.4  
47.1  
Additional allowance/  
(utilised/written back)  
(15.1)  
Currency translation differences  
(0.2)  
31.1  
(7.1)  
24.9  
Closing balance at 30 June  
Non-trade receivables do not include any impaired or overdue  
amounts and it is expected they will be received when due. The  
Group does not hold any collateral in respect to other receivable  
balances.  
110  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
b. Trade and other payables  
Other Notes  
2016  
2015  
US$m  
US$m  
Note 17: Related Party Transactions  
Current  
Trade payables  
303.5  
669.1  
23.5  
257.8  
420.6  
22.4  
Ultimate controlling entity  
Accruals and other payables  
Share-based payments (EDIP)  
Carrying amount of current trade and other payables  
The ultimate controlling entity is CSL Limited, otherwise  
described as the parent company.  
996.1  
700.8  
Related party transactions  
Non-current  
The parent company entered into the following transactions  
during the year with related parties in the Group.  
Accruals and other payables  
Share-based payments (EDIP)  
Carrying amount of non-current other payables  
0.1  
18.7  
18.8  
-
17.2  
17.2  
Wholly owned subsidiaries  
Loans were advanced and repayments received on the  
long term intercompany accounts.  
Trade and other payables represent amounts refl ected at notional  
amounts owed to suppliers for goods and services provided to the  
Group prior to the end of the fi nancial year that are unpaid. Trade  
and other payables are non-interest bearing and have various  
repayment terms but are usually paid within 30 to 60 days of  
recognition.  
Receivables and payables include the amount of GST receivable or  
payable. The net amount of GST recoverable from, or payable to,  
taxation authorities is included in other receivables or payables in  
the balance sheet.  
Interest was charged on outstanding intercompany loan  
account balances.  
Sales and purchases of products.  
Licensing of intellectual property.  
Provision of marketing services by controlled entities.  
Management fees were received from a controlled entity.  
Management fees were paid to a controlled entity.  
Note 16: Provisions  
Employee benefits  
US$m  
Other  
US$m  
Total  
US$m  
The transactions were undertaken on commercial terms and  
conditions.  
2
016  
2015  
82.5  
31.5  
2016  
2015  
1.8  
2016  
2015  
84.3  
31.9  
Current  
99.0  
32.1  
0.6  
8.4  
99.6  
40.5  
Payment for intercompany transactions is through  
intercompany loan accounts and may be subject to extended  
payment terms.  
Non-current  
0.4  
Ownership interests in related parties  
Other provisions are recognised when all three of the following  
conditions are met:  
Provisions recognised refl ect management’s best estimate of  
the expenditure required to settle the present obligation at the  
reporting date. Where the effect of the time value of money is  
material, provisions are determined by discounting the expected  
future cash fl ows required to settle the obligation at a pre-tax  
discount rate that refl ects current market assessments of the  
time value of money and the risks specific to the liability. When  
discounting is used, the increase in the provision due to the  
passage of time is recognised as a borrowing cost.  
All transactions with subsidiaries have been eliminated on  
consolidation.  
The Group has a present legal or constructive obligation  
arising from past transactions or events.  
Subsidiaries  
It is probable that an outflow of resources will be required to  
settle the obligation.  
The following table lists the Group’s material subsidiaries.  
A reliable estimate can be made of the amount of the  
obligation.  
Detailed information about the employee benefits is presented  
in Note 5.  
Provisions are not recognised for future operating losses.  
111  
Subsidiaries  
Note 18: Detailed Information – People Costs  
The following table lists the Group’s material subsidiaries.  
The Group sponsors a range of defined benefit pension plans that provide either a lump sum or ongoing pension benefit for its  
worldwide employees upon retirement. Entities of the Group who operate defined benefit plans contribute to the respective plans in  
accordance with the Trust Deeds, following the receipt of actuarial advice.  
Percentage owned  
Country of  
2016  
2015  
Company  
Incorporation  
%
%
The surplus/deficit for each defined benefit plan operated by the Group is as follows:  
CSL Limited  
Australia  
Subsidiaries  
of CSL Limited:  
June 2016  
$m  
June 2015  
$m  
CSL Behring (Australia)  
Pty Ltd  
Australia  
100  
100  
Accrued  
benefit  
Plan surplus/  
(deficit)  
Accrued  
benefit  
Plan surplus/  
(deficit)  
Pension Plan  
Plan Assets  
Plan Assets  
CSL Behring LLC  
CSL Plasma Inc  
USA  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
CSL Pension Plan (Australia)  
27.5  
(22.5)  
(562.1)  
(70.5)  
(156.3)  
(2.6)  
5.0  
(122.3)  
(15.7)  
(156.3)  
(2.6)  
29.7  
(22.1)  
(489.5)  
(74.4)  
(127.4)  
(1.9)  
7.6  
(55.3)  
(13.2)  
(127.4)  
(1.9)  
USA  
-
provides a lump sum benefit upon exit  
CSL Behring GmbH  
CSL Behring AG  
Germany  
Switzerland  
CSL Behring AG Pension Plan (Switzerland)  
439.8  
434.2  
-
provides an ongoing pension  
CSL Behring Recombinant Switzerland  
Facility AG  
CSL Behring Union Pension Plan (USA)  
54.8  
61.2  
provides an ongoing pension  
Seqirus UK Limited  
Seqirus Pty Ltd  
UK  
100  
100  
100  
100  
100  
CSL Behring GmbH Supplementary Pension Plan  
-
-
Australia  
UK  
100  
(Germany) – provides an ongoing pension  
Seqirus Vaccines Limited  
Seqirus Inc  
-
-
Seqirus GmbH Pension Plan (Germany)  
-
-
USA  
provides an ongoing pension  
CSL Behring KG Pension Plan (Germany)  
– provides an ongoing pension  
-
(11.8)  
(0.3)  
(11.8)  
(0.3)  
-
(9.2)  
(9.2)  
Key management personnel transactions with the Group  
The following transactions with key management personnel  
and their related entities have occurred during the fi nancial year.  
These transactions occur as part of a normal supplier or partner  
relationship on “arm’s length” terms:  
CSL Plasma GmbH Pension Plan (Germany)  
-
-
(0.2)  
(0.2)  
provides an ongoing pension  
CSL Behring KK Retirement Allowance Plan (Japan)  
– provides a lump sum benefit upon exit  
-
(15.4)  
(0.9)  
(15.4)  
(0.9)  
-
(11.9)  
(0.8)  
(11.9)  
(0.8)  
Corporate accounts with CityLink, operated by Transurban Group  
of which Ms Christine O’Reilly is a director.  
CSL Behring S.A. Pension Plan (France)  
- provides a lump sum benefit upon exit  
-
-
-
-
A number of contracts with Monash University, including  
collaborative research agreements, of which Dr Megan Clark is a  
member of the Council of Monash University.  
CSL Behring S.p.A Pension Plan (Italy)  
(1.3)  
(1.3)  
(1.2)  
(1.2)  
-
provides a lump sum benefit upon exit  
Total  
522.1  
(843.7)  
(321.6)  
525.1  
(738.6)  
(213.5)  
Supply of commercial energy from Origin Energy Limited of which  
Mr John Akehurst is a Director.  
In addition to the plans listed above, CSL Behring GmbH and Seqirus GmbH employees are members of multi-employer plans  
administered by an unrelated third party. CSL Behring GmbH, Seqirus GmbH and their employees make contributions to the plans and  
receive pension entitlements on retirement. Participating employers may have to make additional contributions in the event that the plans  
have insuffi cient assets to meet their obligations. However, there is insuffi cient information available to determine this amount on an  
employer by employer basis. The contributions made by CSL Behring GmbH and Seqirus GmbH are determined by the Plan Actuary and  
are designed to be suffi cient to meet the obligations of the plans based on actuarial assumptions. Contributions made by CSL Behring  
GmbH and Seqirus GmbH are expensed in the year in which they are made.  
Labour hire contracts with Skilled, a business operated by  
Programmed Maintenance Services Limited of which Mr Bruce  
Brook is a Director.  
112  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Movements in Accrued benefits and assets  
2016  
%
2015  
%
During the fi nancial year the value of accrued benefits increased  
by $105.1m. The increase is attributable to three main factors:  
The principal actuarial assumptions, expressed as weighted averages, at the reporting date are:  
Discount rate  
0.8%  
2.2%  
0.4%  
1.7%  
2.2%  
0.4%  
Service cost charged to the profit and loss of $49.9m. This  
amount represents the increased benefit entitlement of  
members, arising from an additional year of service and salary  
increases, which are taken into account in the calculation of  
the accrued benefit. The amount includes past service costs  
of $8.0m resulting from a change in benefit design in one  
Group plan.  
Future salary increases  
Future pension increases  
Plan Assets  
2016  
2015  
$m  
$m  
The major categories of total plan assets are as follows:  
Actuarial adjustments, due to lower discount rates at the  
end of the year than originally anticipated by the actuary,  
generated an increase in accrued benefits of $71.9m. These  
adjustments do not affect the profit and loss as they are  
recorded in Other Comprehensive Income.  
Cash  
44.0  
35.1  
Instruments quoted in active markets:  
Equity Instruments  
Bonds  
184.8  
221.3  
71.1  
200.0  
213.9  
71.4  
Unquoted investments – property  
Other assets  
Foreign currency movements had a $6.3m favourable impact  
on the value of accrued benefits, this movement is taken to  
the Foreign Currency Translation Reserve.  
0.9  
4.7  
Total Plan assets  
522.1  
525.1  
Offsetting these increases were benefits of $18.3m that were  
paid by plans during the year.  
In the prior year the value of accrued benefits increased by  
71.5m. Contributing factors were Service costs ($40.6m),  
actuarial adjustments ($90.5m), offset by favourable currency  
movements ($50.4m) and benefit payments ($16.8m).  
The variable with the most significant impact on the defined  
benefit obligation is the discount rate applied in the calculation of  
accrued benefits. A decrease in the average discount rate applied  
to the calculation of accrued benefits of 0.25% would increase  
the defined benefit obligation by $34.5m. An increase in the  
average discount rate of 0.25% would reduce the defined benefit  
obligation by $33.3m.  
The defined benefit obligation will be discharged over an  
$
extended period as members exit the plans. The plan actuaries  
have estimated that the following payments will be required to  
satisfy the obligation. The actual payments will depend on the  
pattern of employee exits from the Group’s plans.  
Plan assets reduced by $3.0m during the fi nancial year. The  
decrease is attributable to the following factors:  
Year ended 30 June 2017  
$18.3m (2015: $18.7m)  
Investment returns increased plan assets by $4.1m.  
Between two and fi ve years $83.6m (2015: $83.6m)  
Between fi ve and ten years $129.8m (2015: $128.7m)  
Contributions made by employer and employee increased  
plan assets by $26.3m.  
Beyond ten years  
$611.8m (2015: $507.6m)  
Offsetting these increases were benefits paid by the plans of  
$14.2m.  
The balance of the movement is largely caused by  
unfavourable foreign currency movements of $18.8m which  
are taken directly to the Foreign Currency Translation Reserve.  
In the prior year plan the value of plan assets increased by  
13.0m. Contributing factors were employer and employee  
contributions ($24.6m), investment returns earned on plan assets  
$24.5m), offset by benefits paid by the plans ($13.2m) and  
unfavourable currency movements ($22.7m).  
$
(
113  
b. Share-based payments – equity settled  
Global Employee Share Plan (GESP)  
The Global Employee Share Plan (GESP) allows employees to  
make contributions from after tax salary up to a maximum of  
A$3,000 per six month contribution period. The employees  
receive the shares at a 15% discount to the applicable market  
rate, as quoted on the ASX on the fi rst day or the last day of the  
six-month contribution period, whichever is lower.  
Share-based long term incentives (LTI) issued between  
October 2012 and October 2013  
LTI grants in October 2011 were made up of performance rights  
and performance options. Changes were made to the plan in  
October 2012 so that LTI grants would subsequently be made up  
of solely performance rights. The hurdles for this and future grants  
were to be set and measured in US dollars in line with the Group’s  
presentation currency. Subject to performance hurdles being  
satisfied, 50% of the LTI award will vest after three years, with the  
remaining 50% vesting after the fourth anniversary of the award  
date.  
Recognition and measurement  
The fair value of options or rights is recognised as an employee  
benefit expense with a corresponding increase in equity. Fair  
value is independently measured at grant date and recognised  
over the period during which the employees become  
Other changes included an adjustment to graduated vesting for  
the compound EPS hurdle and moving to measuring relative TSR  
by comparison with an international index of Pharma and Biotech  
companies, rather than using an ASX comparator group.  
unconditionally entitled to the options or rights. Fair value is  
independently determined using a combination of the Binomial  
and Black Scholes valuation methodologies, including Monte  
Carlo simulation, taking into account the terms and conditions  
on which the options and rights were granted. The fair value  
of the options granted excludes the impact of any non-market  
vesting conditions, which are included in assumptions about the  
number of options that are expected to vest.  
Share-based long term incentives (LTI) issued in October  
2014 and October 2015  
LTI grants in October 2014 reintroduced performance options  
for Executive KMP based outside Australia and changes were  
made to the vesting period and to performance hurdles.  
Performance Rights and Performance Options grants made in  
At each reporting date, the number of options and rights that  
are expected to vest is revised. The employee benefit expense  
recognised each period takes into account the most recent  
estimate of the number of options and rights that are expected  
to vest. No expense is recognised for options and rights that do  
not ultimately vest, except where vesting is conditional upon a  
market condition and that market condition is not met.  
2014 and 2015 will vest over a three year, nine month year  
period with no re-test. The EPS growth test has been retained  
but now has a wider sliding scale with 100% vesting occurring  
at a 13% compound annual growth rate (previously 12%)  
and the potential for additional vesting on the achievement of  
stretch EPS growth targets has been introduced. The relative  
TSR test is against a cohort of global pharmaceutical and  
biotechnology companies and progressive vesting has been  
reintroduced with 50% vesting where CSL’s performance  
is at the 50th percentile rising to 100% vesting at the 75th  
percentile. Performance Options also vest over a three year, nine  
month period and have no performance hurdles. The options  
only have value when the share price on exercise exceeds the  
exercise price. The company does not provide loans to fund the  
exercise of options.  
114  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Valuation assumptions and fair values of equity instruments granted  
The model inputs for performance rights, options and GESP awards granted during the year ended 30 June 2016 included:  
Expected  
Life  
assumption  
Expected  
dividend yield  
Risk free  
interest rate  
Fair Value6  
A$  
Share Price  
A$  
Exercise Price  
A$  
volatility  
7
Performance Rights (by grant date)  
1
1
1
1
1
1
October 2015 – Tranche 1  
$60.92  
$83.12  
$79.58  
$99.69  
$75.97  
$97.73  
$89.52  
$89.52  
Nil  
Nil  
Nil  
Nil  
Nil  
Nil  
20.0%  
20.0%  
20.0%  
20.0%  
20.0%  
20.0%  
3.75 years  
3.75 years  
2.5 years  
2.5 years  
3.5 years  
3.5 years  
2.0%  
2.0%  
2.0%  
2.0%  
2.0%  
2.0%  
1.94%  
1.94%  
2.01%  
2.01%  
2.09%  
2.09%  
October 2015 – Tranche 2 & Tranche 3  
January 2016 – Tranche 1  
$104.74  
$104.74  
$104.74  
$104.74  
January 2016 – Tranche 2 & Tranche 3  
January 2016 – Tranche 1  
January 2016 – Tranche 2 & Tranche 3  
Performance Options (by grant date)  
October 2015  
1
$13.51  
$89.52  
$89.52  
20.0%  
3.75 years  
2.0%  
1.94%  
GESP (by grant date)8  
1
1
September 2015  
March 2016  
$14.62  
$24.83  
$91.87  
$77.25  
$77.89  
20.0%  
20.0%  
6 months  
6 months  
2.0%  
2.0%  
1.87%  
1.93%  
$102.72  
6
7
8
Options and rights granted are subject to a service condition. Since October 2010, grants of performance rights and options have both a market vesting condition TSR hurdle and a non market vesting condition EPS hurdle.  
The expected volatility is based on the historic volatility (calculated based on the remaining life assumption of each equity instrument), adjusted for any expected changes.  
The fair value of GESP equity instruments is estimated based on the assumptions prevailing on the grant date. In accordance with the terms and conditions of the GESP plan, shares are issued at a 15% discount to the lower  
of the ASX market price on the fi rst and last dates of the contribution period.  
115  
c. Share-based payments – cash settled  
2
016  
2015  
Fair value  
of grants at  
The notional shares under the Executive Deferred Incentive Plan  
generate a cash payment to participants in three years’ time, or  
in limited instances over a prorated period (see Note 5), provided  
they are still employed by the company and receive a satisfactory  
performance review over that period. The amount of the cash  
payment will be determined by reference to the CSL share price  
immediately before the award maturity date.  
Grant date  
Fair value  
of grants at  
reporting date  
Dividend  
yield (%)  
Dividend  
yield %  
reporting date  
October 2012  
October 2013  
October 2014  
October 2015  
January 2016  
March 2016  
April 2016  
-
A$108.21  
A$106.09  
A$104.01  
A$104.01  
A$104.01  
A$104.01  
-
2.0%  
2.0%  
2.0%  
2.0%  
2.0%  
2.0%  
A$86.15  
1.5%  
A$84.88  
1.5%  
A$83.62  
1.5%  
-
-
-
-
-
-
-
-
Recognition and measurement  
The fair value of the cash-settled notional shares is measured  
by reference to the CSL share price at reporting date, adjusted  
for the dividend yield and the number of days left in the vesting  
period. The ultimate cost of these transactions will be equal to  
the fair value at settlement date. The cumulative cost recognised  
until settlement is a liability and the periodic determination of this  
liability is carried out as follows:  
Note 19: Detailed Information – Shareholder Returns  
Consolidated Entity  
2
016  
2015  
US$m  
At each reporting date between grant and settlement, the  
fair value of the award is determined.  
Note  
US$m  
Retained earnings  
During the vesting period, the liability recognised at each  
reporting date is the fair value of the award at that date  
multiplied by the expired portion of the vesting period.  
Opening balance at 1 July  
Net profit for the year  
6,000.8  
5,221.5  
1,242.4  
(579.0)  
(87.6)  
1,379.0  
(535.4)  
(78.0)  
Dividends  
All changes in the liability are recognised in employee benefits  
expense for the period.  
Actuarial gain/(loss) on defined benefit plans  
Deferred tax on actuarial gain/(loss) on defined benefit plans  
Closing balance at 30 June  
15.7  
13.7  
The fair value of the liability is determined by reference to  
the CSL Limited share price at reporting date, adjusted for  
the dividend yield and the number of days left in the vesting  
period.  
6,592.3  
6,000.8  
Performance Options Plan  
Options exercised under Performance Option plans as follows  
nil issued at A$35.46 (2015: 59,313 issued at A$35.46)  
59,213 issued at A$37.91 (2015: 52,040 issued at A$37.91)  
The following table lists the inputs to the valuation models  
used during the year for EDIP purposes.  
-
1.9  
1.7  
1.6  
4.7  
0.5  
2.2  
190,050 issued at A$33.68 (2015: 712,752 issued at A$33.68)  
21,320 issued at A$33.45 (2015: 75,327 issued at A$33.45)  
102,781 issued at A$29.34 (2015: 95,775 issued at A$29.34)  
20.6  
2.2  
2.4  
9.0  
28.8  
Global Employee Share Plan (GESP)  
Shares issued to employees under Global Employee Share Plan (GESP)  
7
4,413 issued at A$77.25 on 4 September 2015 (2015: 64,668 issued at A$60.84 on 5 September 2014)  
6,429 issued at A$77.89 on 4 March 2016 (2015: 71,294 issued at A$63.09 on 6 March 2015)  
4.0  
4.4  
3.7  
3.5  
7.2  
7
8.4  
116  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
The entities that are parties to the deed represent a ‘Closed Group’  
for the purposes of the Class Order, and as there are no other parties  
to the deed of cross guarantee that are controlled by CSL Limited,  
they also represent the ‘Extended Closed Group’. A consolidated  
income statement and a summary of movements in consolidated  
retained profits for the year ended 30 June 2016 and 30 June 2015  
and a consolidated balance sheet as at each date for the Closed  
Group is set out below.  
Note 20: Auditors Remuneration  
Note 21: Deed of Cross Guarantee  
During the year the following fees were paid or were payable  
for services provided by CSL’s auditor and by the auditor’s related  
practices:  
On 22 October 2009, a deed of cross guarantee was executed  
between CSL Limited and some of its wholly owned entities, namely  
CSL International Pty Ltd, CSL Finance Pty Ltd, CSL Biotherapies Pty  
Ltd (now Seqirus (Australia) Pty Ltd) and Zenyth Therapeutics Pty Ltd.  
Since the establishment of the deed Seqirus Pty Ltd, CSL Behring  
2
016  
US$  
2015  
US$  
(Australia) Pty Ltd and CSL Behring (Privigen) Pty Ltd have been  
added to the deed. Under this deed, each company guarantees the  
debts of the others. By entering into the deed, these specific wholly  
owned entities have been relieved from the requirement to prepare  
a fi nancial report and directors’ report under Class Order 98/1418  
Audit Services  
Ernst & Young  
1,284,435  
2,954,061  
4,238,496  
1,079,423  
2,383,228  
3,462,651  
Ernst & Young related practices  
Total remuneration for audit services  
(as amended) issued by the Australian Securities and Investments  
Commission.  
Other services  
Ernst & Young  
Income Statement  
Consolidated Closed Group  
-
compliance and other services  
Ernst & Young related practices  
compliance and other services  
160,377  
215,252  
2
A$m  
016  
2015  
A$m  
-
447,028  
607,405  
153,836  
369,088  
Continuing operations  
Sales revenue  
Total remuneration  
for non-audit services  
912.1  
(602.5)  
309.6  
762.2  
(467.7)  
294.5  
Cost of sales  
Total remuneration for all services  
rendered  
4,845,901  
3,831,739  
Gross profit  
Sundry revenues  
178.8  
199.1  
Dividend income  
851.1  
1,290.3  
55.4  
Interest income  
71.6  
Research and development expenses  
Selling and marketing expenses  
General and administration expenses  
Finance costs  
(194.7)  
(67.7)  
(118.3)  
(14.4)  
1,016.0  
(30.2)  
985.8  
(189.3)  
(64.0)  
(113.2)  
(6.3)  
Profit before income tax expense  
Income tax expense  
1,466.5  
(49.0)  
Profit for the year  
1,417.5  
117  
Balance sheet  
2016  
A$m  
2015  
A$m  
Current assets  
Cash and cash equivalents  
Trade and other receivables  
Inventories  
Total Current Assets  
Non-current assets  
Trade and other receivables  
Other fi nancial assets  
Property, plant and equipment  
Deferred tax assets  
280.1  
322.7  
247.3  
850.1  
490.3  
189.4  
217.6  
897.3  
274.5  
18,776.1  
698.7  
18.4  
19,050.2  
641.5  
46.4  
56.6  
Intangible assets  
33.2  
51.3  
Retirement benefit assets  
Total Non-Current Assets  
Total assets  
6.7  
19,835.6  
20,685.7  
9.9  
19,827.9  
20,725.2  
Current liabilities  
Trade and other payables  
Provisions  
256.8  
53.1  
3.8  
180.8  
43.4  
2.8  
Deferred government grants  
Total Current Liabilities  
Non-current liabilities  
Trade and other payables  
Interest-bearing liabilities and borrowings  
Deferred tax liabilities  
Provisions  
313.7  
227.0  
12.8  
1,076.8  
13.3  
23.1  
510.7  
11.8  
11.1  
12.0  
Deferred government grants  
Total Non-Current Liabilities  
Total liabilities  
46.6  
41.6  
1,160.6  
1,474.3  
19,211.4  
599.2  
826.2  
19,899.0  
Net assets  
Equity  
Contributed equity  
Reserves  
(4,200.9)  
163.4  
(3,316.5)  
160.5  
Retained earnings  
TOTAL EQUITY  
23,248.9  
19,211.4  
23,055.0  
19,899.0  
Summary of movements in consolidated retained earnings of the Closed Group  
Retained earnings at beginning of the fi nancial year  
Net profit  
Actuarial gain/(loss) on defined benefit plans, net of tax  
Dividends provided for or paid  
23,055.0  
985.8  
(0.4)  
(791.5)  
23,248.9  
22,289.9  
1,417.5  
4.6  
(657.0)  
23,055.0  
Retained earnings at the end of the fi nancial year  
118  
Notes to the fi nancial statements for the year ended 30 June 2016 continued  
Note 22: Parent Entity Information  
2
A$m  
016  
2015  
A$m  
Information relating to CSL Limited (‘the parent entity’)  
(a) Summary fi nancial information  
The individual fi nancial statements for the parent entity show the following aggregate amounts:  
Current assets  
486.5  
3,301.9  
240.2  
268.8  
2,377.0  
83.1  
Total assets  
Current liabilities  
Total liabilities  
2,414.5  
(4,200.9)  
131.6  
686.7  
Contributed equity  
Share-based payments reserve  
Retained earnings  
(3,316.5)  
129.2  
4,956.7  
887.4  
4,877.6  
1,690.3  
1,251.9  
1,252.5  
Net Assets & Total Equity  
Profit or loss for the year  
Total comprehensive income  
814.2  
814.2  
(b) Guarantees entered into by the parent entity  
(c) Contingent liabilities of the parent entity  
The parent entity provides certain fi nancial guarantees in the  
ordinary course of business. No liability has been recognised in  
relation to these guarantees as the fair value of the guarantees  
is immaterial. These guarantees are mainly related to all external  
debt facilities of the Group. In addition, the parent entity provides  
letters of comfort to indicate support for certain controlled  
entities to the amount necessary to enable those entities to meet  
their obligations as and when they fall due, subject to certain  
conditions (including that the entity remains a controlled entity).  
The parent entity did not have any material contingent liabilities  
as at 30 June 2016 or 30 June 2015. For information about  
guarantees given by the parent entity, please refer above and to  
Note 21.  
(d) Contractual commitments for the acquisition of  
property, plant or equipment  
The parent entity did not have any material contractual  
commitments for the acquisition of property, plant and  
equipment as at 30 June 2016 or 30 June 2015.  
119  
IFRS 2 – Classification and Measurement  
of Share-based Payment Transactions  
Note 23: Subsequent Events  
Note 24: New and Revised  
Accounting Standards  
Other than as disclosed elsewhere in these statements, there are  
no matters or circumstances which have arisen since the end of the  
fi nancial year which have significantly affected or may significantly  
affect the operations of the Group, results of those operations or the  
state of affairs of the Group in subsequent fi nancial years.  
This amendment clarifies how to account for certain types of  
share-based payment transactions impacting the accounting  
for the effects of vesting and non-vesting conditions on the  
measurement of cash-settled share-based payments, share-  
based payment transactions with a net settlement feature for  
withholding tax obligations and a modification to the terms  
and conditions of a share-based payment that changes the  
classification of the transaction from cash-settled to equity  
settled.  
a. New and revised standards  
and interpretations adopted by the Group  
The Group has adopted, for the fi rst time, certain standards and  
amendments to accounting standards. None of the changes have  
impacted on the Group’s accounting policies nor have they required  
any restatement.  
b. New and revised standards  
and interpretations not yet adopted by the Group  
The following new and revised accounting standards and  
Applicable to the Group for the year ended 30 June  
020:  
2
interpretations published by the Australian Accounting Standards  
Board which are considered relevant to the Group, are not yet  
effective. The Group has not yet completed its assessment of the  
impact of these new and revised standards on the fi nancial report.  
AASB 16 - Leases  
This standard introduces a single lessee accounting model and  
requires a lessee to recognise assets and liabilities for all leases  
with a term of more than 12 months, unless the underlying  
asset is of low value. A lessee will recognise a right-of-use asset  
representing its right to use the underlying leased asset and a  
lease liability representing its obligation to make lease payments.  
Depreciation on the asset and interest on the liability will be  
recognised.  
Applicable to the Group  
for the year ended 30 June 2019:  
AASB 9 – Financial Instruments  
This standard will change the classification and measurement  
of fi nancial instruments, introduce new hedge accounting  
requirements including changes to hedge effectiveness testing,  
treatment of hedging costs, risk components that can be hedged  
and disclosures, and introduce a new expected-loss impairment  
model that will require more timely recognition of expected credit  
losses.  
AASB 15 - Revenue from Contracts with Customers  
This standard specifies the accounting treatment for revenue  
arising from contracts with customers providing a framework for  
determining when and how much revenue should be recognised.  
The core principle is that revenue must be recognised when  
goods or services are transferred to a customer, in an amount  
that refl ects the consideration to which the entity expects to be  
entitled in exchange for those goods or services.  
120  
Directors’ Declaration  
1)  
In the opinion of the Directors:  
a. the fi nancial statements and notes of the company and of the Group are in accordance with the Corporations Act 2001 (Cth),  
including:  
i. giving a true and fair view of the company’s and Group’s fi nancial position as at 30 June 2016 and of their performance for the  
year ended on that date; and  
ii. complying with Australian Accounting Standards and Corporations Regulations 2001.  
b. there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and  
payable.  
2)  
About this Report (a) in the notes to the fi nancial statements confirms that the fi nancial report complies with International Financial  
Reporting Standards as issued by the International Accounting Standards Board.  
3)  
This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A  
of the Corporations Act 2001 (Cth) for the fi nancial period ended 30 June 2016.  
4)  
In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the members of the  
Closed Group identified in note 21 will be able to meet any obligations or liabilities to which they are or may become subject, by  
virtue of the Deed of Cross Guarantee dated 22 October 2009.  
This declaration is made in accordance with a resolution of the directors.  
John Shine AO  
Paul Perreault  
Chairman  
Managing Director  
Melbourne  
17 August 2016  
121  
Independent Auditor’s Report for the year ended 30 June 2016  
122  
Independent Auditor’s Report for the year ended 30 June 2016 continued  
123  
124  
Medical Glossary  
Acute Coronary Syndrome is a term used for any  
condition brought on by sudden, reduced blood  
flow to the heart.  
C1 Esterase Inhibitor is a protein found in  
the fluid part of blood that controls C1 the first  
component of the complement system. The  
complement system is a group of proteins that  
move freely through the blood stream. These  
proteins work with the immune system and play a  
role in the development of inflammation.  
Hereditary Angioedema (HAE) is a rare but  
serious genetic disorder caused by low levels or  
improper function of a protein called C1 esterase  
inhibitor. It causes swelling, particularly of the face  
and airways, and abdominal cramping.  
Neutrophil infiltration is the diffusion or  
accumulation of neutrophils (white blood cells)  
in tissues or cells in response to a wide variety of  
substances released at the sites of inflammatory  
reactions.  
Acute Myeloid Leukaemia is a type of cancer  
that affects the blood and bone marrow.  
Hereditary Emphysema is a physiological  
condition that results in excessive amounts of  
white blood cells (neutrophils) to enter the lungs  
and cause inflammation and chronic lung disease.  
Perioperative bleeding is bleeding during an  
operation.  
Adjuvant is a substance which enhances the  
body’s immune response to an antigen.  
Chromatography is a technique for separating  
molecules based on differential absorption and  
elution. It involves the flow of a fluid carrier over a  
non-mobile absorbing phase.  
Plasma is the yellow-coloured liquid component of  
blood in which blood cells are suspended.  
Albumin is any protein that is soluble in water  
and moderately concentrated salt solutions and is  
coagulable by heat. It is found in egg whites, blood,  
lymph, and other tissues and fluids. In the human  
body, serum albumin is the major plasma protein  
Human Papilloma Virus (HPV) is a diverse group  
of DNA-based viruses that infect the skin and  
mucous membranes of humans and a variety of  
animals. Some HPV types cause benign skin warts,  
or papillomas, for which the virus family is named.  
Others can lead to the development of cervical  
dyskaryosis, which may in turn lead to cancer of the  
cervix.  
Primary Immunodeficiency (PID) is an inherited  
condition where there is an impaired immune  
response. It may be in one or more aspects of the  
immune system.  
Chronic Inflammatory Demyelinating  
Polyneuropathy (CIDP) is a neurological disorder  
which causes gradual weakness and a loss in  
sensation mainly in the arms and legs.  
(approximately 60 per cent of the total).  
Alpha-1 Antitrypsin Deficiency (AATD) is an  
inherited condition that causes low levels of, or  
no, alpha-1 antitrypsin (AAT) in the blood. AATD  
is a protein made in the liver and enables normal  
function of the lungs.  
Prophylaxis is the action of a vaccine or drug that  
acts to defend against or prevent a disease.  
Coagulation is the process of clot formation.  
Quadrivalent influenza vaccine is a vaccine that  
offers protection against four different influenza  
virus strains.  
Fibrinogen is a coagulation factor found in human  
plasma that is crucial for blood clot formation.  
Immunoglobulins (IgG), also known as  
antibodies, are proteins produced by plasma cells.  
They are designed to control the body’s immune  
response by binding to substances in the body that  
are recognised as foreign antigens (often proteins  
on the surface of bacteria or viruses).  
Anti-D immunoglobulin, also called Rh (D)  
immunoglobulin, is an injection of Anti-Rhesus  
antibodies given to a woman whose blood group  
is Rhesus negative, if there is a chance that she  
has been exposed to Rhesus positive blood either  
during pregnancy or blood transfusion.  
Fractionation is the process of separating plasma  
into its component parts, such as clotting factors,  
albumin and immunoglobulin, and purifying them.  
Recombinants are proteins prepared by  
recombinant technology. Procedures are used to  
join together segments in a cell-free system (an  
environment outside a cell organism).  
Haemolytic Disease is a disease that disrupts the  
integrity of red blood cells causing the release of  
haemoglobin.  
Influenza, commonly known as flu, is an infectious  
disease of birds and mammals caused by a RNA  
virus of the family Orthomyxoviridae (the influenza  
viruses).  
Secondary immunodeficiency disease occurs  
when the immune system is compromised due to  
an external factor (i.e. not genetic).  
Antivenom (or antivenin, or antivenene) is a  
biological product used in the treatment of  
venomous bites or stings.  
Haemophilia is a haemorrhagic cluster of diseases  
occurring in two main forms:  
Subcutaneous is the administration of drugs or  
fluids into the subcutaneous tissue, which is located  
just below the skin.  
Intravenous is the administration of drugs or fluids  
directly into a vein.  
1. Haemophilia A (classic haemophilia, factor VIII  
Biopharmaceuticals are proteins (including  
antibodies), nucleic acids (DNA, RNA or antisense  
oligonucleotides) used for prophylactic or  
therapeutic purposes.  
deficiency), an X linked disorder due to deficiency  
of coagulation factor VIII.  
Immunohaemotology is the discipline concerned  
with all aspects of immunology relating to the  
blood, including blood types and blood disorders.  
Trivalent influenza vaccine is a vaccine that  
offers protection against three different influenza  
virus strains.  
2
. Haemophilia B (factor IX deficiency, Christmas  
disease), also X linked, due to deficiency of  
coagulation factor IX.  
Cell-based (technology) for the manufacture of  
influenza vaccines, is a process of growing viruses  
in animal cells.  
Monoclonal Antibody (mAb) is an antibody  
produced by a single clone of cells. Monoclonal  
antibodies are a cornerstone of immunology and  
are increasingly coming into use as therapeutic  
agents.  
Von Willebrand Disease (vWD) is a hereditary  
disorder caused by defective or deficient Von  
Willebrand factor, a protein involved in normal  
blood clotting.  
Haemostasis (Haemostatic) is the stopping of  
blood flow.  
Warfarin is an anticoagulant used to to prevent  
heart attacks, strokes, and blood clots.  
Neurological is the science of nerves and the  
nervous system.  
Legal notice: This report is intended for global use.  
Some statements about products or procedures  
may differ from the licensed indications in specific  
countries. Therefore, always consult the country-  
specific product information, package leaflets or  
instructions for use. For more information, please  
contact a local CSL representative. This report covers  
CSL’s global operations, including subsidiaries,  
unless otherwise noted and a reference to CSL is  
a reference to CSL Limited and its related bodies  
corporate. The matters discussed in this report  
that are not historical facts are forward-looking  
statements, including statements with respect to  
future company compliance and performance.  
These statements involve numerous risks and  
uncertainties. Many factors could affect the  
company’s actual results, causing results to differ,  
possibly materially, from those expressed in the  
forward looking statements. These factors include  
actions of regulatory bodies and other governmental  
authorities; the effect of economic conditions;  
technological developments in the healthcare field;  
advances in environmental protection processes; and  
other factors. CSL disclaims any obligation to update  
any forward-looking statements.  
This report is printed on environmentally responsible  
paper made Carbon Neutral. The greenhouse gas  
emissions of the manufacturing process including  
transportation of paper to paper warehouse has  
been measured by the Edinburgh Centre for Carbon  
Neutral Company and the fibre source has been  
independently certified by the Forest Stewardship  
Council (FSC). The paper is manufactured from  
100% Post Consumer Recycled paper in a Process  
Chlorine Free environment under the ISO 14001  
environmental management system.  
It is printed by a ISO 14001EMS & ISO 9001 quality  
management system certified printer, which is  
FSC Chain of Custody certified and printed on an  
ecologically rated printing press using a chemical  
recirculation system and vegetable based inks.  
Brand names designated by a ® or a ™ throughout  
this publication are trademarks either owned by  
and/or licensed to CSL or its affiliates. Not all brands  
mentioned have been approved in all countries  
served by CSL.  
Designed and produced by Carbon Theory,  
Melbourne, Australia.  
CSL Limited ABN 99 051 588 348  
Corporate Directory  
Share Registry  
Auditors  
Computershare Investor  
Services Pty Limited  
Ernst & Young  
Ernst & Young Building  
8 Exhibition Street  
Melbourne  
Yarra Falls  
4
52 Johnston Street  
Abbortsford VIC 3067  
Victoria 3000  
GPO Box 2975  
Melbourne  
GPO Box 67  
Melbourne  
Victoria 3001  
Victoria 3001  
Enquiries within Australia:  
Phone: +61 3 9288 8000  
Fax: +61 3 8650 7777  
1
800 646 882  
Enquiries outside Australia:  
+
61 3 9415 4178  
Investor enquiries online:  
www.investorcentre.com/contact  
Website: www.investorcentre.com  
Registered Head Office  
CSL Limited  
ABN 99 051 588 348  
45 Poplar Road Parkville  
Victoria 3052 Australia  
Telephone: +61 3 9389 1911  
Facsimile: +61 3 9389 1434  
Internet: http://www.csl.com.au  
Further information  
For further information about CSL and its operations,  
refer to Company announcements to the Australian  
Securities Exchange and our website:  
www.csl.com.au  


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission