Dear Shareholder,

It is with much pleasure that we can report that CSL’s expanded plasma therapeutics business has been successfully integrated and has enabled us to deliver our strongest financial result to date.

Highlights of the year were:

• Reported net profit after tax of $547 million, up 149% on the previous year with net profit after tax from continuing operations of $317 million after adjusting for the operating contributions and sale of JRH Biosciences and goodwill.
   
• Net operating cash flow of $568 million, up 174% on the previous year.
   
• The sale of JRH Biosciences to the Sigma-Aldrich Corporation for an estimated profit of $250 million on 28 February 2005.
   
• A significant expansion of influenza vaccine manufacturing and research facilities in Melbourne which has strengthened our ability to meet the increasing demands of our Australian and international customers.
   
• In Australia, CSL entered into a new five-year agreement with the National Blood Authority under which CSL Bioplasma will provide specialised plasma products and other services to State and Federal governments in collaboration with the Australian Red Cross.
   
• CSL’s exclusive licensee, Merck & Co. Inc., announced they will file with the US FDA before the end of 2005 for a product license for a new vaccine against human papillomavirus. The technology for this vaccine to prevent cervical cancer and genital warts was developed in the early 1990s in a collaboration between CSL and Professor Ian Frazer at the University of Queensland.

Our Thanks to Management and Staff

Fundamental to our delivering CSL’s best ever financial result has been the successful integration of two plasma therapeutics businesses during the year. Many people have been directly involved in this process, and many others played their part in making it happen at grass roots level. There have also been significant achievements in other areas of our business – in research and development, in manufacturing activities, and in bringing the highest quality products to our customers. Your Board of Directors would like to take this opportunity to thank management and staff for the commitment shown in a landmark year that has strengthened our position as a global specialty biopharmaceutical Company.

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