ANZ NOM05_ FA.qxd

3/11/05

3:30 PM

Page 6

Notice of 2005
Annual General Meeting

KING WILLIAM ROADMONTEFIORE ROAD

RIVER TORRENSFESTIVALTHEATREFESTIVAL DRIVEPP

MORPHETT ST BRIDGE

HYATT
HOTEL

ADELAIDE
CONVENTIONCENTREP

RAILWAYSTATIONP

PARLIAMENTHOUSENORTH TERRACE
RADISSON
PLAYFORDHOTELGROSVENORHOTEL

AGM LOCATION
Adelaide Convention Centre
North Terrace, Adelaide, South Australia

Australia and New Zealand Banking Group Limited ABN 11 005 357 522

ANZ NOM05_ FA.qxd

3/11/05

3:30 PM

Page IINOTICE OF 2005
ANNUAL GENERAL MEETING
Corporations Act. The representative should
bring to the Meeting evidence of his or her
appointment, including any authority underwhich it is signed, unless it has previously
been given to the Company.

Australia

Notice is given that the thirty seventh Annual General Meeting of Australia
and New Zealand Banking Group Limited will be held at the Adelaide Convention
Centre, North Terrace, Adelaide, South Australia on Friday, 16 December 2005
at 10.00am (Adelaide time).

ORDINARY BUSINESS
1 ANNUAL REPORTS
To consider the Concise Annual Report,
Financial Report and the Reports of the
Directors and of the Auditors for the year
ended 30 September 2005.

2 ADOPTION OF THE
REMUNERATION REPORT
To adopt the Remuneration Report for theyear ended 30 September 2005.
The vote on this resolution is advisory only.

3 RE-ELECTION OF DIRECTORSa) To re-elect a Director – Dr R.S. Deane
Dr Deane retires in accordance with theCompany’s Constitution, and being eligible,
offers himself for re-election.
b) To re-elect a Director – Mr D.M. Gonski AO
Mr Gonski retires in accordance with theCompany’s Constitution, and being eligible,
offers himself for re-election.
c) To re-elect a Director – Mr C.B. Goode AC
Mr Goode retires in accordance with theCompany’s Constitution, and being eligible,
offers himself for re-election.

OTHER BUSINESS
4 MODIFICATION OF THE
CONSTITUTION
To consider and, if thought fit, to pass thefollowing as a special resolution:“That the Company’s Constitution be alteredby making the amendments contained in
the document tabled at the 2005 Annual
General Meeting and signed by the Chairman
for the purposes of identification.”

1

5 AMENDMENTS TO THE
DIRECTOR’S ACCESS, INSURANCEAND INDEMNITY DEED
To consider and, if thought fit, to pass thefollowing as an ordinary resolution:“That:a) approval is given to the Company toenter into the Director’s Access, Insurance
and Indemnity Deed between the Company
and each current and future Director of theCompany in substantially the same form asthat which is submitted to the 2005 Annual
General Meeting, and signed by the
Chairman for the purposes of identification,and to the Company providing the benefitsin accordance with the Deed to current andfuture Directors; andb) any Director and Secretary of theCompany be authorised to execute on
behalf of the Company, Director’s Access,Insurance and Indemnity Deeds.”

6 CHANGES TO NON-EXECUTIVEDIRECTORS’ RETIREMENT SCHEME
To consider and, if thought fit, to pass
the following as an ordinary resolution:“That, due to the Company’s existing
Directors’ Retirement Scheme being
discontinued with effect on and from
1 October 2005, approval for all purposes
is given to:a) the amendment to the Directors’
Retirement Scheme as described in the
Notice of 2005 Annual General Meeting; andb) the acquisition of an interest in fully
paid ordinary shares in the Company byor on behalf of the Non-executive Directors
specified in the Explanatory Notes, who
would otherwise have become entitled toa payment on retirement under the
Directors’ Retirement Scheme.”

7 INCREASE IN NON-EXECUTIVEDIRECTORS’ FEE CAP
To consider and, if thought fit, to pass thefollowing as an ordinary resolution:“That the maximum annual aggregate of
remuneration (within the meaning of theCompany’s Constitution) that Non-executive
Directors are entitled to be paid for theirservices as Directors out of the funds of theCompany under rule 10.2(a) of theConstitution be increased by A$500,000
and fixed at A$3,000,000.”

ENTITLEMENT TO ATTEND
AND VOTE
The Board has determined that, for the
purposes of the Meeting (including voting
at the Meeting), members are those
persons who are the registered holdersof shares at 6.30pm (Adelaide time) on
Wednesday, 14 December 2005.

VOTING BY PROXY
A member who is entitled to attend and casta vote at the Meeting may appoint a proxy.
A proxy need not be a member. A person can
appoint an individual or a body corporate
as a proxy. If a body corporate is appointed
as a proxy, it must ensure that it appoints a
corporate representative in accordance withsection 250D of the Corporations Act toexercise its powers as proxy at the Meeting.
A member who is entitled to cast 2 or more
votes may appoint up to 2 proxies and may
specify the proportion or number of votes
each proxy is appointed to exercise.
The following addresses are specified
for the purposes of receipt of proxyappointments and any authorities underwhich proxy appointments are signed(or certified copies of those authorities):

ANZ Share Registry
GPO Box 242
Melbourne
Victoria 3001
Australia

ANZ Share Registry
Yarra Falls
452 Johnston Street
Abbotsford
Victoria 3067
Australia

United Kingdom

New Zealand

ANZ Share Registry
PO Box 82
The Pavilions
Bridgewater Road
Bristol BS99 7NH
United Kingdom

ANZ Share Registry
Private Bag 92119
Auckland 1020
New Zealand

By Order of the Board

VOTING BY ATTORNEY

Tim L’Estrange
Secretary
Melbourne
16 November 2005

EXPLANATORY NOTESITEM 2 ADOPTION OF THE
REMUNERATION REPORTAs required by the Corporations Act, theBoard is presenting the Remuneration
Report to the members for consideration
and adoption by a non-binding vote.
The Remuneration Report contains:

information about Board policy for
determining the nature and amount of
remuneration of the Company’s Directors
and senior executives;a description of the relationship between
the remuneration policy and theCompany’s performance;a detailed summary of performance
conditions, including a summary of why
they were chosen and how performanceis measured against them; and

remuneration details for each Director and foreach of the Company’s specified executives.

A member may appoint an attorney to voteon his/her behalf. For an appointment tobe effective for the Meeting, the instrument
effecting the appointment (or a certified
copy of it) must be received by the Company
at its registered office or one of theaddresses listed above for the receipt ofproxy appointments at least 48 hours
before the Meeting.

The Remuneration Report, which is part ofthe 2005 Concise Annual Report, has been
sent to members (except those who havemade an election to not receive the Concise
Annual Report). Copies of the Remuneration
Report are available by contacting the ANZ
Share Registry or by visiting the Company’s
website www.anz.com and clicking on thefollowing links: shareholders (top of page)> Annual General Meeting (left hand side)> Concise Annual Report 2005 / Part 2 of 2 /Concise Report (body of text).

CORPORATE REPRESENTATIVES

Board Recommendation

A body corporate which is a member,or which has been appointed as a proxy,
may appoint an individual to act as its
representative at the Meeting. The
appointment must comply with therequirements of section 250D of the

Candidates for re-election as Directors:
Dr Deane

Members may also submit their proxy
instructions electronically with the ANZ
Share Registry by visiting the Company’s
website www.anz.com and clicking on thefollowing links: shareholders (top of page)> Annual General Meeting (left hand side)> Electronic Proxy Form (body of text).

For more information concerning theappointment of proxies and the addresses
to which proxy forms may be sent, pleaserefer to the reverse side of the proxy form.

Dr Deane, Mr Gonski and Mr Goode retireby rotation. Each of these Directors offers
themselves for re-election.

DR R S DEANE
phd, b com (hons), fca, fcis, fnzim

Proxy appointments and any authorities
under which they are signed (or certified
copies of those authorities) may be sent by
fax to facsimile number (61 3) 9473 2555.

To be effective, a proxy appointment and,if the proxy appointment is signed by themember’s attorney, the authority underwhich the appointment is signed (or acertified copy of the authority) must be
received by the Company at least 48 hours
before the Meeting.

ITEM 3 RE-ELECTION OF DIRECTORSThe Board considers that the remuneration
policies adopted by the Company areappropriately structured to provide rewards
that are commensurate with the performanceof the Company. On this basis, the Board
recommends that members vote in favourof Item 2.

Company Director
Independent Non-executive Director,
first appointed in September 1994.
Dr Deane is a member of the Compensation& Human Resources Committee and theTechnology Committee. He is Chairmanof ANZ National Bank Limited, Fletcher
Building Limited and Telecom Corporationof New Zealand Limited, and a Director of
Woolworths Limited. Dr Deane is also
Chairman of Te Papa Tongarewa (Museumof New Zealand) and New Zealand Seed
Fund Management Limited, and is a former
Director of TransAlta Corporation (Canada)
and former Deputy Governor of the Reserve
Bank of New Zealand.
Lives in Wellington, New Zealand. Age: 64.
Dr Deane has skills and experience acrossa variety of sectors including the government,banking and finance, economics, andtelecommunications, and also with charitable
and cultural organisations, which contributeto his role on the Board.
Mr Gonski AO
MR D M GONSKI, AO
b com, llb, s.i.a. (aff), faicd, fcpa

Company Director
Independent Non-executive Director,
first appointed in February 2002.
Mr Gonski is Chairman of the Nominations,
Governance & Corporate Responsibility
Committee and a member of the Risk
Management Committee. He is Chairmanof Coca Cola Amatil Limited and a Directorof The Westfield Group. Mr Gonski is also
Chancellor of the University of New South
Wales, Chairman of the Investec Group in
Australia, the Australia Council for the Arts
and the Sydney Grammar School Trust, andPresident of the Board of Trustees of Art
Gallery of NSW. He is a former Director ofJohn Fairfax Holdings Limited, and a former
Chairman of Morgan Stanley Australia Limited
and the National Institute of Dramatic Art.
Lives in Sydney. Age: 52.

anz notice of 2005 annual general meeting

2

ANZ NOM05_ FA.qxd

3/11/05

3:30 PM

Page 2A lawyer, Mr Gonski has a broad experience
across business, the law and investmentbanking. He also brings to his role on the
Board an appreciation for the community
through his work in the arts and thenot-for-profit sector.

0800 174 007 (within New Zealand),0870 702 0000 (within the United Kingdom)or 61 3 9415 4010 (outside Australia).
A copy of the proposed amended
Constitution will also be available forinspection at the Annual General Meeting.

Mr Goode AC

The principal proposed amendments to theConstitution are summarised below.

MR C B GOODE, AC
b com (hons) (melb), mba (columbia university,
new york), hon lld (melb), hon lld (monash)

Company Director
Independent Non-executive Director,
first appointed in July 1991 and Chairman
since August 1995.
Mr Goode is an ex officio member of all
Board Committees. He is Chairman ofWoodside Petroleum Limited, Australian
United Investment Company Limited andDiversified United Investment Limited,
and a Director of Singapore Airlines
Limited. He is also Chairman of The
Ian Potter Foundation Limited.
Lives in Melbourne. Age: 67.
Mr Goode has a background in thefinance industry and has been a professional
non-executive director since 1989. Hebrings a wide a range of skills and significant
experience of the finance industry to hisrole as Chairman of the Board.
Board Recommendation
The Board (excluding the relevant Director
standing for re-election) endorses there-election of each of Dr Deane and Messrs
Gonski and Goode as a Director, as the casemay be.

ITEM 4 MODIFICATION OF THE
CONSTITUTION
The Company’s current Constitution was
adopted by members at the 1999 Annual
General Meeting and most recently amended
at the General Meeting on 13 August 2003.
Since that time there have been a numberof regulatory changes relevant to theConstitution, including changes to the
Corporations Act and the ASX Listing Rules.
Additionally, there have been changes incorporate governance practices. Accordingly,
the Board considers that it is appropriate
for the Company to take this opportunity to
update the Company’s Constitution to reflect
these and other recommended changes.
A copy of the Constitution, marked-up toshow the proposed amendments, can beobtained prior to the Meeting from theCompany’s website www.anz.com byclicking on the following links: shareholders(top of page) > Annual General Meeting(left hand side) > Constitution – Proposed
Amendments (body of text), or bycontacting the ANZ Share Registry on
1800 11 33 99 (within Australia),

3

Terminology
As a result of the Corporations Law being
replaced by the Corporations Act, and the
SCH Business Rules being replaced by the
ASTC Settlement Rules, a number of thedefinitions used in the Constitution are
outdated. The proposed amendments will
update relevant definitions to reflect thechanges in terminology in the Corporations
Act, the ASX Listing Rules and the ASTC
Settlement Rules.
For example, in rule 1.2 the definitionsof “ASTC”, “ASTC Settlement Rules” and“Corporations Act” are introduced into
the Constitution. The definitions of “SCHbusiness rules”, “Law” and “Market
Transfer” are deleted.
Directors’ Share Qualification

meeting. The requirement for a Director
to retire at the third annual general meeting
after the Director was elected or last
re-elected will be retained, which isconsistent with ASX Listing Rule 14.4.
A Director who retires will be eligible tostand for re-election.
Rule 3.6 will also require that an electionof Directors must be held at each annual
general meeting, in accordance with ASX
Listing Rule 14.5. If an election is notscheduled to occur under rule 3.6 (or underrule 3.3 relating to the election of a Director
appointed since the last annual general
meeting) then 1 Director must retire fromoffice at the annual general meeting.
To provide flexibility to the sequence of
3 year terms for the Directors, the amended
rule 3.6 will also permit Directors tovoluntarily retire and seek re-election
before the end of their three year term.
As is currently the case, amended rule
3.6 will not apply to the Managing Director.
Consequential amendments will also bemade to rule 3.3 to reflect the changes
described above.
Time period for nomination of Directors

It is proposed that the existing rule 3.2
be deleted, removing the requirement for
Directors to hold a minimum of 2,000 ANZ
shares. Related rule 3.9(f) would also bedeleted. (Rule 3.9(f) currently provides thatthe office of a Director automatically becomesvacant if the Director ceases to hold theshare qualification required by rule 3.2.)

Recently, ASX Listing Rule 14.3 has been
amended. This Listing Rule required theCompany to accept nominations for electionof Directors received at least 35 businessdays before the date of the general meeting.
The Listing Rule now allows a company’s
constitution to specify a longer period.

Removal of rule 3.2 is proposed becausea requirement for a 2,000 share holding
qualification before a person can becomea Director is considered inappropriate
bearing in mind the Board’s policy that
Non-executive Directors accumulate overtime a holding in shares in the Company
that is equivalent in value to at least 100%of a Non-executive Director’s base fee(200% in the case of the Chairman).

As such, rule 3.5 is to be amended tochange the time period in which theCompany must accept nominations forelection of Directors from 35 business days
to 45 business days before the general
meeting, unless the Board recommends
the appointment or the Director is retiringby rotation under rule 3.6 or under rule
3.3 because they were appointed to filla casual vacancy.

As a result of the deletion of rule 3.2, rules
3.3 to 3.11 (and any references to them in
the Constitution) would be renumbered. For
convenience, references in these Explanatory
Notes are to rules 3.3 to 3.11 before
being renumbered.

The period of 45 business days has been
proposed as it balances the need of theCompany to have sufficient time to prepare
notices of meeting, while not being toolong so as to deny members a reasonable
opportunity to nominate a person forelection as a Director.

Rotation of Directors
Existing rule 3.6 provides that one third of
the Directors (who have not been appointed
to fill a casual vacancy) are required toretire by rotation each year. This rule has
the practical effect that from time to time
Directors are being required to retire byrotation at intervals of less than 3 years. It
is proposed that rule 3.6 be amended toremove the requirement for one third of the
Directors to retire at each annual general

Automatic vacation of office in
certain circumstances
Rule 3.9 sets out certain circumstanceswhere the office of a Director automatically
becomes vacant.
Rule 3.9(g) provides that the office ofa Director automatically becomes vacant if
the Director reaches 70 years of age or any
other later date determined by the Board.
It is proposed that rule 3.9(g) be deleted.

This requirement is no longer appropriate
in light of legal and policy changes inrelation to the age of Directors andage discrimination.
Rule 3.9(d) provides that the office of a
Director automatically becomes vacant if
the Director fails to attend Board meetings
for a continuous period of 3 months
without leave of absence from the Board.
It is proposed that this rule be amended
to provide that a Director’s office becomesvacant if the Director fails to attend 3
consecutive Board meetings (not including
Board committee meetings).
It is considered that this amended rulebetter reflects the expectation that Directors
should attend Board meetings (unless they
have the leave of the Board) as and whenthe meetings are scheduled, rather thanspecifying a maximum monthly period thata Director can be absent without the leaveof the Board.
Managing Director
It is proposed that rules 7.2 and 7.3
be amended to make it clear that theappointment of a new Managing Director
is not subject to confirmation at the next
annual general meeting after the Managing
Director’s appointment. This is consistent
with ASX Listing Rule 14.4. While members
are responsible for the election of Directors,
it is the responsibility of the Directors to
select and appoint a Managing Director andChief Executive Officer who serves on theterms determined by the Board.
Officers’ indemnity and insurance
Rule 11 is proposed to be amended todelete references to “the Law” (which was
a reference to what is now the Corporations
Act) and to substitute the phrase“applicable law”.
This change is being made because
restrictions on the ability of the Company
to indemnify officers of the Company may
not be contained only in the Corporations
Act. Proposed amendments to the Trade
Practices Act will also restrict the abilityof the Company to indemnify officers incertain circumstances. These amendments
are to ensure that the Company’s
Constitution is consistent with changes
to applicable laws.
Auditor’s right to attend meeting
New rule 14.7 provides, consistent with
the Corporations Act, that the Company’s
auditor is entitled to attend general meetingsof the Company.
Proxy appointments
The following minor amendments areproposed to clarify the operation of rule
15 relating to proxies:

in rule 15.1(b) the word “acknowledged”
will be replaced with “authenticated” toreflect changes to the Corporations Act;ITEM 5 AMENDMENTS TO THE
DIRECTOR’S ACCESS, INSURANCEAND INDEMNITY DEED

rule 15.4 will be amended to make it
clear that a revocation of a proxyappointment is effective upon the
instrument of revocation being received
by the Company at least 48 hours before
the time of the general meeting;the concept of a proxy appointment being“authenticated” will be included in rule15.5(a), consistent with recent changes to
the Corporations Act; andThe current form of the Director’s Access,Insurance and Indemnity Deed (Deed) was
previously approved by members at theCompany’s 1999 Annual General Meeting.
The wording of the Deed has not beenchanged since that time. Changes areproposed to the form of the Deed to update
operative provisions, to reflect developmentsin the law, and to make some minor
cosmetic and grammatical changes.

rule 15.10 will be amended to make it clearthat acts of a proxy at a meeting will still bevalid, unless notice of the revocation of theproxy appointment is received in themanner contemplated by rule 15.4.

The revised form of the Deed expands thepotential benefits available to a Director.
Legal advice has been obtained that the
proposed changes to the Deed are lawful.
Consistent with the Company’s practice inthe past, member approval is being soughtfor the revised form of the Deed.

Distribution of assets asshares to members
Existing rule 28.6 will be amended, anda new rule 33.6 included, to clarify theability of the Company to distribute assets
in the form of shares in another company tomembers, without an additional requirement
to separately obtain the member’s consent
to become a member of that company.

A copy of the proposed amended Deed canbe obtained by contacting the ANZ Share
Registry. A copy will also be available forinspection at the Annual General Meeting.

Under the Corporations Act, a person must
consent to become a member of a company.
If the Company was to make distributions
to members in the form of shares inanother company, amended rule 28.6 andrule 33.6 will facilitate this process.

The Deed is expressed to indemnify a
Director against the costs of representation
at administrative or quasi-judicial
investigations or inquiries. Amendments
are proposed to expressly state that theindemnity extends to costs incurred in
respect of legitimate appeals against
determinations or findings of such bodies.

The principal changes to the form of theDeed are described below.
Indemnification for appeals

Introduction of share plans without
member approval

Advances for legal expenses to a Director
where an insurance claim is denied

Member approval is no longer required
under the ASX Listing Rules for the
introduction of share plans. It is proposedthat rule 29.1 be amended to allow the
Board to introduce share plans without
member approval. It is noted, however,that under the ASX Listing Rules, any issueof shares to Directors under an employee
incentive plan would still require
member approval.

Changes are being made to the Deedto ensure that a Director is provided withfunding of legal expenses to challenge an
improper claim rejection by the Company’s
Directors’ and Officers’ liability insurers.
However, the operation of the provision is
subject to safeguards, allowing the Company
to exercise reasonable control over thecosts and the process. Advancement oflegal expenses to challenge an improperclaim rejection by the Company’s insurers
is conditional on the Director complying
with a number of requirements, including,for example, that:

Miscellaneous amendments
Rules 30.1, 30.3, 30.6(a) and 32.5 areproposed to be amended to make minor
and technical amendments resulting fromterminology in the ASTC Settlement
Rules (which have replaced the SCH
Business Rules).



the Director take any reasonable actionthat the Company requests in the conductof the claim;the Director must obtain advice froma senior and experienced legal counsel
that the proceedings may be pursued withreasonable prospects of success; and

the Company may, during the proceedings,
obtain a reassessment of the merits of thecase. If the prospects of the Director

Board Recommendation
The Board considers that the proposed
amendments to the Company’s Constitution
are appropriate and uncontroversial as they
relate to changes to update terminology or
to simplify and improve the operation of
the rules. Accordingly, the Board recommends
that members vote in favour of Item 4.

anz notice of 2005 annual general meeting

4

ANZ NOM05_ FA.qxd

3/11/05

3:30 PM

Page 4

succeeding against the insurers havesubstantially deteriorated, the Company
may review its commitment to continue to
pay legal expenses incurred by the Director
and may compromise the litigation uponsuch terms as the solicitors and/or counsel
who are conducting the litigation may
recommend, subject to indemnifying
the Director in respect of any adverse
costs order.

that each party acts towards each other ingood faith in respect of any matter arisingunder or in relation to the Deed.

a new provision will state that the new
Deed in the amended form proposedcancels all previous ones but that any
revocation does not affect any accrued
rights or responsibilities of the parties;changes are being made to certain definitions
to make it clear that the Deed extends tomatters involving foreign jurisdictions, forexample, actions brought against a Director
in a foreign jurisdiction; andOther changes
The following are some of the minor changes
that are being made to the form of the Deed:Good faith
Reflecting the interests of both theCompany and each Director, a good faithclause is being included. This will ensurea new effective notice provision is being
included in the Deed which specifies whena notice or communication for the purposesof the Deed is taken to have been given to
the Company or a Director;

Messrs C. B. Goode, J. K. Ellis andD. M. Gonski elected to receive the Shares
Alternative for 100% of their accrued
retirement benefit. Under the proposed
revised arrangement, they would beentitled to receive 56,172 shares, 22,384
shares and 10,675 shares respectively if
members approve the proposed changes
to the Scheme. The other Non-executive
Directors elected the Cash Alternative for
their accrued retirement benefits.

specifying that the definition of “Liabilities”
in the Deed also includes interest.

Purchase of shares
Where a Non-executive Director elected
the Shares Alternative, shares werepurchased on-market with funds loanedby the Company to the trustee of the ANZ
Employee Share Trust (ANZEST), and placedin trust under ANZEST. The share purchases
occurred on 27 October 2005, which was
the first full day after the Scheme wasdiscontinued when shares could bepurchased in compliance with theCompany’s share trading policy.

obsolete references to the Corporations
Law are being deleted;

ITEM 6 CHANGES TO NON-EXECUTIVE DIRECTORS’ RETIREMENT SCHEME
The remuneration of all of the present Non-executive Directors of ANZ during the last financial year consisted of 4 elements:
Base Fees, which are intended to reflect the time involved in carrying out Board work and thedegree of responsibility involved.

The aggregate of these 3 items for all
Non-executive Directors in any year must
not exceed the limit set by members underrule 10.2 of the Company’s Constitution.
This limit was last set at the Annual
General Meeting in 2002 at A$2,500,000.

Committee Fees, which compensate Directors for work done on Board Committees, either as
Committee Chair or Committee Member, or on associated entity boards.

If members approve the changes to the
Directors’ Retirement Scheme, ANZEST
will hold the shares on trust until theNon-executive Director retires. The Director
will not be able to deal in any of the shares
until their retirement date, but will beentitled to receive dividends on the shares(including the dividend payable on
16 December 2005) and to direct the exerciseof the voting rights attaching to the shares.

Superannuation contributions, being 9% of base fee up to the maximum contributions base.
Directors who have reached their superannuation reasonable benefits limit may elect to receive
equivalent cash payments in lieu of superannuation contributions.
Retirement Benefits, which accrue under the Directors’ Retirement Scheme and are payable toNon-executive Directors at the time of their retirement from the Board.

Under the Company’s Constitution,
retirement benefits are not included within
the Non-executive Director fee cap limit.

The lump sum retirement benefit payable where a Non-executive Director has held office for
8 years or more is equal to the total remuneration (excluding retirement benefit accrual) of theNon-executive Director in respect of the 3 years immediately preceding the Non-executive Director
ceasing to be a Director, subject to that sum not exceeding the amount the Company may lawfully
pay. For periods of less than 8 years, a proportionate part of such remuneration is payable.

In addition, Directors are reimbursed for
expenses incurred in carrying out their duties.

of all current Non-executive Directors under
the Scheme have been “frozen” as at
30 September 2005 and “preserved” in themanner outlined below, subject to member
approval, until each such Director retires.

(Full details of Non-executive Directors’
remuneration for the year ended
30 September 2005 are set out in the
Remuneration Report.)

All current Non-executive Directors of
the Company will be affected bythese arrangements.

It is now widely recognised that paymentof retirement benefits to Non-executive
Directors is not in line with best practicestandards of corporate governance(see ASX Corporate Governance Council,
Principles of Good Corporate Governanceand Best Practice Recommendations,Box 9.3).
Accordingly, as foreshadowed in its 2004
Annual Report, the Board has decided asa matter of good corporate governance todiscontinue the ANZ Directors’ Retirement
Scheme with effect on and from 1 October
2005. As a result, no new Non-executive
Directors are entitled to a retirement
allowance benefit and the entitlements

5

Proposal
Under the proposed revised arrangements,
the amount that would have been payable
by the Company under the Directors’
Retirement Scheme in the event thateach Non-executive Director retired on
30 September 2005 has been calculated(accrued retirement benefits) and eachNon-executive Director has been asked toelect to receive an equivalent benefit by
way of one or a combination of thefollowing alternatives:the Cash Alternative, being a payment to
the relevant Director on retirement equal

to his or her accrued retirement benefit plus
an additional amount (equal to the amountthat would have been payable had theaccrued retirement benefit been invested inan account bearing interest at the 30 day
bank bill rate from 1 October 2005 to thedate of retirement); and/or

the Shares Alternative, being theacquisition of Company shares to thevalue of the relevant Director’s accrued
retirement benefit plus an additionalamount (equal to the interest which would
have been earned on that sum at the
30 day bank bill rate from 1 October 2005
to the date of the share acquisition, namely
27 October 2005).
Prior to the closure of the Directors’
Retirement Scheme, the Non-executive
Directors were each asked to nominate theproportion of their accrued retirement
benefit that they wished to be directed
towards each alternative (subject to therestructure being approved by members).

If member approval is not obtained for thechanges to the Directors’ Retirement Scheme:these shares will be sold on market;

the net proceeds of the sale will be repaid
to the Company;as the Company is not intended to benefit
under the ANZEST trust, where the shares
are sold at a profit, the profit will be used tomeet the trust expenses of ANZEST and, if
the shares are sold at a loss, the loss will
be borne by the Company;

any dividends paid on those shares before
they are sold (including shares issued upon
reinvestment of dividends) will be used by
ANZEST to pay trust expenses; andthe accrued retirement benefit will be
managed under the Cash Alternative (within
the limits prescribed by the Corporations Act).
Member approval
Member approval is sought for the
proposed amended Scheme, to allow
payments in excess of the statutory limit
if required and to allow the acquisitionof shares in lieu of the accrued retirement
benefit for those Non-executive Directors
who elected the Shares Alternative.
The Corporations Act regulates the
maximum amount that may be paid toa Director upon retirement from office.

In summary, the retirement payment,
together with all other amounts payable asa result of ceasing to hold office, must not,without member approval, exceed:for a Non-executive Director having
held office for less than 3 years, the total
remuneration paid to the Director during
the period they have held office; orfor a Non-executive Director who has held
office for 3 or more years, an amount equal
to the total remuneration during the last
3 years of service.
At the time the Directors’ Retirement
Scheme was closed, the accrued retirement
benefits did not exceed the limits specified
in the Corporations Act. However, there isa small possibility that the final benefit
payable to Non-executive Directors on
retirement under the proposed revised
arrangements may exceed the statutory
limit if growth in the Company’s shareprice, or bank bill interest earnings,
moves at a faster rate than increases in
Non-executive Directors’ fees. The proposed
resolution will avoid this complication.

ITEM 7 INCREASE IN NON-EXECUTIVEDIRECTORS’ FEE CAP

The amount of this increase is basedon an actuarial valuation of the Directors’
Retirement Scheme conducted by Mercer
Finance & Risk Consulting, as well as
on advice from expert remuneration
consultants PricewaterhouseCoopers.
It is also in line with the approach taken
by other Australian companies who havephased out retirement benefits – where
increases have typically ranged from
25% to 30%.
The proposed increase in the Non-executive
Directors’ fee cap of A$500,000 would takethe maximum annual aggregate amount
to A$3,000,000 – an amount which isconsidered necessary in order to:accommodate for the fee adjustment
outlined above to compensate for removalof the Directors’ Retirement Scheme (i.e.,
27.5%) – while the discontinued retirement
benefits are outside the maximum aggregate
limit, the compensating increase to fees
will fall within it;allow for annual adjustments in line withmarket movement; andallow for the addition of anotherNon-executive Director in either 2006
or early 2007.

Currently, the maximum annual aggregate
amount which may be provided asremuneration to all Non-executive Directorsof the Company for their services as Directors
is A$2,500,000, as approved by members
at the 2002 Annual General Meeting. This
amount does not include the Non-executive
Directors’ retirement benefits, as specified
in the Constitution.
The remuneration provided to eachNon-executive Director for the year ended
30 September 2005 is detailed in the
Remuneration Report which is part ofthe 2005 Concise Annual Report. The
total value of remuneration paid to all
Non-executive Directors during the last
financial year was A$2,041,974 (excluding
any retirement benefits payable).
The Company’s practice has been to bringforward a recommendation concerning theNon-executive Directors’ fee cap every fouror five years. However, the discontinuanceof the Directors’ Retirement Scheme
necessitates bringing the matter forward
to this year’s Annual General Meeting.
After consideration of advice from external
remuneration consultants, and having
reviewed the approach taken by othercompanies who have discontinued
Non-executive Directors’ retirement benefits,
the Board believes that to compensate
Non-executive Directors for the removal of
the retirement benefit, which is a contractual
benefit, it is appropriate for a fee increaseof 27.5% to be applied to all Non-executive
Directors’ fees effective from 1 October 2005.

It is critical that the Company has thecapacity to pay adequate fees toNon-executive Directors in order to attract
and retain Directors of the highest calibre.
The proposed increase will provide theCompany the flexibility to ensure thata top calibre Board of appropriate size
continues to serve the Company and its
members effectively.

VOTING EXCLUSION STATEMENTThe Company will disregard any votes caston Items 6 and 7 by a Director or any
associate of a Director unless:

the vote is cast as proxy for a person who
is entitled to vote, in accordance with thedirections on the proxy form specifying how
the proxy is to vote; orthe vote is cast by the Chairman of the
Meeting as proxy for a person who isentitled to vote, in accordance with adirection on the proxy form to vote as theproxy decides.

UNDIRECTED PROXIESThe Chairman of the Meeting intends tovote undirected proxies in favour of all
items of business, including Items 6 and
7 where members have authorised the
Chairman of the Meeting to do so.

anz notice of 2005 annual general meeting6