In the interests of the environment, we have printed these Financial Statements on recycled paper.
Directors' report
The following information is provided in conformity with Section 270 of the Companies (Victoria) Code.
Directors
The Board includes two directors with executive responsibilities within ANZ Group who have extensive banking experience. The thirteen non-executive directors have a diversity of community and business experience. Set out on pages 28 and 29 of the Annual Report are statements which provide particulars of the qualifications, broad experience and special responsibilities of each director.
Activities
The principal activities of the companies in the Group during the year were general trading and savings banking, hire purchase and general finance, life insurance, property development, mortgage and instalment lending, leasing, international and investment banking, investment and portfolio management and advisory services, nominee and custodian services, travel services, stockbroking, and executor and trustee services. At 30 September 1989 the Company and its subsidiaries had 2,080 points of representation.
Profit
Consolidated operating profit after tax and before abnormal items for the year excluding extraordinary items was $721.7 million. Consolidated operating profit after tax excluding extraordinary items was $518.0 million. Consolidated operating profit after tax and extraordinary items was $350.7 million. More details are contained in the Group Chief Executive's report on pages  10 and 27 of the Annual Report.
Dividends
The directors propose payment of a fully franked final dividend of 22 cents per share, amounting to $196.0 million to be declared on 15 January 1990 and to be paid on 5 February 1990. Since the end of the previous year the following fully franked dividends have been paid:
The final dividend paid on 10 February 1989 and the special interim paid on 21 April 1989 were detailed in the directors' report dated 12 December 1988. Neither the interim dividend paid on 14 July 1989 nor the current proposed dividend have been mentioned in previous directors' reports.
Review of operations
A review of the operations of the Group during the financial year and the results of those operations is contained in the Chairman's message and Group Chief Executive's report or in the Group accounts.
State of affairs
There was no significant change in the state of affairs of the Group that occurred during the financial year not otherwise disclosed in the Chairman's message, the Group Chief Executive's report or in the Group accounts. Events since the end of the financial year No item, transaction or event of a material and unusual nature has arisen between 30 September 1989 and the date of this report that has significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years.
Future developments
Likely developments in the operations of the Group in subsequent financial years are contained in the Chairman's message, and the Group Chief Executive's report on pages 10 to 27 of the Annual Report. In the opinion of the directors disclosure of any further information would be prejudicial to the Group's interests.
Shareholdings
The directors' shareholding interests, beneficial and non¬ beneficial, in the share capital of the Company are detailed on page 47. The directors are not aware of any single beneficial interest of ten per cent or more in the share capital of the Company. Directors' interests in contracts Since 1 January 1984 no director has declared any interest in a contract or proposed contract with the Company in accordance with Section 228(1) of the Companies (Victoria) Code. The following directors have declared pursuant to Section 228(4) of the Code that they are to be regarded as interested in any contract that may be made with the Company by virtue of their directorships or memberships of the companies and organisations listed:
Mr. M.D. Bridgland
Australia and New Zealand Banking Group Limited (Group) ICI Australia Limited Jennings Group Limited (Group)
Mr. W.J. Bailey
Australia and New Zealand Banking Group Limited (Group) Dalgety Farmers Limited Enterprise Australia Limited Institute of Public Affairs Limited Nepean International Travel Pty. Ltd. The Australian Opera Victorian Health Promotion Foundation Sir Roderick Carnegie Australia and New Zealand Banking Group Limited (Group) Cats & Co. Pty. Ltd. (Group) Commonwealth Scientific & Industrial Research Organisation Hudson Conway Limited (Group) Kildrummie Pastoral Company Pty. Ltd. Kildrummie Pty. Ltd. Pacific Edge Holdings Pty. Ltd. Torch Computers Limited Mr. J.C. Dahlsen Australia and New Zealand Banking Group Limited (Group) CEC Services Pty. Ltd. Corrs Dahlsen Properties Pty. Limited Institute of Public Affairs Ltd J.C. Dahlsen (Acceptance) Pty. Limited J.C. Dahlsen Pty. Limited (Group) J.C. Dahlsen (Investment) Pty. Limited

Share options
Details of share options are set out in note 21 to the accounts. Directors' benefits No director has, since the end of the previous financial year, received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments received, or due and receivable by directors shown in the Group accounts or the fixed salaries of directors who are full¬ time employees of the Company or its subsidiaries), by reason of a contract made by the Company, or a related corporation, with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest with the exception of (i) retirement benefits pursuant to agreements of the type referred to in Article 79(b) which have been entered into since the end of the previous financial year between the Company and Mr. R.K. Gosper and Sir Ronald Trotter, and (ii) benefits that may be deemed to have arisen because legal fees have been paid to Corrs of which Mr. J.C. Dahlsen is a partner, and to Bell Gully Buddle Weir, in which Mr. L.M. Papps who retired on 15th October, 1989 is a consultant, insurance business has been placed through Marsh & McLennan Pty. Limited, of which Mr. D.C.L. Gibbs is a director, and management service fees have been paid to Jon & Associates Pty. Ltd. and Management Frontiers Pty. Ltd. of which companies Dr. B.W. Scott is a director, and (iii) benefits that may have arisen as a consequence of the subscription by certain directors, under the directors' share and option purchase scheme, for scheme shares and options to take up unissued shares or the exercise of options issued under the scheme. Signed at Melbourne for and on behalf of the board of directors in accordance with a resolution of the directors this 7th day of December 1989. S
6
7
Notes to the accounts
1: Bases of accounting
(c) Foreign currency
(a) Consolidation
(d) Goodwill
(b) Life insurance business
(e) Trading securities
The financial statements have been prepared in accordance with the historical cost convention except where otherwise stated. All amounts are expressed in Australian dollars unless otherwise stated. Profits and losses of overseas branches and subsidiaries are translated at average exchange rates for the year. Assets and liabilities of overseas branches and subsidiaries are translated at the mid-point rates of exchange ruling at balance date. The net translation difference arising from the conversion of overseas branch capital positions and investment in overseas subsidiaries, after allowing for those positions hedged by foreign exchange contracts and related currency borrowings, is transferred to the foreign currency translation reserve. Overseas branches and subsidiaries engaged in banking Under section 288 of the Companies (Victoria) Code (the Code) accounts prepared by banking corporations in accordance with the Banking Act are deemed to comply with the accounts provisions of the Code. Australia and New Zealand Banking Group Limited and Australia and New Zealand Savings Bank Limited are banking corporations under section 288 of the Code. For Group accounts purposes, ANZ Banking Group (New Zealand) Limited, ANZ Savings Bank (New Zealand) Limited, Post Office Bank Limited, Australia and New Zealand Banking Group (PNG) Limited, Australia and New Zealand Banking Group (Channel Islands) Limited, ANZ Bank Canada, ANZ Bank (Vanuatu) Limited and ANZ Grindlays Bank ple are also considered to be banking corporations by virtue of their status as banks in their respective countries of incorporation. The financial statements comply with the accounts provisions operations have loans and deposits and borrowings in their local currencies and in other major currencies. The Holding Company also has loans and deposits and borrowings in Australia in currencies other than Australian dollars. Assets and liabilities denominated in foreign currencies are converted into reporting currencies at the rates of exchange ruling at balance date. It is the Group's general policy to maintain a matched position in foreign currencies and as a consequence there area no material foreign currency exposures. The accounts depart from certain requirements of the of the Banking Act and Australian Accounting Standards (AAS), and to the extent applicable to a banking group, the accounts provisions of the Companies (Victoria) Code, including Schedule 7 of the Companies (Victoria) Regulations, and Approved Accounting Standards (ASRB). Approved Accounting Standard ASRB 1012 'Foreign Currency Translation', principally in respect of disclosure, on the basis that the relevant provisions of the standard are inapplicable to a banking corporation. The Group accounts are a consolidation of the accounts of the Holding Company and all subsidiaries. Subsidiary companies are defined as those in which the Holding Company holds or controls more than 50% of the issued ordinary share capital. Where subsidiary companies have been sold or acquired during the year, their operating results have been included to the date of disposal or from the date of acquisition. Where the Holding Company holds shares or voting interests between 20% and 50% of the issued ordinary share capital of a company that company is classified as an associated company. The Group does not prepare supplementary equity accounts for its investment in associated companies on the grounds that the effect is immaterial to the Group's accounts. All inter-company balances and transactions have been eliminated. Shares in subsidiary companies are valued on acquisition at the Group's interest in the fair market value of the net assets of the subsidiary company at the date of acquisition; any difference between the fair value of net assets and cost is written off through the profit and loss statement as an extraordinary item in the year of acquisition, together with, in the consolidated profit and loss statement, the equivalent amount being attributable to goodwill on consolidation. This policy has been applied consistently with the treatment of such items in past years and represents a departure from Approved Accounting Standard ASRB 1013 'Accounting for Goodwill', but is considered to be an appropriate and prudent policy for a banking group. The policy is consistent with capital adequacy requirements endorsed by the Group of Ten central bank Governors and adopted by the Reserve Bank of Australia which require goodwill to be deducted from capital for prudential supervision purposes. Under section 288 of the Code accounts prepared by banking corporations in accordance with the Banking Act are deemed to comply with the accounts provisions of the Code. Goodwill written off during the current year amounted to $235.7million. The Group conducts life insurance business through its subsidiary, ANZ Life Assurance Co. Limited (ANZ Life). Included in the Group's accounts are the financial statements of the shareholders' interest in ANZ Life, the shareholders' proportion of the declared profits of ANZ Life's statutory life funds, and the net movement in the present value of future surpluses actuarially assessed to emerge from these funds after having full regard to the entitlements of policyholders. These amounts total $17.2 million (1988: $19.6 million) and have been credited to general reserve within the consolidated accounts as they are not fully available for distribution due to the requirements and restrictions of the Life Insurance Act 1945 and statutory accounting practices. The assets of these statutory funds are also subject to the provisions of the Life Insurance Act 1945 and do not form part of the assets to which the Group is entitled and are therefore excluded from consolidation. Securities held for trading purposes are recorded at market value. Unrealised gains and losses on revaluation are taken to the profit and loss account. This is a departure from the historical cost convention but is considered to be a better reflection of the results arising from trading in highly liquid financial assets. S
(f)
Investment securities
Securities held for investment purposes are recorded at cost or at cost adjusted for premium or discount amortisation. Interest income is accrued and premiums and discounts are capitalised and amortised from date of purchase to maturity. Changes in market values of the securities are not taken into account unless there is considered to be a permanent diminution in value.
(g) | Net loans and advances
Net loans and advances includes all forms of lending and direct finance provided to customers such as bank overdrafts, term loans, lease finance, hire purchase finance and commercial bills discounted. Overdrafts and term loans are carried at principal balances outstanding. Interest on these accounts is accounted for on an accruals basis. Lease finance is accounted for using the finance method whereby the lease receivable represents the net present value of total receivables discounted using the implicit interest rate. Interest income is progressively recognised over the life of the lease so as to reflect the implicit yield. Where leases are structured as leveraged leases and such transactions are entered into as an equity participant, the Group's participation is recorded as an investment net of non¬ recourse long term debt. Income from these investments is recognised on an actuarial basis over the life of the lease. Hire purchase finance is accounted for using the finance method, whereby the total hire purchase receivable is offset by income yet to mature which is amortised over the term of finance on an actuarial basis. During the year ended 30 September 1989, Esanda Finance Corporation Limited changed its accounting policy in respect of the actuarial method of bringing interest to account. As a result, $28.3 million is included as an abnormal item in interest received ($17.3 million after tax). Commercial bills discounted are accounted for at face value less unamortised discounts. Commercial bills accepted but not held in portfolio are accounted for and disclosed as a liability with a corresponding contra asset. All loans are subject to continuous scrutiny and graded according to the level of credit risk. Higher risk accounts are designated unproductive. Interest on unproductive accounts is not taken to the profit and loss account.
(h)  Redeemable preference share finance
Customer financing through redeemable preference shares is included within net loans and advances. This represents a change from prior years when they were included within investment securities. Dividends received on redeemable preference shares are taken to account as part of interest income.
Bad and doubtful debts
(i).
Specific provisions are maintained to cover identified doubtfully debts whilst general provisions are maintained to provide cover for unidentified future losses which are inherent in any finance facility. All known bad debts are written off in the year in which they are identified. Provisions for doubtful debts are deducted from loans and advances in the balance sheet. Operating subsidiaries within the Group maintain appropriate provisions for doubtful debts. During the year ended 30 September 1989 an abnormal general provision charge of $221.0 million (Holding Company $192.0 million) was made to provide additional cover for exposure to debt rescheduling countries. No tax applicable.
Trust business
(i).
The Holding Company and some of its subsidiaries act as trustee and/or manager for a number of investment funds and trusts including retirement funds, mortgage funds, approved deposit funds, and equity and property unit trusts. The value of funds under management by the Group exceeds $12 billion (1988: $8 billion). The assets of these funds and trusts are not included in the accounts. Where the Holding Company or subsidiaries as trustee incur liabilities in respect of these operations, a right of indemnity exists against the assets of the applicable funds or trusts, and as these assets are sufficient to cover liabilities, the liabilities are not included in the accounts. Commissions and fees earned in respect of the Group's trust activities are included in the profit and loss account.
(k)   Land held for resale
Land held for resale comprises both properties held for development and sale, and properties acquired through security enforcement. These are recorded at the lower of cost or estimated present realisable value. Development costs, interest and holding costs are capitalised in respect of major development ventures to the extent that they are considered to be recoverable.
Premises and equipment
(1)
Premises and equipment (including computer equipment) are carried at cost or at valuation. Any surplus on revaluation is credited directly to the asset revaluation reserve. Potential capital gains tax arising from revaluations has not been taken into account in determining the revalued amounts. Any profit or loss on the disposal of premises is determined as the difference between the carrying amount of the assets at the time of disposal and the proceeds of disposal, and is included in the result of the Group in the year of disposal as an extraordinary item. Profit or loss on the sale of furniture and equipment is included as part of operating profit. Assets other than freehold land are depreciated at rates based upon their expected useful economic lives, using the straight line method. Leasehold improvements are amortised on a straight line basis over the remaining period of each lease.
(m)  Income tax
The Group adopts the liability method of tax effect accounting whereby income tax expense is calculated based on accounting profit adjusted for permanent differences. General provisions for doubtful debts are treated as permanent differences. Future tax benefits and deferred tax liabilities relating to timing differences are carried forward at tax rates applicable to future periods. Future tax benefits relating to tax losses are only carried forward where realisation of the benefit is considered virtually certain. No provision has been made for overseas withholding tax and Australian income tax on earnings that are expected to be retained by overseas subsidiaries to finance their ongoing business.
(n)・Off-balance sheet transactions
The Group enters into a significant volume of off-balance sheet transactions. These include foreign exchange contracts, forward rate agreements, interest rate and currency swaps, interest rate futures and options. Off-balance sheet transactions taken up as hedges against underlying asset/liability exposures are accounted for on the same basis as the underlying exposures. Off-balance sheet transactions taken up as part of trading activities are recorded at market value. All gains and losses, whether realised or unrealised, are taken to the profit and loss account.
(o) Superannuation commitments
The Group has a number of superannuation schemes which provide either defined or accumulated benefits for employees and their dependants on retirement or death. These schemes cover the majority of Group employees throughout the world. The benefits under the schemes are provided from contributions by employee members and the Group, and income from assets of the schemes. The members' contributions are at variable rates while Group contributions in respect of the defined benefits schemes are made at levels necessary to ensure that these schemes are maintained with sufficient assets to meet their liabilities and in respect of the accumulation schemes are at fixed rates. The rate of Group contributions is determined by actuarial valuations which are carried out at regular intervals not exceeding three years. Any deficiencies arising from the actuarial valuations have been provided for in the Group accounts. The assets of the schemes are not included in these accounts (refer note 29).
(p)   Comparative figures
Where necessary amounts shown for the previous year have been reclassified to facilitate comparison.
(q)   Rounding of amounts
The Holding Company is a company of the kind referred to in Regulation 58(6) of the Companies (Victoria) Regulations and in a National Companies and Securities Commission (NCSC) class order of 30 October 1986. Consequently amounts in the accounts, where appropriate, have been rounded to the nearest hundred thousand dollars.
Group exposure including trade finance and interbank lending to countries subject to debt rescheduling arrangements is set out below. During the year an abnormal charge of $221.0 million was made to profit to increase provisions on loans to rescheduling countries and net exposure now approximates secondary market values. The amounts shown are Australian dollar conversions of predominantly US dollar denominated assets and represent a net exposure of 0.6% (1988: 1.2%) of total Group assets and 13.2% (1988: 22.2%) of shareholders' funds. Of the total exposure over 90% represents lending to Governments, banks and Government entities and no individual country's exposure exceeds 0.5% of group total assets. Where considered appropriate specific and general provisions have been made and these approximate 60% (1988: 37%) of the exposure after a notional allowance for tax relief where applicable. In accordance with Group accounting policy general provisions for doubtful debts are not tax effected. Actual provision cover varies from country to country depending on risk assessment.
recognised as assets because recovery is not virtually certain. These benefits, which could amount to $5.9m (1988: $1.6m) will only be obtained if the relevant companies derive future assessable income of a nature and amount sufficient to enable the benefit of the i) taxation deductions to be realised; the relevant companies continue to comply with the conditions for deductibility imposed by law; and ii) there are no changes in taxation legislation adversely affecting the benefit of the taxation deductions. iii) Capital losses have previously been incurred in a subsidiary company. Potential future income tax benefits of $5.1m (1988: $6.9m)
(1988: $1,434.7m) and the current value of the Holding Company's freehold and leasehold land and buildings is $79.2m (1988: $67.5m). The excess of current value over book value for the Group is $535.4m (1988: $510.5m) and for the Holding Company is $11.2m (1988: $9.0m). This excess of current value over book value constitutes tier 2 capital as defined by the Reserve Bank of Australia for capital adequacy purposes. 16
18
During the financial year 175,000 options to purchase ordinary shares of $1 each in the Company at an exercise price of $5.45 per share were granted to directors in terms of the 'directors' share and option purchase scheme' approved by shareholders. These options expire on the earlier of 28 February 1994 or 90 days after cessation of a director's term of office. During the financial year 4,354,010 ordinary shares of $1 each were issued by virtue of the exercise of options issued to directors and other parties. Unissued ordinary shares of $1 each under option at 7 December 1989 are as follows directors - 490,000 shares at an exercise price of $3.74 per share and 175,000 shares at an exercise price of $5.45 per share with (i) expiration dates as defined above; and other parties - 29,429,865 shares at an exercise price of $4.59 per share exercisable up to and including 5 August 1992. (ii) Holders of options to purchase shares in the company have no right, by virtue of those options, to participate in any share issue of any other corporation.

24: Exchange rates
The exchange rates used in the translation of the results and the assets and liabilities of major overseas branches and subsidiaries are as follows.

25: Segment analysis
The following analysis shows segment results and assets based on geographical locations and industry segments. The Group's principal operations are in its domestic markets of Australia and New Zealand. The Group also has significant international operations, being represented in over 40 countries worldwide. Although some of these international operations have a domestic base or origin, the Group's international strategy revolves around a network and accordingly segmentation of results reflects that strategy. Further geographic segmentation of domicile and risk is not considered appropriate to the presentation of the Group's results. Segment results are stated before extraordinary items.
21
P I N A N C I A I .  S T A T E M E N T S  F U R  1989
AUSTRALIA AND NEW ZEALAND BANKING GROUP AND ITS SUBSIDIARIES
F I N A N C I A L E S T A T E M E N T S  F O R  1989
AUSTRALIARAND NEW ZEALAND BANKING GROUP AND ITS SUBSIDIARIES
* Audited by overseas Klynveld Peat Marwick Goerdeler firms +Audited by firms other than members of Klynveld Peat Marwick Goerdeler !  Debts of these subsidiaries are guaranteed by the Holding Company in terms of National Companies and Securities Commission (NCSC) class orders dated 22 April 1986 and 9 August 1988 relieving wholty owned subsidiaries from compliance exith certain sections of the Companies Code relating to the preparation of audited accounts # Amounts less than $50,000 ^Company subsequently sold * Consideration was a net reinbursment of the fair value of the company's deficiency at the date of acquisition
28: Associated companies
Associated companies have 30 September financial years unless otherwise stated.

28: Associated companies (continued)

# Amounts less than $50,000 * The Group holds 27% of voting rights year ended 30 June 2 year ended 31 March s year ended 31 December 542 year ended 31 July s year ended 31 January
29: Superannuation commitments
A total of 72 pension schemes have been established in the Group worldwide. The major schemes with assets in excess of $20m are
i) All funds provide pension benefits other than the ANZ Australian Staff Superannuation scheme which provides for lump sum benefits. ii) The liabilities of all pension funds are covered by the assets in the funds or by specific provisions created in the Group. ii) The Group is obliged to contribute to the pension funds as a consequence of legislation or trust deeds. iv)  Balance of cost - the Group's contribution is assessed by the actuary after taking account of members' contributions and the value of the scheme's assets. Legal enforceability is dependent on the terms of the legislation and trust deeds.
Guaranteed the depositors' balances with Australia and New Zealand Savings Bank Limited; i) Guaranteed payment of certificates of deposit, bearer deposit notes and bankers' acceptances issued by ANZ Bank Canada; ii) Guaranteed payment on maturity of the principal and accrued interest of commercial paper notes issued by ANZ (Delaware)Ine; iii) Guaranteed the debts of certain Australian wholly-owned subsidiaries specified in Note 27 in terms of National iv). Companies and Securities Commission (NCSC) class orders dated 22 April 1986 and 9 August 1988 relieving wholly-owned subsidiaries from compliance with certain sections of the Companies Code relating to accounts; and v) A contingent tax liability in respect of amounts received for share options issued during 1987 and credited to the capital reserve should the option holder decide not to exercise the option by the due date of 5 August 1992. ANZ Banking Group (New Zealand) Ltd has guaranteed the depositors' balance with ANZ Savings Bank (New Zealand) Limited; and i) guaranteed the liabilities of Post Office Bank to 30 June 1992. ii) Litigation There are outstanding court proceedings, claims and possible claims against companies in the Group, the aggregate amount of which cannot be readily quantified. Where considered appropriate legal advice has been obtained and in the light of such advice provisions as deemed necessary have been made. Off-balance sheet transactions: The Group is an active market participant in off-balance sheet financial instruments, principally forward exchange contracts, interest rate and currency swaps, forward rate agreements, financial futures and options traded in the financial markets throughout the world. These instruments are used by the Group to facilitate prudent and strategic management of the interest rate and currency risks inherent in the Group's banking activities; i) ii) provide financial services as an intermediary to enable customers to modify, transfer or reduce their interest rate or foreign exchange risks; and enable arbitrage between the various financial markets of profitable trading opportunities. iii) Management of these instruments is integrated into the Group's prudential risk practices. In particular, assessment of any credit risk is included in the evaluation of the exposure of the Group to customers. Adequate provision has been made for any unrealised losses and it is not envisaged that any irrecoverable liability will arise from the settlement of these types of transactions.
32: Assets and liabilities of non-banking corporations
In line with normal banking practice the consolidated balance sheet does not distinguish between current and non-current assets and liabilities. The following assets and liabilities of non-prescribed subsidiaries within the Group are

33: Financing arrangements

This note details financing arrangements of subsidiary borrowing corporations and subsidiaries registered under the Financial Corporations Act (Australia) 1974.

34: Related party disclosures

During the year there have been transactions between the Holding Company and its subsidiaries and related entities. Loans and deposits were made and interest received and paid at normal commercial rates. Management fees and rents were charged for the provision of accounting and administrative assistance and accommodation based on the resources provided. Balances payable and receivable by the Holding Company are disclosed elsewhere in these financial statements.

36: Remuneration of directors
Remuneration includes salaries, bonuses and other benefits. The number of directors of the Holding Company whose total
AUSTERALIA AND NEWSZRATIAND BANKINGEGROUP AND ITSES UBSIDIARIES
Holding Company 1989 1988
37: Remuneration of executives

38: Retirement benefits
Amounts paid in connection with the retirement of persons from the office of director and principal executive officer of group companies ($$) 1.0 0.9 The directors believe that the provision of full particulars would be unreasonable
Directors' statement
Statement by the Directors
In the opinion of the directors of Australia and New Zealand Banking Group Limited the accompanying accounts of the Company and its subsidiaries are properly drawn up in accordance with the provisions of the Companies (Victoria) Code in the manner authorised for a prescribed corporation being a banking corporation and on this basis: the accompanying profit and loss statements are drawn (i) up so as to give a true and fair view of the profit of the Company and its subsidiaries for the year ended 30 September 1989; (ii) the accompanying balance sheets are drawn up so as to give a true and fair view of the state of affairs of the Company and its subsidiaries as at 30 September 1989; and (iii) are in accordance with applicable Approved Accounting Standards and with Australian Accounting Standards apart from the departures referred to in note 1 in respect of banking corporations for the reasons stated therein. It is also the opinion of the directors that at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due and be able to meet any obligations or liabilities that may arise from any guarantees or undertakings given to certain subsidiaries specified in note 27 in terms of National Companies and Securites Commission class orders dated 22 April 1986 and 9 August 1988. Dated at Melbourne this 7th day of December 1989. Signed in accordance with a resolution of the directors, M.D. Bridgland Chairman W.J. Bailey Deputy Chairman and Group Chief Executive
Auditors' report
To the Members of Australia and New Zealand Banking Group Limited We have audited the accounts set out on pages 6 to 35 in accordance with Australian Auditing Standards. In our opinion the accounts are properly drawn up in accordance with the provisions of the Companies (Victoria) Code in the manner authorised for a prescribed corporation being a banking corporation, and on this basis: (i) give a true and fair view of the state of affairs of the Company and of the Group as at 30 September 1989 and the profit of the Company and the Group for the year ended on that date so far as they concern members of the Company and the other matters required by Section 269 of that Code to be dealt with in the accounts and in Group accounts; and (ii) are in accordance with applicable Approved Accounting Standards and with Australian Accounting Standards apart from the departures referred to in note 1 in respect of banking corporations with which we agree for the reasons therein stated. The names of the subsidiaries of which we have not acted as auditors are identified in note 27. We have examined their accounts and the auditors' reports thereon. Peat Marwick Hungerfords Chartered Accountants Melbourne 7 December 1989
Supplementary information - capital adequacy
In August 1988 the Reserve Bank of Australia (RBA) introduced a risk-based capital assessment framework for Australian banks based on internationally accepted capital measurement standards, the objectives of which are to introduce competitive equality and comparability for banks operating internationally, and to strengthen the stability of the international banking system in general. The risk-based approach to measurement of capital standards assigns various categories of risk to balance sheet assets and to off-balance sheet exposures. The five categories of risk-weighting ( 0%, 10%, 20%, 50%, 100%) are determined according to the nature of the counterparty and, to a lesser extent, according to the relative liquidity of the assets concerned. Off-balance sheet items are converted into credit equivalent amounts, using appropriate credit conversion factors, before being risk-weighted according to counterparty. Under the RBA guidelines, banks must maintain a ratio of qualifying capital to risk-weighted assets of at least 8 percent. The ANZ Group achieved a ratio of 8.5 percent at 30 September 1988, and has been required to preserve a ratio in excess of the minimum standard since then. Qualifying capital is comprised of two discrete tiers. Tier 1 capital must constitute at least 50% of the minimum capital requirement and the contribution made to the capital adequacy ratio by tier 2 capital cannot exceed that made by tier 1. The components of the Group's qualifying capital at 30 September 1989 are presented below, with details of risk-weighted

Supplementary information - additional financial data
Australia and New Zealand Banking Group is in the process of filing a registration statement with the United States Securities and Exchange Commission (SEC). The filing contains additional financial statistical disclosures, extracts of which are available from The Group Secretary upon request at ANZ Banking Group Limited, 13th floor, 55 Collins Street, Melbourne, Victoria Australia 3000.
Supplementary information - analysis of shareholdings

1: Twenty largest shareholders
As at 17 November 1989 the twenty largest shareholders held 384,083,066 shares which is equal to 41.9 per cent of the total issued capital of 916,375,632 shares of $1 each.

2: Average size of shareholdings
As at 17 November 1989 the average size of shareholdings was 10,995 (1988: 11,559).

5: Voting rights of shareholders
The articles provide for: i)  on show of hands: 1-vote ii) on a poll: 1 vote each fully-paid and 50 cent paid share held; and I vote for every 10, 10 cent paid shares issued pursuant to the company's senior officers' share purchase scheme and the directors' share and option purchase scheme.
6: Holders of non-marketable parcels
As at 17 November 1989, shareholdings of less than a marketable parcel (1 share to 99 shares) totalled 1,880 (1988: 1,454), which is equal to 2.3% of the total number of shareholdings.
7: Employee shareholder information
As at 17 November 1989 participants in the employee and senior officers' share purchase schemes held 2.2% of the issued share capital.
8: Directors' shareholding interests at 7 December 1989

Ordinary shares of $1.00 each paid as to 10 cents only issued pursuant to the directors' share and option purchase scheme. (i) Partly paid ordinary shares of $1.00 each paid as to 50 cents with $1.90 payable on 10 September, 1990 (being 50 cents (ii) capital and $1.40 premium) Options issued pursuant to the directors' share and option purchase scheme to take up shares in the Company during the (iii). period of 5 years after issue at market prices fixed as at the time of issue less 1 cent which amount of 1 cent was paid on issue of the option. s 1975 Australia and New Zealand Banking Group Limited