UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F

Commission File Number: 1-10167

WESTPAC BANKING CORPORATION
Australian Business Number 33 007 457 141
(Exact name of Registrant as specified in its charter)

New South Wales, Australia
(Jurisdiction of incorporation or organization)

275 Kent Street, Sydney, NSW 2000, Australia
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:  None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: 4.625% Subordinated Notes Due 2018

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Ordinary shares                                                                         1,865,087,604 fully paid

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x    No o

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o    No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x    No o

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.

Large accelerated filer x       Accelerated Filer o       Non-accelerated filer o

Indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 o              Item 18 x

If this is an annual report, indicate by check mark whether the registrant is a shell company.

Yes o    No x

2007 Annual Report

Contents

In this Annual Report references to ‘Westpac’, ‘we’, ‘us’ and ‘our’ are to Westpac Banking Corporation ABN 33 007 457 141. References to ‘Westpac’, ‘Group’, ‘we’, ‘us’ and ‘our’ under all sections of this report include Westpac Banking Corporation and its subsidiaries unless they clearly mean just Westpac Banking Corporation.

Information contained in or otherwise accessible though the web sites mentioned in this Annual Report does not form part of the report unless we specifically state that the information is incorporated thereby forming part of the report. All references in these reports to web sites are inactive textual references and are for information only.

1

Form 20-F cross-reference index

(for the purpose of filing with the United States Securities and Exchange Commission)

2

Guide 3 cross-reference index

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Section 1

Information on Westpac

Corporate governance

Directors’ report

Directors and Group Executives

5

Disclosure regarding forward-looking statements

This Annual Report contains statements that constitute ‘forward-looking statements’ within the meaning of section 21E of the US Securities Exchange Act of 1934. The US Private Securities Litigation Reform Act of 1995 provides a ‘safe harbor’ for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as the information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.

Forward-looking statements appear in a number of places in this Annual Report and include statements regarding our intent, belief or current expectations with respect to our business and operations, market conditions, results of operations and financial condition, including, without limitation, future loan loss provisions and financial support to certain borrowers. We use words such as ‘may’, ‘expect’, ‘intend’, ‘plan’, ‘estimate’, ‘anticipate’, ‘believe’, ‘probability’, ‘risk’, or other similar words to identify forward-looking statements. These statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from the plans, objectives, expectations, estimates and intentions described in this Annual Report as anticipated, believed, estimated, expected or intended.

The factors that may impact on forward-looking statements made by us include:

•      inflation, interest rate, exchange rate, market and monetary fluctuations;

•      market liquidity and investor confidence;

•      the effect of, and changes in, laws, regulations, taxation or accounting standards or practices and government policy;

•      changes in consumer spending, saving and borrowing habits in Australia, New Zealand and in other countries in which we conduct our operations;

•      the effects of competition in the geographic and business areas in which we conduct operations;

•      the ability to maintain or to increase market share and control expenses;

•      the timely development of and acceptance of new products and services and the perceived overall value of these products and services by users;

•      technological changes;

•      demographic changes and changes in political, social or economic conditions in any of the major markets in which we operate; and

•      various other factors beyond our control.

The above list is not exhaustive. For certain other factors that may impact on forward-looking statements made by us, refer to the section on ‘Risk factors’ in this Annual Report. When relying on forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and events.

We are under no obligation, and do not intend, to update any forward-looking statements contained in this Annual Report, whether as a result of new information, future events or otherwise, after the date of this Annual Report.

Financial information

We adopted the requirements of the Australian Equivalents to International Reporting Standards (A-IFRS) for the first time in preparing financial statements for the year ended 30 September 2006. Westpac applied the transition rules upon first time adoption of A-IFRS. Although the 2005 financial information was restated under A-IFRS, exemptions were available from restating financial instruments and insurance related assets and liabilities. Financial instruments and insurance related assets and liabilities were accounted for under A-IFRS from 2006. The financial statements and other financial information for the years ended 30 September 2007, 2006 and 2005 included elsewhere in this Annual Report, unless otherwise indicated, have been prepared and presented on this basis.

Previously published financial statements for our financial year ended 30 September 2005, as well as all prior financial periods, were prepared in accordance with accounting principles generally accepted in Australia at the time those financial statements were prepared (AGAAP). A-IFRS differs in certain material respects from AGAAP and, accordingly, financial statements for our financial years ended 30 September 2007, 2006 and 2005 prepared in accordance with A-IFRS are not comparable to the financial statements for 2005 and prior years prepared in accordance with AGAAP.

Under applicable United States (US) disclosure requirements, we are required to include in this Annual Report certain financial and operating data covering a period of five years. Due to the transition to A-IFRS, such information prepared in accordance with A-IFRS is only available for the financial years ended 30 September 2007, 2006 and 2005. Accordingly, we have included in a separate section of this Annual Report under the caption ‘Additional financial information’ required data as of and for the financial years ended 30 September 2005, 2004 and 2003 derived from our previously published financial statements prepared in accordance with AGAAP. Because this information was prepared in accordance with AGAAP, it is not comparable to such information derived from our financial statements prepared in accordance with A-IFRS. For a more complete understanding of the financial and operating data prepared in accordance with AGAAP, see our Annual Report for the financial year ended 30 September 2005, a copy of which is available on our web site at ‘www.westpac.com.au’ or on the web site maintained by the US Securities and Exchange Commission (SEC) at ‘www.sec.gov’.

6

Currency of presentation, exchange rates and certain definitions

‘Financial statements’ means our audited consolidated balance sheet as at 30 September 2007 and 30 September 2006 and consolidated income statement, cash flows and recognised income and expense for each of the three years ended 30 September 2007, 2006 and 2005 together with accompanying notes which are included in this Annual Report.

We publish our consolidated financial statements in Australian dollars. In this Annual Report, unless otherwise stated or the context otherwise requires, references to ‘dollar amounts’, ‘$’, ‘AUD’ or ‘A$’ are to Australian dollars, references to ‘US$’, ‘USD’ or ‘US dollars’ are to United States dollars and references to ‘NZ$’, ‘NZD’ ‘or NZ dollars’ are to New Zealand dollars. Solely for the convenience of the reader, certain Australian dollar amounts have been translated into US dollars at specified rates. These translations should not be construed as representations that the Australian dollar amounts actually represent such US dollar amounts or have been or could be converted into US dollars at the rate indicated. Unless otherwise stated, the translations of Australian dollars into US dollars have been made at the rate of A$1.00 = US$0.8855, the noon buying rate in New York City for cable transfers in Australian dollars as certified for customs purposes by the Federal Reserve Bank of New York (the ‘Noon Buying Rate’) as of 28 September 2007. Unless otherwise stated, the translation of Australian dollars into NZ dollars has been made at the rate of A$1.00 = NZ$1.1672 (2006 NZ$1.1446), being the closing spot exchange rate on 28 September 2007 used in the financial statements. Refer to ‘Exchange rates’ for information regarding the rates of exchange between the Australian dollar and the US dollar for the financial years ended 30 September 2003 to 30 September 2007 and for the period to 23 October 2007.

Our financial year ends on 30 September. As used throughout this Annual Report, the financial year ended 30 September 2007 is referred to as 2007 and other financial years are referred to in a corresponding manner.

Any discrepancies between totals and sums of components in tables contained in this Annual Report are due to rounding.

Exchange rates

For each of the years indicated, the high, low, average and year end Noon Buying Rates for Australian dollars were:

For each of the months indicated, the high and low Noon Buying Rates for Australian dollars were:

(1)   Through to 23 October 2007. On 23 October 2007, the Noon Buying Rate was A$1.00 = US$0.8943.

(2)   The average is calculated by using the average of the exchange rates on the last day of each month during the period.

(3)   The Noon Buying Rate at such date may differ from the rate used in the preparation of our consolidated financial statements at such date. Refer to Note 1(a)(v) to the financial statements.

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Information on Westpac

We are one of the four major banking organisations in Australia and, through our New Zealand operations, we are also one of the largest banking organisations in New Zealand. We provide a broad range of banking and financial services in these markets, including retail, commercial and institutional banking and wealth management services.

We were founded in 1817 and were the first bank to be established in Australia. In 1850 we were incorporated as the Bank of New South Wales by an Act of the New South Wales Parliament. In 1982 we changed our name to Westpac Banking Corporation. On 23 August 2002, we were registered as a public company limited by shares under the Australian Corporations Act 2001 (Corporations Act). Our principal office is located at 275 Kent Street, Sydney, New South Wales, 2000, Australia. Our telephone number for calls within Australia is 132 032 and our international telephone number is (+61) 2 9293 9270.

We have branches, affiliates and controlled entities(1) throughout Australia, New Zealand and the Pacific region and maintain offices in some of the key financial centres around the world. As at 30 September 2007, our market capitalisation was $53.2 billion(2) and we had total assets of $374.8 billion. Our operations comprise five key areas of business, through which we serve approximately 7.1 million customers(3). These five areas of business are:

•      Business Financial Services: responsible for sales, service and product development for small and medium sized business customers in Australia. It also has responsibility for group-wide working capital and specialised trade solutions operations and the management of our third party business product relationships;

•      Consumer Financial Services: responsible for sales, services and product development for our consumer customers across Australia and manages third party consumer product relationships and the retail branch operations in Hong Kong and Singapore;

•      BT Financial Group Australia: comprises our asset accumulation, investment management and life insurance operations in Australia. Wealth Management designs, manufactures and services financial products to enable customers to build, manage and protect their wealth. These products include managed investments (mutual funds), superannuation (pensions), life insurance, income protection, discount securities broking, margin lending, client portfolio administration (Wrap) platforms and portfolio management and administration of corporate superannuation. We also provide custody and settlement services to institutional customers and fund managers;

•      Westpac Institutional Bank (WIB): provides financial services to the corporate and institutional customer base, assisting and advising in the management of cash, funding, capital and market risk for companies and institutions in Australia and New Zealand; and

•      New Zealand Banking: provides a full range of retail and commercial services to customers throughout New Zealand.

Business strategy

Our ambition is to support our customers in achieving their financial aspirations and see each generation of Australians and New Zealanders live better than the last. Our vision is to be a great Australasian company.

We intend to deliver on our vision by fulfilling our service promise to customers. We are focusing on customers in our core markets of Australia, New Zealand, and the near Pacific region.

Our customer centric strategy is focused on:

•      developing a deep understanding of our customers’ needs;

•      providing value-added solutions that meet these needs; and

•      building long-term, multi-product relationships with our customers.

Overall, we invest in sectors where:

•      there is strong growth;

•      we can, or do, hold strongly competitive positions;

•      there are good opportunities for differentiation; and

•      we have, or can attract, the talent required to succeed.

We believe that superior execution of our strategy at all points in the service-value chain can differentiate us from our competitors. To achieve this we are a company that:

•      values teamwork, integrity and achievement;

•      prides itself on superior execution of our customers’ business;

•      is committed to its people; and

•      is committed to creating a sustainable future.

In realising our strategy, we are therefore seeking to continuously improve or maintain a leading position in:

•      employee commitment(4);

•      customer satisfaction and advocacy;

•      shareholder returns(5); and

•      corporate responsibility ratings(6).

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Information on Westpac

There are four main areas of focus in our overall strategic plan:

(i)    Investing in major growth sectors:

•      Superannuation: where BT Financial Group and the ‘new’ Westpac Institutional Bank businesses (those focused on investment product opportunities) and the integration of wealth and banking in our branch network and business centres are creating a broadly based capability to capture long run growth in this sector; and

•      Business Banking: where we believe we have the opportunity to build the Number 2 business bank in Australia, winning back a traditionally strong position for Westpac.

(ii)   Progressively crafting a more growth focused portfolio:

•      over time identifying businesses in our portfolio with strong growth prospects moving them to a higher growth trajectory and translating that into higher earnings.

(iii)  Transforming our branch and online network for success in an increasingly crowded market:

•      building a much stronger customer relationship focus;

•      properly integrating wealth and business banking;

•      providing more opportunity for our people;

•      providing much greater coverage of Australian markets; and

•      considerably reducing our product manufacturing and servicing costs.

(iv) Backing these strategies with a strong focus on:

•      culture and leadership, especially front line leadership;

•      improving our people and performance management process;

•      building employee commitment; and

•      improving our process management and execution skills.

We have confidence that our track record of executing strategies, our direct approach to addressing challenges, and our pursuit of significant growth opportunities will allow us to continue to succeed and grow in the dynamic, competitive Australasian financial services industry.

The following tables present, for each of our five key areas of business, the net profit attributable to equity holders for, and total assets at the end of the financial years ended 30 September 2007, 2006 and 2005. Refer to Note 36 to the financial statements for detailed financial disclosure of our geographic and business segments.

Net profit attributable to our equity holders(1)

Assets

(1)   Internal charges and transfer pricing adjustments have been reflected in the net profit reported for each of our business groups.

(2)   Other includes the results of Business and Technology Solutions and Services, Group Treasury, Pacific Banking and Head Office functions.

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Business Financial Services

Business Financial Services (BFS) is responsible for sales, servicing and product development for our Small to Medium Enterprise customers within Australia. Sales and servicing activities are conducted by specialised relationship managers with the support of Cash Flow, Financial Markets and Wealth specialists via the branch network, commercial banking centres, internet and telephone channels. BFS also develops and manages business lending and deposit products and working capital and trade solutions for all Westpac customers.

We are a major lender in the business finance market in Australia. In the year ended 30 September 2007, our total lending portfolio increased by 16% to $53.3 billion (2006 $45.7 billion) with term lending increasing 18%; bill acceptances increasing 18%; and equipment finance increasing 10%. The balance of the portfolio comprises revolving cash management facilities and trade finance.

We have a significant presence in the retail deposits and working capital market in Australia. In the year ended 30 September 2007 our total deposits increased by 15% to $51.5 billion (2006 $44.8 billion). Retail deposit products increased by 15% to $33.2 billion (2006 $28.7 billion) and working capital products increased 14% to $18.3 billion (2006 $16.1 billion).

Consumer Financial Services

Consumer Financial Services (CFS) is responsible for retail bank operations branded ‘Westpac’ across Australia. CFS is responsible for servicing and product development for our consumer customers within Australia. Activities are conducted via our nationwide network of branches (825 including in-store branches as at 30 September 2007), Home Finance Managers (HFMs), specialised consumer relationship managers, call centres, automatic teller machines (ATMs) and internet banking services. CFS includes the management of our third party consumer product relationships and also includes our retail branch operations in Hong Kong and Singapore. Our front line staff provide sales and service-related functions to customers for a broad range of financial products, including savings and cheque accounts, demand and term deposits, credit cards, and personal and housing loans. A significant portion of our housing finance sales are through independent mortgage brokers. In the year ended 30 September 2007, approximately 38% (2006 38%) of mortgage loan drawdowns were arranged via this channel.

We are a significant lender in the housing finance market in Australia. In the year ended 30 September 2007, our residential mortgage loan portfolio increased 12% to $125.6 billion (2006 $111.9 billion) (inclusive of securitised loans) from 30 September 2006, with variable interest rate loans comprising 80% of the portfolio. In addition, we are a major provider of credit card finance in Australia. Our total credit card outstandings as at 30 September 2007 increased by 9% to $7.3 billion (2006 $6.7 billion).

BT Financial Group Australia

BT Financial Group Australia (BTFG) is Westpac’s wealth management business. BTFG designs, manufactures and distributes financial products that enable our customers to achieve their financial goals by accumulating, managing and protecting their wealth. These products include retail investments, personal and business superannuation (pensions), life and general insurance, discount securities broking, margin lending, client portfolio administration (Wrap platforms) and portfolio management. BTFG also provides financial planning advice.

Our retail, institutional and wholesale Funds Under Management (FUM) totalled $41.3 billion (2006 $39.0 billion) and Funds Under Administration (FUA) totalled $46.2 billion (2006 $40.4 billion) as at 30 September 2007.

Our Wrap product reached $38.3 billion in FUA as at 30 September 2007, and with an increase of 44% on 2006, continues to be one of our fastest growing products. According to the latest Morningstar data as of 30 June 2007, we were second in market share with 13% of the platforms (including wrap) market in Australia over the June 2007 quarter.

Corporate Superannuation FUA increased by 17% during the financial year ended 30 September 2007 to $6.1 billion.

Margin Lending loan balances were $5.0 billion (2006 $3.7 billion) as at 30 September 2007, and we were ranked third(1) for Margin Lending in Australia with an estimated market share of 14%(2).

Our Life Insurance business held $288 million of in-force premiums as at 30 September 2007, and, for the year ended June 2007 was ranked seventh for new business in Australia with an estimated market share of 6% according to information published by Plan for Life.

In August 2007, Westpac announced that it intended to transfer its investment management business to a separate legal entity and to sell a portion in an initial public offering (refer to Significant developments - BT Investment Management Business).

Westpac Institutional Bank

Westpac Institutional Bank (WIB) services the financial needs of corporate, institutional and government customers either based in, or with interests in, Australia and New Zealand. This is achieved through dedicated industry teams supported by specialists with expertise in financial, capital and debt markets, transactional banking, specialised capital and alternative investment solutions. The products and services we offer include:

Financial Markets

•      foreign exchange

•      interest rate, currency and equity derivatives

•      energy

•      commodities

•      debt and hybrid securities secondary market

•      trade finance

Capital Markets

•      debt securities

•      securitisation

•      hybrid and structured capital

•      project finance

•      loans and syndications

•      asset finance

Specialised Capital

•      alternative assets

•      structured products

•      institutional funds management

Transactional Services

•      domestic cash management and transactional services

•      working capital solutions

•      international cash management

•      international payments

(1)   Ranking data for margin lending is based on an internally generated estimate.

(2)   Excluding protected equity loans. Source Reserve Bank of Australia Market Share Report as at 30 June 2007.

10

Information on Westpac

Within the institutional banking sector in Australia, we are the current market leader in debt capital markets(1), syndications(2) and transactional banking(3). In the global financial markets, we primarily focus on Australian and New Zealand dollar-denominated financial products and risk management.

Our Institutional Bank supports our customers through branches and subsidiaries located in Australia, New Zealand, New York, London and Asia.

New Zealand Banking

We have a long commitment to New Zealand, dating from 1861 when we commenced operating in New Zealand as the Bank of New South Wales. Since 1 November 2006, our New Zealand banking business is conducted through both a branch and a separate New Zealand banking subsidiary, Westpac New Zealand Limited (WNZL) (4). WNZL was incorporated as a company under the NZ Companies Act 1993. It became a registered bank on 1 November 2006. WNZL provides financial services to consumers and to small, medium and corporate business customers, agricultural businesses, and property investment and development customers and consumer banking, while Westpac’s New Zealand branch operates our wholesale banking and financial markets businesses in New Zealand.

We are one of New Zealand’s largest banking organisations and provide a full range of retail banking, wealth management and business banking products and services to our 1.4 million New Zealand based customers. As at 30 September 2007, we had approximately: 5000 staff; 197 branches (including agency sites), 45 of the 197 branches are based in Auckland, the largest market in New Zealand; and 476 Westpac branded ATMs operating throughout the country.

We are the third(5) largest lender of housing finance in New Zealand. As at 30 September 2007, our mortgage loan portfolio was NZ$29.7 billion (A$25.4 billion) (2006 NZ$25.1 billion (A$21.9 billion)) including securitised loans of NZ$0.6 billion (A$0.5 billion) (2006 NZ$0.6 billion (A$0.5 billion)). In addition, we are a major provider of wealth management services, with NZ$1.9 billion (A$1.6 billion) (2006 NZ$1.9 billion (A$1.7 billion)) in FUM as at 30 September 2007.

We continue to implement a customer growth strategy based on product offerings that seek to meet our customers’ needs, more customer-facing staff in consumer and business banking, increasing our branch and ATM footprint in key strategic locations, and the implementation of new technology to assist our front line in providing high quality customer service.

Other

Business and Technology Solutions and Services

Business and Technology Solutions and Services (BTSS) provides functional infrastructure support to front line businesses and comprises the following areas: Operations, Information Technology, Sourcing, Group Property, Product and Channel Transformation (PCT), Risk, and Strategy.

•      Operations perform back office processing and settlement services for retail, corporate and institutional banking products.

•      Our technology group defines our overall information technology architecture, supports and enhances software systems, and manages and implements major projects across our organisation.

•      Sourcing manages relationships with third party suppliers for the Bank. In particular, it manages the IT, telecommunications, mortgage and voucher processing outsourcing contracts that we have entered into with external providers.

•      Risk provides infrastructure support for fraud, physical security and records management.

•      Group Property manages the existing property portfolio.

•      PCT manages online banking facilities for our business, personal and private label customers.

Group Treasury, Pacific Banking and Head Office

In addition to BTSS, our financial business segment results disclosed under ‘Other’ include Group Treasury, Pacific Banking and Head Office functions. Group Treasury operations are primarily focused on management of our interest rate risk and funding requirements. Pacific Banking comprises our presence in the near Pacific, including Papua New Guinea and Fiji. Head Office includes those functions performed centrally including finance, risk, legal and human resources, with expenses incurred charged back to business units. It also includes the management of the Group’s capital.

Property

We occupy premises primarily in Australia, New Zealand and the Pacific Islands including 1,073 branches (2006 1,063) as at 30 September 2007. As at 30 September 2007, we owned approximately 4% of the premises we occupied in Australia and none in New Zealand. The remainder of premises are held under commercial lease with terms generally averaging five years. As at 30 September 2007, the carrying value of our directly owned premises and sites was approximately $81 million.

Westpac Place

On 7 March 2003, we executed an agreement to lease 74,000 m² of office space with Leighton Properties Pty Limited in relation to new premises then being developed at the northern end of Darling Harbour near King Street in Sydney, Australia. Construction of the new premises was completed in 2006. The project resulted in the consolidation of our existing ten Sydney Central Business District offices into just two primary locations, being Westpac Place and our existing office at that time at 60 Martin Place.

The building at Westpac Place consists of two office towers of 21 and 32 levels linked by a common foyer and includes two levels of retail space, a retail branch, childcare facilities, an urban park, and both tenant and public parking. We have signed a 12 year lease on the building with three six year options to extend. The initial 12 year lease commitment commenced on completion of the licence period in November 2006 and is included in the lease commitment table in Note 38 to the financial statements.

Westpac Place is one of a portfolio of properties owned by the Westpac Office Trust (Trust). The Trust has assets under management totalling $1.2bn and its securities are listed on the Australian Securities Exchange.

Westpac Funds Management Limited, a wholly owned subsidiary of Westpac, is the Responsible Entity of the Trust.

(1)   No. 1 All Australian Debt (excl. self-funded transactions) (Thomson Financial, Jan-Sept 2007).

(2)   No. 1 Australian syndicated loans (Thomson Financial 2006, Jan-Sept 2007).

(3)   No. 1 lead domestic transactional bank (Peter Lee Associates Transactional Banking survey, Australia 2004-07).

(4)   Refer to discussion of the reorganisation of New Zealand operations under ‘Supervision and regulation - New Zealand’.

(5)   Based on Residential Mortgage holdings information in June 2007 General Disclosure Statements of major New Zealand banks.

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Britomart

On 4 October 2006, we executed agreements to build and lease with members of the Britomart Group of companies in respect of approximately 16,000 m(2) of office space across two buildings to be developed at the eastern end of Britomart Precinct near Customs Street in Auckland, New Zealand. The project involves the fit out of the building and relocation of approximately 1,200 staff to the new site. This project will result in the consolidation of most of our existing Auckland and Wellington support and operations centres into just one location at Britomart (Charter House) in 2009. In addition, the New Zealand head office functions will move to an adjacent site (East 1Building) in 2011.

The new buildings consist of two retail/office buildings linked by a common foyer and include one level of retail space in each building and some tenant parking in the Charter House. We will sign a 12 year lease on Charter House and a ten year lease on the East 1 Building with two six year options to extend each lease. Options also exist to take additional space in the East 1 Building and in the adjacent East 2 Building. The Charter House is due to be delivered to Westpac in November 2008 and the East Building in October 2010 with Westpac to undertake its fitout. It is anticipated that Westpac will take a lease of the relevant buildings 150 days later.

Significant developments

BT Investment Management Business

Westpac announced to the market on 9 August 2007 that the BT investment management business would be amalgamated into one separate legal entity, BT Investment Management Limited (BTIM), and a portion would be sold off as part of an initial public offering. Westpac will retain 60% of the equity in BTIM, with the balance to be held by investment professionals employed by BTIM and other investors. Westpac is not transferring to BTIM BTFG’s other wealth management businesses, including financial advice, insurance, private banking and customer solutions (which is responsible for wrap platforms) and BTFG’s suite of retail investment, superannuation and retirement products.

Appointment of new CEO

On 17 August 2007, we announced that Gail Kelly has been appointed to be Westpac’s new Chief Executive Officer. Gail Kelly will join Westpac on 1 February 2008, succeeding David Morgan who has been Westpac’s CEO since March 1999. David has agreed to remain as CEO until Gail commences.

Proposed acquisition of RAMS franchise distribution business

On 2 October 2007, we announced that we had reached agreement to acquire the RAMS franchise distribution business for $140 million payable in cash. The business to be acquired includes the RAMS brand, franchise network and associated mortgage origination and servicing systems and contracts needed to run the distribution business. Acquiring the RAMS franchise network will provide a new growth option for Westpac. It will add an additional retail channel and extend Westpac’s retail footprint by more than 10% via an additional 92 stores operated by 53 franchisees. Westpac is not acquiring the ASX listed RAMS Home Loans Group Ltd or its existing mortgage book. Westpac, if various conditions are met, will fund up to $500 million of mortgages settled from 15 November 2007 until the formal completion of the acquisition. The acquisition requires the approval of RAMS’ shareholders. Subject to this, the proposed transaction is expected to be completed in early January 2008.

Delisting from Tokyo Stock Exchange

Westpac shares were de-listed from the Tokyo Stock Exchange in July 2007. The decision to de-list was taken due to the decline in shareholder numbers trading on the Tokyo Stock Exchange and the ease with which these shareholders can trade on either the Australian or New Zealand stock exchanges.

Outsourcing contracts

On 3 September 2006, Westpac entered into a three year agreement with Stream Solution (Holdings Pty Ltd) to provide Westpac’s end to end print management services.

On 1 December 2005, Westpac renewed its Managed Network Service agreement with Telstra Corporation for a further five year term. Under this agreement Telstra will provide voice, data and video services for corporate and retail banking in Australia and the Pacific Region.

On 4 February 2005, Westpac, in conjunction with the National Australia Bank and the Commonwealth Bank of Australia, entered into a 12 year arrangement with Fiserv Solutions Australia Pty Limited for the provision of voucher (cheque) processing services. As a result of this ‘utility’ style agreement, Westpac’s existing agreement with Unisys Payment Services Limited for cheque processing will be terminated progressively as services are transitioned to the new provider.

On 10 May 2004, Westpac entered into a five year agreement with Keycorp Payment Services for Electronic Funds Transfer Point of Sale (EFTPoS) terminals in Australia. Keycorp assumed responsibility for fleet services (including the provision of support and maintenance) of the EFTPoS terminals as well as all asset management functions. Keycorp is also responsible for the supply and management of the EFTPoS terminals and the Terminal Operating System and the integration with a new Terminal Application Management system. Westpac retains control over the merchant base (including contractual terms, fees and direct contact by Keycorp) as well as the decision as to what software applications are to be loaded on the EFTPoS fleet.

On 30 September 2002, Westpac entered into a ten year agreement with First Data Resources (FDR) Australia Limited to provide a managed service for our cards processing. This involves managing the application within the Westpac/IBM environment. FDR assumed responsibility for the Group’s Australasian cards processing in phases from October 2002. Westpac retains control of its cards sales, credit, collections and customer service functions.

On 1 October 2001, Westpac entered into a ten year agreement with EDS (Business Process Administration) Pty Limited whereby they will provide mortgage and other processing services in connection with the mortgage loan portfolio.

On 3 December 2000, Westpac entered into a ten year contract with IBM Global Services Australia relating to the management of the core banking technology operations in Australia, New Zealand and the Pacific Bank. The exact amount of the contract commitment is unable to be reliably measured as Westpac’s obligations are dependent upon business volumes over the period of the contract.

12

Legal proceedings

We have contingent liabilities in respect of actual and potential claims and proceedings that have not been determined. An assessment of likely losses is made on a case-by-case basis for the purposes of the financial statements and specific provisions have been made where appropriate, as described in Note 40 to the financial statements.

Our entities are defendants from time-to-time in legal proceedings arising from the conduct of our business.

We are one of 20 defendant banks named in proceedings concerning the Bell Group of companies. The proceedings have been brought by the liquidators of several Bell Group companies and seek to challenge the defendant banks’ entitlement to receive the proceeds of realisation of Bell Group assets in the early 1990s. The proceedings concluded recently and we are awaiting judgment. It is not possible to estimate the potential impact, however, we believe that we have good prospects of success.

The New Zealand Commerce Commission issued proceedings on 9 November 2006 against Westpac’s New Zealand Branch (NZ Branch), Westpac New Zealand Limited and The Warehouse Financial Services Limited (members of the Westpac Group), Visa International, Cards NZ Limited, MasterCard International and all New Zealand issuers of Visa and MasterCard credit cards alleging that the setting of interchange rates and rules (relating to honour all cards, no surcharge, access and no discrimination) amount to price fixing or alternatively have the effect of substantially lessening competition in the New Zealand market in breach of the Commerce Act 1986. The proceedings seek to declare the conduct illegal and impose unspecified monetary penalties.

In addition, on 29 November 2006, a number of New Zealand retailers issued similar proceedings to the Commerce Commission (as described above) against the NZ Branch, Westpac New Zealand Limited, The Warehouse Financial Services Limited, Visa International, Cards NZ Limited, MasterCard International and New Zealand issuers of Visa and MasterCard credit cards. These proceedings also seek to declare the conduct illegal and an enquiry into damages. Any damages awarded, if any, would be in addition to any penalties imposed under the Commerce Act 1986 in the event the Commerce Commission is successful in the proceedings described above. On 16 October 2007, both proceedings (as described above) were discontinued against NZ Branch on the basis that the issues in the proceedings relate to assets and liabilities which vested in Westpac New Zealand Limited (also a defendant) on 1 November 2006. We are considering our position in relation to both proceedings and at this stage do not consider it necessary to raise a provision in relation to this matter.

New Zealand Inland Revenue Department Investigation

The New Zealand Inland Revenue Department (NZIRD) is reviewing a number of structured finance transactions undertaken in New Zealand and has issued amended reassessments in respect of nine transactions, three undertaken in the 1999 tax year, two undertaken in the 2000 tax year, two undertaken in the 2001 tax year and two undertaken in the 2002 tax year. The maximum potential tax liability reassessed for the 1999 year is NZ$18 million (A$15 million) (NZ$25 million (A$21 million) with interest), for the 2000 year is NZ$61 million (A$52 million) (NZ$85 million (A$73 million) with interest), for the 2001 year is NZ$90 million (A$77 million) (NZ$127 million (A$109 million) with interest) and for the 2002 year is NZ$108 million (A$93 million) (NZ$158 million (A$135 million) with interest. Interest for each year has been calculated to 30 September 2007.

The NZIRD is also investigating other transactions undertaken by the NZ Branch, which have materially similar features to those for which reassessments have been received. Should the NZIRD take the same position across all of these transactions, for the periods up to and including 30 September 2007, the overall primary tax in dispute will be approximately NZ$595 million (A$510 million) (this includes the amounts noted above). With interest this increases to approximately NZ$815 million (A$698 million) (calculated to 30 September 2007).

Proceedings disputing the reassessments with respect to the 1999, 2000, 2001 and 2002 tax years have been commenced. We are confident that the tax treatment applied in all cases is correct. A ruling was sought from the NZIRD on an initial transaction in 1999 which, following extensive review by the NZIRD, was confirmed in early 2001. The principles underlying that ruling are applicable to, and have been followed in, all subsequent transactions.

Competition

The Australian financial services market continues to change in response to evolving customer needs and competitive dynamics.

Customers are increasingly knowledgeable and active in managing their own financial affairs and are driving the demand for tailored and innovative solutions, as well as increasing expectations in regards to pricing and service. Specifically:

•      superannuation, a government-regulated mandatory retirement savings program for working Australians, with its multiple rule changes, is becoming increasingly important to customers, spurring the demand for quality financial advice and solutions; and

•      corporate and institutional customers continue to expand globally and, as a result, are increasing the complexity of their financial needs.

In a broadly supportive economic environment, the Australian financial services market continues to experience competitive pressures across all business segments:

•      newer entrants and regional banks are aggressively pursuing growth by initially targeting profitable niche segments and then broadening their offerings and geographic presence;

•      competitors are pricing aggressively to achieve growth, making margin decline across the sector likely to continue;

•      third party distributors, like mortgage and business lending brokers, have consolidated their position in the market;

•      corporate and institutional customers have access to finance from a range of sources, including global investment banks, which places pressure on pricing;

•      strong growth of Australia’s wealth industry is attracting a large variety of new players; and

•      advances in technology are reducing service delivery costs and improving customer convenience, thus reducing the need for ownership and control of all of the activities required to provide a financial service or product.

In New Zealand, we face competition principally from the locally incorporated subsidiaries of the other three major Australian banks. All the majors offer comprehensive financial services products to consumer, business and corporate customers throughout the country. In addition, there is competition from a number of smaller market participants that are focusing on niche opportunities within the retail and business sectors.

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Economic outlook(1)

2007 was a strong year for Westpac. The Group has materially lifted revenue growth and all businesses are exhibiting good operational momentum going into 2008.

We have also continued to invest for growth, adding a further 800 employees, principally in the front-line, and boosting platform and product capabilities, including reshaping Australian superannuation through our innovative Super for Life product.

Looking ahead, the economic environment remains broadly supportive. We expect that the Australian economy will remain robust, underpinned by continuing strong demand, both domestically and internationally, and historically low unemployment. As a result, we expect that demand for credit will remain high with solid housing growth and continuing robust business investment. At the same time, legislative changes to retirement savings in Australia have provided a further boost to the wealth industry.

A key variable in the year ahead is the current dislocation of global capital markets. While we anticipate an easing in the tight liquidity conditions through 2008, some changes brought on by the fall-out of the US sub-prime market are structural and we believe that they will become a more permanent feature of financial markets.

In particular, we expect more differentiated pricing for risk. It is also likely that the business models of some market participants will be challenged by the tighter liquidity and the realignment of asset prices.

Our leading position in institutional banking and our balance sheet strength has already created opportunities and we expect this trend to continue in the coming year.

Westpac’s franchise health is also strong with record high employee commitment, improving customer satisfaction and our leadership in sustainability and governance.

Employees

(1)   The number of employees includes core and implied full time equivalent (FTE) staff. Core FTE includes overtime and pro-rata part time staff. Implied FTE includes temporary and contract staff.

2007 v 2006

Total full time equivalent (FTE) employees increased 794 compared to 2006 to 28,018. This was largely driven by increases in customer serving employees across a number of businesses:

•      194 additional customer serving employees in BFS to drive growth and expand our representation in the business banking segment;

•      325 additional customer serving employees in CFS, including 150 within the Premium Financial Services segment and a 161 increase in branch staff;

•      69 new staff in BT Financial Group to support higher product growth and increased demand following changes to superannuation legislation; and

•      87 additional customer serving employees in Westpac Institutional Bank;

partially offset by:

•      a decline in FTE in New Zealand due to investment in business banking employees which was more than offset by productivity savings elsewhere in the business.

2006 v 2005

FTE increased 86 compared to 2005 to 27,224. We continued to realign our workforce, with additional customer serving employees to strengthen our network across a number of businesses, including:

•      440 additional customer serving employees in BFS, with a primary focus in business banking as we sought to increase our footprint in the market;

•      119 new staff in BTFG, primarily in the Advice network. We steadily increased the level of financial planners to take advantage of this growing market segment; and

•      22 additional business banking employees in our New Zealand operations as we looked to improve customer satisfaction and profitability of our branch network.

Increases in customer serving employees were partially offset by decreases in non-customer serving employees via increased efficiencies in our core and support processes:

•      efficiency and productivity gains in support areas saw FTE fall by 247 in Australia; and

•      declines in project resources as key projects such as Reach and Pinnacle neared completion.

FTE was also reduced by 65 due to the sale of our sub-custody business to HSBC with the majority of these employees relocating to HSBC.

We operate under a number of enterprise agreements which were certified by the Australian Industrial Relations Commission (AIRC) in 2002. These agreements have passed their nominal term however they remain in force until they are replaced or terminated by the AIRC. In the past, fixed pay

(1)   All data and opinions under ‘Economic outlook’ are generated by our internal economists.

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increases were delivered to eligible employees through our enterprise agreements and despite not having a new agreement we paid a 4% increase to all eligible employees in October 2006. In March 2007, we introduced a new performance based approach to fixed pay for employees previously remunerated through our enterprise agreements. The first payment, which will be made in January 2008, will deliver an average performance based increase of 4% to eligible employees.

In New Zealand, we maintain both individual agreements with employees who are not union members and collective agreements with the Finance and Information Union (Finsec). The current collective agreement was ratified with a vote of more than 75% in favour, and came into effect on 1 May 2007; this agreement expires on 31 July 2008. Under the terms of settlement, a working party has been formed to enhance the pay and learning framework to provide more focus on competency in a given role as the means to progress through the pay scales. The new pay framework will be negotiated into the collective agreement during next year’s bargaining round.

There has been no industrial action in Australia and New Zealand in the financial year ended 30 September 2007. We continue to have a businesslike and professional relationship with the Finance Sector Union in Australia and Finsec in New Zealand.

Remuneration policies

The application of all remuneration practices across the Bank is consistent with the principles underlying our executive remuneration structures (refer to the remuneration report for further information), acknowledging the complexity and diversity of our businesses.

Fixed remuneration is market aligned, and reviewed annually with appropriate reference to our industrial agreements. Our employees have the opportunity to participate in short term incentive schemes, with specific reference to their role and to market competitiveness. A range of short term incentive schemes has been designed in recognition of our business needs - from highly formulated incentive schemes for roles with a strong sales focus, to discretionary arrangements for roles such as corporate support, based on performance against individual and business objectives.

We offer employee share plans for permanent employees in Australia, which are designed to provide tangible recognition for improvements in our performance and gain greater staff commitment. For further details refer to Note 27 to the financial statements.

We also provide superannuation (pension) plans for our employees in Australia, New Zealand and certain other countries in which we operate. Plan members are entitled to benefits on retirement, resignation, permanent disability or death. Refer to Note 39 to the financial statements for further information.

During 2007 we introduced performance-based fixed pay increases for employees covered by our enterprise development agreement. Consistent with Westpac’s achievement culture, this change aims in particular to reward our high achievers.

We also changed our long term incentive award structure. From 2007 select senior employees below General Manager level receive Westpac securities which vest after a service requirement.

Group Executives and General Managers continue to receive performance securities which vest after a set period of service and subject to performance hurdles being met. However, from 2007 Group Executives, General Managers and other select employees will also be required to defer a portion of their short term incentive, receiving it as Westpac securities which vest after a service requirement.

The Board Remuneration Committee oversees the remuneration practices across our Group, and approves total expenditure for performance recognition.

Supervision and regulation

Australia

Within Australia we are subject to supervision and regulation by five principal agencies: the Australian Prudential Regulation Authority (APRA); the Reserve Bank of Australia (RBA); the Australian Securities and Investments Commission (ASIC); the Australian Securities Exchange (ASX); and the Australian Competition and Consumer Commission (ACCC).

APRA is responsible for the prudential supervision of Authorised Deposit-taking Institutions (ADIs), life and general insurance companies and superannuation (pension) funds. One of its roles is to protect the interests of depositors and insurance policyholders.

As an ADI, we report prudential information to APRA in relation to capital adequacy, large exposures, credit quality and liquidity. Our controlled entities in Australia involved in general insurance, superannuation and life insurance are also subject to the regulatory regime of APRA. Reporting is supplemented by consultations, on-site inspections and targeted reviews. Our external auditors also have an obligation to report on compliance with certain statutory and regulatory banking requirements, and on any matters that in their opinion may have the potential to materially prejudice the interests of depositors.

Australia’s risk-based capital adequacy guidelines are generally consistent with the approach agreed upon by the Basel Committee on Banking Supervision. Refer to the section ‘Basel Capital Accord’.

The RBA is responsible for monetary policy, maintaining financial system stability and payments system regulation. The RBA is an active participant in the financial markets, manages Australia’s foreign reserves, issues Australian currency notes and serves as banker to the Commonwealth Government. On 1 July 2002, the RBA transferred the responsibility for registration and categorisation of financial corporations to APRA.

ASIC is the sole national regulator of Australian companies. Its primary responsibility is for regulation and enforcement of company and financial services laws that protect consumers, investors and creditors. With respect to financial services, it promotes honesty and fairness through the provision of consumer protection, using as necessary its regulatory powers to enforce laws relating to deposit-taking activities, general insurance, life insurance, superannuation, retirement savings accounts, securities (such as shares, debentures and managed investments) and futures contracts.

The ASX operates Australia’s primary national market for securities issued by listed companies. Certain of our securities (including our ordinary shares) are listed on the ASX and we therefore have a contractual obligation to comply with the ASX Listing Rules that have statutory backing in the Corporations Act. Oversight of listed companies’ compliance with the ASX Listing Rules is shared between the ASX and ASIC.

The ACCC is an independent statutory authority responsible for the regulation and prohibition of anti-competitive and unfair market practices and mergers and acquisitions by Australian corporations. Its objectives are to ensure that corporations do not act in a way that may have the effect of eliminating or reducing competition, and to oversee product safety and liability issues, pricing practices and third party access to facilities of national significance. The ACCC’s consumer protection work complements that of State and Territory consumer affairs agencies that administer the unfair trading legislation of their jurisdictions.

The Australian government’s present policy is that mergers among the four major banks will not be permitted until the government is satisfied that competition from new and established participants in the financial industry, particularly in respect of small business lending, has increased sufficiently. Proposals for foreign acquisitions of Australian banks are subject to approval by the government under the Australian Foreign Acquisitions and Takeovers Act 1975.

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New Zealand

The Reserve Bank of New Zealand (RBNZ) is responsible for the supervision of the New Zealand banking industry. This is primarily achieved through the extensive disclosure regime that requires all banks to publish financial statements on a quarterly basis, which also incorporates director attestation on the Bank’s risk management disciplines.

It is a policy of the RBNZ that all systemically important banks must incorporate as a local entity rather than operate through a branch structure. Until 1 November 2006 we conducted our New Zealand business through a branch (NZ Branch), however, the NZ Branch was deemed to be a systemically important bank and therefore required to incorporate locally.

The RBNZ allows an overseas bank to operate in New Zealand as both a branch of its overseas parent and through a subsidiary. We have determined that this type of ‘dual registration’ is the most effective option for us to comply with RBNZ policy, while minimising disruption to the NZ Branch’s investors and customers.

Accordingly, we established Westpac New Zealand Limited to assume and carry on the New Zealand consumer and business banking operations of our NZ Branch. Westpac New Zealand Limited commenced operating as a registered bank under the Reserve Bank of New Zealand Act 1989 on 1 November 2006. The NZ Branch continues to operate in New Zealand, retaining the New Zealand wholesale and financial markets business.

The reorganisation of our business was facilitated by legislation, which was the only means by which our New Zealand consumer and business banking operations could be vested in the Bank efficiently, economically and without affecting the continuity of the provision of those banking services. The Westpac New Zealand Act 2006 provided for the vesting of designated NZ Branch assets and liabilities in Westpac New Zealand Limited on 1 November 2006.

The Banking Act 1959 (Australia) gives priority over our Australian assets to Australian depositors. Accordingly, unsecured creditors and depositors of the remaining NZ Branch will rank after our Australian depositors in relation to claims against Westpac Banking Corporation’s Australian assets.

Based on the statement of financial position as at 30 September 2007, the carrying value of the New Zealand assets of the NZ Branch of Westpac Banking Corporation was greater than its New Zealand deposit liabilities.

United States

Our New York branch is a federally licensed branch and, as such, is subject to supervision, examination and extensive regulation by the US Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System (the US Federal Reserve) under the International Banking Act of 1978 (IBA), and related regulations. Under the IBA, we may not open any branch, agency or representative office in the US or acquire more than 5% of the voting stock of any US bank without the prior approval of the US Federal Reserve.

A federal branch must maintain, with a US Federal Reserve member bank, a capital equivalency deposit as prescribed by the US Comptroller of the Currency in an amount which is the greater of:

•      the amount of capital that would be required of a national bank organised at the same location; or

•      5% of the total liabilities (excluding, among other things, liabilities to affiliates and liabilities of any international banking facilities) of the federal branch.

In addition, a federal branch is examined by the US Comptroller of the Currency at least once each calendar year and periodically by the US Federal Reserve. The examination covers risk management, operations, credit and asset quality and compliance with the record-keeping and reporting requirements that apply to national banks, including the maintenance of its accounts and records separate from those of the foreign bank and any additional requirements prescribed by the US Comptroller of the Currency.

A federal branch of a foreign bank is, by virtue of the IBA, subject to the receivership powers exercisable by the US Comptroller of the Currency.

At this time we have not elected to become and therefore we are not a financial holding company as defined in the Gramm-Leach-Bliley Act of 1999.

USA PATRIOT Act

The USA PATRIOT Act requires US financial institutions, including the US branches of foreign banks, to take certain steps to prevent, detect and report individuals and entities involved in international money laundering and the financing of terrorism. The required actions include verifying the identity of financial institutions, terminating correspondent accounts for foreign ‘shell banks’ and obtaining information about the owners of foreign bank clients and the identity of the foreign bank’s agent for service of process in the US. Many of the new anti-money laundering compliance requirements of the USA PATRIOT Act are consistent with the anti-money laundering compliance obligations previously imposed on US financial institutions, including the US branches of foreign banks, under the Bank Secrecy Act and under regulations of the applicable US bank regulatory agency such as the US Comptroller of the Currency. These include requirements to adopt and implement an effective anti-money laundering program, report suspicious transactions or activities, and implement due diligence procedures for correspondent and other customer accounts. The USA PATRIOT Act and other recent events have resulted in heightened scrutiny of Bank Secrecy Act and anti-money laundering compliance programs by federal bank regulatory and law enforcement authorities.

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Corporate governance

1.     Introduction

a)     Date of statement

This statement reflects our corporate governance framework, policies and procedures as at 1 November 2007.

b)     Access to information on the website

This corporate governance statement, and the following documents referred to in the statement, are available for viewing on our website in the corporate governance section (unless otherwise stated) at ‘www.westpac.com.au/corporateresponsibility’.(1)

Constitution and the Board

•      constitution;

•      Board charter;

•      Committee charters - Audit, Remuneration, Risk Management, Nominations and Corporate Responsibility and Sustainability Committees;

•      Board tenure policy;

•      Non-executive Director’s standard letter of appointment;

•      definition of independence;

•      current Committee membership;

•      principles for appointment of Directors to subsidiary companies;

•      Director appointment policy; and

•      checklist of compliance with ASX Limited Corporate Governance Council’s Principles and Recommendations.

Our principles

•      Principles for Doing Business;

•      Code of Conduct;

•      Conflicts of Interest policy; and

•      New Issues policy.

Other core operating principles and policies

•      summary of our Risk Management Framework and related policies

•      Insider Trading policy

•      Whistleblower Protection policy

•      Code of Accounting Practice and Financial Reporting

•      Market Disclosure policy

•      guidelines for appointment of PricewaterhouseCoopers for non audit services

2.     Our approach to corporate governance

a)     Framework and approach to corporate governance

Our approach to corporate governance is based on a set of values and behaviours that underpin everyday activities, ensure transparency and fair dealing, and protect stakeholder interests.

This approach includes a commitment to the highest standards of governance which our Board sees as fundamental to the sustainability of our business and performance.

In pursuing this commitment, the Board monitors local and global developments in corporate governance and their implications for us.

In Australia, we have taken into account the revised ‘Corporate Governance Principles and Recommendations’ published in August 2007 by the ASX Limited’s Corporate Governance Council (ASXCGC), and the Corporations Act 2001 (Corporations Act).

In the international arena, we have responded to a range of relevant corporate governance principles.

b)     Compliance with the ASXCGC’s Principles and Recommendations

The ASX Listing Rules require listed entities such as our company to include a statement in their Annual Report disclosing the extent to which they have followed the 27 ASXCGC Principles and Recommendations (ASXCGC’s Recommendations) during the reporting period, identifying any recommendations that have not been followed and providing reasons for that variance.

We believe that our governance practices comply with the ASXCGC’s Recommendations. A checklist summarising our compliance is on our website.

The revised ASXCGC’s Recommendations no longer require proposed equity-based incentive plans to be submitted to Shareholders, however, our 2002 equity-based reward plans were extensively disclosed to shareholders in the 2002 and subsequent years’ annual reports and are set out in detail in the Remuneration report and in the Financial statements.

(1)   Information contained in or otherwise accessible through the websites mentioned in the Annual Report does not form part of this report unless we specifically state that the information is incorporated by reference thereby forming part of the report. All references in these reports to websites are inactive textual references and are for information only.

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3.     The Board of Directors

a)     Membership and expertise of the Board

Our Board has a broad range of relevant financial and other skills, experience and expertise. The current Board composition, with details of each Director’s background, is set out in the Directors’ report. The Board considers that collectively, Directors have the range of skills, experience and expertise necessary to govern Westpac. All Non-executive Directors have extensive experience of the social and environmental context in which the business operates which complements the extensive business experience of the Managing Director.

The Board’s approach to selection, performance evaluation and tenure of Directors is described in this statement.

ASXCGC’s Recommendations 2.6

b)     Board role and responsibility

The roles and responsibilities of the Board are formalised in the Board Charter. The Charter also defines the matters that are reserved for the Board and its Committees, and those that the Board has delegated to management.

In summary, the Board is accountable to shareholders for our performance, and the Board’s responsibilities include:

•      strategy - providing strategic direction and approving significant corporate strategic initiatives;

•      board performance and composition - evaluating the performance of Non-executive Directors, and determining the number and composition of our Board as well as making recommendations to shareholders for the appointment and removal of Directors;

•      leadership selection - selecting and evaluating the performance of the Chief Executive Officer (CEO), approving the appointments of Group Executives, the Chief Financial Officer (CFO), the General Manager Group Assurance and the Group Secretary;

•      succession planning - planning for Board and Executive succession;

•      remuneration - setting CEO and CFO remuneration and setting Non-executive Director remuneration within shareholder approved limits;

•      financial performance - approving our budget, monitoring management and financial performance and approving the dividend policy, amounts and timing of payments;

•      financial reporting - considering and approving our half-yearly and annual financial statements;

•      audit - selecting and recommending to shareholders the appointment of the external auditor. Determining the duration, remuneration and terms of appointment of the external auditor and evaluating its performance and ongoing independence. Maintaining a direct and ongoing dialogue with the external auditor;

•      risk management - approving our risk management strategy and various risk management frameworks and monitoring their effectiveness;

•      corporate responsibility - considering the social, ethical and environmental impact of our activities, setting standards and monitoring compliance with our responsibility policies and practices;

•      relationship with the exchanges and regulators, and continuous disclosure - maintaining a direct and ongoing dialogue with relevant regulators in Australia and offshore and ensuring that the market and our shareholders and other investors are continuously informed of material developments; and

•      internal governance - determining the scope of delegated authorities and approving policies for Non-executive director appointments to our controlled entities.

The Board has delegated a number of these responsibilities to its Committees. The responsibilities of these Committees are detailed in section 4 of this statement.

The Board has delegated to management, responsibility for:

•      strategy - developing and implementing corporate strategies and making recommendations on significant corporate strategic initiatives;

•      senior management selection - making recommendations for the appointment of senior management, determining terms of appointment, evaluating performance, and developing and maintaining succession plans for senior management roles;

•      financial performance - developing our annual budget and managing day-to-day operations within the budget;

•      risk management - maintaining effective risk management frameworks;

•      continuous disclosure - keeping the Board and market fully informed about material developments; and

•      corporate responsibility - managing day-to-day operations in accordance with standards for social, ethical and environmental practices, which have been set by the Board.

Highlights in 2007

•      the Board approved a Governance framework for Westpac and its subsidiaries within which Westpac’s existing governance policies operate, new policies can be created and implemented. The Governance framework also provides a basis on which subsidiary entities will operate and report to the Board.

ASXCGC’s Recommendation 1.1

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c)     Board size and composition

The Board considers that the optimum number of Directors is between seven and nine, with Non-executive Directors comprising the majority of the Board.

There are currently six independent Non-executive Directors and one Executive Director on our Board. A further independent, Non-executive Director has been appointed and will join the Board in March, 2008. Our constitution sets a maximum of fifteen Non-executive Directors. In addition, up to three members of the Board may be Executive Directors. The Chairman of the Board is non-executive and independent of the role of the CEO.

The Nominations Committee assesses the Board composition and size and recommends to the Board changes to the Board composition and size. The Nominations Committee also assesses the skills required to discharge the Board’s duties, having regard to our business mix, financial position and strategic direction, including specific qualities or skills that the Nominations Committee believes are necessary for one or more of the Directors to possess.

ASXCGC’s Recommendations 2.1, 2.3 and 2.4

d)     The selection and role of the Chairman

The Board elects one of the independent Non-executive Directors to be Chairman. The Chairman’s role includes:

•      ensuring that Board members undertake appropriate induction covering the terms of their appointment, their duties and responsibilities;

•      providing effective leadership to the Board in relation to all Board matters;

•      representing the views of the Board to the public;

•      ensuring the Board meets at regular intervals throughout the year and that minutes of meetings accurately record decisions taken and, where appropriate, the views of individual Directors;

•      guiding the agenda and conduct of all Board meetings;

•      reviewing the performance of Non-executive Directors;

•      overseeing Non-executive Director and Chief Executive Officer succession; and

•      promoting constructive and respectful relations between Board and management.

The current Chairman, Edward (Ted) Alfred Evans, is an independent Non-executive Director. He has been a Director of the company since 5 November 2001 and Chairman since 1 April 2007. The Chairman is a member of each of the Audit and Risk Management Committees and is Chairman of the Nominations Committee.

ASXCGC’s Recommendation 2.2

e)     Director independence

The Board assesses each Director against a range of criteria to decide whether they are in a position to exercise independent judgement.

Directors are considered to be independent if they are independent of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement. Materiality is assessed on a case-by-case basis by reference to each Director’s individual circumstances rather than by applying general materiality thresholds.

In assessing independence, the Board considers whether the Director has a business or other relationship with the company, directly or as a partner, shareholder or officer of a company or other entity that has an interest, or a business or other relationship, with the company or another Group member.

Information about any such interests or relationships, including any related financial or other details, is assessed by the Board to determine whether the relationship could, or could reasonably be perceived to, materially interfere with the exercise of a director’s unfettered and independent judgement.

On appointment, each Director is required to provide information for the Board to assess and confirm their independence as part of their consent to act as a Director. Directors re-affirm their independence annually. All six Non-executive Directors are considered to be independent.

The Nominations Committee charter discloses a process for selection and appointment of new Directors and re-election of incumbent Directors.

ASXCGC’s Recommendations 2.1 and 2.6

f)      Avoidance of conflicts of interest by a Director

The Board is conscious of its obligations to ensure that Directors avoid conflicts of interest (both real and apparent) between their duties as Directors of Westpac and their other interests and duties.

All Directors are required to disclose any actual or potential conflict of interest on appointment as a Director and are required to keep these disclosures up to date.

Any Director with a material personal interest in a matter being considered by the Board must declare their interest and, unless the Board resolves otherwise, they may not participate in boardroom discussions or vote on matters in respect of which they have a conflict.

There are a range of policies that we maintain relating to the management of conflicts of interest, such as the ‘Conflicts of Interest’ and the ‘New Issues’ policies (see section 7e of this statement).

ASXCGC’s Recommendation 3.1

g)     Meetings of the Board and their conduct

The Board has scheduled meetings each year and meets whenever necessary between scheduled meetings to deal with specific matters needing attention.

The Chairman with input from the CEO and the Group Secretary establish meeting agendas for assessing our coverage of financial, strategic and major risk areas, throughout the year. The Directors have the opportunity to review meeting materials in advance. Directors are always encouraged to participate with a robust exchange of views and to bring their independent judgements to bear on the issues and decisions at hand.

The Board discusses a particular strategy topic at most Board meetings. In July each year, the Board meets to discuss our strategic plan and to set our overall strategic direction. The Board also conducts more formal workshops on specific subjects throughout the year in addition to the regular Board meetings.

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Members of the executive management are invited to attend all Board meetings and are also available to be contacted by Directors between meetings. The Board, however, usually meets without executive management (other than the CEO) at the commencement and conclusion of each meeting.

The Board meets without the CEO or any other members of executive management at least once a year or as required and, as with all other Board meetings, this is presided over by the Chairman. The Audit Committee meets with our auditor without executive management being present at each Audit Committee meeting.

Details of meetings attended by Directors during the 2007 year are reported in the Directors’ report.

Highlights in 2007

•      the Board has initiated a half year review of Westpac’s strategic options; and

•      recent and current Board papers can be distributed and accessed electronically.

h)     Succession planning

The Board considers Director succession in conjunction with the Nominations Committee. Together they are responsible for developing and implementing succession planning for Non-executive Directors, taking into account the challenges and opportunities facing us and the skills and expertise which are likely to be needed on the Board today and in the future.

The Board is responsible for CEO and CFO succession planning. The Board is actively involved with management succession.

The Board is responsible for approving the CEO financial and non-financial performance objectives and for evaluating the performance of the CEO against those objectives. The Board also oversees the process of objective setting for senior executives and monitors the performance of senior executives against those objectives.

ASX CGC’s Recommendation 1.2

Highlights in 2007

•      Leon Davis retired as Westpac’s Chairman and was succeeded by Ted Evans;

•      the Board considered CEO succession in detail, which culminated in the appointment of Gail Kelly to replace David Morgan who steps down as CEO in January 2008;

•      Helen Lynch retired as a Director;

•      Elizabeth Bryan was appointed as a Director; and

•      the Nominations Committee revised the principles which apply to the selection and appointment of directors to the boards of our subsidiaries.

i)      Review of Board and Committee performance

The Board undertakes ongoing self-assessment and review of its performance and of the performance of the Chairman, individual Directors and Board Committees.

The performance review process conducted in 2007 was facilitated externally and included interviews with Directors and written surveys of Directors, Group Executives and the Group Secretary & General Counsel. These reviews were wide-ranging and included, amongst other things, each Director’s contributions to Board discussions. The survey results are independently collated and the Chairman formally discussed the results with individual Directors and Committee chairs.

The Nominations Committee reviewed the results of the annual performance review of the Chairman without the Chairman being present.

ASXCGC’s Recommendations 2.5 and 2.6

j)      Nomination and appointment of new Directors

The Nominations Committee considers and makes recommendations for nominations of new Directors to the Board as a whole.

External consultants may from time to time be used to access a wide base of potential Directors. Those considered are assessed against a range of criteria including background, experience, professional skills and personal qualities. The Nominations Committee and the Board also consider whether a candidate’s skills and experience will complement the existing Board and whether the candidate has sufficient time available to commit themselves to their responsibilities as a Westpac Director.

New Directors receive a letter of appointment, which sets out their duties, the terms and conditions of appointment including expected term of appointment, remuneration and the expectations of the role. This letter conforms with ASXCGC’s Recommendations.

If the Board appoints a new Director during the year, that person will stand for election by shareholders at the next Annual General Meeting (AGM). Shareholders are provided with relevant background information on the candidates for election. The Nominations Committee reviews appointment criteria from time to time and makes recommendations concerning the re-election of any Director by shareholders.

The Board’s Director Appointment Policy details the policy and procedure for the nomination and appointment of new Directors and the reappointment of incumbent Directors.

ASXCGC’s Recommendation 2.4

k)     Term in office and retirement and re-election of Directors

At each AGM one-third of our Directors (excluding the CEO) and any Director who has held office for three or more years since their last election must retire. In addition, any Director who has been appointed during the year must stand for election at the next AGM. These are mandatory requirements in our Constitution.

Eligible Directors who retire as required may offer themselves for re-election by shareholders at the next AGM. Directors offering themselves for re-election are invited to give a short presentation to the AGM in support of re-election.

The Board has adopted a Tenure Policy which limits the number of terms of office that any Non-executive Director may serve. For Non-executive Directors (other than the Chairman) the maximum tenure is three consecutive terms or nine years from the date of first election by shareholders. For the Chairman the maximum tenure is four terms or twelve years (inclusive of any term as a Director prior to being elected as Chairman).

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l)      Director education

All Directors on appointment are offered an induction program to help familiarise them with matters relating to our business, strategy and any current issues before the Board. The induction program includes meetings with the Chairman, the CEO, each Chairman of the respective Board Committees, each Group Executive, the Group Secretary & General Counsel and the Chief Strategy Officer.

The Board encourages Directors to continue their education by participating in formal workshops which are held regularly throughout the year and attending relevant site visits. Directors are also encouraged to undertake relevant external education where they wish to do so.

Our Group Secretary & General Counsel provides Directors with ongoing guidance on matters such as corporate governance, our Constitution and the law.

Highlights in 2007

•      the Board participated in workshops on our succession planning, organisational strategy, our financial results, Basel II requirements and Anti Money Laundering.

m)    Board access to information and advice

All Directors have unrestricted access to company records and information and receive regular detailed financial and operational reports from executive management to enable them to carry out their duties. Each Director enters into an Access and Indemnity Deed with the company to ensure seven year access to documents after their retirement as a Director.

The Chairman and other Non-executive Directors regularly consult with the CEO, the CFO, Group Executives, the Group Secretary & General Counsel, the General Manager Group Assurance, the Chief Operational Risk and Compliance Officer, the Chief Strategy Officer, and the General Manager Stakeholder Communications. In addition, Directors may consult with, and request additional information from, any of our employees.

The Board collectively, and each Director individually, has the right to seek independent professional advice, at our expense, to help them carry out their responsibilities. While the Chairman’s prior approval is needed, it may not be unreasonably withheld and, in the Chairman’s absence, Board approval may be sought.

ASXCGC’s Recommendation 2.1 and 2.6

n)     Company Secretary

Our company secretaries are Richard Willcock and Anna O’Connell. Richard Willcock is our Group Secretary & General Counsel. Anna O’Connell is Head of Group Secretariat.

Richard Willcock joined us in 1997 and was appointed to his present role in February 2003 with responsibility for the management and delivery of company secretarial, legal and governance advice and support to the Board, executive and business. Richard’s qualifications are LLB, BA (Hons), MBA and FCIS. In 2007, Richard was recognised by the inaugural Governance Professional with an ASX 100 Company award.

Prior to Richard’s current appointment he was General Manager Risk for BT Financial Group. Richard previously practised law in private practice from 1982 and was a partner at law firm Abbott Tout.

Anna O’Connell joined us in 2001 and was appointed to her current role in February 2006. Anna’s qualifications are B.Ec, Grad.Dip.(AppCorpGov) and FCIS. She has nine years experience as a company secretary in various large public companies.

Responsibilities for the secretariat function include providing advice to Directors and officers on corporate governance and regulatory matters, developing and implementing our governance framework and giving practical effect to the Board’s decisions.

All Directors have access to advice from the Group Secretary & General Counsel and Head of Group Secretariat at any time.

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4.     Board Committees

a)     Board Committees and membership

We have five standing Board Committees. The Committee Charters describe their roles and powers, as approved by the Board.

The five Board Committees and their membership at 1 November 2007 are set out in the table below:

Attendances of Directors at Committee meetings are set out in the Directors’ report.

Other Committees of the Board are established from time to time to consider matters of special importance or to exercise the delegated authority of the Board.

Highlights in 2007

•      Committee Membership was reviewed and updated where required to take into account Director and Committee workload.

ASXCGC’s Recommendations 2.6 and 4.4

b)     Committee Charters

The roles and responsibilities of each Committee are set out in the respective Committee Charters. Each year the Committee Charters are reviewed and where appropriate updated to take account of changes and other developments in the Committee’s area of responsibility.

c)     Committee procedures

Composition and independence of the Committees

Committee members are chosen for the skills, experience and other qualities they bring to the Committees. Four of the five Committees are required to be, and are currently, composed of only independent Non-executive Directors. The CEO is a member of the Corporate Responsibility and Sustainability Committee.

Operation of the Committees and reporting to the Board

During the year the Board Committees met quarterly and at other times as necessary. Each Committee is entitled to the resources and information it requires and has direct access to our employees and advisers. All Directors receive all Committee papers and can attend all Committee meetings, subject to there not being any conflict of interest. The CEO attends all Committee meetings, except where he has a material personal interest in a matter being considered. Senior executives and other selected employees are invited to attend Committee meetings as necessary.

How the Committees report to the Board

At the next Board meeting following each Committee meeting, the Board is given an oral report by the Chair of each Committee. In addition, all Committee minutes are tabled at Board meetings.

How Committees’ performance is evaluated

The performance of Committees is discussed and reviewed initially within each Committee and then reviewed as part of the Board’s performance review. The performance of each Committee member (other than the CEO) is evaluated as part of the annual peer review of each Director.

ASXCGC’s Recommendation 2.5

d)     Audit Committee

Role of the Committee

Our Board shares oversight responsibility for risk management between the Audit Committee and the Risk Management Committee.

The Audit Committee, oversees all matters concerning:

•      integrity of the financial statements and financial reporting systems;

•      making recommendations to the Board for the appointment of the external auditor;

•      external auditor’s qualifications, performance, independence and fees;

•      oversight and performance of the internal audit function; and

•      compliance with financial reporting and related regulatory requirements.

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Integrity of the financial statements

The Audit Committee oversees the preparation of our financial statements. The Committee requires management to confirm that the accounting methods applied by management are consistent and comply with applicable accounting standards and concepts.

The Committee reviews and assesses:

•      any significant estimates and judgements in financial reports and monitors the methods used to account for unusual transactions;

•      the processes used to monitor and comply with laws, regulations and other requirements relating to external reporting of financial and nonfinancial information; and

•      the major financial risk exposures and the process surrounding the disclosures made by the CEO and CFO in connection with their personal certifications of the half-year and annual financial statements.

External audit

The Audit Committee makes recommendations to the Board concerning the appointment of our external auditor and approving the terms of engagement. The Committee reviews the performance and the independence of the external auditor. This evaluation includes an annual review of the external auditor’s internal quality control procedures, reviews of non-audit services which have been provided, consideration of any recent inquiry or investigation by governmental or professional authorities and the capabilities of the lead audit staff who work on our audit.

For permitted non-audit services, use of the external audit firm must be assessed in accordance with our pre-approval policy which is set out in section 5e.

The external auditor receives all Audit Committee papers and attends all meetings. The Committee meets with the external auditor without management being present and also meets with management without the external auditor being present. Committee members are able to contact the external auditor directly at any time.

Internal audit

The Audit Committee is responsible for making recommendations to the Board concerning the appointment and replacement of the General Manager Group Assurance (Head of Internal Audit) and reviews the internal audit responsibilities, budget and staffing. Periodically, the Audit Committee meets with the General Manager Group Assurance without management being present. The Audit Committee Chairman also meets separately with the General Manager Group Assurance.

Compliance with financial reporting and related regulatory requirements

The Audit Committee oversees our compliance with applicable financial reporting and related regulatory requirements.

The Audit Committee’s role includes regular discussions with:

•      members of the Risk Management Committee, the Chief Operational Risk and Compliance Officer, management and the external auditor about our major financial risk exposures and the steps management has taken to monitor and control such exposures;

•      the external auditor concerning their audit and any significant findings and the adequacy of management’s responses;

•      management and the external auditor concerning the half-yearly and annual financial statements, including disclosures in the ‘operating and financial review and prospects’ of the Annual Report;

•      management and the external auditor concerning any correspondence with regulators or government agencies and reports which raise issues of a material nature; and

•      the Group Secretary & General Counsel concerning any legal matters that may have a material impact on the financial statements and/or our compliance with financial reporting and related regulatory policies.

The Committee also monitors our procedures for the receipt, retention and treatment of financial complaints, including accounting, internal accounting controls or auditing matters and the confidential or anonymous reporting by employees of concerns regarding accounting or auditing matters.

Financial knowledge of Committee members

The Audit Committee includes members who have appropriate financial experience and an understanding of the financial services industry. All members of the Audit Committee satisfy the independence requirements under the ASXCGC’s Recommendations, the United States Securities Exchange Act of 1934 (as amended) and the rules of the New York Stock Exchange (NYSE).

The Board has determined that David Crawford, Chair of the Audit Committee, is an ‘audit committee financial expert’ and is independent as defined in the Listing Standards of the NYSE. David Crawford is not an auditor or an accountant with respect to the company, does not perform ‘field work’ and is not a full-time employee. Under the United States laws, an audit committee member who is designated as an ‘audit committee financial expert’ will not be deemed to be an ‘expert’ for any purpose other than as a result of being identified as an ‘audit committee financial expert’. Although the Board has determined that David Crawford has the requisite ‘financial expert’ attributes defined under the rules of the United States Securities and Exchange Commission (SEC), his responsibilities as an Audit Committee member are the same as those of other Audit Committee members.

The Audit Committee assesses the information provided by management and the external auditor. Management determines that our financial statements and disclosures are complete and accurate. The external auditor has the duty to plan and conduct audits.

Further information on audit governance and independence is included in section 5 of this statement.

ASXCGC’s Recommendations 4.1, 4.2, 4.3, and 4.4

Highlight in 2007

•      evaluation and approval of Ian Hammond who will succeed David Armstrong as the lead audit partner for PwC, Westpac’s independent auditor.

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e)     Risk Management Committee

Role of the Committee

The Risk Management Committee oversees the risk profile and approves our risk management framework within the context of the risk-reward strategy determined by the Board. The determination of this strategy includes recommendations from the Risk Management Committee, CEO and senior management on the parameters of our risk-reward profile and appropriate strategy.

The Risk Management Committee monitors the alignment of our risk profile with our risk appetite as it is defined in the Board Risk Appetite Statement and with current and future capital requirements. The Committee oversees how we manage the risks which are relevant to our operations.

The Risk Management Committee:

•      reviews and approves the frameworks for managing our credit, market, liquidity, operational and compliance risk;

•      determines, approves and reviews the limits and conditions that apply to the taking of risk, including the authority delegated by the Board to the CEO, CFO and Chief Risk Officer;

•      monitors the risk profile, performance, capital levels, exposures against limits and management and control of our risks;

•      monitors changes anticipated for the economic and business environment and other factors considered relevant to our risk profile;

•      oversees the development and ongoing review of appropriate policies that support our frameworks for managing risk; and

•      reviews significant issues that may be raised by internal audit as well as the length of time and action taken to resolve such issues.

From the perspective of specific types of risk, the Risk Management Committee role includes:

•      for credit risk - monitoring of the risk profile, performance and management of our credit portfolio and development and review of credit risk policies;

•      for market and liquidity risk - monitoring of the market risk profile, approving the Group Value at Risk and Net Interest Income at Risk limits and reviewing our funding plan and liquidity requirements;

•      for operational risk - monitoring of the operational risk profile, performance of operational risk management and controls and development and ongoing review of operational risk policies; and

•      for compliance risk - overseeing our compliance with applicable laws, regulations and regulatory requirements, reviewing and discussing with management and the external auditor any correspondence with regulators or government agencies and any published reports that raise material issues for us, and monitoring, where appropriate, complaints and whistleblower concerns.

The Risk Management Committee regularly updates the Board about its activities. It refers to the Audit Committee any matters that have come to its attention that are relevant to the Audit Committee and provides relevant periodic assurances to the Audit Committee.

ASXCGC’s Recommendations 7.1 and 7.2

Highlights in 2007

•      considered the requirements and changes under Basel II, including a review and approval of the Operational Risk Management Framework, and review of the Board Risk Appetite Statement and the Internal Capital Adequacy Assessment Process; and

•      ongoing consideration of the requirements and changes under the Anti-Money Laundering & Counter-Terrorism Financing legislation.

f)      Nominations Committee

Role of the Committee

The Nominations Committee assists the Board in fulfilling its oversight responsibility to shareholders. The Nominations Committee is responsible for:

•      developing and reviewing policies on Board composition, strategic function and size;

•      performance review process of the Board, its Committees and individual Directors;

•      succession planning for the Board including developing eligibility criteria for nominating Directors;

•      developing and implementing induction programs for new Directors and ongoing education for existing Directors;

•      recommending appointment of Directors to the Board;

•      considering candidates for appointment to the boards of relevant subsidiaries; and

•      reviewing our approach to corporate governance.

ASXCGC’s Recommendation 2.4

Highlight in 2007

•      reviewed the skills and experience required on the Board to assist with Board succession planning.

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g)     Remuneration Committee

Role of the Committee

The Remuneration Committee assists the Board by reviewing and approving our remuneration policies and practices. The Remuneration Committee:

•      reviews and approves executive remuneration policy;

•      reviews and makes recommendations to the Board on corporate goals and objectives relevant to the CEO and the performance of the CEO in light of these objectives;

•      makes recommendations to the Board on the remuneration of the CEO;

•      makes recommendations to the Board on the remuneration of Non-executive Directors, taking into account the shareholder approved fee pool;

•      approves contracts and remuneration packages for positions reporting directly to the CEO;

•      considers and evaluates the performance of senior executives when making remuneration determinations and otherwise as required;

•      reviews and makes recommendations to the Board on equity-based plans;

•      approves all performance recognition expenditure; and

•      oversees general remuneration practices across the Group.

The Remuneration Committee also reviews and makes recommendations to the Board concerning the recruitment, retention, termination, and succession planning policies and procedures for the CEO and for senior positions reporting directly to the CEO. This process was undertaken during the reporting year.

Independent remuneration consultants are engaged by the Remuneration Committee to benchmark our reward practices and levels against market practice.

ASXCGC’s Recommendations 1.2, 1.3 and 8.1

Highlights in 2007

•      reviewed fee arrangements for Non-executive Directors and Chairman; and

•      adopted a subsidiary remuneration framework which documents the fee arrangements that apply to Non-executive Directors of subsidiary entities.

h)     Corporate Responsibility and Sustainability Committee

Role of the Committee

The Corporate Responsibility and Sustainability Committee oversees and provides guidance to our commitment to operate our business ethically, responsibly and sustainably, consistent with evolving community expectations.

The Corporate Responsibility and Sustainability Committee:

•      reviews our direct and indirect social, environmental and ethical impacts;

•      oversees initiatives to enhance our sustainability;

•      agrees standards for our corporate responsibility and sustainability policies and practices and monitors compliance with these policies and practices;

•      monitors and oversees our social, environmental, governance and other material business risks (along with the Risk Management Committee), including our strategic and operational response to climate change; and

•      reviews and approves the independent assurance of our annual Stakeholder Impact Report.

Highlights in 2007

•      approved Westpac’s framework for managing climate change risks and opportunities; and

•      considered feedback and recommendations from directors and senior management following visits to the Cape York Partnership.

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5.     Audit governance and independence

a)     Approach to audit governance

The Board is committed to three core principles:

•      that our financial reports present a true and fair view;

•      that our accounting methods are comprehensive and relevant and comply with applicable accounting rules and policies; and

•      that the external auditor is independent and serves security holder interests.

Australian and international developments are monitored and practices reviewed accordingly.

b)     Engagement and rotation of the external auditor

Our independent external auditor is PricewaterhouseCoopers (PwC). PwC was appointed by shareholders at the 2002 AGM in accordance with the provisions of the Corporations Act.

The Board has adopted a policy that the responsibilities of the lead audit partner and review audit partner cannot be performed by the same people for longer than five years. The present PwC lead audit partner for our audit is David Armstrong, who assumed this responsibility in 2003. Having served five years, David Armstrong retired as lead audit partner after our 2007 balance date and has been succeeded by Ian Hammond. The present PwC review audit partner is David Prothero, who assumed this responsibility in 2005. Subject to applicable legislative requirements, the Board requires a minimum five-year ‘cooling off’ period before the lead audit partner or review audit partner are allowed back onto the audit team.

ASXCGC’s Recommendation 4.4

c)     Certification and discussions with the external auditor on independence

The Audit Committee requires the external auditor to confirm quarterly that they have maintained their independence and have complied with the independence standards as promulgated by Australian and international regulators and professional bodies. The Audit Committee meets separately with the external auditor without executive management being present at each meeting. Certification is provided in the Non-Audit Services and Independence declaration in the Directors’ report.

d)     Relationship with the external auditor

Our current policies on employment and other relationships with our external auditor include the following:

•      the audit partners and any employee of the external audit firm on the company’s audit are prohibited from being an officer of the company;

•      an immediate family member of an audit partner or any employee of the external audit firm on the company’s audit is prohibited from being a Director or an officer in a significant position at the company;

•      any former external audit partner or external audit firm’s former employees who have participated on the company’s audits are prohibited from becoming a Director or officer in a significant position at the company for at least five years, and after the five years can have no continuing financial relationship with the audit firm;

•      members of the audit team and audit firm are prohibited from having a business relationship with us or any of our officers unless the relationship is clearly insignificant to both parties;

•      the external audit firm, its partners and its employees who are members of the audit team on the company’s audit and their immediate family members are prohibited from having loans or guarantees with us or from having a direct or material indirect investment in the company;

•      our officers are prohibited from receiving any remuneration from the external audit firm;

•      the external audit firm is prohibited from having a financial interest in any entity with a controlling interest in the company; and

•      the audit team in any given year cannot include a person who had been an officer of the company during that year.

e)     Restrictions on non-audit services by the external auditor

To avoid possible independence or conflict issues, the external auditor is not permitted to carry out certain types of non-audit services for the company, including:

•      preparation of accounting records and financial statements;

•      financial information systems design and implementation;

•      appraisal or valuation services and other corporate finance activities;

•      internal audit services;

•      temporary or permanent staff assignments, or performing any decision-making or ongoing monitoring or management functions;

•      broker or dealer, investment adviser or investment banking;

•      legal, litigation or other expert services;

•      actuarial services;

•      recruitment services for managerial, executive or Director positions; and

•      certain taxation services to individual employees involved in a financial reporting oversight role of the preparation of the financial statements.

For all other non-audit services, use of the external audit firm must be assessed in accordance with our pre-approval policy, which requires that all non-audit services be pre-approved by the Audit Committee, or by delegated authority to a sub-committee consisting of one or more members where appropriate.

The breakdown of the aggregate fees billed by the external auditor in respect of each of the two most recent financial years for audit, audit-related, tax and other services is provided in Note 37.

The SEC is conducting an investigation of certain Australian registrants and public accounting firms regarding the SEC’s auditor independence requirements. As a part of this investigation, we furnished information to the SEC regarding the services rendered by our external auditor PwC, including information regarding services that the SEC staff may view as the secondment of PwC personnel to entities in our Group. We cannot predict the nature of any action the SEC might take as a result of its investigation. However, we consider it unlikely that the outcome of the investigation will have a material adverse financial effect on our Group.

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f)      Attendance at the Annual General Meeting

Our external auditor attends the AGM and is available to answer questions from shareholders on:

•      the conduct of the audit;

•      the preparation and content of the audit report;

•      the accounting policies adopted by us in relation to the preparation of the financial statements; and

•      the independence of the auditor in relation to the conduct of the audit.

g)     Internal audit

Group Assurance includes an independent and objective internal audit review function charged with evaluating, testing and reporting on the adequacy and effectiveness of management’s control of operational risk. Group Assurance has access to all entities in our Group and conducts audits and reviews following a risk-based planning approach.

The General Manager Group Assurance has a reporting line to the Chairman of the Audit Committee. Group Assurance provides reports to both the Audit Committee and the Risk Management Committee.

Audit and review reports are discussed widely in the Group and significant issues are reviewed at the Audit Committee and the Risk Management Committee.

6.     Controlling and managing risk

a)     Approach to risk management

We approach risk management by identifying, assessing and managing the risks that affect our business in accordance with a set of core risk management values. This approach enables the risks to be balanced against appropriate rewards and reflects our vision and values, objectives and strategies, and procedures and training. We have established policies for the oversight and management of our material business risks. A summary of these policies is available for viewing on our website.

We distinguish four main types of risk:

•      credit risk - the risk of financial loss where a customer or counterparty fails to meet their financial obligations;

•      market risk - the risk to earnings from changes in market factors, such as foreign exchange rates, interest rates, commodity prices and equity prices;

•      operational risk - the risk that arises from inadequate or failed internal processes, people and systems or from external events; and

•      compliance risk - the risk of failing to comply with our obligations under the law, based on the letter and spirit of a range of regulatory standards expected of us, and the risk of failure to meet our ethical standards.

In addition to and linked to these four main types of risk, we allocate resources to manage the following types of risks:

•      equity risk - the potential for financial loss arising from movements in the value of our direct and indirect equity investments;

•      insurance risk - the risk of not being able to meet insurance claims (related to insurance subsidiaries);

•      model risk - the risk of financial, reputation or operational losses arising because of a model;

•      interest rate risk - the risk associated with being forced to liquidate or unwind the balance sheet hedge portfolio;

•      liquidity risk - the risk of failing to adequately fund cash demand in the short term;

•      reputation risk - the risk of negative experiences and perceptions impacting our standing with stakeholders; and

•      business risk - the risk associated with the vulnerability of a line of business to changes in the business environment.

As these risks are interlinked, we take an integrated approach to managing them.

We are targeting accreditation by APRA to use the advanced internal ratings-based approach for managing credit risk and advanced measurement approach for operational risk under Basel II.

ASXCGC’s Recommendation 7.1

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b)     Risk management roles and responsibilities

The Board is responsible for reviewing and approving our risk management strategy, frameworks and key risk parameters, including determining our appetite for risk. Our risk management governance structure is set out in the table below.

Approval of our risk management frameworks and significant policies resides with the Risk Management Committee under powers delegated by the Board. These frameworks and policies for managing risk are reviewed and discussed by the relevant Executive Risk Committee and submitted for discussion and approval to the Risk Management Committee.

Executive management is responsible for implementing the Board-approved risk management strategy and developing policies, controls, processes and procedures to identify and manage risks in all of our activities.

Our business model recognises that the responsibility for managing risks inherent in our business lies with the business units. This responsibility includes developing business unit-specific policies, controls, procedures and monitoring and reporting capability, and is aligned with the Group Risk frameworks approved by the Risk Management Committee and Group policies developed by the Group Risk function.

Our risk management governance structure:

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c)     CEO and CFO assurance

The Board receives regular reports about our financial condition and operational results as well as that of our controlled entities. The CEO and the CFO annually provide formal statements to the Board that in all material respects:

•      the financial records of the company for the financial year have been properly maintained in that they:

•      correctly record and explain its transactions and financial position and performance;

•      enable true and fair financial statements to be prepared and audited; and

•      are retained for seven years after the transactions covered by the records are completed.

•      the financial statements and notes required by the accounting standards for the financial year comply with the accounting standards;

•      the financial statements and notes for the financial year give a true and fair view of the company’s and consolidated entities’ financial position and of their performance;

•      any other matters that are prescribed by the Corporations Act regulations as they relate to the financial statements and notes for the financial year are satisfied; and

•      the risk management and internal compliance and control systems are sound, appropriate and operating efficiently and effectively.

ASXCGC’s Recommendation 7.3

d)     Compliance Risk Management Framework

Our Compliance Risk Management Framework reflects the following core principles and practices:

•      compliance is about our responsibilities as employees, our culture and the systems and processes we use every day;

•      complying with the letter and spirit of regulatory standards is an essential part of the Group’s core values and is critical to our success as a leading Australian financial services organisation;

•      ensuring that the letter and spirit of regulatory standards are embedded into how we do business, how we conduct ourselves, how our systems and processes are designed and how they operate;

•      compliance with regulatory standards are the responsibility of everyone at every level of the Group. Visibility and accountability of senior management ensures a strong compliance culture;

•      the role of the compliance function is to guide the organisation in embedding compliance into how we do business; and

•      actively engaging with regulatory bodies and industry forums to ensure the maintenance of high standards across the industry.

Primary responsibility for managing compliance risk resides with business line management, who are required to demonstrate that they have effective processes in place consistent with our Compliance Risk Management Framework. Within each major business area there is a dedicated operational risk and compliance function, with specific responsibilities designed to guide compliance within that business as part of the business unit risk management team.

The Compliance Risk Management Framework utilises a range of mechanisms, including audit, file reviews, mystery shopping, customer surveys and operational risk assessments to measure the effectiveness of our compliance program. There is also a Group Compliance function, led by the Chief Operational Risk and Compliance Officer, which supports the Compliance Risk Management Framework. This team provides the infrastructure to facilitate compliance planning and reporting, provides specialist advice to business unit Compliance and Risk in implementing regulatory initiatives and policies and establishing compliance programs. It also provides analytical tools and advice for independent oversight of areas of strategic compliance risk and reports on potential weaknesses across the Group.

The Compliance Risk Management Framework is maintained by the Group Operational Risk and Compliance Committee and overseen by the Risk Management Committee, which receives regular reports from the Chief Operational Risk and Compliance Officer on the status of compliance across the company.

Key components of the framework established to support these principles include:

•      environment - Board and management oversight and accountability, culture and independent review;

•      identification - identifying obligations, developing and maintaining compliance plans and implementing change;

•      controls - policies, processes, procedures, communication and training and documentation; and

•      monitoring and reporting - monitoring, incident and breach escalation, reporting, issue management and managing regulatory relationships.

7.     Promoting ethical and responsible behaviour

a)     Our Principles for Doing Business and Code of Conduct

Our Principles for Doing Business set out the principles that govern our conduct and the behaviours that stakeholders can expect from us. The Principles apply without exception to all Directors, executives, management and employees, and are aligned to our core values of teamwork, integrity and achievement. Our Code of Conduct sets out the seven foundation principles, namely:

•      act with honesty and integrity;

•      respect the law and act accordingly;

•      respect confidentiality and do not misuse information;

•      value and maintain professionalism;

•      act as a team;

•      manage conflicts of interest responsibly; and

•      strive to be a good corporate citizen and achieve community respect.

ASXCGC’s Recommendations 3.1 and 3.3

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b)     Code of ethics for senior finance officers

Due to the nature of their roles, the CEO and principal financial officers are subject to our Code of Accounting Practice and Financial Reporting. This Code addresses the specific responsibilities that are borne by such officers in addition to their general responsibilities under our Code of Conduct. Our Code of Accounting Practice and Financial Reporting is in accordance with the requirements of SOX.

ASXCGC’s Recommendations 3.1 and 3.3

c)     Internal policies and procedures

In addition to our Principles for Doing Business, we are bound by a range of external industry codes, such as the Code of Banking Practice and the Electronic Funds Transfer Code of Conduct.

We also have a number of key policies to manage our compliance and human resource requirements. There is a range of guidelines, communications and training processes and tools to support these policies. These tools include an online learning module ‘Doing the Right Thing’ (revised 2006) which incorporates training for a range of key compliance requirements. Individual business units also have systems and procedures in place to support Group policies.

ASXCGC’s Recommendations 3.1 and 3.3

d)     Concern reporting and whistleblowing

All employees are encouraged to bring any concerns or problems to the attention of management, the human resources team (People and Performance) or the compliance team. This includes activities or behaviours that may not be in accord with the Principles for Doing Business, the Code of Conduct, Code of Accounting Practice and Financial Reporting, Insider Trading Policy, other policies, or other regulatory requirements or laws.

We provide a range of mechanisms to raise issues, including:

•              raising issues concerning fraud directly with our Financial Crime Control team;

•              making suggestions for more efficient processes via the on-line Ask Once program; and

•              raising concerns about ‘people issues’ such as harassment or discrimination directly with People and Performance through P&P Connect.

Concerns about breaches of our regulatory obligations or internal policies or procedures can be raised anonymously with the Chief Operational Risk and Compliance Officer through our internet-based whistleblowing reporting system, Concern Online, or by telephone or email through the Concern Hotline, which is a service provided by an external service provider. We have a Whistleblower Protection Policy to protect individuals who make reports about suspected breaches of our policies through these channels. The concern reporting system complies with the whistleblower provisions of all relevant legislative requirements and the Australian Standard AS 8004 (Whistleblower Protection Programs for Entities).

ASXCGC’s Recommendations 3.1 and 3.3

e)     Insider trading policy and trading in Westpac shares

Directors and employees are restricted from dealing in our shares (and certain other financial products) if they are in possession of inside information.

To highlight the importance of compliance with these requirements and to ensure high standards of conduct, we have an Insider Trading Policy which applies to all employees. In addition, for Directors and any employees who, because of their seniority or the nature of their position, come into contact with key financial or strategic information about the company all or most of the time (Prescribed Employees), additional restrictions apply. Those restrictions limit the periods in which the Directors and Prescribed Employees can trade in our shares or other company securities. A register of Prescribed Employees is maintained by the Group Operational Risk and Compliance team and regularly updated and notified to the relevant staff.

The periods in which Directors and Prescribed Employees can trade (Trading Windows) commence two business days after the release of our half - yearly and annual results. The Trading Windows are normally 56 days in length. However, the Chief Operational Risk and Compliance Officer has the discretion to extend each Trading Window by up to seven days if having a 56 day Trading Window would unreasonably restrict the exercise of employee scheme entitlements. Directors and Prescribed Employees must also notify Compliance of their intention to trade during those periods and confirm they do not have any inside information. Any trading remains subject to legal obligations to not trade while in the possession of inside information. Group Operational Risk and Compliance monitors the trading of the company’s shares by Directors and Prescribed Employees on a daily basis.

Under the Conflicts of Interest Policy, there are specific rules which apply to employee personal investments that may give rise to a conflict of interest, including personal investments held prior to employment with us.

Our employees (excluding BT Financial Group (BTFG) and Hastings Funds Management Limited (Hastings)) are also subject to the New Issues Policy. Some business units within Westpac are regularly involved in developing, structuring, funding and distributing financial products through a new issue. Employees cannot participate in these new issues where their position puts them in a real or perceived position of conflict with the interests of other customers. Equivalent restrictions exist for BTFG employees and Hastings’ employees under their own policies.

In addition to the policies which apply across the Group, where appropriate, further policies apply in specific businesses. For example:

•      relevant employees in Westpac Institutional Bank (WIB) (including WIB New Zealand), and BTFG are subject to comprehensive restrictions and procedures applicable to buying or selling other securities and financial products. These include seeking consent before dealing in Australian or New Zealand securities listed on the ASX and/or the New Zealand Exchange Limited (NZX), and a restriction on dealing in securities in which employees have close working relationships with specific companies. In addition to these employees, the restrictions apply to their immediate family members and entities in which the employees and/or their spouse have a beneficial interest or control or investment influence;

•      WIB employees are prohibited from personal account trading in securities issued by customers if they advise, originate, structure, trade, distribute, sell or research the securities; and

•      employees in Hastings are also subject to an Insider Trading Policy. In addition to that policy, Hastings maintains a prescribed financial products list and employee trading is confined to securities that do not appear on the list except during a four week Trading Window following the announcement of half and full year results and the AGM of the named company.

ASXCGC’s Recommendations 3.2 and 3.3

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8.     Remuneration framework

Details of our remuneration framework are included in the Remuneration report.

ASXCGC’s Recommendations 8.1, 8.2 and 8.3

9.     Corporate responsibility and sustainability

a)     Approach to corporate responsibility and sustainability

We believe that producing positive outcomes for all stakeholders through the way we conduct our business is an essential part of maximising financial returns for our shareholders over the longer term. For us, the adoption of sustainable and responsible business practices is an important long-term driver of performance and shareholder value.

This means conducting our business in a responsible, ethical and trustworthy manner, while accepting our accountability for our impacts on society and the environment. In doing so, our aim is to reduce our operational and reputation risk, and enhance operational efficiency, while contributing to a more sustainable society.

Our corporate responsibility and sustainability approach goes beyond ASXCGC’s Principles 3 and 7.

ASXCGC’s Recommendations 3.1 and 3.3

Highlights in 2007

•      BTFG became a signatory to the United Nations Principles for Responsible Investment;

•      partnered with Landcare Australia to establish the not-for-profit CarbonSMART initiative; and

•      renewed Westpac’s commitment to the Cape York Partnership for a further three years and implemented new indigenous employment initiatives.

b)     Reporting on our corporate responsibility and sustainability performance

Transparent and comprehensive reporting on all dimensions of our ESG performance is a core component of our governance and responsibility management.

Our ESG performance is reported annually through our annual Stakeholder Impact Report. That report is produced in accordance with the widely accepted reporting framework, the Global Reporting Initiative (GRI) and aims to address the issues that matter most to customers, employees, shareholders and the community.

The Stakeholder Impact Report is also independently assured against the AA1000 Assurance Standards. This assurance approach goes beyond testing the integrity of the data and also tests the effectiveness of underlying systems and processes and the extent to which our corporate responsibility and sustainability policies and processes are embedded across the organisation.

The key ESG performance metrics are also built into our half-yearly and annual financial results announcements.

We also actively participate in various independent external assessments by authoritative sustainability and governance rating organisations to ensure independent benchmarking of our performance against the highest global standards.

Our Stakeholder Impact Report and our performance in external sustainability assessments are available in the corporate responsibility section at ‘www.westpac.com.au/corporateresponsibility’.

ASXCGC’s Recommendations 3.1 and 3.3

Highlights in 2007

•      AAA,100 point, rating in the 2007 Carbon Disclosure Project Climate Disclosure Leadership Index (CDLI – one of only four companies, and the only bank, in the Global FT500 list to achieve this top rating;

•      the maximum overall corporate governance rating of 10.0 from Governance Metrics International (now maintained in eleven consecutive assessments since February 2004);

•      equal top rating for banks globally in the Dow Jones Sustainability Index for 2007/8 and global sector leader 2002-2006; and

•      2007 Gold Banksia Award from the Banksia Environmental Foundation - for sustained and significant efforts to reduce impact on the environment.

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10. Market disclosure

We are committed to maintaining a level of disclosure that meets the highest standards and provides all investors with timely and equal access to information. In achieving these standards we have a Board-approved Market Disclosure Policy, which governs how we communicate with our shareholders and with the investment community.

The policy reflects the ASX continuous disclosure requirements and the requirements of other exchanges where we have disclosure obligations. The policy spells out that information which a reasonable person would expect to have a material effect on the price of the company’s securities, must be immediately disclosed subject to certain exceptions.

The Disclosure Committee is chaired by the CFO and involves the CEO, senior executives, Group Secretary & General Counsel and General Manager Stakeholder Communications. The Disclosure Committee is responsible for making decisions on what should be disclosed publicly under the market disclosure policy, and for developing and maintaining relevant guidelines, including guidelines on information that may be price sensitive. The Group Secretary & General Counsel has responsibility for ensuring compliance with the continuous disclosure requirements of the listing rules of the ASX, NZX, NYSE and other exchanges, relevant securities and corporations legislation, and overseeing and coordinating information disclosure to regulators, analysts, brokers, shareholders, the media and the public.

All market announcements are released to each stock exchange where the company has ordinary shares or debt securities listed - ASX, NZX, NYSE, and the London, Singapore and Swiss stock exchanges.

ASXCGC’s Recommendations 5.1, 5.2 and 6.1

11. Shareholder communications and participation

We are also committed to giving all shareholders comprehensive, timely and equal access to information about our activities so that they can make informed investment decisions.

We employ a wide range of communication approaches including: direct communications with shareholders; publication of all relevant company information in the Investor Centre section of our website; and access to all market briefings and shareholder meetings via webcasting and teleconferencing facilities. Shareholders are also given the option to receive company information in print or electronic format.

A Shareholder Newsletter is also sent to all our shareholders with the half - year and annual dividend notices, which provides information on our performance and developments plus details on where to access further information. In addition, all shareholders are provided with contact numbers for both the Investor Relations Unit and the share registries should they require any further information.

Full participation of shareholders at the AGM is encouraged to ensure a high level of involvement and to deepen understanding of our strategy and goals. Proceedings of the AGM are also webcast live to maximise communication with shareholders. The proceedings can also be viewed on demand at a later time from our website.

Shareholders are invited to put forward questions that they would like addressed at the AGM at the time of receipt of the Notice of Meeting.

ASXCGC’s Recommendations 6.1 and 6.2

Highlights in 2007

•     informed all shareholders about recent amendments to the Corporations Act concerning the provision of annual reports to shareholders electronically; and

•     introduced a succinct short-form Annual Review, which includes a summary of the key information about Westpac’s performance and other relevant shareholder information.

12. Comparison of our corporate governance practices with NYSE listing rules

Under the NYSE listing rules, foreign private issuers that have American Depositary Shares (ADS) traded on the NYSE (such as Westpac), are permitted to follow home country practice in lieu of the NYSE listing rules. However, we are still required to comply with certain audit committee and additional notification requirements.

We are in compliance with all NYSE listing rules in all material respects.

Under the NYSE listing rules foreign private issuers are required to disclose any significant ways in which their corporate governance practices differ from those followed by domestic United States companies. We have compared our corporate governance practices to the corporate governance requirements of the NYSE listing rules and note the following potential significant difference:

•      equity compensation plans

The NYSE listing rules require shareholders be given the opportunity to vote on equity compensation plans and material revisions thereto, with limited exemptions.

We comply with the applicable domestic requirements under which we are not required to provide shareholders with the opportunity to vote on new equity-based compensation plans or material revisions to existing plans such as our 2002 equity-based reward plans. However, these plans have been extensively disclosed to shareholders in corporate governance statements since 2002 and since 2005 have been set out in detail in the Remuneration report.

In addition, we are seeking shareholder approval at the 2007 AGM for the new CEO’s Executive Securities Agreement.

13. NZX corporate governance rules and principles

As an overseas listed issuer, we are deemed to satisfy and comply with the NZX listing rules, provided that we remain listed on the ASX. The ASX, through ASXCGC Recommendations, and the NZX have adopted a similar ‘comply or explain’ general approach to corporate governance. However, the ASX Recommendations may materially differ from the NZX Corporate Governance Best Practice Code.

Further details about the ASXCGC’s Recommendations can be found on the ASX website ‘www.asx.com.au’

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Directors’ report

Our Directors present their report together with the financial statements of the Group, for the financial year ended 30 September 2007.

1.     Directors

The names of the persons who have been Directors during the period since 1 October 2006 and up to the date of this report are: Edward Alfred Evans (Chairman as of 1 April 2007), Leonard Andrew Davis (retired as Chairman and Director on 31 March 2007), David Raymond Morgan (Managing Director and CEO), Elizabeth Blomfield Bryan (Director as of 6 November 2006), Gordon McKellar Cairns, David Alexander Crawford, Carolyn Judith Hewson, Helen Ann Lynch (retired 14 December 2006) and Peter David Wilson.

Particulars of the skills, experience, expertise and responsibilities of the Directors at the date of this report, including all directorships of other listed companies held by a Director at any time in the past three years immediately before 30 September 2007 and the period for which each Directorship has been held, are set out below.

a)     Company Secretary

The details of the Company Secretaries as at 30 September 2007 are set out in the Corporate governance statement included in this report.

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