Assurance

Assurance is an essential element of transparency and disclosure in our public reporting process. We are committed to providing high quality, relevant and credible information that can be trusted as a complete picture of our performance. This means providing coverage of issues of importance and responding to the views of our stakeholders. In preparing our 2005 CSR Report, we have used the principles of the AA1000 Assurance Standard – materiality, completeness and responsiveness – as one of the tools to determine its content. Further information about this standard can be found at: www.accountability.org.uk

Independent assurance and audit not only adds credibility to the information we report, but the audit process itself provides a valuable opportunity for us to identify ways to improve our processes for data collection and management. This is the second Report we have produced and the second time we have undertaken the external audit process. Our external audit process has covered the full range of our performance included within the scope of this Report.

Our external auditors, URS Corporation, were requested to provide assurance and verification across the non-financial content and indicators in this Report. Specifically, they have been asked to provide an independent audit of NAB’s 2005 CSR Report, including a review of processes for stakeholder consultation and feedback.

Ernst & Young were requested to audit the financial information used to represent key aspects of our financial performance in the Economic performance section of this Report on pages 58-59. We have drawn the financial information from the 2005 Annual Financial and Concise Annual Reports, which have been audited by Ernst & Young. Therefore, we requested that Ernst & Young undertake an audit and form an opinion as to whether, in all material respects, the amounts used to calculate the financial information disclosed for the year ended 30 September 2005 in the Economic performance section have been properly extracted from the financial statements and financial records of the Group.

1. data accuracy, capture processes and controls
2. corporate processes and mechanisms in place for the preparation and delivery of the Report
3. corporate social responsibility policies and strategies, via a high level review
4. stakeholder engagement processes employed, via a review of output documentation and interviews with senior executives
5. adequacy and relevance of information contained in the Report.

• data collation, transcription and reporting processes in Melbourne, Australia; Auckland, New Zealand; and Glasgow and London, United Kingdom
• key statements made throughout the Report, including cross-checking of reported data
• processes and mechanisms in place for the preparation and delivery of the Report
• case study material contained in the Report
• data trails from regional retrieval to final Report for selected material parameters
• report drafts and the final Report for significant anomalies.

The three principles of the Assurance Standard, AA1000, namely completeness, materiality and responsiveness, were used as a basis, as were the URS Assurance Principles. The Global Reporting Initiative (GRI) Content Index was also reviewed to confirm that the Report has been prepared ‘in accordance’ with the GRI Guidelines. While the URS scope of work did not allow the detailed audit of all data sets contained in the Report, it was designed to provide a representative sample, as well as checking all key statements and discussion. The scope specifically excluded the verification of data and statements relating to regional and group-wide financial information.

URS, its parent companies and related companies have previously been engaged by NAB. The average annual value of work carried out by URS Corporation globally on behalf of NAB over the three year period to the date of this Statement was less than AUD $200,000 per year. This represents less than 0.02% of annual URS Corporation gross revenue based on our 2004 reporting year.

Minor inconsistencies were noted for less than 1% of the data audited. These inconsistencies were conveyed to, and corrected as far as possible by NAB’s CSR team. They were not considered to have a material, or potentially material, impact on data and statements included in the Report.

In relation to the AA1000 Principle of Completeness, there are areas for improvement with respect to systems and data quality. At the strategic level, numerous policies have been developed and further consolidation would assist the achievement of consistency across the regions. A framework outlining the source of each data item in the Report would improve the reporting process, along with an explanation of responsibilities and accountabilities for data capture and collation. Regional variations are inevitable. However, there is scope to improve communication where terminology or program names differ, to ensure that relevant data are captured from the UK and New Zealand. The approach to data capture and processing for environmental performance in Australia requires improvement. Data are relatively robust in some areas, such as electricity use, while others require a more substantive data set, such as water use.

In reviewing the AA1000 Principle of Materiality, through the interviews with senior executives and the review of stakeholder consultation outputs, it became clear that a culture change is underway within NAB. The Report confirms that corporate social responsibility has been placed firmly on the agenda at the highest level. It also discusses the risk management processes that have been developed within the organisation. In our interviews with selected personnel we found these processes to be driven from the top and well communicated. Furthermore, a genuine commitment to rebuilding stakeholder trust was evident.

Finally, with respect to the AA1000 Principle of Responsiveness, relationships with the community, customers, the regulators and employees have all been the focus of initiatives during the 2005 reporting period. The capture and reporting of Corporate Community Investment (CCI) data is substantial. Examples of NAB’s responsiveness include information relating to the encouragement and facilitation of personnel to take up allocated volunteer days and the collection of related data in Australia. The Report also discusses initiatives that have been established in the UK with Scottish schools, such as “Maths in a bag”, and the long established partnership with the Kiwi Recovery Trust in New Zealand. A notable change in focus to consider customer needs when developing products is included in the Report as demonstrated by the stepUP Loans and the No Interest Loan Scheme.

It has been noted that the organisation is willing to admit its mistakes and weaknesses externally and interviews with senior executives reaffirm the organisation’s long-term commitment to developing a culture of openness and transparency.

We have also performed an independent audit of the financial reports of the Company and the Group for the year ended 30 September 2005 (the “Financial Reports”). The Group comprises both the Company and the entities it controlled during that year. Our audit report on the Financial Reports was signed on 1 December 2005, and was not subject to any qualification.

The Financial Information has been prepared based on information extracted from the Financial Reports and financial records of the Group. We disclaim any assumption of responsibility for any reliance on this Audit Report or on the Financial Information to any person other than the Company and the members of the Company or for any purpose other than that for which it was prepared.

Our audit has been conducted in accordance with Australian Auditing Standards. Our procedures included agreement, on a test basis, of the amounts used to calculate the Financial Information to the Financial Reports and financial records of the Group. These procedures have been undertaken to form an opinion whether, in all material respects, the amounts used to calculate the Financial Information have been properly extracted from the Financial Reports and financial records of the Group.

The audit opinion expressed in this report has been formed on the above basis.