Scotia Group Jamaica Limiteddr.scotiabank.com/images/jm/en/files_AboutScotiabank/2987.pdf · W e...

Group

Scotia Group Jamaica Limited

Creating opportunities...Corporate & Commercial

Demand Loans • Letters of Credit • Lines of Credit • Trade Finance

Retail Savings & Chequing Accounts • Term Deposits • Debit Cards

Short/Medium/Long Term Loans • Credit Cards Electronic Banking & Merchant Services

Small Business Executive and Business Credit Cards • Credit Line • Chequing Account

Demand Loans • Electronic Business Banking Services

Wealth ManagementSecurities Trading • Pension & Asset Management • Stock Brokerage Insurance Unit Trusts & Mutual Funds • Private Client Group Services

InsuranceLife Insurance Products • Long Term Savings • Creditor Life Protection

MortgagesHome Improvement • Purchase Land

Build a House • Buy a Home

2007 ANNUAL REPORT

1

Mission Statementand Core Values

We are committedto being the institution

of choice in the financial sector,providing superior products

and servicesand being a good corporate citizento the benefit of our customers,shareholders and staff.

Our core values guide the spirit of our actionsand communications. They instruct us on howto best deliver our core purpose, and how totreat our customers so they believe that weare worthy of their business - that our valuesreflect their own. Our aim is to demonstrateour core values whenever we communicate.Often, it’s the reassurance customers need totry new products and services. What followsare our core values and what they mean.

INTEGRITY

We exhibit integrity by always interactingwith others ethically and honourably.

RESPECT

We exhibit respect by empathizing andfully considering the diverse needs ofothers.

COMMITMENT

We are fully committed to achievingsuccess for our customers, our teams andourselves.

INSIGHT

We use our insight and high level ofknowledge to pro-actively respond withthe right solutions.

SPIRIT

Our spirit enriches our work environmentwith teamwork, contagious enthusiasmand a “can-do” attitude.

Mission StatementCore Values

2007 ANNUAL REPORT

2

Scotia Group Jamaica LimitedPerspective

Performance:$2.48EPS is the net income a company hasgenerated per common share. It is calculated by dividing net income availableto shareholders by the average number ofcommon shares outstanding.

Earnings Per Share (EPS)Table o f Contents

1 Mission Statement & Core Values

2 Scotia Group Jamaica LimitedPerspective

3 Financial & Other Highlights

5 Notice of Annual General Meeting

7 Directors’ Report

8 Ten-Year Statistical Review

12 Report to our Shareholders

15 Corporate Governance

20 Our Awards

21 The President’s Council

26 Our Subsidiaries

Creating Opportunities for: 30 - Individuals36 - Business42 - Youth & Communities48 - Employees52 - Customer Experience

54 Management’s Discussion & Analysis

66 Shareholdings

67 Financial Report 2007-Scotia Group Jamaica Limited

79 Notes to the Financial Statements

148 Financial Report 2007-The Bank of Nova Scotia Jamaica Ltd.

163 Notes to the Financial Statements

228 Economic Review

230 Glossary

232 Subsidiaries, Board Members and Senior Officers

234 Senior Management Officers

236 Branches & Team Leaders

Proxy Form

Productivity Ratio

Performance:24.01%ROE measures how well Scotia Group is usingcommon shareholders' invested money. It iscalculated by dividing net income available tocommon shareholders by average commonshareholders' equity.

Return on Average Equity (ROE)

Performance:26.94%The Risk Based Capital Adequacy Ratio is ameasure of Scotia Group's overall strength. It requires that a ratio is maintained betweenScotia Group’s capital base and the aggregateof its risk weighted assets at no less than 10%.Scotia Group has continued to maintain astrong Capital Adequacy Ratio.

Risk Based Capital Adequacy Ratio

Performance:55.34%The Productivity Ratio measures Scotia Group’soverall efficiency. It expresses non-interestexpenses as a percentage of total revenue. A lower ratio indicates better productivity. By this measure, Scotia Group has historicallybeen significantly better than the internationalbenchmark of 60%.

2007 ANNUAL REPORT

3

Financial & Other Highlights

Scotia Group Jamaica Limited

Where necessary, comparative figures have been restated to conform with changes inpresentation in the current year.

2007 ANNUAL REPORTFinancial & Other Highlights (continued)

4

The Bank of Nova Scotia Jamaica Limited (Consolidated)

6002 ,13 rebotcO7002 ,13 rebotcOsthgilhgiH laicnaniF

802,502stessA latoT 048,991 327,85stnemtsevnI latoT 541,84 601,37sessol rof noisivorp fo ten snaoL 885,95 478,721cilbup eht yb stisoped latoT 082,311 208,72ytiuqe 'sredloherahS 093,72 767,61emocni tseretni teN 325,51 158,6xat retfa tiforP teN 997,6

%53.62%15.42EOR


707,33stessA latoT 441,92 282,23stnemtsevnI latoT 233,61 479,62dnuF s'redlohyciloP 907,32 475,6ytiuqe 'sredloherahS 232,5 183,1xat retfa tiforP teN 282,1

%72%32EOR225,27)#( seiciloP MINTaitocS ecrofnI 662,66

The Scotia Jamaica Building Society


325,8stessA latoT 309,7 089,4 snoisivorP fo ten - oiloftroP egagtroM 949,3 925,2stnemtsevnI latoT 021,3 005,4stisoped latoT 445,4 438,2ytiuqe 'sredloherahS 544,2 983xat retfa tiforP teN 743

%40.51%15.41EOR

Scotia Jamaica Life Insurance Company Limited

Dehring Bunting & Golding Limited (Consolidated)

353,65stessA latoT 947,73 858,13stnemeerga esahcruper rednu dlos seitiruceS 228,71 060,41 dnuF seitiruceS .tvoG dna tnemeganaM latipaC 517,11 059,5ytiuqe 'sredloherahS 804,4 527emocnI tseretnI teN 558 686xat retfa tiforP teN 307

%44.81%69.12)dezilaunnA( EOR

sthgilhgiH laicnaniF

2007 ANNUAL REPORT

1

Notice ofAnnual General Meeting

NOTICE IS HEREBY GIVEN that the First Annual General Meeting of SCOTIA GROUP JAMAICALIMITED will be held on Friday the 15th day of February, 2008 at 10:00 a.m. at the Jamaica PegasusHotel, 81 Knutsford Boulevard, Kingston 5, Jamaica for the following purposes, namely:-

1. To consider the Company’s Accounts and the Reports of the Directors and the Auditorsfor year ended October 31, 2007 and to consider and (if thought fit) pass the followingresolution:

Resolution No. 1“That the Directors’ Report, the Auditors’ Report and the Statements of Account of theCompany for the year ended October 31, 2007 be approved and adopted.”

2. To approve and ratify interim dividends: -

To consider and (if thought fit) pass the following resolution:

Resolution No. 2“That the interim dividends paid of 30 cents on July 5, 2007, 30 cents on October 4, 2007and 30 cents on January 8, 2008 be and are hereby ratified.”

3. To elect Directors and fix their remuneration.

All Directors retire from office pursuant to Article 107 of the Articles of Incorporationof the Company. Mr. Robert Pitfield, Hon. Mayer Matalon, Ms. Barbara Alexander,Mr. Anthony Chang, Professor Celia Christie, Hon. William Clarke, Dr. Jean Dixon,Mr. Mark Golding, Miss Muna Issa, Mr. Jeffrey Hall, Mr. Charles Johnston,Mr. Warren McDonald, Mr. Pasquale Minicucci, Dr. Herbert Thompson,Professor Stephen Vasciannie, Mr. Richard Waugh and Miss Stacie Ann Wright whombeing eligible, offer themselves for election.

Resolution No. 3a) “That retiring Director Robert Pitfield be and is hereby elected a Director of the Company.”b) “That retiring Director Mayer Matalon be and is hereby elected a Director of the Company.”c) “That retiring Director Barbara Alexander be and is hereby elected a Director of the Company.”d) “That retiring Director Anthony Chang be and is hereby elected a Director of the Company.”e) “That retiring Director Celia Christie be and is hereby elected a Director of the Company.”f) “That retiring Director William Clarke be and is hereby elected a Director of the Company.”g) “That retiring Director Jean Dixon be and is hereby elected a Director of the Company.”h) “That retiring Director Mark Golding be and is hereby elected a Director of the Company.”i) “That retiring Director Muna Issa be and is hereby elected a Director of the Company.”j) “That retiring Director Jeffrey Hall be and is hereby elected a Director of the Company.”k) “That retiring Director Charles Johnston be and is hereby elected a Director of the Company.”l) “That retiring Director Warren McDonald be and is hereby elected a Director of the Company.”m) ”That retiring Director Pasquale Minicucci be and is hereby elected a Director of the Company.”n) “That retiring Director Herbert Thompson be and is hereby elected a Director of the Company.”o) “That retiring Director Stephen Vasciannie be and is hereby elected a Director of the Company.”p) “That retiring Director Richard Waugh be and is hereby elected a Director of the Company.”q) “That retiring Director Stacie Ann Wright be and is hereby elected a Director of the Company.”

2007 ANNUAL REPORTNotice of Annual General Meeting (continued)

4. To appoint Auditors and authorise the Directors to fix the remuneration of the Auditors.To consider and (if thought fit) pass the following resolution:

Resolution No. 4“That KPMG, Chartered Accountants, having agreed to continue in office as Auditors, be andare hereby appointed Auditors of the Company to hold office until the next Annual GeneralMeeting at a remuneration to be fixed by the Directors of the Company.”

5. Any other business for which due notice has been given.

BY ORDER OF THE BOARD

David NoëlSecretaryNovember 26, 2007

REGISTERED OFFICEScotiabank CentreDuke & Port Royal StreetsKingston

A member entitled to attend and vote at this meeting may appoint a Proxy to attend and vote in his/her stead. A Proxyneed not also be a Member of the Company. Enclosed is a Proxy Form for your convenience, which must be lodged at theCompany’s Registered Office at least forty-eight hours before the time appointed for holding the meeting. The Proxy Formshall bear the stamp duty of $100.00 before being signed. The stamp duty may be paid by adhesive stamp.

6

2007 ANNUAL REPORT

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Directors’ Report

The Directors submit herewith the Statement of Consolidated Revenue, Expenses,Unappropriated Profits, Assets and Liabilities of the Group for the year ended October 31,2007.

The Consolidated Statement of Revenue and Expenses shows pre-tax profit for the yearof $10,167 Million from which there has been provided $2,557 Million for corporateincome tax, leaving a balance of $7,610 Million, of this amount $7,493 is attributable tostockholders of the company.

The appropriation of earnings includes:

An interim dividend of 30 cents per stock unit payable to stockholders on record asat December 4, 2007 payable on January 10, 2008. This brings the total distributionfor the year to $1.19 per stock unit compared with $1.07 per stock unit for theprevious year.

In view of the interim dividends paid, and to be paid, as mentioned above, the Directorsdo not recommend the declaration of a final dividend at the Annual General Meeting tobe held on February 15, 2008.

All Directors retire from office pursuant to Article 107 of the Articles of Incorporation ofthe Company. Mr. Robert Pitfield, Hon. Mayer Matalon, Ms. Barbara Alexander, Mr. Anthony Chang, Professor Celia Christie, Hon. William Clarke, Dr. Jean Dixon, Mr. Jeffrey Hall, Mr. Mark Golding, Miss Muna Issa, Mr. Charles Johnston, Mr. WarrenMcDonald, Mr. Pasquale Minicucci, Dr. Herbert Thompson, Professor Stephen Vasciannie,Mr. Richard Waugh and Miss Stacie Ann Wright whom being eligible offer themselves forelection.

Hon. William McConnell and Mr. Joseph M. Matalon resigned from the Board onNovember 15, 2007 and November 26, 2007, respectively. The Board wishes to expressits sincere appreciation to Hon. William McConnell and Mr. Joseph M. Matalon for theircontributions to the Company.

The Auditors, KPMG, have signified their willingness to continue in office.

Your Directors wish to thank the Management and Staff of the Company for theirperformance during the year under review.

On behalf of the Board

R.H. PitfieldChairman, Kingston, JamaicaNovember 26, 2007

2007 ANNUAL REPORT

Ten-YearStatistical Review

8

(1) Amounts have been retroactively adjusted to reflect the one-for-one bonus issue on March 10, 2005 .

Where necessary, comparative figures have been restated to conform with changes in presentation in the current year.

2007 ANNUAL REPORT

9

Creating Creating

““TThhee BBaannkk ooff NNoovvaa SSccoottiiaammuusstt bbee ddeeffiinneedd aass

tthhee BBaannkk tthhaatt ttrruullyyuunnddeerrssttaannddss iittss

ccuussttoommeerrss..

TThhee ddyynnaammiiccss ooff tthhee ffuuttuurree ddiiccttaattee tthhaatt wwee

sshhaarrppeenn oouurr iinnssttiinnccttss ttooccrreeaattee aann eevveenn ddeeeeppeerr

rreellaattiioonnsshhiipp -- nnoott jjuusstt aann uunnddeerrssttaannddiinngg ooff wwhheerree oouurr ccuussttoommeerrss aarree nnooww,, bbuutt aa ccaallccuullaatteedd vviissiioonn

ffoorr tthhee ooppppoorrttuunniittiieess tthhaatt wwee ccaann ccrreeaattee

ttooggeetthheerr..””

Robert H. PitfieldChairman

10

OpportunitiesOpportunities

““WWee hhaavvee wwoorrkkeedd hhaarrdd aatteelleevvaattiinngg tthhee ssttrraatteeggiiccaarrcchhiitteeccttuurree ooff tthhee BBaannkk ssoo tthhaatt eevveerryy mmoovvee iiss iinnffuusseedd wwiitthhtthhee sseennssee ooff nnuurrttuurriinngg tthheeppoossssiibbiilliittiieess.. FFrroomm ffiinnaanncciinnggnnaattiioonnaall iinnffrraassttrruuccttuurree pprroojjeeccttss,, ttoorreeffiinniinngg tthhee TTeelleeSSccoottiiaa eexxppeerriieenncceeooff aa ccuussttoommeerr iinn CCllaarreennddoonn,, wwee ccllaaiimm eevveerryy ooppppoorrttuunniittyy aass aa wwaayy ttoo bbuuiilldd lliiffeettiimmeeccoonnnneeccttiioonnss wwiitthh oouurr ccuussttoommeerrss..OOuurr ccuussttoommeerrss ccaann iinn ttuurrnn ffooccuussoonn tthheeiirr ggooaallss,, kknnoowwiinngg tthheeyy ccaannddeeppeenndd oonn tthhee eexxppeerrttiissee aannddiimmaaggiinnaattiioonn ooff eevveerryy oonnee aatt SSccoottiiaaGGrroouupp..””

William E. Clarke, OJ, CDPresident & Chief Executive Officer

for our Shareholdersfor our Shareholders11

2007 ANNUAL REPORTReport to our Shareholders

12

iscal 2007 was anotherdemonstration of your company’sproven ability to innovate, integrateand execute initiatives to drive growth

through the competitive advantage that ScotiaGroup Jamaica Limited brings to themarketplace.

Scotia Group is the most profitable companylisted on the Jamaica Stock Exchange, with a2007 net income of $7,493million available toequity shareholders of the company.

While we have built leading positions in manycustomer segments (such as retail lending anddeposits) and product lines in banking, we seegreat potential for building furtheropportunities and therefore will be placingparticular focus in 2008 on areas such asmortgage lending, small business banking,capital markets and wealth management.

We continue to be committed to building afinancial services group that people andorganizations throughout Jamaica instinctivelyseek out to help them create, build, preserveand grow the wealth they need to seizeopportunities, achieve their goals and realizetheir dreams.

Record Financial Performance in 2007Scotia Group achieved record results for 2007with net income available to commonshareholders of $7,493 million, representing a10.2% increase over last year, and 11consecutive years of increased profits.

Revenue increased by 15.85%, driven bystrong growth in both interest and non-interest revenues. The acquisition of DehringBunting & Golding Limited (DB&G) during2007 also contributed to the increased profits.

This strong financial performance has enabledus to continue our record of increasingdividends paid to you, our shareholders. 2007was our 40th consecutive year of payingdividends to shareholders with the dividendincreasing by 8.4% over that of 2006.

Our 2007 financial results are commendable,given the continued reduction in marketinterest rates, resulting in reductions in interestmargins. Our revenuemix continues to be welldiversified, and our focus on growing volumeand increasing non-interest revenue hasallowed us to continue to meet our financialtargets.

We have consistently demonstrated our abilityto manage expenses, and will continue to doso in 2008, with the objective of achieving apositive operating leverage of 2%.

Creating Shareholder ValueOne of our most important moves in 2007 topursue growth in the wealth managementbusiness was the acquisition of DB&G, thethird-largest stock brokerage in Jamaica. InSeptember, we consolidated the operations ofScotia Jamaica Investments ManagementLimited with DB&G, resulting in combinedassets under management of $55.5 billion,which laid the foundation for the investmentarm of the Group to become a leader in thewealth management business in Jamaica.Clients of both DB&G and Scotiabank willbenefit from a more comprehensive set ofproducts and services, with access to thelargest financial services distribution networkin Jamaica.

By building on these and other opportunities,we aim to generate strong, consistent growthacross all our business lines.

Growth StrategyFor the past 10 years, we have focusedprimarily on generating organic growththrough process improvement, increasingcustomer satisfaction and product innovation.There is nothing more important thanexecuting our current growth strategy as webuild on the opportunities we have with ourcustomers and prospects in our currentmarket. However, our ability to pursuemultiple paths to growth is a Scotia Group

F

2007 ANNUAL REPORT

13

hallmark. Acquisitions, when the risks are inline with the potential rewards, provide uswith a strategic avenue for growth. Wetherefore remain committed to seeking outand taking advantage of these opportunitiesas they become available.

Unique AdvantagesWhile our people and our culture representour greatest advantages, there are some keyattributes that give us a unique advantage inthe Jamaican marketplace. These includethe size of our franchise, our internationalconnections and our extensive network acrossJamaica, as evidenced by our sales growthacross product lines in 2007. Retail loans,including mortgages, grew in excess of $8billion during 2007. Our internationalconnections allow us to create operationalefficiencies, such as the recently concludeddata centre consolidation, which migrated ourmain technology platform offshore.

Flawless execution is a core strength of theScotia Group. Our history and culture ofsuperior execution enables us to do things theright way, on schedule, on budget and in waysthat enhance the customer experience.

It is the combination of these unique attributesthat enable us to create opportunities andvalue for our customers and our shareholders.

Focus for 2008For 2008, we will continue our intense focuson growth in all our business lines and onenhancing our customer experience.Additional areas of focus will be Small &Medium Enterprises (SME), Wealth, CapitalMarkets and Expense Control.

We remain committed to our overarchingobjective of creating, encouraging andsustaining a truly customer-centric culture, tofoster a Scotia Group experience that ischaracterized as reliable, convenient, personaland professional. A two-year action plan hasbeen charted, central to which, is theestablishment of the Customer ExperienceAdvisory Council, co-chaired by our seniorexecutives, through which organization-wide

service performance will be reviewed andaddressed. This governance structure willoversee the implementation of dailymeasurement tools and a complaintsmanagement system designed to collect,monitor and trend customer servicebreakdowns across the entire Group toaddress these deficiencies.

During the past year, Scotiabank launched itsSME strategy to meet the needs of targetedbusiness segments across the marketplace.This led to us investing in intensive trainingworkshops to adequately prepare our SmallBusiness Banking Officers to serve this marketsegment. This was complemented by areorganization of the back-office processes tocreate further efficiencies. The result of thiscombination was an increased capacity forrelationship management.

Our product strategy resulted in thedevelopment and launch of a credit line forbusiness and two credit cards – the ScotiabankAAdvantage Business Executive MasterCardCredit Card which offers travel miles andhigher MasterCard awards which can be usedduring travel abroad, and the ScotiabankMasterCard Business Credit Card. CriticalIllness Insurance is now available to businessowners to cover the card balance in the eventof cancer, heart attack or a stroke.

Over the next year, we will focus on three mainareas: creating opportunities to leverage ourValue Proposition of “Working Together ToGrow Your Business” by partnering with keysmall business associations to betterunderstand their needs while simultaneouslyidentifying opportunities for advisory services,developing industry-specific products, andcontinually training the SME task force so thatwe can ensure a consistently exceptionalexperience for our customers.

We will be relying on our WealthManagement division, consisting of ScotiaPrivate Client Group, Scotia Jamaica LifeInsurance Company Limited and DB&G, for astrategic re-positioning of our incomestatement to one that is less dependent on

2007 ANNUAL REPORTReport to our Shareholders (continued)

14

interest margins, given economic trends andthe maturity of our traditional retail andcommercial businesses.

The division will therefore pursue innovativefee-based product development, which willnow be distributed through our much-expanded network. We will also undertake tomake the process of doing business across thegroup of companies as seamless as possible byoffering enhancements on our combinedplatforms within our regulatory framework toview holdings and transact business moreefficiently.

Finally, the development of a Capital Marketsoffering will leverage the expertise that wehave developed and acquired not only inWealth Management, but also in ourCorporate and Commercial Banking Unit.These synergies will be leveraged to meet theneeds of our larger commercial customers and

cement our position as an all-encompassingfinancial services provider.

Our productivity ratio over the years has beenthe benchmark for the industry, and while weare at a point where achieving productivitygains has become very challenging, we remaincommitted to managing our expenses andmaintaining our long-run operating leveragetargets. We have begun, and will continueover the 2008 fiscal year, to implementtechnology that will drive efficiency, as well asto re-examine and refine all processes andprocurement arrangements that are non-standard and inefficient.

We believe that our focus and commitment togrowth and development in each of thesestrategic areas will allow us to remain relevantin the market and to remain the premierfinancial service institution in Jamaica.

ROBERT H. PITFIELDChairman

WILLIAM E. CLARKE, OJ, CD

Chairman

2007 ANNUAL REPORT

15

Corporate Governance

Scotia Group believes that soundand effective corporategovernance practices are essentialto our long-term success. These

practices are designed to preserve theindependence of our Board of Directorsand to strenghten its advisory andoversight role on management’soperations. In 2007, these practices wereclearly set out in a Corporate GovernancePolicy which has been approved by theBoard of Directors.

Board independence ensures that theScotia Group is managed for the long-term benefit of all stakeholders –shareholders, employees, customers andthe communities in which we operate. Asa result, as at October 31, 2007, 11 of our15 current Directors were independent ofScotia Group, its parent or its affiliates(and 13 members of the Board were non-executive).

The Board also ensures that keycommittees (such as the Audit & ConductReview Committee and the HumanResources Committee) are composed ofindependent Directors who have therequisite skills to carry out their respectivemandates.

The effectiveness of any Board is alsodependent on the quality of the individualswho serve as Directors. We pride ourselveson having individuals serving on the Boardwho are business and community leadersand have distinguished themselves invarious fields of business and academia.Our Directors have contributedsignificantly to the Group’s success overthe years, and we are confident that theywill continue to do so in the future.

From time to time, new Directors areappointed to the Board who are able toprovide a different perspective to theBoard’s deliberations. The process ofcontinually appointing new Directors asothers retire, ensures that the Boardcontinues to evolve in changing times.

The Group is committed to goodcorporate governance and will continue tocomply with international best practicesand guidance from the Jamaica StockExchange, the Bank of Jamaica and theFinancial Services Commission.

2007 ANNUAL REPORT

Corporate Governance (continued)

Scotia Group Jamaica LimitedBoard of Directors

Hon. W. E. Clarke, OJ, CD, (left)Mr. William Clarke, President and CEO of theBank,wasappointed to theBoard of the BankonMay 18, 1995. He is a member of the Executiveand Pension Committees of the Board and isalso a Director of The Bank of Nova ScotiaJamaica Limited, Scotia Jamaica InvestmentManagement Limited, The Scotia JamaicaBuilding Society, Scotia Jamaica Life InsuranceCompany Limited, Scotia Jamaica GeneralInsurance Brokers Limited, Scotia FinancialServices Limited, Scotiabank JamaicaFoundation and Dehring Bunting & GoldingLimited.

RR. H. Pitfield, Chairman (centre)Mr. Robert H. Pitfield is the Executive VicePresident, International Banking, of the parentCompany, The Bank of Nova Scotia, Canada andis responsible for all of the Bank’s retail andcommercial operations outside of Canada & theUSA. He was appointed Chairman of ScotiaGroup Jamaica Limited on March 15, 2007 andThe Bank of Nova Scotia Jamaica Limited on May22, 2003.

Miss M. M. Issa, (right)Miss Muna Issa is the Treasurer of SuperClubs.She has been a Director of the Bank sinceAugust 26, 1999 and is also a member of theExecutive,Audit&ConductReviewandHumanResources Committees of the Board. Miss Issais the Chairperson of the Board of ScotiaJamaica Life Insurance Company Limited and amember of the Board of The Scotia JamaicaBuilding Society, Dehring Bunting & GoldingLimited and DB&G Unit Trusts ManagersLimited.

Miss S. A. Wright (left)Miss Stacie Ann Wright is the Executive VicePresident and Chief Financial Officer of theBank and was appointed to the Board of theBank on September 1, 2005 and is also amember of the Pension Committee. MissWright is a Director of Scotia Jamaica LifeInsurance Company Limited, The ScotiaJamaica Building Society, Scotia JamaicaInvestment Management Limited, ScotiaJamaica Financial Services Limited,Scotiabank Jamaica Foundation, DehringBunting & Golding Limited and DB&GMerchant Bank Limited.

J. M. Matalon (right)Resigned November 2007Mr. Joseph M. Matalon is the Chairman andChief Executive Officer of the I.C.D. GroupLimited. Mr. Matalon was appointed a Directorof the Bank on September 1, 2005 and is amember of the Executive and Audit &Conduct Review Committees of the Board.

16

2007 ANNUAL REPORT

17

W. A. McDonald (left)Mr. Warren McDonald is the ManagingDirector and Chief Executive Officer ofBerger Paints Jamaica Limited. Mr.McDonald was appointed to the Board ofthe Bank on February 5, 2001 and is amember of the Human ResourcesCommittee of the Board. He is also aDirector of Scotia Jamaica InvestmentManagement Limited.

Prof. C.D.C. Christie Samuels, (right)Celia Christie-Samuels is a Professor ofPaediatrics and a specialist in PaediatricsInfectious Diseases, Epidemiology andPublic Health at the University of theWest Indies. Professor Christie Samuelshas been a Director of the Bank sinceFebruary 5, 2001 and is a member of theHuman Resources Committee of theBoard. She is also a Director of ScotiaJamaica Life Insurance Company Limited.

R. E. Waugh, (left)Mr. Richard E. Waugh is the President of The Bank of Nova Scotia, Canada. Mr. Waugh is a member of the Board ofDirectors of The Bank of Nova Scotia (BNS)and several of the BNS subsidiaries andaffiliates. He was appointed to the Board ofDirectors of The Bank of Nova ScotiaJamaica Limited on February 20, 2003.

Hon. M. M. Matalon, OJDeputy Chairman (centre)Mr. Mayer Matalon is the Deputy Chairmanof the I.C.D. Group Limited. He is also theDeputy Chairman of the Boards of the Bankand of Scotia Group Jamaica Limited; and isChairman of the Executive Committee ofthe Board. Mr. Matalon has been a Directorof the Bank since 1966.

Dr. J. A. Dixon, CD (right)Dr. Jean Dixon is the PermanentSecretary in the Ministry of Industry,Commerce and Investments. She hasbeen a Director of the Bank sinceFebruary 19, 1998 and is a member ofthe Pension Committee of the Board. Dr.Dixon is also the Chairperson of theBoard of Directors of The Scotia JamaicaBuilding Society and Scotiabank JamaicaFoundation. She is also a Director ofDB&G Unit Trusts Managers Limited.

2007 ANNUAL REPORT

Corporate Governance (continued)

Scotia Group Jamaica LimitedBoard of Directors (continued)

18

Hon. W. A. McConnell, OJ, CD (left)Resigned November 2007Mr. William McConnell is the ManagingDirector of Lascelles DeMercado CompanyLimited. He has been a Director of the Banksince February 18, 1988. He is also amember of the Audit & Conduct ReviewCommittee of the Board and Chairman ofScotia Jamaica Investment ManagementLimited.

Dr. H. J. Thompson, CD (right)Dr. Herbert Thompson is the President ofThe Northern Caribbean University. He wasappointed to the Board of the Bank onAugust 19, 1998 and is a member of theExecutive and Human ResourcesCommittees of the Board. Dr. Thompson isalso Deputy Chairman of the Board of TheScotia Jamaica Building Society.

EXECUTIVE COMMITTEE OF THE BOARD

Hon. M. M. Matalon, OJ

Chairman

Hon. W. E. Clarke, OJ, CD

Miss M. M. IssaJ. M. MatalonDr. H. J. Thompson, CD

Prof. S. C. Vasciannie

AUDIT & CONDUCT REVIEWCOMMITTEE

J. M. MatalonChairman

A. V. ChangMiss M. M. IssaC. H. JohnstonHon. W. A. McConnell, OJ, CD

Prof. S. C. Vasciannie

BBooaarrdd && CCoommmmiitttteeee

2007 ANNUAL REPORT

19

C. H. Johnston (left)Mr. Charles Johnston is the Chairman andManaging Director of Jamaica Fruit andShipping Company Limited. He wasappointed to the Board of the Bank onAugust 22, 2002 and is a member of theAudit & Conduct Review and HumanResources Committees of the Board.Mr. Johnston is also a Director of DB&GMerchant Bank Limited.

Prof. S. C. Vasciannie (centre)Stephen Vasciannie is currently Professor ofInternational Law at the University of the WestIndies and Head of the International Division ofthe Attorney General’s Chambers. ProfessorVasciannie was appointed a Director of theBank on September 1, 2005. He is a memberof the Executive, Audit & Conduct Review andPension Committees of the Board. ProfessorVasciannie is a Director of Scotia Jamaica LifeInsurance Company Limited, Scotia JamaicaInvestment Management Limited andChairman of Dehring Bunting & GoldingLimited.

A. V. Chang, (right)Mr. Anthony Chang is the Managing Directorof T. Geddes Grant Limited. He was appointedto the Board of the Bank on February 5, 2001and is a member of the Audit & ConductReview and Pension Committees of the Board.Mr. Chang is also a Director of Scotia JamaicaLife Insurance Company Limited, DehringBunting and Golding Limited and Chairman ofDB&G Merchant Bank Limited.

HUMAN RESOURCES COMMITTEE

Miss M. M. IssaChairperson

Prof. C. D. C. Christie SamuelsC. H. JohnstonW. A. McDonaldDr. H. J. Thompson, CD

PENSION COMMITTEE

Prof. S. C. Vasciannie Chairman

Hon. W. E. Clarke, OJ, CD

A. V. ChangDr. J. A. Dixon, CD

Miss S. A. Wright

MMeemmbbeerrss

shirley

Text Box

PENSION COMMITTEE

2007 ANNUAL REPORTOur Awards

National Honour for Banking and Public ServiceWilliam Clarke, President & CEO (r), received a second national honour from theGovernment of Jamaica. On National Hero’s Day, October 15, 2007, His Excellency, The Governor General of Jamaica, The Most Honourable Professor Sir Kenneth Hallconferred on him the Order of Jamaica, the country’s 4th highest national honour, forhis ‘sterling contribution to Banking and to Public Service’. On receiving this honour,he is titled, ‘The Honourable’ and will add the letters ‘OJ’ to his name.

Award for ʻSpeak Up! Speak Out!ʼWe were awarded a Certificate for Creative Excellence by theUS International Film and Video Festival for the video-drama, A Letter to Pearl, which was produced locally as part of our‘Speak Up! Speak Out!’ National Primary Schools HIV and AIDSDebating Competition. The certificate was awarded forExcellence in Communications in International Competition andMs. Zoë Welsh, Programmes Production Specialist, received theaward in July 2007 from Mr. Lee Gluckman Jr., Chairman of theUS International Film and Video Festival in Hollywood,California, USA.

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Joylene Griffiths Irving, (l) Director, PublicCorporate & Government Affairs and StacieAnn Wright, Executive Vice President andChief Financial Officer, proudly display trophiesreceived at the 2007 Jamaica Stock ExchangeBest Practices Awards.

Scotiabank• Governor General's Award

for Overall Excellence

• First Place - Best Practices Annual Report

Dehring Bunting &Golding• Second Place - Best

Practices Annual Report

• Third Place - Best Website for Listed Companies

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Global Quality AwardMs. Diana Forti, Vice President and Customer

Business Lead for Scotiabank MasterCard Worldwide (r) presented the Global Quality Award for MasterCard to William E. Clarke,

President & CEO of Scotiabank. We received the award for customers who achieve

in the majority of Global Minimum Standards in the category, Worldwide Gold Award.

Garfield White (c), former Director, Processing Support Centre, shared in the moment.

2007 ANNUAL REPORTThe President’s Council

H. Wayne PowellExecutive Vice President

Branch Banking

A career banker of many years, Wayne Powell isExecutive Vice President, Branch Banking withresponsibilities for the management of thebranch network, the Corporate andCommercial Banking Centre and Small andMedium Enterprises. He also has oversightresponsibilities for The Scotia Jamaica BuildingSociety.

He is an Associate of the Chartered Institute ofBankers and has an MBA from Barry University,as well as Certificates in MarketingManagement and Executive Management fromthe Ivey School of Business, University ofWestern Ontario.

Wayne is a Justice of the Peace, an alternateDirector of the Scotiabank Board and serves onseveral additional corporate boards.

Stacie Ann WrightExecutive Vice-President & Chief Financial Officer

Stacie Wright joined Scotiabank Jamaica in 1995 asan Audit Manager, leaving a formative career atPricewaterhouseCoopers. She was appointedAssistant General Manager, Finance andComptroller in 1999 and has been Executive VicePresident and Chief Financial Officer of ScotiabankJamaica since May 2003.

She holds a MSc. and a BSc. in Accounting from theUniversity of the West Indies, is a CFA CharterHolder, a Fellow of the Association of CharteredCertified Accountants and a Fellow of the Instituteof Chartered Accountants of Jamaica.

Stacie is a Director of Scotia Group Jamaica Limited,The Bank of Nova Scotia Jamaica Limited, ScotiaJamaica Life Insurance Company, The Scotia JamaicaBuilding Society, Scotia Jamaica InvestmentManagement Limited, Scotiabank JamaicaFoundation, Dehring Bunting and Golding Limited,DB&G Merchant Bank Limited and AssetManagement Company Limited.

Rosemarie PillinerExecutive Vice President

Operations

Rosemarie Pilliner currently holds the position ofExecutive, Vice President Operations. She hasdirect responsibility for the Bank's Operationsand Shared Services which includes suchfunctions as facilities management, collections,recoveries and cash processing, among others.

Rosemarie has extensive knowledge ofScotiabank’s core operations, having gained awealth of experience in all areas of the Bank’soperations. Her wide-ranging expertise spansvarying positions within the organizationincluding management positions at theoperations level, Branch Manager, AssistantGeneral Manager in the Data Centre and manyothers.

Rosemarie has benefited from severalmanagement training courses to hone her credit,leadership, operations and organizationdevelopmental skill sets and she is currently theChairperson for the Board of the JamaicaElectronic Transfer Service Limited (JETS), amember of the Board of Directors of AutomatedPayments Limited (APL) and the ScotiabankJamaica Foundation.

21

Audrey Tugwell HenrySenior Vice PresidentRetail & Electronic Banking

Audrey Tugwell Henry started her career in banking in January 1987 and joinedScotiabank in May 2000. She has held the position of Senior Vice President Retail andElectronic Banking since 2004. Audrey has responsibility for Retail Risk Managementand Strategy Development for Retail Products and Electronic Banking Services.

Audrey holds a Masters in Business Administration from the University of the WestIndies, a Bachelor of Science (Hons.) from the University of the West Indies and aDiploma in Education from Church Teachers’ College.

She is Chairman of the Board of Asset Management Company Limited, a Director ofScotia Jamaica Investment Management Limited and Jamaica Electronic Transfer ServiceLimited (JETS).

2007 ANNUAL REPORTThe President’s Council (continued)

David NoëlSenior Vice President / Senior Legal Counsel

& Corporate Secretary

David Noël is Senior Vice President - Senior LegalCounsel & Corporate Secretary for the ScotiabankJamaica Group. He is, inter alia, the principal LegalAdvisor and Compliance Officer for ScotiabankJamaica.

David is an Attorney-at-Law, a CFA Charter Holder,and a Certified Anti-Money Laundering Specialist(CAMS). Prior to joining the Bank in 2001, he was anAssociate at the law firm Myers, Fletcher and Gordonwhere he practiced mainly commercial litigation.During 2002, he was seconded to the GeneralCounsel’s Department at Scotiabank, Toronto wherehe worked on a wide range of internationalcommercial transactions.

He sits on the Commercial Law Committee of theJamaica Bar Association and is Co-Chairman of theCompliance Committee of the Jamaica BankersAssociation.

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Anya SchnoorCEO, Dehring Bunting & Golding Ltd.

Senior Vice President, Wealth Management –Scotiabank Group

As Senior Vice President - Wealth Management &Investments, Anya Schnoor is responsible for the Group’sWealth Management Division which includes ScotiaInsurance, the provider of ScotiaMINT, Scotia PrivateClient Group and the newly acquired investmentcompany, Dehring Bunting & Golding Limited, of whichshe is the Chief Executive Officer.

Anya Schnoor has over 14 years of experience in theareas of investments and banking, and holds an MBAfrom Barry University and a BA in Finance andInternational Business from Florida InternationalUniversity.

Anya currently serves as the President of the JamaicaSecurity Dealers Association and sits on the Board ofDB&G Ltd., DB&G Merchant Bank and DB&G Unit TrustsManagers Limited as well as on Scotiabank Jamaica’sAsset and Liability Committee (ALCO), the BOJ NationalPayment Council and the Finance Committee of HeartTrust NTA.

Michael Jones Senior Vice President

Human Resources

A well rounded Scotiabanker, Michael Jones has gainedvaluable experience in several areas of the Bank, havingheld key roles across the company. His experienceincludes Accounting Manager, Operations Manager,Assistant General Manager - Operations, GeneralManager - Human Resources, and currently Senior VicePresident - Human Resources, Scotiabank Group.

Michael holds a Diploma in Banking from CAST/Universityof Technology, and is an Associate of the CharteredInstitute of Bankers. He holds an MBA (Distinction) fromthe University of Wales, is a graduate of the ExecutiveHuman Resource Management program of the Universityof Michigan and holds the ACIS designation.

Michael serves as a Director on the boards of theScotiabank Jamaica Foundation, Church Services Limited,The Human Resource Management Association ofJamaica, the UWI Career and Placement Board and theHope Gardens/Nature Preservation Foundation.

Monique French Senior Vice President Risk Management

The newest member of the Scotiabank Executive Management Team, Monique French is directlyresponsible for the structure, risk and quality of the commercial and corporate credit portfolioof Scotiabank Group (Jamaica).

Monique is a banking professional with twelve years of experience in Credit & Market RiskManagement, Corporate Banking, Treasury & Derivatives. She has served on several industry andprivate sector committees, and holds a BSc Accounting Degree (First Class Hons.) from theUniversity of the West Indies and a Master of Business Administration Degree from the RichardIvey Business School, University of Western Ontario, Canada. She is a CFA Charter Holder andan IBM Scholar.

Monique is a member of the Asset & Liability Committee (ALCO).

Maya WalrondSenior Vice President

Customer Experience and TechnologyInnovation & Projects

Maya Walrond leads the Customer Experience team andis charged with encouraging and sustaining a customer-centric culture across the Scotiabank Group. In addition,Maya is responsible for technology and systemsinnovation as used to support first-class customer service.

Prior to joining Scotiabank in 2007, Maya held seniormanagement positions in the Media andTelecommunications industries, with a focus on strategicplanning and general management. She began hercareer as a management consultant, where she advisedcorporations in the beverage, pharmaceutical and printingindustries.

She graduated with first-class honours from the Universityof Pennsylvania (Wharton) with dual Bachelor degrees inEconomics and Systems Engineering and holds an MBAin General Management from the Harvard BusinessSchool.

Jacqueline Sharp Vice President & General Manager


Jacqueline Sharp joined Scotiabank in 1997 as Manager,Treasury, where she was responsible for managing theBank’s investment portfolio. She then moved on to otherpositions in the Bank, including Corporate FinancialAnalyst and General Manager of the newly createdPrivate Client Services Unit in 2002. Jackie is currentlyresponsible for the overall growth, profitability andoperations of the Insurance arm of the Scotiabank Group.

Jackie holds a Bachelor of Science (BSc.) degree withhonours in Accounting from the University of the WestIndies, is a CFA Charter Holder, and has successfullycompleted the Certified Public Accountant (CPA)examinations.

She serves as a member of the Board of DB&G Unit TrustsManagers Ltd., Life Insurance and Market ResearchAssociation’s (LIMRA), Caribbean Executive Board and isalso a member of the Insurance Association of Jamaica(IAJ).

2007 ANNUAL REPORT

Patsy Latchman-AtterburyVice President

Small and Medium Enterprises

Patsy Latchman-Atterbury joined Scotiabank in September2007 with 15 years of management experience. She is theVice-President in charge of a critical strategic growth areaof the Bank, Small & Medium Enterprises.

Over the past 15 years, Patsy has played critical roles in thefast moving retail goods market in Jamaica. She was asignificant contributor to the development and launch ofone of Jamaica's most agile, pace setting distributioncompanies, a project which led to eight-years of dynamic,lucrative leadership in the snack foods industry. During thistime, she was one of a four member regional team set upto assess trade opportunities in Central America.

She holds a Bachelor of Science in Management Studiesand an Executive MBA in Business Administration from theUniversity of the West Indies.

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Gladstone WhitelockeVice President & General ManagerThe Scotia Jamaica Building Society

Gladstone Whitelocke has been with Scotiabank for over 21 years with a career that hasspanned Retail Lending, Centralized Retail Collections and Project Management. As VicePresident & General Manager of the Building Society he is responsible for the development,growth and operations of the mortgage services arm of the Group.

He completed courses in Banking and Finance at the University of Technology, Certificates inProject Management and Sales Management from the University of New Orleans and iscurrently in the final module of the Manchester Business School’s MBA in Finance.

Gladstone currently serves on the Asset & Liability Committee of Scotia Group as well as theStrategic Planning Committee.

2007 ANNUAL REPORT

The President’s Council (continued)

Ronald BourdeauVice President

Risk Management

An almost twenty-year banking veteran, RonBourdeau is responsible for Credit Risk Managementacross the Group. Prior to joining ScotiabankJamaica, he spent 12 years with Scotiabank inCanada in Commercial Banking and InternationalCredit. Ron has worked in the Bank across the globeleading Risk Management centers in Argentina andChile before arriving in Jamaica in 2003 to head theCredit Risk Department.

Ron holds a Bachelors degree in Communicationsfrom Concordia University in Montreal and an MBAin International Business from the University ofToronto. He has also successfully completed the IveyExecutive Programme at the Richard Ivey School ofBusiness, University of Western Ontario.

Heather GoldsonVice President

Marketing

Heather Goldson came to Scotiabank with over 15 yearsexperience in Marketing and Public Relations in Jamaicaand overseas. As Vice President Marketing for theScotiabank Group, she holds responsibility for thestrategic marketing activities of the Bank and itssubsidiaries.

Heather has played critical roles in the development ofthe film, music and entertainment industries within thepublic sector as well as the retail telecommunicationsindustry from within the private sector.

She holds a Bachelors Degree in Management andInternational Business from Florida InternationalUniversity. She is a Board member of the ScotiabankJamaica Foundation as well as the Jamaica/UK Co-Production Treaty Competency Board, formed by theGovernment to oversee the administration of Jamaica’sfilm co-production treaty with the United Kingdom.

Yvonne PandohieVice President and Chief Auditor

Yvonne Pandohie’s career with Scotiabank began in2001 after spending twelve and a half years atPricewaterhouseCoopers. She has undergone extensivetraining in Scotiabank’s Toronto offices in both theCorporate and Commercial Banking Business Unit andthe Audit Department.

In 2004, she became the first Jamaican and also the firstfemale to assume the role of Chief Auditor in Scotiabank.She has also worked as an Account Manager assigned tothe Corporate & Commercial Banking Centre.

Yvonne holds a MBA from the Manchester BusinessSchool, is a Fellow of the Association of CharteredCertified Accountants and a Fellow of the Instituteof Chartered Accountants of Jamaica.

24

President’s Council at a glance

View of Kingston Harbour from the roof of the Scotiabank Centre building, Downtown, Kingston.

2007 ANNUAL REPORT

Joylene Griffiths IrvingDirector - Public, Corporate & Government Affairs

& Executive Director Scotiabank Jamaica Foundation

Joylene Griffiths Irving holds the responsibility for building andmaintaining the Bank’s corporate image through publicrelations and external communications strategies. She alsodirects the Bank’s corporate social responsibility focus throughthe Scotiabank Jamaica Foundation.

She joined Scotiabank in 2000, and previously held theposition of Senior Manager, Public & Corporate Affairs. Prior tojoining the Bank, she held several management positions in thefields of public relations, communications and journalism.

Joylene holds a Master of Arts degree in HumanCommunications from Howard University (Hons.), WashingtonDC, USA and a Bachelor of Arts degree in Language andLiterature with Social Sciences, from The University of the WestIndies (Hons.). Joylene is a Rotary Club of KingstonAmbassadorial Scholar and a member of the Public RelationsSociety of Jamaica and the Press Association of Jamaica.

Wayne Hewitt Vice President

Corporate & Commercial Banking

Wayne Hewitt is a banker with 15 years experience incorporate banking, risk management and treasuryoperations. He has been with Scotiabank since 2003,serving a year in the Global Risk Management unit of theBank of Nova Scotia in Toronto, Canada, and as head ofCorporate & Commercial Banking and the ScotiabankCentre Branch since 2005.

He holds a BSc (First Class Honours) in Economics andManagement from the UWI, and an MBA in GeneralManagement from Georgetown University inWashington, DC. He has also participated in severalsenior management courses offered by institutions suchas Harvard University and Standard & Poors.

Wayne is a member of the Bank's Asset & LiabilityCommittee (ALCO).

Rosemarie VoordouwDirector

Employee Communications & Ombuds Services

Rosemarie Voordouw joined the Bank as Director ofEmployee Communications and Consultations (ECC) inMay 2003. The unit provides confidential consultation onwork-related issues to employees and is the first of itskind in Jamaica.

She holds a BSc (Hons.) in Natural Sciences from theUniversity of the West Indies and a MA (Very High Hons.)in Counseling Psychology from the Caribbean GraduateSchool of Theology. She has over 20 years experience asa communicator and over 10 years experience as acounselor on both a full-time and consulting basis.

Rosemarie worked with the Jamaica Information Servicefor over 14 years as a freelance writer, producer andpresenter. She is a certified Workplace Mediator, anexecutive member of the Jamaica Psychological Society, amember of the International Ombuds Association and amember of the Board of Scotiabank Jamaica Foundation.

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2007 ANNUAL REPORT

Our Subsidiaries

26

District A

District B

Scotiabank Team Leaders Metro West

1 Steve DistantManager, Liguanea Branch

2 Carl BrightManager, Mandeville Branch

3 Michael LeeManager, Sales & ServiceSupport

4 Janet Billings-FrithManager, Christiana Branch

5 Claudia SandersonManager, Junction Branch

6 Cary WigganManager, Victoria & BlakeBranch

7 David JamesManager, Santa Cruz Branch

8 Althea HowardManager, Old Harbour Branch

9 Terrence V. AllenManager, King Street Branch

10 Valerie OmessManager, Hagley ParkBranch

11 Jerome SmallingManager, May Pen Branch

12 Regald ReidManager, Black River

13 Donovan HansonManager, Scotiabank Centre Branch

14 Peter WaltersDistrict Vice President

1 2

3

8 1310

5

4 6

711

12

District A

Scotiabank Team Leaders Metro East

1 Conrad WrightManager, Morant BayBranch

2 Courtney SylvesterManager, New KIngstonBranch

3 Andre JohnsonManager, PortmoreBranch

4 Phoebe BuchananManager, UWI Mona Campus Branch

5 Opal WhittakerManager, Port Maria Branch

6 Roger CogleDistrict Vice President

7 Junior ClarkeManager, Cross Roads Branch

8 Michelle Lee RutlandManager, Sales & Service Support

9 Lois HemmingsManager, Linstead Branch

10 Janet SutherlandManager, Oxford RoadBranch

11 Karen TomlinsonManager, Half-Way-Tree Branch

12 Marlene DavidsonManager, HighgateBranch

13 Amory JervisManager, Port AntonioBranch

14 Junior Carter JamesManager, Spanish TownBranch

1 8

7

102 1214

4 6

95 11

13

9

14

3

The Bank of Nova Scotia Jamaica Limited (Scotiabank), Scotia Jamaica Life Insurance Company Limited,The Scotia Jamaica Building Society and Dehring Bunting and Golding Limited

2007 ANNUAL REPORT

27

Scotiabank Team Leaders Metro North

1 Caswell DawesManager, Lucea Branch

2 Glen GrayManager, Negril Branch

3 Donna MaxwellManager, Brown’s Town Branch

4 Milton ElliotManager, Sales & ServiceSupport

5 Doreen Mortimer Manager, Ironshore Branch

6 Linley ReynoldsManager, Montego BayBranch

7 Karen ChangManager, Ocho Rios Branch

8 Fitzaudy WrightManager, Falmouth Branch

9 Norma HaughtonManager, St. Ann’s Bay Branch

10 Michael ShawManager, Savanna-La-Mar Branch

11 Michael ThompsonDistrict Vice President

Missing: Garth GrahamActing Manager, Westgate Branch

1 3 7 95

42

6

810

11

Scotiabank Scotia Private Client Group

From left to Right - Valerie Williams, Senior Operations Officer, Service & Operations, Blenda Wade, Investment Specialist, Bridget Lewis, General Manager, Dave Dixon, Relationship Manager, Richelle Ehikametalor, Relationship Officer,

Lavern Ansine Roach, Relationship Manager

2007 ANNUAL REPORTOur Subsidiaries (continued)

28

Scotia Insurance

From left to Right - Lana Forbes, Senior Sales Manager, Monique Anthony, Manager, Finance & Compliance Officer,Jacqueline Sharp, Vice President & General Manager, Lorna Gordon Elliot, Manager, Creditor Life Insurance,

Lois Heslop, Senior Manager, Operations & Service Delivery

From left to right - Brian Frazer, Assistant Vice President, Pensions & General Manager, DB&G Unit Trust Managers Ltd., Tanya Ho-Shue, Vice President & General Manager, DB&G Merchant Bank, Johann Heaven, Assistant Vice President, Projects &

Strategic Planning, Chorvelle Johnson, Vice President, Sales & Service, Vanessa Reid-Boothe, General Manager, AssetManagement Co. Ltd., Lissant Mitchell, Senior Vice President, Treasury & Capital Markets,

Anya Schnoor, Chief Executive Officer, Andrea Tinker, Vice President & Chief Financial Officer

DDeehhrriinngg BBuunnttiinngg && GGoollddiinngg

2007 ANNUAL REPORT

29


From left to right - Phillip Williams, Manager Mortgage Services, Gladstone Whitelocke, Vice President & General Manager,

Michelle Scott, Manager, Finance & Operations

30

Creating Creating

Mr. Grant Smith, real estatedeveloper, hard at work onone of his latest projects,Stony Valley Limited.

31

Opportunities Opportunitiesfor Individualsfor Individuals

2007 ANNUAL REPORT

Creating Opportunitiesfor Individuals

32

Personalized and SpeedyService

“Our Building Society is not thelargest and we will not tell youthat we have the lowest rates,because size and rates are not ourmajor focus. We are making ourname and capturing marketshare year over year simply bygiving our customers a speedierand more personalized service.

We honour our commitment to process applications withefficiency and accuracy in recordtime. We will go the extra mile todiscuss your situation, becausewhere there is an opportunity togive you the best value for yourmoney and ensure that you feelgood about our relationship, wewill find it.”

Gladstone WhitelockeVice President

& General ManagerThe Scotia Jamaica Building Society

Creating Opportunities in the Mortgage Market

Owning a home is a big achievement

Mr. Cyrus Myersin front of his home

Cyrus “Plum Plum” Myers, was determined toown a home again, no matter his age, but heneeded to obtain a mortgage at a rate that hecould manage. At age 59, this was not very easy.“For me, a man must own a house; it is like yourold age pension,” he explained.

Life deals us many challenges, and successcomes in how we seize the opportunities in thesechallenges. “I sold the first house and divided theproceeds with my wife, as we were separating,and I needed to use my half to purchase another.I went to the Building Society through which Igot the first house, but, the mortgage, whichwas based on my age, was too high,” said Mr. Myers.

That was when he visited Scotiabank, where hehad previously received a loan to purchase a carto operate his taxi service. “I did not give up. I did not want to pay rent, so I spoke to

Mr. Whitelocke who had helped me to buy a carsome years ago.”

Gladstone Whitelocke, Vice President andGeneral Manager, Scotia Jamaica BuildingSociety, remembers that first meeting. “I was theLoans Officer then at the King Street Branch. Iknew Mr. Myers who operated his taxi not farfrom the Branch. One day he asked me about aloan to purchase a car and I helped him get aScotiaPlan Loan,” he said.

Mr. Whitelocke and his team worked out amortgage rate that was suitable for Mr. Myers,based on his joint income with his new wife, andnow he is the owner of a quaint four-bedroomhouse in Vineyard Town, Kingston. Just when hethought it was not possible, Cyrus Myers wasgiven an opportunity to own a home again andstart another phase of his life.

Home EquityIn our commitment to helping customers achievetheir life goals, we developed and refined severalprogrammes including the Scotia Home EquityLoan, which allows customers to use the equityin their homes for loans to fund education, homeimprovements and vacation activities.

Major AchievementsSJBS• Growth of over $1 billion in mortgage

bookings

• Launched Joint Mortgage FinancingProgramme with National Housing Trust(NHT). Increase in NHT benefits to $3.5Mhas served to drive increase in applications

• Introduced Tiered Mortgage Productattracting 35 to 45 year-old professionals

• Launched Public Sector Mortgage Planwith below market rates

2007 ANNUAL REPOR T

33

Convenience and optionsare critical to building wealth

Customers are keptabreast of their

investments anywhere

Michael BernardChief Executive Officer

Carreras Group of Companies

Michael Bernard, Chief ExecutiveOfficer of Carreras Group ofCompanies, is among just over 400individuals whose funds are managedby the Scotia Private Client Group(SPCG). Though he is experiencedat managing his funds himself,Mr. Bernard values highly the personalservice and attention he receives fromSPCG. “I recall being on vacation inFlorida and receiving a call from TamikoSadler, then Relationship Officer atSPCG, providing a recommendation onhow to reinvest some of my funds thathad just matured. It gave me a realgood feeling that someone was takingcare of my finances. I can also do mostof my banking online, which is greatwhen you are traveling and very busy,”said Mr. Bernard.

Scotia Private Client Group’s in-depthunderstanding of each client’s financialneeds allows us to respond with aheightened sense of direction.

Representing the full suite of productsand services offered across the Group,SPCG provides its clients with theconvenience of seamlessly accessing theGroup’s services through their twoplans, Signature and Preferred. Duringthe year, SPCG expanded this suite toinclude its Classic Plan for its clientswhose financial portfolios are weightedtowards investing.

DB&G creating more optionsIn addition to a strong relationship andconvenience, we understand thatcreating wealth for our customers isalso about providing them with soundinvestment opportunities. Our acquisitionof DB&G in December 2006 signaledour intention to become the leader inwealth management. DB&G is thenewest member of the Scotia Group,and carries the widest range ofinvestment products in the market.DB&G brought to Scotia Group asuccessful heritage in understandingand fulfilling its clients’ investmentneeds. We have sought to honour thisheritage even as we explore newopportunities in wealth management.

Developing an intimate understandingof what our customers need, drives ourability to deliver relevant solutions.During the year, DB&G has consistentlybeen recognized for its superb researchcapabilities that provide dependableinformation on which our clients rely tomake sound financial decisions. DB&Gis Jamaica’s third-largest securitiesdealer and the largest equity broker.DB&G provides exclusive assetmanagement and corporate creditservices to individuals and institutionalclients. With significant assets undermanagement and through aninnovative set of products and services,DB&G provides compelling alternativesfor individuals and institutionsworldwide.

“For the next 12 months, DB&Gwill concentrate on building aneven stronger sales and serviceculture to take advantage of thewider distribution model thatcomes with being a part of theScotiabank Group.

We will enhance our securitiestrading and fund managementcapabilities, and further bolsterour operations in research andstockbrokerage. DB&G has asignificant understanding of thepsyche of the investing public,which powers our ability tostand as a market leader nowand in the future.”

AAnnyyaa SScchhnnoooorrChief Executive Officer

Dehring Bunting & Golding

Electronic Banking Credit Cards - Moving forward, we want toachieve significant growth in value-added orreward cards, as a direct response to ourcustomers’ interest in enhanced credit cards.We will also enhance the online experienceof our cardholders through the introductionof additional security features.

Internet Banking - In an effort to drive InternetBanking usage, we installed Internet Kiosks atMegaMart Shopping Centre - Waterloo Road,and our Liguanea & New Kingston Branches.These kiosks give customers the opportunity toaccess Internet Banking to pay their bills, viewrunning balances and credit card statements,set up recurring payments and conduct otherbanking transactions.

The future will also see the utilization of themobile phone as a new banking servicechannel with functionalities such as billpayments and low balance and depositalerts.

Payment Services - We recognise that ourcustomers value the ability to makepayments at their own convenience. We aretherefore working to enhance our self-service banking facilities. These effortsinclude establishing Self-Service RetailBanking Centres across the island, installingadditional ABMs, Internet Banking Kiosksand Point-of-Sale machines island wide.

Creating Opportunities for Individuals (continued)

2007 ANNUAL REPORT

34

Self-Service Banking

“In 2007, we pursued strategieswhich allowed us to further informand educate our retail customersabout our self service bankingchannels and services, as well asincreasing usage, adoption andconvenience.

We take our signal for action fromour customers who have becomemore demanding and more techsavvy with convenience remaininga major priority. Hence, we areconstantly exploring opportunitiesto improve and expand ourelectronic products and services.

During the year, we added moreAutomated Banking Machines(ABMs), and we retained ournumber one position with thelargest network of ABMs’ islandwide. We were also very pleasedto have piloted our InternetBanking Kiosks in three locationsin Kingston which will give morecustomers the opportunity to logon and experience the convenienceof Internet Banking.

In the coming year, we willintroduce more innovativeproducts and services to themarket, such as Mobile Top UpServices at our ABMs which willprovide even greater convenienceto our customers.”

Audrey Tugwell HenrySenior Vice President

Retail & Electronic Banking

Major Achievements Electronic Banking

• Added five Automated Banking Machines(ABMs) to bring the total number ofScotiabank ABMs to 176

• Four ABMs were upgraded to dispense dualcurrency – three in Kingston and one inMandeville

• Installation of three Internet Banking Kiosksat MegaMart Shopping Centre (WaterlooRoad), Liguanea & New Kingston Branches

• Remained market leader in range of creditcards, and number of rewards cards andreceivables

• Received the Global Quality Award forMasterCard, in the category WorldwideGold Award for customers who achieve themajority of Global Minimum Standards

2007 ANNUAL REPORT

Creating Opportunities inInsurance

Planning forRetirement

Larklan Lawrence had one wish before heretired from the manufacturing business – toleave a nest egg for his grandchildren. Healso wanted a tax-free long-term instrumentwith a higher interest rate than his regularsavings account.

While visiting his Scotiabank branch in Half-Way-Tree, he met Jennifer Daley, ScotiaInsurance Agent, who introduced him toScotiaMINT, an interest-sensitive lifeinsurance product from Scotia Insurance. “Ihave seen advertisements in the paper andon television, so I knew the nameScotiaMINT, but I did not understand what itoffered,” said Mr. Lawrence.

“He was very enthusiastic once I explainedthe benefits to him – a retirement plan,wealth creation and the use of the policy ascollateral. Once he outlined his personalgoal to increase his earnings over the nextfive years in order to leave something for hisfamily, I was sure that ScotiaMINT was theideal product for him,” said Ms. Daley.

Mr. Lawrence has become one of our mostvaluable ambassadors because he is sopleased with the level of service we providedhim. “We gave Mr. Lawrence an opportunityto secure a future for his family and, inreturn, he gave us the opportunity to buildrelationships with many of his friends andfamily. This kind of promotion is priceless!”said Ms. Daley.

In addition to ScotiaMINT, Scotia Insurancealso provides peace of mind to its customersthrough the provision of Creditor Life andCritical Illness coverage on select credit cardsand retail loans offered through the Bank.Over 46,000 clients are now comforted bythe fact that their loan will be paid off in theevent of an unforeseen circumstance.

Major AchievementsSJLIC

• ScotiaMINT customers can now paymissed premiums and lump sums viathe Internet or TeleScotia.

• Launched Creditor Life and CriticalIllness coverage on Business BankingCredit Cards; Critical Illness coverage onloan products (Residential Mortgagesand Scotia Plan Loans); Creditor Life forDB&G’s Easy Own Plan; Accidental DeathBenefit for MasterCard (Standard) andVisa Classic Credit Card cardholders.

• 15 agents qualified for the Million DollarRound Table

• Scotia Insurance launched its CustomerRelationship Management (CRM)programme

• Sales Agent Nicole Baxter-Murraywas awarded Life & BancassuranceProduction Member for 2006 by the Jamaica Association of Insurance & Financial Advisors

Exceptional Opportunities

“Today, a growing number ofcustomers expect insurance toshow its worth, long before theso-called ‘eventualities’ andScotia Insurance is uniquelyplaced to offer our policyholdersexceptional opportunities foractively securing their financialwell-being with key innovations.

Throughout the year, weexpanded our payment channelsto include TeleScotia and onlinebanking and launched variousCreditor Life products. We nowcover over 110,000 customers andare focused on keeping themsatisfied and fulfilling their long-term goals. Our EducationWealth Plan, which helps clientsfinance future education, wasalso introduced during the year,filling an important need in thelives of our customers and theirfamilies.

In the coming year, we’ll continueto focus our attention onincreasing the suite ofaccumulation and savingsproducts and deepen customerretention through targetedcustomer service.”

Jacqueline SharpVice President &

General ManagerScotia Insurance

35

36

Creating Creating Franklyn ‘Chucky’ James (left)

of Chucky’s Auto Supplies,demonstrates one of hisproducts to ScotiabankSavanna-la-Mar Branch

Manager, Michael Shaw andMichelle Senior, Assistant

Manager, Credit

37

Opportunities Opportunitiesfor Businessfor Business

2007 ANNUAL REPORT

Creating Opportunitiesfor Business

Creating Opportunities for Small & Medium Enterprises

Giving entrepreneurs easier access to funds

Franklyn ‘Chucky’ JamesChucky’s Auto Supplies

Smithfield, Savanna-la-Mar

Franklyn “Chucky” James is oneentrepreneur who needed a way to ensurehe had a continuous supply of spare parts tokeep his trucks on the roads. Sundays werethe only days he had for maintenance,however, auto parts stores were usuallyclosed. In addition, it was difficult obtainingparts in Savanna-la-Mar where he lived. Hesaw a great opportunity to go into thebusiness of supplying parts and to diversifyhis business to include the supply of heavy-duty parts.

He utilized his small savings and bought hisfirst stock of auto parts. That was in 1996.Later in the same year, when he neededadditional funds, he approached Scotiabankand established a relationship which resultedin several loan facilities, including aScotiaLine, to purchase his auto partsoverseas, clear them through Customs andtransport them to his shop. “Mr. RhoanBennett was the best loans officer,”Mr. James recalls. “He made it so easy.”

Since then, Mr. James has been able to keepparts in stock, and the four trucks, which he

contracts to Western Parks and Markets, onthe roads. But again, an opportunitypresented itself for greater efficiency andmanagement of his small business, whichemploys 15 people, including himself.

The Branch Manager at Savanna-la-Mar,Michael Shaw, decided to explore theopportunities for Scotiabank to give furtherassistance. “I noticed that he had severalloans, and I felt there was a need to analyzehis business to see if we could serve himbetter, so one day I met him in the line at thebranch and invited him into my office.”

Mr. James was then introduced to Ms. Michelle Senior, Assistant ManagerCredit, who analyzed his business andoffered him a customized suite of products –a term loan and overdraft facility to help himwith his cash flow, a Point-of-Sale machine toallow him to accommodate large sales bydebit and credit cards, and the newlylaunched MasterCard Business Credit Card.This credit facility provided him with theability to purchase auto parts overseas, easily.

“I had a personal credit card, but the limit didnot allow me to make big purchases. ThisMasterCard Business Credit Card is a greathelp. If I visit a supplier overseas and seeitems on sale, new or used, I can use mybusiness credit card, and best of all, I nolonger have to call a friend in the States toborrow some dollars,” Mr. James saidproudly.

“Everything is just coming together for methis year – my suppliers are giving me creditbecause they see how my business isgrowing, and my bank sees what I am doingand they are working with me; it’s justgood!” said Mr. James who is gearing up toprovide service for the big trucks haulingsugar cane in the harvest in western Jamaica,as well as moving goods to facilitate thevibrant expansion of the hotel industry onthe North Coast.

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Strategic Focus on Small &Medium Enterprises

“The small business sector haslong been recognized as animportant catalyst for growth inthe Jamaican economy. In 2007,we brought all our solutions forsmall and medium enterprisesinto a single strategy thatdemonstrates to the market thatwe not only speak the language ofSMEs, but we are willing totranslate this language intomeaningful opportunity. Webelieve that small businesses cancreate big opportunities.

We introduced two new creditcards - MasterCard BusinessCredit Card and MasterCardExecutive Credit Card; a CreditLine for business that helpsqualified customers get crediteasily and when they need it toease their cash flow problems;and we spent over 300 hundredhours training a cadre of 60Business Banking Officers tomanage our relations with oursmall business entrepreneurs”.

Patsy Latchman-AtterburyVice President, Small and

Medium Enterprises

2007 ANNUAL REPORT

Moving from trucking to opening a storeselling auto parts was a great opportunityfor growth, and with the right products,services and an understanding team, he wasable to grasp the opportunity withconfidence.

Small and Medium EnterprisesSmall businesses are companies with up to25 employees, and total assets excludingland and buildings of $20 million. But we donot limit ourselves to these nationalparameters as they do not describe thelimitless possibilities of these businesses.

We are aware that there are tremendousopportunities for these businesses, givenproper management, planning andfinancing. Our SME Unit is now geared tosatisfy these needs; and the success ofChucky’s Auto Supplies bears out well themantra of our Small and Medium Enterprisestrategy – that of ‘Working together to growyour business.’

Major AchievementsSME• Launched MasterCard Business Credit

Card and MasterCard Executive CreditCard

• Launched a Credit Line for business

• Trained 60 Business Banking Officers

• Hosted three Merchant Seminars on “BestPractices in Credit Card Acceptance” aspart of our customer education programme

39

Heart and Sole Boutique in the Orchid Village Plaza,Liguanea, St. Andrew, is owned and operated by

Mary Abrahams, who caters to customers (like Lisa Booth pictured here) shopping for fine

women’s apparel and accessories.

2007 ANNUAL REPORTCreating Opportunities for Business (continued)

40

Creating Opportunities forCommercial Business

Bringing ‘life’ to the North Coast

With an understanding of ourcustomers' goals

The National Water Commission (NWC) has brokenground for the Harmony Hall/Braco – Runaway BayWater Supply Project, another achievement inmeeting its millennium development goals of“providing universal access to water for allJamaicans by 2015.”

The project will involve the laying of over 23kilometres of transmission and distribution lines,extending from Braco in Trelawny along the verge ofthe highway to Runaway Bay in St. Ann, and theconstruction of a 500,000 gallon tank above Rio Bueno.

“The project will not only provide an improved andmore reliable water supply for existing NWCcustomers, but will also provide water to newcustomers. It will also transform these lands alongthe coast into prime real estate to facilitate morehotel and condominium developments,” said E.G. Hunter, Chief Executive Officer, NWC.

Having won the bid to provide local financing tosupplement funds raised by the NWC from theGovernment of France, our team led by Wayne Hewitt, Vice-President and Taryn Budoo,Relationship Manager, of the Corporate andCommercial Banking Centre, understood the NWC’s urgency in wanting to conclude the deal. “We had to work around the clock, as we wanted to conclude the deal quickly and Mr. Hewitt

and his team were there with us. There was perfect synchronization between our corporate objectives,”commented Mr. Hunter.

Sharing a VisionAt Scotiabank, we are committedto developing an understandingof our customers’ businesses.These insights inform our abilityto meet their current needs andkeep us aligned in the future. Our vision offers tailor-madeopportunities for companies ofevery size. It commits us toreaching for every opportunity toadd value to their plans throughmergers and acquisitions,

expansion or equipment purchases.

Mr. Grant Smith of Stony ValleyLimited, explains it best. “Scotiabank understandsthat as a developer, I am always thinking long term.The real test of the strength of our relationship camewhen I started to develop seven acres in Trelawny.From buying the land, designing and submittingplans for approval and putting in the infrastructure, Ihad the support of Scotiabank. We even had to facethe challenge of the development being dismissed bypotential customers as being too remote - a fact thatsoon turned out to be one of the property’s biggestselling points. Pushing through all of the rigours ofreal estate development simply can’t happen if yourbanker doesn’t have as solid a belief in the project asyou do. Scotiabank can look at a bare tract of landand see how I want to transform it, and that’s whatI need.”

Consultative Relationships

“The Corporate and CommercialBanking Centre (CCBC)registered several big wins in2007, participating in projectsthat together have unprecedentednational and regional impact.

We also sought to extend advicein financial solutions that wouldenhance shareholder value. Thebenefit of this approach has beenconsultative relationships witheach client, where we don’t justtalk about loans, we talk about aholistic future for the business.For medium size enterprises, weimproved our points of contact,and in doing so, we developedindividual snapshots of ourclients operations that in manycases led us to suggest smart re-financing options that matchedthe unique challenges medium-sized businesses face.”

Wayne HewittVice President

Corporate & CommercialBanking Centre

Minister of Water and Housing, The Honourable Dr. Horace Chang (in tractor) breaksground for the Braco to Runaway Bay leg of the National Water Commission's WaterSupply Project.

2007 ANNUAL REPORT

41

Major AchievementsCCBC

• Lead Arranger for the equivalent US$175million acquisition financing provided to Cobalt Holdings for acquisition of the Caribbean assets of Courts Jamaica Limited. Scotiabank Jamaica played a significant role in structuring and closing the negotiations, and participated in the transaction for approximately J$2.2 billion

• Arranged financing for the Port Authority of Jamaica’s Kingston Container TerminalPhase V expansion project, which was provided directly by Scotiabank Jamaica, Scotiabank Europe and Scotiabank Canada

• Provided financing for the National Water Commission’s Harmony Hall to Runaway Bay Water Supply Project

• Arranged pre-export financing to Jamaica Cane Product Sales for the sugar industry

From left to right: Karl James, the General Manager of JamaicaCane Product Sales, Richard B. McCorkindale - Director,International Corporate & Commercial Banking - Structured Finance-The Bank of Nova Scotia and Wayne Hewitt, Vice President ofCorporate & Commercial Banking, Scotiabank, at the Bernard LodgeSugar Estate, St. Catherine.

Creating Creating

42

Over thirty ScotiabankVolunteers with help

from Food for the Poorbuilt a new house for

the Bravo family inRocky Point, St. Thomas.

Opportunities Opportunitiesfor Youth & Communities

43

for Youth & Communities

2007 ANNUAL REPORT

Creating Opportunitiesfor Youth and Communities

Creating Opportunitiesfor Youth and Communities

“I’m at Princeton!”

More educational opportunities

Melecia Wright at PrincetonSJF Scholar

Millions of people around the world dream ofsaying, “I’m a student at Princeton!” Justthinking about it can give them the shivers.Melecia Wright from Jamaica is shivering, butthat’s because she is at Princeton and it is thewinter season. Melecia’s achievement of a fullscholarship to Princeton University in the U.S.A.is a result of her own hard work, commitment toexcellence, strong faith and support of herfamily and teachers.

Scotiabank, through the Scotiabank JamaicaFoundation (SJF), is very pleased to have playeda critical part in her success. In 2000, due to herhard work, she was the Top Girl in the Grade SixAchievement Test (GSAT) and as a result, shereceived the Scotiabank Jamaica FoundationScholarship for Excellence, which provided herwith $120,000 per annum for seven years toattend Montego Bay High School.

“At the time I was awarded the ScotiabankGSAT Scholarship, I was not sure that my familywould be able to manage the financialresponsibilities of high school. The scholarship

gave me another reason to strive for excellence:I had someone else outside of my family andfriends cheering me on and expecting me to dowell. I couldn't very well let Scotiabank down,”she wrote in an e-mail from Princeton. In a showof recognition of Melecia’s accomplishment, theFoundation presented her with a monetary giftto assist in defraying costs associated withtaking up the scholarship at Princeton.

“When Melecia wrote and told us that she wasaccepted by 12 universities in the United States,Europe and Jamaica, we were more convincedthan ever that we were doing the right thing, bygiving students an opportunity to build a strongfoundation in education that would open doorsof opportunity for them after high school,” saidJoylene Griffiths Irving, Executive Director,Scotiabank Jamaica Foundation.

Melecia was invited to speak at the ScotiabankJamaica Foundation’s Annual GSAT Scholarshipawards luncheon to share her experience withthe other scholars. “It was a very fulfillingexperience for me and I felt so happy and proud.This scholarship made me realize just how muchan act of benevolence can influence someone’slife. I always use the phrase, ‘making distantprobabilities into immediate realities.”

Melecia is one of 144 students who havebenefited from the Scotiabank JamaicaFoundation GSAT Scholarship programme whichbegan in 1996. These scholarships provide relieffor parents who no longer have to worry abouttuition, books, uniforms, meals or eventransportation.

Building awareness of HIV and AIDS

Impacting the community – students, parents and teachers

“I was very encouraged by the theme of thisdebate to Speak Up! and Speak Out!” saidKyodi Green of Hydel Preparatory School. Heand his teammates, Natasha Patterson andJahtonali Barrett, comprised the winning team

44

2007 ANNUAL REPORT

in Scotiabank’s “Speak Up! Speak Out!”National Primary Schools HIV and AIDSDebating Competition. Kyodi was the onlyboy in the finals of the competition and wonthe prize for Most Outstanding Male Speaker.Their prizes included computers for theirschool and scholarships to high school. Kyodi,who was one year younger than histeammates, will take up his scholarship nextyear, in September 2008.

Kyodi, Natasha and Jahtonali were just threeof the many students from 91 public andprivate schools that participated in 431debates. Eleven moots were designed to raiseawareness levels among young children, andchange attitudes towards persons living withthe disease, by fighting stigma anddiscrimination and promoting healthylifestyles.

The competition, which began in December2006, ran through to May 2007 andtargetted children nine to 12 years old, fromgrades four through to six. Hydel Preparatory in St. Catherine emerged winners overRetreat Primary and Junior High School fromSt. Mary when they met in the grand final todiscuss the moot ‘The school is not a suitablesetting for students affected by AIDS.’ ThirdPlace was awarded to Santa Cruz Primary andJunior High School from St. Elizabeth.

Scotiabank spent approximately $15 millionon prizes – scholarships to students,computers and trophies; resource material –text and audiovisual material for teachers andstudents in 285 schools; hosted two HIV andAIDS Awareness Road Shows; and conductedseminars for debate coordinators and parentsisland wide.

“I was very fortunate to have attended one ofthe Parenting Seminars held in St. Ann’s Bay.I was shocked at some of the informationthat was relayed. Boy! Let me tell you! Itreally frightens me to hear certain things! Itwas that very seminar that motivated me toreach out and spread awareness in mycommunity. So we started an adult life skillsclass called the Protection Action PlanProgramme, along with other parents. Istarted talking to youth about knowing theirHIV and AIDS status, the correct ways ofstoring and using a condom and the conceptof abstinence,” said Mrs. Heather Gardener,whose child attends Inverness Primary &Infant School.

We created opportunities for our children toincrease their awareness of this epidemic,expand their knowledge through research,develop competencies and confidence inpublic speaking, and conceptualizeprogrammes to integrate into the school andthe community. The Scotia Group is proud ofits commitment to corporate socialresponsibility and to supporting programmesthat have such a direct impact on thecommunities where we live and work.

Our embracing of this programme alsocreated an opportunity for Scotia Group to berecognized nationally and internationally. Webecame one of 19 founding members of theJamaica Business Council on HIV and AIDS; aswell as members of the Global BusinessCoalition on HIV and AIDS, Tuberculosis andMalaria; and received a Certificate ofExcellence from the U.S. International Filmand Video Festival for our video-drama, “ALetter to Pearl”, part of the free resourcematerial given to schools.

‘Speak Up! Speak Out!

“We must all accept the fact thatthe HIV and AIDS epidemic cancripple our society. We must‘Speak Up! and Speak Out!’about the behaviours thatencourage the spread of thisdisease and become aware of thedos and don’ts in coping withHIV and AIDS.

We must step up to the plate anddo all that needs to be done toensure that our young people notonly have information about HIV and AIDS, but cultivatebehaviours that will help to keepthem safe, and these are lessonsthat are best learnt at a youngage.

This primary schools HIV andAIDS Debating Competition isintended to help to meet thechallenge to change. Thechallenge to learn about thedisease, to face up to what itmeans, to understand what arethe right actions to take insituations relating to the diseaseand persons living with thedisease, and to embrace changein behaviours.

Scotia Group is committed toincreasing this awarenessthrough the education of ourchildren and the communities inwhich we live and work.”

William E. Clarke, OJ, CD President & CEO and

Scotiabank’s Spokesman on HIV and AIDS

Mr. William Clarke (2nd

left), with the winningteam from Hydel

Preparatory School and Mrs. Hyacinth

Bennett (centre) theirPrincipal and Coach.

45

2007 ANNUAL REPORT

Creating Opportunitiesfor Youth and Communities (continued)

Major Achievements Corporate SocialResponsibility

• Awarded 247 new and continuing scholarships and bursaries to students inhigh schools, community colleges and three local universities during the year

• Expanded daily Breakfast Feeding Programme to a total of five schools island wide with a collective population of500 students

• Launched ‘Speak Up! Speak Out!’National Primary Schools HIV and AIDS Debating Competition

• Donated $17.5 million to repair schools damaged by Hurricane Dean

• Donated 54 computers to 17 educational institutions

• Expanded the School Road Safety Programme to include erecting of road signs

• Donated new Ultrasound, X-ray machines and Infusion Pumps to Scotiabank Centennial Accident & Emergency Unit,University Hospital of the West Indies

• Donated six new dialysis machines to Scotiabank Jamaica Foundation Haemodialysis Unit, Cornwall Regional Hospital

• Repaired the roof and painted theScotiabank Jamaica Foundation Accident and Emergency Unit, Port Antonio Hospital

• Completed a 300-seat Lecture Theatre for the Montego Bay Community College

• Launched ‘The Teller…stories to tell’, a weekly programme on TVJ

• Enhanced our image with a team of 500Scotiabank Volunteers – who participated inTeacher’s Day, National Labour Day, ICC Cricket World Cup West Indies 2007,and other charity events

• Hosted the Annual Scotiabank LectureSeries. Former Governor of Florida, Jeb Bush, was keynote speaker andaddressed the topic ‘ConfrontingRadical Change to Bring Future EconomicRewards’

• Continued the provision of meals for 45residents of the Golden Age Home inKingston

• Received the Certificate of Excellence fromthe US International Film and Video Festivalfor our locally produced video-drama, ‘A Letter to Pearl’

46

A Commitment to CorporateSocial Responsibility

“In 2007, Scotia Group executedseveral projects and programmeswhich further demonstrated ourcommitment to our CorporateSocial Responsibility and toimproving the communities inwhich we live and work.

Scotiabank and the ScotiabankJamaica Foundation donated $170 million to the Health and Education sectors andCommunity activities.

During the year, the Foundationdonated a total of $67 million tovarious projects. Since itsinception, it has donated $507million to Education, Health andCommunity projects.

This year, we have cemented ourcommitment to the communityin which we operate byemploying a Manager forCorporate Social Responsibility.This action demonstratesunequivocally, that we are reallyserious about giving back to ourpeople and our community.”

Joylene Griffiths IrvingExecutive Director

Scotiabank Jamaica Foundation

2007 ANNUAL REPORT

Creating Opportunities in SportsSponsorship

Scotiabank was proud to play a role as regionalsponsor in the staging of the ICC Cricket WorldCup in the Caribbean in 2007. The third-largestsporting event in the world occurred betweenMarch and April 2007. The Bank’s involvement incricket in the region dates back almost 10 years,so it was a natural partnership that increased ourvisibility in the Jamaican community.

Our connection with the tournament and ourdedication to the development of the sport washighlighted through a myriad of activities. Keyamong these, was the mounting of a muralspecially commissioned by Scotiabank andpainted by renowned Barbadian artist, MichaelNaemsch. The mural depicted our focus on youthin sports through our Kiddy Cricket programme,which remains the centrepiece of the Bank’sassociation with West Indies cricket. Our youngconstituents’ performance and participationcontinue to be encouraging and rewarding, andthe programme grows yearly.

In reinforcing our theme ‘The Next Great CricketMoment,’ the Bank developed what we termed‘The Legends Series,’ a group of vignettesfeaturing past Jamaican cricketing greatsMichael Holding, Maurice Foster, CourtneyWalsh, Jeffrey Dujon and Jimmy Adams. Theseries highlighted great cricket moments as seenthrough the eyes of these legends, and was airedon television to rave reviews from cricketaficionados and weekend fans alike. Weanticipated that the sentiments expressed wouldresonate with the young cricketers andsufficiently motivate them to perform admirablyat the national and international levels topreserve our great West Indian cricket history.

We carried the cricket theme through to ourCustomer Appreciation Day activities. Customerswere able to celebrate with us in branches andon match days at the Trelawny Multi-purposeStadium and Sabina Park, where they wereinvited to be a part of historic cricketingoccasions such as the opening ceremony and towatch various matches.

Cricket fans were particularly pleased with ourcalendar, developed to highlight great momentsin West Indies cricket, facts and trivia about thesport, and the development of the various stadiaaround the Caribbean for the event.

Another highlight was our association withschool boy football and our national netballprogramme. Scotiabank signed a three-year dealas an associate sponsor of the School BoyFootball Competition organized by ISSA,featuring teams vying for the Manning andDaCosta Cups, as well as the Walker Cup andOlivier Shield. The Bank also signed on tobecome a major sponsor of the Jamaica NetballAssociation – their developmental trainingprogramme that ensures that the properfoundation is laid for its future great players.

Recognizing Potential

“We recognize that sportscontribute to a high level of community spirit andinvolvement, and Scotia Groupwishes to preserve and developthis spirit, ensuring a brighterfuture for our young people.

Participation in team sportsgives our youth an opportunity tolearn the important life lesson ofteam above self, and aid in theirgrowth and development in ameaningful way.

Scotiabank’s historical positioningof over 175 years in operation andas the most profitable commercialbank in the country, has created arich legacy which gives us athorough understanding of theimportance and value of thecontribution that our young peopleare capable of making.

Our ongoing commitment tosports sponsorship in Jamaica is a demonstration of thatunderstanding.”

Heather GoldsonVice President

Marketing

Scotiabank KiddyCricketers took tothe field at Sabina

Park during thelunch break of theICC Cricket WorldCup semi-final todemonstrate their

cricketing skills.

47

Creating CreatingStaff from

Scotiabank Centreproudly show that Scotiabank is #1 in

their books.

48

OpportunitiesOpportunitiesfor Employeesfor Employees

49

2007 ANNUAL REPORT

Creating Opportunitiesfor Employees

Creating Opportunities forEmployees

A Culture ofOpportunity

With Training and Development

Peter Mohan Incumbent Branch Manager

Scotiabank, Morant Bay

“I began my career at Scotiabank as a porter,but I had my sights set on being a teller,because I felt I had the qualifications toachieve this goal. So I helped the tellers andback office staff in the evenings after thebranch was closed and, soon enough, I waspromoted to teller. That was 14 years ago. Iam now a management trainee, and I’verecently completed a Bachelor of Sciencedegree in Management Studies, which wassponsored by the Bank,” said Peter Mohan,who will shortly assume the responsibility ofmanaging the Morant Bay Branch.

Charting Career PathsIn the last year alone, we have strengthenedour support network for employees so thatthey not only have a sense of purpose abouttheir individual roles, as well as a collectivesense of direction and a vibrant sense of

commitment to the Group. In creatingopportunities for our employees, we want toensure that their talents are nurtured and thattheir passion for the work they do ishonoured and sustained. Scotia Groupsupports our employees by giving them thefreedom to succeed in their jobs and to chartlong-term their futures with the Group. As aresult, we have received recognition from theJamaica Employers’ Federation and from theHuman Resource Management Association ofJamaica.

Our ability to seize market opportunities restssquarely on how well we match the rightpeople with the right job. Our employeewebsite, HR Passport, allows us to do this byoffering information about job postings,locally and internationally. The site also hasdetails on career planning and developmentinitiatives, which gives our employeesopportunities to seek advancement withinthe Group.

It is important that we equip our employeeswith the experience that will allow them toflourish within the Group. To do this, wedeveloped R.E.A.P. – The Rotation, Exposure,Apprenticeship Programme – an initiativedesigned to give full-time clerical andsupervisory staff the opportunity to develop a360-degree view of the Group’s operations inan intensive two-week cross-trainingprogramme.

Additionally, we improved our coachingprogramme to help us to build employeeproficiency. Through this programme,employees have regular, frank discussionswith their supervisors. From this, they are ableto develop a good sense of the value theybring to their jobs and receive guidance onhow to improve their performance.

Our interest in employee advancement isfurther demonstrated in our approach totraining. During 2007, 1,595 employeesimproved their competencies by participatingin courses at our Training Centre.

One Team, One Goal

“The business objectives agreedfor the Scotia Group are wellwithin reach when employeesunderstand the goals, takeownership for them and strive tomake them happen. We arekeenly aware that theorganization has a responsibilityto ensure that the goals are fullyunderstood from the onset. When there is widespreadorganizational traction for thistype of approach, what follows isincreased employee and teameffort.

We will continue to engender aculture in which employeeswant to first of all, be more sothat they can do more as wellas give more. With all of thishappening concurrently, theorganization and its employeesare well placed to grow into thenext generation of success.”

Michael JonesSenior Vice President

Human Resources

50

2007 ANNUAL REPORT

On an annual basis, we offer a total of 10scholarships to staff to attend NorthernCaribbean University, the University ofTechnology or the University of the WestIndies. Scholarships cover tuition,miscellaneous fees and books. Eachscholarship represents a belief in thepotential of the award recipients and acommitment to their success.

MMaajjoorr AAcchhiieevveemmeennttssHHuummaann RReessoouurrcceess

• Human Resources Management Association of Jamaica Award – Third Place for Scotiabank Jamaica Development Suite covering coaching programmes and Annual Employee Conference Seminars

• Launch of HR Passport, an Intranet sitewith information on policies, careeropportunities, training, compensationand benefits.

• Launch of Accreditation Programme to support career planning and employee development

• Launch of engagement programme for lower-level staff to provide rotation and build commitment

51

Adza Davis, Systems Team Leadreceived his Master of Business Administration Degree from the University of New Orleans.

Creating OpportunitiesCreating Opportunities

Customer Mr. Rory Rowe, does a transaction atthe Internet Banking Kiosk in the NewKingston Branch.

for Customer Experience

52

for Customer Experience

2007 ANNUAL REPORT

53

Creating Opportunitiesfor Customer Experience

Enhancing CustomerExperience

“We take it very seriously thatour customers have a choice offinancial providers, and thatScotiabank's continued industryleadership depends largely onthe quality of experience ourcustomers have whenever theydo business with us. As a result,Scotia Group has placed achievingexcellence in our customerexperience at the top of our listof strategic priorities.”

Maya WalrondSenior Vice President Customer Experience,

Technology Innovation andProjects

A cross functional teamrepresenting various levelsof Sales, Service andSupport functions withinScotiabank participating inthe Root Map focus groupworkshop at the TrainingCentre in October 2007.

Root Map Learningprovides an interactive and engaging way to getemployees excited about anew strategy.

Creating Opportunities forCustomer Experience

Technology leadingthe way

Customer Experience, TechnologyInnovation and Projects - A New Unit

Everything that we do revolves around ourcustomers, but this was further amplified in2007 with the debut of a new divisionexpressly focused on improving ourrelationships with the people we serve.

One of the mandates of this new division isto create a sustained customer-centricculture throughout the organization. In thisregard, emphasis will be placed on executingappropriate strategies to provide exceptionalservice quality, service delivery and customerexperiences.

Scotia Group views technological innovationas one of the key drivers to remainingcompetitive in the Jamaican environment.Technology will always drive innovation, butit can only be a meaningful if it provides ourcustomers with solutions that satisfy theirneeds. The implementation of bettertechnologies will allow our staff time tofocus on delivering service to our customersand improving our creativity in developingservice enhancements.

In 2007, we made significant investments to enhance the service we provide through our 24-hour Customer Care Centre. We completed our Customer ConnectProgramme, which ensures that customerscan easily have their queries handled bytrained Customer Service Representatives orby our branch staff. We also introduced the1-888-4-SCOTIA, so that our customers onlyhave one number to remember to access anyservice provided throughout the ScotiaGroup network.

In this coming year, both our staff andcustomers will see the aggressive steps weare taking to raise our customer experienceto the next level. Our staff will be given newtechnology to better manage our serviceissues, and will be supported by revampedtraining, measurement and reward andrecognition programmes focused on thedelivery of an exceptional experience to ourcustomers.

Customers will benefit from streamlinedaccount opening, enhanced any-branchbanking, improved tracking and handling ofservice issues, and a dedicated team ofScotiabankers who aim to exceed expectations.

2007 ANNUAL REPORT

Management’s Discussion & Analysis

54

FINANCIAL RESULTS OVERVIEW

Scotia Group achieved record results and exceededour key financial targets for 2007. Net incomeavailable to common shareholders was $7,493million, an increase of $694 million or 10.2% whencompared to the same period last year. This marksthe eleventh consecutive year of increased profits forScotia Group and we remain committed to ourstrategy of diversification across business lines.

The acquisition of Dehring Bunting & Golding Limited(DB&G) during the year laid the foundation for ScotiaGroup to become leaders in wealth management andwealth creation. The company made solidcontributions to asset growth and increasedprofitability of the Group. In spite of reductions ininterest margins and increased operating costs, all ourbusiness lines contributed positively to our netincome for the year.

Earnings per share for the year was $2.48, comparedto $2.32 for the last year, while return on averageequity remains very strong at 24.01%.

Total revenues rose 15.9% year over year, as one ofthe major contributors to our success this year wassignificant growth in retail loans. Retail loans (ScotiaPlan Loans, Credit Cards and Mortgages) increased byover $8 billion. Interest income earned from securitiesalso increased, due to volume growth in theportfolios, as market interest rates continued itsdownward trend for most of the year.

These strong results reflect Scotiabank’s corestrengths in risk management and cost control andour continued focus on customer satisfaction. Theyare also a reflection of customer-focused execution byour talented and dedicated employees, who continueto provide exceptional performance in growingprofits. We are proud to be recognized as an employerof choice in Jamaica, and to obtain recognition frommany international organizations.

The high credit quality in the Group’s loan portfolioswas maintained as we continued to exercise prudentselection and management of our expanded loanportfolio. Non-performing loans as at October 31,2007, were $2,109 million, of which $792 million

relate to the consolidation of DB&G. The non-performing loans for the Scotia Group were $1,316million; this was an increase of $307 million whencompared to $1,009 million a year ago. The Group’sloan loss provision as determined by IFRS is $857million, of which $667 million is specific and $190million is general. The total provision for the similarperiod last year was $478 million, translating into ayear over year increase of $379 million, of which theconsolidation of DB&G accounts for $325 million.

Non-interest Expenses excluding Change inPolicyholders’ Reserve and Loan Loss Provisions,amounted to $9,620 million, an increase of $1,757million over last year, of which $535 million relates tothe inclusion of DB&G in the consolidated results. Thebalance of $1,222 million was due to increased staffcosts, amortization of the intangible assets resultingfrom the acquisition of DB&G, advertising and publicrelations (sponsorship of ICC Cricket World Cup) andcomputer-related expenses.

Our capital base remains strong, as we continue togenerate sufficient capital from operations. Totalshareholders equity grew to $34 billion, $6.9 billionmore than the prior year. This was due mainly to anincrease of $3.6 billion in the share capital of ScotiaGroup Jamaica Limited. Our risk-based capitaladequacy ratio is a measure of the Group's overallstrength and at 26.94%, far exceeded the regulatoryrequirements, which requires that the Group maintaina ratio between its capital base and the aggregate ofits risk weighted assets at no less than 10%.

STRONG SHAREHOLDER RETURN

Our solid financial performance continues to drivestrong shareholder returns. Shareholders have hadpositive returns from the Group’s shares, with thecompounded annual return over the past five yearsaveraging 19%. We remain focused on achievingsustainable, long-term earnings growth and a highreturn on equity. Shareholders continue to receivequarterly dividends, which totalled $1.19 per sharefor this year, an increase of 11.2% over 2006.

• Earnings per share of $2.48, compared to $2.32 for last year

• Return on Average Equity 24.01%, compared to 26.35% for last year

• Productivity ratio of 55.34%, compared to 52.59% for last year

• Dividend of $1.19 per share, compared to $1.07 per share last year

2007 ANNUAL REPORT

IMPACT OF ACQUISITIONS

During the year, we completed the reorganisation ofScotiabank Jamaica, resulting in The Bank of NovaScotia Jamaica Limited and DB& G Limited becomingsubsidiaries of Scotia Group Jamaica Limited. On July1, 2007, Scotia Jamaica Investment ManagementLimited became a wholly-owned subsidiary of DB&Gin our quest to consolidate the investmentmanagement activities within the Group and toachieve efficiencies and economies of scale. Thecompletion of this reorganisation has positionedScotia Group to become a larger player in thefinancial services sector. The impact of DB&G on theresults for this year are a contribution to grossrevenues of $2,481 million and net income of $577million, for the period from May 1, 2007 to October31, 2007.

GROUP FINANCIAL PERFORMANCE

Total RevenueTotal revenue was $22,765 million in 2007, anincrease of $3,115 million over the prior year.Before the impact of the acquisition, the Group’srevenues grew by $2,279 million or 11.5%,reflecting growth in all business lines. Retail Bankinghad higher revenues due to solid growth in assetvolumes. The increase due to growth in otherrevenue was fuelled by strong growth in foreignexchange trading profit and commercial and retailbanking fees.

Net Interest IncomeNet Interest income was $17,478 million in 2007,up $1,955 million over last year, despite continuedreduction in market interest rates. We achievedgrowth in net interest income due to strong portfolio

volume growth, particularly on the retail side, wherewe experienced growth in retail loans of 35%.

The Group’s net interest margin (net interest incomeas a percentage of average assets) was 6.92% in2007, a decrease of 99 basis points from theprevious year. This was due primarily to the impact ofthe acquisition, as well as the continued decline inJMD net interest margin. Average assets grew by30%, reflecting the strong growth in retail assets.

Other IncomeOther income, defined as all income other thaninterest income and insurance premium income,increased by $972 million. This was driven by retailand commercial banking fees and foreign exchangetrading revenue.

Credit card revenues rose 7% to $585 million in2007. This was due to growth in activity andvolumes of the credit card portfolio resulting fromvarious promotional activities.

Foreign currency trading profit increased 21% to$1,067 million. This was primarily driven by growthin volume, as margins declined due to increasedcompetitive pressures in the foreign exchangemarket.

Credit fees increased by 45% to $880 million, drivenby increased loan volume, as well as fees earned forarranging offshore loan facilities.

Scotia Jamaica Life Insurance Company had anothersuccessful year with total gross premium income of$4.8 billion. ScotiaMINT, the interest sensitive lifeinsurance policy, as well as Creditor Life, madesignificant gains in Insurance Premium.

(1) Compound Annual Growth Rate (CAGR) (2) Total annual shareholder return assumes reinvestment of quarterly dividends, and therefore

may not equal the sum of dividend and share price returns in the table.

55

2007 ANNUAL REPORTManagement’s Discussion & Analysis (continued)

56

Combined net premium income for both productsincreased by approximately $188 million, amountingto $618 million for this year.

Other income includes significant gains on the sale ofsecurities amounting to $296 million, by DB&GLimited.

Non Interest Expenses Non-Interest expenses, excluding changes inpolicyholders’ reserves and loan loss provisions, were$9,620 million in 2007, an increase of $1,757 millionfrom last year, of which DB&G accounts for $535million in the consolidated results. Salaries andemployee benefits are the major contributor to thisexpense category, and was $5,403 million, up 16%from last year. This was primarily due to salaryincreases effected November 2006 in accordance withthe union contract.

Property-related expenses were $1,508 million in2007, an increase of 22% from last year. This wasdriven mainly by increases in security and utility costs.

Advertising, public relations and businessdevelopment costs increased by $186 million to $503million. During the year, we had a number ofpromotional campaigns for ICC Cricket World Cup,credit cards, home equity loans and ScotiaWheels.

ProductivityWith strong revenue growth and our continuedunwavering focus on managing costs across theGroup, our productivity ratio (non-interest expense asa percentage of total revenue – a key measure of costefficiency) was 55.34%. If insurance premiums andrelated actuarial expenses were excluded, torecognize the significant dissimilarities between therevenue/expense pattern of the insurance businessand the other financial services offered by the ScotiaGroup, the productivity ratio for the period was45.81%, which is significantly better than theinternational benchmark of 60%.

We will continue our focus on finding new ways ofimproving operational efficiency by consolidating andstreamlining processes and structures, eliminating

duplication and sharing best practices throughout ournetwork.

TaxesIn 2007, the provision for income and deferred taxeswas $2,557 million, up $40 million or 2% from lastyear. DB&G benefited from the utilization of previouslyunrecognized deferred taxes on tax losses carriedforward, which positively impacted the balance by$255 million.

Credit QualityThe Group’s non-performing loans now represent1.82% of total loans and 0.64% of total assets,compared to 1.68% and 0.50% respectively in theprior year.

The IFRS Loan Loss Provisioning requirements arecomputed using a different methodology from theRegulatory Requirement. The difference in the amountcomputed under the two methodologies is reportedas Loan Loss Reserve in the equity component of theBalance Sheet. The loan loss provision as determinedby IFRS is $857 million, of which $667 million isspecific and $190 million is general.

The loan loss provision as determined by RegulatoryRequirement is $1,902 million, of which $355 millionrelates to provisions established by DB&G. Theremainder of $1,548 relates to Scotiabank and itssubsidiaries, and provides coverage of 118% overnon-performing loans. Over the years, we continue toexperience significant growth in the loan portfolio;however, the loan loss provision has remainedrelatively stable, due to Scotiabank’s strong creditpolicy and loan administration procedures, whichhave ensured the high quality of the loan portfolio.

Summary of Quarterly Results We delivered strong results for the fourth quarter, withnet income attributable to common shareholders of$2,126 million, which was $152 million above the netprofit for the quarter ended July 31, 2007, and $311million above the net income for the quarter endedOctober 31, 2006. The year-over-year increasereflects the impact of the retail volume growth, partlyoffset by margin compression.

$ Million

2007 ANNUAL REPORT

The Group’s results in each quarter of this yearwere higher than those of the same quarter in2006, as well as each preceding quarter.Revenues were consistently increasing in eachquarter, resulting from increased asset growth. Asof May 1, 2007, the results of DB&G wereconsolidated in the Group’s financial statements.

GROUP FINANCIAL CONDITION

AssetsThe Group’s total assets increased year-over-yearby $63 billion or 32% to $263 billion as atOctober 31, 2007. Growth was spread acrossmost asset categories, with the primary focusbeing retail and commercial loans, as well assecurities.

Cash ResourcesOur cash resources held to meet statutoryreserves and the Group’s prudential liquiditytargets stood at $55 billion as at October 31,2007, compared to $60 billion at the previousyear-end. These assets are held in liquid form atlevels and terms that enable us to respondeffectively to changes in our cash flow, withoutsevere adverse consequences. The amounts heldexceed the statutory minimum for such assets inrelation to our prescribed liabilities.

SecuritiesTotal investment securities increased from $69billion to $98 billion, due to growth in theInvestment portfolios of the Group and from theacquisition of DB&G. Pledged securities, mainly

relating to securities sold under repurchaseagreements, now stands at $35 billion, comparedto $20 billion last year. Available-for-sale andheld to maturity investments, increased by $13billion to $ 61 billion, as at October 31, 2007. TheTrading portfolio increased to $1.1 billion,resulting from the acquisition of DB&G.

LoansThe Group experienced solid growth in its loanportfolio this year, with loans after allowance forimpairment losses growing to $77 billion. Theretail loans showed very good performance, withScotia Plan Loans and Credit Cards, increasing by 43% and 19% respectively. ResidentialMortgages also increased by $1 billion or 26% to$5 billion in 2007.

Due to our proven risk management practices, thequality of the loans booked continue to be highas our non-performing loans, and allowance forimpairment losses continue to be relatively stabledespite the exponential growth in the loanportfolio. As at October 31, 2007, our non-performing loans were $2.1 billion, including$792 million arising from the consolidation ofDB&G.

Our IFRS allowance for impairment lossesincreased to $857 million, including $325 millionfrom the consolidation of DB&G. We areconfident that with this level of provisioning, theGroup is adequately protected should theeconomy suffer a short-term down turn.

$ Billion

57

2007 ANNUAL REPORT

Management’s Discussion & Analysis (continued)

LiabilitiesTotal liabilities were $227 billion as at October 31, 2007,an increase of $54 billion or 31% from last year.

Deposits The Group continues to increase its deposit base despitethe noticeable market shift from traditional financialmarkets deposits and investments. Deposits grew to $138billion, up $18 billion from the previous year, reflectingcontinued confidence in Scotiabank. Personal depositswere up $10 billion or 16%. Our core suite of depositproducts, which includes current accounts, savingsaccounts and term deposits showed continued growthyear over year.

Obligations related to repurchase agreements, capitalmanagement and government securities fundsThese represent another source of wholesale funding tothe Group. Securities sold under repurchase agreementsnow stand at $32 billion up $14 billion or 77% over lastyear. The capital management and government securitiesfunds, included from the consolidation of DB&G, amountto $14 billion as at October 31, 2007.

Policyholders’ FundThe Scotia Insurance Policyholders’ Fund increased to $27billion, an increase of $3 billion or 12.5% over 2006. This was due to the net increase in gross premium income.

Shareholders’ EquityTotal shareholders’ equity rose to $36 billion in 2007. Theincrease was mainly attributable to a $3.6 billion increasein the share capital of Scotia Group Jamaica Limited,consistent with the Scheme of Arrangement.

Capital Management Scotia Group maintains a strong capital base to supportthe risks associated with its diversified businesses. TheGroup’s capital ratios remain among the highest of its peergroup. This strength contributes to safety for the Group’scustomers, and fosters investor confidence. In addition, theGroup’s practice is to remain well capitalized in order totake advantage of growth opportunities as they arise.

Strong capital also provides for the potential to enhanceshareholder returns through increased dividends or sharerepurchases.

Subject to The Banking (Capital Adequacy) Regulations1999, a bank shall at all times maintain the ratio betweenits capital base and the aggregate of its risk-weighted onbalance sheet assets, risk weighted off-balance sheetitems and risk-weighted balances related to managedfund activities and foreign exchange exposure of no lessthat ten percent (10%). Measured on a similar basis, as atOctober 31, 2007, the capital adequacy ratio for ScotiaGroup (consolidated) stood at 26.94%.

DividendsOur shareholders received increased dividends during2007, in keeping with our policy to increase dividends inline with the trend in earnings, while ensuring thatadequate levels of capital are kept for the purpose ofprotecting depositors and growing the business of theGroup.

Dividends per share totalled $1.19 in 2007, an increase of11% from 2006. The gross dividends for 2007 were$3,649 million, up $517 million from last year. The steadygrowth in dividends is a major contributor to the highlong-term returns generated for shareholders. Thedividend payout ratio for 2007 was 47.26% compared to46.07% last year. Both ratios are within the target payoutrange of 40% - 50%.

58

$ Billion

$ Billion

2007 ANNUAL REPORT

59

BUSINESS LINE OVERVIEW

RetailBanking

Corporate &CommercialBanking

Treasury

Insurance

InvestmentManagementServices

Other

Retail Banking had an exceptional year, with Gross External Revenuesincreasing by 17.5% to $9.4 billion. Strong growth within our ScotiaPlan Loans, Credit Cards and Mortgages portfolios resulted fromincreased and focussed sales activities. Profit before Taxes increased by6.2% to $3.3 billion this year. Non-interest expenses and provisions forcredit losses remained well controlled.

Corporate and Commercial Banking had a good year, with profitbefore taxes of $2.0 billion, an increase of 2.5% from last year.This result was achieved despite the challenges of low loandemand in this market segment.

Treasury profit before taxes remained flat at $2.4 billion this year.This was due to the continued reduction in JMD interest rates,hence a reduction in JMD net interest margin. However, this waspartially offset by the year-over-year increase in net foreignexchange trading income by 21% to $1.1 billion.

Scotia Insurance had a good year as profit before taxes rose by10.6% to $1.7 billion in 2007. ScotiaMINT continues to enjoysignificant growth in market share, in terms of gross premiumincome and number of policies issued.

The Investment Management segment of the Group deliveredcredible performance this year with profit before taxes rising byover 100% to $716 million. The acquisition of DB&G and theconsolidation of Scotia Investments were two significantmilestones achieved during the year to garner this success.

The Other category includes activities of non-trading subsidiariesand other corporate adjustments, that are not allocated to anoperating segment.

2007FinancialPerformance

$ Million

$ Million

$ Million

$ Million

Profit before Taxes Investment Management Services

250

0

500

750

1,000$ Million

2007 ANNUAL REPORT


60

Risk Management

OVERVIEWThe Scotiabank risk managementframework has been developed to addressthe diversity of the Group’s businessactivities. We manage risk through aframework of risk principles, organizationalstructures and risk measurement andmonitoring processes that are closelyaligned with the activities of our businessunits. This framework is supported by arobust risk management culture and astrong commitment to active managementof risks by both the Board of Directors andsenior management. Scotia Group’sprimary risk management objectives are toprotect and ensure the safety and stabilityof customers’ funds that are placed in ourfiduciary care, and to create and protectshareholder value by properly assessingthe relationships between risks andrewards.

Through our various business activities weare exposed to specific banking risks andreputational risks, as well as those arisingfrom the general business environment.The four major types of specific bankingrisks are: credit risk, market risk, liquidityrisk and operational risk.

The risk management framework is drivenby the principles below. These principlesare applied to all businesses and risktypes.

• Board oversight – Risk strategies,policies and limits are subject to Board review and approval. Policies provideguidance to the businesses and riskmanagement units by setting the boundaries on the types of risks the Group is prepared to assume. Limits are set to ensure risk takingactivities will achieve predictable results within the tolerances established by the Board of Directors, as well as to establish accountability for key tasks in the risk-taking process, and establish the level or conditionsunder which transactions may be approved

or executed. Risk strategies, policies and limits are designed with a view to ensuring that risks are well diversified.

• Measurement, Review and Reporting – Processes are designed to ensure that risks are properly assessed at the transaction,customer and portfolio levels. Measurementtools quantify risk across products andbusinesses and are used, among other things, to determine risk exposures. Reporting tools are required to aggregate measures of risk across products andbusinesses for the purposes of ensuringcompliance with policies, limits andguidelines and providing a mechanism forcommunicating the quantum, types and sensitivities of the various risks in theportfolio. This information is used by theBoard and senior management tounderstand the Group’s risk profile and theperformance of the portfolio against definedgoals.

• Audit Review – Individual risks and portfolios are subject to comprehensive internal andexternal audit review, with independent reporting to the Audit Committee of theBoard on the effectiveness of the riskmanagement policies and the adherence tointernal controls.

The various processes within the Group’srisk management framework are designedto ensure that risks in the various business activities are properly identified,measured, assessed and controlled. Riskmanagement strategies, policies and limitsare then designed to ensure that theGroup’s risk-taking is consistent with itsbusiness objectives and risk tolerance. TheAsset and Liability Committee (ALCO)ensures that risks are managed within thelimits established by the Board ofDirectors. The Committee meets at leastonce monthly to review risks, evaluateperformance and provide strategicdirection.

2007 ANNUAL REPORT

61

For new acquisitions, Scotia Group willassess existing risk management programsand, if necessary, develop an action plan tomake improvements in a timely fashion tothe processes related to the identification,measurement, management, monitoringand reporting of risks.

Credit RiskCredit risk is the risk of loss, resulting fromthe failure of a borrower or counterparty to honor its financial or contractualobligations to the Group. Credit risk iscreated in the Group’s direct lendingoperations and its funding, investment andtrading activities, where counterpartieshave repayment or other obligations to theGroup.

Scotia Group’s credit risk is managedthrough strategies, policies and limits thatare approved by the Board of Directors.These strategies include centralized creditprocesses, portfolio diversification, creditenhancements, enhanced credit analysisand strong Board oversight. The Group’scredit risk limits to counterparties in thefinancial and government sectors are alsomanaged centrally to optimize the use ofcredit availability and to avoid excessive riskconcentration.

Scotia Group employs a highly centralizedcredit granting process that ensures allmajor lending decisions are referred to aSenior Credit Committee, or whereappropriate, to a Loan Policy Committee.Client relationship officers in the businesslines submit credit proposals on majorcorporate and commercial accounts directlyto the Credit Department. Credit specialists,who are independent of the business line,analyze the proposal. A risk rating system isused to quantify and evaluate the risk, anddetermine whether the Group is beingadequately compensated, and the Boardreviews and ratifies all major credits.

The evaluation of the credit risk of aborrower, or for a specific credit facility fora borrower, leads to classification under theGroup’s various internal risk rating systems.The Group applies different methodologiesto arrive at risk ratings for the variousunique portfolios. These systems aredesigned to meet the objectives oftransparency and replicability in order toprovide Group-wide consistency in terms ofcredit adjudication, minimum lendingstandards by risk ratings and reporting ofcredit risk.

Once a credit proposal has been authorized,a company’s financial condition ismonitored by business line and CreditDepartment personnel for signs ofdeterioration, which could affect theborrower’s ability to meet its obligations tothe Group. In addition, a full review and riskanalysis of each client relationship isundertaken at least annually. Additionalreviews are carried out more frequently inthe case of higher risk credits.

Decisions on small and medium-sizedcommercial credits are made utilizing acentralized loan underwriting system, thatis based on a computerized scoring model.

Retail loan portfolios continue to bereviewed on a monthly basis for emergingtrends in credit quality, in addition toregular analytical reviews to confirm thevalidity of the parameters used in thescoring models.

The Group’s credit adjudication andportfolio management methodologies aredesigned to ensure consistent underwritingand early identification of problem loans.Special attention is paid to themanagement of problem loans throughintensive management and control, in orderto maximize recoveries of doubtful debts.

2007 ANNUAL REPORT


62

Market RiskMarket risk is the risk of loss of value in theGroup’s portfolios resulting from changesin interest rates and foreign exchangerates. The Group assumes market risk inboth its trading and non-trading (fundingand investment) activities. Market riskexposures are managed through keypolicies, standards and limits establishedby the Board of Directors, which areformally reviewed and approved by theBoard at least annually.

Within the policy and limit frameworkestablished by the Board, ALCO providessenior management oversight of theGroup’s market risk exposure. The ALCO isprimarily focused on asset liabilitymanagement, which includes lending,funding, trading and investment activities.All market risk limits are reviewed at leastannually.

The Group holds investment portfolios forliquidity, longer-term capital appreciationor attractive after-tax yields. Theseportfolios expose the Group to interestrate, foreign currency, credit spread andequity risks. Debt investments primarilyconsist of government and corporatebonds. Equity investments includecommon shares, as well as a diversifiedportfolio of third-party managed funds.

The majority of these securities arevalued using prices obtained fromexternal sources. Scotia Group’s policies,processes and controls for tradingactivities are designed to achieve abalance between pursuing profitabletrading opportunities and managingearnings volatility within a framework ofsound and prudent practices. Tradingactivities are primarily customer focused,but also include a proprietarycomponent. Market risks arising fromthese portfolios are controlled by Board-approved policies and limits.

Interest Rate RiskInterest rate risk arises when there is amismatch between positions, which aresubject to interest rate adjustment withina specified period. The Group’s lending,funding and investment activities giverise to interest rate risk. For theseactivities, the impact of changes ininterest rates is reflected in both equityand net interest income.

Scotia Group’s Asset LiabilityManagement (ALM) programme focuseson measuring, managing and controllingthe risks arising in the Group’s lending,funding and investing activities. Our ALMprocess is designed to maintain a balancebetween enhancing interest revenue andmaintaining strong liquidity within aframework of sound and prudentpractices.

The ALCO evaluates interest rate riskexposure arising from the Group’sfunding and investment activities at leastmonthly. This supervisory role issupported by risk managementprocesses, which include gap andsensitivity analysis. Under gap analysis,interest rate sensitive assets andliabilities are assigned to predefined timeperiods on the basis of expected re-pricing dates. A liability gap occurs whenmore liabilities than assets are subject tointerest rate changes during a given timeperiod.

Conversely, an asset-sensitive positionarises when more assets than liabilitiesare subject to rate changes. Interest rateexposures in individual currencies arecontrolled by gap limits. Sensitivityanalysis assesses the effect of changes ininterest rates on current earnings and onthe economic value of assets andliabilities.

Risk Management (continued)

2007 ANNUAL REPORT

63

Foreign Exchange RiskForeign exchange risk arises from tradingactivities and foreign currency operations.In its trading activities, the Group buysand sells currencies in the spot market forits customers. Foreign exchange gainsand losses from these activities areincluded in other income. The Groupmitigates the effect of foreign currencyexposures by financing its netinvestments in its operations withborrowings in the same currencies, as thefunctional currency involved.

Foreign currency risk arising from theGroup’s foreign currency trading issubject to Board approved limits. TheALCO reviews and manages theseexposures.

Equity RiskEquity risk is the risk of loss due tochanges in the prices, and the volatility ofindividual equity instruments and equityindices.

The Board sets limits on the level ofexposure, and diversification is a keystrategy employed to reduce the impacton the portfolio, which may result fromthe non-performance of a specific class ofassets. Given the potential volatility inthe value of equities and the non-interestbearing characteristics of these instruments,the Group limits the amount invested inthem.

Liquidity riskLiquidity risk is the risk that the Group isunable to meet its financial obligations ina timely manner at reasonable prices.Financial obligations include liabilities todepositors, settlement of securitiesborrowing and repurchase transactions,and lending and investment commitments.

Effective liquidity risk management isessential in order to maintain the confidenceof depositors and counterparties, and toenable our core businesses to continue togenerate revenue, even under adversecircumstances. This risk is managed withinthe framework of policies and limits that isapproved by the Board of Directors. TheBoard receives reports on risk exposures andperformance against approved limits. The ALCO provides senior managementoversight of liquidity risk and meets monthlyto review the Group’s liquidity profile.

The Group assesses the adequacy of itsliquidity position by analyzing its currentliquidity position, present and anticipatedfunding requirements, and alternativesources of funding. This process includes:

• Projecting day-to-day cash flows foreach major currency

• Managing the concentration andprofile of debt maturities

• Monitoring of depositor concentrationboth in terms of the overall fundingmix and to avoid undue reliance onlarge individual depositors

• Maintaining a portfolio of highlymarketable assets that can easily beliquidated as protection against anyunforeseen interruption to cash flow

• Monitoring balance sheet liquidityratios against internal and regulatoryrequirements

• Maintaining of liquidity and funding contingency plans

The Group maintains flexibility using acomprehensive set of liquidity and fundingpolicies in order to address potential industry ormarket liquidity events.

$ Million

2007 ANNUAL REPORT


64

In the course of the Group’s day-to-dayactivities, securities and other assets are pledgedto secure obligations, or participate in clearingor settlement systems. Securities may also besold under repurchase agreements. As at October31, 2007, total assets pledged and/or sold underrepurchase agreements were $35 billion (2006 –$20 billion). The year-over-year increase was dueto an increase in assets pledged with respect tothe acquisition of DB&G.

FundingScotia Group relies on a broad range of fundingsources and applies prudent limits to avoidundue concentration. The principal sources offunding are capital, core deposits from retail andcommercial customers, and wholesale depositsraised in the interbank and commercial markets.Our extensive branch network provides a strongfoundation for diversifying our funding andraising the level of core deposits. Considerableimportance is attached to this core deposit base,which, over the years, has been stable andpredictable. In 2007, core savings depositscontinued to grow, reaching $73 billion as atOctober 31, 2007, representing 49% of totaldeposits.

Operational RiskOperational risk is the risk of loss, whether director indirect, to which the Group is exposed due toexternal events, human error, or the inadequacyor failure of processes, procedures, systems orcontrols. Operational risk, in some form, exists ineach of the Group’s business lines and supportactivities and can result in financial loss,regulatory sanctions and damage to the Group’sreputation.

Operational risks are managed and controlledwithin the individual business lines and a widevariety of checks and balances to addressoperational risks have been developed as animportant part of our risk management culture.They include the establishment of riskmanagement policies, a rigorous planningprocess, regular organizational review, thorough

enforcement of our Guidelines for BusinessConduct, and clearly defined and documentedapproval authorities.

Regular audits conducted by an experiencedindependent internal audit department includescomprehensive reviews of the design andoperation of internal control systems in allbusiness lines and support groups, new productsand systems.

As part of our strong internal control culture,units are also subject to a standard, documentedcompliance program. This comprises regulatoryawareness, regulatory risk assessment,compliance monitoring and problem resolution.Compliance matrices, which outline the variouslegislative and regulatory requirements for eachunit, have been developed. The Group’sCompliance Officer manages the ComplianceProgramme.

Scotiabank has developed policies, standardsand assessment methodologies to ensure thatoperational risk is appropriately identified,managed and controlled. The Bank’s risk controlself-assessment programme, provides a basis formanagement to ensure that appropriate andeffective controls and processes are in place onan ongoing basis to mitigate operational riskand, if not, that appropriate corrective action istaken.

The centralized operational loss event databasecaptures key information on operational losses.The scope of operational loss event datacaptured within the centralized databasecontinues to be enhanced. These data areanalyzed and reported to executive managementand the Board on a quarterly basis.

The Group’s business continuity managementpolicies require that all business units developbusiness continuity capabilities for theirrespective functions. The Group maintains andtests contingency facilities to support operationsin the event of disasters and to ensure efficient

Risk Management (continued)

2007 ANNUAL REPORT

65

operational recovery in the shortest possibletimeframe.

Risk mitigation programmes, which use insurancepolicies to transfer the risk of high severity losses,are used where feasible and appropriate.

Reputational RiskReputational risk is the risk that negative publicityregarding the Scotia Group’s conduct or businesspractices, whether true or not, will adverselyaffect its revenues, operations or customer base,or require costly litigation or other defensivemeasures.

Negative publicity about an institution’s businesspractices may involve any aspect of its operations,but usually relates to questions of business ethicsand integrity, or quality of products and services.Negative publicity and attendant reputational riskfrequently arise as a by-product of some otherkind of risk management control failure.

Reputational risk is managed and controlledthroughout the Group by codes of conduct,governance practices, risk managementprogrammes, policies, procedures and training.Many relevant checks and balances are outlinedin greater detail under other risk managementsections, particularly Operational Risk, wherereference is made to our well-establishedcompliance program. All Directors, officers andemployees have a responsibility to conduct theiractivities in accordance with the Guidelines forBusiness Conduct, and in a manner thatminimizes reputational risk.

The activities of the Legal Department; CorporateSecretary; Public, Corporate & GovernmentAffairs; and Compliance Department, areparticularly oriented to the management ofreputational risk.

2007 ANNUAL REPORTShareholdings

66

Scotia Group Jamaica LimitedList of Ten (10) Largest Shareholders

as at October 31, 2007Units

1. The Bank of Nova Scotia 2,233,403,384

2. Scotia Jamaica Investment Management Limited - A/C 3119 65,937,655

3. Life of Jamaica PIF Equity Fund 47,068,744

4. Scotia Jamaica Investment Management Limited - A/C 560 34,975,612

5. National Insurance Fund 26,541,440

6. Capital & Credit Merchant Bank Limited 21,280,842

7. Investment Nominees Limited - AC Lascelles Henriques S/A Fund 15,153,996

8. Capital & Credit Financial Group Limited 14,105,962

9. West Indies Trust Co. Ltd. A/C WT89 12,983,520

10. Manchester Pension Trust Fund 12,817,444

Scotia Group Jamaica LimitedShareholdings of Senor Management Officers


Ronald Bourdeau NIL

Keri-Gaye Brown NIL

Bevan Callam 1,136,994

William E. Clarke, CD 367,980

Roger Cogle 176,700

Sharon Colquhoun 24,706

Joylene Griffiths Irving 52,694

Wayne Hewitt 2,000

Michael Jones 249,452

Patsy Latchman-Atterbury 175,000

Bridget Lewis 113,800

Marcette McLeggon 86,698

Suzette McLeod 50,000

Hugh Miller 15,704

- Sheila McDonald 5,172

David Noël 150,745

Yvonne Pandohie 220,640

Rosemarie Pilliner 196,674

H. Wayne Powell 1,246,522

- Yanissa Investments 144,448

Shirley Ramsaran and

- Reginald Ramsaran 60,229

Anya Schnoor 237,000

Jacqueline Sharp 98,000

Heather Goldson 175,000

Michael Thompson 50,000

Audrey Tugwell Henry 12,446

Maroya E. Villafana-Sylvester NIL

Rosemarie Voordouw 13,520

Maya Walrond 250,000

Dudley Walters 61,787

Gladstone Whitelocke 60,000

- Elaine Whitelocke 65,000

- Justin Whitelocke 1,200

- Renee Whitelocke 1,320

David M. Williams 181,101

Frederick Williams NIL

Stacie Ann Wright 108,501

*Inclusive of shares in Jamaica Central Securities Depository

Scotia Group Jamaica LimitedShareholdings of Directors


Robert Pitfield 9,270

William E. Clarke, OJ, CD 367,980

Anthony Chang 3,274

Professor Celia D. C. Christie Samuels 20,000

Dr. Jean A. Dixon, CD 90,102

Muna M. Issa 29,986

Charles Johnston 2,328- Marine Management Services 64,472

Warren McDonald 10,000

Joseph M. Matalon NIL

Hon. Mayer M. Matalon, OJ 100,000

Hon. William A. McConnell, OJ, CD 10,000

Dr. Herbert J. Thompson, CD 29,640- Avery Thompson NIL

Professor Stephen Vasciannie 43,079

Richard E. Waugh 100,000

Stacie Ann Wright 108,501*Inclusive of shares in Jamaica Central Securities Depository

67

INDEPENDENT AUDITORS’ REPORT

To the Members ofSSCOTIA GROUP JAMAICA LIMITED

Report on the Financial Statements

We have audited the financial statements of Scotia Group Jamaica Limited (“the Company”) andthe consolidated financial statements of the Company and its subsidiaries (“the Group”) set out onpages 69 to 147 which comprise the Company’s and Group’s balance sheets as at October 31, 2007,the Company’s and Group’s statements of income, changes in equity and cash flows for the periodthen ended, and a summary of significant accounting policies and other explanatory notes.

Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of the financial statementsin accordance with International Financial Reporting Standards and the Companies Act. Thisresponsibility includes: designing, implementing and maintaining internal controls relevant to thepreparation and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error; selecting and consistently applying appropriateaccounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ ResponsibilityOur responsibility is to express an opinion on the financial statements based on our audit. Weconducted our audit in accordance with International Standards on Auditing. Those standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance as to whether or not the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditors’ judgment,including the assessment of the risks of material misstatement of the financial statements, whetherdue to fraud or error. In making those risk assessments, the auditors consider internal controlsrelevant to the entity's preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity's internal controls. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by management, as well as evaluating the overall presentation of the financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

KPMG P.O. Box 76Chartered Accountants KingstonThe Victoria Mutual Building Jamaica6 Duke Street Telephone +1 (876) 922-6640Kingston Fax +1 (876) 922-7198Jamaica, W. I. +1 (876) 922-4500

e-Mail [email protected]

KPMG, a Jamaican partnership and a Raphael E. Gordon Linroy J. Marshallmember firm of KPMG network of Caryl A. Fenton R. Tarun Handa independent member firms affiliated with Elizabeth A. Jones Cynthia L. LawrenceKPMG International, a Swiss cooperative. Patrick A. Chin Rajan Trehan

Patricia O. Dailey-Smith Norman O. Rainford

68

To the Members ofSCOTIA GROUP JAMAICA LIMITED

Report on the Financial Statements, cont’d

OpinionIn our opinion, the financial statements give a true and fair view of the financial positions of theGroup and the Company as at October 31, 2007, and of the Group’s and the Company’s financialperformance, changes in equity and cash flows for the period then ended in accordance withInternational Financial Reporting Standards, and comply with the provisions of the JamaicanCompanies Act.

Additional reporting requirements of the Jamaican Companies Act

We have obtained all the information and explanations which, to the best of our knowledge andbelief, were necessary for the purposes of our audit. In our opinion, proper accounting recordshave been maintained and the financial statements are in agreement therewith and give theinformation required by the Jamaican Companies Act in the manner so required.

November 26, 2007

69

2007 ANNUAL REPORT

Scotia Group Jamaica LimitedStatement of Consolidated Revenue and ExpensesYear ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

2007 ANNUAL REPORT

Scotia Group Jamaica LimitedConsolidated Balance Sheet31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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71

Scotia Group Jamaica LimitedConsolidated Balance Sheet (continued)31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

69 to147

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2007 ANNUAL REPORT

Scotia Group Jamaica LimitedStatement of Changes in Consolidated Stockholders’ EquityYear ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

73

2007 ANNUAL REPORT

Scotia Group Jamaica LimitedStatement of Consolidated Cash FlowsYear ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

74

2007 ANNUAL REPORT

Scotia Group Jamaica LimitedStatement of Consolidated Cash Flows (continued)Year ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

75

2007 ANNUAL REPORT

Scotia Group Jamaica LimitedStatement of Revenues and ExpensesPeriod ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

2007 ANNUAL REPORT

Scotia Group Jamaica LimitedBalance Sheet31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

76

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Scotia Group Jamaica LimitedStatement of Changes in Stockholders’ EquityPeriod ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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Scotia Group Jamaica LimitedStatement of Cash FlowsPeriod ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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2007 ANNUAL REPORT

Scotia Group Jamaica LimitedNotes to the Financial Statements31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

100%

77.01%

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Scotia Group Jamaica LimitedNotes to the Financial Statements (continued)31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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150,061,670

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2007 ANNUAL REPORT

AUDITED FINANCIALSTATEMENTS

THE BANK OF NOVA SCOTIAJAMAICA LIMITED

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149

INDEPENDENT AUDITORS’ REPORT

To the Members ofTHE BANK OF NOVA SCOTIA JAMAICA LIMITED

Report on the Financial Statements

We have audited the financial statements of The Bank of Nova Scotia Jamaica Limited (“the Bank”)and the consolidated financial statements of the Bank and its subsidiaries (“the Group”) set out onpages 151 to 227, which comprise the Group’s and Bank’s balance sheets as at October 31, 2007,the Group’s and Bank’s statements of income, changes in equity and cash flows for the year thenended, and a summary of significant accounting policies and other explanatory notes.

Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of the financial statementsin accordance with International Financial Reporting Standards and the Jamaican Companies Act.This responsibility includes: designing, implementing and maintaining internal controls relevant tothe preparation and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error; selecting and consistently applying appropriateaccounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ ResponsibilityOur responsibility is to express an opinion on the financial statements based on our audit. Weconducted our audit in accordance with International Standards on Auditing. Those standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance as to whether or not the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditors’ judgment,including the assessment of the risks of material misstatement of the financial statements, whetherdue to fraud or error. In making those risk assessments, the auditors consider internal controlsrelevant to the entity's preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity's internal controls. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by management, as well as evaluating the overall presentation of the financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

KPMG P.O. Box 76Chartered Accountants KingstonThe Victoria Mutual Building Jamaica6 Duke Street Telephone +1 (876) 922-6640Kingston Fax +1 (876) 922-7198Jamaica, W. I. +1 (876) 922-4500

e-Mail [email protected]

KPMG, a Jamaican partnership and a Raphael E. Gordon Linroy J. Marshallmember firm of KPMG network of Caryl A. Fenton R. Tarun Handa independent member firms affiliated with Elizabeth A. Jones Cynthia L. LawrenceKPMG International, a Swiss cooperative. Patrick A. Chin Rajan Trehan

Patricia O. Dailey-Smith Norman O. Rainford

150

To the Members ofTTHE BANK OF NOVA SCOTIA JAMAICA LIMITED

Report on the Financial Statements, cont’d

OpinionIn our opinion, the financial statements give a true and fair view of the financial positions of theGroup and the Bank as at October 31, 2007, and of the Group’s and the Bank’s financialperformance, changes in equity and cash flows for the year then ended in accordance withInternational Financial Reporting Standards, and comply with the provisions of the Companies Act.

Report on additional requirements of the Jamaican Companies Act

We have obtained all the information and explanations which, to the best of our knowledge andbelief, were necessary for the purposes of our audit. In our opinion, proper accounting recordshave been maintained, proper returns have been received for branches not visited by us and thefinancial statements are in agreement with the accounting records and returns, and give theinformation required by the Jamaican Companies Act in the manner required.

November 26, 2007

151

2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedStatement of Consolidated Revenue and ExpensesYear ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

152

2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedConsolidated Balance Sheet31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

153

2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedConsolidated Balance Sheet (continued)31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

151 to 227

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2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedStatement of Changes in Consoldiated Stockholders’ EquityYear ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

155

2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedStatement of Consolidated Cash FlowsYear ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedStatement of Consolidated Cash Flows (continued)Year ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedStatement of Revenue and ExpensesYear ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedBalance Sheet31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedBalance Sheet (continued)31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

151 to 227

2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedStatement of Changes in Stockholders’ EquityYear ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

160

Balance as at October 31, 2005

2007 ANNUAL REPORT

The Bank of Nova Scotia Jamaica LimitedStatement of Cash FlowsYear ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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The Bank of Nova Scotia Jamaica LimitedStatement of Cash Flows (continued)Year ended 31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

activities (page 161)

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The Bank of Nova Scotia Jamaica LimitedNotes to the Financial Statements31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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The Bank of Nova Scotia Jamaica LimitedNotes to the Financial Statements (continued)31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

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The Bank of Nova Scotia Jamaica LimitedNotes to the Financial Statements (continued)

31 October 2007(expressed in thousands of Jamaican dollars unless otherwise stated)

evaluating

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than

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impairment losses.

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(continued)

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Total liquidity gap

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-

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:

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2007 ANNUAL REPORTEconomic Review

228

Jamaica’s economic growth rate over the firstthree quarters of 2007 declined whencompared to the same period in 2006. RealGross Domestic Product (GDP) growth

decelerated to an estimated 0.5% year-over-year inthe third quarter following a 2.1% expansion in thefirst half of the year; in 2006, the economy grew by2.5%. The slowdown is a result of the passage ofHurricane Dean which negatively impacted both theagricultural and mining sectors. For the 2007calendar year, real GDP is estimated to grow by1.5%1, which again means that the Jamaicaneconomy would have failed to reach the targetted

growth rate of 3.0%.

Sector PerformanceThe growth engines of the economy for2007 have been the Finance andInsurance, Construction & Installation,and Distribution Sectors with creditablegrowth performance by Transport,Storage & Communication, Real Estate &Business Services and the ManufacturingSectors.

The Finance and Insurance sector, whichregistered growth of 4.0% at the end ofSeptember and which is projected togrow by 4.4%1 for the 2007 calendaryear, benefited from a 20% growth inloan portfolios as well as increases infee and commission incomes.

In the Construction & Installationindustry, the expansion in non-residential construction activities overthe period under review contributed tothe positive growth within the industry.Road rehabilitation programmes in thesecond and third quarters of the year aswell as ongoing work on the NorthCoast Highway generated much of theactivity recorded in this sector.However, the overall performance ofthe sector was somewhat constrained by lower levels of cement supply.

Increased loans and advances in the DistributiveTrade sector, as well as higher levels of imports duringthe months of January to June and a surge inremittances, contributed to the 3.0% growth withinthe sector.

The usually robust tourism industry suffered a 1%decline in GDP for the January - September 2007period, despite significant investments in roomexpansion over the previous two years. The reporteddecline in tourist arrivals over the period wasattributed to renewed competition as well as the newUS Government’s passport requirement, which hadthe effect of making vacation travel from our mainmarket less spontaneous.

Fiscal AccountsFor the period October 2006 – September 2007, thecountry operated a total fiscal deficit of $24.33billion, which was some $4.4 billion less thanbudgeted over the same period. An examination ofthe figures show that the reduction in deficit wasprimarily due to savings gained on capitalexpenditure and to a lesser extent, on domesticinterest payments and wages and salaries.

Foreign Exchange MarketFor the twelve months to October 2007, the Jamaicandollar experienced nominal depreciation ofapproximately 6.5% against the US dollar. However,the greatest nominal change occurred against theCanadian dollar, British pound and the euro wherethe dollar depreciated by 23.6%, 13.9% and 17.6%respectively, reflecting the weakening of the US dollaragainst the other major currencies over the period.The Bank of Jamaica’s recent interventions in themarket were aimed at maintaining stability, resultingin a 17% decline in Central Bank’s Net InternationalReserves.

InflationConsumer price inflation decelerated significantly in2006, recording a single digit rate of 5.8% year-over-year at end-2006, compared to 12.9% a year before.

1 PIOJ Estimate

2007 ANNUAL REPORT

229

This was the lowest registered rate of inflationfor over 20 years. However, inflation hasaccelerated in recent months on the back of theimpacts of Hurricane Dean and high global oiland food prices. The depreciation of theJamaican dollar - which is expected to continuethrough the balance of the year - will put furtherpressure on prices. Inflation will therefore likelyclose the year 2007 in the 9-10% year-over-yearrange.

In the first half of the year 2007, positiveeconomic indicators, excess liquidity in thesystem as well as the government’s commitmentto the medium-term fiscal targets allowed theCentral Bank to systematically reduce interestrates by approximately 50 basis points on alltenors of BOJ Certificates of Deposit. Foreignexchange instability in the latter half of theperiod, which was aggravated by excessliquidity, however forced the Central Bank tooffer JMD-denominated variable and fixed rateinstruments at attractive rates to the market.

OutlookThe economy will experience more favourablegrowth in 2008, expanding by close to 3%.Major tourism and mining related fixedinvestment will be the main growth engines,while rising levels of workers’ remittancessupport private consumption. Despite thechallenges to growth in the latter half of 2007,sound and strong fiscal management andrestricting the growth of the public debt stockare imperatives articulated by the newgovernment regime as international capitalmarkets and monitoring agencies demandgreater fiscal prudence. The Central Bank hasbeen responsive and successful in maintainingmonetary stability; it is expected that it willcontinue its efforts to maintain confidence in theJamaican financial markets in the near andmedium term.

2007 ANNUAL REPORTGlossary

230

ALLOWANCE FOR IMPAIRMENT LOSSES: An allowanceset aside which, in management’s opinion, is adequate toabsorb all credit-related losses. It is decreased by write-offs,realized losses and recoveries; and increased by newprovisions. It includes specific and general allowances, and isdeducted from the related asset category on the Group’sconsolidated balance sheet.

ASSETS UNDER ADMINISTRATION AND MANAGEMENT:The total market value of assets owned by customers, forwhom the Group and its subsidiaries provides custody,trustee, corporate administration, investment managementand advisory services, and are not reported on the Group’sconsolidated balance sheet.

ASSETS HELD IN TRUST: Consists of custodial and non-discretionary trust assets administered by the Group and itssubsidiaries, which are beneficially owned by customers andare therefore not reported on the Group’s consolidatedbalance sheet. Services provided in respect of these assets areadministrative in nature, such as security custody; trusteeship,stock transfer and personal trust services.

BOJ: The Bank of Jamaica, the regulator for CommercialBanks, Merchant Banks, and Building Societies in Jamaica.

BASIS POINT: A unit of measure defined as one-hundredthof one per cent; 100bp equals 1%.

CAPITAL: Consists of common shareholders’ equity. Capitalsupports asset growth, provides against loan losses andprotects the Group and its subsidiaries depositors.

FSC: The Financial Services Commission, the regulator forsecurities dealers, insurance companies, and pension funds inJamaica.

GENERAL PROVISIONS: Established against the loanportfolio in the Group and its subsidiaries whenmanagement’s assessment of economic trends suggests thatlosses may occur, but such losses cannot yet be specificallyidentified on an individual item-by-item basis.

IFRS: International Financial Reporting Standards issued bythe International Accounting Standards Board, the globalaccounting standards setting body, which have been adoptedby the Institute of Chartered Accountants of Jamaica.

NET INTEREST MARGIN: Net interest income, expressed asa percentage of average total assets.

NON-PERFORMING LOANS: Loans on which the Groupand its subsidiaries no longer have reasonable assurance asto the timely collection of interest and principal, or where acontractual payment is past due for a prescribed period.Interest is not accrued on non-performing loans.

PRODUCTIVITY RATIO: Measures the efficiency with whichthe Group and its subsidiaries incur expenses to generaterevenue. It expresses non-interest expenses as a percentageof the sum of net interest income and other income. A lowerratio indicates improved productivity.

REPOS: Repos is short for “obligations related to assets soldunder repurchase agreements” – a short-term transactionwhere the Group and its subsidiaries sells assets, normallygovernment bonds, to a client and simultaneously agrees torepurchase them on a specified date and at a specified price.It is a form of short-term funding.

RETURN ON EQUITY: Net income available to commonshareholders, expressed as a percentage of average commonshareholders’ equity.

REVERSE REPOS: Short for “assets purchased under resaleagreements” – a short-term transaction where the Group andits subsidiaries purchase assets, normally government bonds,from a client and simultaneously agrees to resell them on aspecified date and at a specified price. It is a form of short-term collateralized lending.

RISK-WEIGHTED ASSETS: Calculated using weights basedon the degree of credit risk for each class of counterparty. Off-balance sheet instruments are converted to balance sheetequivalents, using specified conversion factors, before theappropriate risk weights are applied.

STANDBY LETTERS OF CREDIT AND LETTERS OFGUARANTEE: Assurances given by the Group and itssubsidiaries that it will make payments on behalf of clients tothird parties in the event that the customer defaults. TheGroup and its subsidiaries have recourse against its customersfor any such advanced funds.

STRESS TESTING: A scenario that measures market riskunder unlikely but plausible events in abnormal markets.

2007 ANNUAL REPORT

231

TIER 1, TIER 2 CAPITAL RATIOS: These are ratios of capitalto risk-weighted assets, as stipulated by the Bank of Jamaicaand the Financial Services Commission, based on guidelinesdeveloped under the auspices of the Bank for InternationalSettlements (BIS). Tier 1 capital is more permanent and basedon the regulator. It is defined as follows:

(a) For entities regulated by the BOJ: Tier 1 capital consists primarily of common shareholders’ equity,and certain designated retained earnings which bystatute may not be distributed or reduced withoutpermission from the Bank of Jamaica.

(b) For entities regulated by the FSC: Tier 1 capitalconsists primarily of common shareholders’ equity andcertain reserves designated by the Commission suchas retained earnings and investment reserves. Deductions may also be applied for net investments in associates/subsidiaries, goodwill and other intangibles assets, among other things.

Tier 2 capital consists mainly of eligible general allowances.Together, Tier 1 and Tier 2 capital less certain deductionscomprise total regulatory capital.

YIELD CURVE: A graph showing the term structure of interestrates, plotting the yields of similar quality bonds by term tomaturity.

2007 ANNUAL REPORT

Subsidiaries, Board Members and Senior Officers

THE BANK OF NOVA SCOTIA JAMAICALIMITED

Head Office, Scotiabank CentreCnr. Duke & Port Royal StreetsP.O. Box 709 Kingston, Jamaica

Board of DirectorsR. H. Pitfield - ChairmanHon. M. M. Matalon, OJ

- Deputy ChairmanA. V. ChangProf. C. D. C. Christie SamuelsHon. W. E. Clarke, OJ, CDDr. J. A. Dixon, CDMiss M. M. Issa C. H. JohnstonJ. M. MatalonHon. W. A. McConnell, OJW. A. McDonald Dr. H. J. Thompson, CDProf. S. C. VasciannieR. E. WaughMiss S. A. Wright

SCOTIA JAMAICA INVESTMENT MANAGEMENT LIMITED

4th Floor, Scotiabank CentreCnr. Duke & Port Royal StreetsP.O. Box 627 Kingston, Jamaica

Board of DirectorsHon. W. A. McConnell, OJ - ChairmanHon. W. E. Clarke, OJ , CD C. H. JohnstonW. A. McDonald R. U. PatrickH. W. PowellMrs. A. M. Tugwell HenryProf. S. C. VasciannieMiss S. A. Wright

SCOTIA JAMAICA LIFE INSURANCE COMPANY LIMITED

5th Floor, Scotiabank CentreCnr. Duke & Port Royal StreetsKingston, Jamaica

Board of DirectorsMiss M. M. Issa - ChairpersonA. V. Chang Hon. W. E. Clarke, OJ, CDProf. C. D. C. Christie SamuelsMs. E. LeungH. W. PowellH. A. ReidDr. A. E. SamuelsP. B. ScottProf. S. C. VasciannieMiss S. A. Wright

Senior OfficersMrs. J. T. SharpVice President & General Manager

Mrs. M. AnthonySenior Manager, Finance & Investments

Ms. L. S. HeslopManager, Operations & Customer Service

THE SCOTIA JAMAICA BUILDINGSOCIETY

95 Harbour StreetP.O. Box 8463Kingston, Jamaica

Board of DirectorsDr. J. A. Dixon, CD - ChairpersonDr. H. J. Thompson - Deputy Chairman Ms. B. AlexanderDr. C. D. ArcherHon. W. E. Clarke, OJ, CD Miss M. M. Issa H. W. PowellMiss J. A. ThompsonMiss S. A. Wright

Senior OfficersG. F. WhitelockeVice President & General Manager

Mrs. M. D. ScottManager, Finance & Operations

P. F. WilliamsManager, Mortgage Services

SCOTIA JAMAICA FINANCIAL SERVICES LIMITED

Scotiabank CentreCnr. Duke & Port Royal StreetsP.O. Box 709Kingston, Jamaica

Board of DirectorsHon. W. E. Clarke, OJ , CD - Chairman H. W. PowellMrs. A. M. Tugwell HenryMiss S. A. Wright

SCOTIABANK JAMAICA FOUNDATION


Board of DirectorsDr. J. A. Dixon - ChairpersonHon. W. E. Clarke, OJ , CD - Deputy ChairmanMrs. J. A. Griffiths IrvingM. JonesMrs. R. A. PillinerH. W. PowellMrs. R. VoordouwMiss S. A. Wright

Senior OfficerMrs. J. A. Griffiths IrvingExecutive Director

SCOTIA JAMAICA GENERAL INSURANCEBROKERS LIMITED

5th Floor, Scotiabank CentreCnr. Duke & Port Royal StreetsKingston, Jamaica

Board of DirectorsHon. W. E. Clarke, OJ , CD - Chairman Mrs. R. A. PillinerH. W. Powell

BRIGHTON HOLDINGS LIMITED

Scotiabank CentreCnr. Duke & Port Royal StreetsKingston, Jamaica

Board of DirectorsHon. W.E. Clarke, OJ , CD - ChairmanE. H. AndersonH. W. PowellMiss S. A. Wright

DEHRING BUNTING & GOLDINGLIMITED

Head Office, 7 Holborn RoadKingston 10, Jamaica

Board of DirectorsProf. S. C. Vasciannie, ChairmanMs. B. A. AlexanderA. V. ChangHon. W. E. Clarke, OJ, CD Mrs. A. M. FowlerMiss M. M. IssaDr. Anna LawMr. P. P. MartinMiss A. M. SchnoorMr. J. A. WoodwardMiss S. A. Wright

Senior OfficersMiss A. SchnoorChief Executive Officer

Miss A. TinkerVice President & Chief Financial Officer

DB&G UNIT TRUSTS MANAGERSLIMITED

1B Holborn Road, Kingston 10, Jamaica

Board of DirectorsMr. J. Muirhead, ChairmanMs. B. A. AlexanderDr. J. A. DixonMiss M. M. IssaMiss A. M. SchnoorMrs. J. T. Sharp

Senior OfficersB. O. FrazerAssistant Vice President, Pensionsand General Manager

DB&G MERCHANT BANK LIMITED

1B Holborn Road, Kingston 10, Jamaica

Board of DirectorsMr. A. V. ChangMr. C. H. JohnstonMiss A. SchnoorMr. P. ScottMrs. J. A. Thompson-JamesMiss S. A. Wright

Senior OfficersMs. T. HoshueGeneral Manager

Ms. C. BudhlallSenior Manager, Finance

WHOLLY-OWNED SUBSIDIARIES AND SCOTIABANK JAMAICA FOUNDATION

232

2007 ANNUAL REPORT

233

AUDITORS

KPMG6 Duke StreetKingston, Jamaica

Telephone: (876) 922.6640Fax: (876) 922.7198

922.4500

REGISTERED OFFICE


Telephone: (876) 922.1000Fax: (876) 922.6548Website: www.jamaica.scotiabank.comTelex: 2297SWIFT Bic Code: NOSCJMKN

REGISTRAR & TRANSFER AGENT

Scotia Jamaica Investment Management LimitedScotiabank CentreCnr. Duke & Port Royal StreetsP.O. Box 627Kingston, Jamaica

Telephone: (876) 922.1810Fax: (876) 922.3378

SECRETARY

David A. NoëlSenior Vice President/Senior Legal Counsel& Corporate Secretary

The Bank of Nova Scotia Jamaica LimitedExecutive OfficesScotiabank CentreCnr. Duke & Port Royal StreetsP.O. Box 709Kingston, Jamaica

2007 ANNUAL REPORTSenior Management Officers

234

EXECUTIVE OFFICERS


Miss Stacie Ann WrightExecutive Vice President & Chief Financial Officer

Mrs. Rosemarie A. PillinerExecutive Vice President Operations

H. Wayne PowellExecutive Vice President Branch Banking

Michael D. JonesSenior Vice President Human Resources

David A. NoëlSenior Vice President Senior Legal Counsel & Corporate Secretary

Miss Anya M. SchnoorSenior Vice President, Wealth Management

Mrs. Audrey M. Tugwell HenrySenior Vice PresidentRetail & Electronic Banking

Miss Maya WalrondSenior Vice PresidentCustomer Experience,Technology Innovation& Projects

SENIOR MANAGEMENT OFFICERS

AuditMiss Yvonne M. Pandohie Vice President & Chief Auditor

Corporate & Commercial Banking Centre Wayne P. HewittVice President Corporate & Commercial Banking

Miss Marcette McLeggonAssistant General Manager, Credit Solutions

Credit Risk ManagementRonald BourdeauVice President, Risk Management

Bevan A. Callam Vice PresidentCredit Risk Management

District Vice Presidents

Dudley E. Walters

Roger R. Cogle

Michael A. Thompson

Employee Consultations & Ombuds Services Mrs. Rosemarie A. VoordouwDirector

2007 ANNUAL REPORT

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38

FinanceMiss Shirley K. Ramsaran Assistant General Manager Finance & Comptroller

Hugh G. MillerAssistant General Manager Treasury & Foreign Exchange

Frederick A. WilliamsAssistant General Manager Market and Operational Risk

Information Systems CentreMiss Sharon A. Colquhoun Director

Legal & ComplianceMiss Keri-Gaye Brown Legal Counsel & Assistant Secretary

MarketingMrs. Heather D. M. GoldsonVice President

Operations and Shared ServicesMrs. Suzette A. M. McLeodVice President, Shared Services

David M. WilliamsAssistant General Manager Operations & Sales Support

Public, Corporate & Government Affairs

Mrs. Joylene A. Griffiths IrvingDirector& Executive DirectorScotiabank Jamaica Foundation

Retail & Electronic Banking

Mrs. Maroya E. Villafana Sylvester Director Electronic Banking Products & Solutions

Scotia Private Client Group

Miss Bridget A. LewisGeneral Manager

Small & Medium Enterprises

Mrs. Patsy Latchman Atterbury Vice President

SUBSIDIARIES

The Bank of Nova Scotia Jamaica Limited



Gladstone Whitelocke Vice President & General Manager


Mrs. Jacqueline Sharp Vice President & General Manager

Dehring Bunting & Golding

Miss Anya M. SchnoorChief Executive Officer

2007 ANNUAL REPORT

Branches & Team Leaders

236

BLACK RIVER6 High StreetP. O. Box 27Black RiverSt. Elizabeth

R. R. Reid, Manager

BROWN’S TOWNMain StreetP. O. Box 35Brown’s Town St. Ann

Mrs. D. A. Maxwell, Manager

CHRISTIANAMain StreetP. O. Box 11Christiana, Manchester

Mrs. J. D. Billings-Frith, Manager

CORPORATE & COMMERCIAL BANKING CENTREMiss D. R. Coubry, Snr. Relationship ManagerMiss A. C. Leonce, Snr. Relationship ManagerMiss M. A. Flake, Snr. Relationship ManagerMiss T. M. Palmer, Snr. Manager, H. C. Mair, Snr. Relationship ManagerMrs. D. A. Mighty, Relationship ManagerH. D. Stephens, Relationship ManagerMiss T. E. Budoo, Relationship ManagerH. P. Ebanks, Relationship ManagerMrs. A. M. Buckley, Relationship ManagerM. G. Verley, Relationship Manager

CROSS ROADS86 Slipe RoadP. O. Box 2Kingston 5

J. A. Clarke, Manager

FALMOUTHTrelawny WharfP. O. Box 27Falmouth,Trelawny

F. O. Wright, Manager

HAGLEY PARK ROAD128 Hagley Park RoadP. O. Box 5Kingston 11

Miss V. I. Omess, Manager

Mrs. Y. T. Leslie, Asst. Manager

HALF-WAY-TREE80 Half-Way-Tree RoadP. O. Box 5Kingston 10

Mrs K. A. Tomlinson, Manager

Mrs G. Morrison, Asst. Manager, Commercial Credit

Mrs. D. M. Lounges, Asst. Manager, Operations & Service

Miss D. A. Hyman, Account Manager,

H. Lewis, Asst Manager, Personal Banking

HIGHGATEMain StreetP. O. Box 9HighgateSt. Mary

Mrs. M. V. Davidson, Manager

IRONSHORE SERVICE CENTREShops 2 & 3, Golden Triangle Shopping CentreIronshoreMontego Bay

Miss D. M. Mortimer, Manager

JUNCTIONJunction P. O.St. Elizabeth

Mrs. C. A. Sanderson, Manager

KING STREET35-45 King StreetP. O. Box 511, Kingston

T. V. Allen, Manager

Mrs. W. D. O’Connor, Asst. Manager, Commercial Credit

Mrs. L. D. Stewart, Asst. Manager, Operations

V. P. Dunkley, Asst. Manager, Personal Banking

LIGUANEA125-127 Old Hope RoadP. O. Box 45Kingston 6

S. A. Distant, Manager

LINSTEAD42 King StreetP. O. Box 19Linstead St. Catherine

Mrs L. A. Hemmings, Manager

Mrs. M. T. ‘Fay’ White, Asst. Manager

LUCEAWillie Delisser BoulevardP. O. Box 63Lucea Hanover

C. A. Dawes, Manager

MANDEVILLE 1A Caledonia RoadP. O. Box 106Mandeville, Manchester

A. C. Bright, Manager

Miss A. E. Senior, Asst. Manager, Commercial Credit

C. Barnett, Manager, Personal Banking

Mrs. L. M. Vickers, Asst. Manager, Operations & Service

MAY PEN36 Main StreetP.O. Box 32May Pen Clarendon

J. J. Smalling, Manager

MONTEGO BAY 6-7 Sam Sharpe SquareP.O. Box 311 Montego BaySt. James

L. M. Reynolds, Manager

E. Blake, Asst. Manager

Mrs. A. E. Bell-Grant, Account Manager

Mrs. A. M. Walters, Asst. Manager, Operations

D. Bryan, Asst. Manager, Personal Banking

MORANT BAY23 Queen StreetP. O. Box 30 Morant Bay St. Thomas

C. A. Wright, Manager

1143

2007 ANNUAL REPORT

237

44

NNEGRILNegril Square Negril P. O. Westmoreland

G. E. Gray, Manager

NEW KINGSTON2 Knutsford BoulevardP. O. Box 307Kingston 5

C.A. Sylvester, Manager

G. A. Hogarth, Asst. Manager

A. O. Harvey, Asst. Manager, Personal Banking

Mrs. M.A. Meek-Davis. Asst. Manager, Operations

OCHO RIOSMain StreetP. O. Box 150Ocho RiosSt. Ann

Mrs K. N. Chang, Manager

L. S. Estick, Asst. Manager

OLD HARBOUR4 South StreetP. O. Box 43Old HarbourSt. Catherine

Mrs. A. Y. Howard, Manager

OXFORD ROAD6 Oxford RoadP. O. Box 109Kingston 5

Miss. J. A. Sutherland, Manager

PORT ANTONIO3 Harbour StreetP. O. Box 79Port Antonio Portland

A. R. Jervis, Manager

PORT MARIA 57 Warner StreetP. O. Box 6Port MariaSt. Mary

Mrs. O. A. Whittaker, Manager

PORTMORELot 2 Cookson Pen, Bushy Park P.O. Box 14.Greater Portmore,St Catherine.

A. D. Johnson, Manager

PREMIER 10 Constant Spring RoadP. O. Box 509Kingston 10

S. H. Thompson, Manager

ST. ANN’S BAY18 Bravo StreetP. O. Box 2St. Ann's Bay St. Ann

Mrs. N. F. Haughton, Manager

SANTA CRUZ77 Main StreetP. O. Box 20Santa CruzSt. Elizabeth

D. A. James, Manager

SAVANNA-LA-MAR19 Great George’s StreetP.O. Box 14Savanna-La-MarWestmoreland

M. E. Shaw, Manager

Mrs M. A. Senior-White, Asst. Manager

SCOTIABANK CENTRECnr. Duke & Port Royal StreetsP. O. Box 59Kingston

D. A. Hanson, Manager

T. C. James, Asst. Manager

Mrs. K. Y. HoSang-Bancroft, Operations Manager

SPANISH TOWNShops 25 & 26Oasis Shopping Plaza6 March Pen Road.Spanish Town

Mrs J. J. Carter-James, Manager

Mrs. I. C. Tucker, Asst. Manager

UWI, MONA CAMPUSCnr. Ring Road & Shed LaneKingston 7

Miss P. N. Buchanan, Manager

VICTORIA & BLAKE29 Victoria AvenueP.O. Box 625Kingston

C. C. Wiggan, Manager

WESTGATEWestgate Shopping CentreP.O. Box 11Montego BaySt. James

G.C. Graham, Acting Manager

SUB-BRANCHES

BARNETT STREET (Sub to Montego Bay)51 Barnett StreetMontego BaySt. James

CLAREMONT(Sub to St. Ann’s Bay)Claremont P.O.Claremont St. Ann

FRANKFIELD (Sub to Christiana)FrankfieldClarendon

PARK CRESCENT (Sub to Mandeville)17 Park CrescentMandevilleManchester

2007 ANNUAL REPORTNotes

238

2007 ANNUAL REPORT

239

Proxy Form

I/We......................................................................................................................................................................................of..........................................................................................................................................................................................in the parish of ...........................................................being a Member of the above Company, hereby appointthe Chairman of the Meeting or failing him (see Note 1)....................................................................................................................................................................................................................................................................................of...................................................................................................................................................................or failingthem.................................................................................................................................................................................of............................................................................................................................................as my/our Proxy to vote forme/us on my/our behalf at the Annual General Meeting of the Company to be held on the 15th day ofFebruary 2008 and at any adjournment thereof.

Please indicate by inserting a cross in the appropriate square how you wish your votes to be cast. Unlessotherwise instructed, the Proxy will vote or abstain from voting, at his discretion.

....................................................................................Signature

RESOLUTION

NO. 1

NO. 2

NO. 3 (a)

NO. 3 (b)

NO. 3 (c)

NO. 3 (d)

NO. 3 (e)

NO. 3 (f)

NO. 3 (g)

NO. 3 (h)

NO. 3 (i)

NO. 3 (j)

NO. 3 (k)

NO. 3 (l)

NO. 3 (m)

NO. 3 (n)

NO. 3 (o)

NO. 3 (p)

NO. 3 (q)

NO. 4

FOR AGAINST

As witness my hand this...............................................................................................................day

of....................................................................................................................................................200..................

2007 ANNUAL REPORTProxy Form (continued)

1. If you wish to appoint a proxy other than the Chairman of the Meeting, please insert the person’s name and address and delete (initialing the deletion) "the Chairman of the Meeting".

2. To be valid, this form of proxy and the power of attorney or other authority (if any) under whichit is signed must be lodged at the office of the Secretary of the Company, 9th Floor, ScotiabankCentre, Cnr. Duke & Port Royal Streets, Kingston, at least 48 hours before the time appointed forthe holding of the meeting.

3. To this form must be affixed a $100.00 stamp in payment of stamp duty.

4. In the case of joint shareholders, the vote of the senior who tenders a vote, whether in person orby proxy, shall be accepted to the exclusion of the vote(s) of the other joint holder(s) and for thispurpose seniority shall be determined by the order in which the names stand in the register ofmembers.

5. To be effective, this form of proxy must be signed by the appointer or his attorney, duly authorisedin writing or, if the appointer is a corporation, must be under its common seal or be signed bysome officer or attorney duly authorised in that behalf.

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2007 ANNUAL REPORT

Photography: Peter Ferguson Franz MarzoucaLennox Quallo

Design & Production: Marketing Department The Bank of Nova Scotia Jamaica Limited

Colour Separations: Tropicolour Limited

Printing: Lithographic Printers Limited

Group

Scotia Group Jamaica Limitedwww.jamaica.scotiabank.com

1-888-4-SCOTIA

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