We Help People and Businesses Achieve

Nations Trust Bank PLC Annual Report 2014 We help people and businesses achieve Nations Trust Bank Annual Report 2014 View the Annual Report online www.nationstrust.com/investor_relations/index We help people and businesses achieve Whoever you are, wherever you live, Nations Trust offers you all the financial services and solutions you want, in one place. We’re focusing on easy to use financial products, supported by the streamlined branch and online access, faster services and dependable technology that together move us closer to our goal of becoming the Primary Bank for customers everywhere. At Nations Trust, we deliver much more value with much less fuss. We’re making it easy for people to realise their dreams, by helping them achieve today’s goals and tomorrow’s aspirations. Contents About Us 3 Board Integrated Risk Management About this Report 6 Committee Report 140 Performance Highlights 8 Board Credit Committee Report 141 Financial and Operational Highlights 11 Board Supervisory Committee Report 142 Engaging Stakeholders 13 Board Nomination Committee Report 143 Identifying the Material Issues 16 Human Resources and Remuneration Committee Report 144 Chairman’s Review 18 Annual Report of the Board of Directors Chief Executive Officer’s Review 22 on the Affairs of the Bank 145 Management Discussion and Analysis 28 Directors’ Statement on Internal Control Our Profile 28 Over Financial Reporting 153 Financial Review 34 Auditors’ Report on Internal Control over Operational Review 39 Financial Reporting 155 Retail, SME and Consumer Banking 40 Board Audit Review Committee Report 156 Leasing 50 Directors’ Responsibility for Corporate Banking 52 Financial Reporting 158 Treasury 56 Independent Auditors’ Report 159 Social and Environmental Report 60 Our Customers 61 Financial Statements Employees 62 Statement of Financial Position 162 Community Engagement 70 Statement of Profit or Loss 163 Environment 73 Statement of Other Comprehensive Income 164 Risk Management 74 Statement of Changes in Equity 165 Board of Directors 90 Statement of Cash Flows 166 Corporate Management 96 Notes to the Financial Statements 167 Senior Management 98 Details of Freehold Land and Building 251 Investor Information 104 Corporate Governance 108 Service Network 252 GRI Index 137 Glossary 255 Notice of Meeting 262 Form of Proxy 263 18 22 28 108 162 Chairman’s Chief Executive Management Corporate Financial Review Officer’s Review Discussion and Governance Statements Analysis Nations Trust Bank PLC 2 About Us Nations Trust Bank is one of the fastest growing banks in Sri Lanka today. Our portfolio of financial products and services caters to the varying requirements of individual, corporate and institutional clients. As a young and dynamic bank, Nations Trust Bank has immediate appeal for young and sophisticated professionals looking for a bank they can identify with. We have 89 branches, 124 ATMs, 52 leasing centres, internet banking, sms banking and mobile banking facilities. As a truly customer-centric financial institution, Nations Trust Bank provides tailored service for contemporary lifestyles. Our branches are open for extended hours, unlike most other banks in Sri Lanka which keep to traditional banking hours. We offer a wide range of great value financial products, from tailor-made treasury products to retail products, from leasing to American Express credit cards. These have ensured the rapid growth of Nations Trust Bank while maintaining market stability. Our Vision We help people and businesses achieve today’s goals and tomorrow’s aspirations Our Mission We will work SMART to become the most respected financial services provider Our Values Agile Proactive Excellence Winning together Trust 3 Annual Report 2014 Today’s goals, Tomorrow’s aspirations We have focused on a multi-channel approach, with increased investments in self-service banking as well as internet and mobile applications. Dependable technology... Internet SMS Mobile banking banking banking Nations Trust Bank PLC 4 Nations Trust Bank 4 Go to www.ntb.com/brandpromise for more We are determined to put the customer at the heart of the banking experience, and consistently strive to engage with and understand the needs of our customers. Strong brand promise... Unparalleled Life cycle Operational Transactional State-of-the- customer products and excellence excellence art delivery experience services World-class product portfolio... Treasury Personal Banking Savings Loans American Express Investment Private Banking Investments Leasing Mastercard Banking Inner Circle Fixed Deposits Hire Purchase Nations EmPower Factoring Current Accounts 5 Annual Report 2014 5 Annual Report 2014 Welcome to Our First Integrated Report In preparing our first integrated report we have sought to tell the story of the year ended 31st December 2014 in a comprehensive and concise manner. We have changed the way we present our Annual Report and Accounts so we can describe strategic information and our business model in a way that we believe is easier to understand. This information is set out in our Management Discussion and Analysis, with more detailed information, where relevant, included in Financial Statements. In preparing our first integrated report we have sought to tell the The report is based on the Integrated Reporting Framework story of the year ended 31st December 2014 in a comprehensive issued by the International Integrated Reporting Council and and concise manner. uses the G4 Standards for Sustainability Reporting published by the Global Reporting Initiative which we have adopted on We have changed the way we present our Annual Report and a voluntary basis in keeping with international best practice. Accounts so we can describe strategic information and our The financial statements have been prepared based on Sri Lanka business model in a way that we believe is easier to understand. Financial Reporting Standards as required by the Sri Lanka This information is set out in our Management Discussion Accounting & Auditing Standards Act No. 15 on 1995 and the and Analysis, with more detailed information, where relevant, Banking Act Direction No. It also conforms to the requirements included in Financial Statements. We use a number of technical of the Companies Act No.7 of 2007 and the Continuing Listing terms and abbreviations within this document. In the interest Requirements of the Colombo Stock Exchange. We continue to of saving paper, we do not define terms or provide explanations monitor developments in corporate reporting in local and the every time they are used; please refer to the glossary on pages international context to ensure that our reports are in par with 255 to 261 for this information. best practice. We seek to present a balanced review of how we created value for The focus of the report is to provide relevant financial and non- our stakeholders during this period. Any material events after financial information on material developments and issues to the this date and up to the sign off of Board of Directors on page 250 principle stakeholders, the capital providers to represent fairly 2015 have also been included. the events that shaped our performance during the reporting Nations Trust Bank PLC 6 We use a number of technical terms and abbreviations within this document. In the interest of saving paper, we do not define terms or provide explanations every time they are used; please refer to the glossary on pages 255 to 261 for this information. period and are likely to impact our future performance. In Messrs Ernst & Young have provided independent external identifying the reporting events the materiality principle was assurance on the financial report, the Director’s statement on applied. We consider any event or development that affects our Internal Control and have provided independent assurance to the ability to create value to the stakeholders over short, medium Central Bank on compliance with the Banking Act Direction No.11 and long term as material for reporting. Material aspects of 2007 and subsequent amendments on Corporate Governance and boundaries are defined in accordance with the GRI G4 for Licensed Commercial Banks in Sri Lanka. standards with reference to the responses from our stakeholder This report also contains forward looking statements which we engagement processes. believe to be correct at the time of sign off and may be based Our ability to create value depends on different resources, on assumptions and estimates. These statements are not commonly known as capitals- Financial capital, Human guarantees of the Bank’s future operating or financial results or capital, Manufactured capital, Social and Relationship capital, performance which may differ materially due to events that may Natural capital. This report aims to provide an insight into our occur or trends that become apparent after the sign off date. performance in relation to how we used these capitals and how our operations affected these capitals. Cross-referencing tools For the latest financial information, refer to our Indicates that additional information investor relations page is available online. www.nationstrust.com/investor_relations/index Forward looking statements Furthermore, we have enhanced our reporting of future plans and outlook therefore this report contains many forward looking statements. In most cases these will be indicated by the use of words such as ‘target’, ‘believe’, ‘expect’, ‘may’, ‘anticipate’, ‘plan’, ‘will’, ‘strategy’, ‘prospect’, ‘foresee’, ‘possibility’, ‘estimate’, ‘project’, ‘can’, ‘intend’, and others

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