2014 ANNUAL REPORT 1 BANK OF NINGBO Co.,Ltd 2 2014 ANNUAL REPORT 3 BANK OF NINGBO Co.,Ltd 1 Chapter One Important Notes The Board of Directors, Board of Supervisors, directors, supervisors and senior managers of the Company ensure the authenticity, accuracy and completeness of contents, and guarantee no fraulds, misleading statements or major omissions in this report. They are willing to burden any individual and joint legal responsibilities. All the directors, supervisors and senior managers are able to guarantee the authenticity, accuracy and completeness of this report without any objection. The 6th meeting of the 5th Board of Directors of the company approval the text and abstract of 2014 Annual Report on 24 April 2015. 15 out of 17 directors were present. Director Li Hanqiong authorize director Chen Guanghua to vote. Director Ben Shenglin authorize director Zhu Jiandi to vote. Part of supervisors attended this meeting as well. The Company's profit distribution plan was passed by the Board of Directors as follows: taking the total share capital on 31 Dec. 2014 as the base number, cash bonus of RMB 4.5 yuan (including tax) per 10 shares was distributed to all shareholders, and 2 shares for every 10 shares were given by converting capital reserve into share capital. This plan will be submitted to 2014 general meeting of stockholders for further approval. The Chairman of the board Mr. Lu Huayu, the president Mr. Luo Mengbo, the vice president Mr. Luo Weikai, who is in charge of accounting, and the general manager of accounting department Ms. Sun Hongbo hereby declare to pledge the authenticity, accuracy and completeness of financial statements in the annual report. Financial data and indicators included in this annual report are following the criterias of the Chinese Accounting Standard for Business Enterprises. All data in the consolidated financial statements of Bank of Ningbo Co., Ltd. and its subsidiary Yongying Fund Management Co., Ltd. is subject to the unit of RMB except for further explanation. Ernst & Young Hua Ming LLP audited the 2014 Financial Statements of the Company in accordance with domestic accounting principles and signed off longtop's financial statements. The forward-looking statements in this annual report including future plans are not commitments to investors. Thus please pay attention to investment risks. Major risks The company has described major risks and will adopt the measures to control risks. For details, please refer to relevant contents about risk management in Sectoion Six Report of the Board of Directors. 2014 ANNUAL REPORT 2 Contents Chapter One Important Notes ----------------------------------------------------- 001 Chapter Two Company Profile ---------------------------------------------------- 003 Chapter Three Highlights of Accounting Data and Financial Indicators ----- 008 Chapter Four Chairman's Statement --------------------------------------------- 013 Chapter Five President's Statement --------------------------------------------- 015 Chapter Six Report of the Board of Directors ------------------------------ 017 Chapter Seven Important Matters -------------------------------------------------- 085 Chapter Eight Changes in Share Capital and Shareholding --------------- 099 Chapter Nine Directors, Supervisors, Senior Manager and Basic Information on Employees --------------------------------------- 111 Chapter Ten Corporate Governance -------------------------------------------- 131 Chapter Eleven Internal Control ------------------------------------------------------ 142 Chapter Twelve Financial Statements ---------------------------------------------- 154 Chapter Thirteen Catalogue ------------------------------------------------------------- 155 Chapter Fourteen Audited Financial Statement ------------------------------------ 156 BANK OF NINGBO Co.,Ltd 3 Chapter Two Company Profile I. Company Information Abbreviation of Stock Bank of Ningbo Stock Code 002142 Stock Exchange Listed Shenzhen Stock Exchange Chinese Name 宁波银行股份有限公司 Chinese Abbreviation 宁波银行 English Name Bank of Ningbo Co., Ltd English Abbreviation Bank of Ningbo Legal Representative Lu Huayu No.700, South Ningnan Road, Yinzhou District, Ningbo Registered Address City, Zhejiang Province, China Post Code of Registered Address 315100 No.700, South Ningnan Road, Yinzhou District, Ningbo Office Address City, Zhejiang Province, China Post Code of Office Address 315100 Website WWW.NBCB.COM.CN E-mail [email protected] II. Contact Secretary of the Board of Directors Securities Affairs Representative Name Yang Chen Chen Junfeng No.700, South Ningnan Road, Yinzhou No.700, South Ningnan Road, Yinzhou Address District, Ningbo City, Zhejiang Province District, Ningbo City, Zhejiang Province Telephone 0574-87050028 0574-87050028 Fax 0574-87050027 0574-87050027 E-mail [email protected] [email protected] 2014 ANNUAL REPORT 4 Chapter Two Company Profile（continued） III. Information Disclosure and Place of Maintenance Newspaper Nominated by the Company for China Securities Journal, Shanghai Securities information disclosure News, Securities Times and Securities Daily Website Nominated by China Securities Regulatory Commission (CSRC) for Anuual http://www.cninfo.com.cn Report Publishment Office of the Board of Directors of Bank of Place for Maintenance of the Annual Report Ningbo Co., Ltd. IV. Registration Changes Registration No. of Registration Registration Business License Organization Tax Registration No. Date Place of Enterprise as Code Legal Person Ningbo G.S.Y.Z.NO. Administrative Initial April 10th, No. 330201711192037, Bureau for 71119203-7 Registration 1997 330200400003994 S.Y.D.Z. NO. Industry and 330204711192037 Commerce Changes of Main Business None After Listing Changes of Controlling Shareholders None in the Past V. Other Information (I) Accounting firm appointed by the company Name of Accounting Airm Ernst & Young Hua Ming LLP (Limited Liability Parternership ) Office Address of the Floor 50 of Shanghai World Financial Center, No.100, Century Accounting Firm Avenue, Shanghai City Signed Accountants Guo Hangxiang, Chen Sheng BANK OF NINGBO Co.,Ltd 5 Chapter Two Company Profile（continued） (II) Sponsor Institution Engaged for Continuous Supervision during the Reporting Period Office Address of the Sponsor Period of Continuous Sponsor Institution Sponsor Institution Representative Supervision CITIC Securities Mansion, No.48, Liangmaqiao Road, Chaoyang District, From Oct.9, 2014 to the Beijing CITIC Securities Jiang Yin, Qiu Zhiqian end of 2015 accounting CITIC Securities year Mansion, No.8, Central 3rd Road, Futian District, Shenzhen City, Guangdong Province (III) During the reporting period, there is no need for the Company to engage a financial consultant to perform the duty of continuous supervision. VI. Development Vision, Enterprise Culture and Investment Value (I) Development Vision: to develop as a respected modern commercial bank with a good reputation and core competitiveness (II) Enterprise Culture: honesty and professionalism, compliance and efficiency, integration and innovation (III) Investment Value: 1. Adhere to the entry principle of "knowing the market and understanding the customers", insist on creating eight profit centers, namely Cooperate Banking, Retail Banking, Personal Banking, Financial Market, Credit Card Center, Bill Business, Investment Banking, Asset Custody, etc., so as to form a diversified profit growth mode. 2. Adhere to the development strategy of "joint development of regional markets", continue to promote unified actions between the head office、branches and sub-branches, comprehensively design business procedures, and continuously enhance execution construction. The scale and profit of branches have exceeded fifty percent, of the whole company, the scale and profit of Personal Banking and Retail Company in Ningbo are increased to 50% as well. 2014 ANNUAL REPORT 6 Chapter Two Company Profile（continued） 3. Follow business aim of "being well-matched, serving small and medium-sized enterprises", offer specialized financing service to customers; since the smooth running of Maxwealth Fund Management Co., Ltd. which is dominated by the Company, Maxwealth Financial Leasing Co., Ltd., as company's wholly-owned subsidiary, is authorized. The means of services become more flexible, while the range is widen. 4. Abide by the concept "reducing cost by controlling risk", build a full-process risk management mode and a vertical independent credit approval system, strictly implement the five mechanisms for prevention and continue to optimize compliance management, so as to keep asset quality at a good level and to prevent various risks effectively. VII. Major Awards and Rankings in 2014 (I) In January, 2014, "Best Small and Medium-Sized Commercial Bank" on the 2nd "Leading China" Summit Forum of innovation and development in financial industry, which was jointly hold by JRJ. com and PBC School of Finance in the Tsinghua University; (II) In May, 2014, "2013 Best Small and Medium-Sized Corporate" in the 1st competition of listed companies, organized by Sina Finance; (III) In May, 2014, special award of the 3rd Ningbo "Top Ten Donation Enterprises" issued by the Ningbo Charity Federation; (IV) In June, the third place of "2013 Scientific and Technological Development Award" offered by the Head Office of the People's Bank of China in the platform of company's medium and small-sized enterprise online financing business project; (V) In July, 2014, "2013 Best Jin Niu Investor Award" by China Securities Journal;