Scotiabank - 40-F annual report

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

Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). If “Yes” is marked, indicate the filing number assigned to the Registrant in connection with such Rule.

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

Management’s responsibility for financial information contained in the Annual Report is described on page 92 of Exhibit 3, 2005 Consolidated Financial Statements. In addition, the Bank’s Audit and Conduct Review Committee of the Board of Directors has reviewed, and the Board of Directors has reviewed and approved the 2005 Consolidated Financial Statements and Management’s Discussion & Analysis prior to release. The Bank is committed to providing timely, accurate and balanced disclosure of all material information about the Bank and to providing fair and equal access to such information. The Bank’s disclosure policies and practices are published on the Bank’s website.

As of October 31, 2005, the Bank’s management evaluated the effectiveness of the design and operation of its disclosure controls and procedures, as defined under the rules adopted by the U.S. Securities and Exchange Commission (SEC) and the Canadian securities regulatory authorities. This evaluation was performed under the supervision of, and with the participation of the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO). In addition, the Bank’s management have assessed whether during the 2005 fiscal year there have been any significant changes in the Bank’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Bank’s internal control over financial reporting.

Disclosure controls are procedures designed to ensure that information required to be disclosed in reports filed with securities regulatory authorities is recorded, processed, summarized and reported on a timely basis, and is accumulated and communicated to the Bank’s management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure. Internal control over financial reporting is a process designed by, or under the supervision of, senior management, to provide reasonable assurance regarding the reliability of financial reporting and preparation of the Bank’s consolidated financial statements in accordance with Canadian generally accepted accounting principles.

The Bank’s management, including the CEO and the CFO, does not expect that the Bank’s disclosure controls or internal control over financial reporting will prevent or detect all misstatements due to error or fraud. Because of the inherent limitations in all control systems, an evaluation of controls can provide only reasonable, not absolute, assurance that all control issues and instances of fraud or error, if any, within the Bank have been detected. The Bank is continually evolving and enhancing its systems of controls and procedures.

Based on the evaluation of disclosure controls and assessment of changes in internal control over financial reporting, the CEO and the CFO have concluded that, subject to the inherent limitations noted above:

Current SEC rules will require the CEO and CFO to certify annually that they have evaluated the effectiveness of the design and operation of internal control over financial reporting and to provide an annual report on internal control over financial reporting. During 2005, the application of this rule was deferred and will be applicable to the Bank for the fiscal year ending October 31, 2006. In addition, a similar requirement is expected to be introduced by the Canadian securities regulatory authorities commencing in 2007. The Shareholders’ Auditors will be required to attest to and report on managements’ assessment. A significant effort is under way to meet this new reporting requirement.

All of the members of the Bank’s audit committee are financially literate, and one or more members of the audit committee meet the definition of a financial expert. The Bank’s board of directors has determined that Mr. Ronald A. Brenneman is an audit committee financial expert and is independent, as that term is defined by the New York Stock Exchange’s corporate governance standards applicable to the Bank.

The Securities and Exchange Commission has indicated that the designation of a person as an audit committee financial expert does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation.

The Bank has adopted a code of ethics, entitled “Scotiabank Guidelines for Business Conduct”. These guidelines have been in place for many years and apply to all directors, officers and employees of the Bank. The Scotiabank Guidelines for Business Conduct are available on the Bank’s Internet website at www.scotiabank.com, in the Corporate Governance section, and are available in print to any shareholder upon written request to the Secretary of the Bank. Amendments to the Scotiabank Guidelines for Business Conduct and waivers, if any, for directors and executive officers will be disclosed on the Bank’s website. There were no such waivers granted in fiscal 2005.

The disclosure provided in Table 29 “Fees paid to the shareholders’ auditors” on page 82 of Exhibit 2, Management’s Discussion & Analysis, is incorporated by reference herein. The nature of these services is described below:

None of the above services qualified for an exemption under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X from the requirement that the audit committee pre-approve the services. The majority of the hours expended on the audit of the 2005 consolidated financial statements were attributable to work performed by the full-time permanent employees of the Bank’s independent auditors, KMPG LLP and PricewaterhouseCoopers LLP. Policies and procedures for pre-approval of services performed by the external auditors were annexed as an exhibit to Form 40-F for the fiscal year ended October 31, 2004 and some insignificant revisions were made effective March 29, 2005. The Audit and Conduct Review Committee’s pre-approval policies and procedures, which were substantially revised effective November 28, 2005, are attached as Exhibit 5. The substantial changes were made in conjunction with the Bank moving to a single independent audit firm for fiscal 2006.

The disclosure provided under “Off-Balance Sheet Arrangements” on pages 48 to 50 of Exhibit 2, Management’s Discussion & Analysis, is incorporated by reference herein. Additional information from “Changes in Accounting Policies” on pages 74 and 75 of Exhibit 2, as well as from note 1 on pages 98 to 102, note 4(b) on pages 104 and 105, note 6 on page 106, note 13 on page 109, note 14 on page 110, note 21 on pages 119 and 120, note 22 on pages 121 to 124, and note 23 on pages 124 to 127 of Exhibit 3, 2005 Consolidated Financial Statements, is incorporated by reference into “Off-Balance Sheet Arrangements” in Management’s Discussion & Analysis.

The disclosure provided under “Contractual Obligations” on page 68 of Exhibit 2, Management’s Discussion & Analysis, is incorporated by reference herein. Additional information note 10 on page 108, note 17 on pages 114 and 115, note 21 on pages 119 and 120, and note 22 on pages 121 to 124 of Exhibit 3, 2005 Consolidated Financial Statements, is incorporated by reference into “Contractual Obligations” in Management’s Discussion & Analysis.

The Bank’s audit committee is composed of the following directors: Hon. Michael J.L. Kirby (Chair), Ronald A. Brenneman, Hon. Barbara J. McDougall, Elizabeth Parr-Johnston, Paul D. Sobey, and Barbara S. Thomas. Ex-officio member: Arthur R.A. Scace.

Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.