PDF 1.43 MB - Nepal SBI Bank Ltd.

Over the last four years, we have grown larger and stronger - in terms of business, geography and resources. This was achieved by relying on the fundamentals. Our achievements were founded on basic banking norms - quality, consistency and transparency of capital base, sound liquidity, a robust risk management framework coupled with the practice of good corporate governance and above all the tireless focus on customer satisfaction. Minimalism describes movements in various forms of art and design, where the work is stripped down to its most fundamental features. Focussing on the little things. The finest details. The bare essentials. Our approach. Our success. Our progress. We attribute to Minimalism.

Contents Contents Introduction

1

Annual Report of Board of Directors

6

Management Review and Analysis

22

Human Resource and Industrial Relations

33

Social Responsibility Initiatives

34

Corporate Governance

36

Risk Management

46

Shareholders Information

48

Financial Statements

53

Note: In Nepal fiscal year ends on the last day of the month of Ashadh i.e. mid-July as per Gregorian Calendar. FY 2067/68 denotes FY 2010/11.

Introduction Nepal SBI Bank was incorporated in Nepal on April 28, 1993, as a public limited company. It commenced operations on July 7, 1993, and is principally engaged in the business of banking, as defined in the Banks and Financial Institutions Act, 2006. The Bank is listed on Nepal Stock Exchange, Kathmandu. Nepal SBI Bank has since expanded into a network of 59 banking and non-banking outlets including 50 full-fledged commercial banking branches, 6 extension counters and 3 administrative offices. A network of 68 online ATMs covering all major cities in Nepal, 24 hours Mobile Banking and Internet Banking services support the delivery for speedier customer service. As on July 16, 2011, the Bank with a staff complement of 505 employees, had an equity of Rs. 2.1 billion and total assets of Rs. 46.1 billion, with more than 3,00,000 banking customers. The Bank has been taking up diverse Community Service. Initiatives beyond the call of regular banking business, to establish itself as a responsible corporate citizen of this great nation. Its aim is to become “the banker to every Nepali”

Annual Report 2010-11

1

Our Aspiration “The Banker to Every Nepali”

Our Commitment “First in Customer Satisfaction”

2


Strategic Objectives The key elements of our overall strategic goal are to build an open and honest corporate culture and to engage actively on mutual beneficial relationship with all our stakeholders to create value for them. We aim to achieve our strategic goal by achieving following six key objectives: s 4OCAREFORCUSTOMERSEVOLVINGNEEDSANDEXPECTATIONSBY providing suitable products and services s 4OCREATEAGREATPLACETOWORK s 4OPRACTICEEXEMPLARYGOVERNANCEANDACCOUNTABILITY s 4O WORK IN HARMONY AND IN MUTUAL SATISFACTION WITH OUR Business Partners. s 4OPROVIDERETURNSONTHEINVESTMENTOFOUROWNERS s 4OINVESTINLOCALCOMMUNITIESINWHICHWEOPERATEFORTHE benefit of the society at large.


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Code of Ethics s $IRECTORS )NDIA"ASED/FlCERS)"/S AND%MPLOYEESSHALLCONDUCTBUSINESSTRANSACTIONS fairly and equitable without being unduly influenced by individual friendship and associations with the customers. s !LLTHEMEMBERSOFTHE"OARD -ANAGEMENT#OMMITTEEAND%MPLOYEESATALLLEVELSSHALL maintain confidentiality of customer information and transactions and even after vacating the office continue to maintain confidentiality or secrecy in regard to the copyright material or other correspondences, accounts and dealings of the Bank and its customers. However, providing any information relating to financial transactions to the third party as required by law shall not be construed as breach of confidentiality. s #HAIRMANANDORANYMEMBEROFTHEBOARDSHALLNOTINTERFEREINTHEDAY TO DAYFUNCTIONING OF THE MANAGEMENT EXCEPT IF HESHE HOLDS THE POSITION OF -ANAGING $IRECTOR OR %XECUTIVE$IRECTOR s .OMEMBEROFTHE"OARD -ANAGEMENT#OMMITTEEAND%MPLOYEESSHALLENGAGEDIRECTLY or indirectly in any activities which are against the interest of the Bank and not do anything, WHICHWILLINTERFEREWITHANDORBESUBVERSIVEOFMAINTENANCEOFDISCIPLINE GOODCONDUCTAND integrity of the staff. s -EMBERSOFTHE"OARD -ANAGEMENT#OMMITTEEAND%MPLOYEESSHALLNOTACCEPTANYOFFER payment, promise to pay, or authorization to pay any money, gift, or anything valuable from CUSTOMERS SUPPLIERS SHAREHOLDERSSTAKEHOLDERS ETC THATISPERCEIVEDASINTENDED DIRECTLY or indirectly, to influence any business decision, any act or failure to act, any commission of fraud, or opportunity for the commission of any fraud. s %MPLOYEESSHALLNOTTAKEPARTINPOLITICSANDSHALLNOT WITHINTENTIONTOSATISFYHISHERPOLITICAL interests on the matters relating to his services, exert or attempt to exert any political or other undue influence upon any other employees. s .OONESHALLWILLFULLYDESTROYORDAMAGEANYASSETOFTHEBANKORCARRYITOUTSIDETHEBANKgS premises and use or allow unauthorized persons to use such asset without obtaining prior permission from the authorized person of the bank.

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Expression Economized


5

Annual Report of "OARDOF$IRECTORS Nepal SBI Bank Ltd. ended FY 2067-68(2010-11) with a substantial growth in profit, encouraging improvement in efficiency and considerable strengthening of its reach driven by steady growth. All these were achieved in the context of considerable challenges posed by the global and local banking and economic scenario in an intensely competitive banking environment.

6


!NNUAL2EPORTOF"OARDOF$IRECTORS

The Operating Environment The operating environment in Nepal has been challenging for many years and the present review year was no exception. High inflation and low business confidence have made things difficult FORTHEINDUSTRY4HECOUNTRYSREAL'$0GREWATAMEAGRERATE OF PERCENT AT BASIC PRICE4HIS MEAGRE REAL '$0 GROWTH can largely be attributed to the mere 4.1 percent growth in Agricultural sector due to adverse weather conditions in the country. Industry and Manufacturing and Service sectors grew by only 1.4 and 3.6 percent respectively during the year, as against the growth of 3.9 percent and 6.3 percent respectively during previous year.

past years. Foreign employment sector that was hit hard by global economic crisis showed signs of recovery as indicated by increasing demand of Nepali migrant workers in the international labor market and subsequent inflow of remittances which grew by 9.4 percent during FY 2067-68 to reach to a record level of Rs. 205 billion.

The financial crisis that started in the Western economies a few years back is gradually engulfing the economies of both developed and developing countries, causing the global output forecast to shrink. As part of global financial and economic system albeit less significantly, the Nepalese economy could There have been some welcome developments too. The feel the impact of the global financial crisis through different ANNUALAVERAGECONSUMERINmATIONREMAINEDATPREVIOUSYEARS routes like a slowing down in the rate of remittance growth, equivalent of 9.6 percent during the review period. Thanks to a recessionary tourism sector, decline in foreign aid, and a lowered increment of 5.4 percent in the prices of non-food demand-deficient manufacturing sector. While a slowing of and services group. On the external front, owing to the increase the first three components will affect poverty reduction and in export and substantial decrease in import, the increment development initiatives, the decline in global demand for Nepalirate of export overreached the import rate for the first time manufactured products will put direct downward pressure on in the last decade. Consequently, the rate of Trade deficit has growth rate. However, we can see some positive improvements decreased significantly. However, in respect of country-wise in the flow or remittances as well as amelioration of tourism TRADE ITSBEENMORE)NDIACENTRICALMOSTTWOTHIRD THANINTHE sector during the later period of the review year.


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The Banking Industry

The banking industry continued to witness geographic and numeric expansion in terms of OUTLETS HOWEVERATADECELERATEDPACE4HEREARE@!CLASSCOMMERCIALBANKS @"CLASS $EVELOPMENT"ANKSAND@#CLASS&INANCE#OMPANIESANDOTHERlNANCIALINTERMEDIARIESINTHE market. Branches of the commercial banks expanded to 1,111 at the end of review fiscal year vis-à-vis 966 at the end of Ashadh 2067. The Regulators introduced stringent regulations relating to investment in real estate due to fears of an asset bubble, but such regulations were relaxed a bit later on. 4HE COUNTRYS SECONDARY MARKET SAW SERIOUS SETBACK DURING THE YEAR AS THE TOTAL MARKET CAPITALIZATIONOFTHELISTEDCOMPANIESMOSTLY&INANCIAL3ECTOR DECREASEDBYPERCENTTO2S 323.4 billion as on Ashadh 2068 compared to that of Rs. 376.8 billion on Ashadh 2067 due to substantial decrease in NEPSE Index which was 362.2 points, its lower level in recent years. Liquidity continued to worry the industry especially during the first six months of the year which resulted in higher short and medium term interest rates. Mobilizing deposits in a high inflation and tight liquidity environment has been a challenge. However, the later months of the fiscal year showed some signs of relief as the liquidity crunch softened and deposits began to flow into the banking system. In 2067-68, the deposit of commercial banks increased by Rs. 57.3 billion as against 68.7 billion during last financial year. Similarly, Loan and advances of commercial banks increased by Rs. 56.9 billion as against Rs. 67.6 during the last financial year. The capital adequacy ratio of most of the banks exceeded both local and international regulatory requirements. The industry also witnessed significant progress in product innovation and service delivery. $ESPITETHESECONSTRAINTS THEBANKINGSECTORMAINTAINEDITSPROlTABILITYLEVELSANDIMPROVEDOTHER performance indicators.

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Other Factors Impacting Business of Bank 3TATUTORY,IQUIDITY2ATIO3,2 RATEHASBEENlXEDTOIN case of commercial banks in the Monetary Policy of 2010 WHICH WAS EARLIER "UT THIS RATE IS INCLUSIVE OF #222EGULATORSHAVEDElNEDTHEITEMSVIZINVESTMENT in government securities, cash in vault of FIs, Cash Reserve Requirement and excess liquidity over CRR to be counted in SLR. Though this provision helps ensure solvency of the banks in general and strengthens liquidity position in particular, it impels BANKSTOAUGMENTTHEINVESTMENTIN'OVERNMENTSECURITIESAND thus restricts the expansion of credit. $URING THE YEAR .EPAL 2ASTRA "ANK .2" UNVEILED THE MUCH TALKED ABOUT -ERGER AND !CQUISITION 'UIDELINES TO CONSOLIDATE THE COUNTRYS lNANCIAL SECTOR 4HE GUIDELINES ARE EXPECTED TO PROMPT BANKS AND lNANCIAL INSTITUTIONS "&)S TO go for amalgamation. The Central Bank, through the merger guidelines, has offered regulatory relaxations to prepare a ground for mergers among BFIs. The central bank has relaxed provisions on branch expansion, single obligor limit, deprived sector lending, and expansion of operational area, upgradation, and capital adequacy ratio for a certain period, for BFIs going for merger.


9

Measuring Our Success $ESPITETHEUNFAVORABLEMACRO ECONOMICCONDITIONSANDINTENSELYCOMPETITIVELOCALBANKINGINDUSTRY THE"ANKWASSUCCESSFULIN improving overall performance during the year. It has continued to maintain its position as a premier bank in the country and is one of the most profitable and financially robust banks.

Financial Performance Results for the year Total Operating Income Operating Profit Net Profit 0ROVISIONFOR)NCOME4AX#URRENT9EAR

Amount in Rs. million Fiscal Year 2067-68 2066-67 1,421 1,106 674 570 465 392

Growth Volume Percentage 315 28.46 104 18.23 73 18.59

Fiscal Year 2067-68 2066-67 18,911 16,306 46,088 38,048

Growth Volume Percentage 2,605 15.98 8,040 21.13

Amount in Rs. million Position at the year end 3HAREHOLDER&UNDS $EPOSITS 'ROSS,OANSAND!DVANCES Total Investment Total Assets

Information per share (Rs.) Earnings $IVIDENDINCLUDING"ONUS Market Value at the year end Book Value at the year end

Financial Ratios 2ETURNON3HAREHOLDERS%QUITY 2ETURNON.ET&IXED!SSETS 0RICE%ARNINGS2ATIO4IMES )NTEREST)NCOME,OANS!DVANCES

Capital Fund Ratio (%) Adequacy of Capital Fund on Risk Weighted Assets - Core Capital - Supplementary Capital - Total Capital .ON 0ERFORMING,OAN.0, TO4OTAL,OAN

10


Fiscal Year 2067-68 24.85 565 153.51

2066-67 23.69 741 147.61

Growth Volume Percentage 1.16 4.90

-176 -23.75 5.90 4.00

Fiscal Year 2067-68

Growth 2066-67 Change

Fiscal Year 2067-68 2066-67 10.32 1.20 11.52

10.89 1.36 12.25


Corporate Citizenship CODE OF ETHICS

in all areas of banking activity. The Bank is compliant with comprehensive Internal Capital Adequacy Assessment Process )#!!0 ANDALSOHASSEPARATEPOLICIESFOR#REDIT2ISK -ARKET Risk and Operational Risk Management. In accordance with these policies, four Risk Management Committees—ICAAP Review Committee, Credit Risk Management Committee, Market Risk Management Committee and Operational Risk Management Committee—have been constituted. Primary goal of the Risk Management Framework is to ensure INTERNAL CONTROL SYSTEMS that outcomes of risk-taking activities are predictable and Adequate internal control systems have been put in place by CONSISTENTWITHTHE"ANKSOBJECTIVESANDRISKTOLERANCEAND THE"ANKINTHEDIFFERENTAREASOF"ANKSOPERATIONS4HEREIS that there is an appropriate balance between risk and return in A SEPARATE )NTERNAL!UDIT $EPARTMENT IN THE "ANK HEADED BY order to maximize shareholder rewards. Internal Auditor, who directly reports to the Audit Committee and is also responsible for monitoring compliance with various NRB SOCIAL RESPONSIBILITY INITIATIVES directives and guidelines. The Audit Committee of the Bank We have continued our approach towards taking social under chairmanship of a non-executive director reviews the responsibility initiatives as an essential characteristic of our financial position of the Bank, adequacy of its internal control business and as a partner in progress of the community that systems and issues appropriate guidelines to the Bank based on we serve. The Bank is not only conscious about maximizing its business and profitability, but also equally conscious about its the feedback received from the internal audit reports. responsibility towards the society where it carries out business RISK MANAGEMENT and generates income. The Bank has always been showing Fully recognizing the risk management functions as fundamental its readiness to lend a supporting hand in every walk of life to to the business of banking, more emphasis has been placed on the best extent, especially to the weak and underprivileged. risk assessment considering the turbulent economic environment $URINGTHEYEAR WEHAVESUPPORTEDDIRECTLYORINPARTNERSHIP in which the Bank operates. The bank has adopted a holistic with other organizations, various individuals, groups or approach and has been engaged in extensive and detailed institutions in the wider area of social life including Health, evaluation and assessment of its risk management framework Education, Sports, Environment Conservation etc.

4HE"ANKISFULLYCOMPLYINGWITH.EPAL2ASTRA"ANKSGUIDELINES on maintaining good corporate governance in the Bank. All the members of the Board as well as the employees of the Bank are in full compliance with the code of ethics prescribed by NRB. Similarly, the Bank has also devised and implemented ITSOWN@#ODEOF%THICSTOBEFOLLOWEDMETICULOUSLYBYALLTHE MEMBERSOFITS"OARDOF$IRECTORS -ANAGEMENT4EAMANDSTAFF at all levels.


11

Value Creation and Allocation 4HE"OARDOF$IRECTORSRECOMMENDSTHEFOLLOWINGAPPROPRIATIONSFORTHElNANCIALYEARENDED!SHADH Amount in Rs. Thousand PARTICULARS Creation 1. Accumulated Profit up to Last Year #URRENT9EARS0ROlT 3. Capital Adjustment Reserve up to Previous Year Total Allocation 'ENERAL2ESERVE 0ROPOSED$IVIDEND 0ROPOSEDISSUEOF"ONUS3HARES 4. Exchange Fluctuation Reserve Fund 5. Capital Adjustment Reserve 6. Investment Adjustment Reserve .3",$EBENTURE2EDEMPTION2ESERVE $EFERRED4AX2ESERVE !CCUMULATED0ROlT,OSS

12


Fiscal Year 2067-68 2066-67 4,249 50,000 518,814

3,849 65,000 460,591

79 30,000 24,572

50,000 642


Statutory Auditor -S 0, 3HRESTHA #O #HARTERED!CCOUNTANTS CONDUCTED statutory audit of the Bank for the FY 2010-11. New statutory auditors for the fiscal year 2011-12 will be appointed in the FORTHCOMING!'- AS PER THE RECOMMENDATION OF THE "ANKgS Audit Committee.

Changes in THE"OARDOF$IRECTORS !FTER THE CHANGE IN INCUMBENCY OF 3HRI 0RATIP #HAUDHURI 3HRI ( ' #ONTRACTOR HAS BEEN NOMINATEDBY3")INHISPLACE&URTHER ASARESULTOFTHEELECTIONHELDONTHETH!'- FORTHEDIRECTORSOFTHE"ANKREPRESENTINGTHE'ENERAL0UBLIC3HAREHOLDERS 3HRI.IRANJAN +UMAR4IBREWALA AND 3HRI - +!GRAWAL HAVE BEEN ELECTED TO BE NOMINATED IN THE "ANKS "OARDBYTHE!'-#ONSEQUENTLY -S(ASANA3HARMAREPRESENTING%0&HASBEENAPPOINTEDTO the post of chairperson. Likewise, Shri Alok K. Sharma has recently been nominated by SBI to REPLACE3HRI.+#HARIASTHE-ANAGING$IRECTOR/NBEHALFOFTHE$IRECTORS WEWOULDLIKETO PLACEONRECORDOURAPPRECIATIONFORTHECONTRIBUTIONMADEBY3HRI3HRESTHA&ORMER#HAIRMAN OFTHE"OARDOF$IRECTORS 3HRI#HAUDHURI&ORMER$Y-ANAGING$IRECTOR 'ROUP%XECUTIVE )NTERNATIONAL"ANKING 3")ANDCURRENTLY#HAIRMANOF3") AND3HRI#HARI&ORMER-ANAGING $IRECTOR INGUIDINGTHEAFFAIRSOFTHE"ANKDURINGTHEIRTENUREANDWELCOME3HRI#ONTRACTOR 3HRI Tibrewala and Shri Sharma as new members to the Board.


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All the statutory requirements on disclosure of information INCLUDINGUNDER3ECTION OFTHE#OMPANIES!CTAND2ULE OF3ECURITIES2EGISTRATIONAND)SSUANCE2EGULATION have been embodied as annexure to this report.

Further Information AND$ISCLOSURE

14


!PART FROM THESE THE -ANAGEMENT !NALYSIS AND $ISCUSSION following this report provides detailed review of Operating and Financial Performance of the Bank during FY 2067-68. 3IMILARLY INFORMATION REGARDING THE "ANKS #ORPORATE 3OCIAL 2ESPONSIBILITY INITIATIVES #ORPORATE 'OVERNANCE AND 2ISK Management and useful information for Shareholders can be found in their respective sections. Financial Statements including Balance Sheet, Profit and Loss Account and Cash Flow Statement followed by the schedules prepared as prescribed by Nepal Rastra Bank and notes to accounts thereto can be found in the complete annual report.


Path Ahead $UETOVARIOUSINITIATIVESTAKENINTHEPAST WEHAVEESTABLISHED ourselves firmly in the Nepali Banking arena. We have been performing better than the industry average under most of the key business indicators in the last couple of years and it will be our endeavour to take this drive further. As we have expanded our network of banking officies from 20 in 2008 to 56 in 2011 , we need to consolidate our position and grow. Towards this, we have set up two Regional Offices in Biratnagar and Nepalgunj.

in the Middle East countries which will be launched gradually in other countries also where large number of Nepali migrant workers are located.

The Asian economy has been growing faster than the rest of the world and due to this the demand for Nepali migrant labour may continue to remain high which will ensure higher inflow of inward remittances in the country. In order to encash this opportunity we have launched our own web based remittances product

Bank will look forward to build a still larger customer base and provide services at affordable rate in order to continue its growth MOMENTUM7EWILLCONTINUETOENDEAVOURINUPHOLDING"ANKS image as a prudent, affordable and reliable financial institution with strong brand value.

Capital requirement of the banks is likely to go up in the light of proposed introduction of Basel III by 2015 globally. In order to discourage demand for new licenses, Nepal Rastra Bank may also increase the minimum capital requirement for the banks. Considering the low key performance of the Capital Market in Nepal , raising capital from the primary market is likely to $UETOHARDENINGOFINTERESTRATEONDEPOSITS PROTECTINGINTEREST remain challenging particularly when many banks may require SPREAD IS GOING TO BE CHALLENGING IN FUTURE $UE TO ATTRACTIVE to do this. interest rate being provided on fixed deposits, it is observed that savings bank and current account deposits have declined which Issuing operating instructions, introduction and dissemination is further going to increase cost of funds for banks. of knowledge on new services and educating on corporate concerns to the large number of employees spread throughout After the end of last financial year, the liquidity situation in the the country is no less challenging a job. In this direction, we have market has improved but due to lack of viable banking projects, started two new training centers at Biratnagar and Nepalgunj deployment of funds in profitable assets is going to be another in addition to the earlier two at Kathmandu and Pokhara. challenge. This situation may affect the profitability of the banks Establishing all these training centers are aimed at imparting in the coming quarters. necessary skills to employees to update their job knowledge.


15

Acknowledgement

16


Finally, we would like to express our sincere appreciation to Nepal Rastra Bank, other regulatory bodies and State Bank of India for their guidance and support; to the shareholders and customers of the Bank for their patronage and business; to our business service providers for their continuous support and last but not the least to the dedicated employees of the Bank for their sincerity and hard work, which has given us these consistently excellent results. As always, we welcome your thoughts and suggestions. Thank you !

Elegance Exemplified


17

18


"USINESS$EVELOPMENT$EPT

AND.0!$EPT

Easten Regional Office

Western Regional Office

Regional Offices

2ECONCILIATION$EPT

$OCUMENTATION&OLLOWUP

"RANCH#ONTROL)NSPECTION

(UMAN2ESOURCES$EPT

3YSTEMS$EPT

!CCOUNTS!DMINISTRATION$EPT

#//

#&/ 4REASURYAND&OREX$EPT

Chief Operating Officer

Chief Financial Officer

-ANAGING$IRECTOR

"OARDOF$IRECTORS

#REDIT!PPRAISAL3ANCTIONS

Chief Credit Officer ##

Credit Committee

Organisation Structure

,AW$EPT

3HARE$EPT

Company Secretary

)NTERNAL!UDIT$EPT

Audit Committee


Management Team From Left to Right Shri Arjun Nepal 2EGIONAL-ANAGER%ASTERN2EGION Shri Tulasi Ram Gautam #HIEF#REDIT/FlCER##/ Shri N. K. Chari -ANAGING$IRECTOR#%/ Shri Madhukar Anand #HIEF/PERATING/FlCER#// Shri Binod K. Mishra #HIEF&INANCIAL/FlCER#&/ Shri Dev Raj Adhikari 2EGIONAL-ANAGER7ESTERN2EGION


19

(EADOF$EPARTMENTS5NITS From Left to Right Shri Chappi Raj Panta - Main Branch Shri Bigyan Adhikari - Systems Shri Sushil Chandra Mahat - Card Shri Amlesh Ratna Sthapit - Treasury Shri Badri Lal Amatya #REDIT!PPRAISAL3ANCTIONS Shrimati Rashmi Kharel Karmacharya - Human Resources

20


Shrimati Roshani Bharati - Accounts and Administration Shri Sushil Kumar Sharma "USINESS$EVELOPMENT Shri Umesh Bahadur Karki #REDIT$OCUMENTATION &OLLOW5P 3UPERVISION.0! Shri Ramesh Ghimire ,AW3HARESAND#OMPANY3ECRETARY Shri Kamal Ram Bhattarai - Reconciliation Shri Sudeep Khanal - Internal Audit Shri Bishnu Dev Yadav - Commerical Branch


21

Management Review and Analysis FINANCIAL REVIEW 'ROSSINCOME

Rs. 3.5 billion 5PBY

By Business Segments

#ARD2EMITTANCE2SM

Treasury Operations Rs. 725 m

,OANS!DVANCES Rs. 2,442 m

Others Rs. 1,47 m

Central Rs. 2,622 m

Mid-Western Rs. 78 m Far-Western Rs. 20 m

22


Western Rs. 433 m

Eastern Rs. 364 m

"Y'EOGRAPHIC2EGIONS

Management Review And Analysis

6!,5%!$$%$34!4%-%.4 Value Added Income from banking services Cost of Services Value added by Banking Services .ON "ANKING)NCOME 0ROVISIONAGAINSTNON PERFORMINGASSETS Total Value Added Value Allocated To Employees Salaries, allowances and other benefits Providers of Capital #ASH$IVIDEND Bonus Shares Interest on debenture and interbank borrowings Government Income Tax Expansion and Growth $EPRECIATION Retained in Business Total Value Allocated

As on Ashadh end 2067-68

2066-67

3,517,101,949 2,383,448,640 1,133,653,309 1,131,908,452

2,550,521,349 1,592,741,243 957,780,106 917,337,730

320,777,167 320,777,167 353,155,957 233,662,907 26,027,887 188,903,825 188,903,825 269,071,503 137,436,929 1,131,908,452

184,172,772 184,172,772 394,218,140 207,700,362 103,437,633 146,620,243 146,620,243 192,326,575 100,961,612 917,337,730


23

Profit before bonus and taxes

Net Profit

Rs. 718.8 m

Rs. 464.5 m

up from Rs. 592.2m in the previous Fiscal Year

ANINCREMENTOFFROM2SMOF&9

.ON0ERFORMING!SSETS.0!

'ROSS!DDITIONAL,ENDING

0.38pp down

Rs. 3.7 b

FROMTOON9EAR TO 9EARBASIS

and additional deposit of Rs. 7.5b mobilized during the year

Capital Adequacy Ratio

Liquid Assets

Rs. 10.6 b

ASAGAINSTTHESTATUTORYREQUIREMENTOF

AND,IQUIDITY2ATIOASPER"ASEL))WASASON!SHADH end 2068.

As on Ashadh End IN2S"ILLION

,ENDING)NVESTMENTS

$EPOSITS

3HAREHOLDERS&UND2/%

24


42.4

34.9

27.9

40.3

33.8

28.4

2.9

2.4

1.7

2068

2067

2066

2068

2067

2066

2068

2067

2066


Total Tax Paid

#REDIT $EPOSIT2ATIO

Rs. 207.8 m

including Rs. 19.77 million paid on behalf of employees.

ANDEARNEDAVERAGEINTERESTOFONLOANSWITH IMPROVEDINTERESTRATESPREADOF

Customer Base

Return on Net Fixed Assets

308,644

an increase of 109,680 number of retail customer during

improved return on net fixed assets.

the year.

&9

Human Capital

Network

Rs. 9,19,931

NETEARNINGPEREMPLOYEE4OTAL FORBANKDURING

increment in physical representation with 7 branches, 18

the year

ATMs and 2 non-banking offices added since last Fiscal Year.

As on Ashadh End

Operating Profit IN2S-ILLION

674.2

570.3

442.3

2068

2067

2066

Earning Per Share IN2S

24.9

2068

23.7

2067

$IVIDEND0ER3HARE

36.2

17.5

17.5

42.1

2066

2068

2067

2066


25

Horizontal and Vertical Analysis Balance Sheet

Financial Position

26


Figures are in Rs. millions as on Ashadh End

Horizontal Analysis

Vertical Analysis

Variance 2068 to 2067 to 2067 2066

Composition

2068

2067

CAPITAL & LIABILITIES 3HARE#APITAL 2ESERVESAND&UNDS $EBENTURES"ONDS "ORROWINGS $EPOSITS "ILLS0AYABLE 0ROPOSED$IVIDEND )NCOME4AX,IABILITIES /THER,IABILITIES Total Capital and Liabilities

46088.2

38047.7

21.1%

ASSETS #ASH"ALANCE "ALANCEWITH.EPAL2ASTRA"ANK "ALANCEWITH"ANKS&INANCIAL)NSTITUTION -ONEYAT#ALLAND3HORT.OTICE )NVESTMENT ,OANS !DVANCESAND"ILLS0URCHASE &IXED!SSETS .ON"ANKING!SSETS /THER!SSETS Total Assets

46088.2

38047.7

21.1%

In 2068

In 2067

26.1%

100.0%

100.0%

26.1%

100.0%

100.0%


Profit and Loss Statement

Financial Position

)NTEREST)NCOME )NTEREST%XPENSES NET INTEREST INCOME #OMMISSIONAND$ISCOUNT /THER/PERATING)NCOMES %XCHANGE&LUCTUATION)NCOME TOTAL OPERATING INCOME 3TAFF%XPENSES /THER/PERATING%XPENSES %XCHANGE&LUCTUATION,OSS OPERATING PROFIT BEFORE PROVISION 0ROVISIONFOR0OSSIBLE,OSSES OPERATING PROFIT .ON/PERATING)NCOME,OSS 0ROVISIONFOR0OSSIBLE,OSS7RITTEN"ACK PROFIT FROM REGULAR ACTIVITIES 0ROlT,OSSFROMEXTRA ORDINARY!CTIVITIES NET PROFIT AFTER CONSIDERING ALL ACTIVITIES 0ROVISIONFOR3TAFF"ONUS 0ROVISIONFOR)NCOME4AX #URRENT9EARS 0REVIOUS9EARS $EFERRED4AX NET PROFIT

Figures are in Rs. millions at Ashadh End 2068 1008.2 1421.1 720.6 674.3 856.5

718.8

464.6

2067 826.0 1106.8 632.6 570.3 629.5

592.2

391.7

Horizontal Analysis

Vertical Analysis

Variance 2068 to 2067 to 2067 2066 22.1% 29.9% 28.4% 33.6% 13.9% 31.1%

18.2% 28.9%

36.1% -2.2%

21.4% 21.5%

18.6% 23.8%

Composition In 2068 32.5% 45.8% 23.2% 21.7% 27.6%

23.2%

15.0%

In 2067 36.4% 48.8% 27.9% 25.1% 27.7%

26.1%

17.3%


27

Products and Business Performance Through a widespread branch network in almost all major cities, towns and sub-urban areas coupled with alternative delivery channels, we aim to provide our customers with a wide array of offerings catering to all their banking needs.

Deposit and Account

Loans and Advances

Saral Bachat Khata: It is one of the most popular deposit accounts of the bank which has attracted more than 150,000 retail customers since its launch in year 2009. This account was targeted towards mid to low income group of people with lowered minimum balance requirement.

Corporate and Business Loans: The bank offers loans to large corporate and institutional customers including public sector entities and service them with offerings ranging from loans to meet operational funding requirements to service related to strategic expansions, syndications, project finance etc.

Ujjwal Bhavisya Bachat Yojana: This is a flexible recurring account which allows customers to deposit a sum of money periodically up to a desirable term. This product is especially useful for promoting savings and to use the fund received at maturity to fulfill personal needs that call for significant financial commitment.

Convenient Loan: This is tailor-made loan product devised with special focus on the needs of Small and Medium Sized Enterprises to meet their financing need in a very convenient manner.

Varistha Nagarik Bachat: Targeted at individuals above 49 years of age, this product provides customers with added benefits including higher rate of interest.

Mortgage and Mortgage Plus: Both Mortgage as well as Mortgage Plus loans are personal credit given to individuals purely on the basis of their income level. Other Retail Loans: Retail loans largely comprise of auto finance, home loan and credit for consumer durables. Credit card is not on offer yet.

Karmachari Bachat Khata: This account service was launched with special focus on groups of salaried employees FROM GOVERNMENT ANDOR NON GOVERNMENT ORGANISATIONS Remittance INCLUDINGSECURITYPERSONNELANDTEACHERS5NDERTHESCHEME Nepal SBI Remit: This is a newly launched online international a group of individuals can open Saving Account and enjoy an remittance service which offers a formal channel for the Nepali community residing all around the world to send money array of concessional benefits on various services. to Nepal. Shareholders’ Account: Respecting the interests of the shareholders, the bank has offered to all its public shareholders, Domestic Remittance Service: The bank started domestic accounts with no minimum balance requirement. They can also remittance service in partnership with Prabhu Money Transfer. receive the dividends and other payments by the bank on the This product allows customers to send and receive money to and from any part of the country. same account.

28



SBI Nepal Express Remit: This is a unique remittance product- the only one of its kind in Nepal. Nepali migrant workers residing and working in India can remit money at minimal charges from more than 14,000 branches of State Bank of India located in various parts of India. We are now receiving 600 remittance in averages per day through the service channel. Indo-Nepal Remit: This is another remittance-from-India product launched by Reserve Bank of India which has chosen Nepal SBI bank to disburse the remittance money to the beneficiaries in Nepal. WUMT’s/PMT’s Remittance: Customers can also receive remittance money send from abroad via remittance channels OF 7ESTERN 5NION -ONEY 4RANSFER AS WELL AS 0RABHU -ONEY Transfer at the branches of Nepal SBI Bank.

Card Nepal SBI Card:4HISISAN!4-CUM$EBITCARDWHICHCAN be used at 68 ATM terminals of the bank as well as more than 24,000 ATMs of State Bank of India. Presently, there are more than 200,000 users of Nepal SBI Card which is rising very rapidly. Bharat Yatra Card: Popularly known as BYC, this is a Nepalese Rupees denominated pre-paid card made for cash withdrawal and purchases while visiting India mainly for medical treatment, education, tours etc. Bank has already sold more than 14,000 Bharat Yatra Cards since its launch in November 2008.

Vishwa Yatra Card: 2ECENTLYLAUNCHED6ISHWA9ATRA#ARDISA53$ denominated international prepaid card which the customers can use for cash withdrawal in all the ATM terminals under VISA network in any part of the world and for purchases.

Alternative Delivery Channels Mobile Sakha: Mobile Sakha is mobile based banking service delivery channel which allows customers access various banking services like fund transfer, balance inquiry, bill payments, statement request, alert services etc. Internet Banking: This state-of-the-art online banking channel provides customers with a PC and internet connection access to banking services 24x7 from anywhere. Automated Teller Machine: Nepal SBI Bank has one of the largest network of ATM terminals both locally and internationally. Presently, the bank has 67 ATM terminals around the country and has access to more than 25,000 ATMs of State Bank of India group.

Auxiliary Services Utility Bill Payment: Customers both accountholders and non-accountholders of the bank can pay their telephone bills, insurance premium, school and college FEESATTHEBANKSBRANCHESFREEOFCHARGES Safe Deposit Locker: This is one of the popular auxiliary services of the bank. Presently customers can avail the service from 25 branches of the bank.


29

W

S

NP UR

HA

NC

U DH DEL DA

BAITADI

DOTI

KAILALI

RA

DARCHULA

Representation Branches Ext. Counters ATMs Admin. Offices Total

KA

E

BANKE

SURKHET

DAILEKH

KALIKOT

BAJURA

BARDIA

ACHHAM

BAJHANG

HUMLA

DANG

I

EH

AN D

KAPILBASTU RUP

A

LUN G

SYANGJA

KASKI

MUSTANG

CHITWAN

TANAHU

LAMJUNG

MANANG

NAWALPARASI

PALPA

MYAGDI

GULMI

BAG

CHI RGAKHA

PYUTHAN

ROLPA

RUKUM

DOLPA

Eastern Central Western Mid-Western Far-Western 9 22 13 3 3 1 4 1 8 35 19 3 3 1 1 1 19 62 33 7 6

SALYAN

JAJARKOT

JUMLA

MUGU

Total 50 6 68 3 127

PARSA BARA

Lalitpur

SARLAHI

SIRAHA

SAPTARI

UDAYAPUR

KHOTANG

H NC PA

ILAM

AR

www.nepalsbi.com.np

JHAPA

TH

TAPLEJUNG

SUNSARI MORANG

DHANKUTA

BHOJPUR

SOLUKHUMBU SANKHUWASABHA

OKHALDUNGA

DOLKHA

RAMECH HAP

SINDHULI

KTM B KA V PAL RE AN CH OK

Bhaktapur

Kathmandu

SINDHUPALCHOK

RASUWA

NUWAKOT

MAKWANPUR

DHADING

GORKHA

PATAN

RAUTAHAT

PARBAT

/52.%47/2+

MAHOTTARI

N

DHANUSA

Annual Report 2010-11 TERATHUM

30

Adminstrative Offices Corporate Office Kathmandu

Eastern Regional Office Biratnagar

ATM Locations Inside Kathmandu Valley (27) $URBARMARG 2. New Road 3. Jawalakhel 4. Embassy of India 5. Bouddha "HAT"HATENI3UPER-ARKET""3- 7. Maharajgunj 'ONGABU 9. New Baneshwor 10. Bhaktapur 11. Hotel Sangrila,Lazimpat "HARATIYA'ORKHA3AINIK.IWAS 4HAMEL 13. Kalanki 14. Chauni .EW2OADND!4- 16. Hattisar $URBARMARG ND!4- 18. NLIC City Center, Kamalpokhari 19. BabarMahal 20. Kuleshwor $ALLU 22. Pepsicola, Purano SinaMangal 23. Teku 'AUSHALA +ATHMANDU 'WARKO

26. Mangal Bazar* 27. Putalisadak *

Western Regional Office Nepalgunj

Branch Locations Outside Kathmandu Valley (40) Inside Kathmandu Valley (17) Outside Kathmandu Valley (33) z Abukhaireni z$URBAR-ARG 28. Pokhara z Baglung z New Road 29. PPO Pokhara z Bhairahawa z Teku 30. Sunauli z Biratnagar z Maharajgunj 31. Nepalgunj z Birgunj z 'ONGABU "0+)(3 $HARAN z Birtamod z Boudha 00/ &USHRE $HARAN z Palpa z New Baneshwor 34. Adarsha Nagar, Birgunj z Butwal z Kalanki 35. Bhairahawa z$ANG z Jawalakhel 36. Butwal z$AMAK z Bhaktapur 37. Narayangarh z$AMAULI z Commercial Branch, Lainchaur 38. Biratnagar z$HANGADI z'WARKO 39. Birtamod z$HARAN z $ALLU 40. Janakpur z'ULMI z Kuleshwor 41. Palpa z Hetauda z'AUSHALA $ANG z Itahari z Bhainsepati* 43. Surkhet z Ilam z Pepsicola* 44. Ilam z Janakpur 45. Hetauda z Mahendranagar 'ULMI z Narayangarh 47. Itahari z Pokhara 48. Baglung z Nepalgunj $AMAULI z Rampur 50. Waling z Shishuwa 51. Manipal Hospital, Pokhara z Srijana Chowk 52. Rampur, Birgunj z Surkhet 53. Mahendranagar, Kanchanpur z Tikapur $HANGADI +AILALI z Waling .ARAYANGARHND!4- #HITWAN z Lahan* -AHENDRA#HOWK "IRATNAGARND!4- z Myaglung* $AMAK *HAPA z Parasi* "IG"AZAR$EPARTMENTAL3TORE "IRGUNJ z Arghakhachi* 59. Tikapur, Kailali z Bargachi* 60. Abu Khaireni,Tanahun 61. Lakeside, Pokhara "UTWALND!4- $ABUR.EPAL 3HREEPUR 0ARSA .EW2OAD 0OKHARAND!4- 65. Srijana Chowk, Pokhara 66. Shishuwa, Pokhara* "AGLUNGND!4- "AGLUNG

0ALPAND!4- 0ALPA

"RANCHES!4-SOPENEDAFTER!SHADHEND


31

Beauty Simplified

32


Human Resources and Industrial Relations Our team of 505 employees share common values and culture that help us grow further. The enthusiasm, talent and commitment of our people are the source of the competitive strength of our bank which helps in seizing EVERY OPPORTUNITY PRESENT IN TODAYS MARKET 7E ALWAYS ASPIRE TO CREATE @A TEAM SPIRIT AS PART OF OUR STRATEGIC objectives with passionate management and development of our people. Recruitment and Selection In order to satisfy the growing human resource needs that stem from the expansion of the branches and also from increase in volume of business, the Bank recruited and selected 60 new employees at various levels and deputed THEMWITHDIFFERENTASSIGNMENTSASPERTHE"ANKSNEED Equal Opportunity Employer We want to position ourselves as equal opportunity employer and provide fair and equal opportunity for everyone to be part of and work with Nepal SBI Bank as EVIDENTFROMTHEFACTTHATOFALLEMPLOYEESAREFEMALE In Nepal SBI bank, employees are sourced from every part of the country.

Human Resource Development The Bank is committed at all times to ensure that its people develop to their utmost potential and to equip them to face challenges and acquire opportunities present in the market effectively. Hence, to meet the training requirements of the staff, we have devised a quarterly training calendar with an objective to give every individual AMPLEOPPORTUNITIESTOIMPROVEHISHERSKILLSAND PROFESSIONALCOMPETENCIES$URINGTHElSCALYEAR a total of 1010 number of participants benefited from 110 training programs organized internally as well as externally. Workplace Health and Safety Issue $URING THE YEAR THE BANK INTRODUCED -EDICAL Insurance Policy for all its employees. Additionally, we address any potentially arising health and safety WITH UTMOST PRIORITY7E WITNESSED NO INSTANCES events, illness and injuries that can be directed WORKING MAN DAYS IN &9 MAN DAYS WERELOSTDURINGTHEYEARTOABSENTEEISMIN respect of the employees due to health issues.


33

Social Responsibility Initiatives .EPAL3")"ANKREGARDS#ORPORATE3OCIAL2ESPONSIBILITY#32 as an investment in society and its own future. As a responsible corporate citizen, we have undertaken Corporate Social Responsibility as an integral part of the way we do business. We believe in giving back to the society by taking initiatives with the intent to positively affect our stakeholders, which include our customers, sponsors, partners, employees, as well as our communities. Even in difficult economic conditions, we have shown an unwavering commitment to our role as a good corporate citizen. We invest in CSR related-programs and projects within our three areas of activity: Social Service, Education and Sports, and Conservation of Natural Environment.

victims of natural calamities, contributed to raise awareness on various social issues like educating girls, drug abuse and its effects, road traffic rules and management etc. Similarly, we have helped organize several health camps in different parts of the country as well as donated for various such events. We also attempt to promote public interest by encouraging community growth and development through sponsoring sporting events and supporting educational activities. We provide scholarships to deserving students from poor families to pursue education at different levels. We also sponsor various international, national and regional level sporting events and also encourage our employees to participate in such community events wherever possible.

5NDERSOCIALSERVICE .EPAL3")"ANKHASALWAYSTRIEDTOLEND The Bank believes in the cause of a better environment and a helping hand to those who are less fortunate and in need continually sponsors tree plantations, flower festivals as well as of assistance. We have distributed food and other supplies to other beautification projects for a greener and cleaner country.

34



35

#ORPORATE'OVERNANCE The Bank uses the term “corporate governance” to refer to the governance structure of organizational and operational practices of its leadership and management. Compliance with all applicable legislation, regulations, standards and codes is an essential characteristic of ORGANIZATIONALCULTUREAT.EPAL3")"ANK4HE"OARDOF$IRECTORS"/$S ISTHEAPEXDECISION making body and has ultimate responsibility for governance.

36


#ORPORATE'OVERNANCE

$IRECTORSg Statement of Responsibilities 4HE$IRECTORSHAVEPLEASUREINPRESENTINGTHE!NNUAL2EPORTS and Accounts for the fiscal year 2067-68, which includes business performance review, risk management and internal GOVERNANCEREPORT STAKEHOLDERSRELATIONREPORTSETC#ONTENTS of this Annual Report, financial Statements, Significant Accounting Policies used and the Notes to Accounts of the Bank and the additional disclosures in the Annual Report designated as audited, comply with requirements of the Nepal Accounting Standards and all other statutory and regulatory requirements. These Financial Statements and Notes thereto PRESENTED GIVE A TRUE AND FAIR VIEW OF THE "ANKS lNANCIAL position as at 32 Ashadh, 2068 and its performance for the year ended on that date.

the soundness in financial reporting process. 4HE "ANKS %XTERNAL !UDITOR -S 0, 3HRESTHA #O Chartered Accountants, who were appointed in accordance WITHARESOLUTIONPASSEDATTHELAST!NNUAL'ENERAL-EETING have expressed their opinion on presentation of financial statements and governance of corporate matters and are part OFTHIS2EPORT!SFARASTHE$IRECTORSAREAWARE THE!UDITORS do not have any other relationship with the Bank. The Auditors do not have any interest in contracts with the Bank.

"ANK CARRIED OUT TRANSACTIONS AS PER OBJECTIVES functions detailed in the Memorandum of Association and Articles of Association of the Bank and there were no Risk management function has been accepted as an ongoing significant changes in the nature of principal activities of the process which is in place to identify, measure, monitor and Bank during the financial year under review. There has not CONTROL THE RISKS THAT ARE FACED BY THE BANK 4HE $IRECTORS been any material event that occurred subsequently to the review this process through Risk Management Committee and date of the Balance Sheet that required adjustments to the specific steps has been taken by the Bank in managing both financial statements. banking and non-banking risks are detailed in the section on 4HE$IRECTORS TOTHEBESTOFTHEIRKNOWLEDGEANDBELIEFARE “Risk Management” of this Report. SATISlEDTHATALLSTATUTORYPAYMENTSTOTHE'OVERNMENT OTHER 4HE "OARD OF $IRECTORS HAS TAKEN STEPS TO OVERSEE THE regulatory institutions and related to the employees have been implementation of an effective and comprehensive system of made in time. internal controls covering financial operations and compliance control required to carry on the business of banking in an 4HE "OARD OF $IRECTORS HAS REVIEWED THE "ANKS BUSINESS orderly manner, safeguard its assets and secure as far as plans and is satisfied that the Bank has adequate resources to possible the accuracy and reliability of the records. The continue its operations in the foreseeable future. Accordingly, "OARD OF $IRECTORS IS SATISlED WITH THE EFFECTIVENESS OF THE the Financial Statements of the bank are prepared based on internal controls over financial reporting during the year going concern concept. under review and up to the date of approval of the Annual report and the Financial Statements to ensure 3IGNEDINACCORDANCEWITHARESOLUTIONOFTHE$IRECTORS


37

4HE"OARDOF$IRECTORS

Ms. Hasana Sharma Chairperson 2EPRESENTING%MPLOYEESg0ROVIDENT&UND

Mr. Hemant G. Contractor $IRECTOR Representing State Bank of India

Mr. Rajiv Pal Singh $IRECTOR Representing State Bank of India

Mr. S. K. Bhattacharyya $IRECTOR Representing State Bank of India

Mr. Manoj Kumar Agrawal $IRECTOR Representing Public Shareholders

Mr. Niranjan Kumar Tibrewala $IRECTOR Representing Public Shareholders

Mr. Mohan Raj Joshi $IRECTOR Independent Professional Expert

38


Mr. N. K. Chari -ANAGING$IRECTOR Representing State Bank of India

#ORPORATE'OVERNANCE

The Board and Management 4HE "OARD IS COLLECTIVELY RESPONSIBLE FOR THE SUCCESS OF THE "ANK $IRECTORS ARE RESPONSIBLE for bringing independent judgment and scrutiny to decisions taken by the Board. In addition TOTHEIRSTATUTORYDUTIES THE$IRECTORSMUSTENSURETHATTHE"OARDFOCUSESEFFECTIVELYONALLITS accountabilities. The Board determines the strategic objectives and policies of the Bank to deliver long-term value, providing overall strategic direction within an appropriate framework of rewards, incentives and controls. The Board delegates the responsibility for the day-to-day management of the bank to the #HIEF %XECUTIVE AND -ANAGING $IRECTOR AND HE IS RESPONSIBLE FOR ENSURING THAT THE BUSINESS is operating effectively. The Chief Executive chairs the Central Management Committee, which supports him in this role. The Central Management Committee is supported by a number of management committees, including the Market Risk Management Committee, the Credit Risk Management Committee, the Operational Risk Management Committee, the NPA and the NBA Management Committee.

The Audit Committee A four member Audit Committee, which includes Internal Auditor of the Bank as member secretary, under chairmanship of a non-executive director has been established. The Charter of the Audit Committee, which is periodically reviewed and revised by the board, clearly defines the terms of reference of the Audit Committee. The main objective of the Audit #OMMITTEE AS PER THE #HARTER IS TO ASSIST THE "OARD OF $IRECTORS TO EFFECTIVELY CARRY OUT ITS responsibilities relating to financial and other compliance affairs of the Bank. $URING THE REVIEW PERIOD SEVEN MEETINGS OF THE #OMMITTEE WERE HELD TO REVIEW THE VARIOUS matters connected with the internal control, systems and procedures and other aspects as REQUIREDINTERMSOF.EPAL2ASTRA"ANKSGUIDELINES


39

!DDITIONAL$ISCLOSURE ADDITIONAL INFORMATION REQUIRED TO BE FURNISHED AS PER SECTION 109 (4) OF THE COMPANIES ACT, 2063 (i) (ii)

(vi)

No shares have been forfeited by the Bank during the year. Main transactions carried out by the Bank during the financial year 2067/68, and any important change in the business of the Bank during the period: "ANK CARRIED OUT TRANSACTIONS AS PER OBJECTIVESFUNCTIONS DETAILED IN THE -EMORANDUM OF!SSOCIATION AND!RTICLES OF !SSOCIATIONOFTHE"ANKANDTHEHIGHLIGHTSOFTHEBUSINESSHAVEBEENDETAILEDINTHE$IRECTORS2EPORT4HEREWASNO significant change in the nature of the business performed by the Bank during the year. No information has been received by the Bank from its basic shareholders as per the provisions of the Companies Act, 2063. No shares were taken up by the Directors and key office-bearers of the Bank during the year nor were they found to have engaged in the share transactions of the Bank’s shares in contravention of the prevailing laws. No information was received from any Director or any of his/her close relatives about his/her personal interest in any agreement connected with the Bank signed during the financial year 2067/68. The Bank has not so far purchased any of its own shares.

(vii)

Particulars of the Total Management expenses of the financial year

(iii) (iv)

(v)

S. N. Particulars I 3TAFF%XPENSES II /THER/PERATING%XPENSES

Amount (in Rupees)

(viii) The Bank has an Audit Committee comprising of the following members S.N. I II III IV

Name of the Members -R-ANOJ+UMAR!GRAWAL 0UBLIC$IRECTOR -R-OHAN2AJ*OSHI 0ROFESSIONAL%XPERT$IRECTOR $IRECTOR/THERTHAN-ANAGING$IRECTORREPRESENTING3") -R3UDEEP+HANAL)NTERNAL!UDITOR

Position Held #HAIRPERSON -EMBER -EMBER -EMBER3ECRETARY

.5-"%2/&!5$)4#/--)44%%-%%4).'3(%,$$52).'3%6%. -%%4).'!,,/7!.#%30!)$4/4(%-%-"%23 $IRECTORSOTHERTHANTHOSEREPRESENTING3")2S $IRECTORREPRESENTING3").), ROLE PLAYED BY THE AUDIT COMMITTEE z Review of financial position of the bank in comparison to other banks. z 3UPERVISIONOFACTIVITIESOFTHE"ANKS)NTERNAL!UDIT$EPARTMENT z 2EVIEWOFTHE"ANKSINTERNALCONTROLSINDIFFERENTAREASOF"ANKSOPERATIONS z Finalization of Internal Audit Program. z Reviewing the implementation of recommendations made by the Statutory Auditors and NRB Inspection Team. z 2ECOMMENDINGTHEAPPOINTMENTOF3TATUTORY!UDITORSTOTHE!'- z %NSURINGTHATTHE&INANCIAL3TATEMENTSTOBESUBMITTEDTOTHE"OARDOF$IRECTORSARETRUEANDCORRECT z Reviewing reconciliation status of Nostro Accounts.

40


#ORPORATE'OVERNANCE

(ix)

(x)

(xi)

No Payment is due to the Bank from any Director, Managing Director, Executive Chief or the basic shareholders of the Bank or any of their close relatives, or from any firm, company or corporate body in which he is involved. The under noted amounts were paid as remunerations, allowances and facilities to the Directors, the Managing Director and other office bearers. !LLOWANCESFACILITIESTOTHE-EMBERSOFTHE"OARD A total of Rs. 1,588,000.00 was paid to the Board members as the Board Meeting fee for the different meetings DURING 2S PERMEETINGFORTHE#HAIRMANAND 2S FOROTHER$IRECTORS -ANAGING$IRECTOR/THER/FlCE"EARERS A .OREMUNERATIONWASPAIDTOTHE-ANAGING$IRECTOROTHER)NDIA"ASED/FlCERSDURINGTHEYEAR-ANAGEMENTTEAM SECONDEDBY3") EXCEPTTHEPAYMENTOF2S TOWARDSTHERENTOFTHEIRRESIDENTIALACCOMMODATIONAND medical expenses etc. Their salary and allowances are paid by SBI. B /THER/FlCE"EARERS!TOTALOF2S WASPAIDTOOTHEROFlCEBEARERSOFTHEBANKASTHEIRREMUNERATION allowances and facilities. Dividends yet to be collected by the shareholders $IVIDENDSPERTAININGTOTHEFOLLOWINGlNANCIALYEARSAREYETTOBECOLLECTEDBYTHESHAREHOLDERSASONND!SHADH Financial Year Grand Total

Amount (Rs.) 11,573,868.43

(xii)

No property was purchased or sold by the Bank during the year as stipulated under Section 141 of the Companies Act, 2063. (xiii) No transaction was held between the Bank and its associate companies during the year as stipulated under Section 175 of the Companies Act, 2006. Progress Report for the current year: The financial results for the 1st quarter of the current fiscal year have not been finalized as on the date of report writing. So we couldnot cover the progress of the 1st quarter of the current fiscal year. Readers are requested to refer to the financial results for lRSTQUARTEROF&9TOBEPUBLISHEDINNATIONALDAILYNEWSPAPERBYTH.OV

Mrs. Hasana Sharma Chairperson "3 Place: Kathmandu, Nepal


41

Three Columns Format (Tin-Mahale) of the Amendments in the Memorandum of Association of Nepal SBI Bank Ltd. 2ECOMMENDEDTOTHETH!NNUAL'ENERAL-EETING Existing Provision Clause 5.1 A B

C

Proposed Provision

Reason for the Amendment

4HEAUTHORIZEDCAPITALOFTHE"ANKSHALLBE 2S 2UPEES4HREE"ILLION WHICHSHALLBEDIVIDEDINTO 4HIRTY-ILLION ORDINARYSHARESOF2S 2UPEESONEHUNDRED EACH 4HEISSUEDCAPITALOFTHE"ANKSHALLBE2S 2S 2UPEES4WO"ILLION One Hundred Two Million Nine Hundred Sixty 3IX4HOUSAND/NE(UNDREDAND3IXTY&IVE 4HEPAID UPCAPITALOFTHE"ANKSHALLBE 2S 2UPEES4WO"ILLION One Hundred Two Million Nine Hundred Sixty 3IX4HOUSAND/NE(UNDREDAND3IXTY&IVE

4OAUGMENT"ANKS capital to meet its business requirements as directed by NRB.

Clause 4HEAUTHORIZEDCAPITALOFTHE"ANKSHALLBE2S 2UPEES4WO"ILLION WHICH SHALLBEDIVIDEDINTO 4WENTY-ILLION ORDINARYSHARESOF2S 2UPEESONEHUNDRED EACH 4HEISSUEDCAPITALOFTHE"ANKSHALLBE2S 2UPEES/NE"ILLION%IGHT Hundred Sixty Nine Million Three Hundred Three 4HOUSAND4WO(UNDREDAND&IFTY%IGHT 4HEPAID UPCAPITALOFTHE"ANKSHALLBE2S 2UPEES/NE"ILLION%IGHT Hundred Sixty Nine Million Three Hundred Three 4HOUSAND4WO(UNDREDAND&IFTY%IGHT

5.1 A

B

C

To issue bonus shares.

DISCLOSURE RELATED TO SUB RULE (1) OF RULE 22 OF SECURITIES REGISTRATION AND ISSUANCE REGULATION, 2065 1. 2. 3. 4.

Report of Board of Directors: Included in the Annual Report Report of the Auditors: Included in the Annual Report Audited financial Details: Included in the Annual Report Details relating to Legal Action A ,AW3UITSlLEDBYAGAINSTTHE"ANK z LAWSUITSHAVEBEENlLEDAGAINSTTHEBANKINRESPECTTOCREDIT.0!ANDGENERALMATTERS z LAWSUITSHAVEBEENlLEDBYTHEBANKAGAINSTDIFFERENTBORROWERSGUARANTORSFORRECOVERYOFDUES B ,AW3UITSlLEDBYAGAINSTTHEPROMOTERSDIRECTORSINVOLVINGCHARGEOFREGULATORYVIOLATIONSORCRIMINALOFFENCES.IL C #ASElLEDAGAINSTANYPROMOTERSDIRECTORSFORlNANCIALFRAUD.IL 5. Analysis of share transaction and progress of Organized Institution: a. Management view on share transactions of the Bank on Nepal Stock Exchange: As the Nepal Stock Exchange is operating under the supervision of Securities Board of Nepal, management has no comment on the same. b. Maximum, minimum and closing share price of organized institution including total transacted number of shares and transacted days during the Year 2067-68: Quarter (Months) First Quarter !SHWIN%ND Second Quarter 0OUSH%ND Third Quarter #HAITRA%ND Fourth Quarter !SHADH%ND

42


Maximum Minimum Closing Total Transacted Total Number of Share Price Share Price Share Price No. of Shares Trading Days

6. Problems and Challenges a. Problems and Challenges Faced: I )NTERNAL.! ii. External: )NCREASINGCOSTOFOPERATIONSFUND Competitive banking market. Liquidity Crunch. b. Strategy followed by the management in solving such problems and challenges: zBranch expansion drive initiated with a view to target low cost deposits and business growth through large network. zTargeting good quality loan customers. zRegular In-House training to enhance work performance. z'OODINDUSTRIALRELATIONS 7. Corporate Governance I 4HE"ANKHASBEENFULLYCOMPLYINGWITHTHEDIRECTIONS GUIDELINESISSUEDBY.2"REGARDING#ORPORATE'OVERNANCE II 2EGULAR#ENTRAL-ANAGEMENT#OMMITTEE-EETINGSTOREVIEWPROGRESSINVARIOUSAREASOFOPERATIONS III "ANKgS)NTERNAL!UDIT$EPARTMENTHASBEENSTRENGTHENED IV "OARDOF$IRECTORSANDITS#OMMITTEESgMEETINGONREGULARBASIS V !,#/AND2ISK-ANAGEMENT#OMMITTEE/PERATION #REDITAND-ARKET MEETINGSAREHELDREGULARLY 8. Declaration of Chairman/Chief Executive on truthfulness, correctness: I, as at the date, personally take responsibility on the truthfulness of the information and description presented in this report. Further, I declare that as far as I know and understand, the descriptions in this report are true, fair and complete and have not concealed any necessary particulars, notices and information to the investors to take informed decision.

-ANAGING$IRECTOR


43

44


-R-ANOJ+UMAR!GRAWAL $IRECTOR

Mr. Mohan Raj Joshi, 0ROFESSIONAL%XPERT$IRECTOR -R('#ONTRACTOR $IRECTOR -R2AJIV0AL3INGH $IRECTOR -R3+"HATTACHARYA $IRECTOR -R.+#HARI -ANAGING$IRECTOR

4.

-S(ASANA3HARMA Chairperson -R.IRANJAN+UMAR4IBREWALA $IRECTOR

S. No. Name of the Director

-"0ETROLUBE)NDUSTRIES0VT,TD 4RIPURESHWOR +ATHMANDU -"0ETROLUBE)NDUSTRIES0VT,TD 4RIPURESHWOR +ATHMANDU )NVESTMENT-ANAGEMENT Merchant Banker Ltd, Putalisadak, Kathmandu (YAT%NTERPRISES (YAT%NTERPRISES (YAT%NTERPRISES Hyat Enterprises

.IRANJAN+UMAR4IBREWALA

Name of the debtor (Individual/Firm/ Company)

0ROPRIETOR 0ROPRIETOR 0ROPRIETOR Proprietor

-ANAGING $IRECTOR -ANAGING $IRECTOR #HAIRMAN

Nature of Involvement

A. Disclosure under clause 8(b) of Nepal Rastra Bank’s Unified Directive No. 6, 2068

'LOBAL"ANK,TD 'LOBAL"ANK,TD .EPAL3")"ANK,TD Nepal SBI Bank Ltd.

.ABIL"ANK,TD "ANKOF +ATHMANDU,TD ,UMBINI"ANK,TD

,UMBINI"ANK,TD

Name of the creditor (Financial Institution)

/$ 42 /$ Adhoc TR

/$ 42AND34$, /$ /$

/$

Type of Credit Facility

Outstanding 4,167,200.00

Amount (Rs)

-

#HAITRA

Tenure of the Loan/Period of facility

.! .! .! .! .!

0ERSONALLOAN

.!

Remarks

B. Summary statement as stipulated under Point No. 9.3 of the Anti Money Laundering Directives issued to Banks and Financial Institutions dated 17.08.2009(2066/5/1) in regard to compliance of Anti-Money Laundering Act, Rules, Directives and order or policy. 4HE"ANKHASFORMULATEDIMPLEMENTEDACOMPREHENSIVEPOLICYUNDERTHESTYLEOFNepal SBI Bank Ltd. Policy and Procedural Guidelines on Know Your Customer (KYC), Anti Money Laundering (AML) and Combating of Financing of Terrorism (CFT) Measures-2011. 4HE "ANK HAS ESTABLISHED A DEDICATED +9#!-, #ELL HEADED BY -ANAGER ,AWAT#ORPORATE/FlCE4HE+9#!-,#OMPLIANCE#ELLLOOKSAFTEROVERALLMATTERS RELATINGTO+9#!-,COMPLIANCEISSUES INCLUDINGBUTNOTLIMITEDTOMONITORINGOFTRANSACTION filing of reports to the concerned bodies, employee trainings, etc. The Bank has designated +9##OMPLIANCE/FlCER-ONEY,AUNDERING2EPORTING/FlCER-,2/ INEACHOFITS"RANCH /FlCE"USINESS'ROUPTOLOOKAFTER+9#!-,ISSUESATTHERELATIONSHIPPOINTS $URINGTHEREVIEWYEAR +9#!-,#ELLCONDUCTEDTOTALTRAININGS4HE"ANKHASSUBMITTED requisite reports to the concerned regulating bodies well before the specified deadline and in the manner as prescribed in the relevant directives, laws, regulations etc. The Bank has maintained proper recording of the transactions as per the prevailing laws. Correspondent relationships have been managed keeping in view a risk-based approach. )NTERNAL!UDIT $EPARTMENT OF THE "ANK HAS CONDUCTED THE +9#!-,!UDIT OF THE "ANKgS $EPARTMENTS"RANCHES/FlCES%XTENSION#OUNTERSTOENSURETHATTHEPROVISIONSOFTHE!-, laws, rules and directives are fully complied with. 4HE!NNUAL2EPORTONTHESTATUSOFCOMPLIANCEOF+9#!-,LAWS RULES DIRECTIVES ORDER ETC HASBEENSUBMITTEDTOTHE&INANCIAL)NFORMATION5NITINCOMPLIANCEWITHPOINT.OOFTHE !-,$IRECTIVESOF&)5 Observations made by the auditors and Nepal Rastra Bank during their respective audits have been taken into account and timely rectification is made, wherever necessary.


45

Risk Management Primary goal of our risk management framework is to ensure that outcomes of risk taking activities are predictable and CONSISTENTWITHTHE"ANKSOBJECTIVESANDRISKTOLERANCELEVELS and that there is an appropriate balance between risk and return in order to maximize return to shareholders. We take a holistic approach and have been engaged in extensive and detailed evaluation and assessment of its risk management framework in all areas of banking activities.

Bank through Market Risk limits, stop loss limits, etc., at a more granular level. It is involved in identification, assessment, monitoring, reporting and analysis of Market risks profile associated with Treasury Operations.

Operational risk can be defined as a risk arising from EXECUTIONOFACOMPANYSBUSINESSFUNCTIONSANDARISESFROM the people, systems and processes through which a company operates. It also includes other categories such as fraud risks, Credit risk is the risk of financial loss the Bank may face as a legal risks, physical or environmental risks. The Operational Risk result of a borrower or a counterparty not meeting its obligations Management Committee reviews the risk profile, anticipates INLINEWITHTHEORIGINALCONTRACT3INCE MAJORITYOFTHEBANKS changes and threats and concurs on areas of highest priority assets is in the form of loans and advances, management of and related mitigation strategies and ensures that adequate credit risk has therefore become the most crucial task. The resources are being assigned to mitigate risks as needed. Credit Risk Management Committee, thus, mainly focuses on monitoring of Credit Risk on a Bank wide basis and ensuring Interest Rate Risk of the overall balance sheet is measured COMPLIANCE AND ON IMPLEMENTATION OF #REDIT 2ISK 0OLICY through the use of re-pricing gap analysis and duration analysis. Strategy approved by the Board and ensures incorporation We prepare interest rate risk reports on a periodic basis which OF2EGULATORYCOMPLIANCEIN"ANKS0OLICIESAND'UIDELINESIN are submitted to Nepal Rastra Bank. Interest rate risk is further regard to Credit Risk. monitored through interest rate risk limits approved by the Asset ,IABILITY-ANAGEMENT#OMMITTEE!,#/ Market Risk as defined by Market Risk Management policy of the bank is the risk of probable loss due to adverse changes in Liquidity Risk We maintain diverse sources of liquidity to THEMARKETVALUEOFTHE"ANKSASSETSANDLIABILITIES4HE-ARKET facilitate flexibility in meeting funding requirements. Incremental Risk Management Committee has the overall responsibility operations in the domestic market are principally funded by TO MONITOR MANAGE VARIOUS MARKET RISK EXPOSURES OF THE accepting deposits from retail and corporate depositors.

46


Less


47

3HAREHOLDERS Information 4HEORDINARYSHARESOF.EPAL3")"ANK,IMITEDARELISTEDONTHE.EPAL3TOCK%XCHANGE4HESTOCKEXCHANGESYMBOLOF.EPAL3")SSHAREIS3") Two Institutional promoters hold 70 percent of total shares in the Bank and rest is distributed among nearly 18,187 general shareholders. State "ANKOF)NDIAHOLDSOFTHETOTALOWNERSHIPWHEREAS%MPLOYEE0ROVIDENTFUNDCONTINUETOHOLDSHARES

3HAREHOLDINGBY-EMBERSOF"/$AND#ENTRAL-ANAGEMENT4EAM !SON!SHADHEND Name -R-ANOJ+UMAR!GRAWAL -R.IRANJAN+UMAR4IBREWALA -R-OHAN2AJ*OSHI -R4ULSI2AM'AUTAM

Position $IRECTOR $IRECTOR 0ROFESSIONAL%XPERT$IRECTOR #HIEF#REDIT/FlCER

No. of Shares

Note: Apart from these, no other member of the Board and the Management team holds shares of the Bank.

48


$ISTRIBUTIONOF3HAREHOLDERS!SHADHEND By No. of Shares

By No. of Shareholders

Over -10,000

5,001-10,000

1001-5000

501-1000

101-500

5PTO

Market Price Movement 900

Year 2010-11 NSBL‘s Share Price Nepse Index

800 700 600 500 400 300 200 100 0 Jul

Aug

Sep

Oct

Nov

$EC

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct


49

3IX9EARS Financial Highlights in Rs. Lakhs Ashadh End Profitability Interest Income Interest Expenditure Fee, Commission and Exchange income Other income Operating Expenses Operating Profit Profit Before tax Profit After tax Shareholders Fund Total Shareholders funds Share Capital Reserves Liabilities $EPOSIT!CCOUNTS $EBENTURE Bills Payable Other liabilities Assets Advances Investments Liquid Assets Net Fixed Assets Other Assets Total Assets

50


fy-05/06 2062/63

fy-06/07 2063/64

fy -07/08 2064/65

fy-08/09 2065/66

fy - 09/10 2066/67

fy-10/11 2067/68

7,087.19 3,347.70

8,311.17 4,122.62

9,705.13 4,549.18

14,604.46 8,247.00

22,697.04 14,436.94

31,042.32 20,960.38

838.14 71.37 992.14 1,684.89 1,997.64 1,170.02

1,020.55 126.01 1,201.12 3,007.90 3,445.90 2,549.09

1,029.07 195.57 1,523.80 3,533.25 3,480.34 2,477.71

1,401.31 527.90 2,239.66 4,423.66 4,430.32 3,163.73

2,020.20 787.97 3,438.50 5,702.90 5,383.62 3,917.42

3,176.97 951.73 4,450.73 6,742.52 6,534.69 4,645.65

9,823.74 6,402.36 3,421.38

11,632.91 6,477.98 5,154.92

14,146.45 8,745.28 5,401.17

17,126.07 12,243.39 4,882.68

24,505.54 18,613.24 5,892.30

28,792.93 21,029.66 7,763.27

462.39 488.56 751.15 629.47 723.68 806.85 8,051.86 10,437.68 17,622.91 2,336.64 4,283.33 5,128.12 76,267.36 36,107.75 14,813.58 667.12 2,502.57 130,358.39

94,604.51 121,136.98 26,594.53 30,888.87 14,726.90 16,469.73 972.19 1,202.22 2,113.88 2,176.65 139,012.01 171,874.46

151,317.48 132,861.82 11,764.40 2,535.81 3,184.89 301,664.40

174,805.48 163,056.33 34,412.61 4,182.45 4,019.92 380,476.79

213,657.71 189,110.22 48,778.26 4,170.03 5,166.13 460,882.34

3HAREHOLDERS)NFORMATION

Business Ratio and Information Ashadh End

fy - 09/10 2066/67

fy-10/11 2067/68

Ratios 2ETURNON.ET&IXED!SSETS2/! 7EIGHTED!VERAGE)NTEREST2ATE3PREAD 4OTAL/PERATING%XPENSES4OTAL!SSETS 4OTAL#REDIT$EPOSIT 'ROSS0ROlT2ATIO 2ETURNON#APITAL%MPLOYED $EBT%QUITY2ATIO 3TATUTORY,IQUIDITY2ESERVE .ET)NT)NCOME7ORKING&UND4OTAL!SSETS 2ETURNON!VERAGE4OTAL!SSETS 'ROSS#OST)NCOME2ATIO Profit per employees #APITAL!DEQUACY2ATIO /PERATING0ROlTASAPERCENTAGEOFWORKINGFUND4OTAL!SSETS #ASH2ESERVE2ATIO 'ROSS.0!TO'ROSS!DVANCES

Rs. 842,456.17

Share information Earnings Per Share Number of Ordinary Shares 0RICE%ARNINGSRATIO0% #ASH$IVIDENDON3HARE#APITAL $IVIDEND)NCLUDING"ONUS ON3HARE#APITAL $IVIDEND#OVERAGE2ATIO Book Value Per Share

Rs. 23.69 Rs. 24.85 16,536,239 18,693,033 Rs. 147.61 Rs. 153.51

Other information Number of Employees Number of Branches Number of ATMs

465 43 50

Rs. 919,930.69

505 50 68

7 Branches and 6 ATMs were added after Ashadh end 2068.


51

Is More

52


Financial Statements


53

BALANCE SHEET !SONND!SHADH*ULY S.No. 1. 2. 4. 6. 8. 9.

Capital & Liabilities Share Capital Reserves and Funds $EBENTURES"ONDS Borrowings $EPOSITS Bills Payable 0ROPOSED$IVIDEND Income Tax Liabilities Other Liabilities Total Capital and Liabilities

Schedule 1 2 4 6

S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9.

Assets Cash Balance Balance with Nepal Rastra Bank "ALANCEWITH"ANKS&INANCIAL)NSTITUTION Money at Call and Short Notice Investment Loans, Advances and Bills Purchase Fixed Assets Non Banking Assets Other Assets Total Assets

Schedule 8 9 10 11 12 13 14 15 16

7

Current Year Rs. 2,102,966,165 776,326,985 80,685,337 419,347,031 46,088,233,975

Previous Year Rs. 1,861,324,239 589,229,831 72,368,229 345,252,820 38,047,679,465

Current Year Rs. 1,007,688,499 2,330,927,217 1,539,210,142 18,911,021,520 21,365,771,129 417,002,530 516,612,938 46,088,233,975

Previous Year Rs. 815,679,624 1,842,802,239 782,779,614 16,305,632,815 17,480,548,194 418,244,760 401,992,219 38,047,679,465

Contingent Liabilities $IRECTORS$ECLARATION 3TATEMENTOF#APITAL&UND 3TATEMENTOF#REDIT2ISK #REDIT2ISK-ITIGATION 2ISK7EIGHTEDEXPOSUREFOROPERATIONALRISK 2ISK7EIGHTEDEXPOSUREFORMARKETRISK Principal Indicators Principal Accounting Policies Notes to Accounts

Schedule 17 3CHEDULE 3CHEDULE! 3CHEDULE" 3CHEDULE# 3CHEDULE$ 3CHEDULE% Schedule 31 Schedule 32 Schedule 33

Schedules 1 to 17 form integral part of the Balance Sheet.

____________________ -!NAND Chief Operating Officer ____________________ 203INGH $IRECTOR

____________________ .+#HARI -ANAGING$IRECTOR

____________________ (3HARMA Chairperson

____________________ ('#ONTRACTOR $IRECTOR

____________________ 3+"HATTACHARYYA $IRECTOR

____________________ -+!GRAWAL $IRECTOR

____________________ .+4IBREWALA $IRECTOR

As per our attached report of even date ____________________ -2*OSHI $IRECTOR

54


________________________ 0,3HRESTHA &#! 0ARTNER 0,3HRESTHA#O Chartered Accountants

02/&)4!.$,/33!##/5.4 &ORTHEPERIODST3HRAWANTOND!SHADHTHJULYTOTHJULY S.No. 1. 2. 4. 5. 6. 7. 8.

9. 11. 13. 14.

Particulars Interest Income Interest Expenses Net Interest Income #OMMISSIONAND$ISCOUNT Other Operating Incomes Exchange Fluctuation Income Total Operating Income. Staff Expenses Other Operating Expenses Exchange Fluctuation Loss Operating Profit before provision for possible loss Provision for Possible Losses Operating Profit .ON/PERATING)NCOME,OSS Provision for Possible Loss Written Back Profit from Regular Operations 0ROlT,OSSFROM%XTRA /RDINARY!CTIVITIES Net profit after considering all activities Provision for Staff Bonus Provision for Income Tax

#URRENT9EARS

0REVIOUS9EARS $EFERRED4AX Net Profit/Loss

Schedule 18 19 21 22 23 24 22

25 27

Current Year Rs. 3,104,231,807 2,096,038,379 1,008,193,428 95,172,658 70,532,720 1,421,063,570 255,430,285 445,072,722 -

Previous Year Rs. 2,269,704,291 1,443,693,573 826,010,718 78,796,662 70,328,247 1,106,827,776 130,336,536 343,850,266 -

720,560,563 46,308,152 674,252,411 179,122,158 856,488,334 718,815,706 65,346,882 188,903,825 464,564,999

632,640,974 62,350,544 570,290,430 56,621,276 629,464,598 592,198,598 53,836,236 146,620,243 391,742,119

Schedule No. 18 to 28 form are integral part of the Profit and Loss Account.






____________________ -+!GRAWAL $IRECTOR





55

02/&)4!.$,/33!002/02)!4)/.!##/5.4 &ORTHEPERIODST3HRAWANTOND!SHADHTH*ULYTOTH*ULY S.No. 1. 3. 4.

1. 4. 7. 9. 10. 11. 12. 13. 14. 17.

Particulars INCOME Accumulated Profit up to Last Year #URRENT9EARS0ROlT Exchange Fluctuation Reserve Capital Adjustment Reserve up to Previous Year Total EXPENSES Accumulated Loss up to Last Year #URRENT9EARS,OSS 'ENERAL2ESERVE Contingent Reserve )NSTITUTIONAL$EVELOPMENT2ESERVE $IVIDEND%QUALIZATION2ESERVE Staff Related Reserve 0ROPOSED$IVIDEND Proposed issue of Bonus Shares Special Reserve Exchange Fluctuation Reserve Fund Capital Redemption Reserve Fund Capital Adjustment Reserve Investment Adjustment Reserve .3",$EBENTURE2EDEMPTION2ESERVE $EFERRED4AX2ESERVE Total Accumulated Profit/(Loss)


Schedule

This Year Rs.

4,249,307

3,848,810

50,000,000 518,814,306

65,000,000 460,590,929

233,662,907 79,009 30,000,000 24,572,100 515,962,774 2,851,532

207,700,362 50,000,000 641,720 456,341,622 4,249,307

Previous Year Rs.





____________________ -+!GRAWAL $IRECTOR



56




57

641,720

-

.+4IBREWALA $IRECTOR

('#ONTRACTOR $IRECTOR $IRECTOR _____________________________ &#! 0,3HRESTHA 0ARTNER 0,3HRESTHA Co. Chartered Accountants

Chairperson ______________________ 203INGH $IRECTOR

-ANAGING$IRECTOR ______________________ 3+"HATTACHARYYA $IRECTOR

Chief Operating Officer

______________________

-2*OSHI

$IRECTOR

As per our attached report of even date

______________________ ______________________ -+!GRAWAL

39,683,853

______________________

10,279,125

(3HARMA

233,662,907

______________________

25,213,820

- 464,564,999 49,660,225 7,979,019 142,857,145 2,879,293,150

114,285,716 2,450,554,070

.+#HARI

30,000,000

26,984,687

______________________

10,200,116

Proposed Exchange Deferred Tax Other Total Amount Bonus Equilisation Reserves Reserve Adjustment Shares Fund and Funds Rs Rs Rs Rs Rs 207,700,362 10,200,116 26,984,687 114,285,716 2,450,554,070

49,660,225

-

Investment Adjustment Reserve Rs Rs 641,720

Share Premium

475,781,285

49,660,225

50,000,000

Capital Adjustment Reserve Rs 50,000,000

382,868,285

Rs 382,868,285

General Reserve

-!NANDA

7,979,019 1,869,303,258 2,851,532

-

- 464,564,999

4,249,307

Rs 1,653,623,877

1,861,324,239

Rs 4,249,307

Accumulated Profit/Loss

Share Capital

______________________

Opening Balance at Shrawan 2067 !DJUSTMENTS$EFERRED4AX Adjustments: Proposed Bonus Share of previous year treated as 3HARE#APITALASPER.2"$IRECTIVE Restated Balance as on Shrawan 2067 Adjustments Net profit for the period #APITAL!DJUSTMENT2ESERVE 4RANSFERTO'ENERAL2ESERVE #APITAL!DJUSTMENT2ESERVE 0ROPOSED$IVIDEND 0ROPOSED"ONUS3HARES Share Premium %XCHANGE%QUALIZATION&UND 5NSUBSCRIBED3HARES)SSUED Capital Redemption Reserve Bonus Share Issued $EBENTURE2EDEMPTION2ESERVE $EFERRED4AX2ESERVE )NVESTMENT!DJUSTMENT2ESERVE Right Share issue Closing Balance at Asadh 2068

Particulars

&)3#!,9%!2

34!4%-%.4/&#(!.'%3).%15)49

CASH FLOW STATEMENT &ORTHEPERIODST3HRAWANTOND!SHADHTH*ULYTOTH*ULY S.No. (a) 1.

2.

(b) 3. 5. (c) (d)

(e) (f) (g)

Particulars Cash Flow from Operating Activities Cash Received 1.1 Interest Income #OMMISSIONAND$ISCOUNT)NCOME 1.3 Income from Foreign Exchange transaction 1.4 Recovery of loan written off 1.5 Other Incomes Cash Payment 2.1 Interest Expenses 2.2 Staff Expenses 2.3 Office Overhead Expenses 2.4 Income Tax Paid 2.5 Other Expenses Cash Flow before changes in Working Capital (Increase) /Decrease of Current Assets )NCREASE $ECREASEIN-ONEYAT#ALLAND3HORT.OTICE )NCREASE $ECREASEINSHORTTERM)NVESTMENT )NCREASE $ECREASEIN,OANS !DVANCESAND"ILLS0URCHASE )NCREASE $ECREASEIN/THER!SSETS Increase /(Decrease) of Current Liabilities )NCREASE$ECREASE IN$EPOSITS )NCREASE$ECREASE IN#ERTIlCATESOF$EPOSITS )NCREASE$ECREASE IN3HORT4ERM"ORROWINGS )NCREASE$ECREASE IN/THER,IABILITIES Cash Flow from Investment Activities )NCREASE $ECREASEIN,ONG TERM)NVESTMENT )NCREASE $ECREASEIN&IXED!SSETS Interest income from Long term Investment $IVIDEND)NCOME Others Cash Flow from Financing Activities )NCREASE$ECREASE IN,ONGTERM"ORROWINGS"ONDS $EBENTURESETC )NCREASE$ECREASE IN3HARE#APITAL )NCREASE$ECREASE IN/THER,IABILITIES )NCREASE$ECREASE IN2ElNANCEFACILITIESRECEIVEDFROM.2" Income/Loss from change in exchange rate in Cash & bank balances Current Year’s Cash Flow from All Activities Opening Balance of Cash and Bank Balances Closing Balance of Cash and Bank Balances

This Year Rs. 1,506,835,670 3,472,163,522 3,055,222,675 70,216,686 99,559,397 2,877,318,098 2,082,963,604 207,930,584 344,587,674 188,000,000 53,836,236 594,845,424 (6,546,251,810) 7,458,242,056 (128,226,567) 57,639,244 316,034 1,436,564,381 3,441,261,477 4,877,825,858

Previous Year Rs. 1,884,344,926 2,533,379,086 2,242,447,613 73,029,593 7,082,000 79,127,731 2,019,645,949 1,438,901,798 120,367,410 258,751,056 157,322,526 44,303,159 513,733,137 (5,457,606,767) 6,828,218,556 (253,807,204) 636,985,263 (2,701,346) 2,264,821,639 1,176,439,838 3,441,261,477

______________________ -!NANDA Chief Operating Officer

______________________ .+#HARI -ANAGING$IRECTOR

______________________ (3HARMA Chairperson

______________________ -+!GRAWAL $IRECTOR

______________________ -2*OSHI $IRECTOR

_____________________ ('#ONTRACTOR $IRECTOR

______________________ .+4IBREWALA $IRECTOR

______________________ 3+"HATTACHARYYA $IRECTOR

______________________ 203INGH $IRECTOR

______________________ &#! 0,3HRESTHA 0ARTNER 0,3HRESTHA#O#HARTERED!CCOUNTANTS

As per our attached report of even date

58


Schedule 1

3(!2%#!0)4!,!.$/7.%23()0

%NDOF!SHADHTH*ULY S.No. 1. 1.1 1.2 1.3 1.4 1.5 1.6

Particulars Share Capital Authorized Capital A /RDINARY3HARESOF2SEACH B xxx.ON 2EDEEMABLE0REFERENCESHARESOF2SxxEACH C xxx2EDEEMABLE0REFERENCE3HARESOF2SxxEACH Issued Capital A /RDINARY3HARESOF2SEACH B xxx.ON 2EDEEMABLE0REFERENCESHARESOF2SxxEACH C xxx2EDEEMABLE0REFERENCE3HARESOF2SxxEACH Paid Up Capital A /RDINARY3HARESOF2SEACH B xxx.ON 2EDEEMABLE0REFERENCESHARESOF2SxxEACH C xxx2EDEEMABLE0REFERENCE3HARESOF2SxxEACH Proposed Bonus Share Calls in Advance Total Amount (1.3+1.4+1.5)

This Year Rs. Previous Year Rs. 2,000,000,000 1,869,303,258 1,869,303,258 233,662,907 2,102,966,165

2,000,000,000 1,661,602,896 1,653,623,877 207,700,362 1,861,324,239

!SARESULTOFISSUEOFBONUSSHARESOFDECLAREDBYTHETH!'-ANDISSUEOFRIGHTSHARES DECLAREDBYTHETH!'-&9 ANDALLOTTEDDURINGTHE&9 TOTALKITTAOFBONUSANDFORRIGHTISSUE SHARESHAVECOMEINTO fraction figures. In the absence of clear legal provisions permitting issuance of Share Certificate for such fraction entitlements of the shareholders, WEHAVECREDITEDSUCHFRACTIONSENTITLEMENTINADEMATERIALIZED$E MAT FORMWITHOUTISSUINGPHYSICAL3HARE#ERTIlCATE3UCHFRACTIONENTITLEMENT of the shareholders is also accounted under share capital.

Share Ownership Details 1. Domestic Ownership .EPAL'OVERNMENT 1.2 “A” Class Licensed Institutions 1.3 Other Licensed Institutions /THER%NTITIES 'ENERAL0UBLIC 1.6 Others 2. Foreign Ownership Total

% 44.95% 55.05% 100.00%

This Year Previous Year Rs. Share Capital % Share Capital 840,315,132 44.72% 739,457,877 1,028,988,126 55.28% 914,166,000 1,869,303,258 100.00% 1,653,623,877

Note : .ONEOFTHE'ENERAL0UBLIC3HAREHOLDERSHOLDMORETHANOFTHESHARESOFTHE"ANKINDIVIDUALLY h/THER%NTITIESvREPORTEDIS+ARMACHARI3ANCHAYA+OSH 4HEh&OREIGN/WNERSHIPvREPORTEDABOVEIS3TATE"ANKOF)NDIA


59

Schedule 2

2%3%26%3!.$&5.$3 %NDOF!SHADHTH*ULY Particulars 'ENERAL2ESERVE Capital Reserve Capital Redemption Reserve Capital Adjustment Reserve Other Reserves and Funds 5.1 Contingent Reserve )NSTITUTION$EVELOPMENT2ESERVE $IVIDEND%QUALIZATION2ESERVE 5.4 Special Reserve 5.5 Assets Revaluation Reserve $EFERRED4AX2ESERVE 5.7 Other Free Reserves 5.8 Investment Adjustment Reserve /THER2ESERVES$EBENTURE2ESERVES 5.9 Share Premium Account !CCUMULATED0ROlT,OSS 7. Exchange Equalization Fund Total 776,326,985 2. 3. 4. 5.

This Year Rs. 30,000,000 257,415,043 25,213,820 49,660,225 10,279,125 589,229,831

Previous Year Rs. 50,000,000 141,912,123 641,720 10,200,116

Schedule 3

$%"%.452%3!.$"/.$3 %NDOF!SHADHTH*ULY Particulars .EPAL3")"ANK$EBENTURES OF2S EACH5NSECURED Issued on 16.07.2006 and maturing on 15.07.2013 /UTSTANDINGBALANCEOF2EDEMPTION 2ESERVE2S Total

This Year Rs. 200,000,000

Previous Year Rs. 200,000,000 Schedule 4

"/22/7).'3 %NDOF!SHADHTH*ULY Particulars A. Local .EPAL'OVERNMENT 2. Nepal Rastra Bank 3. Repo Obligations 4. Inter Bank and Financial institutions 5. Other Organised Institutions 6. Others Total B. Foreign 1. Banks 2. Others Total Total (A+B)

60


This Year Rs. -

Previous Year Rs. -

Schedule 5

$%0/3)43

%NDOF!SHADHTH*ULY Particulars 1. Non-Interest bearing accounts A. Current Deposits 1. Local Currency .EPAL'OVERNMENT 1.2 “A” Class Licensed Institutions 1.3 Other Licensed Institutions 1.4 Other Organized Institutions 1.5 Individuals 1.6 Others 2. Foreign Currency .EPAL'OVERNMENT 2.2 “A” Class Licensed Institutions 2.3 Other Licensed Institutions 2.4 Other Organized Institutions 2.5 Individuals 2.6 Others B. Margin Deposits %MPLOYEES'UARANTEE 'UARANTEE-ARGIN 3. Margin on Letter of Credit C. Others 1. Local Currency 1.1 Financial Institutions 1.2 Other Organized Institutions 1.3 Individual 2. Foreign Currency 2.1 Financial Institutions 2.2 Other Organized Institutions 2.3 Individual Total of Non-Interest Bearing Accounts

This Year Rs.

Previous Year Rs.

4,259,415,723 4,156,210,911 52,579 15,208,398 4,027,893,352 98,586,847 103,204,811

2,861,877,958 2,520,409,399 30,384 12,618,413 1,381,994,849 1,125,238,363 341,468,559

103,204,811 146,158,747 98,694,303 4,405,574,469

341,468,559 123,087,392 93,582,177 2,984,965,350


61

Schedule 5A

$%0/3)43 %NDOF!SHADHTH*ULY Particulars 2. Interest Bearing Accounts A. Saving Deposits 1. Local Currency 1.1 Organized Institutions 1.2 Individual 1.3 Others 2. Foreign Currency 2.1 Organized Institutions 2.2 Individual 2.3 Others B. Fixed Deposits 1. Local Currency 1.1 Organized Institutions 1.2 Individual 1.3 Others 2. Foreign Currency 2.1 Organized Institutions 2.2 Individual 2.3 Others C. Call Deposits 1. Local Currency 1.1 “A” Class Licensed Institutions 1.2 Other Licensed Institutions 1.3 Other Organized Institutions 1.4 Individual 1.5 Others 2. Foreign Currency 2.1 “A” Class Licensed Institutions 2.2 Other Licensed Institutions 2.3 Other Organized Institutions 2.4 Individual 2.5 Others D. Certificate of Deposit 1. Organized Institutions 2. Individual 3. Others Total of Interest Bearing Accounts Total Deposit (1+2)

This Year Rs.

Previous Year Rs.

8,079,243,659 7,961,340,989 109,198,972 7,852,142,017 117,902,670 94,728,586 23,174,084 28,013,550,392 14,780,482,661 9,141,818,577 5,638,664,084 13,233,067,731 13,233,067,731

7,348,969,807 7,259,969,075 147,410,268 7,112,558,807 89,000,732 79,988,138 9,012,594 22,148,948,329 10,408,484,131 5,190,040,746 5,218,443,385 11,740,464,198 11,740,464,198

1,917,074,774 1,860,003,849 47,897,493 624,589,093 1,187,517,263 57,070,925 57,070,925

2,413,540,715 2,386,366,289 218,391 161,117,700 979,287,466 1,245,742,732 27,174,426 27,174,426

38,009,868,825 42,415,443,294

31,911,458,851 34,896,424,201

Schedule 6

BILLS PAYABLE %NDOF!SHADHTH*ULY Particulars 1. Local Currency 2. Foreign Currency Total

62


This Year Rs. 62,624,968 18,060,369 80,685,337

Previous Year Rs. 54,331,627 18,036,602 72,368,229

Schedule 7

OTHER LIABILITIES %NDOF!SHADHTH*ULY

2. 3. 4. 8. 9. 12.

Particulars 0ENSION'RATUITY,EAVE&UND Employee Provident Fund Employees Welfare Fund Provision for Staff Bonus )NTEREST0AYABLEON$EPOSITS )NTEREST0AYABLEON"ORROWINGS$EBENTURE 5NEARNED$ISCOUNTAND#OMMISSION Sundry Creditors Branch Account $EFERRED4AXLIABILITY $IVIDEND0AYABLE Others )NTEREST3USPENSE,OAN Total

This Year Rs. 65,346,882 32,032,747 171,977,352 419,347,031

Previous Year Rs. 53,836,236 99,643,635 102,721,205 345,252,820

Schedule 8

CASH BALANCE %NDOF!SHADHTH*ULY 2.

Particulars ,OCAL#URRENCY)NCLUDING#OINS Foreign Currency Total

This Year Rs. 29,221,862 1,007,688,499

Previous Year Rs. 18,804,627 815,679,624

Schedule 9

BALANCE WITH NEPAL RASTRA BANK %NDOF!SHADHTH*ULY Particulars 1.

Nepal Rastra Bank a. Current Account b. Other Account

Local Currency 2,318,372,878 2,318,372,878 -

INR -

Foreign Currency Convertible Total 12,554,339 12,554,339 12,554,339 12,554,339 -

This Year Rs. 2,330,927,217 2,330,927,217 -

Previous Year Rs. 1,842,802,239 1,842,802,239 -


63

64


Local Licensed Institutions a. Current Account b. Other Account Foreign Banks a. Current Account b. Other Account Total

55,257,129 55,257,129 55,257,129

Local Currency

1,315,678,442 1,315,678,442 1,315,678,442

IRS.

1. 2.

Particulars Local Currency Foreign Currency TOTAL

%NDOF!SHADH

-/.%9!4#!,,!.$3(/24./4)#%

Note: Total balance for which the confirmations are received from respective licensed institutions Rs. 2,426,661,555

2.

1.

Particulars

%NDOF!SHADHTH*ULY

"!,!.#%7)4("!.+3&).!.#)!,).34)454)/.3 Foreign Currency Convertible FCY 4,437,260 4,437,260 163,837,311 163,837,311 168,274,571 Total 4,437,260 4,437,260 1,479,515,753 1,479,515,753 1,483,953,013

This Year Rs. -

59,694,389 59,694,389 1,479,515,753 1,479,515,753 1,539,210,142

This Year Rs.

-

Previous Year Rs.

Schedule 11

56,919,797 56,919,797 725,859,817 725,859,817 782,779,614

Previous Year Rs.

Schedule 10


65

4. 5. 6. 7. 8. 10.

.EPAL'OVERNMENT4REASURY"ILLS .EPAL'OVERNMENT3AVING"ONDS .EPAL'OVERNMENT/THERSECURITIES Nepal Rastra Bank Bonds Foreign Securities Local Licensed Institutions Foreign Banks Corporate Shares #ORPORATE"ONDSAND$EBENTURES Other Investments Total Investment Provision Net Investment

Particulars

%NDOF!SHADHTH*ULY

INVESTMENTS

Trading

-

Other

13,296,532,500 39,646,500

18,911,021,520 18,911,021,520

Purpose

13,296,532,500 39,646,500

18,911,021,520 18,911,021,520

This Year Rs.

50,500,000 11,904,794,000 37,021,500

16,305,632,815 16,305,632,815

Previous Year Rs.

Schedule 12

66


Provision for Loss 5PTOPREVIOUSYEAR !DDITIONS7RITEBACKTHISYEAR Total Provision Net Investment

-

-

353,000 882,500 2,500,000 1,200,000 39,646,500

-

882,640 176,528 8,943,000

748,000 8,943,000

39,646,500

Market Price Rs. -

Cost Price Rs. 39,646,500 5,195,000 13,700,000 3,000,000 500,000 2,625,000

-

-

-

-

-

Provision Amount Rs. -

39,646,500

39,646,500

748,000 8,943,000 353,000 882,500 2,500,000 1,200,000

This Year Rs. 39,646,500 5,195,000 13,700,000 3,000,000 500,000 2,625,000

Note: (IMALAYAN$ISTILLERYHASNOTDECLAREDANYDIVIDENDTILLDATEANDHASBEENLISTEDIN.EPAL3TOCK%XCHANGE,TD CASHDIVIDENDOF2S HASBEENRECEIVEDFROM2URAL-ICRO&INANCE$EVELOPMENT#ENTRE,TDDURINGTHECURRENT&9FORTHE&9 4HEADDITIONALINVESTMENTOF2S WASMADEIN-ADHYA0ASCHIMANCHAL'RAMEEN"IKASH"ANK,TDDURINGTHE&9 #REDIT)NFORMATION"UREAU,TDHASISSUED"ONUS3HAREDURINGTHE&9FORTHE&9ANDISSUED"ONUS3HAREDURINGTHE&9FORTHE&9

3.

1.

Particulalrs Investment in Shares 2URAL-ICRO lNANCE$EVELOPMENT#ENTER,TD2-$# 51,950 Ordinary Shares of Rs. 100 fully paid up 137,000 Right Shares of Rs. 100 fully paid up -ADHYA0ASCHIMANCHAL'RAMEEN"IKASH"ANK,TD 30,000 Ordinary Shares of Rs. 100 fully paid up 5,000 Shares of Rs. 100 Additional Investment 26,250 Shares of Rs. 100 Additional Investment 1.3 Alliance Insurance Co. Ltd. 7,480 Ordinary Shares of Rs. 100 fully paid up 1496 Bonus Shares (IMALAYAN$ISTILLERY,TD 89,430 Ordinary Shares of Rs. 100 fully paid up 1.5 Credit Information Center Ltd. 3,530 Ordinary Shares of Rs. 100 fully paid up 8825 Right Shares of Rs 100 fully paid up 13061 Bonus Shares 1.6 Nepal Clearing House 1.7 National Banking Training Institute 12000 Shares of Rs. 100 fully paid up 2. Investment in Debentures and Bonds xxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx Total Investment

%NDOF!SHADHTH*ULY

).6%34-%.4).3(!2%3 $%"%.452%3!.$"/.$3

37,021,500

37,021,500

8,943,000 353,000 882,500 2,500,000 1,200,000

748,000 -

3,000,000 500,000

5,195,000 13,700,000

Previous Year Rs. 37,021,500

3CHEDULE!


67

.EPAL'OVERNMENT4REASURY"ILLS .EPAL'OVERNMENT3AVING"ONDS .EPAL'OVERNMENT/THERSECURITIES Nepal Rastra Bank Bonds Foreign Securities 3HARESOF$OMESTIC,ICENSED)NSTITUTION $EBENTUREAND"OND$OMESTIC,ICENSED)NSTITUTION 3HARES $EBENTURESAND"ONDOF$OMESTIC%NTITY &OREIGN"ANK)NVESTMENT0LACEMENT Interbank Lending Other Investments Total Investment

4. 5.

.EPAL'OVERNMENT4REASURY"ILLS .EPAL'OVERNMENT3AVING"ONDS .EPAL'OVERNMENT/THERSECURITIES Nepal Rastra Bank Bonds Foreign Securities 3HARESOF$OMESTIC,ICENSED)NSTITUTION $EBENTUREAND"OND$OMESTIC,ICENSED)NSTITUTION 3HARES $EBENTURESAND"ONDOF$OMESTIC%NTITY &OREIGN"ANK)NVESTMENT0LACEMENT /THER)NVESTMENTS)NTER"ANK,ENDING Total Investment

Particulars

%NDOF!SHADHTH*ULY

"53).%33).6%34-%.4(ELDTO-ATURITY

4. 5. 10. 11.

Particulars

%NDOF!SHADHTH*ULY

"53).%33).6%34-%.4(ELDFOR4RADING

This Year. Profit /Loss (b-a) Rs -

Previous Year Profit /Loss Rs. -

Impairment This Year. Previous Year This Year (c) Rs. Profit /Loss (a-b-c) Rs Profit /Loss Rs. -

Current Market Price (b) Rs. -

Impairment Till Date(b) Rs. -

Previous Market Price(a) Rs. -

Cost Price(a Rs. 18,871,375,020.00

Cost Price Rs. -

Remarks

Schedule 12 .2

Remarks

Schedule 12.1

68


9,691,000.00 29,955,500.00 39,646,500.00

Cost Price Rs.

10,002,168.00 10,002,168.00

10,226,568.00

Current Market Price (b) Rs.

10,226,568.00

Previous Market Price(a) Rs.

This Year. Previous Year Investment Adjustment Profit /Loss Rs. Reserve (b-a) Rs. -

* **

Remarks

Schedule 12 .3

Note: * Even though the current market price is higher than the cost price we have not marked these securities to market because the volume of transaction on these securities is very low.

.O)NVESTMENT!DJUSTMENT2ESERVEHASBEENMAINTAINEDBECAUSE.2"$IRECTIVE.OHASEXEMPTEDMAINTENANCEOFSUCHRESERVEAGAINSTINVESTMENTIN#REDIT)NFORMATION#ENTER,TD .EPAL#LEARING(OUSEAND National Banking Training Institute.

.EPAL'OVERNMENT4REASURY"ILLS .EPAL'OVERNMENT3AVING"ONDS .EPAL'OVERNMENT/THERSECURITIES Nepal Rastra Bank Bonds Foreign Securities 3HARESOF$OMESTIC,ICENSED)NSTITUTION $EBENTUREAND"OND$OMESTIC,ICENSED)NSTITUTION 3HARES $EBENTURESAND"ONDOF$OMESTIC%NTITY Listed Not Listed &OREIGN"ANK)NVESTMENT0LACEMENT 10. Interbank Lending 11. Other Investments Total Investment

4. 5.

Particulars

%NDOF!SHADHTH*ULY

"53).%33).6%34-%.4!VAILABLEFOR3ALE


69

3,851,399 5,275,067 9,126,466 206,301 1,323,242 1,116,941 645,205,783

428,292 (308,436) (736,728) 138,341,012

6,517,230 3,726,177 10,243,407

3,726,177 655,449,190

Uninsured 651,723,013 651,723,013 3,726,177

Other

45,664,225 (129,884,590) 20,521,137,822

175,548,815

168,170,412 60,209,522 3,171,684 238,716,512 470,374,677

206,325,340 46,356,837 492,565 86,953,904 340,490,087

20,632,534,027 20,632,534,027 229,093,882 139,446,836 1,970,259 86,953,904 20,861,627,909

Domestic

375,685 136,252 18,038 1,763,220 2,405,801

333,827 54,377 26,614 1,119,622 1,669,073

Insured 133,530,958 133,530,958 6,479,127 497,744 425,828 4,478,490 140,010,085

Priority Sector

Loans & Advances

-

-

46,679,031 (129,504,377) 17,480,548,194

176,183,408

172,397,496 60,345,774 3,189,722 245,754,799 481,906,944

352,402,567

-

213,176,397 46,411,214 519,179 91,799,703

21,417,787,998 21,417,787,998 239,299,186 139,944,580 2,396,087 95,158,571 21,657,087,184

Total

-

-

Foreign

.OTE4OTALEXPOSUREUNDER$EPRIVED3ECTORIS2S ,ACSEXCLUDINGINVESTMENTOF2S,ACS

4. Provisioning up to previous year 4.1 Pass 4.2 Restructured 4.3 Sub-Standard $OUBTFUL 4.5 Loss C. Total previous year’s provision D. Written Back from Previous Year’s E. Additional Provision of Current Year F. Changes this year Net Loan (A-B)

1. Performing Loan 1.1 Pass 2. Non-Performing Loan 2 a Restructured 2.1 Sub-Standard $OUBTFUL 2.3 Loss A. Total Loan 3. Loan Loss Provision 3.1 Pass 3.2 Restructured 3.3 Sub-Standard $OUBTFUL 3.5 Loss B. Total Provisioning

Particulars

%NDOF!SHADHTH*ULY

#,!33)&)#!4)/./&,/!.3!.$"),,3052#(!3%02/6)3)/.).'

54,959

54,959 -

559,927 559,927 55,645,607

-

(1,128,932) (1,128,932) 5,440,904

-

2,150 1,183,891 2,150 1,183,891

562,077

562,077 -

56,207,684 5,495,863 56,207,684 5,495,863 56,207,684 5,495,863

Bills Purchased/Discount Domestic Foreign

(569,006) (569,006) 61,086,512

-

1,186,041 1,186,041

617,035

617,035 -

61,703,547 61,703,547 61,703,547

Total

46,110,025 (130,073,383) 21,365,771,129

176,183,408

173,583,537 60,345,774 3,189,722 245,754,799 483,092,985

353,019,602

213,793,432 46,411,214 519,179 91,799,703

21,479,491,545 21,479,491,545 239,299,186 139,944,580 2,396,087 95,158,571 21,718,790,731

This Year Rs.

59,411,794 2,790,518 17,480,548,194

56,621,276

149,466,541 39,071,496 2,740,744 285,338,247 480,302,467

483,092,985

173,583,537 60,345,774 3,189,722 245,754,799

17,471,059,189 17,471,059,189 492,581,990 227,448,241 12,975,351 251,044,459 17,963,641,179

Previous Year Rs.

Schedule 13

3CHEDULE!

,/!. !$6!.#%3!.$"),,3052#(!3%$3%#52)497)3% %NDOF!SHADHTH*ULY A. B.

70


Particulars Secured -OVABLE)MMOVABLE!SSETS 'UARANTEEOF,OCAL,ICENSED)NSTITUTIONS 'OVERNMENT'UARANTEE )NTERNATIONALLY2ATED"ANK'UARANTEE %XPORT$OCUMENTS &IXED$EPOSIT2ECEIPTS A/WN&$2 B&$2OF/THER,ICENSED)NSTITUTIONS 'OVERNMENT"ONDS #OUNTER'UARANTEE 0ERSONAL'UARANTEE 10. Other Securities Unsecured Total

This Year Rs. 21,718,790,731 1,037,719,899 21,718,790,731

Previous Year Rs. 17,963,641,179 953,272,554 17,963,641,179


71

1. Cost Price a. Previous Year balance b. Addition during the year C2EVALUATION7RITTEN"ACKTHISYEAR d. Sold during the year e. Written off during the year 4OTAL#OSTABC D E 2. Depreciation A5PTOPREVIOUSYEAR b. For this year C$EPRECIATIONONREVALUATION7RITTEN"ACK D$EPRECIATIONON!SSETS3OLD7RITTENOFF 4OTAL$EPRECIATION 3. Book Value (WDV*) (1-2) 4. Land 5. Capital Construction (Pending Capitalization) 6. Leasehold Assets Total (3+4+5+6)

Particulars

%NDOF!SHADHTH*ULY

&)8%$!33%43

3,073,199.69

10,925 19,103,990 72,157,018 72,157,018

-

45,369,855 99,196,754 99,196,754

190,435,709 35,497,037

ASSETS Machinery

105,608,078 16,278,617

Vehicles

Buildings 78,239,772 21,157,170

Others

55,138,340 180,971,840 180,971,840

12,022,388 64,676,917 64,676,917

6,658,809 1,347,346.52

255,333,167 62,025,001

Office Equipment 629,616,726 134,957,825 11,090,280 131,634,573 417,002,530 417,002,530

This Year Rs.

404,070,587 257,766,185 32,220,046 91,364,966 418,244,760 418,244,760

Previous Year Rs.

Schedule 14

Schedule 15

./."!.+).'!33%43 %NDOF!SHADHTH*ULY Name & Address of Date of assuming Non Banking Borrower or Party Assets Total

Total Amount of Non Banking Assets

Loss Provision Banking In % In Amount

Net Non Year Rs. Assets (Rs)

-

-

-

-

“Previous (Net NBA)” -

Schedule 16

OTHER ASSETS %NDOF!SHADHTH*ULY

Particulars 1. Stock of Stationery 2. Income receivable on Investment 3. Accrued Interest on Loan ,ESS)NTEREST3USPENSE!CCOUNT 4. Commission Receivable 3UNDRY$EBTORS 3TAFF,OAN!DVANCES 7. Pre Payments 8. Cash in Transit /THER4RANSITITEMSINCLUDING#HEQUES $RAFTSPAIDWITHOUTNOTICE 11. Expenses not written off 12. Branch Account $EFERRED4AX!SSETS 14. Others A !DVANCE)NCOME4AX B /THERS Total

This Year Rs. 4,148,587 163,407,655 140,411,150

35,123,315 8,363,205 56,548,350 516,612,938

Previous Year Rs. 4,362,396 114,398,523 283,256,183 11,626,629 9,448,677 85,866,118 401,992,219 3CHEDULE!

/4(%2!33%43!DDITIONAL3TATEMENT %NDOF!SHADHTH*ULY Particulars 1. 3.

Accrued Interest on Loan $RAFTS0AIDWITHOUTNOTICE Branch Account ,OCAL&OREIGN!GENCY!CCOUNT Total

This Year Rs. Previous Up to 1Year 1 to 3 years Above 3years Total Year Rs. 35,563,917 27,501,977 77,345,256 140,411,150 283,256,183 35,563,917 27,501,977 109,345,256 172,411,150 315,256,183

.OTE&ORTHE$$PAIDWITHOUTNOTICEOF2SCRORE 2SLAKHSWASRECEIVEDFROMINSURANCECOMPANYANDBANKSANDPROVISIONHASBEEN provided for the balance of Rs 2.23 crore, net of aforesaid provision is disclosed in schedule 16

72


Schedule 17

#/.4).'%.4,)!"),)4)%3 %NDOF!SHADHTH*ULY Particulars 1. Claims on institution not accepted by the Institution ,ETTEROF#REDIT&ULL!MOUNT a. Less than 6 months maturity b. More than 6 months maturity 3. Rediscounted Bills 5NMATURED'UARANTEES"ONDS a. Bid Bonds b. Performance Bonds C/THER'UARANTEE"ONDS 5NPAID3HARESIN)NVESTMENT 6. Forward Exchange Contract Liabilities 7. Bills under Collection !CCEPTANCE%NDORSEMENT 5NDERWRITING#OMMITMENT 10. Irrevocable Loan Commitment 'UARANTEEPROVIDEDON#OUNTER'UARANTEEOF Internationally Rated Banks” !DVANCE0AYMENT'UARANTEE &INANCIAL'UARANTEE 14. Contingent Liabilities on Income Tax 15. Others Total

This Year Rs. 1,448,994,775 115,022,312 498,434,612

Previous Year Rs. 1,933,140,934 60,861,123 433,164,050

33,993,511 2,492,998,420

56,448,012 2,065,436,420

890,850,650 6,883,583,667

825,308,855 6,482,784,570


73

Schedule 18

INTEREST INCOME From 1st Shrawan 2067 to 32nd Asadh 2068

A. 2. B. 2. 3. 5. C. 1. 2. D. 2. E. 2. 3. 4.

74


Particulars On Loans, Advances and Overdraft ,OANS!DVANCES Overdraft On Investment .EPAL'OVERNMENT3ECURITIES a. Treasury Bills B $EVELOPMENT"ONDS c. National Saving Certificates Foreign Securities Nepal Rastra Bank Bonds $EBENTURE"ONDS A "ANKS&INANCIAL)NSTITUTIONS b. Other Organizations Interest on Inter - Bank Lending On Agency Balances Local Banks Foreign Banks On Money at Call and Short Notice ,OCAL"ANKS&INANCIAL)NSTITUTIONS Foreign Banks On Others #ERTIlCATEOF$EPOSITS Inter-Bank Loan Placement with Foreign Banks Others Total

This Year Rs. 2,441,993,586 454,531,330 397,295,514 311,820,527 22,781,786 264,942,707 257,351,461 7,591,246 3,104,231,807

Previous Year Rs. 1,760,201,809 333,931,031 209,922,727 170,154,994 3,596,442 -

299,579,755 293,911,320 5,668,435 2,269,704,291

Schedule 19

INTEREST EXPENSES From 1st Shrawan 2067 to 32nd Asadh 2068 Particulars A. ON DEPOSIT LIABILITIES 1. Fixed Deposits 1.1 Local Currency 1.2 Foreign Currency 2. Saving Deposits 2.1 Local Currency 2.2 Foreign Currency 3. Call Deposits 3.1 Local Currency 3.2 Foreign Currency 4. Certificate of Deposits B. ON BORROWINGS $EBENTURES"ONDS 2. Loan from Nepal Rastra Bank )NTER"ANK&INANCIAL)NSTITUTIONS"ORROWING 4. Other Corporate Body /THEREXPENSES)NCOME C. ON OTHERS Total

This Year Rs. Previous Year Rs. 2,070,010,492 1,340,255,940 1,665,036,117 980,473,961 1,435,173,171 703,879,572 229,862,946 276,594,389 248,283,754 204,145,523 247,726,636 203,598,047 557,118 547,476 156,690,621 155,636,456 156,480,283 155,232,187 210,338 404,269 26,027,887 103,437,633 2,096,038,379 1,443,693,573


75

Schedule 20

#/--)33)/.!.$$)3#/5.4).#/-% From 1st Shrawan 2067 to 32nd Ashadh 2068 Particulars A. Bills Purchase & Discount 1. Local 2. Foreign B. Commission 1. Letters of Credit 'UARANTEES 3. Collection Fees 4. Remittance Fees 5. Credit Card 3HARE5NDERWRITING)SSUE 'OVERNMENT4RANSACTIONS 8. Agency Commission 9. Exchange Fee C. Others Total

This Year Rs. 986,715 142,529 844,186 89,546,099 22,304,824 4,120,247 34,246,799 156,631,950 247,164,764

Previous Year Rs. 1,563,411 601,169 962,242 74,077,635 21,389,282 3,775,557 28,491,494 7,239 56,051,103 131,692,149

Schedule 21

OTHER INCOME From 1st Shrawan 2067 to 32nd Ashadh 2068 5. 6.

76


Particulars 3AFE$EPOSIT,OCKERS2ENTAL )SSUE2ENEWALSOF#REDIT#ARDS )SSUE2ENEWALSOF!4-#ARDS 4ELEX44 Service Charges Renewal Fees /THERS0OSTAGE Total

This Year Rs. 39,081,276 8,691,020 95,172,658

Previous Year Rs. 35,874,781 5,181,892 78,796,662

Schedule 22

%8#(!.'%'!).,/33 From 1st Shrawan 2067 to 32nd Ashadh 2068 Particulars A 2EVALUATION'AIN,OSS B 4RADING'AINEXCEPT%XCHANGE&EES Total Income (Loss)

This Year Rs. 70,532,720


Schedule 23

%80%.3%32%,!4).'4/%-0,/9%%3 From 1st Shrawan 2067 to 32nd Ashadh 2068 1. 2. 3. 4. 6. 7.

Particulars Salary Allowances Contribution to Provident Fund Training Expenses 5NIFORM Medical Insurance 0ENSION 'RATUITYAND,EAVE0ROVISION /THERS#ANTEEN Total

This Year Rs. 95,070,779 71,664,907 7,436,695 1,810,768 5,689,056 12,779,727 255,430,285

Previous Year Rs. 51,091,744 44,489,672 4,418,535 2,559,034 3,949,343 2,919,262 130,336,536


77

Schedule 24

/4(%2/0%2!4).'%80%.3%3 From 1st Shrawan 2067 to 32nd Ashadh 2068 Particulars House Rent %LECTRICITY7ATER 2EPAIR-AINTENANCE A "UILDINGONLEASE b. Vehicles C /THERS#OMPUTER /FlCE%QUIPMENT &URNITURE 4. Insurance 0OSTAGE 4ELEX 4ELEPHONE&AX 6. Office Equipment, Furniture and Repair 4RAVELLING!LLOWANCES%XPENSES 0RINTING3TATIONERY "OOKS0ERIODICALS 10. Advertisements 11. Legal Expenses $ONATIONS %XPENSESRELATINGTO"OARDOF$IRECTORS a. Meeting Fees b. Other Expenses !NNUAL'ENERAL-EETING%XPENSES 15. Expenses relating to Audit a. Audit Fees b. Other Expenses 16. Commission on Remittances $EPRECIATIONON&IXED!SSETS 18. Amortization of Preliminary Expenses 19. Share Issue expenses 20. Technical Services Fee 21. Entertainment 22. Written Off Expenses 23. Security Expenses #REDIT'UARANTEE0REMIUM #OMMISSIONAND$ISCOUNT 26. Others A /FlCE%QUIPMENT&URNITURENOTCAPITALISEDITEMS B )NFORMATION4ECHNOLOGY3UPPORT#OST C /THERS Total 1.

78


This Year Rs. 60,747,291 2,022,972 7,817,020 1,485,278 12,061,346 1,647,527 1,684,000 1,961,743 689,818 226,000 463,818 12,213,181 465,706 4,324,072 28,772,563 96,309,695 445,072,722

Previous Year Rs. 45,924,035 1,310,829 7,728,027 1,285,842 11,155,181 1,553,161 1,656,000 2,363,994 841,646 169,500 672,146 1,442,287 12,868,001 401,329 1,820,033 21,962,841 68,426,004 343,850,266

Schedule 25

PROVISION FOR POSSIBLE LOSS From 1st Shrawan 2067 to 32nd Ashadh 2068 1. 2. 3. 4.

Particulars Increase in Loan Loss Provision Increase in Provision for Loss on Investment Provision Against Non-Banking Assets Provision Against Other Assets Total

This Year Rs. 46,110,025 198,127 46,308,152

Previous Year Rs. 59,411,794 2,938,750 62,350,544 Schedule 26

./. /0%2!4).').#/-%,/33 From 1st Shrawan 2067 to 32nd Ashadh 2068 Particulars 0ROlT,OSS ON3ALEOF)NVESTMENTS 0ROlT,OSS ON3ALEOF!SSETS $IVIDEND.ET Subsidies received from Nepal Rastra Bank a. Reimbursement of losses of specified branches b. Interest Subsidy c. Exchange Counter 5. Others Total Non-Operating Income (Loss) 4.

This Year Rs. 375,628 3,113,765

Previous Year Rs. 331,069 2,552,892 Schedule 27

LOSS PROVISIONS WRITTEN BACK &ISCAL9EAR 1. 2. 3. 4.

Particulars Loan Loss Provision Written Back Provision against Non Banking Assets Written Back Investment Provision Written Back Provision against other Assets Written Back Total

This Year Rs. 176,183,408 2,938,750


179,122,158

56,621,276 Schedule 28

02/&)4,/33&2/-%842!!#4)6)4)%3 &ISCAL9EAR Particulars 1. Recovery of Write off Loan 2. Voluntary Retirement Scheme Expenses ,OAN7RITE /FFSA /THEREXPENSES)NCOME Total

This Year Rs.

(137,672,628)

Previous Year Rs. 4,651,963 (37,266,000)


79

80


Types of Loan

7ORKING#APITAL ,OAN 0ROJECT,OAN

Fixed Capital Loan Personal Loan Other Loan Total Loan

S.No.

3 4 5

&ISCAL9EAR

STATEMENT OF LOAN WRITTEN-OFF

Written off amount Rs.

'UARANTEEETC -

,AND

,AND "UILDING 3TOCK 0ERSONAL

Type of Security

%NGINEERS Building , Personal -

Basis of valuation of collateral %NGINEERS 6ALUATION

"OARDOFTHE Valuation -

Loan Approved by Name/Designation -ANAGING $IRECTOR

-

$24HASGIVEN Bank

Initiations made

138,172,628

Remarks for recovery DRT has given VERDICTIN "ANKSFAVOUR 'UARANTEEETC verdict in "ANKSFAVOUR

3CHEDULEA


81

Name of Promoter/Director/ Chief Executive ! $IRECTORS xxxxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxxx B. Chief Executive xxxxxxxxxxxxxx xxxxxxxxxxxxxx C. Promoters !GRICULTURE$EVELOPMENT"ANK xxxxxxxxxxxxxxx xxxxxxxxxxxxxx $ %MPLOYEES xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxx E. Shareholders xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxx Total

%NDOF!SHADH Outstanding up to Last Year Principal Interest -

Recovered in Current Year Principal Interest -

Additional Lending in this year -

Outstanding as of Asadh end 2068 Principal Interest -

34!4%-%.4/&,/!.3!.$!$6!.#%3%84%.$%$4/$)2%#4/23#()%&%8%#54)6%02/-/4%23%-0,/9%%3!.$3(!2%(/,$%23

Schedule 29

3CHEDULE!

34!4%-%.4/&#!0)4!,&5.$ !SON!SHADH%NDTH*ULY

1.1 RISK WEIGHTED ASSETS a Credit Risk b Operational Risk c Market Risk Total Risk Weighted Assets (a+b+c) !DJUSTMENTS5NDER0ILLAR)) h!DDOFTHETOTAL27%AS3UPERVISORISNOTSATISlEDWITHTHEOVERALLRISK -ANAGEMENT0OLICIESAND0ROCEDURESA v !DDOFTHETOTALDEPOSITDUETOINSUFlCIENT,IQUID!SSETSA Total Risk Weighted Exposures (After Bank’s Adjustment of Pillar II) 1.2 CAPITAL Core Capital (Tier 1) a Paid up Capital b Irredeemable Non-cumulative preference shares c Share Premium d Proposed Bonus Shares E 'ENERAL2ESERVES F 2ETAINED%ARNINGS5PTOLAST&9 G #URRENT9EARS0,!CCOUNT h Capital Redemption Adjustment Fund I Capital Adjustment Fund J $IVIDEND%QUALIZATION&UND K $EBENTURE2EDEMPTION&UND l Other Free Reserve M$EFERRED4AX2ESERVE $EDUCTIONS A 'OODWILL b Miscellaneous Assets Not Written Off c Share Investment in Licensed Institution d Investment in financial interested company e Investment exceeding the limit f Investments arising out of underwriting commitments g Reciprocal crossholdings h Others Supplementary Capital (Tier 2) A #UMULATIVEANDOR2EDEEMABLE0REFERENCE3HARE B 5NSECURED3UBORDINATE,ONG4ERM,OANS c Hybrid Capital Instruments d Pass Loan Loss Provision e Exchange Equalization Fund f Investment Adjustment Fund g Assets Revaluation Fund h Other Funds Total Capital Fund (Tier I and Tier II) 1.3 CAPITAL FUND RATIOS #ORE#APITAL4OTAL2ISK7EIGHTED!SSETS4IER) #APITAL&UND4OTAL2ISK7EIGHTED!SSETS4IER)4IER))

82


Ashadh End 2068 25,267,759,682 1,196,119,880 724,922,310 27,188,801,872

Ashadh End 2067 20,580,286,049 1,196,119,882 322,956,646 22,099,362,574

27,460,689,891 22,320,356,200 Ashadh End 2068 Ashadh End 2067 2,834,109,205 2,430,021,234 1,869,303,258 1,653,623,877 49,660,225 233,662,907

30,000,000

-9,691,000 329,286,377

213,793,432 10,279,125 25,213,820 3,163,395,582 Ashadh End 2068

207,700,362 50,000,000

-9,691,000 304,425,373

173,583,537 10,200,116 641,720 2,734,446,607 Ashadh End 2067


83

#ASH"ALANCE "ALANCE7ITH.EPAL2ASTRA"ANK 'OLD )NVESTMENTIN.EPALESE'OVERNMENT3ECURITIES !LLOTHER#LAIMSON'OVERNMENTOF.EPAL )NVESTMENTIN.EPAL2ASTRA"ANKSECURITIES !LLOTHERCLAIMSON.EPAL2ASTRA"ANK #LAIMSON&OREIGN'OVERNMENTAND #ENTRAL"ANK%#! #LAIMSON&OREIGN'OVERNMENTAND #ENTRAL"ANK%#! #LAIMSON&OREIGN'OVERNMENTAND #ENTRAL"ANK%#! #LAIMSON&OREIGN'OVERNMENTAND #ENTRAL"ANK%#! #LAIMSON&OREIGN'OVERNMENTAND #ENTRAL"ANK%#! “Claims On BIS, IMF, ECB, EC and on Multilateral $EVELOPMENT"ANKS-$"S RECOGNIZED BYTHEFRAMEWORKh #LAIMSON/THER-ULTILATERAL$EVELOPMENT"ANKS #LAIMSON0UBLIC3ECTOR%NTITY%#! #LAIMSON0UBLIC3ECTOR%NTITY%#! #LAIMSON0UBLIC3ECTOR%NTITY%#! #LAIMSON0UBLIC3ECTOR%NTITY%#! Claims on domestic banks that meet capital ADEQUACYREQUIREMENTS Claims on domestic banks that do not meet CAPITALADEQUACYREQUIREMENTS

A. Balance Sheet Exposures

!SON!SHADH%NDTH*ULY

Specific Provision b

Book Value a

&/2-./2)3+7%)'(4%$%80/352%&/2#2%$)42)3+

Eligible CRM c

Risk Weight Risk Weighted Previous Year e Exposures Net Value Risk Weighted f=d*e Exposure

Net Value d=a-b-c

3CHEDULE"

84


#LAIMSONFOREIGNBANK%#!2ATING #LAIMSONFOREIGNBANK%#!2ATING #LAIMSONFOREIGNBANK%#!2ATING #LAIMSONFOREIGNBANK%#!2ATING Claims on foreign bank incorporated in SAARC REGIONOPERATINGWITHABUFFEROFABOVETHEIR RESPECTIVEREGULATORYCAPITALREQUIREMENT #LAIMSON$OMESTIC#ORPORATES #LAIMSON&OREIGN#ORPORATES%#! #LAIMSON&OREIGN#ORPORATES%#! #LAIMSON&OREIGN#ORPORATES%#! #LAIMSON&OREIGN#ORPORATES%#! 2EGULATORY2ETAIL0ORTFOLIO.OT/VERDUE Claims Fulfilling all criterion of regulatory retail EXCEPTGRANULARITY #LAIMSSECUREDBYRESIDENTIALPROPERTIES #LAIMSNOTFULLYSECUREDBYRESIDENTIALPROPERTIES #LAIMSSECUREDBYRESIDENTIALPROPERTIES/VERDUE #LAIMSSECUREDBY#OMMERCIALREALESTATE 0ASTDUECLAIMSEXCEPTFORCLAIMSECUREDBY RESIDENTIALPROPERTIES (IGH2ISK#LAIMS Investments in equity and other capital instruments OFINSTITUTIONSLISTEDINTHESTOCKEXCHANGE Investments in equity and other capital instruments OFINSTITUTIONSNOTLISTEDINTHESTOCKEXCHANGE /THER!SSETS )NTEREST2ECEIVABLE#LAIMON 'OVT3ECURITIES /THER!SSETS #ASH#ASHIN4RANSIT)TEMS Other Assets-Investment in equity or regulatory Capital Instrument issued by securities firms Fictitious Assets not deducted from Tier I /THER!SSETSASPERATTACHMENT TOTAL

47,129,754,322 839,536,539 873,590,582 45,416,627,201

22,552,593,618 37,230,290,090 18,139,346,915


85

Previous Year Net Value Risk Weighted Exposure

Risk Weighted Exposures f=d*e

2,715,166,064 6,000,972,064 2,440,939,134

6,883,583,667 - 620,086,746 6,263,496,921

Risk Weight e

Net Value d=a-b-c

Eligible CRM c

Specific Provision b

Gross Book Value a

4HEINVESTMENTINEQUITYINCLUDETHEINVESTMENTMADEIN2-$# -0'"", #)#, .#,AND."4)WHICHAREAPPROVEDBY.2"$UETOTHISWEHAVEREPORTEDTHElGUREUNDERLISTEDINSTRUCTIONS

2EVOCABLE#OMMITMENTS "ILLS5NDER#OLLECTION &ORWARD&OREIGN%XCHANGE#ONTRACT,IABILITIES ,##OMMITMENTS7ITH/RIGINAL-ATURITY5PTO MONTHS$OMESTIC#OUNTERPARTY &OREIGN#OUNTERPARTY%#!2ATING &OREIGN#OUNTERPARTY%#!2ATING &OREIGN#OUNTERPARTY%#!2ATING &OREIGN#OUNTERPARTY%#!2ATING LC Commitments With Original Maturity Over MONTHS$OMESTIC#OUNTERPARTY &OREIGN#OUNTERPARTY%#!2ATING &OREIGN#OUNTERPARTY%#!2ATING &OREIGN#OUNTERPARTY%#!2ATING &OREIGN#OUNTERPARTY%#!2ATING Bid Bond, Performance Bond and Counter GUARANTEE$OMESTIC#OUNTERPARTY &OREIGN#OUNTERPARTY%#!2ATING &OREIGN#OUNTERPARTY%#!2ATING &OREIGN#OUNTERPARTY%#!2ATING &OREIGN#OUNTERPARTY%#!2ATING 5NPAID'UARANTEE#LAIMS 5NDERWRITINGCOMMITMENTS ,ENDINGOF"ANKS3ECURITIESOR0OSTINGOF 3ECURITIESASCOLLATERAL 2EPURCHASE!GREEMENTS !SSETSSALEWITHRECOURSE !DVANCE0AYMENT'UARANTEE &INANCIAL'UARANTEE !CCEPTANCESAND%NDORSEMENTS 5NPAIDPORTIONOF0ARTLYPAIDSHARESAND3ECURITIES )RREVOCABLE#REDITCOMMITMENTS3HORT4ERM )RREVOCABLE#REDITCOMMITMENTS,ONG4ERM /THER#ONTINGENT,IABILITIES TOTAL 4OTAL27%FORCREDIT2ISK"EFORE!DJUSTMENT! "

B. Off Balance Sheet Exposures

86


Balance Sheet Exposures #LAIMSON&OREIGN'OVERNMENT AND#ENTRAL"ANK%#! #LAIMSON&OREIGN'OVERNMENT AND#ENTRAL"ANK%#! #LAIMSON&OREIGN'OVERNMENT AND#ENTRAL"ANK%#! #LAIMSON&OREIGN'OVERNMENT AND#ENTRAL"ANK%#! Claims on Other Multilateral $EVELOPMENT"ANKS #LAIMSON0UBLIC3ECTOR%NTITY%#! #LAIMSON0UBLIC3ECTOR%NTITY%#! #LAIMSON0UBLIC3ECTOR%NTITY%#! #LAIMSON0UBLIC3ECTOR%NTITY%#! Claims on domestic banks that meet capital adequacy requirements Claims on domestic banks that do not meet capital adequacy requirements #LAIMSONFOREIGNBANK%#!2ATING #LAIMSONFOREIGNBANK%#!2ATING #LAIMSONFOREIGNBANK%#!2ATING #LAIMSONFOREIGNBANK%#!2ATING Claims on foreign bank incorporated in SAARC region operating with a buffer OFABOVETHEIRRESPECTIVEREGULATORY capital requirement #LAIMSON$OMESTIC#ORPORATES

Credit Exposures

!SON!SHADHENDTH*ULY

-

-

Deposits with other banks/FI (b)

(a)

Deposits with Bank

&/2-./%,)')",%#2%$)42)3+-)4)'!.43

-

(d)

Govt.& NRB Securities

-

(c)

Gold

G’tee of Govt. of Nepal (e)

Sec/G’tee of other Sovereigns (f)

G’tee of domestic banks (g)

Sec/G’tee of Foreign Banks (I)

(h)

G’tee of MDBs

-

Total

3CHEDULE#


87

#LAIMSON&OREIGN#ORPORATES%#! #LAIMSON&OREIGN#ORPORATES%#! #LAIMSON&OREIGN#ORPORATES%#! #LAIMSON&OREIGN#ORPORATES%#! 2EGULATORY2ETAIL0ORTFOLIO.OT/VERDUE Claims Fulfilling all criterion of regulatory retail except granularity Claims secured by residential properties Claims not fully secured by residential properties Claims secured by residential properties /VERDUE Claims secured by Commercial real estate 0ASTDUECLAIMSEXCEPTFORCLAIMSECURED BYRESIDENTIALPROPERTIES High Risk Claims Investments in equity and other capital instruments of institutions listed in the stock exchange Investments in equity and other capital instruments of institutions not listed in the stock exchange /THER!SSETS #ASH#ASHIN4RANSIT)TEMS Other Assets - Investments in equity or regulatory capital instruments issued by securities firms Fictitious Assets not deducted from Tier I /THER!SSETSASPERATTACHMENT Off Balance Sheet Exposures Forward Foreign Exchange Contract LC Commitments With Original Maturity 5PTOMONTHSDOMESTIC ECA Rating 0-1 ECA Rating 2 ECA Rating 3-6

-

367,035,181

3,745

-

-

-

367,038,926

-

-

-

88


ECA Rating 7 LC Commitments With Original Maturity /VERMONTHSDOMESTIC ECA Rating 0-1 ECA Rating 2 ECA Rating 3-6 ECA Rating 7 Bid Bond, Performance Bond and Counter 'UARANTEE$OMESTIC#OUNTERPARTY ECA Rating 0-1 ECA Rating 2 ECA Rating 3-6 ECA Rating 7 'UARANTEE)NVOKEDBUTYETNOTHONOURED 5NDERWRITINGCOMMITMENTS ,ENDINGOF"ANKS3ECURITIESOR0OSTINGOF Securities as collateral Repurchase Agreements, Assets sale with RECOURSEINCLUDINGREPOREVERSEREPO !DVANCE0AYMENT'UARANTEE &INANCIAL'UARANTEE Acceptances and Endorsements 5NPAIDPORTIONOF0ARTLYPAIDSHARES and Securities Irrevocable Credit commitments 3HORT4ERM Irrevocable Credit commitments ,ONG4ERM Other Contingent Liabilities Total

-

24,006,780

1,034,679,110

-

251,803,745

-

- 23,253,135

-

183,941,338

1,493,677,328

-

24,006,780

-

-

-


89

Particulars Net Interest Income #OMMISSIONAND$ISCOUNT)NCOME Other Operating Income Exchange Fluctuation Income !DDITION$EDUCTION)NTEREST3USPENSEDURINGTHEPERIOD Gross income (a) Alfa (b) Fixed Percentage of Gross Income [c=(a×b)] Capital Requirement for operational risk (d) (average of c) Risk Weight (reciprocal of capital requirement of 10%) in times (e) Equivalent Risk Weight Exposure [f=(d×e)]

!SON!SHADHENDTH*ULY

&/2-./2)3+7%)'(4%$%80/352%&/2/0%2!4)/.!,2)3+ Year 1 (2064/65) 515,594,968 19,557,259 51,989,275 682,986,691 15% 102,448,004 119,611,988 10 1,196,119,880

Year 2 (2065/66) 635,745,411 52,790,137 61,294,299

617,055,007 15% 92,558,251

Year 3 (2066/67) 826,010,718 78,796,662 70,328,247

1,092,198,065 15% 163,829,710

119,611,988 10 1,196,119,882

2067 Ashadh End

3CHEDULE$

90


!5$ #!$ CNY CHF %52/ '"0 (+$ INR JPY 3'$ 53$ Total Open Position (a) Fixed Percentage (b) Capital Charge for Market Risk [c=(a×b)] Risk Weight (reciprocal of capital requirement of 10%) in times (d) Equivalent Risk Weight Exposure [e=(c×d)]

3 4 8 9

Currency

S.No.

!SON!SHADH%NDTH*ULY

&/2-./2)3+7%)'(4%$%80/352%&/2-!2+%42)3+ Rate

40 87.73 854,886,376 1.60075 4,459,456 0.895

Open Position (FCY)

3,509 1,368,459,366 3,991,213

Open Position (NPR)

“Relevant Open Position (2067 Ashadh End)” 20,976 3,509 1,368,459,366 583,124,358 3,991,213 4,547,905 1,449,844,626 645,913,292 5% 5% 72,492,231 32,295,665 10 10 724,922,310 322,956,650

Relevant Open Position

3CHEDULE%


91

0ERCENTOF.ET0ROlT'ROSS)NCOME 2. Earnings Per Share 3. Market Value per Share 0RICE%ARNING2ATIO $IVIDENDINCLUDINGBONUS ONSHARECAPITAL #ASH$IVIDENDON3HARE#APITAL )NTEREST)NCOME,OANS!DVANCES 3TAFF%XPENSES4OTAL/PERATING%XPENSES )NTEREST%XPENSES4OTAL$EPOSITAND"ORROWINGS %XCHANGE'AIN4OTAL)NCOME 3TAFF3TATUTORY "ONUS4OTAL3TAFF%XPENSES .ET0ROlT,OANS!DVANCES .ET0ROlT4OTAL!SSETS 4OTAL#REDIT$EPOSIT 4OTAL/PERATING%XPENSES4OTAL!SSETS 16. Adequacy of Capital Fund on Risk Weightage Assets A#ORE#APITAL B3UPPLEMENTARY#APITAL C4OTAL#APITAL&UND ,IQUIDITY#22 .ON0ERFORMING#REDIT4OTAL#REDIT 7EIGHTED!VERAGE)NTEREST2ATE3PREAD 20. Book Net worth 21. Total Shares 22. Total Staff 2ETURNON3HAREHOLDERS%QUITY 24. Book Value Per Share 2ETURNON.ET&IXED!SSETS 4OTAL)NTEREST%ARNINGTO%XTERNAL!SSETS

Particulars

&ORYEARS

02).#)0!,).$)#!4/23

Rs. Rs.

2,869,602,150 18,693,033 505 153.51

F. Y. 2065/2066 36.18 1,900.00

2ATIO Rs. 1,153,313,329 1,404,264,131 1,702,571,354 2,440,863,070 No. 6,477,984 8,745,278 8,745,278 16,536,239 No. 189 249 323 465 Rs. 178.04 160.57 194.68 147.61

F. Y. 2064/2065 28.33 1,511.00

F. Y. 2067/2068 24.85 565.00

F. Y. 2063/2064 39.35 1,176.00

F. Y. 2066/2067 23.69 741.00

Indicators

Schedule 31

Schedule 32

PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 32nd ASHADH 2068(16th JULY 2011) i)

ii)

General Information Nepal SBI Bank Limited is a limited liability public quoted company domiciled in Nepal. The registered office of the Bank is situated at Hattisar, Kathmandu, Nepal. Nepal SBI Bank Limited has become a foreign subsidiary of State Bank of India with effect from 14.06.2009. The principal activities of the Bank consist of the business of commercial banking and other financial services in Nepal. 4HE&INANCIAL3TATEMENTSFORTHEYEARENDEDONTH*ULY!SHADH WEREAUTHORISEDFORISSUEBYTHE"/$INITSTHMEETING held on October 13, 2011. Statement of Compliance 4HE&INANCIAL3TATEMENTSHAVEBEENPREPAREDINACCORDANCEWITH.EPAL!CCOUNTING3TANDARDSh.!3v ISSUEDBYTHE.EPAL!CCOUNTING3TANDARD "OARD EXCEPT OTHERWISE STATED "ANK &INANCIAL )NSTITUTIONS!CT PRESENTATION REQUIREMENT OF .EPAL 2ASTRA "ANK DIRECTIVES AND IN conformity with the Companies Act 2063. These policies have been consistently applied to all the years presented except otherwise stated.

iii)

Basis of Preparation The Financial Statements are prepared on the historical cost basis except for foreign currency items and applied consistently with no adjustments being made for inflationary factors affecting the Financial Statements. They are presented in Nepalese Rupees and have been rounded to the nearest Rupee.

iv)

Use of Estimates, Assumptions & Judgements The preparation of Financial Statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amount of assets and liabilities, income and expenses. Management believes that estimates used in the preparation of financial statements are prudent and reasonable. Estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future period affected.

v)

Interest Income )NTERESTINCOMEFROMLOANSANDADVANCESISRECOGNISEDASPERTHE$IRECTIVESOF.EPAL2ASTRA"ANK WHICHISNOTINLINEWITH.EPAL!CCOUNTING 3TANDARD.!3 2EVENUE!CCOUNTING WHICHPRESCRIBESTHATINTERESTINCOMESHOULDBERECOGNISEDONANACCRUALBASIS Interest income from Investments and other assets is recognised on an accrual basis.

vi)

Commission and Fee Income Commission and fee income mainly comprises fees receivable from customers for guarantees, letter of credit and other services provided by the Bank. Such income is recognised as revenue on a cash basis at the time the services are provided.

vii)

Dividend Income $IVIDENDINCOMEISRECOGNISEDWHENTHERIGHTTORECEIVEPAYMENTISESTABLISHED

viii) Foreign Exchange Transactions Foreign currency assets and liabilities are translated into Nepalese Rupees at the prevailing middle rate ruling on the Balance Sheet date. Income arising from the difference between buying and selling rates of Foreign Exchange transactions are recorded on a daily basis and shown ASh4RADING'AINONFOREIGNEXCHANGEv

ix)

92

'AINSLOSSESARISINGDUETOmUCTUATIONINEXCHANGERATEOFDIFFERENTFOREIGNCURRENCIESISACCOUNTEDFORONDAILYBASISASh2EVALUATION'AIN,OSSv !SPER$IRECTIVESOF.EPAL2ASTRA"ANKOFTHEREVALUATIONGAINHASTOBETRANSFERREDTO%XCHANGE&LUCTUATION2ESERVETHROUGH0ROlTAND,OSS Appropriation Account. Interest Expense Interest payable on deposit liabilities, debenture bonds borrowings and other liabilities are accounted for on accrual basis.


x)

Loans and Advances including Bills Purchased Loans and advances including bills purchased are stated in the Balance Sheet net of provisions for loan losses. These loans and advances including bills PURCHASEDARECLASSIlEDASPERTHE$IRECTIVESOF.EPAL2ASTRA"ANK

xi)

Staff Loans Loans and advances granted to staff in accordance with the staff loan scheme of the Bank are shown under Other Assets.

xii)

Loan Loss Provision 0ROVISIONFORPOSSIBLELOSSESHASBEENMADETOCOVERRISKSINHERENTIN"ANKS,OANPORTFOLIO0ROVISIONFORPOSSIBLELOSSESFROMLOANS ADVANCESANDBILLS PURCHASEDAREMADEATTHERATESRANGINGFROMTOACCORDINGTOCLASSIlCATIONOFSUCHRISKASSETSASPER$IRECTIVESOF.EPAL2ASTRA"ANK

xiii) Investments Bank has segregated its investment portfolio into following three categories: a. Held for Trading: An investment that is made for the purpose of generating a profit from short term fluctuations in price is classified under this category. An asset is classified as held for trading even if it is a part of a portfolio of similar assets for which there is a pattern of trading for the purpose of generating a profit from short term fluctuations in price. These investments are marked to market and differences reflected in the profit and loss account.

b. Held to Maturity: The investments made with positive intent and ability of the bank to hold till maturity are classified as held to maturity investments. Bank does not have the positive intent to hold an investment to maturity, if any of the following conditions are met: 1. Bank has the intent and the ability to hold the asset for only an undefined period; or "ANKSTANDSREADYTOSELLTHEASSETOTHERTHANIFASITUATIONARISESTHATISNON RECURRINGANDCOULDNOTHAVEBEENREASONABLYANTICIPATED INRESPONSETO changes in market interest rates or risks, liquidity needs, changes in the availability of and the yield on alternative investments, changes in financing sources and terms, or changes in foreign currency risk. {4HEHELDTOMATURITYINVESTMENTSAREVALUEDATAMORTISEDCOSTIETHECOSTPRICELESSANYIMPAIRMENTSIFAPPLICABLE 4HEIMPAIRMENTSAREINCLUDEDINTHEPROlT and loss accounts for the period. c. Available for Sale: All other investments that are neither “held for trading” nor “held to maturity” are classified under this category. These investments are marked to market on a REGULARBASISANDTHEDIFFERENCEISADJUSTEDTHROUGHRESERVES"ANKWILLMAINTAIN)NVESTMENT!DJUSTMENT2ESERVEELIGIBLEAS4IERCAPITAL TOTHEEXTENTOF OFAVAILABLEFORSALEPORTFOLIOASPER$IRECTIVESOF.EPAL2ASTRA"ANK

xiv) a. b. c.

Fixed Assets and Depreciation Fixed assets are stated at cost less accumulated depreciation. Assets with a value less than Rs 5,000 are charged off as a revenue expense in the year of purchase irrespective of their useful life. Fixed assets and cost on improvements and renovation of leasehold properties are depreciated at rates based upon their expected useful lives, using the straight-line method. The estimated useful lives and depreciation rates of fixed assets are as follows: Nature of Assets Furniture Equipments Vehicles Computers Leasehold premises

xv) a.

Useful Life (years) 5-10 3-4 5 4 7

Depreciation Rate 20-10% 33.33-25% 20% 25% 15%

Intangible Assets Basis of Recognition An intangible asset is recognised if it is probable that the future economic benefits that are attributable to the assets will flow to the bank and the cost of the


93

b.

assets can be measured reliably. Measurement Software: Software represents the value of computer application software licensed for use of the Bank, other than software applied to the operation software system of computers. These intangible assets are carried at its cost, less accumulated amortisation and any impairment losses. These assets are included under THEACCOUNTHEADh/FlCE%QUIPMENTv#OMPUTERSAND!CCESSORIES ANDAMORTIZEDACCORDINGLY

xvi) Non-Banking Assets (NBAs) Non-Banking Assets represent properties that are acquired in full or partial satisfaction of debts. The Bank has adopted a policy of acquiring properties that are placed as collateral in full or partial satisfaction of debts as per prevailing laws and guidelines. 4HEVALUEOFSUCHPROPERTIESSHALLBEDETERMINEDASPER$IRECTIVESOF.EPAL2ASTRA"ANK Non-Banking Assets are stated net of provision for losses in the Balance Sheet. xvii) Employee Benefits Short Term Employee Benefit The undiscounted amount of short-term employee benefits, such as salaries, medical benefit, staff bonus etc. which are expected to be paid in exchange for the service rendered by employees is recognised during the period when the employee renders the service. The bank offers leave encashment facility to its confirmed employees which may be encashed during the service period as per the Staff Service Rule of the Bank and unused leave is accumulated and paid at the time of separation from service. Provision for leave is made on accrual basis determined by the management as per Staff Service Rules of the Bank.

Defined Contribution Plan "ANKCONTRIBUTESOF"ASIC3ALARYOFALLPERMANENTEMPLOYEESTOh.EPAL3")"ANK,IMITED2ETIREMENT&UNDvANDSAMEAMOUNTISCONTRIBUTEDFROM EMPLOYEEh.EPAL3")"ANK,IMITED2ETIREMENT&UNDvISANAPPROVEDRETIREMENTFUNDWHICHISINDEPENDENTLYADMINISTRATED"ANKSCONTRIBUTIONISCHARGEDAS expense when employee has rendered service to bank. Bank pays insurance premium of its permanent employee as per Staff Service Rules of the Bank. Insurance policy is in the name of a specified plan participant and bank has no legal liability to cover any loss on the policy and insurer has sole responsibility for paying the benefit. The amount of insurance premium paid is charged as expense for the period. Defined Benefit Plan Permanent employee of bank is eligible for gratuity payment on their separation from service as per Staff Service Rule of the Bank. Provision for gratuity is made on accrual basis determined by the management as per Staff Service Rule of the Bank taking the proportion of service period served by permanent EMPLOYEES'RATUITYISACCUMULATEDASPROVISIONANDHASNOTBEENTRANSFERREDTOANYOTHERRETIREMENTFUNDS

xviii) Stationery Stock Stationery purchased is stated at cost and charged to revenue at the time of consumption. xix) Provision for Taxation Provision for taxation has been made on the basis of the Income Tax Act 2058 and amendments thereto. xx)

Deferred Tax $EFERREDTAXASSETSANDLIABILITIESARERECOGNIZEDFORTHEFUTURETAXCONSEQUENCESATTRIBUTABLETOTEMPORARYDIFFERENCESBETWEENTHElNANCIALSTATEMENTCARRYING AMOUNTSOFEXISTINGASSETSANDLIABILITIES ANDTHEIRRESPECTIVETAXBASES$EFERREDTAXASSETSANDLIABILITIESAREMEASUREDUSINGTAXRATESEXPECTEDTOAPPLY to taxable income in the years in which those temporary differences are expected to be recovered or settled based on the laws that have been enacted or subsequently enacted on the reporting date.

$EFERREDTAXASSETSARISINGFROMTEMPORARYDIFFERENCEARERECOGNIZEDTOTHEEXTENTTHEREISCERTAINTYTHATSUFlCIENTFUTURETAXABLEINCOMEWILLBEAVAILABLEAGAINST WHICHSUCHDEFERREDTAXASSETSCANBEREALIZED$EFERREDTAXASSETSANDLIABILITIESAREPRESENTEDUNDERh/THER!SSETSOR,IABILITIESvASPER.EPAL!CCOUNTING 3TANDARDAND$IRECTIVES.O!NAMOUNTEQUALTOTOTALOFDEFERREDTAXSURPLUSISTRANSFERREDTO$EFERRED4AX2ESERVE

xxi) Cash & Cash Equivalents #ASHCASHEQUIVALENTSCOMPRISECASHBALANCESONLY

94


Schedule 33

NOTES TO ACCOUNTS FOR THE YEAR ENDED 32nd ASHADH 2068(16th JULY 2011)

1.

Provision for Staff Bonus Provision for staff bonus has been computed and PROVIDEDFORATOFTHEPROlTAFTERMAKINGPROVISION for loan loss, non banking assets, investments and staff bonus.

for Sale category amounting to Rs 24,572,100 has been transferred to Investment Adjustment Reserve. Total balance of Investment Adjustment Reserve after such transfer is Rs 25,213,820.

2.

Staff Housing Fund As the Bank has a provision for extending housing loans to the eligible staff, a separate staff housing fund has not been created as prescribed by the Labour Act, 2048.

3.

General Reserve As required under the Banks and Financial Institutions !CT OFTHECURRENTYEARSNETPROlTHASBEEN 8. TRANSFERREDTO'ENERAL2ESERVE

7.

4.

5.

6.

Interest Income As mentioned in our Accounting Policy, interest income from loans and advances is recognized as per the Nepal 2ASTRA "ANK .2" $IRECTIVE .2" WITH ITS CIRCULAR 9. NUMBERDATEDPROVIDEDAN option to recognize outstanding interest due on Ashadh End 2068 collected in the month of Shrawan 2068 as INCOMEOFTHE&94HE"ANKHASRECOGNIZED 10. Rs 7,790,128.32 due on Ashadh End 2068 but collected in Shrawan 2068 as interest income for FY BY EXERCISING THE OPTION PROVIDED IN THE aforesaid circular. Exchange Fluctuation Reserve Revaluation gain arising out of exchange fluctuation during the year is Rs 316,034. Twenty five percent of such gain amounting to Rs 79,009 has been transferred to Exchange Fluctuation Reserve as required BY.2"$IRECTIVE

Capital Adjustment Reserve The Opening Capital Adjustment Reserve of Rs. 5 CRORESISTRANSFERREDTO0ROlT,OSS!PPROPRIATION Account for the purpose of 12.5 bonus share Rs. 3 crores has been transferred to Capital Adjustment Reserve from the Profit and Loss Appropriation Account this year. Provision for Gratuity $URING THE &9 THE BANK HAS PROVIDED 2S 23,592,647.50 on account of gratuity. A sum of Rs 493,000.00 was paid as gratuity during the year out of the accumulated provision. Provision for Leave Encashment $URING THE &9 THE "ANK HAS PROVIDED 2S 26,447,664.75 for accrued leave encashment. Tax Settlement Outstanding Bank has settled the corporate tax liability up to FY 2063-064 and has also received advance payment certificate from LTPO for excess tax payment made up to the end of the FY 2063-064. For the FY 2064-065, 2065-066 and 2066-67 self assessments have been submitted to Large Tax Payer Office for which final assessment is yet to be done.

11. Income Tax and Deferred Tax Provision for income tax has been made as per the Income Tax Laws.

Investment Adjustment Reserve !S REQUIRED BY .EPAL 2ASTRA "ANK $IRECTIVE OF $EFERRED 4AX HAS BEEN CALCULATED AS PER THE h.EPAL additional investment amount under Investment Available Accounting Standard 9- Income Taxes”.


95

96


12,699,166

12,699,166

Credit

Particulars $EFERRED4AX!SSETS $EFERRED4AX,IABILITIES $EFERRED4AX)NCOME !CCUMULATED0,!# Total

Debit

Particulars $EFERRED4AX!SSETS $EFERRED4AX,IABILITIES $EFERRED4AX)NCOME #REDITEDTO)NCOME3TATEMENT Total

Debit Credit 39,683,853 39,683,853

Deferred Tax Asset Deferred Tax Liability 18,131,910 13,196,461 52,880,314 13,196,461 26,984,687 0

#LOSING$EFERRED4AX!SSETSAND,IABILITIES

43,988,205 43,988,205

Taxable Tem. Diff.

$ETAILSOF$EFERRED4AXDEALTTHROUGH0ROlT,OSS!CCOUNTFORTHE#URRENT&9

Carrying Amount Tax Base Deductible Temp Diff 417,002,530 477,442,231 60,439,701 43,988,205 579,593,985 491,393,401 176,267,711

0REVAILING4AX2ATEOFHASBEENCONSIDEREDFORTHECALCULATIONOF$EFERREDTAX!SSETSAND,IABILITIES

Opening Balances $IFFERENCES

Particulars / Items Fixed Assets 0ROVISIONFOR'RATUITYAND,EAVE Provision for NBA 0REMIUM0AIDON$EVELOPMENT"OND Interest Income Treasury Bills

4HEMOVEMENTINDEFERREDTAXASSETSLIABILITIESISASFOLLOWS

12. Fraudulent Draft Case "ANKHADlLEDACASEWITHTHE+ATHMANDU$ISTRICT#OURT for recovery of Rs. 32,000,000 on account of loss incurred by the Bank due to the negligence of collecting "ANKS 3INCE THE DECISION OF THE $ISTRICT #OURT AND Appellate Court was not in favor of the Bank, we have

filed a leave petition with the Supreme Court. Hearing on the "ANKSLEAVEPETITIONISUNDERPROCESS4HE"ANKHASALREADY received Rs 9,640,625 from insurance company and banks ANDPROVISIONHASBEENMADEFORTHEBALANCEAMOUNT of Rs 22,359,375 against possible loss on this account.

13. Reconciliation Status of Agency Accounts Outstanding as on 16.07.2011 BRANCH

4/4!,!-/5.4.02

TOTAL Entry Net Amt

< 3 MONTHS Entry Net Amt

>3< 9 MONTHS Entry Net Amt

9 MONTHS Entry Net Amt

The un-reconciled entries represent unpaid credit entries, net of un-reconciled debit entries outstanding. All the un-reconciled entries are identified and being followed up with the correspondent banks. They will be adjusted in due course of business. 14. Summary of Loans and Advances disbursed, recovered and Principal & Interest Written-off Particulars "ALANCEASON ,OANS$ISBURSED Loans Recovered Loans Written Off Interest Written Off "ALANCEASON

15. Summary of Changes in deposit & liabilities Particulars #ALL$EPOSITS #URRENT$EPOSITS &IXED$EPOSITS -ARGIN$EPOSITS 3AVING$EPOSITS Total

2Sgg Amount 80,624,921.90 138,173.63 145,842.20

Current Year 42,415,444

Previous Year 34,896,424

2Sgg Changes 7,519,020

16. Weighted Average Interest Spread Particulars Average Rate of Return on Interest Earning Assets ,OANAND!DVANCESINCLUDINGSTAFFLOANS AND )NVESTMENTSINCLUDINGINVESTMENTINSHARES Average Cost on Fund $EPOSITS "ORROWINGS $EBENTUREAND.2"2ElNANCE Net Spread

Rate %

2.86

17. Particulars of Expenses yet to be Expensed-off Rs. in ‘000

0REMIUMPAIDON$EVELOPMENT"OND


97

18. Summary of Concentration Exposure Particulars 4OTALAMOUNTASON Highest exposure to a single unit 0ERCENTAGEOFEXPOSURETOSINGLEUNITTOTAL

2SINgg Loans, Advances & Bills Purchased 275,595

Deposits & Borrowing 13,243,490

Contingent Liabilities 263,465

19. None of the bank’s borrowings is against the collateral of its own assets. 20. Related Party Information and Transactions 20.1 Related Party Information 4HEBANKISCONTROLLEDBY3TATE"ANKOF)NDIA WHICHOWNSMORETHANSHAREOFCOMPANY 20.2 Related parties transactions Expense of Rs 12,213,183.00 during the financial year has been made for the technical support provided by holding COMPANYTOBANKASPER4ECHNICAL3ERVICE!GREEMENT43! AMONGTHEPARTIESAPPROVEDBY.EPAL2ASTRA"ANK Total meeting fee paid to directors of bank for the fiscal year is Rs 1,588,000.00. 20.3 Outstanding Assets with related party Total outstanding balances with related party as on Ashadh End 2068 is as follow

98


SN

Particulars

1 2 3

Outstanding Placement Outstanding Agency Balance Interest recognized as income during the year

Holding Company 12,869,032.50 1,578,125.59

Group Company (Excluding Holding Company) 427,500.00 50,066.46

246,774.39

8,200.27


99

Particulars

1-7 days

8-30 days

31-90 days

91-180 days

181-270 days

271-365 days

1 3 4 6 9 10 11 13

Assets Cash Balance 10077 "ALANCEWITH"ANKS&)S Investment in Foreign Banks 24938 1974 2138 12859 86213 4845 Call Money 'OVERNMENT3ECURITIES Nepal Rastra Bank Bonds )NTER"ANK&),ENDING ,OANS!DVANCES Interest Receivable 8 96 418 723 583 30 Reverse Repo Acceptance Receivable 0AYMENTSUNDER3.O Others 3760 Total (A) 116223 27185 91878 56623 122131 53015 Liabilities #URRENT$EPOSITS 3AVING$EPOSITSINCLUDINGCALL &IXED$EPOSITS $EBENTURES"ONDS 18 Borrowings 0 0 0 0 0 0 #ALL3HORT.OTICE )NTER BANK&INANCIAL)NSTITUTIONS Refinance Others 19 Other Liabilities and Provisions 5310 0 653 0 0 0 Sundry Creditors 2,062 Bills Payable 807 Interest Payable 260 Provisions 2065 0 653 Others 116 20 Acceptance Liabilities 9903 21 Irrevocable Loan Commitment 2493 6232 16204 ,ETTEROF#REDIT'UARANTEE 23 Repo 24 Payable under s.no.11 25 Others Total (B) 100516 22452 64404 36259 122270 35190 Net Financial Assets (A-B) 15707 4733 27474 20364 -138 17825 Cumulative Net Financial Assets 15707 20440 47914 68278 68140 85964 4HEUNUTILIZEDCREDITCOMMITMENTSHASBEENCOMPUTEDASPERITSDElNITIONGIVENIN#APITAL!DEQUACY&RAMEWORKUPDATED*ULY

S.N.

21. . Classification of Assets and Liabilities based on Maturity.

120625 -55945 30019

1103

1103

0

1762 64679

8927 1180

More than

0 0 0 7066 2062 807 260 3821 116 9903 24930 0 0 0 501716 30019 0

10077 132965 0 8927 3038 0 0 5521 531735

Total 1 year

Rs. in Lacs

DISCLOSURE UNDER Capital Adequacy Framework 2007 (Updated July 2008) At the end of Ashadh 2068 1. CAPITAL STRUCTURE & CAPITAL ADEQUACY I #ORE#APITAL4IER) ! B # $ E & ' ( ) * +

Particulars 0AID50%QUITY3HARE#APITAL Proposed Bonus Equity Share 3TATUTORY'ENERAL2ESERVE 2ETAINED%ARNINGS Share Premium 5NAUDITED#URRENT9EAR#UMULATIVE0ROlT #APITAL!DJUSTMENT2ESERVE $EFERRED4AX2ESERVE #URRENT9EARS0,!CCOUNT /THER&REE2ESERVE$EBENTURE2EDEMPTION2ESERVE ,ESS A &ICTITIOUS!SSETS B )NVESTMENTARISINGOUTOFUNDERWRITING COMMITMENTS Total Core Capital (Tier I)

!MOUNTIN,ACS Amount

Amount 2,336.63 496.60

28,341.09

II 3UPPLEMENTARY#APITAL4IER)) ! " C $

Particulars 3UBORDINATE4ERM$EBT 'ENERAL,OAN,OSS0ROVISION Exchange Equalization Reserve )NVESTMENT!DJUSTMENT&UND Total Supplementary Capital (Tier II)

Amount 102.79 3,292.86

III #APITAL&UND4IER)4IER)) Particulars 4OTAL#ORE#APITAL4IER) 4OTAL3UPPLEMENTARY#APITAL4IER)) 4OTAL#APITAL&UND4IER)4IER))

Amount

IV )NFORMATIONABOUT3UBORDINATE4ERM$EBT 6% Nepal SBI Debentures 2070 of Rs. 1,000/- each issued on 16.07.2006 and maturing o 15.07.2013 - Outstanding Amount - Fixed Maturity Period of 7 Years from 16.07.2006 - Interest Payment - Half Yearly - At the time of liquidation, right of claims will be only after depositors - Redeemable and Non-Convertible - Outstanding Balance of Redemption Reserve - Amount raised during the year - Amount Eligible to be reckoned as Capital Fund

100


2,000.00

1,428.57 Nil 800.00

V $EDUCTION&ORM#APITAL Particulars A Fictitious Assets B Investment arising out of underwriting commitments 4OTAL$EDUCTION

Amount Nil 96.91

VI 4/4!,15!,)&9).'#!0)4!, Total Qualifying Capital

31,633.95

vii. Capital Adequacy Ratio #APITAL!DEQUACY2ATIO0ERCENTAGE

VIII 3UMMARYOF"ANKS)NTERNAL!PPROACHTOASSESSTHEADEQUACYOFITSCAPITALTOSUPPORTCURRENTAND future activities A comprehensive ICAAP document is in place in this regard. IX

&EATURESOF3UBORDINATE4ERM$EBT Fixed Maturity Period of 7 years Interest payment half yearly At the time of liquidation, right of claims will be only after depositors Redeemable and non convertible

2. RISK EXPOSURE i. Risk Weighted Exposure for Credit Risk, Market Risk and Operational Risk Particulars A Risk Weighted Exposure for Credit Risk B Risk Weighted Exposure for Operational Ris C Risk Weighted Exposure for Market Risk Total Risk Weighter Exposure (A+B+C) !DJUSTMENTS5NDER0ILLAR)) $ h!DDOFTHETOTAL27%AS3UPERVISORISNOTSATISlEDWITH THEOVERALLRISK-ANAGEMENT0OLICIESAND0ROCEDURESA v % !DDOFTHETOTALDEPOSITDUETOINSUFlCIENT,IQUID!SSETSA Total Risk Weighted Exposures (After Bank’s Adjustment of Pillar II)

Amount 252,677.60 11,961.20 7,249.22 271,888.02 274,606.90


101

ii.

Risk Weighted Exposure under each 11 Categories of Credit Risk S.No. 2 3 4 5 6 7 9 10 11

Categories #LAIMSON'OVERNMENTAND#ENTRAL"ANK Claims on Other Official Entities Claims on Banks Claims on Corporate and Securities Entities Claims on Regulatory Retail Portfolio Claims Secured by Residential Properties Claims Secured by Commercial Real Estate 0AST$UE#LAIMS High Risk Claims Other Assets Off Balance Sheet Items Total

Amount 1,620.98 31,117.01 122,401.38 30,038.37 16,239.53 3,130.62 10,160.01 8,907.94 27,151.66 252,677.60

III !MOUNTOF.ON0ERFORMING!SSETS'ROSSAND.ET!MOUNT A B # $

Particulars Restructured Sub-standard $OUBTFUL ,OSS Total

Gross Amount 1,399.45 23.96 2,393.00

Provision Net Amount 464.11 935.34 5.19 18.77 1,392.26 1,000.74

IV .ON0ERFORMING!SSETS.0! 2ATIOS NPA Ratios

'ROSS.0!TO'ROSS!DVANCES - Net NPA to Net Advances

v.

Percentage (%) 0.47

Movement of Non Performing Assets S.No.

Particulars

Non Performing Loan 2ESTRUCTURED 3UB 3TANDARD $OUBTFUL ,OSS

Opening Balance (Ashadh End 2067)

Closing Balance (Ashadh End 2068)

Movement

vi Write off of loans and interest Suspense $URINGTHElNANCIALYEARTHEBANKHASWRITTENOFF2S LOANPRINCIPAL AND2S INTEREST SUSPENSEASPER.2"$IRECTIVE

102


vii. Movement Of Loan Loss Provision and Interest Suspense Loan Loss Provision S.No.

1

Particulars Pass 2ESTRUCTURE 3UB 3TANDARD $OUBTFUL ,OSS Total Loan Loss Provision

Opening Balance (Ashadh End 2067) 1,735.84 4,830.94

Closing Balance (Ashadh End 2068) 2,137.93 3,530.19

Opening Balance (Ashadh End 2067)

Closing Balance (Ashadh End 2068)

Movement 402.09 (1,300.75)

Interest Suspense S.No.

Particulars

)NTEREST3USPENSE

Movement

VIII $ETAILSOF!DDITIONAL,OAN,OSS0ROVISION S.No. 1

Particulars Pass 2ESTRUCTURE 3UB 3TANDARD $OUBTFUL ,OSS Total

Ashadh End 2068 402.09 (1,300.75)

IX 3EGREGATIONOFTHE"ANKS)NVESTMENTPORTFOLIO )NVESTMENTSARESEGREGATEDASPER.2"$IRECTIVE!TTHEPRESENT INVESTMENTUNDERCATEGORYh(ELDFOR4RADEhIS.ILANDINVESTMENTSUNDER other categories are as follows:


103

104


.EPAL'OVERNMENT4REASURY"ILLS .EPAL'OVERNMENT/THERSECURITIES &OREIGN"ANK)NVESTMENT0LACEMENT /THER)NVESTMENTS)NTER"ANK,ENDING Total Investment

3HARES $EBENTURESAND"ONDOF$OMESTIC%NTITY Listed Not Listed Total Investment

Particulars

96.91 299.56 396.47

Cost Price (a) Rs.

188,713.76

Cost Price (a) Rs.

102.27 102.27

Impairment Till Date (b) Rs.

-

Impairment Till Date (b) Rs.

100.02 100.02

Impairment (c) Rs.

-

Impairment (c) Rs.

-

This Year Profit /Loss (a-b-c) Rs.

This Year Profit /Loss (a-b-c) Rs. -

-

Previous Year Profit / Loss Rs.

Previous Year Profit / Loss Rs. -

* **

Remarks

Remarks

Note: * Even though the current market price is higher than the cost price we have not marked these securities to market because the volume of transaction on these securities is very low.

.O)NVESTMENT!DJUSTMENT2ESERVEHASBEENMAINTAINEDBECAUSE.2"$IRECTIVE.OHASEXEMPTEDMAINTENANCEOFSUCHRESERVEAGAINSTINVESTMENTIN#REDIT)NFORMATION#ENTER,TD .EPAL#LEARING(OUSEAND National Banking Training Institute

1

S.No.

B. Investment Available for Sale

Particulars

S.No.

A. Investment Held to Maturity

3.

RISK MANAGEMENT FUNCTION i.

Strategies and Policies Credit risk process is a joint effort between its marketing and credit areas. Credit officers are ENGAGEDINANALYZINGINHERENTRISKSINTHECUSTOMERSBUSINESS ABILITYTOREPAYANDSTRUCTURE a facility that simultaneously accommodates the financing needs, while assuring seniority, PROTECTIONANDCONTROLOFTHEBANKSASSETSANDCOLLATERAL

ii.

The Structure and Organization of the Relevant Risk Management Function 4HE "OARD OF $IRECTORS "/$ IS THE ULTIMATE AUTHORITY IN THE DECISION MAKING PROCESS4HE PROCESS HOWEVER ISINITIATEDATTHEBUSINESSUNITOFlCERSBUSINESSUNITHEADS!,#/LEVEL CREDITCONTROLANDGOESTHROUGHTHE#HIEF#REDIT/FlCER -ANAGING$IRECTOR #REDIT#OMMITTEEAND THE"/$4HERISKMANAGEMENTSTOPSATDIFFERENTLEVELSDEPENDINGONTHEBANKSPOLICYRELATING to approval discretions. Further policy manuals on credit, risk management and operations are also available to guide the staff on day to day business.

III 4HE3COPEAND.ATUREOF2ISK2EPORTINGANDOR-EASUREMENT3YSTEMS 2ISK REPORTING MEASUREMENT SYSTEM IS DONE THROUGH REGULAR CUSTOMER INTERACTIONS SITE INSPECTIONSANNUALREVIEWS4HESEARECONTINUOUSPROCESSES&URTHER REVIEWOFTHEBANKS PERFORMANCEISCONDUCTEDEVERYQUARTERANDlNDINGSAREREPORTEDTOTHE"/$

IV 0OLICIESFOR(EDGINGANDORTHEMITIGATINGRISKANDSTRATEGIESANDPROCESSESFORMONITORINGTHE CONTINUINGEFFECTIVENESSOFHEDGESMITIGATES 0OLICIES FOR MITIGATING RISKS STRATEGIES ARE AS OUTLINED IN THE RESPECTIVE MANUALS AND AS DISCUSSEDATVARIOUSLEVELSAFTERCUSTOMERINTERACTIONSVISITS DURINGANNUALREVIEWS QUARTERLY reviews and at meetings at various levels. v.

Eligible CRM Particulars $EPOSITSWITH"ANK 'OVT.2"3ECURITIES 'TEEOFDOMESTICBANKS 'TEEOFFOREIGNBANKS Total

Eligible CRM 14,936.77


105

106


Name of the Promoter/Promoter Group Shareholders

3TATE"ANKOF)NDIA3") %MPLOYEES0ROVIDENT&UND%0&

S.No

Total Number Of Shares

Percentage Of the Total Paid Up Capital

Shares Held by Promoters Name of the Lending Bank/ Financial Institution .! .!

.IL .IL

Loan Amount

0ARTICULARSREGARDINGLOANAVAILEDBYTHEPROMOTERPROMOTERGROUPSHAREHOLDERSFROMANY BANKlNANCIALINSTITUTIONAGAINSTPLEDGEOFSHARESHELDBYTHEM

Number Of Shares Pledged .IL .IL

Particulars Of the Loan

Remarks

Schedule 34


107

Particulars

4OTAL#APITALAND,IABILITIESTO 0AID5P#APITAL 2ESERVEANDSURPLUS $EBENTUREAND"OND Borrowings $EPOSITSAB A $OMESTIC#URRENCY B &OREIGN#URRENCY Income Tax Liability /THER,IABILITIES 4OTAL!SSETSTO #ASHAND"ANK"ALANCE Money at Call and Short Notice )NVESTMENTS ,OANSAND!DVANCES.ET &IXED!SSETS.ET .ON"ANKING!SSETS.ET /THER!SSETS Profit and Loss Account )NTEREST)NCOME )NTEREST%XPENSES ! .ET)NTEREST)NCOME &EES #OMMISSIONAND$ISCOUNT /THER/PERATING)NCOME &OREIGN%XCHANGE'AIN,OSS.ET " 4OTAL/PERATING)NCOME! 3TAFF%XPENSES /THER/PERATING%XPENSES # /PERATING0ROlT"EFORE0ROVISION" 0ROVISIONFOR0OSSIBLE,OSSES $ /PERATING0ROlT# .ON/PERATING)NCOME%XPENSES.ET 7RITE"ACKOF0ROVISIONFOR0OSSIBLE,OSS % 0ROlT&ROM2EGULAR!CTIVITIES$ %XTRAORDINARY)NCOME%XPENSES.ET & 0ROlTBEFORE"ONUSAND4AXES% 0ROVISIONFOR3TAFF"ONUS 0ROVISIONFOR4AX ' .ET0ROlT,OSS&

S. N.

1.4 1.6 2.2 3

Corporate Office, Hattisar, Kathmandu #OMPARISONOF5NAUDITEDAND!UDITED&INANCIAL3TATEMENTASOF&9 As per Audited Financial Statement as on 16.07.2011 B

As per Unaudited Financial Statement as on 16.07.2011 A

In Amount In % C=B-A D=C/A%

Variance

$UETOPROPOSEDDIVIDEND

$UETOPROPOSEDBONUSSHARESANDPROPOSEDDIVIDEND

Reason for Variance

Schedule 35

108


4OTAL#APITALAND,IABILITIESTO 0AID5P#APITAL Reserve and surplus $EBENTUREAND"OND Borrowings $EPOSITSAB A$OMESTIC#URRENCY b. Foreign Currency Income Tax Liability Other Liablities 4OTAL!SSETSTO Cash and Bank Balance Money at Call and Short Notice Investments ,OANSAND!DVANCES.ET a. Real Estate Loan 2ESIDENTIAL2EAL%STATE,OAN%XCEPT0ERSONAL(OMELOANUPTO2S,ACS "USINESS#OMPLEX2ESIDENTIAL!PARTMENT#ONSTRUCTION,OAN 3. Income generating Commercial Complex Loan /THER2EAL%STATE,OAN)NCLUDING,ANDPURCHASE0LOTTING b. Personal Home Loan of Rs. 80 Lacs or Less c. Margin Type Loan d. Term Loan E/VERDRAFT,OAN42,OAN7#,OAN f. Others &IXED!SSETS.ET .ON"ANKING!SSETS.ET Other Assets

1.2 1.4

2.7

1.6 1.7 2.1 2.2 2.3

Particulars

S. N.

!SATENDOFTHETH1UARTER OFTHE&ISCAL9EAR

1,103,455 13,511,246 500,032 4,877,826 18,911,022 1,733,730 2,108,451 2,074 1,059,183 4,240,928 516,613

This Quarter Ending as on 32.03.2068 (16.07.2011) Unaudited

Previous Quarter Ending as on as on 30.12.2067 (13.04.2011) Unaudited 955,844 370,965 12,963,246 768,943 4,632,087 360,000 17,579,756 1,701,478 2,121,468 6,116 964,058 4,250,328 618,382

589,230 12,206,466 500,701 3,441,261 16,305,633 1,428,777 1,982,987 14,798 908,772 3,725,069 401,992

Corresponding Previous Year Quarter Ending as on 32.03.2067 (16.07.2010) Audited

2SIN@


109

#APITAL&UNDTO2ISK7EIGHTED!SSETS27! .ON0ERFORMING,OAN.0, TO4OTAL,OAN 4OTAL,OAN,OSS0ROVISIONTO4OTAL.0, #OST/F&UND!NNUALIZED #REDITTO$EPOSIT2ATIO#ALCULATEDASPER.2"$IRECTIVES Additional Information !VERAGE9IELD,OCAL#URRENCY !NNUALIZED h!VERAGE#OST,OCALCURRENCYFUNDADJUSTEDFOR#22FACTOR !NNUALIZED h .ET)NTEREST3PREAD,OCALCURRENCY 2ETURNON%QUITY!NNUALIZED 2ETURNON!SSETS!NNUALIZED

Profit and Loss Account Interest Income Interest Expenses !.ET)NTEREST)NCOME &EES #OMMISSIONAND$ISCOUNT Other Operating Income &OREIGN%XCHANGE'AIN,OSS.ET "4OTAL/PERATING)NCOME! Staff Expenses Other Operating Expenses #/PERATING0ROlT"EFORE0ROVISION" Provision for Possible Losses $/PERATING0ROlT# .ON/PERATING)NCOME%XPENSES.ET Write Back of Provision for Possible Loss* %0ROlT&ROM2EGULAR!CTIVITIES$ %XTRAORDINARY)NCOME%XPENSES.ET &0ROlTBEFORE"ONUSAND4AXES% Provision for Staff Bonus Provision for Tax '.ET0ROlT,OSS& Ratios

3 3.1 3.2 3.4 3.6 3.7 3.8 3.10 3.12 3.13 4

This Quarter Ending as on 32.03.2068 5NAUDITED 3,104,232 2,096,038 95,173 255,430 445,073 46,308 179,122 65,347 188,904 At the End of this Quarter

Previous Quarter Ending as on as on 30.12.2067 5NAUDITED 2,193,717 1,512,381 69,638 169,782 305,594 43,605 169,003 45,221 130,735 At the End of Previous Quarter

Corresponding Previous Year Quarter Ending as on 32.03.2067 !UDITED 2,269,704 1,443,694 78,797 130,337 343,850 62,351 56,621 53,836 146,620 At the End of Corresponding Previous Year Quarter

110
