Beruflich Dokumente
Kultur Dokumente
x/<\d Accountants
BKR
6. To the best of our information and according to the explanation given to us and from our examination of the books of accounts of the Bank, we have not come across any case where the Board or Directors or any office bearer of the Bank have acted contrary to the provisions of law, or committed any misappropriation or caused any loss or damage to the Bank and violated Directives issued by Nepal Rastra Bank or acted in a manner, as would jeopardize the interest and security of the Bank and its depositors. 7. The business of the Bank has been conducted satisfactorily and found within its authority. 8. We have relied upon the audited Financial Statements of the subsidiary company conducted by an independent auditor and the professional competence of such auditor is adequate for expressing our opinion on consolidated Financial Statements. 9. In our opinion and to the best of our information and according to the explanation given to us, the said financial statements read together with the Significant Accounting Policies (Schedule 32) and Notes thereon (Schedule 33), give a true and fair view -
I N T I I M A T I O I I A L
in case of Balance Sheet, of the state of affairs of the Bank as at July 16, 2010 (Ashadh 32, 2067), in case of Profit & Loss Account, of the operating results of the Bank for the year ended on that date, and in case of Cash Flow Statement, the cash flows of the Bank for the year ended on that date, in accordance with Nepal Accounting Standards or relevant practices, the directives from Nepal Rastra Bank, Bank and Financial Institution Act, 2063 and Company Act, 2063.
5. The capital fund and risk bearing fund of the bank are adequate considering the Directives issued by the Nepal Rastra Bank.
Previous Year Rs. 1,448,620,500 1,681,620,137 300,000,000 1,681,305,000 37,348,255,840 463,138,615 338,011,450 80,232,454 526,213,508 43,867,397,504 Previous Year Rs. 674,395,434 2,648,596,348 49,520,689 552,888,297 10,826,379,001 27,589,933,041 660,988,986 864,695,708 43,867,397,504
(0.16)
S. P. Shrestha Chairman
S. P. Poudyal Director
D. G. Agrawal Director
A. P. Bazgain Director
M. Ahmed Director
S. Chatterjee Director
Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants
S. P. Shrestha Chairman
S. P. Poudyal Director
D. G. Agrawal Director
A. P. Bazgain Director
M. Ahmed Director
S. Chatterjee Director
Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants
S. P. Shrestha Chairman
S. P. Poudyal Director
D. G. Agrawal Director
A. P. Bazgain Director
M. Ahmed Director
S. Chatterjee Director
Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants
1,509,275,977 (10,269,424,969) (2,565,255,703) (2,607,453,948) (5,031,956,617) (64,758,702) 7,286,201,144 8,992,444,788 (1,606,405,000) (99,838,644) (180,198,859) (130,109,339) (204,010,062) 146,097,809 7,822,733 (318,267,960) (318,267,960) (1,972,414,668) 3,372,512,471 1,400,097,803 1,400,097,803
1,076,545,791 (4,818,810,255) 1,399,472,403 132,728,761 (6,250,689,515) (100,321,904) 5,881,870,592 5,433,208,373 321,305,000 127,357,220 (1,084,175,283) (1,040,972,089) (131,063,717) 85,451,323 2,409,200 (354,059,430) 60,000,000 (414,059,430) 701,371,416 2,671,141,055 3,372,512,471
0.15
S. P. Shrestha Chairman
S. P. Poudyal Director
D. G. Agrawal Director
A. P. Bazgain Director
S. Chatterjee Director
M. Ahmed Director
Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants
BKR
NABIL BANK LIMITED
I N T E R N A T I O N A L
5. The capital fund and risk bearing fund of the bank are adequate considering the Directives issued by the Nepal Rastra Bank.
Schedule
1 2 3 4 5 6
Total Assets
1. Cash Balance 2. Balance with Nepal Rastra Bank 3. Balance with Banks/Financial Institutions 4. Money at Call and Short Notice 5. Investment 6. Loans, Advances and Bills Purchased 7. Fixed Assets 8. Non Banking Assets 9. Other Assets
52,150,237,343 Schedule
8 9 10 11 12 13 14 15 16
Total
Contingent Liabilities Directors' Declaration Table of Capital Fund Credit Risk Credit Risk Mitigation Operation Risk Market Risk Principal Indicators Principal Accounting Policies Notes to Accounts Statement of Promoters' Loan Comparison of Unaudited and Audited Financial Statement Schedule 17 Schedule 29 Schedule 30(A1) Schedule 30(B) Schedule 30(C) Schedule 30(D) Schedule 30(E) Schedule 31 Schedule 32 Schedule 33 Schedule 34 Schedule 35
52,150,237,343 (0)
43,867,397,504 (0)
S. P. Shrestha Chairman
S. P. Poudyal Director
D. G. Agrawal Director
A. P. Bazgain Director
M. Ahmed Director
S. Chatterjee Director
Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants
Schedule
18 19
3. Commission and Discount 4. Other Operating Income 5. Exchange Income Total Operating Income
20 21 22
6. Staff Expense 7. Other Operating Expense 8. Exchange Loss Operating Profit before Provision for Possible Losses
23 24 22
25
355,829,115 1,707,132,679
45,722,434 1,570,204,646
10. Non Operating Income /(Expense) 11. Provision for Possible Losses Write Back Profit from Regular Activities
26 27
28
34,321,843 1,787,701,056
43,521,866 1,626,534,481
13. Provision for Staff Bonus 14. Provision for Income Tax Current Tax Prior Period Tax Deferred Tax
Net Profit/(Loss)
Schedules 18 to 28 form integral part of the Profit and Loss Account.
1,139,099,399
1,031,053,098
S. P. Shrestha Chairman
S. P. Poudyal Director
D. G. Agrawal Director
A. P. Bazgain Director
M. Ahmed Director
S. Chatterjee Director
Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants
Schedule
Total Expense
1. Accumulated Loss up to Last Year 2. Current Year's Loss 3. General Reserve 4. Contingent Reserve 5. Institution Development Fund 6. Dividend Equalization Fund 7. Employees Related Reserve 8. Proposed Cash Dividend 9. Proposed Stock Dividend (Bonus Shares) 10. Special Reserve Fund 11. Exchange Fluctuation Fund 12. Capital Redemption Reserve 13. Capital Adjustment Fund 14. Deferred Tax Reserve 15. Investment Adjusment Reserve
1,255,921,625
1,192,753,087
1,253,386,800 2,534,825
1,135,557,990 57,195,097
S. P. Shrestha Chairman
S. P. Poudyal Director
D. G. Agrawal Director
A. P. Bazgain Director
M. Ahmed Director
S. Chatterjee Director
Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants
1,509,980,772 (10,272,053,452) (2,565,255,703) (2,607,453,948) (5,031,956,617) (67,387,185) 7,356,184,194 9,062,444,788 (1,606,405,000) (99,855,594) (248,258,222) (200,109,339) (202,069,424) 146,097,809 7,822,733 (318,267,960) (318,267,960) (1,972,414,668) 3,372,512,471 1,400,097,803 1,400,097,803
1,076,545,791 (4,818,810,255) 1,399,472,403 132,728,761 (6,250,689,515) (100,321,904) 5,881,870,592 5,433,208,373 321,305,000 127,357,220 (1,084,175,283) (1,040,972,089) (131,063,717) 85,451,323 2,409,200 (354,059,430) 60,000,000 (414,059,430) 701,371,416 2,671,141,055 3,372,512,471
*Increment in share capital due to issue of bonus shares not reflected. (0.15)
S. P. Shrestha Chairman
S. P. Poudyal Director
D. G. Agrawal Director
A. P. Bazgain Director
S. Chatterjee Director
M. Ahmed Director
Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants
Schedule 1
Particulars
*Share Capital at the face includes paid up capital and proposed bonus shares.
Share Ownership
Previous Year Rs.
482,860,500 59,394,900 96,574,700 289,724,100 37,166,800 482,873,500
%
50.00 1. Local Ownership 6.15 10.00 30.00 3.85
Particulars
1.1 Government of Nepal 1.3 "Ka" Class Licensed Institutions 1.4 Other Licensed Institutions 1.5 Other Entities 1.6 General Public 1.7 Others*
%
50.00 6.15 10.00 30.00 3.85 50.00
965,734,000
100.00
Total
100.00
1,449,124,000
*Others include promoters shares divested by NIDC, which is freely traded in stock exchange, NEPSE.
Schedule 2
Particulars
208,451,040 5. Other Reserve and Fund 10,500,000 100,000,000 95,373,040 2,578,000 a. Contingent Reserve b. Institution Development Fund c. Dividend Equalization Fund d. Special Reserve Fund e. Assets Revaluation Reserve f. Deferred Tax Reserve
g. Other Free Reserve (Interest Spread Reserve) h. Other Reserve (Investment Adjustment Reserve)
1,805,980,925
Schedule 3
Particulars
2.
300,000,000
Total (1+2)
300,000,000
Schedule 4
Particulars
Schedule 5
Particulars
Contd.
Particulars
1.1 "Ka" Class Licensed Institutions 1.2 Other Licensed Financial Institutions 1.3 Other Organized Institutions 1.4 Individuals 1.5 Others 2. Foreign Currency 2.1 "Ka" Class Licensed Institutions 2.2 Other Licensed Financial Institutions 2.3 Other Organized Institutions 2.4 Individuals 2.5 Others D. Certificate of Deposit 1. Organized Institutions 2. Individuals 3. Others Total (A+B+C+D) Total Deposits (1+2)
37,789,802,078 46,410,700,628
Deposit in GL Difference
Reconciliation Interest recovered from Current account Interest recovered from Call account Investment in Nabil Investment Banking Interest expense deposited in respective deposit accounts
Schedule 6
Particulars
Schedule 7
Particulars
39,907,521 3. Employees Welfare/ Leave Fund 147,866,771 4. Provision for Staff Bonus 1,842,241 5. Interest Payable on Deposits 712,214 6. Interest Payable on Borrowings 25,728,247 7. Unearned Discount and Commission 187,561,352 8. Sundry Creditors 9. Branch Reconciliation Account
750,000 10. Provision for Audit Expense 11. Deferred Tax Liabilities
644,796,677
Schedule 8
Particulars
Schedule 9
2,648,596,348 1. Nepal Rastra Bank 602,191,896 2,655,875,881 a. Current Account 602,191,896 (7,279,533) b. Other Account Note: Balance as per the confirmation statements is Rs. 709,464,759
Schedule 10
41,976,883 1. Local Licensed Institutions 47,418,553 41,976,883 a. Current Account 47,418,553 b. Other Account 7,543,806 2. Foreign Banks 7,543,806 a. Current Account b. Other Account 49,520,689 Total 47,418,553 Note: Balance as per the confirmation statements is Rs. 472,805,855
Schedule 11
Total
Schedule 12
Others
5,865,884,661 2,075,671,779 186,999,085 5,391,118,185 159,857,000 1,257,000 1,581,114 13,682,368,823 11,452,210 13,670,916,613
1,838,819,440 1. Nepal Government Treasury Bills 2. Nepal Government Saving Bonds 1,867,283,222 3. Nepal Government Other Securities 4. Nepal Rastra Bank Bonds 272,428,764 5. Foreign Bonds 77,900,000 6. Local Licensed Institutions 6,732,829,457 7. Foreign Banks 82,501,900 8. Organized Institutions' Shares 9. Organized Institutions' Bonds and Debentures 10. Other Investments: 1,257,000 10.1. NCM Mutual Fund (100,000 units @ Rs.10 & 100,000 units Right Share @ Rs. 2.57. Market Value per unit Rs. 31.83) 1,785,753 10.2. SWIFT Investment (denominated in ) 10,874,805,536 48,426,535 10,826,379,001 Total Investment Provision Net Investment
Market Value
170,357,105 Not Listed 49,495,875 55,566,980 3,105,000 Not Listed 28,950,000 Not Listed Not Listed 33,239,250 Not Listed Not Listed Not Listed Not Listed Not Listed 175,546,875 -
Provision
-
82,501,900 1. Investment in Shares 50,720,000 1.1 Rural Microfinance Development Centre Limited (507,200 ordinary shares of Rs. 100 paid up) 9,096,400 1.2 Nirdhan Utthan Bank Limited [152,295 ordinary shares of Rs. 100 paid up (Including Bonus Shares 61,331)] 3,600,000 1.3 Chhimek Bikash Bank Limited [113,402 ordinary shares of Rs. 100 paid up (Including Bonus Shares 39,601) 1,500,000 1.4 Deprosc Development Bank Limited [22,500 ordinary shares of Rs. 100 paid up (Including Bonus Shares 7,500) 1,500,000 1.5 Sudur Paschimanchal Grameen Bikash Bank Limited (15,000 ordinary shares of Rs. 100 paid up) 3,000,000 1.6 Purbanchal Grameen Bikash Bank Limited* 30,000 ordinary shares of Rs. 100 paid up 3,000,000 1.7 Madhya Paschimanchal Grameen Bikash Bank Limited (30,000 ordinary shares of Rs. 100 paid up) 2,000,000 1.8 Sanakisan Bikash Bank Limited (20,000 ordinary shares of Rs. 100 paid up) 6,600,000 1.9 Swabalamban Bikash Bank Limited [84,150 ordinary shares of Rs. 100 paid up (Including Bonus Shares 18,150)] 1,235,500 1.10 Karja Suchana Kendra Limited [14,120 ordinary shares of Rs. 100 paid up (Including Bonus Shares 1,765)] 125,000 1.11 Jeevan Laghu Bittiya Bikas Bank (25,000 ordinary shares of Rs. 5 paid up) 1.12 National Banking Training Institute (12,000 ordinary shares of Rs. 100 paid up) 125,000 1.12 Nepal Clearing House Limited (25,000 ordinary shares of Rs. 100 paid up) 1.13 Nabil Investment Banking Limited (700,000 ordinary shares of Rs. 100 each) 1.14 Visa Worldwide Pte. Limited (6,166 units of Class C Common Stock) 1.15 MasterCard Worldwide. (Inc.) (1114 units Class B Common Stock) 272,428,764 2. Investment in Debentures and Bonds 77,939,729 2.1 Development Bank of Singapore Bonds (Bonds of face value USD 1,000,000 at coupon rate 7.875% matured on 10 August 2009) 194,489,035 2.2 ICICI Bank Bonds (Bonds of face value USD 2,500,000 at coupon rate 6.375% maturing on 30 April 2022) 354,930,664 Total Investment 3. Provision for Loss 26,790,780 3.1 Up to Previous Year 21,635,755 3.2 Addition/(Writeback) This Year Total Provision 48,426,535
186,999,085
175,546,875
11,452,210
Note : Deprosc Development Bank Limited, Sudur Paschimanchal Grameen Bikash Bank Limited, Madya Paschimanchal Grameen Bikash Bank Limited, Karja Suchana Kendra Limited, Jeevan Laghu Bittiya Bikash Bank Limited, National Banking Training Institute, Nepal Clearing House Limited have not declared and distributed dividend in the last three years. *Shares of Purbanchal Grameen Bikash Bank Ltd. was last traded on 25th November 2009.
Schedule 12.1
Schedule 12.2
11,452,210
48,426,535
36,974,325
(21,635,755)
11,452,210
48,426,535
36,974,325.00
(21,635,755.00)
Schedule 12.3
227,702,105
*For the shares, which are not listed in Nepal Stock Exchange, cost of acquisition is considered as the market price.
Schedule 13
(As at 16 July 2010) Loans & Advances Domestic Deprived Sector Insured Uninsured
16,914,282 16,914,282 5,506,547 5,506,547 22,420,829 42,286 1,376,637 1,418,922 1,109,172,847 1,109,172,847 29,960,135 29,960,135 1,139,132,982 11,091,604 29,960,135 41,051,739
Other
31,238,444,624 31,237,184,543 1,260,081 449,551,584 59,020,380 22,730,859 367,800,344 31,687,996,208 322,482,113 157,510 14,755,095 11,365,430 367,800,344 716,560,492 267,721,752 1,197,728 44,072,810 23,525,833 53,877,409 390,395,532 326,164,960 326,164,960 30,971,435,715
Foreign
138,391,525 138,391,525 1,263,256 1,263,256 139,654,781 1,383,355 1,263,256 2,646,611 1,023,300 448,550 1,471,850 1,174,761 1,174,761 137,008,170
Domestic
8,477,407 8,477,407 8,477,407 84,774 84,774 829,699 1,037,883 1,867,582 1,782,808 (1,782,808) 8,392,633
Foreign
33,286,481 33,286,481 33,286,481 332,865 332,865 767,888 767,888 435,023 (435,023) 32,953,616
Total
41,763,888 41,763,888 41,763,888 417,639 417,639
40,096 10,061,781 869 1,972,867 2,500,565 2,013,832 12,562,346 594,910 28,489,393 (594,910) 28,489,393 21,001,907 1,098,081,243
1,597,587 280,444,516 1,197,728 44,073,679 23,525,833 1,037,883 59,837,274 2,635,470 409,079,030 2,217,831 2,812,740 355,829,115 (2,217,831) 353,016,375 41,346,249 32,268,873,283
Schedule 13 (A)
Particulars
Schedule 14
Particulars
Assets Building
180,674,249 180,674,249 38,865,037 7,090,461 45,955,498 134,718,751 61,445,677 196,164,429
Vehicles
124,609,970 56,490,816 (15,873,979) (5,530) 165,221,277 59,186,425 17,974,302 (11,427,136) (4,341) 65,729,250 99,492,027 99,492,027
Machinery
-
Office Equipment 387,638,672 58,905,250 (9,427,552) (1,890,767) 435,225,602 236,057,406 43,195,624 (8,470,561) (1,629,154) 269,153,315 166,072,288 166,072,288
Software
9,709,797 32,635,406 (749,661) 41,595,542 2,801,357 3,856,875 (749,661) 5,908,571 35,686,971 10,472,486 46,159,457
Others
241,517,149 30,134,411 271,651,560
1. Cost Price a. Previous Year Balance b. Addition during the Year c. Revaluation/Write Back This Year d. Sold during the Year e. Write off during the Year Total Cost (a+b+c+d+e) 2. Depreciation 357,939,679 a. Up to Previous Year 60,393,414 b. For This Year c. Revaluation/Write Back This Year (8,305,184) d. Depreciation on Sold Assets (73,117,684) e. Depreciation on Writen Off Assets 336,910,225 Total Depreciation 365,722,463 3. Book Value (WDV*) (1-2) 241,517,149 4. Land 24,874,227 5. Pending Capitalization 28,875,147 6. Leasehold Assets 660,988,986 Total (3+4+5+6) * Written Down Value
Schedule 15
Grand Total
Schedule 16
221,088,970 (221,088,970)
Schedule 16(A)
Total
221,088,970 -
Schedule 17
Particulars
3,350,955,876 4. Guarantees/Bonds 134,366,161 3,216,589,715 a. Bid Bonds b. Performance Bonds c. Other Guarantees/Bonds 5. Unpaid Shares in Investment
168,006,559 6. Forward Exchange Contract Liabilities 320,861,014 7. Bills under Collection 568,339,246 8. Acceptance & Endorsement 9. Underwriting Commitment
2,202,707,048 10. Irrevocable Loan Commitment 208,419,989 11. Guarantee issued against Counter Guarantee of Internationally Rated Bank 291,823,791 12. Advance Payment Guarantee 13. Financial Guarantee 14. Income Tax
11,629,159,592
Total
13,452,814,476
Schedule 18
Particulars
290,360,349 B. Investment 269,187,210 201,593,273 67,593,937 17,857,386 5,275,718 12,581,668 3,315,753 3,315,753 1. Government Securities a. Treasury Bills b. Development Bonds c. National Saving Certificates 2. Foreign Securities a. Development Bank of Singapore Bond b. ICICI Bank Bond 3. Nepal Rastra Bank Bonds 4. Debenture & Bonds a. Bank/Financial Institutions b. Other Organizations 5. Interbank Investment a. Bank/Financial Institutions b. Other Organizations
16,659,695 D. Money at Call and Short Notice 1,682,210 14,977,485 1. Local Banks/Financial Institutions 2. Foreign Banks
307,919,338 E. Others 233,193,974 74,725,364 2,798,486,196 1. Certificate of Deposits 2. Inter-Bank/Financial Institutions Loan 3. FCY Placements 4. Staff Loan Total
4,047,725,656
Schedule 19
Particulars
91,606,869 B. Borrowings 25,366,951 34,187,887 32,052,031 1. Debentures & Bonds 2. Loan from Nepal Rastra Bank 3. Inter Bank /Financial Institutions Borrowing 4. Other Organized Institutions 5. Others C. Others
1,153,280,052
Total
1,960,107,902
Schedule 20
Particulars
147,703,322 B. Commission 38,217,054 29,855,202 2,968,464 53,749,826 22,912,776 1. Letters of Credit 2. Guarantees 3. Collection Fees 4. Remittance Fees 5. Cards 6. Share Underwriting/Issue 7. Government Transactions 8. Agency Commission 9. Exchange Fee
215,481,543
Schedule 21
Particulars
169,548,006
Schedule 22
Particulars
Schedule 23
Particulars
Schedule 24
Particulars
6,109,339 4. Insurance 16,656,509 5. Postage, Telex, Telephone & Fax 3,687,486 6. Office Equipment and Furniture Repair 3,128,308 7. Travelling Allowances & Expenses 17,063,055 8. Printing & Stationery 361,342 9. Books & Periodicals 11,980,090 10. Advertisements 833,829 11. Legal Expenses 715,220 12. Donations 4,170,320 13. Expenses relating to Board of Directors 2,388,000 1,782,320 a. Meeting Fees b. Other Expenses
1,158,142 14. Annual General Meeting Expenses 750,000 15. Expenses relating to Audit 475,000 275,000 a. Audit Fees b. Other Expenses 16. Commission on Remittances
67,894,631 17. Depreciation on Fixed Assets 18. Amortization of Pre-Operating Expenses 19. Share Issue expenses
21,554,584 20. Technical/Consultancy Services Fee 21. Entertainment 22. Written Off Expenses
17,902,914 23. Security Expenses 158,683 24. Credit Guarantee Premium 25. Commission & Discount
40,007,660 26. Others 14,677,445 2,565,079 3,872,846 5,665,075 563,000 2,744,427 9,919,788 265,158,033 a. Fuel Expenses b. Tea/ Coffee/ Snacks c. Contract Service Expense d. Prize Expense e. Customer Relations and Sponsorship f. Membership Fees g. Janitorial h. Others Total
334,186,212
Schedule 25
Particulars
Schedule 26
Particulars
1. Profit/(Loss) on Sale of Investments
(219,098) 2. Profit/(Loss) on Sale of Fixed Assets 2,409,200 3. Dividend (Net) 2,190,102 4. Subsidies Received from Nepal Rastra Bank a. Compensation Agreement for Losses of Specified Branches b. Interest Indemnity c. Exchange Counter 5. Others Total Non-Operating Income/(Loss)
6,454,724
Schedule 27
Particulars
10,617,867
Total
39,791,809
Schedule 28
Particulars
2. Voluntary Retirement Scheme Expenses
(1,723,113) 3. Bad Loan Written Off [28 (a)] (1,114,500) 4. Other Income/(Expense)
43,521,866
Total
34,321,843
Schedule 28(a)
Schedule 29
Note: Loan given to employees as per Employees' Rules and against Fixed Deposits/Government Securities not presented above. Mr. A. Sharma who became alternate director on 14 July 10 had taken loan from the Bank before becoming a director which was fully repaid by 20 August 2010. Principal outstanding as at 16 July 2010 was Rs.4,375K.
Schedule 30 (A1)
(70,000,000)
722,374,082
300,000,000 325,474,082 81,400,000 4,000,000 11,500,000
682,742,150
300,000,000 296,842,150 75,400,000 10,500,000
Total Capital Fund (Tier 1 and Tier 2) 1.3 Capital Adequacy Ratio
Tier 1 Capital to Total Risk Weighted Exposures Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures
4,390,228,607
3,727,082,787
Schedule 30(B)
As at 15 July 2009
Risk Weight e
0% 0% 0% 0% 0% 0% 0% 0% 20% 50% 100% 150%
Book Value a
635,986,600 549,454,618 7,941,372,185 315,384,221 1,904,313
Specific Provision b
Eligible CRM c
Net Value
70,700,000 16,000,000 -
0% 100% 20% 50% 100% 150% 20% 100% 20% 50% 100% 150%
4,148,542,814 18,460,597,300
3,805,321,321 2,997,985,566 8,775,918 6,197,599,423 476,389,705 176,140,600 215,352,658 66,861,614 2,194,941,799 53,551,204,528
4,148,542,814 18,256,351,185 3,551,845,426 2,997,985,566 2,595,826 6,188,425,716 55,891,391 166,197,683 203,900,448 66,861,614 1,565,770,426 51,920,363,905
20% 100% 20% 50% 100% 150% 75% 100% 60% 150% 100% 100% 150% 150% 100% 150% 100%
829,708,563 18,256,351,185 2,663,884,069 1,798,791,340 2,595,826 6,188,425,716 83,837,086 249,296,525 203,900,448 100,292,420 1,565,770,426 34,649,694,278
6,209,823,911 18,996,358,057 2,889,351,513 2,359,264,463 2,866,866,578 121,615,866 133,944,320 22,053,400 63,491,253 806,176,730 43,849,783,867
1,241,964,782 18,996,358,057 2,167,013,635 2,359,264,463 1,720,119,947 182,423,800 200,916,480 22,053,400 95,236,880 806,176,730 28,640,719,606
629,171,373 1,077,244,906
Schedule 30(B)
As at 15 July 2009
Risk Weight
e 0% 0% 10% 20% 20% 50% 100% 150% 50% 20% 50% 100% 150% 50% 20% 50% 100% 150% 50% 100% 100% 100% 100% 100% 100% 20% 50% 100% 200%
Eligible CRM
Net Value
Net Value
Risk Weighted
320,861,014 168,006,559 3,970,142,628 242,891,966 3,142,786,541 6,316,034 96,162,081 30,574,781 277,786,241 568,339,246 1,883,775,030 26,657,363 10,734,299,483 54,584,083,350
16,800,656 794,028,526 121,445,983 1,571,393,270 1,263,207 48,081,040 30,574,781 277,786,241 568,339,246 376,755,006 53,314,726 3,859,782,682 32,500,502,288
1,077,244,906
1,077,244,906
1,677,554,224
64,249,219,873
39,016,206,023
54,584,083,350
32,500,502,288
Schedule 30(C)
Gold
G'tee of MDBs
h
Total
390,720,893
47,690,930
28,334,900
148,995
466,895,717 -
Schedule 30(C)
Gold
G'tee of MDBs
h
Total
22,925,166
17,478,516
86,312,922
2,556,999
147,051,005
Schedule 30(D)
Year 1
1,645,206,144 179,693,027 144,164,143 251,919,712 23,524,679 2,244,507,705 15% 336,676,156
Year 2
1,220,260,515 156,234,754 97,444,578 196,487,415 15,856,571 1,686,283,833 15% 252,942,575
Year 3
1,032,048,605 150,608,550 87,574,553 209,926,167 2,513,400 1,482,671,275 15% 222,400,691 270,673,141 10 2,706,731,407
Last Year
226,423,387 10 2,264,233,871
10 2,706,731,407
10 2,264,233,871
Schedule 30(E)
S.No.
Currency
Position
23,795,808 143,068,726 14,943,502 4,116,175 4,050,972 222,253 3,216,068 2,448,011 725,840 163,555 370,084 160,623 192,537 359,782 11,045 1,847 1,585,740 12,725 199,445,290 5% 9,972,265 10 99,722,645
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
INR USD EUR GBP CHF AUD CAD SGD JPY CNY SAR QAR THB AED MYR SEK DKK HKD
14,865,412 1,910,130 153,866 35,672 56,310 (3,389) 44,880 44,934 843,803 14,788 18,532 7,801 82,990 17,645 473 180 121,606 1,320
Total Open Position (a) 199,000,784 Fixed Percentage (b) Capital Charge for Market Risk [c=(ab)] Risk Weight (reciprocal of capital requirement of 10%) in times (d) Equivalent Risk Weight Exposure [e=(cd)]
Schedule 31
1. Net Profit/Gross Income % 2. Earnings Per Share Rs. 3. Market Value per Share Rs. 4. Price Earning Ratio Times 5. Dividend (including bonus) on share capital % 6. Cash Dividend on Share Capital % 7. Interest Income/Loans & Advances % 8. Employee Expense/Total Operating Expense % 9. Interest Expense on Total Deposit and Borrowings % 10. Exchange Gain/Total Income % 11. Staff Bonus/ Total Employee Expenses % 12. Net Profit/Loans & Advances % 13. Net Profit/ Total Assets % 14. Total Credit/Deposit % 15. Total Operating Expenses/Total Assets % 16. Adequacy of Capital Fund on Risk Weighted Assets a. Core Capital % 12.12 11.35 10.78 b. Supplementary Capital % 1.44 1.09 1.52 c. Total Capital Fund % 13.56 12.44 12.31 17. Liquidity (CRR) % 6.87 3.83 3.26 18. Non Performing Loans/Total Loans % 3.35 1.32 1.38 19. Weighted Average Interest Rate Spread % 4.46 5.01 4.90 20. Book Net Worth per Share Rs. 301 337 381 21. Total Shares Number 4,916,544 4,916,544 4,916,544 22. Total Permanent Employees Number 372 426 441 Note: The denominators for calculation of S.N. 7, 12,13 & 15 are the average balance for the year. The interest income in S. N. 7 is the interest income from Loans and Investments only. The figure in S. N. 17 is the ratio of Cash & Bank Balance to Total Deposits.
2. 2.1
2.2
3. 3.1
4. 4.1
4.2
b.
c.
d.
e.
5. 5.1
Statement of Compliance The consolidated financial statements of the group and separate financial statements of the Bank have been prepared in accordance with Nepal Accounting Standards (NAS) except otherwise stated by NRB Directives, Bank & Financial Institutions Act 2006 and the Company Act 2006. The group and the Bank do not adopt accounting treatments that are inconsistent with NRB Directives and NAS and comply in all material respects. Basis of Preparation The assets and liabilities reported in consolidated financial statements of the group and the separate financial statements of the Bank are presented in Nepalese Rupees (NRs.) and are prepared on historical cost convention except for translated foreign currency value. Preparation of financial statements in conformity with NAS requires the use of certain critical accounting estimates and also requires management to exercise judgement in process of applying the Banks accounting policies. Basis of Consolidation The groups financial statements comprise consolidation of financial statements of the Bank and its subsidiary, Nabil Investment Banking Ltd. (Nabil Invest). Subsidiary is that enterprise controlled by the bank. Control exists when the bank has the power, directly or indirectly, to govern the financial and operating policies of an enterprise from the date that control commences until the date that control ceases. The financial statements of the subsidiary are included in the consolidated financial statement from the date that control effectively commences until the date that the control effectively ceases. The consolidated financial statements have been prepared in accordance with International Accounting Standard 27 Consolidated and Separate Financial Statements. In preparing the consolidated financial statements, the financial statements of the Bank and its subsidiary are combined line by line by adding together like items of assets, liabilities, equity, income and expenses. Transactions eliminated on consolidation: All intra group transactions and balances, income and expenses and any unrealised gains / losses arising from such intercompany transactions and balances are eliminated in full while preparing the consolidated financial statements. Summary of Significant Accounting Policies The principal accounting policies applied by the group and the Bank in the preparation of these financial statements are presented below. These policies have been consistently applied to all the years presented unless stated otherwise. a. Interest Income Interest income on loans and advances are recognised on cash basis as prescribed by NRB Directives, which however is not in accordance with NAS that prescribes recognition of revenue on accrual basis. The practice followed by the Bank (as per NRB Directives) is more conservative and prudent. Interest income on Investments including earnings from call accounts and fixed deposits and staff house loan is recognized on accrual basis. Interest accruals on
5.2
6. 6.1
6.2
7. 7.1
7.2
7.3
7.4
8. 8.1
bonds and debentures at the time of purchase are reduced from the cost of acquisition. Interest income received from the vendors / dealers under subvention scheme at the beginning of the loan tenure is initially recognised as liability and subsequently charged to Profit or Loss Account (Income Statement) as and when they are earned. Amortisation of premium on bonds and debentures are recognised as reversal of interest income.
b. Fees and Commission Income Commission on credit service (management) including renewals are recognised as and when credit line is approved or renewed. All other fees ancillary to credit services is recognised as and when services are rendered. Prepayment fee levied for pre-mature settlement of loans and advances are recognised at the time of credit settlement. Commission on guarantee exceeding NRs. 50,000 covering period more than a year is accounted for on accrual basis over the period of guarantee. Commission other than above are recognised immediately after issuance of guarantee. Commissions on LC issuance / amendment, draft issuance, card issuance are recognised at the time of issuance / amendment. Renewal fees and cancellation charges are recognised as and when services are renewed or cancelled. TC sales, bill purchases, remittance are recognised at the time of transactions. All other commissions are accounted after rendering of services.
c. Dividend Income Dividend on equity shares is recognised as and when right to receive is established. Dividend declared from net profit of pre-acquisition period is recognised as a recovery of part of cost unless it is difficult to segregate into preacquisition and post-acquisition dividend. In case there is a difficulty in segregation, such dividends are recognised as revenue. Dividend declared by resident companies are recorded at net of withholding tax, while declared by non resident companies are recorded at gross value. Tax deducted by non resident companies is recognised as Advance Tax to the extent adjustable with banks corporate tax liability.
d. Foreign Exchange Transactions Foreign currency assets and liabilities are translated into Nepalese Rupees at the mid exchange rate prevailing on the Balance Sheet date. Gain or loss realized on foreign exchange transactions is recognized on daily basis and shown under Trading Gain / (Loss) in Schedule 22. Gains/losses arising due to fluctuation in exchange rates of different foreign currencies is recognized on daily basis and shown as Revaluation Gain/(Loss). 25% of such revaluation gain is transferred to Exchange Fluctuation Fund charging Profit and Loss Appropriation Account as per NRB Directives.
Premium/discount on foreign exchange forward contract is accounted for at the time of transaction in Profit and Loss Account. e. Interest Expense Interest on deposit liabilities and bonds/borrowings from other banks are accounted for on accrual basis.
f.
Write Off Loan accounts graded Loss in compliance with NRB Directives are written off in the books as per Loan Write off Bye Law of the Bank 2005, approved by Nepal Rastra Bank and in compliance with Income Tax Act 2002, without prejudice to Bank's right to recovery. Amount recovered in respect of written off loans are recognized as income in Profit and Loss Account in the year of recovery.
g. Staff Bonus Provision for staff bonus is provided as per the Bonus Act, 1974.
h. Loans and Advances including Bills Purchased Loans and advances, overdrafts and bills purchased include direct finance provided to the customers. These comprise of short term loans, long term loans, consumer loans and loans given to priority and deprived sectors. These assets are classified as per NRB Directives. Loans and advances including bills purchased are stated net of loan loss provisions.
i.
Investment All investment securities are initially recognised at cost, being fair value of the consideration given, including acquisition charges associated with the investment. The investments held by the Bank comprise following 3 categories: i. Investments Held for Trading (HFT): These are the marketable investments and held with the primary intention of resale over a short period of time. These investments are initially measured at cost and subsequently recognised at market value. Gains or losses arising from trading / revaluation are recognised in Profit or Loss Account (Income Statement).
ii. Investments Available for Sale (AFS): These are the investments held with the primary intention to recover value of investments through sale rather than continuing to hold. These investments are initially measured at cost and subsequently recognised at market value. Gains or losses arising from sale / revaluation are recognised on Investment Adjustment Reserve / Retained Earning. The investments, which are classified under this category however not listed in the stock exchange, are carried at cost at the Balance Sheet. Amount equivalent to at least 2% of such investments are earmarked on Investment Adjustment Reserve from the Retained Earnings in line with the requirement of NRB, iii. Investments Held till Maturity (HTM): These investments are primarily intended to hold until the maturity and are stated at cost and carried at these values in the Balance Sheet until the maturity. Any impairment losses arising in such investments are provisioned and charged in the Profit or Loss
Account (Income Statement). Premiums paid while acquiring HTM Investments is recognized as the part of initial cost and subsequently amortized as reversal of interest income on proportionate basis until the maturity. j. All investments are subject to periodic review as required by NRB Directives.
Staff Loans Loans and advances granted to staff as per the banks policy are shown under Other Assets.
k. Fixed Assets and Depreciation Fixed assets are stated at cost less accumulated depreciation. Depreciation is charged to Profit & Loss Account on Written Down Value method over the estimated useful lives of fixed assets. Land is not depreciated. The depreciation rates applied for various asset categories are as follows: Nature of Assets Furniture Equipments Vehicles Computers Nabil Bank Computers Nabil Invest Building Depreciation Rate 25% 25% 20% 25% 40% 5%
In case of fixed assets purchased during the year and booked for more than one month, depreciation is charged from the subsequent month of booking. Depreciation on fixed assets sold or disposed off during the year is charged up to the previous month of such disposal. Leasehold assets (improvements) are amortized over the period of lease. Cost of computer software licences are capitalised and are amortized over a period of useful life of the software, estimated as 5 years from the date of acquisition. Non-consumable items having life less than one year and/or costing less than NRs. 5,000 are expensed off during the year of purchase.
l.
Stationery Stock Stationery stocks are inventories in the form of materials or supplies held by the group and the Bank to be consumed while rendering the services. Stationeries are measured either at the lower of cost or net realisable value (NRV), except for certain items that are specifically used only by the group and the Bank. Such specific items are measured at the lower of cost or replacement price. Stationeries are recorded at the weighted average cost basis and charged to revenue at the time of consumption.
m. Loan Loss Provision Provision for possible losses is made to cover the risks inherent in Banks assets portfolio. Provision for possible losses from loans, advances and bills purchased
are made at the rates ranging from 0.25% to 100% according to classification of such risk assets as per NRB directive. Additional Provision exceeding the regulatory requirement (Nepal Rastra Bank guideline) has been made in some accounts to ensure comfortable cushion. n. Gratuity & Provident Fund Gratuity liability & Banks provident fund contribution to employees computed as per Banks policy are expensed off on accrual basis. The Bank has put aside 100% fund required to meet its gratuity liabilities up to mid-July 2010. Total gratuity liability up to mid July 2003 is shown under Gratuity Fund of Other Liabilities (Schedule 7). Gratuity liability incurred thereafter together with Banks contribution to staff provident fund up to mid July 2010 has been accounted for as income of the concerned staff and transferred to the approved retirement fund, independent of the Banks management.
o. Accumulated Staff Leave Leave balance in excess of 75 days as on mid April is encashed each year. Accumulated staff leave liability is accounted for on accrual basis.
p. Contingent Liabilities The contingent liabilities comprise of: i. possible obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Bank; or
ii. present obligations that arise from past events but is not recognised because: it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. All letter of credit, bank guarantee and forward exchange contract liabilities have been shown in full amount as contingent liabilities in accordance with the directive issued by Nepal Rastra Bank. Besides above, all known liabilities wherever material are provided for and liabilities, which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed under contingent liabilities.
q. Income Tax Expense Income tax expense comprises of current and deferred income tax and additional income tax assessed by the Tax Auditor and taxation authorities. Disclosure of additional income tax in the Profit or Loss Account is made as required by NRB. Current tax liabilities (assets) are the amounts that are expected to be paid to (recovered from) the Inland Revenue Department in respect of income of current year. The tax rates (and tax laws) used for the computation are those that are enacted or substantively enacted by the Balance Sheet date. Accordingly, provision for current tax has been made with reference to the profit of the financial year based on the provisions of the Income Tax Act 2002 and amendments thereto.
Deferred taxes are recognized and provided for on temporary differences arising between taxable incomes and accounting incomes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are not recognised unless there is convincing evidence that there will be sufficient future taxable income available to realize such assets. Deferred tax assets & liabilities are netted off and presented either under Other Assets or under Other Liabilities. Deferred Tax Reserve is earmarked to the extent of outstanding balance of Deferred Tax Assets as per NRB guidelines.
r. Basis of Interest Computation Interest expenses on deposits/borrowings/bonds and interest income on loans & investments are computed on the basis of 365 days a year. Interest on foreign currency investments is computed on the basis of 365 days a year for GBP and 360 days a year for USD & EUR.
8.2
The Bank and its subsidiary adopt uniform accounting policies for like transactions and events in similar circumstances.
Schedule 33: Notes to Accounts 1. 1.1 1.1.1 Equity Changes in paid-up equity capital The Banks paid up equity capital has increased by NRs. 483.4 million during the year, after the distribution of 50% bonus shares.
Paid Up Capital as at 15.07.2009 Proposed Bonus Shares Paid-up Capital including Bonus Shares as at 15.07.2009 Additional Issue for Fraction Shares Paid Up Capital as at 16.07.2010 NRs. 965,747,000 NRs. 482,873,500 NRs. 1,448,620,500 NRs. 503,500 NRs. 1,449,124,000
1.2
Proposed enhancement of paid-up equity capital The Board has decided to propose stock dividend at the rate of 40% to make its paid up capital NRs. 2,028,773,600.
1.3
General Reserve Bank and Financial Institution Act, 2006 requires the Bank to transfer minimum 20% of Profit after tax to general reserve until it becomes double of the paid up capital. The Bank has transferred NRs. 228 million this year.
1.4
Contingent Reserve The Bank has set a reserve that is primarily intended to contribute for staffs medical treatment in case of those severe ailments not covered by medical insurance. The Bank has appropriated NRs. 1 million in the Contingent Reserve from this years net profit.
2. 2.1
2.2 2.2.1
Investment in Subsidiary As per the notification of Ministry of Finance in Official Gazette dated 17th August 2009 (01.05.2066) and circular of NRB vide Bai.Bi.Ni.Bi./Niti/Paripatra/15/066/67 dated 8th November 2009 (22.07.2066), the banks and financial institutions are required to establish a subsidiary company to operate merchant banking business. Accordingly, the Bank incorporated a subsidiary company, Nabil Investment Banking Ltd. (Nabil Invest) on 07th February 2010 to carry merchant banking business. Bank, previously, had set up a separate unit to conduct this business. The Bank has invested NRs. 70 million (70% of the total issued capital) in Nabil Invest. Nabil Invest received a license for commercial operation on 26th May 2010 under Securities Businessperson (Merchant Banker) Rules, 2007. The unit will commence full fledged operations from FY 2010/11. Investment in MasterCard and VisaCard Master Card International on conversion into a private stock corporation allocated its franchisee class B common stock to members in recognition of their membership interest. The bank presently holds 1114 Class B Common Stock having a par value of USD 0.0001 each.
2.2.2 2.2.3
2.3 2.3.1
2.3.2 2.4
Similarly, the Bank currently holds 6166 units of Class C Common Stock of Visa International allocated earlier after its conversion to VISA Inc. Available for Sale (AFS) Investment The shares investment in Microfinance Institutions (Gha class licensed institutions) is intended for deprived sector compliance. The market value of these investments, which are listed in Stock Exchange (NEPSE), is traded higher than their cost price. Though AFS investments are required to be valued at mark to market subsequently and differences to be charged in the Investment Adjustment Reserve, these shares investment are valued at cost considering inactive market and low transaction frequency. The Bank has set aside NRs. 4 million in the Investment Adjustment Reserve for total AFS investments of NRs. 162.7 million.
2.5
Leasehold Assets
NRs Particulars Bank 1. At Cost a. Upto last year b. Addition this year c. Deduction this year 2. Amortization a. Upto last year b. Addition this year c. Deduction this year 3. Remaining Value 50,964,550 47,915,874 11,292,645 (8,243,969) 20,830,139 19,040,727 10,033,381 (8,243,969) 30,134,411 FY 2009/10 Subsidiary 40,891 40,891 40,891 Group 51,005,441 47,915,874 11,333,536 (8,243,969) 20,830,139 19,040,727 10,033,381 (8,243,969) 30,175,302 Bank 47,915,874 38,437,086 12,378,811 (2,900,023) 19,040,727 14,436,493 7,501,219 (2,896,984) 28,875,147 FY 2008/09 Subsidiary Group 47,915,874 38,437,086 12,378,811 (2,900,023) 19,040,727 14,436,493 7,501,219 (2,896,984) 28,875,147
3. 3.1
Liabilities Deposits
NRs Particulars Interest Free Deposits Interest Bearing Deposits Total At Mid July 2010 8,620,898,550 37,789,802,078 46,410,700,628 2009 5,978,868,827 31,369,387,013 37,348,255,840 Increase Amount 2,642,029,723 6,420,415,065 9,062,444,788 % 44.19 20.47 24.26
3.2
Staff Housing Fund The Bank has been extending housing loans to its employees and therefore provision for staff housing fund as required by the Labour Act has not been made. The Bank has recognized interest on staff housing loan on accrual basis.
3.3
Contingent Liabilities Beneficiaries of the bank guarantees have claimed NRs. 26,327,363 after expiry, which the bank has not accepted as debt.
4. 4.1
Income and Deferred Tax The corporate tax liabilities of the group are computed and assessed individually. As per Income Tax Act 2002, the tax rates enacted and substantively enacted at the balance sheet date are 30% and 25% respectively for the Bank and Nabil Invest. The Banks corporate tax liability up to FY 2005/06 is cleared by tax authority while amended assessment of subsequent years is yet to be initiated. Additional tax of NRs. 831,939 related to FY 2008/09 has been provided for in the profit and loss account (Income Statement) of the Bank.
4.2
4.3
Nabil Invest has no corporate tax liability for current year 2009-10. Net deferred tax asset of NRs. 176,199 has been recognised after reducing deferred tax liability on depreciation from deferred tax assets on unused tax loss. The company expects to recover tax on unused tax loss from the taxable profits available in future. Explanation on relationship between tax expense and accounting profit is presented below:
NPR For the Year Group Bank Subsidiary (704,795) 1,624,477,982 Accounting Profit 1,625,182,778 30% 25% Rate of Income Tax Income tax at the applicable tax rate 487,554,833 (176,199) 487,378,634 Tax effect of expenses/income that are not deductible/included in determining taxable profit Donation 27,450 27,450 Provision of Other Assets (1,423) (1,423) Dividend Income (2,329,420) (2,329,420) (2,303,393) (2,303,393) Adjustment for Change in Other Permanent Difference 831,939 831,939 Total Tax Expenses 486,083,379 (176,199) 485,907,180 Total Tax Expenses as per books Current Tax Deferred Tax Prior Period Tax Total Tax Expenses
4.4
(176,199) (176,199)
4.5
Deferred tax assets of the Bank as at 16.07.2010 is NRs. 35.4 million. Following the tax audit for FY 2008/09, there was decline of deferred tax assets by NRs. 47.6 million due mainly to unclaimed provision for loan loss volume becoming zero. The same has been adjusted with corporate tax liability and the corresponding deferred tax reserve was transferred to the retained earning of FY 08/09. Deferred tax asset on unclaimed provisions for other assets have been restated and adjusted with deferred tax reserve. Details of temporary differences and deferred tax as at 16.07.2010 are presented below:
Year Particulars Provision for Leave Liability Provision for Gratuity Unclaimed Loan Loss Provision Provision for Investment Provision for Other Assets Fixed Assets Bank Subsidiary Carrying Amount: Rs. 466,104,446 / Rs. 1,940,637.73 Tax Base: Rs. 438,877,497 / Rs. 1,781,864.43 Unused Tax Loss Net Temporary Differences Deferred Tax Assets / (Liabilities) FY 2009-10 FY 2008-09 Assets / (Liabilities) Assets / (Liabilities) Bank Group Bank Group Subsidiary Subsidiary 43,216,232 43,216,232 39,907,521 39,907,521 90,033,208 90,033,208 92,996,957 92,996,957 159,345,847 159,345,847 11,452,210 11,452,210 48,426,535 48,426,535 505,631 505,631 505,631 505,631 (27,226,949) (158,773) (27,385,722) (22,766,727) (22,766,727)
4.6 4.7
117,980,333 35,394,100
318,415,765 95,524,729
318,415,765 95,524,729
5. 5.1
Non Performing Assets Amount of Non Performing Assets (both Gross and Net)
NPR Particulars Sub-Standard Doubtful Loss Total Amount 59,020,380 22,730,859 404,530,282 486,281,521 Loan Loss Provision 14,755,095 11,365,430 400,400,372 426,520,896 Net NPL 44,265,285 11,365,430 4,129,910 59,760,625
5.2
NPA Ratios
NPA Ratios Gross NPA to Gross Advances Net NPA to Net Advances (%) 1.47 0.19
5.3
5.4
5.5
6.
7. 7.1
Basel II Nabil Bank regards Basel II as an instrument that helps banks constantly improve its risk management system. Accordingly, it has revised its structure with the provision of Chief Risk Officer looking after all risks that a bank run in an integrated manner. Head of Credit Risk, Operational Risk, Market Risk and Other Risks report to Chief Risk Officer. Risk measurement units are manned as per requirement. These units review policies, product papers, systems, procedures, limits etc. on a regular basis to ensure the risks are effectively managed. They work in close coordination with Banks audit department which report directly to Boards Audit Committee. Structure of Risk Management Unit:
Chief Risk Officer
Credit Risk
Market Risk
Operation Risk
Other Risks
7.2
As to Credit Risk management, the Bank has drawn a clear demarcation between business generation and risk management unit. Without approval of risk management unit, no loan is sanctioned. Credit Policy of the Bank guides all the lending officials from credit screening to settlement. In order to lessen concentration risk, the Bank monitors
lending portfolio periodically and takes appropriate decision with regard to the exposure in a borrower and in a sector. Similarly, Investment Policy of the Bank guides the concerned officials for management of credit risks in investment portfolio. The Bank takes deposits, government securities, guarantees etc. as measures to mitigate credit risk. Eligible CRM as at mid July 2010 was NRs.1.68 billion. 7.3 With regard to market risk and liquidity risk management, the Bank has a very active ALCO which meets periodically to discuss and manage these risks as per the ALM policy/Investment Policy/Forex Policy approved by the Board. Similarly, there is a front office and back office concept to ensure compliance of policies/limits on a transaction level. For effective management of operational risk, the Bank has Standard Instruction Manual for all areas of work which incorporate international practices and Banks own experience. In operations, the Bank has put in place maker and checker concept with proper MIS to capture deviations if any. Reports about overall risk and capital of the Bank are sent to the Board periodically. The Bank has a policy to maintain adequate capital against unexpected losses. It has been augmenting its capital base through retention of profit and issuance of subordinated term debts to support risk weighted assets growth. Capital Structure and Capital Adequacy: Tier 1 capital and a breakdown of its components:
a b c d e f g h i j k l m n o p q Core Capital (Tier 1) Paid up Equity Share Capital Irredeemable Non-cumulative preference shares Share Premium Proposed Bonus Shares General Reserves Retained Earnings Current year Profit/(loss) Capital Redemption Reserves Capital Adjustment Reserves Dividend Equalization Reserves Debenture Redemption Reserves Deferred Tax Reserve Other Free Reserves Less: Goodwill Less: Fictitious Assets not written off Less: Investment in equity of licensed Financial Institutions Less: Investment in equity of institutions having financial interests NPR 3,667,854,525 1,449,124,000 74,000.00 579,649,600 1,568,500,000 2,534,825 100,000,000 35,394,100 2,578,000 (70,000,000)
7.4
7.5
7.6
7.7 7.7.1
7.7.2
7.7.3
Details of Subordinated Term Debt: The Bank has issued Nabil Bank Bond 2075 (2018 AD) for NRs. 300 million in July/August 2008. Main features of Nabil Bank Bond 2075 are as follows: Maturity period: 10 Years. Interest rate: 8.5% per annum. Interest Payment frequency: Half Yearly. Claim in case of liquidation: After depositors. Debenture Redemption Reserve shall be created from the 6th year.
7.7.4
Deductions from Capital: The bank has deducted NRs.70 million from its Core Capital being it investment in its subsidiary.
7.7.5
7.8 7.8.1
Risk Exposures: Risk weighted exposures under each 11 categories of Credit Risk:
S.N. 1 2 3 4 5 6 7 8 9 10 11 Categorises Claims on Government & Central Bank Claims on Other Financial Entities Claims on Banks Claims on Domestic Corporates and Securities Firms Claims on Regulatory Retail Portfolio Claims Secured by Residential Properties Claims secured by Commercial real estate Past due claims High Risk claims Other Assets Off Balance Items TOTAL NPR Risk Weighted Exposure 3,840,742,104 18,256,351,185 2,663,884,069 1,798,791,340 6,188,425,716 86,432,912 249,296,525 1,565,770,426 4,366,511,745 39,016,206,023
7.8.2
Risk weighted exposures for Credit Risk, Market Risk and Operational Risk:
NPR Particulars Amount Risk Weighted Exposure for Credit Risk 39,016,206,023 Risk Weighted Exposure for Operational Risk 2,706,731,407 Risk Weighted Exposure for Market Risk 99,722,645 Adjustment under Pillar - II Add: 3% of the total RWE due to non compliance to disclosure Add: % of the total deposit due to insufficient Liquid Assets Total Risk Weighted Exposures 41,822,660,075
7.8.3
8. 8.1
Less than a month 1-3 Months 3-6 Months 6-12 months 1-2 Year Above 2 year Total
Less than a month 1-3 Months 3-6 Months 6-12 months 1-2 Year Above 2 year Total
Less than a month 1-3 Months 3-6 Months 6-12 months 1-2 Year Above 2 year Total
8.2
Inter-Branch Reconciliation: There are no unreconciled entries/balances in case of inter-branch transactions as on the reporting date.
9.
14 15 16 17 18
19
20 21 22 23 24 25
Capital & Liabilities Current Deposits 2,719 Savings/ Call Deposits 1,727 Fixed Deposits 2,050 Bonds / Debentures Borrowings: Call / Short Notice Inter-Bank / Financial Institutions Refinance Others Other Liabilities and Provisions 727 Sundry Creditors Bills Payable 85 Accrued Interest Payable 1 Provisions Others 641 Payable to Institutions under Commitm 644 Unutilised Credit Facilities 81 Letter of Credit / Guarantee (Net) 4,399 Repo Payable of facilities under mentioned in Others/ Net Worth Total Liabilities 12,348 Net Assets Cumulative Net Assets 6,153 6,153
2,714 75 75 256 85
4,185 256 85
4,427 256 85
5,902 21,352 1,335 300 1,030 85 774 171 7 1 120 3,835 33,881 (4,049) 0
8,621 23,079 14,711 300 75 75 2,525 425 1 774 1,325 692 231 5,340 3,835 59,408 0
10.
Annual average of loans, investments, deposits and bonds/borrowings have been taken while computing above. 11. Related Parties Disclosures
11.1 The Bank has not entered into the financial transactions with the parties where directors have financial interest.
11.2 Key Management Personnel Key Management Personnel of the Bank includes Directors of the Board and Chief Executive Officer: Mr. S. P. Shrestha Mr. S. P. Poudyal Mr. D. G. Agrawal Mr. A. P. Bazgain Mr. T. Awal Mr. M. Ahmed Mr. S. Chatterjee Mr. J. P. Kanoria Mr. N.K. Chaudhary Mr. A. Sharma Mr. A. C. Shrestha Chairman Director Director Director Director Director Director Alternate Director Alternate Director Alternate Director Chief Executive Officer (Officiating)
11.3 Compensation to Key Management Personnel of the Bank Short term employee benefits paid to Mr. Anil K. Shah as the Chief Executive Officer (from 17 July to 9 December 2009) amounts to NRs. 6.3 million. General Manager Mr. Amrit Charan Shrestha was appointed officiating CEO on 10th December 2009. A total of NRs. 3.21 million is paid as regular salary and allowance inclusive of officiating CEO Allowance (NRs. 0.9 million). 11.4 Transaction with Key Management Personnel of the Bank The following provides transactions between the Bank and Key Management Personnel of the Bank during the year. Amount NRs. Nature of Transaction Current Year Meeting Fees Paid Allowance and other expenses relating to Board Meetings 2,708,000 2,746,715
11.5 The Bank has transferred fixed assets worth NRs. 1.94 million purchased for Nabil Invest on 16.07.2010. The Bank has also entered sublease agreement with Nabil Invest on 02nd April, 2010 to make available the space at Chabahil Branch premises effective from July 17, 2010 (Shrawan 1, 2067) onwards. 11.6 Certain space of Head Office premises was made available to the CEO of Nabil Invest after deputation on 02nd April, 2010 to undertake its day to day operations. Bank assumes the cost of space as insignificant. 12. Rounding Off & Regrouping
12.1 All figures have been rounded off to the nearest rupee. Previous years figures have been regrouped/rearranged wherever necessary.
Schedule 34
Note: None of the promoters have borrowed money by pledging bank's shares. One of the promoters, NIDC, holding 10% shares of the Bank from the beginning, disposed 3.85% shares in F/Y 2007-08 to the general public through auction. These shares can be freely traded in NEPSE. 173 such shareholders holding 342,039 shares have pledged 325,780 shares with banks / financial institutions / cooperative societies for borrowing money.
Schedule 35
S.N.
1. 1.1 1.2 1.3 1.4 1.5
Particulars
Total Capital and Liabilities (1.1 to 1.7) Paid up Capital Reserve and Surplus Debenture and Bonds Borrowings Deposits (a+b) Domestic Currency (a) Foreign Currency (b) Income Tax Liability Other Liabilities Total Assets (2.1 to 2.7) Cash and Bank Balance Money at Call and Short Notice Investments Loans and Advances Fixed Assets Non Banking Assets Other Assets
Note 1 Note 2
Note 3
Note 7
3.
3.1 3.2 A 3.3 3.4 3.5 B 3.6 3.7 C 3.8 D 3.9 3.10 E 3.11 F 3.12 3.13 G
Note: 1 - Stock Dividend @ Rs. 40 per share proposed. Note: 2 - Cash and Stock Dividend @ Rs. 30 and Rs. 40 per share proposed respectively. Additional Provision of Rs. 9.84 million on Loans accounted. Note: 3 - Credit Margin Balance restated in Deposits. Note: 4 - Income Tax Liability reduced as a result of net impact on profit and loss. Note: 5 - Other Liabilities increased as a result of Proposed Cash Dividend (net of Staff Bonus, which is reduced due to loss provision. Note: 6 - Credit Margin Balance restated in Deposits. Note: 7 - Additional Depreciation on Leasehold items and Software. Note: 8 - Additional Depreciation less excess telephone expense reversed. Note: 9 - Additional provision on loans accounted.
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