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G.P.Rajbahak & Co.

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 -

an independent member firm of

I N T I I M A T I O I I A L

INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF NABIL BANK LIMITED


We have audited the accompanying consolidated Balance Sheet of Nabil Bank Limited (hereinafter referred to as 'the Bank'), as at July 16, 2010 (Ashadh 32, 2067) and the related Profit & Loss Account and Cash Flow Statement for the year then ended. These financial statements are the responsibility of the bank's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Nepal Standards of Auditing and relevant practices. Those standards and practices require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examination on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Based on our examination of the financial statements as aforesaid, we report that: 1. We have obtained all information and explanations required for the purpose of our audit. 2. The Balance Sheet, Profit & Loss Account and Cash Flow Statement thereto are presented in conformity with the formats prescribed by Nepal Rastra Bank and are in agreement with the accounts maintained by the Bank. 3. The account and records of the Bank have been maintained as required by law and practice. 4. Returns received from the branch offices of the Bank are adequate for the purpose of our audit.

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.

GopaTFRajbahak, FCA For, G.P.Rajbahak & Co. Chartered Accountants


Date: September 07,^010 Place: Kathmandu
Suite 606 Bluestar Complex Tripureswore, Kathmandu Nepal Tel + 9771 - 4223778, 4225337 Fax+9771 -4223846 Email: gpraj@wlink.com.np

Nabil Bank Limited


Consolidated Balance Sheet
As at 16 July 2010 (32 Ashadh 2067)
Capital & Liabilities 1. Share Capital 2. Reserves and Surplus 3. Debentures & Bonds 4. Borrowings 5. Deposits 6. Bills Payable 7. Proposed Dividend 8. Income Tax Liabilities 9. Other Liabilities 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 Total This Year Rs. 2,028,773,600 1,805,452,329 300,000,000 74,900,000 46,340,700,628 425,443,908 434,737,200 24,904,405 644,813,627 52,079,725,697 This Year Rs. 635,986,600 549,454,618 214,656,586 3,118,144,000 13,600,916,613 32,268,873,283 781,480,397 910,213,600 52,079,725,697
(0.26)

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)

Amrit Charan Shrestha Chief Executive Officer

S. P. Shrestha Chairman

S. P. Poudyal Director

D. G. Agrawal Director

As per our report of even date.

Krishna Bhattarai Chief Financial Officer

A. P. Bazgain Director

Tabith Awal Director

M. Ahmed Director

S. Chatterjee Director

Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants

Date: September 07, 2010 Place: Nabil House, Kamaladi, Kathmandu

Nabil Bank Limited


Consolidated Profit and Loss Account
For the period 16 July 2009 to 16 July 2010 (1 Shrawan 2066 to 32 Ashadh 2067)
Particulars 1. Interest Income 2. Interest Expense Net Interest Income 3. Commission and Discount 4. Other Operating Income 5. Exchange Income Total Operating Income 6. Staff Expense 7. Other Operating Expense 8. Exchange Loss Operating Profit before Provision for Possible Losses 9. Provision for Possible Losses Operating Profit 10. Non Operating Income /(Expense) 11. Provision for Possible Losses Write Back Profit from Regular Activities 12. Income/(Expense) from Extra-ordinary Activities Profit from All Activities 13. Provision for Staff Bonus 14. Provision for Income Tax Current Tax Prior Period Tax Deferred Tax Net Profit/(Loss) This Year Rs. 4,047,725,656 1,960,107,902 2,087,617,754 215,481,543 169,548,006 291,440,756 2,764,088,060 367,162,384 334,668,677 2,062,256,999 355,829,115 1,706,427,884 6,454,724 39,791,809 1,752,674,417 34,321,843 1,786,996,260 162,518,278 485,907,180 472,823,385 831,939 12,251,856 1,138,570,802 Previous Year Rs. 2,798,486,196 1,153,280,052 1,645,206,144 179,693,027 144,164,143 251,919,712 2,220,983,026 339,897,913 265,158,033 1,615,927,080 45,722,434 1,570,204,646 2,190,102 10,617,867 1,583,012,615 43,521,866 1,626,534,481 147,866,771 447,614,612 470,701,921 918,745 (24,006,054) 1,031,053,098

Amrit Charan Shrestha Chief Executive Officer

S. P. Shrestha Chairman

S. P. Poudyal Director

D. G. Agrawal Director

As per our report of even date.

Krishna Bhattarai Chief Financial Officer

A. P. Bazgain Director

Tabith Awal Director

M. Ahmed Director

S. Chatterjee Director

Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants

Date: September 07, 2010 Place: Nabil House, Kamaladi, Kathmandu

Nabil Bank Limited


Consolidated Profit & Loss Appropriation Account
Fiscal Year 2009/10 (2066/2067)
Particulars Income 1. Accumulated Profit up to Last Year (Restated Balance) 2. Current Year's Profit 3. Exchange Equalization Fund 4. Capital Adjustment Reserve 5. Deferred Tax Reserve 6. Investment Adjustment Reserve 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 Total 15. Accumulated Profit/(Loss) 228,000,000 1,000,000 434,737,200 579,649,600 6,000,000 4,000,000 1,253,386,800 1,830,030 207,000,000 1,000,000 338,011,450 482,873,500 11,300,000 95,373,040 1,135,557,990 57,195,097 104,394,171 1,138,570,802 12,251,856 1,255,216,830 161,699,989 1,031,053,098 1,192,753,087 This Year Rs. Previous Year Rs.

Amrit Charan Shrestha Chief Executive Officer

S. P. Shrestha Chairman

S. P. Poudyal Director

D. G. Agrawal Director

As per our report of even date.

Krishna Bhattarai Chief Financial Officer

A. P. Bazgain Director

Tabith Awal Director

M. Ahmed Director

S. Chatterjee Director

Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants

Date: September 07, 2010 Place: Nabil House, Kamaladi, Kathmandu

Nabil Bank Limited


Consolidated Statement of Changes in Equity
Fiscal Year 2009/10 (2066/67)
Particulars Share Capital Accumulated Profit/(Loss) Balance as on 15 July 2009 Changes in Accounting Policy Share Capital Adjustment Changes in Tax Accounting Policy Adjustments in Fixed Assets Restated Balance Surplus on Revaluation of Properties Deficit on Revaluation of Properties Currency Translation Difference Net Gains and Losses not recognised in the Income Statement Net Profit for the period Adjustments: Issuance of Share Capital Deficit on Revaluation of Properties Surplus on Revaluation of Properties Deficit on Revaluation of Properties Cash Dividend Proposed Stock Dividend General Reserve Fund Contingent Reserve Dividend Equalization Fund Capital Adjustment Fund Exchange Fluctuation Reserve Interest Spread Reserve Deferred Tax Reserve Investment Adjustment Reserve Closing Balance 965,747,000 965,747,000 483,377,000 1,449,124,000 57,195,097 (503,500) 47,803,754 (101,180) 104,394,171 1,138,570,802 (434,737,200) (579,649,600) (228,000,000) (1,000,000) (6,000,000) 12,251,856 (4,000,000) 1,830,030 General Reserve 1,340,500,000 1,340,500,000 228,000,000 1,568,500,000 Proposed Bonus Share 482,873,500 503,500 483,377,000 96,272,600 579,649,600 Capital Reserve Fund 74,000 74,000 74,000 Share Premium Contingent Reserve 10,500,000 10,500,000 1,000,000 11,500,000 Dividend Equalization Fund 100,000,000 100,000,000 100,000,000 Capital Adjustment Reserve Exchange Equalization Fund 75,400,000 75,400,000 6,000,000 81,400,000 Interest Spread Reserve 2,578,000 2,578,000 2,578,000 Deferred Tax Reserve 95,373,040 (47,803,754) 252,870 47,822,155 (12,251,856) 35,570,299 Investment Adjustment Reserve 4,000,000 4,000,000 Rs. Total Amount

3,130,240,637 151,689 3,130,392,327 1,138,570,802 (434,737,200) 3,834,225,929

Nabil Bank Limited


Consolidated Cash Flow Statement
(For the period from 16 July 2009 to 16 July 2010) Particulars (a) Cash Flow from Operating Activities
1. Cash Received 1.1 Interest Income 1.2 Commission and Discount Income 1.3 Income from Foreign Exchange Transaction 1.4 Recovery of Loan Written Off 1.5 Other Incomes 2. Cash Payment 2.1 Interest Expenses 2.2 Staff Expenses 2.3 Office Operating Expenses 2.4 Income Tax Paid 2.5 Other Expenses

This Year Rs.


(1,473,947,849) 4,619,700,273 3,908,768,490 215,481,543 291,440,756 34,461,478 169,548,006 (3,110,424,296) (1,961,965,831) (366,817,422) (252,518,035) (528,983,373) (139,634)

Previous Year Rs.


2,139,606,128 3,200,082,634 2,577,946,273 179,693,027 251,919,712 46,359,479 144,164,143 (2,123,536,843) (1,162,333,767) (333,774,593) (197,263,402) (430,165,081) -

Cash Flow before changes in Working Capital


(Increase)/Decrease in Current Assets 1. (Increase)/Decrease in Money at Call and Short Notice 2. (Increase)/Decrease in Other Short Term Investment 3. (Increase)/Decrease in Loans, Advances and Bills Purchase 4. (Increase)/Decrease in Other Assets Increase/(Decrease) in Current Liabilities 1. Increase/(Decrease) in Deposits 2. Increase/(Decrease) in Certificates of Deposits 3. Increase/(Decrease) in Short Term Borrowings 4. Increase/(Decrease) in Other Liabilities (b) Cash Flow from Investment Activities 1. (Increase)/Decrease in Long-term Investment 2. (Increase)/Decrease in Fixed Assets 3. Interest income from Long term Investment 4. Dividend Income 5. Other (c) Cash Flow from Financing Activities 1. Increase/(Decrease) in Long term Borrowings (Bonds, Debentures etc) 2. Increase/(Decrease) in Share Capital* 3. Increase/(Decrease) in Other Liabilities 4. Increase/(Decrease) in Refinance/facilities received from NRB 5. Dividend Paid (d) Income/(Loss) from change in exchange rate in Cash & Bank balance (e) Current Year's Cash Flow from All Activities (f) Opening Cash and Bank Balance (g) Closing Cash and Bank Balance

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

*Increment in share capital due to issue of bonus shares not reflected.

0.15

Amrit Charan Shrestha Chief Executive Officer

S. P. Shrestha Chairman

S. P. Poudyal Director

D. G. Agrawal Director

As per our report of even date.

Krishna Bhattarai Chief Financial Officer Date: September 07, 2010

A. P. Bazgain Director

Tabith Awal Director

S. Chatterjee Director

M. Ahmed Director

Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants

Place: Nabil House, Kamaladi, Kathmandu

G.RRajbahak & Co.


Chartered Accountants

BKR
NABIL BANK LIMITED

an independent member firm of

I N T E R N A T I O N A L

INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF


We have audited the accompanying Balance Sheet of Nabil Bank Limited (hereinafter referred to as 'the Bank'), as at July 16, 2010 (Ashadh 32, 2067) and the related Profit & Loss Account and Cash Flow Statement for the year then ended. These financial statements are the responsibility of the bank's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Nepal Standards of Auditing and relevant practices. Those standards and practices require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examination on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Based on our examination of the financial statements as aforesaid, we report that: 1. We have obtained all information and explanations required for the purpose of our audit. 2. The Balance Sheet, Profit & Loss Account and Cash Flow Statement thereto are presented in conformity with the formats prescribed by Nepal Rastra Bank and are in agreement with the accounts maintained by the Bank. .3. The account and records of the Bank have been maintained as required by law and practice. 4. Returns received from the branch offices of the Bank are adequate for the purpose of our audit. 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. 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 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.

Gopal P. Rajbahak, FCA "'For, G. P. Rajbahak & Co. Chartered Accountants


Date: September 07, 2010 Place:

Suite 606 Bluestar Complex Tripureswore, Kathmandu Nepal

Tel+ 9771 -4223778,4225337 Fax+9771 -4223846 Email: gpraj@wlink.com.np

Nabil Bank Limited


Balance Sheet as at 16 July 2010 (32 Ashadh 2067)
Capital & Liabilities
1. Share Capital 2. Reserves and Surplus 3. Debentures & Bonds 4. Borrowings 5. Deposits 6. Bills Payable 7. Proposed Dividend 8. Income Tax Liabilities 9. Other Liabilities 7

Schedule
1 2 3 4 5 6

This Year Rs.


2,028,773,600 1,805,980,925 300,000,000 74,900,000 46,410,700,628 425,443,908 434,737,200 24,904,405 644,796,677

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

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

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

This Year Rs.


635,986,600 549,454,618 214,656,586 3,118,144,000 13,670,916,613 32,268,873,283 779,539,760 912,665,884

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)

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

Amrit Charan Shrestha Chief Executive Officer

S. P. Shrestha Chairman

S. P. Poudyal Director

D. G. Agrawal Director

As per our report of even date.

Krishna Bhattarai Chief Financial Officer

A. P. Bazgain Director

Tabith Awal Director

M. Ahmed Director

S. Chatterjee Director

Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants

Date: September 07, 2010 Place: Nabil House, Kamaladi, Kathmandu

Nabil Bank Limited


Profit and Loss Account
For the period 16 July 2009 to 16 July 2010 (1 Shrawan 2066 to 32 Ashadh 2067) Particulars
1. Interest Income 2. Interest Expense Net Interest Income

Schedule
18 19

This Year Rs.


4,047,725,656 1,960,107,902 2,087,617,754

Previous Year Rs.


2,798,486,196 1,153,280,052 1,645,206,144

3. Commission and Discount 4. Other Operating Income 5. Exchange Income Total Operating Income

20 21 22

215,481,543 169,548,006 291,440,756 2,764,088,060

179,693,027 144,164,143 251,919,712 2,220,983,026

6. Staff Expense 7. Other Operating Expense 8. Exchange Loss Operating Profit before Provision for Possible Losses

23 24 22

366,940,054 334,186,212 2,062,961,794

339,897,913 265,158,033 1,615,927,080

9. Provision for Possible Losses Operating Profit

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

6,454,724 39,791,809 1,753,379,212

2,190,102 10,617,867 1,583,012,615

12. Income/(Expense) from Extra-ordinary Activities Profit from All Activities

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

162,518,278 486,083,379 472,823,385 831,939 12,428,055

147,866,771 447,614,612 470,701,921 918,745 (24,006,054)

Net Profit/(Loss)
Schedules 18 to 28 form integral part of the Profit and Loss Account.

1,139,099,399

1,031,053,098

Amrit Charan Shrestha Chief Executive Officer

S. P. Shrestha Chairman

S. P. Poudyal Director

D. G. Agrawal Director

As per our report of even date.

Krishna Bhattarai Chief Financial Officer

A. P. Bazgain Director

Tabith Awal Director

M. Ahmed Director

S. Chatterjee Director

Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants

Date: September 07, 2010 Place: Nabil House, Kamaladi, Kathmandu

Nabil Bank Limited


Profit & Loss Appropriation Account
Fiscal Year 2009/10 (2066/2067) Particulars Income
1. Accumulated Profit up to Last Year (Restated Balance) 2. Current Year's Profit 3. Exchange Equalization Fund 4. Capital Adjustment Reserve 5. Deferred Tax Reserve 6. Investment Adjustment Reserve 104,394,171 1,139,099,399 12,428,055 161,699,989 1,031,053,098 -

Schedule

This Year Rs.

Previous Year Rs.

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

228,000,000 1,000,000 434,737,200 579,649,600 6,000,000 4,000,000

207,000,000 1,000,000 338,011,450 482,873,500 11,300,000 95,373,040 -

Total 15. Accumulated Profit/(Loss)

1,253,386,800 2,534,825

1,135,557,990 57,195,097

Amrit Charan Shrestha Chief Executive Officer

S. P. Shrestha Chairman

S. P. Poudyal Director

D. G. Agrawal Director

As per our report of even date.

Krishna Bhattarai Chief Financial Officer

A. P. Bazgain Director

Tabith Awal Director

M. Ahmed Director

S. Chatterjee Director

Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants

Date: September 07, 2010 Place: Nabil House, Kamaladi, Kathmandu

Nabil Bank Limited


Statement of Changes in Equity
Fiscal Year 2009/10 (2066/67)
Particulars Share Capital Accumulated Profit/(Loss) Balance as on 15 July 2009 Changes in Accounting Policy Share Capital Adjustment Changes in Tax Accounting Policy Adjustments in Fixed / Other Assets Restated Balance Surplus on Revaluation of Properties Deficit on Revaluation of Properties Currency Translation Difference Net Gains and Losses not recognised in the Income Statement Net Profit for the period Adjustments: Issuance of Share Capital Deficit on Revaluation of Properties Surplus on Revaluation of Properties Deficit on Revaluation of Properties Cash Dividend Proposed Stock Dividend General Reserve Fund Contingent Reserve Dividend Equalization Fund Capital Adjustment Fund Exchange Fluctuation Reserve Interest Spread Reserve Deferred Tax Reserve Investment Adjustment Reserve Closing Balance 1,449,124,000 12,428,055 (4,000,000) 2,534,825 1,568,500,000 579,649,600 74,000 11,500,000 100,000,000 81,400,000 2,578,000 35,394,100 (6,000,000) 483,377,000 (434,737,200) (579,649,600) (228,000,000) (1,000,000) 228,000,000 1,000,000 6,000,000 (12,428,055) 4,000,000 4,000,000 96,272,600 1,139,099,399 965,747,000 965,747,000 57,195,097 (503,500) 47,803,754 (101,180) 104,394,171 1,340,500,000 483,377,000 74,000 10,500,000 100,000,000 75,400,000 2,578,000 503,500 (47,803,754) 252,870 47,822,155 General Reserve 1,340,500,000 Proposed Bonus Share 482,873,500 Capital Reserve Fund 74,000 Share Premium Contingent Reserve 10,500,000 Dividend Equalization Fund 100,000,000 Capital Adjustment Reserve Exchange Equalization Fund 75,400,000 Interest Spread Deferred Tax Reserve 2,578,000 Reserve 95,373,040 Investment Adjustment Reserve Rs. Total Amount

3,130,240,637 151,689 3,130,392,327 1,139,099,399 (434,737,200) 3,834,754,525

Nabil Bank Limited


Cash Flow Statement
(For the period from 16 July 2009 to 16 July 2010) Particulars (a) Cash Flow from Operating Activities
1. Cash Received 1.1 Interest Income 1.2 Commission and Discount Income 1.3 Income from Foreign Exchange Transaction 1.4 Recovery of Loan Written Off 1.5 Other Incomes 2. Cash Payment 2.1 Interest Expenses 2.2 Staff Expenses 2.3 Office Operating Expenses 2.4 Income Tax Paid 2.5 Other Expenses

This Year Rs.


(1,405,888,486) 4,619,700,273 3,908,768,490 215,481,543 291,440,756 34,461,478 169,548,006 (3,109,719,501) (1,961,965,831) (366,595,092) (252,035,570) (528,983,373) (139,634)

Previous Year Rs.


2,139,606,128 3,200,082,634 2,577,946,273 179,693,027 251,919,712 46,359,479 144,164,143 (2,123,536,843) (1,162,333,767) (333,774,593) (197,263,402) (430,165,081) -

Cash Flow before changes in Working Capital


(Increase)/Decrease in Current Assets 1. (Increase)/Decrease in Money at Call and Short Notice 2. (Increase)/Decrease in Other Short Term Investment 3. (Increase)/Decrease in Loans, Advances and Bills Purchase 4. (Increase)/Decrease in Other Assets Increase/(Decrease) in Current Liabilities 1. Increase/(Decrease) in Deposits 2. Increase/(Decrease) in Certificates of Deposits 3. Increase/(Decrease) in Short Term Borrowings 4. Increase/(Decrease) in Other Liabilities (b) Cash Flow from Investment Activities 1. (Increase)/Decrease in Long-term Investment 2. (Increase)/Decrease in Fixed Assets 3. Interest income from Long term Investment 4. Dividend Income 5. Other (c) Cash Flow from Financing Activities 1. Increase/(Decrease) in Long term Borrowings (Bonds, Debentures etc) 2. Increase/(Decrease) in Share Capital* 3. Increase/(Decrease) in Other Liabilities 4. Increase/(Decrease) in Refinance/facilities received from NRB 5. Dividend Paid (d) Income/(Loss) from change in exchange rate in Cash & Bank balance (e) Current Year's Cash Flow from All Activities (f) Opening Cash and Bank Balance (g) Closing Cash and Bank Balance

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)

Amrit Charan Shrestha Chief Executive Officer

S. P. Shrestha Chairman

S. P. Poudyal Director

D. G. Agrawal Director

As per our report of even date.

Krishna Bhattarai Chief Financial Officer Date: September 07, 2010

A. P. Bazgain Director

Tabith Awal Director

S. Chatterjee Director

M. Ahmed Director

Gopal P. Rajbahak, FCA For and on behalf of G. P. Rajbahak & Co. Chartered Accountants

Place: Nabil House, Kamaladi, Kathmandu

Schedule 1

Nabil Bank Limited


Share Capital and Ownership
(As at 16 July 2010) Previous Year Rs.
1. Share Capital 1,600,000,000 1.1 Authorized Capital 1,600,000,000 a) 16,000,000 Ordinary Shares of Rs. 100 each b) ...Non-redeemable Preference Shares of Rs.. each c) Redeemable Preference Shares of Rs.. each 965,747,000 1.2 Issued Capital 965,747,000 a) 14,491,240 Ordinary Shares of Rs. 100 each b) ...Non-redeemable Preference Shares of Rs.. each c) Redeemable Preference Shares of Rs.. each 965,747,000 1.3 Paid Up Capital 965,747,000 a) 14,491,240 Ordinary Shares of Rs. 100 each b) ...Non-redeemable Preference Shares of Rs.. each c) Redeemable Preference Shares of Rs.. each 482,873,500 1.4 Proposed Bonus Shares 1.5 Calls in Advance 579,649,600 1,449,124,000 1,449,124,000 1,449,124,000 1,449,124,000 1,600,000,000 1,600,000,000

Particulars

This Year Rs.

*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

This Year Rs.


724,562,000 89,130,800 144,924,300 434,737,200 55,769,700 724,562,000

50.00 2. Foreign Ownership

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.

Details of Shareholders Holding 0.5% Shares


S.No. Particulars This Year % 1 2 3 4 5 6 7 8 9 NB International Limited Rastriya Beema Sansthan Nepal Industrial Development Corporation Mr. Arjun Bandhu Regmi Mr. Nirvana Kumar Chaudhary Mr. Barun Chaudhary Mrs. Sarika Chaudhary Nepal Trust Mr. Rahul Chaudhary 50.00 9.67 6.15 0.96 0.89 0.85 0.76 0.59 0.59 Rs. 724,562,000 140,085,400 89,130,800 13,925,200 12,926,900 12,324,200 11,071,200 8,599,500 8,588,100

Schedule 2

Nabil Bank Limited


Reserves & Surplus
(As at 16 July 2010) Previous Year Rs.
1,340,500,000 1. General Reserve 74,000 2. Capital Reserve 74,000 a. Share Premium 3. Capital Redemption Reserve 4. Capital Adjustment Fund

Particulars

This Year Rs.


1,568,500,000 74,000 74,000 153,472,100 11,500,000 100,000,000 35,394,100 2,578,000 4,000,000 2,534,825 81,400,000

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)

57,195,097 6. Accumulated Profit/(Loss) 75,400,000 7. Exchange Fluctuation Fund 1,681,620,137 Total

1,805,980,925

Schedule 3

Nabil Bank Limited


Debentures & Bonds
(As at 16 July 2010) Previous Year Rs.
300,000,000 1. 8.5% Bond of Rs. 1000 each Issued in July / August 2008 with maturity in July / August 2018 (Redemption Reserve till date:Rs.)

Particulars

This Year Rs.


300,000,000

2.

.% Bond/Debentures of Rs..each Issued on with maturity on . (Redemption Reserve till date:Rs.)

300,000,000

Total (1+2)

300,000,000

Schedule 4

Nabil Bank Limited


Borrowings
(As at 16 July 2010) Previous Year Rs.
A. Local 1,291,805,000 1,291,805,000 B. Foreign 389,500,000 389,500,000 1,681,305,000 1. Banks 2. Others Total Total (A+B) 74,900,000 1. Government of Nepal 2. Nepal Rastra Bank (SLF) 3. Repo Liability 4. Inter-Bank and Financial Institutions 5. Other Organized Institutions 6. Others Total 74,900,000 74,900,000

Particulars

This Year Rs.

Schedule 5

Nabil Bank Limited


Deposits
(As at 16 July 2010) Previous Year Rs.
1. Interest Free Deposits 5,480,533,468 4,045,800,379 23,176,786 367,511,301 2,785,195,376 869,916,917 1,434,733,089 1,335,804,544 98,928,545 463,015,109 4,751,756 175,150,986 278,354,111 4,758,256 35,320,250 17,267,500 5,116,500 12,151,000 18,052,750 389,500 17,663,250 5,978,868,827 A. Current Deposits 1. Local Currency 1.1 Nepal Government 1.2 "Ka" Class Licensed Institutions 1.3 Other Licensed Financial Institutions 1.4 Other Organized Institutions 1.5 Individuals 1.6 Others 2. Foreign Currency 2.1 Nepal Government 2.2 "Ka" Class Licensed Institutions 2.3 Other Licensed Financial Institutions 2.4 Other Organized Institutions 2.5 Individuals 2.6 Others B. Margin Deposits 1. Employees 2. Guarantee 3. Letter of Credit 4. Others 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 (A+B+C) 7,904,619,852 6,313,796,289 32,328,673 324,505,820 5,035,057,576 921,904,221 1,590,823,563 1,493,239,035 97,584,528 629,857,093 4,741,762 232,105,882 384,393,989 8,615,460 86,421,605 69,254,535 14,390,380 54,864,155 17,167,070 8,763,300 8,403,770 8,620,898,550

Particulars

This Year Rs.

Contd.

Previous Year Rs.


2. Interest Bearing Deposits 14,620,407,308 12,932,836,288 1,139,460,862 11,793,375,426 1,687,571,020 839,728,378 847,842,642 8,310,708,297 5,568,293,147 3,603,150,123 1,965,143,024 2,742,415,150 2,397,461,245 344,953,905 8,438,271,408 7,165,234,252 29,056,156 547,857,852 5,091,991,542 1,496,328,702 1,273,037,156 891,421,080 381,616,076 31,369,387,013 37,348,255,840 A. Savings Deposits 1. Local Currency 1.1 Institutions 1.2 Individuals 1.3 Others 2. Foreign Currency 2.1 Institutions 2.2 Individuals 2.3 Others B. Fixed Deposits 1. Local Currency 1.1 Institutions 1.2 Individuals 1.3 Others 2. Foreign Currency 2.1 Institutions 2.2 Individuals 2.3 Others C. Call Deposits 1. Local Currency

Particulars

This Year Rs.


13,783,585,962 12,739,864,676 400,853,101 12,339,011,575 1,043,721,286 238,921,680 804,799,606 14,711,158,487 12,694,340,322 6,302,068,097 6,392,272,226 2,016,818,165 1,843,874,708 172,943,457 9,295,057,629 7,548,301,795 312,010,271 392,567,623 5,606,889,939 1,236,833,963 1,746,755,834 1,485,744,716 261,011,118 -

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

Nabil Bank Limited


Bills Payable
(As at 16 July 2010) Previous Year Rs.
373,737,096 1. Local Currency 89,401,519 2. Foreign Currency 463,138,615 Total

Particulars

This Year Rs.


48,670,659 376,773,249 425,443,908

Schedule 7

Nabil Bank Limited


Other Liabilities
(As at 16 July 2010) Previous Year Rs.
92,996,957 1. Gratuity Fund 2. Employees Provident Fund

Particulars

This Year Rs.


90,033,208 43,216,232 162,518,278 546,969 149,557 21,600,949 273,692,120 800,000 43,057,064 9,182,300

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

23,313,574 12. Dividend Payable 5,534,631 13. Others 526,213,508 Total

644,796,677

Schedule 8

Nabil Bank Limited


Cash Balance
(As at 16 July 2010) Previous Year Rs.
33,485,323 2. Foreign Currency 674,395,434 Total

Particulars

This Year Rs.


602,606,035 33,380,565 635,986,600

640,910,111 1. Local Currency (Including Coins)

Schedule 9

Nabil Bank Limited


Balance with Nepal Rastra Bank
(As at 16 July 2010) Previous Year Rs. Particulars Local Currency Foreign Currency
INR Convertible FCY (52,737,279) (52,737,279) Total (52,737,279) (52,737,279) -

This Year Rs.


549,454,618 549,454,618 -

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

Nabil Bank Limited


Balance with Banks / Financial Institutions
(As at 16 July 2010) Previous Year Rs. Particulars Local Currency Foreign Currency
INR (936,310) (936,310) (936,310) Convertible FCY 168,174,343 168,174,343 168,174,343 Total 167,238,033 167,238,033 167,238,033

This Year Rs.


47,418,553 47,418,553 167,238,033 167,238,033 214,656,586

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

Nabil Bank Limited


Money at Call and Short Notice
Previous Year Rs.
1. Local Currency 552,888,297 2. Foreign Currency 552,888,297

(As at 16 July 2010) Particulars

This Year Rs.


1,700,000,000 1,418,144,000 3,118,144,000

Total

Schedule 12

Nabil Bank Limited


Investments
(As at 16 July 2010) Previous Year Rs. Particulars Purpose Trading
-

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

This Year Rs.


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 Schedule 12 (A)

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

Nabil Bank Limited


Investment in Shares, Debentures and Bonds
(As at 16 July 2010) Previous Year Rs. Particulars Cost Price
159,857,000 50,720,000 9,096,400 7,380,100 1,500,000 1,500,000 3,000,000 3,000,000 2,000,000 6,600,000 1,235,500 125,000 1,200,000 2,500,000 70,000,000 186,999,085 -

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

346,856,085 48,426,535 (36,974,325) 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

Nabil Bank Limited


Held for Trading Investments
(As at 16 July 2010)
Particulars 1. Nepal Government Treasury Bills 2. Nepal Government Saving Bonds 3. Nepal Government Other Securities 4. Nepal Rastra Bank Bonds 5. Foreign Bonds 6. Shares of Local Licensed Institutions 7. Debentures and Bonds of Local Licensed Institutions 8. Shares, Debentures and Bonds of Local Organised Institutions 9. Placement in Foreign Banks 10. Inter Bank Lending 11. Other Investments Total Investments Cost Price Market Price As At 16-Jul-2010 15-Jul-2009 Profit / Loss This Year Previous Year Remarks

Schedule 12.2

Nabil Bank Limited


Held to Maturity Investments
(As at 16 July 2010)
Particulars 1. Nepal Government Treasury Bills 2. Nepal Government Saving Bonds 3. Nepal Government Other Securities 4. Nepal Rastra Bank Bonds 5. Foreign Bonds (denominated in $) 6. Shares of Local Licensed Institutions 7. Debentures and Bonds of Local Licensed Institutions 8. Shares, Debentures and Bonds of Local Organised Institutions 9. Placement in Foreign Banks 10. Other Investments Total Investments Cost Price 5,865,884,661 2,075,671,779 186,999,085 5,391,118,185 13,519,673,710 Impaired Amount till 16-Jul-2010 15-Jul-2009 Profit / Loss Previous Year This Year Remarks

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

Nabil Bank Limited


Available for Sale Investments
(As at 16 July 2010)
Market Price As At* Particulars 1. Nepal Government Treasury Bills 2. Nepal Government Saving Bonds 3. Nepal Government Other Securities 4. Nepal Rastra Bank Bonds 5. Foreign Bonds 6. Shares of Local Licensed Institutions 7. Debentures and Bonds of Local Licensed Institutions 8. Shares, Debentures and Bonds of Local Organised Institutions 9. Placement in Foreign Banks 10. Other Investments Total Investments Cost Price 84,921,500 74,935,500 2,838,114 162,695,114 74,935,500 2,838,114 305,475,719 15-Jul-2009 (A) 16-Jul-2010 (B) This Year Investment Adjustment Reserve (B -A) Last Year Profit/ Loss Remarks

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

Nabil Bank Limited


Classification of Loans, Advances and Bills Purchased & Provisioning
Previous Year Particulars Rs.
27,774,194,658 1. Performing Loans 27,766,997,848 1.1 Pass 7,196,810 1.2 Restructured / Rescheduled 224,817,413 2. Non-Performing Loans 113,305,139 2.1 Sub-Standard 45,756,398 2.2 Doubtful 65,755,876 2.3 Loss 27,999,012,071 A. Total Loan (1+2) 3. Loan Loss Provision 280,444,516 3.1 Pass 1,197,728 3.2 Restructured / Rescheduled 44,073,679 3.3 Sub-Standard 23,525,833 3.4 Doubtful 59,837,274 3.5 Loss 409,079,030 B. Total Provisioning 4. Provisioning up to previous year 291,714,142 4.1 Pass 3,026,253 4.2 Restructured / Rescheduled 32,305,327 4.3 Sub-Standard 21,265,253 4.4 Doubtful 46,096,041 4.5 Loss 394,407,016 C. Total Previous Year's Provision 7,911,332 D. Written Back This Year 22,583,346 E. Addition This Year 14,672,014 F. Changes This Year 27,589,933,041 Net Loan (A-B)

(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

Bills Purchased & Discounted Total


32,502,923,279 32,501,663,198 1,260,081 486,281,521 59,020,380 22,730,859 404,530,282 32,989,204,800 334,999,359 157,510 14,755,095 11,365,430 400,400,372 761,677,765 278,846,929 1,197,728 44,073,679 23,525,833 58,799,391 406,443,560 594,910 355,829,115 355,234,205 32,227,527,035

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

This Year Rs.


32,544,687,167 32,543,427,086 1,260,081 486,281,521 59,020,380 22,730,859 404,530,282 33,030,968,688 335,416,998 157,510 14,755,095 11,365,430 400,400,372 762,095,405

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)

Nabil Bank Limited


Securitywise Loans, Advances and Bills Purchased
(As at 16 July 2010) Previous Year Rs.
27,999,012,071 A. Secured 27,377,630,794 9,726,411 87,450,000 414,779,529 311,326,068 103,453,461 103,099,819 6,325,518 27,999,012,071 1. Movable/Immovable Assets 2. Guarantee of Local Licensed Institutions 3. Government Guarantee 4. Internationally Rated Bank Guarantee 5. Export Documents 6. Fixed Deposit Receipts a. Own b. Other Licensed Institutions 7. Government Securities 8. Counter Guarantee 9. Personal Guarantee 10. Other Securities B. Unsecured Total

Particulars

This Year Rs.


33,030,968,688 32,440,642,452 148,995 16,710,321 495,932,213 390,720,893 105,211,320 77,034,900 499,809 33,030,968,688

Schedule 14

Nabil Bank Limited


Fixed Assets
(As at 16 July 2010) Previous Year Rs.
689,579,372 96,903,211 (9,928,266) (73,921,629) 702,632,688

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

This Year Rs.


702,632,688 148,031,471 (25,301,531) (2,645,958) 822,716,670 336,910,225 72,117,261 (19,897,697) (2,383,156) 386,746,633 435,970,037 241,517,149 71,918,163 30,134,411 779,539,760

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

Nabil Bank Limited


Non Banking Assets
Previous Year Name & Address of Borrower or Party (As at 16 July 2010) Date of Acquisition Non Banking Assets Total Amount of Non Banking Assets Loss Provision % Amount
Net

Grand Total

Schedule 16

Nabil Bank Limited


Other Assets
Previous Year Rs.
9,071,880 153,713,627 151,568,100 (151,568,100) 15,048,617 490,351,439 26,228,801 95,373,040 74,908,304 864,695,708

(As at 16 July 2010) Particulars


1. Stock of Stationery 2. Income receivable on Investment 3. Accrued Interest on Loan Less: Interest Suspense Account 4. Commission Receivable 5. Sundry Debtors 6. Staff Loans & Advances 7. Pre - Payments 8. Cash in Transit 9. Other Transit items (including Cheques) 10. Drafts paid without notice 11. Expenses not written off 12. Branch Reconciliation Account 13. Deferred Tax Assets 14. Others Total

This Year Rs.


9,338,836 133,461,460 74,173,962 526,540,359 45,727,848 35,394,100 88,029,319 912,665,884

221,088,970 (221,088,970)

Schedule 16(A)

Nabil Bank Limited


Other Assets (Additional Statement)
(As at 16 July 2010) Previous Year Particulars Up to 1 Year
151,568,100 1. Accrued Interest on Loan 2. Drafts Paid without notice 3. Branch Reconciliation Account 4. Branch Reconciliation Account 159,655,115

This Year 1 to 3 Year Above 3 Years


20,123,563 41,310,292

Total
221,088,970 -

Schedule 17

Nabil Bank Limited


Contingent Liabilities
(As at 16 July 2010) Previous Year Rs.
4,491,388,706 2. Letter of Credit (Full Amount) 4,232,448,930 258,939,776 a. Maturity up to 6 Months b. Maturity more than 6 Months 3. Rediscounted Bills

Particulars

This Year Rs.


26,327,363 5,253,245,628 4,939,448,499 313,797,129 3,422,394,751 159,001,770 3,263,392,981 2,375,000 538,290,434 296,937,371 691,800,945 2,309,932,192 628,779,927 282,730,865 -

26,657,363 1. Claims on Institution but not accepted by the Institution

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

Nabil Bank Limited


Interest Income
(For the period from 16 July 2009 to 16 July 2010) Previous Year Rs.
1,483,042,044 699,604,606 1. Loans & Advances 2. Overdraft

Particulars

This Year Rs.


3,368,727,546 2,219,748,693 1,148,978,853 397,084,682 330,919,336 196,229,124 134,690,212 11,720,821 313,224 11,407,597 54,444,525 54,444,525 60,792 60,792 40,774,139 37,713,545 3,060,594 241,078,498 221,577,581 19,500,917

2,182,646,650 A. Loans, Advances and Overdraft

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

900,164 C. Agency Balances 900,164 1. Local Banks/Financial Institutions 2. Foreign Banks

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

Nabil Bank Limited


Interest Expense
(For the period from 16 July 2009 to 16 July 2010) Previous Year Rs.
1,061,673,183 A. Deposits 460,035,293 357,668,980 102,366,313 298,455,772 288,628,094 9,827,678 303,182,118 288,727,773 14,454,345 1. Fixed Deposits 1.1 Local Currency 1.2 Foreign Currency 2. Savings Deposits 2.1 Local Currency 2.2 Foreign Currency 3. Call Deposits 3.1 Local Currency 3.2 Foreign Currency 4. Certificate of Deposits

Particulars

This Year Rs.


1,859,545,996 833,543,448 774,340,890 59,202,558 526,604,922 516,933,886 9,671,036 499,397,626 486,636,033 12,761,593 100,561,906 25,569,863 55,188,570 19,803,473 -

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

Nabil Bank Limited


Commission & Discount
(For the period from 16 July 2009 to 16 July 2010) Previous Year Rs.
4,572,780 A. Bills Purchase & Discount 865,295 3,707,485 1. Local 2. Foreign

Particulars

This Year Rs.


4,899,378 947,042 3,952,336 180,865,383 44,383,330 39,219,451 2,931,518 60,501,593 33,829,491 29,716,782

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

27,416,925 C. Others 179,693,027 Total

215,481,543

Schedule 21

Nabil Bank Limited


Other Income
(For the period from 16 July 2009 to 16 July 2010) Previous Year Rs.
3,045,418 1. Safe Deposit Lockers Rental 7,166,717 2. Issue & Renewals of Credit Cards 18,285,939 3. Issue & Renewals of Debit Cards 9,962,393 4. Telex / T. T. 102,753,136 5. Service Charges 6. Renewal Fees

Particulars

This Year Rs.


4,231,434 5,003,627 15,191,580 11,540,037 127,174,878 6,406,451

2,950,540 7. Others 144,164,143 Total

169,548,006

Schedule 22

Nabil Bank Limited


Exchange Gain/ (Loss)
(For the period from 16 July 2009 to 16 July 2010) Previous Year Rs.
44,611,826 a. Revaluation 207,307,886 b. Trading (except Exchange Fees) 251,919,712 Total Gain/(Loss)

Particulars

This Year Rs.


23,924,674 267,516,082 291,440,756

Schedule 23

Nabil Bank Limited


Personnel Expense
(For the period from 16 July 2009 to 16 July 2010) Previous Year Rs.
138,562,221 1. Salary 75,600,291 2. Allowances 9,993,188 3. Contribution to Provident Fund 5,681,241 4. Training Expenses 2,938,816 5. Uniform 45,413 6. Medical 5,094,299 7. Insurance 63,069,340 8. Pension and Gratuity Contribution 38,913,104 9. Others 339,897,913 Total

Particulars

This Year Rs.


160,308,754 96,648,941 11,648,565 8,822,575 2,947,406 39,369 5,598,441 40,012,624 40,913,379 366,940,054

Schedule 24

Nabil Bank Limited


Office Operating Expense
(For the period from 16 July 2009 to 16 July 2010) Previous Year Rs.
37,519,546 1. House Rent 9,993,081 2. Electricity & Water 3,513,294 3. Repair & Maintenance 1,329,470 2,183,824 a. Building b. Vehicles c. Others

Particulars

This Year Rs.


47,098,887 12,345,134 4,267,018 1,178,501 3,088,517 8,344,021 19,905,365 6,774,351 2,746,297 19,593,036 530,771 17,422,788 659,303 134,501 5,454,715 2,708,000 2,746,715 1,110,887 800,000 475,000 325,000 82,150,642 25,471,127 25,069,797 201,751 54,105,821 16,826,783 3,458,764 7,119,256 4,925,130 551,500 3,890,055 17,334,334

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

Nabil Bank Limited


Provision for Possible Losses
(Fiscal Year 2009/10) Previous Year Rs.
24,086,679 1. Loans and Advances 21,635,755 2. Investments 3. Non-Banking Assets 45,722,434 4. Other Assets Total 355,829,115

Particulars

This Year Rs.


355,829,115 -

Schedule 26

Nabil Bank Limited


Non-Operating Income/(Loss)
(For the period from 16 July 2009 to 16 July 2010) Previous Year Rs.
-

Particulars
1. Profit/(Loss) on Sale of Investments

This Year Rs.


(1,368,009) 7,822,733 -

(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

Nabil Bank Limited


Provision for Possible Losses Write Back
(Fiscal Year 2009/10) Previous Year Rs.
9,414,665 1. Loans and Advances 2. Non-Banking Assets 3. Investments 1,203,202 4. Other Assets

Particulars

This Year Rs.


2,812,740 36,974,325 4,744

10,617,867

Total

39,791,809

Schedule 28

Nabil Bank Limited


Income/(Expense) from Extra-Ordinary Activities
(For the period from 16 July 2009 to 16 July 2010)

Previous Year Rs.


46,359,479 1. Recovery of Write off Loan -

Particulars
2. Voluntary Retirement Scheme Expenses

This Year Rs.


34,461,478 (139,634)

(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)

Nabil Bank Limited


Details of Loans Written Off
(Fiscal Year 2009/10)
S.No 1 2 3 4 5 6 Types of Loan Working Capital Loan Project Loan Fixed Capital Loan Personal Loan Credit Card Loan Others Total Loan Written off Amount (Rs.) Type of Security Basis of Security Loan Approved by Efforts made for recovery of Loans Remarks

Schedule 29

Nabil Bank Limited


Statement of Loans and Advances extended to Directors/ Chief Executive/ Promoters/ Employees and Shareholders with more than 1% Shares
(As at 16 July 2010)
Name of Promoter/Director/ Outstanding up to Last Year Chief Executive Officer Principal Interest A. Directors 1. 2. .... 3. B. Chief Executive Officer 1. 2. 3. C. Promoters 1. 2. 3. D. Employees 1. 2. 3. E. Shareholders 1. 2. 3. Total Recovered in Current Year Principal Interest Additional Lending in Current Year Rs. Outstanding as of 16 July 2010 Principal Interest -

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)

Nabil Bank Limited


Table of Capital Fund
Particulars 1.1 Risk Weighted Exposures
a b c Credit Risk Operation Risk Market Risk Adjustment under Pillar - II Add: 3% of the total RWE due to non compliance to disclosure Requirement Add: % of the total deposit due to insufficient Liquid Assets Total Risk Weighted Exposures

As at 16 July 2010 As at 15 July 2009


39,016,206,023 2,706,731,407 99,722,645 32,500,502,288 2,264,233,871 51,764,691

1.2 Capital Core Capital (Tier 1)


a b c d e f g h i j k l m n o p q r s t u 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 Less: Investment in equity of institutions in excess of limits Less: Investments arising out of underwriting commitments Less: Reciprocal crossholdings Less: Other Deductions Adjustment Under Pillar - II Less: Shortfall In Provision Less: Loans & Facilities extended to Related Parties & Restricted Lending

41,822,660,075 34,816,500,849 As at 16 July 2010 As at 15 July 2009 3,667,854,525 3,044,340,637


1,449,124,000 74,000 579,649,600 1,568,500,000 2,534,825 965,747,000 74,000 482,873,500 1,340,500,000 57,195,097

100,000,000 35,394,100 2,578,000

100,000,000 95,373,040 2,578,000

(70,000,000)

Supplementary Capital (Tier 2)


a b c d e f g h Cumulative and/or Redeemable Preference Share Subordinated Term Debt Hybrid Capital Instruments General loan loss provision Exchange Equalization Reserves Investments Adjustment Reserves Assets Revaluation Reserves Other Reserves

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

As at 16 July 2010 As at 15 July 2009


8.77% 10.50% 8.74% 10.70%

Schedule 30(B)

Nabil Bank Limited


Credit Risk As at 16 July 2010
Assets A. Balance Sheet Exposures
Cash Balance Balance With Nepal Rastra Bank Gold Investment in Nepalese Government Securities All Claims on Government of Nepal Investment in Nepal Rastra Bank Securities All claims on Nepal Rastra Bank Claims on Foreign Government and Central Bank (ECA Rating: 0-1) Claims on Foreign Government and Central Bank (ECA Rating: 2) Claims on Foreign Government and Central Bank (ECA Rating: 3) Claims on Foreign Government and Central Bank (ECA Rating: 4-6) Claims on Foreign Government and Central Bank (ECA Rating: 7) Claims On BIS, IMF, ECB, EC and on Multilateral Development Banks (MDBs) recognized by the Framework Claims on Other Multilateral Development Banks Claims on Public Sector Entity (ECA 0-1) Claims on Public Sector Entity (ECA 2) Claims on Public Sector Entity (ECA 3-6) Claims on Public Sector Entity (ECA 7) Claims on domestic banks that meet capital adequacy requirements Claims on domestic banks that do not meet capital adequacy requirements Claims on foreign bank (ECA Rating 0-1) Claims on foreign bank (ECA Rating 2) Claims on foreign bank (ECA Rating 3-6) Claims on foreign bank (ECA Rating 7) Claims on foreign bank incorporated in SAARC region operating with a buffer of 1% above their respective regulatory capital requirement Claims on Domestic Corporates Claims on Foreign Corporates (ECA 0-1) Claims on Foreign Corporates (ECA 2) Claims on Foreign Corporates (ECA 3-6) Claims on Foreign Corporates (ECA 7) Regulatory Retail Portfolio (Not Overdue) Regulatory Retail Portfolio Except for Granularity Claims secured by residential properties Claims not fully secured by residential properties Claims secured by residential properties (Overdue) Claims secured by Commercial real estate Past due claims (except for claim secured by residential properties) 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 Other Assets TOTAL

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 d=a-b-c


635,986,600 549,454,618 7,941,372,185 315,384,221 1,904,313 -

Risk Weighted Exposure f=d*e


-

Net Value

Risk Weighted Exposure

674,395,434 2,648,596,348 3,734,466,791 1,750,250 -

2,115,795,646 277,773,642 1,161,220,856 1,803,803,730

70,700,000 16,000,000 -

2,045,095,646 261,773,642 1,161,220,856 1,803,803,730 -

0% 100% 20% 50% 100% 150% 20% 100% 20% 50% 100% 150%

409,019,129 261,773,642 232,244,171 1,803,803,730 -

525,173,706 176,513,638 807,759,169 812,182,440 -

105,034,741 176,513,638 161,551,834 406,091,220 -

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

6,180,092 420,498,314 9,942,916 11,452,210

204,246,115 253,475,896 9,173,707 553,595,717

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)

Nabil Bank Limited


Credit Risk As at 16 July 2010
Assets Book Value Specific Provision
B. Off Balance Sheet Exposures Gross Book a Revocable Commitments Bills Under Collection 296,937,371 Forward Exchange Contract 538,290,434 LC Commitments With Original Maturity Up to 6 months domestic counterparty 4,939,448,499 foreign counterparty (ECA Rating: 0-1) foreign counterparty (ECA Rating: 2) foreign counterparty (ECA Rating: 3-6) foreign counterparty (ECA Rating 7 ) LC Commitments With Original Maturity Over 6 months domestic counterparty 313,797,129 foreign counterparty (ECA Rating: 0-1 ) foreign counterparty (ECA Rating: 2 ) foreign couterparty (ECA Rating: 3-6 ) foreign counterparty (ECA Rating: 7) Bid Bond, Performance Bond and Counter guarantee domestic counterparty 3,422,394,751 foreign counterparty (ECA Rating: 0-1) 2,396,800 foreign counterparty (ECA Rating: 2) 541,035,577 foreign counterparty (ECA Rating: 3-6) 85,347,549 foreign counterparty (ECA Rating: 7) Underwriting commitments Lending of Bank's Securities or Posting of Securities as collateral Repurchase Agreements Advance Payment Guarantee 282,730,865 Financial Guarantee Acceptances and Endorsements 691,800,945 Unpaid portion of Partly paid shares and Securities 2,375,000 Irrevocable Credit commitments (short term) 2,309,932,192 Irrevocable Credit commitments (long term) Other Contingent Liabilities Guarantee claimed but not accepted / honoured 26,327,363 TOTAL 13,452,814,475 Total RWE for credit Risk (A) +(B) 67,004,019,003 Adjustment Under Pillar - II Add: 10% of the loan and facilities in excess of Single Obligor Limit Add: 1% of the contract(Sale) value in case of the sale of credit with recourse Total RWE for Credit Risk (After Bank's Adjustment of Pillar - II) 67,004,019,003 b c d=a-b-c 296,937,371 538,290,434 360,571,304 22,925,166 210,439,120 1,917,440 274,706,035 17,478,516 235,920,926 1,123,958,507 1,677,554,224 4,578,877,194 290,871,963 3,211,955,631 479,360 266,329,542 85,347,549 265,252,349 691,800,945 2,375,000 2,074,011,266 26,327,363 12,328,855,968 64,249,219,873

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

Risk Weighted Exposure


f=d*e 53,829,043 915,775,439 145,435,982 1,605,977,815 95,872 133,164,771 85,347,549 265,252,349 691,800,945 2,375,000 414,802,253 52,654,726 4,366,511,745 39,016,206,023

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)

Nabil Bank Limited


Credit Risk Mitigation
Credit exposures Deposits with Bank
a Balance Sheet Exposures Cash Balance Balance With Nepal Rastra Bank Gold Investment in Nepalese Government Securities All Claims on Government of Nepal Investment in Nepal Rastra Bank Securities All claims on Nepal Rastra Bank Claims on Foreign government and Central Bank (ECA:0-1) Claims on Foreign government and Central Bank (ECA: 2) Claims on Foreign government and Central Bank (ECA: 3) Claims on Foreign government and Central Bank (ECA: 4-6) Claims on Foreign government and Central Bank (ECA: 7) Claims On BIS, IMF, ECB, EC and on Multilateral Development Banks (MDBs) recognized by the Framework Claims on Other Multilateral Development Banks Claims on Public Sector Entity (ECA: 0-1) Claims on Public Sector Entity (ECA: 2) Claims on Public Sector Entity (ECA: 3-6) Claims on Public Sector Entity (ECA: 7) Claims on domestic banks that meet capital adequacy requirements Claims on domestic banks that do not meet capital adequacy requirements Claims on foreign bank (ECA Rating: 0-1) Claims on foreign bank (ECA Rating: 2) Claims on foreign bank (ECA Rating: 3-6) Claims on foreign bank (ECA Rating: 7) Claims on foreign bank incorporated in SAARC region operating with a buffer of 1% above their respective regulatory capital requirement Claims on Domestic Corporates / Individuals Claims on Foreign Corporates (ECA: 0-1) Claims on Foreign Corporates (ECA: 2) Claims on Foreign Corporates (ECA: 3-6) Claims on Foreign Corporates (ECA: 7) Regulatory Retail Portfolio (Not Overdue) Regulatory Retail Portfolio (Overdue) Regulatory Retail Portfolio Except for Granularity Claims secured by residential properties Claims not fully secured by residential properties Claims secured by residential properties (Overdue) Claims secured by Commercial real estate Past due claims (except for claim secured by residential properties) 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 Other Assets

Deposits with other Banks/ FIs


b

Gold

Govt.& NRB Securities

G'tee of Govt. of Nepal


e

Sec/G'tee of Other Sovereigns


f

G'tee of domestic banks


g

G'tee of MDBs
h

Sec/G'tee of Foreign Banks


i

Total

22,000,000 16,000,000 48,700,000 70,700,000 16,000,000 -

390,720,893

47,690,930

28,334,900

148,995

466,895,717 -

Schedule 30(C)

Nabil Bank Limited


Credit Risk Mitigation
Credit exposures Deposits with Bank
a Off Balance Sheet Exposures Revocable Commitments Bills Under Collection Forward Exchange Contract Liabilities LC Commitments With Original Maturity Up to 6 months domestic counterparty foreign counterparty (ECA Rating: 0-1) foreign counerparty (ECA Rating: 2) foreign counterparty (ECA Rating: 3-6) foreign counterparty (ECA Rating: 7) LC Commitments With Original Maturity Over 6 months domestic counterparty foreign counterparty (ECA Rating: 0-1) foreign counterparty (ECA Rating: 2) foreign counterparty (ECA Rating: 3-6) foreign counterparty (ECA Rating: 7) Bid Bond, Performance Bond and Counter guarantee domestic counterparty foreign counterparty (ECA Rating: 0-1) foreign counteparty (ECA Rating: 2) foreign counterparty (ECA Rating: 3-6) foreign counterparty (ECA Rating: 7) Gurantee claimed but not honored Underwriting commitments Lending of Bank's Securities or Posting of Securities as Collateral Repurchase Agreements Advance Payment Guarantee Financial Guarantee Acceptances and Endorsements Unpaid portion of Partly paid shares and Securities Irrevocable Credit commitments (short term) Irrevocable Credit commitments (long term) Other Contingent Liabilities

Deposits with other Banks/ FIs


b

Gold

Govt.& NRB Securities

G'tee of Govt. of Nepal


e

Sec/G'tee of Other Sovereigns


f

G'tee of domestic banks


g

G'tee of MDBs
h

Sec/G'tee of Foreign Banks


i

Total

360,571,304 360,571,304 22,925,166 210,439,120 1,917,440 274,706,035 17,478,516 235,920,926 1,677,554,224

22,925,166

210,439,120 4,188,246 1,917,440 270,517,789

17,478,516

86,312,922

2,556,999

147,051,005

Schedule 30(D)

Nabil Bank Limited


Operations Risk
Particulars
Net Interest Income Commission and Discount Income Other Operating Income Exchange Fluctuation Income Additional Interest Suspense during the period Gross income (a) Alfa (b) Fixed Percentage of Gross Income [c=(ab)] 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=(de)] Adjustment Under Pillar - II If Gross Income for all the last three years is negative Total Credit and Investment (Net of Specific Provision) Capital Requirement for operational risk (5%) Risk Weight (reciprocal of capital requirement of 10%) in times Equivalent Risk Weight Exposure (g) Equivalent Risk Weight Exposure (h=f+g)

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)

Nabil Bank Limited


Market Risk
This Year Rs. Previous Year Rs.

S.No.

Currency

Open Position Open Position Relevant Open (FCY) (NPR)


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

Relevant Open Position


68,996,682.81 8,603,628.11 4,074,834.31 10,116,680.47 213,068.38 7,239,886.05 206,485.84 1,225,670.09 1,565,593.93 40,891.80 205,893.01 213,037.00 480.90 95,338.95 15,534.80 698,691.92 16,983.00 103,529,381 0 5,176,469 10 51,764,691

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

Nabil Bank Limited


Principal Indicators
Particulars Indicators 2003/04 31.92 92.61 1,000 10.80 65.00 65.00 9.45 29.43 1.97 11.03 39.78 5.33 2.73 60.55 3.69 2004/05 34.33 105.49 1,505 14.27 70.00 70.00 8.70 31.50 1.68 12.24 42.20 5.32 3.06 75.05 3.73 2005/06 35.32 129.21 2,240 17.34 85.00 85.00 8.29 28.93 2.09 10.31 40.86 5.24 3.23 68.63 3.86 Financial Year 2006/07 2007/08 32.16 29.68 137.08 108.31 5,050 5,275 36.84 48.70 140.00 100.00 100.00 60.00 8.14 8.04 24.41 21.17 2.54 2.64 10.02 7.81 41.43 41.42 4.62 3.96 2.32 2.72 68.13 68.18 3.97 3.86 10.40 1.64 12.04 6.00 1.12 4.15 418 4,916,544 427 8.75 2.35 11.10 8.37 0.74 3.94 354 6,892,160 416 2008/09 30.56 106.76 4,899 45.89 85.00 35.00 8.82 23.96 3.22 7.47 43.50 4.02 2.55 73.87 4.34 8.74 1.96 10.70 9.03 0.80 4.16 324 9,657,470 505 2009/10 24.11 78.61 2,384 30.33 70.00 30.00 10.41 15.99 4.43 6.17 44.29 3.47 2.37 69.53 5.54 8.77 1.73 10.50 3.02 1.47 4.40 265 14,491,240 557

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.

Schedule 32: Principal Accounting Policies


1. 1.1 Corporate information Reporting Entity: Nabil Bank Limited (the Bank) is a public limited company, incorporated on 12th July 1984, and domiciled in Nepal. It is a Ka class licensed institution licensed under the Banks and Financial Institutions Act, 2006. The registered office of the Bank is located at Nabil House, Kamladi, Kathmandu, Nepal. Its shares are listed in Nepal Stock Exchange Limited (the sole stock exchange in Nepal) as a publicly traded company for its general classes of shares. The permanent staff strength of the Bank as at July 16, 2010 is 557 (505 as at July 15, 2009). 1.2 Consolidated Financial Statements: The consolidated financial statements of the Bank for the year ended on July 16, 2010 comprise of the Bank and its subsidiary. The financial year of the subsidiary has a common financial year with that of parent company that ended on July 16, 2010. Principal Activities: The principal activities of the Bank are to provide all kinds of commercial banking services to its customers through its branches, extension counter and ATMs. The principal activities of its subsidiary are to provide merchant banking services that include IPO management, investment portfolio management, underwriting securities, etc. Approval of Financial Statements by Board of Directors The accompanied financial statements have been approved for publication by the Board of Directors, vide its meeting held on September 07, 2010. Responsibility for Financial Statements The Board of Directors is responsible for the preparation of consolidated financial statements and separate financial statements. The Board of Directors acknowledges this responsibility as set out in the Annual Report of the Board of Directors. These financial statements include following components: a. a Balance Sheet disclosing the information on financial position of the group and the Bank; a Profit or Loss Account (Income Statement) disclosing the financial performance of the group and the Bank for the period under review; a Cash Flow Statement disclosing the information on the ability of the group and the Bank to generate cash and cash equivalents; a Statement of Changes in Equity showing all changes in equity of the group and Bank; and Notes to the Financial Statements comprising a summary of principal accounting policies and other relevant explanatory notes.

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

Assets Loans, Advances and Discount


Rs At Mid July 2010 Gross Loans, Advances & Discount 33,030,968,688 2009 27,999,012,071 Increase Amount 5,031,956,617 % 17.97

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

472,823,385 12,428,055 831,939 486,083,379

(176,199) (176,199)

472,823,385 12,251,856 831,939 485,907,180

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

863,569 704,795 176,199

863,569 118,685,128 35,570,299

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

Movement in Non Performing Assets


Particulars Non Performing Assets This Year 486,281,521 Previous Year 224,817,413 NPR Changes (%) 116%

5.4

Write Off Loans and Interest Suspense None

5.5

Movement in Loan Loss Provision and Interest Suspense:


Particulars Loan Loss Provision Interest Suspense This Year 762,095,405 221,088,970 Previous Year 409,079,030 151,568,100 NPR Changes (%) 86% 46%

6.

Details of Book Write off Accounts


Rs Particulars Loans written off in FY 2009/10 Loans written off till FY 2008/09 Recovered till FY 2009/10 Principal Interest Principal 668,509,133 418,301,000 16,009,648 38,726,780 Interest 267,769,209 81,189,475

Out of above, actual write off made till date is as follows:

Recovery efforts are pursued including referrals to Debt Recovery Tribunal.

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

Tier 2 capital and a breakdown of its components:


a b c d e f g h Supplementary Capital (Tier 2) Cumulative and/or Redeemable Preference Share Subordinated Term Debt Hybrid Capital Instruments General loan loss provision Exchange Equalization Reserves Investments Adjustment Reserves Assets Revaluation Reserves Other Reserves NPR 722,374,082 300,000,000 325,474,082 81,400,000 4,000,000 11,500,000

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

Total qualifying capital:


Particulars Core Capital Supplementary Capital Total Capital Fund NPR Amount 3,667,854,525 722,374,082 4,390,228,607

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

Total Risk Weight Exposures calculation table:


Particulars Total Risk Weighted Exposure Total Core Capital Fund Total Capital Fund Total Core Capital to Total Risk Weighted Exposures Total Capital to Total Risk Weighted Exposures NPR Amount 41,822,660,075 3,667,854,525 4,390,228,607 8.77% 10.50%

8. 8.1

Reconciliation Inter-Bank Reconciliation:

With Nepal Rastra Bank:


Ledger Debit 84,873,125 53,533 84,926,658 Statement Debit 27,458,006 733,196 382,569 1,586,215 2,116,512 32,276,498 Ledger Credit 185,860,227 7,016,607 1,766,691 2,414,480 2,015,145 515,820 199,588,970

Less than a month 1-3 Months 3-6 Months 6-12 months 1-2 Year Above 2 year Total

Rs. Statement Credit 73,622,813 1,477,438 2,500,000 5,959 18,117 77,624,327

With Local Licensed Institution:


Ledger Debit 36,751 36,751 Statement Debit 53,625 1,454 697 55,776 Ledger Credit 4,464,837 17,650 400 467,750 4,950,637

Less than a month 1-3 Months 3-6 Months 6-12 months 1-2 Year Above 2 year Total

Rs. Statement Credit 10,772,480 10,772,480

With Foreign Banks:


Ledger Debit 454,383,470 578,974 1 454,962,445 Statement Debit 85,933,181 62,838,270 79,667 36,988 148,888,106 Ledger Credit 715,213,223 17,845,077 4,798,187 16,008,648 4,002 753,869,137

Less than a month 1-3 Months 3-6 Months 6-12 months 1-2 Year Above 2 year Total

Rs. Statement Credit 88,686,665 3,147,772 281,811 230,173 153,673 92,500,094

8.2

Inter-Branch Reconciliation: There are no unreconciled entries/balances in case of inter-branch transactions as on the reporting date.

9.

Statement of Liquidity Risk Analysis (as at 15 July 2010):


S. No. 1 2 3 4 5 6 7 8 9 10 11 Period: Assets Cash Balances Balances held with Banks and FIs Investments in Foreign Banks Call Money Government Securities NRB Bonds Inter-Bank / Financial Lending Loans and Advances Accrued Interest Receivables Reverse Repo Receivable under Commitment Receivable under facility mentioned in 12 S. No. 20, 21 and 22 13 Others Total Assets 0 - 90 days 636 215 793 3,118 3,774 4,524 206 5,125 111 18,501 Rs. Million 91 - 180 181 271 1 year Total days 270 days 365 days Above 636 549 764 2,285 313 1,401 786 5,578 3,118 764 1,328 2,076 7,942 1,364 1,170 1,170 24,802 33,031 36 20 20 73 354 760 65 5,274 211 65 1,779 39 65 4,022 129 1,417 29,832 6,263 1,722 59,408

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

171 40 80 640 3,805 1,469 7,622

171 43 168 4,651 (2,873) 4,749

171 27 12 4,722 (700) 4,049

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.

Weighted Average Interest Rate Spread


Weighted Average Interest on Loans & Investment Weighted Average Interest on Deposits Bonds & Borrowing Net Interest Spread 8.82% 4.42% 4.40%

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

Nabil Bank Limited


Statement of Loans availed by promoters / shareholders classified under promoters' group from other banks and financial institutions by pledging shares under their ownership
Promoters / Shareholders S. No. classified under Promoters group Shares registered in the name of promoters % on total paid up Total No. of capital Shares Statement of Loans Name of Banks / Financial Institution providing loans Loan Amount No. of Shares pledged Remarks

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

Nabil Bank Limited


Comparison of Unaudited and Audited Financial Statement As of 16.07.2010 of Financial Year 2009-10
Rs. In '000 As per Unaudited Financial Statement 52,910,085 1,449,124 2,827,515 300,000 74,900 46,406,308 39,930,277 6,476,032 28,670 1,823,567 52,910,085 1,395,706 3,118,144 13,670,913 33,030,969 781,200 913,154 4,047,722 1,960,132 2,087,590 215,482 169,548 291,441 2,764,060 366,940 332,529 2,064,591 345,986 1,718,605 6,455 39,787 1,764,847 34,322 1,799,169 163,561 489,209 1,146,399 As per Audited Financial Statement 52,912,333 2,028,774 1,805,981 300,000 74,900 46,410,701 39,934,669 6,476,032 24,904 2,267,073 52,912,333 1,400,098 3,118,144 13,670,917 33,030,969 779,540 912,666 4,047,726 1,960,108 2,087,618 215,482 169,548 291,441 2,764,088 366,940 334,186 2,062,962 355,829 1,707,133 6,455 39,792 1,753,379 34,322 1,787,701 162,518 486,083 1,139,099 Variance In Amount 2,248 579,650 (1,021,534) 4,392 4,392 (3,765) 443,506 2,248 4,392 3 (1,660) (488) 3 (24) 28 28 1,657 (1,629) 9,843 (11,472) 5 (11,467) (11,467) (1,042) (3,126) (7,299) In % 0.00% 40.00% -36.13% 0.00% 0.00% 0.01% 0.01% 0.00% -13.13% 24.32% 0.00% 0.31% 0.00% 0.00% 0.00% -0.21% -0.05% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.50% Note 8 -0.08% 2.84% Note 9 -0.67% 0.00% 0.01% -0.65% 0.00% -0.64% -0.64% -0.64% -0.64% Reasons for Variance

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

1.6 1.7 2. 2.1 2.2 2.3 2.4 2.5 2.6 2.7

Note 4 Note 5 Note 6

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

Profit and Loss Account


Interest Income Interest Expense Net Interest Income (3.1-3.2) Fees,Commission and Discount Other Operating Income Foreign Exchange Gain/Loss (Net) Total Operating Income (A+3.3+3.4+3.5) Staff Expense Other Operating Expense Operating Profit Before Provision (B-3.6-3.7) Provision for Possible Losses Operating Profit (C-3.8) Non Operating Income/Expenses (Net) Write Back of Provision for Possible Loss Profit from Regular Activities (D+3.9+3.10) Extra Ordinary Income/Expense (Net) Profit before Bonus and Taxes (E+3.11) Provision for Staff Bonus Provision for Tax Net Profit/(Loss) (F-3.12-3.13)

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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