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ContentsChairman’s Statement ....................................................................................................................................................................................................................... 3
Directors Report ................................................................................................................................................................................................................................................. 5
CEO’s Message ...................................................................................................................................................................................................................................................... 25
Financial Graphs ............................................................................................................................................................................................................................................. 27
Annual Financial Statements FY 2018-19
NMB Bank Ltd. ....................................................................................................................................................................................................................................................... 33
Annual Financial Statements FY 2018-19
OM Development Bank Ltd................................................................................................................................................................................................. 153
Notice about 24th Annual General Meeting ............................................................................................................................ 254
NMB Annual Report-2018/19 3
Chairman’s StatementOn behalf of the Board of Directors, I take this opportunity to express my sincere gratitude and warm welcome to all the respected shareholders, invitees, offi cials, media personnel, ladies and gentlemen to the 24th Annual General Meeting of NMB Bank Limited. I am extremely delighted to welcome everyone here to this gathering of shareholders ast er the successful merger of Om Development Bank Ltd. with NMB Bank Ltd.
It is well-known that NMB Bank, with the intention of strengthening its existing capital base and market coverage completed the merger with Om Development Bank Ltd. that had a strong presence in Gandaki Province and Province 3. The unifi ed banking operation commenced from September 28, 2019. Ast er the merger, the Bank’s paid-capital, deposits, loans and advances, and reserve fund reached NPR 11.53 Billion, NPR 123.57 Billion, NPR 115.29 Billion and NPR 9.5 Billion respectively while its branches network and extension counters have reached 163 and 5 respectively as of Mid October 2019. This historic merger was the result of hard-work and contribution of the directors, shareholders, and staff of both NMB Bank and erstwhile Om Development Bank, along with the persistent support of regulatory bodies. With their patronage, advice, suggestions, and prompt decisions, we have succeeded in reaching this stage today. Therefore, on behalf of the Board of Directors, I as the Chairman of NMB Bank Ltd. wish to extend heartfelt thanks to all who have been instrumental in orchestrating the successful merger.
The liquidity crisis prevailing in the overall banking sector did not worsen as anticipated during the review period. The management of deposit and loan interest rates remained challenging due to the higher proportion of investments as compared to savings along with the fl uctuations in liquidity from time to time. Although the investment sector did not grow as expected due to slow growth in domestic industries, trade and productive sectors; the growth in remittance infl ows, increase in agricultural production, ease of supply of energy, rapid development of construction works, expansion of industrial production, and increase in tourist arrivals created a positive impact.
Despite the challenges, the Bank has managed to scale up its business and achieve good fi nancial results during the review period. During the review year, the Bank’s deposits increased to NPR 98.52 Billion while loans and advances grew to NPR 91.89 Billion i.e. a growth of 16.58% in deposits and 21.47% in loans and advances as compared to previous year. The Bank has been able to record net profi t of NPR 2.26 Billion during the review year, a growth of 21.77% compared to the previous year. This profi t was earned when the Bank’s paid-up capital was only NPR 9.62 Billion.
The agenda to distribute 21% bonus share and 14% cash dividend to the listed shareholders ast er merger from the reserve fund and distributable profi t of the fi scal year 2018/19 is placed for approval in the Annual General Meeting. The distributable profi t of former Om Development Bank amounting NPR 548.9 Million ast er regulatory adjustments as on Mid July 2019 and share swap surplus of NPR 603.6 Million has been accounted in the reserve fund of the Bank as on merger date.
NMB Bank has always been at the forefront in accommodating the changes in the fi nancial markets. The Bank has been involved in various activities with the aim of improving the fi nancial condition of the country by exploring potential opportunities in the fi nancial sectors in cooperation with the domestic and international organizations. Further, the Bank has also been undertaking initiatives to enhance the capacity of its employees.
The Bank has expanded its investment in industrial and agricultural sector that contributes towards employment generation in the country to remain in line with the strategy of increasing credit investment in the productive sector. The Bank has been off ering Women Entrepreneurship Loan with an objective of empowering women interested to operate own business and be self-reliant. Likewise, the Bank has also been providing various loan facilities targeted at youths returning from foreign employment as part of government’s self-employment campaign. The Bank has given priority to expanding loan investments in small and medium enterprises to be in solidarity with the
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Nepal Government’s policy of focusing on helping local entrepreneurs, while keeping the economic prosperity of the local communities. With the plan to expand our investment in the priority sectors and support the overall development of the country, the Bank continues to work on products to help raise the economic standard of the marginalized people.
The Bank has achieved the goals pursuant to its vision 2020 and is continuously putting eff ort in moving ahead keeping in line with its 5-year strategic plan for achieving sustainable business expansion and profi tability. We assure our commitment in achieving the goals and be one of the best banks of Nepal.
The Bank has board representations from competent and strong institution like Employees Provident Fund, Nepal and international partnership with Netherland’s government supported Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. (FMO). We are grateful to FMO for their technical assistance and enhancement of capacity development.
On behalf of the Board of Directors, I would like to thank Mr. Hari Babu Neupane, Director representing public shareholders from 15 February 2016 to 13 March 2019 for his invaluable contribution and guidance. I also take this opportunity to welcome Ms. Sunity Shrestha (Hada) and Mr. Ravi Shankar Sainju to the NMB Board. My sincere appreciation to the respected shareholders, regulatory bodies, media, customers, Board of Directors and staff of the Bank for their invaluable support and confi dence.
Thank you.
Pawan Kumar GolyanChairmanDate: 9 January, 2020
NMB Annual Report-2018/19 5
Directors ReportRespected Shareholders,
On behalf of the Board of Directors, I extend my warm welcome and greetings to all the shareholders, representatives of various regulatory authorities, representatives of diff erent institutions, and all other stakeholders for your honorable presence in the 24th Annual General meeting of NMB Bank Limited.
Trust that you have already received the Annual Report post-merger of NMB Bank Ltd. and Om Development Bank Ltd. including separate Statement of Financial Positions, Statement of Comprehensive Income and Statement of Cash Flow of both merged entities for the FY 2018/19. I now, with the permission of this revered Annual General Meeting, would like to present the directors report pursuant to the Company Act, 2006, Clause 109 (4), comprising of the Bank’s fi nancial progress, summary of the country’s economy, challenges faced by the banking industry, and the achievements of the Bank during the review period.
1. Key Financial Performance for the Fiscal Year 2018/19
Deposit Collection: During the fi scal year, the Bank’s deposit grew by 16.58% from NPR 84.51 Billion to NPR 98.52 Billion in which the share of institution deposit remained at 39.59%. Of the Bank’s total deposit portfolio during the review period, the composition of current deposit, fi xed deposit, saving deposit, call deposit, and other deposit remained at 5.85%, 50.15%, 28.62%, 9.83%, and 5.55% respectively. The Bank has managed to mobilize institution deposit within the threshold as prescribed by Nepal Rastra Bank.
Loans and Advances: During the fi scal year, the Bank grew its risk assets portfolio from NPR 75.65 Billion to NPR 91.89 Billion thereby managing a growth of 21.47% as compared to FY 2017/18. During the review period, the composition of loans remained as: Real Estate: 3.56%, Home Loan: 10.00%, Margin
Lending: 0.32%, Term Loan: 23.75%, Overdrast Loan: 6.45%, Trust Receipt/Import Loan: 4.51%, Demand and Working Capital Loan: 19.95%, Hire Purchase Loan: 4.55% and Other Loans: 26.91%. Of the Bank’s total loan investment, exposures in Hydropower and Renewable Energy, Agriculture, Small and Medium Enterprises, and Tourism sectors remained at 20.38%, 11.25%, 6.55%, and 3.89% respectively. The share of risk assets portfolio in productive sector during the review period remained at 42.08%. The Bank shall continue to increase credit investment in productive sector in the future as well.
Investment: The Bank increased its investment by 8.85% to take its total investment portfolio of NPR 10.02 Billion in the previous year to NPR 10.91 Billion during the fi scal year 2018/19. Out of total investment, the Bank invested NPR 870 Million in organizations’ shares, NPR 9.38 Billion in Nepal Government Bonds and Treasury Bills, and NPR 650 Million in Bonds of Foreign Banks.
Operating Expense: During the fi scal year 2018/19, Other Operating Expenses reached NPR 885.5 Million i.e. an increment of 20.13% from NPR 737.1 Million in the previous fi scal year. The staff expense (excluding bonus) during the review period increased by 43.25% from NPR 736.4 Million to NPR 1.06 Billion. The increase in operating expense however, remained within the pre-approved budget.
Income: The Total Operating Income of the Bank increased by 39.41% i.e. from NPR 4.10 Billion in the previous fi scal year to NPR 5.72 Billion in the review year. During the review period, the Net Income increased from NPR 1.85 Billion to NPR 2.26 Billion. The fi scal year 2018/19 characterized by the Net Income growth of 21.77% witnessed an increase of 26.96% in the Interest Income whereby the Bank earned NPR 11.08 Billion as compared to NPR 8.73 Billion in the last fi scal year. Likewise, the Fees and Commission earned from domestic and foreign
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trade transaction increased by 26.35% compared to previous fi scal year and stood at NPR 1 Billion. Foreign Exchange Income increased by 43.56% and reached NPR 440.1 Million. The increase was possible due to the Bank’s investment in new sector and services.
Capital Fund, Credit Deposit, Base Rate and Liquidity Ratio: The Bank maintained a sound Capital Fund during the fi scal year, as a result of which the capital adequacy ratio remained at 15.43%; above the stipulated requirement of at least 11% by NRB. Likewise, the Credit Deposit ratio was effi ciently managed and remained at 76.88%. Liquidity ratio also remained within the prescribed limit and stood at 28.28%. Base rate of the Bank at the end of review period was 9.86%.
Non-Performing Asset: Due to the management’s special eff orts and attention towards bad debt recovery, the Bank was able to reduce NPA to 0.82% at the end of the review period from 0.88% in the last fi nancial year.
Debentures: The Debentures of NPR 500 million with interest rate of 7% p.a. issued by the Bank in fi scal year 2014/15 will mature on August 21, 2020. Likewise, the debenture of 10% p.a. interest rate has maturity on April 12, 2029. The Bank sets aside fund in Debenture Redemption Fund each year to pay the Debentures in which NPR 400 Million has been collected till date.
The Bank’s key fi nancial performance during the review period: (fi gures in thousand)
SN Particulars Fiscal Year 2018/19
Fiscal Year 2017/18
Incremental Volume
Percentage change (%)
1 Total Deposit 98,516,667 84,507,136 14,009,531 16.58
2 Total Loans and Advances 91,886,955 75,645,917 16,241,038 21.47
3 Total Investment (Including Subsdiaries) 10,905,293 10,018,719 886,574 8.85
4 Net Interest Income 4,244,021 2,904,014 1,340,007 46.14
5 Commission and Discount and Other Operating Income 1,471,919 1,196,110 275,889 23.07
6 Foreign Exchange Income 440,062 306,532 133,530 43.56
7 Gross Operating Income 5,716,020 4,100,124 1,615,896 39.41
8 Gross Operating Expenses 885,455 737,089 148,366 20.13
9 Gross Profi t 3,414,276 2,346,669 1,067,607 45.49
10 Net Profi t 2,257,276 1,853,793 403,483 21.77
11 Paid Up Capital 9,618,163 7,603,291 2,014,872 26.50
12 Capital Adequacy Ratio (%) 15.43 15.75 -0.32 -2.05
Bank’s Jurisdiction and Branch Network: The Bank during the review period provided banking facilities and services to its customers through 110 branches, 4 extension counters and 103 ATMs across the country which ast er the merger increased to 163 branch offi ces, 5 extension counters, and 129 ATMs. The number of branches located in each province are as follows:
Province 1 : 24 branches Province 2 : 17 branches Province 3 : 44 branches Gandaki Province : 39 branches Province 5 : 29 branches Karnali Province : 03 branches Sudur Paschim Province : 07 branches
NMB Annual Report-2018/19 7
In order to provide banking facilities at the doorstep of the people living in remote areas of the country, the Bank has been providing branchless banking services in Rasuwa, Dolakha, Udayapur, Jhapa, Taplejung, Ramechap, Morang, Kapilvastu, Sunsari, Nawalparasi, Bhaktapur, Kaski and Illam. The Bank intends to expand its branchless banking facilities in other remote area in future as well.
The Bank has entered into an agreement with various foreign banks and remittance companies to transfer the money of migrant workers to Nepal through its banking channel. The remittance transactions are still carried out through our banking channel based on such agreements in the past years with the banks and remittance companies of India, Dubai, Malaysia, etc. allowing the Bank to form the basis of foreign currency deposits. The Bank is also reviewing the potential to expand remittance services in other countries.
Representative Offi ce outside Nepal and its progress:
The Representative offi ce established at Lebuh Pasarbesar in Kualalumpur, Malaysia has been assisting as a point of contact for expansion of trade and remittance business. With this establishment, the Representative offi ce has helped to foster the growth of trade business between two countries and communicate the information on Nepalese economy and available fi nancial services to Nepalese people in Malaysia. This offi ce has been playing pivotal role to connect and garner the relationships with the Malaysian corporates and business houses and enhance trade businesses with other foreign establishments.
2. Impact of Domestic and World Economic Outlook On Bank’s Performance
Financial Status Review
• Where the world economy in 2018 grew at 3.6 percent, the International Monetary Fund (IMF) projects it to grow by only 3.2 percent in 2019
• In 2018, the economies of developed countries grew by 2.2 percent, and the economies of emerging and developing countries grew by 4.5 percent. The IMF, for 2019 has projected a slow growth in economies of developed countries, and emerging and developing countries by 1.9 percent and 4.1 percent respectively.
• China and India achieved an economic growth rate of 6.6 percent and 6.8 percent respectively, while in 2019 it is projected to grow by 6.2 percent and 7.0 percent respectively.
• International Monetary Fund projects the consumer price infl ation of developed, and emerging and developing economies to remain at 1.6 percent and 4.8 percent respectively in 2019. The consumer price infl ation in 2018 was 2.0 percent in advance economies, and 4.8 percent in emerging and developing economies.
• Economic growth has gained momentum since 2016/17. The Central Bureau of Statistics preliminarily estimates country’s economic growth of 7.1 percent in FY 2018/19. The economic growth is due to increase in agricultural production, ease of energy supply, intensifi cation of construction works, expansion of industrial production, and increase in tourist arrivals.
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• In the FY 2018/19, the ratio of Gross Domestic Savings to Gross Domestic Product (GDP) is estimated to have reached 20.5 percent while Gross National Savings to GDP is estimated to be at 52.4 percent.
• During the review period, the ratio of Gross Fixed Capital formation to GDP is estimated to have reached 36.9 percent. Such proportion of Gross Capital Formation is estimated to be 62.3 percent.
• Due to higher demand for investment than savings, the ratio of resource gap to GDP is expected to have remained 9.9 percent during the review year.
• Average consumer price infl ation that stood at 4.2 percent in 2017/18 increased to 4.5 percent during eleven months of 2018/19.
• According to preliminary Statement of Receipts and Payments released by the Financial Comptroller General Offi ce, the government made Recurrent Expenditure of NPR 714.98 Billion, Capital Expenditure of NPR 238.36 Billion, and Financial Management Expenditure of NPR 141.24 Billion. The government during the period mobilized the revenue of NPR 859.60 Billion.
• In the year 2018/19, the government mobilized gross domestic debt of NPR 96.38 Billion and made a repayment of NPR 34.31 Billion. Accordingly, the net domestic debt of the government stood at NPR 62.07 Billion during the period, which is 1.8 percent of the GDP.
• Current account defi cit amounted to NPR 248.72 Billion in eleven months of 2017/18. An escalation in import compared to export raised the trade defi cit by 17.2 percent than previous year to NPR 1,211.96 Billion.
• In the eleven months of the review period, workers’ remittances increased 17.5 percent with an infl ow of NPR 799.02 Billion. A modest growth in remittance infl ow coupled with mounting trade defi cit has resulted in an upsurge of current account defi cit. The overall balance of payments defi cit in eleven months of 2018/19 stood at NPR 90.83 Billion.
• Considering the imports of eleven months of the review period, the banking sector has suffi cient foreign exchange reserve to sustain the prospective import of goods for 8.8 months and import of goods and services for 7.7 months.
• Nepalese currency vis-à-vis the US dollar depreciated by 0.02 percent as of Mid-July 2019 compared to Mid-July 2018. The buying rate per US dollar stood at NPR 109.36 as on fi scal year 2018/19 end that was NPR 109.34 during FY 2017/18.
(Source: Monetary Policy for 2019/20, NRB)
Despite the decline in the growth of global economy, the projection of economic growth of neighboring China and India has been positive. International trade in the region appears to be impacted as taxes and other disputes between major economies continue to prevail. Although decrease in market capitalization growth in the securities market, foreign exchange reserve and the investment fund have created challenges in the banking sector, the increase in agricultural production, ease of supply of energy, intensifi cation of construction works, expansion of industrial production, and increase in tourist arrivals as indicated by Monetary Policy for higher economic growth are likely to create positive impact to the overall banking sector.
NMB Annual Report-2018/19 9
3. The Board of Directors’ opinion on the achievements of current fi scal year and future plans:
Following are the main fi nancial highlights of the Bank as on Mid October 2019 for the running fi scal year:
SN Particulars NPR (in Thousand)
1 Total Deposit 123,565,057
2 Total Loan and Advances 115,297,262
3 Total Investment (Including Subsidiaries) 12,653,290
4 Net Interest Income 1,223,654
5 Commission, Discount and other Operating Income 379,839
6 Income from Foreign Exchange Transaction 136,624
7 Net Operating Income 1,603,493
8 Total Operating Expenses 635,427
9 Total Operating Income (Before Impairment) 1,603,493
10 Net Profi t 815,136
11 Paid Up Capital 11,529,742
12 Reserves and Funds 9,500,421
13 Capital Adequacy Ratio 15.81%
Future Plans:
The Bank will continue to seek a balanced growth of deposit and loan investments remaining in line with its strategy. With continuous improvisations in quality of the loans, the Bank will focus on increasing the size of credit investments in Agricultural, Retail, and Small and Medium Enterprises (SME) sectors. Likewise, various loan facilities off ered by the Bank targeted at youths returning from foreign employment will be made more eff ective so they could utilize their skills for the economic prosperity of the nation. The Bank will specially focus on increasing lending to productive sectors for which expansion of its branch networks in potential business areas will be given a priority.
Existing technologies will be improved and updated as required to make the Bank technically effi cient for providing eff ective and accurate banking services to the customers. The Bank plans further investment in technology to minimize risks and provide maximum convenience to its customers.
Additional resources and authorities will be delegated to provincial offi ces to ensure its eff ective functioning.
The bond issuing process has been initiated with an objective of capital formation to expand business, which will be completed within the stipulated timeframe as per the Directive issued to Banks and Financial Institutions by Nepal Rastra Bank.
The Bank will intensify its eff ort to appoint remittance agents in diff erent countries and depute dedicated staff for monitoring and increasing remittance transactions through its channel by entering into agreements with remittance service providers.
The Bank will pay special attention to increase the business size of the subsidiary companies. The process of issuing mutual funds with new investment plans will be accelerated for achieving its business growth.
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The Bank will continue to contribute towards uplist ment of community and protection of environment, and support country’s commitments towards sustainable development goals as part of its corporate social responsibilities.
4. Industrial and Professional Relations:
On the foundation of transparency and professionalism, the Bank has developed an amiable and professional relationships with all its stakeholders. The Bank fi rmly believes that such relationships will be pivotal for its sustainable future growth and success.
5. Changes in the Board of Directors:
In the review year, Director Hari Babu Neupane resigned from the Board of Directors and his resignation was approved on 13 March 2019. Other than that no changes were made in the Board of Directors during the review period. However, in the running fi scal year, Mr. Rabi Krishna Sainju and Ms. Sunity Shrestha (Hada) were elected to fi ll the vacant directorial positions from public shareholders category.
6. Signifi cant Issues Aff ecting Business:
The major risks and challenges that holds the potential to signifi cantly impact the bank in future are detailed as below:
• Risks inherent in the credit investments and non-funding based services provided by the Bank
• The volatility in liquidity situation has brought challenges in the management of interest rates of both deposits and loans.
• Risk of increased competition and lack of skilled human resources.
• Possible foreign exchange risks in foreign currency deals arising from fl uctuations in exchange rates.
• The risks arising from the country’s political and other external reasons that has impact on imports and exports resulting in non-payment of loans and interest.
• Possible risk of the fi xed interest rate in foreign loan that can be higher than the prevailing interest rate in the market due to fl uctuations in interest rate, and possible risk of burden in repayment of loan in foreign currency due to exchange rate fl uctuations.
• Possible risks resulting from changes in economic, monetary and fi nancial policies of the nation.
• Risks resulting from the sluggishness of the international economic and fi nancial sectors that could have a ripple eff ect on the Nepalese market.
• The likely impact on the source of income due to lack of alternative investment avenues and contraction in the domestic market.
• A lack of proper database and advance technology in the country to prevent money laundering.
7. Signifi cant Observation in the Audit Report and Subsequent Response from the Board:
There is no observation mentioned in the Audit Report that could signifi cantly aff ect the Bank’s business.
NMB Annual Report-2018/19 11
8. Recommended Amount for Dividend Payment:
With the approval of Nepal Rastra Bank, the Bank has proposed the agenda in the Annual General Meeting with recommendation for distributing 35% Dividend (21% Stock Dividend amounting NPR 2,421,245,759 and 14% Cash Dividend amounting NPR 1,614,163,839.11 - including Tax) on the Paid Up Capital of the Bank ast er merger to be distributed from the distributable profi t of NMB Bank as on Mid July 2019 to all the shareholders maintained on the date of book closure. The profi ts of the merging entity Om Development Bank have been accounted in the Reserve Fund.
9. Details of Shares Forfeited by the Bank:
No shares were forfeited during the review year.
10. Performance of the Company and its Subsidiaries, and Review of the Existing Status:
The performance progress of the Bank is mentioned in the fi rst section whereas the performance of its subsidiaries- namely NMB Capital and NMB Micro Finance are mentioned in section 25(b) of the Director’s report
11. Major Changes made by the Company and its Subsidiaries Resulting to Signifi cant Changes in the Company’s Business:
NMB Capital Ltd., a 100% subsidiary of NMB, has been acting as Share Registrar of the Bank, for the service of which the subsidiary company was paid NPR 762 Thousands in the review period. At the end of the review year, the bank account of NMB Capital Ltd. maintained at this bank had deposit of NPR 140.10 Million. NMB Capital was paid interest of NPR 2.14 Million by the Bank in the fi scal year 2018/19.
An employee of the Bank has been appointed as the Chief Executive Offi cer of the subsidiary NMB Capital Ltd. The Bank received NPR 2.17 Million as building rent and NPR 2.4 Million as administrative and other services fee as per the agreement from NMB Capital.
12. Information provided by the Basic Shareholders to the Bank:
During the review period, no information was received other than the regular information to be provided as per the prevailing law.
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13. Details of Share Ownership of the Directors and Offi cials and the Information Received by the Company in relation to their share transactions during the review period:
In the review fi scal year, none of the directors and offi cials have been involved in the company’s stock trading. The details of their share ownership are listed below:
S.N. Name Designation Share Ownership
1. Mr. Pawan Kumar Golyan Chairman 1,103,054
2. Mr. Nico Klass Gerardus Pijl (representative from FMO, Netherlands) Director -
3. Mr. Rajendra Kafl e (representative from Employees Provident Fund) Director -
4. Mr. Harischandra Subedi Director 1,858
5. Mr. Pradeep Raj Pandey Independent Director -
6. Mr. Nand Kishore Rathi (Alternate Director to Mr. Nico Klaas Gerardus Pijl) Alternate Director 2,010,983
7. Sunil K.C. Chief Executive Offi cer 1,651
8. Pradeep Pradhan Chief Operating Offi cer 22,165
9. Shabnam Limbu Joshi Chief Business and Support Offi cer -
10. Sharad Tegi Tuladhar Chief Risk Offi cer -
11. Govind Ghimire Chief Business Offi cer -
12. Sudesh Upadhyaya Chief Business Offi cer 3,795
13. Pramod Kumar Dahal Company Secretary and Chief Legal, Compliance and AML Offi cer 264
14. Navin Manandhar Chief Business Offi cer -
15. Roshan Regmi Head Operations -
14. Information on the Directors relatives’ involvement in the Bank’s contracts:
Disclosure not required as there was no such agreement.
15. If the Bank has purchased its own shares, mention the reason for such purchase, number of purchased shares and amount paid by the Bank:
None.
16. Internal control system:
With utmost priority from the Board of Directors to safeguard the interest of the creditors, the internal control system of the Bank and its functioning have been made more eff ective to ensure sound and safe operation by formulating necessary rules, policies and procedures for inherent and potential risk management. Abiding by the prevailing law and directive issued by Nepal Rastra Bank, four committees viz. Audit Committee, Risk Management Committee, Assets Laundering Prevention Committee, and Human Resources Service Committee have been formulated by the Board of
NMB Annual Report-2018/19 13
Directors. These committees discusses various risks in detail and updates the same to the Board of Directors. For eff ective risk management and prevention, various activities are being carried out at the management level of the Bank by its Management Team Committee, Credit Risk Committee, Assets Liability Committee, Human Resources Recruitment Committee, Information Technology Committee, and Corporate Governance Committee.
In addition, the Risk Management Department of the Bank, has independently undertaken the task of eff ectively controlling and managing the risk along with the periodic review of the actions taken in the area of risk control. The department has signifi cantly contributed to maintain the institutional governance at the Bank through meticulous monitoring of the activities to ensure full compliance of the prevailing law and directives issued by Nepal Rastra Bank.
Eff ective internal controls are the foundation of safe and sound banking therefore NMB Bank Ltd. has designed and enforced system of operational and fi nancial internal control that safeguards bank’s resources, produce reliable fi nancial reports and comply with rules and regulations of the country. Eff ective internal control also reduces errors/irregularities with timely reviews and mitigations. The business strategies and the important policies as approved by the Board of Directors have been adopted by the senior management for risk management activities. The Bank has also been strengthening its internal control system by providing various types of trainings to its employees to eff ectively manage risks.
Risk Management:
For agile performance through proper risk management, the Bank has prepared and implemented a robust risk management framework for identifi cation, measurement, monitoring, management, control and reporting of the potential risks that the organization has to face. The Board of
Directors also annually reviews the approved and implemented Risk Management Framework to deal with underlying risks of special importance to the Bank.
The Board of Directors has also been identifying the risk appetite for the Bank and the extent to which it wants to bear the risk to determine the overall risk strategy. The Baord has eff ectively managed the risks by categorizing them into assets risk, operational risk, liquidity risk, market risk, interest rate risk, foreign exchange risk, and other risks. In addition to the management level committee, following committees have also been constituted at the Board level for risk management and eff ective internal control system of the Bank.
Committees formed at the level of Board of Directors
Audit Committee Details related to it are mentioned in section 18 of this Director’s report
Risk Management Committee:
A risk management committee under the coordination of a Non-Executive Director have been set up at the Bank. The coordinator of the Audit Committee has been appointed as a member of the Risk Management Committee where Head of Compliance Department and Chief Information Offi cer are the members and Head of Risk Management Department is the Principal Member Secretary. The committee regularly assemble for the meeting to discuss on the risks identifi ed by the management level risk committee, the immediate implications on the Bank’s strategy including capital fund, liquidity position, credit to deposit ratio, risk appetite, etc. due to major changes in the directives issued by Nepal Rastra Bank and the changes in monetary policy. In each quarter, any potential risk in relation to the stress testing is discussed and the information is submitted to the Board of Directors for review. In the review year, the Risk Management Comittee held 19 meetings accounting total expenditure of NPR 440,000.
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Human Resources (HR) Service Committee:
Under the coordination of one Non-Executive Director, HR Service Committee has been constituted. The committee also consists of the Chief Executive Offi cer, and the Chief Information Offi cer as members, and Chief Human Resources Offi cer as the Member Secretary. Bylaws on the service provision of the employees, policies related to the employees and succession planning, employees’ salary allowance and organizational structure are discussed in this committee. In the review year, the HR Service Comittee held 10 meetings accounting total expenditure of NPR 240,000.
Assets Laundering Prevention Committee:
Assets Laundering Prevention Committee has been constituted with a Non-Executive Director, a member from the Board, and Chief AML as Member Secretary. The Committee has made special eff orts to oversee and control the risks by ensuring that laws pertaining to money laundering and prevailing directive issued by Nepal Rastra Bank are fully complied.
17. Details of Total Management Expenditure of the last Fiscal Year:
During the review period, the employee expenses and offi ce operating expenses amounted NPR 1.94 Billion.
18. List of Audit Committee members, their remuneration, allowances and facilities, details of the work done by the Committee and the details of any suggestions made by the Committee:
Under the coordination of one Non-Executive Director, Audit Committee has been constituted with an additional Non-Executive Directorr and Head of Internal Audit Department as Principal Member Secretary as per the direction of Nepal Rastra Bank. Following are the Audit Committee members:Mr. Harischandra Subedi - CoordinatorMr. Nico Klaas Gerardus Pijl - MemberMr. Ranjan Pandey - Member Secretary
The Audit Committee has been performing its functions complying with the instructions by Nepal Rastra Bank. Each report received from the auditor is discussed and reviewed in the Audit Committee with necessary instructions for improvement. The Audit Committee discusses and reviews each report received by the Auditor to identify all the risk areas and ensures that the risks are addressed before a periodic submission of the report to the Board of Directors. The Board is regularly receving suggestions from the Audit Committee.
During the review year, the Audit Committee held 17 meetings to which its members excluding Member Secretary were remunerated an allowance of NPR 12,000 each per meeting. The total expenditure for the meeting amounted to NPR 396,000.
19. Details of any payments yet to be made to the Directors, Chairman, Chief Executive Offi cer, Basic Shareholders or their close relatives or their associated companies:
None
20. Details of remuneration to the Directors, Chief Executive Offi cer and Senior Management Staff :
Detailed in section 35 of additional disclosures.
21. Information of Undeclared Dividend by the shareholders:
Out of the total dividend distributed by the Bank upto 16 July 2019, NPR 5,128,793 remains unclaimed by the shareholders. Uncollected dividend of last fi scal year until Mid July 2019 amounting NPR 138,950,026.78 is with the share registrar NMB Capital Ltd. A notice to collect the dividends has been published in the newspaper and in the Bank’s website. The undeclared dividends of the shareholders before FY 2011/12 have been deposited in the Investor Protection Fund.
NMB Annual Report-2018/19 15
22. Details of Fixed Assets purchased/sold pursuant to Clause 141 of the Company Act 2006:
During the review period there was no purchase/sale of fi xed asset.
23. Details of the transactions with related companies pursuant to Clause 175 of Company Act 2006:
Detailed in section 11 of this report.
24. Any other information to be disclosed in the Director’s Report as per Company Act 2006 and prevailing law:
Required information has been provided in the relevant section of this annual report.
25. Other Essential Information:
(A) In relation to completion of merger
As decided by the Annual General Meeting to merge with other fi nancial institutions so as to develop the competitiveness and build a strong capital structure, the Bank successfully completed the merger with Om Development Bank Ltd. having stronghold in Gandaki province and started joint operation from 28th September 2019 in the name of NMB Bank. Through this merger, the capital structure base of the Bank strengthened while its access to general public also increased with increased network presence in Province 3 and Gandaki province. The merger also signifi cantly increased the business portfolio of the Bank.
(B) Subsidiary Companies and its Progress
NMB Capital Ltd.
NMB Capital Ltd.; established with a capital investment of NPR 200 Million is a wholly owned subsidiary company of the Bank. The company has been managing the process of issuing primary shares, further public off erings, and right shares of various companies along with other investment plans and portfolio management targeted towards general public as well as institutional clients.
In the fi scal year 2018/19, the net profi t of the company stood at NPR 52 million.
The key achievements of the subsidiary company in fi scal year 2018/19 are as follows:
i. NMB Capital Ltd. continued the services of issuance and sales manager, share registrar, guarantor and trustee during the review period.The company has established a strong infrastructure for providing shares dematerialization services to its customers.
ii. NMB Capital has been working as a fund manager and depository for Mutual Funds viz. ‘NMB Sulav Fund 1’ and ‘NMB Hybrid Fund L-1’ issued by NMB Bank Ltd. With approval from Securities Board of Nepal (SEBON), the company initiated the issuance of mutual funds from 3rd week of October.
iii. The company has received an approval from SEBON to provide institutional consulting services.
www.nmbbanknepal.com16
NMB Capital LimitedSTATEMENT OF FINANCIAL POSITION
As at 16 July 2019
16 July 2019 (NPR) 16 July 2018 (NPR)
Assets
Cash and Cash Equivalents 515,316,772.21 396,328,814.76
Investment Securities measured at Fair Value through P/L - -
Investment in Equity measured at Fair Value through OCI 11,000,000.00 11,000,000.00
Investment Securities measured at Amortized Cost 179,330,362.81 236,921,486.09
Other Financial Assets 22,647,325.74 25,443,281.13
Other Assets - -
Property & Equipment 13,170,943.64 13,714,772.84
Intangible Assets 965,607.60 488,701.60
Current Tax Assets 210,498.74 608,895.73
Deferred Tax Assets 4,124,439.53 2,172,844.31
Total Assets 746,765,950.27 686,678,796.46
Liabilities
Dues to Public 408,253,956.99 356,938,883.14
Other Financial Liabilities 29,767,579.95 36,962,761.71
Other Liabilities 14,784,347.23 17,038,603.71
Current Tax Liabilities - -
Deferred Tax Liabilities - -
Other Provisions 8,697,354.00 5,163,588.00
Total Liabilities 461,503,238.17 416,103,836.56
Equity
Share Capital 200,000,000.00 200,000,000.00
Retained Earnings 82,537,798.28 68,619,502.20
Other Reserves 2,724,913.83 1,955,457.70
Total Equity 285,262,712.10 270,574,959.90
Total Liabilities and Equity 746,765,950.27 686,678,796.46
NMB Annual Report-2018/19 17
NMB Capital LimitedSTATEMENT OF PROFIT OR LOSS
As at 16 July 2019
16 July 2019 (NPR) 16 July 2018 (NPR)
Income
Income from Merchant Banking Activities 25,479,619.89 36,371,046.98
Income from Mutual Fund operations 39,598,000.01 42,565,592.64
Interest Income 3,478,070.94 16,509,927.77
Other Income 50,045,221.81 40,412,404.36
Net gain/(loss) on fi nancial investments Held for Trading - -
Total Income 118,600,912.65 135,858,971.75
Expense
Personnel Expense 26,800,562.56 28,285,411.60
Interest Expense - -
Depreciation on Property and Equipment 3,865,552.41 3,421,950.29
Amortization of Intangible Assets 254,995.00 194,901.61
Other Operating Expenses 15,486,605.20 20,409,526.55
Total Expenses 46,407,715.17 52,311,790.05
Profi t Before Tax from Continuing Operations 72,193,197.48 83,547,181.70
Income Tax Expenses 21,657,959.24 20,472,939.27
Deferred Tax Expenses/(Income) 1,492,795.32 -
Profi t For the Year 52,028,033.56 63,074,242.43
www.nmbbanknepal.com18
NMB Laghubitta Bittya Sanstha Ltd.
NMB Laghubitta Bittya Sanstha Ltd is a subsidiary microfi nance company of NMB Bank. It has a paid-up capital of NPR 162 Million of which NMB Bank, other individual promoters, and general public have share ownerships of 51%, 19%, and 30% respectively. The head offi ce of the company is in Pokhara Metropolitan City Ward No 25, Milanchowk, Hemja, Kaski. It has 100 branches spread in 54 hilly districts of the country.
The microfi nance institution has been providing fi nancial services such as savings, loans, insurance to a large number of people living in remote mountainous and hilly regions of the country. The company in cooperation with various organizations have been encouraging and facilitating social works at the local level. The company as on 16 November 2019 had provided loan of NPR 3,3 Billion and mobilized deposit of NPR 1.2 Billion.
The highlights of NMB Microfi nance during the fi scal year 2018/19 are as follows:
i. The paid-up capital of the fi nancial institution as on 16th July 2019 is NPR 162 Million. As approved by the 6th Annual General Meeting, its issued and paid-up capital ast er issuance of 12% bonus share and 1:1.5 ratio right share will reach NPR 453.6 Million.
ii. The subsidiary company opened 16 branches during the fi scal year 2018/19 totaling its branches count to 100
iii. The company in partnership with Sakchyam- Access to Finance and AVSAR Project has been working to provide fi nancial services in remote areas with poor fi nancial access.
iv. The company has conducted various renewable energy promotion programs in collaboration with Winrock International and Arc Finance, fi nanced renewable energy loan to deprived communities for purchasing solar panels, and solar lights for households in partnership with various vendor companies under Renewable Energy Project, and provided renewable energy related trainings to employees and customers.
NMB Annual Report-2018/19 19
NMB Microfi nance Bittiya Sanstha LimitedBalance Sheet
As at 16 July 2019
FY 2018/19 (NPR) FY 2017/18 (NPR)
Capital & Liabilities
1. Share Capital 210,608,125 162,006,250
2. Reserve and Funds 95,577,936 86,693,563
3. Debentures and Bonds - -
4. Borrowings 1,960,240,209 1,682,081,898
5. Deposits 1,082,721,395 696,528,653
6. Proposed Dividend 2,557,993 1,112,171
7. Income Tax Liabilities 2,671,717 242,787
8. Other Liabilities 65,025,009 45,927,871
Total Liabilities 3,419,402,385 2,674,593,192
Assets
1. Cash Balance 130,155 16,451
2. Balance with Nepal Rastra Bank 16,030,000 24,230,000
3. Balance with Banks/Financial Institutions 284,303,949 447,869,961
4. Money at Call and Short Notice - -
5. Investments 2,000,000 2,000,000
6. Loans, Advances and Bills Purchased 3,077,263,360 2,167,490,812
7. Fixed Assets 25,806,730 21,177,981
8. Non-Banking Assets - -
9. Other Assets 13,868,191 11,807,986
Total Assets 3,419,402,385 2,674,593,192
www.nmbbanknepal.com20
NMB Microfi nance BittiyaSanstha LimitedProfi t and Loss Account
As at 16 July 2019
FY 2018/19 (NPR) FY 2017/18 (NPR)
Particulars
Interest Income 468,569,376 377,058,891
Interest Expenses 261,092,922 211,444,355
Net Interest Income 207,476,454 165,614,536
Commission ,Discount and other operating income 92,841,611 66,225,063
Exchange Fluctuation Income - -
Total Operating Income 300,318,066 231,839,598
Staff Expenses 136,286,290 106,105,546
Other Operating Expenses 59,582,692 46,946,473
Exchange Fluctuation Loss - -
Operating Profi t Before Provision for Possible Loss 104,449,084 78,787,580
Provision for Possible Losses 102,326,706 71,078,781
Operating Profi t 2,122,378 7,708,798
Non-operating Income/Loss 938,877 486,423
Loss Provision Written-Back 92,544,258 43,475,339
Profi t from Regular Operations 95,605,514 51,670,561
Profi t/Loss from extra-ordinary activities - -
Net Profi t a� er considering all activities 95,605,514 51,670,561
Staff Bonus Provision 9,560,551 4,697,324
Provision for Income Tax Provision 26,000,241 14,266,825
Current Year’s Tax Provision 27,671,717 15,253,262
Previous Year’s Tax Provision (44,941) -
Current Year Deferred Tax (Income)/Expenses (1,626,535) (986,437)
Net Profi t/Loss 60,044,721 32,706,412
NMB Annual Report-2018/19 21
(C) Corporate Social Responsibility
The Bank as part of its corporate social responsibility continued to support various social and environmental causes that would support the country’s commitment towards achieving UN’s sustainable development goals 2016-2030. The Bank during the review period organized Financial Literacy Programs in various places to aware the people on fi nancial services and support Nepal Government’s vision of fi nancial inclusion of all its citizens. The Bank inaugurated its joint operation ast er the merger of Om Development Bank Ltd. by donating NPR 200,000 as fi nancial support to Apangata Maitri Samaj-a disabled-friendly social organization based in Pokhara.
The Bank has fully supported Pukar Apanga Asakta Samaj (Pukar Disability Social Service) in constructing a residential building for housing diff erently-abled children in ward number 8, Kankai Municipality, Jhapa.
The Bank as in previous years reiterated its commitment towards cultural and historical heritage site preservation, and organized a nation-wide NMB Heritage Walkathon event to raise awareness and fund for the conservation and restoration of such heritage sites in the country. The Bank has spread the CSR activities across the country through its branches and state offi ces and even to the places where the Bank does not have physical presence.
The Bank on the occasion of its anniversary organized various social activities such as distribution of educational materials to poor students, operation of health camps, plantation, etc. across the country through its branch network. The Bank to support literacy in rural areas has been distributing useful books collected from staff , customers, and others.
(D) Human Resources:
The Bank considering the needs of committed and productive staff for the successful implementation of future plans and its overall growth has paid special attention to the development and management of its employees. The Bank believes that empowered employees are the source of happy customers and has made considerable investment in its staff capacity development and eff ective management through various internal and external training programs. During the review period, most of the employees received internal training while 382 employees received external training. 76 employees participated in trainings and seminars outside the country.
In the review year, the number of committed employees was 1120 that increased to 1523 ast er merger of which 623 are females and 900 are male employees. At present, there are 9 employees completing more than 15 years of service period, 136 employees with more than 10 years of service, and 339 employees having worked for more than 5 years in the Bank.
(E) Arrangements for Grievance Handling:
Mr. Sudesh Upadhyaya, Chief Business and Strategy Offi cer who is also a member of the Bank’s management team has been appointed as Grievance Handling Offi cer for hearing grievances of customers and the general public. Also, an online portal has been created on the Bank’s website for grievance handling. In the review year, the Bank received 423 complaints and grievances through its branch offi ces, head offi ce, hotline, and call center. All the grievances other than those related to loan recovery that follows legal procedures have been resolved in time.
www.nmbbanknepal.com22
(F) Board of Directors Meeting and Conduct:
The meeting of Board of Directors has been held regularly as per the existing acts and policies. During the review period, 27 board meetings were held to which the Chairman of the Board was remunerated NPR 13,000 and other board members were remunerated NPR 12,000 each per meeting.
All the Board offi cials have been complying the conducts mentioned in Section 6(1) of Unifi ed Directive 2075.
(G) Management Team:
Mr. Sunil KC has been leading the Bank and its Management Team as the Chief Executive Offi cer. With a banking experience of 28 years, he has been with NMB Bank for over a decade and was the deputy CEO before taking up his new role in the year 2017. Under his leadership during the review period, the Management Team consisted of the following staff members:
Pradeep Pradhan Chief Operating Offi cerShabnam Limbu Joshi Chief Business and Support Offi cerSharad Tegi Tuladhar Chief Risk Offi cerSudesh Upadhyaya Chief Business Offi cerGovind Ghimire Chief Business Offi cerNavin Manandhar Chief Business Offi cerPramod Dahal Company Secretary and Chief Legal, Compliance and AML Offi cerRoshan Regmi Head Operations
Acknowledgement:
On behalf of the Board of Directors, I would like to express my sincere gratitude to all esteemed shareholders, representatives from various regulatory bodies, stakeholders, customers, Management team and the entire staff for supporting the Bank to achieve remarkable fi nancial results and reach new milestones year ast er year.
Thank You.
Pawan Kumar GolyanChairmanDate: 9 January, 2020
NMB Annual Report-2018/19 23
FY 2018/19Annex-15 of Securities Registration and Issue Regulation, 2016
(Details related to clause 26.2)
1. Director’s Report: Director’s report is included in the annual report of FY 2018/19.
2. Auditor’s Report: Auditor’s report is included in the annual report of FY 2018/19.
3. Audited Financial Statements: Audited fi nancial statements are included in the annual report of FY 2018/19.
4. State of Legal Proceedings:
i) If any lawsuit has been fi led by or against the organization within the quarterly period: 45 lawsuits related to debt collection and banking property were being reviewed in various courts during the
last fi nancial year,
ii) If any lawsuit was fi led by or against the founder or director of the organization for disobeying the prevailing rules or committing a criminal off ense:
Not in the information of this Bank.
iii) If any lawsuit has been fi le against founder or director for fi nancial off ence: Not in the information of this Bank.
5. Analysis of organization’s share transactions and progress:
i) Management’s perception regarding the trading of organization’s shares in the securities market: The fl uctuations in share trading are determined by the open market and are in line with the values and
norms of the same
ii) The maximum, minimum and fi nal value of the Bank’s shares in each quarter of the previous fi nancial year as well as the total number and days of transactions.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Maximum Value 380 398 364 400
Minimum Value 303 315 300 356
Last Value 377 392 356 396
Number of Transactions 9,347 10,049 7,514 6,250
Days of Transactions 62 60 60 23
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6. Problems and Challenges:
i) Internal Problems and Challenges: Problems in the management of deposits and loan interest rates due to fl uctuations in liquidity, lack of skilled human resources in the banking sector, the challenge of managing operating risks along with an increase in transactions are considered as internal problems and challenges by the Bank.
ii) External Problems and Challenges: Continuing disputes including taxation among countries with larger economies aff ecting international trade in the region, lack of investment in alternative sectors for expansion of business as compared to capital growth, imbalance in demand for credit and deposit growth, increasing unhealthy competition in banking sector are taken as external problems and challenges by the Bank.
iii) Strategies Adopted by Management: Deposits and credit investments are gradually increased as per Bank’s strategy. The Bank is focused to increase retail loan, agriculture loan, and small and micro-enterprise loan whereas continuously improving the quality of its risk assets portfolio. In addition, the Bank has paid special attention to increasing investment in the productive sector of the country for which priority shall be given to branches expansion in places with high business potential. The Bank has placed emphasis on new areas of income generation and mobilization of deposits, management of passive debts and diversifying risk assets, and use of Finacle Core Banking Sost ware to make the core banking system timely and relevant. The Bank also has made various eff ective training arrangements to make its skilled human resources more robust and effi cient.
7. Corporate Governance
Details on the steps taken by the management of the Bank for the promotion of corporate governance:
i) The policies adopted by the Board of Directors have been implemented.
ii) Various committees formed at the management level (such as Assets and Liability Committee, Human Resources Recruitment Committee, Debt-Risk Management Committee, Corporate Governance Committee, etc.) are active.
iii) In order to organize internal control mechanism, the Audit Committee has been meeting regularly to review and implement the suggestions given by the internal auditors in the regular audit report.
iv) The Risk Management Committee has been meeting regularly to discuss the issues such as stress testing, adequacy of policies and rules, operational risk, etc. and following the instructions received for management.
v) Discussions are being held from time to time by the Assets Laundering Prevention Committee emphasizing on customer identifi cation process and issues related to this area.
vi) Various internal policies, rules and guidelines have been formulated and implemented to manage banking transactions and minimize operational risks.
vii) Full compliance of the directives and guidelines on good governance issued by the regulator bodies including Nepal Rastra Bank, Securities Board, and Company Registrar’s Offi ce.
viii) In order to maintain good governance within the Bank, a Corporate Governance Committee has been constituted and the decisions of the governance issues discussed in the meeting have been implemented. The Chief Executive offi cer has been given the responsibility for maintaining Corporate Governance in the Bank.
NMB Annual Report-2018/19 25
CEO’s MessageI am privileged to report that the Fiscal Year 2018/19 proved to be yet another remarkable year for NMB Bank. The achievements and the accolades that the Bank received during the period has emboldened our vision to become the most preferred Bank in Nepal. Our persistent eff ort towards sustainable growth and untiring approach for the quality and transparency in business was recognized with the prestigious South Asian Federation of Accountants (SAFA) award for “Corporate Governance Disclosures” reaffi rming our commitment towards good governance.
The successful merger of Om Development Bank Ltd. (ODBL); one of the top-ranked development banks in the country, has enabled NMB to strengthen its foothold in the market and continue to serve a larger population base within a much wider geographical coverage. With the merger of ODBL, NMB by far has the largest network presence in Gandaki province.
The economy has been growing consistently by over 6% for third consecutive year and it is projected that this growth shall continue with an overall positive macroeconomic scenario in the future as well. In the backdrop of this positive economy, we see endless possibilities in the country to live up to the expectation of becoming a middle-income nation by the year 2030. The stable government and its gradual liberalization of policies has improved the country’s position in the doing business index with signifi cant improvement in access to credit information, and commercial judicial system amongst others along with the reduction of cost and time for cross-border trading. This has created a conducive environment for business sectors and opportunity for direct foreign investments, while also providing opportunities for Banks to expand its trade related services.
Whilst the country’s macroeconomic indicators look positive on many fronts, the banking industry is frequently overshadowed by volatility in liquidity resulting to a mismatch in deposit mobilization and credit demand, thus creating a funding gap in the market. This variability in fi nancial market is also attributed by the insuffi cient internal resources and/or lack of optimum resource utilization per se.
Riding on the wave of growing economy, the Bank has been able to expand its business and achieve desired outcomes in terms of both fi nancial and non-fi nancial growth as we continue to seek sustainability and responsible banking practices in all our internal and external endeavors. Aligning with country’s vision of self-reliant Nepal and achieving all sustainable development goals, the Bank has prioritized and focused its investments towards the uplist ment of productive and real economy sectors. We believe that our commitment is not just towards the profi t but also towards the sustainability of the backbone of the real economy including Agriculture, Energy, Tourism, and Education.
The Bank over the years has become successful in setting benchmarks in the industry and remain distinct over its competitors. As a joint venture of FMO Netherland and the sole member bank of Global Alliance for Banking on Values (GABV) in Nepal, NMB is the fi rst and only Bank in the industry to bring in foreign debt from renowned international groups including International Finance Corporation (IFC) and CDC Group Plc. With its association to such international investment groups, NMB as of date is the most sought ast er names amongst foreign investors seeking for an investment opportunity based upon sustainability in Nepal. NMB closed the largest ever loan syndication of a cement manufacturing company in the country amounting NPR 16 Billion as a lead Bank
The dynamic business environment and rise of Fintechs and Telecom services in fi nancial sectors has been changing the way of doing business for Nepalese Banks forcing them to adopt digital technologies at much faster pace than ever before in all its functions for eff ective tendering of varying and innovative services to its customers. The Bank understands that digital engagement with its customers is imperative for its future growth and has made substantial
www.nmbbanknepal.com26
investment for digitization of its banking products and processes shortening the service turnaround time for customers and other stakeholders. In this age of information and process of digitization, the Bank has also made sizeable investment in information security to maintain confi dentiality and integrity of all its stakeholders. Guided by the principles of Value-Based Banking in all its processes, NMB is the fi rst and only Bank in Nepal to achieve ISO/IEC 27001:2013 Certifi cation for Information and Security Management making itself the most progressive Bank moving towards customer centricity.
Amidst the market opportunities and prevailing challenges, we believe that the banking industry has lot more to deliver and grow. However, the growth will also incorporate the merger and acquisition of fi nancial institutions as the consolidation in industry is inevitable. The increase in compliance and other regulatory costs with ever-growing challenge and need to tackle risks of money laundering and terrorism fi nancing are also expected to push fi nancial institutions towards consolidation. The digitalization of the services coupled with customers’ growing service expectations will change the way of doing business. Understanding the unavoidable changes manifested by a paradigm shist in doing business and critically analyzing each behavioral change, NMB is all poised to set the standards and seize every opportunity in the market.
I humbly believe that our year-on-year success is the key-result of all the hard works, patience and determination exerted by our staff who together truly forms the most dynamic and energetic team force. I would like to extend my sincere gratitude to FMO for its unprecedented support in SME and digitization eff orts. I also take this opportunity to personally extend my heartfelt thanks to our Chairman Mr. Pawan Kumar Golyan and all board members for their relentless guidance in making NMB one of the best commercial banks of the country. Finally, my sincere thanks to the esteemed shareholders, Nepal Rastra Bank, Ministry of Finance, partner organizations, SEBON, and all other regulatory bodies for their invaluable suggestions to our continuous improvement and business growth. With your constant trust and solidarity, we aspire to grow collectively for many years into the future.
Thank you
Sunil KCChief Executive Offi cer
NMB Annual Report-2018/19 27
Financial Graphs
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
20
40
60
80
100
120
140
160
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
Grow
th %
Volu
me
in N
PR b
ilion
Fiscal Year
Assets and Growth Comparison
Total Assets NMB Growth Percentage of Total Assets
Industry growth percentage of total assets
01020304050607080
State 1 State 2 State 3 State 4 State 5 State 6 State 7
82
75
210
1 1
136
57
210
1 2Vol
ume
in b
illio
n
Province
Province-wise Loan and Deposit Volume
State-wise Total Deposit (FY '18-19)
State-wise Total Loan (FY '18-19)
0%10%20%30%40%50%60%70%80%90%
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
Percentage growth of Deposit Volume
INDUSTRY growth percentage of total deposits
Growth Percentage of Total Deposit of NMB
0%
20%
40%
60%
80%
100%
120%
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
Percentage Growth of Loan Volume
INDUSTRY growth percentage of total Risk Assets
Growth percentage of Total Risk Assets of NMB
-
0.50
1.00
1.50
2.00
2.50
3.00
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
%
Fiscal Year
Efficiency Ratios
Exchange Gain/Total Assets
Net Profit/Loan and Advances
Net Profit/Total Assets
Total Operating Expenses/Total Assets
www.nmbbanknepal.com28
24%
55%
6%
16%
DEPOSIT MIX FY 2017-18
Savings
Fixed
Current
Other deposits
30%
51%
6%13%
DEPOSIT MIX FY 2018-19
Savings
Fixed
Current
Other deposits
33%
43%
17%6%
LOAN MIX FY '18/19
Corporate & Mid-corporateSME/MSME/MF/Agri
Retail
Others
42%
34%
18%6%
LOAN MIX FY '17/18
Corporate & mid-corporateSME/MSME/MF/Agri
Retail
Others
0
10
20
30
020406080
100
FY 2014-15
FY 2015-16
FY 2016-17
FY 2017-18
FY 2018-19 CU
STOM
ER IN
'000
NPR
BILL
ION
FISCAL YEAR
Loan Volume and Account Count
Total Risk Assets Number of Loan Account
0
2,000
4,000
6,000
8,000
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
NPR
mill
ion
Fiscal Year
Total Operating Income and Net Profit
Total Operating Income Net Profit After Tax
0%
50%
100%
150%
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19Grow
th P
erce
ntag
e
Fiscal Year
Industry vs NMB growth percent of net profit
INDUSTRY growth percentage of Net Profit
Growth percentage of net profit of NMB
01,0002,0003,0004,0005,000
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
NPR
mill
ion
Fiscal Year
Trend of NII, Fees and Commission
Net Interest Income Fees and Commission
NMB Annual Report-2018/19 29
-
200
400
600
800
1,000
1,200
0
200
400
600
800
1,000
1,200
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
Num
ber
Volu
me
NPR
mill
ion
Fiscal Year
Staff Number and Cost
Staff Bonus Total Staff Expenses Number of Staff
49%
35%
57%
34%
55%
35%
58%
39%
62%
34%
0%
10%
20%
30%
40%
50%
60%
70%
Staff Expenses/Total Operating Expenses Staff Bonus/Total Staff Expenses
Staff cost analysis FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
02004006008001,000
020406080
100120
FY 2014-15
FY 2015-16
FY 2016-17
FY 2017-18
FY 2018-19
CUST
OMER
IN '0
00
NPR
BILL
ION
FISCAL YEAR
Deposit Volume and Account Count
Total Deposits Number of Deposit Account
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02004006008001000
- 10.00 20.00 30.00 40.00
FY 2014-15
FY 2015-16
FY 2016-17
FY 2017-18
FY 2018-19
NPR
Per S
hare
Fiscal Year
Market value per share and ratios
Market value per share Earning per Share
Dividend per share Price Earning Ratio
0%
5%
10%
15%
20%
25%
30%
35%
40%
02,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
Perc
enta
ge
NPR
in M
io.
Shareholder's Fund, Dividend and ROEShareholder's Fund Total Dividend % Average Return on Equity %
NMB Annual Report-2018/19 31
0%
2%
4%
6%
8%
10%
12%
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
Perc
enta
ge
Fiscal Year
Base Rate, Yield and Cost Trend
Base Rate Weighted Average yield
Weighted Average cost of fund Weighted Average Interest Spread
024681012141618
0
20
40
60
80
100
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
Ratio
Perc
enta
ge
Fiscal Year
Financial Health
CD Ratio Total Capital Adequacy Ratio
Liquidity (CRR) Non-performing credit/Total credit
7.86 7.16
9.26
10.78 11.17
3.63 3.08
4.71
6.76 6.58
-
2.00
4.00
6.00
8.00
10.00
12.00
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
%
Interest Income and Interest Cost
Interest Income/Loan & Advances
Interest Expenses on Total Deposit and Borrowing
www.nmbbanknepal.com32
NMB Annual Report-2018/19 33
Annual Financial Statements FY 2018-19
NMB Bank Ltd.
www.nmbbanknepal.com34
NMB Annual Report-2018/19 35
www.nmbbanknepal.com36
(Am
ount
in N
PR)
Part
icul
ars
Not
eG
roup
NM
B
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Ass
ets
Cash
and
cas
h eq
uiva
lent
4.1
8,8
01,7
46,6
64
5,9
56,7
26,2
06
8,0
96,3
54,5
03
5,1
80,4
04,1
05
Due
from
Nep
al R
astr
a B
ank
4.2
10,
845,
211,
584
6,8
64,7
40,9
37
10,
829,
181,
584
7,2
60,1
94,5
60
Plac
emen
t with
Ban
k an
d Fi
nanc
ial I
nstit
utio
ns4.
3 2
,172
,967
,239
2
76,4
07,1
71
2,1
72,9
67,2
39
276
,407
,171
Der
ivat
ive
fi nan
cial
inst
rum
ents
4.4
8,5
95,4
82,2
82
7,5
06,7
51,4
85
8,5
95,4
82,2
82
7,5
06,7
51,4
85
Othe
r tra
ding
ass
ets
4.5
340
,390
,000
3
21,7
20,0
00
340
,390
,000
3
21,7
20,0
00
Loan
and
adv
ance
s to
B/F
Is4.
6 3
,317
,961
,987
2
,497
,567
,769
3
,317
,961
,987
2
,497
,567
,769
Loan
s an
d ad
vanc
es to
cus
tom
ers
4.7
91,
011,
889,
312
74,
413,
584,
770
88,
485,
031,
394
72,
711,
771,
766
Inve
stm
ent s
ecur
ities
4.8
10,
458,
681,
378
9,6
08,3
68,2
11
10,
316,
351,
016
9,4
48,4
46,7
25
Curr
ent t
ax a
sset
s4.
9 -
-
-
-
Inve
stm
ent i
n su
sidi
arie
s4.
10 -
-
2
48,5
52,0
00
248
,552
,000
Inve
stm
ent i
n as
soci
ates
4.11
-
-
-
-
Inve
stm
ent p
rope
rty
4.12
102
,915
,862
5
9,77
4,62
7 1
02,9
15,8
62
59,
774,
627
Prop
erty
and
equ
ipm
ent
4.13
1,6
16,5
77,6
16
1,5
94,3
45,8
49
1,5
77,8
98,7
04
1,5
59,5
69,5
74
Goo
dwill
and
Inta
ngib
le a
sset
s4.
14 1
16,6
73,1
71
22,
643,
811
115
,408
,800
2
2,05
4,20
9
Def
erre
d ta
x as
sets
4.15
74,
165,
032
69,
938,
833
70,
040,
593
66,
869,
011
Othe
r ass
ets
4.16
1,2
29,8
93,8
58
4,9
09,0
55,0
46
1,2
01,8
73,6
11
4,4
58,3
83,9
03
Tota
l Ass
ets
138
,684
,555
,985
1
14,1
01,6
24,7
15
135
,470
,409
,573
1
11,6
18,4
66,9
05
Not
eA
s at
31
Ash
ad 2
076
As
at 3
2 A
shad
207
5A
s at
31
Ash
ad 2
076
As
at 3
2 A
shad
207
5
Liab
ilitie
s
Due
to B
ank
and
Fina
ncia
l Ins
titui
ons
4.17
624
,364
,996
1
,036
,268
,951
6
24,3
64,9
96
1,0
36,2
68,9
51
Due
to N
epal
Ras
tra
Ban
k4.
18 3
,203
,523
,072
6
60,0
71,6
41
3,2
03,5
23,0
72
660
,071
,641
Der
ivat
ive
fi nan
cial
inst
rum
ents
4.19
8,4
58,3
74,4
29
7,4
77,4
83,8
92
8,4
58,3
74,4
29
7,4
77,4
83,8
92
Dep
osits
from
cus
tom
ers
4.20
98,
830,
664,
647
84,
509,
502,
746
97,
892,
301,
967
83,
970,
867,
219
Bor
row
ing
4.21
4,8
28,3
00,2
09
1,1
82,0
81,8
98
3,4
68,0
60,0
00
-
Curr
ent T
ax L
iabi
litie
s4.
9 3
8,03
9,78
8 6
0,05
1,48
4 3
5,57
8,57
0 6
0,41
8,15
6
Prov
isio
ns4.
22 2
24,2
19
73,
556
-
-
Def
erre
d ta
x lia
bilit
ies
4.15
8,6
05,7
51
5,8
71,8
43
-
-
Othe
r lia
bilit
ies
4.23
2,6
75,9
53,3
73
1,8
71,6
16,5
66
2,1
45,9
55,8
68
1,4
05,9
99,8
00
Deb
t sec
uriti
es is
sued
4.24
2,2
39,2
36,4
12
517
,547
,945
2
,239
,236
,412
5
17,5
47,9
45
Subo
rdin
ated
Lia
bilit
ies
4.25
-
-
-
-
Tota
l lia
bilit
ies
120
,907
,286
,896
9
7,32
0,57
0,52
2 1
18,0
67,3
95,3
14
95,
128,
657,
604
Equi
ty
Shar
e ca
pita
l 4.
26 9
,618
,162
,652
7
,603
,290
,634
9
,618
,162
,652
7
,603
,290
,634
Shar
e pr
emiu
m 2
,512
,798
,517
4
,066
,854
,498
2
,512
,798
,517
4
,061
,366
,586
Ret
aine
d ea
rnin
gs 1
,961
,722
,547
2
,476
,497
,798
1
,780
,326
,613
2
,339
,181
,597
Res
erve
s4.
27 3
,519
,188
,757
2
,502
,931
,208
3
,491
,726
,477
2
,485
,970
,484
Tota
l equ
ity a
ttri
buta
ble
to e
quity
hol
ders
17,
611,
872,
473
16,
649,
574,
138
17,
403,
014,
259
16,
489,
809,
301
Non
-con
trol
ling
inte
rest
165
,396
,616
1
31,4
80,0
54
-
-
Tota
l equ
ity 1
7,77
7,26
9,08
9 1
6,78
1,05
4,19
3 1
7,40
3,01
4,25
9 1
6,48
9,80
9,30
1
Tota
l lia
bilit
ies
and
equi
ty 1
38,6
84,5
55,9
85
114
,101
,624
,715
1
35,4
70,4
09,5
73
111
,618
,466
,905
Cont
inge
nt li
abili
ties
and
com
mitm
ent
4.28
88,
270,
903,
369
84,
803,
180,
879
88,
270,
353,
369
84,
803,
180,
879
Net
Ass
ets
Valu
e pe
r sh
are
183
.11
218
.98
180
.94
216
.88
Cons
olid
ated
Sta
tem
ent o
f Fin
anci
al P
ositi
onA
s at
31
Ash
ad, 2
076
(16
July
, 201
9)
NMB Annual Report-2018/19 37
As
per o
ur a
ttach
ed re
port
of e
ven
date
Mri
dul P
araj
uli
Hea
d-Fi
nanc
e &
Pla
nnin
g
Suni
l KC
CEO
Paw
an K
umar
Gol
yan
Chai
rman
N
ico
Pijl
Dire
ctor
Suni
r K
umar
Dhu
ngel
Man
agin
g Pa
rtne
rSA
R A
ssoc
iate
sCh
arte
red
Acc
ount
ants
Raj
endr
a K
afl e
D
irect
or
Har
isch
andr
a Su
bedi
Dire
ctor
Prad
eep
Raj
Pan
dey
Dire
ctor
Nav
in M
anan
dhar
Chie
f Fin
ance
Offi
cer
Dat
e: S
unda
y, N
ovem
ber 1
0, 2
019
Plac
e: N
MB
Bha
wan
, Bab
arm
ahal
, Kat
hman
du
(Am
ount
in N
PR)
Part
icul
ars
Not
eG
roup
NM
B
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Ass
ets
Cash
and
cas
h eq
uiva
lent
4.1
8,8
01,7
46,6
64
5,9
56,7
26,2
06
8,0
96,3
54,5
03
5,1
80,4
04,1
05
Due
from
Nep
al R
astr
a B
ank
4.2
10,
845,
211,
584
6,8
64,7
40,9
37
10,
829,
181,
584
7,2
60,1
94,5
60
Plac
emen
t with
Ban
k an
d Fi
nanc
ial I
nstit
utio
ns4.
3 2
,172
,967
,239
2
76,4
07,1
71
2,1
72,9
67,2
39
276
,407
,171
Der
ivat
ive
fi nan
cial
inst
rum
ents
4.4
8,5
95,4
82,2
82
7,5
06,7
51,4
85
8,5
95,4
82,2
82
7,5
06,7
51,4
85
Othe
r tra
ding
ass
ets
4.5
340
,390
,000
3
21,7
20,0
00
340
,390
,000
3
21,7
20,0
00
Loan
and
adv
ance
s to
B/F
Is4.
6 3
,317
,961
,987
2
,497
,567
,769
3
,317
,961
,987
2
,497
,567
,769
Loan
s an
d ad
vanc
es to
cus
tom
ers
4.7
91,
011,
889,
312
74,
413,
584,
770
88,
485,
031,
394
72,
711,
771,
766
Inve
stm
ent s
ecur
ities
4.8
10,
458,
681,
378
9,6
08,3
68,2
11
10,
316,
351,
016
9,4
48,4
46,7
25
Curr
ent t
ax a
sset
s4.
9 -
-
-
-
Inve
stm
ent i
n su
sidi
arie
s4.
10 -
-
2
48,5
52,0
00
248
,552
,000
Inve
stm
ent i
n as
soci
ates
4.11
-
-
-
-
Inve
stm
ent p
rope
rty
4.12
102
,915
,862
5
9,77
4,62
7 1
02,9
15,8
62
59,
774,
627
Prop
erty
and
equ
ipm
ent
4.13
1,6
16,5
77,6
16
1,5
94,3
45,8
49
1,5
77,8
98,7
04
1,5
59,5
69,5
74
Goo
dwill
and
Inta
ngib
le a
sset
s4.
14 1
16,6
73,1
71
22,
643,
811
115
,408
,800
2
2,05
4,20
9
Def
erre
d ta
x as
sets
4.15
74,
165,
032
69,
938,
833
70,
040,
593
66,
869,
011
Othe
r ass
ets
4.16
1,2
29,8
93,8
58
4,9
09,0
55,0
46
1,2
01,8
73,6
11
4,4
58,3
83,9
03
Tota
l Ass
ets
138
,684
,555
,985
1
14,1
01,6
24,7
15
135
,470
,409
,573
1
11,6
18,4
66,9
05
Not
eA
s at
31
Ash
ad 2
076
As
at 3
2 A
shad
207
5A
s at
31
Ash
ad 2
076
As
at 3
2 A
shad
207
5
Liab
ilitie
s
Due
to B
ank
and
Fina
ncia
l Ins
titui
ons
4.17
624
,364
,996
1
,036
,268
,951
6
24,3
64,9
96
1,0
36,2
68,9
51
Due
to N
epal
Ras
tra
Ban
k4.
18 3
,203
,523
,072
6
60,0
71,6
41
3,2
03,5
23,0
72
660
,071
,641
Der
ivat
ive
fi nan
cial
inst
rum
ents
4.19
8,4
58,3
74,4
29
7,4
77,4
83,8
92
8,4
58,3
74,4
29
7,4
77,4
83,8
92
Dep
osits
from
cus
tom
ers
4.20
98,
830,
664,
647
84,
509,
502,
746
97,
892,
301,
967
83,
970,
867,
219
Bor
row
ing
4.21
4,8
28,3
00,2
09
1,1
82,0
81,8
98
3,4
68,0
60,0
00
-
Curr
ent T
ax L
iabi
litie
s4.
9 3
8,03
9,78
8 6
0,05
1,48
4 3
5,57
8,57
0 6
0,41
8,15
6
Prov
isio
ns4.
22 2
24,2
19
73,
556
-
-
Def
erre
d ta
x lia
bilit
ies
4.15
8,6
05,7
51
5,8
71,8
43
-
-
Othe
r lia
bilit
ies
4.23
2,6
75,9
53,3
73
1,8
71,6
16,5
66
2,1
45,9
55,8
68
1,4
05,9
99,8
00
Deb
t sec
uriti
es is
sued
4.24
2,2
39,2
36,4
12
517
,547
,945
2
,239
,236
,412
5
17,5
47,9
45
Subo
rdin
ated
Lia
bilit
ies
4.25
-
-
-
-
Tota
l lia
bilit
ies
120
,907
,286
,896
9
7,32
0,57
0,52
2 1
18,0
67,3
95,3
14
95,
128,
657,
604
Equi
ty
Shar
e ca
pita
l 4.
26 9
,618
,162
,652
7
,603
,290
,634
9
,618
,162
,652
7
,603
,290
,634
Shar
e pr
emiu
m 2
,512
,798
,517
4
,066
,854
,498
2
,512
,798
,517
4
,061
,366
,586
Ret
aine
d ea
rnin
gs 1
,961
,722
,547
2
,476
,497
,798
1
,780
,326
,613
2
,339
,181
,597
Res
erve
s4.
27 3
,519
,188
,757
2
,502
,931
,208
3
,491
,726
,477
2
,485
,970
,484
Tota
l equ
ity a
ttri
buta
ble
to e
quity
hol
ders
17,
611,
872,
473
16,
649,
574,
138
17,
403,
014,
259
16,
489,
809,
301
Non
-con
trol
ling
inte
rest
165
,396
,616
1
31,4
80,0
54
-
-
Tota
l equ
ity 1
7,77
7,26
9,08
9 1
6,78
1,05
4,19
3 1
7,40
3,01
4,25
9 1
6,48
9,80
9,30
1
Tota
l lia
bilit
ies
and
equi
ty 1
38,6
84,5
55,9
85
114
,101
,624
,715
1
35,4
70,4
09,5
73
111
,618
,466
,905
Cont
inge
nt li
abili
ties
and
com
mitm
ent
4.28
88,
270,
903,
369
84,
803,
180,
879
88,
270,
353,
369
84,
803,
180,
879
Net
Ass
ets
Valu
e pe
r sh
are
183
.11
218
.98
180
.94
216
.88
www.nmbbanknepal.com38
Consolidated Statement of Profi t or LossFor the year ended 31 Ashad, 2076 (16 July 2019)
(Amount in NPR)
Particulars
Group NMB
Note Year ended 31 Ashad 2076
Year ended 32 Ashad 2075
Year ended 31 Ashad 2076
Year ended 32 Ashad 2075
Interest income 4.29 11,607,773,819 9,169,057,454 11,082,059,031 8,728,699,831
Interest expense 4.30 7,092,738,463 6,036,130,108 6,838,038,085 5,824,685,753
Net interest income 4,515,035,356 3,132,927,346 4,244,020,946 2,904,014,078
Fee and commission income 4.31 1,159,227,002 939,618,308 1,003,530,866 794,250,068
Fee and commission expense 4.32 101,418,691 69,926,838 93,955,270 62,708,027
Net fee and commission income 1,057,808,311 869,691,470 909,575,596 731,542,041
Net interest, fee and commission income 5,572,843,667 4,002,618,816 5,153,596,542 3,635,556,119
Net trading income 4.33 352,049,490 299,605,983 352,049,490 299,605,983
Other operating income 4.34 212,650,641 166,970,494 210,373,919 164,962,228
Total operating income 6,137,543,798 4,469,195,293 5,716,019,951 4,100,124,330 Impairment charge/(reversal) for loans and other losses 4.35 176,055,082 (192,047,347) 166,272,634 (219,650,789)
Net operating income 5,961,488,716 4,661,242,640 5,549,747,317 4,319,775,119
Operating expense
Personnel expenses 4.36 1,587,182,602 1,157,939,860 1,415,793,493 1,021,570,435
Other operating expenses 4.37 764,153,498 642,723,322 708,661,406 589,394,199
Depreciation & Amortisation 4.38 187,669,499 155,987,560 176,793,355 147,695,238
Operating Profi t 3,422,483,117 2,704,591,898 3,248,499,063 2,561,115,247
Non operating income 4.39 17,090,672 43,140,193 17,090,672 43,140,193
Non operating expense 4.40 17,609,148 37,935,379 17,585,901 37,935,379
Profi t before income tax 3,421,964,641 2,709,796,712 3,248,003,834 2,566,320,061
Income tax expense 4.41
Current Tax 1,043,451,780 865,791,637 994,167,044 829,621,042
Deferred Tax expense/(Income) (1,877,083) (116,372,096) (3,439,237) (117,093,734)
Profi t for the period 2,380,389,944 1,960,377,171 2,257,276,027 1,853,792,753
Profi t attributable to:
Equity holders of the Bank 2,345,558,841 1,940,103,356 2,257,276,027 1,853,792,753
Non-controlling interest 34,831,103 20,273,815 - -
Profi t for the period 2,380,389,944 1,960,377,171 2,257,276,027 1,853,792,753
Earnings per share
Basic earnings per share (BEPS) 24.46 22.88 23.54 21.86
Diluted earnings per share (DEPS) 24.46 22.88 23.54 21.86
As per our attached report of even date
Sunil KCCEO
Pawan Kumar GolyanChairman
Nico PijlDirector
Sunir Kumar DhungelManaging PartnerSAR AssociatesChartered Accountants
Mridul ParajuliHead-Finance & Planning
Rajendra Kafl e Director
Harischandra SubediDirector
Pradeep Raj PandeyDirector
Navin ManandharChief Finance Offi cer
Date: Sunday, November 10, 2019Place: NMB Bhawan, Babarmahal, Kathmandu
NMB Annual Report-2018/19 39
Consolidated Statement of Other Comprehensive IncomeFor the year ended 31 Ashad, 2076 (16 July 2019)
(Amount in NPR)
Particulars
Group NMB
Year ended 31 Ashad 2076
Year ended 32 Ashad 2075
Year ended 31 Ashad 2076
Year ended 32 Ashad 2075
Profi t for the year 2,380,389,944 1,960,377,171 2,257,276,027 1,853,792,753
Other comprehensive income, net of income tax
a) Items that will not be reclassifi ed to profi t or loss- Gains/(losses) from investments in equity instru-ments measured at fair value 2,474,640 (41,011,310) 2,162,140 (38,270,067)
- Gains/(losses) on revalution - - - -
- Atuarial gains/(losses) on defi ned benefi t plans (4,188,587) (24,750,032) (1,269,955) (24,971,604)
-Income tax relating to above items (514,184) (19,728,403) 267,656 (18,972,501)
Net other comprehsive income that will not be reclassifi ed to profi t or loss (1,199,763) (46,032,939) 624,530 (44,269,170)
b) Items that are or may be reclassifi ed to profi t or loss - - - -
- Gains/(losses) on cash fl ow hedge - - - -
- Exchange gains/(losses) (arising from translating fi nancial assets of foreign operation) - - - -
- Income tax relating to above items - - - -
- Reclassify to profi t or loss - - - -
Net other comprehsive income that are or may be reclassifi ed to profi t or loss - - - -
c) Share of other comprehensive income of associ-ate accounted as per equited method - - - -
Other comprehensive income for the period, net of income tax (1,199,763) (46,032,939) 624,530 (44,269,170)
Total comprehensive income for the period 2,379,190,181 1,914,344,230 2,257,900,556 1,809,523,583
Total comprehensive income attributable to:
Equity holders of the Bank 2,344,728,421 1,893,994,416 2,257,900,556 1,809,523,583
Non-controlling interest 34,461,761 20,349,814 - -
Total comprehensive income for the period 2,379,190,181 1,914,344,230 2,257,900,556 1,809,523,583
As per our attached report of even date
Sunil KCCEO
Pawan Kumar GolyanChairman
Nico PijlDirector
Sunir Kumar DhungelManaging PartnerSAR AssociatesChartered Accountants
Mridul ParajuliHead-Finance & Planning
Rajendra Kafl e Director
Harischandra SubediDirector
Pradeep Raj PandeyDirector
Navin ManandharChief Finance Offi cer
Date: Sunday, November 10, 2019Place: NMB Bhawan, Babarmahal, Kathmandu
www.nmbbanknepal.com40
Cons
olid
ated
Sta
tem
ent o
f cha
nges
in e
quity
For t
he y
ear e
nded
31
Ash
ad, 2
076
(16
July
201
9)
(Am
ount
in N
PR)
Gro
up
Att
ribu
tabl
e to
equ
ity h
olde
rs o
f the
Gro
up
Part
icul
ars
Sha
re C
apita
l S
hare
pre
miu
m
Gen
eral
re
serv
e E
xcha
nge
equa
lisat
ion
rese
rve
Reg
ulat
ory
rese
rve
Fai
r va
lue
rese
rve
Rev
alua
tion
Res
erve
R
etai
ned
earn
ing
Oth
er re
serv
e T
otal
N
on-c
ontr
ollin
g in
tere
st
Tot
al e
quity
Bal
ance
at 1
5 Ju
ly 2
017
6,4
61,7
74,3
34
1,4
44,7
15,1
09
1,3
09,8
97,1
00
54,
642,
254
-
21,
883,
371
-
1,5
13,8
18,4
19
277
,705
,039
.3
11,
084,
435,
628
111
,856
,859
1
1,19
6,29
2,48
6
Adj
ustm
ent/
Res
tate
men
t -
-
-
-
-
-
-
(2
,612
,928
) -
(2
,612
,928
) -
(2
,612
,928
)
Tran
sfer
to C
apita
l Adj
ustm
ent F
und
-
-
-
-
-
-
-
(4,0
30,9
66)
4,0
30,9
66
-
-
-
Adj
uste
d/R
esta
ted
bala
nce
at 1
6 Ju
ly 2
017
6,4
61,7
74,3
34
1,4
44,7
15,1
09
1,3
09,8
97,1
00
54,
642,
254
-
21,
883,
371
-
1,5
07,1
74,5
25
281
,736
,005
1
1,08
1,82
2,69
8 1
11,8
56,8
59
11,
193,
679,
558
Com
preh
ensi
ve in
com
e fo
r th
e ye
ar 2
017-
18
-
-
-
-
-
Profi
t fo
r th
e ye
ar
-
-
-
-
-
-
-
1,9
40,1
03,3
55
-
1,9
40,1
03,3
56
20,
273,
815
1,9
60,3
77,1
71
Othe
r co
mpr
ehen
sive
inco
me,
net
of t
ax
-
-
-
-
-
-
-
-
-
-
-
-
Gai
n/(L
oss)
from
Inve
stm
ent i
n Eq
uity
Inst
rum
ent
mea
sure
d at
Fai
r Val
ue -
-
-
-
-
(2
8,70
7,91
7) -
-
-
(2
8,70
7,91
7) -
(2
8,70
7,91
7)
Gai
n/(L
oss)
on
reva
luat
ion
-
-
-
-
-
-
-
-
-
-
-
-
Act
uria
l Gai
n/(L
oss)
on
defi n
ed b
enefi
t pl
ans
-
-
-
-
-
-
-
68,
802
(17,
401,
022)
(17,
332,
220)
75,
999
(17,
256,
220)
Gai
n/(L
oss)
on
Cash
Flo
w H
edge
-
-
-
-
-
-
-
-
-
-
-
-
Exch
ange
Gai
n/(L
osss
) (ar
isin
g fr
om tr
ansl
atin
g Fi
nanc
ial A
sset
s of
For
eign
Ope
ratio
n) -
-
-
-
-
-
-
-
-
-
-
-
Tran
sfer
to re
serv
es d
urin
g th
e ye
ar
-
-
374
,094
,605
1
,731
,624
4
04,4
06,6
12
-
-
(882
,235
,818
) 1
03,6
85,6
94
1,6
82,7
16
-
1,6
82,7
16
Gen
eral
rese
rve
fund
-
-
3
74,0
94,6
05
-
-
-
-
(374
,094
,605
) -
-
-
-
Deb
entu
re re
dem
ptio
n re
serv
e -
-
-
-
-
-
-
(9
0,99
9,50
3) 9
0,99
9,50
3 -
-
-
Inve
stm
ent a
djus
tmen
t Res
erve
-
-
-
-
-
-
-
6
,205
,056
(6
,205
,056
) -
-
-
Exch
ange
fl uc
tuat
ion
rese
rve
-
-
-
1,7
31,6
24
-
-
-
(1,7
31,6
24)
-
-
-
-
Corp
orat
e so
cial
resp
onsi
bilit
y fu
nd
-
-
-
-
-
-
-
(17,
041,
728)
17,
041,
728
-
-
-
Cust
omer
Pro
tect
ion
Fund
-
-
-
-
-
-
-
(1
66,8
03)
1,8
49,5
19
1,6
82,7
16
-
1,6
82,7
16
Reg
ulat
ory
Res
erve
-
-
-
-
4
04,4
06,6
12
-
-
(404
,406
,612
) -
-
-
-
Tran
sfer
from
rese
rves
dur
ing
the
year
-
-
-
-
-
-
-
3
,037
,118
(3
,037
,118
) -
-
-
Staff
ski
ll de
velo
pmen
t fun
d -
-
-
-
-
-
-
3
,037
,118
(3
,037
,118
) -
-
-
Tran
sact
ions
with
ow
ners
, dire
ctly
reco
gnis
ed
in e
quity
-
-
-
-
-
-
-
-
-
-
-
-
Shar
e Is
sued
-
-
-
-
-
-
-
-
-
-
-
-
FPO
Issu
ed a
nd A
llote
d 1
,141
,516
,300
-
-
-
-
-
-
-
-
1
,141
,516
,300
-
1
,141
,516
,300
Prem
ium
on
FPO
Issu
e -
2
,659
,732
,979
-
-
-
-
-
-
-
2
,659
,732
,979
-
2
,659
,732
,979
FPO
Issu
e Ex
pens
es (n
et o
ff ta
xes)
-
(2
3,22
4,34
0) -
-
-
-
-
-
-
(2
3,22
4,34
0) -
(2
3,22
4,34
0)
Shar
e ba
sed
paym
ents
-
-
-
-
-
-
-
-
-
-
-
-
Bon
us Is
sue
of N
MB
MF
-
-
-
-
-
-
-
14,
369,
250
-
14,
369,
250
-
14,
369,
250
Div
iden
ds to
equ
ity h
olde
rs
-
-
-
-
-
-
-
-
-
-
-
-
Bon
us s
hare
s is
sued
-
(1
4,36
9,25
0) -
-
-
-
-
-
-
(1
4,36
9,25
0) -
(1
4,36
9,25
0)
Cash
div
iden
d pa
id
-
-
-
-
-
-
-
(106
,019
,434
) -
(1
06,0
19,4
34)
(726
,619
) (1
06,7
46,0
53)
Tota
l con
trib
utio
ns b
y an
d di
stri
butio
ns
1,1
41,5
16,3
00
2,6
22,1
39,3
89
-
-
-
-
-
(91,
650,
184)
-
3,6
72,0
05,5
05
(726
,619
) 3
,671
,278
,886
Bal
ance
at 1
6 Ju
ly 2
018
7,6
03,2
90,6
34
4,0
66,8
54,4
98
1,6
83,9
91,7
05
56,
373,
878
404
,406
,612
(6
,824
,546
) -
2
,476
,497
,798
3
64,9
83,5
58
16,
649,
574,
138
131
,480
,054
1
6,78
1,05
4,19
3
Bal
ance
at 1
7 Ju
ly 2
018
7,6
03,2
90,6
34
4,0
66,8
54,4
98
1,6
83,9
91,7
05
56,
373,
878
404
,406
,612
(6
,824
,546
) -
2
,476
,497
,798
3
64,9
83,5
58
16,
649,
574,
138
131
,480
,054
1
6,78
1,05
4,19
3
Adj
ustm
ent/
Res
tate
men
t -
-
-
-
-
-
-
4
,954
-
4
,954
-
4
,954
Prio
r Per
iod
Taxe
s -
-
-
-
-
-
-
(1
,216
,722
) -
(1
,216
,722
) -
(1
,216
,722
)
Adj
uste
d/R
esta
ted
bala
nce
at 1
7 Ju
ly 2
018
7,6
03,2
90,6
34
4,0
66,8
54,4
98
1,6
83,9
91,7
05
56,
373,
878
404
,406
,612
(6
,824
,546
) -
2
,475
,286
,030
3
64,9
83,5
58
16,
648,
362,
370
131
,480
,054
1
6,77
9,84
2,42
5
Com
preh
ensi
ve in
com
e fo
r th
e ye
ar 2
018-
19
-
-
-
-
-
-
-
-
-
-
-
-
Profi
t fo
r th
e ye
ar
-
-
-
-
-
-
-
2,3
45,5
58,8
41
-
2,3
45,5
58,8
41
34,
831,
103
2,3
80,3
89,9
44
Othe
r co
mpr
ehen
sive
inco
me,
net
of t
ax
-
-
-
-
-
-
-
-
-
-
-
-
Gai
n/(L
oss)
from
Inve
stm
ent i
n Eq
uity
Inst
rum
ent
mea
sure
d at
Fai
r Val
ue -
-
-
-
-
1
,732
,248
-
-
-
1
,732
,248
-
1
,732
,248
Gai
n/(L
oss)
on
reva
luat
ion
-
-
-
-
-
-
-
-
-
- -
-
Act
uria
l Gai
n/(L
oss)
on
defi n
ed b
enefi
t pl
ans
-
-
-
-
-
-
-
-
(2,5
62,6
69)
(2,5
62,6
69)
(369
,342
) (2
,932
,011
)
Gai
n/(L
oss)
on
Cash
Flo
w H
edge
-
-
-
-
-
-
-
-
-
-
-
-
Exch
ange
Gai
n/(L
osss
) (ar
isin
g fr
om tr
ansl
atin
g Fi
nanc
ial A
sset
s of
For
eign
Ope
ratio
n) -
-
-
-
-
-
-
-
-
-
-
-
Tota
l com
preh
ensi
ve in
com
e fo
r th
e ye
ar
-
-
-
-
-
1,7
32,2
48
-
2,3
45,5
58,8
41
(2,5
62,6
69)
2,3
44,7
28,4
21
34,
461,
761
2,3
79,1
90,1
81
Tran
sfer
to re
serv
e du
ring
the
year
-
-
4
57,5
79,7
67
22,
003,
093
414
,326
,452
-
-
(1
,015
,260
,206
) 1
24,1
78,6
58
2,8
27,7
65
(235
) 2
,827
,529
Gen
eral
Res
erve
Fun
d -
-
4
57,5
79,7
67
-
-
-
-
(457
,579
,767
) -
-
-
-
Deb
entu
re R
edem
ptio
n R
eser
ve
-
-
-
-
-
-
-
(90,
452,
511)
90,
452,
511
-
-
-
Inve
stm
ent A
djus
tmen
t Res
erve
-
-
-
-
-
-
-
-
-
-
-
-
Exch
ange
Flu
ctua
tion
Fund
-
-
-
2
2,00
3,09
3 -
-
-
(2
2,00
3,09
3) -
-
-
-
Staff
Ski
ll D
evel
opm
ent F
und
-
-
-
-
-
-
-
-
-
-
-
-
Corp
orat
e So
cial
Res
pons
ibili
ty F
und
-
-
-
-
-
-
-
(17,
200,
430)
17,
200,
186
(245
) (2
35)
(480
)
Cust
omer
Pro
tect
ion
Fund
-
-
-
-
-
-
-
(2
,697
,952
) 5
,525
,961
2
,828
,009
-
2
,828
,009
Def
erre
d Ta
x R
eser
ve
-
-
-
-
-
-
-
-
-
-
-
-
Reg
ulat
ory
Res
erve
-
-
-
-
4
14,3
26,4
52
-
-
(414
,326
,452
) -
-
-
-
NM
B S
taff
Rel
ief F
und
-
-
-
-
-
-
-
(11,
000,
000)
11,
000,
000
-
-
-
Tran
sfer
from
rese
rve
duri
ng th
e ye
ar
-
-
-
-
-
-
-
-
(1,0
00,0
00)
(1,0
00,0
00)
-
(1,0
00,0
00)
Staff
Ski
ll D
evel
opm
ent F
und
-
-
-
-
-
-
-
-
-
-
-
-
NM
B S
taff
Rel
ief F
und
-
-
-
-
-
-
-
-
(1,0
00,0
00)
(1,0
00,0
00)
-
(1,0
00,0
00)
Tran
sact
ions
with
ow
ners
, dire
ctly
reco
gnis
ed
in e
quity
-
-
-
-
-
-
-
-
-
-
-
-
Shar
e Is
sued
-
-
-
-
-
-
-
-
-
-
-
-
Prem
ium
Rec
eive
d fr
om F
MO
-
471
,569
,200
-
-
-
-
-
-
-
4
71,5
69,2
00
-
471
,569
,200
Shar
e Is
sue
Expe
nses
(net
off
taxe
s) -
(5
,265
,251
) -
-
-
-
-
-
-
(5
,265
,251
) -
(5
,265
,251
)
Bon
us S
hare
Issu
e of
NM
BM
F -
-
-
-
-
-
-
1
0,77
6,93
8 -
1
0,77
6,93
8 -
1
0,77
6,93
8
Shar
e ba
sed
paym
ents
-
-
-
-
-
-
-
-
-
-
-
-
Div
iden
ds to
equ
ity h
olde
rs
-
-
-
-
-
-
-
-
-
-
-
-
Bon
us s
hare
s is
sued
2
,014
,872
,018
(2
,020
,359
,931
) -
-
-
-
-
(5
,289
,025
) -
(1
0,77
6,93
8) -
(1
0,77
6,93
8)
Cash
div
iden
d pa
id
-
-
-
-
-
-
-
(1,8
49,3
50,0
32)
-
(1,8
49,3
50,0
32)
(544
,964
) (1
,849
,894
,996
)
Tota
l con
trib
utio
ns b
y an
d di
stri
butio
ns
2,0
14,8
72,0
18
(1,5
54,0
55,9
82)
-
-
-
-
-
(1,8
43,8
62,1
19)
-
(1,3
83,0
46,0
83)
(544
,964
) (1
,383
,591
,047
)
Bal
ance
at 1
6 Ju
ly 2
019
9,6
18,1
62,6
52
2,5
12,7
98,5
17
2,1
41,5
71,4
72
78,
376,
972
818
,733
,064
(5
,092
,298
) -
1
,961
,722
,547
4
85,5
99,5
48
17,
611,
872,
473
165
,396
,616
1
7,77
7,26
9,08
9
NMB Annual Report-2018/19 41
(Am
ount
in N
PR)
Gro
up
Att
ribu
tabl
e to
equ
ity h
olde
rs o
f the
Gro
up
Part
icul
ars
Sha
re C
apita
l S
hare
pre
miu
m
Gen
eral
re
serv
e E
xcha
nge
equa
lisat
ion
rese
rve
Reg
ulat
ory
rese
rve
Fai
r va
lue
rese
rve
Rev
alua
tion
Res
erve
R
etai
ned
earn
ing
Oth
er re
serv
e T
otal
N
on-c
ontr
ollin
g in
tere
st
Tot
al e
quity
Bal
ance
at 1
5 Ju
ly 2
017
6,4
61,7
74,3
34
1,4
44,7
15,1
09
1,3
09,8
97,1
00
54,
642,
254
-
21,
883,
371
-
1,5
13,8
18,4
19
277
,705
,039
.3
11,
084,
435,
628
111
,856
,859
1
1,19
6,29
2,48
6
Adj
ustm
ent/
Res
tate
men
t -
-
-
-
-
-
-
(2
,612
,928
) -
(2
,612
,928
) -
(2
,612
,928
)
Tran
sfer
to C
apita
l Adj
ustm
ent F
und
-
-
-
-
-
-
-
(4,0
30,9
66)
4,0
30,9
66
-
-
-
Adj
uste
d/R
esta
ted
bala
nce
at 1
6 Ju
ly 2
017
6,4
61,7
74,3
34
1,4
44,7
15,1
09
1,3
09,8
97,1
00
54,
642,
254
-
21,
883,
371
-
1,5
07,1
74,5
25
281
,736
,005
1
1,08
1,82
2,69
8 1
11,8
56,8
59
11,
193,
679,
558
Com
preh
ensi
ve in
com
e fo
r th
e ye
ar 2
017-
18
-
-
-
-
-
Profi
t fo
r th
e ye
ar
-
-
-
-
-
-
-
1,9
40,1
03,3
55
-
1,9
40,1
03,3
56
20,
273,
815
1,9
60,3
77,1
71
Othe
r co
mpr
ehen
sive
inco
me,
net
of t
ax
-
-
-
-
-
-
-
-
-
-
-
-
Gai
n/(L
oss)
from
Inve
stm
ent i
n Eq
uity
Inst
rum
ent
mea
sure
d at
Fai
r Val
ue -
-
-
-
-
(2
8,70
7,91
7) -
-
-
(2
8,70
7,91
7) -
(2
8,70
7,91
7)
Gai
n/(L
oss)
on
reva
luat
ion
-
-
-
-
-
-
-
-
-
-
-
-
Act
uria
l Gai
n/(L
oss)
on
defi n
ed b
enefi
t pl
ans
-
-
-
-
-
-
-
68,
802
(17,
401,
022)
(17,
332,
220)
75,
999
(17,
256,
220)
Gai
n/(L
oss)
on
Cash
Flo
w H
edge
-
-
-
-
-
-
-
-
-
-
-
-
Exch
ange
Gai
n/(L
osss
) (ar
isin
g fr
om tr
ansl
atin
g Fi
nanc
ial A
sset
s of
For
eign
Ope
ratio
n) -
-
-
-
-
-
-
-
-
-
-
-
Tran
sfer
to re
serv
es d
urin
g th
e ye
ar
-
-
374
,094
,605
1
,731
,624
4
04,4
06,6
12
-
-
(882
,235
,818
) 1
03,6
85,6
94
1,6
82,7
16
-
1,6
82,7
16
Gen
eral
rese
rve
fund
-
-
3
74,0
94,6
05
-
-
-
-
(374
,094
,605
) -
-
-
-
Deb
entu
re re
dem
ptio
n re
serv
e -
-
-
-
-
-
-
(9
0,99
9,50
3) 9
0,99
9,50
3 -
-
-
Inve
stm
ent a
djus
tmen
t Res
erve
-
-
-
-
-
-
-
6
,205
,056
(6
,205
,056
) -
-
-
Exch
ange
fl uc
tuat
ion
rese
rve
-
-
-
1,7
31,6
24
-
-
-
(1,7
31,6
24)
-
-
-
-
Corp
orat
e so
cial
resp
onsi
bilit
y fu
nd
-
-
-
-
-
-
-
(17,
041,
728)
17,
041,
728
-
-
-
Cust
omer
Pro
tect
ion
Fund
-
-
-
-
-
-
-
(1
66,8
03)
1,8
49,5
19
1,6
82,7
16
-
1,6
82,7
16
Reg
ulat
ory
Res
erve
-
-
-
-
4
04,4
06,6
12
-
-
(404
,406
,612
) -
-
-
-
Tran
sfer
from
rese
rves
dur
ing
the
year
-
-
-
-
-
-
-
3
,037
,118
(3
,037
,118
) -
-
-
Staff
ski
ll de
velo
pmen
t fun
d -
-
-
-
-
-
-
3
,037
,118
(3
,037
,118
) -
-
-
Tran
sact
ions
with
ow
ners
, dire
ctly
reco
gnis
ed
in e
quity
-
-
-
-
-
-
-
-
-
-
-
-
Shar
e Is
sued
-
-
-
-
-
-
-
-
-
-
-
-
FPO
Issu
ed a
nd A
llote
d 1
,141
,516
,300
-
-
-
-
-
-
-
-
1
,141
,516
,300
-
1
,141
,516
,300
Prem
ium
on
FPO
Issu
e -
2
,659
,732
,979
-
-
-
-
-
-
-
2
,659
,732
,979
-
2
,659
,732
,979
FPO
Issu
e Ex
pens
es (n
et o
ff ta
xes)
-
(2
3,22
4,34
0) -
-
-
-
-
-
-
(2
3,22
4,34
0) -
(2
3,22
4,34
0)
Shar
e ba
sed
paym
ents
-
-
-
-
-
-
-
-
-
-
-
-
Bon
us Is
sue
of N
MB
MF
-
-
-
-
-
-
-
14,
369,
250
-
14,
369,
250
-
14,
369,
250
Div
iden
ds to
equ
ity h
olde
rs
-
-
-
-
-
-
-
-
-
-
-
-
Bon
us s
hare
s is
sued
-
(1
4,36
9,25
0) -
-
-
-
-
-
-
(1
4,36
9,25
0) -
(1
4,36
9,25
0)
Cash
div
iden
d pa
id
-
-
-
-
-
-
-
(106
,019
,434
) -
(1
06,0
19,4
34)
(726
,619
) (1
06,7
46,0
53)
Tota
l con
trib
utio
ns b
y an
d di
stri
butio
ns
1,1
41,5
16,3
00
2,6
22,1
39,3
89
-
-
-
-
-
(91,
650,
184)
-
3,6
72,0
05,5
05
(726
,619
) 3
,671
,278
,886
Bal
ance
at 1
6 Ju
ly 2
018
7,6
03,2
90,6
34
4,0
66,8
54,4
98
1,6
83,9
91,7
05
56,
373,
878
404
,406
,612
(6
,824
,546
) -
2
,476
,497
,798
3
64,9
83,5
58
16,
649,
574,
138
131
,480
,054
1
6,78
1,05
4,19
3
Bal
ance
at 1
7 Ju
ly 2
018
7,6
03,2
90,6
34
4,0
66,8
54,4
98
1,6
83,9
91,7
05
56,
373,
878
404
,406
,612
(6
,824
,546
) -
2
,476
,497
,798
3
64,9
83,5
58
16,
649,
574,
138
131
,480
,054
1
6,78
1,05
4,19
3
Adj
ustm
ent/
Res
tate
men
t -
-
-
-
-
-
-
4
,954
-
4
,954
-
4
,954
Prio
r Per
iod
Taxe
s -
-
-
-
-
-
-
(1
,216
,722
) -
(1
,216
,722
) -
(1
,216
,722
)
Adj
uste
d/R
esta
ted
bala
nce
at 1
7 Ju
ly 2
018
7,6
03,2
90,6
34
4,0
66,8
54,4
98
1,6
83,9
91,7
05
56,
373,
878
404
,406
,612
(6
,824
,546
) -
2
,475
,286
,030
3
64,9
83,5
58
16,
648,
362,
370
131
,480
,054
1
6,77
9,84
2,42
5
Com
preh
ensi
ve in
com
e fo
r th
e ye
ar 2
018-
19
-
-
-
-
-
-
-
-
-
-
-
-
Profi
t fo
r th
e ye
ar
-
-
-
-
-
-
-
2,3
45,5
58,8
41
-
2,3
45,5
58,8
41
34,
831,
103
2,3
80,3
89,9
44
Othe
r co
mpr
ehen
sive
inco
me,
net
of t
ax
-
-
-
-
-
-
-
-
-
-
-
-
Gai
n/(L
oss)
from
Inve
stm
ent i
n Eq
uity
Inst
rum
ent
mea
sure
d at
Fai
r Val
ue -
-
-
-
-
1
,732
,248
-
-
-
1
,732
,248
-
1
,732
,248
Gai
n/(L
oss)
on
reva
luat
ion
-
-
-
-
-
-
-
-
-
- -
-
Act
uria
l Gai
n/(L
oss)
on
defi n
ed b
enefi
t pl
ans
-
-
-
-
-
-
-
-
(2,5
62,6
69)
(2,5
62,6
69)
(369
,342
) (2
,932
,011
)
Gai
n/(L
oss)
on
Cash
Flo
w H
edge
-
-
-
-
-
-
-
-
-
-
-
-
Exch
ange
Gai
n/(L
osss
) (ar
isin
g fr
om tr
ansl
atin
g Fi
nanc
ial A
sset
s of
For
eign
Ope
ratio
n) -
-
-
-
-
-
-
-
-
-
-
-
Tota
l com
preh
ensi
ve in
com
e fo
r th
e ye
ar
-
-
-
-
-
1,7
32,2
48
-
2,3
45,5
58,8
41
(2,5
62,6
69)
2,3
44,7
28,4
21
34,
461,
761
2,3
79,1
90,1
81
Tran
sfer
to re
serv
e du
ring
the
year
-
-
4
57,5
79,7
67
22,
003,
093
414
,326
,452
-
-
(1
,015
,260
,206
) 1
24,1
78,6
58
2,8
27,7
65
(235
) 2
,827
,529
Gen
eral
Res
erve
Fun
d -
-
4
57,5
79,7
67
-
-
-
-
(457
,579
,767
) -
-
-
-
Deb
entu
re R
edem
ptio
n R
eser
ve
-
-
-
-
-
-
-
(90,
452,
511)
90,
452,
511
-
-
-
Inve
stm
ent A
djus
tmen
t Res
erve
-
-
-
-
-
-
-
-
-
-
-
-
Exch
ange
Flu
ctua
tion
Fund
-
-
-
2
2,00
3,09
3 -
-
-
(2
2,00
3,09
3) -
-
-
-
Staff
Ski
ll D
evel
opm
ent F
und
-
-
-
-
-
-
-
-
-
-
-
-
Corp
orat
e So
cial
Res
pons
ibili
ty F
und
-
-
-
-
-
-
-
(17,
200,
430)
17,
200,
186
(245
) (2
35)
(480
)
Cust
omer
Pro
tect
ion
Fund
-
-
-
-
-
-
-
(2
,697
,952
) 5
,525
,961
2
,828
,009
-
2
,828
,009
Def
erre
d Ta
x R
eser
ve
-
-
-
-
-
-
-
-
-
-
-
-
Reg
ulat
ory
Res
erve
-
-
-
-
4
14,3
26,4
52
-
-
(414
,326
,452
) -
-
-
-
NM
B S
taff
Rel
ief F
und
-
-
-
-
-
-
-
(11,
000,
000)
11,
000,
000
-
-
-
Tran
sfer
from
rese
rve
duri
ng th
e ye
ar
-
-
-
-
-
-
-
-
(1,0
00,0
00)
(1,0
00,0
00)
-
(1,0
00,0
00)
Staff
Ski
ll D
evel
opm
ent F
und
-
-
-
-
-
-
-
-
-
-
-
-
NM
B S
taff
Rel
ief F
und
-
-
-
-
-
-
-
-
(1,0
00,0
00)
(1,0
00,0
00)
-
(1,0
00,0
00)
Tran
sact
ions
with
ow
ners
, dire
ctly
reco
gnis
ed
in e
quity
-
-
-
-
-
-
-
-
-
-
-
-
Shar
e Is
sued
-
-
-
-
-
-
-
-
-
-
-
-
Prem
ium
Rec
eive
d fr
om F
MO
-
471
,569
,200
-
-
-
-
-
-
-
4
71,5
69,2
00
-
471
,569
,200
Shar
e Is
sue
Expe
nses
(net
off
taxe
s) -
(5
,265
,251
) -
-
-
-
-
-
-
(5
,265
,251
) -
(5
,265
,251
)
Bon
us S
hare
Issu
e of
NM
BM
F -
-
-
-
-
-
-
1
0,77
6,93
8 -
1
0,77
6,93
8 -
1
0,77
6,93
8
Shar
e ba
sed
paym
ents
-
-
-
-
-
-
-
-
-
-
-
-
Div
iden
ds to
equ
ity h
olde
rs
-
-
-
-
-
-
-
-
-
-
-
-
Bon
us s
hare
s is
sued
2
,014
,872
,018
(2
,020
,359
,931
) -
-
-
-
-
(5
,289
,025
) -
(1
0,77
6,93
8) -
(1
0,77
6,93
8)
Cash
div
iden
d pa
id
-
-
-
-
-
-
-
(1,8
49,3
50,0
32)
-
(1,8
49,3
50,0
32)
(544
,964
) (1
,849
,894
,996
)
Tota
l con
trib
utio
ns b
y an
d di
stri
butio
ns
2,0
14,8
72,0
18
(1,5
54,0
55,9
82)
-
-
-
-
-
(1,8
43,8
62,1
19)
-
(1,3
83,0
46,0
83)
(544
,964
) (1
,383
,591
,047
)
Bal
ance
at 1
6 Ju
ly 2
019
9,6
18,1
62,6
52
2,5
12,7
98,5
17
2,1
41,5
71,4
72
78,
376,
972
818
,733
,064
(5
,092
,298
) -
1
,961
,722
,547
4
85,5
99,5
48
17,
611,
872,
473
165
,396
,616
1
7,77
7,26
9,08
9
www.nmbbanknepal.com42
(Am
ount
in N
PR)
NM
B
Att
ribu
tabl
e to
equ
ity h
olde
rs o
f the
Ban
k
Part
icul
ars
Shar
e Ca
pita
lSh
are
prem
ium
Gen
eral
re
serv
eEx
chan
ge
equa
lisat
ion
rese
rve
Reg
ulat
ory
rese
rve
Fair
val
ue
rese
rve
Rev
alua
tion
Res
erve
Ret
aine
d ea
rnin
gOt
her
rese
rve
Tota
lN
on-c
ontr
ollin
g in
tere
stTo
tal e
quity
Bal
ance
at 1
5 Ju
ly 2
017
6,4
61,7
74,3
34
1,4
24,8
57,9
47
1,3
01,0
92,9
03
54,
642,
254
-
19,
731,
751
-
1,3
64,9
48,8
51
275
,212
,739
1
0,90
2,26
0,77
9 -
10
,902
,260
,779
Adj
ustm
ent/
Res
tate
men
t -
-
Tran
sfer
to C
apita
l Adj
ustm
ent F
und
-
-
-
-
-
-
-
(4,0
30,9
66)
4,0
30,9
66
-
-
-
Adj
uste
d/R
esta
ted
bala
nce
at 1
6 Ju
ly 2
017
6,46
1,77
4,33
4 1
,424
,857
,947
1
,301
,092
,903
5
4,64
2,25
4 -
1
9,73
1,75
1 -
1
,360
,917
,885
2
79,2
43,7
05
10,
902,
260,
779
-
10,
902,
260,
779
Com
preh
ensi
ve in
com
e fo
r th
e ye
ar 2
017-
18 -
-
Profi
t fo
r th
e ye
ar -
-
-
-
-
-
-
1
,853
,792
,753
-
1
,853
,792
,753
-
1
,853
,792
,753
Othe
r co
mpr
ehen
sive
inco
me,
net
of t
ax -
-
-
-
-
-
-
-
-
-
-
-
Gai
n/(L
oss)
from
Inve
stm
ent i
n Eq
uity
Inst
rum
ent
mea
sure
d at
Fai
r Val
ue -
-
-
-
-
(2
6,78
9,04
7) -
-
-
(2
6,78
9,04
7) -
(2
6,78
9,04
7)
Gai
n/(L
oss)
on
reva
luat
ion
-
-
-
-
-
-
-
-
-
-
-
-
Act
uria
l Gai
n/(L
oss)
on
defi n
ed b
enefi
t pl
ans
-
-
-
-
-
-
-
-
(17,
480,
123)
(17,
480,
123)
-
(17,
480,
123)
Gai
n/(L
oss)
on
Cash
Flo
w H
edge
-
-
-
-
-
-
-
-
-
-
-
-
Exch
ange
Gai
n/(L
osss
) (ar
isin
g fr
om tr
ansl
atin
g Fi
nan-
cial
Ass
ets
of F
orei
gn O
pera
tion)
-
-
-
-
-
-
-
-
-
-
-
-
Tota
l com
preh
ensi
ve in
com
e fo
r th
e ye
ar -
-
-
-
-
(2
6,78
9,04
7) -
1
,853
,792
,753
(1
7,48
0,12
3) 1
,809
,523
,583
-
1
,809
,523
,583
Tran
sfer
to re
serv
e du
ring
the
year
-
-
370
,758
,551
1
,731
,624
4
04,4
06,6
12
-
-
(878
,566
,159
) 1
01,6
69,3
72
-
-
-
Gen
eral
rese
rve
fund
-
-
370
,758
,551
-
-
-
-
(3
70,7
58,5
51)
-
-
-
-
Deb
entu
re re
dem
ptio
n re
serv
e -
-
-
-
-
-
-
(9
0,99
9,50
3) 9
0,99
9,50
3 -
-
-
Inve
stm
ent a
djus
tmen
t Res
erve
-
-
-
-
-
-
-
6,2
05,0
56
(6,2
05,0
56)
-
-
-
Exch
ange
fl uc
tuat
ion
rese
rve
-
-
-
1,7
31,6
24
-
-
-
(1,7
31,6
24)
-
-
-
-
Reg
ulat
ory
Res
erve
-
-
-
-
404
,406
,612
-
-
(4
04,4
06,6
12)
-
-
-
-
Corp
orat
e so
cial
resp
onsi
bilit
y fu
nd -
-
-
-
-
-
-
(1
6,87
4,92
6) 1
6,87
4,92
6 -
-
-
Tran
sfer
from
rese
rve
duri
ng th
e ye
ar -
-
-
-
-
-
-
3
,037
,118
(3
,037
,118
) -
-
-
Staff
Ski
ll D
evel
opm
ent F
und
-
-
-
-
-
-
-
3,0
37,1
18
(3,0
37,1
18)
-
-
-
Tran
sact
ions
with
ow
ners
, dire
ctly
reco
gnis
ed in
eq
uity
-
-
-
-
-
-
-
-
-
-
-
-
Shar
e Is
sued
-
-
-
-
-
-
-
-
-
-
-
-
FPO
Issu
ed a
nd A
llote
d 1
,141
,516
,300
-
-
-
-
-
-
-
-
1
,141
,516
,300
-
1
,141
,516
,300
Prem
ium
on
FPO
Issu
e -
2
,659
,732
,979
-
-
-
-
-
-
-
2
,659
,732
,979
-
2
,659
,732
,979
FPO
Issu
e Ex
pens
es (n
et o
ff ta
xes)
-
(23,
224,
340)
-
-
-
-
-
-
-
(23,
224,
340)
-
(23,
224,
340)
Shar
e ba
sed
paym
ents
-
-
-
-
-
-
-
-
-
-
-
-
Div
iden
ds to
equ
ity h
olde
rs -
-
-
-
-
-
-
-
-
-
-
-
Bon
us s
hare
s is
sued
-
-
-
-
-
-
-
-
-
-
-
-
Cash
div
iden
d pa
id -
-
-
-
-
-
-
-
-
-
-
-
Tota
l con
trib
utio
ns b
y an
d di
stri
butio
ns 1
,141
,516
,300
2
,636
,508
,639
-
-
-
-
-
-
-
3
,778
,024
,939
-
3
,778
,024
,939
Bal
ance
at 1
6 Ju
ly 2
018
7,6
03,2
90,6
34
4,0
61,3
66,5
86
1,6
71,8
51,4
54
56,
373,
878
404
,406
,612
(7
,057
,296
) -
2
,339
,181
,597
3
60,3
95,8
36
16,
489,
809,
301
-
16,
489,
809,
301
Bal
ance
at 1
7 Ju
ly 2
018
7,60
3,29
0,63
4 4
,061
,366
,586
1
,671
,851
,454
5
6,37
3,87
8 4
04,4
06,6
12
(7,0
57,2
96)
-
2,3
39,1
81,5
97
360
,395
,836
1
6,48
9,80
9,30
1 -
16
,489
,809
,301
Adj
ustm
ent/
Res
tate
men
t -
-
-
-
-
-
-
-
-
-
-
-
Prio
r Per
iod
Adj
ustm
ents
-
-
-
-
-
-
-
(1,2
16,7
22)
-
(1,2
16,7
22)
-
(1,2
16,7
22)
Adj
uste
d/R
esta
ted
bala
nce
at 1
7 Ju
ly 2
018
7,6
03,2
90,6
34
4,0
61,3
66,5
86
1,6
71,8
51,4
54
56,
373,
878
404
,406
,612
(7
,057
,296
) -
2
,337
,964
,875
3
60,3
95,8
36
16,
488,
592,
578
-
16,
488,
592,
578
Com
preh
ensi
ve in
com
e fo
r th
e ye
ar 2
018-
19 -
-
-
-
-
-
-
-
-
-
-
-
Profi
t fo
r th
e ye
ar -
-
-
-
-
-
-
2
,257
,276
,027
-
2
,257
,276
,027
-
2
,257
,276
,027
Othe
r co
mpr
ehen
sive
inco
me,
net
of t
ax -
-
-
-
-
-
-
-
-
-
-
-
Gai
n/(L
oss)
from
Inve
stm
ent i
n Eq
uity
Inst
rum
ent
mea
sure
d at
Fai
r Val
ue -
-
-
-
-
1
,513
,498
-
-
-
1
,513
,498
-
1
,513
,498
Gai
n/(L
oss)
on
reva
luat
ion
-
-
-
-
-
-
-
-
-
- -
-
Act
uria
l Gai
n/(L
oss)
on
defi n
ed b
enefi
t pl
ans
-
-
-
-
-
-
-
-
(888
,969
) (8
88,9
69)
-
(888
,969
)
Gai
n/(L
oss)
on
Cash
Flo
w H
edge
-
-
-
-
-
-
-
-
-
- -
-
Exch
ange
Gai
n/(L
osss
) (ar
isin
g fr
om tr
ansl
atin
g Fi
nan-
cial
Ass
ets
of F
orei
gn O
pera
tion)
-
-
-
-
-
-
-
-
-
-
-
-
Tota
l com
preh
ensi
ve in
com
e fo
r th
e ye
ar -
-
-
-
-
1
,513
,498
-
2
,257
,276
,027
(8
88,9
69)
2,2
57,9
00,5
56
-
2,2
57,9
00,5
56
Tran
sfer
to re
serv
e du
ring
the
year
-
-
451
,455
,205
2
2,00
3,09
3 4
14,3
26,4
52
-
-
(1,0
06,1
31,4
64)
118
,346
,713
-
-
-
Gen
eral
Res
erve
Fun
d -
-
4
51,4
55,2
05
-
-
-
-
(451
,455
,205
) -
-
-
-
Deb
entu
re R
edem
ptio
n R
eser
ve -
-
-
-
-
-
-
(9
0,45
2,51
1) 9
0,45
2,51
1 -
-
-
Inve
stm
ent A
djus
tmen
t Res
erve
-
-
-
-
-
-
-
-
-
-
-
-
Exch
ange
Flu
ctua
tion
Fund
-
-
-
22,
003,
093
-
-
-
(22,
003,
093)
-
-
-
-
Corp
orat
e So
cial
Res
pons
ibili
ty F
und
-
-
-
-
-
-
-
(16,
894,
202)
16,
894,
202
-
-
-
Cust
omer
Pro
tect
ion
Fund
-
-
-
-
-
-
-
-
-
-
-
-
Def
erre
d Ta
x R
eser
ve -
-
-
-
-
-
-
-
-
-
-
-
Shar
e ba
sed
paym
ents
-
-
-
-
-
-
-
-
-
-
-
-
Reg
ulat
ory
Res
erve
-
-
-
-
414
,326
,452
-
-
(4
14,3
26,4
52)
-
-
-
-
NM
B S
taff
Rel
ief F
und
-
-
-
-
-
-
-
(11,
000,
000)
11,
000,
000
-
-
-
Tran
sfer
from
rese
rve
duri
ng th
e ye
ar -
-
-
-
-
-
-
-
(1
,000
,000
) (1
,000
,000
) -
(1
,000
,000
)
Staff
Ski
ll D
evel
opm
ent F
und
-
-
-
-
-
-
-
-
-
-
-
-
NM
B S
taff
Rel
ief F
und
-
-
-
-
-
-
-
-
(1,0
00,0
00)
(1,0
00,0
00)
-
(1,0
00,0
00)
Tran
sact
ions
with
ow
ners
, dire
ctly
reco
gnis
ed in
eq
uity
-
-
-
-
-
-
-
-
-
-
-
-
Shar
e Is
sued
-
-
-
-
-
-
-
-
-
-
-
-
Prem
ium
Rec
eive
d fr
om F
MO
-
471
,569
,200
-
-
-
-
-
-
-
4
71,5
69,2
00
-
471
,569
,200
Shar
e Is
sue
Expe
nses
(net
off
taxe
s) -
(5
,265
,251
) -
-
-
-
-
-
-
(5
,265
,251
) -
(5
,265
,251
)
Shar
e ba
sed
paym
ents
-
-
-
-
-
-
-
-
-
-
-
Div
iden
ds to
equ
ity h
olde
rs -
-
-
-
-
-
-
-
-
-
-
-
Bon
us s
hare
s is
sued
2,0
14,8
72,0
18
(2,0
14,8
72,0
18)
-
-
-
-
-
-
-
-
-
-
Cash
div
iden
d pa
id -
-
-
-
-
-
-
(1
,808
,782
,825
) -
(1
,808
,782
,825
) -
(1
,808
,782
,825
)
Tota
l con
trib
utio
ns b
y an
d di
stri
butio
ns 2
,014
,872
,018
(1
,548
,568
,069
) -
-
-
-
-
(1
,808
,782
,825
) -
(1
,342
,478
,876
) -
(1
,342
,478
,876
)
Bal
ance
at 1
6 Ju
ly 2
019
9,6
18,1
62,6
52
2,5
12,7
98,5
17
2,1
23,3
06,6
59
78,
376,
972
818
,733
,064
(5
,543
,798
) -
1
,780
,326
,613
4
76,8
53,5
81
17,
403,
014,
259
-
17,
403,
014,
259
Cons
olid
ated
Sta
tem
ent o
f cha
nges
in e
quity
For t
he y
ear e
nded
31
Ash
ad, 2
076
(16
July
201
9)
NMB Annual Report-2018/19 43
Mri
dul P
araj
uli
Hea
d-Fi
nanc
e &
Pla
nnin
g
Suni
l KC
CEO
Paw
an K
umar
Gol
yan
Chai
rman
N
ico
Pijl
Dire
ctor
Suni
r K
umar
Dhu
ngel
Man
agin
g Pa
rtne
rSA
R A
ssoc
iate
sCh
arte
red
Acc
ount
ants
Raj
endr
a K
afl e
D
irect
or
Har
isch
andr
a Su
bedi
Dire
ctor
Prad
eep
Raj
Pan
dey
Dire
ctor
Nav
in M
anan
dhar
Chie
f Fin
ance
Offi
cer
Dat
e: S
unda
y, N
ovem
ber 1
0, 2
019
Plac
e: N
MB
Bha
wan
, Bab
arm
ahal
, Kat
hman
du
As
per o
ur a
ttach
ed re
port
of e
ven
date
(Am
ount
in N
PR)
NM
B
Att
ribu
tabl
e to
equ
ity h
olde
rs o
f the
Ban
k
Part
icul
ars
Shar
e Ca
pita
lSh
are
prem
ium
Gen
eral
re
serv
eEx
chan
ge
equa
lisat
ion
rese
rve
Reg
ulat
ory
rese
rve
Fair
val
ue
rese
rve
Rev
alua
tion
Res
erve
Ret
aine
d ea
rnin
gOt
her
rese
rve
Tota
lN
on-c
ontr
ollin
g in
tere
stTo
tal e
quity
Bal
ance
at 1
5 Ju
ly 2
017
6,4
61,7
74,3
34
1,4
24,8
57,9
47
1,3
01,0
92,9
03
54,
642,
254
-
19,
731,
751
-
1,3
64,9
48,8
51
275
,212
,739
1
0,90
2,26
0,77
9 -
10
,902
,260
,779
Adj
ustm
ent/
Res
tate
men
t -
-
Tran
sfer
to C
apita
l Adj
ustm
ent F
und
-
-
-
-
-
-
-
(4,0
30,9
66)
4,0
30,9
66
-
-
-
Adj
uste
d/R
esta
ted
bala
nce
at 1
6 Ju
ly 2
017
6,46
1,77
4,33
4 1
,424
,857
,947
1
,301
,092
,903
5
4,64
2,25
4 -
1
9,73
1,75
1 -
1
,360
,917
,885
2
79,2
43,7
05
10,
902,
260,
779
-
10,
902,
260,
779
Com
preh
ensi
ve in
com
e fo
r th
e ye
ar 2
017-
18 -
-
Profi
t fo
r th
e ye
ar -
-
-
-
-
-
-
1
,853
,792
,753
-
1
,853
,792
,753
-
1
,853
,792
,753
Othe
r co
mpr
ehen
sive
inco
me,
net
of t
ax -
-
-
-
-
-
-
-
-
-
-
-
Gai
n/(L
oss)
from
Inve
stm
ent i
n Eq
uity
Inst
rum
ent
mea
sure
d at
Fai
r Val
ue -
-
-
-
-
(2
6,78
9,04
7) -
-
-
(2
6,78
9,04
7) -
(2
6,78
9,04
7)
Gai
n/(L
oss)
on
reva
luat
ion
-
-
-
-
-
-
-
-
-
-
-
-
Act
uria
l Gai
n/(L
oss)
on
defi n
ed b
enefi
t pl
ans
-
-
-
-
-
-
-
-
(17,
480,
123)
(17,
480,
123)
-
(17,
480,
123)
Gai
n/(L
oss)
on
Cash
Flo
w H
edge
-
-
-
-
-
-
-
-
-
-
-
-
Exch
ange
Gai
n/(L
osss
) (ar
isin
g fr
om tr
ansl
atin
g Fi
nan-
cial
Ass
ets
of F
orei
gn O
pera
tion)
-
-
-
-
-
-
-
-
-
-
-
-
Tota
l com
preh
ensi
ve in
com
e fo
r th
e ye
ar -
-
-
-
-
(2
6,78
9,04
7) -
1
,853
,792
,753
(1
7,48
0,12
3) 1
,809
,523
,583
-
1
,809
,523
,583
Tran
sfer
to re
serv
e du
ring
the
year
-
-
370
,758
,551
1
,731
,624
4
04,4
06,6
12
-
-
(878
,566
,159
) 1
01,6
69,3
72
-
-
-
Gen
eral
rese
rve
fund
-
-
370
,758
,551
-
-
-
-
(3
70,7
58,5
51)
-
-
-
-
Deb
entu
re re
dem
ptio
n re
serv
e -
-
-
-
-
-
-
(9
0,99
9,50
3) 9
0,99
9,50
3 -
-
-
Inve
stm
ent a
djus
tmen
t Res
erve
-
-
-
-
-
-
-
6,2
05,0
56
(6,2
05,0
56)
-
-
-
Exch
ange
fl uc
tuat
ion
rese
rve
-
-
-
1,7
31,6
24
-
-
-
(1,7
31,6
24)
-
-
-
-
Reg
ulat
ory
Res
erve
-
-
-
-
404
,406
,612
-
-
(4
04,4
06,6
12)
-
-
-
-
Corp
orat
e so
cial
resp
onsi
bilit
y fu
nd -
-
-
-
-
-
-
(1
6,87
4,92
6) 1
6,87
4,92
6 -
-
-
Tran
sfer
from
rese
rve
duri
ng th
e ye
ar -
-
-
-
-
-
-
3
,037
,118
(3
,037
,118
) -
-
-
Staff
Ski
ll D
evel
opm
ent F
und
-
-
-
-
-
-
-
3,0
37,1
18
(3,0
37,1
18)
-
-
-
Tran
sact
ions
with
ow
ners
, dire
ctly
reco
gnis
ed in
eq
uity
-
-
-
-
-
-
-
-
-
-
-
-
Shar
e Is
sued
-
-
-
-
-
-
-
-
-
-
-
-
FPO
Issu
ed a
nd A
llote
d 1
,141
,516
,300
-
-
-
-
-
-
-
-
1
,141
,516
,300
-
1
,141
,516
,300
Prem
ium
on
FPO
Issu
e -
2
,659
,732
,979
-
-
-
-
-
-
-
2
,659
,732
,979
-
2
,659
,732
,979
FPO
Issu
e Ex
pens
es (n
et o
ff ta
xes)
-
(23,
224,
340)
-
-
-
-
-
-
-
(23,
224,
340)
-
(23,
224,
340)
Shar
e ba
sed
paym
ents
-
-
-
-
-
-
-
-
-
-
-
-
Div
iden
ds to
equ
ity h
olde
rs -
-
-
-
-
-
-
-
-
-
-
-
Bon
us s
hare
s is
sued
-
-
-
-
-
-
-
-
-
-
-
-
Cash
div
iden
d pa
id -
-
-
-
-
-
-
-
-
-
-
-
Tota
l con
trib
utio
ns b
y an
d di
stri
butio
ns 1
,141
,516
,300
2
,636
,508
,639
-
-
-
-
-
-
-
3
,778
,024
,939
-
3
,778
,024
,939
Bal
ance
at 1
6 Ju
ly 2
018
7,6
03,2
90,6
34
4,0
61,3
66,5
86
1,6
71,8
51,4
54
56,
373,
878
404
,406
,612
(7
,057
,296
) -
2
,339
,181
,597
3
60,3
95,8
36
16,
489,
809,
301
-
16,
489,
809,
301
Bal
ance
at 1
7 Ju
ly 2
018
7,60
3,29
0,63
4 4
,061
,366
,586
1
,671
,851
,454
5
6,37
3,87
8 4
04,4
06,6
12
(7,0
57,2
96)
-
2,3
39,1
81,5
97
360
,395
,836
1
6,48
9,80
9,30
1 -
16
,489
,809
,301
Adj
ustm
ent/
Res
tate
men
t -
-
-
-
-
-
-
-
-
-
-
-
Prio
r Per
iod
Adj
ustm
ents
-
-
-
-
-
-
-
(1,2
16,7
22)
-
(1,2
16,7
22)
-
(1,2
16,7
22)
Adj
uste
d/R
esta
ted
bala
nce
at 1
7 Ju
ly 2
018
7,6
03,2
90,6
34
4,0
61,3
66,5
86
1,6
71,8
51,4
54
56,
373,
878
404
,406
,612
(7
,057
,296
) -
2
,337
,964
,875
3
60,3
95,8
36
16,
488,
592,
578
-
16,
488,
592,
578
Com
preh
ensi
ve in
com
e fo
r th
e ye
ar 2
018-
19 -
-
-
-
-
-
-
-
-
-
-
-
Profi
t fo
r th
e ye
ar -
-
-
-
-
-
-
2
,257
,276
,027
-
2
,257
,276
,027
-
2
,257
,276
,027
Othe
r co
mpr
ehen
sive
inco
me,
net
of t
ax -
-
-
-
-
-
-
-
-
-
-
-
Gai
n/(L
oss)
from
Inve
stm
ent i
n Eq
uity
Inst
rum
ent
mea
sure
d at
Fai
r Val
ue -
-
-
-
-
1
,513
,498
-
-
-
1
,513
,498
-
1
,513
,498
Gai
n/(L
oss)
on
reva
luat
ion
-
-
-
-
-
-
-
-
-
- -
-
Act
uria
l Gai
n/(L
oss)
on
defi n
ed b
enefi
t pl
ans
-
-
-
-
-
-
-
-
(888
,969
) (8
88,9
69)
-
(888
,969
)
Gai
n/(L
oss)
on
Cash
Flo
w H
edge
-
-
-
-
-
-
-
-
-
- -
-
Exch
ange
Gai
n/(L
osss
) (ar
isin
g fr
om tr
ansl
atin
g Fi
nan-
cial
Ass
ets
of F
orei
gn O
pera
tion)
-
-
-
-
-
-
-
-
-
-
-
-
Tota
l com
preh
ensi
ve in
com
e fo
r th
e ye
ar -
-
-
-
-
1
,513
,498
-
2
,257
,276
,027
(8
88,9
69)
2,2
57,9
00,5
56
-
2,2
57,9
00,5
56
Tran
sfer
to re
serv
e du
ring
the
year
-
-
451
,455
,205
2
2,00
3,09
3 4
14,3
26,4
52
-
-
(1,0
06,1
31,4
64)
118
,346
,713
-
-
-
Gen
eral
Res
erve
Fun
d -
-
4
51,4
55,2
05
-
-
-
-
(451
,455
,205
) -
-
-
-
Deb
entu
re R
edem
ptio
n R
eser
ve -
-
-
-
-
-
-
(9
0,45
2,51
1) 9
0,45
2,51
1 -
-
-
Inve
stm
ent A
djus
tmen
t Res
erve
-
-
-
-
-
-
-
-
-
-
-
-
Exch
ange
Flu
ctua
tion
Fund
-
-
-
22,
003,
093
-
-
-
(22,
003,
093)
-
-
-
-
Corp
orat
e So
cial
Res
pons
ibili
ty F
und
-
-
-
-
-
-
-
(16,
894,
202)
16,
894,
202
-
-
-
Cust
omer
Pro
tect
ion
Fund
-
-
-
-
-
-
-
-
-
-
-
-
Def
erre
d Ta
x R
eser
ve -
-
-
-
-
-
-
-
-
-
-
-
Shar
e ba
sed
paym
ents
-
-
-
-
-
-
-
-
-
-
-
-
Reg
ulat
ory
Res
erve
-
-
-
-
414
,326
,452
-
-
(4
14,3
26,4
52)
-
-
-
-
NM
B S
taff
Rel
ief F
und
-
-
-
-
-
-
-
(11,
000,
000)
11,
000,
000
-
-
-
Tran
sfer
from
rese
rve
duri
ng th
e ye
ar -
-
-
-
-
-
-
-
(1
,000
,000
) (1
,000
,000
) -
(1
,000
,000
)
Staff
Ski
ll D
evel
opm
ent F
und
-
-
-
-
-
-
-
-
-
-
-
-
NM
B S
taff
Rel
ief F
und
-
-
-
-
-
-
-
-
(1,0
00,0
00)
(1,0
00,0
00)
-
(1,0
00,0
00)
Tran
sact
ions
with
ow
ners
, dire
ctly
reco
gnis
ed in
eq
uity
-
-
-
-
-
-
-
-
-
-
-
-
Shar
e Is
sued
-
-
-
-
-
-
-
-
-
-
-
-
Prem
ium
Rec
eive
d fr
om F
MO
-
471
,569
,200
-
-
-
-
-
-
-
4
71,5
69,2
00
-
471
,569
,200
Shar
e Is
sue
Expe
nses
(net
off
taxe
s) -
(5
,265
,251
) -
-
-
-
-
-
-
(5
,265
,251
) -
(5
,265
,251
)
Shar
e ba
sed
paym
ents
-
-
-
-
-
-
-
-
-
-
-
Div
iden
ds to
equ
ity h
olde
rs -
-
-
-
-
-
-
-
-
-
-
-
Bon
us s
hare
s is
sued
2,0
14,8
72,0
18
(2,0
14,8
72,0
18)
-
-
-
-
-
-
-
-
-
-
Cash
div
iden
d pa
id -
-
-
-
-
-
-
(1
,808
,782
,825
) -
(1
,808
,782
,825
) -
(1
,808
,782
,825
)
Tota
l con
trib
utio
ns b
y an
d di
stri
butio
ns 2
,014
,872
,018
(1
,548
,568
,069
) -
-
-
-
-
(1
,808
,782
,825
) -
(1
,342
,478
,876
) -
(1
,342
,478
,876
)
Bal
ance
at 1
6 Ju
ly 2
019
9,6
18,1
62,6
52
2,5
12,7
98,5
17
2,1
23,3
06,6
59
78,
376,
972
818
,733
,064
(5
,543
,798
) -
1
,780
,326
,613
4
76,8
53,5
81
17,
403,
014,
259
-
17,
403,
014,
259
www.nmbbanknepal.com44
Cons
olid
ated
Sta
tem
ent o
f cas
h fl o
ws
For t
he y
ear e
nded
31
Ash
ad, 2
076
(16
July
201
9)
(Am
ount
in N
PR)
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
20
76Ye
ar e
nded
32
Ash
ad
2075
Year
end
ed 3
1 A
shad
20
76Ye
ar e
nded
32
Ash
ad
2075
CASH
FLO
WS
FROM
OPE
RAT
ING
ACT
IVIT
IES
Inte
rest
rece
ived
10,
546,
876,
485
8,7
94,9
88,5
34
10,
029,
237,
559
8,3
64,8
73,0
36
Fees
and
oth
er in
com
e re
ceiv
ed 1
,132
,864
,080
9
29,7
87,3
87
970
,870
,892
7
90,3
04,1
14
Div
iden
d re
ceiv
ed -
-
-
-
Rec
eipt
s fr
om o
ther
ope
ratin
g ac
tiviti
es 3
85,7
14,3
92
358
,041
,840
3
84,7
75,8
61
357
,555
,417
Inte
rest
pai
d (6
,823
,042
,020
) (6
,039
,527
,238
) (6
,561
,973
,326
) (5
,828
,082
,883
)
Com
mis
sion
and
fees
pai
d (9
3,95
5,27
0) (6
9,92
6,83
8) (9
3,95
5,27
0) (6
2,70
8,02
7)
Cash
pay
men
t to
empl
oyee
s (1
,456
,045
,782
) (1
,147
,047
,730
) (1
,295
,324
,891
) (1
,013
,279
,499
)
Othe
r ex
pens
e pa
id (7
67,5
92,5
73)
(669
,041
,524
) (7
00,3
90,0
33)
(613
,344
,690
)
Oper
atin
g ca
sh fl
ows b
efor
e ch
ange
s in
oper
atin
g as
sets
and
liabi
litie
s 2
,924
,819
,312
2
,157
,274
,431
2
,733
,240
,793
1
,995
,317
,467
(Incr
ease
)/D
ecre
ase
in o
pera
ting
asse
tsD
ue fr
om N
epal
Ras
tra
Ban
k (3
,970
,076
,184
) 2
,387
,693
,785
(3
,978
,276
,184
) 2
,402
,193
,785
Plac
emen
t with
ban
k an
d fi n
anci
al in
stitu
tions
(2,2
65,2
15,1
35)
338
,994
,868
(2
,265
,215
,135
) 4
06,8
87,9
94
Othe
r tra
ding
ass
ets
(18,
670,
000)
(23,
440,
000)
(18,
670,
000)
(23,
440,
000)
Loan
and
adv
ance
s to
ban
k an
d fi n
ancia
l inst
itutio
ns (8
17,7
37,7
63)
(634
,657
,961
) (8
17,7
37,7
63)
(634
,657
,961
)
Loan
s an
d ad
vanc
es to
cus
tom
ers
(16,
428,
761,
736)
(13,
044,
839,
083)
(15,
509,
016,
343)
(12,
646,
608,
128)
Othe
r ass
ets
3,5
53,0
83,7
97
(2,8
61,3
59,6
68)
3,5
73,4
49,1
98
(2,8
68,3
10,5
88)
Tota
l (1
9,94
7,37
7,02
1) (1
3,83
7,60
8,06
0) (1
9,01
5,46
6,22
8) (1
3,36
3,93
4,89
9)In
crea
se/(
Dec
reas
e) in
ope
ratin
g lia
bilit
ies
Due
to b
ank
and
fi nan
cial
inst
itutio
ns (4
11,9
03,9
55)
129
,872
,956
(4
11,9
03,9
55)
129
,872
,956
Due
to N
epal
Ras
tra
Ban
k 2
,531
,451
,431
(4
50,4
87,1
59)
2,5
43,4
51,4
31
(450
,487
,159
)
Dep
osit
from
cus
tom
ers
14,
395,
099,
867
11,
945,
557,
284
13,
921,
434,
748
11,
653,
200,
615
Bor
row
ings
3,7
58,1
94,0
83
141
,151
,539
3
,468
,060
,000
(5
5,34
7,30
8)
Othe
r lia
bilit
ies
382
,545
,373
2
,033
,609
,256
3
87,4
20,1
14
2,2
23,1
42,4
70
Net
cas
h fl o
w fr
om o
pera
ting
activ
ities
bef
ore
tax
paid
20,
655,
386,
800
13,
799,
703,
876
19,
908,
462,
338
13,
500,
381,
574
Inco
me
taxe
s pa
id (1
,172
,181
,378
) (6
64,9
74,6
13)
(1,1
25,4
13,4
72)
(633
,132
,526
)
Net
cas
h fl o
w fr
om o
pera
ting
activ
ities
2,4
60,6
47,7
13
1,4
54,3
95,6
34
2,5
00,8
23,4
32
1,4
98,6
31,6
16
CASH
FLO
WS
FROM
INVE
STIN
G A
CTIV
ITIE
SPu
rcha
se o
f inv
estm
ent s
ecur
ities
(4,8
34,2
68,8
27)
(10,
521,
875,
476)
(4,8
34,2
68,8
27)
(10,
401,
270,
740)
Rec
eipt
s fr
om s
ale
of in
vest
men
t sec
uriti
es 4
,292
,200
,326
8
,381
,577
,243
4
,351
,536
,812
8
,377
,760
,162
Purc
hase
of p
rope
rty
and
equi
pmen
t (2
10,5
92,0
07)
(284
,530
,625
) (1
99,1
77,7
63)
(268
,775
,840
)
Rec
eipt
from
the
sale
of p
rope
rty
and
equi
pmen
t 9
2,58
4,08
5 1
1,58
3,87
9 9
2,02
2,56
8 1
0,58
3,52
5
Purc
hase
of i
ntan
gibl
e as
sets
(107
,102
,744
) (1
2,88
8,79
8) (1
06,4
55,2
82)
(12,
210,
798)
Rec
eipt
from
the
sale
of i
ntan
gibl
e as
sets
-
-
-
-
Purc
hase
of i
nves
tmen
t pro
pert
ies
(53,
480,
759)
-
(53,
480,
759)
-
Rec
eipt
from
the
sale
of i
nves
tmen
t pro
pert
ies
10,
844,
000
73,
597,
200
10,
844,
000
73,
597,
200
Inve
stm
ent i
n su
bsid
iarie
s, a
ssoc
iate
s &
join
t ven
ture
s -
(1
00,0
00,0
00)
-
(100
,000
,000
)
Inte
rest
rece
ived
660
,235
,537
3
84,3
17,7
55
660
,235
,537
3
84,3
17,7
55
Div
iden
d re
ceiv
ed 7
1,02
0,75
8 1
34,1
00,1
60
71,
020,
758
132
,758
,055
Net
cas
h us
ed in
inve
stin
g ac
tiviti
es (7
8,55
9,63
2) (1
,934
,118
,662
) (7
,722
,956
) (1
,803
,240
,682
)
CASH
FLO
WS
FROM
FIN
AN
CIN
G A
CTIV
ITIE
SR
ecei
pt fr
om is
sue
of d
ebt s
ecur
ities
1,6
84,5
05,0
00
-
1,6
84,5
05,0
00
-
Rep
aym
ent o
f deb
t sec
uriti
es -
-
-
-
Rec
eipt
from
issu
e of
sub
ordi
nate
d lia
bilit
ies
-
-
-
-
Rep
aym
ent o
f sub
ordi
nate
d lia
bilit
ies
-
-
-
-
Rec
eipt
from
issu
e of
sha
res
466
,303
,949
1
00,0
00,0
00
466
,303
,949
-
Div
iden
ds p
aid
(1,8
57,0
83,5
70)
(128
,628
,002
) (1
,815
,971
,398
) (2
1,88
1,95
0)
Inte
rest
pai
d -
-
-
-
Othe
r rec
eipt
/pay
men
t 1
3,30
1,50
0 -
-
-
Net
cas
h fr
om fi
nanc
ing
activ
ities
307
,026
,879
(2
8,62
8,00
2) 3
34,8
37,5
50
(21,
881,
950)
Net
incr
ease
(dec
reas
e) in
cas
h an
d ca
sh e
quiv
alen
ts 2
,689
,114
,960
(5
08,3
51,0
31)
2,8
27,9
38,0
26
(326
,491
,015
)Ca
sh a
nd c
ash
equi
vale
nts
at th
e be
ginn
ing
of th
e ye
ar 6
,024
,619
,332
6
,458
,150
,739
5
,180
,404
,105
5
,499
,968
,622
Cash
and
cas
h eq
uiva
lent
s ac
quire
d fr
om th
e m
erge
r -
-
-
-
Eff e
ct o
f exc
hang
e ra
te fl
uctu
atio
ns o
n ca
sh a
nd c
ash
equi
vale
nts
held
88,
012,
372
6,9
26,4
98
88,
012,
372
6,9
26,4
98
Cash
and
cas
h eq
uiva
lent
s at
the
end
of th
e ye
ar 8
,801
,746
,664
5
,956
,726
,206
8
,096
,354
,503
5
,180
,404
,105
NMB Annual Report-2018/19 45
Mri
dul P
araj
uli
Hea
d-Fi
nanc
e &
Pla
nnin
g
Suni
l KC
CEO
Paw
an K
umar
Gol
yan
Chai
rman
N
ico
Pijl
Dire
ctor
Suni
r K
umar
Dhu
ngel
Man
agin
g Pa
rtne
rSA
R A
ssoc
iate
sCh
arte
red
Acc
ount
ants
Raj
endr
a K
afl e
D
irect
or
Har
isch
andr
a Su
bedi
Dire
ctor
Prad
eep
Raj
Pan
dey
Dire
ctor
Nav
in M
anan
dhar
Chie
f Fin
ance
Offi
cer
Dat
e: S
unda
y, N
ovem
ber 1
0, 2
019
Plac
e: N
MB
Bha
wan
, Bab
arm
ahal
, Kat
hman
du
As
per o
ur a
ttach
ed re
port
of e
ven
date
(Am
ount
in N
PR)
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
20
76Ye
ar e
nded
32
Ash
ad
2075
Year
end
ed 3
1 A
shad
20
76Ye
ar e
nded
32
Ash
ad
2075
CASH
FLO
WS
FROM
OPE
RAT
ING
ACT
IVIT
IES
Inte
rest
rece
ived
10,
546,
876,
485
8,7
94,9
88,5
34
10,
029,
237,
559
8,3
64,8
73,0
36
Fees
and
oth
er in
com
e re
ceiv
ed 1
,132
,864
,080
9
29,7
87,3
87
970
,870
,892
7
90,3
04,1
14
Div
iden
d re
ceiv
ed -
-
-
-
Rec
eipt
s fr
om o
ther
ope
ratin
g ac
tiviti
es 3
85,7
14,3
92
358
,041
,840
3
84,7
75,8
61
357
,555
,417
Inte
rest
pai
d (6
,823
,042
,020
) (6
,039
,527
,238
) (6
,561
,973
,326
) (5
,828
,082
,883
)
Com
mis
sion
and
fees
pai
d (9
3,95
5,27
0) (6
9,92
6,83
8) (9
3,95
5,27
0) (6
2,70
8,02
7)
Cash
pay
men
t to
empl
oyee
s (1
,456
,045
,782
) (1
,147
,047
,730
) (1
,295
,324
,891
) (1
,013
,279
,499
)
Othe
r ex
pens
e pa
id (7
67,5
92,5
73)
(669
,041
,524
) (7
00,3
90,0
33)
(613
,344
,690
)
Oper
atin
g ca
sh fl
ows b
efor
e ch
ange
s in
oper
atin
g as
sets
and
liabi
litie
s 2
,924
,819
,312
2
,157
,274
,431
2
,733
,240
,793
1
,995
,317
,467
(Incr
ease
)/D
ecre
ase
in o
pera
ting
asse
tsD
ue fr
om N
epal
Ras
tra
Ban
k (3
,970
,076
,184
) 2
,387
,693
,785
(3
,978
,276
,184
) 2
,402
,193
,785
Plac
emen
t with
ban
k an
d fi n
anci
al in
stitu
tions
(2,2
65,2
15,1
35)
338
,994
,868
(2
,265
,215
,135
) 4
06,8
87,9
94
Othe
r tra
ding
ass
ets
(18,
670,
000)
(23,
440,
000)
(18,
670,
000)
(23,
440,
000)
Loan
and
adv
ance
s to
ban
k an
d fi n
ancia
l inst
itutio
ns (8
17,7
37,7
63)
(634
,657
,961
) (8
17,7
37,7
63)
(634
,657
,961
)
Loan
s an
d ad
vanc
es to
cus
tom
ers
(16,
428,
761,
736)
(13,
044,
839,
083)
(15,
509,
016,
343)
(12,
646,
608,
128)
Othe
r ass
ets
3,5
53,0
83,7
97
(2,8
61,3
59,6
68)
3,5
73,4
49,1
98
(2,8
68,3
10,5
88)
Tota
l (1
9,94
7,37
7,02
1) (1
3,83
7,60
8,06
0) (1
9,01
5,46
6,22
8) (1
3,36
3,93
4,89
9)In
crea
se/(
Dec
reas
e) in
ope
ratin
g lia
bilit
ies
Due
to b
ank
and
fi nan
cial
inst
itutio
ns (4
11,9
03,9
55)
129
,872
,956
(4
11,9
03,9
55)
129
,872
,956
Due
to N
epal
Ras
tra
Ban
k 2
,531
,451
,431
(4
50,4
87,1
59)
2,5
43,4
51,4
31
(450
,487
,159
)
Dep
osit
from
cus
tom
ers
14,
395,
099,
867
11,
945,
557,
284
13,
921,
434,
748
11,
653,
200,
615
Bor
row
ings
3,7
58,1
94,0
83
141
,151
,539
3
,468
,060
,000
(5
5,34
7,30
8)
Othe
r lia
bilit
ies
382
,545
,373
2
,033
,609
,256
3
87,4
20,1
14
2,2
23,1
42,4
70
Net
cas
h fl o
w fr
om o
pera
ting
activ
ities
bef
ore
tax
paid
20,
655,
386,
800
13,
799,
703,
876
19,
908,
462,
338
13,
500,
381,
574
Inco
me
taxe
s pa
id (1
,172
,181
,378
) (6
64,9
74,6
13)
(1,1
25,4
13,4
72)
(633
,132
,526
)
Net
cas
h fl o
w fr
om o
pera
ting
activ
ities
2,4
60,6
47,7
13
1,4
54,3
95,6
34
2,5
00,8
23,4
32
1,4
98,6
31,6
16
CASH
FLO
WS
FROM
INVE
STIN
G A
CTIV
ITIE
SPu
rcha
se o
f inv
estm
ent s
ecur
ities
(4,8
34,2
68,8
27)
(10,
521,
875,
476)
(4,8
34,2
68,8
27)
(10,
401,
270,
740)
Rec
eipt
s fr
om s
ale
of in
vest
men
t sec
uriti
es 4
,292
,200
,326
8
,381
,577
,243
4
,351
,536
,812
8
,377
,760
,162
Purc
hase
of p
rope
rty
and
equi
pmen
t (2
10,5
92,0
07)
(284
,530
,625
) (1
99,1
77,7
63)
(268
,775
,840
)
Rec
eipt
from
the
sale
of p
rope
rty
and
equi
pmen
t 9
2,58
4,08
5 1
1,58
3,87
9 9
2,02
2,56
8 1
0,58
3,52
5
Purc
hase
of i
ntan
gibl
e as
sets
(107
,102
,744
) (1
2,88
8,79
8) (1
06,4
55,2
82)
(12,
210,
798)
Rec
eipt
from
the
sale
of i
ntan
gibl
e as
sets
-
-
-
-
Purc
hase
of i
nves
tmen
t pro
pert
ies
(53,
480,
759)
-
(53,
480,
759)
-
Rec
eipt
from
the
sale
of i
nves
tmen
t pro
pert
ies
10,
844,
000
73,
597,
200
10,
844,
000
73,
597,
200
Inve
stm
ent i
n su
bsid
iarie
s, a
ssoc
iate
s &
join
t ven
ture
s -
(1
00,0
00,0
00)
-
(100
,000
,000
)
Inte
rest
rece
ived
660
,235
,537
3
84,3
17,7
55
660
,235
,537
3
84,3
17,7
55
Div
iden
d re
ceiv
ed 7
1,02
0,75
8 1
34,1
00,1
60
71,
020,
758
132
,758
,055
Net
cas
h us
ed in
inve
stin
g ac
tiviti
es (7
8,55
9,63
2) (1
,934
,118
,662
) (7
,722
,956
) (1
,803
,240
,682
)
CASH
FLO
WS
FROM
FIN
AN
CIN
G A
CTIV
ITIE
SR
ecei
pt fr
om is
sue
of d
ebt s
ecur
ities
1,6
84,5
05,0
00
-
1,6
84,5
05,0
00
-
Rep
aym
ent o
f deb
t sec
uriti
es -
-
-
-
Rec
eipt
from
issu
e of
sub
ordi
nate
d lia
bilit
ies
-
-
-
-
Rep
aym
ent o
f sub
ordi
nate
d lia
bilit
ies
-
-
-
-
Rec
eipt
from
issu
e of
sha
res
466
,303
,949
1
00,0
00,0
00
466
,303
,949
-
Div
iden
ds p
aid
(1,8
57,0
83,5
70)
(128
,628
,002
) (1
,815
,971
,398
) (2
1,88
1,95
0)
Inte
rest
pai
d -
-
-
-
Othe
r rec
eipt
/pay
men
t 1
3,30
1,50
0 -
-
-
Net
cas
h fr
om fi
nanc
ing
activ
ities
307
,026
,879
(2
8,62
8,00
2) 3
34,8
37,5
50
(21,
881,
950)
Net
incr
ease
(dec
reas
e) in
cas
h an
d ca
sh e
quiv
alen
ts 2
,689
,114
,960
(5
08,3
51,0
31)
2,8
27,9
38,0
26
(326
,491
,015
)Ca
sh a
nd c
ash
equi
vale
nts
at th
e be
ginn
ing
of th
e ye
ar 6
,024
,619
,332
6
,458
,150
,739
5
,180
,404
,105
5
,499
,968
,622
Cash
and
cas
h eq
uiva
lent
s ac
quire
d fr
om th
e m
erge
r -
-
-
-
Eff e
ct o
f exc
hang
e ra
te fl
uctu
atio
ns o
n ca
sh a
nd c
ash
equi
vale
nts
held
88,
012,
372
6,9
26,4
98
88,
012,
372
6,9
26,4
98
Cash
and
cas
h eq
uiva
lent
s at
the
end
of th
e ye
ar 8
,801
,746
,664
5
,956
,726
,206
8
,096
,354
,503
5
,180
,404
,105
www.nmbbanknepal.com46
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Cash
and
cas
h eq
uiva
lent
4.1
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Cash
in h
and
2,4
52,2
63,1
34
2,4
09,7
35,3
09
2,4
52,1
31,8
79
2,4
09,7
17,7
58
Bal
ance
s w
ith B
/FIs
1,6
14,4
83,0
63
1,5
95,7
55,2
50
909
,222
,157
8
19,4
50,7
00
Mon
ey a
t cal
l and
sho
rt n
otic
e 5
22,9
36,2
77
236
,768
,728
5
22,9
36,2
77
236
,768
,728
Othe
r 4
,212
,064
,190
1
,714
,466
,919
4
,212
,064
,190
1
,714
,466
,919
Tota
l 8
,801
,746
,664
5
,956
,726
,206
8
,096
,354
,503
5
,180
,404
,105
Due
from
Nep
al R
astr
a B
ank
4.2
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Stat
utor
y ba
lanc
es w
ith N
RB
8,2
68,5
66,4
42
5,1
60,5
83,5
04
8,2
52,5
36,4
42
5,1
36,3
53,5
04
Secu
ritie
s pu
rcha
sed
unde
r res
ale
agre
emen
t -
-
-
-
Othe
r dep
osit
and
rece
ivab
le fr
om N
RB
2,5
76,6
45,1
41
1,7
04,1
57,4
33
2,5
76,6
45,1
41
2,1
23,8
41,0
56
Tota
l 1
0,84
5,21
1,58
4 6
,864
,740
,937
1
0,82
9,18
1,58
4 7
,260
,194
,560
The
fair
valu
e of
cas
h is
the
carr
ying
am
ount
. Cas
h an
d ca
sh e
quiv
alen
t com
pris
e th
e to
tal a
mou
nt o
f cas
h-in
-han
d, b
alan
ces
with
oth
er b
ank
and
fi nan
cial
inst
itutio
ns, m
oney
at c
all a
nd
shor
t not
ice,
trea
sury
bill
s an
d pl
acem
ents
hav
ing
orig
inal
mat
urity
of t
hree
mon
ths
or le
ss th
an th
ree
mon
ths.
Cash
at v
ault
is a
dequ
atel
y in
sure
d fo
r phy
sica
l and
fi na
ncia
l ris
ks. T
he a
mou
nt o
f cas
h at
vau
lt is
mai
ntai
ned
on th
e ba
sis
of th
e re
gula
tory
, liq
uidi
ty a
nd b
usin
ess
requ
irem
ents
. Cas
h he
ld
in F
CY is
sub
ject
to r
isk
of c
hang
es in
the
fore
ign
exch
ange
rat
es. T
hese
are
clo
sely
mon
itore
d, a
nd r
isks
, if i
dent
ifi ed
, are
pro
mpt
ly m
anag
ed. T
he in
com
e on
thes
e as
sets
is c
redi
ted
to
stat
emen
t of p
rofi t
or l
oss
unde
r int
eres
t inc
ome.
The
fair
valu
e of
bal
ance
with
the
cent
ral b
ank
and
othe
r dep
osits
at N
RB
is th
e ca
rryi
ng a
mou
nt.
Bal
ance
with
the
cent
ral b
ank
is p
rinci
pally
mai
ntai
ned
as a
par
t of t
he re
gula
tory
cas
h re
serv
e ra
tio re
quire
d by
the
cent
ral b
ank.
The
re a
re re
gula
tory
and
liqu
idity
rest
rictio
ns p
lace
d on
th
e le
vel o
f bal
ance
with
the
cent
ral b
ank.
The
oth
er re
ceiv
able
from
NR
B is
rece
ivab
le o
f Li.K
a A
ccou
nts
(con
tra)
of G
over
nmen
t bod
ies.
Due
from
Nep
al R
astr
a B
ank
is s
ubse
quen
tly a
lso
mea
sure
d at
am
ortis
ed c
ost.
NMB Annual Report-2018/19 47
Der
ivat
ives
are
fi na
ncia
l ins
trum
ents
that
der
ive
thei
r val
ue in
resp
onse
to c
hang
es in
inte
rest
rate
s, fi
nanc
ial i
nstr
umen
t pric
es e
tc.A
ll de
rivat
ives
are
initi
ally
reco
gnis
ed a
nd s
ubse
quen
tly
mea
sure
d at
fair
valu
e, w
ith a
ll tr
adin
g ga
ins
or lo
sses
rec
ogni
sed
in th
e St
atem
ent o
f Pro
fi t o
r Lo
ss u
nder
Net
trad
ing
Inco
me.
Fai
r va
lue
is d
eter
min
ed u
sing
the
forw
ard
mar
ket r
ates
ru
ling
on th
e re
port
ing
date
.
Plac
emen
ts w
ith B
ank
and
Fina
ncia
l Ins
titui
tions
4.3
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Plac
emen
t with
dom
estic
B/F
Is -
-
Plac
emen
t with
fore
ign
B/F
Is
2,1
72,9
67,2
39
276
,407
,171
2
,172
,967
,239
2
76,4
07,1
71
Less
: Allo
wan
ces
for i
mpa
irmen
t -
-
-
-
Tota
l 2
,172
,967
,239
2
76,4
07,1
71
2,1
72,9
67,2
39
276
,407
,171
Der
ivat
ive
fi nan
cial
inst
rum
ents
4.4
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Hel
d fo
r tr
adin
g
Inte
rest
rate
sw
ap -
-
-
-
Curr
ency
sw
ap 1
,899
,469
,355
1
,392
,798
,943
1
,899
,469
,355
1
,392
,798
,943
Forw
ard
exch
ange
con
trac
t 6
,139
,923
,883
5
,331
,619
,218
6
,139
,923
,883
5
,331
,619
,218
Othe
rs 5
56,0
89,0
44
782
,333
,323
5
56,0
89,0
44
782
,333
,323
Hel
d fo
r ri
sk m
anag
emen
t
Inte
rest
rate
sw
ap -
-
-
-
Curr
ency
sw
ap -
-
-
-
Forw
ard
exch
ange
con
trac
t -
-
-
-
Othe
r -
-
-
-
Tota
l 8
,595
,482
,282
7
,506
,751
,485
8
,595
,482
,282
7
,506
,751
,485
Thes
e as
sets
are
mea
sure
d at
am
ortis
ed c
osts
. Ris
ks a
ssoc
iate
d w
ith th
ese
asse
ts a
re re
gula
rly a
sses
sed.
The
se a
re in
tere
st b
earin
g ad
vanc
es a
nd th
e in
com
e on
thes
e as
sets
is c
redi
ted
to s
tate
men
t of p
rofi t
or l
oss
unde
r int
eres
t inc
ome.
www.nmbbanknepal.com48
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Othe
r tr
adin
g as
sets
4.5
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Teas
ury
bills
-
-
-
-
Gov
ernm
ent b
onds
340
,390
,000
3
21,7
20,0
00
340
,390
,000
3
21,7
20,0
00
NR
B B
onds
-
-
-
-
Dom
estic
Cor
pora
te b
onds
-
-
-
-
Equi
ties
-
-
-
-
Othe
r -
-
-
-
Tota
l 3
40,3
90,0
00
321
,720
,000
3
40,3
90,0
00
321
,720
,000
Pled
ged
-
-
-
-
Non
-ple
dged
340
,390
,000
3
21,7
20,0
00
340
,390
,000
3
21,7
20,0
00
Loan
and
adv
ance
s to
B/F
Is
4.6
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Loan
s to
mic
rofi n
ance
inst
itutio
ns 3
,352
,109
,972
2
,522
,765
,611
3
,352
,109
,972
2
,522
,765
,611
Othe
r -
-
-
-
Less
: Allo
wan
ces
for i
mpa
irmen
t 3
4,14
7,98
5 2
5,19
7,84
2 3
4,14
7,98
5 2
5,19
7,84
2
Tota
l 3
,317
,961
,987
2
,497
,567
,769
3
,317
,961
,987
2
,497
,567
,769
Citiz
ens
Savi
ng C
ertifi
cat
es a
re p
urch
ased
by
the
bank
und
er M
arke
t Mak
er P
roce
dure
, 207
0 is
sued
by
the
Nep
al R
astr
a B
ank.
The
se in
stru
men
ts a
re p
urch
ased
and
sol
d by
the
bank
und
er
mar
ket p
roce
dure
with
out a
ny in
tent
ion
to h
old
it til
l mat
urity
. The
fair
valu
e of
thes
e CS
Cs g
ener
ally
app
roxi
mat
es th
e ca
rryi
ng a
mou
nt.
Loan
and
adv
ance
s gi
ven
to m
icro
fi nan
ce fi
nanc
ial i
nstit
utio
ns a
s de
priv
ed s
ecto
r len
ding
is p
rese
nted
und
er th
is h
ead
ast e
r pr
ovid
ing
requ
ired
impa
irmen
t allo
wan
ces.
The
se a
sset
s ar
e su
bseq
uent
ly m
easu
red
at a
mor
tised
cos
ts. R
isks
ass
ocia
ted
with
thes
e as
sets
are
reg
ular
ly a
sses
sed.
The
se a
re in
tere
st
bear
ing
adva
nces
and
the
inco
me
on th
ese
asse
ts is
cre
dite
d to
sta
tem
ent o
f pro
fi t o
r los
s un
der i
nter
est i
ncom
e.
NMB Annual Report-2018/19 49
4.6.
1: A
llow
ance
s fo
r im
pair
men
t
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Bal
ance
at S
hraw
an 1
25,
197,
842
18,
851,
263
25,
197,
842
18,
851,
263
Impa
irmen
t los
s fo
r the
yea
r: -
-
-
-
Char
ge fo
r the
yea
r 8
,950
,143
6
,346
,580
8
,950
,143
6
,346
,580
Rec
over
ies/
reve
rsal
-
-
-
-
Am
ount
writ
ten
off
-
-
-
-
Bal
ance
at A
shad
end
34,
147,
985
25,
197,
842
34,
147,
985
25,
197,
842
Loan
s an
d ad
vanc
es to
cus
tom
ers
4.7
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Loan
and
adv
ance
s m
easu
red
at a
mor
tized
cos
t 9
2,44
3,68
0,80
1 7
5,67
8,27
1,32
1 8
9,84
9,80
8,82
5 7
3,91
9,22
6,70
6
Less
: Im
pairm
ent a
llow
ance
s -
-
Colle
ctiv
e im
pairm
ent
993
,674
,668
8
43,4
04,1
46
977
,833
,534
8
21,7
33,2
16
Indi
vidu
al im
pairm
ent
438
,116
,822
4
21,2
82,4
05
386
,943
,898
3
85,7
21,7
24
Net
am
ount
91,
011,
889,
312
74,
413,
584,
770
88,
485,
031,
394
72,
711,
771,
766
Loan
and
adv
ance
s m
easu
red
at F
VTPL
-
-
-
-
Tota
l 9
1,01
1,88
9,31
2 7
4,41
3,58
4,77
0 8
8,48
5,03
1,39
4 7
2,71
1,77
1,76
6
The
sum
of t
he o
utst
andi
ng a
mou
nt o
f all
loan
s an
d ad
vanc
es e
xten
ded
to th
e cu
stom
ers
othe
r tha
n B
FIs,
bill
s pu
rcha
sed
and
disc
ount
ed a
nd a
mor
tized
cos
t of s
taff
loan
s; le
ss th
e am
ount
of
impa
irmen
t allo
wan
ces
is p
rese
nted
und
er th
is h
ead.
www.nmbbanknepal.com50
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
4.7.
1: A
naly
sis
of lo
an a
nd a
dvan
ces
- B
y Pr
oduc
t
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Prod
uct
Term
loan
s 2
1,81
9,27
8,82
7 1
4,26
8,62
5,65
4 2
1,81
9,27
8,82
7 1
4,26
8,62
5,65
4
Over
drast
5
,929
,688
,112
3
,099
,974
,826
5
,929
,688
,112
3
,099
,974
,826
Trus
t rec
eipt
/Im
port
loan
s 4
,146
,313
,974
3
,939
,614
,346
4
,146
,313
,974
3
,939
,614
,346
Dem
and
and
othe
r wor
king
cap
ital l
oans
18,
332,
571,
900
16,
124,
798,
315
18,
332,
571,
900
16,
124,
798,
315
Pers
onal
resi
dent
ial l
oans
9,1
91,4
98,3
67
8,4
11,8
62,8
46
9,1
91,4
98,3
67
8,4
11,8
62,8
46
Rea
l est
ate
loan
s 3
,270
,011
,964
3
,717
,309
,146
3
,270
,011
,964
3
,717
,309
,146
Mar
gin
lend
ing
loan
s 2
94,6
05,4
97
417
,471
,461
2
94,6
05,4
97
417
,471
,461
Hire
pur
chas
e lo
ans
4,1
79,1
17,8
90
4,6
07,0
41,0
27
4,1
79,1
17,8
90
4,6
07,0
41,0
27
Dep
rived
sec
tor l
oans
3,7
79,6
31,0
47
2,9
54,9
36,1
05
1,2
35,3
53,6
29
1,2
30,2
13,6
82
Bill
s pu
rcha
sed
-
8,0
00,0
00
-
8,0
00,0
00
Staff
loa
ns 6
98,4
51,3
05
611
,927
,024
6
91,4
36,2
78
605
,720
,012
Othe
r 2
0,15
0,99
2,84
0 1
7,30
1,22
1,61
8 2
0,15
0,99
2,84
0 1
7,30
1,22
1,61
8
Sub
tota
l 9
1,79
2,16
1,72
3 7
5,46
2,78
2,36
9 8
9,24
0,86
9,27
7 7
3,73
1,85
2,93
4
Inte
rest
rece
ivab
le 6
51,5
19,0
78
215
,488
,951
6
08,9
39,5
48
187
,373
,772
Gra
nd to
tal
92,
443,
680,
801
75,
678,
271,
321
89,
849,
808,
825
73,
919,
226,
706
NMB Annual Report-2018/19 51
4.7.
2: A
naly
sis
of lo
an a
nd a
dvan
ces
- B
y Cu
rren
cy
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Nep
ales
e ru
pee
88,
946,
025,
473
74,
014,
883,
703
86,
352,
153,
497
72,
255,
839,
089
Indi
an ru
pee
-
-
-
-
Uni
ted
Stat
e do
llar
3,4
77,7
59,3
06
1,6
43,8
53,3
38
3,4
77,7
59,3
06
1,6
43,8
53,3
38
Gre
at B
ritai
n po
und
-
-
-
-
Euro
19,
896,
022
19,
534,
280
19,
896,
022
19,
534,
280
Jape
nese
yen
-
-
-
-
Chin
ese
yuan
-
-
-
-
Othe
r -
-
-
-
Tota
l 9
2,44
3,68
0,80
1 7
5,67
8,27
1,32
1 8
9,84
9,80
8,82
5 7
3,91
9,22
6,70
6
4.7.
3: A
naly
sis
of lo
an a
nd a
dvan
ces
- B
y Co
llate
ral
Loan
s an
d ad
vanc
es to
cus
tom
ers
are
back
ed b
y co
llate
ral s
ecur
ities
to m
itiga
te th
e de
faul
t ris
k. T
he ty
pe o
f the
col
late
rals
cor
resp
ondi
ng to
the
loan
s an
d ad
vanc
es to
cus
tom
ers
are
give
n in
the
tabl
e be
low
.
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Secu
red
Mov
able
/im
mov
able
ass
ets
89,
823,
850,
881
73,
662,
058,
233
89,
352,
247,
540
73,
329,
496,
135
Gol
d an
d si
lver
-
-
-
-
Gua
rant
ee o
f dom
estic
B/F
Is 1
8,89
8,35
8 7
,538
,789
1
8,89
8,35
8 7
,538
,789
Gov
ernm
ent g
uara
ntee
89,
125,
832
83,
000,
167
89,
125,
832
83,
000,
167
Gua
rant
ee o
f int
erna
tiona
l rat
ed b
ank
-
-
-
-
Colla
tera
l of e
xpor
t doc
umen
t -
-
-
-
Colla
tera
l of fi
xed
dep
osit
rece
ipt
385
,025
,416
4
98,2
71,5
13
385
,025
,416
4
98,2
71,5
13
Colla
tera
l of G
over
nem
ent s
ecur
ities
4,5
11,6
79
920
,102
4
,511
,679
9
20,1
02
Coun
ter g
uara
ntee
-
-
-
-
Pers
onal
gua
rant
ee 6
74,4
66
484
,068
-
-
Othe
r col
late
ral
2,1
21,5
94,1
70
1,4
25,9
98,4
48
-
-
Subt
otal
92,
443,
680,
801
75,
678,
271,
321
89,
849,
808,
825
73,
919,
226,
706
Uns
ecur
ed -
-
-
-
Gra
nt T
otal
92,
443,
680,
801
75,
678,
271,
321
89,
849,
808,
825
73,
919,
226,
706
www.nmbbanknepal.com52
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
4.7.
4: A
llow
ance
s fo
r im
pair
men
t
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Spec
ifi c
allo
wan
ces
for
impa
irm
ent
Bal
ance
at S
hraw
an 1
421
,282
,405
7
19,9
24,4
93
385
,721
,724
7
08,3
85,3
95
Impa
irmen
t los
s fo
r the
yea
r: -
-
Char
ge fo
r the
yea
r -
-
Rec
over
ies/
reve
rsal
dur
ing
the
year
16,
834,
418
(298
,642
,088
) 1
,222
,174
(3
22,6
63,6
71)
Writ
e-off
s -
-
Exch
ange
rate
var
ianc
e on
fore
ign
curr
ency
impa
irmen
t -
-
Othe
r mov
emen
t -
-
Bal
ance
at A
shad
end
438
,116
,822
4
21,2
82,4
05
386
,943
,898
3
85,7
21,7
24
Colle
ctiv
e al
low
ance
s fo
r im
pair
men
t -
-
Bal
ance
at S
hraw
an 1
821
,733
,216
7
24,8
59,8
89
821
,733
,216
7
24,8
59,8
89
Impa
irmen
t los
s fo
r the
yea
r: -
-
Char
ge/(
reve
rsal
) for
the
year
171
,941
,451
9
6,87
3,32
8 1
56,1
00,3
17
96,
873,
328
Exch
ange
rate
var
ianc
e on
fore
ign
curr
ency
impa
irmen
t -
-
Othe
r mov
emen
t -
-
Bal
ance
at A
shad
end
993
,674
,668
8
21,7
33,2
16
977
,833
,534
8
21,7
33,2
16
Tota
l allo
wan
ces
for
impa
irm
ent
1,4
31,7
91,4
90
1,2
43,0
15,6
21
1,3
64,7
77,4
31
1,2
07,4
54,9
40
Inve
stm
ent s
ecur
ities
4.8
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Inve
stm
ent s
ecur
ities
mea
sure
d at
am
ortiz
ed c
ost
9,8
20,3
18,9
39
9,0
24,0
56,8
84
9,6
90,9
88,5
76
8,8
94,9
67,8
98
Inve
stm
ent i
n eq
uity
mea
sure
d at
FVT
OCI
638
,362
,439
5
84,3
11,3
27
625
,362
,439
5
53,4
78,8
27
Tota
l 1
0,45
8,68
1,37
8 9
,608
,368
,211
1
0,31
6,35
1,01
6 9
,448
,446
,725
The
Inve
stm
ents
mad
e by
Ban
k in
fi na
ncia
l ins
trum
ents
has
bee
n pr
esen
ted
unde
r thi
s ac
coun
t hea
d in
thre
e ca
tego
ries
i.e. i
nves
tmen
t sec
uriti
es d
esig
nate
d at
fair
valu
e th
roug
h pr
ofi t
or
loss
, inv
estm
ent s
ecur
ities
mea
sure
d at
am
ortiz
ed c
ost a
nd in
vest
men
t in
equi
ty m
easu
red
at fa
ir va
lue
thro
ugh
othe
r com
preh
ensi
ve in
com
e.
NMB Annual Report-2018/19 53
4.8.
1: In
vest
men
t sec
uriti
es m
easu
red
at a
mor
tized
cos
t
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Deb
t sec
uriti
es 1
4,98
9,95
3 1
4,08
8,98
6 -
-
Gov
ernm
ent b
onds
8,2
52,0
44,2
02
5,4
79,2
69,0
98
8,2
52,0
44,2
02
5,4
79,2
69,0
98
Gov
ernm
ent t
reas
ury
bills
786
,811
,382
2
,538
,022
,061
7
86,8
11,3
82
2,5
38,0
22,0
61
Nep
al R
astr
a B
ank
bond
s -
-
-
-
Nep
al R
astr
a B
ank
depo
sits
inst
rum
ents
-
-
-
-
Othe
r Inv
estm
ents
766
,473
,402
9
92,6
76,7
39
652
,132
,992
8
77,6
76,7
39
Less
: spe
cifi c
allo
wan
ces
for i
mpa
irmen
t -
-
-
-
Tota
l 9
,820
,318
,939
9
,024
,056
,884
9
,690
,988
,576
8
,894
,967
,898
4.8.
2: In
vest
men
t in
equi
ty m
easu
red
at fa
ir v
alue
thro
ugh
othe
r co
mpr
ehen
sive
inco
me
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Equi
ty in
stru
men
ts
Quo
ted
equi
ty s
ecur
ities
593
,366
,539
5
56,9
19,3
27
593
,366
,539
5
39,0
86,8
27
Unq
uote
d eq
uity
sec
uriti
es 4
4,99
5,90
0 2
7,39
2,00
0 3
1,99
5,90
0 1
4,39
2,00
0
Tota
l 6
38,3
62,4
39
584
,311
,327
6
25,3
62,4
39
553
,478
,827
The
deta
ils o
f oth
er in
vest
men
t as
at 3
1 A
shad
207
6 ar
e as
follo
ws:
Des
crip
tion
Int R
ate
Mat
urity
Dat
e F
ace
Valu
e (U
SD)
Car
ryin
g A
mou
nt (N
PR.)
1. S
yndi
cate
Ban
k Lo
ndon
3.
88%
4-D
ec-1
9 1
,400
,000
1
54,8
19,3
12
2. I
CICI
Ban
k D
ubai
3.
75%
18-M
ar-2
0 1
,000
,000
1
11,0
22,8
40
3. I
CICI
Ban
k D
ubai
3.
77%
18-M
ar-2
0 1
,700
,000
1
88,7
18,9
01
4. I
CICI
Ban
k D
ubai
3.
76%
18-M
ar-2
0 3
00,0
00
33,
306,
449
5. S
yndi
cate
Ban
k Lo
ndon
2.
53%
4-D
ec-1
9 1
,480
,000
1
64,2
65,4
90
Tota
l 6
52,1
32,9
92
www.nmbbanknepal.com54
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
4.8.
3: In
form
atio
n re
latin
g to
inve
stm
ent i
n eq
uitie
s
Gro
upN
MB
Part
icul
ars
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Cost
Fa
ir V
alue
Cost
Fa
ir V
alue
Cost
Fa
ir V
alue
Cost
Fa
ir V
alue
Inve
stm
ent i
n qu
oted
equ
ity
Uni
ted
Insu
ranc
e Co
. (N
epal
) Lim
ited
211
,300
2
46,0
00
211
,300
2
58,6
00
211
,300
2
46,0
00
211
,300
2
58,6
00
NLG
Insu
ranc
e Co
mpa
ny L
imite
d -
5
,400
-
4
3,71
0 -
5
,400
-
4
3,71
0
Rid
i Hyd
ro P
ower
Lim
ited
3,6
00
4,4
10
3,6
00
5,7
81
3,6
00
4,4
10
3,6
00
5,7
81
Rur
al M
icro
fi nan
ce D
evel
opm
ent C
ente
r Lim
ited
-
458
,073
-
4
11,3
90
-
458
,073
-
4
11,3
90
Laxm
i Lag
hubi
tta S
anst
ha L
imite
d -
2
,644
-
4
,392
-
2
,644
-
4
,392
Mer
o M
icro
Fin
ance
Bitt
iya
Sans
tha
Ltd.
3
7,02
3,00
0 4
6,04
6,00
0 1
4,00
0,00
0 2
0,02
0,00
0 3
7,02
3,00
0 4
6,04
6,00
0 1
4,00
0,00
0 2
0,02
0,00
0
But
wal
Pow
er C
ompa
ny 2
09,0
06,6
79
187
,688
,873
2
09,0
06,6
79
190
,650
,803
2
09,0
06,6
79
187
,688
,873
2
09,0
06,6
79
190
,650
,803
Nep
al T
elec
om 3
4,69
8,47
2 3
4,38
2,50
2 -
-
3
4,69
8,47
2 3
4,38
2,50
2
NM
B S
ulav
Inve
stm
ent F
und-
1 1
05,0
00,0
00
113
,610
,000
1
12,5
00,0
00
129
,937
,500
1
05,0
00,0
00
113
,610
,000
1
05,0
00,0
00
121
,275
,000
NM
B H
ybrid
Fun
d-1
140
,000
,000
1
40,4
20,0
00
150
,000
,000
1
44,8
30,0
00
140
,000
,000
1
40,4
20,0
00
140
,000
,000
1
35,6
60,0
00
Laxm
i Equ
ity F
und
40,
947,
100
31,
242,
637
40,
947,
100
33,
167,
151
40,
947,
100
31,
242,
637
40,
947,
100
33,
167,
151
NIC
Asi
a G
row
th F
und
10,
000,
000
10,
280,
000
10,
000,
000
9,1
90,0
00
10,
000,
000
10,
280,
000
10,
000,
000
9,1
90,0
00
Sani
ma
Equi
ty F
und
20,
000,
000
18,
800,
000
20,
000,
000
19,
120,
000
20,
000,
000
18,
800,
000
20,
000,
000
19,
120,
000
Citiz
en M
utua
l Fun
d-I
10,
000,
000
10,
180,
000
10,
000,
000
9,2
80,0
00
10,
000,
000
10,
180,
000
10,
000,
000
9,2
80,0
00
Tota
l 6
06,8
90,1
51
593
,366
,539
5
66,6
68,6
79
556
,919
,327
6
06,8
90,1
51
593
,366
,539
5
49,1
68,6
79
539
,086
,827
Inve
stm
ent i
n un
quot
ed e
quity
Nep
al S
tock
Exc
hang
e Li
mite
d 5
,000
7
1,60
0 5
,000
5
,000
5
,000
7
1,60
0 5
,000
5
,000
Nep
al c
lear
ing
Hou
se L
imite
d 4
,198
,000
6
,045
,100
4
,198
,000
4
,198
,000
4
,198
,000
6
,045
,100
4
,198
,000
4
,198
,000
Cred
it In
form
atio
n B
urea
u Li
mite
d 1
89,0
00
1,8
90,0
00
189
,000
1
89,0
00
189
,000
1
,890
,000
1
89,0
00
189
,000
Citiz
ens
Mut
ual F
und-
II 2
,000
,000
2
,000
,000
-
-
2
,000
,000
2
,000
,000
-
-
NA
BIL
BA
LAN
CE F
UN
D-I
I 1
0,00
0,00
0 1
0,00
0,00
0 -
-
1
0,00
0,00
0 1
0,00
0,00
0 -
-
Forw
ard
Com
mun
ity -
-
-
-
-
-
-
-
Sam
uday
ak L
aghu
bitta
Bitt
aya
Sans
tha
Ltd
11,
000,
000
11,
000,
000
11,
000,
000
11,
000,
000
-
-
-
-
Nep
al F
inso
st Co
mpa
ny L
td.
2,0
00,0
00
2,0
00,0
00
2,0
00,0
00
2,0
00,0
00
-
-
-
-
CED
B H
ydro
Fun
d Li
mite
d 1
0,00
0,00
0 1
1,98
9,20
0 1
0,00
0,00
0 1
0,00
0,00
0 1
0,00
0,00
0 1
1,98
9,20
0 1
0,00
0,00
0 1
0,00
0,00
0
Tota
l 3
9,39
2,00
0 4
4,99
5,90
0 2
7,39
2,00
0 2
7,39
2,00
0 2
6,39
2,00
0 3
1,99
5,90
0 1
4,39
2,00
0 1
4,39
2,00
0
Gra
nd T
otal
646
,282
,151
6
38,3
62,4
39
594
,060
,679
5
84,3
11,3
27
633
,282
,151
6
25,3
62,4
39
563
,560
,679
5
53,4
78,8
27
NMB Annual Report-2018/19 55
Trea
sury
bill
s, G
over
nmen
t bon
ds a
nd U
SD B
onds
hav
e be
en c
lass
ifi ed
as
fi nan
cial
ass
ets
held
to m
atur
ity in
stru
men
t as
the
Ban
k ha
s in
tent
ion
and
capa
city
to h
old
thes
e in
stru
men
ts u
ntil
thei
r mat
urity
. The
se in
stru
men
ts a
re c
arrie
d at
am
ortis
ed c
osts
. The
se in
stru
men
ts a
re is
sued
by
the
gove
rnm
ent.
Ban
k co
nsid
ers
that
the
fi xed
retu
rn o
n th
ese
bond
s ad
equa
tely
com
-pe
nsat
es fo
r ass
ocia
ted
risks
. Pre
miu
ms
paid
on
deve
lopm
ent B
onds
are
con
side
red
for t
he E
IR c
alcu
latio
n an
d th
e ba
lanc
e ou
tsta
ndin
g ha
ve b
een
mea
sure
d ac
cord
ingl
y. In
tere
st a
ccru
ed
on D
evel
opm
ent B
onds
and
T-B
ills
are
show
n as
par
t of t
he In
vest
men
ts.
Non
e of
the
equi
ty in
vest
men
ts re
sult
in c
ontr
ol o
r sig
nifi c
ant i
nfl u
ence
ove
r the
inve
sted
ent
ities
. The
se in
vest
men
ts h
ave
been
cla
ssifi
ed a
s av
aila
ble
for s
ale
asse
ts. T
he m
ovem
ent i
n fa
ir va
lue
of th
ese
inst
rum
ents
has
bee
n ad
just
ed th
roug
h ot
her c
ompr
ehen
sive
inco
me.
The
Ban
k ha
s in
vest
ed N
PR 1
05,0
00,0
00 in
NM
B S
ulav
Inve
stm
ent F
und-
1 an
d N
PR 1
40,0
00,0
00 in
NM
B H
ybrid
Fun
d-1
as S
eed
Capi
tal.
For b
oth
Mut
ual F
unds
, the
Ban
k is
the
Fund
Sp
onso
r whi
le th
e B
ank’
s Su
bsid
iary
NM
B C
apita
l Lim
ited
is th
e Fu
nd M
anag
er. T
hese
inve
stm
ent h
ave
been
mad
e as
per
the
requ
irem
ent o
f “M
utua
l Fun
d R
egul
atio
n 20
67” i
ssue
d by
the
Secu
ritie
s B
oard
of N
epal
(SEB
ON) t
o in
vest
see
d m
oney
by
the
Fund
Spo
nsor
/Man
ager
. The
cum
ulat
ive
net c
hang
e in
the
fair
valu
e of
fi na
ncia
l ass
ets
mea
sure
d at
FVT
OCI i
s re
cogn
ized
un
der f
air v
alue
rese
rve
head
ing.
Inve
stm
ents
that
has
not
dis
trib
uted
any
div
iden
d si
nce
prev
ious
thre
ee y
ears
are
:
1. N
MB
Hyb
rid F
und-
1
2. N
IC A
sia
Gro
wth
Fun
d (N
ICG
F)-1
4.8.
3: In
form
atio
n re
latin
g to
inve
stm
ent i
n eq
uitie
s
Gro
upN
MB
Part
icul
ars
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Cost
Fa
ir V
alue
Cost
Fa
ir V
alue
Cost
Fa
ir V
alue
Cost
Fa
ir V
alue
Inve
stm
ent i
n qu
oted
equ
ity
Uni
ted
Insu
ranc
e Co
. (N
epal
) Lim
ited
211
,300
2
46,0
00
211
,300
2
58,6
00
211
,300
2
46,0
00
211
,300
2
58,6
00
NLG
Insu
ranc
e Co
mpa
ny L
imite
d -
5
,400
-
4
3,71
0 -
5
,400
-
4
3,71
0
Rid
i Hyd
ro P
ower
Lim
ited
3,6
00
4,4
10
3,6
00
5,7
81
3,6
00
4,4
10
3,6
00
5,7
81
Rur
al M
icro
fi nan
ce D
evel
opm
ent C
ente
r Lim
ited
-
458
,073
-
4
11,3
90
-
458
,073
-
4
11,3
90
Laxm
i Lag
hubi
tta S
anst
ha L
imite
d -
2
,644
-
4
,392
-
2
,644
-
4
,392
Mer
o M
icro
Fin
ance
Bitt
iya
Sans
tha
Ltd.
3
7,02
3,00
0 4
6,04
6,00
0 1
4,00
0,00
0 2
0,02
0,00
0 3
7,02
3,00
0 4
6,04
6,00
0 1
4,00
0,00
0 2
0,02
0,00
0
But
wal
Pow
er C
ompa
ny 2
09,0
06,6
79
187
,688
,873
2
09,0
06,6
79
190
,650
,803
2
09,0
06,6
79
187
,688
,873
2
09,0
06,6
79
190
,650
,803
Nep
al T
elec
om 3
4,69
8,47
2 3
4,38
2,50
2 -
-
3
4,69
8,47
2 3
4,38
2,50
2
NM
B S
ulav
Inve
stm
ent F
und-
1 1
05,0
00,0
00
113
,610
,000
1
12,5
00,0
00
129
,937
,500
1
05,0
00,0
00
113
,610
,000
1
05,0
00,0
00
121
,275
,000
NM
B H
ybrid
Fun
d-1
140
,000
,000
1
40,4
20,0
00
150
,000
,000
1
44,8
30,0
00
140
,000
,000
1
40,4
20,0
00
140
,000
,000
1
35,6
60,0
00
Laxm
i Equ
ity F
und
40,
947,
100
31,
242,
637
40,
947,
100
33,
167,
151
40,
947,
100
31,
242,
637
40,
947,
100
33,
167,
151
NIC
Asi
a G
row
th F
und
10,
000,
000
10,
280,
000
10,
000,
000
9,1
90,0
00
10,
000,
000
10,
280,
000
10,
000,
000
9,1
90,0
00
Sani
ma
Equi
ty F
und
20,
000,
000
18,
800,
000
20,
000,
000
19,
120,
000
20,
000,
000
18,
800,
000
20,
000,
000
19,
120,
000
Citiz
en M
utua
l Fun
d-I
10,
000,
000
10,
180,
000
10,
000,
000
9,2
80,0
00
10,
000,
000
10,
180,
000
10,
000,
000
9,2
80,0
00
Tota
l 6
06,8
90,1
51
593
,366
,539
5
66,6
68,6
79
556
,919
,327
6
06,8
90,1
51
593
,366
,539
5
49,1
68,6
79
539
,086
,827
Inve
stm
ent i
n un
quot
ed e
quity
Nep
al S
tock
Exc
hang
e Li
mite
d 5
,000
7
1,60
0 5
,000
5
,000
5
,000
7
1,60
0 5
,000
5
,000
Nep
al c
lear
ing
Hou
se L
imite
d 4
,198
,000
6
,045
,100
4
,198
,000
4
,198
,000
4
,198
,000
6
,045
,100
4
,198
,000
4
,198
,000
Cred
it In
form
atio
n B
urea
u Li
mite
d 1
89,0
00
1,8
90,0
00
189
,000
1
89,0
00
189
,000
1
,890
,000
1
89,0
00
189
,000
Citiz
ens
Mut
ual F
und-
II 2
,000
,000
2
,000
,000
-
-
2
,000
,000
2
,000
,000
-
-
NA
BIL
BA
LAN
CE F
UN
D-I
I 1
0,00
0,00
0 1
0,00
0,00
0 -
-
1
0,00
0,00
0 1
0,00
0,00
0 -
-
Forw
ard
Com
mun
ity -
-
-
-
-
-
-
-
Sam
uday
ak L
aghu
bitta
Bitt
aya
Sans
tha
Ltd
11,
000,
000
11,
000,
000
11,
000,
000
11,
000,
000
-
-
-
-
Nep
al F
inso
st Co
mpa
ny L
td.
2,0
00,0
00
2,0
00,0
00
2,0
00,0
00
2,0
00,0
00
-
-
-
-
CED
B H
ydro
Fun
d Li
mite
d 1
0,00
0,00
0 1
1,98
9,20
0 1
0,00
0,00
0 1
0,00
0,00
0 1
0,00
0,00
0 1
1,98
9,20
0 1
0,00
0,00
0 1
0,00
0,00
0
Tota
l 3
9,39
2,00
0 4
4,99
5,90
0 2
7,39
2,00
0 2
7,39
2,00
0 2
6,39
2,00
0 3
1,99
5,90
0 1
4,39
2,00
0 1
4,39
2,00
0
Gra
nd T
otal
646
,282
,151
6
38,3
62,4
39
594
,060
,679
5
84,3
11,3
27
633
,282
,151
6
25,3
62,4
39
563
,560
,679
5
53,4
78,8
27
www.nmbbanknepal.com56
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Curr
ent t
ax a
sset
s4.
9
The
adva
nce
depo
site
d by
the
bank
less
tax
liabi
litie
s ar
e pr
esen
ted
unde
r thi
s he
ad:
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Curr
ent t
ax a
sset
s
Curr
ent y
ear i
ncom
e ta
x as
sets
1,0
62,4
54,1
50
732
,387
,644
9
56,9
49,9
45
633
,132
,526
Tax
asse
ts o
f prio
r per
iods
-
130
,752
,238
-
1
30,7
52,2
38
Tota
l Cur
rent
tax
Ass
ets
1,0
62,4
54,1
50
863
,139
,882
9
56,9
49,9
45
763
,884
,764
Curr
ent t
ax li
abili
ties
Curr
ent y
ear i
ncom
e ta
x lia
bilit
ies
1,1
00,4
93,9
38
923
,191
,366
9
92,5
28,5
15
824
,302
,920
Tax
liabi
litie
s of
prio
r per
iods
-
-
-
-
Tota
l Cur
rent
tax
Liab
ilitie
s 1
,100
,493
,938
9
23,1
91,3
66
992
,528
,515
8
24,3
02,9
20
The
mov
emen
t of A
dvan
ce ta
x as
of A
shad
end
207
6 is
giv
en b
elow
:
Part
icul
ars
Am
ount
(NPR
)
A. A
dvan
ce In
com
e Ta
x ca
rrie
d fo
rwar
d fr
om p
revi
ous
year
-
B. A
dvan
ce T
ax In
stal
men
ts F
Y 20
75/7
694
8,82
0,51
8
C. T
ax W
ithhe
ld b
y W
ithho
lder
FY
2075
/76
8,12
9,42
7
D. T
ax tr
ansf
erre
d to
Tax
Dep
osit
for l
egal
cas
es77
,848
E. P
rovi
sion
for I
ncom
e ta
x fo
r FY
2075
/76
992,
528,
515
Net
Tax
Pay
able
(A+B
+C-D
-E)
(35,
656,
418)
The
adva
nce
tax
amou
nt N
PR. 7
7,84
8 ha
s be
en tr
ansf
erre
d to
Tax
Dep
osit
for l
egal
cas
es a
st er t
he re
port
ing
perio
d. T
he th
ree
adva
nce
tax
inst
allm
ents
are
with
in th
e lim
it of
90%
of t
otal
ta
x lia
bilit
y an
d th
e de
fi cit
has
been
dep
osite
d w
ithin
Ash
win
end
207
6.
NMB Annual Report-2018/19 57
Inve
stm
ent i
n su
bsid
iari
es4.
10
Part
icul
ars
NM
B
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Inve
stm
ent i
n qu
oted
sub
sidi
arie
s 4
8,55
2,00
0 4
8,55
2,00
0
Inve
stm
ent i
n un
quot
ed s
ubsi
diar
ies
200
,000
,000
2
00,0
00,0
00
Tota
l inv
estm
ent
248
,552
,000
2
48,5
52,0
00
Less
: Im
pairm
ent a
llow
ance
s -
-
Net
car
ryin
g am
ount
248
,552
,000
2
48,5
52,0
00
4.10
.1: I
nves
tmen
t in
quot
ed s
ubsi
diar
ies
Part
icul
ars
NM
B
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Cost
Fa
ir V
alue
Cost
Fa
ir V
alue
NM
B M
icro
Fin
ance
Bitt
iya
Sast
ha L
imite
d, 8
26,2
31 P
rom
oter
sh
ares
of R
s 10
0 ea
ch fu
lly p
aid
up 4
8,55
2,00
0 4
8,55
2,00
0 4
8,55
2,00
0 4
8,55
2,00
0
Tota
l 4
8,55
2,00
0 4
8,55
2,00
0 4
8,55
2,00
0 4
8,55
2,00
0
4.10
.2: I
nves
tmen
t in
unqu
oted
sub
sidi
arie
s
Part
icul
ars
NM
B
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Cost
Fa
ir V
alue
Cost
Fa
ir V
alue
NM
B C
apita
l Ltd
., 2,
000,
000
Ordi
nary
sha
res
of R
s 10
0 ea
ch
fully
pai
d up
200
,000
,000
2
00,0
00,0
00
200
,000
,000
2
00,0
00,0
00
Tota
l 2
00,0
00,0
00
200
,000
,000
2
00,0
00,0
00
200
,000
,000
4.10
.3: I
nfor
mat
ion
rela
ting
to s
ubsi
diar
ies
of th
e B
ank
Part
icul
ars
NM
B
Perc
enta
ge o
f ow
ners
hip
held
by
the
Ban
k
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
NM
B C
apita
l Lim
ited
100%
100%
NM
B M
icro
Fin
ance
Bitt
iya
Sast
ha L
imite
d51
%51
%
www.nmbbanknepal.com58
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Inve
stm
ent i
n as
soci
ates
4.11
The
Ban
k do
not
hav
e an
y in
vest
men
t in
asso
ciat
es a
s of
fi sc
al y
ear e
nd 2
076.
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Inve
stm
ent i
n qu
oted
ass
ocia
tes
-
-
-
-
Inve
stm
ent i
n un
quot
ed a
ssoc
iate
s -
-
-
-
Tota
l inv
estm
ent
-
-
-
-
Less
: Im
pairm
ent a
llow
ance
s -
-
-
-
Net
car
ryin
g am
ount
-
-
-
-
4.10
.4: N
on c
ontr
ollin
g in
tere
st o
f the
sub
sidi
arie
s
Part
icul
ars
Gro
up
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Equi
ty in
tere
st h
eld
by N
CI (%
)49
%49
%
Profi
t/(lo
ss) a
lloca
ted
durin
g th
e ye
ar 3
4,83
1,10
3 2
0,27
3,81
5
Acc
umul
ated
bal
ance
s of
NCI
as
on y
ear e
nd 1
65,3
96,6
16
131
,480
,054
Div
iden
d pa
id to
NCI
544
,964
7
26,6
19
4.11
.1: I
nves
tmen
t in
quot
ed a
ssoc
iate
s
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Cost
Fa
ir V
alue
Fair
Val
ueCo
st
"……
……
……
……
……
……
……
.Ltd
. …
……
…sh
ares
of R
s. …
….e
ach"
"……
……
……
……
……
……
……
.Ltd
. …
……
…sh
ares
of R
s. …
….e
ach"
……
……
……
……
……
……
.
Tota
l
NMB Annual Report-2018/19 59
4.11
.4: E
quity
val
ue o
f ass
ocia
tes
Part
icul
ars
Gro
up
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
……
……
……
……
……
……
……
.Ltd
.
……
……
……
……
……
……
……
.Ltd
.
……
……
……
……
……
……
.
Tota
l
4.11
.2: I
nves
tmen
t in
unqu
oted
ass
ocia
tes
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Cost
Fa
ir V
alue
Fair
Val
ueCo
st
"……
……
……
……
……
……
……
.Ltd
. …
……
…sh
ares
of R
s. …
….e
ach"
"……
……
……
……
……
……
……
.Ltd
. …
……
…sh
ares
of R
s. …
….e
ach"
……
……
……
……
……
……
.
Tota
l
4.11
.3: I
nfor
mat
ion
rela
ting
to a
ssoc
iate
s of
the
Ban
k
Part
icul
ars
Gro
upN
MB
Perc
enta
ge o
f ow
ners
hip
held
by
the
Ban
kPe
rcen
tage
of o
wne
rshi
p he
ld b
y th
e B
ank
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
……
……
……
……
……
……
……
.Ltd
.
……
……
……
……
……
……
……
.Ltd
.
……
……
……
……
……
……
……
.Ltd
.
……
……
……
……
……
……
……
.Ltd
.
……
……
……
……
……
….
www.nmbbanknepal.com60
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Inve
stm
ent p
rope
rtie
s4.
12
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Inve
stm
ent p
rope
rtie
s m
easu
red
at fa
ir va
lue
Bal
ance
as
on S
hraw
an 1
59,
774,
627
77,
488,
827
59,
774,
627
77,
488,
827
Add
ition
/dis
posa
l dur
ing
the
year
43,
141,
235
(17,
714,
200)
43,
141,
235
(17,
714,
200)
Net
cha
nges
in fa
ir va
lue
durin
g th
e ye
ar -
-
-
-
Adj
ustm
ent/
tran
sfer
-
-
-
-
Net
am
ount
102
,915
,862
5
9,77
4,62
7 1
02,9
15,8
62
59,
774,
627
Inve
stm
ent p
rope
rtie
s m
easu
red
at c
ost
Bal
ance
as
on S
hraw
an 1
-
-
-
-
Add
ition
/dis
posa
l dur
ing
the
year
-
-
-
-
Adj
ustm
ent/
tran
sfer
-
-
-
-
Acc
umul
ated
dep
reci
atio
n -
-
-
-
Acc
umul
ated
impa
irmen
t los
s -
-
-
-
Net
am
ount
As
per N
AS
40 ‘I
nves
tmen
t Pro
pert
y’ (l
and
and
build
ing
acqu
ired
as n
on b
anki
ng a
sset
s) a
re m
easu
red
at fa
ir va
lue.
Inve
stm
ent p
rope
rtie
s ar
e la
nd o
r bui
ldin
g or
bot
h ot
her t
han
thos
e cl
assi
fi ed
as p
rope
rty
and
equi
pmen
t und
er N
AS
16 –
“Pro
pert
y, P
lant
and
Equ
ipm
ent”;
and
ass
ets
clas
sifi e
d as
no
n-cu
rren
t ass
ets
held
for s
ale
unde
r NFR
S 5
– “N
on-C
urre
nt A
sset
s H
eld
for S
ale
and
Dis
cont
inue
d Op
erat
ions
”. Th
e G
roup
has
reco
gniz
ed a
s in
vest
men
t pro
pert
y al
l lan
d or
land
and
bu
ildin
g ac
quire
d as
non
ban
king
ass
ets.
NMB Annual Report-2018/19 61
Part
y's
Nam
eD
ate
NB
A is
ass
umed
Am
ount
(NPR
)
1. K
ipu
Qua
lity
Mea
t Pro
duct
s P.
Ltd
.16
-Jul
-15
5,35
4,00
0
2. K
amdh
enu
Mah
ila D
ugdh
a U
tpad
ak S
sl16
-Nov
-17
785,
000
3. A
nkita
Impe
x4-
Mar
-18
13,9
36,0
00
4. J
alth
al L
ive
Stoc
k P.
Ltd
4-Se
p-18
2,20
0,00
0
5. F
acto
ry O
utle
t And
Clo
thin
g St
ore
18-J
un-1
815
,530
,000
6. C
hina
Hyg
ieni
c M
eat P
ro &
Sup
P.L
td15
-Jul
-18
20,1
34,0
00
7. C
hina
Hyg
ieni
c M
eat P
ro &
Sup
P.L
td9-
Feb-
186,
612,
125
8. E
aste
rn S
hoe
Cent
re1-
Feb-
194,
041,
500
9. C
hand
raka
la L
imba
ng1-
Feb-
1946
6,00
0
10. M
auni
Tra
ders
1-M
ar-1
93,
120,
000
11. N
atio
nal S
olar
& In
vest
men
t7-
Jan-
1920
,695
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12. U
jjwal
Tra
ding
& S
uppl
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9-Ja
n-19
4,65
0,38
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13. B
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1,57
4,85
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as o
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as fo
llow
s:
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es to
Con
solid
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207
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Prop
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Equ
ipm
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4.13
Part
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ars
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&
Acc
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Cost
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on S
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4 8
29,6
37,4
10
162
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1
83,5
28,0
66
151
,640
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2
85,0
96,0
87
72,
360,
254
269
,179
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1
01,8
42,4
63
2,0
55,9
43,2
49
Add
ition
dur
ing
the
Year
-
Acq
uisi
tion
-
-
-
-
-
-
-
-
-
Capi
taliz
atio
n -
6
,165
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6
3,04
8,48
2 2
2,86
3,61
4 6
5,71
9,95
0 2
2,82
6,62
1 9
0,59
4,15
2 1
2,48
1,75
0 2
83,7
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00
Dis
posa
l dur
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the
year
-
-
(1,0
13,3
63)
(1,1
39)
(18,
692,
296)
(157
,410
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3,28
2,79
7) (1
,660
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4,80
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8)A
djus
tmen
t/R
eval
uatio
n -
-
-
-
-
-
-
-
-
B
alan
ce a
s on
Ash
ad e
nd 2
075
829
,637
,410
1
68,8
23,9
88
245
,563
,185
1
74,5
03,3
81
332
,123
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9
5,02
9,46
5 3
46,4
91,0
60
112
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2
,304
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-
A
dditi
on d
urin
g th
e Ye
ar -
A
cqui
sitio
n -
-
-
-
-
-
-
-
-
Ca
pita
lizat
ion
-
1,5
72,4
65
20,
917,
698
34,
135,
744
86,
321,
157
13,
239,
011
53,
524,
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3,7
89,8
00
213
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D
ispo
sal d
urin
g th
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ar (5
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(8
,525
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2,90
3) (5
0,40
2,59
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2,59
8) (8
53,3
51)
4,1
27
(56,
851,
854)
Adj
ustm
ent/
Rev
alua
tion
-
-
-
-
-
-
-
-
-
Bal
ance
as
on A
shad
end
207
6 8
24,0
71,4
05
170
,396
,453
2
66,4
72,3
58
208
,626
,222
3
68,0
42,2
99
108
,255
,877
3
99,1
61,7
45
116
,457
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2
,461
,484
,267
-
D
epre
ciat
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and
Impa
irm
ent
-
As
on S
hraw
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, 20
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3
4,20
1,87
2 9
6,16
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8 9
1,95
0,33
1 1
14,1
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78
51,
059,
993
133
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6
9,40
2,28
3 5
90,8
61,3
98
Dep
reci
atio
n ch
arge
for t
he Y
ear
-
4,0
30,6
58
19,
768,
722
19,
280,
860
53,
524,
107
6,9
48,5
81
37,
636,
030
7,6
87,6
96
148
,876
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Im
pairm
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-
-
-
-
-
-
-
-
D
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-
-
(8
18,5
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-
(14,
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3,22
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8) (8
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7) (2
9,24
7,69
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djus
tmen
t -
-
-
-
-
-
-
-
-
A
s on
Ash
ad e
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075
-
38,
232,
531
115
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1
11,2
31,1
91
152
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5
7,87
4,72
2 1
58,3
30,7
35
77,
008,
212
710
,490
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D
epre
ciat
ion
char
ge fo
r the
Yea
r -
4
,103
,140
2
4,59
3,00
7 2
3,20
2,34
7 6
0,91
2,32
6 9
,254
,768
4
3,22
1,29
6 8
,795
,393
1
74,0
82,2
76
Impa
irmen
t for
the
year
-
-
-
-
-
-
-
-
-
Dis
posa
ls
-
-
-
-
(38,
847,
209)
-
(818
,777
) -
(3
9,66
5,98
6)A
djus
tmen
t -
-
-
-
-
-
-
-
-
A
s on
Ash
ad e
nd 2
076
-
42,
335,
671
139
,707
,741
1
34,4
33,5
38
174
,763
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6
7,12
9,49
0 2
00,7
33,2
54
85,
803,
604
844
,906
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Capi
tal W
ork
in P
rogr
ess
-
Net
Boo
k Va
lue
As
on A
shad
end
207
4 8
29,6
37,4
10
128
,456
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8
7,36
3,46
8 5
9,69
0,57
4 1
70,9
28,8
09
21,
300,
261
135
,264
,662
3
2,44
0,18
1 1
,465
,081
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A
s on
Ash
ad e
nd 2
075
829
,637
,410
1
30,5
91,4
58
130
,448
,451
6
3,27
2,19
0 1
79,4
25,5
04
37,
154,
742
188
,160
,325
3
5,65
5,76
9 1
,594
,345
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A
s on
Ash
ad e
nd 2
076
824
,071
,405
1
28,0
60,7
82
126
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7
4,19
2,68
4 1
93,2
78,9
46
41,
126,
387
198
,428
,490
3
0,65
4,30
4 1
,616
,577
,616
NMB Annual Report-2018/19 63
Part
icul
ars
NM
B
Land
Bui
ldin
gLe
aseh
old
Prop
ertie
sCo
mpu
ter
&
Acc
esso
ries
Vehi
cles
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iture
&
Fixt
ure
Mac
hine
ryEq
uipm
ent &
Ot
hers
Tota
l
Cost
As
on S
hraw
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, 207
4 8
29,6
37,4
10
162
,658
,358
1
75,2
98,7
35
141
,951
,293
2
69,9
46,4
85
56,
685,
551
269
,179
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9
9,65
2,10
7 2
,005
,009
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A
dditi
on d
urin
g th
e Ye
arA
cqui
sitio
n -
-
-
-
-
-
-
-
-
Ca
pita
lizat
ion
-
6,1
65,6
30
62,
938,
078
18,
059,
946
59,
274,
670
19,
261,
613
90,
594,
152
12,
481,
750
268
,775
,840
D
ispo
sal d
urin
g th
e ye
ar -
-
(1
,013
,363
) -
(1
8,69
2,29
6) (1
54,8
03)
(13,
282,
797)
(88,
300)
(33,
231,
560)
Adj
ustm
ent/
Rev
alua
tion
-
-
-
-
-
-
-
-
Bal
ance
as
on A
shad
end
207
5 8
29,6
37,4
10
168
,823
,988
2
37,2
23,4
50
160
,011
,239
3
10,5
28,8
59
75,
792,
360
346
,491
,060
1
12,0
45,5
57
2,2
40,5
53,9
24
Add
ition
dur
ing
the
Year
Acq
uisi
tion
-
-
-
-
-
-
-
-
-
Capi
taliz
atio
n -
1
,572
,465
2
0,16
1,12
3 2
7,17
3,07
0 8
4,54
5,15
7 8
,574
,593
5
3,52
4,03
5 3
,627
,320
1
99,1
77,7
63
Dis
posa
l dur
ing
the
year
(5,5
66,0
05)
-
-
-
(50,
402,
599)
-
(853
,351
) -
(5
6,82
1,95
5)A
djus
tmen
t/R
eval
uatio
n -
-
-
-
-
-
-
-
B
alan
ce a
s on
Ash
ad e
nd 2
076
824
,071
,405
1
70,3
96,4
53
257
,384
,573
1
87,1
84,3
09
344
,671
,417
8
4,36
6,95
3 3
99,1
61,7
45
115
,672
,877
2
,382
,909
,732
Dep
reci
atio
n an
d Im
pair
men
tA
s on
Shr
awan
1,
2074
-
34,
201,
872
92,
650,
073
87,
566,
169
108
,321
,146
4
3,33
1,05
4 1
33,9
15,0
44
68,
405,
181
568
,390
,538
D
epre
ciat
ion
char
ge fo
r the
Yea
r -
4
,030
,658
1
9,20
6,51
5 1
7,21
1,68
9 5
0,55
0,12
7 4
,669
,185
3
7,63
6,03
0 8
,537
,299
1
41,8
41,5
03
Impa
irmen
t for
the
year
-
Dis
posa
ls
-
-
(818
,586
) -
(1
4,99
3,14
8) (1
33,8
51)
(13,
220,
338)
(81,
767)
(29,
247,
691)
Adj
ustm
ent
-
-
-
-
-
-
-
-
-
As
on A
shad
end
207
5 -
3
8,23
2,53
1 1
11,0
38,0
02
104
,777
,858
1
43,8
78,1
25
47,
866,
388
158
,330
,735
7
6,86
0,71
2 6
80,9
84,3
50
Dep
reci
atio
n ch
arge
for t
he Y
ear
-
4,1
03,1
40
23,
971,
209
19,
774,
897
57,
375,
668
6,5
36,2
60
43,
221,
296
8,7
10,1
94
163
,692
,664
Im
pairm
ent f
or th
e ye
ar -
D
ispo
sals
-
-
-
-
(3
8,84
7,20
9) -
(8
18,7
77)
-
(39,
665,
986)
Adj
ustm
ent
-
-
-
As
on A
shad
end
207
6 -
4
2,33
5,67
1 1
35,0
09,2
10
124
,552
,755
1
62,4
06,5
83
54,
402,
647
200
,733
,254
8
5,57
0,90
7 8
05,0
11,0
27
Capi
tal W
ork
in P
rogr
ess
Net
Boo
k Va
lue
As
on A
shad
end
207
4 8
29,6
37,4
10
128
,456
,486
8
2,64
8,66
2 5
4,38
5,12
3 1
61,6
25,3
39
13,
354,
497
135
,264
,662
3
1,24
6,92
7 1
,436
,619
,106
A
s on
Ash
ad e
nd 2
075
829
,637
,410
1
30,5
91,4
58
126
,185
,448
5
5,23
3,38
1 1
66,6
50,7
34
27,
925,
972
188
,160
,325
3
5,18
4,84
5 1
,559
,569
,574
A
s on
Ash
ad e
nd 2
076
824
,071
,405
1
28,0
60,7
82
122
,375
,362
6
2,63
1,55
4 1
82,2
64,8
34
29,
964,
306
198
,428
,490
3
0,10
1,97
1 1
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,898
,704
www.nmbbanknepal.com64
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Goo
dwill
and
Inta
ngib
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sset
s4.
14
Part
icul
ars
Gro
up
Goo
dwill
So� w
are
Othe
rTo
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hase
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evel
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Cost
As
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hraw
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74 -
4
7,13
4,42
0 -
-
4
7,13
4,42
0 A
dditi
on d
urin
g th
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ar -
-
-
-
-
A
cqui
sitio
n -
-
-
-
-
Ca
pita
lizat
ion
-
12,
753,
198
-
-
12,
753,
198
Dis
posa
l dur
ing
the
year
-
-
-
-
-
Adj
ustm
ent/
Rev
alua
tion
-
-
-
-
-
Bal
ance
as
on A
shad
end
207
5 -
5
9,88
7,61
9 -
-
5
9,88
7,61
9 -
Add
ition
dur
ing
the
Year
-
Acq
uisi
tion
-
-
-
-
-
Capi
taliz
atio
n -
1
07,6
16,5
83
-
-
107
,616
,583
D
ispo
sal d
urin
g th
e ye
ar -
-
-
-
-
A
djus
tmen
t/R
evlu
atio
n -
-
-
-
-
B
alan
ce a
s on
Ash
ad e
nd 2
076
-
167
,504
,201
-
-
1
67,5
04,2
01
-
Am
ortiz
atio
n an
d Im
pair
men
t -
A
s on
Shr
awan
1,
2074
-
31,
049,
514
-
-
31,
049,
514
Am
ortiz
atio
n ch
arge
for t
he Y
ear
-
6,1
94,2
94
-
-
6,1
94,2
94
Impa
irmen
t for
the
year
-
-
-
-
-
Dis
posa
ls
-
-
-
-
-
Adj
ustm
ent
-
-
-
-
-
As
on A
shad
end
207
5 -
3
7,24
3,80
8 -
-
3
7,24
3,80
8 -
Am
ortiz
atio
n ch
arge
for t
he Y
ear
-
13,
587,
223
-
-
13,
587,
223
Impa
irmen
t for
the
year
-
-
-
-
-
Dis
posa
ls
-
-
-
-
-
Adj
ustm
ent
-
-
-
-
-
As
on A
shad
end
207
6 -
5
0,83
1,03
1 -
-
5
0,83
1,03
1 -
Capi
tal W
ork
in P
rogr
ess
-
-
Net
Boo
k Va
lue
-
As
on A
shad
end
207
4 -
1
6,08
4,90
6 -
-
1
6,08
4,90
6 A
s on
Ash
ad e
nd 2
075
-
22,
643,
811
-
-
22,
643,
811
As
on A
shad
end
207
6 -
1
16,6
73,1
71
-
-
116
,673
,171
NMB Annual Report-2018/19 65
Part
icul
ars
NM
B
Goo
dwill
So� w
are
Othe
rTo
tal
Purc
hase
dD
evel
oped
Cost
As
on S
hraw
an 1
, 20
74 -
4
5,88
6,62
7 -
-
4
5,88
6,62
7 A
dditi
on d
urin
g th
e Ye
ar -
-
-
-
-
A
cqui
sitio
n -
-
-
-
-
Ca
pita
lizat
ion
-
12,
210,
798
-
-
12,
210,
798
Dis
posa
l dur
ing
the
year
-
-
-
-
-
Adj
ustm
ent/
Rev
alua
tion
-
-
-
-
-
Bal
ance
as
on A
shad
end
207
5 -
5
8,09
7,42
6 -
-
5
8,09
7,42
6
Add
ition
dur
ing
the
Year
Acq
uisi
tion
-
-
-
-
-
Capi
taliz
atio
n -
1
06,4
55,2
82
-
-
106
,455
,282
D
ispo
sal d
urin
g th
e ye
ar -
-
-
-
-
A
djus
tmen
t/R
evlu
atio
n -
-
-
-
-
B
alan
ce a
s on
Ash
ad e
nd 2
076
-
164
,552
,707
-
-
1
64,5
52,7
07
Am
ortiz
atio
n an
d Im
pair
men
tA
s on
Shr
awan
1,
2074
-
30,
189,
482
-
-
30,
189,
482
Am
ortiz
atio
n ch
arge
for t
he Y
ear
-
5,8
53,7
35
-
-
5,8
53,7
35
Impa
irmen
t for
the
year
-
-
-
-
-
Dis
posa
ls
-
-
-
-
-
Adj
ustm
ent
-
-
-
-
-
As
on A
shad
end
207
5 -
3
6,04
3,21
7 -
-
3
6,04
3,21
7
Am
ortiz
atio
n ch
arge
for t
he Y
ear
-
13,
100,
691
-
-
13,
100,
691
Impa
irmen
t for
the
year
-
-
-
-
-
Dis
posa
ls
-
-
-
-
-
Adj
ustm
ent
-
-
-
-
As
on A
shad
end
207
6 -
4
9,14
3,90
8 -
-
4
9,14
3,90
8
Capi
tal W
ork
in P
rogr
ess
Net
Boo
k Va
lue
As
on A
shad
end
207
4 -
1
5,69
7,14
6 -
-
1
5,69
7,14
6 A
s on
Ash
ad e
nd 2
075
-
22,
054,
209
-
-
22,
054,
209
As
on A
shad
end
207
6 -
1
15,4
08,8
00
-
-
115
,408
,800
www.nmbbanknepal.com66
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Def
erre
d Ta
x4.
15
The
crea
tion
of D
efer
red
Tax
Ass
ets
(DTA
) an
d D
efer
red
Tax
Liab
ilitie
s (D
TL)
has
a be
arin
g on
the
com
puta
tion
of c
apita
l ade
quac
y ra
tio a
nd b
anks
’ abi
lity
to d
ecla
re d
ivid
ends
. DTA
re
pres
ents
una
bsor
bed
depr
ecia
tion,
diff
eren
ce b
etw
een
carr
ying
am
ount
as
per b
ooks
of a
ccou
nts
and
tax
incl
udin
g ca
rry
forw
ard
loss
es w
hich
can
set
-off
agai
nst a
sset
s fu
ture
taxa
ble
inco
me
whi
ch is
con
side
red
as ti
min
g di
ff ere
nce.
DTA
has
an
eff e
ct o
f dec
reas
ing
futu
re in
com
e ta
x pa
ymen
ts w
hich
indi
cate
s th
at th
ey a
re p
repa
id in
com
e ta
xes
and
mee
t the
defi
niti
on o
f as
sets
. DTA
is d
educ
ted
from
Tie
r I c
apita
l, if
defe
rred
tax
rese
rve
is in
clud
ed a
lread
y th
ereo
n. D
efer
red
tax
(ass
ets)
/lia
bilit
ies
have
bee
n re
cogn
ised
as
per t
he p
rovi
sion
of N
epal
Acc
ount
ing
Stan
dard
(NA
S -0
9)
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
31
Ash
ad 2
076
Def
erre
d Ta
x A
sset
sD
efer
red
Tax
Liab
ilitie
s
Net
Def
erre
d Ta
x A
sset
s/
(Lia
bilit
ies)
Def
erre
d Ta
x A
sset
sD
efer
red
Tax
Liab
ilitie
s
Net
Def
erre
d Ta
x A
sset
s/
(Lia
bilit
ies)
Def
erre
d ta
x on
tem
poro
ry d
iff er
ence
s on
follo
win
g ite
ms
Loan
and
Adv
ance
to B
/FIs
3
4,14
7,98
5 3
4,14
7,98
5 -
3
4,14
7,98
5 3
4,14
7,98
5 -
Loan
s an
d ad
vanc
es to
cus
tom
ers
1,3
64,7
77,4
31
1,4
07,3
56,9
62
(42,
579,
530)
1,3
64,7
77,4
31
1,3
64,7
77,4
31
-
Inve
stm
ent p
rope
rtie
s -
-
-
-
-
-
Inve
stm
ent s
ecur
ities
-
(322
,258
) 3
22,2
58
-
(1,0
16,8
36)
1,0
16,8
36
Prop
erty
& e
quip
men
t 1
,734
,188
,938
1
,719
,114
,233
1
5,07
4,70
4 1
,698
,480
,217
1
,693
,307
,503
5
,172
,714
Empl
oyee
s' d
efi n
ed b
enefi
t pl
an 2
17,0
64,3
10
-
217
,064
,310
1
98,6
29,8
98
198
,629
,898
Leas
e lia
bilit
ies
8,2
71,3
73
-
8,2
71,3
73
8,2
71,3
73
-
8,2
71,3
73
Prov
isio
ns 9
,078
,445
-
9
,078
,445
9
,078
,445
-
9
,078
,445
Def
erre
d ta
x on
tem
poro
ry d
iff er
ence
s 1
,010
,258
,544
9
48,0
89,0
76
62,
169,
468
994
,015
,605
9
27,3
64,8
25
66,
650,
780
Def
erre
d ta
x on
car
ry fo
rwar
d of
unu
sed
tax
loss
es 3
,389
,813
-
3
,389
,813
3
,389
,813
-
3
,389
,813
Def
erre
d ta
x du
e to
cha
nges
in ta
x ra
te -
-
Net
Def
erre
d ta
x as
set/
(liab
ilitie
s) a
s on
31
Ash
ad 2
076
65,
559,
281
70,
040,
593
Def
erre
d ta
x (a
sset
)/lia
bilit
ies
as o
n 3
2 A
shad
207
5 (6
4,06
6,99
0) (6
6,86
9,01
1)
Orig
inat
ion/
(Rev
ersa
l) du
ring
the
year
1,4
92,2
90
3,1
71,5
81
Def
erre
d ta
x ex
pens
e/(in
com
e) re
cogn
ised
in p
rofi t
or
loss
(1,8
77,0
83)
(3,4
39,2
37)
Def
erre
d ta
x ex
pens
e/(in
com
e) re
cogn
ised
in o
ther
co
mpr
ehen
sive
inco
me
384
,793
2
67,6
56
Def
erre
d ta
x ex
pens
e/(in
com
e) re
cogn
ised
in d
irect
ly
in e
quity
-
-
NMB Annual Report-2018/19 67
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
2 A
shad
207
5Ye
ar e
nded
32
Ash
ad 2
075
Def
erre
d Ta
x A
sset
sD
efer
red
Tax
Liab
ilitie
s
Net
Def
erre
d Ta
x A
sset
s/
(Lia
bilit
ies)
Def
erre
d Ta
x A
sset
sD
efer
red
Tax
Liab
ilitie
s
Net
Def
erre
d Ta
x A
sset
s/
(Lia
bilit
ies)
Def
erre
d ta
x on
tem
poro
ry d
iff er
ence
s on
follo
win
g ite
ms
Loan
and
Adv
ance
to B
/FIs
-
-
-
-
-
-
Loan
s an
d ad
vanc
es to
cus
tom
ers
1,2
31,4
43,3
37
1,2
59,5
58,5
16
(28,
115,
179)
1,2
31,4
43,3
37
1,2
31,4
43,3
37
-
Inve
stm
ent p
rope
rtie
s -
5
9,77
4,62
7 (5
9,77
4,62
7) -
5
9,77
4,62
7 (5
9,77
4,62
7)
Inve
stm
ent s
ecur
ities
-
10,
713,
721
(10,
713,
721)
-
10,
381,
221
(10,
381,
221)
Prop
erty
& e
quip
men
t 9
20,3
90,8
84
787
,367
,827
1
33,0
23,0
57
876
,980
,620
7
51,9
86,3
72
124
,994
,248
Empl
oyee
s' d
efi n
ed b
enefi
t pl
an 1
64,9
91,0
06
-
164
,991
,006
1
51,2
14,5
91
151
,214
,591
Leas
e lia
bilit
ies
-
-
-
-
-
Prov
isio
ns 5
,544
,336
5
84,5
66
4,9
59,7
70
5,5
44,3
36
-
5,5
44,3
36
Def
erre
d ta
x on
tem
poro
ry d
iff er
ence
s 6
95,3
66,7
81
634
,672
,978
6
0,67
7,17
8 6
79,5
54,8
65
616
,075
,667
6
3,47
9,19
8
Def
erre
d ta
x on
car
ry fo
rwar
d of
unu
sed
tax
loss
es 3
,389
,813
3
,389
,813
-
3
,389
,813
Def
erre
d ta
x du
e to
cha
nges
in ta
x ra
te -
-
Net
Def
erre
d ta
x as
set/
(liab
ilitie
s) a
s on
32
Ash
ad 2
075
64,
066,
990
66,
869,
011
Def
erre
d ta
x (a
sset
)/lia
bilit
ies
as o
n 3
1 A
shad
207
4 7
2,03
3,51
0 6
9,19
7,22
5
Orig
inat
ion/
(Rev
ersa
l) du
ring
the
year
(136
,100
,499
) (1
36,0
66,2
37)
Def
erre
d ta
x ex
pens
e/(in
com
e) re
cogn
ised
in p
rofi t
or
loss
(116
,372
,096
) (1
17,0
93,7
34)
Def
erre
d ta
x ex
pens
e/(in
com
e) re
cogn
ised
in o
ther
co
mpr
ehen
sive
inco
me
(19,
728,
403)
(18,
972,
501)
Def
erre
d ta
x ex
pens
e/(in
com
e) re
cogn
ised
in d
irect
ly in
eq
uity
-
-
www.nmbbanknepal.com68
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Othe
r as
sets
4.16
Othe
r Ass
et in
clud
e ac
coun
ts re
ceiv
able
, int
eres
t rec
eiva
ble,
acc
rued
inco
me,
pre
paym
ents
, dep
osit,
def
erre
d em
ploy
ee b
enefi
ts a
nd s
tatio
nery
sto
ck d
etai
ls p
rese
nted
as
follo
ws:
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Ass
ets
held
for s
ale
-
-
-
-
Othe
r non
ban
king
ass
ets
-
-
-
-
Bill
s re
ceiv
able
-
-
-
-
Acc
ount
s re
ceiv
able
55,
465,
547
478
,188
,664
2
9,26
8,89
8 3
0,33
4,12
8
Acc
rued
inco
me
16,
847,
224
12,
434,
921
16,
847,
224
12,
434,
921
Prep
aym
ents
and
dep
osit
72,
841,
593
43,
227,
751
72,
749,
604
42,
388,
619
Inco
me
tax
depo
sit
63,
703,
616
63,
703,
616
63,
703,
616
63,
703,
616
Def
erre
d em
ploy
ee e
xpen
ditu
re 7
39,8
78,7
46
451
,037
,186
7
39,8
78,7
46
451
,037
,186
Othe
rs:
Adv
ance
Gol
d an
d Si
lver
228
,747
,129
-
2
28,7
47,1
29
-
Stoc
k of
Sta
tione
ry 1
8,71
8,33
9 1
9,73
6,71
9 1
7,77
1,66
8 1
8,77
1,77
4
Fuel
Sto
ck -
3
4,25
5 -
3
4,25
5
Gol
d M
arku
p 3
2,51
3,85
7 -
3
2,51
3,85
7 -
Adv
ance
to C
BS
Proj
ect
-
38,
222,
000
-
38,
222,
000
Rec
eiva
ble
from
FPO
sha
reho
lder
s -
Shar
e A
llotm
ent
-
3,8
01,2
49,2
79
-
3,8
01,2
49,2
79
Othe
rs 1
,177
,807
1
,220
,655
3
92,8
68
208
,124
Tota
l 1
,229
,893
,858
4
,909
,055
,046
1
,201
,873
,611
4
,458
,383
,903
The
prov
isio
n ou
tsta
ndin
g as
of A
shad
end
207
6 of
NM
B in
clud
es IP
O re
ceiv
able
s of
ers
twhi
le B
ank
of A
sia
and
depo
sit o
f cap
ital m
erch
ant fi
nan
ce a
mou
ntin
g N
PR. 5
,544
,336
and
N
PR. 3
,534
,109
resp
ectiv
ely
and
are
nette
d off
with
rece
ivab
les
and
Cash
and
Cas
h Eq
uiva
lent
resp
ectiv
ely.
NMB Annual Report-2018/19 69
Due
to B
ank
and
Fina
ncia
l Ins
titut
ions
4.17
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Mon
ey m
arke
t dep
osits
-
-
-
-
Inte
rban
k bo
rrow
ing
-
500
,000
,000
-
5
00,0
00,0
00
Othe
r dep
osits
from
BFI
s -
-
-
-
Settl
emen
t and
cle
arin
g ac
coun
ts -
-
-
-
Othe
r dep
osits
from
BFI
s 6
24,3
64,9
96
536
,268
,951
6
24,3
64,9
96
536
,268
,951
Tota
l 6
24,3
64,9
96
1,0
36,2
68,9
51
624
,364
,996
1
,036
,268
,951
Due
to N
epal
Ras
tra
Ban
k4.
18
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Refi
nan
ce fr
om N
RB
585
,303
,362
6
60,0
71,6
41
585
,303
,362
6
60,0
71,6
41
Stan
ding
Liq
uidi
ty F
acili
ty
-
-
-
-
Lend
er o
f las
t rep
ort f
acili
ty fr
om N
RB
-
-
-
-
Secu
ritie
s so
ld u
nder
repu
rcha
se a
gree
men
ts -
-
-
-
Othe
r pay
able
to N
RB
2,6
18,2
19,7
10
-
2,6
18,2
19,7
10
-
Tota
l 3
,203
,523
,072
6
60,0
71,6
41
3,2
03,5
23,0
72
660
,071
,641
The
Ban
k ha
s an
out
stan
ding
bor
row
ing
of N
PR 5
85,3
03,3
62 (S
ched
ule
4.18
) fro
m th
e Ce
ntra
l Ban
k un
der R
efi n
anci
ng F
acili
ty a
vaila
ble
to F
inan
cial
Inst
itutio
ns. T
he o
ther
pay
able
to N
RB
is
pay
able
of L
i.Ka
Acc
ount
s (c
ontr
a) o
f Gov
ernm
ent b
odie
s. D
ue to
Nep
al R
astr
a B
ank
is s
ubse
quen
tly m
easu
red
at a
mor
tised
cos
t.
www.nmbbanknepal.com70
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Der
ivat
ive
fi nan
cial
inst
rum
ents
4.19
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Hel
d fo
r tra
ding
Inte
rest
rate
sw
ap -
-
-
-
Curr
ency
sw
ap 1
,886
,751
,200
1
,382
,071
,887
1
,886
,751
,200
1
,382
,071
,887
Forw
ard
exch
ange
con
trac
t 6
,014
,776
,452
5
,312
,931
,206
6
,014
,776
,452
5
,312
,931
,206
Othe
rs 5
56,8
46,7
77
782
,480
,798
5
56,8
46,7
77
782
,480
,798
Hel
d fo
r ri
sk m
anag
emen
t -
-
Inte
rest
rate
sw
ap -
-
-
-
Curr
ency
sw
ap -
-
-
-
Forw
ard
exch
ange
con
trac
t -
-
-
-
Othe
r -
-
-
-
Tota
l 8
,458
,374
,429
7
,477
,483
,892
8
,458
,374
,429
7
,477
,483
,892
Dep
osits
from
cus
tom
ers
4.20
All
depo
sits
acc
ount
oth
er th
an d
epos
it fr
om b
ank
and
fi nan
cial
inst
itutio
ns (l
ocal
and
fore
ign
bank
and
NR
B)
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Inst
itutio
ns c
usto
mer
s:
Term
dep
osits
28,
320,
801,
308
23,
581,
918,
142
28,
370,
801,
308
23,
671,
918,
142
Call
depo
sits
8,9
51,1
69,6
15
7,5
73,9
42,6
59
9,0
45,5
28,3
30
7,6
41,8
35,7
85
Curr
ent d
epos
its 5
,494
,378
,104
4
,605
,900
,471
5
,494
,378
,104
4
,605
,900
,471
Othe
r 5
,795
,411
,079
5
,626
,605
,019
5
,795
,411
,079
5
,626
,605
,019
Indi
vidu
al c
usto
mer
s:
Term
dep
osits
21,
034,
039,
618
22,
161,
841,
630
21,
034,
039,
618
22,
161,
841,
630
Savi
ng d
epos
its 2
8,92
8,44
3,21
0 2
0,55
7,90
9,84
2 2
7,84
5,72
1,81
5 1
9,86
1,38
1,18
9
Curr
ent d
epos
its 1
88,7
42,4
94
184
,616
,311
1
88,7
42,4
94
184
,616
,311
Othe
r 1
17,6
79,2
19
216
,768
,673
1
17,6
79,2
19
216
,768
,673
Tota
l 9
8,83
0,66
4,64
7 8
4,50
9,50
2,74
6 9
7,89
2,30
1,96
7 8
3,97
0,86
7,21
9
Der
ivat
ives
are
fi na
ncia
l ins
trum
ents
that
der
ive
thei
r va
lue
in re
spon
se to
cha
nges
in in
tere
st ra
tes,
fi na
ncia
l ins
trum
ent p
rices
etc
. Der
ivat
ives
are
cat
egor
ised
as
trad
ing
unle
ss th
ey a
re
desi
gnat
ed a
s he
dgin
g in
stru
men
ts. A
ll de
rivat
ives
are
initi
ally
reco
gnis
ed a
nd s
ubse
quen
tly m
easu
red
at fa
ir va
lue,
with
all
trad
ing
gain
s or
loss
es re
cogn
ised
in th
e St
atem
ent o
f Pro
fi t o
r Lo
ss u
nder
Net
trad
ing
Inco
me.
Fai
r val
ue is
det
erm
ined
usi
ng th
e fo
rwar
d m
arke
t rat
es ru
ling
on th
e re
port
ing
date
.
NMB Annual Report-2018/19 71
4.20
.1: C
urre
ncy
wis
e an
alys
is o
f dep
osit
from
cus
tom
ers
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Nep
ales
e ru
pee
93,
284,
403,
713
82,
092,
407,
581
92,
346,
041,
033
81,
553,
772,
054
Indi
an ru
pee
-
-
-
-
Uni
ted
Stat
e do
llar
4,2
22,4
11,2
07
2,1
55,4
35,5
84
4,2
22,4
11,2
07
2,1
55,4
35,5
84
Gre
at B
ritai
n po
und
24,
019,
388
31,
385,
378
24,
019,
388
31,
385,
378
Euro
1,0
98,2
59,9
06
39,
565,
485
1,0
98,2
59,9
06
39,
565,
485
Jape
nese
yen
8,2
88,5
56
-
8,2
88,5
56
-
Chin
ese
yuan
183
,800
,655
1
89,1
52,3
96
183
,800
,655
1
89,1
52,3
96
Othe
r 9
,481
,223
1
,556
,323
9
,481
,223
1
,556
,323
Tota
l 9
8,83
0,66
4,64
7 8
4,50
9,50
2,74
6 9
7,89
2,30
1,96
7 8
3,97
0,86
7,21
9
Bor
row
ing
4.21
The
bank
has
bro
ught
off s
hore
bor
row
ing
amou
ntin
g U
SD 1
5 M
io. f
rom
Inte
rnat
iona
l Fin
anci
al C
orpo
ratio
n(IF
C), U
SD 1
5 M
io. f
rom
CD
C G
roup
, Lon
don
and
NPR
. 169
.56
Mio
. fro
m M
icro
sm
all a
nd m
ediu
m e
nter
pris
es b
onds
, S.A
, Lux
embo
urg.
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Dom
estic
Bor
row
ing
Nep
al G
over
nmen
t -
-
-
-
Othe
r Ins
titut
ions
1,3
60,2
40,2
09
1,1
82,0
81,8
98
-
-
Othe
r -
-
-
-
Sub
tota
l 1
,360
,240
,209
1
,182
,081
,898
-
-
Fore
ign
Bor
row
ing
Fore
ign
Ban
k an
d Fi
nanc
ial I
nstit
utio
ns 3
,468
,060
,000
-
3
,468
,060
,000
-
Mul
tilat
eral
Dev
elop
men
t Ban
ks -
-
-
-
Othe
r Ins
titut
ions
-
-
-
-
Sub
tota
l 3
,468
,060
,000
-
3
,468
,060
,000
-
Tota
l 4
,828
,300
,209
1
,182
,081
,898
3
,468
,060
,000
-
www.nmbbanknepal.com72
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Prov
isio
ns4.
22
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Prov
isio
ns fo
r red
unda
ncy
-
-
-
-
Prov
isio
n fo
r res
truc
turin
g -
-
-
-
Pend
ing
lega
l iss
ues
and
tax
litig
atio
n -
-
-
-
Oner
ous
cont
ract
s -
-
-
-
Othe
r 2
24,2
19
73,
556
-
Tota
l 2
24,2
19
73,
556
-
-
4.22
.1: M
ovem
ent i
n pr
ovis
ion
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Bal
ance
at S
hraw
an 1
73,
556
-
-
-
Prov
isio
ns m
ade
durin
g th
e ye
ar 1
35,6
65
73,
556
-
-
Prov
isio
ns u
sed
durin
g th
e ye
ar -
-
-
-
Prov
isio
ns re
vers
ed d
urin
g th
e ye
ar 1
4,99
9 -
-
-
Unw
ind
of d
isco
unt
-
-
-
-
Bal
ance
at A
shad
end
224
,219
7
3,55
6 -
-
NMB Annual Report-2018/19 73
Othe
r lia
bilit
ies
4.23
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Liab
ility
for e
mpl
oyee
s de
fi ned
ben
efi t
oblig
atio
ns 7
3,23
0,65
3 7
2,46
2,16
3 5
9,44
5,25
0 6
0,86
4,64
1
Liab
ility
for l
ong-
serv
ice
leav
e 1
38,8
53,7
62
86,
044,
161
128
,750
,654
8
2,60
5,30
2
Shor
t-te
rm e
mpl
oyee
ben
efi ts
1,0
28,4
42
9,5
40
-
-
Bill
s pa
yabl
e 9
7,62
0,48
7 9
8,39
7,76
3 9
7,62
0,48
7 9
8,39
7,76
3
Cred
itors
and
acc
rual
s 1
,374
,872
,190
9
14,5
28,1
61
923
,806
,589
5
15,2
81,0
16
Inte
rest
pay
able
on
depo
sit
419
,841
,689
2
21,6
04,5
23
419
,841
,689
2
21,6
04,5
23
Inte
rest
pay
able
on
borr
owin
g 3
8,55
6,05
1 6
,359
,178
3
8,53
1,86
5 6
,359
,178
Liab
ilitie
s on
def
ered
gra
nt in
com
e 2
,233
,207
2
,925
,180
-
-
Unp
aid
Div
iden
d 5
,128
,793
1
2,31
7,36
7 5
,128
,793
1
2,31
7,36
7
Liab
ilitie
s un
der F
inan
ce L
ease
8,2
71,3
73
-
8,2
71,3
73
-
Empl
oyee
bon
us p
ayab
le 3
79,0
65,3
97
299
,473
,585
3
60,8
89,3
15
285
,146
,674
Othe
rs:
-
-
TDS
Paya
ble
103
,798
,365
1
34,3
66,0
91
102
,551
,154
1
22,3
04,6
36
Aud
it Fe
e Pa
yabl
e 1
,258
,075
1
,258
,075
1
,118
,700
1
,118
,700
Othe
rs 3
2,19
4,88
9 2
1,87
0,77
8 -
-
Tota
l 2
,675
,953
,373
1
,871
,616
,566
2
,145
,955
,868
1
,405
,999
,800
www.nmbbanknepal.com74
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
4.23
.1: D
efi n
ed b
enefi
t ob
ligat
ions
The
defi n
ed-b
enefi
t ob
ligat
ion
is c
alcu
late
d an
nual
ly b
y an
inde
pend
ent a
ctua
ry u
sing
the
proj
ecte
d un
it m
etho
d. T
he B
ank
oper
ates
a d
efi n
ed c
ontr
ibut
ion
plan
as
prov
iden
t fun
d co
ntri-
butio
n of
its
empl
oyee
s an
d de
fi ned
ben
efi t
plan
for t
he G
ratu
ity p
aym
ent r
equi
rem
ent u
nder
its
staff
rul
es. F
or d
efi n
ed c
ontr
ibut
ion
plan
, the
Ban
k pa
ys c
ontr
ibut
ions
to a
n in
depe
nden
tly
adm
inis
tere
d re
tirem
ent f
und
on a
man
dato
ry b
asis
, and
suc
h am
ount
s ar
e ch
arge
d to
ope
ratin
g ex
pens
es. T
he B
ank
has
no fu
rthe
r pa
ymen
t obl
igat
ions
onc
e th
e co
ntrib
utio
ns h
ave
been
pai
d. F
or fu
nded
defi
ned
ben
efi t
plan
s, th
e lia
bilit
y re
cogn
ised
in th
e fi n
anci
al s
tate
men
t is
the
pres
ent v
alue
of t
he d
efi n
ed b
enefi
t ob
ligat
ion
less
the
fair
valu
e of
pla
n as
sets
. Suc
h ob
ligat
ions
are
est
imat
ed o
n th
e ba
sis
of th
e ac
tuar
ial a
ssum
ptio
ns.
The
amou
nts
reco
gnis
ed in
the
stat
emen
t of fi
nan
cial
pos
ition
are
as
follo
ws:
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Pres
ent v
alue
of u
nfun
ded
oblig
atio
ns 1
53,6
25,1
39
93,
251,
053
130
,414
,488
8
3,37
8,26
0
Pres
ent v
alue
of f
unde
d ob
ligat
ions
257
,307
,396
1
91,6
83,8
09
257
,307
,396
1
91,6
83,8
09
Tota
l pre
sent
val
ue o
f obl
igat
ions
410
,932
,535
2
84,9
34,8
62
387
,721
,884
2
75,0
62,0
69
Fair
valu
e of
pla
n as
sets
197
,862
,146
1
30,8
19,1
68
197
,862
,146
1
30,8
19,1
68
Pres
ent v
alue
of n
et o
blig
atio
ns 1
89,8
59,7
38
144
,242
,901
1
89,8
59,7
38
144
,242
,901
Rec
ogni
sed
liabi
lity
for d
efi n
ed b
enefi
t ob
ligat
ions
410
,932
,535
2
84,9
34,8
62
387
,721
,884
2
75,0
62,0
69
NMB Annual Report-2018/19 75
4.23
.2: P
lan
asse
ts
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Plan
ass
ets
com
pris
e -
-
-
-
Equi
ty s
ecur
ities
-
-
-
-
Gov
ernm
ent b
onds
-
-
-
-
Ban
k de
posi
t 1
97,8
62,1
46
130
,819
,168
1
97,8
62,1
46
130
,819
,168
Othe
r -
-
-
-
Tota
l 1
97,8
62,1
46
130
,819
,168
1
97,8
62,1
46
130
,819
,168
4.23
.3: M
ovem
ent i
n th
e pr
esen
t val
ue o
f defi
ned
ben
efi t
oblig
atio
ns
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Defi
ned
ben
efi t
oblig
atio
ns a
t Shr
awan
1 2
94,7
91,2
46
204
,297
,939
2
75,0
62,0
69
195
,713
,617
Act
uaria
l los
ses
27,
201,
771
34,
005,
777
25,
980,
978
36,
237,
227
Ben
efi ts
pai
d by
the
plan
(18,
960,
091)
(11,
993,
820)
(17,
729,
820)
(9,7
06,0
97)
Curr
ent s
ervi
ce c
osts
and
inte
rest
1
07,8
99,6
09
58,
624,
966
104
,408
,657
5
2,81
7,32
2
Defi
ned
ben
efi t
oblig
atio
ns a
t Ash
ad e
nd 4
10,9
32,5
35
284
,934
,862
3
87,7
21,8
84
275
,062
,069
www.nmbbanknepal.com76
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
4.23
.4: M
ovem
ent i
n th
e fa
ir v
alue
of p
lan
asse
ts
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Fair
valu
e of
pla
n as
sets
at S
hraw
an 1
130
,819
,168
6
1,02
5,09
6 1
30,8
19,1
68
61,
025,
096
Cont
ribut
ions
pai
d in
to th
e pl
an 6
0,86
4,64
1 7
4,78
0,28
5 6
0,86
4,64
1 7
4,78
0,28
5
Ben
efi ts
pai
d du
ring
the
year
(9,4
19,5
48)
(4,9
86,2
13)
(9,4
19,5
48)
(4,9
86,2
13)
Act
uaria
l (lo
sses
) gai
ns 1
5,59
7,88
5 -
1
5,59
7,88
5 -
Expe
cted
retu
rn o
n pl
an a
sset
s -
-
-
-
Fair
val
ue o
f pla
n as
sets
at A
shad
end
197
,862
,146
1
30,8
19,1
68
197
,862
,146
1
30,8
19,1
68
4.23
.5: A
mou
nt re
cogn
ised
in p
rofi t
or
loss
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Curr
ent s
ervi
ce c
osts
81,
836,
905
40,
208,
342
81,
051,
928
37,
033,
544
Inte
rest
on
oblig
atio
n 3
4,16
2,52
3 2
7,61
7,12
4 3
2,46
9,86
7 2
6,99
4,15
6
Expe
cted
retu
rn o
n pl
an a
sset
s -
-
-
-
Tota
l 1
15,9
99,4
28
67,
825,
466
113
,521
,795
6
4,02
7,70
0
4.23
.6: A
mou
nt re
cogn
ised
in o
ther
com
preh
ensi
ve in
com
e
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Act
uria
l (ga
in)/
loss
(2
,932
,011
) (1
7,32
5,02
2) (8
88,9
69)
(17,
480,
123)
Tota
l (2
,932
,011
) (1
7,32
5,02
2) (8
88,9
69)
(17,
480,
123)
NMB Annual Report-2018/19 77
4.23
.7: A
ctua
rial
ass
umpt
ions
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Dis
coun
t rat
e9.
00%
9.00
%9.
00%
9.00
%
Expe
cted
retu
rn o
n pl
an a
sset
-
-
-
-
Futu
re s
alar
y in
crea
se8.
00%
8.00
%8.
00%
8.00
%
With
draw
al ra
te16
.00%
16.0
0%16
.00%
16.0
0%
Ther
e is
no
plan
ass
ets
for t
he s
ubsi
diar
ies
and
the
bank
dep
osits
the
fund
at t
he a
ccou
nt m
aint
aine
d at
CIT
for g
ratu
ity p
aym
ent a
s pe
r act
uary
repo
rt.
Deb
t sec
uriti
es is
sued
4.24
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Deb
t sec
uriti
es is
sued
des
igna
ted
as a
t fai
r val
ue th
roug
h pr
ofi t
or lo
ss -
-
Deb
t sec
uriti
es is
sued
at a
mor
tised
cos
t 2
,239
,236
,412
5
17,5
47,9
45
2,2
39,2
36,4
12
517
,547
,945
Tota
l 2
,239
,236
,412
5
17,5
47,9
45
2,2
39,2
36,4
12
517
,547
,945
The
Ban
k ha
d is
sued
non
-con
vert
ible
"7%
NM
B D
eben
ture
207
7" o
n 6
Falg
un 2
071
(18
Febr
uary
201
5) a
mou
ntin
g to
NPR
500
Mill
ion.
The
Deb
entu
re, w
hich
was
fully
sub
scrib
ed, h
as a
m
atur
ity p
erio
d of
5 y
ears
6 m
onth
s. T
he b
ank
has
also
issu
ed 3
0 La
cs u
nits
of N
MB
Deb
entu
re 2
085
with
the
face
val
ue o
f NPR
. 1,0
00 p
er u
nit a
mou
ntin
g N
PR 3
Bill
ion
at th
e ra
te o
f 10%
fo
r the
per
iod
of 1
0 ye
ars.
The
Gen
eral
pub
lic h
ad s
ubsc
ribed
99,
505
units
am
ount
ing
NPR
. 9,9
5,05
,000
and
15,
85,0
00 u
nits
am
ount
ing
NPR
. 1,5
8,50
,00,
000
was
sub
scrib
ed th
roug
h Pr
ivat
e Pl
acem
ents
. The
fi na
l allo
tmen
t of N
PR. 1
,68,
45,0
5,00
0 to
the
subs
crib
ed u
nit h
olde
rs w
as m
ade
on 2
9 Ch
aitr
a 20
75. T
he d
eben
ture
has
bee
n m
easu
red
at a
mor
tized
cos
t
Subo
rdin
ated
Lia
bilit
ies
4.25
The
bank
doe
s no
t hav
e an
y su
bord
inat
e lia
bilit
ies
as o
n re
port
ing
date
.
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Red
eem
able
pre
fere
nce
shar
es -
-
-
-
Irred
emab
le c
umul
ativ
e pr
efer
ence
sha
res
(liab
ilitie
s co
mpo
nent
) -
-
-
-
Othe
r -
-
-
-
Tota
l -
-
-
-
www.nmbbanknepal.com78
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Shar
e ca
pita
l 4.
26
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Ordi
nary
sha
res
9,6
18,1
62,6
52
7,6
03,2
90,6
34
9,6
18,1
62,6
52
7,6
03,2
90,6
34
Conv
ertib
le p
refe
renc
e sh
ares
(equ
ity c
ompo
nent
onl
y) -
-
-
-
Irred
emab
le p
refe
renc
e sh
ares
(equ
ity c
ompo
nent
onl
y) -
-
-
-
Perp
etua
l deb
t (eq
uity
com
pone
nt o
nly)
-
-
-
-
Tota
l 9
,618
,162
,652
7
,603
,290
,634
9
,618
,162
,652
7
,603
,290
,634
4.26
.1: O
rdin
ary
shar
es
Part
icul
ars
NM
B
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Aut
hori
zed
Capi
tal
100,
000,
000
Ordi
nary
sha
re o
f Rs.
100
eac
h 1
0,00
0,00
0,00
0 1
0,00
0,00
0,00
0
Issu
ed c
apita
l
96,1
81,6
27 O
rdin
ary
shar
e of
Rs.
100
eac
h 9
,618
,162
,652
7
,603
,290
,634
Subs
crib
ed a
nd p
aid
up c
apita
l
96,1
81,6
27 O
rdin
ary
shar
e of
Rs.
100
eac
h 9
,618
,162
,652
7
,603
,290
,634
Tota
l 9
,618
,162
,652
7
,603
,290
,634
NMB Annual Report-2018/19 79
4.26
.2: O
rdin
ary
shar
e ow
ners
hip
Part
icul
ars
NM
B
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Perc
ent
Am
ount
Perc
ent
Am
ount
Dom
estic
ow
ners
hip
77.
77
7,4
80,0
04,6
50
77.
77
5,9
13,0
47,2
11
Nep
al G
over
nmen
t -
-
-
-
"A" c
lass
lice
nsed
inst
itutio
ns -
-
-
-
Othe
r lic
ense
d in
titut
ions
-
-
-
-
Othe
r Ins
titut
ions
13.
70
1,3
17,7
08,1
00
14.
87
1,1
30,2
45,4
65
Publ
ic 6
4.07
6
,162
,296
,550
6
2.90
4
,782
,801
,746
Othe
r -
-
-
-
Fore
ign
owne
rshi
p 2
2.23
2
,138
,158
,002
2
2.23
1
,690
,243
,423
Tota
l 1
00.0
0 9
,618
,162
,652
1
00.0
0 7
,603
,290
,634
The
paid
up
shar
e ca
pita
l of t
he B
ank
has
mov
ed o
ver t
he y
ears
as
follo
ws:
Fina
ncia
l Yea
rCu
mul
ativ
e Pa
id
up C
apita
l NPR
Rem
arks
2006
-07(
2063
-64
BS)
199,
540,
600
Issu
ance
of 3
0% B
onus
Sha
res
2007
-08(
2064
-65
BS)
1,00
0,00
0,00
0Is
suan
ce o
f 1:4
Rig
ht S
hare
s
2008
-09(
2065
-66
BS)
1,42
4,64
1,35
0Is
suan
ce o
f 10%
Bon
us S
hare
s an
d 30
% R
ight
Sha
res
2009
-10(
2066
-67
BS)
1,65
1,65
0,00
0A
uctio
n of
53,
586.
5 re
mai
ning
righ
t sha
res
of F
Y 20
08-0
9 an
d pu
blic
issu
e of
715
,000
sha
res.
2010
-11
(206
7-68
BS)
2,00
0,00
0,00
0Is
suan
ce o
f 10:
21.0
9 rig
ht s
hare
s an
d au
ctio
n of
uns
ubsc
ribed
righ
t sha
res.
2013
-14
(207
0-71
BS)
2,40
0,00
0,00
0Is
suan
ce o
f 20%
Bon
us S
hare
s
2015
-16
(207
2-73
BS)
4,15
4,55
9,32
0Sh
ares
issu
ed to
sha
reho
lder
s of
mer
ged
entit
ies
2015
-16
(207
2-73
BS)
4,48
6,92
4,06
6Is
suan
ce o
f 8%
Bon
us S
hare
s
2016
-17
(207
3-74
BS)
5,43
0,06
2,46
6FM
O’s
addi
tiona
l inv
estm
ent o
f NPR
943
,138
,400
2016
-17
(207
3-74
BS)
6,46
1,77
4,33
4Is
suan
ce o
f 19%
Bon
us S
hare
s
2017
-18
(207
4-75
BS)
7,60
3,29
0,63
4Is
suan
ce o
f FPO
2018
-19
(207
5-76
BS)
9,61
8,16
2,65
2Is
suan
ce o
f 15%
Bon
us S
hare
s fr
om F
Y 20
73/7
4 an
d 10
% B
onus
Sha
res
from
FY
2074
/75
The
22nd
AG
M o
f the
ban
k he
ld o
n 31
Shr
awan
207
5 ha
s ap
prov
ed 1
5% b
onus
sha
res
(sto
ck d
ivid
end)
am
ount
ing
NPR
1,1
40,4
93,5
95 a
nd 2
3rd
AG
M h
eld
on 2
6 Po
ush
2075
has
app
rove
d 10
% s
tock
div
iden
d am
ount
ing
NPR
. 874
,378
,423
.Thi
s ha
s ra
ised
pai
d up
cap
ital o
f the
ban
k to
NPR
9,6
18,1
62,6
52.
Tota
l fra
ctio
nal s
hare
is 7
2,85
5.51
as
on A
shad
end
207
6. F
ract
ion
shar
e us
ually
com
e fr
om is
sue
of b
onus
sha
re a
nd s
plit
of s
hare
als
o.
www.nmbbanknepal.com80
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Shar
ehol
der'
s N
ame
Shar
e U
nits
% h
oldi
ng
1. N
eder
land
se F
inan
cier
ings
-Maa
tsch
appi
j Voo
r On
twik
kelin
gsla
nden
N.V
. 1
6,34
8,28
8 1
7.00
2. E
mpl
oyee
s Pr
ovid
ent F
und
6,5
99,0
40
6.8
6
3. Y
ong
Lian
Rea
lty S
dn B
hd 5
,033
,290
5
.23
4. G
ayat
ri In
vest
men
t And
Man
agem
ent P
. Ltd
. 2
,366
,426
2
.46
5. N
and
Kis
hore
Rat
hi 2
,010
,983
2
.09
6. D
hana
njay
a Pr
asad
Ach
arya
1,8
24,2
99
1.9
0
7. S
anto
sh R
athi
1,1
87,6
16
1.2
3
8. P
awan
Kum
ar G
olya
n 1
,103
,054
1
.15
9. S
anto
sh D
evi M
urar
ka 9
48,6
47
0.9
9
10. P
urus
hota
m L
al S
angh
ai 8
62,9
95
0.9
0
11. D
inba
ndhu
Agr
awal
639
,623
0
.67
12. A
nant
Kum
ar G
olya
n 6
36,2
11
0.6
6
13. B
alar
am N
eupa
ne 6
32,4
54
0.6
6
14. N
arpa
t Sin
gh J
ain
541
,588
0
.56
15. P
ashu
pati
Mur
arka
538
,740
0
.56
16. A
dity
a Sa
ngha
i 4
95,1
69
0.5
1
17. R
aj K
umar
Goy
al 4
94,0
58
0.5
1
18. A
shok
Kum
ar A
graw
al 4
82,3
57
0.5
0
The
deta
ils o
f sha
reho
lder
s ho
ldin
g sh
ares
abo
ve 0
.5%
as
of A
shad
end
207
6 ar
e gi
ven
belo
w:
NMB Annual Report-2018/19 81
Part
icul
ars
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Accr
ued
Inte
rest
on
Loan
s an
d Ad
vanc
es re
cogn
ized
as
Inco
me
591
,317
,341
2
22,6
79,1
76
Prov
isio
n of
Non
- B
anki
ng A
sset
s (In
vesm
ent P
rope
rty)
102
,915
,862
5
9,77
4,62
7 D
efer
red
Tax
Ass
ets
70,
040,
593
66,
869,
011
Act
uary
Los
ses
48,
915,
471
48,
026,
502
Fair
valu
e ad
just
men
t of E
quity
Sha
res
5,5
43,7
98
7,0
57,2
96
Tota
l 8
18,7
33,0
64
404
,406
,612
Othe
r R
eser
ves
of N
MB
pre
sent
ed u
nder
Sta
tem
ent o
f cha
nge
in e
quity
incl
udes
deb
entu
re/c
apita
l red
empt
ion
rese
rve,
sta
ff sk
ill d
evel
opm
ent f
und,
cap
ital a
djus
tmen
t fun
d, c
orpo
rate
so
cial
resp
onsi
bilit
y fu
nd, i
nves
tmen
t adj
ustm
ent r
eser
ve ,
actu
aria
l gai
n/lo
sses
and
sta
ff re
lief f
und.
Staff
Rel
ief F
und
amou
ntin
g N
PR. 1
0,00
0,00
0 ha
s be
en s
et u
p w
ith th
e ob
ject
ive
to fi
nanc
ially
ass
isst
sta
ff at
the
time
of th
eir a
cute
fi na
ncia
l diffi
cul
ty o
f the
nat
ure
of s
taff '
s ow
n/sp
ouse
/ch
ildre
n cr
itica
l illn
ess,
per
man
ent d
isab
ility
due
to il
lnes
s or
des
truc
tion
of p
rope
rty
due
to n
atur
al c
alam
ity. T
he a
mou
nt p
aid
durin
g th
e re
port
ing
perio
d is
NPR
. 1 m
io. T
he s
aid
rese
rve
has
been
incl
uded
in T
ier 2
Cap
ital.
Reg
ulat
ory
rese
rve
incl
udes
the
amou
nt th
at is
allo
cate
d fr
om p
rofi t
or
reta
ined
ear
ning
s fo
the
bank
as
per
dire
ctiv
e of
NR
B fo
r th
e pu
rpos
e of
impl
emen
tatio
n of
NFR
S an
d w
hich
sha
ll no
t be
rega
rded
as
free
for d
istr
ibut
ion
of d
ivid
end
(cas
h as
wel
l as
bonu
s sh
ares
). Th
e am
ount
allo
cate
d to
this
rese
rve
incl
udes
the
follo
win
g ad
just
men
ts a
s pe
r NFR
S:
Ast e
r ch
ange
of C
ore
Ban
king
Sys
tem
, the
inte
rest
on
maj
ority
of r
isk
asse
ts p
ortfo
lio a
re d
ue a
s pe
r En
glis
h Ca
lend
er d
ue to
whi
ch a
ppro
xim
atel
y a
fort
nigh
t’s in
tere
st in
com
e ar
e no
t re
aliz
ed a
s of
fi sc
al y
ear e
nd 2
076.
Res
erve
s4.
27
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Stat
utor
y ge
nera
l res
erve
2,1
41,5
71,4
72
1,6
83,9
91,7
05
2,1
23,3
06,6
59
1,6
71,8
51,4
54
Exch
ange
equ
ilisa
tion
rese
rve
78,
376,
972
56,
373,
878
78,
376,
972
56,
373,
878
Corp
orat
e so
cial
resp
onsi
bilit
y re
serv
e 4
9,14
6,94
3 3
1,94
6,75
8 4
8,44
2,60
3 3
1,54
8,40
0 Ca
pita
l re
dem
ptio
n re
serv
e 4
00,0
00,0
00
309
,547
,489
4
00,0
00,0
00
309
,547
,489
R
egul
ator
y re
serv
e 8
18,7
33,0
64
404
,406
,612
8
18,7
33,0
64
404
,406
,612
In
vest
men
t adj
ustm
ent r
eser
ve 1
0,00
0,00
0 1
0,00
0,00
0 1
0,00
0,00
0 1
0,00
0,00
0 Ca
pita
l res
erve
-
-
-
-
Ass
ets
reva
luat
ion
rese
rve
-
-
Fair
valu
e re
serv
e (5
,092
,298
) (6
,824
,546
) (5
,543
,798
) (7
,057
,296
)D
ivid
end
equa
lisat
ion
rese
rve
-
-
Act
uaria
l gai
n (5
1,39
7,99
4) (4
8,83
5,32
5) (4
8,91
5,47
1) (4
8,02
6,50
2)Sp
ecia
l res
erve
-
-
-
-
Othe
r res
erve
s: -
-
-
-
-
Def
erre
d Ta
x R
eser
ve 5
,997
,582
3
,169
,572
-
-
-C
apita
l Adj
ustm
ent F
und
57,
326,
449
57,
326,
449
57,
326,
449
57,
326,
449
Staff
Ski
ll D
evel
opm
ent F
und
-
-
-
-
-NM
B S
taff
Rel
ief F
und
10,
000,
000
-
10,
000,
000
-
Othe
rs 4
,526
,568
1
,828
,616
-
-
To
tal
3,5
19,1
88,7
57
2,5
02,9
31,2
08
3,4
91,7
26,4
77
2,4
85,9
70,4
84
www.nmbbanknepal.com82
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Cont
inge
nt li
abili
ties
and
com
mitm
ents
4.28
The
tabl
e be
low
sho
ws
the
cont
ract
or u
nder
lyin
g pr
inci
pal a
mou
nts
of u
nmat
ured
off -
bala
nce
shee
t tra
nsac
tions
as
on re
port
ing
date
.
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Cont
inge
nt li
abili
ties
44,
144,
526,
363
44,
101,
467,
843
44,
144,
526,
363
44,
101,
467,
843
Und
raw
n an
d un
disb
urse
d fa
cilit
ies
43,
884,
977,
705
40,
389,
967,
733
43,
884,
977,
705
40,
389,
967,
733
Capi
tal c
omm
itmen
t 6
6,30
3,12
1 1
65,6
45,3
52
65,
753,
121
165
,645
,352
Leas
e Co
mm
itmen
t -
-
-
-
Litig
atio
n 1
75,0
96,1
80
146
,099
,951
1
75,0
96,1
80
146
,099
,951
Tota
l 8
8,27
0,90
3,36
9 8
4,80
3,18
0,87
9 8
8,27
0,35
3,36
9 8
4,80
3,18
0,87
9
4.28
.1: C
ontin
gent
liab
ilitie
s
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Acc
epta
nce
and
docu
men
tary
cre
dit
20,
275,
562,
695
20,
595,
601,
948
20,
275,
562,
695
20,
595,
601,
948
Bill
s fo
r col
lect
ion
5,2
05,2
36,4
96
6,5
93,7
22,9
25
5,2
05,2
36,4
96
6,5
93,7
22,9
25
Forw
ard
exch
ange
con
trac
ts -
-
-
-
Gua
rant
ees
18,
663,
727,
172
16,
912,
142,
969
18,
663,
727,
172
16,
912,
142,
969
Und
erw
ritin
g co
mm
itmen
t -
-
-
-
Othe
r com
mitm
ents
-
-
-
-
Tota
l 4
4,14
4,52
6,36
3 4
4,10
1,46
7,84
3 4
4,14
4,52
6,36
3 4
4,10
1,46
7,84
3
4.28
.2: U
ndra
wn
and
undi
sbur
sed
faci
litie
s
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Und
isbu
rsed
am
ount
of l
oans
8,0
81,8
45,8
98
6,6
53,7
04,0
00
8,0
81,8
45,8
98
6,6
53,7
04,0
00
Und
raw
n lim
its o
f ove
rdra
st s 4
,350
,254
,360
3
,840
,304
,766
4
,350
,254
,360
3
,840
,304
,766
Und
raw
n lim
its o
f cre
dit c
ards
99,
140,
074
98,
274,
598
99,
140,
074
98,
274,
598
Und
raw
n lim
its o
f let
ter o
f cre
dit
20,
525,
761,
911
23,
513,
172,
255
20,
525,
761,
911
23,
513,
172,
255
Und
raw
n lim
its o
f gua
rant
ee 1
0,82
7,97
5,46
1 6
,284
,512
,114
1
0,82
7,97
5,46
1 6
,284
,512
,114
Tota
l 4
3,88
4,97
7,70
5 4
0,38
9,96
7,73
3 4
3,88
4,97
7,70
5 4
0,38
9,96
7,73
3
NMB Annual Report-2018/19 83
4.28
.3: C
apita
l com
mitm
ents
Capi
tal e
xpen
ditu
re a
ppro
ved
by re
leva
nt a
utho
rity
of th
e ba
nk b
ut p
rovi
sion
has
not
bee
n m
ade
in fi
nanc
ial s
tate
men
ts
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Capi
tal c
omm
itmen
ts in
rela
tion
to P
rope
rty
and
Equi
pmen
t
App
rove
d an
d co
ntra
cted
for
6,5
83,5
83
3,6
62,8
52
6,0
33,5
83
3,6
62,8
52
App
rove
d bu
t not
con
trac
ted
for
-
-
Sub
tota
l 6
,583
,583
3
,662
,852
6
,033
,583
3
,662
,852
Capi
tal c
omm
itmen
ts in
rela
tion
to In
tang
ible
ass
ets
App
rove
d an
d co
ntra
cted
for
59,
719,
538
161
,982
,500
5
9,71
9,53
8 1
61,9
82,5
00
App
rove
d bu
t not
con
trac
ted
for
-
-
Sub
tota
l 5
9,71
9,53
8 1
61,9
82,5
00
59,
719,
538
161
,982
,500
Tota
l 6
6,30
3,12
1 1
65,6
45,3
52
65,
753,
121
165
,645
,352
4.28
.4: L
ease
com
mitm
ents
Part
icul
ars
Gro
upN
MB
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Oper
atin
g le
ase
com
mitm
ents
Futu
re m
inim
um le
ase
paym
ents
und
er n
on c
ance
llabl
e op
erat
ing
leas
e, w
here
the
bank
is le
ssee
Not
late
r tha
n 1
year
-
-
-
-
Late
r tha
n 1
year
but
not
late
r tha
n 5
year
s -
-
-
-
Late
r tha
n 5
year
s -
-
-
-
Sub
tota
l -
-
-
-
Fina
nce
leas
e co
mm
itmen
ts
Futu
re m
inim
um le
ase
paym
ents
und
er n
on c
ance
llabl
e op
erat
ing
leas
e, w
here
the
bank
is le
ssee
Not
late
r tha
n 1
year
-
-
-
-
Late
r tha
n 1
year
but
not
late
r tha
n 5
year
s -
-
-
-
Late
r tha
n 5
year
s -
-
-
-
Sub
tota
l -
-
-
-
Gra
nd to
tal
-
-
-
-
The
leas
e ag
reem
ents
incl
udin
g th
at o
f sub
sidi
arie
s ar
e ca
ncel
labl
e ag
reem
ents
as
per t
erm
s of
leas
e co
ntra
cts.
www.nmbbanknepal.com84
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
4.28
.5: L
itiga
tion
a. C
ontin
gent
of T
ax:
The
bank
has
fi le
d ap
peal
s at
Sup
rem
e Co
urt,
Rev
enue
Trib
unal
or I
nlan
d R
even
ue D
epar
tmen
t bas
ed o
n th
e st
age
of a
ppea
l aga
inst
am
ende
d as
sess
men
t ord
ers
of v
ario
us fi
scal
yea
rs
issu
ed b
y La
rge
Taxp
ayer
s Offi
ce.
The
det
ail o
f the
cas
es a
re g
iven
bel
ow:
Fisc
al Y
ear
Stat
us D
ispu
ted
Tax
Am
ount
NM
B B
ank
Lim
ited
FY 2
063-
64A
ppea
led
to S
upre
me
Cour
t on
2070
.11.
15 fo
r whi
ch th
e fi n
al d
ecis
ion
is p
endi
ng 3
2,18
2,88
9 FY
206
4-65
App
eale
d to
Sup
rem
e Co
urt o
n 20
71.0
9.24
for w
hich
the
fi nal
dec
isio
n is
pen
ding
26,
954,
038
FY 2
066-
67A
ppea
led
to R
even
ue T
ribun
al a
gain
st th
e de
cisi
on o
f LTO
on
2075
.02.
08 fo
r whi
ch th
e fi n
al d
ecis
ion
is p
endi
ng 3
3,67
1,38
5
FY 2
067-
68A
ppea
led
to R
even
ue T
ribun
al a
gain
st th
e de
cisi
on o
f LTO
on
2075
.02.
08 fo
r whi
ch th
e fi n
al d
ecis
ion
is p
endi
ng 7
,724
,850
FY 2
068-
69A
ppea
led
to R
even
ue T
ribun
al a
gain
st th
e de
cisi
on o
f LTO
on
2074
.04.
16 fo
r whi
ch th
e fi n
al d
ecis
ion
is p
endi
ng 5
,891
,178
FY 2
069-
70A
ppea
led
to IR
D fo
r Adm
inis
trat
ive
Rev
iew
on
2074
.03.
15 fo
r whi
ch th
e fi n
al d
ecis
ion
is p
endi
ng 1
6,09
2,99
2 FY
207
0-71
App
eale
d to
IRD
for A
dmin
istr
ativ
e R
evie
w o
n 20
75.0
4.28
for w
hich
the
fi nal
dec
isio
n is
pen
ding
4,9
82,4
75
FY 2
071-
72A
ppea
led
to IR
D fo
r Adm
inis
trat
ive
Rev
iew
on
2075
.09.
02 fo
r whi
ch th
e fi n
al d
ecis
ion
is p
endi
ng 7
,475
,620
To
tal
134
,975
,426
Er
stw
hile
Cle
an E
nerg
y D
evel
opm
ent B
ank
Lim
ited
FY 2
065-
66A
ppea
led
to IR
D fo
r Adm
inis
trat
ive
Rev
iew
on
2070
.06.
08 fo
r whi
ch th
e fi n
al d
ecis
ion
is p
endi
ng 1
,505
,630
FY
206
6-67
App
eale
d to
IRD
for A
dmin
istr
ativ
e R
evie
w o
n 20
71.0
8.23
for w
hich
the
fi nal
dec
isio
n is
pen
ding
14,
595,
261
FY 2
067-
68A
ppea
led
to R
even
ue T
ribun
al a
gain
st th
e de
cisi
on o
f LTO
on
2074
.04.
16 fo
r whi
ch th
e fi n
al d
ecis
ion
is p
endi
ng 7
,616
,269
FY 2
068-
69A
ppea
led
to R
even
ue T
ribun
al a
gain
st th
e de
cisi
on o
f LTO
on
2074
.04.
16 fo
r whi
ch th
e fi n
al d
ecis
ion
is p
endi
ng 4
,010
,125
FY 2
069-
70A
ppea
led
to IR
D fo
r Adm
inis
trat
ive
Rev
iew
on
2074
.04.
27 fo
r whi
ch th
e fi n
al d
ecis
ion
is p
endi
ng 2
,953
,526
FY
207
0-71
App
eale
d to
IRD
for A
dmin
istr
ativ
e R
evie
w o
n 20
75.0
6.02
for w
hich
the
fi nal
dec
isio
n is
pen
ding
3,7
80,6
70
Tota
l 3
4,46
1,48
2 Er
stw
hile
Pru
dent
ial F
inan
ce C
ompa
ny L
imite
dFY
206
5-66
App
eale
d to
IRD
for A
dmin
istr
ativ
e R
evie
w o
n 20
70.0
7.29
for w
hich
the
fi nal
dec
isio
n is
pen
ding
5,6
59,2
72
Tota
l 5
,659
,272
G
rand
Tot
al 1
75,0
96,1
80
Sinc
e de
cisi
ons
for t
hese
cas
es a
re p
endi
ng, d
ispu
ted
tax
amou
nt o
f NPR
175
,096
,180
men
tione
d ab
ove
has
been
dis
clos
ed a
s co
ntin
gent
liab
ility
on
Inco
me
Tax
and
no p
rovi
sion
for a
ddi-
tiona
l lia
bilit
y ha
s be
en m
ade.
A
s of
the
fi sca
l yea
r en
d 20
75/7
6, s
elf-
Ass
essm
ent R
etur
ns fi
led
by N
MB
Ban
k Lt
d. fo
r FY
207
2/73
to 2
074/
75 a
nd b
y er
stw
hile
Cle
an E
nerg
y D
evel
opm
ent B
ank
Ltd.
for
FY 2
071/
72 to
20
72/7
3 an
d by
ers
twhi
le B
hrik
uti D
evel
opm
ent B
ank
Ltd.
for F
Y 20
72/7
3 is
yet
to b
e re
asse
ssed
by
Larg
e Ta
x Pa
yers
Offi
ce.
b.
In th
e se
cond
qua
rter
of F
Y 20
15/1
6, th
e B
ank
had
purc
hase
d la
nd w
ith a
n ar
ea o
f 80
Ann
as (2
,543
sq
met
er) f
or N
PR 5
90 M
illio
n in
Kam
alad
i, K
athm
andu
. The
land
was
bou
ght t
hrou
gh
auct
ion
proc
ess
invo
lvin
g fo
ur fi
nanc
ial i
nstit
utio
ns. T
he p
revi
ous
owne
r of p
rope
rty
has
fi led
cas
e in
Kat
hman
du D
istr
ict C
ourt
for r
epea
l of a
uctio
n pr
oces
s.
NMB Annual Report-2018/19 85
Inte
rest
inco
me
4.29
Inte
rest
inco
me
incl
ude
inte
rest
inco
me
on lo
an a
nd a
dvan
ce, i
nves
tmen
t sec
uriti
es e
xcep
t on
thos
e in
vest
men
t sec
uriti
es m
easu
re a
t fai
r val
ue th
roug
h pr
ofi t
or lo
ss, c
ash
and
cash
eq
uiva
lent
, due
from
BFI
s, lo
an a
nd a
dvan
ces
to s
taff ,
etc
. Det
ails
pre
sent
ed a
s fo
llow
s:
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Cash
and
cas
h eq
uiva
lent
62,
214,
239
52,
770,
428
13,
780,
049
9,5
90,2
54
Due
from
Nep
al R
astr
a B
ank
-
-
-
-
Plac
emen
t with
ban
k an
d fi n
anci
al in
stitu
tions
140
,169
,449
4
2,53
8,69
2 1
40,1
69,4
49
42,
538,
692
Loan
and
adv
ance
s to
ban
k an
d fi n
anci
al in
stitu
tions
1
45,4
39,1
54
129
,463
,374
1
45,4
39,1
54
129
,463
,374
Loan
s an
d ad
vanc
es to
cus
tom
ers
10,
625,
666,
262
8,4
36,8
53,2
43
10,
172,
263,
538
8,0
77,8
86,3
40
Inve
stm
ent s
ecur
ities
514
,448
,520
4
54,3
84,4
04
494
,048
,717
4
07,9
24,7
02
Loan
and
adv
ance
s to
sta
ff 9
0,20
8,32
2 3
6,39
5,28
7 9
0,20
8,32
2 3
6,39
5,28
7
Othe
r 2
9,62
7,87
3 1
6,65
2,02
6 2
6,14
9,80
2 2
4,90
1,18
2
Tota
l int
eres
t inc
ome
11,
607,
773,
819
9,1
69,0
57,4
54
11,
082,
059,
031
8,7
28,6
99,8
31
As
per N
RB
Inte
rest
Inco
me
Rec
ogni
tion
Gui
delin
e, th
e in
tere
st a
mou
nt o
f NPR
. 32,
210,
184.
75 h
as b
een
reve
rsed
and
cre
dite
d to
Inte
rest
Sus
pens
e du
ring
the
repo
rtin
g pe
riod.
Inte
rest
exp
ense
4.30
Inte
rest
exp
ense
s in
clud
e in
tere
st a
ccru
ed o
n de
posi
ts c
olle
cted
and
deb
t sec
uriti
es is
sued
. Det
ails
pre
sent
ed a
s fo
llow
s:
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Due
to b
ank
and
fi nan
cial
inst
itutio
ns 6
9,56
6,21
7 3
8,30
7,12
2 6
9,56
6,21
7 3
8,30
7,12
2
Due
to N
epal
Ras
tra
Ban
k 1
7,21
7,47
6 3
2,55
0,94
7 1
7,21
7,47
6 3
2,55
0,94
7
Dep
osits
from
cus
tom
ers
6,5
99,6
09,4
95
5,7
60,8
02,4
30
6,5
32,5
87,1
97
5,7
16,3
30,9
42
Bor
row
ing
323
,435
,591
1
69,3
73,7
19
135
,757
,511
2
,400
,853
Deb
t sec
uriti
es is
sued
82,
909,
684
35,
095,
890
82,
909,
684
35,
095,
890
Subo
rdin
ated
liab
ilitie
s -
-
-
-
Othe
r -
-
-
-
Tota
l int
eres
t exp
ense
7,0
92,7
38,4
63
6,0
36,1
30,1
08
6,8
38,0
38,0
85
5,8
24,6
85,7
53
Sinc
e de
cisi
ons
for t
hese
cas
es a
re p
endi
ng, d
ispu
ted
tax
amou
nt o
f NPR
175
,096
,180
men
tione
d ab
ove
has
been
dis
clos
ed a
s co
ntin
gent
liab
ility
on
Inco
me
Tax
and
no p
rovi
sion
for a
ddi-
tiona
l lia
bilit
y ha
s be
en m
ade.
A
s of
the
fi sca
l yea
r en
d 20
75/7
6, s
elf-
Ass
essm
ent R
etur
ns fi
led
by N
MB
Ban
k Lt
d. fo
r FY
207
2/73
to 2
074/
75 a
nd b
y er
stw
hile
Cle
an E
nerg
y D
evel
opm
ent B
ank
Ltd.
for
FY 2
071/
72 to
20
72/7
3 an
d by
ers
twhi
le B
hrik
uti D
evel
opm
ent B
ank
Ltd.
for F
Y 20
72/7
3 is
yet
to b
e re
asse
ssed
by
Larg
e Ta
x Pa
yers
Offi
ce.
b.
In th
e se
cond
qua
rter
of F
Y 20
15/1
6, th
e B
ank
had
purc
hase
d la
nd w
ith a
n ar
ea o
f 80
Ann
as (2
,543
sq
met
er) f
or N
PR 5
90 M
illio
n in
Kam
alad
i, K
athm
andu
. The
land
was
bou
ght t
hrou
gh
auct
ion
proc
ess
invo
lvin
g fo
ur fi
nanc
ial i
nstit
utio
ns. T
he p
revi
ous
owne
r of p
rope
rty
has
fi led
cas
e in
Kat
hman
du D
istr
ict C
ourt
for r
epea
l of a
uctio
n pr
oces
s.
www.nmbbanknepal.com86
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Fees
and
Com
mis
sion
Inco
me
4.31
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Loan
adm
inis
trat
ion
fees
-
-
-
-
Serv
ice
fees
489
,096
,397
3
83,7
27,2
29
341
,530
,916
2
49,4
16,5
09
Cons
ortiu
m fe
es 2
9,59
6,92
1 2
5,58
6,49
4 2
9,59
6,92
1 2
5,58
6,49
4
Com
mitm
ent f
ees
2,8
82,0
16
-
2,8
82,0
16
-
DD
/TT/
Swist
fees
19,
347,
569
13,
239,
368
19,
347,
569
13,
239,
368
Cred
it ca
rd/A
TM is
suan
ce a
nd re
new
al fe
es 3
9,08
8,34
3 3
4,87
7,23
4 3
9,08
8,34
3 3
4,87
7,23
4
Prep
aym
ent a
nd s
wap
fees
25,
663,
923
23,
986,
846
25,
663,
923
23,
986,
846
Inve
stm
ent b
anki
ng fe
es -
-
-
-
Ass
et m
anag
emen
t fee
s -
-
-
-
Bro
kera
ge fe
es 3
,087
,144
6
,579
,223
-
-
Rem
ittan
ce fe
es 2
0,91
7,81
8 2
4,98
2,25
4 2
0,91
7,81
8 2
4,98
2,25
4
Com
mis
sion
on
lette
r of c
redi
t 7
5,59
1,40
4 7
0,93
7,54
3 7
5,59
1,40
4 7
0,93
7,54
3
Com
mis
sion
on
guar
ante
e co
ntra
cts
issu
ed 2
50,9
84,0
09
180
,943
,955
2
50,9
84,0
09
180
,943
,955
Com
mis
sion
on
shar
e un
derw
ritin
g/is
sue
-
-
-
-
Lock
er re
ntal
2,7
05,2
20
2,5
82,6
65
2,7
05,2
20
2,5
82,6
65
Othe
r fe
es a
nd c
omm
issi
on in
com
e: -
-
Bill
s Pu
rcha
se a
nd D
isco
unt
-
-
-
-
Colle
ctio
n Fe
e 9
,408
,164
1
4,56
8,25
1 9
,408
,164
1
4,56
8,25
1
Age
ncy
Com
mis
sion
13,
385,
760
11,
623,
876
13,
385,
760
11,
623,
876
Othe
rs 1
77,4
72,3
14
145
,983
,371
1
72,4
28,8
03
141
,505
,074
Tota
l fee
s an
d Co
mm
issi
on In
com
e 1
,159
,227
,002
9
39,6
18,3
08
1,0
03,5
30,8
66
794
,250
,068
NMB Annual Report-2018/19 87
Fees
and
com
mis
sion
exp
ense
4.32
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
ATM
man
agem
ent f
ees
39,
410,
044
35,
803,
750
39,
410,
044
35,
803,
750
VISA
/Mas
ter c
ard
fees
22,
801,
865
7,7
82,0
37
22,
801,
865
7,7
82,0
37
Gua
rant
ee c
omm
issi
on -
-
-
-
Bro
kera
ge -
-
-
-
DD
/TT/
Swist
fees
8,5
85,2
84
-
8,5
85,2
84
5,1
59,5
36
Rem
ittan
ce fe
es a
nd c
omm
issi
on -
-
-
-
Othe
r fee
s an
d co
mm
issi
on e
xpen
se 3
0,62
1,49
7 2
6,34
1,05
2 2
3,15
8,07
7 1
3,96
2,70
5
Tota
l fee
s an
d Co
mm
issi
on E
xpen
se 1
01,4
18,6
91
69,
926,
838
93,
955,
270
62,
708,
027
Net
trad
ing
inco
me
4.33
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Chan
ges
in fa
ir va
lue
of tr
adin
g as
sets
-
-
-
-
Gai
n/lo
ss o
n di
spos
al o
f tra
ding
ass
ets
-
-
-
-
Inte
rest
inco
me
on tr
adin
g as
sets
-
-
-
-
Div
iden
d in
com
e on
trad
ing
asse
ts -
-
-
-
Gai
n/lo
ss fo
reig
n ex
chan
ge tr
ansa
tion
352
,049
,490
2
99,6
05,9
83
352
,049
,490
2
99,6
05,9
83
Othe
r -
-
-
-
Net
trad
ing
inco
me
352
,049
,490
2
99,6
05,9
83
352
,049
,490
2
99,6
05,9
83
www.nmbbanknepal.com88
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Othe
r op
erat
ing
inco
me
4.34
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Fore
ign
exch
ange
reva
uatio
n ga
in 8
8,01
2,37
2 6
,926
,498
8
8,01
2,37
2 6
,926
,498
Gai
n/lo
ss o
n sa
le o
f inv
estm
ent s
ecur
ities
2,8
70,7
41
3,2
37,8
86
-
920
,805
Fair
valu
e ga
in/l
oss
on in
vest
men
t pro
pert
ies
-
-
-
-
Div
iden
d on
equ
ity in
stru
men
ts
72,
599,
705
134
,100
,160
7
1,02
0,75
8 1
32,7
58,0
55
Gai
n/lo
ss o
n sa
le o
f pro
pert
y an
d eq
uipm
ent
35,
200,
614
6,5
94,3
15
35,
200,
614
6,5
99,6
56
Gai
n/lo
ss o
n sa
le o
f inv
estm
ent p
rope
rty
504
,476
3
,155
,000
5
04,4
76
3,1
55,0
00
Oper
atin
g le
ase
inco
me
-
-
2,1
72,9
66
2,1
37,3
44
Gai
n/lo
ss o
n sa
le o
f gol
d an
d si
lver
13,
462,
733
12,
464,
871
13,
462,
733
12,
464,
871
Othe
r -
4
91,7
65
-
-
Tota
l 2
12,6
50,6
41
166
,970
,494
2
10,3
73,9
19
164
,962
,228
Impa
irm
ent c
harg
e/(r
ever
sal)
for
loan
and
oth
er lo
sses
4.35
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Impa
irmen
t cha
rge/
(reve
rsal
) on
loan
and
adv
ance
s to
B/F
Is 8
,950
,143
6
,346
,579
8
,950
,143
6
,346
,579
Im
pairm
ent c
harg
e/(r
ever
sal)
on lo
an a
nd a
dvan
ces
to
cust
omer
167
,104
,939
(1
98,1
86,9
01)
157
,322
,491
(2
25,7
90,3
43)
Impa
irmen
t cha
rge/
(rev
ersa
l) on
fi na
ncia
l Inv
estm
ent
-
(207
,026
) -
(2
07,0
26)
Impa
irmen
t cha
rge/
(rev
ersa
l) on
pla
cem
ent w
ith b
anks
and
fi n
anci
al in
stitu
tions
-
-
-
-
Impa
irmen
t cha
rge/
(rev
ersa
l) on
pro
pert
y an
d eq
uipm
ent
-
-
-
-
Impa
irmen
t cha
rge/
(rev
ersa
l) on
goo
dwill
and
inta
ngib
le
asse
ts -
-
-
-
Impa
irmen
t cha
rge/
(rev
ersa
l) on
inve
stm
ent p
rope
rtie
s -
-
-
-
Tota
l 1
76,0
55,0
82
(192
,047
,347
) 1
66,2
72,6
34
(219
,650
,789
)
NMB Annual Report-2018/19 89
Pers
onne
l Exp
ense
4.36
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Sala
ry 4
97,3
02,0
46
381
,101
,707
4
33,6
15,9
83
332
,360
,603
Allo
wan
ces
404
,821
,146
3
40,0
47,1
78
335
,490
,961
2
83,2
80,0
22
Gra
tuity
exp
ense
57,
559,
486
39,
578,
609
58,
175,
295
35,
893,
037
Prov
iden
t fun
d 4
1,15
0,81
4 3
3,72
5,71
1 3
5,95
1,63
2 2
9,93
5,35
8
Uni
form
-
12,
323
-
12,
323
Trai
ning
& d
evel
opm
ent e
xpen
se 3
2,91
2,73
3 2
5,09
0,61
8 2
8,30
4,66
8 2
2,60
4,30
3
Leav
e en
cash
men
t 1
14,1
24,8
12
53,
990,
977
105
,465
,657
5
3,52
8,55
1
- Si
ck L
eave
Exp
ense
s 4
0,59
3,61
8 2
8,22
4,87
4 3
2,60
3,47
2 2
8,13
4,66
4
-Lea
ve F
are
Expe
nses
50,
599,
234
25,
766,
104
50,
119,
157
25,
393,
888
-Hom
e Le
ave
Expe
nses
22,
931,
960
-
22,
743,
028
-
Med
ical
-
-
-
-
Insu
ranc
e 1
,137
,739
1
,125
,280
-
-
Empl
oyee
s in
cent
ive
1,3
00,0
96
4,9
32,0
00
-
40,
000
Cash
-set
tled
shar
e-ba
sed
paym
ents
-
-
-
-
Pens
ion
expe
nse
-
-
-
-
Fina
nce
expe
nse
unde
r NFR
S 2
1,87
8,72
1 (5
1,95
4,69
9) 2
1,87
8,72
1 (5
1,95
4,69
9)
Othe
r ex
pens
es re
late
d to
sta
ff 3
6,52
3,67
8 3
1,14
9,81
7 3
6,02
1,26
1 3
0,72
4,26
4
- R
ecru
itmen
t and
Sel
ectio
n Ex
pens
es 2
05,1
78
201
,837
-
1
57,9
37
- St
aff W
elfa
re E
xpen
ses
36,
318,
500
30,
947,
980
36,
021,
261
30,
566,
327
Subt
otal
1,2
08,7
11,2
70
858
,799
,520
1
,054
,904
,178
7
36,4
23,7
62
Empl
oyee
s bo
nus
378
,471
,332
2
99,1
40,3
40
360
,889
,315
2
85,1
46,6
74
Gra
nd to
tal
1,5
87,1
82,6
02
1,1
57,9
39,8
60
1,4
15,7
93,4
93
1,0
21,5
70,4
35
www.nmbbanknepal.com90
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Othe
r op
erat
ing
expe
nse
4.37
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Dire
ctor
s' fe
e 4
,360
,655
3
,464
,850
3
,207
,000
2
,250
,000
D
irect
ors'
exp
ense
2,0
99,0
53
1,7
76,7
81
2,0
82,4
88
1,1
60,7
42
Aud
itors
' rem
uner
atio
n 1
,539
,393
1
,431
,710
1
,118
,700
1
,118
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Ot
her a
udit
rela
ted
expe
nse
1,1
01,8
64
537
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3
00,1
82
343
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Pr
ofes
sion
al a
nd le
gal e
xpen
se 3
,505
,675
5
,486
,234
3
,344
,731
5
,486
,234
Offi
ce
adm
inis
trat
ion
expe
nse
426
,603
,409
3
12,5
37,0
44
395
,614
,463
2
90,8
36,0
03
a. E
lect
ricity
and
Wat
er 3
2,62
7,62
9 2
9,60
1,08
4 3
1,42
0,68
7 2
8,12
2,43
4 b.
Insu
ranc
e 1
7,85
4,90
2 1
4,53
5,45
4 1
7,57
8,04
2 1
4,30
3,56
4 c.
Pos
tage
, Tel
ex, T
elep
hone
, Fax
59,
387,
524
49,
498,
136
56,
205,
013
46,
448,
634
e. O
ffi ce
Equ
ipm
ent,
Furn
iture
and
Rep
air
3,7
24,5
31
4,7
64,4
85
2,7
74,5
38
3,9
76,4
33
f. Tr
avel
ling
Allo
wan
ces
and
Expe
nses
32,
427,
002
27,
872,
469
21,
905,
537
18,
931,
292
g. S
tatio
nery
and
Prin
ting
45,
633,
378
30,
731,
834
40,
910,
154
27,
328,
599
h. P
erio
dica
ls a
nd B
ooks
637
,480
6
95,8
94
524
,039
5
75,5
69
i. Offi
ce
Expe
nses
49,
315,
657
32,
093,
240
48,
606,
865
31,
440,
073
j. Ve
hicl
e fu
el 2
7,43
8,31
8 2
1,77
7,92
2 2
6,73
3,57
8 2
1,64
6,34
9 k.
Out
sour
ce S
taff
Expe
nses
34,
877,
547
17,
824,
378
27,
768,
631
16,
244,
341
l. Se
curit
y Ex
pens
es 1
07,0
35,9
22
72,
666,
519
106
,630
,907
7
2,25
2,10
7 m
. Rep
air a
nd M
aint
enan
ce 1
5,64
3,52
0 1
0,47
5,62
8 1
4,55
6,47
1 9
,566
,608
Op
erat
ing
leas
e ex
pens
e 1
49,1
78,2
41
123
,756
,305
1
34,9
65,7
10
113
,096
,710
Op
erat
ing
expe
nse
of in
vest
men
t pro
pert
ies
-
-
-
-
Corp
orat
e so
cial
resp
onsi
bilit
y ex
pens
e 5
,679
,038
1
,767
,532
5
,678
,558
1
,663
,002
On
erou
s le
ase
prov
isio
ns -
-
-
-
Ot
hers
170
,086
,169
1
91,9
65,0
55
162
,349
,575
1
73,4
38,8
38
Ann
ual G
ener
al M
eetin
g Ex
pens
es 3
,428
,634
3
36,7
75
3,0
55,9
69
-
Ente
rtai
nmen
t/B
usin
ess
Prom
otio
n 2
2,88
9,21
3 2
2,29
4,79
3 2
2,45
2,35
8 2
2,29
4,79
3 A
dver
tisem
ents
73,
970,
329
85,
590,
263
73,
269,
284
84,
901,
483
Don
atio
ns 4
3,44
5 8
5,67
0 1
5,00
0 4
5,00
0 M
embe
rshi
p Fe
e 1
1,47
4,24
4 7
,109
,050
1
0,42
4,24
4 6
,384
,050
Ca
rd T
rans
actio
n Ch
arge
s -
-
-
-
B
ank
Char
ges
and
Com
mis
sion
306
,020
5
30,8
00
306
,020
5
30,8
00
Rat
es a
nd T
axes
7,9
15,3
01
7,2
96,7
17
6,8
84,2
16
7,0
24,4
59
Dep
osit
Gua
rant
ee E
xpen
ses
23,
573,
388
20,
344,
993
23,
573,
388
20,
344,
993
IS A
udit-
Com
plia
nce
Expe
nses
1,1
91,4
58
113
,000
1
,191
,458
1
13,0
00
Dem
ater
ializ
atio
n Ex
pens
es -
-
-
-
Is
sue
And
Sur
veill
ance
Exp
ense
s 5
,765
,104
1
4,87
8,05
7 5
,765
,104
1
0,77
6,21
2 M
erge
r Exp
ense
s 4
33,8
62
-
433
,862
-
Ot
hers
19,
095,
171
33,
384,
937
14,
978,
672
21,
024,
048
Tota
l 7
64,1
53,4
98
642
,723
,322
7
08,6
61,4
06
589
,394
,199
NMB Annual Report-2018/19 91
Dep
reci
atio
n an
d A
mor
tisat
ion
4.38
Dep
reci
atio
n is
the
syst
emat
ic a
lloca
tion
of th
e de
prec
iabl
e am
ount
of a
n as
set o
ver i
ts u
sefu
l life
whi
le a
mor
tizat
ion
is th
e sy
stem
atic
allo
catio
n of
the
depr
ecia
ble
amou
nt o
f an
inta
ngi-
ble
asse
t ove
r its
use
ful l
ife. D
epre
ciat
ion
and
amor
tizat
ion
incl
ude
depr
ecia
tion
on p
lant
and
equ
ipm
ent a
nd a
mor
tizat
ion
of in
tang
ible
ass
ets.
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Dep
reci
atio
n on
pro
pert
y an
d eq
uipm
ent
174
,082
,276
1
49,7
93,2
66
163
,692
,664
1
41,8
41,5
03
Dep
reci
atio
n on
inve
stm
ent p
rope
rty
-
-
-
-
Am
ortis
atio
n of
inta
ngib
le a
sset
s 1
3,58
7,22
3 6
,194
,294
1
3,10
0,69
1 5
,853
,735
Tota
l 1
87,6
69,4
99
155
,987
,560
1
76,7
93,3
55
147
,695
,238
Non
ope
ratin
g in
com
e4.
39
The
inco
mes
that
hav
e no
dire
ct re
latio
nshi
p w
ith th
e op
erat
ion
of tr
ansa
ctio
ns a
re p
rese
nted
as
unde
r.
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Rec
over
y of
loan
writ
ten
off
17,
090,
672
43,
140,
193
17,
090,
672
43,
140,
193
Othe
r inc
ome
-
--
-
Tota
l 1
7,09
0,67
2 4
3,14
0,19
3 1
7,09
0,67
2 4
3,14
0,19
3
Non
ope
ratin
g ex
pens
e4.
40
The
expe
nse
that
has
no
dire
ct re
latio
nshi
p w
ith th
e op
erat
ion
of tr
ansa
ctio
ns a
re p
rese
nted
as
unde
r.
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Loan
writ
ten
off
17,
585,
901
37,
935,
379
17,
585,
901
37,
935,
379
Red
unda
ncy
prov
isio
n -
-
-
-
Expe
nse
of re
stru
ctur
ing
-
-
-
-
Othe
r exp
ense
23,
248
-
-
-
Tota
l 1
7,60
9,14
8 3
7,93
5,37
9 1
7,58
5,90
1 3
7,93
5,37
9
www.nmbbanknepal.com92
Not
es to
Con
solid
ated
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Inco
me
tax
expe
nse
4.41
The
bank
has
cal
cula
ted
Inco
me
Tax
as p
er In
com
e Ta
x Ac
t, 20
58. T
he b
ank
has
also
pai
d in
com
e ta
x on
inte
rest
sus
pens
e fo
r the
pre
viou
s ye
ar 2
075
due
to w
hich
eff e
ctiv
e ta
x ra
te is
hig
her i
n co
mpa
risio
n to
cur
rent
yea
r.
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Curr
ent t
ax e
xpen
se 1
,043
,451
,780
8
65,7
91,6
37
994
,167
,044
8
29,6
21,0
42
Curr
ent y
ear
1,0
41,8
13,2
51
860
,473
,515
9
92,5
28,5
15
824
,302
,920
Adj
ustm
ents
for p
rior y
ears
1,6
38,5
29
5,3
18,1
22
1,6
38,5
29
5,3
18,1
22
Def
erre
d ta
x ex
pens
e (7
,988
,980
) (1
16,3
72,0
96)
(3,4
39,2
37)
(117
,093
,734
)
Orig
inat
ion
and
reve
rsal
of t
empo
rary
diff
eren
ces
(7,9
88,9
80)
(116
,372
,096
) (3
,439
,237
) (1
17,0
93,7
34)
Chan
ges
in ta
x ra
te -
-
-
-
Rec
ogni
tion
of p
revi
ousl
y un
reco
gnis
ed ta
x lo
sses
-
-
-
-
Tota
l inc
ome
tax
expe
nse
1,0
35,4
62,8
00
749
,419
,541
9
90,7
27,8
07
712
,320
,180
4.41
.1: R
econ
cilia
tion
of ta
x ex
pens
e an
d ac
coun
ting
profi
t
Part
icul
ars
Gro
upN
MB
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Year
end
ed 3
1 A
shad
207
6Ye
ar e
nded
32
Ash
ad 2
075
Profi
t be
fore
tax
3,4
08,3
22,6
98
2,7
01,6
08,1
71
3,2
48,0
03,8
34
2,5
66,3
20,0
61
Tax
amou
nt a
t tax
rate
of 3
0 %
/25%
1,0
22,4
96,8
09
878
,585
,397
9
74,4
01,1
50
842
,221
,159
Add
: Tax
eff e
ct o
f exp
ense
s th
at a
re n
ot d
educ
tible
for t
ax
purp
ose
265
,093
,198
2
46,6
03,0
42
261
,507
,446
2
46,6
03,0
42
Less
: Tax
eff e
ct o
n ex
empt
inco
me
14,
674,
649
33,
195,
838
14,
674,
649
33,
195,
838
Add
/less
: Tax
eff e
ct o
n ot
her
item
s 2
31,1
02,1
07
231
,519
,086
2
28,7
05,4
33
231
,325
,443
Le
ss: T
ax e
ff ect
of e
xpen
ses
allo
wed
/Inc
ome
that
are
not
al
low
ed fo
r tax
pur
pose
228
,049
,023
2
28,1
29,2
73
225
,315
,620
2
27,9
35,6
30
Less
: Tax
eff e
ct o
f car
ried
forw
ard
loss
es 3
,053
,084
3
,389
,813
3
,389
,813
3
,389
,813
Tota
l inc
ome
tax
expe
nse
1,0
41,8
13,2
51
860
,473
,515
9
92,5
28,5
15
824
,302
,920
Eff e
ctiv
e ta
x ra
te30
.57%
31.8
5%30
.56%
32.1
2%
NMB Annual Report-2018/19 93
Stat
emen
t of d
istr
ibut
able
pro
fi t o
r los
sFo
r the
yea
r end
ed 3
1 A
shad
, 207
6 (1
6 Ju
ly 2
019
)(A
s pe
r NRB
Reg
ulat
ion)
(Am
ount
in N
PR)
Part
icul
ars
As
at 3
1 A
shad
207
6A
s at
32
Ash
ad 2
075
Net
pro
fi t o
r (lo
ss) a
s pe
r st
atem
ent o
f pro
fi t o
r lo
ss 2
,257
,276
,027
1
,853
,792
,753
App
ropr
iatio
ns:
a. G
ener
al re
serv
e (4
51,4
55,2
05)
(370
,758
,551
)
b. F
orei
gn e
xcha
nge
fl uct
uatio
n fu
nd (2
2,00
3,09
3) (1
,731
,624
)
c. C
apita
l red
empt
ion
rese
rve
(90,
452,
511)
(90,
999,
503)
d. C
orpo
rate
soc
ial r
espo
nsib
ility
fund
(22,
572,
760)
(18,
537,
928)
e. E
mpl
oyee
s' tr
aini
ng fu
nd -
-
f. In
vest
men
t Adj
ustm
ent R
eser
ve -
-
Prof
it or
(los
s) b
efor
regu
lato
ry a
djus
tmen
t 1
,670
,792
,457
1
,371
,765
,147
Reg
ulat
ory
adju
stm
ent :
a. In
tere
st re
ceiv
able
(-)/
prev
ious
acc
rued
inte
rest
rece
ived
(+)
(368
,638
,165
) (2
22,6
79,1
76)
b. S
hort
loan
loss
pro
visi
on in
acc
ount
s (-
)/re
vers
al (+
) -
-
c. S
hort
pro
visi
on fo
r pos
sibl
e lo
sses
on
inve
stm
ent (
-)/r
ever
sal (
+)
d. S
hort
loan
loss
pro
visi
on o
n N
on B
anki
ng A
sset
s (-
)/re
sers
al (+
) (4
3,14
1,23
5) (5
9,77
4,62
7)
e. D
efer
red
tax
asse
ts re
cogn
ised
(-)/
reve
rsal
(+)
(3,1
71,5
82)
(66,
869,
011)
f. G
oodw
ill re
cogn
ised
(-)/
impa
irmen
t of G
oodw
ill (+
) -
-
g. B
arga
in p
urch
ase
gain
reco
gnis
ed (-
)/re
sers
al (+
) -
-
h. A
ctur
ial l
oss
reco
gnis
ed (-
)/re
vers
al (+
) (8
88,9
69)
(48,
026,
502)
i. Ot
her (
+/-)
-
-
- Fa
ir va
lue
of in
vest
men
t sec
uriti
es 1
,513
,498
(7
,057
,296
)
Tota
l Adj
ustm
ents
(414
,326
,452
) (4
04,4
06,6
12)
Dis
trib
utab
le p
rofi t
or
(loss
) 1
,256
,466
,005
9
67,3
58,5
36
www.nmbbanknepal.com94
Unaudited Financial Results (Quarterly)Fourth Quarter ended of Fiscal Year 2018-19 (FY 2075/2076)
Rs. in '000'
Condensed Consolidated Statement of Financial PositionThis Quarter Ending Immediate Previous Year
Ending(Audited)Assets
Cash and cash equivalent 8,095,758 5,180,404
Due from Nepal Rastra Bank 10,818,537 7,260,195
Placement with Bank and Financial Institutions 2,177,098 276,407
Derivative fi nancial instruments 8,595,482 7,506,751
Other trading assets 340,390 321,720
Loan and advances to B/FIs 3,317,962 2,497,568
Loans and advances to customers 88,488,182 72,711,772
Investment securities 10,316,351 9,448,447
Current tax assets - -
Investment in susidiaries 248,552 248,552
Investment in associates - -
Investment property 102,916 59,775
Property and equipment 1,577,899 1,559,570
Goodwill and Intangible assets 115,409 22,054
Deferred tax assets 66,869 66,869
Other assets 1,206,735 4,458,384
Total Assets 135,468,139 111,618,467
Liabilities
Due to Bank and Financial Instituions 624,365 1,036,269
Due to Nepal Rastra Bank 3,203,523 660,072
Derivative fi nancial instruments 8,458,374 7,477,484
Deposits from customers 97,892,302 83,970,867
Borrowing 3,468,060 -
Current Tax Liabilities 9,599 60,418
Provisions 9,078 -
Deferred tax liabilities - -
Other liabilities 2,107,809 1,406,000
Debt securities issued 2,239,236 517,548
Subordinated Liabilities - -
Total liabilities 118,012,348 95,128,658
Equity
Share capital 9,618,163 7,603,291
Share premium 2,512,799 4,061,367
Retained earnings 1,792,975 2,339,182
Reserves 3,531,856 2,485,970
Total equity attributable to equity holders 17,455,791 16,489,809
Non-controlling interest - -
Total equity 17,455,791 16,489,809
Total liabilities and equity 135,468,139 111,618,467
NMB Annual Report-2018/19 95
Unaudited Financial Results (Quarterly)Fourth Quarter ended of Fiscal Year 2018-19 (FY 2075/2076)
Rs. in '000'
Condensed Consolidated Statement of Profi t or Loss Up to this QuarterUp to Corrosponding
Previous Year Quarter (Audited)
Interest income 11,104,234 8,728,700
Interest expense 6,838,038 5,824,686
Net interest income 4,266,196 2,904,014
Fees and Commission Income 1,003,531 794,250
Fees and commission expense 93,955 62,708
Net fee and commission income 909,576 731,542
Net interest, fee and commission income 5,175,771 3,635,556
Net trading income 352,049 299,606
Other operating income 210,374 164,962
Total operating income 5,738,195 4,100,124
Impairment charge/(reversal) for loans and other losses 163,122 (219,651)
Net operating income 5,575,073 4,319,775
Operating expense
Personnel expenses 1,419,153 1,021,570
Other operating expenses 700,390 589,394
Depreciation & Amortisation 176,793 147,695
Operating Profi t 3,278,736 2,561,115
Non operating income 17,091 43,140
Non operating expense 17,586 37,935
Profi t before income tax 3,278,241 2,566,320
Income tax expense
Current Tax 968,188 829,621
Deferred Tax expense/(Income) - (117,094)
Profi t for the period 2,310,053 1,853,793
Condensed Consolidated Statement of Comprehensive Income
Profi t/Loss for the period 2,310,053 1,853,793
Other Comprehensive lncome 625 (44,269)
Total Comprehensive lncome 2,310,678 1,809,524
Statement showing Net Profi t a� er Regulatory Adjustments:
Net Profi t for the period ended 31 Asadh 2076 2,310,053
Profi t required to be appropriated to statutory reserve (591,896)
Profi t required to be transfer to Regulatory Reserve (443,365)
Net Profi t for the period ended 31 Ashad 2076 available for distribution 1,274,793
www.nmbbanknepal.com96
Unaudited Financial Results (Quarterly)Fourth Quarter ended of Fiscal Year 2018-19 (FY 2075/2076)
Ratios Upto This Quarter (YTD) Up to Corrosponding Previous Year Quarter
Capital fund to RWA 15.32% 15.75%
Non performing loan (NPL) to toal loan 0.82% 0.88%
Total loan loss provision to Total NPL 184.52% 184.17%
Cost of Funds (YTD) 7.26% 7.46%
CCD Ratio 76.88% 77.72%
Base Rate 9.86% 10.70%
Average Interest Spread (Calculated as per NRB Directives)- Last Month of Quarter 4.26% 4.14%
Additional Informations:
Average Yield (YTD Average) 10.80% 10.91%
Return on Equity (Annualized) 13.61% 13.54%
Return on Assets (Annualized) 1.86% 1.80%
PE Ratio (Annualized) 15.86 16.38
Net-Worth per share (NPR) 181.49 216.88
Assets per share (NPR) 1,418.41 1,478.19
Liquidity Ratio (NLA) 28.28% 23.64%
NMB Annual Report-2018/19 97
Com
paris
on U
naud
ited
and
Aud
ited
Fina
ncia
l Sta
tem
ents
as
of F
Y 20
18-2
019
(FY
2075
/76)
R
s. in
'000
'
Stat
emen
t of F
inan
cial
Pos
ition
As
per
unau
dite
d Fi
nanc
ial
Stat
emen
t
As
per
Aud
ited
Fina
ncia
l St
atem
ent
Vari
ance
Rea
sons
for
Vari
ance
Ass
ets
In a
mou
ntIn
%(R
ound
ed o
ff )Ca
sh a
nd c
ash
equi
vale
nt 8
,095
,758
8
,096
,355
5
97
0%D
ue to
re-c
lass
ifi ca
tion
from
Pla
cem
ent w
ith B
FI's
Due
from
Nep
al R
astr
a B
ank
10,
818,
537
10,
829,
182
10,
644
0%D
ue to
adj
ustm
ent o
f rec
eiva
ble
of In
t. Su
bsid
y fr
om N
RB
and
pla
cem
ents
Plac
emen
t with
Ban
k an
d Fi
nanc
ial I
nstit
utio
ns 2
,177
,098
2
,172
,967
(4
,131
)0%
Due
to re
-cla
ssifi
catio
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www.nmbbanknepal.com98
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NMB Annual Report-2018/19 99
Signifi cant Accounting Policies to Consolidated Financial Statements
Financial Year 17 July 2018 to 16 July 2019 (1 Shrawan 2075 to 31 Ashad 2076)
1. General Information
1.1 Reporting Entity:
NMB Bank Limited (hereinast er referred to as “the Bank”) is a limited liability company domiciled in Nepal. The registered offi ce of the Bank is G.P.O. Box 11543, Babar Mahal, Kathmandu, Nepal. The Bank has a primary listing in the Nepal Stock Exchange Limited, the only Stock Exchange in Nepal.
The Bank carries out commercial banking activities in Nepal licensed under the Bank and Financial Institutions Act, 2006 as Class A fi nancial institution in May 2008 and has been operating in the Nepalese Financial market for over twenty four years.
1.2 Subsidiary:
a. NMB Capital Ltd. (NMBCL) is a 100% subsidiary company of the Bank and was incorporated on September 17, 2010 as a public limited company as per the Companies Act 2063. It is into Merchant and investment banking licensed by Securities Board of Nepal under the Securities Businessperson (Merchant Banker) Regulations, 2008.
b. NMB Microfi nance Bittiya Sanstha Ltd. (NMBMF) is incorporated as a public limited company under Companies Act, 2063 and licensed by Nepal Rastra Bank as “D” Class fi nancial institution having Nation Wide working area to operate its microfi nance program under Bank and Financial Institution Act 2006. As at the Balance Sheet date, the bank holds 51% controlling interest in the NMBMF.
The fi nancial year of both of the subsidiaries is same as that of the Bank ending on July 16, 2019
1.3 “The Group” represents The Bank and the subsidiaries.
1.4 Approval of Financial Statements:
The consolidated fi nancial statements of the group for the year ended 16 July 2019 have been authorized by the Board of Directors in accordance with its resolution dated 10 November 2019 and the Board of Directors have recommended for its approval by the forthcoming Annual General Meeting
www.nmbbanknepal.com100
2. Summary ovf Signifi cant Accounting Policies
The principal accounting policies applied in the preparation of the fi nancial statements of the Bank are set out below. Unless otherwise stated, these policies have been consistently applied to all the years presented herein.
2.1 Basis of preparation
The Consolidated Financial Statements have been prepared in accordance with the Nepal Financial Reporting Standard (NFRS) issued by the Nepal Accounting Standards Board (NASB) except otherwise stated, comply with the requirements of Companies Act 2063 and and also provide appropriate disclosures required under regulations of the Securities Exchange Board of Nepal (SEBON). The fi nancial statements have been prepared in accordance with the accrual basis.
The cash fl ow statement has been prepared using the direct method whereby operating profi t is adjusted for eff ects of non-cash transactions such as depreciation and loan losses. The cash fl ows are classifi ed by operating, investing and fi nancing activities.
The Group has opted for some certain carve outs which are briefl y described in Notes to Accounts. As a consequence of carve out adjustments, net profi t would have been impacted.
In preparing the Consolidated Financial Statement, the fi nancial statements of the Bank and the Subsidiary are combined line by line by adding together Assets, Liabilities, Equity, Income and Expenses. The consolidated fi nancial statements have been prepared in accordance with Nepal Financial Reporting Standards 10 “Consolidated Financial Statements”.
Para 8 of NFRS 10 outlines three conditions to be fulfi lled in order to establish control:
(a) Power over the investee;(b) Exposure, or rights, to variable returns from its involvement with the investee; and(c) The ability to use its power over the investee to aff ect the amount of the investor’s returns
Non-Controlling Interest (NCI) refers to ownership of a company, which does not give the shareholder the control of the company.
2.2 Going Concern
The Board of Directors have made an assessment of Bank’s ability to continue as a going concern and are satisfi ed that it has the resources to continue in business for the foreseeable future. Furthermore, the board is not aware of any material uncertainties that may cast signifi cant doubt upon Bank’s ability to continue as a going concern and they do not intend either to liquidate or to cease operations of it. Hence, the Financial Statements are continued to be prepared on the going concern basis.
2.3 Responsibility for Financial Statements
As stated in paragraph 6 of NAS 01 “Presentation of Financial Statements” read along with Section 108(2) of the Company Act, 2006 the Board of Directors is responsible for the preparation of fi nancial statements of the Bank. The Board of Directors acknowledges this responsibility. The Financial statements include the following components:
NMB Annual Report-2018/19 101
(a) Consolidated Statement of Financial Position(SOFP) stating the fi nancial position of the Bank and the Group as at the end of reporting period;
(b) Consolidated Statement of Profi t and Loss (SOPL) and Consolidated Statement of Other Comprehensive Income (SOCI) stating the fi nancial performance of the Bank and the Group for the reported period ended.
(c) Consolidated Statement of Cash Flow Statement (SOCF) stating the ability of Bank and the Group to generate Cash and Cash Equivalent.
(d) Consolidated Statement of Changes in Equity (SOCE) stating all the changes in Equity of the Bank and the Group during the reporting period.
(e) Notes to the Consolidated Financial Statements comprising summary of Principal Accounting Policies and explanatory notes that are of signifi cant importance to the users of Financial Statements.
2.4 Foreign Exchange Transactions
Assets and liabilities denominated in foreign currencies as on the balance sheet date have been converted into local currency at mid-point exchange rates published by Nepal Rastra Bank ast er adjustment for eff ective trading rate.
Net diff erence arising from the conversion of foreign currency assets and liabilities is accounted for as revaluation gain/loss under Exchange Gain in Schedule 4.34. 25% of such revaluation gain is transferred to Exchange Fluctuation Reserve through Statement of Change in Equity as per NRB Directives.
Income realised from the diff erence between buying and selling rates of Foreign Exchange is accounted for as trading gains and shown as “Gain/loss foreign exchange transaction" under "Net Trading Income" in Schedule 4.33
2.5 Functional and presentation currency
The Consolidated fi nancial statements are presented in Nepalese Rupees (NPR), the functional currency of Group entities. The Consolidated fi nancial statements are prepared in the formats implemented by Nepal Rastra Bank and the assets and liabilities are presented in the order of liquidity in the statement of fi nancial position. The Income and expenses are classifi ed ‘by nature’ in the presentation of statement of profi t or loss. All fi gures in the accounts have been rounded and consequently the sum of individual fi gures may deviate from the presented sum fi gure. Furthermore, all percentages are subject to possible rounding diff erences.
2.6 Signifi cant accounting judgements and estimates
As part of the process of preparing the fi nancial statements in conformity with NFRS, the Bank’s management is required to make certain judgements, estimates and assumptions that may aff ect the Bank’s profi ts, its fi nancial position and other information presented in the Annual Report. These estimates are based on available information and the judgements made by the Bank’s management. Actual outcomes may deviate from the assessments made, and such deviations may at times be signifi cant.
The Bank uses various valuation models and techniques to estimate the fair values of assets and liabilities. There are signifi cant uncertainties related to these estimates and these estimates are highly dependent on market data, such as the level of interest rates, currency rates and other factors. The uncertainties related to these estimates
www.nmbbanknepal.com102
are refl ected mainly in the statement of fi nancial position. The bank undertakes continuous development in order to improve the basis for fair value estimates, with regard to both modelling and market data. Changes in estimates resulting from refi nements in assumptions and methodologies are refl ected in the period in which the enhancements are fi rst applied. Judgements and estimates are also associated with impairment testing of loans and claims.
2.7 Change in Accounting Policies
The bank has changed its accounting policies when required, to ensure compliance with NFRS. The eff ect of change in accounting policies at the date of transition has been given to the retained earnings (and reserves, if applicable)
2.8 Materiality and Aggregation
In compliance with Nepal Accounting Standard - NAS 01 (Presentation of Financial Statements), each material class of similar items is presented separately in the Financial Statements. Items of dissimilar nature or functions too are presented separately unless they are immaterial. Financial Assets and Financial Liabilities are off set and the net amount reported in the Statement of Financial Position only when there is a legally enforceable right to off set the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liability simultaneously. Income and expenses are not off set in the Statement of Profi t or Loss unless required or permitted by an Accounting Standard.
2.9 New Standards in Issue but not yet eff ective
For the reporting of fi nancial instruments, NAS 32 Financial Instruments, Presentation, NAS 39 Financial Instruments Recognition and Measurements and NFRS 7 Financial Instruments – Disclosures have been applied. NRFS 9 has been complied for the classifi cation of Financial Instruments. A number of new standards and amendments to the existing standards and interpretations have been issued by IASB ast er the pronouncements of NFRS with varying eff ective dates. Those become applicable when ASB Nepal incorporates them within NFRS.
Besides, IASB is yet to issue internationally applied standards namely NFRS 9 ‘Financial Instruments’, NFRS 15 – Revenue from Contracts with Customers and NFRS 16 – Leases
2.10 Basis for classifi cation and measurement
Financial assets are measured at initial recognition at fair value, and are classifi ed and subsequently measured at fair value through profi t or loss (FVTPL), fair value through other comprehensive income (FVOCI) or amortized cost based on our business model for managing the fi nancial instruments and the contractual cash fl ow characteristics of the instrument.
The fi nancial statements have been prepared on the historical cost basis, except for:
- As per NFRS 9 “Financial Instruments”, Investment Securities (investment in equity shares and mutual funds) are measured at fair value.
- Derivative Financial Instruments are measured at fair value (FVTPL).- Non-derivative fi nancial instruments at fair value through profi t or loss are measured at fair value- Inventories are measured at cost or net realizable value whichever is lower.
NMB Annual Report-2018/19 103
- As per NAS 40 ‘Investment Property’ (land and building acquired as non banking assets) are measured at fair value.
- As per NAS 19 “Employee Benefi ts”, Liabilities for employee defi ned benefi t obligations and liabilities for long service leave are measured at fair value.
Financial assets at amortised cost
An investment is classifi ed at “amortised cost” only if it is not designated as a FVTPL and both of the following criteria are met: the objective of the Bank’s business model is to hold the assets in order to collect the contractual cash fl ows, and the contractual terms of the fi nancial assets must give rise on specifi ed dates to cash fl ows that are only payments of principal and interest on the principal amount outstanding.
Financial assets at fair value
If either of the two criteria above is not met, the asset cannot be classifi ed in the amortised cost category and must be classifi ed at fair value.
Determination of fair value
The fair value of fi nancial instruments, including derivative instruments that are traded in a liquid market, is the bid or off ered closing price on the balance sheet date. Where the fair values cannot be derived from active markets, they are determined using a variety of valuation techniques which include the use of mathematical models. The input to these models is taken from observable market data where possible. Fair values are measured using diff erent valuation models and techniques. This process involves determining future expected cash fl ows, which can then be discounted to the balance sheet date. The estimation of future cash fl ows for these instruments is subject to assumptions on market data, the fair value estimate may therefore be subject to variations and may not be realisable in the market. Under diff erent market assumptions, the values could also diff er signifi cantly.
The Bank measures fair values using the following fair value hierarchy, which refl ects the signifi cance of the inputs used in making the measurements:
Level 1: Quoted market prices (unadjusted) in an active market for identical instruments.
Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments, quoted prices for identical or similar instruments in markets that are considered less than active or other valuation techniques where all signifi cant inputs are directly or indirectly observable from market data.
Level 3: Valuation techniques using signifi cant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and where the unobservable inputs have a signifi cant eff ect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where signifi cant unobservable adjustments or assumptions are required to refl ect diff erences between the instruments.
www.nmbbanknepal.com104
2.11 Financial assets and fi nancial liabilities
Financial assets refer to assets that arise from contractual agreements on future cash fl ows or from owning equity instruments of another entity. Since fi nancial assets derive their value from a contractual claim, these are non physical in form and are usually regarded as being more liquid than other tangible assets.
Financial liabilities are obligations that arise from contractual agreements and that require settlement by way of delivering cash or another fi nancial asset. Settlement could also require exchanging other fi nancial assets or fi nancial liabilities under potentially unfavourable conditions. Settlement may also be made by issuing own equity instruments.
2.12 Recognition and de-recognition of fi nancial instruments
Financial instruments are recognised in the statement of fi nancial position on a settlement date basis, except for derivative instruments, which are recognized on a trade date basis.
A fi nancial asset is derecognised when the contractual rights to the cash fl ows from the fi nancial asset expire.
A fi nancial liability is derecognised from the statement of fi nancial position when the obligation specifi ed in the contract is discharged, cancelled or expires.
2.13 Business Combination
The Group accounts for business combinations using the acquisition method when control is transferred to the Group as per NFRS 3. The consideration transferred in the acquisition is generally measured at fair value, as are the identifi able net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profi t or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
2.14 Off setting
A fi nancial asset and a fi nancial liability are off set and the net amount recognised only where there is a legal right to do so and the intention is to settle on a net basis.
2.15 Cash and cash equivalents
Cash and cash equivalents comprise monetary assets and placements with original maturities of three months or less, calculated from the date the acquisition and placements were made.
Cash and cash equivalents are classifi ed as fi nancial asset and are measured at amortized cost in SoFP.
Restricted deposits are not included in cash and cash equivalents. These are measured at amortized cost and presented as a line item on the face of consolidated Statement of Financial Position (SoFP).
NMB Annual Report-2018/19 105
2.16 Impairment
Impairment of fi nancial assets
The Bank assesses at each reporting date whether there is objective evidence that a fi nancial asset or group of fi nancial assets is impaired. A fi nancial asset or a group of fi nancial assets is impaired and impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or more events occurring ast er the initial recognition of the asset (a loss event), and that loss event (or events) has an impact on the estimated future cash fl ows of the fi nancial asset or group of fi nancial assets that can be reliably estimated.
The Bank considers the following factors in assessing objective evidence of impairment:
- a signifi cant fi nancial diffi culty of the issuer or obligor;
- a breach of contract, such as a default or delinquency in interest or principal payments;
- it becoming probable that the borrower will enter bankruptcy or other fi nancial reorganization;
- Where observable data indicate that there is a measurable decrease in the estimated future cash fl ows from a group of fi nancial assets since the initial recognition of those assets, although the decrease cannot yet be identifi ed with the individual fi nancial assets in the group, including adverse changes in repayment patterns or economic conditions that correlate with defaults.
Assets carried at amortised cost
Financial assets carried at amortised cost (such as amounts due from Banks, loans and advances to customers as well as held–to–maturity investments are impaired, and impairment losses are recognized, only if there is objective evidence as a result of one or more events that occurred ast er the initial recognition of the asset. The amount of the loss is measured as the diff erence between the asset's carrying amount and the deemed recoverable value of loan.
The recoverable value of loan is estimated on the basis of realizable value of collateral (value of collateral is considered ast er hair cut prescribed by NRB) and the conduct of the borrower/past experience of the bank. Assets that are individually assessed and for which no impairment exists are grouped with fi nancial assets with similar credit risk statistics and collectively assessed for impairment. The credit risk statistics for each group of the loan and advances are determined by management prudently being based on the past experience.
Subsequent reversal of impairment loss, due to factors such as an improvement in the debtor’s credit rating, is recognized in the statement of profi t or loss. The reversal shall not result in a carrying amount of the fi nancial asset that exceeds what the amortized cost would have been had the impairment not been recognized at the date the impairment is reversed. Financial assets (and the related impairment allowance accounts) are written off either partially or in full, when there is no realistic prospect of recovery. Where fi nancial assets are secured, this is generally ast er receipt of any proceeds from the realization of security. If a future write–off is later recovered, the recovery is credited to the ’Income Statement’.
At each reporting date the Bank assesses whether there is any indication that an asset may have been impaired. If such indication exists, the recoverable amount is determined. For individual impairment, bank considers Top 50 loan clients and loans above delinquency of 90 days.
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2.17 Derivative assets and derivative liabilities
Derivative assets and derivative liabilities (derivatives) create rights and obligations that have the eff ect of transferring between the parties to the instrument one or more of the fi nancial risks inherent in an underlying primary fi nancial instrument. However, they generally do not result in a transfer of the underlying primary fi nancial instrument on inception of the contract, nor does such a transfer necessarily take place on maturity of the contract.
Derivative fi nancial instruments meet the defi nition of a fi nancial instrument and are accounted for as derivative fi nancial asset or derivative fi nancial liability measured at FVTPL and corresponding fair value changes are recognized in profi t or loss.
2.18 Deposits from customers and BFIs and Debt Securities
These are classifi ed as fi nancial liabilities measured at amortized cost.
2.19 Revenue recognition
Revenue is recognized only when it is probable that the economic benefi ts associated with the transaction will fl ow to the entity. In some cases, this may not be probable until the consideration is received or until an uncertainty is removed.
Revenue is derived substantially from banking business and related activities and comprises net interest income and non-interest income. Income is recognised on an accrual basis in the period in which it accrues. The Group applies NAS 18 – “Revenue” in the accounting of revenue, unless otherwise stated.
a. Net interest income Interest income and expenses are recognised in profi t or loss for all interest-bearing instruments on an accrual
basis using the eff ective interest method. The eff ective interest rate is the rate that exactly discounts the expected estimated future cash payments and receipts through the expected life of the fi nancial asset or liability. Where fi nancial assets have been impaired, interest income continues to be recognised on the impaired value, based on the original eff ective interest rate.
The interest income has been recognized as per NRB Guidelines on Interest Income Recognition.
b. Fees and commission income Fees and commission income is generally recognised when the related services are provided or on execution of
a signifi cant act. Fees charged for servicing a loan are recognised as revenue as the service is provided.
c. Dividend Income Dividend is recognised as income when the right to receive the dividend is established. For bonus shares, the
numbers of shares alone are increased without any change in the cost price of shares.
d. Net Trading Gain The Group presents all accrued interest, dividend, unrealized fair value changes and disposal gains or losses in
respect of trading assets and liabilities under this head. The Group also presents foreign exchange trading gains or losses arising on foreign exchange buy and sell transactions under trading income.
NMB Annual Report-2018/19 107
2.20 Interim Reports
Interim reports corresponding to the fi nancial statements reported had been reported in accordance with the regulatory reporting requirements. Those statements have been published.
2.21 Discounting
Discounting has been applied where assets and liabilities are non-current and the impact of the discounting is material.
2.22 Limitation of NFRS implementation
Wherever the information is not adequately available and the cost to develop the same would exceed the benefi t derived, such exception to NFRS implementation has been noted and disclosed in respective sections.
2.23 Signifi cant changes from the policies adopted in the past
Signifi cant changes from the accounting policies adopted under previous GAAP (erstwhile Nepal Accounting Standards and directives issued by Nepal Rastra bank) and the adoption of NFRS has been disclosed in the respective segments, including the impact.
2.24 Property, plant and equipment (PPE) and Intangible Assets
a. Property, plant and equipment and Intangible assets (sost ware) are stated at cost less accumulated depreciation (Cost Model)
b. Land is not depreciated. Depreciation of others is charged to Statement of Profi t and Loss on Straight Line method over the useful life of those assets. The estimated useful life of the assets are as follows:
Assets Estimated Life Rate of DepreciationBuilding 40 years 2.5%Offi ce equipment 7 years 14.28%Computers 5 years 20%Furniture & Fixtures 7 years 14.28%Vehicles 5 to 7 years 20%/ 14.28%Intangible Assets/sost ware 5 Years
c. Leasehold improvements are capitalised at cost and amortised over period of lease.
d. Intangible assets (sost ware) are capitalised and amortised over the life of assets determinable or best estimated.
e. Depreciation on property, plant and equipment sold or disposed off during the year is charged up to the date of sales and gain or loss on the sales transaction is accounted for.
f. Sost ware costs are amortized over their estimated useful lives from the period of purchase.
g. Assets with a unit value of NPR 10,000 or less are expensed-off during the year of purchase irrespective of its useful life.
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2.25 Investment property
Investment properties are land or building or both other than those classifi ed as property and equipment under NAS 16 – “Property, Plant and Equipment”; and assets classifi ed as non-current assets held for sale under NFRS 5 – “Non-Current Assets Held for Sale and Discontinued Operations”. The Group has recognized as investment property all land or land and building acquired as non banking assets.
Non banking assets (only land and building) are initially recognized at fair value. Since it is not intended for owner-occupied use, a depreciation charge is not raised.
2.26 Retirement Benefi ts
The Bank off ers retirement benefi ts to its confi rmed employee, mainly provident fund, gratuity and accumulated sick leave, all payable at the time of separation from service.
a. Provident fund
Provident fund is recognised at the time of contribution to the fund which is independent to the Bank.
b. Gratuity
Provision for gratuity is made on the basis of actuarial valuation carried out by an Actuary as per the provisions of Nepal Accounting Standards. At the time of separation from service, cash payments are made to the employees and the amount is computed as per the Bank's Policy.
c. Accumulated sick leave
Provision for accumulated sick leave is made on the basis of actuarial valuation carried out by an Actuary as per the provisions of Nepal Accounting Standards. At the time of separation from service, cash payments are made to the employees and the amount is computed as per the Bank's Policy.
d. Accumulated home leave
Provision for accumulated home leave is made on the basis of actuarial valuation carried out by an Actuary as per the provisions of Nepal Accounting Standards. At the time of separation from service or eligible accumulated leaves, cash payments are made to the employees and the amount is computed as per the Bank's Policy.
2.27 Operating Lease
Leases where a signifi cant portion of the risks and rewards of ownership are retained by the lessor, are classifi ed as operating leases. The Group has applied NAS 17 – “Leases” and expense is recognized to Statement of Profi t or Loss (SoPL) on straight line basis considering adjusted incremental rent over the lease period.
2.28 Income Taxa. Current Income TaxProvision for current income tax is made in accordance with the provisions of the prevailing Income Tax Act, 2058 and Rules framed there under.
NMB Annual Report-2018/19 109
b. Deferred Tax
Deferred tax is recognised on the diff erences between the carrying amount of assets and liabilities in the fi nancial statements and corresponding tax bases used in the computation provided on temporary diff erences arising between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements. Deferred income tax is determined by using tax rates (and laws) that have been enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised where it is probable that future taxable profi t will be available against which the temporary diff erences can be utilised. Deferred tax related to temporary diff erences in opening balances is credited or charged directly to equity and subsequent year diff erences are recognised in the income statement together with the deferred gain or loss.
2.29 Segmental Reporting
An operating segment is a component of the bank that engages in business activities from which it earns revenues and incurs expenses, including revenues and expenses that relating to transactions with any of the bank’s other components, whose operating results are reviewed by the management to make decision about resource allocation to each segment and assess its performance.
The Bank is organised for management and reporting purposes into segments such as: Retail, SME and MSME, Corporate, Deprived, Treasury and Others. Income tax is managed on a group basis and are not allocated to operating segments. All transactions between segments are conducted on an arm’s length basis, with inter-segment revenue and costs being eliminated in “Others”. Support costs are also allocated to Retail, Corporate, SME and MSME, Deprived, Treasury and others based on Management’s estimates of the benefi ts accruing to these segments for the costs incurred.
2.30 Share capital and reserves
The Ordinary shares in the Bank are recognized at the amount paid per ordinary share. The holders of ordinary shares are entitled to one vote per share at general meetings of the bank and are entitled to receive the annual dividend payments. The various reserve headings are explained hereinast er:
a. General reserve
The Bank is required to appropriate a minimum 20% of current year’s net profi t into this heading each year until it becomes double of paid up capital and then ast er a minimum 10% of profi t each year. This reserve is not available for distribution to shareholders in any form and requires specifi c approval of the central bank for any transfers from this heading.
b. Exchange equalization reserve
The Bank is required to appropriate 25% of current year’s total revaluation gain (except gain from revaluation of Indian Currency) into this heading.
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c. Fair value reserve
This is a non-statutory reserve and is a requirement in the application of accounting policy for fi nancial assets. NFRS 9 requires that cumulative net change in the fair value of fi nancial assets measured at FVTOCI is recognized under fair value reserve heading until the fair valued asset is de-recognized. Any realized fair value changes upon disposal of the re-valued asset is reclassifi ed from this reserve heading to retained earnings.
d. Asset revaluation reserve
This is a non-statutory reserve and is a requirement in the application of accounting policy for non-fi nancial assets such as property, equipment, investment property and intangible assets that are measured following a re-valuation model. The Bank does not have any amount to present under asset revaluation reserve.
e. Capital Adjustment Fund
This is a statutory reserve and is a compliance requirement of NRB circular 12/072/73. The Bank is required to appropriate an amount equivalent to 100% of capitalized portion of interest income on borrowing accounts where credit facility was rescheduled or restructured, following the ast er eff ects of the great earthquake that struck the nation in April 2015. Fund in this account can be reclassifi ed to retained earnings upon full and fi nal repayment of the credit facility.
f. Corporate social responsibility fund
The Bank is required to appropriate an amount equivalent to 1% of net profi t into this fund annually. The fund is created towards funding the Bank’s corporate social responsibility expenditure during the subsequent year. Balance in this fund is directly reclassifi ed to retained earnings in the subsequent year to the extent of payments made under corporate social responsibility activities.
g. Investment adjustment reserve
The Bank is required to maintain balance in this reserve heading which is calculated at fi xed percentages of the cost of equity investments that are not held for trading. Changes in this reserve requirement are reclassifi ed to retained earnings.
h. Actuarial gain / loss reserve
This is a non-statutory reserve and is a requirement in the application of accounting policy for employee benefi ts. NAS 19 requires that actuarial gain or loss resultant of the change in actuarial assumptions used to value defi ned benefi t obligations be presented under this reserve heading. Any change in this reserve heading is recognized through other comprehensive income and is not an appropriation of net profi t.
i. Regulatory reserve
This is a non-free statutory reserve and is a requirement as prescribed in NRB directive. In the transition to NFRS from previous GAAP the Bank is required to reclassify all amounts that are resultant of re-measurement adjustments and that are recognized in retained earnings into this reserve heading. The amount reclassifi ed to this reserve includes re-measurement adjustments such as interest income recognized against interest receivables, diff erence in loan
NMB Annual Report-2018/19 111
loss provision as per NRB directive and impairment on loan and advance as per NFRS, amount equals to deferred tax assets, actuary loss recognized in other comprehensive income, amount of goodwill recognized under NFRS.
j. Debenture Redemption Reserve
The Bank is required to maintain a redemption reserve in respect of borrowing raised through debenture issuance. As per the terms of NRB approval relating to the Bank’s debenture issuance, the Bank is annually required to transfer 20% of the debenture’s face value to redemption reserve.
k. Employees training fund
The Bank is required to incur expenses towards employee training and development for an amount that is equivalent to at least 3% of the preceding year’s total personnel expenses. Any shortfall amount in meeting this mandatory expense requirement in the current year will have to be transferred to this reserve fund through appropriation of net profi t and the amount shall accumulate in the fund available for related expenses in the subsequent year. Balance in this fund is directly reclassifi ed to retained earnings in the subsequent year to the extent of expenses made for employees training related activities.
2.31 Stationery
Stationery purchased are stated at cost and charged to revenue at the time of consumption.
2.32 Provisions, Contingent Liabilities and Contingent Assets
The Bank creates a provision when there is a present obligation as a result of past events that probably requires an outfl ow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outfl ow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outfl ow of resources is remote, no provision or disclosure is made.
Contingent assets are not recognised in the fi nancial statements. However, contingent assets are assessed continually and if it is virtually certain that an economic benefi t will arise, the asset and related income are recognised in the period in which the change occurs.
2.33 Events ast er the Balance Sheet Date
Events ast er the balance sheet date are those events, favourable and unfavourable, that occur between the balance sheet date and the date when the fi nancial statements are authorised for issue.
Appropriate adjustments in the fi nancial statements and disclosures in notes to accounts have been made for all material and signifi cant events that have occurred between the balance sheet date and date when the fi nancial statements have been authorised for issue required as per Nepal Financial Reporting Standards (NFRS)
3. Rounding off and Comparative Figures
The fi nancial statements are presented in Nepalese Rupees, rounded off to the nearest rupee. Previous year's fi gures have been reclassifi ed wherever necessary in order to facilitate comparison.
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Additional Disclosures - Financial Year 17 July 2018 to 16 July 2019 (1 Shrawan 2075 to 31 Ashad 2076)
1. Provision for Bonus Provision for bonus has been calculated and provided at 10% of net profi t before bonus and tax.
2. General Reserve
As per section 44 of the Banks and Financial Institutions Act 2063, 20% of the current year’s net profi t amounting NPR 451,455,205 has been transferred to General Reserve.
3. Exchange Fluctuation Reserve
As per Section 45 of the Banks and Financial Institutions Act, 2063 25% of the revaluation gain amounting to NPR 22,003,093 has been transferred to Exchange Fluctuation Reserve.
4. Exchange Fluctuation Income
The Bank earned a total exchange fl uctuation income of NPR 440,061,862 out of which a gain of NPR 202.11 Million was generated through NDF contracts transactions. Income realised from the diff erence between buying and selling rates of Foreign Exchange is accounted for as trading gains and shown as “Gain/loss foreign exchange transaction” under “Net Trading Income” in Schedule 4.33 and income realized through revaluation gain is shown under Foreign exchange revaluation gain in other operating income in schedule 4.34.
5. Investment Adjustment Reserve
The investments are valued at fair value required as per NFRS and hence only 100% of investment amount for CEDB Hydro Fund under ‘Available for Sale’ category totalling to NPR 10,000,000 has been set aside as Investment Adjustment Reserve.
Particulars Investment Amount IAR % IAR Amount
IAR not required to be created 204,387,000 0% -
100% IAR required 10,000,000 100% 10,000,000
Total 214,387,000 10,000,000
NMB Annual Report-2018/19 113
6. Debenture Redemption Reserve
As required by NRB directive, an amount equal to NPR 90,452,511 has been appropriated to Debenture Redemption Reserve during the year. The total balance in Debenture Redemption Reserve as at 16 July 2019 is NPR 400,000,000.
Debenture – 1
Debenture Amount 500,000,000
Issued Date 18-Feb-15
Maturity Date 21-Aug-20
Beginning Year Excluding Issue Year 2015-16
Final Year Excluding Redemption Year 2019-20
No. of Years for Reserve Creation 5 Years
Debenture Reserve per year 100,000,000
Current Year 2018-19
No. of Years for Reserve Creation till FY 2018-19 4 Years
Redemption Reserve required for 4 Years (A) 400,000,000
Debenture – 2
Debenture Amount 1,684,505,000
Issued Date 12-Apr-19
Maturity Date 12-Apr-29
Beginning Year Excluding Issue Year 2019-20
Final Year Excluding Redemption Year 2027-28
No. of Years for Reserve Creation 9
Debenture Reserve per year 187,167,222.22
Current Year - Issue Year 2018-19
No. of Years for Reserve Creation till FY 2018-19 None
Redemption Reserve required (B) -
Total Reserve (A)+(B) 400,000,000
Reserve created till FY 2017-18 309,547,489
Additional Reserve for this year 90,452,511
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7. Corporate Social Responsibility (CSR) Fund
The bank has apportioned NPR. 22,572,760 /- as CSR fund which is equivalent to 1% of Net Profi t of the year. The fund has been created as per the requirement of NRB Circular Bai.BI.Ni.Bi./Niti/Paripatra/KaKhaGa/11/073/74 dated 2073/10/12. The fund so created shall be used for CSR activities of the Bank in the next fi scal year as per bank’s CSR policy. The detailed movement of reserve is given below:
Particulars NPR
A. Net profi t for FY 2075/76 2,257,276,027
B. 1% of net profi t appropriated to CSR fund 22,572,760
C. Opening CSR fund 31,548,400
D. CSR expense incurred for FY 2075/76 5,678,558
E. Closing CSR Reserve FY 2075/76 (B+C-D) 48,442,603
F. Net Movement (E-C) 16,894,202
8. Staff Skill Development (SSD) Fund The bank has expensed NPR. 28,304,668 under staff training for the FY 2075/76 which is more than the 3% of the total employee cost of the previous FY 2074/75. Hence, no fund has been apportioned to “Staff Skill Development Fund” as per NRB Circular Bai.BI.Ni.Bi./Niti/Paripatra/KaKhaGa/10/073/74 dated 2073/09/26. The detailed movement of reserve is given below:
Particulars NPR
A. Staff Expenses of FY 2074/75 736,423,762
B. 3% of the above to be expensed in FY 2075/76 22,092,713
C. Training Expenses for FY 2075/76 28,304,668
D. Excess/(Shortfall) (C-B) 6,211,955
E. Opening SSDF -
F. Transfer to SSD Fund -
9. Event ast er reporting period The Board of Directors in its meeting dated 10 November 2019 has proposed the issue of 21 % Stock Dividend and 14% cash dividend (including for tax purpose) for each share held. The dividend shall be distributed from the retained earnings available as on Ashad end 2076 of NMB Bank Ltd on the paid up capital of NPR. 11,529,741,708 (including adjusted paid up capital of erstwhile Om Development Bank Ltd.). This is to be approved at the forthcoming Annual General Meeting of the Bank.
NMB Annual Report-2018/19 115
10. Unpaid Dividend
As on the balance sheet date, unpaid dividends of over fi ve years amount to NPR 5,128,793.31 and total unpaid dividends also amounts to NPR 5,128,793.31. Subsequently the Bank deposits the unclaimed amounts in Investor’s Protection Fund as required by the Companies Act.
11. Earnings per Share
Basic earnings per equity share are computed in accordance with NAS 26 Earnings per Share. Basic earnings per equity share are computed by dividing net profi t ast er tax by the weighted average number of equity shares outstanding during the year. Bonus shares, also known as scrip dividends, involve the issue of shares without any consideration. Since the bonus shares do not change the resources available to the entity to earn a return for the shareholders (as in the case of shares issued for cash) the eff ect of change in number of shares in the EPS calculation is cancelled for the year in which bonus issue takes place and as well as in the prior periods presented. The EPS has also been restated in Principal Indicators.
The following table sets forth, for the periods indicated, the computation of earnings per share.
Particulars YE Ashad 2076 YE Ashad 2075
Weighted average no. of equity shares outstanding (Restated) 95,900,157 84,797,652
Net profi t 2,257,276,027 1,853,792,753
Basic earnings per share 23.54 21.86
Nominal value per share 100 100
12. Principal Indicators
The principal indicators of the bank for the past 5 years are as follows:
S.No Particulars Indicators FY 2071/72 FY 2072/73 FY 2073/74 FY 2074/75 FY 2075/76
1 Percent of Net Profi t/Gross Income Percent 18.42 20.90 20.52 18.09 18.06
2Earnings Per Share (Restated for previous years)
Rs. 21.48 22.10 22.24 21.86 23.54
3 Market Value Per Share Rs. 507 810 545 358 382
4 Price Earnings Ratio Ratio 20.24 29.15 20.27 12.48 16.23
5 Dividend (including bonus) on Share Capital Percent 8.42 20.00 15.79 30.00 35.00
6 Cash Dividend on Share Capital Percent 0.42 1.00 0.79 20.00 14.00
7 Interest Income/Loans & Advances Percent 7.86 7.16 9.26 10.78 11.17
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S.No Particulars Indicators FY 2071/72 FY 2072/73 FY 2073/74 FY 2074/75 FY 2075/76
8 Staff Expenses/Total Operating Expenses Percent 48.66 57.15 55.03 58.09 61.52
9 Interest Expenses on Total Deposit and Borrowing Percent 3.63 3.08 4.71 6.76 6.58
10 Exchange Gain/Total Assets Percent 0.29 0.21 0.24 0.27 0.32
11 Staff Bonus/Total Staff Expenses Percent 35.32 34.01 34.77 38.72 34.21
12 Net Profi t/Loan and Advances Percent 1.81 2.05 2.34 2.43 2.42
13 Net Profi t/Total Assets Ratio 1.21 1.49 1.69 1.65 1.67
14 Total Credit/Deposit Percent 75.32 84.07 85.50 90.46 94.61
15 Total Operating Expenses/Total Assets Percent 1.36 1.48 1.69 1.56 1.70
16 Adequacy of Capital Fund on Risk Weighted Assets
a) Core Capital Percent 8.84 9.34 12.39 14.78 13.09
b) Supplementary Capital Percent 2.29 1.64 1.22 0.97 2.34
c) Total Capital Fund Percent 11.13 10.98 13.61 15.75 15.43
17 Liquidity (CRR) Ratio 13.32 10.81 7.72 6.68 4.19
18 Non-performing credit/Total credit Percent 0.42 1.81 1.68 0.88 0.82
19 Base Rate Percent 7.89 6.68 10.12 10.70 9.86
20 Weighted Average Interest Rate Spread Percent 4.19 4.31 3.89 3.45 3.54
21 Return on assets Percent 1.40 1.92 1.82 1.80 1.83
22 Return on Equity Percent 16.40 21.96 16.49 13.54 13.32
23 Cost to Income Ratio Percent 37.35 36.49 36.71 36.90 35.01
24 Cost of Fund (YTD) Percent 4.55 3.99 5.06 7.46 7.26
25 Average Yield (YTD) Percent 8.74 8.30 8.95 10.91 10.80
26 Book Net-worth Rs. in ‘000 3,296,447 6,861,160 10,627,149 16,489,809 17,403,014
27 Total Shares Nos. in ‘000 24,000 44,869 64,618 76,033 96,182
28 Total Staff Number 357 755 918 1,080 1,120
29 No of Branches Number 29 69 80 110 110
30 No of ATMs Number 37 49 66 96 103
NMB Annual Report-2018/19 117
13. Loans and Advances Written Off
The Bank has written off loans and advances amounting to NPR 14,622,195 (excluding interest write off ) the detail of which is as follows:
S.No Name of Clients Facility Date of Written off Principal Accrued
Interest
1 China Hygienic Meat Production & Suppliers Pvt. Ltd. Overdrast Loan 17/02/19 14,622,195 0.00
However, the bank has also recovered amount NPR. 17,585,901 during the fi scal year from loan and interest write off amount of previous fi scal years.
14. Other Assets Written Off
The Bank did not write off any balance on Other Assets.
15. Summary of Changes in Dues to customers during the year
The fi nancial growth of the dues to customers (except dues to BFI’s) during the year is given below:
Amount in NPR
Particulars FY End 2076 FY End 2075 Increase/(Decrease)
Term deposits 49,404,840,926 45,833,759,771 3,571,081,155
Call deposits 9,146,310,257 7,641,835,785 1,504,474,472
Current deposits 5,683,120,598 4,790,516,782 892,603,816
Saving deposits 28,196,756,446 19,861,381,189 8,335,375,257
Other 5,461,273,739 5,843,373,692 (382,099,953)
Total 97,892,301,967 83,970,867,219 13,921,434,748
16. Agency Account
Particular Less than 1 Year More than 1 year less than 3 years More than 3 years Total
Agency Accounts 521,093,280 150,000 - 521,243,280
Inter branch - - - -
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17. Capitalization of Interest
During the fi scal year, the Bank has recognised interest income of NPR 105,179,647.74 from capitalization of interest during moratorium period of fi ve separate projects. These capitalizations have been approved/mandated by the NRB.
S.No. Borrower Name Total Capitalization
1 Bindhyabasini Hydropower Development Company Pvt. Ltd. 10,409,773.90
2 Eastern Hydro Power Ltd. 6,090,589.18
3 Kalanga Hydro Pvt. Ltd. 26,968,533.37
4 Liberty Energy Company Ltd. 15,755,847.46
5 Upper Solu Hydro Electric Company Ltd. 45,954,903.83
Total 105,179,647.74
18. Dividend IncomeDuring the fi scal year, the Bank has earned following dividend incomes from its investments:
Particulars Amount (NPR)
Karja Suchana Kendra FY 2073/74 178,500
Karja Suchana Kendra FY 2074/75 267,750
Mero Microfi nance Bittiya Sanstha Limited FY 2074/75 2,002,000
Nepal Clearing House Limited FY 2074/75 906,788
Laxmi Laghubitta Bittiya Sanstha Limited FY 2074/75 110
Butwal Power Company Limited FY 2074/75 7,509,212
NMB Capital FY 2074/75 38,000,000
Rural Microfi nance Laghubitta Bittiya Sanstha Limited FY 2074/75 5,670
Nepal Stock Exchange Ltd. 45,466
NMB Sulav Investment Fund - FY 2074/75 22,105,262
TOTAL 71,020,758
NMB Annual Report-2018/19 119
19. Classifi cation of Assets and Liabilities based on Maturity (As per yearly NRB Report)
Amount in NPR Million
S.N. Particulars 1-90 Days
91-180 Days
181-270 Days
271-365 Days
Over 1 Year
Total Amount
Assets
1 Cash Balance 2,452 - - - - 2,452
2 Balance with Banks & FIs 9,688 - - - - 9,688
3 Investment in Foreign Banks 3,189 318 329 110 - 3,946
4 Call Money - - - - - -
5 Government Securities 339 886 293 122 7,644 9,284
6 Nepal Rastra Bank Bonds - - - - - -
7 Inter Bank & FI Lending 3,053 - - - - 3,053
8 Loans & Advances 26,845 14,052 5,709 4,117 41,164 91,887
9 Interest Receivable 131 - - - - 131
10 Reverse Repo - - - - - -
11 Receivables from other Institutions under Commitment - - - - - -
12 Payment to be made for facilities under s.no 20,21 & 22 22,811 10,115 2,973 4,143 7,635 47,677
13 Others - - - - - -
Total Assets (A) 68,508 25,371 9,304 8,492 56,443 168,118
Liabilities
14 Current Deposits 7,837 - - - - 7,837
15 Saving Deposits 10,732 1,043 1,043 1,101 23,967 37,886
16 Fixed Deposits 14,162 12,026 9,025 7,297 6,894 49,405
17 Debentures - 2,185 2,185
18 Borrowings: 42 544 - - 3,468 4,053
(a) Call/Short Notice - - - - - -
(b) Inter-bank/Financial Institutions - - - - 3,468 3,468
(c) Refi nance 42 544 - - - 585
(d) Others - - - - - -
19 Other Liabilities and Provisions 793 102 102 102 3,149 4,247
(a) Sundry Creditors 70 - - - - 70
(b) Bills Payable 96 - - - - 96
(c) Interest Payable 521 - - - - 521
(d) Provisions 4 - - - 166 170
(e) Others 102 102 102 102 2,983 3,389
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20 Payable to other institutions under Commitment 1,096 29 - - - 1,124
21 Unutilized Approved Facilities 4,332 - - - - 4,332
22 Letter of Credit/Guarantee (Net of Margin) 17,383 10,087 2,973 4,143 7,635 42,221
23 Repo - - - - - -
24 Payment to be made for facilities under S.No 11 - - - - - -
25 Others - - - - - -
Total Liabilities (B) 56,376 23,830 13,143 12,643 47,298 153,290
Net Financial Assets (A-B) 12,132 1,541 (3,839) (4,151) 9,145 14,829
Cumulative Net Financial Assets 12,132 13,673 9,834 5,683 14,829 -
20. Summary of concentration of ExposuresAmount in NPR
Particulars Loans, and Advance Deposit Contingent
Total amount as at 16 July 2019 91,886,954,994 98,516,666,963 44,144,526,363
Highest exposure to single unit 4,758,287,064 4,991,647,889 6,168,537,870
Highest % of exposure to single unit 5.18% 5.07% 13.97%
21. Borrowing by the Bank against the collateral of own assets
Borrowing by the Bank against the collateral of own asset is NIL.
22. Transactions in Bullion
The Group deals in bullion (Gold/Silver) by holding stock on consignment basis on behalf of suppliers as per the arrangement. The value of consignment as on balances sheet date is 228,747,129 and has been refl ected under “Advance Gold and silver” (Gold Consignment)” in Schedule 4.16. Transaction of gold and silver are carried out as per the NRB Directives.
23. Capital Construction
There are no capital constructions (pending capitalization) as at the end of the current fi scal year.
NMB Annual Report-2018/19 121
24. Loan Impairment
The bank maintains an allowance for credit losses relating to on-balance sheet exposures of loans and advances.
Loans which are individually signifi cant (the threshold being selected to cover up top 50 fi les, fi les under 50% and 100% provision and fi les with special asset management department) are assessed individually for objective indicators of impairment. A loan is considered impaired when it is determined that bank will not be able to collect all amounts due according to the original contractual terms. Credit exposures of individually signifi cant loans are evaluated based on factors including the borrower’s overall fi nancial condition, resources and payment record, and where applicable, the realizable value of any collateral. If there is evidence of impairment leading to an impairment loss, then the amount of the loss is determined as the diff erence between the carrying value of the loan, including accrued interest, and the estimated recoverable amount. The estimated recoverable amount is measured as the present value of expected future cash fl ows discounted at the loan’s original eff ective interest rate, including cash fl ows that may result from the realization of collateral less costs to sell.
Loans which are not individually signifi cant, or which are individually assessed and not determined to be impaired, are collectively assessed for impairment. For the purposes of a collective evaluation of impairment, loans are grouped on the basis of similar credit risk characteristics, taking into account loan type, past due status and other relevant factors viz. OD Loan, Working Capital Loan, Term Loan and Retail EMI. The collective impairment allowance is determined by reviewing factors including historical loss experience, which takes into consideration historical probabilities of default, loss given default and exposure at default.
The impairment status as per para 63 of NAS 39 is given below:
Particulars Year ended 31 Ashad 2076 Year ended 32 Ashad 2075
a. Individual Impairment 752,441,136 896,307,701
b. Collective Impairment 150,255,194 74,395,715
Total 902,696,330 970,703,416
The Loss given default status (LGD) for impairment calculation purpose is given below:
Particulars Year ended 31 Ashad 2076 Year ended 32 Ashad 2075
OD Loan 19% 21%
Term Loan 4% 5%
Retail EMI 19% 22%
Working Capital Loan 25% 28%
25. Carve-outs in NFRS
Upon the recommendation from Accounting Standard Board-Nepal, the Institute of Chartered Accountants of Nepal (ICAN) has issued following carve-outs for the implementation of NFRS and has prescribed alternative treatments as set out below:
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a. NFRS 10 – “Consolidated Financial Statements”
The holding company can carve out to prepare consolidated fi nancial statements using uniform accounting policies for like transactions and other events in similar circumstances as specifi ed in para 19 of NFRS 10 unless it is impracticable to do so.
The Bank and its both Subsidiaries have adopted uniform accounting policy based on NFRS for like transactions and other events in similar circumstances.
b. NAS 39 – “Financial Instruments: Recognition and Measurements”
This is the carve out from the requirement to determine impairment loss on fi nancial assets – loans and advances by adopting the ‘Incurred Loss Model’ as specifi ed in para 63 of NAS 39 unless the entity is a bank or a fi nancial institution registered as per Bank and Financial Institutions Act 2073. Such entities shall measure impairment loss on loans and advances at the higher of:
- amount derived as per norms prescribed by Nepal Rastra Bank for loan loss provisioning; and
- amount determined as per para 63 of NAS 39 adopting Incurred Loss Model
This is the mandatory carve out. Hence, the Group has recognized impairment loss on loans and advances at the higher of the amount derived as per prudential norms specifi ed in NRB directive and the amount derived from incurred loss model as specifi ed in para 63 of NAS 39 as given below:
Particulars Year ended 31 Ashad 2076 Year ended 32 Ashad 2075
a. Impairment on Loan as per Para 63 902,696,330 970,703,416
b. Loan Loss Provision as per NRB 1,398,925,416 1,232,652,783
Higher of a and b 1,398,925,416 1,232,652,783
The Group has recognized impairment loss on other fi nancial assets measured at amortized cost in accordance with para 63 of NAS 39.
c. NAS 39 – “Financial Instruments: Recognition and Measurements”
This is the carve out from the requirement to incorporate all fees and points paid or received under contractual terms of a fi nancial instrument in the calculation of ‘Eff ective Interest Rate’ for the fi nancial instrument as specifi ed in para 9 of NAS 39 and also carve out from the requirement to recognize interest income on a fi nancial asset or a group of similar fi nancial assets, which has been written down as a result of an impairment loss, by applying the rate of interest used to discount the asset’s future cash fl ows for the purpose of measuring its impairment loss as specifi ed in para 9 of NAS 39 unless it is immaterial or impracticable to determine reliably.
The Group has opted this carve out and hence has excluded the full amount of upfront loan management fees or commission received on loans and advances in the calculation of eff ective interest rate for the loan. The upfront fees and commission are recognized as income in the same period the loan is approved. The Group has recognized interest income on impaired fi nancial asset by applying the original eff ective interest rate to the gross carrying amount of a fi nancial asset.
NMB Annual Report-2018/19 123
26. Risk Management
Risk Management StructureNMB Board is the ultimate authority to oversee overall risk management of the bank by establishing risk management strategies, appropriate risk appetite, and ensuring the risk management policies, procedures and standards are adequate and is eff ectively implemented. Sound risk management system in the bank is established through formation of Board level Risk Management Committee and Audit committee; management level Asset and Liability Committee, Credit Risk Management Committee, Operational Risk Management Committee, E&S (Environmental and Social) Committee, Credit Recovery Committee and Corporate Governance Committee. In this structure, new/revised policies and standards, reports on risk management, portfolio analysis, stress testing, investment, liquidity, capital adequacy, industry/market analysis, and critical risk issues identifi ed are escalated to Risk Management Committee for review and decision.
Risk management structure in the bank’s Organogram:
Risk Governance
The bank aspires to effi ciently manage various risks that arise during business process through formulation and implementation of Risk Management Framework. Risk Governance at the bank is primarily based on following principles:
1) Risk Appetite Determination, 2) Pervasive Risk Culture, 3) Eff ective Communication/Reporting,4) Eff ective Functional Structure, Policies, Procedures, and MIS, adequate infrastructure and resources for Risk
Management,
Board of Directors
Risk Management Committee (RMC)
Audit Committee Human Resource Committee
Asset Laundering Prevention Committee
Chief Executive Officer (CEO)
Assets & Liability Committee
Pricing Committee
Operational Risk Management Committee
Corporate Governance Committee
Legal & Compliance Department
Credit Risk Management Committee
Chief Risk Officer (CRO)
Credit Risk Management Department
Operational & Market Risk Department
IT and Information Security Risk
E&S Committee
E&S Risk Management Department
Corporate Information Security Committee
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Risk governance structure, i.e. the responsibility for maintaining risk within the banks risk appetite is cascaded down from the Board to the respective Committees and then to appropriate functional bodies in organizational structure.
In addition, the bank as an active member of the Global Alliance for Banking on Values (GABV) strives for delivering sustainable economic, social and environmental development with a focus on helping individuals fulfi l their needs and build stronger communities.
Credit Risk Management in NMB Bank:Credit Risk refers to the potential loss due to failure of counterparty to meet its obligations in accordance with the terms specifi ed in the credit agreements. Credit Policy, Credit Risk Management Framework, Credit Process Manual, Product Papers and various other credit related documents in place provides the fi rm foundation for a strong credit risk management environment in the bank by defi ning clear roles and responsibilities of various functions and risk takers in Credit system. The key independent units responsible for ensuring eff ective Credit Risk Management in the bank are Credit Risk Management Department, Credit Administration and Control Department, Special Assets Management Department and Business Segments.
A thorough analysis of the borrower and the industry in which the borrower operates is ensured prior advancing credit facilities. The Bank also has an internal credit risk rating procedure in place to categorize customers in diff erent risk profi les and formulate appropriate account strategies. The Bank primarily focuses on ensuring prudent fi nancing requirements of the client and the client’s capacity to repay the debt obligation on time.
Bank has a product wise and industry/sector wise portfolio and NPL thresholds to monitor the quality of loan portfolio and manage the concentration risk. These thresholds are reviewed on periodical basis in Credit Risk Management Committee and Risk Management Committee in quarterly interval for required actions/strategic decisions.
Market Risk and Operation Risk Management in NMB Bank:Market and Operation Risk management in Nepalese Banks has been a newer challenge. In the times of volatility and fl uctuations in the market, NMB Bank needs to prove its determination by withstanding the market variations and achieve sustainability in terms of growth as well as to have a stable share value. Hence, an essential component of enhanced risk management framework would be to mitigate all the risks and rewards of the products and services off ered by the bank.
NMB has passed through a monumental change ast er the merger with three Development Banks and one Finance Company. NMB has taken strategic focus on digitization and technological advancement to enhance banks services as well as risk management.
NMB ensures parity between risk and return and hence, management of risk by incorporating a set of systematic and professional methods especially those defi ned by the Basel III becomes an essential requirement for us.
In the course of operations, the bank is invariably faced with diff erent types of risks that may have a potentially negative eff ect on the business. NMB Bank’s risk management approach includes risk identifi cation, measurement and assessment, and minimizes impact on the fi nancial result and capital of the bank.
NMB Annual Report-2018/19 125
Market risk includes interest rate and foreign exchange risk.
Interest rate risk is the risk of negative eff ects on the fi nancial result and capital of the bank as a result of changes in interest rates.
The bank’s products are mostly based on fl oating interest rate. Only fi xed deposits are with fi xed interest rate. In Nepalese local market, short term movement in interest rate is negligible. Asset and Liability Committee (ALCO) monitors the interest rate movement on regular basis.
Foreign exchange risk is the risk of negative eff ects on the fi nancial result and capital of the bank caused by changes in exchange rates.
The foreign exchange risk of the bank is minimal as all the transactions are carried out on behalf of the customers against underlying remittances and trade transactions.
Operational risk is the risk of negative eff ects on the fi nancial result and capital of the bank caused by omissions in the work of employees, inadequate internal control procedures and processes, inadequate management of information and other systems, and unforeseeable external events.
NMB Bank has independent department to look ast er operational risk wherein Operational Risk Management Committee meets on monthly basis to discuss and plan the way forward to mitigate potential operational risk identifi ed.
Bank has developed and adhered to Minimum Control Standards and Incident Reporting Guidelines along with Whistle Blowing Policy to identify potential operational risks. Operational Risk Department independently assess each incident/event/cause to measure the risk grade which is ultimately discussed/ analyzed further in Operational Risk Management Committee to put appropriate controls in place. If required, the incident/event/cause along with the risk assessment, probability and impact is escalated further to Risk Management Committee or the Board of the Bank. Apart from that, Operational Risk Unit conducts branch/ department visits to monitor/ review the branches and departments and also to train/ create awareness on operational risk.
Liquidity RiskLiquidity risk is the potential event where the Bank either does not have suffi cient liquid fi nancial resources available to meet all its obligations as they fall due, or can only access these fi nancial resources at excessive cost. The Liquidity Risk Framework governs liquidity risk management and is managed by ALCO. In accordance with that policy, the Bank maintains a liquid portfolio of marketable securities as a liquidity buff er.
Other RiskManagement of other risk such as Reputational, Legal and Compliance, Human Resource (HR) etc. is equally pertinent as the bank grows. The bank has separate department to oversee Legal and Compliance issues. HR Department and Board level HR Committee is responsible for all HR functions and related risk management. The bank has also setup dedicated Offi cers to manage Reputational and other risks.
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Internal Control
The Board and the management is committed in managing risks and in controlling its business and fi nancial activities in a manner which enables it to maximize profi table business opportunities, avoid or minimize risks which can cause potential loss or reputational damage to the bank, ensure compliance with applicable laws and regulations and enhance resilience to external events. To achieve this, bank has established set of policies and procedures for risk identifi cation, risk evaluation, risk mitigation and control/monitoring.
The eff ectiveness of the Company’s internal control system is reviewed regularly by the Board, Risk Management Committee, Management and Internal Audit.
The Internal Audit monitors compliance with policies/standards and the eff ectiveness of internal control structures across the Company through its program of business/unit audits. The Internal Audit function is focused on the areas of greatest risk as determined by a risk-based assessment methodology. Internal Audit reports are periodically forwarded to the Audit Committee. The fi ndings of all audits are reported to the Chief Executive Offi cer, department heads and branch managers for initiating immediate corrective measures
27. Categories of Financial Instruments and Fair Value Hierarchy
Assets and liabilities carried at fair value or for which fair values are disclosed have been classifi ed into three levels according to the observability of the signifi cant inputs used to determine the fair values. Changes in the observability of signifi cant valuation inputs during the reporting period may result in a transfer of assets and liabilities within the fair value hierarchy. The Bank recognises transfers between levels of the fair value hierarchy when there is a signifi cant change in either its principal market or the level of observability of the inputs to the valuation techniques as at the end of the reporting period.
Level 1 fair value measurements are those derived from unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 valuations are those with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and fi nancial instruments valued using models where all signifi cant inputs are observable.
Level 3 portfolios are those where at least one input, which could have a signifi cant eff ect on the instrument’s valuation, is not based on observable market data.
Financial instruments are measured on an ongoing basis either at fair value or at amortized cost. The summary of signifi cant accounting policies describes how the classes of fi nancial instruments are measured, and how income and expenses, including fair value gains and losses, are recognized. The following table analyses the carrying amounts of the fi nancial instruments by category as defi ned in NAS 39 and by headings of the Statement of Financial Position.
NMB Annual Report-2018/19 127
The Hierarchy of fair value measurement is given below:
ParticularsFair value Hierarchy
(Level)
As at As at
As at 31 Ashad 2076 As at 32 Ashad 2075
Carrying Value Fair value Carrying Value Fair value
FVTPL
Other trading assets 3 340,390,000 340,390,000 321,720,000 321,720,000
Derivative fi nancial instruments
1 8,595,482,282 8,595,482,282 7,506,751,485 7,506,751,485
Subtotal 8,935,872,282 8,935,872,282 7,828,471,485 7,828,471,485
FVTOCI
Quoted Equities 1 593,366,539 593,366,539 539,086,827 539,086,827
Unquoted Equities 3 31,995,900 31,995,900 14,392,000 14,392,000
Subtotal 625,362,439 625,362,439 553,478,827 553,478,827
Grand-Total 9,561,234,721 9,561,234,721 8,381,950,312 8,381,950,312
Amortized cost
Cash and cash equivalent 3 8,096,354,503 8,096,354,503 5,180,404,105 5,180,404,105
Due from Nepal Rastra Bank 3 10,829,181,584 10,829,181,584 7,260,194,560 7,260,194,560
Placement with BFI’s 3 2,172,967,239 2,172,967,239 276,407,171 276,407,171
Loan and advances to B/FIs
3 3,317,961,987 3,317,961,987 2,497,567,769 2,497,567,769
Loans and advances to customers
3 88,485,031,394 88,485,031,394 72,711,771,766 72,711,771,766
Investment securities (except equity instruments)
3 9,690,988,576 9,690,988,576 8,894,967,898 8,894,967,898
Subtotal 122,592,485,282 122,592,485,282 96,821,313,269 96,821,313,269
Total of Financial Assets 132,153,720,004 132,153,720,004 105,203,263,581 105,203,263,581
FVTPL/FVTOCI
Liability for employees DBO 3 59,445,250 59,445,250 60,864,641 60,864,641
Subtotal 59,445,250 59,445,250 60,864,641 60,864,641
Amortized cost
Due to Bank and Financial Institutions
3 624,364,996 624,364,996 1,036,268,951 1,036,268,951
Due to Nepal Rastra Bank 3 3,203,523,072 3,203,523,072 660,071,641 660,071,641
Deposits from customers 3 97,892,301,967 97,892,301,967 83,970,867,219 83,970,867,219
Borrowing 3 3,468,060,000 3,468,060,000 - -
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Other liabilities 3 1,846,937,438 1,846,937,438 1,140,225,221 1,140,225,221
Debt securities issued 3 2,239,236,412 2,239,236,412 517,547,945 517,547,945
Subtotal 109,274,423,885 109,274,423,885 87,324,980,977 87,324,980,977
FVTPL
Derivative fi nancial instruments
1 8,458,374,429 8,458,374,429 7,477,483,892 7,477,483,892
Subtotal 8,458,374,429 8,458,374,429 7,477,483,892 7,477,483,892
Total of Financial Liabilities 117,792,243,564 117,792,243,564 94,863,329,510 94,863,329,510
The details of equity instruments with fair valuation hierarchy are as follows:
Particulars
NMBFair
Valuation Hierarchy
As at 31 Asar 2076 As at 32 Asar 2075
Cost Fair Value Cost Fair Value Level
1. Investment in quoted equity shares
1.1 United Insurance Co. (Nepal) Limited 211,300 246,000 211,300 258,600 Level 1
1,440 Promoter shares of Rs 100 each fully paid up
120 Ordinary shares of Rs 100 each fully paid up
1.2 NLG Insurance Company Limited - 5,400 - 43,710 Level 1
54 Ordinary bonus shares of Rs 100 each fully paid up
1.3 Ridi Hydro Power Limited 3,600 4,410 3,600 5,781 Level 1
36 Ordinary shares @ Rs. 100 each fully paid up and bonus Shares - 13 Units
1.4 Butwal Power Company Ltd. 209,006,679 187,688,873 209,006,679 190,650,803 Level 1
417,179 ordinary shares @ Rs.100 each fully paid up and bonus shares - 41,718 Units
1.5 Rural Microfi nance Development Center Limited - 458,073 - 411,390 Level 1
693 Units bonus Shares @ Rs 100 each fully paid up
1.6 Laxmi Laghubitta Sanstha Limited - 2,644 - 4,392 Level 1
4 Units ordinary bonus Shares @ Rs 100 each fully paid up
1.7 Mero Micro Finance Bittiya Sanstha Ltd. 37,023,000 46,046,000 14,000,000 20,020,000 Level 1
140,000 Promoter shares of Rs 100 each fully paid up, bonus Shares - 90,230 Units, Right Share - 230,230 (Total Shares - 460,460 Units)
1.8 Nepal Telecom Ltd. 34,698,472 34,382,502 - - Level 1
49,614 ordinary shares @ Rs.100 each fully paid up
Sub-Total 280,943,051 268,833,902 223,221,579 211,394,676 -
NMB Annual Report-2018/19 129
2. Investment in quoted mutual fund:
2.1 NMB Sulav Investment Fund-1 105,000,000 113,610,000 105,000,000 121,275,000 Level 1
10,500,000 Ordinary shares of Rs 10 each fully paid up
2.2 NMB Hybrid Fund-1 140,000,000 140,420,000 140,000,000 135,660,000 Level 1
14,000,000 Ordinary Share of Rs. 10 each fully paid up
2.3 Laxmi Equity Fund (LEMF) 40,947,100 31,242,637 40,947,100 33,167,151 Level 1
4,094,710 ordinary shares @ Rs 10 each fully paid up
2.4 NIC Asia Growth Fund (NICGF) 10,000,000 10,280,000 10,000,000 9,190,000 Level 1
1,000,000 units ordinary shares @ Rs. 10 each fully paid up
2.5 Sanima Equity Fund (SAEF) 20,000,000 18,800,000 20,000,000 19,120,000 Level 1
2,000,000 units ordinary shares @ Rs. 10 each fully paid up
2.6 Citizen Mutual Fund-I 10,000,000 10,180,000 10,000,000 9,280,000 Level 1
1,000,000 units ordinary shares @ Rs. 10 each fully paid up
Sub-Total 325,947,100 324,532,637 325,947,100 327,692,151
Total Investments in quoted equity instruments 606,890,151 593,366,539 549,168,679 539,086,827
3. Investment in unquoted equity
3.1 Nepal Stock Exchange Limited 5,000 71,600 5,000 5,000 Level 3
716 Ordinary shares of Rs 100 each fully paid up
3.2 Nepal clearing House Limited 4,198,000 6,045,100 4,198,000 4,198,000 Level 3
41,980 Equity shares of Rs 100 each and bonus Units - 18,741 (Total Units-60,451)
3.3 Credit Information Bureau Limited 189,000 1,890,000 189,000 189,000 Level 3
5,600 Ordinary shares of Rs 100 each, bonus Units - 3,710 (Total Units-9,310)
3.4 CEDB Hydro Fund Limited 10,000,000 11,989,200 10,000,000 10,000,000 Level 3
100,000 Promoter shares of Rs 100 each fully paid up, bonus Shares - 8,993 Units (Total Units-108,993)
3.5 Citizens Mutual Fund-II 2,000,000 2,000,000 - - Level 3
200,000 units of Rs 10 each fully paid up - -
3.6 NABIL BALANCE FUND-II Level 3
1,000,000 units of Rs 10 each fully paid up 10,000,000 10,000,000
Sub-Total 26,392,000 31,995,900 14,392,000 14,392,000
Grand Total 633,282,151 625,362,439 563,560,679 553,478,827
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28. Capital Adequacy
The capital adequacy status as of 16 July 2019 is given below:
Amount in thousands1.1 Risk Weighted Exposures 2076 Ashad End 2075 Ashad End
a Risk Weighted Exposure for Credit Risk 112,632,092 95,709,597 b Risk Weighted Exposure for Operational Risk 5,117,630 4,159,720 c Risk Weighted Exposure for Market Risk 2,144,860 1,994,290
Total Risk Weighted Exposures (a+b+c) 119,894,582 101,863,607 Adjustments under Pillar II
Add : RWE equvalent to reciprocal of capital charge of 3 % of gross income. 1,238,947 1,026,683 Add : 2% of the the total RWE due to Supervisory add up 2,397,892 2,037,272 Add: 2% of total RWE, Desired level of disclosure requirement has not been achieved. - 2,037,272
Total Risk Weighted Exposures (A� er Bank’s adjustments of Pillar II) 123,531,421 106,964,834 1.2 CapitalTier 1 Capital (Core Capital) (CET1 +AT1) 16,166,512 15,810,510
a Paid up Equity Share Capital 9,618,163 7,603,291 b Irredeemable Non-cumulative preference shares - - c Share Premium 2,512,799 2,920,873 d Proposed Bonus Equity Shares - 1,140,494 e Statutory General Reserves 2,123,307 1,671,851 f Retained Earnings 1,780,327 2,339,182 g Un-audited current year cumulative profi t/(Loss) - - h Capital Redemption Reserve - - i Capital Adjustment Reserve 57,326 57,326 j Dividend Equalization Reserves - - k Less: Deferred Tax Assets l Other Free Reserve - -
m Debenture Redemption Reserve 400,000 309,547 n Less: Goodwill - - o Less: Intangible Assets (115,409) (22,054) p Less: Fictitious Assets - - q Less: Investment in equity in licensed Financial Institutions - - r Less: Investment in equity of institutions with fi nancial interests (210,000) (210,000) s Less: Investment in equity of institutions in excess of limits - - t Less: Investments arising out of underwriting commitments - - u Less: Reciprocal crossholdings - - v Less: Purchase of land & building in excess of limit and unutilized - - w Less: Other Deductions - -
Adjustments under Pillar II - - Less : Shortfall in Provision (6.4 a 1) - - Less : Loans and Facilities extended to Related Parties and Restricted lending (6.4 a 2) - -
- - Supplementary Capital (Tier II) 2,894,863 1,040,744
a Cumulative and/or Redeemable Preference Share - - b Subordinated Term Debt 1,784,505 200,000 c Hybrid Capital Instruments - - d General loan loss provision 1,011,982 774,370 e Exchange Equalization Reserve 78,377 56,374 f Investment Adjustment Reserve 10,000 10,000 g Assets Revaluation Reserve - - h Other Reserves 10,000 -
Total Capital Fund (Tier I and Tier II) 19,061,375 16,851,254 1.3 Capital Adequacy Ratios Common Equity Tier 1 Capital to Total Risk Weighted Exposures (Ast er Bank’s adjustments of Pillar II) 13.09 14.78
Tier 1 Capital to Total Risk Weighted Exposures 13.09 14.78 Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures 15.43 15.75
NMB Annual Report-2018/19 131
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CA -
7) -
-
-
-
1
50%
-
-
-
Cla
ims
On B
IS, I
MF,
ECB
, EC
and
MD
B’s
reco
gniz
ed b
y th
e fr
amew
ork
-
-
-
-
0%
-
-
-
Cla
ims
on O
ther
Mul
tilat
eral
Dev
elop
men
t Ban
ks -
-
-
-
1
00%
-
-
-
Cla
ims
on P
ublic
Sec
tor E
ntity
(ECA
0-1
) -
-
-
-
2
0%
-
-
-
Cla
ims
on P
ublic
Sec
tor E
ntity
(ECA
2)
-
-
-
-
50%
-
-
-
Cla
ims
on P
ublic
Sec
tor E
ntity
(ECA
3-6
) -
-
-
-
1
00%
-
-
-
Cla
ims
on P
ublic
Sec
tor E
ntity
(ECA
7)
-
-
-
-
150
%
-
-
-
Cla
ims
on d
omes
tic b
anks
that
mee
t cap
ital a
dequ
acy
requ
irem
ents
3,4
03,9
65
-
-
3,4
03,9
65
20%
6
80,7
93
1,0
23,9
20
204
,784
Cla
ims
on d
omes
tic b
anks
that
do
not m
eet c
apita
l ade
quac
y re
quire
men
ts 2
,747
-
-
2
,747
1
00%
2
,747
-
-
Cla
ims
on fo
reig
n ba
nk (E
CA R
atin
g 0-
1)
2,3
35,1
04
-
-
2,3
35,1
04
20%
4
67,0
21
1,4
14,0
75
282
,815
Cla
ims
on fo
reig
n ba
nk (E
CA R
atin
g 2)
1
,180
,905
-
-
1
,180
,905
5
0%
590
,453
1
82,3
50
91,
175
Cla
ims
on fo
reig
n ba
nk (E
CA R
atin
g 3-
6)
1,4
17,5
46
-
-
1,4
17,5
46
100
%
1,4
17,5
46
-
-
www.nmbbanknepal.com132
Cla
ims
on fo
reig
n ba
nk (E
CA R
atin
g 7)
-
-
-
-
1
50%
-
-
-
Cla
ims
on fo
reig
n ba
nk in
corp
orat
ed in
SA
AR
C re
gion
ope
ratin
g w
ith
a bu
ff er o
f 1%
abo
ve th
eir r
espe
ctiv
e re
gula
tory
cap
ital r
equi
rem
ent
143
,707
-
-
1
43,7
07
20%
2
8,74
1 9
15,6
14
183
,123
Cla
ims
on D
omes
tic C
orpo
rate
s
65,
675,
730
-
-
65,
675,
730
100
%
65,
675,
730
54,
199,
076
54,
199,
076
Cla
ims
on F
orei
gn C
orpo
rate
s (E
CA 0
-1)
-
-
-
-
20%
-
-
-
Cla
ims
on F
orei
gn C
orpo
rate
s (E
CA 2
) -
-
-
-
5
0%
-
0
0
Cla
ims
on F
orei
gn C
orpo
rate
s (E
CA 3
-6)
-
-
-
-
100
%
-
-
-
Cla
ims
on F
orei
gn C
orpo
rate
s (E
CA 7
) -
-
-
-
1
50%
-
-
-
Reg
ulat
ory
Ret
ail P
ortfo
lio (N
ot O
verd
ue)
9,4
13,1
28
-
-
9,4
13,1
28
75%
7
,059
,846
7
,102
,986
5
,327
,240
Cla
ims
fulfi
lling
all
crite
rion
of re
gula
rity
reta
il ex
cept
gra
nula
rity
-
-
-
-
100
%
-
86,
026
86,
026
Cla
ims
secu
red
by re
side
ntia
l pro
pert
ies
10,
389,
524
-
-
10,
389,
524
60%
6
,233
,714
9
,140
,904
5
,484
,542
Cla
ims
not f
ully
sec
ured
by
resi
dent
ial p
rope
rtie
s -
-
-
-
1
50%
-
-
-
Cla
ims
secu
red
by re
side
ntia
l pro
pert
ies
(Ove
rdue
) 1
18,8
58
35,
762
-
83,
096
100
%
83,
096
49,
058
49,
058
Cla
ims
secu
red
by C
omm
erci
al re
al e
stat
e 3
76,3
63
-
-
376
,363
1
00%
3
76,3
63
350
,053
3
50,0
53
Pas
t due
cla
ims
(exc
ept f
or c
laim
s se
cure
d by
resi
dent
ial p
rope
rtie
s) 8
80,1
97
357
,389
-
5
22,8
08
150
%
784
,212
5
43,4
83
815
,224
Hig
h R
isk
clai
ms
4,6
55,5
51
-
386
,955
4
,268
,597
1
50%
6
,402
,895
3
,135
,866
4
,703
,799
Lend
ing
agai
nst s
ecur
ities
(bon
ds &
sha
res)
294
,605
-
-
2
94,6
05
100%
294
,605
-
Inve
stm
ents
in e
quity
and
oth
er c
apita
l ins
trum
ents
of i
nstit
utio
ns
liste
d in
sto
ck e
xcha
nge
659
,522
7
,920
-
6
51,6
03
100
%
651
,603
5
64,8
35
564
,835
Inve
stm
ents
in e
quity
and
oth
er c
apita
l ins
trum
ents
of i
nstit
utio
ns n
ot
liste
d in
the
stoc
k ex
chan
ge 4
,392
-
-
4
,392
1
50%
6
,588
4
,387
6
,581
Sta
ff lo
an s
ecur
ed b
y re
side
ntia
l pro
pert
y 4
42,2
57
-
-
442
,257
60
% 2
65,3
54
771
,042
4
62,6
25
Inte
rest
Rec
eiva
ble/
clai
m o
n go
vern
men
t sec
uriti
es 9
2,64
5 -
-
9
2,64
5 0%
-
103
,824
-
Cas
h in
tran
sit a
nd o
ther
cas
h ite
ms
in th
e pr
oces
s of
col
lect
ion
-
-
-
-
20%
-
-
-
Oth
er A
sset
s (a
s pe
r atta
chm
ent)
3,3
35,5
25
-
-
3,3
35,5
25
100
%
3,3
35,5
25
6,2
55,4
04
6,2
55,4
04
TOT
AL
128,
476,
040
401
,070
3
86,9
55
127
,688
,016
94,
356,
831
104
,634
,189
7
9,06
6,35
9
Off B
alan
ce S
heet
Exp
osur
es
Rev
ocab
le C
omm
itmen
ts
-
-
-
-
0% -
-
-
Bill
s U
nder
Col
lect
ion
5
,205
,236
-
-
5
,205
,236
0%
-
6,5
93,7
23
-
For
war
d Ex
chan
ge C
ontr
act L
iabi
litie
s
-
-
-
-
10%
-
-
-
LC
Com
mitm
ents
With
Orig
inal
Mat
urity
Upt
o 6
mon
ths
dom
estic
co
unte
rpar
ty
3,8
36,1
15
-
402
,659
3
,433
,456
20
% 6
86,6
91
3,9
61,7
47
792
,349
For
eign
cou
nter
part
y (E
CA R
atin
g 0-
1)
-
-
-
-
20%
-
-
-
For
eign
cou
nter
part
y (E
CA R
atin
g 2)
-
-
-
-
50
% -
-
-
For
eign
cou
nter
part
y (E
CA R
atin
g 3-
6)
-
-
-
-
100%
-
-
-
NMB Annual Report-2018/19 133
For
eign
cou
nter
part
y (E
CA R
atin
g 7)
-
-
-
-
15
0% -
-
-
LC
Com
mitm
ents
With
Orig
inal
Mat
urity
Ove
r 6 m
onth
s do
mes
tic
coun
terp
arty
1
5,26
7,42
6 -
4
,002
,305
1
1,26
5,12
1 50
% 5
,632
,561
1
1,46
9,99
2 5
,734
,996
For
eign
cou
nter
part
y (E
CA R
atin
g 0-
1)
-
-
-
-
20%
-
-
-
For
eign
cou
nter
part
y (E
CA R
atin
g 2)
-
-
-
-
50
% -
-
-
For
eign
cou
nter
part
y (E
CA R
atin
g 3-
6)
-
-
-
-
100%
-
-
-
For
eign
cou
nter
part
y (E
CA R
atin
g 7)
-
-
-
-
15
0% -
-
-
Bid
Bon
d, P
erfo
rman
ce B
ond
and
Coun
ter g
uara
ntee
dom
estic
co
unte
rpar
ty
5,0
86,0
43
-
295
,664
4
,790
,378
50
% 2
,395
,189
4
,048
,349
2
,024
,174
For
eign
cou
nter
part
y (E
CA R
atin
g 0-
1)
1,5
59,2
51
-
1,2
47,4
00
311
,850
20
% 6
2,37
0 3
62,7
92
72,
558
For
eign
cou
nter
part
y (E
CA R
atin
g 2)
8
,453
,369
-
4
,226
,684
4
,226
,684
50
% 2
,113
,342
3
,299
,480
1
,649
,740
For
eign
cou
nter
part
y (E
CA R
atin
g 3-
6)
-
-
-
-
100%
-
-
-
For
eign
cou
nter
part
y (E
CA R
atin
g 7)
-
-
-
-
15
0% -
-
-
Und
erw
ritin
g co
mm
itmen
ts
-
-
-
-
50%
-
-
-
Len
ding
of B
ank’
s Se
curit
ies
or P
ostin
g of
Sec
uriti
es a
s co
llate
ral
-
-
-
-
100%
-
-
-
Rep
urch
ase
Agr
eem
ents
, Ass
ets
sale
with
reco
urse
-
-
-
-
10
0% -
-
-
Adv
ance
Pay
men
t Gua
rant
ee
2,1
52,0
31
-
242
,931
1
,909
,100
10
0% 1
,909
,100
2
,100
,462
2
,100
,462
Fin
anci
al G
uara
ntee
1,6
00
-
338
1
,263
10
0% 1
,263
1
,318
1
,318
Acc
epta
nces
and
End
orse
men
ts
1,1
72,0
22
-
404
1
,171
,618
10
0% 1
,171
,618
1
,728
,771
1
,728
,771
Unp
aid
port
ion
of P
artly
pai
d sh
ares
and
Sec
uriti
es
-
-
-
-
100%
-
-
-
Irre
voca
ble
Cred
it co
mm
itmen
ts (s
hort
term
) 1
9,22
8,72
1 -
-
1
9,22
8,72
1 20
% 3
,845
,744
1
0,73
1,97
2 2
,146
,394
Irre
voca
ble
Cred
it co
mm
itmen
ts (l
ong
term
) -
-
-
-
50
% -
-
-
“Cla
ims
on fo
reig
n ba
nk in
corp
orat
ed in
SA
AR
C re
gion
ope
ratin
g w
ith
a bu
ff er o
f 1%
abo
ve th
eir r
espe
ctiv
e re
gula
tory
cap
ital r
equi
rem
ent”
1,4
11,4
34
-
-
1,4
11,4
34
20%
282
,287
1
,231
,875
2
46,3
75
Oth
er C
ontin
gent
Lia
bilit
ies
1
75,0
96
-
-
175
,096
10
0% 1
75,0
96
146
,100
1
46,1
00
Unp
aid
Gua
rant
ee C
laim
s -
-
-
-
20
0% -
-
-
TOTA
L63
,548
,344
-
1
0,41
8,38
6 5
3,12
9,95
8
18,
275,
261
45,
676,
581
16,
643,
238
Tota
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r cr
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k19
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4,38
5 4
01,0
70
10,
805,
341
180
,817
,973
112
,632
,092
1
50,3
10,7
70
95,
709,
597
Adj
ustm
ents
und
er P
illar
II
Add
: 10
% o
f the
loan
and
faci
litie
s in
exc
ess
of S
ingl
e Ob
ligor
Lim
its
6.4
a 3)
Add
: 1%
of t
he c
ontr
act (
sale
) val
ue in
cas
e of
the
sale
of c
redi
t with
re
cour
se (6
.4 a
4)
Tota
l RW
E fo
r Cr
edit
Ris
k ( A
� er
Ban
k’s
adju
stm
ents
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www.nmbbanknepal.com134
Elig
ible
Cre
dit R
isk
Miti
gant
s20
76 A
shad
Am
ount
in th
ousa
nds
Cred
it ex
posu
res
D
epos
its
with
Ban
k
Dep
osits
w
ith o
ther
B
anks
/FI
Gol
d G
ovt.&
N
RB
Se
curi
ties
G'te
e of
G
ovt.
of
Nep
al
Sec/
G'te
e of
Oth
er
Sove
reig
ns
G'te
e of
do
mes
tic
bank
s
G'te
e of
M
DB
s
Sec/
G'te
e of
For
eign
B
anks
To
tal
(a)
(
b)
(c)
(
d)
(e)
(
f)
(g)
(h
) (
i)
Bal
ance
She
et E
xpos
ures
1Ca
sh B
alan
ce -
-
-
-
-
-
-
-
-
-
2B
alan
ce W
ith N
epal
Ras
tra
Ban
k -
-
-
-
-
-
-
-
-
-
3G
old
-
-
-
-
-
-
-
-
-
-
4In
vest
men
t in
Nep
ales
e G
over
nmen
t Sec
uriti
es -
-
-
-
-
-
-
-
-
-
5A
ll Cl
aim
s on
Gov
ernm
ent o
f Nep
al -
-
-
-
-
-
-
-
-
-
6In
vest
men
t in
Nep
al R
astr
a B
ank
secu
ritie
s -
-
-
-
-
-
-
-
-
-
7A
ll cl
aim
s on
Nep
al R
astr
a B
ank
-
-
-
-
-
-
-
-
-
-
8Cl
aim
s on
For
eign
gov
ernm
ent a
nd C
entr
al B
ank
(ECA
-1)
-
-
-
-
-
-
-
-
-
-
9Cl
aim
s on
For
eign
gov
ernm
ent a
nd C
entr
al B
ank
(ECA
-2)
-
-
-
-
-
-
-
-
-
-
10Cl
aim
s on
For
eign
gov
ernm
ent a
nd C
entr
al B
ank
(ECA
-3)
-
-
-
-
-
-
-
-
-
-
11Cl
aim
s on
For
eign
gov
ernm
ent a
nd C
entr
al B
ank
(ECA
-4-6
) -
-
-
-
-
-
-
-
-
-
12Cl
aim
s on
For
eign
gov
ernm
ent a
nd C
entr
al B
ank
(ECA
-7)
-
-
-
-
-
-
-
-
-
-
13Cl
aim
s on
BIS
, IM
F, E
CB, E
C A
nd M
ultil
ater
al D
evel
opm
ent
Ban
ks -
-
-
-
-
-
-
-
-
-
14Cl
aim
s on
Oth
er M
ultil
ater
al D
evel
opm
ent B
anks
-
-
-
-
-
-
-
-
-
-
15Cl
aim
s on
Pub
lic S
ecto
r Ent
ity (E
CA 0
-1)
-
-
-
-
-
-
-
-
-
-
16Cl
aim
s on
Pub
lic S
ecto
r Ent
ity (E
CA 2
) -
-
-
-
-
-
-
-
-
-
17Cl
aim
s on
Pub
lic S
ecto
r Ent
ity (E
CA 3
-6)
-
-
-
-
-
-
-
-
-
-
18Cl
aim
s on
Pub
lic S
ecto
r Ent
ity (E
CA 7
) -
-
-
-
-
-
-
-
-
-
19Cl
aim
s on
dom
estic
ban
ks th
at m
eet c
apita
l ade
quac
y re
quire
men
ts -
-
-
-
-
-
-
-
-
-
20Cl
aim
s on
dom
estic
ban
ks th
at d
o no
t mee
t cap
ital
adeq
uacy
requ
irem
ents
-
-
-
-
-
-
-
-
-
-
21Cl
aim
s on
fore
ign
bank
(ECA
Rat
ing
0-1)
-
-
-
-
-
-
-
-
-
-
NMB Annual Report-2018/19 135
22Cl
aim
s on
fore
ign
bank
(ECA
Rat
ing
2) -
-
-
-
-
-
-
-
-
-
23Cl
aim
s on
fore
ign
bank
(ECA
Rat
ing
3-6)
-
-
-
-
-
-
-
-
-
-
24Cl
aim
s on
fore
ign
bank
(ECA
Rat
ing
7) -
-
-
-
-
-
-
-
-
-
25Cl
aim
s on
fore
ign
bank
inco
rpor
ated
in S
AA
RC
regi
on
oper
atin
g w
ith a
buff
er o
f 1%
abo
ve th
eir r
espe
ctiv
e re
gula
tory
cap
ital r
equi
rem
ent
-
-
-
-
-
-
-
-
-
-
26Cl
aim
s on
Dom
estic
Cor
pora
tes
-
-
-
-
-
-
-
-
-
-
27Cl
aim
s on
For
eign
Cor
pora
tes
(ECA
0-1
) -
-
-
-
-
-
-
-
-
-
28Cl
aim
s on
For
eign
Cor
pora
tes
(ECA
2)
-
-
-
-
-
-
-
-
-
-
29Cl
aim
s on
For
eign
Cor
pora
tes
(ECA
3-6
) -
-
-
-
-
-
-
-
-
-
30Cl
aim
s on
For
eign
Cor
pora
tes
(ECA
7)
-
-
-
-
-
-
-
-
-
-
31R
egul
ator
y R
etai
l Por
tfolio
(Not
Ove
rdue
) -
-
-
-
-
-
-
-
-
-
32Cl
aim
s fu
lfi lli
ng a
ll cr
iterio
n of
regu
lato
ry re
tail
exce
pt
gran
ular
ity
-
-
-
-
-
-
-
-
-
-
33Cl
aim
s se
cure
d by
resi
dent
ial p
rope
rtie
s
-
-
-
-
-
-
-
-
-
-
34Cl
aim
s no
t ful
ly s
ecur
ed b
y re
side
ntia
l pro
pert
ies
-
-
-
-
-
-
-
-
-
-
35Cl
aim
s se
cure
d by
resi
dent
ial p
rope
rtie
s (O
verd
ue)
-
-
-
-
-
-
-
-
-
-
36Cl
aim
s se
cure
d by
Com
mer
cial
real
est
ate
-
-
-
-
-
-
-
-
-
-
37Pa
st d
ue c
laim
s (e
xcep
t for
cla
im s
ecur
ed b
y re
side
ntia
l pr
oper
ties)
-
-
-
-
-
-
-
-
-
-
38H
igh
Ris
k cl
aim
s
382,
466
-
-
4,48
9 -
-
-
-
-
38
6,95
5
39In
vest
men
ts in
equ
ity a
nd o
ther
cap
ital i
nstr
umen
ts o
f in
stitu
tions
list
ed in
the
stoc
k ex
chan
ge
-
-
-
-
-
-
-
-
-
-
40In
vest
men
ts in
equ
ity a
nd o
ther
cap
ital i
nstr
umen
ts o
f in
stitu
tions
not
list
ed in
the
stoc
k ex
chan
ge
-
-
-
-
-
-
-
-
-
-
41Ot
her A
sset
s (a
s pe
r atta
chm
ent)
-
-
-
-
-
-
-
-
-
-
Tota
l38
2,46
6 -
-
4,
489
-
-
-
-
-
386,
955
Off B
alan
ce S
heet
Exp
osur
es
Forw
ard
Exch
ange
Con
trac
t Lia
bilit
ies
-
-
-
-
-
-
-
-
-
-
LC C
omm
itmen
ts W
ith O
rigin
al M
atur
ity U
pto
6 m
onth
s do
mes
tic c
ount
erpa
rty
18
3,53
8
21
9,12
1
402,
659
Fore
ign
coun
terp
arty
(ECA
Rat
ing
0-1)
-
-
-
-
-
-
-
-
-
-
Fore
ign
coun
terp
arty
(ECA
Rat
ing
2)
-
-
-
-
-
-
-
-
-
-
www.nmbbanknepal.com136
Fore
ign
coun
terp
arty
(ECA
Rat
ing
3-6)
-
-
-
-
-
-
-
-
-
-
Fore
ign
coun
terp
arty
(ECA
Rat
ing
7)
-
-
-
-
-
-
-
-
-
-
LC C
omm
itmen
ts W
ith O
rigin
al M
atur
ity O
ver 6
mon
ths
dom
estic
cou
nter
part
y
818,
421
3,18
3,88
4
4,00
2,30
5
Fore
ign
coun
terp
arty
(ECA
Rat
ing
0-1)
-
-
-
-
-
-
-
-
-
-
Fore
ign
coun
terp
arty
(ECA
Rat
ing
2)
-
-
-
-
-
-
-
-
-
-
Fore
ign
coun
terp
arty
(ECA
Rat
ing
3-6)
-
-
-
-
-
-
-
-
-
-
Fore
ign
coun
terp
arty
(ECA
Rat
ing
7)
-
-
-
-
-
-
-
-
-
-
Bid
Bon
d, P
erfo
rman
ce B
ond
and
Coun
ter g
uara
ntee
do
mes
tic c
ount
erpa
rty
29
5,66
4
-
295,
664
Fore
ign
coun
terp
arty
(ECA
Rat
ing
0-1)
-
1,24
7,40
0 1,
247,
400
Fore
ign
coun
terp
arty
(ECA
Rat
ing
2)
-
-
4,22
6,68
4 4,
226,
684
Fore
ign
coun
terp
arty
(ECA
Rat
ing
3-6)
-
-
-
-
-
-
-
-
-
-
Fore
ign
coun
terp
arty
(ECA
Rat
ing
7)
-
-
-
-
-
-
-
-
-
-
Und
erw
ritin
g co
mm
itmen
ts
-
-
-
-
-
-
-
-
-
-
Lend
ing
of B
ank'
s Se
curit
ies
or P
ostin
g of
Sec
uriti
es a
s co
llate
ral
-
-
-
-
-
-
-
-
-
-
Rep
urch
ase
Agr
eem
ents
, Ass
ets
sale
with
reco
urse
-
-
-
-
-
-
-
-
-
-
Adv
ance
Pay
men
t Gua
rant
ee
242
,931
-
242
,931
Fina
ncia
l Gua
rant
ee
338
-
338
Acc
epta
nces
and
End
orse
men
ts
404
-
404
Unp
aid
port
ion
of P
artly
pai
d sh
ares
and
Sec
uriti
es
-
-
-
-
-
-
-
-
-
-
Irrev
ocab
le C
redi
t com
mitm
ents
(Sho
rt T
erm
) -
-
-
-
-
-
-
-
-
-
Irrev
ocab
le C
redi
t com
mitm
ents
(Lon
g Te
rm)
-
-
-
-
-
-
-
-
-
-
Clai
ms
on fo
reig
n ba
nk in
corp
orat
ed in
SA
AR
C re
gion
op
erat
ing
with
a b
uff e
r of 1
% a
bove
thei
r res
pect
ive
regu
lato
ry c
apita
l req
uire
men
t -
-
-
-
-
-
-
-
-
-
Othe
r Con
tinge
nt L
iabi
litie
s
-
-
-
-
-
-
-
-
-
-
Tota
l1,
541,
296
-
-
-
-
-
-
3,40
3,00
6 5,
474,
085
10,4
18,3
86
Tota
l Cre
dit R
isk
Expo
sure
1,92
3,76
2 -
-
4,
489
-
-
-
3,40
3,00
6 5,
474,
085
10,8
05,3
41
NMB Annual Report-2018/19 137
Market Risk Exposures2076 Ashad
Amount in thousands
S.No. Currency
2076 Ashad End 2075 Ashad End Relevant Open
PositionOpen Position (FCY) Open Position (NPR) Relevant Open Position
1 INR (2,647,689) (4,238,289) 4,238,289 3,913,111
2 USD 85.2 9,363 9,363 23,693
3 GBP (12.5) (1,708) 1,708 1,744
4 CHF (4.2) (470) 470 47
5 EUR (49.3) (6,082) 6,082 1,422
6 JPY (426.7) (434) 434 13,827
7 SEK (1.0) (12) 12 0
8 DKK (10.0) (165) 165 155
9 HKD (11.2) (157) 157 112
10 AUD (62.6) (4,859) 4,859 1,166
11 SGD (72.9) (5,902) 5,902 1,379
12 KRW (322.9) (30) 30 17,630
13 AED (56.0) (1,675) 1,675 291
14 MYR (118.4) (3,168) 3,168 2,947
15 THB (27.0) (96) 96 191
16 QAR (107.4) (3,257) 3,257 2,126
17 CNY (161.0) (2,571) 2,571 3,235
18 CAD (69.3) (5,833) 5,833 368
19 SAR (186.6) (5,466) 5,466 5,056
20 KWD (0.4) (160) 160 81
21 BHD (0.0) (14) 14 2
Total Open Position (a) 4,289,712 3,988,583
Fixed Percentage (b) 5% 5%
Capital Charge for Market Risk [c=(a×b)] 214,486 199,429
Risk Weight (reciprocal of capital requirement of 10%) in times (d) 10 10
Equivalent Risk Weight Exposure [e=(c×d)] 2,144,860 1,994,290
www.nmbbanknepal.com138
Operation Risk Exposures2076 Ashad
Amount in thousands
ParticularsYears before 2076 Ashar End
2072/73 2073/74 2074/75
Net Interest Income 2,013,282 2,603,980 2,904,014
Commission and Discount Income 197,616 635,069 794,250
Other Operating Income 218,106 121,978 164,962
Exchange Fluctuation Income 160,269 154,790 299,606
Addition/Deduction in Interest Suspense during the period 3,412 (3,072) (33,010)
Gross income (a) 2,592,684 3,512,744 4,129,822
Alfa (b) 15% 15% 15%
Fixed Percentage of Gross Income [c=(a×b)] 388,903 526,912 619,473
Capital Requirement for operational risk (d) (average of c) 511,763
Risk Weight (reciprocal of capital requirement of 10%) in times (e) 10
Equivalent Risk Weight Exposure [f=(d×e)] 5,117,630
Adjustments under Pillar II
If Gross Income for all the last three years is negative (6.4 a 8)
Total Credit and Investments (net of specifi c Provision)
Capital Requirement for Operational Risk (5%)
Risk Weight (reciprocal of capital requirement of 10% ) in times 10
Equivalent Risk Weight Exposure (g)
Equivalent Risk Weight Exposure (h= f + g)
NMB Annual Report-2018/19 139
29. Operating Segments
a) General Information:The bank has identifi ed its segments on the basis of geographical location as per provinces of the country. The bank supervises, manages and controls its branch networks through regional demarcations. All the transactions have been done at the arm’s length prices between the segments with intra segment revenue and cost being eliminated at the Head Offi ce. Interest earnings and foreign exchange gains/losses generated while conducting businesses under diff erent segments are reported under the respective segment. Equity and Tax Expense are not allocated to the individual segments. For segmentation purpose, all business transactions of offi ces and business units located in a particular province are grouped together.
b) Description of the types of products and services from which each reportable segment derives its revenues
The products and services off ered by the Bank can be broadly divided into the following categories:
1. Retail Banking: Retail banking, also known as consumer banking, is the provision of services by a bank to the general public, rather than to companies, corporations or other banks. Banking services which are regarded as retail include provision of savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.
2. Corporate, SME and Institutional (except Retail): The corporate and institutional banking segment of banks typically serves a diverse range of clients, ranging from small- to mid-sized local businesses with a few millions in revenues to large conglomerates with billions in sales and offi ces across the country.
3. Treasury Unit – The unit has two divisions – Front and back treasury operations. It operates within the consideration of the foreign exchange rules and regulations under the guidance of Nepal Rastra Bank (NRB) – central bank of Nepal. The major functions are exchange rate updation, check foreign currency position, fund management, deal T-bills/ bond, interbank placements, forward contract and other treasury research.
4. Trade Finance - The Bank’s trade fi nance operations like LC, Guarantee etc are handled by trade fi nance.
5. Others
www.nmbbanknepal.com140
c) In
form
atio
n ab
out p
rofi t
or l
oss,
ass
ets
and
liabi
litie
s
Part
icul
ars
Ret
ail
SME
& M
SME
Corp
orat
eD
epri
ved
Trea
sury
Oth
ers
Tot
al
aR
even
ues
from
ext
erna
l cu
stom
ers
2,26
8,23
0,11
2 3,
429,
754,
519
5,17
9,01
7,57
3 48
8,91
6,74
5 1,
171,
656,
745
15,9
87,1
13
12,5
53,5
62,8
07
bIn
ters
egm
ent r
even
ues
2,26
7,74
7,74
1 (1
,708
,229
,106
)(1
43,7
68,8
43)
(258
,527
,047
)23
5,68
7,42
8 (3
92,9
10,1
74)
-
cN
et R
even
ue4,
535,
977,
853
1,72
1,52
5,41
2 5,
035,
248,
731
230,
389,
699
1,40
7,34
4,17
3 (3
76,9
23,0
61)
12,5
53,5
62,8
07
dIn
tere
st R
even
ue4,
240,
021,
117
3,18
6,75
6,44
7 4,
745,
129,
094
481,
873,
376
931,
714,
166
-13
,585
,494
,201
e In
tere
st E
xpen
se
3,57
3,28
7,35
4 1,
716,
632,
371
3,08
0,53
6,50
7 27
2,65
5,96
1 30
5,45
0,88
7 39
2,91
0,17
4 9,
341,
473,
255
fN
et In
tere
st R
even
ue (b
)66
6,73
3,76
3 1,
470,
124,
077
1,66
4,59
2,58
7 20
9,21
7,41
6 62
6,26
3,27
9 (3
92,9
10,1
74)
4,24
4,02
0,94
6
gD
epre
ciat
ion
and
amor
tizat
ion
21,7
63,7
19
38,6
48,1
31
55,3
54,0
15
6,01
7,22
4 38
,246
,646
16
,763
,620
17
6,79
3,35
5
hSe
gmen
t pro
fi t/(
loss
)50
9,75
1,84
7 93
9,71
3,32
5 1,
247,
385,
933
118,
678,
584
657,
627,
518
(225
,153
,374
)3,
248,
003,
834
iEn
tity’s
inte
rest
in th
e pr
ofi t
or lo
ss o
f ass
ocia
tes
acco
unte
d fo
r usi
ng e
quity
met
hod
- N
ot A
pplic
able
jOt
her
mat
eria
l ite
ms
--
--
--
-
-Loa
n an
d ad
vanc
es16
,676
,757
,733
29
,614
,677
,002
42
,415
,796
,971
4,
610,
783,
213
--
93,3
18,0
14,9
20
-Dep
osits
50,9
75,0
19,2
03
1,43
7,71
2,79
3 45
,667
,120
,804
43
6,81
4,16
4 -
-98
,516
,666
,963
kIm
pairm
ent o
f ass
ets
64,7
97,2
24
86,0
65,0
07
5,02
1,09
5 10
,389
,307
-
-16
6,27
2,63
4
lSe
gmen
t ass
ets
16,6
76,7
57,7
33
29,6
14,6
77,0
02
42,4
15,7
96,9
71
4,61
0,78
3,21
3 29
,307
,033
,685
12
,845
,360
,968
13
5,47
0,40
9,57
3
m S
egm
ent l
iabi
litie
s 56
,905
,709
,806
1,
604,
983,
544
50,9
80,2
63,7
60
487,
635,
325
6,96
3,61
3,40
1 18
,528
,203
,737
13
5,47
0,40
9,57
3
NMB Annual Report-2018/19 141
d) Measurement of operating segment profi t or loss, assets and liabilities
a. Basis of accounting for any transactions between reportable segments:
The Bank is organised for management and reporting purposes into segments such as: Retail, SME and MSME, Corporate, Deprived, Treasury and Others. The Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Income tax is managed on a group basis and are not allocated to operating segments. All transactions between segments are conducted on an arm’s length basis, with inter-segment revenue and costs being eliminated in “Others”. Support costs are also allocated to Retail, Corporate, SME and MSME, Deprived, Treasury and others based on Management’s estimates of the benefi ts accruing to these segments for the costs incurred.
ii. Nature of any diff erences between the measurements of the reportable segment’s profi ts or losses and the entity’s profi t or loss before income tax
Noneii. Nature of any diff erences between the measurements of the reportable segment’s assets and the entity’s assets. Noneiii. Nature of any changes from prior periods in the measurement methods used to determine reported segment
profi t or loss and the eff ect, if any, The bank has segmental division based upon the business segment and geographical segment also.IV. Nature and eff ect of any asymmetrical allocations to reportable segments None
e) Reconciliations of reportable segment revenues, profi t or loss, assets and liabilities
a Revenue Particulars Amount Total Revenues for reportable segments 15,057,493,205 Other Revenues - Elimination of intersegment revenues 2,503,930,399 Entity’s Revenues 12,553,562,807
b Profi t or Loss Particulars Amount Total profi t or loss for reportable segments 3,248,003,834 Other profi t or loss - Elimination of intersegment profi ts - Unallocated amounts - Profi t before income tax 3,248,003,834
www.nmbbanknepal.com142
c Assets Particulars Amount Total assets for reportable segments 135,470,409,573 Other assets - Unallocated amounts - Entity’s assets 135,470,409,573
d Liabilities Particulars Amount Total liabilities for reportable segments 135,470,409,573 Other liabilities - Unallocated amounts - Entity’s liabilities 135,470,409,573
f) Information about products and services
Particulars Amount (Fees Income)
Retail Banking 295,956,736
Corporate, SME & Institutional 659,232,784
Treasury 475,630,007
Trade Finance 17,653,766
Others 16,482,342
Total 1,464,955,635
g) Information about geographical areas
Particulars Revenue (Amount )
a Domestic 12,553,562,807
- Province 1 1,619,728,598
- Province 2 804,921,236
- Province 3 8,213,080,874
- Gandaki Province 252,978,830
- Province 5 1,317,855,766
- Karnali Province 69,152,848
- Far Western Province 275,844,655
b Foreign -
Total (a+b) 12,553,562,807
NMB Annual Report-2018/19 143
h) Information about major customers
Information about the extent of its reliance on its major customers, if revenue from a single external customer amounts to 10 percent or more of the entity’s revenue.
Not Applicable
30. Share options and share based payment
The Group does not have any share options or share-based payment transactions in the reporting period or in earlier period.
31. Merger and Acquisition
The Group has not entered into any merger and acquisition activities in the reporting period and in the comparative previous period. However, the Bank had signed Memorandum of Understanding dated 16 May 2019 with Om Development Bank Limited (ODBL) to merge ODBL with NMB Bank. Ast er obtaining necessary regulatory approvals, both the Banks commenced joint operations from 28 September 2019 (11 Ashwin 2076) as NMB Bank Limited.
Erstwhile ODBL was a Pokhara based National Level Development Bank Limited with Paid -up Capital of NPR 2.51 Bio and Reserve and Surplus of NPR 1.4 Bio. as on Mid July 2019. ODBL had a Branch network of 53 and 19 ATMs with total Deposit mobilization of 25 Billion and Loan and Advances totalling 22 Billion. The merger was driven by NMB Bank’s strategic intent to have a strong presence in Province 4 where a majority of erstwhile ODBL’s branches are located. The shareholders of ODBL were provided with a swap ratio of 1:0.76.
32. Additional disclosures of non-consolidated entities
The Group does not have any non-consolidated entities to report for the reporting period and in the comparative previous period.
33. Events ast er the Balance Sheet Date
No circumstances have arisen since the Balance Sheet date which would require adjustments to or disclosure in the Financial Statements other than those disclosed in the notes.
www.nmbbanknepal.com144
34. Related Party Disclosures
(a) Board Member Allowances and FacilitiesThe Board of Directors has been paid meeting fees of NPR 1,659,000 during the fi scal year. There were 27 Board Meeting conducted during the interim period.
The Chairperson and other members of the Board are paid NPR 13,000 and NPR 12,000 per meeting respectively for Board and Board Level Committees.
The Meeting fees paid to diff erent Board Level Committees are as follows:
Board Level Committees No of Meetings Meeting Allowance (NPR)
Audit Committee 17 396,000
Risk Management Committee 19 444,000
Human Resource Service Committee 6 132,000
Building Construction Sub-Committee 7 180,000
Assets Laundering Prevention Committee 4 72,000
Merger Committee 9 324,000
As approved by the 18th Annual General Meeting held on 4 Poush 2070, the Board Members have been provided with a monthly allowance of NPR 8,000 for telephone, newspaper and mobile expenses till Falgun End 2075. From Chaitra 2075 monthly allowance of NPR 12,000 is paid as per 23rd Annual General Meeting held on Poush 26 2075. The total amount paid as monthly allowances to the board members during the reporting period amounted to NPR 624,000.
Existing members of the Board are:
i) Mr. Pawan Kumar Golyan Chairman (Represents Group – Promoter Shareholder)
ii) Mr. Nico Klass Geradus Pijl Member (Representative from FMO)
iii) Ms. Rajendra Kafl e Member (Representative from Employees Provident Fund)
iv) Mr. Harishchandra Subedi Member (Represents Group – Public Shareholder)
v) Mr. Pradeep Raj Pandey Independent Director
vi) Mr. Nand Kishor Rathi Alternate Director to Mr. Nico Pijl
(b) Loans and Advances extended to Promoters
There are no such loans extended to promoters.
NMB Annual Report-2018/19 145
(c) Compensation Details for Key Management Personnel
Key Management Personnel includes members of Executive Committee of the Bank.
S.No Particulars Amount
A Short Term Employee Benefi ts 63,851,298
B Post-Employment Benefi ts Nil
C Other Long Term Benefi ts Nil
D Termination Benefi ts (Gratuity and Sick Leave Encashment) Nil
E Share Based Payment Nil
Total of Key Management Personnel Compensation 63,851,298
The Salary and benefi ts paid to CEO is as follow:
Particulars Basic Salary Provident Fund Allowance Bonus &
WelfareOther
Perquisites Total Income
C.E.O 5,904,000 590,400 5,248,000 4,737,609 208,860 16,688,869
Total 5,904,000 590,400 5,248,000 4,737,609 208,860 16,688,869
Key management personnel are also provided with the following benefi ts:i) Benefi ts as per the Employee Terms of Service By-laws,ii) Bonus to staff as per the Bonus Act,iii) Vehicle Fuel Expenses as per the Bank’s Staff Vehicle Scheme.
Existing members of Executive Committee include:
Mr. Sunil KC Chief Executive Offi cer
Mr. Pradeep Pradhan Chief Operating Offi cer
Ms. Shabnam Limbu Joshi Chief Human Resource Offi cer
Mr. Sharad Tegi Tuladhar Chief Risk Offi cer
Mr. Sudesh Upadhyaya Chief Business and Strategy Offi cer
Mr. Govind Ghimire Chief Business Offi cer
Mr. Navin Manandhar Chief Finance Offi cer
Mr. Pramod Dahal Chief Internal Audit and AML/CFT Offi cer
Mr. Roshan Regmi Head Product Digital Channel and Retail Sales
www.nmbbanknepal.com146
(d) Transaction with SubsidiariesAmount in Thousand
S No Particulars NMB Capital NMB Micro Finance
1 Investment by NMB Bank Ltd. 200,000 48,552
2 Deposits in NMB Bank Ltd. 140,104 4,255
3 Borrowing from NMB Bank Ltd. - 600,000
4 Interest Payment by NMB Bank Ltd. 2,138 -
5 Interest Payment to NMB Bank Ltd. - 65,077
6 Rent Payment to NMB Bank Ltd. 2,173 -
7 Management Fee Payment to NMB Bank 2,400 -
8 Share Registrar Fee payment by NMB Bank 762
9 Investment by NMB Bank Ltd. in NMB Sulav Investment Fund-1 as Seed Capital
105,000 -
10 Investment by NMB Bank Ltd in NMB Hybrid Fund-1 as Seed Capital
140,000 -
11 Dividend Distribution of NMB Sulav Investment Fund-1 to NMB Bank Ltd.
22,105 -
12 Dividend Distribution of NMB Capital Ltd. to NMB Bank Ltd. for FY 2074.75
38,000 -
The intra-group related fi gures have been excluded for presentation of the fi nancial statement of the Group.
NMB Annual Report-2018/19 147
Disclosure under New Capital Adequacy Framework for the Year Ended Ashad 2076
Amounts in NPR Thousands
1. Capital Managementa. The bank assesses the impact of the new rules, if any on their capital adequacy through a comprehensive capital planning and optimisation/mitigation process. The capital planning is an integral part of the Bank’s medium term strategic planning and annual budget formulation process. Total risk weighted exposures for the projected level of business operations is calculated, the required capital level is projected, and a plan is formulated to maintain the required capital.
The bank has not raised any capital through hybrid capital instruments till 16 July 2019.
2. Capital Structure and Capital Adequacy:
2.1. Tier 1 Capital and a breakdown of its Components:
S.No. Details Amount
1. Paid up Equity Share Capital 9,618,163
2. Share Premium 2,512,799
3. Proposed Bonus Equity Shares -
4. Statutory General Reserves 2,123,307
5. Retained Earnings 1,780,327
6. Capital Adjustment Reserve 57,326
7. Deferred Tax Reserves -
8. Deferred Tax Assets -
9. Debenture Redemption Reserve 400,000
10. Less: Investment in equity of institutions with fi nancial interest (210,000)
11. Less: Intangible Assets (115,409)
Total Core Capital 16,166,512
2.2.Tier 2 Capital and a breakdown of its Components:
S.No Details Amount
1. Subordinated Term Debt 1,784,505
2. General Loan Loss Provision 1,011,982
3. Exchange Equalization Reserve 78,377
4. Investment Adjustment Reserve 10,000
5. Other Reserve 10,000
Total Supplementary Capital 2,894,863
www.nmbbanknepal.com148
2.3. Detailed information about the Subordinated Term Debts with information on the outstanding amount, maturity, and amount rose during the year and amount eligible to be reckoned as capital funds.
The Bank had issued “7% NMB Debenture 2077” on 6 Falgun 2071 amounting to NPR 500 Million having a maturity of 5 years 6 months. The Debenture was fully subscribed. As at the year end, the outstanding amount of Debenture is 500 Million whereas NPR 100 Million is only eligible to be recognized as capital funds (Tier 2). To refl ect the diminishing value of these instruments as a continuing source of strength, a cumulative discount (amortization) factor of 20% per annum has been applied for capital adequacy computations, during the last 5 years to maturity.
During the fi scal year, the bank has also issued 3 million units of NMB Debenture 2085 with the face value of NPR. 1000 per unit amounting NPR 3 Billion at the rate of 10% for the period of 10 years. The General public had subscribed 99,505 units amounting NPR. 99,505,000 and 1,585,000 units amounting NPR. 1,585,000,000 was subscribed through Private Placements. The fi nal allotment of NPR. 1,684,505,000 to the subscribed unit holders was made on 29 Chaitra 2075. To refl ect the diminishing value of these instruments as a continuing source of strength, a cumulative discount (amortization) factor of 20% per annum will be applied for capital adequacy computations, during the last 5 years to maturity.
The amortized cost of debenture as on fi scal year end is NPR. 2,239,236,412.
2.4. Deductions from Capital:
Investment in equity shares of fully owned subsidiary company NMB Capital Ltd amounting to NPR 200,000,000 and CEDB Hydro Fund amounting to NPR 10,000,000 has been deducted from Tier 1 Capital.
Similarly, the amount of deferred tax reserve has been separately credited to Regulatory reserve, which is not considered for the purpose of capital ratios.
Intangible asset has also been deducted as per NRB Directive by NPR 115,408,800.
2.5. Total Qualifying Capital:
S.No Details Amount
1. Core Capital (Tier 1) 16,166,512
2. Supplementary Capital (Tier 2) 2,894,863
Total Capital Fund 19,061,375
2.6. Capital Adequacy Ratio:
S.No Details Percentage
1. Tier 1 Capital to Total Risk Weighted Exposure 13.09%
2. Tier 1 and Tier 2 Capital to Total Risk Weighted Exposure 15.43%
NMB Annual Report-2018/19 149
2.7. Summary of the terms, conditions and main features of all capital instruments, especially in case of subordinated term debts including hybrid capital instruments.
The capital instruments of the Bank include fully paid up Equity Shares and Debenture. Both are non-convertible. The main features of Debenture have been mentioned under S.No 2.3 above.
3. Risk Exposures:
3.1. Risk Weighted Exposures for Credit Risk, Market Risk and Operational Risk:
S.No Risk Weighted Exposure Amount
a. Risk Weighted Exposure for Credit Risk 112,632,092
b. Risk Weighted Exposure for Operational Risk 5,117,630
c. Risk Weighted Exposure for Market Risk 2,144,860
Total Risk Weighted Exposures (a+b+c) 119,894,582
Add: RWE equivalent to reciprocal of capital charge of 3 % of gross income. 1,238,947
Add : 2% of the total RWE due to Supervisory add up 2,397,892
Add: 2% of total RWE, Desired level of disclosure requirement has not been achieved. -
Total Risk Weighted Exposures (A� er Bank’s adjustments of Pillar II) 123,531,421
3.2. Risk Weighted Exposures under each of categories of Credit Risk:
S.No Particulars Amount
1. Claims on government and Central Bank NIL
2. Claims on other Offi cial Entities NIL
3. Claims on Bank 3,187,301
4. Claims on Domestic Corporate and Securities Firms 65,675,730
5. Claims on Foreign Corporate Nil
6. Claims on Regulatory Retail Portfolio 7,059,846
7. Claims fulfi lling all criterion of regulatory retail except granularity Nil
8. Claims secured by Residential Properties 6,233,714
9. Claims not fully secured by residential properties Nil
10. Claims secured by Residential Properties (Overdue) 83,096
11. Claims secured by Commercial Real Estate 376,363
12. Past Due Claims 784,212
13. High Risk Claims 6,402,895
14. Lending against securities (bonds & shares) 294,605
15. Investments 923,545
16. Other Assets 3,335,525
17. Off Balance sheet items 18,275,261
Total 112,632,092
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3.3. Total Risk Weighted Exposure calculation table:
S.No Particulars Amount
a. Risk Weighted Exposure for Credit Risk 112,632,092
b. Risk Weighted Exposure for Operational Risk 5,117,630
c. Risk Weighted Exposure for Market Risk 2,144,860
1. Total Risk Weighted Exposure 119,894,582
Add: RWE equivalent to reciprocal of capital charge of 3 % of gross income. 1,238,947
Add : 2% of the total RWE due to Supervisory add up 2,397,892
Add: 2% of total RWE, Desired level of disclosure requirement has not been achieved. -
Total Risk Weighted Exposures (A� er Bank’s adjustments of Pillar II) 123,531,421
2. Total Core Capital Fund (Tier 1) 16,166,512
3. Total Capital Fund ( Tier 1 & Tier 2) 19,061,375
4. Total Core Capital to Total Risk Weighted Exposures (%) 13.09%
5. Total Capital to Total Risk Weighted Exposures (%) 15.43%
3.4. Amount of Non-Performing Assets (NPAs)
S.No Category Gross Provision Net
1. Restructured/Rescheduled 96,884 22,043 74,841
2. Substandard 219,452 54,863 164,589
3. Doubtful 260,090 130,045 130,045
4. Loss 179,992 179,992 -
Total 756,418 386,943 369,475
3.5. NPA Ratio Gross NPA to Gross Advances: 0.82% Net NPA to Net Advances: 0.41%
3.6 Movement of Non-Performing Assets
S.No Particulars Ashad End 2075 Ashad End 2076 Movement
1. Restructure/Reschedule Loan 1,361 96,884 95,523
2. Substandard 172,303 219,452 47,149
3. Doubtful 255,984 260,090 4,106
4. Loss 239,663 179,992 (59,671)
Total Non-Performing Loan 669,311 756,418 87,107
NMB Annual Report-2018/19 151
3.7. Movement of Loan Loss Provision and Interest Suspense on loans & advances
S.No Category Ashad End 2075 Ashad End 2076 Movement
1. Pass 778,735 888,849 110,902
2. Watch List 42,998 123,132 79,346
3. Restructured 189 22,043 21,854
4. Substandard 43,076 54,863 11,787
5. Doubtful 127,992 130,045 2,053
6. Loss 239,663 179,992 (59,671)
Total Loan Provision 1,232,653 1,398,925 166,272
Accrued Interest Receivable (including staff ) 222,679 697,364 474,684
Ast er change of Core Banking System, the interest on majority of risk assets portfolio are due as per English Calender due to which approximately a fortnight’s interest income are not realized as of fi scal year end 2076.
As per NRB Interest Income Recognition Guideline, the interest amount of NPR. 32,210,184.75 has been reversed and credited to Interest Suspense during the reporting period.
3.8. Details of Additional Loan Loss Provision
S.No Category Ashad End 2076
1. Pass -
2. Watch List 10,851
3. Restructured -
4. Substandard -
5. Doubtful -
6. Loss -
Total Additional Loan Loss Provision 10,851
3.9. Eligible Credit Risk Mitigants (CRM) availed
As per the provisions of the New Capital Adequacy Framework, the bank has claimed all the eligible credit risk Mitigants of NPR 10,805,341 thousands for Balance Sheet and Off Balance Sheet exposures and availed benefi t thereof.
www.nmbbanknepal.com152
4. Compliance with external requirement
The bank is subject to compliance requirement under NRB Directive No.1/075 which has stipulated a minimum Total Capital Adequacy Ratio (CAR) of 11.00%. The Bank complied with this requirement at all times during the reporting period. The compliance position at the reporting date is given below:
Capital Parameter Requirement NMB Bank
Minimum Common Equity Capital Ratio 4.50% 7.79%
Capital Conversation Buff er 2.50% 2.50%
Minimum common equity plus capital conservation buff er 7.00% 10.29%
Minimum Tier 1 Capital (Excluding conservation buff er) 6.00% 10.59%
Minimum Total Capital (Excluding conservation buff er) 9.00% 12.93%
Minimum Total Capital (including conservation buff er) 11.00% 15.43%
Leverage Ratio 4.00% 8.48%
5. Summary of the Bank’s internal approach to assess the adequacy of its capital to support current and future activities:
The bank follows Internal Capital Adequacy Assessment Process (ICAAP) and Risk Management Guideline while taking decision on any business. It has always taken note of ICAAP and has taken steps accordingly in ensuring soundness of capital position and sustainability of the business.
Risk management is essential for well-being of the overall banking business. Credit, Market and Operational Risk are managed independently at NMB Bank. Credit Risk Department reviews risk related to credit prior to disbursement of all loans, it is independent of a loan approver. Credit Risk Management Committee meets once a month to review credit portfolio risk. Market risk is closely monitored all time and managed through ALCO. Operational Risk Committee which meets once each month is a platform to assess/monitor operational risk identifi ed vides various units, branches. Eff ective implementation of process/controls is periodically reviewed by an Operational Risk Unit. Operational Risk Unit also carries out assurance reviews of the units to evaluate control weakness, recommends robust controls around the risk areas and monitors execution of control in an ongoing basis.
Audit Committee is formed as per the ‘Terms of Reference’ prescribed by NRB with 3 members. Coordinator of the committee is one of the Non-Executive Directors with Head Internal Audit as its secretary. The committee reviews internal/external/NRB audit reports, recommends stringent control process and escalates the audit observations to the Board. The Committee also reviews quarterly unaudited fi nancial reports of the Bank with recommendation to the Board. The committee selects and recommends External Auditor to the Board based on fi nancial and technical evaluations. Audit Committee is committed towards maintaining robust control system hence monitors closure of risk issues raised by Internal/External/NRB auditors.
Risk Management Committee with view of ensuring better risk management in the bank and in line of NRB’s requirement is formed with 5 members chaired by Non-Executive Director, Coordinator of Audit Committee, Head Operation, Head Credit Risk and Head Compliance, and Operational Risk are the members of the committee. The committee reviews high risk issues escalated by operational and credit risk committees (management level), deliberates on the risks and recommends to the Board if required. Stress testing/Capital adequacy is also reviewed at the committee with recommendation to the Board. Revised/new NRB directives, Monetary Policy with material impact on the Bank are also reviewed for its implications.
NMB Annual Report-2018/19 153
Annual Financial Statements FY 2018-19
OM Development Bank Ltd.
Now has become
www.nmbbanknepal.com154
NMB Annual Report-2018/19 155
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NMB Annual Report-2018/19 157
Statement of Financial PositionAs on 31st Ashad 2076
(Amount in NPR)
Particulars Notes 31 Ashad 2076 Restated32 Ashad 2075
Restated1st Shrwan 2074
Assets
Cash and cash equivalent 4.1 4,573,597,783 4,606,754,593 3,363,268,270
Due from Nepal Rastra Bank 4.2 1,148,397,928 1,122,470,190 800,622,192
Placement with Bank and Financial Institutions 4.3 - - -
Derivative fi nancial instruments 4.4 - - -
Other trading assets 4.5 - - -
Loan and Advances to B/FIs 4.6 568,088,484 122,826,450 33,726,450
Loans and advances to customers 4.7 22,360,606,116 18,180,600,184 13,948,256,529
Investment in securities 4.8 919,797,104 854,763,271 794,100,017
Current Tax Assets 4.9 26,903,428 - -
Investment in subsidiaries 4.10 - - -
Investment in Associates 4.11 - - -
Investment property 4.12 - - -
Property and equipment 4.13 184,187,635 211,158,529 156,186,157
Goodwill and Intangible Assets 4.14 4,384,560 6,213,148 5,083,341
Deferred tax assets 4.15 18,073,481 - -
Other assets 4.16 56,547,931 47,551,242 42,607,951
Total Assets 29,860,584,450 25,152,337,606 19,143,850,907
www.nmbbanknepal.com158
Statement of Financial PositionAs on 31st Ashad 2076
(Amount in NPR)
Particulars Notes 31 Ashad 2076 Restated32 Ashad 2075
Restated1st Shrwan 2074
Liabilities
Due to Bank and Financial Institutions 4.17 1,496,132,384 599,112,852 614,140,643
Due to Nepal Rastra Bank 4.18 - - -
Derivative Financial instruments 4.19 - - -
Deposit from customers 4.20 24,153,016,531 20,856,078,516 15,447,288,578
Borrowings 4.21 - - -
Current Tax Liabilities 4.9 - 13,522,470 8,355,564
Provisions 4.22 - - -
Deferred tax liabilities 4.15 - 5,375,460 39,780,834
Other liabilities 4.23 356,519,924 353,110,962 301,292,494
Debt securities issued 4.24 - - -
Subordinated Liabilities 4.25 - - -
Total liabilities 26,005,668,839 21,827,200,259 16,410,858,113
Equity
Share Capital 4.26 2,515,235,600 2,515,235,600 1,878,696,987
Share Premium 28,614,713 28,614,713 15,372,574
Retained Earning 548,909,519 312,881,810 376,762,827
Reserves 4.27 762,155,780 468,405,224 462,160,406
Total equity attributable to equity holders 3,854,915,611 3,325,137,347 2,732,992,794
Non-controlling interests - - -
Total equity 3,854,915,611 3,325,137,347 2,732,992,794
Total liabilities and equity 29,860,584,450 25,152,337,606 19,143,850,907
Contingent liabilities and commitment 4.28 411,043,846 550,698,431 530,602,213
Net assets value per share 153.26 132.20 145.47
Sunil KCCEO
Pawan Kumar GolyanChairman
Nico PijlDirector
Rajesh Paudel, FCAPartnerP.L. Shrestha & Co.Chartered Accountants
Navin ManandharChief Finance Offi cer
Mridul ParajuliHead-Finance & Planning
Rajendra Kafl e Director
Harischandra SubediDirector
Pradeep Raj PandeyDirector
Rabi Shankar SainjuDirector
Sunity Shrestha HadaDirector
Date: Tuesday, 26 November, 2019Place: NMB Bhawan, Babarmahal, Kathmandu
As per our attached report of even date
NMB Annual Report-2018/19 159
Sunil KCCEO
Pawan Kumar GolyanChairman
Nico PijlDirector
Rajesh Paudel, FCAPartnerP.L. Shrestha & Co.Chartered Accountants
Navin ManandharChief Finance Offi cer
Mridul ParajuliHead-Finance & Planning
Rajendra Kafl e Director
Harischandra SubediDirector
Pradeep Raj PandeyDirector
Rabi Shankar SainjuDirector
Sunity Shrestha HadaDirector
Date: Tuesday, 26 November, 2019Place: NMB Bhawan, Babarmahal, Kathmandu
Statement of Profi t or LossFor the year ended 31 Ashad 2076
(Amount in NPR)
Particulars Notes 2075-76 Restated2074-75
Interest Income 4.29 3,313,657,484 2,436,258,999
Interest Expense 4.30 (2,087,924,029) (1,563,395,029)
Net interest income 1,225,733,455 872,863,970
Fees and Commission Income 4.31 202,407,434 173,888,506
Fees and Commission Expense 4.32 8,214,487 2,777,672
Net fee and Commission income 194,192,947 171,110,835
Net interest fee and commission income 1,419,926,403 1,043,974,805
Net Trading Income 4.33 3,735,696 127,734
Other Operating Income 4.34 1,033,110 9,185,022
Total operating income 1,424,695,208 1,053,287,560
Impairment charge/(reversal) for loans and other losses 4.35 182,205,533 46,899,435
Net Operating income 1,242,489,675 1,006,388,125
Operating expenses
Personal Expense 4.36 308,392,884 246,924,107
Other Operating Expenses 4.37 156,494,137 136,966,125
Depreciation and amortisation 4.38 57,436,698 45,289,324
Operating Profi t 720,165,956 577,208,569
Non operating income 4.39 19,993 12,400
Non operating expense 4.40 - -
Profi t before income tax 720,185,949 577,220,969
Income tax expense 4.41 184,738,192 182,893,041
Current tax 205,466,362 178,440,863
Deferred tax income (20,728,170) 4,452,178
Profi t for the period 535,447,757 394,327,928
Profi t attributable to:
Equity holders of the bank 535,447,757 394,327,928
Non-controlling interest - -
Profi t for the period 535,447,757 394,327,928
Earnings per share:
Basic earnings per share 21.29 19.50
Diluted earnings per Share 21.29 19.50
As per our attached report of even date
www.nmbbanknepal.com160
Sunil KCCEO
Pawan Kumar GolyanChairman
Nico PijlDirector
Rajesh Paudel, FCAPartnerP.L. Shrestha & Co.Chartered Accountants
Navin ManandharChief Finance Offi cer
Mridul ParajuliHead-Finance & Planning
Rajendra Kafl e Director
Harischandra SubediDirector
Pradeep Raj PandeyDirector
Rabi Shankar SainjuDirector
Sunity Shrestha HadaDirector
Date: Tuesday, 26 November, 2019Place: NMB Bhawan, Babarmahal, Kathmandu
Statement of Other Comprehensive IncomeFor the year ended 31 Ashad 2076
(Amount in NPR)
Particulars 2075-76 Restated2074-75
Profi t for the period 535,447,757 394,327,928
Other comprehensive income, net of income tax
a) Items that will not be reclassifi ed to profi t or loss
• Gains/(losses) from investment in equity instruments measured at fair value (9,069,236) (129,525,174)
• Gains/(losses) on revaluation
• Acturial gain/(losses) on defi ned benefi t plans - -
• Income tax relating to above items 2,720,771 38,857,552
Net other comprehensive income that will not be reclassifi ed to profi t or loss (6,348,465) (90,667,622)
b) Items that are or may be reclassifi ed to profi t or loss
• Gains/(losses) on cash fl ow hedge
• Exchange gains/(losses)(arising from translating fi nancial assets of foreign operation)
• Income tax relating to above items
• Reclassify to profi t or loss
Net other comprehensive income that are or may be reclassifi ed to profi t or loss - -
c) Share of other comprehensive income of associate accounted as per equity method
Other comprehensive income for the period, net of Income Tax (6,348,465) (90,667,622)
Total comprehensive income for the period 529,099,292 303,660,306
Total comprehensive income attributable to: - -
Equity holders of the Bank 529,099,292 303,660,306
Non-controlling interest - -
Total Comprehensive income for the period 529,099,292 303,660,306
As per our attached report of even date
NMB Annual Report-2018/19 161
Statement of Cash FlowsFor the year ended 31 Ashad 2076
(Amount in NPR)
Particulars 2075-76 Restated2074-75
Cash fl ows from operating activities
Interest Received 3,202,768,703 2,411,003,805
Fee and other income received 206,163,123 174,028,640
Dividend Received 4,740,551 9,019,825
Receipts from other operating activities - -
Interest paid (2,097,260,989) (1,505,290,161)
Commission and fee paid (8,214,487) (2,777,672)
Cash payments to employee (358,990,274) (223,090,981)
Other expense paid (91,985,144) (170,938,548)
Operating cash fl ows before change in operating assets and liabilities 857,221,484 691,954,909
(Increase)/Decrease in operating assets (4,732,667,062) (4,670,939,196)
Due from Nepal Rastra Bank (25,927,738) (321,847,998)
Placement with bank and fi nancial institutions - -
Other Trading assets - -
Loan and advances to bank and fi nancial institutions (445,262,034) (89,100,000)
Loan and advances to customer (4,252,480,600) (4,255,047,908)
Other Assets (8,996,689) (4,943,290)
Increase/(Decrease) in operating liabilities 4,193,949,782 5,394,217,883
Due to bank and fi nancial institutions 897,019,532 (15,027,791)
Due to Nepal Rastra Bank - -
Deposits from customers 3,296,938,015 5,408,789,938
Borrowings - -
Other Liabilities (7,766) 455,736
Net Cash fl ow from operating activities before tax paid 318,504,204 1,415,233,596
Income taxes paid (246,183,247) (173,694,097)
Net Cash fl ow from operating activities 72,320,957 1,241,539,499
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Sunil KCCEO
Pawan Kumar GolyanChairman
Nico PijlDirector
Rajesh Paudel, FCAPartnerP.L. Shrestha & Co.Chartered Accountants
Navin ManandharChief Finance Offi cer
Mridul ParajuliHead-Finance & Planning
Rajendra Kafl e Director
Harischandra SubediDirector
Pradeep Raj PandeyDirector
Rabi Shankar SainjuDirector
Sunity Shrestha HadaDirector
Date: Tuesday, 26 November, 2019Place: NMB Bhawan, Babarmahal, Kathmandu
Statement of Cash FlowsFor the year ended 31 Ashad 2076
(Amount in NPR)
Particulars 2075-76 Restated2074-75
Cash fl ows from investing activities
Purchase of investment securities (74,103,070) (190,188,428)
Receipts from sale of investment securities 969,960 6,315,534
Purchase of plant and equipment (30,465,804) (100,261,696)
Receipt from sale of property and equipment 12,235 60,488
Purchase of intangible assets 1,828,589 (1,129,807)
Receipt from sale of intangible assets
Purchase of investment properties - -
Receipt from the sale of investment properties
Interest received
Dividend received
Net cash used in investing activities (101,758,090) (285,203,909)
Cash fl ows from fi nancing activities
Receipt from issue of debt securities - -
Repayment of debt securities
Receipt from issue of subordinated liabilities - -
Repayment of subordinated liabilities
Receipt from issue of shares - 287,046,026
Dividend paid - -
Interest paid - -
Other receipt/payment - -
Net cash from fi nancing activities - 287,046,026
Net increase/(decrease) in cash and cash equivalents (29,437,133) 1,243,381,615
Cash and Cash Equivalents at Shrawan 01, 2075 4,606,754,593 3,363,268,270
Eff ect of exchange rate fl uctuations on cash and cash equivalents held (3,719,677) 104,709
Closing Cash and Cash Equivalents 4,573,597,783 4,606,754,593 As per our attached report of even date
NMB Annual Report-2018/19 163
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Oth
er
Res
erve
T
otal
N
on-
Cont
rolli
ng
Inte
rest
T
otal
Equ
ity
Bal
ance
at S
hraw
an 0
1, 2
074
2,02
2,05
2,10
0 2
34,7
52,1
87
-
362
,106
,410
1
,284
-
-
-
5
08,6
18
21,
091,
224
2,6
40,5
11,8
22
-
2,6
40,5
11,8
22
Adj
ustm
ent/
Res
tate
men
t(3
78,1
07,3
00)
15,
372,
574
-
-
-
78,
961,
488
-
376
,254
,209
-
9
2,48
0,97
2 -
9
2,48
0,97
2
Adj
ustm
ent/
Res
tate
d B
alan
ce a
s at
Shr
awan
01,
207
41,
643,
944,
800
234
,752
,187
15
,372
,574
3
62,1
06,4
10
1,2
84
-
78,
961,
488
-
376
,762
,827
2
1,09
1,22
4 2
,732
,992
,794
-
2
,732
,992
,794
Com
preh
ensi
ve In
com
e fo
r th
e ye
ar-
--
--
--
- -
-
-
Profi
t fo
r the
yea
r-
--
--
--
- 3
94,3
27,9
28
394
,327
,928
-
394
,327
,928
Othe
r Co
mpr
ehen
sive
Inco
me,
Net
of T
ax -
-
-
-
-
-
-
(9
0,66
7,62
2) -
(9
0,66
7,62
2) -
(9
0,66
7,62
2)
Gai
ns/(
loss
es) f
rom
inve
stm
ent i
n eq
uity
inst
rum
ents
m
easu
red
at fa
ir va
lue
--
--
--
--
(90,
667,
622)
(90,
667,
622)
- (9
0,66
7,62
2)
Gai
ns/(
loss
es) o
n re
valu
atio
n-
--
--
--
- -
-
-
-
Act
uria
l gai
n/(lo
sses
) on
defi n
ed b
enefi
t pl
ans
--
--
--
--
-
-
- -
Gai
ns/(
loss
es) o
n ca
sh fl
ow h
edge
--
--
--
--
-
-
- -
Exch
ange
gai
ns/(
loss
es)(a
risin
g fr
om tr
ansl
atin
g fi n
anci
al
asse
ts o
f for
eign
ope
ratio
n)-
--
--
--
- -
-
-
-
Tota
l Com
preh
ensi
ve In
com
e fo
r th
e ye
ar -
-
-
-
-
-
-
3
03,6
60,3
06
-
303
,660
,306
-
3
03,6
60,3
06
Tran
sfer
to R
eser
ves
durin
g th
e ye
ar-
--
74,
751,
000
26,
177
--
- (7
4,77
7,17
7) -
-
-
-
Adj
ustm
ent o
f Inv
estm
ent A
djus
tmen
t Res
erve
--
--
--
--
(1,7
61,5
39)
1,7
61,5
39
-
- -
Crea
tion
of E
mpl
oyee
trai
ning
Fun
d-
--
--
--
- (3
04,4
33)
304
,433
-
-
-
Util
izat
ion
of E
mpl
oyee
trai
ning
Fun
d-
--
--
--
- -
-
-
Crea
tion
of C
SR F
und
--
--
--
--
(3,7
37,5
50)
3,7
37,5
50
-
- -
Util
izat
ion
of C
SR F
und
--
--
--
--
2,4
82,6
49
(2,4
82,6
49)
-
- -
Util
izat
ion
of A
ccum
ulat
ed R
eser
ve-
--
--
--
- 4
57,8
97
457
,897
-
457
,897
Adj
ustm
ent o
f deff
err
ed ta
x R
eser
ve-
--
--
--
- (1
8,81
4,38
9) 1
8,81
4,38
9 -
-
-
Tran
sfer
from
Res
erve
s du
ring
the
year
--
--
--
(90,
667,
622)
-
90,
667,
622
-
-
- -
Tran
sact
ions
with
Ow
ners
, dire
ctly
reco
gniz
ed in
Equ
ity-
--
--
- -
-
-
- -
Am
ount
tran
sfer
red
from
pre
miu
m to
sha
re c
apita
l15
,372
,574
(1
5,37
2,57
4)
--
--
--
-
- -
Shar
e Is
sued
493,
183,
500
(234
,752
,187
) 2
8,61
4,71
3 -
--
--
--
287
,046
,026
-
287
,046
,026
Shar
e B
ased
Pay
men
ts-
--
--
--
--
- -
-
-
Shar
e Is
sue
Expe
nses
Dire
ctly
Cha
rged
to E
quity
--
--
--
--
(4,9
15,0
70)
- (4
,915
,070
)-
(4,9
15,0
70)
Shar
e Is
sue
Expe
nses
Dire
ctly
Cha
rged
to E
quity
-Tax
Impa
ct-
--
--
--
- 1
,474
,521
-
1,4
74,5
21
- 1
,474
,521
Div
iden
d to
Equ
ity-H
olde
rs-
--
--
--
--
-
- -
Bon
us S
hare
s Is
sued
362,
734,
726
(362
,734
,726
)-
-
-
Cash
Div
iden
d Pa
id-
--
--
--
- -
-
-
- -
Gai
n on
Dis
posa
l of S
hare
Cla
ssifi
ed in
to O
CI-
--
--
--
- 6
,315
,534
-
6,3
15,5
34
- 6
,315
,534
Curr
ent T
ax o
n G
ain
on D
ispo
sal o
f Sha
re C
lass
ifi ed
into
OCI
--
--
--
--
(1,8
94,6
60)
- (1
,894
,660
)-
(1,8
94,6
60)
Othe
r-
--
--
--
--
-
Tota
l Con
trib
utio
ns b
y an
d D
istr
ibut
ions
871,
290,
800
(234
,752
,187
)13
,242
,139
--
--
-(3
61,7
54,4
01)
-28
8,02
6,35
0 -
288,
026,
350
Bal
ance
at A
shad
32,
207
52,
515,
235,
600
-
28,6
14,7
13
436
,857
,410
2
7,46
1 -
(1
1,70
6,13
3) -
3
12,8
81,8
10
43,
226,
486
3,3
25,1
37,3
47
3,3
25,1
37,3
47
www.nmbbanknepal.com164
Stat
emen
t of C
hang
es in
Equ
ityFo
r the
yea
r end
ed 3
1 A
shad
207
6(A
mou
nt in
NPR
)
Att
ribu
tabl
e to
Equ
ity-H
olde
rs o
f the
Ban
k
Part
icul
ars
Sha
re C
apita
l C
alls
in
Adv
ance
S
hare
Pr
emiu
m
Gen
eral
R
eser
ve
Exc
hang
e Eq
ualis
atio
n R
eser
ve
Reg
ulat
ory
Res
erve
F
air
Valu
e R
eser
ve
Rev
alua
tion
Res
erve
R
etai
ned
Earn
ing
Oth
er
Res
erve
T
otal
N
on-
Cont
rolli
ng
Inte
rest
T
otal
Equ
ity
Bal
ance
at S
hraw
an 0
1, 2
075
2,5
15,2
35,6
00
- 2
8,61
4,71
3 4
36,8
57,4
10
27,
461
-
(11,
706,
133)
-
312
,881
,810
4
3,22
6,48
6 3
,325
,137
,347
-
3,3
25,1
37,3
47
Adj
ustm
ent/
Res
tate
men
t-
--
--
--
--
-
- -
Adj
ustm
ent/
Res
tate
d B
alan
ce a
s at
Shr
awan
01,
207
5 2
,515
,235
,600
-
28,
614,
713
436
,857
,410
2
7,46
1 -
(1
1,70
6,13
3) -
3
12,8
81,8
10
43,
226,
486
3,3
25,1
37,3
47
-
3,3
25,1
37,3
47
Com
preh
ensi
ve In
com
e fo
r th
e ye
ar-
--
--
--
--
- -
-
-
Profi
t fo
r the
yea
r-
--
--
--
- 5
35,4
47,7
57
- 5
35,4
47,7
57
- 5
35,4
47,7
57
Othe
r Co
mpr
ehen
sive
Inco
me,
Net
of T
ax -
-
-
-
-
-
-
(6
,348
,465
) -
(6
,348
,465
)-
(6,3
48,4
65)
Gai
ns/(
loss
es) f
rom
inve
stm
ent i
n eq
uity
inst
rum
ents
m
easu
red
at fa
ir va
lue
--
--
--
--
(6,3
48,4
65)
(6,3
48,4
65)
(6,3
48,4
65)
Gai
ns/(
loss
es) o
n re
valu
atio
n-
--
--
--
--
- -
-
-
Act
uria
l gai
n/(lo
sses
) on
defi n
ed b
enefi
t pl
ans
--
--
--
--
--
-
--
Gai
ns/(
loss
es) o
n ca
sh fl
ow h
edge
--
--
--
--
--
-
--
Exch
ange
gai
ns/(
loss
es)(a
risin
g fr
om tr
ansl
atin
g fi n
anci
al
asse
ts o
f for
eign
ope
ratio
n)-
--
--
--
--
- -
-
-
Tota
l Com
preh
ensi
ve In
com
e fo
r th
e ye
ar -
-
-
-
-
-
-
5
29,0
99,2
92
-
529
,099
,292
-
529
,099
,292
Tran
sfer
to R
eser
ves
durin
g th
e ye
ar -
1
07,0
89,5
51
-
208
,071
,465
(6
,348
,465
) -
(3
08,8
12,5
51)
-
-
-
-
Adj
ustm
ent o
f Inv
estm
ent A
djus
tmen
t Res
erve
--
--
--
--
1,0
21,4
63
(1,0
21,4
63)
-
-
-
Crea
tion
of E
mpl
oyee
trai
ning
Fun
d-
--
--
--
- (5
,596
,584
) 5
,596
,584
-
-
-
Util
izat
ion
of E
mpl
oyee
trai
ning
Fun
d-
--
--
--
- 5
,221
,026
(5
,221
,026
) -
-
-
Crea
tion
of C
SR F
und
--
--
--
--
(5,3
54,4
78)
5,3
54,4
78
-
-
-
Util
izat
ion
of C
SR F
und
--
--
--
--
3,2
35,1
39
(3,2
35,1
39)
-
-
-
Adj
ustm
ent o
f deff
err
ed ta
x R
eser
ve-
--
--
--
- 3
4,60
8,91
1 (3
4,60
8,91
1) -
-
-
Adju
stm
ent o
f Def
erre
d Ta
x Re
serv
e in
to R
egul
ator
y Re
serv
e-
--
--
18,
073,
481
--
(18,
073,
481)
--
--
Tran
sfer
from
Res
erve
s du
ring
the
year
--
--
--
--
--
-
--
Tran
sact
ions
with
Ow
ners
, dire
ctly
reco
gniz
ed in
Equ
ity-
--
--
--
--
- -
-
-
Am
ount
tran
sfer
red
from
pre
miu
m to
sha
re c
apita
l-
--
--
--
--
- -
-
-
Shar
e Is
sued
--
--
--
--
--
-
--
Shar
e Is
sue
Expe
nses
Dire
ctly
Cha
rged
to E
quity
--
--
--
--
--
-
--
Shar
e Is
sue
Expe
nses
Dire
ctly
Cha
rged
to E
quity
-Tax
Impa
ct-
--
--
--
--
- -
-
-
Shar
e B
ased
Pay
men
ts-
--
--
--
--
- -
-
-
Div
iden
d to
Equ
ity-H
olde
rs-
--
--
--
--
- -
-
-
Bon
us S
hare
s Is
sued
--
--
--
--
--
-
--
Cash
Div
iden
d Pa
id-
--
--
--
--
- -
-
-
Gai
n on
Dis
posa
l of S
hare
Cla
ssifi
ed in
to O
CI-
--
--
--
- 9
69,9
60
969
,960
9
69,9
60
Curr
ent T
ax o
n G
ain
on D
ispo
sal o
f Sha
re C
lass
ifi ed
into
OCI
--
--
--
--
(290
,988
)-
(290
,988
)-
(290
,988
)
Othe
r-
--
--
--
--
- -
-
-
--
--
--
--
--
-
--
Tota
l Con
trib
utio
ns b
y an
d D
istr
ibut
ions
--
--
--
--
678,
972
- 6
78,9
72
-67
8,97
2
Bal
ance
at A
shad
31,
207
6 2
,515
,235
,600
-
2
8,61
4,71
3 5
43,9
46,9
62
27,
461
226
,144
,947
(1
8,05
4,59
9) -
5
48,9
09,5
19
10,
091,
009
3,8
54,9
15,6
11
-
3,8
54,9
15,6
11
Suni
l KC
CEO
Paw
an K
umar
Gol
yan
Chai
rman
N
ico
Pijl
Dire
ctor
Raj
esh
Paud
el, F
CAPa
rtne
rP.
L. S
hres
tha
& C
o.Ch
arte
red
Acc
ount
ants
Nav
in M
anan
dhar
Chie
f Fin
ance
Offi
cer
Mri
dul P
araj
uli
Hea
d-Fi
nanc
e &
Pl
anni
ng
Raj
endr
a K
afl e
D
irect
orH
aris
chan
dra
Sube
diD
irect
or
Prad
eep
Raj
Pan
dey
Dire
ctor
Rab
i Sha
nkar
Sai
nju
Dire
ctor
Suni
ty S
hres
tha
Had
aD
irect
or
Dat
e: T
uesd
ay, 2
6 N
ovem
ber,
2019
Plac
e: N
MB
Bha
wan
, Bab
arm
ahal
, Kat
hman
du
As
per o
ur a
ttach
ed re
port
of e
ven
date
NMB Annual Report-2018/19 165
(Amount in NPR)
Particulars 31 Ashad 2076 32 Ashad 2075
Net profi t or (loss) as per statement of profi t or loss 535,447,757 394,327,928
Appropriations:
a. General reserve (107,089,551) (78,865,586)
b. Foreign exchange fl uctuation fund -
c. Capital redemption reserve
d. Corporate social responsibility fund (5,354,478) (3,943,279)
e. Employees' training fund (375,558) (592,843)
f. Other - -
Profi t or (loss) before regulatory adjustment 422,628,170 310,926,220
Regulatory adjustment :
a. Interest receivable (-)/previous accrued interest received (+) (176,451,580) -
b. Short loan loss provision in accounts (-)/reversal (+) - -
c. Short provision for possible losses on investment (-)/reversal (+) (31,048,379) -
d. Short loan loss provision on Non Banking Assets (-)/reversal (+) (571,506) -
e. Deferred tax assets recognised (-)/ reversal (+) (18,073,481) -
f. Goodwill recognised (-)/ impairment of Goodwill (+)
g. Bargain purchase gain recognised (-)/resersal (+)
h. Acturial loss recognised (-)/reversal (+) - -
i. Other (+/-)
Lease Payment - -
Dividend Income from Associates - -
Income Attributable from Associates - -
Share Issue Expenses Directly Charged to Equity - -
Share Issue Expenses Directly Charged to Equity-Tax Impact - -
Gain on Disposal of Share Classifi ed into OCI - -
Current Tax on Gain on Disposal of Share Classifi ed into OCI - -
Distributable profi t or (loss) 196,483,223 310,926,220
Statement of Distributable Profi t or LossFor the year ended 31 Ashad 2076 (As per NRB Regulation)
www.nmbbanknepal.com166
Not
es to
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Cash
and
cas
h eq
uiva
lent
4.1
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Cash
in H
and
557
,277
,513
5
35,4
17,7
59
380
,168
,136
Bal
ance
s w
ith B
/Fis
-
7,0
98,2
70
18,
956,
928
Mon
ey a
t cal
l and
sho
rt n
otic
e 4
,016
,320
,269
4
,064
,238
,564
2
,964
,143
,206
Othe
r -
-
-
Tota
l 4
,573
,597
,783
4
,606
,754
,593
3
,363
,268
,270
Due
from
Nep
al R
astr
a B
ank
4.2
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Stat
utor
y ba
lanc
es w
ith N
RB
1,1
48,3
97,9
28
1,1
22,4
70,1
90
800
,622
,192
Secu
ritie
s pu
rcha
sed
unde
r res
ale
agre
emen
t -
-
-
Othe
r dep
osit
and
rece
ivab
le fr
om N
RB
-
-
-
Tota
l 1
,148
,397
,928
1
,122
,470
,190
8
00,6
22,1
92
Plac
emen
ts w
ith B
ank
and
Fina
ncia
l Ins
titut
ions
4.3
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Plac
emen
t with
dom
estic
B/F
Is -
-
-
Plac
emen
t with
For
eign
B/F
Is -
-
-
Less
: Allo
wan
ces
for i
mpa
irem
ent
-
-
-
Tota
l -
-
-
NMB Annual Report-2018/19 167
Der
ivat
ive
Fina
ncia
l Ins
trum
ents
4.4
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Hel
d fo
r tr
adin
g-
--
Inte
rest
rate
sw
ap-
--
Forw
ard
exch
ange
con
trac
t-
--
Othe
rs-
--
Hel
d fo
r ri
sk m
anag
emen
t-
--
Inte
rest
rate
sw
ap-
--
Forw
ard
exch
ange
con
trac
t-
--
Othe
rs-
--
Tota
l -
-
-
Othe
r Tr
adin
g as
sets
4.5
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Trea
sury
Bill
s -
-
Gov
ernm
ent b
ond
-
-
-
NR
B b
onds
-
-
-
Dom
estic
Cor
pora
te b
onds
-
-
-
Equi
ties
-
-
-
Othe
r -
-
-
Tota
l -
-
-
Pled
ged
-
-
-
Non
- Pl
edge
d -
-
-
www.nmbbanknepal.com168
Not
es to
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Loan
s an
d ad
vanc
es to
B/F
Is4.
6
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Loan
to M
icro
fi nan
ce In
stitu
tions
573
,826
,752
1
24,0
67,1
21
34,
067,
121
Othe
r -
-
-
Less
: Allo
wan
ces
for I
mpa
irmen
t (5
,738
,268
) (1
,240
,671
) (3
40,6
71)
Tota
l 5
68,0
88,4
84
122
,826
,450
3
3,72
6,45
0
4.6.
1 A
llow
ance
s fo
r Im
pair
men
t
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Bal
ance
as
at S
hraw
an 1
1,2
40,6
71
340
,671
4
00,0
00
Impa
irmen
t los
s fo
r the
yea
r:
Char
ge fo
r the
yea
r 4
,497
,596
9
00,0
00
Rec
over
ies/
Rev
ersa
l (5
9,32
9)
Am
ount
writ
ten
off
-
Bal
ance
as
at A
shad
end
5,7
38,2
68
1,2
40,6
71
340
,671
Loan
s an
d ad
vanc
es to
cus
tom
ers
4.7
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Loan
s an
d ad
vanc
es m
easu
red
at a
mor
tized
22,
803,
181,
079
18,
445,
467,
210
14,
167,
124,
120
Less
: Im
pairm
ent a
llow
ance
s
Indi
vidu
al Im
pairm
ent
(152
,328
,743
) (4
8,83
0,00
1) (6
0,90
4,58
8)
Port
folio
Impa
irmen
t (2
90,2
46,2
20)
(216
,037
,025
) (1
57,9
63,0
02)
Net
am
ount
22,
360,
606,
116
18,
180,
600,
184
13,
948,
256,
529
Loan
and
adv
ance
s m
easu
red
at F
VTPL
-
-
-
Tota
l 2
2,36
0,60
6,11
6 1
8,18
0,60
0,18
4 1
3,94
8,25
6,52
9
NMB Annual Report-2018/19 169
4.7.
1 A
naly
sis
of lo
an a
nd a
dvan
ces
- B
y pr
oduc
t
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Prod
uct
-
Ter
m L
oans
4,2
17,0
65,9
25
3,9
49,0
37,9
73
922
,053
,945
Ove
rdra
st 2
,091
,996
,955
2
,367
,098
,327
1
,757
,986
,732
Tru
st R
ecei
pt/I
mpo
rt L
oans
-
-
-
Dem
and
and
othe
r Wor
king
Cap
ital L
oans
391
,359
,856
3
35,5
00,0
00
Per
sona
l Res
iden
tial L
oans
3,6
24,4
83,7
36
3,5
26,9
56,6
66
2,9
15,6
47,3
62
Rea
l Est
ate
Loan
s 2
,389
,896
,809
1
,820
,211
,512
4
65,8
92,2
99
Mar
gin
Lend
ing
Loan
s 3
08,8
68,9
51
221
,570
,469
1
45,3
21,2
04
Hire
Pur
chas
e Lo
ans
2,4
39,1
89,5
03
2,6
81,6
60,2
30
2,5
43,7
66,2
63
Dep
rived
Sec
tor L
oans
573
,760
,654
5
92,2
98,7
39
669
,906
,369
Bill
s Pu
rcha
sed
-
-
Sta
ff s L
oans
107
,022
,427
9
4,67
5,11
4 5
7,25
1,15
0
Oth
er 6
,483
,084
,683
2
,742
,737
,464
4
,605
,185
,680
Sub-
tota
l 2
2,62
6,72
9,49
9 1
8,33
1,74
6,49
5 1
4,08
3,01
1,00
3
Inte
rest
Rec
eiva
ble
176
,451
,580
1
13,7
20,7
15
84,
175,
533
Gra
nd T
otal
22,
803,
181,
079
18,
445,
467,
210
14,
167,
186,
536
4.7.
2 A
naly
sis
of lo
an a
nd a
dvan
ces
- B
y Cu
rren
cy
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Nep
ales
e R
upee
22,
803,
181,
079
18,
445,
467,
210
14,
167,
124,
120
Indi
an R
upee
--
-
Uni
ted
Stat
es D
olla
r-
--
Gre
at B
ritai
n Po
und
--
-
Euro
--
-
Japa
nese
Yen
--
-
Chin
ese
Yuan
--
-
Othe
r-
--
Gra
nd T
otal
22,
803,
181,
079
18,
445,
467,
210
14,
167,
124,
120
www.nmbbanknepal.com170
Not
es to
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
4.7.
3 A
naly
sis
of lo
an a
nd a
dvan
ces
- B
y Co
llate
ral
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Secu
red
Mov
eabl
e/Im
mov
eabl
e A
sset
s 2
1,04
9,89
6,65
4 1
7,17
6,38
5,91
3 1
2,65
6,79
4,31
2
Gol
d an
d Si
lver
902
,180
,082
7
50,7
86,3
57
774
,643
,528
Gua
rant
ee o
f Dom
estic
BFI
s 4
59,1
51,7
46
120
,000
,000
3
0,00
0,00
0
Gov
ernm
ent G
uara
ntee
4,0
67,1
20
4,0
67,1
20
4,0
67,1
20
Gua
rant
ee o
f Int
erna
tiona
l Rat
ed B
ank
-
-
-
Colla
tera
l of E
xpor
t Doc
umen
t -
-
-
Colla
tera
l of F
ixed
Dep
osit
Rec
eipt
300
,752
,281
2
41,8
93,8
40
506
,143
,440
Colla
tere
al o
f Gov
ernm
ent S
ecur
ities
-
-
-
Coun
ter G
uara
ntee
-
-
-
Pers
onal
Gua
rant
ee 2
7,48
7,67
4 1
6,45
6,58
6 1
,181
,640
Othe
r Col
late
ral
59,
645,
522
135
,877
,394
1
94,2
94,0
80
Sub
Tota
l 2
2,80
3,18
1,07
9 1
8,44
5,46
7,21
0 1
4,16
7,12
4,12
0
Uns
ecur
ed -
-
-
Gra
nd T
otal
22,
803,
181,
079
18,
445,
467,
210
14,
167,
124,
120
NMB Annual Report-2018/19 171
4.7.
4 A
llow
ance
s fo
r Im
pair
men
t
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Spec
ifi c
allo
wan
ces
for
impa
irm
ent
Bal
ance
at S
hraw
an 1
48,
830,
001
60,
904,
588
52,
631,
864
Impa
irmen
t los
s fo
r the
yea
r: 2
7,08
2,88
4 (1
2,07
4,58
7) 8
,272
,724
Char
ge fo
r the
yea
r 2
7,08
2,88
4 8
,272
,724
Rec
over
ies/
reve
rsal
dur
ing
the
year
-
(12,
074,
587)
-
Writ
e- o
ff s -
-
Exch
ange
rate
var
ianc
e on
fore
ign
curr
ency
Othe
r mov
emen
t
Bal
ance
at A
shad
end
75,
912,
885
48,
830,
001
60,
904,
588
Colle
ctiv
e al
low
ance
s fo
r im
pair
men
t
Bal
ance
at S
hraw
an 1
216
,037
,025
1
57,9
63,0
03
107
,390
,138
Impa
irmen
t los
s fo
r the
yea
r: 1
50,6
25,0
52
58,
074,
023
50,
572,
865
Char
ge/(
reve
rsal
) for
the
year
150
,625
,052
5
8,07
4,02
3 5
0,57
2,86
5
Exch
ange
rate
var
ianc
e on
fore
ign
curr
ency
-
-
-
Othe
r mov
emen
t -
-
Bal
ance
at A
shad
end
366
,662
,078
2
16,0
37,0
25
157
,963
,003
Tota
l allo
wan
ces
for
impa
irm
ent
442
,574
,963
2
64,8
67,0
27
218
,867
,591
Inve
stm
ent i
n se
curi
ties
4.8
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Inve
stm
ent s
ecur
ities
des
igna
ted
at F
VTPL
-
-
-
Inve
stm
ent s
ecur
ities
mea
sure
d at
am
ortiz
ed c
ost
624
,595
,438
6
13,0
40,0
83
527
,032
,052
Inve
stm
ent i
n eq
uity
mea
sure
d at
FVT
OCI
295
,201
,666
2
41,7
23,1
88
267
,067
,964
Tota
l 9
19,7
97,1
04
854
,763
,271
7
94,1
00,0
17
www.nmbbanknepal.com172
Not
es to
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
4.8.
1 In
vest
men
t in
secu
ritie
s m
easu
red
at a
mor
tized
cos
t
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Deb
t Sec
uriti
es
-
Gov
ernm
ent B
ond
624
,595
,438
6
13,0
40,0
83
504
,803
,689
Gov
ernm
ent t
reas
ury
bills
-
-
22,
228,
363
Nep
al R
astr
a B
ank
bond
s -
-
-
Nep
al R
astr
a B
ank
depo
sit i
nstr
umen
ts -
-
-
Othe
r
Less
: Spe
cifi c
allo
wan
ces
for i
mpa
irmen
t -
-
-
Tota
l 6
24,5
95,4
38
613
,040
,083
5
27,0
32,0
52
4.8.
2 In
vest
men
t in
equi
ty m
easu
red
at fa
ir va
lue
thro
ugh
othe
r Oth
er c
ompr
ehen
sive
inco
me
Part
icul
ars
207
5-76
2
074-
75
207
3-74
Equi
ty In
stru
men
t
Quo
ted
equi
ty s
ecur
ities
292
,181
,266
2
37,8
82,0
69
265
,007
,590
Unq
uote
d eq
uity
sec
uriti
es 3
,020
,400
3
,841
,119
2
,060
,375
Tota
l 2
95,2
01,6
66
241
,723
,188
2
67,0
67,9
64
NMB Annual Report-2018/19 173
4.8.
3 In
form
atio
n re
latin
g to
inve
stm
ent i
n eq
uitie
s
Part
icul
ars
2075
-76
207
4-75
2
073-
74
Cos
t F
air
Valu
e C
ost
Fa
ir V
alue
Cost
F
air
Valu
e
Inve
stm
ent i
n qu
oted
equ
ity1
NIB
L sa
mrid
dhi F
und
7,9
09,7
30
7,3
40,7
91
7,9
09,7
30
8,0
46,3
31
7,9
09,2
30
9,3
93,9
93
792,
742
Shar
es o
f Rs.
10 E
ach
Fully
Pai
dup
2Sa
nim
a M
ai H
rydr
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wer
5,8
83,9
15
4,0
78,5
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4,7
97,6
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3,4
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47 s
hare
s (In
clud
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bon
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5
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4
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5
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Mut
ual f
und
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694,
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362,
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s of
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Ful
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aidu
p
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sha
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f Rs.
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Ful
ly P
aidu
p
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3,41
7,80
6 1
4,70
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9 1
4,55
4,66
8 1
4,77
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1 1
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6 1
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9,24
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0
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9,6
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9,7
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9,6
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9,2
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71
-
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Mut
ual F
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of R
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Eac
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14Sa
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tizen
s M
utua
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utua
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Shar
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dup
www.nmbbanknepal.com174
Not
es to
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
4.8.
3 In
form
atio
n re
latin
g to
inve
stm
ent i
n eq
uitie
s
Part
icul
ars
2075
-76
207
4-75
2
073-
74
Cos
t F
air
Valu
e C
ost
Fa
ir V
alue
Cost
F
air
Valu
e
18N
atio
nal L
ife In
sura
nce
Co. L
td.
2,5
00,4
29
2,1
24,7
20
2,3
80,4
29
2,4
36,8
00
-
-
3,63
2 Sh
ares
(Inc
ludi
ng 4
32 B
onus
sha
re) o
f Rs.
100
Each
Ful
ly P
aidu
p
19Si
ddar
tha
Insu
ranc
e Co
. Ltd
. 2
,197
,428
1
,228
,500
2
,127
,428
1
,380
,000
-
-
2700
Sha
re o
f Rs.
100
Each
Ful
ly P
aidu
p
20Lu
mbi
ni G
ener
al In
sura
nce
Co. L
td.
4,0
16,7
13
5,3
85,7
00
3,1
19,1
13
4,4
88,1
00
1,1
30,0
13
1,9
49,0
00
53,8
57 S
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
21Si
khar
Insu
ranc
e Co
. Ltd
. 6
,144
,908
4
,626
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3
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2
,955
,000
-
-
6,00
0 Sh
ares
of R
s.10
0 Ea
ch F
ully
Pai
dup
22Sa
garm
atha
Insu
ranc
e Co
. Lim
ited
3,5
56,1
88
1,5
68,1
60
2,9
27,8
59
2,8
14,0
00
-
-
2,59
2 Sh
ares
of R
s.10
0 Ea
ch F
ully
Pai
dup
23A
run
kave
li H
ydro
Pow
er C
o. L
imite
d -
-
2
9,50
0 7
6,70
0 5
9,00
0 2
41,3
10
295
Shar
es o
f Rs.
100
Each
Ful
ly P
aidu
p
24A
pi H
ydro
Pow
er L
imite
d -
4
29
5,2
00
15,
620
5,2
00
28,
340
3 bo
nus
Shar
es o
f Rs.
100
Each
Ful
ly P
aidu
p
25B
utw
al P
ower
Co.
Lim
ited
4,0
49,0
26
4,0
90,0
00
2,5
05,0
00
2,2
85,0
00
-
-
1000
0 Sh
ares
(Inc
ludi
ng 5
00 b
onus
sha
re) o
f Rs.
100
Each
Ful
ly P
aidu
p
26N
epal
Dur
San
char
Co.
Lim
ited
12,
345,
840
10,
180,
170
12,
345,
840
10,
591,
490
7,4
32,0
84
7,5
77,5
50
14,6
90 S
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
27N
MB
Mic
rofi a
nanc
e Lt
d -
4
,950
2
,400
5
6,70
0 2
,400
6
8,30
4
5 B
onus
sha
res
of R
s.10
0 Ea
ch F
ully
Pai
dup
28G
loba
l IM
E M
icro
fi nan
ce c
o Lt
d 1
,000
1
2,02
0 1
,500
1
1,05
5 1
,500
1
9,54
5
11 s
hare
s (In
clud
ing
1 B
onus
sha
re) o
f Rs.
100
Each
Ful
ly P
aidu
p
29K
alik
a M
ai D
evel
opm
ent b
ank
Co L
td -
-
8
,200
1
82,7
90
8,2
00
142
,680
135
shar
es o
f of R
s.10
0 Ea
ch F
ully
Pai
dup
30M
ahila
Sah
ayat
ri m
icro
fi nan
ce C
o Lt
d 2
,000
9
,702
2
,000
1
5,62
0 2
,000
2
3,20
0
22 s
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
31B
ijaya
Lag
hubi
tta C
o Lt
d -
1
,455
2
,300
2
1,42
0 2
,300
3
1,57
9
3 B
onus
sha
res
of R
s.10
0 Ea
ch F
ully
Pai
dup
32W
omi M
icro
fi nan
ce L
td 1
,600
2
5,94
4 1
,600
3
1,85
5 1
,000
1
9,79
0
23 S
hare
s (In
clud
ing
7 bo
nus
shar
e) o
f Rs.
100
Each
Ful
ly P
aidu
p
33La
xmi L
aghu
bitta
San
stah
Ltd
-
-
8,6
00
107
,604
8
,600
1
60,0
46
98 S
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
34M
irmire
Mic
rofi n
ance
co
Ltd
2,5
00
24,
273
1,0
00
15,
260
1,0
00
22,
100
27 S
hare
s (In
culu
ding
2 B
onus
Sha
re) o
f Rs.
100
Each
Ful
ly P
aidu
p
35Fo
rwar
d M
icro
fi nan
ce c
o Lt
d -
-
-
-
2
,600
8
3,74
6
26 s
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
36R
elai
ble
Mic
rofi n
ance
Co
Ltd
-
-
1,0
00
12,
480
1,0
00
19,
000
10 S
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
37Ci
tizen
s In
vest
men
t tru
st 2
88,2
73
303
,625
5
,126
,650
4
,555
,000
1
,263
,642
1
,571
,400
125
shar
es o
f Rs.
100
Each
Ful
ly P
aidu
p
38So
alte
Hot
el L
td 7
21,7
59
617
,320
7
21,7
59
558
,900
-
-
2530
Sha
res
(Incl
udin
g 53
0 B
onus
Sha
re) o
f Rs.
100
Each
Ful
ly P
aidu
p
39U
nite
d m
odi H
ydro
pow
er c
o Lt
d -
-
-
-
3
3,70
0 1
14,9
17
337
shar
es o
f R
s.10
0 Ea
ch F
ully
Pai
dup
40N
yadi
Hyd
ropo
wer
co
Ltd
-
-
57,
900
103
,668
5
7,90
0 1
52,2
77
636
shar
es o
f Rs.
100
Each
Ful
ly P
aidu
ph
41R
idi H
ydro
pow
er L
td 3
5,00
0 3
0,60
0 3
5,00
0 5
2,64
4 3
5,00
0 7
7,00
4
340
shar
es o
f Rs.
100
Each
Ful
ly P
aidu
p
42N
MB
Hyb
rid F
und
12,
619,
210
12,
657,
068
12,
619,
210
12,
228,
014
12,
619,
210
12,
543,
495
126
1921
sha
res
of R
s.10
Eac
h Fu
lly P
aidu
p
43N
IBL
Prag
ati F
und
10,
274,
070
7,6
43,9
08
10,
274,
070
9,2
46,6
63
10,
274,
070
10,
274,
070
1,02
7,40
7 Sh
ares
of R
s.10
Eac
h Fu
lly P
aidu
p
Subt
otal
285,
396,
750
232,
181,
266
255,
849,
035
237,
882,
069
152,
668,
138
265,
007,
590
Inve
stm
ent i
n U
nquo
ted
equi
ty1
Prab
hu C
apita
l Lim
ited
1,5
00,0
00
1,5
00,0
00
1,5
00,0
00
1,5
00,0
00
500
,000
5
00,0
00
15,0
00 p
rom
otor
sha
res
of R
s.10
0 Ea
ch F
ully
Pai
dup
2Cr
edit
Info
rmat
ion
Bur
eau
Ltd
27,
000
236
,200
2
7,00
0 2
70,7
84
27,
000
217
,387
2,36
2 Sh
ares
of R
s.10
0 Ea
ch F
ully
Pai
dup
3N
epal
Cle
arin
g H
ouse
Ltd
1,0
70,2
00
1,2
84,2
00
1,0
70,2
00
2,0
70,3
35
1,0
70,7
00
1,3
42,9
88
12,8
42 S
hare
s (In
clud
ing
2140
Bon
us S
hare
) of R
s.10
0 Ea
ch F
ully
Pai
dup
4M
ahal
axm
i Ins
uran
ce 5
0,00
0,00
0 5
0,00
0,00
0 -
-
-
-
500,
000
Prom
otor
sha
res
of R
s.10
0 Ea
ch F
ully
Pai
dup
5N
abil
Bal
ance
Fun
d 1
0,00
0,00
0 1
0,00
0,00
0 -
-
-
-
100,
000
shar
es o
f Rs.
10 E
ach
Fully
Pai
dup
Subt
otal
62,5
97,2
0063
,020
,400
2,59
7,20
03,
841,
119
1,59
7,70
02,
060,
375
Gra
nd T
otal
3
20,9
93,9
50
295
,201
,666
2
58,4
46,2
35
241
,723
,188
1
54,2
65,8
38
267
,067
,964
NMB Annual Report-2018/19 175
4.8.
3 In
form
atio
n re
latin
g to
inve
stm
ent i
n eq
uitie
s
Part
icul
ars
2075
-76
207
4-75
2
073-
74
Cos
t F
air
Valu
e C
ost
Fa
ir V
alue
Cost
F
air
Valu
e
18N
atio
nal L
ife In
sura
nce
Co. L
td.
2,5
00,4
29
2,1
24,7
20
2,3
80,4
29
2,4
36,8
00
-
-
3,63
2 Sh
ares
(Inc
ludi
ng 4
32 B
onus
sha
re) o
f Rs.
100
Each
Ful
ly P
aidu
p
19Si
ddar
tha
Insu
ranc
e Co
. Ltd
. 2
,197
,428
1
,228
,500
2
,127
,428
1
,380
,000
-
-
2700
Sha
re o
f Rs.
100
Each
Ful
ly P
aidu
p
20Lu
mbi
ni G
ener
al In
sura
nce
Co. L
td.
4,0
16,7
13
5,3
85,7
00
3,1
19,1
13
4,4
88,1
00
1,1
30,0
13
1,9
49,0
00
53,8
57 S
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
21Si
khar
Insu
ranc
e Co
. Ltd
. 6
,144
,908
4
,626
,000
3
,535
,783
2
,955
,000
-
-
6,00
0 Sh
ares
of R
s.10
0 Ea
ch F
ully
Pai
dup
22Sa
garm
atha
Insu
ranc
e Co
. Lim
ited
3,5
56,1
88
1,5
68,1
60
2,9
27,8
59
2,8
14,0
00
-
-
2,59
2 Sh
ares
of R
s.10
0 Ea
ch F
ully
Pai
dup
23A
run
kave
li H
ydro
Pow
er C
o. L
imite
d -
-
2
9,50
0 7
6,70
0 5
9,00
0 2
41,3
10
295
Shar
es o
f Rs.
100
Each
Ful
ly P
aidu
p
24A
pi H
ydro
Pow
er L
imite
d -
4
29
5,2
00
15,
620
5,2
00
28,
340
3 bo
nus
Shar
es o
f Rs.
100
Each
Ful
ly P
aidu
p
25B
utw
al P
ower
Co.
Lim
ited
4,0
49,0
26
4,0
90,0
00
2,5
05,0
00
2,2
85,0
00
-
-
1000
0 Sh
ares
(Inc
ludi
ng 5
00 b
onus
sha
re) o
f Rs.
100
Each
Ful
ly P
aidu
p
26N
epal
Dur
San
char
Co.
Lim
ited
12,
345,
840
10,
180,
170
12,
345,
840
10,
591,
490
7,4
32,0
84
7,5
77,5
50
14,6
90 S
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
27N
MB
Mic
rofi a
nanc
e Lt
d -
4
,950
2
,400
5
6,70
0 2
,400
6
8,30
4
5 B
onus
sha
res
of R
s.10
0 Ea
ch F
ully
Pai
dup
28G
loba
l IM
E M
icro
fi nan
ce c
o Lt
d 1
,000
1
2,02
0 1
,500
1
1,05
5 1
,500
1
9,54
5
11 s
hare
s (In
clud
ing
1 B
onus
sha
re) o
f Rs.
100
Each
Ful
ly P
aidu
p
29K
alik
a M
ai D
evel
opm
ent b
ank
Co L
td -
-
8
,200
1
82,7
90
8,2
00
142
,680
135
shar
es o
f of R
s.10
0 Ea
ch F
ully
Pai
dup
30M
ahila
Sah
ayat
ri m
icro
fi nan
ce C
o Lt
d 2
,000
9
,702
2
,000
1
5,62
0 2
,000
2
3,20
0
22 s
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
31B
ijaya
Lag
hubi
tta C
o Lt
d -
1
,455
2
,300
2
1,42
0 2
,300
3
1,57
9
3 B
onus
sha
res
of R
s.10
0 Ea
ch F
ully
Pai
dup
32W
omi M
icro
fi nan
ce L
td 1
,600
2
5,94
4 1
,600
3
1,85
5 1
,000
1
9,79
0
23 S
hare
s (In
clud
ing
7 bo
nus
shar
e) o
f Rs.
100
Each
Ful
ly P
aidu
p
33La
xmi L
aghu
bitta
San
stah
Ltd
-
-
8,6
00
107
,604
8
,600
1
60,0
46
98 S
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
34M
irmire
Mic
rofi n
ance
co
Ltd
2,5
00
24,
273
1,0
00
15,
260
1,0
00
22,
100
27 S
hare
s (In
culu
ding
2 B
onus
Sha
re) o
f Rs.
100
Each
Ful
ly P
aidu
p
35Fo
rwar
d M
icro
fi nan
ce c
o Lt
d -
-
-
-
2
,600
8
3,74
6
26 s
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
36R
elai
ble
Mic
rofi n
ance
Co
Ltd
-
-
1,0
00
12,
480
1,0
00
19,
000
10 S
hare
s of
Rs.
100
Each
Ful
ly P
aidu
p
37Ci
tizen
s In
vest
men
t tru
st 2
88,2
73
303
,625
5
,126
,650
4
,555
,000
1
,263
,642
1
,571
,400
125
shar
es o
f Rs.
100
Each
Ful
ly P
aidu
p
38So
alte
Hot
el L
td 7
21,7
59
617
,320
7
21,7
59
558
,900
-
-
2530
Sha
res
(Incl
udin
g 53
0 B
onus
Sha
re) o
f Rs.
100
Each
Ful
ly P
aidu
p
39U
nite
d m
odi H
ydro
pow
er c
o Lt
d -
-
-
-
3
3,70
0 1
14,9
17
337
shar
es o
f R
s.10
0 Ea
ch F
ully
Pai
dup
40N
yadi
Hyd
ropo
wer
co
Ltd
-
-
57,
900
103
,668
5
7,90
0 1
52,2
77
636
shar
es o
f Rs.
100
Each
Ful
ly P
aidu
ph
41R
idi H
ydro
pow
er L
td 3
5,00
0 3
0,60
0 3
5,00
0 5
2,64
4 3
5,00
0 7
7,00
4
340
shar
es o
f Rs.
100
Each
Ful
ly P
aidu
p
42N
MB
Hyb
rid F
und
12,
619,
210
12,
657,
068
12,
619,
210
12,
228,
014
12,
619,
210
12,
543,
495
126
1921
sha
res
of R
s.10
Eac
h Fu
lly P
aidu
p
43N
IBL
Prag
ati F
und
10,
274,
070
7,6
43,9
08
10,
274,
070
9,2
46,6
63
10,
274,
070
10,
274,
070
1,02
7,40
7 Sh
ares
of R
s.10
Eac
h Fu
lly P
aidu
p
Subt
otal
285,
396,
750
232,
181,
266
255,
849,
035
237,
882,
069
152,
668,
138
265,
007,
590
Inve
stm
ent i
n U
nquo
ted
equi
ty1
Prab
hu C
apita
l Lim
ited
1,5
00,0
00
1,5
00,0
00
1,5
00,0
00
1,5
00,0
00
500
,000
5
00,0
00
15,0
00 p
rom
otor
sha
res
of R
s.10
0 Ea
ch F
ully
Pai
dup
2Cr
edit
Info
rmat
ion
Bur
eau
Ltd
27,
000
236
,200
2
7,00
0 2
70,7
84
27,
000
217
,387
2,36
2 Sh
ares
of R
s.10
0 Ea
ch F
ully
Pai
dup
3N
epal
Cle
arin
g H
ouse
Ltd
1,0
70,2
00
1,2
84,2
00
1,0
70,2
00
2,0
70,3
35
1,0
70,7
00
1,3
42,9
88
12,8
42 S
hare
s (In
clud
ing
2140
Bon
us S
hare
) of R
s.10
0 Ea
ch F
ully
Pai
dup
4M
ahal
axm
i Ins
uran
ce 5
0,00
0,00
0 5
0,00
0,00
0 -
-
-
-
500,
000
Prom
otor
sha
res
of R
s.10
0 Ea
ch F
ully
Pai
dup
5N
abil
Bal
ance
Fun
d 1
0,00
0,00
0 1
0,00
0,00
0 -
-
-
-
100,
000
shar
es o
f Rs.
10 E
ach
Fully
Pai
dup
Subt
otal
62,5
97,2
0063
,020
,400
2,59
7,20
03,
841,
119
1,59
7,70
02,
060,
375
Gra
nd T
otal
3
20,9
93,9
50
295
,201
,666
2
58,4
46,2
35
241
,723
,188
1
54,2
65,8
38
267
,067
,964
www.nmbbanknepal.com176
Not
es to
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Curr
ent t
ax A
sset
s/Li
abili
ty4.
9
Part
icul
ars
2075
-76
2074
-75
2073
-74
Curr
ent t
ax a
sset
s 2
32,3
69,7
89
164
,918
,393
1
65,8
26,6
08
Curr
ent y
ear I
ncom
e Ta
x A
sset
s 2
32,3
69,7
89
164
,918
,393
1
65,8
26,6
08
Tax
Ass
ets
of P
rior P
erio
ds
Curr
ent t
ax li
abili
ties
205
,466
,362
1
78,4
40,8
63
174
,182
,173
Curr
ent y
ear I
ncom
e Ta
x Li
abili
ties
205
,466
,362
1
79,6
48,3
11
174
,182
,173
Tax
Liab
ilitie
s of
Prio
r Per
iods
-
(1,2
07,4
48)
-
205
,466
,362
1
78,4
40,8
63
174
,182
,173
Tota
l of i
ncom
e ta
x as
sets
/(lia
bilit
ies)
26,
903,
428
(13,
522,
470)
(8,3
55,5
64)
Inve
stm
ent I
n su
bsid
iari
es4.
10
Part
icul
ars
2075
-76
2074
-75
2073
-74
Inve
stm
ent i
n Q
uote
d Su
bsid
iarie
s -
-
-
Inve
stm
ent i
n U
nquo
ted
Subs
idia
ries
-
-
-
Tota
l Inv
estm
ent
-
-
-
Less
: Im
pairm
ent A
llow
ance
s
Net
Car
ryin
g A
mou
nt -
-
-
4.10
.1 In
vest
men
t In
quot
ed s
ubsi
diar
ies
Part
icul
ars
2075
-76
2074
-75
2073
-74
Cos
t F
air
Valu
e C
ost
Fai
r Va
lue
Cos
t F
air
Valu
e
…...
......
......
..Ltd
…...
..sha
res
of R
s…. E
ach
-
-
-
-
-
-
…...
......
......
..Ltd
…...
..sha
res
of R
s…. E
ach
-
-
-
-
-
-
Tota
l -
-
-
-
-
-
NMB Annual Report-2018/19 177
Inve
stm
ent I
n as
soci
ates
4.11
Part
icul
ars
2075
-76
2074
-75
2073
-74
Cos
t F
air
Valu
e C
ost
Fai
r Va
lue
Cos
t F
air
Valu
e
Inve
stm
ent i
n Q
uote
d as
soci
ates
-
-
-
-
-
-
Inve
stm
ent i
n U
nquo
ted
asso
ciat
es -
-
-
-
-
-
Tota
l Inv
estm
ent
-
-
-
-
-
-
Less
: Im
pairm
ent A
llow
ance
s -
-
Net
Car
ryin
g A
mou
nt -
-
-
-
-
-
4.10
.2 In
vest
men
t In
unqu
oted
sub
sidi
arie
s
Part
icul
ars
2075
-76
2074
-75
2073
-74
Cos
t F
air
Valu
e C
ost
Fai
r Va
lue
Cos
t F
air
Valu
e
…...
......
......
..Ltd
…...
..sha
res
of R
s…. E
ach
-
-
-
-
-
-
…...
......
......
..Ltd
…...
..sha
res
of R
s…. E
ach
-
-
-
-
-
-
Tota
l -
-
-
-
-
-
4.10
.3 In
form
atio
n re
latin
g to
sub
sidi
arie
s of
the
bank
Part
icul
ars
Perc
enta
ge o
f ow
nesh
ip
2075
-76
2074
-75
2073
-74
…...
......
......
..Ltd
…...
......
......
..Ltd
4.10
.4: N
on C
ontr
ollin
g In
tere
st o
f the
Sub
sidi
arie
s
Gro
up
2075
-76
2074
-75
Equi
ty In
tere
st h
eld
by N
CI (%
)
Profi
t (L
oss)
allo
cate
d du
ring
the
year
Acc
umul
ated
Bal
ance
s of
NCI
as
on A
shad
End
Div
iden
d Pa
id to
NCI
www.nmbbanknepal.com178
Not
es to
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
4.11
.1 In
vest
men
t In
quot
ed a
ssoc
iate
s
Part
icul
ars
2075
-76
2074
-75
2073
-74
Cos
t F
air
Valu
e C
ost
Fai
r Va
lue
Cos
t F
air
Valu
e
…...
......
......
..Ltd
…...
..sha
res
of R
s…. E
ach
-
-
-
-
-
-
…...
......
......
..Ltd
…...
..sha
res
of R
s…. E
ach
-
-
-
-
-
-
Tota
l -
-
-
-
-
-
4.11
.2 In
vest
men
t In
unqu
oted
ass
ocia
tes
Part
icul
ars
2075
-76
2074
-75
2073
-74
Cos
t F
air
Valu
e C
ost
Fai
r Va
lue
Cos
t F
air
Valu
e
-
-
-
-
Tota
l -
-
-
-
-
-
4.11
.3 In
form
atio
n re
latin
g to
ass
ocia
tes
of th
e ba
nk
Part
icul
ars
Per
cent
age
of o
wne
ship
2075
-76
2074
-75
2073
-74
Tota
l -
-
-
-
-
-
NMB Annual Report-2018/19 179
4.11
.4: E
quity
val
ue o
f ass
ocia
tes
Gro
up
2075
-76
2074
-75
-
Tota
l-
-
Inve
stm
ent P
rope
rtie
s 4.
12
Part
icul
ars
2075
-76
2074
-75
2073
-74
Inve
stm
ent P
rope
rtie
s m
easu
red
at F
air V
alue
Bal
ance
as
on S
hraw
an 0
1 -
-
-
Add
ition
/(D
ispo
sal)
durin
g th
e ye
ar -
-
-
Net
Cha
nges
in fa
ir va
lue
durin
g th
e ye
ar
Adj
ustm
ent/
Tran
sfer
Net
Am
ount
-
-
-
Inve
stm
ent P
rope
rtie
s m
easu
red
at C
ost
Bal
ance
as
on S
hraw
an 0
1 -
-
Add
ition
/(D
ispo
sal)
durin
g th
e ye
ar
Adj
ustm
ent/
Tran
sfer
Acc
umul
ated
dep
reci
atio
n
Acc
umul
ated
impa
irmen
t los
s
Net
Am
ount
-
-
-
Tota
l -
-
-
www.nmbbanknepal.com180
Not
es to
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
Prop
erty
and
Equ
ipm
ent
4.13
Part
icul
ars
Lan
d B
uild
ing
Lea
seho
ld
Prop
ertie
s C
ompu
ter
&
Acc
esso
ries
V
ehic
les
Fur
nitu
re
& F
ixtu
res
Mac
hine
ry
Equ
ipm
ent
& o
ther
s T
otal
Ash
ad
end
2076
T
otal
Ash
ad
end
2075
Co
stA
s on
Shr
awan
207
4 1
4,17
2,95
0 1
4,39
7,27
5 8
0,45
0,99
3 3
7,28
5,75
8 5
1,66
0,59
5 3
4,95
2,28
5 -
6
3,33
3,86
9 2
96,2
53,7
26
Add
ition
dur
ing
the
year
-
-
29,
155,
206
15,
837,
471
14,
369,
100
13,
887,
833
-
24,
960,
427
98,
210,
037
Acq
uisi
tion
-
-
29,
155,
206
15,
837,
471
14,
369,
100
13,
887,
833
-
24,
960,
427
98,
210,
037
Capi
taliz
atio
n -
-
-
-
-
-
-
-
-
D
ispo
sal d
urin
g th
e ye
ar -
-
(1
,489
,829
) (9
05,5
00)
-
-
(2,8
12,8
00)
(5,2
08,1
30)
Adj
ustm
ent/
Rev
alua
tion
-
-
-
-
-
-
-
-
Bal
ance
as
on A
shad
end
207
5 1
4,17
2,95
0 1
4,39
7,27
5 1
09,6
06,2
00
51,
633,
400
65,
124,
195
48,
840,
118
-
85,
481,
496
389
,255
,633
Add
ition
dur
ing
the
Year
-
-
12,
458,
137
2,5
04,1
37
3,0
37,7
00
2,1
79,4
38
-
5,2
08,9
39
25,
388,
350
Acq
uisi
tion
12,
458,
137
2,5
04,1
37
3,0
37,7
00
2,1
79,4
38
5,2
08,9
39
25,
388,
350
Capi
taliz
atio
n -
D
ispo
sal d
urin
g th
e ye
ar (2
,374
,424
) (3
17,4
00)
(623
,733
) (5
,069
,541
) (8
,385
,099
)A
djus
tmen
t/R
eval
uatio
n -
B
alan
ce a
s on
Ash
ad e
nd 2
076
14,
172,
950
14,
397,
275
122
,064
,337
5
1,76
3,11
2 6
7,84
4,49
5 5
0,39
5,82
2 -
8
5,62
0,89
3 4
06,2
58,8
84
389
,255
,633
Dep
reci
atio
n an
d Im
pair
men
tA
s on
Shr
awan
01.
207
4 -
6
,615
,548
3
7,90
4,16
1 2
4,10
9,36
6 1
6,44
0,16
6 2
0,30
9,99
2 -
3
4,68
8,33
6 1
40,0
67,5
69
Dep
reci
atio
n ch
arge
for t
he y
ear
-
719
,864
7
,662
,640
7
,642
,528
1
1,35
0,72
7 4
,926
,155
-
1
0,74
7,21
8 4
3,04
9,13
3 Im
pairm
ent f
or th
e ye
ar -
-
-
-
-
-
-
-
-
D
ispo
sals
-
-
-
(1,4
75,1
82)
(807
,376
) -
-
(2
,737
,040
) (5
,019
,598
)A
djus
tmen
t -
-
-
-
-
-
-
-
-
A
s on
Ash
ad e
nd 2
075
-
7,3
35,4
12
45,
566,
801
30,
276,
713
26,
983,
517
25,
236,
147
-
42,
698,
515
178
,097
,104
D
epre
ciat
ion
char
ge fo
r the
yea
r 7
19,8
64
10,
463,
096
7,8
64,2
14
13,
198,
455
6,1
00,0
65
13,
486,
021
51,
831,
714
Impa
irmen
t for
the
year
-
Dis
posa
ls (2
,201
,265
) (3
17,4
00)
(602
,647
) (4
,736
,257
) (7
,857
,569
)A
djus
tmen
t -
A
s on
Ash
ad e
nd 2
076
-
8,0
55,2
75
56,
029,
897
35,
939,
662
39,
864,
572
30,
733,
566
-
51,
448,
278
222
,071
,249
1
78,0
97,1
04
Capi
tal W
ork
in P
rogr
ess
2074
Capi
tal W
ork
in P
rogr
ess
2075
-
Capi
tal W
ork
in P
rogr
ess
2076
-
Net
Boo
k Va
lue
As
on A
shad
end
207
4 1
4,17
2,95
0 7
,781
,727
4
2,54
6,83
2 1
3,17
6,39
2 3
5,22
0,42
8 1
4,64
2,29
3 -
2
8,64
5,53
4 1
56,1
86,1
57
As
on A
shad
end
207
5 1
4,17
2,95
0 7
,061
,863
6
4,03
9,39
8 2
1,35
6,68
7 3
8,14
0,67
8 2
3,60
3,97
1 -
4
2,78
2,98
1 2
11,1
58,5
29
211
,158
,529
As
on A
shad
end
207
6 1
4,17
2,95
0 6
,342
,000
6
6,03
4,44
0 1
5,82
3,45
0 2
7,97
9,92
3 1
9,66
2,25
7 -
3
4,17
2,61
5 1
84,1
87,6
35
NMB Annual Report-2018/19 181
Goo
dwill
and
Inta
ngib
le A
sset
s4.
14
Part
icul
ars
Goo
dwill
So� w
are
Othe
rTo
tal A
shad
end
Pu
rcha
sed
Dev
elop
edCo
stA
s on
Shr
awan
01
2074
-
19,
117,
101
-
-
19,
117,
101
Add
ition
dur
ing
the
year
-
3,3
69,9
99
-
-
3,3
69,9
99
Acq
uisi
tion
-
3,3
69,9
99
-
-
3,3
69,9
99
Capi
taliz
atio
n -
-
-
-
D
ispo
sal d
urin
g th
e ye
ar -
-
-
-
-
A
djus
tmen
t/R
eval
uatio
n -
-
-
-
-
B
alan
ce a
s on
Ash
ad e
nd 2
075
-
22,
487,
100
-
-
22,
487,
100 -
A
dditi
on d
urin
g th
e Ye
ar -
-
-
-
A
cqui
sitio
n -
4
46,3
50
-
-
446
,350
Ca
pita
lizat
ion
-
-
-
-
Dis
posa
l dur
ing
the
year
-
-
-
-
Adj
ustm
ent/
Rev
alua
tion
-
-
-
-
Bal
ance
as
on A
shad
end
207
6 2
2,93
3,45
0 -
-
2
2,93
3,45
0
Am
ortis
atio
n an
d Im
pair
men
tA
s on
Shr
awan
01.
207
4 -
1
4,03
3,76
0 -
-
1
4,03
3,76
0 A
mor
tisat
ion
char
ge fo
r the
yea
r -
2
,240
,192
-
-
2
,240
,192
Im
pairm
ent f
or th
e ye
ar -
-
-
-
-
D
ispo
sals
-
-
-
-
Adj
ustm
ent
-
-
-
-
As
on A
shad
end
207
5 1
6,27
3,95
1 -
-
1
6,27
3,95
1 Im
pairm
ent f
or th
e ye
ar -
-
-
-
A
mor
tisat
ion
char
ge fo
r the
yea
r -
2
,274
,939
-
-
2
,274
,939
D
ispo
sals
-
-
-
-
Adj
ustm
ent
-
-
-
-
As
on A
shad
end
207
6 -
1
8,54
8,89
0 -
-
1
8,54
8,89
0 Ca
pita
l Wor
k in
Pro
gres
sN
et B
ook
Valu
eA
s on
Ash
ad e
nd 2
074
-
5,0
83,3
41
-
-
5,0
83,3
41
As
on A
shad
end
207
5 -
6
,213
,148
-
-
6
,213
,148
A
s on
Ash
ad e
nd 2
076
-
4,3
84,5
60
-
-
4,3
84,5
60
www.nmbbanknepal.com182
Notes to Financial StatementsFor the year ended 31 Ashad 2076Deferred Taxes Assets/(Liabilities) 4.15
Particulars2073-74
Deferred Tax Assets Deferred Tax Liabilities Net Deferred Tax Assets /(Liabilities)
Deferred tax on temporary diff erences on following items
Loans and Advances to BFIs - - -
Loans and Advances to Customers - (25,252,660) (25,252,660)
Assets held for Sale - -
Investment Properties - - -
Investment Securities - (33,840,638) (33,840,638)
Investment In Associates - - -
Property and Equipment - 651,772 651,772
Employees' Defi ned Benefi t Plan 8,749,575 - 8,749,575
Employees' Leave Liability 7,707,003 - 7,707,003
Lease Liabilities 2,204,114 - 2,204,114
Provisions LLP - - -
Other Temporary Diff erences - - -
Deferred tax on temporary diff erences 18,660,692 (58,441,526) (39,780,834)
Deferred tax on carry forward of unused tax losses - - -
Deferred tax due to changes in tax rate - - -
Net Deferred Tax Asset (Liabilities) as on year end of 2073/74 (39,780,834)
Deferred Tax Asset/(Liabilities) as on Shrawan 01, 2073 7,948,845
Origination/(Reversal) during the year (47,729,679)
Deferred Tax (expense)/income recognized in profi t or loss -
Deferred Tax (expense)/income recognized in Other Comprehensive Income -
Deferred Tax (expense)/income recognized directly in equity (47,729,679)
NMB Annual Report-2018/19 183
Notes to Financial StatementsFor the year ended 31 Ashad 2076
Particulars2074-75
Deferred Tax Assets Deferred Tax Liabilities Net Deferred Tax Assets /(Liabilities)
Deferred tax on temporary diff erences on following items
Loans and Advances to BFIs - - -
Loans and Advances to Customers - (20,016,215) (20,016,215)
Assets held for Sale (943,018) (943,018)
Investment Properties - - -
Investment Securities 5,016,914 - 5,016,914
Investment In Associates - - -
Property and Equipment (17,063,720) (17,063,720)
Employees' Defi ned Benefi t Plan 12,574,891 - 12,574,891
Employees' Leave Liability 11,494,554 - 11,494,554
Lease Liabilities 3,561,133 - 3,561,133
Provisions LLP - - -
Other Temporary Diff erences - -
Deferred tax on temporary diff erences 15,583,773 (20,959,232) (5,375,460)
Deferred tax on carry forward of unused tax losses - - -
Deferred tax due to changes in tax rate - - -
Net Deferred Tax Asset (Liabilities) as on year end of 2074/75 (5,375,460)
Deferred Tax (Asset)/ Liabilities as on Shrawan 01, 2074 39,780,834
Origination/(Reversal) during the year 34,405,374
Deferred Tax (expense)/income recognized in profi t or loss (4,452,178)
Deferred Tax (expense)/income recognized in Other Comprehensive Income 38,857,552
Deferred Tax (expense)/income recognized directly in equity -
www.nmbbanknepal.com184
Notes to Financial StatementsFor the year ended 31 Ashad 2076
Particulars2075-76
Deferred Tax Assets Deferred Tax Liabilities Net Deferred Tax Assets /(Liabilities)
Deferred tax on temporary diff erences on following itemsLoans and Advances to BFIs - - -Loans and Advances to Customers - - -Assets held for Sale - - -Investment Properties - - -Investment Securities - 7,737,685 7,737,685 Investment In Associates - - -Property and Equipment 5,372,537 5,372,537 Employees' Defi ned Benefi t Plan - - -Employees' Leave Liability - - -Lease Liabilities 4,963,259 - 4,963,259 Provisions LLP - - -Other Temporary Diff erences - - -Deferred tax on temporary diff erences 10,335,796 7,737,685 18,073,481 Deferred tax on carry forward of unused tax losses - - - Deferred tax due to changes in tax rate - - - Net Deferred Tax Asset (Liabilities) as on year end of 2075/76 - - 18,073,481
Deferred Tax (Asset)/ Liabilities as on Shrawan 01, 2075 - - 5,375,460 Origination/(Reversal) during the year 23,448,941
Deferred Tax (expense)/income recognized in profi t or loss 20,728,170Deferred Tax (expense)/income recognized in Other Comprehensive Income 2,720,771
Deferred Tax (expense)/income recognized directly in equity -
Other Assets 4.16
Particulars 2075-76 2074-75 2073-74
Assets held for Sale 571,506 3,143,393 - Other Non-Banking Assets - - - Bills Receivable - - - Accounts Receivable 2,191,266 38,159 4,669,005 Accrued Income - - - Prepayments and Deposits 23,408,322 14,105,540 1,370,982 Income Tax Deposit - - - Deferred Employee Expenditure 1,789,591 2,342,600 4,167,069 Cash In Transit 905,600 905,600 905,600 Other 27,681,646 27,015,950 31,495,296 - Stationery Stock 3,908,490 4,439,026 1,483,922 - Commission Receivable - - - - Deposit - - - - Dividend Tax Paid in Advance - - - - Remittance Receivable 17,802,531 18,937,098 23,427,982 - Others 5,970,625 3,639,826 6,583,392 Grand Total 56,547,931 47,551,242 42,607,951
NMB Annual Report-2018/19 185
Notes to Financial StatementsFor the year ended 31 Ashad 2076Due to Bank and Financial Institutions 4.17
Particulars 2075-76 2074-75 2073-74
Money Market Deposits - -
Interbank Borrowing 250,000,000 - -
Other Deposits from BFIs 1,246,132,384 599,112,852 614,140,643
Settlement and Clearing Accounts - - -
Other Deposits from BFIs -
Total 1,496,132,384 599,112,852 614,140,643
Due to Nepal Rastra Bank 4.18
Particulars 2075-76 2074-75 2073-74
Refi nance from NRB - - -
Standing Liquidity Facility - - -
Lender of Last Resort facility from NRB - - -
Securities sold under repurchase agreements - - -
Other Payable to NRB - - -
Total - - -
Derivative Financial instruments 4.19
Particulars 2075-76 2074-75 2073-74
Held for Trading
Interest Rate Swap - - -
Currency Swap - - -
Forward Exchange Contracts
Others
Held for Risk Management
Interest Rate Swap
Currency Swap
Forward Exchange Contracts.
Others - - -
Total - - -
www.nmbbanknepal.com186
Notes to Financial StatementsFor the year ended 31 Ashad 2076Deposits from customers 4.20
Particulars 2075-76 2074-75 2073-74
Institutions Customers: 6,444,253,815 5,100,346,810 3,230,823,078
Term deposits 2,901,912,512 2,170,115,941 1,328,503,665
Call deposits 3,125,193,680 2,519,934,309 1,618,364,670
Current deposits 144,850,520 143,101,347 100,673,204
Other 272,297,103 267,195,213 183,281,539
Individual Customers: 17,708,762,716 15,755,731,706 12,216,465,500
Term deposits 9,887,407,322 8,275,476,631 6,504,643,6069
Saving deposits 7,704,225,496 7,345,909,475 5,612,957,3709
Current deposits 117,113,778 133,993,699 79,728,7949
Other 16,120 351,901 19,135,729
Total 24,153,016,531 20,856,078,516 15,447,288,578
Borrowings 4.21
Particulars 2075-76 2074-75 2073-74
Domestic Borrowing - - -
Nepal Government - - -
Other Institutions - - -
Other - - -
Sub total - - -
Foreign Borrowing - - -
Foreign Bank and Financial Institutions - - -
Multilateral Development Banks - - -
Other institutions - - -
Sub total - - -
Total - - -
4.20.1 Currency wise analysis of deposit from customers
Particulars 2075-76 2074-75 2073-74
Nepalese Rupee 24,153,016,531 20,856,078,516 15,447,288,578
Indian Rupee - - -
United State dollar - - -
Great Britain pound - - -
Euro - - -
Japenese yen - - -
Chinese Yuan - - -
Other - - -
Total 24,153,016,531 20,856,078,516 15,447,288,578
NMB Annual Report-2018/19 187
Notes to Financial StatementsFor the year ended 31 Ashad 2076Provisions 4.22
Particulars 2075-76 2074-75 2073-74
Provisions for redundancy - - -
Provision for restructuring - - -
Pending legal issues and tax litigation - - -
Onerous contracts - - -
Other - - -
Total - - -
4.22.1 Movement in Provisions
Particulars 2075-76 2074-75 2073-74
Balance at Shrawan 1 - - -
Provisions made during the year - - -
Provisions used during the year - - -
Provisions reversed during the year - - -
Unwind of discount - - -
Balance at Ashad end - - -
Other Liabilities 4.23
Particulars 2075-76 2074-75 2073-74
Liabilities for emloyees defi ned benefi t obligations - 41,916,304 29,165,251
Liabilities for leave - 38,315,180 25,690,008
Short term employee benefi ts 767,925 1,123,815 769,049
Bills payable 674,863 760,168 3,071,447
Creditors and accruals 4,324,815 5,589,220 5,692,503
Interest payable on deposits 120,814,734 130,151,695 72,046,827
Interest payable on borrowing - - -
Liabilities on defered grant income - - -
Unpaid Dividend 1,050,791 1,058,557 1,060,718
Liabilities under Finance Lease 16,544,197 11,870,443 7,347,048
Employee bonus payable 88,143,358 59,311,290 62,269,166
Other Liabilities 124,199,239 63,014,290 94,180,476
- Audit Fee Payable 1,596,088 1,130,000 678,000
- TDS Payable 41,345,064 30,775,638 22,615,226
- Social Welfare Fund 37,041,610 6,075,867 15,237,820
- Amount Received for Earthquake Relief 30,350,000 15,300,599 45,800,000
- Others 13,866,477 9,732,186 9,849,430
Total 356,519,924 353,110,962 301,292,494
www.nmbbanknepal.com188
Notes to Financial StatementsFor the year ended 31 Ashad 20764.23.1. Defi ned Benefi t Obligation
The amounts recognised in the statements of fi nancials positions are as follows :
Particulars 2075-76 2074-75 2073-74
Present value of unfunded obligations 53,782,097 41,916,304 29,165,251
Present value of funded obligations - - -
Total present value of obligations 53,782,097 41,916,304 29,165,251
Fair value of plan assets 53,782,097 - -
Present value of net obligations - 41,916,304 29,165,251
Recognised liability for defi ned benefi t obligations - 41,916,304 29,165,251
4.23.2: Plan Assets
Plan assets comprise
Particulars 2075-76 2074-75 2073-74
Equity securities - - -
Government bonds - - -
Bank deposit - - -
Other 53,782,097 - -
Total 53,782,097 - -
4.23.3: Movement in the present value of defi ned benefi t obligations
Particulars 2075-76 2074-75 2073-74
Defi ned benefi t obligations at Shrawan 1 41,916,304 29,165,251 16,155,096
Actuarial losses - - -
Benefi ts paid by the plan - (1,049,347) -
Benefi t directly paid by bank (2,592,113)
Current service costs; Past Service Cost and interest 14,457,906 13,800,400 13,010,155
Defi ned benefi t obligations at Ashad end 53,782,097 41,916,304 29,165,251
4.23.4: Movement in the fair value of plan assets
Particulars 2075-76 2074-75 2073-74
Fair value of plan assets at Shrawan 1 - -
Contributions paid into the plan 53,782,097 1,049,347 -
Benefi ts paid during the year - (1,049,347) -
Actuarial (losses) gains - - -
Expected return on plan assets - - -
Fair value of plan assets at Ashad end 53,782,097 - -
NMB Annual Report-2018/19 189
Notes to Financial StatementsFor the year ended 31 Ashad 20764.23.5: Amount recognised in profi t or loss
Particulars 2075/76 2074/75 2073/74
Current service costs 14,457,906 13,800,400 13,010,155
Past service costs-(non Vested) - - -
Past service costs (Vested) - - -
Interest on obligation - - -
Expected return on plan assets - - -
Total 14,457,906 13,800,400 13,010,155
4.23.6: Amount recognised in other comprehensive income
Particulars 2075/76 2074/75 2073/74
Acturial (gain)/loss - - -
Total - - -
4.23.7: Actuarial assumptions
Particulars 2075/76 2074/75 2073/74
Discount rate
Expected return on plan asset
Future salary increase
Withdrawal rate - - -
Debt secutities issued 4.24
Particulars 2075-76 2074-75 2073-74
Debt securities issued designated as at fair value through profi t or loss - - -
Debt securities issued at amortised cost - - -
Total - - -
Subordinate Liabilities 4.25
Particulars 2075-76 2074-75 2073-74
Redeemable preference shares - - -
Irredemable cumulative preference shares (liabilities component)
Other
Total - - -
www.nmbbanknepal.com190
Notes to Financial StatementsFor the year ended 31 Ashad 2076Share Capital 4.26
Particulars 2075-76 2074-75 2073-74
Ordinary Shares 2,515,235,600 2,515,235,600 1,643,944,800
Convertible Preference Shares (Equity component) - - -
Irredemable Preference Shares (Equity component) - - -
Perpetual debt (Equity component only) - - -
Calls in Advance - - 234,752,187
Total 2,515,235,600 2,515,235,600 1,878,696,987
4.26.1 Share capital detail
Particulars 2075-76 2074-75 2073-74
Authorised capital
30,000,000 Ordinary Share of Rs. 100 each 3,000,000,000 3,000,000,000 3,000,000,000
Issued Capital
16,439,448 Ordinary Share of Rs. 100 each (FY 2073-74) 1,643,944,800
25,152,356 Ordinary Share of Rs. 100 each(FY 2074-75) 2,515,235,600
25,152,356 Ordinary Share of Rs. 100 each(FY 2075-76) 2,515,235,600
Suscribed and paid up capital
16,439,448 Ordinary Share of Rs. 100 each (FY 2073-74) 1,643,944,800
25,152,356 Ordinary Share of Rs. 100 each(FY 2074-75) 2,515,235,600
25,152,356 Ordinary Share of Rs. 100 each(FY 2075-76) 2,515,235,600
Total 2,515,235,600 2,515,235,600 1,643,944,800
4.26.2 Ordinary Share Ownership
Particulars
2075-76 2074-75 2073-74
% of holding Amount % of holding Amount % of holding Amount
Domestic ownership 100.00% 25,152,356.00 100.00% 25,152,356 100.00% 1,643,944,800
Nepal Government
"A" Class licenced institutions
Other Licenced institutions
Other institutions & individuals
Public 49.00% 12,324,641 49.00% 12,324,641 49.00% 805,532,952
Other 51.00% 12,827,715 51.00% 12,827,715 51.00% 838,411,848
Foreign Ownership
Total 100.00% 25,152,356 100.00% 25,152,356 100.00% 1,643,944,800
NMB Annual Report-2018/19 191
Notes to Financial StatementsFor the year ended 31 Ashad 2076Reserves 4.27
Particulars 2075-76 2074-75 2073-74
Statutory general reserve 543,946,962 436,857,410 362,106,410
Exchange equilisation reserve 27,461 27,461 1,284
Corporate social responsibility Fund 7,318,175 5,198,837 3,943,935
Capital redemption reserve
Regulatory reserve 226,144,947 - -
Investment adjustment reserve 1,500,000 2,521,463 759,923
Capital reserve
Assets revaluation reserve - - -
Fair value reserve (18,054,599) (11,706,133) 78,961,488
Dividend equalisation reserve
Actuarial gain - - -
Special reserve
Deferred Tax Reserve - 34,608,911 15,794,522
Staff Training Reserve 1,272,835 897,276 592,843
Other reserve
Total 762,155,780 468,405,224 462,160,406
Particulars As at 31 Ashad 2076
Accrued Interest on Loans and Advances recognized as Income 176,451,580
Provision of Non - Banking Assets 571,506
Deferred Tax Assets 18,073,481
Fair value adjustment of Equity Shares 31,048,379
Total 226,144,947
Corporate Social Responsibility Fund 2075-76 NPR
A. Net profi t for FY 2075/76 535,447,757
B. 1% of net profi t appropriated to CSR fund 5,354,478
C. Opening CSR fund 5,198,837
D. CSR expense incurred for FY 2075/76 3,235,139
E. Closing CSR Reserve FY 2075/76 (B+C-D) 7,318,175
F. Net Movement (E-C) 2,119,338
Staff Training Reserve 2075-76 NPR
A. Staff Expenses of FY 2074/75 186,552,805
B. 3% of the above to be expensed in FY 2075/76 5,596,584
C. Training Expenses for FY 2075/76 5,221,026
D. Excess/(Shortfall) (C-B) (375,558)
E. Opening Staff Training Reserve 897,276
F. Closing Staff Training Reserve 1,272,835
Regulatory reserve includes the amount that is allocated from profi t or retained earnings fo the bank as per directive of NRB for the purpose of implementation of NFRS and which shall not be regarded as free for distribution of dividend (cash as well as bonus shares). The amount allocated to this reserve includes the following adjustments as per NFRS:
Besides, movement in Corporate Social Responsibility Fund and staff Training Reserve are given below:
www.nmbbanknepal.com192
Notes to Financial StatementsFor the year ended 31 Ashad 2076Contingent liabilities and commitments 4.28
Particulars 2075-76 2074-75 2073-74
Contingent liabilities 94,550,026 46,011,526 27,876,678
Undrawn and undisbursed facilities 311,450,115 499,643,200 497,681,830
Capital commitment - - -
Lease Commitment - - -
Litigation 5,043,705 5,043,705 5,043,705
Total 411,043,846 550,698,431 530,602,213
4.28.2: Undrawn and undisbursed facilities
Particulars 2075-76 2074-75 2073-74
Undisbursed amount of loans - - -
Undrawn limits of overdrast s 311,450,115 499,643,200 497,681,830
Undrawn limits of credit cards - - -
Undrawn limits of letter of credit - - -
Undrawn limits of guarantee - - -
Total 311,450,115 499,643,200 497,681,830
4.28.1: Contingent Liabilities
Particulars 2075-76 2074-75 2073-74
Acceptance and documentary credit - - -
Bills for collection - - -
Forward exchange contracts - - -
Guarantees 94,550,026 46,011,526 27,876,678
Underwriting commitment - - -
Other commitments - - -
Total 94,550,026 46,011,526 27,876,678
NMB Annual Report-2018/19 193
Notes to Financial StatementsFor the year ended 31 Ashad 20764.28.3: Capital commitments
Capital expenditure approved by relevant authority of the bank but provision has not been made in fi nancial statements
Particulars 2075-76 2074-75 2073-74
Capital commitments in relation to Property and Equipment - - -
Approved and contracted for - - -
Approved but not contracted for - - -
Sub total - - -
Capital commitments in relation to Intangible assets - - -
Approved and contracted for - - -
Approved but not contracted for - - -
Sub total - - -
Total - - -
4.28.4: Lease commitments
Particulars 2075-76 2074-75 2073-74
Operating lease commitments
"Future minimum lease payments under non cancellable operating lease, where the bank is lessee"
- - -
Not later than 1 year - - -
Later than 1 year but not later than 5 years - - -
Later than 5 years - - -
Sub total - - -
Finance lease commitments - - -
Future minimum lease payments under non cancellable operating lease, where the bank is lessee
Not later than 1 year - - -
Later than 1 year but not later than 5 years - - -
Later than 5 years - - -
Sub total - - -
Grand total - - -
www.nmbbanknepal.com194
Notes to Financial StatementsFor the year ended 31 Ashad 20764.28.5: Litigation
Particulars 2075-76 2074-75 2073-74
Contingent Tax Liabilities(Income Tax) 5,043,705 5,043,705 5,043,705
Interest Income 4.29
Particulars 2075-76 2074-75
Cash and cash equivalent 234,786,693 170,578,215
Due from Nepal Rastra Bank
Placement with bank and fi nancial institutions - -
Loan and advances to bank and fi nancial institutions 45,589,623 3,898,614
Loans and advances to customers 3,004,690,589 2,233,136,151
Investment securities 27,432,663 27,586,007
Loan and advances to staff 1,157,915 1,060,011
Other Interest Income
Total interest income 3,313,657,484 2,436,258,999
Interest Expense 4.30
Particulars 2075-76 2074-75
Due to bank and fi nancial institutions 242,447,005 137,513,121
Due to Nepal Rastra Bank 7,762,959 3,892,337
Deposits from customers 1,837,714,064 1,421,989,570
Borrowing - -
Debt securities issued - -
Subordinated liabilities - -
Other Charges - -
Total Interest expense 2,087,924,029 1,563,395,029
NMB Annual Report-2018/19 195
Notes to Financial StatementsFor the year ended 31 Ashad 2076Fees and commission income 4.31
Particulars 2075-76 2074-75
Loan administration fees - -
Service fees 166,552,077 129,471,699
Consortium fees
Commitment fees
DD/TT/Swist fees - -
Credit card/ATM issuance and renewal fees 26,202,921 17,585,344
Renewal fees
Prepayment and swap fees
Investment banking fees
Asset management fees
Brokerage fees
Remittance fees 9,043,811 11,219,321
Commission on letter of credit - -
Commission on guarantee contracts issued - -
Commission on share underwriting/issue
Locker rental 608,625 678,425
Other fees and commision income - 14,933,718
Total Fees and Commission Income 202,407,434 173,888,506
Fees and commission Expense 4.32
Particulars 2075-76 2074-75
ATM management fees 8,077,098 2,501,364
VISA/Master card fees
Guarantee commission
Brokerage
DD/TT/Swist fees.
Remittance fees and commission 37,244 42,722
Other fees and commission expense 100,145 233,585
Other commission and Fees 100,145 233,585
CIC Fees - -
Deposit Premium - -
Other Charges
Total Fees and Commission Expense 8,214,487 2,777,672
Net Trading Income 4.33
Particulars 2075-76 2074-75
Changes in fair value of trading assets - -
Gain/loss on disposal of trading assets - -
Interest income on trading assets - -
Dividend income on trading assets - -
Gain/loss foreign exchange transation 3,735,696 127,734
Other - -
Net Trading Income 3,735,696 127,734
www.nmbbanknepal.com196
Notes to Financial StatementsFor the year ended 31 Ashad 2076Other Operating Income 4.34
Particulars 2075-76 2074-75
Foreign exchange revauation gain (3,719,677) 104,709
Gain/loss on sale of investment securities - -
Fair value gain/loss on investment properties
Dividend on equity instruments 4,740,551 9,019,825
Gain/loss on sale of property and equipment 12,235 60,488
Gain/loss on sale of investment property
Operating lease income
Gain/loss on sale of gold and silver
Other Operating Income
Share of Income of Associates - -
Total 1,033,110 9,185,022
Impairment charge/(reversal) for loan and other losses 4.35
Particulars 2075-76 2074-75
Impairment charge/(reversal) on loan and advances to BFIs 4,497,596 900,000
Impairment charge/(reversal) on loan and advances to customers 177,707,937 45,999,435
Impairment charge/(reversal) on fi nancial Investment - -
Impairment charge/(reversal) on placement with BFIs
Impairment charge/(reversal) on property and equipment
Impairment charge/(reversal) on goodwill and intangible assets
Impairment charge/(reversal) on investment properties - -
Impairment charge/(reversal) on Other Assets - -
Total 182,205,533 46,899,435
Personal Expenses 4.36
Particulars 2075-76 2074-75
Salary 104,175,966 85,129,194
Allowances 74,256,633 50,381,103
Gratuity Expense 14,457,906 13,800,400
Provident Fund 8,176,230 6,850,668
Uniform 4,359,929 4,165,216
Training & development expense 5,221,026 3,198,370
Leave encashment 12,534,908 18,962,958
Medical - -
Insurance 1,970,955 1,366,473
Employees incentive 2,060,753 2,698,424
Cash-settled share-based payments - -
Pension expense - -
Finance expense under NFRS 1,157,915 1,060,011
Other expenses related to staff - -
Subtotal 228,372,223 187,612,817
Employees bonus 80,020,661 59,311,290
Grand Total 308,392,884 246,924,107
NMB Annual Report-2018/19 197
Notes to Financial StatementsFor the year ended 31 Ashad 2076Other Operating Expenses 4.37
Particulars 2075-76 2074-75
Directors' fee 714,500 536,000
Directors' expense 159,044 172,078
Auditors' remuneration 4,214,075 2,293,900
Other audit related expense 873,973 892,855
Professional and legal expense 137,000 149,360
Offi ce administration expense (4.37 A) 55,168,646 59,411,631
Operating Lease expense (4.37 B) 86,068,216 66,366,921
Operating expense of investment properties - -
Corporate social responsibility expense 3,255,039 2,522,504
Onerous lease provisions - -
Other Expenses 5,903,643 4,620,876
Repair & Maintenance Building 168,311 192,573
Repair & Maintenance Vehicle 1,175,829 983,866
Repair & Maintenance Others 2,960,992 1,985,818
Repair & Maint. Offi ce Equipment & Furniture 1,174,473 779,267
Share Issue Expenses 306,963 406,456
Director's Education Program 117,075 272,897
Techinical Fees - -
Total 156,494,137 136,966,125
Offi ce Administration Expenses 4.37 A
Particulars 2075-76 2074-75
Insurance 12,083,045 12,308,291
Postage, Telephone, 3,983,614 3,816,205
Printing & Stationery 7,537,994 11,234,584
Newspaper & Periodicals 443,030 260,700
Advertisements 7,351,695 7,341,673
Travelling Expenses 1,487,608 1,932,786
Fuel Expenses 3,620,899 3,179,282
Entertainment 2,830,472 2,216,880
AGM Expenses - 914,616
Annual Fee 93,464 43,042
Offi ce Expenses 940,417 5,017,520
Offi ce Inaugration Expenses 17,500 2,832,431
Clearing Expenses 852,262 854,467
Goods Carriage Expenses 303,360 1,006,663
Merger Expenses 1,439,429 -
Other Committee Meeting Allowance 541,169 119,054
Registration Charges 4,355,257 1,846,191
Internet & Cable Expenses 4,726,887 4,487,246
Miscelleneous Expenses 2,560,544 -
Total 55,168,646 59,411,631
www.nmbbanknepal.com198
Notes to Financial StatementsFor the year ended 31 Ashad 2076Operating Lease Expenses 4.37 B
Particulars 2075-76 2074-75
House Rent Expenses 44,047,442 37,794,004
Electricity Expenses 9,323,715 6,937,302
Security Expenses 32,697,059 21,635,616
Total 86,068,216 66,366,921
Depreciation and Amortisation 4.38
Particulars 2075-76 2074-75
Depreciation on property and equipment 41,368,619 35,386,492
Depreciation on investment property - -
Amortisation of intangible assets 16,068,079 9,902,832
Total 57,436,698 45,289,324
Non Operating Income 4.39
Particulars 2075-76 2074-75
Recovery of Loan written off - -
Other Income 19,993 12,400
Total 19,993 12,400
Non Operating expense 4.40
Particulars 2075-76 2074-75
Loan written off - -
Redundancy provision
Expense of restructuring
Other expense.
Total - -
NMB Annual Report-2018/19 199
Notes to Financial StatementsFor the year ended 31 Ashad 2076Income Tax Expenses 4.41
Particulars 2075-76 2074-75
Current Tax Expenses 205,466,362 178,440,863
Current Year 205,466,362 179,648,311
Adjustment for Prior Years - (1,207,448)
Deferred tax Expenses (20,728,170) 4,452,178
Origination and Reversal of Temporary Diff erences (20,728,170) 4,452,178
Change in tax Rate
Recognition of Previously unrecognized Tax Losses - -
Total Income tax expense 184,738,192 182,893,041
4.41.1: Reconciliation of Tax Expenses and Accounting Profi t
Particulars 2075-76 2074-75
Profi t Before Tax 720,185,949 577,220,969
Tax Amount at the Rate of 30% 216,055,785 173,166,291
Add: Tax Eff ect of the expenses that are not deductible for tax purpose 2,429,074 20,219,555
Less: Tax Eff ect on Exempt Income (504,365) (291,588)
Add/Less: Tax Eff ect on other Items (12,514,133) (14,653,395)
Total Income Tax Expenses 205,466,362 178,440,863
Eff ective Tax Rate 28.53% 30.91%
www.nmbbanknepal.com200
Unaudited Financial Results (Quarterly)Fourth Quarter ended of Fiscal Year 2018-19 (FY 2075/2076)
Rs. in '000'
Condensed Statement of Financial PositionThis Quarter Ending Immediate Previous Year
EndingAssets
Cash and cash equivalent 4,573,598 4,606,755
Due from Nepal Rastra Bank 1,148,398 1,122,470
Placement with Bank and Financial Institutions - -
Derivative fi nancial instruments - -
Other trading assets - -
Loan and advances to B/FIs - -
Loans and advances to customers 23,019,777 18,311,162
Investment securities 942,961 854,763
Current tax assets 23,466 -
Investment in susidiaries - -
Investment in associates - -
Investment property - -
Property and equipment 184,188 211,159
Goodwill and Intangible assets 4,385 6,213
Deferred tax assets 1,125 -
Other assets 91,154 47,551
Total Assets 29,989,050 25,160,073
Liabilities
Due to Bank and Financial Instituions 3,460,358 599,113
Due to Nepal Rastra Bank - -
Derivative fi nancial instruments - -
Deposits from customers 21,938,791 20,856,079
Borrowing 250,000 -
Current Tax Liabilities - 13,522
Provisions - -
Deferred tax liabilities - 7,696
Other liabilities 400,349 353,111
Debt securities issued - -
Subordinated Liabilities - -
Total liabilities 26,049,498 21,829,521
Equity - -
Share capital 2,515,236 2,515,236
Share premium 28,615 28,615
Retained earnings 712,297 256,830
Reserves 683,405 529,872
Total equity attributable to equity holders 3,939,552 3,330,552
Non-controlling interest - -
Total equity 3,939,552 3,330,552
Total liabilities and equity 29,989,050 25,160,073
NMB Annual Report-2018/19 201
Unaudited Financial Results (Quarterly)Fourth Quarter ended of Fiscal Year 2018-19 (FY 2075/2076)
Rs. in '000'
Condensed Statement of Profi t or Loss Up to this Quarter Up to Corrosponding Previous Year Quarter
Interest income 3,313,114 2,436,887
Interest expense (2,087,924) (1,563,395)
Net interest income 1,225,190 873,492
Fees and Commission Income 203,942 173,889
Fees and commission expense 8,214 2,778
Net fee and commission income 195,728 171,111
Net interest, fee and commission income 1,420,918 1,044,603
Net trading income 3,736 128
Other operating income 1,033 9,185
Total operating income 1,425,687 1,053,916
Impairment charge/(reversal) for loans and other losses 98,315 46,899
Net operating income 1,327,372 1,007,016
Operating expense - -
Personnel expenses 316,879 246,924
Other operating expenses 156,494 136,966
Depreciation & Amortisation 57,437 45,289
Operating Profi t 796,562 577,837
Non operating income 10 12
Non operating expense - -
Profi t before income tax 796,572 577,849
Income tax expense 197,035 183,081
Current Tax 210,439 178,441
Deferred Tax expense/(Income) (13,404) 4,641
Profi t for the period 599,537 394,768
Condensed Consolidated Statement of Comprehensive Income
Profi t/Loss for the period 599,537 394,768
Other Comprehensive lncome 10,695 (90,614)
Total Comprehensive lncome 610,232 304,154
Statement showing Net Profi t a� er Regulatory Adjustments:
Net Profi t for the period ended 31 Asadh 2076 599,537
Profi t required to be appropriated to statutory reserve (134,479)
Profi t required to be transfer to Regulatory Reserve (7,681)
Net Profi t for the period ended 31 Asar 2076 available for distribution 457,377
www.nmbbanknepal.com202
Unaudited Financial Results (Quarterly)Fourth Quarter ended of Fiscal Year 2018-19 (FY 2075/2076)
Ratios Upto This Quarter (YTD)
Up to Corrosponding Previous Year Quarter
Capital fund to RWA 15.47% 18.55%
Non performing loan (NPL) to toal loan 0.64% 0.52%
Total loan loss provision to Total NPL 245.39% 240.14%
Cost of Funds (YTD) 8.96% 9.41%
CCD Ratio 78.75% 74.13%
Base Rate 11.19% 12.62%
Average Interest Spread (Calculated as per NRB Directives)- Last Month of Quarter 4.93% 4.97%
NMB Annual Report-2018/19 203
Com
paris
ion
of S
tate
men
t of F
inan
cial
Pos
ition
As
on 3
1st A
shad
207
6Pa
rtic
ular
sA
s pe
r U
naud
ited
31
Ash
ad 2
076
As
per
Aud
ited
31
Ash
ad 2
076
Vari
ance
Rea
sons
for
Vari
ance
Ass
ets
In A
mou
nt%
(Rou
nded
off )
Cash
and
cas
h eq
uiva
lent
4,5
73,5
97,7
83
4,5
73,5
97,7
83
--
Due
from
Nep
al R
astr
a B
ank
1,1
48,3
97,9
28
1,1
48,3
97,9
28
-
-
Plac
emen
t with
Ban
k an
d Fi
nanc
ial I
nstit
utio
ns -
-
-
Der
ivat
ive
fi nan
cial
inst
rum
ents
-
-
-
Othe
r tra
ding
ass
ets
-
-
-
Loan
and
Adv
ance
s to
B/F
Is -
5
68,0
88,4
84
(568
,088
,484
)-1
00R
ecla
ssifi
catio
n of
Loa
ns a
nd A
dvan
ces
to M
FI's
Loan
s an
d ad
vanc
es to
cus
tom
ers
2
3,01
9,77
7,30
9 2
2,36
0,60
6,11
6 6
59,1
71,1
93
3Re
clas
sifi c
atio
n of
Loa
ns a
nd A
dvan
ces,
incr
ease
in L
LP a
nd d
erec
ogni
tion
of A
IR o
f bad
loan
Inve
stm
ent i
n se
curit
ies
942
,960
,565
9
19,7
97,1
04
23,
163,
460
2R
evis
ion
of fa
ir va
lue
of s
ecur
ities
Curr
ent T
ax A
sset
s 2
3,46
5,67
0 2
6,90
3,42
8 (3
,437
,757
)-1
5Ta
x ca
lcul
atio
n as
per
NFR
S pr
ofi t
Inve
stm
ent i
n su
bsid
iarie
s -
-
-
Inve
stm
ent i
n A
ssoc
iate
s -
-
-
Inve
stm
ent p
rope
rty
-
-
-
Prop
erty
and
equ
ipm
ent
184
,187
,640
1
84,1
87,6
35
5
0
Goo
dwill
and
Inta
ngib
le A
sset
s 4
,384
,560
4
,384
,560
-
-
Def
erre
d ta
x as
sets
1,1
24,6
08
18,
073,
481
(16,
948,
873)
-150
7A
udit
and
NFR
S ad
just
men
ts
Othe
r ass
ets
91,
154,
258
56,
547,
931
34,
606,
327
38A
udit
and
NFR
S ad
just
men
ts
Tota
l Ass
ets
29,9
89,0
50,3
20
29,8
60,5
84,4
50
128
,465
,870
0
Liab
ilitie
s
Due
to B
ank
and
Fina
ncia
l Ins
titut
ions
3,4
60,3
58,3
55
1,4
96,1
32,3
84
1,9
64,2
25,9
71
57R
ecla
ssifi
catio
n of
dep
osit
from
BFI
's a
nd s
hort
term
bor
row
ing
Due
to N
epal
Ras
tra
Ban
k -
-
-
-
Der
ivat
ive
Fina
ncia
l ins
trum
ents
-
-
-
-
Dep
osit
from
cus
tom
ers
21,
938,
790,
561
24,
153,
016,
531
(2,2
14,2
25,9
71)
-10
Rec
lass
ifi ca
tion
of d
epos
it fr
om B
FI's
Bor
row
ings
250
,000
,000
-
2
50,0
00,0
00
100
Rec
lass
ifi ca
tion
of s
hort
term
bor
row
ings
Curr
ent T
ax L
iabi
litie
s -
-
-
Prov
isio
ns -
-
-
Def
erre
d ta
x lia
bilit
ies
-
-
-
Othe
r lia
bilit
ies
400
,349
,094
3
56,5
19,9
24
43,
829,
170
11A
udit
and
NFR
S ad
just
men
ts
Deb
t sec
uriti
es is
sued
-
-
-
Subo
rdin
ated
Lia
bilit
ies
-
-
-
Tota
l lia
bilit
ies
26,0
49,4
98,0
10
26,0
05,6
68,8
39
43,
829,
170
43,
829,
170
Equi
ty
Shar
e Ca
pita
l
2
,515
,235
,600
2
,515
,235
,600
-
-
Shar
e Pr
emiu
m 2
8,61
4,71
3 2
8,61
4,71
3 -
-
Ret
aine
d Ea
rnin
g 7
12,2
96,6
84
548
,909
,519
1
63,3
87,1
65
23M
ainl
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e to
add
ition
al im
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ent
Res
erve
s 6
83,4
05,3
14
762
,155
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(7
8,75
0,46
6) 2
3 D
ue to
app
ropr
iatio
ns
Tota
l equ
ity a
ttri
buta
ble
to e
quity
hol
ders
3,9
39,5
52,3
10
3,8
54,9
15,6
11
84,
636,
700
2
Non
-con
trol
ling
inte
rest
s
-
-
-
-
Tota
l equ
ity3,
939,
552,
310
3,85
4,91
5,61
1 8
4,63
6,70
0 2
Tota
l lia
bilit
ies
and
equi
ty29
,989
,050
,320
29
,860
,584
,450
1
28,4
65,8
70
0
Cont
inge
nt li
abili
ties
and
com
mitm
ent
716
,915
,712
4
11,0
43,8
46
305
,871
,866
43
Rev
isio
n of
con
tinge
nt li
abili
ties
Net
ass
ets
valu
e pe
r sha
re15
6.63
153.
263.
370
Due
to a
bove
reas
ons
www.nmbbanknepal.com204
Part
icul
ars
As
per
Una
udite
d 20
75-7
6
As
per
Aud
ited
2075
-76
Vari
ance
Rea
sons
for
Vari
ance
In A
mou
nt%
(Rou
nded
off )
Inte
rest
Inco
me
3,3
13,1
14,4
15
3,3
13,6
57,4
84
(543
,069
) (0
) A
IR o
f bad
loan
der
ecog
nise
d w
ith re
tors
pect
ive
eff e
ct
Inte
rest
Exp
ense
(2,0
87,9
24,0
29)
(2,0
87,9
24,0
29)
-
-
Net
inte
rest
inco
me
1,22
5,19
0,38
7 1,
225,
733,
455
(543
,069
) (0
)
Fees
and
Com
mis
sion
Inco
me
203
,942
,367
2
02,4
07,4
34
1,5
34,9
33
1
Aud
it A
djus
tmen
t
Fees
and
Com
mis
sion
Exp
ense
8,2
14,4
87
8,2
14,4
87
-
-
Net
fee
and
Com
mis
sion
inco
me
195
,727
,880
1
94,1
92,9
47
1,5
34,9
33
1
Net
inte
rest
fee
and
com
mis
sion
inco
me
1,42
0,91
8,26
7 1,
419,
926,
403
991
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0
Net
Tra
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me
3,7
35,6
96
3,7
35,6
96
-
-
Othe
r Ope
ratin
g In
com
e 1
,033
,110
1
,033
,110
-
-
Tota
l ope
ratin
g in
com
e1,
425,
687,
072
1,42
4,69
5,20
8 9
91,8
64
0
Impa
irmen
t cha
rge/
(rev
ersa
l) fo
r loa
ns a
nd o
ther
loss
es 9
8,31
4,78
2 1
82,2
05,5
33
(83,
890,
751)
(85)
Aud
it A
djus
tmen
t
Net
Ope
ratin
g in
com
e1,
327,
372,
290
1,24
2,48
9,67
5 8
4,88
2,61
5 6
Oper
atin
g ex
pens
es
Pers
onal
Exp
ense
316
,879
,147
3
08,3
92,8
84
8,4
86,2
63
3
Aud
it A
djus
tmen
t
Othe
r Ope
ratin
g Ex
pens
es 1
56,4
94,1
37
156
,494
,137
-
-
Dep
reci
atio
n an
d am
ortis
atio
n 5
7,43
6,69
2 5
7,43
6,69
8 (6
) (0
)
Oper
atin
g Pr
ofi t
796
,562
,314
7
20,1
65,9
56
76,
396,
358
10
Non
ope
ratin
g in
com
e 9
,519
1
9,99
3 (1
0,47
4) (1
10)
Aud
it A
djus
tmen
t
Non
ope
ratin
g ex
pens
e -
-
-
Profi
t be
fore
inco
me
tax
796
,571
,833
7
20,1
85,9
49
76,
385,
884
10
Inco
me
tax
expe
nse
197
,034
,891
1
84,7
38,1
92
12,
296,
699
6
Curr
ent t
ax 2
10,4
39,0
52
205
,466
,362
4
,972
,690
2
A
udit
and
NFR
S ad
just
men
ts
Def
erre
d ta
x in
com
e (1
3,40
4,16
1) (2
0,72
8,17
0) 7
,324
,009
(5
5)A
udit
and
NFR
S ad
just
men
ts
Profi
t fo
r th
e pe
riod
599
,536
,943
5
35,4
47,7
57
64,
089,
185
11
Profi
t at
trib
utab
le to
:
Equi
ty h
olde
rs o
f the
ban
k 5
99,5
36,9
43
535
,447
,757
6
4,08
9,18
5 1
1
Non
-con
trol
ling
inte
rest
-
-
-
Profi
t fo
r th
e pe
riod
599
,536
,943
5
35,4
47,7
57
64,
089,
185
11
Othe
r Com
preh
ensi
ve In
com
e 1
0,69
5,03
3 (6
,348
,465
) (1
7,04
3,49
9) 1
59
Rev
isio
n of
fair
valu
e of
sec
uriti
es
Tota
l Com
preh
ensi
ve In
com
e 6
10,2
31,9
76
529
,099
,292
(8
1,13
2,68
4) 3
29
Dis
trib
utab
le P
rofi t
(NPR
in T
hous
and)
Net
pro
fi t/(
loss
) as
per p
rofi t
or l
oss
599
,537
5
35,4
48
64,
089
11
Add
/Les
s: R
egul
ator
y ad
just
men
ts a
s pe
r NR
B D
irect
ive
(142
,150
) (3
38,9
65)
196,
815
138
Profi
t/(lo
ss) a
st er r
egul
ator
y ad
just
men
ts 4
57,3
77
196
,483
26
0,98
457
Due
to a
bove
reas
ons
Com
paris
ion
of S
tate
men
t of P
rofi t
or L
oss
For t
he y
ear e
nded
31
Ash
ad 2
076
NMB Annual Report-2018/19 205
Notes to Financial StatementsFor the year ended 31 Ashad 2076
1. General Information
Om Development Bank Limited, herein ast er referred to as “the Bank” or “ODBL” was established ast er the merger of “City Development Bank Limited” with “Om Finance Limited”. It was further merged with Manaslu Development Bank Limited on 2074/03/02. ODBL is incorporated under the Companies Act, 2063 having registration number 1013/064-065 on 2064/04/15 to engage in fi nancial business and obtained license of operation as national level “B” Class fi nancial institution from Nepal Rastra Bank on 2074/3/6 (License No: “Kha”/54/064/065). Permanent Account Number was obtained on 2064/04/15 (PAN No 302647707) from Inland Revenue Department. The Registered offi ce of ODBL is situated at Gandaki Zone, Kaski District, Pokhara Metropolitan City Ward no.4, Chipledhunga.
ODBL has fi st y three (53) branches including head offi ce. The Bank is providing banking services with 53 branches and 19 ATMs. The Bank is listed at the Nepal Stock Exchange, Kathmandu, Nepal.
The Bank has now been acquired by NMB Bank Limited and joint operation has started from 2076/06/11.
2. Basis of Preparation
2.1 Statement of Compliance
The fi nancial statements have been prepared in accordance with Nepal Financial Reporting Standards (NFRS) issued by the Accounting Standards Board of Nepal on 13th September 2013.
NFRS conform, in all material respect, to International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
2.2 Reporting Period and Approval of fi nancial statement
The Bank follows the Nepalese fi nancial year based on the Nepalese calendar.
The accompanied fi nancial statements have been approved by the Board of Directors on its meeting held on 26 November 2019 and have been recommended for adoption by shareholders in the Annual General Meeting.
2.3 Functional and Presentation currency
Financial statements are denominated in Nepalese Rupees, which is the functional and presentation currency of the Bank.
2.4 Use of Estimates, assumption and judgments
The Bank, under NFRS, is required to apply accounting policies to most appropriately suit its circumstances and operating environment. Further, the Bank is required to make judgement in respect of items where the choice of specifi c policy, accounting estimate or assumption to be followed could materially aff ect the fi nancial statements. Later on this may be determined that a diff erent choice could have been more appropriate.
www.nmbbanknepal.com206
Notes to Financial StatementsFor the year ended 31 Ashad 2076
NFRS requires the Bank to make estimates and assumptions that will aff ect the assets, liabilities, disclosure of contingent assets and liabilities, and profi t or loss as reported in the fi nancial statements.
The Bank applies estimates in preparing and presenting the fi nancial statements. The estimates and underlying assumptions are reviewed periodically. Revision to accounting estimates are recognised in the period in which the estimates is revised, and are applied prospectively.
Disclosures of the accounting estimates have been included in the relevant section of the notes wherever the estimates have been applied along with the nature and eff ect of changes of accounting estimates, if any.
2.5 Changes in Accounting policies
The bank has adopted Nepal Financial Reporting Standard with certain ICAN Carve Outs as described in Notes. The application year for change in policy is:
Relevant Financial Statement
Nepalese Calendar
English Calendar
Opening NFRS SFP date 1 Shrawan 2074 16 July 2017
Comparative SFP Date
31 Ashad 2074 and 32 Ashad 2075
15 July 2017 and 16 July 2018
Comparative reporting period
1 Shrawan 2074- 32 Ashad 2075
16 July 2017 -16 July 2018
First NFRS SFP Date 31 Ashad 2076 16 July 2019
First NFRS reporting period
1 Shrawan 2075- 31 Ashad 2076
17 July 2018- 16 July 2019
2.6 New standards in issue but not yet eff ective
The standards and interpretations that are issued, but not yet eff ective, upto the date of issuance of the Bank’s fi nancial statements are disclosed below. The Bank intends to adopt these standards, if applicable, when they become eff ective.
IFRS 9 – Financial Instruments
IFRS 9 – Financial Instruments having expected credit loss model has been issued and eff ective from 1st January 2018 internationally but is not yet pronounced by The Institute of Chartered Accountants of Nepal (ICAN). For the reporting of fi nancial instruments, NAS 32 Financial Instruments, Presentation, NAS 39 Financial Instruments Recognition and Measurements and NFRS 7 Financial Instruments – Disclosures have been applied.
A number of new standards and amendments to the existing standards and interpretations have been issued by IASB ast er the pronouncements of NFRS with varying eff ective dates. Those become applicable when ASB Nepal incorporates them within NFRS.
A signifi cant impact on classifi cation and measurement including impairment of fi nancial instruments, will arise as a result of application of IFRS 9.
2.7 New Standards and Interpretation not adopted
Although IFRS 9 is applicable internationally from 1st of January 2018, it has not been applied as it is yet to be adopted by ICAN.
NMB Annual Report-2018/19 207
Notes to Financial StatementsFor the year ended 31 Ashad 2076
Further the Institute of Chartered Accountants of Nepal (ICAN) has provided carve out on various standards with diff erent time frame; some of which are compulsory and others optional for banks and fi nancial institutions. The list of carve-out and its compliance status while preparation of fi nancial statement of the bank is as given below;
NFRS 10 : Consolidated Financial Statements-Preparation of consolidated fi nancial statement using uniform accounting policies is necessary unless it is impracticable to do so- Optional-up to FY 2019-20-This carve out has no implication to the Bank as it does not have any subsidiaries.
NAS 28 : Investments in Associates and Joint Ventures
Accounting for Investment in Associates as per equity method using uniform accounting policies Optional-up to FY 2019-20-Not applicable
NAS 34 : Interim Financial Reporting
Impracticable to restate the corresponding previous interim period information-Optional-up to FY 2018-19-The Bank has utilized this carve out.
NAS 39: Financial Instruments: Recognition and Measurement- Incurred Loss Model to measure the Impairment Loss on Loan and Advances or impairment provision as per Nepal Rastra Bank (NRB) directive whichever is higher- compulsory-up to FY 2019-20. The Bank loans and advances are greater as per NRB Directive as compared to NFRS. Therefore, loans and advances are impaired as per NRB Directive.
NAS 39: Financial Instruments: Recognition and Measurement-Impracticability to determine transaction cost of all previous years which is the part of eff ective interest rate-Optional-up to FY 2018-19-TheBankhas utilized this carve out.
NAS 39 : Financial Instruments: Recognition and Measurement- Impracticability to determine interest income on amortized cost Optional-up to FY 2019-20-The Bank has utilized this carve out.
2.8 Discounting
Discounting has been applied where assets and liabilities are non-current and the impact of the discounting is material.
2.9 Limitation of NFRS implementation
If the information is not available and the cost to develop would exceed the benefi t derived, such exception to NFRS implementation has been noted and disclosed in respective section.
3. Signifi cant Accounting Policies The principal accounting policies applied in the
preparation of these fi nancial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
3.1 Basis of Measurement
The fi nancial statements have been prepared on a historical cost basis, except for available –for-sale investments, assets held for sale and discontinued
www.nmbbanknepal.com208
Notes to Financial StatementsFor the year ended 31 Ashad 2076
operations, other fi nancial assets and liabilities held for trading and fi nancial assets and liabilities designated at fair value through profi t or loss (FVTPL), all of which have been measured at fair value.
The fi nancial statements have been prepared on a going concern basis where the accounting policies and judgements as required by the standards are consistently used and in case of deviations disclosed specifi cally.
However, the bank has merged with NMB Bank Ltd. and have started joint operation on 11 Ashwin 2076.
3.2 Basis of Consolidation
The Bank does not have control over any other entity for consolidation of Financial Statements. Investments in Shares made by the Bank are fi nancial investments and have been described under 4.8 in Notes.
3.3 Cash and Cash Equivalent
The fair value of cash is the carrying amount. Cash and cash equivalent represent the amount of cash in hand, balances with other bank and fi nancial institutions, money at short notice and highly liquid fi nancial assets with original maturities of three months or less from the acquisition date that are subject to an insignifi cant risk of changes in their value and used by the Bank in the management of short-term commitment.
3.4 Financial Assets and Financial Liabilities
3.4.1 Recognition
Financial assets and liabilities, with the exception of loans and advances to customers and balances due to customers, are initially recognised on the trade date i.e. the date that the Bank becomes a party to the contractual provisions of the instrument. This includes regular way trades: purchases or sales of fi nancial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place. Loans and advances to customers are recognised when funds are transferred to the customers’ account at fair value inclusive of transaction costs. The Bank recognises due to customer balances when funds reach the bank.
3.4.2 Classifi cation
The Bank classifi es its fi nancial assets into the following measurement categories:
Financial assets and liabilities held for trading
The Bank classifi es fi nancial assets or fi nancial liabilities as held for trading when they have been purchased or issued primarily for short term profi t making through trading activities or form part of a portfolio of fi nancial instruments that are managed together for which there is evidence of a recent pattern of short-term profi t taking. Included in this classifi cation are Government bonds, NRB Bonds, Domestic Corporate bonds, Treasury bills, Equities etc. held primarily for the trading purpose.
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Financial assets and fi nancial liabilities designated at fair value through profi t or loss
Financial assets and fi nancial liabilities classifi ed in this category are those that have been designated by management upon initial recognition. Management may only designate an instrument at FVTPL upon initial recognition when one of the following criteria are met, and designation is determined on an instrument-by-instrument basis:
• The designation eliminates, or signifi cantly reduces, the inconsistent treatment that would otherwise arise from measuring the assets or liabilities or recognising gains or losses on them on a diff erent basis
Or
• The assets and liabilities are part of a group of fi nancial assets, fi nancial liabilities, or both, which are managed, and their performance evaluated on a fair value basis, in accordance with a documented risk management or investment strategy
Or
• The fi nancial instrument contains one or more embedded derivatives, unless they do not signifi cantly modify the cash fl ows that would otherwise be required by the contract, or it is clear with little or no analysis when a similar instrument is fi rst considered that separation of the embedded derivative(s) is prohibited.
Loans and receivables to Customers
Ast er initial measurement, loans and advances to customers are subsequently measured at amortisation over the period of loan. This practice
is almost nearer to the eff ective interest method prescribed by NFRS. The method has been adopted as the cost for computation for interest on eff ective interest method is huge in terms of benefi ts to be received from the computation in the short run.
Held-to-maturity
Held-to-maturity assets are non-derivative fi nancial assets with fi xed or determinable payments and fi xed maturities that the Bank’s management has the intention and ability to hold to maturity.
Available-for-sale.
Available-for-sale assets are those non-derivative fi nancial assets intended to be held for an indefi nite period of time, which may be sold in response to liquidity requirements or changes in interest rates, exchange rates, commodity prices or equity prices.
Financial liabilities held at amortised cost
Financial liabilities not classifi ed held at fair value through profi t or loss includes borrowings which are classifi ed as amortised cost instruments.
3.4.3 Measurement
Initial measurement
All fi nancial instruments are initially recognised at fair value plus transaction cost except in the case of fi nancial assets and fi nancial liabilities recorded at fair value through profi t or loss.
Subsequent measurement
Financial assets and liabilities designated at fair value through profi t or loss are subsequently carried at fair
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Notes to Financial StatementsFor the year ended 31 Ashad 2076
value, with gains and losses arising from changes in fair value taken directly to the statement of profi t or loss. Interest and dividend income or expense is recorded in revenue according to the terms of the contract, or when the right to payment has been established.
Available-for-sale fi nancial assets are subsequently carried at fair value, with gains and losses arising from changes in fair value taken to Other Comprehensive Income. The Bank makes irrevocable election to route fair value changes through Other Comprehensive Income. Gain/Loss on equity instruments classifi ed as fair value through other comprehensive income is charged directly to equity and impact of re-measurement is shown in OCI.
Loans and receivables and held-to-maturity fi nancial assets are subsequently measured at amortised cost. Within this category loans and advances to the customers have been recognised at amortised cost using the method that very closely approximates eff ective interest rate method. The losses arising from impairment of such investments are recognised in the income statement within credit loss expense. If the Bank were to sell or reclassify more than an insignifi cant amount of held-to-maturity investments before maturity (other than in certain specifi c circumstances), the entire category would be tainted and would have to be reclassifi ed as available-for-sale.
Financial liabilities are subsequently measured at amortised cost, with any diff erence between proceeds net of directly attributable transaction costs and the redemption value recognised in the statement of profi t or loss over the period of the borrowings using the eff ective interest method.
3.4.4 Derecognition
Financial assets are derecognised when the rights to receive cash fl ows from the assets have expired or where the Bank has transferred substantially all risks and rewards of ownership. If substantially all the risks and rewards have been neither retained nor transferred and the Bank has retained control, the assets continue to be recognised to the extent of the Bank’s continuing involvement.
Financial liabilities are derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing fi nancial liability is replaced by another from the same lender on substantially diff erent terms, or the terms of an existing liability are substantially modifi ed, such an exchange or modifi cation is treated as a derecognition of the original liability and the recognition of a new liability. The diff erence between the carrying value of the original fi nancial liability and the consideration paid is recognised in profi t or loss.
3.4.5 Determination of Fair Value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The determination of fair value has been done as per the framework laid down in NFRS 13 ‘Fair Value Measurement’.
3.4.6 Valuation Hierarchy
Assets and liabilities carried at fair value or for which fair values are disclosed have been classifi ed into three levels according to the observability of the signifi cant inputs used to determine the fair values. Changes in the observability of signifi cant valuation inputs during the reporting period may
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result in a transfer of assets and liabilities within the fair value hierarchy. The determination of fair value has been done in accordance to NFRS 13 ‘Fair Value Measurement. The Bank recognises transfers between levels of the fair value hierarchy when there is a signifi cant change in either its principal market or the level of observability of the inputs to the valuation techniques as at the end of the reporting period.
Level 1 fair value measurements are those derived from unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 valuations are those with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and fi nancial instruments valued using models where all signifi cant inputs are observable.
Level 3 portfolios are those where at least one input, which could have a signifi cant eff ect on the instrument’s valuation, is not based on observable market data.
3.4.7 Impairment of Loans and Advances
The Bank reviews its individually signifi cant loans and advances at each Reporting date to assess whether an impairment loss should be provided in the Statement of Profi t or loss. In particular, the Management’s judgment is required in the estimation of the amount and timing of future cash fl ows when determining the impairment loss. These estimates are based on assumptions about a number of factors and hence actual results may diff er, resulting in future changes to the provisions made.
The individual impairment provision applies to fi nancial assets evaluated individually for impairment
and is based on Management’s best estimate of the present value of the future cash fl ows that are expected to be received. In estimating these cash fl ows, Management makes judgments about a borrower’s fi nancial situation and the net realisable value of any underlying collateral. Each impaired asset is assessed on its merits, and the workout strategy and estimate of cash fl ows considered recoverable.
Individual assessment of impairment of exposures means establishing whether objective evidence of impairment exists, estimation of the present value of future cash fl ows, and calculation of the value of impairment for each individual receivable from the borrower included in this assessment.
The bank has considered all loans and advances above NRs. 15 millions for individual assessment of impairment. The bank determines, for each individual loan to be assessed for individual impairment, whether they expect to collect their receivables from expected future cash fl ows (going concern) or from collateral realization (gone concern). If a bank identifi es objective evidence of impairment, the bank indicates, at single debtor level, the most realistic sources of repayment (collection approach/strategy) based on all available information regarding such borrower’s fi nancial position and performances. The bank assesses whether collection will be made from the borrower`s expected future operating cash fl ows (borrower continues to perform business activities – going concern) or on the basis of collateral enforcement and realization (expectation that the borrower ceases to exist – gone concern). In both cases, bank uses conservative assumptions relating to the estimation of the expected cash fl ows, taking into account current economic conditions and the Bank’s own economic forecasts.
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Notes to Financial StatementsFor the year ended 31 Ashad 2076
When estimating impairment based on collateral realization, the recoverable amount is the present value of the net infl ow from collateral realization (taking into account the priority of claims), discounted by applying the original eff ective interest rate to the expected time to realization.
A collective impairment provision is established for:
□ Groups of homogeneous loans and advances that are not considered individually signifi cant; and
□ Groups of assets that are individually signifi cant but that were not found to be individually impaired
The collective provision for groups of homogeneous loans is established using statistical methods based on historical loss rate experience, Loss Given Default (LGD) and Probability of Default (PD) computed using the statistical analysis of historical data on delinquency to estimate the amount of loss for each class of portfolio selected on the basis of its product, risk factor, collateral coverage, exposure group etc. Management applies judgment to ensure that the estimate of loss arrived at, on the basis of historical information is appropriately adjusted to refl ect the economic conditions and portfolio factors as at the Reporting date. The loss rates are regularly reviewed against actual loss experience.
In assessing the need for collective impairment, Management considers factors such as credit quality (for example, loan to collateral ratio, level of restructured performing loans), portfolio
Size, concentrations and economic factors.
To estimate the required allowance, assumptions are made to defi ne how inherent losses are modelled and to determine the required input parameters, based on historical experience and current economic conditions. The accuracy of the provision depends on the model assumptions and parameters used in determining the collective provision.
As per the carve-out provided in NAS 39, the bank shall measure impairment loss on loan and advances as the higher of amount derived as per norms prescribed by Nepal Rastra Bank for loan loss provision and amount determined as per paragraph 63 of NAS 39.As stated in 2.7 the bank loans and advances is greater considering the NRB directive as compared to NFRS impairment provisioning. Therefore, provisioning as per NRB directive is applied.
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Notes to Financial StatementsFor the year ended 31 Ashad 2076
Explanatory Notes
The impairment status as per para 63 of NAS 39 and as per NRB directive are as follows:
Provision as per NFRS
Particulars 2074 2075 2076
Individual 38,085,741 32,239,966 44,347,145
Collective 10,139,150 15,565,066 14,598,380
Total NFRS Provision (A) 48,224,891 47,805,032 58,945,526
Provision as per NRB
Particulars 2074 2075 2076
Good 134,591,597 173,625,533 215,008,369
Watch list 23,712,077 43,652,164 80,976,118
Restructured - 3,842,959 9,149,440
Substandard 18,888,021 14,940,871 24,014,474
Doubtful 9,039,988 4,988,638 15,008,294
Bad 32,976,580 25,057,533 104,156,535
Total NRB Provision (B) 219,208,262 266,107,697 448,313,230
Gap/(Excess) (A)-(B) (170,983,371) (218,302,665) (389,367,704)
3.4.8 Impairment of Non-Financial Assets
The Bank assesses whether there are any indicators of impairment for an asset or a cash generating unit (CGU) at each Reporting date or more frequently, if events or changes in circumstances necessitate to do so. This requires the estimation of the ‘Value in use’ of such individual assets or the CGUs. Estimating ‘Value in use’ requires the Management to make an estimate of the expected future cash fl ows from the asset or the CGU and also to select a suitable discount rate in order to calculate the present value of the relevant cash fl ows. This valuation requires the Bank to make estimates about expected future cash fl ows and discount rates and hence, they are subject to uncertainty.
3.5 Trading Assets
Trading assets are those assets that the bank acquires principally for the purpose of selling in the near term or holds as part of a portfolio that is managed together for short-term profi t shall be presented under this account head. The other trading asset includes non-derivative fi nancial assets. It includes Government bonds, NRB Bonds, Domestic Corporate bonds, Treasury bills, Equities etc. held primarily for the trading purpose.
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3.6 Derivatives Assets and Derivative Liabilities
Derivative assets and liabilities (herein referred to as instrument) is a contract whose value changes to the change in agreed-upon underlying fi nancial asset/liability which requires no initial net investment and is settled at future date. Derivative instruments includes transactions like interest rate swap, currency swap, forward foreign exchange contract etc. held for trading as well as risk management purposes. Derivative fi nancial instruments are initially measured at fair value on the contract date and are subsequently re-measured to fair value at each reporting date.
Explanatory Notes
The details regarding the same is given in Schedule 4.4. However, the bank doesn’t have nor deals with derivative fi nancial instruments.
3.7 Property and Equipment
All property and equipment’s are stated at Historical cost. Cost includes expenditure that is directly attributable to the acquisition of the assets.
Subsequent costs are included in the asset’s carrying amount or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefi ts associated with the item will fl ow to the Bank and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profi t or loss during the fi nancial period in which they are incurred.
Freehold land is not depreciated although it is subject to impairment testing. Depreciation on other assets is calculated using the straight- line method to
allocate their cost to their residual values over their estimated useful lives, as follows:
Building 20 years Vehicle 5 Years Furniture(wooden) 5 Years Furniture(other) 10 Years Offi ce Equipment 5 Years Computer Equipment 4 Years Other Assets 5 Years Lease hold assets 10 Years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of fi nancial position date. The value of the assets fully depreciated but continued to be in use is considered not material.
At each reporting date, assets are also assessed for indicators of impairment. In the event that an asset’s carrying amount is determined to be greater than its recoverable amount, the asset is written down immediately to the recoverable amount.
Assets with costs less than NPR 10,000 are charged off on purchase as revenue expenditure.
Gains and losses on disposals are included in the Statement of Profi t or Loss.
3.8 Intangible assets
Acquired Intangible Assets
Intangible assets are initially measured at fair value, which refl ects market expectations of the probability that the future economic benefi ts embodied in the asset will fl ow to the Bank and are amortised on the basis of their expected useful lives.
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Computer so� ware
Acquired computer sost ware licences are capitalised on the basis of the costs incurred to acquire and bring to use the specifi c sost ware. Costs associated with the development of sost ware are capitalised where it is probable that it will generate future economic benefi ts in excess of its cost. Computer sost ware costs are amortised over the period of 5 years in Straight Line method (SLM). Costs associated with maintaining sost ware are recognised as an expense as incurred.
At each reporting date, these assets are assessed for indicators of impairment. In the event that an asset’s carrying amount is determined to be greater than its recoverable amount, the asset is written down immediately.
3.9 Investment Property
Land or Land and Building other than those classifi ed as property and equipment and non-current assets held for sale under relevant accounting standard are presented under this account head. Investment properties are measured initially at its cost. Transaction costs are included in the initial measurement. Ast er initial recognition, the Bank chooses the cost model to measure its investment properties in accordance with NAS 16. Non-Banking Assets which are not intended to be sold within a period of next one year is also classifi ed as Investment Property. Non-banking assets taken over the lower of Fair Value or Total amount due from customer as per guidelines issued by the Regulator is continued to be shown at the recorded value till the same is disposed.
Further land which is leased or held for capital appreciation motive is classifi ed as investment property.
Explanatory Notes
The bank does not have any investment property.
3.10 Non-Current Assets held for Sale and Discontinued Operation
Non-banking assets of the bank which are expected to be sold within period of one year is classifi ed as non-current assets held for sale. NBA is recognised at a value lower of total receivable from customer or fair value of property on the date of adoption.
Explanatory Notes
The details of non-current assets held for sale of the bank has been presented under Schedule 4.16.
3.11 Income Tax
3.11.1 Current tax
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from, or paid to, the taxation authorities of Nepal. The tax rates and tax laws used to compute the amount are those that are enacted, or substantively enacted, by the reporting date in Nepal. The liabilities recognised for the purpose of current Income tax, including fees, penalties are included under this head.
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Notes to Financial StatementsFor the year ended 31 Ashad 2076
3.11.2 Deferred Tax Assets/Liabilities
Deferred tax is provided in full, using the liability method, on temporary diff erences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated fi nancial statements Deferred income tax is determined using tax rate applicable to the Bank as at the reporting date which is expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised where it is probable that future taxable profi t will be available against which the temporary diff erences can be utilised.
Deferred tax relating to items which are charged or credited directly to equity, is credited or charged directly to equity and is subsequently recognised in the statement of profi t or loss together with the deferred gain or loss.
Explanatory Notes
The details of deferred tax and its working has been presented under Schedule 4.15.
3.12 Deposits, Debt securities issued and subordinate Liabilities
The deposits held by the bank on behalf of its customers are classifi ed as fi nancial liabilities and measured at amortised cost under eff ective interest method. The bank does not have any debt securities issued and subordinated liabilities.
Explanatory Notes
The details of Deposits in given under Schedule 4.20. The bank does not have any debt securities nor subordinate liabilities.
3.13 Provisions
Provisions are recognised in respect of present obligations arising from past events where it is probable that outfl ow of resources will be required to settle the obligations and they can be reliably estimated. Provisions are reviewed at each reporting date and adjusted to refl ect the best estimate
3.14 Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefi ts will fl ow to the Bank and the revenue can be reliably measured. The following specifi c recognition criteria must also be met before revenue is recognised.
3.14.1 Interest Income
Interest Income include interest income on loan and advance, investment securities except on those investment securities measure at fair value through profi t or loss, cash and cash equivalent, due from Nepal Rastra Bank, due from BFIs, loan and advances to staff etc.
Interest income on loans and advances is recognized on amortised principal which is nearer to the eff ective interest method suggested by NFRS. The adoption of eff ective interest method is not possible due to constraints of time, eff ort and cost in short term compared to the benefi ts it provides. Benefi t of carve-out bas been applied to this eff ect. Interest of loans and advances which are signifi cantly impaired are not recognized.
Interest income on government bond, treasury bills and bank balances are recognized under eff ective interest method.
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Explanatory Notes
The details of interest income of the bank for the period is presented under Schedule 4.29.
3.14.2 Fees and commissions
Fees and commissions are generally recognised on an accrual basis when the service has been provided or signifi cant act performed. Service Fee Income/Expenses are recognized on accrual basis unless it is impracticable to recognize as allowed through carve-out on NFRS.
3.14.3 Dividend Income
Dividend income is recognised when the Bank’s right to receive the payment is established, which is generally when the shareholders approve the dividend.
3.14.4 Net Trading Income
Net trading income includes all gains and losses from changes in fair value and the related interest income or expense and dividends, for fi nancial assets and fi nancial liabilities held for trading.
3.14.5 Net income from other fi nancial instrument at fair value through Profi t or Loss
Gains and losses arising from changes in the fair value of fi nancial instruments designated at fair value through profi t or loss are included in the statement of profi t or loss in the period in which they arise. Contractual interest income and expense on fi nancial instruments held at fair value through profi t or loss is recognised within net interest income.
3.15 Interest Expense
For all fi nancial instruments measured at amortised cost, interest bearing fi nancial assets classifi ed as available-for-sale and fi nancial instruments designated at FVTPL, interest expense is recorded using the EIR unless it is impracticable.
3.16 Employee Benefi ts
3.16.1 Post- Retirement Benefi ts
The Bank has schemes of retirement benefi ts namely Gratuity, Provident Fund and Medical Allowance.
A) Defi ned Contribution Plan
Provident Fund
For Provident Fund, the bank pays contributions to the publicly administered provident fund plans (named Employee Provident Fund) on a mandatory basis, and such amounts are charged to operating expenses. The bank has no further payment obligations once the contributions have been paid.
B) Defi ned Benefi t Plan
Gratuity
Bank provides for gratuity to entire employee from the date of joining. The plan provides for lump sum payments to employees at retirement or upon death while in employment or on termination of employment for an amount equivalent to defi ned days’ eligible salary payable for each completed years of service. Bank deposits such gratuity amount in Citizen Investment Trust (CIT) in annual basis.
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Notes to Financial StatementsFor the year ended 31 Ashad 2076
The bank was in process being acquired by NMB Bank Ltd. It has already started joint operation eff ective from 11st Ashwin 2076. Hence, the gratuity liability has been booked in full without actuarial valuation applying conservatism concept.
Explanatory Notes
Gratuity benefi t obligations, plan assets, movement in gratuity liability and fair value of assets etc. related with long term employee benefi ts has been presented under schedule 4.23.
3.16.2 Accumulated Leave
Short Term Benefi t Liability
The Bank provides accumulated leave benefi t under its staff byelaw. The Home Leave is accumulated up to 90 days and there is no limit for the accumulation of Sick Leave.
Accumulated leave benefi ts are treated as short term employment benefi t as allowed by Para 15 of NAS 19. Therefore, the additional expenses on accumulated leave is charged to Profi t and Loss account as on Ashad end 2076.
The bank has no further payment obligations once the contributions have been paid.
3.16.3 Staff Bonus
Provision for bonus has been made at 10% of net profi t before such bonus.
Explanatory Notes
Employee benefi t reported under schedule 4.36 includes provision for bonus as per bonus act.
3.17 Leases
The determination of whether an arrangement is a lease, or contains a lease, is based on the substance of the arrangement and requires an assessment of whether the fulfi lment of the arrangement is dependent on the use of a specifi c asset or assets or whether the arrangement conveys a right to use the asset.
Bank as a lessee
Leases that do not transfer to the Bank substantially all of the risks and benefi ts incidental to ownership of the leased items are operating leases. Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.
Bank as a lessor
Leases where the Bank does not transfer substantially all of the risk and benefi ts of ownership of the asset are classifi ed as operating leases. Rental income is recorded as earned based on the contractual terms of the lease in other operating income.
Explanatory Notes
Operating lease expenses is shown under other operating Lease expenses in schedule 4.37B.
3.18 Foreign Currency Translation
Foreign currency transactions are translated into the NPR using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation at year end exchange rates of monetary assets and liabilities
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denominated in foreign currencies are recognised in the profi t or loss, except when recognised in other comprehensive income. Non-monetary assets that are measured at fair value are translated using exchange rate at the date that fair value was determined.
Explanatory Notes
Foreign currency translation gain/loss is presented in schedule 4.34 under other operating income. 25% of such revaluation gain is transferred to foreign exchange fl uctuation fund as per Section 45 of Bank and Financial Institutions Act.
3.19 Financial Guarantee and Loan Commitment
Financial guarantee contracts are contracts that require the bank to reimburse the holder for a loss that it incurs because a specifi ed debtor fails to make payment on a debt instrument. A loan commitment is a fi rm commitment to provide credit under pre-specifi ed terms and conditions in the future. Financial Guarantee contracts and Loan Commitments are measured at the higher of:
the expected credit losses on the exposure; or
the fair value of the instrument at initial recognition (plus transaction costs) less the cumulative amount of revenue recognized on the instrument
Loan commitments will be treated as derivatives if there is a pattern of selling the resultant assets within a short period ast er their origination. Loan commitments in our regular business like Lending,
Trade Finance, Consumer Finance and ALM do not fall in this category, and accordingly will not be treated as derivatives. However, transactions in Loan syndication and underwriting activities may have some of these features.
Explanatory Notes
Details Relating to Financial Guarantee are given in Schedule 4.28.1 in Guarantees under Contingent Liabilities.
The bank does not have any Loan Commitments except undrawn limits of Overdrast s under Schedule 4.28.2.
3.20 Share Capital and Reserves
3.20.1 Share Capital
Financial instruments issues are classifi ed as equity when there is no contractual obligation to transfer cash, other fi nancial assets or issue available number of own equity instruments. Incremental costs directly attributable to the issue of new shares are shown in equity as deduction net of taxes from the proceeds.
Dividends on ordinary shares classifi ed as equity are recognised in equity in the period in which they are declared.
The issue expenses for the issue was charged in the year of issue and though the impact from past of the Bank’s equity the amount has not been adjusted with the share capital and the Bank considered the impact to be immaterial.
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3.20.2 Reserves
The reserves include regulatory and free reserves.
Statutory General Reserve
There is a regulatory requirement to set aside 20% of the net profi t ast er Tax to the general reserve until the reserve is twice the paid of share capital. The reserve is the accumulation of setting aside profi ts over the years.
No Dividend (either cash dividend or bonus share) are distributed from the amount in General/ Statutory Reserve.
Assets Revaluation Reserve
Any Reserve created from revaluation of assets (such as Property and Equipment, Intangible Assets, Investment Property) shall be presented under this heading. Revaluation reserves ost en serve as a cushion against unexpected losses but may not be fully available to absorb unexpected losses due to the subsequent deterioration in market value and tax consequences of revaluation. The Bank has followed cost model therefore no assets revaluation reserve is created.
Capital Reserve
The capital reserve represents the amount of those reserves which are in nature of capital and which shall not be available for distribution of cash dividend. The amount from share forfeiture due to non-payment of remaining amount for the unpaid shares, capital grants received in cash or kind, capital reserve arising out of merger and acquisition etc are presented under this heading.
Special Reserve
Any special reserve that is created as per the specifi c requirement of NRB directive or special instruction of NRB are represented as special reserve. The amount allocated to this reserve by debiting retained earning account are presented under this heading.
Corporate Social Responsibility Fund
The fund created for the purpose of corporate social responsibility by allocating 1% of Net profi t as per NRB Directive is presented under this account head.
Investment Adjustment Reserve
It is a regulatory reserve created as a cushion for adverse price movements in Bank’s investments as directed by the Directives of Nepal Rastra Bank. Banks are required to create Investment Adjustment Reserve equal to 2% of Value of investment.
Deferred Tax Reserve
It is banks policy to appropriate the equivalent portion of the deferred tax assets when a net deferred tax asset arises. In event where deferred tax liability arises such amounts are reclassifi ed within the equity to retained earnings.
Exchange Equalization Reserve
A bank or fi nancial institution carrying on foreign exchange business shall make necessary accounts adjustments in the profi t and loss account of the revaluation profi ts earned as a result of fl uctuations in the exchange rates of foreign currencies, other than the Indian currency, at the end of the same fi scal year. While making such accounts adjustment in the profi t and loss account, if revaluation gain has
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been made in any fi scal year, at least twenty fi ve per cent of such profi ts shall be credited to the exchange equalization fund as per Section 45 of Bank and Financial Institutions act (2073).
Staff Training Reserve
Bank has regulatory requirement to set aside 3% of the previous year’s staff cost for staff training and any defi cit on such amount are set aside in the reserves.
Regulatory Reserve
The amount that is allocated from profi t or retained earnings of the Bank to this reserve as per the Directive of NRB for the purpose of implementation of NFRS and which shall not be regarded as free for distribution of dividend (cash as well as bonus shares) shall be presented under this account head. The amount allocated to this reserve shall include interest income recognized but not received in cash, diff erence of loan loss provision as per NRB directive and impairment on loan and advance as per NFRS (in case lower impairment is recognized under NFRS), amount equals to deferred tax assets, actual loss recognized in other comprehensive income, amount of goodwill recognized under NFRS etc.
Actuarial Gain/(Loss) Reserve
Actuarial Gain/(Loss) Reserve has been created to record the Actuarial gain or loss occurring due to the change in Actuarial Assumption under NAS 19 as Per NRB Guidelines . Actuarial gain or loss as a result of Change in Gratuity valuations has been included in the Reserve.
Fair Value Reserve
Financial Assets that are not classifi ed as Fair Value through Profi t and Loss, Held To maturity and Loans
and Receivables are categorised as Available for Sale fi nancial instruments and recorded at Fair Value through Other Comprehensive Income. The cumulative amount of changes in fair value of those fi nancial assets is presented as fair value reserve.
Other reserve
Any reserve created with specifi c or non-specifi c purpose (except stated in above) are presented under thus by disclosing accounting heads.
Movement in reserves
Movements in the reserves are given in detail in Statement of Changes in Equity.
Explanatory Notes
Reserves are depicted under Schedule 4.27.
3.21 Earnings per share
The Bank measures earning per share on the basis of the earning attributable to the equity shareholders for the period. The number of shares is taken as the weighted average number of shares for the relevant period as required by NAS 33 - Earnings Per Share.
There are no instruments, such as convertibles, that would require dilution of EPS, therefore diluted EPS has not been computed and disclosed.
3.22 Segmental Reporting
The Bank’s segmental reporting is in accordance with NFRS 8 Operating Segments. Operating segments are reported in a manner consistent with the internal reporting provided to the bank’s management, which is responsible for allocating resources and assessing performance of the operating segments.
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Notes to Financial StatementsFor the year ended 31 Ashad 2076
All transactions between business segments are conducted on an arm’s length basis, with intra-segment revenue and costs being eliminated in Head Offi ce. Income and expenses directly associated with each segment are included in determining business segment performance.
The Bank has determined segments based on district by the management for decision making purpose.
Explanatory Notes
Operational segmental information has been provided under Disclosures and Additional Information under Schedule 5.4.
3.23 Interim Financial Reporting
Interim reports corresponding to the fi nancial statements had been reported in accordance with the regulatory reporting requirements. Those statements have been published quarterly in national level newspaper. The bank has utilized the benefi ts provided by Carve-out on NFRS for reinstatement of earlier year fi gures.
5. Disclosures and Additional Information
5.1 Risk Management
In compliance with Nepal Rastra Bank Directive on 6 “Corporate Governance”, the Board of bank has established a Risk Management Committee with clear terms of reference. As at the date of this report, the Bank’s Risk Management Committee comprised of the following:
S.N. Members of Risk Management Committee Designation
1 Rajendra Kumar Batajoo Co-ordinator
2 Shree Krishna Regmi Member
3 Madhav Adhikari Member
4 Kiran Paudel Member Secretary
The Committee meets at least four times annually. The committee oversees and reviews the fundamental prudential risks including operational, credit, market, reputational, capital and liquidity risk etc.
The responsibilities of Risk Management Committee are as follows: a. Formulate policies and guidelines for
identifi cation, measurement, monitoring and control all major risk categories.
b. Ensuring the bank has clear, comprehensive and well documented policies and procedure.
c. Defi ning the bank’s overall risk tolerance in relation to credit risk.
d. Ensuring that bank’s signifi cant risks exposure is maintained at prudent levels and consistent with the available capital.
Apart from Board Level Risk Management Committee the other committees and groups as mentioned below supports for Overall Risk Management.
i) Risk Governance
Risk management committee of the bank has formed to review the credit risk, market risk and liquidity risk of the bank. Apart from this the bank has formed the Assets Liability Management Committee to monitor Liquidity risk as well as market risk, AML CFT committee in order to monitor the operational risk. The committee and subcommittee has eff ectively discharged their duties and responsibility.
NMB Annual Report-2018/19 223
Notes to Financial StatementsFor the year ended 31 Ashad 2076
Risk Management Department conducts periodical fi nancial surveillance and monitoring. In addition to this, the risk management committee analyse the Stress testing of the bank as required by Nepal Rastra Bank and its impact and corrective action to mitigate the risk.
Through its risk management framework, the Bank seeks to effi ciently manage credit, market and liquidity risks which arise directly through the Bank’s commercial activities as well as operational, regulatory and reputational risks which arise as a normal consequence of any business undertaking. As part of this framework, the Bank uses a set of principles that describe its risk management culture. The bank has developed Risk Management Policy, Guideline and Framework 2017 to manage Credit risk, Market risk and liquidity risk.
The major risk areas and mitigation mechanism is as given below;
1) Credit Risk
Credit risk is the potential for loss due to failure of counterparty to meet its obligations to pay the Bank in accordance with agreed terms.
The bank has Credit Policy Guidelines (CPG) that, inter alia, consist of areas of lending, eligibility of borrower, loan application format and requirement, necessary documents for processing loans, risk assessment areas, loan approval authority and other general credit principles. The CPG has been formulated by keeping in mind the prudential norms given by NRB.
A standardized loan application forms has been in use for facilitating collection and analysis of all the relevant data for evaluating credit worthiness and proper evaluation of the credit risk of the prospective
borrower. The factors considered in evaluating loan applications normally included prospects of the business, management of the fi rm/company, fi nancial analysis- income statement, balance sheet, cash fl ow statement, key fi nancial indicators, key risk and mitigates. Further, inspection and supervision are also conducted before approval of the loan for pre-analysis and ast er the disbursement of loan as well for monitoring the utilization of loan.
2) Operational Risk
Operational risk is the prospect of loss of resulting from inadequate or failed procedures, systems or policies, employee errors, system failures, fraud or other criminal activity, any event that disrupts business processes.
Operational risk exposures are managed through a consistent set of management processes that drive risk identifi cation, assessment, control and monitoring. For the control of operational risk of institution, it has Financial Administration Policy, Employee Bylaws, operational manual, AML/CFT policy, Suspicious Transaction identifi cation Procedure, Politically exposed person policy, which guides the day to day operation.
Each risk control owner is responsible for identifying risks that are material and for maintaining an eff ective control environment across the organization. Risk control owners have responsibility for the control of operational risk arising from the management of the following activities: External Rules and Regulations, Liability, Legal Enforceability, Damage or Loss of Physical Assets, Safety and Security, Internal Fraud or Dishonesty, External Fraud, Information Security, Processing Failure, and Model. Operational risks can arise from all business lines and from all activities carried out by the Bank. Operational
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Notes to Financial StatementsFor the year ended 31 Ashad 2076
Risk management approach seeks to ensure management of operational risk by maintaining a complete process universe defi ned for all business segments, products and functions processes.
3) Market Risk
Risks arising out of adverse movements in interest rates and equity prices are covered under Market Risk Management. Market Risk is the potential for loss of earnings or economic value due to adverse changes in fi nancial market rates or prices. Institution exposure to market risk arises principally from customer driven transactions.
In line with Risk Management Guidelines prescribed by NRB, the Bank focuses on risk management in addition to that Interest rate risk is assessed at a regular interval to strengthen market risk management. The market risk is managed within the risk tolerances and market risk limits set by ALCO. ALCO regularly meets, analyse and takes decision over the Market Risk by analysing the internal as well as external factor.
4) Liquidity Risk
Liquidity risk is the potential that the Bank either does not have suffi cient liquid fi nancial resources available to meet all its obligations as they fall due, or can only access these fi nancial resources at excessive cost. The Liquidity Risk is managed by ALCO. The ALCO has developed the Unifi ed Treasury circular for overall liquidity management of bank.
5) Reputational Risk
Reputational risk is a risk of loss resulting from damages to reputation of institution, in lost revenue; increased operating, capital or regulatory costs; or destruction of shareholder value.
Reputational risk is managed by the management committee which are responsible for protecting the institution’s reputation locally and has the responsibility to ensure that the Bank does not undertake any activities that may cause material damage to the reputation of institution.
6) Employee Benefi t Risk
Employee benefi t risk is the potential risk of loss due to having to meet shortfall in the Bank’s defi ned benefi ts gratuity and leave encashment schemes.
The gross obligation for gratuity is calculated considering the salary at the time of retirement of the individual staff and number of years’ service with the Bank. The home leave can be accumulated for maximum period of 60 days for total period served by individual staff . The gross obligation for leave encashment is calculated considering the last drawn salary multiplied by no of eligible days for leave encashment.
7) Internal Control
The Board is committed to managing risks and in controlling its business and fi nancial activities in a manner which enables it to maximize profi table business opportunities, avoid or reduce risks which can cause loss or reputational damage, ensure compliance with applicable laws and regulations and enhance resilience to external events. To achieve this, the Board has adopted policies and procedures of risk identifi cation, risk evaluation, risk mitigation and control/monitoring.
The eff ectiveness of the Company’s internal control system is reviewed regularly by the Board, its Committees, Management and Internal Audit. The Audit Committee has reviewed the eff ectiveness of the Bank’s system of internal control during the year
NMB Annual Report-2018/19 225
Notes to Financial StatementsFor the year ended 31 Ashad 2076
and provided feedback to the Board as appropriate. The bank has outsourced the Internal Audit function to maintain independency on the internal control system of institution. The Internal Audit monitors compliance with policies/standards and the eff ectiveness of internal control structures across the Company through its program of business/unit audits. The Internal Audit function is focused on the areas of greatest risk as determined by a risk-based assessment methodology. Internal Audit reports are quarterly forwarded to the Audit Committee. The fi ndings of all audits are reported to the Chief Executive Offi cer and Business Heads for initiating immediate corrective measures.
8) Any Other Risk
Compliance Risk
Compliance risk is the risk of legal or regulatory sanctions, material fi nancial loss, or loss to reputation due to failure to comply with laws, rules and standards.
OMDB is committed to follow best practices and market standards in the areas of accountability, transparency and business ethics. The Development Bank aims at a zero tolerance of misconduct and corruption.
In the day-to-day operations the three lines of defense model defi nes the roles and responsibilities for compliance and integrity risk in the Development Bank.
The fi rst line of defense lies with the respective Development Bank departments and units, which are responsible for ensuring that compliance risks are identifi ed, understood and reported to the decision making bodies of the Development Bank and to Compliance Offi cer.
The second line of defense lies with Compliance Offi cer, which assesses and monitors the compliance and integrity risks and coordinates its control activities with the Risk Management Unit.
Internal Audit is the third line of defense.
The internal audit function assists the Development Bank in identifying, assessing, monitoring and reporting on compliance risks in matters relating to the institution, its operations and the personal conduct of staff members. The Head of IAD reports to the Audit Committee.
Strategic Risk
Strategic risk is the risk in achieving Development Bank’s strategic objectives, both from internal and external events and scenarios which prevent from achieving strategic objectives.
Strategic Risk can be further defi ned as:
• Exposure to loss resulting from a strategy that runs out to be inappropriate.
• Risk associated with future plans and strategies, including plans for entering new services, expanding existing services through enhancements and merger, enhancing infrastructures etc.
Current and prospective impact of strategic decisions made by management arising from adverse business decisions, improper implementation of decisions or lack of responsiveness to industry change etc.
Periodic (yearly) review of the strategy is being done by Management Committee and reported to BOD regarding: status of the strategic objective’s achievement as decided, execution status whether
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Notes to Financial StatementsFor the year ended 31 Ashad 2076
the right talent and infrastructures support the achievement of the objective or about unintended consequences of the strategy, if any for their timely corrections/updates if found to be necessary.
Interest Rate Risk
Interest rate risk arises when there is a mismatch between positions, which are subject to interest rate adjustment within a specifi ed period. Interest rate risk is usually assessed from two common perspectives. Earnings perspective, which focuses on the impact of variation in interest rate on accruals or reported earnings, and economic value perspective, which refl ects the impact of fl uctuation in the interest rates on economic value of a fi nancial institution.
The Development Bank measures and manages interest rate risk by estimating the sensitivity of the economic value of its balance sheet to an interest rate shock. The sensitivity is measured by means of interest rates on the present value of interest-bearing assets and liabilities.
AML/CFT Risk
AML/CFT risk is related with providing fi nancial services to money launders and terrorists for channelling of money derived from crime or aimed at funding terrorism.
The strictness of the provisions made in laws and directives refl ect the seriousness of this issue; non-compliance of which may cause signifi cant reputational risk as well as may result in adverse consequences. Development Bank have been closely monitoring the AML/CFT policies, procedures, guidelines and practices of Banks and Financial Institutions (BFIs).
A separate AML/CFT Unit is established under direct supervision and control of Compliance Offi cer which looks ast er the eff ective implementation and compliance of AML/CFT related prevailing Acts, Rules and Directives.
5.2 Capital Management
i. Qualitative disclosures
The bank has maintained the capital adequacy as per Capital adequacy framework, 2007 (Updated July 2008) as required by Nepal Rastra Bank. The main objective of this framework is to develop a safe and sound fi nancial system by way of suffi cient amount of qualitative capital and risk management practices. The total equity of the bank comprises of paid up capital, statutory reserves and other reserves. The bank does not have any other complex or hybrid capital instruments. Capital adequacy ratio as on Ashad end 2076 is 13.77% and 14.91% on core capital and capital fund respectively.
Assessment of capital adequacy of bank is done on regular basis taking into considerations the exposure of bank. Also, the analysis of possible impact on capital adequacy is being done on regular basis taking into consideration the future impacts on assumptive basis. Capital adequacy of bank and impact in capital due to future change in nature and size of business is discussed in Risk Management Committee and is summarized in board. Regular monitoring of nature of business is being done so that unexpected negative impact could not take place in capital adequacy of bank. Reporting to regulatory body is being done as prescribed by compliance department.
The internal capital adequacy assessment process (ICAAP) is a comprehensive process which requires board and senior management oversight, monitoring,
NMB Annual Report-2018/19 227
Notes to Financial StatementsFor the year ended 31 Ashad 2076
reporting and internal control reviews at regular intervals to ensure the alignment of regulatory capital requirement with the true risk profi le of the bank and thus ensure long-term safety and soundness of the bank. The key components of an eff ective ICAAP are discussed below.
a. Board and senior management oversight
Board and senior management oversight bank management is responsible for understanding the nature and level of risk being taken by the bank and how this risk relates to adequate capital levels. It is also responsible for ensuring that the formality and sophistication of the risk management processes is commensurate with the complexity of its operations. A sound risk management process, thus, is the foundation for an eff ective assessment of the adequacy of a bank’s capital position.
The board of directors of the bank are responsible for setting the bank’s tolerance for risks. The board also ensures that management establishes a mechanism for assessing various risks; develops a system to relate these risks to the bank’s capital level and sets up a method for monitoring compliance with internal policies. It is equally important that the board instills strong internal controls and thereby an eff ective control environment through adoption of written policies and procedures and ensures that the policies and procedures are eff ectively communicated throughout the bank.
b. Sound Capital Assessment
Another crucial component of an eff ective ICAAP is the assessment of capital. In order to be able to make a sound capital assessment the bank should, at minimum, have the following:
• Policies and procedures designed to ensure that the bank identifi es, measures, and reports all material risks;
• A process that relates capital to the level of risk;
• A process that states capital adequacy goals with respect to risk, taking account of the bank’s strategic focus and business plan; and
• A process of internal control, reviews and audit to ensure the integrity of the overall management process.
c. Comprehensive assessment of risk
All material risks faced by the bank should be addressed in the capital assessment process. Nepal Rastra Bank recognizes that not all risks can be measured precisely. However, bank should develop a process to estimate risks with reasonable certainties. In order to make a comprehensive assessment of risks, the process should, at minimum, address the following forms of risk.
1. Credit Risk 2. Credit Concentration Risk 3. Operational Risk 4. Market Risk 5. Liquidity Risk
d. Monitoring and reporting
The bank has established an adequate system for monitoring and reporting risk exposures and assessing how the bank’s changing risk profi le aff ects the need for capital. The bank’s senior management or board of directors, on a regular basis, receive reports on the bank’s risk profi le and capital needs. These reports allow senior management to:
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Notes to Financial StatementsFor the year ended 31 Ashad 2076
• Evaluate the level and trend of material risks and their eff ect on capital levels;
• Evaluate the sensitivity and reasonableness of key assumptions used in the capital assessment measurement system;
• Determine that the bank holds suffi cient capital against the various risks and is in compliance with established capital adequacy goals; and
• Assess its future capital requirements based on the bank’s reported risk profi le and make necessary adjustments to the bank’s strategic plan accordingly.
e. Internal Control Review
The bank’s internal control structure is essential to a sound capital assessment process. Eff ective control of the capital assessment process includes an independent review and, where appropriate, the involvement of internal or external audits. The bank’s board of directors has a responsibility to ensure that management establishes a system for assessing the various risks, develops a system to relate risk
to the bank’s capital level, and establishes a method for monitoring compliance with internal policies. The board should regularly verify whether its system of internal controls is adequate to ensure well-ordered and prudent conduct of business. The bank should conduct periodic reviews of its risk management process to ensure its integrity, accuracy, and reasonableness. Key areas that should be reviewed include:
• Appropriateness of the bank’s capital assessment process given the nature, scope and complexity of its activities;
• Identifi cation of large exposures and risk concentrations;
• Accuracy and completeness of data inputs into the bank’s assessment process;
• Reasonableness and validity of scenarios used in the assessment process; and
• Stress testing and analysis of assumptions and inputs.
The capital adequacy table for the year ended Ashad 2076 is:
NMB Annual Report-2018/19 229
(Rs. in '000)
1. 1 RISK WEIGHTED EXPOSURES Current Period Previous Period
a Risk Weighted Exposure for Credit Risk 25,066,479.49 18,056,011.77 b Risk Weighted Exposure for Operational Risk 1,198,855.51 834,418.60 c Risk Weighted Exposure for Market Risk 1,490.35 1,238.28
Total Risk Weighted Exposures (Before adjustments of Pillar II) 26,266,825.35 18,891,668.65 Adjustments under Pillar IISRP 6.4a (6) Add .....% of the total deposit due to insuffi cient Liquid Assets -
Total Risk Weighted Exposures (Ast er Bank's adjustments of Pillar II) 26,266,825.35 18,891,668.65
1.2 CAPITAL Current Period Previous Period
(A) Core Capital (Tier 1) 3,618,149.28 3,238,130.71 a Paid up Equity Share Capital 2,515,235.60 2,515,235.60 b Irredeemable Non-cumulative preference shares c Share Premium 28,614.71 - d Proposed Bonus Equity Shares - - e Statutory General Reserves 543,946.96 436,857.41 f Retained Earnings 548,909.52 341,032.70 g Un-audited current year cumulative profi t/(loss) - h Capital Redemption Reserve - - i Capital Adjustment Reserve - - j Dividend Equalization Reserves - - k Other Free Reserve - l Less: Goodwill - -
m Less: Deferred Tax Assets - 34,608.91 n Less: Intangible Assets 4,384.56 6,213.14 o Less: Investment in equity in licensed Financial Institutions - - p Less: Investment in equity of institutions with fi nancial interests - - q Less: Investment in equity of institutions in excess of limits - - r Less: Investments arising out of underwriting commitments - - s Less: Reciprocal crossholdings - - t Less: Purchase of land & building in excess of limit and unutilized 14,172.95 14,172.95 u Less: Other Deductions - -
Capital Adequacy TableAt the month end of Ashad, 2076
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Capital Adequacy TableAt the month end of Ashad, 2076
(Rs. in '000)
1.2 CAPITAL Current Period Previous Period
Adjustments under Pillar IISRP 6.4a(1) - SRP 6.4a(2) -
B) Supplementary Capital (Tier 2) 297,511.95 219,827 a Cumulative and/or Redeemable Preference Share - - b Subordinated Term Debt - - c Hybrid Capital Instruments - - d General loan loss provision 295,984 217,277.70 e Exchange Equalization Reserve 27.46 27.46 f Investment Adjustment Reserve 1,500.00 2,521.46 g Asset Revaluation Reserve - - h Other Reserves - -
Total Capital Fund (Tier I and Tier II) 3,915,661.23 3,457,957.33
1.3 CAPITAL ADEQUACY RATIOS Current Period Previous Period
Tier 1 Capital to Total Risk Weighted Exposures (Ast er Bank's adjustments of Pillar II) 13.77% 17.14%
Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures(Ast er Bank's adjustments of Pillar II) 14.91% 18.30%
NMB Annual Report-2018/19 231
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00%
-
Cl
aim
s on
Pub
lic S
ecto
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CA 7
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-
1
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-
Cl
aim
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dom
estic
ban
ks th
at m
eet c
apita
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quac
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quire
men
ts 4
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-
4
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2
0%
803
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Cl
aim
s on
dom
estic
ban
ks th
at d
o no
t mee
t cap
ital a
dequ
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requ
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1.4
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1
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100
%
1.4
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aim
s on
fore
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bank
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-
-
2
0%
-
Clai
ms
on fo
reig
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nk (E
CA R
atin
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-
-
5
0%
-
Clai
ms
on fo
reig
n ba
nk (E
CA R
atin
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6)
-
-
100
%
-
Clai
ms
on fo
reig
n ba
nk (E
CA R
atin
g 7)
-
-
1
50%
-
Cl
aim
s on
fore
ign
bank
inco
rpor
ated
in S
AARC
regi
on o
pera
ting
with
a
buff e
r of 1
% a
bove
thei
r res
pect
ive
regu
lato
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apita
l req
uire
men
t -
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2
0%
-
Clai
ms
on D
omes
tic C
orpo
rate
s
6,9
78,4
40
-
6,9
78,4
40
100
%
6,9
78,4
40
Clai
ms
on F
orei
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orpo
rate
s (E
CA 0
-1)
-
-
20%
-
Cl
aim
s on
For
eign
Cor
pora
tes
(ECA
2)
-
-
50%
-
Cl
aim
s on
For
eign
Cor
pora
tes
(ECA
3-6
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-
1
00%
-
Cl
aim
s on
For
eign
Cor
pora
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(ECA
7)
-
-
150
%
-
Regu
lato
ry R
etai
l Por
tfolio
(Not
Ove
rdue
) 6
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2
40,6
02
6,2
01,7
69
75%
4
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Cl
aim
s fu
lfi lli
ng a
ll cr
iterio
n of
regu
larit
y re
tail
exce
pt g
ranu
larit
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-
1
00%
-
Cl
aim
s se
cure
d by
resi
dent
ial p
rope
rtie
s 2
,276
,581
-
2
,276
,581
6
0%
1,3
65,9
49
Clai
ms
not f
ully
sec
ured
by
resi
dent
ial p
rope
rtie
s -
-
1
50%
-
Cl
aim
s se
cure
d by
resi
dent
ial p
rope
rtie
s (O
verd
ue)
1,0
61,9
81
-
1,0
61,9
81
100
%
1,0
61,9
81
Clai
ms
secu
red
by C
omm
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al re
al e
stat
e 7
42,7
90
-
742
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1
00%
7
42,7
90
Past
due
cla
ims
(exc
ept f
or c
laim
s se
cure
d by
resi
dent
ial p
rope
rtie
s) 4
,458
,877
-
4
,458
,877
1
50%
6
,688
,315
H
igh
Risk
cla
ims
1,1
32,4
94
-
1,1
32,4
94
150
%
1,6
98,7
41
Inves
tmen
ts in
equit
y and
othe
r cap
ital in
stru
men
ts of
inst
itutio
ns lis
ted i
n sto
ck ex
chan
ge 3
20,9
94
-
320
,994
1
00%
3
20,9
94
Inves
tmen
ts in
equit
y and
othe
r cap
ital in
strum
ents
of ins
titut
ions n
ot lis
ted in
the s
tock
exch
ange
-
-
-
150
%
-
Staff
loa
n se
cure
d by
resi
dent
ial p
rope
rty
96,
958
96,
958
60%
58,
175
Inte
rest
Rec
eiva
ble/
clai
m o
n go
vern
men
t sec
uriti
es 6
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6
,036
0%
-
Cash
in tr
ansi
t and
oth
er c
ash
item
s in
the
proc
ess
of c
olle
ctio
n 9
06
-
906
20
% 1
81
Othe
r Ass
ets
(as
per a
ttac
hmen
t) 7
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90
238
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-
4
66,8
68
100
%
466
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TO
TAL
(A)
30,
562,
988
238
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2
40,6
02
30,
084,
064
24,
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NMB Annual Report-2018/19 233
B. O
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alan
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heet
Exp
osur
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Boo
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"S
peci
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CR
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Bills
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LC
Com
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Fore
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LC
Com
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Mat
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Ove
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mes
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coun
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-
-
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Fore
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Rat
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2
0%
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Fore
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coun
terp
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-
-
50%
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Fo
reig
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rpar
ty (E
CA R
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-
-
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100
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-
Fore
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coun
terp
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-
-
-
150
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Bid
Bond
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form
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Bon
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omes
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coun
terp
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-
-
-
5
0%
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Fore
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coun
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Rat
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-
-
2
0%
-
Fore
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coun
terp
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Rat
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2)
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-
-
-
50%
-
Fo
reig
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rpar
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CA R
atin
g 3-
6)
-
-
-
-
100
%
-
Fore
ign
coun
terp
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(ECA
Rat
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7)
-
-
-
-
150
%
-
Und
erw
ritin
g co
mm
itmen
ts
-
-
-
-
50%
-
Le
ndin
g of
Ban
k's
Secu
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s or
Pos
ting
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ecur
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as
colla
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-
-
-
1
00%
-
Re
purc
hase
Agr
eem
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, Ass
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sale
with
reco
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-
-
-
-
1
00%
-
Ad
vanc
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rant
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-
-
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Fina
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1
08,8
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dors
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Unp
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port
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%
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Irrev
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redi
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mitm
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rm)
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-
603
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20%
1
20,6
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0 Irr
evoc
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Cre
dit c
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ong
term
) -
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5
0%
-
"Cla
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reig
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nk in
corp
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ff er o
f 1%
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espe
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-
Othe
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tinge
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-
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100
%
-
Unp
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Guar
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aim
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20
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TO
TAL
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7
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sA
t the
mon
th e
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Cre
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Dep
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FI
Gol
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heet
Exp
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Clai
ms
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orei
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nmen
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CA -
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orei
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CA -
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Clai
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Sec
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ntity
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aim
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Pub
lic S
ecto
r Ent
ity (E
CA 2
) -
Cl
aim
s on
Pub
lic S
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r Ent
ity (E
CA 3
-6)
-
Clai
ms
on P
ublic
Sec
tor E
ntity
(ECA
7)
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Clai
ms
on d
omes
tic b
anks
that
mee
t cap
ital a
dequ
acy
requ
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-
Clai
ms
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omes
tic b
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that
do
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apita
l ade
quac
y re
quire
men
ts -
Clai
ms
on fo
reig
n ba
nk (E
CA R
atin
g 0-
1)
-
Clai
ms
on fo
reig
n ba
nk (E
CA R
atin
g 2)
-
Cl
aim
s on
fore
ign
bank
(ECA
Rat
ing
3-6)
-
Cl
aim
s on
fore
ign
bank
(ECA
Rat
ing
7)
-
Clai
ms
on fo
reig
n ba
nk in
corp
orat
ed in
SAA
RC re
gion
op
erat
ing
with
a b
uff e
r of 1
% a
bove
thei
r res
pect
ive
regu
lato
ry
capi
tal r
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rem
ent
-
Clai
ms
on D
omes
tic C
orpo
rate
s
-
Clai
ms
on F
orei
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orpo
rate
s (E
CA 0
-1)
-
Clai
ms
on F
orei
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orpo
rate
s (E
CA 2
) -
Cl
aim
s on
For
eign
Cor
pora
tes
(ECA
3-6
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Cl
aim
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For
eign
Cor
pora
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-
Regu
lato
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etai
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tfolio
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rdue
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40,6
01.8
2 2
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2 Cl
aim
s fu
lfi lli
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n of
regu
larit
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tail
exce
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gran
ular
ity -
Clai
ms
secu
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by re
side
ntia
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pert
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-
Clai
ms
not f
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sec
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by
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dent
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s -
Cl
aim
s se
cure
d by
resi
dent
ial p
rope
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s (O
verd
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-
Clai
ms
secu
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by C
omm
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al R
eal E
stat
e -
Pa
st d
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laim
s (e
xcep
t for
cla
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secu
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by re
side
ntia
l pr
oper
ties)
-
Hig
h Ri
sk c
laim
s -
-
In
vest
men
ts in
equ
ity a
nd o
ther
cap
ital i
nstr
umen
ts o
f in
stitu
tions
list
ed in
sto
ck e
xcha
nge
-
Inve
stm
ents
in e
quity
and
oth
er c
apita
l ins
trum
ents
of
inst
itutio
ns n
ot li
sted
in th
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ock
exch
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-
Othe
r Ass
ets
(as
per a
ttac
hmen
t) -
To
tal
240,
601.
82
-
-
-
-
-
-
-
-
240,
601.
82
NMB Annual Report-2018/19 235
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ible
Cre
dit R
isk
Miti
gant
sA
t the
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nd o
f A
shad
, 20
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in '0
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Cre
dit e
xpos
ures
D
epos
its
with
Ban
k D
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its
with
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er
bank
s/FI
G
old
G
ovt.&
N
RB
Se
curi
ties
G'te
e of
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ovt.
of
Nep
al
Sec/
G'te
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er
Sove
reig
ns
G'te
e of
do
mes
tic
bank
s
G'te
e of
M
DB
s
Sec
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For
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B
anks
T
otal
(a)
(
b)
(c)
(
d)
(e)
(
f)
(g)
(
h)
(i)
Off
Bal
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She
et E
xpos
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Fo
rwar
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chan
ge C
ontr
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LC C
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atur
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pto
6 m
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mes
tic c
ount
erpa
rty
-
Fore
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coun
terp
arty
(ECA
Rat
ing
0-1)
-
Fo
reig
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unte
rpar
ty (E
CA R
atin
g 2)
-
Fo
reig
n co
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rpar
ty (E
CA R
atin
g 3-
6)
-
Fore
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coun
terp
arty
(ECA
Rat
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7)
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LC C
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ith O
rigin
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atur
ity O
ver 6
mon
ths
dom
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nter
part
y
-
Fore
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coun
terp
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(ECA
Rat
ing
0-1)
-
Fo
reig
n co
unte
rpar
ty (E
CA R
atin
g 2)
-
Fo
reig
n co
unte
rpar
ty (E
CA R
atin
g 3-
6)
-
Fore
ign
coun
terp
arty
(ECA
Rat
ing
7)
-
Bid
Bond
, Per
form
ance
Bon
d an
d Co
unte
r gua
rant
ee d
omes
tic
coun
terp
arty
-
Fore
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coun
terp
arty
(ECA
Rat
ing
0-1)
-
Fo
reig
n co
unte
rpar
ty (E
CA R
atin
g 2)
-
Fo
reig
n co
unte
rpar
ty (E
CA R
atin
g 3-
6)
-
Fore
ign
coun
terp
arty
(ECA
Rat
ing
7)
-
Und
erw
ritin
g co
mm
itmen
ts
-
Lend
ing
of B
ank'
s Se
curit
ies
or P
ostin
g of
Sec
uriti
es a
s co
llate
ral
-
Repu
rcha
se A
gree
men
ts, A
sset
s sa
le w
ith re
cour
se
-
Adva
nce
Paym
ent G
uara
ntee
-
Fi
nanc
ial G
uara
ntee
-
Acce
ptan
ces
and
Endo
rsem
ents
-
U
npai
d po
rtio
n of
Par
tly p
aid
shar
es a
nd S
ecur
ities
-
Irr
evoc
able
Cre
dit c
omm
itmen
ts (s
hort
term
) -
Irr
evoc
able
Cre
dit c
omm
itmen
ts (l
ong
term
) -
Ot
her C
ontin
gent
Lia
bilit
ies
-
U
npai
d Gu
aran
tee
Clai
ms
-
Tota
l -
-
-
-
-
-
-
-
-
-
G
rand
Tot
al24
0,60
1.82
-
-
-
-
-
-
-
-
24
0,60
1.82
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(Rs. in '000)
S.N. Particulars Fiscal Year
2072/073 2073/074 2074/0751 Net Interest Income 444,738.83 760,952.48 847,608.78 2 Commission and Discount Income 8,986.45 15,355.10 26,153.04 3 Other Operating Income 58,242.09 87,688.02 147,735.47 4 Exchange Fluctuation Income - 18.32 232.44 5 Addition/Deduction in Interest Suspense during the period - - - 6 Gross income (a) 511,967.37 864,013.91 1,021,729.73 7 Alfa (b) 15% 15% 15% 8 Fixed Percentage of Gross Income [c=(a×b)] 76,795.11 129,602.09 153,259.46 9 Capital Requirement for operational risk (d) (average of c) 119,885.55
10 Risk Weight (reciprocal of capital requirement of 10%) in times (e) 1011 Equivalent Risk Weight Exposure [f=(d×e)] 1,198,855.51
SRP 6.4a (8) Adjustments under Pillar II (If Gross Income for the last three years is negative)1 Total Credit and Investment (net of Specifi c Provision) of releted month - 2 Capital Requirement for Operational Risk (5% of net credit and investment) - 3 Risk Weight (reciprocal of capital requirement of 10%) in times 104 Equivalent Risk Weight Exposure (g) - 5 Equivalent Risk Weight Exposure [h=f+g] 1,198,855.51
Risk Weighted Exposure for Operational RiskAt the month end of Ashad, 2076
NMB Annual Report-2018/19 237
S.No. Currency Open Position (FCY) Exchange Rate Open Position (NPR) Relevant Open Position
1 INR 1,142,630.00 1.60 1,829,065 1,829,065 2 USD 6,765.00 109.65 741,782 741,782 3 GBP 75.00 136.94 10,271 10,271 4 EUR 1,900.00 123.18 234,033 234,033 5 THB - - 6 CHF - - 7 AUD 750.00 76.80 57,596 57,596 8 CAD - - 9 SGD - -
10 JPY 44,000.00 1.02 44,660 44,660 11 HKD - - 12 DKK - - 13 SEK - - 14 SAR 500.00 28.91 14,453 14,453 15 QAR - - - 16 AED 1,700.00 28.74 48,850 48,850 17 MYR - - 18 KRW - - 19 CNY - - 20 KWD - - 21 BHD - - - 22 - - 23 - -
(a) Total Open Position 2,980,708 2,980,708 (b) Fixed Percentage 5% (c) Capital Charge for Market Risk (=a×b) 149,035 (d) Risk Weight (reciprocal of capital requirement of 10%) in times 10 (e) Equivalent Risk Weight Exposure (=c×d) 1,490,354
Risk Weighted Exposure for Operational Risk At the month end of Ashad, 2076
www.nmbbanknepal.com238
Notes to Financial StatementsFor the year ended 31 Ashad 20765.3 Classifi cation of Financial assets and fi nancial liabilities - FY 2075/76
Financial Assets Amortized CostFair value
through other comprehensive
income
Fair value through profi t or
loss Total
Cash in hand 557,277,513 557,277,513 Balances with B/FIs - - Money at call and short notice 4,016,320,269 4,016,320,269 Interbank placement - - Balance at NRB 1,148,397,928 1,148,397,928 Derivative fi nancial instrument - Loans & Advances 23,377,007,831 23,377,007,831 Government bonds 624,595,438 624,595,438 Government treasury bills - - Equity investments 295,201,666 295,201,666 Other assets 25,599,588 25,599,588 Total Financial Assets 29,749,198,568 295,201,666 - 30,044,400,234
Financial Liabilities Amortized CostFair value through profi t or loss
(FVTPL) Total Held for trading Designated at
FVTPLDeposits from customers 24,153,016,531 24,153,016,531 Due to Banks & Financial Institutions 1,496,132,384 1,496,132,384 Due to Nepal Rastra Banks - - Debt Securities - - Employee related liabilities 88,911,284 88,911,284 Bills payable 674,863 674,863 Creditors and accruals 4,324,815 4,324,815 Interest payable on deposit 120,814,734 120,814,734 Interest payable on borrowing - - Unpaid Dividend 1,050,791 1,050,791 Liabilities under Finance Lease 16,544,197 16,544,197 Other liabilities 124,199,239 124,199,239 Total Financial Liabilities 26,005,668,839 - - 26,005,668,839
NMB Annual Report-2018/19 239
Fair
valu
e of
fi na
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l ass
ets
and
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Part
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74
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Fair
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oney
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Ot
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Due
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-
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www.nmbbanknepal.com240
Notes to Financial StatementsFor the year ended 31 Ashad 2076
Particulars Province 3 Province 4 Province 5 Total
a Revenues from external customers 697,337,322 1,879,340,321 42,795,018 2,619,472,660 b "Intersegment revenues" 196,115,305 123,957,741 328,233 320,401,279 c Net Revenue 893,452,627 2,003,298,062 43,123,251 2,939,873,940 d Interest revenue 819,529,303 1,902,703,592 34,422,453 2,756,655,347 e Interest expense 664,350,634 1,194,276,124 25,164,620 1,883,791,377 f Net interest revenue 155,178,669 708,427,468 9,257,833 872,863,970 g "Depreciation and amortisation" 13,901,648 29,488,011 1,899,666 45,289,324 h Segment profi t /(loss) 141,277,021 678,939,457 7,358,167 827,574,646
i Entity"s interest in the profi t or loss of associates accounted for using equity method -
j Other material non-cash items: - …………… - ………….. -
k Impairment of assets 65,784,891 195,047,053 5,275,754 266,107,698 l Segment assets 5,369,142,453 18,411,298,921 638,668,551 24,419,109,925
m Segment liabilities 8,488,352,636 12,818,990,440 458,019,793 21,765,362,868
Total revenues for reportable segment 2,939,873,940 Other revenues - Elimination of intersegment revenues (320,401,279)Entity’s revenues 2,619,472,660
Total profi t or loss for reportable segments 827,574,646 Other profi t or loss (107,086,187)Elimination of intersegment profi ts -Unallocated amounts: (143,267,490)………………………..Profi t before income tax 577,220,969
3. Measurement of operating segment profi t or loss, assets and liabilities
The Bank has determined segments based on the geographical region i.e. Province Wise.
4. Reconciliations of reportable segment revenues, profi t or loss, assets and liabilities
(a) Revenue
(b) Profi t or loss
5.4 Operating Segment Information 2075 Ashad
1. General information
a) An operating segment is a component of an entity:
· that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
· whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete fi nancial information is available.
2. Information about profi t or loss, assets and liabilities
NMB Annual Report-2018/19 241
Notes to Financial StatementsFor the year ended 31 Ashad 2076
Total assets for reportable segments 24,419,109,925 Other assets - Unallocated amounts 733,227,680 Entity’s assets 25,152,337,606
Total liabilities for reportable segments 21,765,362,868 Other liabilities - Unallocated liabilities 3,386,974,738 Entity’s liabilities 25,152,337,606
(c) Assets
(d) Liabilities
5. Information about geographical areas
Revenue from following geographical areas
6. Information about major customers
Revenue from a single external customer is less than 10 percent of bank’s total revenue.
(a) Domestic 2,619,472,660 Province 1 - Province 2 - Province 3 697,337,322 Province 4 1,879,340,321 Province 5 42,795,018 Province 6 - Province 7 -
(b) Foreign - Total 2,619,472,660
www.nmbbanknepal.com242
Notes to Financial StatementsFor the year ended 31 Ashad 2076
Particulars Province 3 Province 4 Province 5 Total
a Revenues from external customers 1,142,901,044 2,256,556,990 121,395,683 3,520,853,717 b "Intersegment revenues" 330,919,421 147,284,490 - 478,203,912 c Net Revenue 1,473,820,466 2,403,841,480 121,395,683 3,999,057,629 d Interest revenue 1,083,961,306 2,596,044,079 111,856,006 3,791,861,391 e Interest expense 883,075,087 1,600,842,970 82,209,879 2,566,127,936 f Net interest revenue 200,886,219 995,201,110 29,646,127 1,225,733,455 g "Depreciation and amortisation" 15,355,316 37,810,580 4,270,802 57,436,698 h Segment profi t /(loss) 244,470,641 617,903,440 34,915,002 897,289,083
i Entity"s interest in the profi t or loss of associates accounted for using equity method -
j Other material non-cash items: - k Impairment of assets 110,828,200 328,596,937 8,888,094 448,313,231 l Segment assets 6,174,643,351 16,272,686,284 964,949,967 23,412,279,603
m Segment liabilities 9,370,271,287 15,552,953,175 627,183,828 25,550,408,289
Total revenues for reportable segment 3,999,057,629 Other revenues - Elimination of intersegment revenues (478,203,912)Entity’s revenues 3,520,853,717
Total profi t or loss for reportable segments 897,289,083 Other profi t or loss 506,687,574 Elimination of intersegment profi tsUnallocated amounts: (683,790,709)………………………..Profi t before income tax 720,185,949
5.4 Operating Segment Information 2076 Ashad
1. General information
a) An operating segment is a component of an entity:
· that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
· whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete fi nancial information is available.
2. Information about profi t or loss, assets and liabilities
3. Measurement of operating segment profi t or loss, assets and liabilities
The Bank has determined segments based on the geographical region i.e. Province Wise.
4. Reconciliations of reportable segment revenues, profi t or loss, assets and liabilities
(a) Revenue
(b) Profi t or loss
NMB Annual Report-2018/19 243
Notes to Financial StatementsFor the year ended 31 Ashad 2076
Total assets for reportable segments 23,412,279,603 Other assets 3,709,939,344 Unallocated amounts 2,738,365,503 Entity’s assets 29,860,584,450
Total liabilities for reportable segments 25,550,408,289 Other liabilities 70,989,702 Unallocated liabilities 4,239,186,459 Entity’s liabilities 29,860,584,450
(c) Assets
(d) Liabilities
5. Information about geographical areas
Revenue from following geographical areas
6. Information about major customers
Revenue from a single external customer is less than 10 percent of bank’s total revenue.
(a) Domestic 3,520,853,717 Province 1 - Province 2 - Province 3 1,142,901,044 Province 4 2,256,556,990 Province 5 121,395,683 Province 6 - Province 7 -
(b) Foreign - Total 3,520,853,717
www.nmbbanknepal.com244
Notes to Financial StatementsFor the year ended 31 Ashad 20765.5 Share options and share based payment
The bank does not have any share option and share based payment.
5.6 Contingent liabilities and commitment
Contingent Liabilities:
Where the Bank undertakes to make a payment on behalf of its customers for guarantees issued for which an obligation to make a payment has not arisen at the reporting date, those are included in these fi nancial statements as contingent liabilities
Commitments:
Where the Bank has confi rmed its intention to provide funds to a customer or on behalf of a customer in the form of loans, overdrast s, future guarantees, whether cancellable or not and the Bank has not made payments at the reporting date, those instruments are included in these fi nancial statement as commitments
Details of contingent liabilities and commitments are given in note 4.28
5.7 Related parties disclosures
Following has been identifi ed as Related Parties for Bank under NAS 24 Related Parties:
a. Directors
b. Key Management Personnel of the Bank
c. Relatives of Directors and Key Managerial Personnel
FY 2075-76 FY 2074-75 FY 2073-74
DirectorsSushil Kumar Goshali Sushil Kumar Goshali Sushil Kumar GoshaliRajendra Kumar Batajoo Rajendra Kumar Batajoo Rajendra Kumar BatajooBijaya Malla Bijaya Malla Bijaya MallaYogendra Lal Pradhan Yogendra Lal Pradhan Yogendra Lal PradhanShree Krishna Regmi Shree Krishna Regmi Shree Krishna RegmiKarma Kumari Gurung Karma Kumari Gurung Karma Kumari GurungPro. Dr. Yadab Prasad sharma Gaudel Niranjan Shrestha Niranjan Shrestha
Rabindra Nath Bastola Rabindra Nath BastolaPro. Dr. Yadab Prasad Sharma Gaudel Pro. Dr. Yadab Prasad Sharma Gaudel
Key Managerial PersonnelBishwo Mohan Adhikari Bishwo Mohan Adhikari Bishwo Mohan AdhikariBuddhi Kumar Malla Buddhi Kumar Malla Buddhi Kumar MallaDurga Ram Puri Durga Ram Puri Durga Ram PuriKrishna Raj Wagle Krishna Raj Wagle Krishna Raj Wagle
NMB Annual Report-2018/19 245
Notes to Financial StatementsFor the year ended 31 Ashad 2076
However a� er the merger with NMB Bank Limited, the Board of Directors and Key Management personnels are dissolved.
5.8 Merger and acquisition
The bank has not entered into any merger and acquisition activities in the reporting period. However, the Bank had signed Memorandum of Understanding dated 16 May 2019 with NMB Bank Limited (ODBL) to merge with it. Ast er obtaining necessary regulatory approvals, both the Banks commenced joint operations from 28 September 2019 (11 Ashwin 2076) as NMB Bank Limited. NMB Bank Limited licensed as “A” class fi nancial institution by Nepal Rastra Bank in May 2008 has been operating in the Nepalese Financial market for over twenty three years and is one of the leading commercial banks in the banking industry.
5.9 Additional disclosures of non consolidated entities
Not Applicable
5.10 Events a� er reporting date.
Bank monitors and assess events that may have potential impact to qualify as adjusting and / or non-adjusting events ast er the end of the reporting period. All adjusting events are adjusted in the books with additional disclosures and non-adjusting material events are disclosed in the notes with possible fi nancial impact, to the extent ascertainable. There are no material events that have occurred subsequent to 31 Ashad 2076 till the signing of this fi nancial statement.
However, as stated above the bank has already merged with NMB Bank Ltd. and is a non adjusting event.
Transaction during the Year
Particulars 2075-76 2074-75 2073-74
DirectorsDirectors Sitting Fees 714,500 536,000 432,000 Interest Paid to directors on deposits 8,366,473 16,908,693 2,736,546 Other directors' expenses (if any) 159,044 134,336 - Total 9,240,017 17,579,029 3,168,546 Key Management PersonnelRemuneration and Benefi t Paid 31,542,709 30,297,122 27,160,273 Post-Retirement Benefi ts 25,788,171 12,783,850 7,413,327 Other Long-term Benefi ts - - -Borrowing during the year - - -Interest on Borrowing - - -Interest on account balances 28,816 151,248 114,609 Other transactions benefi ts if any - - -Total 57,359,696 43,232,220 34,688,208
Particulars 2075-76 2074-75 2073-74
Directors Deposits 52,576,091 141,899,774 173,892,128 KMP Deposits 882,820 691,535 4,885,763 Borrowings - - -Other Receivable payables if any - - -Total 53,458,911 142,591,309 178,777,891
Reporting Date Balances
www.nmbbanknepal.com246
Notes to Financial StatementsFor the year ended 31 Ashad 20765.11 Disclosure of eff ect of transition from previous GAAP to NFRSs
5.11.1. Reconciliation of equity
Particulars Explanatory Note
"As at 01.04.2074
(Date of Transition)"
"As at 32.03.2075(End of last period presented under previous GAAP)"
"As at 31.03.2076"
Total equity under Previous GAAP 2,640,511,822 3,301,770,742 3,683,265,202 Adjustments under NFRSs:Impairment on loan and advances - - - Fair value & employees benefi t accounting of staff loan - - Lease accounting 1 (7,347,048) (11,870,443) (16,544,197)Measurement of investment securities measured at fair value 112,877,842 5,357,312 (1,665,406)
Measurement of investment securities measured at fair value in associates 2 - - -
Dividend Income from Associates - Revaluation of property & equipment - Recognition of Available for Sale Investment - 3,143,393 571,506 Recognition of investment property - Amortisation of debt securities issued - Deferred tax 3 (55,575,356) (39,984,371) 12,836,926 Defi ned benefi t obligation of employees 4 - - - Goodwill/Bargain purchase gain - Interest income 5 42,525,533 66,720,715 176,451,580 Proposed Dividend - - -
Total Adjustment to equity 92,480,972 23,366,605 171,650,409 Total Equity under NFRSs 2,732,992,794 3,325,137,347 3,854,915,611
NMB Annual Report-2018/19 247
Notes to Financial StatementsFor the year ended 31 Ashad 20765.11.2. Reconciliation of profi t or loss
1) Rent Expenses booked over the rent period on equal amount on SLM Basis 2) Valuation made for associate company 3) Deferred Tax eff ect of all adjustment 4) Gratuity Expenses booked as per acturial valaution 5) Accrued Interest Receivable booked on accrual basis which in approximate to Eff ective Interest Rate 6) Liaiblity Created for Proposed Dividend Reversed 7) Interest on Staff loan charged to fi nance income and staff cost 8) Invsestment Provision made in P/L of local gaap reversed and charged to OCI for investment classifi ed as Fair value through OCI9) Gain on Sell of share classifi ed to OCI charged directly to equity 10) Tax eff ect of Gain on Sell of share classifi ed to OCI charged directly to equity 11) NBA has been directly shown through Regulatory reserve 12) Avoidable Share issue expenses directly charged to equity 13) Tax eff ect of Avoidable Share issue expenses directly charged to equity
Particulars Explanatory Note " As at 32.03.2075(End of last period presented under previous GAAP) "
" As at 31.03.2076"
Previous GAAP 373,754,997 381,494,460 Adjustments under NFRSs:Interest income 5 25,255,193 110,888,781 Impairment of loan and advances - - Employees benefi t amortisation under staff loan 7 (1,060,011) (1,157,915)Defi ned benefi t obligation of employee 4 - - Operating lease expense 1 (4,523,396) (4,673,754)Provision for Investment 8 22,004,644 2,046,519 Income from Investment in Associates 2 - - Gain on Sales of Share Investment Classifi ed to OCI 9 (6,315,534) (969,960)Current Tax on Gain on Sales of Share Investment Classifi ed to OCI 10 1,894,660 290,988
Dividend from Associates - - Amortisation expense of debt securities - - Other operating income - - Interest expense - - NBA provision 11 3,143,393 (2,571,887)Share Issue Expenses Directly Charged to Equity 12 4,915,070 - Share Issue Expenses Directly Charged to Equity-Tax Impact 13 (1,474,521) -
Deferred Tax 3 (23,266,567) 50,100,526
Total Adjustment to profi t or loss 20,572,930 153,953,297 Profi t or loss under NFRSs 394,327,928 535,447,757 Other Comprehensive Income (90,667,622) (6,348,465)Total Comprehensive income under NFRSs 303,660,306 529,099,292
www.nmbbanknepal.com248
Not
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Fin
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tate
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Pl
acem
ent w
ith B
ank
and
Fina
ncia
l In
stitu
tions
-
-
-
-
-
-
-
-
-
Der
ivat
ive
Fina
ncia
l Ins
trum
ents
-
-
-
-
-
-
-
-
-
Othe
r Tra
ding
Ass
ets
-
-
-
-
-
-
-
-
-
Loan
s an
d Ad
vanc
es to
BFI
s 3
3,72
6,45
0 -
3
3,72
6,45
0 1
22,8
26,4
50
-
122
,826
,450
5
68,0
88,4
84
-
568
,088
,484
Loan
s an
d Ad
vanc
es to
Cus
tom
ers
113
,806
,829
,846
1
41,4
26,6
83
13,9
48,2
56,5
29
17,9
72,2
04,3
55
208
,395
,829
18
,180
,600
,184
22
,077
,132
,109
2
83,4
74,0
07
22,3
60,6
06,1
16
Inve
stm
ent S
ecur
ities
2 6
77,1
18,4
86
116
,981
,531
7
94,1
00,0
17
841
,990
,876
1
2,77
2,39
4 8
54,7
63,2
71
914
,242
,072
5
,555
,032
9
19,7
97,1
04
Curr
ent T
ax A
sset
s -
-
-
-
-
-
-
2
6,90
3,42
8 2
6,90
3,42
8
Inve
stm
ent i
n Su
bsid
iarie
s -
-
-
-
-
-
-
-
-
Inve
stm
ent i
n As
soci
ates
-
-
-
-
-
-
-
-
-
Inve
stm
ent P
rope
rty
3 -
-
-
-
-
-
-
-
-
Prop
erty
and
Equ
ipm
ent
4 1
56,1
86,1
57
- 1
56,1
86,1
57
211
,158
,529
-
211
,158
,529
1
84,1
87,6
35
- 1
84,1
87,6
35
Good
will
and
Inta
ngib
le A
sset
s5
-
5,0
83,3
41
5,0
83,3
41
-
6,2
13,1
48
6,2
13,1
48
-
4,3
84,5
60
4,3
84,5
60
Def
erre
d Ta
x As
sets
6 1
5,79
4,52
2 (1
5,79
4,52
2) -
3
4,60
8,91
1 (3
4,60
8,91
1) -
5
,236
,555
1
2,83
6,92
6 1
8,07
3,48
1
Othe
r Ass
ets
7 1
50,6
96,1
31
(108
,088
,180
) 4
2,60
7,95
1 1
99,7
11,1
94
(152
,159
,953
) 4
7,55
1,24
2 2
01,5
07,2
77
(144
,959
,347
) 5
6,54
7,93
1
Tota
l Ass
ets
19,0
04,2
42,0
54
139,
608,
852.
84
19,1
43,8
50,9
07
25,1
11,7
25,0
98
40,
612,
508
25,1
52,3
37,6
06
29,6
72,3
89,8
44
188
,194
,606
29
,860
,584
,450
NMB Annual Report-2018/19 249
Liab
ilitie
s"E
xpla
nato
ry
Not
e"
As
at 0
1.04
.207
4 (D
ate
of T
rans
ition
) A
s at
32.
03.2
075
(End
of l
ast p
erio
d pr
esen
ted
unde
r pr
evio
us G
AA
P)A
s at
31.
03.2
076
Pre
viou
s G
AA
P E
ff ect
of
Tran
sitio
n to
N
FRS
Ope
ning
N
FRS
SFP
Pre
viou
s G
AA
P E
ff ect
of
Tran
sitio
n to
NFR
S A
mou
nt a
s pe
r N
FRS
Pre
viou
s G
AA
P E
ff ect
of
Tran
sitio
n to
N
FRS
Am
ount
as
per
NFR
S
Due
to B
ank
and
Fina
ncia
l Ins
titut
ions
614
,140
,643
-
6
14,1
40,6
43
599
,112
,852
-
5
99,1
12,8
52
1,2
46,1
32,3
84
250
,000
,000
1
,496
,132
,384
Due
to N
epal
Ras
tra
Bank
-
-
-
-
-
-
-
-
-
Der
ivat
ive
Fina
ncia
l Ins
trum
ents
-
-
-
-
-
-
-
-
-
Dep
osits
from
Cus
tom
ers
815
,447
,288
,578
-
15
,447
,288
,578
20
,856
,078
,516
-
20
,856
,078
,516
24
,153
,016
,531
-
24
,153
,016
,531
Borr
owin
gs -
-
-
-
-
-
2
50,0
00,0
00
(250
,000
,000
) -
Curr
ent T
ax L
iabi
litie
s 8
,355
,564
-
8,3
55,5
64
13,
522,
470
-
13,
522,
470
-
-
-
Prov
isio
ns -
-
-
-
-
-
-
-
-
Def
erre
d Ta
x Li
abili
ties
-
39,
780,
834
39,
780,
834
-
5,3
75,4
60
5,3
75,4
60
-
-
-
Othe
r Lia
bilit
ies
9 2
93,9
45,4
46
7,3
47,0
48
301
,292
,494
3
41,2
40,5
18
11,
870,
443
353
,110
,962
3
39,9
75,7
26
16,
544,
197
356
,519
,924
Deb
t Sec
uriti
es Is
sued
-
-
-
-
-
-
-
-
-
Subo
rdin
ated
Lia
bilit
ies
-
-
-
-
-
-
-
-
-
Tota
l Lia
bilit
ies
16,3
63,7
30,2
31
47,
127,
882
16,4
10,8
58,1
13
21,8
09,9
54,3
56
17,
245,
903
21,8
27,2
00,2
59
25,9
89,1
24,6
42
16,
544,
197
26,0
05,6
68,8
39
Equi
ty
Shar
e Ca
pita
l10
2,2
56,8
04,2
87
(378
,107
,300
) 1
,878
,696
,987
2
,515
,235
,600
-
2
,515
,235
,600
2
,515
,235
,600
-
2
,515
,235
,600
Shar
e Pr
emiu
m11
-
15,
372,
574
15,
372,
574
28,
614,
713
-
28,
614,
713
28,
614,
713
-
28,
614,
713
Reta
ined
Ear
ning
s12
508
,618
3
76,2
54,2
09
376
,762
,827
2
77,8
09,0
72
35,
072,
738
312
,881
,810
6
59,3
03,5
32
(110
,394
,013
) 5
48,9
09,5
19
Rese
rves
13 3
83,1
98,9
18
78,
961,
488
462
,160
,406
4
80,1
11,3
57
(11,
706,
133)
468
,405
,224
4
80,1
11,3
57
282
,044
,422
7
62,1
55,7
80
Tota
l Equ
ity A
ttrib
utab
le to
Equ
ity
Hol
ders
2,6
40,5
11,8
22
92,
480,
972
2,7
32,9
92,7
94
3,3
01,7
70,7
42
23,
366,
605
3,3
25,1
37,3
47
3,6
83,2
65,2
02
171
,650
,409
3
,854
,915
,611
Non
Con
trol
ling
Inte
rest
-
Tota
l Equ
ity 2
,640
,511
,822
9
2,48
0,97
2 2
,732
,992
,794
3
,301
,770
,742
2
3,36
6,60
5 3
,325
,137
,347
3
,683
,265
,202
1
71,6
50,4
09
3,8
54,9
15,6
11
Tota
l Lia
bilit
ies
and
Equi
ty19
,004
,242
,053
1
39,6
08,8
53
19,1
43,8
50,9
06
25,1
11,7
25,0
98
40,
612,
508
25,1
52,3
37,6
06
29,6
72,3
89,8
44
188
,194
,606
29
,860
,584
,450
Not
e
1) A
ccru
ed in
tere
st o
n lo
ans
book
ed o
n ac
crua
l bas
is a
nd p
rese
nt v
alue
of s
taff
loan
recl
assi
fi ed
to lo
ans
and
adva
nces
to c
usto
mer
s.
2)
Inve
stm
ent s
ecur
iies
reco
gniz
ed a
t FV
and
accu
red
inte
rest
on
bond
recl
assi
fi ed
as in
vest
men
t sec
uriti
es.
3)
Inve
stm
ent P
rope
rty
recl
assi
fi ed
and
mea
sure
d at
fair
valu
e.
4)
Fix
ed A
sset
recl
assi
fi ed
as In
vest
men
t pro
pert
y.
5)
Rec
lass
ifi ca
tion
of e
xpen
ses
not w
ritte
n off
to
good
will
and
inta
ngib
le a
sset
s.
6)
Def
erre
d Ta
x eff
ect
of a
ll ad
just
men
t
7) E
ff ect
of r
ecla
ssifi
catio
n of
sta
ff lo
an, e
xpen
ses
not w
ritte
n off
and
acc
ured
inte
rest
on
loan
s an
d ad
vanc
es.
8)
Rec
lass
ifi ca
tion
of m
atur
ed F
ixed
Dep
osit
9)
Ren
t Exp
ense
s bo
oked
ove
r the
rent
per
iod
on e
qual
am
ount
on
SLM
Bas
is a
nd g
ratu
ity li
abili
ty b
ooke
d as
per
act
uaria
l val
uatio
n.
10
) Eff e
ct o
f rev
ersa
l of p
ropo
sed
bonu
s sh
are
and
prop
osed
div
iden
d.
11
) Eff e
ct o
f rev
ersa
l of p
ropo
sed
bonu
s sh
are
from
sha
re p
rem
ium
.
12) E
ff ect
on
profi
t du
e to
adj
ustm
ents
of N
FRS.
13) E
ff ect
of p
ropo
sed
bonu
s sh
are
from
sha
re p
rem
ium
Not
es to
the
Fina
ncia
l Sta
tem
ents
For t
he y
ear e
nded
31s
t Ash
ad, 2
076
www.nmbbanknepal.com250
Notes to Financial StatementsFor the year ended 31 Ashad 2076
Particulars"
Explanatory Note "
As at 32.03.2075 (End of last period presented under previous GAAP)
Previous GAAP Eff ect of Transition to NFRS
Amount as per NFRS
Interest Income 1 2,411,003,805 25,255,193 2,436,258,999 Interest Expense 2 (1,563,395,029) - (1,563,395,029)Net Interest Income 847,608,777 (25,255,193) 872,863,970 Fee and Commission Income 173,888,506 - 173,888,506 Fee and Commission Expense - 2,777,672 2,777,672 Net Fee and Commission Income 173,888,506 2,777,672 171,110,835 Net Interest, Fee and Commisson Income 1,021,497,283 (22,477,522) 1,043,974,805 Net Trading Income - 127,734 127,734 Other Operating Income 3 15,628,290 (6,443,268) 9,185,022 Total Operating Income 1,037,125,573 (16,161,987) 1,053,287,560 Impairment Charge/ (Reversal) for Loans and Other Losses 4 72,047,472 (25,148,036) 46,899,435 Net Operating Income 965,078,101 (41,310,024) 1,006,388,125 Operating ExpensePersonnel Expenses 5 245,864,095 1,060,011 246,924,107 Other Operating Expenses 6 150,038,303 (13,072,178) 136,966,125 Depreciation & Amortisation 7 35,386,492 9,902,832 45,289,324 Operating Profi t 533,789,210 (43,419,358) 577,208,569 Non Operating Income 12,400 - 12,400 Non Operating Expense - - - Profi t Before Income Tax 533,801,610 (43,419,358) 577,220,969 Income Tax ExpenseCurrent Tax 8 178,861,002 (420,139) 178,440,863 Deferred Tax 9 (18,814,389) 23,266,567 4,452,178 Profi t for the Period 373,754,997 (20,572,930) 394,327,928
- (0)Other Comprehensive Income, Net of Income Taxa) Items that will not be reclassifi ed to profi t or loss• Gains/(losses) from investment in equity instruments measured at fair value 10 - (129,525,174) (129,525,174)
• Gains/(losses) on revaluation - - - • Acturial gain/(losses) on defi ned benefi t plans 11 - - - • Income tax relating to above items 12 - 38,857,552 38,857,552 Net other comprehensive income that will not be reclassifi ed to profi t or loss - (90,667,622) (90,667,622)b) Items that are or may be reclassifi ed to profi t or loss• Gains/(losses) on cash fl ow hedge - - - • Exchange gains/(losses)(arising from translating fi nancial assets of foreign operation) - - -
• Income tax relating to above items - - - • Reclassify to profi t or loss - - - Net other comprehensive income that are or may be reclassifi ed to profi t or loss - - - c) Share of other comprehensive income of associate accounted as per equity methodOther Comprehensive Income for the Period, Net of Income Tax - (90,667,622) (90,667,622)Total Comprehensive Income for the Period 373,754,997 (111,240,552) 303,660,306
5.11.4. Eff ect of NFRSs adoption for statement of profi t or loss and other comprehensive income
Notes 1) Interest Receivable on loan has been booked on accrual basis and interest diff erence in staff loan has also been charged.2) Interest expense on calculation of Gratuity expense - 3) Profi t on sale of investment has been reclassifi ed 4) Reversal of Loan loss provision 5) Bonus has been charged as staff expense and fi nance cost of staff loan has also been charged. 6) Rent expense has been charged on SLM basis 7) Reclassifi cation of written off expense as depreciation and ammortization 8) Income tax related to share issue expense and gain on sale of investment reclassifi ed through equity. 9) Deferred Tax eff ect of all adjustment 10) Changes in Fair value and cost of investment classifi ed to OCI 11) Actuarial Gain/ loss recognized in OCI of Gratuity Liability 12) Deferred Tax Adjustment on item of OCI
NMB Annual Report-2018/19 251
Notes to Financial StatementsFor the year ended 31 Ashad 2076
Particulars "Explanatory Note"
As at 32.03.2075
Previous GAAPEff ect of
Transition to NFRS
Amount as per NFRS
Net cash fl ows from operating activities 1 1,523,058,476 (281,518,977) 1,241,539,499 Net cash fl ows from investing activities 2 (245,228,078) (39,975,831) (285,203,909)Net cash fl ows from fi nancing activities 287,503,922 (457,897) 287,046,026 Net increase/(decrease) in cash and cash equivalent 1,565,334,321 (321,952,706) 1,243,381,615 Eff ect of exchange rate fl uctuations on cash and cash equivalents held - 104,709 104,709
Cash and cash equivalent at the beginning of the period 3 4,163,890,461 (800,622,192) 3,363,268,270 Cash and cash equivalent at the end of the period 5,729,224,782 (1,122,470,189) 4,606,754,593
Notes 1) Money at call treated as cash and cash equivaluents in NFRS, Investment securties classifi ed as investment activity in NFRS2) Investment securties classifi ed as investment activity in NFRS 3) Money at Call treated as Cash and Cash Equivalents
5.11.5. Eff ect of NFRSs adoption for statement of cash fl ows
www.nmbbanknepal.com252
Not
es to
Fin
anci
al S
tate
men
tsFo
r the
yea
r end
ed 3
1 A
shad
207
6
5.11
.6 P
rinc
ipal
Indi
cato
rs fo
r Fi
ve Y
ears
Part
icul
ars
Indi
cato
rsFY
FYFY
FYFY
2071
/072
2072
/073
2073
/074
2074
/075
2075
/076
1Pe
rcen
t of N
et P
rofi t
/Gro
ss In
com
ePe
rcen
t27
.05%
28.8
5%22
.94%
15.0
5%15
.21%
2Ea
rnin
gs P
er S
hare
(Res
tate
d fo
r pre
viou
s ye
ars)
Rs.
32.
97
30.
83
23.
99
19.
50
21.
29
3M
arke
t Val
ue P
er S
hare
Rs.
325
.00
630
.00
629
.00
180
.00
197
.00
4Pr
ice
Earn
ings
Rat
ioRa
tio 9
.86
20.
43
26.
22
9.2
3 9
.25
5D
ivid
end
(incl
udin
g bo
nus)
on
Shar
e Ca
pita
lPe
rcen
t20
.26%
29.2
0%17
.69%
0.00
%0.
00%
6Ca
sh D
ivid
end
on S
hare
Cap
ital
Perc
ent
1.01
%0.
00%
0.00
%0.
00%
0.00
%7
Inte
rest
Inco
me/
Loan
& A
dvan
ces
Perc
ent
13.0
9%12
.07%
13.5
1%13
.12%
14.1
7%8
Staff
Exp
ense
s/To
tal O
pera
ting
Expe
nses
Perc
ent
52.7
6%52
.40%
49.6
2%57
.16%
58.1
3%9
Inte
rest
Exp
ense
s on
Tot
al D
epos
it an
d Bo
rrow
ing
Perc
ent
6.73
%5.
49%
8.26
.%7.
29%
8.14
%10
Exch
ange
Gai
n/To
tal I
ncom
ePe
rcen
t0.
00%
0.00
%0.
02%
0.13
%0.
11%
11St
aff B
onus
/Tot
al S
taff
Expe
nses
Perc
ent
36.8
4%31
.85%
32.5
2%24
.02%
25.9
5%12
Net
Pro
fi t/L
oan
and
Adva
nces
Perc
ent
3.71
%3.
27%
2.81
%2.
12%
2.29
%13
Net
Pro
fi t/T
otal
Ass
ets
Perc
ent
2.63
%2.
38%
2.08
%1.
57%
1.79
%14
Tota
l Cre
dit/
Dep
osit
Perc
ent
82.1
4%83
.75%
87.5
4%85
.58%
90.9
2%15
Tota
l Ope
ratin
g Ex
pens
es/T
otal
Ass
ets
Perc
ent
1.95
%0.
93%
1.24
%1.
48%
1.75
%16
Ade
quac
y of
Cap
ital F
und
on R
isk
Wei
ghte
d A
sset
sa)
Cor
e Ca
pita
lPe
rcen
t13
.50%
13.8
7%17
.69%
17.1
4%13
.77%
b) S
uppl
emen
tary
Cap
ital
Perc
ent
0.90
%0.
93%
1.08
%1.
16%
1.14
%
c) T
otal
Cap
ital F
und
Perc
ent
14.4
0%14
.80%
18.7
7%18
.30%
14.9
1%17
Liqu
idity
(CRR
)Pe
rcen
t5.
33%
5.20
%5.
06%
5.06
%5.
06%
18N
on-p
erfo
rmin
g cr
edit/
Tota
l cre
dit
Perc
ent
0.54
%0.
78%
0.90
%0.
52%
1.31
%19
Base
Rat
ePe
rcen
t9.
66%
8.35
%11
.43%
12.6
2%11
.19%
20W
eigh
ted
Aver
age
Inte
rest
Rat
e Sp
read
Perc
ent
6.36
%6.
31%
4.89
%4.
97%
4.93
%21
Book
Net
-wor
th P
er S
hare
Rs.
149.
7711
9.65
145.
4713
2.20
153
.26
22To
tal S
hare
sN
umbe
r 4
,681
,600
1
0,52
8,49
5 1
8,78
6,97
0 2
5,15
2,35
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NMB Annual Report-2018/19 253
Amendments to the MOA and AOA of the Bank presented as a special resolution in the General Meeting dated 9 January 2020
Article/Section Existing Arrangements Proposed Arrangements Justifi cation to the
Amendment
On the MOA Side
6(b)
The issued capital of the Bank shall be NPR 11,529,741,707.96 (in words: Eleven Billion Five Hundred Twenty Nine Million Seven Hundred Forty One Thousand Seven Hundred Seven and 96/100 only). This capital is divided into 115,297,417.07 (in words: One Hundred Fist een Million Two Hundred Ninety Seven Thousand Four Hundred Seventeen and 07/100) units of shares with face value of NPR 100 per share.
The issued capital of the Bank shall be NPR 13,950,987,466.96 (in words: Thirteen Billion Nine Hundred Fist y Million Nine Hundred Eighty Seven Thousand Four Hundred Sixty Six and 96/100 only). With face value of NPR 100 per share, the capital is divided into 139,509,874.66 (in words: One Hundred Thirty Nine Million Five Hundred Nine Thousand Eight Hundred Seventy Four and 66/100) units of shares.
As per the proposal made on 24th Annual General Meeting of the Bank to distribute 21% bonus share on existing paid-up capital
6(c)
The paid-up capital of the Bank shall be NPR 11,529,741,707.96 (in words: Eleven Billion Five Hundred Twenty Nine Million Seven Hundred Forty One Thousand Seven Hundred Seven and 96/100 only).
The issued capital of the Bank shall be NPR 13,950,987,466.96 (in words: Thirteen Billion Nine Hundred Fist y Million Nine Hundred Eighty Seven Thousand Four Hundred Sixty Six and 96/100 only). With face value of NPR 100 per share, the capital is divided into 139,509,874.66 (in words: One Hundred Thirty Nine Million Five Hundred Nine Thousand Eight Hundred Seventy Four and 66/100) units of shares.
As per the proposal made on 24th Annual General Meeting of the Bank to distribute 21% bonus share on existing paid-up capital
On the AOA Side
27(2)
The Bank shall have a 7 member board committee consisting of three elected representatives from both promoter and public shareholders and one independent director.
The Bank shall have a board committee of 7 members- 3 representatives from promoter shareholder category including one director nominated by Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. (FMO), Nederland and two elected directors, three elected representatives from public shareholder category and one independent director.
To ensure the representation of foreign investor on Board of Directors
32(b)
Per meeting allowance received by the Chairman and other Directors shall be NPR 13,000 and NPR 12,000 respectively.
Per meeting allowance received by the Chairman and other Directors shall be NPR 18,000 and NPR 16,000 respectively.
Due to the time relative necessity to increase the allowance received by the board of directors
32(c) (iii)
Existing Arrangements Facility of Food Expenses
Need for linguistic improvement and time-relative growth of daily travelling allowance observed
Designation/Expense Heading
Area-1(USD)
Area-2(USD)
Area-3(USD)
Area-4(INR)
Area-5(NPR)
Chairman (Food Expenses) 165.00 110.00 99.00 2,200.00 2,200.00
Directors (Food Expenses) 143.00 99.00 88.00 1,650.00 1,650.00
Proposed Amendments Daily Travelling Allowance
Designation/Expense Heading
Area-1(USD)
Area-2(USD)
Area-3(USD)
Area-4(INR)
Area-5(NPR)
Chairman 250.00 250.00 200.00 11,000.00 11,000.00
Directors 225.00 225.00 175.00 10,000.00 10,000.00
32(c) (v)
Without increasing the amount limit mentioned in sub-clauses (i) and (ii), hotel and food expense shall be reimbursed as per the bill and other expenses not mentioned such as travel ticket, passport and visa fee, communication and transportation, etc. shall be reimbursed as per actual bill
Except as mentioned in sub-clauses (i) and (ii), air tickets, passport and visa fee, communication and transportation required during visit shall be inquired according to actual bill.
Need for linguistic improvement and consideration of practical aspects observed
www.nmbbanknepal.com254
Notice about 24th Annual General MeetingThe 396th Board Meeting of the Bank held on 10 December 2019, has decided to conduct 24th Annual General Meeting in the following date, venue and time to discuss upon the following agenda. This notice is published to inform all our esteemed shareholders regarding the Annual General Meeting as per Clause 67 of Company Act, 2006.
1. Date, Venue and Time of the Annual General MeetingDate : Thursday, 9 January, 2020Venue : Nepal Administrative Staff College, LalitpurTime : 10:00 A.M.
2. Agenda of the Meeting
A. General Agenda
i. To discuss and approve the annual report presented by the Chairman on behalf of the Board of Directors,
ii. To discuss and approve the Auditor’s report for FY 2018/19 including Balance Sheet, Profi t and Loss Statement, Cash Flow Statement, and other fi nancial reports (including consolidated fi nancials of subsidiary companies and fi nancial reports of erstwhile Om Development Bank Ltd.),
iii. To appoint and decide upon the remuneration of the Auditor for fi scal year 2019/20 in compliance with the Clause 111 of Company Act, 2006 and Clause 63 of Bank and Financial Institution Act 2016, (existing Auditor MS. S.R. Associates, Chartered Accountant is eligible for reappointment)
iv. To approve the appointment of auditor for fi nancial audit of erstwhile Om Development Bank Ltd. until September 27 of the FY 2019/20.
v. To approve the distribution of 14 percent cash dividend (including for tax purpose) amounting NPR 1,614,163,839.11 (in words: Rupees One Billion Six Hundred Fourteen Million, One Hundred Sixty Three Thousand, Eight Hundred Thirty Nine and 11/100 only) of the existing paid-up capital of NPR 11,529,741,707.96 (in words: Rupees Eleven Billion Five Hundred Twenty Nine Million Seven Hundred Forty One Thousand Seven Hundred Seven and 96/100 only) as proposed by the Board of Directors.
B. Special Agenda
i. To approve the increment in the existing issued capital from NPR 11,529,741,707.96 (in words: Rupees Eleven Billion Five Hundred Twenty Nine Million Seven Hundred Forty One Thousand Seven Hundred Seven and 96/100 only) to NPR 13,950,987,466.96 (in words: Rupees Thirteen Billion Nine Hundred Fist y Million Nine Hundred Eight Seven Thousand Four Hundred Sixty Six and 96/100 only)
ii. To approve the distribution of 21 percent bonus share of existing paid-up capital amounting to NPR 2,421,245,759 (in words: Rupees Two Billion Four Hundred Twenty One Million Two Hundred Forty Five Thousand Seven Hundred Fist y Nine only) to adjust the eff ect of proposed increment in issued capital
NMB Annual Report-2018/19 255
iii. To approve the amendment of Memorandum of Association of the Bank with respect to the increment of its issued and paid-up capital. (Related details are included in the Annual Report)
iv. To approve the amendment of the Article of Association of the Bank (Related details are included in the Annual Report)
v. To provide authority to the Board of Directors to acquire other banks and fi nancial institutions and to carry out merger process with other banks and fi nancial institutions, and to delegate authority to carry out the tasks related to the appointment of the Appraiser/Valuator for the same
vi. To provide authority to the Board of Directors to carry out or cause to carry out tasks related to amendment in the Memorandum of Association and Article of Association of the Bank such as record keeping, making minor changes, certifi cation of the documents, registration and receipt of acknowledgement of the record.
C. Miscellaneous
D. Regarding Election
i. To conduct election to appoint six directors with 3 each representing from public shareholders and promoter shareholders
By OrderCompany Secretary
Additional Information about the Annual General Meeting (AGM)
1. Share register shall remain closed from 2076/09/04 B.S. (20/12/2019 A.D.) to 2076/09/24 B.S. (09/01/2020) for the purpose of this AGM.
2. A brief annual fi nancial statement is published along with this notice for shareholders’ information. Further, all the proposals presented at the AGM along with brief fi nancial statements are also kept on the Bank’s website www.nmbbanknepal.com.np
3. Shareholders interested in participating at the AGM are required to bring either an original copy of Share Certifi cate or Demat account details and documents proving their identity with photograph or its copy along with them.
4. Shareholders attending the AGM must be present in the AGM venue and sign the attendance register that will be made available from 09:00 A.M. onwards.
5. Shareholders willing to nominate proxy to attend the AGM, shall register proxy form at the Bank’s head offi ce Babarmahal, Kathmandu, at least 48 hours before the AGM commences.
www.nmbbanknepal.com256
6. Only existing shareholders shall be nominated proxy. If any shareholder ast er appointing proxy is self-present in the AGM, then such proxy shall be automatically cancelled.
7. In case of minor or insane shareholders, person registered as his/her guardian in the share register book shall be entitled to take part, vote or appoint a proxy in the AGM. In case of joint shareholdings, only the unanimously selected representative or the partner whose name appears fi rst in the serial order of the share register book can attend the AGM.
8. Any issue or query raised in the AGM shall be responded by Chairman or any other dignitaries as permitted by the Chairman.
9. If any shareholder has any issue or query about the Bank, shareholders are requested to send it in writing to the Bank’s registered orrice at least 7 days before the AGM commences. However, such issues or queries shall not be tabled for discussion as agenda in the AGM.
10. Except for documents related to AGM, shareholders are kindly requested not to carry any bags and luggage while attending the AGM.
Additional Information on Election of Members of Board of Directors
1. The programs related to the election will be as per the notice published by the Election Offi cer. The election program will be published by the Election Offi cer on 2076/09/10 B.S. (26/12/2019 A.D.) Thursday 1 PM at the Bank’s central offi ce Babarmahal, Kathmandu.
2. The shareholder willing to be a candidate for the post of Director must have owned at least 100 units mortgage free shares of any type issued by the Bank.
3. The shareholder willing to be a candidate for the post of Director will have to register his candidacy in the prescribed format within the date and time mentioned in the notice of the election program published at Bank’s central offi ce, ward number 11, NMB Bhawan, Babarmahal, Kathmandu. The candidacy must be proposed by one ordinary shareholder of the Bank and seconded by another shareholder as supporter.
4. Shareholders can purchase Directors’ “Election Guidelines 2065” by paying a fee of NPR 200 from the central offi ce of the Bank
NOTE: For shareholders’ convenience, Annual Report has been uploaded in Bank’s website (https://www.nmbbanknepal.com.np) wherein shareholders can browse and access the report online.