Annual Report for cast...Sanima Bikas Bank Annual Report 2009/2010 9 It is a matter of pride that the last year remained encouraging for us despite of a very challenging and competitive

n e w l e v e l o f e x c e l l e n c e

T r a n s f o r m a t i o n

S a n i m a B i k a s B a n k L i m i t e dA n n u a l R e p o r t 2 0 0 9 / 1 0

w w w. s a n i m a b a n k . c o m

CONTENTSOur Mission 4

About Us 5

Message from the Chairman 7

Message from the CEO 9

Upgradation in true sense 10

Director’s Report 15

Board of Directors 14

Our Business 24

Corporate Social Responsibility 27

Auditor Report 31

SanimaBikas Bank

Annual Report 2009/2010

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OUR MISSION To provide banking and financial solutions in a simplified way with customer focus while adding value to stakeholders' interests.

CAPITAL STRUCTUREAuthorised Capital : Rs. 2,100 millionIssued Capital : Rs. 806.40 millionPaid-up Capital : Rs. 806.40 million

SHAREHOLDING PATTERNPromoters: 70%General Public: 30%

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Sanima Bikas Bank Limited (Sanima), commenced its operation from 2004. Sanima is promoted by prominent and dynamic Non-resident Nepalese (NRNs) businessmen. Sanima has been in profitable operation since its inception and has recorded a robust growth in its overall business and profitability during the recent years.

Since its inception, Sanima has come up with a range of products and services to cater its clients in the spirit of its slogan “Banking Simplified”. Our dedicated professional employees are our strength who have been able to win the hearts of our customers and stakeholders by ensuring high standards of service and corporate governance. In the pursuit of sustainable

We highly value our customers and pledge to deliver all

products and services in a customized and simplified manner

in line with our slogan of “Banking Simplified”.

ABOUT US

growth we today have 14 full-fledged branches within and outside the Kathmandu valley. We plan to expand our reach to various parts of the country during the current fiscal year. Based on the resolution passed by the 5th AGM of the Bank, we already have applied to Nepal Rastra Bank (NRB) for their approval to become “A” class commercial bank. Our application for conversion into “A” class Bank is under NRB's consideration. Going forward, we are committed to continue enhancing our superior customer base by exploring new avenues as a Commercial Bank. We shall also be moving to our own new building at , Narayan Chaur, Naxal, Kathmandu.

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Message from the Chairman

Dear shareholders, It is with immense pleasure that I welcome you all to this 6th Annual General Meeting of Sanima Bikas Bank Limited (Sanima).

operations more participative, dynamic and scientific. To strengthen the morale of its valuable employees, as well as to retain the risk performers. We ensure timely revision in remuneration and benefits in line with the market median.

During the fiscal year 2066/67, six new branches have come into operations, namely at Inaruwa of Sunsari, Belbari of Morang, Bhandara of Chitwan, Gongabu and Kalanki of Kathmandu and Chapagaun of Lalitpur. We plan to expand our reach during the current fiscal year as well. We shall continue to focus on increasing the quality assets, enhancing employee morale, managing costs and looking for new opportunities.

With paid up capital of Rs.806.40 million we have become the largest national level development bank. For the fiscal year 2066/67, it has been proposed to provide 10% cash dividend to our shareholders. Based on the decision of the last AGM, with an aim to become “A” class commercial bank , we plan to increase our paid up capital with the issuance of the right share in the ratio of 1:1.5. during the current fiscal year.

I express my sincere gratitude to all our shareholders and guests for their kind presence, continuous support and cooperation. We would like to assure you that your suggestions and recommendations will be given due attention and shall be considered to be acted upon as appropriate. I look forward to the continuous guidance from the Board of Directors, dedication and hard work from our employees, valuable advice and support from our shareholders and as well as our stakeholders.

I once again welcome you all to this 6th Annual General Meeting.

Thank you.

Jibanath LamichhaneChairman

With continuous net profits since the beginning of our operations, we have been able to expand our area of functioning as well as our branches. Despite the tough competitive banking environment with ongoing arrival of new banks and financial institutions, we have been able to continue the increase in our deposits, risk assets and profit. During this fiscal year 2066/67, we registered a Net Profit of Rs. 85.74 million. Despite being “B” class financial institution, we have a remarkable market share in foreign currency deposit, foreign exchange business and also in treasury related transactions.

On human resource management front, Sanima considers its Human Resource with high value and cares highly for its staff. Regular training and grooming to our staff to improve their professional skills has been given due importance during the review period, which will be continued in the days ahead as well.

Under an agreement with Punjab National Bank, India in last fiscal year, services of Sanima’s debit card is extended all over India as well. We have continued to launch diversified deposit schemes like “Sanima Nari Bachat”, “Sanima Muna Bachat”, “Sanima Uddyami Bachat”, “Sanima Guru Bachat”, “Sanima Shareholder Saving Accounts”, “Sanima Flexi”, “Sanima Maxi”, “Sanima Premium Saving Accounts” etc.

New office building of Sanima is under construction in its own land in Narayan Chaur, Naxal, Kathmandu. We expect to operate our services from our own building within a year’s time.

Our internal auditor is CSC & Co., whereas, T.R. Upadhyay & Co. is our statutory auditor. From this fiscal year we have set up our own independent internal audit department which directly reports to the Audit Committee. We have ensured an environment where our internal audit can work independently and our Audit Committee is committed to implement feedbacks and suggestions provided independently by the auditors. The management of Sanima is well aware to make its

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It is a matter of pride that the last year remained encouraging for us despite of a very challenging and competitive market. With immense pleasure I would like to announce that Sanima has completed 6 years of consistent profitable operation and is now in process of becoming ‘A’ Class commercial bank. Our new building is under construction on our own property at Narayan

Chaur, Kathmandu; which is expected to complete within a year’s time.

Living up to the spirit of our corporate slogan “Banking Simplified”, we would like to ensure Sanima strongly continues to grow as a ‘bank for everyone from all walks of life’. Amidst the current difficult market scenario, we would like to stand tall as a dependable as well a secured financial institution for our depositors. Hence, to protect the interest of our stakeholders is our prime concern. Maintaining the quality of our risk assets and maintaining liquidity at all times is our first priority. We shall focus on distinguishing ourselves as an efficient, competitive and secured provider of quality services to all our customers.

We shall also continue to ensure a well diversified portfolio- whether in deposits or in our risk assets. We consider Hydropower and NRN relationships as our niche areas and we are striving to grow our business in these sectors.

We consider our staff as our prime assets and give high value to selection, training and development of skilled staff force.

In view of the challenges of the prevailing political as well as economic conditions in the country, we emphasize on sustainable growth. We have identified six key priorities to

Message from the CEO

achieve our objectives:

Satisfied stakeholders Motivated workforce Quality Assets Well diversified portfolio Optimum return to shareholders High standards of corporate governance

We also consider Corporate Social Responsibility (CSR) with high priority and have been organizing and participating in various CSR activities as a responsible member of the society and fraternity. I would like to reiterate my commitment on behalf of the management team to take this Bank to a greater height in the days to come.Last but not the least, I would like to express my sincere thanks to all my colleagues at the Bank for their contribution and my board of directors for their un stinted support, dedication, trust and belief.

Thank you.

Kumar LamsalCEO

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Progression to „A‰Class Bank

With successful completion of 5 years of continuous profitable operations, the 5th Annual

General Meeting of Sanima has passed the proposal of upgrading the bank to a ‘A’ class

commercial bank. For this the bank shall be increasing its paid up capital to two billion

rupees by way of issuance of 1:1.5 Right Shares. We have already submitted application

for upgradation to Nepal Rastra Bank and have obtained approval for right issue of Rs.

1209.60 million. We have targeted to complete the process within the current fiscal year

itself subject to approval from regulatory authority.

Upgradation in true sense

We have ensured a pool of best talent in the industry by not only recruiting fresh and experienced staff but also through internal staff training and development, at the same time maintaining the balance to meet the organization’s growing needs. We have chosen the best of management trainees from reputed colleges/Universities and experienced staff with their successful track records. We share an open culture policy (feel free to speak up) and have empowered our staff as per their specific responsibilities. We take good care in motivating our staff and ensuring their personal development by providing various training, counseling and other facilities.

Sanima strongly recognizes the important role of human resources in successfully achieve its business objectives. It firmly believes that ensuring employee satisfaction results in better customer service. It therefore strives to build a workplace where employees are stimulated to reach their potential by maintaining a work environment that cultivates high ethical standards, professionalism, mutual respect, creativity and team work.

New premises for Head Office Sanima's new building for Head Office is under construction at the bank’s own property at Naxal, Ward no. 1, Kathmandu which is anticipated to be completed within this year. The bank looks forward to providing a more professional, customer friendly and comfortable ambience to its stakeholders in the new building along with prompt and quality services.

Growth in our staff strength We at Sanima understand the value of our professional staff, more so that we are in a very competitive service industry and on top of that economic conditions are also challenging. Hence we have given high priority to Human Resources Management. We have ensured having right people in right places so that their distinct competencies; knowledge and personality attributes are utilized to their maximum potential resulting in desirable results.


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Financial highlights

Current Deposit 2%

Margin Deposit 0%

Saving Deposit 35%

Fixed Deposit 51%

Call Deposit 12%

Deposit mix

Interest Income 94 %

Other Operating Income 5 %

Commission & Discount 0 %

Exchange Fluctuation Income 1 %

Income mix

Other Operating Expenses 8%

Employee Expenses 13%

Interest Expenses 79%

Expenses mix

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"We have ensured a pool of best people in the industry by rigorously recruiting fresh and experienced staff as well as through internal staff training and development."

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"We have ensured a pool of best people in the industry by rigorously recruiting fresh and experienced staff as well as through internal staff training and development."

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Board ofDirectors

1

2

5

3 4

7

1 Jibanath Lamichhane, Chairman

2

5

3

6

4

7

Arun Kumar Ojha, Director

Pankaj Adhikari, Director

Dr. Niraj Gobinda Shrestha, Director

Shamba Lama, Director

Dr. Jugal Bhurtel, Director

Bharat Kumar Pokharel, Director


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Review of financial position and results of operation

Respected Shareholders,We are pleased to greet our shareholders at this 6th Annual General Meeting of Sanima and take this opportunity to present the report, together with the Balance Sheet, Profit and Loss Account and Cash Flow Statement for the Fiscal Year 2009/2010 and auditors’ report for necessary discussion and approval.

As per the directives of Nepal Rastra Bank, National level 'B' class financial Institution should have a paid up capital of 640 million by FY 2012/13, which has already been achieved by Sanima in the FY 2008/09. At the end of FY 2009/10, paid up and reserve of the bank is as under:.

Major Financial Indicators: Particulars F.Y. F.Y. F.Y. F.Y. F.Y. Increase 2005/06 2006/07 2007/08 2008/09 2009/10 %1 Capital & 233,040 347,766 431,056 869,561 881,915 1 Reserve2 Deposits 749,996 1,822,705 2,880,871 4,417,504 5,760,495 303 Loan and Advance(net) 751,046 1,486,697 2,497,775 3,992,091 5,092,099 284 Non-Funded Facilities 81,052 50,918 116,043 309,896 228,100 (26)5 Total Revenue 66,220 130,653 236,035 396,849 655,900 656 Total Expenses 47,695 93,878 181,850 298,203 509,140 717 Operating Profit 13,361 29,342 33,604 78,701 135,407 728 Net Profit 8,786 18,748 21,486 57,759 85,737 48

Rs. in thousand

DirectorÊs Report

Capital/Reserve Rs. in thousand

Ordinary Share paid up capital 806,400Reserve fund 74,795

Bank has earned a share premium of NPR 6.85 million on sale of 12,342 no. shares from the unsubscribed right shares issued in last year by the ordinary shareholders. To achieve the aim of upgrading Sanima into “A” class

Commercial Bank in this fiscal year, it has been proposed to issue 1:1.5 right shares durings the current fiscal year.

Bank has increased its loan portfolio by 28 percent to Rs. 5.13 billion, out of which, Rs. 107 million has been invested in deprived sector. Despite of its continuous efforts and commitment to ensure quality loans, the total portfolio consists of 0.08 percent nonperforming loans (NPL). Moreover, bank is always active to minimize concentration risk by diversification of loan into different sectors of the economy. Bank has introduced different loan facilities as per the demand of market and time. We have focused our efforts to invest in large scale projects, especially in hydropower, and we plan to continue giving emphasis to this sector in the days to come.

Snapshot of Last yearÊs Performance:Despite of the political turmoil, lack of opportunities and tough competition, Sanima Bikas Bank has been able to achieve encouraging success in every field including Deposit, Lending, and diversification of portfolio. I would like to inform you that construction of office building in the land purchased by the Bank at Kathmandu Metropolitan City Ward no 1, Nandikeshar Marg, Naxal is in progress. It is well known that the Bank has been able to earn the net profits from the beginning of its operation. Summary of financial position of the bank has been presented through following table.

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General Economic EnvironmentIn this context, information and data based on data published by Nepal Rastra Bank and Economic Survey of FY 2009/10 from Central Bureau of Statistic is presented in the following sections. The data are based on the review period of eleven months of this year and the last year.

Macro Economic ScenarioDuring FY 2009/10, the GDP increased by 4.9 percent which has increased by 4.6 percent in the FY 2008/09. Due to unfavorable weather conditions, the growth rate in agricultural sector couldn’t increase as per the expectations. Similarly, because of energy crisis, strikes and closures etc, expected progress in non-agricultural sectors couldn’t take place. Growth rate in agricultural sector remained at 1.1 percent whereas it in non-agricultural sector remained at 5.1 percent. The contribution of agricultural sector to the total GDP is 34.62 percent. Similarly, the share of wholeseller and retailer business is 12.73 percent, transportation, storage and communication is 9.38 percent, land and building, rent and other commercial service is 8.26 percent, manufacturing industry is 15.55 percent and construction is 6.4 percent. Likewise, education sector occupies 6.59 percent, financial intermediaries 4.23 percent, electricity, gas and water 1.7 percent, public administration and security 7.08 percent, hotel and restaurant 1.68 percent and health and social activities 1.49 percent in the total GDP.

Inflation and salary or wage rateThe annual average consumer price inflation moderated to 10.5 percent in 2009/10 compared to an increase of 13.2 percent in 2008/09. Despite a substantial rise of 15.4 percent in the prices of food and beverages group, the annual average consumer price inflation moderated on account of a low increment by 4.7 percent in the prices of non-food and services group. The index of food and beverages and non-food and services had increased by 16.7 percent and 9.5 percent respectively in 2008/09.

The annual average wholesale price inflation rose by 12.6 percent in 2009/10 compared to a 12.8 percent rise in the previous year. The annual average price indices of agricultural commodities and domestic manufactured

commodities increased by 22.8 percent and 8.6 percent respectively compared to their respective rise of 14.0 percent and 10.9 percent in the previous year. The annual average index of imported commodities declined by 1.2 percent in contrast to a rise of 12.1 percent in the previous year. The annual average salary and wage rate index rose by 17.2 percent in 2009/10. It had increased by 15.3 percent in the previous year. In the review year, annual average price index of salary as well as wage rate went up by 20.2 percent and 16.3 percent respectively compared to their respective rise of 10.5 percent and 16.9 percent in the previous year.

Tourist InflowThe number of tourist arrival by air increased by 12.8 percent to 4, 11,584 in 2009/10 from that of 3, 64,830 in 2008/09. In the review year, the share of tourist arrival from India and third countries by air recorded a growth of 22.1 percent and 77.9 percent respectively. In the previous year, such shares were 24.1 percent and 75.9 percent respectively.

In the review year, the number of tourists arrival from third countries increased by 15.7 percent to 3, 20,468. The number of tourist arrival from third countries had decreased by 0.5 percent in the previous year. In the review year, the number of tourist arrival from India increased by 3.8 percent to 91,117, as against a decline of 2.3 percent in the previous year.

Situation of Foreign InvestmentThe commitment for foreign direct investment in the review year increased as a consequence of the gradual improvement in the peace and security situation of the country. In the review year, the Department of Industry has given approval for the incorporation of 171 joint venture projects with foreign investment equivalent to Rs. 9.1 billion. In the previous year, the number of such approval accounted to 230 with a total foreign capital of Rs. 6.3 billion.

Situation of Foreign EmploymentThe Department of Foreign Employment, Government of Nepal granted final approval to 2,17,164 people for foreign employment in 2008/09. This number has surged by 35.4 percent to 2,94,094 in 2009/10.


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In 2009/10, the number of people granted permission for the employment in Malaysia stood at 1,13,933, which is a substantial rise of 240.7 percent in comparison to the previous year. Of the total number of people granted permission for foreign employment, approximately 38.5 percent find their way to Malaysia followed by Saudi Arab, Qatar and United Arab Emirates. While Qatar served as the major foreign employment destination for Nepal up to 2008/09, Malaysia secured the top position in 2009/10.

Stock MarketNEPSE index declined by 36.23 percent to 477.73 points in mid-July 2010. This index was 749.10 a year ago. Overwhelming supply of securities in the market as well as feeble progress in the economic and political situation of the country lead the NEPSE to follow downward trend.

Total number of companies listed at the NEPSE increased to 176 in mid July 2010 compared to 159 a year ago. Among them, 144 are banks and financial institutions (including insurance companies), followed by production and processing industries (18), hotels (4), business entities (4), hydropower (4) and companies in other groups (2).

Banking SectorÊs activities In 2009/10, deposits mobilization of commercial banks increased by 12.6 percent

(Rs. 69.0 billion) amounting to Rs. 618.9 billion as at mid-July 2010. The total

deposits had increased by 30.4 percent (Rs. 128.3 billion) in the previous year.

Loan and advances of commercial banks increased by 14.0 percent (Rs. 72.9 billion) to Rs. 593.6 billion in 2009/10. Similarly, private sector credit of commercial banks grew by 16.1 percent (Rs. 65.6 billion) in 2009/10 compared to a growth of 32.3 percent (Rs. 99.4 billion) in the previous year.

Of the private sector credit, credit to the production sector increased by 7.8 percent (Rs. 6.8 billion) in the

review year compared to a growth of 17.3 percent a year ago. Sugar, Cement, and Iron and Steel industries witnessed a significant credit expansion under the production sector credit. Similarly, credit to agriculture sector increased by Rs.915.0 million in the review year. Similarly, credit to wholesale and retail trade as well as finance, insurance and fixed assets; and service sectors increased by 28.7 percent (Rs.19.8 billion), 39.1 percent (Rs. 15.2 billion), and 26.7 percent (Rs. 6.2 billion) respectively. Credit to these sectors in the previous year had increased by 23.5 percent, 56.1 percent, and 10.4 percent respectively. Credit to real estate sector increased by Rs. 13.2 billion in 2009/10 compared to Rs.14.0 billion in the previous year.

The liquid assets of the commercial banks stood at Rs. 211.7 billion as at mid-July 2010. Of the components of liquid assets, liquid fund increased by 4.9 percent. Although the balance held abroad remained almost unchanged in the review year, an increase in commercial banks' balance with the NRB accounted for such an expansion in the liquid funds. In the review year, balance held abroad slightly increased by Rs. 59.0 million amounting to Rs. 60.0 billion while the balance with NRB increased by Rs. 5.3 billion. However, another component of liquid assets, commercial banks' investments in government securities, increased by Rs. 11.1 billion in the review year.

International Business and Balance of Payment (BOP)Nepal's merchandise exports declined by 9.7 percent to Rs. 61.13 billion in 2009/10. Such exports had grown by 14.2 percent to Rs. 67.70 billion a year ago. In terms of destination, exports to India declined by 2.2 percent in the review year in contrast to a growth of 6.4 percent last year. Likewise, exports to other countries declined by 21.3 percent as against a growth of 28.9 percent last year. The decline in the exports to India mainly ascribed to the decrease in the exports of readymade garments, zinc sheet, GI pipe, pulses and plastic utensils among others. Likewise, exports to other countries declined considerably due mainly to the decrease in the export of pulses, woolen carpet, readymade garments, pashmina as well as herbs among others.

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The merchandise imports, on the other hand, grew by 33.2 percent to Rs. 378.80 billion in 2009/10. Such imports had grown by 28.2 percent to Rs. 284.47 billion last year. Imports from India grew by 34.2 percent in the review year compared to a growth of 14.1 percent last year. Likewise, imports from other countries grew by 31.8 percent compared to a growth of 53.4 percent last year. The growth in the import of petroleum products, vehicles and spare parts, M.S. billet, chemical fertilizer as well as M.S. wire and rods among others, from India and gold, telecommunication equipment and parts, polythene granules, silver as well as steel rod and sheet among others, from other countries contributed significantly to the rise of total imports in the review year.

The balance of payments posted a loss of Rs. 2.62 billion in 2009/10 as against a surplus of Rs. 44.76 billion last year. The current account also registered a deficit of Rs. 32.35 billion as against a surplus of Rs. 41.44 billion last year. The large deficit in goods and services trade led to such a huge current account deficit. Despite a huge current account deficit, a rise in the capital account surplus coupled with a rise in trade credit liabilities largely contributed in bringing down the BOP deficit.

Affect from national and international situation on banking transactions (As it is not changed yet)Though the nation has already been entered into People’s republic, modalities and rights are yet to be finalized. Achieving high and sustainable economic growth rate for economic development of the nation is a challenge to the Government. At the same time, it is highly essential to take short term as well as long term steps to increase the economic activities to address the growing expectations of people. To achieve high economic growth rate and sustainable economic development, there is a necessity of maintaining proper balance between participation of all groups from distinct areas. The tendency of creating pressure on street to fulfill demand becomes a big challenge over the year, which in fact has given adverse impact on transportation and economic activities. These have increased the cost of economy and push our economy towards

recession. Similarly, industrial labor relation became more conflicting over the review period and has created hindrances in the growth of industry and trade sector.

Global economy has been affected badly due the financial crisis emerged in August 2007, in the USA from Sub-prime Mortgage Loan. Despite the individual and collective efforts from rich countries, the problem could not be solved with effective solution. Due to globalization, world’s financial market is being united rapidly and excess to fund from one country to another become more practical. However, due to the said economic crisis, there is a high decline in price of real estate and petroleum products which ultimately resulted into closure of various corporate houses globally and then making hundreds of thousand people job-less.

With the restriction to Nepalese citizens to invest in real estate business and stocks in other countries has kept Nepal far from the adverse impact of this global recession. However, Nepal’s annual budget heavily depends upon foreign grants and loans, which flows through the banking channel, and therefore, Sanima cannot be untouched as well.

Problem of irregular supply of petroleum and raw materials, strikes and closure in Terai and other parts of the country has affected the whole banking industry; hence Sanima too could not remain untouched. Liquidity crisis emerged during the second quarter of last fiscal year which has affected many banks and financial institution directly. However, Sanima confidently cope with this problem. Due to increasing no. of new banks and financial institutions and rapid expansion of their branches give more pressure on deposits and at the same time, due to lack of lending opportunities, cut throat banking competition prevails over the whole year of review period.

Entrances of new banks and financial institutions and rapid expansion of their branches has created a shortage of skilled manpower in this sector. Therefore, tendency of influencing and attracting employees from one financial institution to another has been increased significantly. Due to this, employee’s management expense is expected to increase in upcoming years.


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Since Nepal Rastra Bank has already implemented capital adequacy requirement, we are aware about the requirement of capital and quality of assets to be maintained as per regulatory and statutory requirement.

Current yearÊs achievement and future planningDuring the fiscal year, as the part of the extension process, the bank has opened six new branches in several places like Inaruwa of Sunsari, Belbari of Morang, Bhandara of Chitwan, Gongabu and Kalanki of Kathmandu and Chapagaun of Lalitpur making the total of fourteen branches altogether.. We plan to expand our reach in the different part of the country during the current fiscal year as well.. In the course of enriching our value added benefits and ancilliary services this year we have signed a memorandum of understanding with eSewa Pvt. Ltd., an online utility payment services. In an attempt to focus on non-fund based/fee based remittance business, we have started distribution of remittance transactions as sub agent of eight leading remittance agents. We plant to set up a separate unit for hydropower project financing, micro credit/SME financing etc., so that a special focus may be given to those business segments. Other plans of the bank are like bringing new services, diversifying the loan and deposit portfolio, etc.

Industrial and business relationshipSanima is run by the experienced bankers. The relationship between the management and the employees of the bank is very smooth. It also shares sound relationship with different business groups and individual customers by providing quick and simplified banking service and getting involved in several social activities. Sanima has been able to gain trust and confidence from different social sectors and is always concerned about fulfilling those expectations.

Other Information as required by section 109 of the Company Act 2006

Main factors affecting business:1. Increasing competition within overall banking sector2. Present unstable political situation3. Lack of peace and security in several places

including terai4. Fluctuation in interest rate of deposit and loan5. Unstable share market6. Limited areas of operations as “B” class

financial institution7. Fluctuation in price of US dollar in

international market8. Lack of opportunities

Remarks from AuditorsÊ Report: Auditor have expressed their satisfaction on the transaction of bank

DividendIt is proposed to distribute Rs. 80.64 million as cash dividend to the shareholders out of Net profit of FY 2009/10.

Share seizedAccording to the report no share has been seized.

Company and its subsidiary companyÊs transaction and review of situation at the end of fiscal yearThe progress of bank has been mentioned in the report in different points. Bank does not have any subsidiary company.

Major transactions that the Company and its subsidiary company have performed and any important changes that occurred in business of the companyBank does not have any subsidiary company. Main transactions and major changes in transaction of the bank have been reflected in the Balance Sheet, Profit and Loss account, Cash Flow Statement and Notes to the Accounts.

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Detail of Share owned By CompanyÊs Directors and Executives in previous fiscal year and the information whether they are involved in companyÊs share transaction.

No such things happened.

Mention any personal interest of any of the directors or their relatives regarding the agreement related to the company during the fiscal year.No such things happened.

Mention, if the company has purchased its own share and the reason of purchasing, quantity purchased, face value of the share and the amount paid by the company. No such things happened.

Whether there is any internal control system or not. If yes, detail of the sameInternal audit of the bank is being carried out by CSC & Co., Chartered Accountants. From this fiscal year Bank's own independent internal audit department is established which directly reports to Audit Committee. To perform daily operations fast and scientifically and make it participatory there are sub-committees namely “Asset Liability Management Committee”, “MANCOM” etc. at the level of management.

Detail of total management expenses in the fiscal yearThe detail has been presented in annexure 4.23.

Name of members of Audit committee, their remunerations and benefits and the Detail of activities performed by committee and detail of suggestion that has been given, if any.Audit committee is aware and committed to implement the suggestions given by auditors. The members of audit committee during last fiscal year were as follows.

Mr. Pankaj Adhikari ChairmanMr. Bharat Kumar Pokharel MemberMr. Niraj Dhakal Member

Committee invites different officials in its meeting as per requirement. Every participants of the meeting (except employee) are paid meeting allowances same as paid to directors. Audit committee submits report on audit report to the Board of Directors and provides instruction to the management time to time. Rs. 88,000/- has been spent in meeting allowance during last year.

Detail of remuneration, allowances and other benefits paid to Director, Managing Director, Chief Executive and executives

Amount paid to Chief executives as remuneration and benefits. (in thousand)

(Above mentioned remuneration, allowance and benefits are paid after deduction of appropriate tax)

Dividend payableThe bank has not paid any dividends till last Fiscal Year.

Any transactions with associated companies There are deposits from Kantipur Television Pvt. Ltd., Medicare Hospital & Research Centre Pvt. Ltd., Sanima Hydro & Engineering Pvt. Ltd., Sanima Life Insurance Company Ltd., Sanima Insurance Company Ltd. Sanima Foundation, Sanima Mai Hydro Power Pvt. Ltd., Sanima Pvt. Ltd., Tamor Sanima Energy Pvt. Ltd., Khumbu Carpet Industries and loan to Kantipur Television Pvt. Ltd. against own fixed deposit.

S. No. Director shareholderÊs name N0. of share1. Mr. Jibanath Lamichane Chairman 504,0002. Mr. Arun Kumar Ojha Director 1,128,9603. Dr. Niraj Gobinda Shrestha Director 504,0004. Dr. Jugal Bhurtel Director 6305. Mr. Pankaj Adhikari Director 2,5206. Mr. Shamba Lama Director 58,7167. Mr. Bharat Kumar Pokharel Director 781

Chief Other executives Executive officer (Manager and above)Salary 2,644 3,795 Allowance and Provident Fund 1,567 2,249Total: 4,211 6,044

Chairman NPRAllowance per meeting: 5000/-Telephone: 3000/- per month (maximum)Newspaper: 3 nos.

DirectorsAllowance per meeting: 4,000/-Telephone: 3,000/- per month (maximum)Newspaper: 3 nos.


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Other necessary information

LoanThe bank has increased its loan portfolio by 28 percent in the FY 2009/10 which has amounted to NPR 1.15 billion. As per the instruction of Nepal Rastra Bank, the bank has invested NPR 108 million in the deprived sectors. The bank is working hard to maintain the quality of loan, the non-performing loan of the bank is 0.08 percent. Likewise, the management is actively engaged in diversifying its loan portfolio and thus reducing the Concentration risk of the bank. The bank has introduced new credit facilities as per the requirement of the market. With an aim to increase its lending in hydropower projects, the Siprin Khola Hydropower project of 10 MW located at Dolkha district promoted by Synergy Power and Development Private Limited has been financed under consortium in Sanima's lead. The bank will continue to invest in such project in consortium with other banks.

Capital and reserve fund As per Nepal Rastra Bank’s Directive, minimum primary capital and total capital fund required to be maintained by development banks is 5.50 and 11.00 percent respectively. Now the ratio for Sanima is higher by 10.06 percent and 5.51 percent than the prescribed ratio. In the context of implementation of Basel II capital accord in future, bank will work effectively to keep adequate capital reserve and to manage assets properly and effectively.

Human ResourceTotal number of employee of the bank as on mid July, 2010 has reached to 149. The recruitment of new employees has been done to operate new branches.

Together with that, the new employees are given banking related training in order to enhance their skill and knowledge. Remunerations and benefits of the employee is being reviewed from time to time. Retention policy has been implemented by the bank in order to discourage the outflow of skilled employees.

TechnologyBank has upgraded into banking software- Pumori Plus IV centralized version from this fiscal year. In addition to this, regular customization and up gradation has been done in technology for the scientific and efficient operation. Different software are being used as per the nature of transactions.

AuditM/s T.R. Upadhya & Co. was the statutory auditor of the banks for the Fiscal Year 2066/67.

Finally, On behalf of Board of Directors, I would like to express my heartfelt thanks to all share holders, customers, employees, Nepal government, Nepal Rastra Bank, Nepal Stock Exchange Limited, Company Registrar’s Office, Security Board, Internal Auditors, Statutory auditors, journalists and all for their help and suggestions. I expect the same kind of help and suggestions in upcoming days too.

On behalf of Board of Directors

Jibanath LamichhaneChairman

SanimaBikas Bank


22


23

Our Management Team

SanimaBikas Bank


24

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Sanima is continuously working to put in practice its motto “Banking

Simplified”. We provide one window financial solutions to our customers

with a wide range of products and services. We not only offer readymade

products and services, but also customize our offerings that suits best

to the need of customers. Our endeavor is to provide our customers a

distinct banking experience with us. We are continuously improving on

our services to our customers. We believe in a win-win scenario with

customers and value long term mutually beneficial relationships.

As part of our continued initiatives, we are expanding our network,

introducing new offerings and value added services.

Our Business

Saving Accounts Sanima Savings AccountSanima Flexi Saving Senior Citizens AccountSanima Super Savings Account Sanima NRN SavingSanima Salary Account Subidha BachatSanima Shareholders Saving DepositSanima Udhyami BachatSanima Guru Bachat Sanima Muna BachatSanima Nari BachatSanima Samay BachatFixed deposit Account

Wire Less ServicesSanima Debit CardSanima SMS BankingSanima i-Banking

LoansSanima Hire Purchase LoanSanima Home LoanSanima Education LoanSanima Project FinancingSanima Small Business Growth LoanSanima Business LoanMicro Finance Loan (Deprive Sector Loan)Sanima Margin Lending

Other ServicesSanima Safe Deposit Locker FacilityUtility Bill Payment


25

SanimaBikas Bank


25

DepositsThe bank has introduced a rich variety of deposit products that are designed to suit the needs of varied scale of customers. The bank offers deposit products like general savings scheme backed by accidental death insurance scheme and specialized deposit products like Sanima premium Savings and Sanima Muna Savings. The bank also offers attractive interests rates coupled with good service package to tap institutional deposits too.Besides these the bank also has attractive returns for those willing to have their fund deposited in fixed deposit terms, with wide option of terms.

The bank also has some of the large government and non-government institutions as the institutional depositors.

Business Banking portfolio comprises followings:

Project Finance/Consortium FinanceWorking Capital FinanceNon-fund based Credit Facalities

Retail BankingRetail financing is another prominent banking activity of the bank. The bank has developed a number of

customized retail products like Home Loan, Auto Loan, and Small Business Growth Loan etc. Home Loan has been developed taking into consideration varied cash flow/income strength of customers wanting to purchase, build or modify an existing house.Auto Loan which offers flexible rates and tenures is offered under standardized or customized package. SBGL loan further enriches the bank’s loan variety by serving the loan needs of small business entrepreneur/proprietor.

And Others: Ancillary services: SMS banking, i-Banking, e-sewa etc.RemittanceSafe Deposit Lockers

SanimaBikas Bank


26

At Sanima, we believe that our prosperity is directly linked with the well-being of the society in which we work. Being a responsible corporate entity, we are aware of our social responsibilities.


27

Corporate Social Responsibility (CSR)

At Sanima, we believe that our prosperity is directly linked with the well-being of the society in which we work. Being a responsible corporate entity, we are aware of our social responsibilities.

As part of our duty towards society, we have made numerous attempts to address social needs.

To affect this, we have contributed to various social causes during the fiscal year. To name a few, we conducted blood donation program and contributed more than 85 packets . Blood to Bhaktapur Blood bank. We have had also conducted an awareness program regarding “Eye Donation”.

Further to this, with due honor to the senior citizens living in our society, we conducted a senior citizen felicitation ceremony, thereby showing our respect for them.

The bank has equally shown interest in extending its support for the development and promotion of various programmes of cultural and religious importance like “Nagpokhari Festival”.

In the future also, the bank is committed towards supporting such social causes and carry out other CSR activities.

SanimaBikas Bank


28

SanimaBikas Bank


28

Promoters The PeopleManagement Team

1. Kumar Lamsal Chief Executive Officer

2. Tej Bahadur Chand Deputy General Manager

3. Sharad Tegi Tuladhar Head - Business Banking

4 Bobby Singh Gadtaula Head - Consumer Banking

5. Pawan Kumar Acharya Manager -CRM

6. Santosh Koirala Head - Liability Marketing

7. Samir Jung Rayamajhi Head – General Service, Branch Expansion and Rremittance

8. Susil Ratna Bajracharya Head - Information Technology

9. Niraj Dhakal Head - Internal Audit

10.Kamal Prasad Paneru Head - Accounts & Compliance

11. Rudra Banjara Company Secretary & Head Share

Branch Managers

Preju TiwariOfficiating Branch Manager Narayangarh Branch

Bimal BastolaSuryabinayak Branch

Romila Koirala Chuchchepati Branch

Bishal DahalInaruwa Branch

Pratik Rai Belbari Branch Rameshwor KhatiwadaBhandara Branch

Sangeeta ShahChapagaun Branch

Kabindra PalGongabu Branch

Satya Devi NiraulaKalanki Branch

Prakash Karki Kumaripati Branch Priti k. SinghNewroad Branch

Binod ThapaPokhara Branch

Bishnu prasad shresthaDhading Besi Branch

Sunil Khatiwada

1. Mr. Tek Raj Niraula 2. Mr. Arun Kumar Ojha 3. Mr. Jiba Nath Lamichhane 4. Mr. Niraj Govinda Shrestha 5. Mr. Binaya Kumar Shrestha 6. Mr. Ghana Shyam Thapa 7. Dr. Birendra Prasad Mahato 8. Mr. Khem Raj Lamichhane 9. Mr. Ram Krishna Shah 10. Mr. Dinesh Mani Shrestha 11. Mr. Dilip Shrestha 12. Dr. Ganesh Prasad Pokharel 13. Dr. Gopal Prasad Shrestha 14. Mr. Badri Prasad Ojha 15. Dr. Upendra Mahato 16. Mrs. Usha Aryal 17. Mr. Madhav Banskota 18. Dr. Subarna Das Shrestha 19. Mr. Tuk Prasad Paudel 20. Dr. Jugal Bhurtel 21. Mr. Harendra Prasad Jasyawal 22. Mrs. Maushami Regmi 23. Mr. Mohan Raj Pokharel 24. Mr. Baidanath Sharma 25. Mr. Badri Prasad Panday 26. Mr. Madik Lal Shrestha 27. Mr. Shaivamadi Bhurtyal 28. Mrs. Jamuna Bhandhari 29. Mr. Ganesh Kumar Agrawal 30. Mr. Sudhir Kumar Agrawal 31. Mr Subhod Kumar Devkota 32. Mr. Bishnuhari Regmi 33. Mrs Sharmila Shrestha 34. Dr. Keshav Prasad Acharaya 35. Mr. Annanda Prakash Rathi 36. Mr. Kul Acharaya 37. Mr. Bishownath Poudel 38. Mrs. Jyoti Shrestha 39. Jaya Ganesh Investment Company pvt. Ltd. 40. Mrs. Saraswoti Bhattarai


29

SanimaBikas Bank


29

Head Office:Nagpokhari, Kathmandu

Phone: 01-4428979/80

Fax: 01-4428969

Head Office:Nagpokhari, KathmanduPhone: 01-4428979Fax: 01-4428969

Pokhara Branch:New Road, PokharaPhone: 061-525042Fax: 061-525043

Suryavinayak Branch:Suryavinayak, BhaktapurPhone: 01- 6619384Fax: 01-6619385

Chuchchepati Branch:Chuchchepati, KathmanduPhone: 01-4490041Fax: 01-4499507

Debit card issued by Sanima can be used all over India as we have tie up with Punjab National Bank.

Growing Network Centre

ATM Available at

New Road Branch:KhichaPokhari, New Road, KathmanduPhone: 01-4233668/9Fax: 01-4233673

Kumaripati Branch:Kumaripati, LalitpurPhone No. 01-5008597/8Fax: 01-5008596

Suryavinayak Branch:Suryavinayak, BhaktapurPhone: 01-6619384Fax: 01-6619385

Chuchchepati Branch:Chuchchepati, KathmanduPhone: 01-4490041Fax: 01-4499507

Gongabu Branch:Gongabu, KathmanduPhone:- 01-4389378 / 88Fax: 01-4389520

Chapagaun Branch:Chapagaun, Lalitpur Phone:- 01-5574216 Fax: 01-5572184

Kalanki Branch: Kalanki, KathmanduPhone:- 01-467077 / 72

Branches Inside Valley Branches Outside Valley

Damak Branch:Main Road, Damak, JhapaPhone: 023-585161Fax: 023-585162

Dhadingbesi Branch:Bich Bazar, Dhadingbesi, DhadingPhone No. 010-520967Fax: 010-520968

Pokhara Branch:New Road, PokharaPhone: 061-525042Fax: 061-525043

Narayangarh Branch:Pulchowk, NarayangarhPhone: 056-571959161Fax: 056-571968

Inaruwa Branch:Main Road, Inaruwa, SunsariPhone: 025-561749Fax: 025-561748

Belbari BranchBelbari, MorangPhone:-021-546082Fax: 021-545348

Bhandara BranchBhandara, ChitwanPhon:- 056-550656Fax: 056-550657

THE SHAREHOLDERS OF

SANIMA BIKAS BANK LIMITED

INDEPENDENT AUDITOR'S REPORT

We have audited the accompanying Balance Sheet of Sanima Bikas Bank Limited, as of 16 July 2010 (Corresponding to 32 Ashadh 2067), the related Profit and Loss Account and the Cash Flow Statement for the year then ended. These financial statements are the responsibility of the management of the Bank. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Nepal Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As per the requirement of the Companies Act, 2063 and Bank and Financial Institutions Act, 2063 we also report that:

a) we have obtained information and explanations, which, to the best of our knowledge and belief, were necessary for the purpose of our audit;

b) in our opinion, proper books of account as required by law have been kept by the Bank so far as appears from our examination of such books;

c) in our opinion, the returns received from branches of the Bank were adequate for the purpose of the audit;d) in our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report

have been prepared in the format prescribed by Nepal Rastra Bank and are in agreement with the books of account maintained by the Bank;

e) in our opinion, so far as appeared from our examination of the books, the Bank has maintained adequate capital funds and adequate provisions for possible impairment of assets in accordance with the directives of Nepal Rastra Bank;

f ) in our opinion, so far as appeared from our examination of the books, the business of the Bank has been conducted satisfactorily;

g) to the best of our information and according to explanations given to us and from our examination of the books of account of the Bank necessary for the purpose of our audit, we have not come across cases where Board of Directors or any employees of the Bank have acted contrary to the provisions of law, or committed any misappropriation or caused loss or damage to the Bank and violated any directives of Nepal Rastra Bank or acted in a manner to jeopardize the interest and security of the Bank, its depositors and investors.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Bank as of 16 July 2010 (Corresponding to 32 Ashad 2067), the results of operations and its cash flows for the year then ended in accordance with Nepal Accounting Standards except for the matters stated in note 5 of schedule 4.32 and comply with the provisions of the Companies Act, 2063, Nepal Rastra Bank Directives and Bank and Financial Institutions Act, 2063.

T.R.UpadhyaSenior Partner

For and on behalf ofT.R.Upadhya & Co.,Chartered AccountantsDate: 14 September 2010Kathmandu

ASSetS ScheduLe thiS YeAr rS. PreviouS YeAr rS.

1 Cash Balance 4.8 79,135,339 79,912,949

2 Balance with NRB 4.9 84,681,085 528,845,691

3 Balance with Banks/Financial Institutions 4.10 64,621,144 24,056,349

4 Money at Call and Short Notice 4.11 1,017,183,114 370,817,163

5 Investments 4.12 495,609,740 530,725,000

6 Loans Advances and Bills Purchase 4.13 5,092,099,003 3,992,090,809

7 Fixed Assets 4.14 325,503,055 229,112,971

8 Non-Banking Assets 4.15 - -

9 Other Assets 4.16 79,726,284 89,576,040

total Assets 7,238,558,764 5,845,136,972

cAPitAL & LiABiLitieS ScheduLe thiS YeAr rS. PreviouS YeAr rS.

1 Share Capital 4.1 806,400,000 805,165,800

2 Reserves and Funds 4.2 74,794,758 64,395,086

3 Debentures and Bonds 4.3 - -

4 Borrowings 4.4 444,800,000 506,000,000

5 Deposit Liabilities 4.5 5,760,495,363 4,417,504,608

6 Bills Payables 4.6 - -

7 Proposed and Payable Dividend 80,640,000 2,021,053

8 Income Tax Liabilities

9 Other Liabilities 4.7 71,428,643 50,050,425

total capital Liabilities 7,238,558,764 5,845,136,972

Balance SheetAs on july 16, 2010 (Ashad 32, 2067)

Contingent Liabilities Schedule 4.17

Directors' Declaration Schedule 4.29

Statement of Capital Fund Schedule 4.30

Statement of Risk Weighted Assets Schedule 4.30 (A)

Principal Indicators Schedule 4.31

Principle Accounting Policies Schedule 4.32

Notes to Accounts Schedule 4.33

Statement of loan taken by promoters Schedule 4.34

Comparison Between Unaudited and Audited Financial Schedule 4.35

Unaudited Financial Highlights certified by Internal Auditor Schedule 4.(A)

Schedules 4.1 to 4.17, 4.32, 4.33, 4.34 & 4.35 form integral parts of the Balance Sheet.

Date : 14 September 2010 (2067.05.29)

Place : Kathmandu

Kamal Pd. PaneruHead - Accounts

Bharat Kumar PokharelDirector

Jibanath LamichaneChairman

As per our report of even date.

tirtha raj upadhyay Senior Partner T.R. Upadhya & Co.

Chartered Accountants

Kumar Lamsal Chief Executive

Officer

Pankaj Adhikari Director

dr. Jugal Bhurtel Director

Arun Kumar ojhaDirector

dr. Niraj Gobinda ShresthaDirector

Shamba Lama Director

tej Bahadur chand Deputy General Manager

34 Sanima bikaS bank Limited annuaL RepoRt 2009/10

PArticuLArS ScheduLeS thiS YeAr rS. PreviouS YeAr rS.

1. Interest Income 4.18 615,644,495 358,552,749

2. Interest Expenses 4.19 399,298,078 235,894,796

Net interest income 216,346,417 122,657,953 3. Commission and Discount 4.20 3,908,315 4,251,601

4. Other Operating Income 4.21 30,740,447 25,564,749

5. Exchange Fluctuation Income 4.22 5,606,611 8,479,790

total operating income 256,601,789 160,954,093 6. Employees Expenses 4.23 42,845,039 24,287,639

7. Other Overhead Expenses 4.24 66,997,104 38,020,112

8. Exchange Fluctuation Loss 4.22 -

operating Profit Before Provision for Possible Loss 146,759,647 98,646,342 9. Provision for Possible Losses 4.25 11,351,934 19,944,884

operating Profit 135,407,713 78,701,459 10. Non-operating Income/Expenses 4.26 34,124 -

11. Provision Written-Back 4.27 2,497,377 10,650,810

Profit from regular operations 137,939,214 89,352,269 12. Profit/Loss from extra-ordinary activities 4.28 - -

Net Profit after considering all activities 137,939,214 89,352,269 13. Provision for Staff Bonus 12,539,929 8,122,934

14. Provision for Income Tax 39,661,294 23,469,561

This Year’s 37,134,576 24,368,801

Previous Year’s 2,495,654

Deferred Tax Liability 31,064 899,240

Net Profit/(Loss) 85,737,992 57,759,774

Profit and Loss AccountFor the period from July 16, 2009 to July 16, 2010 (Shrawan 01, 2066 to Ashad 32, 2067)

Date : 14 September 2010 (2067.05.29)

Place : Kathmandu








Officer







35Sanima bikaS bank Limited annuaL RepoRt 2009/10

Schedule No. 4.18 to 4.28, 4.32, 4.33, 4.34 & 4.35 form integral part of this Profit and Loss Account.

PArticuLArS ScheduLeS thiS YeAr rS. PreviouS YeAr rS.

income

1 Accumulated Profit up to the Last Year (Restated balance) 39,847,336 37,136,604

2 Current Year’s Profit 85,737,992 57,759,774

3 Exchange Fluctuation Fund - -

total (A) 125,585,328 94,896,378 expenses

1 Accumulated Loss up to the Last Year - -

2 This Year’s Loss - -

3 General Reserve 17,147,598 11,551,955

4 Contingent Reserve - -

5 Institutional Development Fund - -

6 Dividend Equalization Fund - -

7 Employee Related Reserves Funds - -

8 Proposed Dividend 80,640,000 2,021,053

9 Proposed Issue of Bonus Shares - 38,400,000

10 Special Reserve Fund - -

11 Exchange Fluctuation Fund 206,134 1,529,812

12 Capital Redemption Reserve Fund - -

13 Capital Adjustment Fund - -

14 ……………………. - -

total (B) 97,993,732 53,502,820 15 Accumulated Profit/(Loss) (A-B) 27,591,595 41,393,558

Profit and Loss Appropriation AccountFor the period from July 16, 2009 to July 16, 2010 (Shrawan 01, 2066 to Ashad 32, 2067)



Date : 14 September 2010 (2067.05.29)

Place : Kathmandu







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PArticuLArS thiS YeAr rS. PreviouS YeAr rS.

(a) Cash flow from Operating Activities 120,421,393 75,897,104

1 cash received 654,587,831 390,240,502 1.1 Interest Income 615,122,870 358,063,611

1.2 Commission and Discount Income 3,908,315 4,251,601

1.3 Income from Foreign Exchange Transaction 4,782,076 2,360,542

1.4 Recovery of Written-off Loans - -

1.5 Other Incomes 30,774,571 25,564,749

2 cash Payment 534,166,438 314,343,398 2.1 Interest Expenses 399,847,457 235,894,796

2.2 Staff Expenses 42,845,039 24,287,639

2.3 Office Overhead Expenses 52,886,124 29,456,067

2.4 Income Tax Paid 38,587,819 24,704,896

2.5 Other Expenses - -

Cash Flow Before Working Capital Activities (770,101,012) (8,258,408)

(increase)/decrease of current Assets (1,712,912,160) (1,566,517,646) 1 (Increase)/Decrease in Money at Call and Short Notice (646,365,952) 16,254,005

2 (Increase)/Decrease in Short-term Investments 33,540,260 (22,481,584)

3 (Increase)/Decrease in Loans and Advances and Bills Purchase (1,108,862,751) (1,503,609,692)

4 (Increase)/Decrease in Other Assets 8,776,282 (56,680,375)

Increase/(Decrease) of Current Liabilities 942,811,148 1,558,259,238

1 Increase/(Decrease) in Deposits Liabilities 1,342,990,755 1,536,633,231

2 Increase/(Decrease) in Certificate of Deposits - -

3 Increase/(Decrease) in Short-term Borrowings (406,000,000) 977,500

4 Increase/(Decrease) in Other Liabilities 5,820,393 20,648,507

(b) Cash flow from Investment Activities (108,404,439) (32,797,556)

1 (Increase)/Decrease in Long-Term Investment 1,575,000 (100,000)

2 (Increase)/Decrease in Fixed Assets (110,501,064) (33,186,694)

3 Interest Income From Long-Term Investment 521,625 489,138

4 Dividend Income - -

5 Others

(c) Cash flow from Financing Activities 352,882,103 382,765,800

1 Increase/(Decrease) in Long-Term Borrowings (Bonds, Debentures etc.) - -

2 Increase/(Decrease) in Share Capital 1,234,200 382,765,800

3 Increase/(Decrease) in Other Liabilities (Share Premium) 6,847,903 -

4 Increase/(Decrease) in Refinance/Facilities From Nepal Rastra Bank 344,800,000 -

(d) Income/Expenses from change in Exchange 824,536 6,119,248

Rate in Cash and Bank Balances

(e) This Year’s Cash Flow from All Activities (404,377,420) 423,726,188

(f ) Opening Balance of Cash and Bank Balances 632,814,989 209,088,799

(g) closing Balance of cash and Bank Balances 228,437,569 632,814,989

cash flow StatementFor the period from July 16, 2009 to July 16, 2010 (Shrawan 01, 2066 to Ashad 32, 2067)



Date : 14 September 2010 (2067.05.29)

Place : Kathmandu







Officer







S. N. NAme of the ShArehoLderS No. of ShAreS AmouNt PerceNtAGe

1 Mr. Tek Raj Niraula 1,128,960 112,896,000 14.00

2 Mr. Arun Kumar Ojha 1,128,960 112,896,000 14.00

3 Mr. Jibanath Lamichane 504,000 50,400,000 6.25

4 Dr. Niraj Gobinda Shrestha 504,000 50,400,000 6.25

5 Dr. Birendra Prasad Mahato 378,000 37,800,000 4.69

6 Mr. Khemraj Lamichhane 357,600 35,760,000 4.43

7 Mr. Binay Kumar Shrestha 355,000 35,500,000 4.40

8 Mr. Ghanashyam Thapa 329,280 32,928,000 4.08

9 Mr. Dinesh Mani Shrestha 183,960 18,396,000 2.28

10 Mr. Ram Krishna Shah 152,000 15,200,000 1.88

11 Mr. Dilip Shrestha 131,040 13,104,000 1.63

12 Ms. Indira Bhandari 70,560 7,056,000 0.88

13 Mr. Shamba Lama 58,716 5,871,600 0.73

List of Shareholder’s holding more than 0.5 % of Paid-up Share capital


Particulars this Year rs. Previous Year rs.1 Share capital 1.1 Authorized Capital 2,100,000,000 768,000,000

a) 21,000,000 Ordinary Shares of Rs. 100 each 2,100,000,000 768,000,000

b) …………. Non-redeemable Preference Shares of Rs. ………. each - -

c) …………. Redeemable Preference Shares of Rs. ……….. each - -

1.2 Issued Capital 806,400,000 768,000,000

a) 8,064,000 Ordinary Shares of Rs.100 each 806,400,000 768,000,000


c) …………. Redeemable Preference Shares of Rs. ……….. each - -

1.3 Paid up Capital 806,400,000 766,765,800

a) 8,064,000 Ordinary Shares of Rs.100 each 806,400,000 766,765,800


c) …………. Redeemable Preference Shares of Rs. ……….. each -

1.4 Proposed Bonus Share - 38,400,000

1.5 Calls in Advance - -

Share capital and ownershipAs on July 16, 2010 (Ashad 32. 2067) ScheduLe 4.1

PArticuLArS thiS YeAr PreviouS YeAr % ShAre cAPitAL ShAre cAPitAL % 1 National ownership 100 806,400,000 766,765,800 100 1.1 Government of Nepal - -

1.2 Foreign Institutions - -

1.3 “A” Class Licensed Institutions - -

1.4 Other License Institutions - -

1.5 Other Entities/ Organizations - - 1.7 Individuals 100 806,400,000 766,765,800 100

1.6 Others - - 2 foreign ownership - - - - total 100 806,400,000 766,765,800 100

Share ownership

PArticuLArS thiS YeAr rS. PreviouS YeAr rS..

1 General Reserve Fund 38,554,506 21,406,908

2 Capital Reserve Fund - -

3 Capital Redemption Reserve - -

4 Capital Adjustment Fund - -

5 Other Resevers

5.1 Contingent Reserve - -

5.2 Institution Development Fund - -

5.3 Dividend Equalization Fund - -

5.4 Special Reserve Fund - -

5.5 Assets Revaluation Reserve - -

5.6 Deferred Tax Reserve - -

5.7 Other Free Reserves - -

5.8 Other Reserve Funds - -

5.9 Share Premium 6,847,903 -

6 Accumulated Profit/(Loss) 27,591,595 41,393,558

7 Exchange Equalization Fund 1,800,753 1,594,620

total 74,794,758 64,395,086

reserve and SurplusAs on July 16, 2010 (Ashad 32, 2067) ScheduLe 4.2


debentures and BondsAs on July 16, 2010 (Ashad 32, 2067)


1 ……………. Percent Bonds/Debentures of Rs. ………… each - -

Issued on …………… and Matured on ………….. - -

(Outstanding balance of Redemption Reserve Rs. …………….) - -

2 ……………. Percent Bond/Debentures of Rs. ………… each - -

Issued on …………… and Matured on ………….. - -

(Outstanding Balance of Redemption Reserve Rs. …………….) - -

3 ……………… - -

total (1+2+3) - -

ScheduLe 4.3


A. Local 1 Nepal Government - -

2 Nepal Rastra Bank 344,800,000 -

3 Repo Obligation - -

4 Inter Bank and Financial Institutions 100,000,000 506,000,000

5 Other Organized Institutions - -

6 Others - -

total 444,800,000 506,000,000 B. foreign - - 1 Banks - -

2 Others - -

total - - total (A+B) 444,800,000 506,000,000

BorrowingsAs on July 16, 2010 (Ashad 32, 2067)

ScheduLe 4.4



1 Non-interest Bearing Accounts A. current deposits 130,912,791 89,678,371 1. Local Currency 129,614,735 88,253,730

1.1 Nepal Government 1,423,577 8,366,519


1.3 Other Licensed Financial Institutions 2,500,417 5,696,174

1.4 Other Organized Institutions 78,486,542 47,288,571

1.5 Individuals 47,204,200 26,902,466

1.6 Others

2. Foreign Currency 1,298,056 1,424,641

2.1 Nepal Government - -


2.3 Other Licensed Financial Institutions - -

2.4 Other Organized Institutions

2.5 Individuals 1,298,056 1,424,641

2.6 Others - -

B. margin deposits 6,074,297 2,982,941 1 Employee Guarantees - -

2 Guarantee Margin 6,074,297 2,982,941

3 Letters of Credit Margin - -

c. others 1. Local Currency - -

1.1 Financial Institutions - -

1.2 Other Organized Institutions - -

1.3 Individuals - -

2. Foreign Currency - -

2.1 Financial Institutions - -

2.2 Other Organized Institutions - -

2.3 Individuals - -

total of Non-interest Bearing Accounts 136,987,088 92,661,312 2 Interest Bearing Accounts - -

A. Savings deposits 2,070,385,214 1,570,640,962 1. Local Currency 1,951,532,290 1,459,483,982

1.1 Organized Institutions 2,016,589 280,864,090

1.2 Individuals 1,949,515,702 1,178,619,892

1.3 Others - -


2.1 Organized Institutions

2.2 Individuals 118,852,923 111,156,980

2.3 Others - -

B. fixed deposits 2,870,651,010 2,227,581,702 1. Local Currency 2,820,501,510 1,773,855,702

1.1 Organized Institutions 1,618,144,220 1,383,494,144

1.2 Individuals 1,202,357,290 390,361,558

1.3 Others - -


2.1 Organized Institutions

2.2 Individuals 50,149,500 453,726,000

2.3 Others - -

depositsAs on July 16, 2010 (Ashad 32, 2067) ScheduLe 4.5


Bills PayableAs on July 16, 2010 (Ashad 32, 2067)


1 Local Currency - -

2 Foreign Currency - -

total - -

ScheduLe 4.6


1 Pension/Gratuity Fund 2,600,404 956,173

2 Employees Provident Fund - -

3 Employees Welfare Fund - -

4 Provision for Staff Bonus 12,539,929 8,122,934

5 Interest Payable on Deposits 956,645 56,225

6 Interest Payable on Borrowings 4,837,233 6,287,033

7 Unearned Discount and Commission 787,887 794,974

8 Sundry Creditors 10,976,823 1,491,244

9 Branch Adjustment Account 2,165 -

10 Others

TDS Payable on interest 6,666,810 4,099,822

Other TDS Payable 824,958 2,531,514

Provision 1,936,149 1535157

Deferred Tax Liability 582,421 838209

Other Miscellaneous 28,717,218 23,337,140

total 71,428,643 50,050,425

other LiabilitiesAs on July 16, 2010 (Ashad 32, 2067) ScheduLe 4.7

deposits continued....


c. call deposits 682,472,051 526,620,631 1. Local Currency 633,703,955 523,273,097

1.1 “A” Class Licensed Institutions 83,855,622 474,491

1.2 Other Licensed Institutions 121,990,804 471,200,099


1.4 Individuals 72,752,995 19,210,185

1.5 Others - -



2.2 Other Licensed Institutions - -


2.4 Individuals

2.5 Others - -

d. certificate of deposit - - 1. Organized Institutions - -

2. Individuals - -

3. Others - -

total of interest Bearing Accounts 5,623,508,274 4,324,843,295

total deposit (1+2) 5,760,495,363 4,417,504,608



1 Local Currency (including coin) 75,762,704 78,364,550

2 Foreign Currency 3,372,636 1,548,399

total 79,135,339 79,912,949

PArticuLArS LocAL foreiGN curreNcY thiS YeAr PreviouS YeAr curreNcY GrANd totAL rS. rS. iNdiAN coNvertiBLe totAL curreNcY

1 Nepal rastra Bank 84,554,182 - 126,903 - 84,681,085 528,845,691 a) Current Account 84,554,182 - 126,903 - 84,681,085 528,830,691

b) Other Account - - - - - 15,000

PArticuLArS LocAL foreiGN curreNcY thiS YeAr PreviouS curreNcY GrANd totAL rS. YeAr rS. iNdiAN coNvertiBLe totAL curreNcY

1 Local Licensed Institutions 16,362,486 - 93,213 93,213 16,455,699 11,824,927

a) Current Account 16,362,486 - 93,213 93,213 16,455,699 11,824,927

b) Other Account - - - - - -

2 Foreign Banks - 2,020,281 46,145,164 48,165,445 48,165,445 12,231,422

a) Current Account 2,020,281 46,145,164 48,165,445 48,165,445 12,231,422

b) Other Account - - - - - -

total 16,362,486 2,020,281 46,238,377 48,258,659 64,621,144 24,056,349

cash BalanceAs on July 16, 2010 (Ashad 32, 2067)

Balance with Nepal rastra BankAs on July 16, 2010 (Ashad 32, 2067)

Balance with Banks/financial institutionsAs on July 16, 2010 (Ashad 32, 2067)

Note: Total Balance for which the confirmations are received from the respective licensed institutions and NRB is Rs. 1,037,772,610 and

the difference are subsequently reconciled.

ScheduLe 4.8

ScheduLe 4.9

ScheduLe 4.10


money at call and Short NoticeAs on July 16, 2010 (Ashad 32, 2067)


1 Local Currency 921,348,719 333,307,028

2 Foreign Currency 95,834,395 37,510,135

total 1,017,183,114 370,817,163

PArticuLArS coSt Price mArKet Price ProviSioN thiS YeAr PreviouS YeAr

1 Investment in Shares - - -

1.1 Nepal Clearing House Company Ltd. - - -

1000 Ordinary Shares of Rs 100 Paid up 100,000 - - 100,000 100,000

1.2 …….. Co. (Pvt. Ltd./Ltd.) - - -

……. Ordinary Shares (including …….. - - -

Bonus Shares of Rs. …….. Paid up.

1.3 …….. Co. (Pvt. Ltd./Ltd.) - - -

…….. % preference shares of Rs. ……. Paid up. - - -

2 Investment in Debentures and Bonds - - -

2.1 …….. Co. (Pvt. Ltd./Ltd.) - - -

….. % … Debentures/Bonds of Rs. ……. each - - -

2.2 ……… - - -

2.3 ………. - - -

total investment 100,000 - - 100,000 100,000 3 Provision for Loss - - -

3.1 Provision Up to Previous Year - - -

3.2 Additions This Year - - -

total Provision - - -

Net investment 100,000 - - 100,000 100,000

investmentsAs on July 16, 2010 (Ashad 32, 2067)

PArticuLArS PurPoSe thiS YeAr rS. PreviouS YeAr rS. trAdiNG other

1 Nepal Government Treasury Bills - 322,634,740 322,634,740 -

2 Nepal Government Savings Bond - 48,025,000 48,025,000 8,025,000

3 Nepal Government Other Securities - - - -

4 Nepal Rastra Bank Bonds - - - -

5 Foreign Securities - - - -

6 Local Licensed Institutions - 87,425,000 87,425,000 483,600,000

7 Foreign Banks - 37,425,000 37,425,000 39,000,000

8 Origanized Insrtitutions Shares - 100,000 100,000 100,000

9 Corporate Bonds and Debentures - - - -

10 Other Investments - - - -

total investment - 495,609,740 495,609,740 530,725,000 Provision - - - -

Net investment - 495,609,740 495,609,740 530,725,000

investment in Shares, debentures and BondsAs on July 16, 2010 (Ashad 32, 2067)

ScheduLe 4.11

ScheduLe 4.12

ScheduLe 4.12(A)


46

ScheduLe 4.12.1held for tradingAs on July 16, 2010 ( (Ashad 32, 2067)

deScriPtioN coSt LASt curreNt curreNt LASt YeAr remArKS Price mArKet mArKet YeAr Profit Profit Price Price /(LoSS) /(LoSS)

1. Treasury Bills of Governement of Nepal - - - - -

2. Saving Bonds of Government of Nepal - - - - -

3. Other Loan Bonds of Government of Nepal - - - - -

4. Loan Bonds of Nepal Rastra Bank - - - - -

5. Foreign Loan Bonds - - - - -

6. Shares of Local Licensed Institutions - - - - -

7. Debenture and Bonds of Local Licensed Institutions - - - - -

8. Debenture and Bonds of Local Organized Institutions - - - - -

9. Investment in Foreign Banks (Placement) - - - - -

10. Interbank Lending - - - - -

11. Other Investment - - - - -

total investment - - - - -

SCHEDULE 4.12.2held to maturityAs on July 16, 2010 (Ashad 32, 2067)

deScriPtioN coSt cumuLAtive curreNt curreNt LASt YeAr remArKS Price LoSS uPto LeAr LoSS YeAr Profit/ thiS YeAr Profit/ (LoSS) (LoSS)

1. Treasury Bills of Governement of Nepal 322,634,740 - - - -

2. Saving Bonds of Government of Nepal 48,025,000 - - - -


4. Loan Bonds of Nepal Rastra Bank - - - - -



7. Debenture and Bonds of Local - - - - -

Licensed Institutions


Organized Institutions

9. Investment in Foreign Banks (Placement) 37,425,000 - - - -

10. Interbank Lending 87,425,000 - - - -

11. Other Investment - - - - -

totAL iNveStmeNt 495,509,740 - - - -

Sanima bikaS bank Limited annuaL RepoRt 2009/10

47

ScheduLe4.12.3

Available for SaleAs on July 16, 2010 (Ashad 32, 2067)

deScriPtioN coSt LASt curreNt curreNt LASt remArKS Price mArKet mArKet YeAr fuNd YeAr Profit Price Price AdJuStmeNt /(LoSS) AmouNt

1. Treasury Bills of Governement of Nepal - - - - -

2. Saving Bonds of Government of Nepal - - - - -


4 Loan Bonds of Nepal Rastra Bank - - - - -




Licensed Institutions


Organized Institutions

9. Investment in Foreign Banks (Placement) - - - - -

10. Interbank Lending - - - - -

11. Other Investment 100,000 - - - - Investment in

Nepal Clearing

House Co. Ltd.

total investment 100,000 - - - -


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.13


Loans, Advances and Bills Puchased Securitywise As on July 16, 2010 (Ashad 32, 2067)


(A) Secured 5,145,848,946 4,036,986,194 1 Movable/Immovable Assets 4,537,771,529 3,496,687,770

2 Guarantee of Local Licensed Institutions - -

3 Government Guarantee

4 Internationally Rated Bank Guarantee

5 Export Documents

6 Fixed Deposit Receipts - -

a) Own Fixed Deposit Receipt 390,280,220 540,298,424

b) Fixed Deposit Receipt of Other Licensed Institutions - -

7 Government Bonds - -

8 Counter Guarantee - -

9 Personal Guarantee 3,661,179 -

10 Other Securities 214,136,017 -

(B) unsecured - -

total 5,145,848,946 4,036,986,194

ScheduLe 4.13(A)


fixed AssetsAs on July 16, 2010 (Ashad 32, 2067)

PArticuLArS LANd & ASSetS thiS YeAr PreviouS YeAr BuiLdiNG vehicLeS mAchiNerY office otherS rS. rS.

equiPmeNt

1 At Cost - - - - - - -

a. Previous Year Balance - 13,174,189 4,601,461 25,197,694 - 42,973,344 31,359,343

b. Addition This Year 19,568,312 7,127,364 22,696,017 - 49,391,693 11,614,001

c. Revaluation/Written Back This Year - - - - - - -

d. This Year Sold - 2,000,000 - - - 2,000,000 -

e. This Year Written off - - - - - -

total cost (a+b+c+d+e) - 30,742,501 11,728,825 47,893,711 - 90,365,037 42,973,344 2 Depreciation - - - - - - -

a. Up to Previous Year - 5,536,973 1,617,020 8,536,994 - 15,690,987 9,764,589

b. For This Year - 3,698,592 1,076,576 6,433,915 - 11,209,083 5,926,398

c. Depreciation on - 1,344,640 - - - 1,344,640 -

Revaluation/Written Back

total depreciation - 7,890,925 2,693,596 14,970,909 - 25,555,430 15,690,987 3 Book value (Wdv*) (1-2) - 22,851,576 9,035,229 32,922,802 - 64,809,607 27,282,357 4 Land 171,600,000 - - - - 171,600,000 171,600,000

5 Capitalization Construction 61,283,199 - - - - 61,283,199 18,290,742

(Pending Capitalization)

6 Leasehold Assets - - - - 27,810,249 27,810,249 11,939,872

total (3+4+5+6) 232,883,199 22,851,576 9,035,229 32,922,802 27,810,249 325,503,055 229,112,971

ScheduLe 4.14

Non-Banking AssetsAs on July 16, 2010 (Ashad 32, 2067)

NAme ANd AddreSS dAte of AccePt totAL AmouNt of LoSS ProviSioN Net NoN-BANKiNG PreviouS YeAr of BorroWer NoN-BANKiNG NoN- BANKiNG iN PercANtAGe iN AmouNt ASSetS thiS rS. or PArtY ASSetS ASSetS rS. YeAr rS. - - - - - - -

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Grand total - - - - - -

ScheduLe 4.15


* Written Down Value

other AssetsAs on July 16, 2010 (Ashad 32, 2067)


Stationery Stock 1,720,766 813,029

Income Receivable on Investments 6,799,574 3,658,424

Accrued Interest on Loan 9,748,033

Less : Interest Suspense Amount 9,748,033 - -

Commission Receivable - -

Sundry Debtors 638,682 10,154

Staff Loans and Advances 15,669,917 8,616,084

Prepaid Expenses 3,126,061 1,927,062

Cash in Transit - -

Other Transit items ( including cheques ) - 32,580,214

Drafts Paid without Notice - -

Expenses Not Written off 5,265,233 2,773,483

Branch account -

Deferred Tax Assets - 286,852

Other 46,506,053 38,910,738

total 79,726,284 89,576,040

ScheduLe 4.16

51

other Assets (Additional information)

thiS YeAr (rS.)

PArticuLArS uP to 1 YeAr 1 to 3 YeArS ABove 3 YeArS totAL thiS YeAr PreviouS YeAr rS.

1 Accrued Interest on Loan 9,748,033 - - 9,748,033 5,313,926

2 Drafts Paid without Notice - - - -

3 Branch Adjustment Account - - - -

4 Local and Foreign Agency A/Cs 11,200,215 10,673,621 - 21,873,836 3,616,643

ScheduLe 4.16(A)


52

contingent LiabilitiesAs on July 16, 2010 (Ashad 32, 2067)


1 Claims on Institution but not accepted by the Institution - -

2 Letters of Credit (Full Amount) - -

a) Less than 6 months Maturity - -

b) More than 6 months Maturity - -

3 Rediscounted Bills - -

4 Unmatured Guarantees/Bonds

a) Bid Bonds 26,578,700 48,906,615

b) Performance Bonds 114,861,389 53,534,100

c) Other Guarantees/Bonds - -

5 Unpaid Shares in Investment - -

6 Forward Exchange Contract Liabilities - -

7 Bills under Collection - -

8 Acceptance and Endorsements - -

9 Underwriting Commitments - -

10 Irrevocable Loan Commitments - -

11 Counter Guarantee of Internationally Rated Banks - -

12 Advance Payment Guarantee 58,286,919 36,926,150

13 Financial Guarantee 28,373,485 37,381,440

14 Contingent Liabilities on Income Tax - -

15 Capital Commitment net of Advance Payment 91,836,915 133,147,925

16 ----------- - -

- -

total 319,937,408 309,896,230

ScheduLe 4.17


53


A. On Loan, Advances and Overdraft 552,530,358 314,662,908

1 Loans and Advances 404,374,172 221,231,897

2 Overdraft 148,156,186 93,431,012

B On Investment 9,115,067 1,983,075

1 Nepal Government Securities 9,115,067 1,983,075

a. Treasury Bills 8,593,442 1,493,937

b. Development Bonds 521,625 489,138

c. National Savings Certificates - -

2 Foreign Securities - -

a. ……….. - -

b. ………. - -

3 Nepal Rastra Bank Bond - -

4 Debenture and Bonds - -

a. Financial Institutions - -

b. Other Organizations - -

C On Agency Balances - -

1 Local Banks - -

2 Foreign Banks - -

D On Money at Call and Short Notice 38,405,946 27,580,046

1 Local Banks/Financial Institutions 38,405,946 27,459,121

2 Foreign Banks - 120,925

E On Others 15,593,124 14,326,720

1 Certificate of Deposits - -

2 Inter-Bank Loan 15,593,124 14,326,720

3 Others

total 615,644,495 358,552,749

interest incomeFor the period from July 16, 2009 to July 16, 2010

(Shrawan 01, 2066 to Ashad 32, 2067)ScheduLe 4.18


54

commission and discountFor the period from July 16, 2009 to July 16, 2010

(Shrawan 01, 2066 to Ashad 32, 2067)


A Bills Purchase and Discount - -

1 Local - -

2 F oreign - -

B Commission 2,702,604 3,445,601

1 Letters of Credit - -

2 Guarantee 2,383,392 2,999,609

3 Collection Fee

4 Remittance Fee 187,518 90,536

5 Credit Cards - -

6 Share Underwriting/Issues 131,695 18,375

7 Government Transactions - -

8 Agency Commission - -

10 Exchange Income - 337,081

C Others 1,205,710 806,000

- -

total 3,908,315 4,251,601

ScheduLe 4.20

interest expensesFor the period from July 16, 2009 to July 16, 2010 (Shrawan 01, 2066 to Ashad 32, 2067)


A. On Deposit Liabilities 357,725,194 214,599,624

1 Fixed Deposits 205,779,868 129,719,157

1.1 Local Currency 197,811,541 120,527,684

1.2 Foreign Currency 7,968,327 9,191,473

2 Savings Deposits 114,011,320 61,866,729

2.1 Local Currency 112,777,777 59,006,810

2.2 Foreign Currency 1,233,542 2,859,919

3 Call Deposits 37,934,006 23,013,738

3.1 Local Currency 37,712,548 22,873,862

3.2 Foreign Currency 221,458 139,876

4 Certificate of Deposits - -

B On Borrowings 41,572,885 21,295,173

1 Debentures and Bonds - -

2 Loan from Nepal Rastra Bank 2,408,877 -

3 Inter Bank/Financial Institutions Borrowing 39,164,008 21,295,173

4 Other Corporate Body - -

5 Other Loans - -

C On Others - -

1 ……………… - -

2 ………………. - -

total 399,298,078 235,894,796

ScheduLe 4.19


55

exchange Gain/Loss For the period from July 16, 2009 to July 16, 2010 (Shrawan 01, 2066 to Ashad 32, 2067)


(A) Revaluation Gain 824,536 6,119,248

(B) Trading Gain (Except Exchange Income) 4,782,076 2,360,542

total income/(Loss) 5,606,611 8,479,790

ScheduLe 4.22

other operating income For the period from July 16, 2009 to July 16, 2010

(Shrawan 01, 2066 to Ashad 32, 2067)


1 Rental on Safe Deposit Lockers 335,500 258,500

2 Issue and Renewals of Credit Cards - -

3 Issue and Renewals of ATM Cards 88,020 134,284

4 Telex/T.T. 173,388 174,187

5 Service Charges 25,125,833 23,731,212

6 Renewal Fees 1,239,270 503,000

7 Others 3,778,436 763,566

total 30,740,447 25,564,749

ScheduLe 4.21

employee expenses For the period from July 16, 2009 to July 16, 2010

(Shrawan 01, 2066 to Ashad 32, 2067)


1 Salary 21,884,595 13,392,322

2 Allowances 13,209,161 7,148,385

3 Contribution to Provident Fund 1,750,140 1,023,641

4 Training Expenses 111,384 299,978

5 Uniform 677,156 59,250

6 Medical - -

7 Insurance 296,187 -

8 Pension and Gratuity Provision 1,747,746 956,173

9 Others 3,168,670 1,407,890

- -

total 42,845,039 24,287,639

ScheduLe 4.23


56

other overhead expenses For the period from July 16, 2009 to July 16, 2010 (Shrawan 01, 2066 to Ashad 32, 2067)

Particulars this Year rs. Previous Year rs.1 House Rent 8,583,030 5,942,326

2 Electricity and Water 2,001,970 997,098

3 Repair and Maintenance 507,449 262,476

(a)Building 26,860 -

(b)Vehicles 292,361 120,363

(c)Others (Software) 188,228 142,113

4 Insurance 1,823,041 839,145

5 Postage, Telex, Telephone, Fax 4,402,516 2,039,752

6 Office Equipment, Furniture and Fixture Repair 579,487 414,945

7 Traveling Allowances and Expenses 634,823 418,238

8 Stationery and Printing 2,124,305 1,819,223

9 Periodicals and Books 70,512 37,321

10 Advertisements 7,525,604 5,201,901

11 Legal Expenses 517,508 129,498

12 Donations 32,402 135,656

13 Expenses Relating to Board of Directors 975,040 747,501

(a)Meeting Fees 733,000 549,000

(b)Other Expenses 242,040 198,501

14 Annual General Meeting Expenses 316,182 450,741

15 Expenses Relating to Audit 417,572 260,881

(a)Audit Fees 238,430 198,880

(b)Other Expenses 179,142 62,001

16 Commission on Remittances - 656,281

17 Depreciation on Fixed Assets 14,110,980 8,564,045

18 Amortization of Preliminary Expenses - -

19 Share Issue Expenses 2,911,221 1,951,708

20 Technical Services Fee - -

21 Entertainment 1,100,171 646,030

22 Written Off Expenses - -

23 Security Expenses 5,369,604 2,757,225

24 Credit Guarantee Premium - -

25 Commission and Discount - -

26 Others 12,993,687 3,748,121

26.1 Office Maintenance 622,051 417,440

26.2 Vehicle Fuel & Tax 3,096,582 1,977,858

26.3 Consultancy Service Fees & Expenses 929,230 426,575

26.4 Membership Fee 850,709 700,522

26.5 Business Promotion Expense 4,131,121

26.6 Human Resource Outsourcing 1,968,490

26.7 CIBL Expenses 705,253

26.8 Miscelleneous 690,251 225,726

total 66,997,104 38,020,112

ScheduLe 4.24


57

Provision for Possible Losses For the period from July 16, 2009 to July 16, 2010 (Shrawan 01, 2066 to Ashad 32, 2067)


1 Increase in Loan Loss Provision 11,351,934 19,944,884

2 Increase in Provison for Loss on Investment - -

3 Provision Against Non-Banking Assets - -

4 Provision Against Other Assets - -

total 11,351,934 19,944,884

ScheduLe 4.25

Non-operating income/Loss For the period from July 16, 2009 to July 16, 2010 (Shrawan 01, 2066 to Ashad 32, 2067)


1 Profit (Loss) on Sale of Investment - -

2 Profit (Loss) on Sale of Assets - -

3 Dividend - -

4 Subsidies Received from Nepal Ratra Bank - -

a. Reimbursement of Losses of Specified Branches - -

b. Interest Subsidy - -

c. Exchange Counter - -

5 Others 34,124 -

total Non-operating income (Loss) 34,124 -

ScheduLe 4.26

ScheduLe 4.27

Loss Provisions Written BackFor the period from July 16, 2009 to July 16, 2010 (Shrawan 01, 2066 to Ashad 32, 2067)


1 Loan Loss Provision Written Back 2,497,377 10,650,810

2 Provision against Non-Banking Assets Written Back - -

3 Investment Provision Written Back - -

4 Provision against Other Assets Written back - -

total 2,497,377 10,650,810


58

Statement of Loans Written-off for the period fromJuly 16, 2009 to July 16, 2010 (Shrawan 01, 2066 to Ashad 32, 2067)

S.N. tYPeS of LoAN WritteN tYPe BASiS of LoAN APProved iNitiAtioN remArKS

off of SecuritY vALuAtioN of BY NAme/ mAde for

AmouNt coLLAterAL deSiGNAtioN recoverY

1 Working Capital Loan - - - - - -

2 Project Loan - - - - - -

3 Fixed Capital Loan - - - - - -

4 Personal Loan - - - - - -

5 Other Loan - - - - - -

total Loan - - - - - -

ScheduLe 4.28 (A)


1 Recovery of write off Loan - -

2 Voluntary Retirement Scheme Expenses - -

3 Loan Write-Off (4.28) (a) - -

4 Other Expenses/Income - -

- -

total - -

income /expenses from extra-ordinary Activities For the period from July 16, 2009 to July 16, 2010

(Shrawan 01, 2066 to Ashad 32, 2067) ScheduLe 4.28


59

ScheduLe 4.29

Statement of Loans and Advances extended to directors/chief executive/Promoter/employees and Shareholders As on July 16, 2010 (Ashad 32, 2067)

The Statement of amount, included under total amount of Bills Purchased and Discounted, Loans, Advances and Overdraft, provided to the Directors, Chief

Executive, Promoters, Employees, Shareholders and to the individual members of their undivided family or against the guarantee of such persons or to the

organizations or companies in which such individuals are managing agent, are as follows :

NAme of Promoter/ tiLL LASt YeAr’S BALANce thiS YeArrecoverY thiS YeAr BALANce AS of AShAd eNd

director/chief executive PriNciPAL iNtereSt PriNciPAL iNtereSt AdditioNS PriNciPAL iNtereSt

(A) Directors - - - - - - -

1 Tek Raj Niraula 29,000,000 - 29,000,000 - - - -

2 - - - - - - -

(B) Chief Executive - - - - - - -

1 - - - - - - -

- - - - - - -

(C) Promoters - - - - - - -

1. Subarn Das Shrestha 180,424 - 110,524 - - 69,900 -

2. Tuk Prasad Poudyal 1,050,000 - - - - 1,050,000 -

3. Dr. Birendra Prasad Mahato 48,000,000 48,000,000 - - -

(D) Employees - - - - - - -

1 Rudra Prasad Banjara - - - - 1,100,000 1,100,000 -

2 Kumari Bharati - - - - 300,000 300,000 -

(E) Shareholders - - - - - - -

1 - - - - - - -

2 - - - - - - -

total 78,230,424 - 77,110,524 - 1,400,000 2,519,900 -

Note: All Above loans are against Fixed Deposit maintained with the Bank.


60

Statement of capital fundAs on July 16, 2010 (Ashad 32, 2067)


A) core capital 879,394,005 867,966,266 1 Paid up Capital 806,400,000 766,765,800

2 Proposed Bonus Share - 38,400,000

3 Share Premium 6,847,903 -

4 Non-Redeemable Preference Share - -

5 General Reserve Fund 38,554,506 21,406,908

6 Cumulative Profit/(Loss) (up to Previous FY) 27,591,595 37,136,604

7 Current Year Profit/(Loss) as per shown in Balance Sheet - 4,256,954

8 Capital Redemption Reserve - -

9 Capital Adjustment Reserve - -

10 Calls in Advance - -

11 Other Free Reserves - -

Less : - -

_ Goodwill - -

– Investment in excess of prescribed limit - -

– Fictitious Assets - -

– Investment in securities of companies with financial interest - -

– Acquisition of Land and Building for self use in violation of directive

– Investment in Residential housinf loan and land

development in excess of prescribed limit

– Underwriting commitment not sold within prescribed time limit

– Loan to person or group of persons restricted by prevailing Act and laws

B) Supplementary capital 53,215,654 41,893,798 1 Loan Loss Provision on Pass Loans 51,414,901 40,299,178

2 Additional Loan Loss Provision - -

3 Hybrid Capital Instruments - -

4 Unsercured Subordinated Term Debt - -

5 Exchange Equalization Reserve 1,800,753 1,594,620

6 Assets Revaluation Reserve - -

7 Investment Adjustment Reserve - -

c) total capital fund (A+B) 932,609,659 871,460,064 D) Minimum Capital Fund required to be maintained on the basis of Risk Weighted Assets

Capital Fund (@ 11.00 Percent) 621,530,550 504,034,009

Core Capital (@ 5.50 Percent) 310,765,275 252,017,005

Capital Fund Excess By @ 5.51 Percent 311,079,110 367,426,055

Core Capital Excess By @ 10.06 Percent 568,628,730 615,949,261

ScheduLe 4.30


61

curreNt YeAr rS. PreviouS YeAr rS.

oN-BALANce Sheet ASSetS WeiGhtAGe AmouNt riSK WeiGhted ASSetS AmouNt riSK WeiGhted

ASSetS

Cash Balance 0 79,135,339 - 79,912,949 -

Gold (Tradable) 0 - - - -

Balance with Nepal Rastra Bank 0 84,681,085 - 528,845,691 -

Investment in Government Securities 0 370,659,740 - 8,025,000 -

Investment in NRB Bonds 0 - - - -

Fully Secured Loan against own Fixed Deposit Receipt 0 390,280,220 - 540,298,424 -

Fully Secured Loan against Government Securities 0 - - - -

Accrued Interest on Saving Bonds - -

Amount Deposited by B & C class Licensed

Institutions on Youth and Small Self Employed

Fund to be considered as Deprived Sector Lending 0 - - - -

Balance with Domestic Banks and Licensed Financial Institutions 20 16,455,699 3,291,140 495,424,928 423,564,986

Fully Secured FDR Loan against Fixed Deposit Receipt

of other Licensed Banks and Financial Institutions 20 - -

Balance with Foreign Banks 20 48,165,445 9,633,089 51,231,422 10,246,284

Money at Call 20 1,017,183,114 203,436,623 370,817,163 74,163,433

Loan against the guarantee of Internationally Rated Banks 20 - - - -

Other Investments with Internationally Rated Banks 20 - - - -

Interbank Lending 20 124,850,000 24,970,000

Investments in Shares, Debentures and Bonds 100 100,000 100,000 100,000 100,000

Other Investments 100 - - - -

Loan, Advances and Bills Purchased/Discounted 100 4,755,568,725 4,755,568,725 3,496,687,771 3,496,687,771

Fixed Assets 100 325,503,055 325,503,055 229,112,971 229,112,971

Other Interest Receivable less interest Suspense 100 6,799,574 6,799,574 - -

All other Assets (except Advance Income Tax) 100 71,758,154 71,758,154 89,576,040 89,576,040

Excess Real Estate/Residential Home Loan 150 - - - -

total (A) 7,291,140,152 5,401,060,360 5,890,032,357 4,323,451,485off Balance Sheet items Bills Collection 0 - - - -

Forward Foreign Exchange Contract 10 - - - -

Letters of Credit with Maturity of less than 6 months (Full Value) 20 - - - -

Guarantees provided against Counter Guarantee

of Internationally Rated Foreign Banks 20 - - - -

Letters of credit with maturity of more than 6 months (Full Value) 50 - - - -

Bid Bond, Performance Bond and Underwriting Commitment 50 141,440,089 70,720,045 102,440,715 51,220,358

Credit Sale on the Condition of Re-Purchase 50 -

Advance Payment Guarantee 100 58,286,919 58,286,919 36,926,150 36,926,150

Financial and Other Guarantee 100 28,373,485 28,373,485 37,381,440 37,381,440

Irrevocable Loan Commitment 100 - - - -

Contingent Liability in respect of Income Tax 100 - - - -

All other contingent Liabilities 100 91,836,915 91,836,915 133,147,925 133,147,925

Unpaid Guarantee Claims 100 -

total (B) 319,937,408 249,217,363 309,896,230 258,675,873total risk Weighted Assets 7,611,077,560 5,650,277,724 6,199,928,587 4,582,127,357

table of risk Weighted Assets Statement As on July 16, 2010 (Ashad 32, 2067)

ScheduLe 4.30 (A)


ScheduLe 4.31

62

Principal indicators (At least for previous 5 years)

PArticuLArS iNdicAtorS fY 2062/63 fY 2063/64 fY 2064/65 fY 2065/66 fY2066/67

1 Percent of Net Profit/Gross Income Percent 13.27 14.35 9.10 14.55 13.07

2 Earning Per Share Rs. 3.92 5.86 5.60 7.53 10.63

3 Market Value Per Share Rs. - 450 1,430 783 497

4 Price Earning Ratio Percent - 76.81 255.57 103.94 46.74

5 Dividend (Including Bonus) on Percent - - - - -

Share Capital

6 Cash Dividend on Share Capital Percent - - - - -

7 Interest Income/Loan & Advances Percent 6.81 6.73 6.60 8.88 10.74

8 Staff Expenses/Total Operating Expenses Percent 17.54 11.97 8.95 8.14 39.01

9 Interest Expenses / Total Percent 3.37 3.11 4.08 4.79 6.43

Deposit and Borrowing

10 Exchange Gain/Total Income Percent 0.12 - 0.93 2.18 0.85

11 Staff Bonus/Total Staff Expenses Percent 14.52 23.74 18.78 33.44 29.27

12 Net Profit/Loan and Advances Percent 1.16 1.25 0.85 1.45 1.67

\13 Net Profit/Total Assets Percent 0.87 0.75 0.56 0.99 1.18

14 Total Credit/Deposit Percent 101.15 82.40 87.94 91.39 89.33

15 Total Operating Expenses/Total Assets Percent 4.72 3.75 4.74 5.10 0.93

16 Adequacy of Capital Fund - -

on Risk Weighted Assets

a) Core Capital Percent 25.86 24.50 16.76 18.10 15.56

b) Supplementary Captial Percent 0.86 1.07 0.97 0.91 0.94

c) Total Capital Fund Percent 26.72 25.58 17.73 19.02 16.51

17 Liquidity (CRR) Percent 29.14 23.90 17.61 11.97 28.19

18 Non-Performing Loan/Total Credit Percent - - 1.51 0.18 0.08

19 Weighted Average Interest Rate Spread Percent 4.59 3.87 3.65 3.95 4.01

20 Book Net-Worth Rs. 233,040,612 347,766,894 431,056,364 869,560,886 881,194,758

21 Total Number of Shares Nos. 2,240,000 3,200,000 3,840,000 7,667,658 8,064,000

22 Total Staff Nos. 31 39 61 120 149

23 Others - - - - - -


Sanima bikaS bank Limited annuaL RepoRt 2009/10 63

1. General InformationSanima Bikas Bank Limited (“The Bank”) is a limited liability

company domiciled in Nepal. The address of its registered

office is at Nagpokhari, Naxal, Kathmandu, Nepal.

The Bank has registered with the Office of the Company

Registrar on 16 Ashad , 2061 obtained license from Nepal

Rastra Bank on 11 Marg 2061 and came into operation with

effective from 21 Mangsir 2061 to conduct banking business

in Nepal. The financial statements were authorised for issue by

the Board of Directors and approved by the Central Bank of

Nepal (Nepal Rastra Bank-‘NRB’).

2. Summary of Significant Accounting PoliciesThe principal accounting policies applied in the preparation

of these financial statements are set out below. These policies

have been consistently applied throughout the period, unless

otherwise stated. The financial statements are prepared on

historical cost convention except where otherwise stated.

3. Statement of ComplianceThe financial statements has been prepared in accordance

with Nepal Accounting Standards (“NAS”) issued by the

Nepal Accounting Standard Board except otherwise stated,

Generally Accepted Accounting Principles (“GAAP”), Bank

and Financial Institutions Act, 2063 (“BAFIA”) and other

requirements of NRB Directives and in conformity with the

Companies Act, 2063.

4.Basis of PreparationThe financial statements are presented in Nepalese Rupees,

rounded to the nearest Rupee. Financial Statements are

prepared on the historical cost basis. The preparation of

financial statements in conformity with NAS and GAAP

requires the use of certain critical accounting estimates. It also

requires management to exercise judgement in process of

applying the Bank’s accounting policies.

The Bank follows accrual system of accounting for the

preparation of financial statements except where otherwise

stated. All the formats of the financial statements are in

accordance with the NRB Directives.

5. Interest IncomeInterest income on loans and advances is recognised on

cash basis as per the Nepal Rastra Bank Directive, although

this practice is not in accordance with NAS - 7 (Revenue),

which prescribes that the revenue should be recognised on

accrual basis. The practice followed by the Bank (as per NRB

Directives) is more conservative.

Interest income on Investments is accounted for on accrual basis.

Significant Accounting Policies Schedule 4.32

6. Commission IncomeAll the commission incomes are accounted for on accrual

basis. However, it is the practice of the Bank to recognize

income on cash basis for charges up to Rs. 50,000 for service

period of more than a financial year.

7. Dividend IncomeDividend on equity shares will be recognised when the right

to receive dividend is established. However the bank has no

dividend income till date.

8. Foreign Exchange TransactionsForeign currency assets and liabilities are translated into

Nepalese Rupees at the prevailing mid exchange rate ruling

on the Balance Sheet date.

Income realised from the difference between buying and

selling rates of Foreign Exchange is accounted for on a daily

basis and shown as “Trading Gain” under “Exchange Gain” in

Schedule - 4.22.

Gains/ losses arising due to fluctuation in exchange rate

of different foreign currencies is accounted for on a daily

basis and shown as “Revaluation Gain”, 25 percent of such

revaluation gain is transferred to Exchange Fluctuation Fund

through Profit and Loss Appropriation Account as per Nepal

Rastra Bank Directives.

9. Interest ExpenseInterest on deposit liabilities and borrowings is accounted for

on accrual basis.

10. Loans and Advances including Bills PurchasedLoans and advances, overdrafts and bills purchased include

direct finance provided to customers. These include

overdrafts, term loans, consumer loans etc. All credit exposures

are subject to regular review and are graded according to

the level of credit risk and are classified as per NRB Directives.

Loans and advances, overdrafts and bills purchased are shown

net of mandatory provisions according to the NRB Directives.

11. Staff Loans and AdvancesLoans and advances granted to staff are shown under other

assets Schedule-4.16.

12. Loan Loss ProvisionThe provision for possible losses for loans and advances and

bills purchased are provided at the rates between 1 percent to

100 percent according to the classification of such risk assets

as per Nepal Rastra Bank Directives.

Additional provisions for possible losses for loans and

advances are made as and when the need arises as per NRB

Directives.

13. Write OffUnrecoverable loans and advances are written off in

accordance with the write off By-laws approved by the Board

of Directors and NRB, without prejudice to Bank’s right to

recovery. During this period, the Bank has not written off any

amount of loans and advances.

14. InvestmentsInvestments are classified as held for trading, held to maturity

and available for sale.

A. held for trading:Investments that are made for the purpose of generating

profit from short term fluctuations in price are classified under

this category. These investments are marked to market and

differences reflected in the profit and loss account.

B. held to maturity:The investments made with positive intent and ability of

the bank to hold till maturity is classified as held to maturity

investments. The held to maturity investments are valued

at amortized cost i.e. the cost price less any impairments (if

applicable). The impairments are included in the profit and

loss accounts for the period.

c. Available for Sale:All other investments that are neither "held for trading" nor

"held to maturity" are classified under this category. These

investments are marked to market on a regular basis and the

difference adjusted through reserves.

All Investments are subject to regular review as required by

Nepal Rastra Bank Directives.

15. Fixed Assets and Depreciationa. Fixed assets are stated at cost less accumulated depreciation

and impairment losses.

b. Assets with a value less than Rs. 2,000 are charged off as a

revenue expense irrespective of its useful life in the year of

purchase.

c. Depreciation is charged to Profit & Loss Account on

Diminishing Balance Method as policy adapted by the Bank

and rates applied are as per Income Tax Act, 2058.

d. Advance given for the construction and acquisition of

fixed assets are shown as Advance for the Capital Work in

Progress.

e. Lease hold improvements has been capitalised at cost

and amortised over the lease periods. The amount of

amortisation is charged to Profit and Loss Account.

16. Non-Banking AssetsNon-Banking Assets is valued at lower of loan amount or fair

market value of the assets acquired. Provisions for NBA will

be made in accordance with the Nepal Rastra Bank Directives.

However the bank has not acquired any Non-Banking Assets

till date.

17. Software ExpensesAcquired computer software licences are capitalised on the

basis of cost incurred to acquire and bring to use the specific

software. The costs are amortised over their estimated useful

lives (i.e. estimated useful life of software is considered 5

years.)

18. Employee Benefits

A. Provident fund Provident fund contribution is recognised as expenses

and deposited into the approved retirement fund

(Employee Provident Fund Office).

B. Accumulated Leave Accumulated leave payable to staff is recognised on

accrual basis as per the Employee Service Regulation of

the Bank.

c. Gratuity Gratuity liability of staff is accrued only after completion

of a fixed period of full time employment with the Bank in

accordance with the Employee Service Regulation and is

not funded.

19. Stationery StockStationery stock at the year end is accounted for at cost. For

the purpose of valuation of the same FIFO method has been

applied.

20. Income Tax Provision for taxation has been made on the basis of the

Income Tax Act, 2058 and amendments thereto.

21. Deferred Tax Deferred taxes are accounted using the asset and liability

method. Deferred tax assets and liabilities are recognized

for the future tax consequences attributable to temporary

differences between the financial statement carrying amounts

of existing assets and liabilities, and their respective tax bases.

Deferred tax assets and liabilities are measured using tax rates

expected to apply to taxable income in the years in which

those temporary differences are expected to be recovered

or settled based on the laws that have been enacted or

subsequently enacted by the reporting date.

Deferred tax assets arising from temporary difference and

unused tax losses are recognised to the extent there is virtual

certainty that sufficient future taxable income will be available

against which such deferred tax assets can be realised

(according to NAS-09 “Income Taxes”).

22. Previous Year’s FiguresPrevious year's figures are grouped or regrouped wherever

necessary in order to facilitate comparison.


Notes to Accounts Schedule 4.33

1. Interest Income and Interest SuspenseThe interest receivable on loans and advances as at 16 July

2010 has been transferred to interest suspense account as

interest income can be recognized only when realised in cash

as per NRB Directives.

2. Provision for Staff BonusStaff bonus has been calculated and provided at 10% of net

profit before tax.

3. Staff Housing FundNo staff housing fund has been created by the Bank as

required under the Labour Act, 2048. However the bank

has provided housing loan facility to its employee as per

employee service regulation.

4. General Reserve20 percent of the net profit is transferred to General Reserves

as per the requirement of BAFIA 2063.

5. Calls in ArrearsThere are no Calls in Arrears at the year end.

6. Investment in Share Capital of other Corporate The Bank has made investment of Rs. 100,000 in Share Capital

of Nepal Clearing House Company Pvt. Ltd. The Bank has

made investment with positive intent and ability to hold until

maturity and valued at Cost. There is no any investment in

share capital of other corporate entity at the Balance Sheet

date i.e. 16 July 2010.

7. Reconciliation StatusThe Bank has carried out the reconciliation between Inter

Branch Transactions on daily basis. However reconciliation of

the local and foreign bank and financial institution accounts

has been done on monthly basis. The difference has been

identified, reviewed and reconciled and same has been or will

be adjustment in due course of business.

recoNciLiAtioN StAtuS totAL AmouNt < 3 moNthS >3<9 moNthS >9 moNthS

Branch Reconciliation 2 2 Nil Nil

Agency Accounts 21,874 4,985 1,595 15,294

8. Summary of Loans and Advances Disbursed, Recovered and Principal & Interest Written-off:

PArticuLArS AmouNt (rS.)

Opening Balance 4,036,986

Loans Disbursed 3,549,112

Loans Recovered 2,440,249

Principal Written off Nil

Interest Written off Nil

closing outstanding 5,145,849

Rs’000

Rs’000


9. Summary Status of the Deposit Liabilities

PArticuLArS curreNt YeAr PreviouS YeAr chANGe rS. NrS. NrS.

Current Deposit 130,913 89,678 41,235

Margin Deposit 6,074 2,983 3,091

Saving Deposit 2,070,385 1,570,641 499,744

Call Deposit 682,472 526,621 155,851

Fixed Deposit 2,870,651 2,227,582 643,069

total 5,760,495 4,417,505 1,342,990

PArticuLArS rAte (%)

Average Rate of Return on Loans & Advances 11.72

Average Rate on Deposits (LCY) 7.71

Net Spread 4.01

PArticuLArS cAPitALized Amortized duriNG BALANce AmouNt the YeAr AmouNt

Computer Software 6,528 1,263 5,265

total 6,528 1,263 5,265

PArticuLArS LoANS & dePoSit & coNtiNGeNt AdvANceS BorroWiNGS LiABiLitieS

Total amount as on 16.07.2010 (2067.03.32) 5,145,849 6,205,295 228,100

Highest Exposure to Single Party 209,500 344,800 50,000

highest exposures (%) to Single party 4.07% 5.56% 21.92%

Rs’000

Rs’000

Rs’000

Rs’000

10. Weighted Average Interest Rate Spread

11. Particulars of Expenses yet to be Expensed-off

12. Summary of Concentration of Exposure

Funded and non-funded facilities and sector wise loans are within the limits prescribed by NRB Directives.

Summary of concentration of exposures:

Note:

1. The amount of highest exposure on Loan and Advance to single party is Loan against Own Fixed deposit Receipt

2. The amount of highest exposure on deposit & Borrowings is refinance from Nepal Rastra Bank.

3. Non funded facility does not include the amount of capital commitment for the computation of maximum exposure to single

party.


13. Classification of Assets and Liabilities based on Maturity

S. N. PArticuLArS 1-90 91-180 181-270 271-365 over totAL dAYS dAYS dAYS dAYS 1 YeAr

Assets 1 Cash Balance 791 - - - - 791

2 Balance with Banks and Financial Institutions 1,493 - - - - 1,493

3 Investment in Foreign Banks - - - - 461 461

4 Call money 10,172 10,172

5 Nepal Government Securities - - - - - -

6 Nepal Rastra Bank Bonds 1,645 479 554 549 480 3,707

7 Inter Bank/Financial Institution Lending - 874 - 374 1,249

8 Loans & Advances 12,101 9,958 7,918 2,374 19,084 51,435

9 Interest receivable 165 - - - - 165

10 Reverse Repo - - - - - -

11 Receivable from other organization - - - - - -

12 Payment facilities of S. No. 20, 21, and 22 - - - - -

13 Others - - - - - -

total Asset 26,368 11,311 8,472 2,923 20,399 69,473 Liabilities

14 Current Deposits* 20,704 - - - - 20,704

15 Savings Deposits 8,159 - - - - 8,159

16 Fixed Deposits 5,681 4,946 7,446 7,479 3,154 28,706

17 Debentures - - - - - -

18 Borrowing: - - - - - -

Call - - - - - -

Inter bank/ financial institution - - - 1,000 1,000

Refinancing - 3,448 - - - 3,448

Others - - - - - -

19 Other Liabilities - - - - - -

Sundry creditors - - - - - -

Bills payable - - - - - -

Interest Payable 58 - - - - 58

Facilities - - - - - -

Others - - - - - -

20 Obligation payable to other organization - - - - - -

21 Consumed permitted facilities - - - - - -

22 Guarantee 2,281 - - - - 2,281

23 Repo - - - - - -

24 Payment made to facility of S. No. 11 - - - - - -

25 Others - - - - - -

total Liabilities 34,580 4,946 7,446 7,479 3,154 57,605 Net Financial Assets 8,212 6,365 1,026 (4,556) 17,245 11,686

cumulative total Assets 8,212 (1,847) (821) (5,377) 11,686 -

*Call & Margin Deposit


Rs in Lacs

14. Details of Non Banking Assets

The Bank has not taken possession of any assets taken as security against the loans and advances

15. Details of Leasehold Assets Amortisation

coSt Price Amortized Amortized totAL Net BooK uP to LASt duriNG Amortized vALue YeAr the YeAr AmouNt

34,109 4,663 1,636 6,299 27,810

Rs’000

Rs’000

Rs’000

16. Tax liability reconciliationReconciliation of profit as per financial statement is reconciled with taxable profit to compute tax liability

as follows:

PArticuLArS AmouNt

Profit before tax as per Profit & Loss Account 125,399Add: Adjustments for Depreciation and amortization as per books of accounts 14,111

Provision for Gratuity 1,644

Provision for Leave encashment 1,063

Donation not allowable 32

total 16,850Less: Adjustments for Depreciation as per Income Tax Act 18,468

total & Amortization 18,468taxable Profit as per income tax Act , 2058 123,782

corporate income tax @ 30% 37,135

17. Deferred Tax Assets/ (Liability)

Deferred tax assets and liabilities have been computed in accordance with NAS - 9, Income Taxes from

16 July 2009 and are attributable to the following:

PArticuLArS AS Per BooKS tAx BASe temPorArY of AccouNtS differeNce

Fixed Assets 64,809 61,026 3,783

Leasehold Assets & Software 33,075 29,709 3,366

Staff Gratuity (2,600) - (2,600)

Provision for Staff Leave (2,609) - (2,609)

Net temporary differences 1,940deferred tax Liability (Asset) as at Ashad end 2067 @ 30% 582

deferred tax Liability/ (Asset) till Ashad end 2066 551

deferred tax expense/ (income) for current Year 31

Deferred Tax Liability as of Ashad end 2067 (16 July 2010) is Rs. 582,421. NPR 31,064 has been recognized as deferred tax

expense in Profit and Loss Account in the current year.


Rs’000

Rs’000

18. Provision for Gratuity The bank has provided for future payment of gratuity liability in full as per its personnel policy. As per Employee Service Regulation of

SANIMA, in respect of employees who have completed 3 years of service but less than 5 years and employees who have completed 5

years of service but less than 10 years, an additional provision of Rs 1,644,231 has been made during the year.

19. Capital Commitment The bank has entered into agreement for Rs 166,434,905 with the United Builders and Engineers Pvt. Ltd (The Contractor) to construct

“Sanima Bhawan” and as on balance sheet date Rs 61,283,199 is pending for capitalization. The Bank has provided total advance of

Rs 13,314,791 till date to the contractor and remaining amount of Rs 91,836,915 has been shown under contingent liability as Capital

Commitment.

20. During FY 2008/09 Bank has issued right share in the ratio of one for every one share held. In the process, 12,342 numbers of

ordinary shares were not subscribed. Such unsubscribed shares were sold to public through public notice and Rs. 8,082,103 has been

received from such sale. Amount to the extent of face value of share i.e. 1,234,200 has been shown under Share Capital and remaining

amount of Rs. 6,847,903 has been shown under Share Premium as per NRB Directive No 10.

21. Provision for Income Tax includes additional tax liability of Rs. 2,495,654 pertaining to FY 2064/65 and FY 2065/66. The total

amount has been charged to Profit and Loss Account.

22. Related Parties22.1 The Bank has entered into financial transactions with the following related parties where directors have financial interest.

reLAted PArtY NAture of trANSActioN thiS YeAr PreviouS YeAr

Kantipur Television Pvt. Ltd Deposit 188 10

Loan* 10,900 10,900

Medicare Hospital & Research Centre Pvt. Ltd. Deposit 9,654 18

Sanima Hydro & Engineering Pvt. Ltd. Deposit 5,185 10

Sanima Life Insurance Company Ltd** Deposit 2,067 35

Sanima Insurance Company Ltd** Deposit 667 726

Sanima Foundation Deposit 10 -

Sanima Mai Hydro Power Pvt. Ltd. Deposit 27,636 -

Sanima Pvt. Ltd. Deposit 1 -

Tamor Sanima Energy Pvt. Ltd. Deposit 10 10

Khumbu Carpet Industries Deposit 40 39

PArticuLArS AmouNt outStANdiNG AS of 16 JuLY 2010

Loans to Promoter Shareholders 1,120

*Loan against Fixed Deposit Receipt of own Bank.

**Pending grant of license from Insurance Board the company have yet to commence operation

22.2 The promoters have obtained the following advances from the bank against the collateral of their fixed deposit

maintained with the Bank:



23. Operating Lease CommitmentThe bank has taken various properties on cancellable long term lease. Since the bank possesses the right to terminate the said

lease before its maturity by giving a notice of specified period, the future liability the Bank is limited to lease payable for notice

period only.

24. Total of key management personnel compensation (Disclosure as per NAS-16):

comPeNSAtioN chief other KeY remArKS executive mANAGemeNt officer PerSoNNeL

Short term employee benefits 4,211 5,113 Other Key management personnel include

Deputy General Manager and two Managers.

Post employment benefits NIL

Terminal benefits 2,047 452 The bank has a policy of payment of gratuity and

leave encashment. Refer note 18 and 25.

Share based payments NIL

Other long term benefits NIL Refer additional disclosures below.

Additional information:

a) Key management personnel are also eligible for the following benefits:

1. Bonus out of profit as per Bonus Act.

2. Housing loans and advances as per Housing Loan Scheme of the Bank.

3. CEO is entitled to the use of Bank’s car.

b) The Board of Directors were paid Rs. 733,000 meeting fee during the year.

25. The bank has accounted for staff leave liability to its confirmed employees on accrual basis. Total leave liability as on 16 July

2010 is Rs. 2,608,971. Total leave provision of Rs. 1,546,222 accumulated up to 16 July 2009 has been charged to opening retained

earning and incremental provision of Rs. 1,062,749 for FY 2009/10 has been charged to Profit and Loss Account. This has resulted

into reduction in operating profit by the same amount.

26. Proposed DividendDividend is provided at 10% of Paid up Capital as proposed by the Board of Directors which is pending approval by Annual

General Meeting.


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comparison of unaudited and Audited financial Statements as of fY2066/67 (2009/10)

S.N. PArticuLArS AS Per uNudited AS Per Audited vAriANce reASoNS for vAriANce

fiNANciAL fiNANciAL

StAtemeNtS StAtemeNtS iN AmouN iN %

1 total capital and Liabilities (1.1 to 1.7) 7,238,000 7,238,559 (559) (0.01)

1.1 Paid Up Capital 806,400 806,400 - -

1.2 Reserve and Surplus 156,329 74,795 81,535 52.16 Increase in Profit and proposed

appropriation of Dividend.

1.3 Debenture and Bond - - -

1.4 Borrowings 444,800 444,800 - -

1.5 deposits (a+b) 5,760,495 5,760,495 - -

a. Domestic Currency 5,541,427 5,541,427 - -

b. Foreign Currency 219,069 219,069 - -

1.6 Proposed and Payable Dividend 80,640 (80,640) - As per proposed appropriation.

1.7 Income Tax Liability - - -

1.8 Other Liabilities 69,975 71,429 (1,454) (2.08) Decrese in provision for Staff bonus

and income tax.

2 total Assets (2.1 to 2.7) 7,238,000 7,238,559 (559) (0.01)

2.1 Cash & Bank Balance 228,302 228,438 (136) (0.06) Adjustment of interest.

2.2 Money at Call and Short Notice 1,017,235 1,017,183 52 0.01 Adjustment of interest.

2.3 Investments 495,610 495,610 - -

2.4 Loans and Advances 5,092,099 5,092,099 - -

a. Real Estate Loan 890,935 890,935 - -

b. Home/Housing Loan 853,228 853,228 - -

c. Margin Type Loan 101,530 101,530 - -

d. Term Loan 503,732 503,732 - -

e. Overdraft Loan/TR Loan/WC Loan 1,657,339 1,657,339 - -

f. Others 1,085,335 1,085,335 - -

2.5 Fixed Assets 325,503 325,503 - -

2.6 Non Banking Assets - - -

2.7 Other Assets 79,251 79,726 (475) (0.60)

3 Profit and Loss Account

3.1 Interest Income 615,526 615,644 (119) (0.02) Adjustment of interest of Call

accounts.

3.2 Interest Expense 399,298 399,298 - -

A. Net interest income (3.1-3.2) 216,228 216,346 (119) (0.05)

3.3 Fees, Commission and Discount 3,908 3,908 - -

3.4 Other Operating Income 30,740 30,740 - -

3.5 Foreign Exchange Gain/Loss (Net) 5,607 5,607 - -

B. total operating income (A+ 3.3+3.4+3.5) 256,483 256,602 (119) (0.05)

3.6 Staff Expenses 41,791 42,845 (1,054) (2.52) Provision for Staff Leave Liability.

3.7 Other Operating Expenses 66,964 66,997 (33) (0.05) Adjustment of year end provisions.

c. operating Profit Before 147,728 146,760 968 0.66

Provision (B. -3.6-3.7)

3.8 Provision for Possible Losses 11,352 11,352 - -

d. operating Profit (c.-3.8) 136,376 135,408 968 0.71

3.9 Non Operating Income/Expenses (Net) 34 34 - -

3.1 Write Back of Provision For Possible Loss 2,497 2,497 - -

e. Profit from regular 138,907 137,939 968 0.70

Activities (d.+3.9+3.10)

3.11 Extraordinary Income/Expenses (Net) - - - -

f. Profit before Bonus and taxes (e. +3.11) 138,907 137,939 968 0.70

3.12 Provision for Staff Bonus 12,628 12,540 88 0.70

3.13 Provision For Tax 41,193 39,661 1,532 3.72 Provision as per Income Tax Act, 2058.

G. Net Profit/(Loss) (f. -3.12-3.13) 85,086 85,738 (652) (0.77)

ScheduLe 4.35



unaudited financial results (quarterly) As at Fourth Quarter (16/7/2010) of the Fiscal Year 2009/2010 (2066/67)

ScheduLe 4(A)

Figure in ‘000

S.N. PArticuLArS thiS quArter PreviouS correSPoNdiNG eNdiNG quArter eNdiNG PreviouS YeAr (32.03.2067 / (31.12.2066 / quArter eNdiNG 16.07.2010) 13.04.2010) (31.03.2066 / 15.07.2009)

1 total capital and Liabilities (1.1 to 1.7) 7,238,000 6,693,962 5,845,136 1.1 Paid Up Capital 806,400 806,400 766,766

1.2 Reserve and Surplus 156,329 129,120 102,795

1.3 Debenture and Bond - - -

1.4 Borrowings 444,800 376,000 506,000

1.5 Deposits (a+b) 5,760,495 5,291,191 4,417,504

a. Domestic Currency 5,541,427 4,966,362 3,847,849

b. Foreign Currency 219,069 324,829 569,655

1.6 Income Tax Liability - 1,367 -

1.7 Other Liabilities 69,975 89,885 52,071

2 total Assets (2.1 to 2.7) 7,238,000 6,693,962 5,845,136 2.1 Cash & Bank Balance 228,302 462,897 632,814

2.2 Money at Call and Short Notice 1,017,235 480,893 370,817

2.3 Investments 495,610 449,348 530,725

2.4 Loans and Advances 5,092,099 4,892,287 3,992,091

a. Real Estate Loan 890,935 952,686 1,137,399

b. Home/Housing Loan 853,228 865,592 590,494

c. Margin Type Loan 101,530 113,552 148,924

d. Term Loan 503,732 429,466 315,406

e. Overdraft Loan/TR Loan/WC Loan 1,657,339 1,440,605 886,982

f. Others 1,085,335 1,090,386 912,886

2.5 Fixed Assets 325,503 258,169 229,113

2.6 Non Banking Assets - -

2.7 Other Assets 79,251 150,369 89,576


4 rAtioS At the eNd At the eNd At the eNd of of thiS of PreviouS correSPoNdiNG quArter quArter PreviouS YeAr quArter

4.1 Capital Fund to RWA 17.64% 18.89% 22.12%

4.2 Non Performing Loan (NPL) to Total Loan 0.08% 0.11% 0.18%

4.3 Total Loan Loss Provision to Total NPL 1233.12% 1068.79% 635%

4.4 Cost of Fund (LCY) 9.38% 7.78% 5.94%

4.5 Credit to Deposit Ratio (Calculated as per NRB Directive) 79.14% 83.86% 86.31%

3 Profit ANd LoSS AccouNt uP to thiS uP to PreviouS uP to correSPoNdiNG quArter quArter PreviouS YeAr quArter

3.1 Interest Income 615,526 425,912 358,553

3.2 Interest Expense 399,298 270,266 235,896

A. Net interest income (3.1-3.2) 216,228 155,646 122,657 3.3 Fees, Commission and Discount 3,908 2,315 4,252

3.4 Other Operating Income 30,740 22,669 25,565

3.5 Foreign Exchange Gain/Loss (Net) 5,607 5,816 8,480

B. total operating income (A+ 3.3+3.4+3.5) 256,483 186,446 160,954 3.6 Staff Expenses 41,791 28,711 24,288

3.7 Other Operating Expenses 66,964 51,804 38,020

c. operating Profit Before Provision (B. -3.6-3.7) 147,728 105,931 98,646 3.8 Provision for Possible Losses 11,352 11,062 19,945

d. operating Profit (c.-3.8) 136,376 94,869 78,701 3.9 Non Operating Income/Expenses (Net) 34 - -

3.1 Write Back of Provision For Possible Loss 2,497 - 10,651

e. Profit from regular Activities (d.+3.9+3.10) 138,907 94,869 89,352 3.11 Extraordinary Income/Expenses (Net) -

f. Profit before Bonus and taxes (e. +3.11) 138,907 94,869 89,352 3.12 Provision for Staff Bonus 12,628 8,624 8,123

3.13 Provision For Tax 41,193 25,873 23,469

G. Net Profit/(Loss) (f. -3.12-3.13) 85,086 60,372 57,760

unaudited financial results (quarterly) continued......As at Fourth Quarter (16/7/2010) of the Fiscal Year 2009/2010 (2066/67)

ScheduLe 4(A)


Note.

w w w. s a n i m a b a n k . c o m