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Mr. Devi Prakash BhattachanChairman
Mr. Puspa Bahadur PradhanDirector
Mrs. Anju AdhikariDirector
Mr. Ramesh Singh KhadkaDirector
Mrs. Ambika Sharma LamichhaneDirector
Mr. Shankar KalikotaDirector
Mr. Amit BhandariCompany Secretary
Board of Director Management Team
Mr. Ashok ShrechanChief Executive Officer
Mr. Mani Ram PokhrelChief Business Officer
Mr. Bamdev DahalChief Project Officer
Mr. Dinesh ThakaliChief Operating Officer
Mr. Niraj LamsalChief Credit Officer
Mr. Ashok KhadkiChief Marketing Officer
11 7 T H A N N U A L R E P O R T
11 7 T H A N N U A L R E P O R T
1 7 T H A N N U A L R E P O R T2
31 7 T H A N N U A L R E P O R T
LiabilitiesDue to Bank and 4.17 - 215,240,103 - 215,240,103 -Financial InstitutionsFinancial InstitutionsDue to Nepal Rastra Bank 4.18 702,208,536 37,146,500 702,208,536 37,146,500 -Derivative Financial Instruments 4.19 45,846,461 - 45,846,461 - -Deposits from Customers 4.20 97,247,898,047 81,291,139,111 97,259,664,942 81,349,539,827 60,940,868,320Borrowings 4.21 - - - - 15,243,363Current Tax Liabilities 4.9 - - - - -Provisions 4.22 23,453,428 23,593,106 23,324,554 23,324,554 23,324,554Deferred Tax Liabilities 4.15 387,174,766 349,582,267 387,174,766 349,582,267 -Other Liabilities 4.23 2,373,336,355 1,360,261,007 1,597,701,215 1,299,239,327 1,122,186,821Debt Securities Issued 4.24 - - - - -Subordinated Liabilities 4.25 - - - - -Total Liabilities 100,779,917,593 83,276,962,094 100,015,920,474 83,274,072,578 62,101,623,059EquityShare Capital 4.26 8,233,948,524 5,881,402,224 8,233,948,524 5,881,402,224 5,881,402,224Share Premium 151,947,990 117,364,483 151,947,990 117,364,483 119,939,338Retained Earnings 760,722,784 1,884,258,987 773,629,731 1,882,122,101 (1,416,499,960)Reserves 4.27 3,410,720,204 1,470,014,862 3,410,720,204 1,470,014,862 3,098,307,325Total Equity Attributable 12,557,339,501 9,353,040,557 12,570,246,448 9,350,903,671 7,683,148,927to Equity HoldersNon Controlling Interest 99,973,387 45,827,265Total Equity 12,657,312,888 9,398,867,822 12,570,246,448 9,350,903,671 7,683,148,927Total Liabilities and Equity 113,437,230,480 92,675,829,914 112,586,166,923 92,624,976,248 69,784,771,981Contingent Liabilities 4.28and CommitmentsNet Assets Value per share 152.51 159.03 152.66 158.99 130.63
Particulars Note Asar end, Asar end, Asar end, Asar end, 1st Sharawan2075 2074 (Re-stated) 2075 2074 (Re-stated) 2073 (Re-stated)
Bank Group
Lekh Bahadur PunChief Finance Officer
Ashok SherchanChief Executive Officer
Shankar KalikotaDirector
Ramesh Singh KhadkaDirector
Ambika Sharma LamichhaneDirector
Pushpa Bahadur PradhanDirector
Devi Prakash BhattachanChairman
CA Binaya Prakash ShresthaK.A.S. Associates
Chartered Accountants
Date: 6th January, 2019Kathmandu, Nepal
Anju AdhikariDirector
As per our report of even date
Prabhu Bank LimitedStatement of Financial Position
As on 32 Asar 2075
AssetsCash and Cash Equivalents 4.1 13,925,499,160 6,559,505,893 13,155,090,517 6,543,129,573 6,622,750,207Due from Nepal Rastra Bank 4.2 6,172,041,021 9,120,743,031 6,172,041,021 9,120,743,031 7,505,153,799Placement with Bank and 4.3 2,215,410,511 1,908,275,000 2,215,410,511 1,908,275,000 912,050,000Financial InstitutionsDerivative Financial Instruments 4.4 - 22,823,158 - 22,823,158 21,078,426Other Trading Assets 4.5 150,909,909 58,986,506 - - -Loans and Advances to BFIs 4.6 3,181,808,776 1,794,591,453 3,181,808,776 1,794,591,453 3,173,765,526Loans & Advances to Customers 4.7 72,990,231,929 59,702,056,935 72,990,231,929 59,702,056,935 41,303,756,166Investment Securities 4.8 8,035,890,509 8,880,877,691 8,035,890,509 8,880,877,691 4,915,008,949Current Tax Assets 4.9 43,049,281 35,460,803 38,573,248 32,911,140 96,081,774Investment in Subsidiaries 4.10 - - 116,960,880 45,560,880 -Investment in Associates 4.11 - - - - -Investment Property 4.12 464,795,000 515,547,750 464,795,000 515,547,750 116,786,744Property and Equipment 4.13 2,113,519,292 2,142,161,355 2,107,743,391 2,135,117,059 2,118,007,312Goodwill and Intangible Assets 4.14 18,091,081 14,855,313 17,231,105 14,377,421 18,016,656Deferred Tax Assets 4.15 10,967,811 1,550,234 - 284,721,778Other Assets 4.16 4,115,016,199 1,918,394,791 4,090,390,035 1,908,965,158 2,697,594,644Total Assets 113,437,230,480 92,675,829,914 112,586,166,923 92,624,976,248 69,784,771,981
Particulars Note Asar end, Asar end, Asar end, Asar end, 1st Sharawan2075 2074 (Re-stated) 2075 2074 (Re-stated) 2073 (Re-stated)
Bank Group
1 7 T H A N N U A L R E P O R T4
Prabhu Bank LimitedStatement of Profit or Loss
From Shrawan 1, 2074 to Asar 32, 2075Bank Group
Interest Income 4.29 8,253,658,712 5,211,699,777 8,244,597,451 5,200,759,092Interest Expense 4.30 5,420,868,494 2,955,664,068 5,426,594,895 2,957,637,155Net Interest Income 2,832,790,218 2,256,035,709 2,818,002,555 2,243,121,937Fee and Commission Income 4.31 614,140,670 520,122,723 614,140,670 520,122,723Fee and Commission Expense 4.32 70,963,179 55,040,284 70,963,179 55,040,284Net Fee and Commission Income 543,177,491 465,082,440 543,177,491 465,082,440Net Interest, Fee and 3,375,967,708 2,721,118,148 3,361,180,046 2,708,204,376Commisson IncomeNet Trading Income 4.33 315,248,814 205,258,878 341,153,748 192,666,836Other Operating Income 4.34 63,197,500 113,368,084 54,690,557 130,169,466Total Operating Income 3,754,414,023 3,039,745,111 3,757,024,351 3,031,040,678Impairment Charge/ (Reversal) 4.35 (154,551,213) (1,503,433,280) (154,551,213) (1,503,433,280)for Loans and Other LossessNet Operating Income 3,908,965,236 4,543,178,390 3,911,575,564 4,534,473,958Operating ExpensePersonnel Expenses 4.36 1,359,221,755 1,133,158,276 1,348,633,800 1,130,094,845Other Operating Expenses 4.37 625,718,338 561,582,545 617,804,888 558,601,312Depreciation & Amortisation 4.38 203,187,781 198,415,838 201,131,342 197,956,338Operating Profit 1,720,837,362 2,650,021,731 1,744,005,534 2,647,821,462Non Operating Income 4.39 6,500,000 50,000 6,500,000 50,000Non Operating Expense 4.40 400,056,190 349,402,333 400,056,190 349,402,333Profit Before Income Tax 1,327,281,171 2,300,669,398 1,350,449,344 2,298,469,129Income Tax Expense 4.41
Current Tax 280,474,914 255,087,711 288,041,198 256,448,007Deferred Tax 95,373,302 555,520,289 95,373,302 555,520,289
Profit for the Period 951,432,955 1,490,061,398 967,034,844 1,486,500,834
Profit Attributable to:Equity-holders of the Bank 959,077,880 1,488,825,229 967,034,844 1,486,500,834Non-Controlling Interest (7,644,925) 1,236,169Profit for the Period 951,432,955 1,490,061,398 967,034,844 1,486,500,834
Earnings per ShareBasic Earnings per Share 12.47 19.87 12.58 19.84Diluted Earnings per Share 12.47 19.87 12.58 19.84
As per our report of even date
Particulars Note Current Previous Current Previous Year Year Year Year
Lekh Bahadur PunChief Finance Officer
Ashok SherchanChief Executive Officer
Shankar KalikotaDirector
Ramesh Singh KhadkaDirector
Ambika Sharma LamichhaneDirector
Pushpa Bahadur PradhanDirector
Devi Prakash BhattachanChairman
CA Binaya Prakash ShresthaK.A.S. Associates
Chartered Accountants
Date: 6th January, 2019Kathmandu, Nepal
Anju AdhikariDirector
1 7 T H A N N U A L R E P O R T4
Prabhu Bank LimitedStatement of Profit or Loss
From Shrawan 1, 2074 to Asar 32, 2075Bank Group
Interest Income 4.29 8,253,658,712 5,211,699,777 8,244,597,451 5,200,759,092Interest Expense 4.30 5,420,868,494 2,955,664,068 5,426,594,895 2,957,637,155Net Interest Income 2,832,790,218 2,256,035,709 2,818,002,555 2,243,121,937Fee and Commission Income 4.31 614,140,670 520,122,723 614,140,670 520,122,723Fee and Commission Expense 4.32 70,963,179 55,040,284 70,963,179 55,040,284Net Fee and Commission Income 543,177,491 465,082,440 543,177,491 465,082,440Net Interest, Fee and 3,375,967,708 2,721,118,148 3,361,180,046 2,708,204,376Commisson IncomeNet Trading Income 4.33 315,248,814 205,258,878 341,153,748 192,666,836Other Operating Income 4.34 63,197,500 113,368,084 54,690,557 130,169,466Total Operating Income 3,754,414,023 3,039,745,111 3,757,024,351 3,031,040,678Impairment Charge/ (Reversal) 4.35 (154,551,213) (1,503,433,280) (154,551,213) (1,503,433,280)for Loans and Other LossessNet Operating Income 3,908,965,236 4,543,178,390 3,911,575,564 4,534,473,958Operating ExpensePersonnel Expenses 4.36 1,359,221,755 1,133,158,276 1,348,633,800 1,130,094,845Other Operating Expenses 4.37 625,718,338 561,582,545 617,804,888 558,601,312Depreciation & Amortisation 4.38 203,187,781 198,415,838 201,131,342 197,956,338Operating Profit 1,720,837,362 2,650,021,731 1,744,005,534 2,647,821,462Non Operating Income 4.39 6,500,000 50,000 6,500,000 50,000Non Operating Expense 4.40 400,056,190 349,402,333 400,056,190 349,402,333Profit Before Income Tax 1,327,281,171 2,300,669,398 1,350,449,344 2,298,469,129Income Tax Expense 4.41
Current Tax 280,474,914 255,087,711 288,041,198 256,448,007Deferred Tax 95,373,302 555,520,289 95,373,302 555,520,289
Profit for the Period 951,432,955 1,490,061,398 967,034,844 1,486,500,834
Profit Attributable to:Equity-holders of the Bank 959,077,880 1,488,825,229 967,034,844 1,486,500,834Non-Controlling Interest (7,644,925) 1,236,169Profit for the Period 951,432,955 1,490,061,398 967,034,844 1,486,500,834
Earnings per ShareBasic Earnings per Share 12.47 19.87 12.58 19.84Diluted Earnings per Share 12.47 19.87 12.58 19.84
As per our report of even date
Particulars Note Current Previous Current Previous Year Year Year Year
Lekh Bahadur PunChief Finance Officer
Ashok SherchanChief Executive Officer
Shankar KalikotaDirector
Ramesh Singh KhadkaDirector
Ambika Sharma LamichhaneDirector
Pushpa Bahadur PradhanDirector
Devi Prakash BhattachanChairman
CA Binaya Prakash ShresthaK.A.S. Associates
Chartered Accountants
Date: 6th January, 2019Kathmandu, Nepal
Anju AdhikariDirector
51 7 T H A N N U A L R E P O R T
Prabhu Bank LimitedStatement of Other Comprehensive Income
From Shrawan 1, 2074 to Asar 32, 2075
Profit for the year 951,432,955 1,490,061,398 967,034,844 1,486,500,834Other Comprehensive Income,Net of Income Taxa) Items that will not be reclassified
to profit or lossGains/(losses) from investment in (159,473,363) 249,758,998 (159,473,363) 250,284,236equity instruments measured at fair valueGains/(losses) on revaluation - -Actuarial gains/(losses) on defined (33,458,500) 12,328,285 (33,129,315) 12,328,285benefit plansIncome tax relating to above items 57,879,559 (78,626,185) 57,780,803 (78,783,756)Net other comprehensive incomethat will not be reclassifiedto profit or loss
b) Items that are or may be reclassifiedto profit or lossGains/(losses) on cash flow hedgeExchange gains/(losses)(arisingfrom translating financialassets of foreign operation)Income tax relating to above itemsReclassify to profit or lossNet other comprehensive incomethat are or may be reclassifiedto profit or loss
c) Share of other comprehensiveincome of associate accounted asper equity methodOther Comprehensive Income for (135,052,304) 183,461,098 (134,821,874) 183,828,765the year, Net of Income Tax
Total Comprehensive Income 816,380,651 1,673,522,496 832,212,969 1,670,329,598for the PeriodTotal Comprehensive Incomeattributable to:
Equity-Holders of the Bank 824,246,969 1,672,466,484 832,212,969 1,670,329,598Non-Controlling Interest (7,866,319) 1,056,012
Total Comprehensive 816,380,651 1,673,522,496 832,212,969 1,670,329,598Income for the Period
Bank GroupParticulars Note Current Previous Current Previous
Year Year Year Year
Lekh Bahadur PunChief Finance Officer
Ashok SherchanChief Executive Officer
Shankar KalikotaDirector
Ramesh Singh KhadkaDirector
Ambika Sharma LamichhaneDirector
Pushpa Bahadur PradhanDirector
Devi Prakash BhattachanChairman
CA Binaya Prakash ShresthaK.A.S. Associates
Chartered Accountants
Date: 6th January, 2019Kathmandu, Nepal
Anju AdhikariDirector
As per our report of even date
1 7 T H A N N U A L R E P O R T6
Prab
hu B
ank
Lim
ited
Stat
emen
t of C
hang
es in
Equ
ityFr
om Sh
raw
an 1
, 207
4 to
Asa
r 32,
207
5 G
roup
Attr
ibut
able
to Eq
uity
-Hol
ders
of t
he B
ank
Bala
nce
at S
hraw
an 0
1, 2
073
5,88
1,40
2,22
412
3,74
8,91
487
5,18
2,01
35,
733,
330
-25
2,48
0,90
4-
(838
,125
,446
)13
3,41
9,70
06,
433,
841,
638
6,43
3,84
1,63
8Ad
just
men
t/Re
stat
emen
t(3
,809
,575
)-
(75,
744,
271)
1,49
4,12
7,03
9(1
65,2
65,9
04)
1,24
9,30
7,28
91,
249,
307,
289
Adju
stm
ent/
Rest
ated
Bal
ance
5,8
81,4
02,2
2411
9,93
9,33
887
5,18
2,01
35,
733,
330
-17
6,73
6,63
3-
656,
001,
593
(31,
846,
204)
7,68
3,14
8,92
744
,771
,253
7,72
7,92
0,18
0as
at S
hraw
an 0
1, 2
073
Com
preh
ensi
ve In
com
e fo
r the
yea
r-
-Pr
ofit
for t
he y
ear
1,48
8,82
5,22
91,
488,
825,
229
1,05
6,01
21,
489,
881,
242
Oth
er C
ompr
ehen
sive
Inco
me,
Net
of T
ax-
-Ga
ins/
(loss
es) f
rom
inve
stm
ent i
n eq
uity
175,
011,
455
175,
011,
455
175,
011,
455
inst
rum
ents
mea
sure
d at
fair
valu
eGa
ins/
(loss
es) o
n re
valu
atio
n-
-Ac
tuar
ial g
ains
/(lo
sses
) on
defin
ed8,
629,
800
8,62
9,80
08,
629,
800
bene
fit p
lans
Gain
s/(lo
sses
) on
cash
flow
hed
ge-
-Ex
chan
ge ga
ins/
(loss
es)(a
risin
g fro
m-
-tra
nsla
ting f
inan
cial a
sset
s of f
orei
gn o
pera
tion)
Tota
l Com
preh
ensi
ve In
com
e fo
r the
year
1,67
2,46
6,48
41,
672,
466,
484
Tran
sfer
to R
eser
ves d
urin
g the
year
(2,5
74,8
55)
319,
590,
511
(2,2
06,1
14)
-17
5,19
8,96
5-
(444
,209
,090
)(4
8,37
4,27
1)(2
,574
,855
)(2
,574
,855
)Tr
ansf
er fr
om R
eser
ves d
urin
g the
year
--
Tran
sact
ions
with
Ow
ners
, dire
ctly
-re
cogn
ized
in E
quity
Shar
e Is
sued
-Sh
are
Base
d Pa
ymen
ts-
Divi
dend
to E
quity
-Hol
ders
-Bo
nus S
hare
s Iss
ued
-Ca
sh D
ivid
end
Paid
-O
ther
-To
tal C
ontr
ibut
ions
by a
nd d
istrib
utio
nsBa
lanc
e at
Asa
r 31,
207
45,
881,
402,
224
117,
364,
483
1,19
4,77
2,52
33,
527,
216
-35
1,93
5,59
8-
1,88
4,25
8,98
7(8
0,22
0,47
5)9,
353,
040,
557
45,8
27,2
659,
398,
867,
822
-
Bala
nce
at S
hraw
an 0
1, 2
074
5
,881
,402
,224
117,
364,
483
1,19
4,77
2,52
33,
527,
216
-35
1,93
5,59
8-
1,88
4,25
8,98
7(8
0,22
0,47
5)9,
353,
040,
557
45,8
27,2
659,
398,
867,
822
Com
preh
ensi
ve In
com
e fo
r the
yea
rPr
ofit
for t
he y
ear
959,
077,
880
959,
077,
880
(7,8
66,3
19)
951,
211,
562
Oth
er C
ompr
ehen
sive
Inco
me,
Net
of T
axGa
ins/
(loss
es) f
rom
inve
stm
ent i
n eq
uity
(111
,631
,354
)(1
11,6
31,3
54)
(111
,631
,354
)in
stru
men
ts m
easu
red
at fa
ir va
lue
Gain
s/(lo
sses
) on
reva
luat
ion
Actu
aria
l gai
ns/(
loss
es) o
n de
fined
bene
fit p
lans
(23,
420,
950)
(23,
420,
950)
Gain
s/(lo
sses
) on
cash
flow
hed
geEx
chan
ge ga
ins/
(loss
es)(a
risin
g fro
mtra
nslat
ing f
inan
cial a
sset
s of fo
reign
oper
atio
n)To
tal C
ompr
ehen
sive
Inco
me
for t
he ye
ar82
4,02
5,57
6Tr
ansf
er to
Res
erve
s dur
ing t
he ye
ar(8
,931
,825
)19
3,40
6,96
9(3
,527
,216
)1,
797,
008,
722
(111
,631
,354
)-
(1,9
40,7
05,3
42)
65,4
48,2
21(8
,931
,825
)(8
,931
,825
)Tr
ansf
er fr
om R
eser
ves d
urin
g the
year
Tran
sact
ions
with
Ow
ners
,-
dire
ctly
reco
gnize
d in
Equ
itySh
are
Issu
ed2,
352,
546,
300
43,5
15,3
312,
396,
061,
631
68,6
00,0
002,
464,
661,
631
Shar
e Ba
sed
Paym
ents
-Di
vide
nd to
Equ
ity-H
olde
rs -
Bonu
s Sha
res I
ssue
d-
Cash
Div
iden
d Pa
id(7
,140
,000
)(7
,140
,000
)(6
,860
,000
)(1
4,00
0,00
0)O
ther
283,
560
283,
560
272,
440
556,
000
Tota
l Con
trib
utio
ns b
y and
Dist
ribut
ions
Bala
nce
at A
sar 3
1, 2
075
8,23
3,94
8,52
415
1,94
7,99
01,
388,
179,
492
-1,
797,
008,
722
240,
304,
244
-76
0,72
2,78
4(1
4,77
2,25
4)12
,557
,339
,501
99,9
73,3
8712
,657
,312
,888
Shar
e Ca
pita
lSh
are
Prem
ium
Gene
ral
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rve
Exch
ange
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lisat
ion
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lato
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ir Va
lue
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rve
Reva
luat
ion
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rve
Reta
ined
Earn
ing
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erRe
serv
eTo
tal
Non
-Co
ntro
lling
Inte
rest
Tota
lEq
uity
Part
icula
rs
71 7 T H A N N U A L R E P O R T
Bank
Attr
ibut
able
to Eq
uity
-Hol
ders
of t
he B
ank
Bala
nce
at S
hraw
an 0
1, 2
073
5,8
81,4
02,2
24 1
23,7
48,9
14 8
75,1
82,0
13 5
,733
,330
252
,480
,904
(83
8,12
5,44
6) 1
33,4
19,7
00 6
,433
,841
,638
Adju
stm
ent/
Rest
atem
ent
(3,
809,
575)
(75
,744
,271
) 1
,494
,127
,039
(16
5,26
5,90
4) 1
,249
,307
,289
Adju
stm
ent/
Rest
ated
Bal
ance
as
5,8
81,4
02,2
24 1
19,9
39,3
38 8
75,1
82,0
13 5
,733
,330
- 1
76,7
36,6
33 -
656
,001
,593
(31
,846
,204
) 7,
683,
148,
927
at S
hraw
an 0
1, 2
073
Com
preh
ensi
ve In
com
e fo
r the
yea
rPr
ofit
for t
he y
ear
1,4
86,5
00,8
34 1
,486
,500
,834
Oth
er C
ompr
ehen
sive
Inco
me,
Net
of T
axGa
ins/
(loss
es) f
rom
inve
stm
ent i
n eq
uity
175
,198
,965
175
,198
,965
inst
rum
ents
mea
sure
d at
fair
valu
eGa
ins/
(loss
es) o
n re
valu
atio
n -
Actu
aria
l gai
ns/(
loss
es) o
n 8
,629
,800
8,6
29,8
00de
fined
ben
efit
plan
sGa
ins/
(loss
es) o
n ca
sh fl
ow h
edge
Exch
ange
gain
s/(lo
sses
)(aris
ing f
rom
trans
latin
g fin
ancia
l ass
ets o
f fore
ign op
erat
ion)
Tota
l Com
preh
ensi
ve In
com
e fo
r the
year
1,6
70,3
29,5
98Tr
ansf
er to
Res
erve
s dur
ing t
he ye
ar (
2,57
4,85
5) 3
19,5
90,5
11 (
2,20
6,11
4) -
175
,198
,965
(44
4,20
9,09
0) (
48,3
74,2
71)
Tran
sfer
from
Res
erve
s dur
ing t
he ye
arTr
ansa
ctio
ns w
ith O
wne
rs,
dire
ctly
reco
gnize
d in
Equ
itySh
are
Issu
edSh
are
Base
d Pa
ymen
tsDi
vide
nd to
Equ
ity-H
olde
rsBo
nus S
hare
s Iss
ued
Cash
Div
iden
d Pa
idO
ther
Tota
l Con
trib
utio
ns b
y and
dist
ribut
ions
Bala
nce
at A
sar 3
1, 2
074
5,8
81,4
02,2
24 1
17,3
64,4
83 1
,194
,772
,523
3,5
27,2
16 -
351
,935
,598
- 1
,882
,122
,101
(80,
220,
475)
9,3
50,9
03,6
71 -
- -
- -
- 0
-Ba
lanc
e at
Shr
awan
01,
207
4 5
,881
,402
,224
117
,364
,483
1,1
94,7
72,5
23 3
,527
,216
- 3
51,9
35,5
98 -
1,8
82,1
22,1
01 (8
0,22
0,47
5) 9
,350
,903
,671
Com
preh
ensi
ve In
com
e fo
r the
yea
rPr
ofit
for t
he ye
ar 9
67,0
34,8
44 9
67,0
34,8
44O
ther
Com
preh
ensi
ve In
com
e, N
et o
f Tax
Gain
s/(lo
sses
) fro
m in
vest
men
t in
(11
1,63
1,35
4) (
111,
631,
354)
equi
ty in
stru
men
ts m
easu
red
at fa
ir va
lue
Gain
s/(lo
sses
) on
reva
luat
ion
-Ac
tuar
ial g
ains
/(los
ses)
on d
efin
ed be
nefit
plan
s (
23,1
90,5
21)
(23
,190
,521
)Ga
ins/
(loss
es) o
n ca
sh fl
ow h
edge
Exch
ange
gain
s/(lo
sses
)(aris
ing f
rom
trans
latin
g fin
ancia
l ass
ets o
f for
eign
ope
ratio
n)To
tal C
ompr
ehen
sive
Inco
me
for t
he ye
ar 8
32,2
12,9
69Tr
ansf
er to
Res
erve
s dur
ing t
he ye
ar (
8,93
1,82
5) 1
93,4
06,9
69 (
3,52
7,21
6) 1
,797
,008
,722
(11
1,63
1,35
4) (1
,940
,705
,342
) 6
5,44
8,22
1Tr
ansf
er fr
om R
eser
ves d
urin
g the
year
Tran
sact
ions
with
Ow
ners
,di
rect
ly re
cogn
ized
in E
quity
Shar
e Is
sued
2,3
52,5
46,3
00 4
3,51
5,33
1 2
,396
,061
,631
Shar
e Ba
sed
Paym
ents
Divi
dend
to E
quity
-Hol
ders
Bonu
s Sha
res I
ssue
dCa
sh D
ivid
end
Paid
Oth
erTo
tal C
ontr
ibut
ions
by a
nd D
istrib
utio
nsBa
lanc
e at
Asa
r 31,
207
5 8
,233
,948
,524
151
,947
,990
1,3
88,1
79,4
92 -
1,7
97,0
08,7
22 2
40,3
04,2
44 -
773
,629
,731
(14,
772,
254)
12,
570,
246,
448
Shar
e Ca
pita
lSh
are
Prem
ium
Gene
ral
Rese
rve
Exch
ange
Equa
lisat
ion
Regu
lato
ryRe
serv
eFa
ir Va
lue
Rese
rve
Reva
luat
ion
Rese
rve
Reta
ined
Earn
ing
Oth
erRe
serv
eTo
tal
Non
-Co
ntro
lling
Inte
rest
Tota
lEq
uity
Part
icula
rs
1 7 T H A N N U A L R E P O R T6
Prab
hu B
ank
Lim
ited
Stat
emen
t of C
hang
es in
Equ
ityFr
om Sh
raw
an 1
, 207
4 to
Asa
r 32,
207
5 G
roup
Attr
ibut
able
to Eq
uity
-Hol
ders
of t
he B
ank
Bala
nce
at S
hraw
an 0
1, 2
073
5,88
1,40
2,22
412
3,74
8,91
487
5,18
2,01
35,
733,
330
-25
2,48
0,90
4-
(838
,125
,446
)13
3,41
9,70
06,
433,
841,
638
6,43
3,84
1,63
8Ad
just
men
t/Re
stat
emen
t(3
,809
,575
)-
(75,
744,
271)
1,49
4,12
7,03
9(1
65,2
65,9
04)
1,24
9,30
7,28
91,
249,
307,
289
Adju
stm
ent/
Rest
ated
Bal
ance
5,8
81,4
02,2
2411
9,93
9,33
887
5,18
2,01
35,
733,
330
-17
6,73
6,63
3-
656,
001,
593
(31,
846,
204)
7,68
3,14
8,92
744
,771
,253
7,72
7,92
0,18
0as
at S
hraw
an 0
1, 2
073
Com
preh
ensi
ve In
com
e fo
r the
yea
r-
-Pr
ofit
for t
he y
ear
1,48
8,82
5,22
91,
488,
825,
229
1,05
6,01
21,
489,
881,
242
Oth
er C
ompr
ehen
sive
Inco
me,
Net
of T
ax-
-Ga
ins/
(loss
es) f
rom
inve
stm
ent i
n eq
uity
175,
011,
455
175,
011,
455
175,
011,
455
inst
rum
ents
mea
sure
d at
fair
valu
eGa
ins/
(loss
es) o
n re
valu
atio
n-
-Ac
tuar
ial g
ains
/(lo
sses
) on
defin
ed8,
629,
800
8,62
9,80
08,
629,
800
bene
fit p
lans
Gain
s/(lo
sses
) on
cash
flow
hed
ge-
-Ex
chan
ge ga
ins/
(loss
es)(a
risin
g fro
m-
-tra
nsla
ting f
inan
cial a
sset
s of f
orei
gn o
pera
tion)
Tota
l Com
preh
ensi
ve In
com
e fo
r the
year
1,67
2,46
6,48
41,
672,
466,
484
Tran
sfer
to R
eser
ves d
urin
g the
year
(2,5
74,8
55)
319,
590,
511
(2,2
06,1
14)
-17
5,19
8,96
5-
(444
,209
,090
)(4
8,37
4,27
1)(2
,574
,855
)(2
,574
,855
)Tr
ansf
er fr
om R
eser
ves d
urin
g the
year
--
Tran
sact
ions
with
Ow
ners
, dire
ctly
-re
cogn
ized
in E
quity
Shar
e Is
sued
-Sh
are
Base
d Pa
ymen
ts-
Divi
dend
to E
quity
-Hol
ders
-Bo
nus S
hare
s Iss
ued
-Ca
sh D
ivid
end
Paid
-O
ther
-To
tal C
ontr
ibut
ions
by a
nd d
istrib
utio
nsBa
lanc
e at
Asa
r 31,
207
45,
881,
402,
224
117,
364,
483
1,19
4,77
2,52
33,
527,
216
-35
1,93
5,59
8-
1,88
4,25
8,98
7(8
0,22
0,47
5)9,
353,
040,
557
45,8
27,2
659,
398,
867,
822
-
Bala
nce
at S
hraw
an 0
1, 2
074
5
,881
,402
,224
117,
364,
483
1,19
4,77
2,52
33,
527,
216
-35
1,93
5,59
8-
1,88
4,25
8,98
7(8
0,22
0,47
5)9,
353,
040,
557
45,8
27,2
659,
398,
867,
822
Com
preh
ensi
ve In
com
e fo
r the
yea
rPr
ofit
for t
he y
ear
959,
077,
880
959,
077,
880
(7,8
66,3
19)
951,
211,
562
Oth
er C
ompr
ehen
sive
Inco
me,
Net
of T
axGa
ins/
(loss
es) f
rom
inve
stm
ent i
n eq
uity
(111
,631
,354
)(1
11,6
31,3
54)
(111
,631
,354
)in
stru
men
ts m
easu
red
at fa
ir va
lue
Gain
s/(lo
sses
) on
reva
luat
ion
Actu
aria
l gai
ns/(
loss
es) o
n de
fined
bene
fit p
lans
(23,
420,
950)
(23,
420,
950)
Gain
s/(lo
sses
) on
cash
flow
hed
geEx
chan
ge ga
ins/
(loss
es)(a
risin
g fro
mtra
nslat
ing f
inan
cial a
sset
s of fo
reign
oper
atio
n)To
tal C
ompr
ehen
sive
Inco
me
for t
he ye
ar82
4,02
5,57
6Tr
ansf
er to
Res
erve
s dur
ing t
he ye
ar(8
,931
,825
)19
3,40
6,96
9(3
,527
,216
)1,
797,
008,
722
(111
,631
,354
)-
(1,9
40,7
05,3
42)
65,4
48,2
21(8
,931
,825
)(8
,931
,825
)Tr
ansf
er fr
om R
eser
ves d
urin
g the
year
Tran
sact
ions
with
Ow
ners
,-
dire
ctly
reco
gnize
d in
Equ
itySh
are
Issu
ed2,
352,
546,
300
43,5
15,3
312,
396,
061,
631
68,6
00,0
002,
464,
661,
631
Shar
e Ba
sed
Paym
ents
-Di
vide
nd to
Equ
ity-H
olde
rs -
Bonu
s Sha
res I
ssue
d-
Cash
Div
iden
d Pa
id(7
,140
,000
)(7
,140
,000
)(6
,860
,000
)(1
4,00
0,00
0)O
ther
283,
560
283,
560
272,
440
556,
000
Tota
l Con
trib
utio
ns b
y and
Dist
ribut
ions
Bala
nce
at A
sar 3
1, 2
075
8,23
3,94
8,52
415
1,94
7,99
01,
388,
179,
492
-1,
797,
008,
722
240,
304,
244
-76
0,72
2,78
4(1
4,77
2,25
4)12
,557
,339
,501
99,9
73,3
8712
,657
,312
,888
Shar
e Ca
pita
lSh
are
Prem
ium
Gene
ral
Rese
rve
Exch
ange
Equa
lisat
ion
Regu
lato
ryRe
serv
eFa
ir Va
lue
Rese
rve
Reva
luat
ion
Rese
rve
Reta
ined
Earn
ing
Oth
erRe
serv
eTo
tal
Non
-Co
ntro
lling
Inte
rest
Tota
lEq
uity
Part
icula
rs
71 7 T H A N N U A L R E P O R T
Bank
Attr
ibut
able
to Eq
uity
-Hol
ders
of t
he B
ank
Bala
nce
at S
hraw
an 0
1, 2
073
5,8
81,4
02,2
24 1
23,7
48,9
14 8
75,1
82,0
13 5
,733
,330
252
,480
,904
(83
8,12
5,44
6) 1
33,4
19,7
00 6
,433
,841
,638
Adju
stm
ent/
Rest
atem
ent
(3,
809,
575)
(75
,744
,271
) 1
,494
,127
,039
(16
5,26
5,90
4) 1
,249
,307
,289
Adju
stm
ent/
Rest
ated
Bal
ance
as
5,8
81,4
02,2
24 1
19,9
39,3
38 8
75,1
82,0
13 5
,733
,330
- 1
76,7
36,6
33 -
656
,001
,593
(31
,846
,204
) 7,
683,
148,
927
at S
hraw
an 0
1, 2
073
Com
preh
ensi
ve In
com
e fo
r the
yea
rPr
ofit
for t
he y
ear
1,4
86,5
00,8
34 1
,486
,500
,834
Oth
er C
ompr
ehen
sive
Inco
me,
Net
of T
axGa
ins/
(loss
es) f
rom
inve
stm
ent i
n eq
uity
175
,198
,965
175
,198
,965
inst
rum
ents
mea
sure
d at
fair
valu
eGa
ins/
(loss
es) o
n re
valu
atio
n -
Actu
aria
l gai
ns/(
loss
es) o
n 8
,629
,800
8,6
29,8
00de
fined
ben
efit
plan
sGa
ins/
(loss
es) o
n ca
sh fl
ow h
edge
Exch
ange
gain
s/(lo
sses
)(aris
ing f
rom
trans
latin
g fin
ancia
l ass
ets o
f fore
ign op
erat
ion)
Tota
l Com
preh
ensi
ve In
com
e fo
r the
year
1,6
70,3
29,5
98Tr
ansf
er to
Res
erve
s dur
ing t
he ye
ar (
2,57
4,85
5) 3
19,5
90,5
11 (
2,20
6,11
4) -
175
,198
,965
(44
4,20
9,09
0) (
48,3
74,2
71)
Tran
sfer
from
Res
erve
s dur
ing t
he ye
arTr
ansa
ctio
ns w
ith O
wne
rs,
dire
ctly
reco
gnize
d in
Equ
itySh
are
Issu
edSh
are
Base
d Pa
ymen
tsDi
vide
nd to
Equ
ity-H
olde
rsBo
nus S
hare
s Iss
ued
Cash
Div
iden
d Pa
idO
ther
Tota
l Con
trib
utio
ns b
y and
dist
ribut
ions
Bala
nce
at A
sar 3
1, 2
074
5,8
81,4
02,2
24 1
17,3
64,4
83 1
,194
,772
,523
3,5
27,2
16 -
351
,935
,598
- 1
,882
,122
,101
(80,
220,
475)
9,3
50,9
03,6
71 -
- -
- -
- 0
-Ba
lanc
e at
Shr
awan
01,
207
4 5
,881
,402
,224
117
,364
,483
1,1
94,7
72,5
23 3
,527
,216
- 3
51,9
35,5
98 -
1,8
82,1
22,1
01 (8
0,22
0,47
5) 9
,350
,903
,671
Com
preh
ensi
ve In
com
e fo
r the
yea
rPr
ofit
for t
he ye
ar 9
67,0
34,8
44 9
67,0
34,8
44O
ther
Com
preh
ensi
ve In
com
e, N
et o
f Tax
Gain
s/(lo
sses
) fro
m in
vest
men
t in
(11
1,63
1,35
4) (
111,
631,
354)
equi
ty in
stru
men
ts m
easu
red
at fa
ir va
lue
Gain
s/(lo
sses
) on
reva
luat
ion
-Ac
tuar
ial g
ains
/(los
ses)
on d
efin
ed be
nefit
plan
s (
23,1
90,5
21)
(23
,190
,521
)Ga
ins/
(loss
es) o
n ca
sh fl
ow h
edge
Exch
ange
gain
s/(lo
sses
)(aris
ing f
rom
trans
latin
g fin
ancia
l ass
ets o
f for
eign
ope
ratio
n)To
tal C
ompr
ehen
sive
Inco
me
for t
he ye
ar 8
32,2
12,9
69Tr
ansf
er to
Res
erve
s dur
ing t
he ye
ar (
8,93
1,82
5) 1
93,4
06,9
69 (
3,52
7,21
6) 1
,797
,008
,722
(11
1,63
1,35
4) (1
,940
,705
,342
) 6
5,44
8,22
1Tr
ansf
er fr
om R
eser
ves d
urin
g the
year
Tran
sact
ions
with
Ow
ners
,di
rect
ly re
cogn
ized
in E
quity
Shar
e Is
sued
2,3
52,5
46,3
00 4
3,51
5,33
1 2
,396
,061
,631
Shar
e Ba
sed
Paym
ents
Divi
dend
to E
quity
-Hol
ders
Bonu
s Sha
res I
ssue
dCa
sh D
ivid
end
Paid
Oth
erTo
tal C
ontr
ibut
ions
by a
nd D
istrib
utio
nsBa
lanc
e at
Asa
r 31,
207
5 8
,233
,948
,524
151
,947
,990
1,3
88,1
79,4
92 -
1,7
97,0
08,7
22 2
40,3
04,2
44 -
773
,629
,731
(14,
772,
254)
12,
570,
246,
448
Shar
e Ca
pita
lSh
are
Prem
ium
Gene
ral
Rese
rve
Exch
ange
Equa
lisat
ion
Regu
lato
ryRe
serv
eFa
ir Va
lue
Rese
rve
Reva
luat
ion
Rese
rve
Reta
ined
Earn
ing
Oth
erRe
serv
eTo
tal
Non
-Co
ntro
lling
Inte
rest
Tota
lEq
uity
Part
icula
rs
1 7 T H A N N U A L R E P O R T8
Prabhu Bank LimitedStatement of Cash Flows
From Shrawan 1, 2074 to Asar 32, 2075
CASH FLOWS FROM OPERATING ACTIVITIESInterest Received 8,021,007,415 4,882,786,983 8,011,946,154 4,869,873,211Fee and Other Income Received 624,136,268 510,127,125 624,136,268 510,127,125Dividend Received - - - -Receipts from Other Operating Activities 17,104,168 114,830,511 30,468,941 126,423,968Interest Paid (5,420,868,494) (2,957,637,155) (5,426,594,895) (2,957,637,155)Commissions and Fees Paid (80,861,972) (55,040,284) (70,963,179) (55,040,284)Cash Payment to Employees (1,174,087,812) (1,527,878,672) (1,174,087,812) (1,524,815,241)Other Expenses Paid (631,529,373) (561,849,982) (619,582,705) (556,448,060)Operating Cash Flows before Changes 1,354,900,200 405,338,527 1,375,322,772 412,483,564in Operating Assets and Liabilities
(Increase) Decrease in Operating AssetsDue from Nepal Rastra Bank 2,948,702,010 (1,615,589,232) 2,948,702,010 (1,615,589,232)Placement with Banks and (307,135,511) (996,225,000) (307,135,511) (996,225,000)Financial InstitutionsOther Trading Assets (91,923,404) 5,125,554 - -Loans and Advances to BFIs (1,387,217,322) 1,379,174,072 (1,387,217,322) 1,379,174,072Loans and Advances to Customers (13,537,169,051) (17,304,052,335) (13,525,402,155) (17,245,651,618)Other Assets (2,297,953,894) 804,305,102 (2,285,337,651) 786,884,754
(14,672,697,172) (17,727,261,838) (14,556,390,630) (17,691,407,023)Increase (Decrease) in Operating LiabilitiesDue to Banks and Financials Institutions (215,240,103) 215,240,103 (215,240,103) 215,240,103Due to Nepal Rastra Bank - - - -Deposit from Customers 15,968,525,832 20,408,671,507 15,910,125,115 20,408,671,507Borrowings - (15,243,363) (15,243,363)Other Liabilities 930,379,886 505,761,577 216,595,266 642,897,836Net Cash Flow from Operating 3,365,868,644 21,114,429,823 15,911,480,278 21,251,566,082Activities before Tax PaidIncome Tax Paid (300,061,256) (191,917,077) (293,703,306) (193,277,373)Net Cash Flow from Operating Activities 3,065,807,388 3,600,589,435 2,436,709,115 3,779,365,250
CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Investment Securities 614,113,818 (3,479,060,555) 614,113,818 (3,479,060,555)Receipts from Sale of Investment Securities - - - -Purchase of Property and Equipment (195,927,664) (280,413,662) (194,757,537) (280,413,662)Receipts from Sale of Property & Equipment 26,051,681 65,625,425 26,051,681 64,626,123Purchase of Intangible Assets (2,853,684) 3,639,236 (2,853,684) 3,639,236Purchase of Investment Properties 50,752,749 (398,761,006) 50,752,749 (398,761,006)Receipts from Sale of Investment Properties - - - -Interest Received 269,429,409 - 269,429,409 -Dividend Received 19,169,800 3,745,498 19,169,800 3,745,498Net Cash Used in Investing Activities 780,736,109 (4,085,225,064) 781,906,237 (4,086,224,367)
CASH FLOWS FROM FINANCING ACTIVITIESReceipts from Issue of Debt Securities - - - -Repayments of Debt Securities - - - -Receipts from Issue of Subordinated Liabilities - - - -Repayments of Subordinated Liabilities - -Receipt from Issue of Shares 2,513,233,983 (2,574,855) 2,387,129,806 (2,574,855)Dividends Paid - - - -Interest Paid - - - -Other Receipts/Payments 665,062,036 37,146,500 665,062,036 37,146,500Net Cash from Financing Activities 3,178,296,020 34,571,645 3,052,191,843 34,571,645
Net Increase (Decrease) in Cash & Cash Equivalents 7,024,839,518 (450,063,984) 6,270,807,194 (272,287,472)Cash & Cash Equivalents at Shrawan 01, 2073 6,559,505,893 6,816,903,037 6,543,129,573 6,622,750,207Effect of Exchange Rate fluctuations 341,153,748 192,666,836 341,153,748 192,666,836on Cash and Cash Equivalents HeldCash and Cash Equivalents at Asar 31, 2074 13,925,499,159 6,559,505,893 13,155,090,517 6,543,129,573
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
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Notes to the Consolidated Financial StatementsFor the year ended 32nd Ashadh, 2075
1. Reporting EntityPrabhu Bank Ltd. (“the Bank”) formerly known as KIST Bank Ltd. is a limited liability company incorporated andoperating in Nepal. The address of its registered office is G.P.O. Box 8975, Babarmahal, Kathmandu, Nepal. TheBank carries out commercial banking business in Nepal as class “A” financial institution under the Bank andFinancial Institution Act, 2063.The Bank is listed in Nepal Stock Exchange Limited.
Subsidiary:Prabhu Capital Limited (the Subsidiary) is the subsidiary company of the Bank. It was incorporated on October27, 2008 (Kartik 11, 2065) as public company. The Bank made an equity investment in Prabhu Capital on May 31,2017 (Jestha 17, 2074). The principal activities of the Subsidiary are to provide Merchant Banking Services. TheBank as on date holds 51% controlling interest in the Subsidiary.
The Bank and the Subsidiary are collectively referred to as “the Group”.
The Bank has held equity shares in Prabhu Life Insurance Co. Ltd (14.20% of total paid up capital) and PrabhuInsurance Co. Ltd. (6.06% of total paid up Capital) as on reporting date. Bank has also sent representativedirector (non-executive) to the mentioned companies. These investment has been accounted for as per NFRS-9, since shareholding does not exceed 20% of total paid up capital; and hence, criteria for classification as“Investment in Associates” are not met.
2. Basis of Preparation2.1 Statement of Compliance
The Financial Statements of the entity which comprises components mentioned above have been pre-pared in compliance with Nepal Financial Reporting Standards and Nepal Accounting Standards (hereaf-ter referred as NFRS), laid down by the Institute of Chartered Accountants of Nepal and in compliancewith the requirements of the Companies Act ,2006.
For all periods up to and including the year ended 17th July 2016, the Entity prepared the financial state-ments in accordance with the Nepal Accounting Standards which were effective prior to 17th July, 2016.These financial statements for the year ended 16th July 2018 are the set of statements the Entity hasprepared in accordance with NFRSs.
2.2 Reporting Period and Approval of Financial StatementsThe Bank follows the Nepalese financial year based on the Nepalese calendar. The corresponding datesfor the English calendar are as follows:
Relevant Financial Nepalese Calendar English CalendarStatement Date/ Period Date/ Period
Comparative SFP* Date 31 Ashadh 2074 15 July 2017Comparative reporting period 1 Shrawan 2073 - 31 Ashadh 2074 16 July 2016 - 15 July 2017NFRS SFP* Date 32 Ashadh 2075 16 July 2018NFRS reporting period 1 Shrawan 2074 - 32 Ashadh 2075 16 July 2017 - 16 July 2018
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Prabhu Bank LimitedStatement of Cash Flows
From Shrawan 1, 2074 to Asar 32, 2075
CASH FLOWS FROM OPERATING ACTIVITIESInterest Received 8,021,007,415 4,882,786,983 8,011,946,154 4,869,873,211Fee and Other Income Received 624,136,268 510,127,125 624,136,268 510,127,125Dividend Received - - - -Receipts from Other Operating Activities 17,104,168 114,830,511 30,468,941 126,423,968Interest Paid (5,420,868,494) (2,957,637,155) (5,426,594,895) (2,957,637,155)Commissions and Fees Paid (80,861,972) (55,040,284) (70,963,179) (55,040,284)Cash Payment to Employees (1,174,087,812) (1,527,878,672) (1,174,087,812) (1,524,815,241)Other Expenses Paid (631,529,373) (561,849,982) (619,582,705) (556,448,060)Operating Cash Flows before Changes 1,354,900,200 405,338,527 1,375,322,772 412,483,564in Operating Assets and Liabilities
(Increase) Decrease in Operating AssetsDue from Nepal Rastra Bank 2,948,702,010 (1,615,589,232) 2,948,702,010 (1,615,589,232)Placement with Banks and (307,135,511) (996,225,000) (307,135,511) (996,225,000)Financial InstitutionsOther Trading Assets (91,923,404) 5,125,554 - -Loans and Advances to BFIs (1,387,217,322) 1,379,174,072 (1,387,217,322) 1,379,174,072Loans and Advances to Customers (13,537,169,051) (17,304,052,335) (13,525,402,155) (17,245,651,618)Other Assets (2,297,953,894) 804,305,102 (2,285,337,651) 786,884,754
(14,672,697,172) (17,727,261,838) (14,556,390,630) (17,691,407,023)Increase (Decrease) in Operating LiabilitiesDue to Banks and Financials Institutions (215,240,103) 215,240,103 (215,240,103) 215,240,103Due to Nepal Rastra Bank - - - -Deposit from Customers 15,968,525,832 20,408,671,507 15,910,125,115 20,408,671,507Borrowings - (15,243,363) (15,243,363)Other Liabilities 930,379,886 505,761,577 216,595,266 642,897,836Net Cash Flow from Operating 3,365,868,644 21,114,429,823 15,911,480,278 21,251,566,082Activities before Tax PaidIncome Tax Paid (300,061,256) (191,917,077) (293,703,306) (193,277,373)Net Cash Flow from Operating Activities 3,065,807,388 3,600,589,435 2,436,709,115 3,779,365,250
CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Investment Securities 614,113,818 (3,479,060,555) 614,113,818 (3,479,060,555)Receipts from Sale of Investment Securities - - - -Purchase of Property and Equipment (195,927,664) (280,413,662) (194,757,537) (280,413,662)Receipts from Sale of Property & Equipment 26,051,681 65,625,425 26,051,681 64,626,123Purchase of Intangible Assets (2,853,684) 3,639,236 (2,853,684) 3,639,236Purchase of Investment Properties 50,752,749 (398,761,006) 50,752,749 (398,761,006)Receipts from Sale of Investment Properties - - - -Interest Received 269,429,409 - 269,429,409 -Dividend Received 19,169,800 3,745,498 19,169,800 3,745,498Net Cash Used in Investing Activities 780,736,109 (4,085,225,064) 781,906,237 (4,086,224,367)
CASH FLOWS FROM FINANCING ACTIVITIESReceipts from Issue of Debt Securities - - - -Repayments of Debt Securities - - - -Receipts from Issue of Subordinated Liabilities - - - -Repayments of Subordinated Liabilities - -Receipt from Issue of Shares 2,513,233,983 (2,574,855) 2,387,129,806 (2,574,855)Dividends Paid - - - -Interest Paid - - - -Other Receipts/Payments 665,062,036 37,146,500 665,062,036 37,146,500Net Cash from Financing Activities 3,178,296,020 34,571,645 3,052,191,843 34,571,645
Net Increase (Decrease) in Cash & Cash Equivalents 7,024,839,518 (450,063,984) 6,270,807,194 (272,287,472)Cash & Cash Equivalents at Shrawan 01, 2073 6,559,505,893 6,816,903,037 6,543,129,573 6,622,750,207Effect of Exchange Rate fluctuations 341,153,748 192,666,836 341,153,748 192,666,836on Cash and Cash Equivalents HeldCash and Cash Equivalents at Asar 31, 2074 13,925,499,159 6,559,505,893 13,155,090,517 6,543,129,573
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
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Notes to the Consolidated Financial StatementsFor the year ended 32nd Ashadh, 2075
1. Reporting EntityPrabhu Bank Ltd. (“the Bank”) formerly known as KIST Bank Ltd. is a limited liability company incorporated andoperating in Nepal. The address of its registered office is G.P.O. Box 8975, Babarmahal, Kathmandu, Nepal. TheBank carries out commercial banking business in Nepal as class “A” financial institution under the Bank andFinancial Institution Act, 2063.The Bank is listed in Nepal Stock Exchange Limited.
Subsidiary:Prabhu Capital Limited (the Subsidiary) is the subsidiary company of the Bank. It was incorporated on October27, 2008 (Kartik 11, 2065) as public company. The Bank made an equity investment in Prabhu Capital on May 31,2017 (Jestha 17, 2074). The principal activities of the Subsidiary are to provide Merchant Banking Services. TheBank as on date holds 51% controlling interest in the Subsidiary.
The Bank and the Subsidiary are collectively referred to as “the Group”.
The Bank has held equity shares in Prabhu Life Insurance Co. Ltd (14.20% of total paid up capital) and PrabhuInsurance Co. Ltd. (6.06% of total paid up Capital) as on reporting date. Bank has also sent representativedirector (non-executive) to the mentioned companies. These investment has been accounted for as per NFRS-9, since shareholding does not exceed 20% of total paid up capital; and hence, criteria for classification as“Investment in Associates” are not met.
2. Basis of Preparation2.1 Statement of Compliance
The Financial Statements of the entity which comprises components mentioned above have been pre-pared in compliance with Nepal Financial Reporting Standards and Nepal Accounting Standards (hereaf-ter referred as NFRS), laid down by the Institute of Chartered Accountants of Nepal and in compliancewith the requirements of the Companies Act ,2006.
For all periods up to and including the year ended 17th July 2016, the Entity prepared the financial state-ments in accordance with the Nepal Accounting Standards which were effective prior to 17th July, 2016.These financial statements for the year ended 16th July 2018 are the set of statements the Entity hasprepared in accordance with NFRSs.
2.2 Reporting Period and Approval of Financial StatementsThe Bank follows the Nepalese financial year based on the Nepalese calendar. The corresponding datesfor the English calendar are as follows:
Relevant Financial Nepalese Calendar English CalendarStatement Date/ Period Date/ Period
Comparative SFP* Date 31 Ashadh 2074 15 July 2017Comparative reporting period 1 Shrawan 2073 - 31 Ashadh 2074 16 July 2016 - 15 July 2017NFRS SFP* Date 32 Ashadh 2075 16 July 2018NFRS reporting period 1 Shrawan 2074 - 32 Ashadh 2075 16 July 2017 - 16 July 2018
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These financial statements have been adopted by the Board of Directors on its meeting held on 6th Janu-ary, 2019 and have been recommended for approval by shareholders in the Annual General Meeting.
2.3 Functional and Presentation CurrencyThe Financial Statements of Entity are presented in Nepalese Rupees (Rs.), which is the currency of theprimary economic environment in which the Entity operates. There was no change in Entity’s presenta-tion and functional currency during the year under review.
2.4 Use of Estimates, Assumptions and JudgmentsThe Bank, in order to comply with the financial reporting standards has made accounting judgements ashaving potentially material impact on the financial statement. Those judgements and their impact on thefinancial statement have been described herein. The management believes that the estimates used inthe preparation of the financial statement are prudent and reasonable. Actual results may differ from theestimates. Any revision to the accounting estimate is recognized prospectively in the current and futureperiod.
2.5 Changes in Accounting PoliciesThe Bank applies its accounting policies consistently from year to year except where deviations havebeen explicitly mandated by the applicable accounting standards.
2.6 New Standards in Issue but Not Yet EffectiveThere are no standards which have been issued but not yet effective up to the date of issuance of thefinancial statements.
2.7 New Standards and Interpretation not adaptedNFRS 1 First- time adoption of Nepal Accounting Standards allows first time adopters certain exemptionsfrom the retrospective application of certain NFRS. The Bank thus has taken the following exemptions onBusiness Combinations.
Not applied for subsidiaries, which are considered business for NFRS, or In interest in associates and joint ventures that occurred before 17th July 2016.
Use of this exemption means that the NAS carrying amounts of assets and liabilities, which are required tobe recognized under NFRS, is their deemed cost at the date of the acquisition. After the date of theacquisition, measurement is in accordance with NFRS. Assets and liabilities that do not qualify for recog-nition under NFRS are excluded from the opening NFRS statement of financial position.
2.8 DiscountingWhen the realization of assets and settlement of obligation is for more than one year, the Bank considersthe discounting of such assets and liabilities where the impact is material.
Discounting has been applied in case of measurement of prepaid expenses of staff loan. Employee ben-efits has been determined by considering discount rate as the average yield on government bonds issuedduring the period having maturity of five years or more. For the calculation of prepaid employee expen-diture on subsidized loans discount rate as the average yield on government bonds issued during theperiod having maturity of five years or more plus premium of one percent has been used.
3. Significant Accounting PoliciesThe principal accounting policies applied by the Bank in the preparation of these financial statements arepresented below. These policies have been consistently applied to all the years presented unless stated other-wise.
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3.1 Basis of MeasurementThe Financial Statements of Entity have been prepared on the historical cost basis, except for the follow-ing material items in the Statement of Financial Position:
Financial assets, held for trading are recorded in the statement of financial position at fair value andthe changes in the value have been routed through profit or loss statement.
Available for sale investments (quoted) are measured at fair value.
Liabilities for defined benefit obligations and staff loans provided at subsidized interest rates asper Employee Bylaws of the Bank are recognized at the present value of the defined benefitobligation less the fair value of the plan assets.
3.2 Basis of Consolidationa. Business Combinations
For the purpose of business combination, acquisition method has been adopted as prescribed by theNFRS 3 - “Business Combination”. The cost of an acquisition has been measured as the differencebetween the fair value of the assets obtained and the fair value of purchase consideration paid. Theexcess of the purchase consideration paid over the fair value of the asset has been recognized asgoodwill. The excess of the fair value of the asset obtained and the purchase consideration paid hasbeen recognized as gain on business purchase and credit to profit and loss immediately. The bank hasheld investment on Prabhu Capital Limited from 31st May as subsidiary.
b. Non-Controlling Interest (NCI)Non-controlling interests are measured at fair value of the proportionate share of the asset of thesubsidiary at the date of acquisition. After the date of acquisition the share of the income has beenappropriately adjusted to the NCI.
c. SubsidiariesThe bank recognizes an entity in which it has a controlling power as its subsidiary, Control is defined asthe ability to affect the returns over the investee, has rights to variable returns from its involvement inthe entity. The bank consolidates such entity in the preparation of the financial statement from thedate when it starts exercising power over the entity and ceases the consolidation from the date thepower over the investee ceases.
d. Loss of ControlWhen the Bank loses control over a Subsidiary, it derecognizes the assets and liabilities of the formersubsidiary from the consolidated statement of financial position. The Bank recognizes any investmentretained in the former subsidiary at its fair value when control is lost and subsequently accounts for itand for any amounts owed by or to the former subsidiary in accordance with relevant NFRSs. That fairvalue shall be regarded as the fair value on initial recognition of a financial asset in accordance withrelevant NFRS or, when appropriate, the cost on initial recognition of an investment in an associate orjoint venture. The Bank recognizes the gain or loss associated with the loss of control attributable to theformer controlling interest.
e. Special Purpose Entity (SPE)Special purpose entity is a legal entity (usually a limited company of some type or, sometimes, a limitedpartnership) created to fulfil narrow, specific or temporary objectives. SPEs are typically used by com-panies to isolate the firm from financial risk.
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These financial statements have been adopted by the Board of Directors on its meeting held on 6th Janu-ary, 2019 and have been recommended for approval by shareholders in the Annual General Meeting.
2.3 Functional and Presentation CurrencyThe Financial Statements of Entity are presented in Nepalese Rupees (Rs.), which is the currency of theprimary economic environment in which the Entity operates. There was no change in Entity’s presenta-tion and functional currency during the year under review.
2.4 Use of Estimates, Assumptions and JudgmentsThe Bank, in order to comply with the financial reporting standards has made accounting judgements ashaving potentially material impact on the financial statement. Those judgements and their impact on thefinancial statement have been described herein. The management believes that the estimates used inthe preparation of the financial statement are prudent and reasonable. Actual results may differ from theestimates. Any revision to the accounting estimate is recognized prospectively in the current and futureperiod.
2.5 Changes in Accounting PoliciesThe Bank applies its accounting policies consistently from year to year except where deviations havebeen explicitly mandated by the applicable accounting standards.
2.6 New Standards in Issue but Not Yet EffectiveThere are no standards which have been issued but not yet effective up to the date of issuance of thefinancial statements.
2.7 New Standards and Interpretation not adaptedNFRS 1 First- time adoption of Nepal Accounting Standards allows first time adopters certain exemptionsfrom the retrospective application of certain NFRS. The Bank thus has taken the following exemptions onBusiness Combinations.
Not applied for subsidiaries, which are considered business for NFRS, or In interest in associates and joint ventures that occurred before 17th July 2016.
Use of this exemption means that the NAS carrying amounts of assets and liabilities, which are required tobe recognized under NFRS, is their deemed cost at the date of the acquisition. After the date of theacquisition, measurement is in accordance with NFRS. Assets and liabilities that do not qualify for recog-nition under NFRS are excluded from the opening NFRS statement of financial position.
2.8 DiscountingWhen the realization of assets and settlement of obligation is for more than one year, the Bank considersthe discounting of such assets and liabilities where the impact is material.
Discounting has been applied in case of measurement of prepaid expenses of staff loan. Employee ben-efits has been determined by considering discount rate as the average yield on government bonds issuedduring the period having maturity of five years or more. For the calculation of prepaid employee expen-diture on subsidized loans discount rate as the average yield on government bonds issued during theperiod having maturity of five years or more plus premium of one percent has been used.
3. Significant Accounting PoliciesThe principal accounting policies applied by the Bank in the preparation of these financial statements arepresented below. These policies have been consistently applied to all the years presented unless stated other-wise.
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The Bank does not have any special purpose entity as of now. f. Transaction Elimination on Consolidation
Bank eliminates all the intercompany transactions, income and expenses while preparing consolidatedfinancial statements as per NFRS 10 “Consolidated Financial Statement”.
2.3 Cash and Cash EquivalentCash and cash equivalents includes cash in hand, deposits held at call with banks and other short-terminvestments in an active market with original maturities of three months or less and bank overdrafts.
Details of Cash and Cash Equivalents are presented under Schedule No. 4.1.
2.4 Financial Assets and Financial LiabilitiesRecognitionThe entity recognizes financial assets and financial liabilities on the date it becomes party to the contrac-tual agreement (trade date) and recognizes changes in fair value of the financial assets or financial liabili-ties from that date.
Classification & MeasurementFinancial Assets are classified mainly under amortized cost, fair value through profit or loss and fair valuethrough OCI. Financial Liabilities are classified at amortized cost or fair value through profit or loss.
The basic concept for the categorization of these assets depends upon their characteristics of business modeland contractual cash flow model. Business model characteristics are whether the asset has been held to gaintrading benefits or it has been held to collect contractual cash flow. Similarly, contractual cash flow characteris-tics determine whether the cash flow from the asset is solely the repayment of principal and interest or not.Principal represents the fair value of the instrument at the time of initial recognition while interest representsthe time value of money and credit risk associated with the compensation.
1. Fair Value Through Profit or Loss:Assets are categorized as fair through profit or loss if the asset has been held in-order to obtain tradinggain rather than to obtain contractual cash flows.
An asset can be recognized under this category if the bank has made an irrevocable decision to categorizean asset under this category in order to avoid accounting mismatch.
2. At amortized Cost:Assets are categorized under this category if the business model is to obtain the contractual cash flowfrom the assets and the contractual cash flow is the solely repayment of principal and interest
3. Fair Value Through OCI:Assets are categorized under this category if the business model is to obtain the contractual cash flowfrom the assets but the contractual cash flow isn’t solely repayment of principal and interest.
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The Bank does not have any special purpose entity as of now. f. Transaction Elimination on Consolidation
Bank eliminates all the intercompany transactions, income and expenses while preparing consolidatedfinancial statements as per NFRS 10 “Consolidated Financial Statement”.
2.3 Cash and Cash EquivalentCash and cash equivalents includes cash in hand, deposits held at call with banks and other short-terminvestments in an active market with original maturities of three months or less and bank overdrafts.
Details of Cash and Cash Equivalents are presented under Schedule No. 4.1.
2.4 Financial Assets and Financial LiabilitiesRecognitionThe entity recognizes financial assets and financial liabilities on the date it becomes party to the contrac-tual agreement (trade date) and recognizes changes in fair value of the financial assets or financial liabili-ties from that date.
Classification & MeasurementFinancial Assets are classified mainly under amortized cost, fair value through profit or loss and fair valuethrough OCI. Financial Liabilities are classified at amortized cost or fair value through profit or loss.
The basic concept for the categorization of these assets depends upon their characteristics of business modeland contractual cash flow model. Business model characteristics are whether the asset has been held to gaintrading benefits or it has been held to collect contractual cash flow. Similarly, contractual cash flow characteris-tics determine whether the cash flow from the asset is solely the repayment of principal and interest or not.Principal represents the fair value of the instrument at the time of initial recognition while interest representsthe time value of money and credit risk associated with the compensation.
1. Fair Value Through Profit or Loss:Assets are categorized as fair through profit or loss if the asset has been held in-order to obtain tradinggain rather than to obtain contractual cash flows.
An asset can be recognized under this category if the bank has made an irrevocable decision to categorizean asset under this category in order to avoid accounting mismatch.
2. At amortized Cost:Assets are categorized under this category if the business model is to obtain the contractual cash flowfrom the assets and the contractual cash flow is the solely repayment of principal and interest
3. Fair Value Through OCI:Assets are categorized under this category if the business model is to obtain the contractual cash flowfrom the assets but the contractual cash flow isn’t solely repayment of principal and interest.
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Financial Liabilities:
Classification of financial liabilities1. Financial liabilities at fair value through profit or loss:
These include financial liabilities that the entity either has incurred for trading purposes or otherwise haselected to classify into this category. Derivative liabilities are always treated as held for trading unlessthey are designated and effective hedging instruments. The designation of hedging instruments is dis-cussed later in this chapter.
2. Financial Liabilities at Amortized cost:It is the default category for financial liabilities that do not meet the definition of financial liabilities at fairvalue through profit or loss. All financial liabilities will fall into this category. Examples of financial liabili-ties that generally would be classified in this category are account payables, note payables, issued debtinstruments, and deposits from customers.
De-recognitionFinancial Assets are derecognized when the rights to receive cash flows from the investments have expired or theFund has transferred substantially all risks and rewards of ownership.
Financial liabilities at fair value through profit or loss are derecognized when the obligation specified in the con-tract is discharged or expired.
Realized gains and realized losses on de-recognition are determined using the weighted average method and areincluded in the profit or loss in the period in which they arise as gain on sale of securities. The realized gain is thedifference between an instrument’s weighted average cost and disposal amount.
Determination of Fair Value‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween market participants at the measurement date in the principal or, in its absence, the most advantageousmarket to which the Entity has access at that date. The fair value of a liability reflects its non-performance risk. Fairvalue also represents the value of a company’s assets and liabilities when a subsidiary company’s financial state-ments are consolidated with a parent company.
Valuation hierarchyFor all financial instruments where fair values are determined by referring to externally quoted prices or observ-able pricing inputs to models, independent price determination or validation is obtained. In an inactive market,direct observation of a traded price may not be possible. In these circumstances, the Bank uses alternative marketinformation to validate the financial instrument’s fair value, with greater weight given to information that isconsidered to be more relevant and reliable.
Level 1 fair value measurements are those derived from unadjusted quoted prices in active markets for identicalassets or liabilities.
Level 2 valuations are those with quoted prices for similar instruments in active markets or quoted prices foridentical or similar instruments in inactive markets and financial instruments valued using models where all signifi-cant inputs are observable.
Level 3 portfolios are those where at least one input, which could have a significant effect on the instrument’svaluation, is not based on observable market data.
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ImpairmentAt each reporting date, the Entity assesses whether there is objective evidence that financial assets not carried atfair value through profit or loss are impaired. A financial asset or a group of financial assets is impaired whenobjective evidence demonstrates that a loss event has occurred after the initial recognition of the asset(s) and thatthe loss event has an impact on the future cash flows of the asset(s) that can be estimated reliably.
Objective evidence that financial assets are impaired includes:
significant financial difficulty of the borrower or issuer; default or delinquency by a borrower; the restructuring of a loan or advance by the Entity on terms that the Entity would not consider otherwise; indications that a borrower or issuer will enter bankruptcy; the disappearance of an active market for a security; or Observable data relating to a group of assets such as adverse changes in the payment status of borrowers or
issuers in the group, or economic conditions that correlate with defaults in the group.
In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its costis objective evidence of impairment. The Entity considers evidence of impairment for loans and advances and heldto - maturity investment securities at both a specific asset and a collective level. All individually significant loansand receivables and held-to-maturity investment securities are assessed for specific impairment.
Impairment losses on assets measured at amortized cost are calculated as the difference between the carryingamount and the present value of estimated future cash flows discounted at the asset’s original effective interestrate.
If the terms of a financial asset are renegotiated or modified or an existing financial asset is replaced with a new onedue to financial difficulties of the borrower, then an assessment is made of whether the financial asset should bederecognized. If the cash flows of the renegotiated asset are substantially different, then the contractual rights tocash flows from the original financial asset are deemed to have expired. In this case, the original financial asset isderecognized and the new financial asset is recognized at fair value. The impairment loss before an expectedrestructuring is measured as follows:
If the expected restructuring will not result in de-recognition of the existing asset, then the estimated cashflows arising from the modified financial asset are included in the measurement of the existing asset basedon their expected timing and amounts discounted at the original effective interest rate of the existingfinancial asset.
If the expected restructuring will result in de-recognition of the existing asset, then the expected fair valueof the new asset is treated as the final cash flow from the existing financial asset at the time of its de-recognition. This amount is discounted from the expected date of de-recognition to the reporting dateusing the original effective interest rate of the existing financial asset.
Impairment losses are recognized in profit or loss and reflected in an allowance account against loans and receiv-ables or held-to-maturity investment securities. If an event occurring after the impairment was recognized causesthe amount of impairment loss to decrease, then the decrease in impairment loss is reversed through profit or loss.
Impairment losses on available-for-sale investment securities are recognized by reclassifying the losses accumu-lated in the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit
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or loss is the difference between the acquisition cost, net of any principal repayment and amortization, and thecurrent fair value, less any impairment loss recognised previously in profit or loss. Changes in impairment attribut-able to application of the effective interest method are reflected as a component of interest income.
If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increasecan be related objectively to an event occurring after the impairment loss was recognized, then the impairmentloss is reversed through profit or loss; otherwise, any increase in fair value is recognized through OCI. Any subse-quent recovery in the fair value of an impaired available-for-sale equity security is always recognized in OCI.
As per carve out issued by ICAN, higher of the loan loss provision to be maintained as per NRB Directives orImpairment calculated as per NFRS should be presented in financial statements. Hence, LLP as per NRB Directiveshas been presented in the financial statements.
3.5 Trading AssetsTrading Assets are those assets which are held for the purpose of selling or repurchasing in the near termor if on initial recognition is part of a portfolio of identifiable investments that are managed together andfor which there is evidence of a recent actual pattern of short-term profit taking. It includes non-deriva-tive financial assets.
The bank currently doesn’t hold any asset to be classified as trading assets.
3.6 Derivative Assets and Derivative LiabilitiesDerivative assets and liabilities (herein referred to as instrument) is a contract whose value changes tothe change in agreed-upon underlying financial asset/liability which requires no initial net investmentand is settled at future date. Derivative instruments includes transactions like interest rate swap, cur-rency swap, forward foreign exchange contract etc. held for trading as well as risk management purposes.Derivative financial instruments are initially measured at fair value on the contract date and are subse-quently re-measured to fair value at each reporting date.
Details of Derivative assets and liabilities are presented under Schedule No. 4.4 and 4.19 respectively.
3.7 Property & EquipmentProperty, plant and equipment are tangible items that are held for use in the production or supply ofgoods or services or for administrative purposes and are expected to be used during more than oneperiod.
Recognition and MeasurementAs per NAS 16 – “Property plant and equipment”, Items of property, plant and equipment are measured at cost lessaccumulated depreciation and any accumulated impairment losses
Purchased software that is integral to the functionality of the related equipment is capitalized as part of thatequipment.
If significant parts of an item of property or equipment have different useful lives, then they are accounted for asseparate items (major components) of property and equipment as mentioned in NAS 16.
Particulars 2073 2074 2075LLP as per NRB 4,303,637,255 2,800,203,974 2,645,652,761Impairment as per NFRS 1,890,261,441 1,032,683,756 2,084,274,625
Comparison of impairment as per NFRS and NRB:
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ImpairmentAt each reporting date, the Entity assesses whether there is objective evidence that financial assets not carried atfair value through profit or loss are impaired. A financial asset or a group of financial assets is impaired whenobjective evidence demonstrates that a loss event has occurred after the initial recognition of the asset(s) and thatthe loss event has an impact on the future cash flows of the asset(s) that can be estimated reliably.
Objective evidence that financial assets are impaired includes:
significant financial difficulty of the borrower or issuer; default or delinquency by a borrower; the restructuring of a loan or advance by the Entity on terms that the Entity would not consider otherwise; indications that a borrower or issuer will enter bankruptcy; the disappearance of an active market for a security; or Observable data relating to a group of assets such as adverse changes in the payment status of borrowers or
issuers in the group, or economic conditions that correlate with defaults in the group.
In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its costis objective evidence of impairment. The Entity considers evidence of impairment for loans and advances and heldto - maturity investment securities at both a specific asset and a collective level. All individually significant loansand receivables and held-to-maturity investment securities are assessed for specific impairment.
Impairment losses on assets measured at amortized cost are calculated as the difference between the carryingamount and the present value of estimated future cash flows discounted at the asset’s original effective interestrate.
If the terms of a financial asset are renegotiated or modified or an existing financial asset is replaced with a new onedue to financial difficulties of the borrower, then an assessment is made of whether the financial asset should bederecognized. If the cash flows of the renegotiated asset are substantially different, then the contractual rights tocash flows from the original financial asset are deemed to have expired. In this case, the original financial asset isderecognized and the new financial asset is recognized at fair value. The impairment loss before an expectedrestructuring is measured as follows:
If the expected restructuring will not result in de-recognition of the existing asset, then the estimated cashflows arising from the modified financial asset are included in the measurement of the existing asset basedon their expected timing and amounts discounted at the original effective interest rate of the existingfinancial asset.
If the expected restructuring will result in de-recognition of the existing asset, then the expected fair valueof the new asset is treated as the final cash flow from the existing financial asset at the time of its de-recognition. This amount is discounted from the expected date of de-recognition to the reporting dateusing the original effective interest rate of the existing financial asset.
Impairment losses are recognized in profit or loss and reflected in an allowance account against loans and receiv-ables or held-to-maturity investment securities. If an event occurring after the impairment was recognized causesthe amount of impairment loss to decrease, then the decrease in impairment loss is reversed through profit or loss.
Impairment losses on available-for-sale investment securities are recognized by reclassifying the losses accumu-lated in the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit
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or loss is the difference between the acquisition cost, net of any principal repayment and amortization, and thecurrent fair value, less any impairment loss recognised previously in profit or loss. Changes in impairment attribut-able to application of the effective interest method are reflected as a component of interest income.
If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increasecan be related objectively to an event occurring after the impairment loss was recognized, then the impairmentloss is reversed through profit or loss; otherwise, any increase in fair value is recognized through OCI. Any subse-quent recovery in the fair value of an impaired available-for-sale equity security is always recognized in OCI.
As per carve out issued by ICAN, higher of the loan loss provision to be maintained as per NRB Directives orImpairment calculated as per NFRS should be presented in financial statements. Hence, LLP as per NRB Directiveshas been presented in the financial statements.
3.5 Trading AssetsTrading Assets are those assets which are held for the purpose of selling or repurchasing in the near termor if on initial recognition is part of a portfolio of identifiable investments that are managed together andfor which there is evidence of a recent actual pattern of short-term profit taking. It includes non-deriva-tive financial assets.
The bank currently doesn’t hold any asset to be classified as trading assets.
3.6 Derivative Assets and Derivative LiabilitiesDerivative assets and liabilities (herein referred to as instrument) is a contract whose value changes tothe change in agreed-upon underlying financial asset/liability which requires no initial net investmentand is settled at future date. Derivative instruments includes transactions like interest rate swap, cur-rency swap, forward foreign exchange contract etc. held for trading as well as risk management purposes.Derivative financial instruments are initially measured at fair value on the contract date and are subse-quently re-measured to fair value at each reporting date.
Details of Derivative assets and liabilities are presented under Schedule No. 4.4 and 4.19 respectively.
3.7 Property & EquipmentProperty, plant and equipment are tangible items that are held for use in the production or supply ofgoods or services or for administrative purposes and are expected to be used during more than oneperiod.
Recognition and MeasurementAs per NAS 16 – “Property plant and equipment”, Items of property, plant and equipment are measured at cost lessaccumulated depreciation and any accumulated impairment losses
Purchased software that is integral to the functionality of the related equipment is capitalized as part of thatequipment.
If significant parts of an item of property or equipment have different useful lives, then they are accounted for asseparate items (major components) of property and equipment as mentioned in NAS 16.
Particulars 2073 2074 2075LLP as per NRB 4,303,637,255 2,800,203,974 2,645,652,761Impairment as per NFRS 1,890,261,441 1,032,683,756 2,084,274,625
Comparison of impairment as per NFRS and NRB:
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Any gain or loss on disposal of an item of property and equipment (calculated as the difference between the netproceeds from disposal and the carrying amount of the item) is recognised within other income in profit or loss
Subsequent Costs
Subsequent expenditure is capitalized only when it is probable that the future economic benefits of the expendi-ture will flow to the Entity. On-going repairs and maintenance are expensed as incurred.
Assets with a value of less than NPR 5,000 are charged off to revenue in the year of purchase irrespective of theiruseful life. However, with the revision in Financial Bylaws of the Bank w.e.f. 28th Baisakh, 2075, assets with a valueof less than NPR 10,000 are charged off to revenue immediately after purchase.
Depreciation is charged to Profit & Loss Account on a Written-down-Value method over the estimated useful life ofthe relevant assets. For calculation of depreciation, assets put to use for more than six months in a F/Y are consid-ered full value, three to six months at two third of the cost and less than three months at one third of the cost. Therates of depreciation are determined based on the estimated useful life are as follows:
Leased assets and leasehold improvement is amortized on a straight-line basis using the rates determined withreference to the lease period or 10% whichever is higher.
Software applications purchased by the Bank and system development expenses are capitalized at acquisition costand amortized over a period of five years from the date of acquisition.
De-recognitionThe carrying amount of an item of property, plant and equipment is derecognised on disposal or when no futureeconomic benefits are expected from its use or disposal. The gain or loss arising from de-recognition of an item ofproperty, plant and equipment is included in profit or loss when the item is derecognised.
3.8 Goodwill and Intangible AssetsGoodwill“Goodwill” denotes the value of certain non-monetary, non-physical resources of the business that arenot identifiable. Goodwill is more of a miscellaneous category for intangible assets that are harder toparse out individually or measured directly. Customer loyalty, brand equity, name/brand recognition andcompany reputation all of the things that make a company worth more than its book value, or quantifiableassets count as goodwill. Goodwill has a useful life which is indefinite, unlike most of the other intangibleassets. Goodwill only shows up on a balance sheet when two companies complete a merger or acquisition.When a company buys another firm, anything it pays above and beyond the net value of thetarget’s identifiable assets becomes goodwill on the balance sheet. Goodwill is a premium paid overthe fair value of assets during the purchase of a company. Hence, it is tagged to a company or business andcannot be sold or purchased independently
Nature of Assets Depreciation Rate (%)Buildings 5Vehicles 20Office Equipment 25Computers and Accessories 25Furniture and Fixtures 25Machinery Items (ATM, Generator ) 15
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Any gain or loss on disposal of an item of property and equipment (calculated as the difference between the netproceeds from disposal and the carrying amount of the item) is recognised within other income in profit or loss
Subsequent Costs
Subsequent expenditure is capitalized only when it is probable that the future economic benefits of the expendi-ture will flow to the Entity. On-going repairs and maintenance are expensed as incurred.
Assets with a value of less than NPR 5,000 are charged off to revenue in the year of purchase irrespective of theiruseful life. However, with the revision in Financial Bylaws of the Bank w.e.f. 28th Baisakh, 2075, assets with a valueof less than NPR 10,000 are charged off to revenue immediately after purchase.
Depreciation is charged to Profit & Loss Account on a Written-down-Value method over the estimated useful life ofthe relevant assets. For calculation of depreciation, assets put to use for more than six months in a F/Y are consid-ered full value, three to six months at two third of the cost and less than three months at one third of the cost. Therates of depreciation are determined based on the estimated useful life are as follows:
Leased assets and leasehold improvement is amortized on a straight-line basis using the rates determined withreference to the lease period or 10% whichever is higher.
Software applications purchased by the Bank and system development expenses are capitalized at acquisition costand amortized over a period of five years from the date of acquisition.
De-recognitionThe carrying amount of an item of property, plant and equipment is derecognised on disposal or when no futureeconomic benefits are expected from its use or disposal. The gain or loss arising from de-recognition of an item ofproperty, plant and equipment is included in profit or loss when the item is derecognised.
3.8 Goodwill and Intangible AssetsGoodwill“Goodwill” denotes the value of certain non-monetary, non-physical resources of the business that arenot identifiable. Goodwill is more of a miscellaneous category for intangible assets that are harder toparse out individually or measured directly. Customer loyalty, brand equity, name/brand recognition andcompany reputation all of the things that make a company worth more than its book value, or quantifiableassets count as goodwill. Goodwill has a useful life which is indefinite, unlike most of the other intangibleassets. Goodwill only shows up on a balance sheet when two companies complete a merger or acquisition.When a company buys another firm, anything it pays above and beyond the net value of thetarget’s identifiable assets becomes goodwill on the balance sheet. Goodwill is a premium paid overthe fair value of assets during the purchase of a company. Hence, it is tagged to a company or business andcannot be sold or purchased independently
Nature of Assets Depreciation Rate (%)Buildings 5Vehicles 20Office Equipment 25Computers and Accessories 25Furniture and Fixtures 25Machinery Items (ATM, Generator ) 15
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Intangible AssetsSoftware has been categorized under Intangible Assets. Software acquired by the Group is measured atcost less accumulated amortization and any accumulated impairment losses.
Subsequent expenditure on software assets is capitalized only when it increases the future economicbenefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.
Software is amortized on a straight-line basis in profit or loss over its estimated useful life, from the dateon which it is available for use. The estimated useful life of software for the current and comparativeperiods is five years. Amortization methods, useful lives and residual values are reviewed at each report-ing date and adjusted if appropriate.
3.9 Investment PropertyInvestment property is the non-current asset held by the entity for capital appreciation or rental ratherthan owner-occupied. It is not held for the consumption of business. The bank doesn’t intentionallypurchases any property for the capital appreciation or rental.
As per the Directive of NRB, this heading shall include land, land and building acquired as non-bankingasset but not sold.
The bank has adopted cost model for the recognition and measurement of investment property. Accord-ing to which the bank has initially recognized the assets at cost and subsequently depreciated such assetas per NAS 40 “Investment Property”.
Details of Investment Properties have been depicted under Schedule No. 4.12.
3.10 Income TaxCurrent TaxProvision for current income tax is made in accordance with the provisions of the prevailing Income TaxAct, 2058 and Rules including amendments thereon. Current tax payable (or recoverable) is based on thetaxable profit for the year. Taxable profit differs from the profit reported in the statement of profit or loss,because some item of income or expense are taxable or deductible in different years or may never betaxable or deductible.
Net of Current tax assets and current tax liabilities have been shown on the face of statement of financialposition.
Asset Category For the year ended 16 July 2018 For the year ended 15 July 2017Computer Software Lower of 5 years or License period Lower of 5 years or License period
Current Year Previous YearCurrent tax assets 38,573 32,911Current tax liabilities - -Net tax assets/(liability) 38,573 32,911
NPR in '000
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Tax Settlement StatusThe bank has filed tax returns with the Inland Revenue Office for the financial years up to 2073/74 (2016/17) underself-assessment procedures. Inland Revenue office has completed assessment/reassessment of Bank’s tax liabilityup to Financial Year 2070/71 (2013/14).
The total disputed amount from FY 2063/64 to FY 2070/71of NPR 174,967,344 has been disclosed as contingentliability on income tax under schedule 4.28.
On account of total Loss carried forward from merged entities NPR 20,338,421 has been adjusted with the taxableincome of the Bank during F/Y 2073/74 for calculation of Income Tax Provision Account. Remaining loss of NPR64,997,386 shall be adjusted as per the provisions of Income Tax Act, 2058.
Deferred TaxDeferred taxation is provided using the liability method, providing for temporary differences between the carryingamounts of assets and liabilities for financial reporting purposes and the tax base of assets and liabilities, which isthe amount attributed to those assets and liabilities for tax purposes. The amount of deferred tax provided is basedon the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax ratesenacted or substantively enacted on the reporting date. The existing tax rate 30% has been taken for the computa-tion of deferred tax for the current year.
Particulars AmountProfit as per Financial before staff provision and tax 1,350,449,344Less:Dividend Income 19,169,800Share Issue Expenses 8,931,825Provision for LLP/NBA and Loan write off (As allowed in tax) 718,865,721Depreciation as per Section 19 203,985,351Proportionate amount of unclaimed loss of merged entities 20,338,421Premium on investment matured during the year 6,566,159Cash payment Gratuity and Pension 16,262,595Gain on sale of assets 3,135,417Total Deductions 997,255,288Add:Depreciation as per Financial Statement 201,131,342Gratuity and pension provision 158,752,522Donation 40,330Provision for possible loss (154,551,213)Loan write off disallowed 398,278,373Non Capitalized Item 3,291,916Total Additions 606,943,270Profit as per Tax 960,137,326Tax Expenses 288,041,198
Current tax expenses calculation as per Income Tax Act, 2058:
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Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differencesto the extent that it is probable that future taxable profits will be available against which they can be used.Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probablethat the related tax benefit will be realized.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when theyreverse, using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities andassets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different taxentities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities willbe realized simultaneously.
Particulars Deferred Tax Deferred Tax Net Deferred TaxAssets Liabilities Assets /(Liabilities)
Deferred tax on temporary differenceson following items
Loans and Advances to BFIs -Loans and Advances to Customers 7,734,487 7,734,487Investment Properties (140,559,134) (140,559,134)Investment Securities (29,341,706) (29,341,706)Property and Equipment 13,219,855 13,219,855Employees' Defined Benefit Plan 206,120,056 206,120,056Lease Liabilities -Provisions 9,095,810 9,095,810Booking Of AIR (472,943,350) (472,943,350)Other Temporary Differences -
Deferred tax on temporary differences 215,215,867 (621,889,848) (406,673,982)Deferred tax on carry forward of 19,499,216 19,499,216unused tax lossesDeferred tax due to changes in tax rateNet Deferred Tax Asset (Liabilities) as on (387,174,766)year end of Asar 2075Deferred Tax (Asset)/ Liabilities as on (349,582,267)Shrawan 01 Shrawan 2074Origination/(Reversal) during the year (37,592,499)
Deferred Tax expense (income) 95,373,302recognized in profit or lossDeferred Tax expense (income) (57,780,803)recognized in OCIDeferred Tax expense (income) -recognized directly in Equity
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3.11 Deposits, Debt Securities Issued and Subordinated LiabilitiesThe estimated fair value of deposits with no stated maturity period is the amount repayable on demand.
Deposits by banksDeposits by banks comprise amounts owed to other domestic or foreign banks.
Customer accountsCustomer accounts comprise amounts owed to creditors that are not banks.
However, liabilities in the form of debt securities and any liabilities for which transferable certificates have beenissued are excluded (as they form part of debt securities in issue).
Deposits by banks & customers are financial liabilities - as there is an obligation to deliver cash or financial assetsback to the depositing bank or customer – and are initially recognised at fair value, plus for those financial liabilitiesnot at fair value through profit and loss, transaction costs directly attributable to the acquisition. Fair value isusually the transaction price.
The bank borrows money by issuing debt securities and subordinated debt. The borrowing is acknowledged orevidenced by issue of a negotiable instrument. The negotiable instrument can be certificate of deposit, commer-cial paper or debt note.
Subordinated debt is issued to meet the capital requirements at bank level and to supply the capital to variousoperations. This debt generally consists of negotiable instruments and is usually listed on exchanges providing anactive secondary market for the debt.
Explanatory NotesFollowing is the break-up of total deposits customer-wise as well as product-wise, Figures are presented in thou-sands of NPR.
Debt Securities IssuedThe Group presents debenture issued by the Bank under this line item. These are classified as financial liabilitiesmeasured at amortized cost.
The Bank hasn’t issued any debt securities.
Particulars Current Year Previous YearDeposits from Customer 92,847,904 77,524,915Deposits from Bank & FIs 4,411,761 3,824,625Total 97,259,665 81,349,540
Particulars Current Year Previous YearCurrent Deposits 5,145,366 2,828,479Saving Deposits 38,044,763 30,585,811Fixed Deposits 36,607,202 25,315,163Call Deposits 16,546,984 21,902,285Other Deposits 915,350 717,802
97,259,665 81,349,540
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Subordinated LiabilitiesThese comprise of liabilities subordinated, at the event of winding up, to the claims of depositors, debt securitiesissued and other creditors. Items eligible for presentation under this line item include redeemable preferenceshare, subordinated notes issued, borrowings etc. These are subject to the same accounting policies applied tofinancial liabilities measured at amortized cost. The Group does not have any subordinated liabilities at the report-ing date.
The bank does not have any subordinated liabilities.
3.12 ProvisionsA provision is recognized if, as a result of a past event, the Entity has a present legal or constructiveobligation that can be estimated reliably, and it is probable that an outflow of economic benefits will berequired to settle the obligation. The amount recognized is the best estimate of the consideration re-quired to settle the present obligation at the reporting date, taking in to account the risks and uncertain-ties surrounding the obligation at that date. A provision for onerous contracts is recognized when theexpected benefits to be derived by the Bank from a contract are lower than the unavoidable cost ofmeeting its obligations under the contract. The provision is measured as the present value of the lower ofthe expected cost of terminating the contract and the expected net cost of continuing with the contract.
Provision are not recognized for future operating losses.
The provisions and its movement are reported under schedule 4.22. The contingent liabilities & commit-ments are reported under schedule 4.28.
3.13 Revenue Recognition
Interest IncomeInterest Income is recognized on accrual basis using the effective interest rate method for all financialassets measured at amortized cost, interest bearing financial asset designated at fair value through profitor loss or classified as available for sale. EIR is the rate that exactly discounts estimated future cashpayments or receipts through the expected life of the financial instrument or a shorter period, whereappropriate, to the net carrying amount of the financial asset or financial liability.
In-case a financial asset has been impaired the bank reduces the carrying amount of the asset to itsestimated recoverable amount using the effective interest rate of the instrument and continues unwind-ing of the discount rate as interest income.
Fee and Commission IncomeFee income is earned for diverse ranges of services provided by the bank to its customers. Fee income arises on theexecution of a significant act completed or from provision of services like asset management, portfolio manage-ment, management advisory and service fees etc. The fees and commission income that are integral to the effec-tive interest rate on the financial assets are included in the measurement of the effective interest rate and shall notbe recognized as income, however immaterial amount can be recognized in profit or loss account as income.
Dividend IncomeDividend income is recognized in profit or loss on an accrual basis when the Entity’s right to receive the dividend isestablished.
Dividends are presented in net trading income or other operating income based on the underlying classification ofthe equity investment.
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3.11 Deposits, Debt Securities Issued and Subordinated LiabilitiesThe estimated fair value of deposits with no stated maturity period is the amount repayable on demand.
Deposits by banksDeposits by banks comprise amounts owed to other domestic or foreign banks.
Customer accountsCustomer accounts comprise amounts owed to creditors that are not banks.
However, liabilities in the form of debt securities and any liabilities for which transferable certificates have beenissued are excluded (as they form part of debt securities in issue).
Deposits by banks & customers are financial liabilities - as there is an obligation to deliver cash or financial assetsback to the depositing bank or customer – and are initially recognised at fair value, plus for those financial liabilitiesnot at fair value through profit and loss, transaction costs directly attributable to the acquisition. Fair value isusually the transaction price.
The bank borrows money by issuing debt securities and subordinated debt. The borrowing is acknowledged orevidenced by issue of a negotiable instrument. The negotiable instrument can be certificate of deposit, commer-cial paper or debt note.
Subordinated debt is issued to meet the capital requirements at bank level and to supply the capital to variousoperations. This debt generally consists of negotiable instruments and is usually listed on exchanges providing anactive secondary market for the debt.
Explanatory NotesFollowing is the break-up of total deposits customer-wise as well as product-wise, Figures are presented in thou-sands of NPR.
Debt Securities IssuedThe Group presents debenture issued by the Bank under this line item. These are classified as financial liabilitiesmeasured at amortized cost.
The Bank hasn’t issued any debt securities.
Particulars Current Year Previous YearDeposits from Customer 92,847,904 77,524,915Deposits from Bank & FIs 4,411,761 3,824,625Total 97,259,665 81,349,540
Particulars Current Year Previous YearCurrent Deposits 5,145,366 2,828,479Saving Deposits 38,044,763 30,585,811Fixed Deposits 36,607,202 25,315,163Call Deposits 16,546,984 21,902,285Other Deposits 915,350 717,802
97,259,665 81,349,540
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Subordinated LiabilitiesThese comprise of liabilities subordinated, at the event of winding up, to the claims of depositors, debt securitiesissued and other creditors. Items eligible for presentation under this line item include redeemable preferenceshare, subordinated notes issued, borrowings etc. These are subject to the same accounting policies applied tofinancial liabilities measured at amortized cost. The Group does not have any subordinated liabilities at the report-ing date.
The bank does not have any subordinated liabilities.
3.12 ProvisionsA provision is recognized if, as a result of a past event, the Entity has a present legal or constructiveobligation that can be estimated reliably, and it is probable that an outflow of economic benefits will berequired to settle the obligation. The amount recognized is the best estimate of the consideration re-quired to settle the present obligation at the reporting date, taking in to account the risks and uncertain-ties surrounding the obligation at that date. A provision for onerous contracts is recognized when theexpected benefits to be derived by the Bank from a contract are lower than the unavoidable cost ofmeeting its obligations under the contract. The provision is measured as the present value of the lower ofthe expected cost of terminating the contract and the expected net cost of continuing with the contract.
Provision are not recognized for future operating losses.
The provisions and its movement are reported under schedule 4.22. The contingent liabilities & commit-ments are reported under schedule 4.28.
3.13 Revenue Recognition
Interest IncomeInterest Income is recognized on accrual basis using the effective interest rate method for all financialassets measured at amortized cost, interest bearing financial asset designated at fair value through profitor loss or classified as available for sale. EIR is the rate that exactly discounts estimated future cashpayments or receipts through the expected life of the financial instrument or a shorter period, whereappropriate, to the net carrying amount of the financial asset or financial liability.
In-case a financial asset has been impaired the bank reduces the carrying amount of the asset to itsestimated recoverable amount using the effective interest rate of the instrument and continues unwind-ing of the discount rate as interest income.
Fee and Commission IncomeFee income is earned for diverse ranges of services provided by the bank to its customers. Fee income arises on theexecution of a significant act completed or from provision of services like asset management, portfolio manage-ment, management advisory and service fees etc. The fees and commission income that are integral to the effec-tive interest rate on the financial assets are included in the measurement of the effective interest rate and shall notbe recognized as income, however immaterial amount can be recognized in profit or loss account as income.
Dividend IncomeDividend income is recognized in profit or loss on an accrual basis when the Entity’s right to receive the dividend isestablished.
Dividends are presented in net trading income or other operating income based on the underlying classification ofthe equity investment.
1 7 T H A N N U A L R E P O R T22
Net Trading IncomeTrading income comprises gains less losses relating to trading assets and liabilities, and includes all realized inter-est; dividend and foreign exchange differences as well as unrealized changes in fair value of trading assets andliabilities shall be presented under this account head. The term ‘Trading’, in
the context of financial instruments, is defined as active and frequent buying and selling of financial instrumentswith the objective of generating a profit from short-term fluctuations in price or dealer’s margin. Gains and losseson trading instruments are recognised in the income statement on a mark-to-market basis and not on a cash basis.
Net Income from Other Financial Instrument at Fair Value through Profit or LossAt initial recognition, the bank may choose to designate certain financial assets and liabilities as being held at fairvalue through profit or loss (the fair value option). Realised and unrealised gains and losses on these instrumentsare reported through net trading income.
Trading assets such as equity shares and mutual fund are recognized at fair value through profit or loss. No otherfinancial instruments are designated at fair value through profit or loss. The bank has no income under the headingnet income from other financial instrument at fair value through profit or loss.
The bank does not have net trading income from other financial instrument at FVTPL.
3.14 Interest ExpenseInterest expense has been recognized in the accrual basis using the effective interest rate for financialliabilities measured at amortized cost. EIR is the rate that exactly discounts estimated future payment orreceipts through the expected life of the financial instrument or a shorter period where appropriated tothe net carrying amount of the financial asset or the financial liability.
3.15 Employee BenefitsEmployee benefits include all forms of consideration given by an entity in exchange for service renderedby employees of for the termination of employment.
Defined Contribution PlanA defined contribution plan is a post-employment plan under which an entity pays fixed contributions into aseparate entity and will have no legal or constructive obligation to pay a further amount. Obligations for contribu-tions to defined contribution plans are recognised as expense in the profit or loss as and when they are due.
The Bank operates a defined contribution plans as provident fund contribution of its employees and definedbenefit plans for the Gratuity and leave payment requirement under its staff rules.
Defined Benefit PlanA defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
Gratuity is a Defined Benefit Plan. The Entity annually measures the value of the promised retirement benefits forgratuity, which is a Defined Benefit Plan. Actuarial Valuation of Defined Benefit Plan has been carried out as per therequirement of NAS 19 – Employee Benefits.
Gain or loss arising as a result of changes in assumptions is recognized in other comprehensive income (OCI) in theperiod in which it arises.
In case of staff home loans provided under Staff Bylaws of the Bank under Insurance-Tied up Scheme, revenue hasbeen calculated based on the estimated bonus rates (compounded by savings interest rate) provided by the insur-ance companies, which is 6.5% simple interest return for the Bank after reimbursing the half of the return to the
1 7 T H A N N U A L R E P O R T22
Net Trading IncomeTrading income comprises gains less losses relating to trading assets and liabilities, and includes all realized inter-est; dividend and foreign exchange differences as well as unrealized changes in fair value of trading assets andliabilities shall be presented under this account head. The term ‘Trading’, in
the context of financial instruments, is defined as active and frequent buying and selling of financial instrumentswith the objective of generating a profit from short-term fluctuations in price or dealer’s margin. Gains and losseson trading instruments are recognised in the income statement on a mark-to-market basis and not on a cash basis.
Net Income from Other Financial Instrument at Fair Value through Profit or LossAt initial recognition, the bank may choose to designate certain financial assets and liabilities as being held at fairvalue through profit or loss (the fair value option). Realised and unrealised gains and losses on these instrumentsare reported through net trading income.
Trading assets such as equity shares and mutual fund are recognized at fair value through profit or loss. No otherfinancial instruments are designated at fair value through profit or loss. The bank has no income under the headingnet income from other financial instrument at fair value through profit or loss.
The bank does not have net trading income from other financial instrument at FVTPL.
3.14 Interest ExpenseInterest expense has been recognized in the accrual basis using the effective interest rate for financialliabilities measured at amortized cost. EIR is the rate that exactly discounts estimated future payment orreceipts through the expected life of the financial instrument or a shorter period where appropriated tothe net carrying amount of the financial asset or the financial liability.
3.15 Employee BenefitsEmployee benefits include all forms of consideration given by an entity in exchange for service renderedby employees of for the termination of employment.
Defined Contribution PlanA defined contribution plan is a post-employment plan under which an entity pays fixed contributions into aseparate entity and will have no legal or constructive obligation to pay a further amount. Obligations for contribu-tions to defined contribution plans are recognised as expense in the profit or loss as and when they are due.
The Bank operates a defined contribution plans as provident fund contribution of its employees and definedbenefit plans for the Gratuity and leave payment requirement under its staff rules.
Defined Benefit PlanA defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
Gratuity is a Defined Benefit Plan. The Entity annually measures the value of the promised retirement benefits forgratuity, which is a Defined Benefit Plan. Actuarial Valuation of Defined Benefit Plan has been carried out as per therequirement of NAS 19 – Employee Benefits.
Gain or loss arising as a result of changes in assumptions is recognized in other comprehensive income (OCI) in theperiod in which it arises.
In case of staff home loans provided under Staff Bylaws of the Bank under Insurance-Tied up Scheme, revenue hasbeen calculated based on the estimated bonus rates (compounded by savings interest rate) provided by the insur-ance companies, which is 6.5% simple interest return for the Bank after reimbursing the half of the return to the
231 7 T H A N N U A L R E P O R T
respective staff. Bank has the policy to reimburse the half of the bonus received from insurance company at the endof the insurance term to the respective staff.
3.16 LeasesLease is a contract in which one party provides an asset to the other party for some consideration usuallya periodic payment. Lease can be either financial lease or operating lease. In Financial lease the lesseenot only has the operating control over the asset but assumes the economic risk and return from the asset.While in operating lease the contract only allows the use of the asset.
As per the ICAN decision on carve out certain provision has been published related with lease i.e. Leasepayment under operating lease shall be recognized on straight line basis over the lease term unlesseither:
Another systematic basis is more representative of the time pattern of the user’s benefit even if thepayment to the lessor are not on that basis; or
The payment to the lessor structured to increase in line with expected general inflation to compensatefor the lessor’s expected inflationary cost increases. If payment to the lessor vary because of factorsothers than general inflation, then this condition is not met.
The bank doesn’t hold any financial lease.
Operating leases are not recognised on the balance sheet. Bank has recognized accrued lease for theperiod as an expense on incremental basis (as per lease term) considering the general inflation as percarve-out (optional) pronounced on 20th September, 2018.
3.17 Foreign Currency TranslationForeign currency transactions are those conducted in a currency other than the functional currency of thebank. The functional currency is the currency of the primary economic environment in which an entityoperates. Transactions in foreign currencies are translated into the respective functional currency ofEntity at the spot exchange rates at the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translatedinto the functional currency at the spot exchange rate (Closing rate) at that date. The foreign currency gainor loss on monetary items is the difference between the amortized cost in the functional currency at thebeginning of the year, adjusted for effective interest and payments during the year, and the amortizedcost in the foreign currency translated at the spot exchange rate at the end of the year.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translatedinto the functional currency at the spot exchange rate at the date on which the fair value is determined.Non-monetary items that are measured based on historical cost in a foreign currency are translated usingthe spot exchange rate at the date of the transaction.
Foreign currency differences arising on translation are recognised in profit or loss.
Explanatory NotesForeign currency translation gain/loss is presented under schedule 4.34 other operating income. 25% of such re-valuation gain, if any is transferred to foreign exchange fluctuation fund as per the requirement of NRB directive/BAFIA 2073. During the current year, there was a loss of NPR 82,540,047, which has been adjusted with the ExchangeFluctuation Reserve, to the extent of Reserve Balance.
1 7 T H A N N U A L R E P O R T24
3.18 Financial Guarantee and Loan CommitmentFinancial guarantee are bond undertaken by the bank that requires the bank to reimburse the beneficiaryof the bond in case the applicant of the bond fails to fulfil their commitments. Loan commitments arecommitments by the bank to provide credit under pre-specified terms and conditions in the future.Financial guarantee are recognized as contingent liability and are continuously assessed if any actualfinancial obligation exists.
Details of Loan Commitments are disclosed in Sch. 4.28.
3.19 Share Capital and ReservesFinancial Instrument issued are classified as equity if that interest gives the holder an evidence of re-sidual asset in the entity after deducting all of its liabilities and there exists no contractual obligation totransfer cash or other financial instrument.
General reserveThis is a statutory reserve and is a compliance requirement of NRB directive no. 4/75 and stipulations of BAFIA. TheBank is required to appropriate a minimum 20% of current year’s net profit into this heading each year until itbecomes double of paid up capital and then after a minimum 10% of profit each year. This reserve is not available fordistribution to shareholders in any form and requires specific approval of the central bank for any transfers fromthis heading. The Bank has consistently appropriated the required amount from each year’s profit into this heading.There is no such statutory requirement for the Subsidiary.
Exchange equalization reserveThis is a statutory reserve and is a compliance requirement of NRB directive no. 4/75 and stipulations of BAFIA. TheBank is required to appropriate 25% of current year’s total revaluation gain (except gain from revaluation of IndianCurrency) into this heading. The Bank has consistently appropriated the required amount from each year’s profitinto this heading. There is no such statutory requirement for the Subsidiary. Details of movement in the Exchangeequalization reserves are provided in 3.17 above.
Fair value reserveThis is a non-statutory reserve and is a requirement in the application of accounting policy for financial assets. NFRS9 requires that cumulative net change in the fair value of financial assets measured at FVTOCI is recognized underfair value reserve heading until the fair valued asset is de-recognized. Any realized fair value changes upon disposalof the re-valued asset is reclassified from this reserve heading to retained earnings. The Group has complied withthis accounting policy application.
Asset revaluation reserveThis is a non-statutory reserve and is a requirement in the application of accounting policy for non-financial assetssuch as property, equipment, investment property and intangible assets that are measured following a re-valua-tion model. Revaluation reserves often serve as a cushion against unexpected losses but may not be fully availableto absorb unexpected losses due to the subsequent deterioration in market values and tax consequences of revalu-ation. The Group does not have any amount to present under asset revaluation reserve.
Capital reserveThis is a non-statutory reserve and represents the amount of all capital nature reserves such as the amounts arisingfrom share forfeiture, capital grants and capital reserve arising out of business combinations. Funds in this reserveare not available for distribution of cash dividend but can be capitalized by issuing bonus shares upon obtainingprior approval from the central bank.
251 7 T H A N N U A L R E P O R T
Corporate social responsibility fundThis is a statutory reserve and is a compliance requirement of NRB circular 11/073/74. The Bank is required toappropriate an amount equivalent to 1% of net profit into this fund annually. The fund is created towards fundingthe Bank’s corporate social responsibility expenditure during the subsequent year. Balance in this fund is directlyreclassified to retained earnings in the subsequent year to the extent of payments made under corporate socialresponsibility activities. There is no such statutory requirement for the Subsidiary.
Investment adjustment reserveThis is a statutory reserve heading and is a compliance requirement of NRB directive no. 4/075 and 8/075. The Bank isrequired to maintain balance in this reserve heading which is calculated at fixed percentages of the cost of equityinvestments that are not held for trading. Changes in this reserve requirement are reclassified to retained earnings.The Bank has consistently appropriated the required amount from each year’s profit into this heading. There is nosuch statutory requirement for the Subsidiary.
Actuarial gain / loss reserveThis is a non-statutory reserve and is a requirement in the application of accounting policy for employee benefits.NAS 19 requires that actuarial gain or loss resultant of the change in actuarial assumptions used to value definedbenefit obligations be presented under this reserve heading. Any change in this reserve heading is recognizedthrough other comprehensive income and is not an appropriation of net profit. The Group has complied with thisaccounting policy application.
Regulatory reserveThis is a statutory reserve and is a requirement in the application of accounting policy as prescribed in NRB directiveno. 4/075. In the transition to NFRS from previous GAAP the Bank is required to reclassify all amounts that areresultant of re-measurement adjustments and that are recognized in retained earnings into this reserve heading.The amount reclassified to this reserve includes re-measurement adjustments such as interest income recognizedagainst interest receivables, difference in loan loss provision as per NRB directive and impairment on loan andadvance as per NFRS, amount equals to deferred tax assets, actual loss recognized in other comprehensive income,amount of goodwill recognized under NFRS, etc. Balance in this reserve is not regarded as free for distribution ofdividend. The Bank has complied with this regulatory requirement. There is no such statutory requirement for theSubsidiary.
Other reserve fundEmployees training and capacity development fundThis is a statutory reserve and is a compliance requirement of NRB circular 6/075. The Bank is required to incurexpenses towards employee training and development for an amount that is equivalent to at least 3% of thepreceding year’s total personnel expenses. Any shortfall amount in meeting this mandatory expense requirementin the current year will have to be transferred to this reserve fund through appropriation of net profit and theamount shall accumulate in the fund available for related expenses in the subsequent year. Balance in this fund isdirectly reclassified to retained earnings in the subsequent year to the extent of expenses made for employeestraining related activities.
1 7 T H A N N U A L R E P O R T24
3.18 Financial Guarantee and Loan CommitmentFinancial guarantee are bond undertaken by the bank that requires the bank to reimburse the beneficiaryof the bond in case the applicant of the bond fails to fulfil their commitments. Loan commitments arecommitments by the bank to provide credit under pre-specified terms and conditions in the future.Financial guarantee are recognized as contingent liability and are continuously assessed if any actualfinancial obligation exists.
Details of Loan Commitments are disclosed in Sch. 4.28.
3.19 Share Capital and ReservesFinancial Instrument issued are classified as equity if that interest gives the holder an evidence of re-sidual asset in the entity after deducting all of its liabilities and there exists no contractual obligation totransfer cash or other financial instrument.
General reserveThis is a statutory reserve and is a compliance requirement of NRB directive no. 4/75 and stipulations of BAFIA. TheBank is required to appropriate a minimum 20% of current year’s net profit into this heading each year until itbecomes double of paid up capital and then after a minimum 10% of profit each year. This reserve is not available fordistribution to shareholders in any form and requires specific approval of the central bank for any transfers fromthis heading. The Bank has consistently appropriated the required amount from each year’s profit into this heading.There is no such statutory requirement for the Subsidiary.
Exchange equalization reserveThis is a statutory reserve and is a compliance requirement of NRB directive no. 4/75 and stipulations of BAFIA. TheBank is required to appropriate 25% of current year’s total revaluation gain (except gain from revaluation of IndianCurrency) into this heading. The Bank has consistently appropriated the required amount from each year’s profitinto this heading. There is no such statutory requirement for the Subsidiary. Details of movement in the Exchangeequalization reserves are provided in 3.17 above.
Fair value reserveThis is a non-statutory reserve and is a requirement in the application of accounting policy for financial assets. NFRS9 requires that cumulative net change in the fair value of financial assets measured at FVTOCI is recognized underfair value reserve heading until the fair valued asset is de-recognized. Any realized fair value changes upon disposalof the re-valued asset is reclassified from this reserve heading to retained earnings. The Group has complied withthis accounting policy application.
Asset revaluation reserveThis is a non-statutory reserve and is a requirement in the application of accounting policy for non-financial assetssuch as property, equipment, investment property and intangible assets that are measured following a re-valua-tion model. Revaluation reserves often serve as a cushion against unexpected losses but may not be fully availableto absorb unexpected losses due to the subsequent deterioration in market values and tax consequences of revalu-ation. The Group does not have any amount to present under asset revaluation reserve.
Capital reserveThis is a non-statutory reserve and represents the amount of all capital nature reserves such as the amounts arisingfrom share forfeiture, capital grants and capital reserve arising out of business combinations. Funds in this reserveare not available for distribution of cash dividend but can be capitalized by issuing bonus shares upon obtainingprior approval from the central bank.
251 7 T H A N N U A L R E P O R T
Corporate social responsibility fundThis is a statutory reserve and is a compliance requirement of NRB circular 11/073/74. The Bank is required toappropriate an amount equivalent to 1% of net profit into this fund annually. The fund is created towards fundingthe Bank’s corporate social responsibility expenditure during the subsequent year. Balance in this fund is directlyreclassified to retained earnings in the subsequent year to the extent of payments made under corporate socialresponsibility activities. There is no such statutory requirement for the Subsidiary.
Investment adjustment reserveThis is a statutory reserve heading and is a compliance requirement of NRB directive no. 4/075 and 8/075. The Bank isrequired to maintain balance in this reserve heading which is calculated at fixed percentages of the cost of equityinvestments that are not held for trading. Changes in this reserve requirement are reclassified to retained earnings.The Bank has consistently appropriated the required amount from each year’s profit into this heading. There is nosuch statutory requirement for the Subsidiary.
Actuarial gain / loss reserveThis is a non-statutory reserve and is a requirement in the application of accounting policy for employee benefits.NAS 19 requires that actuarial gain or loss resultant of the change in actuarial assumptions used to value definedbenefit obligations be presented under this reserve heading. Any change in this reserve heading is recognizedthrough other comprehensive income and is not an appropriation of net profit. The Group has complied with thisaccounting policy application.
Regulatory reserveThis is a statutory reserve and is a requirement in the application of accounting policy as prescribed in NRB directiveno. 4/075. In the transition to NFRS from previous GAAP the Bank is required to reclassify all amounts that areresultant of re-measurement adjustments and that are recognized in retained earnings into this reserve heading.The amount reclassified to this reserve includes re-measurement adjustments such as interest income recognizedagainst interest receivables, difference in loan loss provision as per NRB directive and impairment on loan andadvance as per NFRS, amount equals to deferred tax assets, actual loss recognized in other comprehensive income,amount of goodwill recognized under NFRS, etc. Balance in this reserve is not regarded as free for distribution ofdividend. The Bank has complied with this regulatory requirement. There is no such statutory requirement for theSubsidiary.
Other reserve fundEmployees training and capacity development fundThis is a statutory reserve and is a compliance requirement of NRB circular 6/075. The Bank is required to incurexpenses towards employee training and development for an amount that is equivalent to at least 3% of thepreceding year’s total personnel expenses. Any shortfall amount in meeting this mandatory expense requirementin the current year will have to be transferred to this reserve fund through appropriation of net profit and theamount shall accumulate in the fund available for related expenses in the subsequent year. Balance in this fund isdirectly reclassified to retained earnings in the subsequent year to the extent of expenses made for employeestraining related activities.
1 7 T H A N N U A L R E P O R T26
Financial Raised Cumulative RemarksYear Capital Capital
2058/ 59 30 mn 30 Mn. Initial Paid up Capital
2060/ 61 20 Mn. 50 Mn. Capital raised by Initial Public Offer (IPO)
2062/ 63 50 Mn. 100 Mn. Capital raised by Issuance of 1:1Right (1st Right Share)
2063/ 64 100 Mn. 200 Mn. Capital raised by Issuance of 1:1Right (2nd Right Share)
2064/ 65 600 Mn. 800 Mn. Capital raised by Issuance of 1:3Right (3rd Right Share)
2065/ 66 1,200 Mn. 2000 Mn. Capital raised by Issuance of 1:1.5Right share (4th Right Share)
2071/ 72 1,208.89 Mn. 3208.89 Mn. Merger with PBBL,GDBL and ZFL (Details following :)
2072/ 73 2,000 Mn. 5208.89 Mn. Merger with GBNL
2072/ 73 30.74 Mn. 5239.63 Mn. Acquisition of Nepal Development Bank Ltd. (in liquidation)
2072/ 73 641.78 Mn. 5,881.40Mn. Capital raised by Issuance of 5:1 Right Share
2073/ 74 2352.56 Mn. 8,233.96 Mn. Capital raised by Issuance of 10:4 Right Share
Paid up share capital of the Bank has moved over the years as follows:
Particulars Current Year Previous YearRegulatory/ Statutory reserves 3,410,720,204 1,470,014,862Free Reserve 925,577,720 1,999,486,585Retained Earning 773,629,731 1,882,122,101Share Premium 151,947,990 117,364,483Total 4,336,297,924 3,469,501,447
The reserves include regulatory and free reserves. Details of Regulatory/ Statutory Reserves are provided in 4.27.
1 Prabhu Bikas Bank Ltd. 765,964,0002 Gaurishankar Development Bank Ltd. 211,921,3003 Zenith Finance Ltd. 230,999,924
Additional shares issued to theshareholders to adjust the differencearising from Swap Ratio
S.N. Particulars Amount (NPR) Remarks
Explanatory NotesEquity Share Capital – over the year’s movements
Proposed Distributions (Dividends and Bonus Shares)The Board has recommended 5.263% as cash dividend (including tax on bonus shares) and 5% bonus shares for thereported year, 2017-18. This proposal of the Board of Directors is subject to the ratification by the Annual Generalmeeting of the Shareholders. The proposed distribution shall be recognised in equity in the period in which theyare paid.
1 7 T H A N N U A L R E P O R T26
Financial Raised Cumulative RemarksYear Capital Capital
2058/ 59 30 mn 30 Mn. Initial Paid up Capital
2060/ 61 20 Mn. 50 Mn. Capital raised by Initial Public Offer (IPO)
2062/ 63 50 Mn. 100 Mn. Capital raised by Issuance of 1:1Right (1st Right Share)
2063/ 64 100 Mn. 200 Mn. Capital raised by Issuance of 1:1Right (2nd Right Share)
2064/ 65 600 Mn. 800 Mn. Capital raised by Issuance of 1:3Right (3rd Right Share)
2065/ 66 1,200 Mn. 2000 Mn. Capital raised by Issuance of 1:1.5Right share (4th Right Share)
2071/ 72 1,208.89 Mn. 3208.89 Mn. Merger with PBBL,GDBL and ZFL (Details following :)
2072/ 73 2,000 Mn. 5208.89 Mn. Merger with GBNL
2072/ 73 30.74 Mn. 5239.63 Mn. Acquisition of Nepal Development Bank Ltd. (in liquidation)
2072/ 73 641.78 Mn. 5,881.40Mn. Capital raised by Issuance of 5:1 Right Share
2073/ 74 2352.56 Mn. 8,233.96 Mn. Capital raised by Issuance of 10:4 Right Share
Paid up share capital of the Bank has moved over the years as follows:
Particulars Current Year Previous YearRegulatory/ Statutory reserves 3,410,720,204 1,470,014,862Free Reserve 925,577,720 1,999,486,585Retained Earning 773,629,731 1,882,122,101Share Premium 151,947,990 117,364,483Total 4,336,297,924 3,469,501,447
The reserves include regulatory and free reserves. Details of Regulatory/ Statutory Reserves are provided in 4.27.
1 Prabhu Bikas Bank Ltd. 765,964,0002 Gaurishankar Development Bank Ltd. 211,921,3003 Zenith Finance Ltd. 230,999,924
Additional shares issued to theshareholders to adjust the differencearising from Swap Ratio
S.N. Particulars Amount (NPR) Remarks
Explanatory NotesEquity Share Capital – over the year’s movements
Proposed Distributions (Dividends and Bonus Shares)The Board has recommended 5.263% as cash dividend (including tax on bonus shares) and 5% bonus shares for thereported year, 2017-18. This proposal of the Board of Directors is subject to the ratification by the Annual Generalmeeting of the Shareholders. The proposed distribution shall be recognised in equity in the period in which theyare paid.
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As per NAS- 39, Share issue expenses have been charged to Share Premium Balance through Statement of Changesin Equity, as follows:
3.20 Earnings per Share including DilutedEarnings per share (EPS) is the portion of the company profit allocated to each outstanding share of thecommon stock. Diluted earnings per share is the calculation of the EPS if all convertible securities wereexercised. Bank has fully followed NAS 33 Earnings per Share for the calculation of EPS.
Basic earnings per share is calculated by dividing the net profit for the year attributable to equity holdersof the parent by the weighted average number of ordinary shares outstanding during the year, as per theNAS 33 - Earnings per Share.
The calculation of Diluted Earnings Per Share as at reporting date was based on the profit attributable toequity holders of the Bank by the weighted average number of ordinary shares outstanding during theyear, after adjustment for the effects of all potentially dilutive weighted average number of ordinaryshares.
3.21 Segment ReportingSegment Reporting is the reporting of the operating segment of the entity. A segment is reportable if:
· It has at least 10% of the revenues, 10% of the profit or loss, or 10% of the combined assets of theentity.
Fiscal Year 2015/ 2016 2016/ 2017 2017/ 2018Share Issue Expenses 3,809,575 2,574,855 8,931,825
2,018 2,017 Profit Attributable to ordinary Shareholders 967,034,844 1,486,500,834 Weighted average number of Ordinary Shares 76,890,435 74,918,204 Basic Earnings per Ordinary Share (Rs.) 12.58 19.84
Weighted average number 2018 2017of Ordinary Shares Outstanding Weighted Outstanding Weighted
Average AverageNumber of Shares held as at 58,814,022 58,814,022 58,814,022 58,814,0221st Shrawan 2074Add; Share Issue During The Year 7,421,282 1,972,231 -Add: Bonus Component of Right Issue 16,104,181 16,104,181 16,104,181 16,104,181Add: Issue For Merger Number of Shares held as at Ashadh 32 2075 82,339,485 76,890,435 74,918,204 74,918,204
Segment can be categorized either on the basis of geographic segment or business segment. The bank hascategorized its segment on the basis of functions and services provided to the customers. Segment as-sets, segment liabilities, total revenue, total expenses and operating profit are disclosed. Branches of thebank are classified under the regional operating structure for monitoring and supervision. The transac-tion between the branches are charged at transfer price decided by Asset Liability Management Commit-tee of the bank. The disclosure has been prepared in accordance with the requirements of NFRS however,interim segment results for the period has not been prepared except for the fourth quarter of the report-ing period.
1 7 T H A N N U A L R E P O R T28
Cash and Cash EquivalentFor the year ended 32 Asar 2075
Cash in Hand 2,961,880,496 3,238,058,517 2,961,880,496 3,238,043,349Balances with BFIs 1,802,712,456 1,151,243,969 1,032,303,813 1,134,882,816Money at Call and Short Notice 1,687,960,000 1,054,730,158 1,687,960,000 1,054,730,158Other Cash and Cash Equivalents 7,472,946,208 1,115,473,250 7,472,946,208 1,115,473,250Total 13,925,499,160 6,559,505,893 13,155,090,517 6,543,129,573
Annex 4.1
Due from Nepal Rastra BankFor the year ended 32 Asar 2075
Statutory Balances with NRB 5,935,117,155 9,026,525,696 5,935,117,155 9,026,525,696Securities purchased under - - - -Resale AgreementOther Deposit and 236,923,866 94,217,335 236,923,866 94,217,335Receivable from NRBTotal 6,172,041,021 9,120,743,031 6,172,041,021 9,120,743,031
Annex 4.2
Placements with Banks and Financial InstutionsFor the year ended 32 Asar 2075
Placement with Domestic BFIs - 464,175,000 - 464,175,000Placement with Foreign BFIs 2,215,410,511 1,444,100,000 2,215,410,511 1,444,100,000Less: Allowances for Impairment - - - -Total 2,215,410,511 1,908,275,000 2,215,410,511 1,908,275,000
Annex 4.3
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
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Derivative Financial InstrumentsFor the year ended 32 Asar 2075
Held for Trading - - Interest Rate Swap - - - - Currency Swap - - - - Forward Exchange Contracts - 22,823,158 - 22,823,158 Others - - - -Held for Risk Management - - Interest Rate Swap - - - - Currency Swap - - - - Forward Exchange Contracts. - - - - Others - - - -Total - 22,823,158 - 22,823,158
Annex 4.4
Other Trading AssetsFor the year ended 32 Asar 2075
Treasury Bills - - - -Government Bonds - - - -NRB Bonds - - - -Domestic Corporate Bonds - - - -Equities 150,909,909 58,986,506 - -Other Trading Assets - - - -Total 150,909,909 58,986,506 - -
Annex 4.5
Loans and Advances to BFIsFor the year ended 32 Asar 2075
Loans to Micro-Finance Institutions 3,213,867,013 1,812,718,640 3,213,867,013 1,812,718,640Other - - - -Less: Allowances for Impairment (32,058,238) (18,127,186) (32,058,238) (18,127,186)Total 3,181,808,776 1,794,591,453 3,181,808,776 1,794,591,453
Annex 4.6
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T28
Cash and Cash EquivalentFor the year ended 32 Asar 2075
Cash in Hand 2,961,880,496 3,238,058,517 2,961,880,496 3,238,043,349Balances with BFIs 1,802,712,456 1,151,243,969 1,032,303,813 1,134,882,816Money at Call and Short Notice 1,687,960,000 1,054,730,158 1,687,960,000 1,054,730,158Other Cash and Cash Equivalents 7,472,946,208 1,115,473,250 7,472,946,208 1,115,473,250Total 13,925,499,160 6,559,505,893 13,155,090,517 6,543,129,573
Annex 4.1
Due from Nepal Rastra BankFor the year ended 32 Asar 2075
Statutory Balances with NRB 5,935,117,155 9,026,525,696 5,935,117,155 9,026,525,696Securities purchased under - - - -Resale AgreementOther Deposit and 236,923,866 94,217,335 236,923,866 94,217,335Receivable from NRBTotal 6,172,041,021 9,120,743,031 6,172,041,021 9,120,743,031
Annex 4.2
Placements with Banks and Financial InstutionsFor the year ended 32 Asar 2075
Placement with Domestic BFIs - 464,175,000 - 464,175,000Placement with Foreign BFIs 2,215,410,511 1,444,100,000 2,215,410,511 1,444,100,000Less: Allowances for Impairment - - - -Total 2,215,410,511 1,908,275,000 2,215,410,511 1,908,275,000
Annex 4.3
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
291 7 T H A N N U A L R E P O R T
Derivative Financial InstrumentsFor the year ended 32 Asar 2075
Held for Trading - - Interest Rate Swap - - - - Currency Swap - - - - Forward Exchange Contracts - 22,823,158 - 22,823,158 Others - - - -Held for Risk Management - - Interest Rate Swap - - - - Currency Swap - - - - Forward Exchange Contracts. - - - - Others - - - -Total - 22,823,158 - 22,823,158
Annex 4.4
Other Trading AssetsFor the year ended 32 Asar 2075
Treasury Bills - - - -Government Bonds - - - -NRB Bonds - - - -Domestic Corporate Bonds - - - -Equities 150,909,909 58,986,506 - -Other Trading Assets - - - -Total 150,909,909 58,986,506 - -
Annex 4.5
Loans and Advances to BFIsFor the year ended 32 Asar 2075
Loans to Micro-Finance Institutions 3,213,867,013 1,812,718,640 3,213,867,013 1,812,718,640Other - - - -Less: Allowances for Impairment (32,058,238) (18,127,186) (32,058,238) (18,127,186)Total 3,181,808,776 1,794,591,453 3,181,808,776 1,794,591,453
Annex 4.6
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T30
Balance at Shrawan 01 18,127,186 31,737,655 18,127,186 31,737,655Impairment Losss for the year:
Charge for the year 13,931,051 13,931,051Recoveries/Reversal 13,610,469 13,610,469
Amount Written OffBalance at Asar End 32,058,238 18,127,186 32,058,238 18,127,186
Annex 4.6.1
Allowances for ImpairmentFor the year ended 32 Asar 2075
Loans and Advances measured 75,603,826,453 62,484,133,722 75,603,826,453 62,484,133,722at Amortized CostLess: Impairment Allowances - - - Collective Impairment (661,453,029) (571,170,446) (661,453,029) (571,170,446) Individual Impairment (1,952,141,495) (2,210,906,341) (1,952,141,495) (2,210,906,341)Net Amount 72,990,231,929 59,702,056,935 72,990,231,929 59,702,056,935Loans and Advances measured - -at FVTPLTotal 72,990,231,929 59,702,056,935 72,990,231,929 59,702,056,935
Annex 4.7
Loans and Advances to CustomersFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
311 7 T H A N N U A L R E P O R T
ProductTerm Loans 16,322,934,745 12,457,419,665 16,322,934,745 12,457,419,665Overdraft 9,596,953,170 8,471,915,643 9,596,953,170 8,471,915,643Trust Receipt/Import Loans 2,998,854,083 2,301,296,661 2,998,854,083 2,301,296,661Demand and other 11,670,334,920 9,472,424,700 11,670,334,920 9,472,424,700Working Capital LoansPersonal Residential Loans 9,578,903,293 8,899,207,426 9,578,903,293 8,899,207,426Real Estate Loans 5,229,604,397 5,003,898,234 5,229,604,397 5,003,898,234Margin Lending Loans 2,388,586,623 2,361,264,199 2,388,586,623 2,361,264,199Hire Purchase Loans 6,864,929,275 5,151,781,569 6,864,929,275 5,151,781,569Deprived Sector Loans 4,082,676,703 2,914,007,123 4,082,676,703 2,914,007,123Bills Purchased 2,358,595 13,171,902 2,358,595 13,171,902Staffs Loans 1,303,521,922 699,295,114 1,303,521,922 699,295,114Other 4,072,876,463 3,120,423,291 4,072,876,463 3,120,423,291
Sub-Total 74,112,534,189 60,866,105,527 74,112,534,189 60,866,105,527Interest Receivable 1,491,292,264 1,618,028,196 1,491,292,264 1,618,028,196Grand Total 75,603,826,453 62,484,133,723 75,603,826,453 62,484,133,723
Annex 4.7.1
Analysis of Loans and Advances - By ProductFor the year ended 32 Asar 2075
Nepalese Rupee 73,956,879,664 61,292,079,072 73,956,879,664 61,292,079,072Indian RupeeUnited States Dollar 1,646,946,789 1,026,886,376 1,646,946,789 1,026,886,376Great Britain PoundEuro 165,168,275 165,168,275Japanese YenChinese YuanOtherGrand Total 75,603,826,453 62,484,133,723 75,603,826,453 62,484,133,723
Annex 4.7.2
Analysis of Loans and Advances - By CurrencyFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T30
Balance at Shrawan 01 18,127,186 31,737,655 18,127,186 31,737,655Impairment Losss for the year:
Charge for the year 13,931,051 13,931,051Recoveries/Reversal 13,610,469 13,610,469
Amount Written OffBalance at Asar End 32,058,238 18,127,186 32,058,238 18,127,186
Annex 4.6.1
Allowances for ImpairmentFor the year ended 32 Asar 2075
Loans and Advances measured 75,603,826,453 62,484,133,722 75,603,826,453 62,484,133,722at Amortized CostLess: Impairment Allowances - - - Collective Impairment (661,453,029) (571,170,446) (661,453,029) (571,170,446) Individual Impairment (1,952,141,495) (2,210,906,341) (1,952,141,495) (2,210,906,341)Net Amount 72,990,231,929 59,702,056,935 72,990,231,929 59,702,056,935Loans and Advances measured - -at FVTPLTotal 72,990,231,929 59,702,056,935 72,990,231,929 59,702,056,935
Annex 4.7
Loans and Advances to CustomersFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
311 7 T H A N N U A L R E P O R T
ProductTerm Loans 16,322,934,745 12,457,419,665 16,322,934,745 12,457,419,665Overdraft 9,596,953,170 8,471,915,643 9,596,953,170 8,471,915,643Trust Receipt/Import Loans 2,998,854,083 2,301,296,661 2,998,854,083 2,301,296,661Demand and other 11,670,334,920 9,472,424,700 11,670,334,920 9,472,424,700Working Capital LoansPersonal Residential Loans 9,578,903,293 8,899,207,426 9,578,903,293 8,899,207,426Real Estate Loans 5,229,604,397 5,003,898,234 5,229,604,397 5,003,898,234Margin Lending Loans 2,388,586,623 2,361,264,199 2,388,586,623 2,361,264,199Hire Purchase Loans 6,864,929,275 5,151,781,569 6,864,929,275 5,151,781,569Deprived Sector Loans 4,082,676,703 2,914,007,123 4,082,676,703 2,914,007,123Bills Purchased 2,358,595 13,171,902 2,358,595 13,171,902Staffs Loans 1,303,521,922 699,295,114 1,303,521,922 699,295,114Other 4,072,876,463 3,120,423,291 4,072,876,463 3,120,423,291
Sub-Total 74,112,534,189 60,866,105,527 74,112,534,189 60,866,105,527Interest Receivable 1,491,292,264 1,618,028,196 1,491,292,264 1,618,028,196Grand Total 75,603,826,453 62,484,133,723 75,603,826,453 62,484,133,723
Annex 4.7.1
Analysis of Loans and Advances - By ProductFor the year ended 32 Asar 2075
Nepalese Rupee 73,956,879,664 61,292,079,072 73,956,879,664 61,292,079,072Indian RupeeUnited States Dollar 1,646,946,789 1,026,886,376 1,646,946,789 1,026,886,376Great Britain PoundEuro 165,168,275 165,168,275Japanese YenChinese YuanOtherGrand Total 75,603,826,453 62,484,133,723 75,603,826,453 62,484,133,723
Annex 4.7.2
Analysis of Loans and Advances - By CurrencyFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T32
SecuredMoveable/Immoveable Assets 72,298,191,732 57,045,990,746 72,298,191,732 57,045,990,746Gold and Silver 81,218,280 59,232,050 81,218,280 59,232,050Guarantee of Domestic BFIs - - - -Government Guarantee 126,019,824 125,278,223 126,019,824 125,278,223Guarantee of International Rated Bank - - - -Collateral of Export Document - - - -Collateral of Fixed Deposit Receipt 500,438,774 475,528,630 500,438,774 475,528,630Collatereal of Government Securities 11,068,662 3,627,677 11,068,662 3,627,677Counter Guarantee - - - -Personal Guarantee 640,130,693 348,297,225 640,130,693 348,297,225Other Collateral 1,946,758,489 4,426,179,171 1,946,758,489 4,426,179,171Subtotal 75,603,826,453 62,484,133,723 75,603,826,453 62,484,133,723Unsecured - - - -Grand Total 75,603,826,453 62,484,133,723 75,603,826,453 62,484,133,723
Annex 4.7.3
Analysis of Loans and Advances - By CollateralFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
331 7 T H A N N U A L R E P O R T
Specific Allowance for ImpairmentBalance at Shrawan 01 2,210,906,341 3,888,152,298 2,210,906,341 3,888,152,298Impairment Loss for the yearCharge for the year (258,764,847) (1,677,245,957) (258,764,847) (1,677,245,957)Recoveries/Reversals during the yearWrite-OffsExchange Rate Varianceon Foreign CurrencyOther MovementBalance at Asar End 1,952,141,495 2,210,906,341 1,952,141,495 2,210,906,341Collective Allowances for ImpairmentBalance at Sharawan 01 571,170,446 383,426,718 571,170,446 383,426,718Impairment Loss for the yearCharge/(Reversal) for the year 90,282,582 187,743,728 90,282,582 187,743,728Exchange Rate Varianceon Foreign CurrencyOther MovementBalance at Asar End 661,453,029 571,170,446 661,453,029 571,170,446Total Allowances for Impairment 2,613,594,523 2,782,076,788 2,613,594,523 2,782,076,788
Annex 4.7.4
Allowance for ImpairmentFor the year ended 32 Asar 2075
Investment Securities measured 6,965,562,195 7,966,371,623 6,965,562,195 7,966,371,623at Amortized CostInvestment in Equity 1,070,328,314 914,506,067 1,070,328,314 914,506,067measured at FVTOCITotal 8,035,890,509 8,880,877,691 8,035,890,509 8,880,877,691
Annex 4.8
Investment SecuritiesFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T32
SecuredMoveable/Immoveable Assets 72,298,191,732 57,045,990,746 72,298,191,732 57,045,990,746Gold and Silver 81,218,280 59,232,050 81,218,280 59,232,050Guarantee of Domestic BFIs - - - -Government Guarantee 126,019,824 125,278,223 126,019,824 125,278,223Guarantee of International Rated Bank - - - -Collateral of Export Document - - - -Collateral of Fixed Deposit Receipt 500,438,774 475,528,630 500,438,774 475,528,630Collatereal of Government Securities 11,068,662 3,627,677 11,068,662 3,627,677Counter Guarantee - - - -Personal Guarantee 640,130,693 348,297,225 640,130,693 348,297,225Other Collateral 1,946,758,489 4,426,179,171 1,946,758,489 4,426,179,171Subtotal 75,603,826,453 62,484,133,723 75,603,826,453 62,484,133,723Unsecured - - - -Grand Total 75,603,826,453 62,484,133,723 75,603,826,453 62,484,133,723
Annex 4.7.3
Analysis of Loans and Advances - By CollateralFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
331 7 T H A N N U A L R E P O R T
Specific Allowance for ImpairmentBalance at Shrawan 01 2,210,906,341 3,888,152,298 2,210,906,341 3,888,152,298Impairment Loss for the yearCharge for the year (258,764,847) (1,677,245,957) (258,764,847) (1,677,245,957)Recoveries/Reversals during the yearWrite-OffsExchange Rate Varianceon Foreign CurrencyOther MovementBalance at Asar End 1,952,141,495 2,210,906,341 1,952,141,495 2,210,906,341Collective Allowances for ImpairmentBalance at Sharawan 01 571,170,446 383,426,718 571,170,446 383,426,718Impairment Loss for the yearCharge/(Reversal) for the year 90,282,582 187,743,728 90,282,582 187,743,728Exchange Rate Varianceon Foreign CurrencyOther MovementBalance at Asar End 661,453,029 571,170,446 661,453,029 571,170,446Total Allowances for Impairment 2,613,594,523 2,782,076,788 2,613,594,523 2,782,076,788
Annex 4.7.4
Allowance for ImpairmentFor the year ended 32 Asar 2075
Investment Securities measured 6,965,562,195 7,966,371,623 6,965,562,195 7,966,371,623at Amortized CostInvestment in Equity 1,070,328,314 914,506,067 1,070,328,314 914,506,067measured at FVTOCITotal 8,035,890,509 8,880,877,691 8,035,890,509 8,880,877,691
Annex 4.8
Investment SecuritiesFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T34
Debt SecuritiesGovernment Bonds 4,534,080,000 6,583,210,000 4,534,080,000 6,583,210,000Government Treasury Bills 2,431,482,195 1,082,745,796 2,431,482,195 1,082,745,796Nepal Rastra Bank BondsNepal Rastra Bank Deposit InstrumentsOther 300,415,827 300,415,827Less: Specific Allowances for ImpairmentTotal 6,965,562,195 7,966,371,623 6,965,562,195 7,966,371,623
Annex 4.8.1
Investment Securities measured at Amortized CostFor the year ended 32 Asar 2075
Equity InstrumentsQuoted Equity Securities 746,194,594 891,144,767 746,194,594 891,144,767Unquoted Equity Securities 324,133,720 23,361,300 324,133,720 23,361,300
Total 1,070,328,314 914,506,067 1,070,328,314 914,506,067
Annex 4.8.2
Investment in Equity measured at FVTOCIFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T34
Debt SecuritiesGovernment Bonds 4,534,080,000 6,583,210,000 4,534,080,000 6,583,210,000Government Treasury Bills 2,431,482,195 1,082,745,796 2,431,482,195 1,082,745,796Nepal Rastra Bank BondsNepal Rastra Bank Deposit InstrumentsOther 300,415,827 300,415,827Less: Specific Allowances for ImpairmentTotal 6,965,562,195 7,966,371,623 6,965,562,195 7,966,371,623
Annex 4.8.1
Investment Securities measured at Amortized CostFor the year ended 32 Asar 2075
Equity InstrumentsQuoted Equity Securities 746,194,594 891,144,767 746,194,594 891,144,767Unquoted Equity Securities 324,133,720 23,361,300 324,133,720 23,361,300
Total 1,070,328,314 914,506,067 1,070,328,314 914,506,067
Annex 4.8.2
Investment in Equity measured at FVTOCIFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
351 7 T H A N N U A L R E P O R T
Annex 4.8.3
Information relating to Investment in EquitiesFor the year ended 32 Asar 2075
1.1 Arun Valley Hydropower Company Ltd. -2783 Ordinary Shares of Rs. 322.50 each 645,000 425,799 645,000 634,800 645,000 425,799 645,000 634,800(Including 783 Bonus Shares) - - - -3339 Ordinary Shares of Rs. 100 each at par 230,000 510,867 230,000 761,760 230,000 510,867 230,000 761,760(Including 1039 Bonus Shares) - - - -1.2 Asian Life Insurance Company Ltd. - - - -589 Ordinary Shares of Rs. 213.42 each 61,893 402,287 61,893 820,854 61,893 402,287 61,893 820,854(Including 299 Bonus Shares) - - - -250 Ordinary Shares of Rs. 371.18 each 88,341 170,750 88,341 347,004 88,341 170,750 88,341 347,004(Including 12 Bonus Shares) - - - -1.3 Butwal Power Co.Ltd - - - -8502 Ordinary Shares of Rs. 1575.84 each 9,470,352 3,885,414 9,470,352 5,271,240 9,470,352 3,885,414 9,470,352 5,271,240(Including 2314 Bonus) - - - -5395 Ordinary Shares of Rs. 100 each at par 539,500 2,465,515 539,500 3,344,900 539,500 2,465,515 539,500 3,344,9001.4 Credit Information Centre Ltd. - - - -44,720 Ordinary Shares of Rs. 100 each at par 1,895,700 1,895,700 1,895,700 1,895,700 1,895,700 1,895,700 1,895,700 1,895,700(Including 25,763 Bonus) - - - -11,664 Ordinary Shares of Rs. 530 each 6,181,920 6,181,920 6,181,920 6,181,920 6,181,920 6,181,920 6,181,920 6,181,920(Including 8,664 Bonus) - - - -1.5 First Micro Finance Dev Bank Ltd - - - -278,646 Ordinary Shares of Rs. 52.66 each at par 14,672,700 150,468,840 13,527,400 164,764,680 14,672,700 150,468,840 13,527,400 164,764,680(Including 38,276 Bonus) - - - -747,944 Promotor Shares of Rs. 100 each at par 69,384,500 230,366,752 36,310,100 281,833,500 69,384,500 230,366,752 36,310,100 281,833,500(Including 102,742 Bonus) - - - -1.6 ICRA Nepal Ltd - - - -7,600 Ordinary Shares of Rs. 100 each at par 760,000 760,000 760,000 760,000 760,000 760,000 760,000 760,0001.7 Nabil Balance Fund -1 - - - - -180,737 Ordinary Shares of Rs. 10 each - - 1,807,370 3,560,519 1,807,370 3,560,5191.8 Nepal Clearing House - - -55,056 Ordinary Shares of Rs. 100 each at par 5,505,600 5,505,600 5,505,600 5,505,600 5,505,600 5,505,600 5,505,600 5,505,6001.10 Nepal Life Insurance Ltd. - - - -3090 Ordinary Shares of Rs. 1425 each at par 2,480,925 3,244,500 2,480,925 4,674,048 2,480,925 3,244,500 2,480,925 4,674,048(Including 1349 Bonus) - - - -1.11 Khanikhola Hydropower Company Ltd - - - -378,996 Promoter Shares of Rs. 100 each at par 37,899,600 37,899,600 37,899,600 78,831,168 37,899,600 37,899,600 37,899,600 78,831,1681.12 Life Insurance Corporation (Nepal) Ltd. - - - -625 Bonus Shares only - 1,013,750 - 1,077,651 - 1,013,750 - 1,077,6511.13 NMB Hybrid Fund L -1 - - - -236,610 Ordinary Shares of Rs. 10 each at par 2,366,100 2,292,751 2,366,100 2,351,903 2,366,100 2,292,751 2,366,100 2,351,9031.14 NABIL Equity Fund - - -168,974 Ordinary Shares of Rs. 10 each at par 1,689,740 1,666,084 1,689,740 1,689,740 1,689,740 1,666,084 1,689,740 1,689,7401.15 NIBL Pragati Fund - - - -171,247 Ordinary Shares of Rs. 10 each at par 1,712,470 1,541,223 1,712,470 1,712,470 1,712,470 1,541,223 1,712,470 1,712,4701.16 National Life Insurance Company Ltd. - - - -5,393 Ordinary Shares of Rs. 1335.59 each 3,409,769 4,309,007 3,409,769 9,922,200 3,409,769 4,309,007 3,409,769 9,922,200(Including 2,840 Bonus) - - - -1.17 Nepal Doorsanchar Company Ltd. - - - -8,980 Ordinary Shares of Rs. 572.63 each 5,142,255 6,474,580 5,142,255 6,061,500 5,142,255 6,474,580 5,142,255 6,061,50029,390 Ordinary Shares of Rs. 582.02 each 17,105,592 21,190,190 17,105,592 19,838,250 17,105,592 21,190,190 17,105,592 19,838,250635 Ordinary Shares of Rs. 611.57 each 388,346 457,835 388,346 428,625 388,346 457,835 388,346 428,6253,170 Ordinary Shares of Rs. 617.32 each 1,956,894 2,285,570 1,956,894 2,139,750 1,956,894 2,285,570 1,956,894 2,139,750770 Ordinary Shares of Rs. 617.67 each 475,607 555,170 475,607 519,750 475,607 555,170 475,607 519,7501,270 Ordinary Shares of Rs. 619.37 each 786,597 915,670 786,597 857,250 786,597 915,670 786,597 857,2501,175 Ordinary Shares of Rs. 618.33 each 726,537 847,175 726,537 793,125 726,537 847,175 726,537 793,1251,050 Ordinary Shares of Rs. 620.02 each 651,018 757,050 651,018 708,750 651,018 757,050 651,018 708,7503,185 Ordinary Shares of Rs. 620.13 each 1,975,128 2,296,385 1,975,128 2,149,875 1,975,128 2,296,385 1,975,128 2,149,8752,175 Ordinary Shares of Rs. 620.17 each 1,348,860 1,568,175 1,348,860 1,468,125 1,348,860 1,568,175 1,348,860 1,468,1252,625 Ordinary Shares of Rs. 619.4 each 1,625,923 1,892,625 1,625,923 1,771,875 1,625,923 1,892,625 1,625,923 1,771,875915 Ordinary Shares of Rs. 620.67 each 567,916 659,715 567,916 617,625 567,916 659,715 567,916 617,6251,090 Ordinary Shares of Rs. 620.02 each 675,818 785,890 675,818 735,750 675,818 785,890 675,818 735,7505,190 Ordinary Shares of Rs. 618.43 each 3,209,634 3,741,990 3,209,634 3,503,250 3,209,634 3,741,990 3,209,634 3,503,250620 Ordinary Shares of Rs. 619.53 each 384,107 447,020 384,107 418,500 384,107 447,020 384,107 418,5005,840 Ordinary Shares of Rs. 618.89 each 3,614,333 4,210,640 3,614,333 3,942,000 3,614,333 4,210,640 3,614,333 3,942,0001.18 Riddhi Hydropower Development Company Ltd. - - - - - - - -156 Ordinary Shares of Rs. 100 each at par 13,000 19,188 13,000 31,899 13,000 19,188 13,000 31,899(Including 36 Bonus) - - - - - - - -1.19 Sana Kisan Bikas Bank Ltd. - - - - - - - -7,250 Ordinary Shares of Rs. 1080.18 each 3,343,164 8,410,000 3,343,164 7,556,562 3,343,164 8,410,000 3,343,164 7,556,562(Including 4,155 Bonus) - - - - - - - -1,798 Ordinary Shares of Rs. 100 each 179,800 2,085,680 179,800 2,700,596 179,800 2,085,680 179,800 2,700,596
Particulars Current Year Previous Year Current Year Previous Year
Bank Group
Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value
1 7 T H A N N U A L R E P O R T36
1.20 Siddhartha Investment Groth Scheme - 1 - - - - - - - -295,000 Ordinary Shares of Rs. 10 each - - 2,950,000 6,829,250 - - 2,950,000 6,829,2501.21 Siddhartha Equity Oriental Scheme - - - - - - - -176,931 Ordinary Shares of Rs. 10 each 1,769,310 1,866,622 1,769,310 2,098,402 1,769,310 1,866,622 1,769,310 2,098,4021.22 United Modi Hydropower Ltd. - - - - - - - -125,351 Promoter Shares of Rs. 100 each at par 12,535,100 12,535,100 12,535,100 42,744,691 12,535,100 12,535,100 12,535,100 42,744,691702,351 Ordinary Shares of Rs. 100 each at par - - - - - - - -1.23 Gorkha Hydro Power Company - - - - - - -759,000 Ordinary Shares of Rs. 100 each at par 75,900,000 - 75,900,000 - 75,900,000 - 75,900,000 -1.24 Nepal Co-operative Society Ltd. - - - - - - - -103,451 Ordinary Shares of Rs. 100 each at par 10,000,000 - 10,000,000 - 10,000,000 - 10,000,000 -1.25 General Insurance Company. - - - - - - - -1000 Ordinary Shares of Rs. 100 each at par 100,000 - 100,000 - 100,000 - 100,000 -1.26 Hydro Electricity Inv. & Dev. Company Ltd. (HIDCL). - - - - - - - -101,373 Ordinary Shares of Rs. 100 each at par 10,137,300 15,712,815 10,137,300 19,970,481 10,137,300 15,712,815 10,137,300 19,970,4811.27 Globle IME Samunnat Yojana - 1. - - - - - - - -474,658 Ordinary Shares of Rs. 10 each at par 4,746,580 4,162,751 4,746,580 4,836,765 4,746,580 4,162,751 4,746,580 4,836,7651.28 Mero Micro Finance Bittiya Sanstha Ltd. - - - - - - - -200,200 Promoter Shares of Rs. 100 each at par 14,000,000 14,000,000 14,000,000 14,000,000 14,000,000 14,000,000 14,000,000 14,000,0001.29 Nepal Banking Training Institute (NBTI). - - - - - - - -120,000 Promoter Shares of Rs. 100 each at par 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,0001.30 Prabhu Insurance Company Ltd. - - - - - - - -417,200 Promotor Shares of Rs. 553.29 each at par 193,650,328 229,877,200 193,650,328 192,850,000 193,650,328 229,877,200 193,650,328 192,850,000(Including 67,200 Bonus) - - - - - - - -1.31 Prabhu Life Insurance Company Ltd. - - - - - - - -2,000,000 Promotor Shares of Rs. 100 each at par 200,000,000 200,000,000 - - 200,000,000 200,000,000 -1.32 Siddhartha Equity Fund - - - - - - - -967,748 units of Rs. 10 each at par 9,677,480 9,251,671 - - 9,677,480 9,251,671 -1.33 Sanima Equity Fund - - - - - - - -1,200,000 units of Rs. 10 each at par 12,000,000 11,472,000 - - 12,000,000 11,472,000 -1.34 Citizens Mutual Fund - 1 - - - - - - - -1,000,000 units of Rs. 10 each at par 10,000,000 9,280,000 - - 10,000,000 9,280,000 -1.35 NIC Asia Growth Fund - - - - - - - -1,000,000 units of Rs. 10 each at par 10,000,000 9,190,000 - - 10,000,000 9,190,000 - -1.36 Mithila Laghubitta Bikas Bank Ltd. - - - - - - - -3 units Bonus Shares - 3,135 - - - 3,135 -1.37 Laxmi Laghubitta Bittiya Sanstha Ltd. - - - - - - - -8 units Bonus Shares - 9,128 - - - 9,128 -1.38 Smart Choice Technologies Ltd. - - - - - - - -103,896 units of Rs. 425 each 44,155,800 44,155,800 - - 44,155,800 44,155,800 - -Total 813,036,537 1,077,323,128 497,740,927 916,714,303 813,036,537 1,077,323,128 497,740,927 916,714,303Provision maintained for loss on investment (6,994,814) (2,208,236) (6,994,814) (2,208,236)Net Total Amount 813,036,537 1,070,328,314 497,740,927 914,506,067 813,036,537 1,070,328,314 497,740,927 914,506,067
Current Tax Assets - -Current year Income Tax Assets 43,049,281 35,460,803 38,573,248 32,911,140Tax Assets of Prior Periods - - - -
Current Tax Liabilities - -Current year Income Tax Liabilities - - - -Tax Liabilities of Prior Periods - - - -
Total 43,049,281 35,460,803 38,573,248 32,911,140
Annex 4.9
Current Tax AssetsFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
371 7 T H A N N U A L R E P O R T
Investment in Quoted Subsidiaries - - - -Investment in Unquoted Subsidiaries - - 116,960,880 45,560,880Total Investment - -Less: Impairment Allowances - - - -Net Carrying Amount - - 116,960,880 45,560,880
Annex 4.10
Investment in SubsidiariesFor the year ended 32 Asar 2075
Annex 4.10.2
Investment in Unquoted SubsidiariesFor the year ended 32 Asar 2075
Prabhu Capital Ltd.724,000 Promotor Shares of Rs. 100 each at par 72,400,000 Unquoted 10,000 Promotor Shares 1,000,000 Unquoted
of Rs. 100 each at par55,000 Promotor Shares of Rs. 155 each at par 8,525,000 Unquoted 55,000 Promotor Shares 8,525,000 Unquoted
of Rs. 155 each at par292,000 Promotor Shares of Rs. 146.64 each at par 42,818,880 Unquoted 292,000 Promotor Shares 42,818,880 Unquoted
of Rs. 146.64 each at parTotal 123,743,880 Unquoted 52,343,880 Unquoted
Particulars Cost Fair Value Cost Fair ValuePrevious YearCurrent Year
Bank
Annex 4.10.3
Information relating to Subsidiaries of the BankFor the year ended 32 Asar 2075
Prabhu Capital Ltd. 51% 51%Total 51% 51%
Current Year Previous YearPercentage of Ownership held by Bank
Bank
Annex 4.10.1
Investment in quoted SubsidiariesFor the year ended 32 Asar 2075
......... ltd., ............ per share ....................
......... ltd., ............ per share ....................
......... ltd., ............ per share ....................
......... ltd., ............ per share ....................Total
Particulars Cost Fair Value Cost Fair ValuePrevious YearCurrent Year
Bank
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T38
Investment in Quoted Subsidiaries - - - -Investment in Unquoted Subsidiaries - - - -Total Investment - - - -Less: Impairment Allowances - - - -Net Carrying Amount - - - -
Annex 4.11
Investment in AssociatesFor the year ended 32 Asar 2075
Quoted Equity Investment in AssociatesFor the year ended 32 Asar 2075 Annex 4.11.1
This Year Previous YearCost Price Fair Value
Bank GroupParticularsThis Year Previous Year
Cost Price Fair Value Cost Price Fair Value Cost Price Fair Value
..... ltd.,
........... per share .....
..... ltd.,
........... per share .....
Total
Annex 4.10.4
Non Controlling Interest of the SubsidiariesFor the year ended 32 Asar 2075
Prabhu Capital Ltd. …..Ltd. …..Ltd. …..Ltd.Equity Interest held by NCI (%) 49%Profit (Loss) allocated during the year (7,644,925)Accumulated Balances of NCI as on Asar End 99,973,387Dividend Paid to NCI (6,860,000)
GroupCurrent Year
Prabhu Capital Ltd. …..Ltd. …..Ltd. …..Ltd.Equity Interest held by NCI (%) 49%Profit (Loss) allocated during the year 1,236,169Accumulated Balances of NCI as on Asar End 45,827,265Dividend Paid to NCI -
GroupPrevious Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
391 7 T H A N N U A L R E P O R T
Details about Associated CompaniesFor the year ended 32 Asar 2075 Annex 4.11.3
Ownership (%)This Year
Bank GroupParticulars
............................................. ltd.
............................................. ltd.
............................................. ltd.
............................................. ltd.
Total
Ownership (%)
Equity Price of Associated CompaniesFor the year ended 32 Asar 2075 Annex 4.11.4
Ownership (%)This Year
Bank GroupParticulars
............................................. ltd.
............................................. ltd.
............................................. ltd.
............................................. ltd.
Total
Ownership (%)Previous Year This Year Previous Year
Unquoted Equity Investment in AssociatesFor the year ended 32 Asar 2075 Annex 4.11.2
This Year Previous YearCost Price Fair Value
Bank GroupParticulars This Year Previous YearCost Price Fair Value Cost Price Fair Value Cost Price Fair Value
..... ltd.,
........... per share .....
..... ltd.,
........... per share .....
Total
1 7 T H A N N U A L R E P O R T38
Investment in Quoted Subsidiaries - - - -Investment in Unquoted Subsidiaries - - - -Total Investment - - - -Less: Impairment Allowances - - - -Net Carrying Amount - - - -
Annex 4.11
Investment in AssociatesFor the year ended 32 Asar 2075
Quoted Equity Investment in AssociatesFor the year ended 32 Asar 2075 Annex 4.11.1
This Year Previous YearCost Price Fair Value
Bank GroupParticularsThis Year Previous Year
Cost Price Fair Value Cost Price Fair Value Cost Price Fair Value
..... ltd.,
........... per share .....
..... ltd.,
........... per share .....
Total
Annex 4.10.4
Non Controlling Interest of the SubsidiariesFor the year ended 32 Asar 2075
Prabhu Capital Ltd. …..Ltd. …..Ltd. …..Ltd.Equity Interest held by NCI (%) 49%Profit (Loss) allocated during the year (7,644,925)Accumulated Balances of NCI as on Asar End 99,973,387Dividend Paid to NCI (6,860,000)
GroupCurrent Year
Prabhu Capital Ltd. …..Ltd. …..Ltd. …..Ltd.Equity Interest held by NCI (%) 49%Profit (Loss) allocated during the year 1,236,169Accumulated Balances of NCI as on Asar End 45,827,265Dividend Paid to NCI -
GroupPrevious Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
391 7 T H A N N U A L R E P O R T
Details about Associated CompaniesFor the year ended 32 Asar 2075 Annex 4.11.3
Ownership (%)This Year
Bank GroupParticulars
............................................. ltd.
............................................. ltd.
............................................. ltd.
............................................. ltd.
Total
Ownership (%)
Equity Price of Associated CompaniesFor the year ended 32 Asar 2075 Annex 4.11.4
Ownership (%)This Year
Bank GroupParticulars
............................................. ltd.
............................................. ltd.
............................................. ltd.
............................................. ltd.
Total
Ownership (%)Previous Year This Year Previous Year
Unquoted Equity Investment in AssociatesFor the year ended 32 Asar 2075 Annex 4.11.2
This Year Previous YearCost Price Fair Value
Bank GroupParticulars This Year Previous YearCost Price Fair Value Cost Price Fair Value Cost Price Fair Value
..... ltd.,
........... per share .....
..... ltd.,
........... per share .....
Total
1 7 T H A N N U A L R E P O R T40
Investment Properties measured -at Fair ValueBalance as on Shrwawan 01. - - - -Addition/(Disposal) during the year. - - - -Net Changes in fair value during the year. - - - -Adjustment/Transfer. - - - -Net Amount - -Investment Propertiesmeasured at CostBalance as on Shrwawan 01 518,301,379 118,689,863 518,301,379 118,689,863Addition/(Disposal) during the year (49,770,932) 399,611,516 (49,770,932) 399,611,516Net Changes in fair value during the year - - - -Adjustment/Transfer (3,735,447) (2,753,630) (3,735,447) (2,753,630)Net Amount 464,795,000 515,547,750 464,795,000 515,547,750Total 464,795,000 515,547,750 464,795,000 515,547,750
Annex 4.12
Investment PropertiesFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
411 7 T H A N N U A L R E P O R T
CostAs on Shrawan 01 649,879,125 996,407,883 312,899,704 231,379,168 311,879,831 582,235,943 3,084,681,654Addition during the year 2,917,526 38,388,577 81,260,765 24,380,234 80,525,716 227,472,818 Acquisition 2,917,526 38,388,577 81,260,765 24,380,234 80,525,716 227,472,818 Capitalization -Disposal during the year (45,599,982) (9,825,716) (9,921,880) (65,347,578)Adjustment/Revaluation (9,170,722) (9,170,722)Balance as on Asar end 2074 649,879,125 999,325,409 342,117,558 - 267,039,951 - 326,434,349 652,824,863 3,237,621,255
Addition during the Year - 2,886,232 51,259,558 - 63,690,197 - 13,769,273 58,044,134 189,649,394 Acquisition - 2,886,232 51,259,558 63,690,197 13,769,273 58,044,134 189,649,394 Capitalization -Disposal during the year - (62,874,420) (2,108,494) (4,887,710) (69,870,625)Adjustment/Revaluation - (16,088,293) (16,088,293)Balance as on Asar end 2075 649,879,125 1,002,211,641 377,288,823 - 267,855,727 - 338,095,128 705,981,287 3,341,311,731
Depreciation and ImpairmentAs on Shrawan 01 118,639,436 167,528,323 126,548,115 167,276,292 386,682,176 966,674,342Depreciation charge for the year 43,939,839 25,483,299 30,731,079 22,925,372 62,288,169 185,367,757Impairment for the year -Disposals -Adjustments (4,562,437) (30,010,261) (6,802,307) (8,147,981) (49,522,987)As on Asar end 2074 162,579,275 188,449,184 - 127,268,933 - 183,399,358 440,807,447 1,102,504,196Impairment for the year - - - - - - - - -Depreciation charge for the year 41,933,930 28,897,959 32,842,105 22,970,383 62,899,209 189,543,585Disposals (43,334,354) (1,510,326) (4,026,080) (48,870,760)Adjustments (9,608,682) (9,608,682)As on Asar end 2075 - 204,513,205 207,738,461 - 116,776,683 - 204,859,415 499,680,576 1,233,568,340Capital Work in ProgressNet Book Value -As on Asar end 2073 649,879,125 877,768,447 145,371,381 - 104,831,053 - 144,603,539 195,553,767 2,118,007,312As on Asar end 2074 649,879,125 836,746,134 153,668,374 - 139,771,018 - 143,034,991 212,017,417 2,135,117,059 2,135,117,059As on Asar end 2075 649,879,125 797,698,436 169,550,362 - 151,079,044 - 133,235,713 206,300,711 2,107,743,391
Particulars Land BuildingLeaseholdProperties
Computer &Accessories Vehicles
Furniture& Fixtures Machinery
Equipment& others
Total Asarend 2075
Total Asarend 2074
Bank
Annex 4.13
Property and EquipmentFor the year ended 32 Asar 2075
CostAs on Shrawan 01 649,879,125 996,407,883 319,696,946 2,742,420 234,060,018 3,514,772 311,879,831 583,434,321 3,101,615,317Addition during the Year 2,917,526 38,400,832 198,470 84,199,765 34,510 24,380,234 80,525,716
Acquisition 2,917,526 38,400,832 198,470 84,199,765 34,510 24,380,234 80,525,716 227,472,818Capitalization - - - - - - - -
Disposal during the year - - - (48,280,832) - (9,825,716) (9,921,880) (65,347,578)Adjustment/Revaluation - (9,170,722) - - - - - (9,170,722)Balance as on Asar end 2074 649,879,125 999,325,409 348,927,056 2,940,890 269,978,951 3,549,283 326,434,349 654,038,158 3,255,073,220
Addition during the Year - 2,886,232 51,259,558 455,690 63,880,597 - 13,769,273 58,044,134 132,251,349Acquisition - 2,886,232 51,259,558 455,690 63,880,597 - 13,769,273 58,044,134 132,251,349Capitalization - - - - - - - - -
Disposal during the year - - - - (62,874,420) - (2,108,494) (4,887,710) (64,982,915)Adjustment/Revaluation - - (16,088,293) - - - - - (16,088,293)Balance as on Asar end 2075 649,879,125 1,002,211,641 384,098,320 3,396,580 270,985,127 3,549,283 338,095,128 707,194,582 3,359,409,785
Depreciation and ImpairmentAs on Shrawan 01. 20x0 118,639,436 171,406,157 1,441,470 129,026,405 2,669,517 167,276,292 387,502,968 977,962,246Depreciation charge for the year 43,939,839 26,087,751 430,750 31,122,233 48,626 22,925,372 62,396,325 186,950,896Impairment for the year - - - - - - - -Disposals - - - (2,478,290) - - - (2,478,290)Adjustment - (4,562,437) - (30,010,261) - (6,802,307) (8,147,981) (49,522,987)As on Asar end 2074 162,579,275 192,931,470 1,872,220 127,660,087 2,718,143 183,399,358 441,751,312 1,112,911,865Impairment for the year - - - - - - - -Depreciation charge for the year 41,933,930 29,502,411 488,807 33,506,934 48,626 22,970,383 63,006,979 191,458,070Disposals - - - (43,334,354) - (1,510,326) (4,026,080) (48,870,760)Adjustment - (9,608,682) - - - - - (9,608,682)As on Asar end 2075 204,513,205 212,825,199 2,361,027 117,832,667 2,766,769 204,859,415 500,732,211 1,245,890,493Capital Work in ProgressNet Book ValueAs on Asar end 2073 649,879,125 877,768,447 148,290,790 1,300,950 105,033,613 845,256 144,603,539 195,931,353 2,123,653,071As on Asar end 2074 649,879,125 836,746,134 155,995,586 1,068,669 142,318,864 831,140 143,034,991 212,286,846 2,142,161,355 2,142,161,355As on Asar end 2075 649,879,125 797,698,436 171,273,122 1,035,553 153,152,460 782,514 133,235,713 206,462,371 2,113,519,292
Particulars Land BuildingLeaseholdProperties
Computer &Accessories Vehicles
Furniture& Fixtures Machinery
Equipment& others
Total Asarend 2075
Total Asarend 2074
Group
1 7 T H A N N U A L R E P O R T42
Annex 4.14
Goodwill and Intangible AssetsFor the year ended 32 Asar 2075
CostAs on Shrawan 01. 2073 84,513,253 84,513,253Addition during the year. - 5,202,678 5,202,678
Acquisition. 5,202,678 5,202,678Capitalization. -
Disposal during the year. - -Adjustment/Revaluation. -Balance as on Asar end 2074 - 89,715,931 89,715,931
-Addition during the Year 11,132,726 11,132,726 -
Acquisition 11,132,726 11,132,726 -Capitalization - -
Disposal during the year - - -Adjustment/Revaluation - -Balance as on Asar end 2075 - 100,848,657 100,848,657 -
-Amortisation and Impairment -As on Shrawan 01 2073 66,476,335 66,476,335Amortisation charge for the year 8,384,283 8,384,283Impairment for the year -D ispo sa ls -Adjustment -As on Asar end 2074 - 74,860,618 74,860,618Impairment for the year - -Amortisation charge for the year 7,896,958 7,896,958 -Dispo sa ls - -Adjustment - -As on Asar end 2075 - 82,757,576 82,757,576 -Capital Work in Progress -Net Book Value -As on Asar end 2073 18,036,918 18,036,918 -As on Asar end 2074 - 14,855,313 14,855,313 -As on Asar end 2075 - 18,091,081 18,091,081 -
Group
Particulars Goodwill Purchased Developed OtherTotal Asar end
2075Total Asar end
2074
Software
1 7 T H A N N U A L R E P O R T42
Annex 4.14
Goodwill and Intangible AssetsFor the year ended 32 Asar 2075
CostAs on Shrawan 01. 2073 84,513,253 84,513,253Addition during the year. - 5,202,678 5,202,678
Acquisition. 5,202,678 5,202,678Capitalization. -
Disposal during the year. - -Adjustment/Revaluation. -Balance as on Asar end 2074 - 89,715,931 89,715,931
-Addition during the Year 11,132,726 11,132,726 -
Acquisition 11,132,726 11,132,726 -Capitalization - -
Disposal during the year - - -Adjustment/Revaluation - -Balance as on Asar end 2075 - 100,848,657 100,848,657 -
-Amortisation and Impairment -As on Shrawan 01 2073 66,476,335 66,476,335Amortisation charge for the year 8,384,283 8,384,283Impairment for the year -D isposa ls -Adjustment -As on Asar end 2074 - 74,860,618 74,860,618Impairment for the year - -Amortisation charge for the year 7,896,958 7,896,958 -Disposa ls - -Adjustment - -As on Asar end 2075 - 82,757,576 82,757,576 -Capital Work in Progress -Net Book Value -As on Asar end 2073 18,036,918 18,036,918 -As on Asar end 2074 - 14,855,313 14,855,313 -As on Asar end 2075 - 18,091,081 18,091,081 -
Group
Particulars Goodwill Purchased Developed OtherTotal Asar end
2075Total Asar end
2074
Software
431 7 T H A N N U A L R E P O R T
Annex 4.14
Goodwill and Intangible AssetsFor the year ended 32 Asar 2075
CostAs on Shrawan 01. 2073 83,964,228 83,964,228Addition during the year. 4,680,223 4,680,223
Acquisition. 4,680,223 4,680,223Capitalization. -
Disposal during the year. -Adjustment/Revaluation. -Balance as on Asar end 2074 88,644,451 88,644,451
-Addition during the Year 10,608,689 10,608,689 -
Acquisition 10,608,689 10,608,689 -Capitalization -
Disposal during the year -Adjustment/Revaluation -Balance as on Asar end 2075 99,253,139 99,253,139 -
-Amortisation and Impairment -As on Shrawan 01 2073 65,947,572 65,947,572Amortisation charge for the year 8,319,458 8,319,458Impairment for the year -Dispo sa ls -Adjustment -As on Asar end 2074 74,267,030 74,267,030Impairment for the year -Amortisation charge for the year 7,755,004 7,755,004 -Dispo sa ls -Adjustment -As on Asar end 2075 82,022,034 82,022,034 -Capital Work in Progress -Net Book Value - - - - -As on Asar end 2073 18,016,656 8,016,656 -As on Asar end 2074 14,377,421 14,377,421 14,377,421As on Asar end 2075 17,231,105 17,231,105 -
Bank
Particulars Goodwill Purchased Developed OtherTotal Asar end
2075Total Asar end
2074
Software
1 7 T H A N N U A L R E P O R T44
Annex 4.15
Deferred TaxFor the year ended 32 Asar 2075
Deferred tax on temporarydifferences on following items
Loans and Advances to BFIs -Loans and Advances to Customers 7,734,487 7,734,487 7,734,487 7,734,487Investment Properties (140,559,134) (140,559,134) (140,559,134) (140,559,134)Investment Securities 8482189 (29,341,706) (20,859,517) (29,341,706) (29,341,706)Property and Equipment 319,301 13,219,855 13,539,156 13,219,855 13,219,855Employees' Defined Benefit Plan 206,685,949 - 206,685,949 206,120,056 - 206,120,056Lease Liabilities - - - -Provisions 10,696,238 - 10,696,238 9,095,810 - 9,095,810Booking Of AIR (472,943,350) (472,943,350) (472,943,350) (472,943,350)Other Temporary Differences - - -
Deferred tax on temporary differences 226,183,677 (621,889,848) (395,706,171) 215,215,867 (621,889,848) (406,673,982)Deferred tax on carry forward of 19,499,216 19,499,216 19,499,216 19,499,216unused tax lossesDeferred tax due to changes -in tax rateNet Deferred Tax Asset (Liabilities) (376,206,955) (387,174,766) (387,174,766)as on year end of Asar 2075Deferred Tax (Asset)/ Liabilities (348,032,033) (349,582,267)as on Shrawan 01 Shrawan 2074Origination/(Reversal) (28,174,922) (37,592,499)during the yearDeferred Tax expense (income) (95,373,302) (95,373,302) -recognized in profit or lossDeferred Tax expense (income)recognized in OCI 57,780,803 57,780,803 -Deferred Tax expense (income)recognized directly in Equity
Group
Particulars
Bank
Deferred TaxAssets
Deferred TaxLiabilities
Current YearNet DeferredTax Assets /(Liabilities)
Deferred TaxAssets
Deferred TaxLiabilities
Current YearNet DeferredTax Assets /(Liabilities)
1 7 T H A N N U A L R E P O R T44
Annex 4.15
Deferred TaxFor the year ended 32 Asar 2075
Deferred tax on temporarydifferences on following items
Loans and Advances to BFIs -Loans and Advances to Customers 7,734,487 7,734,487 7,734,487 7,734,487Investment Properties (140,559,134) (140,559,134) (140,559,134) (140,559,134)Investment Securities 8482189 (29,341,706) (20,859,517) (29,341,706) (29,341,706)Property and Equipment 319,301 13,219,855 13,539,156 13,219,855 13,219,855Employees' Defined Benefit Plan 206,685,949 - 206,685,949 206,120,056 - 206,120,056Lease Liabilities - - - -Provisions 10,696,238 - 10,696,238 9,095,810 - 9,095,810Booking Of AIR (472,943,350) (472,943,350) (472,943,350) (472,943,350)Other Temporary Differences - - -
Deferred tax on temporary differences 226,183,677 (621,889,848) (395,706,171) 215,215,867 (621,889,848) (406,673,982)Deferred tax on carry forward of 19,499,216 19,499,216 19,499,216 19,499,216unused tax lossesDeferred tax due to changes -in tax rateNet Deferred Tax Asset (Liabilities) (376,206,955) (387,174,766) (387,174,766)as on year end of Asar 2075Deferred Tax (Asset)/ Liabilities (348,032,033) (349,582,267)as on Shrawan 01 Shrawan 2074Origination/(Reversal) (28,174,922) (37,592,499)during the yearDeferred Tax expense (income) (95,373,302) (95,373,302) -recognized in profit or lossDeferred Tax expense (income)recognized in OCI 57,780,803 57,780,803 -Deferred Tax expense (income)recognized directly in Equity
Group
Particulars
Bank
Deferred TaxAssets
Deferred TaxLiabilities
Current YearNet DeferredTax Assets /(Liabilities)
Deferred TaxAssets
Deferred TaxLiabilities
Current YearNet DeferredTax Assets /(Liabilities)
451 7 T H A N N U A L R E P O R T
Annex 4.15
Deferred TaxFor the year ended 32 Asar 2075
Deferred tax on temporarydifferences on following items
Loans and Advances to BFIsLoans and Advances to Customers 152,226,055 152,226,055 152,226,055 152,226,055Investment Properties (155,490,414) (155,490,414) (155,490,414) (155,490,414)Investment Securities 662,471 (75,747,742) (75,085,271) 662,471 (75,747,742) (75,085,271)Property and Equipment 14,914,147 14,914,147 14,697,277 14,697,277Employees' Defined Benefit Plan 153,719,360 153,719,360 153,415,730 153,415,730Lease Liabilities - -Provisions 8,027,101 8,027,101 6,997,366 6,997,366Booking of AIR (472,943,350) (472,943,350) (472,943,350) (472,943,350)Other Temporary Differences 999,597 999,597 999,597 999,597
Deferred tax on temporary differences 330,548,730 (704,181,505) (373,632,775) 328,998,496 (704,181,505) (375,183,009)Deferred tax on carry forward 25,600,742 25,600,742 25,600,742 25,600,742of unused tax lossesDeferred tax due to changes -in tax rateNet Deferred Tax Asset (Liabilities) (348,032,033) (349,582,267)as on year end of Asar 2074Deferred Tax (Asset)/ Liabilities 286,097,598 284,721,778as on Shrawan 01 2073Origination/(Reversal) (634,129,631) (634,304,045)during the yearDeferred Tax expense (income) 555,520,289 555,520,289recognized in profit or lossDeferred Tax expense (income) (78,783,756) (78,783,756)recognized in OCIDeferred Tax expense (income) -recognized directly in Equity
Group
Particulars
Bank
Deferred TaxAssets
Deferred TaxLiabilities
Previous YearNet DeferredTax Assets /(Liabilities)
Deferred TaxAssets
Deferred TaxLiabilities
Previous YearNet DeferredTax Assets /(Liabilities)
1 7 T H A N N U A L R E P O R T46
Assets held for Sale - - - -Other Non-Banking Assets. - - - -Bills Receivable - - - -Accounts Receivable 682,165,565 390,608,200 682,035,145 390,608,200Accrued Income 100,822,078 70,618,516 100,822,078 70,618,516Prepayments and Deposits 2,415,651,446 992,120,737 2,414,789,764 989,092,436Income Tax Deposit - - - -Deferred Employee Expenditure 851,910,997 432,612,307 851,910,997 432,612,307Other Assets 64,466,114 32,435,031 40,832,052 26,033,699Total 4,115,016,199 1,918,394,791 4,090,390,035 1,908,965,158
Annex 4.16
Other AssetsFor the year ended 32 Asar 2075
Money Market Deposits - - - -Interbank Borrowing - 215,240,103 - 215,240,103Other Deposits from BFIs - - - -Settlement and Clearing Accounts - - - -Other Deposits from BFIs - - - -Total - 215,240,103 - 215,240,103
Annex 4.17
Due to Banks and Financial InstitutionsFor the year ended 32 Asar 2075
Refinance from NRB 702,208,536 37,146,500 702,208,536 37,146,500Standing Liquidity Facility - - - -Lender of Last Resort facility from NRB - - - -Securities sold under repurchase agreements - - - -Other Payable to NRB - - - -Total 702,208,536 37,146,500 702,208,536 37,146,500
Annex 4.18
Due to Nepal Rastra BankFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
471 7 T H A N N U A L R E P O R T
Held for Trading - - -Interest Rate Swap - - - -Currency Swap - - - -Forward Exchange Contracts 45,846,461 - 45,846,461 -Others - - - -
Held for Risk Management - -Interest Rate Swap - - - -Currency Swap - - - -Forward Exchange Contracts. - - - -Others - - - -
Total 45,846,461 - 45,846,461 -
Annex 4.19
Derivative Financial InstrumentsFor the year ended 32 Asar 2075
Institutional Customers:Term Deposits. 19,603,594,023 13,575,171,910 19,603,594,023 13,575,171,910Call Deposits 16,179,709,351 18,074,690,077 16,179,709,351 18,074,690,077Current Deposits. 4,754,609,219 2,314,593,070 4,766,376,114 2,372,993,786Others. 889,677,080 677,017,650 889,677,080 677,017,650
Individual Customers:Term Deposits 17,003,608,425 11,739,991,384 17,003,608,425 11,739,991,384Saving Deposits 38,022,845,415 30,577,172,969 38,022,845,415 30,577,172,969Current Deposits 378,989,672 455,485,043 378,989,672 455,485,043Others 414,864,861 3,877,017,008 414,864,861 3,877,017,008
Total 97,247,898,047 81,291,139,111 97,259,664,942 81,349,539,827
Annex 4.20
Deposits from CustomersFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T46
Assets held for Sale - - - -Other Non-Banking Assets. - - - -Bills Receivable - - - -Accounts Receivable 682,165,565 390,608,200 682,035,145 390,608,200Accrued Income 100,822,078 70,618,516 100,822,078 70,618,516Prepayments and Deposits 2,415,651,446 992,120,737 2,414,789,764 989,092,436Income Tax Deposit - - - -Deferred Employee Expenditure 851,910,997 432,612,307 851,910,997 432,612,307Other Assets 64,466,114 32,435,031 40,832,052 26,033,699Total 4,115,016,199 1,918,394,791 4,090,390,035 1,908,965,158
Annex 4.16
Other AssetsFor the year ended 32 Asar 2075
Money Market Deposits - - - -Interbank Borrowing - 215,240,103 - 215,240,103Other Deposits from BFIs - - - -Settlement and Clearing Accounts - - - -Other Deposits from BFIs - - - -Total - 215,240,103 - 215,240,103
Annex 4.17
Due to Banks and Financial InstitutionsFor the year ended 32 Asar 2075
Refinance from NRB 702,208,536 37,146,500 702,208,536 37,146,500Standing Liquidity Facility - - - -Lender of Last Resort facility from NRB - - - -Securities sold under repurchase agreements - - - -Other Payable to NRB - - - -Total 702,208,536 37,146,500 702,208,536 37,146,500
Annex 4.18
Due to Nepal Rastra BankFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
471 7 T H A N N U A L R E P O R T
Held for Trading - - -Interest Rate Swap - - - -Currency Swap - - - -Forward Exchange Contracts 45,846,461 - 45,846,461 -Others - - - -
Held for Risk Management - -Interest Rate Swap - - - -Currency Swap - - - -Forward Exchange Contracts. - - - -Others - - - -
Total 45,846,461 - 45,846,461 -
Annex 4.19
Derivative Financial InstrumentsFor the year ended 32 Asar 2075
Institutional Customers:Term Deposits. 19,603,594,023 13,575,171,910 19,603,594,023 13,575,171,910Call Deposits 16,179,709,351 18,074,690,077 16,179,709,351 18,074,690,077Current Deposits. 4,754,609,219 2,314,593,070 4,766,376,114 2,372,993,786Others. 889,677,080 677,017,650 889,677,080 677,017,650
Individual Customers:Term Deposits 17,003,608,425 11,739,991,384 17,003,608,425 11,739,991,384Saving Deposits 38,022,845,415 30,577,172,969 38,022,845,415 30,577,172,969Current Deposits 378,989,672 455,485,043 378,989,672 455,485,043Others 414,864,861 3,877,017,008 414,864,861 3,877,017,008
Total 97,247,898,047 81,291,139,111 97,259,664,942 81,349,539,827
Annex 4.20
Deposits from CustomersFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T48
Nepalese Rupee 95,861,314,154 79,699,037,540 95,873,081,049 79,757,438,256Indian Rupee - - - -United States Dollar 1,338,894,380 1,584,020,802 1,338,894,380 1,584,020,802Great Britain Pound 8,031,923 7,505,863 8,031,923 7,505,863Euro 635,795 573,788 635,795 573,788Japanese Yen 39,004,371 - 39,004,371 -Chinese Yuan - - - -Other 17,422 1,117 17,422 1,117Total 97,247,898,047 81,291,139,111 97,259,664,942 81,349,539,827
Annex 4.20.1
Currency wise analysis of deposit from customersFor the year ended 32 Asar 2075
Domestic Borrowings - -Nepal Government - - - -Other Institutions. - - - -Other - - - -Sub Total - - - -
Foreign Borrowings - -Foreign Banks and Financial Institutions - - - -Multilateral Development Banks - - - -Other Institutions - - - -Sub Total - - - -
Total - - - -
Annex 4.21
BorrowingsFor the year ended 32 Asar 2075
Provisions for Redundancy - - - -Provisions for Restructuring - - - -Pending Legal Issues and Tax Litigation - - - -Onerous Contracts - - - -Other Provisions 23,453,428 23,593,106 23,324,554 23,324,554Total 23,453,428 23,593,106 23,324,554 23,324,554
Annex 4.22
ProvisionsFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
491 7 T H A N N U A L R E P O R T
Balance at Shrawan 01 23,593,106 23,593,106 23,324,554 23,324,554Provisions made during the year (139,678) -Provisions used during the yearProvisions reversed during the yearUnwind of DiscountBalance at Asar end 23,453,428 23,593,106 23,324,554 23,324,554
Annex 4.22.1
Movement in ProvisionFor the year ended 32 Asar 2075
Liabilities for emloyees 523,398,215 402,098,958 521,511,905 401,120,735defined benefit obligationsLiabilities for long service leave 165,493,104 110,385,053 165,493,104 110,265,031Short term employee benefits - - - -Bills payable 70,581,150 38,636,989 70,581,150 38,636,989Creditors and accruals 245,377,685 197,991,406 245,377,685 197,991,406Interest payable on deposits 49,191,817 22,942,713 49,191,817 22,942,713Interest payable on borrowing 9,995,598 31,189 9,995,598 31,189Liabilities on defered grant income - - - -Unpaid Dividend 30,224,915 67,208,804 30,224,915 31,040,065Liabilities under Finance Lease - - - -Employee bonus payable 150,049,927 229,981,610 150,049,927 228,425,580Other Liabilities 1,129,023,944 290,984,285 355,275,114 268,785,619Total 2,373,336,355 1,360,261,007 1,597,701,215 1,299,239,327
Annex 4.23
Other LiabilitiesFor the year ended 32 Asar 2075
Present value of unfunded obligationsPresent value of funded obligations 688,202,157 512,484,011 687,005,009 511,385,766Total present value of obligations 688,202,157 512,484,011 687,005,009 511,385,766Fair value of plan assetsPresent value of net obligations 688,202,157 512,484,011 687,005,009 511,385,766Recognised liability for 688,202,157 512,484,011 687,005,009 511,385,766defined benefit obligations
Annex 4.23.1
Defined Benefit ObligationFor the year ended 32 Asar 2075
The amounts recognised in the statements of financials positions are as follows :
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
491 7 T H A N N U A L R E P O R T
Balance at Shrawan 01 23,593,106 23,593,106 23,324,554 23,324,554Provisions made during the year (139,678) -Provisions used during the yearProvisions reversed during the yearUnwind of DiscountBalance at Asar end 23,453,428 23,593,106 23,324,554 23,324,554
Annex 4.22.1
Movement in ProvisionFor the year ended 32 Asar 2075
Liabilities for emloyees 523,398,215 402,098,958 521,511,905 401,120,735defined benefit obligationsLiabilities for long service leave 165,493,104 110,385,053 165,493,104 110,265,031Short term employee benefits - - - -Bills payable 70,581,150 38,636,989 70,581,150 38,636,989Creditors and accruals 245,377,685 197,991,406 245,377,685 197,991,406Interest payable on deposits 49,191,817 22,942,713 49,191,817 22,942,713Interest payable on borrowing 9,995,598 31,189 9,995,598 31,189Liabilities on defered grant income - - - -Unpaid Dividend 30,224,915 67,208,804 30,224,915 31,040,065Liabilities under Finance Lease - - - -Employee bonus payable 150,049,927 229,981,610 150,049,927 228,425,580Other Liabilities 1,129,023,944 290,984,285 355,275,114 268,785,619Total 2,373,336,355 1,360,261,007 1,597,701,215 1,299,239,327
Annex 4.23
Other LiabilitiesFor the year ended 32 Asar 2075
Present value of unfunded obligationsPresent value of funded obligations 688,202,157 512,484,011 687,005,009 511,385,766Total present value of obligations 688,202,157 512,484,011 687,005,009 511,385,766Fair value of plan assetsPresent value of net obligations 688,202,157 512,484,011 687,005,009 511,385,766Recognised liability for 688,202,157 512,484,011 687,005,009 511,385,766defined benefit obligations
Annex 4.23.1
Defined Benefit ObligationFor the year ended 32 Asar 2075
The amounts recognised in the statements of financials positions are as follows :
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T50
Equity securitiesGovernment bondsBank depositOtherTotal - - - -
Annex 4.23.2
Plan AssetsFor the year ended 32 Asar 2075
Plan assets comprise
Defined benefit obligations at Sawan 1 511,782,605 429,044,844 511,385,766 428,727,894Actuarial losses 69,114,374 1,058,850 69,114,374 1,058,850Benefits paid by the plan (16,262,594) (24,047,551) (16,262,594) (24,047,551)Current service costs and interest 123,068,784 105,726,462 122,767,463 105,646,573Defined benefit obligations at Asar end 687,703,169 511,782,605 687,005,009 511,385,766
Annex 4.23.3
Movement in the present value of defined benefit obligationsFor the year ended 32 Asar 2075
Fair value of plan assets at Sawan 1Contributions paid into the planBenefits paid during the yearActuarial (losses) gainsExpected return on plan assetsFair value of plan assets at Asar end - - - -
Annex 4.23.4
Movement in the fair value of plan assetsFor the year ended 32 Asar 2075
Current service costs 79,049,971 72,478,671 78,748,650 72,398,782Interest on obligation 39,988,658 33,247,791 39,988,658 33,247,791.00Past Service Cost 4,030,155 4,030,155Expected return on plan assetsTotal 123,068,784 105,726,462 122,767,463 105,646,573
Annex 4.23.5
Amount recognised in profit or lossFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
511 7 T H A N N U A L R E P O R T
Acturial (gain)/loss 33,129,315 (12,328,285) 33129315 (12,328,285)Total 33,129,315 (12,328,285) 33,129,315 (12,328,285)
Annex 4.23.6
Amount recognised in other comprehensive incomeFor the year ended 32 Asar 2075
Discount rate 8% 8% 8% 8%Expected return on plan asset 0% 0% 0% 0%Future salary increase 9% 9% 9% 9%Withdrawal rate 6% 6% 6% 6%
Annex 4.23.7
Actuarial assumptionsFor the year ended 32 Asar 2075
Debt securities issued designated - - - -as at fair value through profit or lossDebt securities issued at amortised cost - - - -Total - - -
Annex 4.24
Debt secutities issuedFor the year ended 32 Asar 2075
Redeemable preference shares - - - -Irredemable cumulative preference - - - -shares (liabilities componentOther - - - -Total - - - -
Annex 4.25
Subordinated LiabilitiesFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T50
Equity securitiesGovernment bondsBank depositOtherTotal - - - -
Annex 4.23.2
Plan AssetsFor the year ended 32 Asar 2075
Plan assets comprise
Defined benefit obligations at Sawan 1 511,782,605 429,044,844 511,385,766 428,727,894Actuarial losses 69,114,374 1,058,850 69,114,374 1,058,850Benefits paid by the plan (16,262,594) (24,047,551) (16,262,594) (24,047,551)Current service costs and interest 123,068,784 105,726,462 122,767,463 105,646,573Defined benefit obligations at Asar end 687,703,169 511,782,605 687,005,009 511,385,766
Annex 4.23.3
Movement in the present value of defined benefit obligationsFor the year ended 32 Asar 2075
Fair value of plan assets at Sawan 1Contributions paid into the planBenefits paid during the yearActuarial (losses) gainsExpected return on plan assetsFair value of plan assets at Asar end - - - -
Annex 4.23.4
Movement in the fair value of plan assetsFor the year ended 32 Asar 2075
Current service costs 79,049,971 72,478,671 78,748,650 72,398,782Interest on obligation 39,988,658 33,247,791 39,988,658 33,247,791.00Past Service Cost 4,030,155 4,030,155Expected return on plan assetsTotal 123,068,784 105,726,462 122,767,463 105,646,573
Annex 4.23.5
Amount recognised in profit or lossFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
511 7 T H A N N U A L R E P O R T
Acturial (gain)/loss 33,129,315 (12,328,285) 33129315 (12,328,285)Total 33,129,315 (12,328,285) 33,129,315 (12,328,285)
Annex 4.23.6
Amount recognised in other comprehensive incomeFor the year ended 32 Asar 2075
Discount rate 8% 8% 8% 8%Expected return on plan asset 0% 0% 0% 0%Future salary increase 9% 9% 9% 9%Withdrawal rate 6% 6% 6% 6%
Annex 4.23.7
Actuarial assumptionsFor the year ended 32 Asar 2075
Debt securities issued designated - - - -as at fair value through profit or lossDebt securities issued at amortised cost - - - -Total - - -
Annex 4.24
Debt secutities issuedFor the year ended 32 Asar 2075
Redeemable preference shares - - - -Irredemable cumulative preference - - - -shares (liabilities componentOther - - - -Total - - - -
Annex 4.25
Subordinated LiabilitiesFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T52
Ordinary shares 8,233,948,524 5,881,402,224 8,233,948,524 5,881,402,224Convertible preference shares - - - -(equity component only)Irredemable preference shares - - - -(equity component only)Perpetual debt - - - -(equity component only)Total 8,233,948,524 5,881,402,224 8,233,948,524 5,881,402,224
Annex 4.26
Share capitalFor the year ended 32 Asar 2075
Annex 4.26.1
Ordinary SharesFor the year ended 32 Asar 2075
Authorized Capital100,000,000 Ordinary share of Rs. 100 each 10,000,000,000 10,000,000,000 10,000,000,000Issued capital82,339,628 Ordinary share of Rs. 100 each 8,233,962,800 8,233,962,800 5,881,402,224Subscribed and paid up capital82,339,485 Ordinary share of Rs. 100 each 8,233,948,524 5,881,402,224 5,881,402,224Total 8,233,948,524 5,881,402,224 5,881,402,224
Previous YearCurrent YearBank
Particulars Previous Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Annex 4.26.2
Ordinary SharesFor the year ended 32 Asar 2075
Domestic ownership 99.94 8,228,615,224 99.91 5,876,068,924Nepal Government"A" class licensed institutionsOther licensed intitutionsOther Institutions 15.70 1,292,715,337 15.99 940,696,900Public 84.24 6,935,899,887 83.91 4,935,372,024OtherForeign ownership 0.06 5,333,300 0.09 5,333,300Total 100 8,233,948,524 100 5,881,402,224
Previous YearCurrent YearBank
ParticularsPercent Amount Percent Amount
1 7 T H A N N U A L R E P O R T52
Ordinary shares 8,233,948,524 5,881,402,224 8,233,948,524 5,881,402,224Convertible preference shares - - - -(equity component only)Irredemable preference shares - - - -(equity component only)Perpetual debt - - - -(equity component only)Total 8,233,948,524 5,881,402,224 8,233,948,524 5,881,402,224
Annex 4.26
Share capitalFor the year ended 32 Asar 2075
Annex 4.26.1
Ordinary SharesFor the year ended 32 Asar 2075
Authorized Capital100,000,000 Ordinary share of Rs. 100 each 10,000,000,000 10,000,000,000 10,000,000,000Issued capital82,339,628 Ordinary share of Rs. 100 each 8,233,962,800 8,233,962,800 5,881,402,224Subscribed and paid up capital82,339,485 Ordinary share of Rs. 100 each 8,233,948,524 5,881,402,224 5,881,402,224Total 8,233,948,524 5,881,402,224 5,881,402,224
Previous YearCurrent YearBank
Particulars Previous Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Annex 4.26.2
Ordinary SharesFor the year ended 32 Asar 2075
Domestic ownership 99.94 8,228,615,224 99.91 5,876,068,924Nepal Government"A" class licensed institutionsOther licensed intitutionsOther Institutions 15.70 1,292,715,337 15.99 940,696,900Public 84.24 6,935,899,887 83.91 4,935,372,024OtherForeign ownership 0.06 5,333,300 0.09 5,333,300Total 100 8,233,948,524 100 5,881,402,224
Previous YearCurrent YearBank
ParticularsPercent Amount Percent Amount
531 7 T H A N N U A L R E P O R T
Statutory general reserve 1,388,179,492 1,194,772,523 1,388,179,492 1,194,772,523Exchange equilisation reserve - 3,527,216 - 3,527,216Corporate social responsibility reserve 25,649,874 15,979,526 25,649,874 15,979,526Capital redemption reserve - - - -Regulatory reserve 1,797,008,722 - 1,797,008,722 -Investment adjustment reserve 124,503,880 53,103,880 124,503,880 53,103,880Capital reserve - - - -Assets revaluation reserve - - - -Fair value reserve 240,304,244 351,935,598 240,304,244 351,935,598Dividend equalisation reserve - - - -Actuarial gain (179,826,625) (156,636,104) (179,826,625) (156,636,104)Special reserve - - - -Other reserve 14,900,616 7,332,224 14,900,616 7,332,224Total 3,410,720,204 1,470,014,862 3,410,720,204 1,470,014,862
Annex 4.27
ReservesFor the year ended 32 Asar 2075
Contingent liabilities 19,421,888,130 13,997,916,074 19,421,888,130 13,997,916,074Undrawn and undisbursed facilities 2,162,077,582 1,578,536,887 2,162,077,582 1,578,536,887Capital commitment - - - -Lease Commitment - - - -Litigation 174,967,344 100,814,679 174,967,344 100,814,679Total 21,758,933,056 15,677,267,641 21,758,933,056 15,677,267,641
Annex 4.28
Contingent liabilities and commitmentsFor the year ended 32 Asar 2075
Acceptance and documentary credit 4,532,604,842 3,327,044,209 4,532,604,842 3,327,044,209Bills for collection 229,178,699 122,014,021 229,178,699 122,014,021Forward exchange contracts 3,489,109,912 2,366,679,529 3,489,109,912 2,366,679,529Guarantees 11,170,994,678 8,182,178,316 11,170,994,678 8,182,178,316Underwriting commitment - - - -Other commitments - - - -Total 19,421,888,130 13,997,916,074 19,421,888,130 13,997,916,074
Annex 4.28.1
Contingent LiabilitiesFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T54
Undisbursed amount of loans - -Undrawn limits of overdrafts 2,162,077,582 1,578,536,887 2,162,077,582 1,578,536,887Undrawn limits of credit cards - -Undrawn limits of letter of credit - -Undrawn limits of guarantee - -Total 2,162,077,582 1,578,536,887 2,162,077,582 1,578,536,887
Annex 4.28.2
Undrawn and undisbursed facilitiesFor the year ended 32 Asar 2075
Capital expenditure approved by relevant authority of the bank but provision has not been made in financial statements
Capital commitments in relationto Property and EquipmentApproved and contracted forApproved but not contracted forSub totalCapital commitments in relationto Intangible assetsApproved and contracted forApproved but not contracted forSub totalTotal
Annex 4.28.3
Capital commitmentsFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T54
Undisbursed amount of loans - -Undrawn limits of overdrafts 2,162,077,582 1,578,536,887 2,162,077,582 1,578,536,887Undrawn limits of credit cards - -Undrawn limits of letter of credit - -Undrawn limits of guarantee - -Total 2,162,077,582 1,578,536,887 2,162,077,582 1,578,536,887
Annex 4.28.2
Undrawn and undisbursed facilitiesFor the year ended 32 Asar 2075
Capital expenditure approved by relevant authority of the bank but provision has not been made in financial statements
Capital commitments in relationto Property and EquipmentApproved and contracted forApproved but not contracted forSub totalCapital commitments in relationto Intangible assetsApproved and contracted forApproved but not contracted forSub totalTotal
Annex 4.28.3
Capital commitmentsFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
551 7 T H A N N U A L R E P O R T
Operating lease commitmentsFuture minimum lease paymentsunder non cancellable operatinglease, where the bank is lesseeNot later than 1 yearLater than 1 year but not laterthan 5 yearsLater than 5 yearsSub total
Finance lease commitmentsFuture minimum lease paymentsunder non cancellable operatinglease, where the bank is lesseeNot later than 1 yearLater than 1 year but notlater than 5 yearsLater than 5 yearsSub totalGrand total
Annex 4.28.4
Lease commitmentsFor the year ended 32 Asar 2075
Possible Income Tax Liability 174,967,344 100,814,679 174,967,344 100,814,679Total 174,967,344 100,814,679 174,967,344 100,814,679
Annex 4.28.5
Pending LitigationsFor the year ended 32 Asar 2075
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
Bank GroupParticulars Current Previous Current Previous
Year Year Year Year
1 7 T H A N N U A L R E P O R T56
Annex 4.29
Interest IncomeFor the year ended 32 Asar 2075
Cash and cash equivalent 22,269,734 21,688,838 22,269,734 21,688,838Due from Nepal Rastra Bank - - - -Placement with bank and financial institutions 4,237,414 3,264,062 4,237,414 3,264,062Loan and advances to bank and financial institutions - - - -Loans and advances to customers 7,515,203,262 4,758,966,628 7,515,203,262 4,758,966,628Investment securities 439,402,365 282,084,831 430,341,104 282,084,831Loan and advances to staff 272,545,937 145,695,418 272,545,937 134,754,733Other Interest Income - - - -Total interest income 8,253,658,712 5,211,699,777 8,244,597,451 5,200,759,092
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.30
Interest ExpensesFor the year ended 32 Asar 2075
Due to bank and financial institutions - - - -Due to Nepal Rastra Bank (31,113,973) - (31,113,973) -Deposits from customers (5,381,070,877) (2,953,959,016) (5,386,797,278) (2,955,932,103)Borrowing (8,683,644) (1,705,052) (8,683,644) (1,705,052)Debt securities issued - - - -Subordinated liabilities - - - -Other Charges - - - -Total Interest expense (5,420,868,494) (2,955,664,068) (5,426,594,895) (2,957,637,155)
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.31
Fees and Commission IncomeFor the year ended 32 Asar 2075
Loan administration fees - - - -Service fees 198,597,920 197,705,220 198,597,920 197,705,220Consortium fees - - - -Commitment fees - - - -DD/TT/Swift fees 54,878,631 33,834,593 54,878,631 33,834,593Credit card/ATM issuance and renewal fees 91,921,499 76,453,421 91,921,499 76,453,421Prepayment and swap fees - - - -Investment banking fees - - - -Asset management fees - - - -Brokerage fees - - - -Remittance fees - - - -Commission on letter of credit - - - -Commission on guarantee contracts issued - - - -Commission on share underwriting/issue - - - -Locker rental 6,399,716 5,335,450 6,399,716 5,335,450Other fees and commision income 262,342,904 206,794,038 262,342,904 206,794,038Total Fees and Commission Income 614,140,670 520,122,723 614,140,670 520,122,723
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
571 7 T H A N N U A L R E P O R T
Annex 4.32
Fees and Commission ExpenseFor the year ended 32 Asar 2075
ATM management fees - - - -VISA/Master card fees (12,172,827) (13,426,844) (12,172,827) (13,426,844)Guarantee commission - - - -Brokerage - - - -DD/TT/Swift fees. - - - -Remittance fees and commission (48,261,083) - (48,261,083) -Other fees and commission expense (10,529,269) (41,613,440) (10,529,269) (41,613,440)Total Fees and Commission Expense (70,963,179) (55,040,284) (70,963,179) (55,040,284)
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.33
Net Trading incomeFor the year ended 32 Asar 2075
Changes in fair value of trading assets (25,904,933) 12,592,043 - -Gain/loss on disposal of trading assets - - - -Interest income on trading assets - - - -Dividend income on trading assets - - - -Gain/loss foreign exchange transation 341,153,748 192,666,836 341,153,748 192,666,836Other - - - -Net trading income 315,248,814 205,258,878 341,153,748 192,666,836
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.34
Other Operating IncomeFor the year ended 32 Asar 2075
Foreign exchange revauation gain (82,540,047) (2,206,114) (82,540,047) (2,206,114)Gain/loss on sale of investment securities 4,340,913 30,372,995 4,340,913 30,372,995Fair value gain/loss on investment properties - - - -Dividend on equity instruments 19,169,800 3,745,498 19,169,800 3,745,498Gain/loss on sale of property and equipment 5,051,816 (721,456) 5,051,816 (721,456)Gain/loss on sale of investment property - - - -Operating lease income - - - -Gain/loss on sale of gold and silver - - - -Other Operating Income 117,175,018 82,177,161 108,668,075 98,978,543Total 63,197,500 113,368,084 54,690,557 130,169,466
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.35
Impairment charge/(reversal) for loan and other lossesFor the year ended 32 Asar 2075
Impairment charge/(reversal) on loan and advances to BFIs - - - -Impairment charge/(reversal) on loan and advances to customers 154,551,213 1,503,433,280 154,551,213 1,503,433,280Impairment charge/(reversal) on financial Investment - - - -Impairment charge/(reversal) on placement with BFIs - - - -Impairment charge/(reversal) on property and equipment - - - -Impairment charge/(reversal) on goodwill and intangible assets - - - -Impairment charge/(reversal) on investment properties - - - -Total 154,551,213 1,503,433,280 154,551,213 1,503,433,280
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
1 7 T H A N N U A L R E P O R T56
Annex 4.29
Interest IncomeFor the year ended 32 Asar 2075
Cash and cash equivalent 22,269,734 21,688,838 22,269,734 21,688,838Due from Nepal Rastra Bank - - - -Placement with bank and financial institutions 4,237,414 3,264,062 4,237,414 3,264,062Loan and advances to bank and financial institutions - - - -Loans and advances to customers 7,515,203,262 4,758,966,628 7,515,203,262 4,758,966,628Investment securities 439,402,365 282,084,831 430,341,104 282,084,831Loan and advances to staff 272,545,937 145,695,418 272,545,937 134,754,733Other Interest Income - - - -Total interest income 8,253,658,712 5,211,699,777 8,244,597,451 5,200,759,092
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.30
Interest ExpensesFor the year ended 32 Asar 2075
Due to bank and financial institutions - - - -Due to Nepal Rastra Bank (31,113,973) - (31,113,973) -Deposits from customers (5,381,070,877) (2,953,959,016) (5,386,797,278) (2,955,932,103)Borrowing (8,683,644) (1,705,052) (8,683,644) (1,705,052)Debt securities issued - - - -Subordinated liabilities - - - -Other Charges - - - -Total Interest expense (5,420,868,494) (2,955,664,068) (5,426,594,895) (2,957,637,155)
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.31
Fees and Commission IncomeFor the year ended 32 Asar 2075
Loan administration fees - - - -Service fees 198,597,920 197,705,220 198,597,920 197,705,220Consortium fees - - - -Commitment fees - - - -DD/TT/Swift fees 54,878,631 33,834,593 54,878,631 33,834,593Credit card/ATM issuance and renewal fees 91,921,499 76,453,421 91,921,499 76,453,421Prepayment and swap fees - - - -Investment banking fees - - - -Asset management fees - - - -Brokerage fees - - - -Remittance fees - - - -Commission on letter of credit - - - -Commission on guarantee contracts issued - - - -Commission on share underwriting/issue - - - -Locker rental 6,399,716 5,335,450 6,399,716 5,335,450Other fees and commision income 262,342,904 206,794,038 262,342,904 206,794,038Total Fees and Commission Income 614,140,670 520,122,723 614,140,670 520,122,723
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
571 7 T H A N N U A L R E P O R T
Annex 4.32
Fees and Commission ExpenseFor the year ended 32 Asar 2075
ATM management fees - - - -VISA/Master card fees (12,172,827) (13,426,844) (12,172,827) (13,426,844)Guarantee commission - - - -Brokerage - - - -DD/TT/Swift fees. - - - -Remittance fees and commission (48,261,083) - (48,261,083) -Other fees and commission expense (10,529,269) (41,613,440) (10,529,269) (41,613,440)Total Fees and Commission Expense (70,963,179) (55,040,284) (70,963,179) (55,040,284)
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.33
Net Trading incomeFor the year ended 32 Asar 2075
Changes in fair value of trading assets (25,904,933) 12,592,043 - -Gain/loss on disposal of trading assets - - - -Interest income on trading assets - - - -Dividend income on trading assets - - - -Gain/loss foreign exchange transation 341,153,748 192,666,836 341,153,748 192,666,836Other - - - -Net trading income 315,248,814 205,258,878 341,153,748 192,666,836
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.34
Other Operating IncomeFor the year ended 32 Asar 2075
Foreign exchange revauation gain (82,540,047) (2,206,114) (82,540,047) (2,206,114)Gain/loss on sale of investment securities 4,340,913 30,372,995 4,340,913 30,372,995Fair value gain/loss on investment properties - - - -Dividend on equity instruments 19,169,800 3,745,498 19,169,800 3,745,498Gain/loss on sale of property and equipment 5,051,816 (721,456) 5,051,816 (721,456)Gain/loss on sale of investment property - - - -Operating lease income - - - -Gain/loss on sale of gold and silver - - - -Other Operating Income 117,175,018 82,177,161 108,668,075 98,978,543Total 63,197,500 113,368,084 54,690,557 130,169,466
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.35
Impairment charge/(reversal) for loan and other lossesFor the year ended 32 Asar 2075
Impairment charge/(reversal) on loan and advances to BFIs - - - -Impairment charge/(reversal) on loan and advances to customers 154,551,213 1,503,433,280 154,551,213 1,503,433,280Impairment charge/(reversal) on financial Investment - - - -Impairment charge/(reversal) on placement with BFIs - - - -Impairment charge/(reversal) on property and equipment - - - -Impairment charge/(reversal) on goodwill and intangible assets - - - -Impairment charge/(reversal) on investment properties - - - -Total 154,551,213 1,503,433,280 154,551,213 1,503,433,280
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
1 7 T H A N N U A L R E P O R T58
Annex 4.36
Personnel ExpensesFor the year ended 32 Asar 2075
Salary (455,363,790) (326,742,825) (449,575,644) (323,679,394)Allowances (387,366,514) (308,106,427) (384,075,381) (308,106,427)Gratuity Expense (95,693,328) (119,033,708) (95,430,702) (121,280,326)Provident Fund (41,885,531) (31,127,317) (41,652,481) (31,127,317)Uniform (462,500) - - -Training & development expense (16,893,938) (14,568,223) (16,754,073) (14,568,223)Leave encashment (63,483,145) (63,259,975) 2,246,618Medical (44,663,277) (33,874,699) (44,475,811) (33,874,699)Insurance (26,025,907) (22,395,406) (26,025,907) (22,395,406)Employees incentive - - - -Cash-settled share-based payments - - - -Pension expense - - - -Finance expense under NFRS (77,302,398) (48,801,050) (77,302,398) (48,801,050)Other expenses related to staff (31,501) (83,040) (31,501) (83,040)Subtotal (1,209,171,828) (904,732,696) (1,198,583,873) (901,669,265)Employees Bonus (150,049,927) (228,425,580) (150,049,927) (228,425,580)Grand total (1,359,221,755) (1,133,158,276) (1,348,633,800) (1,130,094,845)
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.37
Other Operating ExpenseFor the year ended 32 Asar 2075
Directors' fee (1,704,117) (1,111,576) (1,704,117) (1,111,576)Directors' expense - - - -Auditors' remuneration (12,202,087) (1,515,134) (12,202,087) (1,515,134)Other audit related expense - - - -Professional and legal expense (4,528,170) (1,620,864) (4,528,170) (1,620,864)Office administration expense (124,494,369) (108,804,417) (124,494,369) (108,804,417)Operating lease expense (133,020,692) (121,293,659) (133,020,692) (121,293,659)Operating expense of investment properties - - - -Corporate social responsibility expense - - - -Onerous lease provisions - - - -Other Expenses (349,768,903) (327,236,895) (341,855,453) (324,255,662)Total (625,718,338) (561,582,545) (617,804,888) (558,601,312)
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.38
Depreciation and AmortisationFor the year ended 32 Asar 2075
Depreciation on property and equipment (199,213,027) (194,081,891) (197,298,542) (193,687,216)Depreciation on investment property (981,818) (850,510) (981,818) (850,510)Amortisation of intangible assets (2,992,937) (3,483,437) (2,850,983) (3,418,613)Total (203,187,781) (198,415,838) (201,131,342) (197,956,338)
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
591 7 T H A N N U A L R E P O R T
Annex 4.39
Non Operating IncomeFor the year ended 32 Asar 2075
Recovery of loan written off 6,500,000 50,000 6,500,000 50,000Other income - - - -Total 6,500,000 50,000 6,500,000 50,000
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.40
Non Operating ExpensesFor the year ended 32 Asar 2075
Loan written off (398,278,373) (350,834,129) (398,278,373) (350,834,129)Redundancy provision - - - -Expense of restructuring - - - -Other expense. (1,777,817) 1,431,796 (1,777,817) 1,431,796Total (400,056,190) (349,402,333) (400,056,190) (349,402,333)
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.41
Income Tax ExpensesFor the year ended 32 Asar 2075
Current tax expense - - - -Current year (280,474,914) (252,072,495) (288,041,198) (252,072,495)Adjustments for prior years - (3,015,216) - (4,375,512)Deferred tax expense - - - -Origination and reversal of temporary differences (95,373,302) (555,520,289) (95,373,302) (555,520,289)Changes in tax rate - - - -Recognition of previously unrecognised tax losses - - - -Total income tax expense (375,848,216) (810,608,000) (383,414,500) (811,968,216)
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
Annex 4.41.1
Reconciliation of tax expense and accounting profitFor the year ended 32 Asar 2075
Profit before tax 1,327,281,171 2,300,669,398 1,350,449,344 2,298,469,129Tax amount at tax rate of……….% 399,551,443 690,901,035 405,134,803 689,540,739Add: Tax effect of expenses that are 12,099 541,728 12,099 541,728not deductible for tax purposeLess: Tax effect on exempt income 8,438,101 6,308,680 8,430,487 3,588,088Add/less: Tax effect on other items 13,301,915 (125,473,918) 13,301,915 (125,473,918)Total income tax expense 377,823,526 810,608,000 383,414,500 811,968,296Effective tax rate 28.47% 35.23% 28.39% 35.33%
Particulars Previous YearCurrent Year Previous YearCurrent Year
BankGroup
1 7 T H A N N U A L R E P O R T60
Opening balance in retained earningsNet profit / (loss) as per statement of profit or loss 967,034,844 1,486,500,834Less: appropriations (-) / contributions (+):
a. General reserve (193,406,969) (319,590,511)b. Foreign exchange fluctuation fund 3,527,216 2,206,114c. Capital redemption reserve - -d. Corporate social responsibility fund (9,670,348) (15,979,526)e. Employees' training fund (7,568,393) (7,332,224)f. Investment adjustment reserves (71,400,000) 80,315,820g. Others: - -
Profit or (loss) before regulatory adjustment 688,516,350 1,226,120,508Regulatory adjustment :
a. Interest receivable (-)/previous accrued interest received (+) (1,322,847,776) -b. Short loan loss provision in accounts (-)/reversal (+) - -c. Short provision for possible losses on investment (-)/reversal (+) - -d. Short loan loss provision on Non Banking Assets (-)/resersal (+) (464,795,000) -e. Deferred tax assets recognised (-)/ reversal (+) - -f. Goodwill recognised (-)/ impairment of Goodwill (+) - -g. Bargain purchase gain recognised (-)/resersal (+) - -h. Acturial loss recognised (-)/reversal (+) (9,365,946) -i. Other (+/-) - -
Distributable profit or (loss) - Current Year (1,108,492,370) 1,226,120,508
Bank
NPR.
Statement of distributable profit or lossFor the year ended 32 Asar 2075 (July 16, 2018)
(As per NRB Regulations)
Particulars2075 Asar 32 2074 Asar 32
611 7 T H A N N U A L R E P O R T
5. Disclosures & Additional Information
5.1 Risk managementRisk is inevitable naturally for the banking business and because of that profit and prestige are the indeedreward for the risk management. Prabhu Bank clearly understands that excessive or poorly managed risk,side by side, taking the risk beyond its risk capacity, can lead both financial and non-financial losses. Risktaking attitude can be considered logical only when the risks are understandable, measurable, control-lable and are within the Bank’s risk capacity. Sound risk management system in doing business enablesthe Bank to take risks in systematic manner by understanding the risk capacity, setting the risk appetiteand risk tolerance.
Given the ground, Prabhu Bank, in line with Nepal Rastra Bank’s Directives /guideline paper and its ownRisk Management Policy, is moving ahead with a formation of comprehensive mechanism to identify,assess, measure, monitor and control of all types of risks. The Bank’s current risk management structuralframework is as follows:
Board ofDirectors
Risk ManagmentCommittee
Chief ExecutiveOfficer
AuditComittee
AMLCommittee
Risk ManagmentCommittee
Risk ManagmentCommittee
Risk ManagmentCommittee
Risk ManagmentCommittee
CreditRisk Unit
Operation RiskUnit /ISO
Market & OtherRisk Unit
1 7 T H A N N U A L R E P O R T62
Thus, with the objective to move ahead prudently, risk management approaches as briefed below is adopted by theBank.
Credit Risk: Credit Risk is the possible losses from the non-payment of interest and /or principal by the Bank’sborrowers or debtors as per the agreed terms of credit sanction. In order to ensure sound credit risk managementsystem, credit risk management responsibilities are shared to three distinct functions, namely relationship man-agement, credit risk assessment and credit administration. There has been clear demarcation on the roles andresponsibilities of the three functions.
Besides to analysis of trend and assess the exposure impacts, credit risk unit ensures credit policy, proceduralmanuals and other required activities to develop risk management culture throughout the Bank.
The following table shows the risk concentration of Loans & Advances by Industry:
Operational Risk: Operational risk is the risk of loss resulting from technology, inadequacy of internal procedure,breach of laid down procedures, incapable people and failure of system or adverse external disasters. Prabhu Bankaims to minimize the frequency and impact of unexpected operational loss by ensuring well defined operationalmanuals and guidelines covering each type of activities, train the people to ensure smooth delivery of service,check and balance of authority delegation, comprehensive internal audit and follow up on audit remarks andbusiness continuity plan for possible external disasters.
In order to manage the operation risk, Operation Risk unit remains vigilant for the monitoring operational activitiesthroughout the Bank. In addition to making the Bank enable for required policy and procedural mechanism, itcollects operational incidents taken place in the Bank and external relevant information and submits reports to RiskMgmt. Committee as well Operation Risk Management Committee with the recommendation of required rem-edies that are advised to the Bank Management for necessary execution.
Market, Liquidity & Other Risk: Market risk is the possible losses resulting from the change in interest rate, foreigncurrency exchange rates or price of commodity or investments. Market risks are arisen from rapidly changingexternal factors, thus highly sensitive in banking business. The Bank has Market Risk unit which is independentfrom Treasury Dealer and Treasury Back Office. It monitors day to day activities and decisions related to treasury andreviews /analyses the trend of liquidity, interest rate and FCY exchange rate and assesses the exposure’s impacts.Adequate system for monitoring and reporting the risk exposures and assessing how the bank’s changing riskprofile affects the need for capital had been established.
In addition, liquid assets are maintained in relation to cash flows to provide further sources of funding in the eventof a crisis by carefully preparing and reporting the Structural Liquidity Position, gap analysis and stress test onregular time interval which are further presented in ALCO (Asset Liability Management Committee) for appropriatedecision taking and future strategy setting.
Loans & Advances 11,560,500 17,995,916 19,620,833 12,665,818 14,137,498 75,980,565
-Mid July 2018
Loans & Advances 8,875,856 15,272,549 16,284,065 11,261,869 10,285,189 61,979,529
-Mid July 2017
Banks, Agriculture,Financial Tourism
Particulars Manufacturing & & Construction Others TotalBusiness TradingServices
631 7 T H A N N U A L R E P O R T
The table below summarises the maturity profile of the undiscounted cash flows of the Bank’s financial assets andliabilities as at Ashadh 32, 2075. Repayments which are subject to notice are treated as if notice were to be givenimmediately. However, the Bank expects that many customers will not request repayment on the earliest date itcould be required to pay and the table does not reflect the expected cash flows indicated by its deposit retentionhistory.
Financial instruments are recorded at fair value. The following is a description of how fair values are determined forfinancial instruments that are recorded at fair value using valuation techniques. These incorporate the bank’sestimate of assumptions that a market participant would make when valuing the instruments.
For all financial instruments where fair values are determined by referring to externally quoted prices or observ-able pricing inputs to models, independent price determination or validation is obtained. In an inactive market,direct observation of a traded price may not be possible. In these circumstances, the Bank uses alternative marketinformation to validate the financial instrument’s fair value, with greater weight given to information that is
Financial Assets
Cash & Cash Equivalents 5,682,144 7,472,946 - - -
Due From Bank - 8,387,452 - - -
Loan & Advance Gross - 10,616,045 23,665,093 16,958,738 24,932,166
Investment Securities - 4,403,019 1,126,349 147,794 2,358,727
Investment in Subsidiaries - - - - 116,961
Total undiscounted Assets 5,682,144 30,879,462 24,791,442 17,106,532 27,407,854
Financial Liabilities - - - - -
Due to Banks - 702,209 - - -
Due to Customers - 23,888,392 35,805,986 37,531,559 33,728
Debts Issued & Other - - - - -
Borrowed Funds
Trade Payables - - - - -
Unclaimed Dividend 31,020 - - - 31,020
Total Undiscounted Liabilities 31,020 24,590,601 35,805,986 37,531,559 33,728
Net Financial 5,651,124 6,288,861 (11,014,544) (20,425,027) 27,374,126
Assets/(Liabilities)
Particulars On Up to 3 to 12 More than Total Demand 3 months months 1 years
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The table below summarises the maturity profile of the undiscounted cash flows of the Bank’s financial assets andliabilities as at Ashadh 32, 2075. Repayments which are subject to notice are treated as if notice were to be givenimmediately. However, the Bank expects that many customers will not request repayment on the earliest date itcould be required to pay and the table does not reflect the expected cash flows indicated by its deposit retentionhistory.
Financial instruments are recorded at fair value. The following is a description of how fair values are determined forfinancial instruments that are recorded at fair value using valuation techniques. These incorporate the bank’sestimate of assumptions that a market participant would make when valuing the instruments.
For all financial instruments where fair values are determined by referring to externally quoted prices or observ-able pricing inputs to models, independent price determination or validation is obtained. In an inactive market,direct observation of a traded price may not be possible. In these circumstances, the Bank uses alternative marketinformation to validate the financial instrument’s fair value, with greater weight given to information that is
Financial Assets
Cash & Cash Equivalents 5,682,144 7,472,946 - - -
Due From Bank - 8,387,452 - - -
Loan & Advance Gross - 10,616,045 23,665,093 16,958,738 24,932,166
Investment Securities - 4,403,019 1,126,349 147,794 2,358,727
Investment in Subsidiaries - - - - 116,961
Total undiscounted Assets 5,682,144 30,879,462 24,791,442 17,106,532 27,407,854
Financial Liabilities - - - - -
Due to Banks - 702,209 - - -
Due to Customers - 23,888,392 35,805,986 37,531,559 33,728
Debts Issued & Other - - - - -
Borrowed Funds
Trade Payables - - - - -
Unclaimed Dividend 31,020 - - - 31,020
Total Undiscounted Liabilities 31,020 24,590,601 35,805,986 37,531,559 33,728
Net Financial 5,651,124 6,288,861 (11,014,544) (20,425,027) 27,374,126
Assets/(Liabilities)
Particulars On Up to 3 to 12 More than Total Demand 3 months months 1 years
1 7 T H A N N U A L R E P O R T64
considered to be more relevant and reliable. Financials assets measured at fair value (either through PL or OCI),primarily consisting of quoted equities and Quoted Mutual Fund units, are valued using the quoted market price inactive markets as at the reporting date. If unquoted, those are carried at cost.
Financial investments – Measured through OCIFinancials assets measured through OCI, primarily consist of quoted equities and Quoted Mutual Fund units arevalued using the quoted market price i n active markets as at the reporting date. For unquoted securities those arecarried at cost.
Besides to above, a full-fledged Compliance Department is formed headed by Head – Compliance under directsupervision of Chief Executive Officer to ensure compliance of regulatory requirements and internal policies.Likewise, audit function is also independent and Internal Audit Department ensures in development of internalprocedures and checks and control system /procedures and reports to Board level Audit Committee.
5.2 Capital ManagementBank has rolled out its ICAAP Policy, 2015 amended in 2017 with the following fundamental purposes:
Development of policy, practice, processes, system and plan to meet the regulatory and economiccapital under the Pillar 2 of the Basel II Capital Accord.
Report the Board about the ongoing assessment of the bank’s risk profile, mitigation mechanismsbeing applied and estimated future capital requirements of the bank.
Communicate and justify the regulatory authority about the procedure and methodology adoptedfor ICAAP based on present and future risk profile of the bank.
Ensuring that management exercises sound judgment and set aside adequate capital for materialrisks in accordance with the overall risk.
As per ICAAP Policy, 2015, amended in 2017, tolerable risk appetite of the Bank shall be as follows:
Risk Category Economic Capital Allocation Low Medium High
Credit Risk 80.00% to 82.00%
Operation Risk 4.50% to 4.75%
Market Risk 0.20% to 0.25%
Supervisory Adjustments 1.75% to 2.55%
Other Risk 0.05% to 0.10%
Risk Appetite Level
1 7 T H A N N U A L R E P O R T64
considered to be more relevant and reliable. Financials assets measured at fair value (either through PL or OCI),primarily consisting of quoted equities and Quoted Mutual Fund units, are valued using the quoted market price inactive markets as at the reporting date. If unquoted, those are carried at cost.
Financial investments – Measured through OCIFinancials assets measured through OCI, primarily consist of quoted equities and Quoted Mutual Fund units arevalued using the quoted market price i n active markets as at the reporting date. For unquoted securities those arecarried at cost.
Besides to above, a full-fledged Compliance Department is formed headed by Head – Compliance under directsupervision of Chief Executive Officer to ensure compliance of regulatory requirements and internal policies.Likewise, audit function is also independent and Internal Audit Department ensures in development of internalprocedures and checks and control system /procedures and reports to Board level Audit Committee.
5.2 Capital ManagementBank has rolled out its ICAAP Policy, 2015 amended in 2017 with the following fundamental purposes:
Development of policy, practice, processes, system and plan to meet the regulatory and economiccapital under the Pillar 2 of the Basel II Capital Accord.
Report the Board about the ongoing assessment of the bank’s risk profile, mitigation mechanismsbeing applied and estimated future capital requirements of the bank.
Communicate and justify the regulatory authority about the procedure and methodology adoptedfor ICAAP based on present and future risk profile of the bank.
Ensuring that management exercises sound judgment and set aside adequate capital for materialrisks in accordance with the overall risk.
As per ICAAP Policy, 2015, amended in 2017, tolerable risk appetite of the Bank shall be as follows:
Risk Category Economic Capital Allocation Low Medium High
Credit Risk 80.00% to 82.00%
Operation Risk 4.50% to 4.75%
Market Risk 0.20% to 0.25%
Supervisory Adjustments 1.75% to 2.55%
Other Risk 0.05% to 0.10%
Risk Appetite Level
651 7 T H A N N U A L R E P O R T
Standard Risk appetite under Credit Risk, Operation Risk, Market Risk, supervisory adjustment and Other Risk areset at 80%, 7.25%, 0.25%, 1% and 0.25% of total capital fund respectively. Meanwhile, Maximum tolerable risk underCredit Risk, Operation Risk, Market Risk, supervisory adjustment and Other Risk are set at 85%, 9.50%, 0.75%, 3%and 0.50% total capital fund respectively.
In order to comply with prudential floor prescribed by NRB, the Bank has computed and reported the capitaladequacy position as per Basel III norms.
Capital Structure and Capital Adequacy:
Tier I Capital and Breakdown of its Components:
SN Particular Amount (NPR)a Paid Up Equity Share Capital 8,233,948,524b Share Premium 151,947,990c Statutory General Reserves 1,388,179,492d Retained Earnings 773,629,731e Unaudited current year cumulative profit -f Deferred Tax Reserve -
Sub-total 10,547,705,736g Less: Fictitious Assets -h Less: Investment in equity of institutions with vested interest 116,960,880i Less: Deferred Tax Assets -
Total Tier I Capital 10,430,744,856
Tier II Capital and Breakdown of its Components:
SN Particular Amount (NPR)a General loan loss provision 875,392,719b Investment Adjustment Reserve 124,503,880c Exchange Equalization Reserve -
Total Tier II Capital 999,896,599
Deduction from Tier I
SN Particular Amount (NPR)a Fictitious Assets -b Investment in equity of institutions with vested interest 116,960,880c Deferred Tax Assets -
Total 116,960,880
The bank has not issued any Subordinated Term Debt instrument.
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Qualifying Capital
SN Particular Amount (NPR)a Core Capital (Tier I) 10,430,744,856b Supplementary Capital (Tier II) 999,896,599
Total Capital Fund (Tier I and Tier II) 11,430,641,456
Risk weighted exposures under each 11 categories of Credit Risk:
SN Particular Amount (NPR)a Claims on government and central bank -b Claims on other official entities -c Claims on banks 2,441,022,065d Claims on corporate and securities firms 38,830,401,077e Claims on regulatory retail Portfolio 8,846,228,836f Claims secured by residential properties 5,812,585,733g Claims secured by commercial real estate 3,191,835,369h Past due claims 2,986,518,022i High risk claims 6,795,495,528j Other Assets 10,437,491,103k Off Balance - sheet items 9,658,397,063
Total Risk Weighted Exposures 88,999,974,796
Risk weighted exposures for Credit Risk, Market Risk and Operational Risk:
SN Particular Amount (NPR)a Risk Weighted Exposure for Credit Risk 88,999,974,796b Risk Weighted Exposure for Operational Risk 4,400,361,860c Risk Weighted Exposure for Market Risk 163,590,204
Adjustments under Pillar-IIAdd: 3% of the total RWE due to non-compliance to -Disclosure Requirement(6.4a 10)Add:1% of the total deposit due to in sufficient Liquid Assets(6.4a 6) -Add: 3% of Overall Risk Weighted Exposure as per Supervisory Adjustment 2,806,917,806Total Risk Weighted Exposures 96,370,844,666
Capital Adequacy Calculation Table:
SN Particular Amount (NPR)Total Core Capital to Total Risk Weighted Exposure 10.82%Total Capital Fund to Total Risk Weighted Exposure 11.86%
Risk Exposures:
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Non-Performing Assets
Non-Performing Assets Ratios
SN Particular Amount (NPR)a Gross NPA to Gross Loan & Advances 3.98%b Net NPA to Net Advances 1.74%
Statement of Non-Performing Assets (Gross and Net)
SN Particular Amount (NPR) Provision Net NPAa Restructured - - -b Sub-standard 982,756,617 260,822,725 721,933,891c Doubtful 1,116,730,659 565,659,968 551,070,691d Loss 926,593,057 926,593,057 -
Total 3,026,080,332 1,753,075,750 1,273,004,582
Movement of Non-Performing Assets
SN Particular This Year Previous Year Movementa Restructured - - -b Sub-standard 982,756,617 644,552,595 338,204,022c Doubtful 1,116,730,659 646,194,431 470,536,228d Loss 926,593,057 1,528,281,732 (601,688,675)
Total 3,026,080,332 2,819,028,757 207,051,576Non-Performing Assets (%) 3.98% 4.55% 0.57%
SN Particular Amount (NPR)a Write off Loans during the Year 398,278,373b Write off Interest during the Year -
Write off of Loans and Interest during the year
Movement of Loan Loss Provision and Interest Suspense
SN Particular This Year Previous Year Movementa Loan Loss Provision 2,645,652,761 2,800,203,974 (154,551,213)b Interest Suspense 1,322,847,776 1,576,477,833 (253,630,057)
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Qualifying Capital
SN Particular Amount (NPR)a Core Capital (Tier I) 10,430,744,856b Supplementary Capital (Tier II) 999,896,599
Total Capital Fund (Tier I and Tier II) 11,430,641,456
Risk weighted exposures under each 11 categories of Credit Risk:
SN Particular Amount (NPR)a Claims on government and central bank -b Claims on other official entities -c Claims on banks 2,441,022,065d Claims on corporate and securities firms 38,830,401,077e Claims on regulatory retail Portfolio 8,846,228,836f Claims secured by residential properties 5,812,585,733g Claims secured by commercial real estate 3,191,835,369h Past due claims 2,986,518,022i High risk claims 6,795,495,528j Other Assets 10,437,491,103k Off Balance - sheet items 9,658,397,063
Total Risk Weighted Exposures 88,999,974,796
Risk weighted exposures for Credit Risk, Market Risk and Operational Risk:
SN Particular Amount (NPR)a Risk Weighted Exposure for Credit Risk 88,999,974,796b Risk Weighted Exposure for Operational Risk 4,400,361,860c Risk Weighted Exposure for Market Risk 163,590,204
Adjustments under Pillar-IIAdd: 3% of the total RWE due to non-compliance to -Disclosure Requirement(6.4a 10)Add:1% of the total deposit due to in sufficient Liquid Assets(6.4a 6) -Add: 3% of Overall Risk Weighted Exposure as per Supervisory Adjustment 2,806,917,806Total Risk Weighted Exposures 96,370,844,666
Capital Adequacy Calculation Table:
SN Particular Amount (NPR)Total Core Capital to Total Risk Weighted Exposure 10.82%Total Capital Fund to Total Risk Weighted Exposure 11.86%
Risk Exposures:
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Non-Performing Assets
Non-Performing Assets Ratios
SN Particular Amount (NPR)a Gross NPA to Gross Loan & Advances 3.98%b Net NPA to Net Advances 1.74%
Statement of Non-Performing Assets (Gross and Net)
SN Particular Amount (NPR) Provision Net NPAa Restructured - - -b Sub-standard 982,756,617 260,822,725 721,933,891c Doubtful 1,116,730,659 565,659,968 551,070,691d Loss 926,593,057 926,593,057 -
Total 3,026,080,332 1,753,075,750 1,273,004,582
Movement of Non-Performing Assets
SN Particular This Year Previous Year Movementa Restructured - - -b Sub-standard 982,756,617 644,552,595 338,204,022c Doubtful 1,116,730,659 646,194,431 470,536,228d Loss 926,593,057 1,528,281,732 (601,688,675)
Total 3,026,080,332 2,819,028,757 207,051,576Non-Performing Assets (%) 3.98% 4.55% 0.57%
SN Particular Amount (NPR)a Write off Loans during the Year 398,278,373b Write off Interest during the Year -
Write off of Loans and Interest during the year
Movement of Loan Loss Provision and Interest Suspense
SN Particular This Year Previous Year Movementa Loan Loss Provision 2,645,652,761 2,800,203,974 (154,551,213)b Interest Suspense 1,322,847,776 1,576,477,833 (253,630,057)
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5.3 Classification of financial assets and financial liabilitiesDetails on classification of financial assets and financial liabilities and their measurement have beenpresented in point no. 3.4 above.
5.4 Operating Segment Information
1. Bank has identified its four segments (Treasury & Remittance, ADC, Trade operations and Banking)based on the business activities.
2. The segmental information about Profit/ Loss, Assets & Liabilities etc. are presented below:
3. Measurement of segment profit/ loss , assets and liabilities:· Bank has used Fund Transfer Pricing (FTP) method to recognize income/ expense for any
transaction between reportable segments.· Reportable segments’ profit or loss has been computed on the same basis for that of entity’s
profit or loss.· Reportable segments’ assets or liabilities have been measured on the same basis for that of
entity’s profit or loss.4. Reconciliation of reportable segment revenues, profit or loss, assets and liabilities:
Total revenue for reportable segments 9,932,255,052Other Revenues Elimination of intersegment revenues (671,172,626)Entity’s revenues 9,261,082,426
Revenue
a. Revenue from external customers 816,963 125,301 190,072 8,128,746 9,261,082b. Inter-segment Revenues (619,051) (53,623) 1,502 671,173 -c. Net Revenue 197,912 71,678 191,574 8,799,918 9,261,082d. Interest Revenue 601,222 - - 7,643,375 8,244,597e. Interest Expenses 39,798 - - 5,386,797 5,426,595f. Net Interest Revenue 561,425 - - 2,256,578 2,818,003g. Depreciation & Amortization 8,045 6,034 4,023 183,030 201,131h. Segment Profit/ (Loss) 96,593 54,869 181,876 1,017,112 1,350,449i. Entity’s Interest in the profit - - - - -or loss of associates accountedfor using equity methodj. Other material non-cash items: - - - - -k. Impairment of Assets - - - 2,070,069 2,070,069l. Segment Assets 25,822,747 801,955 71,759 85,889,706 112,586,167m. Segment Liabilities 4,408,913 35,910 93,211 95,477,886 100,015,920
AlternateDeliveryChannel
Treasury (Card && Internet Trade
Particulars Remittance Banking) Operations Banking Total
NPR in ‘000’
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5.3 Classification of financial assets and financial liabilitiesDetails on classification of financial assets and financial liabilities and their measurement have beenpresented in point no. 3.4 above.
5.4 Operating Segment Information
1. Bank has identified its four segments (Treasury & Remittance, ADC, Trade operations and Banking)based on the business activities.
2. The segmental information about Profit/ Loss, Assets & Liabilities etc. are presented below:
3. Measurement of segment profit/ loss , assets and liabilities:· Bank has used Fund Transfer Pricing (FTP) method to recognize income/ expense for any
transaction between reportable segments.· Reportable segments’ profit or loss has been computed on the same basis for that of entity’s
profit or loss.· Reportable segments’ assets or liabilities have been measured on the same basis for that of
entity’s profit or loss.4. Reconciliation of reportable segment revenues, profit or loss, assets and liabilities:
Total revenue for reportable segments 9,932,255,052Other Revenues Elimination of intersegment revenues (671,172,626)Entity’s revenues 9,261,082,426
Revenue
a. Revenue from external customers 816,963 125,301 190,072 8,128,746 9,261,082b. Inter-segment Revenues (619,051) (53,623) 1,502 671,173 -c. Net Revenue 197,912 71,678 191,574 8,799,918 9,261,082d. Interest Revenue 601,222 - - 7,643,375 8,244,597e. Interest Expenses 39,798 - - 5,386,797 5,426,595f. Net Interest Revenue 561,425 - - 2,256,578 2,818,003g. Depreciation & Amortization 8,045 6,034 4,023 183,030 201,131h. Segment Profit/ (Loss) 96,593 54,869 181,876 1,017,112 1,350,449i. Entity’s Interest in the profit - - - - -or loss of associates accountedfor using equity methodj. Other material non-cash items: - - - - -k. Impairment of Assets - - - 2,070,069 2,070,069l. Segment Assets 25,822,747 801,955 71,759 85,889,706 112,586,167m. Segment Liabilities 4,408,913 35,910 93,211 95,477,886 100,015,920
AlternateDeliveryChannel
Treasury (Card && Internet Trade
Particulars Remittance Banking) Operations Banking Total
NPR in ‘000’
691 7 T H A N N U A L R E P O R T
Total profit or loss for reportable segments 2,021,621,970Other Profit or LossElimination of intersegment profit (671,972,055)Unallocated amounts: -Entity's Profit 1,350,449,344
Profit or Loss
Total assets for reportable segments 112,586,166,923Other AssetsUnallocated AmountsEntity's Assets 112,586,166,923
Assets
Total liabilities for reportable segments 100,015,920,474Other LiabilitiesUnallocated AmountsEntity's Liabilities 100,015,920,474
Liabilities
5. Information about products and services:Revenue from each type of products and services:
Treasury & Remittance 816,962,939Alternate Delivery Channel 125,301,454Central Trade Operations 190,072,383Banking 8,128,745,650Total 9,261,082,426
6. Information about geographical areas:Revenue from each geographical areas:
a. Domestic 9,261,082,426Province-1 643,237,217Province-2 429,145,715Province-3 6,618,756,477Province-4 626,692,997Province-5 760,383,205Province-6 45,273,274Province-7 137,593,541b. Foreign -Total 9,261,082,426
7. Information about major customers:Revenue from any single customer does not amount to 10% or more of entity's revenue.
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5.5 Share options and share based payment“Share options” is a contract that gives the holder the right, but not the obligation, to subscribe the bank’sshares at a fixed or determinable price for a specified period.
A share-based payment is a transaction in which the bank receives goods or services either as consider-ation for its equity instruments or by incurring liabilities for amounts based on the price of the bank’sshares or other equity instruments of the bank.
Explanatory NotesThe bank does not have any share options contract and share based payment transactions for the reportingperiod.
5.6 Contingent liabilities and commitmentContingent liabilities: Where the Bank undertakes to make a payment on behalf of its customers forguarantees issued, such as for performance bonds or as irrevocable letters of credit as part of the Bank’stransaction banking business for which an obligation to make a payment has not arisen at the reportingdate, those are included in these financial statements as contingent liabilities.
Other contingent liabilities primarily include revocable letters of credit and bonds issued on behalf ofcustomers to customs, for bids or offers.
Commitments: Where the Bank has confirmed its intention to provide funds to a customer or on behalf ofa customer in the form of loans, overdrafts, future guarantees, whether cancellable or not, or letters ofcredit and the Bank has not made payments at the reporting date, those instruments are included in thesefinancial statement as commitments.
Explanatory NotesThe Bank seeks to comply with all applicable laws and regulations, but may be subject to regulatoryactions and investigations, the outcome of which are generally difficult to predict and can be material tothe bank.
In addition to these matters, the Bank may receive legal claims against it in the normal course of business.The Bank considers none of these claims as material. Where appropriate, the bank recognises a provisionfor liabilities when it is probable that an outflow of economic resources embodying economic benefitswill be required and for which a reliable estimate can be made of the obligation(s).
Details relating to Contingent liabilities and commitment are depicted under schedule 4.28.
5.7 Related parties disclosuresThe Bank has carried out transactions in the ordinary course of business on an arm’s length basis at com-mercial rates with parties as per Nepal Accounting Standard – NAS 24- “Related Party Disclosures’, exceptfor the transactions that Key Management Personnel (KMPs) have availed under schemes uniformly appli-cable to all staff at concessionary rates.
Parent and Ultimate Controlling Party:The Bank does not have an identifiable parent of its own.
Transactions with Key Management Personnel (KMPs):As per NAS -24- Related Party Disclosures, KMP are defined as those persons having authority and respon-sibility for planning, directing and controlling the activities of the entity.
Board of Directors and the members of top level Management are considered as KMP of the Bank.
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Compensations of KMP:Compensation to Board of Directors:
2,018 2,017Rs' 000 Rs' 000
Meeting Fees Paid 1,704 1,112Telephone/ Internet/ Newspaper Expenses Paid 641 200
2,345 1,312
Compensation to CEO:
2,018 2,017Rs' 000 Rs' 000
Short term employee benefits 11,392 9,613Employee Bonus 3,772 2,773Festival Allowance & payment against annual leave 1,597 1,016
16,761 13,402
Compensation to Other KMPs:
2,018 2,017Rs' 000 Rs' 000
Short term employee benefits 22,235 23,428Employee Bonus 4,661 5,491Festival Allowance & payment against annual leave 2,454 1,730
29,350 30,648Grand Total 46,111 44,050
Transaction with subsidiary M/s Prabhu Capital Ltd.
2,018 2,017Rs' 000 Rs' 000
Interest Expenses 5,726 1,973Deposit Held 117,767 58,401RTS Fees 1,500 -Rent Income 2,533 2,420Total 127,526 62,794
1 7 T H A N N U A L R E P O R T70
5.5 Share options and share based payment“Share options” is a contract that gives the holder the right, but not the obligation, to subscribe the bank’sshares at a fixed or determinable price for a specified period.
A share-based payment is a transaction in which the bank receives goods or services either as consider-ation for its equity instruments or by incurring liabilities for amounts based on the price of the bank’sshares or other equity instruments of the bank.
Explanatory NotesThe bank does not have any share options contract and share based payment transactions for the reportingperiod.
5.6 Contingent liabilities and commitmentContingent liabilities: Where the Bank undertakes to make a payment on behalf of its customers forguarantees issued, such as for performance bonds or as irrevocable letters of credit as part of the Bank’stransaction banking business for which an obligation to make a payment has not arisen at the reportingdate, those are included in these financial statements as contingent liabilities.
Other contingent liabilities primarily include revocable letters of credit and bonds issued on behalf ofcustomers to customs, for bids or offers.
Commitments: Where the Bank has confirmed its intention to provide funds to a customer or on behalf ofa customer in the form of loans, overdrafts, future guarantees, whether cancellable or not, or letters ofcredit and the Bank has not made payments at the reporting date, those instruments are included in thesefinancial statement as commitments.
Explanatory NotesThe Bank seeks to comply with all applicable laws and regulations, but may be subject to regulatoryactions and investigations, the outcome of which are generally difficult to predict and can be material tothe bank.
In addition to these matters, the Bank may receive legal claims against it in the normal course of business.The Bank considers none of these claims as material. Where appropriate, the bank recognises a provisionfor liabilities when it is probable that an outflow of economic resources embodying economic benefitswill be required and for which a reliable estimate can be made of the obligation(s).
Details relating to Contingent liabilities and commitment are depicted under schedule 4.28.
5.7 Related parties disclosuresThe Bank has carried out transactions in the ordinary course of business on an arm’s length basis at com-mercial rates with parties as per Nepal Accounting Standard – NAS 24- “Related Party Disclosures’, exceptfor the transactions that Key Management Personnel (KMPs) have availed under schemes uniformly appli-cable to all staff at concessionary rates.
Parent and Ultimate Controlling Party:The Bank does not have an identifiable parent of its own.
Transactions with Key Management Personnel (KMPs):As per NAS -24- Related Party Disclosures, KMP are defined as those persons having authority and respon-sibility for planning, directing and controlling the activities of the entity.
Board of Directors and the members of top level Management are considered as KMP of the Bank.
711 7 T H A N N U A L R E P O R T
Compensations of KMP:Compensation to Board of Directors:
2,018 2,017Rs' 000 Rs' 000
Meeting Fees Paid 1,704 1,112Telephone/ Internet/ Newspaper Expenses Paid 641 200
2,345 1,312
Compensation to CEO:
2,018 2,017Rs' 000 Rs' 000
Short term employee benefits 11,392 9,613Employee Bonus 3,772 2,773Festival Allowance & payment against annual leave 1,597 1,016
16,761 13,402
Compensation to Other KMPs:
2,018 2,017Rs' 000 Rs' 000
Short term employee benefits 22,235 23,428Employee Bonus 4,661 5,491Festival Allowance & payment against annual leave 2,454 1,730
29,350 30,648Grand Total 46,111 44,050
Transaction with subsidiary M/s Prabhu Capital Ltd.
2,018 2,017Rs' 000 Rs' 000
Interest Expenses 5,726 1,973Deposit Held 117,767 58,401RTS Fees 1,500 -Rent Income 2,533 2,420Total 127,526 62,794
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5.8 Merger and acquisitionNo such events occurred during the year.
5.9 Additional disclosures of non-consolidated entitiesThe bank has neither any investment in any entities which requires consolidation as per applicable NFRSnor any investment in associates which needs to be pooled in the financial statement of the bank. Exceptfor strategic investment in equity shares, the bank has no other equity investment.
5.10 Events after reporting date.Bank monitors and assesses events that may have potential impact to qualify as adjusting and / or non-adjusting events after the end of the reporting period based on NAS 10"Events after reporting periods”.All adjusting events are adjusted in the books with additional disclosures and non-adjusting materialevents are disclosed in the notes with possible financial impact, to the extent ascertainable.
Explanatory NotesThere are no material events that have occurred subsequent to 16 July 2018 till the signing of this financialstatement on 6th January, 2019.
5.11 Grant Received from Sakshyam:As per agreement with Sakshyam, grant of NPR 6,504,706 has been received. The grant is revenue grantwhich has been shown as “Other Income” in Income Statement. NPR 5,073,953 received as Capital Grantduring the previous Fiscal Year against acquisition of Fixed Assets; which had been booked as “DeferredGrant Income” under Other Liabilities. Amortization of NPR 847,645 has been booked as deferred grantincome in the current year.
Deferred Grant Income shall be proportionately recognized as income in Income Statement according tothe depreciation policy for the concerned Fixed Assets.
5.12 Unpaid DividendThe Bank’s dividend payable as at balance sheet date stands NPR 30,224,915 the details of which as fol-lows:
The Bank has published notice to the shareholders for unclaimed dividends more than five years periodaccording to NRB Directives 16.
F/Y 2059/60 275,700 275,700F/Y 2060/61 299,300 299,300F/Y 2061/62 15,500 378,000 393,500F/Y 2062/63 8,500 8,500F/Y 2063/64 39,235 39,235F/Y 2064/65 447,878 532,100 979,978F/Y 2065/66 1,632,580 540,650 272,120 2,445,350F/Y 2066/67 2,488,483 213,758 2,702,240F/Y 2067/68 1,377,732 817,770 2,195,501F/Y 2068/69 1,272,930 8,868,801 10,141,731F/Y 2069/70 10,743,881 10,743,881Total 4,632,175 1,072,750 1,863,609 2,090,699 20,565,682 30,224,915
Particulars KIST PBBL GDBL ZFL GBNL Total
1 7 T H A N N U A L R E P O R T72
5.8 Merger and acquisitionNo such events occurred during the year.
5.9 Additional disclosures of non-consolidated entitiesThe bank has neither any investment in any entities which requires consolidation as per applicable NFRSnor any investment in associates which needs to be pooled in the financial statement of the bank. Exceptfor strategic investment in equity shares, the bank has no other equity investment.
5.10 Events after reporting date.Bank monitors and assesses events that may have potential impact to qualify as adjusting and / or non-adjusting events after the end of the reporting period based on NAS 10"Events after reporting periods”.All adjusting events are adjusted in the books with additional disclosures and non-adjusting materialevents are disclosed in the notes with possible financial impact, to the extent ascertainable.
Explanatory NotesThere are no material events that have occurred subsequent to 16 July 2018 till the signing of this financialstatement on 6th January, 2019.
5.11 Grant Received from Sakshyam:As per agreement with Sakshyam, grant of NPR 6,504,706 has been received. The grant is revenue grantwhich has been shown as “Other Income” in Income Statement. NPR 5,073,953 received as Capital Grantduring the previous Fiscal Year against acquisition of Fixed Assets; which had been booked as “DeferredGrant Income” under Other Liabilities. Amortization of NPR 847,645 has been booked as deferred grantincome in the current year.
Deferred Grant Income shall be proportionately recognized as income in Income Statement according tothe depreciation policy for the concerned Fixed Assets.
5.12 Unpaid DividendThe Bank’s dividend payable as at balance sheet date stands NPR 30,224,915 the details of which as fol-lows:
The Bank has published notice to the shareholders for unclaimed dividends more than five years periodaccording to NRB Directives 16.
F/Y 2059/60 275,700 275,700F/Y 2060/61 299,300 299,300F/Y 2061/62 15,500 378,000 393,500F/Y 2062/63 8,500 8,500F/Y 2063/64 39,235 39,235F/Y 2064/65 447,878 532,100 979,978F/Y 2065/66 1,632,580 540,650 272,120 2,445,350F/Y 2066/67 2,488,483 213,758 2,702,240F/Y 2067/68 1,377,732 817,770 2,195,501F/Y 2068/69 1,272,930 8,868,801 10,141,731F/Y 2069/70 10,743,881 10,743,881Total 4,632,175 1,072,750 1,863,609 2,090,699 20,565,682 30,224,915
Particulars KIST PBBL GDBL ZFL GBNL Total
731 7 T H A N N U A L R E P O R T
5.13 Summary of concentration of exposure:
Particulars Loans and Advances Deposits and BorrowingsTotal Amount as on 16 July 2018 75,980,565 97,961,873Core Capital (last quarter) 10,496,259Highest Exposure to a Single Unit (including non-funded) 1,722,263 3,555,973Concentration of exposure to a single unit (of Core Capital) 16.41%Concentration of deposit from a single unit (of Total Deposit) 3.63%
NPR in ‘000’
5.14 Weighted Average Interest Spread:The weighted average interest spread rate is calculated considering interest income on loan on cash basisand investment in all securities.
Particulars Loans and Advances Deposits and BorrowingsAverage Rate of return from Advances and Investments 11.40 10.31Average cost of Deposits/Borrowings 6.68 7.04Net Interest Spread 4.72 3.27
Rate (%)
1 7 T H A N N U A L R E P O R T74
S. N
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Loan Type
Overdraft,Demand LoanHome Loan
IndividualRevolving LoanOverdraft
Hire Purchase,Personal TermLoanPersonal TermLoanDemand Loan,OverdraftDemand Loan,OverdraftDemand Loan
CBP
Hire Purchase
Overdraft,Demand LoanBG LOAN,OverdraftHire Purchase,CURRENTACCOUNTOverdraft,Demand LoanHire Purchase
Hire Purchase
Overdraft
IndividualRevolving LoanHire Purchase
Personal loan
Amountwrite off
40,508,198
508,363
507,945
182,216
2,829,121
158,692
309,743
16,084,171
22,163,467
10,638,657
1,054,073
38,345,000
522,269
61,987
651,071
6,169,377
19,263,475
11,544,500
2,831,000
990,310
4,768,892
Type ofSecurityLand andBuildingLand andBuildingLand andBuildingLand
Vehicle
Land
Stock
Land/stock
Land
Land
Vehicle
land/stock/vehicleland/stock
Bike
Land
Vehicle
Vehicle
Land
Land
Vehicle
Land
Basisof
Valuation80:20
60:40
60:40
70:30
70:30
70:30
87:23
50:50
70:30
70:30
80:20
70:30
80:20
70:30
70:30
70:30
70:30
80:20
80:20
60:40
75:25
Loan approved byName/DesignationCredit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Initiations madefor RecoveryRegular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,
Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,
Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,
5.15 Loan Write-off Details:Following is the list of loan written off during the current year:
751 7 T H A N N U A L R E P O R T
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
Personal loan
Overdraft
Hire Purchase
Demand Loan,Overdraft, TLPersonal Loan
Personal Loan
Hire Purchase
PersonalGuaranteeWorking CapitalLoanOverdraft
Home Loan
Personal Loan
Personal Loan
Hire Purchase
Hire Purchase
Total
4,007,652
8,311,194
95,819
174,038,936
48,658
50,400
1,432,438
1,124,527
549,676
4,227,593
2,292,109
5,025,574
5,004,000
8,536,461
3,440,809
398,278,373
N/A
Excavator
Vehicle
A i r c r a f t /LandN/A
N/A
Vehicle
Vehicle
Land/Stock
Land
Flat
Land
Land
Vehicle
Vehicle
N/A
80:20
80:20
ConsortiumLoanN/A
N/A
50:50
70:30
50:50
70:30
70:30
75:25
70:30
70:30
70:30
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,Regular follow-up, publishpublic notice, blacklisting,
5.16 Written off Loan Recovered:NPR 6,500,000 was recovered from written-off loan during the year. Details as follows:
1 6,169,377 5,416,312 01/07/2018 6,500,000 Hire Purchase
Amount Written off
Principal Interest OthersS.N. Date of
recoveryRecoveryAmount Remarks
771 7 T H A N N U A L R E P O R T
Previous GAAP 1,591,169,553Adjustments under NFRSs:
Interest income 1 (291,627,353)Impairment of loan and advancesEmployees benefit amortisation under staff loan 1 (48,801,050)Defined benefit obligation of employee 2 (42,119,362)Operating lease expenseAmortisation expense of debt securitiesShare Issue Expense 3 2,574,855Interest expenseDepreciation & Amortisation 4 (850,510)Reversal of Provision on NBA 5 399,611,516Reversal of Provision on Investment Securities 6 2,208,236Origination and Reversal of Deferred Tax 7 (125,665,051)
Total Adjustment to profit or loss (104,668,719)Profit or loss under NFRSs 1,486,500,834Other Comprehensive Income ( Net off Tax) 8 183,828,765Total Comprehensive income under NFRSs 1,670,329,598
2. Reconciliation of profit or loss
1 Interest income recognized in accrual basis and staff loan measured at fair value.2 Increase in Employee Benefit expenses as per actuary valuation.3 Share Issue Expenses directly charged to Equity.4 Impairment on Investment Property.5 Reversal of NBA Provision. Under Previous GAAP, NBA provision recognized as per NRB Directives.6 Reversal of Provision on Investment Securities.7 Recognition of deferred tax expenses due to increase in profit.8 Reclassification of items has been done in previous GAAP whereever required to match with the presentation of line items under NFRS.
ExplanatoryNote
"For the year ended “31.03.2074"(the latest period presented
under previous GAAP)Profit/(Loss) for the year
1 7 T H A N N U A L R E P O R T76
Total equity under Previous GAAP 6,433,841,638 8,277,503,663Adjustments under NFRSs:
Impairment on loan and advancesFair value & employees benefitaccounting of staff loanLease accountingMeasurement of investment securitiesat fair valueRevaluation of property & equipmentRecognition of investment property 1 116,786,744 515,547,750Amortisation of debt securities issuedDeferred tax 2 (657,928,361) (858,678,683)Defined benefit obligation of employees 3 (126,457,330) (159,946,893)Goodwill/Bargain purchase gainInterest income 4 1,916,906,236 1,576,477,833Investment Provision reversal -
……….. ………..Total Adjustment to equity 1,249,307,289 1,073,400,008Total Equity under NFRSs 7,683,148,927 9,350,903,671
5.17 Disclosure Effect of Transition from Previous GAAP to NFRS:1. Reconciliation of equity
Explanatory Note (Date of Transition)
(End of last periodpresented underprevious GAAP)
As at 01.04.2073
As at 31.03.2074
Explanatory note:1 Reversal of Provision for Non-Banking Assets.2 Deferred Tax has origin dated due to the measurement of various assets and liabilities to their value.3 Increase in obligation against employee benefits as per actuary valuation.4 Interest income is recognized in accrual basis.
771 7 T H A N N U A L R E P O R T
Previous GAAP 1,591,169,553Adjustments under NFRSs:
Interest income 1 (291,627,353)Impairment of loan and advancesEmployees benefit amortisation under staff loan 1 (48,801,050)Defined benefit obligation of employee 2 (42,119,362)Operating lease expenseAmortisation expense of debt securitiesShare Issue Expense 3 2,574,855Interest expenseDepreciation & Amortisation 4 (850,510)Reversal of Provision on NBA 5 399,611,516Reversal of Provision on Investment Securities 6 2,208,236Origination and Reversal of Deferred Tax 7 (125,665,051)
Total Adjustment to profit or loss (104,668,719)Profit or loss under NFRSs 1,486,500,834Other Comprehensive Income ( Net off Tax) 8 183,828,765Total Comprehensive income under NFRSs 1,670,329,598
2. Reconciliation of profit or loss
1 Interest income recognized in accrual basis and staff loan measured at fair value.2 Increase in Employee Benefit expenses as per actuary valuation.3 Share Issue Expenses directly charged to Equity.4 Impairment on Investment Property.5 Reversal of NBA Provision. Under Previous GAAP, NBA provision recognized as per NRB Directives.6 Reversal of Provision on Investment Securities.7 Recognition of deferred tax expenses due to increase in profit.8 Reclassification of items has been done in previous GAAP whereever required to match with the presentation of line items under NFRS.
ExplanatoryNote
"For the year ended “31.03.2074"(the latest period presented
under previous GAAP)Profit/(Loss) for the year
1 7 T H A N N U A L R E P O R T78
3. Effect of NFRSs adoption for the statement of financial position
AssetsCash and cash equivalent 6,622,750,207 - 6,622,750,207 6,543,439,841 - 6,543,439,841Due from Nepal Rastra Bank 7,505,153,799 - 7,505,153,799 9,120,743,031 - 9,120,743,031Placement with Bank and 912,050,000 - 912,050,000 2,208,690,827 - 2,208,690,827Financial InstitutionsDerivative financial 21,078,426 - 21,078,426 22,823,158 - 22,823,158instrumentsOther trading assets - - - - - -Loan and advances to B/FIs 3,173,765,526 - 3,173,765,526 1,812,718,640 - 1,812,718,640Loans and advances 41,474,950,226 (171,194,060) 41,303,756,166 58,498,513,860 (432,612,307) 58,065,901,553to customersInvestment securities 4,915,008,949 - 4,915,008,949 8,580,461,864 - 8,580,461,864Current tax assets 96,081,774 - 96,081,774 32,911,140 - 32,911,140Investment in susidiaries - - - 52,343,880 (6,783,000) 45,560,880Investment in associates - - - - - -Investment property - 116,786,744 116,786,744 - 515,547,750 515,547,750Property and equipment 2,136,023,970 - 2,136,023,970 2,149,494,481 - 2,149,494,481Goodwill and Intangible - - - - - -assetsDeferred tax assets 871,821,895 (587,100,116) 284,721,778 441,966,657 (441,966,657) -Other assets 609,494,348 2,088,100,296 2,697,594,644 1,517,592,946 2,009,090,141 3,526,683,086Total Assets 68,338,179,119 1,446,592,864 69,784,771,983 90,981,700,324 1,643,275,927 92,624,976,248LiabilitiesDue to Bank and - - - - - -Financial InstituionsDue to Nepal Rastra Bank - - - 252,386,603 - 252,386,603Derivative financial - - - - - -instruments.Deposits from customers 60,940,868,320 - 60,940,868,320 81,349,539,828 - 81,349,539,828Borrowing 15,243,363 - 15,243,363 - - -Current Tax Liabilities - - - - - -Provisions 23,324,554 - 23,324,554 23,324,554 - 23,324,554Deferred tax liabilities - - - - 349,582,267 349,582,267Other liabilities 924,901,246 197,285,575 1,122,186,821 1,072,162,675 227,076,652 1,299,239,327Debt securities issued - - - - - -Subordinated Liabilities - - - - - -Total liabilities 61,904,337,484 197,285,575 62,101,623,059 82,697,413,660 576,658,919 83,274,072,579EquityShare capital 5,881,402,224 - 5,881,402,224 5,881,402,224 - 5,881,402,224Share premium 123,748,914 (3,809,575) 119,939,338 123,748,914 (6,384,430) 117,364,483Retained earnings (838,125,446) (578,374,514) (1,416,499,960) 501,655,017 864,919,334 1,366,574,351Reserves 1,266,815,947 1,831,491,379 3,098,307,325 1,777,480,508 208,082,104 1,985,562,612Total equity attributable 6,433,841,638 1,249,307,289 7,683,148,927 8,284,286,663 1,066,617,008 9,350,903,671to equity holdersNon-controlling interestTotal equity 6,433,841,638 1,249,307,289 7,683,148,927 8,284,286,663 1,066,617,008 9,350,903,671Total liabilities and equity 68,338,179,122 1,446,592,864 69,784,771,981 90,981,700,323 1,643,275,927 92,624,976,248
Particulars
" As at 01.04.2073 “(Date of Transition) "" As at 31.03.2074 “(End of last period presented
under previous GAAP) "
Previous GAAP Effect of
Transition toNFRSs
Opening NFRSsstatement of
FinancialPosition
Previous GAAP
CumulativeEffect of
Transition toNFRSs
Amount as perNFRSs
1
2
34
34
5
Explanatory Notes:1. Accural accounting of interest income on staff loans2. NBA re-categorized as Investment Property.3. NFRS transition resulting deferred tax assets/liabilities.4. Effect of various accounting policy changes in Other assets/liabilities.5. Recomputation of retained earnings and reserves as per the measurement of net assets done as per NFRS.
Ex-plana-
toryNote
1 7 T H A N N U A L R E P O R T78
3. Effect of NFRSs adoption for the statement of financial position
AssetsCash and cash equivalent 6,622,750,207 - 6,622,750,207 6,543,439,841 - 6,543,439,841Due from Nepal Rastra Bank 7,505,153,799 - 7,505,153,799 9,120,743,031 - 9,120,743,031Placement with Bank and 912,050,000 - 912,050,000 2,208,690,827 - 2,208,690,827Financial InstitutionsDerivative financial 21,078,426 - 21,078,426 22,823,158 - 22,823,158instrumentsOther trading assets - - - - - -Loan and advances to B/FIs 3,173,765,526 - 3,173,765,526 1,812,718,640 - 1,812,718,640Loans and advances 41,474,950,226 (171,194,060) 41,303,756,166 58,498,513,860 (432,612,307) 58,065,901,553to customersInvestment securities 4,915,008,949 - 4,915,008,949 8,580,461,864 - 8,580,461,864Current tax assets 96,081,774 - 96,081,774 32,911,140 - 32,911,140Investment in susidiaries - - - 52,343,880 (6,783,000) 45,560,880Investment in associates - - - - - -Investment property - 116,786,744 116,786,744 - 515,547,750 515,547,750Property and equipment 2,136,023,970 - 2,136,023,970 2,149,494,481 - 2,149,494,481Goodwill and Intangible - - - - - -assetsDeferred tax assets 871,821,895 (587,100,116) 284,721,778 441,966,657 (441,966,657) -Other assets 609,494,348 2,088,100,296 2,697,594,644 1,517,592,946 2,009,090,141 3,526,683,086Total Assets 68,338,179,119 1,446,592,864 69,784,771,983 90,981,700,324 1,643,275,927 92,624,976,248LiabilitiesDue to Bank and - - - - - -Financial InstituionsDue to Nepal Rastra Bank - - - 252,386,603 - 252,386,603Derivative financial - - - - - -instruments.Deposits from customers 60,940,868,320 - 60,940,868,320 81,349,539,828 - 81,349,539,828Borrowing 15,243,363 - 15,243,363 - - -Current Tax Liabilities - - - - - -Provisions 23,324,554 - 23,324,554 23,324,554 - 23,324,554Deferred tax liabilities - - - - 349,582,267 349,582,267Other liabilities 924,901,246 197,285,575 1,122,186,821 1,072,162,675 227,076,652 1,299,239,327Debt securities issued - - - - - -Subordinated Liabilities - - - - - -Total liabilities 61,904,337,484 197,285,575 62,101,623,059 82,697,413,660 576,658,919 83,274,072,579EquityShare capital 5,881,402,224 - 5,881,402,224 5,881,402,224 - 5,881,402,224Share premium 123,748,914 (3,809,575) 119,939,338 123,748,914 (6,384,430) 117,364,483Retained earnings (838,125,446) (578,374,514) (1,416,499,960) 501,655,017 864,919,334 1,366,574,351Reserves 1,266,815,947 1,831,491,379 3,098,307,325 1,777,480,508 208,082,104 1,985,562,612Total equity attributable 6,433,841,638 1,249,307,289 7,683,148,927 8,284,286,663 1,066,617,008 9,350,903,671to equity holdersNon-controlling interestTotal equity 6,433,841,638 1,249,307,289 7,683,148,927 8,284,286,663 1,066,617,008 9,350,903,671Total liabilities and equity 68,338,179,122 1,446,592,864 69,784,771,981 90,981,700,323 1,643,275,927 92,624,976,248
Particulars
" As at 01.04.2073 “(Date of Transition) "" As at 31.03.2074 “(End of last period presented
under previous GAAP) "
Previous GAAP Effect of
Transition toNFRSs
Opening NFRSsstatement of
FinancialPosition
Previous GAAP
CumulativeEffect of
Transition toNFRSs
Amount as perNFRSs
1
2
34
34
5
Explanatory Notes:1. Accural accounting of interest income on staff loans2. NBA re-categorized as Investment Property.3. NFRS transition resulting deferred tax assets/liabilities.4. Effect of various accounting policy changes in Other assets/liabilities.5. Recomputation of retained earnings and reserves as per the measurement of net assets done as per NFRS.
Ex-plana-
toryNote
791 7 T H A N N U A L R E P O R T
4. Effect of NFRSs adoption for statement of profit or loss and other comprehensive income
Interest income 1 5,492,386,444 (291,627,353) 5,200,759,092Interest expense 2,957,637,155 - 2,957,637,155Net interest income 2,534,749,289 (291,627,353) 2,243,121,937Fee and commission income 520,122,723 - 520,122,723Fee and commission expense 57,615,138 (2,574,855) 55,040,284Net fee and commission income 462,507,585 2,574,855 465,082,440Net interest, fee and commission income 2,997,256,874 (289,052,498) 2,708,204,376Net trading income 192,666,836 - 192,666,836Other operating income (262,659,050) 392,828,516 130,169,466Total operating income 2,927,264,660 103,776,018 3,031,040,678Impairment charge/(reversal) for 2 (1,501,225,044) (2,208,236) (1,503,433,280)loans and other lossesNet operating income 4,428,489,704 105,984,254 4,534,473,958Operating expensePersonnel expenses 3 1,039,174,432 90,920,412 1,130,094,845Other operating expenses 558,601,312 - 558,601,312Depreciation & Amortisation 4 197,105,828 850,510 197,956,338Operating Profit 2,633,608,131 14,213,331 2,647,821,462Non operating income 50,000 - 50,000Non operating expense 349,402,333 - 349,402,333Profit before income tax 2,284,255,798 14,213,331 2,298,469,129Income tax expense - -
Current Tax 256,448,007 - 256,448,007Deferred Tax 5 429,855,238 125,665,051 555,520,289
Profit for the year 1,597,952,553 (111,451,719) 1,486,500,834Other comprehensive income 6 183,828,765 183,828,765Total Comprehensive Income 1,597,952,553 72,377,045 1,670,329,598
Previous GAAP Effect of Transi-tion to NFRSs
Amount as perNFRSs
" For the year ended 31.03.2074 “(the latest periodpresented under previous GAAP)"
Particulars ExplanatoryNote
1 Interest income recognized in accrual basis and staff loan measured at fair value.2 Investment Provision reversed.3 Increase in expenses due to actuary valuation and finance expenses recognized under NFRS.4 Reversal of Provision on Investment Securities.5 Recognition of deferred tax expenses due to increase in profit.6 Effect of Gain on Investment measured at fair value and acturial gain on Defined Benefit Obligation net of Deferred Tax.
1 7 T H A N N U A L R E P O R T80
5. Effect of NFRSs adoption for statement of cash flows
Net cash flows from operating activities 4,906,346,857 (1,126,981,607) 3,779,365,250Net cash flows from investing activities (3,825,326,980) (260,897,386) (4,086,224,367)Net cash flows from financing activities 37,146,500 (2,574,855) 34,571,645Exchage Rate Fluctuation (2,206,114) 194,872,950 192,666,836Net increase/(decrease) in cash 1,115,960,262 (1,195,580,898) (79,620,633)and cash equivalentCash and cash equivalent at the 12,377,708,934 (5,754,958,727) 6,622,750,207beginning of the periodCash and cash equivalent at the end 13,493,669,196 (6,950,539,626) 6,543,129,573of the period
Previous GAAP Effect of Transi-tion to NFRSs
Amount as perNFRSs
"For the year ended 31.03.2074 “(the latest periodpresented under previous GAAP)"
Particulars ExplanatoryNote
* Explanatory note :
Difference resulting from effect of reclassificaation and remeasurement of items of Statement of Financial Position and Statementof Comprehensive Income as per NFRS.
1 7 T H A N N U A L R E P O R T80
5. Effect of NFRSs adoption for statement of cash flows
Net cash flows from operating activities 4,906,346,857 (1,126,981,607) 3,779,365,250Net cash flows from investing activities (3,825,326,980) (260,897,386) (4,086,224,367)Net cash flows from financing activities 37,146,500 (2,574,855) 34,571,645Exchage Rate Fluctuation (2,206,114) 194,872,950 192,666,836Net increase/(decrease) in cash 1,115,960,262 (1,195,580,898) (79,620,633)and cash equivalentCash and cash equivalent at the 12,377,708,934 (5,754,958,727) 6,622,750,207beginning of the periodCash and cash equivalent at the end 13,493,669,196 (6,950,539,626) 6,543,129,573of the period
Previous GAAP Effect of Transi-tion to NFRSs
Amount as perNFRSs
"For the year ended 31.03.2074 “(the latest periodpresented under previous GAAP)"
Particulars ExplanatoryNote
* Explanatory note :
Difference resulting from effect of reclassificaation and remeasurement of items of Statement of Financial Position and Statementof Comprehensive Income as per NFRS.
811 7 T H A N N U A L R E P O R T
Earnings Per Share- Diluted (Rs.)The calculation of Diluted Earnings Per Share as at reporting date was based on the profit attributable to equity holders of theBank by the weighted average number of ordinary shares outstanding during the year, after adjustment for the effects of allpotentially dilutive weighted average number of ordinary shares.
Profit Attributable to ordinary Shareholders (Rs.000) 967,034,844 1,486,500,834Weighted average number of Ordinary Shares used 76,890,435 74,918,204for Basic EPSWeighted average number of potential ordinary -shares outstandingWeighted average number of potential ordinary -shares that would have been issuedat average market priceWeighted average number of potential ordinary -shares that would have been issuedfor no considerationWeighted average number of ordinary 76,890,435 74,918,204shares used for Diluted EPSDiluted Earnings per Ordinary Share (Rs) 12.58 19.84
WeightedAverage Outstanding Weighted
AverageParticulars Outstanding
2018 2017
5.18 Earnings Per Ordinary Share
Earnings Per Share- Basic (Rs.)Basic earnings per share is calculated by dividing the net profit for the year attributable to equity holders of the parent by theweighted average number of ordinary shares outstanding during the year, as per the NAS 33 - Earnings per Share.
Profit Attributable to ordinary Shareholders 967,034,844 1,486,500,834
Weighted average number of Ordinary Shares 76,890,435 74,918,204Basic Earnings per Ordinary Share (Rs) 12.58 19.84
WeightedAverage Outstanding Weighted
AverageParticulars Outstanding
2018 2017
Weighted average number of ordinary sharesfor Basic EPSNumber of Shares held as at 1st Shrawan 58,814,022 58,814,022 58,814,022 58,814,022
Add; Share Issue During The Year 7,421,282 1,972,231 -Add: Bonus Share Issued of 2017 16,104,181 16,104,181 16,104,181 16,104,181Add: Issue For Merger -
Number of Shares held as at Ashar 31 2073 82,339,485 76,890,435 74,918,204 74,918,204
WeightedAverage Outstanding Weighted
AverageParticulars Outstanding
1 7 T H A N N U A L R E P O R T82
(a) Risk Weighted Exposure for Credit Risk 88,999,974,796 69,817,618,734(b) Risk Weighted Exposure for Operational Risk 4,400,361,860 3,864,116,900(c) Risk Weighted Exposure for Market Risk 163,590,204 185,586,533 Total 93,563,926,860 73,867,322,167Adjustments under Pillar IIAdd: 3% of the total RWE due to non compliance to Disclosure Requirement(6.4a 10)Add:..% of the total deposit due to in sufficient Liquid Assets(6.4a 6)Add 3% of the Risk Weighted Exposure as per Supervisory Adjustment 2,806,917,806 2,216,019,665Total Risk Weighted Exposures after Adjustment of Pillar II (a+b+c) 96,370,844,666 76,083,341,8321.2 CapitalCore Capital (Tier I) 10,430,744,856 7,187,036,484
(a) Paid up Equity Share Capital 8,233,948,524 5,881,402,224(b) Irredeemable non-cumulative preference shares(c) Share Premium 151,947,990 123,748,914(d) Proposed Bonus Equity shares(e) Statutory General Reserves 1,388,179,492 1,194,772,523(f) Retained Earnings 773,629,731 39,456,703(g) Current Year Profit and loss - -(h) Capital Reedemption Reserve(i) Capital Adjustment Reserve(j) Deferred Tax Reserve - 441,966,657(k) Dividend Equalisation Reserves(l) Debenture/Bond Redemption Reserve(m) Other Free Reserves(n) Less: Goodwill(o) Less:Fictitious Assets - -(p) Less: Loans to parties prohibited by acts & Directives(q) Less:Investment in equity in licensed Financial institutions(r) Less: Investment in equity of institutions with vested interest 116,960,880 52,343,880(s) Less: Investment in equity of institutions in excess of limits - -(t) Less: Investments arising out of underwriting commitments(u) Less: Reciprocal crossholdings - -(v) Less: Purchase of Land & Building(w) Less: Other Deductions 441,966,657
Adjustments under Pillar IILess: Shortfall in provisions (6.4a 1)Less: Loans to parties prohibited by acts & Directives(6.4a 2)Supplementary Capital (Tier II) 999,896,599 1,317,078,715
(a) Cumulative and/or Redeemable preference share(b) Subordinated Term Debt(c) Hybrid Capital Instruments(d) General loan loss provision 875,392,719 737,450,822(e) Exchange Equalisation Reserve 3,527,216(f) Investment Adjustment Reserve 124,503,880 576,100,677(g) Asset Revaluation Reserve(h) Other Reserves
Total Capital Fund (Tier I and Tier II) 11,430,641,456 8,504,115,1991.3 Capital Adequacy RatioTier I Capital to Total RWE 10.82 9.45Tier I and Tier II Capital to Total RWE 11.86 11.18
Capital Adequacy TableFor the year ended 32 Asar 2075 (July 16, 2018)
1.1 Risk Weighted Exposures Current Year
NPR Previous Year
NPR
1 7 T H A N N U A L R E P O R T82
(a) Risk Weighted Exposure for Credit Risk 88,999,974,796 69,817,618,734(b) Risk Weighted Exposure for Operational Risk 4,400,361,860 3,864,116,900(c) Risk Weighted Exposure for Market Risk 163,590,204 185,586,533 Total 93,563,926,860 73,867,322,167Adjustments under Pillar IIAdd: 3% of the total RWE due to non compliance to Disclosure Requirement(6.4a 10)Add:..% of the total deposit due to in sufficient Liquid Assets(6.4a 6)Add 3% of the Risk Weighted Exposure as per Supervisory Adjustment 2,806,917,806 2,216,019,665Total Risk Weighted Exposures after Adjustment of Pillar II (a+b+c) 96,370,844,666 76,083,341,8321.2 CapitalCore Capital (Tier I) 10,430,744,856 7,187,036,484
(a) Paid up Equity Share Capital 8,233,948,524 5,881,402,224(b) Irredeemable non-cumulative preference shares(c) Share Premium 151,947,990 123,748,914(d) Proposed Bonus Equity shares(e) Statutory General Reserves 1,388,179,492 1,194,772,523(f) Retained Earnings 773,629,731 39,456,703(g) Current Year Profit and loss - -(h) Capital Reedemption Reserve(i) Capital Adjustment Reserve(j) Deferred Tax Reserve - 441,966,657(k) Dividend Equalisation Reserves(l) Debenture/Bond Redemption Reserve(m) Other Free Reserves(n) Less: Goodwill(o) Less:Fictitious Assets - -(p) Less: Loans to parties prohibited by acts & Directives(q) Less:Investment in equity in licensed Financial institutions(r) Less: Investment in equity of institutions with vested interest 116,960,880 52,343,880(s) Less: Investment in equity of institutions in excess of limits - -(t) Less: Investments arising out of underwriting commitments(u) Less: Reciprocal crossholdings - -(v) Less: Purchase of Land & Building(w) Less: Other Deductions 441,966,657
Adjustments under Pillar IILess: Shortfall in provisions (6.4a 1)Less: Loans to parties prohibited by acts & Directives(6.4a 2)Supplementary Capital (Tier II) 999,896,599 1,317,078,715
(a) Cumulative and/or Redeemable preference share(b) Subordinated Term Debt(c) Hybrid Capital Instruments(d) General loan loss provision 875,392,719 737,450,822(e) Exchange Equalisation Reserve 3,527,216(f) Investment Adjustment Reserve 124,503,880 576,100,677(g) Asset Revaluation Reserve(h) Other Reserves
Total Capital Fund (Tier I and Tier II) 11,430,641,456 8,504,115,1991.3 Capital Adequacy RatioTier I Capital to Total RWE 10.82 9.45Tier I and Tier II Capital to Total RWE 11.86 11.18
Capital Adequacy TableFor the year ended 32 Asar 2075 (July 16, 2018)
1.1 Risk Weighted Exposures Current Year
NPR Previous Year
NPR
831 7 T H A N N U A L R E P O R T
1Ca
sh B
alan
ce 2
,961
,880
,496
2,9
61,8
80,4
960%
- 3
,238
,043
,349
-2
Bala
nce
With
Nep
al R
astr
a Ba
nk 6
,164
,031
,528
6,1
64,0
31,5
280%
- 9
,306
,305
,031
-3
Gol
d 1
,200
,000
1,2
00,0
000%
- 1
,480
,569
-4
Inve
stm
ent i
n Ne
pale
se G
over
nmen
t Sec
uriti
es 1
4,43
8,50
8,40
3 1
4,43
8,50
8,40
30%
- 8
,781
,429
,046
-5
All c
laim
s on
Gov
ernm
ent o
f Nep
al 2
79,7
71,1
25 2
79,7
71,1
250%
- 1
56,8
89,3
63 -
6In
vest
men
t in
Nepa
l Ras
tra B
ank s
ecur
ities
-0%
- -
-7
All o
ther
clai
ms o
n Ne
pal R
astr
a Ba
nk 1
31,4
55,7
43 1
31,4
55,7
430%
- -
-8
Inve
stm
ent i
n Fo
reig
n Go
vern
men
t Sec
uriti
es a
nd C
entr
al B
ank (
ECA
ratin
g 0-1
) -
0% -
- -
9In
vest
men
t in
Fore
ign
Gove
rnm
ent S
ecur
ities
and
Cen
tral
Ban
k (EC
A ra
ting 2
) -
20%
- -
-10
Inve
stm
ent i
n Fo
reig
n Go
vern
men
t Sec
uriti
es a
nd C
entr
al B
ank (
ECA
ratin
g 3)
-50
% -
- -
11In
vest
men
t in
Fore
ign
Gove
rnm
ent S
ecur
ities
and
Cen
tral
Ban
k (EC
A ra
ting 4
-6)
-10
0% -
- -
12In
vest
men
t in
Fore
ign
Gove
rnm
ent S
ecur
ities
and
Cen
tral
Ban
k (EC
A ra
ting 7
) -
150%
- -
-13
Clai
ms o
n BIS
,IMF,
ECB,
EC an
d Mul
tilat
eral
Dev
elop
men
t Ban
k rec
ogni
sed
fram
ewor
k -
0% -
- -
14Cl
aim
s on
othe
r Mul
tilat
eral
Dev
elop
men
t Ban
ks -
100%
- -
-15
Clai
ms o
n Pu
blic
Sec
tor E
ntity
(ECA
0-1
) -
20%
- -
-16
Clai
ms o
n Pu
blic
Sect
or E
ntity
(ECA
2)
-50
% -
- -
17Cl
aim
s on
Publ
ic S
ecto
r Ent
ity (E
CA3-
6) -
100%
- -
-18
Clai
ms o
n Pu
blic
Sect
or E
ntity
(ECA
7)
-15
0% -
- -
19Cl
aim
s on
dom
estic
ban
ks th
at m
eet c
apita
l ade
quac
y req
uire
men
ts 5
,548
,136
,819
- 5
,548
,136
,819
20%
1,1
09,6
27,3
64 3
,640
,736
,030
728
,147
,206
20Cl
aim
s on
dom
estic
ban
ks th
at d
o no
t mee
t cap
ital a
dequ
acy r
equi
rem
ents
20,
788,
103
20,
788,
103
100%
20,
788,
103
- -
21Cl
aim
s on
fore
ign
bank
( EC
A Ra
ting
0-1)
165
,769
,544
165
,769
,544
20%
33,
153,
909
500
,716
,038
100
,143
,208
22Cl
aim
s on
fore
ign
bank
( EC
A Ra
ting
2) 2
,463
,517
,827
2,4
63,5
17,8
2750
% 1
,231
,758
,914
699
,462
,861
349
,731
,431
23Cl
aim
s on
fore
ign
bank
(ECA
Rat
ing
3-6)
-10
0% -
- -
24Cl
aim
s on
fore
ign
bank
(ECA
Rat
ing 7
) -
150%
- -
-25
Clai
ms o
n fo
reig
n ba
nk in
corp
orat
ed in
SAAR
C re
gion
ope
ratin
g with
a bu
ffer
228
,468
,874
228
,468
,874
20%
45,
693,
775
1,3
30,7
83,2
24 2
66,1
56,6
45of
1%
abov
e th
eir r
espe
ctiv
e re
gula
tory
capi
tal r
equi
rem
ent
26Cl
aim
s on
Dom
estic
Cor
pora
tes
38,
961,
346,
537
95,
784,
708
35,
160,
753
38,
830,
401,
077
100%
38,
830,
401,
077
29,
848,
751,
284
29,
848,
751,
284
27Cl
aim
on
Fore
ign
Corp
orat
es (E
CA 0
-1)
- -
20%
- -
-28
Clai
m o
n Fo
reig
n Co
rpor
ates
(ECA
2)
- -
50%
- -
-29
Clai
m o
n Fo
reig
n Co
rpor
ates
(ECA
3-6
) -
-10
0% -
- -
30Cl
aim
on
Fore
ign
Corp
orat
es (E
CA 7
) -
-15
0% -
- -
31Re
gula
tory
Ret
ail P
ortfo
lio (N
ot O
verd
ue)
12,
182,
512,
112
21,
806,
405
365
,733
,927
11,
794,
971,
781
75%
8,8
46,2
28,8
36 9
,419
,447
,831
7,0
64,5
85,8
7332
Clai
ms f
ulfil
ling a
ll crit
erio
n of
regu
lato
ry re
tail e
xcep
t gra
nula
rity
-10
0% -
- -
33Cl
aim
s sec
ured
by r
esid
entia
l pro
pert
ies
9,6
87,6
42,8
88 -
9,6
87,6
42,8
8860
% 5
,812
,585
,733
8,7
28,9
53,4
86 5
,237
,372
,092
34Cl
aim
s not
fully
secu
red
by re
siden
tial p
rope
rtie
s -
150%
- -
-35
Clai
ms s
ecur
ed b
y res
iden
tial p
rope
rtie
s ( o
verd
ue)
118
,885
,350
30,
996,
269
- 8
7,88
9,08
110
0% 8
7,88
9,08
1 1
42,0
16,6
60 1
42,0
16,6
6036
Clai
ms s
ecur
ed b
y Com
mer
cial
real
est
ate
3,1
91,8
35,3
69 -
3,1
91,8
35,3
6910
0% 3
,191
,835
,369
2,1
79,1
10,6
41 2
,179
,110
,641
37Pa
st d
ue cl
aim
s(ex
cept
for c
laim
secu
red
by re
siden
tial p
rope
rtie
s) 3
,551
,911
,788
1,6
19,4
46,3
94 4
6,10
0 1
,932
,419
,294
150%
2,8
98,6
28,9
41 2
,508
,144
,081
3,7
62,2
16,1
2138
High
Risk
clai
ms
4,6
77,1
86,2
36 2
,226
,267
144
,629
,617
4,5
30,3
30,3
5215
0% 6
,795
,495
,528
4,7
58,3
76,9
63 7
,137
,565
,445
39In
vest
men
ts in
equ
ity o
f ins
titut
ions
list
ed in
the
stoc
k ex
chan
ge 7
93,9
28,8
28 -
793
,928
,828
100%
793
,928
,828
901
,171
,083
901
,171
,083
40In
vest
men
ts in
equ
ity o
f ins
titut
ions
not
list
ed in
the
stoc
k ex
chan
ge 4
86,3
55,1
80 9
2,99
4,81
4 -
393
,360
,366
150%
590
,040
,550
65,
678,
864
98,
518,
296
41St
aff L
oan
secu
red
by re
siden
tail p
rope
rty
904
,757
,845
- 9
04,7
57,8
4560
% 5
42,8
54,7
07 1
,025
,095
,356
615
,057
,214
42In
tere
st R
ecei
vabl
e/ C
laim
on
gove
rnm
ent s
ecur
ities
100
,822
,078
- 1
00,8
22,0
780%
- 6
1,00
5,54
4 -
43Ca
sh in
Tran
sit a
nd O
ther
cash
item
s in
proc
ess o
f col
lect
ion
- -
20%
- 3
02,9
89 6
0,59
844
Oth
er A
sset
s 9
,622
,254
,378
1,1
11,5
87,3
60 -
8,5
10,6
67,0
1810
0% 8
,510
,667
,018
4,1
59,5
86,8
15 4
,159
,586
,815
Tota
l 1
16,6
82,9
67,0
52 2
,974
,842
,216
545
,570
,397
113
,162
,554
,440
79,
341,
577,
733
91,
453,
487,
111
62,
590,
190,
612
Curr
ent
Year
Bal
ance
She
et E
xpos
ures
(A)
Ris
k W
eigh
ted
Expo
sure
for C
redi
t Ris
kFo
r the
yea
r end
ed 3
2 As
ar 2
075
(July
16,
201
8)
Boo
k Va
lue
a Sp
ecifi
cPr
ovisi
on b
Elig
ible
CRM
c N
et V
alue
d=a-
b-c
Risk
Wei
ght
e
Risk
Wei
ghte
dEx
posu
res
f=d*
e N
et V
alue
Ris
k W
eigh
ted
Expo
sure
s
Prev
ious
Yea
r
1 7 T H A N N U A L R E P O R T84
1Re
voca
ble C
omm
itmen
ts -
-0%
- -
-
2Bi
lls C
olle
ctio
n 2
29,1
78,6
99 2
29,1
78,6
990%
- 1
22,0
14,0
21 -
3Fo
rwar
d Ex
chan
ge C
ontr
act L
iabu
litie
s 3
,489
,109
,912
3,4
89,1
09,9
1210
% 3
48,9
10,9
91 2
,366
,679
,529
236
,667
,953
4LC
Com
mitm
ents
With
Orig
inal
Mat
urity
Up
to 6
mon
ths d
omes
tic co
unte
rpar
ty 3
,341
,887
,655
139
,471
,897
3,2
02,4
15,7
5920
% 6
40,4
83,1
52 2
,517
,614
,371
503
,522
,874
ECA
Ratin
g 0-
1 -
- -
20%
- -
-
ECA
Ratin
g 2 -
- -
50%
- -
-
ECA
Ratin
g 3-
6 -
- -
100%
- -
-
ECA
Ratin
g 7 -
- -
150%
- -
-
5L C
Com
mitm
ents
With
Orig
inal
Mat
urity
Ove
r 6 m
onth
s dom
estic
coun
terp
arty
- -
-50
% -
- -
ECA
Ratin
g 0-
1 -
- -
20%
- -
-
ECA
Ratin
g 2 -
- -
50%
- -
-
ECA
Ratin
g 3-
6 -
- -
100%
- -
-
ECA
Ratin
g 7 -
- -
150%
- -
-
6Bi
d Bo
nd an
d Pe
rfor
man
ce B
ond
and
Coun
ter g
uara
ntee
dom
estic
coun
terp
arty
7,3
00,6
83,7
10 6
73,4
92,7
91 6
,627
,190
,919
50%
3,3
13,5
95,4
60 4
,660
,450
,333
2,3
30,2
25,1
67
ECA
Ratin
g 0-
1 -
- -
20%
- -
-
ECA
Ratin
g 2 -
- -
50%
- -
-
ECA
Ratin
g 3-
6 -
- -
100%
- -
-
ECA
Ratin
g 7 -
- -
150%
- -
-
7Un
derw
ritin
g com
mitm
ents
- -
-50
% -
- -
8Le
ndin
g of B
ank'
s Sec
uriti
es o
r Pos
ting o
f Sec
uriti
es a
s col
letr
al -
- -
100%
- -
-
9Re
purc
hase
Agr
eem
ents
, Ass
ets s
ale
with
reco
urse
(incl
udin
g rep
o,re
vers
e re
po)
- -
-10
0% -
- -
10Ad
vanc
e Pay
men
t Gua
rant
ee 3
,870
,310
,968
254
,279
,369
3,6
16,0
31,5
9910
0% 3
,616
,031
,599
3,0
52,7
84,3
00 3
,052
,784
,300
11Fi
nanc
ial G
uara
ntee
- -
-10
0% -
- -
12Ac
cept
ance
s and
Endr
osem
ents
1,1
90,7
17,1
87 5
8,72
4,18
6 1
,131
,993
,001
100%
1,1
31,9
93,0
01 6
87,7
05,7
72 6
87,7
05,7
72
13Un
paid
por
tion
of p
artly
pai
d sh
ares
& Se
curit
ies
- -
100%
- -
-
14Irr
evoc
able
Cre
dit C
omm
itmen
ts (s
hort
term
) 2
,162
,077
,582
2,1
62,0
77,5
8220
% 4
32,4
15,5
16 1
,578
,536
,887
315
,707
,377
15Irr
evoc
able
Cre
dit C
omm
itmen
ts (l
ong t
erm
) -
-50
% -
- -
16Cl
aim
s on
fore
ign
bank
inco
rpor
ated
in SA
ARC
regi
on o
pera
ting w
ith a
buffe
r -
20%
- -
-
of 1
% a
bove
thei
r res
pect
ive r
egul
ator
y cap
ital r
equi
rem
ent
17O
ther
Con
tinge
nt Li
abili
ties
174
,967
,344
174
,967
,344
100%
174
,967
,344
100
,814
,679
100
,814
,679
18Un
paid
Gua
rant
ee C
laim
s -
200%
- -
-
Tota
l 2
1,75
8,93
3,05
6 -
1,1
25,9
68,2
43 2
0,63
2,96
4,81
3 9
,658
,397
,063
15,
086,
599,
892
7,2
27,4
28,1
22
Tota
l RW
E fo
r cre
dit R
isk
(A) +
(B)
138
,441
,900
,108
5,2
57,4
02,1
13 1
,671
,538
,639
133
,795
,519
,253
88,
999,
974,
796
106
,540
,087
,003
69,
817,
618,
734
Curr
ent
Year
Off-
Bal
ance
Shee
t Exp
osur
es (B
) B
ook
Valu
ea
Spec
ific
Prov
ision
b E
ligib
le C
RMc
Net
Val
ued=
a-b-
c
Risk
Wei
ght
e
Risk
Wei
ghte
dEx
posu
res
f=d*
e
Net
Val
ued=
a-b-
c
Ris
k W
eigh
ted
Expo
sure
sf=
d*e
Prev
ious
Yea
r
1 7 T H A N N U A L R E P O R T84
1Re
voca
ble C
omm
itmen
ts -
-0%
- -
-
2Bi
lls C
olle
ctio
n 2
29,1
78,6
99 2
29,1
78,6
990%
- 1
22,0
14,0
21 -
3Fo
rwar
d Ex
chan
ge C
ontr
act L
iabu
litie
s 3
,489
,109
,912
3,4
89,1
09,9
1210
% 3
48,9
10,9
91 2
,366
,679
,529
236
,667
,953
4LC
Com
mitm
ents
With
Orig
inal
Mat
urity
Up
to 6
mon
ths d
omes
tic co
unte
rpar
ty 3
,341
,887
,655
139
,471
,897
3,2
02,4
15,7
5920
% 6
40,4
83,1
52 2
,517
,614
,371
503
,522
,874
ECA
Ratin
g 0-
1 -
- -
20%
- -
-
ECA
Ratin
g 2 -
- -
50%
- -
-
ECA
Ratin
g 3-
6 -
- -
100%
- -
-
ECA
Ratin
g 7 -
- -
150%
- -
-
5L C
Com
mitm
ents
With
Orig
inal
Mat
urity
Ove
r 6 m
onth
s dom
estic
coun
terp
arty
- -
-50
% -
- -
ECA
Ratin
g 0-
1 -
- -
20%
- -
-
ECA
Ratin
g 2 -
- -
50%
- -
-
ECA
Ratin
g 3-
6 -
- -
100%
- -
-
ECA
Ratin
g 7 -
- -
150%
- -
-
6Bi
d Bo
nd an
d Pe
rfor
man
ce B
ond
and
Coun
ter g
uara
ntee
dom
estic
coun
terp
arty
7,3
00,6
83,7
10 6
73,4
92,7
91 6
,627
,190
,919
50%
3,3
13,5
95,4
60 4
,660
,450
,333
2,3
30,2
25,1
67
ECA
Ratin
g 0-
1 -
- -
20%
- -
-
ECA
Ratin
g 2 -
- -
50%
- -
-
ECA
Ratin
g 3-
6 -
- -
100%
- -
-
ECA
Ratin
g 7 -
- -
150%
- -
-
7Un
derw
ritin
g com
mitm
ents
- -
-50
% -
- -
8Le
ndin
g of B
ank'
s Sec
uriti
es o
r Pos
ting o
f Sec
uriti
es a
s col
letr
al -
- -
100%
- -
-
9Re
purc
hase
Agr
eem
ents
, Ass
ets s
ale
with
reco
urse
(incl
udin
g rep
o,re
vers
e re
po)
- -
-10
0% -
- -
10Ad
vanc
e Pay
men
t Gua
rant
ee 3
,870
,310
,968
254
,279
,369
3,6
16,0
31,5
9910
0% 3
,616
,031
,599
3,0
52,7
84,3
00 3
,052
,784
,300
11Fi
nanc
ial G
uara
ntee
- -
-10
0% -
- -
12Ac
cept
ance
s and
Endr
osem
ents
1,1
90,7
17,1
87 5
8,72
4,18
6 1
,131
,993
,001
100%
1,1
31,9
93,0
01 6
87,7
05,7
72 6
87,7
05,7
72
13Un
paid
por
tion
of p
artly
pai
d sh
ares
& Se
curit
ies
- -
100%
- -
-
14Irr
evoc
able
Cre
dit C
omm
itmen
ts (s
hort
term
) 2
,162
,077
,582
2,1
62,0
77,5
8220
% 4
32,4
15,5
16 1
,578
,536
,887
315
,707
,377
15Irr
evoc
able
Cre
dit C
omm
itmen
ts (l
ong t
erm
) -
-50
% -
- -
16Cl
aim
s on
fore
ign
bank
inco
rpor
ated
in SA
ARC
regi
on o
pera
ting w
ith a
buffe
r -
20%
- -
-
of 1
% a
bove
thei
r res
pect
ive r
egul
ator
y cap
ital r
equi
rem
ent
17O
ther
Con
tinge
nt Li
abili
ties
174
,967
,344
174
,967
,344
100%
174
,967
,344
100
,814
,679
100
,814
,679
18Un
paid
Gua
rant
ee C
laim
s -
200%
- -
-
Tota
l 2
1,75
8,93
3,05
6 -
1,1
25,9
68,2
43 2
0,63
2,96
4,81
3 9
,658
,397
,063
15,
086,
599,
892
7,2
27,4
28,1
22
Tota
l RW
E fo
r cre
dit R
isk
(A) +
(B)
138
,441
,900
,108
5,2
57,4
02,1
13 1
,671
,538
,639
133
,795
,519
,253
88,
999,
974,
796
106
,540
,087
,003
69,
817,
618,
734
Curr
ent
Year
Off-
Bal
ance
Shee
t Exp
osur
es (B
) B
ook
Valu
ea
Spec
ific
Prov
ision
b E
ligib
le C
RMc
Net
Val
ued=
a-b-
c
Risk
Wei
ght
e
Risk
Wei
ghte
dEx
posu
res
f=d*
e
Net
Val
ued=
a-b-
c
Ris
k W
eigh
ted
Expo
sure
sf=
d*e
Prev
ious
Yea
r
851 7 T H A N N U A L R E P O R T
Bal
ance
She
et C
redi
t exp
osur
es (A
) D
epos
itsw
ith B
anks
Dep
osits
with
oth
erBa
nks/
FI G
old
HM
G/N
&N
RB S
ec.
G'te
e of
Gov
t of
Nep
al
Sec
/G'te
eof
oth
erSo
verig
ns
G'te
e of
Dom
estic
Bank
s
Elig
ible
Cre
dit R
isk
Miti
gatio
n (C
RM)
As o
n 32
Ash
ad 2
075
(16
July
201
8)
G'te
e of
MD
BS
Sec
/G'te
eof
For
eign
Bank
shD
df
Cash
Bal
ance
--
--
--
--
--
Bala
nce
With
Nep
al R
astr
a Ban
k-
--
--
--
--
-G
old
--
--
--
--
--
Inve
stm
ent i
n Ne
pale
se G
over
nmen
t Sec
uriti
es-
--
--
--
--
-Al
l cla
ims o
n Go
vern
men
t of N
epal
--
--
--
--
--
Inve
stm
ent i
n Ne
pal R
astr
a Ba
nk se
curit
ies
--
--
--
--
--
All o
ther
clai
ms o
n N
epal
Ras
tra
Bank
--
--
--
--
--
Inve
stm
ent i
n Fo
reig
n Go
vern
men
t Sec
uriti
es a
nd C
entr
al B
ank (
ECA
ratin
g 0-1
)-
--
--
--
--
-In
vest
men
t in
Fore
ign
Gove
rnm
ent S
ecur
ities
and
Cent
ral B
ank (
ECA
ratin
g 2)
--
--
--
--
--
Inve
stm
ent i
n Fo
reig
n Go
vern
men
t Sec
uriti
es an
d Ce
ntra
l Ban
k (EC
A ra
ting 3
)-
--
--
--
--
-In
vest
men
t in
Fore
ign
Gove
rnm
ent S
ecur
ities
and
Cen
tral
Ban
k (EC
A ra
ting 4
-6)
--
--
--
--
--
Inve
stm
ent i
n Fo
reig
n Go
vern
men
t Sec
uriti
es an
d Ce
ntra
l Ban
k (EC
A ra
ting 7
)-
--
--
--
--
-Cl
aim
s on
BIS,
IMF,
ECB,
EC a
nd M
ultil
ater
al-
--
--
--
--
-De
velo
pmen
t Ban
k rec
ogni
sed b
y the
fram
ewor
k-
--
--
--
--
-Cl
aim
s on
othe
r Mul
tilat
eral
Dev
elop
men
t Ban
ks-
--
--
--
--
-Cl
aim
s on
Publ
ic S
ecto
r Ent
ity (E
CA 0
-1)
--
--
--
--
--
Clai
ms o
n Pu
blic
Sec
tor E
ntity
(ECA
2)
--
--
--
--
--
Clai
ms o
n Pu
blic
Sec
tor E
ntity
(ECA
3-6
)-
--
--
--
--
-Cl
aim
s on
Publ
ic S
ecto
r Ent
ity(E
CA 7
)-
--
--
--
--
-Cl
aim
s on
dom
estic
ban
ks th
at m
eet c
apita
l ade
quac
y req
uire
men
ts-
--
--
--
--
-Cl
aim
s on
dom
estic
ban
ks th
at d
onot
mee
t cap
ital a
dequ
acy r
equi
rem
ents
--
--
--
--
--
Clai
ms o
n fo
reig
n ba
nk (E
CA R
atin
g 0-
1)-
--
--
--
--
-Cl
aim
s on
fore
ign
bank
(ECA
Rat
ing
2)-
--
--
--
--
-Cl
aim
s on
fore
ign
bank
(ECA
Rat
ing
3-6)
--
--
--
--
--
Clai
ms o
n fo
reig
n ba
nk (E
CA R
atin
g 7)
--
--
--
--
--
Clai
ms o
n fo
reig
n ba
nk in
corp
orat
ed in
SAAR
C re
gion
ope
ratin
g with
a bu
ffer
--
--
--
--
--
of 1
% ab
ove
thei
r res
pect
ive
regu
lato
ry ca
pita
l req
uire
men
tCl
aim
s on
Dom
estic
Cor
pora
tes
35,
160,
753
--
--
--
--
35,1
60,7
53Cl
aim
s on
Fore
ign
Corp
orat
es(E
CA 0
-1)
--
--
--
--
--
Clai
ms o
n Fo
reig
n Co
rpor
ates
(ECA
2)
--
--
--
--
--
Clai
ms o
n Fo
reig
n Co
rpor
ates
(ECA
3-6
)-
--
--
--
--
-Cl
aim
s on
Fore
ign
Corp
orat
es(E
CA 7
)Re
gula
tory
Ret
ail P
ortfo
lio (N
ot O
verd
ue)
313
,342
,631
52,3
91,2
9636
5,73
3,92
7Cl
aim
s ful
fillin
g all c
riter
ion
of re
gula
tory
reta
il exc
ept g
ranu
larit
y-
--
--
--
--
-Re
gula
tory
Ret
ail P
ortfo
lio (O
verd
ue)
--
--
--
--
--
Clai
ms s
ecur
ed b
y res
iden
tial p
rope
rtie
s (w
ith co
nditi
on)
Clai
ms s
ecur
ed b
y res
iden
tial p
rope
rtie
s (w
ithou
t con
ditio
n)-
--
--
--
--
-U
nsec
ured
por
tion
of cl
aim
s sec
ured
by r
esid
entia
l pro
pert
ies
--
--
--
--
--
Clai
ms n
ot fu
lly se
cure
d by
resid
entia
l pro
pert
ies
--
--
--
--
--
Clai
ms s
ecur
ed b
y res
iden
tial p
rope
rtie
s(ov
erdu
e)-
--
--
--
--
-Cl
aim
s sec
ured
by C
omm
erci
al re
al e
stat
e-
--
--
--
--
-Pa
st d
ue cl
aim
s(ex
cept
for c
laim
secu
red
by re
siden
tial p
rope
rtie
s) 2
8,50
017
,600
46,1
00Hi
gh R
isk C
laim
s(Ve
ntur
e Ca
pita
l,priv
ate
equi
ty in
vest
men
ts,
135
,529
,617
9,10
0,00
014
4,62
9,61
7pe
rson
al lo
ans &
cred
it ca
rd re
ceiv
able
s)In
vest
men
ts in
equ
ity o
f ins
titut
ions
not
list
ed in
stoc
k ex
chan
ge-
--
--
--
--
-In
vest
men
ts in
equ
ity o
f ins
titut
ions
list
ed in
stoc
k ex
chan
ge-
--
--
--
--
-O
ther
Loan
s & A
dvan
ces
--
--
--
--
--
Cash
and
cas
h ite
ms i
n tr
ansit
--
--
--
--
--
Fict
itiou
s Ass
ets
--
--
--
--
--
Oth
er A
sset
s (as
per
att
achm
ent)
--
--
--
--
--
Tota
l-
--
--
--
--
-
1 7 T H A N N U A L R E P O R T86
Off
Bal
ance
She
et E
xpos
ures
(B)
Dep
osits
with
Ban
ks
Dep
osits
with
oth
erBa
nks/
FI G
old
HM
G/N
&N
RB S
ec.
G'te
e of
Gov
t of
Nep
al
Sec
/G'te
eof
oth
erSo
verig
ns
G'te
e of
Dom
estic
Bank
s
G'te
e of
MD
BS S
ec/G
'tee
of F
orei
gnBa
nks
hDdf
Forw
ard
Exch
ange
Con
trac
t Lia
bulit
ies
-
LC C
omm
itmen
ts W
ith O
rigin
al M
atur
ity U
p to
6 mon
ths d
omes
tic co
unte
rpar
ty 1
39,4
71,8
97 1
39,4
71,8
97
ECA
Ratin
g 0-
1-
--
--
--
--
-
ECA
Ratin
g 2-
--
--
--
--
-
ECA
Ratin
g 3-
6-
--
--
--
--
ECA
Ratin
g 7-
--
--
--
--
L C C
omm
itmen
ts W
ith O
rigin
al M
atur
ity O
ver 6
mon
ths d
omes
tic co
unte
rpar
ty-
--
--
--
--
ECA
Ratin
g 0-
1-
--
--
--
--
ECA
Ratin
g 2-
--
--
--
--
ECA
Ratin
g 3-
6-
--
--
--
--
ECA
Ratin
g 7-
--
--
--
--
Bid
Bond
and P
erfo
rman
ce B
ond
and
Coun
ter g
uara
ntee
dom
estic
coun
terp
arty
673
,492
,791
673
,492
,791
ECA
Ratin
g 0-
1-
--
--
--
--
ECA
Ratin
g 2-
--
--
--
--
ECA
Ratin
g 3-
6-
--
--
--
--
ECA
Ratin
g 7-
--
--
--
--
Unde
rwrit
ing c
omm
itmen
ts-
--
--
--
--
Lend
ing o
f Ban
k's S
ecur
ities
or P
ostin
g of
Secu
ritie
s as c
olle
tral
--
--
--
--
-
Repu
rcha
se A
gree
men
ts, A
sset
s sal
e with
reco
urse
(inclu
ding
repo
/rev
erse
repo
)-
--
--
--
--
Adva
nce
Paym
ent G
uara
ntee
254
,279
,369
254
,279
,369
Fina
ncia
l Gua
rant
ee-
--
--
--
--
Acce
ptan
ces a
nd E
ndro
sem
ents
58,
724,
186
58,
724,
186
Unp
aid
port
ion
of P
artly
pai
d sh
ares
and
secu
ritie
s-
--
--
--
--
Irrev
ocab
le C
redi
t Com
mitm
ents
(sho
rt te
rm)
--
--
--
--
-
Irrev
ocab
le C
redi
t Com
mitm
ents
(lon
g ter
m)
--
--
--
--
-
Clai
ms o
n fo
reig
n ba
nk in
corp
orat
ed in
SAAR
C re
gion
ope
ratin
g with
a bu
ffer
--
--
--
--
-
of 1
% a
bove
thei
r res
pect
ive r
egul
ator
y cap
ital r
equi
rem
ent
Oth
er C
ontin
gent
Liab
ilitie
s-
--
--
--
--
Tota
l1,
125,
968,
243
- -
- -
- -
- -
1,1
25,9
68,2
43
Tota
l of E
ligib
le C
redi
t Risk
Miti
gant
1,1
25,9
68,2
43 -
- -
- -
- -
- 1
,125
,968
,243
871 7 T H A N N U A L R E P O R T
Net Interest Income 2,529,423,193 1,968,482,576 1,542,472,350Commission & Discount Income 182,987,153 109,650,277 70,339,243
Other Operating Income 436,595,872 292,661,203 189,821,047
Exchange Fluctuation Income 190,460,721 153,557,044 88,922,594
Additional/Deduction Interest (334,010,973) 1,440,079,880 (60,718,454)
Suspense during the period
Gross Income(a) 3,005,455,966 3,964,430,980 1,830,836,781Alfa (b) 15% 15% 15%
Fixed Percentage of Gross Income[c=(a*b)] (c) 450,818,395 594,664,647 274,625,517
Capital Requirement for operational 440,036,186 386,411,690
risk(d) (average of c)
Risk Weight(reciprocal of capital requirement 10 10
of 10%) in times (e)Equivalent Risk Weight Exposure [f=(d*e)] 4,400,361,860 - 3,864,116,900
Risk Weighted Exposure For Operational RiskFor the year ended 32 Asar 2075 (July 16, 2018)
FY 2072/73 FY 2071/72 Last Year NPRParticulars FY 2073/74
871 7 T H A N N U A L R E P O R T
Net Interest Income 2,529,423,193 1,968,482,576 1,542,472,350Commission & Discount Income 182,987,153 109,650,277 70,339,243
Other Operating Income 436,595,872 292,661,203 189,821,047
Exchange Fluctuation Income 190,460,721 153,557,044 88,922,594
Additional/Deduction Interest (334,010,973) 1,440,079,880 (60,718,454)
Suspense during the period
Gross Income(a) 3,005,455,966 3,964,430,980 1,830,836,781Alfa (b) 15% 15% 15%
Fixed Percentage of Gross Income[c=(a*b)] (c) 450,818,395 594,664,647 274,625,517
Capital Requirement for operational 440,036,186 386,411,690
risk(d) (average of c)
Risk Weight(reciprocal of capital requirement 10 10
of 10%) in times (e)Equivalent Risk Weight Exposure [f=(d*e)] 4,400,361,860 - 3,864,116,900
Risk Weighted Exposure For Operational RiskFor the year ended 32 Asar 2075 (July 16, 2018)
FY 2072/73 FY 2071/72 Last Year NPRParticulars FY 2073/74
1 7 T H A N N U A L R E P O R T88
1 Indian Rupee (INR) 145,976,030 160.08 233,671,131 233,671,131 305,306,094
2 US Dollor (267,310) 109.95 (29,390,719) 29,390,719 17,730,692
3 Pound Sterling (GBP) 40,381 145.29 5,866,996 5,866,996 3,274,444
4 EURO 79,377 128.34 10,187,218 10,187,218 4,159,906
5 Thai Bhat (THB) 51,390 3.27 167,788 167,788 149,799
6 Swiss Franc (CHF) 10,030 109.55 1,098,736 1,098,736 12,056,863
7 Australian Dollar (AUD) 123,785 81.27 10,059,403 10,059,403 1,027,327
8 Canadian Dollor(CAD) 28,700 83.46 2,395,302 2,395,302 2,248,995
9 Singapur Dollor (SGD) 6,202 80.51 499,323 499,323 206,671
10 Japanese Yen (JPY) 13,285,508 0.98 12,953,371 12,953,371 2,948,546
11 Hongkong Dollor (HKD) 7,253 13.93 101,039 101,039 88,484
12 Denish Kroner (DKK) 66,320 17.15 1,137,049 1,137,049 369,576
13 Swedish Kroner (SEK) - 12.34 - - -
14 Saudi Arabian Riyal (SRL) 333,300 29.30 9,764,024 9,764,024 11,593,214
15 Qatar Riyal (QAR) 5,901 165.17 974,612 974,612 384,715
16 United Arab Emirates (AED) 64,276 29.86 1,919,295 1,919,295 1,713,171
17 Malasiyan Ringgit (MYR) 48,679 27.08 1,317,984 1,317,984 4,414,500
18 Korean WON 5,230 8.97 46,887 46,887 74,000
19 Chinese Yuan (CNY) 198,944 16.11 3,204,990 3,204,990 649,847
20 (BHD) 105 289.93 30,435 30,435 71,593
21 KWD 6,612 362.07 2,394,108 2,394,108 2,704,632
Total Open Position (a) 327,180,408 371,173,067
Fixed Percentage (b) 5% 5%
Capital Charge for Market Risk [c=(a×b)] 16,359,020 18,558,653
Risk Weight (reciprocal of capital requirement of 10%) in times (d) 10 10
Equivalent Risk Weight Exposure [e=(c×d)] 163,590,204 185,586,533
Risk Weighted Exposure For Market RiskFor the year ended 32 Asar 2075 (July 16, 2018)
S.No. Currency ExchangeRate
Open Position(NPR)
Open Position(FCY)
RelevantOpen Position
RelevantOpen PositionPrevious Year
1 7 T H A N N U A L R E P O R T88
1 Indian Rupee (INR) 145,976,030 160.08 233,671,131 233,671,131 305,306,094
2 US Dollor (267,310) 109.95 (29,390,719) 29,390,719 17,730,692
3 Pound Sterling (GBP) 40,381 145.29 5,866,996 5,866,996 3,274,444
4 EURO 79,377 128.34 10,187,218 10,187,218 4,159,906
5 Thai Bhat (THB) 51,390 3.27 167,788 167,788 149,799
6 Swiss Franc (CHF) 10,030 109.55 1,098,736 1,098,736 12,056,863
7 Australian Dollar (AUD) 123,785 81.27 10,059,403 10,059,403 1,027,327
8 Canadian Dollor(CAD) 28,700 83.46 2,395,302 2,395,302 2,248,995
9 Singapur Dollor (SGD) 6,202 80.51 499,323 499,323 206,671
10 Japanese Yen (JPY) 13,285,508 0.98 12,953,371 12,953,371 2,948,546
11 Hongkong Dollor (HKD) 7,253 13.93 101,039 101,039 88,484
12 Denish Kroner (DKK) 66,320 17.15 1,137,049 1,137,049 369,576
13 Swedish Kroner (SEK) - 12.34 - - -
14 Saudi Arabian Riyal (SRL) 333,300 29.30 9,764,024 9,764,024 11,593,214
15 Qatar Riyal (QAR) 5,901 165.17 974,612 974,612 384,715
16 United Arab Emirates (AED) 64,276 29.86 1,919,295 1,919,295 1,713,171
17 Malasiyan Ringgit (MYR) 48,679 27.08 1,317,984 1,317,984 4,414,500
18 Korean WON 5,230 8.97 46,887 46,887 74,000
19 Chinese Yuan (CNY) 198,944 16.11 3,204,990 3,204,990 649,847
20 (BHD) 105 289.93 30,435 30,435 71,593
21 KWD 6,612 362.07 2,394,108 2,394,108 2,704,632
Total Open Position (a) 327,180,408 371,173,067
Fixed Percentage (b) 5% 5%
Capital Charge for Market Risk [c=(a×b)] 16,359,020 18,558,653
Risk Weight (reciprocal of capital requirement of 10%) in times (d) 10 10
Equivalent Risk Weight Exposure [e=(c×d)] 163,590,204 185,586,533
Risk Weighted Exposure For Market RiskFor the year ended 32 Asar 2075 (July 16, 2018)
S.No. Currency ExchangeRate
Open Position(NPR)
Open Position(FCY)
RelevantOpen Position
RelevantOpen PositionPrevious Year
891 7 T H A N N U A L R E P O R T
Principal Indicators
Indicators FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
1. Net Profit/Gross Income Percent (33.23) 53.79 44.26 47.78 25.692. Earnings Per Share NPR (15.24) 31.73 26.75 27.17 12.583. Market Value Per Share NPR 207 348 415 406 1874. Price Earning Ratio Ratio (0.07) 10.97 15.51 14.94 14.875. Dividend (including bonus) - - - - -
on Share Capital Percent6. Cash Dividend on Share Capital Percent - - - - -7. Interest Income/ Percent 13.58 9.48 7.45 8.86 10.46
Loans and Advances8. Staff Expenses/ Percent 43.21 47.86 50.95 49.92 60.25
Total Operating Expenses9. Interest Expenses/ Percent 5.73 3.02 2.66 3.64 5.58
Total Deposits and Borrowings10. Exchange Gain/Total Income Percent 3.66 4.70 6.08 5.70 9.0611. Staff Bonus/Total Staff Expenses Percent - 28.39 22.93 28.17 11.1312. Net Profit /Loan and Advances Percent (2.22) 3.43 2.32 2.58 1.2313. Net Profit /Total Assets Ratio (1.44) 2.19 1.64 1.76 0.8614. Total Credit/Deposits Percent 69.23 70.43 79.11 76.19 81.0415. Total Operating Expenses/ Percent 2.98 2.22 2.01 1.79 1.99
Total Assets16. Capital Adequacy
(On Risk Weighted Assets)a.Core Capital Percent 7.65 9.44 10.62 9.45 10.82b. Supplementary Capital Percent 1.03 1.17 1.67 1.73 1.04c. Total Capital Fund Percent 8.68 10.61 12.29 11.18 11.86
17. Liquidity (CRR) Percent 19.27 15.69 12.13 12.13 6.8318. Gross Non-Performing Credit/ Ratio 24.29 7.33 8.83 4.55 3.98
Total Credit19. Weighted Average Percent 4.46 4.84 5.09 5.09 4.72
Interest Rate Spread20. Book Net Worth NPR'000 1,134,086 3,693,711 6,433,842 8,284,287 12,570,24621. Number of Shares Number 20,000,000 32,088,852 58,814,022 58,814,022 82,339,48522. Number of Staff Number 580 1083 1334 1444 167723. Return on Equity Percent (26.88) 27.57 17.00 19.29 7.6924. Book Value Per share NPR 56.70 115.11 109.39 140.86 152.6625. CCD Ratio (Credit/(Deposits Ratio 65.83 66.45 73.64 71.28 68.91
+Core Capital)26. Net Liquid Asset Ratio Ratio 39.04 34.21 34.29 30.25 29.3027. Base Rate Percent 8.67 7.63 6.31 10.51 10.62
Mr. Devi Prasad BhattachanChairman
Mr. Puspa Bahadur PradhanDirector
Mrs. Anju AdhikariDirector
Mr. Ramesh Singh KhadkaDirector
Mrs. Ambika Sharma LamichhaneDirector
Mr. Shankar KalikotaDirector
Mr. Amit BhandariCompany Secretary
Board of Director Management Team
Mr. Ashok ShrechanChief Executive Officer
Mr. Mani Ram PokhrelChief Business Officer
Mr. Bamdev DahalChief Project Officer
Mr. Dinesh ThakaliChief Operating Officer
Mr. Niraj LamsalChief Credit Officer
Mr. Ashok KhadkiChief Marketing Officer
