annual report 2019 nmb final · portfolio during the review period, the composition of current...

ContentsChairman’s Statement ....................................................................................................................................................................................................................... 3

Directors Report ................................................................................................................................................................................................................................................. 5

CEO’s Message ...................................................................................................................................................................................................................................................... 25

Financial Graphs ............................................................................................................................................................................................................................................. 27

Annual Financial Statements FY 2018-19

NMB Bank Ltd. ....................................................................................................................................................................................................................................................... 33


OM Development Bank Ltd................................................................................................................................................................................................. 153

Notice about 24th Annual General Meeting ............................................................................................................................ 254

NMB Annual Report-2018/19 3

Chairman’s StatementOn behalf of the Board of Directors, I take this opportunity to express my sincere gratitude and warm welcome to all the respected shareholders, invitees, offi cials, media personnel, ladies and gentlemen to the 24th Annual General Meeting of NMB Bank Limited. I am extremely delighted to welcome everyone here to this gathering of shareholders ast er the successful merger of Om Development Bank Ltd. with NMB Bank Ltd.

It is well-known that NMB Bank, with the intention of strengthening its existing capital base and market coverage completed the merger with Om Development Bank Ltd. that had a strong presence in Gandaki Province and Province 3. The unifi ed banking operation commenced from September 28, 2019. Ast er the merger, the Bank’s paid-capital, deposits, loans and advances, and reserve fund reached NPR 11.53 Billion, NPR 123.57 Billion, NPR 115.29 Billion and NPR 9.5 Billion respectively while its branches network and extension counters have reached 163 and 5 respectively as of Mid October 2019. This historic merger was the result of hard-work and contribution of the directors, shareholders, and staff of both NMB Bank and erstwhile Om Development Bank, along with the persistent support of regulatory bodies. With their patronage, advice, suggestions, and prompt decisions, we have succeeded in reaching this stage today. Therefore, on behalf of the Board of Directors, I as the Chairman of NMB Bank Ltd. wish to extend heartfelt thanks to all who have been instrumental in orchestrating the successful merger.

The liquidity crisis prevailing in the overall banking sector did not worsen as anticipated during the review period. The management of deposit and loan interest rates remained challenging due to the higher proportion of investments as compared to savings along with the fl uctuations in liquidity from time to time. Although the investment sector did not grow as expected due to slow growth in domestic industries, trade and productive sectors; the growth in remittance infl ows, increase in agricultural production, ease of supply of energy, rapid development of construction works, expansion of industrial production, and increase in tourist arrivals created a positive impact.

Despite the challenges, the Bank has managed to scale up its business and achieve good fi nancial results during the review period. During the review year, the Bank’s deposits increased to NPR 98.52 Billion while loans and advances grew to NPR 91.89 Billion i.e. a growth of 16.58% in deposits and 21.47% in loans and advances as compared to previous year. The Bank has been able to record net profi t of NPR 2.26 Billion during the review year, a growth of 21.77% compared to the previous year. This profi t was earned when the Bank’s paid-up capital was only NPR 9.62 Billion.

The agenda to distribute 21% bonus share and 14% cash dividend to the listed shareholders ast er merger from the reserve fund and distributable profi t of the fi scal year 2018/19 is placed for approval in the Annual General Meeting. The distributable profi t of former Om Development Bank amounting NPR 548.9 Million ast er regulatory adjustments as on Mid July 2019 and share swap surplus of NPR 603.6 Million has been accounted in the reserve fund of the Bank as on merger date.

NMB Bank has always been at the forefront in accommodating the changes in the fi nancial markets. The Bank has been involved in various activities with the aim of improving the fi nancial condition of the country by exploring potential opportunities in the fi nancial sectors in cooperation with the domestic and international organizations. Further, the Bank has also been undertaking initiatives to enhance the capacity of its employees.

The Bank has expanded its investment in industrial and agricultural sector that contributes towards employment generation in the country to remain in line with the strategy of increasing credit investment in the productive sector. The Bank has been off ering Women Entrepreneurship Loan with an objective of empowering women interested to operate own business and be self-reliant. Likewise, the Bank has also been providing various loan facilities targeted at youths returning from foreign employment as part of government’s self-employment campaign. The Bank has given priority to expanding loan investments in small and medium enterprises to be in solidarity with the

www.nmbbanknepal.com4

Nepal Government’s policy of focusing on helping local entrepreneurs, while keeping the economic prosperity of the local communities. With the plan to expand our investment in the priority sectors and support the overall development of the country, the Bank continues to work on products to help raise the economic standard of the marginalized people.

The Bank has achieved the goals pursuant to its vision 2020 and is continuously putting eff ort in moving ahead keeping in line with its 5-year strategic plan for achieving sustainable business expansion and profi tability. We assure our commitment in achieving the goals and be one of the best banks of Nepal.

The Bank has board representations from competent and strong institution like Employees Provident Fund, Nepal and international partnership with Netherland’s government supported Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. (FMO). We are grateful to FMO for their technical assistance and enhancement of capacity development.

On behalf of the Board of Directors, I would like to thank Mr. Hari Babu Neupane, Director representing public shareholders from 15 February 2016 to 13 March 2019 for his invaluable contribution and guidance. I also take this opportunity to welcome Ms. Sunity Shrestha (Hada) and Mr. Ravi Shankar Sainju to the NMB Board. My sincere appreciation to the respected shareholders, regulatory bodies, media, customers, Board of Directors and staff of the Bank for their invaluable support and confi dence.

Thank you.

Pawan Kumar GolyanChairmanDate: 9 January, 2020


Directors ReportRespected Shareholders,

On behalf of the Board of Directors, I extend my warm welcome and greetings to all the shareholders, representatives of various regulatory authorities, representatives of diff erent institutions, and all other stakeholders for your honorable presence in the 24th Annual General meeting of NMB Bank Limited.

Trust that you have already received the Annual Report post-merger of NMB Bank Ltd. and Om Development Bank Ltd. including separate Statement of Financial Positions, Statement of Comprehensive Income and Statement of Cash Flow of both merged entities for the FY 2018/19. I now, with the permission of this revered Annual General Meeting, would like to present the directors report pursuant to the Company Act, 2006, Clause 109 (4), comprising of the Bank’s fi nancial progress, summary of the country’s economy, challenges faced by the banking industry, and the achievements of the Bank during the review period.

1. Key Financial Performance for the Fiscal Year 2018/19

Deposit Collection: During the fi scal year, the Bank’s deposit grew by 16.58% from NPR 84.51 Billion to NPR 98.52 Billion in which the share of institution deposit remained at 39.59%. Of the Bank’s total deposit portfolio during the review period, the composition of current deposit, fi xed deposit, saving deposit, call deposit, and other deposit remained at 5.85%, 50.15%, 28.62%, 9.83%, and 5.55% respectively. The Bank has managed to mobilize institution deposit within the threshold as prescribed by Nepal Rastra Bank.

Loans and Advances: During the fi scal year, the Bank grew its risk assets portfolio from NPR 75.65 Billion to NPR 91.89 Billion thereby managing a growth of 21.47% as compared to FY 2017/18. During the review period, the composition of loans remained as: Real Estate: 3.56%, Home Loan: 10.00%, Margin

Lending: 0.32%, Term Loan: 23.75%, Overdrast Loan: 6.45%, Trust Receipt/Import Loan: 4.51%, Demand and Working Capital Loan: 19.95%, Hire Purchase Loan: 4.55% and Other Loans: 26.91%. Of the Bank’s total loan investment, exposures in Hydropower and Renewable Energy, Agriculture, Small and Medium Enterprises, and Tourism sectors remained at 20.38%, 11.25%, 6.55%, and 3.89% respectively. The share of risk assets portfolio in productive sector during the review period remained at 42.08%. The Bank shall continue to increase credit investment in productive sector in the future as well.

Investment: The Bank increased its investment by 8.85% to take its total investment portfolio of NPR 10.02 Billion in the previous year to NPR 10.91 Billion during the fi scal year 2018/19. Out of total investment, the Bank invested NPR 870 Million in organizations’ shares, NPR 9.38 Billion in Nepal Government Bonds and Treasury Bills, and NPR 650 Million in Bonds of Foreign Banks.

Operating Expense: During the fi scal year 2018/19, Other Operating Expenses reached NPR 885.5 Million i.e. an increment of 20.13% from NPR 737.1 Million in the previous fi scal year. The staff expense (excluding bonus) during the review period increased by 43.25% from NPR 736.4 Million to NPR 1.06 Billion. The increase in operating expense however, remained within the pre-approved budget.

Income: The Total Operating Income of the Bank increased by 39.41% i.e. from NPR 4.10 Billion in the previous fi scal year to NPR 5.72 Billion in the review year. During the review period, the Net Income increased from NPR 1.85 Billion to NPR 2.26 Billion. The fi scal year 2018/19 characterized by the Net Income growth of 21.77% witnessed an increase of 26.96% in the Interest Income whereby the Bank earned NPR 11.08 Billion as compared to NPR 8.73 Billion in the last fi scal year. Likewise, the Fees and Commission earned from domestic and foreign


trade transaction increased by 26.35% compared to previous fi scal year and stood at NPR 1 Billion. Foreign Exchange Income increased by 43.56% and reached NPR 440.1 Million. The increase was possible due to the Bank’s investment in new sector and services.

Capital Fund, Credit Deposit, Base Rate and Liquidity Ratio: The Bank maintained a sound Capital Fund during the fi scal year, as a result of which the capital adequacy ratio remained at 15.43%; above the stipulated requirement of at least 11% by NRB. Likewise, the Credit Deposit ratio was effi ciently managed and remained at 76.88%. Liquidity ratio also remained within the prescribed limit and stood at 28.28%. Base rate of the Bank at the end of review period was 9.86%.

Non-Performing Asset: Due to the management’s special eff orts and attention towards bad debt recovery, the Bank was able to reduce NPA to 0.82% at the end of the review period from 0.88% in the last fi nancial year.

Debentures: The Debentures of NPR 500 million with interest rate of 7% p.a. issued by the Bank in fi scal year 2014/15 will mature on August 21, 2020. Likewise, the debenture of 10% p.a. interest rate has maturity on April 12, 2029. The Bank sets aside fund in Debenture Redemption Fund each year to pay the Debentures in which NPR 400 Million has been collected till date.

The Bank’s key fi nancial performance during the review period: (fi gures in thousand)

SN Particulars Fiscal Year 2018/19

Fiscal Year 2017/18

Incremental Volume

Percentage change (%)

1 Total Deposit 98,516,667 84,507,136 14,009,531 16.58

2 Total Loans and Advances 91,886,955 75,645,917 16,241,038 21.47

3 Total Investment (Including Subsdiaries) 10,905,293 10,018,719 886,574 8.85

4 Net Interest Income 4,244,021 2,904,014 1,340,007 46.14

5 Commission and Discount and Other Operating Income 1,471,919 1,196,110 275,889 23.07

6 Foreign Exchange Income 440,062 306,532 133,530 43.56

7 Gross Operating Income 5,716,020 4,100,124 1,615,896 39.41

8 Gross Operating Expenses 885,455 737,089 148,366 20.13

9 Gross Profi t 3,414,276 2,346,669 1,067,607 45.49

10 Net Profi t 2,257,276 1,853,793 403,483 21.77

11 Paid Up Capital 9,618,163 7,603,291 2,014,872 26.50

12 Capital Adequacy Ratio (%) 15.43 15.75 -0.32 -2.05

Bank’s Jurisdiction and Branch Network: The Bank during the review period provided banking facilities and services to its customers through 110 branches, 4 extension counters and 103 ATMs across the country which ast er the merger increased to 163 branch offi ces, 5 extension counters, and 129 ATMs. The number of branches located in each province are as follows:

Province 1 : 24 branches Province 2 : 17 branches Province 3 : 44 branches Gandaki Province : 39 branches Province 5 : 29 branches Karnali Province : 03 branches Sudur Paschim Province : 07 branches


In order to provide banking facilities at the doorstep of the people living in remote areas of the country, the Bank has been providing branchless banking services in Rasuwa, Dolakha, Udayapur, Jhapa, Taplejung, Ramechap, Morang, Kapilvastu, Sunsari, Nawalparasi, Bhaktapur, Kaski and Illam. The Bank intends to expand its branchless banking facilities in other remote area in future as well.

The Bank has entered into an agreement with various foreign banks and remittance companies to transfer the money of migrant workers to Nepal through its banking channel. The remittance transactions are still carried out through our banking channel based on such agreements in the past years with the banks and remittance companies of India, Dubai, Malaysia, etc. allowing the Bank to form the basis of foreign currency deposits. The Bank is also reviewing the potential to expand remittance services in other countries.

Representative Offi ce outside Nepal and its progress:

The Representative offi ce established at Lebuh Pasarbesar in Kualalumpur, Malaysia has been assisting as a point of contact for expansion of trade and remittance business. With this establishment, the Representative offi ce has helped to foster the growth of trade business between two countries and communicate the information on Nepalese economy and available fi nancial services to Nepalese people in Malaysia. This offi ce has been playing pivotal role to connect and garner the relationships with the Malaysian corporates and business houses and enhance trade businesses with other foreign establishments.

2. Impact of Domestic and World Economic Outlook On Bank’s Performance

Financial Status Review

• Where the world economy in 2018 grew at 3.6 percent, the International Monetary Fund (IMF) projects it to grow by only 3.2 percent in 2019

• In 2018, the economies of developed countries grew by 2.2 percent, and the economies of emerging and developing countries grew by 4.5 percent. The IMF, for 2019 has projected a slow growth in economies of developed countries, and emerging and developing countries by 1.9 percent and 4.1 percent respectively.

• China and India achieved an economic growth rate of 6.6 percent and 6.8 percent respectively, while in 2019 it is projected to grow by 6.2 percent and 7.0 percent respectively.

• International Monetary Fund projects the consumer price infl ation of developed, and emerging and developing economies to remain at 1.6 percent and 4.8 percent respectively in 2019. The consumer price infl ation in 2018 was 2.0 percent in advance economies, and 4.8 percent in emerging and developing economies.

• Economic growth has gained momentum since 2016/17. The Central Bureau of Statistics preliminarily estimates country’s economic growth of 7.1 percent in FY 2018/19. The economic growth is due to increase in agricultural production, ease of energy supply, intensifi cation of construction works, expansion of industrial production, and increase in tourist arrivals.


• In the FY 2018/19, the ratio of Gross Domestic Savings to Gross Domestic Product (GDP) is estimated to have reached 20.5 percent while Gross National Savings to GDP is estimated to be at 52.4 percent.

• During the review period, the ratio of Gross Fixed Capital formation to GDP is estimated to have reached 36.9 percent. Such proportion of Gross Capital Formation is estimated to be 62.3 percent.

• Due to higher demand for investment than savings, the ratio of resource gap to GDP is expected to have remained 9.9 percent during the review year.

• Average consumer price infl ation that stood at 4.2 percent in 2017/18 increased to 4.5 percent during eleven months of 2018/19.

• According to preliminary Statement of Receipts and Payments released by the Financial Comptroller General Offi ce, the government made Recurrent Expenditure of NPR 714.98 Billion, Capital Expenditure of NPR 238.36 Billion, and Financial Management Expenditure of NPR 141.24 Billion. The government during the period mobilized the revenue of NPR 859.60 Billion.

• In the year 2018/19, the government mobilized gross domestic debt of NPR 96.38 Billion and made a repayment of NPR 34.31 Billion. Accordingly, the net domestic debt of the government stood at NPR 62.07 Billion during the period, which is 1.8 percent of the GDP.

• Current account defi cit amounted to NPR 248.72 Billion in eleven months of 2017/18. An escalation in import compared to export raised the trade defi cit by 17.2 percent than previous year to NPR 1,211.96 Billion.

• In the eleven months of the review period, workers’ remittances increased 17.5 percent with an infl ow of NPR 799.02 Billion. A modest growth in remittance infl ow coupled with mounting trade defi cit has resulted in an upsurge of current account defi cit. The overall balance of payments defi cit in eleven months of 2018/19 stood at NPR 90.83 Billion.

• Considering the imports of eleven months of the review period, the banking sector has suffi cient foreign exchange reserve to sustain the prospective import of goods for 8.8 months and import of goods and services for 7.7 months.

• Nepalese currency vis-à-vis the US dollar depreciated by 0.02 percent as of Mid-July 2019 compared to Mid-July 2018. The buying rate per US dollar stood at NPR 109.36 as on fi scal year 2018/19 end that was NPR 109.34 during FY 2017/18.

(Source: Monetary Policy for 2019/20, NRB)

Despite the decline in the growth of global economy, the projection of economic growth of neighboring China and India has been positive. International trade in the region appears to be impacted as taxes and other disputes between major economies continue to prevail. Although decrease in market capitalization growth in the securities market, foreign exchange reserve and the investment fund have created challenges in the banking sector, the increase in agricultural production, ease of supply of energy, intensifi cation of construction works, expansion of industrial production, and increase in tourist arrivals as indicated by Monetary Policy for higher economic growth are likely to create positive impact to the overall banking sector.


3. The Board of Directors’ opinion on the achievements of current fi scal year and future plans:

Following are the main fi nancial highlights of the Bank as on Mid October 2019 for the running fi scal year:

SN Particulars NPR (in Thousand)

1 Total Deposit 123,565,057

2 Total Loan and Advances 115,297,262

3 Total Investment (Including Subsidiaries) 12,653,290

4 Net Interest Income 1,223,654

5 Commission, Discount and other Operating Income 379,839

6 Income from Foreign Exchange Transaction 136,624

7 Net Operating Income 1,603,493

8 Total Operating Expenses 635,427

9 Total Operating Income (Before Impairment) 1,603,493

10 Net Profi t 815,136

11 Paid Up Capital 11,529,742

12 Reserves and Funds 9,500,421

13 Capital Adequacy Ratio 15.81%

Future Plans:

The Bank will continue to seek a balanced growth of deposit and loan investments remaining in line with its strategy. With continuous improvisations in quality of the loans, the Bank will focus on increasing the size of credit investments in Agricultural, Retail, and Small and Medium Enterprises (SME) sectors. Likewise, various loan facilities off ered by the Bank targeted at youths returning from foreign employment will be made more eff ective so they could utilize their skills for the economic prosperity of the nation. The Bank will specially focus on increasing lending to productive sectors for which expansion of its branch networks in potential business areas will be given a priority.

Existing technologies will be improved and updated as required to make the Bank technically effi cient for providing eff ective and accurate banking services to the customers. The Bank plans further investment in technology to minimize risks and provide maximum convenience to its customers.

Additional resources and authorities will be delegated to provincial offi ces to ensure its eff ective functioning.

The bond issuing process has been initiated with an objective of capital formation to expand business, which will be completed within the stipulated timeframe as per the Directive issued to Banks and Financial Institutions by Nepal Rastra Bank.

The Bank will intensify its eff ort to appoint remittance agents in diff erent countries and depute dedicated staff for monitoring and increasing remittance transactions through its channel by entering into agreements with remittance service providers.

The Bank will pay special attention to increase the business size of the subsidiary companies. The process of issuing mutual funds with new investment plans will be accelerated for achieving its business growth.


The Bank will continue to contribute towards uplist ment of community and protection of environment, and support country’s commitments towards sustainable development goals as part of its corporate social responsibilities.

4. Industrial and Professional Relations:

On the foundation of transparency and professionalism, the Bank has developed an amiable and professional relationships with all its stakeholders. The Bank fi rmly believes that such relationships will be pivotal for its sustainable future growth and success.

5. Changes in the Board of Directors:

In the review year, Director Hari Babu Neupane resigned from the Board of Directors and his resignation was approved on 13 March 2019. Other than that no changes were made in the Board of Directors during the review period. However, in the running fi scal year, Mr. Rabi Krishna Sainju and Ms. Sunity Shrestha (Hada) were elected to fi ll the vacant directorial positions from public shareholders category.

6. Signifi cant Issues Aff ecting Business:

The major risks and challenges that holds the potential to signifi cantly impact the bank in future are detailed as below:

• Risks inherent in the credit investments and non-funding based services provided by the Bank

• The volatility in liquidity situation has brought challenges in the management of interest rates of both deposits and loans.

• Risk of increased competition and lack of skilled human resources.

• Possible foreign exchange risks in foreign currency deals arising from fl uctuations in exchange rates.

• The risks arising from the country’s political and other external reasons that has impact on imports and exports resulting in non-payment of loans and interest.

• Possible risk of the fi xed interest rate in foreign loan that can be higher than the prevailing interest rate in the market due to fl uctuations in interest rate, and possible risk of burden in repayment of loan in foreign currency due to exchange rate fl uctuations.

• Possible risks resulting from changes in economic, monetary and fi nancial policies of the nation.

• Risks resulting from the sluggishness of the international economic and fi nancial sectors that could have a ripple eff ect on the Nepalese market.

• The likely impact on the source of income due to lack of alternative investment avenues and contraction in the domestic market.

• A lack of proper database and advance technology in the country to prevent money laundering.

7. Signifi cant Observation in the Audit Report and Subsequent Response from the Board:

There is no observation mentioned in the Audit Report that could signifi cantly aff ect the Bank’s business.


8. Recommended Amount for Dividend Payment:

With the approval of Nepal Rastra Bank, the Bank has proposed the agenda in the Annual General Meeting with recommendation for distributing 35% Dividend (21% Stock Dividend amounting NPR 2,421,245,759 and 14% Cash Dividend amounting NPR 1,614,163,839.11 - including Tax) on the Paid Up Capital of the Bank ast er merger to be distributed from the distributable profi t of NMB Bank as on Mid July 2019 to all the shareholders maintained on the date of book closure. The profi ts of the merging entity Om Development Bank have been accounted in the Reserve Fund.

9. Details of Shares Forfeited by the Bank:

No shares were forfeited during the review year.

10. Performance of the Company and its Subsidiaries, and Review of the Existing Status:

The performance progress of the Bank is mentioned in the fi rst section whereas the performance of its subsidiaries- namely NMB Capital and NMB Micro Finance are mentioned in section 25(b) of the Director’s report

11. Major Changes made by the Company and its Subsidiaries Resulting to Signifi cant Changes in the Company’s Business:

NMB Capital Ltd., a 100% subsidiary of NMB, has been acting as Share Registrar of the Bank, for the service of which the subsidiary company was paid NPR 762 Thousands in the review period. At the end of the review year, the bank account of NMB Capital Ltd. maintained at this bank had deposit of NPR 140.10 Million. NMB Capital was paid interest of NPR 2.14 Million by the Bank in the fi scal year 2018/19.

An employee of the Bank has been appointed as the Chief Executive Offi cer of the subsidiary NMB Capital Ltd. The Bank received NPR 2.17 Million as building rent and NPR 2.4 Million as administrative and other services fee as per the agreement from NMB Capital.

12. Information provided by the Basic Shareholders to the Bank:

During the review period, no information was received other than the regular information to be provided as per the prevailing law.


13. Details of Share Ownership of the Directors and Offi cials and the Information Received by the Company in relation to their share transactions during the review period:

In the review fi scal year, none of the directors and offi cials have been involved in the company’s stock trading. The details of their share ownership are listed below:

S.N. Name Designation Share Ownership

1. Mr. Pawan Kumar Golyan Chairman 1,103,054

2. Mr. Nico Klass Gerardus Pijl (representative from FMO, Netherlands) Director -

3. Mr. Rajendra Kafl e (representative from Employees Provident Fund) Director -

4. Mr. Harischandra Subedi Director 1,858

5. Mr. Pradeep Raj Pandey Independent Director -

6. Mr. Nand Kishore Rathi (Alternate Director to Mr. Nico Klaas Gerardus Pijl) Alternate Director 2,010,983

7. Sunil K.C. Chief Executive Offi cer 1,651

8. Pradeep Pradhan Chief Operating Offi cer 22,165

9. Shabnam Limbu Joshi Chief Business and Support Offi cer -

10. Sharad Tegi Tuladhar Chief Risk Offi cer -

11. Govind Ghimire Chief Business Offi cer -

12. Sudesh Upadhyaya Chief Business Offi cer 3,795

13. Pramod Kumar Dahal Company Secretary and Chief Legal, Compliance and AML Offi cer 264

14. Navin Manandhar Chief Business Offi cer -

15. Roshan Regmi Head Operations -

14. Information on the Directors relatives’ involvement in the Bank’s contracts:

Disclosure not required as there was no such agreement.

15. If the Bank has purchased its own shares, mention the reason for such purchase, number of purchased shares and amount paid by the Bank:

None.

16. Internal control system:

With utmost priority from the Board of Directors to safeguard the interest of the creditors, the internal control system of the Bank and its functioning have been made more eff ective to ensure sound and safe operation by formulating necessary rules, policies and procedures for inherent and potential risk management. Abiding by the prevailing law and directive issued by Nepal Rastra Bank, four committees viz. Audit Committee, Risk Management Committee, Assets Laundering Prevention Committee, and Human Resources Service Committee have been formulated by the Board of


Directors. These committees discusses various risks in detail and updates the same to the Board of Directors. For eff ective risk management and prevention, various activities are being carried out at the management level of the Bank by its Management Team Committee, Credit Risk Committee, Assets Liability Committee, Human Resources Recruitment Committee, Information Technology Committee, and Corporate Governance Committee.

In addition, the Risk Management Department of the Bank, has independently undertaken the task of eff ectively controlling and managing the risk along with the periodic review of the actions taken in the area of risk control. The department has signifi cantly contributed to maintain the institutional governance at the Bank through meticulous monitoring of the activities to ensure full compliance of the prevailing law and directives issued by Nepal Rastra Bank.

Eff ective internal controls are the foundation of safe and sound banking therefore NMB Bank Ltd. has designed and enforced system of operational and fi nancial internal control that safeguards bank’s resources, produce reliable fi nancial reports and comply with rules and regulations of the country. Eff ective internal control also reduces errors/irregularities with timely reviews and mitigations. The business strategies and the important policies as approved by the Board of Directors have been adopted by the senior management for risk management activities. The Bank has also been strengthening its internal control system by providing various types of trainings to its employees to eff ectively manage risks.

Risk Management:

For agile performance through proper risk management, the Bank has prepared and implemented a robust risk management framework for identifi cation, measurement, monitoring, management, control and reporting of the potential risks that the organization has to face. The Board of

Directors also annually reviews the approved and implemented Risk Management Framework to deal with underlying risks of special importance to the Bank.

The Board of Directors has also been identifying the risk appetite for the Bank and the extent to which it wants to bear the risk to determine the overall risk strategy. The Baord has eff ectively managed the risks by categorizing them into assets risk, operational risk, liquidity risk, market risk, interest rate risk, foreign exchange risk, and other risks. In addition to the management level committee, following committees have also been constituted at the Board level for risk management and eff ective internal control system of the Bank.

Committees formed at the level of Board of Directors

Audit Committee Details related to it are mentioned in section 18 of this Director’s report

Risk Management Committee:

A risk management committee under the coordination of a Non-Executive Director have been set up at the Bank. The coordinator of the Audit Committee has been appointed as a member of the Risk Management Committee where Head of Compliance Department and Chief Information Offi cer are the members and Head of Risk Management Department is the Principal Member Secretary. The committee regularly assemble for the meeting to discuss on the risks identifi ed by the management level risk committee, the immediate implications on the Bank’s strategy including capital fund, liquidity position, credit to deposit ratio, risk appetite, etc. due to major changes in the directives issued by Nepal Rastra Bank and the changes in monetary policy. In each quarter, any potential risk in relation to the stress testing is discussed and the information is submitted to the Board of Directors for review. In the review year, the Risk Management Comittee held 19 meetings accounting total expenditure of NPR 440,000.


Human Resources (HR) Service Committee:

Under the coordination of one Non-Executive Director, HR Service Committee has been constituted. The committee also consists of the Chief Executive Offi cer, and the Chief Information Offi cer as members, and Chief Human Resources Offi cer as the Member Secretary. Bylaws on the service provision of the employees, policies related to the employees and succession planning, employees’ salary allowance and organizational structure are discussed in this committee. In the review year, the HR Service Comittee held 10 meetings accounting total expenditure of NPR 240,000.

Assets Laundering Prevention Committee:

Assets Laundering Prevention Committee has been constituted with a Non-Executive Director, a member from the Board, and Chief AML as Member Secretary. The Committee has made special eff orts to oversee and control the risks by ensuring that laws pertaining to money laundering and prevailing directive issued by Nepal Rastra Bank are fully complied.

17. Details of Total Management Expenditure of the last Fiscal Year:

During the review period, the employee expenses and offi ce operating expenses amounted NPR 1.94 Billion.

18. List of Audit Committee members, their remuneration, allowances and facilities, details of the work done by the Committee and the details of any suggestions made by the Committee:

Under the coordination of one Non-Executive Director, Audit Committee has been constituted with an additional Non-Executive Directorr and Head of Internal Audit Department as Principal Member Secretary as per the direction of Nepal Rastra Bank. Following are the Audit Committee members:Mr. Harischandra Subedi - CoordinatorMr. Nico Klaas Gerardus Pijl - MemberMr. Ranjan Pandey - Member Secretary

The Audit Committee has been performing its functions complying with the instructions by Nepal Rastra Bank. Each report received from the auditor is discussed and reviewed in the Audit Committee with necessary instructions for improvement. The Audit Committee discusses and reviews each report received by the Auditor to identify all the risk areas and ensures that the risks are addressed before a periodic submission of the report to the Board of Directors. The Board is regularly receving suggestions from the Audit Committee.

During the review year, the Audit Committee held 17 meetings to which its members excluding Member Secretary were remunerated an allowance of NPR 12,000 each per meeting. The total expenditure for the meeting amounted to NPR 396,000.

19. Details of any payments yet to be made to the Directors, Chairman, Chief Executive Offi cer, Basic Shareholders or their close relatives or their associated companies:

None

20. Details of remuneration to the Directors, Chief Executive Offi cer and Senior Management Staff :

Detailed in section 35 of additional disclosures.

21. Information of Undeclared Dividend by the shareholders:

Out of the total dividend distributed by the Bank upto 16 July 2019, NPR 5,128,793 remains unclaimed by the shareholders. Uncollected dividend of last fi scal year until Mid July 2019 amounting NPR 138,950,026.78 is with the share registrar NMB Capital Ltd. A notice to collect the dividends has been published in the newspaper and in the Bank’s website. The undeclared dividends of the shareholders before FY 2011/12 have been deposited in the Investor Protection Fund.


22. Details of Fixed Assets purchased/sold pursuant to Clause 141 of the Company Act 2006:

During the review period there was no purchase/sale of fi xed asset.

23. Details of the transactions with related companies pursuant to Clause 175 of Company Act 2006:

Detailed in section 11 of this report.

24. Any other information to be disclosed in the Director’s Report as per Company Act 2006 and prevailing law:

Required information has been provided in the relevant section of this annual report.

25. Other Essential Information:

(A) In relation to completion of merger

As decided by the Annual General Meeting to merge with other fi nancial institutions so as to develop the competitiveness and build a strong capital structure, the Bank successfully completed the merger with Om Development Bank Ltd. having stronghold in Gandaki province and started joint operation from 28th September 2019 in the name of NMB Bank. Through this merger, the capital structure base of the Bank strengthened while its access to general public also increased with increased network presence in Province 3 and Gandaki province. The merger also signifi cantly increased the business portfolio of the Bank.

(B) Subsidiary Companies and its Progress

NMB Capital Ltd.

NMB Capital Ltd.; established with a capital investment of NPR 200 Million is a wholly owned subsidiary company of the Bank. The company has been managing the process of issuing primary shares, further public off erings, and right shares of various companies along with other investment plans and portfolio management targeted towards general public as well as institutional clients.

In the fi scal year 2018/19, the net profi t of the company stood at NPR 52 million.

The key achievements of the subsidiary company in fi scal year 2018/19 are as follows:

i. NMB Capital Ltd. continued the services of issuance and sales manager, share registrar, guarantor and trustee during the review period.The company has established a strong infrastructure for providing shares dematerialization services to its customers.

ii. NMB Capital has been working as a fund manager and depository for Mutual Funds viz. ‘NMB Sulav Fund 1’ and ‘NMB Hybrid Fund L-1’ issued by NMB Bank Ltd. With approval from Securities Board of Nepal (SEBON), the company initiated the issuance of mutual funds from 3rd week of October.

iii. The company has received an approval from SEBON to provide institutional consulting services.


NMB Capital LimitedSTATEMENT OF FINANCIAL POSITION

As at 16 July 2019

16 July 2019 (NPR) 16 July 2018 (NPR)

Assets

Cash and Cash Equivalents 515,316,772.21 396,328,814.76

Investment Securities measured at Fair Value through P/L - -

Investment in Equity measured at Fair Value through OCI 11,000,000.00 11,000,000.00

Investment Securities measured at Amortized Cost 179,330,362.81 236,921,486.09

Other Financial Assets 22,647,325.74 25,443,281.13

Other Assets - -

Property & Equipment 13,170,943.64 13,714,772.84

Intangible Assets 965,607.60 488,701.60

Current Tax Assets 210,498.74 608,895.73

Deferred Tax Assets 4,124,439.53 2,172,844.31

Total Assets 746,765,950.27 686,678,796.46

Liabilities

Dues to Public 408,253,956.99 356,938,883.14

Other Financial Liabilities 29,767,579.95 36,962,761.71

Other Liabilities 14,784,347.23 17,038,603.71

Current Tax Liabilities - -

Deferred Tax Liabilities - -

Other Provisions 8,697,354.00 5,163,588.00

Total Liabilities 461,503,238.17 416,103,836.56

Equity

Share Capital 200,000,000.00 200,000,000.00

Retained Earnings 82,537,798.28 68,619,502.20

Other Reserves 2,724,913.83 1,955,457.70

Total Equity 285,262,712.10 270,574,959.90

Total Liabilities and Equity 746,765,950.27 686,678,796.46


NMB Capital LimitedSTATEMENT OF PROFIT OR LOSS

As at 16 July 2019

16 July 2019 (NPR) 16 July 2018 (NPR)

Income

Income from Merchant Banking Activities 25,479,619.89 36,371,046.98

Income from Mutual Fund operations 39,598,000.01 42,565,592.64

Interest Income 3,478,070.94 16,509,927.77

Other Income 50,045,221.81 40,412,404.36

Net gain/(loss) on fi nancial investments Held for Trading - -

Total Income 118,600,912.65 135,858,971.75

Expense

Personnel Expense 26,800,562.56 28,285,411.60

Interest Expense - -

Depreciation on Property and Equipment 3,865,552.41 3,421,950.29

Amortization of Intangible Assets 254,995.00 194,901.61

Other Operating Expenses 15,486,605.20 20,409,526.55

Total Expenses 46,407,715.17 52,311,790.05

Profi t Before Tax from Continuing Operations 72,193,197.48 83,547,181.70

Income Tax Expenses 21,657,959.24 20,472,939.27

Deferred Tax Expenses/(Income) 1,492,795.32 -

Profi t For the Year 52,028,033.56 63,074,242.43


NMB Laghubitta Bittya Sanstha Ltd.

NMB Laghubitta Bittya Sanstha Ltd is a subsidiary microfi nance company of NMB Bank. It has a paid-up capital of NPR 162 Million of which NMB Bank, other individual promoters, and general public have share ownerships of 51%, 19%, and 30% respectively. The head offi ce of the company is in Pokhara Metropolitan City Ward No 25, Milanchowk, Hemja, Kaski. It has 100 branches spread in 54 hilly districts of the country.

The microfi nance institution has been providing fi nancial services such as savings, loans, insurance to a large number of people living in remote mountainous and hilly regions of the country. The company in cooperation with various organizations have been encouraging and facilitating social works at the local level. The company as on 16 November 2019 had provided loan of NPR 3,3 Billion and mobilized deposit of NPR 1.2 Billion.

The highlights of NMB Microfi nance during the fi scal year 2018/19 are as follows:

i. The paid-up capital of the fi nancial institution as on 16th July 2019 is NPR 162 Million. As approved by the 6th Annual General Meeting, its issued and paid-up capital ast er issuance of 12% bonus share and 1:1.5 ratio right share will reach NPR 453.6 Million.

ii. The subsidiary company opened 16 branches during the fi scal year 2018/19 totaling its branches count to 100

iii. The company in partnership with Sakchyam- Access to Finance and AVSAR Project has been working to provide fi nancial services in remote areas with poor fi nancial access.

iv. The company has conducted various renewable energy promotion programs in collaboration with Winrock International and Arc Finance, fi nanced renewable energy loan to deprived communities for purchasing solar panels, and solar lights for households in partnership with various vendor companies under Renewable Energy Project, and provided renewable energy related trainings to employees and customers.


NMB Microfi nance Bittiya Sanstha LimitedBalance Sheet

As at 16 July 2019

FY 2018/19 (NPR) FY 2017/18 (NPR)

Capital & Liabilities

1. Share Capital 210,608,125 162,006,250

2. Reserve and Funds 95,577,936 86,693,563

3. Debentures and Bonds - -

4. Borrowings 1,960,240,209 1,682,081,898

5. Deposits 1,082,721,395 696,528,653

6. Proposed Dividend 2,557,993 1,112,171

7. Income Tax Liabilities 2,671,717 242,787

8. Other Liabilities 65,025,009 45,927,871

Total Liabilities 3,419,402,385 2,674,593,192

Assets

1. Cash Balance 130,155 16,451

2. Balance with Nepal Rastra Bank 16,030,000 24,230,000

3. Balance with Banks/Financial Institutions 284,303,949 447,869,961

4. Money at Call and Short Notice - -

5. Investments 2,000,000 2,000,000

6. Loans, Advances and Bills Purchased 3,077,263,360 2,167,490,812

7. Fixed Assets 25,806,730 21,177,981

8. Non-Banking Assets - -

9. Other Assets 13,868,191 11,807,986

Total Assets 3,419,402,385 2,674,593,192


NMB Microfi nance BittiyaSanstha LimitedProfi t and Loss Account

As at 16 July 2019

FY 2018/19 (NPR) FY 2017/18 (NPR)

Particulars

Interest Income 468,569,376 377,058,891

Interest Expenses 261,092,922 211,444,355

Net Interest Income 207,476,454 165,614,536

Commission ,Discount and other operating income 92,841,611 66,225,063

Exchange Fluctuation Income - -

Total Operating Income 300,318,066 231,839,598

Staff Expenses 136,286,290 106,105,546

Other Operating Expenses 59,582,692 46,946,473

Exchange Fluctuation Loss - -

Operating Profi t Before Provision for Possible Loss 104,449,084 78,787,580

Provision for Possible Losses 102,326,706 71,078,781

Operating Profi t 2,122,378 7,708,798

Non-operating Income/Loss 938,877 486,423

Loss Provision Written-Back 92,544,258 43,475,339

Profi t from Regular Operations 95,605,514 51,670,561

Profi t/Loss from extra-ordinary activities - -

Net Profi t a� er considering all activities 95,605,514 51,670,561

Staff Bonus Provision 9,560,551 4,697,324

Provision for Income Tax Provision 26,000,241 14,266,825

Current Year’s Tax Provision 27,671,717 15,253,262

Previous Year’s Tax Provision (44,941) -

Current Year Deferred Tax (Income)/Expenses (1,626,535) (986,437)

Net Profi t/Loss 60,044,721 32,706,412


(C) Corporate Social Responsibility

The Bank as part of its corporate social responsibility continued to support various social and environmental causes that would support the country’s commitment towards achieving UN’s sustainable development goals 2016-2030. The Bank during the review period organized Financial Literacy Programs in various places to aware the people on fi nancial services and support Nepal Government’s vision of fi nancial inclusion of all its citizens. The Bank inaugurated its joint operation ast er the merger of Om Development Bank Ltd. by donating NPR 200,000 as fi nancial support to Apangata Maitri Samaj-a disabled-friendly social organization based in Pokhara.

The Bank has fully supported Pukar Apanga Asakta Samaj (Pukar Disability Social Service) in constructing a residential building for housing diff erently-abled children in ward number 8, Kankai Municipality, Jhapa.

The Bank as in previous years reiterated its commitment towards cultural and historical heritage site preservation, and organized a nation-wide NMB Heritage Walkathon event to raise awareness and fund for the conservation and restoration of such heritage sites in the country. The Bank has spread the CSR activities across the country through its branches and state offi ces and even to the places where the Bank does not have physical presence.

The Bank on the occasion of its anniversary organized various social activities such as distribution of educational materials to poor students, operation of health camps, plantation, etc. across the country through its branch network. The Bank to support literacy in rural areas has been distributing useful books collected from staff , customers, and others.

(D) Human Resources:

The Bank considering the needs of committed and productive staff for the successful implementation of future plans and its overall growth has paid special attention to the development and management of its employees. The Bank believes that empowered employees are the source of happy customers and has made considerable investment in its staff capacity development and eff ective management through various internal and external training programs. During the review period, most of the employees received internal training while 382 employees received external training. 76 employees participated in trainings and seminars outside the country.

In the review year, the number of committed employees was 1120 that increased to 1523 ast er merger of which 623 are females and 900 are male employees. At present, there are 9 employees completing more than 15 years of service period, 136 employees with more than 10 years of service, and 339 employees having worked for more than 5 years in the Bank.

(E) Arrangements for Grievance Handling:

Mr. Sudesh Upadhyaya, Chief Business and Strategy Offi cer who is also a member of the Bank’s management team has been appointed as Grievance Handling Offi cer for hearing grievances of customers and the general public. Also, an online portal has been created on the Bank’s website for grievance handling. In the review year, the Bank received 423 complaints and grievances through its branch offi ces, head offi ce, hotline, and call center. All the grievances other than those related to loan recovery that follows legal procedures have been resolved in time.


(F) Board of Directors Meeting and Conduct:

The meeting of Board of Directors has been held regularly as per the existing acts and policies. During the review period, 27 board meetings were held to which the Chairman of the Board was remunerated NPR 13,000 and other board members were remunerated NPR 12,000 each per meeting.

All the Board offi cials have been complying the conducts mentioned in Section 6(1) of Unifi ed Directive 2075.

(G) Management Team:

Mr. Sunil KC has been leading the Bank and its Management Team as the Chief Executive Offi cer. With a banking experience of 28 years, he has been with NMB Bank for over a decade and was the deputy CEO before taking up his new role in the year 2017. Under his leadership during the review period, the Management Team consisted of the following staff members:

Pradeep Pradhan Chief Operating Offi cerShabnam Limbu Joshi Chief Business and Support Offi cerSharad Tegi Tuladhar Chief Risk Offi cerSudesh Upadhyaya Chief Business Offi cerGovind Ghimire Chief Business Offi cerNavin Manandhar Chief Business Offi cerPramod Dahal Company Secretary and Chief Legal, Compliance and AML Offi cerRoshan Regmi Head Operations

Acknowledgement:

On behalf of the Board of Directors, I would like to express my sincere gratitude to all esteemed shareholders, representatives from various regulatory bodies, stakeholders, customers, Management team and the entire staff for supporting the Bank to achieve remarkable fi nancial results and reach new milestones year ast er year.

Thank You.

Pawan Kumar GolyanChairmanDate: 9 January, 2020


FY 2018/19Annex-15 of Securities Registration and Issue Regulation, 2016

(Details related to clause 26.2)

1. Director’s Report: Director’s report is included in the annual report of FY 2018/19.

2. Auditor’s Report: Auditor’s report is included in the annual report of FY 2018/19.

3. Audited Financial Statements: Audited fi nancial statements are included in the annual report of FY 2018/19.

4. State of Legal Proceedings:

i) If any lawsuit has been fi led by or against the organization within the quarterly period: 45 lawsuits related to debt collection and banking property were being reviewed in various courts during the

last fi nancial year,

ii) If any lawsuit was fi led by or against the founder or director of the organization for disobeying the prevailing rules or committing a criminal off ense:

Not in the information of this Bank.

iii) If any lawsuit has been fi le against founder or director for fi nancial off ence: Not in the information of this Bank.

5. Analysis of organization’s share transactions and progress:

i) Management’s perception regarding the trading of organization’s shares in the securities market: The fl uctuations in share trading are determined by the open market and are in line with the values and

norms of the same

ii) The maximum, minimum and fi nal value of the Bank’s shares in each quarter of the previous fi nancial year as well as the total number and days of transactions.

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Maximum Value 380 398 364 400

Minimum Value 303 315 300 356

Last Value 377 392 356 396

Number of Transactions 9,347 10,049 7,514 6,250

Days of Transactions 62 60 60 23


6. Problems and Challenges:

i) Internal Problems and Challenges: Problems in the management of deposits and loan interest rates due to fl uctuations in liquidity, lack of skilled human resources in the banking sector, the challenge of managing operating risks along with an increase in transactions are considered as internal problems and challenges by the Bank.

ii) External Problems and Challenges: Continuing disputes including taxation among countries with larger economies aff ecting international trade in the region, lack of investment in alternative sectors for expansion of business as compared to capital growth, imbalance in demand for credit and deposit growth, increasing unhealthy competition in banking sector are taken as external problems and challenges by the Bank.

iii) Strategies Adopted by Management: Deposits and credit investments are gradually increased as per Bank’s strategy. The Bank is focused to increase retail loan, agriculture loan, and small and micro-enterprise loan whereas continuously improving the quality of its risk assets portfolio. In addition, the Bank has paid special attention to increasing investment in the productive sector of the country for which priority shall be given to branches expansion in places with high business potential. The Bank has placed emphasis on new areas of income generation and mobilization of deposits, management of passive debts and diversifying risk assets, and use of Finacle Core Banking Sost ware to make the core banking system timely and relevant. The Bank also has made various eff ective training arrangements to make its skilled human resources more robust and effi cient.

7. Corporate Governance

Details on the steps taken by the management of the Bank for the promotion of corporate governance:

i) The policies adopted by the Board of Directors have been implemented.

ii) Various committees formed at the management level (such as Assets and Liability Committee, Human Resources Recruitment Committee, Debt-Risk Management Committee, Corporate Governance Committee, etc.) are active.

iii) In order to organize internal control mechanism, the Audit Committee has been meeting regularly to review and implement the suggestions given by the internal auditors in the regular audit report.

iv) The Risk Management Committee has been meeting regularly to discuss the issues such as stress testing, adequacy of policies and rules, operational risk, etc. and following the instructions received for management.

v) Discussions are being held from time to time by the Assets Laundering Prevention Committee emphasizing on customer identifi cation process and issues related to this area.

vi) Various internal policies, rules and guidelines have been formulated and implemented to manage banking transactions and minimize operational risks.

vii) Full compliance of the directives and guidelines on good governance issued by the regulator bodies including Nepal Rastra Bank, Securities Board, and Company Registrar’s Offi ce.

viii) In order to maintain good governance within the Bank, a Corporate Governance Committee has been constituted and the decisions of the governance issues discussed in the meeting have been implemented. The Chief Executive offi cer has been given the responsibility for maintaining Corporate Governance in the Bank.


CEO’s MessageI am privileged to report that the Fiscal Year 2018/19 proved to be yet another remarkable year for NMB Bank. The achievements and the accolades that the Bank received during the period has emboldened our vision to become the most preferred Bank in Nepal. Our persistent eff ort towards sustainable growth and untiring approach for the quality and transparency in business was recognized with the prestigious South Asian Federation of Accountants (SAFA) award for “Corporate Governance Disclosures” reaffi rming our commitment towards good governance.

The successful merger of Om Development Bank Ltd. (ODBL); one of the top-ranked development banks in the country, has enabled NMB to strengthen its foothold in the market and continue to serve a larger population base within a much wider geographical coverage. With the merger of ODBL, NMB by far has the largest network presence in Gandaki province.

The economy has been growing consistently by over 6% for third consecutive year and it is projected that this growth shall continue with an overall positive macroeconomic scenario in the future as well. In the backdrop of this positive economy, we see endless possibilities in the country to live up to the expectation of becoming a middle-income nation by the year 2030. The stable government and its gradual liberalization of policies has improved the country’s position in the doing business index with signifi cant improvement in access to credit information, and commercial judicial system amongst others along with the reduction of cost and time for cross-border trading. This has created a conducive environment for business sectors and opportunity for direct foreign investments, while also providing opportunities for Banks to expand its trade related services.

Whilst the country’s macroeconomic indicators look positive on many fronts, the banking industry is frequently overshadowed by volatility in liquidity resulting to a mismatch in deposit mobilization and credit demand, thus creating a funding gap in the market. This variability in fi nancial market is also attributed by the insuffi cient internal resources and/or lack of optimum resource utilization per se.

Riding on the wave of growing economy, the Bank has been able to expand its business and achieve desired outcomes in terms of both fi nancial and non-fi nancial growth as we continue to seek sustainability and responsible banking practices in all our internal and external endeavors. Aligning with country’s vision of self-reliant Nepal and achieving all sustainable development goals, the Bank has prioritized and focused its investments towards the uplist ment of productive and real economy sectors. We believe that our commitment is not just towards the profi t but also towards the sustainability of the backbone of the real economy including Agriculture, Energy, Tourism, and Education.

The Bank over the years has become successful in setting benchmarks in the industry and remain distinct over its competitors. As a joint venture of FMO Netherland and the sole member bank of Global Alliance for Banking on Values (GABV) in Nepal, NMB is the fi rst and only Bank in the industry to bring in foreign debt from renowned international groups including International Finance Corporation (IFC) and CDC Group Plc. With its association to such international investment groups, NMB as of date is the most sought ast er names amongst foreign investors seeking for an investment opportunity based upon sustainability in Nepal. NMB closed the largest ever loan syndication of a cement manufacturing company in the country amounting NPR 16 Billion as a lead Bank

The dynamic business environment and rise of Fintechs and Telecom services in fi nancial sectors has been changing the way of doing business for Nepalese Banks forcing them to adopt digital technologies at much faster pace than ever before in all its functions for eff ective tendering of varying and innovative services to its customers. The Bank understands that digital engagement with its customers is imperative for its future growth and has made substantial


investment for digitization of its banking products and processes shortening the service turnaround time for customers and other stakeholders. In this age of information and process of digitization, the Bank has also made sizeable investment in information security to maintain confi dentiality and integrity of all its stakeholders. Guided by the principles of Value-Based Banking in all its processes, NMB is the fi rst and only Bank in Nepal to achieve ISO/IEC 27001:2013 Certifi cation for Information and Security Management making itself the most progressive Bank moving towards customer centricity.

Amidst the market opportunities and prevailing challenges, we believe that the banking industry has lot more to deliver and grow. However, the growth will also incorporate the merger and acquisition of fi nancial institutions as the consolidation in industry is inevitable. The increase in compliance and other regulatory costs with ever-growing challenge and need to tackle risks of money laundering and terrorism fi nancing are also expected to push fi nancial institutions towards consolidation. The digitalization of the services coupled with customers’ growing service expectations will change the way of doing business. Understanding the unavoidable changes manifested by a paradigm shist in doing business and critically analyzing each behavioral change, NMB is all poised to set the standards and seize every opportunity in the market.

I humbly believe that our year-on-year success is the key-result of all the hard works, patience and determination exerted by our staff who together truly forms the most dynamic and energetic team force. I would like to extend my sincere gratitude to FMO for its unprecedented support in SME and digitization eff orts. I also take this opportunity to personally extend my heartfelt thanks to our Chairman Mr. Pawan Kumar Golyan and all board members for their relentless guidance in making NMB one of the best commercial banks of the country. Finally, my sincere thanks to the esteemed shareholders, Nepal Rastra Bank, Ministry of Finance, partner organizations, SEBON, and all other regulatory bodies for their invaluable suggestions to our continuous improvement and business growth. With your constant trust and solidarity, we aspire to grow collectively for many years into the future.

Thank you

Sunil KCChief Executive Offi cer


Financial Graphs

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

20

40

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80

100

120

140

160

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

Grow

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Volu

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ilion

Fiscal Year

Assets and Growth Comparison

Total Assets NMB Growth Percentage of Total Assets

Industry growth percentage of total assets

01020304050607080

State 1 State 2 State 3 State 4 State 5 State 6 State 7

82

75

210

1 1

136

57

210

1 2Vol

ume

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illio

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Province

Province-wise Loan and Deposit Volume

State-wise Total Deposit (FY '18-19)

State-wise Total Loan (FY '18-19)

0%10%20%30%40%50%60%70%80%90%

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

Percentage growth of Deposit Volume

INDUSTRY growth percentage of total deposits

Growth Percentage of Total Deposit of NMB

0%

20%

40%

60%

80%

100%

120%

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

Percentage Growth of Loan Volume

INDUSTRY growth percentage of total Risk Assets

Growth percentage of Total Risk Assets of NMB

-

0.50

1.00

1.50

2.00

2.50

3.00

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

%

Fiscal Year

Efficiency Ratios

Exchange Gain/Total Assets

Net Profit/Loan and Advances

Net Profit/Total Assets

Total Operating Expenses/Total Assets


24%

55%

6%

16%

DEPOSIT MIX FY 2017-18

Savings

Fixed

Current

Other deposits

30%

51%

6%13%

DEPOSIT MIX FY 2018-19

Savings

Fixed

Current

Other deposits

33%

43%

17%6%

LOAN MIX FY '18/19

Corporate & Mid-corporateSME/MSME/MF/Agri

Retail

Others

42%

34%

18%6%

LOAN MIX FY '17/18

Corporate & mid-corporateSME/MSME/MF/Agri

Retail

Others

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10

20

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100

FY 2014-15

FY 2015-16

FY 2016-17

FY 2017-18

FY 2018-19 CU

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FISCAL YEAR

Loan Volume and Account Count

Total Risk Assets Number of Loan Account

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2,000

4,000

6,000

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FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

NPR

mill

ion

Fiscal Year

Total Operating Income and Net Profit

Total Operating Income Net Profit After Tax

0%

50%

100%

150%

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19Grow

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Fiscal Year

Industry vs NMB growth percent of net profit

INDUSTRY growth percentage of Net Profit

Growth percentage of net profit of NMB

01,0002,0003,0004,0005,000

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

NPR

mill

ion

Fiscal Year

Trend of NII, Fees and Commission

Net Interest Income Fees and Commission


-

200

400

600

800

1,000

1,200

0

200

400

600

800

1,000

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FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

Num

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Volu

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NPR

mill

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Fiscal Year

Staff Number and Cost

Staff Bonus Total Staff Expenses Number of Staff

49%

35%

57%

34%

55%

35%

58%

39%

62%

34%

0%

10%

20%

30%

40%

50%

60%

70%

Staff Expenses/Total Operating Expenses Staff Bonus/Total Staff Expenses

Staff cost analysis FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

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FY 2014-15

FY 2015-16

FY 2016-17

FY 2017-18

FY 2018-19

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FISCAL YEAR

Deposit Volume and Account Count

Total Deposits Number of Deposit Account


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- 10.00 20.00 30.00 40.00

FY 2014-15

FY 2015-16

FY 2016-17

FY 2017-18

FY 2018-19

NPR

Per S

hare

Fiscal Year

Market value per share and ratios

Market value per share Earning per Share

Dividend per share Price Earning Ratio

0%

5%

10%

15%

20%

25%

30%

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FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

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Shareholder's Fund, Dividend and ROEShareholder's Fund Total Dividend % Average Return on Equity %


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FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

Perc

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Fiscal Year

Base Rate, Yield and Cost Trend

Base Rate Weighted Average yield

Weighted Average cost of fund Weighted Average Interest Spread

024681012141618

0

20

40

60

80

100

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

Ratio

Perc

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Fiscal Year

Financial Health

CD Ratio Total Capital Adequacy Ratio

Liquidity (CRR) Non-performing credit/Total credit

7.86 7.16

9.26

10.78 11.17

3.63 3.08

4.71

6.76 6.58

-

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8.00

10.00

12.00

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

%

Interest Income and Interest Cost

Interest Income/Loan & Advances

Interest Expenses on Total Deposit and Borrowing



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are

183

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180

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216

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Consolidated Statement of Profi t or LossFor the year ended 31 Ashad, 2076 (16 July 2019)

(Amount in NPR)

Particulars

Group NMB

Note Year ended 31 Ashad 2076

Year ended 32 Ashad 2075



Interest income 4.29 11,607,773,819 9,169,057,454 11,082,059,031 8,728,699,831

Interest expense 4.30 7,092,738,463 6,036,130,108 6,838,038,085 5,824,685,753

Net interest income 4,515,035,356 3,132,927,346 4,244,020,946 2,904,014,078

Fee and commission income 4.31 1,159,227,002 939,618,308 1,003,530,866 794,250,068

Fee and commission expense 4.32 101,418,691 69,926,838 93,955,270 62,708,027

Net fee and commission income 1,057,808,311 869,691,470 909,575,596 731,542,041

Net interest, fee and commission income 5,572,843,667 4,002,618,816 5,153,596,542 3,635,556,119

Net trading income 4.33 352,049,490 299,605,983 352,049,490 299,605,983

Other operating income 4.34 212,650,641 166,970,494 210,373,919 164,962,228

Total operating income 6,137,543,798 4,469,195,293 5,716,019,951 4,100,124,330 Impairment charge/(reversal) for loans and other losses 4.35 176,055,082 (192,047,347) 166,272,634 (219,650,789)

Net operating income 5,961,488,716 4,661,242,640 5,549,747,317 4,319,775,119

Operating expense

Personnel expenses 4.36 1,587,182,602 1,157,939,860 1,415,793,493 1,021,570,435

Other operating expenses 4.37 764,153,498 642,723,322 708,661,406 589,394,199

Depreciation & Amortisation 4.38 187,669,499 155,987,560 176,793,355 147,695,238

Operating Profi t 3,422,483,117 2,704,591,898 3,248,499,063 2,561,115,247

Non operating income 4.39 17,090,672 43,140,193 17,090,672 43,140,193

Non operating expense 4.40 17,609,148 37,935,379 17,585,901 37,935,379

Profi t before income tax 3,421,964,641 2,709,796,712 3,248,003,834 2,566,320,061

Income tax expense 4.41

Current Tax 1,043,451,780 865,791,637 994,167,044 829,621,042

Deferred Tax expense/(Income) (1,877,083) (116,372,096) (3,439,237) (117,093,734)

Profi t for the period 2,380,389,944 1,960,377,171 2,257,276,027 1,853,792,753

Profi t attributable to:

Equity holders of the Bank 2,345,558,841 1,940,103,356 2,257,276,027 1,853,792,753

Non-controlling interest 34,831,103 20,273,815 - -

Profi t for the period 2,380,389,944 1,960,377,171 2,257,276,027 1,853,792,753

Earnings per share

Basic earnings per share (BEPS) 24.46 22.88 23.54 21.86

Diluted earnings per share (DEPS) 24.46 22.88 23.54 21.86

As per our attached report of even date

Sunil KCCEO

Pawan Kumar GolyanChairman

Nico PijlDirector

Sunir Kumar DhungelManaging PartnerSAR AssociatesChartered Accountants

Mridul ParajuliHead-Finance & Planning

Rajendra Kafl e Director

Harischandra SubediDirector

Pradeep Raj PandeyDirector

Navin ManandharChief Finance Offi cer

Date: Sunday, November 10, 2019Place: NMB Bhawan, Babarmahal, Kathmandu


Consolidated Statement of Other Comprehensive IncomeFor the year ended 31 Ashad, 2076 (16 July 2019)

(Amount in NPR)

Particulars

Group NMB





Profi t for the year 2,380,389,944 1,960,377,171 2,257,276,027 1,853,792,753

Other comprehensive income, net of income tax

a) Items that will not be reclassifi ed to profi t or loss- Gains/(losses) from investments in equity instru-ments measured at fair value 2,474,640 (41,011,310) 2,162,140 (38,270,067)

- Gains/(losses) on revalution - - - -

- Atuarial gains/(losses) on defi ned benefi t plans (4,188,587) (24,750,032) (1,269,955) (24,971,604)

-Income tax relating to above items (514,184) (19,728,403) 267,656 (18,972,501)

Net other comprehsive income that will not be reclassifi ed to profi t or loss (1,199,763) (46,032,939) 624,530 (44,269,170)

b) Items that are or may be reclassifi ed to profi t or loss - - - -

- Gains/(losses) on cash fl ow hedge - - - -

- Exchange gains/(losses) (arising from translating fi nancial assets of foreign operation) - - - -

- Income tax relating to above items - - - -

- Reclassify to profi t or loss - - - -

Net other comprehsive income that are or may be reclassifi ed to profi t or loss - - - -

c) Share of other comprehensive income of associ-ate accounted as per equited method - - - -

Other comprehensive income for the period, net of income tax (1,199,763) (46,032,939) 624,530 (44,269,170)

Total comprehensive income for the period 2,379,190,181 1,914,344,230 2,257,900,556 1,809,523,583

Total comprehensive income attributable to:

Equity holders of the Bank 2,344,728,421 1,893,994,416 2,257,900,556 1,809,523,583

Non-controlling interest 34,461,761 20,349,814 - -

Total comprehensive income for the period 2,379,190,181 1,914,344,230 2,257,900,556 1,809,523,583


Sunil KCCEO


Nico PijlDirector

Sunir Kumar DhungelManaging PartnerSAR AssociatesChartered Accountants






Date: Sunday, November 10, 2019Place: NMB Bhawan, Babarmahal, Kathmandu


Cons

olid

ated

Sta

tem

ent o

f cha

nges

in e

quity

For t

he y

ear e

nded

31

Ash

ad, 2

076

(16

July

201

9)

(Am

ount

in N

PR)

Gro

up

Att

ribu

tabl

e to

equ

ity h

olde

rs o

f the

Gro

up

Part

icul

ars

Sha

re C

apita

l S

hare

pre

miu

m

Gen

eral

re

serv

e E

xcha

nge

equa

lisat

ion

rese

rve

Reg

ulat

ory

rese

rve

Fai

r va

lue

rese

rve

Rev

alua

tion

Res

erve

R

etai

ned

earn

ing

Oth

er re

serv

e T

otal

N

on-c

ontr

ollin

g in

tere

st

Tot

al e

quity

Bal

ance

at 1

5 Ju

ly 2

017

6,4

61,7

74,3

34

1,4

44,7

15,1

09

1,3

09,8

97,1

00

54,

642,

254

-

21,

883,

371

-

1,5

13,8

18,4

19

277

,705

,039

.3

11,

084,

435,

628

111

,856

,859

1

1,19

6,29

2,48

6

Adj

ustm

ent/

Res

tate

men

t -

-

-

-

-

-

-

(2

,612

,928

) -

(2

,612

,928

) -

(2

,612

,928

)

Tran

sfer

to C

apita

l Adj

ustm

ent F

und

-

-

-

-

-

-

-

(4,0

30,9

66)

4,0

30,9

66

-

-

-

Adj

uste

d/R

esta

ted

bala

nce

at 1

6 Ju

ly 2

017

6,4

61,7

74,3

34

1,4

44,7

15,1

09

1,3

09,8

97,1

00

54,

642,

254

-

21,

883,

371

-

1,5

07,1

74,5

25

281

,736

,005

1

1,08

1,82

2,69

8 1

11,8

56,8

59

11,

193,

679,

558

Com

preh

ensi

ve in

com

e fo

r th

e ye

ar 2

017-

18

-

-

-

-

-

Profi

t fo

r th

e ye

ar

-

-

-

-

-

-

-

1,9

40,1

03,3

55

-

1,9

40,1

03,3

56

20,

273,

815

1,9

60,3

77,1

71

Othe

r co

mpr

ehen

sive

inco

me,

net

of t

ax

-

-

-

-

-

-

-

-

-

-

-

-

Gai

n/(L

oss)

from

Inve

stm

ent i

n Eq

uity

Inst

rum

ent

mea

sure

d at

Fai

r Val

ue -

-

-

-

-

(2

8,70

7,91

7) -

-

-

(2

8,70

7,91

7) -

(2

8,70

7,91

7)

Gai

n/(L

oss)

on

reva

luat

ion

-

-

-

-

-

-

-

-

-

-

-

-

Act

uria

l Gai

n/(L

oss)

on

defi n

ed b

enefi

t pl

ans

-

-

-

-

-

-

-

68,

802

(17,

401,

022)

(17,

332,

220)

75,

999

(17,

256,

220)

Gai

n/(L

oss)

on

Cash

Flo

w H

edge

-

-

-

-

-

-

-

-

-

-

-

-

Exch

ange

Gai

n/(L

osss

) (ar

isin

g fr

om tr

ansl

atin

g Fi

nanc

ial A

sset

s of

For

eign

Ope

ratio

n) -

-

-

-

-

-

-

-

-

-

-

-

Tran

sfer

to re

serv

es d

urin

g th

e ye

ar

-

-

374

,094

,605

1

,731

,624

4

04,4

06,6

12

-

-

(882

,235

,818

) 1

03,6

85,6

94

1,6

82,7

16

-

1,6

82,7

16

Gen

eral

rese

rve

fund

-

-

3

74,0

94,6

05

-

-

-

-

(374

,094

,605

) -

-

-

-

Deb

entu

re re

dem

ptio

n re

serv

e -

-

-

-

-

-

-

(9

0,99

9,50

3) 9

0,99

9,50

3 -

-

-

Inve

stm

ent a

djus

tmen

t Res

erve

-

-

-

-

-

-

-

6

,205

,056

(6

,205

,056

) -

-

-

Exch

ange

fl uc

tuat

ion

rese

rve

-

-

-

1,7

31,6

24

-

-

-

(1,7

31,6

24)

-

-

-

-

Corp

orat

e so

cial

resp

onsi

bilit

y fu

nd

-

-

-

-

-

-

-

(17,

041,

728)

17,

041,

728

-

-

-

Cust

omer

Pro

tect

ion

Fund

-

-

-

-

-

-

-

(1

66,8

03)

1,8

49,5

19

1,6

82,7

16

-

1,6

82,7

16

Reg

ulat

ory

Res

erve

-

-

-

-

4

04,4

06,6

12

-

-

(404

,406

,612

) -

-

-

-

Tran

sfer

from

rese

rves

dur

ing

the

year

-

-

-

-

-

-

-

3

,037

,118

(3

,037

,118

) -

-

-

Staff

ski

ll de

velo

pmen

t fun

d -

-

-

-

-

-

-

3

,037

,118

(3

,037

,118

) -

-

-

Tran

sact

ions

with

ow

ners

, dire

ctly

reco

gnis

ed

in e

quity

-

-

-

-

-

-

-

-

-

-

-

-

Shar

e Is

sued

-

-

-

-

-

-

-

-

-

-

-

-

FPO

Issu

ed a

nd A

llote

d 1

,141

,516

,300

-

-

-

-

-

-

-

-

1

,141

,516

,300

-

1

,141

,516

,300

Prem

ium

on

FPO

Issu

e -

2

,659

,732

,979

-

-

-

-

-

-

-

2

,659

,732

,979

-

2

,659

,732

,979

FPO

Issu

e Ex

pens

es (n

et o

ff ta

xes)

-

(2

3,22

4,34

0) -

-

-

-

-

-

-

(2

3,22

4,34

0) -

(2

3,22

4,34

0)

Shar

e ba

sed

paym

ents

-

-

-

-

-

-

-

-

-

-

-

-

Bon

us Is

sue

of N

MB

MF

-

-

-

-

-

-

-

14,

369,

250

-

14,

369,

250

-

14,

369,

250

Div

iden

ds to

equ

ity h

olde

rs

-

-

-

-

-

-

-

-

-

-

-

-

Bon

us s

hare

s is

sued

-

(1

4,36

9,25

0) -

-

-

-

-

-

-

(1

4,36

9,25

0) -

(1

4,36

9,25

0)

Cash

div

iden

d pa

id

-

-

-

-

-

-

-

(106

,019

,434

) -

(1

06,0

19,4

34)

(726

,619

) (1

06,7

46,0

53)

Tota

l con

trib

utio

ns b

y an

d di

stri

butio

ns

1,1

41,5

16,3

00

2,6

22,1

39,3

89

-

-

-

-

-

(91,

650,

184)

-

3,6

72,0

05,5

05

(726

,619

) 3

,671

,278

,886

Bal

ance

at 1

6 Ju

ly 2

018

7,6

03,2

90,6

34

4,0

66,8

54,4

98

1,6

83,9

91,7

05

56,

373,

878

404

,406

,612

(6

,824

,546

) -

2

,476

,497

,798

3

64,9

83,5

58

16,

649,

574,

138

131

,480

,054

1

6,78

1,05

4,19

3

Bal

ance

at 1

7 Ju

ly 2

018

7,6

03,2

90,6

34

4,0

66,8

54,4

98

1,6

83,9

91,7

05

56,

373,

878

404

,406

,612

(6

,824

,546

) -

2

,476

,497

,798

3

64,9

83,5

58

16,

649,

574,

138

131

,480

,054

1

6,78

1,05

4,19

3

Adj

ustm

ent/

Res

tate

men

t -

-

-

-

-

-

-

4

,954

-

4

,954

-

4

,954

Prio

r Per

iod

Taxe

s -

-

-

-

-

-

-

(1

,216

,722

) -

(1

,216

,722

) -

(1

,216

,722

)

Adj

uste

d/R

esta

ted

bala

nce

at 1

7 Ju

ly 2

018

7,6

03,2

90,6

34

4,0

66,8

54,4

98

1,6

83,9

91,7

05

56,

373,

878

404

,406

,612

(6

,824

,546

) -

2

,475

,286

,030

3

64,9

83,5

58

16,

648,

362,

370

131

,480

,054

1

6,77

9,84

2,42

5

Com

preh

ensi

ve in

com

e fo

r th

e ye

ar 2

018-

19

-

-

-

-

-

-

-

-

-

-

-

-

Profi

t fo

r th

e ye

ar

-

-

-

-

-

-

-

2,3

45,5

58,8

41

-

2,3

45,5

58,8

41

34,

831,

103

2,3

80,3

89,9

44

Othe

r co

mpr

ehen

sive

inco

me,

net

of t

ax

-

-

-

-

-

-

-

-

-

-

-

-

Gai

n/(L

oss)

from

Inve

stm

ent i

n Eq

uity

Inst

rum

ent

mea

sure

d at

Fai

r Val

ue -

-

-

-

-

1

,732

,248

-

-

-

1

,732

,248

-

1

,732

,248

Gai

n/(L

oss)

on

reva

luat

ion

-

-

-

-

-

-

-

-

-

- -

-

Act

uria

l Gai

n/(L

oss)

on

defi n

ed b

enefi

t pl

ans

-

-

-

-

-

-

-

-

(2,5

62,6

69)

(2,5

62,6

69)

(369

,342

) (2

,932

,011

)

Gai

n/(L

oss)

on

Cash

Flo

w H

edge

-

-

-

-

-

-

-

-

-

-

-

-

Exch

ange

Gai

n/(L

osss

) (ar

isin

g fr

om tr

ansl

atin

g Fi

nanc

ial A

sset

s of

For

eign

Ope

ratio

n) -

-

-

-

-

-

-

-

-

-

-

-

Tota

l com

preh

ensi

ve in

com

e fo

r th

e ye

ar

-

-

-

-

-

1,7

32,2

48

-

2,3

45,5

58,8

41

(2,5

62,6

69)

2,3

44,7

28,4

21

34,

461,

761

2,3

79,1

90,1

81

Tran

sfer

to re

serv

e du

ring

the

year

-

-

4

57,5

79,7

67

22,

003,

093

414

,326

,452

-

-

(1

,015

,260

,206

) 1

24,1

78,6

58

2,8

27,7

65

(235

) 2

,827

,529

Gen

eral

Res

erve

Fun

d -

-

4

57,5

79,7

67

-

-

-

-

(457

,579

,767

) -

-

-

-

Deb

entu

re R

edem

ptio

n R

eser

ve

-

-

-

-

-

-

-

(90,

452,

511)

90,

452,

511

-

-

-

Inve

stm

ent A

djus

tmen

t Res

erve

-

-

-

-

-

-

-

-

-

-

-

-

Exch

ange

Flu

ctua

tion

Fund

-

-

-

2

2,00

3,09

3 -

-

-

(2

2,00

3,09

3) -

-

-

-

Staff

Ski

ll D

evel

opm

ent F

und

-

-

-

-

-

-

-

-

-

-

-

-

Corp

orat

e So

cial

Res

pons

ibili

ty F

und

-

-

-

-

-

-

-

(17,

200,

430)

17,

200,

186

(245

) (2

35)

(480

)

Cust

omer

Pro

tect

ion

Fund

-

-

-

-

-

-

-

(2

,697

,952

) 5

,525

,961

2

,828

,009

-

2

,828

,009

Def

erre

d Ta

x R

eser

ve

-

-

-

-

-

-

-

-

-

-

-

-

Reg

ulat

ory

Res

erve

-

-

-

-

4

14,3

26,4

52

-

-

(414

,326

,452

) -

-

-

-

NM

B S

taff

Rel

ief F

und

-

-

-

-

-

-

-

(11,

000,

000)

11,

000,

000

-

-

-

Tran

sfer

from

rese

rve

duri

ng th

e ye

ar

-

-

-

-

-

-

-

-

(1,0

00,0

00)

(1,0

00,0

00)

-

(1,0

00,0

00)

Staff

Ski

ll D

evel

opm

ent F

und

-

-

-

-

-

-

-

-

-

-

-

-

NM

B S

taff

Rel

ief F

und

-

-

-

-

-

-

-

-

(1,0

00,0

00)

(1,0

00,0

00)

-

(1,0

00,0

00)

Tran

sact

ions

with

ow

ners

, dire

ctly

reco

gnis

ed

in e

quity

-

-

-

-

-

-

-

-

-

-

-

-

Shar

e Is

sued

-

-

-

-

-

-

-

-

-

-

-

-

Prem

ium

Rec

eive

d fr

om F

MO

-

471

,569

,200

-

-

-

-

-

-

-

4

71,5

69,2

00

-

471

,569

,200

Shar

e Is

sue

Expe

nses

(net

off

taxe

s) -

(5

,265

,251

) -

-

-

-

-

-

-

(5

,265

,251

) -

(5

,265

,251

)

Bon

us S

hare

Issu

e of

NM

BM

F -

-

-

-

-

-

-

1

0,77

6,93

8 -

1

0,77

6,93

8 -

1

0,77

6,93

8

Shar

e ba

sed

paym

ents

-

-

-

-

-

-

-

-

-

-

-

-

Div

iden

ds to

equ

ity h

olde

rs

-

-

-

-

-

-

-

-

-

-

-

-

Bon

us s

hare

s is

sued

2

,014

,872

,018

(2

,020

,359

,931

) -

-

-

-

-

(5

,289

,025

) -

(1

0,77

6,93

8) -

(1

0,77

6,93

8)

Cash

div

iden

d pa

id

-

-

-

-

-

-

-

(1,8

49,3

50,0

32)

-

(1,8

49,3

50,0

32)

(544

,964

) (1

,849

,894

,996

)

Tota

l con

trib

utio

ns b

y an

d di

stri

butio

ns

2,0

14,8

72,0

18

(1,5

54,0

55,9

82)

-

-

-

-

-

(1,8

43,8

62,1

19)

-

(1,3

83,0

46,0

83)

(544

,964

) (1

,383

,591

,047

)

Bal

ance

at 1

6 Ju

ly 2

019

9,6

18,1

62,6

52

2,5

12,7

98,5

17

2,1

41,5

71,4

72

78,

376,

972

818

,733

,064

(5

,092

,298

) -

1

,961

,722

,547

4

85,5

99,5

48

17,

611,

872,

473

165

,396

,616

1

7,77

7,26

9,08

9


(Am

ount

in N

PR)

Gro

up

Att

ribu

tabl

e to

equ

ity h

olde

rs o

f the

Gro

up

Part

icul

ars

Sha

re C

apita

l S

hare

pre

miu

m

Gen

eral

re

serv

e E

xcha

nge

equa

lisat

ion

rese

rve

Reg

ulat

ory

rese

rve

Fai

r va

lue

rese

rve

Rev

alua

tion

Res

erve

R

etai

ned

earn

ing

Oth

er re

serv

e T

otal

N

on-c

ontr

ollin

g in

tere

st

Tot

al e

quity

Bal

ance

at 1

5 Ju

ly 2

017

6,4

61,7

74,3

34

1,4

44,7

15,1

09

1,3

09,8

97,1

00

54,

642,

254

-

21,

883,

371

-

1,5

13,8

18,4

19

277

,705

,039

.3

11,

084,

435,

628

111

,856

,859

1

1,19

6,29

2,48

6

Adj

ustm

ent/

Res

tate

men

t -

-

-

-

-

-

-

(2

,612

,928

) -

(2

,612

,928

) -

(2

,612

,928

)

Tran

sfer

to C

apita

l Adj

ustm

ent F

und

-

-

-

-

-

-

-

(4,0

30,9

66)

4,0

30,9

66

-

-

-

Adj

uste

d/R

esta

ted

bala

nce

at 1

6 Ju

ly 2

017

6,4

61,7

74,3

34

1,4

44,7

15,1

09

1,3

09,8

97,1

00

54,

642,

254

-

21,

883,

371

-

1,5

07,1

74,5

25

281

,736

,005

1

1,08

1,82

2,69

8 1

11,8

56,8

59

11,

193,

679,

558

Com

preh

ensi

ve in

com

e fo

r th

e ye

ar 2

017-

18

-

-

-

-

-

Profi

t fo

r th

e ye

ar

-

-

-

-

-

-

-

1,9

40,1

03,3

55

-

1,9

40,1

03,3

56

20,

273,

815

1,9

60,3

77,1

71

Othe

r co

mpr

ehen

sive

inco

me,

net

of t

ax

-

-

-

-

-

-

-

-

-

-

-

-

Gai

n/(L

oss)

from

Inve

stm

ent i

n Eq

uity

Inst

rum

ent

mea

sure

d at

Fai

r Val

ue -

-

-

-

-

(2

8,70

7,91

7) -

-

-

(2

8,70

7,91

7) -

(2

8,70

7,91

7)

Gai

n/(L

oss)

on

reva

luat

ion

-

-

-

-

-

-

-

-

-

-

-

-

Act

uria

l Gai

n/(L

oss)

on

defi n

ed b

enefi

t pl

ans

-

-

-

-

-

-

-

68,

802

(17,

401,

022)

(17,

332,

220)

75,

999

(17,

256,

220)

Gai

n/(L

oss)

on

Cash

Flo

w H

edge

-

-

-

-

-

-

-

-

-

-

-

-

Exch

ange

Gai

n/(L

osss

) (ar

isin

g fr

om tr

ansl

atin

g Fi

nanc

ial A

sset

s of

For

eign

Ope

ratio

n) -

-

-

-

-

-

-

-

-

-

-

-

Tran

sfer

to re

serv

es d

urin

g th

e ye

ar

-

-

374

,094

,605

1

,731

,624

4

04,4

06,6

12

-

-

(882

,235

,818

) 1

03,6

85,6

94

1,6

82,7

16

-

1,6

82,7

16

Gen

eral

rese

rve

fund

-

-

3

74,0

94,6

05

-

-

-

-

(374

,094

,605

) -

-

-

-

Deb

entu

re re

dem

ptio

n re

serv

e -

-

-

-

-

-

-

(9

0,99

9,50

3) 9

0,99

9,50

3 -

-

-

Inve

stm

ent a

djus

tmen

t Res

erve

-

-

-

-

-

-

-

6

,205

,056

(6

,205

,056

) -

-

-

Exch

ange

fl uc

tuat

ion

rese

rve

-

-

-

1,7

31,6

24

-

-

-

(1,7

31,6

24)

-

-

-

-

Corp

orat

e so

cial

resp

onsi

bilit

y fu

nd

-

-

-

-

-

-

-

(17,

041,

728)

17,

041,

728

-

-

-

Cust

omer

Pro

tect

ion

Fund

-

-

-

-

-

-

-

(1

66,8

03)

1,8

49,5

19

1,6

82,7

16

-

1,6

82,7

16

Reg

ulat

ory

Res

erve

-

-

-

-

4

04,4

06,6

12

-

-

(404

,406

,612

) -

-

-

-

Tran

sfer

from

rese

rves

dur

ing

the

year

-

-

-

-

-

-

-

3

,037

,118

(3

,037

,118

) -

-

-

Staff

ski

ll de

velo

pmen

t fun

d -

-

-

-

-

-

-

3

,037

,118

(3

,037

,118

) -

-

-

Tran

sact

ions

with

ow

ners

, dire

ctly

reco

gnis

ed

in e

quity

-

-

-

-

-

-

-

-

-

-

-

-

Shar

e Is

sued

-

-

-

-

-

-

-

-

-

-

-

-

FPO

Issu

ed a

nd A

llote

d 1

,141

,516

,300

-

-

-

-

-

-

-

-

1

,141

,516

,300

-

1

,141

,516

,300

Prem

ium

on

FPO

Issu

e -

2

,659

,732

,979

-

-

-

-

-

-

-

2

,659

,732

,979

-

2

,659

,732

,979

FPO

Issu

e Ex

pens

es (n

et o

ff ta

xes)

-

(2

3,22

4,34

0) -

-

-

-

-

-

-

(2

3,22

4,34

0) -

(2

3,22

4,34

0)

Shar

e ba

sed

paym

ents

-

-

-

-

-

-

-

-

-

-

-

-

Bon

us Is

sue

of N

MB

MF

-

-

-

-

-

-

-

14,

369,

250

-

14,

369,

250

-

14,

369,

250

Div

iden

ds to

equ

ity h

olde

rs

-

-

-

-

-

-

-

-

-

-

-

-

Bon

us s

hare

s is

sued

-

(1

4,36

9,25

0) -

-

-

-

-

-

-

(1

4,36

9,25

0) -

(1

4,36

9,25

0)

Cash

div

iden

d pa

id

-

-

-

-

-

-

-

(106

,019

,434

) -

(1

06,0

19,4

34)

(726

,619

) (1

06,7

46,0

53)

Tota

l con

trib

utio

ns b

y an

d di

stri

butio

ns

1,1

41,5

16,3

00

2,6

22,1

39,3

89

-

-

-

-

-

(91,

650,

184)

-

3,6

72,0

05,5

05

(726

,619

) 3

,671

,278

,886

Bal

ance

at 1

6 Ju

ly 2

018

7,6

03,2

90,6

34

4,0

66,8

54,4

98

1,6

83,9

91,7

05

56,

373,

878

404

,406

,612

(6

,824

,546

) -

2

,476

,497

,798

3

64,9

83,5

58

16,

649,

574,

138

131

,480

,054

1

6,78

1,05

4,19

3

Bal

ance

at 1

7 Ju

ly 2

018

7,6

03,2

90,6

34

4,0

66,8

54,4

98

1,6

83,9

91,7

05

56,

373,

878

404

,406

,612

(6

,824

,546

) -

2

,476

,497

,798

3

64,9

83,5

58

16,

649,

574,

138

131

,480

,054

1

6,78

1,05

4,19

3

Adj

ustm

ent/

Res

tate

men

t -

-

-

-

-

-

-

4

,954

-

4

,954

-

4

,954

Prio

r Per

iod

Taxe

s -

-

-

-

-

-

-

(1

,216

,722

) -

(1

,216

,722

) -

(1

,216

,722

)

Adj

uste

d/R

esta

ted

bala

nce

at 1

7 Ju

ly 2

018

7,6

03,2

90,6

34

4,0

66,8

54,4

98

1,6

83,9

91,7

05

56,

373,

878

404

,406

,612

(6

,824

,546

) -

2

,475

,286

,030

3

64,9

83,5

58

16,

648,

362,

370

131

,480

,054

1

6,77

9,84

2,42

5

Com

preh

ensi

ve in

com

e fo

r th

e ye

ar 2

018-

19

-

-

-

-

-

-

-

-

-

-

-

-

Profi

t fo

r th

e ye

ar

-

-

-

-

-

-

-

2,3

45,5

58,8

41

-

2,3

45,5

58,8

41

34,

831,

103

2,3

80,3

89,9

44

Othe

r co

mpr

ehen

sive

inco

me,

net

of t

ax

-

-

-

-

-

-

-

-

-

-

-

-

Gai

n/(L

oss)

from

Inve

stm

ent i

n Eq

uity

Inst

rum

ent

mea

sure

d at

Fai

r Val

ue -

-

-

-

-

1

,732

,248

-

-

-

1

,732

,248

-

1

,732

,248

Gai

n/(L

oss)

on

reva

luat

ion

-

-

-

-

-

-

-

-

-

- -

-

Act

uria

l Gai

n/(L

oss)

on

defi n

ed b

enefi

t pl

ans

-

-

-

-

-

-

-

-

(2,5

62,6

69)

(2,5

62,6

69)

(369

,342

) (2

,932

,011

)

Gai

n/(L

oss)

on

Cash

Flo

w H

edge

-

-

-

-

-

-

-

-

-

-

-

-

Exch

ange

Gai

n/(L

osss

) (ar

isin

g fr

om tr

ansl

atin

g Fi

nanc

ial A

sset

s of

For

eign

Ope

ratio

n) -

-

-

-

-

-

-

-

-

-

-

-

Tota

l com

preh

ensi

ve in

com

e fo

r th

e ye

ar

-

-

-

-

-

1,7

32,2

48

-

2,3

45,5

58,8

41

(2,5

62,6

69)

2,3

44,7

28,4

21

34,

461,

761

2,3

79,1

90,1

81

Tran

sfer

to re

serv

e du

ring

the

year

-

-

4

57,5

79,7

67

22,

003,

093

414

,326

,452

-

-

(1

,015

,260

,206

) 1

24,1

78,6

58

2,8

27,7

65

(235

) 2

,827

,529

Gen

eral

Res

erve

Fun

d -

-

4

57,5

79,7

67

-

-

-

-

(457

,579

,767

) -

-

-

-

Deb

entu

re R

edem

ptio

n R

eser

ve

-

-

-

-

-

-

-

(90,

452,

511)

90,

452,

511

-

-

-

Inve

stm

ent A

djus

tmen

t Res

erve

-

-

-

-

-

-

-

-

-

-

-

-

Exch

ange

Flu

ctua

tion

Fund

-

-

-

2

2,00

3,09

3 -

-

-

(2

2,00

3,09

3) -

-

-

-

Staff

Ski

ll D

evel

opm

ent F

und

-

-

-

-

-

-

-

-

-

-

-

-

Corp

orat

e So

cial

Res

pons

ibili

ty F

und

-

-

-

-

-

-

-

(17,

200,

430)

17,

200,

186

(245

) (2

35)

(480

)

Cust

omer

Pro

tect

ion

Fund

-

-

-

-

-

-

-

(2

,697

,952

) 5

,525

,961

2

,828

,009

-

2

,828

,009

Def

erre

d Ta

x R

eser

ve

-

-

-

-

-

-

-

-

-

-

-

-

Reg

ulat

ory

Res

erve

-

-

-

-

4

14,3

26,4

52

-

-

(414

,326

,452

) -

-

-

-

NM

B S

taff

Rel

ief F

und

-

-

-

-

-

-

-

(11,

000,

000)

11,

000,

000

-

-

-

Tran

sfer

from

rese

rve

duri

ng th

e ye

ar

-

-

-

-

-

-

-

-

(1,0

00,0

00)

(1,0

00,0

00)

-

(1,0

00,0

00)

Staff

Ski

ll D

evel

opm

ent F

und

-

-

-

-

-

-

-

-

-

-

-

-

NM

B S

taff

Rel

ief F

und

-

-

-

-

-

-

-

-

(1,0

00,0

00)

(1,0

00,0

00)

-

(1,0

00,0

00)

Tran

sact

ions

with

ow

ners

, dire

ctly

reco

gnis

ed

in e

quity

-

-

-

-

-

-

-

-

-

-

-

-

Shar

e Is

sued

-

-

-

-

-

-

-

-

-

-

-

-

Prem

ium

Rec

eive

d fr

om F

MO

-

471

,569

,200

-

-

-

-

-

-

-

4

71,5

69,2

00

-

471

,569

,200

Shar

e Is

sue

Expe

nses

(net

off

taxe

s) -

(5

,265

,251

) -

-

-

-

-

-

-

(5

,265

,251

) -

(5

,265

,251

)

Bon

us S

hare

Issu

e of

NM

BM

F -

-

-

-

-

-

-

1

0,77

6,93

8 -

1

0,77

6,93

8 -

1

0,77

6,93

8

Shar

e ba

sed

paym

ents

-

-

-

-

-

-

-

-

-

-

-

-

Div

iden

ds to

equ

ity h

olde

rs

-

-

-

-

-

-

-

-

-

-

-

-

Bon

us s

hare

s is

sued

2

,014

,872

,018

(2

,020

,359

,931

) -

-

-

-

-

(5

,289

,025

) -

(1

0,77

6,93

8) -

(1

0,77

6,93

8)

Cash

div

iden

d pa

id

-

-

-

-

-

-

-

(1,8

49,3

50,0

32)

-

(1,8

49,3

50,0

32)

(544

,964

) (1

,849

,894

,996

)

Tota

l con

trib

utio

ns b

y an

d di

stri

butio

ns

2,0

14,8

72,0

18

(1,5

54,0

55,9

82)

-

-

-

-

-

(1,8

43,8

62,1

19)

-

(1,3

83,0

46,0

83)

(544

,964

) (1

,383

,591

,047

)

Bal

ance

at 1

6 Ju

ly 2

019

9,6

18,1

62,6

52

2,5

12,7

98,5

17

2,1

41,5

71,4

72

78,

376,

972

818

,733

,064

(5

,092

,298

) -

1

,961

,722

,547

4

85,5

99,5

48

17,

611,

872,

473

165

,396

,616

1

7,77

7,26

9,08

9


(Am

ount

in N

PR)

NM

B

Att

ribu

tabl

e to

equ

ity h

olde

rs o

f the

Ban

k

Part

icul

ars

Shar

e Ca

pita

lSh

are

prem

ium

Gen

eral

re

serv

eEx

chan

ge

equa

lisat

ion

rese

rve

Reg

ulat

ory

rese

rve

Fair

val

ue

rese

rve

Rev

alua

tion

Res

erve

Ret

aine

d ea

rnin

gOt

her

rese

rve

Tota

lN

on-c

ontr

ollin

g in

tere

stTo

tal e

quity

Bal

ance

at 1

5 Ju

ly 2

017

6,4

61,7

74,3

34

1,4

24,8

57,9

47

1,3

01,0

92,9

03

54,

642,

254

-

19,

731,

751

-

1,3

64,9

48,8

51

275

,212

,739

1

0,90

2,26

0,77

9 -

10

,902

,260

,779

Adj

ustm

ent/

Res

tate

men

t -

-

Tran

sfer

to C

apita

l Adj

ustm

ent F

und

-

-

-

-

-

-

-

(4,0

30,9

66)

4,0

30,9

66

-

-

-

Adj

uste

d/R

esta

ted

bala

nce

at 1

6 Ju

ly 2

017

6,46

1,77

4,33

4 1

,424

,857

,947

1

,301

,092

,903

5

4,64

2,25

4 -

1

9,73

1,75

1 -

1

,360

,917

,885

2

79,2

43,7

05

10,

902,

260,

779

-

10,

902,

260,

779

Com

preh

ensi

ve in

com

e fo

r th

e ye

ar 2

017-

18 -

-

Profi

t fo

r th

e ye

ar -

-

-

-

-

-

-

1

,853

,792

,753

-

1

,853

,792

,753

-

1

,853

,792

,753

Othe

r co

mpr

ehen

sive

inco

me,

net

of t

ax -

-

-

-

-

-

-

-

-

-

-

-

Gai

n/(L

oss)

from

Inve

stm

ent i

n Eq

uity

Inst

rum

ent

mea

sure

d at

Fai

r Val

ue -

-

-

-

-

(2

6,78

9,04

7) -

-

-

(2

6,78

9,04

7) -

(2

6,78

9,04

7)

Gai

n/(L

oss)

on

reva

luat

ion

-

-

-

-

-

-

-

-

-

-

-

-

Act

uria

l Gai

n/(L

oss)

on

defi n

ed b

enefi

t pl

ans

-

-

-

-

-

-

-

-

(17,

480,

123)

(17,

480,

123)

-

(17,

480,

123)

Gai

n/(L

oss)

on

Cash

Flo

w H

edge

-

-

-

-

-

-

-

-

-

-

-

-

Exch

ange

Gai

n/(L

osss

) (ar

isin

g fr

om tr

ansl

atin

g Fi

nan-

cial

Ass

ets

of F

orei

gn O

pera

tion)

-

-

-

-

-

-

-

-

-

-

-

-

Tota

l com

preh

ensi

ve in

com

e fo

r th

e ye

ar -

-

-

-

-

(2

6,78

9,04

7) -

1

,853

,792

,753

(1

7,48

0,12

3) 1

,809

,523

,583

-

1

,809

,523

,583

Tran

sfer

to re

serv

e du

ring

the

year

-

-

370

,758

,551

1

,731

,624

4

04,4

06,6

12

-

-

(878

,566

,159

) 1

01,6

69,3

72

-

-

-

Gen

eral

rese

rve

fund

-

-

370

,758

,551

-

-

-

-

(3

70,7

58,5

51)

-

-

-

-

Deb

entu

re re

dem

ptio

n re

serv

e -

-

-

-

-

-

-

(9

0,99

9,50

3) 9

0,99

9,50

3 -

-

-

Inve

stm

ent a

djus

tmen

t Res

erve

-

-

-

-

-

-

-

6,2

05,0

56

(6,2

05,0

56)

-

-

-

Exch

ange

fl uc

tuat

ion

rese

rve

-

-

-

1,7

31,6

24

-

-

-

(1,7

31,6

24)

-

-

-

-

Reg

ulat

ory

Res

erve

-

-

-

-

404

,406

,612

-

-

(4

04,4

06,6

12)

-

-

-

-

Corp

orat

e so

cial

resp

onsi

bilit

y fu

nd -

-

-

-

-

-

-

(1

6,87

4,92

6) 1

6,87

4,92

6 -

-

-

Tran

sfer

from

rese

rve

duri

ng th

e ye

ar -

-

-

-

-

-

-

3

,037

,118

(3

,037

,118

) -

-

-

Staff

Ski

ll D

evel

opm

ent F

und

-

-

-

-

-

-

-

3,0

37,1

18

(3,0

37,1

18)

-

-

-

Tran

sact

ions

with

ow

ners

, dire

ctly

reco

gnis

ed in

eq

uity

-

-

-

-

-

-

-

-

-

-

-

-

Shar

e Is

sued

-

-

-

-

-

-

-

-

-

-

-

-

FPO

Issu

ed a

nd A

llote

d 1

,141

,516

,300

-

-

-

-

-

-

-

-

1

,141

,516

,300

-

1

,141

,516

,300

Prem

ium

on

FPO

Issu

e -

2

,659

,732

,979

-

-

-

-

-

-

-

2

,659

,732

,979

-

2

,659

,732

,979

FPO

Issu

e Ex

pens

es (n

et o

ff ta

xes)

-

(23,

224,

340)

-

-

-

-

-

-

-

(23,

224,

340)

-

(23,

224,

340)

Shar

e ba

sed

paym

ents

-

-

-

-

-

-

-

-

-

-

-

-

Div

iden

ds to

equ

ity h

olde

rs -

-

-

-

-

-

-

-

-

-

-

-

Bon

us s

hare

s is

sued

-

-

-

-

-

-

-

-

-

-

-

-

Cash

div

iden

d pa

id -

-

-

-

-

-

-

-

-

-

-

-

Tota

l con

trib

utio

ns b

y an

d di

stri

butio

ns 1

,141

,516

,300

2

,636

,508

,639

-

-

-

-

-

-

-

3

,778

,024

,939

-

3

,778

,024

,939

Bal

ance

at 1

6 Ju

ly 2

018

7,6

03,2

90,6

34

4,0

61,3

66,5

86

1,6

71,8

51,4

54

56,

373,

878

404

,406

,612

(7

,057

,296

) -

2

,339

,181

,597

3

60,3

95,8

36

16,

489,

809,

301

-

16,

489,

809,

301

Bal

ance

at 1

7 Ju

ly 2

018

7,60

3,29

0,63

4 4

,061

,366

,586

1

,671

,851

,454

5

6,37

3,87

8 4

04,4

06,6

12

(7,0

57,2

96)

-

2,3

39,1

81,5

97

360

,395

,836

1

6,48

9,80

9,30

1 -

16

,489

,809

,301

Adj

ustm

ent/

Res

tate

men

t -

-

-

-

-

-

-

-

-

-

-

-

Prio

r Per

iod

Adj

ustm

ents

-

-

-

-

-

-

-

(1,2

16,7

22)

-

(1,2

16,7

22)

-

(1,2

16,7

22)

Adj

uste

d/R

esta

ted

bala

nce

at 1

7 Ju

ly 2

018

7,6

03,2

90,6

34

4,0

61,3

66,5

86

1,6

71,8

51,4

54

56,

373,

878

404

,406

,612

(7

,057

,296

) -

2

,337

,964

,875

3

60,3

95,8

36

16,

488,

592,

578

-

16,

488,

592,

578

Com

preh

ensi

ve in

com

e fo

r th

e ye

ar 2

018-

19 -

-

-

-

-

-

-

-

-

-

-

-

Profi

t fo

r th

e ye

ar -

-

-

-

-

-

-

2

,257

,276

,027

-

2

,257

,276

,027

-

2

,257

,276

,027

Othe

r co

mpr

ehen

sive

inco

me,

net

of t

ax -

-

-

-

-

-

-

-

-

-

-

-

Gai

n/(L

oss)

from

Inve

stm

ent i

n Eq

uity

Inst

rum

ent

mea

sure

d at

Fai

r Val

ue -

-

-

-

-

1

,513

,498

-

-

-

1

,513

,498

-

1

,513

,498

Gai

n/(L

oss)

on

reva

luat

ion

-

-

-

-

-

-

-

-

-

- -

-

Act

uria

l Gai

n/(L

oss)

on

defi n

ed b

enefi

t pl

ans

-

-

-

-

-

-

-

-

(888

,969

) (8

88,9

69)

-

(888

,969

)

Gai

n/(L

oss)

on

Cash

Flo

w H

edge

-

-

-

-

-

-

-

-

-

- -

-

Exch

ange

Gai

n/(L

osss

) (ar

isin

g fr

om tr

ansl

atin

g Fi

nan-

cial

Ass

ets

of F

orei

gn O

pera

tion)

-

-

-

-

-

-

-

-

-

-

-

-

Tota

l com

preh

ensi

ve in

com

e fo

r th

e ye

ar -

-

-

-

-

1

,513

,498

-

2

,257

,276

,027

(8

88,9

69)

2,2

57,9

00,5

56

-

2,2

57,9

00,5

56

Tran

sfer

to re

serv

e du

ring

the

year

-

-

451

,455

,205

2

2,00

3,09

3 4

14,3

26,4

52

-

-

(1,0

06,1

31,4

64)

118

,346

,713

-

-

-

Gen

eral

Res

erve

Fun

d -

-

4

51,4

55,2

05

-

-

-

-

(451

,455

,205

) -

-

-

-

Deb

entu

re R

edem

ptio

n R

eser

ve -

-

-

-

-

-

-

(9

0,45

2,51

1) 9

0,45

2,51

1 -

-

-

Inve

stm

ent A

djus

tmen

t Res

erve

-

-

-

-

-

-

-

-

-

-

-

-

Exch

ange

Flu

ctua

tion

Fund

-

-

-

22,

003,

093

-

-

-

(22,

003,

093)

-

-

-

-

Corp

orat

e So

cial

Res

pons

ibili

ty F

und

-

-

-

-

-

-

-

(16,

894,

202)

16,

894,

202

-

-

-

Cust

omer

Pro

tect

ion

Fund

-

-

-

-

-

-

-

-

-

-

-

-

Def

erre

d Ta

x R

eser

ve -

-

-

-

-

-

-

-

-

-

-

-

Shar

e ba

sed

paym

ents

-

-

-

-

-

-

-

-

-

-

-

-

Reg

ulat

ory

Res

erve

-

-

-

-

414

,326

,452

-

-

(4

14,3

26,4

52)

-

-

-

-

NM

B S

taff

Rel

ief F

und

-

-

-

-

-

-

-

(11,

000,

000)

11,

000,

000

-

-

-

Tran

sfer

from

rese

rve

duri

ng th

e ye

ar -

-

-

-

-

-

-

-

(1

,000

,000

) (1

,000

,000

) -

(1

,000

,000

)

Staff

Ski

ll D

evel

opm

ent F

und

-

-

-

-

-

-

-

-

-

-

-

-

NM

B S

taff

Rel

ief F

und

-

-

-

-

-

-

-

-

(1,0

00,0

00)

(1,0

00,0

00)

-

(1,0

00,0

00)

Tran

sact

ions

with

ow

ners

, dire

ctly

reco

gnis

ed in

eq

uity

-

-

-

-

-

-

-

-

-

-

-

-

Shar

e Is

sued

-

-

-

-

-

-

-

-

-

-

-

-

Prem

ium

Rec

eive

d fr

om F

MO

-

471

,569

,200

-

-

-

-

-

-

-

4

71,5

69,2

00

-

471

,569

,200

Shar

e Is

sue

Expe

nses

(net

off

taxe

s) -

(5

,265

,251

) -

-

-

-

-

-

-

(5

,265

,251

) -

(5

,265

,251

)

Shar

e ba

sed

paym

ents

-

-

-

-

-

-

-

-

-

-

-

Div

iden

ds to

equ

ity h

olde

rs -

-

-

-

-

-

-

-

-

-

-

-

Bon

us s

hare

s is

sued

2,0

14,8

72,0

18

(2,0

14,8

72,0

18)

-

-

-

-

-

-

-

-

-

-

Cash

div

iden

d pa

id -

-

-

-

-

-

-

(1

,808

,782

,825

) -

(1

,808

,782

,825

) -

(1

,808

,782

,825

)

Tota

l con

trib

utio

ns b

y an

d di

stri

butio

ns 2

,014

,872

,018

(1

,548

,568

,069

) -

-

-

-

-

(1

,808

,782

,825

) -

(1

,342

,478

,876

) -

(1

,342

,478

,876

)

Bal

ance

at 1

6 Ju

ly 2

019

9,6

18,1

62,6

52

2,5

12,7

98,5

17

2,1

23,3

06,6

59

78,

376,

972

818

,733

,064

(5

,543

,798

) -

1

,780

,326

,613

4

76,8

53,5

81

17,

403,

014,

259

-

17,

403,

014,

259

Cons

olid

ated

Sta

tem

ent o

f cha

nges

in e

quity

For t

he y

ear e

nded

31

Ash

ad, 2

076

(16

July

201

9)


Mri

dul P

araj

uli

Hea

d-Fi

nanc

e &

Pla

nnin

g

Suni

l KC

CEO

Paw

an K

umar

Gol

yan

Chai

rman

N

ico

Pijl

Dire

ctor

Suni

r K

umar

Dhu

ngel

Man

agin

g Pa

rtne

rSA

R A

ssoc

iate

sCh

arte

red

Acc

ount

ants

Raj

endr

a K

afl e

D

irect

or

Har

isch

andr

a Su

bedi

Dire

ctor

Prad

eep

Raj

Pan

dey

Dire

ctor

Nav

in M

anan

dhar

Chie

f Fin

ance

Offi

cer

Dat

e: S

unda

y, N

ovem

ber 1

0, 2

019

Plac

e: N

MB

Bha

wan

, Bab

arm

ahal

, Kat

hman

du

As

per o

ur a

ttach

ed re

port

of e

ven

date

(Am

ount

in N

PR)

NM

B

Att

ribu

tabl

e to

equ

ity h

olde

rs o

f the

Ban

k

Part

icul

ars

Shar

e Ca

pita

lSh

are

prem

ium

Gen

eral

re

serv

eEx

chan

ge

equa

lisat

ion

rese

rve

Reg

ulat

ory

rese

rve

Fair

val

ue

rese

rve

Rev

alua

tion

Res

erve

Ret

aine

d ea

rnin

gOt

her

rese

rve

Tota

lN

on-c

ontr

ollin

g in

tere

stTo

tal e

quity

Bal

ance

at 1

5 Ju

ly 2

017

6,4

61,7

74,3

34

1,4

24,8

57,9

47

1,3

01,0

92,9

03

54,

642,

254

-

19,

731,

751

-

1,3

64,9

48,8

51

275

,212

,739

1

0,90

2,26

0,77

9 -

10

,902

,260

,779

Adj

ustm

ent/

Res

tate

men

t -

-

Tran

sfer

to C

apita

l Adj

ustm

ent F

und

-

-

-

-

-

-

-

(4,0

30,9

66)

4,0

30,9

66

-

-

-

Adj

uste

d/R

esta

ted

bala

nce

at 1

6 Ju

ly 2

017

6,46

1,77

4,33

4 1

,424

,857

,947

1

,301

,092

,903

5

4,64

2,25

4 -

1

9,73

1,75

1 -

1

,360

,917

,885

2

79,2

43,7

05

10,

902,

260,

779

-

10,

902,

260,

779

Com

preh

ensi

ve in

com

e fo

r th

e ye

ar 2

017-

18 -

-

Profi

t fo

r th

e ye

ar -

-

-

-

-

-

-

1

,853

,792

,753

-

1

,853

,792

,753

-

1

,853

,792

,753

Othe

r co

mpr

ehen

sive

inco

me,

net

of t

ax -

-

-

-

-

-

-

-

-

-

-

-

Gai

n/(L

oss)

from

Inve

stm

ent i

n Eq

uity

Inst

rum

ent

mea

sure

d at

Fai

r Val

ue -

-

-

-

-

(2

6,78

9,04

7) -

-

-

(2

6,78

9,04

7) -

(2

6,78

9,04

7)

Gai

n/(L

oss)

on

reva

luat

ion

-

-

-

-

-

-

-

-

-

-

-

-

Act

uria

l Gai

n/(L

oss)

on

defi n

ed b

enefi

t pl

ans

-

-

-

-

-

-

-

-

(17,

480,

123)

(17,

480,

123)

-

(17,

480,

123)

Gai

n/(L

oss)

on

Cash

Flo

w H

edge

-

-

-

-

-

-

-

-

-

-

-

-

Exch

ange

Gai

n/(L

osss

) (ar

isin

g fr

om tr

ansl

atin

g Fi

nan-

cial

Ass

ets

of F

orei

gn O

pera

tion)

-

-

-

-

-

-

-

-

-

-

-

-

Tota

l com

preh

ensi

ve in

com

e fo

r th

e ye

ar -

-

-

-

-

(2

6,78

9,04

7) -

1

,853

,792

,753

(1

7,48

0,12

3) 1

,809

,523

,583

-

1

,809

,523

,583

Tran

sfer

to re

serv

e du

ring

the

year

-

-

370

,758

,551

1

,731

,624

4

04,4

06,6

12

-

-

(878

,566

,159

) 1

01,6

69,3

72

-

-

-

Gen

eral

rese

rve

fund

-

-

370

,758

,551

-

-

-

-

(3

70,7

58,5

51)

-

-

-

-

Deb

entu

re re

dem

ptio

n re

serv

e -

-

-

-

-

-

-

(9

0,99

9,50

3) 9

0,99

9,50

3 -

-

-

Inve

stm

ent a

djus

tmen

t Res

erve

-

-

-

-

-

-

-

6,2

05,0

56

(6,2

05,0

56)

-

-

-

Exch

ange

fl uc

tuat

ion

rese

rve

-

-

-

1,7

31,6

24

-

-

-

(1,7

31,6

24)

-

-

-

-

Reg

ulat

ory

Res

erve

-

-

-

-

404

,406

,612

-

-

(4

04,4

06,6

12)

-

-

-

-

Corp

orat

e so

cial

resp

onsi

bilit

y fu

nd -

-

-

-

-

-

-

(1

6,87

4,92

6) 1

6,87

4,92

6 -

-

-

Tran

sfer

from

rese

rve

duri

ng th

e ye

ar -

-

-

-

-

-

-

3

,037

,118

(3

,037

,118

) -

-

-

Staff

Ski

ll D

evel

opm

ent F

und

-

-

-

-

-

-

-

3,0

37,1

18

(3,0

37,1

18)

-

-

-

Tran

sact

ions

with

ow

ners

, dire

ctly

reco

gnis

ed in

eq

uity

-

-

-

-

-

-

-

-

-

-

-

-

Shar

e Is

sued

-

-

-

-

-

-

-

-

-

-

-

-

FPO

Issu

ed a

nd A

llote

d 1

,141

,516

,300

-

-

-

-

-

-

-

-

1

,141

,516

,300

-

1

,141

,516

,300

Prem

ium

on

FPO

Issu

e -

2

,659

,732

,979

-

-

-

-

-

-

-

2

,659

,732

,979

-

2

,659

,732

,979

FPO

Issu

e Ex

pens

es (n

et o

ff ta

xes)

-

(23,

224,

340)

-

-

-

-

-

-

-

(23,

224,

340)

-

(23,

224,

340)

Shar

e ba

sed

paym

ents

-

-

-

-

-

-

-

-

-

-

-

-

Div

iden

ds to

equ

ity h

olde

rs -

-

-

-

-

-

-

-

-

-

-

-

Bon

us s

hare

s is

sued

-

-

-

-

-

-

-

-

-

-

-

-

Cash

div

iden

d pa

id -

-

-

-

-

-

-

-

-

-

-

-

Tota

l con

trib

utio

ns b

y an

d di

stri

butio

ns 1

,141

,516

,300

2

,636

,508

,639

-

-

-

-

-

-

-

3

,778

,024

,939

-

3

,778

,024

,939

Bal

ance

at 1

6 Ju

ly 2

018

7,6

03,2

90,6

34

4,0

61,3

66,5

86

1,6

71,8

51,4

54

56,

373,

878

404

,406

,612

(7

,057

,296

) -

2

,339

,181

,597

3

60,3

95,8

36

16,

489,

809,

301

-

16,

489,

809,

301

Bal

ance

at 1

7 Ju

ly 2

018

7,60

3,29

0,63

4 4

,061

,366

,586

1

,671

,851

,454

5

6,37

3,87

8 4

04,4

06,6

12

(7,0

57,2

96)

-

2,3

39,1

81,5

97

360

,395

,836

1

6,48

9,80

9,30

1 -

16

,489

,809

,301

Adj

ustm

ent/

Res

tate

men

t -

-

-

-

-

-

-

-

-

-

-

-

Prio

r Per

iod

Adj

ustm

ents

-

-

-

-

-

-

-

(1,2

16,7

22)

-

(1,2

16,7

22)

-

(1,2

16,7

22)

Adj

uste

d/R

esta

ted

bala

nce

at 1

7 Ju

ly 2

018

7,6

03,2

90,6

34

4,0

61,3

66,5

86

1,6

71,8

51,4

54

56,

373,

878

404

,406

,612

(7

,057

,296

) -

2

,337

,964

,875

3

60,3

95,8

36

16,

488,

592,

578

-

16,

488,

592,

578

Com

preh

ensi

ve in

com

e fo

r th

e ye

ar 2

018-

19 -

-

-

-

-

-

-

-

-

-

-

-

Profi

t fo

r th

e ye

ar -

-

-

-

-

-

-

2

,257

,276

,027

-

2

,257

,276

,027

-

2

,257

,276

,027

Othe

r co

mpr

ehen

sive

inco

me,

net

of t

ax -

-

-

-

-

-

-

-

-

-

-

-

Gai

n/(L

oss)

from

Inve

stm

ent i

n Eq

uity

Inst

rum

ent

mea

sure

d at

Fai

r Val

ue -

-

-

-

-

1

,513

,498

-

-

-

1

,513

,498

-

1

,513

,498

Gai

n/(L

oss)

on

reva

luat

ion

-

-

-

-

-

-

-

-

-

- -

-

Act

uria

l Gai

n/(L

oss)

on

defi n

ed b

enefi

t pl

ans

-

-

-

-

-

-

-

-

(888

,969

) (8

88,9

69)

-

(888

,969

)

Gai

n/(L

oss)

on

Cash

Flo

w H

edge

-

-

-

-

-

-

-

-

-

- -

-

Exch

ange

Gai

n/(L

osss

) (ar

isin

g fr

om tr

ansl

atin

g Fi

nan-

cial

Ass

ets

of F

orei

gn O

pera

tion)

-

-

-

-

-

-

-

-

-

-

-

-

Tota

l com

preh

ensi

ve in

com

e fo

r th

e ye

ar -

-

-

-

-

1

,513

,498

-

2

,257

,276

,027

(8

88,9

69)

2,2

57,9

00,5

56

-

2,2

57,9

00,5

56

Tran

sfer

to re

serv

e du

ring

the

year

-

-

451

,455

,205

2

2,00

3,09

3 4

14,3

26,4

52

-

-

(1,0

06,1

31,4

64)

118

,346

,713

-

-

-

Gen

eral

Res

erve

Fun

d -

-

4

51,4

55,2

05

-

-

-

-

(451

,455

,205

) -

-

-

-

Deb

entu

re R

edem

ptio

n R

eser

ve -

-

-

-

-

-

-

(9

0,45

2,51

1) 9

0,45

2,51

1 -

-

-

Inve

stm

ent A

djus

tmen

t Res

erve

-

-

-

-

-

-

-

-

-

-

-

-

Exch

ange

Flu

ctua

tion

Fund

-

-

-

22,

003,

093

-

-

-

(22,

003,

093)

-

-

-

-

Corp

orat

e So

cial

Res

pons

ibili

ty F

und

-

-

-

-

-

-

-

(16,

894,

202)

16,

894,

202

-

-

-

Cust

omer

Pro

tect

ion

Fund

-

-

-

-

-

-

-

-

-

-

-

-

Def

erre

d Ta

x R

eser

ve -

-

-

-

-

-

-

-

-

-

-

-

Shar

e ba

sed

paym

ents

-

-

-

-

-

-

-

-

-

-

-

-

Reg

ulat

ory

Res

erve

-

-

-

-

414

,326

,452

-

-

(4

14,3

26,4

52)

-

-

-

-

NM

B S

taff

Rel

ief F

und

-

-

-

-

-

-

-

(11,

000,

000)

11,

000,

000

-

-

-

Tran

sfer

from

rese

rve

duri

ng th

e ye

ar -

-

-

-

-

-

-

-

(1

,000

,000

) (1

,000

,000

) -

(1

,000

,000

)

Staff

Ski

ll D

evel

opm

ent F

und

-

-

-

-

-

-

-

-

-

-

-

-

NM

B S

taff

Rel

ief F

und

-

-

-

-

-

-

-

-

(1,0

00,0

00)

(1,0

00,0

00)

-

(1,0

00,0

00)

Tran

sact

ions

with

ow

ners

, dire

ctly

reco

gnis

ed in

eq

uity

-

-

-

-

-

-

-

-

-

-

-

-

Shar

e Is

sued

-

-

-

-

-

-

-

-

-

-

-

-

Prem

ium

Rec

eive

d fr

om F

MO

-

471

,569

,200

-

-

-

-

-

-

-

4

71,5

69,2

00

-

471

,569

,200

Shar

e Is

sue

Expe

nses

(net

off

taxe

s) -

(5

,265

,251

) -

-

-

-

-

-

-

(5

,265

,251

) -

(5

,265

,251

)

Shar

e ba

sed

paym

ents

-

-

-

-

-

-

-

-

-

-

-

Div

iden

ds to

equ

ity h

olde

rs -

-

-

-

-

-

-

-

-

-

-

-

Bon

us s

hare

s is

sued

2,0

14,8

72,0

18

(2,0

14,8

72,0

18)

-

-

-

-

-

-

-

-

-

-

Cash

div

iden

d pa

id -

-

-

-

-

-

-

(1

,808

,782

,825

) -

(1

,808

,782

,825

) -

(1

,808

,782

,825

)

Tota

l con

trib

utio

ns b

y an

d di

stri

butio

ns 2

,014

,872

,018

(1

,548

,568

,069

) -

-

-

-

-

(1

,808

,782

,825

) -

(1

,342

,478

,876

) -

(1

,342

,478

,876

)

Bal

ance

at 1

6 Ju

ly 2

019

9,6

18,1

62,6

52

2,5

12,7

98,5

17

2,1

23,3

06,6

59

78,

376,

972

818

,733

,064

(5

,543

,798

) -

1

,780

,326

,613

4

76,8

53,5

81

17,

403,

014,

259

-

17,

403,

014,

259


Cons

olid

ated

Sta

tem

ent o

f cas

h fl o

ws

For t

he y

ear e

nded

31

Ash

ad, 2

076

(16

July

201

9)

(Am

ount

in N

PR)

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

20

76Ye

ar e

nded

32

Ash

ad

2075

Year

end

ed 3

1 A

shad

20

76Ye

ar e

nded

32

Ash

ad

2075

CASH

FLO

WS

FROM

OPE

RAT

ING

ACT

IVIT

IES

Inte

rest

rece

ived

10,

546,

876,

485

8,7

94,9

88,5

34

10,

029,

237,

559

8,3

64,8

73,0

36

Fees

and

oth

er in

com

e re

ceiv

ed 1

,132

,864

,080

9

29,7

87,3

87

970

,870

,892

7

90,3

04,1

14

Div

iden

d re

ceiv

ed -

-

-

-

Rec

eipt

s fr

om o

ther

ope

ratin

g ac

tiviti

es 3

85,7

14,3

92

358

,041

,840

3

84,7

75,8

61

357

,555

,417

Inte

rest

pai

d (6

,823

,042

,020

) (6

,039

,527

,238

) (6

,561

,973

,326

) (5

,828

,082

,883

)

Com

mis

sion

and

fees

pai

d (9

3,95

5,27

0) (6

9,92

6,83

8) (9

3,95

5,27

0) (6

2,70

8,02

7)

Cash

pay

men

t to

empl

oyee

s (1

,456

,045

,782

) (1

,147

,047

,730

) (1

,295

,324

,891

) (1

,013

,279

,499

)

Othe

r ex

pens

e pa

id (7

67,5

92,5

73)

(669

,041

,524

) (7

00,3

90,0

33)

(613

,344

,690

)

Oper

atin

g ca

sh fl

ows b

efor

e ch

ange

s in

oper

atin

g as

sets

and

liabi

litie

s 2

,924

,819

,312

2

,157

,274

,431

2

,733

,240

,793

1

,995

,317

,467

(Incr

ease

)/D

ecre

ase

in o

pera

ting

asse

tsD

ue fr

om N

epal

Ras

tra

Ban

k (3

,970

,076

,184

) 2

,387

,693

,785

(3

,978

,276

,184

) 2

,402

,193

,785

Plac

emen

t with

ban

k an

d fi n

anci

al in

stitu

tions

(2,2

65,2

15,1

35)

338

,994

,868

(2

,265

,215

,135

) 4

06,8

87,9

94

Othe

r tra

ding

ass

ets

(18,

670,

000)

(23,

440,

000)

(18,

670,

000)

(23,

440,

000)

Loan

and

adv

ance

s to

ban

k an

d fi n

ancia

l inst

itutio

ns (8

17,7

37,7

63)

(634

,657

,961

) (8

17,7

37,7

63)

(634

,657

,961

)

Loan

s an

d ad

vanc

es to

cus

tom

ers

(16,

428,

761,

736)

(13,

044,

839,

083)

(15,

509,

016,

343)

(12,

646,

608,

128)

Othe

r ass

ets

3,5

53,0

83,7

97

(2,8

61,3

59,6

68)

3,5

73,4

49,1

98

(2,8

68,3

10,5

88)

Tota

l (1

9,94

7,37

7,02

1) (1

3,83

7,60

8,06

0) (1

9,01

5,46

6,22

8) (1

3,36

3,93

4,89

9)In

crea

se/(

Dec

reas

e) in

ope

ratin

g lia

bilit

ies

Due

to b

ank

and

fi nan

cial

inst

itutio

ns (4

11,9

03,9

55)

129

,872

,956

(4

11,9

03,9

55)

129

,872

,956

Due

to N

epal

Ras

tra

Ban

k 2

,531

,451

,431

(4

50,4

87,1

59)

2,5

43,4

51,4

31

(450

,487

,159

)

Dep

osit

from

cus

tom

ers

14,

395,

099,

867

11,

945,

557,

284

13,

921,

434,

748

11,

653,

200,

615

Bor

row

ings

3,7

58,1

94,0

83

141

,151

,539

3

,468

,060

,000

(5

5,34

7,30

8)

Othe

r lia

bilit

ies

382

,545

,373

2

,033

,609

,256

3

87,4

20,1

14

2,2

23,1

42,4

70

Net

cas

h fl o

w fr

om o

pera

ting

activ

ities

bef

ore

tax

paid

20,

655,

386,

800

13,

799,

703,

876

19,

908,

462,

338

13,

500,

381,

574

Inco

me

taxe

s pa

id (1

,172

,181

,378

) (6

64,9

74,6

13)

(1,1

25,4

13,4

72)

(633

,132

,526

)

Net

cas

h fl o

w fr

om o

pera

ting

activ

ities

2,4

60,6

47,7

13

1,4

54,3

95,6

34

2,5

00,8

23,4

32

1,4

98,6

31,6

16

CASH

FLO

WS

FROM

INVE

STIN

G A

CTIV

ITIE

SPu

rcha

se o

f inv

estm

ent s

ecur

ities

(4,8

34,2

68,8

27)

(10,

521,

875,

476)

(4,8

34,2

68,8

27)

(10,

401,

270,

740)

Rec

eipt

s fr

om s

ale

of in

vest

men

t sec

uriti

es 4

,292

,200

,326

8

,381

,577

,243

4

,351

,536

,812

8

,377

,760

,162

Purc

hase

of p

rope

rty

and

equi

pmen

t (2

10,5

92,0

07)

(284

,530

,625

) (1

99,1

77,7

63)

(268

,775

,840

)

Rec

eipt

from

the

sale

of p

rope

rty

and

equi

pmen

t 9

2,58

4,08

5 1

1,58

3,87

9 9

2,02

2,56

8 1

0,58

3,52

5

Purc

hase

of i

ntan

gibl

e as

sets

(107

,102

,744

) (1

2,88

8,79

8) (1

06,4

55,2

82)

(12,

210,

798)

Rec

eipt

from

the

sale

of i

ntan

gibl

e as

sets

-

-

-

-

Purc

hase

of i

nves

tmen

t pro

pert

ies

(53,

480,

759)

-

(53,

480,

759)

-

Rec

eipt

from

the

sale

of i

nves

tmen

t pro

pert

ies

10,

844,

000

73,

597,

200

10,

844,

000

73,

597,

200

Inve

stm

ent i

n su

bsid

iarie

s, a

ssoc

iate

s &

join

t ven

ture

s -

(1

00,0

00,0

00)

-

(100

,000

,000

)

Inte

rest

rece

ived

660

,235

,537

3

84,3

17,7

55

660

,235

,537

3

84,3

17,7

55

Div

iden

d re

ceiv

ed 7

1,02

0,75

8 1

34,1

00,1

60

71,

020,

758

132

,758

,055

Net

cas

h us

ed in

inve

stin

g ac

tiviti

es (7

8,55

9,63

2) (1

,934

,118

,662

) (7

,722

,956

) (1

,803

,240

,682

)

CASH

FLO

WS

FROM

FIN

AN

CIN

G A

CTIV

ITIE

SR

ecei

pt fr

om is

sue

of d

ebt s

ecur

ities

1,6

84,5

05,0

00

-

1,6

84,5

05,0

00

-

Rep

aym

ent o

f deb

t sec

uriti

es -

-

-

-

Rec

eipt

from

issu

e of

sub

ordi

nate

d lia

bilit

ies

-

-

-

-

Rep

aym

ent o

f sub

ordi

nate

d lia

bilit

ies

-

-

-

-

Rec

eipt

from

issu

e of

sha

res

466

,303

,949

1

00,0

00,0

00

466

,303

,949

-

Div

iden

ds p

aid

(1,8

57,0

83,5

70)

(128

,628

,002

) (1

,815

,971

,398

) (2

1,88

1,95

0)

Inte

rest

pai

d -

-

-

-

Othe

r rec

eipt

/pay

men

t 1

3,30

1,50

0 -

-

-

Net

cas

h fr

om fi

nanc

ing

activ

ities

307

,026

,879

(2

8,62

8,00

2) 3

34,8

37,5

50

(21,

881,

950)

Net

incr

ease

(dec

reas

e) in

cas

h an

d ca

sh e

quiv

alen

ts 2

,689

,114

,960

(5

08,3

51,0

31)

2,8

27,9

38,0

26

(326

,491

,015

)Ca

sh a

nd c

ash

equi

vale

nts

at th

e be

ginn

ing

of th

e ye

ar 6

,024

,619

,332

6

,458

,150

,739

5

,180

,404

,105

5

,499

,968

,622

Cash

and

cas

h eq

uiva

lent

s ac

quire

d fr

om th

e m

erge

r -

-

-

-

Eff e

ct o

f exc

hang

e ra

te fl

uctu

atio

ns o

n ca

sh a

nd c

ash

equi

vale

nts

held

88,

012,

372

6,9

26,4

98

88,

012,

372

6,9

26,4

98

Cash

and

cas

h eq

uiva

lent

s at

the

end

of th

e ye

ar 8

,801

,746

,664

5

,956

,726

,206

8

,096

,354

,503

5

,180

,404

,105


Mri

dul P

araj

uli

Hea

d-Fi

nanc

e &

Pla

nnin

g

Suni

l KC

CEO

Paw

an K

umar

Gol

yan

Chai

rman

N

ico

Pijl

Dire

ctor

Suni

r K

umar

Dhu

ngel

Man

agin

g Pa

rtne

rSA

R A

ssoc

iate

sCh

arte

red

Acc

ount

ants

Raj

endr

a K

afl e

D

irect

or

Har

isch

andr

a Su

bedi

Dire

ctor

Prad

eep

Raj

Pan

dey

Dire

ctor

Nav

in M

anan

dhar

Chie

f Fin

ance

Offi

cer

Dat

e: S

unda

y, N

ovem

ber 1

0, 2

019

Plac

e: N

MB

Bha

wan

, Bab

arm

ahal

, Kat

hman

du

As

per o

ur a

ttach

ed re

port

of e

ven

date

(Am

ount

in N

PR)

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

20

76Ye

ar e

nded

32

Ash

ad

2075

Year

end

ed 3

1 A

shad

20

76Ye

ar e

nded

32

Ash

ad

2075

CASH

FLO

WS

FROM

OPE

RAT

ING

ACT

IVIT

IES

Inte

rest

rece

ived

10,

546,

876,

485

8,7

94,9

88,5

34

10,

029,

237,

559

8,3

64,8

73,0

36

Fees

and

oth

er in

com

e re

ceiv

ed 1

,132

,864

,080

9

29,7

87,3

87

970

,870

,892

7

90,3

04,1

14

Div

iden

d re

ceiv

ed -

-

-

-

Rec

eipt

s fr

om o

ther

ope

ratin

g ac

tiviti

es 3

85,7

14,3

92

358

,041

,840

3

84,7

75,8

61

357

,555

,417

Inte

rest

pai

d (6

,823

,042

,020

) (6

,039

,527

,238

) (6

,561

,973

,326

) (5

,828

,082

,883

)

Com

mis

sion

and

fees

pai

d (9

3,95

5,27

0) (6

9,92

6,83

8) (9

3,95

5,27

0) (6

2,70

8,02

7)

Cash

pay

men

t to

empl

oyee

s (1

,456

,045

,782

) (1

,147

,047

,730

) (1

,295

,324

,891

) (1

,013

,279

,499

)

Othe

r ex

pens

e pa

id (7

67,5

92,5

73)

(669

,041

,524

) (7

00,3

90,0

33)

(613

,344

,690

)

Oper

atin

g ca

sh fl

ows b

efor

e ch

ange

s in

oper

atin

g as

sets

and

liabi

litie

s 2

,924

,819

,312

2

,157

,274

,431

2

,733

,240

,793

1

,995

,317

,467

(Incr

ease

)/D

ecre

ase

in o

pera

ting

asse

tsD

ue fr

om N

epal

Ras

tra

Ban

k (3

,970

,076

,184

) 2

,387

,693

,785

(3

,978

,276

,184

) 2

,402

,193

,785

Plac

emen

t with

ban

k an

d fi n

anci

al in

stitu

tions

(2,2

65,2

15,1

35)

338

,994

,868

(2

,265

,215

,135

) 4

06,8

87,9

94

Othe

r tra

ding

ass

ets

(18,

670,

000)

(23,

440,

000)

(18,

670,

000)

(23,

440,

000)

Loan

and

adv

ance

s to

ban

k an

d fi n

ancia

l inst

itutio

ns (8

17,7

37,7

63)

(634

,657

,961

) (8

17,7

37,7

63)

(634

,657

,961

)

Loan

s an

d ad

vanc

es to

cus

tom

ers

(16,

428,

761,

736)

(13,

044,

839,

083)

(15,

509,

016,

343)

(12,

646,

608,

128)

Othe

r ass

ets

3,5

53,0

83,7

97

(2,8

61,3

59,6

68)

3,5

73,4

49,1

98

(2,8

68,3

10,5

88)

Tota

l (1

9,94

7,37

7,02

1) (1

3,83

7,60

8,06

0) (1

9,01

5,46

6,22

8) (1

3,36

3,93

4,89

9)In

crea

se/(

Dec

reas

e) in

ope

ratin

g lia

bilit

ies

Due

to b

ank

and

fi nan

cial

inst

itutio

ns (4

11,9

03,9

55)

129

,872

,956

(4

11,9

03,9

55)

129

,872

,956

Due

to N

epal

Ras

tra

Ban

k 2

,531

,451

,431

(4

50,4

87,1

59)

2,5

43,4

51,4

31

(450

,487

,159

)

Dep

osit

from

cus

tom

ers

14,

395,

099,

867

11,

945,

557,

284

13,

921,

434,

748

11,

653,

200,

615

Bor

row

ings

3,7

58,1

94,0

83

141

,151

,539

3

,468

,060

,000

(5

5,34

7,30

8)

Othe

r lia

bilit

ies

382

,545

,373

2

,033

,609

,256

3

87,4

20,1

14

2,2

23,1

42,4

70

Net

cas

h fl o

w fr

om o

pera

ting

activ

ities

bef

ore

tax

paid

20,

655,

386,

800

13,

799,

703,

876

19,

908,

462,

338

13,

500,

381,

574

Inco

me

taxe

s pa

id (1

,172

,181

,378

) (6

64,9

74,6

13)

(1,1

25,4

13,4

72)

(633

,132

,526

)

Net

cas

h fl o

w fr

om o

pera

ting

activ

ities

2,4

60,6

47,7

13

1,4

54,3

95,6

34

2,5

00,8

23,4

32

1,4

98,6

31,6

16

CASH

FLO

WS

FROM

INVE

STIN

G A

CTIV

ITIE

SPu

rcha

se o

f inv

estm

ent s

ecur

ities

(4,8

34,2

68,8

27)

(10,

521,

875,

476)

(4,8

34,2

68,8

27)

(10,

401,

270,

740)

Rec

eipt

s fr

om s

ale

of in

vest

men

t sec

uriti

es 4

,292

,200

,326

8

,381

,577

,243

4

,351

,536

,812

8

,377

,760

,162

Purc

hase

of p

rope

rty

and

equi

pmen

t (2

10,5

92,0

07)

(284

,530

,625

) (1

99,1

77,7

63)

(268

,775

,840

)

Rec

eipt

from

the

sale

of p

rope

rty

and

equi

pmen

t 9

2,58

4,08

5 1

1,58

3,87

9 9

2,02

2,56

8 1

0,58

3,52

5

Purc

hase

of i

ntan

gibl

e as

sets

(107

,102

,744

) (1

2,88

8,79

8) (1

06,4

55,2

82)

(12,

210,

798)

Rec

eipt

from

the

sale

of i

ntan

gibl

e as

sets

-

-

-

-

Purc

hase

of i

nves

tmen

t pro

pert

ies

(53,

480,

759)

-

(53,

480,

759)

-

Rec

eipt

from

the

sale

of i

nves

tmen

t pro

pert

ies

10,

844,

000

73,

597,

200

10,

844,

000

73,

597,

200

Inve

stm

ent i

n su

bsid

iarie

s, a

ssoc

iate

s &

join

t ven

ture

s -

(1

00,0

00,0

00)

-

(100

,000

,000

)

Inte

rest

rece

ived

660

,235

,537

3

84,3

17,7

55

660

,235

,537

3

84,3

17,7

55

Div

iden

d re

ceiv

ed 7

1,02

0,75

8 1

34,1

00,1

60

71,

020,

758

132

,758

,055

Net

cas

h us

ed in

inve

stin

g ac

tiviti

es (7

8,55

9,63

2) (1

,934

,118

,662

) (7

,722

,956

) (1

,803

,240

,682

)

CASH

FLO

WS

FROM

FIN

AN

CIN

G A

CTIV

ITIE

SR

ecei

pt fr

om is

sue

of d

ebt s

ecur

ities

1,6

84,5

05,0

00

-

1,6

84,5

05,0

00

-

Rep

aym

ent o

f deb

t sec

uriti

es -

-

-

-

Rec

eipt

from

issu

e of

sub

ordi

nate

d lia

bilit

ies

-

-

-

-

Rep

aym

ent o

f sub

ordi

nate

d lia

bilit

ies

-

-

-

-

Rec

eipt

from

issu

e of

sha

res

466

,303

,949

1

00,0

00,0

00

466

,303

,949

-

Div

iden

ds p

aid

(1,8

57,0

83,5

70)

(128

,628

,002

) (1

,815

,971

,398

) (2

1,88

1,95

0)

Inte

rest

pai

d -

-

-

-

Othe

r rec

eipt

/pay

men

t 1

3,30

1,50

0 -

-

-

Net

cas

h fr

om fi

nanc

ing

activ

ities

307

,026

,879

(2

8,62

8,00

2) 3

34,8

37,5

50

(21,

881,

950)

Net

incr

ease

(dec

reas

e) in

cas

h an

d ca

sh e

quiv

alen

ts 2

,689

,114

,960

(5

08,3

51,0

31)

2,8

27,9

38,0

26

(326

,491

,015

)Ca

sh a

nd c

ash

equi

vale

nts

at th

e be

ginn

ing

of th

e ye

ar 6

,024

,619

,332

6

,458

,150

,739

5

,180

,404

,105

5

,499

,968

,622

Cash

and

cas

h eq

uiva

lent

s ac

quire

d fr

om th

e m

erge

r -

-

-

-

Eff e

ct o

f exc

hang

e ra

te fl

uctu

atio

ns o

n ca

sh a

nd c

ash

equi

vale

nts

held

88,

012,

372

6,9

26,4

98

88,

012,

372

6,9

26,4

98

Cash

and

cas

h eq

uiva

lent

s at

the

end

of th

e ye

ar 8

,801

,746

,664

5

,956

,726

,206

8

,096

,354

,503

5

,180

,404

,105


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Cash

and

cas

h eq

uiva

lent

4.1

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Cash

in h

and

2,4

52,2

63,1

34

2,4

09,7

35,3

09

2,4

52,1

31,8

79

2,4

09,7

17,7

58

Bal

ance

s w

ith B

/FIs

1,6

14,4

83,0

63

1,5

95,7

55,2

50

909

,222

,157

8

19,4

50,7

00

Mon

ey a

t cal

l and

sho

rt n

otic

e 5

22,9

36,2

77

236

,768

,728

5

22,9

36,2

77

236

,768

,728

Othe

r 4

,212

,064

,190

1

,714

,466

,919

4

,212

,064

,190

1

,714

,466

,919

Tota

l 8

,801

,746

,664

5

,956

,726

,206

8

,096

,354

,503

5

,180

,404

,105

Due

from

Nep

al R

astr

a B

ank

4.2

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Stat

utor

y ba

lanc

es w

ith N

RB

8,2

68,5

66,4

42

5,1

60,5

83,5

04

8,2

52,5

36,4

42

5,1

36,3

53,5

04

Secu

ritie

s pu

rcha

sed

unde

r res

ale

agre

emen

t -

-

-

-

Othe

r dep

osit

and

rece

ivab

le fr

om N

RB

2,5

76,6

45,1

41

1,7

04,1

57,4

33

2,5

76,6

45,1

41

2,1

23,8

41,0

56

Tota

l 1

0,84

5,21

1,58

4 6

,864

,740

,937

1

0,82

9,18

1,58

4 7

,260

,194

,560

The

fair

valu

e of

cas

h is

the

carr

ying

am

ount

. Cas

h an

d ca

sh e

quiv

alen

t com

pris

e th

e to

tal a

mou

nt o

f cas

h-in

-han

d, b

alan

ces

with

oth

er b

ank

and

fi nan

cial

inst

itutio

ns, m

oney

at c

all a

nd

shor

t not

ice,

trea

sury

bill

s an

d pl

acem

ents

hav

ing

orig

inal

mat

urity

of t

hree

mon

ths

or le

ss th

an th

ree

mon

ths.

Cash

at v

ault

is a

dequ

atel

y in

sure

d fo

r phy

sica

l and

fi na

ncia

l ris

ks. T

he a

mou

nt o

f cas

h at

vau

lt is

mai

ntai

ned

on th

e ba

sis

of th

e re

gula

tory

, liq

uidi

ty a

nd b

usin

ess

requ

irem

ents

. Cas

h he

ld

in F

CY is

sub

ject

to r

isk

of c

hang

es in

the

fore

ign

exch

ange

rat

es. T

hese

are

clo

sely

mon

itore

d, a

nd r

isks

, if i

dent

ifi ed

, are

pro

mpt

ly m

anag

ed. T

he in

com

e on

thes

e as

sets

is c

redi

ted

to

stat

emen

t of p

rofi t

or l

oss

unde

r int

eres

t inc

ome.

The

fair

valu

e of

bal

ance

with

the

cent

ral b

ank

and

othe

r dep

osits

at N

RB

is th

e ca

rryi

ng a

mou

nt.

Bal

ance

with

the

cent

ral b

ank

is p

rinci

pally

mai

ntai

ned

as a

par

t of t

he re

gula

tory

cas

h re

serv

e ra

tio re

quire

d by

the

cent

ral b

ank.

The

re a

re re

gula

tory

and

liqu

idity

rest

rictio

ns p

lace

d on

th

e le

vel o

f bal

ance

with

the

cent

ral b

ank.

The

oth

er re

ceiv

able

from

NR

B is

rece

ivab

le o

f Li.K

a A

ccou

nts

(con

tra)

of G

over

nmen

t bod

ies.

Due

from

Nep

al R

astr

a B

ank

is s

ubse

quen

tly a

lso

mea

sure

d at

am

ortis

ed c

ost.


Der

ivat

ives

are

fi na

ncia

l ins

trum

ents

that

der

ive

thei

r val

ue in

resp

onse

to c

hang

es in

inte

rest

rate

s, fi

nanc

ial i

nstr

umen

t pric

es e

tc.A

ll de

rivat

ives

are

initi

ally

reco

gnis

ed a

nd s

ubse

quen

tly

mea

sure

d at

fair

valu

e, w

ith a

ll tr

adin

g ga

ins

or lo

sses

rec

ogni

sed

in th

e St

atem

ent o

f Pro

fi t o

r Lo

ss u

nder

Net

trad

ing

Inco

me.

Fai

r va

lue

is d

eter

min

ed u

sing

the

forw

ard

mar

ket r

ates

ru

ling

on th

e re

port

ing

date

.

Plac

emen

ts w

ith B

ank

and

Fina

ncia

l Ins

titui

tions

4.3

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Plac

emen

t with

dom

estic

B/F

Is -

-

Plac

emen

t with

fore

ign

B/F

Is

2,1

72,9

67,2

39

276

,407

,171

2

,172

,967

,239

2

76,4

07,1

71

Less

: Allo

wan

ces

for i

mpa

irmen

t -

-

-

-

Tota

l 2

,172

,967

,239

2

76,4

07,1

71

2,1

72,9

67,2

39

276

,407

,171

Der

ivat

ive

fi nan

cial

inst

rum

ents

4.4

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Hel

d fo

r tr

adin

g

Inte

rest

rate

sw

ap -

-

-

-

Curr

ency

sw

ap 1

,899

,469

,355

1

,392

,798

,943

1

,899

,469

,355

1

,392

,798

,943

Forw

ard

exch

ange

con

trac

t 6

,139

,923

,883

5

,331

,619

,218

6

,139

,923

,883

5

,331

,619

,218

Othe

rs 5

56,0

89,0

44

782

,333

,323

5

56,0

89,0

44

782

,333

,323

Hel

d fo

r ri

sk m

anag

emen

t

Inte

rest

rate

sw

ap -

-

-

-

Curr

ency

sw

ap -

-

-

-

Forw

ard

exch

ange

con

trac

t -

-

-

-

Othe

r -

-

-

-

Tota

l 8

,595

,482

,282

7

,506

,751

,485

8

,595

,482

,282

7

,506

,751

,485

Thes

e as

sets

are

mea

sure

d at

am

ortis

ed c

osts

. Ris

ks a

ssoc

iate

d w

ith th

ese

asse

ts a

re re

gula

rly a

sses

sed.

The

se a

re in

tere

st b

earin

g ad

vanc

es a

nd th

e in

com

e on

thes

e as

sets

is c

redi

ted

to s

tate

men

t of p

rofi t

or l

oss

unde

r int

eres

t inc

ome.


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Othe

r tr

adin

g as

sets

4.5

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Teas

ury

bills

-

-

-

-

Gov

ernm

ent b

onds

340

,390

,000

3

21,7

20,0

00

340

,390

,000

3

21,7

20,0

00

NR

B B

onds

-

-

-

-

Dom

estic

Cor

pora

te b

onds

-

-

-

-

Equi

ties

-

-

-

-

Othe

r -

-

-

-

Tota

l 3

40,3

90,0

00

321

,720

,000

3

40,3

90,0

00

321

,720

,000

Pled

ged

-

-

-

-

Non

-ple

dged

340

,390

,000

3

21,7

20,0

00

340

,390

,000

3

21,7

20,0

00

Loan

and

adv

ance

s to

B/F

Is

4.6

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Loan

s to

mic

rofi n

ance

inst

itutio

ns 3

,352

,109

,972

2

,522

,765

,611

3

,352

,109

,972

2

,522

,765

,611

Othe

r -

-

-

-

Less

: Allo

wan

ces

for i

mpa

irmen

t 3

4,14

7,98

5 2

5,19

7,84

2 3

4,14

7,98

5 2

5,19

7,84

2

Tota

l 3

,317

,961

,987

2

,497

,567

,769

3

,317

,961

,987

2

,497

,567

,769

Citiz

ens

Savi

ng C

ertifi

cat

es a

re p

urch

ased

by

the

bank

und

er M

arke

t Mak

er P

roce

dure

, 207

0 is

sued

by

the

Nep

al R

astr

a B

ank.

The

se in

stru

men

ts a

re p

urch

ased

and

sol

d by

the

bank

und

er

mar

ket p

roce

dure

with

out a

ny in

tent

ion

to h

old

it til

l mat

urity

. The

fair

valu

e of

thes

e CS

Cs g

ener

ally

app

roxi

mat

es th

e ca

rryi

ng a

mou

nt.

Loan

and

adv

ance

s gi

ven

to m

icro

fi nan

ce fi

nanc

ial i

nstit

utio

ns a

s de

priv

ed s

ecto

r len

ding

is p

rese

nted

und

er th

is h

ead

ast e

r pr

ovid

ing

requ

ired

impa

irmen

t allo

wan

ces.

The

se a

sset

s ar

e su

bseq

uent

ly m

easu

red

at a

mor

tised

cos

ts. R

isks

ass

ocia

ted

with

thes

e as

sets

are

reg

ular

ly a

sses

sed.

The

se a

re in

tere

st

bear

ing

adva

nces

and

the

inco

me

on th

ese

asse

ts is

cre

dite

d to

sta

tem

ent o

f pro

fi t o

r los

s un

der i

nter

est i

ncom

e.


4.6.

1: A

llow

ance

s fo

r im

pair

men

t

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Bal

ance

at S

hraw

an 1

25,

197,

842

18,

851,

263

25,

197,

842

18,

851,

263

Impa

irmen

t los

s fo

r the

yea

r: -

-

-

-

Char

ge fo

r the

yea

r 8

,950

,143

6

,346

,580

8

,950

,143

6

,346

,580

Rec

over

ies/

reve

rsal

-

-

-

-

Am

ount

writ

ten

off

-

-

-

-

Bal

ance

at A

shad

end

34,

147,

985

25,

197,

842

34,

147,

985

25,

197,

842

Loan

s an

d ad

vanc

es to

cus

tom

ers

4.7

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Loan

and

adv

ance

s m

easu

red

at a

mor

tized

cos

t 9

2,44

3,68

0,80

1 7

5,67

8,27

1,32

1 8

9,84

9,80

8,82

5 7

3,91

9,22

6,70

6

Less

: Im

pairm

ent a

llow

ance

s -

-

Colle

ctiv

e im

pairm

ent

993

,674

,668

8

43,4

04,1

46

977

,833

,534

8

21,7

33,2

16

Indi

vidu

al im

pairm

ent

438

,116

,822

4

21,2

82,4

05

386

,943

,898

3

85,7

21,7

24

Net

am

ount

91,

011,

889,

312

74,

413,

584,

770

88,

485,

031,

394

72,

711,

771,

766

Loan

and

adv

ance

s m

easu

red

at F

VTPL

-

-

-

-

Tota

l 9

1,01

1,88

9,31

2 7

4,41

3,58

4,77

0 8

8,48

5,03

1,39

4 7

2,71

1,77

1,76

6

The

sum

of t

he o

utst

andi

ng a

mou

nt o

f all

loan

s an

d ad

vanc

es e

xten

ded

to th

e cu

stom

ers

othe

r tha

n B

FIs,

bill

s pu

rcha

sed

and

disc

ount

ed a

nd a

mor

tized

cos

t of s

taff

loan

s; le

ss th

e am

ount

of

impa

irmen

t allo

wan

ces

is p

rese

nted

und

er th

is h

ead.


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

4.7.

1: A

naly

sis

of lo

an a

nd a

dvan

ces

- B

y Pr

oduc

t

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Prod

uct

Term

loan

s 2

1,81

9,27

8,82

7 1

4,26

8,62

5,65

4 2

1,81

9,27

8,82

7 1

4,26

8,62

5,65

4

Over

drast

5

,929

,688

,112

3

,099

,974

,826

5

,929

,688

,112

3

,099

,974

,826

Trus

t rec

eipt

/Im

port

loan

s 4

,146

,313

,974

3

,939

,614

,346

4

,146

,313

,974

3

,939

,614

,346

Dem

and

and

othe

r wor

king

cap

ital l

oans

18,

332,

571,

900

16,

124,

798,

315

18,

332,

571,

900

16,

124,

798,

315

Pers

onal

resi

dent

ial l

oans

9,1

91,4

98,3

67

8,4

11,8

62,8

46

9,1

91,4

98,3

67

8,4

11,8

62,8

46

Rea

l est

ate

loan

s 3

,270

,011

,964

3

,717

,309

,146

3

,270

,011

,964

3

,717

,309

,146

Mar

gin

lend

ing

loan

s 2

94,6

05,4

97

417

,471

,461

2

94,6

05,4

97

417

,471

,461

Hire

pur

chas

e lo

ans

4,1

79,1

17,8

90

4,6

07,0

41,0

27

4,1

79,1

17,8

90

4,6

07,0

41,0

27

Dep

rived

sec

tor l

oans

3,7

79,6

31,0

47

2,9

54,9

36,1

05

1,2

35,3

53,6

29

1,2

30,2

13,6

82

Bill

s pu

rcha

sed

-

8,0

00,0

00

-

8,0

00,0

00

Staff

loa

ns 6

98,4

51,3

05

611

,927

,024

6

91,4

36,2

78

605

,720

,012

Othe

r 2

0,15

0,99

2,84

0 1

7,30

1,22

1,61

8 2

0,15

0,99

2,84

0 1

7,30

1,22

1,61

8

Sub

tota

l 9

1,79

2,16

1,72

3 7

5,46

2,78

2,36

9 8

9,24

0,86

9,27

7 7

3,73

1,85

2,93

4

Inte

rest

rece

ivab

le 6

51,5

19,0

78

215

,488

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6

08,9

39,5

48

187

,373

,772

Gra

nd to

tal

92,

443,

680,

801

75,

678,

271,

321

89,

849,

808,

825

73,

919,

226,

706


4.7.

2: A

naly

sis

of lo

an a

nd a

dvan

ces

- B

y Cu

rren

cy

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Nep

ales

e ru

pee

88,

946,

025,

473

74,

014,

883,

703

86,

352,

153,

497

72,

255,

839,

089

Indi

an ru

pee

-

-

-

-

Uni

ted

Stat

e do

llar

3,4

77,7

59,3

06

1,6

43,8

53,3

38

3,4

77,7

59,3

06

1,6

43,8

53,3

38

Gre

at B

ritai

n po

und

-

-

-

-

Euro

19,

896,

022

19,

534,

280

19,

896,

022

19,

534,

280

Jape

nese

yen

-

-

-

-

Chin

ese

yuan

-

-

-

-

Othe

r -

-

-

-

Tota

l 9

2,44

3,68

0,80

1 7

5,67

8,27

1,32

1 8

9,84

9,80

8,82

5 7

3,91

9,22

6,70

6

4.7.

3: A

naly

sis

of lo

an a

nd a

dvan

ces

- B

y Co

llate

ral

Loan

s an

d ad

vanc

es to

cus

tom

ers

are

back

ed b

y co

llate

ral s

ecur

ities

to m

itiga

te th

e de

faul

t ris

k. T

he ty

pe o

f the

col

late

rals

cor

resp

ondi

ng to

the

loan

s an

d ad

vanc

es to

cus

tom

ers

are

give

n in

the

tabl

e be

low

.

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Secu

red

Mov

able

/im

mov

able

ass

ets

89,

823,

850,

881

73,

662,

058,

233

89,

352,

247,

540

73,

329,

496,

135

Gol

d an

d si

lver

-

-

-

-

Gua

rant

ee o

f dom

estic

B/F

Is 1

8,89

8,35

8 7

,538

,789

1

8,89

8,35

8 7

,538

,789

Gov

ernm

ent g

uara

ntee

89,

125,

832

83,

000,

167

89,

125,

832

83,

000,

167

Gua

rant

ee o

f int

erna

tiona

l rat

ed b

ank

-

-

-

-

Colla

tera

l of e

xpor

t doc

umen

t -

-

-

-

Colla

tera

l of fi

xed

dep

osit

rece

ipt

385

,025

,416

4

98,2

71,5

13

385

,025

,416

4

98,2

71,5

13

Colla

tera

l of G

over

nem

ent s

ecur

ities

4,5

11,6

79

920

,102

4

,511

,679

9

20,1

02

Coun

ter g

uara

ntee

-

-

-

-

Pers

onal

gua

rant

ee 6

74,4

66

484

,068

-

-

Othe

r col

late

ral

2,1

21,5

94,1

70

1,4

25,9

98,4

48

-

-

Subt

otal

92,

443,

680,

801

75,

678,

271,

321

89,

849,

808,

825

73,

919,

226,

706

Uns

ecur

ed -

-

-

-

Gra

nt T

otal

92,

443,

680,

801

75,

678,

271,

321

89,

849,

808,

825

73,

919,

226,

706


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

4.7.

4: A

llow

ance

s fo

r im

pair

men

t

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Spec

ifi c

allo

wan

ces

for

impa

irm

ent

Bal

ance

at S

hraw

an 1

421

,282

,405

7

19,9

24,4

93

385

,721

,724

7

08,3

85,3

95

Impa

irmen

t los

s fo

r the

yea

r: -

-

Char

ge fo

r the

yea

r -

-

Rec

over

ies/

reve

rsal

dur

ing

the

year

16,

834,

418

(298

,642

,088

) 1

,222

,174

(3

22,6

63,6

71)

Writ

e-off

s -

-

Exch

ange

rate

var

ianc

e on

fore

ign

curr

ency

impa

irmen

t -

-

Othe

r mov

emen

t -

-

Bal

ance

at A

shad

end

438

,116

,822

4

21,2

82,4

05

386

,943

,898

3

85,7

21,7

24

Colle

ctiv

e al

low

ance

s fo

r im

pair

men

t -

-

Bal

ance

at S

hraw

an 1

821

,733

,216

7

24,8

59,8

89

821

,733

,216

7

24,8

59,8

89

Impa

irmen

t los

s fo

r the

yea

r: -

-

Char

ge/(

reve

rsal

) for

the

year

171

,941

,451

9

6,87

3,32

8 1

56,1

00,3

17

96,

873,

328

Exch

ange

rate

var

ianc

e on

fore

ign

curr

ency

impa

irmen

t -

-

Othe

r mov

emen

t -

-

Bal

ance

at A

shad

end

993

,674

,668

8

21,7

33,2

16

977

,833

,534

8

21,7

33,2

16

Tota

l allo

wan

ces

for

impa

irm

ent

1,4

31,7

91,4

90

1,2

43,0

15,6

21

1,3

64,7

77,4

31

1,2

07,4

54,9

40

Inve

stm

ent s

ecur

ities

4.8

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Inve

stm

ent s

ecur

ities

mea

sure

d at

am

ortiz

ed c

ost

9,8

20,3

18,9

39

9,0

24,0

56,8

84

9,6

90,9

88,5

76

8,8

94,9

67,8

98

Inve

stm

ent i

n eq

uity

mea

sure

d at

FVT

OCI

638

,362

,439

5

84,3

11,3

27

625

,362

,439

5

53,4

78,8

27

Tota

l 1

0,45

8,68

1,37

8 9

,608

,368

,211

1

0,31

6,35

1,01

6 9

,448

,446

,725

The

Inve

stm

ents

mad

e by

Ban

k in

fi na

ncia

l ins

trum

ents

has

bee

n pr

esen

ted

unde

r thi

s ac

coun

t hea

d in

thre

e ca

tego

ries

i.e. i

nves

tmen

t sec

uriti

es d

esig

nate

d at

fair

valu

e th

roug

h pr

ofi t

or

loss

, inv

estm

ent s

ecur

ities

mea

sure

d at

am

ortiz

ed c

ost a

nd in

vest

men

t in

equi

ty m

easu

red

at fa

ir va

lue

thro

ugh

othe

r com

preh

ensi

ve in

com

e.


4.8.

1: In

vest

men

t sec

uriti

es m

easu

red

at a

mor

tized

cos

t

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Deb

t sec

uriti

es 1

4,98

9,95

3 1

4,08

8,98

6 -

-

Gov

ernm

ent b

onds

8,2

52,0

44,2

02

5,4

79,2

69,0

98

8,2

52,0

44,2

02

5,4

79,2

69,0

98

Gov

ernm

ent t

reas

ury

bills

786

,811

,382

2

,538

,022

,061

7

86,8

11,3

82

2,5

38,0

22,0

61

Nep

al R

astr

a B

ank

bond

s -

-

-

-

Nep

al R

astr

a B

ank

depo

sits

inst

rum

ents

-

-

-

-

Othe

r Inv

estm

ents

766

,473

,402

9

92,6

76,7

39

652

,132

,992

8

77,6

76,7

39

Less

: spe

cifi c

allo

wan

ces

for i

mpa

irmen

t -

-

-

-

Tota

l 9

,820

,318

,939

9

,024

,056

,884

9

,690

,988

,576

8

,894

,967

,898

4.8.

2: In

vest

men

t in

equi

ty m

easu

red

at fa

ir v

alue

thro

ugh

othe

r co

mpr

ehen

sive

inco

me

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Equi

ty in

stru

men

ts

Quo

ted

equi

ty s

ecur

ities

593

,366

,539

5

56,9

19,3

27

593

,366

,539

5

39,0

86,8

27

Unq

uote

d eq

uity

sec

uriti

es 4

4,99

5,90

0 2

7,39

2,00

0 3

1,99

5,90

0 1

4,39

2,00

0

Tota

l 6

38,3

62,4

39

584

,311

,327

6

25,3

62,4

39

553

,478

,827

The

deta

ils o

f oth

er in

vest

men

t as

at 3

1 A

shad

207

6 ar

e as

follo

ws:

Des

crip

tion

Int R

ate

Mat

urity

Dat

e F

ace

Valu

e (U

SD)

Car

ryin

g A

mou

nt (N

PR.)

1. S

yndi

cate

Ban

k Lo

ndon

3.

88%

4-D

ec-1

9 1

,400

,000

1

54,8

19,3

12

2. I

CICI

Ban

k D

ubai

3.

75%

18-M

ar-2

0 1

,000

,000

1

11,0

22,8

40

3. I

CICI

Ban

k D

ubai

3.

77%

18-M

ar-2

0 1

,700

,000

1

88,7

18,9

01

4. I

CICI

Ban

k D

ubai

3.

76%

18-M

ar-2

0 3

00,0

00

33,

306,

449

5. S

yndi

cate

Ban

k Lo

ndon

2.

53%

4-D

ec-1

9 1

,480

,000

1

64,2

65,4

90

Tota

l 6

52,1

32,9

92


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

4.8.

3: In

form

atio

n re

latin

g to

inve

stm

ent i

n eq

uitie

s

Gro

upN

MB

Part

icul

ars

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Cost

Fa

ir V

alue

Cost

Fa

ir V

alue

Cost

Fa

ir V

alue

Cost

Fa

ir V

alue

Inve

stm

ent i

n qu

oted

equ

ity

Uni

ted

Insu

ranc

e Co

. (N

epal

) Lim

ited

211

,300

2

46,0

00

211

,300

2

58,6

00

211

,300

2

46,0

00

211

,300

2

58,6

00

NLG

Insu

ranc

e Co

mpa

ny L

imite

d -

5

,400

-

4

3,71

0 -

5

,400

-

4

3,71

0

Rid

i Hyd

ro P

ower

Lim

ited

3,6

00

4,4

10

3,6

00

5,7

81

3,6

00

4,4

10

3,6

00

5,7

81

Rur

al M

icro

fi nan

ce D

evel

opm

ent C

ente

r Lim

ited

-

458

,073

-

4

11,3

90

-

458

,073

-

4

11,3

90

Laxm

i Lag

hubi

tta S

anst

ha L

imite

d -

2

,644

-

4

,392

-

2

,644

-

4

,392

Mer

o M

icro

Fin

ance

Bitt

iya

Sans

tha

Ltd.

3

7,02

3,00

0 4

6,04

6,00

0 1

4,00

0,00

0 2

0,02

0,00

0 3

7,02

3,00

0 4

6,04

6,00

0 1

4,00

0,00

0 2

0,02

0,00

0

But

wal

Pow

er C

ompa

ny 2

09,0

06,6

79

187

,688

,873

2

09,0

06,6

79

190

,650

,803

2

09,0

06,6

79

187

,688

,873

2

09,0

06,6

79

190

,650

,803

Nep

al T

elec

om 3

4,69

8,47

2 3

4,38

2,50

2 -

-

3

4,69

8,47

2 3

4,38

2,50

2

NM

B S

ulav

Inve

stm

ent F

und-

1 1

05,0

00,0

00

113

,610

,000

1

12,5

00,0

00

129

,937

,500

1

05,0

00,0

00

113

,610

,000

1

05,0

00,0

00

121

,275

,000

NM

B H

ybrid

Fun

d-1

140

,000

,000

1

40,4

20,0

00

150

,000

,000

1

44,8

30,0

00

140

,000

,000

1

40,4

20,0

00

140

,000

,000

1

35,6

60,0

00

Laxm

i Equ

ity F

und

40,

947,

100

31,

242,

637

40,

947,

100

33,

167,

151

40,

947,

100

31,

242,

637

40,

947,

100

33,

167,

151

NIC

Asi

a G

row

th F

und

10,

000,

000

10,

280,

000

10,

000,

000

9,1

90,0

00

10,

000,

000

10,

280,

000

10,

000,

000

9,1

90,0

00

Sani

ma

Equi

ty F

und

20,

000,

000

18,

800,

000

20,

000,

000

19,

120,

000

20,

000,

000

18,

800,

000

20,

000,

000

19,

120,

000

Citiz

en M

utua

l Fun

d-I

10,

000,

000

10,

180,

000

10,

000,

000

9,2

80,0

00

10,

000,

000

10,

180,

000

10,

000,

000

9,2

80,0

00

Tota

l 6

06,8

90,1

51

593

,366

,539

5

66,6

68,6

79

556

,919

,327

6

06,8

90,1

51

593

,366

,539

5

49,1

68,6

79

539

,086

,827

Inve

stm

ent i

n un

quot

ed e

quity

Nep

al S

tock

Exc

hang

e Li

mite

d 5

,000

7

1,60

0 5

,000

5

,000

5

,000

7

1,60

0 5

,000

5

,000

Nep

al c

lear

ing

Hou

se L

imite

d 4

,198

,000

6

,045

,100

4

,198

,000

4

,198

,000

4

,198

,000

6

,045

,100

4

,198

,000

4

,198

,000

Cred

it In

form

atio

n B

urea

u Li

mite

d 1

89,0

00

1,8

90,0

00

189

,000

1

89,0

00

189

,000

1

,890

,000

1

89,0

00

189

,000

Citiz

ens

Mut

ual F

und-

II 2

,000

,000

2

,000

,000

-

-

2

,000

,000

2

,000

,000

-

-

NA

BIL

BA

LAN

CE F

UN

D-I

I 1

0,00

0,00

0 1

0,00

0,00

0 -

-

1

0,00

0,00

0 1

0,00

0,00

0 -

-

Forw

ard

Com

mun

ity -

-

-

-

-

-

-

-

Sam

uday

ak L

aghu

bitta

Bitt

aya

Sans

tha

Ltd

11,

000,

000

11,

000,

000

11,

000,

000

11,

000,

000

-

-

-

-

Nep

al F

inso

st Co

mpa

ny L

td.

2,0

00,0

00

2,0

00,0

00

2,0

00,0

00

2,0

00,0

00

-

-

-

-

CED

B H

ydro

Fun

d Li

mite

d 1

0,00

0,00

0 1

1,98

9,20

0 1

0,00

0,00

0 1

0,00

0,00

0 1

0,00

0,00

0 1

1,98

9,20

0 1

0,00

0,00

0 1

0,00

0,00

0

Tota

l 3

9,39

2,00

0 4

4,99

5,90

0 2

7,39

2,00

0 2

7,39

2,00

0 2

6,39

2,00

0 3

1,99

5,90

0 1

4,39

2,00

0 1

4,39

2,00

0

Gra

nd T

otal

646

,282

,151

6

38,3

62,4

39

594

,060

,679

5

84,3

11,3

27

633

,282

,151

6

25,3

62,4

39

563

,560

,679

5

53,4

78,8

27


Trea

sury

bill

s, G

over

nmen

t bon

ds a

nd U

SD B

onds

hav

e be

en c

lass

ifi ed

as

fi nan

cial

ass

ets

held

to m

atur

ity in

stru

men

t as

the

Ban

k ha

s in

tent

ion

and

capa

city

to h

old

thes

e in

stru

men

ts u

ntil

thei

r mat

urity

. The

se in

stru

men

ts a

re c

arrie

d at

am

ortis

ed c

osts

. The

se in

stru

men

ts a

re is

sued

by

the

gove

rnm

ent.

Ban

k co

nsid

ers

that

the

fi xed

retu

rn o

n th

ese

bond

s ad

equa

tely

com

-pe

nsat

es fo

r ass

ocia

ted

risks

. Pre

miu

ms

paid

on

deve

lopm

ent B

onds

are

con

side

red

for t

he E

IR c

alcu

latio

n an

d th

e ba

lanc

e ou

tsta

ndin

g ha

ve b

een

mea

sure

d ac

cord

ingl

y. In

tere

st a

ccru

ed

on D

evel

opm

ent B

onds

and

T-B

ills

are

show

n as

par

t of t

he In

vest

men

ts.

Non

e of

the

equi

ty in

vest

men

ts re

sult

in c

ontr

ol o

r sig

nifi c

ant i

nfl u

ence

ove

r the

inve

sted

ent

ities

. The

se in

vest

men

ts h

ave

been

cla

ssifi

ed a

s av

aila

ble

for s

ale

asse

ts. T

he m

ovem

ent i

n fa

ir va

lue

of th

ese

inst

rum

ents

has

bee

n ad

just

ed th

roug

h ot

her c

ompr

ehen

sive

inco

me.

The

Ban

k ha

s in

vest

ed N

PR 1

05,0

00,0

00 in

NM

B S

ulav

Inve

stm

ent F

und-

1 an

d N

PR 1

40,0

00,0

00 in

NM

B H

ybrid

Fun

d-1

as S

eed

Capi

tal.

For b

oth

Mut

ual F

unds

, the

Ban

k is

the

Fund

Sp

onso

r whi

le th

e B

ank’

s Su

bsid

iary

NM

B C

apita

l Lim

ited

is th

e Fu

nd M

anag

er. T

hese

inve

stm

ent h

ave

been

mad

e as

per

the

requ

irem

ent o

f “M

utua

l Fun

d R

egul

atio

n 20

67” i

ssue

d by

the

Secu

ritie

s B

oard

of N

epal

(SEB

ON) t

o in

vest

see

d m

oney

by

the

Fund

Spo

nsor

/Man

ager

. The

cum

ulat

ive

net c

hang

e in

the

fair

valu

e of

fi na

ncia

l ass

ets

mea

sure

d at

FVT

OCI i

s re

cogn

ized

un

der f

air v

alue

rese

rve

head

ing.

Inve

stm

ents

that

has

not

dis

trib

uted

any

div

iden

d si

nce

prev

ious

thre

ee y

ears

are

:

1. N

MB

Hyb

rid F

und-

1

2. N

IC A

sia

Gro

wth

Fun

d (N

ICG

F)-1

4.8.

3: In

form

atio

n re

latin

g to

inve

stm

ent i

n eq

uitie

s

Gro

upN

MB

Part

icul

ars

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Cost

Fa

ir V

alue

Cost

Fa

ir V

alue

Cost

Fa

ir V

alue

Cost

Fa

ir V

alue

Inve

stm

ent i

n qu

oted

equ

ity

Uni

ted

Insu

ranc

e Co

. (N

epal

) Lim

ited

211

,300

2

46,0

00

211

,300

2

58,6

00

211

,300

2

46,0

00

211

,300

2

58,6

00

NLG

Insu

ranc

e Co

mpa

ny L

imite

d -

5

,400

-

4

3,71

0 -

5

,400

-

4

3,71

0

Rid

i Hyd

ro P

ower

Lim

ited

3,6

00

4,4

10

3,6

00

5,7

81

3,6

00

4,4

10

3,6

00

5,7

81

Rur

al M

icro

fi nan

ce D

evel

opm

ent C

ente

r Lim

ited

-

458

,073

-

4

11,3

90

-

458

,073

-

4

11,3

90

Laxm

i Lag

hubi

tta S

anst

ha L

imite

d -

2

,644

-

4

,392

-

2

,644

-

4

,392

Mer

o M

icro

Fin

ance

Bitt

iya

Sans

tha

Ltd.

3

7,02

3,00

0 4

6,04

6,00

0 1

4,00

0,00

0 2

0,02

0,00

0 3

7,02

3,00

0 4

6,04

6,00

0 1

4,00

0,00

0 2

0,02

0,00

0

But

wal

Pow

er C

ompa

ny 2

09,0

06,6

79

187

,688

,873

2

09,0

06,6

79

190

,650

,803

2

09,0

06,6

79

187

,688

,873

2

09,0

06,6

79

190

,650

,803

Nep

al T

elec

om 3

4,69

8,47

2 3

4,38

2,50

2 -

-

3

4,69

8,47

2 3

4,38

2,50

2

NM

B S

ulav

Inve

stm

ent F

und-

1 1

05,0

00,0

00

113

,610

,000

1

12,5

00,0

00

129

,937

,500

1

05,0

00,0

00

113

,610

,000

1

05,0

00,0

00

121

,275

,000

NM

B H

ybrid

Fun

d-1

140

,000

,000

1

40,4

20,0

00

150

,000

,000

1

44,8

30,0

00

140

,000

,000

1

40,4

20,0

00

140

,000

,000

1

35,6

60,0

00

Laxm

i Equ

ity F

und

40,

947,

100

31,

242,

637

40,

947,

100

33,

167,

151

40,

947,

100

31,

242,

637

40,

947,

100

33,

167,

151

NIC

Asi

a G

row

th F

und

10,

000,

000

10,

280,

000

10,

000,

000

9,1

90,0

00

10,

000,

000

10,

280,

000

10,

000,

000

9,1

90,0

00

Sani

ma

Equi

ty F

und

20,

000,

000

18,

800,

000

20,

000,

000

19,

120,

000

20,

000,

000

18,

800,

000

20,

000,

000

19,

120,

000

Citiz

en M

utua

l Fun

d-I

10,

000,

000

10,

180,

000

10,

000,

000

9,2

80,0

00

10,

000,

000

10,

180,

000

10,

000,

000

9,2

80,0

00

Tota

l 6

06,8

90,1

51

593

,366

,539

5

66,6

68,6

79

556

,919

,327

6

06,8

90,1

51

593

,366

,539

5

49,1

68,6

79

539

,086

,827

Inve

stm

ent i

n un

quot

ed e

quity

Nep

al S

tock

Exc

hang

e Li

mite

d 5

,000

7

1,60

0 5

,000

5

,000

5

,000

7

1,60

0 5

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5

,000

Nep

al c

lear

ing

Hou

se L

imite

d 4

,198

,000

6

,045

,100

4

,198

,000

4

,198

,000

4

,198

,000

6

,045

,100

4

,198

,000

4

,198

,000

Cred

it In

form

atio

n B

urea

u Li

mite

d 1

89,0

00

1,8

90,0

00

189

,000

1

89,0

00

189

,000

1

,890

,000

1

89,0

00

189

,000

Citiz

ens

Mut

ual F

und-

II 2

,000

,000

2

,000

,000

-

-

2

,000

,000

2

,000

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-

-

NA

BIL

BA

LAN

CE F

UN

D-I

I 1

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-

1

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0 1

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Forw

ard

Com

mun

ity -

-

-

-

-

-

-

-

Sam

uday

ak L

aghu

bitta

Bitt

aya

Sans

tha

Ltd

11,

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11,

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000

11,

000,

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11,

000,

000

-

-

-

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Nep

al F

inso

st Co

mpa

ny L

td.

2,0

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2,0

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00

2,0

00,0

00

2,0

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00

-

-

-

-

CED

B H

ydro

Fun

d Li

mite

d 1

0,00

0,00

0 1

1,98

9,20

0 1

0,00

0,00

0 1

0,00

0,00

0 1

0,00

0,00

0 1

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9,20

0 1

0,00

0,00

0 1

0,00

0,00

0

Tota

l 3

9,39

2,00

0 4

4,99

5,90

0 2

7,39

2,00

0 2

7,39

2,00

0 2

6,39

2,00

0 3

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2,00

0 1

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0

Gra

nd T

otal

646

,282

,151

6

38,3

62,4

39

594

,060

,679

5

84,3

11,3

27

633

,282

,151

6

25,3

62,4

39

563

,560

,679

5

53,4

78,8

27


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Curr

ent t

ax a

sset

s4.

9

The

adva

nce

depo

site

d by

the

bank

less

tax

liabi

litie

s ar

e pr

esen

ted

unde

r thi

s he

ad:

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Curr

ent t

ax a

sset

s

Curr

ent y

ear i

ncom

e ta

x as

sets

1,0

62,4

54,1

50

732

,387

,644

9

56,9

49,9

45

633

,132

,526

Tax

asse

ts o

f prio

r per

iods

-

130

,752

,238

-

1

30,7

52,2

38

Tota

l Cur

rent

tax

Ass

ets

1,0

62,4

54,1

50

863

,139

,882

9

56,9

49,9

45

763

,884

,764

Curr

ent t

ax li

abili

ties

Curr

ent y

ear i

ncom

e ta

x lia

bilit

ies

1,1

00,4

93,9

38

923

,191

,366

9

92,5

28,5

15

824

,302

,920

Tax

liabi

litie

s of

prio

r per

iods

-

-

-

-

Tota

l Cur

rent

tax

Liab

ilitie

s 1

,100

,493

,938

9

23,1

91,3

66

992

,528

,515

8

24,3

02,9

20

The

mov

emen

t of A

dvan

ce ta

x as

of A

shad

end

207

6 is

giv

en b

elow

:

Part

icul

ars

Am

ount

(NPR

)

A. A

dvan

ce In

com

e Ta

x ca

rrie

d fo

rwar

d fr

om p

revi

ous

year

-

B. A

dvan

ce T

ax In

stal

men

ts F

Y 20

75/7

694

8,82

0,51

8

C. T

ax W

ithhe

ld b

y W

ithho

lder

FY

2075

/76

8,12

9,42

7

D. T

ax tr

ansf

erre

d to

Tax

Dep

osit

for l

egal

cas

es77

,848

E. P

rovi

sion

for I

ncom

e ta

x fo

r FY

2075

/76

992,

528,

515

Net

Tax

Pay

able

(A+B

+C-D

-E)

(35,

656,

418)

The

adva

nce

tax

amou

nt N

PR. 7

7,84

8 ha

s be

en tr

ansf

erre

d to

Tax

Dep

osit

for l

egal

cas

es a

st er t

he re

port

ing

perio

d. T

he th

ree

adva

nce

tax

inst

allm

ents

are

with

in th

e lim

it of

90%

of t

otal

ta

x lia

bilit

y an

d th

e de

fi cit

has

been

dep

osite

d w

ithin

Ash

win

end

207

6.


Inve

stm

ent i

n su

bsid

iari

es4.

10

Part

icul

ars

NM

B

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Inve

stm

ent i

n qu

oted

sub

sidi

arie

s 4

8,55

2,00

0 4

8,55

2,00

0

Inve

stm

ent i

n un

quot

ed s

ubsi

diar

ies

200

,000

,000

2

00,0

00,0

00

Tota

l inv

estm

ent

248

,552

,000

2

48,5

52,0

00

Less

: Im

pairm

ent a

llow

ance

s -

-

Net

car

ryin

g am

ount

248

,552

,000

2

48,5

52,0

00

4.10

.1: I

nves

tmen

t in

quot

ed s

ubsi

diar

ies

Part

icul

ars

NM

B

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Cost

Fa

ir V

alue

Cost

Fa

ir V

alue

NM

B M

icro

Fin

ance

Bitt

iya

Sast

ha L

imite

d, 8

26,2

31 P

rom

oter

sh

ares

of R

s 10

0 ea

ch fu

lly p

aid

up 4

8,55

2,00

0 4

8,55

2,00

0 4

8,55

2,00

0 4

8,55

2,00

0

Tota

l 4

8,55

2,00

0 4

8,55

2,00

0 4

8,55

2,00

0 4

8,55

2,00

0

4.10

.2: I

nves

tmen

t in

unqu

oted

sub

sidi

arie

s

Part

icul

ars

NM

B

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Cost

Fa

ir V

alue

Cost

Fa

ir V

alue

NM

B C

apita

l Ltd

., 2,

000,

000

Ordi

nary

sha

res

of R

s 10

0 ea

ch

fully

pai

d up

200

,000

,000

2

00,0

00,0

00

200

,000

,000

2

00,0

00,0

00

Tota

l 2

00,0

00,0

00

200

,000

,000

2

00,0

00,0

00

200

,000

,000

4.10

.3: I

nfor

mat

ion

rela

ting

to s

ubsi

diar

ies

of th

e B

ank

Part

icul

ars

NM

B

Perc

enta

ge o

f ow

ners

hip

held

by

the

Ban

k

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

NM

B C

apita

l Lim

ited

100%

100%

NM

B M

icro

Fin

ance

Bitt

iya

Sast

ha L

imite

d51

%51

%


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Inve

stm

ent i

n as

soci

ates

4.11

The

Ban

k do

not

hav

e an

y in

vest

men

t in

asso

ciat

es a

s of

fi sc

al y

ear e

nd 2

076.

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Inve

stm

ent i

n qu

oted

ass

ocia

tes

-

-

-

-

Inve

stm

ent i

n un

quot

ed a

ssoc

iate

s -

-

-

-

Tota

l inv

estm

ent

-

-

-

-

Less

: Im

pairm

ent a

llow

ance

s -

-

-

-

Net

car

ryin

g am

ount

-

-

-

-

4.10

.4: N

on c

ontr

ollin

g in

tere

st o

f the

sub

sidi

arie

s

Part

icul

ars

Gro

up

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Equi

ty in

tere

st h

eld

by N

CI (%

)49

%49

%

Profi

t/(lo

ss) a

lloca

ted

durin

g th

e ye

ar 3

4,83

1,10

3 2

0,27

3,81

5

Acc

umul

ated

bal

ance

s of

NCI

as

on y

ear e

nd 1

65,3

96,6

16

131

,480

,054

Div

iden

d pa

id to

NCI

544

,964

7

26,6

19

4.11

.1: I

nves

tmen

t in

quot

ed a

ssoc

iate

s

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Cost

Fa

ir V

alue

Fair

Val

ueCo

st

"……

……

……

……

……

……

……

.Ltd

. …

……

…sh

ares

of R

s. …

….e

ach"

"……

……

……

……

……

……

……

.Ltd

. …

……

…sh

ares

of R

s. …

….e

ach"

……

……

……

……

……

……

.

Tota

l


4.11

.4: E

quity

val

ue o

f ass

ocia

tes

Part

icul

ars

Gro

up

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

……

……

……

……

……

……

……

.Ltd

.

……

……

……

……

……

……

……

.Ltd

.

……

……

……

……

……

……

.

Tota

l

4.11

.2: I

nves

tmen

t in

unqu

oted

ass

ocia

tes

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Cost

Fa

ir V

alue

Fair

Val

ueCo

st

"……

……

……

……

……

……

……

.Ltd

. …

……

…sh

ares

of R

s. …

….e

ach"

"……

……

……

……

……

……

……

.Ltd

. …

……

…sh

ares

of R

s. …

….e

ach"

……

……

……

……

……

……

.

Tota

l

4.11

.3: I

nfor

mat

ion

rela

ting

to a

ssoc

iate

s of

the

Ban

k

Part

icul

ars

Gro

upN

MB

Perc

enta

ge o

f ow

ners

hip

held

by

the

Ban

kPe

rcen

tage

of o

wne

rshi

p he

ld b

y th

e B

ank

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

……

……

……

……

……

……

……

.Ltd

.

……

……

……

……

……

……

……

.Ltd

.

……

……

……

……

……

……

……

.Ltd

.

……

……

……

……

……

……

……

.Ltd

.

……

……

……

……

……

….


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Inve

stm

ent p

rope

rtie

s4.

12

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Inve

stm

ent p

rope

rtie

s m

easu

red

at fa

ir va

lue

Bal

ance

as

on S

hraw

an 1

59,

774,

627

77,

488,

827

59,

774,

627

77,

488,

827

Add

ition

/dis

posa

l dur

ing

the

year

43,

141,

235

(17,

714,

200)

43,

141,

235

(17,

714,

200)

Net

cha

nges

in fa

ir va

lue

durin

g th

e ye

ar -

-

-

-

Adj

ustm

ent/

tran

sfer

-

-

-

-

Net

am

ount

102

,915

,862

5

9,77

4,62

7 1

02,9

15,8

62

59,

774,

627

Inve

stm

ent p

rope

rtie

s m

easu

red

at c

ost

Bal

ance

as

on S

hraw

an 1

-

-

-

-

Add

ition

/dis

posa

l dur

ing

the

year

-

-

-

-

Adj

ustm

ent/

tran

sfer

-

-

-

-

Acc

umul

ated

dep

reci

atio

n -

-

-

-

Acc

umul

ated

impa

irmen

t los

s -

-

-

-

Net

am

ount

As

per N

AS

40 ‘I

nves

tmen

t Pro

pert

y’ (l

and

and

build

ing

acqu

ired

as n

on b

anki

ng a

sset

s) a

re m

easu

red

at fa

ir va

lue.

Inve

stm

ent p

rope

rtie

s ar

e la

nd o

r bui

ldin

g or

bot

h ot

her t

han

thos

e cl

assi

fi ed

as p

rope

rty

and

equi

pmen

t und

er N

AS

16 –

“Pro

pert

y, P

lant

and

Equ

ipm

ent”;

and

ass

ets

clas

sifi e

d as

no

n-cu

rren

t ass

ets

held

for s

ale

unde

r NFR

S 5

– “N

on-C

urre

nt A

sset

s H

eld

for S

ale

and

Dis

cont

inue

d Op

erat

ions

”. Th

e G

roup

has

reco

gniz

ed a

s in

vest

men

t pro

pert

y al

l lan

d or

land

and

bu

ildin

g ac

quire

d as

non

ban

king

ass

ets.


Part

y's

Nam

eD

ate

NB

A is

ass

umed

Am

ount

(NPR

)

1. K

ipu

Qua

lity

Mea

t Pro

duct

s P.

Ltd

.16

-Jul

-15

5,35

4,00

0

2. K

amdh

enu

Mah

ila D

ugdh

a U

tpad

ak S

sl16

-Nov

-17

785,

000

3. A

nkita

Impe

x4-

Mar

-18

13,9

36,0

00

4. J

alth

al L

ive

Stoc

k P.

Ltd

4-Se

p-18

2,20

0,00

0

5. F

acto

ry O

utle

t And

Clo

thin

g St

ore

18-J

un-1

815

,530

,000

6. C

hina

Hyg

ieni

c M

eat P

ro &

Sup

P.L

td15

-Jul

-18

20,1

34,0

00

7. C

hina

Hyg

ieni

c M

eat P

ro &

Sup

P.L

td9-

Feb-

186,

612,

125

8. E

aste

rn S

hoe

Cent

re1-

Feb-

194,

041,

500

9. C

hand

raka

la L

imba

ng1-

Feb-

1946

6,00

0

10. M

auni

Tra

ders

1-M

ar-1

93,

120,

000

11. N

atio

nal S

olar

& In

vest

men

t7-

Jan-

1920

,695

,000

12. U

jjwal

Tra

ding

& S

uppl

ier

9-Ja

n-19

4,65

0,38

4

13. B

abu

Rai

9-Ja

n-19

1,57

4,85

3

14. R

tc-T

eech

nolo

gy N

epal

13-J

an-1

972

,000

15. E

verg

reen

8-Fe

b-19

3,74

5,00

0

Tota

l10

2,91

5,86

2

The

deta

ils o

f Non

-Ban

king

Ass

ets

as o

f Ash

ad e

nd, 2

076

are

as fo

llow

s:


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Prop

erty

and

Equ

ipm

ent

4.13

Part

icul

ars

Gro

up

Land

Bui

ldin

gLe

aseh

old

Prop

ertie

sCo

mpu

ter

&

Acc

esso

ries

Vehi

cles

Furn

iture

&

Fixt

ure

Mac

hine

ryEq

uipm

ent &

Ot

hers

Tota

l

Cost

As

on S

hraw

an 1

, 207

4 8

29,6

37,4

10

162

,658

,358

1

83,5

28,0

66

151

,640

,906

2

85,0

96,0

87

72,

360,

254

269

,179

,706

1

01,8

42,4

63

2,0

55,9

43,2

49

Add

ition

dur

ing

the

Year

-

Acq

uisi

tion

-

-

-

-

-

-

-

-

-

Capi

taliz

atio

n -

6

,165

,630

6

3,04

8,48

2 2

2,86

3,61

4 6

5,71

9,95

0 2

2,82

6,62

1 9

0,59

4,15

2 1

2,48

1,75

0 2

83,7

00,2

00

Dis

posa

l dur

ing

the

year

-

-

(1,0

13,3

63)

(1,1

39)

(18,

692,

296)

(157

,410

) (1

3,28

2,79

7) (1

,660

,232

) (3

4,80

7,23

8)A

djus

tmen

t/R

eval

uatio

n -

-

-

-

-

-

-

-

-

B

alan

ce a

s on

Ash

ad e

nd 2

075

829

,637

,410

1

68,8

23,9

88

245

,563

,185

1

74,5

03,3

81

332

,123

,741

9

5,02

9,46

5 3

46,4

91,0

60

112

,663

,981

2

,304

,836

,211

-

A

dditi

on d

urin

g th

e Ye

ar -

A

cqui

sitio

n -

-

-

-

-

-

-

-

-

Ca

pita

lizat

ion

-

1,5

72,4

65

20,

917,

698

34,

135,

744

86,

321,

157

13,

239,

011

53,

524,

035

3,7

89,8

00

213

,499

,910

D

ispo

sal d

urin

g th

e ye

ar (5

,566

,005

) -

(8

,525

) (1

2,90

3) (5

0,40

2,59

9) (1

2,59

8) (8

53,3

51)

4,1

27

(56,

851,

854)

Adj

ustm

ent/

Rev

alua

tion

-

-

-

-

-

-

-

-

-

Bal

ance

as

on A

shad

end

207

6 8

24,0

71,4

05

170

,396

,453

2

66,4

72,3

58

208

,626

,222

3

68,0

42,2

99

108

,255

,877

3

99,1

61,7

45

116

,457

,908

2

,461

,484

,267

-

D

epre

ciat

ion

and

Impa

irm

ent

-

As

on S

hraw

an 1

, 20

74 -

3

4,20

1,87

2 9

6,16

4,59

8 9

1,95

0,33

1 1

14,1

67,2

78

51,

059,

993

133

,915

,044

6

9,40

2,28

3 5

90,8

61,3

98

Dep

reci

atio

n ch

arge

for t

he Y

ear

-

4,0

30,6

58

19,

768,

722

19,

280,

860

53,

524,

107

6,9

48,5

81

37,

636,

030

7,6

87,6

96

148

,876

,654

Im

pairm

ent f

or th

e ye

ar -

-

-

-

-

-

-

-

-

D

ispo

sals

-

-

(8

18,5

86)

-

(14,

993,

148)

(133

,851

) (1

3,22

0,33

8) (8

1,76

7) (2

9,24

7,69

1)A

djus

tmen

t -

-

-

-

-

-

-

-

-

A

s on

Ash

ad e

nd 2

075

-

38,

232,

531

115

,114

,734

1

11,2

31,1

91

152

,698

,237

5

7,87

4,72

2 1

58,3

30,7

35

77,

008,

212

710

,490

,362

D

epre

ciat

ion

char

ge fo

r the

Yea

r -

4

,103

,140

2

4,59

3,00

7 2

3,20

2,34

7 6

0,91

2,32

6 9

,254

,768

4

3,22

1,29

6 8

,795

,393

1

74,0

82,2

76

Impa

irmen

t for

the

year

-

-

-

-

-

-

-

-

-

Dis

posa

ls

-

-

-

-

(38,

847,

209)

-

(818

,777

) -

(3

9,66

5,98

6)A

djus

tmen

t -

-

-

-

-

-

-

-

-

A

s on

Ash

ad e

nd 2

076

-

42,

335,

671

139

,707

,741

1

34,4

33,5

38

174

,763

,353

6

7,12

9,49

0 2

00,7

33,2

54

85,

803,

604

844

,906

,652

Capi

tal W

ork

in P

rogr

ess

-

Net

Boo

k Va

lue

As

on A

shad

end

207

4 8

29,6

37,4

10

128

,456

,486

8

7,36

3,46

8 5

9,69

0,57

4 1

70,9

28,8

09

21,

300,

261

135

,264

,662

3

2,44

0,18

1 1

,465

,081

,851

A

s on

Ash

ad e

nd 2

075

829

,637

,410

1

30,5

91,4

58

130

,448

,451

6

3,27

2,19

0 1

79,4

25,5

04

37,

154,

742

188

,160

,325

3

5,65

5,76

9 1

,594

,345

,849

A

s on

Ash

ad e

nd 2

076

824

,071

,405

1

28,0

60,7

82

126

,764

,617

7

4,19

2,68

4 1

93,2

78,9

46

41,

126,

387

198

,428

,490

3

0,65

4,30

4 1

,616

,577

,616


Part

icul

ars

NM

B

Land

Bui

ldin

gLe

aseh

old

Prop

ertie

sCo

mpu

ter

&

Acc

esso

ries

Vehi

cles

Furn

iture

&

Fixt

ure

Mac

hine

ryEq

uipm

ent &

Ot

hers

Tota

l

Cost

As

on S

hraw

an 1

, 207

4 8

29,6

37,4

10

162

,658

,358

1

75,2

98,7

35

141

,951

,293

2

69,9

46,4

85

56,

685,

551

269

,179

,706

9

9,65

2,10

7 2

,005

,009

,644

A

dditi

on d

urin

g th

e Ye

arA

cqui

sitio

n -

-

-

-

-

-

-

-

-

Ca

pita

lizat

ion

-

6,1

65,6

30

62,

938,

078

18,

059,

946

59,

274,

670

19,

261,

613

90,

594,

152

12,

481,

750

268

,775

,840

D

ispo

sal d

urin

g th

e ye

ar -

-

(1

,013

,363

) -

(1

8,69

2,29

6) (1

54,8

03)

(13,

282,

797)

(88,

300)

(33,

231,

560)

Adj

ustm

ent/

Rev

alua

tion

-

-

-

-

-

-

-

-

Bal

ance

as

on A

shad

end

207

5 8

29,6

37,4

10

168

,823

,988

2

37,2

23,4

50

160

,011

,239

3

10,5

28,8

59

75,

792,

360

346

,491

,060

1

12,0

45,5

57

2,2

40,5

53,9

24

Add

ition

dur

ing

the

Year

Acq

uisi

tion

-

-

-

-

-

-

-

-

-

Capi

taliz

atio

n -

1

,572

,465

2

0,16

1,12

3 2

7,17

3,07

0 8

4,54

5,15

7 8

,574

,593

5

3,52

4,03

5 3

,627

,320

1

99,1

77,7

63

Dis

posa

l dur

ing

the

year

(5,5

66,0

05)

-

-

-

(50,

402,

599)

-

(853

,351

) -

(5

6,82

1,95

5)A

djus

tmen

t/R

eval

uatio

n -

-

-

-

-

-

-

-

B

alan

ce a

s on

Ash

ad e

nd 2

076

824

,071

,405

1

70,3

96,4

53

257

,384

,573

1

87,1

84,3

09

344

,671

,417

8

4,36

6,95

3 3

99,1

61,7

45

115

,672

,877

2

,382

,909

,732

Dep

reci

atio

n an

d Im

pair

men

tA

s on

Shr

awan

1,

2074

-

34,

201,

872

92,

650,

073

87,

566,

169

108

,321

,146

4

3,33

1,05

4 1

33,9

15,0

44

68,

405,

181

568

,390

,538

D

epre

ciat

ion

char

ge fo

r the

Yea

r -

4

,030

,658

1

9,20

6,51

5 1

7,21

1,68

9 5

0,55

0,12

7 4

,669

,185

3

7,63

6,03

0 8

,537

,299

1

41,8

41,5

03

Impa

irmen

t for

the

year

-

Dis

posa

ls

-

-

(818

,586

) -

(1

4,99

3,14

8) (1

33,8

51)

(13,

220,

338)

(81,

767)

(29,

247,

691)

Adj

ustm

ent

-

-

-

-

-

-

-

-

-

As

on A

shad

end

207

5 -

3

8,23

2,53

1 1

11,0

38,0

02

104

,777

,858

1

43,8

78,1

25

47,

866,

388

158

,330

,735

7

6,86

0,71

2 6

80,9

84,3

50

Dep

reci

atio

n ch

arge

for t

he Y

ear

-

4,1

03,1

40

23,

971,

209

19,

774,

897

57,

375,

668

6,5

36,2

60

43,

221,

296

8,7

10,1

94

163

,692

,664

Im

pairm

ent f

or th

e ye

ar -

D

ispo

sals

-

-

-

-

(3

8,84

7,20

9) -

(8

18,7

77)

-

(39,

665,

986)

Adj

ustm

ent

-

-

-

As

on A

shad

end

207

6 -

4

2,33

5,67

1 1

35,0

09,2

10

124

,552

,755

1

62,4

06,5

83

54,

402,

647

200

,733

,254

8

5,57

0,90

7 8

05,0

11,0

27

Capi

tal W

ork

in P

rogr

ess

Net

Boo

k Va

lue

As

on A

shad

end

207

4 8

29,6

37,4

10

128

,456

,486

8

2,64

8,66

2 5

4,38

5,12

3 1

61,6

25,3

39

13,

354,

497

135

,264

,662

3

1,24

6,92

7 1

,436

,619

,106

A

s on

Ash

ad e

nd 2

075

829

,637

,410

1

30,5

91,4

58

126

,185

,448

5

5,23

3,38

1 1

66,6

50,7

34

27,

925,

972

188

,160

,325

3

5,18

4,84

5 1

,559

,569

,574

A

s on

Ash

ad e

nd 2

076

824

,071

,405

1

28,0

60,7

82

122

,375

,362

6

2,63

1,55

4 1

82,2

64,8

34

29,

964,

306

198

,428

,490

3

0,10

1,97

1 1

,577

,898

,704


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Goo

dwill

and

Inta

ngib

le A

sset

s4.

14

Part

icul

ars

Gro

up

Goo

dwill

So� w

are

Othe

rTo

tal

Purc

hase

dD

evel

oped

Cost

As

on S

hraw

an 1

, 20

74 -

4

7,13

4,42

0 -

-

4

7,13

4,42

0 A

dditi

on d

urin

g th

e Ye

ar -

-

-

-

-

A

cqui

sitio

n -

-

-

-

-

Ca

pita

lizat

ion

-

12,

753,

198

-

-

12,

753,

198

Dis

posa

l dur

ing

the

year

-

-

-

-

-

Adj

ustm

ent/

Rev

alua

tion

-

-

-

-

-

Bal

ance

as

on A

shad

end

207

5 -

5

9,88

7,61

9 -

-

5

9,88

7,61

9 -

Add

ition

dur

ing

the

Year

-

Acq

uisi

tion

-

-

-

-

-

Capi

taliz

atio

n -

1

07,6

16,5

83

-

-

107

,616

,583

D

ispo

sal d

urin

g th

e ye

ar -

-

-

-

-

A

djus

tmen

t/R

evlu

atio

n -

-

-

-

-

B

alan

ce a

s on

Ash

ad e

nd 2

076

-

167

,504

,201

-

-

1

67,5

04,2

01

-

Am

ortiz

atio

n an

d Im

pair

men

t -

A

s on

Shr

awan

1,

2074

-

31,

049,

514

-

-

31,

049,

514

Am

ortiz

atio

n ch

arge

for t

he Y

ear

-

6,1

94,2

94

-

-

6,1

94,2

94

Impa

irmen

t for

the

year

-

-

-

-

-

Dis

posa

ls

-

-

-

-

-

Adj

ustm

ent

-

-

-

-

-

As

on A

shad

end

207

5 -

3

7,24

3,80

8 -

-

3

7,24

3,80

8 -

Am

ortiz

atio

n ch

arge

for t

he Y

ear

-

13,

587,

223

-

-

13,

587,

223

Impa

irmen

t for

the

year

-

-

-

-

-

Dis

posa

ls

-

-

-

-

-

Adj

ustm

ent

-

-

-

-

-

As

on A

shad

end

207

6 -

5

0,83

1,03

1 -

-

5

0,83

1,03

1 -

Capi

tal W

ork

in P

rogr

ess

-

-

Net

Boo

k Va

lue

-

As

on A

shad

end

207

4 -

1

6,08

4,90

6 -

-

1

6,08

4,90

6 A

s on

Ash

ad e

nd 2

075

-

22,

643,

811

-

-

22,

643,

811

As

on A

shad

end

207

6 -

1

16,6

73,1

71

-

-

116

,673

,171


Part

icul

ars

NM

B

Goo

dwill

So� w

are

Othe

rTo

tal

Purc

hase

dD

evel

oped

Cost

As

on S

hraw

an 1

, 20

74 -

4

5,88

6,62

7 -

-

4

5,88

6,62

7 A

dditi

on d

urin

g th

e Ye

ar -

-

-

-

-

A

cqui

sitio

n -

-

-

-

-

Ca

pita

lizat

ion

-

12,

210,

798

-

-

12,

210,

798

Dis

posa

l dur

ing

the

year

-

-

-

-

-

Adj

ustm

ent/

Rev

alua

tion

-

-

-

-

-

Bal

ance

as

on A

shad

end

207

5 -

5

8,09

7,42

6 -

-

5

8,09

7,42

6

Add

ition

dur

ing

the

Year

Acq

uisi

tion

-

-

-

-

-

Capi

taliz

atio

n -

1

06,4

55,2

82

-

-

106

,455

,282

D

ispo

sal d

urin

g th

e ye

ar -

-

-

-

-

A

djus

tmen

t/R

evlu

atio

n -

-

-

-

-

B

alan

ce a

s on

Ash

ad e

nd 2

076

-

164

,552

,707

-

-

1

64,5

52,7

07

Am

ortiz

atio

n an

d Im

pair

men

tA

s on

Shr

awan

1,

2074

-

30,

189,

482

-

-

30,

189,

482

Am

ortiz

atio

n ch

arge

for t

he Y

ear

-

5,8

53,7

35

-

-

5,8

53,7

35

Impa

irmen

t for

the

year

-

-

-

-

-

Dis

posa

ls

-

-

-

-

-

Adj

ustm

ent

-

-

-

-

-

As

on A

shad

end

207

5 -

3

6,04

3,21

7 -

-

3

6,04

3,21

7

Am

ortiz

atio

n ch

arge

for t

he Y

ear

-

13,

100,

691

-

-

13,

100,

691

Impa

irmen

t for

the

year

-

-

-

-

-

Dis

posa

ls

-

-

-

-

-

Adj

ustm

ent

-

-

-

-

As

on A

shad

end

207

6 -

4

9,14

3,90

8 -

-

4

9,14

3,90

8

Capi

tal W

ork

in P

rogr

ess

Net

Boo

k Va

lue

As

on A

shad

end

207

4 -

1

5,69

7,14

6 -

-

1

5,69

7,14

6 A

s on

Ash

ad e

nd 2

075

-

22,

054,

209

-

-

22,

054,

209

As

on A

shad

end

207

6 -

1

15,4

08,8

00

-

-

115

,408

,800


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Def

erre

d Ta

x4.

15

The

crea

tion

of D

efer

red

Tax

Ass

ets

(DTA

) an

d D

efer

red

Tax

Liab

ilitie

s (D

TL)

has

a be

arin

g on

the

com

puta

tion

of c

apita

l ade

quac

y ra

tio a

nd b

anks

’ abi

lity

to d

ecla

re d

ivid

ends

. DTA

re

pres

ents

una

bsor

bed

depr

ecia

tion,

diff

eren

ce b

etw

een

carr

ying

am

ount

as

per b

ooks

of a

ccou

nts

and

tax

incl

udin

g ca

rry

forw

ard

loss

es w

hich

can

set

-off

agai

nst a

sset

s fu

ture

taxa

ble

inco

me

whi

ch is

con

side

red

as ti

min

g di

ff ere

nce.

DTA

has

an

eff e

ct o

f dec

reas

ing

futu

re in

com

e ta

x pa

ymen

ts w

hich

indi

cate

s th

at th

ey a

re p

repa

id in

com

e ta

xes

and

mee

t the

defi

niti

on o

f as

sets

. DTA

is d

educ

ted

from

Tie

r I c

apita

l, if

defe

rred

tax

rese

rve

is in

clud

ed a

lread

y th

ereo

n. D

efer

red

tax

(ass

ets)

/lia

bilit

ies

have

bee

n re

cogn

ised

as

per t

he p

rovi

sion

of N

epal

Acc

ount

ing

Stan

dard

(NA

S -0

9)

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

31

Ash

ad 2

076

Def

erre

d Ta

x A

sset

sD

efer

red

Tax

Liab

ilitie

s

Net

Def

erre

d Ta

x A

sset

s/

(Lia

bilit

ies)

Def

erre

d Ta

x A

sset

sD

efer

red

Tax

Liab

ilitie

s

Net

Def

erre

d Ta

x A

sset

s/

(Lia

bilit

ies)

Def

erre

d ta

x on

tem

poro

ry d

iff er

ence

s on

follo

win

g ite

ms

Loan

and

Adv

ance

to B

/FIs

3

4,14

7,98

5 3

4,14

7,98

5 -

3

4,14

7,98

5 3

4,14

7,98

5 -

Loan

s an

d ad

vanc

es to

cus

tom

ers

1,3

64,7

77,4

31

1,4

07,3

56,9

62

(42,

579,

530)

1,3

64,7

77,4

31

1,3

64,7

77,4

31

-

Inve

stm

ent p

rope

rtie

s -

-

-

-

-

-

Inve

stm

ent s

ecur

ities

-

(322

,258

) 3

22,2

58

-

(1,0

16,8

36)

1,0

16,8

36

Prop

erty

& e

quip

men

t 1

,734

,188

,938

1

,719

,114

,233

1

5,07

4,70

4 1

,698

,480

,217

1

,693

,307

,503

5

,172

,714

Empl

oyee

s' d

efi n

ed b

enefi

t pl

an 2

17,0

64,3

10

-

217

,064

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1

98,6

29,8

98

198

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Leas

e lia

bilit

ies

8,2

71,3

73

-

8,2

71,3

73

8,2

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73

-

8,2

71,3

73

Prov

isio

ns 9

,078

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-

9

,078

,445

9

,078

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-

9

,078

,445

Def

erre

d ta

x on

tem

poro

ry d

iff er

ence

s 1

,010

,258

,544

9

48,0

89,0

76

62,

169,

468

994

,015

,605

9

27,3

64,8

25

66,

650,

780

Def

erre

d ta

x on

car

ry fo

rwar

d of

unu

sed

tax

loss

es 3

,389

,813

-

3

,389

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3

,389

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-

3

,389

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Def

erre

d ta

x du

e to

cha

nges

in ta

x ra

te -

-

Net

Def

erre

d ta

x as

set/

(liab

ilitie

s) a

s on

31

Ash

ad 2

076

65,

559,

281

70,

040,

593

Def

erre

d ta

x (a

sset

)/lia

bilit

ies

as o

n 3

2 A

shad

207

5 (6

4,06

6,99

0) (6

6,86

9,01

1)

Orig

inat

ion/

(Rev

ersa

l) du

ring

the

year

1,4

92,2

90

3,1

71,5

81

Def

erre

d ta

x ex

pens

e/(in

com

e) re

cogn

ised

in p

rofi t

or

loss

(1,8

77,0

83)

(3,4

39,2

37)

Def

erre

d ta

x ex

pens

e/(in

com

e) re

cogn

ised

in o

ther

co

mpr

ehen

sive

inco

me

384

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2

67,6

56

Def

erre

d ta

x ex

pens

e/(in

com

e) re

cogn

ised

in d

irect

ly

in e

quity

-

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Part

icul

ars

Gro

upN

MB

Year

end

ed 3

2 A

shad

207

5Ye

ar e

nded

32

Ash

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Def

erre

d Ta

x A

sset

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Tax

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s

Net

Def

erre

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sset

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(Lia

bilit

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Def

erre

d Ta

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efer

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Tax

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Net

Def

erre

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sset

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(Lia

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Def

erre

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x on

tem

poro

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ence

s on

follo

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Loan

and

Adv

ance

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Loan

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cus

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1,2

31,4

43,3

37

1,2

59,5

58,5

16

(28,

115,

179)

1,2

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43,3

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1,2

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-

Inve

stm

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rope

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5

9,77

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9,77

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5

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Inve

stm

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ecur

ities

-

10,

713,

721

(10,

713,

721)

-

10,

381,

221

(10,

381,

221)

Prop

erty

& e

quip

men

t 9

20,3

90,8

84

787

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1

33,0

23,0

57

876

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7

51,9

86,3

72

124

,994

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Empl

oyee

s' d

efi n

ed b

enefi

t pl

an 1

64,9

91,0

06

-

164

,991

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1

51,2

14,5

91

151

,214

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Leas

e lia

bilit

ies

-

-

-

-

-

Prov

isio

ns 5

,544

,336

5

84,5

66

4,9

59,7

70

5,5

44,3

36

-

5,5

44,3

36

Def

erre

d ta

x on

tem

poro

ry d

iff er

ence

s 6

95,3

66,7

81

634

,672

,978

6

0,67

7,17

8 6

79,5

54,8

65

616

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6

3,47

9,19

8

Def

erre

d ta

x on

car

ry fo

rwar

d of

unu

sed

tax

loss

es 3

,389

,813

3

,389

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-

3

,389

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Def

erre

d ta

x du

e to

cha

nges

in ta

x ra

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-

Net

Def

erre

d ta

x as

set/

(liab

ilitie

s) a

s on

32

Ash

ad 2

075

64,

066,

990

66,

869,

011

Def

erre

d ta

x (a

sset

)/lia

bilit

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as o

n 3

1 A

shad

207

4 7

2,03

3,51

0 6

9,19

7,22

5

Orig

inat

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(Rev

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l) du

ring

the

year

(136

,100

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) (1

36,0

66,2

37)

Def

erre

d ta

x ex

pens

e/(in

com

e) re

cogn

ised

in p

rofi t

or

loss

(116

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,096

) (1

17,0

93,7

34)

Def

erre

d ta

x ex

pens

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com

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cogn

ised

in o

ther

co

mpr

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sive

inco

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403)

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501)

Def

erre

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cogn

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eq

uity

-

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Not

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Con

solid

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Fin

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tate

men

tsFo

r the

yea

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1 A

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6

Othe

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sets

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Othe

r Ass

et in

clud

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coun

ts re

ceiv

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, int

eres

t rec

eiva

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acc

rued

inco

me,

pre

paym

ents

, dep

osit,

def

erre

d em

ploy

ee b

enefi

ts a

nd s

tatio

nery

sto

ck d

etai

ls p

rese

nted

as

follo

ws:

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

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Ass

ets

held

for s

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-

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Othe

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ban

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ass

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-

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Bill

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ceiv

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-

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-

-

Acc

ount

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ceiv

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55,

465,

547

478

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2

9,26

8,89

8 3

0,33

4,12

8

Acc

rued

inco

me

16,

847,

224

12,

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16,

847,

224

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434,

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Prep

aym

ents

and

dep

osit

72,

841,

593

43,

227,

751

72,

749,

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42,

388,

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Inco

me

tax

depo

sit

63,

703,

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63,

703,

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63,

703,

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63,

703,

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Def

erre

d em

ploy

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xpen

ditu

re 7

39,8

78,7

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7

39,8

78,7

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Othe

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Adv

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d an

d Si

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228

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-

2

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Stoc

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Sta

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8,71

8,33

9 1

9,73

6,71

9 1

7,77

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8 1

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1,77

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Fuel

Sto

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3

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3

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5

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d M

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3

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Adv

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Proj

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38,

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38,

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eiva

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from

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sha

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lder

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e A

llotm

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-

3,8

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49,2

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-

3,8

01,2

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Othe

rs 1

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,807

1

,220

,655

3

92,8

68

208

,124

Tota

l 1

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,893

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4

,909

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1

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4

,458

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The

prov

isio

n ou

tsta

ndin

g as

of A

shad

end

207

6 of

NM

B in

clud

es IP

O re

ceiv

able

s of

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le B

ank

of A

sia

and

depo

sit o

f cap

ital m

erch

ant fi

nan

ce a

mou

ntin

g N

PR. 5

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and

N

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resp

ectiv

ely

and

are

nette

d off

with

rece

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and

Cash

and

Cas

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uiva

lent

resp

ectiv

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Due

to B

ank

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Fina

ncia

l Ins

titut

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4.17

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

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6A

s at

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Ash

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Mon

ey m

arke

t dep

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-

-

-

-

Inte

rban

k bo

rrow

ing

-

500

,000

,000

-

5

00,0

00,0

00

Othe

r dep

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from

BFI

s -

-

-

-

Settl

emen

t and

cle

arin

g ac

coun

ts -

-

-

-

Othe

r dep

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from

BFI

s 6

24,3

64,9

96

536

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,951

6

24,3

64,9

96

536

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Tota

l 6

24,3

64,9

96

1,0

36,2

68,9

51

624

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1

,036

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Due

to N

epal

Ras

tra

Ban

k4.

18

Part

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ars

Gro

upN

MB

As

at 3

1 A

shad

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6A

s at

32

Ash

ad 2

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As

at 3

1 A

shad

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6A

s at

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Ash

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Refi

nan

ce fr

om N

RB

585

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6

60,0

71,6

41

585

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6

60,0

71,6

41

Stan

ding

Liq

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ty F

acili

ty

-

-

-

-

Lend

er o

f las

t rep

ort f

acili

ty fr

om N

RB

-

-

-

-

Secu

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s so

ld u

nder

repu

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se a

gree

men

ts -

-

-

-

Othe

r pay

able

to N

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2,6

18,2

19,7

10

-

2,6

18,2

19,7

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-

Tota

l 3

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6

60,0

71,6

41

3,2

03,5

23,0

72

660

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The

Ban

k ha

s an

out

stan

ding

bor

row

ing

of N

PR 5

85,3

03,3

62 (S

ched

ule

4.18

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m th

e Ce

ntra

l Ban

k un

der R

efi n

anci

ng F

acili

ty a

vaila

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to F

inan

cial

Inst

itutio

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he o

ther

pay

able

to N

RB

is

pay

able

of L

i.Ka

Acc

ount

s (c

ontr

a) o

f Gov

ernm

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odie

s. D

ue to

Nep

al R

astr

a B

ank

is s

ubse

quen

tly m

easu

red

at a

mor

tised

cos

t.


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

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ed 3

1 A

shad

207

6

Der

ivat

ive

fi nan

cial

inst

rum

ents

4.19

Part

icul

ars

Gro

upN

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As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

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Ash

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Hel

d fo

r tra

ding

Inte

rest

rate

sw

ap -

-

-

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Curr

ency

sw

ap 1

,886

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1

,382

,071

,887

1

,886

,751

,200

1

,382

,071

,887

Forw

ard

exch

ange

con

trac

t 6

,014

,776

,452

5

,312

,931

,206

6

,014

,776

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5

,312

,931

,206

Othe

rs 5

56,8

46,7

77

782

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,798

5

56,8

46,7

77

782

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Hel

d fo

r ri

sk m

anag

emen

t -

-

Inte

rest

rate

sw

ap -

-

-

-

Curr

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sw

ap -

-

-

-

Forw

ard

exch

ange

con

trac

t -

-

-

-

Othe

r -

-

-

-

Tota

l 8

,458

,374

,429

7

,477

,483

,892

8

,458

,374

,429

7

,477

,483

,892

Dep

osits

from

cus

tom

ers

4.20

All

depo

sits

acc

ount

oth

er th

an d

epos

it fr

om b

ank

and

fi nan

cial

inst

itutio

ns (l

ocal

and

fore

ign

bank

and

NR

B)

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Inst

itutio

ns c

usto

mer

s:

Term

dep

osits

28,

320,

801,

308

23,

581,

918,

142

28,

370,

801,

308

23,

671,

918,

142

Call

depo

sits

8,9

51,1

69,6

15

7,5

73,9

42,6

59

9,0

45,5

28,3

30

7,6

41,8

35,7

85

Curr

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epos

its 5

,494

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,104

4

,605

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5

,494

,378

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4

,605

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Othe

r 5

,795

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,079

5

,626

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5

,795

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5

,626

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Indi

vidu

al c

usto

mer

s:

Term

dep

osits

21,

034,

039,

618

22,

161,

841,

630

21,

034,

039,

618

22,

161,

841,

630

Savi

ng d

epos

its 2

8,92

8,44

3,21

0 2

0,55

7,90

9,84

2 2

7,84

5,72

1,81

5 1

9,86

1,38

1,18

9

Curr

ent d

epos

its 1

88,7

42,4

94

184

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1

88,7

42,4

94

184

,616

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Othe

r 1

17,6

79,2

19

216

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1

17,6

79,2

19

216

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Tota

l 9

8,83

0,66

4,64

7 8

4,50

9,50

2,74

6 9

7,89

2,30

1,96

7 8

3,97

0,86

7,21

9

Der

ivat

ives

are

fi na

ncia

l ins

trum

ents

that

der

ive

thei

r va

lue

in re

spon

se to

cha

nges

in in

tere

st ra

tes,

fi na

ncia

l ins

trum

ent p

rices

etc

. Der

ivat

ives

are

cat

egor

ised

as

trad

ing

unle

ss th

ey a

re

desi

gnat

ed a

s he

dgin

g in

stru

men

ts. A

ll de

rivat

ives

are

initi

ally

reco

gnis

ed a

nd s

ubse

quen

tly m

easu

red

at fa

ir va

lue,

with

all

trad

ing

gain

s or

loss

es re

cogn

ised

in th

e St

atem

ent o

f Pro

fi t o

r Lo

ss u

nder

Net

trad

ing

Inco

me.

Fai

r val

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det

erm

ined

usi

ng th

e fo

rwar

d m

arke

t rat

es ru

ling

on th

e re

port

ing

date

.


4.20

.1: C

urre

ncy

wis

e an

alys

is o

f dep

osit

from

cus

tom

ers

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Nep

ales

e ru

pee

93,

284,

403,

713

82,

092,

407,

581

92,

346,

041,

033

81,

553,

772,

054

Indi

an ru

pee

-

-

-

-

Uni

ted

Stat

e do

llar

4,2

22,4

11,2

07

2,1

55,4

35,5

84

4,2

22,4

11,2

07

2,1

55,4

35,5

84

Gre

at B

ritai

n po

und

24,

019,

388

31,

385,

378

24,

019,

388

31,

385,

378

Euro

1,0

98,2

59,9

06

39,

565,

485

1,0

98,2

59,9

06

39,

565,

485

Jape

nese

yen

8,2

88,5

56

-

8,2

88,5

56

-

Chin

ese

yuan

183

,800

,655

1

89,1

52,3

96

183

,800

,655

1

89,1

52,3

96

Othe

r 9

,481

,223

1

,556

,323

9

,481

,223

1

,556

,323

Tota

l 9

8,83

0,66

4,64

7 8

4,50

9,50

2,74

6 9

7,89

2,30

1,96

7 8

3,97

0,86

7,21

9

Bor

row

ing

4.21

The

bank

has

bro

ught

off s

hore

bor

row

ing

amou

ntin

g U

SD 1

5 M

io. f

rom

Inte

rnat

iona

l Fin

anci

al C

orpo

ratio

n(IF

C), U

SD 1

5 M

io. f

rom

CD

C G

roup

, Lon

don

and

NPR

. 169

.56

Mio

. fro

m M

icro

sm

all a

nd m

ediu

m e

nter

pris

es b

onds

, S.A

, Lux

embo

urg.

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Dom

estic

Bor

row

ing

Nep

al G

over

nmen

t -

-

-

-

Othe

r Ins

titut

ions

1,3

60,2

40,2

09

1,1

82,0

81,8

98

-

-

Othe

r -

-

-

-

Sub

tota

l 1

,360

,240

,209

1

,182

,081

,898

-

-

Fore

ign

Bor

row

ing

Fore

ign

Ban

k an

d Fi

nanc

ial I

nstit

utio

ns 3

,468

,060

,000

-

3

,468

,060

,000

-

Mul

tilat

eral

Dev

elop

men

t Ban

ks -

-

-

-

Othe

r Ins

titut

ions

-

-

-

-

Sub

tota

l 3

,468

,060

,000

-

3

,468

,060

,000

-

Tota

l 4

,828

,300

,209

1

,182

,081

,898

3

,468

,060

,000

-


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Prov

isio

ns4.

22

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Prov

isio

ns fo

r red

unda

ncy

-

-

-

-

Prov

isio

n fo

r res

truc

turin

g -

-

-

-

Pend

ing

lega

l iss

ues

and

tax

litig

atio

n -

-

-

-

Oner

ous

cont

ract

s -

-

-

-

Othe

r 2

24,2

19

73,

556

-

Tota

l 2

24,2

19

73,

556

-

-

4.22

.1: M

ovem

ent i

n pr

ovis

ion

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Bal

ance

at S

hraw

an 1

73,

556

-

-

-

Prov

isio

ns m

ade

durin

g th

e ye

ar 1

35,6

65

73,

556

-

-

Prov

isio

ns u

sed

durin

g th

e ye

ar -

-

-

-

Prov

isio

ns re

vers

ed d

urin

g th

e ye

ar 1

4,99

9 -

-

-

Unw

ind

of d

isco

unt

-

-

-

-

Bal

ance

at A

shad

end

224

,219

7

3,55

6 -

-


Othe

r lia

bilit

ies

4.23

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Liab

ility

for e

mpl

oyee

s de

fi ned

ben

efi t

oblig

atio

ns 7

3,23

0,65

3 7

2,46

2,16

3 5

9,44

5,25

0 6

0,86

4,64

1

Liab

ility

for l

ong-

serv

ice

leav

e 1

38,8

53,7

62

86,

044,

161

128

,750

,654

8

2,60

5,30

2

Shor

t-te

rm e

mpl

oyee

ben

efi ts

1,0

28,4

42

9,5

40

-

-

Bill

s pa

yabl

e 9

7,62

0,48

7 9

8,39

7,76

3 9

7,62

0,48

7 9

8,39

7,76

3

Cred

itors

and

acc

rual

s 1

,374

,872

,190

9

14,5

28,1

61

923

,806

,589

5

15,2

81,0

16

Inte

rest

pay

able

on

depo

sit

419

,841

,689

2

21,6

04,5

23

419

,841

,689

2

21,6

04,5

23

Inte

rest

pay

able

on

borr

owin

g 3

8,55

6,05

1 6

,359

,178

3

8,53

1,86

5 6

,359

,178

Liab

ilitie

s on

def

ered

gra

nt in

com

e 2

,233

,207

2

,925

,180

-

-

Unp

aid

Div

iden

d 5

,128

,793

1

2,31

7,36

7 5

,128

,793

1

2,31

7,36

7

Liab

ilitie

s un

der F

inan

ce L

ease

8,2

71,3

73

-

8,2

71,3

73

-

Empl

oyee

bon

us p

ayab

le 3

79,0

65,3

97

299

,473

,585

3

60,8

89,3

15

285

,146

,674

Othe

rs:

-

-

TDS

Paya

ble

103

,798

,365

1

34,3

66,0

91

102

,551

,154

1

22,3

04,6

36

Aud

it Fe

e Pa

yabl

e 1

,258

,075

1

,258

,075

1

,118

,700

1

,118

,700

Othe

rs 3

2,19

4,88

9 2

1,87

0,77

8 -

-

Tota

l 2

,675

,953

,373

1

,871

,616

,566

2

,145

,955

,868

1

,405

,999

,800


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

4.23

.1: D

efi n

ed b

enefi

t ob

ligat

ions

The

defi n

ed-b

enefi

t ob

ligat

ion

is c

alcu

late

d an

nual

ly b

y an

inde

pend

ent a

ctua

ry u

sing

the

proj

ecte

d un

it m

etho

d. T

he B

ank

oper

ates

a d

efi n

ed c

ontr

ibut

ion

plan

as

prov

iden

t fun

d co

ntri-

butio

n of

its

empl

oyee

s an

d de

fi ned

ben

efi t

plan

for t

he G

ratu

ity p

aym

ent r

equi

rem

ent u

nder

its

staff

rul

es. F

or d

efi n

ed c

ontr

ibut

ion

plan

, the

Ban

k pa

ys c

ontr

ibut

ions

to a

n in

depe

nden

tly

adm

inis

tere

d re

tirem

ent f

und

on a

man

dato

ry b

asis

, and

suc

h am

ount

s ar

e ch

arge

d to

ope

ratin

g ex

pens

es. T

he B

ank

has

no fu

rthe

r pa

ymen

t obl

igat

ions

onc

e th

e co

ntrib

utio

ns h

ave

been

pai

d. F

or fu

nded

defi

ned

ben

efi t

plan

s, th

e lia

bilit

y re

cogn

ised

in th

e fi n

anci

al s

tate

men

t is

the

pres

ent v

alue

of t

he d

efi n

ed b

enefi

t ob

ligat

ion

less

the

fair

valu

e of

pla

n as

sets

. Suc

h ob

ligat

ions

are

est

imat

ed o

n th

e ba

sis

of th

e ac

tuar

ial a

ssum

ptio

ns.

The

amou

nts

reco

gnis

ed in

the

stat

emen

t of fi

nan

cial

pos

ition

are

as

follo

ws:

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Pres

ent v

alue

of u

nfun

ded

oblig

atio

ns 1

53,6

25,1

39

93,

251,

053

130

,414

,488

8

3,37

8,26

0

Pres

ent v

alue

of f

unde

d ob

ligat

ions

257

,307

,396

1

91,6

83,8

09

257

,307

,396

1

91,6

83,8

09

Tota

l pre

sent

val

ue o

f obl

igat

ions

410

,932

,535

2

84,9

34,8

62

387

,721

,884

2

75,0

62,0

69

Fair

valu

e of

pla

n as

sets

197

,862

,146

1

30,8

19,1

68

197

,862

,146

1

30,8

19,1

68

Pres

ent v

alue

of n

et o

blig

atio

ns 1

89,8

59,7

38

144

,242

,901

1

89,8

59,7

38

144

,242

,901

Rec

ogni

sed

liabi

lity

for d

efi n

ed b

enefi

t ob

ligat

ions

410

,932

,535

2

84,9

34,8

62

387

,721

,884

2

75,0

62,0

69


4.23

.2: P

lan

asse

ts

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Plan

ass

ets

com

pris

e -

-

-

-

Equi

ty s

ecur

ities

-

-

-

-

Gov

ernm

ent b

onds

-

-

-

-

Ban

k de

posi

t 1

97,8

62,1

46

130

,819

,168

1

97,8

62,1

46

130

,819

,168

Othe

r -

-

-

-

Tota

l 1

97,8

62,1

46

130

,819

,168

1

97,8

62,1

46

130

,819

,168

4.23

.3: M

ovem

ent i

n th

e pr

esen

t val

ue o

f defi

ned

ben

efi t

oblig

atio

ns

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Defi

ned

ben

efi t

oblig

atio

ns a

t Shr

awan

1 2

94,7

91,2

46

204

,297

,939

2

75,0

62,0

69

195

,713

,617

Act

uaria

l los

ses

27,

201,

771

34,

005,

777

25,

980,

978

36,

237,

227

Ben

efi ts

pai

d by

the

plan

(18,

960,

091)

(11,

993,

820)

(17,

729,

820)

(9,7

06,0

97)

Curr

ent s

ervi

ce c

osts

and

inte

rest

1

07,8

99,6

09

58,

624,

966

104

,408

,657

5

2,81

7,32

2

Defi

ned

ben

efi t

oblig

atio

ns a

t Ash

ad e

nd 4

10,9

32,5

35

284

,934

,862

3

87,7

21,8

84

275

,062

,069


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

4.23

.4: M

ovem

ent i

n th

e fa

ir v

alue

of p

lan

asse

ts

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Fair

valu

e of

pla

n as

sets

at S

hraw

an 1

130

,819

,168

6

1,02

5,09

6 1

30,8

19,1

68

61,

025,

096

Cont

ribut

ions

pai

d in

to th

e pl

an 6

0,86

4,64

1 7

4,78

0,28

5 6

0,86

4,64

1 7

4,78

0,28

5

Ben

efi ts

pai

d du

ring

the

year

(9,4

19,5

48)

(4,9

86,2

13)

(9,4

19,5

48)

(4,9

86,2

13)

Act

uaria

l (lo

sses

) gai

ns 1

5,59

7,88

5 -

1

5,59

7,88

5 -

Expe

cted

retu

rn o

n pl

an a

sset

s -

-

-

-

Fair

val

ue o

f pla

n as

sets

at A

shad

end

197

,862

,146

1

30,8

19,1

68

197

,862

,146

1

30,8

19,1

68

4.23

.5: A

mou

nt re

cogn

ised

in p

rofi t

or

loss

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Curr

ent s

ervi

ce c

osts

81,

836,

905

40,

208,

342

81,

051,

928

37,

033,

544

Inte

rest

on

oblig

atio

n 3

4,16

2,52

3 2

7,61

7,12

4 3

2,46

9,86

7 2

6,99

4,15

6

Expe

cted

retu

rn o

n pl

an a

sset

s -

-

-

-

Tota

l 1

15,9

99,4

28

67,

825,

466

113

,521

,795

6

4,02

7,70

0

4.23

.6: A

mou

nt re

cogn

ised

in o

ther

com

preh

ensi

ve in

com

e

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Act

uria

l (ga

in)/

loss

(2

,932

,011

) (1

7,32

5,02

2) (8

88,9

69)

(17,

480,

123)

Tota

l (2

,932

,011

) (1

7,32

5,02

2) (8

88,9

69)

(17,

480,

123)


4.23

.7: A

ctua

rial

ass

umpt

ions

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Dis

coun

t rat

e9.

00%

9.00

%9.

00%

9.00

%

Expe

cted

retu

rn o

n pl

an a

sset

-

-

-

-

Futu

re s

alar

y in

crea

se8.

00%

8.00

%8.

00%

8.00

%

With

draw

al ra

te16

.00%

16.0

0%16

.00%

16.0

0%

Ther

e is

no

plan

ass

ets

for t

he s

ubsi

diar

ies

and

the

bank

dep

osits

the

fund

at t

he a

ccou

nt m

aint

aine

d at

CIT

for g

ratu

ity p

aym

ent a

s pe

r act

uary

repo

rt.

Deb

t sec

uriti

es is

sued

4.24

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Deb

t sec

uriti

es is

sued

des

igna

ted

as a

t fai

r val

ue th

roug

h pr

ofi t

or lo

ss -

-

Deb

t sec

uriti

es is

sued

at a

mor

tised

cos

t 2

,239

,236

,412

5

17,5

47,9

45

2,2

39,2

36,4

12

517

,547

,945

Tota

l 2

,239

,236

,412

5

17,5

47,9

45

2,2

39,2

36,4

12

517

,547

,945

The

Ban

k ha

d is

sued

non

-con

vert

ible

"7%

NM

B D

eben

ture

207

7" o

n 6

Falg

un 2

071

(18

Febr

uary

201

5) a

mou

ntin

g to

NPR

500

Mill

ion.

The

Deb

entu

re, w

hich

was

fully

sub

scrib

ed, h

as a

m

atur

ity p

erio

d of

5 y

ears

6 m

onth

s. T

he b

ank

has

also

issu

ed 3

0 La

cs u

nits

of N

MB

Deb

entu

re 2

085

with

the

face

val

ue o

f NPR

. 1,0

00 p

er u

nit a

mou

ntin

g N

PR 3

Bill

ion

at th

e ra

te o

f 10%

fo

r the

per

iod

of 1

0 ye

ars.

The

Gen

eral

pub

lic h

ad s

ubsc

ribed

99,

505

units

am

ount

ing

NPR

. 9,9

5,05

,000

and

15,

85,0

00 u

nits

am

ount

ing

NPR

. 1,5

8,50

,00,

000

was

sub

scrib

ed th

roug

h Pr

ivat

e Pl

acem

ents

. The

fi na

l allo

tmen

t of N

PR. 1

,68,

45,0

5,00

0 to

the

subs

crib

ed u

nit h

olde

rs w

as m

ade

on 2

9 Ch

aitr

a 20

75. T

he d

eben

ture

has

bee

n m

easu

red

at a

mor

tized

cos

t

Subo

rdin

ated

Lia

bilit

ies

4.25

The

bank

doe

s no

t hav

e an

y su

bord

inat

e lia

bilit

ies

as o

n re

port

ing

date

.

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Red

eem

able

pre

fere

nce

shar

es -

-

-

-

Irred

emab

le c

umul

ativ

e pr

efer

ence

sha

res

(liab

ilitie

s co

mpo

nent

) -

-

-

-

Othe

r -

-

-

-

Tota

l -

-

-

-


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Shar

e ca

pita

l 4.

26

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Ordi

nary

sha

res

9,6

18,1

62,6

52

7,6

03,2

90,6

34

9,6

18,1

62,6

52

7,6

03,2

90,6

34

Conv

ertib

le p

refe

renc

e sh

ares

(equ

ity c

ompo

nent

onl

y) -

-

-

-

Irred

emab

le p

refe

renc

e sh

ares

(equ

ity c

ompo

nent

onl

y) -

-

-

-

Perp

etua

l deb

t (eq

uity

com

pone

nt o

nly)

-

-

-

-

Tota

l 9

,618

,162

,652

7

,603

,290

,634

9

,618

,162

,652

7

,603

,290

,634

4.26

.1: O

rdin

ary

shar

es

Part

icul

ars

NM

B

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Aut

hori

zed

Capi

tal

100,

000,

000

Ordi

nary

sha

re o

f Rs.

100

eac

h 1

0,00

0,00

0,00

0 1

0,00

0,00

0,00

0

Issu

ed c

apita

l

96,1

81,6

27 O

rdin

ary

shar

e of

Rs.

100

eac

h 9

,618

,162

,652

7

,603

,290

,634

Subs

crib

ed a

nd p

aid

up c

apita

l

96,1

81,6

27 O

rdin

ary

shar

e of

Rs.

100

eac

h 9

,618

,162

,652

7

,603

,290

,634

Tota

l 9

,618

,162

,652

7

,603

,290

,634


4.26

.2: O

rdin

ary

shar

e ow

ners

hip

Part

icul

ars

NM

B

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Perc

ent

Am

ount

Perc

ent

Am

ount

Dom

estic

ow

ners

hip

77.

77

7,4

80,0

04,6

50

77.

77

5,9

13,0

47,2

11

Nep

al G

over

nmen

t -

-

-

-

"A" c

lass

lice

nsed

inst

itutio

ns -

-

-

-

Othe

r lic

ense

d in

titut

ions

-

-

-

-

Othe

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titut

ions

13.

70

1,3

17,7

08,1

00

14.

87

1,1

30,2

45,4

65

Publ

ic 6

4.07

6

,162

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,550

6

2.90

4

,782

,801

,746

Othe

r -

-

-

-

Fore

ign

owne

rshi

p 2

2.23

2

,138

,158

,002

2

2.23

1

,690

,243

,423

Tota

l 1

00.0

0 9

,618

,162

,652

1

00.0

0 7

,603

,290

,634

The

paid

up

shar

e ca

pita

l of t

he B

ank

has

mov

ed o

ver t

he y

ears

as

follo

ws:

Fina

ncia

l Yea

rCu

mul

ativ

e Pa

id

up C

apita

l NPR

Rem

arks

2006

-07(

2063

-64

BS)

199,

540,

600

Issu

ance

of 3

0% B

onus

Sha

res

2007

-08(

2064

-65

BS)

1,00

0,00

0,00

0Is

suan

ce o

f 1:4

Rig

ht S

hare

s

2008

-09(

2065

-66

BS)

1,42

4,64

1,35

0Is

suan

ce o

f 10%

Bon

us S

hare

s an

d 30

% R

ight

Sha

res

2009

-10(

2066

-67

BS)

1,65

1,65

0,00

0A

uctio

n of

53,

586.

5 re

mai

ning

righ

t sha

res

of F

Y 20

08-0

9 an

d pu

blic

issu

e of

715

,000

sha

res.

2010

-11

(206

7-68

BS)

2,00

0,00

0,00

0Is

suan

ce o

f 10:

21.0

9 rig

ht s

hare

s an

d au

ctio

n of

uns

ubsc

ribed

righ

t sha

res.

2013

-14

(207

0-71

BS)

2,40

0,00

0,00

0Is

suan

ce o

f 20%

Bon

us S

hare

s

2015

-16

(207

2-73

BS)

4,15

4,55

9,32

0Sh

ares

issu

ed to

sha

reho

lder

s of

mer

ged

entit

ies

2015

-16

(207

2-73

BS)

4,48

6,92

4,06

6Is

suan

ce o

f 8%

Bon

us S

hare

s

2016

-17

(207

3-74

BS)

5,43

0,06

2,46

6FM

O’s

addi

tiona

l inv

estm

ent o

f NPR

943

,138

,400

2016

-17

(207

3-74

BS)

6,46

1,77

4,33

4Is

suan

ce o

f 19%

Bon

us S

hare

s

2017

-18

(207

4-75

BS)

7,60

3,29

0,63

4Is

suan

ce o

f FPO

2018

-19

(207

5-76

BS)

9,61

8,16

2,65

2Is

suan

ce o

f 15%

Bon

us S

hare

s fr

om F

Y 20

73/7

4 an

d 10

% B

onus

Sha

res

from

FY

2074

/75

The

22nd

AG

M o

f the

ban

k he

ld o

n 31

Shr

awan

207

5 ha

s ap

prov

ed 1

5% b

onus

sha

res

(sto

ck d

ivid

end)

am

ount

ing

NPR

1,1

40,4

93,5

95 a

nd 2

3rd

AG

M h

eld

on 2

6 Po

ush

2075

has

app

rove

d 10

% s

tock

div

iden

d am

ount

ing

NPR

. 874

,378

,423

.Thi

s ha

s ra

ised

pai

d up

cap

ital o

f the

ban

k to

NPR

9,6

18,1

62,6

52.

Tota

l fra

ctio

nal s

hare

is 7

2,85

5.51

as

on A

shad

end

207

6. F

ract

ion

shar

e us

ually

com

e fr

om is

sue

of b

onus

sha

re a

nd s

plit

of s

hare

als

o.


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Shar

ehol

der'

s N

ame

Shar

e U

nits

% h

oldi

ng

1. N

eder

land

se F

inan

cier

ings

-Maa

tsch

appi

j Voo

r On

twik

kelin

gsla

nden

N.V

. 1

6,34

8,28

8 1

7.00

2. E

mpl

oyee

s Pr

ovid

ent F

und

6,5

99,0

40

6.8

6

3. Y

ong

Lian

Rea

lty S

dn B

hd 5

,033

,290

5

.23

4. G

ayat

ri In

vest

men

t And

Man

agem

ent P

. Ltd

. 2

,366

,426

2

.46

5. N

and

Kis

hore

Rat

hi 2

,010

,983

2

.09

6. D

hana

njay

a Pr

asad

Ach

arya

1,8

24,2

99

1.9

0

7. S

anto

sh R

athi

1,1

87,6

16

1.2

3

8. P

awan

Kum

ar G

olya

n 1

,103

,054

1

.15

9. S

anto

sh D

evi M

urar

ka 9

48,6

47

0.9

9

10. P

urus

hota

m L

al S

angh

ai 8

62,9

95

0.9

0

11. D

inba

ndhu

Agr

awal

639

,623

0

.67

12. A

nant

Kum

ar G

olya

n 6

36,2

11

0.6

6

13. B

alar

am N

eupa

ne 6

32,4

54

0.6

6

14. N

arpa

t Sin

gh J

ain

541

,588

0

.56

15. P

ashu

pati

Mur

arka

538

,740

0

.56

16. A

dity

a Sa

ngha

i 4

95,1

69

0.5

1

17. R

aj K

umar

Goy

al 4

94,0

58

0.5

1

18. A

shok

Kum

ar A

graw

al 4

82,3

57

0.5

0

The

deta

ils o

f sha

reho

lder

s ho

ldin

g sh

ares

abo

ve 0

.5%

as

of A

shad

end

207

6 ar

e gi

ven

belo

w:


Part

icul

ars

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Accr

ued

Inte

rest

on

Loan

s an

d Ad

vanc

es re

cogn

ized

as

Inco

me

591

,317

,341

2

22,6

79,1

76

Prov

isio

n of

Non

- B

anki

ng A

sset

s (In

vesm

ent P

rope

rty)

102

,915

,862

5

9,77

4,62

7 D

efer

red

Tax

Ass

ets

70,

040,

593

66,

869,

011

Act

uary

Los

ses

48,

915,

471

48,

026,

502

Fair

valu

e ad

just

men

t of E

quity

Sha

res

5,5

43,7

98

7,0

57,2

96

Tota

l 8

18,7

33,0

64

404

,406

,612

Othe

r R

eser

ves

of N

MB

pre

sent

ed u

nder

Sta

tem

ent o

f cha

nge

in e

quity

incl

udes

deb

entu

re/c

apita

l red

empt

ion

rese

rve,

sta

ff sk

ill d

evel

opm

ent f

und,

cap

ital a

djus

tmen

t fun

d, c

orpo

rate

so

cial

resp

onsi

bilit

y fu

nd, i

nves

tmen

t adj

ustm

ent r

eser

ve ,

actu

aria

l gai

n/lo

sses

and

sta

ff re

lief f

und.

Staff

Rel

ief F

und

amou

ntin

g N

PR. 1

0,00

0,00

0 ha

s be

en s

et u

p w

ith th

e ob

ject

ive

to fi

nanc

ially

ass

isst

sta

ff at

the

time

of th

eir a

cute

fi na

ncia

l diffi

cul

ty o

f the

nat

ure

of s

taff '

s ow

n/sp

ouse

/ch

ildre

n cr

itica

l illn

ess,

per

man

ent d

isab

ility

due

to il

lnes

s or

des

truc

tion

of p

rope

rty

due

to n

atur

al c

alam

ity. T

he a

mou

nt p

aid

durin

g th

e re

port

ing

perio

d is

NPR

. 1 m

io. T

he s

aid

rese

rve

has

been

incl

uded

in T

ier 2

Cap

ital.

Reg

ulat

ory

rese

rve

incl

udes

the

amou

nt th

at is

allo

cate

d fr

om p

rofi t

or

reta

ined

ear

ning

s fo

the

bank

as

per

dire

ctiv

e of

NR

B fo

r th

e pu

rpos

e of

impl

emen

tatio

n of

NFR

S an

d w

hich

sha

ll no

t be

rega

rded

as

free

for d

istr

ibut

ion

of d

ivid

end

(cas

h as

wel

l as

bonu

s sh

ares

). Th

e am

ount

allo

cate

d to

this

rese

rve

incl

udes

the

follo

win

g ad

just

men

ts a

s pe

r NFR

S:

Ast e

r ch

ange

of C

ore

Ban

king

Sys

tem

, the

inte

rest

on

maj

ority

of r

isk

asse

ts p

ortfo

lio a

re d

ue a

s pe

r En

glis

h Ca

lend

er d

ue to

whi

ch a

ppro

xim

atel

y a

fort

nigh

t’s in

tere

st in

com

e ar

e no

t re

aliz

ed a

s of

fi sc

al y

ear e

nd 2

076.

Res

erve

s4.

27

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Stat

utor

y ge

nera

l res

erve

2,1

41,5

71,4

72

1,6

83,9

91,7

05

2,1

23,3

06,6

59

1,6

71,8

51,4

54

Exch

ange

equ

ilisa

tion

rese

rve

78,

376,

972

56,

373,

878

78,

376,

972

56,

373,

878

Corp

orat

e so

cial

resp

onsi

bilit

y re

serv

e 4

9,14

6,94

3 3

1,94

6,75

8 4

8,44

2,60

3 3

1,54

8,40

0 Ca

pita

l re

dem

ptio

n re

serv

e 4

00,0

00,0

00

309

,547

,489

4

00,0

00,0

00

309

,547

,489

R

egul

ator

y re

serv

e 8

18,7

33,0

64

404

,406

,612

8

18,7

33,0

64

404

,406

,612

In

vest

men

t adj

ustm

ent r

eser

ve 1

0,00

0,00

0 1

0,00

0,00

0 1

0,00

0,00

0 1

0,00

0,00

0 Ca

pita

l res

erve

-

-

-

-

Ass

ets

reva

luat

ion

rese

rve

-

-

Fair

valu

e re

serv

e (5

,092

,298

) (6

,824

,546

) (5

,543

,798

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,057

,296

)D

ivid

end

equa

lisat

ion

rese

rve

-

-

Act

uaria

l gai

n (5

1,39

7,99

4) (4

8,83

5,32

5) (4

8,91

5,47

1) (4

8,02

6,50

2)Sp

ecia

l res

erve

-

-

-

-

Othe

r res

erve

s: -

-

-

-

-

Def

erre

d Ta

x R

eser

ve 5

,997

,582

3

,169

,572

-

-

-C

apita

l Adj

ustm

ent F

und

57,

326,

449

57,

326,

449

57,

326,

449

57,

326,

449

Staff

Ski

ll D

evel

opm

ent F

und

-

-

-

-

-NM

B S

taff

Rel

ief F

und

10,

000,

000

-

10,

000,

000

-

Othe

rs 4

,526

,568

1

,828

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-

-

To

tal

3,5

19,1

88,7

57

2,5

02,9

31,2

08

3,4

91,7

26,4

77

2,4

85,9

70,4

84


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Cont

inge

nt li

abili

ties

and

com

mitm

ents

4.28

The

tabl

e be

low

sho

ws

the

cont

ract

or u

nder

lyin

g pr

inci

pal a

mou

nts

of u

nmat

ured

off -

bala

nce

shee

t tra

nsac

tions

as

on re

port

ing

date

.

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Cont

inge

nt li

abili

ties

44,

144,

526,

363

44,

101,

467,

843

44,

144,

526,

363

44,

101,

467,

843

Und

raw

n an

d un

disb

urse

d fa

cilit

ies

43,

884,

977,

705

40,

389,

967,

733

43,

884,

977,

705

40,

389,

967,

733

Capi

tal c

omm

itmen

t 6

6,30

3,12

1 1

65,6

45,3

52

65,

753,

121

165

,645

,352

Leas

e Co

mm

itmen

t -

-

-

-

Litig

atio

n 1

75,0

96,1

80

146

,099

,951

1

75,0

96,1

80

146

,099

,951

Tota

l 8

8,27

0,90

3,36

9 8

4,80

3,18

0,87

9 8

8,27

0,35

3,36

9 8

4,80

3,18

0,87

9

4.28

.1: C

ontin

gent

liab

ilitie

s

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Acc

epta

nce

and

docu

men

tary

cre

dit

20,

275,

562,

695

20,

595,

601,

948

20,

275,

562,

695

20,

595,

601,

948

Bill

s fo

r col

lect

ion

5,2

05,2

36,4

96

6,5

93,7

22,9

25

5,2

05,2

36,4

96

6,5

93,7

22,9

25

Forw

ard

exch

ange

con

trac

ts -

-

-

-

Gua

rant

ees

18,

663,

727,

172

16,

912,

142,

969

18,

663,

727,

172

16,

912,

142,

969

Und

erw

ritin

g co

mm

itmen

t -

-

-

-

Othe

r com

mitm

ents

-

-

-

-

Tota

l 4

4,14

4,52

6,36

3 4

4,10

1,46

7,84

3 4

4,14

4,52

6,36

3 4

4,10

1,46

7,84

3

4.28

.2: U

ndra

wn

and

undi

sbur

sed

faci

litie

s

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Und

isbu

rsed

am

ount

of l

oans

8,0

81,8

45,8

98

6,6

53,7

04,0

00

8,0

81,8

45,8

98

6,6

53,7

04,0

00

Und

raw

n lim

its o

f ove

rdra

st s 4

,350

,254

,360

3

,840

,304

,766

4

,350

,254

,360

3

,840

,304

,766

Und

raw

n lim

its o

f cre

dit c

ards

99,

140,

074

98,

274,

598

99,

140,

074

98,

274,

598

Und

raw

n lim

its o

f let

ter o

f cre

dit

20,

525,

761,

911

23,

513,

172,

255

20,

525,

761,

911

23,

513,

172,

255

Und

raw

n lim

its o

f gua

rant

ee 1

0,82

7,97

5,46

1 6

,284

,512

,114

1

0,82

7,97

5,46

1 6

,284

,512

,114

Tota

l 4

3,88

4,97

7,70

5 4

0,38

9,96

7,73

3 4

3,88

4,97

7,70

5 4

0,38

9,96

7,73

3


4.28

.3: C

apita

l com

mitm

ents

Capi

tal e

xpen

ditu

re a

ppro

ved

by re

leva

nt a

utho

rity

of th

e ba

nk b

ut p

rovi

sion

has

not

bee

n m

ade

in fi

nanc

ial s

tate

men

ts

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Capi

tal c

omm

itmen

ts in

rela

tion

to P

rope

rty

and

Equi

pmen

t

App

rove

d an

d co

ntra

cted

for

6,5

83,5

83

3,6

62,8

52

6,0

33,5

83

3,6

62,8

52

App

rove

d bu

t not

con

trac

ted

for

-

-

Sub

tota

l 6

,583

,583

3

,662

,852

6

,033

,583

3

,662

,852

Capi

tal c

omm

itmen

ts in

rela

tion

to In

tang

ible

ass

ets

App

rove

d an

d co

ntra

cted

for

59,

719,

538

161

,982

,500

5

9,71

9,53

8 1

61,9

82,5

00

App

rove

d bu

t not

con

trac

ted

for

-

-

Sub

tota

l 5

9,71

9,53

8 1

61,9

82,5

00

59,

719,

538

161

,982

,500

Tota

l 6

6,30

3,12

1 1

65,6

45,3

52

65,

753,

121

165

,645

,352

4.28

.4: L

ease

com

mitm

ents

Part

icul

ars

Gro

upN

MB

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Oper

atin

g le

ase

com

mitm

ents

Futu

re m

inim

um le

ase

paym

ents

und

er n

on c

ance

llabl

e op

erat

ing

leas

e, w

here

the

bank

is le

ssee

Not

late

r tha

n 1

year

-

-

-

-

Late

r tha

n 1

year

but

not

late

r tha

n 5

year

s -

-

-

-

Late

r tha

n 5

year

s -

-

-

-

Sub

tota

l -

-

-

-

Fina

nce

leas

e co

mm

itmen

ts

Futu

re m

inim

um le

ase

paym

ents

und

er n

on c

ance

llabl

e op

erat

ing

leas

e, w

here

the

bank

is le

ssee

Not

late

r tha

n 1

year

-

-

-

-

Late

r tha

n 1

year

but

not

late

r tha

n 5

year

s -

-

-

-

Late

r tha

n 5

year

s -

-

-

-

Sub

tota

l -

-

-

-

Gra

nd to

tal

-

-

-

-

The

leas

e ag

reem

ents

incl

udin

g th

at o

f sub

sidi

arie

s ar

e ca

ncel

labl

e ag

reem

ents

as

per t

erm

s of

leas

e co

ntra

cts.


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

4.28

.5: L

itiga

tion

a. C

ontin

gent

of T

ax:

The

bank

has

fi le

d ap

peal

s at

Sup

rem

e Co

urt,

Rev

enue

Trib

unal

or I

nlan

d R

even

ue D

epar

tmen

t bas

ed o

n th

e st

age

of a

ppea

l aga

inst

am

ende

d as

sess

men

t ord

ers

of v

ario

us fi

scal

yea

rs

issu

ed b

y La

rge

Taxp

ayer

s Offi

ce.

The

det

ail o

f the

cas

es a

re g

iven

bel

ow:

Fisc

al Y

ear

Stat

us D

ispu

ted

Tax

Am

ount

NM

B B

ank

Lim

ited

FY 2

063-

64A

ppea

led

to S

upre

me

Cour

t on

2070

.11.

15 fo

r whi

ch th

e fi n

al d

ecis

ion

is p

endi

ng 3

2,18

2,88

9 FY

206

4-65

App

eale

d to

Sup

rem

e Co

urt o

n 20

71.0

9.24

for w

hich

the

fi nal

dec

isio

n is

pen

ding

26,

954,

038

FY 2

066-

67A

ppea

led

to R

even

ue T

ribun

al a

gain

st th

e de

cisi

on o

f LTO

on

2075

.02.

08 fo

r whi

ch th

e fi n

al d

ecis

ion

is p

endi

ng 3

3,67

1,38

5

FY 2

067-

68A

ppea

led

to R

even

ue T

ribun

al a

gain

st th

e de

cisi

on o

f LTO

on

2075

.02.

08 fo

r whi

ch th

e fi n

al d

ecis

ion

is p

endi

ng 7

,724

,850

FY 2

068-

69A

ppea

led

to R

even

ue T

ribun

al a

gain

st th

e de

cisi

on o

f LTO

on

2074

.04.

16 fo

r whi

ch th

e fi n

al d

ecis

ion

is p

endi

ng 5

,891

,178

FY 2

069-

70A

ppea

led

to IR

D fo

r Adm

inis

trat

ive

Rev

iew

on

2074

.03.

15 fo

r whi

ch th

e fi n

al d

ecis

ion

is p

endi

ng 1

6,09

2,99

2 FY

207

0-71

App

eale

d to

IRD

for A

dmin

istr

ativ

e R

evie

w o

n 20

75.0

4.28

for w

hich

the

fi nal

dec

isio

n is

pen

ding

4,9

82,4

75

FY 2

071-

72A

ppea

led

to IR

D fo

r Adm

inis

trat

ive

Rev

iew

on

2075

.09.

02 fo

r whi

ch th

e fi n

al d

ecis

ion

is p

endi

ng 7

,475

,620

To

tal

134

,975

,426

Er

stw

hile

Cle

an E

nerg

y D

evel

opm

ent B

ank

Lim

ited

FY 2

065-

66A

ppea

led

to IR

D fo

r Adm

inis

trat

ive

Rev

iew

on

2070

.06.

08 fo

r whi

ch th

e fi n

al d

ecis

ion

is p

endi

ng 1

,505

,630

FY

206

6-67

App

eale

d to

IRD

for A

dmin

istr

ativ

e R

evie

w o

n 20

71.0

8.23

for w

hich

the

fi nal

dec

isio

n is

pen

ding

14,

595,

261

FY 2

067-

68A

ppea

led

to R

even

ue T

ribun

al a

gain

st th

e de

cisi

on o

f LTO

on

2074

.04.

16 fo

r whi

ch th

e fi n

al d

ecis

ion

is p

endi

ng 7

,616

,269

FY 2

068-

69A

ppea

led

to R

even

ue T

ribun

al a

gain

st th

e de

cisi

on o

f LTO

on

2074

.04.

16 fo

r whi

ch th

e fi n

al d

ecis

ion

is p

endi

ng 4

,010

,125

FY 2

069-

70A

ppea

led

to IR

D fo

r Adm

inis

trat

ive

Rev

iew

on

2074

.04.

27 fo

r whi

ch th

e fi n

al d

ecis

ion

is p

endi

ng 2

,953

,526

FY

207

0-71

App

eale

d to

IRD

for A

dmin

istr

ativ

e R

evie

w o

n 20

75.0

6.02

for w

hich

the

fi nal

dec

isio

n is

pen

ding

3,7

80,6

70

Tota

l 3

4,46

1,48

2 Er

stw

hile

Pru

dent

ial F

inan

ce C

ompa

ny L

imite

dFY

206

5-66

App

eale

d to

IRD

for A

dmin

istr

ativ

e R

evie

w o

n 20

70.0

7.29

for w

hich

the

fi nal

dec

isio

n is

pen

ding

5,6

59,2

72

Tota

l 5

,659

,272

G

rand

Tot

al 1

75,0

96,1

80

Sinc

e de

cisi

ons

for t

hese

cas

es a

re p

endi

ng, d

ispu

ted

tax

amou

nt o

f NPR

175

,096

,180

men

tione

d ab

ove

has

been

dis

clos

ed a

s co

ntin

gent

liab

ility

on

Inco

me

Tax

and

no p

rovi

sion

for a

ddi-

tiona

l lia

bilit

y ha

s be

en m

ade.

A

s of

the

fi sca

l yea

r en

d 20

75/7

6, s

elf-

Ass

essm

ent R

etur

ns fi

led

by N

MB

Ban

k Lt

d. fo

r FY

207

2/73

to 2

074/

75 a

nd b

y er

stw

hile

Cle

an E

nerg

y D

evel

opm

ent B

ank

Ltd.

for

FY 2

071/

72 to

20

72/7

3 an

d by

ers

twhi

le B

hrik

uti D

evel

opm

ent B

ank

Ltd.

for F

Y 20

72/7

3 is

yet

to b

e re

asse

ssed

by

Larg

e Ta

x Pa

yers

Offi

ce.

b.

In th

e se

cond

qua

rter

of F

Y 20

15/1

6, th

e B

ank

had

purc

hase

d la

nd w

ith a

n ar

ea o

f 80

Ann

as (2

,543

sq

met

er) f

or N

PR 5

90 M

illio

n in

Kam

alad

i, K

athm

andu

. The

land

was

bou

ght t

hrou

gh

auct

ion

proc

ess

invo

lvin

g fo

ur fi

nanc

ial i

nstit

utio

ns. T

he p

revi

ous

owne

r of p

rope

rty

has

fi led

cas

e in

Kat

hman

du D

istr

ict C

ourt

for r

epea

l of a

uctio

n pr

oces

s.


Inte

rest

inco

me

4.29

Inte

rest

inco

me

incl

ude

inte

rest

inco

me

on lo

an a

nd a

dvan

ce, i

nves

tmen

t sec

uriti

es e

xcep

t on

thos

e in

vest

men

t sec

uriti

es m

easu

re a

t fai

r val

ue th

roug

h pr

ofi t

or lo

ss, c

ash

and

cash

eq

uiva

lent

, due

from

BFI

s, lo

an a

nd a

dvan

ces

to s

taff ,

etc

. Det

ails

pre

sent

ed a

s fo

llow

s:

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Cash

and

cas

h eq

uiva

lent

62,

214,

239

52,

770,

428

13,

780,

049

9,5

90,2

54

Due

from

Nep

al R

astr

a B

ank

-

-

-

-

Plac

emen

t with

ban

k an

d fi n

anci

al in

stitu

tions

140

,169

,449

4

2,53

8,69

2 1

40,1

69,4

49

42,

538,

692

Loan

and

adv

ance

s to

ban

k an

d fi n

anci

al in

stitu

tions

1

45,4

39,1

54

129

,463

,374

1

45,4

39,1

54

129

,463

,374

Loan

s an

d ad

vanc

es to

cus

tom

ers

10,

625,

666,

262

8,4

36,8

53,2

43

10,

172,

263,

538

8,0

77,8

86,3

40

Inve

stm

ent s

ecur

ities

514

,448

,520

4

54,3

84,4

04

494

,048

,717

4

07,9

24,7

02

Loan

and

adv

ance

s to

sta

ff 9

0,20

8,32

2 3

6,39

5,28

7 9

0,20

8,32

2 3

6,39

5,28

7

Othe

r 2

9,62

7,87

3 1

6,65

2,02

6 2

6,14

9,80

2 2

4,90

1,18

2

Tota

l int

eres

t inc

ome

11,

607,

773,

819

9,1

69,0

57,4

54

11,

082,

059,

031

8,7

28,6

99,8

31

As

per N

RB

Inte

rest

Inco

me

Rec

ogni

tion

Gui

delin

e, th

e in

tere

st a

mou

nt o

f NPR

. 32,

210,

184.

75 h

as b

een

reve

rsed

and

cre

dite

d to

Inte

rest

Sus

pens

e du

ring

the

repo

rtin

g pe

riod.

Inte

rest

exp

ense

4.30

Inte

rest

exp

ense

s in

clud

e in

tere

st a

ccru

ed o

n de

posi

ts c

olle

cted

and

deb

t sec

uriti

es is

sued

. Det

ails

pre

sent

ed a

s fo

llow

s:

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Due

to b

ank

and

fi nan

cial

inst

itutio

ns 6

9,56

6,21

7 3

8,30

7,12

2 6

9,56

6,21

7 3

8,30

7,12

2

Due

to N

epal

Ras

tra

Ban

k 1

7,21

7,47

6 3

2,55

0,94

7 1

7,21

7,47

6 3

2,55

0,94

7

Dep

osits

from

cus

tom

ers

6,5

99,6

09,4

95

5,7

60,8

02,4

30

6,5

32,5

87,1

97

5,7

16,3

30,9

42

Bor

row

ing

323

,435

,591

1

69,3

73,7

19

135

,757

,511

2

,400

,853

Deb

t sec

uriti

es is

sued

82,

909,

684

35,

095,

890

82,

909,

684

35,

095,

890

Subo

rdin

ated

liab

ilitie

s -

-

-

-

Othe

r -

-

-

-

Tota

l int

eres

t exp

ense

7,0

92,7

38,4

63

6,0

36,1

30,1

08

6,8

38,0

38,0

85

5,8

24,6

85,7

53

Sinc

e de

cisi

ons

for t

hese

cas

es a

re p

endi

ng, d

ispu

ted

tax

amou

nt o

f NPR

175

,096

,180

men

tione

d ab

ove

has

been

dis

clos

ed a

s co

ntin

gent

liab

ility

on

Inco

me

Tax

and

no p

rovi

sion

for a

ddi-

tiona

l lia

bilit

y ha

s be

en m

ade.

A

s of

the

fi sca

l yea

r en

d 20

75/7

6, s

elf-

Ass

essm

ent R

etur

ns fi

led

by N

MB

Ban

k Lt

d. fo

r FY

207

2/73

to 2

074/

75 a

nd b

y er

stw

hile

Cle

an E

nerg

y D

evel

opm

ent B

ank

Ltd.

for

FY 2

071/

72 to

20

72/7

3 an

d by

ers

twhi

le B

hrik

uti D

evel

opm

ent B

ank

Ltd.

for F

Y 20

72/7

3 is

yet

to b

e re

asse

ssed

by

Larg

e Ta

x Pa

yers

Offi

ce.

b.

In th

e se

cond

qua

rter

of F

Y 20

15/1

6, th

e B

ank

had

purc

hase

d la

nd w

ith a

n ar

ea o

f 80

Ann

as (2

,543

sq

met

er) f

or N

PR 5

90 M

illio

n in

Kam

alad

i, K

athm

andu

. The

land

was

bou

ght t

hrou

gh

auct

ion

proc

ess

invo

lvin

g fo

ur fi

nanc

ial i

nstit

utio

ns. T

he p

revi

ous

owne

r of p

rope

rty

has

fi led

cas

e in

Kat

hman

du D

istr

ict C

ourt

for r

epea

l of a

uctio

n pr

oces

s.


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Fees

and

Com

mis

sion

Inco

me

4.31

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

207

6Ye

ar e

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06

589

,394

,199


Dep

reci

atio

n an

d A

mor

tisat

ion

4.38

Dep

reci

atio

n is

the

syst

emat

ic a

lloca

tion

of th

e de

prec

iabl

e am

ount

of a

n as

set o

ver i

ts u

sefu

l life

whi

le a

mor

tizat

ion

is th

e sy

stem

atic

allo

catio

n of

the

depr

ecia

ble

amou

nt o

f an

inta

ngi-

ble

asse

t ove

r its

use

ful l

ife. D

epre

ciat

ion

and

amor

tizat

ion

incl

ude

depr

ecia

tion

on p

lant

and

equ

ipm

ent a

nd a

mor

tizat

ion

of in

tang

ible

ass

ets.

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Dep

reci

atio

n on

pro

pert

y an

d eq

uipm

ent

174

,082

,276

1

49,7

93,2

66

163

,692

,664

1

41,8

41,5

03

Dep

reci

atio

n on

inve

stm

ent p

rope

rty

-

-

-

-

Am

ortis

atio

n of

inta

ngib

le a

sset

s 1

3,58

7,22

3 6

,194

,294

1

3,10

0,69

1 5

,853

,735

Tota

l 1

87,6

69,4

99

155

,987

,560

1

76,7

93,3

55

147

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Non

ope

ratin

g in

com

e4.

39

The

inco

mes

that

hav

e no

dire

ct re

latio

nshi

p w

ith th

e op

erat

ion

of tr

ansa

ctio

ns a

re p

rese

nted

as

unde

r.

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Rec

over

y of

loan

writ

ten

off

17,

090,

672

43,

140,

193

17,

090,

672

43,

140,

193

Othe

r inc

ome

-

--

-

Tota

l 1

7,09

0,67

2 4

3,14

0,19

3 1

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3

Non

ope

ratin

g ex

pens

e4.

40

The

expe

nse

that

has

no

dire

ct re

latio

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p w

ith th

e op

erat

ion

of tr

ansa

ctio

ns a

re p

rese

nted

as

unde

r.

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Loan

writ

ten

off

17,

585,

901

37,

935,

379

17,

585,

901

37,

935,

379

Red

unda

ncy

prov

isio

n -

-

-

-

Expe

nse

of re

stru

ctur

ing

-

-

-

-

Othe

r exp

ense

23,

248

-

-

-

Tota

l 1

7,60

9,14

8 3

7,93

5,37

9 1

7,58

5,90

1 3

7,93

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9


Not

es to

Con

solid

ated

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

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6

Inco

me

tax

expe

nse

4.41

The

bank

has

cal

cula

ted

Inco

me

Tax

as p

er In

com

e Ta

x Ac

t, 20

58. T

he b

ank

has

also

pai

d in

com

e ta

x on

inte

rest

sus

pens

e fo

r the

pre

viou

s ye

ar 2

075

due

to w

hich

eff e

ctiv

e ta

x ra

te is

hig

her i

n co

mpa

risio

n to

cur

rent

yea

r.

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Curr

ent t

ax e

xpen

se 1

,043

,451

,780

8

65,7

91,6

37

994

,167

,044

8

29,6

21,0

42

Curr

ent y

ear

1,0

41,8

13,2

51

860

,473

,515

9

92,5

28,5

15

824

,302

,920

Adj

ustm

ents

for p

rior y

ears

1,6

38,5

29

5,3

18,1

22

1,6

38,5

29

5,3

18,1

22

Def

erre

d ta

x ex

pens

e (7

,988

,980

) (1

16,3

72,0

96)

(3,4

39,2

37)

(117

,093

,734

)

Orig

inat

ion

and

reve

rsal

of t

empo

rary

diff

eren

ces

(7,9

88,9

80)

(116

,372

,096

) (3

,439

,237

) (1

17,0

93,7

34)

Chan

ges

in ta

x ra

te -

-

-

-

Rec

ogni

tion

of p

revi

ousl

y un

reco

gnis

ed ta

x lo

sses

-

-

-

-

Tota

l inc

ome

tax

expe

nse

1,0

35,4

62,8

00

749

,419

,541

9

90,7

27,8

07

712

,320

,180

4.41

.1: R

econ

cilia

tion

of ta

x ex

pens

e an

d ac

coun

ting

profi

t

Part

icul

ars

Gro

upN

MB

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Year

end

ed 3

1 A

shad

207

6Ye

ar e

nded

32

Ash

ad 2

075

Profi

t be

fore

tax

3,4

08,3

22,6

98

2,7

01,6

08,1

71

3,2

48,0

03,8

34

2,5

66,3

20,0

61

Tax

amou

nt a

t tax

rate

of 3

0 %

/25%

1,0

22,4

96,8

09

878

,585

,397

9

74,4

01,1

50

842

,221

,159

Add

: Tax

eff e

ct o

f exp

ense

s th

at a

re n

ot d

educ

tible

for t

ax

purp

ose

265

,093

,198

2

46,6

03,0

42

261

,507

,446

2

46,6

03,0

42

Less

: Tax

eff e

ct o

n ex

empt

inco

me

14,

674,

649

33,

195,

838

14,

674,

649

33,

195,

838

Add

/less

: Tax

eff e

ct o

n ot

her

item

s 2

31,1

02,1

07

231

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2

28,7

05,4

33

231

,325

,443

Le

ss: T

ax e

ff ect

of e

xpen

ses

allo

wed

/Inc

ome

that

are

not

al

low

ed fo

r tax

pur

pose

228

,049

,023

2

28,1

29,2

73

225

,315

,620

2

27,9

35,6

30

Less

: Tax

eff e

ct o

f car

ried

forw

ard

loss

es 3

,053

,084

3

,389

,813

3

,389

,813

3

,389

,813

Tota

l inc

ome

tax

expe

nse

1,0

41,8

13,2

51

860

,473

,515

9

92,5

28,5

15

824

,302

,920

Eff e

ctiv

e ta

x ra

te30

.57%

31.8

5%30

.56%

32.1

2%


Stat

emen

t of d

istr

ibut

able

pro

fi t o

r los

sFo

r the

yea

r end

ed 3

1 A

shad

, 207

6 (1

6 Ju

ly 2

019

)(A

s pe

r NRB

Reg

ulat

ion)

(Am

ount

in N

PR)

Part

icul

ars

As

at 3

1 A

shad

207

6A

s at

32

Ash

ad 2

075

Net

pro

fi t o

r (lo

ss) a

s pe

r st

atem

ent o

f pro

fi t o

r lo

ss 2

,257

,276

,027

1

,853

,792

,753

App

ropr

iatio

ns:

a. G

ener

al re

serv

e (4

51,4

55,2

05)

(370

,758

,551

)

b. F

orei

gn e

xcha

nge

fl uct

uatio

n fu

nd (2

2,00

3,09

3) (1

,731

,624

)

c. C

apita

l red

empt

ion

rese

rve

(90,

452,

511)

(90,

999,

503)

d. C

orpo

rate

soc

ial r

espo

nsib

ility

fund

(22,

572,

760)

(18,

537,

928)

e. E

mpl

oyee

s' tr

aini

ng fu

nd -

-

f. In

vest

men

t Adj

ustm

ent R

eser

ve -

-

Prof

it or

(los

s) b

efor

regu

lato

ry a

djus

tmen

t 1

,670

,792

,457

1

,371

,765

,147

Reg

ulat

ory

adju

stm

ent :

a. In

tere

st re

ceiv

able

(-)/

prev

ious

acc

rued

inte

rest

rece

ived

(+)

(368

,638

,165

) (2

22,6

79,1

76)

b. S

hort

loan

loss

pro

visi

on in

acc

ount

s (-

)/re

vers

al (+

) -

-

c. S

hort

pro

visi

on fo

r pos

sibl

e lo

sses

on

inve

stm

ent (

-)/r

ever

sal (

+)

d. S

hort

loan

loss

pro

visi

on o

n N

on B

anki

ng A

sset

s (-

)/re

sers

al (+

) (4

3,14

1,23

5) (5

9,77

4,62

7)

e. D

efer

red

tax

asse

ts re

cogn

ised

(-)/

reve

rsal

(+)

(3,1

71,5

82)

(66,

869,

011)

f. G

oodw

ill re

cogn

ised

(-)/

impa

irmen

t of G

oodw

ill (+

) -

-

g. B

arga

in p

urch

ase

gain

reco

gnis

ed (-

)/re

sers

al (+

) -

-

h. A

ctur

ial l

oss

reco

gnis

ed (-

)/re

vers

al (+

) (8

88,9

69)

(48,

026,

502)

i. Ot

her (

+/-)

-

-

- Fa

ir va

lue

of in

vest

men

t sec

uriti

es 1

,513

,498

(7

,057

,296

)

Tota

l Adj

ustm

ents

(414

,326

,452

) (4

04,4

06,6

12)

Dis

trib

utab

le p

rofi t

or

(loss

) 1

,256

,466

,005

9

67,3

58,5

36


Unaudited Financial Results (Quarterly)Fourth Quarter ended of Fiscal Year 2018-19 (FY 2075/2076)

Rs. in '000'

Condensed Consolidated Statement of Financial PositionThis Quarter Ending Immediate Previous Year

Ending(Audited)Assets

Cash and cash equivalent 8,095,758 5,180,404

Due from Nepal Rastra Bank 10,818,537 7,260,195

Placement with Bank and Financial Institutions 2,177,098 276,407

Derivative fi nancial instruments 8,595,482 7,506,751

Other trading assets 340,390 321,720

Loan and advances to B/FIs 3,317,962 2,497,568

Loans and advances to customers 88,488,182 72,711,772

Investment securities 10,316,351 9,448,447

Current tax assets - -

Investment in susidiaries 248,552 248,552

Investment in associates - -

Investment property 102,916 59,775

Property and equipment 1,577,899 1,559,570

Goodwill and Intangible assets 115,409 22,054

Deferred tax assets 66,869 66,869

Other assets 1,206,735 4,458,384

Total Assets 135,468,139 111,618,467

Liabilities

Due to Bank and Financial Instituions 624,365 1,036,269

Due to Nepal Rastra Bank 3,203,523 660,072

Derivative fi nancial instruments 8,458,374 7,477,484

Deposits from customers 97,892,302 83,970,867

Borrowing 3,468,060 -

Current Tax Liabilities 9,599 60,418

Provisions 9,078 -

Deferred tax liabilities - -

Other liabilities 2,107,809 1,406,000

Debt securities issued 2,239,236 517,548

Subordinated Liabilities - -

Total liabilities 118,012,348 95,128,658

Equity

Share capital 9,618,163 7,603,291

Share premium 2,512,799 4,061,367

Retained earnings 1,792,975 2,339,182

Reserves 3,531,856 2,485,970

Total equity attributable to equity holders 17,455,791 16,489,809

Non-controlling interest - -

Total equity 17,455,791 16,489,809

Total liabilities and equity 135,468,139 111,618,467



Rs. in '000'

Condensed Consolidated Statement of Profi t or Loss Up to this QuarterUp to Corrosponding

Previous Year Quarter (Audited)

Interest income 11,104,234 8,728,700

Interest expense 6,838,038 5,824,686

Net interest income 4,266,196 2,904,014

Fees and Commission Income 1,003,531 794,250

Fees and commission expense 93,955 62,708

Net fee and commission income 909,576 731,542

Net interest, fee and commission income 5,175,771 3,635,556

Net trading income 352,049 299,606

Other operating income 210,374 164,962

Total operating income 5,738,195 4,100,124

Impairment charge/(reversal) for loans and other losses 163,122 (219,651)

Net operating income 5,575,073 4,319,775

Operating expense

Personnel expenses 1,419,153 1,021,570

Other operating expenses 700,390 589,394

Depreciation & Amortisation 176,793 147,695


Non operating income 17,091 43,140

Non operating expense 17,586 37,935

Profi t before income tax 3,278,241 2,566,320

Income tax expense

Current Tax 968,188 829,621

Deferred Tax expense/(Income) - (117,094)

Profi t for the period 2,310,053 1,853,793

Condensed Consolidated Statement of Comprehensive Income

Profi t/Loss for the period 2,310,053 1,853,793

Other Comprehensive lncome 625 (44,269)

Total Comprehensive lncome 2,310,678 1,809,524

Statement showing Net Profi t a� er Regulatory Adjustments:

Net Profi t for the period ended 31 Asadh 2076 2,310,053

Profi t required to be appropriated to statutory reserve (591,896)

Profi t required to be transfer to Regulatory Reserve (443,365)

Net Profi t for the period ended 31 Ashad 2076 available for distribution 1,274,793



Ratios Upto This Quarter (YTD) Up to Corrosponding Previous Year Quarter

Capital fund to RWA 15.32% 15.75%

Non performing loan (NPL) to toal loan 0.82% 0.88%

Total loan loss provision to Total NPL 184.52% 184.17%

Cost of Funds (YTD) 7.26% 7.46%

CCD Ratio 76.88% 77.72%

Base Rate 9.86% 10.70%

Average Interest Spread (Calculated as per NRB Directives)- Last Month of Quarter 4.26% 4.14%

Additional Informations:

Average Yield (YTD Average) 10.80% 10.91%

Return on Equity (Annualized) 13.61% 13.54%

Return on Assets (Annualized) 1.86% 1.80%

PE Ratio (Annualized) 15.86 16.38

Net-Worth per share (NPR) 181.49 216.88

Assets per share (NPR) 1,418.41 1,478.19

Liquidity Ratio (NLA) 28.28% 23.64%


Com

paris

on U

naud

ited

and

Aud

ited

Fina

ncia

l Sta

tem

ents

as

of F

Y 20

18-2

019

(FY

2075

/76)

R

s. in

'000

'

Stat

emen

t of F

inan

cial

Pos

ition

As

per

unau

dite

d Fi

nanc

ial

Stat

emen

t

As

per

Aud

ited

Fina

ncia

l St

atem

ent

Vari

ance

Rea

sons

for

Vari

ance

Ass

ets

In a

mou

ntIn

%(R

ound

ed o

ff )Ca

sh a

nd c

ash

equi

vale

nt 8

,095

,758

8

,096

,355

5

97

0%D

ue to

re-c

lass

ifi ca

tion

from

Pla

cem

ent w

ith B

FI's

Due

from

Nep

al R

astr

a B

ank

10,

818,

537

10,

829,

182

10,

644

0%D

ue to

adj

ustm

ent o

f rec

eiva

ble

of In

t. Su

bsid

y fr

om N

RB

and

pla

cem

ents

Plac

emen

t with

Ban

k an

d Fi

nanc

ial I

nstit

utio

ns 2

,177

,098

2

,172

,967

(4

,131

)0%

Due

to re

-cla

ssifi

catio

n to

Cas

h an

d Ca

sh E

quiv

alen

t and

pla

cem

ents

Der

ivat

ive

fi nan

cial

inst

rum

ents

8,5

95,4

82

8,5

95,4

82

-

-Ot

her t

radi

ng a

sset

s 3

40,3

90

340

,390

-

-

Lo

an a

nd a

dvan

ces

to B

/FIs

3,3

17,9

62

3,3

17,9

62

-

-

Loan

s an

d ad

vanc

es to

cus

tom

ers

88,

488,

182

88,

485,

031

(3,1

50)

0%D

ue to

cha

nge

in im

pairm

ent

Inve

stm

ent s

ecur

ities

10,

316,

351

10,

316,

351

-

-Cu

rren

t tax

ass

ets

-

-

-

-In

vest

men

t in

susi

diar

ies

248

,552

2

48,5

52

-

-In

vest

men

t in

asso

ciat

es -

-

-

-

Inve

stm

ent p

rope

rty

102

,916

1

02,9

16

--

Prop

erty

and

equ

ipm

ent

1,5

77,8

99

1,5

77,8

99

-

-G

oodw

ill a

nd In

tang

ible

ass

ets

115

,409

1

15,4

09

-

-D

efer

red

tax

asse

ts 6

6,86

9 7

0,04

1 3

,172

5%

Due

to a

djus

tmen

t of d

efer

red

tax

Othe

r ass

ets

1,2

06,7

35

1,2

01,8

74

(4,8

61)

0%D

ue to

adj

ustm

ent i

n su

ndry

cre

dito

r and

net

off

prov

ison

sTo

tal A

sset

s13

5,46

8,13

9 13

5,47

0,41

0 2

,270

0%

Liab

ilitie

sD

ue to

Ban

k an

d Fi

nanc

ial I

nstit

uion

s 6

24,3

65

624

,365

-

-

Due

to N

epal

Ras

tra

Ban

k 3

,203

,523

3

,203

,523

-

-

Der

ivat

ive

fi nan

cial

inst

rum

ents

8,4

58,3

74

8,4

58,3

74

-

-D

epos

its fr

om c

usto

mer

s 9

7,89

2,30

2 9

7,89

2,30

2 -

-

Bor

row

ing

3,4

68,0

60

3,4

68,0

60

-

-Cu

rren

t Tax

Lia

bilit

ies

9,5

99

35,

579

25,

979

271%

Due

to c

hang

e in

tax

liabi

litie

s an

d ne

t off

with

cur

rent

tax

asse

tsPr

ovis

ions

9,0

78

-

(9,0

78)

-100

%D

ue to

net

off

with

oth

er a

sset

sD

efer

red

tax

liabi

litie

s -

-

-

Ot

her l

iabi

litie

s 2

,107

,809

2

,145

,956

3

8,14

6 2%

Due

to a

djus

tmen

t of I

nter

est S

uspe

nse

as p

er N

RB

Gui

delin

es a

nd s

taf b

onus

Deb

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Signifi cant Accounting Policies to Consolidated Financial Statements

Financial Year 17 July 2018 to 16 July 2019 (1 Shrawan 2075 to 31 Ashad 2076)

1. General Information

1.1 Reporting Entity:

NMB Bank Limited (hereinast er referred to as “the Bank”) is a limited liability company domiciled in Nepal. The registered offi ce of the Bank is G.P.O. Box 11543, Babar Mahal, Kathmandu, Nepal. The Bank has a primary listing in the Nepal Stock Exchange Limited, the only Stock Exchange in Nepal.

The Bank carries out commercial banking activities in Nepal licensed under the Bank and Financial Institutions Act, 2006 as Class A fi nancial institution in May 2008 and has been operating in the Nepalese Financial market for over twenty four years.

1.2 Subsidiary:

a. NMB Capital Ltd. (NMBCL) is a 100% subsidiary company of the Bank and was incorporated on September 17, 2010 as a public limited company as per the Companies Act 2063. It is into Merchant and investment banking licensed by Securities Board of Nepal under the Securities Businessperson (Merchant Banker) Regulations, 2008.

b. NMB Microfi nance Bittiya Sanstha Ltd. (NMBMF) is incorporated as a public limited company under Companies Act, 2063 and licensed by Nepal Rastra Bank as “D” Class fi nancial institution having Nation Wide working area to operate its microfi nance program under Bank and Financial Institution Act 2006. As at the Balance Sheet date, the bank holds 51% controlling interest in the NMBMF.

The fi nancial year of both of the subsidiaries is same as that of the Bank ending on July 16, 2019

1.3 “The Group” represents The Bank and the subsidiaries.

1.4 Approval of Financial Statements:

The consolidated fi nancial statements of the group for the year ended 16 July 2019 have been authorized by the Board of Directors in accordance with its resolution dated 10 November 2019 and the Board of Directors have recommended for its approval by the forthcoming Annual General Meeting


2. Summary ovf Signifi cant Accounting Policies

The principal accounting policies applied in the preparation of the fi nancial statements of the Bank are set out below. Unless otherwise stated, these policies have been consistently applied to all the years presented herein.

2.1 Basis of preparation

The Consolidated Financial Statements have been prepared in accordance with the Nepal Financial Reporting Standard (NFRS) issued by the Nepal Accounting Standards Board (NASB) except otherwise stated, comply with the requirements of Companies Act 2063 and and also provide appropriate disclosures required under regulations of the Securities Exchange Board of Nepal (SEBON). The fi nancial statements have been prepared in accordance with the accrual basis.

The cash fl ow statement has been prepared using the direct method whereby operating profi t is adjusted for eff ects of non-cash transactions such as depreciation and loan losses. The cash fl ows are classifi ed by operating, investing and fi nancing activities.

The Group has opted for some certain carve outs which are briefl y described in Notes to Accounts. As a consequence of carve out adjustments, net profi t would have been impacted.

In preparing the Consolidated Financial Statement, the fi nancial statements of the Bank and the Subsidiary are combined line by line by adding together Assets, Liabilities, Equity, Income and Expenses. The consolidated fi nancial statements have been prepared in accordance with Nepal Financial Reporting Standards 10 “Consolidated Financial Statements”.

Para 8 of NFRS 10 outlines three conditions to be fulfi lled in order to establish control:

(a) Power over the investee;(b) Exposure, or rights, to variable returns from its involvement with the investee; and(c) The ability to use its power over the investee to aff ect the amount of the investor’s returns

Non-Controlling Interest (NCI) refers to ownership of a company, which does not give the shareholder the control of the company.

2.2 Going Concern

The Board of Directors have made an assessment of Bank’s ability to continue as a going concern and are satisfi ed that it has the resources to continue in business for the foreseeable future. Furthermore, the board is not aware of any material uncertainties that may cast signifi cant doubt upon Bank’s ability to continue as a going concern and they do not intend either to liquidate or to cease operations of it. Hence, the Financial Statements are continued to be prepared on the going concern basis.

2.3 Responsibility for Financial Statements

As stated in paragraph 6 of NAS 01 “Presentation of Financial Statements” read along with Section 108(2) of the Company Act, 2006 the Board of Directors is responsible for the preparation of fi nancial statements of the Bank. The Board of Directors acknowledges this responsibility. The Financial statements include the following components:


(a) Consolidated Statement of Financial Position(SOFP) stating the fi nancial position of the Bank and the Group as at the end of reporting period;

(b) Consolidated Statement of Profi t and Loss (SOPL) and Consolidated Statement of Other Comprehensive Income (SOCI) stating the fi nancial performance of the Bank and the Group for the reported period ended.

(c) Consolidated Statement of Cash Flow Statement (SOCF) stating the ability of Bank and the Group to generate Cash and Cash Equivalent.

(d) Consolidated Statement of Changes in Equity (SOCE) stating all the changes in Equity of the Bank and the Group during the reporting period.

(e) Notes to the Consolidated Financial Statements comprising summary of Principal Accounting Policies and explanatory notes that are of signifi cant importance to the users of Financial Statements.

2.4 Foreign Exchange Transactions

Assets and liabilities denominated in foreign currencies as on the balance sheet date have been converted into local currency at mid-point exchange rates published by Nepal Rastra Bank ast er adjustment for eff ective trading rate.

Net diff erence arising from the conversion of foreign currency assets and liabilities is accounted for as revaluation gain/loss under Exchange Gain in Schedule 4.34. 25% of such revaluation gain is transferred to Exchange Fluctuation Reserve through Statement of Change in Equity as per NRB Directives.

Income realised from the diff erence between buying and selling rates of Foreign Exchange is accounted for as trading gains and shown as “Gain/loss foreign exchange transaction" under "Net Trading Income" in Schedule 4.33

2.5 Functional and presentation currency

The Consolidated fi nancial statements are presented in Nepalese Rupees (NPR), the functional currency of Group entities. The Consolidated fi nancial statements are prepared in the formats implemented by Nepal Rastra Bank and the assets and liabilities are presented in the order of liquidity in the statement of fi nancial position. The Income and expenses are classifi ed ‘by nature’ in the presentation of statement of profi t or loss. All fi gures in the accounts have been rounded and consequently the sum of individual fi gures may deviate from the presented sum fi gure. Furthermore, all percentages are subject to possible rounding diff erences.

2.6 Signifi cant accounting judgements and estimates

As part of the process of preparing the fi nancial statements in conformity with NFRS, the Bank’s management is required to make certain judgements, estimates and assumptions that may aff ect the Bank’s profi ts, its fi nancial position and other information presented in the Annual Report. These estimates are based on available information and the judgements made by the Bank’s management. Actual outcomes may deviate from the assessments made, and such deviations may at times be signifi cant.

The Bank uses various valuation models and techniques to estimate the fair values of assets and liabilities. There are signifi cant uncertainties related to these estimates and these estimates are highly dependent on market data, such as the level of interest rates, currency rates and other factors. The uncertainties related to these estimates


are refl ected mainly in the statement of fi nancial position. The bank undertakes continuous development in order to improve the basis for fair value estimates, with regard to both modelling and market data. Changes in estimates resulting from refi nements in assumptions and methodologies are refl ected in the period in which the enhancements are fi rst applied. Judgements and estimates are also associated with impairment testing of loans and claims.

2.7 Change in Accounting Policies

The bank has changed its accounting policies when required, to ensure compliance with NFRS. The eff ect of change in accounting policies at the date of transition has been given to the retained earnings (and reserves, if applicable)

2.8 Materiality and Aggregation

In compliance with Nepal Accounting Standard - NAS 01 (Presentation of Financial Statements), each material class of similar items is presented separately in the Financial Statements. Items of dissimilar nature or functions too are presented separately unless they are immaterial. Financial Assets and Financial Liabilities are off set and the net amount reported in the Statement of Financial Position only when there is a legally enforceable right to off set the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liability simultaneously. Income and expenses are not off set in the Statement of Profi t or Loss unless required or permitted by an Accounting Standard.

2.9 New Standards in Issue but not yet eff ective

For the reporting of fi nancial instruments, NAS 32 Financial Instruments, Presentation, NAS 39 Financial Instruments Recognition and Measurements and NFRS 7 Financial Instruments – Disclosures have been applied. NRFS 9 has been complied for the classifi cation of Financial Instruments. A number of new standards and amendments to the existing standards and interpretations have been issued by IASB ast er the pronouncements of NFRS with varying eff ective dates. Those become applicable when ASB Nepal incorporates them within NFRS.

Besides, IASB is yet to issue internationally applied standards namely NFRS 9 ‘Financial Instruments’, NFRS 15 – Revenue from Contracts with Customers and NFRS 16 – Leases

2.10 Basis for classifi cation and measurement

Financial assets are measured at initial recognition at fair value, and are classifi ed and subsequently measured at fair value through profi t or loss (FVTPL), fair value through other comprehensive income (FVOCI) or amortized cost based on our business model for managing the fi nancial instruments and the contractual cash fl ow characteristics of the instrument.

The fi nancial statements have been prepared on the historical cost basis, except for:

- As per NFRS 9 “Financial Instruments”, Investment Securities (investment in equity shares and mutual funds) are measured at fair value.

- Derivative Financial Instruments are measured at fair value (FVTPL).- Non-derivative fi nancial instruments at fair value through profi t or loss are measured at fair value- Inventories are measured at cost or net realizable value whichever is lower.


- As per NAS 40 ‘Investment Property’ (land and building acquired as non banking assets) are measured at fair value.

- As per NAS 19 “Employee Benefi ts”, Liabilities for employee defi ned benefi t obligations and liabilities for long service leave are measured at fair value.

Financial assets at amortised cost

An investment is classifi ed at “amortised cost” only if it is not designated as a FVTPL and both of the following criteria are met: the objective of the Bank’s business model is to hold the assets in order to collect the contractual cash fl ows, and the contractual terms of the fi nancial assets must give rise on specifi ed dates to cash fl ows that are only payments of principal and interest on the principal amount outstanding.

Financial assets at fair value

If either of the two criteria above is not met, the asset cannot be classifi ed in the amortised cost category and must be classifi ed at fair value.

Determination of fair value

The fair value of fi nancial instruments, including derivative instruments that are traded in a liquid market, is the bid or off ered closing price on the balance sheet date. Where the fair values cannot be derived from active markets, they are determined using a variety of valuation techniques which include the use of mathematical models. The input to these models is taken from observable market data where possible. Fair values are measured using diff erent valuation models and techniques. This process involves determining future expected cash fl ows, which can then be discounted to the balance sheet date. The estimation of future cash fl ows for these instruments is subject to assumptions on market data, the fair value estimate may therefore be subject to variations and may not be realisable in the market. Under diff erent market assumptions, the values could also diff er signifi cantly.

The Bank measures fair values using the following fair value hierarchy, which refl ects the signifi cance of the inputs used in making the measurements:

Level 1: Quoted market prices (unadjusted) in an active market for identical instruments.

Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments, quoted prices for identical or similar instruments in markets that are considered less than active or other valuation techniques where all signifi cant inputs are directly or indirectly observable from market data.

Level 3: Valuation techniques using signifi cant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and where the unobservable inputs have a signifi cant eff ect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where signifi cant unobservable adjustments or assumptions are required to refl ect diff erences between the instruments.


2.11 Financial assets and fi nancial liabilities

Financial assets refer to assets that arise from contractual agreements on future cash fl ows or from owning equity instruments of another entity. Since fi nancial assets derive their value from a contractual claim, these are non physical in form and are usually regarded as being more liquid than other tangible assets.

Financial liabilities are obligations that arise from contractual agreements and that require settlement by way of delivering cash or another fi nancial asset. Settlement could also require exchanging other fi nancial assets or fi nancial liabilities under potentially unfavourable conditions. Settlement may also be made by issuing own equity instruments.

2.12 Recognition and de-recognition of fi nancial instruments

Financial instruments are recognised in the statement of fi nancial position on a settlement date basis, except for derivative instruments, which are recognized on a trade date basis.

A fi nancial asset is derecognised when the contractual rights to the cash fl ows from the fi nancial asset expire.

A fi nancial liability is derecognised from the statement of fi nancial position when the obligation specifi ed in the contract is discharged, cancelled or expires.

2.13 Business Combination

The Group accounts for business combinations using the acquisition method when control is transferred to the Group as per NFRS 3. The consideration transferred in the acquisition is generally measured at fair value, as are the identifi able net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profi t or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

2.14 Off setting

A fi nancial asset and a fi nancial liability are off set and the net amount recognised only where there is a legal right to do so and the intention is to settle on a net basis.

2.15 Cash and cash equivalents

Cash and cash equivalents comprise monetary assets and placements with original maturities of three months or less, calculated from the date the acquisition and placements were made.

Cash and cash equivalents are classifi ed as fi nancial asset and are measured at amortized cost in SoFP.

Restricted deposits are not included in cash and cash equivalents. These are measured at amortized cost and presented as a line item on the face of consolidated Statement of Financial Position (SoFP).


2.16 Impairment

Impairment of fi nancial assets

The Bank assesses at each reporting date whether there is objective evidence that a fi nancial asset or group of fi nancial assets is impaired. A fi nancial asset or a group of fi nancial assets is impaired and impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or more events occurring ast er the initial recognition of the asset (a loss event), and that loss event (or events) has an impact on the estimated future cash fl ows of the fi nancial asset or group of fi nancial assets that can be reliably estimated.

The Bank considers the following factors in assessing objective evidence of impairment:

- a signifi cant fi nancial diffi culty of the issuer or obligor;

- a breach of contract, such as a default or delinquency in interest or principal payments;

- it becoming probable that the borrower will enter bankruptcy or other fi nancial reorganization;

- Where observable data indicate that there is a measurable decrease in the estimated future cash fl ows from a group of fi nancial assets since the initial recognition of those assets, although the decrease cannot yet be identifi ed with the individual fi nancial assets in the group, including adverse changes in repayment patterns or economic conditions that correlate with defaults.

Assets carried at amortised cost

Financial assets carried at amortised cost (such as amounts due from Banks, loans and advances to customers as well as held–to–maturity investments are impaired, and impairment losses are recognized, only if there is objective evidence as a result of one or more events that occurred ast er the initial recognition of the asset. The amount of the loss is measured as the diff erence between the asset's carrying amount and the deemed recoverable value of loan.

The recoverable value of loan is estimated on the basis of realizable value of collateral (value of collateral is considered ast er hair cut prescribed by NRB) and the conduct of the borrower/past experience of the bank. Assets that are individually assessed and for which no impairment exists are grouped with fi nancial assets with similar credit risk statistics and collectively assessed for impairment. The credit risk statistics for each group of the loan and advances are determined by management prudently being based on the past experience.

Subsequent reversal of impairment loss, due to factors such as an improvement in the debtor’s credit rating, is recognized in the statement of profi t or loss. The reversal shall not result in a carrying amount of the fi nancial asset that exceeds what the amortized cost would have been had the impairment not been recognized at the date the impairment is reversed. Financial assets (and the related impairment allowance accounts) are written off either partially or in full, when there is no realistic prospect of recovery. Where fi nancial assets are secured, this is generally ast er receipt of any proceeds from the realization of security. If a future write–off is later recovered, the recovery is credited to the ’Income Statement’.

At each reporting date the Bank assesses whether there is any indication that an asset may have been impaired. If such indication exists, the recoverable amount is determined. For individual impairment, bank considers Top 50 loan clients and loans above delinquency of 90 days.


2.17 Derivative assets and derivative liabilities

Derivative assets and derivative liabilities (derivatives) create rights and obligations that have the eff ect of transferring between the parties to the instrument one or more of the fi nancial risks inherent in an underlying primary fi nancial instrument. However, they generally do not result in a transfer of the underlying primary fi nancial instrument on inception of the contract, nor does such a transfer necessarily take place on maturity of the contract.

Derivative fi nancial instruments meet the defi nition of a fi nancial instrument and are accounted for as derivative fi nancial asset or derivative fi nancial liability measured at FVTPL and corresponding fair value changes are recognized in profi t or loss.

2.18 Deposits from customers and BFIs and Debt Securities

These are classifi ed as fi nancial liabilities measured at amortized cost.

2.19 Revenue recognition

Revenue is recognized only when it is probable that the economic benefi ts associated with the transaction will fl ow to the entity. In some cases, this may not be probable until the consideration is received or until an uncertainty is removed.

Revenue is derived substantially from banking business and related activities and comprises net interest income and non-interest income. Income is recognised on an accrual basis in the period in which it accrues. The Group applies NAS 18 – “Revenue” in the accounting of revenue, unless otherwise stated.

a. Net interest income Interest income and expenses are recognised in profi t or loss for all interest-bearing instruments on an accrual

basis using the eff ective interest method. The eff ective interest rate is the rate that exactly discounts the expected estimated future cash payments and receipts through the expected life of the fi nancial asset or liability. Where fi nancial assets have been impaired, interest income continues to be recognised on the impaired value, based on the original eff ective interest rate.

The interest income has been recognized as per NRB Guidelines on Interest Income Recognition.

b. Fees and commission income Fees and commission income is generally recognised when the related services are provided or on execution of

a signifi cant act. Fees charged for servicing a loan are recognised as revenue as the service is provided.

c. Dividend Income Dividend is recognised as income when the right to receive the dividend is established. For bonus shares, the

numbers of shares alone are increased without any change in the cost price of shares.

d. Net Trading Gain The Group presents all accrued interest, dividend, unrealized fair value changes and disposal gains or losses in

respect of trading assets and liabilities under this head. The Group also presents foreign exchange trading gains or losses arising on foreign exchange buy and sell transactions under trading income.


2.20 Interim Reports

Interim reports corresponding to the fi nancial statements reported had been reported in accordance with the regulatory reporting requirements. Those statements have been published.

2.21 Discounting

Discounting has been applied where assets and liabilities are non-current and the impact of the discounting is material.

2.22 Limitation of NFRS implementation

Wherever the information is not adequately available and the cost to develop the same would exceed the benefi t derived, such exception to NFRS implementation has been noted and disclosed in respective sections.

2.23 Signifi cant changes from the policies adopted in the past

Signifi cant changes from the accounting policies adopted under previous GAAP (erstwhile Nepal Accounting Standards and directives issued by Nepal Rastra bank) and the adoption of NFRS has been disclosed in the respective segments, including the impact.

2.24 Property, plant and equipment (PPE) and Intangible Assets

a. Property, plant and equipment and Intangible assets (sost ware) are stated at cost less accumulated depreciation (Cost Model)

b. Land is not depreciated. Depreciation of others is charged to Statement of Profi t and Loss on Straight Line method over the useful life of those assets. The estimated useful life of the assets are as follows:

Assets Estimated Life Rate of DepreciationBuilding 40 years 2.5%Offi ce equipment 7 years 14.28%Computers 5 years 20%Furniture & Fixtures 7 years 14.28%Vehicles 5 to 7 years 20%/ 14.28%Intangible Assets/sost ware 5 Years

c. Leasehold improvements are capitalised at cost and amortised over period of lease.

d. Intangible assets (sost ware) are capitalised and amortised over the life of assets determinable or best estimated.

e. Depreciation on property, plant and equipment sold or disposed off during the year is charged up to the date of sales and gain or loss on the sales transaction is accounted for.

f. Sost ware costs are amortized over their estimated useful lives from the period of purchase.

g. Assets with a unit value of NPR 10,000 or less are expensed-off during the year of purchase irrespective of its useful life.


2.25 Investment property

Investment properties are land or building or both other than those classifi ed as property and equipment under NAS 16 – “Property, Plant and Equipment”; and assets classifi ed as non-current assets held for sale under NFRS 5 – “Non-Current Assets Held for Sale and Discontinued Operations”. The Group has recognized as investment property all land or land and building acquired as non banking assets.

Non banking assets (only land and building) are initially recognized at fair value. Since it is not intended for owner-occupied use, a depreciation charge is not raised.

2.26 Retirement Benefi ts

The Bank off ers retirement benefi ts to its confi rmed employee, mainly provident fund, gratuity and accumulated sick leave, all payable at the time of separation from service.

a. Provident fund

Provident fund is recognised at the time of contribution to the fund which is independent to the Bank.

b. Gratuity

Provision for gratuity is made on the basis of actuarial valuation carried out by an Actuary as per the provisions of Nepal Accounting Standards. At the time of separation from service, cash payments are made to the employees and the amount is computed as per the Bank's Policy.

c. Accumulated sick leave

Provision for accumulated sick leave is made on the basis of actuarial valuation carried out by an Actuary as per the provisions of Nepal Accounting Standards. At the time of separation from service, cash payments are made to the employees and the amount is computed as per the Bank's Policy.

d. Accumulated home leave

Provision for accumulated home leave is made on the basis of actuarial valuation carried out by an Actuary as per the provisions of Nepal Accounting Standards. At the time of separation from service or eligible accumulated leaves, cash payments are made to the employees and the amount is computed as per the Bank's Policy.

2.27 Operating Lease

Leases where a signifi cant portion of the risks and rewards of ownership are retained by the lessor, are classifi ed as operating leases. The Group has applied NAS 17 – “Leases” and expense is recognized to Statement of Profi t or Loss (SoPL) on straight line basis considering adjusted incremental rent over the lease period.

2.28 Income Taxa. Current Income TaxProvision for current income tax is made in accordance with the provisions of the prevailing Income Tax Act, 2058 and Rules framed there under.


b. Deferred Tax

Deferred tax is recognised on the diff erences between the carrying amount of assets and liabilities in the fi nancial statements and corresponding tax bases used in the computation provided on temporary diff erences arising between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements. Deferred income tax is determined by using tax rates (and laws) that have been enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised where it is probable that future taxable profi t will be available against which the temporary diff erences can be utilised. Deferred tax related to temporary diff erences in opening balances is credited or charged directly to equity and subsequent year diff erences are recognised in the income statement together with the deferred gain or loss.

2.29 Segmental Reporting

An operating segment is a component of the bank that engages in business activities from which it earns revenues and incurs expenses, including revenues and expenses that relating to transactions with any of the bank’s other components, whose operating results are reviewed by the management to make decision about resource allocation to each segment and assess its performance.

The Bank is organised for management and reporting purposes into segments such as: Retail, SME and MSME, Corporate, Deprived, Treasury and Others. Income tax is managed on a group basis and are not allocated to operating segments. All transactions between segments are conducted on an arm’s length basis, with inter-segment revenue and costs being eliminated in “Others”. Support costs are also allocated to Retail, Corporate, SME and MSME, Deprived, Treasury and others based on Management’s estimates of the benefi ts accruing to these segments for the costs incurred.

2.30 Share capital and reserves

The Ordinary shares in the Bank are recognized at the amount paid per ordinary share. The holders of ordinary shares are entitled to one vote per share at general meetings of the bank and are entitled to receive the annual dividend payments. The various reserve headings are explained hereinast er:

a. General reserve

The Bank is required to appropriate a minimum 20% of current year’s net profi t into this heading each year until it becomes double of paid up capital and then ast er a minimum 10% of profi t each year. This reserve is not available for distribution to shareholders in any form and requires specifi c approval of the central bank for any transfers from this heading.

b. Exchange equalization reserve

The Bank is required to appropriate 25% of current year’s total revaluation gain (except gain from revaluation of Indian Currency) into this heading.


c. Fair value reserve

This is a non-statutory reserve and is a requirement in the application of accounting policy for fi nancial assets. NFRS 9 requires that cumulative net change in the fair value of fi nancial assets measured at FVTOCI is recognized under fair value reserve heading until the fair valued asset is de-recognized. Any realized fair value changes upon disposal of the re-valued asset is reclassifi ed from this reserve heading to retained earnings.

d. Asset revaluation reserve

This is a non-statutory reserve and is a requirement in the application of accounting policy for non-fi nancial assets such as property, equipment, investment property and intangible assets that are measured following a re-valuation model. The Bank does not have any amount to present under asset revaluation reserve.

e. Capital Adjustment Fund

This is a statutory reserve and is a compliance requirement of NRB circular 12/072/73. The Bank is required to appropriate an amount equivalent to 100% of capitalized portion of interest income on borrowing accounts where credit facility was rescheduled or restructured, following the ast er eff ects of the great earthquake that struck the nation in April 2015. Fund in this account can be reclassifi ed to retained earnings upon full and fi nal repayment of the credit facility.

f. Corporate social responsibility fund

The Bank is required to appropriate an amount equivalent to 1% of net profi t into this fund annually. The fund is created towards funding the Bank’s corporate social responsibility expenditure during the subsequent year. Balance in this fund is directly reclassifi ed to retained earnings in the subsequent year to the extent of payments made under corporate social responsibility activities.

g. Investment adjustment reserve

The Bank is required to maintain balance in this reserve heading which is calculated at fi xed percentages of the cost of equity investments that are not held for trading. Changes in this reserve requirement are reclassifi ed to retained earnings.

h. Actuarial gain / loss reserve

This is a non-statutory reserve and is a requirement in the application of accounting policy for employee benefi ts. NAS 19 requires that actuarial gain or loss resultant of the change in actuarial assumptions used to value defi ned benefi t obligations be presented under this reserve heading. Any change in this reserve heading is recognized through other comprehensive income and is not an appropriation of net profi t.

i. Regulatory reserve

This is a non-free statutory reserve and is a requirement as prescribed in NRB directive. In the transition to NFRS from previous GAAP the Bank is required to reclassify all amounts that are resultant of re-measurement adjustments and that are recognized in retained earnings into this reserve heading. The amount reclassifi ed to this reserve includes re-measurement adjustments such as interest income recognized against interest receivables, diff erence in loan


loss provision as per NRB directive and impairment on loan and advance as per NFRS, amount equals to deferred tax assets, actuary loss recognized in other comprehensive income, amount of goodwill recognized under NFRS.

j. Debenture Redemption Reserve

The Bank is required to maintain a redemption reserve in respect of borrowing raised through debenture issuance. As per the terms of NRB approval relating to the Bank’s debenture issuance, the Bank is annually required to transfer 20% of the debenture’s face value to redemption reserve.

k. Employees training fund

The Bank is required to incur expenses towards employee training and development for an amount that is equivalent to at least 3% of the preceding year’s total personnel expenses. Any shortfall amount in meeting this mandatory expense requirement in the current year will have to be transferred to this reserve fund through appropriation of net profi t and the amount shall accumulate in the fund available for related expenses in the subsequent year. Balance in this fund is directly reclassifi ed to retained earnings in the subsequent year to the extent of expenses made for employees training related activities.

2.31 Stationery

Stationery purchased are stated at cost and charged to revenue at the time of consumption.

2.32 Provisions, Contingent Liabilities and Contingent Assets

The Bank creates a provision when there is a present obligation as a result of past events that probably requires an outfl ow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outfl ow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outfl ow of resources is remote, no provision or disclosure is made.

Contingent assets are not recognised in the fi nancial statements. However, contingent assets are assessed continually and if it is virtually certain that an economic benefi t will arise, the asset and related income are recognised in the period in which the change occurs.

2.33 Events ast er the Balance Sheet Date

Events ast er the balance sheet date are those events, favourable and unfavourable, that occur between the balance sheet date and the date when the fi nancial statements are authorised for issue.

Appropriate adjustments in the fi nancial statements and disclosures in notes to accounts have been made for all material and signifi cant events that have occurred between the balance sheet date and date when the fi nancial statements have been authorised for issue required as per Nepal Financial Reporting Standards (NFRS)

3. Rounding off and Comparative Figures

The fi nancial statements are presented in Nepalese Rupees, rounded off to the nearest rupee. Previous year's fi gures have been reclassifi ed wherever necessary in order to facilitate comparison.


Additional Disclosures - Financial Year 17 July 2018 to 16 July 2019 (1 Shrawan 2075 to 31 Ashad 2076)

1. Provision for Bonus Provision for bonus has been calculated and provided at 10% of net profi t before bonus and tax.

2. General Reserve

As per section 44 of the Banks and Financial Institutions Act 2063, 20% of the current year’s net profi t amounting NPR 451,455,205 has been transferred to General Reserve.

3. Exchange Fluctuation Reserve

As per Section 45 of the Banks and Financial Institutions Act, 2063 25% of the revaluation gain amounting to NPR 22,003,093 has been transferred to Exchange Fluctuation Reserve.

4. Exchange Fluctuation Income

The Bank earned a total exchange fl uctuation income of NPR 440,061,862 out of which a gain of NPR 202.11 Million was generated through NDF contracts transactions. Income realised from the diff erence between buying and selling rates of Foreign Exchange is accounted for as trading gains and shown as “Gain/loss foreign exchange transaction” under “Net Trading Income” in Schedule 4.33 and income realized through revaluation gain is shown under Foreign exchange revaluation gain in other operating income in schedule 4.34.

5. Investment Adjustment Reserve

The investments are valued at fair value required as per NFRS and hence only 100% of investment amount for CEDB Hydro Fund under ‘Available for Sale’ category totalling to NPR 10,000,000 has been set aside as Investment Adjustment Reserve.

Particulars Investment Amount IAR % IAR Amount

IAR not required to be created 204,387,000 0% -

100% IAR required 10,000,000 100% 10,000,000

Total 214,387,000 10,000,000


6. Debenture Redemption Reserve

As required by NRB directive, an amount equal to NPR 90,452,511 has been appropriated to Debenture Redemption Reserve during the year. The total balance in Debenture Redemption Reserve as at 16 July 2019 is NPR 400,000,000.

Debenture – 1

Debenture Amount 500,000,000

Issued Date 18-Feb-15

Maturity Date 21-Aug-20

Beginning Year Excluding Issue Year 2015-16

Final Year Excluding Redemption Year 2019-20

No. of Years for Reserve Creation 5 Years

Debenture Reserve per year 100,000,000

Current Year 2018-19

No. of Years for Reserve Creation till FY 2018-19 4 Years

Redemption Reserve required for 4 Years (A) 400,000,000

Debenture – 2

Debenture Amount 1,684,505,000

Issued Date 12-Apr-19

Maturity Date 12-Apr-29

Beginning Year Excluding Issue Year 2019-20

Final Year Excluding Redemption Year 2027-28

No. of Years for Reserve Creation 9

Debenture Reserve per year 187,167,222.22

Current Year - Issue Year 2018-19

No. of Years for Reserve Creation till FY 2018-19 None

Redemption Reserve required (B) -

Total Reserve (A)+(B) 400,000,000

Reserve created till FY 2017-18 309,547,489

Additional Reserve for this year 90,452,511


7. Corporate Social Responsibility (CSR) Fund

The bank has apportioned NPR. 22,572,760 /- as CSR fund which is equivalent to 1% of Net Profi t of the year. The fund has been created as per the requirement of NRB Circular Bai.BI.Ni.Bi./Niti/Paripatra/KaKhaGa/11/073/74 dated 2073/10/12. The fund so created shall be used for CSR activities of the Bank in the next fi scal year as per bank’s CSR policy. The detailed movement of reserve is given below:

Particulars NPR

A. Net profi t for FY 2075/76 2,257,276,027

B. 1% of net profi t appropriated to CSR fund 22,572,760

C. Opening CSR fund 31,548,400

D. CSR expense incurred for FY 2075/76 5,678,558

E. Closing CSR Reserve FY 2075/76 (B+C-D) 48,442,603

F. Net Movement (E-C) 16,894,202

8. Staff Skill Development (SSD) Fund The bank has expensed NPR. 28,304,668 under staff training for the FY 2075/76 which is more than the 3% of the total employee cost of the previous FY 2074/75. Hence, no fund has been apportioned to “Staff Skill Development Fund” as per NRB Circular Bai.BI.Ni.Bi./Niti/Paripatra/KaKhaGa/10/073/74 dated 2073/09/26. The detailed movement of reserve is given below:

Particulars NPR

A. Staff Expenses of FY 2074/75 736,423,762

B. 3% of the above to be expensed in FY 2075/76 22,092,713

C. Training Expenses for FY 2075/76 28,304,668

D. Excess/(Shortfall) (C-B) 6,211,955

E. Opening SSDF -

F. Transfer to SSD Fund -

9. Event ast er reporting period The Board of Directors in its meeting dated 10 November 2019 has proposed the issue of 21 % Stock Dividend and 14% cash dividend (including for tax purpose) for each share held. The dividend shall be distributed from the retained earnings available as on Ashad end 2076 of NMB Bank Ltd on the paid up capital of NPR. 11,529,741,708 (including adjusted paid up capital of erstwhile Om Development Bank Ltd.). This is to be approved at the forthcoming Annual General Meeting of the Bank.


10. Unpaid Dividend

As on the balance sheet date, unpaid dividends of over fi ve years amount to NPR 5,128,793.31 and total unpaid dividends also amounts to NPR 5,128,793.31. Subsequently the Bank deposits the unclaimed amounts in Investor’s Protection Fund as required by the Companies Act.

11. Earnings per Share

Basic earnings per equity share are computed in accordance with NAS 26 Earnings per Share. Basic earnings per equity share are computed by dividing net profi t ast er tax by the weighted average number of equity shares outstanding during the year. Bonus shares, also known as scrip dividends, involve the issue of shares without any consideration. Since the bonus shares do not change the resources available to the entity to earn a return for the shareholders (as in the case of shares issued for cash) the eff ect of change in number of shares in the EPS calculation is cancelled for the year in which bonus issue takes place and as well as in the prior periods presented. The EPS has also been restated in Principal Indicators.

The following table sets forth, for the periods indicated, the computation of earnings per share.

Particulars YE Ashad 2076 YE Ashad 2075

Weighted average no. of equity shares outstanding (Restated) 95,900,157 84,797,652

Net profi t 2,257,276,027 1,853,792,753

Basic earnings per share 23.54 21.86

Nominal value per share 100 100

12. Principal Indicators

The principal indicators of the bank for the past 5 years are as follows:

S.No Particulars Indicators FY 2071/72 FY 2072/73 FY 2073/74 FY 2074/75 FY 2075/76

1 Percent of Net Profi t/Gross Income Percent 18.42 20.90 20.52 18.09 18.06

2Earnings Per Share (Restated for previous years)

Rs. 21.48 22.10 22.24 21.86 23.54

3 Market Value Per Share Rs. 507 810 545 358 382

4 Price Earnings Ratio Ratio 20.24 29.15 20.27 12.48 16.23

5 Dividend (including bonus) on Share Capital Percent 8.42 20.00 15.79 30.00 35.00

6 Cash Dividend on Share Capital Percent 0.42 1.00 0.79 20.00 14.00

7 Interest Income/Loans & Advances Percent 7.86 7.16 9.26 10.78 11.17


S.No Particulars Indicators FY 2071/72 FY 2072/73 FY 2073/74 FY 2074/75 FY 2075/76

8 Staff Expenses/Total Operating Expenses Percent 48.66 57.15 55.03 58.09 61.52

9 Interest Expenses on Total Deposit and Borrowing Percent 3.63 3.08 4.71 6.76 6.58

10 Exchange Gain/Total Assets Percent 0.29 0.21 0.24 0.27 0.32

11 Staff Bonus/Total Staff Expenses Percent 35.32 34.01 34.77 38.72 34.21

12 Net Profi t/Loan and Advances Percent 1.81 2.05 2.34 2.43 2.42

13 Net Profi t/Total Assets Ratio 1.21 1.49 1.69 1.65 1.67

14 Total Credit/Deposit Percent 75.32 84.07 85.50 90.46 94.61

15 Total Operating Expenses/Total Assets Percent 1.36 1.48 1.69 1.56 1.70

16 Adequacy of Capital Fund on Risk Weighted Assets

a) Core Capital Percent 8.84 9.34 12.39 14.78 13.09

b) Supplementary Capital Percent 2.29 1.64 1.22 0.97 2.34

c) Total Capital Fund Percent 11.13 10.98 13.61 15.75 15.43

17 Liquidity (CRR) Ratio 13.32 10.81 7.72 6.68 4.19

18 Non-performing credit/Total credit Percent 0.42 1.81 1.68 0.88 0.82

19 Base Rate Percent 7.89 6.68 10.12 10.70 9.86

20 Weighted Average Interest Rate Spread Percent 4.19 4.31 3.89 3.45 3.54

21 Return on assets Percent 1.40 1.92 1.82 1.80 1.83

22 Return on Equity Percent 16.40 21.96 16.49 13.54 13.32

23 Cost to Income Ratio Percent 37.35 36.49 36.71 36.90 35.01

24 Cost of Fund (YTD) Percent 4.55 3.99 5.06 7.46 7.26

25 Average Yield (YTD) Percent 8.74 8.30 8.95 10.91 10.80

26 Book Net-worth Rs. in ‘000 3,296,447 6,861,160 10,627,149 16,489,809 17,403,014

27 Total Shares Nos. in ‘000 24,000 44,869 64,618 76,033 96,182

28 Total Staff Number 357 755 918 1,080 1,120

29 No of Branches Number 29 69 80 110 110

30 No of ATMs Number 37 49 66 96 103


13. Loans and Advances Written Off

The Bank has written off loans and advances amounting to NPR 14,622,195 (excluding interest write off ) the detail of which is as follows:

S.No Name of Clients Facility Date of Written off Principal Accrued

Interest

1 China Hygienic Meat Production & Suppliers Pvt. Ltd. Overdrast Loan 17/02/19 14,622,195 0.00

However, the bank has also recovered amount NPR. 17,585,901 during the fi scal year from loan and interest write off amount of previous fi scal years.

14. Other Assets Written Off

The Bank did not write off any balance on Other Assets.

15. Summary of Changes in Dues to customers during the year

The fi nancial growth of the dues to customers (except dues to BFI’s) during the year is given below:

Amount in NPR

Particulars FY End 2076 FY End 2075 Increase/(Decrease)

Term deposits 49,404,840,926 45,833,759,771 3,571,081,155

Call deposits 9,146,310,257 7,641,835,785 1,504,474,472

Current deposits 5,683,120,598 4,790,516,782 892,603,816

Saving deposits 28,196,756,446 19,861,381,189 8,335,375,257

Other 5,461,273,739 5,843,373,692 (382,099,953)

Total 97,892,301,967 83,970,867,219 13,921,434,748

16. Agency Account

Particular Less than 1 Year More than 1 year less than 3 years More than 3 years Total

Agency Accounts 521,093,280 150,000 - 521,243,280

Inter branch - - - -


17. Capitalization of Interest

During the fi scal year, the Bank has recognised interest income of NPR 105,179,647.74 from capitalization of interest during moratorium period of fi ve separate projects. These capitalizations have been approved/mandated by the NRB.

S.No. Borrower Name Total Capitalization

1 Bindhyabasini Hydropower Development Company Pvt. Ltd. 10,409,773.90

2 Eastern Hydro Power Ltd. 6,090,589.18

3 Kalanga Hydro Pvt. Ltd. 26,968,533.37

4 Liberty Energy Company Ltd. 15,755,847.46

5 Upper Solu Hydro Electric Company Ltd. 45,954,903.83

Total 105,179,647.74

18. Dividend IncomeDuring the fi scal year, the Bank has earned following dividend incomes from its investments:

Particulars Amount (NPR)

Karja Suchana Kendra FY 2073/74 178,500

Karja Suchana Kendra FY 2074/75 267,750

Mero Microfi nance Bittiya Sanstha Limited FY 2074/75 2,002,000

Nepal Clearing House Limited FY 2074/75 906,788

Laxmi Laghubitta Bittiya Sanstha Limited FY 2074/75 110

Butwal Power Company Limited FY 2074/75 7,509,212

NMB Capital FY 2074/75 38,000,000

Rural Microfi nance Laghubitta Bittiya Sanstha Limited FY 2074/75 5,670

Nepal Stock Exchange Ltd. 45,466

NMB Sulav Investment Fund - FY 2074/75 22,105,262

TOTAL 71,020,758


19. Classifi cation of Assets and Liabilities based on Maturity (As per yearly NRB Report)

Amount in NPR Million

S.N. Particulars 1-90 Days

91-180 Days

181-270 Days

271-365 Days

Over 1 Year

Total Amount

Assets

1 Cash Balance 2,452 - - - - 2,452

2 Balance with Banks & FIs 9,688 - - - - 9,688

3 Investment in Foreign Banks 3,189 318 329 110 - 3,946

4 Call Money - - - - - -

5 Government Securities 339 886 293 122 7,644 9,284

6 Nepal Rastra Bank Bonds - - - - - -

7 Inter Bank & FI Lending 3,053 - - - - 3,053

8 Loans & Advances 26,845 14,052 5,709 4,117 41,164 91,887

9 Interest Receivable 131 - - - - 131

10 Reverse Repo - - - - - -

11 Receivables from other Institutions under Commitment - - - - - -

12 Payment to be made for facilities under s.no 20,21 & 22 22,811 10,115 2,973 4,143 7,635 47,677

13 Others - - - - - -

Total Assets (A) 68,508 25,371 9,304 8,492 56,443 168,118

Liabilities

14 Current Deposits 7,837 - - - - 7,837

15 Saving Deposits 10,732 1,043 1,043 1,101 23,967 37,886

16 Fixed Deposits 14,162 12,026 9,025 7,297 6,894 49,405

17 Debentures - 2,185 2,185

18 Borrowings: 42 544 - - 3,468 4,053

(a) Call/Short Notice - - - - - -

(b) Inter-bank/Financial Institutions - - - - 3,468 3,468

(c) Refi nance 42 544 - - - 585

(d) Others - - - - - -

19 Other Liabilities and Provisions 793 102 102 102 3,149 4,247

(a) Sundry Creditors 70 - - - - 70

(b) Bills Payable 96 - - - - 96

(c) Interest Payable 521 - - - - 521

(d) Provisions 4 - - - 166 170

(e) Others 102 102 102 102 2,983 3,389


20 Payable to other institutions under Commitment 1,096 29 - - - 1,124

21 Unutilized Approved Facilities 4,332 - - - - 4,332

22 Letter of Credit/Guarantee (Net of Margin) 17,383 10,087 2,973 4,143 7,635 42,221

23 Repo - - - - - -

24 Payment to be made for facilities under S.No 11 - - - - - -

25 Others - - - - - -

Total Liabilities (B) 56,376 23,830 13,143 12,643 47,298 153,290

Net Financial Assets (A-B) 12,132 1,541 (3,839) (4,151) 9,145 14,829

Cumulative Net Financial Assets 12,132 13,673 9,834 5,683 14,829 -

20. Summary of concentration of ExposuresAmount in NPR

Particulars Loans, and Advance Deposit Contingent

Total amount as at 16 July 2019 91,886,954,994 98,516,666,963 44,144,526,363

Highest exposure to single unit 4,758,287,064 4,991,647,889 6,168,537,870

Highest % of exposure to single unit 5.18% 5.07% 13.97%

21. Borrowing by the Bank against the collateral of own assets

Borrowing by the Bank against the collateral of own asset is NIL.

22. Transactions in Bullion

The Group deals in bullion (Gold/Silver) by holding stock on consignment basis on behalf of suppliers as per the arrangement. The value of consignment as on balances sheet date is 228,747,129 and has been refl ected under “Advance Gold and silver” (Gold Consignment)” in Schedule 4.16. Transaction of gold and silver are carried out as per the NRB Directives.

23. Capital Construction

There are no capital constructions (pending capitalization) as at the end of the current fi scal year.


24. Loan Impairment

The bank maintains an allowance for credit losses relating to on-balance sheet exposures of loans and advances.

Loans which are individually signifi cant (the threshold being selected to cover up top 50 fi les, fi les under 50% and 100% provision and fi les with special asset management department) are assessed individually for objective indicators of impairment. A loan is considered impaired when it is determined that bank will not be able to collect all amounts due according to the original contractual terms. Credit exposures of individually signifi cant loans are evaluated based on factors including the borrower’s overall fi nancial condition, resources and payment record, and where applicable, the realizable value of any collateral. If there is evidence of impairment leading to an impairment loss, then the amount of the loss is determined as the diff erence between the carrying value of the loan, including accrued interest, and the estimated recoverable amount. The estimated recoverable amount is measured as the present value of expected future cash fl ows discounted at the loan’s original eff ective interest rate, including cash fl ows that may result from the realization of collateral less costs to sell.

Loans which are not individually signifi cant, or which are individually assessed and not determined to be impaired, are collectively assessed for impairment. For the purposes of a collective evaluation of impairment, loans are grouped on the basis of similar credit risk characteristics, taking into account loan type, past due status and other relevant factors viz. OD Loan, Working Capital Loan, Term Loan and Retail EMI. The collective impairment allowance is determined by reviewing factors including historical loss experience, which takes into consideration historical probabilities of default, loss given default and exposure at default.

The impairment status as per para 63 of NAS 39 is given below:

Particulars Year ended 31 Ashad 2076 Year ended 32 Ashad 2075

a. Individual Impairment 752,441,136 896,307,701

b. Collective Impairment 150,255,194 74,395,715

Total 902,696,330 970,703,416

The Loss given default status (LGD) for impairment calculation purpose is given below:


OD Loan 19% 21%

Term Loan 4% 5%

Retail EMI 19% 22%

Working Capital Loan 25% 28%

25. Carve-outs in NFRS

Upon the recommendation from Accounting Standard Board-Nepal, the Institute of Chartered Accountants of Nepal (ICAN) has issued following carve-outs for the implementation of NFRS and has prescribed alternative treatments as set out below:


a. NFRS 10 – “Consolidated Financial Statements”

The holding company can carve out to prepare consolidated fi nancial statements using uniform accounting policies for like transactions and other events in similar circumstances as specifi ed in para 19 of NFRS 10 unless it is impracticable to do so.

The Bank and its both Subsidiaries have adopted uniform accounting policy based on NFRS for like transactions and other events in similar circumstances.

b. NAS 39 – “Financial Instruments: Recognition and Measurements”

This is the carve out from the requirement to determine impairment loss on fi nancial assets – loans and advances by adopting the ‘Incurred Loss Model’ as specifi ed in para 63 of NAS 39 unless the entity is a bank or a fi nancial institution registered as per Bank and Financial Institutions Act 2073. Such entities shall measure impairment loss on loans and advances at the higher of:

- amount derived as per norms prescribed by Nepal Rastra Bank for loan loss provisioning; and

- amount determined as per para 63 of NAS 39 adopting Incurred Loss Model

This is the mandatory carve out. Hence, the Group has recognized impairment loss on loans and advances at the higher of the amount derived as per prudential norms specifi ed in NRB directive and the amount derived from incurred loss model as specifi ed in para 63 of NAS 39 as given below:


a. Impairment on Loan as per Para 63 902,696,330 970,703,416

b. Loan Loss Provision as per NRB 1,398,925,416 1,232,652,783

Higher of a and b 1,398,925,416 1,232,652,783

The Group has recognized impairment loss on other fi nancial assets measured at amortized cost in accordance with para 63 of NAS 39.

c. NAS 39 – “Financial Instruments: Recognition and Measurements”

This is the carve out from the requirement to incorporate all fees and points paid or received under contractual terms of a fi nancial instrument in the calculation of ‘Eff ective Interest Rate’ for the fi nancial instrument as specifi ed in para 9 of NAS 39 and also carve out from the requirement to recognize interest income on a fi nancial asset or a group of similar fi nancial assets, which has been written down as a result of an impairment loss, by applying the rate of interest used to discount the asset’s future cash fl ows for the purpose of measuring its impairment loss as specifi ed in para 9 of NAS 39 unless it is immaterial or impracticable to determine reliably.

The Group has opted this carve out and hence has excluded the full amount of upfront loan management fees or commission received on loans and advances in the calculation of eff ective interest rate for the loan. The upfront fees and commission are recognized as income in the same period the loan is approved. The Group has recognized interest income on impaired fi nancial asset by applying the original eff ective interest rate to the gross carrying amount of a fi nancial asset.


26. Risk Management

Risk Management StructureNMB Board is the ultimate authority to oversee overall risk management of the bank by establishing risk management strategies, appropriate risk appetite, and ensuring the risk management policies, procedures and standards are adequate and is eff ectively implemented. Sound risk management system in the bank is established through formation of Board level Risk Management Committee and Audit committee; management level Asset and Liability Committee, Credit Risk Management Committee, Operational Risk Management Committee, E&S (Environmental and Social) Committee, Credit Recovery Committee and Corporate Governance Committee. In this structure, new/revised policies and standards, reports on risk management, portfolio analysis, stress testing, investment, liquidity, capital adequacy, industry/market analysis, and critical risk issues identifi ed are escalated to Risk Management Committee for review and decision.

Risk management structure in the bank’s Organogram:

Risk Governance

The bank aspires to effi ciently manage various risks that arise during business process through formulation and implementation of Risk Management Framework. Risk Governance at the bank is primarily based on following principles:

1) Risk Appetite Determination, 2) Pervasive Risk Culture, 3) Eff ective Communication/Reporting,4) Eff ective Functional Structure, Policies, Procedures, and MIS, adequate infrastructure and resources for Risk

Management,

Board of Directors

Risk Management Committee (RMC)

Audit Committee Human Resource Committee

Asset Laundering Prevention Committee

Chief Executive Officer (CEO)

Assets & Liability Committee

Pricing Committee

Operational Risk Management Committee

Corporate Governance Committee

Legal & Compliance Department

Credit Risk Management Committee

Chief Risk Officer (CRO)

Credit Risk Management Department

Operational & Market Risk Department

IT and Information Security Risk

E&S Committee

E&S Risk Management Department

Corporate Information Security Committee


Risk governance structure, i.e. the responsibility for maintaining risk within the banks risk appetite is cascaded down from the Board to the respective Committees and then to appropriate functional bodies in organizational structure.

In addition, the bank as an active member of the Global Alliance for Banking on Values (GABV) strives for delivering sustainable economic, social and environmental development with a focus on helping individuals fulfi l their needs and build stronger communities.

Credit Risk Management in NMB Bank:Credit Risk refers to the potential loss due to failure of counterparty to meet its obligations in accordance with the terms specifi ed in the credit agreements. Credit Policy, Credit Risk Management Framework, Credit Process Manual, Product Papers and various other credit related documents in place provides the fi rm foundation for a strong credit risk management environment in the bank by defi ning clear roles and responsibilities of various functions and risk takers in Credit system. The key independent units responsible for ensuring eff ective Credit Risk Management in the bank are Credit Risk Management Department, Credit Administration and Control Department, Special Assets Management Department and Business Segments.

A thorough analysis of the borrower and the industry in which the borrower operates is ensured prior advancing credit facilities. The Bank also has an internal credit risk rating procedure in place to categorize customers in diff erent risk profi les and formulate appropriate account strategies. The Bank primarily focuses on ensuring prudent fi nancing requirements of the client and the client’s capacity to repay the debt obligation on time.

Bank has a product wise and industry/sector wise portfolio and NPL thresholds to monitor the quality of loan portfolio and manage the concentration risk. These thresholds are reviewed on periodical basis in Credit Risk Management Committee and Risk Management Committee in quarterly interval for required actions/strategic decisions.

Market Risk and Operation Risk Management in NMB Bank:Market and Operation Risk management in Nepalese Banks has been a newer challenge. In the times of volatility and fl uctuations in the market, NMB Bank needs to prove its determination by withstanding the market variations and achieve sustainability in terms of growth as well as to have a stable share value. Hence, an essential component of enhanced risk management framework would be to mitigate all the risks and rewards of the products and services off ered by the bank.

NMB has passed through a monumental change ast er the merger with three Development Banks and one Finance Company. NMB has taken strategic focus on digitization and technological advancement to enhance banks services as well as risk management.

NMB ensures parity between risk and return and hence, management of risk by incorporating a set of systematic and professional methods especially those defi ned by the Basel III becomes an essential requirement for us.

In the course of operations, the bank is invariably faced with diff erent types of risks that may have a potentially negative eff ect on the business. NMB Bank’s risk management approach includes risk identifi cation, measurement and assessment, and minimizes impact on the fi nancial result and capital of the bank.


Market risk includes interest rate and foreign exchange risk.

Interest rate risk is the risk of negative eff ects on the fi nancial result and capital of the bank as a result of changes in interest rates.

The bank’s products are mostly based on fl oating interest rate. Only fi xed deposits are with fi xed interest rate. In Nepalese local market, short term movement in interest rate is negligible. Asset and Liability Committee (ALCO) monitors the interest rate movement on regular basis.

Foreign exchange risk is the risk of negative eff ects on the fi nancial result and capital of the bank caused by changes in exchange rates.

The foreign exchange risk of the bank is minimal as all the transactions are carried out on behalf of the customers against underlying remittances and trade transactions.

Operational risk is the risk of negative eff ects on the fi nancial result and capital of the bank caused by omissions in the work of employees, inadequate internal control procedures and processes, inadequate management of information and other systems, and unforeseeable external events.

NMB Bank has independent department to look ast er operational risk wherein Operational Risk Management Committee meets on monthly basis to discuss and plan the way forward to mitigate potential operational risk identifi ed.

Bank has developed and adhered to Minimum Control Standards and Incident Reporting Guidelines along with Whistle Blowing Policy to identify potential operational risks. Operational Risk Department independently assess each incident/event/cause to measure the risk grade which is ultimately discussed/ analyzed further in Operational Risk Management Committee to put appropriate controls in place. If required, the incident/event/cause along with the risk assessment, probability and impact is escalated further to Risk Management Committee or the Board of the Bank. Apart from that, Operational Risk Unit conducts branch/ department visits to monitor/ review the branches and departments and also to train/ create awareness on operational risk.

Liquidity RiskLiquidity risk is the potential event where the Bank either does not have suffi cient liquid fi nancial resources available to meet all its obligations as they fall due, or can only access these fi nancial resources at excessive cost. The Liquidity Risk Framework governs liquidity risk management and is managed by ALCO. In accordance with that policy, the Bank maintains a liquid portfolio of marketable securities as a liquidity buff er.

Other RiskManagement of other risk such as Reputational, Legal and Compliance, Human Resource (HR) etc. is equally pertinent as the bank grows. The bank has separate department to oversee Legal and Compliance issues. HR Department and Board level HR Committee is responsible for all HR functions and related risk management. The bank has also setup dedicated Offi cers to manage Reputational and other risks.


Internal Control

The Board and the management is committed in managing risks and in controlling its business and fi nancial activities in a manner which enables it to maximize profi table business opportunities, avoid or minimize risks which can cause potential loss or reputational damage to the bank, ensure compliance with applicable laws and regulations and enhance resilience to external events. To achieve this, bank has established set of policies and procedures for risk identifi cation, risk evaluation, risk mitigation and control/monitoring.

The eff ectiveness of the Company’s internal control system is reviewed regularly by the Board, Risk Management Committee, Management and Internal Audit.

The Internal Audit monitors compliance with policies/standards and the eff ectiveness of internal control structures across the Company through its program of business/unit audits. The Internal Audit function is focused on the areas of greatest risk as determined by a risk-based assessment methodology. Internal Audit reports are periodically forwarded to the Audit Committee. The fi ndings of all audits are reported to the Chief Executive Offi cer, department heads and branch managers for initiating immediate corrective measures

27. Categories of Financial Instruments and Fair Value Hierarchy

Assets and liabilities carried at fair value or for which fair values are disclosed have been classifi ed into three levels according to the observability of the signifi cant inputs used to determine the fair values. Changes in the observability of signifi cant valuation inputs during the reporting period may result in a transfer of assets and liabilities within the fair value hierarchy. The Bank recognises transfers between levels of the fair value hierarchy when there is a signifi cant change in either its principal market or the level of observability of the inputs to the valuation techniques as at the end of the reporting period.

Level 1 fair value measurements are those derived from unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 valuations are those with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and fi nancial instruments valued using models where all signifi cant inputs are observable.

Level 3 portfolios are those where at least one input, which could have a signifi cant eff ect on the instrument’s valuation, is not based on observable market data.

Financial instruments are measured on an ongoing basis either at fair value or at amortized cost. The summary of signifi cant accounting policies describes how the classes of fi nancial instruments are measured, and how income and expenses, including fair value gains and losses, are recognized. The following table analyses the carrying amounts of the fi nancial instruments by category as defi ned in NAS 39 and by headings of the Statement of Financial Position.


The Hierarchy of fair value measurement is given below:

ParticularsFair value Hierarchy

(Level)

As at As at

As at 31 Ashad 2076 As at 32 Ashad 2075

Carrying Value Fair value Carrying Value Fair value

FVTPL

Other trading assets 3 340,390,000 340,390,000 321,720,000 321,720,000

Derivative fi nancial instruments

1 8,595,482,282 8,595,482,282 7,506,751,485 7,506,751,485

Subtotal 8,935,872,282 8,935,872,282 7,828,471,485 7,828,471,485

FVTOCI

Quoted Equities 1 593,366,539 593,366,539 539,086,827 539,086,827

Unquoted Equities 3 31,995,900 31,995,900 14,392,000 14,392,000

Subtotal 625,362,439 625,362,439 553,478,827 553,478,827

Grand-Total 9,561,234,721 9,561,234,721 8,381,950,312 8,381,950,312

Amortized cost

Cash and cash equivalent 3 8,096,354,503 8,096,354,503 5,180,404,105 5,180,404,105

Due from Nepal Rastra Bank 3 10,829,181,584 10,829,181,584 7,260,194,560 7,260,194,560

Placement with BFI’s 3 2,172,967,239 2,172,967,239 276,407,171 276,407,171

Loan and advances to B/FIs

3 3,317,961,987 3,317,961,987 2,497,567,769 2,497,567,769

Loans and advances to customers

3 88,485,031,394 88,485,031,394 72,711,771,766 72,711,771,766

Investment securities (except equity instruments)

3 9,690,988,576 9,690,988,576 8,894,967,898 8,894,967,898

Subtotal 122,592,485,282 122,592,485,282 96,821,313,269 96,821,313,269

Total of Financial Assets 132,153,720,004 132,153,720,004 105,203,263,581 105,203,263,581

FVTPL/FVTOCI

Liability for employees DBO 3 59,445,250 59,445,250 60,864,641 60,864,641

Subtotal 59,445,250 59,445,250 60,864,641 60,864,641

Amortized cost

Due to Bank and Financial Institutions

3 624,364,996 624,364,996 1,036,268,951 1,036,268,951

Due to Nepal Rastra Bank 3 3,203,523,072 3,203,523,072 660,071,641 660,071,641

Deposits from customers 3 97,892,301,967 97,892,301,967 83,970,867,219 83,970,867,219

Borrowing 3 3,468,060,000 3,468,060,000 - -


Other liabilities 3 1,846,937,438 1,846,937,438 1,140,225,221 1,140,225,221

Debt securities issued 3 2,239,236,412 2,239,236,412 517,547,945 517,547,945

Subtotal 109,274,423,885 109,274,423,885 87,324,980,977 87,324,980,977

FVTPL

Derivative fi nancial instruments

1 8,458,374,429 8,458,374,429 7,477,483,892 7,477,483,892

Subtotal 8,458,374,429 8,458,374,429 7,477,483,892 7,477,483,892

Total of Financial Liabilities 117,792,243,564 117,792,243,564 94,863,329,510 94,863,329,510

The details of equity instruments with fair valuation hierarchy are as follows:

Particulars

NMBFair

Valuation Hierarchy

As at 31 Asar 2076 As at 32 Asar 2075

Cost Fair Value Cost Fair Value Level

1. Investment in quoted equity shares

1.1 United Insurance Co. (Nepal) Limited 211,300 246,000 211,300 258,600 Level 1

1,440 Promoter shares of Rs 100 each fully paid up

120 Ordinary shares of Rs 100 each fully paid up

1.2 NLG Insurance Company Limited - 5,400 - 43,710 Level 1

54 Ordinary bonus shares of Rs 100 each fully paid up

1.3 Ridi Hydro Power Limited 3,600 4,410 3,600 5,781 Level 1

36 Ordinary shares @ Rs. 100 each fully paid up and bonus Shares - 13 Units

1.4 Butwal Power Company Ltd. 209,006,679 187,688,873 209,006,679 190,650,803 Level 1

417,179 ordinary shares @ Rs.100 each fully paid up and bonus shares - 41,718 Units

1.5 Rural Microfi nance Development Center Limited - 458,073 - 411,390 Level 1

693 Units bonus Shares @ Rs 100 each fully paid up

1.6 Laxmi Laghubitta Sanstha Limited - 2,644 - 4,392 Level 1

4 Units ordinary bonus Shares @ Rs 100 each fully paid up

1.7 Mero Micro Finance Bittiya Sanstha Ltd. 37,023,000 46,046,000 14,000,000 20,020,000 Level 1

140,000 Promoter shares of Rs 100 each fully paid up, bonus Shares - 90,230 Units, Right Share - 230,230 (Total Shares - 460,460 Units)

1.8 Nepal Telecom Ltd. 34,698,472 34,382,502 - - Level 1

49,614 ordinary shares @ Rs.100 each fully paid up

Sub-Total 280,943,051 268,833,902 223,221,579 211,394,676 -


2. Investment in quoted mutual fund:

2.1 NMB Sulav Investment Fund-1 105,000,000 113,610,000 105,000,000 121,275,000 Level 1

10,500,000 Ordinary shares of Rs 10 each fully paid up

2.2 NMB Hybrid Fund-1 140,000,000 140,420,000 140,000,000 135,660,000 Level 1

14,000,000 Ordinary Share of Rs. 10 each fully paid up

2.3 Laxmi Equity Fund (LEMF) 40,947,100 31,242,637 40,947,100 33,167,151 Level 1

4,094,710 ordinary shares @ Rs 10 each fully paid up

2.4 NIC Asia Growth Fund (NICGF) 10,000,000 10,280,000 10,000,000 9,190,000 Level 1

1,000,000 units ordinary shares @ Rs. 10 each fully paid up

2.5 Sanima Equity Fund (SAEF) 20,000,000 18,800,000 20,000,000 19,120,000 Level 1


2.6 Citizen Mutual Fund-I 10,000,000 10,180,000 10,000,000 9,280,000 Level 1


Sub-Total 325,947,100 324,532,637 325,947,100 327,692,151

Total Investments in quoted equity instruments 606,890,151 593,366,539 549,168,679 539,086,827

3. Investment in unquoted equity

3.1 Nepal Stock Exchange Limited 5,000 71,600 5,000 5,000 Level 3

716 Ordinary shares of Rs 100 each fully paid up

3.2 Nepal clearing House Limited 4,198,000 6,045,100 4,198,000 4,198,000 Level 3

41,980 Equity shares of Rs 100 each and bonus Units - 18,741 (Total Units-60,451)

3.3 Credit Information Bureau Limited 189,000 1,890,000 189,000 189,000 Level 3

5,600 Ordinary shares of Rs 100 each, bonus Units - 3,710 (Total Units-9,310)

3.4 CEDB Hydro Fund Limited 10,000,000 11,989,200 10,000,000 10,000,000 Level 3

100,000 Promoter shares of Rs 100 each fully paid up, bonus Shares - 8,993 Units (Total Units-108,993)

3.5 Citizens Mutual Fund-II 2,000,000 2,000,000 - - Level 3

200,000 units of Rs 10 each fully paid up - -

3.6 NABIL BALANCE FUND-II Level 3

1,000,000 units of Rs 10 each fully paid up 10,000,000 10,000,000

Sub-Total 26,392,000 31,995,900 14,392,000 14,392,000

Grand Total 633,282,151 625,362,439 563,560,679 553,478,827


28. Capital Adequacy

The capital adequacy status as of 16 July 2019 is given below:

Amount in thousands1.1 Risk Weighted Exposures 2076 Ashad End 2075 Ashad End

a Risk Weighted Exposure for Credit Risk 112,632,092 95,709,597 b Risk Weighted Exposure for Operational Risk 5,117,630 4,159,720 c Risk Weighted Exposure for Market Risk 2,144,860 1,994,290

Total Risk Weighted Exposures (a+b+c) 119,894,582 101,863,607 Adjustments under Pillar II

Add : RWE equvalent to reciprocal of capital charge of 3 % of gross income. 1,238,947 1,026,683 Add : 2% of the the total RWE due to Supervisory add up 2,397,892 2,037,272 Add: 2% of total RWE, Desired level of disclosure requirement has not been achieved. - 2,037,272

Total Risk Weighted Exposures (A� er Bank’s adjustments of Pillar II) 123,531,421 106,964,834 1.2 CapitalTier 1 Capital (Core Capital) (CET1 +AT1) 16,166,512 15,810,510

a Paid up Equity Share Capital 9,618,163 7,603,291 b Irredeemable Non-cumulative preference shares - - c Share Premium 2,512,799 2,920,873 d Proposed Bonus Equity Shares - 1,140,494 e Statutory General Reserves 2,123,307 1,671,851 f Retained Earnings 1,780,327 2,339,182 g Un-audited current year cumulative profi t/(Loss) - - h Capital Redemption Reserve - - i Capital Adjustment Reserve 57,326 57,326 j Dividend Equalization Reserves - - k Less: Deferred Tax Assets l Other Free Reserve - -

m Debenture Redemption Reserve 400,000 309,547 n Less: Goodwill - - o Less: Intangible Assets (115,409) (22,054) p Less: Fictitious Assets - - q Less: Investment in equity in licensed Financial Institutions - - r Less: Investment in equity of institutions with fi nancial interests (210,000) (210,000) s Less: Investment in equity of institutions in excess of limits - - t Less: Investments arising out of underwriting commitments - - u Less: Reciprocal crossholdings - - v Less: Purchase of land & building in excess of limit and unutilized - - w Less: Other Deductions - -

Adjustments under Pillar II - - Less : Shortfall in Provision (6.4 a 1) - - Less : Loans and Facilities extended to Related Parties and Restricted lending (6.4 a 2) - -

- - Supplementary Capital (Tier II) 2,894,863 1,040,744

a Cumulative and/or Redeemable Preference Share - - b Subordinated Term Debt 1,784,505 200,000 c Hybrid Capital Instruments - - d General loan loss provision 1,011,982 774,370 e Exchange Equalization Reserve 78,377 56,374 f Investment Adjustment Reserve 10,000 10,000 g Assets Revaluation Reserve - - h Other Reserves 10,000 -

Total Capital Fund (Tier I and Tier II) 19,061,375 16,851,254 1.3 Capital Adequacy Ratios Common Equity Tier 1 Capital to Total Risk Weighted Exposures (Ast er Bank’s adjustments of Pillar II) 13.09 14.78

Tier 1 Capital to Total Risk Weighted Exposures 13.09 14.78 Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures 15.43 15.75


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83,

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Cla

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al e

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80,1

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Lend

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294

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294

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Inve

stm

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in e

quity

and

oth

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apita

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trum

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659

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651

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Inve

stm

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in e

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and

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apita

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trum

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liste

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the

stoc

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4

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6

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Sta

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side

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pert

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42,2

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Inte

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Cas

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Oth

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3,3

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6,2

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Bill

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For

war

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LC

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mitm

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With

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estic

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unte

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3,8

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402

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% 6

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61,7

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792

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For

eign

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nter

part

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CA R

atin

g 0-

1)

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-

-

-

20%

-

-

-

For

eign

cou

nter

part

y (E

CA R

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g 2)

-

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-

50

% -

-

-

For

eign

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nter

part

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CA R

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g 3-

6)

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-

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-

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part

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15

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-

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LC

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mes

tic

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terp

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1

5,26

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1,46

9,99

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For

eign

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nter

part

y (E

CA R

atin

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1)

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20%

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-

-

For

eign

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part

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CA R

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g 2)

-

-

-

-

50

% -

-

-

For

eign

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part

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CA R

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-

100%

-

-

-

For

eign

cou

nter

part

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CA R

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g 7)

-

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-

15

0% -

-

-

Bid

Bon

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Coun

ter g

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dom

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5,0

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43

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295

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% 2

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4

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2

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For

eign

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part

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CA R

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1)

1,5

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51

-

1,2

47,4

00

311

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20

% 6

2,37

0 3

62,7

92

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558

For

eign

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nter

part

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CA R

atin

g 2)

8

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-

4

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4

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50

% 2

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1

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For

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cou

nter

part

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CA R

atin

g 3-

6)

-

-

-

-

100%

-

-

-

For

eign

cou

nter

part

y (E

CA R

atin

g 7)

-

-

-

-

15

0% -

-

-

Und

erw

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mm

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ts

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-

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-

Len

ding

of B

ank’

s Se

curit

ies

or P

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Rep

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Adv

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242

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Fin

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Acc

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and

End

orse

men

ts

1,1

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1

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Unp

aid

port

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Irre

voca

ble

Cred

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mm

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ts (s

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-

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0,73

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Irre

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Cred

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282

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1

75,0

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Unp

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TOTA

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1

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8,38

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9,95

8

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Tota

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Add

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Add

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Tota

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ount

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Cred

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Bal

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She

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-

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2B

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ith N

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Ras

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-

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3G

old

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4In

vest

men

t in

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over

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-

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-

5A

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aim

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Gov

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-

-

-

-

-

-

-

-

6In

vest

men

t in

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a B

ank

secu

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s -

-

-

-

-

-

-

-

-

-

7A

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aim

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al R

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-

-

-

-

-

-

-

-

-

8Cl

aim

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For

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al B

ank

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-1)

-

-

-

-

-

-

-

-

-

-

9Cl

aim

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For

eign

gov

ernm

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entr

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-

-

-

-

-

-

-

-

-

-

10Cl

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s on

For

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gov

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-

-

-

-

-

-

-

-

-

-

11Cl

aim

s on

For

eign

gov

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ank

(ECA

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) -

-

-

-

-

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-

-

-

-

12Cl

aim

s on

For

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gov

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-7)

-

-

-

-

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-

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-

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-

13Cl

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BIS

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F, E

CB, E

C A

nd M

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Ban

ks -

-

-

-

-

-

-

-

-

-

14Cl

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ultil

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al D

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-

-

-

-

-

-

-

-

-

-

15Cl

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Pub

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CA 0

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-

-

-

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-

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16Cl

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Pub

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CA 2

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-

-

-

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-

-

-

-

17Cl

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Pub

lic S

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r Ent

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CA 3

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-

-

-

-

-

-

-

-

-

-

18Cl

aim

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Pub

lic S

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ity (E

CA 7

) -

-

-

-

-

-

-

-

-

-

19Cl

aim

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dom

estic

ban

ks th

at m

eet c

apita

l ade

quac

y re

quire

men

ts -

-

-

-

-

-

-

-

-

-

20Cl

aim

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dom

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at d

o no

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t cap

ital

adeq

uacy

requ

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ents

-

-

-

-

-

-

-

-

-

-

21Cl

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ign

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Rat

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0-1)

-

-

-

-

-

-

-

-

-

-


22Cl

aim

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Rat

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2) -

-

-

-

-

-

-

-

-

-

23Cl

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3-6)

-

-

-

-

-

-

-

-

-

-

24Cl

aim

s on

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ign

bank

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Rat

ing

7) -

-

-

-

-

-

-

-

-

-

25Cl

aim

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bank

inco

rpor

ated

in S

AA

RC

regi

on

oper

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buff

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abo

ve th

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espe

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rem

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-

-

-

-

-

-

-

-

-

-

26Cl

aim

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estic

Cor

pora

tes

-

-

-

-

-

-

-

-

-

-

27Cl

aim

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For

eign

Cor

pora

tes

(ECA

0-1

) -

-

-

-

-

-

-

-

-

-

28Cl

aim

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eign

Cor

pora

tes

(ECA

2)

-

-

-

-

-

-

-

-

-

-

29Cl

aim

s on

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eign

Cor

pora

tes

(ECA

3-6

) -

-

-

-

-

-

-

-

-

-

30Cl

aim

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eign

Cor

pora

tes

(ECA

7)

-

-

-

-

-

-

-

-

-

-

31R

egul

ator

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etai

l Por

tfolio

(Not

Ove

rdue

) -

-

-

-

-

-

-

-

-

-

32Cl

aim

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ng a

ll cr

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n of

regu

lato

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tail

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gran

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ity

-

-

-

-

-

-

-

-

-

-

33Cl

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dent

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-

-

-

-

-

-

-

-

-

-

34Cl

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ntia

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pert

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-

-

-

-

-

-

-

-

-

-

35Cl

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s se

cure

d by

resi

dent

ial p

rope

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verd

ue)

-

-

-

-

-

-

-

-

-

-

36Cl

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Com

mer

cial

real

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-

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-

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-

-

-

-

37Pa

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xcep

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cla

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side

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-

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38H

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Ris

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466

-

-

4,48

9 -

-

-

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-

38

6,95

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39In

vest

men

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ity a

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cap

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stitu

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list

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stoc

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-

-

-

-

-

-

-

-

-

-

40In

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men

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ther

cap

ital i

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stitu

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the

stoc

k ex

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-

-

-

-

-

-

-

-

-

-

41Ot

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sset

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s pe

r atta

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-

-

-

-

-

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-

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Tota

l38

2,46

6 -

-

4,

489

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-

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386,

955

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Forw

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Exch

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Con

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-

-

-

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LC C

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atur

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pto

6 m

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mes

tic c

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rty

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3,53

8

21

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1

402,

659

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Fore

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Fore

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LC C

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ver 6

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-

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-

-

-

-

-

-

Fore

ign

coun

terp

arty

(ECA

Rat

ing

3-6)

-

-

-

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Fore

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terp

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(ECA

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1,24

7,40

0 1,

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Fore

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(ECA

Rat

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2)

-

-

4,22

6,68

4 4,

226,

684

Fore

ign

coun

terp

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(ECA

Rat

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3-6)

-

-

-

-

-

-

-

-

-

-

Fore

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coun

terp

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(ECA

Rat

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-

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-

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-

Und

erw

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g co

mm

itmen

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Lend

ing

of B

ank'

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curit

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or P

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Rep

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Agr

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with

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Adv

ance

Pay

men

t Gua

rant

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242

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-

242

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Irrev

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Irrev

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41


Market Risk Exposures2076 Ashad

Amount in thousands

S.No. Currency

2076 Ashad End 2075 Ashad End Relevant Open

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

1 INR (2,647,689) (4,238,289) 4,238,289 3,913,111

2 USD 85.2 9,363 9,363 23,693

3 GBP (12.5) (1,708) 1,708 1,744

4 CHF (4.2) (470) 470 47

5 EUR (49.3) (6,082) 6,082 1,422

6 JPY (426.7) (434) 434 13,827

7 SEK (1.0) (12) 12 0

8 DKK (10.0) (165) 165 155

9 HKD (11.2) (157) 157 112

10 AUD (62.6) (4,859) 4,859 1,166

11 SGD (72.9) (5,902) 5,902 1,379

12 KRW (322.9) (30) 30 17,630

13 AED (56.0) (1,675) 1,675 291

14 MYR (118.4) (3,168) 3,168 2,947

15 THB (27.0) (96) 96 191

16 QAR (107.4) (3,257) 3,257 2,126

17 CNY (161.0) (2,571) 2,571 3,235

18 CAD (69.3) (5,833) 5,833 368

19 SAR (186.6) (5,466) 5,466 5,056

20 KWD (0.4) (160) 160 81

21 BHD (0.0) (14) 14 2

Total Open Position (a) 4,289,712 3,988,583

Fixed Percentage (b) 5% 5%

Capital Charge for Market Risk [c=(a×b)] 214,486 199,429

Risk Weight (reciprocal of capital requirement of 10%) in times (d) 10 10

Equivalent Risk Weight Exposure [e=(c×d)] 2,144,860 1,994,290


Operation Risk Exposures2076 Ashad

Amount in thousands

ParticularsYears before 2076 Ashar End

2072/73 2073/74 2074/75

Net Interest Income 2,013,282 2,603,980 2,904,014

Commission and Discount Income 197,616 635,069 794,250

Other Operating Income 218,106 121,978 164,962

Exchange Fluctuation Income 160,269 154,790 299,606

Addition/Deduction in Interest Suspense during the period 3,412 (3,072) (33,010)

Gross income (a) 2,592,684 3,512,744 4,129,822

Alfa (b) 15% 15% 15%

Fixed Percentage of Gross Income [c=(a×b)] 388,903 526,912 619,473

Capital Requirement for operational risk (d) (average of c) 511,763

Risk Weight (reciprocal of capital requirement of 10%) in times (e) 10

Equivalent Risk Weight Exposure [f=(d×e)] 5,117,630

Adjustments under Pillar II

If Gross Income for all the last three years is negative (6.4 a 8)

Total Credit and Investments (net of specifi c Provision)

Capital Requirement for Operational Risk (5%)

Risk Weight (reciprocal of capital requirement of 10% ) in times 10

Equivalent Risk Weight Exposure (g)

Equivalent Risk Weight Exposure (h= f + g)


29. Operating Segments

a) General Information:The bank has identifi ed its segments on the basis of geographical location as per provinces of the country. The bank supervises, manages and controls its branch networks through regional demarcations. All the transactions have been done at the arm’s length prices between the segments with intra segment revenue and cost being eliminated at the Head Offi ce. Interest earnings and foreign exchange gains/losses generated while conducting businesses under diff erent segments are reported under the respective segment. Equity and Tax Expense are not allocated to the individual segments. For segmentation purpose, all business transactions of offi ces and business units located in a particular province are grouped together.

b) Description of the types of products and services from which each reportable segment derives its revenues

The products and services off ered by the Bank can be broadly divided into the following categories:

1. Retail Banking: Retail banking, also known as consumer banking, is the provision of services by a bank to the general public, rather than to companies, corporations or other banks. Banking services which are regarded as retail include provision of savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.

2. Corporate, SME and Institutional (except Retail): The corporate and institutional banking segment of banks typically serves a diverse range of clients, ranging from small- to mid-sized local businesses with a few millions in revenues to large conglomerates with billions in sales and offi ces across the country.

3. Treasury Unit – The unit has two divisions – Front and back treasury operations. It operates within the consideration of the foreign exchange rules and regulations under the guidance of Nepal Rastra Bank (NRB) – central bank of Nepal. The major functions are exchange rate updation, check foreign currency position, fund management, deal T-bills/ bond, interbank placements, forward contract and other treasury research.

4. Trade Finance - The Bank’s trade fi nance operations like LC, Guarantee etc are handled by trade fi nance.

5. Others


c) In

form

atio

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and

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7,57

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8,91

6,74

5 1,

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15,9

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3


d) Measurement of operating segment profi t or loss, assets and liabilities

a. Basis of accounting for any transactions between reportable segments:

The Bank is organised for management and reporting purposes into segments such as: Retail, SME and MSME, Corporate, Deprived, Treasury and Others. The Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Income tax is managed on a group basis and are not allocated to operating segments. All transactions between segments are conducted on an arm’s length basis, with inter-segment revenue and costs being eliminated in “Others”. Support costs are also allocated to Retail, Corporate, SME and MSME, Deprived, Treasury and others based on Management’s estimates of the benefi ts accruing to these segments for the costs incurred.

ii. Nature of any diff erences between the measurements of the reportable segment’s profi ts or losses and the entity’s profi t or loss before income tax

Noneii. Nature of any diff erences between the measurements of the reportable segment’s assets and the entity’s assets. Noneiii. Nature of any changes from prior periods in the measurement methods used to determine reported segment

profi t or loss and the eff ect, if any, The bank has segmental division based upon the business segment and geographical segment also.IV. Nature and eff ect of any asymmetrical allocations to reportable segments None

e) Reconciliations of reportable segment revenues, profi t or loss, assets and liabilities

a Revenue Particulars Amount Total Revenues for reportable segments 15,057,493,205 Other Revenues - Elimination of intersegment revenues 2,503,930,399 Entity’s Revenues 12,553,562,807

b Profi t or Loss Particulars Amount Total profi t or loss for reportable segments 3,248,003,834 Other profi t or loss - Elimination of intersegment profi ts - Unallocated amounts - Profi t before income tax 3,248,003,834


c Assets Particulars Amount Total assets for reportable segments 135,470,409,573 Other assets - Unallocated amounts - Entity’s assets 135,470,409,573

d Liabilities Particulars Amount Total liabilities for reportable segments 135,470,409,573 Other liabilities - Unallocated amounts - Entity’s liabilities 135,470,409,573

f) Information about products and services

Particulars Amount (Fees Income)

Retail Banking 295,956,736

Corporate, SME & Institutional 659,232,784

Treasury 475,630,007

Trade Finance 17,653,766

Others 16,482,342

Total 1,464,955,635

g) Information about geographical areas

Particulars Revenue (Amount )

a Domestic 12,553,562,807

- Province 1 1,619,728,598

- Province 2 804,921,236

- Province 3 8,213,080,874

- Gandaki Province 252,978,830

- Province 5 1,317,855,766

- Karnali Province 69,152,848

- Far Western Province 275,844,655

b Foreign -

Total (a+b) 12,553,562,807


h) Information about major customers

Information about the extent of its reliance on its major customers, if revenue from a single external customer amounts to 10 percent or more of the entity’s revenue.

Not Applicable

30. Share options and share based payment

The Group does not have any share options or share-based payment transactions in the reporting period or in earlier period.

31. Merger and Acquisition

The Group has not entered into any merger and acquisition activities in the reporting period and in the comparative previous period. However, the Bank had signed Memorandum of Understanding dated 16 May 2019 with Om Development Bank Limited (ODBL) to merge ODBL with NMB Bank. Ast er obtaining necessary regulatory approvals, both the Banks commenced joint operations from 28 September 2019 (11 Ashwin 2076) as NMB Bank Limited.

Erstwhile ODBL was a Pokhara based National Level Development Bank Limited with Paid -up Capital of NPR 2.51 Bio and Reserve and Surplus of NPR 1.4 Bio. as on Mid July 2019. ODBL had a Branch network of 53 and 19 ATMs with total Deposit mobilization of 25 Billion and Loan and Advances totalling 22 Billion. The merger was driven by NMB Bank’s strategic intent to have a strong presence in Province 4 where a majority of erstwhile ODBL’s branches are located. The shareholders of ODBL were provided with a swap ratio of 1:0.76.

32. Additional disclosures of non-consolidated entities

The Group does not have any non-consolidated entities to report for the reporting period and in the comparative previous period.

33. Events ast er the Balance Sheet Date

No circumstances have arisen since the Balance Sheet date which would require adjustments to or disclosure in the Financial Statements other than those disclosed in the notes.


34. Related Party Disclosures

(a) Board Member Allowances and FacilitiesThe Board of Directors has been paid meeting fees of NPR 1,659,000 during the fi scal year. There were 27 Board Meeting conducted during the interim period.

The Chairperson and other members of the Board are paid NPR 13,000 and NPR 12,000 per meeting respectively for Board and Board Level Committees.

The Meeting fees paid to diff erent Board Level Committees are as follows:

Board Level Committees No of Meetings Meeting Allowance (NPR)

Audit Committee 17 396,000

Risk Management Committee 19 444,000

Human Resource Service Committee 6 132,000

Building Construction Sub-Committee 7 180,000

Assets Laundering Prevention Committee 4 72,000

Merger Committee 9 324,000

As approved by the 18th Annual General Meeting held on 4 Poush 2070, the Board Members have been provided with a monthly allowance of NPR 8,000 for telephone, newspaper and mobile expenses till Falgun End 2075. From Chaitra 2075 monthly allowance of NPR 12,000 is paid as per 23rd Annual General Meeting held on Poush 26 2075. The total amount paid as monthly allowances to the board members during the reporting period amounted to NPR 624,000.

Existing members of the Board are:

i) Mr. Pawan Kumar Golyan Chairman (Represents Group – Promoter Shareholder)

ii) Mr. Nico Klass Geradus Pijl Member (Representative from FMO)

iii) Ms. Rajendra Kafl e Member (Representative from Employees Provident Fund)

iv) Mr. Harishchandra Subedi Member (Represents Group – Public Shareholder)

v) Mr. Pradeep Raj Pandey Independent Director

vi) Mr. Nand Kishor Rathi Alternate Director to Mr. Nico Pijl

(b) Loans and Advances extended to Promoters

There are no such loans extended to promoters.


(c) Compensation Details for Key Management Personnel

Key Management Personnel includes members of Executive Committee of the Bank.

S.No Particulars Amount

A Short Term Employee Benefi ts 63,851,298

B Post-Employment Benefi ts Nil

C Other Long Term Benefi ts Nil

D Termination Benefi ts (Gratuity and Sick Leave Encashment) Nil

E Share Based Payment Nil

Total of Key Management Personnel Compensation 63,851,298

The Salary and benefi ts paid to CEO is as follow:

Particulars Basic Salary Provident Fund Allowance Bonus &

WelfareOther

Perquisites Total Income

C.E.O 5,904,000 590,400 5,248,000 4,737,609 208,860 16,688,869

Total 5,904,000 590,400 5,248,000 4,737,609 208,860 16,688,869

Key management personnel are also provided with the following benefi ts:i) Benefi ts as per the Employee Terms of Service By-laws,ii) Bonus to staff as per the Bonus Act,iii) Vehicle Fuel Expenses as per the Bank’s Staff Vehicle Scheme.

Existing members of Executive Committee include:

Mr. Sunil KC Chief Executive Offi cer

Mr. Pradeep Pradhan Chief Operating Offi cer

Ms. Shabnam Limbu Joshi Chief Human Resource Offi cer

Mr. Sharad Tegi Tuladhar Chief Risk Offi cer

Mr. Sudesh Upadhyaya Chief Business and Strategy Offi cer

Mr. Govind Ghimire Chief Business Offi cer

Mr. Navin Manandhar Chief Finance Offi cer

Mr. Pramod Dahal Chief Internal Audit and AML/CFT Offi cer

Mr. Roshan Regmi Head Product Digital Channel and Retail Sales


(d) Transaction with SubsidiariesAmount in Thousand

S No Particulars NMB Capital NMB Micro Finance

1 Investment by NMB Bank Ltd. 200,000 48,552

2 Deposits in NMB Bank Ltd. 140,104 4,255

3 Borrowing from NMB Bank Ltd. - 600,000

4 Interest Payment by NMB Bank Ltd. 2,138 -

5 Interest Payment to NMB Bank Ltd. - 65,077

6 Rent Payment to NMB Bank Ltd. 2,173 -

7 Management Fee Payment to NMB Bank 2,400 -

8 Share Registrar Fee payment by NMB Bank 762

9 Investment by NMB Bank Ltd. in NMB Sulav Investment Fund-1 as Seed Capital

105,000 -

10 Investment by NMB Bank Ltd in NMB Hybrid Fund-1 as Seed Capital

140,000 -

11 Dividend Distribution of NMB Sulav Investment Fund-1 to NMB Bank Ltd.

22,105 -

12 Dividend Distribution of NMB Capital Ltd. to NMB Bank Ltd. for FY 2074.75

38,000 -

The intra-group related fi gures have been excluded for presentation of the fi nancial statement of the Group.


Disclosure under New Capital Adequacy Framework for the Year Ended Ashad 2076

Amounts in NPR Thousands

1. Capital Managementa. The bank assesses the impact of the new rules, if any on their capital adequacy through a comprehensive capital planning and optimisation/mitigation process. The capital planning is an integral part of the Bank’s medium term strategic planning and annual budget formulation process. Total risk weighted exposures for the projected level of business operations is calculated, the required capital level is projected, and a plan is formulated to maintain the required capital.

The bank has not raised any capital through hybrid capital instruments till 16 July 2019.

2. Capital Structure and Capital Adequacy:

2.1. Tier 1 Capital and a breakdown of its Components:

S.No. Details Amount

1. Paid up Equity Share Capital 9,618,163

2. Share Premium 2,512,799

3. Proposed Bonus Equity Shares -

4. Statutory General Reserves 2,123,307

5. Retained Earnings 1,780,327

6. Capital Adjustment Reserve 57,326

7. Deferred Tax Reserves -

8. Deferred Tax Assets -

9. Debenture Redemption Reserve 400,000

10. Less: Investment in equity of institutions with fi nancial interest (210,000)

11. Less: Intangible Assets (115,409)

Total Core Capital 16,166,512

2.2.Tier 2 Capital and a breakdown of its Components:

S.No Details Amount

1. Subordinated Term Debt 1,784,505

2. General Loan Loss Provision 1,011,982

3. Exchange Equalization Reserve 78,377

4. Investment Adjustment Reserve 10,000

5. Other Reserve 10,000

Total Supplementary Capital 2,894,863


2.3. Detailed information about the Subordinated Term Debts with information on the outstanding amount, maturity, and amount rose during the year and amount eligible to be reckoned as capital funds.

The Bank had issued “7% NMB Debenture 2077” on 6 Falgun 2071 amounting to NPR 500 Million having a maturity of 5 years 6 months. The Debenture was fully subscribed. As at the year end, the outstanding amount of Debenture is 500 Million whereas NPR 100 Million is only eligible to be recognized as capital funds (Tier 2). To refl ect the diminishing value of these instruments as a continuing source of strength, a cumulative discount (amortization) factor of 20% per annum has been applied for capital adequacy computations, during the last 5 years to maturity.

During the fi scal year, the bank has also issued 3 million units of NMB Debenture 2085 with the face value of NPR. 1000 per unit amounting NPR 3 Billion at the rate of 10% for the period of 10 years. The General public had subscribed 99,505 units amounting NPR. 99,505,000 and 1,585,000 units amounting NPR. 1,585,000,000 was subscribed through Private Placements. The fi nal allotment of NPR. 1,684,505,000 to the subscribed unit holders was made on 29 Chaitra 2075. To refl ect the diminishing value of these instruments as a continuing source of strength, a cumulative discount (amortization) factor of 20% per annum will be applied for capital adequacy computations, during the last 5 years to maturity.

The amortized cost of debenture as on fi scal year end is NPR. 2,239,236,412.

2.4. Deductions from Capital:

Investment in equity shares of fully owned subsidiary company NMB Capital Ltd amounting to NPR 200,000,000 and CEDB Hydro Fund amounting to NPR 10,000,000 has been deducted from Tier 1 Capital.

Similarly, the amount of deferred tax reserve has been separately credited to Regulatory reserve, which is not considered for the purpose of capital ratios.

Intangible asset has also been deducted as per NRB Directive by NPR 115,408,800.

2.5. Total Qualifying Capital:

S.No Details Amount

1. Core Capital (Tier 1) 16,166,512

2. Supplementary Capital (Tier 2) 2,894,863

Total Capital Fund 19,061,375

2.6. Capital Adequacy Ratio:

S.No Details Percentage

1. Tier 1 Capital to Total Risk Weighted Exposure 13.09%

2. Tier 1 and Tier 2 Capital to Total Risk Weighted Exposure 15.43%


2.7. Summary of the terms, conditions and main features of all capital instruments, especially in case of subordinated term debts including hybrid capital instruments.

The capital instruments of the Bank include fully paid up Equity Shares and Debenture. Both are non-convertible. The main features of Debenture have been mentioned under S.No 2.3 above.

3. Risk Exposures:

3.1. Risk Weighted Exposures for Credit Risk, Market Risk and Operational Risk:

S.No Risk Weighted Exposure Amount

a. Risk Weighted Exposure for Credit Risk 112,632,092

b. Risk Weighted Exposure for Operational Risk 5,117,630

c. Risk Weighted Exposure for Market Risk 2,144,860

Total Risk Weighted Exposures (a+b+c) 119,894,582

Add: RWE equivalent to reciprocal of capital charge of 3 % of gross income. 1,238,947

Add : 2% of the total RWE due to Supervisory add up 2,397,892

Add: 2% of total RWE, Desired level of disclosure requirement has not been achieved. -

Total Risk Weighted Exposures (A� er Bank’s adjustments of Pillar II) 123,531,421

3.2. Risk Weighted Exposures under each of categories of Credit Risk:


1. Claims on government and Central Bank NIL

2. Claims on other Offi cial Entities NIL

3. Claims on Bank 3,187,301

4. Claims on Domestic Corporate and Securities Firms 65,675,730

5. Claims on Foreign Corporate Nil

6. Claims on Regulatory Retail Portfolio 7,059,846

7. Claims fulfi lling all criterion of regulatory retail except granularity Nil

8. Claims secured by Residential Properties 6,233,714

9. Claims not fully secured by residential properties Nil

10. Claims secured by Residential Properties (Overdue) 83,096

11. Claims secured by Commercial Real Estate 376,363

12. Past Due Claims 784,212

13. High Risk Claims 6,402,895

14. Lending against securities (bonds & shares) 294,605

15. Investments 923,545

16. Other Assets 3,335,525

17. Off Balance sheet items 18,275,261

Total 112,632,092


3.3. Total Risk Weighted Exposure calculation table:


a. Risk Weighted Exposure for Credit Risk 112,632,092

b. Risk Weighted Exposure for Operational Risk 5,117,630

c. Risk Weighted Exposure for Market Risk 2,144,860

1. Total Risk Weighted Exposure 119,894,582

Add: RWE equivalent to reciprocal of capital charge of 3 % of gross income. 1,238,947

Add : 2% of the total RWE due to Supervisory add up 2,397,892

Add: 2% of total RWE, Desired level of disclosure requirement has not been achieved. -

Total Risk Weighted Exposures (A� er Bank’s adjustments of Pillar II) 123,531,421

2. Total Core Capital Fund (Tier 1) 16,166,512

3. Total Capital Fund ( Tier 1 & Tier 2) 19,061,375

4. Total Core Capital to Total Risk Weighted Exposures (%) 13.09%

5. Total Capital to Total Risk Weighted Exposures (%) 15.43%

3.4. Amount of Non-Performing Assets (NPAs)

S.No Category Gross Provision Net

1. Restructured/Rescheduled 96,884 22,043 74,841

2. Substandard 219,452 54,863 164,589

3. Doubtful 260,090 130,045 130,045

4. Loss 179,992 179,992 -

Total 756,418 386,943 369,475

3.5. NPA Ratio Gross NPA to Gross Advances: 0.82% Net NPA to Net Advances: 0.41%

3.6 Movement of Non-Performing Assets

S.No Particulars Ashad End 2075 Ashad End 2076 Movement

1. Restructure/Reschedule Loan 1,361 96,884 95,523

2. Substandard 172,303 219,452 47,149

3. Doubtful 255,984 260,090 4,106

4. Loss 239,663 179,992 (59,671)

Total Non-Performing Loan 669,311 756,418 87,107


3.7. Movement of Loan Loss Provision and Interest Suspense on loans & advances

S.No Category Ashad End 2075 Ashad End 2076 Movement

1. Pass 778,735 888,849 110,902

2. Watch List 42,998 123,132 79,346

3. Restructured 189 22,043 21,854

4. Substandard 43,076 54,863 11,787

5. Doubtful 127,992 130,045 2,053

6. Loss 239,663 179,992 (59,671)

Total Loan Provision 1,232,653 1,398,925 166,272

Accrued Interest Receivable (including staff ) 222,679 697,364 474,684

Ast er change of Core Banking System, the interest on majority of risk assets portfolio are due as per English Calender due to which approximately a fortnight’s interest income are not realized as of fi scal year end 2076.

As per NRB Interest Income Recognition Guideline, the interest amount of NPR. 32,210,184.75 has been reversed and credited to Interest Suspense during the reporting period.

3.8. Details of Additional Loan Loss Provision

S.No Category Ashad End 2076

1. Pass -

2. Watch List 10,851

3. Restructured -

4. Substandard -

5. Doubtful -

6. Loss -

Total Additional Loan Loss Provision 10,851

3.9. Eligible Credit Risk Mitigants (CRM) availed

As per the provisions of the New Capital Adequacy Framework, the bank has claimed all the eligible credit risk Mitigants of NPR 10,805,341 thousands for Balance Sheet and Off Balance Sheet exposures and availed benefi t thereof.


4. Compliance with external requirement

The bank is subject to compliance requirement under NRB Directive No.1/075 which has stipulated a minimum Total Capital Adequacy Ratio (CAR) of 11.00%. The Bank complied with this requirement at all times during the reporting period. The compliance position at the reporting date is given below:

Capital Parameter Requirement NMB Bank

Minimum Common Equity Capital Ratio 4.50% 7.79%

Capital Conversation Buff er 2.50% 2.50%

Minimum common equity plus capital conservation buff er 7.00% 10.29%

Minimum Tier 1 Capital (Excluding conservation buff er) 6.00% 10.59%

Minimum Total Capital (Excluding conservation buff er) 9.00% 12.93%

Minimum Total Capital (including conservation buff er) 11.00% 15.43%

Leverage Ratio 4.00% 8.48%

5. Summary of the Bank’s internal approach to assess the adequacy of its capital to support current and future activities:

The bank follows Internal Capital Adequacy Assessment Process (ICAAP) and Risk Management Guideline while taking decision on any business. It has always taken note of ICAAP and has taken steps accordingly in ensuring soundness of capital position and sustainability of the business.

Risk management is essential for well-being of the overall banking business. Credit, Market and Operational Risk are managed independently at NMB Bank. Credit Risk Department reviews risk related to credit prior to disbursement of all loans, it is independent of a loan approver. Credit Risk Management Committee meets once a month to review credit portfolio risk. Market risk is closely monitored all time and managed through ALCO. Operational Risk Committee which meets once each month is a platform to assess/monitor operational risk identifi ed vides various units, branches. Eff ective implementation of process/controls is periodically reviewed by an Operational Risk Unit. Operational Risk Unit also carries out assurance reviews of the units to evaluate control weakness, recommends robust controls around the risk areas and monitors execution of control in an ongoing basis.

Audit Committee is formed as per the ‘Terms of Reference’ prescribed by NRB with 3 members. Coordinator of the committee is one of the Non-Executive Directors with Head Internal Audit as its secretary. The committee reviews internal/external/NRB audit reports, recommends stringent control process and escalates the audit observations to the Board. The Committee also reviews quarterly unaudited fi nancial reports of the Bank with recommendation to the Board. The committee selects and recommends External Auditor to the Board based on fi nancial and technical evaluations. Audit Committee is committed towards maintaining robust control system hence monitors closure of risk issues raised by Internal/External/NRB auditors.

Risk Management Committee with view of ensuring better risk management in the bank and in line of NRB’s requirement is formed with 5 members chaired by Non-Executive Director, Coordinator of Audit Committee, Head Operation, Head Credit Risk and Head Compliance, and Operational Risk are the members of the committee. The committee reviews high risk issues escalated by operational and credit risk committees (management level), deliberates on the risks and recommends to the Board if required. Stress testing/Capital adequacy is also reviewed at the committee with recommendation to the Board. Revised/new NRB directives, Monetary Policy with material impact on the Bank are also reviewed for its implications.



OM Development Bank Ltd.

Now has become


Statement of Financial PositionAs on 31st Ashad 2076

(Amount in NPR)

Particulars Notes 31 Ashad 2076 Restated32 Ashad 2075

Restated1st Shrwan 2074

Assets

Cash and cash equivalent 4.1 4,573,597,783 4,606,754,593 3,363,268,270

Due from Nepal Rastra Bank 4.2 1,148,397,928 1,122,470,190 800,622,192

Placement with Bank and Financial Institutions 4.3 - - -

Derivative fi nancial instruments 4.4 - - -

Other trading assets 4.5 - - -

Loan and Advances to B/FIs 4.6 568,088,484 122,826,450 33,726,450

Loans and advances to customers 4.7 22,360,606,116 18,180,600,184 13,948,256,529

Investment in securities 4.8 919,797,104 854,763,271 794,100,017

Current Tax Assets 4.9 26,903,428 - -

Investment in subsidiaries 4.10 - - -

Investment in Associates 4.11 - - -

Investment property 4.12 - - -

Property and equipment 4.13 184,187,635 211,158,529 156,186,157

Goodwill and Intangible Assets 4.14 4,384,560 6,213,148 5,083,341

Deferred tax assets 4.15 18,073,481 - -

Other assets 4.16 56,547,931 47,551,242 42,607,951

Total Assets 29,860,584,450 25,152,337,606 19,143,850,907


Statement of Financial PositionAs on 31st Ashad 2076

(Amount in NPR)

Particulars Notes 31 Ashad 2076 Restated32 Ashad 2075

Restated1st Shrwan 2074

Liabilities

Due to Bank and Financial Institutions 4.17 1,496,132,384 599,112,852 614,140,643

Due to Nepal Rastra Bank 4.18 - - -

Derivative Financial instruments 4.19 - - -

Deposit from customers 4.20 24,153,016,531 20,856,078,516 15,447,288,578

Borrowings 4.21 - - -

Current Tax Liabilities 4.9 - 13,522,470 8,355,564

Provisions 4.22 - - -

Deferred tax liabilities 4.15 - 5,375,460 39,780,834

Other liabilities 4.23 356,519,924 353,110,962 301,292,494

Debt securities issued 4.24 - - -

Subordinated Liabilities 4.25 - - -

Total liabilities 26,005,668,839 21,827,200,259 16,410,858,113

Equity

Share Capital 4.26 2,515,235,600 2,515,235,600 1,878,696,987

Share Premium 28,614,713 28,614,713 15,372,574

Retained Earning 548,909,519 312,881,810 376,762,827

Reserves 4.27 762,155,780 468,405,224 462,160,406

Total equity attributable to equity holders 3,854,915,611 3,325,137,347 2,732,992,794

Non-controlling interests - - -

Total equity 3,854,915,611 3,325,137,347 2,732,992,794

Total liabilities and equity 29,860,584,450 25,152,337,606 19,143,850,907

Contingent liabilities and commitment 4.28 411,043,846 550,698,431 530,602,213

Net assets value per share 153.26 132.20 145.47

Sunil KCCEO


Nico PijlDirector

Rajesh Paudel, FCAPartnerP.L. Shrestha & Co.Chartered Accountants






Rabi Shankar SainjuDirector

Sunity Shrestha HadaDirector

Date: Tuesday, 26 November, 2019Place: NMB Bhawan, Babarmahal, Kathmandu



Sunil KCCEO


Nico PijlDirector










Statement of Profi t or LossFor the year ended 31 Ashad 2076

(Amount in NPR)

Particulars Notes 2075-76 Restated2074-75

Interest Income 4.29 3,313,657,484 2,436,258,999

Interest Expense 4.30 (2,087,924,029) (1,563,395,029)

Net interest income 1,225,733,455 872,863,970

Fees and Commission Income 4.31 202,407,434 173,888,506

Fees and Commission Expense 4.32 8,214,487 2,777,672

Net fee and Commission income 194,192,947 171,110,835

Net interest fee and commission income 1,419,926,403 1,043,974,805

Net Trading Income 4.33 3,735,696 127,734

Other Operating Income 4.34 1,033,110 9,185,022

Total operating income 1,424,695,208 1,053,287,560

Impairment charge/(reversal) for loans and other losses 4.35 182,205,533 46,899,435

Net Operating income 1,242,489,675 1,006,388,125

Operating expenses

Personal Expense 4.36 308,392,884 246,924,107

Other Operating Expenses 4.37 156,494,137 136,966,125

Depreciation and amortisation 4.38 57,436,698 45,289,324


Non operating income 4.39 19,993 12,400

Non operating expense 4.40 - -

Profi t before income tax 720,185,949 577,220,969

Income tax expense 4.41 184,738,192 182,893,041

Current tax 205,466,362 178,440,863

Deferred tax income (20,728,170) 4,452,178


Profi t attributable to:

Equity holders of the bank 535,447,757 394,327,928



Earnings per share:

Basic earnings per share 21.29 19.50

Diluted earnings per Share 21.29 19.50



Sunil KCCEO


Nico PijlDirector










Statement of Other Comprehensive IncomeFor the year ended 31 Ashad 2076

(Amount in NPR)

Particulars 2075-76 Restated2074-75


Other comprehensive income, net of income tax

a) Items that will not be reclassifi ed to profi t or loss

• Gains/(losses) from investment in equity instruments measured at fair value (9,069,236) (129,525,174)

• Gains/(losses) on revaluation

• Acturial gain/(losses) on defi ned benefi t plans - -

• Income tax relating to above items 2,720,771 38,857,552

Net other comprehensive income that will not be reclassifi ed to profi t or loss (6,348,465) (90,667,622)

b) Items that are or may be reclassifi ed to profi t or loss

• Gains/(losses) on cash fl ow hedge

• Exchange gains/(losses)(arising from translating fi nancial assets of foreign operation)

• Income tax relating to above items

• Reclassify to profi t or loss

Net other comprehensive income that are or may be reclassifi ed to profi t or loss - -

c) Share of other comprehensive income of associate accounted as per equity method

Other comprehensive income for the period, net of Income Tax (6,348,465) (90,667,622)

Total comprehensive income for the period 529,099,292 303,660,306

Total comprehensive income attributable to: - -

Equity holders of the Bank 529,099,292 303,660,306


Total Comprehensive income for the period 529,099,292 303,660,306



Statement of Cash FlowsFor the year ended 31 Ashad 2076

(Amount in NPR)


Cash fl ows from operating activities

Interest Received 3,202,768,703 2,411,003,805

Fee and other income received 206,163,123 174,028,640

Dividend Received 4,740,551 9,019,825

Receipts from other operating activities - -

Interest paid (2,097,260,989) (1,505,290,161)

Commission and fee paid (8,214,487) (2,777,672)

Cash payments to employee (358,990,274) (223,090,981)

Other expense paid (91,985,144) (170,938,548)

Operating cash fl ows before change in operating assets and liabilities 857,221,484 691,954,909

(Increase)/Decrease in operating assets (4,732,667,062) (4,670,939,196)

Due from Nepal Rastra Bank (25,927,738) (321,847,998)

Placement with bank and fi nancial institutions - -

Other Trading assets - -

Loan and advances to bank and fi nancial institutions (445,262,034) (89,100,000)

Loan and advances to customer (4,252,480,600) (4,255,047,908)

Other Assets (8,996,689) (4,943,290)

Increase/(Decrease) in operating liabilities 4,193,949,782 5,394,217,883

Due to bank and fi nancial institutions 897,019,532 (15,027,791)

Due to Nepal Rastra Bank - -

Deposits from customers 3,296,938,015 5,408,789,938

Borrowings - -

Other Liabilities (7,766) 455,736

Net Cash fl ow from operating activities before tax paid 318,504,204 1,415,233,596

Income taxes paid (246,183,247) (173,694,097)

Net Cash fl ow from operating activities 72,320,957 1,241,539,499


Sunil KCCEO


Nico PijlDirector










Statement of Cash FlowsFor the year ended 31 Ashad 2076

(Amount in NPR)


Cash fl ows from investing activities

Purchase of investment securities (74,103,070) (190,188,428)

Receipts from sale of investment securities 969,960 6,315,534

Purchase of plant and equipment (30,465,804) (100,261,696)

Receipt from sale of property and equipment 12,235 60,488

Purchase of intangible assets 1,828,589 (1,129,807)

Receipt from sale of intangible assets

Purchase of investment properties - -

Receipt from the sale of investment properties

Interest received

Dividend received

Net cash used in investing activities (101,758,090) (285,203,909)

Cash fl ows from fi nancing activities

Receipt from issue of debt securities - -

Repayment of debt securities

Receipt from issue of subordinated liabilities - -

Repayment of subordinated liabilities

Receipt from issue of shares - 287,046,026

Dividend paid - -

Interest paid - -

Other receipt/payment - -

Net cash from fi nancing activities - 287,046,026

Net increase/(decrease) in cash and cash equivalents (29,437,133) 1,243,381,615

Cash and Cash Equivalents at Shrawan 01, 2075 4,606,754,593 3,363,268,270

Eff ect of exchange rate fl uctuations on cash and cash equivalents held (3,719,677) 104,709

Closing Cash and Cash Equivalents 4,573,597,783 4,606,754,593 As per our attached report of even date


Stat

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Shar

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226,

486

3,3

25,1

37,3

47

3,3

25,1

37,3

47


Stat

emen

t of C

hang

es in

Equ

ityFo

r the

yea

r end

ed 3

1 A

shad

207

6(A

mou

nt in

NPR

)

Att

ribu

tabl

e to

Equ

ity-H

olde

rs o

f the

Ban

k

Part

icul

ars

Sha

re C

apita

l C

alls

in

Adv

ance

S

hare

Pr

emiu

m

Gen

eral

R

eser

ve

Exc

hang

e Eq

ualis

atio

n R

eser

ve

Reg

ulat

ory

Res

erve

F

air

Valu

e R

eser

ve

Rev

alua

tion

Res

erve

R

etai

ned

Earn

ing

Oth

er

Res

erve

T

otal

N

on-

Cont

rolli

ng

Inte

rest

T

otal

Equ

ity

Bal

ance

at S

hraw

an 0

1, 2

075

2,5

15,2

35,6

00

- 2

8,61

4,71

3 4

36,8

57,4

10

27,

461

-

(11,

706,

133)

-

312

,881

,810

4

3,22

6,48

6 3

,325

,137

,347

-

3,3

25,1

37,3

47

Adj

ustm

ent/

Res

tate

men

t-

--

--

--

--

-

- -

Adj

ustm

ent/

Res

tate

d B

alan

ce a

s at

Shr

awan

01,

207

5 2

,515

,235

,600

-

28,

614,

713

436

,857

,410

2

7,46

1 -

(1

1,70

6,13

3) -

3

12,8

81,8

10

43,

226,

486

3,3

25,1

37,3

47

-

3,3

25,1

37,3

47

Com

preh

ensi

ve In

com

e fo

r th

e ye

ar-

--

--

--

--

- -

-

-

Profi

t fo

r the

yea

r-

--

--

--

- 5

35,4

47,7

57

- 5

35,4

47,7

57

- 5

35,4

47,7

57

Othe

r Co

mpr

ehen

sive

Inco

me,

Net

of T

ax -

-

-

-

-

-

-

(6

,348

,465

) -

(6

,348

,465

)-

(6,3

48,4

65)

Gai

ns/(

loss

es) f

rom

inve

stm

ent i

n eq

uity

inst

rum

ents

m

easu

red

at fa

ir va

lue

--

--

--

--

(6,3

48,4

65)

(6,3

48,4

65)

(6,3

48,4

65)

Gai

ns/(

loss

es) o

n re

valu

atio

n-

--

--

--

--

- -

-

-

Act

uria

l gai

n/(lo

sses

) on

defi n

ed b

enefi

t pl

ans

--

--

--

--

--

-

--

Gai

ns/(

loss

es) o

n ca

sh fl

ow h

edge

--

--

--

--

--

-

--

Exch

ange

gai

ns/(

loss

es)(a

risin

g fr

om tr

ansl

atin

g fi n

anci

al

asse

ts o

f for

eign

ope

ratio

n)-

--

--

--

--

- -

-

-

Tota

l Com

preh

ensi

ve In

com

e fo

r th

e ye

ar -

-

-

-

-

-

-

5

29,0

99,2

92

-

529

,099

,292

-

529

,099

,292

Tran

sfer

to R

eser

ves

durin

g th

e ye

ar -

1

07,0

89,5

51

-

208

,071

,465

(6

,348

,465

) -

(3

08,8

12,5

51)

-

-

-

-

Adj

ustm

ent o

f Inv

estm

ent A

djus

tmen

t Res

erve

--

--

--

--

1,0

21,4

63

(1,0

21,4

63)

-

-

-

Crea

tion

of E

mpl

oyee

trai

ning

Fun

d-

--

--

--

- (5

,596

,584

) 5

,596

,584

-

-

-

Util

izat

ion

of E

mpl

oyee

trai

ning

Fun

d-

--

--

--

- 5

,221

,026

(5

,221

,026

) -

-

-

Crea

tion

of C

SR F

und

--

--

--

--

(5,3

54,4

78)

5,3

54,4

78

-

-

-

Util

izat

ion

of C

SR F

und

--

--

--

--

3,2

35,1

39

(3,2

35,1

39)

-

-

-

Adj

ustm

ent o

f deff

err

ed ta

x R

eser

ve-

--

--

--

- 3

4,60

8,91

1 (3

4,60

8,91

1) -

-

-

Adju

stm

ent o

f Def

erre

d Ta

x Re

serv

e in

to R

egul

ator

y Re

serv

e-

--

--

18,

073,

481

--

(18,

073,

481)

--

--

Tran

sfer

from

Res

erve

s du

ring

the

year

--

--

--

--

--

-

--

Tran

sact

ions

with

Ow

ners

, dire

ctly

reco

gniz

ed in

Equ

ity-

--

--

--

--

- -

-

-

Am

ount

tran

sfer

red

from

pre

miu

m to

sha

re c

apita

l-

--

--

--

--

- -

-

-

Shar

e Is

sued

--

--

--

--

--

-

--

Shar

e Is

sue

Expe

nses

Dire

ctly

Cha

rged

to E

quity

--

--

--

--

--

-

--

Shar

e Is

sue

Expe

nses

Dire

ctly

Cha

rged

to E

quity

-Tax

Impa

ct-

--

--

--

--

- -

-

-

Shar

e B

ased

Pay

men

ts-

--

--

--

--

- -

-

-

Div

iden

d to

Equ

ity-H

olde

rs-

--

--

--

--

- -

-

-

Bon

us S

hare

s Is

sued

--

--

--

--

--

-

--

Cash

Div

iden

d Pa

id-

--

--

--

--

- -

-

-

Gai

n on

Dis

posa

l of S

hare

Cla

ssifi

ed in

to O

CI-

--

--

--

- 9

69,9

60

969

,960

9

69,9

60

Curr

ent T

ax o

n G

ain

on D

ispo

sal o

f Sha

re C

lass

ifi ed

into

OCI

--

--

--

--

(290

,988

)-

(290

,988

)-

(290

,988

)

Othe

r-

--

--

--

--

- -

-

-

--

--

--

--

--

-

--

Tota

l Con

trib

utio

ns b

y an

d D

istr

ibut

ions

--

--

--

--

678,

972

- 6

78,9

72

-67

8,97

2

Bal

ance

at A

shad

31,

207

6 2

,515

,235

,600

-

2

8,61

4,71

3 5

43,9

46,9

62

27,

461

226

,144

,947

(1

8,05

4,59

9) -

5

48,9

09,5

19

10,

091,

009

3,8

54,9

15,6

11

-

3,8

54,9

15,6

11

Suni

l KC

CEO

Paw

an K

umar

Gol

yan

Chai

rman

N

ico

Pijl

Dire

ctor

Raj

esh

Paud

el, F

CAPa

rtne

rP.

L. S

hres

tha

& C

o.Ch

arte

red

Acc

ount

ants

Nav

in M

anan

dhar

Chie

f Fin

ance

Offi

cer

Mri

dul P

araj

uli

Hea

d-Fi

nanc

e &

Pl

anni

ng

Raj

endr

a K

afl e

D

irect

orH

aris

chan

dra

Sube

diD

irect

or

Prad

eep

Raj

Pan

dey

Dire

ctor

Rab

i Sha

nkar

Sai

nju

Dire

ctor

Suni

ty S

hres

tha

Had

aD

irect

or

Dat

e: T

uesd

ay, 2

6 N

ovem

ber,

2019

Plac

e: N

MB

Bha

wan

, Bab

arm

ahal

, Kat

hman

du

As

per o

ur a

ttach

ed re

port

of e

ven

date


(Amount in NPR)

Particulars 31 Ashad 2076 32 Ashad 2075

Net profi t or (loss) as per statement of profi t or loss 535,447,757 394,327,928

Appropriations:

a. General reserve (107,089,551) (78,865,586)

b. Foreign exchange fl uctuation fund -

c. Capital redemption reserve

d. Corporate social responsibility fund (5,354,478) (3,943,279)

e. Employees' training fund (375,558) (592,843)

f. Other - -

Profi t or (loss) before regulatory adjustment 422,628,170 310,926,220

Regulatory adjustment :

a. Interest receivable (-)/previous accrued interest received (+) (176,451,580) -

b. Short loan loss provision in accounts (-)/reversal (+) - -

c. Short provision for possible losses on investment (-)/reversal (+) (31,048,379) -

d. Short loan loss provision on Non Banking Assets (-)/reversal (+) (571,506) -

e. Deferred tax assets recognised (-)/ reversal (+) (18,073,481) -

f. Goodwill recognised (-)/ impairment of Goodwill (+)

g. Bargain purchase gain recognised (-)/resersal (+)

h. Acturial loss recognised (-)/reversal (+) - -

i. Other (+/-)

Lease Payment - -

Dividend Income from Associates - -

Income Attributable from Associates - -

Share Issue Expenses Directly Charged to Equity - -

Share Issue Expenses Directly Charged to Equity-Tax Impact - -

Gain on Disposal of Share Classifi ed into OCI - -

Current Tax on Gain on Disposal of Share Classifi ed into OCI - -

Distributable profi t or (loss) 196,483,223 310,926,220

Statement of Distributable Profi t or LossFor the year ended 31 Ashad 2076 (As per NRB Regulation)


Not

es to

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Cash

and

cas

h eq

uiva

lent

4.1

Part

icul

ars

207

5-76

2

074-

75

207

3-74

Cash

in H

and

557

,277

,513

5

35,4

17,7

59

380

,168

,136

Bal

ance

s w

ith B

/Fis

-

7,0

98,2

70

18,

956,

928

Mon

ey a

t cal

l and

sho

rt n

otic

e 4

,016

,320

,269

4

,064

,238

,564

2

,964

,143

,206

Othe

r -

-

-

Tota

l 4

,573

,597

,783

4

,606

,754

,593

3

,363

,268

,270

Due

from

Nep

al R

astr

a B

ank

4.2

Part

icul

ars

207

5-76

2

074-

75

207

3-74

Stat

utor

y ba

lanc

es w

ith N

RB

1,1

48,3

97,9

28

1,1

22,4

70,1

90

800

,622

,192

Secu

ritie

s pu

rcha

sed

unde

r res

ale

agre

emen

t -

-

-

Othe

r dep

osit

and

rece

ivab

le fr

om N

RB

-

-

-

Tota

l 1

,148

,397

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1

,122

,470

,190

8

00,6

22,1

92

Plac

emen

ts w

ith B

ank

and

Fina

ncia

l Ins

titut

ions

4.3

Part

icul

ars

207

5-76

2

074-

75

207

3-74

Plac

emen

t with

dom

estic

B/F

Is -

-

-

Plac

emen

t with

For

eign

B/F

Is -

-

-

Less

: Allo

wan

ces

for i

mpa

irem

ent

-

-

-

Tota

l -

-

-


Der

ivat

ive

Fina

ncia

l Ins

trum

ents

4.4

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icul

ars

207

5-76

2

074-

75

207

3-74

Hel

d fo

r tr

adin

g-

--

Inte

rest

rate

sw

ap-

--

Forw

ard

exch

ange

con

trac

t-

--

Othe

rs-

--

Hel

d fo

r ri

sk m

anag

emen

t-

--

Inte

rest

rate

sw

ap-

--

Forw

ard

exch

ange

con

trac

t-

--

Othe

rs-

--

Tota

l -

-

-

Othe

r Tr

adin

g as

sets

4.5

Part

icul

ars

207

5-76

2

074-

75

207

3-74

Trea

sury

Bill

s -

-

Gov

ernm

ent b

ond

-

-

-

NR

B b

onds

-

-

-

Dom

estic

Cor

pora

te b

onds

-

-

-

Equi

ties

-

-

-

Othe

r -

-

-

Tota

l -

-

-

Pled

ged

-

-

-

Non

- Pl

edge

d -

-

-


Not

es to

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Loan

s an

d ad

vanc

es to

B/F

Is4.

6

Part

icul

ars

207

5-76

2

074-

75

207

3-74

Loan

to M

icro

fi nan

ce In

stitu

tions

573

,826

,752

1

24,0

67,1

21

34,

067,

121

Othe

r -

-

-

Less

: Allo

wan

ces

for I

mpa

irmen

t (5

,738

,268

) (1

,240

,671

) (3

40,6

71)

Tota

l 5

68,0

88,4

84

122

,826

,450

3

3,72

6,45

0

4.6.

1 A

llow

ance

s fo

r Im

pair

men

t

Part

icul

ars

207

5-76

2

074-

75

207

3-74

Bal

ance

as

at S

hraw

an 1

1,2

40,6

71

340

,671

4

00,0

00

Impa

irmen

t los

s fo

r the

yea

r:

Char

ge fo

r the

yea

r 4

,497

,596

9

00,0

00

Rec

over

ies/

Rev

ersa

l (5

9,32

9)

Am

ount

writ

ten

off

-

Bal

ance

as

at A

shad

end

5,7

38,2

68

1,2

40,6

71

340

,671

Loan

s an

d ad

vanc

es to

cus

tom

ers

4.7

Part

icul

ars

207

5-76

2

074-

75

207

3-74

Loan

s an

d ad

vanc

es m

easu

red

at a

mor

tized

22,

803,

181,

079

18,

445,

467,

210

14,

167,

124,

120

Less

: Im

pairm

ent a

llow

ance

s

Indi

vidu

al Im

pairm

ent

(152

,328

,743

) (4

8,83

0,00

1) (6

0,90

4,58

8)

Port

folio

Impa

irmen

t (2

90,2

46,2

20)

(216

,037

,025

) (1

57,9

63,0

02)

Net

am

ount

22,

360,

606,

116

18,

180,

600,

184

13,

948,

256,

529

Loan

and

adv

ance

s m

easu

red

at F

VTPL

-

-

-

Tota

l 2

2,36

0,60

6,11

6 1

8,18

0,60

0,18

4 1

3,94

8,25

6,52

9


4.7.

1 A

naly

sis

of lo

an a

nd a

dvan

ces

- B

y pr

oduc

t

Part

icul

ars

207

5-76

2

074-

75

207

3-74

Prod

uct

-

Ter

m L

oans

4,2

17,0

65,9

25

3,9

49,0

37,9

73

922

,053

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Ove

rdra

st 2

,091

,996

,955

2

,367

,098

,327

1

,757

,986

,732

Tru

st R

ecei

pt/I

mpo

rt L

oans

-

-

-

Dem

and

and

othe

r Wor

king

Cap

ital L

oans

391

,359

,856

3

35,5

00,0

00

Per

sona

l Res

iden

tial L

oans

3,6

24,4

83,7

36

3,5

26,9

56,6

66

2,9

15,6

47,3

62

Rea

l Est

ate

Loan

s 2

,389

,896

,809

1

,820

,211

,512

4

65,8

92,2

99

Mar

gin

Lend

ing

Loan

s 3

08,8

68,9

51

221

,570

,469

1

45,3

21,2

04

Hire

Pur

chas

e Lo

ans

2,4

39,1

89,5

03

2,6

81,6

60,2

30

2,5

43,7

66,2

63

Dep

rived

Sec

tor L

oans

573

,760

,654

5

92,2

98,7

39

669

,906

,369

Bill

s Pu

rcha

sed

-

-

Sta

ff s L

oans

107

,022

,427

9

4,67

5,11

4 5

7,25

1,15

0

Oth

er 6

,483

,084

,683

2

,742

,737

,464

4

,605

,185

,680

Sub-

tota

l 2

2,62

6,72

9,49

9 1

8,33

1,74

6,49

5 1

4,08

3,01

1,00

3

Inte

rest

Rec

eiva

ble

176

,451

,580

1

13,7

20,7

15

84,

175,

533

Gra

nd T

otal

22,

803,

181,

079

18,

445,

467,

210

14,

167,

186,

536

4.7.

2 A

naly

sis

of lo

an a

nd a

dvan

ces

- B

y Cu

rren

cy

Part

icul

ars

207

5-76

2

074-

75

207

3-74

Nep

ales

e R

upee

22,

803,

181,

079

18,

445,

467,

210

14,

167,

124,

120

Indi

an R

upee

--

-

Uni

ted

Stat

es D

olla

r-

--

Gre

at B

ritai

n Po

und

--

-

Euro

--

-

Japa

nese

Yen

--

-

Chin

ese

Yuan

--

-

Othe

r-

--

Gra

nd T

otal

22,

803,

181,

079

18,

445,

467,

210

14,

167,

124,

120


Not

es to

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

4.7.

3 A

naly

sis

of lo

an a

nd a

dvan

ces

- B

y Co

llate

ral

Part

icul

ars

207

5-76

2

074-

75

207

3-74

Secu

red

Mov

eabl

e/Im

mov

eabl

e A

sset

s 2

1,04

9,89

6,65

4 1

7,17

6,38

5,91

3 1

2,65

6,79

4,31

2

Gol

d an

d Si

lver

902

,180

,082

7

50,7

86,3

57

774

,643

,528

Gua

rant

ee o

f Dom

estic

BFI

s 4

59,1

51,7

46

120

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3

0,00

0,00

0

Gov

ernm

ent G

uara

ntee

4,0

67,1

20

4,0

67,1

20

4,0

67,1

20

Gua

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2075

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Mut

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30

10 S

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33,

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70 M

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13,

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1 M

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68 S

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100

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0 Sh

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f Rs.

100

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6 1

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9 1

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8 1

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3 Sh

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2075

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Cost

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2 Sh

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f Rs.

100

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ly P

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e Co

. Ltd

. 2

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1

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2

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1

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100

Each

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al In

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nce

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1,1

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53,8

57 S

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100

Each

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ly P

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e Co

. Ltd

. 6

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4

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3

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2

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0 Sh

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of R

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dup

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2 Sh

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of R

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0 5

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10

295

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f Rs.

100

Each

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ly P

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p

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pi H

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4

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00

15,

620

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00

28,

340

3 bo

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f Rs.

100

Each

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ly P

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al P

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Co.

Lim

ited

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re) o

f Rs.

100

Each

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ly P

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p

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Dur

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char

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Lim

ited

12,

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10,

180,

170

12,

345,

840

10,

591,

490

7,4

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7,5

77,5

50

14,6

90 S

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s of

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100

Each

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4

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2

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5

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0 2

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5 B

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1

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1

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5 1

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5

11 s

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s (In

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f Rs.

100

Each

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ly P

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ai D

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ank

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1

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00

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fi nan

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o Lt

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9

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2

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1

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0 2

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2

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0

22 s

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s of

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100

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Lag

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o Lt

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2

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3 B

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100

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Ltd

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00

107

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8

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1

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46

98 S

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100

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15,

260

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00

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27 S

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f Rs.

100

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ly P

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p

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fi nan

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o Lt

d -

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-

-

2

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8

3,74

6

26 s

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s of

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100

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12,

480

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000

10 S

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100

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vest

men

t tru

st 2

88,2

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303

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5

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4

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1

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1

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125

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100

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td 7

21,7

59

617

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7

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558

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100

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odi H

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3

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337

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co

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-

-

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900

103

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5

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0 1

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77

636

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100

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0 3

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0 3

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0 5

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0 7

7,00

4

340

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es o

f Rs.

100

Each

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ly P

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und

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619,

210

12,

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12,

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12,

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12,

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12,

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126

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of R

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Eac

h Fu

lly P

aidu

p

Subt

otal

285,

396,

750

232,

181,

266

255,

849,

035

237,

882,

069

152,

668,

138

265,

007,

590

Inve

stm

ent i

n U

nquo

ted

equi

ty1

Prab

hu C

apita

l Lim

ited

1,5

00,0

00

1,5

00,0

00

1,5

00,0

00

1,5

00,0

00

500

,000

5

00,0

00

15,0

00 p

rom

otor

sha

res

of R

s.10

0 Ea

ch F

ully

Pai

dup

2Cr

edit

Info

rmat

ion

Bur

eau

Ltd

27,

000

236

,200

2

7,00

0 2

70,7

84

27,

000

217

,387

2,36

2 Sh

ares

of R

s.10

0 Ea

ch F

ully

Pai

dup

3N

epal

Cle

arin

g H

ouse

Ltd

1,0

70,2

00

1,2

84,2

00

1,0

70,2

00

2,0

70,3

35

1,0

70,7

00

1,3

42,9

88

12,8

42 S

hare

s (In

clud

ing

2140

Bon

us S

hare

) of R

s.10

0 Ea

ch F

ully

Pai

dup

4M

ahal

axm

i Ins

uran

ce 5

0,00

0,00

0 5

0,00

0,00

0 -

-

-

-

500,

000

Prom

otor

sha

res

of R

s.10

0 Ea

ch F

ully

Pai

dup

5N

abil

Bal

ance

Fun

d 1

0,00

0,00

0 1

0,00

0,00

0 -

-

-

-

100,

000

shar

es o

f Rs.

10 E

ach

Fully

Pai

dup

Subt

otal

62,5

97,2

0063

,020

,400

2,59

7,20

03,

841,

119

1,59

7,70

02,

060,

375

Gra

nd T

otal

3

20,9

93,9

50

295

,201

,666

2

58,4

46,2

35

241

,723

,188

1

54,2

65,8

38

267

,067

,964


4.8.

3 In

form

atio

n re

latin

g to

inve

stm

ent i

n eq

uitie

s

Part

icul

ars

2075

-76

207

4-75

2

073-

74

Cos

t F

air

Valu

e C

ost

Fa

ir V

alue

Cost

F

air

Valu

e

18N

atio

nal L

ife In

sura

nce

Co. L

td.

2,5

00,4

29

2,1

24,7

20

2,3

80,4

29

2,4

36,8

00

-

-

3,63

2 Sh

ares

(Inc

ludi

ng 4

32 B

onus

sha

re) o

f Rs.

100

Each

Ful

ly P

aidu

p

19Si

ddar

tha

Insu

ranc

e Co

. Ltd

. 2

,197

,428

1

,228

,500

2

,127

,428

1

,380

,000

-

-

2700

Sha

re o

f Rs.

100

Each

Ful

ly P

aidu

p

20Lu

mbi

ni G

ener

al In

sura

nce

Co. L

td.

4,0

16,7

13

5,3

85,7

00

3,1

19,1

13

4,4

88,1

00

1,1

30,0

13

1,9

49,0

00

53,8

57 S

hare

s of

Rs.

100

Each

Ful

ly P

aidu

p

21Si

khar

Insu

ranc

e Co

. Ltd

. 6

,144

,908

4

,626

,000

3

,535

,783

2

,955

,000

-

-

6,00

0 Sh

ares

of R

s.10

0 Ea

ch F

ully

Pai

dup

22Sa

garm

atha

Insu

ranc

e Co

. Lim

ited

3,5

56,1

88

1,5

68,1

60

2,9

27,8

59

2,8

14,0

00

-

-

2,59

2 Sh

ares

of R

s.10

0 Ea

ch F

ully

Pai

dup

23A

run

kave

li H

ydro

Pow

er C

o. L

imite

d -

-

2

9,50

0 7

6,70

0 5

9,00

0 2

41,3

10

295

Shar

es o

f Rs.

100

Each

Ful

ly P

aidu

p

24A

pi H

ydro

Pow

er L

imite

d -

4

29

5,2

00

15,

620

5,2

00

28,

340

3 bo

nus

Shar

es o

f Rs.

100

Each

Ful

ly P

aidu

p

25B

utw

al P

ower

Co.

Lim

ited

4,0

49,0

26

4,0

90,0

00

2,5

05,0

00

2,2

85,0

00

-

-

1000

0 Sh

ares

(Inc

ludi

ng 5

00 b

onus

sha

re) o

f Rs.

100

Each

Ful

ly P

aidu

p

26N

epal

Dur

San

char

Co.

Lim

ited

12,

345,

840

10,

180,

170

12,

345,

840

10,

591,

490

7,4

32,0

84

7,5

77,5

50

14,6

90 S

hare

s of

Rs.

100

Each

Ful

ly P

aidu

p

27N

MB

Mic

rofi a

nanc

e Lt

d -

4

,950

2

,400

5

6,70

0 2

,400

6

8,30

4

5 B

onus

sha

res

of R

s.10

0 Ea

ch F

ully

Pai

dup

28G

loba

l IM

E M

icro

fi nan

ce c

o Lt

d 1

,000

1

2,02

0 1

,500

1

1,05

5 1

,500

1

9,54

5

11 s

hare

s (In

clud

ing

1 B

onus

sha

re) o

f Rs.

100

Each

Ful

ly P

aidu

p

29K

alik

a M

ai D

evel

opm

ent b

ank

Co L

td -

-

8

,200

1

82,7

90

8,2

00

142

,680

135

shar

es o

f of R

s.10

0 Ea

ch F

ully

Pai

dup

30M

ahila

Sah

ayat

ri m

icro

fi nan

ce C

o Lt

d 2

,000

9

,702

2

,000

1

5,62

0 2

,000

2

3,20

0

22 s

hare

s of

Rs.

100

Each

Ful

ly P

aidu

p

31B

ijaya

Lag

hubi

tta C

o Lt

d -

1

,455

2

,300

2

1,42

0 2

,300

3

1,57

9

3 B

onus

sha

res

of R

s.10

0 Ea

ch F

ully

Pai

dup

32W

omi M

icro

fi nan

ce L

td 1

,600

2

5,94

4 1

,600

3

1,85

5 1

,000

1

9,79

0

23 S

hare

s (In

clud

ing

7 bo

nus

shar

e) o

f Rs.

100

Each

Ful

ly P

aidu

p

33La

xmi L

aghu

bitta

San

stah

Ltd

-

-

8,6

00

107

,604

8

,600

1

60,0

46

98 S

hare

s of

Rs.

100

Each

Ful

ly P

aidu

p

34M

irmire

Mic

rofi n

ance

co

Ltd

2,5

00

24,

273

1,0

00

15,

260

1,0

00

22,

100

27 S

hare

s (In

culu

ding

2 B

onus

Sha

re) o

f Rs.

100

Each

Ful

ly P

aidu

p

35Fo

rwar

d M

icro

fi nan

ce c

o Lt

d -

-

-

-

2

,600

8

3,74

6

26 s

hare

s of

Rs.

100

Each

Ful

ly P

aidu

p

36R

elai

ble

Mic

rofi n

ance

Co

Ltd

-

-

1,0

00

12,

480

1,0

00

19,

000

10 S

hare

s of

Rs.

100

Each

Ful

ly P

aidu

p

37Ci

tizen

s In

vest

men

t tru

st 2

88,2

73

303

,625

5

,126

,650

4

,555

,000

1

,263

,642

1

,571

,400

125

shar

es o

f Rs.

100

Each

Ful

ly P

aidu

p

38So

alte

Hot

el L

td 7

21,7

59

617

,320

7

21,7

59

558

,900

-

-

2530

Sha

res

(Incl

udin

g 53

0 B

onus

Sha

re) o

f Rs.

100

Each

Ful

ly P

aidu

p

39U

nite

d m

odi H

ydro

pow

er c

o Lt

d -

-

-

-

3

3,70

0 1

14,9

17

337

shar

es o

f R

s.10

0 Ea

ch F

ully

Pai

dup

40N

yadi

Hyd

ropo

wer

co

Ltd

-

-

57,

900

103

,668

5

7,90

0 1

52,2

77

636

shar

es o

f Rs.

100

Each

Ful

ly P

aidu

ph

41R

idi H

ydro

pow

er L

td 3

5,00

0 3

0,60

0 3

5,00

0 5

2,64

4 3

5,00

0 7

7,00

4

340

shar

es o

f Rs.

100

Each

Ful

ly P

aidu

p

42N

MB

Hyb

rid F

und

12,

619,

210

12,

657,

068

12,

619,

210

12,

228,

014

12,

619,

210

12,

543,

495

126

1921

sha

res

of R

s.10

Eac

h Fu

lly P

aidu

p

43N

IBL

Prag

ati F

und

10,

274,

070

7,6

43,9

08

10,

274,

070

9,2

46,6

63

10,

274,

070

10,

274,

070

1,02

7,40

7 Sh

ares

of R

s.10

Eac

h Fu

lly P

aidu

p

Subt

otal

285,

396,

750

232,

181,

266

255,

849,

035

237,

882,

069

152,

668,

138

265,

007,

590

Inve

stm

ent i

n U

nquo

ted

equi

ty1

Prab

hu C

apita

l Lim

ited

1,5

00,0

00

1,5

00,0

00

1,5

00,0

00

1,5

00,0

00

500

,000

5

00,0

00

15,0

00 p

rom

otor

sha

res

of R

s.10

0 Ea

ch F

ully

Pai

dup

2Cr

edit

Info

rmat

ion

Bur

eau

Ltd

27,

000

236

,200

2

7,00

0 2

70,7

84

27,

000

217

,387

2,36

2 Sh

ares

of R

s.10

0 Ea

ch F

ully

Pai

dup

3N

epal

Cle

arin

g H

ouse

Ltd

1,0

70,2

00

1,2

84,2

00

1,0

70,2

00

2,0

70,3

35

1,0

70,7

00

1,3

42,9

88

12,8

42 S

hare

s (In

clud

ing

2140

Bon

us S

hare

) of R

s.10

0 Ea

ch F

ully

Pai

dup

4M

ahal

axm

i Ins

uran

ce 5

0,00

0,00

0 5

0,00

0,00

0 -

-

-

-

500,

000

Prom

otor

sha

res

of R

s.10

0 Ea

ch F

ully

Pai

dup

5N

abil

Bal

ance

Fun

d 1

0,00

0,00

0 1

0,00

0,00

0 -

-

-

-

100,

000

shar

es o

f Rs.

10 E

ach

Fully

Pai

dup

Subt

otal

62,5

97,2

0063

,020

,400

2,59

7,20

03,

841,

119

1,59

7,70

02,

060,

375

Gra

nd T

otal

3

20,9

93,9

50

295

,201

,666

2

58,4

46,2

35

241

,723

,188

1

54,2

65,8

38

267

,067

,964


Not

es to

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Curr

ent t

ax A

sset

s/Li

abili

ty4.

9

Part

icul

ars

2075

-76

2074

-75

2073

-74

Curr

ent t

ax a

sset

s 2

32,3

69,7

89

164

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1

65,8

26,6

08

Curr

ent y

ear I

ncom

e Ta

x A

sset

s 2

32,3

69,7

89

164

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1

65,8

26,6

08

Tax

Ass

ets

of P

rior P

erio

ds

Curr

ent t

ax li

abili

ties

205

,466

,362

1

78,4

40,8

63

174

,182

,173

Curr

ent y

ear I

ncom

e Ta

x Li

abili

ties

205

,466

,362

1

79,6

48,3

11

174

,182

,173

Tax

Liab

ilitie

s of

Prio

r Per

iods

-

(1,2

07,4

48)

-

205

,466

,362

1

78,4

40,8

63

174

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,173

Tota

l of i

ncom

e ta

x as

sets

/(lia

bilit

ies)

26,

903,

428

(13,

522,

470)

(8,3

55,5

64)

Inve

stm

ent I

n su

bsid

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10

Part

icul

ars

2075

-76

2074

-75

2073

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Inve

stm

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n Q

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stm

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s

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vest

men

t In

quot

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ies

Part

icul

ars

2075

-76

2074

-75

2073

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Cos

t F

air

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stm

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ars

2075

-76

2074

-75

2073

-74

Cos

t F

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t F

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Inve

stm

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n Q

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ates

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stm

ent i

n U

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mou

nt -

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vest

men

t In

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sub

sidi

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s

Part

icul

ars

2075

-76

2074

-75

2073

-74

Cos

t F

air

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r Va

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t F

air

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-

-

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res

of R

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ach

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4.10

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form

atio

n re

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2075

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2074

-75

2073

-74

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on C

ontr

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g In

tere

st o

f the

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up

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2074

-75

Equi

ty In

tere

st h

eld

by N

CI (%

)

Profi

t (L

oss)

allo

cate

d du

ring

the

year

Acc

umul

ated

Bal

ance

s of

NCI

as

on A

shad

End

Div

iden

d Pa

id to

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Not

es to

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

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1 A

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207

6

4.11

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men

t In

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ssoc

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s

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ars

2075

-76

2074

-75

2073

-74

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t F

air

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unqu

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ass

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tes

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2075

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2074

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2073

-74

Cos

t F

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r Va

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t F

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e

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l -

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-

4.11

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form

atio

n re

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ass

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tes

of th

e ba

nk

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ars

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cent

age

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wne

ship

2075

-76

2074

-75

2073

-74

Tota

l -

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tes

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up

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2074

-75

-

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l-

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stm

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12

Part

icul

ars

2075

-76

2074

-75

2073

-74

Inve

stm

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s m

easu

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ance

as

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hraw

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Add

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/(D

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e ye

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nges

in fa

ir va

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g th

e ye

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ustm

ent/

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sfer

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Am

ount

-

-

-

Inve

stm

ent P

rope

rtie

s m

easu

red

at C

ost

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ance

as

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n

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umul

ated

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irmen

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ount

-

-

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l -

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-


Not

es to

Fin

anci

al S

tate

men

tsFo

r the

yea

r end

ed 3

1 A

shad

207

6

Prop

erty

and

Equ

ipm

ent

4.13

Part

icul

ars

Lan

d B

uild

ing

Lea

seho

ld

Prop

ertie

s C

ompu

ter

&

Acc

esso

ries

V

ehic

les

Fur

nitu

re

& F

ixtu

res

Mac

hine

ry

Equ

ipm

ent

& o

ther

s T

otal

Ash

ad

end

2076

T

otal

Ash

ad

end

2075

Co

stA

s on

Shr

awan

207

4 1

4,17

2,95

0 1

4,39

7,27

5 8

0,45

0,99

3 3

7,28

5,75

8 5

1,66

0,59

5 3

4,95

2,28

5 -

6

3,33

3,86

9 2

96,2

53,7

26

Add

ition

dur

ing

the

year

-

-

29,

155,

206

15,

837,

471

14,

369,

100

13,

887,

833

-

24,

960,

427

98,

210,

037

Acq

uisi

tion

-

-

29,

155,

206

15,

837,

471

14,

369,

100

13,

887,

833

-

24,

960,

427

98,

210,

037

Capi

taliz

atio

n -

-

-

-

-

-

-

-

-

D

ispo

sal d

urin

g th

e ye

ar -

-

(1

,489

,829

) (9

05,5

00)

-

-

(2,8

12,8

00)

(5,2

08,1

30)

Adj

ustm

ent/

Rev

alua

tion

-

-

-

-

-

-

-

-

Bal

ance

as

on A

shad

end

207

5 1

4,17

2,95

0 1

4,39

7,27

5 1

09,6

06,2

00

51,

633,

400

65,

124,

195

48,

840,

118

-

85,

481,

496

389

,255

,633

Add

ition

dur

ing

the

Year

-

-

12,

458,

137

2,5

04,1

37

3,0

37,7

00

2,1

79,4

38

-

5,2

08,9

39

25,

388,

350

Acq

uisi

tion

12,

458,

137

2,5

04,1

37

3,0

37,7

00

2,1

79,4

38

5,2

08,9

39

25,

388,

350

Capi

taliz

atio

n -

D

ispo

sal d

urin

g th

e ye

ar (2

,374

,424

) (3

17,4

00)

(623

,733

) (5

,069

,541

) (8

,385

,099

)A

djus

tmen

t/R

eval

uatio

n -

B

alan

ce a

s on

Ash

ad e

nd 2

076

14,

172,

950

14,

397,

275

122

,064

,337

5

1,76

3,11

2 6

7,84

4,49

5 5

0,39

5,82

2 -

8

5,62

0,89

3 4

06,2

58,8

84

389

,255

,633

Dep

reci

atio

n an

d Im

pair

men

tA

s on

Shr

awan

01.

207

4 -

6

,615

,548

3

7,90

4,16

1 2

4,10

9,36

6 1

6,44

0,16

6 2

0,30

9,99

2 -

3

4,68

8,33

6 1

40,0

67,5

69

Dep

reci

atio

n ch

arge

for t

he y

ear

-

719

,864

7

,662

,640

7

,642

,528

1

1,35

0,72

7 4

,926

,155

-

1

0,74

7,21

8 4

3,04

9,13

3 Im

pairm

ent f

or th

e ye

ar -

-

-

-

-

-

-

-

-

D

ispo

sals

-

-

-

(1,4

75,1

82)

(807

,376

) -

-

(2

,737

,040

) (5

,019

,598

)A

djus

tmen

t -

-

-

-

-

-

-

-

-

A

s on

Ash

ad e

nd 2

075

-

7,3

35,4

12

45,

566,

801

30,

276,

713

26,

983,

517

25,

236,

147

-

42,

698,

515

178

,097

,104

D

epre

ciat

ion

char

ge fo

r the

yea

r 7

19,8

64

10,

463,

096

7,8

64,2

14

13,

198,

455

6,1

00,0

65

13,

486,

021

51,

831,

714

Impa

irmen

t for

the

year

-

Dis

posa

ls (2

,201

,265

) (3

17,4

00)

(602

,647

) (4

,736

,257

) (7

,857

,569

)A

djus

tmen

t -

A

s on

Ash

ad e

nd 2

076

-

8,0

55,2

75

56,

029,

897

35,

939,

662

39,

864,

572

30,

733,

566

-

51,

448,

278

222

,071

,249

1

78,0

97,1

04

Capi

tal W

ork

in P

rogr

ess

2074

Capi

tal W

ork

in P

rogr

ess

2075

-

Capi

tal W

ork

in P

rogr

ess

2076

-

Net

Boo

k Va

lue

As

on A

shad

end

207

4 1

4,17

2,95

0 7

,781

,727

4

2,54

6,83

2 1

3,17

6,39

2 3

5,22

0,42

8 1

4,64

2,29

3 -

2

8,64

5,53

4 1

56,1

86,1

57

As

on A

shad

end

207

5 1

4,17

2,95

0 7

,061

,863

6

4,03

9,39

8 2

1,35

6,68

7 3

8,14

0,67

8 2

3,60

3,97

1 -

4

2,78

2,98

1 2

11,1

58,5

29

211

,158

,529

As

on A

shad

end

207

6 1

4,17

2,95

0 6

,342

,000

6

6,03

4,44

0 1

5,82

3,45

0 2

7,97

9,92

3 1

9,66

2,25

7 -

3

4,17

2,61

5 1

84,1

87,6

35


Goo

dwill

and

Inta

ngib

le A

sset

s4.

14

Part

icul

ars

Goo

dwill

So� w

are

Othe

rTo

tal A

shad

end

Pu

rcha

sed

Dev

elop

edCo

stA

s on

Shr

awan

01

2074

-

19,

117,

101

-

-

19,

117,

101

Add

ition

dur

ing

the

year

-

3,3

69,9

99

-

-

3,3

69,9

99

Acq

uisi

tion

-

3,3

69,9

99

-

-

3,3

69,9

99

Capi

taliz

atio

n -

-

-

-

D

ispo

sal d

urin

g th

e ye

ar -

-

-

-

-

A

djus

tmen

t/R

eval

uatio

n -

-

-

-

-

B

alan

ce a

s on

Ash

ad e

nd 2

075

-

22,

487,

100

-

-

22,

487,

100 -

A

dditi

on d

urin

g th

e Ye

ar -

-

-

-

A

cqui

sitio

n -

4

46,3

50

-

-

446

,350

Ca

pita

lizat

ion

-

-

-

-

Dis

posa

l dur

ing

the

year

-

-

-

-

Adj

ustm

ent/

Rev

alua

tion

-

-

-

-

Bal

ance

as

on A

shad

end

207

6 2

2,93

3,45

0 -

-

2

2,93

3,45

0

Am

ortis

atio

n an

d Im

pair

men

tA

s on

Shr

awan

01.

207

4 -

1

4,03

3,76

0 -

-

1

4,03

3,76

0 A

mor

tisat

ion

char

ge fo

r the

yea

r -

2

,240

,192

-

-

2

,240

,192

Im

pairm

ent f

or th

e ye

ar -

-

-

-

-

D

ispo

sals

-

-

-

-

Adj

ustm

ent

-

-

-

-

As

on A

shad

end

207

5 1

6,27

3,95

1 -

-

1

6,27

3,95

1 Im

pairm

ent f

or th

e ye

ar -

-

-

-

A

mor

tisat

ion

char

ge fo

r the

yea

r -

2

,274

,939

-

-

2

,274

,939

D

ispo

sals

-

-

-

-

Adj

ustm

ent

-

-

-

-

As

on A

shad

end

207

6 -

1

8,54

8,89

0 -

-

1

8,54

8,89

0 Ca

pita

l Wor

k in

Pro

gres

sN

et B

ook

Valu

eA

s on

Ash

ad e

nd 2

074

-

5,0

83,3

41

-

-

5,0

83,3

41

As

on A

shad

end

207

5 -

6

,213

,148

-

-

6

,213

,148

A

s on

Ash

ad e

nd 2

076

-

4,3

84,5

60

-

-

4,3

84,5

60


Notes to Financial StatementsFor the year ended 31 Ashad 2076Deferred Taxes Assets/(Liabilities) 4.15

Particulars2073-74

Deferred Tax Assets Deferred Tax Liabilities Net Deferred Tax Assets /(Liabilities)

Deferred tax on temporary diff erences on following items

Loans and Advances to BFIs - - -

Loans and Advances to Customers - (25,252,660) (25,252,660)

Assets held for Sale - -

Investment Properties - - -

Investment Securities - (33,840,638) (33,840,638)

Investment In Associates - - -

Property and Equipment - 651,772 651,772

Employees' Defi ned Benefi t Plan 8,749,575 - 8,749,575

Employees' Leave Liability 7,707,003 - 7,707,003

Lease Liabilities 2,204,114 - 2,204,114

Provisions LLP - - -

Other Temporary Diff erences - - -

Deferred tax on temporary diff erences 18,660,692 (58,441,526) (39,780,834)

Deferred tax on carry forward of unused tax losses - - -

Deferred tax due to changes in tax rate - - -

Net Deferred Tax Asset (Liabilities) as on year end of 2073/74 (39,780,834)

Deferred Tax Asset/(Liabilities) as on Shrawan 01, 2073 7,948,845

Origination/(Reversal) during the year (47,729,679)

Deferred Tax (expense)/income recognized in profi t or loss -

Deferred Tax (expense)/income recognized in Other Comprehensive Income -

Deferred Tax (expense)/income recognized directly in equity (47,729,679)


Notes to Financial StatementsFor the year ended 31 Ashad 2076

Particulars2074-75


Deferred tax on temporary diff erences on following items

Loans and Advances to BFIs - - -

Loans and Advances to Customers - (20,016,215) (20,016,215)

Assets held for Sale (943,018) (943,018)

Investment Properties - - -

Investment Securities 5,016,914 - 5,016,914

Investment In Associates - - -

Property and Equipment (17,063,720) (17,063,720)

Employees' Defi ned Benefi t Plan 12,574,891 - 12,574,891

Employees' Leave Liability 11,494,554 - 11,494,554

Lease Liabilities 3,561,133 - 3,561,133

Provisions LLP - - -

Other Temporary Diff erences - -

Deferred tax on temporary diff erences 15,583,773 (20,959,232) (5,375,460)

Deferred tax on carry forward of unused tax losses - - -

Deferred tax due to changes in tax rate - - -

Net Deferred Tax Asset (Liabilities) as on year end of 2074/75 (5,375,460)

Deferred Tax (Asset)/ Liabilities as on Shrawan 01, 2074 39,780,834

Origination/(Reversal) during the year 34,405,374

Deferred Tax (expense)/income recognized in profi t or loss (4,452,178)

Deferred Tax (expense)/income recognized in Other Comprehensive Income 38,857,552

Deferred Tax (expense)/income recognized directly in equity -



Particulars2075-76


Deferred tax on temporary diff erences on following itemsLoans and Advances to BFIs - - -Loans and Advances to Customers - - -Assets held for Sale - - -Investment Properties - - -Investment Securities - 7,737,685 7,737,685 Investment In Associates - - -Property and Equipment 5,372,537 5,372,537 Employees' Defi ned Benefi t Plan - - -Employees' Leave Liability - - -Lease Liabilities 4,963,259 - 4,963,259 Provisions LLP - - -Other Temporary Diff erences - - -Deferred tax on temporary diff erences 10,335,796 7,737,685 18,073,481 Deferred tax on carry forward of unused tax losses - - - Deferred tax due to changes in tax rate - - - Net Deferred Tax Asset (Liabilities) as on year end of 2075/76 - - 18,073,481

Deferred Tax (Asset)/ Liabilities as on Shrawan 01, 2075 - - 5,375,460 Origination/(Reversal) during the year 23,448,941

Deferred Tax (expense)/income recognized in profi t or loss 20,728,170Deferred Tax (expense)/income recognized in Other Comprehensive Income 2,720,771

Deferred Tax (expense)/income recognized directly in equity -

Other Assets 4.16

Particulars 2075-76 2074-75 2073-74

Assets held for Sale 571,506 3,143,393 - Other Non-Banking Assets - - - Bills Receivable - - - Accounts Receivable 2,191,266 38,159 4,669,005 Accrued Income - - - Prepayments and Deposits 23,408,322 14,105,540 1,370,982 Income Tax Deposit - - - Deferred Employee Expenditure 1,789,591 2,342,600 4,167,069 Cash In Transit 905,600 905,600 905,600 Other 27,681,646 27,015,950 31,495,296 - Stationery Stock 3,908,490 4,439,026 1,483,922 - Commission Receivable - - - - Deposit - - - - Dividend Tax Paid in Advance - - - - Remittance Receivable 17,802,531 18,937,098 23,427,982 - Others 5,970,625 3,639,826 6,583,392 Grand Total 56,547,931 47,551,242 42,607,951


Notes to Financial StatementsFor the year ended 31 Ashad 2076Due to Bank and Financial Institutions 4.17

Particulars 2075-76 2074-75 2073-74

Money Market Deposits - -

Interbank Borrowing 250,000,000 - -

Other Deposits from BFIs 1,246,132,384 599,112,852 614,140,643

Settlement and Clearing Accounts - - -

Other Deposits from BFIs -

Total 1,496,132,384 599,112,852 614,140,643

Due to Nepal Rastra Bank 4.18

Particulars 2075-76 2074-75 2073-74

Refi nance from NRB - - -

Standing Liquidity Facility - - -

Lender of Last Resort facility from NRB - - -

Securities sold under repurchase agreements - - -

Other Payable to NRB - - -

Total - - -

Derivative Financial instruments 4.19

Particulars 2075-76 2074-75 2073-74

Held for Trading

Interest Rate Swap - - -

Currency Swap - - -

Forward Exchange Contracts

Others

Held for Risk Management

Interest Rate Swap

Currency Swap

Forward Exchange Contracts.

Others - - -

Total - - -


Notes to Financial StatementsFor the year ended 31 Ashad 2076Deposits from customers 4.20

Particulars 2075-76 2074-75 2073-74

Institutions Customers: 6,444,253,815 5,100,346,810 3,230,823,078

Term deposits 2,901,912,512 2,170,115,941 1,328,503,665

Call deposits 3,125,193,680 2,519,934,309 1,618,364,670

Current deposits 144,850,520 143,101,347 100,673,204

Other 272,297,103 267,195,213 183,281,539

Individual Customers: 17,708,762,716 15,755,731,706 12,216,465,500

Term deposits 9,887,407,322 8,275,476,631 6,504,643,6069

Saving deposits 7,704,225,496 7,345,909,475 5,612,957,3709

Current deposits 117,113,778 133,993,699 79,728,7949

Other 16,120 351,901 19,135,729

Total 24,153,016,531 20,856,078,516 15,447,288,578

Borrowings 4.21

Particulars 2075-76 2074-75 2073-74

Domestic Borrowing - - -

Nepal Government - - -

Other Institutions - - -

Other - - -

Sub total - - -

Foreign Borrowing - - -

Foreign Bank and Financial Institutions - - -

Multilateral Development Banks - - -

Other institutions - - -

Sub total - - -

Total - - -

4.20.1 Currency wise analysis of deposit from customers

Particulars 2075-76 2074-75 2073-74

Nepalese Rupee 24,153,016,531 20,856,078,516 15,447,288,578

Indian Rupee - - -

United State dollar - - -

Great Britain pound - - -

Euro - - -

Japenese yen - - -

Chinese Yuan - - -

Other - - -

Total 24,153,016,531 20,856,078,516 15,447,288,578


Notes to Financial StatementsFor the year ended 31 Ashad 2076Provisions 4.22

Particulars 2075-76 2074-75 2073-74

Provisions for redundancy - - -

Provision for restructuring - - -

Pending legal issues and tax litigation - - -

Onerous contracts - - -

Other - - -

Total - - -

4.22.1 Movement in Provisions

Particulars 2075-76 2074-75 2073-74

Balance at Shrawan 1 - - -

Provisions made during the year - - -

Provisions used during the year - - -

Provisions reversed during the year - - -

Unwind of discount - - -

Balance at Ashad end - - -

Other Liabilities 4.23

Particulars 2075-76 2074-75 2073-74

Liabilities for emloyees defi ned benefi t obligations - 41,916,304 29,165,251

Liabilities for leave - 38,315,180 25,690,008

Short term employee benefi ts 767,925 1,123,815 769,049

Bills payable 674,863 760,168 3,071,447

Creditors and accruals 4,324,815 5,589,220 5,692,503

Interest payable on deposits 120,814,734 130,151,695 72,046,827

Interest payable on borrowing - - -

Liabilities on defered grant income - - -

Unpaid Dividend 1,050,791 1,058,557 1,060,718

Liabilities under Finance Lease 16,544,197 11,870,443 7,347,048

Employee bonus payable 88,143,358 59,311,290 62,269,166

Other Liabilities 124,199,239 63,014,290 94,180,476

- Audit Fee Payable 1,596,088 1,130,000 678,000

- TDS Payable 41,345,064 30,775,638 22,615,226

- Social Welfare Fund 37,041,610 6,075,867 15,237,820

- Amount Received for Earthquake Relief 30,350,000 15,300,599 45,800,000

- Others 13,866,477 9,732,186 9,849,430

Total 356,519,924 353,110,962 301,292,494


Notes to Financial StatementsFor the year ended 31 Ashad 20764.23.1. Defi ned Benefi t Obligation

The amounts recognised in the statements of fi nancials positions are as follows :

Particulars 2075-76 2074-75 2073-74

Present value of unfunded obligations 53,782,097 41,916,304 29,165,251

Present value of funded obligations - - -

Total present value of obligations 53,782,097 41,916,304 29,165,251

Fair value of plan assets 53,782,097 - -

Present value of net obligations - 41,916,304 29,165,251

Recognised liability for defi ned benefi t obligations - 41,916,304 29,165,251

4.23.2: Plan Assets

Plan assets comprise

Particulars 2075-76 2074-75 2073-74

Equity securities - - -

Government bonds - - -

Bank deposit - - -

Other 53,782,097 - -

Total 53,782,097 - -

4.23.3: Movement in the present value of defi ned benefi t obligations

Particulars 2075-76 2074-75 2073-74

Defi ned benefi t obligations at Shrawan 1 41,916,304 29,165,251 16,155,096

Actuarial losses - - -

Benefi ts paid by the plan - (1,049,347) -

Benefi t directly paid by bank (2,592,113)

Current service costs; Past Service Cost and interest 14,457,906 13,800,400 13,010,155

Defi ned benefi t obligations at Ashad end 53,782,097 41,916,304 29,165,251

4.23.4: Movement in the fair value of plan assets

Particulars 2075-76 2074-75 2073-74

Fair value of plan assets at Shrawan 1 - -

Contributions paid into the plan 53,782,097 1,049,347 -

Benefi ts paid during the year - (1,049,347) -

Actuarial (losses) gains - - -

Expected return on plan assets - - -

Fair value of plan assets at Ashad end 53,782,097 - -


Notes to Financial StatementsFor the year ended 31 Ashad 20764.23.5: Amount recognised in profi t or loss

Particulars 2075/76 2074/75 2073/74

Current service costs 14,457,906 13,800,400 13,010,155

Past service costs-(non Vested) - - -

Past service costs (Vested) - - -

Interest on obligation - - -

Expected return on plan assets - - -

Total 14,457,906 13,800,400 13,010,155

4.23.6: Amount recognised in other comprehensive income

Particulars 2075/76 2074/75 2073/74

Acturial (gain)/loss - - -

Total - - -

4.23.7: Actuarial assumptions

Particulars 2075/76 2074/75 2073/74

Discount rate

Expected return on plan asset

Future salary increase

Withdrawal rate - - -

Debt secutities issued 4.24

Particulars 2075-76 2074-75 2073-74

Debt securities issued designated as at fair value through profi t or loss - - -

Debt securities issued at amortised cost - - -

Total - - -

Subordinate Liabilities 4.25

Particulars 2075-76 2074-75 2073-74

Redeemable preference shares - - -

Irredemable cumulative preference shares (liabilities component)

Other

Total - - -


Notes to Financial StatementsFor the year ended 31 Ashad 2076Share Capital 4.26

Particulars 2075-76 2074-75 2073-74

Ordinary Shares 2,515,235,600 2,515,235,600 1,643,944,800

Convertible Preference Shares (Equity component) - - -

Irredemable Preference Shares (Equity component) - - -

Perpetual debt (Equity component only) - - -

Calls in Advance - - 234,752,187

Total 2,515,235,600 2,515,235,600 1,878,696,987

4.26.1 Share capital detail

Particulars 2075-76 2074-75 2073-74

Authorised capital

30,000,000 Ordinary Share of Rs. 100 each 3,000,000,000 3,000,000,000 3,000,000,000

Issued Capital

16,439,448 Ordinary Share of Rs. 100 each (FY 2073-74) 1,643,944,800

25,152,356 Ordinary Share of Rs. 100 each(FY 2074-75) 2,515,235,600


Suscribed and paid up capital

16,439,448 Ordinary Share of Rs. 100 each (FY 2073-74) 1,643,944,800



Total 2,515,235,600 2,515,235,600 1,643,944,800

4.26.2 Ordinary Share Ownership

Particulars

2075-76 2074-75 2073-74

% of holding Amount % of holding Amount % of holding Amount

Domestic ownership 100.00% 25,152,356.00 100.00% 25,152,356 100.00% 1,643,944,800

Nepal Government

"A" Class licenced institutions

Other Licenced institutions

Other institutions & individuals

Public 49.00% 12,324,641 49.00% 12,324,641 49.00% 805,532,952

Other 51.00% 12,827,715 51.00% 12,827,715 51.00% 838,411,848

Foreign Ownership

Total 100.00% 25,152,356 100.00% 25,152,356 100.00% 1,643,944,800


Notes to Financial StatementsFor the year ended 31 Ashad 2076Reserves 4.27

Particulars 2075-76 2074-75 2073-74

Statutory general reserve 543,946,962 436,857,410 362,106,410

Exchange equilisation reserve 27,461 27,461 1,284

Corporate social responsibility Fund 7,318,175 5,198,837 3,943,935

Capital redemption reserve

Regulatory reserve 226,144,947 - -

Investment adjustment reserve 1,500,000 2,521,463 759,923

Capital reserve

Assets revaluation reserve - - -

Fair value reserve (18,054,599) (11,706,133) 78,961,488

Dividend equalisation reserve

Actuarial gain - - -

Special reserve

Deferred Tax Reserve - 34,608,911 15,794,522

Staff Training Reserve 1,272,835 897,276 592,843

Other reserve

Total 762,155,780 468,405,224 462,160,406

Particulars As at 31 Ashad 2076

Accrued Interest on Loans and Advances recognized as Income 176,451,580

Provision of Non - Banking Assets 571,506

Deferred Tax Assets 18,073,481

Fair value adjustment of Equity Shares 31,048,379

Total 226,144,947

Corporate Social Responsibility Fund 2075-76 NPR

A. Net profi t for FY 2075/76 535,447,757

B. 1% of net profi t appropriated to CSR fund 5,354,478

C. Opening CSR fund 5,198,837

D. CSR expense incurred for FY 2075/76 3,235,139

E. Closing CSR Reserve FY 2075/76 (B+C-D) 7,318,175

F. Net Movement (E-C) 2,119,338

Staff Training Reserve 2075-76 NPR

A. Staff Expenses of FY 2074/75 186,552,805

B. 3% of the above to be expensed in FY 2075/76 5,596,584

C. Training Expenses for FY 2075/76 5,221,026

D. Excess/(Shortfall) (C-B) (375,558)

E. Opening Staff Training Reserve 897,276

F. Closing Staff Training Reserve 1,272,835

Regulatory reserve includes the amount that is allocated from profi t or retained earnings fo the bank as per directive of NRB for the purpose of implementation of NFRS and which shall not be regarded as free for distribution of dividend (cash as well as bonus shares). The amount allocated to this reserve includes the following adjustments as per NFRS:

Besides, movement in Corporate Social Responsibility Fund and staff Training Reserve are given below:


Notes to Financial StatementsFor the year ended 31 Ashad 2076Contingent liabilities and commitments 4.28

Particulars 2075-76 2074-75 2073-74

Contingent liabilities 94,550,026 46,011,526 27,876,678

Undrawn and undisbursed facilities 311,450,115 499,643,200 497,681,830

Capital commitment - - -

Lease Commitment - - -

Litigation 5,043,705 5,043,705 5,043,705

Total 411,043,846 550,698,431 530,602,213

4.28.2: Undrawn and undisbursed facilities

Particulars 2075-76 2074-75 2073-74

Undisbursed amount of loans - - -

Undrawn limits of overdrast s 311,450,115 499,643,200 497,681,830

Undrawn limits of credit cards - - -

Undrawn limits of letter of credit - - -

Undrawn limits of guarantee - - -

Total 311,450,115 499,643,200 497,681,830

4.28.1: Contingent Liabilities

Particulars 2075-76 2074-75 2073-74

Acceptance and documentary credit - - -

Bills for collection - - -

Forward exchange contracts - - -

Guarantees 94,550,026 46,011,526 27,876,678

Underwriting commitment - - -

Other commitments - - -

Total 94,550,026 46,011,526 27,876,678


Notes to Financial StatementsFor the year ended 31 Ashad 20764.28.3: Capital commitments

Capital expenditure approved by relevant authority of the bank but provision has not been made in fi nancial statements

Particulars 2075-76 2074-75 2073-74

Capital commitments in relation to Property and Equipment - - -

Approved and contracted for - - -

Approved but not contracted for - - -

Sub total - - -

Capital commitments in relation to Intangible assets - - -

Approved and contracted for - - -

Approved but not contracted for - - -

Sub total - - -

Total - - -

4.28.4: Lease commitments

Particulars 2075-76 2074-75 2073-74

Operating lease commitments

"Future minimum lease payments under non cancellable operating lease, where the bank is lessee"

- - -

Not later than 1 year - - -

Later than 1 year but not later than 5 years - - -

Later than 5 years - - -

Sub total - - -

Finance lease commitments - - -

Future minimum lease payments under non cancellable operating lease, where the bank is lessee

Not later than 1 year - - -

Later than 1 year but not later than 5 years - - -

Later than 5 years - - -

Sub total - - -

Grand total - - -


Notes to Financial StatementsFor the year ended 31 Ashad 20764.28.5: Litigation

Particulars 2075-76 2074-75 2073-74

Contingent Tax Liabilities(Income Tax) 5,043,705 5,043,705 5,043,705

Interest Income 4.29

Particulars 2075-76 2074-75


Due from Nepal Rastra Bank

Placement with bank and fi nancial institutions - -

Loan and advances to bank and fi nancial institutions 45,589,623 3,898,614

Loans and advances to customers 3,004,690,589 2,233,136,151

Investment securities 27,432,663 27,586,007

Loan and advances to staff 1,157,915 1,060,011

Other Interest Income

Total interest income 3,313,657,484 2,436,258,999

Interest Expense 4.30


Due to bank and fi nancial institutions 242,447,005 137,513,121

Due to Nepal Rastra Bank 7,762,959 3,892,337

Deposits from customers 1,837,714,064 1,421,989,570

Borrowing - -

Debt securities issued - -

Subordinated liabilities - -

Other Charges - -

Total Interest expense 2,087,924,029 1,563,395,029


Notes to Financial StatementsFor the year ended 31 Ashad 2076Fees and commission income 4.31


Loan administration fees - -

Service fees 166,552,077 129,471,699

Consortium fees

Commitment fees

DD/TT/Swist fees - -

Credit card/ATM issuance and renewal fees 26,202,921 17,585,344

Renewal fees

Prepayment and swap fees

Investment banking fees

Asset management fees

Brokerage fees

Remittance fees 9,043,811 11,219,321

Commission on letter of credit - -

Commission on guarantee contracts issued - -

Commission on share underwriting/issue

Locker rental 608,625 678,425

Other fees and commision income - 14,933,718

Total Fees and Commission Income 202,407,434 173,888,506

Fees and commission Expense 4.32


ATM management fees 8,077,098 2,501,364

VISA/Master card fees

Guarantee commission

Brokerage

DD/TT/Swist fees.

Remittance fees and commission 37,244 42,722

Other fees and commission expense 100,145 233,585

Other commission and Fees 100,145 233,585

CIC Fees - -

Deposit Premium - -

Other Charges

Total Fees and Commission Expense 8,214,487 2,777,672

Net Trading Income 4.33


Changes in fair value of trading assets - -

Gain/loss on disposal of trading assets - -

Interest income on trading assets - -

Dividend income on trading assets - -

Gain/loss foreign exchange transation 3,735,696 127,734

Other - -

Net Trading Income 3,735,696 127,734


Notes to Financial StatementsFor the year ended 31 Ashad 2076Other Operating Income 4.34


Foreign exchange revauation gain (3,719,677) 104,709

Gain/loss on sale of investment securities - -

Fair value gain/loss on investment properties

Dividend on equity instruments 4,740,551 9,019,825

Gain/loss on sale of property and equipment 12,235 60,488

Gain/loss on sale of investment property

Operating lease income

Gain/loss on sale of gold and silver

Other Operating Income

Share of Income of Associates - -

Total 1,033,110 9,185,022

Impairment charge/(reversal) for loan and other losses 4.35


Impairment charge/(reversal) on loan and advances to BFIs 4,497,596 900,000

Impairment charge/(reversal) on loan and advances to customers 177,707,937 45,999,435

Impairment charge/(reversal) on fi nancial Investment - -

Impairment charge/(reversal) on placement with BFIs

Impairment charge/(reversal) on property and equipment

Impairment charge/(reversal) on goodwill and intangible assets

Impairment charge/(reversal) on investment properties - -

Impairment charge/(reversal) on Other Assets - -

Total 182,205,533 46,899,435

Personal Expenses 4.36


Salary 104,175,966 85,129,194

Allowances 74,256,633 50,381,103

Gratuity Expense 14,457,906 13,800,400

Provident Fund 8,176,230 6,850,668

Uniform 4,359,929 4,165,216

Training & development expense 5,221,026 3,198,370

Leave encashment 12,534,908 18,962,958

Medical - -

Insurance 1,970,955 1,366,473

Employees incentive 2,060,753 2,698,424

Cash-settled share-based payments - -

Pension expense - -

Finance expense under NFRS 1,157,915 1,060,011

Other expenses related to staff - -

Subtotal 228,372,223 187,612,817

Employees bonus 80,020,661 59,311,290

Grand Total 308,392,884 246,924,107


Notes to Financial StatementsFor the year ended 31 Ashad 2076Other Operating Expenses 4.37


Directors' fee 714,500 536,000

Directors' expense 159,044 172,078

Auditors' remuneration 4,214,075 2,293,900

Other audit related expense 873,973 892,855

Professional and legal expense 137,000 149,360

Offi ce administration expense (4.37 A) 55,168,646 59,411,631

Operating Lease expense (4.37 B) 86,068,216 66,366,921

Operating expense of investment properties - -

Corporate social responsibility expense 3,255,039 2,522,504

Onerous lease provisions - -

Other Expenses 5,903,643 4,620,876

Repair & Maintenance Building 168,311 192,573

Repair & Maintenance Vehicle 1,175,829 983,866

Repair & Maintenance Others 2,960,992 1,985,818

Repair & Maint. Offi ce Equipment & Furniture 1,174,473 779,267

Share Issue Expenses 306,963 406,456

Director's Education Program 117,075 272,897

Techinical Fees - -

Total 156,494,137 136,966,125

Offi ce Administration Expenses 4.37 A


Insurance 12,083,045 12,308,291

Postage, Telephone, 3,983,614 3,816,205

Printing & Stationery 7,537,994 11,234,584

Newspaper & Periodicals 443,030 260,700

Advertisements 7,351,695 7,341,673

Travelling Expenses 1,487,608 1,932,786

Fuel Expenses 3,620,899 3,179,282

Entertainment 2,830,472 2,216,880

AGM Expenses - 914,616

Annual Fee 93,464 43,042

Offi ce Expenses 940,417 5,017,520

Offi ce Inaugration Expenses 17,500 2,832,431

Clearing Expenses 852,262 854,467

Goods Carriage Expenses 303,360 1,006,663

Merger Expenses 1,439,429 -

Other Committee Meeting Allowance 541,169 119,054

Registration Charges 4,355,257 1,846,191

Internet & Cable Expenses 4,726,887 4,487,246

Miscelleneous Expenses 2,560,544 -

Total 55,168,646 59,411,631


Notes to Financial StatementsFor the year ended 31 Ashad 2076Operating Lease Expenses 4.37 B


House Rent Expenses 44,047,442 37,794,004

Electricity Expenses 9,323,715 6,937,302

Security Expenses 32,697,059 21,635,616

Total 86,068,216 66,366,921

Depreciation and Amortisation 4.38


Depreciation on property and equipment 41,368,619 35,386,492

Depreciation on investment property - -

Amortisation of intangible assets 16,068,079 9,902,832

Total 57,436,698 45,289,324

Non Operating Income 4.39


Recovery of Loan written off - -

Other Income 19,993 12,400

Total 19,993 12,400

Non Operating expense 4.40


Loan written off - -

Redundancy provision

Expense of restructuring

Other expense.

Total - -


Notes to Financial StatementsFor the year ended 31 Ashad 2076Income Tax Expenses 4.41


Current Tax Expenses 205,466,362 178,440,863

Current Year 205,466,362 179,648,311

Adjustment for Prior Years - (1,207,448)

Deferred tax Expenses (20,728,170) 4,452,178

Origination and Reversal of Temporary Diff erences (20,728,170) 4,452,178

Change in tax Rate

Recognition of Previously unrecognized Tax Losses - -

Total Income tax expense 184,738,192 182,893,041

4.41.1: Reconciliation of Tax Expenses and Accounting Profi t


Profi t Before Tax 720,185,949 577,220,969

Tax Amount at the Rate of 30% 216,055,785 173,166,291

Add: Tax Eff ect of the expenses that are not deductible for tax purpose 2,429,074 20,219,555

Less: Tax Eff ect on Exempt Income (504,365) (291,588)

Add/Less: Tax Eff ect on other Items (12,514,133) (14,653,395)

Total Income Tax Expenses 205,466,362 178,440,863

Eff ective Tax Rate 28.53% 30.91%



Rs. in '000'

Condensed Statement of Financial PositionThis Quarter Ending Immediate Previous Year

EndingAssets


Due from Nepal Rastra Bank 1,148,398 1,122,470

Placement with Bank and Financial Institutions - -

Derivative fi nancial instruments - -

Other trading assets - -

Loan and advances to B/FIs - -

Loans and advances to customers 23,019,777 18,311,162

Investment securities 942,961 854,763

Current tax assets 23,466 -

Investment in susidiaries - -

Investment in associates - -

Investment property - -

Property and equipment 184,188 211,159

Goodwill and Intangible assets 4,385 6,213

Deferred tax assets 1,125 -

Other assets 91,154 47,551

Total Assets 29,989,050 25,160,073

Liabilities

Due to Bank and Financial Instituions 3,460,358 599,113

Due to Nepal Rastra Bank - -

Derivative fi nancial instruments - -

Deposits from customers 21,938,791 20,856,079

Borrowing 250,000 -

Current Tax Liabilities - 13,522

Provisions - -

Deferred tax liabilities - 7,696

Other liabilities 400,349 353,111

Debt securities issued - -

Subordinated Liabilities - -

Total liabilities 26,049,498 21,829,521

Equity - -

Share capital 2,515,236 2,515,236

Share premium 28,615 28,615

Retained earnings 712,297 256,830

Reserves 683,405 529,872

Total equity attributable to equity holders 3,939,552 3,330,552


Total equity 3,939,552 3,330,552

Total liabilities and equity 29,989,050 25,160,073



Rs. in '000'

Condensed Statement of Profi t or Loss Up to this Quarter Up to Corrosponding Previous Year Quarter

Interest income 3,313,114 2,436,887

Interest expense (2,087,924) (1,563,395)

Net interest income 1,225,190 873,492

Fees and Commission Income 203,942 173,889

Fees and commission expense 8,214 2,778

Net fee and commission income 195,728 171,111

Net interest, fee and commission income 1,420,918 1,044,603

Net trading income 3,736 128

Other operating income 1,033 9,185

Total operating income 1,425,687 1,053,916

Impairment charge/(reversal) for loans and other losses 98,315 46,899

Net operating income 1,327,372 1,007,016

Operating expense - -

Personnel expenses 316,879 246,924

Other operating expenses 156,494 136,966

Depreciation & Amortisation 57,437 45,289

Operating Profi t 796,562 577,837

Non operating income 10 12

Non operating expense - -

Profi t before income tax 796,572 577,849

Income tax expense 197,035 183,081

Current Tax 210,439 178,441

Deferred Tax expense/(Income) (13,404) 4,641

Profi t for the period 599,537 394,768

Condensed Consolidated Statement of Comprehensive Income

Profi t/Loss for the period 599,537 394,768

Other Comprehensive lncome 10,695 (90,614)

Total Comprehensive lncome 610,232 304,154

Statement showing Net Profi t a� er Regulatory Adjustments:

Net Profi t for the period ended 31 Asadh 2076 599,537

Profi t required to be appropriated to statutory reserve (134,479)

Profi t required to be transfer to Regulatory Reserve (7,681)

Net Profi t for the period ended 31 Asar 2076 available for distribution 457,377



Ratios Upto This Quarter (YTD)

Up to Corrosponding Previous Year Quarter

Capital fund to RWA 15.47% 18.55%

Non performing loan (NPL) to toal loan 0.64% 0.52%

Total loan loss provision to Total NPL 245.39% 240.14%

Cost of Funds (YTD) 8.96% 9.41%

CCD Ratio 78.75% 74.13%

Base Rate 11.19% 12.62%

Average Interest Spread (Calculated as per NRB Directives)- Last Month of Quarter 4.93% 4.97%


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076



1. General Information

Om Development Bank Limited, herein ast er referred to as “the Bank” or “ODBL” was established ast er the merger of “City Development Bank Limited” with “Om Finance Limited”. It was further merged with Manaslu Development Bank Limited on 2074/03/02. ODBL is incorporated under the Companies Act, 2063 having registration number 1013/064-065 on 2064/04/15 to engage in fi nancial business and obtained license of operation as national level “B” Class fi nancial institution from Nepal Rastra Bank on 2074/3/6 (License No: “Kha”/54/064/065). Permanent Account Number was obtained on 2064/04/15 (PAN No 302647707) from Inland Revenue Department. The Registered offi ce of ODBL is situated at Gandaki Zone, Kaski District, Pokhara Metropolitan City Ward no.4, Chipledhunga.

ODBL has fi st y three (53) branches including head offi ce. The Bank is providing banking services with 53 branches and 19 ATMs. The Bank is listed at the Nepal Stock Exchange, Kathmandu, Nepal.

The Bank has now been acquired by NMB Bank Limited and joint operation has started from 2076/06/11.

2. Basis of Preparation

2.1 Statement of Compliance

The fi nancial statements have been prepared in accordance with Nepal Financial Reporting Standards (NFRS) issued by the Accounting Standards Board of Nepal on 13th September 2013.

NFRS conform, in all material respect, to International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

2.2 Reporting Period and Approval of fi nancial statement

The Bank follows the Nepalese fi nancial year based on the Nepalese calendar.

The accompanied fi nancial statements have been approved by the Board of Directors on its meeting held on 26 November 2019 and have been recommended for adoption by shareholders in the Annual General Meeting.

2.3 Functional and Presentation currency

Financial statements are denominated in Nepalese Rupees, which is the functional and presentation currency of the Bank.

2.4 Use of Estimates, assumption and judgments

The Bank, under NFRS, is required to apply accounting policies to most appropriately suit its circumstances and operating environment. Further, the Bank is required to make judgement in respect of items where the choice of specifi c policy, accounting estimate or assumption to be followed could materially aff ect the fi nancial statements. Later on this may be determined that a diff erent choice could have been more appropriate.



NFRS requires the Bank to make estimates and assumptions that will aff ect the assets, liabilities, disclosure of contingent assets and liabilities, and profi t or loss as reported in the fi nancial statements.

The Bank applies estimates in preparing and presenting the fi nancial statements. The estimates and underlying assumptions are reviewed periodically. Revision to accounting estimates are recognised in the period in which the estimates is revised, and are applied prospectively.

Disclosures of the accounting estimates have been included in the relevant section of the notes wherever the estimates have been applied along with the nature and eff ect of changes of accounting estimates, if any.

2.5 Changes in Accounting policies

The bank has adopted Nepal Financial Reporting Standard with certain ICAN Carve Outs as described in Notes. The application year for change in policy is:

Relevant Financial Statement

Nepalese Calendar

English Calendar

Opening NFRS SFP date 1 Shrawan 2074 16 July 2017

Comparative SFP Date

31 Ashad 2074 and 32 Ashad 2075

15 July 2017 and 16 July 2018

Comparative reporting period

1 Shrawan 2074- 32 Ashad 2075

16 July 2017 -16 July 2018

First NFRS SFP Date 31 Ashad 2076 16 July 2019

First NFRS reporting period

1 Shrawan 2075- 31 Ashad 2076

17 July 2018- 16 July 2019

2.6 New standards in issue but not yet eff ective

The standards and interpretations that are issued, but not yet eff ective, upto the date of issuance of the Bank’s fi nancial statements are disclosed below. The Bank intends to adopt these standards, if applicable, when they become eff ective.

IFRS 9 – Financial Instruments

IFRS 9 – Financial Instruments having expected credit loss model has been issued and eff ective from 1st January 2018 internationally but is not yet pronounced by The Institute of Chartered Accountants of Nepal (ICAN). For the reporting of fi nancial instruments, NAS 32 Financial Instruments, Presentation, NAS 39 Financial Instruments Recognition and Measurements and NFRS 7 Financial Instruments – Disclosures have been applied.

A number of new standards and amendments to the existing standards and interpretations have been issued by IASB ast er the pronouncements of NFRS with varying eff ective dates. Those become applicable when ASB Nepal incorporates them within NFRS.

A signifi cant impact on classifi cation and measurement including impairment of fi nancial instruments, will arise as a result of application of IFRS 9.

2.7 New Standards and Interpretation not adopted

Although IFRS 9 is applicable internationally from 1st of January 2018, it has not been applied as it is yet to be adopted by ICAN.



Further the Institute of Chartered Accountants of Nepal (ICAN) has provided carve out on various standards with diff erent time frame; some of which are compulsory and others optional for banks and fi nancial institutions. The list of carve-out and its compliance status while preparation of fi nancial statement of the bank is as given below;

NFRS 10 : Consolidated Financial Statements-Preparation of consolidated fi nancial statement using uniform accounting policies is necessary unless it is impracticable to do so- Optional-up to FY 2019-20-This carve out has no implication to the Bank as it does not have any subsidiaries.

NAS 28 : Investments in Associates and Joint Ventures

Accounting for Investment in Associates as per equity method using uniform accounting policies Optional-up to FY 2019-20-Not applicable

NAS 34 : Interim Financial Reporting

Impracticable to restate the corresponding previous interim period information-Optional-up to FY 2018-19-The Bank has utilized this carve out.

NAS 39: Financial Instruments: Recognition and Measurement- Incurred Loss Model to measure the Impairment Loss on Loan and Advances or impairment provision as per Nepal Rastra Bank (NRB) directive whichever is higher- compulsory-up to FY 2019-20. The Bank loans and advances are greater as per NRB Directive as compared to NFRS. Therefore, loans and advances are impaired as per NRB Directive.

NAS 39: Financial Instruments: Recognition and Measurement-Impracticability to determine transaction cost of all previous years which is the part of eff ective interest rate-Optional-up to FY 2018-19-TheBankhas utilized this carve out.

NAS 39 : Financial Instruments: Recognition and Measurement- Impracticability to determine interest income on amortized cost Optional-up to FY 2019-20-The Bank has utilized this carve out.

2.8 Discounting

Discounting has been applied where assets and liabilities are non-current and the impact of the discounting is material.

2.9 Limitation of NFRS implementation

If the information is not available and the cost to develop would exceed the benefi t derived, such exception to NFRS implementation has been noted and disclosed in respective section.

3. Signifi cant Accounting Policies The principal accounting policies applied in the

preparation of these fi nancial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

3.1 Basis of Measurement

The fi nancial statements have been prepared on a historical cost basis, except for available –for-sale investments, assets held for sale and discontinued



operations, other fi nancial assets and liabilities held for trading and fi nancial assets and liabilities designated at fair value through profi t or loss (FVTPL), all of which have been measured at fair value.

The fi nancial statements have been prepared on a going concern basis where the accounting policies and judgements as required by the standards are consistently used and in case of deviations disclosed specifi cally.

However, the bank has merged with NMB Bank Ltd. and have started joint operation on 11 Ashwin 2076.

3.2 Basis of Consolidation

The Bank does not have control over any other entity for consolidation of Financial Statements. Investments in Shares made by the Bank are fi nancial investments and have been described under 4.8 in Notes.

3.3 Cash and Cash Equivalent

The fair value of cash is the carrying amount. Cash and cash equivalent represent the amount of cash in hand, balances with other bank and fi nancial institutions, money at short notice and highly liquid fi nancial assets with original maturities of three months or less from the acquisition date that are subject to an insignifi cant risk of changes in their value and used by the Bank in the management of short-term commitment.

3.4 Financial Assets and Financial Liabilities

3.4.1 Recognition

Financial assets and liabilities, with the exception of loans and advances to customers and balances due to customers, are initially recognised on the trade date i.e. the date that the Bank becomes a party to the contractual provisions of the instrument. This includes regular way trades: purchases or sales of fi nancial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place. Loans and advances to customers are recognised when funds are transferred to the customers’ account at fair value inclusive of transaction costs. The Bank recognises due to customer balances when funds reach the bank.

3.4.2 Classifi cation

The Bank classifi es its fi nancial assets into the following measurement categories:

Financial assets and liabilities held for trading

The Bank classifi es fi nancial assets or fi nancial liabilities as held for trading when they have been purchased or issued primarily for short term profi t making through trading activities or form part of a portfolio of fi nancial instruments that are managed together for which there is evidence of a recent pattern of short-term profi t taking. Included in this classifi cation are Government bonds, NRB Bonds, Domestic Corporate bonds, Treasury bills, Equities etc. held primarily for the trading purpose.



Financial assets and fi nancial liabilities designated at fair value through profi t or loss

Financial assets and fi nancial liabilities classifi ed in this category are those that have been designated by management upon initial recognition. Management may only designate an instrument at FVTPL upon initial recognition when one of the following criteria are met, and designation is determined on an instrument-by-instrument basis:

• The designation eliminates, or signifi cantly reduces, the inconsistent treatment that would otherwise arise from measuring the assets or liabilities or recognising gains or losses on them on a diff erent basis

Or

• The assets and liabilities are part of a group of fi nancial assets, fi nancial liabilities, or both, which are managed, and their performance evaluated on a fair value basis, in accordance with a documented risk management or investment strategy

Or

• The fi nancial instrument contains one or more embedded derivatives, unless they do not signifi cantly modify the cash fl ows that would otherwise be required by the contract, or it is clear with little or no analysis when a similar instrument is fi rst considered that separation of the embedded derivative(s) is prohibited.

Loans and receivables to Customers

Ast er initial measurement, loans and advances to customers are subsequently measured at amortisation over the period of loan. This practice

is almost nearer to the eff ective interest method prescribed by NFRS. The method has been adopted as the cost for computation for interest on eff ective interest method is huge in terms of benefi ts to be received from the computation in the short run.

Held-to-maturity

Held-to-maturity assets are non-derivative fi nancial assets with fi xed or determinable payments and fi xed maturities that the Bank’s management has the intention and ability to hold to maturity.

Available-for-sale.

Available-for-sale assets are those non-derivative fi nancial assets intended to be held for an indefi nite period of time, which may be sold in response to liquidity requirements or changes in interest rates, exchange rates, commodity prices or equity prices.

Financial liabilities held at amortised cost

Financial liabilities not classifi ed held at fair value through profi t or loss includes borrowings which are classifi ed as amortised cost instruments.

3.4.3 Measurement

Initial measurement

All fi nancial instruments are initially recognised at fair value plus transaction cost except in the case of fi nancial assets and fi nancial liabilities recorded at fair value through profi t or loss.

Subsequent measurement

Financial assets and liabilities designated at fair value through profi t or loss are subsequently carried at fair



value, with gains and losses arising from changes in fair value taken directly to the statement of profi t or loss. Interest and dividend income or expense is recorded in revenue according to the terms of the contract, or when the right to payment has been established.

Available-for-sale fi nancial assets are subsequently carried at fair value, with gains and losses arising from changes in fair value taken to Other Comprehensive Income. The Bank makes irrevocable election to route fair value changes through Other Comprehensive Income. Gain/Loss on equity instruments classifi ed as fair value through other comprehensive income is charged directly to equity and impact of re-measurement is shown in OCI.

Loans and receivables and held-to-maturity fi nancial assets are subsequently measured at amortised cost. Within this category loans and advances to the customers have been recognised at amortised cost using the method that very closely approximates eff ective interest rate method. The losses arising from impairment of such investments are recognised in the income statement within credit loss expense. If the Bank were to sell or reclassify more than an insignifi cant amount of held-to-maturity investments before maturity (other than in certain specifi c circumstances), the entire category would be tainted and would have to be reclassifi ed as available-for-sale.

Financial liabilities are subsequently measured at amortised cost, with any diff erence between proceeds net of directly attributable transaction costs and the redemption value recognised in the statement of profi t or loss over the period of the borrowings using the eff ective interest method.

3.4.4 Derecognition

Financial assets are derecognised when the rights to receive cash fl ows from the assets have expired or where the Bank has transferred substantially all risks and rewards of ownership. If substantially all the risks and rewards have been neither retained nor transferred and the Bank has retained control, the assets continue to be recognised to the extent of the Bank’s continuing involvement.

Financial liabilities are derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing fi nancial liability is replaced by another from the same lender on substantially diff erent terms, or the terms of an existing liability are substantially modifi ed, such an exchange or modifi cation is treated as a derecognition of the original liability and the recognition of a new liability. The diff erence between the carrying value of the original fi nancial liability and the consideration paid is recognised in profi t or loss.

3.4.5 Determination of Fair Value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The determination of fair value has been done as per the framework laid down in NFRS 13 ‘Fair Value Measurement’.

3.4.6 Valuation Hierarchy

Assets and liabilities carried at fair value or for which fair values are disclosed have been classifi ed into three levels according to the observability of the signifi cant inputs used to determine the fair values. Changes in the observability of signifi cant valuation inputs during the reporting period may



result in a transfer of assets and liabilities within the fair value hierarchy. The determination of fair value has been done in accordance to NFRS 13 ‘Fair Value Measurement. The Bank recognises transfers between levels of the fair value hierarchy when there is a signifi cant change in either its principal market or the level of observability of the inputs to the valuation techniques as at the end of the reporting period.

Level 1 fair value measurements are those derived from unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 valuations are those with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and fi nancial instruments valued using models where all signifi cant inputs are observable.

Level 3 portfolios are those where at least one input, which could have a signifi cant eff ect on the instrument’s valuation, is not based on observable market data.

3.4.7 Impairment of Loans and Advances

The Bank reviews its individually signifi cant loans and advances at each Reporting date to assess whether an impairment loss should be provided in the Statement of Profi t or loss. In particular, the Management’s judgment is required in the estimation of the amount and timing of future cash fl ows when determining the impairment loss. These estimates are based on assumptions about a number of factors and hence actual results may diff er, resulting in future changes to the provisions made.

The individual impairment provision applies to fi nancial assets evaluated individually for impairment

and is based on Management’s best estimate of the present value of the future cash fl ows that are expected to be received. In estimating these cash fl ows, Management makes judgments about a borrower’s fi nancial situation and the net realisable value of any underlying collateral. Each impaired asset is assessed on its merits, and the workout strategy and estimate of cash fl ows considered recoverable.

Individual assessment of impairment of exposures means establishing whether objective evidence of impairment exists, estimation of the present value of future cash fl ows, and calculation of the value of impairment for each individual receivable from the borrower included in this assessment.

The bank has considered all loans and advances above NRs. 15 millions for individual assessment of impairment. The bank determines, for each individual loan to be assessed for individual impairment, whether they expect to collect their receivables from expected future cash fl ows (going concern) or from collateral realization (gone concern). If a bank identifi es objective evidence of impairment, the bank indicates, at single debtor level, the most realistic sources of repayment (collection approach/strategy) based on all available information regarding such borrower’s fi nancial position and performances. The bank assesses whether collection will be made from the borrower`s expected future operating cash fl ows (borrower continues to perform business activities – going concern) or on the basis of collateral enforcement and realization (expectation that the borrower ceases to exist – gone concern). In both cases, bank uses conservative assumptions relating to the estimation of the expected cash fl ows, taking into account current economic conditions and the Bank’s own economic forecasts.



When estimating impairment based on collateral realization, the recoverable amount is the present value of the net infl ow from collateral realization (taking into account the priority of claims), discounted by applying the original eff ective interest rate to the expected time to realization.

A collective impairment provision is established for:

□ Groups of homogeneous loans and advances that are not considered individually signifi cant; and

□ Groups of assets that are individually signifi cant but that were not found to be individually impaired

The collective provision for groups of homogeneous loans is established using statistical methods based on historical loss rate experience, Loss Given Default (LGD) and Probability of Default (PD) computed using the statistical analysis of historical data on delinquency to estimate the amount of loss for each class of portfolio selected on the basis of its product, risk factor, collateral coverage, exposure group etc. Management applies judgment to ensure that the estimate of loss arrived at, on the basis of historical information is appropriately adjusted to refl ect the economic conditions and portfolio factors as at the Reporting date. The loss rates are regularly reviewed against actual loss experience.

In assessing the need for collective impairment, Management considers factors such as credit quality (for example, loan to collateral ratio, level of restructured performing loans), portfolio

Size, concentrations and economic factors.

To estimate the required allowance, assumptions are made to defi ne how inherent losses are modelled and to determine the required input parameters, based on historical experience and current economic conditions. The accuracy of the provision depends on the model assumptions and parameters used in determining the collective provision.

As per the carve-out provided in NAS 39, the bank shall measure impairment loss on loan and advances as the higher of amount derived as per norms prescribed by Nepal Rastra Bank for loan loss provision and amount determined as per paragraph 63 of NAS 39.As stated in 2.7 the bank loans and advances is greater considering the NRB directive as compared to NFRS impairment provisioning. Therefore, provisioning as per NRB directive is applied.



Explanatory Notes

The impairment status as per para 63 of NAS 39 and as per NRB directive are as follows:

Provision as per NFRS

Particulars 2074 2075 2076

Individual 38,085,741 32,239,966 44,347,145

Collective 10,139,150 15,565,066 14,598,380

Total NFRS Provision (A) 48,224,891 47,805,032 58,945,526

Provision as per NRB

Particulars 2074 2075 2076

Good 134,591,597 173,625,533 215,008,369

Watch list 23,712,077 43,652,164 80,976,118

Restructured - 3,842,959 9,149,440

Substandard 18,888,021 14,940,871 24,014,474

Doubtful 9,039,988 4,988,638 15,008,294

Bad 32,976,580 25,057,533 104,156,535

Total NRB Provision (B) 219,208,262 266,107,697 448,313,230

Gap/(Excess) (A)-(B) (170,983,371) (218,302,665) (389,367,704)

3.4.8 Impairment of Non-Financial Assets

The Bank assesses whether there are any indicators of impairment for an asset or a cash generating unit (CGU) at each Reporting date or more frequently, if events or changes in circumstances necessitate to do so. This requires the estimation of the ‘Value in use’ of such individual assets or the CGUs. Estimating ‘Value in use’ requires the Management to make an estimate of the expected future cash fl ows from the asset or the CGU and also to select a suitable discount rate in order to calculate the present value of the relevant cash fl ows. This valuation requires the Bank to make estimates about expected future cash fl ows and discount rates and hence, they are subject to uncertainty.

3.5 Trading Assets

Trading assets are those assets that the bank acquires principally for the purpose of selling in the near term or holds as part of a portfolio that is managed together for short-term profi t shall be presented under this account head. The other trading asset includes non-derivative fi nancial assets. It includes Government bonds, NRB Bonds, Domestic Corporate bonds, Treasury bills, Equities etc. held primarily for the trading purpose.



3.6 Derivatives Assets and Derivative Liabilities

Derivative assets and liabilities (herein referred to as instrument) is a contract whose value changes to the change in agreed-upon underlying fi nancial asset/liability which requires no initial net investment and is settled at future date. Derivative instruments includes transactions like interest rate swap, currency swap, forward foreign exchange contract etc. held for trading as well as risk management purposes. Derivative fi nancial instruments are initially measured at fair value on the contract date and are subsequently re-measured to fair value at each reporting date.

Explanatory Notes

The details regarding the same is given in Schedule 4.4. However, the bank doesn’t have nor deals with derivative fi nancial instruments.

3.7 Property and Equipment

All property and equipment’s are stated at Historical cost. Cost includes expenditure that is directly attributable to the acquisition of the assets.

Subsequent costs are included in the asset’s carrying amount or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefi ts associated with the item will fl ow to the Bank and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profi t or loss during the fi nancial period in which they are incurred.

Freehold land is not depreciated although it is subject to impairment testing. Depreciation on other assets is calculated using the straight- line method to

allocate their cost to their residual values over their estimated useful lives, as follows:

Building 20 years Vehicle 5 Years Furniture(wooden) 5 Years Furniture(other) 10 Years Offi ce Equipment 5 Years Computer Equipment 4 Years Other Assets 5 Years Lease hold assets 10 Years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of fi nancial position date. The value of the assets fully depreciated but continued to be in use is considered not material.

At each reporting date, assets are also assessed for indicators of impairment. In the event that an asset’s carrying amount is determined to be greater than its recoverable amount, the asset is written down immediately to the recoverable amount.

Assets with costs less than NPR 10,000 are charged off on purchase as revenue expenditure.

Gains and losses on disposals are included in the Statement of Profi t or Loss.

3.8 Intangible assets

Acquired Intangible Assets

Intangible assets are initially measured at fair value, which refl ects market expectations of the probability that the future economic benefi ts embodied in the asset will fl ow to the Bank and are amortised on the basis of their expected useful lives.



Computer so� ware

Acquired computer sost ware licences are capitalised on the basis of the costs incurred to acquire and bring to use the specifi c sost ware. Costs associated with the development of sost ware are capitalised where it is probable that it will generate future economic benefi ts in excess of its cost. Computer sost ware costs are amortised over the period of 5 years in Straight Line method (SLM). Costs associated with maintaining sost ware are recognised as an expense as incurred.

At each reporting date, these assets are assessed for indicators of impairment. In the event that an asset’s carrying amount is determined to be greater than its recoverable amount, the asset is written down immediately.

3.9 Investment Property

Land or Land and Building other than those classifi ed as property and equipment and non-current assets held for sale under relevant accounting standard are presented under this account head. Investment properties are measured initially at its cost. Transaction costs are included in the initial measurement. Ast er initial recognition, the Bank chooses the cost model to measure its investment properties in accordance with NAS 16. Non-Banking Assets which are not intended to be sold within a period of next one year is also classifi ed as Investment Property. Non-banking assets taken over the lower of Fair Value or Total amount due from customer as per guidelines issued by the Regulator is continued to be shown at the recorded value till the same is disposed.

Further land which is leased or held for capital appreciation motive is classifi ed as investment property.

Explanatory Notes

The bank does not have any investment property.

3.10 Non-Current Assets held for Sale and Discontinued Operation

Non-banking assets of the bank which are expected to be sold within period of one year is classifi ed as non-current assets held for sale. NBA is recognised at a value lower of total receivable from customer or fair value of property on the date of adoption.

Explanatory Notes

The details of non-current assets held for sale of the bank has been presented under Schedule 4.16.

3.11 Income Tax

3.11.1 Current tax

Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from, or paid to, the taxation authorities of Nepal. The tax rates and tax laws used to compute the amount are those that are enacted, or substantively enacted, by the reporting date in Nepal. The liabilities recognised for the purpose of current Income tax, including fees, penalties are included under this head.



3.11.2 Deferred Tax Assets/Liabilities

Deferred tax is provided in full, using the liability method, on temporary diff erences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated fi nancial statements Deferred income tax is determined using tax rate applicable to the Bank as at the reporting date which is expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised where it is probable that future taxable profi t will be available against which the temporary diff erences can be utilised.

Deferred tax relating to items which are charged or credited directly to equity, is credited or charged directly to equity and is subsequently recognised in the statement of profi t or loss together with the deferred gain or loss.

Explanatory Notes

The details of deferred tax and its working has been presented under Schedule 4.15.

3.12 Deposits, Debt securities issued and subordinate Liabilities

The deposits held by the bank on behalf of its customers are classifi ed as fi nancial liabilities and measured at amortised cost under eff ective interest method. The bank does not have any debt securities issued and subordinated liabilities.

Explanatory Notes

The details of Deposits in given under Schedule 4.20. The bank does not have any debt securities nor subordinate liabilities.

3.13 Provisions

Provisions are recognised in respect of present obligations arising from past events where it is probable that outfl ow of resources will be required to settle the obligations and they can be reliably estimated. Provisions are reviewed at each reporting date and adjusted to refl ect the best estimate

3.14 Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefi ts will fl ow to the Bank and the revenue can be reliably measured. The following specifi c recognition criteria must also be met before revenue is recognised.

3.14.1 Interest Income

Interest Income include interest income on loan and advance, investment securities except on those investment securities measure at fair value through profi t or loss, cash and cash equivalent, due from Nepal Rastra Bank, due from BFIs, loan and advances to staff etc.

Interest income on loans and advances is recognized on amortised principal which is nearer to the eff ective interest method suggested by NFRS. The adoption of eff ective interest method is not possible due to constraints of time, eff ort and cost in short term compared to the benefi ts it provides. Benefi t of carve-out bas been applied to this eff ect. Interest of loans and advances which are signifi cantly impaired are not recognized.

Interest income on government bond, treasury bills and bank balances are recognized under eff ective interest method.



Explanatory Notes

The details of interest income of the bank for the period is presented under Schedule 4.29.

3.14.2 Fees and commissions

Fees and commissions are generally recognised on an accrual basis when the service has been provided or signifi cant act performed. Service Fee Income/Expenses are recognized on accrual basis unless it is impracticable to recognize as allowed through carve-out on NFRS.

3.14.3 Dividend Income

Dividend income is recognised when the Bank’s right to receive the payment is established, which is generally when the shareholders approve the dividend.

3.14.4 Net Trading Income

Net trading income includes all gains and losses from changes in fair value and the related interest income or expense and dividends, for fi nancial assets and fi nancial liabilities held for trading.

3.14.5 Net income from other fi nancial instrument at fair value through Profi t or Loss

Gains and losses arising from changes in the fair value of fi nancial instruments designated at fair value through profi t or loss are included in the statement of profi t or loss in the period in which they arise. Contractual interest income and expense on fi nancial instruments held at fair value through profi t or loss is recognised within net interest income.

3.15 Interest Expense

For all fi nancial instruments measured at amortised cost, interest bearing fi nancial assets classifi ed as available-for-sale and fi nancial instruments designated at FVTPL, interest expense is recorded using the EIR unless it is impracticable.

3.16 Employee Benefi ts

3.16.1 Post- Retirement Benefi ts

The Bank has schemes of retirement benefi ts namely Gratuity, Provident Fund and Medical Allowance.

A) Defi ned Contribution Plan

Provident Fund

For Provident Fund, the bank pays contributions to the publicly administered provident fund plans (named Employee Provident Fund) on a mandatory basis, and such amounts are charged to operating expenses. The bank has no further payment obligations once the contributions have been paid.

B) Defi ned Benefi t Plan

Gratuity

Bank provides for gratuity to entire employee from the date of joining. The plan provides for lump sum payments to employees at retirement or upon death while in employment or on termination of employment for an amount equivalent to defi ned days’ eligible salary payable for each completed years of service. Bank deposits such gratuity amount in Citizen Investment Trust (CIT) in annual basis.



The bank was in process being acquired by NMB Bank Ltd. It has already started joint operation eff ective from 11st Ashwin 2076. Hence, the gratuity liability has been booked in full without actuarial valuation applying conservatism concept.

Explanatory Notes

Gratuity benefi t obligations, plan assets, movement in gratuity liability and fair value of assets etc. related with long term employee benefi ts has been presented under schedule 4.23.

3.16.2 Accumulated Leave

Short Term Benefi t Liability

The Bank provides accumulated leave benefi t under its staff byelaw. The Home Leave is accumulated up to 90 days and there is no limit for the accumulation of Sick Leave.

Accumulated leave benefi ts are treated as short term employment benefi t as allowed by Para 15 of NAS 19. Therefore, the additional expenses on accumulated leave is charged to Profi t and Loss account as on Ashad end 2076.

The bank has no further payment obligations once the contributions have been paid.

3.16.3 Staff Bonus

Provision for bonus has been made at 10% of net profi t before such bonus.

Explanatory Notes

Employee benefi t reported under schedule 4.36 includes provision for bonus as per bonus act.

3.17 Leases

The determination of whether an arrangement is a lease, or contains a lease, is based on the substance of the arrangement and requires an assessment of whether the fulfi lment of the arrangement is dependent on the use of a specifi c asset or assets or whether the arrangement conveys a right to use the asset.

Bank as a lessee

Leases that do not transfer to the Bank substantially all of the risks and benefi ts incidental to ownership of the leased items are operating leases. Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.

Bank as a lessor

Leases where the Bank does not transfer substantially all of the risk and benefi ts of ownership of the asset are classifi ed as operating leases. Rental income is recorded as earned based on the contractual terms of the lease in other operating income.

Explanatory Notes

Operating lease expenses is shown under other operating Lease expenses in schedule 4.37B.

3.18 Foreign Currency Translation

Foreign currency transactions are translated into the NPR using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation at year end exchange rates of monetary assets and liabilities



denominated in foreign currencies are recognised in the profi t or loss, except when recognised in other comprehensive income. Non-monetary assets that are measured at fair value are translated using exchange rate at the date that fair value was determined.

Explanatory Notes

Foreign currency translation gain/loss is presented in schedule 4.34 under other operating income. 25% of such revaluation gain is transferred to foreign exchange fl uctuation fund as per Section 45 of Bank and Financial Institutions Act.

3.19 Financial Guarantee and Loan Commitment

Financial guarantee contracts are contracts that require the bank to reimburse the holder for a loss that it incurs because a specifi ed debtor fails to make payment on a debt instrument. A loan commitment is a fi rm commitment to provide credit under pre-specifi ed terms and conditions in the future. Financial Guarantee contracts and Loan Commitments are measured at the higher of:

the expected credit losses on the exposure; or

the fair value of the instrument at initial recognition (plus transaction costs) less the cumulative amount of revenue recognized on the instrument

Loan commitments will be treated as derivatives if there is a pattern of selling the resultant assets within a short period ast er their origination. Loan commitments in our regular business like Lending,

Trade Finance, Consumer Finance and ALM do not fall in this category, and accordingly will not be treated as derivatives. However, transactions in Loan syndication and underwriting activities may have some of these features.

Explanatory Notes

Details Relating to Financial Guarantee are given in Schedule 4.28.1 in Guarantees under Contingent Liabilities.

The bank does not have any Loan Commitments except undrawn limits of Overdrast s under Schedule 4.28.2.

3.20 Share Capital and Reserves

3.20.1 Share Capital

Financial instruments issues are classifi ed as equity when there is no contractual obligation to transfer cash, other fi nancial assets or issue available number of own equity instruments. Incremental costs directly attributable to the issue of new shares are shown in equity as deduction net of taxes from the proceeds.

Dividends on ordinary shares classifi ed as equity are recognised in equity in the period in which they are declared.

The issue expenses for the issue was charged in the year of issue and though the impact from past of the Bank’s equity the amount has not been adjusted with the share capital and the Bank considered the impact to be immaterial.



3.20.2 Reserves

The reserves include regulatory and free reserves.

Statutory General Reserve

There is a regulatory requirement to set aside 20% of the net profi t ast er Tax to the general reserve until the reserve is twice the paid of share capital. The reserve is the accumulation of setting aside profi ts over the years.

No Dividend (either cash dividend or bonus share) are distributed from the amount in General/ Statutory Reserve.

Assets Revaluation Reserve

Any Reserve created from revaluation of assets (such as Property and Equipment, Intangible Assets, Investment Property) shall be presented under this heading. Revaluation reserves ost en serve as a cushion against unexpected losses but may not be fully available to absorb unexpected losses due to the subsequent deterioration in market value and tax consequences of revaluation. The Bank has followed cost model therefore no assets revaluation reserve is created.

Capital Reserve

The capital reserve represents the amount of those reserves which are in nature of capital and which shall not be available for distribution of cash dividend. The amount from share forfeiture due to non-payment of remaining amount for the unpaid shares, capital grants received in cash or kind, capital reserve arising out of merger and acquisition etc are presented under this heading.

Special Reserve

Any special reserve that is created as per the specifi c requirement of NRB directive or special instruction of NRB are represented as special reserve. The amount allocated to this reserve by debiting retained earning account are presented under this heading.

Corporate Social Responsibility Fund

The fund created for the purpose of corporate social responsibility by allocating 1% of Net profi t as per NRB Directive is presented under this account head.

Investment Adjustment Reserve

It is a regulatory reserve created as a cushion for adverse price movements in Bank’s investments as directed by the Directives of Nepal Rastra Bank. Banks are required to create Investment Adjustment Reserve equal to 2% of Value of investment.

Deferred Tax Reserve

It is banks policy to appropriate the equivalent portion of the deferred tax assets when a net deferred tax asset arises. In event where deferred tax liability arises such amounts are reclassifi ed within the equity to retained earnings.

Exchange Equalization Reserve

A bank or fi nancial institution carrying on foreign exchange business shall make necessary accounts adjustments in the profi t and loss account of the revaluation profi ts earned as a result of fl uctuations in the exchange rates of foreign currencies, other than the Indian currency, at the end of the same fi scal year. While making such accounts adjustment in the profi t and loss account, if revaluation gain has



been made in any fi scal year, at least twenty fi ve per cent of such profi ts shall be credited to the exchange equalization fund as per Section 45 of Bank and Financial Institutions act (2073).

Staff Training Reserve

Bank has regulatory requirement to set aside 3% of the previous year’s staff cost for staff training and any defi cit on such amount are set aside in the reserves.

Regulatory Reserve

The amount that is allocated from profi t or retained earnings of the Bank to this reserve as per the Directive of NRB for the purpose of implementation of NFRS and which shall not be regarded as free for distribution of dividend (cash as well as bonus shares) shall be presented under this account head. The amount allocated to this reserve shall include interest income recognized but not received in cash, diff erence of loan loss provision as per NRB directive and impairment on loan and advance as per NFRS (in case lower impairment is recognized under NFRS), amount equals to deferred tax assets, actual loss recognized in other comprehensive income, amount of goodwill recognized under NFRS etc.

Actuarial Gain/(Loss) Reserve

Actuarial Gain/(Loss) Reserve has been created to record the Actuarial gain or loss occurring due to the change in Actuarial Assumption under NAS 19 as Per NRB Guidelines . Actuarial gain or loss as a result of Change in Gratuity valuations has been included in the Reserve.

Fair Value Reserve

Financial Assets that are not classifi ed as Fair Value through Profi t and Loss, Held To maturity and Loans

and Receivables are categorised as Available for Sale fi nancial instruments and recorded at Fair Value through Other Comprehensive Income. The cumulative amount of changes in fair value of those fi nancial assets is presented as fair value reserve.

Other reserve

Any reserve created with specifi c or non-specifi c purpose (except stated in above) are presented under thus by disclosing accounting heads.

Movement in reserves

Movements in the reserves are given in detail in Statement of Changes in Equity.

Explanatory Notes

Reserves are depicted under Schedule 4.27.

3.21 Earnings per share

The Bank measures earning per share on the basis of the earning attributable to the equity shareholders for the period. The number of shares is taken as the weighted average number of shares for the relevant period as required by NAS 33 - Earnings Per Share.

There are no instruments, such as convertibles, that would require dilution of EPS, therefore diluted EPS has not been computed and disclosed.

3.22 Segmental Reporting

The Bank’s segmental reporting is in accordance with NFRS 8 Operating Segments. Operating segments are reported in a manner consistent with the internal reporting provided to the bank’s management, which is responsible for allocating resources and assessing performance of the operating segments.



All transactions between business segments are conducted on an arm’s length basis, with intra-segment revenue and costs being eliminated in Head Offi ce. Income and expenses directly associated with each segment are included in determining business segment performance.

The Bank has determined segments based on district by the management for decision making purpose.

Explanatory Notes

Operational segmental information has been provided under Disclosures and Additional Information under Schedule 5.4.

3.23 Interim Financial Reporting

Interim reports corresponding to the fi nancial statements had been reported in accordance with the regulatory reporting requirements. Those statements have been published quarterly in national level newspaper. The bank has utilized the benefi ts provided by Carve-out on NFRS for reinstatement of earlier year fi gures.

5. Disclosures and Additional Information

5.1 Risk Management

In compliance with Nepal Rastra Bank Directive on 6 “Corporate Governance”, the Board of bank has established a Risk Management Committee with clear terms of reference. As at the date of this report, the Bank’s Risk Management Committee comprised of the following:

S.N. Members of Risk Management Committee Designation

1 Rajendra Kumar Batajoo Co-ordinator

2 Shree Krishna Regmi Member

3 Madhav Adhikari Member

4 Kiran Paudel Member Secretary

The Committee meets at least four times annually. The committee oversees and reviews the fundamental prudential risks including operational, credit, market, reputational, capital and liquidity risk etc.

The responsibilities of Risk Management Committee are as follows: a. Formulate policies and guidelines for

identifi cation, measurement, monitoring and control all major risk categories.

b. Ensuring the bank has clear, comprehensive and well documented policies and procedure.

c. Defi ning the bank’s overall risk tolerance in relation to credit risk.

d. Ensuring that bank’s signifi cant risks exposure is maintained at prudent levels and consistent with the available capital.

Apart from Board Level Risk Management Committee the other committees and groups as mentioned below supports for Overall Risk Management.

i) Risk Governance

Risk management committee of the bank has formed to review the credit risk, market risk and liquidity risk of the bank. Apart from this the bank has formed the Assets Liability Management Committee to monitor Liquidity risk as well as market risk, AML CFT committee in order to monitor the operational risk. The committee and subcommittee has eff ectively discharged their duties and responsibility.



Risk Management Department conducts periodical fi nancial surveillance and monitoring. In addition to this, the risk management committee analyse the Stress testing of the bank as required by Nepal Rastra Bank and its impact and corrective action to mitigate the risk.

Through its risk management framework, the Bank seeks to effi ciently manage credit, market and liquidity risks which arise directly through the Bank’s commercial activities as well as operational, regulatory and reputational risks which arise as a normal consequence of any business undertaking. As part of this framework, the Bank uses a set of principles that describe its risk management culture. The bank has developed Risk Management Policy, Guideline and Framework 2017 to manage Credit risk, Market risk and liquidity risk.

The major risk areas and mitigation mechanism is as given below;

1) Credit Risk

Credit risk is the potential for loss due to failure of counterparty to meet its obligations to pay the Bank in accordance with agreed terms.

The bank has Credit Policy Guidelines (CPG) that, inter alia, consist of areas of lending, eligibility of borrower, loan application format and requirement, necessary documents for processing loans, risk assessment areas, loan approval authority and other general credit principles. The CPG has been formulated by keeping in mind the prudential norms given by NRB.

A standardized loan application forms has been in use for facilitating collection and analysis of all the relevant data for evaluating credit worthiness and proper evaluation of the credit risk of the prospective

borrower. The factors considered in evaluating loan applications normally included prospects of the business, management of the fi rm/company, fi nancial analysis- income statement, balance sheet, cash fl ow statement, key fi nancial indicators, key risk and mitigates. Further, inspection and supervision are also conducted before approval of the loan for pre-analysis and ast er the disbursement of loan as well for monitoring the utilization of loan.

2) Operational Risk

Operational risk is the prospect of loss of resulting from inadequate or failed procedures, systems or policies, employee errors, system failures, fraud or other criminal activity, any event that disrupts business processes.

Operational risk exposures are managed through a consistent set of management processes that drive risk identifi cation, assessment, control and monitoring. For the control of operational risk of institution, it has Financial Administration Policy, Employee Bylaws, operational manual, AML/CFT policy, Suspicious Transaction identifi cation Procedure, Politically exposed person policy, which guides the day to day operation.

Each risk control owner is responsible for identifying risks that are material and for maintaining an eff ective control environment across the organization. Risk control owners have responsibility for the control of operational risk arising from the management of the following activities: External Rules and Regulations, Liability, Legal Enforceability, Damage or Loss of Physical Assets, Safety and Security, Internal Fraud or Dishonesty, External Fraud, Information Security, Processing Failure, and Model. Operational risks can arise from all business lines and from all activities carried out by the Bank. Operational



Risk management approach seeks to ensure management of operational risk by maintaining a complete process universe defi ned for all business segments, products and functions processes.

3) Market Risk

Risks arising out of adverse movements in interest rates and equity prices are covered under Market Risk Management. Market Risk is the potential for loss of earnings or economic value due to adverse changes in fi nancial market rates or prices. Institution exposure to market risk arises principally from customer driven transactions.

In line with Risk Management Guidelines prescribed by NRB, the Bank focuses on risk management in addition to that Interest rate risk is assessed at a regular interval to strengthen market risk management. The market risk is managed within the risk tolerances and market risk limits set by ALCO. ALCO regularly meets, analyse and takes decision over the Market Risk by analysing the internal as well as external factor.

4) Liquidity Risk

Liquidity risk is the potential that the Bank either does not have suffi cient liquid fi nancial resources available to meet all its obligations as they fall due, or can only access these fi nancial resources at excessive cost. The Liquidity Risk is managed by ALCO. The ALCO has developed the Unifi ed Treasury circular for overall liquidity management of bank.

5) Reputational Risk

Reputational risk is a risk of loss resulting from damages to reputation of institution, in lost revenue; increased operating, capital or regulatory costs; or destruction of shareholder value.

Reputational risk is managed by the management committee which are responsible for protecting the institution’s reputation locally and has the responsibility to ensure that the Bank does not undertake any activities that may cause material damage to the reputation of institution.

6) Employee Benefi t Risk

Employee benefi t risk is the potential risk of loss due to having to meet shortfall in the Bank’s defi ned benefi ts gratuity and leave encashment schemes.

The gross obligation for gratuity is calculated considering the salary at the time of retirement of the individual staff and number of years’ service with the Bank. The home leave can be accumulated for maximum period of 60 days for total period served by individual staff . The gross obligation for leave encashment is calculated considering the last drawn salary multiplied by no of eligible days for leave encashment.

7) Internal Control

The Board is committed to managing risks and in controlling its business and fi nancial activities in a manner which enables it to maximize profi table business opportunities, avoid or reduce risks which can cause loss or reputational damage, ensure compliance with applicable laws and regulations and enhance resilience to external events. To achieve this, the Board has adopted policies and procedures of risk identifi cation, risk evaluation, risk mitigation and control/monitoring.

The eff ectiveness of the Company’s internal control system is reviewed regularly by the Board, its Committees, Management and Internal Audit. The Audit Committee has reviewed the eff ectiveness of the Bank’s system of internal control during the year



and provided feedback to the Board as appropriate. The bank has outsourced the Internal Audit function to maintain independency on the internal control system of institution. The Internal Audit monitors compliance with policies/standards and the eff ectiveness of internal control structures across the Company through its program of business/unit audits. The Internal Audit function is focused on the areas of greatest risk as determined by a risk-based assessment methodology. Internal Audit reports are quarterly forwarded to the Audit Committee. The fi ndings of all audits are reported to the Chief Executive Offi cer and Business Heads for initiating immediate corrective measures.

8) Any Other Risk

Compliance Risk

Compliance risk is the risk of legal or regulatory sanctions, material fi nancial loss, or loss to reputation due to failure to comply with laws, rules and standards.

OMDB is committed to follow best practices and market standards in the areas of accountability, transparency and business ethics. The Development Bank aims at a zero tolerance of misconduct and corruption.

In the day-to-day operations the three lines of defense model defi nes the roles and responsibilities for compliance and integrity risk in the Development Bank.

The fi rst line of defense lies with the respective Development Bank departments and units, which are responsible for ensuring that compliance risks are identifi ed, understood and reported to the decision making bodies of the Development Bank and to Compliance Offi cer.

The second line of defense lies with Compliance Offi cer, which assesses and monitors the compliance and integrity risks and coordinates its control activities with the Risk Management Unit.

Internal Audit is the third line of defense.

The internal audit function assists the Development Bank in identifying, assessing, monitoring and reporting on compliance risks in matters relating to the institution, its operations and the personal conduct of staff members. The Head of IAD reports to the Audit Committee.

Strategic Risk

Strategic risk is the risk in achieving Development Bank’s strategic objectives, both from internal and external events and scenarios which prevent from achieving strategic objectives.

Strategic Risk can be further defi ned as:

• Exposure to loss resulting from a strategy that runs out to be inappropriate.

• Risk associated with future plans and strategies, including plans for entering new services, expanding existing services through enhancements and merger, enhancing infrastructures etc.

Current and prospective impact of strategic decisions made by management arising from adverse business decisions, improper implementation of decisions or lack of responsiveness to industry change etc.

Periodic (yearly) review of the strategy is being done by Management Committee and reported to BOD regarding: status of the strategic objective’s achievement as decided, execution status whether



the right talent and infrastructures support the achievement of the objective or about unintended consequences of the strategy, if any for their timely corrections/updates if found to be necessary.

Interest Rate Risk

Interest rate risk arises when there is a mismatch between positions, which are subject to interest rate adjustment within a specifi ed period. Interest rate risk is usually assessed from two common perspectives. Earnings perspective, which focuses on the impact of variation in interest rate on accruals or reported earnings, and economic value perspective, which refl ects the impact of fl uctuation in the interest rates on economic value of a fi nancial institution.

The Development Bank measures and manages interest rate risk by estimating the sensitivity of the economic value of its balance sheet to an interest rate shock. The sensitivity is measured by means of interest rates on the present value of interest-bearing assets and liabilities.

AML/CFT Risk

AML/CFT risk is related with providing fi nancial services to money launders and terrorists for channelling of money derived from crime or aimed at funding terrorism.

The strictness of the provisions made in laws and directives refl ect the seriousness of this issue; non-compliance of which may cause signifi cant reputational risk as well as may result in adverse consequences. Development Bank have been closely monitoring the AML/CFT policies, procedures, guidelines and practices of Banks and Financial Institutions (BFIs).

A separate AML/CFT Unit is established under direct supervision and control of Compliance Offi cer which looks ast er the eff ective implementation and compliance of AML/CFT related prevailing Acts, Rules and Directives.

5.2 Capital Management

i. Qualitative disclosures

The bank has maintained the capital adequacy as per Capital adequacy framework, 2007 (Updated July 2008) as required by Nepal Rastra Bank. The main objective of this framework is to develop a safe and sound fi nancial system by way of suffi cient amount of qualitative capital and risk management practices. The total equity of the bank comprises of paid up capital, statutory reserves and other reserves. The bank does not have any other complex or hybrid capital instruments. Capital adequacy ratio as on Ashad end 2076 is 13.77% and 14.91% on core capital and capital fund respectively.

Assessment of capital adequacy of bank is done on regular basis taking into considerations the exposure of bank. Also, the analysis of possible impact on capital adequacy is being done on regular basis taking into consideration the future impacts on assumptive basis. Capital adequacy of bank and impact in capital due to future change in nature and size of business is discussed in Risk Management Committee and is summarized in board. Regular monitoring of nature of business is being done so that unexpected negative impact could not take place in capital adequacy of bank. Reporting to regulatory body is being done as prescribed by compliance department.

The internal capital adequacy assessment process (ICAAP) is a comprehensive process which requires board and senior management oversight, monitoring,



reporting and internal control reviews at regular intervals to ensure the alignment of regulatory capital requirement with the true risk profi le of the bank and thus ensure long-term safety and soundness of the bank. The key components of an eff ective ICAAP are discussed below.

a. Board and senior management oversight

Board and senior management oversight bank management is responsible for understanding the nature and level of risk being taken by the bank and how this risk relates to adequate capital levels. It is also responsible for ensuring that the formality and sophistication of the risk management processes is commensurate with the complexity of its operations. A sound risk management process, thus, is the foundation for an eff ective assessment of the adequacy of a bank’s capital position.

The board of directors of the bank are responsible for setting the bank’s tolerance for risks. The board also ensures that management establishes a mechanism for assessing various risks; develops a system to relate these risks to the bank’s capital level and sets up a method for monitoring compliance with internal policies. It is equally important that the board instills strong internal controls and thereby an eff ective control environment through adoption of written policies and procedures and ensures that the policies and procedures are eff ectively communicated throughout the bank.

b. Sound Capital Assessment

Another crucial component of an eff ective ICAAP is the assessment of capital. In order to be able to make a sound capital assessment the bank should, at minimum, have the following:

• Policies and procedures designed to ensure that the bank identifi es, measures, and reports all material risks;

• A process that relates capital to the level of risk;

• A process that states capital adequacy goals with respect to risk, taking account of the bank’s strategic focus and business plan; and

• A process of internal control, reviews and audit to ensure the integrity of the overall management process.

c. Comprehensive assessment of risk

All material risks faced by the bank should be addressed in the capital assessment process. Nepal Rastra Bank recognizes that not all risks can be measured precisely. However, bank should develop a process to estimate risks with reasonable certainties. In order to make a comprehensive assessment of risks, the process should, at minimum, address the following forms of risk.

1. Credit Risk 2. Credit Concentration Risk 3. Operational Risk 4. Market Risk 5. Liquidity Risk

d. Monitoring and reporting

The bank has established an adequate system for monitoring and reporting risk exposures and assessing how the bank’s changing risk profi le aff ects the need for capital. The bank’s senior management or board of directors, on a regular basis, receive reports on the bank’s risk profi le and capital needs. These reports allow senior management to:



• Evaluate the level and trend of material risks and their eff ect on capital levels;

• Evaluate the sensitivity and reasonableness of key assumptions used in the capital assessment measurement system;

• Determine that the bank holds suffi cient capital against the various risks and is in compliance with established capital adequacy goals; and

• Assess its future capital requirements based on the bank’s reported risk profi le and make necessary adjustments to the bank’s strategic plan accordingly.

e. Internal Control Review

The bank’s internal control structure is essential to a sound capital assessment process. Eff ective control of the capital assessment process includes an independent review and, where appropriate, the involvement of internal or external audits. The bank’s board of directors has a responsibility to ensure that management establishes a system for assessing the various risks, develops a system to relate risk

to the bank’s capital level, and establishes a method for monitoring compliance with internal policies. The board should regularly verify whether its system of internal controls is adequate to ensure well-ordered and prudent conduct of business. The bank should conduct periodic reviews of its risk management process to ensure its integrity, accuracy, and reasonableness. Key areas that should be reviewed include:

• Appropriateness of the bank’s capital assessment process given the nature, scope and complexity of its activities;

• Identifi cation of large exposures and risk concentrations;

• Accuracy and completeness of data inputs into the bank’s assessment process;

• Reasonableness and validity of scenarios used in the assessment process; and

• Stress testing and analysis of assumptions and inputs.

The capital adequacy table for the year ended Ashad 2076 is:


(Rs. in '000)

1. 1 RISK WEIGHTED EXPOSURES Current Period Previous Period

a Risk Weighted Exposure for Credit Risk 25,066,479.49 18,056,011.77 b Risk Weighted Exposure for Operational Risk 1,198,855.51 834,418.60 c Risk Weighted Exposure for Market Risk 1,490.35 1,238.28

Total Risk Weighted Exposures (Before adjustments of Pillar II) 26,266,825.35 18,891,668.65 Adjustments under Pillar IISRP 6.4a (6) Add .....% of the total deposit due to insuffi cient Liquid Assets -

Total Risk Weighted Exposures (Ast er Bank's adjustments of Pillar II) 26,266,825.35 18,891,668.65

1.2 CAPITAL Current Period Previous Period

(A) Core Capital (Tier 1) 3,618,149.28 3,238,130.71 a Paid up Equity Share Capital 2,515,235.60 2,515,235.60 b Irredeemable Non-cumulative preference shares c Share Premium 28,614.71 - d Proposed Bonus Equity Shares - - e Statutory General Reserves 543,946.96 436,857.41 f Retained Earnings 548,909.52 341,032.70 g Un-audited current year cumulative profi t/(loss) - h Capital Redemption Reserve - - i Capital Adjustment Reserve - - j Dividend Equalization Reserves - - k Other Free Reserve - l Less: Goodwill - -

m Less: Deferred Tax Assets - 34,608.91 n Less: Intangible Assets 4,384.56 6,213.14 o Less: Investment in equity in licensed Financial Institutions - - p Less: Investment in equity of institutions with fi nancial interests - - q Less: Investment in equity of institutions in excess of limits - - r Less: Investments arising out of underwriting commitments - - s Less: Reciprocal crossholdings - - t Less: Purchase of land & building in excess of limit and unutilized 14,172.95 14,172.95 u Less: Other Deductions - -

Capital Adequacy TableAt the month end of Ashad, 2076


Capital Adequacy TableAt the month end of Ashad, 2076

(Rs. in '000)

1.2 CAPITAL Current Period Previous Period

Adjustments under Pillar IISRP 6.4a(1) - SRP 6.4a(2) -

B) Supplementary Capital (Tier 2) 297,511.95 219,827 a Cumulative and/or Redeemable Preference Share - - b Subordinated Term Debt - - c Hybrid Capital Instruments - - d General loan loss provision 295,984 217,277.70 e Exchange Equalization Reserve 27.46 27.46 f Investment Adjustment Reserve 1,500.00 2,521.46 g Asset Revaluation Reserve - - h Other Reserves - -

Total Capital Fund (Tier I and Tier II) 3,915,661.23 3,457,957.33

1.3 CAPITAL ADEQUACY RATIOS Current Period Previous Period

Tier 1 Capital to Total Risk Weighted Exposures (Ast er Bank's adjustments of Pillar II) 13.77% 17.14%

Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures(Ast er Bank's adjustments of Pillar II) 14.91% 18.30%


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(Rs. in '000)

S.N. Particulars Fiscal Year

2072/073 2073/074 2074/0751 Net Interest Income 444,738.83 760,952.48 847,608.78 2 Commission and Discount Income 8,986.45 15,355.10 26,153.04 3 Other Operating Income 58,242.09 87,688.02 147,735.47 4 Exchange Fluctuation Income - 18.32 232.44 5 Addition/Deduction in Interest Suspense during the period - - - 6 Gross income (a) 511,967.37 864,013.91 1,021,729.73 7 Alfa (b) 15% 15% 15% 8 Fixed Percentage of Gross Income [c=(a×b)] 76,795.11 129,602.09 153,259.46 9 Capital Requirement for operational risk (d) (average of c) 119,885.55

10 Risk Weight (reciprocal of capital requirement of 10%) in times (e) 1011 Equivalent Risk Weight Exposure [f=(d×e)] 1,198,855.51

SRP 6.4a (8) Adjustments under Pillar II (If Gross Income for the last three years is negative)1 Total Credit and Investment (net of Specifi c Provision) of releted month - 2 Capital Requirement for Operational Risk (5% of net credit and investment) - 3 Risk Weight (reciprocal of capital requirement of 10%) in times 104 Equivalent Risk Weight Exposure (g) - 5 Equivalent Risk Weight Exposure [h=f+g] 1,198,855.51

Risk Weighted Exposure for Operational RiskAt the month end of Ashad, 2076


S.No. Currency Open Position (FCY) Exchange Rate Open Position (NPR) Relevant Open Position

1 INR 1,142,630.00 1.60 1,829,065 1,829,065 2 USD 6,765.00 109.65 741,782 741,782 3 GBP 75.00 136.94 10,271 10,271 4 EUR 1,900.00 123.18 234,033 234,033 5 THB - - 6 CHF - - 7 AUD 750.00 76.80 57,596 57,596 8 CAD - - 9 SGD - -

10 JPY 44,000.00 1.02 44,660 44,660 11 HKD - - 12 DKK - - 13 SEK - - 14 SAR 500.00 28.91 14,453 14,453 15 QAR - - - 16 AED 1,700.00 28.74 48,850 48,850 17 MYR - - 18 KRW - - 19 CNY - - 20 KWD - - 21 BHD - - - 22 - - 23 - -

(a) Total Open Position 2,980,708 2,980,708 (b) Fixed Percentage 5% (c) Capital Charge for Market Risk (=a×b) 149,035 (d) Risk Weight (reciprocal of capital requirement of 10%) in times 10 (e) Equivalent Risk Weight Exposure (=c×d) 1,490,354

Risk Weighted Exposure for Operational Risk At the month end of Ashad, 2076


Notes to Financial StatementsFor the year ended 31 Ashad 20765.3 Classifi cation of Financial assets and fi nancial liabilities - FY 2075/76

Financial Assets Amortized CostFair value

through other comprehensive

income

Fair value through profi t or

loss Total

Cash in hand 557,277,513 557,277,513 Balances with B/FIs - - Money at call and short notice 4,016,320,269 4,016,320,269 Interbank placement - - Balance at NRB 1,148,397,928 1,148,397,928 Derivative fi nancial instrument - Loans & Advances 23,377,007,831 23,377,007,831 Government bonds 624,595,438 624,595,438 Government treasury bills - - Equity investments 295,201,666 295,201,666 Other assets 25,599,588 25,599,588 Total Financial Assets 29,749,198,568 295,201,666 - 30,044,400,234

Financial Liabilities Amortized CostFair value through profi t or loss

(FVTPL) Total Held for trading Designated at

FVTPLDeposits from customers 24,153,016,531 24,153,016,531 Due to Banks & Financial Institutions 1,496,132,384 1,496,132,384 Due to Nepal Rastra Banks - - Debt Securities - - Employee related liabilities 88,911,284 88,911,284 Bills payable 674,863 674,863 Creditors and accruals 4,324,815 4,324,815 Interest payable on deposit 120,814,734 120,814,734 Interest payable on borrowing - - Unpaid Dividend 1,050,791 1,050,791 Liabilities under Finance Lease 16,544,197 16,544,197 Other liabilities 124,199,239 124,199,239 Total Financial Liabilities 26,005,668,839 - - 26,005,668,839


Fair

valu

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ncia

l ass

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liabi

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ir va

lues

of fi

nan

cial

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ir va

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re th

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act

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r quo

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63,

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94,

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476



Particulars Province 3 Province 4 Province 5 Total

a Revenues from external customers 697,337,322 1,879,340,321 42,795,018 2,619,472,660 b "Intersegment revenues" 196,115,305 123,957,741 328,233 320,401,279 c Net Revenue 893,452,627 2,003,298,062 43,123,251 2,939,873,940 d Interest revenue 819,529,303 1,902,703,592 34,422,453 2,756,655,347 e Interest expense 664,350,634 1,194,276,124 25,164,620 1,883,791,377 f Net interest revenue 155,178,669 708,427,468 9,257,833 872,863,970 g "Depreciation and amortisation" 13,901,648 29,488,011 1,899,666 45,289,324 h Segment profi t /(loss) 141,277,021 678,939,457 7,358,167 827,574,646

i Entity"s interest in the profi t or loss of associates accounted for using equity method -

j Other material non-cash items: - …………… - ………….. -

k Impairment of assets 65,784,891 195,047,053 5,275,754 266,107,698 l Segment assets 5,369,142,453 18,411,298,921 638,668,551 24,419,109,925

m Segment liabilities 8,488,352,636 12,818,990,440 458,019,793 21,765,362,868

Total revenues for reportable segment 2,939,873,940 Other revenues - Elimination of intersegment revenues (320,401,279)Entity’s revenues 2,619,472,660

Total profi t or loss for reportable segments 827,574,646 Other profi t or loss (107,086,187)Elimination of intersegment profi ts -Unallocated amounts: (143,267,490)………………………..Profi t before income tax 577,220,969

3. Measurement of operating segment profi t or loss, assets and liabilities

The Bank has determined segments based on the geographical region i.e. Province Wise.

4. Reconciliations of reportable segment revenues, profi t or loss, assets and liabilities

(a) Revenue

(b) Profi t or loss

5.4 Operating Segment Information 2075 Ashad

1. General information

a) An operating segment is a component of an entity:

· that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity),

· whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete fi nancial information is available.

2. Information about profi t or loss, assets and liabilities



Total assets for reportable segments 24,419,109,925 Other assets - Unallocated amounts 733,227,680 Entity’s assets 25,152,337,606

Total liabilities for reportable segments 21,765,362,868 Other liabilities - Unallocated liabilities 3,386,974,738 Entity’s liabilities 25,152,337,606

(c) Assets

(d) Liabilities

5. Information about geographical areas

Revenue from following geographical areas

6. Information about major customers

Revenue from a single external customer is less than 10 percent of bank’s total revenue.

(a) Domestic 2,619,472,660 Province 1 - Province 2 - Province 3 697,337,322 Province 4 1,879,340,321 Province 5 42,795,018 Province 6 - Province 7 -

(b) Foreign - Total 2,619,472,660



Particulars Province 3 Province 4 Province 5 Total

a Revenues from external customers 1,142,901,044 2,256,556,990 121,395,683 3,520,853,717 b "Intersegment revenues" 330,919,421 147,284,490 - 478,203,912 c Net Revenue 1,473,820,466 2,403,841,480 121,395,683 3,999,057,629 d Interest revenue 1,083,961,306 2,596,044,079 111,856,006 3,791,861,391 e Interest expense 883,075,087 1,600,842,970 82,209,879 2,566,127,936 f Net interest revenue 200,886,219 995,201,110 29,646,127 1,225,733,455 g "Depreciation and amortisation" 15,355,316 37,810,580 4,270,802 57,436,698 h Segment profi t /(loss) 244,470,641 617,903,440 34,915,002 897,289,083

i Entity"s interest in the profi t or loss of associates accounted for using equity method -

j Other material non-cash items: - k Impairment of assets 110,828,200 328,596,937 8,888,094 448,313,231 l Segment assets 6,174,643,351 16,272,686,284 964,949,967 23,412,279,603

m Segment liabilities 9,370,271,287 15,552,953,175 627,183,828 25,550,408,289

Total revenues for reportable segment 3,999,057,629 Other revenues - Elimination of intersegment revenues (478,203,912)Entity’s revenues 3,520,853,717

Total profi t or loss for reportable segments 897,289,083 Other profi t or loss 506,687,574 Elimination of intersegment profi tsUnallocated amounts: (683,790,709)………………………..Profi t before income tax 720,185,949

5.4 Operating Segment Information 2076 Ashad

1. General information

a) An operating segment is a component of an entity:

· that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity),

· whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete fi nancial information is available.

2. Information about profi t or loss, assets and liabilities

3. Measurement of operating segment profi t or loss, assets and liabilities

The Bank has determined segments based on the geographical region i.e. Province Wise.

4. Reconciliations of reportable segment revenues, profi t or loss, assets and liabilities

(a) Revenue

(b) Profi t or loss



Total assets for reportable segments 23,412,279,603 Other assets 3,709,939,344 Unallocated amounts 2,738,365,503 Entity’s assets 29,860,584,450

Total liabilities for reportable segments 25,550,408,289 Other liabilities 70,989,702 Unallocated liabilities 4,239,186,459 Entity’s liabilities 29,860,584,450

(c) Assets

(d) Liabilities

5. Information about geographical areas

Revenue from following geographical areas

6. Information about major customers

Revenue from a single external customer is less than 10 percent of bank’s total revenue.

(a) Domestic 3,520,853,717 Province 1 - Province 2 - Province 3 1,142,901,044 Province 4 2,256,556,990 Province 5 121,395,683 Province 6 - Province 7 -

(b) Foreign - Total 3,520,853,717


Notes to Financial StatementsFor the year ended 31 Ashad 20765.5 Share options and share based payment

The bank does not have any share option and share based payment.

5.6 Contingent liabilities and commitment

Contingent Liabilities:

Where the Bank undertakes to make a payment on behalf of its customers for guarantees issued for which an obligation to make a payment has not arisen at the reporting date, those are included in these fi nancial statements as contingent liabilities

Commitments:

Where the Bank has confi rmed its intention to provide funds to a customer or on behalf of a customer in the form of loans, overdrast s, future guarantees, whether cancellable or not and the Bank has not made payments at the reporting date, those instruments are included in these fi nancial statement as commitments

Details of contingent liabilities and commitments are given in note 4.28

5.7 Related parties disclosures

Following has been identifi ed as Related Parties for Bank under NAS 24 Related Parties:

a. Directors

b. Key Management Personnel of the Bank

c. Relatives of Directors and Key Managerial Personnel

FY 2075-76 FY 2074-75 FY 2073-74

DirectorsSushil Kumar Goshali Sushil Kumar Goshali Sushil Kumar GoshaliRajendra Kumar Batajoo Rajendra Kumar Batajoo Rajendra Kumar BatajooBijaya Malla Bijaya Malla Bijaya MallaYogendra Lal Pradhan Yogendra Lal Pradhan Yogendra Lal PradhanShree Krishna Regmi Shree Krishna Regmi Shree Krishna RegmiKarma Kumari Gurung Karma Kumari Gurung Karma Kumari GurungPro. Dr. Yadab Prasad sharma Gaudel Niranjan Shrestha Niranjan Shrestha

Rabindra Nath Bastola Rabindra Nath BastolaPro. Dr. Yadab Prasad Sharma Gaudel Pro. Dr. Yadab Prasad Sharma Gaudel

Key Managerial PersonnelBishwo Mohan Adhikari Bishwo Mohan Adhikari Bishwo Mohan AdhikariBuddhi Kumar Malla Buddhi Kumar Malla Buddhi Kumar MallaDurga Ram Puri Durga Ram Puri Durga Ram PuriKrishna Raj Wagle Krishna Raj Wagle Krishna Raj Wagle



However a� er the merger with NMB Bank Limited, the Board of Directors and Key Management personnels are dissolved.

5.8 Merger and acquisition

The bank has not entered into any merger and acquisition activities in the reporting period. However, the Bank had signed Memorandum of Understanding dated 16 May 2019 with NMB Bank Limited (ODBL) to merge with it. Ast er obtaining necessary regulatory approvals, both the Banks commenced joint operations from 28 September 2019 (11 Ashwin 2076) as NMB Bank Limited. NMB Bank Limited licensed as “A” class fi nancial institution by Nepal Rastra Bank in May 2008 has been operating in the Nepalese Financial market for over twenty three years and is one of the leading commercial banks in the banking industry.

5.9 Additional disclosures of non consolidated entities

Not Applicable

5.10 Events a� er reporting date.

Bank monitors and assess events that may have potential impact to qualify as adjusting and / or non-adjusting events ast er the end of the reporting period. All adjusting events are adjusted in the books with additional disclosures and non-adjusting material events are disclosed in the notes with possible fi nancial impact, to the extent ascertainable. There are no material events that have occurred subsequent to 31 Ashad 2076 till the signing of this fi nancial statement.

However, as stated above the bank has already merged with NMB Bank Ltd. and is a non adjusting event.

Transaction during the Year

Particulars 2075-76 2074-75 2073-74

DirectorsDirectors Sitting Fees 714,500 536,000 432,000 Interest Paid to directors on deposits 8,366,473 16,908,693 2,736,546 Other directors' expenses (if any) 159,044 134,336 - Total 9,240,017 17,579,029 3,168,546 Key Management PersonnelRemuneration and Benefi t Paid 31,542,709 30,297,122 27,160,273 Post-Retirement Benefi ts 25,788,171 12,783,850 7,413,327 Other Long-term Benefi ts - - -Borrowing during the year - - -Interest on Borrowing - - -Interest on account balances 28,816 151,248 114,609 Other transactions benefi ts if any - - -Total 57,359,696 43,232,220 34,688,208

Particulars 2075-76 2074-75 2073-74

Directors Deposits 52,576,091 141,899,774 173,892,128 KMP Deposits 882,820 691,535 4,885,763 Borrowings - - -Other Receivable payables if any - - -Total 53,458,911 142,591,309 178,777,891

Reporting Date Balances


Notes to Financial StatementsFor the year ended 31 Ashad 20765.11 Disclosure of eff ect of transition from previous GAAP to NFRSs

5.11.1. Reconciliation of equity

Particulars Explanatory Note

"As at 01.04.2074

(Date of Transition)"

"As at 32.03.2075(End of last period presented under previous GAAP)"

"As at 31.03.2076"

Total equity under Previous GAAP 2,640,511,822 3,301,770,742 3,683,265,202 Adjustments under NFRSs:Impairment on loan and advances - - - Fair value & employees benefi t accounting of staff loan - - Lease accounting 1 (7,347,048) (11,870,443) (16,544,197)Measurement of investment securities measured at fair value 112,877,842 5,357,312 (1,665,406)

Measurement of investment securities measured at fair value in associates 2 - - -

Dividend Income from Associates - Revaluation of property & equipment - Recognition of Available for Sale Investment - 3,143,393 571,506 Recognition of investment property - Amortisation of debt securities issued - Deferred tax 3 (55,575,356) (39,984,371) 12,836,926 Defi ned benefi t obligation of employees 4 - - - Goodwill/Bargain purchase gain - Interest income 5 42,525,533 66,720,715 176,451,580 Proposed Dividend - - -

Total Adjustment to equity 92,480,972 23,366,605 171,650,409 Total Equity under NFRSs 2,732,992,794 3,325,137,347 3,854,915,611


Notes to Financial StatementsFor the year ended 31 Ashad 20765.11.2. Reconciliation of profi t or loss

1) Rent Expenses booked over the rent period on equal amount on SLM Basis 2) Valuation made for associate company 3) Deferred Tax eff ect of all adjustment 4) Gratuity Expenses booked as per acturial valaution 5) Accrued Interest Receivable booked on accrual basis which in approximate to Eff ective Interest Rate 6) Liaiblity Created for Proposed Dividend Reversed 7) Interest on Staff loan charged to fi nance income and staff cost 8) Invsestment Provision made in P/L of local gaap reversed and charged to OCI for investment classifi ed as Fair value through OCI9) Gain on Sell of share classifi ed to OCI charged directly to equity 10) Tax eff ect of Gain on Sell of share classifi ed to OCI charged directly to equity 11) NBA has been directly shown through Regulatory reserve 12) Avoidable Share issue expenses directly charged to equity 13) Tax eff ect of Avoidable Share issue expenses directly charged to equity

Particulars Explanatory Note " As at 32.03.2075(End of last period presented under previous GAAP) "

" As at 31.03.2076"

Previous GAAP 373,754,997 381,494,460 Adjustments under NFRSs:Interest income 5 25,255,193 110,888,781 Impairment of loan and advances - - Employees benefi t amortisation under staff loan 7 (1,060,011) (1,157,915)Defi ned benefi t obligation of employee 4 - - Operating lease expense 1 (4,523,396) (4,673,754)Provision for Investment 8 22,004,644 2,046,519 Income from Investment in Associates 2 - - Gain on Sales of Share Investment Classifi ed to OCI 9 (6,315,534) (969,960)Current Tax on Gain on Sales of Share Investment Classifi ed to OCI 10 1,894,660 290,988

Dividend from Associates - - Amortisation expense of debt securities - - Other operating income - - Interest expense - - NBA provision 11 3,143,393 (2,571,887)Share Issue Expenses Directly Charged to Equity 12 4,915,070 - Share Issue Expenses Directly Charged to Equity-Tax Impact 13 (1,474,521) -

Deferred Tax 3 (23,266,567) 50,100,526

Total Adjustment to profi t or loss 20,572,930 153,953,297 Profi t or loss under NFRSs 394,327,928 535,447,757 Other Comprehensive Income (90,667,622) (6,348,465)Total Comprehensive income under NFRSs 303,660,306 529,099,292


Not

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at 0

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ate

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us G

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and

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56

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59

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Equi

ty

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(378

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) 1

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2

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-

2

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2

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-

2

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Shar

e Pr

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m11

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372,

574

15,

372,

574

28,

614,

713

-

28,

614,

713

28,

614,

713

-

28,

614,

713

Reta

ined

Ear

ning

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508

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3

76,2

54,2

09

376

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2

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738

312

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6

59,3

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32

(110

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) 5

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19

Rese

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83,1

98,9

18

78,

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488

462

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4

80,1

11,3

57

(11,

706,

133)

468

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4

80,1

11,3

57

282

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7

62,1

55,7

80

Tota

l Equ

ity A

ttrib

utab

le to

Equ

ity

Hol

ders

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40,5

11,8

22

92,

480,

972

2,7

32,9

92,7

94

3,3

01,7

70,7

42

23,

366,

605

3,3

25,1

37,3

47

3,6

83,2

65,2

02

171

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3

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,915

,611

Non

Con

trol

ling

Inte

rest

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Tota

l Equ

ity 2

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9

2,48

0,97

2 2

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3

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2

3,36

6,60

5 3

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3

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1

71,6

50,4

09

3,8

54,9

15,6

11

Tota

l Lia

bilit

ies

and

Equi

ty19

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1

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08,8

53

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50,9

06

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11,7

25,0

98

40,

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52,3

37,6

06

29,6

72,3

89,8

44

188

,194

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29

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Not

e

1) A

ccru

ed in

tere

st o

n lo

ans

book

ed o

n ac

crua

l bas

is a

nd p

rese

nt v

alue

of s

taff

loan

recl

assi

fi ed

to lo

ans

and

adva

nces

to c

usto

mer

s.

2)

Inve

stm

ent s

ecur

iies

reco

gniz

ed a

t FV

and

accu

red

inte

rest

on

bond

recl

assi

fi ed

as in

vest

men

t sec

uriti

es.

3)

Inve

stm

ent P

rope

rty

recl

assi

fi ed

and

mea

sure

d at

fair

valu

e.

4)

Fix

ed A

sset

recl

assi

fi ed

as In

vest

men

t pro

pert

y.

5)

Rec

lass

ifi ca

tion

of e

xpen

ses

not w

ritte

n off

to

good

will

and

inta

ngib

le a

sset

s.

6)

Def

erre

d Ta

x eff

ect

of a

ll ad

just

men

t

7) E

ff ect

of r

ecla

ssifi

catio

n of

sta

ff lo

an, e

xpen

ses

not w

ritte

n off

and

acc

ured

inte

rest

on

loan

s an

d ad

vanc

es.

8)

Rec

lass

ifi ca

tion

of m

atur

ed F

ixed

Dep

osit

9)

Ren

t Exp

ense

s bo

oked

ove

r the

rent

per

iod

on e

qual

am

ount

on

SLM

Bas

is a

nd g

ratu

ity li

abili

ty b

ooke

d as

per

act

uaria

l val

uatio

n.

10

) Eff e

ct o

f rev

ersa

l of p

ropo

sed

bonu

s sh

are

and

prop

osed

div

iden

d.

11

) Eff e

ct o

f rev

ersa

l of p

ropo

sed

bonu

s sh

are

from

sha

re p

rem

ium

.

12) E

ff ect

on

profi

t du

e to

adj

ustm

ents

of N

FRS.

13) E

ff ect

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Particulars"

Explanatory Note "

As at 32.03.2075 (End of last period presented under previous GAAP)

Previous GAAP Eff ect of Transition to NFRS

Amount as per NFRS

Interest Income 1 2,411,003,805 25,255,193 2,436,258,999 Interest Expense 2 (1,563,395,029) - (1,563,395,029)Net Interest Income 847,608,777 (25,255,193) 872,863,970 Fee and Commission Income 173,888,506 - 173,888,506 Fee and Commission Expense - 2,777,672 2,777,672 Net Fee and Commission Income 173,888,506 2,777,672 171,110,835 Net Interest, Fee and Commisson Income 1,021,497,283 (22,477,522) 1,043,974,805 Net Trading Income - 127,734 127,734 Other Operating Income 3 15,628,290 (6,443,268) 9,185,022 Total Operating Income 1,037,125,573 (16,161,987) 1,053,287,560 Impairment Charge/ (Reversal) for Loans and Other Losses 4 72,047,472 (25,148,036) 46,899,435 Net Operating Income 965,078,101 (41,310,024) 1,006,388,125 Operating ExpensePersonnel Expenses 5 245,864,095 1,060,011 246,924,107 Other Operating Expenses 6 150,038,303 (13,072,178) 136,966,125 Depreciation & Amortisation 7 35,386,492 9,902,832 45,289,324 Operating Profi t 533,789,210 (43,419,358) 577,208,569 Non Operating Income 12,400 - 12,400 Non Operating Expense - - - Profi t Before Income Tax 533,801,610 (43,419,358) 577,220,969 Income Tax ExpenseCurrent Tax 8 178,861,002 (420,139) 178,440,863 Deferred Tax 9 (18,814,389) 23,266,567 4,452,178 Profi t for the Period 373,754,997 (20,572,930) 394,327,928

- (0)Other Comprehensive Income, Net of Income Taxa) Items that will not be reclassifi ed to profi t or loss• Gains/(losses) from investment in equity instruments measured at fair value 10 - (129,525,174) (129,525,174)

• Gains/(losses) on revaluation - - - • Acturial gain/(losses) on defi ned benefi t plans 11 - - - • Income tax relating to above items 12 - 38,857,552 38,857,552 Net other comprehensive income that will not be reclassifi ed to profi t or loss - (90,667,622) (90,667,622)b) Items that are or may be reclassifi ed to profi t or loss• Gains/(losses) on cash fl ow hedge - - - • Exchange gains/(losses)(arising from translating fi nancial assets of foreign operation) - - -

• Income tax relating to above items - - - • Reclassify to profi t or loss - - - Net other comprehensive income that are or may be reclassifi ed to profi t or loss - - - c) Share of other comprehensive income of associate accounted as per equity methodOther Comprehensive Income for the Period, Net of Income Tax - (90,667,622) (90,667,622)Total Comprehensive Income for the Period 373,754,997 (111,240,552) 303,660,306

5.11.4. Eff ect of NFRSs adoption for statement of profi t or loss and other comprehensive income

Notes 1) Interest Receivable on loan has been booked on accrual basis and interest diff erence in staff loan has also been charged.2) Interest expense on calculation of Gratuity expense - 3) Profi t on sale of investment has been reclassifi ed 4) Reversal of Loan loss provision 5) Bonus has been charged as staff expense and fi nance cost of staff loan has also been charged. 6) Rent expense has been charged on SLM basis 7) Reclassifi cation of written off expense as depreciation and ammortization 8) Income tax related to share issue expense and gain on sale of investment reclassifi ed through equity. 9) Deferred Tax eff ect of all adjustment 10) Changes in Fair value and cost of investment classifi ed to OCI 11) Actuarial Gain/ loss recognized in OCI of Gratuity Liability 12) Deferred Tax Adjustment on item of OCI



Particulars "Explanatory Note"

As at 32.03.2075

Previous GAAPEff ect of

Transition to NFRS

Amount as per NFRS

Net cash fl ows from operating activities 1 1,523,058,476 (281,518,977) 1,241,539,499 Net cash fl ows from investing activities 2 (245,228,078) (39,975,831) (285,203,909)Net cash fl ows from fi nancing activities 287,503,922 (457,897) 287,046,026 Net increase/(decrease) in cash and cash equivalent 1,565,334,321 (321,952,706) 1,243,381,615 Eff ect of exchange rate fl uctuations on cash and cash equivalents held - 104,709 104,709

Cash and cash equivalent at the beginning of the period 3 4,163,890,461 (800,622,192) 3,363,268,270 Cash and cash equivalent at the end of the period 5,729,224,782 (1,122,470,189) 4,606,754,593

Notes 1) Money at call treated as cash and cash equivaluents in NFRS, Investment securties classifi ed as investment activity in NFRS2) Investment securties classifi ed as investment activity in NFRS 3) Money at Call treated as Cash and Cash Equivalents

5.11.5. Eff ect of NFRSs adoption for statement of cash fl ows


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Amendments to the MOA and AOA of the Bank presented as a special resolution in the General Meeting dated 9 January 2020

Article/Section Existing Arrangements Proposed Arrangements Justifi cation to the

Amendment

On the MOA Side

6(b)

The issued capital of the Bank shall be NPR 11,529,741,707.96 (in words: Eleven Billion Five Hundred Twenty Nine Million Seven Hundred Forty One Thousand Seven Hundred Seven and 96/100 only). This capital is divided into 115,297,417.07 (in words: One Hundred Fist een Million Two Hundred Ninety Seven Thousand Four Hundred Seventeen and 07/100) units of shares with face value of NPR 100 per share.

The issued capital of the Bank shall be NPR 13,950,987,466.96 (in words: Thirteen Billion Nine Hundred Fist y Million Nine Hundred Eighty Seven Thousand Four Hundred Sixty Six and 96/100 only). With face value of NPR 100 per share, the capital is divided into 139,509,874.66 (in words: One Hundred Thirty Nine Million Five Hundred Nine Thousand Eight Hundred Seventy Four and 66/100) units of shares.

As per the proposal made on 24th Annual General Meeting of the Bank to distribute 21% bonus share on existing paid-up capital

6(c)

The paid-up capital of the Bank shall be NPR 11,529,741,707.96 (in words: Eleven Billion Five Hundred Twenty Nine Million Seven Hundred Forty One Thousand Seven Hundred Seven and 96/100 only).

The issued capital of the Bank shall be NPR 13,950,987,466.96 (in words: Thirteen Billion Nine Hundred Fist y Million Nine Hundred Eighty Seven Thousand Four Hundred Sixty Six and 96/100 only). With face value of NPR 100 per share, the capital is divided into 139,509,874.66 (in words: One Hundred Thirty Nine Million Five Hundred Nine Thousand Eight Hundred Seventy Four and 66/100) units of shares.

As per the proposal made on 24th Annual General Meeting of the Bank to distribute 21% bonus share on existing paid-up capital

On the AOA Side

27(2)

The Bank shall have a 7 member board committee consisting of three elected representatives from both promoter and public shareholders and one independent director.

The Bank shall have a board committee of 7 members- 3 representatives from promoter shareholder category including one director nominated by Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. (FMO), Nederland and two elected directors, three elected representatives from public shareholder category and one independent director.

To ensure the representation of foreign investor on Board of Directors

32(b)

Per meeting allowance received by the Chairman and other Directors shall be NPR 13,000 and NPR 12,000 respectively.

Per meeting allowance received by the Chairman and other Directors shall be NPR 18,000 and NPR 16,000 respectively.

Due to the time relative necessity to increase the allowance received by the board of directors

32(c) (iii)

Existing Arrangements Facility of Food Expenses

Need for linguistic improvement and time-relative growth of daily travelling allowance observed

Designation/Expense Heading

Area-1(USD)

Area-2(USD)

Area-3(USD)

Area-4(INR)

Area-5(NPR)

Chairman (Food Expenses) 165.00 110.00 99.00 2,200.00 2,200.00

Directors (Food Expenses) 143.00 99.00 88.00 1,650.00 1,650.00

Proposed Amendments Daily Travelling Allowance

Designation/Expense Heading

Area-1(USD)

Area-2(USD)

Area-3(USD)

Area-4(INR)

Area-5(NPR)

Chairman 250.00 250.00 200.00 11,000.00 11,000.00

Directors 225.00 225.00 175.00 10,000.00 10,000.00

32(c) (v)

Without increasing the amount limit mentioned in sub-clauses (i) and (ii), hotel and food expense shall be reimbursed as per the bill and other expenses not mentioned such as travel ticket, passport and visa fee, communication and transportation, etc. shall be reimbursed as per actual bill

Except as mentioned in sub-clauses (i) and (ii), air tickets, passport and visa fee, communication and transportation required during visit shall be inquired according to actual bill.

Need for linguistic improvement and consideration of practical aspects observed


Notice about 24th Annual General MeetingThe 396th Board Meeting of the Bank held on 10 December 2019, has decided to conduct 24th Annual General Meeting in the following date, venue and time to discuss upon the following agenda. This notice is published to inform all our esteemed shareholders regarding the Annual General Meeting as per Clause 67 of Company Act, 2006.

1. Date, Venue and Time of the Annual General MeetingDate : Thursday, 9 January, 2020Venue : Nepal Administrative Staff College, LalitpurTime : 10:00 A.M.

2. Agenda of the Meeting

A. General Agenda

i. To discuss and approve the annual report presented by the Chairman on behalf of the Board of Directors,

ii. To discuss and approve the Auditor’s report for FY 2018/19 including Balance Sheet, Profi t and Loss Statement, Cash Flow Statement, and other fi nancial reports (including consolidated fi nancials of subsidiary companies and fi nancial reports of erstwhile Om Development Bank Ltd.),

iii. To appoint and decide upon the remuneration of the Auditor for fi scal year 2019/20 in compliance with the Clause 111 of Company Act, 2006 and Clause 63 of Bank and Financial Institution Act 2016, (existing Auditor MS. S.R. Associates, Chartered Accountant is eligible for reappointment)

iv. To approve the appointment of auditor for fi nancial audit of erstwhile Om Development Bank Ltd. until September 27 of the FY 2019/20.

v. To approve the distribution of 14 percent cash dividend (including for tax purpose) amounting NPR 1,614,163,839.11 (in words: Rupees One Billion Six Hundred Fourteen Million, One Hundred Sixty Three Thousand, Eight Hundred Thirty Nine and 11/100 only) of the existing paid-up capital of NPR 11,529,741,707.96 (in words: Rupees Eleven Billion Five Hundred Twenty Nine Million Seven Hundred Forty One Thousand Seven Hundred Seven and 96/100 only) as proposed by the Board of Directors.

B. Special Agenda

i. To approve the increment in the existing issued capital from NPR 11,529,741,707.96 (in words: Rupees Eleven Billion Five Hundred Twenty Nine Million Seven Hundred Forty One Thousand Seven Hundred Seven and 96/100 only) to NPR 13,950,987,466.96 (in words: Rupees Thirteen Billion Nine Hundred Fist y Million Nine Hundred Eight Seven Thousand Four Hundred Sixty Six and 96/100 only)

ii. To approve the distribution of 21 percent bonus share of existing paid-up capital amounting to NPR 2,421,245,759 (in words: Rupees Two Billion Four Hundred Twenty One Million Two Hundred Forty Five Thousand Seven Hundred Fist y Nine only) to adjust the eff ect of proposed increment in issued capital


iii. To approve the amendment of Memorandum of Association of the Bank with respect to the increment of its issued and paid-up capital. (Related details are included in the Annual Report)

iv. To approve the amendment of the Article of Association of the Bank (Related details are included in the Annual Report)

v. To provide authority to the Board of Directors to acquire other banks and fi nancial institutions and to carry out merger process with other banks and fi nancial institutions, and to delegate authority to carry out the tasks related to the appointment of the Appraiser/Valuator for the same

vi. To provide authority to the Board of Directors to carry out or cause to carry out tasks related to amendment in the Memorandum of Association and Article of Association of the Bank such as record keeping, making minor changes, certifi cation of the documents, registration and receipt of acknowledgement of the record.

C. Miscellaneous

D. Regarding Election

i. To conduct election to appoint six directors with 3 each representing from public shareholders and promoter shareholders

By OrderCompany Secretary

Additional Information about the Annual General Meeting (AGM)

1. Share register shall remain closed from 2076/09/04 B.S. (20/12/2019 A.D.) to 2076/09/24 B.S. (09/01/2020) for the purpose of this AGM.

2. A brief annual fi nancial statement is published along with this notice for shareholders’ information. Further, all the proposals presented at the AGM along with brief fi nancial statements are also kept on the Bank’s website www.nmbbanknepal.com.np

3. Shareholders interested in participating at the AGM are required to bring either an original copy of Share Certifi cate or Demat account details and documents proving their identity with photograph or its copy along with them.

4. Shareholders attending the AGM must be present in the AGM venue and sign the attendance register that will be made available from 09:00 A.M. onwards.

5. Shareholders willing to nominate proxy to attend the AGM, shall register proxy form at the Bank’s head offi ce Babarmahal, Kathmandu, at least 48 hours before the AGM commences.


6. Only existing shareholders shall be nominated proxy. If any shareholder ast er appointing proxy is self-present in the AGM, then such proxy shall be automatically cancelled.

7. In case of minor or insane shareholders, person registered as his/her guardian in the share register book shall be entitled to take part, vote or appoint a proxy in the AGM. In case of joint shareholdings, only the unanimously selected representative or the partner whose name appears fi rst in the serial order of the share register book can attend the AGM.

8. Any issue or query raised in the AGM shall be responded by Chairman or any other dignitaries as permitted by the Chairman.

9. If any shareholder has any issue or query about the Bank, shareholders are requested to send it in writing to the Bank’s registered orrice at least 7 days before the AGM commences. However, such issues or queries shall not be tabled for discussion as agenda in the AGM.

10. Except for documents related to AGM, shareholders are kindly requested not to carry any bags and luggage while attending the AGM.

Additional Information on Election of Members of Board of Directors

1. The programs related to the election will be as per the notice published by the Election Offi cer. The election program will be published by the Election Offi cer on 2076/09/10 B.S. (26/12/2019 A.D.) Thursday 1 PM at the Bank’s central offi ce Babarmahal, Kathmandu.

2. The shareholder willing to be a candidate for the post of Director must have owned at least 100 units mortgage free shares of any type issued by the Bank.

3. The shareholder willing to be a candidate for the post of Director will have to register his candidacy in the prescribed format within the date and time mentioned in the notice of the election program published at Bank’s central offi ce, ward number 11, NMB Bhawan, Babarmahal, Kathmandu. The candidacy must be proposed by one ordinary shareholder of the Bank and seconded by another shareholder as supporter.

4. Shareholders can purchase Directors’ “Election Guidelines 2065” by paying a fee of NPR 200 from the central offi ce of the Bank

NOTE: For shareholders’ convenience, Annual Report has been uploaded in Bank’s website (https://www.nmbbanknepal.com.np) wherein shareholders can browse and access the report online.

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