leading the way - standard charteredannual report 2010-2011. standard chartered has continued to...

Leading the wayin Asia, Africa and the Middle East

Here for good

Annual Report 2010-2011

Standard Chartered has continued to deliverconsistent, diverse and sustained growth whileinvesting to underpin future momentum and building balance sheet resilience

Financial highlights

Operating Income

Capital Adequacy

Points of representation

• Recordincomeandoperatingprofitdespiteongoingmargin compression

• BroadbasedanddiversifiedsourcesofincomegrowthinbothConsumerandWholesaleBanking

• Consciousdecisiontoinvesttounderpinfuturegrowthin both businesses

OperatingProfit

Return on equity

Employees

Total Assets

Dividend

Non-financialhighlights

Operational highlights

2461m

14.22%

19

1707m

30.43%

429

43,811m

50%

• DisciplinedandproactiveapproachtoriskmanagementinbothConsumerandWholesaleBanking

• Diverse,liquid,wellcapitalisedandrobustbalancesheet composition

• Strongmarketcapitalisationof~Rs.29Billionreflectinghighshareholderconfidence

www.standardchartered.com/np Standard Chartered Annual Report 2010-2011 1

40 Auditor’s Report41 BalanceSheet42 Profit & Loss Account43 Profit & Loss Appropriation Account44 Statement of Changes in Equity45 Cash Flow Statement46 Schedules77 Significant Accounting Policies80 Notes to Accounts86 DisclosureasperBank’sdisclosurepolicyunder

theBasel–IICapitalAccordofNepalRastraBank90 NepalRastraBank’sApprovalandDirections91 Five Years Financial Summary

StandardCharteredBankNepal Limited

StandardCharteredBankNepalLimited has been in operation in Nepal since 1987 when it was initially registered as a joint-venture operation. TodaytheBankisanintegralpartofStandard Chartered Group having an ownership of 75% in the company with 25% shares owned by the Nepalesepublic.TheBankenjoysthe status of being a subsidiary of StandardCharteredBank,whichisoneoftheleadinginternationalbanksin the world.

Standard Chartered has a history ofover150yearsinbankingandoperates in many of the world’s fastest-growingmarketswithanextensiveglobalnetworkofover1700branches (including subsidiaries, associates and joint ventures) in over70countriesintheAsiaPacificRegion, South Asia, the Middle East, Africa, the United Kingdom and the Americas. As one of the world’s mostinternationalbanks,StandardChartered employs almost 80,000 people, representing over 115 nationalities, worldwide. This diversity liesattheheartoftheBank’svaluesandsupportstheBank’sgrowthasthe world increasingly becomes one market.

With 19 points of representation, 23 ATMs across the country and with more than 400 local staff, Standard CharteredBankNepalLtd.isinaposition to serve its customers through anextensivedomesticnetwork.Inaddition,theglobalnetworkofStandard Chartered Group gives the BankauniqueopportunitytoprovidetrulyinternationalbankingservicesinNepal.

StandardCharteredBankNepalLimitedoffersafullrangeofbankingproducts and services in Consumer Banking,WholesaleandSMEBankingcatering to a wide range of customers encompassingindividuals,mid-marketlocal corporates, multinationals, large public sector companies, government corporations, airlines, hotels as well as the DO segment comprising of embassies, aid agencies, NGOs and INGOs.

TheBankhasbeenthepioneerin introducing ‘customer focused’ products and services in the country and aspires to continue to be a leader in introducing new products in delivering superior services. It is one of thefirstBanksinNepaltoimplement

the Anti-Money Laundering policy and apply the ‘Know Your Customer’ procedures.

Corporate Social Responsibility is an integral part of Standard Chartered’s ambition to become the world’s best international bankandisthemainstayoftheBank’svalues.TheBankbelievesin delivering shareholder value in a socially, ethically an environmentally responsible manner. Standard Chartered throughout its long history has played an active role in supporting those communities in which its customers and staff live. It concentrates on projects that assist children, particularly in the areas of health and education. Environmental projects are also occasionally considered. It supports non-governmental organisations involving charitable community activities. The Group launched two major initiatives in 2003underits‘BelievinginLife’campaign-‘SeeingisBelieving’and‘Living with HIV/AIDS’.

Businessreview Financial statements and notes

04 Chairman’s Statement10 CEO & Director’s Report14 Our Approach to Corporate Responsibility18 Here for people, Here for good People Strength

Corporate governance

24 Our Approach to Corporate Governance30 Additional Information34 BoardofDirectors36 Management Team

www.standardchartered.com/npStandard Chartered Annual Report 2010-20112 www.standardchartered.com/npStandard Chartered Annual Report 2010-20112


Businessreview

04 Chairman’s Statement, poised for further growth10 CEO & Director’s Report14 Our Approach to Corporate Responsibility18 Here for people, Here for good People Strength


www.standardchartered.com/npStandard Chartered Annual Report 2010-20114

Chairman’s statementPoised for further growth

We are in a position to blend our global capability with deep local market knowledge to creatively outperform our competitors. We are putting even greater focus on our clients and customers, on building deep and long-standing relationships, on improving the quality of our service and solutions.

– Neeraj Swaroop, Chairman

I am pleased to report that Standard Chartered BankNepalLimitedbuiltonitsrecordofconsistentperformance once again and has achieved strong financialresultsforshareholderswhileinvestingforthe future. We have delivered on our promises to all stakeholders.

Despite a challenging situation faced by the country mainly on account of socio-political environment and slowdown in economic growth in the year 2010/11;yourBankcontinuedtoinvestcautiouslyin expansion of its footprint, introduction of new and innovative products, investment in strengthening and upgrading infrastructure platform and in expandingtheskillsofourpeople.Wefollowedaconsistent strategy. Our performance in 2010/11 reflectsthecontinuedsuccessofourbusiness


model. We have demonstrated our determination to stand by our customers and clients, using our capital and liquidity strength to supportthemduringgoodanddifficulttimes. We are proud of our long andsuccessfultrackrecordwhichdemonstrates our ability to deliver sustained value for our shareholders.

Ourdeeplocalknowledgeandmanagementdeptharekeydriversforexecuting strategy and adapting to the changing environment. We continue to see a wealth of growth opportunities; have a strong capital base, liquidity and customer relationships required to makethemostofthisopportunity.Weare in a position to blend our global capabilitywithdeeplocalmarketknowledgetocreativelyoutperformour competitors. We are putting even greater focus on our clients and customers, on building deep and long-standing relationships, on improving the quality of our service and solutions.

Ourabilitytoworkcloselywithourpeople, customers, regulators, industry and the community has gifted us the strength and acumen to successfully address the changing business dynamics & economic environment surrounding us.

Our brand is the most valuable asset which is at the heart of our strategic intent i.e, to be the world’s bestinternationalBank,leadingtheway in Asia, Africa and the Middle East. Launch of our new brand promise `Here for good’ has given our brand a new dimension, which

captures the essence of who we are.Weareabankthatsticksbyits clients and customers, through goodtimesandbad;abankthatalways tries to do the right thing. We are committed to having a positive impact on the broader economy and on the communities in which we live andwork.‘Hereforgood’resonateswith staff, clients and customers and otherstakeholdersbecauseit’strue,simple and powerful. It complements theBank’sstrategy,andalsoitsvalues–Trustworthy,International,Responsive, Courageous and Creative. We continue to remain the best brand inthismarket;therenewedthrustwill further help reinforce our brand identity.

Results – A SynopsisFinancial Highlights> NetProfitaftertaxroseby3.07

percent to Rs.1.119 billion compared to Rs. 1.086 billion in the previous year.

> Earnings per share is lower by Rs. 8.14 due to increase in the number of shares last year.

> RiskAssetsincreasedby15.37percent to Rs.18.66 billion compared to Rs. 16.18 billion last year.

> Deposits expanded by 8.01 percent to Rs. 38.00 billion.

A Consistent PerformanceYourBankhasbeendeliveringa consistent performance year onyear.Becauseofyetanothergoodperformance,theBankhascontributed an amount of Rs. 486 million to the Government Exchequer

BusinessreviewChairman’s Statement

2006- 2007

692 819 1,025 1,086 1,119

2007- 2008

2008- 2009

2009- 2010

2010- 2011

Profit after tax in Rs. Mio

2006- 2007

5,900 6,830 6,010 3,279 1,800

2007- 2008

2008- 2009

2009- 2010

2010- 2011

Market value per share in Rs.


as compared to Rs. 466 million last year on account of corporate tax.

In accordance with the statutory and regulatory requirements, the BoardrecommendsatransferofRs51,146,200 to Investment Adjustment Reserve, Rs. 18,103,828 to Exchange Fluctuation Reserve and transfer of Rs. 223,834,257 into General ReserveFund.Further,theBoardhas proposed the dividend of 50% for which Rs 805,084,000 has been appropriated towards dividend.

Our Tier 1 and Tier 2 Capital Adequacy Ratios were 12.10 percent and 2.12 percent respectively with an overall ratio of 14.22 percent, post appropriations. Our capital position is more than adequate to meet our business needs and exceeds the currentNepalRastraBank’scapitaladequacyrequirementundertheBaselII capital accord and also exceeds the international norms.

Economic EnvironmentGlobal Scenario The world economy continues to recover from the global economic crisis. The pace of this recovery remains uneven across countries –outputgrowthisstrongamongdeveloping countries whereas it is seen to be feeble in the developed economies. Despite some progress, thebankingsectorsofthemajordevelopedcountriesstilllookvulnerabletomultiplerisksfromcontinuedweakhousingmarkets,sovereign debt stress, and continued overalleconomicweakness.The

strong recovery continues to be led by the large emerging economies in Asia and Latin America, particularly China,IndiaandBrazil.However,thegrowthoutlookintheseeconomiesis also moderating owing to several increasinglypressingconcernsviz.persistentlyrisinginflation,emergingdomestic price bubbles, fuelled by largecapitalinflowsandrelatedupward pressure on their exchange rates. Many countries are responding bysignificanttighteningofmonetarypoliciesandmoderationoffiscalexpansion.

New headwinds have also emerged in2011.Theearthquake,tsunamiandnuclearcrisisinJapanalsoshookworldfinancialmarkets.Similarly,primary commodity prices have surgedduringthefirsthalfof2011,much more forcefully than anticipated. The surge was driven in part by the political unrest in Western Asia and North Africa. The near term trend in oil prices are hard to predict because of uncertain political factors and the influenceofothervariablessuchasthe magnitude of demand and supply. Food prices also soared in early 2011. The higher energy and food prices havepushedupheadlineinflation.Thelabormarketsituationhasgenerallyimproved, but continues to be a reason for concern.

MostofourmarketsacrossAsia,Africa and the Middle East have quicklyreturnedtoatrajectoryofstrong economic growth. This is not to say there are no challenges facing our markets,thereareclearlysomedifficult

2006- 2007

167.37 131.92 109.99 77.65 69.51

2007- 2008

2008- 2009

2009- 2010

2010- 2011

Earning per share in Rs.

2006- 2007

2.42 2.46 2.56 2.70 2.55

2007- 2008

2008- 2009

2009- 2010

2010- 2011

Return on total assets in %


We are Here for good, to create value for our shareholders, to support and partner our clientsandtomakeapositivecontributiontothe broader community.

issuesfacingpolicymakers.Butwhiletheremaybedifficultiesalongtheway, these will not derail the long-term growth picture.

NepalThe uncertain political climate, low economic growth, widening trade deficitandtighteningofliquidityinthebankingsystemcontinuedtoremainthe major challenges in the year under review. Series of problems stemming inthefinancialsectorduetolackofgovernance has further aggravated the situation. This has not only resulted inlowerdepositmobilizationbutalso has contributed in withdrawal of confidenceofgeneralpublicinthefinancialsystem.

The domestic economy is expected to have grown by 3.5%, less than the targeted growth rate of 5% for FYE 2067/68. A stronger growth rate of agricultural sector for 4.1% and service sector growth rate of 3.6% supplemented the meager growth rate of 1.4% in the industrial sector. The yearonyearinflationasmeasuredbyConsumer Price Index (CPI) increased to 8.8% in mid-June 2011.

Thetotalremittanceforthefirstten months of the FYE 2010/11 is estimated at Rs 207 bio, a growth of 14.1% in terms of USD. The merchandise export increased by 5.6%toRs58.4biointhefirstelevenmonths of FYE 2010/11. For the eleven months of the FYE 2010/11, merchandise imports increased by 5.7% to Rs 358 bio, as a consequence tradedeficithaswidenedtoRs300.27

bioforthefirstelevenmonthsoftheyearunderreview.TheoverallBalanceofPayment(BoP)recordedasurplusof Rs 249 mio and current account registeredadeficitofRs12bio.Thetotal foreign exchange reserves have been estimated at Rs 270 bio which isexpectedtobesufficienttocover8months of imports.

A positive development despite the political wrangling was the timely presentation of the budget for fiscalyear2068/69.Reductionofthe Cash Reserve Ratio (CRR) has infused much needed liquidity in the system, although its effects are expected to gradually wane in the coming months. The loosening of the provisioning,portfolioandrefinancingnorms, however, has failed to address the core fundamental problem but allowed some breathing room. Overall, the political overhang continues to dampen the economic sentiments and agenda of the country.

In line with the appreciation of the Indian Rupees against the US dollar, the Nepalese currency vis-à-vis the US dollar appreciated by 4.52 percent in mid-July 2011 compared to mid-July 2010.Nepaleserupeehasafixedparity of 1:1.6 with the Indian Rupee. The exchange rate of one US dollar stood at Rs. 71.29 in mid-July 2011 compared to Rs. 74.67 in mid-July 2010.

The Year AheadWe continue to be obsessed with thebasicsofbanking–balancingthe pursuit of growth with disciplined managementofcostsandrisks,keepingafirmgriponliquidityandcapital. We’re continuing to focus on culture and values, on the way we worktogetheracrossmultipleproductsand segments, combining deep local knowledgewithglobalcapability.Ourprudent funding, liquidity and high

asset quality strategies have been the cornerstones of our success whichstoodfirmandrobustduringchallengingperiods.Thebankremained adequately liquid to support the credit needs of the clients from boththebusinessesviz.Wholesaleand Consumer. We are committed to managing our balance sheet in a prudent manner by maintaining an optimum liquidity and strong capital ratios.

We continue to believe that tremendous opportunities lie ahead of us. Needless to mention, the conversion of these opportunities will largely depend on the political stability. Despite emergence of challenges inthefinancialservicessector,itisexpected that it will continue to grow and develop into a major pillar of the national economy.

The agriculture sector, which is one of the major components of our nationaleconomy,islikelytoyieldbetter results this year due to timely arrival of monsoon. Together with the ongoing expansion of cultivation area and enhancement in distribution of inputs and services in the rural areas owing to improved security situation, the contribution to GDP fromthissectorislikelytogrow.Theindustrial sector is estimated to grow at a mediocre pace in the coming year. Some stability in the economy can be envisaged considering the commitment made by the government to increase infrastructural expenditure and improvement in the operating environment.

There are enormous opportunities available for sustained development of tourism sector; it has potential to becomethebackboneofNepaleseeconomy. We are in the midst of celebrating the year 2011 as “Nepal Tourism Year” and this has provided

2006- 2007

2,116 2,493 3,052 3,370 3,678

2007- 2008

2008- 2009

2009- 2010

2010- 2011

Total shareholder equity in Rs. Mio



some impetus for growth of this industry.

Corporate GovernanceGovernanceacrosstheBankisrobust.Asyoumayallappreciate,bankingis a relationship business. We highly value the relationships that we have with our people, regulators, clients andtheotherstakeholders;alleffortswill be made to further deepen this relationship.

We are committed to ensuring the integrity of governance. In addition to the established committees, we have committees on Diversity and Inclusion, Health and Safety, the Environment and Community Partnership. The initiativestakenbythesecommitteeshaveaddedvaluetoourstakeholdersand delighted them. We believe good governance provides clear accountabilities, ensures strong controls, instills the right behaviors and reinforces good performance.

Mr.AnuragAdlakhaandMr.SujitMundul nominated by the Standard Chartered Grindlays Australia and Mr.RamBd.AryalasProfessional/Independent Director continue to be intheBoardofSCBNepalLimited.Asper the provisions of the Companies Act,theBoardhasappointedMrsPramila Singh as Public Director which had been vacant following the resignation of the then Public Director in July, 2010. Mr. Joseph Silvanus has been appointed as the Director totheBoardofSCBNLrepresentingStandard Chartered Grindlays Australia. I, Neeraj Swaroop, continue to represent the Standard Chartered GroupontheBoardofStandardCharteredBankNepalLimited.

Asonthedateofthisreport,theBoardis made up of the Non-Executive Chairman, one Executive Director and four Non-Executive Directors of which one is professional /independent Director appointed as per the regulatory requirement and one of them is the Public Director representing General Public shareholders as per the provisions of the Companies Act . Mr.

Sujit Mundul, the then CEO, retired from theservicesoftheBankeffectiveendof April 2011. However, he continues tobeintheBoardofSCBNL.IwouldliketorecordmyappreciationforthesignificantcontributionmadebyMr.MundultotheBankunderhisableleadership during the challenging business environment. Mr. Joseph Silvanus has been appointed by the 275thBoardMeetingheldon17thJune 2011 (3rd Ashad 2068) as CEO with effect from 15th of July 2011 for a period of 3 years.

In ConclusionIt is necessary that we remain relatively cautiousabouttheoutlookfortheworldeconomythisyear.Ourmarkets,particularly Asia, are growing strongly, and we are very positive about the longer-termoutlook.However,theweststill faces a deleveraging challenge. We are alert and always trying to anticipate the unintended consequences of policies and regulatory change. There is now a strong regulatory glare on the industryinmanyofourmarketssowecannot remain complacent. Whilst the economic uncertainties will continue, we need to further our activities by balancing theblendofconfidencewithcaution.

Recentlyavailableofficialdataoncountry performance suggests that Nepal’s economic indicators are under stress. Creation of an investor-friendly environment,combatingrisinginflationandwideningtradedeficitbroughtabout by the dwindling exports continued to remain major challenges in the year under review. In spite of the challenging situation facing the country,theBankwasabletorecorda satisfactory outcome primarily because of the commitment and focus demonstrated by the management team in creating shareholders value.

We start Financial Year 2011/12 strongly with the balance sheet in excellent shape, with good momentum. The strength of our capital position, combined with the depth of our liquidity and the diversity of our assets, gives us a balance sheet that is a powerful source of

2006- 2007

15.71 13.15 14.7 14.51 14.22

2007- 2008

2008- 2009

2009- 2010

2010- 2011

Capital adequacy ratio in %

2006- 2007

1.83 0.92 0.66 0.61 0.62

2007- 2008

2008- 2009

2009- 2010

2010- 2011

NPL / total loan in %


competitiveadvantage.Aswelookforward, it is essential that we stay focused on our strategy. We need to continue to deepen our relationships with our customers and clients and ensure we continue our focus on the basicsofbanking–liquidity,capital,riskandcostdiscipline.Itisalsoequally important that we continue to reinforce and differentiate our brand.

During the recent times, our distinctive culturehasemergedasakeydifferentiator between us and other banks.Hereforgood,ourbrandpromise powerfully captures who we areandwhatmakesusdifferent.Weare Here for good, to create value forourstakeholders,tosupportandpartner our customers and clients andtomakeapositivecontributiontothebroadercommunity.Buildinga sustainable business is an integral part of our long-term strategy to enhance shareholder value. We have beenworkingverycloselywiththeregulators. We have been rewarding our people for performance, not failure; this is what has made us the employer ofchoice.Ourbrandhasaremarkablehistory behind it and we are committed to upholding this in the future.

Our customers, shareholders and other stakeholdershaveentrusteduswithenormousamountofconfidenceandexpectations. One glaring example of this is our ability to bag the FNCCI National Excellence Award this year. On behalfoftheBank,Iwouldliketothankallourstakeholdersfortheirunflinchingencouragement, trust and loyalty.

Ministry of Finance and the Central Bankhavebeenplayingactiverolesindrivingthefinancialsectorreforms in Nepal. We welcome and appreciate the initiatives that are meant for strengthening the underlying governanceandthebenchmarkofthe industry. We have been instilling a strong compliance culture across theBank.Itiseasytobedrivenby business targets but we always consider it necessary to conduct our business the right way. As a subsidiary ofaverylargeinternationalbank

and by virtue of us being the only internationalbankinthecountry,wehavefullrealizationthatweneedtobeeven more responsible. It is important for us to show the regulators and other stakeholdersthatweareapartnerwhich is Here for good.

WeareaBankwithstrongperformance and values culture and thus place continuous focus on our peoples’ learning and development and in building their leadership capabilities. We have been ensuring that our rewards remain competitive. We strongly believe in practicing a healthywork-lifebalance.

Our Diversity and Inclusion (D&I) CouncilhasbeenplayingakeyroleintakingforwardourD&Iagenda.We continue to address the different strands of diversity eg. women, differently-abled, age, culture etc. in ourwork-force,inourproductstocustomers and in our community.

OnbehalfofSCBNepal’sBoardofDirectors,Iwouldliketothankyou,ourshareholders,foryoursupport.Itakethis opportunity to express sincere gratitude to our valued customers for depositing an unequivocal trust on us.Iwouldalsoliketothankallouremployeesfortheirhardworkandcommitment.

We have demonstrated that we have the right strategy and the right culture to deliver consistent and sustained value for our shareholders. We have great opportunities and strong ambitions. We have an increasingly powerful brand. Wehaveastrongbalancesheet.Bothour businesses have good momentum. We now are concentrating to deliver another good year.

Neeraj SwaroopChairman

2006- 2007

512.12 401.52 327.53 240.95 228.41

2007- 2008

2008- 2009

2009- 2010

2010- 2011

Net worth per share in Rs.

2006- 2007

43.78 46.95 39.27 45.98 49.11

2007- 2008

2008- 2009

2009- 2010

2010- 2011

Total credit to deposit ratio in %



Our in-depth understanding of this market, ability to quickly adapt to the changing landscape and the flair of our management to execute Bank’s strategy has played a crucial role in achieving a sustained growth.

–Joseph Silvanus, Director and CEO

CEO and Directors Report


The CEO & Director presents this reporttogetherwiththeBalanceSheetandstatementofProfitandLoss for the year ended 16 July 2011. The report is in conformity with the provisions of the Companies Act 2063 andBank&FinancialInstitutionAct2063 including the directives issued by theNepalRastraBank.

TheBankisingoodshapeandwehave delivered yet another year of stablefinancialperformance.Ourstrategy remains the same and through a disciplined execution of our strategytheBankhasbeenabletodeliver on its promises. An increase inthenetprofitaftertaxof3percentover last year to Rs. 1.12 billion is commendableinthebackdropofan extremely challenging business environment. This has been achieved byrelentlessfocusoncostandriskmanagement while pursuing business growth.

There is an increase in the volume of riskassetsby15.37percenttoRs18.66 billion compared to Rs 16.18 billionlastyear.TheBankhasbeenable to manage its credit portfolio better as a result of which the Non-performing credit to Total credit is 0.62 percent. The provisions made are adequate to cover all the potential creditlossesoftheBankasofthebalance sheet date.

After transfer to general reserve Rs.223.83 million, investment adjustment reserve Rs 51.15 million, exchangefluctuationreserveRs.18.10

million, and proposed dividend Rs. 805.08 million. Total retained earnings as at 16 July, 2011 stood at Rs. 44.41 million. This performance reflectsagoodmomentumintheunderlying businesses and disciplined managementofrisksandcosts.

RepresentationAsat16July2011,theBankmaintained nineteen points of representationwhichincludedfifteenbranches and four extension counters. In addition to this, services were also extended to our customers through twenty three ATMs located at different parts of the country.

Wholesale BankingWholesaleBanking(WB)hasconsistently delivered strong performance despite the challenging environment. The performance stood to challenges posed by less than satisfactory economic growth, pessimistic investment climate, margin squeezeandpoliticalfluidity.

WBcontinuedtotreadcautiouslytempering its growth ambitions with focusedapproachonrisk.Wehave

In Rs. ‘000s In Rs. ‘000s

16-Jul-11 16-Jul-10 % Change

OperatingProfit 1,707,316 1,612,467 6%

Transfer to General Loan Loss Provision 82,739 76,974 7%

Provision for Tax 479,153 450,496 6%

NetProfitAfterProvisionandTax 1,119,171 1,085,872 3%

IssueofBonusShares - 209,773 -100%

Proposed Cash Dividend 805,084 769,166 5%

BusinessreviewCEO and Director’s report

remainedonstrategyanddiversifiedour revenue streams by introduction of new products and offerings. The Foreign Exchange suites (of cross-currency swaps, options) introduced last year has started to catch traction. Structured Trade Finance introduced this year has already yielded results and we expect to replicate this across the Client spectrum. WekeenlywaittointroduceourProjectFinance,DebtCapitalMarketcapabilitiesalong with Corporate Advisory expertise tothelocalmarketsothatourselectedClients can gain from international best practices.

The operating environment is expected to remain volatile. However, withfocusedapproachonriskandperformance to strategy we anticipate the performance to improve over the coming year.

Consumer BankingIn line with its strategy, Consumer Bankingcontinueditsfocuson3threekeyissues:1. Product innovation2. Service Culture3. AppropriateRisksControls

Consumer Banking: TheBankisaleaderinofferingwiderangeofdifferentiatedlendingproductsintheNepaleseConsumerBankingmarket.


During FY 2010/2011, the business continued to encounter numerous challenges posed by prolonged political conundrum and subdued economic environment resulting in acute liquidity crisis coupled with slowcreditoff-take.Thehighinterestrate regime has had severe impact on margins and credit growth. Fee income has also been impacted in the absence of new stream of growth avenues.

Theunconducivemarketconditionsin the realty and auto sector have also impacted the credit growth in Home Loan and Auto Loan category that contributes over 80% to the consumer bankingriskassets.

The migration of deposit from Savings BanktohighcostDepositproductshave had a bearing on the overall interest income of the business.

Despitetheenhancedriskintheoperating environment, credit quality has been maintained through effective due diligence and timely follow-through on delinquent accounts.

Despite the uncertainties prevailing in themarket,theConsumerBankingcontinued to invest in products and service innovation. As part of our commitment towards customers, the business executed the following:1. OpeningofaBranchinTeku2. InstallationofanATMinBiratnagar

Branch3. LaunchofBusinessPlusproductto

cater to the SME segment

4. LaunchofMoneyMaximizertocater to those eligible for opening SavingsBankAccount

5. LaunchofBancassuranceinarefreshed manner

6. Flexibility in terms of interest and tenure for opening Fixed Deposit

7. Product innovation for the SME segment for both asset and liability products

To gauge perception of our customers, theBankconductedaCustomerSatisfaction Survey; with net promoter scorethefirstofitskindintheindustry.Basedontheoutcomeofthissurvey,the business has committed to bring about changes to enhance the customer experience on an on-going basis.

We will continue our steady performancebystrikingacarefulbalancebetweenriskandrewardforachieving a sustained growth.

Future PlansWe will continue to remain cautiously optimistic and any paradigm shift will depend on the operating environment. Fortheyear2011/2012,ourkeyfocus will continue to be on Customer Service and Small and Medium Enterprises. In order to expand our fee based revenue, product innovation will continue particularly in the areas of Trade, funds transfer and Bancassurance.AutoandMortgageloansthatcontributesignificantlytoour asset base will continue to receive focus in our chosen segment. Credit Card and Personal Loan will be

Extension of Network: Bank’s15thBranchinTekuopenedforbusiness during the 3rd quarter of 2010.

Leadership Team meet: Country Leadership Team (CLT) meets regularly to discuss business and other agendas.


bundled and cross-sold with Payroll Accounts and other asset products in order to maintain asset quality and minimizetheturnaroundtimefortheseproducts.

The slower growth rate of the economy coupled with increased players in a nascentfinancialmarketcontinuesto increase competition amongst the players.

Themarketcontinuestocompeteforshareintheworkingcapital,tradeand term loan space. The need for deregulation is also felt in longer term investments in foreign currency and Foreign Exchange related product suites. Enhanced level of awareness andneediscalledforinriskmitigationand management techniques.

Withawellcapitalizedbalancesheet,strongriskmanagementcultureandliquid balance sheet, we are poised for growth in the coming year. Should the country see a timely management of current political stalemate, Nepal stands at the threshold of growth impetus–theBankcanfacilitatethegrowth through increased investments and opportunities.

Overall, we remain cautiously optimistic on the strength of our balance sheet and opportunities that Nepal offers, providedthatriskperceptionsaretempered down on account of political stalemate, improved security situation and good governance.

Credit EnvironmentAsaresultoffluidanduncertainpoliticalclimate,theriskenvironmentcontinuedtoremaindifficultduringthelastfiscalyear.Thecountrywasrunbycare-takergovernmentsforlongperiods of time. The UNMIN, which was mandated to monitor and manage the peace process, exited the country during middle of the year. There were uncertainties around extension of Constituent Assembly term.

Similar to past years, Nepalese Economy witnessed a low economic growth,wideningtradedeficitandliquidityshortages.NegativeBOPsituation, perennial shortage of liquidityinthebankingsectordueto delay in budget announcement, low government spending and realty sector issues etc, directly impacted thegrowthofeconomy.Fewbanksandfinancialinstitutionsfacedsevereproblems and became incapacitated to return customer deposits. Severity in liquidity contributed in rising cost of funds by impacting the credit off-takes.Recurringlabourunrests,acutepower shortage and high borrowing cost paralysed the industrial sector. Deteriorating investor sentiments and worsening credit environment posted hugechallengesinfrontofthebankingsector.

Inspiteofthis,SCBNepalhasbeenable to maintain credit quality owing toitsproactiveriskmanagementapproach.Wecontinuedtostickto

thefundamentalsofgoodbanking.Clear strategy and discipline, strong relationship with the clients, rigors around the portfolio quality and debate onrisk-returndynamics,etcwerethe central points to our success in riskmanagement.Comfortablecreditdeposit and capital adequacy ratios clearlyreflectourdisciplinedapproachinmanagingliquidityandcreditrisks.

AuditorM/S CSC & Co., Chartered Accountants, were appointed as Statutory Auditors for FY 2010/11 by the 24th Annual General Meeting oftheBankheldon11thNovember2010.Wewouldliketothankthemfor their contribution made during their tenureasAuditorsoftheBank.Asper the recommendation of the Audit Committee, this meeting will decide on the appointment of the auditor for next year.

Proposed Dividend and Bonus SharesThe 281stmeetingoftheBoardofDirectorsoftheBankhasproposeddividend to the shareholders of the Bankfortheyearended16July2011at the rate of 50 percent in cash.

Joseph SilvanusDirector and CEO

Financial Markets: SCBNepalisleadingthewayinintroducingvariouskindsofinnovativeandworldclassfinancialmarketproductsinNepal.

BusinessreviewCEO and Director’s report


Our Approach to Corporate Responsibility

Sustainability Our social and economic impactWe believe that by doing things the rightway,bankscanbepowerfulforcefor good.

Throughthefinancialcrisisandchanging political and regulatory environmentswehavestoodfirmin our commitment to building a sustainablebusinessasabank,delivering value to our customers and shareholders whilst contributing to the communities in which we live and work.

Wepassionatelybelievethatbankscan be powerful contributors to economic progress in societies by doing things the right way. We aim to have a positive impact in three ways: by contributing to the real economy, by promotingsustainablefinance;andbyleading the way in our communities.

Contributing to the real economy Our aim is to promote sustainable growth in the real economy, through ourcorebusinessofbanking.Millionsof people across our footprint are eitherunbankedorseverelyunder-servedbyfinancialinstitutions,restricting their economic activity. Wideningtheaccesstofinanceisacore part of our strategy to have a positive impact on communities. We focus on offering relevant products and services that we understand fully to clients and customers with whom we have deep relationships.

Celebrating World Environment Day: Bank’ssignatureeventWalkathonwasheldfor8thsuccessive year in a row in November 2010.


Access to financeThere are many people living within communities who are unable to raise financeleadingtoadirectimpactoneconomicactivity.TheBankiscommitted to improve access to financialservicestosuchpopulationof Nepal by helping them bring in the realmoffinancialservices.

TheBankcurrentlyholds Rs. 52,190,000 in shares of RMDC; and an additional Rs. 6,000,000 inotherruraldevelopmentbanks.Further,theBankhasaloanexposureof Rs. 494,000,000 towards the deprived sector.

Responsible selling and marketing We focus on clients and customers, not products. Our determination to treat clients and customers fairly and respondtotheirrealneedsisfirmlyembedded in our responsible selling andmarketingpractices.

In2010,ConsumerBankingCustomer Charter was rolled out, our commitment to needs-based selling and service excellence. In Wholesale Banking,wemaintainedourfocuson deepening our client relationships and investing in staff training to ensure that our employees fully understand the products we sell. We aim to be thecorebankformoreofourclients,providing relevant solutions for their needs,fromcommercialbankingtostrategic solutions.

Tackling financial crime Toguardagainsttheriskoffinancialcrime within our business, we focus on training our employees, strengthening our screening systems, and ensuring that our policies and procedures are comprehensive and up-to-date. The vigilance of our employees is paramounttooursuccessinfightingfinancialcrimeinallitsforms.Weare committed to combating money laundering,terroristfinancing,fraud,briberyandmarketabuse.SCBNepalwasthefirstBanktorolloutKnowYour Customer (KYC) procedures for itscustomers.TheBankfollowsthelaws, regulations and directives issued by Financial Information Unit and the policies/proceduresofSCBGrouponAnti-Money Laundering KYC/CDD.

Great place to work We focus on attracting the best talent and enhancing employee engagement inourcontinuousdrivetomaketheBankagreatplacetowork.Forus,high performance is not just about generatinglargeprofits;itisalsoaboutliving our values, demonstrating the many ways that we are Here for good.

We also progressed on our targets for diversity and inclusion, ensuring employees continue to feel valued and appreciated for who they are. The BankhasaDiversityandInclusionCouncil in place.

BusinessreviewOur aproach to corporate responsibility

Community InvestmentStandard Chartered Nepal Community Partnership Forum (SCNCPF) has beenconstitutedbytheBanktoundertakevariouscommunityinitiatives in Nepal. It is registered with DistrictAdministrationOffice;affiliatedwith Social Welfare Council and is represented by staff members from the BusinessesandFunctions.

ThetwomajorinitiativesoftheBanklaunchedin2003underits‘BelievinginLife’campaignare‘SeeingisBelieving’and ‘Living with HIV’.

Seeing is Believing SeeingisBelievingisaglobalcollaborationtotackleavoidableblindnessacrossourmarkets.Launched in 2003 as a simple staff led initiative to raise enough money for 28,000 cataract operations, the programme has evolved rapidly. In 2008, having already raised $17 million we committed to invest a further $20 million to reach an additional 20 million peopleby2014.Asof2010,thankstotheBankmatchingcontributionsdollarfor dollar, we have reached 79 percent ofthattarget.By2014,wewillhaveraised a total of $37 million since the programme’s inception, impacting over 38 million people.

The annual fund raising event ‘Walkathon2010’washeldsuccessfully on 20 November. About 450peopleparticipatedinthewalk-staffoftheBank,staffoforganizations

Going Green: Around 5,000 tree saplings were planted inBisankhunarayan,Lalitpurintheyear2067/68.

Seeing is Believing: TheBankenteredintoanagreementwith Tilganga Institute of Ophthalmology (TIO) to sponsor 1,000 cataract surgeries in the year 2068/69.


partneringtheBankfortheevent,visually challenged students and Living with HIV colleagues. We have been conducting this event since 2003 and it continues to remain a signature eventoftheBank.

TomarktheWorldSightDay,variousinitiativeswereundertakentocreateawareness focusing attention on the issues of avoidable blindness and visualimpairment.TheBankenteredinto an agreement with Tilganga Institute of Ophthalmology (TIO) to conduct at least 40 screening camps between August 2011 and July 2012 for the underserved population of Kathmandu valley and its neighboring districts. Similarly, on an ongoing basistheBankalsoorganizesvariouseye camps outside Kathmandu valley in partnership with local eye hospitals; our people in the outside valley branches actively participate during such camps in the capacity ofVolunteers.TheBankhasbeeninstrumental in supporting restoration ofsightto~5000peopletilldate,bysponsoring eye camps and intraocular lenses for cataract surgeries in partnership with TIO and other local eye hospitals.

Nepal was one of the few countries to receive support under the Group’s SeeingisBelieving(SiB)PhaseIVprogram.AfinancialassistanceofUSD One million has been received byNepalfromtheSCBGroupfor establishing an eye hospital in BiratnagarunderEasternRegionalEye

Care Program (EREC-P). This hospital, whichiscurrentlyunderfinalstageofconstruction,islikelytobeformallyinaugurated in November 2011.

Living with HIVLivingwithHIV,ourworkplaceeducation programme, reached its target to educate one million people globally about HIV and AIDS. Launched in1999,ournetworkoforganizationshave delivered HIV education to over 1,000 staff volunteers and partner organizationshavedeliveredHIVeducation to over 1.6 million people- 970,000 this year. Pledges from partners to deliver their own education programmes now total 2.3 million.

LivingwithHIV-aworkplaceHIVeducation programme, initially rolled outbytheBankin1999,currentlyinvolvesanetworkofmorethan1,150 HIV Champions in 50 countries globally. In Nepal, we have 25 HIV Championswhoworktoraiseawareness of HIV and AIDS in the Bankandwithexternalorganizations.As in the past, this year also the Bankconductedsuchprogrammesfor the students of Sisnery Higher Secondary School, Lamatar, Astha WomenSchool,Bhaktapurandforthe household women of Sangla VDC. This program is ongoing.

World AIDS Day was celebrated on 1stofDecemberbyorganizingvariousactivitieswithintheBank.Someof the initiatives included painting competition, screening of HIV/AIDS

Employee Volunteering: TheBankorganisesblooddonationcamps regularly under its Employee Volunteering Program.

Living with HIV: TheBanksignedapartnershipagreementwithShaktiMilanSamajinfurtheringtheLwHIV/AIDS agenda.

Creating a better learning environment: TheBankextendedfinancialassistancetoupgradetheScienceLabofMahankalSchool of Mahabouddha.


video in 3 of Kathmandu’s leading theatres, voluntary counseling and testing (VCT), wearing of red ribbons, spotquizforcustomersvisitingthebranchesandrunningworkshopforfamily of our staff members.

Standard Chartered Nepal Community Partnership Forum (SCNCPF) recently enteredintoanagreementwithShaktiMilan Samaj (SMS) to impart the ‘Train theTrainer’workshoptofewstaffofSMS with an aim to roll out LwHIV program and educate the general public on the epidemic.

Our HIV/AIDS Champions conducted numberofworkshopsthroughouttheyear in imparting awareness about the epidemic to number of schools, colleges and other communities.

Focus on Youth, Health, Education and Environment In line with our commitment to reiterate thattheBankisHereforgood,wehaveundertakenvariousinitiativesviz.:

• TheBankcontinuestosupporttothe deserving students of Shree Mahendra Shanti High School, Balkotbyprovidingincentives/scholarships through VISCOSS –Nepalfortheninthconsecutiveyear.TheBankhasbeensupporting the school since the year 2002.

• A total of 5,200 trees were plantedatBishankhunarayanandPulchowkEngineeringCollegeareaat the initiation of GTO team under ‘Green Your Flight’ campaign. In addition,~700treeswereplantedby our staff to celebrate the World Environment Day on 4 June 2011.

• TheBanksupportedShreeMahankalSecondarySchool,MahaBoudhawith10setsofcomputers. This initiative aimed to help the students to be familiar with computerskillswhichwilleventuallyhelp them to strengthen their career.TheBankalsosupportedthe school by extending support in upgrading its science laboratory with necessary equipment worth approximately NPR 80,000/-.

• Successful conclusion of the ‘Surya Nepal Masters Golf Tournament 2011’ which was held from 13-17 April. The event is considered to be one of the prestigious professional golftournamentsorganizedinNepal and generated good level ofvisibilityfortheBrandlikeinthepast.

• International Women’s Day was celebrated on 7 March by conducting several activities such

as distribution of coffee mugs to all lady staff by male colleagues andbyholdingasmallworkshopfollowed by Hi-tea for a group of femalecustomersoftheBank,female dignitaries of the society and all female staff completing over 20yearswiththeBank.

• In line with the D&I initiative, the Bankorganisedanexhibitioncumsale of embroidered sarees and other hand made goods produced by our special friends of Karuna Bhawan.TheBankhadsupportedthewomenofKarunaBhawanbyextendingfinancialassistanceforaskilltrainingprogramonembroideryto help them engage in income generating activities and to lead a dignifiedlife.

• To celebrate World Water Day on 22 March, various activities were organised by the Environment Committee. About 120 staff fromtheBankparticipatedintheWalkathonorganisedbyWaterAidinpartnershipwiththeBank.

Seeing is Believing: Eye camps are held in different parts of the country in line with our SeeingisBelievinginitiative.Ourpeopleactivelyengageinvolunteeringactivities.

BusinessreviewOur aproach to corporate responsibility

Celebrating World Environment Day: Staff displaying playcards bearing awareness messages in celebration of World Environment Day 2011.


Here for people, Here for good People Strength:

Here for good is our brand promise: a promise of commitment to our people including our employees, our markets,ourcustomersandclients,and our communities. It says who we are, what we stand for and what makesusdifferent.Nothingismoreimportant than our people and the peopleweworkfor.Ourstaffhasbeen our strength in achieving our commitment to build our longstanding relationships with customers. We have thebestpeopleworkingtothehigheststandards and as a team with the one bankspirit.

Thisfiscalyear2067/68,ourstrengthof staff is 429 with major focus on diversity and inclusion and a male female ratio of 60:40. We have strong foundations and capabilities inConsumerBanking,Wholesale

Banking,FunctionsandtheOperationsTeam.

Withinthisfiscalyear,3ofourstaff completed 25 years, 18 staff completed 20 years, 2 staff completed 15 years, 2 staff completed 10 years and 15 staff completed 5 years of serviceattheBank.ThesestaffwerefelicitatedbytheCEOwithcertificatesand awards.

Thisfiscalyearwehavesteppedupby embedding our values further into our processes for managing individual performance. We have established aclearerlinkbetweenperformanceand reward and how our people live ourvalues.Byusingournewonlineperformance management system, all ouremployeesareaskedtoassesstheir own performance against our values. This assessment is then reviewed by their line manager as part of the basis for determining their annual reward.

Building our leadership capabilitiesLeaders are the one who lead by exampleandthustheBankhasbeeninvesting on developing the leadership capabilities across the business. Succession plans for all of our leaders are in place. This helps us to ensure that our high performing employees are fully prepared for opportunities as they become available.

All our leaders are groomed through different ways such as one-on-one

CEO Here for good Awards 2011: CEO Here for good Awards were presented to individuals and/or the teams for their outstanding achievements.


coaching and team support, in-house leadership programs, management development programs, local programs related with leadership buildingskills,groupprograms,short term attachment, involvement in projects, delivering programs to demonstrate their leadership attributes and giving full ownership of their people’s data in the system.

Bankhasalsobeenfocusingontalent exchange program by providing opportunity and exposure to our staff byworkinginInternationalmarketforcertain period, learn on the job and migrate best practices in the country through this experience. A total of six staff had gone for the short term attachment program in different cities of India. Two staff were on a temporary assignmentinSCBSriLankaforimplementation of Group projects/initiatives and as a relief staff. Five of our staff joined other group points i.e,SCBQatar,Dubai,SingaporeandVietnaminthisfiscalyearaspartofcross border moves. Similarly, two stafffromSCBIndiajoinedusinseniorleadership position- Chief Executive Officerandleadershipposition-Headof Distribution and Alternate Delivery Channels.

Growing our employee engagementThe commitment of our employees is fundamental to our business success. Wetrackouremployeeengagementannually,usingtheGallupOrganization’sQ12EmployeeEngagementSurvey.Knowing what Standard Chartered

standsforandwhatmakesourbranddifferent from our competitors is already anindicatorinQ12.

ThisyearcountryQ12scorewas4.27.This employee engagement score was due in part to a planned and concerted effort to strengthen our management culture. All the leaders/ line managers were encouraged to place more emphasis on staff development, both formally through our performance management process and informally in everyday conversations. Teams were also encouraged to integrate their action plans for increasing employee engagement into their overall business strategies.

BesidesQ12,variousstaffengagement and CSR/ Staff Volunteering programs were conductedinthisfiscalyear:

Battle of the Brains: Apanbankengagementinitiativeofaquizcompetition“BattleoftheBrains”was run in a span of about a month’s time with enthusiastic participation of 12 teams representing all the differentBranchesandUnitsoftheBank.Thiscreatedaveryhighlevelof engagement, excitement and unveiled great talent amongst the staff. Participation and the Intellect displayed by all the teams at the competition were highly appreciated by all.

Soaltee Crowne Plaza Super Sixes 2010: Some staff got an opportunity torepresenttheBankandparticipateinanannualcorporatecricket

tournament in the country Soaltee CrownePlazaSuperSixes2010.OurBankteamwasrunnersupandoneofourstaffwasconferredthe“BestBowler”awardofthetournament.

Boss Corporate Quiz 2010: Three stafffromtheBankrepresentedtheBankintheBossCorporateQuiz2010held on October 1, 2010.

Standard Chartered’s Got Talent: The Group’s global talent competition ‘Standard Chartered’s Got Talent’ created a high level of engagement within the staff. All staff in Kathmandu were privileged to the live performance of 5 groups in Kathmandu on 18 March at a town hall. The winning entry was decided by a jury.

Annual Staff PartyAnnual staff party was held on April 29, 2011. In this party, 23 staff were felicitated by Loyalty awards by the CEO for their service ranging from 5-25 years. At this staff annual party farewell was bid to Sujit Mundul, CEO Nepal who retired with effect from 1st May 2011. This saw a high level of staff turnout and participation.

Staff Volunteering ProgramsClean Rani Pokhari Campaign: UnderoneoftheBank’sEmployeeVolunteering Programme, “Clean Rani PokhariCampaign”onJuly31,2010about 115 staff participated in cleaning up the areas in and around Rani Pokhariakeyhistoricalmonumentinthe Kathmandu Valley.

BusinessreviewHere for people, Here for good: people strength

Health and Safety week: TheBankorganizedatalkprogrambyDr.BharatRawaton‘StressManagement’for staff members to share the clues for leading a healthy life.

Bidding Farewell: A warm farewell was accorded to outgoing CEOofSCBNepal,SujitMundulwhoretiredafter8yearsofservices in Nepal.


Blood Donation Camp: 54 Staff volunteered in conducting a blood donation camp in collaboration with Nepal Red Cross Society on 7August and 55 staff donated blood in a BloodDonationProgramsponsoredbytheBankandorganizedbyTradeAssociationofPeople’sPlazaonSeptember 18, 2010.

Tree Plantation: All staff in GTO volunteered to plant 5000 plants at a communityforestlocatedinBishankuNarayan VDC, Godavari, Lalitpur on Saturday 14th August, 2010 at a programorganizedbyGTO.

Eye Camp: 23 staff volunteered and made 2 Eye camps very successful in partnership with Tilganga Eye Centre (TEC)atLubhu,LalitpurandAnekot,Kavre(NearPanchkhal)

Sporting ActivitiesBankorganizedafunfilleddayfortheunderprivileged children of Shining Stars Rehabilitation Home (SSR) on Saturday, 18 December, 2010. A total of 25 staff volunteered for this program inorganizingsportingActivitiessuchasvolleyball,Pingpong,Badminton,Carom and Story Telling.

Standard Chartered Nepal WalkathonTheannualfundraisingevent–“StandardCharteredNepalWalkathon2010” with an objective to raise funds for our various community activities andengageourstaffwasorganizedonNovember 20, 2010. The event was

very successful with about 90% of staff participation.

Employee Volunteering: It is crucial fortheBanktohaveouremployeesadeepunderstandingofthelocalmarketsand community where we operate. Ourpeoplehavebeenplayingakeyrole in appreciating the challenges and demonstrating the required commitment whileworkinginpartnershipwiththe communities to overcome these challenges. As ambassadors of our brand, we have been empowering our employees by providing them opportunities to participate in various community programs through Employee Volunteering(EV)andchampionnetworks.This activity is at the heart of our unique culture and is the reason why many of our peoplechoosetoworkforus.

Employee Volunteering program is an internalinitiativeoftheBankwherebyour staff members are encouraged to participate in community activities. As per the program, the staff are entitled for three days leave in addition to their annual leave to volunteer in the community related activities.

Our people actively particpate in the themed program such as International Women’s Day, World Sight Day, World Environment Day, Earth Day and World AIDSDaybyorganizingvariousinternaland external activities. EV activities are mainly directed towards our global initiativessuchas,SeeingisBelieving,Living with HIV and Environment related themes.

Battle of the Brains: AninternalhuntoftalentsthroughquizcontestwasorganisedbytheBank.

SC’s Got Talent: NepalorganizedaninternalcompetitiontofileanentryintheGroupwideSC’s Got Talent hunt.

Diversity and Inclusion: TomarktheInternationalWomen’sDay,ladystaff members were presented with mugs by their male counterparts.


World Water Day: TheBankpartneredwithWaterAidincelebrationofWorldWaterDayinwhich~120staffmembersparticipatedinawalkathonunderthetheme‘WalkforWater’.

Enabling Diversity and InclusionDiversity and Inclusion (D&I) is embedded in our values and forms as inherent part of our brand and culture. We strive to offer all our people an inclusive and supportive environment in which they feel valued and appreciated for who they are and what they bring totheBank.

We strongly encourage gender diversity, with women representing 40percentofourstaffinthisfiscalyear. During the year we continued to develop our female leadership talent together with male staff.

D & I Council Members initiated various activities that made both male and female colleagues as well as customers delighted such as Celebration of Teej Festival with the women and children of KarunaBhawan,introductionofBuddySystem,newjoinerwelcomecommunication, celebration of International Women’s Day 2011 by various engaging activities conducted includingatalkprogrambyeminentwomen achievers in the country in variousfields.

Learning and Development ProgramsWe place great emphasis on training and the development of our people, on the professional and management development of each individual staff. Each individual has their own learning and development program which is discussed and agreed with theirlinemanagereveryyearviz.,Individual Learning and Development Program (ILDP). Number of learning opportunities - In-house trainings, Local programs by external trainers/ organizations,Grouptrainings,Shortterm attachment programs in the Group,WebBasedTrainings,Onthejob learning inside and outside the countrywereorganizedduringthisfiscalyear.

Various professional and managerial development programs were organizedforourstaffwiththehelpofOrganizationLearningTeam,Indiasuch as Corporate Credit Curriculum, Great Managers Program, Leadership Essentials, How to Unleash your personal potential, Team Effectiveness, HowtocapitalizeandLeverageonNetworkingetcwhichwereattendedby a total of 158 staff from different departmentandbranchesoftheBankand with a total of 342 mandays. Country Induction Course for 35 new joinerswereconductedinthisfiscalyear which was facilitated by the senior managersoftheBank.

GTO Offsite: GTO staff engaged in activities during the offsite held at Godavari.

BusinessreviewHere for people, Here for good: people strength

www.standardchartered.com/npStandard Chartered Annual Report 2010-201122 www.standardchartered.com/npStandard Chartered Annual Report 2010-201122


Corporate Governance

24 Our Approach to Corporate Governance30 Additional Information34 BoardofDirectors36 Management Team



Our approach toCorporate Governance

A SynopsisFollowingarethestepstakenbythe management for strengthening Corporate Governance in the organization.

TheBoardofStandardCharteredBankNepalLimitedisresponsibleand accountable to the shareholders and ensures that proper corporate governance standards are maintained.

The Audit Committee meets quarterly to review the internal and external inspection reports, control and compliance issues and provides feedbacktotheBoardasappropriate.

The Manco (Management Committee) representedbyallBusinessandFunction Heads is the apex body managing the day to day operations oftheBank.ChairedbytheCEO,it meets at least once a month for formulating strategic decisions.

The Annual General Meeting is used as an opportunity to communicate with all our shareholders.

To ensure compliance with applicable laws, enhance resilience to external eventsandavoidreputationalrisk,theBoardhasadoptedSCBGrouppolicies and procedures.

UltimateresponsibilityofeffectiveRiskManagementrestswiththeBoardsupported by Audit Committee, Manco,CountryOperationalRiskCommittee (CORC), Asset and LiabilityCommittee(ALCO)andRiskManagement Committee (RMC)

Embracing exemplary standards of governance and ethics wherever we operate, is an integral part of our Strategic Intent. The Group Code of Conduct is adopted to help us meet this objective by setting out the standards of behavior we must follow with each other and with our customers, communities, investors and regulators.

AnalysisTheBoardofStandardCharteredBankNepalLimitedisresponsiblefor the overall management of the Company and for ensuring that proper corporate governance standardsaremaintained.TheBoardis also responsible & accountable to shareholders.

ThereportdescribeshowtheBoardhas applied the principles and provisionsoftheNepalRastraBankdirectives on Corporate Governance and the provisions of Companies Act,2063andBanksandFinancialInstitutions Act, 2063 (the “Corporate Governance Code”). The directors confirmthat:

l Throughout FY 2067/068, the Company complied with all the provisions of the Corporate Governance Code. The Company complied with the listing rules of NepalStockExchangeLimited.

l Throughout FY 2067/068, the Company was in compliance with the Securities Registration and Issuance Regulation, 2065

The Company has adopted a Code of Conduct regarding securities


Corporate governanceOur approach to corporate governance

transactions by directors on further terms no less than required by the Nepal Rastra Bank Directives and the Companies Act and that all the Directors of the Bank complied with the Code of Conduct throughout FY 2067/068.

The BoardAs at the date of this report, the Board is made up of the Non-Executive Chairman, one Executive Director and four Non-Executive Directors of which one is professional /independent Director appointed as per the regulatory requirement. As per the provisions of the Companies Act, the Board has appointed Mrs Pramila Singh, a public shareholder, as Public Director which had been vacant following the resignation of the then Public Director in July, 2010.

The Board composition complied with the regulatory requirements. Four Directors including the Non-Executive Chairman are nominated by the SCB Group to represent it in the Board in proportion to its shareholding. The Board meets regularly and has a formal schedule of matters specifically reserved for its decision. These matters include determining and reviewing the strategy of the Company, annual budget, overseeing statutory and regulatory compliance and issues related to the Company’s capital. The Board is collectively responsible for the success of the Bank.

During the year under review, the Board held 12 board meetings of which 3

were held by circulation. The Directors are given accurate, timely and clear information so that they can maintain full and effective control over strategic, financial, operational, compliance and governance issues.

The following table illustrates the number of Board and Audit Committee meetings held during the year under review:

Audit Board Committee

Number of meetings 12 6in FY 2067/068Neeraj Swaroop 9 -Anurag Adlakha 4 -Sushen Jhingan 9 -Sujit Mundul 14 1Ram Bahadur Aryal 14 6Pramila Singh 6* -

* Director Pramila Singh attended her first board meeting on 29th December 2010 (15th Poush 2067).

Audit Committee As required by the local regulations, the Board has formed an Audit Committee with clear terms of reference. The Audit Committee meeting is normally held on a quarterly basis. The Committee reviews internal audit reports, Nepal Rastra Bank Inspection reports, Statutory Audit reports, Bank’s financial condition, internal audit/controls issues, compliance issues, etc. The Committee provides feedback to the Management through the Board of Directors as appropriate.

The Independent/Professional Director chairs the Committee for ensuring complete independence. The composition of the Audit Committee as on 16th July 2011 was as below:Ram Bahadur Aryal - Non Executive Director- Chairman Anurag Adlakha - Director - Member Sujit Mundul, Director - Member Gopi Krishna Bhandari - Member Rabin Shrestha - Member Secretary All members of the Audit Committee are either non-executive directors or independent of business. The responsibilities of the Committee are in congruence with the framework defined by the NRB Directives and the Companies Act.

Management Committee (Manco)The Management Committee (Manco) represented by all Business and Function Heads of the Bank is the apex body that manages the Bank’s operation on a day to day basis. Manco meets formally at least once a month and informally as and when required. The strategies for the Bank are decided and monitored on a regular basis and decisions are taken jointly by this Committee. The CEO Chairs the Manco.

As at the date of this report, the composition of the Manco was as follows: Mr. Joseph SilvanusChief Executive Officer Mr. Anurag MishraHead Wholesale Banking

Annual General Meeting: Bank’s AGM for FY 2066/67 was successfully conducted on 11 Nov 2010.


Ms. Anju SharmaHeadConsumerBankingMr. Suraj LamichhaneActingChiefFinancialOfficerMr. Diwakar PoudelHead Corporate Affairs Ms. Bina RanaHead Human Resources Mr. Gopi BhandariSenior Manager CreditMr. Shobha Bd. RanaHead Legal & Compliance & Acting ChiefInformationOfficer

Relations with Shareholders TheBoardrecognizestheimportanceof good communications with all the shareholders. There is regular information,bothfinancialaswellasnon-financial,publishedbytheCompany for the shareholder’s information. The AGM is used as an opportunity to communicate with all the shareholders.

The notice of the AGM, as required by the Companies Act, was sent to shareholders at least 21 days before the date of the meeting at their mailing addresses available in the Company’s records. In addition to that the notice and agenda of the AGM were also published twice in the national level daily newspaper for the shareholders information.

Internal ControlTheBoardiscommittedtomanagingrisksandincontrollingitsbusinessandfinancialactivitiesinamannerwhichenablesittomaximizeprofitablebusiness opportunities, avoid or

reduceriskswhichcancauselossor reputational damage, ensure compliance with applicable laws and regulations and enhance resilience to external events. To achieve this, theBoardhasadoptedtheSCBGroup policies and procedures of riskidentification,riskevaluation,riskmitigation and control/monitoring.

The effectiveness of the Company’s internal control system is reviewed regularlybytheBoard,itsCommittees, Management and Internal Audit. The Audit Committee has reviewed the effectiveness of theBank’ssystemofinternalcontrolduringtheyearandprovidedfeedbacktotheBoardasappropriate.

The Internal Audit monitors compliance with policies/standards and the effectiveness of internal control structures across the Company through its program of business/unit audits. The Internal Audit function is focused on the areas ofgreatestriskasdeterminedbyarisk-basedassessmentmethodology.Internal Audit reports are periodically forwarded to the Audit Committee. ThefindingsofallauditsarereportedtotheChiefExecutiveOfficerandBusinessHeadsforinitiatingimmediate corrective measures.

Risk Governance Throughitsriskmanagementframework,theBankseekstoefficientlymanagecredit,marketandliquidityriskswhicharisedirectlythroughtheBank’scommercial


activities as well as operational, regulatoryandreputationalriskswhicharise as a normal consequence of any businessundertaking.Aspartofthisframework,theBankuses a set of principles that describe its riskmanagementculture.Theprinciplesofriskmanagementfollowedinclude:l Balancingriskandreward. Disciplinedandfocusedrisktaking

to generate a return.l Takingriskwithappropriate

authorities and where there is appropriate infrastructure and resource to manage them.

l Anticipatingfuturerisksandensuringawarenessofallrisks.

l Efficientandeffectiveriskmanagement and control to gain competitive advantage.

Ultimate responsibility of the effective managementofrisksrestswiththeBoard.TheAuditCommittee,withinanauthoritydelegatedbytheBoard,reviewsriskareasandmonitorstheactivities of Management Committee (Manco),CountryOperationalRiskCommittee (CORC), Asset and LiabilityCommittee(ALCO),andRiskManagement Committee (RMC).

The committee governance structure seekstoensurethatriskmanagementstandards and policies are cascaded downthroughtheorganizationfromtheBoardtobusinessandfunctionallevel.Information is communicated through the functional, business committees totheBoardwhichseekstoensurethatkeyriskissuesareaddressedatthe appropriate levels and to provide assurance that standards and policies are being followed.

Credit Risk CreditriskistheriskthatcounterpartytoafinancialinstrumentwillcauseafinanciallosstotheCompanybyfailing to discharge an obligation. Credit exposure includes individual borrowers and connected groups of counterparties and portfolios, in the bankingandtradingbooks.StandardsareapprovedbytheBoardandthedelegation of credit authorities are overseen by the CEO. Procedures for managingcreditriskaredeterminedatthebusinesslevelwithspecificpolicies and procedures being adapted todifferentriskenvironmentandbusinessgoals.Businessriskofficersareinplacetomaximizetheefficiencyondecisionmaking.TheCreditRiskismanagedbyRiskManagementCommittee, chaired by the CEO. This Committee, inter alia, reviews and monitorstheBank’sAssetsPortfolio.

Market Risk Marketriskistheexposurecreatedbypotentialchanges/volatilityinmarketpricesandrates.TheBankisexposedtomarketriskarisingprincipallyfromcustomer driven transactions. The objectiveoftheBank’smarketriskpolicies and processes is to obtain the bestbalanceofriskandreturnwhilemeeting our customers’ requirements. MarketriskismanagedbyAssetandLiability Committee (ALCO) which agreespoliciesandlevelsofriskappetite.

Liquidity Risk LiquidityriskisdefinedastheriskthattheBankeitherdoesnothavesufficientfinancialresourcesavailableto meet all its obligations and commitments as they fall due, or can access them only at excessive costs. ItisthepolicyoftheBanktomaintainadequate liquidity at all times and for all relevant currencies, and hence, to be in a position to meet all obligations astheyfalldue.Theliquidityriskismanaged both on a short term and a medium terms basis. In the short term, the focus is on ensuring that thecashflowdemandscanbemetthrough asset maturities supported by customer deposits and wholesale borrowings where required. The Asset/Liability Management Committee (ALCO) under the chairmanship of CEO meets at regular intervals to review the Deposit/Investment strategy of the Company and regulatory compliance. The ALCO is responsible for both statutory and prudential liquidity.

Operational RiskOperationalRiskistheriskofdirectorindirect loss due to an event or action resulting from the failure of internal processes, people and systems, or from external events. To ensure that thekeyoperationalrisksaremanagedin a timely and effective manner, a frameworkofpolicies,proceduresand tools has been established within theBanktoidentify,assess,monitor,controlandreportsuchrisks.



ArobustOperationalRiskManagementandAssuranceFramework(ORMAF)hasbeenestablishedasperSCBGroup guidelines to supervise and managetheoperationalriskintheBank.ACountryOperationalRiskCommittee(CORC)underthe chairmanship of CEO is in place to supervise and direct the managementofoperationalriskatcountrylevelwhilstBusinessandFunctionalOperationalRiskGroupsare responsible for managing business andfunctionalleveloperationalrisksintheBank.Similarly,eachunitintheBankhasaUnitOperationalRiskManager responsible for managing the operationalriskattheunitlevel.

Bank’sexistingoperationalriskmanagement system has been further strengthened by creating a new role titled‘CountryOperationalRiskOfficer’with responsibility to ensure end to endoperationalriskmanagementacross businesses and functions in the country and to drive the governance process.

Regulatory Risk Regulatoryriskincludestheriskofnon-compliance with the regulatory requirements.TheBankhasimplemented appropriate compliance framework,policiesandproceduresand has effectively managed the regulatoryrisk.Whilecomplianceteam is responsible for establishing andmaintainingthecompliancerisk,compliance of such policies and procedures is the responsibility of each employee.

Legal Risk Legalriskistheriskofunexpectedloss, including reputational loss arising from defective transactions or contracts, claims being made or some other event resulting in liabilities orotherlossfortheBank,failureto protect the title to and ability to controltherightstoassetsoftheBank(including intellectual property rights), changes in the law, or jurisdictional risk.TheBankhasappropriatelegalframework,policiesandprocedurestoeffectivelymanagethelegalrisk.LegalriskismanagedbytheLegalTeam.

Reputational Risk ReputationalRiskistheriskoffailuretomeet the standards of performance or behaviors,expectedbystakeholdersin the way in which business is conducted.ItistheBankpolicythat,at all times, the protection of the Bank’sreputationshouldtakepriorityover all other activities, including revenuegeneration.Reputationalriskisnotaprimaryrisk,butmayarisefrom the failure to effectively mitigate oneormoreofcredit,liquidity,market,legal and regulatory and operational risks.Italsoarisesfromthefailuretocomply with social, environmental and ethicalstandards.AReputationalRiskCommitteewithintheBankhasbeenestablished which meets at regular intervals to review and monitor this risk.Allemployeesareresponsiblefordaytodayidentificationandmanagementofreputationalrisk.

Capital Management TheBank’scapitalmanagementapproach is driven by its desire to maintain a strong capital base to support the development of its business and to meet the regulatory capital requirements at all times.

As Capital is the centerpiece of the Bank’sperformancematrix,asoundcapital management forms the very core of the overall performance landscapetoensurethattheBankdeliversonitsobjectiveofmaximizingthe shareholder’s value. The senior management of the company is engaged and responsible for prudent capital management at all times.

In compliance with the regulatory requirement of increasing the capital base as prescribed by the Central Bank,theBankhasacapitalplaninplace.TheBankiscomfortablein meeting the minimum capital requirements and is very strongly positioned to meet the performance benchmarksasoutlinedintheplan.

Thecapitalplantakesthefollowinginto account:l Regulatory Capital requirementsl Regulatory Capital requirementsl Increase in the capital required

due to projected business growth, marketuncertaintiesandstresses.

l Available sources of capital and capital raising options


Crisis Management TheBankhasinplaceaCrisisManagement Plan and a Country Crisis Management Team to manage and resolve effectively serious crisis that may affect the operations of the Bank.Inadditiontothis,theBankhasadetailedBusinessContinuityPlan(BCP)tomanagedisruptionsofoperations and a Disaster Recovery Plan (DRP) to manage Technological disruptions.

Health, Safety and SecurityWe consider the health and safety of our people and the integrity of our business as most important aspect of our operations. We regularly conduct audits of Health & Safety and Environment Management and conduct inspections of buildings and departments to provide assurance to allstakeholdersthatrisksarebeingmanaged effectively and that there is a healthy and safety embedded workingenvironmentforbothourstaffand our customers. As part of Health & Safety corrective action plans, the BankduringtheyearhascompletedredesigningandrenovatingworkareasinmanypartsofHeadofficebuildingand other branches as well.

We believe these actions will help our brand stand out from our competitors. Ultimately they underpin our business and will help us to grow stronger.

Group Code of Conduct – SummaryComply with laws, regulations and Group standards: Staff are individually responsible for complying with the spirit, not just the letter, of laws, regulations and Group standards.

Reject bribery and corruption: Staff must not give or accept bribes nor engage in any form of corruption.

Avoid being compromised by gifts and entertainment: Staff must not offer, give or accept inappropriate gifts orbenefitstoorfromthirdparties.Definitiveguidelinescanbefoundinthe Group Gifts and Entertainment Policy.

Speak up:StaffmustSpeakUpiftheysuspect,orknowof,anyactual,planned or potential behaviour that breaks,ormaybreak,anylaws,regulations or Group standards. Details arecontainedintheSpeakingUpGuide.Combattingfinancialcrime:Staffmust comply with laws, regulations and Group standards on money laundering,terroristfinancingandfraudprevention.

Avoid conflicts of interest: Staff are responsibleforidentifyingconflictsof interest. Once these have been identifiedstaffmusttakeimmediatestepstoresolvetheproblem.Definitiveguidelines can be found in the Group andBusinessConflictsofInterestPolicies and Procedures.

Do not deal in shares when in possession of inside information: Staff must comply with the Group’s Personal Account Dealing Policy to eliminatetheriskofinsiderdealing.

Treat customers fairly (TCF): Staff must follow the Group’s seven TCF standards.

Respect customer confidentiality: Staff should not disclose customer or Group data unless authorised to do so.

Treat people fairly and with respect: All employees are entitled to a safe workingenvironmentthatisfreefrom discrimination, bullying and harassment.

Responsibilities to our communities and regulators: Staff must be responsive to their communities and demonstrate exemplary governance at all times.



Additional Information as required by section 109 of the Companies Act 2006

Achievements of the current year as of the date of preparation of the report, andopinionoftheBoardofDirectorsonfutureactions.Un-auditedfirstquarterresultofthecurrentfinancialyear is as follows: (Rs.)RiskAssets: 18.64billionDeposits: 40.71 billionOperatingprofit: 468millionProfitbeforebonus and taxes: 521 million Netprofitfortheperiod:332million

We will continue to remain cautiously optimistic and any paradigm shift will depend on the operating environment. Fortheyear2011/2012,ourkeyfocus will continue to be on Customer Service and Small and Medium Enterprises. In order to expand our fee based revenue, product innovation will continue particularly in the areas of Trade, funds transfer and Bancassurance.AutoandMortgagethatcontributesignificantlytoourassetbase will continue to receive focus in our chosen segment. Credit Card and Personal Loan will be bundled and cross-sold with Payroll Accounts and other asset products in order to maintainassetqualityandminimizetheturnaround time for these products. Withawellcapitalizedbalancesheet,strongriskmanagementcultureandliquid balance sheet, we are poised for growth in the coming year. Should the country see a timely management of current political stalemate, Nepal stands at the threshold of growth impetus–theBankcanfacilitatethegrowth through increased investments and opportunities. Overall, we remain cautiously optimistic on the strength of our balance sheet and opportunities thatNepaloffers,providedthatriskperceptions are tempered down on account of political stalemate,

improved security situation and good governance.

A review of the business during the previous year:Please refer the sections ‘Wholesale Banking’&‘ConsumerBanking’underCEO and Director’s Report.

Industrial or Professional Relations of the CompanyThe Company maintains a good professional relationship with its customers, people and regulators. Senior managers of the Company represent in number of councils, committees and sub-committees of regulators’,professionalorganizations,associations, and forums.

The Company is a member of Nepal BankersAssociation,FederationofNepalese Chamber of Commerce & Industry,NepalBritainChamberofCommerce & Industry, Nepal India Chamber of Commerce & Industry, Management Association of Nepal and Nepal Institute of Company Secretary.

Changes made in the Board of Directors, and reasons thereforePlease refer the section ‘Corporate Governance’ under Chairman’s Statement.

Main factors affecting the businessPlease refer the sections ‘A Challenging Environment’ and ‘Conclusion’ under Chairman’s Statement and ‘Credit Environment’ under CEO & Director’s Report.

Board of Directors’ Reaction to Remarks made, if any, in the Audit ReportPlease refer the sections ‘A Challenging Environment’ and ‘Conclusion’ under Chairman’s Statement and ‘Credit Environment’ under CEO & Director’s Report.


The amount recommended for distribution as dividendTheBoardhasrecommendedpayingRs. 805,084,000 by way of dividend to the shareholders.

Forfeited SharesThere are no shares forfeited during the fiscalyear.

Transaction between the Bank and its Subsidiary Company and the Progress made in the Business TheBankdoesnothaveasubsidiarycompany.

Main transactions carried out by the company and its subsidiary company during the financial year and any important change in the business of the company during the periodTheBankdoesnothaveasubsidiarycompanyandthereisnosignificantchange in the business of the company during the period.

Information furnished to the company by its basic shareholders during the previous financial yearThere are no basic shareholders in the bankasnoshareholder,excepttheSCBGroup,holdsmorethan1%ofthepaid up capital of the Company. There has been no information received from theSCBGroupinthisregard.

Particulars of the ownership of shares taken up by the Directors and office-bearers of the company during the previous financial year, and information received by the company from them about their involvement, if any, in the transactions of the shares of the company

NIL.Directorsandofficebearerhavenot involved in the shares transactions ofthebankinFY2066/67asperthedeclaration provided by them to the Company.

Particulars of information furnished by any Director or any of his close relatives about his personal interest in any agreement connected with the company signed during the previous financial yearThere are no such information furnished by the directors and any of their close relatives.

Purchase of own SharesThebankhasnotpurchaseditsownshares in the year under review.

Whether or not there is an internal control system, and if there is any such system, details there of Please refer section ‘Our approach to Corporate Governance’ under CEO & Director’s Report.

Particulars of the total management expenses of the previous financial yearThe management expenses of the financialyearisRs.671,201,535(totalof Staff Expenses and Other Operating Expenses as per Schedule 4.23 & 4.24 of the Financial Statements).

A list of members of the Audit Committee, remunerations, allowances and facilities being received by them, particulars of functions discharged by the Committee, and particulars of suggestions, if any, offered by the Committee.Please refer section ‘Our approach to Corporate Governance’.

Corporate governanceAdditional Information as required by section 109 of the Companies Act 2006


Remunerations, allowances and facilities:The Committee members and the Chairman have been paid meeting allowance of NPR 5,000 and NPR 6,000 per meeting respectively. No remuneration and other facilities were provided to them. The total amount of Audit Committee meeting allowance paidduringthefiscalyearwasNPR41,000; out of which Rs.36,000 was paidtoMr.RamBahadurAryal,theChairman of the Audit Committee and NRs. 5,000 was paid to Mr. Sujit Mundul member of the Audit Committee, for attending the Audit Committee meetings as Chairman and member of the Committee respectively.

Functions discharged by the Committee: Please refer section ‘Our approach to Corporate Governance’.

Payments due, if any, to the company from any Director, Managing Director, Executive Chief or basic shareholder of the company or any of their close relatives, or from any firm, company or corporate body in which he is involvedNil

Remunerations, Allowances and Facilities to the Directors, the Managing Director, the Executive Chief and other Office-bearersDirectors have not been paid any remuneration and no facilities have been provided to them. Meeting allowance is paid at Rs.22,500 to the Chairman and Rs. 17,500 to Directors. HoweverdirectorsrepresentingSCBGroup are not entitled to meeting allowance as per the Company’s policy. Meeting allowances paid to the Directors are as follows:

RamBahadurAryal 1,72,500/-Sujit Mundul 17,500/-Pramila Singh 1,05,000/-

Remunerations, allowances and bonus paid to the CEO in FY 067/068, who alsowasaDirectoroftheBoard,isRs.16,352,872.00.

Dividends yet to Be Collected By ShareholdersTotal dividends yet to be collected by the shareholder amounts to Rs. 16,872,053.40.

Detail of property’s buy or sell as per Clause 141Nil.

Detail of the transactions held between Associated Companies as per Clause 175Nil.

Any other matter to be mentioned in the Board of Directors’ report under Companies Act, 2063Nil

Schedule- 13(Related to Sub Rule (1) of Rule 22 of Securities Registration and Issuance Regulation, 2065Details to be incorporated in Annual

Report Functions1. Report of Board of DirectorsCovered in the CEO & Director’s Report section of this annual report

2. Report of AuditorIncluded in the annual report

3. Audited Financial DetailBalanceSheet,Profit&Loss,cashflowdetailandrelatedschedulesIncluded.

4. Detail relating to Legal Actions(a) IfanycasefiledbyOrganized

Institution in the quarter, Nil


(b) If any case relating to commission of disobedience or criminal offence filedbyoragainstthePromoterorDirectorofOrganizedInstitution.

No Such information has been received.

(c) If any case relating to commission offinancialcrimefiledagainstanyPromoter or Director.

No Such information has been received.

5.Analysis of share transaction and progressofOrganizedInstitution

(a) Management view on share transactionoftheOrganizedInstitutionhappenedatSecuritiesMarket.

PriceandtransactionsoftheBank’sshares are being determined by

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