2022 Annual Report of Financial Year 201213 English

NMB Bhawan, Babarmahal
G.P.O. Box: 11543, Kathmandu, Nepal

Tel: 01-4246160, Fax: +977-1-4246156
www.nmb.com.np
INSIDE VALLEY: OUTSIDE VALLEY:

Babarmahal Banepa Manthali
NMB Bhawan, Babarmahal Kathmandu Tindobato, Banepa, Kavrepalanchowk Manthali Bazaar, Manthali
Tel.: +977-1-4246160 Tel.: +977-11-660771 Tel.: 048-540484
Fax: +977-1-4246156 Fax: +977-11-660773 Fax: 048-540041
Bhaktapur Biratnagar Narayanghat

Surya Binayak, Bhaktapur Rangeli Road, Biratnagar, Morang Shaheed Chowk Narayanghat,Chitwan
Tel.: +977-1-6617285 Tel.: +977-21-440458 Tel.: +977-56-571883/84
Fax: +977-21-440557 Fax: +977-56-571993
Chabahil
Chabahil, Kathmandu Birgunj Nepalgunj
Tel.: +977-1-4482365 Adarsha Nagar, Birgunj, Parsa Surkhet Road, Nepalgunj, Banke
Fax: 977-1-4462682 Tel.: +977-51-528871 Tel.: +977-81-527981
Fax: +977-51-528820 Fax: +977-81-527983
Putalisadak
Besides Hero Show Room, Putalisadak Birtamod Pokhara
Tel.: +977-1-4439496 Anarmani 4, Bhadrapur Road Birtamod, Jhapa Chipledhunga, Pokhara, Kaski
Fax: +977-1-4439497 Tel.: 023-545670 Tel.: +977-61-541528
Fax: 023-545672 Fax: +977-61-541529
Kalanki
Kalanki, Kathmandu Butwal
Tel.: +977-1- 4302254 Milan Chowk, Butwal, Rupandehi
Fax: +977-1-4302253 Tel.: +977-71-551505
Fax: +977-71-551507
Kantipath
Kantipath, Kathmandu Dailekh
Tel.: +977-1-4238025 Naya Bazaar, Dailekh
Fax: +977-1-4238348 Tel.: 089-420564
Fax: 089-420565
Kumaripati (Lalitpur Region)
Kumaripati, Lalitpur Dhangadhi (Far Western Region)
Tel.: +977-1-5524866 Bus Park Road, Dhangadhi
Fax: +977-1-5527266 Tel.: +977-91-521216
Fax: +977-91-521646
Lubhu
Chautara,Chardobato, Lubhu, Lalitpur Dharan
Tel.: +977-1-5581816 Mahendra Path, Near Bus Park Sunsari
Fax: +977-1-5581817 Tel.: +977-25-533262
Fax: +977-25-533258
Newroad Branch
Joshi Plaza, New Road Dhunche
Tel.: +977-1-4250403 Dhunche, Rasuwa
Fax: +977-1-4157542 Tel.: +977-10-540032
Thaiba Doti
Thaiba, Lalitpur Pipalla Bazar, Dipayal, Silgadhi
Tel.: +977-1-5561033 Tel.: +977-94-440487
Fax: +977-1-5560702 Fax: +977-94-440486
Thamel Kirne
Amrit Marg, Thamel, Kathmandu Sahare, Kirne, Dolakha
Tel.: +977-1-4414719 Tel.: +977-9851153910
Fax: +977-1-4414997
TABLE OF CONTENTS
2012-13 Highlights 02-06

Performance Highlights 04
The year in Review 06
NMB Bank at a Glance 08-14

About Us 10
Values 11
Network 12
People our Strength 13
For the Changing Times 14
Board of Directors & Management 16-31

Chairman's Statement 18
CEO's Statement 22
Director's Report 24
Board of Directors 30
Executive Management Team 31
Corporate Governance 32
Risk Management 33
Banking Services 34-41
Embracing Social Responsibility 42-45
Financials and Disclosures 46-94

02 NMB BANK ANNUAL REPORT - 2012/13 NMB BANK ANNUAL REPORT - 2012/13 03
2012-13
Highlights
PERFORMANCE HIGHLIGHTS
DEPOSITS LOANS AND ADVANCES (NET)

(NPR. in Billion) (NPR. in Billion)
+39% +37%
16.49
22.19
12.07
15.98 11.21
12.87
7.81
10.11
6.88 5.19
FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13
(FY 2065/66) (FY 2066/67) (FY 2067/68) (FY 2068/69) (FY 2069/70) (FY 2065/66) (FY 2066/67) (FY 2067/68) (FY 2068/69) (FY 2069/70)
NETWORTH INVESTMENTS OPERATING PROFIT NET PROFIT

(NPR. in Billion) (NPR. in Billion) (NPR. in Million) (NPR. in Million)
+7% -8% +80% +590%

360.39
610.13
2.42
2.21 2.26
2.72 2.61
1.84 2.44
2.25 221.50
1.59 361.57 339.48
1.86
281.82 159.87
110.58 62.95 52.22
FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13
(FY 2065/66) (FY 2066/67) (FY 2067/68) (FY 2068/69) (FY 2069/70) (FY 2065/66) (FY 2066/67) (FY 2067/68) (FY 2068/69) (FY 2069/70) (FY 2065/66) (FY 2066/67) (FY 2067/68) (FY 2068/69) (FY 2069/70) (FY 2065/66) (FY 2066/67) (FY 2067/68) (FY 2068/69) (FY 2069/70)
THE YEAR IN REVIEW
Q1 16 July - 16 October 2012 Q2 17 October 2012 - 13 January 2013 Q3 14 January - 13 April 2013 Q4 14 April - 15 July 2013
FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS

Deposits : 15.96 B Deposits : 17.05 B Deposits : 19.64 B Deposits : 22.19 B
Loans and Advances : 14.30 B Loans and Advances : 14.77 B Loans and Advances : 15.89 B Loans and Advances : 16.49 B
Net Profit : 90.11 M Net Profit : 165.57 M Net Profit : 265.19 M Net Profit : 360.39 M
Lending to Government Entity Hydro Projects Financing Privilege Savings Launched Retail Hub at Kantipath
The Bank financed one of the Government entities to support a The Bank led as well as participated as a consortium member in The Bank launched a new savings account NMB Bank Privilege Retail Hub and new branch located at one of the busiest
project. various hydro-power projects of the country. Savings. The product features dedicated Relationship Managers commercial centers of the city was inaugurated at Kantipath to
to provide personalized services for all banking queries and facilitate retail services.
access to the Banks Priority Banking services.
VISA International and NMB Bank Sponsors Machhindra Football Club
Debit Card Launched NMB Bank signed a major sponsorship deal with Machhindra Bhadrakali Mandir premises Clean Up on World
Football Club as the Signature Sponsor. With the sponsorship, Remittance tie-up in South Korea and Dubai Heritage Day
We launched NMB Bank VISA
International Debit Card. The launch NMB Bank has helped toward financial boost of the club. The Bank joined hands with few other Banks/Exchange Companies NMB Social Initiative in association with Kathmandu Metropolitan
was a step towards improved Machhindra FC is a promising "A" Division club in Nepal, in South Korea and Dubai for remittance business. City Office and Bhadrakali Guthi organized a Clean Up program
services to the customers to meet established in 1973. of the Bhadrakali Mandir premises to mark the 41st World Heritage
their enhanced banking and Day. The Clean Up program was organized to give continuity to
Inauguration of Gorakhnath Mandir post the initiative started in 2012 on the occasion of World Heritage
financial needs.
Winner - Soaltee Super Sixes renovation Day. Similar Clean Up programs were organized in all the Banks
The Bank won Soaltee Super Sixes for the second time to claim The Banks directors Mr. Harishchandra Subedi and Mr. Rajendra branches across the country.
NMB Bank Inter-School Heritage Painting the title of the 14th Soaltee Crown Plaza Super Sixes. Kafle jointly inaugurated the Gorakhnath Mandir, Thapathali which
Competition has been renovated by NMB Social Initiative, as part of the Banks
pledge to preserve heritage sites. Participation in eye check up camp at
NMB Bank Inter-school Heritage Painting Competition, a nationwide
event, was organized on 1st September 2012. 116 students from Bangemuda
69 schools all over the nation participated in the competition, The Bank in association with Sthapit Samaj and Dhulikhel Hospital
Book donation in Kirne organized an eye check up camp at Bangemuda.
making the event a grand success.
Books collected from the book donation drive conducted across
all branches in the country were donated to CAN Help Nepal, The purpose of the event was to create awareness in regards to
MOU with Practical Action Nepal an initiative to help community development and childrens protection and prevention of ailments related to the human eye.
A MOU was signed between NMB Bank and Practical Action education in and arround Kirne.
Nepal to focus on exploring opportunities in increasing access
to finance for rural unemployed or underemployed youths, micro Sponsorship of 36th National Badminton
and small entrepreneurs (MSEs) for farm and off farm sector in
Far Western Region. Championship
The Bank sponsored the Mens Singles of the 36th National
NMB Bank Heritage Walk Badminton Championship organized jointly by Nepal Badminton
The Bank marked its 17th Anniversary on 28th December 2012. To Association and Kathmandu District Badminton Association. The
celebrate this day, the Bank organized 2nd Heritage Walk 2012 in event had participation of players from all across the country.
association with Kathmandu Metropolitan City. The Bank has committed
to pledge its support for the preservation of heritage sites.
NMB Bank
at a Glance
ABOUT US VALUES
NMB Bank Limited commenced its operations as a A class Shareholders & Promoters
commercial bank from 2008. In a relatively short period of time NMB Bank is a Public Limited company with NPR 2 billion in Paid-
of four years, we have firmly established ourselves as one of the up capital, promoted by members of prominent business houses,
leading financial institutions of the country. Since our foundation, successful businessmen, leading financial institution of the country
the Bank is continuously working towards being innovative in -Employees Provident Fund and a foreign company Yong Lian
product designs and development to delight the customers. Reality from Malaysia.
In NMB we believe in providing tailor made financial solutions to
our customers and business partners alike, all the while striving Vision
towards fulfillment of their financial needs. Further, our vision to To establish ourselves as a leader in banking by providing a range
establish ourselves as the leading commercial bank of Nepal of financial services suitable to the needs to the market with high
internally motivates us to incessantly strive towards maintaining priority on customer care while simultaneously embracing the
effective customer relationship, upholding proper corporate interests of all stakeholders and value of a good corporate citizen.
governance, providing good return to all stakeholders of the Bank
and contributing to well-being of society through our various Mission
corporate social initiatives.
To gain supremacy in growth, profit, customer care and social
response in banking by way of:
Leveraging and integrating the existing strengths of the
institution
Reaching out and serving wide range of customers within and
outside the country
Developing a culture of 'Giving Extra Care to the Customers'
The Bank launched its core 5 values on 25th January, 2014. The "values - 5Bs our success" are the operating principles that guide
9% Being innovative in designing and delivering services the organization in its internal conduct as well as its relationship with its customers and stakeholders.
Adopting prudent investment practices for building up a sound
31%
assets base
39% Developing internal and external efficiencies by prudent use
of technology
21%
Building operational efficiency through smarter processes and
controls
Providing exciting and challenging career prospects for the
employees
Individual Promoters Placing high priority on stakeholders' interest and statutory Be innovative with the changing time
Institutional Promoters compliance
Individual Public
Acting responsibly for making contributions to the society at Be a team player and deliver results together
Institutional Public large
Be responsible to our actions
Be prudent for sustainable and consistent growth
Be committed to deliver what we promise
NETWORK PEOPLE OUR STRENGTH
26 30
branches Atms
The bank which started with 8 staff 18 years ago now has 314
staff across all branches of NMB Bank and is growing still. The
staff are the core strength of the Bank. The Bank continuously
invests on its staff through various mediums such as trainings,
The Bank has been in the industry for 18 years and NMB takes
a pride to announce that couple of staff who joined the Bank
from its inception are still with us. The Bank has a culture of
recognizing long service award to staff having completed 5/10/15
Kathmandu Valley workshops, team building exercises etc as the Bank firmly believes years with the Bank as we respect each staff's contribution in
Babarmahal that the way to maximize the staff contribution is to identify, establishing the Bank to what it is Today.
harness and develop the strengths of the employees.
Putalisadak "Only work and No Play makes Jack a dull boy" hence the Bank
For new joiners, an effective on-boarding process is in place. organizes annual picnic for staff away from the formal, work
Newroad They are given an access to system the very day so that he/she intense environment to have fun, to know more about each other,
Dailekh can start the work right away, are given a fixed workstation and to exchange lighter moments and to completely relax as though
Doti Thamel
provided with an Induction program to get familiar with the NMB there is no worries tomorrow!
Kantipath Culture.
Dhunche NMB Bank strongly believes in its people and their commitment
Kalanki The Management strongly encourages in open communication, towards the Bank's growth and also at the same time supports
Chabahil information flow is constant. Town Hall meetings are held for all each staff in their individual growth.
staff at end of every quarter to discuss financial performance of
Kumaripati the Bank, to reward staff, to share new products, bank's
achievements etc. Staff Newsletter is also in circulation to update
Thaiba
300+
staff on various staff and the Bank's activities.
Banepa Lubu
Having worked endlessly is not enough but to be assessed rightly
Bhaktapur of a staff is more important in an organization as engaged and
Kirne
satisfied staff consistently giver their best hence in NMB Bank
'Annual Performance Appraisal' (APR) is carried out twice in a
year. In addition to APR, constant performance oriented feedbacks
staff
based on monthly financial results are also provided to all
concerned for a continuous growth.
Dhangadhi Nepalgunj
Butwal
Birgunj
Dharan Birtamod
Pokhara Narayanghat
Manthali Biratnagar
Extension Counters:
BPKIHS, Dharan Kathmandu District Court, Babarmahal Kathmandu District Administrative Office, Babarmahal
ATMs:
Babarmahal, Kathmandu Kumaripati, Lalitpur Boudha, Kathmandu Tripureshwor, Kathmandu Sundhara, Kathmandu
Thamel, Kathmandu Putalisadak, Kathmandu Chipledhunga, Pokhara Dharan, Sunsari Lubhoo, Lalitpur Pepsicola, Kathmandu
New Baneshwor, Kathmandu Nepalgunj, Banke Birgunj, Parsa Butwal, Rupandehi Maharajgunj, Kathmandu Doti, Silgadi
Manthali, Ramechhap Biratnagar, Morang Mangal Bazaar, Lalitpur Narayan Bazaar, Dailekh Dhangadhi, Kailali
Banepa, Kavrepalanchowk Kamalpokhari, Kathmandu Kantipath, Kathmandu Surya Binayak, Bhaktapur
District Court Premises, Kathmandu Birtamod, Jhapa Narayanghat, Chitwan New Road, Kathmandu
FOR THE CHANGING TIMES
For the changing times
The Bank is committed to reinvent itself

and to adapt to every internal and external
change that evolves overtime. We
emphasize on delighting customers through
innovation in products/services and always
rise above to meet the challenges faced by
the customers over the changing times.
Board of Directors
& Management
CHAIRMAN'S STATEMENT
First of all, I would like to extend my warm welcome to you all Overall Deposit volume increased by 39% to NPR 22.2 billion
in the 18th Annual General Meeting of NMB Bank Ltd. and extend compared to NPR 15.98 billion in the previous year.
my best regards on behalf of the Board of Directors.
Loans and Advances volume also increased by 37% to NPR
As you all know, your bank has just completed its first five years 16.90 billion.
of operation as a commercial bank. During the period, the Bank
Operating profit and Net profit after tax recorded at NPR 610.1
has managed to achieve its strategic goals set out for the period
million and 360.1 million respectively.
and successfully built its capacity in terms of footprints, products,
technology, human resources and created a platform to make a Earning per share increased to NPR 18.02 from NPR 2.61.
quantum leap in the next few years.
Non Performing Assets improved to 1.80% from 2.45% in the
The overall scenario in the financial markets in Nepal continued preceding year.
Your Bank is now all to remain challenging during the FY 2012/13. Whilst overall
In accordance with the regulatory requirement of Nepal Rastra
set to embark into a profitability of banking industry has increased during the period,
Bank 20% of total net profit amounting to NPR 72.07 million
high volatility in liquidity position, energy crisis, political instability,
new journey and make non-performing Real estate sector, etc,. continue to remain major
has been transferred to General Reserves Fund.
quantum leap to concerns for the banking industry. Local market has witnessed The banks Capital Adequacy Ratio maintained at 11.74%.
extreme volatility in liquidity scenario over the past 12 months.
achieve strategic The banking industry in Nepal currently faces significant challenge Cost to Income ratio has improved to 34.6% from 42.61%.
aspirations both in in terms of effective management of liquidity. The mismatches Based on the past three months financial performance, we expect
of fund, slow government spending in development activities, to deliver even better results in the current fiscal year 2013/14.
business scale and ever increasing trade deficit are considered major reasons for
The outlook for Global Economic scenario in the short to medium
competitive position impacting liquidity position in the local market.
term is relatively more positive but changing growth dynamics
with an ambition to FY 2012/13 was yet another year of excellent performance for have posed downside risk to overall growth prospects. The U.S.
the Bank. As a result of the same, I am very much delighted to outlook is being once again adversely impacted by series of
become one of the inform you that this year we are proposing 10% Cash Dividend recent economic and political developments. Unemployment,
leading banks in Nepal. from the accumulated profit and reserves which has already high inflation, and volatile exchange rates still remain major
been approved by the Nepal Rastra Bank. concerns for the Emerging Markets also.
I am sure you will appreciate the overall steady business Nepals overall economic growth continues to remain sluggish
performance of the Bank over the past 18 years, and I would like during FY 2012/13, with GDP growth at 3.6%. slowing from 4.5%
to take this opportunity to express our sincere gratitude for your growth in a preceding year. The continued energy crisis, adverse
support and patronage throughout. weather conditions, shortages of chemical fertilizers and delay
Against this backdrop, I would like to present you with Annual in full budget attributed to the lower growth during the period.
Report of NMB Bank Ltd. for the Financial Year 2012/13. A The Government has set target of 5.5% growth in the current
Nanda Kishor Rathi year 2013/14 with inflation projection at 8%.
Chairman snapshot of the financial performance is as under:
CHAIRMAN'S STATEMENT
COST TO INCOME RATIO NON PERFORMING LOAN Overall business environment has remained very challenging up-gradation as commercial bank in 2008 and establish the Bank
due to prolonged political uncertainty in the country. Recent as one of the leading commercial Banks in Nepal. Likewise, I
political development certainly offer some ground for cautious would also like to record my sincere thanks to Mr. Purushottam
-20% -26% optimism, however overall political environment is likely to

remain volatile till such time the new constitution of the country
Lal Sanghai for his significant contribution as Board Director from
April 2009 to Jan 2013.
is promulgated and stable government formed in the country.
I would like to take this opportunity to welcome our new Board
This year we will continue to expand our banking activities to Directors Mr. T.Puracharan C.P. Ramakrishnan representing Yong
untapped rural areas to increase our reach by way of Branchless Lian Realty, Malaysia and Mr. Manish Jain representing local
51% 2.45% Banking and other alternate delivery channels. We shall also promoter group. Further, I would also like to welcome Mr. Jeevan
focus to further expand our SME, Microfinance and other retail Man Joshi as an expert Board Director in place of Mrs. Rita Pant
43% business activities throughout the country by increasing our who completed her 4 years tenure in the Board. I would like to
37% 37% 1.80% footprint in different parts of the country. record my sincere thanks to Mrs. Pant for her significant
34% contribution in the past 4 years to the NMB Board as a director
We are also looking into the possibilities to establish offshore
and also a member of Audit Committee.
branches and expand our global network primarily for International
Trade, Investment Banking and Remittance opportunities. We We express our sincere gratitude to all our regulators, the
0.70% shall also look into further strengthening the Banks position by Government of Nepal, Ministry of Finance, Nepal Rastra Bank,
0.51% forming strategic alliance including merger / acquisition with Securities Board of Nepal, Nepal Stock Exchange for their valuable
0.27% domestic / international financial institutions to supplement our support and patronage. As always, we strive to conduct our
FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 capacity building plan. business in such a manner to reflect our commitment to high
(FY 2065/66) (FY 2066/67) (FY 2067/68) (FY 2068/69) (FY 2069/70) (FY 2065/66) (FY 2066/67) (FY 2067/68) (FY 2068/69) (FY 2069/70) level of ethical standards, institutional integrity and sound
Your Bank is now all set to embark into a new journey and make
corporate governance.
quantum leap to achieve strategic aspirations both in business
scale and competitive position with an ambition to become one I am also pleased to record my appreciation to the management
of the leading banks in Nepal. The Bank shall continue to focus team and all staff of the Bank for their sincere effort and
on to improve organizational productivity in an effort to manage contribution to deliver yet another excellent financial results.
EARNING PER SHARE CAPITAL & RESERVES costs more effectively and drive better internal collaboration,
(NPR.) (NPR. in Billion) Finally, I on behalf of NMB Board would like to place on record
while identifying key growth areas for business to create
our sincere gratitude to all our respected shareholders and valued
competitive differentiation.
customers for their continued support and patronage which has
+590% +7% Acknowledgement
significantly contributed for the banks growth over the past
seventeen years. We are also very grateful to FNCCI, CNI, Nepal
It is with deep sorrow, I have to let you know the sad demise of Chamber of Commerce, Swiss Development Cooperation, Helvetas
our late Chairman Mr. Atama Ram Murarka at the age of 71 on Nepal, UN World Food program and other partners for their
14th August 2013. It is indeed an irreparable loss to the NMB continued support.
18.02
Board and the Bank. Late Mr. Murarka, was one of the prominent
business leaders who played a pivotal role in the formation and We also look forward for your continued support and patronage
2.42 development of NMB Bank. We all Board of Directors of NMB in days ahead to accomplish our mission to become one of the
2.21 2.26 leading financial service providers in the country.
Bank and entire NMB Bank team pray to the almighty for the
10.65 11.08 1.81 eternal peace of the departed soul.
1.59
Further, I on behalf of the Board of Directors would like to thank Thank you.
our Past Chairman Mr. Pawan Kumar Golyan for his valuable
contribution and guidance during his tenure as the Chairman of
4.42 the Board from the period of April 2009 to January 2013. During
2.61 his tenure as the Chairman, Mr. Golyan remarkably contributed
for successfully managing transformation of the Bank after its
CEO'S STATEMENT
NMB has established itself as one of the key players in the Banking We will maintain our focus on operational excellence, do our
Industry in the country during the period of considerable changes best to maximize the efficiency and respond promptly to seize
and difficult market conditions. The Bank has responded to the opportunity and secure our future.
changes and challenges positively in innovative and creative
The Bank and its staff are seriously working towards making a
ways during the period. We achieved our strategic goals set out
real difference in our community by way of support to several
in its 5 year business plan (2008-2013) in all respect with business
causes. The Bank has given continuity to its efforts in generating
targets having exceeded the level envisioned for ourselves in
awareness for the conservation of the countrys rich heritages
2008. The Bank achieved strong earnings and return to its
by way of heritage walk, nationwide Inter-school heritage painting
shareholders during the period.
competition and renovation and maintenance of select heritage
The Bank will build on the positive momentum to date and strive sites. The Bank has also continued its support to the NMB
to make a leap forward to achieve strategic aspirations in terms Machhindra Football Club as its Title Sponsor which went on to
of business scale and competitiveness to position NMB within become the Runner-up in the national league championship.
the first quartile amongst the commercial banks in the country NMB and its staff have actively supported many other initiatives
by 2020. NMB envisages growing organically as well as through directed to support deprived section of the society.
merger and acquisition options.
We are proud of our people and our trust in them is well placed.
NMB had a productive and rewarding year in 2012/13. The Bank The Bank has always given a priority to its people and is
further strengthened its balance sheet and improved profitability. continuously working towards creating a positive experience,
NMBs profits reached a new record level with significant rise in encouraging and building appropriate value and culture for our
earnings per share to NPR 18. The Bank managed to grow its employees. The Bank has embraced innovation, prudence and
business volume both deposit and risk assets by an impressive customer focus as major ingredients of its culture and value. We
38.8% and 36.6% respectively - well above industry averages. are operating in highly competitive environment as such we must
Despite unavailability of adequate instruments and opportunities keep pace with the CHANGING TIMES whether it be understanding
to deploy surplus funds; significant decline in yield on money customer needs, environment, technology or managing risks.
market instruments; and reduced margin because of competitive We are committed to deliver what we promise and are responsible
pressures Net Interest Income increased remarkably by 68%. to our actions. NMBians strongly believe in working as a team
Cost to income ratio improved to 34% from 43% resulting in and delivering results together. Our staff are committed to stand
better operating margin. The Bank has continually invested in by the values at any cost.
people, branches, alternate delivery channels and operational
While the countrys economic outlook in the coming days
We are robustly focused on providing our improvements. Consequently the Bank managed to post a record
continues to look challenging given continuing political uncertainty,
profit due primarily to improved operating margins, better
customers with solutions to their financial recoveries resulting in write backs and lower loan loss provisioning
we are assured that with our strategy, our focus on our customers
and our people, NMB is well positioned for continued success to
needs and creating value for our shareholders compared to last year. The Banks Non Performing loans stand
provide superior results during the FY 2013/14 and beyond. NMB
reduced to 1.80 from 2.45. Overall, FY 2012/13 was a very
by generating attractive total returns. successful year in terms of balance sheet growth and profitability.
is on its way to become one of the best Banks in the country.
On behalf of team NMB, we extend our deep gratitude to all our
We are robustly focused on providing our customers with solutions
stakeholders shareholders, customers, government of Nepal
to their financial needs and creating value for our shareholders
and the regulators and community for your continued support,
by generating attractive total returns. While NMB has succeeded
trust and patronage.
in achieving a balanced growth from each of its business segments
SME as well as Retail, the Bank has made significant inroads in
securing several wholesale deals particularly project finance and
Thank you.
international guarantee syndication during the year. These
Upendra Poudyal
initiatives are expected to yield better fees income for the Bank
Chief Executive Officer
in days to come.
DIRECTOR'S REPORT
The Bank recorded an Highlights of Global Economy eleven months of 2012/13 compared to a surplus of Rs. 115.76
The world economic outlook has been positive to some extent billion during the same period of the previous year. Remittance
unprecedented profit in the fiscal inflow rose by 21.3 percent to Rs. 388.46 billion. In US dollar
as a result of slowing down of the adverse impact of the financial
year 2012/13 of NPR 360M. Key crisis that originated in the United States in 2008 and some terms, remittance inflow increased by 11.8 percent to US$
improvement in sovereign debt crisis in Euro Zone. According to 4.45billion. Exports of goods to India increased by 2.6 percent
contributing factor for a record FOREIGN EXCHANGE INCOME
(NPR. in Million) the World Economic Outlook published by the IMF in April 2013, and exports of goods to other countries increased by 7.0 percent.
growth to name the few include world's economic growth is forecasted to be 3.3 percent in 2013 As a result, total export of goods increased by 4.0 percent. On
and 4.0 percent in 2014. The US economy is estimated to increase the other hand, import of goods from India and other countries
impressive increase of Net Interest
Income at NPR753M, continuous +30% by 1.9 percent in 2014 while the economy of Euro
Zone is likely to contract by 0.3 percent. Similarly, the economy
increased by 23.3 percent and 17.3 percent respectively resulting
in 21.2 percent increase in total imports. As a result of high growth
rate of imports relative to exports, trade deficit reached Rs. 438.67
introduction of new products, and of emerging and developing countries is estimated to increase billion during eleven months of 2012/13, and the export-import
broadening of the Banks reach to by 5.3 percent in 2013. Indian economy is forecasted to grow by ratio declined to 13.7 percent in review period from 16.0 percent
64.54 5.7 percent in 2013 compared to an increase of 4.0 percent in in the corresponding period of the previous year.
the international trade transactions 2012. Economic growth of China is projected to be at 8.0 percent
The gross foreign exchange reserves increased by 16.4 percent
resulted in increase of 49.77
in 2013 compared to 7.8 percent growth in 2012.
to Rs.511.69 billion in mid-June 2013 from Rs. 439.46 billion as of
47.19
Fees/Commission by 18% against In the context of weak global aggregate demand, it seems that mid-July 2012. In US dollar terms, foreign exchange reserves
there will be low pressure in overall inflation in the world. According increased by 11.3 percent to US$ 5.52 billion in mid-June 2013
previous year. An efficient to the IMF, the consumer inflation of developed countries is from US$ 4.96 billion as of mid-July 2012. Based on the trend of
management of Foreign exchange forecasted to be 1.7 percent in 2013 and 2.0 percent in 2014 imports during the eleven months of 2012/13, the existing level
23.01 compared to 2.0 percent in 2012. Similarly, consumer inflation of of foreign exchange reserves is sufficient to cover more than 11
recorded a robust growth of 30% in emerging and developing economies is estimated to be 5.9 months of merchandise imports and about 10 months of
Foreign Exchange Gain. 9.34 percent in 2013 and 5.6 percent in 2014. In our neighboring merchandise and service imports.
country India, inflation is projected to remain at 10.8 percent in
FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 2013 compared to 9.3 percent in 2012. Inflation in China is The exchange rate of Nepalese currency with the US dollar
(FY 2065/66) (FY 2066/67) (FY 2067/68) (FY 2068/69) (FY 2069/70)
expected to remain at 3.0 percent in 2013 compared to 2.6 witnessed some volatility because of a fluctuation of Indian
percent in 2012. (excerpts Monetary Policy 2013) currency with the US dollar. The exchange rate of Nepalese
currency with the US dollar gradually depreciated after mid-May
2013 in contrast to the appreciation up to mid-April 2013 from
Domestic Economic Outlook
FEES AND COMMISSION NET INTEREST INCOME mid- August 2012. In 2012/13, Nepalese currency depreciated
(NPR. in Million) (NPR. in Million) Economic growth of the country remained slow due to adverse by 6.7 percent against the US dollar. (excerpts Monetary Policy
effects of economic and non economic constraints in industrial 2013)
and service sector and subsistence nature of agriculture sector.
18% 68% According to the preliminary estimates of Central Bureau of

Statistics (CBS), the real GDP grew by 3.6 percent at basic price
Review of Key Financial Highlights
The Bank recorded an unprecedented profit in the fiscal year
and 3.7 percent at producer's price in 2012/13 compared to a
growth of 4.5 percent and 4.9 percent respectively in the previous 2012/13 of NPR 360M. Key contributing factors for a record growth
753.32 to name the few include impressive increase of Net Interest
year. In the review year, the growth rates of agriculture and non-
agriculture sector are estimated at 1.3 percent and 5.0 percent Income at NPR753M, continuous introduction of new products,
116.48 and broadening of the Banks reach to the international trade
109.08 respectively compared to a growth of 5.0 percent and 4.2 percent
respectively in the previous year. In the review year, industry and transactions. Fees/Commission increased by 18% against previous
92.21 service sub-sectors are estimated to grow by 1.6 percent and year. An efficient management of Foreign exchange recorded a
87.45
438.93 449.58 robust growth of 30% in Foreign Exchange Gain. Staff expense
6.0 percent respectively. In the previous year, the growth of
70.18 industry and service sub-sectors was 3.0 percent and 4.5 percent rose by 38% however, Other Operating Expenses though
306.64 respectively. Such an improved growth of the service sector in maintained well below budget, increased by 19% chiefly due to
the review year is due to the contribution of trade, tourism, increase in the Banks overall activities including expansion of
transport and communication sectors. branch network. Overall loan portfolio
148.32
The overall BOP recorded a surplus of Rs. 52.69 billion during
DIRECTOR'S REPORT
remained stable with 'Provision for Possible Losses' at NPR 130M Much to the delight of rural population, the Bank successfully VISA Credit Card by 2nd Qtr of the FY 2013/14. The customers Audit Committee
a sharp decline by 113% against last fiscal year. With a focused launched branchless banking in Doti in addition to Lubhoo and will greatly benefit from Visa Credit card both in and out of the Audit Committee has been formed under the directives of NRB
effort on recovery of bad loans, the Bank managed to recover Thaiba. Customers now benefit from the banking services at country. We launched Visa Debit card previous year with a tie up which is chaired by a Non Executive Director along with an
NPR 59M out of the past year provisions during the year. their own doorsteps without having to walk miles to the nearest with one of the commercial banks but by early next Qtr we plan additional Non Executive Director as a member and Head
bank. We intend to launch as many branchless banking services to have our own 'Switch' for Visa Debit cards platform to speed Compliance, Operational Risk & Audit as the Member Secretary.
Increase in overall deposit to NPR 22B, an increase by 39%, is a
as possible to reach out to people for whom banking has always up the delivery and services to our customers. The Committee works as per the Terms of Reference outlined by
sheer testimony to the growing confidence of the customers in
been a distant dream. The Bank is not just keen on accepting NRB for Audit Committee. Each audit reports are discussed and
the Bank. The deposit is a mixture of both individuals and
deposits but is always ready to advance loans for the prosperity Risk Management Framework reviewed by the Committee with proper guidance on further
institutions. Keeping in compliance with NRB Directives, the Bank
of the local community hence the Bank has played a larger role Risk Management is a discipline at the core of the Bank and improvements. The Committee diligently follows-up on audit gaps
is gradually decreasing its share of institutional deposit to focus
in bringing about the changes in the local economy as well. encompasses all the activities that affect its risk profile. Risk to ensure each risk is properly addressed. The audit reports after
more on individual deposits. Despite a cut throat competition,
the Bank increased its loan portfolio by 37% which is a diverse Remittance is one of the key contributing factors of Nepal's Management refers to the end to end process that ensures risks the review from Audit Committee are escalated to the Board
mix of Corporate, Small & Medium enterprises, Micro Finance economy. The Nepali diasporas that have spread across the world are effectively managed from the time they are identified to the periodically.
and Retail loans. Investment in real estate sector declined by use banking medium for remittance is still at a lower level due time the risks are mitigated within the risk appetite of the Bank.
Audit Committee held 14 meetings during the fiscal year. The
16%, a concerted effort by the Bank to maintain it at a lower to lack of banking knowledge. The Bank hence launched a program A risk management framework encompasses the scope of risks
total allowance paid to2 Non Executive Directors were NPR
level, well below the regulators' stipulated threshold. The Bank whereby the Bank's staff directly reach migrant labors before to be managed thus is comprehensive enough to capture all risks
252,000/-. The Member Secretary is not provided allowances for
increased its investment in productive sectors and also managed, they depart for the foreign countries and brief them about banking the Bank is exposed to and also has flexibility to accommodate
the meetings.
as in the past, to achieve its Deprived Sector Loan target stipulated in detail. We have been so far successful in the campaign as any change in business activities.
by the NRB. many such migrant workers continue to open the accounts with Internal Audit of the bank is outsourced to G.P Rajbhahak & Co.
The Boards of Directors have ultimate responsibility for the level
us before departing the country and have successfully used which carries out audit each quarter. Sundar & Co. has been
The Capital position of the Bank continued to be strong with of risk taken by the Bank. Accordingly, they approve the overall
banking channel for remittance to their accounts. conducting the statutory audit for the last 2 fiscal years.
Capital Adequacy ratio of 11.74% against 10% capital adequacy business strategies and significant policies of the Bank and
requirement of Nepal Rastra Bank. The CD Ratio (LCY) of the Bank Middle East especially Dubai has always been a favorite destination ensures that senior management is fully capable of managing
the activities that the Bank conducts. Toward this end, members Risk Management Committee
stood at 68.70%, a strong indication of efficiently managed of migrant labors. We made our presence in Dubai through an
resources at hand. Liquidity ratio and Capital Fund Ratio of the agreement with a couple of leading Exchange Houses this fiscal of the Board chair 3 Board level Committees namely; Audit A Risk Management Committee has been formed under the
Bank stood at 23.35% & 11.74% respectively, well within the year. With this agreement in place, we hope to route foreign Committee, Risk Management Committee and Human Resources chairmanship of a Non Executive Director. Chairperson of Audit
prescribed limit by NRB. Base Rate remained at 9.55% which is exchange in large volume to build on the deposit base. Not limiting Service Committee. In the Management level to ensure the risks Committee is also a member of the Committee. Rest of the
at par with peer Banks. Non Performing Loans improved ourselves to just Middle East, the Bank also ventured into South are identified, analysed and mitigated on time, Executive members are Head Credit Risk Management, Head Audit &
considerably to 1.80% against 2.45% last year due to the Banks Korea to source remittance business which is but still in nascent Committee, Operational Risk Committee, Credit Risk Committee, Compliance and Chief Operating Officer. The Committee meets
concerted efforts in Risk Management and recoveries. stage; but in coming years we are confident of itsbigger customer Asset & Liability Committee, HR Recruitment Committee, as often as possible to discuss various risks identified by the
base. Information & Technology Steering Committee and Governance Management level risk committees. 'Stress Test' carried out each
Cost to income ratio improved from 43% in the past year to 34% Committee have been formed. These committees represent each quarter is discussed with further recommendations to the Board
in the current year, again an indication of efficiency of the Bank risk impacting overall Bank's operation hence the Management at the Committee. Major changes in NRB Directives, Monetary
and its operations. Earnings per share rose from NPR 2.61 to a Future Prospects
is assured of 'no surprises' at end of the day. Policy with immediate impact on the Bank's strategy are discussed
significant NPR 18.02 providing shareholders a good return for Branch expansion will remain one of the major focused areas of to address changes/impact. Capital Adequacy, Liquidity positions,
their investment. the Bank as we truly believe in delivering banking services to as The Bank firmly believes in inculcating risk culture across the CD Ratio, Risk appetite of the Bank are amongst other major
diverse population as possible. Not limiting our services to just Bank in all activities. Each staff is encouraged to speak up for issues discussed frequently at the Committee.
Network Expansion an urban area, rural population will also get to experience our any misdoings, and are regularly trained on the impact of
superior banking services as opening of few branches including unidentified risks to the Bank from financial and reputational During the fiscal year, the Committee held 8 meetings with total
A new branch in Kantipath, Kathmandu as 21st Branch of the meeting allowance of NPR 144,000/- being provided to 2 Non
rural branches are on the cards. perspective.
Bank was opened during the fiscal year. Given the Bank's clear Executive Directors. Rest of the members being staff are not paid
strategic focus on Retail Banking Business, the Branch was The Bank is reliant on technology for providing efficient, accurate The Bank has made tremendous effort in establishing Anti Money meeting allowance.
opened as the Bank's first dedicated Retail Branch located at banking services. The Bank always ensures to keep the technology Laundering (AML) Process. A software has been subscribed at
heart of the city. Known also as a 'Retail Hub', the branch is a updated with regular maintenance so that services to the huge cost to support our endeavor in keeping Money Laundering
HR Service Committee
'One Stop' for all retail services to our valued customers. customers are not compromised. To minimize the risk and to risk in check. Trainings on AML are regularly attended by staff
provide optimum benefit to the customers, the Bank is looking from all departments. A dedicated KYC Officer has also been HR Service Committee has been formed under the chairmanship
During the fiscal year the Bank successfully added 2 ATMs with of a Non Executive Director. CEO, Deputy CEO, Chief Operating
into possibility of upgrading its banking software. The Bank thus deputed to carry out Know Your Customer related issue. The
a view to providing convenient access to the financial needs of Officer and Head Human Resources are the members and member
believes in safety of the customers first. Bank has made a significant progress on garnering 'Know Your
the customers. The Bank will continue to expand its footprints, secretary respectively. The Committee meets as and when
Customer' information of existing customers and is committed
ATMs and other delivery channels. Till date the Bank has 28 ATMs With an objective of providing a complete financial solution to changes are required under 'Employee Terms of Services By
to obtain 100% completion of KYC update.
across the country. the customers, the Bank is launching yet another superior product Laws' and any other significant staff related policies and issues
such as 'Succession Planning' , Staff remuneration, Organization
structure etc.
DIRECTOR'S REPORT
Corporate Governance Changes in the Board Details of Shares forfeited by the Bank
The Bank has a well-defined and enforced corporate governance The Bank lost its two time Chairman Mr Aatmaram Murarka who No shares were forfeited during the year.
which provides a structure that works for the benefit of all left for heavenly abode. Late Mr. Aatmaram Muraraka made a
Outstanding amount payable to the Bank by any of the Directors,
stakeholders by ensuring that the Bank adheres to ethical significant contribution to the bank in the role of Director and
Chief Executive Officer, Substantial shareholders or his/her close
standards , best practices and all relevant laws of the land. With Chairman since the inception of the Bank. His death is indeed a
relatives or by any form/company, Corporate Bodies in which
an increase in complexity of business and stiff competition, big loss to the Bank. We pray for the eternal peace of the departed
he/she is involved are as follows:
corporate governance hold an enhanced significance in today's soul. Mr. Nanda Kishor Rathi took over as the Chairman of the
financial world to ensure check on abuse of corporate power Bank. S.N Name Outstanding Amount (NPR)
and alleged criminal activity by the Bank's Officers. 'Corporate 1. Vishal Enetrprises Nepal Pvt. Ltd. 22,75,276
Mr. T Puraharan CP Ramakrishnan (representative Yong Lian
Governance' Committee thus has been formed to ensure unethical 2. Rameshwor Housing And Developers 62,34,000
Realty, Malaysia), Mr. Manish Jain and Mr. Jeevan Man Joshi
banking practices are checked on ongoing basis. CEO of the Bank
(Professional Director) joined the Banks Board as Non Executive 3. City Real Homes Pvt. Ltd. 13,59,00,000
is responsible for the maintenance of sound Corporate Governance
Directors during the year.
of the Bank.
During the fiscal year, the Board held 17 meetings with total Information on Unclaimed Dividends distributed
Industrial or Professional Business Relationship of the allowance paid at NPR 860200/- to the members of the Board. by the Bank
Bank Out of the total dividend distributed by the Bank , NPR
Shareholdings by the Directors of the Bank is detailed 20,663,177.22 remains unclaimed by the shareholders. A notice
The Bank has established 75 correspondent relationships with
as follows: to collect dividend have already been posted in local daily
foreign banks to provide efficient service to the customers.
newspaper and NMB website.
Name No. of Shares
Corporate Social Responsibility
Mr. Nanda Kishor Rathi (Chairman) 751,046 Details of Fixed Assets purchase/sales as per the
The Bank has taken up preservation of Heritage as one of the
Late Mr. Aatmaram Murarka 561,225 requirement of section 141
main activities under its Corporate Social Responsibility. Heritage
Painting Competition amongst various schools in and out of Mr. Manish Jain 42,162 No fixed asset was purchased or sold during the year.
Kathmandu valley was carried out with the Bank's firm intention Mr. Harischandra Subedi 952
of making it an annual event. Bhadrakali temple was cleaned by Prof Dr. Hari Prasad Shrestha 381 Acknowledgement
NMB staff to coincide with the World Environment Day. Heritage On behalf of the Board of Directors I would like to express my
Walkathon was organized to generate awareness for the heritage The Management Team gratitude to all shareholders, customers for choosing NMB Bank
preservation and also to raise funds which will be utilised in as their preferred Bank. My sincere Thanks to the Management
restoring heritage sites in various locations within and outside The Management Team of the Bank is lead by Mr. Upendra
Poudyal as CEO with more than 27 years of banking service who Staff and all staff of NMB Bank for delivering exemplary financial
Kathmandu valley. Corporate Social Responsibility activities are results each year and providing superior customer services
not just limited to Kathmandu valley but are carried out in each is supported by the following Executive Committee members:
experience to all stakeholders.
outside valley branches by way of various other activities. Mr. Sunil KC, Deputy CEO
Young children in rural areas are deprived of proper books, with Mr. Pradeep Pradhan, Chief Operating Officer
an objective of availing them with books and also to encourage Thank you.
them to read, the Bank regularly collects used/new story books Mr. Suman Sharma, Head Credit Risk Management
from its staff/ customers and distribute them to the needy Mr. Bijay Giri, Head Corporate Affairs
children.
Ms. Shabnam Limbu Joshi, Head Human Resources
The year saw a disastrous flood in the western part of country, Nanda Kishor Rathi Manish Jain Rajendra Kafle
many people were rendered homeless. The Bank came to the Mr. Pramod Dahal, Head Compliance, Operational Risk & Audit
Chairman Director Director (Representative Employees Provident Fund)
rescue of such homeless people by distributing clothes collected
from staff/customers. Subsidiary
Machchindra Football Club, a A Division leading football Club The Bank has established a solely owned subsidiary company-
NMB Capital Limited to carry out investment banking activities T Puraharan CP Ramakrishnan Harischandra Subedi Dr. Hari Prasad Shrestha
in the country, has been sponsored by the Bank during the year
with paid up capital of NPR100M. The subsidiary company during Director (Representative Young Leon Realty) Public Director Public Director
to promote and encourage local football talent much to the
delight of local residents. The sponsorship allowed the club to the year amongst other investment activities plan to launch
pursue the dreams of many young talents and the Bank is proud Mutual Fund. The company made a net profit of NPR6M during
to help realise such dreams. the fiscal year. Jeevan Man Joshi
Professional Director
BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM
Nanda Kishor Rathi T Puraharan CP Ramakrishnan Rajendra Kafle Upendra Poudyal Sunil KC
Chairman Director (Representative Young Leon Realty) Director (Representative Employees Provident Fund) Chief Executive Officer Deputy CEO
Manish Jain Harischandra Subedi Lt.Gen.Nepal Bhushan Chand (Retd) Pradeep Pradhan Suman Sharma
Director Public Director Public Director Chief Operating Officer Head Credit Risk Management and Control
Kamlesh Kumar Agrawal Jeevan Man Joshi Madhav Pradhan Bijay Giri Shabnam Limbu Joshi Pramod Dahal
Public Director Professional Director Company Secretary Head Corporate Affairs Head Human Resources Head Compliance, Operational Risk and Audit
CORPORATE GOVERNANCE RISK MANAGEMENT
NMB Bank Ltd. firmly believes that Good Corporate Governance Risk Management Committee with view of ensuring better risk Banking, by its nature, entails taking a wide array of risks such Market Risk
plays a pivotal role in the success of the Bank therefore NMB management in the bank is formed with 5 members chaired by as credit, market and operational risk. NMB Bank understands The bank is exposed to interest rate risk, foreign exchange risk
Bank practices good governance by complying all regulatory Non-Executive Director Mr. Rajendra Kafle, Coordinator of Audit these risks hence to measure and manage them a robust risk and risk pertaining to investment in equities and commodities
requirements and maintaining transparency in all business deals. Committee, Head Operations, Head Credit Risk and Head management framework is in place. Identifying, assessing and on a daily basis. To manage these risks the concerned units are
The Board of Directors and staff are committed towards the Compliance, Operational Risk and Audit as members. The mitigating risks are ongoing process in NMB Bank. guided by Asset and Liability Policy. Asset Liability Committee
'Code of Conduct/ethic'. committee reviews high risk issues escalated by Operational, (ALCO) meets every month to review the interest /foreign exchange
The Board of NMB Bank is represented by a Chairman and seven
Credit risk committees, Asset & Liability Committee (management Credit Risk risks so that current as well as forward looking risks are managed
level) and deliberates on the risks. Stress testing/Capital adequacy/ The extension of loans is the primary activity of the bank. Lending timely.
Non Executive Directors. The Board establishes strategy for the
Monetary Policies, its impact on the Banks are few of the topics activities require the bank to make judgement related to the
Bank which is reviewed periodically to address changes. It provides On the Board level, Risk Management Committee (RMC) is formed
discussed regularly at the committee. creditworthiness of borrowers based on the submitted financials.
adequate supervisory oversight on management's strategy. to oversee the high risk issues that the Bank may be exposed
Human Resource Service Committee is formed with 5 members Credit risk is one of the major risks that the bank faces every
The Executive Management of NMB Bank is constituted of 7 to. The high risk issues identified at the Management Level
under the coordination of Mr. Manish Jain, Non Executive Director. day. It must therefore be assessed, monitored and managed on
members, primarily led by Mr. Upendra Poudyal, Chief Executive committees Operational Risk Committees, Credit Risk Committees
The committee reviews staff's remuneration, compensation policy an ongoing basis. At NMB, credit risk unit is responsible for
Officer. The bank maintains sound internal control functions, and Asset Liability Committee are further deliberated at RMC and
and ensures that such remuneration/compensation is consistent analysis, assessment and monitoring of credit risk in each loan,
including an effective compliance function that, among other thus escalated to the Board. Hence with a robust Risk
with the bank's culture, long-term objectives and strategy, and the unit is empowered to decline loans if they do not comply to
things, routinely monitors compliance with corporate governance Management Framework in place, risks are managed
control environment. the credit norms. Credit Risk Committee at the Management level
rules, regulations, codes, policies and ensures that deviations efficiently/timely at NMB Bank Ltd.
meets every month to discuss various credit risks to ward off
are reported to an appropriate level of management. The Bank Good corporate governance is practiced in the interest of all any surprises in future. Risk arising as a result of market dynamics,
maintains robust risk management framework to manage stakeholders esp. shareholders. NMB works tirelessly in protecting political upheavals, customers' behavior are discussed in detail
operational risk, credit risk, market risk, liquidity risk and interest of the depositors hence operates in a safe and sound so that loan exposures can be managed better.
reputational risk. manner in compliance with applicable laws and regulations. Good
governance is in the DNA of every Board members and each
In keeping with NRB's Corporate Governance directives and to Operational Risk
staff of NMB Bank.
reinforce on effective governance, NMB Bank in the Board level Operational risk is the risk that arises from failure of process,
has formed 3 Committees led by 3 Non Executive Directors people, system and external events. NMB Bank understands the
namely, Audit Committee, Risk Management Committee and consequence of not managing operational risk hence an
Human Resources Committee. independent operational risk unit has been set up to
Audit Committee is formed under the coordination of Non evaluate/monitor risk, formulate procedures and to build control
Executive Director Mr. Harish Chandra Subedi, Mr Jeevan Man around the processes. Each month Operational Risk Committee
Shrestha, Non Executive Director as a Member and Head at management level meets to discuss operational risk of entire
Compliance, Operational Risk and Audit as a secretary. The banking functions. Identified risks are discussed and monitored
committee reviews internal/external/NRB audit reports, until it remains no threat to the bank. Operational processes are
recommends stringent control process and escalates the audit continuously reviewed to ensure adequate controls are in place.
observations to the Board. The Committee also reviews quarterly Regulatory requirements are fully complied.
unaudited financial reports of the Bank with recommendation to To prepare itself from unknown disasters that may impact the
the Board. The committee selects and recommends Internal bank and its services, NMB has prepared Business Continuity
Auditor and External Auditor to the Board based on their past Plan to tackle such emergencies so that services to the customers
record. Audit Committee is committed towards maintaining robust are hampered to the minimum.
control system hence monitors closure of risk issues raised by
Internal/External/NRB auditors.
Banking
Services
BANKING SERVICES
Customer Care Corporate Banking the rural populace. As regards extending financing to SMEs, banks Retail Banking being one of the main driving factors for overall
Welcome to the world of delightful banking experience!! Corporate Banking provides financial solutions to meet the ever have an important role to play due to their dominance in the business growth of the Bank, the Bank continues to invest to
changing demands of Multinationals and National Corporate financial systems and the limitations of informal finance, especially support Retail Banking business. This Branch has been created
NMB Bank Ltd in line with its philosophy Customer Care Our serving the higher end of the SME market. as a Retail Services Hub which will continuously provide superior
Houses- through our dedicated relationship team, industry
Religion has profoundly been raising the standard of customer services to our retail customers. Retail Services Hub shall be
specialists and product experts. Corporate Banking focuses on The Business Banking at NMB Bank focuses on personalized
services round the clock. Over the years, we have been extending primarily responsible for coordinating and uplifting retail business
the needs of corporate and commercial customers, providing services to SMEs borrowers, whether theyre looking to grow or
our presence to reach out our value customers. Today, with over of the Bank.
them with everyday banking, innovative products and services, are just starting out, who need tailored facilities to achieve their
28 touchpoints we take pride in delivering all the financial services
and specialist help. business goals with a wide range of business loans which best The Retail Services Hub comprises two distinct units Branch
available under one roof.
Our services are diversified and we cater to new as well as fits them. The Business Banking manages a diverse portfolio, Office and Retail Business Unit.
We also take pride in having continuously developed service being an active player in a multitude of sectors including retail,
existing businesses in different sector like manufacturing, Kantipath Branch Office
standards that best suits the ever changing customer need and trading, manufacturing or services. Our business banking team
production, trading, real estate etc. We work together with our
expectations. NMB Banks Call Centre first of its kind in the works with our clients with specialist advice, products and services Kantipath branch office is a retail branch which will cater to all
customers to achieve their financial goals with local/sector
industry is one of our attempts in delivering what we have been to help them organize their finances with the aim of growing the retail banking services requirements of the customers.
expertise across the country. By applying our product capabilities
promising to our customers. their profits.
and intellectual capital, we have built strong relationships with Retail Business Unit
Leveraging technology has been an integral part in enhancing many leading business houses and institutions. We understand
our customer service. By adding ATMs and other kiosks in greater the broader needs of the clients and design customized solutions Retail Banking Retail Business Unit is another component of Retail Services Hub.
numbers, we look forward to create a wide network of technology based on those needs. It has always been our strategy to provide The bank opened its 21st Branch in Kantipath, which came in Retail Business Unit comprising of four sub units; headed by Head
enabled services. Mobile and smart card technology have made value added services to clients and exceed their expectations. operations from 5th Baishakh 2070. In line with clear strategic of Retail Banking and Priority is responsible for management of both
us possible to reach out customer and serve them with financial Apart from this, project finance is one of the key focus areas for focus on Retail Banking Business, the retail hub was created to asset and liability side of the Retail Business in the Balance Sheet.
services and aid our effort in improving financial inclusion in the Corporate Banking in NMB Bank to support financing requirements centralize and standardized the retail activity of the Bank. The Retail Hub was created with a vision to give one point solution
best possible way. of projects through consortium lending as a Lead Bank or a Joint first dedicated Retail Branch located at the heart of the city in to our valued retail customers with their banking service
/Co- Lead Bank. terms of all aspect visibility, branding, location, and ambience. requirements. With a belief to meet expectations of all stake
Much of our effort has also been concentrated in catering the
need of valued customers. Hence, a dedicated team has been It is intended to cater two interrelated objectives namely (i) a holders, retail hub is actively working towards growing retail
working on transforming the customers need into financial dedicated structure to match the expanding retail banking segment business of the bank by indulging in entire retail banking business
product. By designing these products and adding more services (ii) encourage expansion in the aforementioned segment without process right from generating new ideas to converting them to
to what we offer, we hope to create and cater ever increasing jeopardizing the banks safety norms. business either by coordinating with sales points or directly
base of delighted customers. marketing the products.
We are equally dedicated to personalize our services yet remaining

professional. By exposing our resources to several learning and
engaging activities, we hope to boost their knowledge and
experience in enhancing customer service delivery.
As our valued customers are undoubtedly life & blood of business,
our working culture is all customers focused hence we have
strategized all our plans in the periphery of meeting the customers'
expectations. A hotel financed by the Bank under construction.
Moving forward, in line with our Vision 2020, in the coming years,
we are confident that our efforts will be increased manifold to The Bank firmly believes in understanding its customers' needs
be able to create and cater new customers and continue to win and providing financial solutions to them accordingly hence
hearts of our existing valued customers. For this we have been Corporate Banking has been providing wide range of services
working on several procedures and innovative concept of making like Term loans, Bridge Gap Loan, Working Capital, Trust Receipt,
our service more proactive and personal. Bills Discounting etc. and in Non fund based facilities Letter of
Credit, Bank Guarantee etc.
Since each valued customer is special to us, our effort towards
serving them by all means shall be heightened. We look forward Business Banking
to delight our customers by all means, all the time.
For Nepalese economies, Small and Medium Enterprises (SMEs)
play an important role in creating self-employment opportunities,
mobilizing and using local resources, and raising the income of
BANKING SERVICES
Micro Finance solutions/products, delivery channels and finding new fee based The core function of Operations in NMB Bank is to control and picture of the bank. Bank is continuously innovating new business
Catering to the financial need of people under low income strata avenues to diversify the income, the Bank has established a manage operating activities of various Business units and models for adding customer touch point in Internet, with local
has always been a focus of NMB Bank limited. The Bank has dedicated unit - Transaction Banking. branches. With diverse activities being made every second of the banks and BFIs with solution for cash management, remittance
established an independent Micro Finance Unit (MFU), which is day, it has a complex but incredibly important role to play in the and other value added services.
solely responsible for understanding the needs of such people and successful functioning of the bank. Our operations division is
Bank is able to create a mobile platform for its customer where
providing financial and non financial services to satisfy those needs. mainly responsible to manage the work processing functions of
in customers are able to receive banking services via their mobile
MFU is focused on the unbanked segments of the Nepalese the bank. This division has a pivotal role, as it has to work in close
phones. The value added services (VAS) like bill payment of mobile
economy, which stands around 60-70 percent of the total population. coordination with all Business functions the divisions/departments
and internet bills, utility bills are key services through this platform
for executing smooth transactions.
NMB Bank has been providing microfinance service in two ways- and are very popular among the customers.
wholesale lending and retail sales. NMB bank has helped to Operation is the back bone of the Bank. With an objective of
One of the prime concerns of the Bank is always with security
provide Banks services to the people in the rural areas of the keeping Business units/Branches focused on originating and
confidentiality and integrity of customers financial data as well
country from the east to west Nepal. NMB Bank has helped the retaining business, operations carry out back office work of the
as transactions. Bank has setup well defined practice in its IT
rural entrepreneurs by providing the micro loan to establish their entire bank such as outward/inward remittance, cheque book
operations and applied enough control to ensure that the
small scale enterprises. Bank also focuses on the rural micro printing, transfers request, salary transfers, inward clearing, cash
information is well protected. Bank has mature infrastructure
agriculture co-operative and communities. management within the valley. Operations and Business work
setup to meet banks needs in terms of growth and disaster
cohesively to deliver service excellence to the customers.
In order to have an agile system that can accommodate changing recovery. Virtualization, cloud computing, application hosting,
Operation is involved in every step of the new product launch to
needs and greater accessibility via different delivery channels, high availability are key trends that bank is following to cater the
the Bank acquired its switching infrastructure. With this the Bank ensure that at the time of execution the product is delivered to
challenges of coming days.
would be able to expand its card portfolio, enhance its accessibility the customers with perfection so that there is no room for any
and strengthen security. The Bank obtained associate membership complaints. IT staff strength, key deriver for bank innovative and sustainable
of VISA Worldwide and has started issuance of VISA Debit card. growth, are well equipped and trained to handle bank system
With complex products, tough external competitions, rising
The Bank will focus on expanding its card portfolio and customize portfolio. Bank has been continuously investing to build the
banking frauds, demanding customers the operating environment
its card offerings based on customer segmentation. capability of its internal human resources which are aligned in
gets more complex each day hence to take on the challenge
different sub domains in IT function of the bank.
With an objective of working towards financial inclusion of rural operation team is skilled on identification, assessment,
population and serving them in efficient way, the bank has been management and measurement of risks without compromising
on delivery of service to the customers. Operations of the Bank Treasury
The bank has mobilized branches and staff to serve the financial working in the field of branchless banking. So far it has its branchless
baking touch points in Thaiba, Dolakha, and Dhangadhi and Doti is robust as it shoulders the responsibility of executing operating The NMB Treasury team manages the organizations capital
requirements of low income individuals. Farmers, micro
district and also planning to increase its touch points in days to process of entire bank. resources, dealing with balance sheets, maintain its structure
entrepreneurs are the major beneficiary of the Banks service.
come. Under the Republic of Korea funded Food for New Village and maintain liquidity to support the profitability.
Besides Micro Loan the Bank has given major priority on the
saving mobilization of the women entrepreneurs. Tie up is done Project, the Bank also joined hands with the United Nations World Information Technology Treasury seeks to position NMB Bank in a manner that provides
with the Life insurance companies and remit companies to provide Food Programme (WFP) and provided cash distribution services to NMB bank has a strategic focus on introducing innovative banking the businesses with the necessary resources to pursue income
the best package product to the clients of Micro Finance. over 1600 beneficiaries in Ladagada and Pokhari Village Development
services through investments in robust technology platforms generating opportunities while at the same time maintaining a
Committees (VDCs) of Doti district. This project's primary objective
Furthermore, the Bank initiates to tie up with the INGOs and NGOs to that deliver efficient and seamless services across multiple prudent and disciplined approach to managing our balance sheet.
is to provide banking services to the unbanked population and
make the loan procedures easy and less cumbersome to small channels for customer convenience. Use of technology has
provide access to financial services for the first time. NMB Bank has been one of the proactive entities on managing
entrepreneurs at the rural and village level. The Bank has already done become crucial for obtaining operational efficiency, managing
activities related to foreign exchange and liquidity resources. It
tripartite agreement with various institutions to serve such clients. The Bank has a focused approach in Remittance as well. Sulav risk and compliance.
is one of the better performing Banks in terms of foreign exchange.
Remit is the Bank's own signature remittance product through
The Bank takes pride in its commitments towards financially NMB Bank has been a good runner while adapting the technology It also has been creating customer oriented products to help
which remittance service is being provided both inside and outside
challenged group and has never failed to meet the deprived sector in Banking. Over the years, there has been a noticeable shift from them hedge against currency risks. Going forward, treasury will
the country. The Bank has started acquiring remittance from
financing requirements of Nepal Rastra Bank. By financing to the Korea and United Arab Emirates (UAE). The Bank is continuously traditional to channel based banking. Introduction of ATMs strive towards introducing more customer oriented products to
people under lower income strata, the Bank pursues to contribute working towards expansion of correspondent relationship to (Automated Teller Machines) provided customers with any time better place them in terms of profitability in their sectors.
to the improvement of standard of living of the rural population. numerous other destinations to reach out to Nepali diasporas access to their money. Alliance with VISA network had added
Being one of the pivotal functions, the correspondence with
thats spread across the world. value to customer with global mobility in transaction processing
external entities and managing risk is a quintessential role of
Transaction Banking and payments.
treasury. To manage the same NMB Bank has established Treasury
Being customer centric, focus on customer relationship has Operations Innovative model of call center, which was the first of its kind in Middle Office and Correspondence Banking. It maintains relation
always been our utmost priority and we at NMB Bank equally Major focus of todays Bank is on brand recognition but it can Nepalese banking sector, was possible using technological with our external stakeholders and creates new relations to
believe in continuously improving the service delivery standard. only work if the right processes are in place to back them up. innovation in the bank. This model has helped bank to consolidate facilitate the business while also looking to manage risk in this
Identifying customer latent needs, devising appropriate Thats where Operations comes in at NMB Bank Ltd. customer engagement for support for services and a one window ever growing and volatile business environment.
BANKING SERVICES
Products & Services As an endeavor to attend to all banking requirements of the

NMB Bank has a vast range of Savings Deposit products available customers, we have been providing various Retail loans such as
to our customers. We have tailored various products to suit every Payroll Overdraft. It is made available exclusively for staff of the
customers' banking needs. organizations managing their payroll through the Bank. Home
Loan, Auto Loan, Education Loan, Personal Loan & Professional
This year, NMB Bank has added one more deposit product to its Loans are offered to the customers at a very competitive market
basket, 'NMB Bank Young Savers' which aims to encourage rates with personalized services. These Retail Loans are available
parents to engage in forward thinking for their childs financial in all branches of NMB Bank across the country.
future. In the course of opening an account for their child, parents
are instilling positive saving behavior in their child through To enhance customers banking experience with us, we provide
providing education about the importance of saving and the extensive banking hours including 365 days counter at our Retail
benefits of accumulating interest. Hub in Kantipath Branch. We offer 24 hour ATM services across
all branches for the convenience of our customers.
We have also been offering a variety of minimum balance options,
packaged with leading competitive interest rates and tailored NMB debit card is very popular with our customers with ever
benefits in various saving products as follows: increasing customer base of the same. NMB VISA International
Card is yet another services we offer for the convenience of our
NMB Bank Samriddha Bachat is suited for every person wishing frequent travelling customers who can travel any corner of the
to start maximizing the value of their hard earned money. world with just NMB VISA International Card in his/her wallet
NMB Bank Alakapuri Bachhat is designed for those customers without having to go through the trouble of exchanging cash.
who wish to deposit a high amount in order to gain high returns. Keeping up with the technology, NMB provides e-banking facilities
NMB Bank Lavansa Bachhat caters to the needs of shareholders and mobile banking subscriptions to the customer. After having
of NMB Bank and Nepal Telecom. This saving option assists in subscribed to these banking services is at the finger tips of our
efficient collection of dividends. customers literally.
Through NMB Bank Sahuliyat Mahila Bachhat we are providing NMB also takes care of the customers' time by enabling the
women with good returns on saving account with a low minimum customers to pay their Landline, Post Paid Mobile bills, ADSL bill
balance. NMB believes in supporting women in becoming payment from the bank's counters or through mobile banking.
financially independent by encouraging their saving habits with With view of providing convenience and giving service par
opening Sahuliyat Mahila Bachhat at NMB. excellence to the customers, NMB works continuously towards
NMB Bank Education Plan is devised to assist parents in saving meeting the challenges of changing times and hopes to give full
for the further education of their children. This account helps to satisfaction to its customers through new services and products.
ease the financial burden of education through creating a plan Sulav remit is the remittance service developed by the Bank
and providing a discount on Education Loan interest and which offers both domestic and international funds transfer
processing fee. facilities. Our domestic remittance service allows people within
NMB Mero Wish is a special recurring deposit product, which allows Nepal to transfer funds all over the country. NMB Bank Sulav
you to enjoy deposit flexibility of a savings account with interest rates Remit has established remittance business relationship with
of FD. NMB Mero Wish doesn't compel you to deposit money every various foreign banks and foreign exchange companies.
month like in any other recurring deposit account rather gives you
the freedom to route your savings as and when you like.
Social
Embracing
Responsibility
EMBRACING SOCIAL RESPONSIBILITY
Over the years NMB Bank has emerged as a corporate institutions in Kathmandu has substantial waste generated from offerings
actively working towards contributing to the society through each day. This year the program was taken a notch up through
supporting causes including healthcare, education, scholarship contribution of bins to convert bio degradable waste from the
programs and most importantly creating awareness on heritage offerings into fertilizers which would help marginalize the level
preservation through, NMB Social Initiative (NSI). of waste management in the temple. Efforts are being taken to
organize such cleanup programs at regular intervals to strengthen
NMB Social Initiative has been organizing the Alakapuri Kantipuri
the cause.
Heritage Walk since 2011, the proceeds from which have been
successfully utilized in the renovation of the Gorakhnath Temple, The NMB Bank Inter School Heritage Painting Competition was
Thapathali. The event in its third successive year has been actively initiated with the purpose to get the youth involved in spreading
supported by stakeholders, business partners and the general heritage awareness. The event has received overwhelming
public who brave the December chill to pledge their support for response from schools across the country wherein this year 130
the cause. The Bank has been able to establish its repute of being schools participated. The event that was divided into three
an advocate of heritage preservation and will continue to segments painting competition held at the picturesque Patan
undertake further projects on renovation of heritage sites. Museum, exhibition of the paintings at the National Academy of
Fine Arts and the event culminating into the prize distribution
In succession to the NMB Bank Heritage Walk, the Banks calendar
was actively followed on social network. The maturity and thought
has the Clean Up program on World Heritage Day and the Inter
put into the paintings by the participants on the theme of Heritage
School Heritage Painting Competition marked as the major CSR
Sites of Nepal continued to impress the panel of judges comprising
events for the year. Both in their second year have become
of some of Nepals most prominent figures in Art and Culture
immensely popular amongst the participants and stake holders.
who selected the award winning Top 5 Paintings. Award for the
Taking the importance of heritage preservation to the grass roots, Most Popular Painting on Facebook was awarded to the painting
the Clean Up program organized every year on World Heritage receiving the highest number of likes on the social networking
Day is a concerted effort by the bank to spread awareness on site.
the need to preserve heritage sites at the local level through its
staff in branches across the country, who collaborate with the
local authorities in organizing cleanup programs. The Bank believes
that change can be brought about only through and from the
grassroots. This year too, giving continuity to the drive initiated
in 2012, NMB Social Initiative in association with the Kathmandu
Municipal Corporation and the Nepal Army organized the
Bhadrakali Mandir Clean up Program on the occasion of World
Heritage Day. The Bhadrakali Mandir, one of the busiest of temples
Consolidated Balance Sheet Consolidated Profit and Loss Account

As at Ashad 31, 2070 (July 15, 2013) For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013)
Capital & Liabilities Current Year Rs. Previous Year Rs. Particulars Current Year Rs. Previous Year Rs.
1 Share Capital 2,000,000,000 2,000,000,000 1 Interest Income 1,840,628,019 1,717,662,054
2 Reserve and Funds 426,332,959 265,154,322 2 Interest Expenses 1,075,648,188 1,255,185,555
3 Debentures and Bonds - - Net Interest Income 764,979,831 462,476,499
4 Borrowings - - 3 Commission and Discount 52,727,311 38,505,546
5 Deposits 21,949,114,580 15,965,311,135 4 Other Operating Income 64,136,799 54,347,506
6 Bills Payables 238,462,539 4,506,483 5 Exchange Fluctuation Income 64,539,212 49,772,786
7 Proposed Dividend 205,263,158 4,210,526 Total Operating Income 946,383,153 605,102,337
8 Income Tax Liabilities - 4,166,215 6 Staff Expenses 132,047,614 97,075,072
9 Other Liabilities 316,014,541 286,145,736 7 Other Operating Expenses 193,308,948 162,050,706
Total Liabilities 25,135,187,777 18,529,494,417 8 Exchange Fluctuation Loss - -
Operating Profit Before Provision for Possible Loss 621,026,591 345,976,559
Assets Current Year Rs. Previous Year Rs. 9 Provision for Possible Losses 130,832,452 278,299,676
1 Cash Balance 516,770,350 323,939,422 Operating Profit 490,194,139 67,676,883
2 Balance with Nepal Rastra Bank 4,804,589,347 2,992,466,135 10 Non-operating Income/Loss 1,373,713 8,303,264
3 Balance with Banks/Financial Institutions 440,286,607 293,600,837 11 Loss Provision Written-Back 59,389,439 15,149,642
4 Money at Call and Short Notice 26,059,218 20,912,176 Profit from Regular Operations 550,957,291 91,129,789
5 Investments 2,217,368,254 2,416,002,621 12 Profit/Loss from extra-ordinary activities (419,078) 2,125,709
6 Loans, Advances and Bills Purchased 16,491,044,097 12,070,838,923 Net Profit after considering all activities 550,538,213 93,255,498
7 Fixed Assets 351,859,944 287,830,146 13 Staff Bonus Provision 50,412,564 8,477,772
8 Non-Banking Assets - - 14 Provision for Income Tax 137,683,852 28,040,538
9 Other Assets 287,209,960 123,904,157 Current Year 171,796,547 26,428,613
Total Liabilities 25,135,187,777 18,529,494,417 Previous Year (5,008,871) -
As per our attached report of even date Current Year Deferred Tax Income/(Loss) (29,103,824) 1,611,925
Net Profit/Loss 362,441,797 56,737,188
As per our attached report of even date
Upendra Poudyal Nandakishor Rathi Sundar Man Shrestha, FCA Upendra Poudyal Nandakishor Rathi Sundar Man Shrestha, FCA
Chief Executive Officer Chairman For Sundar & Co. Chief Executive Officer Chairman For Sundar & Co.
Chartered Accountants Chartered Accountants
Harischandra Subedi Manish Jain Rajendra Kafle Harischandra Subedi Manish Jain Rajendra Kafle
Director Director Director Director Director Director
Jeewan Man Joshi Dr. Hari Prasad Shrestha T. Puraharan C.P. Ramkrishnan Jeewan Man Joshi Dr. Hari Prasad Shrestha T. Puraharan C.P. Ramkrishnan
Director Director Director Director Director Director
Pradeep Pradhan Mridul Parajuli Pradeep Pradhan Mridul Parajuli

Chief Operating Officer Head - Finance and Planning Chief Operating Officer Head - Finance and Planning
Date: 6th October, 2013 Date: 6th October, 2013

Place: NMB Bhawan, Babarmahal, Kathmandu Place: NMB Bhawan, Babarmahal, Kathmandu
Consolidated Profit and Loss Appropriation Account
(Amount in Rs.)
2,276,364,849
-
-
-
-
-
-
-
(205,263,158)
-
2,276,364,849
2,437,543,487
Amount
366,441,796
Total
For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013)
Particulars Current Year Rs. Previous Year Rs.

Income
1 Accumulated profit up to the last year 56,741,122 15,298,798
and Fund
Other
Reserve
-
-
-
-
-
-
-
-
-
-
-
-
-
2 Current Year's Profit 366,441,796 56,737,188
3 Dividend Distribution of Subsidiary Company (4,000,000) -
Total 419,182,918 72,035,986
Expenses
Adjustment
Investment
Reserve
2,269,011
-
-
-
-
-
-
-
-
-
97,991,702
2,269,011
100,260,713
1 Accumulated Loss up to the last year - -
2 Current Year's Loss - -
3 General Reserve 72,078,725 10,444,888
4 Contingent Reserve - -
5 Institutional Development Fund - -
-
-
-
-
-
-
-
-
-
25,355,930
-
-
25,355,930
Deffered
Tax Reserve
6 Dividend Equalization Fund - -
7 Staff Related Reserve Fund - -
8 Proposed Dividend 205,263,158 4,210,526
9 Proposed issue of Bonus Shares - -
10 Special Reserve Fund - -
11 Exchange Equalization Fund 4,033,701 4,357,725
10,772,167
-
-
-
-
-
4,033,701
-
-
-
-
10,772,167
14,805,868
Equalization
Exchange
Fund
12 Capital Redemption Reserve Fund - -
13 Capital Adjustment Fund - -
Consolidated Statement of Changes in Equity

14 Others 123,347,632 492,251
a) Deferred Tax Reserve 25,355,930 -
b) Investment Adjustment Reserve 97,991,702 492,251
Share
Premium
10,077,915
-
-
-
-
-
-
-
-
-
-
10,077,915
10,077,915
T. Puraharan C.P. Ramkrishnan

Total 404,723,216 19,505,390
15 Accumulated Profit/(Loss) 14,459,702 52,530,596
Sundar Man Shrestha, FCA

Chartered Accountants
Capital
Fund
Reserve
For Sundar & Co.

-
-
-
-
-
-
-
-
-
-
-
-
-
Upendra Poudyal Nandakishor Rathi Sundar Man Shrestha, FCA
Rajendra Kafle
Chief Executive Officer Chairman For Sundar & Co.
196,504,634
-
-
-
-
72,078,725
-
-
-
-
-
196,504,634
268,583,359
General
Reserve
Director
Director
Harischandra Subedi Manish Jain Rajendra Kafle
Director Director Director
Jeewan Man Joshi Dr. Hari Prasad Shrestha T. Puraharan C.P. Ramkrishnan
56,741,122
-
-
-
366,441,796
(72,078,725)
(4,033,701)
-
(25,355,930)
(205,263,158)
(97,991,702)
56,741,122
18,459,702
Profit/Loss
Share Accumulated
Head - Finance and Planning

Dr. Hari Prasad Shrestha

Pradeep Pradhan Mridul Parajuli
Nandakishor Rathi
Chief Operating Officer Head - Finance and Planning
2,000,000,000
-
-
-
-
-
-
-
-
-
-
2,000,000,000
2,000,000,000
Mridul Parajuli
Capital
Manish Jain
Chairman
Place: NMB Bhawan, Babarmahal, Kathmandu

Date: 6th October, 2013
Director
Director
As at Ashad 31, 2070 (July 15, 2013)
Investment Adjustment Reserve

Exchange Equalization Fund
Current Year's Net Profit
Auction of Right Shares
Proposed Bonus Share

Deferred Tax Reserve
Chief Operating Officer

Harischandra Subedi
Proposed Dividend
Jeewan Man Joshi

Opening Balance
Closing Balance
General Reserve
Pradeep Pradhan
Upendra Poudyal
Share Premium
Adjustments
Right Shares
Particulars
Balance
Director
Director
Consolidated Cash Flow Statement Significant Accounting Policies and Notes to the Accounts

forming part of Consolidated Financial Statements
Financial Year 16 July 2012 to 15 July 2013 (1 Shrawan 2069 to 31 Ashad 2070)
(a) Cash flow from Operating Activities 259,352,207 (55,928,923)
1 Cash Received 1,984,081,646 1,771,644,888
1.1 Interest Income 1,741,968,201 1,603,477,371 1. Consolidated Financial Statements
1.2 Commission and Discount Income 52,727,311 38,505,546 The consolidated financial statements for the year ended on 15 July 2013 comprise of the accounts of NMB Bank Limited (the Bank) and its
1.3 Income from foreign exchange transaction 64,539,212 49,772,786 subsidiary, NMB Capital Limited, a fully owned subsidiary of the Bank. The Bank and its subsidiary are collectively called as the Group.
1.4 Recovery of Loan written off - 2,125,709
1.5 Other Income 124,846,922 77,763,476
2 Cash Payment 1,724,729,439 1,827,573,811 2. General Information
2.1 Interest Expenses 1,075,648,188 1,255,185,555 NMB Bank Limited (the "Bank") is a limited liability company domiciled in Nepal. The registered office of the Bank is G.P.O. Box 11543, Babar Mahal,
2.2 Staff Expenses 132,047,614 97,075,072 Kathmandu, Nepal. The Bank has a primary listing in the Nepal Stock Exchange Limited. The Bank carries out commercial banking activities in
2.3 Office Operating Expenses 193,308,948 162,050,706 Nepal under license from Nepal Rastra Bank as a Class A licensed financial institution.
2.4 Income Tax Paid 142,479,673 26,485,029 The Bank has a fully owned subsidiary company, NMB Capital Limited, with an investment of NPR 100 million. The subsidiary company received
2.5 Other Expenses 181,245,016 286,777,449 operating license from the Securities Board and started its commercial operation from September 17, 2010. NMB Capital carries out merchant
banking functions which include activities such as public issue management, registrar to shares and share underwriting, among others.
Cash Flow before changes in Working Capital 1,658,970,287 1,846,680,159
Increase/(Decrease) of Current Assets (4,588,658,019) (647,496,555)
1 (Increase)/Decrease in Money at Call and Short Notice (5,147,042) 238,254,457 3. Basis of Preparation of Consolidated Financial Statements
2 (Increase)/Decrease in Short-term Investment - - The consolidated financial statements are prepared on the historical cost basis. The preparation of the financial statements is in conformity with
3 (Increase)/Decrease in Loan and Bills Purchase (4,420,205,174) (862,264,987) NAS and requires use of certain critical accounting estimates. It also requires the managements to exercise judgement in the process of applying
4 (Increase)/Decrease in Other Assets (163,305,803) (23,486,025) accounting policies.
Increase/(Decrease) of Current Liabilities 6,247,628,306 2,494,176,714 Intra-group assets and liabilities, equity, income, expenditure and cash flows relating to transactions between entities of the group have been
1 Increase/(Decrease) in Deposits 5,983,803,445 3,165,817,347 eliminated.
2 Increase/(Decrease) in Certificate of Deposits - -
3 Increase/(Decrease) in Short-term Borrowings - (497,200,000)
4 Increase/(Decrease) in Other Liabilities 263,824,861 (174,440,633) 4. Audit
(b) Cash flow from Investment Activities 233,317,416 309,207,869 The statutory audits of both the companies for fiscal year 2068-69 have been independently performed by separately appointed statutory auditors.
1 (Increase)/Decrease in Long-term Investment 198,634,367 196,443,738
2 (Increase)/Decrease in Fixed Assets (64,029,798) (1,457,489)
3 Interest income from Long-term Investment 98,659,818 114,184,684
5. Significant Accounting Policies
4 Dividend Income 53,029 36,936 The principal accounting policies applied in the preparation of the consolidated financial statements are consistent across both the companies.
5 Others - -
(c) Cash flow from Financing Activities (4,000,000) (7,000,000)
1 Increase/(Decrease) in Long-term Borrowings (Bond, Debentures etc.) - -
2 Increase/(Decrease) in Share Capital - -
3 Increase/(Decrease) in Other Liabilities (Last year Dividend Payment) (4,000,000) (7,000,000)
4 Increase/(Decrease) in Refinance/facilities received from NRB - -
5 Increase/(Decrease) in Share Premium - -
(d) Income/Loss from change in exchange rate in Cash and Bank Balances - -
(e) Current Year's Cash Flow from All Activities 2,147,639,910 2,092,959,105
(f) Opening Balance of Cash and Bank Balances 3,610,006,394 1,517,047,289
(g) Closing Balance of Cash and Bank Balances 5,757,646,304 3,610,006,394




Balance Sheet Profit and Loss Account

As at Ashad 31, 2070 (July 15, 2013) For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013)
Capital & Liabilities Schedule Current Year Rs. Previous Year Rs. Particulars Schedules Current Year Rs. Previous Year Rs.
1 Share Capital 4.1 2,000,000,000 2,000,000,000 1 Interest Income 4.18 1,831,120,692 1,705,833,089
2 Reserve and Funds 4.2 424,079,891 263,686,267 2 Interest Expenses 4.19 1,077,802,971 1,256,257,336
3 Debentures and Bonds 4.3 - - Net Interest Income 753,317,721 449,575,753
4 Borrowings 4.4 - - 3 Commission and Discount 4.20 52,727,311 38,505,546
5 Deposits 4.5 22,185,526,928 15,982,555,058 4 Other Operating Income 4.21 56,354,510 53,699,689
6 Bills Payables 4.6 8,210,902 4,506,483 5 Exchange Fluctuation Income 4.22 64,539,212 49,772,786
7 Proposed Dividend 200,000,000 - Total Operating Income 926,938,754 591,553,774
8 Income Tax Liabilities - - 6 Staff Expenses 4.23 127,354,655 92,443,491
9 Other Liabilities 4.7 308,166,845 244,082,741 7 Other Operating Expenses 4.24 189,457,165 159,629,600
Total Liabilities 25,125,984,566 18,494,830,549 8 Exchange Fluctuation Loss 4.22 - -
Operating Profit Before Provision for Possible Loss 610,126,934 339,480,683
Assets Schedule Current Year Rs. Previous Year Rs. 9 Provision for Possible Losses 4.25 130,832,452 278,299,676
1 Cash Balance 4.8 516,770,350 323,939,422 Operating Profit 479,294,482 61,181,007
2 Balance with Nepal Rastra Bank 4.9 4,804,589,347 2,992,466,135 10 Non-operating Income/Loss 4.26 7,234,665 8,303,264
3 Balance with Banks/Financial Institutions 4.10 424,968,130 250,578,034 11 Loss Provision Written-Back 4.27 59,389,439 15,149,642
4 Money at Call and Short Notice 4.11 26,059,218 20,912,176 Profit from Regular Operations 545,918,586 84,633,913
5 Investments 4.12 2,245,514,155 2,440,441,621 12 Profit/Loss from extra-ordinary activities 4.28 (419,078) 2,125,709
6 Loans, Advances and Bills Purchased 4.13 16,491,044,097 12,070,838,923 Net Profit after considering all activities 545,499,508 86,759,622
7 Fixed Assets 4.14 344,624,933 279,479,436 13 Staff Bonus Provision 49,590,864 7,887,238
8 Non-Banking Assets 4.15 - - 14 Provision for Income Tax 135,515,020 26,647,942
9 Other Assets 4.16 272,414,336 116,174,802 Current Year's 169,674,481 24,873,104
Total Assets 25,125,984,566 18,494,830,549 Previous Years' (5,041,032) -
Current Year Deferred Tax Income/(Expenses) (29,118,429) 1,774,838
Contingent Liabilities Schedule 4.17 Net Profit/Loss 360,393,624 52,224,442
Declaration of Directors Schedule 4.29 Schedules 4.18 to 4.28 form integral part of the Profit and Loss Account. As per our attached report of even date
Statement of Capital Fund Schedule 4.30 (A1)
Statement of Credit Risk Schedule 4.30 (B)
Statement of Credit Risk Mitigation Schedule 4.30 (C)
Statement of Operation Risk Schedule 4.30 (D)
Statement of Market Risk Schedule 4.30 (E)
Principal Indicators Schedule 4.31 Upendra Poudyal Nandakishor Rathi Sundar Man Shrestha, FCA
Principal Accounting Policies Schedule 4.32 Chief Executive Officer Chairman For Sundar & Co.
Notes to Accounts Schedule 4.33
Statement of Promoter's Loan Schedule 4.34
Comparative Report of Unaudited and Audited Financial Result Schedule 4.35 Harischandra Subedi Manish Jain Rajendra Kafle
Unaudited Financial Results Schedule 4.36 Director Director Director
Schedules 4.1 to 4.17 and 4.32, 4.33 form integral parts of this Balance Sheet. As per our attached report of even date
Chief Executive Officer Chairman For Sundar & Co. Pradeep Pradhan Mridul Parajuli
Chartered Accountants Chief Operating Officer Head - Finance and Planning

Director Director Director Date: 6th October, 2013


Profit and Loss Appropriation Account
(Amount in Rs.)
2,263,686,267
-
-
-
360,393,624
-
-
-
(200,000,000)
-
-
2,263,686,267
2,424,079,891
Total
Amount
Particulars Schedules Current Year Rs. Previous Year Rs.

Income
1 Accumulated profit up to the last year 44,062,540 7,132,962
Reserve and Fund

Other
Reserve
-
-
-
-
-
-
-
-
-
-
-
-
-
2 Current Year's Profit 360,393,624 52,224,442
3 Exchange Equalization Fund - -
Total 404,456,164 59,357,404
Expenses
2,269,011
-
-
-
-
-
-
-
-
-
97,991,702
2,269,011
100,260,713
Adjustment
Investment
1 Accumulated Loss up to the last year - -
2 Current Year's Loss - -
3 General Reserve 72,078,725 10,444,888
4 Contingent Reserve - -
5 Institutional Development Fund - -
-
-
-
-
-
-
-
-
-
-
25,355,930
-
25,355,930
Deffered
Tax Reserve
6 Dividend Equalization Fund - -
7 Staff Related Reserve Fund - -
8 Proposed Dividend 200,000,000 -
9 Proposed issue of Bonus Shares - -
10 Special Reserve Fund - -
11 Exchange Equalization Fund 4,033,701 4,357,725
10,772,167
-
-
-
-
-
-
4,033,701
-
-
-
10,772,167
14,805,868
Equalization
Exchange
Fund
12 Capital Redemption Reserve Fund - -
13 Capital Adjustment Fund - -
14 Others 123,347,632 492,251
a) Deferred Tax Reserve 25,355,930 -
b) Investment Adjustment Reserve 97,991,702 492,251
Share
Premium
- 10,077,915
-
-
-
-
-
-
-
-
-
-
- 10,077,915
10,077,915
T. Puraharan C.P. Ramkrishnan

Total 399,460,058 15,294,864
15 Accumulated Profit/(Loss) 4,996,106 44,062,540
Sundar Man Shrestha, FCA

Capital
Fund
Reserve
-
-
-
-
-
-
-
-
-
-
-
For Sundar & Co.
Rajendra Kafle
196,504,634
-
-
-
-
-
72,078,725
-
-
-
-
196,504,634
268,583,359
General
Reserve
Statement of Changes in Equity
Director
Director
44,062,540
-
-
-
360,393,624
-
(72,078,725)
(4,033,701)
(200,000,000)
(25,355,930)
(97,991,702)
44,062,540
4,996,106
Profit/Loss
Share Accumulated
Head - Finance and Planning

Dr. Hari Prasad Shrestha
Nandakishor Rathi
2,000,000,000
-
-
-
-
-
-
-
-
-
-
2,000,000,000
2,000,000,000
Mridul Parajuli
Capital
Manish Jain
Chairman

Director
Director
As at Ashad 31, 2070 (July 15, 2013)


Exchange Equalization Fund
Current Year's Net Profit
Auction of Right Shares

Chief Operating Officer
Deferred Tax Reserve
Harischandra Subedi
Proposed Dividend
Jeewan Man Joshi
Pradeep Pradhan
Opening Balance
Upendra Poudyal
Closing Balance
General Reserve
Share Premium
Adjustments
Right Shares
Particulars
Balance
Director
Director
Cash Flow Statement Share Capital and Ownership Schedule 4.1

For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013) As at Ashad 31, 2070 (July 15, 2013)
Particulars Current Year Rs. Previous Year Rs. Particulars Current Year Rs. Previous Year Rs.
(a) Cash flow from Operating Activities 266,102,710 (59,124,654) 1. Share Capital
1 Cash Received 1,968,233,904 1,752,518,107 1.1 Authorized Capital
1.1 Interest Income 1,732,460,874 1,591,648,406 a) 20,000,000 Ordinary Shares of Rs.100 each 2,000,000,000 2,000,000,000
1.2 Commission and Discount Income 52,727,311 38,505,546 b) . Non-redeemable preference shares of Rs. . each
1.3 Income from foreign exchange transaction 64,539,212 49,772,786 c) . Redeemable Preference Shares of Rs. .each
1.4 Recovery of Loan written off - 2,125,709 1.2 Issued Capital
1.5 Other Income 118,506,507 70,465,660 a) 20,000,000 Ordinary Shares of Rs.100 each 2,000,000,000 2,000,000,000
2 Cash Payment 1,702,131,194 1,811,642,761 b) . Non-redeemable preference shares of Rs. . each
2.1 Interest Expenses 1,069,381,038 1,246,734,813 c) . Redeemable Preference Shares of Rs. each
2.2 Staff Expenses 127,354,655 92,443,491 1.3 Paid up Capital
2.3 Office Operating Expenses 189,457,165 159,629,600 a) 20,000,000 Ordinary Shares of Rs.100 each 2,000,000,000 2,000,000,000
2.4 Income Tax Paid 135,515,020 26,647,942 b) . Non-redeemable preference shares of Rs. . each
2.5 Other Expenses 180,423,316 286,186,915 c) . Redeemable Preference Shares of Rs. each
Cash Flow before changes in Working Capital 1,680,746,710 1,839,775,762 1.4 Proposed Bonus Share - -
Increase/(Decrease) of Current Assets (4,581,591,751) (645,115,777) 1.5 Call in Advance - -
1 (Increase)/Decrease in Money at Call and Short Notice (5,147,042) 238,254,457 1.6 Total (1.3+1.4+1.5) 2,000,000,000
2 (Increase)/Decrease in Short-term Investment - -
3 (Increase)/Decrease in Loan and Bills Purchase (4,420,205,174) (862,264,987) Share Ownership
4 (Increase)/Decrease in Other Assets (156,239,535) (21,105,247) As at Ashad 31, 2070 (July 15, 2013)
Increase/(Decrease) of Current Liabilities 6,262,338,461 2,484,891,537 Current Year Rs. Previous Year Rs.
Share Ownership
1 Increase/(Decrease) in Deposits 6,202,971,870 3,116,333,131 % Share Capital Share Capital %
2 Increase/(Decrease) in Certificate of Deposits - - 1 Local Ownership 87.10 1,742,006,023 1,742,006,023 87.10
3 Increase/(Decrease) in Short-term Borrowings - (497,200,000) 1.1 Government of Nepal - - - -
4 Increase/(Decrease) in Other Liabilities 59,366,591 (134,241,594) 1.2 "A" Class Licensed Institutions - - - -
(b) Cash flow from Investment Activities 232,494,816 292,445,543 1.3 Other Licensed Institutions - - - -
1 (Increase)/Decrease in Long-term Investment 194,927,466 174,504,738 1.4 Other Entities 17.16 343,125,920 344,485,450 17.22
2 (Increase)/Decrease in Fixed Assets (65,145,497) (2,930,814) 1.5 Individual 69.94 1,398,880,103 1,397,520,573 69.88
3 Interest income from Long-term Investment 98,659,818 114,184,683 1.6 Others - - - -
4 Dividend Income 4,053,029 6,686,936 2 Foreign Ownership 12.90 257,993,977 257,993,977 12.90
5 Others - - Total 100.00 2,000,000,000 2,000,000,000 100.00
(c) Cash flow from Financing Activities - -
1 Increase/(Decrease) in Long-term Borrowings (Bond, Debentures etc.) - - List of Shareholders holding more than 0.5% of Share Capital
2 Increase/(Decrease) in Share Capital - - Current Year
Name of the Shareholders
3 Increase/(Decrease) in Other Liabilities - - Amount % of Total
4 Increase/(Decrease) in Refinance/facilities received from NRB - - Yong Lian Realty 257,993,977 12.90%
5 Increase/(Decrease) in Share Premium - - Employees Provident Fund 220,133,344 11.01%
(d) Income/Loss from change in exchange rate in Cash and Bank Balances - - Nanda Kishor Rathi 103,078,069 5.15%
(e) Current Year's Cash Flow from All Activities 2,179,344,236 2,073,096,651 Gayatri Investment & Management (P) 85,147,300 4.26%
(f) Opening Balance of Cash and Bank Balances 3,566,983,591 1,493,886,940 Trilok Chand Agrawal 81,050,700 4.05%
(g) Closing Balance of Cash and Bank Balances 5,746,327,827 3,566,983,591 Purushottam Lal Sanghai 77,025,800 3.85%
Pawan Kumar Golyan 77,025,800 3.85%
Atmaram Murarka 77,025,800 3.85%
Upendra Poudyal Nandakishor Rathi Sundar Man Shrestha, FCA Santosh Rathi 61,491,575 3.07%
Chief Executive Officer Chairman For Sundar & Co. Anant Kumar Golyan 37,496,720 1.87%
Chartered Accountants Balram Neupane 29,673,402 1.48%
Narpat Singh Jain 27,435,419 1.37%
Director Director Director Din Bandhu Agrawal 30,097,020 1.50%
Ashok Kumar Murarka 23,107,920 1.16%
Jeewan Man Joshi Dr. Hari Prasad Shrestha T. Puraharan C.P. Ramkrishnan Yamuna Devi Tapadiya 19,340,500 0.97%
Subhash Chandra Sanghai 19,083,020 0.95%
Pradeep Pradhan Mridul Parajuli Bishal Agrawal 19,083,020 0.95%
Chief Operating Officer Head - Finance and Planning Rajesh Agrawal 18,181,625 0.91%
Shiva Ratan Sharda 15,749,866 0.79%
Sharad Goyal 14,384,300 0.72%
Date: 6th October, 2013 Manju Tapadiya 12,120,200 0.61%
Place: NMB Bhawan, Babarmahal, Kathmandu Haribabu Neupane 10,000,000 0.50%
Note: The above detail of shareholders holding more than 0.5% of share capital includes the divested shares also.
Reserve and Funds Schedule 4.2 Deposits Schedule 4.5

As at Ashad 31, 2070 (July 15, 2013) As at Ashad 31, 2070 (July 15, 2013)
1 General Reserve Fund 268,583,359 196,504,634 1 Non-Interest Bearing Accounts
A. Current Deposits 664,005,726 609,309,051
2 Capital Reserve Fund 10,077,915 10,077,915 1. Local Currency 647,581,784 605,241,267
3 Capital Redemption Reserve - - 1.1 Government of Nepal 89,252,595 7,901,679
4 Capital Adjustment Fund - - 1.2 "A" Class Licensed Institutions 3,180,866 170,998
5 Other Reserve Fund 125,616,643 2,269,011 1.3 Other Licensed Institutions 161,269,473 371,415,517
5.1. Contingent Reserve - - 1.4 Other Organized Institutions 343,457,065 210,374,281
1.5 Individuals 50,421,785 15,378,792
5.2. Institution Development Fund - - 1.6 Others - -
5.3. Dividend Equalization Fund - - 2. Foreign Currency 16,423,942 4,067,784
5.4. Special Reserve Fund - - 2.1 Government of Nepal
5.5. Assets Revaluation Reserve - - 2.2 "A" Class Licensed Institutions
2.3 Other Licensed Institutions
5.6. Deferred Tax Reserve 25,355,930 -
2.4 Other Organized Institutions 16,423,942 4,067,784
5.7. Other Free Reserves - - 2.5 Individuals
5.8. Investment Adjustment Reserve 100,260,713 2,269,011 2.6 Others - -
5.9. Other Reserves - - B. Margin Deposits 1,301,674,322 110,863,183
6 Accumulated Profit/Loss 4,996,106 44,062,540 1 Employees Guarantee
2 Guarantee Margin 27,800,600 14,596,855
7 Exchange Equalization Fund 14,805,868 10,772,167 3 Letters of Credit Margin 1,273,873,722 96,266,328
Total 424,079,891 263,686,267 C. Others - -
1. Local Currency - -
1.1 Financial Institutions - -
1.2 Other Organized Institutions - -
Debentures and Bonds Schedule 4.3

1.3 Individuals
2. Foreign Currency
2.1 Financial Institutions
-
-
-
-
-
-
As at Ashad 31, 2070 (July 15, 2013) 2.2 Other Organized Institutions - -
2.3 Individuals - -
Particulars Current Year Rs. Previous Year Rs. Total of Non-Interest Bearing Accounts 1,965,680,048 720,172,234
1 . Percent Bond/Debentures of Rs. each - - 2 Interest Bearing Accounts
Issued on and Matured on .. A. Saving Deposits 3,718,675,723 3,311,063,426
(Outstanding balance of Redemption Reserve Rs. .) 1. Local Currency 3,693,641,727 3,287,473,345
1.1 Organized Institutions 71,455,921 27,986,869
2 . Percent Bond/Debentures of Rs. each - -
1.2 Individuals 3,622,185,806 3,259,486,476
Issued on and Matured on .. 1.3 Others - -
(Outstanding balance of Redemption Reserve Rs. .) 2. Foreign Currency 25,033,996 23,590,081
3 - - 2.1 Organized Institutions 2,425,509 11,305,008
Total (1+2+3) - - 2.2 Individuals 22,608,487 12,285,073
2.3 Others - -
B. Fixed Deposits 8,321,272,160 6,881,752,498
1. Local Currency 7,154,325,520 6,001,204,748
1.1 Organized Institutions 5,317,190,251 3,792,551,465
1.2 Individuals 1,837,135,269 2,208,653,283
Borrowings Schedule 4.4

1.3 Others
2. Foreign Currency
2.1 Organized Institutions
1,166,946,640
-
1,166,391,000
880,547,750
880,547,750
-
As at Ashad 31, 2070 (July 15, 2013)

2.2 Individuals 555,640 -
Particulars Current Year Rs. Previous Year Rs. 2.3 Others - -
C. Call Deposit 8,179,898,997 5,069,566,900
A. Local 1. Local Currency 8,032,265,223 4,778,292,512
1 Government of Nepal - - 1.1 "A" Class Licensed Institutions - 8,870
2 Nepal Rastra Bank - - 1.2 Other Licensed Financial Institutions 3,115,910,879 2,182,943,078
3 Repo Obligation - - 1.3 Other Organized Institutions 4,890,199,453 2,566,783,669
1.4 Individuals 26,154,891 28,556,895
4 Inter-Bank and Financial Institutions - -
1.5 Others - -
5 Other Organized Institutions - - 2. Foreign Currency 147,633,774 291,274,388
6 Others - - 2.1 "A" Class Licensed Institutions - -
Total - - 2.2 Other Licensed Financial Institutions 39,574,048 6,682,660
B. Foreign 2.3 Other Organized Institutions 108,059,726 284,591,728
2.4 Individuals - -
1 Banks - -
2.5 Others - -
2 Others - - D. Certificate of Deposit - -
Total - - 1. Organized Institutions - -
Total (A+B) - - 2. Individuals - -
3. Others - -
Total of Interest Bearing Accounts 20,219,846,880 15,262,382,824
Total Deposit (1+2) 22,185,526,928 15,982,555,058
Bills Payable Schedule 4.6 Balance with Banks/Financial Institutions Schedule 4.10
Particulars Current Year Rs. Previous Year Rs. Particulars Local Currency Rs. Foreign Currency Rs. Current Year Previous Year Rs.
1 Local Currency 7,588,202 4,285,858 INR Convertible Total Grand Total Rs.
2 Foreign Currency 622,700 220,625 1 Local Licensed Institutions 128,138,253 100,648,544
Total 8,210,902 4,506,483 a) Current Account 128,138,253 - - - 128,138,253 100,648,544
b) Other Account - -
2 Foreign Banks 296,829,877 149,929,490
a) Current Account - 68,931,784 227,898,093 296,829,877 296,829,877 149,929,490
b) Other Account - -
Other Liabilities
Total 424,968,130 250,578,034
Schedule 4.7 Note :
As at Ashad 31, 2070 (July 15, 2013) a) Total Balance for which the confirmations are received from respective licensed institutions Rs 445,706,155 and the differences are reconciled.

1 Pension/Gratuity Fund 22,084,839 15,335,603
2 Employees Provident Fund - -
3 Employees Welfare Fund - -
4 Provision for Staff Bonus
5 Interest Payable on Deposits
49,590,864
48,351,972
7,887,238
39,930,039
Money at Call and Short Notice Schedule 4.11
As at Ashad 31, 2070 (July 15, 2013)
6 Interest Payable on Borrowings - -
7 Unearned Discount and Commission 5,841,786 1,646,896 Particulars Current Year Rs. Previous Year Rs.
8 Sundry Creditors 87,937,537 27,095,112 1. Local Currency - -
9 Branch Account - - 2. Foreign Currency 26,059,218 20,912,176
10 Deferred Tax Liabilities - 3,762,499 Total 26,059,218 20,912,176
11 Dividend Payable 20,663,177 24,438,779
12 Others 73,696,670 123,986,569
a) NEA Power Bond Interest Payable - 58,769,311
b) Merchant Banking-IPO Collection 22,800 6,779,508
c) Merchant Banking-Collection Commission payable
d) Audit fee payable
-
190,688
10,034
190,688
Investments Schedule 4.12
e) Employees Accumulated Sick Leave 14,534,741 10,524,655 As at Ashad 31, 2070 (July 15, 2013)
f) Others 58,948,441 47,712,379
Particulars Purpose Current Year Rs. Previous Year Rs.
Total 308,166,845 244,082,741
Trading Other
1 Government of Nepal Treasury Bills - 543,388,310 543,388,310 1,136,654,048
2 Government of Nepal Savings Bond 1,050,000 996,944,951 997,994,951 1,021,743,850
3 Government of Nepal Other Securities - - - -
4 Nepal Rastra Bank Bonds - - - -
Cash Balance Schedule 4.8 5
6
Foreign Securities
Local Licensed Institutions
-
-
-
335,300,000
-
335,300,000
-
-
As at Ashad 31, 2070 (July 15, 2013)
7 Foreign Banks - 253,404,953 253,404,953 150,914,244
Particulars Current Year Rs. Previous Year Rs. 8 Corporate Shares - 115,432,752 115,432,752 113,450,549
1. Local Currency (including coin) 489,633,336 310,884,486 9 Corporate Bonds and Debentures - - - 20,000,000
2. Foreign Currency 27,137,014 13,054,936 10 Other Investment - - - -
Total 516,770,350 323,939,422 Total Investment 2,245,520,966 2,442,762,691
Provision 6,811 2,321,070
Net Investment 2,245,514,155 2,440,441,621
Balance with Nepal Rastra Bank Schedule 4.9

As at Ashad 31, 2070 (July 15, 2013)
Particulars Local Currency Rs. Foreign Currency Rs. Current Year Previous Year Rs.
INR Convertible Total Grand Total Rs.
1 Nepal Rastra Bank 4,804,589,347 2,992,466,135
a) Current Account 4,785,865,195 - 18,724,152 18,724,152 4,804,589,347 2,992,466,135
b) Other Account - - - - - -
Note: Balance with Nepal Rastra Bank as per confirmation Rs. 4,814,151,145
Investment in Shares, Debentures and Bonds Schedule 4.12 (A) Investments (Held for Trading) Schedule 4.12.1
Particulars Cost Market Provision Current Year Previous Year Particulars Cost Previous Current Current Year Previous Year Remarks
Price Rs. Price Rs. Amount Rs. Amount Rs. Rs. Price Rs. Market Value Market Value Profit/(Loss) Profit/(Loss) Rs.
1 Investment in Shares 115,432,752 13,701,478 6,811 115,432,752 113,450,549 Rs. (A) Rs. (B) Rs. (B-A)
1.1 Nepal Stock Exchange Ltd. 1 Government of Nepal Treasury Bills - - - - -
50 Ordinary shares of Rs 100 each fully paid up 5,000 - 5,000 5,000 5,000 2 Government of Nepal Savings Bond 1,050,000 - - - -
1.2 United Insurance Co. (Nepal) Ltd. 3 Government of Nepal Other Securities - - - - -
2160 Ordinary shares of Rs 100 each fully paid up 489,877 572,400 - 489,877 489,877 4 Nepal Rastra Bank Bonds - - - - -
(Bonus Share 360 kitta) 5 Foreign Securities - - - - -
1.3 Neco Insurance Co. Ltd. 6 Shares of Local Licensed Institutions - - - - -
40 Ordinary shares of Rs 100 each fully paid up 6,331 4,520 1,811 6,331 272,508 7 Bonds & Debentures of Local Licensed Institutions - - - - -
1.4 National Life Insurance Co. Ltd. 8 Shares, Bonds & Debentures of Organized Institutions - - - - -
256 Ordinary shares of Rs 100 each fully paid up - - - - 17,509 9 Placement in Foreign Banks - - - - -
(Bonus Share 236 Kitta) 10 Inter Bank Lending - - - - -
1.5 NLG Insurance Company Limited 11 Other Investment - - - - -
30 Ordinary shares of Rs 100 each fully paid up - - - - - Total Investment 1,050,000 - - - -
1.6 Everest Insurance Co. Ltd.
101 Ordinary shares of Rs 100 each fully paid up 13,855 26,058 - 13,855 13,855
(Bonus Share 71 Kitta)
Investments (Held to Maturity)

1.7 Sagarmatha Insurance Co. Ltd.
126 Ordinary shares of Rs 100 each fully paid up - - - - 7,300 Schedule 4.12.2
(Bonus Share 53 Kitta) As at Ashad 31, 2070 (July 15, 2013)
1.8 Nepal Life Insurance Co. Ltd.
420 Ordinary shares of Rs 100 each fully paid up 20,588 598,500 - 20,588 50,000 Particulars Cost Price Accumulated Current Year Current Year Previous Year Remarks
(Bonus Share 420 Kitta) Rs. (A) Loss as on Loss (C) Profit/(Loss) Profit/(Loss)
1.9 Nepal clearing House date (B) Rs. (A-B-C) Rs.
23026 Equity shares of Rs 100 each 2,302,600 - - 2,302,600 - 1 Government of Nepal Treasury Bills 543,388,310 - - 543,388,310 1,136,654,048
1.1 Credit Information Bureau Ltd. 2 Government of Nepal Savings Bond 996,944,951 - - 996,944,951 1,015,343,850
2333 Ordinary shares of Rs 100 each fully paid up 94,500 - - 94,500 94,500 3 Government of Nepal Other Securities - - - - -
(Bonus Share 1388 Kitta) 4 Nepal Rastra Bank Bonds - - - - -
1.10 Taragaon Regency Hotels Ltd. 5 Foreign Securities - - - - -
125,000 Ordinary shares of Rs 100 each fully paid up 12,500,000 12,500,000 - 12,500,000 12,500,000 6 Shares of Local Licensed Institutions - - - - -
1.11 NMB Capital Ltd. 7 Bonds & Debentures of Local Licensed Institutions - - - - -
1,000,000 Promotor shares of Rs 100 each fully paid up 100,000,000 - - 100,000,000 100,000,000 8 Shares, Bonds & Debentures of Organized Institutions - - - - 20,000,000
2 Investment in Debentures and Bonds - - - - 20,000,000 9 Placement in Foreign Banks 253,404,953 - - 253,404,953 150,914,244
2.1 Nepal Electricity Authority 10 Other Investment 335,300,000 - - 335,300,000 -
7.75 % 5 Years Power Bond of Rs 1,000 each Total Investment 2,129,038,214 - - 2,129,038,214 2,322,912,142
(Maturity Date -14th Chaitra, 2069) - - - - 20,000,000
2.2
2.3 .
Investments (Available for Sale)

Total Investment 115,432,752 13,701,478 6,811 115,432,752 133,450,549
3 Provision for Loss Schedule 4.12.3
3.1 Up to previous year 2,321,070 1,821,070 As at Ashad 31, 2070 (July 15, 2013)
3.2 Adjustments this year increased/(decreased) (2,314,259) 500,000
Total Provision 6,811 2,321,070 Particulars Cost Price Previous Current Current Year Previous Year Remarks
Net Investment 115,425,940 131,129,479 Rs. Market Value Market Value Adjustment Profit/(Loss)
Rs. (A) Rs. (B) Fund Rs. (B-A) Rs.
Note: 1) The following Companies have not declared and distributed dividend for the last three years: 1 Government of Nepal Treasury Bills - - - - -
a) NLG Insurance Company Limited 2 Government of Nepal Savings Bond - - - - -
b) Taragaon Regency Hotels Ltd.
3 Government of Nepal Other Securities - - - - -
4 Nepal Rastra Bank Bonds - - - - -
5 Foreign Securities - - - - -
6 Shares of Local Licensed Institutions 115,432,752 11,657,556 13,701,478 2,043,922 500,000
7 Bonds & Debentures of Local Licensed Institutions - - - - -
8 Shares, Bonds & Debentures of Organized Institutions - - - - -
9 Placement in Foreign Banks - - - - -
10 Other Investment - - - - -
Total Investment 115,432,752 11,657,556 13,701,478 2,043,922 500,000
66
Classification of Loans, Advances and Bills Purchased and Provisioning Schedule 4.13
As at Ashad 31, 2070 (July 15, 2013)
Particulars Advances Bills Purchased & Discounted Current Year Rs. Previous Year Rs.
Domestic Foreign Total Domestic Foreign Total
Deprived Other
Insured Uninsured
1 Performing Loan - 606,582,819 14,968,053,157 - 15,574,635,976 1,025,026,329 - 1,025,026,329 16,599,662,305 12,162,630,077
1.1 Pass Loan - 606,582,819 14,968,053,157 - 15,574,635,976 1,025,026,329 - 1,025,026,329 16,599,662,305 12,162,630,077
2 Non-Performing Loan - 8,941,446 296,123,518 - 305,064,964 - - - 305,064,964 305,848,560
2.1 Restructured - 1,479,107 750,461 - 2,229,568 - - - 2,229,568 6,020,975
NMB BANK ANNUAL REPORT - 2012/13
2.2 Substandard - 263,651 66,784,354 - 67,048,005 - - - 67,048,005 20,585,667

2.3 Doubtful - 2,365,838 13,637,020 - 16,002,858 - - - 16,002,858 24,725,607
2.4 Loss - 4,832,850 214,951,683 - 219,784,533 - - - 219,784,533 254,516,311
(A) Total Loan - 615,524,265 15,264,176,675 - 15,879,700,940 1,025,026,329 - 1,025,026,329 16,904,727,269 12,468,478,637
3 Loan Loss Provision
3.1 Pass* - 6,065,828 152,355,532 - 158,421,360 10,250,263 - 10,250,263 168,671,623 124,416,806
3.2 Restructured - 369,777 93,808 - 463,585 - - - 463,585 1,197,376
3.3 Substandard - 65,913 16,696,089 - 16,762,002 - - - 16,762,002 5,146,417
3.4 Doubtful - 1,182,919 6,818,510 - 8,001,429 - - - 8,001,429 12,362,803
3.5 Loss - 4,832,850 214,951,683 - 219,784,533 - - - 219,784,533 254,516,312
(B) Total Provisioning - 12,517,287 390,915,622 - 403,432,909 10,250,263 - 10,250,263 413,683,172 397,639,714
4 Provisioning up to Previous Year
4.1 Pass - 4,190,034 106,895,027 - 111,085,061 13,331,745 - 13,331,745 124,416,806 113,229,322
4.2 Restructured - 439,034 758,342 - 1,197,376 - - - 1,197,376 4,923,801
4.3 Substandard - 79,191 5,067,226 - 5,146,417 - - - 5,146,417 2,233,917
4.4 Doubtful - 894,441 11,468,362 - 12,362,803 - - - 12,362,803 1,737,423
4.5 Loss - - 254,516,312 - 254,516,312 - - - 254,516,312 12,393,517
(C) Total Previous Year's provision - 5,602,700 378,705,269 - 384,307,969 13,331,745 - 13,331,745 397,639,714 134,517,980
(D) Written Back from Last year provision 56,977,994 - 56,977,994 - - - 56,977,994 14,580,755
(E) Additional Provision This Year 6,914,587 69,188,347 - 76,102,934 (3,081,482) - (3,081,482) 73,021,452 277,702,489
Changes in this year 6,914,587 12,210,353 - 19,124,940 (3,081,482) - (3,081,482) 16,043,458 263,121,734
Net Loan (A-B) - 603,006,978 14,873,261,053 - 15,476,268,031 1,014,776,066 - 1,014,776,066 16,491,044,097 12,070,838,923
* Additional loan loss provision of Rs 2,675,000 has been provided for an account which has been categorized as pass loan.
4 Land
Total
1 At Cost
(A) Secured
Particulars
Particulars
(B) Unsecured
2 Depreciation
Total (3+4+5+6)
b. For This Year
a) Own FDR
d. This year sold
Total Depreciation
b. Addition this year
10 Other Securities
* Straight Line Method

a. Up to Previous Year
e. This year written off
5 Export Documents
8 Counter Guarantee
7 Government Bonds
9 Personal Guarantee
Total Cost (a+b+c+d+e)
3 Book Value (SLM*) (1-2)

a. Previous Year Balance
6 Fixed Deposit Receipts
3 Government Guarantee
Fixed Assets
1 Movable/Immovable Assets
As at Ashad 31, 2070 (July 15, 2013)

As at Ashad 31, 2070 (July 15, 2013)
c. Revaluation/written back this year
6 Leasehold assets (net of amortization)

d. Depreciation adjustment/written back
b) FDR of other Licensed Institutions
4 Internationally Rated Bank Guarantee
c. Depreciation on revaluation/written back

2 Guarantee of Local Licensed Institutions
644,267
221,893,271
38,156,541
5 Capital Construction (pending capitalization) 40,393,731
65,326,505
78,016,494
10,380,412
88,396,906
-
-
2,196,314
8,184,098
-
-
87,752,639
Building
34,867,791
34,867,791
38,793,441
73,661,232
(3,579,058)
-
12,646,265
29,726,234
-
(7,580,000)
10,303,214
70,938,018
Vehicles
-
-
-
-
-
-
-
-
-
-
-
Assets
Machinery
43,157,815
43,157,815
64,652,572
107,810,387
(804,897)
(1,065,810)
-
15,511,354
49,946,115
14,226,968
94,649,229
Equipment
Office
16,904,727,269
16,904,727,269
-
-
-
-
-
-
71,405,569
71,405,569
-
-
52,811,088
97,285,835
16,683,224,777
Current Year Rs.
(34,147)
-
(52,324)
12,537,641
11,325,066
74,333,579
Others
40,393,731
(4,418,102)
-
-
-
Current
Year Rs.
Loan, Advances and Bills Purchased Security Wise
44,706,056 344,624,933 279,479,436

38,156,541 43,032,684
65,326,505 25,026,505
44,706,056 200,748,156 211,420,247
40,900,265 154,726,690 116,253,218
85,606,321 355,474,846 327,673,465
-
(773,626)
-
-
(8,698,134) (1,150,648)
-
42,891,574 38,901,340
28,396,771 116,253,218 78,125,504
36,499,515 43,532,303
327,673,465 285,291,810
12,468,478,637
12,468,478,637
Schedule 4.13 (A)
Schedule 4.14
Year Rs.
Previous
-
-
-
-
-
-
77,521,577
77,521,577
-
-
52,811,088
181,544,955
12,156,601,017
Previous Year Rs.
67
Non-Banking Assets Schedule 4.15 Contingent Liabilities Schedule 4.17

Name and Address Date of assuming Total Amount of Loss Provision Current Year Previous Particulars Current Year Rs. Previous Year Rs.
of Borrower or Party Non-Banking Assets Non-Banking Assets In Percantage In Amount Net Non Banking Year Rs. 1 Claims on institution but not accepted by the Institution - -
Assets Rs.
2 Letters of credit (full amount) 2,870,978,325 1,259,178,886
Sangam Institute Pvt. Ltd. 11 January 2013 36,311,000 100% 36,311,000 - - a) Less than 6 months maturity 2,282,990,993 774,854,913
Vendtech Medical Nepal International 11 January 2013 21,500,000 100% 21,500,000 b) More than 6 months maturity 587,987,332 484,323,973
3 Rediscounted Bills - -
4 Unmatured Guarantees/Bonds 278,695,897 173,919,725
a) Bid Bonds 23,364,970 12,667,200
b) Performance Bonds 255,330,927 161,252,525
c) Other Guarantee/Bonds - -
5 Unpaid Shares in Investment - -
6 Forward Exchange Contract Liabilities - -
7 Bills under Collection 24,167,691 -
Grand Total 57,811,000 57,811,000 - - 8 Acceptance and Endorsements 140,557,620 84,039,844
9 Underwriting Commitments - -
10 Irrevocable Loan Commitments 1,989,032,802 1,047,878,821
11 Counter Guarantee of Internationally Rated Banks 1,033,895,546 424,777,103
12 Advance Payment Guarantee 80,438,602 41,651,819
Other Assets Schedule 4.16
13 Financial Guarantee
14 Contingent Liabilities on Income Tax
450,000
28,254,873
-
18,046,333
As at Ashad 31, 2070 (July 15, 2013)
15 . - -
Particulars Current Year Rs. Previous Year Rs. 16 . - -
1 Stock of Stationery 7,959,100 5,084,119 17 . - -
2 Income Receivable on Investments 14,900,756 7,757,840
3 Accrued Interest on Loan 94,437,449 91,025,183
Less : Interest Suspense Amount
4 Commission Receivable
(94,437,449)
308,183
(91,025,183)
-
Interest Income Schedule 4.18
5 Sundry Debtors 74,727,716 13,868,151 For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013)
6 Staff Loan and Advances 64,767,168 33,811,478
7 Prepayments 70,761,815 7,160,809
A. On Loan, Advances and Overdraft 1,732,182,598 1,586,428,908
8 Cash in Transit - -
1 Loan and Advances 1,311,981,306 1,183,235,159
9 Other Transit items (including cheques) - -
2 Overdraft 420,201,292 403,193,749
10 Drafts Paid without Notice - -
B On Investment 98,659,818 114,184,683
11 Expenses Not Written off - -
1 Government of Nepal Securities 88,249,694 109,579,481
12 Branch Account - -
a. Treasury Bills 18,147,781 39,175,851
13 Deferred Tax Assets 25,355,930
b. Development Bonds 69,917,576 69,835,908
14 Others 13,633,668 48,492,405
c. National Savings Certificates 184,337 567,722
a) Advance Income Tax (Net of Provisions) 1,068,226 33,030,502
2 Foreign Securities - -
b) Others 12,565,442 15,461,903
a. .. - -
Total 272,414,336 116,174,802
b. . - -
3 Nepal Rastra Bank Bonds - -
4 Debenture and Bonds 1,091,429 1,550,000
5 Interest on Inter-bank Investment 9,318,695 3,055,202
Other Assets (Additional Statement) Schedule 4.16 (A)

a. Bank/Financial Institutions
b. Other Organizations
9,318,695
-
3,055,202
-
As at Ashad 31, 2070 (July 15, 2013) C On Agency Balances - -
1 Local Banks - -
Particulars Current Year Rs. Previous Year Rs. 2 Foreign Banks - -
Up to 1 Year 1 to 3 Years Above 3 Years Total D On Money at Call and Short Notice 278,276 157,031
1 Accrued Interest on Loan 63,604,998 30,042,706 789,745 94,437,449 91,025,183 1 Local Banks/Financial Institutions - -
2 Drafts Paid without Notice 2 Foreign Banks 278,276 157,031
3 Branch Account E On Others - 5,062,467
4 Local and Foreign Agency A/C's 1 Certificate of Deposits - -
2 Inter-Bank Loan - -
3 Others - 5,062,467
Total 1,831,120,692 1,705,833,089
Interest Expenses Schedule 4.19 Other Operating Income Schedule 4.21

For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013) For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013)
A. On Deposit Liabilities 1,074,080,030 1,252,800,049 1 Safe Deposit Lockers Rental 558,500 380,000
1 Fixed Deposits 573,872,783 794,836,215 2 Issue and Renewals of Credit Cards - -
1.1 Local Currency 549,035,995 760,660,350 3 Issue and Renewals of ATM Cards 2,545,191 4,605,243
1.2 Foreign Currency 24,836,788 34,175,865 4 Telex/T.T. 2,027,270 1,496,064
2 Saving Deposits 183,799,418 183,301,698 5 Service Charges 47,643,503 34,838,061
2.1 Local Currency 183,551,402 183,106,843 6 Renewal Fees - 205,350
2.2 Foreign Currency 248,016 194,855 7 Others 3,580,046 12,174,971
3 Call Deposits 316,407,829 274,662,136 a) Income on subscription share money - 5,986,137
3.1 Local Currency 312,388,790 268,714,204 b) Others 3,580,046 6,188,834
3.2 Foreign Currency 4,019,039 5,947,932 Total 56,354,510 53,699,689
4 Certificate of Deposits - -
B On Borrowings 3,722,941 3,457,287
1 Debentures and Bonds - -
2 Loan from Nepal Rastra Bank - -
3 Inter Bank/Financial Institutions Borrowing
4 Other Corporate Body
3,722,941
-
3,457,287
-
Exchange Gain/Loss Schedule 4.22
5 Other Loans - - For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013)
C On Others - - Particulars Current Year Rs. Previous Year Rs.
1 . - - (A) Revaluation Gain 16,134,803 17,430,898
2 . - - (B) Trading Gain (except Exchange Fee) 48,404,409 32,341,888
Total 1,077,802,971 1,256,257,336 Total Income (Loss) 64,539,212 49,772,786
Commission and Discount Income Schedule 4.20 Staff Expenses Schedule 4.23
A Bills Purchase and Discount 727,894 1,504,936 1 Salary 57,428,760 45,204,262
1 Local - - 2 Allowances 39,567,218 29,946,276
2 Foreign 727,894 1,504,936 3 Contribution to Provident Fund 5,324,312 4,127,023
B Commission 29,078,020 17,411,853 4 Training Expenses 2,041,987 1,651,492
1 Letters of Credit 8,864,386 7,051,001 5 Uniform - -
2 Guarantee 10,546,923 4,835,051 6 Medical - -
3 Collection Fee 345,474 265,860 7 Insurance - -
4 Remittance Fee 2,907,219 1,709,084 8 Pension and Gratuity Provision 7,027,161 3,927,675
5 Credit Cards - - 9 Others 15,965,217 7,586,763
6 Share Underwriting/Issues - - a) Leave Fare 4,502,243 3,580,353
7 Government Transactions - - b) Staff Welfare 2,326,785 1,240,111
8 Agency Commission 6,395,289 3,541,831 c) Accumulated Sick Leave 4,573,844 2,766,299
9 Exchange Fee 18,729 9,026 d) Performance Incentive 4,562,345 -
C Others 22,921,397 19,588,757 Total 127,354,655 92,443,491
1 Income from trading in Gold and Silver 10,934,880 14,922,925
2 Others 11,986,517 4,665,832
Total 52,727,311 38,505,546
Other Operating Expenses Schedule 4.24 Non-Operating Income/(Loss) Schedule 4.26

1 House Rent 22,058,089 17,901,457 1 Profit (Loss) on Sale of Investment 873,797 -
2 Electricity and Water 8,608,729 6,470,831 2 Profit (Loss) on Sale of Assets 425,190 (266,322)
3 Repair and Maintenance 3,417,286 3,910,013 3 Dividend 4,053,029 6,686,936
(a) Building 119,461 2,412,304 4 Subsidies Received from Nepal Ratra Bank - -
(b) Vehicles 1,363,823 964,638 a. Reimbursement of losses of specified branches - -
(c) Others 1,934,002 533,071 b. Interest Subsidy - -
4 Insurance 3,722,798 3,523,408 c. Exchange Counter - -
5 Postage, Telex, Telephone, Fax 14,234,925 12,004,173 5 Others 1,882,650 1,882,650
6 Office Equipment, Furniture and Repair 1,932,394 1,801,631 (a) Rent Income 1,882,650 1,882,650
7 Travelling Allowances and Expenses 1,624,386 1,979,923 Total Non-Operating Income (Loss) 7,234,665 8,303,264
8 Stationery and Printing 6,451,326 5,952,845
9 Periodicals and Books 197,838 121,400
10 Advertisements 13,102,329 13,478,936
11 Legal Expenses
12 Donations
2,252,025
70,530
1,623,795
126,136
Loss Provision Written Back Schedule 4.27
13 Expenses Relating to Board of Directors 1,396,547 1,215,192 For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013)
(a) Meeting Fees 1,016,000 1,087,000 Particulars Current Year Rs. Previous Year Rs.
(b) Other Expenses 380,547 128,192 1 Loan Loss Provision Written Back 56,977,994 14,580,755
14 Annual General Meeting Expenses 891,878 693,725 2 Provision against Non-Banking Assets Written Back - -
15 Expenses Relating to Audit 845,464 348,160 3 Investment Provision Written Back 2,314,259 -
(a) Audit Fees 190,688 190,688 4 Provision against Other Assets Written back 97,186 568,887
(b) Other Expenses 654,776 157,472 Total 59,389,439 15,149,642
16 Commission on Remittances - -
17 Depreciation on Fixed Assets 49,379,789 44,927,870
18 Amortization of Preliminary Expenses - -
19 Share Issue Expenses
20 Technical Services Fee
-
-
719,374
- Profit/(Loss) from Extra-ordinary Activities Schedule 4.28
21 Entertainment 2,243,229 1,640,477 For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013)
22 Written Off Expenses - -
23 Security Expenses 13,355,617 13,270,000 Particulars Current Year Rs. Previous Year Rs.
24 Credit Guarantee Premium - - 1 Recovery of write off Loan - 2,125,709
25 Commission and Discount - - 2 Voluntary Retirement Scheme Expenses - -
26 Others 43,671,986 27,920,254 3 Loan Write-Offs (4.28) (a) (321,892) -
(a) Office Expenses 6,355,053 5,634,047 4 Other Expenses/Income - -
(b) Vehicle fuel 7,393,871 6,592,718 5 Other Assets Write Off (97,186) -
(c) Membership Fee 8,162,797 6,486,651 Total (419,078) 2,125,709
(d) Merchant Banking Expenses - -
(e) Others 21,760,265 9,206,838
Total 189,457,165 159,629,600
Statement of Loans Written-Off Schedule 4.28 (A)
S.N. Types of Loan Written Off Type of Security Basis of Valuation Loan Approved Initiation made Remarks
Provision for Possible Losses Schedule 4.25

1 Working Capital Loan
Amount
321,892
& Amount of Collateral
Hypothecation of stocks N/A
by Name/Designation
Asish Acharya
for recovery
Letter issued.
For the period from 1 Shrawan 2069 to 31 Ashad 2070 (July 16, 2012 to July 15, 2013) Head -Credit Department Notice Published.
Filed case in DRT.
Filed case in District Court.
1 Increase in Loan Loss Provision 73,021,452 277,702,490
2 Working Capital Loan
2 Increase in Provision for Loss on Investment - 500,000
3 Term Loan
3 Provision Against Non-Banking Assets 57,811,000 -
4 Overdraft Loan
4 Provision Against Other Assets - 97,186
5 Project Loan
Total 130,832,452 278,299,676
6 Fixed Capital Loan
7 Personal Loan
8 Other Loan
Total Loan 321,892
Statement of Loans and Advances Schedule 4.29 Capital Adequacy Table Schedule 4.30 (A1)
Extended to Directors/Chief Executive/ Ashad 2070

(Amount in thousands)
Promoter/Employees and Shareholders

1.1 RISK WEIGHTED EXPOSURES 2070 Ashad End Previous FY
a Risk Weighted Exposure for Credit Risk 19,591,053 14,288,537
As at Ashad 31, 2070 (July 15, 2013) b Risk Weighted Exposure for Operational Risk 840,780 638,978
c Risk Weighted Exposure for Market Risk 235,810 188,150
Total Risk Weighted Exposures (a+b+c) 20,667,643 15,115,665
The Statement of amount, included under total amount of Bills Purchased and Discounted, Loans, Advances and Overdraft, provided to the Adjustments under Pillar II -
Directors, Chief Executive, Promoters, Employees, Shareholders and to the individual members of their undivided family or against the guarantee
Add : .. of the total RWE due to non compliance to Disclosure Requirement (6.4 a 10) -
of such persons or to the organizations or companies in which such individuals are managing agent, are as follows:
Add : RWE equvalent to reciprocal of capital charge of 2 % of gross income. 126,672 -
Name of Promoter/ Last Year's Balance Current Year Recovery This Year Additions Balance as of Ashad End Add : 2% of the the total RWE due to Supervisory add up 413,353 302,313
Director/Chief Executive Principal Interest Principal Interest Principal Interest Total Risk Weighted Exposures (After Bank's adjustments of Pillar II) 21,207,668 15,417,978
(A) Directors
1 1.2 CAPITAL Current Period Rs. Previous Period Rs.
2 Core Capital (Tier 1) 2,209,013 2,150,645
(B) Chief Executive a Paid up Equity Share Capital 2,000,000 2,000,000
1 b Irredeemable Non-cumulative preference shares - -
2 c Share Premium 10,078 10,078
(C) Promoters d Proposed Bonus Equity Shares - -
1 e Statutory General Reserves 268,583 196,505
2 f Retained Earnings 4,996 44,063
(D) Employees g Un-audited current year cumulative profit/(Loss) - -
1 h Capital Redemption Reserve - -
2 i Capital Adjustment Reserve - -
(E) Shareholders j Dividend Equalization Reserves - -
1 k Deferred Tax Reserve 25,356 -
2 l Other Free Reserve - -
Total Nil Nil Nil Nil Nil Nil Nil m Less: Goodwill - -
n Less: Fictitious Assets - -
o Less: Investment in equity in licensed Financial Institutions - -
p Less: Investment in equity of institutions with financial interests (100,000) (100,000)
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 - -
u 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 2) 280,370 137,458
a Cumulative and/or Redeemable Preference Share - -
b Subordinated Term Debt - -
c Hybrid Capital Instruments - -
d General loan loss provision 165,303 124,417
e Exchange Equalization Reserve 14,806 10,772
f Investment Adjustment Reserve 100,261 2,269
g Assets Revaluation Reserve - -
h Other Reserves - -
Total Capital Fund (Tier I and Tier II) 2,489,383 2,288,103
1.3 CAPITAL ADEQUACY RATIOS Current Period Previous Period

Tier 1 Capital to Total Risk Weighted Exposures 10.42 13.95
Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures 11.74 14.84
76
Credit Risk Exposures Schedule 4.30 (B)
Ashad 2070
Assets 2070 Ashad End Previous Fiscal Year
Book Value Specific Eligible Net Value Risk Risk Weighted Net Value Risk Weighted
Provision CRM Weight Exposures Exposures
Balance Sheet Exposures (a) (b) (c) (d=a-b-c) (e) (f=d*e )
Cash Balance 516,770 - - 516,770 0% - 323,939 -
Balance With Nepal Rastra Bank 4,804,589 - - 4,804,589 0% - 2,992,466 -
Gold - - - - 0% - - -
Investment in Nepalese Government Securities 1,541,383 - - 1,541,383 0% - 2,158,398 -
All Claims on Government of Nepal 53,879 - - 53,879 0% - 85,842 -

Investment in Nepal Rastra Bank securities - - - - 0% - - -
All claims on Nepal Rastra Bank - - - - 0% - - -
Claims on Foreign Government and Central Bank (ECA 0-1) - - - - 0% - - -
Claims on Foreign Government and Central Bank (ECA -2) - - - - 20% - - -
Claims on Foreign Government and Central Bank (ECA-4-6) - - - - 100% - - -
Claims On BIS, IMF, ECB, EC and on Multilateral Development
Banks (MDB's) recognized by the framework - - - - 0% - - -
Claims on Other Multilateral Development Banks - - - - 100% - - -
Claims on Public Sector Entity (ECA 0-1) - - - - 20% - - -
Claims on Public Sector Entity (ECA 2) - - - - 50% - - -
Claims on Public Sector Entity (ECA 3-6) - - - - 100% - - -
Claims on Public Sector Entity (ECA 7) - - - - 150% - 20,000 30,000
Claims on domestic banks that meet
capital adequecy requirements 184,587 - - 184,587 20% 36,917 18,845 3,769
Claims on domestic banks that do not meet
capital adequacy requirements 278,851 - - 278,851 100% 278,851 81,804 81,804
Claims on foreign bank (ECA Rating 0-1) 535,677 - - 535,677 20% 107,135 294,954 58,991
Claims on foreign bank (ECA Rating 2) - - - - 50% - - -
Claims on foreign bank (ECA Rating 3-6) 40,617 - - 40,617 100% 40,617 26,802 26,802
Claims on foreign bank (ECA Rating 7) - - - - 150% - - -
Claims on foreign bank incorporated in SAARC region
operating with a buffer of 1% above
regulatory capital requirement - - - - 20% - - -
Claims on Domestic Corporates 12,193,004 - - 12,193,004 100% 12,193,004 7,781,891 7,781,891
Claims on Foreign Corporates (ECA 0-1) - - - - 20% - - -
Claims on Foreign Corporates (ECA 2) - - - - 50% - - -
Claims on Foreign Corporates (ECA 3-6) - - - - 100% - - -
Claims on Foreign Corporates (ECA 7) - - - - 150% - - -
cont
cont (Amount in thousands)

Book Value Specific Eligible Net Value Risk Risk Weighted Net Value Risk Weighted
Balance Sheet Exposures (a) (b) (c) (d=a-b-c) (e) (f=d*e ) cont
Regulatory Retail Portfolio (Not Overdue) 634,215 - - 634,215 75% 475,661 736,228 552,171
Claims fulfilling all criterion of regulatory
retail except granularity 126,280 - - 126,280 100% 126,280 88,177 88,177
Claims secured by residential properties 1,304,053 - - 1,304,053 60% 782,432 649,315 389,589
Claims not fully secured by residential properties - - - - 150% - - -
Claims secured by residential properties (Overdue) 5,073 51 - 5,023 100% 5,023 8,219 8,219
Claims secured by Commercial real estate 553,402 - - 553,402 100% 553,402 648,874 648,874
Past due claims (except for claim secured
by residential properties) 369,341 248,329 - 121,012 150% 181,518 146,123 219,184
High Risk claims 1,666,549 - 71,406 1,595,143 150% 2,392,715 2,004,912 3,007,368
Investments in equity and other capital istruments
of institutions listed in the stock exchange 13,031 20 - 13,011 100% 13,011 11,030 11,030
Investments in equity and other capital instruments
of institutions not listed in the stock exchange 2,402 - - 2,402 150% 3,603 100 149
Staff loan secured by residential property 37,913 - - 37,913 60% 22,748 26,999 16,200
Interest Receivable/claim on government securities 11,684 - - 11,684 0% - 6,741 -
Cash in transit and other cash items in the process of collection 7,911 - - 7,911 20% 1,582 - -
Other Assets (as per attachment) 541,553 - - 541,553 100% 541,553 328,786 328,786
TOTAL 25,422,765 248,400 71,406 25,102,960 17,756,052 18,440,446 13,253,005
Off Balance Sheet Exposures (a) (b) (c) (d=a-b-c) (e) (f=d*e )
Revocable Commitments - - - - 0% - - -
Bills Under Collection 24,168 - - 24,168 0% - - -
Forward Exchange Contract Liabilities - - - - 10% - - -
LC Commitments With Original Maturity
Upto 6 months domestic counterparty 2,282,991 - 1,014,391 1,268,600 20% 253,720 736,568 147,314
foreign counterparty (ECA Rating 0-1) - - - - 20% - - -
foreign counterparty (ECA Rating 2) - - - - 50% - - -

LC Commitments With Original Maturity
Over 6 months domestic counterparty 587,987 - 21,352 566,635 50% 283,318 463,495 231,748
77
cont 78
Book Value Specific Eligible Net Value Risk Risk Weighted cont
Net Value Risk Weighted
Off Balance Sheet Exposures (a) (b) (c) (d=a-b-c) (e) (f=d*e )
Bid Bond, Performance Bond and Counter
guarantee domestic counterparty 278,696 - 21,820 256,876 50% 128,438 160,691 80,345
Foreign counterparty (ECA Rating 0-1) 225,039 - - 225,039 20% 45,008 61,406 12,281
Foreign counterparty (ECA Rating 2) 808,857 - - 808,857 50% 404,428 363,370 181,685
Foreign counterparty (ECA Rating 3-6) - - - - 100% - - -
Foreign counterparty (ECA Rating 7) - - - - 150% - - -
Underwriting commitments - - - - 50% - - -
Lending of Bank's Securities or Posting of Securities as collateral - - - - 100% - - -
Repurchase Agreements, Assets sale with recourse - - - - 100% - - -
Advance Payment Guarantee 80,439 - 5,851 74,588 100% 74,588 40,284 40,284
Financial Guarantee 450 - 130 320 100% 320 - -
Acceptances and Endorsements 140,558 - 4,302 136,256 100% 136,256 79,453 79,453
Unpaid portion of Partly paid shares and Securities - - - - 100% - - -
Irrevocable Credit commitments (short term) 1,712,820 - - 1,712,820 20% 342,564 931,882 186,376
Irrevocable Credit commitments (long term) 276,213 - - 276,213 50% 138,106 115,997 57,998
operating with a buffer of 1% above their respective
regulatory capital requirement - - - - 20% - - -
Other Contingent Liabilities 28,255 - - 28,255 100% 28,255 18,046 18,046
Unpaid Guarantee Claims - - - - 200% - - -
TOTAL 6,446,471 - 1,067,846 5,378,625 1,835,001 2,971,193 1,035,531

Total RWE for credit Risk 31,869,236 248,400 1,139,252 30,481,585 19,591,053 21,411,639 14,288,537
Adjustments under Pillar II
Add : 10% of the loan and facilities in excess of Single Obligor Limits 6.4 a 3)
Add : 1% of the contract (sale) value in case of the sale of credit with recourse (6.4 a 4)
Total RWE for Credit Risk ( After Bank's adjustments of Pillar II)
Eligible Credit Risk Mitigants (CRM) Schedule 4.30 (C)

Ashad 2070
Credit exposures Deposits Deposits Gold Govt.& NRB G'tee of Sec/G'tee G'tee of G'tee of Sec/G'tee
with Bank with other Securities Govt. of of Other domestic MDBs of Foreign
banks/FI Nepal Sovereigns banks Banks
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Balance Sheet Exposures
Cash Balance
Balance With Nepal Rastra Bank
Gold
Investment in Nepalese Government Securities
All Claims on Government of Nepal
Investment in Nepal Rastra Bank securities
All claims on Nepal Rastra Bank
Claims on Foreign government and Central Bank (ECA -1)
Claims on Foreign government and Central Bank (ECA -2) - - - - - - - - -
Claims on Foreign government and Central Bank (ECA-4-6) - - - - - - - - -
Claims on BIS, IMF, ECB, EC And Multilateral Development Banks - - - - - - - - -
Claims on Other Multilateral Development Banks - - - - - - - - -
Claims on Public Sector Entity (ECA 0-1) - - - - - - - - -
Claims on Public Sector Entity (ECA 2) - - - - - - - - -
Claims on Public Sector Entity (ECA 3-6) - - - - - - - - -
Claims on Public Sector Entity (ECA 7) - - - - - - - - -
Claims on domestic banks that meet capital adequacy requirements - - - - - - - - -
Claims on domestic banks that do not meet capital adequacy requirements - - - - - - - - -
Claims on foreign bank (ECA Rating 0-1) - - - - - - - - -
Claims on foreign bank (ECA Rating 2) - - - - - - - - -
Claims on foreign bank (ECA Rating 3-6) - - - - - - - - -
Claims on foreign bank (ECA Rating 7) - - - - - - - - -
Claims on foreign bank incorporated in SAARC region operating with
a buffer of 1% above their respective regulatory capital requirement - - - - - - - - -
Claims on Domestic Corporates - - - - - - - - -
Claims on Foreign Corporates (ECA 0-1) - - - - - - - - -
Claims on Foreign Corporates (ECA 2) - - - - - - - - -
Claims on Foreign Corporates (ECA 3-6) - - - - - - - - -
Claims on Foreign Corporates (ECA 7) - - - - - - - - -
Regulatory Retail Portfolio (Not Overdue) - - - - - - - - -
Claims fulfilling all criterion of regulatory retail except granularity - - - - - - - - -
Claims secured by residential properties - - - - - - - - -

Claims not fully secured by residential properties - - - - - - - - -
Claims secured by residential properties (Overdue) - - - - - - - - -
79
Claims secured by Commercial real estate - - - - - - - - -

cont
Operation Risk Exposures

-
of Foreign
Banks
Sec/G'tee
-
-
-
-
-
-
cont
Schedule 4.30 (D)

Ashad 2070
Particulars Years before 2070 Ashad End 2070 Ashad End
FY 2066/67 FY 2067/68 FY 2068/69
G'tee of
MDBs
-
-
-
-
-
-
Net Interest Income 306,638 438,934 449,576 753,318
Commission and Discount Income 49,953 27,983 38,506 52,727
Other Operating Income 66,524 59,472 53,700 56,355
Exchange Fluctuation Income 23,006 47,191 49,773 64,539
G'tee of
banks
domestic
-
-
-
-
-
-
Addition/Deduction in Interest Suspense during the period 9,929 18,573 41,805 3,412
Gross income (a) 456,050 592,153 633,360 930,351
Alfa (b) 15% 15% 15% 15%
Fixed Percentage of Gross Income [c=(a×b)] 68,408 88,823 95,004 139,553
of Other
Sec/G'tee
Sovereigns
-
-
-
-
-
-
Capital Requirement for operational risk (d) (average of c) 84,078
Risk Weight (reciprocal of capital requirement of 10%) in times (e) 10
Equivalent Risk Weight Exposure [f=(d×e)] 840,780
Adjustments under Pillar II
If Gross Income for all the last three years is negative (6.4 a 8)
-
-
-
-
-
-
G'tee of
Govt. of
Nepal
Total Credit and Investments (net of specific Provision)

Capital Requirement for Operational Risk (5%)
Risk Weight (reciprocal of capital requirement of 10% ) in times 10
Equivalent Risk Weight Exposure (g)
Govt.& NRB
Securities
-
-
-
-
-
-
Equivalent Risk Weight Exposure (h=f+g)
Market Risk Exposures

Gold
-
-
-
-
-
-
Schedule 4.30 (E)
Ashad 2070
Deposits
with Bank with other
banks/FI
-
-
-
-
-
-
S.N. Currency 2070 Ashad End 2069 Ashad End
Open Position Open Position Relevant Open Relevant
(FCY) (NPR) Position (NPR) Open Position
1 INR (285,529) (457,060) 457,060 361,964
Deposits
-
71,406
-
-
1,014,391
21,352
21,820
-
-
5,851
130
4,302
1,067,846
1,139,252
2 USD 55 5,235 5,235 2,370
3 GBP (2) (222) 222 501
4 CHF (5) (521) 521 1,233
5 EUR (3) (377) 377 7
6 JPY 196 187 187 1,199
Past due claims (except for claim secured by residential properties)
7 SEK (25) (364) 364 3

Lending of Bank's Securities or Posting of Securities as collateral
8 DKK - (3) 3 223

9 HDK (4) (46) 46 2,209
10 AUD (23) (1,971) 1,971 44
Investments in equity and other capital instruments of
Investments in equity and other capital instruments of
11 SGD (5) (349) 349 5

operating with a buffer of 1% above their respective
Repurchase Agreements, Assets sale with recourse
Unpaid portion of Partly paid shares and Securities
12 KRW - - - 545
13 AED (24) (633) 633 1,476
LC Commitments With Original Maturity Upto
LC Commitments With Original Maturity Over
Irrevocable Credit commitments(Short Term)
14 MYR (46) (1,366) 1,366 368

Irrevocable Credit commitments(Long Term)
institutions not listed in the stock exchange
Counter guarantee domestic counterparty
15 THB (33) (100) 100 791

institutions listed in the stock exchange
16 QAR (13) (336) 336 337

Forward Exchange Contract Liabilities
foreign counterparty (ECA Rating 0-1)

foreign counterparty (ECA Rating 2)
17 CNY (10) (153) 153 42

Bid Bond, Performance Bond and
Other Assets (as per attachment)
6 months domestic counterparty
6 months domestic counterparty
Acceptances and Endorsements
18 CAD (7) (668) 668 77

regulatory capital requirement
Off Balance Sheet Exposures
Advance Payment Guarantee
19 SAR (79) (2,024) 2,024 2,906

Underwriting commitments
Total Credit Risk Exposure

Other Contingent Liabilities
Total Open Position (a) 471,615 376,299

Fixed Percentage (b) 5% 5%
Financial Guarantee
Capital Charge for Market Risk [c=(a×b)] 23,581 18,815

Credit exposures
High Risk claims
Risk Weight (reciprocal of capital

requirement of 10%) in times (d) 10 10
Equivalent Risk Weight Exposure [e=(c×d)] 235,810 188,150
Total
Principal Indicators Schedule 4.31 Schedule 4.32: Significant Accounting Policies

For Last Five Years Financial Year 16 July 2012 to 15 July 2013 (1 Shrawan 2069 to 31 Ashad 2070)
Particulars Indicators FY 2065/66 FY 2066/67 FY 2067/68 FY 2068/69 FY 2069/70

1 Percent of Net Profit/Gross Income Percent 12.31 15.80 13.37 2.79 17.40 1. General Information of Foreign Exchange is accounted for as trading gains and shown as
"Trading Gains" under "Exchange Gain" in Schedule 4.22
2 Earning Per Share Rs. 4.42 10.65 11.08 2.61 18.02 NMB Bank Limited (the "Bank") is a limited liability company domiciled
3 Market Value Per Share Rs. 499.00 295.00 195.00 180.00 252.00 in Nepal. The registered office of the Bank is G.P.O. Box 11543, Babar
Mahal, Kathmandu, Nepal. The Bank has a primary listing in the Nepal 2.7 Interest Expense
4 Price Earning Ratio Ratio 112.93 27.71 17.61 68.93 13.98
Stock Exchange Limited. Interest on deposit liabilities and borrowing from other banks are
5 Dividend (including bonus) on Share Capital Percent - 20.53 9.00 - -
The Bank carries out commercial banking activities in Nepal under accounted for on accrual basis.
6 Cash Dividend on Share Capital Percent - 10.00 9.00 - 10.00
license from Nepal Rastra Bank as Class A licensed financial institution.
7 Interest Income/Loan & Advances Percent 5.63 9.15 11.50 12.72 10.25 2.8 Loans and Advances, Overdrafts and Bills Purchased
8 Staff Expenses/Total Operating Expenses Percent 38.97 42.03 44.45 38.59 48.29 Loans and advances, overdrafts and bills purchased include direct finance
9 Interest Expenses on Total Deposit and Borrowing Percent 3.54 5.33 7.88 7.86 4.86 provided to the customers such as bank overdrafts, term loans, working
10 Exchange Gain/Total Assets Percent 0.06 0.17 0.30 0.27 0.26 2. Summary of Significant Accounting Policies capital loan, consumers loans given to deprived sector, etc. All loans are
11 Staff Bonus/Total Staff Expenses Percent 22.05 40.38 44.36 8.53 38.94 The principal accounting policies applied in the preparation of the subject to regular review. They are graded according to the level of credit
12 Net Profit/Loan and Advances Percent 1.19 2.02 1.95 0.42 2.13 financial statements of the Bank are set out below. Unless otherwise risk and classified as per Nepal Rastra Banks Directives. Loans and advances,
stated, these policies have been consistently applied to all the years overdrafts and bills purchased are shown net of provision for possible
13 Net Profit/Total Assets Ratio 0.40 1.21 1.39 0.28 1.43 losses.
presented herein.
14 Total Credit/Deposit Percent 76.78 78.44 88.16 78.01 76.20
15 Total Operating Expenses/Total Assets Percent 0.80 1.41 1.54 1.41 1.46 2.9 Staff Loans
2.1 Statement of Compliance
16 Adequacy of Capital Fund on Risk Weighted Assets Loans and advances granted to staff in accordance with the staff loan
The financial statements have been prepared in accordance with the
a) Core Capital Percent 19.75 17.61 15.31 13.95 10.42 scheme and interest accrued thereon are reflected under Other Assets
Nepal Accounting Standards (NAS) issued by the Nepal Accounting
b) Supplementary Captial Percent 0.66 0.83 0.90 0.91 1.32 Standards Board (NASB) except otherwise stated, the provisions of as per the Directives of Nepal Rastra Bank.
c) Total Capital Fund Percent 20.41 18.44 16.39 14.84 11.74 Bank and Financial Institution Act, 2063 (BAFIA), the requirements of
17 Liquidity (CRR) Ratio 10.12 6.02 6.85 18.91 23.35 NRB Directives and in compliance with the Companies Act 2063. 2.10 Interest Receivables
18 Non-performing credit/Total credit Percent 0.51 0.70 0.27 2.45 1.80 Interest receivable constitutes of interest accrued on loans and
19 Weighted Average Interest Rate Spread Percent 3.58 3.19 3.18 3.56 4.21 2.2 Basis of Preparation investments and are recognised on daily basis based on the outstanding
The financial statements are prepared on the historical cost basis. The balance at the end of the day.
20 Book Net-worth Rs. in '000 1,592,053 1,843,503 2,211,462 2,263,686 2,424,080
preparation of the financial statements is in conformity with NAS and Interest receivables on loans (except project loans) are stated at full
21 Total Shares Nos. in '000 14,246 15,015 20,000 20,000 20,000
requires use of certain critical accounting estimates. It also requires value and are disclosed net of interest suspense as per the requirement
22 Total Staff Number 126 159 189 218 269 the management to exercise judgement in the process of applying the of NRB Directives.
23 Others - - - - - - Banks accounting policies. Interest accrued on project loans from the beginning of construction
period until the date of its commercial operation is capitalised in the
2.3 Interest Income loan as per the covenant with borrower.
Interest income on Loans and Advances has been recognized on cash Interest receivables on investments are stated at full value.
basis as per Directive of the Nepal Rastra Bank, although this practice
is inconsistent with NAS 7 (Revenue Accounting), which prescribes that 2.11 Loan Loss Provision
the revenue should be recognized on accrual basis.
Provision is made for possible losses on loans and advances & overdrafts
Interest income on Investments is recognised on accrual basis. at 1% to 100% on the basis of classification of loans and advances and
overdrafts in accordance with the directives of Nepal Rastra Bank. Provisions
2.4 Commission Income in addition to the minimum requirement as per the directive of Nepal Rastra
All the commission incomes are accounted for on accrual basis except Bank have been made by the management on prudence basis.
for commission income less than NPR 1 lakh or generated out of a
transaction with tenure less than 12 month which are accounted for 2.12 Loans & Advances Write off
on cash basis. Unrecoverable loans and advances are written off in accordance with
Service charges on loans and advances are recognized as income when the by-laws of the Bank approved by the Nepal Rastra Bank.
it becomes due on approval of loans.
2.13 Investments
2.5 Dividend Income Investments are classified as held for trading, held to maturity and
Dividend is recognised as income when the right to receive the dividend available for sale.
is established. For bonus shares, the numbers of shares alone are a. Held for Trading:
increased without any changes in the cost price of shares.
Investments that are made for the purpose of generating profit from
short term fluctuations in price are classified under this category.
2.6 Foreign Exchange Transactions These investments are marked to market and differences reflected
Assets and liabilities denominated in foreign currencies as on the in the profit and loss account.
balance sheet date have been converted into local currency at mid- b. Held to Maturity:
point exchange rates published by Nepal Rastra Bank after adjustment
for effective trading rate. The investments made with positive intent and ability of the bank
to hold till maturity is classified as held to maturity investments. The
Net difference arising from the conversion of foreign currency assets held to maturity investments are valued at amortized cost i.e. the
and liabilities is accounted for as revaluation gain/loss under Exchange cost price less any impairments (if applicable). The impairments are
Gain in Schedule 4.22. 25% of such revaluation gain is transferred to included in the profit and loss accounts for the period. Premiums
Exchange Fluctuation Reserve through Profit and Loss Appropriation paid and discounts received during the acquisition of Treasury
Account as per NRB Directives. Bills/Bonds are recognized as the part of initial cost and subsequently
Income realised from the difference between buying and selling rates adjusted with the interest income after amortization.
Schedule 4.33: Notes to Accounts

c. Available for Sale: amount of assets and liabilities in the financial statements and
All other investments that are neither "held for trading" nor "held corresponding tax bases used in the computation provided on
to maturity" are classified under this category. These investments temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. Financial Year 16 July 2012 to 15 July 2013 (1 Shrawan 2069 to 31 Ashad 2070)
are marked to market on a regular basis and the difference adjusted
through provision for investments. Deferred income tax is determined by using tax rates (and laws) that
have been enacted by the balance sheet date and are expected to
Investment Adjustment Reserve of 2% of available for sale portfolio is apply when the related deferred income tax asset is realised or the 1. Interest Income and Interest Suspense
created which qualifies for Supplementary Capital. All Investments are deferred income tax liability is settled. Deferred tax assets are The interest receivable on loans and advances as at 15 July 2013 has been netted off with interest suspense account as per NRB Directives and
subject to regular review as required by Nepal Rastra Bank Directives. recognised where it is probable that future taxable profit will be disclosed in Schedule 4.16 Other Assets.
available against which the temporary differences can be utilised.
Investment in Subsidiary Company Deferred tax related to temporary differences in opening balances
The Bank has a fully owned subsidiary company, NMB Capital Limited, is credited or charged directly to equity and subsequent year 2. Provision for Bonus
with an investment of NPR 100 million. The subsidiary company received differences are recognised in the income statement together with Provision for bonus has been calculated and provided for at 10% of net profit, after making adjustments for loan loss provision and bonus.
operating license from the Securities Board and started its commercial the deferred gain or loss.
operation from September 17, 2010. The investment has been classified Deferred tax assets and liabilities are netted off and presented under 3. Staff Housing Fund
under Available for sale category as per the direction of the NRB and Other Assets or Other Liabilities. Profit arising out of the deferred As Employee terms of Service by-law of the Bank has a provision for extending housing loans to eligible staff, a separate housing fund has not
Investment Adjustment Reserve equal to 100% of the investment has tax assets are stated under earmarked Deferred Tax Reserve as
been created as prescribed by the Labour Act, 2048.
been created. per NRB guidelines.
2.14 Fixed Assets and Depreciation 2.17 Stationery 4. General Reserve

a. Fixed assets are stated at cost less accumulated depreciation Stationery purchased are stated at cost and charged to revenue at the As required under the Banks and Financial Institutions Act 2063, 20% of the current year's net profit has been transferred to General Reserve.
b. Land is not depreciated. Depreciation of other fixed assets is charged time of consumption.
to Profit and Loss Account on Straight Line method over the useful life 5. Exchange Fluctuation Reserve
of fixed assets. The estimated useful life of the assets are as follows: 2.18 Non Banking Assets 25% of the revaluation gain amounting to NPR 4,033,701 has been transferred to Exchange Fluctuation Reserve through the Profit and Loss
Assets Estimated Life Rate of Depreciation Non Banking Assets are accounted for as per the Directives of Nepal Rastra Appropriation Account as per NRB Directives.
Building 40 years 2.5% Bank. Out of the total Exchange Fluctuation Income of Rs 64,539,212, a gain of Rs 25,067,537 was generated through Non Deliverable Forward contracts
Office equipment 7 years 14.28% transactions.
2.18 Lease
Computers 5 years 20%
Furniture & Fixtures 7 years 14.28%
Assets held under finance leases are initially recognized as assets of 6. Investment Adjustment Reserve
the company at their fair value at the inception of the lease or, if lower, 2% of investment amount under Available for Sale category and 100% of investment in wholly owned subsidiary NMB Capital Limited amounting
Vehicles 5 to 7 years 20%/14.28% at the present value of the minimum lease payments. The corresponding to NPR 260,713 and NPR 100,000,000 respectively have been transferred to Investment Adjustment Reserve as per NRB Directives. With this, the
Intangible Assets Over the life of assets determinable or estimated liability to the lessor is included in the financial statement as a finance Investment Adjustment Reserve has increased by NPR 97,991,702 compared with last year.
lease obligation.
c. Leasehold improvements are capitalised at cost and amortised over
Lease payments are apportioned between finance expenses and
period of lease.
reduction of the lease obligation so as to achieve a constant rate of
7. Deferred Tax Reserve
d. Intangible assets are capitalised and amortised over the life of assets As per the requirement of NRB Directives, the amount of Deferred Tax Asset created as at the fiscal year end has been transferred to Deferred
interest on the remaining balance of the liability. Finance expenses are
determinable or best estimated. Tax Reserve. The amount transferred is NPR 25,355,930.
recognized immediately in profit or loss, unless they are directly
e. Depreciation on fixed assets sold or disposed off during the year is attributable to qualifying assets. Contingent rentals are recognized as
charged upto the date of sales and gain or loss on the sales transaction
is accounted for.
expenses in the periods in which they are incurred. 8. Income Tax
Operating lease payments are recognized as an expense on a straight- a. Tax Litigation
f. Software costs are amortized over their estimated useful lives from line basis over the lease term, except where another systematic basis
the period of purchase. These costs are shown under Others in is more representative of the time pattern in which economic benefits Bank has filed an appeal at the Revenue Tribunal against assessment order of NPR 18,046,333 for financial year 2063-64 for which the resolution
the fixed assets schedule 4.14. from the leased asset are consumed. is pending. Similarly, the tax assessment for financial year 2064-65 for NPR 10,208,540 is under administrative review. Since resolutions for
g. Assets with a unit value of NPR 10,000 or less are expensed-off these cases are pending, contingent liability of the total amount (NPR 28,254,873) has been raised.
during the year of purchase irrespective of its useful life. 2.20 Provisions, Contingent Liabilities and Contingent Assets b. Tax Assessment
The Bank creates a provision when there is a present obligation as a The final tax assessments for financial year 2065-66 and beyond are yet to be obtained.
2.15 Retirement Benefits result of past events that probably requires an outflow of resources c. Previous Years Income Tax Liability adjustments
The Bank offers retirement benefits to its confirmed employee, mainly 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 Excess tax provisions amounting to NPR 5,041,032 provided during previous years have been adjusted in the Profit and Loss Account under
provident fund and gratuity, both payable at the time of separation from
service. obligation or a present obligation that may, but probably will not, require Provision for Income Tax.
a. Provident fund an outflow of resources. When there is a possible obligation or a present
Provident fund is recognised at the time of contribution to the fund
obligation in respect of which the likelihood of outflow of resources is 9. Advance Income Tax
remote, no provision or disclosure is made. Advance income tax paid by the Bank during the year and outstanding from previous years has been set-off with provisions for income tax liability
which is independent to the Bank.
Contingent assets are not recognised in the financial statements. and presented in Schedule 4.16 Other Assets.
b. Gratuity However, contingent assets are assessed continually and if it is virtually
Provision for gratuity is made on accrual basis with the amount of certain that an economic benefit will arise, the asset and related income
gratuity computed by the Bank as per the Bank's Policy. are recognised in the period in which the change occurs. 10. Provision for Gratuity
c. Accumulated leave Liabilities on account of derivative contracts are reported under During the year, the Bank has provided NPR 7,027,161 on account of gratuity payable to the eligible staff.
Accumulated leave is accounted for on accrual basis as per NAS. Contingent liabilities under subheading Outstanding Liabilities for
Forward Exchange Contract. These include notional principal on
outstanding forward rate agreements.
2.16 Income Tax 11. Provision for Sick Leave
a. Current Income Tax During the year, the Bank has provided NPR 4,573,844 on account of sick leave payable to the eligible staff.
Provision for current income tax is made in accordance with the provisions 3. Rounding off and Comparative Figures
of the prevailing Income Tax Act, 2058 and Rules framed there under. The financial statements are presented in Nepalese Rupees, rounded
b. Deferred Tax off to the nearest rupee. Previous year's figures have been reclassified
12. Unpaid Dividend
wherever necessary in order to facilitate comparison. As on the balance sheet date, unpaid dividend over five years amounts to NPR 6,426,849.
Deferred tax is recognised on the differences between the carrying
13. Paid up Share Capital Additional information:

Paid up share capital of the Bank has moved over the years as follows: Key Management Personnel includes members of Executive Committee of the Bank. Key management personnel are also provided with the
following benefits:
Financial Year Cumulative Paid up Capital NPR Remarks
i) Benefits as per the Employee Terms of Service By-laws,
2006-07 (2063-64 BS) 199,540,600 Issuance of 30% Bonus Shares
ii) Bonus to staff as per the Bonus Act,
2007-08 (2064-65 BS) 1,000,000,000 Issuance of 1:4 Right Shares
iii) Vehicle Allowance as per the Bank's Staff Vehicle Scheme.
2008-09 (2065-66 BS) 1,424,641,350 Issuance of 10% Bonus Shares and 30% Right Shares
2009-10 (2066-67 BS) 1,651,650,000 Auction of 53,586.5 remaining right shares of financial year
2008-09 and public issue of 715,000 shares. The Board of Directors have been paid meeting fees of NPR 1,016,000. The Bank has not provided any other non cash benefit to directors except
board meeting fees.
2010-11 (2067-68 BS) 2,000,000,000 Issuance of 10:21.09 right shares and auction of unsubscribed right shares.
Note: Existing members of Executive Committee includes:

14. Deferred Tax Mr. Upendra Poudyal Chief Executive Officer
Carrying amount of Assets and Liabilities where temporary differences arise as on Ashad 31, 2070 (15.07 2013) are as follows:
Mr. Sunil KC Deputy Chief Executive Officer
Particulars Carrying Value Tax Base DTL/DTA Difference
Mr. Pradeep Pradhan Chief Operating Officer
Fixed Assets 238,904,697 228,987,074 DTL 9,917,623
Mr. Suman Sharma Head Credit Risks Management and Control
Gratuity provision 22,084,839 - DTA 22,084,839
Mr. Bijay Giri Head Corporate Affairs and Cost Centre Management
Sick leave provision 14,534,741 - DTA 14,534,741
Ms. Shabnam Limbu (Joshi) Head Human Resources
Provision on investment 6,811 - DTA 6,811
Provision on Non Banking Assets 57,811,000 - DTA 57,811,000
19. Lease Payments
Net temporary differences DTA 84,519,768
Deferred Tax Asset (30%) as on 15 July 2013 25,355,930 Finance Lease
Opening deferred tax liability 3,762,499 The Bank has not entered into any finance lease and does not have any obligation in respect of finance lease.
Net movement this year 29,118,429
Of which: Operating Lease
Charged to Profit and Loss Account 29,118,429 The Bank has entered into a lease arrangement for office premises and ATM space outside of the branch for different periods continuing from
previous years, which can be terminated by either party giving 90 days notice. The future minimum lease payment under non-cancellable operating
Deferred tax (assets)/liabilities have been recognised as per the provision of Nepal Accounting Standard (NAS -09). leases, where the bank is lessee is NIL.
15. Details of Leasehold Assets 20. Reconciliation Status

Particulars Balance as on 15 July 2012 Added/Sold during the year Amortized during the year Balance as on 15 July 2013 The position of agency and inter-branch reconciliation accounts are given below: Amount in NPR
Lease hold 58,342,211 1,612,073 6,488,216 38,156,541 Particular Less than 1 Year More than 1 year less than 3 years More than 3 years Total
Agency Accounts 93,659,857 301,544 100,100 94,061,501
16. Loans and Advances Written Off Inter branch - - - -
The Bank has written off loans & advances and interest receivable amounting to NPR 321,892 and NPR 49,017 respectively on one account during
the year. 21. Loan Disbursed, recovered, written off and outstanding during the year.
The loan disbursed, recovered and outstanding during the year is given below: Amount in NPR
17. Other Assets Written Off Opening Balance Disbursed Recovered Written off Closing balance
The Bank has written off other assets amounting to NPR 97,186 during the year. Provision on these assets had been provided for during the last
12,468,478,637 43,301,855,200 38,865,284,677 321,892 16,904,727,269
fiscal year.
18. Compensation Details for Key Management Personnel 22. Summary of Changes in deposit during the year
S.No Particulars Amount (NPR) The financial growth of the deposits during the year is given below:
Amount in NPR
A Short Term Employee Benefits Particulars FY 2069/2070 FY 2068/2069 Increase/(Decrease)
(Includes Gross receipt during the year) 27,958,818 Savings Deposits 3,718,675,723 3,311,063,426 407,612,297
B Post Employment Benefits Nil Fixed Deposits 8,321,272,160 6,881,752,498 1,439,519,662
C Other Long Term Benefits Nil Call Deposits 8,179,898,995 5,069,566,900 3,110,332,095
D Termination Benefits 105,921 Current Deposits 664,005,727 609,309,051 54,696,676
E Share Based Payment Nil Margin Deposits 1,301,674,322 110,863,183 1,190,811,139
Total of Key Management Personnel Compensation 28,064,739 Total 22,185,526,927 15,982,555,058 6,202,971,869
23. Weighted Average Interest Rate Spread

Particulars Percent
Average lending/investment interest rate 10.35
Average deposit/borrowing interest rate 6.14
Net Spread 4.21
24. Classification of Assets and Liabilities based on Maturity 26. Borrowing by the Bank against the collateral of own assets
Amount in NPR Million Borrowing by the Bank against the collateral of own asset is NIL.
Particulars 1-90 Days 91-180 Days 181-270 Days 271-1 Year Over 1 Year Total
a) Assets
1. Cash Balance 517 - - - - 517 27. Non Banking Assets
2. Balance with Banks 5,256 - - - - 5,256 Previous Year (Gross) Balance at the year end (Gross)
3. Investment in Foreign Banks 148 105 - - - 253 Nil 57,811,000
4. Call Money - - - - - -
Loans and advances and accrued interest receivable outstanding and carried in the Balance Sheet on account of outstanding Non Banking Assets
5. NG Securities 226 29 288 200 798 1541
are NPR 12,590,322 and NPR 11,391,736 respectively.
6. Nepal Rastra Bank Bonds - - - - - -
Similarly, loans and advances and accrued interest receivable outstanding and carried in the Balance Sheet on account of Non Banking Asset
7. Inter Bank Lending 144 - 192 - - 335 transferred to Financial Asset during the year are NPR 122,423,121 and NPR 25,909,743.
8. Loans, Advances & Bills Purchased 5,098 1,885 2,415 639 6,868 16,905
9. Accrued Interest Receivable 109 - - - - 109
10. Reverse Repo - - - - - - 28. Transactions in Bullion
11. Receivable for Guarantee provided to other Institutions - - - - - - The Bank deals in bullion (Gold/Silver) by holding stock on consignment basis on behalf of suppliers as per the arrangement. Transaction of gold
and silver are carried out as per the NRB Directives.
12. Payment for facilities provided under S. N. 20,21,22 - - - - - -
13. Others-Fixed Deposit Placement - - - - - -
Total Assets 11,497 2,020 2,895 838 7,667 24,917 29. Related Party Disclosure
(a) Transaction with subsidiary company NMB Capital Limited (NMBCL)
b) Liabilities Total outstanding balances with NMB Capital Limited as on Ashad end 2070 are as follows:
14. Current Deposits 1,972 - - - - 1,972 NPR in million
15. Saving Deposits(including call deposits) 2,380 2,380 2,380 2,380 2,380 11,899 Particulars
16. Fixed Deposit 759 1,469 1,051 1,944 3,093 8,315 Receivable from NMBCL 0.07
17. Debentures - - - - - - Payable to NMBCL 0.13
18. Borrowings: - Call and Current Deposits of NMBCL 216.41
- Money at call short notice - - - - - -
- Inter Bank - - - - - - Total payments made and receipts obtained from NMB Capital Limited during the year are as follows: NPR in million
- Refinance - - - - - - Nature of Services Particulars Income to the Bank Expense to the Bank
- Others - - - - - - Service fees Service agreement to provide
19. Other liabilities and Provisions: various operational and strategic
- Sundry Creditors 68 - - - - 68 support to NMB Capital Ltd 2.40
- Bills Payable 8 - - - - 8 Office space rental Space provided by Bank to
- Interest Payable 48 - - - - 48 NMB Capital Ltd 1.88
- Provisions 25 - - - 15 40 Call and Current Deposit of Interest on NPR 216.41 million
- Others - - - - - - NMB Capital held in the Bank as of 15 July 2013 2.15
20. Payable for Guarantees 141 - - - - 141 Services Commission on Outsourcing of
21. Unlisted approved credit limits 797 - - - - 797 various services e.g. Payment of
22. Letter of Credit/Guarantees 3,044 532 227 149 314 4,264 NEA Bond Interest, Dividend of
23. Repo - - - - - - Nepal Telecom Ltd, Issue of right
24. Payment to be made for facilities under S.N. 11 - - - - - - shares of the Bank 0.91
25. Others - - - - - - Share Registrar Share Registrar of the Bank 0.30
Total Liabilities 9,240 4,380 3,658 4,472 5,801 27,551
Net Financial Assets 2,257 (2,360) (763) (3,634) 1,866 (2,634) The intra-group related figures have been excluded for presentation of the financial statement of the Group.
Cumulative Net Financial Assets/Liabilities 2,257 (103) (866) (4,500) (2,634) (b) Key Management Personnel Compensation
Transactions Nature Amount (NPR)

25. Summary of concentration of Exposure Amount in NPR
2012-13 2011-12
Chief Executive Officer Short Term Employee Benefits 10,948,207 14,338,800
Particulars Loans, Advance and Bills Purchased Deposit Contingent
Other Key Management Personnel Short Term Employee Benefits 17,010,611 16,619,043
Total amount as at 15 July 2013 16,904,727,269 22,185,526,927 4,429,183,682
Other Key Management Personnel Termination Benefits 105,921 Nil
Highest exposure to single unit 511,812,559 2,505,870,623 2,105,746,768
Total 28,064,739 30,957,843
Highest % of exposure to single unit 3.03% 11.30% 47.54%
Schedule 4.35
Details of loan availed by Promoters/ Comparison of Unaudited and Audited Financial Statements
Institutional Promoters by pledging As of FY 2069/70
Rs in '000
shares of NMB Bank Ltd with other

S.No. Particulars As per As per Variance Reasons for variance
Unaudited Audited In Amount In %
Financial Financial
Banks & Financial Institutions Schedule 4.34
1 Total Capital and Liabilities(1.1 to 1.7)
Statement Statement
25,125,985 25,125,985
1.1 Paid Up Capital 2,000,000 2,000,000 - 0.00%
S.N. Name of the Total no of shares held Loan Details Remarks 1.2 Reserve and Surplus 624,080 624,080 (0) 0.00%
Promoter/ by the promoter 1.3 Debenture and Bond - - -
Institutional 1.4 Borrowings - - -
Promoter No. of Percentage Name of Bank/ Loan Amount No of shares
shares of Paid up Financial Institution (NPR) mortgaged 1.5 Deposits(a+b) 22,185,527 22,185,527
share where loan is availed a.Domestic Currency 20,609,100 20,609,100 - 0.00%
Capital
b.Foreign Currency 1,576,427 1,576,427 - 0.00%
1 Anand Kumar Rungta 2,371 0.01 Nepal SBI Bank Limited 78,061,000 2,193 The credit facility has
1.6 Income Tax Liability - - -
been sanctioned to M/S
1.7 Other Liabilitiies 316,378 316,378 0 0.00%
Anand Trade Concern
2 Total Assets (2.1 to 2.7) 25,125,984 25,125,984
and the shares have
2.1 Cash and Bank Balance 5,746,328 5,746,328 (0) 0.00%
been held as additional
2.2 Money at Call and Short Notice 26,059 26,059 (0) 0.00%
security for the loan.
2.3 Investment 2,245,514 2,245,514 (0) 0.00%
2 Balaram Neupane 156,114 0.78 Siddhartha Bank Limited 6,817,579 97,002 Third Party collateral
2.4 Loans and Advances (Net) 16,491,044 16,491,044
together with mortgage
a.Real Estate Loan 1,126,088 1,126,088
of shares of Goma Devi
1. Residential Real Estate Loan (Except
Neupane w/o
personal Home Loan upto Rs. 10 Million) 448,139 448,139 - 0.00%
Mr. Balaram Neupane.
2. Business Complex & Residential
Prime Commercial Bank Limited 3,445,926 55,434
Apartment Construction Loan 230,626 230,626 - 0.00%
3 Gayatri Investment &
3. Income generating Commercial
management pvt.ltd. 642,441 3.21 International Development Bank Limited 22,834,569 314,839
Complex Loan - - -
4 Goma Devi Neupane 27,573 0.14 Siddhartha Bank Limited 1,297,827 22,770 Third Party collateral
4. Other Real Estate Loan (including Land
together with mortgage
purchase & plotting) 447,323 447,323 - 0.00%
of shares of Mr. Balaram
b. Personal Home Loan of Rs. 80 Lacs or Less 1,636,288 1,636,288 - 0.00%
Neupane husband of
c. Margin Type Loan 254,048 254,048 - 0.00%
Ms. Goma Devi Neupane.
d. Term Loan 2,558,427 2,558,427 - 0.00%
Prime Commercial Bank Limited 526,000 4,803
e. Overdraft Loan/ TR Loan/ WC Loan 5,355,316 5,355,316 - 0.00%
5 Hari Babu Neupane 100,000 0.50 Janata Bank Limited 14,580,554 100,000 Mortgage for loan availed
f. Others 5,560,877 5,560,877 - 0.00%
by Mr. Bala Ram Neupane.
2.5 Fixed Assets (Net) 344,625 344,625 0 0.00%
6 Sagun Pant 38,936 0.19 ICFC Bittiya Sanstha Limited 2,896,764 38,935 Third Party collateral.
2.6 Non-banking Assets (Net) - - -
7 Binoj Prasad Dhital 39,312 0.20 Prime Commercial Bank Limited 4,698,968 39,312
2.7 Other Assets 272,414 272,414 0 0.00%
8 Bishal Agrawal 139,042 0.70 Janta Bank Limited 9,944,381 139,042
3 Profit and Loss Account
3.1 Interest Income 1,831,121 1,831,121 0 0.00%
NOTE: Total number of shares held by Promoters includes only Promoter Portion. 3.2 Interest Expenses 1,077,803 1,077,803 0 0.00%
A. Net Interest Income (3.1-3.2) 753,318 753,318
3.3 Fees, Commission and Discount 52,727 52,727 0 0.00%
3.4 Other Operating Income 56,355 56,355 (0) 0.00%
3.5 Foreign Exchange Gain/Loss (Net) 64,539 64,539 (0) 0.00%
B.Total Operating Income (A+3.3+3.4+3.5) 926,939 926,940
3.6 Staff Expenses 127,355 127,355 0 0.00%
3.7 Other Operating Expenses 189,457 189,457 (0) 0.00%
C.Operating Profit Before Provision (B.-3.6-3.7) 610,127 610,128
3.8 Provision for Possible Losses 130,832 130,832 (0) 0.00%
D. Operating Profit (C.-3.8) 479,295 479,295
3.9 Non-Operating Income/Expenses(Net) 7,235 7,235 0 0.00%
3.10 Write Back of Provision for Possible Loss 59,389 59,389 (0) 0.00%
E. Profit from Regular Activities (D+3.9+3.10) 545,919 545,920
3.11 Extraordinary Income/Expenses (Net) (419) (419) 0 -0.02%
F. Profit before Bonus and Taxes (E.+3.11) 545,500 545,501
3.12 Provision for Staff Bonus 49,591 49,591 0 0.00%
3.13 Provision for tax 135,515 135,515 0 0.00%
G. Net Profit/Loss (F.-3.12-3.13) 360,394 360,394
Unaudited Financial Results (Quarterly) Schedule 4.36 Disclosure Under New Capital Adequacy Framework
As at 4th Quarter (15/07/2013) of the Fiscal Year 2069/70 Rs in '000 For the Year Ended Ashad 2070
Amounts in NPR Thousands
S.No. Particulars This Quarter Ending Previous Quarter Ending Corresponding Previous
Year Quarter Ending 1. Capital structure and capital adequacy:
1 Total Capital and Liabilities (1.1 to 1.7) 25,125,985 23,099,413 19,011,028 1.1 Tier 1 capital and a breakdown of its components: 2.2 Risk Weighted Exposures under each of 11 categories of Credit Risk:
1.1 Paid Up Capital 2,000,000 2,000,000 2,000,000
Details Amount (NPR) Particulars Amount (NPR)
1.2 Reserve and Surplus 624,080 528,877 266,914
1.3 Debenture and Bond - - - Paid up Equity Share Capital 2,000,000 Claims on government and Central Bank -
1.4 Borrowings - 100,000 - Share Premium 10,078 Claims on other Official Entities -
1.5 Deposits(a+b) 22,185,527 19,640,858 15,982,555 Statutory General Reserves 268,583 Claims on Bank 463,521
a.Domoestic Currency 20,609,100 18,303,109 14,775,148 Retained Earnings 4,996 Claims on Domestic Corporate and Securities Firms 12,193,004
b.Foreign Currency 1,576,427 1,337,749 1,207,407 Claims on Regulatory Retail Portfolio 601,941
Deferred Tax Reserves 25,356
1.6 Income Tax Liability - 113,653 23,765 Claims secured by Residential Properties 787,454
Less: Investment in equity of institutions with
1.7 Other Liabilitiies 316,378 716,026 737,794 Claims secured by Commercial Real Estate 553,402
financial interest (100,000)
2 Total Assets (2.1 to 2.7) 25,125,985 23,099,413 19,011,028 Past Due Claims 181,518
2.1 Cash and Bank Balance 5,746,328 2,270,442 3,566,897 Total Core Capital 2,209,013
High Risk Claims 2,392,715
2.2 Money at Call and Short Notice 26,059 189,409 20,912 1.2 Tier 2 capital and a breakdown of its components:
Other Assets 582,497
2.3 Investment 2,245,514 3,695,323 2,442,763
Details Amount (NPR) Off Balance sheet items 1,835,001
2.4 Loans and Advances (Net) 16,491,044 15,894,233 12,468,479
a.Real Estate Loan 1,126,088 1,188,803 1,303,008 General Loan Loss Provision 165,303 TOTAL 19,591,053
1. Residential Real Estate Loan (Except personal Exchange Equalization Reserve 14,806
Home Loan upto Rs. 10 Million) 448,139 337,534 263,117 Investment Adjustment Reserve 100,261 2.3 Total Risk Weighted Exposure calculation table:
2. Business Complex & Residential Apartment Construction Loan 230,626 302,860 411,396 Total Supplementary Capital 280,370 Particulars Amount (NPR)
3. Income generating Commercial Complex Loan - - -
1.3 Detailed information about the Subordinated Term Debts with Risk Weighted Exposure for Credit Risk 19,591,053
4. Other Real Estate Loan(including Land purchase & plotting) 447,323 548,409 628,495
b. Personal Home Loan of Rs. 10 Million or Less 1,636,288 1,409,590 875,228 information on the outstanding amount, maturity, and amount raised Risk Weighted Exposure for Operational Risk 840,780
during the year and amount eligible to be reckoned as capital funds. Risk Weighted Exposure for Market Risk 235,810
c. Margin Type Loan 254,048 292,180 275,528
The Bank does not have any Subordinated Term Debts Total Risk Weighted Exposure 20,667,643
d. Term Loan 2,558,427 2,417,162 1,740,844
e. Overdraft Loan/ TR Loan/ WC Loan 5,355,316 5,434,006 3,080,966 1.4 Deductions from Capital: Add: RWE equivalent to reciprocal of capital charge 126,672
f. Others 5,560,877 5,152,492 5,192,905 Investment in equity shares of fully owned subsidiary company of 2 % of gross income.
2.5 Fixed Assets (Net) 344,625 338,256 279,479 NMB Capital Ltd amounting to NPR 100,000,000 is deducted from Add : 2% of the total RWE due to Supervisory add up 413,353
2.6 Non-banking Assets (Net) - 57,811 - Tier 1 Capital. Total Risk Weighted Exposures
2.7 Other Assets 272,414 653,939 232,498 (After Bank's adjustments of Pillar II) 21,207,668
3 Profit and Loss Account At the End of At the End of At the End of 1.5 Total qualifying capital:
This Quarter Previous Quarter Corresponding Total Core Capital Fund (Tier 1) 2,209,013
Details Amount (NPR)
Previous Year Quarter Total Capital Fund (Tier 1 & Tier 2) 2,489,383
3.1 Interest Income 1,831,121 1,324,666 1,705,833 Core Capital (Tier 1) 2,209,013
Total Core Capital to Total Risk Weighted Exposures 10.42%
3.2 Interest Expenses 1,077,803 767,702 1,256,257 Supplementary Capital (Tier 2) 280,370
Total Capital to Total Risk Weighted Exposures 11.74%
A. Net Interest Income (3.1-3.2) 753,318 556,964 449,576 Total Capital Fund 2,489,383
3.3 Fees, Commission and Discount 52,727 33,656 37,775 1.6 Capital Adequacy Ratio: 2.4 Amount of Non Performing Assets (NPAs)
3.4 Other Operating Income 56,355 44,478 54,055 Category Provision Net
Details Amount (NPR) Gross
3.5 Foreign Exchange Gain/Loss (Net) 64,539 51,655 50,127
Tier 1 Capital to Total Risk Weighted Exposure 10.42 Restructured/Rescheduled 2,230 464 1,766
B.Total Operating Income(A+3.3+3.4+3.5) 926,939 686,752 591,533
Tier 1 and Tier 2 Capital to Total Risk Weighted Exposure 11.74 Substandard 67,048 16,762 50,286
3.6 Staff Expenses 127,355 92,176 92,443
3.7 Other Operating Expenses 189,457 135,344 159,678 Doubtful 16,003 8,001 8,001
1.7 Summary of the terms, conditions and main features of all capital
C.Operating Profit Before Provision (B.-3.6-3.7) 610,127 459,233 339,412 Loss 219,785 219,785 -
instruments, especially in case of subordinated term debts including
3.8 Provision for Possible Losses 130,832 109,160 279,327 Total 305,065 245,012 60,053
hybrid capital instruments.
D.Operating Profit (C.-3.8) 479,294 350,072 60,085 Bank does not have any other capital instruments except fully paid 2.5 NPA Ratio
3.9 Non-Operating Income/Expenses (Net) 7,235 5,924 8,653 up Equity Shares as qualifying capital. Gross NPA to Gross Advances: 1.80%
3.10 Write Back of Provision for Possible Loss 59,389 61,053 16,275 Net NPA to Net Advances: 0.36%
E. Profit from Regular Activities (D+3.9+3.10) 545,919 417,050 85,013
3.11 Extraordinary Income/Expenses(Net) (419) (322) 2,126
2. Risk exposures:
F. Profit before Bonus and Taxes (E.+3.11) 545,500 416,728 87,139 2.1 Risk weighted exposures for Credit Risk, Market Risk and Operational 2.6 Movement of Non Performing Assets Amount (NPR)
3.12 Provision for Staff Bonus 49,591 37,884 7,922 Risk: Particulars Ashad End Ashad End Movement
3.13 Provision for tax 135,515 113,653 23,765 Risk Weighted Exposure Amount (NPR) 2069 2070
G. Net Profit/Loss (F.-3.12-3.13) 360,394 265,190 55,452 a. Risk Weighted Exposure for Credit Risk 19,591,053 Restructure/Reschedule Loan 6,021 2,230 (3,791)
4 Ratios At the End of At the End of At the End of b. Risk Weighted Exposure for Operational Risk 840,780 Substandard 20,586 67,048 46,462
This Quarter Previous Quarter Corresponding
Previous Year Quarter c. Risk Weighted Exposure for Market Risk 235,810 Doubtful 24,726 16,003 (8,723)
4.1 Capital Fund to RWA 12.68% 12.84% 14.66% Total Risk Weighted Exposures (a+b+c) 20,667,643 Loss 254,516 219,785 (34,732)
4.2 Non Performing Loan(NPL) to Total Loan 1.80% 1.90% 2.45% Add: RWE equivalent to reciprocal of capital charge Total Non Performing Loan 305,849 305,065 (784)
4.3 Total Loan Loss Provision to Total NPL 135.60% 129.13% 130.01% of 2 % of gross income. 126,672
4.4 Cost of Funds 6.14% 6.95% 9.02% Add : 2% of the total RWE due to Supervisory add up 413,353
4.5 Credit to Deposit Ratio (Calculated as per NRB Directives) 68.70% 76.71% 65.76% Total Risk Weighted Exposures (After Bank's
4.6 Base Rate 9.55% 9.32% NA
adjustments of Pillar II) 21,207,668
Note: 1. Above figures are subject to change from Supervisory Authority and External Audit.
2. Figures of previous periods have been regrouped wherever necessary as per NRB Directives.
94 NMB BANK ANNUAL REPORT - 2012/13
2.7. Movement of Loan Loss Provision & Interest Suspense 3. Summary of the Banks internal approach
Category Ashad End Ashad End Movement to assess the adequacy of its capital to support
2069 2070 current and future activities: Department/Unit Heads Branch Managers
Pass 124,417 168,672 44,255 Risk management is essential for well being of the overall banking Sanju Shrestha, Head Retail & Priority Banking Chiran Jha, Babarmahal
Restructured 1,197 464 (734) business. Credit, Market and Operational Risk are managed independently
Substandard 5,146 16,762 11,616 at NMB Bank. Credit Risk Unit reviews risk related to credit prior to Shreejesh Ghimire, CEO NMB Capital Rabi Chandra Gurung, Putalisadak
Doubtful 12,363 8,001 (4,361) disbursement of all loans, it is independent of a loan approver. Credit
Risk Management Committee meets once a month to review credit Alok Shrestha, Head Branches and Strategic Sourcing Pranisha Shrestha, Newroad
Loss 254,516 219,785 (34,732)
portfolio risk. Market risk is closely monitored all time and managed
Total Loan Provision 397,640 413,683 16,043 Roshan Regmi, Head Information Technology Omkar Mani Acharya, Thamel
through ALCO. Operational Risk Committee which meets once each
month is a platform to assess/monitor operational risk identified vides Govind Ghimire, Head Business Banking Bishnu Prasad Paudel, Kantipath
2.8 Interest Suspense various units, branches. Effective implementation of process/controls
is periodically reviewed by an Operational Risk Unit. Operational Risk Navin Manandhar, Head Corporate Banking Mohan KC, Kalanki
As per NRB Directives, all interest accruals on loans and advances, Unit also carries out assurance reviews of the units to evaluate control
irrespective of loan category, are transferred to interest suspense Puspa Aryal, Head Trade Finance Dibir Bikram Shah, Chabahil
account until the interest accrued and due is realized in cash. Details weakness, recommends robust controls around the risk areas and
of Interest Suspense movement are as follows: monitors execution of control in an ongoing basis. Sushama Sharma, Head Institutional Banking Yubraj Dhakal, Kumaripati
Particulars Ashad End Ashad End Movement Audit Committee is formed as per the 'Terms of Reference' prescribed Neeraj Man Saiju, Head Treasury and Forex Sales Shradha Amatya, Thaiba
2069 2070
by NRB with 3 members. Coordinator of the committee is one of the
Interest Suspense 91,025 94,437 3,412 Non Executive Directors with Head Compliance, Operational Risk and Suresh Dhakal, Head Credit Administration Moti Ram Shrestha, Lubu
Audit as a secretary. The committee reviews internal/external/NRB audit Mridul Parajuli, Head Finance and Planning Dhirendra Wagle, Bhaktapur
reports, recommends stringent control process and escalates the audit
2.9 Details of Additional Loan Loss Provision observations to the Board. The Committee also reviews quarterly Shivaraj Upadhyaya, Head Cards and Alternate Delivery Channel Yubaraj Dahal, Banepa
unaudited financial reports of the Bank with recommendation to the
Category Amount (NPR) Sitaram Dumre, Head Central Back Office Badri Kedar Shrestha, Narayanghat
Board. The committee selects and recommends Internal Auditor and
Pass 44,255 External Auditor to the Board based on their past record. Audit Committee
Restructured (734) Dhrubha Prasad Adhikari, Head Legal Nabin Bist, Dharan
is committed towards maintaining robust control system hence monitors
Substandard 11,616 closure of risk issues raised by Internal/External/NRB auditors. Shambhu Prasad Parajuli, Head Trade Sales Rajesh Timsina, Biratnagar
Doubtful (4,361)
Loss (34,732) Risk Management Committee with view of ensuring better risk Suraj Shrestha, Head Recovery and Special Asset Management Vijay Kumar Gurung, Pokhara
Total Additional Loan Loss Provision 16,043 management in the bank and in line of NRB's requirement is formed
Dinesh Chand, Head Transaction Banking Rajiv Malla, Butwal
with 5 members chaired by Non-Executive Director, Coordinator of
Audit Committee, Head Operation, Head Credit Risk and Head Bimal Lamsal, Head Treasury Middle Office Hansha Bahadur Dhami, Nepalgunj
2.10 Segregation of Investment Portfolio Compliance, Operational Risk and Audit are the members of the
committee. The committee reviews high risk issues escalated by Rukmani Maharjan, Head Micro-finance Tek Raj Bhatta, Dhangadhi
Particulars Amount (NPR)
operational and credit risk committees (management level), deliberates
Held for Trading 1,050 on the risks and recommends to the Board if required. Stress Rajendra Bhatt, Doti
Held for Maturity 2,129,038 testing/Capital adequacy maintained by the Bank is also reviewed at Lok Raj Paneru, Birgunj
Available for Sale 115,433 the committee with recommendation to the Board. Revised/new NRB
Total Investment Portfolio 2,245,521 directives, Monetary Policy with material impact on the Bank are also Prabin Ghimire, Kirne
reviewed for its implications.
Note: Investment under held for trading category includes NSB Bonds Sundar Thapa, Manthali
held by the Bank, bought and sold daily as market maker of the same.
Vijay KC, Dailekh
2.11 Eligible Credit Risk Mitigants (CRM) availed Manil Ratna Shahi, Dhunche
As per the provisions of the New Capital Adequacy Framework, the
bank has claimed all the eligible credit risk mitigants of NPR 1,139,252
thousands for Balance Sheet and Off Balance Sheet exposures and
availed benefit thereof.

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2022 Annual Report of Financial Year 201213 English

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NMB Bhawan, Babarmahal

G.P.O. Box: 11543, Kathmandu, Nepal

INSIDE VALLEY: OUTSIDE VALLEY:

Bhaktapur Biratnagar Narayanghat

2012-13 Highlights 02-06

NMB Bank at a Glance 08-14

Board of Directors & Management 16-31

Banking Services 34-41

Embracing Social Responsibility 42-45

Financials and Disclosures 46-94

DEPOSITS LOANS AND ADVANCES (NET)

NETWORTH INVESTMENTS OPERATING PROFIT NET PROFIT

+7% -8% +80% +590%

110.58 62.95 52.22

THE YEAR IN REVIEW

FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS

NETWORK PEOPLE OUR STRENGTH

FOR THE CHANGING TIMES

For the changing times

The Bank is committed to reinvent itself

-20% -26% optimism, however overall political environment is likely to

18% 68% According to the preliminary estimates of Central Bureau of

BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM

CORPORATE GOVERNANCE RISK MANAGEMENT

We are equally dedicated to personalize our services yet remaining

Products & Services As an endeavor to attend to all banking requirements of the

EMBRACING SOCIAL RESPONSIBILITY

Consolidated Balance Sheet Consolidated Profit and Loss Account

Pradeep Pradhan Mridul Parajuli Pradeep Pradhan Mridul Parajuli

Date: 6th October, 2013 Date: 6th October, 2013

Consolidated Profit and Loss Appropriation Account

Particulars Current Year Rs. Previous Year Rs.

Consolidated Statement of Changes in Equity

T. Puraharan C.P. Ramkrishnan

Sundar Man Shrestha, FCA

For Sundar & Co.

Head - Finance and Planning

Dr. Hari Prasad Shrestha

Place: NMB Bhawan, Babarmahal, Kathmandu

As at Ashad 31, 2070 (July 15, 2013)

Investment Adjustment Reserve

Proposed Bonus Share

Date: 6th October, 2013

Chief Operating Officer

Jeewan Man Joshi

Particulars Current Year Rs. Previous Year Rs.

Upendra Poudyal Nandakishor Rathi Sundar Man Shrestha, FCA

Harischandra Subedi Manish Jain Rajendra Kafle

Pradeep Pradhan Mridul Parajuli

Date: 6th October, 2013

Balance Sheet Profit and Loss Account

Harischandra Subedi Manish Jain Rajendra Kafle

Pradeep Pradhan Mridul Parajuli

Date: 6th October, 2013

Profit and Loss Appropriation Account

Particulars Schedules Current Year Rs. Previous Year Rs.

Reserve and Fund

T. Puraharan C.P. Ramkrishnan

Sundar Man Shrestha, FCA

For Sundar & Co.

Harischandra Subedi Manish Jain Rajendra Kafle

Head - Finance and Planning

Place: NMB Bhawan, Babarmahal, Kathmandu