fifteenth annual report(english)

4 Introduction

6 Chairman’s Message

8 Board of Directors

9 Board of Director’s Report for 15th AGM

22 ACEO’s Message

24 Management Team

27 Product Review

30 CSR Activities & SME Financing

33 Auditor’s Report

35 Schedules

76 Significant Accounting Policies

79 Notes to Account

93 Disclosure as per Basel II

97 ATM Locations

98 Branches

CONTENTS

| Kumari Bank | Annual Report 2015-20164

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INTRODUCTION

Kumari Bank Limited, came into existence as the fifteenth commercial bank of Nepal by starting its banking operations from Chaitra 21, 2057 B.S (April 03, 2001) with an objective of providing competitive and modern banking services in the Nepalese financial market. The bank has paid up capital of NPR 2,699,166,532 of which 51% is contributed from pro-moters and remaining from public.

Kumari Bank Ltd has been providing wide - range of modern banking services through 38 points of representations located in various urban and semi urban part of the country, 36 branches outside and inside the valley; and 2 extension counters. The bank is pioneer in providing some of the latest / lucrative banking services like E-Banking and SMS Banking services in Nepal. The bank always focus on building sound technology driven internal system to cater the changing needs of the customers that enhance high comfort and value. The adoption of modern Globus Software, developed by Temenos NV, Switzerland and arrangement of centralized data base system enables customer to make highly secured transactions in any branch regardless of having account with

particular branch. Similarly the bank has been providing 365 days banking facilities, extended banking hours till 7 PM in the evening, Utility Bill Payment Services, Inward and Outward Remittance services, Online remit Services and various other banking services.

Visa Electron Debit Card, which is accessible in entire VISA linked ATMs (including 46 own ATMs) and POS (Point of Sale) terminals both in Nepal and India, has also added convenience to the customers. The bank has been able to get recogni-tion as an innovative and fast growing institution striving to enhance customer value and satisfaction by backing transparent business practice, professional management, corporate governance and total quality management as the organizational mission.

The key focus of the bank is always center on serving unful-filled needs of all classes of customers located in various parts of the country by offering modern and competitive banking products and services in their door step. The bank always prioritizes the priorities of the valued customer.

Kumari Teller Counter at Durbarmarg Branch

Kumari Bank | Annual Report 2015-2016 | 5

MISSIONOur mission is to deliver innovative products and services to our customers, use these inno-vative products to achieve financial inclusion, and do so by exemplifying good corporate gov-ernance, proactive risk management practices, and superior corporate social responsibility.

VISIONOur vision is to be the preferred financial partner to our customers, a center of career growth to our employees, and to maximize our sharehold-ers’ value, while contributing to our nation’s financial sector and to its economic welfare.


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CHAIRMAN’S MESSAGE

Dear Shareholders,

It gives me immense pleasure to place before you the highlights of your Bank’s performance during the financial year 2014-15. Details of the achievements and initiatives taken by your Bank are provided in the enclosed Annual Report for the year 2014-15.

I take this opportunity to impart you that the bank has announced 11% bonus share and 0.58% cash dividend for tax purpose, as proposed by the Board of Directors.

In the review period, the Bank has achieved growth in deposits and loans by 21.19% and 18.69% respectively to NPR 33.42 billion and NPR 27.07 billion respectively as compared to the previous fiscal year. In this period, bank’s net profit has increased by 15.55%. With past experiences, teamwork and taking up right strategies by the management, the Bank shall strive to perform better in the days to come.

In the current fiscal year, the Bank has targeted to increase its loan and investment to NPR 32 billion and NPR 5.78 billion respectively. Likewise, the deposit amount is targeted at NPR 38.50 billion. In the fiscal year 2015-16, the bank has a target of achieving operating profit of NPR 895.60 million and net profit of NPR 550 million. The operating expense in the running fiscal year is expected to be NPR 643.50 million. Currently, the Bank has 25 branches outside valley and 11 branches inside valley, altogether 36 branches, 2 extension counters and 46 ATMs. By the end of FY 2071/72, paid up capital of the bank has reached NPR 2.69 billion (including bonus share).

During the review period, the bank provided continuity on product innovation and automation

of services by operating Kumari Swastha Jeevan Bachat Khata, Kumari Remit Bachat Khata and Personal Loans and advances. Moving forward, we anticipate your continued support and patronage to encourage us to accomplish in order to become one of the leading financial service providers in the country.

The 14th Annual General Meeting of the Bank has proposed its plan for merger with Banks and Financial Institutions in order to raise the paid up capital to NPR 8 billion in line with the Central Bank requirement. Consequently, banks including Nepal Credit and Commerce Bank Ltd., Infrastructure Development Bank Ltd., Apex Development Bank Ltd., Supreme Development Bank Ltd. and International Development Bank Ltd. signed an MOU for merger on Poush 29, 2072 and Letter of Interest has already been obtained from NRB. Charter Accountant Firm P.Y.C. and Associates have been appointed for the Due Diligence Audit to decide on the swap ratio.

Finally, I wish to thank the bank’s management and staff members for considering the bank’s progress to be their own by providing dedicated services. I would like to express my gratitude and deep appreciation to Nepal Rastra Bank, Office of Company Registrar, Nepal Securities Board, Nepal Stock Exchange Ltd., shareholders, customers, partners-in-progress and all our well-wishers for their continued support, encouragement and guidance in making possible for us to complete yet another successful year.

With best wishes!Santosh Kumar Lama

Chairman


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BOARD OFDIRECTORS


BOARD OF DIRECTORS’ REPORTFOR FIFTEENTH ANNUAL GENERAL MEETING

Respected Shareholders,

On behalf of the Board of Directors, we would like to extend warm welcome to all the shareholders to the fifteenth Annual General Meeting of Kumari Bank Ltd.

We would like to express our heartfelt condolences to the departed souls due to the massive earthquake on April 26, 2015. Let us stand together, and pray to give courage to all those bereaved family members who have lost their loved ones. Also, we pray for the speedy recovery of those who have been injured due to this natural disaster.

We are delighted to present you this bank’s financial status of the fiscal year 2071/72, its achievement and future prospects in this fifteenth Annual General Meeting. Learning lessons

from our past experiences and facing utmost challenges in the banking sector, we have completed glorious 15 years of services. From its inception, this bank has been achieving continuous progress through modern banking technology and practices with its core objectives to provide excellent customer services, maximum return to our investors, maintain good corporate governance and moral values; and adhere to the rules and regulations set forth by the government. In days to come, with techno-savvy service delivery we shall continuously put our effort for the optimum quality of banking solutions. We take your suggestions as our course of action so that the bank can be more successful and sustained. We take your permission to present you with the achievements attained in the fiscal year 2071/72.

1. A HOLISTIC VIEW OF THE TRANSACTIONS IN THE PAST YEARSTable 1: Financial look at the bank’s past 5 years’ performance Amount in NPR million

Fiscal year 067/68 068/69 069/70 070/71 071/72

Particulars

Paid-up Capital* 1,603.80 1,603.80 1,828.33 2,431.68 2,699.17

Deposit 16,986.28 21,985.20 25,318.57 27,578.38 33,421.91

Loans, Borrowings & Advances 14,926.23 18,101.34 20,119.79 22,808.50 27,070.39

Investments 3,985.14 3,261.80 4,888.55 3,672.10 5,299.47

Fixed Asset (Net) 306.28 277.27 255.86 235.78 259.46

Total Assets 20,491.79 25,131.40 28,222.57 31,020.60 37,374.51

Net Interest Income 685.24 819.09 978.03 835.47 925.77

Other Income 190.06 203.36 237.05 330.83 297.55

Operating Expense 380.93 406.32 434.27 461.82 538.08

Operating Profit before loan loss provision 494.38 616.13 780.81 704.48 685.24

Net Profit/ (Loss) 251.24 275.50 291.45 341.65 394.79

Non-Performing Loan Ratio (%) 1.12 2.21 2.89 4.03 2.49

*Paid-up Capital includes Bonus Shares.

Looking at the past 5 year’s performance, it is evident that the bank’s financial business had a significant growth. The bank’s deposit collection showed steady growth along with boost up to the lending portfolio; the bank has had pushed its capital growth steadily to match with the growing volume of the bank. The bank has been able to increase its profit steadily over the years along with growth in its

balance sheet size.

The bank had shown tremendous success in the part of recovery aspect with Non-performing loan ratio decline to 2.49% from 4.03%.

A comparison between the fiscal year 2070/71 and 2071/72


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shows that bank achieved growth in loan, investment and deposit by 18.69%, 44.32% and 21.19% respectively. During the period, although the other operating income had declined by 10.06%; due to the incremental impact of net interest income by 10.81%; the total operating income of the bank had increased by 4.89%. Under operating expense, staff expenses

and other operating expenses increased by 28.22% and 5.71% respectively; which led to increment in total operating expense by 16.51%. Net loan loss provision decreased by 65.16% in fiscal year 2071/72 than that of previous fiscal year. Similarly, Bank’s net profit had increased by 15.55% in FY 2071/72.

67/68 68/69 69/70 70/71 71/721500

2000

2500

3000

67/68 68/69 69/70 70/71 71/72400

600

800

1000

67/68 68/69 69/70 70/71 71/7215000

20000

25000

30000

35000

67/68 68/69 69/70 70/71 71/7210000

15000

20000

25000

30000

Paid up Capital

Deposit

Reserve & Funds

Loan & Borrowings


67/68 68/69 69/70 70/71 71/723000

4000

5000

6000

67/68 68/69 69/70 70/71 71/7220000

25000

30000

35000

40000

67/68 68/69 69/70 70/71 71/72600

800

1000

67/68 68/69 69/70 70/71 71/72150

200

250

300

350

Investment

Net Interest Income Other Income

Total Assets


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67/68 68/69 69/70 70/71 71/72300

400

500

600

67/68 68/69 69/70 70/71 71/72400

500

600

700

800

67/68 68/69 69/70 70/71 71/72250

300

350

400

67/68 68/69 69/70 70/71 71/721

2

3

4

5

Operating Expense

Net Profit

Operating Profit Before Loan Loss Provision

Non-Performing Loan Ratio (%)


REVIEWING NATIONAL/ INTERNATIONAL ECONOMY:InternationalDuring the year 2015, the economic growth of developed countries is projected to improve and that of emerging and developing countries are expected to diminish. As per the World Economic Outlook published by International Monetary Fund as of July 2015; world’s economic growth is estimated to be 3.3% in 2015 whereas that on 2014 was 3.4%. The economic growth of United States of America for the year 2014 was 2.4% whereas that on the year 2015 is expected to be 2.5%. Similarly, economy of European countries and Japan in the year 2015 is expected to grow by 1.5% and 0.8% respectively. During the year 2014, the economy of European country increased by 0.8% and that of Japan declined by 0.1%. According to International Monetary Fund, the economy of emerging and developing countries in 2014 extended by 4.6% and is expected to grow by 4.2%. Similarly, in the year 2015, the economic growth of countries with minimum income level is expected to decline. The economic growth of such countries in 2014 was 6.0% and is expected to be 5.1% in 2015. The economic growth of neighboring countries India and China in 2015 is expected to be 7.5% and 6.8%. In 2014, the economic growth of such countries was 7.3% and 7.4% respectively. The world trade in the year 2014 increased by 3.2%; was expected to grow by 4.1% in 2015. Due to the decline in price of petroleum products and with decrease in the internal demand of petroleum products in the developed countries, the inflation of the developed countries is expected to decrease. In 2014, the inflation rate of such countries was maintained at 1.4% whereas it is expected to be 0% in 2015. In 2014, the inflation of emerging and developing countries was 5.1% and that in 2015 it is expected to be 5.5%. As per the estimation of International Monetary Fund on April 2015; the inflation rate of neighboring countries India and China is expected to be 6.1% and 1.2% respectively. (Source: Nepal Rastra Bank, Monetary Policy of Fiscal Year 2072/73).

NationalAccording to the primary estimation by Central Bureau of Statistics, for the fiscal year 2071/72, the Real Gross Domestic Product (GDP) rate based on actual base rate is expected to be 3.0% which was 5.1% in the previous fiscal year. Similarly, GDP in production price was 5.4% previous year and is expected to be 3.4% in the review period. In the review period, the economy was affected negatively and the growth rate remained minimum due to late monsoon, and devastating earthquake on Baisakh 12, 2072 and its aftershocks. According to the National Planning Commission, the earthquake had affected the economy adversely by NPR 706 billion approximately. Out of the total, it is estimated that 57.8% of the damage by earthquake is

sustained in social sector, 25.2% in productive sector, 9.5% in infrastructure sector and remaining 7.5% in other sectors. The total damage by earthquake comes around one-third of GDP for the fiscal year 2071/72. Loss on GDP is estimated to be NPR 36 billion, which subsequently effected in decline in the overall economic growth rate by 1.6%. In the review period, the agriculture sector which shares 33% of the total GDP; is expected to grow by 1.9% and that of non-agriculture sector by 3.6%. In the previous year the agriculture sector growth rate was 2.9% and that of non-agriculture sector rate was 6.3%. Due to the late monsoon, the main agriculture crops; wheat and maize production declined; and also due to the earthquake, which had impact on the loss of live stocks and crop production resulted in the low growth of the agriculture sector in the review period. In the review period, the growth rate of industrial sector is expected to be 2.6% which was 6.2% in previous year. Damage caused by earthquake directly to the fixed assets and production capacity of the industries; also induced scarcity of labor, their temporary management and low demand in the industrial produce had impacted adversely on the growth of industrial sector in the review period. The earthquake affected fixed assets and production capacity of industries by NPR 19 billion; almost 20% of the major road network had been damaged and affected 25% of the electricity production capacity which lead to adverse impact in industrial sector. The growth rate of service sector in the review period is expected to be 3.9% whereas that of previous year was 6.3%. Though there have been some improvements regarding industrial labor, peace security and other infrastructural problems; the major factor for decline in growth rate of service sector are due to effects of devastating earthquake and its aftershocks on hospitality business, real estate business, rental, wholesale and consumer business.

In the fiscal year 2071/72, the annual average inflation rate as per Consumer Price Index (CPI) is 7.2% and that in previous year was 9.1%.

In the fiscal year 2071/72, low export and increase imports had resulted in deficit in foreign trade. Due to the earthquake, due to low volume of imports at the end of the review period had resulted in the low rate of trade deficit. In the review period, total export decreased by 7.3% to NPR 85.32 billion whereas that in previous year was NPR 91.99 billion, which was a growth of 19.60% in comparison to its corresponding previous year. In the same review period, total import increased by 8.4% to NPR 774.68 billion whereas that in previous year was NPR714.37 billion, which was a growth of 28.3% in comparison to its corresponding previous year. Although there was decline in export and increase in import, but the export-import rate decreased to 11% in the review period which was 12.9% in previous year.


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The remittance inflow increased by 25% in the previous year and 13.6% in the review period which reached to NPR 617.28 billion.

In the fiscal year 2071/72, the Balance of Payment reached the highest i.e. NPR 144.85 billion which was NPR 127.13 billion last year.

In the fiscal year 2071/72, the total government expenditure under cash basis increased by 19.8% and reached NPR 499.96 billion and that in previous year increased by 16.3% i.e. to NPR 417.47 billion. In the review period, the capital expenditure based on cash basis increased by 26.6% and reached NPR 77.67 billion which was increased by 19.8% in previous year. In the review period the capital expenditure was 66.5% of the budget estimated for the period. In the previous year, the government expenditure increased in hefty due to the constituent assembly election; and due to the same the increment in the current year is seen minimal in comparison to the last year’s increment.

The deposit of Bank and Financial Institutions in the review period increased by 20.1% (NPR 282.6 billion) whereas that of previous year increased by 18.4% (NPR 218.68 billion). In the fiscal year 2071/72, the loan and investment of Bank and Financial Institutions increased by 17.5% (NPR 229.30 billion) whereas that in previous year increased by 14.4% (NPR 165.48 billion). In the review period, the private sectors by the Banks and Financial Institutions had extended loans in highest amount to production, construction and retail business portfolio. The loan to industrial production sector has increased by NPR 32.89 billion (14.8%) in the review period whereas that in previous year was increased by NPR 32.10 billion (16.8%). In the review period, loan to construction sector increased by Rs 33.31 billion (27.9%); retail business increased by NPR 53.23 billion (21.8%); transportation, communication and public service sector increased by NPR 12.75 billion (27%); which was NPR 23.49 billion (24.5%), NPR 45.94 billion (23.2%), NPR 3.45 billion (7.9%) respectively in previous fiscal year. Likewise, loan in agricultural sector in previous year increased by NPR 11.13 billion (28%) and that in the review period increased by NPR 14.25 billion (25%).

In the fiscal year 2071/72, the liquidity was retained through frequent deposit collection of NPR 155 billion, reverse repo NPR 315.80 billion and outright sale NPR 6 billion. Similarly, in the previous year, the liquidity was retained through reverse repo by NPR 602.50 billion and outright sale by NPR 8.50 billion. The weighted average interest rate of 91 days Treasury bill

in Asadh 2071 is 0.02% whereas it remained 0.1739% in Asadh 2072. Similarly, weighted average interbank interest rate among commercial banks in Asadh 2071 was 0.16% whereas that in Asadh 2072 is 1.01%. The weighted average interest rate for inter-bank transactions of other financial institutions for Asadh 2071 was 2.4% whereas that in Asadh 2072 is 3.89%.

In Asadh 2072, weighted average interest rate spread for commercial banks is 4.61% and was 5.21% in Asadh 2071. Similarly, the average base rate of commercial banks in Asadh 2071 was 8.36% and that in Asadh 2072 is 7.88%.

The overall Non-Performing loan ratio of Banks and Financial Institutions in Asadh 2072 is 3.33% and that in Asadh 2071 is 3.76%.

The NEPSE Index’s annual basis points diminished by 7.2% and reached to 961.2 points in Asadh 2072. The index was increased by 99.9% up to 1036.1 points in Asadh 2071.

Considering the overall economic situation of the fiscal year 2071/72, economic situation seems to be strong enough although economic structural framework seemed to be fragile. Even though country had an exceptional balance of payment situation, sufficient level of foreign exchange reserves and a mere single digit inflation indicating satisfactory level of economic stability, but inability to pace up the overall economic activities of the country is viewed as alarming factor inducing low rate of economic growth. Also, due to the earthquake in the last quarter of the review period had impact on the economic growth. (Source: Nepal Rastra Bank, Country’s Current Economic Status of Fiscal Year 2071/72).

3. REVIEW OF THE BANK’S OPERATIONS IN FY 2071/72:Analysis of the financial statement of review period clearly depicts the growth in banking transaction, asset and profit. Such increment led in increment of balance sheet size by 20.48%, which is NPR 37.37 billion in fiscal year 2071/72.

A. Capital management: By the end of 2071/72, paid up capital of the bank has reached to NPR 2.69 billion (including proposed bonus share). Also the capital adequacy ratio has to be minimum 10%, of which by the end of review period, the total capital adequacy is 10.84%. As per the Nepal Rastra Bank’s Capital requirement, bank had formulated following capital plan to adhere with the requirement of the Central Bank obligations.


Amount in NPR million

F/Y Opening BalanceAddition to Paid-up Capital of Bank

Closing BalanceShare Dividend Merger Right Share / Merger

2071/72 2,432 243 - - 2,675

2072/73 2,675 760 2,751 - 6,185

2073/74 6,185 742 - 1,237 8,164

B. Deposit: Compared to the last fiscal year, deposit increased by 21.19% and the total deposit reached NPR 33.42 billion.

Table 2: Comparative State of Deposits:

Amount in NPR million

Deposit FY 071/72 % of total deposit FY 070/71 % of total deposit

Current 1,666 4.98 1,391 5.04

Savings 8,005 23.95 7,234 26.23

Call 9,281 27.77 6,812 24.70

Fixed 14,470 43.29 12,142 44.03

Total 33,422 100.00 27,578 100.00

C. Lending and its Management: In fiscal year 2070/71, the bank’s total loan was NPR 22.80 billion, while at the end of review year, it increased by 18.69% reaching NPR 27.07 billion. The bank has diversified its lending into personal loans, education loans, small and medium scale business loans, organizational loans and development projects loan. During the review period, bank’s non-performing loan was 2.49 %, but the gross non-performing loan ratio was only 0.44%. Certain improvements were noted in the real estate sector of lending in the current review period. In the current review period along with recoveries certain non performing loans were taken as non banking asset of the bank, which resulted in the decline in the non performing loan ratio in comparison to the previous year. We would like to inform you that we shall put continuous efforts to regularize these loans in the days to come.

In FY 2070/71, the loans of real estate amounted to NPR 2.04 billion, which was pulled down by 1.5% to NPR 2.1 billion as of Asadh 2072. As per Nepal Rastra Bank the real estate loans should not exceed 25% of the total loan exposure of the bank. In the same line, with due caution while investing in real estate loans, bank’s exposure on such loan portfolio is 7.43% only at the end of Asadh 2072.

D. Investment: In accordance with the bank’s objective of getting returns from the overall resources by maintaining balanced liquidity, the bank has given continuity to its policy of investing in Nepal Government and Nepal Rastra Bank’s risk free securities (Treasury bill, development bond, etc).

The bank has been carefully investing in local and international market and various organizations’ share and bonds. The bank has invested NPR 2.57 billion in NG’s treasury bills, NPR 1.33 billion in development bonds; making the total investment of the bank to be NPR 5.29 billion by the end of FY 2071/72.

E. Profit: During the review period, the interest spread between deposit and loan has decreased; although there was substantial increment in loans and investment amount but there was only marginal increment in net interest income. Such decrease in interest spread was seen in all the banking institutions. In addition, the education loans to the students going abroad for further studies also declined which further reduced the commission revenues of the bank. The employee’s salary scale was reviewed, adding up to the staff expenses. With high degree of internal control mechanism and robust service delivery process; the expenses control worked effectively with only 6% increase in other operating expenses in relation to the last year expenses.

In the fiscal year 2071/72, the bank was able to recover net loan loss provision of NPR 86 million and a total of Rs 146 million was added as Non banking assets of the bank, while the net profit of the bank increased by 15.55% amounting to NPR 394.79 million.

F. Contribution to Government Revenue: The bank had paid NPR 148.2 million in fiscal year 2070/71 as corporate tax to the government and during the current year NPR 173.7 million was paid as advance corporate tax to the government.


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G. Products and Services: Kumari bank has launched differentiated products Kumari Swastha Jeevan Bachat Khata, Kumari Remit Bachat Khata and Personal Term Loans. Kumari Swastha Jeevan Bachat Khata has been introduced to promote savings and for improvement of quality of healthy lifestyle. The account holders of this new and peculiar product can avail discounts in the treatment cost incurred at Medanta Hospital, New Delhi. Customers are offered with co-branded ATM card used to get 5% discount with privileged services in pre-appointment, admission, consultation and follow-ups. Depositors under this scheme can also avail medical insurance facility of NPR 10,000.00 free of cost and heavy discounts are provided for the various types of services that the bank provides. Keeping in purview of providing service for transfer of fund within country and outside country the bank has been providing quality services via Kumari Remit Bachat Khata. The saving account scheme holders can also avail numerous discounts on varied services provided by the bank. In order to serve our valued customers Kumari bank has come up with various schemes under personal lending in simple and robust manner.

The Bank has been always been a techno-savvy service provider offering SMS Banking, Internet Banking and Kumari Mobile banking to its valued customers. The customers availing such services can make payments for mobile bills, telephone bills, credit card payments and other utility payments through internet portals. Similarly, the e-services of the bank can be linked with e-sewa, which could be used for interbank fund transfer, payment of air ticket, electricity bills and many other payment solutions. For smooth and easy remittance services, the Bank has introduced Kumari Remit software. Along with it, bank had made service level agreements with other remittance service providers to enhance further reach to the market in niche level. The Bank has been providing remittance services through more than 1000 remit agents throughout the country. The Bank has also signed agreement with 7 international remit companies.

The bank is even more resilient to bring newer services and added features for easier access of the products to the customers. We are continually in the process to provide market competitive privileged products and services to our valued customers. Electronic Banking since its inception, Kumari Bank has been providing varied innovative products and has made distinct market position in the industry. Visa Electron, Dollar Debit cards can be accessed via VISA network in Nepal, India and any other part of the world.

H. Branch and Network Expansion: The bank has extended 2 new branches inside the Kathmandu valley in this fiscal year. Currently, the bank has 25 branches outside valley and 11 branches inside valley, altogether 36 branches, 2 extension counters and 46 ATMs.

I. Corporate Governance: Banks and financial institutions are public organizations not only operated with shareholders’ funds but also through institutional and public deposit. This means that good corporate governance and moral character are two extremely sensitive issues that the bank takes into account. Being aware that the good corporate governance is the guiding path of the bank’s operations, the board of directors is consistently giving effort to conduct its activities according to the same, and to develop strong and transparent good corporate governance also in other activities of the bank.

J. Risk Management: A separate risk management sub-committee has been established to identify, monitor and protect the bank from potential risks associated with different activities of the bank. Policies and regulations have also been formed and implemented to manage the numerous risks associated with banking activities as well as other potential risks. The bank has taken the policy to make the internal control system more effective and efficient by properly managing the bank’s loans, operations, market and other risks.

The bank has executive management that formulates required policies, regulations, and documentation related to loan management, customer recognition, stress test and daily transactions activities.

i. Loan Risk Management: To identify and manage loan risks, bank has set up a separate department. The department assesses the risks associated before making any loan disbursements by the bank keeping in mind of the possible risks assessed with the predefined standards and policies set by the Nepal Rastra Bank as well as bank’s internal policy to hedge risks. The bank has taken up policy to determine loan risk segments and invest in the least risky segments by studying current scenario and expected future possible risk factors. Depending upon the changed market scenario bank adhere amendment of policies, reformulation of the loan portfolios, and determination of the level of risk and loan sectors. Also, the bank has priority set to reduce the concentration risks.

ii. Operating Risk Management: All the banking activities directed towards the operation of the bank is driven by given policies and guidelines with clearly defined work ethics, proper implementation and hedging of operational risk of the bank. To cope with the operational risk, the bank has set up a separate operation risk management department. It works as an identifier of risk associated with internal workflows and procedures, human resources related risks and provides suggestive solutions for such risk minimization. Because of this, we are confident that operating risks are being managed well.


iii. Liquidity Risk Management: Considering the scenario of excess liquidity and liquidity crunch on time from previous years, and impacts of the same on the profitability of the bank, various financial source and investment areas are determined and utilized in order to maintain optimum balance of liquidity. In order to cope and balance the liquidity scenarios and profitability match, ALCO/ Pricing Committee is formed.

iv. Market Risk Management: Bank is always alert regarding factors related to market risks and analyses those factors to prepare plan for the same. The bank has made policies and devised working methods to monitor the foreign exchange situation to minimize risks associated with fluctuations in foreign currency exchange rates. Similarly, arrangements have also been made for formulating the necessary policies and regulation by regular monitoring market interest rates. The ALCO/ Pricing Committee is formulated and entrusted to control such risks.

K. Corporate Social Responsibility: The bank is aware of its social responsibilities along with this professional intent as well. Kumari Bank, an eminent participant in CSR activities, had made its mark to support devastating earthquake victims. The bank had provided galvanized sheets worth of NPR 4.6 million towards those who lost their houses in the calamity. The bank had also extended helping hands to renovate ‘Kumari Ghar’ of Kathmandu by providing NPR 0.5 million; which in total comes to NPR 5.1 millions worth in cash value as support to earthquake victims. The bank has been providing scholarship to children via HOPAD Child and Women Promotion Society (NGO) as part of its regular CSR activities to support child welfare. The bank has provided free health camp service in Sindhupalchowk area through Indrawatee Community Service Centre as an initiative taken by bank towards promotion of healthy community. Cultural and social harmony is our responsibility; the bank has established ‘Kumari Education Fund’ in order to support Goddess Kumari for her higher studies. Every year NPR 50,000.00 is deposited in the fund. As part of cultural preservation initiative, the bank has been supporting Kumari Puja and Indra Jatra festival every year through various activities and financial support. For social welfare, the bank has distributed food to elderly citizens at Nisahaya sadan old age homes. In order to create awareness regarding possible diseases due to mosquitoes in Terai Region; Kumari Bank, Nijgadh branch distributed mosquito nets to Community Hospital of Nijgadh. The bank also organized tree plantation program in Dhanusa, Mahendranagar for creating environmental awareness. Besides, the bank also made its presence in various socio-cultural programs as blood donation program, school and colleges’ development programs, financial literacy programs and support to various clubs working for social development on regular basis.

L. Committees and sub-committees appointed by Board of Directors: According to popular law and the policies made under bank’s authority, the following committees and sub-committees are in place:

i. Audit committee: In accordance with Section 164 of the Company Act, an audit committee was in place comprising of director Naresh Dugar and bank’s internal audit head as member secretary under the convenorship of non-executive director Rasendra Bahadur Malla. Since, both directors Rasendra Bahadur Malla and Naresh Dugar have been staying abroad, their responsibilities are handed over to director Er. Binod Dawadi and director Dr. Shobha Kant Dhakal for the time being. The bank’s internal audit division reports directly to this committee.

ii. Human resource sub-committee: In order to guide management in selection of capable employees, recruitment, appointments, skill development and related services/ facilities, and other such matters, a human resource sub-committee comprising of head of human resource department under the convener ship of director Dr. Shobha Kant Dhakal is in place.

iii. Risk management sub-committee: In order to correctly identify and eradicate the risks of the bank, a committee comprising director Rasendra Bahadur Malla, director Puna Ram Bhandari and head from the concerned department under the convener ship of director Uttam Prasad Bhatarai is in place that formulates policies, regulations for the same.

Such committees and sub-committees appointed by the board of directors have been conducting their activities within the premises set by the Board, Company Act 2063 and in accordance to the Nepal Rastra Bank’s directives. This committees and sub-committees’ work, duties and authority and the conveners and member of the stated committees and sub-committees have not been provided with any additional reimbursements and facilities except for meeting allowances.

iv. Other management level committees: Besides the above mentioned committees and sub-committees appointed by the Board of Directors, the following have also been conducting their activities under convener ship of the CEO in order to implement the bank’s activities more effectively: management committee, pricing committee / asset and liability management committee, labor relations, HR committee, discipline and performance review committee, procurement committee and bad loans recovery committee. The members of these committees are not provided any allowances or any additional facilities.


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M. Human Resource: Executives/ staffs play the key role for the overall development of any bank. The bank human resource policy appoints able and professional staffs while recruiting and to increase the efficiency, professional ability, managerial techniques and productivity of the staffs, the bank provides national and international level training as well. The bank is currently focused to increase the efficiency of the manpower and bring in new techniques, so that in the days to come, the ratio between risk and result is

balanced. The bank continually amends the Executive Service Terms, 2064 so that the administration of the bank is always effective. Also, the bank’s executive organizational structure is reviewed and new structure is put in its place so that the operation becomes more effective even so often. At the end of the review period, total 407 staffs are working in the bank (including 392 as permanent and 15 as contract). During the review period, our staffs were also involved in various sporting and social activities as well.

Current year’s achievements and programs: These are the financial status of the current year (till the end of Poush month) Table 3: Current year’s financial glimpse: Amount in NPR Million

Titles 2072 Poush month’s end

2071 Poush month’s end Change (NPR) Change %

Paid-up Capital 2,431.68 2,431.68 0.00 0.00

Deposit 34,531.23 29,884.77 4,646.46 15.55

Loans, Borrowings and Advances 27,505.74 25,289.25 2,216.73 8.76

Investment (Net) 8,128.05 5,274.78 2,853.27 54.09

Interest Income 1,271.62 1,148.21 123.42 10.75

Interest Expense 806.91 714.10 92.81 13.00

Net Interest Income 464.71 434.11 30.60 7.05

Other Operating Income 160.26 139.33 20.93 15.02

Operating Expense 259.60 249.41 10.18 4.08

Operating Profit/ (Loss) before the loan loss provision 365.37 324.02 41.35 12.76

Net Profit 210.19 181.67 28.52 15.70

Programs for Current Year:In the current fiscal year, bank has targeted to increase its loan and investment respectively by 18.23% and 9.00% to NPR 32 billion and NPR 5.78 billion. Likewise, the deposit amount is targeted to increase by 15.2% to keep at NPR 38.50 billion. The Bank’s net interest income, other operating income and other operating expenses is expected to increase by 26.63%, 23.29% and 19.59% to NPR 1,172.2 million, NPR 366.9 million and NPR 643.5 million respectively. Similarly, operating profit before the loan loss provision is expected to increase by 30.71% and reach NPR 895.6 million. In the review period, the Bank is able to decrease the non-performing loan ratio to 2.49% than that of previous year i.e. 4.03%. In the current year, the effect of recovery of loan loss provision in profit and loss account is expected to be NPR 30 million. Bank’s net profit in the current fiscal year is expected to increase by 39.52% to reach at NPR 550 million.

To make the bank more efficient, the bank has planned to increase the potential of its assets, bring changes to deposit structure, increase staffs’ productivity and also introduce quality services for the benefit of the customers. The bank has also planned to fulfill the financial requirements of customers

by developing newer and modern services, to bring in financially deprived population into the circle of banking, disburse loans to small scale industries and thus controlling the risk factor and above all, contribute to the economic development of the nation. The bank plans to extend its banking activities to the semi-urban and rural areas with additional branch set up and also via Kumari Mobile Banking services and Kumari Branchless Banking Services. The bank looks forward to newer technological advances and to study the prospects of merging or being merged to a bank or financial institution via Nepal Rastra Bank’s approval and with shareholders’ suggestion, discussion and proposition to tackle the challenges in the banking sector, and other such programs.

4. BANK’S INDUSTRIAL AND BUSINESS RELATIONS: The bank has been maintaining cordial relationships with all concerned industrial and professional bodies and is committed to continue doing so in the future as well, in the process, making use of the same in the bank’s favor.


5. CHANGES IN BOARD OF DIRECTORS AND THE REASONS:Bank’s former Chairman, Mr. Noor Pratap J.B. Rana resigned from his position on Poush 21, 2072 on his self interest, which was accepted by the board meeting, held on Poush 23, 2072 effective from Poush 21, 2072.

Professor Dr. Rajan Bahadur Poudel resigned from the position on Chaitra 26, 2071 on personal grounds which was accepted by the board meeting.

We would like to thank them for their hard work and dedicated service towards the bank.

The board meeting held on Poush 27, 2072 appointed promoter shareholder Er. Binod Dawadi in place of Mr. Rana.

Similarly, the board meeting held on Magh 28, 2072 appointed Mr. Santosh Kumar Lama, promoter shareholder as Chairman which remained vacant after the resignation by Mr. Rana. 6. MAJOR ISSUES AFFECTING BUSINESS:The devastating earthquake that shook the country on Baisakh 12, 2072 and its aftershocks had its impact on the industrial and business activities. Apart from which, after the promulgation of the constitution of Nepal, the unstable political situation, border blockade, energy crisis and labor crisis had affected adversely to the bank. Country’s industrial and business sector need to develop in order to develop banking sector. Currently, industrial and business activities of the country are experiencing abnormal conditions, due to which the capacity of borrowers to repay loan and interest amount has diminished. Moreover, excess liquidity situation prevailed in the financial market; in the absence of justifiable and profitable investment opportunities. Hence, due to these factors banks are not in position to run its business activities in normal conditions and possibilities of negative impact on the bank’s profitability as well.

7. BOARD OF DIRECTORS’ RESPONSES TO THE AUDITOR’S REPORTExcept for normal comments concerning the bank’s regular business, no especially negative comments have been observed in the audit report. Instructions have also been given to the management to implement the suggestions and advice of the audit report. The financial statements of fiscal year 2071/72 were accepted by Nepal Rastra Bank on Magh 20, 2072; the comments and instructions have been included in the annual report. Bank has already given direction to its management team for implementation of received comments and instructions.

8. DIVIDEND DECLARATION:Kumari Bank announces 11% bonus share from its paid-up capital i.e. NPR 267.4 million and NPR 14.0 million cash dividend for tax purpose on bonus share as proposed by the board of directors; i.e. total of 11.58% which makes total amount of NPR 281.5 million as total dividend.

9. FORFEITED SHARESIn the reported year, no shares have been forfeited.

10. PROGRESS OF THE BANK AND ITS SUBSIDIARY COMPANIESThe progress of the bank has been presented under various headings in this report. The bank does not have any subsidiary companies.

11. MAJOR BUSINESSES CONDUCTED BY THE BANK AND ITS SUBSIDIARY COMPANIES IN FY 2071/72 AND ANY IMPORTANT CHANGES IN BUSINESS ACTIVITIESThe bank does not have any subsidiary companies and there are no major changes other than mentioned in this Annual Report.

12. IMPORTANT INFORMATION PROVIDED BY VALUED SHAREHOLDERNone.

13. DETAILS OF SHARE HOLDING BY THE COMPANY’S DIRECTORS AND OFFICE BEARERS IN THE PREVIOUS FY AND INFORMATION PROVIDED BY THEM ABOUT THEIR INVOLVEMENT IN THE TRADING OF COMPANY SHARES, IF ANYNo information as such.

14. INFORMATION ABOUT ANY AGREEMENTS CONCERNING THE BANK THAT SERVICE THE SELF INTEREST OF ANY DIRECTOR OR PEOPLE CLOSE TO THEMNone.

15. DETAILS ABOUT RE-PURCHASE OF SHARESNone.

16. DETAILS ABOUT INTERNAL CONTROL SYSTEM:There is a separate department to maintain the bank’s internal control systems. This department is always active to minimize


20

risks associated with the Bank’s loans, operations and market risks. Monitoring of the effectiveness of the internal control systems is done on a regular basis by the Audit Department while conducting its regular audit.

17. DETAILS OF THE BANK’S TOTAL OPERATING COSTSThe Bank’s operating costs in FY 2071/72 were as follows:

Staff expenses: NPR 284,256,955Other operating costs: NPR 253,823,364

Detailed description of the bank’s total operating costs has been stated in Annexure 4.23 and 4.24 of the Annual Report.

18. INFORMATION ABOUT AUDIT COMMITTEEAccording to the Company Act, Section 164, the audit committee is comprised of directors Naresh Dugar and bank’s internal audit department head, Ganesh Kumar K.C., as member secretary under the convener ship of non-executive director Rasendra Bahadur Malla (Mr. Malla and Mr. Dugar have been staying abroad so director Er. Binod Dawadi and director Dr. Shobha Kant Dhakal are given responsibility temporarily). Bank’s internal audit department reports directly to this committee. This committee has had 10 sittings in FY 2071/72. Member of this committee have been provided with meeting allowance at par with other board members. This committee’s activities are conducted in accordance with Nepal Rastra Bank‘s directives and Company Act regulations. No serious remarks on the bank’s operations have been observed in the

internal audit report. The audit committee has been conducting regular monitoring of the internal control systems and regularly providing suggestions concerning implementation to the management besides providing information on the same to the board of directors. The management of the bank has been improving its daily activities regularly as per the suggestion provided by audit committee.

19. INFORMATION ABOUT ANY CASH BALANCE TO BE PAID TO THE BANK BY DIRECTOR, MANAGING DIRECTOR, CHIEF EXECUTIVE OFFICER, BANK’S PROMOTERS OR THEIR CLOSE RELATIVES OR FIRM ASSOCIATED WITH THEM, COMPANY OR ORGANIZATIONNone.

20. DETAILS ABOUT SALARIES, ALLOWANCES AND FACILITIES PROVIDED TO DIRECTORS, MANAGING DIRECTOR, CEO AND OTHER EXECUTIVES:Directors: The bank’s directors are paid meeting allowances for taking part in meetings of committees and sub-committees as set up according to applicable rules at the rate of NPR 10,000 to the chairperson and NPR 8,000 to the members. Also, NPR 10,000 per month is being provided for media and daily newspapers for each board of directors. The bank has not provided the directors with any other facilities than the above. In FY 2071/72, NPR3,175,033 (In words, NPR 3.175 million) has been paid as meeting and media allowances to the directors.

Annual Salary, Allowances and services for CEO and other executives/ managers for the F/Y 2071/72:

Table – 4 Amount in NPR

S.No. Salary and services CEO Managers

1 Salary 4,584,711 32,687,198

2 Allowances 10,111,905

3 Provident Fund 458,471 3,268,720

4 Vehicle maintenance 705,973

5 Medical Treatment (annual + accumulated ) 2,151,280

6 Dashain Allowance 495,000 3,244,799

7 Leave (annual + accumulated) 506,437 7,285,996

8 Insurance - 2,127,726

9 Gratuity 11,240,044

10 Others

Total NPR 6,044,619 72,823,641 Note: The salary and services of CEO includes the amount received by the then CEO for the period of Shrawan 1, 2071 to Chaitra 17, 2071 only.


Other than above mentioned salary and allowances, other managers are also provided with following services:

1. Vehicle along with driver to the CEO; vehicle loan, driver, fuel, and repair and maintenance to ACEO and AGM ;and vehicle loan, fuel and repair expenses according to the bank’s policy on transportation vehicles to other management office bearers.

2. Home and real estate loans/ personal loans to all permanent office bearers as per the bank’s staff service regulations.

3. Journals, telephone and mobile facilities as per the bank’s human resource policy.

21. DIVIDEND YET TO BE TAKEN BY SHAREHOLDERS: Out of 12% cash dividend distributed in FY 2066/67 and 7% cash dividend distributed in FY 2068/69; the shareholders are yet to collect the remaining amount of NPR 7,839,484 (in words NPR 7.83 million) from the distributed cash dividend till Asadh end 2072.

22. DETAILS OF ASSET SALES AND PURCHASES AS PER SECTION 141 OF THE COMPANY ACT, 2063: None.

23. DETAILS OF BUSINESS WITH ASSOCIATED COMPANIES AS PER SECTION 175 OF THE COMPANY ACT, 2063:None.

24. ANY OTHER INFORMATION NECESSARY TO BE REVEALED IN THE DIRECTORS REPORT AS PER THE COMPANY ACT, 2063, AND APPLICABLE LAWS: None.

25. OTHER INFORMATION: The bank’s board of directors accepted the resignation of CEO, Udaya Krishna Upadhyay effective from date Chaitra 18, 2071.

Information regarding Merger:14th Annual General Meeting of the Bank had entrusted authority to the bank’s board of directors to seek for appropriate banks and financial institutions for merger and/or acquisition and proceed for merger and/or acquire by appointing auditor for the purpose of due diligence audit. In the same spirit, the bank had reached agreement for merger process with Nepal Credit and Commerce Bank Ltd, Infrastructure Development Bank Ltd, Apex Development Bank Ltd., Supreme Development Bank and International Development Bank Ltd. on Poush 29, 2072 and

had presented the same to Nepal Rastra Bank for principle approval. Chartered accountant firm P.Y.C. and associates is appointed as due diligence auditor for the valuation of the merging banks and financial institutions. Currently, the appointed audit firm is carrying its activities and had set forth target to accomplish the DDA process by the end of Asadh 2072.

Vote of Thanks:We would like to extend our heartfelt gratitude to respected shareholders, customers, executives from Nepal Rastra Bank, Office of Company Registrar, Nepal Securities Board, Nepal Stock Exchange Ltd., CDS & Clearing Ltd., general public and all other concerned who have continuously provided their support, encouragement and guidance. We would also like to thank our statutory auditor M/s Dev Associates for conducting the audit on time and providing the bank with realistic professional advice. In addition, we wish to thank the bank’s management and staff members for considering the bank’s progress to be their own by providing dedicated services. Finally, by incorporating as its main principle the fact that bank and its customers are two sides of the same coin, and that it is due to our customers’ affection and trust that the bank has succeeded in reaching its present position. We offer our heartfelt gratitude to them with the promise to be still more committed to increase our strong relationship with our customers in the future.

Thank You,On behalf of the Board of Directors

…….............…………………………Dr. Shobha Kant Dhakal

(Director)

…….............…………………………Santosh Kumar Lama

(Chairman)

Date: Falgun 3, 2072


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ACTING CHIEF EXECUTIVEOFFICER’S MESSAGEI am privileged to be leading Kumari Bank at this juncture on your behalf. I am fully aware of the responsibilities and the trust that you have bestowed upon me and the management team to lead the bank. I can assure you that our prime focus shall be in delivering the best results and taking the bank to newer heights.

Here, I would like to mention that your bank has been able to increase its deposit base by 21.19% totaling NPR 33.42 billion and loan amount by 18.69% totaling NPR 27.07 billion in the fiscal year 2071/72. The net profit has increased by 15.55% as compared to last FY. Other financial indicators have witnessed a marked improvement including Non-Performing Loan (NPL) ratio by virtue of our tenacity and concerted efforts in the recovery process. We have continuously tried to introduce norms to establish the robust risk management process in the bank.

During the review period, the bank provided continuity on product innovation and automation of services by focusing on Kumari Swastha Jeevan Bachat Khata, Kumari Remit Bachat Khata and Personal Loans and advances. In the review period, we have been able to increase our business through Kumari Remit and tie-ups with several renowned national and international companies. Presently, we are providing quality services through 38 points of representations and 46 ATMs throughout the country.

Kumari Bank has remained committed to strengthen Corporate Social Responsibility (CSR) whereby we have been providing sponsorships to under privileged children from rural parts of Nepal. The bank has also provided financial support of NPR 50,000.00 for education to Ms. Matina Shakya, Living Goddess Kumari every

year. While in the health sector, we are conducting health camps in those areas which are deprived of good medical facilities. The bank is also contributing to number of CSR activities related to education, health and environment. Moreover, the bank has supported the earthquake victims by distributing Galvanized sheets of value NPR 5,100,000.00 in Gorkha, Dhading, Sindhupalchowk and Nawalparasi. The bank has also provided financial support to Kumari Ghar, Basantapur, Kathmandu for NPR 500,000.00 only to repair of Kumari Ghar against damage caused due to devastating earthquake dated Baisakh 12, 2072.

As in the past years, we shall continue to elevate the bank’s stature through expertise and dedication of our staff members, constant guidance and support from the board, encouragement from our shareholders and support from the regulators and our valued customers.

I would also like to mention here that recently Mr. Santosh Kumar Lama has been positioned as Chairman of the bank; who had been shouldering the bank’s responsibilities as Director for a long time.

Finally, I take this opportunity to thank our valued shareholders, regulatory bodies, NRB, customers, employees and well-wishers for their continued trust and support.

With warm regards,Rajib Giri

Acting Chief Executive Officer


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MANAGEMENT TEAMSitting, CenterMr. Rajib Giri, Acting Chief Executive Officer

Standing in First Row (Left to Right)Mr. Binod N. Shrestha, Head - Central LogisticsMr. Rajesh Shrestha, Chief Marketing OfficerMr. Rameshwar Sharma Aryal, Chief Operating OfficerMr. Angir Man Singh, Chief Risk OfficerMr. Narayan P. Ghimire, Head – Information Technology

Standing in Second Row (Left to Right)Mr. Narendra P. Chhatkuli, Head – Legal, Compliance and Company SecretaryMr. Ajit P. Bhattarai, Branch Manager, New RoadMr. Bikas Khanal, Head – Corporate CreditMr. Ganesh Kumar K.C., Head – Internal AuditMr. Rohit Singh, Head – Human Resources


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More Responsible to Services


PRODUCT REVIEW

Kumari Big Savings KhataKumari Big Savings Khata as the name suggests, provides higher rate of interest amongst the saving category product & additional banking benefits. It is the premium saving account which provides higher rate of return and value added banking services to the saving accountholders.

Kumari Smart Bachat KhataKumari Smart Bachat Khata offers account opening facility at zero balance. We believe in providing banking access to all hence, this is a very suitable account for everyone. Besides the facility to open account in zero balance, the accountholders are offered various banking facilities.

Kumari SavingsKumari Savings account is a special saving account that beholds the corporate name after “Living Goddess Kumari”. The customers can avail various value added banking services in this account.

50 Plus SavingsAs the name suggests, this saving account is targeted to all the individuals of 50 years and above. Interest rate is calculated on daily balance and provided on quarterly basis. There are attractive features associated with this account like 25% discount on locker, ATM debit card, Internet/ Mobile banking facilities, etc.

Subha Laxmi SavingsThis saving account is especially designed for the women of 16 years and above. Attractive interest rate on daily balance is provided to encourage saving habit. Besides, other features like 50% discount in locker, ATM debit card, accidental death insurance and internet/ mobile banking facilities are also offered to the customers.


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PRODUCT REVIEW

Kumari Remit Bachat KhataKumari Remit Bachat Khata is a saving deposit product targeted to the migrant workers and their relatives. It is a service via which the account holders can send their hard earned money in a safe and secured way in their account and also send payment request to the bank for the payment of fund to the beneficiary (his/ her relative) against ID details.

Twinkle Star SavingsTwinkle Star Savings is a saving account targeted to the children 16 years and below. This is an ideal account for children to instill saving habit from a very young age. Account holders are offered interest on daily balance. Children receive special gifts at the time of account opening with Kumari Bank and are eligible for special discounts on education loan as per the bank’s rule.

Kumari Flexi-Fix SchemeKumari Flexi-Fix Scheme is specially designed based on hybrid concept of flexi-fix mechanism to attract retail deposits. The customer will be able to receive facilities of a saving deposit type and earn interest similar to that of fixed deposit type. The scheme is based on “standing order” whereby a condition is applied for those applying for the scheme. The product carries special features such as:

a. Maximum Returns – As soon as the balance in saving account exceeds NPR 100,000.00, the excess sum amount, in multiples of NPR 10,000.00 will be transferred automatically to a higher interest earning non-operative account (FD).

b. Maximum Liquidity - The money parked in non-operative account (FD) as a result of the sweep from saving account can be easily accessed by issuing a cheque or through ATM etc. The amount is reversed swept from non- operative account (FD) to saving whenever the balance in saving falls short of required available balance to be maintained at all time.

c. Auto renewal facility – The Flexibility to maintain fund in non-operative account (FD) at a higher rate, can be renewed for period of 1 year and above 1 year i.e. 2 years.


PRODUCT REVIEW

Kumari Swastha Jeevan Bachat Khata Kumari Swastha Jeevan Bachat Khata (KSJBK) is a saving deposit product being introduced to promote ‘saving habit’ and ‘good health’ amongst the people. This product is being introduced with value addition of medical benefits along with modern banking services for a differentiation.

The accountholders of this product will be provided a “co-branded VISA Debit card” with privileged services and discounts in Medanta, Medicity- New Delhi, India; Norvic Hospital, Grande Hospital, Vayodha Hospital and Chirayu National Hospital based in Kathmandu, Nepal. These partner hospitals have offered discounts from 5% to 20% to KSJBK account holders on several of its services when payment is made by co-branded debit card.

In addition, the account holders of KSJBK will also receive hospitalization insurance up to a sum of NPR. 10,000 per year for free. And they also receive internet banking, ABBS without any charges as well. While the minimum balance to open KSJBK is NPR. 5,000 which provides attractive interest rates.

KBL Recurring Deposit SchemeKBL Recurring Deposit Scheme is a deposit product specifically designed to meet the saving requirement of individual customers with regular income source for specific term period of 2 to 5 years. The customers can deposit specific sum of fund on regular basis for pre-determined time period or open ended terms (in case of Institutions’ Provident Fund Deposit scheme). Major attraction of this product is the interest rate and implementation of planned or forced saving habit.

Kumari Salary Saving AccountKumari Salary Saving Account (KSSA) is a saving product specially designed for individuals with regular income (salaried people). The product focuses on making the product hassle free, easy, affordable and yet benefiting individual KSS accountholder NPR High interest rate and attractive banking service package are the key benefits provided in this product.


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CSR ACTIVITIES &SME FINANCING

Celebrating Global Money Week 2015

Scholarship program for ‘living goddess Kumari’ of Kathmandu on the occasion of its 14th anniversary, in order to give continuity to her further education. The amount of NPR 50,000.00 will be deposited every year in her saving account and upon her retirement, a lump sum amount will be granted to her for education purpose.

Jasta pata distribution in Dhading to support earthquake victims

Jasta pata distribution in Gorkha to support earthquake victims Jasta pata distribution in Nawalparasi to support earthquake victims


Krishi Sahakari Sangh Limited, Nawalparasi – Financed by Kumari Bank Ltd. Support to Kumari Ghar of NPR 500,000.00 only to renovate Kumari Ghar for destruction caused due to devastating earthquake & NPR 5,100,000.00 only for earthquake victims.

Jasta pata distribution in Sindhupalchowk to support earthquake victims Health Camp conduction in association with Indrawatee Community Service Centre (ICSC).

Kumari Bank Employees Union organized “Blood Donation Program” on the occasion of Bank’s 15th anniversary.

Kumari Bank Limited conducted ‘Financial LiteracyTraining’ in coordination with Nepal Banking Institute (NBI) as a part of its CSR activity in Budhanilkantha.Around 55 people were benefited from the training including staffs from various cooperatives and other local people of Budhanilkantha area.

More Responsible Via Network


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More Responsible in Technology


Capital and Liabilities Schedule Current Year (NPR) Previous Year (NPR)

1. Share Capital 4.1 2,699,166,532 2,431,681,560

2. Reserves and Funds 4.2 648,149,644 534,924,396

3. Debentures & Bonds 4.3 - -

4. Borrowing Outstanding 4.4 328,000,000 201,951,900

5. Deposit Liabilities 4.5 33,421,910,946 27,578,376,145

6. Bills Payable 4.6 32,782,142 22,428,891

7. Proposed Dividend Payable 14,078,156 31,755,240

8. Income Tax Liabilities - -

9. Other Liabilities 4.7 230,423,406 219,483,913

Total Capital and Liabilities 37,374,510,826 31,020,602,045

Assets Schedule Current Year (NPR) Previous Year (NPR)

1. Cash Balance 4.8 829,463,812 777,836,820

2. Balance with Nepal Rastra Bank 4.9 3,349,001,322 3,829,349,524

3. Balance with Banks/Financial Institution 4.10 812,509,759 288,499,107

4. Money at Call and Short Notice 4.11 436,880,592 507,478,409

5. Investment 4.12 4,862,590,135 3,164,625,890

6. Loans, Advances and Bills Purchase 4.13 26,246,038,476 21,898,115,132

7. Fixed Assets 4.14 259,463,477 235,775,955

8. Non Banking Assets 4.15 - -

9. Other Assets 4.16 578,563,253 318,921,208

Total Assets 37,374,510,826 31,020,602,045

Contingent Liabilities Schedule 4.17

Directors’ Declaration Schedule 4.29

Statement of Capital Fund Schedule 4.30 (A)

Statement of Risk Weighted Assets Schedule 4.30 (B)

Principal Indicators Schedule 4.31

Significant Accounting Policies Schedule 4.32

Notes to Accounts Schedule 4.33

KUMARI BANK LIMITED

Balance Sheet As at Ashad End 2072 (16 July 2015)

Schedules 4.1 to 4.17 form an integral part of the Balance Sheet.

Rajib Giri Santosh Kumar Lama Dr. Shobha Kant Dhakal Uttam P. Bhattarai Acting Chief Executive Officer Chairman Director Director

Nirmal Kumar Khatiwada Naresh Dugar Er. Binod DawadiHead– Finance, Planning & MIS Director Director As per our report of even date

Puna Ram Bhandari Rasendra Bahadur Malla CA. Rajnish Dahal Director Director Partner Dev Associates Chartered Accountants Date – 17 January 2016Place- Durbar Marg, Kathmandu


Particulars Schedule Current Year (NPR) Previous Year (NPR)

1. Interest Income 4.18 2,433,130,920 2,410,784,399

2. Interest Expenses 4.19 1,507,364,997 1,575,311,889

Net Interest Income 925,765,923 835,472,510

3. Commission and Discount 4.20 154,634,692 188,725,481

4. Other Operating Income 4.21 47,668,121 56,944,610

5. Exchange Fluctuation Income 4.22 95,251,346 85,155,477

Total Operating Income 1,223,320,081 1,166,298,078

6. Staff Expenses 4.23 284,256,955 221,701,158

7. Other Operating Expenses 4.24 253,823,364 240,120,657

8. Exchange Fluctuation Loss 4.22

Operating Profit before Provision for Possible Losses 685,239,763 704,476,263

9. Provision for Possible Losses 4.25 284,491,537 236,311,721

Operating Profit 400,748,226 468,164,542

10. Non Operating Income /(Expense) 4.26 (7,020,620) 2,540,345

11. Loan Loss Provision Written Back 4.27 228,688,373 76,151,082

Profit from Regular Activities 622,415,979 546,855,969

12. Profit/Loss from Extra-ordinary Activities 4.28 - -

Net profit after Considering All Activities 622,415,979 546,855,969

13. Provision for Staff Bonus 56,583,271 49,714,179

14. Provision for Income Tax 171,044,332 155,486,824

* Current Year’s 169,026,791 148,173,334

* Upto Previous year 5,298,717

* Deferred Tax 2,017,541 2,014,772

Net Profit/Loss 394,788,376 341,654,966

KUMARI BANK LIMITED

Profit and Loss AccountFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

Schedules 4.18 to 4.28 form an integral part of the Balance Sheet.





KUMARI BANK LIMITED

Profit and Loss Appropration AccountFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

Particulars Current Year (NPR) Previous Year (NPR)

Income

1. Accumulated Profit up to Last Year 26,270,265 4,700,386

2. This Year’s Profit 394,788,376 341,654,966

3. Exchange Fluctuation Fund

4. Bond Redemption Reserve

5. Share Premium

6. General Reserve to Capital Adjustment Fund - 400,000,000

Total 421,058,641 746,355,352

Expenses

1. Accumulated Loss up to Last Year

2. Current Year’s Loss

3. General Reserve Fund 78,957,675 68,330,993

4. Contingent Reserve

5. Institution Development Fund

6. Dividend Equalization Fund

7. Staff Related Reserves

8. Proposed Cash Dividend 14,078,156 31,755,240

9. Proposed Bonus Share 267,484,972 603,349,560

10. Capital Adjustment Fund 44,412,519

11. Special Reserve Fund

12. Exchange Fluctuation Fund 3,580,984 5,879,623

13. Bond Redemption Reserve Fund

14. Previous Year’s Tax Adjustment

15. Deferred Tax Fund (849,607) (230,329)

16. Investment Adjustment Reserve - 11,000,000

Total 407,664,700 720,085,087

17.Accumulated Profit/(Loss) 13,393,941 26,270,265





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(A). Cash Flow from Operating Activities 1,058,589,851 1,266,582,023

1. Cash Received 2,654,932,964 2,758,129,300

1.1 Interest Income 2,361,680,039 2,416,108,749

1.2 Commission and Discount Income 196,271,359 255,013,852

1.3 Income from Foreign Exchange Transaction 95,251,346 85,155,477

1.4 Recovery of Loan Written off

1.5 Other Income 1,730,221 1,851,221

2. Cash Payment (2,220,592,324) (2,131,224,225)

2.1 Interest Expenses (1,493,595,392) (1,584,428,529)

2.2 Staff Expenses (333,971,134) (221,701,158)

2.3 Office Overhead Expenses (210,531,723) (192,090,016)

2.4 Income Tax Paid (182,494,075) (133,004,522)

2.5 Other Expenses

Cash Flow before Changes in Working Capital 624,249,212 639,676,948

Increase /( Decrease) of Current Assets (5,206,880,378) (1,564,807,175)

1.(Increase)/Decrease in Money at Call and Short Notice 70,597,817 245,931,591

2. (Increase)/Decrease in Short Term Investment (651,576,893) 945,276,348

3. (Increase)/Decrease in Loans, Advances and Bills Purchase (4,271,467,947) (2,688,714,114)

4. (Increase)/Decrease in Other Assets (354,433,355) (67,301,000)

Increase /( Decrease) of Current Liabilities 5,831,129,590 2,204,484,123

1. Increase/(Decrease) in Deposits 5,843,534,801 2,259,807,343

2. Increase/(Decrease) in Certificates of Deposits

3. Increase/(Decrease) in Short Term Borrowings

4. Increase/(Decrease) in Other Liabilities (12,405,212) (55,323,220)

(B) Cash Flow from Investment Activities (1,089,348,509) 20,268,149

1. (Increase)/Decrease in Long-term Investment (1,046,387,352) 25,239,849

2. (Increase)/Decrease in Fixed Assets (66,540,243) (27,888,169)

3. Interest income from Long Term Investment 22,712,706 22,280,932

4. Dividend Income 866,381 635,536

5. Others

(C) Cash Flow from Financing Activities 126,048,100 201,951,900

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

2. Increase/(Decrease) in Share Capital - -

3. Increase/(Decrease) in Other Liabilities - -

4. Increase/(Decrease) in Refinance/Facilities received from NRB 126,048,100 201,951,900

(D) Income/Loss from Change in Exchange Rate in Cash & Bank Balances - -

(E) This Year’s Cash Flow from All Activities 95,289,442 1,488,802,071

(F) Opening Balance of Cash and Bank Balances 4,895,685,451 3,406,883,380

(G) Closing Balance of Cash and Bank Balances 4,990,974,893 4,895,685,451

KUMARI BANK LIMITED

Cash Flow StatementFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)



1. Share Capital

1.1 Authorized Capital 5,000,000,000 2,000,000,000

a) 50,000,000 Ordinary Shares of NPR 100 each 5,000,000,000 2,000,000,000

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

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

1.2 Issued Capital 2,431,681,560 1,828,332,000

a) 24,316,815.60 Ordinary Shares of NPR 100 each 2,431,681,560 1,828,332,000

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

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

1.3 Paid Up Capital 2,431,681,560 1,828,332,000

a) 24,316,815.60 Ordinary Shares of NPR100 each 2,431,681,560 1,828,332,000

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

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

1.4 Proposed Bonus Share 267,484,972 603,349,560

1.5 Calls in Advance - -

1.6 Total (1.3 + 1.4 + 1.5) 2,699,166,532 2,431,681,560

KUMARI BANK LIMITED

Share Capital and OwnershipAs at Ashad End 2072 (16 July 2015)

Schedule 4.1

Particulars Current Year Previous Year (NPR)

A. Local Shareholders % Amount (NPR) % Amount (NPR)

1.1 Government of Nepal - -

1.2 “A” Class Licensed Institution - -

1.3 Other Licensed Institutions - -

1.4 Other Institutions (promoter and public both) 5.29 128,624,745 4.78 87,352,500

1.5 General Public (promoter and public both) 94.71 2,303,056,815 95.22 1,740,979,500

1.6 Others - -

B. Foreign Shareholders

Total 100 2,431,681,560 100 1,828,332,000

Share OwnershipAs at Ashad End 2072 (16 July 2015)


SN Name of the ShareholderCurrent Year Previous Year (NPR)

% Share Capital in NPR. % Share Capital in NPR.

1 NOOR PRATAP J. B. RANA 6.50 158,059,200 6.50 118,841,400

2 AMIR PRATAP J. B. RANA 4.76 115,811,000 5.06 92,513,500

3 SABITRI GURUNG 3.00 72,881,300 3.07 56,286,700

4 BIMALA DEVI AGRAWAL 2.75 66,983,500 2.75 50,363,400

5 RISHI AGRAWAL 2.40 58,360,300 2.40 43,879,900

6 RAJENDRA PRASAD SHRESTHA 1.39 33,854,200 1.62 29,551,600

7 BIDHYA KRISHNA SHRESTHA 1.34 32,480,300 1.34 24,421,300

8 YAGYA PRATAP RANA 1.31 31,927,800 1.32 24,005,800

9 MAHABIR PRASAD GOEL 1.28 31,061,000 1.28 23,354,100

10 LAXMAN SHRESTHA 1.23 29,811,400 1.22 22,414,600

11 GOVINDA DAS SHRESTHA 1.10 26,650,500 1.09 20,038,000

12 MANJU TAPARIA 1.01 24,541,700 1.01 18,452,400

13 PHURBA BANGDEL LAMA 1.00 24,366,400 1.31 23,983,200

14 PASHUPATI MURARKA 1.00 24,337,800 0.70 12,798,300

15 PRADEEP KUMAR MURARKA 1.00 24,320,200 0.70 12,798,300

16 JANUKI KUMARI J. B. RANA 1.00 24,316,700 1.00 18,283,200

17 SANTOSH KUMAR LAMA 0.91 22,249,100 0.91 16,728,600

18 MANOJ KUMAR GOEL 0.90 21,904,400 0.88 16,089,200

19 ANUPAM RATHI 0.90 21,885,100 0.90 16,454,900

20 SHIVA SHANKER AGRAWAL 0.88 21,301,400 0.88 16,016,000

21 KUMUD KUMAR DUGAD 0.87 21,189,600 0.85 15,591,600

22 BHIM KRISHNA UDAS 0.79 19,118,200 0.79 14,374,600

23 BIRENDRA KUMAR SHAH 0.78 18,986,200 0.86 15,819,200

24 CIT CITIZEN UNIT SCHENE 0.75 18,237,600 0.75 13,712,400

25 SHREE NIWAS SHARDA 0.75 18,209,000 0.75 13,690,900

26 LIFE INSURANCE CORPORATION NEPAL LTD 0.75 18,194,300 0.75 13,679,900

27 SANJAY LAMA 0.74 17,994,700 0.74 13,629,900

28 ANIL DAS SHRESTHA 0.73 17,716,400 0.73 13,320,600

29 PRABHU INVESTMENT P LTD 0.73 17,716,100 0.74 13,420,400

30 NARESH DUGAD 0.70 17,021,700 0.70 12,798,300

31 BIKASH DUGAD 0.70 17,021,700 0.70 12,798,300

32 ASHOK KUMAR BAHETI 0.65 15,721,300 0.94 17,297,300

33 SANTOO SHRESTHA 0.61 14,881,500 0.61 11,161,100

34 JAGADISH PRASAD CHAUDHARY 0.60 14,590,000 0.60 10,969,900

35 DEV KISHAN MUDANDA 0.60 14,590,000 0.60 10,969,900

36 SHARMILA ARYAL 0.59 14,391,400 0.60 10,969,900

37 VIDUSHI RANA 0.58 14,103,700 0.58 10,604,300

38 JAMUNA MAHESWORI RATHI 0.57 13,923,100 0.55 10,072,500

39 PRAVA LAXMI RANA 0.53 12,935,700 0.59 10,726,100

40 RITA K.C. 0.52 12,749,900 0.52 9,594,000

41 UTTAM PRASAD BHATTARAI 0.50 12,158,300 0.50 9,141,600

42 RAKSHYA PAHADI 0.50 12,158,300 0.50 9,141,600

43 NIRMAL PRADHAN - 0.51 9,350,000

44 ATMARAM MURARKA - 0.60 10,988,300

Share Capital And OwnershipLIST OF SHAREHOLDERS HOLDING SHARE CAPITAL OF 1% OR MORE

As at Ashad End 2072 (16 July 2015)

ANNEXURE 1(A)


Particulars Current Year NPR Previous Year (NPR)

1. General/Statutory Reserve Fund 546,371,157 467,413,482

2. Capital Reserve Fund

3. Capital Redemption Fund

4. Capital Adjustment Fund 44,412,519 -

5. Other Reserve & Funds 20,000,000 20,849,607

a. Contingent Reserve

b. Institution Development Fund

c. Dividend Equalization Fund

d. Special Reserve Fund

e. Assets Revaluation Fund

f. Deferred Tax Reserve - 849,607

g. Other Free Fund

h. Other Reserve Fund

i. Investment Adjustment Reserve 20,000,000 20,000,000

j. Bond Redemption Reserve

6. Accumulated Profit/Loss 13,393,941 26,270,265

7. Exchange Fluctuation Fund 23,972,027 20,391,043

8. Share Premium

Total 648,149,644 534,924,396

KUMARI BANK LIMITED

Reserves and FundsAs at Ashad End 2072 (16 July 2015)

KUMARI BANK LIMITED

Debenture and BondAs at Ashad End 2072 (16 July 2015)

Schedule 4.2

Schedule 4.3


1. ……….% Bond/Debentures of Rs……..…each - -

Issued on …………… and to be matured on ……….

2. ………. - -

Total (1+2) - -


Schedule 4.4


A. Domestic

1. Government of Nepal - -

2. Nepal Rastra Bank 328,000,000 201,951,900

3. Repo Obligations - -

4. Inter Bank and Financial Institutions - -

5. Other Organized Institutions - -

6. Others - -

Total (A) 328,000,000 201,951,900

B. Foreign

1. Banks - -

2. Others - -

Total (B) - -

Total (A+B) 328,000,000 201,951,900

KUMARI BANK LIMITED

Outstanding Loan (Borrowings)As at Ashad End 2072 (16 July 2015)



1. Non-Interest Bearing Accounts

A. Current Deposit 1,446,060,927 1,237,175,209

1. Local Currency 1,380,725,206 1,202,240,826

1.1 Government of Nepal

1.2 “A” Class Licensed Institutions 17,925,801 20,131,262

1.3 Other Licensed Financial Institutions 302,149,120 255,795,690

1.4 Other Organized Institutions 893,913,938 727,511,094

1.5 Individuals 166,736,346 198,802,780

1.6 Others

2. Foreign Currency 65,335,721 34,934,383

2.1 Government of Nepal

2.2 “A” Class Licensed Institutions 5,572,724 5,061,523

2.3 Other Licensed Financial Institutions


2.5 Individuals 5,590 5,301

2.6 Others

B. Margin Deposits 207,683,932 147,197,848

1. Employees Guarantee 15,352,975

2. Guarantee Margin 72,810,868 60,202,728

3. Margin on Letter of Credit 119,520,090 86,995,120

C. Others 12,281,186 6,436,778

1. Local Currency 12,281,186 6,436,778

1.1 Financial Institutions

1.2 Other Organized Institutions

1.3 Individuals 12,281,186 6,436,778

2. Foreign Currency - -

2.1 Financial Institutions

2.2 Other Organized Institutions

2.3 Individuals

Total of Non-Interest Bearing Accounts (1) 1,666,026,045 1,390,809,835

KUMARI BANK LIMITED

Deposit LiabilitiesAs at Ashad End 2072 (16 July 2015)

Schedule 4.5



2. Interest Bearing Accounts

A. Saving Deposits 8,005,479,731 7,234,105,180

1. Local Currency 7,898,967,088 7,117,127,540

1.1 Organized Institutions 62,331,685 36,192,699

1.2 Individuals 7,836,635,403 7,080,934,841

1.3 Others


2.1 Organized Institutions

2.2 Individuals 106,512,643 116,977,640

2.3 Others

B. Fixed Deposits 14,469,717,535 12,141,754,675

1. Local Currency 14,002,357,535 11,445,625,925

1.1 Organized Institutions 11,673,164,532 9,538,004,526

1.2 Individuals 2,329,193,003 1,907,621,400

1.3 Others


2.1 Organized Institutions 457,200,000 693,720,000

2.2 Individuals 10,160,000 2,408,750

2.3 Others

C. Call Deposits 9,280,687,635 6,811,706,455

1. Local Currency 9,040,048,625 6,585,251,433

1.1 “A” Class Licensed Institutions

1.2 Other Licensed Financial Institutions 4,832,152,198 2,496,286,718

1.3 Other Organized Institutions 4,081,208,165 4,033,820,827

1.4 Individuals 126,688,262 55,143,888

1.5 Others


2.1 “A” Class Licensed Institutions

2.2 Other Licensed Financial Institutions


2.4 Individuals

2.5 Others

D. Certificate of Deposit - -

1. Organized Institutions

2. Individuals

3. Others

Total of Interest Bearing Accounts (2) 31,755,884,901 26,187,566,310

Total Deposits (1+2) 33,421,910,946 27,578,376,145

KUMARI BANK LIMITED

Deposit Liabilities (Continued….)As at Ashad End 2072 (16 July 2015)



1. Pension/Gratuity Fund - -

2. Employees Provident Fund - -

3. Employees Welfare Fund 162,972 84,820

4. Provision for Staff Bonus 56,583,271 49,714,179

5. Interest Payable on Deposits 50,397,482 36,881,320

6. Interest Payable on Borrowings 347,778 94,335

7. Unearned Discount and Commission 6,840,372 12,871,826

8. Sundry Creditors 44,009,920 37,378,646

9. Branch Reconciliation Account - -

10. Deferred Tax Liability 1,167,934 -

11. Dividend Payable 7,839,484 9,985,798

12. Others 63,074,193 72,472,989

a. Audit Fees 417,958 826,030

b. Others 62,656,235 71,646,959

Total 230,423,406 219,483,913


1. Local Currency 25,976,295 15,747,781


Total 32,782,142 22,428,891

KUMARI BANK LIMITED

Bills PayableAs at Ashad End 2072 (16 July 2015)

Schedule 4.6

Schedule 4.8

Schedule 4.7KUMARI BANK LIMITED

Other LiabilitiesAs at Ashad End 2072 (16 July 2015)


1. Local Currency (Including Coins) 815,520,186 763,020,416


Total 829,463,812 777,836,820

KUMARI BANK LIMITED

Cash BalanceAs at Ashad End 2072 (16 Jul 2015)


Schedule 4.9

Schedule 4.10

Schedule 4.11

Particulars Local CurrencyForeign Currency in equivalent NPR Current Year Total

(NPR)Previous Year

(NPR)INR Convertible FCY Total

1. Nepal Rastra Bank 3,349,001,322 3,829,349,524

a. Current Account 3,339,668,897 9,332,425 9,332,425 3,349,001,322 3,829,349,524

b. Other Account - - -

KUMARI BANK LIMITED

Balance with Nepal Rastra BankAs at Ashad End 2072 (16 July 2015)


1. Local Currency - -


Total 436,880,592 507,478,409

Particulars Local CurrencyForeign Currency in Rupee equivalent Current Year

(NPR)Previous Year

(NPR)INR. Convertible FCY Total

1. Local Licensed Institutions

169,571,096 - 4,592,766 4,592,766 174,163,862 110,260,147

a. Current Account 169,571,096 4,592,766 4,592,766 174,163,862 110,260,147


2. Foreign Banks - 222,574,347 415,771,549 638,345,896 638,345,896 178,238,961

a. Current Account 222,574,347 415,771,549 638,345,896 638,345,896 178,238,961


Total 169,571,096 222,574,347 420,364,315 642,938,662 812,509,759 288,499,107

KUMARI BANK LIMITED

Balance with Banks/Financial InstitutionAs at Ashad End 2072 (16 July 2015)

KUMARI BANK LIMITED

Money at Call and Short NoticeAs at Ashad End 2072 (16 July 2015)


ParticularsPurpose

Current Year (NPR) Previous Year (NPR)Trading Other

1. Treasury Bills of Nepal Government - 2,570,072,292 2,570,072,292 2,368,403,910

2. Saving Certificate of Nepal Government - - -

3. Other Bonds of Nepal Government - 1,335,670,164 1,335,670,164 289,282,812

4. Nepal Rastra Bank Bonds - - -

5. Foreign Bonds - - -

6. Local Licensed Institutions - - -

7. Foreign Banks - 931,912,179 931,912,179 482,003,668

8. Shares of Organized Institutions - 24,935,500 24,935,500 24,935,500

9. Bonds and Debentures in Organized Institutions - - -

10. Other Investment - - -

Total Investment - 4,862,590,135 4,862,590,135 3,164,625,890

Provision - - - -

Net Investment - 4,862,590,135.00 4,862,590,135 3,164,625,890

KUMARI BANK LIMITED

InvestmentAs at Ashad End 2072 (16 July 2015)

Schedule 4.12

Schedule 4.12 (A)

Particulars Par value (NPR)

Market Value (NPR)

Provision (NPR)

Current Year (NPR)

Previous Year (NPR)

1. Investment in Shares 24,935,500 - - 24,935,500 24,935,500

1.1 Credit Information Centre Limited 1,235,500 - - 1,235,500 1,235,500

36,599 Ordinary Shares of NPR 100 each, fully paid

Primary Shares 3530 Kitta of NPR 100 each

Right Shares 8825 Kitta of NPR 100 each

Bonus Shares 24,244 Kitta of NPR 100 each

1.2 Nepal Clearing House Limited 2,500,000 - - 2,500,000 2,500,000

1.3 National Banking Training Institute 1,200,000 - - 1,200,000 1,200,000

1.4 National Micro Finance Bank Limited 20,000,000 - - 20,000,000 20,000,000

2. Investment in Debentures and Bonds - - - - -

Total Investment 24,935,500 - - 24,935,500 24,935,500

3. Provision for Loss

3.1 Up to previous year - - - - -

3.2 Change in current year - - - - -

Total Provision - - - - -

Net Investment 24,935,500 - - 24,935,500 24,935,500

KUMARI BANK LIMITED

Investment in Shares, Debentures and BondsAs at Ashad End 2072 (16 July 2015)


Schedule 4.12.1

Schedule 4.12.2

Particulars Par Value

Last Market Price (A)

Current Market Price

(B)

This Year Previous Year (NPR) Remarks

Gain / Loss (B-A) Gain / Loss (NPR)

1. Treasury Bill of Nepal Government - - - - -

2. Saving Bond of Nepal Government - - - - -

3. Other Bond of Nepal Government - - - - -

4. NRB Bond - - - - -

5. Foreign Bond - - - - -

6. Shares of Domestic Licensed Institutions

- - - - -

7. Debenture & Bonds of Domestic Licensed Institutions

- - - - -

8. Shares, Debentures & Bonds of Domestic Institutions

- - - - -

9. Placement in Foreign Banks - - - - -

10. Interbank Lending - - - - -

11. Other Investments - - - - -

Total Investment - - - - -

Particulars Par Value (A) Cumulative Loss (B)

Current Year Loss (C)

This Year Previous Year (NPR)

Remarks Gain / Loss

(A-B-C) Gain / Loss (NPR)

1. Treasury Bill of Nepal Government

2,570,072,292 - - - 2,368,403,910

2. Saving Bond of Nepal Government

- - - - -

3. Other Bond of Nepal Government

1,335,670,164

- - - 289,282,812

4. NRB Bond - - - - -

5. Foreign Bond - - - - -

6. Shares of Local Licensed Institutions

- - - - -

7. Debenture & Bonds of Local Licensed Institutions

- - - - -

8. Shares, Debentures & Bonds of Local Organised Bodies

- - - - -

9. Placement in Foreign Banks 931,912,179 - - - 482,003,668

10. Other Investments - - - - -

Total Investment 4,837,654,635 - - - 3,139,690,390

KUMARI BANK LIMITED

Investment Held for TradingAs at Ashad End 2072 (16 July 2015)

KUMARI BANK LIMITED

Investment Held to MaturityAs at Ashad End 2072 (16 July 2015)


Particulars Par Value (A) Closing Market

Price (A)

Prevailing Market

Price (B)

Current Year Previous Year (NPR)

Remarks Adjustment

Reserve (B - A) Gain / Loss (NPR)

1. Treasury Bill of Nepal Government

- - - -

2. Saving Bond of Nepal Government

- - - -

3. Other Bond of Nepal Government - - - -

4. NRB Bond - - - -

5. Foreign Bond - - - -

6. Shares of Domestic Licensed Institutions

- - - -

7. Debenture & Bonds of Domestic Licensed Institutions

- - - -

8. Shares, Debentures & Bonds of Domestic Corporate Bodies

24,935,500 - - 24,935,500

9. Placement in Foreign Banks - - -

10. Other Investments - - - -

Total Investment 24,935,500 - - 24,935,500

Schedule 4.12.3KUMARI BANK LIMITED

Investment Available for SaleAs at Ashad End 2072 (16 July 2015)


Sche

dule

4.1

3

KU

MAR

I BAN

K L

IMIT

ED

Clas

sific

atio

n of

Loa

ns, A

dvan

ces

and

Bill

s Pu

rcha

se &

Pro

visi

onAs

at A

shad

End

207

2 (1

6 Ju

ly 2

015)

Par

ticul

ars

Loa

ns &

Adv

ance

s B

ills

Purc

hase

d/D

isco

unte

d

Curr

ent Y

ear

(NPR

) P

revi

ous

Year

(N

PR)

Dom

estic

Fore

ign

Tot

al

Dom

estic

F

orei

gn

Tot

al

Prio

rity

Sect

or

Oth

er

Insu

red

Uni

nsur

ed

1. P

erfo

rmin

g Lo

an

-

1,15

4,04

0,86

7

25,1

95,8

61,3

59

-

26,3

49,9

02,2

26

39,2

35,0

00

7,25

4,32

7

46,4

89,3

27

26,3

96,3

91,5

53

21,8

90,1

88,5

12

1.

1 Pa

ss

1,15

4,04

0,86

7

24,8

86,7

81,0

95

-

26,0

40,8

21,9

62

39,2

35,0

00

7,25

4,32

7

46,4

89,3

27

26,0

87,3

11,2

88

21,8

90,1

88,5

12

1.

2 W

atch

Lis

t -

30

9,08

0,26

5

-

309,

080,

265

-

-

-

30

9,08

0,26

5

-

2. N

on-P

erfo

rmin

g Lo

an

-

664

,706

67

3,33

4,20

0

-

673,

998,

907

-

-

-

67

3,99

8,90

7

918,

314,

503

2.

1 R

estr

uctu

red

66,6

89,2

28

66,6

89,2

28

-

-

-

66,6

89,2

28

68,7

32,0

63

2.

2 Su

b-St

anda

rd

49,9

18,5

49

49,9

18,5

49

-

-

-

49,9

18,5

49

49,7

85,5

17

2.

3 D

oubt

ful

41,8

19,3

10

41,8

19,3

10

-

-

-

41,8

19,3

10

258,

697,

625

2.

4 Lo

ss

664

,706

51

4,90

7,11

4

515,

571,

821

-

-

-

51

5,57

1,82

1

541,

099,

299

A. T

otal

Loa

n -

1,

154,

705,

573

25

,869

,195

,559

-

27

,023

,901

,133

39

,235

,000

7,

254,

327

46

,489

,327

27

,070

,390

,460

22

,808

,503

,015

3. L

oan

Loss

Pro

visi

on

3.

1 Pa

ss

-

11,

540,

409

24

8,86

7,81

1

-

260,

408,

220

39

2,35

0

72,5

43

464,

893

26

0,87

3,11

3

218,

901,

885

3.

2 W

atch

Lis

t -

-

6,

181,

605

-

6,

181,

605

-

-

-

6,

181,

605

3.

3 R

estr

uctu

red

-

-

8,33

6,15

3

-

8,33

6,15

3

-

-

-

8,33

6,15

3

8,59

1,50

8

3.

4 Su

b-St

anda

rd

-

-

12,4

79,6

37

-

12,4

79,6

37

-

-

-

12,4

79,6

37

12,4

46,3

79

3.

5 D

oubt

ful

-

-

20,9

09,6

55

-

20,9

09,6

55

-

-

-

20,9

09,6

55

129,

348,

812

3.

6 L

oss

-

664

,706

51

4,90

7,11

4

-

515,

571,

821

-

-

-

51

5,57

1,82

1

541,

099,

299

B. T

otal

Pro

visi

onin

g -

1

2,20

5,11

5

811,

681,

976

-

82

3,88

7,09

1

392,

350

72

,543

46

4,89

3

824,

351,

984

91

0,38

7,88

3

4. P

rovi

sion

ing

up to

prev

ious

ye

ar

4.

1 Pa

ss

-

9,9

31,3

91

208,

825,

456

-

21

8,75

6,84

7

11,0

00

134,

038

14

5,03

8

218,

901,

885

19

3,43

1,42

3

4.

2 W

atch

Lis

t

4.

3 R

estr

uctu

red

-

-

8,59

1,50

8

-

8,59

1,50

8

-

-

-

8,59

1,50

8

-

4.

4 Su

b-St

anda

rd

-

-

12,4

46,3

79

-

12,4

46,3

79

-

-

-

12,4

46,3

79

5,86

6,85

3

4.

5 D

oubt

ful

-

-

129,

348,

812

-

12

9,34

8,81

2

-

-

-

129,

348,

812

20

2,00

6,49

1

4.

6 Lo

ss

-

664

,706

54

0,43

4,59

2

-

541,

099,

299

-

-

-

54

1,09

9,29

9

349,

166,

251

C. T

otal

pro

visi

on till

last

yea

r -

1

0,59

6,09

8

899,

646,

747

-

91

0,24

2,84

5

11,0

00

134,

038

14

5,03

8

910,

387,

883

75

0,47

1,01

8

D. W

ritte

n B

ack

from

last

yea

r pr

ovis

ion

-

-

(134

,221

,990

) -

(1

34,2

21,9

90)

-

-

-

(134

,221

,990

)(7

2,65

7,67

8)

E. A

dditi

onal

Pro

visi

on in

thi

s ye

ar

-

1,60

9,01

8

46,2

57,2

19

-

47,8

66,2

36

381,

350

(6

1,49

5)31

9,85

5

48,1

86,0

91

232,

574,

543

Chan

ge in

this

yea

r -

1,

609,

018

(8

7,96

4,77

1) -

(8

6,35

5,75

4)38

1,35

0

(61,

495)

319,

855

(8

6,03

5,89

9)15

9,91

6,86

5

Net

Loa

n (A

-B)

1,14

2,50

0,45

8

25,0

57,5

13,5

84

-

26,2

00,0

14,0

42

38,8

42,6

50

7,18

1,78

4

46,0

24,4

34

26,2

46,0

38,4

76

21,8

98,1

15,1

32



A. Secured

1. Against Security of Movable/Immovable Assets 25,244,715,236 21,943,331,334

2. Against Guarantee of Local Licensed Institutions

3. Against Government Guarantee 147,321,989 146,702,311

4. Against Guarantee of Internationally Rated Bank

5. Against Security of Export Documents

6. Against Security of Fixed Deposit Receipts 104,968,292 101,432,866

a. Own FDR 104,968,292 101,432,866

b. FDR of Other Licensed Institutions

7. Against Security of Government Bonds

8. Against Counter Guarantee

9. Against Personal Guarantee

10. Against Other Securities 1,573,384,943 617,036,504

B. Unsecured - -

Total 27,070,390,460 22,808,503,015

Schedule 4.13 (A)KUMARI BANK LIMITED

Security for Loan, Advances and Bills PurchasedAs at Ashad End 2072 (16 July 2015)


Sche

dule

4.1

4K

UM

ARI B

ANK

LIM

ITED

Fixe

d As

sets

As a

t Ash

ad E

nd 2

072

(16

July

201

5)

Par

ticu

lars

AS

SE

TS

Cur

rent

Yea

r (N

PR

) P

revi

ous

Year

(N

PR

) B

uild

ing

Vehi

cles

Mac

hine

ry

Offi

ceE

quip

men

t O

ther

s

1.

Cos

t P

rice

a

. P

revi

ous

Year

’s B

alan

ce4,8

14,0

41

114,1

61,0

58

-

2

91

,99

7,7

37

44

,304

,268

4

55

,27

7,1

04

4

43

,03

9,3

32

b

. A

ddit

ion

This

Yea

r2

7,5

48

,12

6

32

,32

9,2

94

5

9,8

77

,42

0

31

,15

9,9

57

c

. R

eval

uati

on/W

rite

Bac

k Th

is Y

ear

-

-

d

. Th

is Y

ear

Sol

d(1

0,9

00,0

00)

(95

6,4

90

) (

11

,85

6,4

90

) (

18

,92

2,1

85

)

e

. Th

is Y

ear

Wri

tte

Off

-

-

Tota

l Cos

t (a

+b+c

+d+e

)4,

814,

041

130,8

09,1

84

-

3

23

,37

0,5

41

44

,304

,268

5

03

,29

8,0

34

4

55

,27

7,1

04

2.

Dep

reci

atio

n

a

. U

p to

pre

viou

s ye

ar1,5

64,2

77

5

1,7

15

,06

9

-

22

7,4

68

,24

6

37,4

70,0

93

31

8,2

17

,68

5

29

1,7

72

,60

2

b

. Fo

r th

is y

ear

16

2,4

88

1

2,5

39

,10

9

18

,96

5,4

27

2

,74

4,3

39

3

4,4

11

,36

3

38

,46

8,8

43

c

. D

epre

ciat

ion

on R

eval

uati

on/W

rite

off

(3,8

27

,35

2)

(84

7,2

78

) (

4,6

74

,63

0)

(1

2,0

23

,75

7)

d

. D

epre

ciat

ion

Adj

usm

ent/

Add

bac

k -

-

Tota

l Dep

reci

atio

n (a

+b+c

+d)

1,72

6,76

6 6

0,4

26

,82

6

-

24

5,5

86

,39

4

40,2

14,4

32

34

7,9

54

,41

7

31

8,2

17

,68

8

3.

Boo

k Va

lue

(WD

V*)

(1-2

)3,

087,

276

70

,38

2,3

58

-

7

7,7

84

,14

7

4,0

89

,83

5

15

5,3

43

,61

7

13

7,0

59

,41

7

4.

Land

-

-

-

-

-

85

,59

3,6

35

8

5,5

93

,63

5

5.

Cap

ital

Wor

k In

Pro

gres

s (p

endi

ng C

apit

aliz

atio

n) -

-

-

-

-

2

61

,36

9

26

1,3

69

6.

Leas

ehol

d A

sset

s -

-

-

-

-

1

8,2

64

,85

6

12

,86

1,5

34

Tota

l (3

+4+5

+6)

25

9,4

63

,47

7

23

5,7

75

,95

5

Leas

ehol

d D

etai

ls C

urre

nt Y

ear

(NP

R)

Ope

ning

Val

ue -

Gro

ss 9

8,1

17

,58

4

Add

- A

ddit

ion

Dur

ing

the

Year

13

,86

2,0

72

Less

- W

rite

Off

/Sal

es D

urin

g th

e Ye

ar (

4,5

18

,77

2)

Tota

l Cos

t 1

07

,46

0,8

84

Acc

umila

ted

Dep

reci

atio

n U

p to

Las

t Ye

ar 8

5,2

56

,04

9

Dep

reci

atio

n fo

r C

urre

nt Y

ear

8,4

04

,64

2

Tota

l Dep

reci

atio

n on

Ass

et W

rite

Off

/Sal

e (

4,4

64

,66

3)

Tota

l Dep

reci

atio

n 8

9,1

96

,02

8

Bal

ance

at

the

End

of

the

Year

18

,26

4,8

56

* W

ritte

n D

own

Valu

e


Name & Address of Borrower or Party

Acquired Date of Non

Banking Asset

Total Amount of Non Banking

Asset

Provision for loss Net Non Banking Asset (NPR)

Previous Year (NPR)Percent Amount

(NPR)

Sarita Rajbhandari (Vaidhya) 4-Dec-12 5,209,800 100 5,209,800 - 5,216,247

Sarita Rajbhandari (Vaidhya) 31-Mar-13 6,447 100 6,447 -

Shilu Housing and Developers Pvt Ltd

5-Jul-13 52,795,000 100 52,795,000 - 52,795,000

Opportunity Manpower Service 27-Jan-14 2,892,225 100 2,892,225 - 2,892,225

Everest Floriculture Pvt.Ltd. 5-Apr-15 20,546,677 100 20,546,677 -

Aayusha Developers 5-Jul-15 135,124,850 100 135,124,850 -

Total 216,574,998 216,574,998 - 60,903,472

Schedule 4.15

Schedule 4.16

KUMARI BANK LIMITED

Non Banking AssetsAs at Ashad End 2072 (16 July 2015)


1. Stock of Stationery 5,605,510 3,142,044

2. Income receivable on Investment 12,422,551 5,118,022

3. Accrued Interest Receivable on Loan 41,433,647 15,281,297

Accrued Interest Receivable on Loan 252,895,774 295,316,052

Less:Interest Suspense Account (211,462,127) (280,034,755)

4. Commission Receivable - -

5. Sundry Debtors 15,511,818 8,269,618

6. Staff Loan & Advances 207,019,813 183,878,752

7. Pre Payments 15,783,855 16,259,490

8. Cash in Transit - -

9. Other Transit items (including Cheques) - -

10. Drafts payment without notice - -

11. Expenses not written off - -

12. Branch Reconciliation Account 86,002 500

13. Deferred Tax Assets 849,607

14. Others 280,700,058 86,121,878

a. Advance Tax (net) 26,142,097 12,013,147

b. Others 254,557,962 74,108,731

Total 578,563,253 318,921,208

KUMARI BANK LIMITED

Other AssetsAs at Ashad End 2072 (16 July 2015)


Schedule 4.16(A)

Schedule 4.17

ParticularsCurrent Year (NPR) Previous Year

(NPR)Up to 1 Year 1 to 3 Year Above 3 Years Total

1. Accrued Interest Receivable on Loan 107,216,377 69,216,729 76,462,669 252,895,774 295,316,052

2. Drafts Payment without notice - -

3. Branch Reconciliation Account 86,002 86,002 500

4. Domestic/Foreign Agency Account - -

KUMARI BANK LIMITED

Other Assets (Additional Statement)As at Ashad End 2072 (16 July 2015)


1. Claims Lodged but not accepted by the Institution - -

2. Letter of Credit (Full Amount) 2,152,476,622 1,563,482,460

a. Maturity period up to 6 months 980,633,705 981,827,687

b. Maturity period more than 6 months 1,171,842,917 581,654,773

3. Rediscounted Bills -

4. Unmatured Guarantees/Bonds 1,069,670,702 882,691,809

a. Bid Bonds 55,148,500 34,605,053

b. Performance Bonds 1,014,522,202 848,086,756

c. Other Guarantee/Bonds

5. Unpaid Shares Investment - -

6. Outstanding of Forward Exchange Contract Liabilities 1,870,505,918 563,686,099

7. Bills under Collection

8. Acceptance & Endorsement 410,780,664 317,542,960

9. Underwriting Commitment

10. Irrevocable Loan Commitment 1,210,163,679 1,118,154,971

11. Guarantees against Counter Guarantee of Internationally Rated Banks

12. Advance Payment Guarantee 446,300,237 358,401,412

13. Financial Guarantee for loan disbursement

14. Contingent Liabilities on Income Tax

15. Others

KUMARI BANK LIMITED

Contingent LiabilitiesAs at Ashad End 2072 (16 July 2015)



A. On Loans, Advances and Overdraft 2,384,355,840 2,323,992,056

1. Loans & Advances 1,456,557,650 1,342,659,310

2. Overdraft 927,798,191 981,332,747

B. On Investment 41,231,293 81,000,936

1. Government Securities 41,231,293 81,000,936

a. Treasury Bills 18,518,587 58,720,004

b. Development Bonds 22,712,706 22,280,932

c. National Saving Certificates

2. Foreign Debt Papers - -

a. ……… - -

b. ……… - -

3. Nepal Rastra Bank Bonds - -

4. Debenture & Bonds -

5. Interest on Interbank Investment - -

a. Bank/ Financial Institutions - -

b. Other Institutions - -

C. On Agency Balances 407,238 438,704

1. Domestic Banks/ Financial Institutions - -

2. Foreign Banks 407,238 438,704

D. On Money at Call and Short Notice 7,136,550 5,352,704

1. Domestic Banks/Financial Institutions 3,664,183 1,046,270

2. Foreign Banks 3,472,367 4,306,434

E. On Others - -

1. Certificate of Deposits - -

2. Inter-Bank/ Financial Institution Loan - -

3. Others - -

Total 2,433,130,920 2,410,784,399

KUMARI BANK LIMITED

Interest IncomeFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

Schedule 4.18


Schedule 4.19


A. On Deposit Liabilities 1,506,003,864 1,574,507,984

1. Fixed Deposits 875,950,202 943,819,484

1.1 Local Currency 864,002,347 914,271,994

1.2 Foreign Currency 11,947,855 29,547,491

2. Saving Deposits 248,500,598 291,086,737

2.1 Local Currency 246,246,200 288,963,778


3. Call Deposits 381,553,065 339,601,762

3.1 Local Currency 375,868,731 335,238,757


4. Certificate of Deposits -

B. On Borrowings 1,361,133 803,905

1. Debentures & Bonds

2. Loan from Nepal Rastra Bank 1,361,133 803,905

3. Inter Bank /Financial Institutions Borrowing

4. Other Organized Institution

5. Other Loans

C. On Others - -

1. - -

2. - -

Total 1,507,364,997 1,575,311,889

KUMARI BANK LIMITED

Interest ExpensesFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)



1. Safe Deposit Lockers Rental 2,215,454 1,769,948

2. Issue & Renewals of Credit Cards

3. Issue & Renewals of ATM Cards 28,422,535 31,728,102

4. Telex / T. T./ SWIFT 4,515,714 4,445,123

5. Service Charges

6. Renewal Fees

7. Others 12,514,418 19,001,437

Total 47,668,121 56,944,610


A. Bills Purchase & Discount 341,008 1,158,472

1. Local 341,008 1,158,472

2. Foreign

B. Commission 51,965,227 47,647,185

1. Letters of Credit 15,636,883 14,706,216

2. Guarantees 17,439,721 15,164,234

3. Collection Fees 1,062,010 917,111

4. Remittance Fees 17,826,614 16,859,624

5. Credit Card

6. Share Underwriting/Issue

7. Government Transactions

8. E. Pra. Commission

9. Exchange Fee

C. Others 102,328,457 139,919,824

Total 154,634,692 188,725,481

KUMARI BANK LIMITED

Commission and Discount IncomeFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

KUMARI BANK LIMITED

Other Operating IncomeFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

Schedule 4.20

Schedule 4.21


KUMARI BANK LIMITED

Exchange Fluctuation Gain/LossFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

KUMARI BANK LIMITED

Expenses Relating to EmployeesFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

Schedule 4.22

Schedule 4.23


1. Salary 122,383,187 98,895,813

2. Allowances 79,977,791 63,131,407

a. Normal Allowance 37,565,922 29,950,802

b. Inchargeship Allowance 185,677 88,057

c. Relocation Allowance 333,462 364,767

d. Outstation Allowance 5,809,251 3,939,517

e. Dashain Allowance 11,074,130 10,829,686

f. Vehicle Maintenance Allowance 705,973 741,180

g. Leave Fare Allowance 23,640,954 17,165,505

h. International Deputation Allowance 662,420 51,893

3. Contribution to Provident Fund 12,033,321 9,748,444

4. Training Expenses 1,680,076 2,922,712

5. Uniform 3,101,195 2,479,296

6. Medical 8,230,016 7,650,418

7. Insurance 6,737,030 7,477,821

8. Gratuity Expenses 31,738,572 13,317,642

9. Others 18,375,767 16,077,604

a. Wages 7,031,589 5,978,149

b. Teller Risk Fund 804,477 889,454

c. Other Staff Benefits 3,603,501 3,003,575

d. Overtime 6,936,201 6,206,426

Total 284,256,955 221,701,158


a. From Revaluation 14,323,937 23,518,491

b. From Trading (except Exchange Fees) 80,927,408 61,636,986

Total Gain (Loss) 95,251,346 85,155,477



1. House Rent 59,544,865 55,744,270

2. Electricity & Water 18,832,223 18,430,039

3. Repair & Maintenance 1,969,128 1,640,955

a. Building 407,592 426,455

b. Vehicles 1,561,537 1,214,500

c. Others

4. Insurance 10,185,811 10,667,741

5. Postage, Telex, Telephone & Fax 17,919,152 18,625,371

6. Office Equipment, Furniture and Repair 4,326,106 4,074,115

7. Travelling Allowances & Expenses 1,864,106 1,574,625

8. Stationery & Printing 6,830,651 6,207,993

9. Periodicals & Books 524,568 498,919

10. Advertisements 6,554,921 5,402,097

11. Legal Expenses 763,652 920,788

12. Donations 5,127,500 6,000

13. Expenses relating to Board of Directors 3,632,860 2,291,800

a. Meeting Fees 3,175,033 2,104,300

b. Other Expenses 457,826 187,500

14. Annual General Meeting Expenses 759,603 688,181

15. Expenses relating to Audit 948,327 892,904

a. Audit Fees 423,581 403,410

b. Other Expenses 524,746 489,494

16. Commission on Fund Transfer - -

17. Depreciation on Fixed Assets 42,816,005 48,030,641

18. Amortization of Pre-operating Expenses - -

19. Share Issue expenses - -

20. Technical Services Reimbursment - -

21. Entertainment Expenses - -

22. Written Off Expenses - -

23. Security Expenses 25,547,199 23,760,319

24. Credit Guarantee Premium

25. Commission & Discount

26. Others 45,676,686 40,663,900

a. Transport 8,012,460 8,858,881

b. Professional Fees 432,684 1,570,610

c. Public Relation Expenses 1,349,747 923,827

d. Correspondent Banking Charges 960,135 435,998

e. Fees and Taxes 31,255,939

25,892,677

f. Miscellaneous 1,161,247 591,080

g. Janitorial 2,504,474 2,390,827

Total 253,823,364 240,120,657

KUMARI BANK LIMITED

Other Operating ExpensesFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

Schedule 4.24


KUMARI BANK LIMITED

Provision for Possible LossesFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

KUMARI BANK LIMITED

Non-Operating Income / LossFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

KUMARI BANK LIMITED

Write Back from Provision for Possible Losses(Fiscal Year 2014/15)

Schedule 4.25

Schedule 4.26

Schedule 4.27


1. Increase in Loss Provision on Loans 142,652,474 234,189,383

2. Increase in Provision for Loss on Investment

3. Provision for loss on Non-Banking Assets 141,839,063 2,122,338

4. Provision for Other Assets

Total 284,491,537 236,311,721


1. Provision for Loan Loss Written Back 228,688,373 74,272,518

2. Provision against Non Banking Assets Written Back 1,878,565

3. Provision for Investment Written Back

4. Provision for other Assets Written Back

Total 228,688,373 76,151,082


1. Profit/ (Loss) on Sale of Investments

2. Profit/ (Loss) on Sale of Assets (6,120) (10,380)

3. Dividend 866,381 635,536

4. Subsidies received from Nepal Rastra Bank - -

a. Compensation for losses of specified branches - -

b. Interest Compensation - -

c. Exchange Counter - -

5. Others (7,880,881) 1,915,189

Net Non-Operating Income (Loss) (7,020,620) 2,540,345


Particulars Current Year NPR Previous Year NPR

1. Recovery of Written Off Loan - -

2. Voluntary Retirement Expenses - -

3. Irrecoverable Loan Write Off (4.28 (A)) - -

4. Other Expenses/Income - -

5. ……………………………………………… - -

Total - -

S.N.Types of

Loan Written off

Amount Type of Security

& Value

Basis of Valuation of Collateral

Loan Approving Authority &

Level

Initiations Made for Recovery

Remarks

1 Consortium Term Loan

9,581,198 Land and Building

Panchikrit mulya conducted by representative of CDO office, Malpot office, VDC office and local in coordination of lead Bank

Suman Joshi, AGM

Being the loan financed under consortium participated by 7 financial institutions, the recovery process has been carried out in joint effort lead by HBL comprising of publishing call notice, auction notice, booking into NBA and filing case at DRT.

-

Total 9,581,198 396,318,500

KUMARI BANK LIMITED

Income/ (Expenses) from Extra Ordinary TransactionsFrom 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)

KUMARI BANK LIMITED

Statement of Loan Written-OffFiscal Year 2071/72 (2014/15)

Schedule 4.28

Schedule 4.28(A)


KUMARI BANK LIMITED

Statement of Loans and Advances Extended to Directors /Chief Executive / Promoters / Employees and Shareholders

As at Ashad End 2072 (16 July 2015)

Schedule 4.29

Amount in NPR

Name of Promoter/Director/Chief Executive

Outstanding up to Last Year

Recovered in Current Year

Additional Lending in this year

Outstanding as of Ashad End 2071

Principal Interest Principal Interest Principal Interest

A. Directors

1. ……………………

2. ……………………

3. ……………………

B. Chief Executive

1. ……………………

2. ……………………

C. Promoter

D. Employee

E. Shareholders

Total

The Statement of amount included under total amount of Bills Purchased and Discounted, Loans, Advances and Overdraft, provided to the Directors, Chief Executive, Promoters, Employees, Shareholders and the individual members of ‘ their undivided family’ or against the guarantee of such person or to the organisation or, companies in which such individual are ‘managing agent’ are as follows:


1.1. RISK WEIGHTED EXPOSURES This Year (NPR) Previous Year (NPR)

a Risk Weighted Exposure for Credit Risk 29,448,841 24,136,981

b Risk Weighted Exposure for Operational Risk 1,800,154 1,633,844

c Risk Weighted Exposure for Market Risk 89,998 170,673

Adjustments under Pillar II 31,338,993 25,941,498

Add: 3% of the total RWE due to non compliance to Disclosure Requirement

Addition to RWE as per supervisiory review (3%) 940,170 778,245

Add RWE equvalent to reciprocal of capital charge of 2 % of gross income. 239,377 256,105

Add: ...% of Total Deposit due to Insufficient Liquid Assets

Total Risk Weighted Exposure (After Bank’s adjustment of Pillar II) 32,518,540 26,975,848

1.2. CAPITAL This Year (NPR) Previous Year (NPR)

Core Capital (Tier I) 3,214,663 2,926,215

a Paid Up Equity Share Capital 2,431,682 1,828,332

b Irredeemable Non- cumulative Preference Share

c Share Premium - -

d Proposed Bonus Equity Share 267,485 603,350

e Statutory General Reserves 546,371 467,413

f Retained Earnings/Loss till Previous Year 13,394 26,270

g Un-audited current period profit/(loss) ( after all provision including tax) -

h Capital Redemption Reserve - -

i Capital Adjustment Reserve 44,413 -

j Dividend Equalization Reserves

k Other Free Reserves

l Less: Deffered Tax Assets - 850

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

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 and building in excess of limit and unutilised (88,681)

u Less: Other Deduction

Adjustments under Pillar II - -

Less: Shortfall in Provision

Less: Loans & Facilities Extended to Related Parties & Restricted Lending

KUMARI BANK LIMITED

Table of Capital FundEnd of Ashad 2072 (16 July 2015)

Schedule 4.30(A)


Supplementary Capital (Tier II) 311,027 259,293

a Cumulative and/or Redemable Preference Share

b Subordinated term debt - -

c Hybrid Capital Instruments

d General Loan Loss provision 267,055 218,902

e Exchange Equalization Reserve 23,972 20,391

f Investment Adjustment Reserve 20,000 20,000

g Assets Revaluation Reserve

h Other Reserve

Total Capital Fund (Tier I and Tier II) 3,525,690 3,185,508

1.3 CAPITAL ADEQUACY RATIOS Current Period Previous Year (NPR)

Tier I Capital to Total Risk Weighted Exposure (After Bank’s adjustment of Pillar II) 9.89 10.85

Tier I and Tier II Capital to Total Risk Weighted Exposure (After Bank’s adjustment of Pillar II)

10.84 11.81


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D

omes

tic

Cou

nter

part

y1

,06

9,6

71

59

,37

3

1,0

10

,29

8

50

% 5

05

,14

9

84

1,0

23

4

20

,51

2

Fore

ign

coun

terp

arty

EC

A R

atin

g 0

-1

-

20

% -

-

-

Fore

ign

coun

terp

arty

EC

A R

atin

g 2

-

50

% -

-

-

Fore

ign

coun

terp

arty

EC

A R

atin

g 3

-6 -

10

0%

-

-

-

Fore

ign

coun

terp

arty

EC

A R

atin

g 7

-

15

0%

-

-

-

Und

erw

riti

ng c

omm

itm

ents

-

50

% -

-

-

Lend

ing

of B

ank’

s S

ecur

itie

s or

Pos

ting

of

Sec

urit

ies

as

colla

tera

l -

10

0%

-

-

-

Rep

urch

ase

Agr

eem

ents

, A

sset

s sa

le w

ith

reco

urse

-

10

0%

-

-

-

Adv

ance

Pay

men

t G

uara

ntee

44

6,3

00

6,4

24

4

39

,87

6

10

0%

43

9,8

76

3

52

,17

6

35

2,1

76

Fina

ncia

l Gua

rant

ee -

10

0%

-

-

-

Acc

epte

nce

and

End

rose

men

ts4

10

,78

1 1

7,1

39

3

93

,64

2

10

0%

39

3,6

42

3

05

,03

8

30

5,0

38


Unp

aid

port

ion

of P

artl

y pa

id s

hare

s an

d se

curi

ties

-

10

0%

-

-

-

Irre

voca

ble

Cre

dit

Com

mit

men

ts (

shor

t te

rm)

1,2

10

,16

4 1

,21

0,1

64

2

0%

24

2,0

33

1

,11

8,1

55

2

23

,63

1

Irre

voca

ble

Cre

dit

Com

mit

men

ts (

long

ter

m)

-

50

% -

-

-

Oth

er C

onti

ngen

t Li

abili

ties

-

10

0%

-

-

-

Unp

aid

Gua

rant

ee C

laim

s2

00

% -

-

Tota

l7

,15

9,8

98

-

14

1,4

30

7,0

18

,46

72

,53

4,4

62

4,6

94

,39

11

,83

2,3

40

Tota

l RW

E f

or C

redi

t R

isk

befo

re A

djus

tmen

t (

A +

B)

46,7

78,7

52

1,9

87

,16

7

14

2,0

64

44,6

49,5

21

-

29

,44

8,8

41

35

,900

,799

2

4,1

36

,98

1

Adj

ustm

ent

unde

r P

illar

II

Add

:10

% o

f th

e lo

an &

fac

iliti

es in

exc

ess

of S

ingl

e O

blig

or

Lim

its

Add

:1%

of

the

cont

ract

(sa

le)

valu

e in

cas

e of

the

sal

e of

cr

edit

wit

h re

cour

se

Tota

l RW

E f

or C

redi

t R

isk

46,7

78,7

52

1,9

87

,16

71

42

,06

444,6

49,5

21

29

,44

8,8

41

35,9

00,7

992

4,1

36

,98

1


NP

R I

n ‘0

00

Cre

dit

expo

sure

s

“Dep

osit

w

ith

bank

”

Dep

osit

s w

ith

othe

r ba

nks/

FI

Gol

d G

ovt.

&N

RB

S

ecur

itie

s G

’tee

of

Gov

t.of

Nep

al

Sec

/G’te

e of

oth

er

Sov

erei

gns

G’te

e of

D

omes

tic

Ban

ks

G’te

es

of M

DB

s

Sec

/G’te

e of

For

eign

B

anks

T

otal

(a)

(b)

( c

)

(

d)

(

e)

(f

) (

g)

(h

) (i

)

On

Bal

ance

She

et C

redi

t ex

posu

res

Cla

ims

on F

orei

gn g

over

nmen

t an

d C

entr

al

Ban

k (E

CA

-2)

-

Cla

ims

on F

orei

gn g

over

nmen

t an

d C

entr

al

Ban

k (

EC

A-3

) -

Cla

ims

on F

orei

gn g

over

nmen

t an

d C

entr

al

Ban

k (

EC

A-4

-6)

-

Cla

ims

on F

orei

gn g

over

nmen

t an

d C

entr

al

Ban

k (E

CA

-7)

-

Cla

im o

n O

ther

Mul

tila

tera

l Dev

elop

men

t B

anks

-

Cla

ims

on P

ublic

Sec

tor

Ent

ity(

EC

A-0

-1)

-

Cla

ims

on P

ublic

Sec

tor

Ent

ity(

EC

A-2

) -

Cla

ims

on P

ublic

Sec

tor

Ent

ity(

EC

A-3

-6)

-

Cla

ims

on P

ublic

Sec

tor

Ent

ity(

EC

A -

7)

-

Cla

ims

on d

omes

tic

bank

s th

at m

eet

capi

tal

adeq

uacy

req

uire

mae

nt

-

Cla

ims

on d

omes

tic

bank

s th

at d

o no

t m

eet

capi

tal a

dequ

acy

requ

irem

aent

-

Cla

ims

to a

For

eign

ban

k (E

CA

Rat

ing

0-1

) -

Cla

ims

to a

For

eign

ban

k(E

CA

Rat

ing

2)

-

Cla

ims

to a

For

eign

ban

k(E

CA

Rat

ing

3-6

) -

Cla

ims

to a

For

eign

ban

k(E

CA

Rat

ing

7)

-

Cla

ims

on f

orei

gn b

ank

inco

rpor

ated

in S

AA

RC

re

gion

ope

rati

ng w

ith

a bu

ffer

of

1 %

abov

e th

eir

resp

ecti

ve r

egul

ator

y ca

pita

l req

uire

men

te -

Cla

ims

on D

omes

tic

Cor

pora

tes

-

KU

MAR

I BAN

K L

IMIT

ED

Elig

ible

Am

ount

of C

redi

t Ris

k M

itiga

tion

(CR

M)

End

of A

shad

207

2 (1

6 Ju

ly 2

015)

Sche

dule

4.3

0(C)


Cla

ims

on F

orei

gn C

orpo

rate

s (E

CA

0-1

) -

Cla

ims

on F

orei

gn C

orpo

rate

s (E

CA

2)

-

Cla

ims

on F

orei

gn C

orpo

rate

s (E

CA

3-6

) -

Cla

ims

on F

orei

gn C

orpo

rate

s (E

CA

7)

-

Reg

ulat

ory

Ret

ail P

ortf

olio

(N

ot O

verd

ue)

63

4

63

4

Cla

ims

fulfi

lling

all

cret

erio

n of

reg

ulat

ory

reta

il ex

cept

gra

nula

rity

-

Cla

ims

secu

red

by r

esid

enti

al p

rope

rtie

s -

Cla

ims

not

fully

sec

ured

by

resi

dent

ial

prop

erti

es -

Cla

ims

secu

red

by r

esid

enti

al p

rope

rtie

s (O

verd

ue)

-

Cla

ims

secu

red

by c

omm

erci

al r

eal e

stat

e -

Pas

t du

e cl

aim

s(ex

cept

for

cla

im s

ecur

ed b

y re

side

ntia

l pro

pert

ies)

-

Hig

h R

isk

Cla

ims

-

“Inv

estm

ent

in e

quit

y an

d ot

her

capi

tal

inst

rum

ents

of

inst

itut

ions

lis

ted

in t

he s

tock

exc

hang

e” -

“Inv

estm

ent

in e

quit

y an

d ot

her

capi

tal

inst

rum

ents

of

inst

itut

ions

no

t lis

ted

in t

he s

tock

exc

hang

e” -

Oth

er A

sset

s (a

s pe

r at

tach

men

t) -

-

-

TOTA

L 6

34

-

-

-

-

-

-

-

-

63

4

Off

Bal

ance

She

et E

xpos

ures

Forw

ard

Exc

hang

e C

ontr

act

Liab

iliti

es

LC C

omm

itm

ents

Wit

h O

rigi

nal M

atur

ity

Up

to

6 m

onth

s do

mes

tic

coun

terp

arty

46

,37

0

46

,37

0

fore

ign

coun

terp

arty

(E

CA

Rat

ing

0-1

) -

fore

ign

coun

terp

arty

(E

CA

Rat

ing

2)

-

fore

ign

coun

terp

arty

(E

CA

Rat

ing

3-6

) -

fore

ign

coun

terp

arty

(E

CA

Rat

ing

7)

-

L C

Com

mit

men

ts W

ith

Ori

gina

l Mat

urit

y O

ver

6 m

onth

s do

mes

tic

coun

terp

arty

12

,12

4

12

,12

4

fore

ign

coun

terp

arty

(E

CA

Rat

ing

0-1

) -


fore

ign

coun

terp

arty

(E

CA

Rat

ing

2)

-

fore

ign

coun

terp

arty

(E

CA

Rat

ing

3-6

) -

fore

ign

coun

terp

arty

(E

CA

Rat

ing

7)

-

Bid

Bon

d an

d P

erfo

rman

ce B

ond(

Dom

esti

c) 5

9,3

73

5

9,3

73

fore

ign

coun

terp

arty

(E

CA

Rat

ing

0-1

) -

fore

ign

coun

terp

arty

(E

CA

Rat

ing

2)

-

fore

ign

coun

terp

arty

(E

CA

Rat

ing

3-6

) -

fore

ign

coun

terp

arty

(E

CA

Rat

ing

7)

-

Und

erw

riti

ng c

omm

itm

ents

-

Lend

ing

of B

ank’

s S

ecur

itie

s or

Pos

ting

of

Sec

urit

ies

as c

olla

tera

l -

Rep

urch

ase

Agr

eem

ents

,Ass

ets

sale

wit

h re

sour

se -

Adv

ance

Pay

men

t G

uara

ntee

6,4

24

6

,42

4

Fina

ncia

l Gua

rant

ee -

Acc

epta

nces

and

End

orse

men

ts 1

7,1

39

1

7,1

39

Unp

aid

port

ion

of p

artl

y pa

id s

hare

s an

d se

curi

ties

-

Irre

voca

ble

Cre

dit

Com

mit

men

ts -

sho

rt -

Irre

voca

ble

Cre

dit

Com

mit

men

ts -

long

-

Oth

er C

onti

ngen

t Li

abili

ties

-

Unp

aid

Gua

rant

ee C

laim

s -

TOTA

L 1

41

,43

0

-

-

-

-

-

-

-

-

141,

430

GR

AN

D T

OTA

L 1

42

,06

4

-

-

-

-

-

-

-

-

142,

064


Rs in ‘000

Particular “ Year 1 (2011/12) “

“Year 2 (2012/13)”

“Year 3 (2013/14)”

Previous Year (NPR)

Net Interest Income 819,088 978,025 835,473

Commission and Discount income 110,866 138,200 188,725

Other Operating Income 48,812 41,862 56,945

Exchange Fluctuation Income 44,206 56,993 85,155

Addititonal Interest Suspense during the period 99,927 65,445 30,585

Total Gross Income (a) 1,122,899 1,280,525 1,196,884

Alfa (b) 15% 15% 15% 15%

Fixed Percentage of Gross Income {C= (axb)} 168,435 192,079 179,533

Capital Requirement for operational risk (d) = ( average of c) 180,015 163,384

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

Equivalent Risk Weight Exposure {f=(dxe)} 1,800,154 1,633,844

KUMARI BANK LIMITED

Risk Weight Exposure for Operational RiskEnd of Ashad 2072 (16 July 2015)

Schedule 4.30 (D)


Rs in ‘000

S.No Currency “Open Position (FCY)” “Open Position (NPR)” “Relevant Open Position” Previous Year (NPR)

1 INR (104,028) (166,523) 166,523 79,702

2 USD 60 6,097 6,097 245,678

3 GBP (3) (412) 412 299

4 EUR (1) (84) 84 1,456

5 THB (10) (31) 31 10

6 CHF - - - 236

7 AUD (15) (1,095) 1,095 5,379

8 CAD (5) (416) 416 364

9 SGD (0) (18) 18 54

10 JPY (579) (475) 475 2,735

11 HKD (0) (2) 2 4

12 DKK (12) (175) 175 278

13 SEK (3) (36) 36 51

14 SAR (79) (2,125) 2,125 2,255

15 QAR (31) (868) 868 1,062

16 AED (20) (549) 549 605

17 MYR (31) (822) 822 511

18 KRW (300) (26) 26 -

19 CNY (1) (24) 24 443

20 KWD (1) (216) 216 221

21 BHD (0) (3) 3 5

Total Open Position (a) 179,997 341,347

Fixed Pecentage (b) 5% 5%

Capital Charge for Market Risk [c=(aXb)] 9,000 17,067

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

Equivalent Risk Weight Exposure {e=(cXd)} 89,998 170,673

Schedule 4.30 (E)KUMARI BANK LIMITED

Risk Weight Exposure for Market RiskEnd of Ashad 2072 (16 July 2015)


Sche

dule

4.3

1

Par

ticu

lars

Indi

cato

rsF.

Y.

F. Y

.F.

Y.

F. Y

.F.

Y.

F. Y

.F.

Y.

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

20

13

/14

20

14

/15

1.

N

et P

rofit

/Gro

ss I

ncom

e%

36

.98

%3

7.3

9%

28

.70

%2

6.9

5%

23

.99

%2

9.2

9%

32

.27

%

2.

Ear

ning

s P

er S

hare

NP

R 2

2.0

4

24

.24

15

.67

17

.18

18

.17

18

.69

16

.24

3.

Mar

ket

Valu

e pe

r S

hare

NP

R 7

00

4

68

26

62

42

26

05

36

38

0

4.

Pri

ce E

arni

ng R

atio

Rat

io 3

1.7

6

19

.31

16

.98

14

.09

14

.31

28

.68

23

.41

5.

Sto

ck D

ivid

end

on s

hare

cap

ital

%1

0.5

8%

12

.00

%8

.44

%0

.00

%1

4.0

0%

33

.00

%1

1.0

0%

6.

Cas

h D

ivid

end

on s

hare

Cap

ital

%0

.55

%1

2.0

0%

0.4

4%

7.0

0%

0.7

4%

1.7

4%

0.5

8%

7.

Int

eres

t In

com

e/Lo

ans

& A

dvan

ces

%8

.34

%1

1.5

8%

13

.75

%1

2.2

6%

11

.72

%1

0.1

9%

8.8

1%

8.

Em

ploy

ee E

xpen

ses/

Tota

l Ope

rati

ng E

xpen

ses

%4

0.7

3%

41

.49

%4

4.2

0%

47

.82

%4

6.9

3%

48

.01

%5

2.8

3%

9.

Inte

rest

Exp

ense

s to

Tot

al D

epos

it a

nd B

orro

win

gs%

5.1

0%

6.6

6%

8.8

8%

7.3

8%

5.8

7%

5.6

7%

4.4

7%

10

. E

xcha

nge

Fluc

tuat

ion

Gai

n/G

ross

Inc

ome

%5

.91

%4

.48

%4

.20

%4

.32

%4

.69

%7

.30

%7

.79

%

11

. S

taff

Bon

us/ T

otal

Em

ploy

ee E

xpen

ses

%2

4.0

4%

24

.20

%1

7.5

5%

16

.84

%1

7.0

3%

18

.32

%1

6.6

0%

12

. N

et P

rofit

/Loa

ns &

Adv

ance

s%

1.7

7%

2.1

2%

1.6

8%

1.5

2%

1.4

5%

1.5

0%

1.4

6%

13

. N

et P

rofit

/ Tot

al A

sset

s%

1.4

1%

1.5

9%

1.2

3%

1.1

0%

1.0

3%

1.1

0%

1.0

6%

14

. To

tal C

redi

t/D

epos

it%

94

.17

%7

9.4

5%

87

.87

%8

2.3

3%

79

.47

%8

2.7

0%

81

.00

%

15

. To

tal O

pera

ting

Exp

ense

s/To

tal A

sset

s%

1.5

4%

1.6

9%

1.8

6%

1.6

2%

1.5

4%

1.4

9%

1.4

4%

16

. A

dequ

acy

of C

apit

al F

und

on R

isk

Wei

ghta

ge

Ass

ets

a.

Cor

e C

apit

al%

9.0

8%

10

.29

%1

2.3

5%

11

.30

%1

1.2

4%

10

.85

%9

.89

%

b.

Sup

plem

enta

ry C

apit

al%

2.4

7%

2.0

5%

1.4

1%

0.9

0%

0.9

3%

0.9

6%

0.9

6%

c.

Tota

l Cap

ital

Fun

d%

11

.56

%1

2.3

4%

13

.76

%1

2.2

0%

12

.17

%1

1.8

1%

10

.84

%

17

. Li

quid

ity

(CR

R)

Rat

io7

.13

%8

.02

%5

.74

%1

3.5

2%

12

.43

%1

3.6

2%

7.4

8%

18

. N

on P

erfo

rmin

g Lo

ans/

Tota

l Loa

ns%

0.4

4%

0.5

0%

1.1

2%

2.2

1%

2.8

9%

4.0

3%

2.4

9%

19

. W

eigh

ted

Aver

age

Inte

rest

Rat

e S

prea

d%

4.1

7%

3.2

8%

3.9

2%

4.2

7%

4.6

2%

3.7

1%

3.1

7%

20

. B

ook

Net

wor

th P

er S

hare

NP

R 1

37

1

37

1

38

1

48

1

66

1

62

1

38

21

. To

tal S

hare

sN

umbe

r11,8

60,9

92

13,0

60,1

59

1

6,0

38

,00

0

16

,03

8,0

00

1

8,2

83

,32

0

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1. General InformationKumari Bank Limited (the “Bank”) is a public limited company, incorporated on 10 December 1999 and domiciled in Nepal. The address of its registered office is Durbar Marg, Kathmandu, Nepal. The Bank is listed in Nepal Stock Exchange Limited.

The Bank carries out commercial banking activities in Nepal under license from Nepal Rastra Bank (the central bank of Nepal) as Class “A” licensed institution.

2. Date of Authorization of Financial StatementThe Financial Statements for the year ended on 16 July 2015 is approved by Board of Directors (BOD) of the Bank on 03 Magh 2072 (17 January 2016).

3. Summary of Significant Accounting PoliciesThe Significant accounting policies applied in the preparation of the financial statements of the bank are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

3.1 Statement of ComplianceThe financial statements have been prepared in accordance with Nepal Accounting Standards (NAS) issued by the Nepal Accounting Standard Board (NASB) except for exceptions as mentioned below, generally accepted accounting principles, and the provisions of Bank and Financial Institution Act, 2063, directives issued by Nepal Rastra Bank and the Company Act, 2063.

Schedule 4.32

KUMARI BANK LIMITEDSIGNIFICANT ACCOUNTING POLICIES

FINANCIAL YEAR 17 JULY 2014 TO 16 JULY 2015(1 SHRAWAN 2071 TO 31 ASHAD 2072)

3.2 Basis of PreparationThe financial statements have been prepared under the historical cost convention. Use of certain critical accounting estimates and exercise judgement in the process of applying the Bank’s accounting policies have been done, wherever required, in conformity with NAS and generally accepted accounting principles.

3.3 Interest IncomeInterest income on loans and advances is recognised on cash basis as per the directive issued by NRB, which is not in accordance with Nepal Accounting Standards.

Due interest on loans that is realised after Ashad end 2072 and till 30 Aswin 2072 has been recognised as interest income on deferred cash basis which is in compliant of NRB circular.

Interest for the moratorium period on some term loans as stated in point no 23 of Notes to Accounts has been recognised as income after capitalising it on loans which is in accordance with NRB approval.

Interest income on investments is recognised on accrual basis provided that premium on government bonds has been netted off against interest income from such bonds.

3.4 Commission IncomeGuarantee commission up to NPR. 100,000 is recognised as commission income on cash basis. Commission income on guarantee covering more than one fiscal year and commission amount above NPR.100,000 is booked on accrual basis.


Other commission incomes are recognised as income on accrual basis. Recognition of guarantee commission income is not in accordance with NAS – 07 “Revenue”.

3.5 Dividend IncomeDividend is recognised as income when the bank’s right to receive payment is established. It is recognised as income at net of withholding tax.

3.6 Foreign Exchange Incomes◊ Foreign currency assets and liabilities as at the

Balance Sheet date have been translated at the mid rate (average of buying and selling rate) of exchange rates prevalent as on the Balance Sheet date.

◊ Foreign currency trading gain/loss realised in the foreign currency transactions is accounted for on the date of transaction and based on transaction rate.

◊ Revaluation gain arising due to fluctuation in exchange rate of foreign currencies is accounted for and shown as “Revaluation Gain/Loss”. Amount equivalent to 25% of revaluation gain of the current year is appropriated to Exchange Fluctuation Reserve as per directive issued by Nepal Rastra Bank.

3.7 Interest ExpensesInterest expense on deposit liabilities, bonds and borrowings are accounted for on accrual basis.

3.8 Loans and Advances, Overdraft and Bills PurchasedLoans and advances, overdrafts and bills purchased include direct finance provided to the customers as per the Bank’s policy and product papers such as bank overdrafts, personal loans, term loans, hire purchase loans and loans to deprived sectoNPR All the loans are subject to regular review and are graded according to the level of credit risk and classified as per NRB Directives. Total Loans and advances are stated net of loan loss provisions in the Balance Sheet.

3.9 Staff LoansStaff loan has been provided as per the bank’s policy and shown under the head ‘Other Assets’ as per NRB Directives.

3.10 Loan Loss ProvisionProvision is made for possible losses on loans and advances, overdraft and bills purchase at 1% to 100% in accordance with the directives issued by NRB.

3.11 Loans & Advances Write offUnrecoverable loans and advances are written off in accordance with the by-laws of the Bank approved by Bank’s BOD and NRB.

Amounts recovered against loans written off in earlier years are recognized as income in the year of recovery.

3.12 Investments◊ Investments in Government Securities are valued at

cost. ◊ Placements with maturity period up to 7 days and

more than 7 days are classified as money at call and investments respectively.

◊ Investment in shares, debenture and bonds are valued at cost or market value, whichever is lower. Necessary reserves for certain investments have been created as per NRB directive.

3.13 Fixed Assets and Depreciation◊ Fixed assets are stated at historical cost. Historical

cost includes expenditures that are directly attributable to the acquisition of individual asset item.

◊ Below mentioned fixed assets are depreciated on Straight Line Method at the rates mentioned below -

Asset Rate

Computer Software 20%Leasehold 20%Battery 33.33%

◊ Depreciation on newly acquired fixed assets is charged from the next month of booking. Depreciation of an asset ceases when it is derecognised at the time of its disposal.

◊ Depreciation on below mentioned assets is charged on the basis of diminishing value method at the rates mentioned below -

Asset RateBuilding 5%Office Equipments 25%Furniture & Fixtures (Wooden & Metal) 25%Computer 25%Vehicles 20%

◊ Assets costing more than NPR 10,000 and/or having useful life more than 1 year are booked under fixed assets.

3.14 Amortisation of Software Cost and Leasehold Assets◊ Computer software are capitalised on cost incurred

to acquire specific software. Bank amortises such cost over a period of useful life, estimated as 5 years from the date of acquisition.


◊ Leasehold properties are capitalised on cost incurred to set up such assets. Such assets are amortised over the period of 5 year

3.15 Lease Rental

The lease agreements entered into by the Bank for office buildings are operating lease agreements. The total payments made under operating leases are charged to Rent Expenses in the profit and loss account.

3.16 Employee Retirement Benefits

The Bank has schemes of retirement benefits namely Provident Fund and Gratuity Fund. Provision for expenses on account of Provident and Gratuity Funds is made on accrual basis with the amount of liabilities computed by the bank in accordance with its applicable schemes. Contributions to retirement fund are made on a regular basis as per its rules and regulations.

3.17 Income Taxa. Current Income TaxProvision for current income tax is made in accordance with the provisions of the prevailing Income Tax Act, 2058 and Rules as amended.

b. Deferred Income TaxDeferred income tax is provided on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. It is determined using tax rates (and laws) that have been enacted at the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

3.18 StationeryStationery purchased for consumption is charged as expense on consumption basis. FIFO method of stationery valuation has been adopted by the bank.

3.19 Non-banking AssetsNon-banking Asset is booked at lower of market price or total dues, on the day before booking and provision for the asset has been made as per NRB directive.The details of non-banking assets as on Ashad end 2072 have been stated in point no. 24 of Notes to Accounts.

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

3.21 Staff BonusProvision for staff bonus is made as per the NRB Directive.


1. Provision for staff bonusProvision for staff bonus has been provided at 10% of net profit before providing for income tax provision. This provision has been made as per NRB directive.

2. Staff Housing Fund Staff Home Loan is provided as per the bank’s policy. A separate housing fund in accordance with Labour Act, 2048 has not been created.

3. General ReserveAs per the requirement of Nepal Rastra Bank, 20% of current year’s profit has been transferred to General Re-serve.

4. Tax Settlement Outstanding / Contingent LiabilityTax settlement up to the FY 2066/67 has been complet-ed. Against tax reassessment order of FY 2067/68, the bank has filed a case for Administrative Review.

KUMARI BANK LIMITEDNOTES TO ACCOUNTS

FINANCIAL YEAR 17 JULY 2014 TO 16 JULY 2015( 1 SHRAWAN 2071 TO 31 ASHAD 2072)

Schedule 4.33

5. Gratuity ExpensesDuring the year, the Bank has provided NPR. 31,738,572/- (Previous Year NPR. 13,317,642/-) on account of gratuity.

6. Dividend and BonusBank’s BOD meeting held on 03 Magh 2072 has decided to propose 11% stock dividend and 0.58% cash dividend (for tax purpose) from the profit of the FY 2071/72.

7. Unpaid DividendOut of total cash dividend proposed in FY 2066/67 & FY 2068/69 which were distributed in FY 2067/68 & FY 2069/70 respectively, cash dividend of NPR. 7,839,484 is still payable because shareholders have not yet collect-ed the dividend.

8. Loan Disbursed, Recovered and Outstanding During the Year.The loan disbursed, recovered and outstanding during the year is given below:

NPR. In MillionOpening Balance Total Disbursed Total Settled Outstanding

22,809 29,869 25,608 27,070

9. Summary of Changes in Deposit During the YearGrowth in deposits during the year is given below:

NPR. In Million

Particulars This Year (NPR) Last Year (Rs) Changes in amount

1) Current Deposit 1,458 1,244 215

a) Local Currency 1,393 1,209 184

b) Foreign Currency 65 35 30

2) Saving Deposit 8,005 7,234 771

a) Local Currency 7,899 7,117 782

b) Foreign Currency 107 117 (10)


3) Fixed Deposit 14,470 12,142 2,328

a) Local Currency 14,002 11,446 2,557

b) Foreign Currency 467 696 (229)

4) Call Deposit 9,281 6,812 2,469

a) Local Currency 9,040 6,585 2,455

b) Foreign Currency 241 226 14

5) Margin Deposit 208 147 60

a) Local Currency 208 147 60

b) Foreign Currency - - -

Total Deposit 33,422 27,578 5,844

10. Average Interest Rate SpreadParticulars Percentage

The weighted average yield rate on loans and investments 8.17

The weighted average cost rate on deposits and borrowings 5.00

The weighted average interest rate spread 3.17

11. Summary of Amortizable Expenses Yet to be Written OffNo such item.

12. Summary of Concentration of ExposureNo balance sheet and off balance sheet transaction have been highly concentrated to a single person, firm, organi-zation or to a particular sector. Detail of highest exposure to a single person or organization is as follows:

NPR. In Million

Particulars Total ExposureMaximum concentration to a single customer

Amount %

Loans & Advances 27,070 560 2.07

Deposits 33,422 2,065 6.18

Off Balance Sheet Items 4,079 410 10.06


13. Classification of Assets and Liabilities based on MaturityNPR. In Million

S.N. Particulars 1-90 days

91-180 days

181-270 days

271-365 days

More than 1 year Total

Assets

1 Cash Balance 829 - - - - 829

2 Balance with Banks & FIs 4,162 - - - - 4,162

3 Investment in Foreign Banks 830 102 - - - 932

4 Call Money 437 - - - - 437

5 Government Securities 837 362 350 1,158 1,200 3,906

6 Nepal Rastra Bank Bonds - - - - - -

7 Inter Bank & FI Lending - - - - - -

8 Loans & Advances 8,327 3,837 3,846 1,720 9,340 27,070

9 Interest Receivable 258 2 1 1 4 265

10 Reverse Repo - - - - - -

11 Acceptance Receivable - - - - - -

12 Payments under S.No. 20,21 & 22 601 918 78 189 1,159 2,944

13 Others 262 87 87 304 284 1,025

Total (A) 16,543 5,308 4,362 3,371 11,987 41,570

Liabilities

14 Current Deposits 750 250 250 250 166 1,666

15 Saving Deposits (including call) 4,322 864 864 864 10,372 17,286

16 Fixed Deposits 3,408 2,593 4,564 3,283 621 14,470

17 Debentures/Bonds - - - - - -

18 Borrowings - 328 - - - 328

Call/Short Notice - - - - - -

Inter-bank/Financial Institutions - 328 - - - 328

Refinance - - - - - -

Others - - - - - -

19 Other Liabilities and Provisions 85 7 7 7 - 105

Sundry Creditors - - - - - -

Bills Payable 16 5 5 5 - 33

Interest Payable 51 - - - - 51

Provisions - - - - - -

Others 18 1 1 1 - 22

20 Acceptance Liabilities 228 183 - - - 411

21 Irrevocable Loan Commitment 182 257 257 257 257 1,210

22 Letter of Credit/Guarantee 1,110 1,415 313 464 366 3,668

23 Repo - - - - - -

24 Payable under s.no.11 - - - - - -

25 Others 86 29 29 29 - 171

Total (B) 10,170 5,926 6,284 5,154 11,782 39,316

Net Financial Assets (A-B) 6,373 (618) (1,923) (1,783) 205 2,254

Cumulative Net Financial Assets 6,373 5,755 3,833 2,049 2,254


14. Borrowings by the bank against the collateral of own assetsThe bank has no such borrowings.

15. Related PartiesKey Management Personnel

Key Management Personnel of the Bank includes Chief Executive Officer and members of the Board of Directors of the Bank, as follows:

Mr. Santosh Kumar Lama - Chairman (Promoter)Dr. Shobha Kant Dhakal - Director (Public)Mr. Uttam P. Bhattarai - Director (Promoter)Mr. Naresh Dugar - Director (Promoter)Er. Binod Dawadi - Director (Promoter)Mr. Puna Ram Bhandari - Director (Public) Mr. Rasendra Bahadur Malla - Director (Public)Mr. Rajib Giri - Acting Chief Executive Officer

Compensation to Key Management Personnel-CEO of the Bank Amount in NPR.

Categories Current Year

Short-term employee benefits 5,538,182

Signing bonus -

Post-employment benefits -

Other long-term benefits -

Termination benefits 506,437

Share-based benefits -

Total 6,044,619

Above figure is for the period of 1 Shrawan 2071 to 17 Chaitra 2071. Then CEO resigned from the service of the bank from 18 Chaitra 2071.

In addition to the above, bank had borne the expenses relating to mobile bill and had provided vehicle facility till his tenure in the bank.

Transaction with Key Management Personnel (BOD) of the BankThe following provides transactions between the Bank and then Key Management Personnel (Directors) of the Bank during the year –

Amount in NPR. Nature of Transaction Current Year

Meeting Allowances 3,175,033

Other expenses 457,827

Total 3,632,860


16. Paid up Share CapitalPaid up share capital of the Bank has changed over the years as follows:

Fiscal Year Cumulative Paid up Capital Remarks

2057/58 350,000,000

2058/59 350,000,000

2059/60 350,000,000

2060/61 500,000,000 Initial Public Offering of NPR. 150 million

2061/62 625,000,000 Right share issue of NPR. 125 million (25%)

2062/63 750,000,000 Bonus share issue of NPR. 125 million (20%)

2063/64 900,000,000 Bonus share issue of NPR. 150 million (20%)

2064/65 1,070,000,000 Right share issue of NPR. 180 million (20%). NPR. 170 million capitalized on balance sheet date and balance on subsequent year.

2065/66 1,186,099,200In the fiscal year 2064/65, the bank had proposed 10 % bonus share and 15 % right share. 10 % bonus share had been capitalized as on balance sheet date pending issuance of right share.

2066/67 1,306,015,920

In the FY 2065/66, the bank had issued 10% bonus share including to those who were released from black list during the year. Further, right share of NPR. 1,080,000 issued on FY 2064/65 relating to blacklisted shareholders are included in current year’s capital subsequent to their release from black list.

2067/68 1,603,800,000

In the FY 2067/68, the bank capitalized NPR. 178,200,000 (15%) share capital which was approved for issuance in fiscal year 2064-65. Further, the bank auctioned 7841 numbers of shares that include right and bonus shares of subsequent years relating to right share approved in FY 2064-65 but issued only in FY 2067-68.Bonus share at the rate of 8% (NPR. 118,800,000) had been proposed in the FY 2067/68.

2068/69 1,603,800,000 -

2069/70 1,828,332,000 14% bonus share of NPR 224.532 million proposed in the FY 2069/70.

2070/71 2,431,681,560 33% bonus share of NPR 603,349,560 issued in the FY 2070-71

2071/72 2,699,166,531.60 11% bonus share of NPR 267,484,971.60 issued in the FY 2071/72

17. Sale of Land and Building Bank has not sold its land or building during the year.

18. Deferred TaxComponent of Deferred Tax Assets

Amount in NPR.

Particulars As per financial statement

As per Income Tax act Taxable temporary difference

Fixed assets base 173,608,473 169,715,360 3,893,113

Total 173,608,473 169,715,360 3,893,113

Current Deferred Tax Liability 1,167,934

Opening Deferred Tax Asset 849,607

Adjustment (2,017,541)

Deferred tax is calculated considering the existing tax rate of 30%.


19. Reconciliation Status NPR. In Million

Particulars Upto 1 Year Above 1 Year to 3 Years More than 3 Years Grand Total

They Credit 39.39 - - 39.39

We Debit 0.00 - - 0.00

They Debit 2.85 0.00 - 2.85

We Credit 28.50 0.01 - 28.51

Total 70.75 0.01 - 70.76

20. Details of Software Application Amount in NPR.

Net Opening Balance Additions during the year Amortization during the year Net Closing Balance

6,834,175 - 2,744,339 4,089,836

21. Interest CapitalisationFollowing are the loans, interest on which is capitalised to recognise income in accordance with NRB approval. These loans are the project loans interest on which were capitalised for moratorium period. Detail of such loans and interest recognised in FY 2071/72 is as follows –

Amount in NPR.

SN Name of the Client Type Capitalized Interest NRB approval date

1 SANIMA MAI HYDROPOWER PVT. LTD Term Loan 3,850,778 1/29/2070

2 NEPAL HEALTH CARE CO-OPERATIVE LTD Term Loan 12,670,527 3/25/2070

3 RURU JALBIDHYUT PARIYOJANA CO.P.LTD Term Loan 6,103,595 9/30/2070

4 CHHYANGDI HYDROPOWER PVT.LTD Term Loan 2,328,861 02/02/2071

5 ELECTROCOM AND RESEARCH CENTER P. L Term Loan 2,990,173Grace period extended due

to earthquake

6 MARUTI CEMENTS PVT.LTD Term Loan 9,242,682 6/14/2070

7 JOSHI HYDROPOWER DEV. COM. PVT. LT Term Loan 3,007,987 9/27/2069

8 MANDAKINI HYDROPOWER LTD. Term Loan 1,239,148 08/17/2071

9 SARBOTTAM CEMENT PVT. LTD Term Loan 7,181,547 9/22/2070

Total 48,615,298

22. Interest Income Recognised on Deferred Cash Basis

Of the total amount of interest due as on Ashad end 2072, interest of NPR 7,810,261 is realised in cash by 15 of Shrawan 2072 and interest of NPR 33,623,386 is realised after 15 Shrawan 2072 till 30 Aswin 2072. Total interest of NPR 41,433,647 so realised in cash till Aswin end 2072 has been recognised as interest income on balance sheet date which complies NRB directive regarding recognition of interest income on deferred cash basis.

23. Capital Adjustment ReserveOf the total interest recovered as stated in point no 22 above, interest of NPR 33,623,386 recovered after 15 Shrawan 2072 till 30 Aswin 2072 and interest of NPR 2,990,173 realised by way of capitalising interest on project loan impact-ed by the Earth Quake, is transferred to Capital Adjustment Reserve through Profit and Loss Appropriation Account.

Similarly, loan loss provision of NPR 7,798,961 written back due to complete settlement of NPLs in the month of Mangsir 2072 has been transferred to Capital Adjustment Reserve.


24. Staff Leave Encashment

Bank has not made any provision for accumulated leave encashment. However, any encashment of leave in excess of minimum accumulation as per bank’s rule has been charged as an expense in the year of encashment. As per the ‘Personnel Policy Guideline’ of the Bank, staffs are entitled to encash accumulated leave on retirement.

25. Non-banking assets (NBA) DisclosureBank’s detail of NBA as on Ashad end 2072 is as follows -

Amount in NPR.

Name & Address of Borrower or Party Acquired Date of Non Banking Asset

Total Amount of Non Banking Asset

Sarita Rajbhandari (Vaidhya) 4-Dec-12 5,216,247

Shilu Housing and Developers Pvt Ltd 5-Jul-13 52,795,000

Opportunity Manpower Service 27-Jan-14 2,892,225

Everest Floriculture Pvt.Ltd. 5-Apr-15 20,546,677

Aayusha Developers 5-Jul-15 135,124,850

Total 216,574,999

The bank has booked loss provision on NBA as per NRB directive.

26. Capital Work in Progress (WIP)Carrying amount of capital work-in-progress includes cost incurred for the soil testing work for building construc-tion site at Naxal. As of the balance sheet date, the carrying amount of WIP is NPR. 261,369.

27. Lending to National Trading Limited and Problematic FIsThe bank has no lending against National Trading Limited. The bank has no inter-bank placements and/or other claims against the FIs that are declared problematic by NRB.

28. Rounding off and Comparative FiguresFigures are rounded to nearest rupees. Previous year’s figure has been regrouped or rearranged where necessary.


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NPR in 000’

S.N. Particulars

As per Unaudited Financial Statement

As per Audited

Financial Statement

Variance

Reasons for Variance In Amount In %

1Total Capital and Liabilities (1.1 to 1.7)

38,186,723 38,198,863 12,140 0.03%

1.1 Paid Up Capital 2,431,682 2,699,167 267,485 11.00%Declaration of stock dividend

1.2 Reserve and Surplus 887,658 648,150 (239,509) -26.98%Change in profit and declaration of stock dividend

1.3 Debenture and Bond - - - -

1.4 Borrowings 328,000 328,000 - -

1.5 Deposits (a+b) 33,421,911 33,421,911 - -

a. Domestic Currency 32,542,064 32,542,064 - -

b. Foreign Currency 879,847 879,847 - -

1.6 Income Tax Liability - - -

1.7 Other Liabilities 1,117,472 1,101,636 (15,836) -1.42%

Change in LLP, provision for staff bonus, provision for other expenses and deferred tax liability.

2 Total Assets (2.1 to 2.7) 38,186,723 38,198,863 12,140 0.03%

2.1 Cash & Bank Balance 4,990,975 4,990,975 - -

2.2 Money at Call and Short Notice 436,881 436,881 - -

2.3 Investments 4,862,590 4,862,590 - -

2.4Loans and Advances (a+b+c+d+e+f)

27,070,390 27,070,390 - -

a.Real Estate Loan 2,010,181 2,010,181 - -

1. Residential Real Estate Loan 491,529 491,529 - -

2. Business Complex & Residential Apartment Construction Loan

373,819 373,819 - -

3. Income Generating Commercial Complex Loan

- - -

4. Other Real Estate loan 1,144,833 1,144,833 - -

b. Personal Home Loan of NPR10 million

2,885,047 2,885,047 - -

c.Margin Type Loan 852,523 852,523 - -

d.Term Loan 5,542,243 5,542,243 - -

e.Overdraft Loan/TR Loan/WC Loan 14,311,637 14,311,637 - -

f. Others 1,468,760 1,468,760 - -

Schedule 4.35KUMARI BANK LIMITED

Fiscal Year 2071/72 (2014/15) Comparison of Unaudited and Audited Financial Statement as Ashad 2072 of FY 2071/72


2.5 Fixed Assets 259,399 259,463 64 0.02%Depreciation adjustment

2.6 Non Banking Assets - - - -

2.7 Other Assets 566,487 578,563 12,076 2.13%

Change in tax provision, booking of income receivables, recovery of interest and adjustment of deferred tax assets.

3 Profit and Loss Acccount

3.1 Interest Income 2,405,354 2,433,131 27,777 1.15%Recovery of interest on loans

3.2 Interest Expenses 1,507,365 1,507,365 - -

A. Net Interest Income (3.1-3.2) 897,989 925,766 27,777 3.09%

3.3 Fees, Commission and Discount 154,645 154,635 (10) (0.00) Adjustment

3.4 Other Operating Income 47,403 47,668 266 0.56%Booking of income receivables

3.5 Foreign Exchange Gain/ Loss (Net) 95,251 95,251 - -

B. Total Operating Income (A.+3.3+3.4+3.5)

1,195,288 1,223,320 28,032 2.35% Above reasons

3.6 Staff Expenses 284,347 284,257 (89.78) -0.03% Adjustment

3.7 Other Operating Expenses 254,368 253,823 (545) -0.21%Adjustment of provision

C. Operating Profit Before Provision (B.- 3.6-3.7)

656,573 685,240 28,667 4.37% Above reasons

3.8 Provision for Possible Losses 314,732 284,492 (30,241) -9.61% Recovery of loans

D. Operating Profit (C-3.8) 341,840 400,748 58,908 17.23% Above reasons

3.9Non Operating Income/Expenses (Net)

(6,892) (7,021) (129) 1.87% Adjustment

3.10Write Back of Provision for Possible Loss

221,752 228,688 6,937 3.13% Recovery of loans

E. Profit from Regular Activities (D+3.9+3.10)

556,700 622,416 65,716 11.80% Above reasons

3.11Extraordinary Income/Expenses (Net)

- - -

F. Profit before Bonus and Taxes (E. + 3.11)

556,700 622,416 65,716 11.80% Above reasons

3.12 Provision for Staff Bonus 50,609 56,583 5,974 11.80% Above reasons

3.13 Provision for Tax 153,357 171,044 17,687 11.53% Above reasons

G. Net Profit/Loss (F.-3.12-3.13) 352,734 394,788 42,055 11.92% Above reasons


Schedule 4 AKUMARI BANK LIMITED

Unaudited Financial Results (Quarterly)As at Fourth Quarter (16 July 2015) of the Fiscal Year 2014/15

Amount in NPR ‘000

S.N. Particulars 30.03.2072/16.07.2015 This Quarter Ending

30.12.2071/13.04.2015 Previous Quarter Ending

32.03.2071/16.07.2014 Corresponding Previous

Year Quarter Ending

1 Total Capital and Liabilities (1.1 to 1.7)

38,186,723 35,789,691 31,930,990

1.1 Paid Up Capital 2,431,682 2,431,682 2,431,682

1.2 Reserve and Surplus 887,658 786,272 534,924

1.3 Debenture and Bond - - -

1.4 Borrowings 328,000 2,456 201,952

1.5 Deposits (a+b) 33,421,911 31,224,317 27,578,376

a. Domestic Currency 32,542,064 30,346,488 26,503,880

b. Foreign Currency 879,847 877,829 1,074,496

1.6 Income Tax Liability - - -

1.7 Other Liabilities 1,117,472 1,344,964 1,184,056

2 Total Assets (2.1 to 2.7) 38,186,723 35,789,691 31,930,990

2.1 Cash & Bank Balance 4,990,975 2,871,899 4,895,685

2.2 Money at Call and Short Notice 436,881 879,040 507,478

2.3 Investments 4,862,590 4,520,963 3,164,626

2.4 Loans and Advances (a+b+c+d+e+f) 27,070,390 26,699,294 22,808,503

a.Real Estate Loan 2,010,181 2,036,179 2,040,879

1. Residential Real Estate Loan 491,529 419,746 234,772

2. Business Complex & Residential Apartment Construction Loan

373,819 502,372 617,892

3. Income Generating Commercial Complex Loan

- - -

4. Other Real Estate loan 1,144,833 1,114,062 1,188,215

b. Personal Home Loan of NPR 1 Crore or Less

2,885,047 2,667,011 1,948,109

c.Margin Type Loan 852,523 854,582 538,887

d.Term Loan 5,542,243 5,221,304 4,399,845

e.Overdraft Loan/TR Loan/WC Loan 14,311,637 14,597,365 12,624,206

f. Others 1,468,760 1,322,852 1,256,576

2.5 Fixed Assets 259,399 241,982 235,776

2.6 Non Banking Assets - - -

2.7 Other Assets 566,487 576,513 318,921

3 Profit and Loss Account Upto This Quarter End Previous Quarter Ending Corresponding Previous Year Quarter End

3.1 Interest Income 2,405,354 1,742,797 2,410,784

3.2 Interest Expenses 1,507,365 1,072,107 1,575,312

A. Net Interest Income (3.1-3.2) 897,989 670,690 835,473


3.3 Fees, Commission and Discount 154,645 121,753 188,725

3.4 Other Operating Income 47,403 32,777 56,945

3.5 Foreign Exchange Gain/ Loss (Net) 95,251 71,343 85,155

B. Total Operating Income (A.+3.3+3.4+3.5) 1,195,288 896,563 1,166,298

3.6 Staff Expenses 284,347 206,281 221,701

3.7 Other Operating Expenses 254,368 175,975 240,121

C. Operating Profit Before Provision (B.- 3.6-3.7) 656,573 514,307 704,476

3.8 Provision for Possible Losses 314,732 198,341 236,312

D. Operating Profit (C-3.8) 341,840 315,967 468,165

3.9 Non Operating Income/Expenses (Net)

(6,892) (8,087) 2,540

3.1 Write Back of Provision for Possible Loss

221,752 87,095 76,151

E. Profit from Regular Activities (D+3.9+3.10) 556,700 394,975 546,856

3.11 Extraordinary Income/Expenses (Net) - - -

F. Profit before Bonus and Taxes ( E. + 3.11) 556,700 394,975 546,856

3.12 Provision for Staff Bonus 50,609 35,907 49,714

3.13 Provision for Tax 153,357 107,720 155,487

G. Net Profit/Loss (F.-3.12-3.13) 352,734 251,348 341,655

4 Ratios At the End of This Quarter

At the End of Previous Quarter

At the End of Corresponding Previous

Year Quarter

4.1 Capital Fund To RWA 11.12% 10.98% 11.92%

4.2 Non Performing Loan (NPL) to Total Loan

2.76% 3.98% 3.19%

4.3 Total Loan Loss Provision to Total NPL

115.31% 94.31% 125.41%

4.4 Cost of Funds (annualized - LCY) 5.00% 4.91% 6.03%

4.5 Credit to Deposit Ratio (as per NRB directives)

74.66% 79.63% 77.37%

4.6 Base Rate (FTM) 8.66% 8.10% 8.86%

4.7 Average Interest Rate Spread (as per NRB directives)

3.11% 3.22% 3.62%


Capital Structure and Capital Adequacy

Tier I Capital and a breakdown of its components

Amount in NPR

S.N. Particular Current Year

a Paid Up Equity Share Capital 2,431,681,560

b Irredeemable Non- cumulative preferenece share -

c Share premium -

d Proposed Bonus Equity Share 267,484,972

e Statutory General Reserves 546,371,157

f Retained Earnings 13,393,941

g Un-audited current period profit (after all provision including tax) -

h Bond Redemption Reserve -

i Capital Adjustment Reserve 44,412,519

j Dividend Equalization Reserves -

k Other free Reserve -

Total Tier I Capital 3,303,344,149

Tier 2 Capital and a breakdown of its components

Amount in NPR


a Cumulative and/or Reedemable Preference Share -

b Subordinated term debt -

c Hybrid Capital Instruments -

d General Loan Loss provision 267,054,718

e Exchange Equalisation Reserve 23,972,027

f Investment Adjustment Reserve 20,000,000

g Assets Revaluation Reserve -

h Other Reserve (Deferred Tax Reserve) -

Total of Tier 2 Capital 311,026,746

Deductions from Capital Amount in NPR


i. Less: Purchase of land and building in excess of limit and unutilised (88,680,911)

Total Deductions from Core Capital (88,680,911) Total Qualifying Capital

Amount in NPR


a Tier I Capital 3,214,663,238

b Tier II Capital 311,026,746

Total Capital Fund 3,525,689,984

KUMARI BANK LIMITED“Disclosure Under Basel II as at 16 July 2015

(For F/Y 2014/15)”


Capital Adequacy Ratios S.N. Particular Current Year (%)

a Tier 1 Capital to total RWA 9.89

b Total Capital Fund (Tier 1 + Tier 2) to Total RWA 10.84

Bank’s Internal Approach to Access Capital Adequacy Bank’s mangement regularly reviews Bank’s Capital Adequacy. Plans and budgets are prepared on the basis of current and projected capital adequacy. Bank’s plan and investment decision are based on the level of capital adequacy it feels comfortable. Risk weighted exposures for Credit Risk, Market Risk and Operational Risk

Amount in NPR.


1 Risk Weighted Exposure for Credit Risk 29,448,840,680

2 Risk Weighted Exposure for Operational Risk 1,800,153,843

3 Risk Weighted Exposure for Market Risk 89,998,446

Total 31,338,992,969 Risk weighted exposures under each of 11 categories of Credit Risk

Amount in NPR


1 Claims on government and central bank -

2 Claims on other official entities -

3 Claims on banks 700,581,127

4 Claims on corporate and securities firms 15,860,516,174

5 Claims on regulatory retail portfolio 3,265,972,352

6 Claims secured by residential properties 1,576,755,905

7 Claims secured by commercial real estate 1,210,421,906

8 Past due claims 596,646,374

9 High risk claims 2,894,239,673

10 Other Assets 809,245,052

11 Off balance sheet items 2,534,462,117

Total 29,448,840,680

Total risk weighted exposure calculation table - Amount in NPR


1 Risk Weighted Exposure for Credit Risk 29,448,840,680

2 Risk Weighted Exposure for Operational Risk 1,800,153,843

3 Risk Weighted Exposure for Market Risk 89,998,446

Total Risk Weighted Exposure 31,338,992,969

Add: 3% of the total RWE due to non compliance to Disclosure Requirement

Addition to RWE as per supervisiory review (3%) 940,169,789

Add RWE equvalent to reciprocal of capital charge of 2 % of gross income. 239,376,796

Add: ...% of Total Deposit due to Insufficient Liquid Assets

Total Risk Weighted Exposure (After Bank’s adjustment of Pillar II) 32,518,539,554

Amount of NPAs (Non Performing Assets) both gross and net Current Year’s Amount in NPR

S.N. Non Performing Assets Gross Amount Net Amount

1 Restructured / Rescheduled 66,689,228 58,353,074.26


2 Substandard 49,918,549 37,438,911.63

3 Doubtful 41,819,310 20,909,654.77

4 Loss 515,571,821 -

Total 673,998,907 116,701,640.65 NPA Ratios

S.N. Particulars Current Year (%)

1 Gross NPA to gross advances 2.49%

2 Net NPA to net advances 0.44% Movement of Non Performing Assets

Amount in NPR

S.N. Non Performing Assets Previous Year Change Current Year

1 Restructured / Rescheduled 68,732,063 (2,042,835.47) 66,689,228

2 Substandard 49,785,517 133,032.21 49,918,549

3 Doubtful 258,697,625 (216,878,315.38) 41,819,310

4 Loss 541,099,299 (25,527,478.00) 515,571,821

Total 918,314,503 (244,315,596.64) 673,998,907 Write Off of Loan and Interest Suspense

Amount in NPR


1 Loan Write Off 9,581,198

2 Interest Suspense Write Off 35,304,926

Movement of Loan Loss Provision and Interest Suspense Amount in NPR

S.N. Particular Previous Year Change Current Year

1 Loan Loss Provision 910,387,883 (86,035,899.01) 824,351,984

2 Interest Suspense 280,034,755 (68,572,626.93) 211,462,128 Details of additional loan loss provision

Current Year’s Amount in NPR

S.N. Loan Classification Additional provision

1 Good 48,152,833

2 Restructured / Rescheduled (255,354)

3 Substandard 33,258

4 Doubtful (108,439,158)

5 Loss (25,527,478)

Total (86,035,899) Segregation of investment portfolio

Amount in NPR

S.N. Investment category Current Year

1 Held for trading -

2 Held to maturity 4,837,654,635

3 Available for sale 24,935,500

Total 4,862,590,135


Risk Assessment/Mitigation Practices at Kumari Bank Limited Considering the need to establish effective Risk Management and Risk Mitigation practices at Kumari Bank Ltd, we have developed a system of continuous improvement of processes wherein each member of the Bank works towards balancing profitability with prudence. The system encompasses all banking functions from client interface, to back office operation, to the strategic decision formulated by the management committees and the Board of Directors. Each area has its own check and balance procedure to assess and mitigate risks involved. The practices thus observed are as follows:

KBL Organization Structure The bank’s lending approval authority is divided into two distinct units, namely Business and Risk Management. While the Business Unit concentrates more on optimum utility of assets, every lending decision of this Unit is re-assessed and revaluated by the Credit Risk Management Unit for final approval. The Credit Risk Management Unit applies its objective judgement on risk variables deemed appropriate in each instance of lending decision. For this purpose, the Credit Risk Management Unit has two distinct subunits, the Credit Risk Management Department, which facilities final lending decision after duly adjusting risks as mitigated to an acceptable level, and the Credit Administration and Compliance Department , which evaluates the endorsed paperwork prior to actual sanction, and also after it.

Depending upon the volume of loans and the nature of risk associated, lending decision are subject to validation and approval by various levels of the hierarchy, in which some lending decision are to be approved by the CEO, and other by even the Board of Directors as each case may require.

Risk Measurement Criteria and Mitigation Process Credit risks are evaluated from the initial customer interface on an array of risk variables by the Credit Policy Guidelines of the Bank, as well as on the individual intuition of experienced officers. As proposals are escalated for approval, judgmental and analytical criteria become broader and more conceptual.

Kumari Bank Ltd. uses the best practices in banking, to make its operation secure through a system of procedural crosschecking mechanism in each operational transaction. An Internal Audit Department, continuously functions to alert bank personnel to the meticulousness required in handling operations in every functional department. A credit monitoring system is well established in the Bank, which periodically checks on credit quality, compliance, and level of risk exposure. This practice has created a continuous learning and improvement environment, and the Bank’s efficiency goal has been to move towards the most prudent practices in the industry. Types of eligible credit risk mitigants used and the benefits availed under CRM -

Particular Eligible CRM Deposit with Bank & Cash Margin 142,064,042

RISK MANAGEMENT FUNCTION


ATM LOCATIONSINSIDE KATHMANDU VALLEY

OUTSIDE KATHMANDU VALLEY

Bhairahawa ATMKumari Bank Limited, Bhairahawa Branch, Narayan Path Bhairahawa

Pokhara ATM IChiple Dhunga, Pokhara, Kaski

Pokhara ATM IILakeside, Opposite to Lalupate Marga

Jhapa ATMKumari Bank Limited, Birtamode Jhapa

Baglung ATMKumari Bank Limited Mahendra Path Baglung

Narayangadh ATMKumari Bank Limited Narayangadh Branch, Pulchowk, Narayangadh

Biratnagar ATMKumari Bank Limited, Goshwara Road, Morang Byapaar Sangh Building, Biratnagar, Morang

Birgunj ATM IKumari Bank Limited, Adarsha Nagar, Birgunj, Parsa

Birgunj ATM IINational Medical College

Itahari ATMKumari Bank Limited, Pathivara Market , Dharan Road, Itahari, Sunsari

Urlabari ATMKumari Bank Limited, Urlabari, Morang

Butwal ATMInfront of Kumari Bank Limited, Ram Mandir Line, Butwal

Nepalgunj ATMSurkhet Road, Dhambhoji, Nepalgunj

Dhangadi ATMRatopul, Dhangadi, Kailali

Surkhet ATMBirendra Nagar, Surkhet

Damauli ATMKumari Bank Limited,Damauli-2

Sauraha ATMBacchauli-2, Sauraha, Chitwan

Salyan ATMKumari Bank Limited, Khalanga, Salyan

Tulsipur ATMB.P. Chowk, Tulsipur, Dang

Kawasoti ATMKumari Bank Limited, Sabhapati Chowk, Kawasoti

Okhaldhunga ATMKumari Bank Limited, Rambazar, Okhaldhunga

Mahendranagar ATMKumari Bank Limited, Mahendranagar

Nijhgadh ATMKumari Bank Limited, Nijhgadh

Kohalpur ATMKumari Bank Limited, Kohalpur

Musikot ATMKumari Bank Limited, Musikot

Putalisadak ATM I & IIKumari Bank Limited, Right to Main Entrance Gate, Putalisadak, Kathmandu

Putalisadak ATM III & IVKumari Bank Limited, Ground Floor (Lobby), Putalisadak, Kathmandu

New Road ATMKumari Bank Limited, New Road,Kathmandu

New Baneshwor ATMRoyal Thai Restaurant premise, Near Everest Hotel, New Baneshwor Chowk, Kathmandu

Ratna Park ATMNepal Electricity Authority Building, Ratna Park, Kathmandu

Thamel ATMFire Club Building, Thamel, Kathmandu

Kantipur Mall ATMKumari Bank Limited, Kantipur Mall, Gongabu

Koteshwor ATMKoteshwor, Kathmandu

Durbarmarg ATMKumari Bank Limited, Durbarmarg, Kathmandu

Chuchhepati ATMKumari Bank Limited, Chuchhepati, Chabahil

Buddhanilkantha ATMKumari Bank Limited, Buddhanilkantha, Kathmandu

Old Baneshwor ATMKumari Bank Limited, Old Baneshwor, Kathmandu

Kumaripati ATMKumari Bank Limited, Kumaripati, Lalitpur

Naxal ATMOpposite Police Head Quarter, Naxal, Kathmandu

Lazimpat ATMBig Mart Building (Way to Hotel Radisson), Lazimpat, Kathmandu

Jhamsikhel ATM8 Degrees Fine Dine & Venues (opposite St. Mary’s Bus Stop), Jhamsikhel, Lalitpur

Mangal Bazar ATMYala Guest House premise, Patan Durbar Square (Near Honacha)

Balkhu ATMBalkhu Chowk

Kalanki ATMMillennium House, Near Kalanki Chowk

MEMBER GROUP NETWORK

Nepal Investment Bank ATM Network

Rastriya Banijya Bank ATM Network

Global Bank ATM Network

Siddhartha Bank ATM Network

Prime Commercial Bank ATM Network

NCC Bank ATM Network

National Payment ATM Network

BRANCHES


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Corporate Office:P.O. Box: 21128, Durbarmarg, KathmanduTel: 01-4221311, 01-4221314 | Fax: 01-4226644Email: [email protected],kumaribank.com

Head Office:Putalisadak, KathmanduTel: 01-4232112, 4232113 | Fax:014231960Email:[email protected]