fourteenth annual report (english)

5

Kumari Bank Annual Report 2013/14

Board of directors’ reportfor fourteenth annual General MeetinG

Respected Shareholders.On behalf of the Board of Directors, we would like to welcome all the shareholders, invited representatives’, media representatives and assisting staffs to the fourteenth Annual General Meeting of Kumari Bank Ltd. We are delighted to present you this bank’s financial status, its achievement and future prospects in this fourteenth Annual General Meeting. We have reached 14th year of service collecting all good and bad experiences and learning lessons from such experiences. From its inception, this bank has been achieving continuous progress through modern banking technology and practices. 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 2070/71.

1. A holistic view of the transactions in the past years

Table 1: Financial look at the bank’s past 5 years’ performance Amount in Rs. million

Fiscal year 066/67 067/68 068/69 069/70 070/71

ParticularsPaid-up Capital* 1,306.01 1,603.80 1,603.80 1,828.33 2,431.68

Deposit 17,432.25 16,986.28 21,985.20 25,318.57 27,578.38

Loans, Borrowings & Advances 14,966.08 14,926.23 18,101.34 20,119.79 22,808.50

Fixed Asset (Net) 285.64 306.28 277.27 255.86 235.78

Interest Income 1,871.07 2,251.79 2,441.58 2,464.31 2,410.78

Interest Expense 1,188.92 1,566.55 1,622.49 1,486.28 1,575.31

Net Interest Income 682.15 685.24 819.09 978.03 835.47

Other Income 164.35 190.06 203.36 237.05 330.83

Operating Expense 345.36 380.93 406.32 434.27 461.82

Operating Profit before loan loss provision 501.14 494.38 616.13 780.81 704.48

Operating profit 488.06 380.60 429.09 466.19 468.16

Net Profit/ (Loss) 316.54 251.24 275.50 291.45 341.65

Dividend Per Share 12.01 8.44 7.00 14.74 34.74

*Paid-up Capital of FY 2070/71 includes Bonus Share.

Looking at the performance of the past 5 years, it is evident that the bank has had a significant increment in this financial business. In the past years, the bank has had a good deposit collection and had increased the area of loan and to cope up with increased financial transaction, bank had increased the capital as well. The bank has been able to increase its profit along with its balance sheet size.

A comparison between the fiscal year 2069/70 and 2070/71 shows that bank achieved growth in deposit and loan by 8.93% and 13.36% respectively. Due to minimization of spread rate of Interest on Loans and Deposits has reduced Net Profit by 14.58%. Other Operating Income increased by 40% in FY 2070/71 whereas operating expenses growth limited to 6.34% only. Likewise, Operating Profit of bank increased by 0.42% and Net Profit increased by 17.23%. With the experiences gained from the past, the bank shall strive to perform better in the days to come.


6

2. Reviewing national/ international economy: International Monetary Fund has estimated that the world economic growth in the year 2015 is to be

at around 3.9%. Similarly, it is projected to increase United States’ economy by 2.8% and European economy by 1.2% in 2014. The economy of emerging and developing countries are expected to grow by 4.9%. At the same time, Indian and Chinese economies are expected to grow respectively at 5.4& and 7.5%. Developed countries including United States, European countries and Japan are affected by recession from a long period is expected to improve in 2014/15. Due to significant increment rate in recession is still expected to affect European economy. Some amount of risk of recession is still expected to impact the European economy. World Economy has moved towards improvement from recession but with persistent risks and challenges.

7


Demand side is still weak in the world economy. In this perspective, there is less pressure in global inflation. According to International Monetary Fund’s projection in the year 2014 will be 1.5% in developed countries. Similarly, inflation rate in emerging and developing countries will be at around 5.5% in 2014. At the same time, according to International Monetary Fund’s projection, inflation rate of China and India will be 3% and 8% respectively.

In fiscal year 2070/71, due to favorable climate, there was growth in agricultural products along with security and labor; which led improvement in non-agricultural sector, Gross Domestic Product (GDP) rate as compared to the last fiscal year.

In review period, GDP is in the rise as compared to the last fiscal year. According to Central Beaureu of Statistics, the actual base rate of GDP is at 5.2% and production is at 5.5% which was 3.5% and 3.9% respectively. In the review period, growth percentage of agricultural and non-agricultural sector is expected to be 4.7% and 5.3% respectively; which was 1.1% and 4.6% in last fiscal year. In the review period, industrial sector and service sector under the non-agricultural sector grew by 2.7%and 6.1% respectively; which was 2.5% and 5.2% respectively. On the basis of Consumer Price Index (CPI) for 11 months, the average inflation rate for fiscal year 2070/71 is 9.1%; which was 9.9% in previous year. The price hike in edible products like fruit and vegetable, meat and fish, egg and milk products; weak supply, energy crisis, weakening exchange rate and high price of petroleum products and Indian inflation rate causing overall pressure to our inflation. Per Capita expenses increment was up to 14.9% where as production remained the same that has also affected country’s inflation rate.

Total export has increased by 16.9% and total import increased by 27%. Import basis and increment rate is higher as compared to export; as a result the export import ratio of 11 months for the fiscal year 2070/71 limited to 12.7%; which was 13.7% previous year.

Liquidity condition has eased and short term/ temporary interest rates are quite low in bank and financial institutions from the very beginning of the fiscal year 2070/71, in Asadh 2070, the weighted average of 91-days Treasury bill rate decreased to 0.02%, which was 1.19% in previous year. Commercial bank’s weighted average inter-banking rate decreased to 0.16% which was 0.86% last year. The weighted average of deposit is 4.22% and that of loan is 10.81%; which caused interest rate spread of 6.59%. The ratio of Loan/ Capital and Deposit of commercial banks has reached 73.5% in Baisakh 2071. The inactive loan of commercial banks reached 3.04% by Chaitra 2070. Considering total internal loan of 11 months, it increased to 7.1% as compared to 10.9% increment in previous year. Similarly, the deposit of financial institution has increased by 12.5% than that of 9.8% in previous year. Financial Institution’s gross loan for agriculture and energy has increased by 6.16% and 2.13% respectively.

After holding second constitutional election, excitement in investors eased liquidity scenario and decreasing interest rate led to increase in NEPSE Index by 99.9% to 1,036.1 in Asadh 2071. There is significant increment in trading amount also.

According to the data of Asadh End 2070, published by Nepal Rastra Bank, there are 30 A category, 84 B category, 53 C category and 37 D category, altogether there are 204 bank & financial institutions in operation. (Source: Nepal Rastra Bank Website)

3. Review of the Bank’s operations in FY 2070/71: 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 10%, which is Rs. 31.02 billion in fiscal year 2070/71.

A. Capital management: By the end of 2070/71, paid up capital of the bank has reached to Rs. 2.43 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 11.81%.

B. Deposit: Compared to the last fiscal year, deposit increased by 8.93% and the total deposit reached Rs. 27.57 billion.


8

Table 2: Comparative State of Deposits: Amount in Rs. million

Deposit FY 070/71 % of total deposit FY 069/70 % of total depositCurrent 1,391 5.04 1,175 4.64

Savings 7,234 26.23 6,823 26.95

Call 6,812 24.70 5,968 23.57

Fixed 12,142 44.03 11,353 44.84

Total 27,579 100.00 25,319 100.00

C. Loans, borrowings and advances: In fiscal year 2069/70, the bank’s total loan was Rs. 20.11 billion, while at the end of review year, it increased by 13.36% reaching Rs. 22.80 billion. The bank has distinguished its lending into personal loans, education loans, small business loans, organizational loans and development projects loan. During the review period, bank’s inactive loan was 4.03 %, but the gross inactive loan ratio was only 1.04%. The bank suffered from the low movement in real estate, just like other banks. Because of this, the inactive loan has increased. We would like to inform you that we shall regulated these loans in the days to come.

In FY 2069/70, the loans of real estate amounted to Rs. 2.18 billion, which the bank brought down by 7% to Rs. 2.04 billion. Nepal Rastra Bank directed real estate loan should not exceed 25% whereas the bank has reduced it to 8.95% only at the end of Ashadh 2071. All the commercial banks in Nepal have been able to bring down the percentage only by 5%. (Source: Unpublished Financial Data). In this context, the bank’s management is working vigorously to minimize the risk of real estate loans.

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 Rs. 2.36 billion in NG’s treasuring bills making the total investment of the bank to be Rs. 3.16 billion by the end of FY 2070/71.

E. Profit: During the review period, interest rates of loan and deposit have decreased in the bank along with that of financial institutions; which resulted decrease in net interest income by 14.58%. In fiscal year 2070/71, the bank successfully achieved other operating income of 40% whereas operating expense limited to 6.34% only. Similarly, the banks’ operating income increased by 0.42% resulting increment in net profit by 17.23% in the same year.

F. Contribution to Government Revenue: The bank has already paid Rs. 148.2 million as corporate tax to the government during this year’s review period in comparison to the entire FY 2069/70 when Rs. 123 million was paid in tax.

G. Products and Services: In the review period, the bank has introduced advantageous products and services for its customers. The agreement between JME and the bank was held to bring online remit service. As per the agreement, the fund transferred from Japan routed through JME could be provided amongst customers via all branches of Kumari bank and almost 1500 agents of Kumari Remit. Similarly, there has been agreement between Kumari bank and Sanima bank to provide remittance service through 27 branches of Sanima bank also. The bank itself has been providing bill payment facility to NTC ADSL service users. This service facilitates the customers to pay for NTC ADSL service from any branch of Kumari bank, via Kumari Mobile Banking or Internet Banking as well. Also, the customers can make bill payments for NTC Prepaid Recharge Card, Worldlink Recharge Card, NTC postpaid bill, NTC landline bill, Ncell postpaid bill and others.

The bank has been introducing newest and the most modern products and services since its inception. Technologically sound and modern services have helped the bank reach a respectable position in the financial market. The bank is even more resilient to bring newer services and added features for easier access of the products to people. Our products and service areas encompass education loan,

9


exports-imports business, hybrid loan, remittance service, and various types of deposit service and others as well. Products that are introduced to cope up with the market competition like Visa Electron Debit Card, Visa Prepaid card, Internet Banking, eSewa, SMS Banking, Kumari Mobile Banking and others have been very popular. Visa Electron, Dollar Debit cards can be accessed via VISA network in Nepal, India and any other part of the world. The bank has been continuously working towards adding remittance agency in order to provide better access to sending and receiving funds from inside and outside the country via Kumari Remittance Software.

H. Branch and Network Expansion: The bank extended 6 new branches this fiscal year. Currently, the bank has 25 branches outside valley and 9 branches inside valley, altogether 34 branches, 2 extension counters and 40 ATMs. Moreover, the bank is planning to introduce 2 new branches inside Kathmandu valley.

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 should be followed compulsorily.

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.

a. Loan Risk Management: To manage loan risks, the bank as taken up a policy to determine the loan risk segments and invest in the least risky segment. And, the bank has given priority to concentrated risk minimization.

b. Operating Risk Management: All activities related to the bank’s operations are based on given policies and guidelines and clearly stated work ethics and implementation. Because of this, we are confident that operating risks are being managed well.

c. Liquidity Risk Management: Consideration the scenario of maximum liquidity and liquidity crunch on time, the bank determines various financial source and investment area in order to maintain balanced liquidity. The bank has followed the instructions of NRB regarding liquidity.

d. Market Risk Management: 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.

K. Corporate Social Responsibility: The bank is aware of its social responsibilities along with this professional intent as well. The bank has been providing scholarship to children via HOPAD Child and Women Promotion Society (NGO) as part of CSR. The bank has provided 3 days free health camp service to flood victims in Sindhupalchowk area through Indrawatee Community Service Centre. Similarly, bank provided financial support to flood victims through Nepalgunj branch. The bank provided educational materials to Dhaulagiri Deaf School, Baglung for deaf students. The bank also held Banking Literacy Campaign in Balaju Engineering College focusing awareness in banking and advantages of saving. It is our responsibility to retain our culture. So, the bank also supports the organizer of Kumari Jatra by providing financial supports. The bank also conducts blood donation program, school and colleges’ development programs and supports various clubs in frequent basis in order to participate social activities.

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:


10

a. Audit committee: In accordance with Section 164 of the Company Act, an audit committee was in place comprising of Directors Naresh Dugar and bank’s internal audit chief member under the convenorship of Non-executive Director Prof. Rajan Bahadur Paudel. The bank’s internal audit division reports directly to this committee.

b. 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 director Santosh Kumar Lama, Director Rashindra Bahadur Malla and head of human resource department under the convenorship of Director Dr. Shobha Kant Dhakal.

c. Risk management sub-committee: In order to correctly identify and eradicate the risks of the bank, a committee comprising Director Prof. Dr. Rajan Bahadur Paudel, Director Puna Ram Bhandari and head from the respective department under the convenorship of Director Uttam Prasad Bhatarai is placed in the sub-committee for formulation of 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.

d. 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 convenorship of the CEO in order to implement the bank’s activities more effectively: management committee, asset and liability management committee, labor relations, pricing committee, HR committee, discipline and performance review committee, and bad loans recovery committee.

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, 362 staffs are working in the bank. During the review period, our staffs were involved in various porting and social activities as well.

Current year’s achievements and programs: These are the financial status of the current year till the end of Bhadra month.

Table3:Currentyear’sfinancialglimpse: Amount in Rs. Million

Titles 2071 Bhadra month’s end

2070 Bhadra month’s end Change (Rs.) Change %

Paid-up Capital 2,431.68 1,828.33 603.35 33.00

Deposit 28,987.23 25,642.17 3,345.06 13.05

Loans, Borrowings and Advances 23,481.95 20,114.32 3,367.63 16.74

Investment (Net) 3,508.39 4,463.72 (955.33) (21.40)

Interest Income* 386.26 426.73 (40.47) 9.48

Interest Expense 242.24 290.27 (48.03) (16.55)

Net Interest Income 144.02 136.46 7.56 5.54

Other Operating Income 49.68 50.59 (0.91) (1.80)

Operating Expense 77.08 69.05 8.03 11.63

Operating Profit/ (Loss) before the loan loss provision 116.62 118.00 (1.38) (1.17)

*On the basis of Accruals against Loans.

11


Programs for Current Year:

In the current fiscal year, bank has targeted to increase its loan and investment respectively to Rs. 27.71 billion and Rs. 4.57 billion. Likewise, the deposit amount is targeted to keep at Rs. 33.37 billion. In the current fiscal year, bank has set target of earning Rs. 1.46 billion operating income, Rs. 847.8 million operating profit and Rs. 508.3 million net profits. Meanwhile, the operating expense is expected to be 615.5 million.

In the current fiscal year, bank has opened 6 new branches outside the valley and planning to operate 2 new branches inside the valley. In the current fiscal year, bank has target of constructing its own building in Naxal.

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 people. 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 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 via Kumari Mobile Banking services and Kumari Branch Less 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: In the review period, the representatives of board members Mr. Noor Pratap J.B. Rana, Mr. Uttam Prasad Bhattarai and Mr. Naresh Dugar were re-elected and Mr. Santosh Kumar Lama was elected from 13th Annual General Meeting. Similarly, Mr. Puna Ram Bhandari was elected from public group of directors. We welcome all the elected directors in new working period. In addition, we thank Mr. Amir Pratap J.B. Rana and Mr. Rishi Agrawal representing promoter group for rendering service to bank during their working period.

6. Major issues affecting business: Decreasing spread in interest rate of Loan and deposit, fluctuation in market’s liquidity, decreasing interest rates in Government bonds (Treasury bills), continuous recession in real estate business, energy crisis, increasing competition in financial sector etc are main factors effecting business. Such decreasing spread in interest rate of loan and deposit, decreasing interest rate in government bonds and increasing operating expenses etc. are expected to have adverse effect on overall profit of the bank.

7. Board of Directors’ responses to the auditor’s report: Except 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. Because the financial details of FY 2070/71 were accepted by Nepal Rastra bank on 2071/06/14, the received 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 33% bonus share from its Paid-Up Capital i.e. NPR 603.3 million and 1.74% cash dividend on Tax on Bonus Share as proposed by the Board of Directors i.e. NPR 31.7 million which makes total amount of NPR 635.1 million as total dividend.

9. Forfeited shares: in the reported year, no shares have been forfeited.


12

10. Progress of the bank and its subsidiary companies: The 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 2070/71 and any important changes in business activities: The 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 shareholder: None.

13. Details of share holding by the company’s directors and office bearers in the previous FY andinformation provided by them about their involvement in the trading of company shares, if any: No information as such.

14. Information about any agreements concerning the bank that service the self interest of any director or people close to them: None.

15. Details about re-purchase of shares: None.

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 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 costs: The Bank’s operating costs in FY 2070/71 were as follows:

Staff expenses: NPR 221,701,158

Other operating costs: NPR 240,120,657

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 committee: According to the Company Act, Section 164, the audit committee is comprised of Directors Naresh Dugar and bank’s internal audit head, Niraj Rai, as member under the convenorship of Non-Executive Director Prof. Dr. Rajan Bahadur Poudel. This committee has had 10 sittings in FY 2070/71. 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 of the board of directors. The bank’s internal audit department reports directly to the audit committee.

19. Information about any cash balance to be paid to the Bank by Director, Managing Director, Chief ExecutiveOfficer,Bank’sPromotersortheircloserelativesorfirmassociatedwiththem,companyororganization: None.

20. Details about salaries, allowances and facilities provided to directors, managing director, CEO and other executives:

a. 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 Rs. 10,000 to the chairperson and Rs. 8,000 to the members. Also, Rs. 2,000 per month is being provided for media and daily newspapers. The bank has not provided the directors with any other facilities than the above. In FY 2070/71, Rs. 1,936,000 (in words, Rs. 1.936 million) has been paid as meeting and media allowances to the directors.

13


b. Annual Salary, Allowances and services for CEO and other executives/ managers for the F/Y 2070/71:

Amount in NPR.

S.No. Salary and services CEO Managers1 Salary 5,492,475.80 27,995,402.04

2 Allowances 98,927.42 8,388,436.39

3 Provident Fund 549,247.58 2,790,108.99

4 Vehicle maintenance 4,838.71 736,341.52

5 Medical Treatment (annual + accumulated ) 113,972.60 2,021,376.70

6 Dashain Allowance 495,000.00 2,998,077.00

7 Leave (annual + accumulated) 1,067,783.76 4,712,428.10

8 Insurance 158,376.00 2,132,778.88

9 Gratuity 15,205.70 5,460,684.86

10 Others 80,645.16 120,733.45

Total 8,076,472.73 57,356,367.93

Note: Under the medical and leave expense of CEO, the remaining expenses of medical and leave of Acting CEO is also included.

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 DCEO ;and according to the bank’s policy on transportation, vehicle loan, fuel and repair allowance 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 Rs. 9,985,798 (in words: Rs. 9.98 million) from the distributed cash dividend till Ashadh end 2071.

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: None.


14

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., general public and all other concerned who have continuously provided their support, encouragement and guidance. We would also like to thank our statutory auditors Mr. GP Rajbahak and Company 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

Noor Pratap J.B. Rana Prof. Dr. Rajan Bahadur Paudel

(Chairman) (Director)

Date: 26th Ashwin 2071

Management Team

From left StandingMr. Bikash Khanal- Head Corporate CreditMr. Binod N. Shrestha- Head Central LogisticsMr. Tika Ram Chapagain- Chief Regional Officer (Eastern)Mr. Rajesh Shrestha- Branch Manager, Newroad

Bishwa Mani Regmi, Head- Retail

Pankaj SJB Rana, Head- Card

Yemi Karki, Head- Credit Risk Management

Rena Rijal, Head- Institutional Banking & Remittance

Sipa Regmi, Head- Marketing & Corporate Communication

Nirmal K. Khatiwada, Head- Finance & Treasury

Ishor Gurung, Head - SME

Niraj Rai, Head - Internal Audit

Dinesh Nidhi Tiwari, Head - Recovery

Vishal Rauniyar, Head - Credit Administration & Compliance

Namita Shakya, Head - Branch Operations

Milan K. Maskey, Head - Foreign Trade

From Left SeatedMr. Suresh K. Karna- Chief Marketing OfficerMr. Narendra P. Chhatkuli- Head Legal and ComplianceMr. Rajib Giri- Acting CEOMr. Ajit P. Bhattarai- Head OperationsMr. Geha N. Dhungana- Chief Operations Officer

��

Supporting Indrajatra Festival “Parijat Mushroom Farming at Sangla-9, Kathmandu”, funded by Kumari Bank Ltd.

Kumari Bank Ltd., Okhaldhunga branch provided financial support to Mr. Tej Bahadur Karki “World Wheel Chair Traveler”

Financial support to landslide victims in Banke

Kumari Bank Ltd.,Baglung provided educational materials to Dhaulagiri Deaf School, Baglung

Kumari Bank Ltd. set up drinking water facility to the devotees visiting Budhanilkantha Temple on the occasion

of Haribodhani Ekadashi

29


KuMari BanK liMited Balance sheet

as at ashad end 2071 (16 July 2014)

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

Uday K UpadhyayaChief Executive Officer

Santosh Kumar LamaDirector

As per our report of even date

Noor Pratap JB RanaChairman

Geha Nath DhunganaChief Operation Officer

Uttam P. BhattaraiDirector

Nirmal Kumar KhatiwadaHead-Finance and Treasury

Dr. Shobha Kant DhakalDirector

Prof. Dr. Rajan B. PaudelDirector

Date: 16 September 2014Place: Durbar Marg

Rashindra Bahadur MallaDirector

CA. Rajnish DahalPartnerDev AssociatesChartered Accountants

Puna Ram BhandariDirector

Naresh DugadDirector

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

Capital and Liabilities Schedule Current Year (Rs.) Previous Year (Rs.) 1. Share Capital 4.1 2,431,681,560 1,828,332,000

2. Reserves and Funds 4.2 534,924,396 828,374,231

3. Debentures & Bonds 4.3 - -

4. Borrowing Outstanding 4.4 201,951,900 -

5. Deposit Liabilities 4.5 27,578,376,145 25,318,568,802

6. Bills Payable 4.6 22,428,891 21,348,138

7. Proposed Dividend Payable 31,755,240 11,817,474

8. Income Tax Liabilities -

9. Other Liabilities 4.7 219,483,913 214,129,111

Total Capital and Liabilities 31,020,602,045 28,222,569,756

Assets Schedule Current Year (Rs.) Previous Year (Rs.) 1. Cash Balance 4.8 777,836,820 638,769,784

2. Balance with Nepal Rastra Bank 4.9 3,829,349,524 2,537,960,922

3. Balance with Banks/Financial Institution 4.10 288,499,107 230,152,674

4. Money at Call and Short Notice 4.11 507,478,409 753,410,000

5. Investment 4.12 3,164,625,890 4,135,142,087

6. Loans, Advances and Bills Purchase 4.13 21,898,115,132 19,369,317,883

7. Fixed Assets 4.14 235,775,955 255,864,841

8. Non Banking Assets 4.15 - -

9. Other Assets 4.16 318,921,208 301,951,565

Total Assets 31,020,602,045 28,222,569,756


30

KuMari BanK liMitedprofit and loss account

froM 1st shrawan 2070 to 32 asadh 2071 (froM 16 July 2013 to 16 July 2014)

Particulars Schedule Current Year (Rs.) Previous Year (Rs.) 1. Interest Income 4.18 2,410,784,399 2,464,306,976

2. Interest Expenses 4.19 1,575,311,889 1,486,281,639

Net Interest Income 835,472,510 978,025,337 3. Commission and Discount 4.20 188,725,481 138,199,665

4. Other Operating Income 4.21 56,944,610 41,861,784

5. Exchange Fluctuation Income 4.22 85,155,477 56,993,498

Total Operating Income 1,166,298,078 1,215,080,284 6. Staff Expenses 4.23 221,701,158 203,805,242

7. Other Operating Expenses 4.24 240,120,657 230,469,644

8. Exchange Fluctuation Loss 4.22 -

Operating Profit before Provision for Possible Losses 704,476,263 780,805,397 9. Provision for Possible Losses 4.25 236,311,721 314,618,980

Operating Profit 468,164,542 466,186,417 10. Non Operating Income /(Expense) 4.26 2,540,345 (11,134,197)

11. Loan Loss Provision Written Back 4.27 76,151,082 5,258,602

Profit from Regular Activities 546,855,969 460,310,821 12. Profit/Loss from Extra-ordinary Activities 4.28 - -

Net profit after Considering All Activities 546,855,969 460,310,821 13. Provision for Staff Bonus 49,714,179 41,846,438

14. Provision for Income Tax 155,486,824 127,016,018

* Current Year's 148,173,334 126,075,028

* Upto Previous year 5,298,717 -

* Deferred Tax 2,014,772 940,989

Net Profit/Loss 341,654,966 291,448,365

Schedule 4.18 to 4.28 a form an integral part of Profit and Loss Account















31


KuMari BanK liMitedprofit and loss appropriation accountfroM 1st shrawan 2070 to 32 asadh 2071

(froM 16 July 2013 to 16 July 2014)















Particulars Schedule Current Year (Rs.) Previous Year (Rs.)Income1. Accumulated Profit up to Last Year 4,700,386 14,196,807

2. This Year's Profit 341,654,966 291,448,365

3. Exchange Fluctuation Fund -

4. Bond Redemption Reserve 400,000,000

5. Share Premium 4,438,289

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

Total 746,355,352 710,083,461 Expenses1. Accumulated Loss up to Last Year -

2. Current Year's Loss -

3. General Reserve Fund 68,330,993 458,289,673

4. Contingent Reserve -

5. Institution Development Fund -

6. Dividend Equalization Fund -

7. Staff Related Reserves -

8. Proposed Cash Dividend 31,755,240 11,817,474

9. Proposed bonus share from Capital Adjustment Fund & Current Year's Profit

603,349,560 224,532,000

10. Special Reserve Fund -

11. Exchange Fluctuation Fund 5,879,623 2,714,918

12. Bond Redemption Reserve Fund -

13. Previous Year's Tax Adjustment -

14. Deferred Tax Fund (230,329) (940,989)

15. Investment Adjustment Reserve 11,000,000 8,970,000

Total 720,085,087 705,383,075 16. Accumulated Profit/(Loss) 26,270,265 4,700,386


32

Uda

y K

Upa

dhya

yaC

hief

Exe

cutiv

e O

ffice

rS

anto

sh K

umar

Lam

aD

irect

or

As

per o

ur re

port

of e

ven

date

Noo

r Pra

tap

JB R

ana

Cha

irman

Geh

a N

ath

Dhu

ngan

aC

hief

Ope

ratio

n O

ffice

r

Utta

m P

. Bha

ttara

iD

irect

or

Nirm

al K

umar

Kha

tiwad

aH

ead-

Fina

nce

and

Trea

sury

Dr.

Sho

bha

Kan

t Dha

kal

Dire

ctor

Pro

f. D

r. R

ajan

B. P

aude

lD

irect

or

Dat

e: 1

6 S

epte

mbe

r 201

4P

lace

: Dur

bar M

arg

Ras

hind

ra B

ahad

ur M

alla

Dire

ctor

CA

. Raj

nish

Dah

alP

artn

erD

ev A

ssoc

iate

sC

harte

red

Acc

ount

ants

Pun

a R

am B

hand

ari

Dire

ctor

Nar

esh

Dug

adD

irect

or

Ku

Ma

ri

Ba

nK

liM

ite

ds

tat

eM

en

t o

f c

ha

nG

es

in

eq

uit

yfr

oM

1s

t s

hr

aw

an

207

0 to

32

as

ad

h 2

071

(fr

oM

16

July

201

3 to

16

July

201

4)

Part

icul

ars

Sha

re C

apita

l A

ccum

ulat

ed

Pro

fit/L

oss

Gen

eral

R

eser

ve F

und

Cap

ital

Adj

ustm

ent

Fund

Sha

re

Prem

ium

Exc

hang

e

Fluc

tuat

ion

Fund

Def

erre

d Ta

x Fu

nd

Oth

er

Res

erve

&

Fund

Tot

al A

mou

nt

(Rs.

)

Ope

ning

Bal

ance

1

,828

,332

,000

4

,700

,386

7

99,0

82,4

88

- -

14,

511,

420

1,0

79,9

36

9,0

00,0

00

2,6

56,7

06,2

31

Adj

ustm

ents

6

03,3

49,5

60

21,

569,

879

(331

,669

,007

) -

- 5

,879

,623

(2

30,3

29)

11,

000,

000

309

,899

,726

N

et P

rofit

for t

he P

erio

d 3

41,6

54,9

66

341

,654

,966

Tra

nsfe

r to

Gen

eral

Res

erve

(6

8,33

0,99

3) 6

8,33

0,99

3 -

Cap

ital A

djus

tmen

t Fun

d

(400

,000

,000

) 4

00,0

00,0

00

-

Dec

lara

tion

of D

ivid

end

(31,

755,

240)

(31,

755,

240)

Exc

hang

e Fl

uctu

atio

n Fu

nd

(5,8

79,6

23)

5,8

79,6

23

-

Rig

ht S

hare

Issu

ed

-

Tra

nsfe

r to

Ret

aine

d E

arni

ngs

-

Pro

pose

d B

onus

Sha

re

603

,349

,560

(2

03,3

49,5

60)

(400

,000

,000

) -

Deb

entu

re R

edem

ptio

n R

eser

ve

-

Pre

viou

s Ye

ar ta

x A

djus

tmen

t -

Def

erre

d Ta

x Fu

nd

230

,329

(2

30,3

29)

-

Inve

stm

ent A

djus

tmen

t Res

erve

(1

1,00

0,00

0) 1

1,00

0,00

0 -

Sha

re P

rem

ium

-

Clo

sing

Bal

ance

2

,431

,681

,560

2

6,27

0,26

5 4

67,4

13,4

82

- -

20,

391,

043

849

,607

2

0,00

0,00

0 2

,966

,605

,956

33


KuMari BanK liMitedcash flow stateMent

froM 1st shrawan 2070 to 32 asadh 2071(froM 16 July 2013 to 16 July 2014)

Particulars Current Year (Rs.) Previous Year (Rs.) (A). Cash Flow from Operating Activities 1,266,582,023 79,266,237 1. Cash Received 2,758,129,300 2,643,075,766 1.1 Interest Income 2,416,108,749 2,408,500,581

1.2 Commission and Discount Income 255,013,852 176,527,316

1.3 Income from Foreign Exchange Transaction 85,155,477 56,993,498

1.4 Recovery of Loan Written off

1.5 Other Income 1,851,221 1,054,371

2. Cash Payment (2,131,224,225) (1,989,812,204) 2.1 Interest Expenses (1,584,428,529) (1,486,281,639)

2.2 Staff Expenses (221,701,158) (203,805,242)

2.3 Office Overhead Expenses (192,090,016) (176,725,322)

2.4 Income Tax Paid (133,004,522) (123,000,000)

2.5 Other Expenses

Cash Flow before Changes in Working Capital 639,676,948 (573,997,326)Increase/(Decrease) of Current Assets (1,564,807,175) (3,735,405,440) 1.(Increase)/Decrease in Money at Call and Short Notice 245,931,591 (432,166,859)

2. (Increase)/Decrease in Short Term Investment 945,276,348 (1,208,180,926)

3. (Increase)/Decrease in Loans, Advances and Bills Purchase (2,688,714,114) (2,076,778,289)

4. (Increase)/Decrease in Other Assets (67,301,000) (18,279,366)

Increase/(Decrease) of Current Liabilities 2,204,484,123 3,161,408,114 1. Increase/(Decrease) in Deposits 2,259,807,343 3,333,370,526

2. Increase/(Decrease) in Certificates of Deposits

3. Increase/(Decrease) in Short Term Borrowings (5,403,000)

4. Increase/(Decrease) in Other Liabilities (55,323,220) (166,559,412)

(B) Cash Flow from Investment Activities 20,268,149 4,989,550 1. (Increase)/Decrease in Long-term Investment 25,239,849 13,595,513

2. (Increase)/Decrease in Fixed Assets (27,888,169) (32,339,033)

3. Interest income from Long Term Investment 22,280,932 23,473,830

4. Dividend Income 635,536 259,241

5. Others

(C) Cash Flow from Financing Activities 201,951,900 (400,000,000) 1. Increase/(Decrease) in Long term Borrowings (Bonds,Debentures etc) (400,000,000)

2. Increase/(Decrease) in Share Capital -

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

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

(D) Income/Loss from Change in Exchange Rate in Cash & Bank Balances - - (E) This Year's Cash Flow from All Activities 1,488,802,071 (315,744,213)(F) Opening Balance of Cash and Bank Balances 3,406,883,380 3,722,627,593 (G) Closing Balance of Cash and Bank Balances 4,895,685,451 3,406,883,380


34

KuMari BanK liMited share capital and ownership


Schedule 4.1

Particulars Current Year (Rs.) Previous Year (Rs.)1. Share Capital1.1 Authorized Capital 2,000,000,000 2,000,000,000 a) 20,000,000 Ordinary Shares of Rs. 100 each 2,000,000,000 2,000,000,000

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

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

1.2 Issued Capital 1,828,332,000 1,603,800,000 a) 1,82,83,32,000 Ordinary Shares of Rs. 100 each 1,828,332,000 1,603,800,000

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

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

1.3 Paid Up Capital 1,828,332,000 1,603,800,000 a) 1,82,83,32,000 Ordinary Shares of Rs.100 each 1,828,332,000 1,603,800,000

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

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

1.4 Proposed Bonus Share 603,349,560 22,45,32,000

1.5 Calls in Advance - -

1.6 Total (1.3 + 1.4 + 1.5) 2,431,681,560 1,828,332,000

share ownershipas at ashad end 2071 (16 July 2014)

Particulars Current Year Previous Year A. Local Shareholders % Amount (Rs.) % Amount (Rs.) 1.1 Government of Nepal - -

1.2 "A" Class Licensed Institution - -

1.3 Other Licensed Institutions - -

1.4 Other Institutions (promoter and public both) 4.78 87,352,500 3.02 48,423,800

1.5 General Public (promoter and public both) 95.22 1,740,979,500 96.98 1,555,376,200

1.6 Others - -

B. Foreign ShareholdersTotal 100 1,828,332,000 100 1,603,800,000

35


ANNEXURE 1(A)

list of shareholders holdinG share capital of 0.5% or More as at ashad end 2071 (16 July 2014)

S.N. Name of the ShareholderCurrent Year Last Year

% Share Capital in NPR. % Share Capital in NPR. 1 Noor Pratap J.B. Rana 6.50 118,841,400 6.50 104,247,000 2 Amir Pratap J.B Rana 5.06 92,513,500 5.06 81,152,200 3 Sabitri Gurung 3.07 56,286,700 4.00 64,152,000 4 Bimala Devi Agrawal 2.75 50,363,400 3.78 60,568,500 5 Rishi Agrawal 2.40 43,879,900 2.40 38,491,200 6 Rajendra Prasad Shrestha 1.62 29,551,600 2.10 33,615,000 7 Bidhya Krishna Shrestha 1.34 24,421,300 1.83 29,403,000 8 Govinda Das Shrestha 1.09 20,038,000 1.50 24,057,000 9 Laxman Shrestha 1.22 22,414,600 3.20 51,282,800 10 Manju Taparia 1.01 18,452,400 1.01 16,186,300 11 Mahabir Prasad Goel 1.28 23,354,100 1.32 21,170,100 12 Yagya Pratap Rana 1.32 24,005,800 1.31 21,057,800 13 Santosh Kumar Lama 0.91 16,728,600 1.23 19,674,300 14 CIT Citizen Unit Scheme 0.75 13,712,400 0.75 12,028,500 15 Bhim Krishna Udas 0.79 14,374,600 1.00 16,038,000 16 Phurba Bangdel Lama 1.31 23,983,200 1.00 16,038,000 17 Anil Das Shrestha 0.73 13,320,600 1.00 16,038,000 18 Januki Kumari J.B. Rana 1.00 18,283,200 1.00 16,038,000 19 Birendra Kumar Shah 0.86 15,819,200 0.62 10,000,000 20 Prabhu Investment Pvt. Ltd. 0.74 13,420,400 - - 21 Sanjaya Lama 0.74 13,629,900 0.99 15,930,000 22 Ashok Kumar Baheti 0.94 17,297,300 0.62 10,000,000 23 Anupam Rathi 0.90 16,454,900 0.90 14,434,200 24 Manoj Kumar Goel 0.88 16,089,200 - - 25 Shiva Shanker Agrawal 0.88 16,016,000 0.88 14,049,200 26 Kumud Kumar Dugad 0.85 15,591,600 0.85 13,676,900 27 Santoo Shrestha 0.61 11,161,100 1.00 16,038,000 28 Shree Niwas Sharada 0.75 13,690,900 0.78 12,509,600 29 Jamuna Maheshwori Rathi 0.55 10,072,500 0.55 8,835,500 30 Life Insurance Corporation Nepal Ltd. 0.75 13,679,900 0.75 12,000,000 31 Nirmal Pradhan 0.51 9,350,000 0.84 13,406,900 32 Pradeep Kumar Murarka 0.70 12,798,300 0.70 11,226,600 33 Pashupati Murarka 0.70 12,798,300 0.70 11,226,600 34 Naresh Dugad 0.70 12,798,300 0.70 11,226,600 35 Bikash Dugad 0.70 12,798,300 0.70 11,226,600 36 Atmaram Murarka 0.60 10,988,300 0.60 9,639,000 37 Jagdish Prasad Chaudhary 0.60 10,969,900 0.60 9,622,800 38 Sharmila Aryal 0.60 10,969,900 0.60 9,622,800 39 Dev Kishan Mundada 0.60 10,969,900 0.60 9,622,800 40 Pravalaxmi Rana 0.59 10,726,100 0.59 9,408,900 41 Vidushi Rana 0.58 10,604,300 0.58 9,302,000 42 Rita K.C 0.52 9,594,000 0.52 8,415,700 43 Uttam Prasad Bhattarai 0.50 9,141,600 0.50 8,019,000 44 Rakshya Pahadi 0.50 9,141,600 0.50 8,019,000 45 Surendra Bhandari - - 0.50 8,019,000 46 Ganga Amatya - - 0.50 8,019,000 47 Antoo Shrestha - - 0.68 10,889,500 48 Sandeep Lama - - 0.50 8,019,000


36

Schedule 4.2

KuMari BanK liMitedreserves and funds


Schedule 4.3

KuMari BanK liMiteddeBenture and Bond


Particulars Current Year (Rs.) Previous Year (Rs.)

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

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

2. ………. - -

Total (1+2) - -

Particulars Current Year Rs. Previous Year Rs.1. General/Statutory Reserve Fund 467,413,482 799,082,488

2. Capital Reserve Fund -

3. Capital Redemption Fund -

4. Capital Adjustment Fund - -

5. Other Reserve & Funds 20,849,607 10,079,936

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 1,079,936

g. Other Free Fund

h. Other Reserve Fund

i. Investment Adjustment Reserve 20,000,000 9,000,000

j. Bond Redemption Reserve

6. Accumulated Profit/Loss 26,270,265 4,700,386

7. Exchange Fluctuation Fund 20,391,043 14,511,420

8. Share Premium

Total 534,924,396 828,374,231

37


Schedule 4.4

KuMari BanK liMitedoutstandinG loan (BorrowinGs)


Particulars Current Year (Rs.) Previous Year (Rs.)A. Domestic 1. Government of Nepal - -

2. Nepal Rastra Bank 201,951,900 -

3. Repo Obligations - -

4. Inter Bank and Financial Institutions - -

5. Other Organized Institutions - -

6. Others - -

Total (A) 201,951,900 - B. Foreign 1. Banks - -

2. Others - -

Total (B) - - Total (A+B) 201,951,900 -


38

Schedule 4.5

KuMari BanK liMiteddeposit liaBilities

as at ashad end 2071 (16 July 2014)Particulars Current Year (Rs.) Previous Year (Rs.)

1. Non-Interest Bearing Accounts A. Current Deposit 1,237,175,209 1,032,116,414 1. Local Currency 1,202,240,826 1,002,052,097 1.1 Government of Nepal

1.2 "A" Class Licensed Institutions 20,131,262 36,937,000

1.3 Other Licensed Financial Institutions 255,795,690 235,408,000

1.4 Other Organized Institutions 727,511,094 658,679,303

1.5 Individuals 198,802,780 71,027,794

1.6 Others -

2. Foreign Currency 34,934,383 30,064,318 2.1 Government of Nepal

2.2 "A" Class Licensed Institutions 5,061,523

2.3 Other Licensed Financial Institutions 192,000


2.5 Individuals 5,301 5,000

2.6 Others

B. Margin Deposits 147,197,848 137,462,504 1. Employees Guarantee

2. Guarantee Margin 60,202,728 60,436,821

3. Margin on Letter of Credit 86,995,120 77,025,683

C. Others 6,436,778 5,607,153 1. Local Currency 6,436,778 5,607,153 1.1 Financial Institutions -

1.2 Other Organized Institutions -

1.3 Individuals 6,436,778 5,607,153

2. Foreign Currency - - 2.1 Financial Institutions -

2.2 Other Organized Institutions -

2.3 Individuals -

Total of Non-Interest Bearing Accounts (1) 1,390,809,835 1,175,186,072

39


KuMari BanK liMiteddeposit liaBilities (continued….)


Particulars Current Year (Rs.) Previous Year (Rs.)2. Interest Bearing Accounts A. Saving Deposits 7,234,105,180 6,822,654,865 1. Local Currency 7,117,127,540 6,750,023,394 1.1 Organized Institutions 36,192,699 47,497,524

1.2 Individuals 7,080,934,841 6,702,525,870

1.3 Others -

2. Foreign Currency 116,977,640 72,631,471 2.1 Organized Institutions 113,000

2.2 Individuals 116,977,640 72,518,471

2.3 Others -

B. Fixed Deposits 12,141,754,675 11,353,147,320 1. Local Currency 11,445,625,925 10,327,813,570 1.1 Organized Institutions 9,538,004,526 8,866,004,000

1.2 Individuals 1,907,621,400 1,461,809,570

1.3 Others -

2. Foreign Currency 696,128,750 1,025,333,750 2.1 Organized Institutions 693,720,000 1,022,932,750

2.2 Individuals 2,408,750 2,401,000

2.3 Others -

C. Call Deposits 6,811,706,455 5,967,580,545 1. Local Currency 6,585,251,433 5,879,323,329 1.1 "A" Class Licensed Institutions -

1.2 Other Licensed Financial Institutions 2,496,286,718 3,068,482,000

1.3 Other Organized Institutions 4,033,820,827 2,634,932,453

1.4 Individuals 55,143,888 175,908,876

1.5 Others -

2. Foreign Currency 226,455,022 88,257,216 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) 26,187,566,310 24,143,382,730 Total Deposits (1+2) 27,578,376,145 25,318,568,802


40

Schedule 4.6

KuMari BanK liMitedBills payaBle


Schedule 4.7

KuMari BanK liMitedother liaBilities


Particulars Current Year (Rs.) Previous Year (Rs.)1. Pension/Gratuity Fund - -

2. Employees Provident Fund - -

3. Employees Welfare Fund 84,820 61,922

4. Provision for Staff Bonus 49,714,179 41,846,438

5. Interest Payable on Deposits 36,881,320 46,092,295

6. Interest Payable on Borrowings 94,335 -

7. Unearned Discount and Commission 12,871,826 3,528,063

8. Sundry Creditors 37,378,646 32,604,506

9. Branch Reconciliation Account - -

10. Deferred Tax Liability - -

11. Dividend Payable 9,985,798 15,110,813

12. Others 72,472,989 74,885,074

a. Audit Fees 826,030 384,200

b. Others 71,646,959 74,500,874

Total 219,483,913 214,129,111

Particulars Current Year (Rs.) Previous Year (Rs.)1. Local Currency 15,747,781 17,837,785

2. Foreign Currency 6,681,111 3,510,353

Total 22,428,891 21,348,138

41


Schedule 4.8

KuMari BanK liMitedcash Balance


Schedule 4.10

KuMari BanK liMited Balance with BanKs/financial institution


Note: Total balance for which the confirmations are received from respective Banks is NPR. 175,720,528.35

Schedule 4.9

KuMari BanK liMited Balance with nepal rastra BanKas at ashad end 2071 (16 July 2014)

Particulars Local Currency

Foreign Currency in equivalent Rs.Current Year

Total (Rs.)Previous Year

(Rs.)INR Convertible FCY Total

1. Nepal Rastra Bank 3,829,349,524 2,537,960,922 a. Current Account 3,812,114,260 17,235,264 17,235,264 3,829,349,524 2,537,960,922

b. Other Account - - -

Particulars Local Currency

Foreign Currency in Rupee equivalent Current Year (Rs.)

Previous Year (Rs.)INR. Convertible FCY Total

1. Local Licensed Institutions 106,322,283 - 3,937,864 3,937,864 110,260,147 63,729,593 a. Current Account 106,322,283 3,937,864 3,937,864 110,260,147 63,729,593


2. Foreign Banks - 85,099,046 93,139,915 178,238,961 178,238,961 166,423,081 a. Current Account 85,099,046 93,139,915 178,238,961 178,238,961 166,423,081


Total 106,322,283 85,099,046 97,077,779 182,176,825 288,499,107 230,152,674

Particulars Current Year (Rs.) Previous Year (Rs.)1. Local Currency (Including Coins) 763,020,416 622,182,064


Total 777,836,820 638,769,784


42

Schedule 4.12

KuMari BanK liMitedinvestMent


ParticularsPurpose Current Year

(Rs.)Previous Year

(Rs.)Trading Other 1. Treasury Bills of Nepal Government - 2,368,403,910 2,368,403,910 3,266,296,960

2. Saving Certificate of Nepal Government - - -

3. Other Bonds of Nepal Government - 289,282,812 289,282,812 325,522,661

4. Nepal Rastra Bank Bonds - - -

5. Foreign Bonds - - -

6. Local Licensed Institutions - - 49,081,550

7. Foreign Banks - 482,003,668 482,003,668 480,305,416

8. Shares of Organized Institutions - 24,935,500 24,935,500 13,935,500

9. Bonds and Debentures in Organized Institutions - - -

10. Other Investment - - -

Total Investment - 3,164,625,890 3,164,625,890 4,135,142,087 Provision - - - -

Net Investment - 3,164,625,890 3,164,625,890 4,135,142,087

Schedule 4.11

KuMari BanK liMitedMoney at call and short notice


Particulars Current Year (Rs.) Previous Year (Rs.)1. Local Currency 350,000,000


TOTAL 507,478,409 753,410,000

43


Schedule 4.12 (A)

KuMari BanK liMited investMent in shares, deBentures and Bonds


Particulars Par value (Rs.)

Market Value (Rs.)

Provision (Rs.)

Current Year (Rs.)

Previous Year (Rs.)

1. Investment in Shares 24,935,500 - - 24,935,500 13,935,500 1.1 Credit Information Centre Limited 1,235,500 - - 1,235,500 1,235,500

36,599 Ordinary Shares of Rs. 100 each, fully paid

Primary Shares 3530 Kitta of Rs. 100 each

Right Shares 8825 Kitta of Rs. 100 each

Bonus Shares 24,244 Kitta of Rs. 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 9,000,000

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

Total Investment 24,935,500 - - 24,935,500 13,935,500 3. Provision for Loss3.1 Up to previous year - - - - -

3.2 Change in current year - - - - -

Total Provision - - - - - Net Investment 24,935,500 - - 24,935,500 13,935,500


44

Schedule 4.12.2

KuMari BanK liMitedinvestMent held to Maturity


Particulars Par Value (A)

Cumulative Loss (B)

Current Year

Loss (C)

This Year Gain / Loss

(A-B-C)

Previous Year

Gain / Loss (Rs.)

Remarks

1. Treasury Bill of Nepal Government 2,368,403,910

- - - 3,266,296,960

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

3. Other Bond of Nepal Government 289,282,812 - - - 325,522,661

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 482,003,668 - - - 480,305,416

10. Other Investments - - - - 49,081,550

Total Investment 3,139,690,390 - - - 4,121,206,587

Schedule 4.12.1KuMari BanK liMited

investMent held for tradinGas at ashad end 2071 (16 July 2014)

Particulars Par Value

Last Market

Price (A)

Current Market

Price (B)

This Year Previous Year Remarks Gain /

Loss (B-A) Gain / Loss

(Rs.) 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 - - - - -

45


Schedule 4.12.3

KuMari BanK liMitedinvestMent availaBle for sale


Particulars Par Value (A)

Closing Market Price

(A)

Prevailing Market Price

(B)

Current Year Adjustment

Reserve (B - A)

Previous Year Gain / Loss

(Rs.)

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 - - 13,935,500

9. Placement in Foreign Banks - - -

10. Other Investments - - - -

Total Investment 24,935,500 - - 13,935,500


46

Sch

edul

e 4.

13

Ku

Ma

ri

Ba

nK

liM

ite

d c

las

sif

ica

tio

n o

f lo

an

s, a

dv

an

ce

s a

nd

Bil

ls p

ur

ch

as

e &

pr

ov

isio

na

s a

t a

sh

ad

en

d 2

071

(16

July

201

4)

Part

icul

ars

Loa

ns &

Adv

ance

s B

ills

Purc

hase

d/D

isco

unte

d

Cur

rent

Yea

r (R

s.)

Prev

ious

Ye

ar

(Rs.

)

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

- 9

93,1

39,1

07

20,

882,

545,

557

- 2

1,87

5,68

4,66

4 1

,100

,000

1

3,40

3,84

8 1

4,50

3,84

8 2

1,89

0,18

8,51

2 1

9,34

3,14

2,25

5

1.1

Pas

s 9

93,1

39,1

07

20,

882,

545,

557

- 2

1,87

5,68

4,66

4 1

,100

,000

1

3,40

3,84

8 1

4,50

3,84

8 2

1,89

0,18

8,51

2 1

9,34

3,14

2,25

5

2. N

on-P

erfo

rmin

g Lo

an

- 6

64,7

06

917

,649

,797

-

918

,314

,503

-

- -

918

,314

,503

7

76,6

46,6

46

2

.1 R

estru

ctur

ed

68,

732,

063

68,

732,

063

- -

- 6

8,73

2,06

3 -

2

.2 S

ub-S

tand

ard

49,

785,

517

49,

785,

517

- -

- 4

9,78

5,51

7 2

3,46

7,41

4

2

.3 D

oubt

ful

258

,697

,625

2

58,6

97,6

25

- -

- 2

58,6

97,6

25

404

,012

,981

2

.4 L

oss

664

,706

5

40,4

34,5

92

541

,099

,299

-

- -

541

,099

,299

3

49,1

66,2

51

A. T

otal

Loa

n -

993

,803

,814

2

1,80

0,19

5,35

3 -

22,

793,

999,

167

1,1

00,0

00

13,

403,

848

14,

503,

848

22,

808,

503,

015

20,

119,

788,

901

3. L

oan

Loss

Pro

visi

on

3

.1 P

ass

- 9

,931

,391

2

08,8

25,4

56

- 2

18,7

56,8

47

11,

000

134

,038

1

45,0

38

218

,901

,885

1

93,4

31,4

23

3

.2 R

estru

ctur

ed

- -

8,5

91,5

08

- 8

,591

,508

-

- -

8,5

91,5

08

-

3

.3 S

ub-S

tand

ard

- -

12,

446,

379

- 1

2,44

6,37

9 -

- -

12,

446,

379

5,8

66,8

53

3

.4 D

oubt

ful

- -

129

,348

,812

-

129

,348

,812

-

- -

129

,348

,812

2

02,0

06,4

91

3

.5 L

oss

- 6

64,7

06

540

,434

,592

-

541

,099

,299

-

- -

541

,099

,299

3

49,1

66,2

51

B. T

otal

Pro

visi

onin

g -

10,

596,

098

899

,646

,747

-

910

,242

,845

1

1,00

0 1

34,0

38

145

,038

9

10,3

87,8

83

750

,471

,018

4

. Pro

visi

onin

g up

to p

revi

ous

year

4

.1 P

ass

- 7

,736

,485

1

85,3

29,1

77

193

,065

,663

5

8,19

0 3

07,5

70

365

,760

1

93,4

31,4

23

177

,013

,765

4

.2 R

estru

ctur

ed

- -

- -

- -

- -

325

,748

4

.3 S

ub-S

tand

ard

- -

5,8

66,8

53

5,8

66,8

53

- -

- 5

,866

,853

1

0,79

9,70

7

4

.4 D

oubt

ful

- -

202

,006

,491

2

02,0

06,4

91

- -

- 2

02,0

06,4

91

55,

306,

865

4

.5 L

oss

- 6

64,7

06

348

,501

,545

3

49,1

66,2

51

- -

- 3

49,1

66,2

51

243

,541

,957

C. T

otal

pro

visi

on ti

ll la

st y

ear

- 8

,401

,192

7

41,7

04,0

66

- 7

50,1

05,2

58

58,

190

307

,570

3

65,7

60

750

,471

,018

4

86,9

88,0

42

D. W

ritte

n B

ack

from

last

yea

r pro

visi

on

- (7

2,65

7,67

8) -

(72,

657,

678)

(47,

190)

(173

,531

) (2

20,7

21)

(72,

657,

678)

(5,2

58,6

02)

E. A

dditi

onal

Pro

visi

on in

this

yea

r -

2,1

94,9

06

230

,600

,359

-

232

,795

,265

-

- -

232

,574

,543

2

68,7

41,5

77

C

hang

e in

this

yea

r -

2,1

94,9

06

157

,942

,681

-

160

,137

,587

(4

7,19

0) (1

73,5

31)

(220

,721

) 1

59,9

16,8

65

263

,482

,976

Net

Loa

n (A

-B)

983

,207

,716

2

0,90

0,54

8,60

6 -

21,

883,

756,

322

1,0

89,0

00

13,

269,

809

14,

358,

809

21,

898,

115,

132

19,

369,

317,

883

47


Schedule 4.13 (A)KuMari BanK liMited

security for loan advances and Bills purchasedas at ashad end 2071 (16 July 2014)

Particulars Current Year (Rs.) Previous Year (Rs.)A. Secured 1. Against Security of Movable/Immovable Assets 21,943,331,334 19,527,447,782

2. Against Guarantee of Local Licensed Institutions

3. Against Government Guarantee 146,702,311 146,702,428

4. Against Guarantee of Internationally Rated Bank

5. Against Security of Export Documents

6. Against Security of Fixed Deposit Receipts 101,432,866 100,148,677

a. Own FDR 101,432,866 100,148,677

b. FDR of Other Licensed Institutions

7. Against Security of Government Bonds

8. Against Counter Guarantee

9. Against Personal Guarantee

10. Against Other Securities 617,036,504 345,490,013

B. Unsecured - - Total 22,808,503,015 20,119,788,901


48

Leas

ehol

d D

etai

ls C

urre

nt Y

ear (

Rs.

) O

peni

ng V

alue

- G

ross

94,

759,

407

Add

- ad

ditio

n du

ring

the

year

3,6

80,2

27

Less

- w

rite

off/s

ales

dur

ing

the

year

(322

,050

)

Tota

l Cos

t 9

8,11

7,58

4

Acc

umul

ated

dep

reci

atio

n up

to la

st y

ear

76,

016,

301

Dep

reci

atio

n fo

r cur

rent

yea

r 9

,561

,798

Tota

l dep

reci

atio

n on

ass

et w

rite

off/s

ale

(322

,050

)

Tota

l dep

reci

atio

n 8

5,25

6,04

9

Bal

ance

at t

he e

nd o

f the

yea

r 1

2,86

1,53

4

Sch

edul

e 4.

14K

uM

ar

i B

an

K l

iMit

ed

fix

ed

as

se

ts

as

at

as

ha

d e

nd

207

1 (1

6 Ju

ly 2

014)

Part

icul

ars

ASS

ETS

Cur

rent

Yea

r (R

s.)

Pre

viou

s Ye

ar

(Rs.

) B

uild

ing

Veh

icle

s M

achi

nery

O

ffice

Equ

ipm

ent

Oth

ers

1. C

ost P

rice

a.

Pre

viou

s Ye

ar's

Bal

ance

4,8

14,0

41

107

,645

,403

-

286

,942

,772

4

3,63

7,11

6 4

43,0

39,3

32

416

,310

,461

b.

Add

ition

Thi

s Ye

ar -

22,

393,

805

8,0

99,0

00

667

,152

3

1,15

9,95

7 3

6,40

7,87

1

c.

Rev

alua

tion/

Writ

e B

ack

This

Yea

r -

- -

d.

Thi

s Ye

ar S

old

- (1

5,87

8,15

0) (3

,044

,035

) (1

8,92

2,18

5) (9

,679

,000

)

e.

Thi

s Ye

ar W

ritte

Off

- -

- -

- -

-

Tota

l Cos

t (a+

b+c+

d+e)

4,8

14,0

41

114

,161

,058

-

291

,997

,737

4

4,30

4,26

8 4

55,2

77,1

04

443

,039

,332

2.

Dep

reci

atio

n

a. U

p to

pre

viou

s ye

ar 1

,393

,237

4

7,39

9,11

5 -

210

,584

,585

3

2,39

5,66

5 2

91,7

72,6

02

255

,720

,842

b.

For

this

yea

r 1

71,0

40

13,

642,

110

19,

581,

265

5,0

74,4

28

38,

468,

843

40,

951,

213

c.

Dep

reci

atio

n on

Rev

alua

tion/

Writ

e of

f (9

,326

,156

) (2

,697

,602

) (1

2,02

3,75

7) (4

,899

,452

)

d.

Dep

reci

atio

n A

djus

men

t/Add

bac

k -

-

Tota

l Dep

reci

atio

n (a

+b+c

+d)

1,5

64,2

77

51,

715,

069

- 2

27,4

68,2

48

37,

470,

093

318

,217

,688

2

91,7

72,6

02

3. B

ook

Valu

e (W

DV

*) (1

-2)

3,2

49,7

64

62,

445,

989

- 6

4,52

9,48

9 6

,834

,175

1

37,0

59,4

17

151

,266

,730

4. L

and

- -

- -

- 8

5,59

3,63

5 8

5,59

3,63

5

5. C

apita

l Wor

k In

Pro

gres

s (P

endi

ng C

apita

lizat

ion)

- -

- -

- 2

61,3

69

261

,369

6. L

ease

hold

Ass

ets

- -

- -

- 1

2,86

1,53

4 1

8,74

3,10

7

Tota

l (3+

4+5+

6) 2

35,7

75,9

55

255

,864

,841

49


Schedule 4.15 KuMari BanK liMitednon BanKinG assets


Name & Address of Borrower or Party

Acquired Date

of Non Banking Assets

Total Amount of Non

Banking Assets

Provision for lossNet

Non Banking Assets (Rs.)

Previous Year Gross (Rs.)Percent Amount

(Rs.)

Sarita Vaidya (Rajbhandari), Kathmandu 4-Dec-12 5,216,247 100 5,216,247 - 5,216,247

Chija Adhikari, Chitwan 4-Dec-12 1,878,564.56

Shilu Housing & Developers Pvt. Ltd., Lalitpur 5-Jul-13 52,795,000 100 52,795,000 - 52,795,000.00

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

Total 60,903,472 60,903,472 - 59,889,811.17

Schedule 4.16

KuMari BanK liMitedother assets


Particulars Current Year (Rs.)

Previous Year (Rs.)

1. Stock of Stationery 3,142,044 4,131,643

2. Income Receivable on Investment 5,118,022 23,661,055

3. Accrued Interest Receivable on Loan 15,281,297 24,343,546

Accrued Interest Receivable on Loan 295,316,052 273,793,276

Less:Interest Suspense Account (280,034,755) (249,449,730)

4. Commission Receivable - -

5. Sundry Debtors 8,269,618 18,993,445

6. Staff Loan & Advances 183,878,752 161,194,393

7. Pre Payments 16,259,490 10,772,109

8. Cash in Transit - -

9. Other Transit items (including Cheques) - -

10. Drafts payment without notice - -

11. Expenses not written off - -

12. Branch Reconciliation Account 500

13. Deferred Tax Assets 849,607 1,079,936

14. Others 86,121,878 57,775,437

a. Advance Tax (net) 12,013,147 30,963,203

b. Others 74,108,731 26,812,235

Total 318,921,208 301,951,565


50

Schedule 4.17 KuMari BanK liMited

continGent liaBilitiesas at ashad end 2071( 16 July 2014)

Particulars Current Year (Rs.) Previous Year (Rs.)1. Claims Lodged but not accepted by the Institution - -

2. Letter of Credit (Full Amount) 1,563,482,460 1,016,167,572

a. Maturity period up to 6 months 981,827,687 802,846,661

b. Maturity period more than 6 months 581,654,773 213,320,910

3. Rediscounted Bills - -

4. Unmatured Guarantees/Bonds 882,691,809 894,133,682

a. Bid Bonds 34,605,053 31,297,948

b. Performance Bonds 848,086,756 862,835,733

c. Other Guarantee/Bonds

5. Unpaid Shares Investment - 11,000,000

6. Outstanding of Forward Exchange Contract Liabilities 563,686,099 182,603,573

7. Bills under Collection

8. Acceptance & Endorsement 317,542,960 483,918,277

9. Underwriting Commitment

10. Irrevocable Loan Commitment 1,118,154,971 917,104,596

11. Guarantees against Counter Guarantee of Internationally Rated Banks

-

12. Advance Payment Guarantee 358,401,412 162,091,686

13. Financial Guarantee for loan disbursement -

14. Contingent Liabilities on Income Tax

15. Others -

Schedule 4.16 (A)

KuMari BanK liMited other assets (additional stateMent)


ParticularsCurrent Year (Rs.) Previous Year

(Rs.)Up to 1 Year 1 to 3 Year Above 3 Years Total1. Accrued Interest Receivable on Loan 108,752,450 144,075,549 42,488,053 295,316,052 273,793,276

2. Drafts Payment without notice - - - - -

3. Branch Reconciliation Account 500 - - - -

4. Domestic/Foreign Agency Account - - - - -

51


Schedule 4.18

KuMari BanK liMitedinterest incoMe


Particulars Current Year (Rs.) Previous Year (Rs.)A. On Loans, Advances and Overdraft 2,323,992,056 2,358,815,482 1. Loans & Advances 1,342,659,310 1,266,437,255

2. Overdraft 981,332,747 1,092,378,226

B. On Investment 81,000,936 89,586,192 1. Government Securities 81,000,936 88,661,099

a. Treasury Bills 58,720,004 66,112,362

b. Development Bonds 22,280,932 22,548,737

c. National Saving Certificates -

2. Foreign Debt Papers - -

a. ……… - -

b. ……… - -

3. Nepal Rastra Bank Bonds - -

4. Debenture & Bonds 925,093

5. Interest on Interbank Investment - -

a. Bank/ Financial Institutions - -

b. Other Institutions - -

C. On Agency Balances 438,704 1,291,001 1. Domestic Banks/ Financial Institutions - -

2. Foreign Banks 438,704 1,291,001

D. On Money at Call and Short Notice 5,352,704 14,614,302 1. Domestic Banks/Financial Institutions 1,046,270 10,475,371

2. Foreign Banks 4,306,434 4,138,931

E. On Others - - 1. Certificate of Deposits - -

2. Inter-Bank/ Financial Institution Loan - -

3. Others - -

Total 2,410,784,399 2,464,306,976


52

Schedule 4.19KuMari BanK liMitedinterest expenses


Particulars Current Year (Rs.) Previous Year (Rs.)A. On Deposit Liabilities 1,574,507,984 1,454,586,611 1. Fixed Deposits 943,819,484 791,147,585 1.1 Local Currency 914,271,994 760,736,380

1.2 Foreign Currency 29,547,491 30,411,205

2. Saving Deposits 291,086,737 348,281,688 2.1 Local Currency 288,963,778 347,041,922


3. Call Deposits 339,601,762 315,157,338 3.1 Local Currency 335,238,757 313,383,136


4. Certificate of Deposits - B. On Borrowings 803,905 31,695,028 1. Debentures & Bonds 28,756,164

2. Loan from Nepal Rastra Bank 803,905

3. Inter Bank /Financial Institutions Borrowing 2,938,864

4. Other Organized Institution

5. Other Loans

C. On Others - - 1. - -

2. - -

Total 1,575,311,889 1,486,281,639

53


Schedule 4.21

KuMari BanK liMitedother operatinG incoMe


Particulars Current Year (Rs.) Previous Year (Rs.)1. Safe Deposit Lockers Rental 1,769,948 1,666,094

2. Issue & Renewals of Credit Cards

3. Issue & Renewals of ATM Cards 31,728,102 28,590,665

4. Telex / T. T./ SWIFT 4,445,123 3,803,769

5. Service Charges

6. Renewal Fees

7. Others 19,001,437 7,801,256

Total 56,944,610 41,861,784


coMMission and discount incoMefroM 1st shrawan 2070 to 32 asadh 2071

(froM 16 July 2013 to 16 July 2014)Particulars Current Year (Rs.) Previous Year (Rs.)

A. Bills Purchase & Discount 1,158,472 1,302,335 1. Local 1,158,472 1,302,335

2. Foreign

B. Commission 47,647,185 44,271,223 1. Letters of Credit 14,706,216 16,990,751

2. Guarantees 15,164,234 13,179,544

3. Collection Fees 917,111 664,297

4. Remittance Fees 16,859,624 13,436,630

5. Credit Card

6. Share Underwriting/Issue

7. Government Transactions

8. E. Pra. Commission

9. Exchange Fee

C. Others 139,919,824 92,626,107 Total 188,725,481 138,199,665


54

Schedule 4.23KuMari BanK liMited

expenses relatinG to eMployeesfroM 1st shrawan 2070 to 32 asadh 2071


1. Salary 98,895,813 89,255,129

2. Allowances 63,131,407 58,212,817

a. Normal Allowance 29,950,802 30,050,200

b. Inchargeship Allowance 88,057 96,599

c. Relocation Allowance 364,767 164,705

d. Outstation Allowance 3,939,517 3,647,517

e. Dashain Allowance 10,829,686 9,518,653

f. Vehicle Maintenance Allowance 741,180 664,102

g. Leave Fare Allowance 17,165,505 14,071,041

h. International Deputation Allowance 51,893

3. Contribution to Provident Fund 9,748,444 8,713,612

4. Training Expenses 2,922,712 1,176,211

5. Uniform 2,479,296 467,204

6. Medical 7,650,418 6,700,304

7. Insurance 7,477,821 7,696,701

8. Gratuity Expenses 13,317,642 14,117,726

9. Others 16,077,604 17,465,538 a. Wages 5,978,149 6,442,337

b. Teller Risk Fund 889,454 845,676

c. Other Staff Benefits 3,003,575 3,590,833

d. Overtime 6,206,426 6,586,691

Total 221,701,158 203,805,242


exchanGe fluctuation Gain/lossfroM 1st shrawan 2070 to 32 asadh 2071


Particulars Current Year (Rs.) Previous Year (Rs.) a. From Revaluation 23,518,491 10,859,670

b. From Trading (except Exchange Fees) 61,636,986 46,133,828

Total Gain (Loss) 85,155,477 56,993,498

55


Schedule 4.24 KuMari BanK liMitedother operatinG expenses


Particulars Current Year (Rs.) Previous Year (Rs.) 1. House Rent 55,744,270 51,457,964

2. Electricity & Water 18,430,039 18,054,513

3. Repair & Maintenance 1,640,955 2,058,101

a. Building 426,455 616,277

b. Vehicles 1,214,500 1,441,825

c. Others -

4. Insurance 10,667,741 10,246,482

5. Postage, Telex, Telephone & Fax 18,625,371 15,435,737

6. Office Equipment, Furniture and Repair 4,074,115 5,073,846

7. Travelling Allowances & Expenses 1,574,625 1,993,336

8. Stationery & Printing 6,207,993 5,402,866

9. Periodicals & Books 498,919 452,453

10. Advertisements 5,402,097 4,547,803

11. Legal Expenses 920,788 918,308

12. Donations 6,000 23,000

13. Expenses relating to Board of Directors 2,291,800 2,845,533

a. Meeting Fees 2,104,300 2,698,000

b. Other Expenses 187,500 147,533

14. Annual General Meeting Expenses 688,181 683,868

15. Expenses relating to Audit 892,904 841,668

a. Audit Fees 403,410 384,200

b. Other Expenses 489,494 457,468

16. Commission on Fund Transfer - -

17. Depreciation on Fixed Assets 48,030,641 53,744,322

18. Amortization of Pre-operating Expenses - -

19. Share Issue expenses - -

20. Technical Services Reimbursment - -

21. Entertainment Expenses - -

22. Written Off Expenses - -

23. Security Expenses 23,760,319 19,882,978

24. Credit Guarantee Premium

25. Commission & Discount

26. Others 40,663,900 36,806,864

a. Transport 8,858,881 8,578,462

b. Professional Fees 1,570,610 573,470

c. Public Relation Expenses 923,827 1,002,028

d. Correspondent Banking Charges 435,998 1,889,719

e. Fees and Taxes 25,892,677 21,343,288

f. Miscellaneous 591,080 1,141,963

g. Janitorial 2,390,827 2,277,933

Total 240,120,657 230,469,644


56


provision for possiBle lossesfroM 1st shrawan 2070 to 32 asadh 2071


1. Increase in Loss Provision on Loans 234,189,383 268,741,577

2. Increase in Provision for Loss on Investment -

3. Provision for loss on Non-Banking Assets 2,122,338 45,877,403

4. Provision for Other Assets -

Total 236,311,721 314,618,980


non-operatinG incoMe / loss froM 1st shrawan 2070 to 32 asadh 2071


Particulars Current Year (Rs.)

Previous Year (Rs.)

1. Profit/ (Loss) on Sale of Investments -

2. Profit/ (Loss) on Sale of Assets (10,380) 8,206

3. Dividend 635,536 259,241

4. Subsidies received from Nepal Rastra Bank - -

a. Compensation for losses of specified branches - -

b. Interest Compensation - -

c. Exchange Counter - -

5. Others 1,915,189 (11,401,644)

Net Non-Operating Income (Loss) 2,540,345 (11,134,197)


write BacK froM provision for possiBle losses(fiscal year 2012/13)

Particulars Current Year (Rs.) Previous Year (Rs.)1. Provision for Loan Loss Written Back 74,272,518 5,258,602

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 76,151,082 5,258,602

57


Schedule 4.28(A)

KuMari BanK liMtedstateMent of loan written-off

fiscal year 2070/71 (2013/14)

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

Total

Schedule 4.28

KuMari BanK liMitedincoMe/ (expenses) froM extra ordinary transactions


Particulars Current Year (Rs.) Previous Year (Rs.)1. Recovery of Written Off Loan - -

2. Voluntary Retirement Expenses - -

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

4. Other Expenses/Income - -

5. ……………………………………………… - -

Total - -


58

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 InterestA. Directors

1. ……………………………...

2. ……….……………………..

3. ………………………………

B. Chief Executive

1. ……………………………..

2. ……………………………..

C. Promoter

D. Employee

E. Shareholders

Total

Amount in Rs.

Schedule 4.29

KuMari BanK liMitedstateMent of loans and advances extended to directors/chief

executive /proMoters/eMployees and shareholders32 ashad 2071 (16 July 2014)

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:

59


Schedule 4.30 (A)

KuMari BanK liMitedtaBle of capital fund

end of ashad 2071 (16 July 2014)

1.1. RISK WEIGHTED EXPOSURES Current Year (Rs.) Previous Year (Rs.) a. Risk Weighted Exposure for Credit Risk 24,136,981 20,934,511

b. Risk Weighted Exposure for Operational Risk 1,633,844 1,412,218

c. Risk Weighted Exposure for Market Risk 170,673 177,557

Adjustments under Pillar II 25,941,498 22,524,285

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

Addition to RWE as per supervisiory review (3%) 778,245 675,729

Add RWE equivalent to reciprocal of capital charge of 2 % of gross income. 256,105 218,728

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

Total Risk Weighted Exposure (After Bank's adjustment of Pillar II) 26,975,848 23,418,742

1.2. CAPITAL Current Year (Rs.) Previous Year (Rs.) Core Capital (Tier I) 2,926,215 2,633,195 a. Paid Up Equity Share Capital 1,828,332 1,603,800

b. Irredeemable Non- cumulative Preference Share

c. Share Premium - -

d. Proposed Bonus Equity Share 603,350 224,532

e. Statutory General Reserves 467,413 799,082

f. Retained Earnings/Loss till Previous Year 26,270 4,700

g. Un-audited current period profit/(loss)

h. Bond Redemption Reserve - -

i. Capital Adjustment Reserve -

j. Dividend Equalization Reserves

k. Capital Redemption Reserve

l. Other free Reserve (Deffered Tax Fund) 850 1,080

m. Less: Goodwill

n. Less: Miscellaneous Expenditure not written off

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: Other Deduction

Adjustments under Pillar II

Less: Shortfall in Provision

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


60

Supplementary Capital (Tier II) 259,293 216,943 a Cumulative and/or Redeemable Preference Share

b Subordinated term debt - -

c. Hybrid Capital Instruments

d. General Loan Loss provision 218,902 193,431

e. Exchange Equalization Reserve 20,391 14,511

f. Investment Adjustment Reserve 20,000 9,000

g. Assets Revaluation Reserve

h. Other Reserve

Total Capital Fund (Tier I and Tier II) 3,185,508 2,850,138

1.3 CAPITAL ADEQUACY RATIOS Current Period Previous Period Tier I Capital to Total Risk Weighted Exposure (After Bank's adjustment of Pillar II)

10.85 11.24

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

11.81 12.17

61


en

d o

f a

sh

ad

207

1 (1

6 Ju

ly 2

014)

cr

ed

it r

isK

ex

po

su

re

s

On

Bal

ance

She

et E

xpos

ures

(A)

Cur

rent

Yea

r P

revi

ous

Year

G

ross

Boo

k Va

lue

(a)

Spe

cific

P

rovi

sion

(b)

Elig

ible

C

RM

(c

)

Net

Val

ue

d=a-

b-c

Ris

k W

eigh

t (

e)

Ris

k W

eigh

ted

Exp

osur

es

(f)=(

d)*(

e)

Net

Val

ue

Ris

k W

eigh

ted

Exp

osur

es

Cas

h B

alan

ce77

7,83

7 7

77,8

37

0% -

584

,140

-

Bal

ance

With

Nep

al R

astra

Ban

k 3,

829,

350

3,8

29,3

50

0% -

2,8

62,9

24

-

Gol

d0%

Inve

stm

ent i

n N

epal

ese

Gov

ernm

ent S

ecur

ities

2,65

7,68

7 2

,657

,687

0%

- 2

,574

,619

-

All

Oth

er C

laim

s on

Gov

ernm

ent o

f Nep

al14

6,70

2 -

146

,702

0%

- 1

46,7

02

-

Inve

stm

ent i

n N

epal

Ras

tra B

ank

Sec

uriti

es -

0% -

-

All

Oth

er C

laim

s on

Nep

al R

astra

Ban

k -

0% -

-

Cla

ims

in F

orei

gn G

over

nmen

t & C

entra

l Ban

k (E

CA

ratin

g 0-

1) -

0% -

-

Cla

ims

in F

orei

gn G

over

nmen

t &

Cen

tral B

ank

(EC

A ra

ting

2) -

20%

- -

Cla

ims

in F

orei

gn G

over

nmen

t &

Cen

tral B

ank

(EC

A ra

ting

3) -

50%

- -

Cla

ims

in F

orei

gn G

over

nmen

t &

Cen

tral B

ank

(EC

A ra

ting

4-6)

- 10

0% -

-

Cla

ims

in F

orei

gn G

over

nmen

t &

Cen

tral B

ank

(EC

A ra

ting

7) -

150%

- -

Cla

ims

On

BIS

, IM

F, E

CB

, EC

and

Cla

ims

On

Mul

tilat

eral

D

evel

opm

ent B

anks

(MD

B's

) Rec

ogni

sed

By

Sta

ndar

d Fr

amew

ork

- 0%

- -

Cla

ims

on O

ther

MD

B's

- 10

0% -

-

Cla

ims

on P

ublic

Sec

tor E

ntity

(EC

A 0

- 1)

- 20

% -

-

Cla

ims

on P

ublic

Sec

tor E

ntity

(EC

A - 2

) -

50%

- -

Cla

ims

on P

ublic

Sec

tor E

ntity

(EC

A 3-

6) -

100%

- -

Cla

ims

on P

ublic

Sec

tor E

ntity

(EC

A - 7

) -

150%

- 1

6,98

5 2

5,47

8

Cla

ims

on D

omes

tic B

anks

that

mee

t Cap

ital A

dequ

acy

requ

irem

ents

334

,033

3

34,0

33

20%

66,

807

335

,320

6

7,06

4

Cla

ims

on D

omes

tic B

anks

that

do

not m

eet C

apita

l Ade

quac

y R

equi

rem

ents

45,

244

45,

244

100%

45,

244

8,4

49

8,4

49

Cla

ims

on F

orei

gn B

ank

(EC

A R

atin

g 0-

1)

562

,242

5

62,2

42

20%

112

,448

5

45,7

30

109

,146

Cla

ims

on F

orei

gn B

ank

(EC

A R

atin

g - 2

) 3

26,6

89

326

,689

50

% 1

63,3

45

- -

Cla

ims

on F

orei

gn B

ank

(EC

A R

atin

g 3-

6) -

100%

- 6

5,31

3 6

5,31

3

Rs

in '0

00

Sch

edul

e 4.

30 (B

)


62

Cla

ims

on F

orei

gn B

ank

(EC

A R

atin

g - 7

) -

150%

- -

-

Cla

ims

on fo

reig

n ba

nk in

corp

orat

ed in

SA

AR

C re

gion

ope

ratin

g w

ith a

buf

fer o

f 1 %

abov

e th

eir r

espe

ctiv

e re

gula

tory

cap

ital

requ

irem

ent

9,7

72

9,7

72

20%

1,9

54

(15,

488)

(3,0

98)

Cla

ims

on D

omes

tic C

orpo

rate

s 1

3,93

9,52

9 -

13,

939,

529

100%

13,

939,

529

10,1

65,4

10

10,

165,

410

Cla

ims

on F

orei

gn C

orpo

rate

s (E

CA

0 - 1

) -

20%

- -

-

Cla

ims

on F

orei

gn C

orpo

rate

s (E

CA

2)

- 50

% -

- -

Cla

ims

on F

orei

gn C

orpo

rate

s (E

CA

3-6)

- 10

0% -

- -

Cla

ims

on F

orei

gn C

orpo

rate

s (E

CA

- 7)

- 15

0% -

- -

Reg

ulat

ory

Ret

ail P

ortfo

lio (N

ot O

verd

ue)

3,29

9,20

9 2

7,60

9 3

,271

,600

75

% 2

,453

,700

2

,446

,311

1

,834

,733

Cla

ims

fulfi

lling

all

cret

erio

n of

regu

lato

ry re

tail

exce

pt g

ranu

larit

y -

100%

- -

-

Cla

ims

secu

red

by re

side

ntia

l pro

perti

es

1,7

02,5

49

1,7

02,5

49

60%

1,0

21,5

30

1,4

38,1

47

862

,888

Cla

ims

not f

ully

sec

ured

by

resi

dent

ial p

rope

rties

- 15

0% -

- -

Cla

ims

secu

red

by re

side

ntia

l pro

perti

es (O

verd

ue)

49,

805

12,

107

37,

698

100%

37,

698

33,

706

33,

706

Cla

ims

secu

red

by C

omm

erci

al re

al e

stat

e1,

122,

258

1,1

22,2

58

100%

1,1

22,2

58

2,0

83,2

49

2,0

83,2

49

Pas

t due

cla

ims

(exc

ept f

or c

laim

s se

cure

d by

resi

dent

ial p

rope

rties

) 1

,276

,302

6

81,5

04

594

,798

15

0% 8

92,1

97

539

,974

8

09,9

62

Hig

h R

isk

clai

ms

1,2

72,1

49

1,2

72,1

49

150%

1,9

08,2

23

707

,478

1

,061

,217

Inve

stm

ent i

n eq

uity

and

oth

er c

apita

l ins

trum

ents

of i

nstit

utio

ns

liste

d in

the

stoc

k ex

chan

ge -

100%

- -

-

Inve

stm

ent i

n eq

uity

and

oth

er c

apita

l ins

trum

ents

of i

nstit

utio

ns

not l

iste

d in

the

stoc

k ex

chan

ge 2

4,93

6 2

4,93

6 15

0% 3

7,40

3 6

,436

9

,653

Sta

ff Lo

an s

ecur

ed b

y re

side

ntia

l pro

perty

110

,606

1

10,6

06

60%

66,

364

85,

177

51,

106

Inte

rest

Rec

eiva

ble/

Cla

im o

n go

vern

men

t sec

uriti

es 4

,788

4

,788

0%

- 3

6,62

4 -

Cas

h in

Tra

nsit

and

othe

r cas

h ite

ms

in th

e pr

oces

s of

col

lect

ion

- 20

% -

- -

Oth

er A

sset

s (a

s pe

r atta

chm

ent)

1,6

91,2

74

1,25

5,33

3 4

35,9

41

100%

435

,941

4

10,8

23

410

,823

Tota

l 3

3,18

2,96

1 1,

948,

944

27,

609

31,

206,

408

22,

304,

640

25,0

78,0

30

17,5

95,0

99

63


Off

Bal

ance

She

et E

xpos

ures

(B)

Cur

rent

Yea

r P

revi

ous

Year

G

ross

Boo

k Va

lue

(a)

Spe

cific

P

rovi

sion

(b)

Elig

ible

C

RM

(c

)

Net

Val

ue

d=a-

b-c

Ris

k W

eigh

t (

e)

Ris

k W

eigh

ted

Exp

osur

es

(f)=(

d)*(

e) N

et V

alue

R

isk

Wei

ghte

d E

xpos

ures

Rev

ocab

le C

omm

itmen

ts0%

- -

Bill

s C

olle

ctio

n0%

- -

Forw

ard

Exc

hang

e C

ontra

ct L

iabi

litie

s56

3,68

6 5

63,6

86

10%

56,

369

310

,022

3

1,00

2

LC C

omm

itmen

ts W

ith O

rigin

al M

atur

ity U

p to

6 m

onth

s

Dom

estic

cou

nter

party

981,

828

40,

023

941

,805

20

% 1

88,3

61

908

,505

1

81,7

01

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 -

100%

- -

-

Fore

ign

coun

terp

arty

EC

A R

atin

g 7

- 15

0% -

- -

L C

Com

mitm

ents

With

Orig

inal

Mat

urity

ove

r 6 m

onth

s

D

omes

tic c

ount

erpa

rty58

1,65

5 9

,148

5

72,5

07

50%

286

,253

6

4,38

4 3

2,19

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 -

100%

- -

-

Fore

ign

coun

terp

arty

EC

A R

atin

g 7

- 15

0% -

- -

Bid

Bon

d, P

erfo

rman

ce B

ond

and

Cou

nter

Gua

rant

ee

D

omes

tic C

ount

erpa

rty88

2,69

2 4

1,66

9 8

41,0

23

50%

420

,512

6

18,7

52

309

,376

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 -

100%

- -

-

Fore

ign

coun

terp

arty

EC

A R

atin

g 7

- 15

0% -

- -

Und

erw

ritin

g co

mm

itmen

ts

- 50

% -

- -

Lend

ing

of B

ank'

s S

ecur

ities

or P

ostin

g of

Sec

uriti

es a

s co

llate

ral

- 10

0% -

- -

Rep

urch

ase

Agr

eem

ents

, Ass

ets

sale

with

reco

urse

-

100%

- -

-

Adv

ance

Pay

men

t Gua

rant

ee35

8,40

1 6

,225

3

52,1

76

100%

352

,176

1

25,3

64

125

,364

Fina

ncia

l Gua

rant

ee -

100%

- -

-

Acc

epte

nce

and

End

rose

men

ts31

7,54

3 1

2,50

5 3

05,0

38

100%

305

,038

4

78,3

90

478

,390


64

Unp

aid

porti

on o

f Par

tly p

aid

shar

es a

nd s

ecur

ities

- 10

0% -

13,

500

13,

500

Irrev

ocab

le C

redi

t Com

mitm

ents

(sho

rt te

rm)

1,11

8,15

5 1

,118

,155

20

% 2

23,6

31

1,1

65,3

80

233

,076

Irrev

ocab

le C

redi

t Com

mitm

ents

(lon

g te

rm)

- 50

% -

- -

Oth

er C

ontin

gent

Lia

bilit

ies

- 10

0% -

2,4

94

2,4

94

Unp

aid

Gua

rant

ee C

laim

s20

0% -

-

Tota

l4,

803,

960

- 10

9,56

94,

694,

391

1,83

2,34

03,

686,

791

1,40

7,09

5To

tal R

WE

for C

redi

t Ris

k be

fore

Adj

ustm

ent

(A +

B)

37,9

86,9

211,

948,

944

137,

178

35,

900,

799

- 2

4,13

6,98

1 28

,764

,821

19

,002

,194

A

djus

tmen

t und

er P

illar

IIA

dd:1

0% o

f the

loan

& fa

cilit

ies

in e

xces

s of

Sin

gle

Obl

igor

Lim

its

Add

:1%

of t

he c

ontra

ct (s

ale)

val

ue in

cas

e of

the

sale

of c

redi

t with

re

cour

se

Tota

l RW

E fo

r Cre

dit R

isk

37,9

86,9

211,

948,

944

137,

178

35,9

00,7

9924

,136

,981

28,7

64,8

2119

,002

,194

65


Sch

edul

e 4.

30(C

)

Ku

Ma

ri

Ba

nK

liM

ite

de

liG

iBle

aM

ou

nt

of

cr

ed

it r

isK

Mit

iGa

tio

n (

cr

M)

en

d o

f a

sh

ad

207

1 (1

6 Ju

ly 2

014)

Rs.

In '0

00

Cre

dit e

xpos

ures

Dep

osit

w

ith b

ank

Dep

osits

w

ith o

ther

ba

nks/

FI

Gol

d G

ovt.&

NR

B

Secu

ritie

s

G'te

e of

G

ovt.o

f N

epal

Sec

/G'te

e of

oth

er

Sove

reig

ns

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)

O

n B

alan

ce S

heet

Cre

dit e

xpos

ures

Cla

ims

on F

orei

gn g

over

nmen

t and

Cen

tral B

ank

(EC

A-2

) -

Cla

ims

on F

orei

gn g

over

nmen

t and

Cen

tral B

ank

(E

CA

-3)

-

Cla

ims

on F

orei

gn g

over

nmen

t and

Cen

tral B

ank

(E

CA

-4-6

) -

Cla

ims

on F

orei

gn g

over

nmen

t and

Cen

tral B

ank

(EC

A-7

) -

Cla

im o

n O

ther

Mul

tilat

eral

Dev

elop

men

t Ban

ks -

Cla

ims

on P

ublic

Sec

tor E

ntity

(EC

A-0

-1)

-

Cla

ims

on P

ublic

Sec

tor E

ntity

(EC

A-2

) -

Cla

ims

on P

ublic

Sec

tor E

ntity

(EC

A-3

-6)

-

Cla

ims

on P

ublic

Sec

tor E

ntity

(EC

A -7

) -

Cla

ims

on d

omes

tic b

anks

that

mee

t cap

ital

adeq

uacy

requ

irem

ent

-

Cla

ims

on d

omes

tic b

anks

that

do

not m

eet

capi

tal a

dequ

acy

requ

irem

ent

-

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 fo

reig

n ba

nk in

corp

orat

ed in

SA

AR

C

regi

on o

pera

ting

with

a b

uffe

r of 1

% a

bove

thei

r re

spec

tive

regu

lato

ry c

apita

l req

uire

men

t

-

Cla

ims

on D

omes

tic C

orpo

rate

s -


66

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

ortfo

lio (N

ot O

verd

ue)

27,

609.

05

27,

609

Cla

ims

fulfi

lling

all

cret

erio

n of

regu

lato

ry re

tail

exce

pt g

ranu

larit

y -

Cla

ims

secu

red

by re

side

ntia

l pro

perti

es

-

Cla

ims

not f

ully

sec

ured

by

resi

dent

ial p

rope

rties

-

Cla

ims

secu

red

by re

side

ntia

l pro

perti

es

(Ove

rdue

) -

Cla

ims

secu

red

by c

omm

erci

al re

al e

stat

e -

Pas

t due

cla

ims(

exce

pt fo

r cla

im s

ecur

ed b

y re

side

ntia

l pro

perti

es)

-

Hig

h R

isk

Cla

ims

-

Inve

stm

ent i

n eq

uity

and

oth

er c

apita

l ins

trum

ents

of

inst

itutio

ns

liste

d in

the

stoc

k ex

chan

ge

-

Inve

stm

ent i

n eq

uity

and

oth

er c

apita

l ins

trum

ents

of

inst

itutio

ns

not l

iste

d in

the

stoc

k ex

chan

ge

-

Oth

er A

sset

s (a

s pe

r atta

chm

ent)

- -

-

TOTA

L 2

7,60

9.05

-

-

-

-

-

-

-

-

2

7,60

9

Off

Bal

ance

She

et E

xpos

ures

Forw

ard

Exc

hang

e C

ontra

ct L

iabi

litie

s

LC C

omm

itmen

ts W

ith O

rigin

al M

atur

ity U

p to

6

mon

ths

dom

estic

cou

nter

party

40,

023

40,

023

Fore

ign

coun

terp

arty

(EC

A R

atin

g 0-

1) -

Fore

ign

coun

terp

arty

(EC

A R

atin

g 2)

-

Fore

ign

coun

terp

arty

(EC

A R

atin

g 3-

6) -

Fore

ign

coun

terp

arty

(EC

A R

atin

g 7)

-

L C

Com

mitm

ents

With

Orig

inal

Mat

urity

Ove

r 6

mon

ths

dom

estic

cou

nter

party

9,1

48

9,1

48

Fore

ign

coun

terp

arty

(EC

A R

atin

g 0-

1) -

Fore

ign

coun

terp

arty

(EC

A R

atin

g 2)

-

67


Fore

ign

coun

terp

arty

(EC

A R

atin

g 3-

6) -

Fore

ign

coun

terp

arty

(EC

A R

atin

g 7)

-

Bid

Bon

d an

d P

erfo

rman

ce B

ond(

Dom

estic

) 4

1,66

9 4

1,66

9

Fore

ign

coun

terp

arty

(EC

A R

atin

g 0-

1) -

Fore

ign

coun

terp

arty

(EC

A R

atin

g 2)

-

Fore

ign

coun

terp

arty

(EC

A R

atin

g 3-

6) -

Fore

ign

coun

terp

arty

(EC

A R

atin

g 7)

-

Und

erw

ritin

g co

mm

itmen

ts

-

Lend

ing

of B

ank'

s S

ecur

ities

or P

ostin

g of

S

ecur

ities

as

colla

tera

l -

Rep

urch

ase

Agr

eem

ents

,Ass

ets

sale

with

re

sour

se -

Adv

ance

Pay

men

t Gua

rant

ee 6

,225

6

,225

Fina

ncia

l Gua

rant

ee -

Acc

epta

nces

and

End

orse

men

ts 1

2,50

5 1

2,50

5

Unp

aid

porti

on o

f par

tly p

aid

shar

es a

nd s

ecur

ities

-

Irrev

ocab

le C

redi

t Com

mitm

ents

- sh

ort

-

Irrev

ocab

le C

redi

t Com

mitm

ents

-lon

g -

Oth

er C

ontin

gent

Lia

bilit

ies

-

Unp

aid

Gua

rant

ee C

laim

s -

TOTA

L 1

09,5

69

-

-

-

-

-

-

-

-

109

,569

G

RA

ND

TO

TAL

137

,178

-

-

-

-

-

-

-

-

1

37,1

78


68

KuMari BanK liMitedrisK weiGht exposure for operational risK


Schedule 4.30 (D)

Rs in '000

Particulars Year 1 (2010/11)

Year 2 (2011/12)

Year 3 (2012/13)

Previous year

Net Interest Income 685,240 819,088 978,025

Commission and Discount income 99,708 110,866 138,200

Other Operating Income 53,636 48,812 41,862

Exchange Fluctuation Income 36,719 44,206 56,993

Additional Interest Suspense during the period (11,038) 99,927 65,445

Total Gross Income (a) 864,264 1,122,899 1,280,525 Alfa (b) 15% 15% 15% 15%Fixed Percentage of Gross Income {C= (axb)} 129,640 168,435 192,079 Capital Requirement for operational risk (d) = ( average of c) 163,384 141,222 Risk Weight (reciprocal of capital requirement of 10 %) in times (e) 10 10 Equivalent Risk Weight Exposure {f=(dxe)} 1,633,844 1,412,218

69


KuMari BanK liMitedrisK weiGht exposure for MarKet risK


Schedule 4.30 (E)

Rs in '000

S.N. Currency Open Position (FCY)

Open Position (NPR)

Relevant Open Position Previous Year

1 INR (49,790) (79,702) 79,702 172,458

2 USD (2,550) (245,678) 245,678 168,937

3 GBP (2) (299) 299 2,418

4 EUR (11) (1,456) 1,456 301

5 THB (3) (10) 10 -

6 CHF (2) (236) 236 1,621

7 AUD (60) (5,379) 5,379 276

8 CAD (4) (364) 364 163

9 SGD (1) (54) 54 3,120

10 JPY (2,891) (2,735) 2,735 102

11 HKD (0) (4) 4 1,642

12 DKK (16) (278) 278 41

13 SEK (4) (51) 51 1,598

14 SAR (88) (2,255) 2,255 902

15 QAR (40) (1,062) 1,062 238

16 AED (23) (605) 605 419

17 MYR (17) (511) 511 9

18 KRW - - - 865

19 CNY (29) (443) 443

20 KWD (1) (221) 221

21 BHD (0) (5) 5 4

Total Open Position (a) 341,347 355,114 Fixed Pecentage (b) 5% 5%Capital Charge for Market Risk [c=(aXb)] 17,067 17,756 Risk Weight (reciprocal of capital requirement of 10%) in times (d) 10 10 Equivalent Risk Weight Exposure {e=(cXd)} 170,673 177,557


70

Sch

edul

e 4.

31

Ku

Ma

ri

Ba

nK

liM

ite

dp

rin

cip

al

ind

ica

tor

s(f

or 7

yea

rs)

Part

icul

ars

Indi

cato

rsF.

Y.

F. Y

.F.

Y.

F. Y

.F.

Y.

F. Y

.F.

Y.

F. Y

.20

06/0

720

07/0

820

08/0

920

09/1

020

10/1

120

11/1

220

12/1

320

13/1

4

1.

Net

Pro

fit/G

ross

Inco

me

%36

.18%

30.8

7%36

.98%

37.3

9%28

.70%

26.9

5%23

.99%

29.2

9%

2. E

arni

ngs

Per

Sha

reR

s. 2

2.70

1

6.35

2

2.04

24

.24

15.6

717

.18

18.1

718

.69

3. M

arke

t Val

ue p

er S

hare

Rs.

830

1

,005

7

00

468

266

242

260

536

4. P

rice

Ear

ning

Rat

ioR

atio

36.

56

61.

47

31.

76

19.3

116

.98

14.0

914

.31

28.6

8

5. S

tock

Div

iden

d on

sha

re c

apita

l%

21.0

5%10

.53%

10.5

8%12

.00%

8.44

%0.

00%

14.0

0%33

.00%

6. C

ash

Div

iden

d on

sha

re C

apita

l%

1.05

%0.

53%

0.55

%12

.00%

0.44

%7.

00%

0.74

%1.

74%

7. I

nter

est I

ncom

e/Lo

ans

& A

dvan

ces

%7.

63%

7.61

%8.

34%

11.5

8%13

.75%

12.2

6%11

.72%

10.1

9%

8. E

mpl

oyee

Exp

ense

s/To

tal O

pera

ting

Exp

ense

s%

41.6

3%37

.68%

40.7

3%41

.49%

44.2

0%47

.82%

46.9

3%48

.01%

9. I

nter

est E

xpen

ses

on T

otal

Dep

osit

and

Bor

row

ings

%3.

69%

3.87

%5.

10%

6.66

%8.

88%

7.38

%5.

87%

5.67

%

10. E

xcha

nge

Fluc

tuat

ion

Gai

n/G

ross

Inco

me

%4.

31%

7.38

%5.

91%

4.48

%4.

20%

4.32

%4.

69%

7.30

%

11. S

taff

Bon

us/ T

otal

Em

ploy

ee E

xpen

ses

%25

.08%

22.3

2%24

.04%

24.2

0%17

.55%

16.8

4%17

.03%

18.3

2%

12. N

et P

rofit

/Loa

ns &

Adv

ance

s%

1.88

%1.

52%

1.77

%2.

12%

1.68

%1.

52%

1.45

%1.

50%

13. N

et P

rofit

/ Tot

al A

sset

s%

1.43

%1.

16%

1.41

%1.

59%

1.23

%1.

10%

1.03

%1.

10%

14. T

otal

Cre

dit/D

epos

it%

85.8

4%90

.20%

94.1

7%79

.45%

87.8

7%82

.33%

79.4

7%82

.70%

15. T

otal

Ope

ratin

g E

xpen

ses/

Tota

l Ass

ets

%1.

50%

1.58

%1.

54%

1.69

%1.

86%

1.62

%1.

54%

1.49

%

16. A

dequ

acy

of C

apita

l Fun

d on

Ris

k W

eigh

tage

A

sset

s

a

. Cor

e C

apita

l%

10.2

6%10

.40%

9.08

%10

.29%

12.3

5%11

.30%

11.2

4%10

.85%

b

. Sup

plem

enta

ry C

apita

l%

0.96

%4.

01%

2.47

%2.

05%

1.41

%0.

90%

0.93

%0.

96%

c

. Tot

al C

apita

l Fun

d%

11.2

2%14

.41%

11.5

6%12

.34%

13.7

6%12

.20%

12.1

7%11

.81%

17. L

iqui

dity

(CR

R)

Rat

io3.

65%

1.91

%7.

13%

8.02

%5.

74%

13.5

2%12

.43%

13.6

2%

18. N

on P

erfo

rmin

g Lo

ans/

Tota

l Loa

ns%

0.73

%1.

32%

0.44

%0.

50%

1.12

%2.

21%

2.89

%4.

03%

19. W

eigh

ted

Aver

age

Inte

rest

Rat

e S

prea

d%

4.67

%4.

30%

4.17

%3.

28%

3.92

%4.

27%

4.62

%3.

71%

20. B

ook

Net

wor

th P

er S

hare

Rs.

137

1

28

137

1

37

138

1

48

166

1

62

21. T

otal

Sha

res

Num

ber

7,5

00,0

00

10,

700,

000

11,

860,

992

13,0

60,1

59

16,0

38,0

00

16,

038,

000

1,8

28,3

32

2,4

31,6

81,5

60

22. T

otal

Em

ploy

ees

Num

ber

212

25

626

036

434

732

737

736

2

71


KuMari BanK liMitedsiGnificant accountinG policies

financial year 16 July 2013 to 16 July 2014 (1 shrawan 2070 to 32 ashad 2071)

1. General Information Kumari Bank Limited (the “Bank”) is a public limited company, incorporated on10 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 Statement The Financial Statements for the year ended on 16 July 2014 is approved by Board of Directors (BOD)

of the Bank on 31 Bhadra 2071 (16 September 2014).

3. SummaryofSignificantAccountingPolicies The 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 Compliance The 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.

3.2 Basis of Preparation The 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 Income Interest 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.

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 Income Guarantee commission up to Rs. 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”.

Schedule 4.32


72

3.5 Dividend Income Dividend 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 Incomesi. 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.

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

iii. 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 Expenses Interest expense on deposit liabilities, bonds and borrowings are accounted for on accrual basis.

3.8 Loans and Advances, Overdraft and Bills Purchased Loans 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 sectors. 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 Loans Staff 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 Provision Provision 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 off Unrecoverable 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 Depreciationa) Fixed assets are stated at historical cost. Historical cost includes expenditures that are directly

attributable to the acquisition of individual asset item.

73


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

Asset RateComputer Software 20%

Leasehold 20%

Battery 33.33%

c) 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.

d) 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%

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

3.14 Amortisation of Software Cost and Leasehold Assetsa) 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.

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

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 EmployeeRetirementBenefits 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 Tax Provision 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 Tax Deferred 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.


74

3.18 Stationery Stationery 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 Assets Non-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 2071 have been stated in point no. 24 of Notes to Accounts.

3.20 Provisions and Contingent Liabilities The 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 Bonus Provision for staff bonus is made as per the NRB Directive.

75


Schedule 4.33

KuMari BanK liMitednotes to accounts

financial year 16 July 2013 to 16 July 2014 (1 shrawan 2070 to 32 ashad 2071)

1. Provision for staff bonus Provision 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 Reserve As per the requirement of Nepal Rastra Bank, 20% of current year’s profit has been transferred to

General Reserve.

4. Tax Settlement Outstanding / Contingent Liability Tax reassessment by Large Tax Payers’ Office has been completed up to the FY 2066/67. We are in

process of filing a case in Supreme Court against tax assessment order for the FY 2063/64. For tax reassessment of subsequent years, the bank has filed cases against the decision of tax authorities.

5. Gratuity Expenses During the year, the Bank has provided Rs. 13,317,642/- (Previous Year Rs. 14,117,726/-) on account of

gratuity.

6. Dividend and Bonus Board meeting of the bank held on 31st Bhadra 2071 has decided to propose 33% stock dividend

from the profit of current fiscal year and 1.74% cash dividend (tax on bonus share).

Rs. 400,000,000/- that was transferred from Bond Redemption Reserve to General Reserve Fund in the fiscal year 069/70, has been proposed to transfer to Capital Redemption Reserve in fiscal year 070/71 which is further proposed to be distributed as Stock Dividend.

7. Unpaid Dividend Out 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 Rs. 9,985,798 is still payable because shareholders have not yet collected 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 Million

Opening Balance Total Disbursed Total Settled Outstanding20,120 23,674 20,985 22,809


76

9. Summary of Changes in deposit during the year Growth in deposits during the year is given below:

NPR. In Million

Particulars This Year (Rs.) Last Year (Rs) Changes in amount1) Current Deposit 1,237 1,038 199a) Local Currency 1,202 1,008 194

b) Foreign Currency 35 30 5

2) Saving Deposit 7,234 6,823 411a) Local Currency 7,117 6,750 367


3) Fixed Deposit 12,142 11,353 789a) Local Currency 11,446 10,328 1,118

b) Foreign Currency 696 1,025 (329)

4) Call Deposit 6,812 5,967 845a) Local Currency 6,585 5,879 706


5) Margin Deposit 154 137 17a) Local Currency 154 137 17

b) Foreign Currency - 0 -

Total Deposit 27,578 25,319 2,260

10. Average Interest Rate SpreadParticulars Percentage

The weighted average yield rate on loans and investments 8.87

The weighted average cost rate on deposits and borrowings 5.17

The weighted average interest rate spread 3.70

11. Summary of amortizable expenses yet to be written off No such item.

12. Summary of concentration of exposure No balance sheet and off balance sheet transaction have been highly concentrated to a single

person, firm, organization 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 22,809 457 2.00

Deposits 27,578 3,046 11.05

Off Balance Sheet Items 3,122 356 11.41

77


13.ClassificationofAssetsandLiabilitiesbasedonMaturity NPR. In Million

S.N. Particulars1-90 91-180 181-270 271-365 More than

Totaldays days days days 1 year

Assets

1 Cash Balance 777.84 - - - - 777.84

2 Balance with Banks & FIs 4,118 - - - - 4,118

3 Investment in Foreign Banks 193 289 - - - 482

4 Call Money 507 - - - - 507

5 Government Securities 653 748 208 913 136 2,658

6 Nepal Rastra Bank Bonds - - - - - -

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

8 Loans & Advances 9,683 3,102 1,944 1,116 6,963 22,809

9 Interest Receivable 297 1 1 1 0 300

10 Reverse Repo - - - - - -

11 Acceptance Receivable - - - - - -

12 Payments under S.No. 20,21 & 22 789 235 101 - 1,254 2,379

13 Others 149 50 50 50 261 559

Total (A) 17,167 4,425 2,303 2,079 8,615 34,590Liabilities

14 Current Deposits 626 209 209 209 139 1,391

15 Saving Deposits (including call) 3,511 702 702 702 8,428 14,046

16 Fixed Deposits 1,498 3,148 3,395 3,339 763 12,142

17 Debentures/Bonds - - - - - -

18 Borrowings 34 168 - - - 202Call/Short Notice - - - - - -

Inter-bank/Financial Institutions 34 168 - - - 202

Refinance - - - - - -

Others - - - - - -

19 Other Liabilities and Provisions 53 5 5 5 - 69Sundry Creditors - - - - - -

Bills Payable 11 4 4 4 - 22

Interest Payable 37 - - - - 37

Provisions - - - - - -

Others 5 2 2 2 - 10

20 Acceptance Liabilities 254 63 - - - 318

21 Irrevocable Loan Commitment 168 238 238 238 238 1,118

22 Letter of Credit/Guarantee 1,249 556 273 162 565 2,805

23 Repo - - - - - -

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

25 Others 118 29 29 29 - 204

Total (B) 7,511 5,117 4,851 4,683 10,132 32,294Net Financial Assets (A-B) 9,656 (692) (2,548) (2,603) (1,518) 2,296

Cumulative Net Financial Assets 9,656 8,965 6,417 3,813 2,296 -


78

14. Borrowings by the bank against the collateral of own assets The 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. Noor Pratap JB Rana - Chairman (Promoter)Mr. Santosh Kumar Lama - Director (Promoter)Prof. Dr. Rajan B. Paudel - Director (Professional)Dr. Shobha Kant Dhakal - Director (Public)Mr. Uttam P. Bhattarai - Director (Promoter)Mr. Naresh Dugad - Director (Promoter)Mr. Puna Ram Bhandari - Director (Public) Mr. Rasendra Bahadur Malla - Director (Public)Mr. Uday Krishna Upadhyaya - Chief Executive Officer

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

Categories Current YearShort-term employee benefits 9,197,215

Signing bonus -

Post-employment benefits -

Other long-term benefits -

Termination benefits -

Share-based benefits -

Total 9,197,215

Above figure includes final clearance of medical, leave encashment and gratuity of then Acting CEO who became the CEO of the bank from 05 September 2013. In addition to the above, bank bears the expenses relating to mobile bill and fuel for the vehicle.

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 YearMeeting Allowances 2,104,300

Other expenses 1,87,500

Total 22,91,800

79


16. Paid up Share Capital Paid 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 1,186,099,200 In 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 million proposed in the FY 2070/71

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

18. Deferred Tax Component of Deferred Tax Assets

Amount in NPR.

Particulars As per financial statement As per Income Tax act Taxable temporary difference

Fixed assets base 149,920,951 15,27,52,973 28,32,022

Total 149,920,951 15,27,52,973 28,32,022 Current Deferred Tax Assets 8,49,607

Opening Deferred Tax Asset 1,079,936

Adjustment (2,30,329)

Deferred tax is calculated considering the existing tax rate of 30%. As prescribed by NRB Directives, total deferred tax assets up to July 16, 2014 amounting Rs. 849,607 have been ear-marked as deferred tax reserve.


80

19. Reconciliation Status NPR. In Million

Particulars Upto 1 Year Above 1 Year to 3 Years More than 3 Years Grand TotalThey Credit 47 10 0 58We Debit 25 0 0 26They Debit 1 0 0 1We Credit 36 1 1 38Total 110 11 1 122

20. Details of Software Application Amount in NPR.

Net Opening Balance Additions during the year Amortization during the year Net Closing Balance11,241,451 667,152 5,074,428 6,834,175

21. Interest Capitalisation Following 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 2070/71 is as follows –

Amount in NPR.

SN Name of the client Type Capitalized Interest NRB approval date1 JOSHI HYDROPOWER DEV. COM. PVT. LT Term Loan 11,705,455 9/27/2069

2 RURU JALBIDHYUT PARIYOJANA CO.P.LTD Term Loan 1,043,563 9/30/2070

3 MARUTI CEMENTS PVT.LTD Term Loan 9,988,266 6/14/2070

4 BIRATNAGAR ASPATAL PVT. LTD Term Loan 7,490,916 10/14/2070

5 MAILUNG KHOLA HYDROPOWER CO. P. LTD Term Loan 2,560,852 7/1/2068

6 SARBOTTAM CEMENT PVT. LTD Term Loan 8,107,326 9/22/2070

7 ELECTROCOM AND RESEARCH CENTER P. L Term Loan 8,116,247 7/1/2068

8 RADHI BIDHYUT COMPANY LTD Term Loan 8,801,240 5/25/2069

9 NEPAL HEALTH CARE CO-OPERATIVE LTD Term Loan 6,865,862 3/25/2070

10 SANIMA MAI HYDROPOWER PVT. LTD Term Loan 11,908,676 1/29/2070

Total 40,896,378

22. Interest income recognised on deferred cash basis Of the total amount of interest due as on Ashad end 2071, interest of Rs. 15,281,297 realised in cash by

15 of Shrawan 2071 has been recognised as interest income on balance sheet date which complies NRB directive regarding recognition of interest income on deferred cash basis.

23. 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. As per NAS 14, ‘Employee Benefits’ (Voluntary Compliance for now) bank is required to account for such liability on accrual basis.

81


24. Non-banking assets (NBA) Disclosure Bank’s detail of NBA as on Ashad end 2071 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 Vaidya (Rajbhandari), Kathmandu 4-Dec-12 5,216,247

Shilu Housing & Developers Pvt. Ltd., Lalitpur 5-Jul-13 52,795,000

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

Total 60,903,472

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

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

26. Lending to National Trading Limited and problematic FIs The 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.

27. Mortgaged property under Rokka from NRB The mortgaged property relating to following loans are under Rokka from NRB –

Name of Borrower

Loan Amount (Ashad end 2070) Loan Classification

Loan Loss Provision

RokkaPrincipal Interest Total Letter No. Date

Aayusha Developers Pvt. Ltd.

121,014,176 13,832,464 134,846,640 Good 60,507,088 Bai.Su.Bi./Bi.Ni./ /069/70 2070-03-25

Kohinoor Hill Housing (P). Ltd.

73,719,086 12,211,444 85,930,530 Good 36,859,543 Bai.Su.Bi./Bi.Ni./ /069/70 2070-03-25

28. Rounding off and Comparative Figures Figures are rounded to nearest rupees. Previous year's figure has been regrouped or rearranged

where necessary.


82

Sch

edul

e 4.

34K

uM

ar

i B

an

K l

iMit

ed

sta

te

Me

nt

of

loa

n a

va

ile

d B

y B

an

K's

pr

oM

ot

er

/pr

oM

ot

er

s' G

ro

up

fr

oM

o

th

er

Ba

nK

an

d f

ina

nc

ial

ins

tit

ut

ion

s B

y p

led

Gin

G t

he

ir s

ha

re

s.

as

on

32

as

ha

d 2

071

(16

July

201

4)

S.N

o.Pr

omot

er's

/ Sh

areh

olde

rs's

Nam

e

Prom

oter

Sh

ares

un

der t

he

owne

rshi

p of

Pr

omot

er

% o

f Pa

id-u

p ca

pita

l

Det

ails

of L

oan

Loa

n A

mou

nt (R

s.)

Num

ber o

f Sh

are

Pled

ge

Rem

arks

Tota

l Sha

res

Lend

ing

Ban

k1

RA

JEN

DR

A D

AS

S

HR

ES

THA

13,

372

0.07

CE

NTR

AL

FIN

AN

CE

LIM

ITE

D -

2

,000

MA

CH

HA

PU

CH

HE

RE

BA

NK

LI

MIT

ED

-

5,1

60

2LA

XM

AN

SH

RE

STH

A 1

88,8

71

1.03

GU

RK

HA

DE

VE

LOP

ME

NT

BA

NK

LIM

ITE

D 6

,840

,000

8

2,62

0

3B

HIM

KR

ISH

NA

UD

AS

133

,206

0.

73JA

NAT

A B

AN

K N

EPA

L LI

MIT

ED

6,1

31,2

54

116

,848

4 P

HU

RB

A B

AN

GD

EL

LAM

A 1

33,2

06

0.7

3 N

AB

IL B

AN

K L

IMIT

ED

-

6,4

68

-

SID

DH

AR

THA

BA

NK

LIM

ITE

D 6

,688

,584

5

8,00

0

5 G

OV

IND

A D

AS

S

HR

ES

THA

199

,810

1.

09LU

MB

INI B

AN

K L

IMIT

ED

*33

,274

,363

.39

**25

,350

,203

.95

114

,252

Ple

dged

as

addi

tiona

l sec

urity

ag

ains

t the

Cre

dit F

acili

ties

avai

led

by

*Him

alay

an T

rave

ls &

Tou

rs P

vt.L

td.

and

** O

rient

al F

irm P

vt.L

td.

NA

BIL

BA

NK

LIM

ITE

D #

55,4

44,2

11.0

0 4

3,20

0 #P

ledg

ed a

s ad

ditio

nal s

ecur

ity

agai

nst t

he c

redi

t fac

ilitie

s av

aile

d by

H

imal

ayan

Tra

vels

& T

ours

Pvt

.Ltd

.

6B

IDH

YA K

RIS

HN

A S

HR

ES

THA

244

,213

1.

34 L

UM

BIN

I BA

NK

LIM

ITE

D

*33

,274

,363

.39

**25

,350

,203

.95

1,14

,252

Ple

dged

as

addi

tiona

l sec

urity

ag

ains

t the

Cre

dit F

acili

ties

avai

led

by

*Him

alay

an T

rave

ls &

Tou

rs P

vt.L

td.

and

** O

rient

al F

irm P

vt.L

td.

PR

IME

CO

MM

ER

CIA

L B

AN

K

NE

PAL

LIM

ITE

D 2

8,08

9,42

0 2

6,78

0

NA

BIL

BA

NK

LIM

ITE

D #

55,4

44,2

11.0

0 6

9,80

0 #P

ledg

ed a

s ad

ditio

nal s

ecur

ity

agai

nst t

he c

redi

t fac

ilitie

s av

aile

d by

H

imal

ayan

Tra

vels

& T

ours

Pvt

.Ltd

.

83


7A

NIL

DA

S S

HR

ES

THA

133

,206

0.

73LU

MB

INI B

AN

K L

IMIT

ED

*33

,274

,363

.39

**25

,350

,203

.95

71,

668

Ple

dged

as

addi

tiona

l sec

urity

ag

ains

t the

Cre

dit F

acili

ties

avai

led

by

*Him

alay

an T

rave

ls &

Tou

rs P

vt.L

td.

and

#Orie

ntal

Firm

Pvt

.Ltd

.

NA

BIL

BA

NK

LIM

ITE

D #

55,4

4421

1 2

0,80

0 #P

ledg

ed a

s ad

ditio

nal s

ecur

ity

agai

nst t

he c

redi

t fac

ilitie

s av

aile

d by

H

imal

ayan

Tra

vels

& T

ours

Pvt

.Ltd

.

8 S

UN

IL N

AN

DA

SIN

GH

P

RA

DH

AN

1

3,32

0 0.

07R

ELI

AB

LE D

EV

ELO

PM

EN

T B

AN

K L

IMIT

ED

1,6

50,0

00

9,0

00

9M

AD

HAV

KU

MA

R

BA

SN

ET

13,

320

0.07

RE

LIA

BLE

DE

VE

LOP

ME

NT

BA

NK

LIM

ITE

D 1

,650

,000

9

,000

10S

HIV

A S

HA

NK

AR

A

GR

AWA

L 1

16,6

88

0.64

NM

B B

AN

K L

IMIT

ED

-

35,

925

11S

OP

HIE

UPA

DH

AYA

63,

939

0.35

LUM

BIN

I LE

AS

ING

AN

D

FIN

AN

CE

CO

MPA

NY

LIM

ITE

D 1

,500

,000

2

2,36

1

CE

NTU

RY

CO

MM

ER

CIA

L B

AN

K L

IMIT

ED

6,4

34,4

97

8,2

00

12K

AM

AL

BIK

RA

M

SIN

GH

5,3

28

0.03

NE

PAL

HO

US

ING

AN

D

ME

RC

HA

NT

FIN

AN

CE

LI

MIT

ED

963

,614

3

,011

13P

EG

I PA

ND

EY

16,

160

0.09

YE

TI D

EV

LOP

ME

NT

BA

NK

LI

MIT

ED

1,1

38,8

38

14,

176

14S

UR

EN

DR

A B

HA

ND

AR

I 6

6,60

3 0.

36C

LEA

N E

NE

RG

Y D

EV

LOP

ME

NT

BA

NK

LI

MIT

ED

-

52,

484

15S

ITA

GU

RU

NG

39,

961

0.22

SA

NIM

A B

AN

K L

IMIT

ED

400

,000

9

,096

16K

AN

CH

AN

SH

AR

MA

2,6

64

0.01

H &

B D

EV

LOP

ME

NT

BA

NK

LI

MIT

ED

522

,901

2

,337

17K

UM

UD

KU

MA

R

DU

GA

R 1

13,5

96

0.62

H &

B D

EV

LOP

ME

NT

BA

NK

LI

MIT

ED

1,3

88,9

31

85,

269

18B

IKA

SH

DU

GA

R 9

3,24

5 0.

51H

& B

DE

VLO

PM

EN

T B

AN

K

LIM

ITE

D -

8

1,79

4

19B

AC

HH

A R

AJ

TATE

R 5

3,28

2 0.

29N

IC A

SIA

BA

NK

LTD

1,1

74,6

75

41,

987

20A

NA

ND

A K

UM

AR

R

UN

GAT

A 3

9,96

2 0.

22N

EPA

L S

BI B

AN

K L

IMIT

ED

75,

255,

400

9,4

41

NA

BIL

BA

NK

LIM

ITE

D 9

9,51

1,99

3 2

5,61

4

21N

AVIN

AG

RAW

AL

39,

961

0.22

NM

B B

AN

K L

IMIT

ED

4,7

90,4

38

18,

404

22D

EVA

KI N

AN

DA

N

AG

RAW

AL

42,

625

0.23

NM

B B

AN

K L

IMIT

ED

-

24,

431


84 23B

ALR

AM

NE

UPA

NE

39,

911

0.22

SID

DH

AR

THA

BA

NK

LIM

ITE

D 2

92,6

72

23,

370

24G

AN

GA

AM

ATYA

66,

603

0.36

PR

IME

CO

MM

ER

CIA

L B

AN

K

NE

PAL

LIM

ITE

D 1

,588

,009

2

2,17

4

25B

IJAY

BA

HA

DU

R

MA

NA

ND

HA

R 1

3,30

6 0.

07U

NIO

N F

INA

NC

E L

IMIT

D -

5,7

60

26D

EV

I LA

L B

IST

665

0.

00B

HIM

ES

HO

R C

O-O

PE

RAT

IVE

LI

MIT

ED

60,

197

524

27S

HA

MB

HU

KU

MA

R

BA

SN

ET

665

0.

00B

HIM

ES

HO

R C

O-O

PE

RAT

IVE

LI

MIT

ED

394

,714

5

83

28B

IKR

AM

BIS

TA 1

,866

0.

01S

APA

NA

MU

LTI P

UR

PO

SE

C

O-O

PE

RAT

IVE

SO

CIE

TY

LIM

ITE

D 4

17,8

36

1,0

23

29R

AJE

ND

RA

PR

AS

AD

S

HR

ES

THA

279

,196

1.

53LA

XM

I BA

NK

LIM

ITE

D 5

2,00

9,80

0 1

16,7

53

30S

AB

ITR

I GU

RU

NG

532

,828

2.

91LA

XM

I BA

NK

LIM

ITE

D 5

2,00

9,80

0 2

33,2

40

31JE

EVA

N N

EPA

L 2

6,64

1 0.

15S

RIJ

AN

A FI

NA

NC

E L

IMIT

ED

1,0

50,0

00

21,

210

32B

OD

H P

RA

SA

D

TRIP

ATH

I 6

7,30

9 0.

37IN

TER

NAT

ION

AL

DE

VE

LOP

ME

NT

BA

NK

LI

MIT

ED

2,3

67,9

00

47,

408

33P

RA

BH

U

INV

ES

TME

NT

P.LT

D 1

33,0

64

0.73

PR

IME

CO

MM

ER

CIA

L B

AN

K

NE

PAL

LIM

ITE

D 2

8,67

7,51

4 1

16,7

23

Tota

l29

2859

216

.02

382

,998

,987

1

,754

,756

85



fiscal year 2070/71 (2013/14)coMparison of unaudited and audited financial stateMent as of fy 2070/71

Rs. in 000'

S.N. Particulars

As per Unaudited Financial Statement

As per Audited

Financial Statement

VarianceReasons for

Variance Amount %

1 Total Capital and Liabilities (1.1 to 1.7) 31,932,433 31,930,990 (1,443) 0.00% Reasons

mentioned below

1.1 Paid Up Capital 1,828,332 2,431,682 603,350 33.00% Proposed bonus shares

1.2 Reserve and Surplus 1,169,283 534,924 (634,359) -54.25%

Issue of bonus share, tax on bonus share and change in profit

1.3 Debenture and Bond - - - -

1.4 Borrowings 201,952 201,952 - -

1.5 Deposits (a+b) 27,578,376 27,578,376 - -

a. Domestic Currency 26,503,880 26,503,880 - -

b. Foreign Currency 1,074,496 1,074,496 - -

1.6 Income Tax Liability - - -

1.7 Other Liabilities 1,154,490 1,184,056 29,566 2.56%

Adjustment of provision for expenses made at year end and tax on bonus share

2 Total Assets (2.1 to 2.7) 31,932,433 31,930,990 (1,443) 0.00%2.1 Cash & Bank Balance 4,895,685 4,895,685 - -

2.2 Money at Call and Short Notice 507,478 507,478 - -

2.3 Investments 3,164,626 3,164,626 - -

2.4 Loans and Advances (a+b+c+d+e+f) 22,808,503 22,808,503 - -

a. Real Estate Loan 2,040,879 2,040,879 - -

1. Residential Real Estate Loan 234,772 234,772 - -

2. Business Complex & Residential Apartment Construction Loan 617,892 617,892 - -

3. Income Generating Commercial Complex Loan - - -

4. Other Real Estate loan 1,188,215 1,188,215 - -

b. Personal Home Loan of Rs.10 million 1,948,109 1,948,109 - -

c.Margin Type Loan 538,887 538,887 - -

d.Term Loan 4,399,845 4,399,845 - -

e.Overdraft Loan/TR Loan/WC Loan 12,624,206 12,624,206 - -

f. Others 1,256,576 1,256,576 - -

2.5 Fixed Assets 235,769 235,776 7 0.00% Depreciation adjustment.

2.6 Non Banking Assets - - - -

2.7 Other Assets 320,371 318,921 (1,450) -0.45%Adjustment of advance tax and deferred tax


86

3 Profit and Loss Acccount

3.1 Interest Income 2,410,762 2,410,784 23 0.00% Accrued Nostro Income booked

3.2 Interest Expenses 1,575,312 1,575,312 - -

A. Net Interest Income (3.1-3.2) 835,450 835,473 23 0.00%

3.3 Fees, Commission and Discount 188,725 188,725 - -

3.4 Other Operating Income 56,647 56,945 298 0.53% Accrued income booked

3.5 Foreign Exchange Gain/ Loss (Net) 85,155 85,155 - -

B. Total Operating Income (A.+3.3+3.4+3.5) 1,165,977 1,166,298 321 0.03%

3.6 Staff Expenses 221,653 221,701 47.68 0.02% Adjustment of expenses

3.7 Other Operating Expenses 240,594 240,121 (473) -0.20%Adjustment of expense provision and depreciation

C. Operating Profit Before Provision (B.- 3.6-3.7) 703,730 704,476 747 0.11%

3.8 Provision for Possible Losses 234,437 236,312 1,875 0.80% LLP adjustment

D. Operating Profit (C-3.8) 469,293 468,165 (1,128) -0.24%

3.9 Non Operating Income/Expenses (Net) 2,556 2,540 (16) -0.62% Adjustment of expenses

3.10 Write Back of Provision for Possible Loss 72,191 76,151 3,960 5.49% LLP adjustment

E. Profit from Regular Activities (D+3.9+3.10) 544,040 546,856 2,816 0.52%

3.11 Extraordinary Income/Expenses (Net) - - -

F. Profit before Bonus and Taxes ( E. + 3.11) 544,040 546,856 2,816 0.52%

3.12 Provision for Staff Bonus 49,458 49,714 256 0.52% Change in profit

3.13 Provision for Tax 153,673 155,487 1,813 1.18% Change in profit and deferred tax

G. Net Profit/Loss (F.-3.12-3.13) 340,909 341,655 746 0.22%

87


Schedule 4 AKuMari BanK liMited

unaudited financial results (quarterly)as at fourth quarter (16/July/2014) of the fiscal year 2013/2014

Amount in Rs. '000

S.N. Particulars

32.03.2071/ 16.07.2014

This Quarter Ending

30.12.2070/ 13.04.2014

Previous Quarter Ending

31.03.2070/ 15.07.2013

Corresponding Previous Year

Quarter Ending 1 Total Capital and Liabilities (1.1 to 1.7) 31,932,433 31,916,218 28,973,041

1.1 Paid Up Capital 1,828,332 1,828,332 1,828,332

1.2 Reserve and Surplus 1,169,283 828,374 828,374

1.3 Debenture and Bond - - -

1.4 Borrowings 201,952 288,000 -

1.5 Deposits (a+b) 27,578,376 27,424,123 25,318,569

a. Domestic Currency 26,503,880 26,138,510 24,102,282

b. Foreign Currency 1,074,496 1,285,613 1,216,287

1.6 Income Tax Liability - - -

1.7 Other Liabilities 1,154,490 1,341,941 997,766

2 Total Assets (2.1 to 2.7) 31,932,433 31,916,218 28,973,041 2.1 Cash & Bank Balance 4,895,685 3,526,890 3,406,883

2.2 Money at Call and Short Notice 507,478 1,590,182 753,410

2.3 Investments 3,164,626 3,891,224 4,135,142

2.4 Loans and Advances (a+b+c+d+e+f) 22,808,503 22,331,275 20,119,789

a. Real Estate Loan 2,040,879 2,050,679 2,185,842

1. Residential Real Estate Loan 234,772 143,689 127,538

2. Business Complex & Residential Apartment Construction Loan

617,892 616,711 590,274

3. Income Generating Commercial Complex Loan - - -

4. Other Real Estate loan 1,188,215 1,290,279 1,468,030

b. Personal Home Loan of Rs. 1 Crore or Less 1,948,109 1,757,776 1,637,162

c. Margin Type Loan 538,887 298,867 338,866

d. Term Loan 4,399,845 4,120,950 3,251,548

e. Overdraft Loan/TR Loan/WC Loan 12,624,206 12,556,227 11,324,489

f. Others 1,256,576 1,546,775 1,381,882

2.5 Fixed Assets 235,769 237,080 255,865

2.6 Non Banking Assets - - -

2.7 Other Assets 320,371 339,566 301,952


88

3 Profit and Loss Account Upto This

Quarter End

Upto Pervious Quarter End

Corresponding Previous Year Quarter End

3.1 Interest Income 2,410,762 1,779,860 2,464,307

3.2 Interest Expenses 1,575,312 1,192,733 1,486,282

A. Net Interest Income (3.1-3.2) 835,450 587,127 978,025 3.3 Fees, Commission and Discount 188,725 144,687 138,200

3.4 Other Operating Income 56,647 42,099 41,862

3.5 Foreign Exchange Gain/ Loss (Net) 85,155 66,217 56,993

B. Total Operating Income (A.+3.3+3.4+3.5) 1,165,977 840,130 1,215,080 3.6 Staff Expenses 221,653 168,092 203,805

3.7 Other Operating Expenses 240,594 168,838 230,470

C. Operating Profit Before Provision (B.- 3.6-3.7) 703,730 503,200 780,805 3.8 Provision for Possible Losses 234,437 240,754 314,619

D. Operating Profit (C-3.8) 469,293 262,445 466,186 3.9 Non Operating Income/Expenses (Net) 2,556 3,458 (11,134)

3.1 Write Back of Provision for Possible Loss 72,191 36,423 5,259

E. Profit from Regular Activities (D+3.9+3.10) 544,040 302,326 460,311 3.11 Extraordinary Income/Expenses (Net) - - -

F. Profit before Bonus and Taxes ( E. + 3.11) 544,040 302,326 460,311 3.12 Provision for Staff Bonus 49,458 27,484 41,846

3.13 Provision for Tax 153,673 82,453 127,016

G. Net Profit/Loss (F.-3.12-3.13) 340,909 192,389 291,448

4 RatiosAt the End

of This Quarter

At the End of Previous

Quarter

At the End of Corresponding Previous Year

Quarter4.1 Capital Fund To RWA 11.92% 11.73% 12.17%

4.2 Non Performing Loan (NPL) to Total Loan 3.19% 3.69% 2.89%

4.3 Total Loan Loss Provision to Total NPL 125.41% 115.68% 128.94%

4.4 Cost of Funds (annualized - LCY) 6.03% 6.17% 6.61%

4.5 Credit to Deposit Ratio (as per NRB directives) 77.37% 77.10% 75.26%

4.6 Base Rate (FTM) 8.86% 8.50% 10.36%

4.7 Average Interest Rate Spread (as per NRB directives) 3.62% 5.17%

89


S.N. Particular Current Year a Paid Up Equity Share Capital 1,828,332,000

b Irredeemable Non- cumulative preferenece share -

c Share premium -

d Proposed Bonus Equity Share 603,349,560

e Statutory General Reserves 467,413,482

f Retained Earnings 26,270,265

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

h Bond Redemption Reserve -

i Capital Adjustment Reserve -

j Dividend Equalization Reserves -

k Other free Reserve 849,607

Total Tier I Capital 2,926,214,913

Capital Structure and Capital Adequacy

Tier I Capital and a breakdown of its components Amount in Rs.

KuMari BanK liMiteddisclosure under Basel ii as at 16 July 2014

(for f/y 2013/14)

Tier 2 Capital and a breakdown of its componentsAmount in Rs

S.N. Particular Current Year a Cumulative and/or Reedemable Preference Share -

b Subordinated term debt -

c Hybrid Capital Instuments -

d General Loan Loss provision 218,901,885

e Exchange Equalisation Reserve 20,391,043

f Investment Adjustment Reserve 20,000,000

g Assets Revaluation Reserve -

h Other Reserve (Deferred Tax Reserve) -

Total of Tier 2 Capital 259,292,928

Deductions from Capital:

The bank does not hold any amount as stipulated in the Capital Adequacy Framework that qualifies for deduction from Capital.


90

S.N. Particular Current Year a Tier I Capital 2,926,214,913

b Tier II Capital 259,292,928

Total Capital Fund 3,185,507,842

S.N. Particular Current Year (%) a Tier 1 Capital to total RWA 10.85

b Total Capital Fund (Tier 1 + Tier 2) to Total RWA 11.81

Total Qualifying CapitalAmount in Rs

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 Rs.

S.N. Particular Current Year 1 Risk Weighted Exposure for Credit Risk 24,136,980,509

2 Risk Weighted Exposure for Operational Risk 1,633,843,987

3 Risk Weighted Exposure for Market Risk 170,673,428

Total 25,941,497,924

Risk weighted exposures under each of 11 categories of Credit Risk Amount in Rs.

S.N. Particular Current Year 1 Claims on government and central bank -

2 Claims on other official entities -

3 Claims on banks 389,798,136

4 Claims on corporate and securities firms 13,939,528,720

5 Claims on regulatory retail portfolio 2,453,699,898

6 Claims secured by residential properties 1,059,227,635

7 Claims secured by commercial real estate 1,122,257,988

8 Past due claims 892,196,915

9 High risk claims 1,908,223,108

10 Other Assets 539,707,842

11 Off balance sheet items 1,832,340,267

Total 24,136,980,509

Capital Adequacy RatiosAmount in Rs

91


Total risk weighted exposure calculation table - Amount in Rs.

S.N. Particular Current Year 1 Risk Weighted Exposure for Credit Risk 24,136,980,509

2 Risk Weighted Exposure for Operational Risk 1,633,843,987

3 Risk Weighted Exposure for Market Risk 170,673,428

Total Risk Weighted Exposure 25,941,497,924

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

Addition to RWE as per supervisiory review (3%) 778,244,938

Add RWE equvalent to reciprocal of capital charge of 2 % of gross income.

256,105,032

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

Total Risk Weighted Exposure (After Bank's adjustment of Pillar II) 26,975,847,893

Amount of NPAs (Non Performing Assets) both gross and net Current Year's Amount in Rs.

S.N. Non Performing Assets Gross Amount Net Amount1 Restructured / Rescheduled 68,732,063 60,140,555

2 Substandard 49,785,517 37,339,137

3 Doubtful 258,697,625 129,348,812

4 Loss 541,099,299 -

Total 918,314,503 226,828,505

NPA Ratios

S.N. Particulars Current Year (%)1 Gross NPA to gross advances 4.03%

2 Net NPA to net advances 1.04%

Movement of Non Performing Assets Amount in Rs.

S.N. Non Performing Assets Previous Year Change Current Year1 Restructured / Rescheduled - 68,732,063 68,732,063

2 Substandard 23,467,414 26,318,103 49,785,517

3 Doubtful 404,012,981 (145,315,356) 258,697,625

4 Loss 349,166,251 191,933,047 541,099,299

Total 776,646,646 141,667,857 918,314,503

Write Off of Loan and Interest Suspense Amount in Rs

S.N. Particular Current Year1 Loan Write Off -

2 Interest Suspense Write Off -


92

Movement of Loan Loss Provision and Interest SuspenseAmount in Rs.

S.N. Particular Previous Year Change Current Year1 Loan Loss Provision 750,471,018 159,916,865 910,387,883

2 Interest Suspense 249,449,730 30,585,024 280,034,755

Details of additional loan loss provisionCurrent year's amount in Rs

S.N. Loan Classification Additional provision 1 Good 25,470,463

2 Restructured / Rescheduled 8,591,508

3 Substandard 6,579,526

4 Doubtful (72,657,678)

5 Loss 191,933,047

Total 159,916,865

Segregation of investment portfolio Amount in Rs.

S.N. Investment category Current Year 1 Held for trading -

2 Held to maturity 3,139,690,390

3 Available for sale 24,935,500

Total 3,164,625,890

93


��

��

��

��

��

��

��

��

��

��

��

��

��


94

Branches

95


Inside Kathmandu ValleyPutalisadak ATM I, II & IIIKumari Bank Limited

New Road ATMKumari Bank Limited

New Baneshwor ATMRoyal Thai Restaurant premise

Ratna Park ATMNepal Electricity Authority Building

Thamel ATMFire Club Building

Kantipur Mall ATMKumari Bank Limited

Koteshwor ATMKumari Bank Limited

Durbarmarg ATMKumari Bank Limited

Chuchhepati ATMKumari Bank Limited

ATM Locations

Budhanilkantha ATMKumari Bank Limited

Old Baneshwor ATMKumari Bank Limited

Kumaripati ATMKumari Bank Limited

Naxal ATMOpposite Police Head Quarter

Lazimpat ATMBig Mart Building

Jhamsikhel ATM 8 Degrees Fine Dine & Venues

Mangal Bazar ATMYala Guest House Premise, Patan Durbar Square, (Near Honacha)

Balkhu ATMBalkhu Chowk

Kalanki ATMMillennium House, Near Kalanki Chowk

Outside Kathmandu ValleyBhairahawa ATMKumari Bank Limited, Narayan Path

Pokhara ATMChipledhunga

Pokhara ATM IILakeside, Opposite to Lalupate Marga

Jhapa ATMKumari Bank Limited, Birtamode

Biratnagar ATMKumari Bank Limited, Goshwara Road, Morang Byapaar Sangh Building

Itahari ATMKumari Bank Limited, Pathivara Market, Dharan Road

Baglung ATMKumari Bank Limited, Mahendra Path

Narayangadh ATMKumari Bank Limited, Pulchowk

Birgunj ATM IKumari Bank Limited, Adarsha Nagar, Parsa

Birgunj ATM IINational Medical College

Urlabari ATMKumari Bank Limited, Morang

Butwal ATMInfront of Kumari Bank LimitedRam Mandir Line

Nepalgunj ATMSurkhet Road, Dhambhoji

Dhangadi ATMRatopul, Dhangadi, Kailali

Surkhet ATMBirendra Nagar, Surkhet

Damauli ATMKumari Bank Limited, Damauli-2

Sauraha ATMBacchauli-2

Salyan ATMKumari Bank Limited, Khalanga

Tulsipur ATMB.P. Chowk, Tulsipur, Dang

Kawasoti ATMKumari Bank Limited, Sabhapati Chowk