19th annual report

7/31/2019 19th Annual Report

1/84

How we are

building

a better bank

every day

ANNUAL REPORT

2010/11


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Contents07 Chairmans Message

09 Working Together With Employees

10 Board Of Directors13 CEOs Message

14 ExecuveTeam

16 Management Team

19 Working Together With Customers

20 Report Of The Board Of Directors To The 19Th

AnnualGeneralMeeng

26 Financial Highlights

29 Working Together With Shareholders

30 OurServices

32 Corporate Social Responsibility (CSR)

35 Working Together With Society

36 CorporateGovernance

38 Working Together With Global Partners

40 AddionalDisclosure

42 Auditors Report

43 Balance Sheet

44 ProtAndLossAccount

45 ProtAndLossAppropriaonAccount

46 Statement Of Changes In Equity

47 Cash Flow Statement

48 Schedules


4/84

Himalayan Bank Ltd2

HimalayanBanksmissionistobecomethepreferredprovider

ofqualityfinancialservicesinthecountry.Therearetwo

componentstoourmission:preferredproviderandquality

financialservices.Webelievethatourmissionwillbe

accomplishedonlybysasfyingthesetwoimportantcomponents

withthecustomeratthefocalpointofalloureorts.

HimalayanBankhasthevisionofbecomingaleadingbankofthe

countrybygainingsubstanalbusinessgrowththroughpremium

productsandservicestocustomers,thusensuringaracveand

substanalreturnstoallourstakeholders.

Vision

Mission


5/84

Annual Report 2010/11 3

I have been banking

here for many years

now and it is always a

pleasant surprise to me

when I get the same

type of respect and

service consistently

without fail.

When I see the grateful

smile on my customers

faces, I feel that our

bank is doing a good

job of living up to its

promise of meeng

their needs swily

and effecvely.

It is a pleasure working

with Himalayan Bank

because of its singleminded focus on

ensuring customer

sasfacon. This

makes my work

very grafying.

One of the wisest

decisions I made was

to buy and hold on

to Himalayan Bank

shares because I have

been receiving good

dividends year aer

year without fail.

Our employees arehighly movated so this

makes my job easier. Of

course, there is always

room for improvement

and my efforts are

geared towards further

enhancing producvity

and e ciency.

As a premier bank of

the country, HBL has

a lot of responsibility

on its shoulders not

only as a nancial

instuon but also

as a responsible

corporate cizen.

Himalayan Bank has

always been at the

forefront in fullling

its corporate social

responsibilies. Our

organizaon has

received substanal

assistance to conduct

social welfare works.

ShareholderCashier

Remiance

Departmen

Senior Mana

Human Reso

Departme

Himalayan Bank played

a very important part in

se ng up my business.

Without their help, I

wouldnt have been

able to succeed.

HBL believes in

developing long

standing relaonships

with its clients and will

always be there to

give a helpinghand if needed.

Security Guard

Employee

I have been workinghere for the last 15

years. I feel that I am

fortunate to be working

with Himalayan

Bank because of

the excellent work

environment in

the organizaon.

HBL e eves n

eve op ng ong

standing relaonships

w t ts c ents an w

a ways e t ere to

g ve a e p nghand if needed.


6/84

Himalayan Bank Ltd4

AboutHBLWeatHimalayanBankbelievethatweareasmuchapartofsocietyasanyotherandwehaveaproacveroletoplayfor

thosewhoarestrivingtoriseabovetheircircumstancesonthe

basisofenterpriseandeorttopursuetheirdreams.Webelieve

wehaveastrongroletoplayintheirendeavorsbysteppinginto

helpnanciallyandwithsoundadvice.Whetheritisforbusiness

establishmentorbusinessgrowth,importantsocialobligaons

orchildrenshighereducaon, orhousingneedsormedical

expenses,wecanstepinasahelpinghand.

Withsomanybanksandnancial instuons inthemarket,

whatmakesusdierent?Amongotherreasons,wehaveasolid

foundaon.HBLwasestablishedin1993injointventurewith

HabibBankLimitedofPakistanasoneoftherstfourprivate

commercialbanksinNepal.Thismakesusoneofthemost

experiencedbankshere.Throughtheyears,wehavesupportedmanyintheirmeofneedbyhelpingthosestrugglingtostandon

theirownfeet.Wehavealsoassistedenterprisingentrepreneurs

tosetuptheirbusinessesbyprovidingexibleandcustomized

productstosuitindividualneeds.

Forsuchreasonsanddespitethecut-throatcompeoninthe

Nepalibankingsector,HBLhasbeenabletomaintainaleadin

theprimarybankingacviesloans,deposits,savingsandsupportservices.


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8/84

Himalayan Bank Ltd6

With relatively improvedoverall market conditions, I

am anticipating encouraging

growth in all business sectors

of the Bank.


9/84


Chairmans Message

Dear Shareholders,

I am happy to inform you of yet another successful

year of the Bank.Despite variouschallenges in the

bankingindustry,theBankwasabletoregistergrowth.

The banking industry reeled under an unprecedented

liquidity crunch intheyear2010-11.A fewnancial

instuons were brought under the Central Banksscanner. Tough market condions compelled the

bankstoconsolidatetheirprevailingporoliosrather

thantakeupgrowthstrategies.Marketinterestrates

consistently went up with deposit interest rates going

upashighas12%p.a.andlendingratessoaringup

to18%p.a.Therealestateindustry,hitbyregulatory

changesinthepreviousscalyear,connuedtoremain

sluggish.Banksthathaverelavelygreaterexposure

ontherealestatebusinesshavestartedshowingsigns

ofdeterioraonasreectedthroughincreasinglevels

ofnon-performing assets intheirbooksofaccount.

The banking industry, being an integral part of thecountrys economic system, could not isolate itself

fromthecountryseconomicstagnaon.Theeconomy

ofthecountrygrewbyonlyaround3.5%.Thepolical

stalemate, changing governments, inconclusive

peace process, strikes and blockades, labor unrest,

lack of government expenditure or modest capital

expenditure by the government and frequent long

hoursofpowercutswerethemajorhurdlesfacedby

theindustriesinthecountry.

The Bank achieved major nancial targets despitevarious challenges in the banking industry. This

performance of the Bank has been possible through

the perseverance of the management. I would like

to thank the management team for steering the

Bankwellthroughthetoughmarketcondions

Members of the BoardofDirectors (BOD), too

have contributed greatly to formulang and

implemenngrightpoliciesandstrategiestode

overtheupheavalsintheeconomy.AsChairman

oftheBOD,Iwouldliketopersonallythankallthemembers of the BOD and the management team

fortheirvaluable contribuonstoconsolidang

uncompromising corporate governance with al

necessarychecksandbalancesinplace.TheBank

keptitsunwaveringcommitmenttoallregulatory

andstatutorynormstoavoidregulatoryhassles

The Banks robust internal control mechanism

ensured that no operaonal risk was involved

The overall asset quality of the Bank remained

goodvis--visoverallmacro-economiccondions.

Themanagementshall,however,connuetopu

inextraeortstospeedilyrecoverbadloansandbringdowntheNPAoftheBank.

Withrelavelyimprovedoverallmarketcondions,

I am ancipang encouraging growth in al

businesssectorsoftheBank.Iamlookingforward

to another successful year for Himalayan Bank as

itembarksuponits19thyearofoperaons.

Thankyou

ManojBahadurShrestha

Chairman,BoardofDirectors


10/84

Himalayan Bank Ltd8


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We aim to maintain our

premier standing among

other banks in Nepal. In this

regard, we will sustain our

compeve advantage by

consistently improving

the quality of our

human resources.

We will connue to provide regular

training and create an environment in

which producvity is increased and all

employees can take pride in their work.

toget r

Worki

with

emplo ees


12/84

Himalayan Bank Ltd10


13/84

Himalayan Bank LtdAnnual Report 2010/11 11

Board of Directors

From le to right:

Sing

Mr.ManojBahadurShrestha,Chairman

Mr.HimalayaSJBRana,ChiefAdvisortotheBoard

Mr.PremPrakashKhetan,SecondViceChairman

Mr.AshrafM.Wathra,FirstViceChairman

Mr.UpendraKeshariPoudyal,ProfessionalDirector

Mr.BijayaBahadurShrestha,Director

Mr.SushilBikramThapa,Director

Mr.RajendraKumarKae,AlternateDirector

Mr.PrachandaBahadurShrestha,Director

Standing


14/84


HBL has been

in the bankingbusiness in Nepal

for the last 19

years and has

risen to its premier

status mostly due

to its sound basic

principles, viz.:

prudency in its

banking methods,

transparency in its

business dealings,

and accountability

for all its actions.


15/84


Thelasttwoyearshasseenmanyupsanddownsinvarioussectorsof

thecountry.Theeconomyisinthedoldrumsandthenancialsector

asawholehasnotbeendoingwell.Thediculeswerefurther

compoundedbythefailureofthebudgettocomeoutinmefor

twoconsecuveyears,whichnaturallydiscouragedinvestments.

Moreover,thisperiodalsosawplummengbusinessintherealty

sector,whichisconnuingeventothisday.Further,NepalRastra

BankcameoutwithnewpromulgaonssuchastheAn-Money

LaunderingAct,whichaddedtothewoesoftherealtybusiness

besidesencouragingcapitalightfromthecountry.Policalstability

isyettobeinplaceand,althoughthingsseemtobemovinginthe

rightdirecon,thereareuncertainmesahead.

Itisknowntoallthatbanksinparcularhavetobearthebrunt

becausetheyareattheforefrontoftheeconomy.Itisalsoobviousthat

bankscannotfuncontotheirpotenalinaclimateofuncertainty.

Thepresentmesaredisturbingandwecannotbutbewaryofwhat

thefuturemighthaveinstore.Thisisaperiodinwhichthecountry

willundergofar-reachingchangesinitsverystructure,onewhichwill

certainlyhaveadeepinuenceonthenancialscenarioaswell.We

havetoponderwhatnewrulesandregulaonsmightbebroughtinto

forceintherestructuringofthestate.Wecanexpectthattherewill

alsobearestructuringofscalrulesandregulaonsinharmonywith

thefederalchangesbeingbroughtaboutinthecountry.

Somedegreeofunpredictabilityisaninherentpartofanychange.

Banks,ontheotherhand,thrivebestwhentheresultsarepredictableandtheycannotaordtohavetheluxuryofexperimentaon.Insuch

asituaon,bankshavetoadheretothefundamentalprinciplesof

responsiblebanking.IampleasedtostatethatHimalayanBankLtd.

(HBL)standsheadandshouldersoverothersinthisrespect.TheBank

has been in the banking business in Nepal for the last 19 years and

hasrisentoitspremierstatusmostlyduetoitssoundbasicprinciples,

viz.:prudencyinitsbankingmethods,transparencyinitsbusiness

dealingsandaccountabilityforallitsacons.

Aswenearour20thAnniversaryin2013,wepledgeanewtobe

answerabletoallourstakeholdersbydeliveringconsistentlygood

resultsthroughcustomer-friendlyservicesandresult-oriented

processes.Thatthelastdecadehasseenatremendousupsurgeinthenumberofnancialinstuonsinthecountry,naturallygiving

risetocompeon,cannotbeignoredinourmodusoperandiand

whilemakingourfutureplans.Oneofthemainreasonsforour

consistentsuccessisourdeterminaontofocusonspecicgoalsand

marketsandnottobeswayedbyshorttermgains.Instead,wehave

alwaysgonebyourownjudgmentsbasedonourowninformaon

andcalculaons.Inthisreviewyear,I ampleasedtosaythatour

non-interestincomeregisteredsasfactorygrowthandwemade

substanalgainsinourcardbusiness.Infact,fortherstme,we

areseeingarealacceleraoninthissector.Wearealsointalkswith

therelevantparestoacquireChineseandJapanesecards(JCB

Internaonal).InInternetbanking,ofwhichwearethepioneer,we

havenowinstalledadoubleauthencaonsystem,thusensuring

moresafetyintransacons.

Inthepast,ourprimaryfocuswasontradenanceandcorporate

lending,andthis,nodoubt,haspaidrichdividends.However,theme

hasnowcometodiversifyourmarketandwidenourhorizons.Even

underthepresentdicultcircumstancesinthecountry,wemust

keepinmindthattherearenewopportuniesthatwemustavailof

One such opportunity comes from the fact that almost 50 % of the

populaonconnuestoremainisolatedfromanysortofbanking

services.TheBankmustnowexpand itsoutreachandmakeits

servicesavailabletothissector,which,byanyaccount,issubstanallylarge.Thiswillobviouslyincludetheagriculturalsectoraswell.We

intendtohaveatleast15%ofourporoliointhelow-endsector

inthecomingyears.Atthesameme,itmustbekeptinmindthat

thiswillnotbeaneasytasksincethissectorisrelavelyunawareof

modernnancialmethodsforconducngtheirbusinesses,whether

itisfarming,livestockorothers.Therearemanyinherentproblems

thathavetobeovercome.

Weare,however,confidentofresolvingsuchissuesandthi

condencearisesmainlyfromourwealthofexperienceandthelarge

poolofskilledmanpowerwehave.Becauseofourexcellentrecordof

thelasttwodecadeswhich,addedtoourreputaonasaninstuon

thatbelieves inresponsiblebanking,theBank iscomparavely

beerinsulatedagainstthenegaveeectsofcurrentlyprevailin

circumstances,whichmaypersistforsomemetocome.Atthesame

me,weasaleadingbankcannotremainalooffromthemainstream.

Wewill,however,bemakingthebestofthesituaonbyimplemenng

planstoconsolidateourgainsandenhanceourproducvity.Weare

alsointheprocessofadvancingourtechnologicalexperse,whic

willfurtherreneourinformaonsystemsandinternalcontrol

mechanismsbesidescungcostsandminimizingrisks.

Here,itwouldberelevanttoinformyouthatNepalRastraBank

hasuppedtheanteregardinggoodcorporategovernancethe

boom-linebeingthatbanksandothernancialinstuonsshould

bemanagedmoreprofessionally.Inthisregard,theManagement

CommieemustconsidertheinterestofalltheBanksstakeholdersinthecourseofconducngitsaairsandfulllingitsdues.

Finally,I,onbehalfofHimalayanBank,wouldliketowholeheartedly

thankyouforsupporngtheBankingoodmesandbadandIam

condentthatyouwillconnuetosupporttheBankinthecoming

daysaswell.IwishyouandyourfamiliesaveryHappyNewYear2012

andhopethatitwillbringyoupeaceandprosperity.

AshokSJBRana

ChiefExecuveOce

HimalayanBankLtd

CEOs Message


16/84


ExecuveTeam

Mr. Banshidhar

Sharma

Senior Manager

Informaon

Technology

& SWIFT

Department

Mr. Kapil Pd.

Lohani

Senior Manager

ExecuveHuman

ResourcesOcer

Mr. Pradeep N.

Rayamajhi

Senior Manager

Mr. Muhammed

Siddique

Chief Internal

Auditor

Internal Audit

Department

Mr. Ashoke SJB

Rana

ChiefExecuve

Ocer

From Le:

Standing

Mr. Ujjal R.

Rajbhandary

Assistant General

Manager

Sing


17/84


Mr. Rabindra N.

Pradhan

Senior Manager

Risk Management

Department

Mr. Maheshwor

P. Joshi

Senior Manager

LegalandShare

Department

Mr. Basu Dahal

Chief Manager

Execuve

Administrave

Ocer

Mr. Sushiel Joshi

General Manager

Mr. Anup Mas

Assistant Gene

Manager

Mr. Sulap Raj

Aryal

Senior Manager

Execuve

OperangOcer

From Le:

Standing

Mr. Masood Ul

Hassan

Senior General

Manager

Sing


18/84


Management Team


19/84


Standing

Ms.SisamPradhanangJoshi

Ms.SunitaShrestha

Ms.BinaPandey

Mr.RajeshBhaarai

Mr.MrigendraPradhan

Sing

Mr.AnantaRajbhandary

Mr.NaveenPoudyal

Mr.BijayaManNakarmi

Mr.SashRajJoshi

Mr.SunilPrasadGorkhali

Mr.BipinHada

From le to right:


20/84



21/84


custo ers

HBL has a well-stocked porolio

of products and services tailor-

made for every individual. We

also have an extensive network

of branches throughout the

country and a large number of

ATMs for the convenience of ourvalued customers.

We provide our services to

many SMEs. In remiance,

our online money transfer

system, HimalRemit, is fast

and reliable with a network

covering over 2300 locaons

in all cies, towns and villages

of Nepal.

toget r

Worki


22/84


Report of the Board of Directorsto the 19thAnnualGeneralMeeng

DearShareholders,

OnbehalfoftheBoardofDirectors,wecordially

welcome all the shareholders present at this 19th

AnnualGeneralMeengofHimalayanBankLimited.

IwouldliketopresenttheBalanceSheetasonJuly

16,2011,theProtandLossAccountforthescal

year2010-11,theProtandLossAppropriaon

Accountandothernancialstatementsforapproval

bytheAnnualGeneralMeeng.

Havingprovidedecientservicesoverthelast19

years,theBanktodaystandsasoneoftheleading,

secureanddependablebanksinthecountry.As

ofF.Y.2010-11,theBankwasabletomaintaina

depositofRs.40.92billion.Ascomparedtolast

year,theloanporoliooftheBankincreasedby13.20%andtheoperangprotby75.27%.

Duringthereviewperiod,theBankestablisheda

totalofsixnewbranchesthreeinthevalleyand

asmanyoutsidethevalley,whileatthesameme,

theBankintroduceditsATMservicesatvenew

locaons,bringingthetotalnumberofbranchesto

36andthatofATMsto57.

Iamgladtoinformyouthattheconstruconofthe

corporate building has been completed and thatmostoftheheadocedepartmentshavebeen

relocatedtothisnewbuilding.

ReviewoftheBanksOperaonsDuringtheperiodunderreview,theBankstotal

depositreachedRs.40.92billion,recordingan

increaseof8.80%overthepreviousyear.Similarly,

theloansandadvancesreachedRs.32.96billion

duringtheperiodunderreview,recordingan

increaseof13.20%overthepreviousyear.

ThenetassetsoftheBankincreasedby16.17%

reachingRs.3.99billionduringthereviewperiod,

whilethegrossassetsincreasedby9.75%andare

valuedatRs.48.13billion.

TheBankwasabletomakeanoperangprot

ofRs.1.15billionduringthereviewperiod.The

netprotoftheBankreachedRs.89.31million,

registeringanincreaseof75.53%overthatofthe

previousyear.

ThenancialstatusoftheBankasonOctober17,

2011(rstquarter-end)isgivenbelow.

S.N.Parculars 2010-11 2010-11 Increase

As on Oct 16 As on Oct 17 (Decrease)%

1. GrossAssets 46,759 52,602 12.49

2. Deposits 39,883 44,515 11.62

3. Loans,OverdrasandBills

PurchasedandDiscounted 31,239 34,442 10.25

4. Investments 8,095 9,327 15.22

(InRs.million)


23/84


S.N.Parculars 2009 2010 Increase

AsonJuly16 AsonJuly16(Decrease)%

1. NetAssets(NetWorth) 3,439 3,995 16.17

2. GrossAssets 43,860 48,137 9.75

3. Deposits 37,611 40,920 8.80

4. Loans,OverdrasandBills 29,123 32,968 13.20

Purchased and Discounted

5. Investments 8,444 8,769 3.85

6. NetInterestIncome 1,595 1,911 19.86

7. OtherIncome 815 1,021 25.36

8. OperangandStaExpenses 886 1,099 24.139. OperangProt 579 1,015 75.27

10.NetProt 508 893 75.53

(InRs.million)

Duringtheyearunderreview,theBank,pursuant

tothedirectivesofNepalRastraBank,wrote

oloanstothetuneofRs.1.625million.The

Banks NPA, which was 3.52 % during the

previousyear,increasedto4.22%duringtheyear

underreview.

ComparaveFinancialIndicatorsofthe

BankThecomparavenancialindicatorsofthescal

years2008-09and2009-10arepresentedbelow.

Thecomparativecompositionsofthedeposit,

credit,incomeandexpenditureoftheBankduring

thescalyear2067/68andtheyearunderreview

are presented under the following annexes:

Depositcomposion : AnnexA

Creditcomposion : AnnexBIncomecomposion : AnnexC

Expenditurecomposion : AnnexD

NaonalandInternaonalEventsand

their Impact on the BankTheglobalnancialcrisisthathasbeenprevailing

forthelastfewyearshasgraduallysubsided.

However,theinconsistenteconomygrowth

insomeEuropeancountries,theUSA,African

andAsiancountrieshasadverselyaectedthe

globaleconomy.TheemergingnaonsofAsia

andAfricawereabletoachievegoodgrowth.

AmongtheSouthAsiancountries,Nepalcould

notsubstanallyimproveitseconomy.Therecentdevelopmentsseeninpeaceandsecurityissuesin

thecountryare,however,expectedtohelppickup

momentuminmostofthesectors.

AsperNepalRastraBank,NepalsGDPgrowth

stoodat3.47%duringthescalyear2067/68

againstthatof3.97%.lastyear.Theinaonrate

thatwas9.6%lastyearremainedunchangedin

theF.Y.2067/68.Overthelast10years,thecountry

was able to notch up more growth in imports than

inexports,thegrowthinexportsbeing10.2%lastyear.Exportgrowthduringthereviewyearstood

at6.1%whileimportgrowth,whichstoodat31.6

%duringthepreviousyear,stoodat5.5%during

thereviewyear.TheBalanceofPaymentsthat

hadadecitofRs.3.63billionduringtherstnine

monthsofthereviewperiodmadeasurplusof

Rs.2.93billionbytheendoftheyear.Lastyear,it

facedadecitofRs.3.63billion.Similarly,theFCY

reservesthatwentdownby6.2%asofAshad-end

of2067,increasedby1.2%byAshad-endof2068.

Broadmoneysupplyincreasedby14.1%inthepreviousyear;however,duringthereviewperiod,

itincreasedby9.5%only.


24/84


Duringtheyearunderreview,thetotaldepositsin

thebankingsectorincreasedbyRs.59.62billion.Similarly,theloansandadvancesinthebanking

sectorincreasedbyRs.79.80billion.Lastyear,

thetotaldepositsincreasedbyRs.69.93billion,

whereastheloansandadvancesincreasedbyRs.

76.71billion.

Current Financial and Banking

EnvironmentThe countrys economy that stayed modest during

thepreviousyearandduring thereviewperiod

is also expected to remain modest in the days to

come.Theregulatoryandpolicyinterventions

adoptedtocontrolcreditcreaoninunproducve

sectors,coupledwithsluggishexpansionintrading

andbusinesssectors,haslebankswithlilechoice

forcreditcreaon.Itseemsthatthiscondionwill

persistinthecomingdaysaswell.Althoughthe

NepalTourismYear2011campaigncouldnot

achieveitstarget,thegeneralachievementsare

signicant.Duringthecampaignyear,thecountry

couldattractaround775,000touristsagainst

thetargetofonemillion.Theimprovingsecurity

situaoninthecountryhashadaposiveimpact

onthebusinessenvironment,asaresultofwhich,

investmentsinsmallandmediumenterpriseshave

increased.Themonetarypolicybroughtoutby

Nepal Rastra Bank is also expected to ameliorate

theinvestmentenvironment inthe country.All

thesedevelopments contributed tomakingthe

bankingindustrysomewhatvibrant.

Duringthescalyear2067/68,anaddionalfour

commercialbanks,eightdevelopmentbanksandthree

micro-nancecompanieswereincorporated.Thus,

thenumberofnancialinstuonsincreasedby15,

increasingthetotalnumberofnancialinstuonsto279.Similarly,thenumberofbranchesofthenancial

instuonshasalsowitnessedaremarkableincrease.

The recently issued circular of NRB is expected to

slowdownunnecessarybranchexpansion;however,

thenumberofnancialinstuonsintheindustryis

expectedtoconnuetogoupduetoincreasinglytough

compeonintheindustry.

ImplementaonStatusoftheStrategy

andProgramoftheBankduringF.Y.

2010-20111. NPAlimitedto4.22percent.

2. Connuitygiventotherecoveryofwrien-o

loansinanacvemanner.

3. BranchesestablishedatGorkha,Barahabishe,

Kawaso,Kalanki,SatdobatoandBasputali.

The total number of branches of the Bank

reached36.

4. ATMsinstalledatGorkha,Kalanki,Satdobato,

SaurahaandBarahabishe.Thetotalnumberof

ATMshasreached57.5. ExpandedremiancebusinesstoAsian,European,

American and Australian markets with focus on

sophiscatedservices.

6. IntroduceddepositandloanproductsSpecial

PayrollAccount.

7. Installedanaddional128POSmachinesforthe

convenienceofdebitandcreditcardcustomers.

8. IntroducedEMV-compliantchip-basedcards.

9. The Bank has createdand successfully

implemented its own online payment module

soware,HimalRemit,foruseofremiances,whichwaspreviouslybeingsuppliedbya

secondparty.


25/84


10. Setup10HimalCenterFlagshipCountersat

strategiclocaons.11. The Bank obtained Worker Remittance

Certification.This isthe firsttimethatany

Nepalibankhasbeenawardedthiscercaon

anditisthesecondbankinAsiatohavebeen

soawarded.

12. InlinewiththeagreementsignedwithBankof

BhutanLimitedtoassistincardservices,theBank

helpedinbringingintooperaonitsVisaDebit

Cardacquiringbusinessservice.

13. The Bank signed anagreement with JCB

International for credit card issuing and

acquiringbusiness.

14. Construction of Corporate Building at

Kamaladicompleted.

Strategies and Programs for F.Y.

2011/20121. TolimitNPAto2.41percent.

2. Toestablish6brancheswithinandoutside

thevalley.

3. To expand and consol idate remittancebusinesstoAsian,European,American

and Australian markets with a focus on

sophiscatedservices.

4. Toestablish10HimalCenterFlagshipCountersat

strategiclocaons.

5. To introduceLoyalty Card for customers

ofHimalRemit.

6. Toinstallanaddional200POSmachines.

7. Tosetupanadditional16ATMs at various

places(Tillnow,threeATMsalreadyinstalledat

CorporateOceandNagarkot).8. TobringalltheATMsunderCCTVsurveillance.

9. Tointroducenewdepositandcreditproducts.

10. Togiveconnuitytorecoveryofwrien-oloans

inanacvemanner.11. Tomakedepositandloanproductsmorearacve

asperthedemandofthegeneralpublic.

12. TheBankhasalreadyinstalledweb-camerasatthe

CustomerServiceDepartmentofThamelBranch

fortheconvenienceofnewaccountopening

customers.Theservicewillbereviewedand

extendedtootherbranches.

13. ToupgradeGlobusbankingsowaretoTemenos

ArcInternetBanking.(Tillnow,Himal@net

alreadyintroduced).

14. ToupgradetheWeb-basedT24version.

15. Tomake availablemorning andevening

counterservicesinallthebranchesofthe

Bank.(Tilldate,18branchesThamel,New

Road,Patan,Maharajgunj,Bhaktapur,Pokhara,

BharatpurandTandiareprovidingextended/

morning/holiday counterservices, whereas

Chabahil,Teku,Nepalgunj,Butwal,Bhairahawa,

Parsa,Palpa,Itahari,BiratnagarandDharan

are providing extended/morning/evening

counterservices.

16. To take theinitiative inthe establishment

ofaprivatesectorbankinBhutanasajoint

ventureutilizingthetechnicalandeconomic

excellence/resources.

17. ToshitheICTinfrastructuretothenewcorporate

ocepremises.

18. Tomake theambienceofvariousbranches

convenientandeco-friendly.

19. TointroducetheWeb-basedsystemtomonitor

andmanagexedassets.

20. TostartcreditcardbusinesswithUnionPay.

21. Totaketheiniaveinhaving10%ofthetotal

loan&advancesundertheSMEporolio.


26/84


Corporate Social ResponsibilitySinceitsincorporaon,theBankhasbeenacvely

involvedinsocialresponsibiliesthroughvarious

socialandalliedinstuons.Themainservices

being rendered by the Bank on this front include

thoserelangtoeducaon,healthcare,sports,

cultureandsocialservices.Thisyear,theBankhas

providedsuitablesolarpanelsforhouseholdlighng

touplithestandardoflivingoftheChepangs,

oneofthecountrysmostunderprivilegedand

undeveloped communies,who liveanomadic

lifeinthejungle.TheBankprovidedfinancial

assistanceforthe60thanniversaryprogramof

NepalCulturalAssociation.Further,theBank

alsoprovidednancialassistanceduringWorld

AusmDay.Similarly,theBankprovidednancial

assistance for the sanitation program outside

thevalleyandsponsoredWheelchairCricketfor

thedisabled.

TheBankhasbeencontinuouslyinvolvedin

thedevelopmentofsportsculturesuchas

cricket,football,basketball,golfandbadminton,

besides sponsoring dance and other cultural

programs.Similarly,theBanksponsoredvarious

cultural programs like painting exhibitions

anddanceandmusiccompetitions.Likewise,

the Bank sponsored the Made in Pakistan

Exhibition here to help promote products made

inneighboringPakistan.TheBankiswellaware

of its responsibilities in such and other similar

fieldsinthesocialsector.

Board of DirectorsMr.ManojBahadurShrestha,represenngN.

Trading;Mr.AshrafM.Wathra,representing

HabibBankLimited,Pakistan,andMr.P.PKhetan,

represenngMutualTradingCompany,connue

ontheBoardasChairman,FirstVice-ChairmanandSecondVice-Chairmanrespecvely.

Mr.PrachandaBahadurShrestha,represenng

ChhayaInternaonal,Mr.SushilBikramThapa,

represenngAvaInternaonal,Dr.RameshKumar

Bhaarai,represenngEmployeesProvidentFund

andMr.BijayBahadurShrestha,represenngthe

generalpublic,connueontheBoardasDirectors.

Similarly,Mr.UpendraKeshariPoudyalconnues

ontheBoardasProfessionalDirector.

In a s imilar vein,Miss Menuka Shrestha,

represenngChhayaInternaonal,Mrs.Ranjana

Shrestha,representingN.Trading,Mr.Sunil

BahadurThapa,represenngAvaInternaonal,

Mr.SurendraSilwal,represenngMutualTrading

CompanyandMr.RajendraKae,represenng

EmployeesProvidentFund,connueontheBoard

asAlternateDirectors.

Further,Mr.HimalayaSJBRanaisontheBoardin

thecapacityofChiefAdvisor.

Furthermore,eecvefromFebruary04,2011,

Mr.UpendraKeshariPoudyalhasbeenre-

appointed as Professional Director for the next

fouryears.Similarly,eecvefromSeptember

23,2011,DirectorDr.RameshKumarBhaarai

andAlternateDirectorMr.RajendraKafle,

represenngEmployeeProvidentFund,havebeen

re-appointedforthenextfouryears.

I would like to congratulate the re-appointedDirectors and Alternate Director to the Board

andexpecttheircooperaontowardstheBanks

progressandprosperity.Further,theBoard,on


27/84


thisoccasion,expressesitsfirmcommitment

to always working towards the best interests of

theBank.

Audit , Balance Sheet and Other

FinancialsTheBalanceSheetasonJuly16,2011,theProt

andLossAccountforthescalyear2010-11,the

ProfitandLossAppropriationAccountforthe

scalyear2010-11,theCashFlowStatementfor

thescalyear2010-11,relevantannexesandthe

AuditorsReportareenclosedwiththisreport.

Further,informaonrequiredtobedisclosedas

pertheprovisionsofCompanyAct2063,Chapter

7,Clause109,andSub-Clause(4)ispresented

asAnnexE.

ProtandLossAppropriaonThenetprotoftheBankamountedtoRs.893.11

million for thescal year2010-11.Besides, the

retainedearningsofRs.13.65millionfromthe

previousyear,20%ofRs.17.86million,havebeen

appropriatedtotheStatutoryGeneralReserve

Fund.AsumofRs.5.453milliontransferredfrom

theSuspenseFundandasumofRs.38.61million

transferredfromtheCapitalAdjustmentFundare

availablefortheappropriaon.Similarly,outofthe

netprotofthisyear,Rs.6.682millionhasbeen

Thank you.

On behalf of the Board of DirectorsP.P.Khetan ManojBahadurShrestha

Second Vice-Chairman Chairman

appropriatedtotheExchangeFluctuaonFund,

Rs.71.4milliontotheHBLBondRedemponFundandRs.47.25milliontotheInvestmentAdjustment

FundaspertheNRBdirecves.

I would like to announce with pleasure a special

resoluonongivinga 20%bonusshareand a

16.8421%cashdividendonthepaid-upcapitalto

theshareholdersforthescalyear2010/11.For

thebonussharesanddividends,anamountof

Rs.73.68millionhasbeenearmarked.Aerthe

distribuonofthebonusshares,thepaid-upcapital

oftheBankwillamounttoRs.2.40billion.

Vote of ThanksOnbehalfoftheBoardofDirectors,Iwouldlike

toextendsincerethankstotheshareholders,

esteemedcustomers,ocialsoftheGovernment

ofNepalandNepalRastraBank.Iwouldalsoliketo

place on record special thanks to the management

ofourpartner,HabibBankLimited,Pakistan,the

BanksChief ExecutiveOfficer, SeniorGeneral

Manager,GeneralManager,SeniorExecuves,sta

andassociatesformakingdynamiccontribuons

totheprogressandprosperityoftheBank.Finally,

I would like to extend hearty thanks to the media

forgivingwidecoveragetoouracviesandtoall

ourwell-wishers.


28/84


Financial Highlights

Deposit Composition Loan Composition

Financial Year 2066/67Financial Year 2066/67


SavingDeposit

Current Deposit

Call Deposit

Fixed Deposit

Other Deposit

WorkingCapitalLoan

HirePurchaseLoan

Bills Purchased & Discounted

TermLoan

RealEstateLoan

Import/ExportLoan

MarginLending

DeprivedSectorLoan

OtherLoan

WorkingCapitalLoan

HirePurchaseLoan

Bills Purchased & Discounted

TermLoan

RealEstateLoan

Import/ExportLoan

MarginLending

DeprivedSectorLoan

OtherLoan

SavingDeposit

Current Deposit

Call Deposit

Fixed Deposit

Other Deposit


29/84


Income Composition Expense Composition



Interest

ExchangeFluctuaon

Income

Commission & Discount

Other Income

Interest Expenses

StaExpenses

AdministraonExpenses

Interest Expenses

StaExpenses

AdministraonExpenses

Interest

ExchangeFluctuaon

Income

Commission & Discount

Other Income


30/84



31/84


togeth rWorki g

shareholders

HBL is commied to

exploring and capitalizing on

new opportunies without

in any way deviang from

its empirical and me-testedmethods of risk management

so that all stakeholders

interests are secure

and protable.

Aspecialresoluonhasbeen

announced to award 20 % bonus

shareand16.84%cashdividend

on the paid-up capital to the

shareholdersforthescal

year2010/11.


32/84


WeatHimalayanBankoeravarietyofproducts

andservicestoourcustomersfocusingon

their diverse andvaried financialneeds.Our

productdevelopmentandmodicaonprocess

is directly targeted towards catering to the needs

of our existing as well as potential customers

andweconnuouslyengageourresearchunit

in understanding the needs of the market and

customerbehavior,whichiscrucialtocustomer

sasfacon.Likewise,weareconvincedthatthis

enabledustoexploreanddiscovervariedkinds

ofemergingnancialneeds.Further,wearealso

constantly on the look-out for emerging market

trends.Thishas,meandmeagain,enabled

ustotapunchartednichesinthemarket.Such

astrategyhasenabledustocapitalizeonour

potenalforachievinga comparaveadvantage

and to be known as a trendsetter among our

competitorsandcounterparts.Wefeelproudtoberecognizedasapioneerinintroducing

many innovativeproducts andservices.We

arewellknowninthemarketasaconvenient

bank forperformingnancial transacons.Our

customersandstakeholdersenjoysecurenancial

transaconswithus.Ourinnovaveandquick-

learnapproachinthetechnicaleldhasenabledus

tostandoutasatechno-savvybankinthemarket.

Inshort,westrivetobringbankingservicestoour

customersdoorsteps.

Deposit Products

We offer a choice of deposit products that

customerscanchoosefromtosuittheirindividual

requirements.SavingsproductsincludeNormal

SavingsAccount,PremiumSavingsAccount(with

OurServicesexclusivecounterservices),SuperPremiumSavings

Account(withhighreturns),HimalSavingsAccount

(zerobalanceaccount),HimalRemitSavings

Account(customizedforremiers),BisheshSavings

Account(forminors,seniorcizens,thephysically

handicapped and the illiterate) and Shareholders

Savings Account ( for the convenience of

ourshareholders).

We offer Current Account for daily business

transactions.CallAccountgivesanearning

opportunityforbusinessesintheircurrentaccount,

whileNon-ProtOrganizaonCurrentCallAccount

isdesignedforNGOs,INGOsandcharitabletrusts

andhasanaracveinterestrate.FixedDeposit

productsincludeFixedTermDeposit,Three-Year

RecurringDeposit(formonthlydeposits)andJumbo

Term Deposit (for those willing to deposit funds for

3to5yearsandearnaracvereturns).

CreditServices

We offer a wide range of tailor-made funded

andnon-fundedcreditfacilitiestoindividuals

and companies to meet their different funding

requirements.Suchfacilities includeCorporate

Lending(includingProjectFinancingandConsorum

Financing),FixedTermLoan,WorkingCapital

Financing,TradeFinancingandLoanagainstFirst-

ClassBankGuarantee.

Similarly, Retail/Consumer Lending includes

HirePurchaseLoan,MortgageLoan,CreditCard

Loan,HousingLoan,SubidhaLoan(ahassle-free

loan)andFDwithanODfacility.RetailLending

alsoincludesCardMerchantLoan,Educational


33/84


InstuonFinancing,LoanagainstFixedDeposit

Receipt,LoanagainstGovernmentBonds/SecuriesandLoanagainstShares.SpecializedLendingis

directedtowards providing credit facilities for

smallandmediumenterprises(SMEs),while

TradeServicesincludeLC(Advising,Conrmaon,

NegoaonandReimbursement)andGuarantee

(BidBond,PerformanceBond,AdvancePaymentand

Counter-Guarantee).

CardServices

Wearetherstnancialinstuontointroduce

CreditCardinthedomescmarketHBLCard.It

was the most popular card in the country at one

me.Currently,weoerVisaandMasterCard,a

furtherreeconofourcommitmenttoproviding

productstailoredtomatchclientsrequirements.

ThevariouscardservicesincludeHBLSCT/Visa

/MasterDebitCard,HBLVisaCreditCard,HBL

MasterCreditCardandHBLPrepaidVisaCard.

Recently,HimalayanBankLimitedandJCBI

havesignedacreditcardissuingandacquiring

licenseagreement.JCBInternaonal(JCBI)isthe

internaonalsubsidiaryofJCB,theonlyglobal

payment brand and leading credit card issuer and

acquirerbasedinJapan.Throughthisagreement,

JCBcardmemberswillbeabletouseJCBcredit

cardsatapproximately1,200HBLmerchantoutlets

andATMsstarngthisfall,andtheBankwillbethe

rsttoissueJCBcardsinNepal,whichisscheduled

nextyear.

HimalRemit

Wearethepioneerintheeldofretailmoney

transferbusinesswithoveradecade-longcustomized

servicedeliveryexperienceintheeld.Weconduct

thisbusinessthroughHimalRemit,astate-of-the-

art web-based online money transfer system that

is easily accessible through our main web domain

www.himalayanbank.com. It can be directly

accessedbyallourbranchesandnetworks,thusensuringpromptexecuonofremiancepayment.

Theproductismonitoredandservicedbyour

RemiancePromoonDepartmentdedicatedto

deliveringfastandreliableservicestocustomers.

HimalRemit has the largest payment network

coveringallcies,townsandvillagesofthecountry

andovertwothousandthreehundred locaons

acrossNepalrelyon thisserviceforremiance

payment.Infact,wehaverepresentavesinmajor

remianceoriginangcountries tofacilitateand

assistourremiancecustomers.

AncillaryServices

Weoerahostofancillaryservicesthatprovide

convenience,securityandcomfortforour

customers.Theyare:

SafeDepositLockers:Lockersof various

sizesasperourcustomerspreferenceand

convenienceoflocaon.

SMSBanking:Allowsourcustomerstocheck

theirbalance,statusofcheque(encashedor

not),HBLsforeignexchangerateandcontact

numbersofbranches.

InternetBanking:Bankingcanbedonesafely

and securely through internet access round

theclock.

TCsales/purchase.

24/7AutomatedTellerMachines(ATMs):in

morethan50locaons.

EverydayEasyBankingService.

AnyBranchBankingServices.

Funds Tr an sf er : W ithi n and out si de

thecountry.

Fee Co llect ion/Payment Serv i ces : For

educaonalinstuons.

ServicePackageforStudents:Forthosegoing

abroadforhigherstudies.


34/84


C o r p o r a t e S o c i a l

Responsibility (CSR) is a

very important aspect

o f H B L s a c t i v i t i e s .

Right from the time of

itsestablishment,ithas

been discharging its social

responsibilities through

varioussocialandallied

institutions.We always

considerourselvesasan

active and responsible

corporate citizens of the

countryandhavealwayspromotedsocialwelfare

acvies.Manyacviesthatarebenecialto

societyhavebeenundertakenbytheBankinthe

past and we are determined to do so in the future

aswell.Themajorservicesbeingrenderedby

theBankonthisfrontincludethoserelangto

educaon,healthcare,sports,cultureandsocial

services.TheBankallocatesasignicantporon

ofitsAnnualSponsorshipandDonaonBudget

towardsfulllingsocialresponsibilies.

SomeofthemajorCSRactivitiesbyHBLare

listed below:

Corporate Social Responsibility

4 2011:SponsorshipofANBUGrallyforsocial

drive supporng schools, cle lip support

surgeries,etc.

4 2011: Blooddonaonprogramorganizedby

theBankatBhaktapurDurbarSquare.4 2010:DonaonofRs.0.5milliontoEmbassy

ofPakistan,Kathmandu,ashumanitarianaid

toconductrescueandreliefoperaonsinthe

oodaectedareasofPakistan.

4 2010: Sponsorship of cricket tournament

organizedbyWATONepalaimedatraisingfunds

for planng of 2000 trees in Kathmandu city.


35/84


WATONepalisamemberofCleanUpTheWorld

which, inpartnershipwith the United Naons

EnvironmentProgramme(UNEP),workstowards

inspiringandempoweringcommuniestoclean

upandconservetheenvironmentthroughwaste

removal,treeplantaonandwaterandenergy

conservaonprojects.

4 2010: Acve parcipaon in the opening

ceremony of Nepal Tourism Year 2011

organized by NTY 2011 Coordinang

Commiee in coordinaon with Nepal

TourismBoard.

4 2009-10: Financial contribuon to Spinal

InjuryRehabilitaonCenter,Kavre.

4 2009: Financial assistance to Muscular

DystrophyChildCareSocietyNepal.

4 2009: Entered into agreement with Dairy

Development Corporaon (DDC) to extend

nancingofuptoRs.1milliontothelocaldairy

productprocessingcentersforinstallaonof

hi-techequipment.

4 2009: Financial assistance for renovaon/

construconofvarioustemplesandhistorical

placesinKathmanducity.

4 2009: DonaontooodvicmsofNepal.

4 2009: Founder Member of Naonal

Children Eye Hospital and Rehabilitaon

Center,Bhaktapur.

4 2008-10: Extensionofhelpinghandtovarious

government bodies for maintaining peace

andsecurityinvariousregionsofthecountry.

4 2008-09: Assistance to various

instuons including Friends of

Bagma to conduct acvies relang to

environmentalconservaon.

4 2008-09: Assistance to dierently abled

cizenstopublishnewsleersandmagazines

aspartof intellectualdevelopmentacvies

designedforthembyvariousinstuons.

4 2008: Charity to various orphanages and

physicallychallengedpoorchildren.

4 2008: Sponsorship of a dental health checkup

camporganizedbyBudhanilkanthaSchool.

4 2008: Sponsorship of various blood

donaoncamps.


36/84



37/84


-

ogeth r withsociet

Worki g

Wearenotjustanimportantpartofthe

countrysnancialsectorbutalsoan

equallyresponsiblecorporatecizenof

thecountry.Eversinceourincepon,we

havebeenawareofourCorporateSocial

Responsibility(CSR).Inthisregard,wehavepromotedmanysocial

welfarecauses.

Wehavesponsoredblooddonaon

programs,organizedsporngevents(to

raisefundsforconservaon),donated

forhumanitarianaid,providednancial

assistanceforspecializedmedicalcare

centersandforpreservaonofheritage,

andgivencharitytovariousorphanages.


38/84


Wearecommiedtocarryingonallouroperaons

in full compliance with Nepal Rastra Bank

(NRB)s guidelines and our own sets of internal

guidelines and policies to maintain good corporate

governance,someofwhichgobeyondmandatory

regulatorydirecvesandrequirements.Similarly,

all the Board members and Bank employees fully

adhere to the code of ethics as prescribed byNRB.Wehaveadoptedadequateinternalcontrol

systemsindierentareasofouroperaons.This

hashelpedustoensureimplementaonofgood

corporategovernance.ExecuveOcers,Branch

Managers,DepartmentHeadsandManagement

Teammembersarealwaysup-to-datewiththelevel

of responsibility and accountability designated

to them to monitor and manage internal control

mechanismsintheBank.Aboveall,wehavean

Internal Audit Department that reports directly

totheAuditCommiee.TheAuditCommieeis responsible for monitoring and ensuring

compliancewithNRBdirectives/guidelines/

circularsbyallunitsoftheBank.Italsomaintains

imparalchecksandbalancesforcompliancewith

setstandards,internalpolicies,guidelinesand

manualsinthedailycourseofaconofallunits

oftheBank.TheAuditDepartmentvisitsvarious

unitsfrequentlyandreviewsandcomparesactual

performancewiththesetstandards.Itprovides

grades for the units on the basis of the outcome

achievedinthesurvey.Ittakestheiniaveinformulangwork-friendlypoliciesandcorrecves,

iffoundnecessary,aerthesurvey.Basedonthe

feedbackfromtheInternalAuditDepartment,

theAuditCommieereviewstheBanksnancial

posionandtheadequacyofitsinternalcontrol

systemsandprovidesneededguidelines.

Furthermore,weareincompliancewithdirecves

laiddownbyNepalRastraBankfortheprevenon

ofmoneylaundering.WehaveaKYCDueDiligence

andAn-MoneyLaunderingPolicywhereCustomerIdentification Procedures (CIP), Customer

AcceptancePolicy(CAP)andCustomerTransacon

MonitoringProcedures(CTMP)arewelldenedand

arebeingfollowed.Wecategorizetheclientsashigh

risk,mediumriskorlowriskatthemeofopening

accounts.Accountgradingisreviewedperiodically

basedonthetransacon/volumeintheaccount.

Sourcesoffundsfordeposit/remianceabovethe

thresholdareascertainedandtransaconsabove

thethresholdareregularlyreviewed/monitoredto

ensurelegimatebusiness.

Thepastandpresentenvironmentsofthecountry

withitssuccessiveunstablegovernmentshindering

governmentpolicies;disruponsinpowersupply

duetopoweroutages;unionproblemsinindustries;

slowGDPgrowth;risinginaon;decliningexports;

worseningtradedecit;ourishinghundi(illegal

fundtransfers)businessandoulowofenormous

amounts of money to foreign lands are a setback

toa desirablelevelofprogressinthecountrys

economicsector.However,wehaveanexcellentrecordofsteadygrowththroughwhichwehave

beenabletoupholdourbrandimage.Because

ofthis,wearecondentthatwecanweather

CorporateGovernance


39/84


anystorminthefutureaswell.Wehaveplanned

a course of action that will help in sustaining

our efforts at maintaining a leading position

inthecountry.Wewillendeavortomaintain

ourwell-deservedreputaonasareliableand

prudentinstuon.

Atthesameme,weareconnuouslyexploringnewbusinessopportunies.Simultaneously,we

areconnuouslystrivingtoenhancecustomer

networksbydiscoveringnewandwiderservice

deliverychannels.Providingnancialproductsand

servicesexactlyasdesiredbyourcustomers,along

withanexcellent customer-friendlyapproach,

is the main reasons for our ability to retain our

customers.Weareverymuchcommittedto

maintainingthisposion.

Inthecomingdays,theBankwillbededicatedto

maintaining its lead as a customer-centric bank by

ulizingworld-classtechnologicaladvancesand

customercare.Asalways,wewillputinallou

eortstodevelopexcellentcustomerrelaonship

throughour customizedqualityservices.We

believe in serving our customers beyond

theirexpectaons.

Thesinglemostimportantthingthatwebelieve

inisCustomerSasfaconfromallourcustomer

contactpoints.Allourunitsarededicatedto

gengtheendresultofSasedCustomers.The

wisdom gained through years of experience of our

enreworkforcehasempowereduswithThe

PowerToLead.Wewanttosharethispowerwith

ourcustomers.


40/84


Himalayan Bank has access to the

worldwide correspondent network

of Habib Bank for fund transfer, leer

of credit or any banking business

anywhere in the word.

1. Canadian Imperial Bank Of Commerce, Canada2. Standard Chartered Bank, USA

3. Habib Bank Limited, USA

4. Habib American Bank, USA

5. J.P. Morgan Chase Bank, USA

6. Mashreqbank, USA

7. Standard Chartered Bank, UK

8. Habib-UK Plc, UK

9. Standard Chartered Bank, Germany

10. Commerz Bank, Germany

togetherwith

globalpartners

Working

1

2

53

4

6

7

9

8

1213

11


41/84


Habib Bank is the largest and oldest

bank in Pakistan having over 1800

correspondents worldwide. Besides,

Himalayan Bank has correspondent

arrangement with 178 internaonally

renowned banks like ABN, Amro, etc.

11. Unicredit Bank, Germany12. WESTLB, Germany

13. Habib Bank, Switzerland

14. Nordea Bank, Norway

15. Bank Of China, China

16. Bank Of India, India

17. Standard Chartered Bank, India

18. HDFC Bank Limited, India

19. Bank Of America, India

20. ICICI Bank Limited, India21. Axis Bank Limited, India

22. Habib Finance Internaonal Ltd., Hongkong

23. Korea Exchange Bank, South Korea

24. Kookmin Bank, South Korea

25. Standard Chartered Bank, Japan

26. Naonal Bank Of Pakistan, Japan

27. Habib Bank Limited, Singapore

28. Commonwealth Bank, Australia

14

15

1617 18

1920

21

22

23

24

25

26

28

27


42/84


1) Detail of Share Forfeiture:

Noshareswereforfeitedduringtheyear.

2) Transacon with Subsidiaries:

The Bank has no subsidiaries

3) Information provided to the Company by its

Substanal Shareholders:

NIL

4) Shares purchased by Directors and Ocials of the

Company during the year:

NosuchtransaconwasreportedtotheBank.

5) Information received on the personal

interest of Directors and their close relatives

in any Agreement/Contract entered into by

the Company:

Nosuchinformationwasreceivedduringthe

year.

6) Detail of Share Buy-Back during the year:

The Bank didnt buy back its own shares during the

year.

7) Detail of Internal Control System:

TheBankhasaveryeecveInternalControl

Systeminoperaonwhichhasthefollowingmajor

components:

1) Strong internal checks and controls

2) Operaonmanuals,comprehensivepolicies,

procedures and guidelines for orderly conduct

ofoperaons.

3) Creditpolicyguidelinesandvariousmanuals

4) Compliance & Internal Control Department

designed for monitoring compliance of &

periodicreviewofinternalcontrolsystem

5) I n d e p e n d e n t I n t e r n a l A u d i t &

InspeconDepartment

6) Periodic reviewof internalcontrolsand

signicantauditissuesbyAuditCommiee.

8) Total Management expenses during the year:

EmployeeexpensesduringtheFY : Rs.517,591,827AdministraveexpensesduringtheFY : Rs.582,209,813

Total : Rs.1,099,801,640

9) List of Audit Commiee members, their remuneraon

and facilies and descripon (and suggesons if any)

of the Commiees performance during the year:

AuditCommieemembers:

1)Mr.AshrafMWathra Chairman

2)Dr.RameshKumarBhaarai Member

3)Mr.UpendraKeshariPoudel Member3)Mr.MuhammadSiddique Member&

Secretary

TheCommieemembershavebeenpaidnoother

remuneraon/facilityotherthantheunder-menoned

meengfees:

Chairman:Rs.4,000permeeng

Members:Rs.3,400permeeng

TheCommieeconducted8meengsduringtheFY

2067/68duringwhichitperformedthefollowingtasks,

among others:

1) Reviewed the InternalAuditReports andgave

necessary instruction to the Management for

resoluonofauditissues.

2) Reviewedinvesgaonreportsandmadevarious

recommendaonstotheManagement.

AddionalDisclosureasperSecon109(4)ofCompaniesAct,2063


43/84


Notes:

1) An officecarwithfacilities fora driver,fuel

andmaintenance isprovided forCEO,General

Managerandexpatriateexecuves(Sr.General

Manager&ChiefInternalAuditor).Managersare

providedwithacarloanfacilitywithfuelasperthe

Bankspolicy.

SN Particulars Directors CEO Managers

1 Meeting Fees 885,600

2 Salary 4,500,000 71,348,677

3 Allowances 4,496,000 37,699,542

4 PF Contribution 450,000 5,992,536

5 Telephone / Mobile 156,683 178,575 3,144,219

6 Others 2,964,705 219,161 6,758,952

Total 4,006,988 9,843,736 124,943,926

7 Car Facility No Yes Yes

8 Accommodation No No No*

9 Insurance Coverage Yes Yes Yes

Number of persons 13 1 76

3) Rev iewed Annua l Accounts and Auditors

Preliminary Audit Report issued by Statutory

Auditors and recommended their adoption by

theBoardofDirectorsaerincorporaonofthe

direcves/instruconsissuedbytheCommieeby

theManagement.

4) DirectedtheManagementtoimproveinternal

control systems and procedures and recommended

manuals,policiesandproceduresforimprovement

andeecvecontrol,wherevernecessary.

10) Amount receivable by the Company from Directors,

Managing Director, Substantial Shareholders

and their close relaves and associated rms,

Companies etc:

NIL

11) Remuneraon, Allowances and facilies given

to Directors, Managing Director, Chief Execuve

Ocer and Ocials during the year:

P.P.Khetan ManojBahadurShrestha

2nd Vice Chairman Chairman

MANAGERIAL REMUNERATION for the purpose of secon 109(4)

2) *FullyfurnishedaccommodaonattheBankscost

isprovidedforexpatriateexecuves.

3) (a) DirectorsarecoveredwithamedicalinsuranceofRs.200,000forselfandanaccidentInsurance

policyofRs.3,000,000.

b) CEO and Managers (except expatriate

execuves)arecoveredwithaccidentalInsurance,

medical insurance and life insurance as per the

BanksStaffRules.Expatriateexecutivesare

coveredwithaccidentalinsuranceandmedical

insuranceaspertheirtermsofcontract.

4) Mobile bills are paid by the Bank on an actualbasistorCEO,SGMandCIA.IncaseofManagers,

reimbursementuptoamaximumofRs.2,000per

monthismadebytheBankasperthepolicy.

5) Water and electricity bills are reimbursed on an

actualbasistoCEOandGM.

6) Bonusasper BonusAct,1974waspaidtoall

employeesexcepttheexpatriateexecutives.

Theexpatriateexecuveswerepaidcashgis

inlieuofBonustothetuneofRs.1,551,065to

Sr.GeneralManagerandRs.737,000toChief

InternalAuditor.

12) Amount of Dividend remaining unpaid:

TotalUnpaidDividend:Rs.21,943,031asonAsar

32,2068.

13) Others maers required to be disclosed in the

Directors Report by this Ordinance or others Laws

in force:

NIL

14) Other relevant issues:

NIL


44/84


45/84


Bc SAs at 16 July 2011 (32 Ashadh 2068) Amount in NPR

Capital & liaBilitieS SChedule Current Year previouS Year

1. Share Capital 1 2,400,000,000 2,000,000,000

2. Reserves and Funds 2 1,595,478,273 1,439,205,130

3. Debentures and Bonds 3 500,000,000 500,000,000

4. Borrowings 4 10,000,000 -

5. Deposits 5 40,920,627,030 37,611,202,274

6. Bills Payables 6 31,655,586 216,158,879

7. Proposed Dividend 336,842,000 189,473,600

8. IncomeTaxLiabilies - -

9. OtherLiabilies 7 941,600,995 761,084,730

TotalCapital&Liabilies 46,736,203,884 42,717,124,613

aSSetS SChedule Current Year previouS Year

1. Cash Balance 8 632,046,156 514,223,569

2. Balance with Nepal Rastra Bank 9 1,390,625,787 2,604,790,901

3. BalancewithBanks/FinancialInsituons 10 941,979,378 747,476,214

4. MoneyatCallandShortNoce 11 734,000,000 308,840,000

5. Investments 12 8,769,938,671 8,444,910,165

6. Loan Advances and Bills Purchase 13 31,566,976,755 27,980,628,760

7. Fixed Assets 14 1,187,493,049 1,061,870,757

8. Non - Banking Assets 15 - -

9. Other Assets 16 1,513,144,088 1,054,384,247

TotalAssets 46,736,203,884 42,717,124,613

ConngentLiabilies Schedule17

DeclaraonofDirectors Schedule29

StatementofCapitalFund Schedule30(A)

Credit Risk Schedule 30 (B)

CreditRiskMigaon Schedule30(C)

OperaonRisk Schedule30(D)

Market Risk Schedule 30 (E)

Principal Indicators Schedule 31

PrincipalAccounngPolicies Schedule32

Notes to Accounts Schedule 33

Schedules 1 to 17 & 32 and 33 form an integral part of this Balance Sheet

SashRajJoshi

ExecuveFinancialOcer

Asperouraachedreportofevendate

CA.RanjeevShrestha

Partner

G.P. Rajbahak & Co.

Chartered Accountants

SushielJoshi

General Manager

MasoodUlHasan

Senior General Manager

AshoeS.Rana

ChiefExecuveOcer


Chairman

Prem Prakash Khetan, Second Vice Chairman

Prachanda Bahadur Shrestha

Bijaya Bahadur Shrestha

Dr. Ramesh Kumar Bhattarai

Sushil Bikram Thapa

Upendra Keshari Poudyal


46/84


ProtandlossaccountFor The Period From July 17, 2010 To July 16 , 2011 (Shrawan 1, 2067 To Ashadh 32, 2068)

partiCularS SChedule Current Year previouS Year

1. Interest Income 18 4,326,140,588 3,148,605,196

2. Interest Expenses 19 2,414,807,243 1,553,530,687

NetInterestIncome 1,911,333,345 1,595,074,509

3. Commission and Discount 20 350,365,112 270,258,732

4. OtherOperangIncome 21 129,516,981 112,346,425

5. ExchangeFluctuaonIncome 22 195,528,538 180,278,743

TotalOperangIncome 2,586,743,976 2,157,958,409

6. StaExpenses 23 517,591,827 414,983,894

7. OtherOperangExpenses 24 582,209,813 471,102,966

8. ExchangeFluctuaonLoss 22 - -

OperangProtbeforeProvisionforPossibleLosses 1,486,942,336 1,271,871,549

9. ProvisionforPossibleLosses 25 471,728,863 692,640,089

OperangProt 1,015,213,473 579,231,460

10. Non-OperangIncome/(Loss) 26 15,855,933 12,382,440

11. LoanLossProvisionWrien-Back 27 228,145,590 265,542,038

ProtfromRegularOperaons 1,259,214,996 857,155,938

12. Prot/(Loss)fromExtra-ordinaryAcvies 28 102,292,025 (25,855,926)

NetProtaerconsideringallAcvies 1,361,507,021 831,300,012

13. StaBonusProvision 123,773,366 75,572,728

14. Tax Provision 344,618,512 246,929,091

a) Current Years 338,351,341 246,070,406

b) PreviousYearsAddionalTax 813,229 1,454,373

c) DeferredTax 5,453,942 (595,688)

NetProt/(Loss) 893,115,143 508,798,193

Schedules18to28&32and33formanintegralpartofthisProtandLossAccount

Amount in NPR

SashRajJoshi

ExecuveFinancialOcer


CA.RanjeevShrestha

Partner

G.P. Rajbahak & Co.


SushielJoshi

General Manager

MasoodUlHasan

Senior General Manager

AshoeS.Rana

ChiefExecuveOcer


Chairman





Sushil Bikram Thapa



47/84


proFit and loSS appropriation aCCountFor The Period From July 17, 2010 To July 16 , 2011 (Shrawan 1, 2067 To Ashadh 32, 2068) Amount in NPR

partiCularS Current Year previouS Year

Income

1. AccumulatedProtuptoLastYear 136,587,269 36,525,513

2. CurrentYearsProt 893,115,143 508,798,193

3. TransferfromBondAdjustmentReserve - 356,000,000

4. TransferfromDeferredTaxReserve 5,453,942 -

5. TransferfromCapitalAdjustmentFund 38,610,000 -

Total 1,073,766,354 901,323,706

Epenses

1. Accumulated Loss up to Last Year - -

2. Current years Loss - -

3. General Reserve 178,623,029 101,759,639

4. ConngentReserve - -

5. InstuonalDevelopmentFund - -

6. DividendEqualizaonFund - -

7. StaRelatedReserveFund - -8. Proposed Dividend 336,842,000 189,473,600

9. ProposedIssueofBonusShare 400,000,000 400,000,000

10. Special Reserve Fund - -

11.ExchangeFluctuaonFund 6,682,321 -

12.CapitalRedemponReserveFund - -

13. Capital Adjustment Fund - -

14.BondRedemponReserve 71,428,571 71,428,571

15.DeferredTaxReserve - 595,688

16. Investment Adjusment Reserve 47,258,636 1,478,939

Total 1,040,834,557 764,736,437

17.AccumulatedProt/(Loss) 32,931,797 136,587,269

SashRajJoshiExecuveFinancialOcer


CA.RanjeevShrestha

Partner

G.P. Rajbahak & Co.


SushielJoshiGeneral Manager

MasoodUlHasanSenior General Manager

AshoeS.Rana

ChiefExecuveOcer


Chairman





Sushil Bikram Thapa



48/84S

tatemento

fChange

in

equ

ity

F

orThePeriodFromJ

uly16,

2010ToJuly1

6,

2011(Shrawan1,

2067ToAshadh32,2

068)

partiCularS

ShareCapital

aCCuMulated

General

pr

opoSed

Capital

SpeCial

e

XChanGe

otherreServe

deFerredtaX

inveStMent

totalaMount

PROFIT/LOSS

RESERVE

BONU

SSHARE

ADJUSTMENT

RESERVE

FLUCTUATION

FUND

RESERVE

ADJUSTMENT

reServe

Fund

reServe

O

peningBalanceasat17July2010

1,6

00,0

00,000

136,5

87,2

69

1,0

12,8

00,4

10

400,0

00,0

00

38,6

10,0

00

4,0

00,0

00

23,0

87,5

77

214,2

85,7

14

8,3

55,2

21

1,4

78,9

39

3,4

39,2

05,1

30

C

hangesinAccounngPolicies

-

-

-

-

-

-

-

-

-

-

R

estatedBalanceasat17July2010

1,6

00,0

00,000

136,5

87,2

69

1,0

12,8

00,4

10

400,0

00,0

00

38,6

10,0

00

4,0

00,0

00

23,0

87,5

77

214,2

85,7

14

8,3

55,2

21

1,4

78,9

39

3,4

39,2

05,1

30

N

etProtfortheyear

-

893,1

15,1

43

-

-

-

-

-

-

-

-

893,1

15,1

43

T

ransfertoGeneralReserve

-

(178,6

23,0

29)

178,6

23,0

29

-

-

-

-

-

-

-

-

B

ondRedemponFundtransferred

-

-

-

-

-

-

-

-

-

-

-

P

roposedDividend

(336,8

42,0

00)

-

-

-

-

-

-

-

-

(336,8

42,0

00)

IssueofBonusShare

400,0

00,000

-

-

(400

,000,0

00)

-

-

-

-

-

-

-

P

roposedIssueofBonusShares

-

(400,0

00,0

00)

-

400,0

00,0

00

-

-

-

-

-

-

-

T

ransferfromC

apitalAdjustmentFund

-

38,6

10,0

00

-

(38,6

10,0

00)

-

-

-

-

-

-

T

rasnserfromD

eferredTaxReserve

-

5,4

53,9

42

-

-

-

-

-

-

(5,4

53,9

42)

-

-

T

ransfertoExchangeFluctuaonFund

-

(6,6

82,3

21)

-

-

-

-

6,6

82,3

21

-

-

-

-

T

ransfertoBondRedemponFund

-

(71,4

28,5

71)

-

-

-

-

-

71,4

28,5

71

-

-

-

InvestmentAdjustmentReserve

(47,2

58,6

36)

-

-

-

-

-

-

-

47,2

58,6

36

-

ClosingBalance

2,0

00,0

00,000

32,9

31,7

97

1,1

91,4

23,4

39

400,0

00,0

00

-

4,0

00,0

00

29,7

69,8

98

285,7

14,2

85

2,9

01,2

79

48,7

37,5

75

3,9

95,4

78,2

73

AmountinNPR


49/84


CaSh FloW StateMentFor The Period From July 17, 2010 To July 16 , 2011 (Shrawan 1, 2067 To Ashadh 32, 2068)

partiCularS Current Year previouS YearA. CashFlowfromOperangAcvies 1,229,722,130 1,158,165,935

1. CashReceived 4,935,565,536 3,725,806,343

1.1 Interest Income 4,156,612,894 3,156,864,066

1.2 Commission and Discount Income 350,365,112 270,258,732

1.3 IncomefromForeignExchangeTransacon 195,528,538 180,278,743

1.4 RecoveryofLoanWrieno 103,542,011 6,058,377

1.5 Other Income 129,516,981 112,346,425

2. CashPayment (3,705,843,406) (2,567,640,408)

2.1 Interest Expenses (2,301,679,351) (1,418,373,200)

2.2 StaExpenses (474,458,856) (401,203,232)

2.3 OceOverheadExpenses (463,319,467) (366,232,241)

2.4 Income Tax Paid (390,813,004) (275,171,136)

2.5 Other Expenses (75,572,728) (106,660,599)

CashFlowbeforeChangesinWoringCapital (1,767,764,421) (291,939,156)

(Increase) / Decrease in Current Assets (4,914,320,570) (3,407,394,497) 1. (Increase)/DecreaseinMoneyatCallandShortNoce (425,160,000) 861,953,650

2. (Increase) / Decrease in Other Short-term Investment (282,115,000) (197,305,000)

3. (Increase) / Decrease in Loan & Bills Purchases (3,846,141,395) (3,647,325,111)

4. (Increase) / Decrease in Others Assets (360,904,175) (424,718,036)

Increase/(Decrease)inCurrentLiabilies 3,146,556,149 3,115,455,341

1. Increase/(Decrease) in Deposits 3,309,424,756 2,928,895,411

2. Increase/(Decrease)inCercateofDeposits - -

3. Increase/(Decrease) in Short Term Borrowing 10,000,000 184,311,488

4. Increase/(Decrease)inOthersLiabilies (172,868,607) 2,248,442

B. CashFlowfromInvestmentAcvies (138,743,550) 296,685,024

1. (Increase)/Decrease in Long Term Investments (682,555,022) 1,168,469,288

2. (Increase)/Decrease in Fixed Assets (217,817,619) (224,388,290)

3. InterestIncomefromLongTermInvestment 92,823,514 23,166,496

4. Dividend Income 8,378,920 6,996,002

5. Others 660,426,657 (677,558,472)C. CashFlowfromFinancingAcvies (225,053,522) (344,947,907)

1. Increase/(Decrease) in Long Term Borrowings (2,845,000) (198,248,497)

(Bond,Debentures etc)

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

3. Increase/(Decrease)inOtherLiabilies (222,208,522) (146,699,410)

4. Increase/(Decrease)inRenance/faciliesreceivedfromNRB. - -

D. Income/LossfromchangeinechangerateinCashandBanBalances - -

E. CurrentYearsCashFlowfromAllAcvies (901,839,363) 817,963,896

F. OpeningBalanceofCashandBanBalances 3,866,490,684 3,048,526,788

G. ClosingBalanceofCashandBanBalances 2,964,651,321 3,866,490,684

Amount in NPR


50/84



% Share Capital % Share Capital

1. DomescOwnership 80.00 1,600,000,000 80 1,280,000,000

1.1 Nepal Government - - -

1.2 AClasssLicensedInstuons - - -

1.3 OtherLicensedInstuons - - -

1.4 OtherEnes 65.00 1,300,000,000 65 1,040,000,0001.5 General Public 15.00 300,000,000 15 240,000,000

1.6 Others - - -

2. ForeignOwnership 20.00 400,000,000 20 320,000,000

Total 100.00 2,000,000,000 100 1,600,000,000

Amount in NPRShare oWnerShip

naMe oF Shareholder nuMBer oF ShareS % Share Capital

Habib Bank Limited 4,000,000 20.00 400,000,000

Karmachari Sanchaya Kosh 2,800,000 14.00 280,000,000

N. Trading Co. Pvt. Ltd. 2,541,669 12.71 254,166,900

Mutual Trading Co. Pvt. Ltd. 2,524,000 12.62 252,400,000 AvaInternaonalPvt.Ltd. 2,276,873 11.38 227,687,300

ChhayaInternaonalPvt.Ltd. 1,777,674 8.89 177,767,400

Sumit Kumar Agrawal 529,869 2.65 52,986,900

Syakar Co. Ltd. 198,001 0.99 19,800,100

Sharma & Co. Pvt. Ltd. 132,000 0.66 13,200,000

Total 16,780,086 83.90 1,678,008,600

Amount in NPR

ParcularsofIndividual/Group/Firm/Companyholding0.5%oraboveareasfollows:

ShareCapital&Ownership


1. ShareCapital

1.1 AuthorizedCapital 3,000,000,000 3,000,000,000

a. 30,000,000OrdinarySharesofRs100each. 3,000,000,000 3,000,000,000

b.Non-redeemablePreferenceShares - -

c. RedeemablePreferenceShares - -

1.2 IssuedCapital 2,000,000,000 1,600,000,000

a. 20,000,000OrdinarySharesofRs100each 2,000,000,000 1,600,000,000

(Previousyear16,000,000OrdinarySharesofRs.100each)



1.3 PaidupCapital 2,000,000,000 1,600,000,000

a. 20,000,000OrdinarySharesofRs100eachfullypaidup 2,000,000,000 1,600,000,000

(Previousyear16,000,000OrdinarySharesofRs100eachfullypaidup)



1.4 ProposedBonusShares 400,000,000 400,000,000 1.5 Calls-in-advance - -

1.6 Total 2,400,000,000 2,000,000,000

Amount in NPR

Schedule 1


51/84


ReservesandFundspartiCularS Current Year previouS Year

1. General Reserve Fund 1,191,423,439 1,012,800,4102. Capital Reserve Fund - -

3. CapitalRedemponReserve - -

4. Capital Adjustment Fund - 38,610,000

5. Other Reserve Fund 341,353,139 228,119,874

a. ConngentReserve - -

b. InstuonDevelopmentFund - -

c. DividendEqualizaonFund - -

d. Special Reserve Fund 4,000,000 4,000,000

e. AssetsRevaluaonReserve - -

f. DeferredTaxReserve 2,901,279 8,355,221

g. Other Free Reserves - -

h. BondRedemponReserve 285,714,285 214,285,714

i. Other Reserve (Investment Adjustment Reserve) 48,737,575 1,478,939

7. AccumulatedProt/(Loss) 32,931,797 136,587,269

8. ExchangeFluctuaonFund 29,769,898 23,087,577 Total 1,595,478,273 1,439,205,130

Amount in NPR

Schedule 2

DebenturesandBondspartiCularS Current Year previouS Year

1. 8PercentHBLBond2072ofRs1,000each 500,000,000 500,000,000

(Issued in june/july 2008 and maturing in july 2015 )

[BalanceinRedemponReserveRs285,714,285(PreviousYearRs.214,285,714)

Total 500,000,000 500,000,000

Amount in NPR

Schedule 3

BorrowingspartiCularS Current Year previouS Year

a. lc

1. Nepal Government - -

2. Nepal Rastra Bank 10,000,000 -

3. RepoObligaon - -

4. InterBankandFinancialInstuons - -

5. OtherFinancialInstuons - -

6. Others - -

Total 10,000,000 -

B. Foreign

1. Banks - -

2. Others - -

Total - - Total(A+B) 10,000,000 -

Amount in NPR

Schedule 4


52/84


Deposits


1. Non Interest Bearing accounts

A. CurrentDeposits 3,694,249,426 3,745,624,493

1. LocalCurrency 2,903,865,089 2,885,401,105

1.1 Nepal Government 83,561,854 137,280,881

1.2 AClasssLicensedInstuons 148,514,126 72,981,395

1.3 OtherLicensedInstuons 349,538,845 303,714,106

1.4 OtherOrganizedInstuons 1,420,274,274 1,409,944,595

1.5 Individuals 759,629,886 814,891,065

1.6 Others 142,346,104 146,589,063

2. ForeignCurrency 790,384,337 860,223,388

2.1 Nepal Government 80,814,018 70,110,875

2.2 AClasssLicensedInstuons 46,993 49,402

2.3 OtherLicensedInstuons 199,831,038 268,267,485

2.4 OtherOrganizedInstuons 223,050,691 277,301,761

2.5 Individuals 193,308,361 155,210,899

2.6 Others 93,333,236 89,282,967 B. MarginDeposits 1,219,365,273 946,871,896

1. Employees Guarantee - -

2. Guarantee Margin 776,901,606 150,133,199

3. LeersofCreditMargin 442,463,667 796,738,697

C. Others - -

1. LocalCurrency - -

1.1 FinancialInstuons - -

1.2 OtherOrganizedInstuon - -

1.3 Individual - -

2. ForeignCurrency - -

2.1 FinancialInstuons - -

2.2 OtherOrganizedInstuons - -

2.3 Individual - -

TotalofNon-InterestBearingAccounts 4,913,614,699 4,692,496,389

Amount in NPR

Schedule 5


53/84


Deposits


2. Interest Bearing accounts A. SavingDeposits 15,994,563,707 16,294,680,337

1. LocalCurrency 15,233,399,813 15,494,591,313

1.1 OrganizedInstuons 288,345,837 234,974,920

1.2 Individuals 14,944,944,112 15,259,510,199

1.3 Others 109,864 106,194

2. ForeignCurrency 761,163,894 800,089,024

2.1 OrganizedInstuons 14,527,644 20,504,449

2.2 Individuals 738,419,962 770,360,409

2.3 Others 8,216,288 9,224,167

B. FiedDeposits 13,507,370,421 11,328,635,821

1. LocalCurrency 12,501,738,459 10,153,602,555

1.1 OrganizedInstuons 6,291,977,069 6,203,841,187

1.2 Individuals 6,059,413,840 3,838,959,968

1.3 Others 150,347,550 110,801,400

2. ForeignCurrency 1,005,631,962 1,175,033,266 2.1 OrganizedInstuons 736,692,559 728,219,395

2.2 Individuals 178,305,603 274,201,940

2.3 Others 90,633,800 172,611,931

C. CallDeposits 6,505,078,203 5,295,389,727

1. LocalCurrency 5,160,403,047 3,834,098,227

1.2 AClasssLicensedInstuons - -

1.3 OtherLicensedInstuons 3,128,728,079 2,192,821,118

1.4 OtherOrganizedInstuons 1,924,950,838 1,457,860,841

1.5 Individuals 106,724,130 183,416,267

1.6 Others - -

2. ForeignCurrency 1,344,675,156 1,461,291,500

2.1 AClasssLicensedInstuons 3,266,551 3,225,854

2.2 OtherLicensedInstuons 1,100,125,234 1,207,986,979

2.3 OtherOrganizedInstuons 241,283,371 250,078,668

2.4 Individuals - -

2.5 Others - -

D. CercateofDeposits - -

1. OtherOrganizedInstuons - -

2. Individual - -

3. Other - -

TotalofInterestBearingAccounts 36,007,012,331 32,918,705,886

TotalDeposits 40,920,627,030 37,611,202,274

Amount in NP

CONTINUESchedule


54/84


BillsPayables Amount in NPRSchedule 6


1. Local Currency 24,955,617 212,665,0932. Foreign Currency 6,699,969 3,493,786

Total 31,655,586 216,158,879

CashBalance Amount in NPRSchedule 8


1. Local Currency (Including coins) 595,552,373 478,067,207

2. Foreign Currency 36,493,783 36,156,362

Total 632,046,156 514,223,569

OtherLiabilies Amount in NPRSchedule 7


1. Pension / Gratuity Fund - -

2. Employees Provident Fund - -

3. EmployeesWelfareFund - -

4. ProvisionforStaBonus 123,773,366 75,572,728

5. Interest Payable on Deposit 245,726,224 172,598,332

6. Interest Payable on Borrowings/Bonds 23,751,114 23,031,5237. Unearned Discount & Commission - -

8. Sundry Creditors 72,428,981 74,282,439

9. Branch Adjustment Account - 103,494,371

10. DeferredTaxLiability - -

11. Dividend Payable 21,943,031 15,397,544

12. Others

a. ProvisionforAuditFee 678,000 678,000

b. Provisionforleaveencashment 77,383,708 62,268,078

c. Matured HBL Bond Payable 1,120,000 3,965,000

d. ProvisionforGratuity 58,946,092 30,928,751

e. Interest Suspense on NBA 892,259 892,259

f. Others 314,958,220 197,975,705

Total 941,600,995 761,084,730

BalancewithNepalRastraBan

partiCularS loCal CurrenCY ForeiGn CurrenCY Current Year p reviouS Year

inr ConvertiBle total

CurrenCY

1.NepalRastraBan 1,342,048,477 - 48,577,310 48,577,310 1,390,625,787 2,604,790,901

a. Current Account 1,342,048,477 - 48,577,310 48,577,310 1,390,625,787 2,604,790,901

b. Other Account - - - - - -

Total 1,342,048,477 - 48,577,310 48,577,310 1,390,625,787 2,604,790,901

Amount in NPR

Schedule 9

Note : Total balance as per the statement of Nepal Rastra Bank is 1,502,062,312.


55/84


BalancewithBans/FinancialInstuons

partiCularS loCal ForeiGn CurrenCY Current previouS

CurrenCY inr ConvertiBle total Year Year

CurrenCY

1. LocalLicensedInstuons 143,838,219 - 2,668,649 2,668,649 146,506,868 383,361,221

a. Current Account 143,838,219 - 2,668,649 2,668,649 146,506,868 383,361,221


2. ForeignBan - 182,023,235 613,449,275 795,472,510 795,472,510 364,114,993

a. Current Account - 182,023,235 613,449,275 795,472,510 795,472,510 364,114,993


Total 143,838,219 182,023,235 616,117,924 798,141,159 941,979,378 747,476,214

Amount in NP

Schedule 1


1. Local Currency 200,000,000 100,000,000

2. Foreign Currency 534,000,000 208,840,000

Total 734,000,000 308,840,000

MoneyatCallandShortNoce Amount in NPSchedule 1

Note : Total balance as per the statement received from respecve bank is 1,012,597,170.


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partiCularS purpoSe Current Year previouS Year

tradinG other1. Nepal Government Treasury Bills - 4,725,584,865 4,725,584,865 3,455,030,155

2. Nepal Government Saving Bond - - - -

3. NepalGovernmentOtherSecuries - 1,681,777,676 1,681,777,676 1,010,342,254

4. NRB Bonds - - - -

5. Foreign Bonds - - - -

6. LocalLicensedInstuons - 479,420,000 479,420,000 197,305,000

7. Foreign Banks - 1,794,368,930 1,794,368,930 3,703,350,297

8. Corporate Shares - 88,787,200 88,787,200 78,882,459

9. Corporate Bonds and Debentures - - - -

10. Other Investments - - - -

TotalInvestment - 8,769,938,671 8,769,938,671 8,444,910,165

Provision - - - -

NetInvestment 8,769,938,671 8,444,910,165

Investments Amount in NPRSchedule 12

InvestmentsinShares,DebenturesandBondspartiCularS CoSt Market proviSion Current previouS

priCe value Year Year

1.InvestmentinShares

1.1 RuralMicronanceDevCentre 48,000,000 48,000,000 - 48,000,000 48,000,000

480,[email protected],fullypaidup

1.2 Western Rural Development Bank 3,000,000 3,300,000 - 3,000,000 3,000,000

33,000 Shares (including 3,000 bonus shares)

@Rs.100pershare,fullypaidup

1.3 NirdhanUhanBankLtd. 12,793,300 44,146,160 - 12,793,300 7,752,000



1.4 Chhimek Bikas Bank Ltd. 7,380,100 29,597,922 - 7,380,100 7,380,100



1.5 Swabalamban Bikas Bank Ltd. 12,490,500 22,888,800 - 12,490,500 6,600,000



1.6 SwiSC 1,214,859 1,214,859 1,214,859 - 1,214,859

6 Shares

1.7 CreditInformaonCorporaonLimited 1,423,300 2,729,400 - 1,423,300 1,235,500

27,294 shares (including 13,061bonus shares)


1.8 Nepal Clearing House 2,500,000 2,500,000 - 2,500,000 2,500,000

25,[email protected],fullypaidup

1.9 VISACardInternaonal - - - - -

5,860nos.ofCommonStock 1.10NepalBankersTrainingInstute 1,200,000 1,200,000 1,200,000 1,200,000

12000 shares @ Rs. 100 per share, partly paid

2.InvestmentinDebenturesandBonds

2.1 ..

2.2 ..

2.3 ..

TotalInvestment 90,002,059 155,577,141 1,214,859 88,787,200 78,882,459

3.ProvisionforLoss

3.1 Up to previous year -

3.2 Addionthisyear 1,214,859

TotalProvision 1,214,859

NetInvestment 88,787,200 78,882,459

Amount in NPR

Schedule 12(A)

Note : Shares of Chhimek Bikas Bank Limited, Nirdhan Uhan Bank Limited and Swabalamban Bikas Bank Limited are listed in Nepal

Stock Exchange. Companies except RMDC, Chhimek Bikas Bank Limited, Nirdhan Uhan Bank Limited, Swabalamban Bikas Bank Limited

and Western Rural Development Bank have not declared dividend in the last three years.


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InvestmentsinShares,DebenturesandBonds PARTICULARS COSTPRICE MARkETPRICEASAT PROFIT/LOSS REMARkS

16JUL2010 16JUL2011 Current Year previouS Year1. Nepal Government Treasury Bills - - - - -

2. Nepal Government Saving Bonds - - - - -

3. NepalGovernmentOtherSecuries - - - - -

4. Nepal Rastra Bank Bonds - - - - -

5. Foreign Bonds - - - - -

6. SharesofLocalLicensedInstuons - - - - -

7. DebenturesandBondsofLocalLicensed - - - - -

Instuon - - - - -

8. Shares,DebenturesandBondsof - - - - -

LocalOrganisedInstuons - - - - -

9. Placement in Foreign Banks - - - - -

10. Inter Bank Lending - - - - -

11. Other Investments - - - - -

TotalInvestments - - - - -

Amount in NPR

Schedule 12.1

HeldtoMaturityInvestments PARTICULARS COSTPRICE IMPAIREDAMOUNTTILL PROFIT/LOSS REMARkS

16JUL2010 16JUL2011 thiS Year previouS Year

1. Nepal Government Treasury Bills 4,725,584,865 - - - -

2. Nepal Government Saving Bonds - - - - -

3. NepalGovernmentOtherSecuries 1,681,777,676 - - - -



6. SharesofLocalLicensedInstuons - - - - -

7. DebenturesandBondsofLocalLice- - - - - -

nsedInstuons - - - - -

8. Shares,DebenturesandBondsof - - - - -

LocalOrganisedInstuons - - - - -9. Placement in Foreign Banks 1,794,368,930 - - - -

10. Other Investments 479,420,000 - - - -

TotalInvestments 8,681,151,471

Amount in NPR

Schedule 12.2

AvailableforSaleInvestmentspartiCularS CoSt priCe Market priCe aS at thiS Year previouS Year reMarkS

16JUL2010 16JUL2011 inveStMent PROFIT/LOSS

ADJUSTMENT

RESERVEBA

1. Nepal Government Treasury Bills - - - - -

2. Nepal Government Saving Bonds - - - - -3. NepalGovernmentOtherSecuries - - - - -



6. SharesofLocalLicensedInstuons 83,663,900 159,874,390 147,932,882 - -

7. DebenturesandBondsofLocal - - - - -

LicensedInstuons - - - - -

19th annual report

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