Annual Report 69-70 - 20140305122025

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ANNUAL REPORT 2012/13
www.nabilbank.com
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Bhalwadi (1)
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Charikot (1)
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Kathmandu (17)
Lalitpur (3)
Dhulikhel (1)
Khandbari (1)
Bhaktapur (1)
Hetauda (1)
Dharan (1)
Birgunj (2)
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PARTNERSHIP ON A LONG JOURNEY

Pioneering modern banking in
the country the Bank has developed

partnership with multitude of
institutions and individuals and has

generated value for all. Partnership
sown 30 years back has grown
manifold, enriching every relationship,

creating manifold benefits and
complementing each others progress.

We value and foster every partnership
all along on our long journey ahead.
Nabil Bank Limited
INSIDE
2 OPERATING &
FINANCIAL REVIEW
4 GOVERNANCE
Analysis of key items of Statement

of Financial Position of past 5 years
The Board of Directors
22
Analysis of key items of Income Statement of past 5 years

Achievements of Current Year
Value Addition
35
28
Segmental performance of the Bank
36
Interim position and performance (unaudited)

General overview of Nabil Invest
1 OVERVIEW
Board Committees
Internal Controls
60
Employees
54
58
Corporate Sustainability
64
Corporate Social Responsibility 66
38
3 PRODUCT & SERVICES

5
About Nabil Bank
Vision, Mission and Value Statement

Financial Highlights
Chairmans Message
The Board of Directors

CEO's Message
40
25
52
16
11
Macro-economic Outlook
14
18
Lending Products
Deposit Products
Card Products
44
46
47
Remittance Products
Bancassurance
49
49
Investment Banking / Merchant Banking

Other products/services
50
50
6 SHAREHOLDERS
INFORMATION
Structure of Share Capital
177
Shareholders Profile
Stock symbol
177
Annual general meeting
176
178
Shareholder enquiries and communication

Taxation on dividends and shares
5 FINANCIAL STATEMENTS
& OTHER INFORMATIONS
Statement of directors responsibility
70
Disclosure of information under Section 109(4) of Companies Act 2006
independent Auditors Report
74
Financial Statements with Schedules
75
180
179
7 NABIL INVESTMENT
BANKING LIMITED
71
Directors Report
181
Information under section

109(4) of Companies Act, 2006
184
Financial Statements with Schedules
AWARDS
205
OFFICE NETWORKS
206
186
CUSTOMER
FOCUSED
Nabil introduced the concept of customer care and
delight in the banking industry in Nepal 29 years ago.
This paradigm shift in banking helped customers to
ask the bank for a specific product of their need for
the fullest satisfaction. Nabil accordingly has been
availing the services to the best suit of customer need
which manifests our approach to keep our customer
at core of our activities in serving them.
01
OVERVIEW
ABOUT NABIL BANK
Nabils inception as the first foreign joint
venture bank in the year 1984 was one of
the important years in the history of
Nepalese banking. Founded with the
technical collaboration of then Dubai Bank
Ltd., along with the institutions like Nepal
Industrial Development Bank, Rastriya
Beema Sansthan, and Nepal Stock Exchange
it soon became a great icon for customer
service in the Nepalese financial industry.
Even then when the modern banking was
way too far for general public and technology
was just budding, the then Board of Nabil
and its management team contemplated
about computerizing its operations from
initial days. Reduced transaction time at the
counter and prompt delivery of customer
account statements were the main thrust for
the then Nabil team. Today, this noble
thought has become one of the strong
foundations to grow its business in manifold.
Today it has expanded its service networks to
48 branches, 2 extension counters and 81
ATMs, 1050 rented and owned POS
machines at merchant outlets, 1237
Western Union and 1263 Nabil Remit
agents and various arrangements for using
delivery points of other banks and financial
institutions through Mechi to Mahakali to
deliver services efficiently to its customers.
There are number of customized products
and various units designed to cater diverse
needs of corporate houses and individuals.
Corporate Banking, SME and Micro
Financing, Project and Infrastructure
Financing, Personal Lending and Cards are
there for catering credit needs;
Bancassurance Division for risk as well as

wealth management; Deposit Relationship
Unit for deposits management through
various schemes; and Remittance Unit for
easy transfer of funds domestically and
internationally. Besides, the businesses of
Nabil have also grown multitudinously. The
Bank's balance sheet size has crossed to
NRs.73 billion (NRs.268 million in 198485) and shareholders' fund to NRs.6.6
billion (NRs.28 Million) and are ever growing
steadily. Having said that the journey for
Nabil had not been that too easy. There were
ebbs and flows in its business during its
journey of glorious 29 years; however

despite adversities, it has been able to stay
atop in terms of customer base, geographic
outreach, business portfolio and profitability.
These are all testaments of strong
foundations the predecessors have laid and
the legacies that have been inherited to
sustain in a big way.
The culture the Bank has inculcated, the HR
it has groomed, the structure it has
developed and continuous oversight and
guidance from the Board strongly supports
the bank surging ahead on sustainable
growth path.
CHRONOLOGY OF BRANCH EXPANSION IS PRESENTED AS UNDER

S. NO.
YEAR
BRANCHES
CUMULATIVE NUMBER
1
2
3
4
5
6
7
8
7
8
9
10
11
1984/85
1985/86
1987/88
1988/89
1991/92
1992/93
1995/96
1996/97
2000/01
2001/02
2003/04
2004/05
2007/08
12
13
14
2008/09
2009/10
2010/11
15
2011/12
*Tripureshwor, Kantipath
Jorpati, New Road
**Power House Chowk
Birgunj
Biratnagar
Lalitpur
Butwal
Bhalwadi, Pokhara
Itahari
Bhairahawa, Lakeside Pokhara, Nepalgunj
Dharan
Maharajgunj
Baglung, Dhangadhi, Mahendranagar, Damak,
Narayangadh, Ghorahi, Tulshipur, Birtamod, Hetauda
New Baneshwar, Halchowk, Thamel, Kaushaltar
Chabahil, Maitidevi, Satdobato, Balaju, Kuleshwar, Khandbari, Charikot
Dhulikhel, Gorkha, Besisahar, Chandragadhi, Teendhara,
Dhapashi, Anamnagar, Sinamangal, Gwarko, Attarkhel
Janakpur
* The branch currently located at Tripureshwor was initially established at Durbar Marg which was subsequently relocated at Kamaladi
and thereafter to World Trade Centre premises at Tripureswor on 27th May 2007.
** The branch currently at Power House Chowk was initially established at Sugauli which was relocated to Birgunj dry port
on 21st March 2001 and thereafter to Power House Chowk, Birgunj on 3rd July 2006.
2
4
5
6
7
8
9
11
12
15
16
17
26
30
37
47
48
Nabil Bank Limited
01
VISION, MISSION
AND VALUE STATEMENT
VISION STATEMENT
MISSION STATEMENT
VALUES STATEMENT
At Nabil, our Vision is to be a bank for

all across all geopolitical zones and
socioeconomic stratums of the nation that
can provide myriads of financial solutions
and create values for all our stakeholders, to
stand in the community with our economic
and civic roles. We look forward to emerging
as a first rate bank across all stratums
of the nation.
We at Nabil work together up to our vision

and to bring it into reality. Our mission is
therefore to prove that Nabil is driven by the
spirit for realizing those visionary aspirations.
With that end in view, we work in
partnership with our stakeholders and the
community at large. Our roadmap to
reaching where we have set our mind on is
by maneuvering our strategic action plans
through a well-teamed and synergistic
workforce into industrial end products our
customized services. Our approaches are to
differentiate our products by reengineering
them with the best technologies and
management philosophy keeping in focus our
customers satisfaction over and above
everything else at all times. We have set our
goals and objectives to hone the skills of
inspired HR force and tailor our products and
services to that end. With an all inclusive
approach Nabil engages in customizing
ranges of products catering to the entire
gamut of society from financing
megaprojects to underprivileged individuals
and promoting enterprises across all
segments of society by adding values to
nation building endeavours. We are
branching out on a national scale through
our wide-ranging points of representation
representing different geographic and
economic zones along with our broad global
network as a 1st CHOICE PROVIDER OF
COMPLETE FINANCIAL SOLUTIONS.
We surge to turn our services and products

into economic values for our treasured
customers, taking care of their financial
needs. We know the world is changing and
to keep pace with that we customize our
services and re-engineer our products in sync
with changing time and technology. We are
always geared up for translating great
aspirations of our stakeholders into economic
and social values. We know our customers
expect unparalleled service standards; our
community looks forward to seeing the bank
emerging as responsible corporate entities
that cherish social and economic harmonies
in the community. We go beyond just making
profits. Our shareholders value financial
returns together with the safety of their
investments.
At Nabil, values for its employees are always
well-defined, for it always knows that staffs
are great movers, therefore recognizing their
financial, corporate and social values get
their spirits always going to the creative end.
Nabil fosters corporate governance, realizing
the values our regulators always cherish
through financial disciplines. Besides, Bank
has set C.R.I.S.P. (Customer Focused, Result
Oriented, Innovative, Synergistic and
Professional) as its values, which it lives by
in day to day operation of the banks
business.
01
FINANCIAL HIGHLIGHTS
TOTAL OPERATING INCOME
NET PROFIT AFTER TAX
NRs. in Billion
NRs. in Billion
4.61
TOTAL DEPOSIT
2.22
NRs. in Billion
55.02
3.99
1.70
3.05
1.34
2.76
2.22
08/09
1.03
09/10
10/11
46.41
11/12
12/13
08/09
37.35
09/10
10/11
11/12
GROSS LOANS AND ADVANCES
SHAREHOLDER'S FUND
NRs. in Billion
NRs. in Billion
47.65
12/13
2009
2010
2011 2012
As of Mid - July
Growth Rate of 2012/13: 16%
CAGR (last 5 years): 15%
NRs. in Billion
73.24
63.20
5.45
39.91
33.03
2013
TOTAL ASSETS
6.69
42.87
58.14
52.15
4.57
28.00
49.70
1.14


CAGR (last 5 years): 22.5%
63.61
44.87
3.83
3.13
2009
2010
2011 2012
As of Mid - July
2013
2009
2010
2011 2012
As of Mid - July
Growth Rate of 2012/13: 13.23%
2013
2009
2010
2011 2012
As of Mid - July
2013
Nabil Bank Limited
AVERAGE RETURN ON ASSETS
RETURN ON EQUITY
in Percentage
in Percentage
2.80
2.55
2.38
3.25
32.78
33.93
2.43
30.27
30.25
29.02
08/09
09/10
10/11
11/12
12/13
CREDIT TO DEPOSIT RATIO

in Percentage
08/09
09/10
10/11
11/12
CAPITAL ADEQUACY RATIO
78.29
in Percentage
77.91
74.90
73.87
11.01
10.70
09/10
10/11
GROSS NPA RATIO
11/12
12/13
NET NPA RATIO
in Percentage
1.77
2.33
08/09
1.48
2009
0.19
2010
2011
As of Mid - July
0.38
2012
83.81
70.67
83.57
60.00
2009
2010
2011
As of Mid - July
MARKET CAPITALIZATION
in NRs.
Nrs. in Billion
2012
35.15
2,384
2010
65.00
2013
31.84*
28.62
1,252
2009
95.14
30.00
CLOSING PRICE IN NEPSE
4,899
12/13
DIVIDEND PER SHARE
70.00
0.45
2013
11/12
113.44
0.80
0.35
10/11
in Percentage
85.00
0.50
09/10
EARNINGS PER SHARE

2.13
11.59
10.58
10.50
71.17
08/09
12/13
2011
As of Mid - July
1,355
2012
1,815
2013
20.21
2009
2010
2011
As of Mid - July
23.67*
2012
2013
*For Mid July 2012 and 2013, the market capitalization is computed taking into
account the share prices of promoters shares and ordinary shares.
RESULT
ORIENTED
The action and activities should bear the sweet fruit
and Nabil architects business ideas, designs products
and serve the customer keeping the end result always
in mind. All its actions and services are intended to
yield desired results.
10
Nabil Bank Limited
11
01
CHAIRMANS MESSAGE
I am very pleased to announce that the year 2012-13 remained satisfactory for all of us.
We achieved good growth and we were

successful in maintaining our portfolio
healthy. We made some changes in our
systems and processes to strengthen our
internal control system.
In terms of the financials, we have been able
to maintain the growth rate at the level we
have achieved so far over the last five years.
We have registered growth on every fronts
viz. balance sheet size, shareholder's fund,
deposits and loans and more importantly the
profit. The growth of 23% in shareholders
fund after setting aside a cash dividend of
40% against the growth in balance sheet
size of 16% is marvelous. Growth under
loans and deposits of 16% and 11%
respectively is also steady and growth of
31% under net profit is overwhelming. The
reasons behind such growth under
profitability are growth in Net Interest
Income of 18% despite reduction in interest
rates and limited investment opportunities;
and significant reduction of 99.3% in net
loss provisioning. The bank recorded
recovery from some loss category loans
which helped us keep provision expense at
the lowest level in the last five years.
The frequency of online fraud has grown over
the past couple of years. In order to cope up
with the challenges posed by the fraud
perpetrator, more stringent measures have
been put in place to make our system more
robust. In this connection, the Bank has
successfully implemented forceful PIN
change on all new and renewed cards and
implementation of E-secure on all online
payments. The Bank is also consulting with
vendors for implementation of 2 factor

authentication on all online payments. In
addition, we have always encouraged for
good corporate governance. We have
implemented Whistle Blowing Policy to
promote good voices against unnoticed
fraudulence, misappropriation, exploitation,
and / or harassment happening inside the
organization.
The Bank has always made us feel proud by
winning awards. In the year 2012-13 also
the bank was conferred with the Best
Presented Accounts Award . In fact, winning
this award conducted by the Institute of
Chartered Accountants of Nepal
consecutively for the last four years is a
testament of our standard in respect of
accounting system and disclosures practiced
in the Bank. The Merit Certificate awarded
by the South Asian Federation of Accountants
also stamps this fact. Apart from this, the
Ministry of Finance, Government of Nepal
also recognized the bank as the highest
taxpayer among banking and financial
institutions for the year 2067/068. Recently
we were conferred the Peoples' Excellence
Award by the Federation of Nepalese
Chamber of Commerce and Industry. Four
awards from different institutions and for
different reasons give us tremendous pleasure
and motivation to move ahead.
Challenges are there in every leg of our
businesses and we want to stand firm and
move ahead in the search for excellence. We
will not stay with complacency; instead we
will move forward always striving to ensure
safety and security of every ground we cover.
We will maintain the best governance

practices to earn trust from all business
partners, regulators and stakeholders.
Finally, I would like to thank my dear fellow
board members for bestowing me with the
responsibility of chairmanship and showing
upon me the trust for leading this Bank
towards the zenith. I would also like to
express my gratitude to the depositors,
borrowers and business partners for their
trust and cooperation that have made us the
first choice bank. Similarly, I would also like
to thank the regulators for their support and
guidance to implement best corporate
practices. On behalf of the Board I would
like to express appreciation to the employees
and thank them for the incessant dedication
and devotion that they have displayed in
achieving this extraordinary result.
We have been
able to maintain
the growth rate
at the level we
have achieved so
far over the last
5
years
Krishna Bahadur Manandhar

Chairman
12
Nabil Bank Limited
13
01
SENIOR DIRECTORS MESSAGE
Modern banking in Nepal started after the

inception of Nabil Bank back on 12 July
1984. It has designed its services
specifically for a customer that meets his
requirement and standard. Being associated
with the bank for about 28 years
intermittently on the Board of the Bank, I
too feel privileged to be part of this
institution which changed the definition of
banking. It has always played a pioneer role
in introducing products and services in the
country. It has also given a confidence to
the society that the service it provides is for
all and is there at everyones reach.
I being first public director in the joint
venture bank, public aspirations were high
from the organization and that from the
directors too, since other public companies
then had not given returns to the
shareholders. Reminiscing the memory
back then when banks 30% public share
were not subscribed fully and todays craze
for Nabils share has huge passage of time
and enormous effort of the bank and
directors. The bank issued public shares
with just 60% call money. My personal
initiation to make the share fully paid up by
keeping the un-called money of 40% gave
positive signal in the share market, which
was at its infancy.
Additionally, the practice of interim dividend
which Nabil Bank started for the first time
created immense confidence in the public
sector. Such a public confidence has given

new dimension in the share market and
today the market creation of this size has
an important role of the Bank and the
directors for constructive role in developing
confidence among the shareholders.
I also feel proud in taking few examples of
the initiatives like introducing Credit Card in
the country, Consumer Finance at a larger
scale, Infra Project Financing with a
dedicated unit, felicitating Public
Shareholder for their silent but valuable
contribution and the like. Similarly I would
like to take few names of key role players in
the success story of Nabil bank. They are
Mr. Sashi Narayan Shah, the first chairman
of the board, late Mr. Kalyan Bikram
Adhikary, the former governor of Nepal
Rastra Bank, Mr. G.S. Srivastav and Mr. S.
C. Kabadkar two Executive Directors of the
bank and my fellow board members and late
Mr. Supriya Gupta a veteran banker and
board member. They deserve deep respect
and an accreditation for the contribution
they have made for this success of the bank.
The results are there when an institution
with dedication and hard efforts take up any
business. Achievements in the year 2012/13
are testimony of this fact that helped in
providing highest return to the shareholders
in banking industry. All the contributors to
this result from customers to regulators to
board members to staff deserve special
thanks who are very much important in

sustainable growth of the bank and keeping
the spirit of shareholders live and high.
Achievements
in the year
2012/13 are
testimony of
this fact that
helped in
providing
highest return
to the
shareholders
in banking
industry.
Shambhu Prasad Poudyal
Senior Director
14
Nabil Bank Limited
01
THE
BOARD
OF
DIRECTORS
MR. KRISHNA BAHADUR

MANANDHAR
MR. SHAMBHU
PRASHAD POUDYAL
MR. DAYARAM
GOPAL AGRAWAL
REPRESENTS
GROUP A SHAREHOLDERS
REPRESENTS
GROUP C SHAREHOLDERS
REPRESENTS
Chairman of the Board
Board Member
Board Member
Mr. Manandhar, aged 62, was
Mr. Poudyal, aged 70, has held
Mr. Agrawal, aged 48, has held
Board in April 2011. He was
2004. He also held directorship
2004. He also held directorship
appointed as Director of the
elected as Chairman in January
2013. His earlier directorship in

the Board of Nabil was during
19992002 as representative of
Nepal Rastra Bank. He was
Deputy Governor of Nepal Rastra
Bank during 20052010. He has

also held directorship in the
Board of Rastriya Banijya Bank

Ltd. (19981999), Securities
Exchange Board of Nepal (2004

2005) and Purbanchal Grameen
Bikash Bank Ltd. (20042005)
as representative of Nepal Rastra

Bank. He holds Masters Degree
in Economics from Tribhuvan
University, Nepal and Post
Graduate Diploma in
Development Economics from

University of Manchester,
England. His banking experience

spans over three and a half
decade of service in the central

bank.
directorship in the Bank since
in the Bank during 19861994.

He was the Executive Chairman
of Rastriya Beema Sansthan, a
public sector corporation carrying

out both life and general (nonlife) insurance business and is
one of the largest insurers in the
country. He held the said position

during 19992002. He has also
served as a director in the Board
of Unilever Nepal Limited. He
also held Chairman of Board of
Nepal Housing and Development

Finance Co. Ltd. Besides, he has
also been associated with nonprofit making institutions like
Nepal Mountaineering
Association in the capacity of vice

president, Nepal Red Cross
Society (Kathmandu Branch) and

Nepal Family Planning
Association (Kathmandu Branch)

in the capacity of executive
member. He also has 17 years of

banking experience at Nepal
Rastra Bank, the central bank of

Nepal.
in the Bank during 19942003.
Mr. Agrawal is an entrepreneur, a

social activist and a media
person. He has been in the
business for the last two decades.
15
MR. KRISHNA
PRASHAD ACHARYA
Board Member
REPRESENTS
GROUP B SHAREHOLDERS
MR. NIRVANA CHAUDHARY
MR. MOHIUDDIN AHMED
MR. ASHISH SHARMA
REPRESENTS
REPRESENTS
REPRESENTS
GROUP C SHAREHOLDERS
Board Member
Board Member
Board Member
Mr. Acharya, aged 40, has held
Mr. Chaudhary, aged 31, has
Mr. Ahmed, aged 75, has held
Mr. Sharma is an MBA from AIT,
October 2010. He also held
since November 2010. Mr.
July 2011. In the past also he
associated with different business
directorship in the Bank during
20082009. He is a Chartered
Accountant qualified from the
Institute of Chartered
Accountants of India. He had
previously served as the General

Manager in Nepal Industrial
Development Corporation (NIDC)

and as the CEO in United
Insurance Company (Nepal) Ltd.

He is presently with Employees
Provident Fund in the capacity of

Chief Administrator appointed by
the Ministry of Finance,
Government of Nepal.
held directorship in the Bank
Chaudhary is Managing Director

of Chaudhary Group, a Nepali
business conglomerate. He also

holds directorship in United
Insurance Company. He had
previously held directorship in

United Finance Company.

held directorship in the Bank
intermittently and represented
Class A shareholders. Mr. Ahmed

holds Masters degree in
International Relations and
Bachelors degree in Economics
from the University of Dhaka. He

is a former ambassador of
Bangladesh to Nepal, Senegal,

Sierra Leone, Ghana and
Gambia. He has also represented

his country Bangladesh while in
foreign affair service and has
served in India, Indonesia, and

the United Kingdom in various
capacities. He also held
directorship in Janata Bank,

Bangladesh.
Thailand and has been
and social organizations. He is

Chairman of United Insurance
Company, a general insurance
company.
16
Nabil Bank Limited
01
CEO'S MESSAGE
I am pleased with the results Nabil has achieved in the financial year 2012-13.
The financial statements clearly display the

Bank's strong financial health and financial
performance. Despite negative growth in
interest earnings due to fall in lending rates,
we have managed a growth of 18% on net
interest income. Fee and forex income has
grown by 8% through better positioning of
our portfolio and from new product/services.
Improvement in the health of overall assets
resulted in write back of provisions. We also
took judicious call on top line growth and
managed our portfolio in a balanced manner,
which contributed to our bottom line
positively. These combined efforts helped the
Bank to post net profit growth of 31%.
We followed four-pronged plan that drives
the bank forward in a sustainable manner.
Financial growth, improvement in process
and control, better positioning of products
and services and investment in HR
development; the key pillars complementing
each other in taking the bank to a new
height. Growth of business volume, growth
of customer base, and refinement in
relationships were some of our actions last
year that yielded overall growth in profit,
quality relationship and desired top line
volumes. Business activities were subdued in
light of political stalemate in the country.
Delayed budget formulation and further
delay in release of budget could not propel
the activities for higher growth.
We continue to be committed and driven
towards positioning our systems, processes
and corporate practices at par with
international standards. Some of the work

processes have been centralized that are
intended to enhance control mechanism and
the standards of service. We have
implemented additional measures and
continue to implement latest technologies in
order to mitigate risks of fraud emerging
through technology and to provide security
and safety to our customers. Our focus is to
make the best utilization of technology by
automating processes to improve service
levels and efficiency as well as manage
These
combined
efforts
helped the
Bank to post
net profit
growth of
31
costs. Through the centralization of core

operation back office functions we are
enabled to scale up our services while at the
same time better equipped to effectively
manage increasing operations risk with larger
volumes and scattered branch network. We
continue to provide in-house and outside
training to employees across all levels to
equip them with the skills necessary to raise
efficiency and effectiveness.
Going forward and amidst challenges in the
country, we plan to build a strong base of
customer, further refining our products and
services, focusing towards automation and
addressing the risk aspects through
introduction of risk assessment culture in the
bank.
Finally, I take this opportunity to thank
regulators and Board members for their
continued support and guidance to maintain
good corporate culture and practices in the
Bank. Also I would like to thank
shareholders, depositors, borrowers and
business partners for the trust and
confidence they have shown on us. Likewise,
I would also thank all the employees, past
and present, for their relentless dedication
and initiative they have taken to make
NABIL what it is today.
Anil Gyawali
Chief Executive Officer
17
01
MACRO-ECONOMIC OUTLOOK
DOMESTIC OUTLOOK
Nepal is on the cusp of changeover. It's political system is
to be defined through a new constitution for which
Constituent Assembly Election was held on 19 November

2013, for the second time.
However a mixed result is making difficult to

give a clear picture of the shape of new
Constitution and it is less likely to have an all
parties accepted Constitution where burning
issues like a number of states, their
formation and administration systems are
still not the agreed agenda. Further lingering
in the promulgation of a new Constitution
may lead to poor business sentiments.
19
pace. The Kathmandu valley which was on

the road expansion spree was the immediate
beneficiary as delayed project soon went
underway after the release of the budget.
However policy issues in the absence of the
legislative body could not be addressed and
consequently it did have some repercussion
on business activities. Considering the
positive sentiment, the government projected
GDP growth rate of 5.5% for year 2014 (mid
July) more than by around 190 basis points
in comparison to preliminary estimates of
3.6% by Central Bureau of Statistics for year
2013 (Mid July). Good rainfall for the
summer crop has favored this projection.
Rising inflation due to depreciation of NPR
with major currencies (except INR), perennial
power crisis, rising labor issues and poor
tourist inflow may cause some dent to the
economy and achievement of projected
growth is a herculean task.
Nonetheless following the peaceful election,

the nation is keeping high hope towards
parties to bring the Constitution drafting
process to a logical conclusion and pave the
way for faster economic activities.
Maturities shown by the parties in finalizing
the current year's (2013) budget helped
government spending to ride at a normal
BOP surplus, low interest rate, increased

money supply and easy processes for doing
business are key drivers for the business
growth. Assuming these factors to remain
favorable, the businesses are expected to
grow on incremental basis. The remittance
inflow, which has been key component for
the economy to withstand surplus BOP, is
likely to give further drive as NPR with major
currencies has depreciated further in
comparison to last year. This will eventually
lead to increased consumer spending and
domestic consumption from private sector
including that for private construction. Once
the confidence is instilled in public, the
correction in price of real estate property which
has subdued for almost five years is likely to
take place which has signaled by the price
correction of shares in the recent times. It is
expected to help investors/owners to heave a
sigh of relief as these sectors have undergone
serious phase of distress and have almost
succumbed to bankruptcy. More importantly,
the transactions in these sectors will also
contribute on generating additional government
revenues.
In retrospect, the economy has been facing

problems during the last several years. Post
real estate bust, the economy witnessed
severe instances of volatility in the money
market. The interbank interest rates surged
as high as 10% while at times it remained
passive to trade below 1% as well. Despite
of volatility, the banking sector fared well.
Government owned banks steadily recovered
from the mire of non-performing assets. And
in couple of years henceforth, the net worth
of these institutions is likely to strengthen
further in the positive zone.
However with a limiting spread to 5%,
revised stringent provision for NDF, poor
credit growth, excess liquidity leading to
lending rate reduction and unclear issues of
multiple banking is likely to impact the
earning of banks adversely. In addition,
limited areas of investment to mobilize the
current excess liquidity are barring banks to
recover the cost of deposits. These
conditions have warranted introduction of
instruments to soak up excess liquidity
which however have not been that effective.
Similarly falling rate under money market
investments are also cause for concern.
Short terms rates are at its lowest level.
Some sectors which were affected due to
sharp price drop and resultant impact on
entire business will have some impact on the
NPA and earning in the years ahead as well.
In spite of these adversities, positive
development on the economic front is likely.
The country has geographical advantage of
being located in between China and India,
two of the worlds largest and fastest growing
economies. Nepal itself is rich in terms of
natural resources and youthful work force.
These aspects are likely to keep giving
positive vibe in the business communities
and some activities will keep coming as
business as usual. However this largely
depends on the political development at
home and stability of the situation including
government programs and policies.
20
Nabil Bank Limited
INTERNATIONAL OUTLOOK
The global economy is gradually faring well. The United
States has gained substantial confidence post QE Infinity
(USD 85 billion per month) measure which provided much

needed remedy for stimulus that the interest rate even
bringing down to zero level could not help.
Job creation and the price of properties have
increased which is believed to have
increased the business sentiment. Heavy
dose of quantitative easing which was put in
place for letting go the economic activities in
a normal pace however has been decided to
pull out gradually, starting from January
2014 by reducing the amount of bond
buying ceiling to USD 75 billion per month.
Performance of the large corporate has
improved remarkably. Increased money
supply through bond buying and cheap
interest rate has given growth to public
spending. Debt of the government has
increased remarkably which has even
brought to complete closure of some of the
government agencies in the absence of
budget for couple of weeks. Nonetheless it is
believed to have come back on track and will
function satisfactorily.
China the factory of world has also regained
the confidence although its growth rate has
come down to some extent from the level of
pre-financial crisis era, mainly dragged
down by falling import orders from most of
the advanced economies like US and
Europe. However growing domestic
consumption, investment at abroad and
benefit from these investments are likely to
keep the economy going at a comfortable
level. Most of the worlds large companies
place orders in China for production at
cheaper cost so that they can survive in
competition. These factors are still giving

competitive edge to China. With vast
population and potentials at home, the
economy is poised for better growth than
other major economies.
Japans cheap currency policy has given a
drive to its export and is showing signs of
improvement. It is likely to report an inflation
which it got deprived of for about one and a
half decades. Monetary expansion and bond
buying measures by central government have
caused excess money supply which has
boosted spending and led to the inflation.
EU whose existence had come into question
has also sailed successfully through crisis. The
rates however are still at the lower level and
ECB has bailed out most of the member
nations and equally acting as disciplinary
instructor for adopting austerity measures. All
the member countries are having one or the
other problem which make them busy in fixing
the same under the guidance of ECB and IMF.
Austerity measures followed in most of the
economies have given some respite. Stable
energy price, cut on spending and heavy dose
of bail out bid by ECB and IMF dragged down
government bond rate. The sentiment is high
on ECBs move though it is not timely, at
times. ECBs move brought the Cyprus back
on track where entire banking business was
closed for couple of weeks in a fear of heavy
withdrawal of deposit from the banks.
Iran agreeing the proposal to let its nuclear

enrichment facilities to be inspected by
international community and stop further
enrichment of nuclear program, the
sanctions imposed are lifted and it is allowed
to produce and sell its oil. Hard measures
like strike on Iran have been averted which
saved cost of war and human life. This
joyous event brought down the energy price
and countries like India which has heavy
reliance on Iran crude oil is likely to benefit.
Our immediate impact is from the economic
activities that occur in India as our exchange
rate is pegged with Indian currency and we
are heavily reliant on India for our major
imports. Following the slow action on
tapering by US, India could build substantial
forex reserve and contain CAD (current
account deficit). This helped its exchange
rate bring down to some extent and gave a
message that currency free fall has stopped
for the time being. Incentives offered in
export sector and easing out FDI/FII rules
helped boost the sentiment of institutional
investors and consequently bolstered Sensex
to peak up once again to reach at one of the
highest levels.
Taking account of all these events and the
actions adopted in major economies, the
world growth in the year 2013 is expected to
be 3.25% and that in the year 2014 is
projected to be 4%. Major economies are
still favoring low interest rate policy and
increasing money supply so that economic
activities and credit expansion can take place
which ultimately increase the consumption
and business activities. Taking positive note
from WTO Bali summit, Iran deal, US slow
move on tapering, ECB finding solutions for
coming out of crisis, domestic consumption
growth in China, Japan following the model
of cheap currency, currency stability in India
and stable commodity price around the
globe, the world economy growth will be at a
satisfactory level. It will boost up consumer
confidence and economic activities in the
year 2014 are expected to be better than
preceding couple of years.
INNOVATIVE
With the passage of time every aspect undergoes through change. To live up to
the customer delight, Nabil keeps its process and techniques innovating that
serve customer the best. Use of technology gives better mileage to an innovation
and Nabil always runs ahead in identifying the need of the customer and
designing the products that meet the requirements.
02
OPERATING
AND FINANCIAL
REVIEW
ANALYSIS OF KEY ITEMS OF STATEMENT
OF FINANCIAL POSITION OF PAST 5 YEARS
The bank has recorded steady growth in its business size, operating avenues and income generation over the past five year
period. The bank has significantly strengthened its delivery channels, IT infrastructure, operating policies and risk
management practices. Tables presented in this section reflect on the banks financial position during the past five years.
AT MID JULY
CAPITAL & LIABILITIES

1. Share Capital
2. Reserves & Surplus
3. Debentures & Bonds

4. Borrowings
5. Deposits
6. Bills Payable
7. Proposed Dividend
8. Income Tax Liabilities
9. Other Liabilities
Total
ASSETS
1. Cash Balance
2. Balance with Nepal Rastra Bank
3. Balance with Banks/Financial Institutions

4. Money at Call and Short Notice
5. Investment
6. Loans, Advances and Bills Purchased

7. Fixed Assets
8. Non Banking Assets
9. Other Assets
Total
NRs.000
2013
2012
2011
2010
2009
3,046,052
2,435,723
2,029,769
2,028,774
1,448,621
300,000
300,000
300,000
300,000
300,000
3,643,093
-
3,008,278
311,080
2,536,748
1,650,599
1,807,933
74,900
1,681,620
1,681,305
63,609,808
55,023,695
49,696,113
46,410,701
37,348,256
974,737
811,908
608,931
434,737
338,011
529,598
66,873
1,071,100
179,142
51,107
1,072,481
73,241,260
63,193,414
1,140,212
1,050,659
(46,939)
(456,817)
4,789,295
1,634,306
3,681,980
826,436
415,768
44,104
859,406
425,444
24,904
644,291
58,141,437
52,151,684
744,592
635,987
217,971
214,657
1,473,986
2,452,512
549,455
3,118,144
463,139
80,232
526,214
43,867,398
674,395
2,648,596
49,521
552,888
16,332,043
14,048,966
13,081,206
13,703,024
10,826,379
872,322
887,543
935,089
779,540
660,989
46,369,835
-
2,150,186
73,241,260
41,605,683
-
1,548,964
63,193,414
38,034,098
-
1,201,984
58,141,437
32,268,873
-
882,005
52,151,684
27,589,933
-
864,696
43,867,398
23
8 billion
21 billion
INTEREST
FREE
18%
CALL
17%
6 billion
6 billion
DEPOSIT MIX
2008
SAVINGS
38%
12 billion
SAVINGS
37%
23 billion
2013
FIXED
27%
8 billion
FIXED
17%
11 billion
SHAREHOLDERS' FUND
National economic conditions have not fared

well in recent years, particularly following
the real estate bubble post 2009. New
business ventures have been scarce and
demand for credit has been limited.
Although some sectors, including agriculture,
have been identified as productive sectors
and regulations require the banks to
maintain certain level of exposure in these
sectors, market conditions have not been
favorable. On top of that, there is a cut
throat competition among lenders and hence
resulting in over supply of credit. This has
exposed banks to greater credit risk as
evident from increasing non-performing
assets in general. However, non-performing
assets of commercial banks which was
6.08% at mid July 2008 has reduced
tremendously to 2.60% at mid July 2013.
The reduction is attributed to the
improvement in the quality of lending
portfolios of two government-owned
commercial banks.
The bank's focus on enhancing shareholder's

fund may be assessed appropriately from the
dividend payout ratio and reserves volume.
Banks gross loans and advances have

increased from NRs.21.76 billion at 15 July
2008 to NRs.47.65 billion at 15 July 2013,
recording a compounded annual growth rate
of 16.97% through five years. The bank has
maintained steady growth in its lending
volume and has capitalized the opportunities
of booking quality assets.
Adverse development in operating

environment also had some impact on the
banks lending books. Some large borrowers
could not serve debts on time. Consequently
these accounts had to be downgraded and
The shareholders' fund of the Bank has been

increasing steadily since inception.
Increment is achieved through retention of
profit in the form of reserves or by issue of
stock dividend. During the journey of 29
years, it has capitalized profits for 12 times
(including proposed bonus shares from
profits of current year) and in the last 5 years
it has done for 4 times. In addition, it has
also retained profits to enhance its equity
base. Total shareholders' fund that stood at
NRs.2.44 billion at 15 July 2008 has since
increased to NRs.6.69 billion at 15 July
2013, recording a compounded annual
growth rate of 22.38%. Additionally the
bank has proposed distribution of cash
dividend totaling NRs.3.17 billion out of net
profit generated in the last five years.
SHAREHOLDERS' FUND
6,689
NRs. in Million
5,444
4,567
3,837
3,130
33%
CALL
33%
INTEREST
FREE
13%
LOANS
30%
The deposit, occupying the substantial share

on Capital and Liabilities front, has increased
from NRs.31.92 billion at 15 July 2008 to
NRs.63.61 billion at 15 July 2013 posting
compounding annual growth rate of around
15% per annum. More importantly, the Bank
has been able to improve deposit mix over
the last 5 years. The absolute growth under
fixed deposit (FD) is negligible (NRs.11
billion vs. NRs.8 billion) considering the
growth of total deposit volume. Mix
proportion wise the share of FD has reduced
to 17% from 27%. Following graph displays
the mix proportion in Mid July 2008 and
2013 respectively.
provisioned to cover for possible losses. The

retail credit segment also witnessed higher
default rate in this period. The banks nonperforming assets to gross loan ratio, which
stood at 0.74% at mid July 2008, jumped
to 2.13% at mid July 2013. Meanwhile,
adequate loss provisions have been set aside
to cover for entire non-performing loans.
Recovery effort is also augmented and result
has been encouraging.
29%
DEPOSITS
Growth in share of call deposits while

reduction in share of current deposits
(including other non-interest bearing
accounts) may be attributed to the rising
interest sensitivity in depositors along with
their attitude of remaining liquid. By and
large, the deposits have remained stable over
these years and the Bank was able to
manage its deposits successfully even during
the volatility and liquidity crisis.
30%
The bank's balance sheet size has increased

robustly from NRs.37.13 billion at 15 July
2008 to NRs.73.24 billion at 15 July 2013.
This is nearly a two-fold increment or an
absolute growth of 97.24% in five years.
The compounded annual growth rate of the
balance sheet size during this period is
14.55%.
34%
BALANCE SHEET SIZE
2009
2010
2011
SHAREHOLDERS FUND
2012
2013
ROE IN %
24
Nabil Bank Limited
DIVIDEND PAYOUT
PARTICULAR
2008/09
2009/10
2010/11
2011/12
2012/13
Earnings Per Share
113.44
83.81
70.67
83.23
95.14
50.00
40.00
0.00
20.00
25.00
42%
48%
Cash Dividend Per Share
35.00
Bonus Share Per Share
Profit Retention Per Share
28.44
Cash Dividend Payout
As obvious from the above table, the Bank

has retained more than 50% of its earnings
during these last 5 years. Growing
businesses and profit may be directly
attributed to the growing shareholder's fund
as its growth gives bank an edge to expand
its businesses by maintaining healthy
capital adequacy ratio. And this relationship
can be established from the fact that the
businesses of Nabil have grown significantly
in these 5 years.
During the year 2012/13, the bank's risk
weighted exposure grew by around
NRs.8,102.28 million, which is 9.23 times
of profit retention of year 2011/12.
Similarly, the RWE in year 2011/12 grew
NRs.6,388.35 million from the last year,
which is 8.77 times of the profit retention
of year 2010/11.
31%
30.00
13.81
36%
DISTRIBUTION OF DIVIDEND
The bank has distributed cash dividend at
the rate of 35%, 30%, 30% and 40% from
profit of financial years ending mid July
2009, 2010, 2011 and 2012 respectively.
Similarly the bank also distributed stock
dividend at the rate of 50%, 40% and 20%
from profit of financial years ending mid
30.00
40.67
40.00
23.23
30.14
42%
July 2009, 2010 and 2012 respectively.

The Board has proposed distribution of
40% cash dividend and 25% stock
dividend out of profit for financial year
2012-13. The bank maintains its position
of enhancing capital base and rewarding
shareholders with fair return as key factors
of long term success.
COMPOUNDED ANNUAL GROWTH RATE

AT MID JULY
40.00
NRs.000
2013
2008
CAGR
Total deposits
63,609,808
31,915,047
14.8%
Gross loans and advances
47,645,530
21,759,460
17.0%
Capital fund (per Basel II)
8,339,251
2,363,599
28.7%
Net fixed assets
872,322
Gross investments (including money at call)

Shareholder's fund (excluding proposed dividend)
17,966,349
6,689,145
598,039
11,918,923
2,437,199
7.8%
8.6%
22.4%
Following table presents the ceiling of

additional risk weighted exposure computed
on the basis of ideal 10% capital adequacy
ratio that the bank can take or could have
taken in subsequent financial year as a
result of profit retention.
EXTRA RISK WEIGHTED EXPOSURE

PARTICULAR
Cash Dividend
Rs. in Million
2008/09
338.01
2009/10
434.74
2010/11
608.93
2011/12
811.91
Net Profit After Tax
1,031.05
1,139.10
1,337.75
1,689.39
Extra Risk Weighted Exposure @ 10%
6,930.42
7,043.62
7,288.15
8,774.84
Profit Retention
693.04
704.36
728.81
877.48
2012/13
974.74
2,218.76
1,244.03
12,440.25
25
02
ANALYSIS OF KEY ITEMS OF

INCOME STATEMENT OF PAST 5 YEARS
PERIOD ENDING MID JULY
1. Interest Income
2. Interest Expense
2013
2012
2011
2010
2009
5,702,123
6,126,855
5,254,030
4,047,726
2,798,486
3,515,938
2,971,364
2,298,600
2,087,618
1,645,206
2,186,185
Net Interest Income
3. Commission and Discount Income
3,155,490
393,051
4. Other Operating Income
366,387
209,905
5. Foreign Exchange Income
201,085
489,051
Total Operating Income
6. Staff Expense
447,070
8. Foreign Exchange Loss
290,855
180,570
276,103
1,960,108
215,482
169,548
291,441
1,153,280
179,693
144,164
251,920
4,607,945
3,985,907
3,046,128
2,764,088
2,220,983
468,781
430,909
401,425
334,186
265,158
646,760
7. Other Operating Expense
2,955,431
500,713
454,042
366,940
339,898
-
Operating Profit before Loan Loss Provision
3,492,404
3,054,285
2,190,661
2,062,962
1,615,927
Operating Profit
3,464,953
2,640,336
2,081,190
1,707,133
1,570,205
24,728
7,101
39,792
10,618
9. Provision for Possible Losses
27,451
10. Non Operating Income /(Expense)
413,949
13,469
11. Provision for Possible Losses Write Back
13,840
109,470
6,981
355,829
6,455
45,722
2,190
Profit from Regular Activities
3,503,149
2,654,176
2,095,273
1,753,379
1,583,013
Profit from All Activities
3,485,695
2,651,139
2,098,421
1,787,701
1,626,534
950,678
720,109
569,733
486,083
447,615
12. Income/(Expense) from Extra-ordinary Activities
(17,454)
13. Provision for Staff Bonus
316,256
14. Provision for Income Tax

Net Profit/(Loss)
NET PROFIT
The banks after tax net profit in the last

five years has been very good both in terms
of volume and growth rate. Annual growth
rate during this period ranged from 10% to
31%. While compounded annual growth
rate achieved during this period is 24.34%.
From volume perspective, the profit in year
2007/08 was mere NRs.746.47 million
which grew tremendously and reached to
NRs.2,218.76 million in year 2012/13.
Nabil's performance in this period could be
regarded as one of the best performances in
the nepalese banking industry.
(3,037)
241,639
2,218,762
1,689,392
38%
31%
26%
17%
10%
2010
2011
190,943
1,337,745
34,322
162,518
1,139,099
43,522
147,867
1,031,053
NET INTEREST INCOME

AND INTEREST RATES
ANNUAL GROWTH RATE

IN NET PROFIT
2009
3,148
2012
2013
Net interest income of the bank has

increased from NRs.1.22 billion at 15 July
2008 to NRs.3.52 billion at 15 July 2013,
recording a compounded annual growth rate
of 23.57% through five years. This is
almost a three-fold increment or an
absolute growth of 188.13%.
As depicted in the adjacent graph, the bank
has maintained fairly a good amount of net
interest margin throughout the period of 5
years. Starting from the financial year
2008-09 through 20012-13, the share of
26
Nabil Bank Limited
Interest spread is primarily guided by the

liquidity conditions in the market. There
had been instances when liquidity crunch
was at its peak. Post real estate bubble,
banks and financial institutions faced stiff
challenge to maintain liquidity ratios.
Interbank interest rates rose as high as
12.83% (January 2010) and banks
competed with each other offering high
rates on deposits. Despite increment in the
cost of deposits, banks had to raise rates on
lending slowly without hurting much on the
borrower's repayment capacity, as
significant jump could have hindered banks'
credit quality. This significantly impacted on
net interest margin in general. However,
Nabil managed its asset liability incredibly
during these periods and was still able to
reap the share of 50% net interest margin
over its total interest revenue. On the latter
half of these 5 years period, the interest
rates subsided tremendously with inflow of
deposits. The government funds also got
frozen due to delay in budget sanctioning as
a result of political impasse. The
disbursement of selective proposals also
continued as banks were quite reluctant to
encourage new business. Interbank rate
hovered below 0.5% most of the time after
year 2010/11 with brief rise to 5.77%
during May 2013. Rates on new T-bills also
slumped below 0.5% mark, the lowest
hitting to 0.15% in September 2012. Due
to the surplus of liquidity, the banks had to
curtail interest rates both ways. Moreover
with limited investment opportunities,
banks and financial institutions had the
challenge of maintaining margin amid
growing idle fund. The reduction in cost of
deposit was not sufficient to compensate
the cost of idle fund. As a result, banks had
to take measured steps while reducing
interest rates on loans and advances. Lower
rate credit schemes emerged quite late
(March - May 2013) that gave respite for a
brief period to raise interest rates to some
extent.
INTERBANK INTEREST (2008 MID JULY TO 2013 MID JULY)
12.83%
5.77%
0.33%
August
September
October
Novembe
December
January
February
March
April
May
June
July
August
September
October
November
December
January
February
March
April
May
June
July
August
September
October
November
December
January
February
March
April
May
June
July
August
September
October
November
December
January
February
March
April
May
June
July
August
September
October
November
December
January
February
March
April
May
June
July
net interest margin over total interest

revenue for each of the five years is 59%,
52%, 44%, 48% and 62% respectively.
08-09
09/10
10/11
11/12
12/13
Source: Macroeconomic Statistics prepared by Nepal Rastra Bank
FEES, COMMISSION
AND OTHER INCOME
INTEREST EARNING TREND

59%
52%
44%
48%
2,971
2,299
62%
3,516
2,090
2,955
1,645
3,155
2,186
1,960
1,153
2009
2010
INTEREST EXPENSE
2011
2012
2013
NET INTEREST INCOME
Considering the conditions that have

prevailed in these 5 years, the rising volume
of net interest income of Nabil could be
regarded as remarkable. With
implementation of regulatory requirements
for limiting LCY interest spreads to 5%
recently, the shrinking of net interest
income in the days ahead is quite obvious,
which could hinder profitability significantly
thereby pressurizing financial institutions to
enhance their credit volumes which perhaps
would not be in favour of banking industry
at the moment.
The income under these headings during

2012/13 has increased by NRs.349 million
in comparison to that of year 2008-09
posting an absolute growth of 137.68%.
The compounded annual growth rate during
this period is 18.90%.
One of the key focus areas has been to
increase the contribution of non-interest
income in the bottom line performance.
Accordingly the bank has been expanding
its fee income streams by further
augmenting on existing avenues and
offering new products. Income from letter of
credit, bank guarantee, remittance, cards
and loan management has been important
contributors of growth. Similarly, new
avenues like bullion, insurance and
electronic channels have also shown
encouraging signs for the future.
FOREIGN EXCHANGE INCOME
The bank's foreign exchange earning has

increased to NRs.489 million in the year
2012/13 from NRs.196 million in year
2008/09, recording a growth of 148.90%.
The compounded annual growth rate
achieved during this period is 20.01%. The
27
bank has been running its treasury

operations efficiently, ideally capitalizing on
favorable correspondent banking
relationships, tapping market opportunities
and offering innovative treasury services to
its clients.
STAFF EXPENSE
The bank's staff expense has increased to

NRs.647 million in the year 2012/13 from
NRs.263 million in year 2008/09,
recording a sizable growth of 146.0%. The
compounded annual growth rate posted
during this period is 19.73%. The
increased HR workforce due to expansion of
business, promotions and rise in pay /
benefits due to annual appraisal and biannual collective bargaining have been the
major causes for the rise in staff costs.
In addition, the employees have also been
benefited of good amount of bonus. Total
staff bonus which was provisioned NRs.109
million in year 2008/09 years has now
risen to NRs.316 million for the financial
year 2012-13, recording a compounded
annual growth rate of 23.77%.
OTHER OPERATING EXPENSE
In financial year 2012-13, the expense

under this head has increased to NRs.469
Million from NRs.221 Million incurred in
year 2008/09, recording a growth of
112.36%. The compounded annual growth
rate posted during this period is 16.26%.
Managing operating expense is one of the
important aspects for long term
sustainability. The bank has implemented
rigorous process for expense authorization
which includes budgetary planning,
monitoring and variance reporting, and
centralized expense approval structure. The
expense growth is at normal level and
driven by mainly by business expansion and
inflation.
COMPOUNDED ANNUAL GROWTH RATE OF

MAJOR INCOME STATEMENT ITEMS:
Operating Income
- Net Interest Income
- Fees, Commission and Other

- Foreign Exchange
Operating Expense
- Staff
- Other Operating
Net profit after tax
NRs.000
2013
2008
CAGR
4,607,945
1,670,427
22%
602,956
253,679
19%
3,515,938
1,220,261
489,051
24%
196,487
20%
1,115,541
483,658
18%
468,781
220,751
16%
646,760
262,908
2,218,762
COST TO INCOME RATIO
This is the ratio of gross cost of operation to

gross income from operation. Years
2008/09 through 2010/11 was the period
when Nabil expanded its businesses.
Number of branches / extension counters
grew to 48 from 28, ATM grew to 68 from
32 and number of permanent staffs grew to
657 from 416. As expansion was on initial
days the operating leverage was below than
optimum and obviously cost to income ratio
grew steadily. Apart from this, the rising
demand of deposits to maintain the liquidity
ratios while tightening of credit due to fall
out of real estate also contributed for rising
interest costs while slowing growth rates of
net interest income to some extent.
Post 2010/11, the bank witnessed steady
improvement in cost to income ratio. The
improvement may be attributed to better
net interest margin in years 2011/12 and
2012/13 through better use of resources
and infrastructure. Moreover, the bank has
always maintained its position towards
generating non-interest income in excess of
its non-interest expenses every year. During
the last five years, the compounded annual
growth rate of non-interest income and noninterest expenses were 19.39% and
18.19% respectively.
20%
746,468
24%
COST TO INCOME RATIO

63%
57%
56%
52%
49%
2009
2010
2011
2012
2013
28
Nabil Bank Limited
02
ACHIEVEMENTS OF CURRENT YEAR
The bank has implemented three years strategic plan beginning with financial year 2012-13. By and large,
the performance of the bank has been satisfactory both in terms of top-line as well as bottom-line.
DEPOSITS AND LOANS
satisfactory level. In tandem with the lending

growth, the credit risk assets have also
grown by 14% to reach NRs.57.19 billion
from last year's NRs.50.02 billion.
On average basis, the total loans have grown
by NRs.3.1 billion mainly due to growth of
business loans (by NRs.3.7 billion). The
average volume of retail loans however
observed reduction of NRs.559 million.
The deposits and loans have grown by

NRs.8.59 billion and NRs.4.78 billion
respectively achieving growth of 16% and
11% respectively. These growth rates are
slightly behind the national average achieved
as 18% and 22% respectively.
The growth of lending lagging behind the
national average may be attributed to the
bank's cautious approach towards booking
additional risk assets such that portfolio
quality and yield are maintained at the
In the deposit segment, the growth is mainly

on interest free deposits posting growth of
13.9%, savings posting growth of 29.7%

and calls posting growth of 35.1%. Fixed
deposit in contrast recorded decline this year
with negative growth of 23.2%. On average
basis, the total deposits have grown by
NRs.4.2 billion mainly due to the growth of
saving deposits. The savings, call and
current (including margin and matured
deposits) have grown by NRs.5.2 billion,
NRs.2.2 billion and NRs.1.1 billion
respectively, while fixed deposits registered
decline of NRs.4.2 billion.
DETAILS OF LOANS AND THEIR YIELD:

NRs.000
VOLUME*
2013
INTEREST
YIELD
VOLUME*
2012
INTEREST
YIELD
Business Loan
35,354,284
3,953,057
11.18%
31,667,188
3,955,901
12.49%
Total
44,832,762
5,180,425
11.55%
41,705,600
5,315,822
12.75%
Retail Loan
9,478,478
*Volume in this table represents daily outstanding average volume.
1,227,368
12.95%
10,038,411
1,359,921
The deposits and loans
8.59 billion
and NRs.4.78 billion respectively
have grown by NRs.
13.55%
29
DETAILS OF AVERAGE VOLUME OF DEPOSITS AND THEIR COSTS ARE PRESENTED AS UNDER:
LCY
Current Accounts
Savings Accounts
VOLUME*
2013
INTEREST
COST
VOLUME*
2012
INTEREST
COST
5,901,938
0.00%
5,114,570
0.00%
19,203,360
692,442
Fixed Accounts
10,878,834
872,138
Total LCY Accounts
49,880,373
2,080,078
Call Accounts
FCY
Current Accounts
13,896,241
1,704,459
Savings Accounts
1,650,258
Call Accounts
3,672,869
Fixed Accounts
Total FCY Accounts

Total LCY and FCY
NRs.000
1,422,844
8,450,430
58,330,803
3.61%
14,432,096
596,273
4.13%
15,104,746
1,629,839
10.79%
4.17%
46,745,109
3,051,495
6.53%
0.00%
1,438,935
0.00%
15,083
1.06%
1,431,998
24,912
1.74%
56,632
0.67%
69,560
0.95%
515,498
7,774
33,775
2,136,710
8.02%
3.71%
0.47%
0.92%
3.66%
12,093,697
1,221,511
3,263,823
7,356,267
54,101,376
825,383
7,982
36,666
3,121,055
6.82%
0.65%
1.12%
5.77%
*Volume in this table represents daily outstanding average volume
INVESTMENTS
The investments (including money at call)

grew by around NRs.3.1 billion registering
growth of 21% in comparison to last year.
The growth rate achieved by the bank is
higher than the national average (of
commercial banks) which posted a growth
of 19%. The growth in volume of
investments of entire commercial banks for
the year is NRs.35.2 billion. Considering
the bank's cautious approach towards credit
and amid lack of investment opportunities
owing to reluctance of business
communities towards venturing on new
projects, the bank has made efforts to

manage its idle funds through investments
in government securities and placements
despite lower yield.
On average basis, the total investments
have grown by NRs.2.0 billion which is
mainly contributed by FCY placements
(NRs.1.2 billion). The development bonds
(Nepal Government Bonds) and treasury
bills registered average volume growth of
NRs.733 million and NRs.174 million
respectively while other LCY investments
registered reduction of NRs.66 million.
Despite overall volume growth, the

replenishment of high yielding development
bonds after their maturity during the review
year by the low yielding bonds has caused
reduction in overall yield by 70 basis
points. Similarly, lower T-bill rates sustained
from second half of the last financial year
through the review year has contributed on
realizing lower yield of 1.7% as against
7.45% achieved during last year. The
cumulative effect of reduced yield on every
front has affected on overall reduction of
yield to 2.97% from 5.23% achieved last
year.
30
Nabil Bank Limited
INVESTMENTS
NRs.000
Nepal Government Bonds
Nepal Government T Bills
Other Investments - LCY #
Other Investments - FCY #

Total
VOLUME*
2013
INTEREST
3,434,354
225,271
5,714,261
117,208
17,544,558
NET INTEREST INCOME
The net interest income posted healthy

growth rate of 18.3% during the review
period. The growth was achieved mainly
due to reduction in cost of resources though
there was also reduction in yield on assets.
The bank's weighted average cost of
resources decreased by 207 basis points
from 5.74% to 3.67%. While the cost of
borrowing remained at more or less same
level with slight reduction (to 3.81% from
3.89%) during the review period; the cost
of deposits fell by 211 basis points to
remain at 3.66% from 5.77%. The decline
in cost of deposits has positively
contributed on reduction of total interest
expense by 31.54%, despite growth of
average deposit volume by 7.82%. The
growth of interest expenses of commercial
banks also fell into negative zone posting
decline of 11.88% amid growth in volume
by 17.62% in comparison to last year.
The declining costs of deposits was affected
largely due to liquidity condition. The entire
financial system remained flush in most of
the periods of review year with some
tightness during 7th through 10th month.
After a sustained period of liquidity
abundance, the banks started launching
newer and attractive credit schemes
specially on retail front in order to ease out
idle funds. However, due to the growth of
deposits outperforming the growth of credit,
the interbank rates soon fell below 1%
again. As per monthly statistics published
by Statistics Division of NRB for Mid July
2013 (Ashad end, 2070) the deposits of
6.56%
2012
INTEREST
VOLUME*
2,700,713
YIELD
196,063
7.26%
99,131
1.73%
5,540,180
412,618
7.45%
194,641
2.35%
7,071,386
193,761
2.74%
2,655
8,278,734
*Volume in this table represents daily average volume
YIELD
2.27%
521,698
2.97%
183,826
8,591
15,496,105
4.67%
811,033
5.23%
# excludes equity investments and dividend income
COST OF RESOURCES
NRs.000
Aggregate volume of interest

bearing liabilities
- average deposits
2013
2012
CHANGES
59,630,912
54,985,995
8.45%
1,300,108
884,621
46.97%
58,330,805
- average borrowings
Interest expense on liabilities

- on deposits
54,101,374
2,186,185
3,155,490
49,476
34,435
2,136,709
- on borrowings
Weighted Average Cost
3.66%
- cost of borrowing
-30.72%
3,121,055
3.67%
- cost of deposit
7.82%
-31.54%
43.68%
5.74%
-36.11%
3.89%
-2.24%
5.77%
3.81%
-36.50%
MONTHLY WEIGHTED AVERAGE INTER BANK RATE - PRIME IN YEAR 2012 - 13

6.72%
4.32%
0.35%
0.30% 0.36% 0.54% 0.54%
4.44%
3.62%
1.00%
0.58%
0.72%
banks and financial institutions climbed to

NRs.1,250 billion as against NRs.1,147
billion in Mid May 2013 while the credit of
10
11
12
banks and FIs surged nominally to reached

NRs.956 billion in Mid July 2013 from
NRs.924 billion in Mid May 2013.
31
Taking stock of liquidity flush, the

management decided to shed off high cost
deposits and prioritized on expanding low
cost current and savings deposit base.
Consequently, bank's deposit mix with low
cost deposits improved by the year-end.
Current and savings segment registered a
growth of 25.09%, thereby increasing its
share to 50% of total deposit. More volatile
call deposit segment also witnessed a
growth of 35.1% as large number of
institutional clients chose to increase their
business with the bank, despite reduction in
interest rate. On the other hand with
downward revision in fixed deposit rates
and maturity of existing higher coupon
deposits, this segment registered a decline
of 23.2%. These all contributed on saving
of interest expense to large extent by around
30.7% (in amount NRs.969 million).
The effects of liquidity remained on the
earning side, though the rate of reduction
was not as severe as on the cost side. The
yield on interest earning assets reduced by
157 basis points while the average volume
of earning assets increased by 9.05%.
Demand of fresh credit from the business
communities was low while bank also
discouraged disbursing credits on
unproductive sector. The bank in essence
looked towards strengthening its existing
portfolio and encouraged low risk profile
credit proposals.
FEES, COMMISSION AND

OTHER OPERATING INCOME
The bank's fees, commission and other

operating income grew satisfactorily posting
overall growth of 6.3%. The major
contributors of this growth are guarantee
commission, LC commission, remittance
commission and remittance commission
(including remittance rebate). The fee
income under loan management, insurance
agency and bullion trade have however
witnessed decline this year. The bank has
given more focus on enhancing non-interest
income by tapping income potentials on
non-funded exposures.
MONTHLY INTER BANK TRANSACTION VOLUME - PRIME

NRs. in Million
8600
7040
5764
4603
3390
2285
80
1860
1490
1100
640
10
11
YIELD ON EARNING ASSETS
- average loan and advances

- average investments
Interest Income on earning assets

- on loans and advances
- on investments
Weighted Average Yield
2013
2012
CHANGES
62,377,320
57,201,704
9.05%
17,544,558
15,496,105
13.22%
44,832,762
41,705,600
5,702,123
-6.93%
5,315,822
521,698
-2.55%
811,033
9.14%
11.55%
- yield on investments
7.50%
6,126,855
5,180,425
- yield on loans and advances
-35.67%
10.71%
-14.65%
5.23%
-43.19%
12.75%
2.97%
-9.34%
FEES, COMMISSION AND OTHER OPERATING INCOME

Total Fees, Commission and Other Income

Major areas:
- Guarantee
- Remittance
- Letter of Credit
- Insurance Agency
- Loan Management
- Cards Commission
- Remittance Rebate
- Bullion Commission
- Communication Fees
- Cards Issuance and Renewal

- Other income
12
NRs.000
Aggregate volume of interest earning assets
1720
NRs.000
2013
2012
602,956
567,472
72,269
82,430
60,880
11,180
118,710
114,088
40,701
15,631
15,141
30,523
41,402
CHANGES
AMOUNT
35,484
6.3%
7,763
12.0%
54,675
6,205
11.3%
118,921
(211)
-0.2%
33,278
7,423
22.3%
13,367
1,774
13.3%
24,452
16,950
69.3%
64,505
76,322
11,975
113,690
15,792
29,740
6,108
(795)
398
(161)
783
8.0%
-6.6%
0.4%
-1.0%
2.6%
32
Nabil Bank Limited
In the last few years, there has been

significant rise in the foreign exchange
income. The bank achieved an overall growth
rate of 9.4% mainly due to growth under
trading (18.4%) while it faced decline under
revaluation (16.7%). The achievement may
be considered satisfactory amid high volatility
in exchange rates observed during the second
half of the financial year. The uncertainty of
US dollar rates vis--vis INR led the bank not
to take exposure and consequently the bank
could not achieve growth under revaluation it
may have desired.
Last year (2011-12), the foreign exchange
earnings grew significantly by 61.9%
(79.5% in revaluation and 56.6% in
trading) over the previous year's figures and
the rise was attributed to the earnings
through NDF that it started in that year.
NON OPERATING INCOME
The bank observed decline under this head

mainly due to the loss the bank incurred on
the disposal of low yielding treasury bills
during Mid February through early March
2013. Besides that the bank registered
growth on dividend earning by 23.9%
despite refund of dividend of NRs.6.2
million to Rural Microfinance Development
Centre (RMDC). Similarly it registered
growth on sale of fixed assets by 135.3%.
STAFF EXPENSE
The staff expense grew by 29.2% during

the review year totaling NRs.647 million
from NRs.501 million last year which may
be attributed mainly to rise in pay following
collective bargaining on all levels,
promotion on different levels and
recruitment of 100 staffs in assistant level.
The impact of rise in pay and promotion
significantly impacted salary, allowance and
PF registering growth of NRs.58 million
(15.3%); gratuity provision registering
growth of NRs.55 million (114%) and leave
expenses registering growth of 17 million
(55.1%). Furthermore, the booking of
uniform expenses distributed biennially also
contributed on the growth of staff expense.

Total exchange income

- Trading income
- Revaluation income
NRs.000
2013
2012
489,051
447,070
41,981
95,691
114,933
(19,242)
393,360
332,138
CHANGES
AMOUNT
61,223
NON OPERATING INCOME

Total non operating income / (loss)

- dividend income
- on sale of investment
- on sale of fixed assets
Total staff expense

Major areas:
- Training expense
- Uniform allowance
- Dashain allowance
9.4%
18.4%
-16.7%
NRs.000
2013
2012
13,469
13,840
20,588
(8,102)
983
16,619
-
(2,780)
CHANGES
AMOUNT
(371)
3,969
(8,102)
3,762
STAFF EXPENSE
-2.7%
23.9%
-100.0%
135.3%
NRs.000
2013
2012
646,760
500,713
8,737
8,935
14,562
25,337
CHANGES
AMOUNT
146,047
(197)
29.2%
-2.2%
14,562
100.0%
25,455
(118)
-0.5%
- Gratuity and Pension
103,919
48,570
55,349
114.0%
- Salary, allowance, provident fund
435,623
377,680
57,943
15.3%
- Leave provision / encashment

- Other employee benefits
48,409
10,173
31,212
8,861
17,197
1,312
55.1%
14.8%
The bank achieved

an overall growth rate of
9.4% in foreign exchange.
33
The operating expense of the Bank grew by

NRs.38 million (8.8%) during the review
year mainly due to rise in deposit insurance
premium (NRs.14 million; 1,145%), fuel
and lubricants (NRs.8.5 million; 33.6%),
house rent (NRs.6.1 million; 11.1%),
consultancy service fees (NRs.3.8 million;
15.1%) and communication expenses
(NRs.3.6 million; 14.4%). Owing to
national consumer price index of 10% on
non-food and services, the growth rate of
other operating expenses may be deemed
reasonable. In fact, the growth of deposit
insurance was due to the payment of two
installments of semi-annual insurance
premiums, which was actually implemented
only during the second half of last year and
accordingly had paid only one installment
for that year.
PROVISION FOR
POSSIBLE LOSSES
Booking of loss provision saw significant

turnaround during the review year as the
bank wrote back significant amount of loss
provision on loans set aside for some big
accounts during earlier financial years.
Consequently, current year's incremental net
loss provision on loans was mere NRs.13
million. In addition, due to the improvement
in price of ICICI bond (denominated in US$)
the bank wrote-back loss provision by
around NRs.12 million. The cumulative
impact of both incremental provision on
loans and write back of provisions on
investments is incremental NRs.2.7 million.
INCOME / (EXPENSE) FROM

EXTRA ORDINARY ACTIVITIES
The bank witnessed significant rise in

expense (by 474.7%) under this head due
mainly to increment in bad loan write-off
(by 826.1%) in comparison to last year.
Moreover, it also recorded decline in
recovery from written off accounts (by
37.7%) in comparison to last year.

Total operating expense

Major areas:
- House rent
- Security service
- Contract service
- Asset insurance
NRs.000
2013
2012
468,781
430,909
37,872
8.8%
54,798
6,081
11.1%
10,969
264
60,879
38,895
11,232
10,306
- Deposit insurance
15,279
- Water and electricity
15,969
- Fuel and lubricants
- Printing and stationery
- Postage, telephone, fax
- Repair and maintenance
- Consultancy service fees
- Fixed assets depreciation

- Other expenses
33,622
21,398
28,855
16,603
29,169
123,904
62,672
39,833
9,679
CHANGES
AMOUNT
(939)
627
Total provision expense
- on loan impairment
- on investment impairment (net)
- on other assets
Net expense
- loan written off expense
- recovery from written off loan

- voluntary retirement scheme
- others
2.4%
6.5%
14,051
1144.8%
14,359
1,610
11.2%
25,221
3,634
14.4%
25,336
3,832
15.1%
6,851
12.3%
21,184
16,795
130,516
55,821
8,451
214
(192)
(6,612)
33.6%
1.0%
-1.1%
-5.1%
NRs.000
2013
2012
2,723
413,949
(411,226)
99.3%
(11,525)
23,254
(34,779)
149.6%
13,610
639
390,695
-
CHANGES
AMOUNT
(377,085)
639
INCOME / (EXPENSE) FROM EXTRA ORDINARY ACTIVITIES

-2.4%
1,227
25,171
PROVISION FOR POSSIBLE LOSSES

2012
(17,454)
(3,037)
(14,417)
10,442
16,771
(6,329)
(53)
(3,006)
(11,717)
(5,084)
96.5%
-100.0%
NRs.000
2013
(27,843)
CHANGES
AMOUNT
(24,837)
11,717
5,031
-474.7%
-826.1%
-37.7%
100.0%
99.0%
34
Nabil Bank Limited
DETAILS OF LOANS
WRITTEN-OFF
In line with bank's Loan Write-off Policy and

NRB Unified Directive, it has written off
NRs.42 million pertaining to business loans
and consumer loans during the review year.
Total written-off amount include interest of
NRs.14 million. In contrast, the bank has
been able to recover NRs.10 million that
include interest of NRs.2.1 million. With
this, the bank still has to recover NRs.398
million (including interest of NRs.164
million) from the written off accounts. As of
balance sheet date, it has relinquished
rights of recovery on loan accounts of
NRs.54.8 million.
DETAILS OF LOANS WRITTEN-OFF
Total loan written off (A)
- written off in FY 2012-13
- written off till FY 2011-12
Total recovery from written off loan (B)

- recovered in FY 2012-13
- recovered till FY 2011-12
Net not recovered portion (A-B)

- book write off
- actual write off *
Recovery ratio (on total write-off amount)
NRs.000
PRINCIPAL
INTEREST
TOTAL
706,762
281,220
987,983
678,919
266,472
945,391
27,843
14,748
42,592
(456,434)
(77,819)
(534,253)
(448,112)
(75,699)
(523,811)
234,318
164,604
398,923
64.6%
27.7%
54.1%
(8,322)
250,328
16,010
(2,120)
203,401
38,797
* The bank has relinquished its recovery rights in view of remote possibility of loan recovery.
NET PROFIT, INCOME TAX

AND STAFF BONUS
The impact of growth under various income

heads and decline particularly of loss
provisions has enabled bank to achieve
notable profit figure. The net profit after tax
for the review year 2012/13 is NRs.2.22
billion registering growth of 31.3% in
comparison to last year. The achievement of
Nabil is second highest among 31
commercial banks as per published
unaudited financials. Similarly, the bank's
operating results (operating profit before
provision) is NRs.3.49 billion recording
growth of 14.3% and is highest in the
banking industry.
The income tax provision and staff bonus
also recorded good growths reaching
NRs.946.89 million and NRs.316.26
million from NRs.728.30 million and
NRs.241.64 million of last year
respectively. The provision of income tax
and staff bonus by the Bank is also the
highest in the banking industry.
The bank's operating

results is
NRs.
3.49 billion
recording growth
of
14.3% and
is highest in the
banking industry.
(10,442)
453,730
54,807
35
02
VALUE ADDITION
Nabil, along with its stakeholders, created

the value of NRs.4.28 billion during the
review financial year, a growth of
NRs.544.16 million (14.5%) against the
last financial year. Value addition from the
financial intermediation occupied 74.5% of
total value addition while the financial
services occupied 25.5% of the total value
addition.
The value created during the review
financial year has been applied in the
interests of all stakeholders. While applying
the value to the stakeholders, the Bank has
addressed the interests of its stakeholders
in a reasonable manner by prioritizing the
long term interests of its business.
Around 22.5% of the total value is applied
to employees in the form of employees
benefits and bonuses in lieu of the services
rendered while around 22.2% is applied to
the Government towards payment of
TOTAL VALUE ADDITION
NRs.000
2013
Interest Income
5,702,123
Interest Expense
Operating Cost
Other Income from financial intermediation
2012
6,133,739
(431,616)
(308,951)
(70,942)
(2,160,685)
(3,129,990)
31,030
33,390
(379,893)
CHANGES
AMOUNT
-7.0%
969,306
-31.0%
23.0%
(2,360)
-7.1%
Value addition from financial intermediation
3,192,575
2,728,188
464,387
17.0%
Total Value Addition
4,284,581
3,740,418
544,163
14.5%
Income from financial services
1,092,007
corporate tax (current tax and prior period

tax). The share of corporate tax
demonstrates the significance of Banks
contribution towards the development of the
nation. Similarly, around 22.7% of the total
value has been applied towards the
investors in the form of dividend. Bank, in
order to maintain and extend its business
for long term sustainability, retained around
31.9% of the total value created.
1,012,231
79,776
7.9%
The growth of 20.1% of the total value

applied towards the investors reveals the fact
that the Bank is capable of providing
reasonable return and also maintains and
meets enthusiasm and expectation of the
shareholders. Slight reduction of 3.7% on
application towards the business expansion
and maintenance is mainly due to lower
booking of provision for possible losses
during the review year in comparison to last
financial year.
APPLICATION OF VALUE ADDITION:

To Employee
To Governments
To Long term Financier

To Investor
To Provide for maintenance and expansion

- Depreciation and Amortisation
- Provision for Loan and Investment Loss

- Deferred Tax
- Capital / Retained Earning / Reserves
Total Value Addition
NRs.000
AMOUNT
963,015
952,677
25,500
2013
SHARE %
AMOUNT
22.5%
754,069
22.2%
0.6%
974,737
22.7%
123,904
2.9%
1,368,653
2,723
(1,999)
1,244,025
4,284,581
728,302
25,500
20.2%
208,947
19.5%
0.7%
130,516
3.5%
0.1%
413,949
29.0%
AMOUNT
21.7%
1,420,640
100.0%
SHARE %
811,908
31.9%
0.0%
2012
(8,193)
884,368
3,740,418
224,375
30.8%
0.0%
(6,612)
-5.1%
11.1%
(411,225)
23.6%
27.7%
20.1%
(51,987)
100.0%
162,829
38.0%
-0.2%
CHANGES
6,194
359,657
544,163
-3.7%
-99.3%
-75.6%
40.7%
14.5%
36
Nabil Bank Limited
02
SEGMENTAL PERFORMANCE OF THE BANK
For the purpose of assessing segmental

performance the bank has identified
business segment as its primary segment
and geographical segment as its secondary
segment.
does not predominantly affect the banks

business risks and its pricing strategies. The
bank takes account of social, economic and
political factors while assessing the impact
of geographic location in its businesses.
By their nature, the different businesses

carried by the bank can be grouped into
distinct business segments. Product
portfolio under each of these segments has
noticeable variations in their nature and
also in terms of the involved risk and
reward. As such this segmentation
predominantly affects the banks business
risks and its pricing strategies.
PRIMARY SEGMENT
Branches and business units can also be

grouped into distinct geographic segments
based on their location. However, this factor
The bank has identified four primary

segments based on the nature of business
operations viz. Banking, Treasury, Cards
and Others. Each of these business
segments has a contribution ratio of 74.1%,
17.8%, 3.6% and 4.5% respectively in the
overall net profit of the bank for year ending
mid July 2013. Detail segmental
performance is set out in the table below.
The Bank's business is mainly concentrated
in "Banking" segment. The core business of
deposit mobilization and lending activities

along with other auxiliary banking services
apart from card operations, treasury
operations and other businesses are
reported under the Banking segment.
Treasury segment comprise of entire
treasury operations including the bank's
investment portfolio, foreign currency
transactions and overall fund management.
Card segment comprise of all card related
operations including debit and credit card
issuance, merchant relationships, ebanking, m-banking and ATM management.
Others segment comprise of bancassurance
business and bullion operations. Interest
earnings and foreign exchange gains/losses
generated while conducting businesses
under distinct segments are presented
under related segment.
PRIMARY BUSINESS SEGMENT
NRs.000
BANKING
TREASURY
7,317,474
2,498,884
117,064
316,413
Total Revenue
7,847,161
2,839,045
Interest Expense (Including Transfer Pricing)
4,097,106
2,217,836
523,232
5,022
192,579
Revenue
Interest Income (Including Transfer Pricing)

Fee Income
Forex Income
Non Operating Income

Expense
Staff Expense
Operating Expense
Provision for possible Loss

Non Operating Expense
Total Expense
Segment Result
Staff Bonus
409,891
2,733
613,153
TOTAL
9,835,938
29,550
489,051
295,307
152,199
10,736
7,050
(12,262)
5,265,480
2,217,646
2,581,681
19,580
OTHERS
13,012
14,536
17,454
CARDS
621,399
26,025
340,912
5,058
11,208,867
6,320,000
15,402
736,235
10,332
450
126,600
13,469
181,749
16,225
214,312
870,409
25,734
156,015
646,760
2,723
17,454
7,723,172
3,485,695
316,256
Profit before Tax
3,169,439
Net Profit for the Year
2,218,762
Income Tax
% Share
950,678
74.1
17.8
3.6
4.5
100.0
37
SECONDARY SEGMENT
The bank has identified five secondary

segments based on the geographic locations
of its business viz. Eastern, Central,
Western, Mid-Western and Far-Western. For
year ending mid July 2012 each of these
geographical segments has a contribution
ratio of 10.5%, 79.4%, 5.9%, 2.5% and
SECONDARY GEOGRAPHIC SEGMENT

Revenue
Interest Income (Including Transfer Pricing)

Fee Income
Forex Income
Non Operating Income
1.8% respectively in the overall net profit of

the bank. Detail segmental performance is
set out in the table below.
located in a particular development region

are grouped together. As set out in the table
below, Central region has the largest
contribution in overall profitability of the
bank. All strategic business units are located
in the Central region and it has the highest
number of branch offices in comparison to
other geographic regions.
This regional segmentation follows the name

of five development regions of the county.
For segmentation purpose, all business
transactions of offices and business units
NRs.000
EASTERN
CENTRAL
WESTERN
MID WESTERN
FAR WESTERN
724,505
8,454,761
411,162
153,281
92,230
9,835,938
11,050
470,732
4,559
1,708
1,002
489,051
47,211
771,468
13,469
31,009
-
10,421
TOTAL
10,301
-
870,409
13,469
Total Revenue
782,766
9,710,430
446,730
165,409
103,532
11,208,867
Interest Expense (Including Transfer Pricing)
324,553
5,760,781
159,844
51,232
23,591
6,320,000
45,610
623,523
41,707
15,171
10,223
736,235
Expense
Staff Expense
Operating Expense
Provision for possible Loss
Non Operating Expense

Total Expense
Segment Result
41,465
6,439
-
418,067
364,698
Staff Bonus
547,420
(6,506)
17,454
6,942,671
2,767,759
37,648
12,976
3,048
(1,253)
242,248
78,126
204,482
87,283
7,251
994
42,059
61,473
646,760
2,723
17,454
7,723,172
3,485,695
316,256
Profit before Tax
3,169,439
Net Profit for the Year
2,218,762
Income Tax
% Share
950,678
10.5
79.4
5.9
2.5
1.8
Central region has

the
largest contribution
in overall profitability of the bank.
100.0
38
Nabil Bank Limited
02
INTERIM POSITION AND PERFORMANCE (UNAUDITED)
INTERIM FINANCIAL POSITION
During the year under review, amid liquidity

flush and limited opportunities for quality
investments, the bank took cautious steps
towards deposit mobilization. Proactive
strategies taken by the bank in deposit
mobilization front played a significant role
in framing the banks financial position and
performance throughout the year.
The quarter to quarter growth rate in

balance sheet size was recorded at 8.1%, 0.8%, -2.4% and 10.4% respectively in the
1st, 2nd, 3rd and 4th quarters of the year.
These corresponded to absolute change in
volume of NRs. 4,465 million, NRs. 493
million negative, NRs. 1,398 million
negative and NRs.6,012 million
respectively during these quarters.
INTERIM FINANCIAL POSITION

AT QUARTER ENDING
Capital and Liabilities

Paid up capital
Reserve and surplus
Debenture and bond
Borrowings
Deposits
- domestic currency
- foreign currency
Income tax liability
Other liabilities
Total
Assets
Cash and bank balance
Money at call and short notice
Investments
Loans and advances
- Real estate loan
- Home loan (upto 100 Million)

- Margin loan
- Term loan
- Working capital loan

- Others loan
Fixed assets
Non banking assets
Other assets
Total
In the absence of political stability, business

sentiment continued to be on the lower side
throughout the year. Consequently major
additional investments in production and
infrastructure sectors as well as sectors
identified as new ones under government
policies could not accelerate at desired
pace. The bank moved along cautiously
while entertaining new credit proposals.
The focus remained towards business
consolidation, risk reduction and product
pricing that continued from last year.
NRs.in Million
MID OCT 12
Q1
MID JAN 13
Q2
MID APR 13
Q3
MID JUL 13
Q4
2,436
2,437
2,437
2,437
300
300
300
300
3,605
-
4,121
2,925
59,489
58,996
8,702
7,753
50,787
247
3,956
70,033
4,536
1,450
57,598
63,610
8,355
9,332
51,243
49,243
119
34
3,511
5,225
3,500
54,278
67
2,892
72,409
69,854
3,553
4,452
17,650
18,698
16,701
16,348
4,633
4,722
4,371
4,436
6,029
976
42,417
2,465
-
6,434
1,927
45,455
2,576
-
6,582
942
45,100
2,753
-
6,432
74,531
5,883
1,634
47,646
3,270
-
6,948
22,402
24,897
24,247
24,555
870
863
876
872
6,484
-
2,090
70,033
6,678
-
1,912
72,409
7,297
-
1,783
69,854
8,436
-
2,148
74,531
39
INTERIM FINANCIAL
PERFORMANCE
Amid liquidity flush scenario, interest rate

on bank deposits across the industry
witnessed a continuous decline throughout
the year. The bank's interest expense also
decreased, thereby reducing the overall cost
of fund and increasing net interest spread.
Weighted average interest spread for the
year increased to 5.48% level from 4.95%
level in the previous year.
The quarter to quarter growth rate in net
interest income was recorded at -8.9%,
7.2%, 0.2% and 14.9% respectively in the
1st, 2nd, 3rd and 4th quarters of the year.

These corresponded to absolute change in
net interest income of NRs.78.6 million
negative, NRs.58 million, NRs.2 million
and NRs.129 million respectively during
these quarters. Total net interest income for
the year was recorded at 18.1% or
NRs.537.7 million higher than that of
previous year.
Apart from interest earnings, improvement
under headings like possible loss
provisioning, foreign exchange gains and
other operating income enabled the bank to
post year end net profit at a level
significantly higher than that of previous
year. Significant net write back of loss

provisions by NRs.119 million and
NRs.173 million was made during the 1st
and 4th quarters.
Quarterly net profit after tax increased at
0.1%, -11.1%, -19.5% and 63.7%
respectively in each of 1st, 2nd, 3rd and
4th quarters respectively. These
corresponded to absolute change in net
profit after tax of NRs.0.7 million,
NRs.65.7 million negative, NRs.102.0
million negative and NRs.268.4 million
respectively. Year end net profit after tax
was recorded at 31.6% or NRs.533.9
million higher than that of previous year.
INTERIM FINANCIAL PERFORMANCE

FOR QUARTER ENDING
Interest Income
Interest Expense
Net Interest Income
Fees,Commission and Discount

Other Operating Income
Foreign Exchange Gain
NRs.in Million
MID OCT 12
Q1
MID JAN 13
Q2
MID APR 13
Q3
MID JUL 13
Q4
TOTAL
1,435
1,390
1,380
1,497
5,702
802
860
862
991
(632)
116
40
106
(530)
117
29
124
(518)
100
32
113
(507)
(2,186)
60
393
109
147
3,516
210
489
1,064
1,130
1,107
1,307
4,608
Other Operating Expenses
(115)
(107)
(116)
(131)
(469)
Staff Expenses
Operating Profit Before Provision

Provision for Possible Losses
Operating Profit
Non Operating Income / (Expenses)
Write Back of Provision for Possible Loss
(145)
804
(123)
900
(122)
869
(256)
920
3,492
907
3,000
(163)
(91)
(226)
(12)
(1)
16
641
282
809
12
643
11
(647)
185
(493)
18
491
925
821
653
1,109
3,508
Profit before Bonus and Taxes
925
822
659
1,085
3,491
(178)
(297)
(951)
Extra Ordinary Income / (Expenses)

Provision for Staff Bonus
Provision for Tax

Net Profit
(84)
(252)
589
(75)
(224)
523
(60)
421
(24)
(98)
690
(17)
(317)
2,223
40
Nabil Bank Limited
02
GENERAL OVERVIEW OF NABIL INVEST
Nabil Investment Banking Ltd. (Nabil

Invest in short), a subsidiary of Nabil Bank,
was incorporated on 07th of February 2010
as a public limited company as per the
Companies Act 2006. It is a Merchant
Banker licensed by Securities Board of Nepal
under the Securities Businessperson
(Merchant Banker) Rules, 2064. Nabil Bank
as at the Balance Sheet date holds 74.29%
controlling interest in the total paid up
capital of Nabil Invest. The financial year of
the subsidiary has a common financial year
with that of Nabil Bank (parent company)
that ended on July 15, 2013.
Management of IPOs of equity capital of
The principal activities of Nabil Invest are to

provide merchant banking and investment
banking services that include management
of public offerings, portfolio management,
underwriting of securities, administration
and record keeping of securities of its clients
(RTS), management of mutual fund,
depository participants, and corporate
advisory. In the review financial year
2012/13, the major activities performed by
the Company are as under:

2 A Class Financial Institution

(Total NRs.2.09 billion);
Management of new fund offer of
Mutual Fund Units of Nabil Balance
Fund 1 (NRs.750 million);
Management of debenture issue of 2 "A"
Class Financial Institutions
(NRs.1.10 billion);
Management of assets of the customers
under Investment Management Service
(NRs.617 million as at 15th July 2013);
Finalization of Product Paper and
Standing Instruction Manual for loan
syndication and merger & acquisitions;
Being appointed as a fund manager and
depository of Nabil Balance Fund 1;
Acquired three additional RTS
businesses and is rendering RTS related
services to a total of 6 companies
including the unit holders of Nabil
Balanced Fund I.
Actions initiated to relocate head office
from Chabahil to Naxal, Kathmandu.
The office has been successfully relocated
on November 21, 2013;
In a position to render depository
participant services from the office at
Anamnagar Kathmandu (now at Naxal)
from the review year.
The Nabil Invest had been rendering its
services from its registered office located at

Chabahil, Kathmandu. For this purpose, the
Company had established its office in the
building taken in lease by Nabil Bank on cost
to cost sharing basis. Moreover, the company
had also occupied space at Anamnagar
branch to provide administration and record
keeping of securities of its clients. These
offices have since been relocated to Naxal
Narayan Chaur from November 21, 2013.
The Bank has deputed its staff Mr. Pravin
Raman Parajuli as the CEO of Nabil Invest
under Management Service Agreement. The
Bank also provides various administrative
services necessary for service operations of
the subsidiary under Service Level
Agreement. The administrative services
include general administration, accounting,
finance and planning, information
technology, cheque clearing, human resource
administration, legal advisory and fund
management service.
The transactions between Bank and its
subsidiary during the review year 2012/13
have been presented in point 13.5 of
Schedule 33 Notes to Accounts of financial
statements annexed herewith.
41
FINANCIAL POSITION
AND PERFORMANCE OF
NABIL INVEST
The balance sheet of the Company expanded

by 12% or NRs.31 million as at Mid July
2013 in comparison to last year. The growths

under both equity and liability remained more
or less same. The reserves and surplus during
the review year has increased by 86.2% to
reach NRs.24 million.
BALANCE SHEET
NRs.000
AT MID JULY
2013
2012
2011
2010
Share Capital
105,000
105,000
105,000
70,000
Accounts Payable
119,287
109,208
7,218
2,628
47
60
Capital and Liabilities

Reserves & Surplus
24,165
2,822
Deferred Tax Liability
Other Liabilities and Provisions
32,765
Total
284,039
Assets
Cash and Bank Balance
110,536
Investments
Advance Tax (Net of Tax Liability)
Fixed Assets (net of accumulated depreciation)

Deferred Tax Assets
Other assets
7,457
1,436
24,427
253,093
1,065
694
17
121,494
72,117
26,337
70,000
128,243
107,000
83,400
6,139
6,952
6,169
1,941
1,135
176
3,599
155
284,039
4,527
4,453
6,371
253,093
121,494
Nabil Bank as at the Balance Sheet date

holds
(528)
98,383
65,228
Total
12,975
74.29% controlling interest in
the total paid up capital of Nabil Invest.
72,117
42
Nabil Bank Limited
For review year 2012/13, the net profit of

the Company increased by 96.6% or
NRs.10.4 million compared to that of
previous year. This growth may be attributed
to the significant growth posted on income
side in comparison to expenses. The gross
income of the Company increased by 81.2%
or NRs.23.1 million, while the gross

expenses increased by 62.2% or NRs.7.9
million. As set out in the table below the
income from IPO management and other
management services have grown
substantially. Also the company's effective
fund management enabled it to earn good
amount of interest from the bank placements

amidst declining rates of bank deposit.
The Company has proposed distribution of
15% cash dividend from the current year's
profit.
INCOME STATEMENT
NRs.000
2013
2012
2011
Gross Income
51,696
28,522
19,480
Interest Income
22,455
14,633
12,979
Gross Expenses
(20,650)
(12,728)
(7,768)
(705)
Personnel Expenses
(5,603)
(4,296)
(1,574)
(222)
Depreciation Charge
(1,992)
(1,714)
(1,267)
IPO Fees
Other Income
Interest Expenses
General Operating Expenses

Operating Profit
12,424
16,817
(3,588)
(9,466)
31,046
(2,822)
Tax Expense
(7,056)
Profit before tax

- Current Tax
- Deferred Tax
Profit after tax
Opening Retained Earning
Dividend Payout
Deferred Tax Reserve
Closing Retained Earning
28,224
3,601
10,288
(71)
(6,647)
15,794
(1,435)
14,359
(3,590)
305
6,196
-
(4,927)
2010
(483)
-
11,712
(705)
10,647
(705)
(1,065)
(2,662)
176
(7,258)
(3,603)
(2,425)
21,168
10,769
7,985
(529)
(10,500)
(5,250)
23,488
12,975
202
12,975
(155)
13
7,456
-
(237)
(529)
7,456
176
-
(529)
SYNERGISTIC
Value creation of sums greater than the value of all its parts is only possible when
entire components work in sync and create synergy. Nabil has fostered the
culture of working together for better and faster result from the activities thereby
creating harmony among all the stakeholders. In our drive to take the bank atop
coheres all in togetherness for common good of the stakeholders.
03
PRODUCTS
AND SERVICES
Nabil is always
concerned about how
it can create values for
its customers the
best in the market.
It at different intervals
designs products and
services in sync with
time, technology
and market.
03
LENDING PRODUCTS
CORPORATE BANKING
Nabil Corporate Banking is constituted to

incorporate myriad corporate products with
the concept of a one window solution.
Nabil has a wealth of experience and
knowledge to this end and therefore focuses
on presenting itself as a financial
intermediary to bridge the gap between
those who have surpluses of funds and
those who desperately crave for them. We
understand their enterprises better having
co-worked with each other.
The guiding principle is to reach out the
banks finances to the larger clientele bases
no matter where they come from. With this
objective in mind, we at Nabil have
diversified our loan products making it
more inclusive keeping in focus our diverse
customer bases and their varied needs: viz.,
working/fixed capital loans, import/export
loans, hire purchase, mortgage, discounting
and purchasing bills. Nabil keeps itself busy
architecting new and inventive loan
products to maximally deliver especially
customized services and products through
national and international undertakings.
INFRASTRUCTURE AND
PROJECT FINANCING
Infrastructural development is
indispensable for economic growth and to
elevate the living standards of the residents
thereby contributing the nation get to an
economic pinnacle. Considering the leading
role of the Bank like ours in the industry,
we have formed an exclusive unit consisting
of high spirited team having major focus of
contributing with finances to unleash
potential projects like hydroelectricity,
cement, roads, rails, telecommunication,
airports, oil and gas explorations etc. that
remain inertly powerless for want of
financing. Moreover, these mega projects
foster and promote many other small
ancillary projects augmenting overall
business clime in the nation. Needlessly to
say, these economic activities breed an
array of employment opportunities and give
an impetus to the overall economic
development of the nation.
45
SME BANKING
Nepal, being a small economy, development

and economic growth largely depends on the
contribution of small and medium scale
business enterprises (SME) which are
abundant in the country. Therefore, prime
interest of the nation lies on the growth of
SME sector and wellbeing of majority of the
people associated with it. This sector is
pedestal for the countrys total economic
growth as they also stand auxiliary to big
corporate projects. Understanding the
endless potentials within SME, the Bank has
set up a separate hub at New Baneshwor,
Kathmandu with exclusive services related to
SME Banking. The services include a wide
array of financing in the form of cash credits,
overdrafts, time loans, import loans for
working capital requirement of business; and
term loans to finance purchase of capital
goods, like fixed assets, plants, equipments,
machineries, premises, vehicles etc as
required for business establishment and
expansions. Hence, it encompasses all
financial needs of SME customers associated
with manufacturing, trading and service
sectors across the country.
MICROFINANCE
Microfinance is indeed a product specially

designed to extend financial support to the
socio-economically disadvantaged people of
the nation to develop entrepreneurship
within themselves to uplift their living
standard. Nabil always feels accountable for
the community of poor and marginalized
people, and observes enormous potentials at
the bottom of the socio-economic pyramid
too. Nabil sees the enterprising poor not as a
burden of society and has been coming up
with specially designed credit lines with a
motive to eliminate poverty in the nation,
through direct financing, and also through
indirect financing in partnership and
coordination with various development

banks, microfinance institutions, FINGOs
(Financial Intermediary Non Government
Organizations) and Cooperatives. Hence, in
line with the governments policies &
priorities and the central banks directives as
well, Nabil sees micro finance sector under
utmost priority. It also has invested equity in
number of microfinance and rural
development banks of the country for further
contribution in the sector.
PERSONAL LENDING
This product has the exclusivity of tailoring

personal financial needs of our customers
hailing from diverse socioeconomic zones.
This meticulously and professionally
engineered varied product range covers the
following:
Nabil Housing
We always are attentive to our customers
needs and expectations and owning a home
is a dream of the many who qualify for
credibility but for want of funds cannot
realize their aspirations. We at Nabil have an
understanding of our customers financial
needs and have come up with a Nabil
Housing scheme with features of competitive
interest rates, extended loan tenures, with
flexible repayments and partial payment
facilities. Our customers can avail
themselves of whether it is purchase of land,
construction, refurnishing or refurbishing,
extension or purchase of a ready-made
house or purchase of home appliances.
Nabil Properties
This is an all inclusive scheme to cater to
diverse financial needs of our customers and
the arrangement is done by mortgaging idle
properties in order to finance varied needs
like education, marriage, travel, equity
infusion and of course beyond that. The loan
application is easy, and the process is

simple, and the sanction and delivery of
loans are prompt. This is especially and
resiliently packaged keeping in focus our
customers familial needs and hopes and the
loans can be extended up to 15 years.
Nabil Auto
Understanding our customers passion for
travel we have pioneered varied schemes for
auto loans with flexible repayment options
for a large variety of vehicles with diverse
schemes. Facilities to withdraw cash by
pledging vehicles in the banks name are
also available under the Cash for Car
scheme. The bank has revised the terms of
NabilAuto to cater to the entire need of the
customer that ranges from brand new
commercial and personal vehicles to used
personal vehicles to commercial vehicles.
Nabil Sikshya
Keeping in focus the growing numbers of
students we at Nabil have tailored troublefree and convenient education loans to the
students aspiring to pursue higher education
with the option of repayment in installments
or in full. This facility is not limited to
meeting the tuition fees of the students but it
is tailored to meet their other expenses like
boarding costs, travelling expenses,
consultancy fees and the like. Nabil is
recognized as one of the two banks for
financing higher education in Australia.
Personal Overdraft
This is a quick solution to our customers
immediate and contingent fund requirements
with the loan processes simplified and
expedited featuring convenient payback
facilities together with reinstating credit
lines.
46
Nabil Bank Limited
03
DEPOSIT PRODUCTS
Nabil values its customers needs and

expectations and at different intervals comes
up with diverse deposit products with
competitive interest rates in the market
keeping in tone with their specific needs.
The fundamentals that make Nabil the bank
of choice for our customers are as follows:
Nabil has a large network nationally and
internationally with good reputation.
Nabil has a substantial capital base.
Nabil harvests the trust and loyalty of its
customers and now with completion of
29 years of unabated banking in the
nation speaks up amply about this fact.
Nabil is a technically savvied bank; and
its information technology is advanced
and thus it has an instantaneous global
connection.
It is always keeping abreast of the latest
technical knowhow comes up with varied
deposit schemes.
Nabil has now the
following deposit products:
NABIL LOK BACHAT
With this scheme the customer can open a
deposit account with a minimum balance of
NRs.500 and can enjoy interest earnings
once his or her deposit crosses NRs.15,000.
The Lok Bachat scheme is reengineered to
inculcate banking habits across
socioeconomic stratums of society and for
small savers as well. Additionally,
prospective investors who need bank
accounts compulsorily for investing in an
initial purchase offer for share subscriptions
by an amount above a certain sum also can
avail of the option Nabil Lok Bachat offer.
NABIL BACHAT
This premier scheme provides a good return
on their deposits with a variety of services.
The minimum balance to open this account
is NRs.500 and the customers earn interests

once the minimum balance reaches
NRs.50,000 and above at all times. With
this scheme our customers can avail
themselves of Visa Electron Debit Cards, Any
Branch Banking Services (ABBS), Internet
Banking Service Nabil Net, Issuance of
Balance Certificates all free of charges.
NABIL BAL BACHAT
It is about encouraging saving habits of
minors (aged below 16 years). Indeed
parents want to see their childrens future
secured and to help our customers to that
end, the Bank has a special scheme for
children. The customers can open account
by depositing a minimum balance of
NRs.500 and earn interest once the balance
reaches NRs.15,000 and above at all times.
NABIL JESTHA MUDDATI AND NABIL
FIXED DEPOSITS
This scheme puts citizen aged 50 years and
above in focus and caters to meeting their
personal expenses and securing their savings
with a competitive interest rate. In addition
to this we have an exclusive scheme of Fixed
deposits on which the interest is paid on a
monthly basis.
NABILNARI BACHAT
Under this exclusive scheme female
accountholders are offered Visa Electron
Debit Cards exclusively designed and
dedicated for women offered by Nabil Bank
only in Nepal.
NABIL EDU SAVE
This product is designed to meet the specific
needs of students with double features: a
deposit product and other loan product. The
account can be opened with a minimum
balance of NRs.500 that attracts a host of
exclusive facilities, competitive interest rates,
and instant access to online banking

services, privileged education loans, free
check books, special discounts on Bank
drafts, Swift Transfer and much more.
CALL DEPOSITS
Nabil offers specially structured call deposit
schemes to our valued customers designed
considering their specific deposit needs.
PRIVILEGE LOUNGE
Specially tailored services in a queue free and
pleasant environment, our customers get a
special attention from a dedicated team of
Relationship Managers geared up to serve our
customers for their various banking services
and financial requirements and advices.
OTHER PRODUCTS AND SERVICES
Being pioneer of modern banking service
provider, we have taken digital culture at
next the level by providing entirely new
digital experience in the context of Nepalese
banking industry in the form of:
Electronic online A/c opening form In
this form of A/c opening request, customer
simply needs to fill up online form attached
with recent photo ID and submit it online
into their desired branch location. Our basic
motto towards launching this is to give new
dimension to online banking and
conventional A/c opening approach.
Nabil Business A/c Unlike other current
A/c we are not only targeting customers by
offering freebies & discounted rate on trading
activities but also providing electronically
processed transaction through the use of
high end technology in a smart & easy way.
Smart Fixed Deposit This is a paperless
fixed deposit opening scheme, which has
various smart features.
47
03
CARD PRODUCTS
Nabil is one of the principal members of

internationally renowned payment agencies:
Visa Worldwide Inc., MasterCard Worldwide
Inc., Union Pay International (CUP) and
SmartChoice Technologies (P) Ltd. (SCT) and
employs with state-of-art technology. Nabil
provide online services, issues credit, debit
and prepaid payment cards under both Visa
and MasterCard brands that are accepted
directly for purchase of goods/services, cash
withdrawals and online payment
transactions through 3D secured ecommerce payment solution. The rupee
cards are accepted over 500,000 merchant
outlets and 100,000 ATMs in Nepal and
India while the USD cards are accepted over
millions of merchant outlets and ATMs
worldwide. Nabil also accepts payment of
Visa, MasterCard, CUP and SCT brands of
cards issued by banks all around the world
through its wide network of ATMs &
merchant members across Nepal.
NABIL MASTERCARD INTERNATIONAL
CREDIT AND NABIL MASTERCARD
INTERNATIONAL PREPAID CARDS
Nabil MasterCard International credit card is
accepted at merchant outlets and ATMs
worldwide (except India) against the FCY
accounts maintained in Nabil. It is
exceptionally convenient mode of payment
and serves as a single currency across
borders while travelling to countries other
than India. Also, it offers interest free credit
period of 15 to 45 days. Nabil MasterCard
International Prepaid card is a convenient
mode of availing travel quota facilities
provisioned by foreign exchange regulations
of NRB. Carrying Nabil MasterCard
International Prepaid card is hassle free and
most preferred mode of payment unlike
Cash, Drafts or Travelers Cheques.
NABIL VISA AND MASTERCARD RUPEE

CREDIT CARDS
Nabil Visa and MasterCard Rupee Credit
cards are accepted for purchase of
goods/services, cash withdrawals and online
payment transactions through 3D secured ecommerce payment solution throughout
Nepal and India. It offers a flexible
repayment option at the choice of
cardholders with interest free credit period of
15 to 45 days.
NABIL INSTALLMENT
Nabil installment is a supplementary service
introduced by Nabil Cards & e-Banking
Division for its rupee credit cardholders
because of its simplicity and easy access.
Nabil installment offers easy Equated
Monthly Installments (EMIs) at 0% interest
with minimum 6 to maximum 18 months
tenure for its credit cardholders for purchase
of goods with minimum purchase amount of
NPR 20,000/- to maximum NPR 200,000/from its selected merchant locations.
NABIL VISA ELECTRON DEBIT/
PREPAID CARDS
Nabil Visa Electron Debit and Prepaid cards
are the most reliable and convenient mode of
payment duly acknowledged by our valued
customers. Free from the hassles of limits,
interests, late payment fees and other
penalties any customer maintaining a bank
account with Nabil can subscribe to Nabil
Visa Electron Debit card. To simplify the
process further, NabilKoolCash known as
Nabil Visa Prepaid card can be availed
instantly at any of our branch without having
to open bank account with Nabil. Nabil Visa
Electron debit and prepaid cards are
accepted at merchant outlets and ATMs all
over Nepal and India.
NABIL ESECURE
Nabil Visa and MasterCard card members
(debit and credit) can now enjoy internet
shopping experience with their cards through
3D secured ecommerce payment solution
called Nabil eSecure. With Nabil eSecure,
card members can make payments for
internet transactions at merchant's website
easily after one time registration to Nabil
eSecure services and the transactions are
protected by card member chosen
passwords. Railway tickets, airlines tickets,
goods/services, hotel reservations, tour
packages and many more can be
conveniently and safely purchased with the
help of hassle free Nabil eSecure.
MOBILE COMMERCE
The utility of e-Commerce is growing
exponentially. With the intention of providing
all modern banking services to its customers,
Nabil has launched Mobile Banking service
called Nabil M-Bank. Nabil initiated mobile
recharging service through SMS for NTC
prepaid numbers. It offers Menu based
mobile commerce solution which allows our
valued customers to use their mobile set in a
simpler form in order to perform non
financial transactions like Balance Enquiry,
Mini Statement, Cheque Book Request, Full
Statement Request and Pin Change and
financial transactions such as Third Party
Fund Transfer (within Nabil Bank), payment
of Nabil Credit Card Bill, Purchase of NTC
Prepaid Mobile (Namaste) Recharge Card,
Purchase of NTC CDMA Mobile (Sky Phone)
Recharge Card, Payment of NTC Post Paid
Mobile Bill, Payment of NTC Landline Bill,
Payment of ADSL Bill and Merchant
Payment. The entire range of the above
services could be availed from both Ncell
and NTC mobile services.
48
Nabil Bank Limited
NABILNET
Through Nabils Internet Banking facility
NabilNet customers can bring the Bank
right to their homes and offices. Customers
ranging from individuals, NGOs, INGOs,
development agencies, and corporate houses
etc. can enjoy a host of services like
transferring funds, viewing account balances,
downloading and printing account
statements, payment of credit card bills,
payment of NTC/Ncell postpaid bills,
payment of NTC ADSL bills. Nabilnet is
highly secured and in order to make the
environment more secure it has initiated
publicizing awareness programs through
newspapers and is constantly updating its
products and services to serve banks valued
customers.
ATMS
Nabil has a large domestic network of 81
ATMs in the Kathmandu valley and outside
at locations like Birtamod, Damak, Itahari,
Khandbari, Dharan, Biratnagar, Birgunj,
Hetauda, Charikot, Narayangadh, Gorkha,
Beshisahar, Pokhara, Baglung, Butwal,
Bhalwari, Bhairahawa, Ghorahi, Tulsipur,
Nepalgunj, Dhangadhi, Janakpur,
Chandragadhi and Mahendranagar. These
ATMs serve customers 24 hours a day, 365
days a year. Nabil ATMs also accept credit
and debit card products of Visa, MasterCard,
China Union Pay and SCT. Further extension
of ATMs in various locations inside and
outside Kathmandu valley is still under
Nabils immediate business plan.
49
03
REMITTANCE PRODUCTS
Nabils remittance products are a topquality and has a diverse and selected
service range designed to cater to the
different and exclusive requirements of our
valued customers capitalizing on its large
international network and branches at
different parts of the country.
WESTERN UNION
Nabil is one of the 8 principal agents and
the only bank agent for Western Union
Money Transfer Services in Nepal. Since
1999 Nabil is associated with Western
Union and now through 1,237 authorized

subagents located at different parts of the
country, Nabil ensures its services reach one
and all no matter what geographic regions
our customers come from.
NABIL REMIT
NABILREMIT is a project designed to cater
to domestic remittance services for money
transfers from one place to another in Nepal
and the bank has selected 1,263
NABILREMIT agents established in different
parts of the country that delivers domestic
03
BANCASSURANCE
This arrangement between the Bank and
insurance companies to sell insurance
products to the Banks customers benefits
mutually both at the same time. The Bank
acts as an agent for selling diverse
products/schemes under life and non-life
providing speedy and professional services
to the customer. Nabil, as always
pioneering in innovative products, has
commenced this product in 2010 through
arrangements with several insurance
companies with a distribution model
through its branches. Bancasurrance
Division coordinates with the insurers for
expeditious settlement of claims in
compliance with the standard procedures.
money transfer services and the location

numbers have been increasing day by day.
DRAFT AND SWIFT TRANSFERS
Drafts and SWIFT transfers are some of our
expedited services our customers are
facilitated at branches through our different
renowned correspondent banks in India and
abroad. Nabil has been providing account
opening facilities to the Nepalese
expatriates and migrants in Qatar, UAE &
Bahrain.
50
Nabil Bank Limited
03
INVESTMENT BANKING / MERCHANT BANKING
Nabil Bank Limited with its mission to be

the 1st Choice Provider of Complete
Financial Solutions ventured into capital
market related activities and incepted its
Subsidiary Company Nabil Investment
Banking Ltd. (Nabil Invest) with CG Finco
Pvt. Ltd. as its Institutional Shareholder.
Nabil Invest is licensed by Securities Board
of Nepal (SEBON) to provide Merchant
Banking Services. Nabil Invest in its short
span of operation has established itself as
one of the leading Merchant Bank and

targets to establish itself as a leading
Investment Bank introducing innovative
products and services in the Nepalese
capital market with strict adherence to
prevailing rules and regulations.
Nabil Invest renders its clients wide array of
services and also targets to introduce
innovative products/services which the market
demands over a period of time. The service
Nabil Invest currently renders includes

Management of Public Offers/Further Public
Offers/Right Issues, Underwriting, Registrar to
Securities (RTS), Portfolio Management
Services, Trusteeship Services, Depository
Participant (DP) services in a Central
Depository Services (CDS), Fund Manager &
Depository in Nabil Mutual Fund and
Corporate Advisory Services like Investment
Advisory, Valuation, Loan Syndication,
Mergers & Acquisitions etc.
03
OTHER PRODUCTS/SERVICES
ANY BRANCH BANKING

SERVICES (ABBS)
In todays world, technology is paramount
and its role in a service industry like banking
is growing all the more in the twenty first
century. Nabil, realizing this fact has made
all its services and products technology
savvy. The objectives are always to ensure
Nabils products and services are accessible
to its customers no matter where they are
regionally located. With its IT connectivity
and core-banking software, Finacle, Nabils
uninterrupted 24 hours services and
products are reachable from all points of
representations be it branches or ATMs or
merchant establishments from Mechi to
Mahakali 365 days a year. Nabils customers
opening their accounts at one branch can
operate it from any Nabil branch across the
country hassle free. Since Nabils branch
network is extensive, customers are
privileged to enjoy their transactional needs
with ease and convenience.
EXTENDED BANKING HOURS

Nabil has been extending "365 days banking
services" and "extended counter services"
from select branches to cater to the banking
needs of customers busy during regular
banking hours/days. Kantipath and Pulchowk
branches offer 365 days banking services
and extended counter services while many
more within and outside Kathmandu Valley
offer extended counter services.
BULLION OPERATIONS
Nabil has been importing gold and silver on
consignment basis and has now become one
of the credible names to cater the demand of
the domestic market. The Bank not only
caters its own clients but also renders
services to other Gold Importing Banks.
Further, in near future, the Bank is also
planning to sell gold and silvers in the small
quantity to its retail customers.
NABIL TREASURY
Nabil Bank offers complete solution for
foreign exchange transaction need of its
customers. The bank is well equipped with
network of correspondents to offer real time
and competitive spot and forward rates. The
bank undertakes all FX activities as
permitted by the regulation to support its
customer business need.
PROFESSIONAL
The experienced team with service attitude in the Bank over a stretch of 29 years
displays unrelenting professionalism the Bank practices. We have always honored
and valued the need of the customer and it has necessitated us to be perfect with
speed and accuracy while serving them. It has always fostered partnerships that
give the chances of win-win to both parties which thereby have led to
proliferation of business activities in the country.
04
GOVERNANCE
04
THE BOARD OF DIRECTORS

STRUCTURE OF THE BOARD
Nabil Bank Ltd. has a unitary Board

Structure with seven members. The Board is
headed by the chairman with six member
directors. All the Board members are NonExecutive directors. Individual directors
exercise their authority in the Board
meetings and the Board acts in the collective
interests of shareholders.
The core objective of the Board has always
been to form policies and guide management
for long term sustainability of the bank with
reasonable returns to shareholders and
enhance shareholder value. The Board
decides on corporate strategies, approves
capital and operational plan and consistently
reviews the managements performance
ensuring that corporate objectives are always
kept in focus.
The directors are from diverse business and
service backgrounds with varieties of
knowledge, experiences and expertise. The
entire board comprise of non-executive
directors who, jointly or severally, do not take
part in day to day management of banks
business operations. The Board members
bring about an external perspective on
company affairs and provide constructive
suggestions to the CEO. The Board sets
strategic path for the organization, identifies
business objectives, reviews managements
performance and provides guidance to the
management towards achieving the targeted
goals and objectives.
The Board is collectively responsible for longterm sustainability of the Bank. To this end,
the Board exercises its authority within the
framework of regulatory provisions,
Companies Act, Bank and Financial
Institutions Act, Memorandum and Articles
of Association and other relevant laws and
regulations. The Board delegates executive
responsibility for running the Banks business
to the Chief Executive Officer. The CEO
heads the executive management team and
is empowered to further delegate authority
and assign responsibility through the
organization structure.
The Board, considering the job requirement

and in compliance to regulatory provisions,
can constitute committees of the Board
ascribing specific responsibilities and
delegating any of its authorities and powers
to such committees. However, the Board
keeps certain approving authority to itself
including, but not limited to, the approval of
strategic plans, performance targets, policy
documents, annual budgets, annual financial
statements and the authority or the
delegation of authority to approve credit and
market risk limits.
Total thirteen board meetings were held
during the year. The following table shows
attendance of individual directors at the
meetings.
BOARD MEETING ATTENDANCE RECORD FOR YEAR 2012/13

ATTENDANCE
SITTING FEES.
K B Manandhar
13/13
NRs.114,000
D G Agrawal
13/13
NRs.104,000
S P Poudyal
K P Acharya
13/13
11/13
NRs.108,000
NRs.88,000
N Chaudhary
12/13
NRs.96,000
A Sharma
10/13
NRs.72,000
M Ahmed1
S P Shrestha2
Total
1
2
In five meetings he was represented by his alternate director Mr. J P Kanoria.

Mr. Shrestha resigned from the Board in October 2012.
6/13
2/2
NRs.48,000
NRs.20,000
NRs.650,000
53
INFORMATION TO THE BOARD
Nabil has a culture of open and relevant

communication between the Board of
Directors and the Banks Executive
Management. The Board receives reports
and presentations from conveners of board
committees and the CEO. Such reports
include key issues related to credit
exposures, risk portfolio, liquidity, financial
performance, business expansion, audit and
compliance. The Board regularly reviews
management performance against approved
budget targets and goals.
All Board Committees have a Member
Secretary from senior management team
who is engaged in the concerned area of
business within the Bank. For effective
discussions of the items in agenda, other
members from the banks management,
whose responsibilities relate to the matter in
agenda, are also invited as required.
Individual directors are provided with the
agenda and accompanying reports and
documents well in advance of the Board and
Committee meetings. Board members have
timely access to adequate information so as
to enable them to conduct appropriate
review of the agenda and actively participate
in discussions during the meetings. They
may seek independent professional advice
wherever they feel so is needed.
Directors can also make offsite visits to
branches to obtain a better understanding of
local business conditions, participate in
business promotion and corporate social
responsibility related activities and interact
with customers and employees.
DIRECTORS APPOINTMENT
AND INDUCTION
Appointment, retirement and re-election of

directors are conducted as per the provisions
laid out in prevailing Companies Act, Bank
and Financial Institutions Act, Articles of
Association of the bank and other relevant
laws and regulations. One professional
director is appointed from the roaster of
professional experts published by the central
bank. Position of professional director was
vacant during the year. None of the directors
has service contract with the bank.
Upon appointment the directors are
administered Oath of Secrecy and Fidelity.
Newly appointed directors are inducted on the
Board as per provisions and procedures laid out
in the Companies Act, Banking and Financial
Institutions Act and other relevant laws and
regulations. Throughout their directorship, the
directors have access to adequate information
and opportunities of interaction with other
directors and senior executives to obtain an
understanding of the banks business,
strategies, operations and risk culture.
CHANGES IN THE BOARD
The Board has always balanced a reasonable

mix of professional expertise, experience and
vision in its composition. In the context of
change in local and global business
environment, our businesses are exposed to
new kinds of risks. The evolution and
emergence of risks calls for immaculate
planning and thorough understanding of the
risks and the challenges in risk management.
It also necessitates the Board to step ahead
judiciously and prudently, for which the
Board needs to keep itself well equipped
with the required set of skills and acumen at

all times. The Board has consistently
demonstrated adequate knowledge and
expertise in its decisions.
The Banks 28th Annual General Meeting
held on 17th October 2012 re-elected Mr.
SP Poudyal and elected Mr. Ashish Sharma
as director representing Group C
Shareholders.
Similarly, Mr. D.G. Agrawal was appointed as
director representing Group A. Prior to this
he represented Group C shareholders in
the Banks board.
RELATIONS WITH
SHAREHOLDERS
The Board has always encouraged active

participation of shareholders in every Annual
General Meeting. The meeting has always
been a very important platform for the Board
to interact with many shareholders, both
individual and institutional, communicating
the objectives and strategic plans, clarifying
on shareholders concerns and sharing the
collective vision.
Directors, most of whom represent
institutional shareholders, engage in regular
dialogues with institutional shareholders,
continuously conveying on business
strategies and apprising them of the banks
performance based on mutual understanding
of organizational objectives.
54
Nabil Bank Limited
04
BOARD COMMITTEES
Pursuant to Section 5 of NRB Unified

Directive No. 6 banks and financial
institutions are only allowed to constitute
board committees for Audit, Risk
Management and Human Resource
Management. Any other committee can only
be constituted for specific purpose and for
specified time duration. Following board
committees were in function during the year:
1. Board Audit Committee (BAC)
2. Risk Management Committee (RMC)
MEMBERSHIP OF
THE BOARD COMMITTEES
DIRECTORS
AUDIT
COMMITTEE
RISK
MANAGEMENT
COMMITTEE
D G Agrawal
K P Acharya
N Chaudhary
A Sharma
CONVENER
MEMBER
BOARD AUDIT COMMITTEE (BAC)
Audit Committee of the Bank is formed in line

with provisions of NRB Directives and the
Company Act. The Committee has been
functioning and discharging its duties and
responsibility in line with the provisions laid down
in Section 5 of NRB Directives 6/2069, Section
6 of NRB Directive 7/2069 and Sections 164
and 165 of the Company Act 2063.
Internal Auditors and Statutory Auditors have
direct access to the Audit Committee.
Currently director Mr. D G Agrawal is the
Convener and directors Mr. A Sharma and
Mr. K P Acharya are members of the Audit
Committee. Banks Head of Internal Audit is

the Secretary of the Committee.
ROLE OF AUDIT COMMITTEE
The committees role is extensive and
strongly supports the board in dealing with
aspects of good corporate governance,
internal control, risks management, financial
reporting, legal and regulatory compliance
and ethical conduct of business.
The Committees major responsibilities
include:
1. Reviewing the Banks overall system
of internal controls.
2. Reviewing observations and
recommendations made in reports of
auditors (statutory, regulatory and
internal).
3. Reviewing the banks financial
statements, ensuring its accuracy and the
required level of compliance in relation to
financial reporting standards.
4. Reviewing compliance in relation to
banks internal policy and prevailing
regulatory and legal provisions.
5. Reviewing risk management systems and
security position of the bank in respect of
exposure to credit risk, operations risk
and market risk.
6. Advising and recommending the Board on
management actions required for
achieving the desired level of effectiveness
and compliance in response to above
reviews.
7. Recommending to the Board on
appointing statutory auditor, auditors
remuneration and reviewing that the

auditors actions in course of banks audit,
do not contravene with applicable laws and
provisions.
AUDIT COMMITTEE
ATTENDANCE RECORD
ATTENDANCE
SITTING FEES.
- D G Agrawal1
8/8
NRs.72,000
- A Sharma
4/4
NRs.32,000
- K P Acharya
2
- K B Manandhar3
Total
2/8
4/4
NRs.16,000
NRs.40,000
NRs.160,000
Committee Secretary attended all eight meetings

held during the year.
1
Mr. D G Agrawal attended first four meetings as a member
and remaining four meetings, beginning March 2013,
as Convener.
2
Mr. A Sharma attended four meetings beginning March
2013 as a member.
3
Mr. K B Manandhar attended four meetings as Convener
until October 2012 immediately before assuming the
position of chairman of the Board.
COMMITTEE ACTIVITIES
BAC meetings reviews and discusses a
number of internal audit reports, statutory
audit report and regulators inspection report
of the Bank. The committee updates the
Board of its actions by sending copies of its
minutes, which are discussed in Board
meetings. BAC issues recommendations for
strengthening banks system of internal
controls and its effectiveness in practice.
A number of agenda items were discussed in
the meetings and numerous
recommendations were given by the BAC for
strengthening overall risk management
systems of the Bank. For effective
discussions of the agenda, members from
senior management team of the bank were
also invited to BAC meetings on need basis.
55
AGENDA DISCUSSED DURING

MEETINGS
1. Report on Past Dues Corporate Loans &
Retail Lending for 12 months.
2. Status Report on Nostro Accounts for 12
months.
3. Audit Report on Reconciliation of Nostro
Accounts 2 reports.
4. Audit Report on Administration
Department 1 report
5. Audit Report on NPA Management 1
report
6. Audit Report on Center Processing Center
1 report
7. Audit Report on Central Accounts
Department 1 report
8. Audit report on import L/C at CTO
Teendhara 2 reports
9. Audit report on Operations of Branches 45 reports.
10.Preliminary audit report of newly opened
Branch 1 report
11. Audit report on Corporate & SME
Banking of Branches - 34 reports.
12. Audit report on PLU of Branches - 35
reports.
13.Audit report on Export L/C at CTO 1
report.
14. Audit report on Guarantee Business at
CTO 1 report.
15. Audit report on Bancassurance Unit 1
report.
16. Audit report on Nabil Investment
Banking 1 report.
17. Audit report on Global Markets
Treasury 1 report.
18. Audit report on Corporate &
Infrastructure Accounts 1 report.
19. Audit report on PLU Lalitpur 1 report
20. Semi-Annual verification of Cash and
Cash Value Items of all Branches.
OTHERS
21. Review of Compliances and Branch
Responses on Audit reports - 109
reports.
22. Investigations & Inspections on Specific
Events.
23. Memorandum on Response to
Preliminary Audit Report (PAR) for the FY
2068/69.
24. Memorandum on Submission of Annual
Financial Statements of the Bank for FY

2068/69 (2011-12).
25. Memorandum on NRB Inspection Report
2069.
26. Memorandum on Revised SIMs, SIM on
CAS & NPA Management, SIM of
Corporate Communication Corporate
Social Responsibility unit.
27. Memorandum on Third Party Process
Audit undertaken by Paladion Networks
Pvt. Ltd. of M/s Electra Card Services
(ECS).
28. Memorandum on Reappointment of
Statutory Auditor for FY 2069/70
(CSC & Co.).
29. Memorandum on Disclosure of
information, (in regard to Audit
Committee) in line with stipulation of the
Company Act 2063, in Directors Report
of the Bank for FY 2068-69.
30. Memorandum in relation to updates on
various investigations and inspections.
31. Certification of Unaudited Financial
Results as on 4th Quarter of FY 2068/69
(2011/12), 1st, 2nd and 3rd Quarters of
FY 2069/70 (2012/13).
32. Certification of Capital Adequacy Ratio
and Risk Weighted Assets of the Bank on
a monthly basis.
33. Half yearly review of Investment
Portfolio of the Bank as of 15.07.2012
and 13.01.2013.
34. Memorandum on Annual Audit Plan for
FY 2069/70.
35. Memorandum on Audit Programme for
1st, 2nd, 3rd and 4th Quarters of FY
2069/70.
36. Memorandum on Budget for FY
2070/71 (2013/14).
37. Memorandum on review of Stress
Testing conducted by the management
for Jestha end 2069 (FY 2068/69) and
1st, 2nd and 3rd Quarters of FY
2069/70.
RECOMMENDATIONS ISSUED
TO MANAGEMENT
1. Monthly review on past due loan
accounts and appropriate measures were
advised to the Management to deal with
and keep a watch on overdue loan
accounts.
2. Monthly review on status on old and

unreconciled items in the nostro
accounts of the Bank and appropriate
directions were given to the Management
for timely reconciliation.
3. Review of various investigations/
inspections carried out by Internal Audit
Department on the instruction of the
Audit Committee / Management and
suggested various precautionary
measures to be adopted by the Bank
Management.
4. Review the compliance of the branches in
regard to NRB directives, Banks credit
policy, internal rules & guidelines and
compliance of prevailing laws of the
country.
5. Review and discussions made on the
NRB inspection report of the Bank and
advised appropriate measures to be
taken by the Management for full
compliance of the irregularities pointed
out in the report.
preliminary statutory audit report along
with the Management response and
annual financial statements of the Bank
and suggested appropriate measures to
the Management for compliance and
recommended the Board for adoption of
annual accounts of the Bank.
risks mitigation (such as business,
operations, regulatory, external etc.),
internal check and control and security
position in respect of Corporate
/ Infrastructure & Project Financing,
Branch Operations, PLU Business, CTO,
SME & Micro Lending, Treasury and
Correspondent Banking, CVD verification,
Nabil Investment Banking, Remittance
Business Unit, NPA Management,
Central Accounts and Administration,
Reconciliation of Nostro Accounts of the
Bank.
56
Nabil Bank Limited
RISK MANAGEMENT
COMMITTEE (RMC)
Directors Risk Management Committee is
constituted in line with the spirit of Risk
Management Guidelines (RMG) of Nepal
Rastra Bank and the NRB Unified Directives.
The RMG highlights on risk governance and
identifies the need of a strong risk
management framework, well defined risk
management processes and effective risk
assessment and measurement mechanism.
Besides, representation in the committee
from management, director Mr. K P Acharya
is the Convener and directors Mr. N
Chaudhary and Mr. D G Agrawal are
members of RMC. Banks Chief Risk Officer
is the Committee Secretary.
ROLE AND RESPONSIBILITIES
The Committee oversees overall risk
governance framework of the Bank. It
ensures that proper risk management policy
and procedures are in place and effectively
practiced at all levels within the Bank. In
doing so it ensures that Internal Audit
reviews the overall business operations to
assess whether or not the Banks policies
and procedures are adequate and
implemented. It reviews the effectiveness of
Management Information System and
Internal Control Systems of the Bank.
The Committee, on an ongoing basis, defines
and reviews risk appetite of the bank in
relation to overall business risk with specific
focus on credit risk, market risk, operation
risk, liquidity risk and price risk. RMC
advises the Board on the overall risk

tolerance levels of the bank throughout the
strategic implementation process. Risk
appetite of the Bank is determined based on
the following:
strength of capital base
quality and growth of earning assets base
brand reputation and
perceived customer value
balanced approach to
business risks and returns
risks diversification
A major role of the committee is to assess
business and profit risks of all lines of
businesses of the bank. RMC ensures that
managerial and operational level officials of
the Bank, responsible in risk management
and decision making processes, possess
adequate knowledge of their specific job area
and of the corporate risk culture. The
activities of ALCO like portfolio assessment,
returns from the business, asset quality,
growth in overall business vis--vis market
growth (competitor's position) are also
reviewed by the Committee and necessary
instructions are issued to the management
and necessary recommendations are made
to the board as deemed appropriate.
Quarterly stress report and monthly report
comprising overall position of the bank,
changes in the market condition are
reviewed and necessary instructions are
issued to the management. If the need is felt
for any recommendation to the board, the
same is also appropriately done. The
Committee also reviews trends in portfolio
quality and the adequacy of provisioning for
possible credit losses.
RISK GOVERNANCE
Bank practices risk governance applying the
principles of good governance to the
identification, assessment, management and
communication of risk. The Bank equally
takes account of participation, transparency,
and accountability within the procedures and
structures by which risk related decisions are
made and implemented.
Within the bank, RMC is responsible for
overseeing the risk governance structure and
monitoring the effectiveness of risk
management and internal control systems.
As advised by RMC, the management
ensures presence of strong risk governance
culture in the bank which guides its risk
strategies. Chief Risk Officer, member
secretary of RMC, ensures that emerging
risks and changing behavior of key risks are
brought forward for discussions in the
committee meetings. Invitees who head
major functional and business areas
participate in RMC meetings and highlight
the key risks faced in their specific areas.
This helps the Board, together with RMC, to
ensure that a strong risk management frame
work is maintained. Following is the
attendance record of board members in the
RMC:
ATTENDANCE
- K P Acharya
- N Chaudhary
- D G Agrawal
- K B Manandhar1
Total
SITTING FEES.
5/5
NRs.48,000
2/2
NRs.16,000
5/5
1/1
Nrs.40,000
NRs.8,000
NRs.112,000
Committee Secretary attended all five meetings

held during the year.
1
Regulatory requirement requires the Convener of BAC to
be a member of RMC. Accordingly, in November 2012 Mr.
K B Manandhar attended one RMC meeting and beginning
April 2013 Mr. D G Agrawal attended two RMC meetings in
capacity of Convener of BAC.
57
COMMITTEE ACTIVITIES
The Committee discussed on the following
agenda in its meeting.
1. Review of risk management practices
implemented in the Bank including
regulatory compliance.
2. Review of authority delegated by the
Board to the management.
3. Review of performance and business risk.
4. Stress testing reports of the Bank.
5. Status of non-performing loan accounts
and recovery strategies pursued.
6. Minutes of Asset Liability Committee
(ALCO) meetings.
7. Revision of following documents:
a. Credit Policy Guidelines revision
2013
b. Product Paper for Mortgage Loans
SME, Corporate and Infrastructure
c. Product Paper for Education Loan
d. Product Papers for Retail Loans
Housing, Mortgage and Personal
Overdraft
8. Internal Credit Risk Rating Model of the
Bank.
9. Credit Concentration reports, including top
exposures at borrower, group and sector
level.
The committee took note of the following

and issued appropriate instructions to the
management.
1. Budget achievements and capital strength
of the Bank.
2. Development in market conditions and
likely impact on the Banks earning.
3. Recovery efforts and strategy pursued to
regularize in large non-performing loan
accounts.
4. Requirement of regular reporting
mechanism on Risk Management to the
RMC.
5. Stress testing scenarios and satisfactory
liquidity and capital position of the Bank.
6. Need to analyze concentration risk in
deposit portfolio.
7. Satisfactory conduct of ALCO.
8. Scheduling RMC meetings before Board
meetings, to the extent practical, such
that RMC can apprise the Board of its
feedback on various risks related reports.
9. Need to review the Deprived Sector
lending norms such that our business
model is sustainable and the target end
user benefits the most from our lending.
10. Need to cover review of specific risks

which otherwise may not be routinely
covered in ALCO meetings or in standard
performance reviews. Succession
planning, for example, has been identified
as one such area.
Following each meeting, the Committee
instructs necessary actions to the
management and reports to the Board,
informing of its decisions.
The Bank equally takes account of

participation, transparency, and
accountability within the procedures and
structures by which risk related
decisions are made and implemented.
58
Nabil Bank Limited
04
INTERNAL CONTROLS
Within NABIL, effective implementation and

monitoring of internal control system is the
responsibility of the Board. In doing so the
Board acts through the Boards Audit
Committee which reviews the reports from
internal auditors, statutory auditors and NRB
Inspection Team and provides the Board with
independent assurance on the effectiveness
of control environment.
Every aspect of our business involves some
degree of risk. Risk and reward are
inherently linked and each of our decisions
involves a trade-off between these two
elements. While we accept the need to take
risk for achieving business objectives, we are
also aware of the need to mitigate adverse
consequences of taking risks. For this we
have implemented key procedures designed
in such ways to provide effective internal
controls across the organization. Such
procedures for continuous assessment,
identification, evaluation and management of
key risks have been in place throughout the
entire financial year.
Following were the key internal control
procedures in place during the year:
The Board has delegated the authority to
operate banks business and assigned
responsibilities for regular functioning of
the Bank to CEO.
The CEO is empowered to further
delegate the authority and assign
responsibility including specific business
targets to managers. The functional
responsibility line is clearly defined in the
organization structure.
The primary responsibility for effective
practice of internal control procedures
rests on branches, strategic business

units and operational managers. Internal
Auditors, as per their approved annual
work plan, conduct detail inspection and
verification on effectiveness of internal
control procedures at all branches and
operational units at least once each year.
It is the managements responsibility to
ensure that Internal Auditors
recommendations are implemented within
an appropriate and reasonable time
frame. Banks Audit Policy specifies 60
days period for closure of each audit
report from the date of its issue. This
involves review of each audit report and
the response of branch / unit audited
thereon, at the levels of concerned
functional / business heads, Internal Audit
department and Audit Committee. Closure
of audit report is approved by the CEO
upon full satisfaction that the audit
irregularities have been duly addressed
and complied with.
Executive committee headed by CEO
comprise of SBU heads and heads of
other functional departments. Weekly
Xcom meeting reviews the Banks
performance and the developments in it
operating environment at length. It also
discusses measures to be taken for
improvement of operating system and
procedures. The issues related to Asset
and Liability management including risks
are discussed at ALCO that takes place
every month.
Credit marketing unit and Credit risk unit
are independent. Credit marketing unit
conducts marketing activities and forward
credit proposal for approval. Then
onwards credit risk unit independently
analyze each credit proposal in light of

inherent and external risks involved in the
business. Under co-signing / dual
approval arrangement both marketing and
risk units have to approve each credit
proposal within their authority.
Credit Administration and Support unit,
directly reporting to CRO and independent
from credit marketing and credit risk
functions, is assigned with specific
responsibilities of conducting periodic onsite inspection of credit customers,
examining credit documentation and
ensuring all the terms of credit approvals
are complied with throughout the life of a
credit account.
The Board has delegated foreign currency
dealing and investment decision limits to
CEO. The CEO has further delegated the
authority to Chief Investment Officer,
Head of Treasury and individual dealers.
Treasury back office, having reporting line
to COO, is responsible to ensure that
treasury front office operates within the
authorized limits and is in compliance to
the Banks investment policy.
The CEO has approved a number of
Standard Instruction Manuals (SIM)
which, in essence, are standardized detail
procedural guidelines for specific areas of
banking business. Activities at all level
confirm to the procedures in SIM.
Standard budgeting and variance
reporting mechanism is in place with
regard to Banks performance review on
monthly basis. Finance Department and
Xcom members under ones area review
the variances and progress against
budgets. A Monthly Business Letter is
59
prepared for information and perusal of

the board which discusses business
developments on four facets viz. financial;
product/service and customer
care/process and control and activities on
human resource. The report among other
includes market developments, overall
economic issues that may have impact on
the business and other miscellaneous
issues.
Financial Administration Bylaws specifies
centralized functional control over all
expenses of the Bank. All expenses within
the budget are approved by CEO upon
recommendation of management level
Financial Directive Committee. All
expenses in excess of budget are
approved by CEO on urgent basis and are
periodically placed before the Board for
its post ratification.
IT Policy specifies centralized functional
control over all IT operations including
defining access authority in Core Banking
Software, MIS and hardware facilities
including data center. Access authority to
any staff is given at the request of
department head and approval from
Senior Manager - Operations. All
decisions on procuring IT equipment and
services are reviewed by IT Department
for technical feasibility beforehand.
The Bank publishes notice, keep the
same in website, periodically for public
awareness in order to safeguard from
fraudulent activities through our internet
banking platform. Similar instructions are
regularly issued to all employees.
Compliance unit, reporting directly to the

CRO, operates as guided by the Banks
Know Your Customer and Anti Money
Laundering policies. Reporting

mechanism requires branches to confirm
compliance to these policies. Transactions
above a threshold limit are periodically
reported to the Compliance unit which
scans and ensures compliance is
maintained at transaction level. All
statutory reporting requirements like
suspicious transaction report (STR) and
any other specific report are submitted to
concerned authority including NRB as per
the reporting provisions.
Standardized mechanisms are in place for

business and operational units to
periodically report on business volumes
and outstanding balances with specific
reporting requirements on exceptional
transactions, overdue transactions, foreign
currency transactions, un-reconciled
balances, etc. Report generation is
automated in MIS. Reports are reviewed
at different levels within the management
and appropriate instructions are issued to
concerned operation managers.
Mechanisms are in place to comply with
all regulatory reporting requirements.
Such requirements, among other things,
include periodic reporting on capital
adequacy (as per Basel II), balance of
payment, cash reserve requirement, credit
portfolio, foreign currency assets, deposit
portfolio, gap reporting (ALM), statutory
liquidity ratio and monthly provisional
statements of financial position and
income Statements. Functional managers
are accountable for complying with the
reporting requirements.
The Audit Committee ensures that

required disclosures are made properly in
the financial statements. The Committee
obtains reasonable assurance from
statutory auditors on the reliability of
financial information presented in the
annual financial statements and
recommends the Board for its adoption.
CFO ensures that quarterly interim

financial statements of the Bank are filed
with the regulatory authority, the Security
Exchange Board of Nepal and published
in national daily newspaper for public
information within the prescribed time
periods.
Centralized functional control is exercised
over all transactions involving tax
deductions at source. All such
transactions are administered and
authorized directly under Senior Manager
- Operations. Payroll tax is
administered by Human Resource
department. Tax deducted at source is
timely deposited with Large Tax Payers
Office. Responsibilities are clearly defined
and distributed to COO, CFO and H-HR as
appropriate.
The Audit Committee has been reviewing the
effectiveness of Internal Control Systems and
has been reporting to the Board on regular
basis.
60
Nabil Bank Limited
04
EMPLOYEES
Good management of human resources is

critical for implementing business strategies
and meeting corporate goals. To this end,
careful attention and devotion from supervisor
level staff is indispensable. In our
organizational set up all senior staff members
enjoin to act as HR managers in their areas of
operations by implementing policies and
guidelines of the Bank, by nurturing talent,
sharing knowledge and putting in place strong
ethical practices while conducting Banks
businesses. On the other hand, the HR
Department is responsible for monitoring and
ensuring that Banks HR policies are
interpreted consistently across the Bank.
Over the years we have witnessed that

employees are the ones shaping a high
performance culture. We encourage
managers to promote open communication
at all levels, both vertical and lateral.
Communication strengthens sharing of
knowledge, ideas and viewpoints. Issues
affecting individual job areas and the overall
financial performance of the Bank are
regularly communicated to our staff.
Our core corporate values CRISP Customer
Focused, Result Oriented, Innovative,
Synergistic and Professional are embedded in
our daily work culture. Operating in a service
industry we believe every action of ours
should create some value to our customers.
The Bank has implemented a staff Code of
Conduct which follows this very essential
theme and is abided by all staff in action.
Employee Bylaws acts as a framework that

guides Human Resource Management
practices within the Bank. This document is
approved by the Board and also by the
regulatory authority. Principles of ethical work
culture, open communication, objective career
development, transparency in remuneration
and pay - performance correlation support HR
practices employed within the Bank.
The strength of our HR rests in its diversity

and fair treatment. Our culture respects
individual differences and learning aptitudes.
We do not allow discrimination on any
grounds be it social, religious, hierarchical or
gender. Any kind of discrimination or any
form of harassment is dealt with as per
disciplinary provisions in the Employee ByLaws. At Nabil, employees perceive that
their views are heard, their concerns are
attended and their career progression is
based on objective performance assessment.
Towards this end, the Bank has
The good practices that the bank has adopted

consistently have never been affected by the
growing size of HR strength. As at 15th July
2013 the Bank has employed 742
permanent employees and 528 contract
employees. Contract employees include 525
outsourced staff (clerical staff - 104 and
support staff - 421) and 3 staff under direct
contract with the Bank (support staff - 2 and
CEO). The following table provides level wise
permanent employees head count:
STAFF CATEGORY
MALE
Senior Manager*
Middle Manager
Officers
Assistants
Support Staffs
Total
* employees bearing corporate title AGM and above excluding CEO
37
135
FEMALE
39
241
160
523
219
102
14
TOTAL
43
174
401
116
742
implemented point scoring based appraisal

rating system that endeavors objective
assessment of employees' performance
through 12 dimensions. Moreover, appraisal
allows appraisee staffs to put their comment
on appraisal.
We have a recognized Staff Union in the
Bank. The management and the union
execute a collective bargaining exercise once
every two years. Collective Bargaining
exercises have been harmonious throughout
and has never resulted disruption in normal
banking operations and customer service.
RECRUITMENT AND
DEVELOPMENT
The Bank employs a fair recruitment policy.

All new appointments and promotions are
planned and approved as part of the annual
HR budget. Fresh appointments are made at
support, assistant and management trainee
levels. However, the Board has the authority
to make appointments at other levels in
order to bring in appropriate set of skills in
existing or new areas of businesses. Based
on the requirements of business expansion
the Bank may outsource its staff requirement
to external party. All appointed staff, whether
permanent or contracted, will adhere to
employment standards as stipulated by the
Employees Bylaws of the Bank.
Staff placements are assigned as best suited
for one's abilities and growth potential.
Performance appraisal system is fair and
career progression is based on objective
assessment of ones performance and team
work. Placement transfer, job rotation, job
enrichment, succession planning and cross
functional teams are some of the tools we
employ for employee development.
Individual training and development needs
form an important component of annual
performance appraisal of all staff.
61
REMUNERATION AND BENEFITS
The quality of our Human Capital defines the

scale of our business success. Our business
stands on trust, relationships and ethical
conduct. Our strategy is in being proactive to
attract, recruit, develop and retain the best
people. We need to constantly ensure that
we have the required set of skills, knowledge
and expertise in our Human Pool. We believe
staff commitment and motivation towards
the job is achieved over time, which is
affected by multiple factors among which
financial benefits is a very important one.
Market forces constantly pose a challenge to
our HR strategy and retaining the best brains
is not easy. Remuneration is one of the major
factors affecting ones decision about joining,
continuing or leaving an organization and we
appreciate this fact. However, our
experiences over the years suggest that other
important factors do affect in making the
choice of employment. Accordingly we
attract the best people who wish to work in
an organization having solid corporate
values, ethical work culture, reputed brand
performance and the one offering excellent
work experience and career development
opportunities. Our remuneration policy
covers the following:
Salary structure comprises of fixed basic
pay and variable incremental pay.
Salary structure is maintained based on
documented position grades of individual
employee as per his her annual
performance appraisal ratings. The grade
earned in annual performance appraisal
ratings has an incremental impact in the
basic pay.
Salary structure is reviewed every two
years with reference to national economic
scenario, banks business performance
and market practice. Any one or both the
basic and variable component may be
revised as appropriate.
The bonus element of annual pay is tied
up to the overall performance of the Bank
at the end of each financial year. This
instills a winning spirit in our employees,
drives business performance and coincide
their own interests with the interest of our
shareholders.
Banks contribution to employees Gratuity
Fund and Provident Fund is
proportionately linked to the number of
years in employment and the last drawn
salary at the time of making such
contribution.
Besides, our employees receive the benefit of

housing loan, vehicle loan and personal loan
facilities at concessional rates as per their
individual eligibility in line with the
Integrated Staff Loan Policy approved by the
Board.
TAX ON REMUNERATION
INCOME
All pay and benefits paid to the employees

are taxed at source as per the provisions of
Income Tax Act 2002.
Payment to employees in the form of salary,
allowances, leave encashment, overtime
payment, incentives, commission, bonus,
gifts, retirement benefits etc. constitute their
taxable income from employment. In line
with the provisions in Income Tax Act
(amended by Finance Ordinance 2013),
employees taxable income is taxed applying
the tax rates presented in the table below:
The Act allows certain deductions from
taxable income, the most relevant in case of
our employees being contribution to
approved retirement fund up to
NRs.300,000 or 1/3rd of total assessable
income whichever is lower and life insurance
premium expenses of self and spouse upto
NRs.20,000. Additionally, donation up to
NRs.100,000 or 5% of total assessable
income, whichever is lower, is also available
for deduction.
The Act offers female employees the benefit
of 10% tax rebate on their total tax liability
for a given year. Similarly, in case of
physically disabled employees the base slab
for 1% taxation is raised by additional 50%
to NRs.300,000 for single and
NRs.375,000 for couple.
TAXATION ON RETIREMENT
BENEFITS (GRATUITY AND
PROVIDENT FUND)
Income Tax Act 2002 applies the following

tax rates in payment of post-retirement
benefits i.e. when the Gratuity and Pension
Fund is paid to the employee upon his / her
retirement from the employment.
TAX RATE
ACCUMULATED FUND NRS.
5%
Balance Amount
Tax Free
Higher of 500,000 or
50% of Total Fund
Prior to pronouncement of Income Tax Act

2002, the fund accumulated in gratuity and
provident fund was tax free. All such amount
held in gratuity and provident fund and
contributed by employer before the Act came
into effect will not be taxed at the time of
making payment to concerned employees.
CONTRIBUTION TO NATIONAL
LEVEL WELFARE FUND
The prevailing Bonus Act 1974 (2030 B.S.)

requires the bank to deposit 30% of the
residuary amount, after distribution of bonus
from the allocated amount for staff bonus, at
National Level Welfare Fund (NLWF)
operated by the Government of Nepal.
Remaining 70% is to be deposited at
Welfare Fund established in accordance with
Section 37 of the Labour Act 1992 (2048
B.S.).
The Bank has deposited a total of NRs.258
million with NLWF in respect of staff bonus
allocated for up to Financial Year 2011/12.
In respect of undistributed staff bonus for
current financial year (2012/13), the Bank
will be depositing NRs.64.93 million at
NLWF.
TAX ON REMUNERATION INCOME

TAX RATE
1%#
15%
25%
35%*
ANNUAL INCOME SLAB NRS.
SINGLE
200,000
200,001 300,000
300,001 2,500,000
Above 2,500,000
COUPLE
250,000
250,001 350,000
350,001 2,500,000
Above 2,500,000
# Social Security Tax.

* The Act provisions 40% surcharge on tax calculated on taxable income above NRs.2,500,000 applying tax rate
of 25% resulting effective tax rate of 35% for that slab.
Senior
Management
Team
ABOVE LINE: LEFT TO RIGHT

Deepak Shrestha, Head - Corporate Banking and Infrastructure
Mohan Subba, Head - Treasury
Rajesh Kumar Upadhyaya, Head - Information Technology
Jyoti Bahadur K.C., Head - Central Trade Operations
Gyanendra Pratap Shah, Sr. Relationship Manager, Corporate Banking
Anil Gyawali, Chief Executive Officer
Yagya Prasad Sharma, Branch Magager, Birgunj
Binaya Nath Neupane, Senior Credit Analyst
Rajendra Bahadur Malla, Head - PLU Credit
Praveen Raman Parajuli, CEO- Nabil Investment Banking
Anil Kumar Khanal, Chief Risk Officer
BELOW LINE: LEFT TO RIGHT

Krishna Dutta Bhattarai, Chief Finance Officer
Binaya Kumar Regmi, Chief Operating Officer
Sanjay Nepal, Sr. Relationship Manager, Corporate Banking
Saroj Pyakurel, Head - PLU
Namita Dixit, Sr. Relationship Manager, Infrastructure & Project Financing
Neelam Tuladhar, Head - Branches and Distribution Network
Neena Thapa, Head- Credit Risk Management
Gyaneshwor Acharya, Head SME
Ramesh Prasad Lohani, Head- Deposit Relation Management
64
Nabil Bank Limited
04
CORPORATE SUSTAINABILITY
The banking institutions play an important

role in the economic development of a nation.
Banks collect scattered deposits and make it
available to the entrepreneurs seeking fund for
business activities. In doing so they provide
safety of the depositors, fair return to them
and equally support to establish, operate and
expand business ventures which otherwise
would not have been possible for the want of
funding. This has manifold benefits to the
nation which ignites production, distribution
and consumption in the country. The whole
economic system achieve much needed
multiplier effect through banks as they
promote capital formation, employment
generation, international trade and
government revenue.
Myriad of risks continually pose a threat to
the success of the Bank. At times, a bank
goes out of the scene if its business model
adopted is not sustainable. This requires
forward looking on the part of management,
where a business approach should be
considered on long term sustainability basis
which creates long term value to all the
stakeholders and equally by managing risks.
At Nabil we have always kept a longer term
perspective on our business. We also consider
aspects that are important in protecting social
values and environmental balances. We have,
long before, recognized that our business
goals are inseparable from the society and
environment where we operate in. The results
of our operations must be sowed back into
the environment and communities. This
approach has helped us achieve long term
shareholders value by profiting from positive
public perception, sustainable branding,
higher employee satisfaction and overall
productivity.
We ensure that our business goals continue to
remain sustainable through the following
initiatives.
TRANSPARENCY AND
GOOD GOVERNANCE
The transparency and good governance

practices are topmost priority for any
institution and the financial sector which runs
its business through the trust of public needs
to keep it at helm. The debacle of many big
enterprises pre and post financial crisis across
the globe has rightly portrayed the greater
importance of good governance practices. And
recent downfall of some of the financial
institutions in Nepal itself has given a good
lesson to all of us to embrace good
governance practices.
In Nabil, we have always thrived on
disclosing our business affairs transparently to
the public, regulators and to all its
stakeholders. The disclosure requirements
provisioned by the Nepal Rastra Bank through
guidelines and circulars, Companies Act,
Securities Exchange Act and Rules, Banks
and Financial Institutions Act, and Nepal
Accounting Standards are duly complied with
and are performed consistently at all times. In
addition, the information are adequately
provided to the statutory auditors, bank's
internal auditors and NRB Inspection team so
as to enable them to make fair assessment on
our operation and to form an independent
opinion in respect of bank's financial position
and performance. The Bank has always
considered the suggestions and feedbacks
from the auditors with highly positive and has
implemented recommendations as
appropriately. The bank firmly believes that
good corporate practices and transparency are
key ingredients for its long term sustainability
and thus is determined to inculcate a culture
of living up with high professional and ethical
standards across all levels.
CONTRIBUTION TO
NATIONAL ECONOMY
Our commitment of arranging finances to

national priority projects like those in
renewable energy sector and to export based

industries is high. We have also prioritized
financing on sectors that use local materials,
generate employment and replace imports.
Toward this end, the Bank, through the
separate division - Infrastructure and Project
Financing, has accounted big volume lending
in large sized national priority projects viz.,
hydro projects and cement industries. Retail
consumer loans that keep the domestic
economy vibrant and stable also occupies a
significant portion in our total lending
portfolio.
The recognition we hold from the national
treasury as one of the highest contributors in
the form of payments in taxes gives us a great
satisfaction. The proliferation of commercial
activities we have facilitated through
extending credit and arranging foreign trade
also generate significant tax revenues to the
government. And Nabil's regular contribution
to the government has been a feature in the
banking industry for last several years. In the
review year alone, we set aside a current tax
provision of NRs.947 million and deposited
NRs.937 million in the government's coffer.
Apart from this we also contributed NRs.6.7
million to the government in the form of
properties and vehicle taxes. Within our
national economy Nabil desires to function as
a great multiplier.
Contribution to government in any form is
extremely essential to build the nation and we
cherish this responsibility for our own
satisfaction and longevity.
SPREADING FORMAL
BANKING CHANNELS
It is a well accredited fact that middle and

low income group constitute major portion of
our communities. As a leading commercial
bank we acknowledge we have a role in
bringing this segment into the formal banking
ambit. To maintain a focus on this segment
65
we have constituted a separate SME and

Microfinance division. This division is
specialized in catering to the specific financial
requirements of fresh entrepreneurs and the
growth aspirants.
All these drives must have brought the larger

mass into banking net and have increased
their contribution accounted in the national
economy.
Our SME project is implemented through all

our branch offices. With our focused approach
relationship managers in the branches share
best business practices and management
skills with the customers and motivate them
for achieving better and higher in order to
ensure success of such entrepreneurial
ventures. As a financing partner our
contribution has increased economic activities
at local level generated employment, fostered
investment and increased consumptions.
Environment is one of the crucial aspects that

we need to look it seriously in order to
preserve, protect and improve if possible for
the generations to come. Global warming,
climate change, drying up of water resources,
extinction of many species of flora/fauna and
seasonal odds have now become regular
headlines across the globe which perhaps is
the outcome of adverse human actions.
Our Microfinance project is operated through

selected partner organizations (MFIs) viz.
microfinance institutions, cooperatives and
non-governmental organizations working as
financial intermediaries. We have also
invested on promoter equity in selected MFIs
and extended our managerial expertise
through representation on their Board. We
have also extended credit to Youth Self
Employment Project of the government. Our
target end users are economically
disadvantaged population and they receive
micro credit through our partner organizations
to which we are extending credit in bulk to
these MFIs. These initiatives are intended for
self-employed income generating activities or
small businesses with which the aspirants
having skills and energy do not deprive of
financial need and make their living standard
up-graded.
Personal Lending Unit in the bank is well
equipped to take care of the funding
requirement against personal needs like
home, vehicle, and education etc. Financing
these activities give a kind of satisfaction and
make the life of common people easier and
disciplined. Buying a house with own money
for a salaried person may need him to wait for
decades, whereas bank can meet the
requirement of the person to own a house and
extend the credit for a period as high as 1520 years, who on installment can pay off the
loan gradually and enjoy a decent life with
comfort and ease.
ENVIRONMENTAL INITIATIVE
To neutralize the impacts of our adverse

actions, we are committed towards facilitating
for development of clean and renewable
energy projects. Some of the initiatives we
have undertaken as of date amply speak of
our priorities. By mid-July 2013 we have
arranged a total financing commitment of
NRs.5.95 billion for construction of a number
of hydropower projects. Projects where we
have participated as financing partners hold a
combined installed capacity of 148.93
Megawatt of clean energy. In our daily
business operations we have reduced
consumption of paper, water and fossil fuel
energy through application of technological
developments and energy efficient
equipments. Investments in Core Banking
System, Management Information System and
various application software have helped us
reduce paper consumption to a greater extent.
Up-gradation in our e-banking channels
including mobile, internet and cards have
allowed our customer to execute a number of
banking transactions without visiting our
offices thereby saving significant time and
energy which would otherwise have been
consumed. We believe our small steps will
pave the way for great leap for entire mankind
as we go along with the concept.
HUMAN RESOURCE
MANAGEMENT
Human resources are the drivers of banks

success. Employees, as stakeholders, are core
to every activities as their serving attitude and
perfect job knowledge creates value for the
customer and ultimately for the bank. We

encourage a learning culture throughout the
organization and motivate them through
enrollment in various training programs for
upgrading their job skills, personality
development and emotional intelligence.
We equally implement excellent
compensation and benefits to the employees
instilling in them the vital feeling of social and
financial security for them, their children and
their families. During the review period, Nabil
incurred a cash remuneration of NRs.638
million towards its employees while it also set
aside NRs.316.3 million as bonus. Apart
from cash remuneration, the bank has also
provisioned loan facilities at concessional
rates to all the staffs and vehicle facilities to
managerial level staffs. The Bank has also
prioritized in providing required infrastructure
and internal ambience so that employees
could discharge their duties at comfort
thereby delivering results with efficiency and
with increased productivity.
Nonetheless, at the end of the day whatever
we compensate, it is the talent, the skill, the
maturity and dedication of staff that
determines the result. We promote this
culture in the bank and provide opportunities
to instill it in all the employees. Till date, the
bank's employees by and large have set a
high standard of efficiency and thus we have
been reaping the benefits for years. Moreover,
financial industry has also been the
beneficiary of resource pool which comprised
of many individuals who at some point of
time had been associated with Nabil as a
staff member.
The results of our Employee Survey 2013
indicated very high degree of employee
commitment and expressed satisfaction over
the career development. Employees also
expressed high ratings for their present job
experience and organizational leadership. The
Bank understands these as essential drivers of
success and long term sustainability.
66
Nabil Bank Limited
04
CORPORATE SOCIAL RESPONSIBILITY
The basis of the very existence of a corporate

body lies in creating values and then sharing
the values with its stakeholders. In a broader
perspective, stakeholders do not only entail
shareholders but encompass a larger
spectrum that include employees,
depositors, borrowers, creditors, regulators,
business partners and the general public.
The institutions like banks interact
extensively with these stakeholders and it is
very common to expect sharing of fair values
by the stakeholders. Nabil reveres such
expectation and feels a moral duty to share
created value fairly with the stakeholders.
The sharing of value generally happens to be
the compensation of value received which
could take form of capital or services.
However at times we share our value with
our stakeholders, particularly the
philanthropic institutions or individuals
working for noble cause, with no such
expectation of value in exchange or in
monetary terms. Such contribution has been
an essential part of Nabil's business which is
evident through its involvement and
partnerships with various institutions on
different occasions from the last so many
years.
thereby enabling sustainable and resilient

mountain development. With improvement
in facilities, the immediate beneficiaries like
farmers, researchers, students and
development practitioners are likely to get
immense benefit from the park. The Bank
has contributed NRs.1.35 million to ICIMOD
and for this it has recognized the Bank as its
Gold Partner.
During the year 2012-13, the Bank entered

into a three years partnership with the
International Centre for Integrated Mountain
Development (ICIMOD) for improving
facilities at the ICIMOD Knowledge Park at
Godavari. The ICIMOD is engaged in
betterment of the livelihoods of people
residing in hilly and mountainous areas
through knowledge sharing and cooperation
Apart from this, the Bank also provided

NRs.200K for organizing an orientation
program on "Zero Budget Natural Agriculture
Farming" by the Commercial Agriculture
Alliance (CAA). CAA is a non-profit making
company incorporated to promote
commercial agriculture in Nepal by
developing alliance with the agricultural
stakeholders. Commercial agriculture is
In addition, the Bank has also made

contribution of NRs.100K for environmental
awareness event organized by Alternative
Energy Promotion Centre (AEPC). As a part
of Government's program to disseminate and
promote clean cooking solutions to 3 million
households by 2017, the AEPC organized
the "Clean Cookstove Market Place 2013"
event during Mid of July 2013. The event,
which consisted of seminar, expo and field
visit was participated by international
entrepreneurs, national entrepreneurs,
investors, bankers, development partners
and policy makers. Such events are stepping
stones towards achieving broader goals
formulated specifically for the protection of
environment and Nabil is privileged for being
part of such noble objectives by any means.
something that Nepal should look seriously

for future since majority of its citizens still
rely heavily on agriculture for their livelihood
and more importantly Nepal has not become
independent on food as of date. Recent
figures on import and export figures (NRs.
20 billions vs. NRs.10 billions in year 201213) of agricultural produce substantiates this
fact. We believe such programs will
ultimately help in educating concerned
stakeholders and motivate for doing
commercial farming on large scale.
Furthermore, the Bank has contributed
NRs.300K for constructing Traffic Police
Office Building at Durbar Marg and
NRs.120K to bear the educational cost of
one girl child at Shree Gargi Kanya Gurukul
Pratisthan. The shuttle service to the doctors
volunteering their service at free health
camps organized weekly at Indrawati
Community Health Centre, Sipaghat Dhat
Khola, Sindhupalchowk, Nepal were also
continued during the year.
These all speak plenty about Nabils selfless
commitment towards society it is part of. As a
matter of creating a strong bond with the
society, Nabil will strive on doing everything it
is capable of. It would be of great delight
doing something commendable towards the
society, whether explicit or implicit, through
creation of values in partnership with one and
all for the community. In the days to come,
the Bank's major CSR objectives would be
directed towards regeneration of environment
and economic prosperity of deprived and
disadvantaged groups of the nation.
67
Nabil Bank and ICIMOD

partner to promote
sustainable green
technologies and biodiversity
conservation. Mr. Anil
Gyawali, CEO of Nabil Bank
(R) handing over cheque to
Dr. David Molden. Director
General of ICIMOD
Nabil Bank provided

financial assistance to
Traffic Police for
construction of their office
building at Durbarmarg. Mr.
Anil Gyawali, CEO of Nabil
Bank(2nd from Right)
handing over a cheque to
Mr. Sitaram Hachhethu,
coordinator of Traffic Police
Building Construction
Committee (3rd from Left)
Nabil Bank's token support

to Shree Gargi Kanya
Gurukul Pratisthan for
educating girls. Mr. Anil
Gyawali, CEO of Nabil Bank
(2nd from Right) handing
over a cheque to Mrs. Angur
Baba Joshi, Senior Social
Worker & Founder Patron
(3rd from Left)
68
Nabil Bank Limited
Director, Mr. Shambhu Prasad

Poudyal and Nabil Union President,
Mr. Purna B Bhat with Nabil Union
officials and staff members during
a program organized for handing
over relief materials and cash
collected for Far Western Region
Flood Victims.
Staff members participating

in blood donation program
organized by Nabil Union.
69
Nabil Cricket Team during Soaltee Crown Plaza

Super Six Cricket Tournament.
Nabil Badminton team during a tournament.
05
FINANCIAL
STATEMENTS AND
OTHER INFORMATION
05
STATEMENT OF DIRECTORS RESPONSIBILITY
The statement of directors responsibilities

which should be read in conjunction with the
Auditors Report addressed to the shareholders
of the Bank is introduced in order to
distinguish the respective responsibilities of
the Board from that of auditors in relation to
the preparation and presentation of financial
statements of the Bank. The Board of
Directors are responsible for preparing Annual
Report, the separate financial statements of
the Bank and the consolidated financial
statements of the Bank and its subsidiary(ies)
in accordance to the prevailing laws and
regulations of Nepal.
Section 108 together read with Section 109 of
the Companies Act 2006 of Nepal prescribes
the ultimate responsibilities of the Board of
Directors to prepare the financial statements of
the Company to its shareholders for
presentation in AGM. Further, Section 2(4) of
Directive 20 of NRB Unified Directive 2013
prescribes preparation and presentation of
consolidated financial statements of the Bank
and its subsidiary(ies) in addition to the
preparation of separate financial statements in
line with Directive 4.
Though the accounting standard for
consolidation of financial statements has not
been implemented yet in Nepal, the Bank
takes the guidance of IFRS 10 "Consolidated
Financial Statements" for its preparation. NAS
1 Presentation and Preparation of Financial

Statements and Section 109(2) of Companies
Act 2006 require companies to prepare
financial statements that achieve fair
presentation of its financial position, financial
performance and cash flows of the relevant
period.
In preparing the consolidated and separate
financial statements, the directors are
required to:
select suitable accounting policies and then
apply them consistently;
make judgements and estimates that are
reasonable and prudent; and
state whether they have been prepared in
accordance with NAS.
The directors are required to prepare the
financial statements on the going concern
basis unless it is not appropriate. Since the
directors are satisfied that the Group and the
Bank have the resources to continue in
business for the foreseeable future and there
are no indicators that casts the Banks and its
subsidiarys going concern assumption in
doubt, the financial statements is continued to
be prepared on the going concern basis. It is
fundamental that the directors are also
responsible for keeping adequate accounting
records that are sufficient to show and explain
the parent companys transactions and
disclose with reasonable accuracy at any time
the financial position of the parent company

and enable them to ensure that its financial
statements comply with the NAS. Section 1(7)
of Directive 6 of NRB Unified Directives 2012
specifies the requirement of maintaining
records of transactions up-to-date at all times.
Moreover, it restricts the directors to
add/modify official accounting records in the
personal capacity. Further, the directors have
general responsibility for taking such steps as
are reasonably open to them to safeguard the
assets of the Group and to prevent and detect
fraud and other irregularities. As such, the
Bank and its subsidiary have implemented
policies, procedures and mechanisms that are
intended to mitigate the risks that may arise
due to control lapses. Any fraud detected
during the relevant financial period is reported
in Notes to Accounts along with the impact of
such frauds in the financial statements. The
Bank has constituted Audit Committee that
comprises of three non-executive directors and
the Head Internal Audit who is the secretary of
the Committee.
The Audit Committee functions independently
and reports directly to the Board of Directors.
On behalf of the Board
Krishna Bahadur Manandhar
Chairman
71
05
DISCLOSURE OF INFORMATION
UNDER SECTION 109(4) OF COMPANIES ACT 2006
a. Business review of last year - This has

been disclosed under sections C.
Achievement of Current Year under 02.
Operating and Financial Review of the
Directors Report.
b. Any impact that caused to the business of
the Company due to national and
international condition Nepal being import
based economy, depreciation of NPR in
comparison to foreign currencies has
contributed to push inflation rates further as
national consumer price index surged to 9.9%
in comparison to 8.3% of last year. This has
adversely affected national economy as well as
the entire banking industry. Huge trade deficit,
suppressed GDP growth and intense
competition are some of the impediments in
robust growth of the business.
Prolonged power crisis, rising cost of
petroleum products due to significant
depreciation of NPR and effects of rising
inflation all have contributed to increasing cost
of operations.
c. Current years (2013/14) achievement
until the date of preparation of Report from
the Directors and Board of Directors view on
future activities of the Company:
The adverse impact of political deadlock,
excessive liquidity in some period and liquidity
crunch during some period and challenges of
limited investment opportunities in the review
year 2012/13 is likely to continue in the
financial year 2013/14. In the absence of new
policies and attractive programs that will lure
growth in investments, the possibilities on
growth of business activities is also not likely.
Similarly, policy changes on multiple banking
facilities, interest spread on investments and
deposits are also likely to bring challenges to
the banking community. There is also a
likelihood of adverse impact on the income

deriving from Non Deliverable Forwards.
Further, due to higher number of banks and
financial institutions, the banks' operations
and expansions are also likely to become more
competitive and challenging than ever.
In the mean time, your Bank has managed to
achieve very good result in the first four
months. The Bank's operating profit (before
loss provision) in the first four months is
NRs.1,216.6 million, which is higher by
NRs.106 million or 9.02% in comparison to
the profit during the same period of review
year 2012/13. In addition, the growth under
deposit is 10.6% or NRs.6.76 billion than the
Mid July, 2013 while growth under loans and
advances is 3.5% or NRs.1.65 billion than the
Mid July 2013. The major challenges during
the year 2013/14 for the Bank are to maintain
the quality of asset, manage liquidity and raise
loans and advances to expand the income.
Despite challenges in economic and social
outlook, the Bank shall endeavor to maintain
the growth rate of earlier years in the current
financial year as well.
In line with the mission of becoming "First
Choice Provider of Complete Financial
Solutions" the Bank like in the earlier years
shall utilize the resources spread across the
nation effectively to give optimum return to the
investors, thereby creating direct and indirect
employment and also assisting in the nation
building through the contribution to the
national coffer to achieve Bank's broader
goals. The Bank will always make a persistent
effort to contribute in the sectors prioritized by
the nation. In this connection, the Bank in
addition to enhancing the quality of the
services, it shall also increase investments in
productive sectors, agriculture sector and
energy sector. Further, the Bank shall also
formulate strategies to initiate on

implementing technology based services and
penetrate newer markets.
d. Industrial and professional relations of the
Company The Bank maintains cordial
relationships with all its stakeholders including
the staff members. The Bank has been imparting
the feeling of belongingness by maintaining
harmony amongst employees of all hierarchy. It
has always encouraged the management and the
employees union to interact for improvement of
Banks systems and processes. Such an open
culture where every individual employee senses
his/her role on attaining Banks common
objective is believed to be an essential ingredient
for corporate success. The Bank has put in all
efforts to drive all employees to work together in
the unison with common mission to make the
Bank as 1st Choice Provider of Complete
Financial Solutions.
e. Changes in the Board of Directors and the
reason thereof Disclosed in A.5 Changes in
the Board under 05. Governance.
f. Main factors that affect business activities:
1. Increased Competition
2. Adverse political environment that affect
stability in the business
3. Lack of investment growth opportunities
g. Any remarks and observation stated in the
Independent Auditors Report and Board of
Directors response thereon No material
remarks.
h. Amount recommended for distribution of
dividend NRs.40 per share cash dividend
and NRs.25 per share stock dividend (at the
rate of 1 share for every 4 shares).
72
Nabil Bank Limited
i. Details of shares forfeited (number of share,

face value, amount received by the Company
prior to forfeiture, amount received by the
Company after putting such forfeited shares
into subscription and amount refunded on
account of forfeited shares) - The bank has
not forfeited any shares.
j. Review of the progresses made by the
Company and its subsidiary(s) in the current
fiscal year 2012/13 and the position of the
same at the end of fiscal year Disclosed in C.
Achievement of Current Year and H. Financial
position and performance of Nabil Invest under
02. Operating and Financial Review.
k. Main activities carried out by the Company

and its subsidiary(s) in last fiscal year and
any significant changes in the business
activities of the Company and its subsidiary
during the same period:
Nabil Bank Commercial banking activities
like credit disbursement, investment, deposit
mobilization, remittance, card and other
financial services.
Subsidiary company Merchant banking
activities like IPO management, wealth
management, securities underwriting, mutual
fund scheme management, depository
participant's service and share registrar service.
No changes in the transactions of the Bank
and its subsidiary company except launching

of Mutual Fund Scheme - Nabil Balance Fund
- 1 during year 2012/13.
l. Any information given to the Company by
its principal shareholder (who holds 5% or
more shares of the Company) during the
financial year No such information provided
by the principal shareholders.
m. Shares held by the directors and officials
of the Company and information received by
the Company on their involvement in trading
of shares:
SHARES HELD BY THE DIRECTORS AND OFFICIALS

OF THE COMPANY AND THEIR INVOLVEMENT IN TRADING:
DESIGNATION
SHAREHOLDER NO.
DIRECTOR AND OFFICIALS
Director
2663
Mr. Shambhu Prashad Poudyal
Director
14990
Mr. Krishna Prasad Acharya
Manager
8258
Mr. Kanhaiya Lal Rajwant
Director
CEO
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
Manager
90
464
5076
5761
4852
2174
4866
4804
4733
4821
4773
8898 and 11391
Mr. Dayaram Gopal Agrawal

Mr. Anil Gyawali
OWNERSHIP
3930
2343
84
4047
70
Mr. Rajeshwor Lal Shrestha
192
Mr. Yugesh Lal Bijukchhe
490
Mr. Yagya Prasad Sharma

Ms. Neena Thapa
Mr. Deepak Shrestha

Mr. Binaya Regmi
Mr. Rajendra Bahadur Malla

Mr. Iswar Man Shrestha
Mr. Babu Ratna Bajracharya
246
662
742
891
4077
4552
596
Mr. Jaya Krishna Shrestha (248 and 706 units)
954
623
SHARES ACQUIRED DURING 2012/13
Officer
5367
Mr. Kamal Prasad Lacaul
Officer
17242
Mr. Rajeev Shrestha
Officer
Officer
Officer
5817
18058
13694
Mr. Prakash Basukala

Mr. Niraj Rajbhandari
202
26
93
Mr. Purna Dev Karanjit
98
Mr. Keshab Raj Subedi
100
Shares disposed during 2012/13

Officer
15011
73
n. Information provided on personal interest

of Board of Directors and their relatives
(nearest kin) regarding contract or agreement
done with the Company during the year
There is no record of such event/transaction.
o. Buyback of share by the Company, reason
thereof for buyback, number of share bought
back, face value of share and amount paid
during the buyback The Bank has not
bought back any share.
p. Information on existence of Internal control
system and if there is, its detail Disclosed in
point C. Internal Control under 05.
Governance.
q. Details of management expenses incurred
during the year Disclosed in Schedule 23
Personnel Expense and Schedule 24 Office
Operating Expense of financial statement.
r. Name list of members in the audit

committee, remuneration, allowance and
benefits they have received, the details of
activities of the committee and the details of
any recommendation by them:
As of 15th July 2013, the committee had
following members
1. Director D G Agrawal Convenor
2. Director K P Acharya Member
3. Mr. Ashish Sharma Member
Apart from sitting fee and per diem for
outstation visit of foreign directors, all directors
receive NRs.15,000 (net of TDS) on monthly
basis for newspaper/communication allowance
which was approved by 25th AGM held on
22nd September 2009.
Details of committee activities and the
recommendation are presented in point B.2.3
and B.2.4 under 05. Governance.
s. Dues payable to the Company by any
director, MD, CEO, principal shareholders
(holding share more than 5%) or their
relatives or firms or institutions in which they
have their involvement (interest) Disclosed
in Schedule 29 of the financial statement.
t. Remuneration, allowances and benefits

paid to director, MD, CEO and officials
Disclosed in Point 9 Related Parties
Disclosures of Schedule 33 Notes to
Accounts of the financial statement.
u. Uncollected dividend by the shareholder
NRs.41,097,769.
v. Information on asset bought or sold as per
Section 141 N/A
w. Details of related party transaction as per
Section 175 (transactions between
associated companies) Disclosed in Point 13
Related Parties Disclosures of Schedule 33
Notes to Accounts of the financial statement.
x. Any other details to be disclosed in the
Report from the Directors in accordance with
Companies Act, 2006 or other prevailing laws
Disclosed in appropriate part of this Report
and financial statements.
y. Any other pertinent details Disclosed in
appropriate part of this Report and financial
statements.
75
Consolidated Balance Sheet

as at 15 July 2013 (31 Ashadh 2070)
1. Share Capital

5. Borrowings
3,046,051,750
2,435,723,280
33,213,885
30,336,486
7. Bills Payable
300,000,000
63,506,102,707
54,905,676,208
974,736,560
811,907,760
529,597,845
66,872,707
1,225,973,710
Total
ASSETS
1. Cash Balance


1,140,212,319
1,050,668,504
(32,108,638)
(438,602,825)
K. B. Manandhar
S. P. Poudyal
D. G. Agrawal
Krishna Bhattarai
N. Chaudhary
Ashish Sharma
M. Ahmed
Chairman
Director
DATE: 06th September 2013

PLACE: Nabil Centre, Durbar Marg, Kathmandu
Director
Director
Director
878,461,243
894,495,291
Director
K. P. Acharya
Director
826,435,677
14,069,965,792
73,343,593,148
Anil Gyawali
3,681,980,327
16,344,425,612
2,219,166,754
Total
1,207,599,073
PREVIOUS YEAR Rs.
9. Other Assets
51,106,490
THIS YEAR Rs.
46,369,834,571
7. Fixed Assets
179,142,358
63,250,488,220
1,634,306,157
5. Investment
311,080,000
73,343,593,148
4,789,295,130
3,017,916,565
300,000,000
6. Deposits
Chief Financial Officer
PREVIOUS YEAR Rs.
3,661,043,984
3. Non Controlling Interest
THIS YEAR Rs.
41,605,682,634
-
1,559,862,820
63,250,488,220
As per our report of even date.
CA. L. D. Mahat
Partner
CSC & Co.
Chartered Accountants
76
Nabil Bank Limited
Consolidated Profit and Loss Account
For the period 16 July 2012 to 15 July 2013 (1 Shrawan 2069 to 31 Ashadh 2070)
PARTICULARS
THIS YEAR Rs.
PREVIOUS YEAR Rs.
1. Interest Income
5,721,105,506
6,138,866,625
Net Interest Income
3,534,804,564
2,985,926,271
222,385,463
207,295,626
2. Interest Expense
2,186,300,942
3. Commission and Discount
405,474,783
5. Exchange Income
489,051,079
6. Staff Expense
8. Exchange Loss
367,676,396
447,070,485
4,651,715,889
4,007,968,778
475,903,506
432,880,991
652,362,895
3,152,940,354
505,008,894
-
Operating Profit before Provision for Possible Losses
3,523,449,488
3,070,078,893
Operating Profit
3,495,998,577
2,656,130,213
24,727,701
27,450,911
6,058,572
413,948,680
9,939,751
3,526,784,850
2,666,069,964
3,509,330,636
2,663,033,215
958,123,456
723,698,440
(17,454,214)
319,077,852

Current Tax
731,904,979
5,791,658
Deferred Tax
15. Share of Non-Controlling Interest in the Profit of Susbsidiary
Anil Gyawali
K. B. Manandhar
S. P. Poudyal
D. G. Agrawal
Krishna Bhattarai
N. Chaudhary
Ashish Sharma
M. Ahmed
Chairman
Director

Director
Director
Director
(8,206,539)
2,226,686,260
1,693,491,387
Director
K. P. Acharya
Director
(2,201,147)
5,443,068
Net Profit/(Loss)
243,074,316
954,532,945
Prior Period Tax
(3,036,749)
2,769,072
CA. L. D. Mahat
Partner
CSC & Co.
77
Consolidated Profit & Loss Appropriation Account

Fiscal Year 2012/13 (2069/2070)
PARTICULARS
THIS YEAR Rs.
Income
1. Accumulated Profit up to Last Year (Restated Balance)
562,584,391
2. Current Year's Profit
3. Exchange Equalization Fund
1,693,491,387
5. Deferred Tax Reserve
7. Dividend Equalisation Fund
2,192,650,920
444,000,000
340,000,000
1. Accumulated Loss up to Last Year

2. Current Year's Loss
226,430
2,789,670,651
Expense
3. General Reserve
4. Contingent Reserve
1,000,000
5. Institution Development Fund

6. Dividend Equalization Fund
1,000,000
7. Employees Related Reserve
8. Proposed Cash Dividend
974,736,560
9. Proposed Stock Dividend (Bonus Shares)
811,907,760
609,210,350
10. Special Reserve Fund
405,953,880
11. Exchange Fluctuation Fund
12. Capital Redemption Reserve
24,000,000
28,800,000
13. Capital Adjustment Fund

2,154,126
15. Investment Adjusment Reserve
12,191,027
Total
2,067,292,063
16. Accumulated Profit/(Loss)
722,378,588
Anil Gyawali
K. B. Manandhar
S. P. Poudyal
D. G. Agrawal
Krishna Bhattarai
N. Chaudhary
Ashish Sharma
M. Ahmed

400,000
Total
Director
6. Investment Adjustment Reserve
Chairman
498,933,103
2,226,686,260
4. Capital Adjustment Reserve
PREVIOUS YEAR Rs.
Director
Director
Director
Director
K. P. Acharya
Director
8,193,129
34,211,760
1,630,066,529
562,584,391
CA. L. D. Mahat
Partner
CSC & Co.
Surplus on Revaluation of Properties
Currency Translation Difference
Contingent Reserve
Closing Balance
Investment Adjustment Reserve
2,436,841,400
Interest Spread Reserve
722,378,588
(12,191,027)
(2,154,126)
(24,000,000)
400,000
(1,000,000)
(444,000,000)
(609,210,350)
(974,736,560)
2,226,686,260
562,584,391
Exchange Fluctuation Reserve
Capital Adjustment Fund
Dividend Equalization Fund
under Hospitalization Scheme
Equivalent amount of medical expense
Proposed Stock Dividend
General Reserve Fund
Cash Dividend
Deficit on Revaluation of Properties
Issuance of Share Capital
Adjustments:
Net Profit for the period
recognised in the Income Statement
Net Gains and Losses not
2,436,841,400
Restated Opening Balance
Refund of Dividend Income
as per the Instruction of NRB
(6,884,263)
569,468,654
ACCUMULATED
PROFIT/(LOSS)
1,118,120
405,953,880
2,029,769,400
Adjustments in Fixed / Other Assets
Changes in Tax Accounting Policy
Error adjustment
from Cash Dividend
Fraction Share Adjustment
Bonus Share issued
Changes in Accounting Policy
SHARE CAPITAL
2,620,500,000
444,000,000
2,176,500,000
2,176,500,000
GENERAL
RESERVE
609,210,350
609,210,350
(405,953,880)
405,953,880
PROPOSED
BONUS SHARE
74,000
74,000
74,000
CAPITAL
SHARE
RESERVE PREMIUM
FUND
13,873,570
(400,000)
1,000,000
13,273,570
13,273,570
24,000,000
388,069
- (974,736,560)
1,118,120
(6,884,263)
TOTAL
AMOUNT
- 2,226,686,260
-
INVESTMENT
ADJUSTMENT
RESERVE
- 12,579,096
2,154,126
DEFERRED
TAX
RESERVE
- 150,300,000 2,578,000 44,729,567 106,610,260 6,707,095,735
INTEREST
SPREAD
RESERVE
- 126,300,000 2,578,000 42,575,441 94,031,164 5,454,757,966
EXCHANGE
EQUALIZATION
FUND
- 126,300,000 2,578,000 42,575,441 94,031,164 5,460,524,109
CONTINGENT
DIVIDEND
CAPITAL
RESERVE EQUALIZATION ADJUSTMENT
FUND
RESERVE
Nabil Bank Limited
Balance as on 16 July 2012
PARTICULARS
Consolidated Statement of Changes in Equity

78
79
Consolidated Cash Flow Statement

(For the period from 16 July 2012 to 15 July 2013)
PARTICULARS
(a) Cash Flow from Operating Activities
1. Cash Received
1.1 Interest Income
1.2 Commission and Discount Income
1.3 Income from Foreign Exchange Transaction

1.4 Recovery of Loan Written Off
1.5 Other Incomes
2. Cash Payment
2.1 Interest Expenses
2.2 Staff Expenses
2.3 Office Operating Expenses
2.4 Income Tax Paid

2.5 Other Expenses
Cash Flow before changes in Working Capital
(Increase)/Decrease in Current Assets
1. (Increase)/Decrease in Money at Call and Short Notice

2. (Increase)/Decrease in Other Short Term Investment
3. (Increase)/Decrease in Loans, Advances and Bills Purchase
4. (Increase)/Decrease in Other Assets
Increase/(Decrease) in Current Liabilities

1. Increase/(Decrease) in Deposits
2. Increase/(Decrease) in Certificates of Deposits

3. Increase/(Decrease) in Short Term Borrowings
THIS YEAR Rs.
1,634,682,264
PREVIOUS YEAR Rs.
3,504,297,743
6,507,803,903
6,960,784,041
350,245,632
419,236,920
5,399,592,282
512,714,664
10,441,593
234,809,732
5,866,808,864
447,070,485
16,770,964
210,896,808
(4,357,987,973)
(4,709,192,637)
(880,256,345)
(508,569,523)
(2,186,417,719)
(348,020,879)
(3,154,542,659)
(304,303,047)
(943,240,498)
(724,976,186)
2,149,815,930
2,251,591,404
(52,532)
(9,135,643,762)
(807,870,480)
(2,873,822,930)
(16,801,222)
(2,412,117,132)
1,626,076,101
173,944,342
(4,805,605,359)
(3,965,286,395)
8,620,510,096
3,664,823,471
(648,344,993)
8,600,426,499
(246,851,180)
5,221,899,862
-
(313,080,000)
(1,315,519,178)
(b) Cash Flow from Investment Activities
776,650,153
(1,058,810,249)
2. (Increase)/Decrease in Fixed Assets
(108,879,254)
(88,247,024)
4. Increase/(Decrease) in Other Liabilities
1. (Increase)/Decrease in Long-term Investment
3. Interest income from Long term Investment

4. Dividend Income
5. Other
(c) Cash Flow from Financing Activities
1. Increase/(Decrease) in Long term Borrowings (Bonds, Debentures etc)

2. Increase/(Decrease) in Share Capital*
4. Increase/(Decrease) in Refinance/facilities received from NRB
5. Dividend Paid
333,163,597
611,411,009
269,042,367
13,178,465
(8,102,434)
(241,557,213)
(1,188,558,463)
197,670,874
20,324,364
(807,979,612)
(609,991,078)
1,118,120
(809,097,732)
(609,991,078)
(e) Current Year's Cash Flow from All Activities
1,603,352,805
1,835,496,416
(g) Closing Cash and Bank Balance
5,897,398,811
4,294,046,006
(d) Income/(Loss) from change in exchange rate in Cash & Bank balance
(f) Opening Cash and Bank Balance
*Increment in share capital by virtue of issuance of bonus shares have not been reflected.
However, fraction share adjusted with Cash Dividend is disclosed as increment.
4,294,046,006
2,458,549,590
80
Nabil Bank Limited
Balance Sheet

SCHEDULE
THIS YEAR Rs.
PREVIOUS YEAR Rs.
1. Share Capital
3,046,051,750
2,435,723,280
300,000,000
300,000,000
4. Borrowings
3,643,092,761
5. Deposits
6. Bills Payable
311,080,000
63,609,808,199
55,023,695,253
974,736,560
811,907,760
529,597,845
179,142,358
66,872,707
Total
3,008,277,828
51,106,490
1,071,099,849
1,072,481,023
73,241,259,671
63,193,413,992
SCHEDULE
THIS YEAR Rs.
PREVIOUS YEAR Rs.
1,140,212,319
1,050,658,504
10
(46,938,948)
(456,816,781)
5. Investment
12
16,332,043,012
14,048,965,792
14
872,322,039
887,543,274
ASSETS
1. Cash Balance
4,789,295,130
11
1,634,306,157
13
7. Fixed Assets
41,605,682,634
16
Total
826,435,677
46,369,834,571
15
9. Other Assets
3,681,980,327
2,150,185,391
1,548,964,565
73,241,259,671
63,193,413,992
Schedules 1 to 17 form integral part of the balance sheet
Contingent Liabilities
Schedule 17
Table of Capital Fund
Schedule 30(A1)
Directors' Declaration
Schedule 29
Credit Risk
Schedule 30(B)
Credit Risk Mitigation
Schedule 30(C)
Operation Risk
Schedule 30(D)
Market Risk
Statement of Promoters' Loan
D. G. Agrawal
Krishna Bhattarai
N. Chaudhary
Ashish Sharma
M. Ahmed
Director

Director
Director
Director
Schedule 33
Comparison of Unaudited and Audited Financial Statement
S. P. Poudyal
Director
Schedule 32
Notes to Accounts
K. B. Manandhar
Chairman
Schedule 31
Principal Accounting Policies
Anil Gyawali
Schedule 30(E)
Principal Indicators
K. P. Acharya
Director
Schedule 34
Schedule 35
CA. L. D. Mahat
Partner
CSC & Co.
81
Profit and Loss Account
PARTICULARS
1. Interest Income
2. Interest Expense
SCHEDULE
THIS YEAR Rs.
PREVIOUS YEAR Rs.
18
5,702,122,918
6,126,854,828
3,515,938,047
2,971,364,359
209,905,066
201,084,866
19
Net Interest Income
3. Commission and Discount
20
5. Exchange Income
22
2,186,184,871
393,050,514
21
6. Staff Expense
23
8. Exchange Loss
22
489,051,079
Operating Profit before Provision for Possible Losses

25
26
Operating Profit


468,781,187
430,909,132
3,464,952,933
2,640,336,248
24,727,701
13,839,751
2,654,175,999
3,485,694,992
2,651,139,250
950,677,628
720,108,902
316,255,521
Current Tax
413,948,680
3,503,149,206
(17,454,214)
3,054,284,928
13,468,572
500,712,844
3,492,403,844
27,450,911
28
447,070,485
3,985,906,904
27
366,387,194
4,607,944,706
646,759,675
24
3,155,490,469
(3,036,749)
241,638,501
946,885,251
Prior Period Tax
728,302,031
5,791,658
Deferred Tax
(1,999,281)
Net Profit/(Loss)
2,218,761,843
(8,193,129)
1,689,391,847
Schedules 18 to 28 form integral part of the Profit and Loss Account.
Anil Gyawali
K. B. Manandhar
S. P. Poudyal
D. G. Agrawal
Krishna Bhattarai
N. Chaudhary
Ashish Sharma
M. Ahmed
Chairman
Director

Director
Director
Director
Director
K. P. Acharya
Director
CA. L. D. Mahat
Partner
CSC & Co.
82
Nabil Bank Limited
Profit & Loss Appropriation Account

Fiscal Year 2012/13 (2069/2070)
PARTICULARS
SCHEDULE
THIS YEAR Rs.
Income
1. Accumulated Profit up to Last Year (Restated Balance)
552,945,653
2. Current Year's Profit
3. Exchange Equalization Fund
1,689,391,847
7. Dividend Equalisation Fund
2,183,012,182
444,000,000
340,000,000
1. Accumulated Loss up to Last Year

2. Current Year's Loss
226,430
2,772,107,496
Expense
3. General Reserve
1,000,000
5. Institution Development Fund

6. Dividend Equalization Fund
1,000,000
7. Employees Related Reserve
8. Proposed Cash Dividend
974,736,560
9. Proposed Stock Dividend (Bonus Shares)
811,907,760
609,210,350
10. Special Reserve Fund
405,953,880
24,000,000
28,800,000

1,999,281
15. Investment Adjusment Reserve
12,191,027
Total
2,067,137,218
704,970,278
Anil Gyawali
K. B. Manandhar
S. P. Poudyal
D. G. Agrawal
Krishna Bhattarai
N. Chaudhary
Ashish Sharma
M. Ahmed

400,000
Total
Director
6. Investment Adjustment Reserve
Chairman
493,393,905
2,218,761,843
4. Capital Adjustment Reserve
PREVIOUS YEAR Rs.
Director
Director
Director
Director
K. P. Acharya
Director
8,193,129
34,211,760
1,630,066,529
552,945,653
CA. L. D. Mahat
Partner
CSC & Co.
Closing Balance
Investment Adjustment Reserve
Interest Spread Reserve
Exchange Fluctuation Reserve
Capital Adjustment Fund
expense under Hospitalization Scheme
Equivalent amount of medical
Contingent Reserve
Cash Dividend
Adjustments:
recognised in the Income Statement
Net Gains and Losses not
Currency Translation Difference
Restated Opening Balance
as per the Instruction of NRB
Refund of Dividend Income
Adjustments in Fixed / Other Assets
Error adjustment
from Cash Dividend
Fraction Share Adjustment
Bonus Share issued
PARTICULARS
2,436,841,400
2,436,841,400
1,118,120
405,953,880
2,029,769,400
SHARE CAPITAL
704,970,278
(1,999,281)
(12,191,027)
(24,000,000)
400,000
(1,000,000)
(444,000,000)
(609,210,350)
(974,736,560)
2,218,761,843
552,945,653
(6,884,263)
559,829,916
ACCUMULATED
PROFIT/(LOSS)
2,620,500,000
444,000,000
2,176,500,000
2,176,500,000
GENERAL
RESERVE
Statement of Changes in Equity
609,210,350
609,210,350
(405,953,880)
405,953,880
PROPOSED
BONUS SHARE
74,000
74,000
74,000
CAPITAL
SHARE
RESERVE PREMIUM
FUND
13,873,570
(400,000)
1,000,000
13,273,570
13,273,570
EXCHANGE
EQUALIZATION
FUND
INTEREST
SPREAD
RESERVE
DEFERRED
TAX
RESERVE
INVESTMENT
ADJUSTMENT
RESERVE
24,000,000
1,999,281
12,191,027
- 150,300,000 2,578,000 44,574,722 106,222,191 6,689,144,511
(974,736,560)
2,218,761,843
- 126,300,000 2,578,000 42,575,441 94,031,164 5,445,119,228
1,118,120
(6,884,263)
TOTAL
AMOUNT
- 126,300,000 2,578,000 42,575,441 94,031,164 5,450,885,371
CONTINGENT
DIVIDEND
CAPITAL
RESERVE EQUALIZATION ADJUSTMENT
FUND
RESERVE
83
84
Nabil Bank Limited
Cash Flow Statement

PARTICULARS

1. Cash Received
1.1 Interest Income
1.2 Commission and Discount Income
1.3 Income from Foreign Exchange Transaction

1.4 Recovery of Loan Written Off
1.5 Other Incomes
2. Cash Payment

2.2 Staff Expenses

2.4 Income Tax Paid
2.5 Other Expenses
1. (Increase)/Decrease in Money at Call and Short Notice

2. (Increase)/Decrease in Other Short Term Investment
3. (Increase)/Decrease in Loans, Advances and Bills Purchase

1. Increase/(Decrease) in Deposits
2. Increase/(Decrease) in Certificates of Deposits

3. Increase/(Decrease) in Short Term Borrowings
THIS YEAR Rs.
1,647,367,834
PREVIOUS YEAR Rs.
3,480,247,625
6,475,748,293
6,942,481,055
350,245,632
419,236,920
5,392,441,338
512,714,664
10,441,593
209,905,066
5,858,317,820
447,070,485
16,770,964
201,084,866
(4,339,373,075)
(4,892,143,360)
(873,217,310)
(695,216,492)
(2,186,301,648)
(342,890,893)
(936,910,692)
(52,532)
2,136,375,218
(9,076,787,611)
(807,870,480)
(2,873,822,930)
(3,157,092,774)
(301,733,260)
(721,299,612)
(16,801,222)
2,050,337,695
(2,406,880,684)
1,626,076,101
173,944,342
(4,805,605,359)
(3,965,286,395)
8,587,780,227
3,836,790,614
(589,488,842)
8,586,112,946
(241,614,732)
5,327,582,319
(311,080,000)
(1,339,519,178)
764,268,229
(1,039,939,081)
(107,699,734)
(85,750,103)
1. (Increase)/Decrease in Long-term Investment

4. Dividend Income
5. Other
1. Increase/(Decrease) in Long term Borrowings (Bonds, Debentures etc)
2. Increase/(Decrease) in Share Capital*
4. Increase/(Decrease) in Refinance/facilities received from NRB

5. Dividend Paid
312,747,281
602,271,209
257,210,723
20,588,465
(8,102,434)
(151,272,527)
(1,164,958,463)
194,150,121
16,619,364
(804,889,612)
(601,036,078)
1,118,120
(806,007,732)
(601,036,078)
1,606,746,451
1,839,272,466
5,882,568,501
4,275,822,050
*Increment in share capital by virtue of issuance of bonus shares have not been reflected.
However, fraction share adjusted with Cash Dividend is disclosed as increment.
4,275,822,050
2,436,549,584
85
Share Capital and Ownership
Schedule 1
(As at 15 July 2013)

PARTICULARS
THIS YEAR Rs.
PREVIOUS YEAR Rs.
2,500,000,000
2,100,000,000
2,436,841,400
2,029,769,400
2,436,841,400
2,029,769,400
1.4 Proposed Bonus Shares
609,210,350
405,953,880
1.6 Total (1.3 + 1.4 + 1.5)
3,046,051,750
2,435,723,280
THIS YEAR Rs.
PREVIOUS YEAR Rs.
50.00
1,218,420,700
1,014,884,700
1. Share Capital
1.1 Authorized Capital
a) 25,000,000 Ordinary Shares of Rs. 100 each
2,500,000,000
b) ...Non-redeemable Preference Shares of Rs.. each

c) Redeemable Preference Shares of Rs.. each
1.2 Issued Capital
2,436,841,400

1.3 Paid Up Capital
2,436,841,400

1.5 Calls in Advance
*Share Capital at the face includes paid up capital and proposed bonus shares.
2,100,000,000
2,029,769,400
2,029,769,400
Share Ownership
PARTICULARS
1. Local Ownership
1.1 Government of Nepal
1.2 "Ka" Class Licensed Institutions

1.3 Other Licensed Institutions
1.4 Other Entities
1.5 General Public
1.6 Others*
2. Foreign Ownership
Total
5.07
10.00
30.00
4.93
50.00
100.00
*Others include promoters shares divested by NIDC, which is freely traded in stock exchange, NEPSE.
123,514,400
124,846,400
731,052,400
608,930,800
243,719,400
120,134,500
1,218,420,700
2,436,841,400
202,996,800
78,110,700
1,014,884,700
2,029,769,400
86
Nabil Bank Limited
Details of Shareholders Holding 0.5% Shares

S.N.
PARTICULARS
NB International Limited
Nepal Industrial Development Corporation
Rastriya Beema Sansthan
Mr. Arjun Bandhu Regmi
Mr. Nirvana Kumar Chaudhary
Mr. Barun Chaudhary
Mrs. Sarika Chaudhary
Nepal Trust
Mr. Rahul Chaudhary
THIS YEAR
Rs.
50.00
1,218,420,700
5.07
123,514,400
9.67
0.90
0.89
0.85
0.78
0.59
0.59
Reserves & Surplus
235,581,800
21,825,100
21,717,300
20,704,700
19,062,200
14,447,200
14,428,100
Schedule 2

PARTICULARS
1. General Reserve
2. Capital Reserve
a. Share Premium

5. Other Reserve and Fund
a. Contingent Reserve
b. Institution Development Fund

c. Dividend Equalization Fund
d. Special Reserve Fund
e. Assets Revaluation Reserve

f.
g. Other Free Reserve (Interest Spread Reserve)
h. Other Reserve (Investment Adjustment Reserve)

Total
THIS YEAR Rs.
PREVIOUS YEAR Rs.
2,620,500,000
2,176,500,000
74,000
74,000
74,000
-
74,000
-
167,248,483
152,458,175
13,873,570
44,574,722
2,578,000
106,222,191
13,273,570
-
42,575,441
2,578,000
94,031,164
704,970,278
552,945,653
3,643,092,761
3,008,277,828
150,300,000
126,300,000
87
Debentures & Bonds
Schedule 3

PARTICULARS
1. 8.5% Bond of Rs. 1000 each
Issued in July / August 2008 with maturity in July / August 2018

(Redemption Reserve till date:Rs.)
2.
.% Bond/Debentures of Rs..each
Issued on with maturity on .
(Redemption Reserve till date:Rs.)
Total (1+2)
THIS YEAR Rs.
PREVIOUS YEAR Rs.
300,000,000
300,000,000
300,000,000
300,000,000
Debentures & Bonds
Schedule 4

PARTICULARS
A. Local
1. Government of Nepal
THIS YEAR Rs.
PREVIOUS YEAR Rs.
2. Nepal Rastra Bank (SLF)
4. Inter-Bank and Financial Institutions
311,080,000
3. Repo Liability
5. Other Organized Institutions

6. Others
Total
B. Foreign
1. Banks
2. Others
Total
Total (A+B)
311,080,000
311,080,000
88
Nabil Bank Limited
Deposits
Schedule 5

PARTICULARS
1. Interest Free Deposits

A. Current Deposits
1. Local Currency
1.1 Nepal Government
1.3 Other Licensed Financial Institutions

1.4 Other Organized Institutions
1.5 Individuals
1.6 Others
2. Foreign Currency
2.1 Nepal Government

2.5 Individuals
2.6 Others
B. Margin Deposits
THIS YEAR Rs.
7,271,123,319
PREVIOUS YEAR Rs.
6,572,215,166
5,322,049,977
5,139,289,623
106,574,321
170,855,227
4,687,122,966
3,992,576,131
297,511,499
230,841,191
9,916,978
284,707,641
681,233,646
1,949,073,342
1,432,925,543
15,886,470
12,681,359
1,847,325,212
1,333,179,156
85,861,660
-
87,065,028
-
959,008,907
682,910,236
2. Guarantee
310,454,309
268,782,546
4. Others
272,194,062
9,478,110
1. Employees
3. Letter of Credit
C. Others
1. Local Currency
1.1 Financial Institutions

1.3 Individual
2. Foreign Currency
2.1 Financial Institutions
2.3 Individual
Total (A+B+C)
5,965,754
370,394,782
4,377,307
400,272,273
221,716,407
162,252,012
10,000,000
202,526,407
14,019,708
158,371,112
13,260,399
188,506,699
135,110,713
19,190,000
19,190,000
-
8,451,848,633
3,880,900
3,880,900
7,417,377,414
Contd.
89
Deposits
Schedule 5
Contd.
PARTICULARS
2. Interest Bearing Deposits

A. Savings Deposits
1. Local Currency
1.1 Institutions
1.2 Individuals
THIS YEAR Rs.
PREVIOUS YEAR Rs.
23,336,146,029
17,994,746,591
21,371,962,963
458,262,370
16,651,890,755
505,997,148
20,913,700,593
16,145,893,607
1,964,183,066
1,342,855,836
2.2 Individuals
1,277,564,430
924,029,864
B. Fixed Deposits
10,786,028,419
14,044,887,821
1.1 Institutions
3,012,297,969
3,149,951,635
1.3 Others
2. Foreign Currency
2.1 Institutions
2.3 Others
1. Local Currency
1.2 Individuals
1.3 Others
2. Foreign Currency
2.1 Institutions
2.2 Individuals
2.3 Others
C. Call Deposits
1. Local Currency

1.4 Individuals
1.5 Others
2. Foreign Currency

2.4 Individuals
2.5 Others
D. Certificate of Deposit
1. Organized Institutions
2. Individuals
3. Others
Total (A+B+C+D)
Total Deposits (1+2)
686,618,636
9,073,217,949
6,060,919,980
418,825,972
-
12,805,029,718
9,655,078,083
-
1,712,810,470
1,239,858,103
54,071,120
128,985,150
1,658,739,350
21,035,785,118
1,110,872,953
-
15,566,683,427
17,369,596,157
12,142,966,918
236,819,553
220,332,060
15,352,521,107
1,780,255,497
9,879,939,330
2,042,695,528
3,666,188,961
3,423,716,509
70,748
1,200,450
3,647,750,661
17,237,850
659,281
3,406,021,458
16,965,022
55,157,959,566
63,609,808,199
47,606,317,839
55,023,695,253
90
Nabil Bank Limited
Bills Payable
Schedule 6

PARTICULARS
THIS YEAR Rs.
PREVIOUS YEAR Rs.
1. Local Currency
315,681,009
70,813,386
Total
529,597,845
2. Foreign Currency
213,916,836
Other Liabilities
108,328,972
179,142,358
Schedule 7

PARTICULARS
THIS YEAR Rs.
PREVIOUS YEAR Rs.
1. Gratuity Fund
76,931,147
78,441,012
2. Employees Provident Fund
3. Employees Welfare/ Leave Fund

5. Interest Payable on Deposits
6. Interest Payable on Borrowings
7. Unearned Discount and Commission

8. Sundry Creditors
9. Branch Reconciliation Account

10. Provision for Audit Expense
11. Deferred Tax Liabilities
12. Dividend Payable
13. Others
Total
81,653,026
64,892,721
316,255,521
241,638,501
3,712,957
3,856,189
64,854
90,663,827
450,816,230
38,399
109,805,125
488,594,009
1,100,000
1,002,000
41,097,769
35,197,741
8,804,518
1,071,099,849
Cash Balance
49,015,326
1,072,481,023
Schedule 8

PARTICULARS
THIS YEAR Rs.
PREVIOUS YEAR Rs.
1. Local Currency (Including Coins)
1,092,489,614
1,013,649,263
Total
1,140,212,319
1,050,658,504
2. Foreign Currency
47,722,705
37,009,241
91
Balance with Nepal Rastra Bank
Schedule 9

PARTICULARS
1. Nepal Rastra Bank

a. Current Account
b. Other Account
LOCAL CURRENCY
INR
FOREIGN CURRENCY
CONVERTIBLE FCY
TOTAL
4,789,946,137
(651,007)
4,789,946,137
(651,007)
THIS YEAR Rs.
PREVIOUS YEAR Rs.
(651,007)
4,789,295,130
3,681,980,327
(651,007)
4,789,295,130
3,681,980,327
Note: Balance as per the confirmation statements is Rs.3,972,779,186.71
Balance with Banks / Financial Institutions
Schedule 10

PARTICULARS
1. Local Licensed Institutions

a. Current Account
b. Other Account
2. Foreign Banks
a. Current Account
b. Other Account
Total
LOCAL CURRENCY
57,747,347
INR
FOREIGN CURRENCY
CONVERTIBLE FCY
TOTAL
THIS YEAR Rs.
PREVIOUS YEAR Rs.
57,747,347
53,031,610
57,747,347
138,902,725
(243,589,020)
(104,686,295)
57,747,347
138,902,725
138,902,725
(243,589,020)
-
(243,589,020)
(104,686,295)
-
(104,686,295)
57,747,347
(104,686,295)
(104,686,295)
-
(46,938,948)
53,031,610
(509,848,391)
(509,848,391)
-
(456,816,781)
Note: Balance as per the confirmation statements is Rs.1,755,994,457.05. Reconcilation is presented in Schedule 33 "Notes to Accounts" point 2.2.
Money at Call and Short Notice
Schedule 11

PARTICULARS
1. Local Currency
2. Foreign Currency
Total
THIS YEAR Rs.
PREVIOUS YEAR Rs.
1,634,306,157
1,634,306,157
826,435,677
826,435,677
92
Nabil Bank Limited
Investments
Schedule 12

PARTICULARS
TRADING
PURPOSE
OTHERS
THIS YEAR Rs.
PREVIOUS YEAR Rs.
1. Nepal Government Treasury Bills
4,603,923,845
4,603,923,845
4,494,594,116
3. Nepal Government Other Securities
3,310,078,588
3,310,078,588
3,498,498,924
239,654,168
239,654,168
220,280,173
7,445,826,591
7,445,826,591
2. Nepal Government Saving Bonds

4. Nepal Rastra Bank Bonds
5. Foreign Bonds
6. Local Licensed Institutions

7. Foreign Banks
8. Organized Institutions' Shares
9. Organized Institutions' Bonds and Debentures

10. Other Investments:
10.1. NCM Mutual Fund (100,000 units @ Rs.10 & 100,000 units
issued subsequently @ Rs. 2.57. Since Matured & realized)
10.2. Nabil Balance Fund - Scheme 1
(10,500,000 units of Rs. 10 each)
Provision
Net Investment
431,775,000
210,034,800
105,000,000
10.3. SWIFT Investment (denominated in )

Total Investment
2,041,186
431,775,000
1,080,450,000
210,034,800
201,284,800
4,578,658,390
-
1,257,000
105,000,000
2,041,186
1,759,054
16,348,334,178
16,348,334,178
14,076,782,457
16,332,043,012
16,332,043,012
14,048,965,792
16,291,166
16,291,166
27,816,665
Investment in Shares, Debentures and Bonds
Schedule 93
12(A)

PARTICULARS
COST PRICE
MARKET VALUE
PROVISION
THIS YEAR Rs.
PREVIOUS YEAR Rs.
210,034,800
481,197,805
4,518,248
205,516,552
197,503,308
16,711,200
77,532,000
16,711,200
16,711,200
7,380,100
96,580,533
7,380,100
7,380,100
9,726,700
50,045,515
9,726,700
9,726,700
1.5 Sudur Paschimanchal Grameen Bikash Bank Limited
1,500,000
Not Listed
1,500,000
1.6 Purbanchal Grameen Bikash Bank Limited (Refer Note 2)
3,000,000
28,950,000
1,573,694
1,426,307
2,272,600
1.7 Madhya Paschimanchal Grameen Bikash Bank Limited
3,500,000
Not Listed
1,444,555
2,055,445
1,945,908
1.8 Sanakisan Bikash Bank Limited
6,070,800
Not Listed
6,070,800
6,070,800
12,490,500
51,841,056
12,490,500
12,490,500
1.10 NADEP Laghubitta Bittiya Sanstha Ltd.
2,000,000
Not Listed
2,000,000
2,000,000
1.11 Mahila Sahayatra MicroFinance Bittiya Sanstha Ltd.
4,000,000
Not Listed
4,000,000
4,000,000
10,000,000
Not Listed
10,000,000
1,250,000
1,235,500
Not Listed
1,235,500
1,235,500
1.14 National Banking Training Institute
1,200,000
Not Listed
1,200,000
1,200,000
1.15 Nepal Clearing House Limited
2,500,000
Not Listed
2,500,000
2,500,000
78,000,000
Not Listed
78,000,000
78,000,000
1. Investment in Shares
1.1 Rural Microfinance Development Centre Limited

(507,200 ordinary shares of Rs. 100 paid up)
1.2 Nirdhan Utthan Bank Limited
[276,900 ordinary shares of Rs. 100 paid up

(Including Bonus Shares 109,788)]
1.3 Chhimek Laghu Bitta Bikash Bank Limited
(Including Bonus Shares 115,202)
1.4 Deprosc MicroFinance Development Bank Limited

(Including Bonus Shares 39,844)
1.9 Swabalamban Bikash Bank Limited
(400,000 ordinary shares of Rs. 5 each)
1.12 Jeevan Laghu Bittiya Bikas Bank Ltd.
1.13 Karja Suchana Kendra Limited
1.16 Nabil Investment Banking Limited
(780,000 ordinary shares of Rs. 100 each)
1.17 Visa Inc. (6,166 units of Class C Common Stock)

1.18 MasterCard Incorporated
(1114 units Class B Common Stock)
2. Investment in Debentures and Bonds

2.1 ICICI Bank Bonds
(Bonds of face value USD 2,500,000
at coupon rate 6.375% maturing on 30 April 2022)
3. Investment in Derivatives Instruments
3.1 Index Linked Deposit (denominated in US $)
3.2 Credit Linked Deposit (denominated in US $)
Total Investment
4. Provision for Loss
3.1 Up to Previous Year
3.2 Addition/(Writeback) This Year
Total Provision
Not Listed
112,557,170
63,691,531
50,720,000
50,720,000
239,654,168
227,881,250
11,772,918
227,881,250
196,245,000
441,000,000
239,654,168
449,688,968
27,816,665
(11,525,499)
16,291,166
227,881,250
709,079,055
-
11,772,918
16,291,166
227,881,250
433,397,802
Note: 1. Sudur Paschimanchal Grameen Bikash Bank Limited, Madya Paschimanchal Grameen Bikash Bank Limited, Sana Kishan Bikash Bank, National Banking Training
Institute, Nepal Clearing House Limited have not declared and distributed cash dividend in the last three years.
2. Shares of Purbanchal Grameen Bikash Bank Ltd. was last traded on 25th November 2009.
196,245,000
441,000,000
834,748,308
4,562,809
23,253,856
27,816,665
94
Nabil Bank Limited
Held for Trading Investments
Schedule 12.1

PARTICULARS
COST PRICE
MARKET PRICE AS AT
15-JUL-2013

5. Foreign Bonds
6. Shares of Local Licensed Institutions

7. Debentures and Bonds of Local
THIS YEAR
PREVIOUS YEAR
PROFIT / LOSS
15-JUL-2012
Licensed Institutions
Local Organised Institutions
8. Shares, Debentures and Bonds of

9. Placement in Foreign Banks
10. Inter Bank Lending
11. Other Investments

Total Investments
REMARKS
Held to Maturity Investments
Schedule 12.2

PARTICULARS
COST PRICE
THIS YEAR
PREVIOUS YEAR
11,772,918
24,035,173
12,262,255
(23,253,856)
7,445,826,591
N/A
16,031,258,192
11,772,918
24,035,173
12,262,255
(23,253,856)
4,603,923,845
3,310,078,588
5. Foreign Bonds (denominated in $)

239,654,168

Total Investments
PROFIT / LOSS
15 JULY 2012
IMPAIRED AMOUNT TILL
15 JULY 2013
431,775,000
REMARKS
95
Available for Sale Investments
Schedule 12.3

PARTICULARS
COST PRICE
15-JUL-2012 (A)
MARKET PRICE AS AT
13-JUL-2013 (B)
THIS YEAR
INVESTMENT
ADJUSTMENT
LAST YEAR
PROFIT/ LOSS
REMARKS
RESERVE (B -A)

5. Foreign Bonds



Total Investments
127,099,300
192,707,273
205,516,552
82,935,500
107,041,186
115,135,517
281,878,701
317,075,986
307,842,790
487,395,253
Note: Other Investments include investment in units of Nabil Balance Fund - Scheme 1 and shares in SWIFT. The Market Value of SWIFT is not available while Market Value of
Nabil Balance Fund - Scheme 1 is considered as Rs.10.06 per unit last traded on 15.07.2013 before the Balance Sheet date.
2.3 Doubtful
3.5 Loss *
(1,770,315)
1,770,315
1,770,315
1,760,360
1,678,537,084
2,023,819
2,023,819
44,882,701
29,951,600
554,502
127,002
14,249,597
46,906,520
29,951,600
16,954,920
1,725,443,604
29,951,600
29,951,600
1,695,492,004
1,695,492,004
UNINSURED
DEPRIVED SECTOR
4,301,058
42,870,319,468
23,022,479
23,022,479
1,184,928,499
745,013,177
17,837,735
40,483,165
377,293,364
1,207,950,978
672,364,664
52,320,157
51,289,328
431,976,829
44,078,270,446
673,396,638
104,422,437
204,961,933
982,781,008
43,095,489,438
43,095,489,438
OTHER
LOANS & ADVANCES
1,762,674,887
(10,695,131)
10,695,131
29,396,346
1,318,192
28,078,154
18,701,215
896,418
17,804,797
1,781,376,102
896,418
896,418
1,780,479,684
1,780,479,684
FOREIGN
4,301,058
46,311,531,439
12,580,852
25,046,298
12,465,446
1,260,977,861
778,043,329
18,392,237
40,610,167
419,631,070
1,273,558,713
703,212,682
52,320,157
51,289,328
466,736,546
47,585,090,152
704,244,656
104,422,437
204,961,933
1,013,629,026
46,571,461,126
46,571,461,126
TOTAL
37,760,083
20,543,049
1,025,659
1,025,659
660,377
270,236
390,141
1,686,036
1,478,530
207,506
22,229,085
1,478,530
1,478,530
20,750,555
20,750,555
FOREIGN
58,303,132
1,029,295
1,029,295
1,107,298
305,355
801,943
2,136,593
1,547,672
588,921
60,439,725
1,547,672
1,547,672
58,892,053
58,892,053
TOTAL
BILLS PURCHASED & DISCOUNTED
3,636
3,636
446,921
35,119
411,802
450,557
69,142
381,415
38,210,640
69,142
69,142
38,141,498
38,141,498
DOMESTIC
4,301,058
46,369,834,571
13,610,147
26,075,593
12,465,446
1,262,085,159
778,348,684
18,392,237
40,610,167
420,433,013
1,275,695,306
704,760,354
52,320,157
51,289,328
467,325,467
47,645,529,877
705,792,328
104,422,437
204,961,933
1,015,176,698
46,630,353,179
46,630,353,179
THIS YEAR RS.
2,713,671
41,605,682,634
390,694,824
390,694,824
871,390,335
388,911,680
52,329,608
42,553,205
384,882,171
1,262,085,159
778,348,684
18,392,237
40,610,167
4,301,058
420,433,013
42,867,767,793
783,629,763
36,784,473
162,440,668
17,204,234
1,000,059,138
41,867,708,655
41,867,708,655
PREVIOUS YEAR RS.
* Loan to borrower availing OD facility and outstanding at 15th July 2013 amounting NRs.1,375,966.05 is insured at DCGC. The loan is not a deprived sector loan and hence accordingly disclosed under "Loans and Advances - Other".
Net Loan (A-B)
F. Changes This Year
E. Addition This Year
D. Written Back This Year
C. Total Previous Year's Provision
4.5 Loss
4.4 Doubtful
4.3 Sub-Standard
9,955
4.2 Restructured / Rescheduled
4.1 Pass
4. Provisioning up to previous year
B. Total Provisioning
3.4 Doubtful
3.3 Sub-Standard
3.1 Pass
3. Loan Loss Provision
A. Total Loan (1+2)
2.4 Loss
2.2 Sub-Standard
2. Non-Performing Loans
1.1 Pass
INSURED
DOMESTIC
Schedule 13
Nabil Bank Limited
1. Performing Loans
PARTICULARS
Classification of Loans, Advances and Bills Purchased & Provisioning

96
97
Securitywise Loans, Advances and Bills Purchased
Schedule 13 (A)

PARTICULARS
A. Secured
1. Movable/Immovable Assets
2. Guarantee of Local Licensed Institutions
3. Government Guarantee
4. Internationally Rated Bank Guarantee

5. Export Documents
6. Fixed Deposit Receipts

a. Own
b. Other Licensed Institutions
7. Government Securities
8. Counter Guarantee
9. Personal Guarantee
10. Other Securities
B. Unsecured
Total
Note: Unsecured Loans, Advances and Bills Purchased represent credit card loans.
THIS YEAR RS.
PREVIOUS YEAR RS.
47,490,639,601
42,711,024,657
43,574,303,618
96,220,588
202,322,469
38,291,102,150
-
92,457,261
281,380,615
423,402,074
29,477,334
281,380,615
581,625,331
5,388,619
393,924,741
76,563,975
8,086,337
2,749,398,362
3,819,412,861
47,645,529,877
42,867,767,793
154,890,276
156,743,136
* Written down value.
Total (3+4+5+6)
6. Leasehold Assets
5. Pending Capitalization
4. Land
3. Book Value (WDV*) (1-2)
Total Depreciation
e. Depreciation on Writen Off Assets
d. Depreciation on Sold Assets
c. Revaluation/Write Back This Year
b. For This Year
a. Up to Previous Year
2. Depreciation
Total Cost (a+b+c+d+e)
e. Write off during the Year
d. Sold during the Year
b. Addition during the Year
a. Previous Year Balance
255,495,763
49,447,381
206,048,382
76,921,669
10,833,646
66,088,023
282,970,051
836,409
282,133,642
BUILDING
116,002,857
116,002,857
105,359,619
(9,575,477)
25,496,634
89,438,462
221,362,476
(13,721,919)
28,826,000
206,258,395
VEHICLES
ASSETS
MACHINERY
193,799,225
193,799,225
374,798,437
(10,647,343)
(5,566,875)
57,464,036
333,548,619
568,597,662
(7,108,307)
(11,642,168)
35,305,032
552,043,105
OFFICE EQUIPMENT
26,304,924
26,304,924
41,310,146
(3,232,223)
13,812,463
30,729,906
67,615,070
(3,232,223)
1,709,770
69,137,523
SOFTWARE
280,719,270
39,202,121
241,517,149
OTHERS
872,322,039
39,202,121
49,447,381
241,517,149
542,155,388
598,389,871
(13,879,566)
(15,142,352)
107,606,779
519,805,010
1,140,545,259
(14,874,391)
(20,830,226)
66,677,211
1,109,572,665
THIS YEAR RS.
887,543,274
49,704,822
6,553,648
241,517,149
589,767,655
519,805,010
(38,062,620)
(12,155,940)
114,281,259
455,742,311
1,109,572,665
(41,578,548)
(21,554,180)
77,329,458
1,095,375,935
PREVIOUS YEAR RS.
Schedule 14
Nabil Bank Limited
1. Cost Price
PARTICULARS
Fixed Assets
98
99
Non Banking Assets
Schedule 15

NAME & ADDRESS
OF BORROWER / PARTY
GRAND TOTAL
DATE OF ACQUISITION
TOTAL AMOUNT OF
OF NON BANKING
NON BANKING
ASSETS
ASSETS
LOSS PROVISION
AMOUNT
THIS YEAR'S NET
NON-BANKING
PREVIOUS YEAR
ASSETS
Other Assets
Schedule 16

PARTICULARS
1. Stock of Stationery
2. Income receivable on Investment

3. Accrued Interest on Loan
Less: Interest Suspense Account
4. Commission Receivable
5. Sundry Debtors
6. Staff Loans & Advances
7. Pre - Payments
8. Cash in Transit
9. Other Transit items (including Cheques)

10. Drafts paid without notice
11. Expenses not written off

13. Deferred Tax Assets
14. Others
Total
382,296,328
(382,296,328)
THIS YEAR RS.
PREVIOUS YEAR RS.
7,553,837
6,963,113
125,808,564
-
889,159,544
152,535,579
371,152,257
(371,152,257)
363,405,605
875,339,586
813,596,213
32,516,964
-
44,574,722
175,232,174
2,150,185,391
31,639,720
-
42,575,441
138,248,894
1,548,964,565
100
Nabil Bank Limited
Other Assets (Additional Statement)
Schedule 16 (A)

PARTICULARS
1. Accrued Interest on Loan
2. Drafts Paid without notice
THIS YEAR
1 TO 3 YEAR
ABOVE 3 YEARS
TOTAL
268,538,836
58,538,569
55,218,923
PREVIOUS YEAR
UP TO 1 YEAR
382,296,328
371,152,257
Contingent Liabilities
Schedule 17

PARTICULARS
1. Claims on Institution but not accepted by the Institution

2. Letter of Credit (Full Amount)
a. Maturity up to 6 Months
b. Maturity more than 6 Months
3. Rediscounted Bills
4. Guarantees/Bonds
a. Bid Bonds
b. Performance Bonds
c. Other Guarantees/Bonds
5. Unpaid portion of Partly paid shares
THIS YEAR RS.
22,916,755
PREVIOUS YEAR RS.
16,386,500
5,450,366,800
5,622,522,137
1,883,415,885
112,368,206
3,566,950,915
-
5,510,153,931
-
4,015,235,762
3,912,222,111
3,822,104,839
3,802,859,198
39,250,000
39,250,000
193,130,923
-
109,362,913
-
6. Forward Exchange Contract Liabilities
7,750,100,520
4,224,977,742
8. Acceptance & Endorsement
1,006,152,586
682,166,582
10. Irrevocable Loan Commitment
4,558,539,994
3,380,746,197
12. Advance Payment Guarantee
1,756,223,528
444,652,570
7. Bills under Collection
9. Underwriting Commitment
11. Guarantee issued against Counter Guarantee of Internationally Rated Banks

13. Financial Guarantee
14. Income Tax

Total
381,079,757
-
1,416,358,619
-
14,987,477
26,411,211,798
231,357,521
-
5,764,500,481
-
772,031
24,319,553,872
101
Interest Income
Schedule 18

PARTICULARS
A. Loans, Advances and Overdraft

1. Loans & Advances
2. Overdraft
B. Investment
1. Government Securities
a. Treasury Bills
b. Development Bonds
c. National Saving Certificates
2. Foreign Securities
a. Development Bank of Singapore Bond

b. ICICI Bank Bond
4. Debenture & Bonds
a. Bank/Financial Institutions
b. Other Organizations
5. Interbank Investment
a. Bank/Financial Institutions
b. Other Organizations
THIS YEAR RS.
PREVIOUS YEAR RS.
5,123,174,284
5,259,587,989
1,733,243,204
1,804,684,084
3,389,931,080
341,139,732
324,402,324
99,131,426
225,270,898
E. Others
1. Certificate of Deposits
2. Inter-Bank/Financial Institutions Loan

3. FCY Placements
4. Staff Loan
Total
196,062,566
12,865,214
2,643,721
6,874,313
2,643,721
401,667
2. Foreign Banks
412,618,279
14,093,687
2. Foreign Banks
1. Local Banks/Financial Institutions
608,680,845
12,865,214
401,667
D. Money at Call and Short Notice
628,420,372
14,093,687
C. Agency Balances
1. Local Banks/Financial Institutions
3,454,903,905
6,874,313
54,175
-
54,175
45,107
2,969,609
33,872
1,252,820
11,235
237,362,128
1,716,789
235,822,683
180,111,282
179,588,691
5,702,122,918
6,126,854,828
57,250,846
56,233,992
102
Nabil Bank Limited
Interest Expense
Schedule 19

PARTICULARS
A. Deposits
1. Fixed Deposits
1.1 Local Currency
1.2 Foreign Currency
2. Savings Deposits
2.1 Local Currency
3. Call Deposits
3.1 Local Currency
4. Certificate of Deposits
B. Borrowings
2. Loan from Nepal Rastra Bank
3. Inter Bank /Financial Institutions Borrowing

4. Other Organized Institutions
5. Others
C. Others
Total
THIS YEAR RS.
PREVIOUS YEAR RS.
2,136,709,080
3,121,055,418
872,137,876
1,704,065,707
887,220,630
15,082,754
1,728,977,624
24,911,917
700,215,856
530,028,570
7,773,575
7,981,900
692,442,281
522,046,670
549,272,594
862,049,224
33,775,086
36,666,264
515,497,508
-
49,475,791
25,500,000
825,382,960
-
34,435,051
25,500,000
23,975,791
8,935,051
2,186,184,871
Commission & Discount
3,155,490,469
Schedule 20

PARTICULARS
A. Bills Purchase & Discount

1. Local
2. Foreign
B. Commission
1. Letters of Credit
2. Guarantees
3. Collection Fees
4. Remittance Fees
5. Cards
6. Share Underwriting/Issue
7. Government Transactions
8. Agency Commission
9. Exchange Fee
C. Others
Total
THIS YEAR RS.
PREVIOUS YEAR RS.
1,971,080
2,939,727
1,511,811
2,172,659
459,269
767,068
331,755,164
311,286,271
72,268,559
64,505,196
60,880,350
2,087,571
82,430,457
54,675,012
2,093,617
76,322,396
114,088,227
113,690,050
59,324,270
393,050,514
52,161,196
366,387,194
103
Other Income
Schedule 21

PARTICULARS
1. Safe Deposit Lockers Rental
2. Issue & Renewals of Credit Cards

3. Issue & Renewals of Debit Cards
4. Telex / T. T. / Communication Fees

5. Service Charges
6. Renewal Fees
7. Others
Total
THIS YEAR RS.
PREVIOUS YEAR RS.
7,332,091
6,221,644
24,851,810
24,500,317
129,941,913
129,675,292
26,966,523
22,081,049
5,671,682
15,141,047
-
209,905,066
Exchange Gain/ (Loss)
5,239,723
13,366,841
-
201,084,866
Schedule 22

PARTICULARS
a. Revaluation
b. Trading (except Exchange Fees)

Total Gain/(Loss)
THIS YEAR RS.
95,690,898
393,360,181
489,051,079
Personnel Expense
PREVIOUS YEAR RS.
114,932,879
332,137,606
447,070,485
Schedule 23

PARTICULARS
1. Salary
2. Allowances
3. Contribution to Provident Fund

4. Training Expenses
5. Uniform
6. Medical
7. Insurance
THIS YEAR RS.
PREVIOUS YEAR RS.
215,423,061
188,078,674
16,856,445
14,411,528
203,343,659
8,737,232
14,562,204
518,738
8,356,175
8. Pension and Gratuity Contribution
103,918,643
Total
646,759,675
9. Others
75,043,518
175,189,788
8,934,625
310,394
7,332,709
48,569,949
57,885,177
500,712,844
104
Nabil Bank Limited
Office Operating Expense
Schedule 24

PARTICULARS
THIS YEAR RS.
PREVIOUS YEAR RS.
1. House Rent
60,878,932
54,798,007
5,427,040
6,460,664
2. Electricity & Water
3. Repair & Maintenance

a. Building
b. Vehicles
c. Others
15,968,729
2,506,321
2,920,719
4. Insurance
10,306,216
6. Office Equipment and Furniture Repair
11,176,046
5. Postage, Telex, Telephone & Fax
7. Travelling Allowances & Expenses

8. Printing & Stationery
9. Books & Periodicals
10. Advertisements
11. Legal Expenses
12. Donations
13. Expenses relating to Board of Directors

a. Meeting Fees
b. Other Expenses
14. Annual General Meeting Expenses

15. Expenses relating to Audit
a. Audit Fees
b. Other Expenses
16. Commission on Remittances
17. Depreciation on Fixed Assets
18. Amortization of Pre-Operating Expenses

19. Share Issue expenses
20. Technical/Consultancy Services Fee

21. Entertainment
22. Written Off Expenses

23. Security Expenses
24. Deposit & Credit Guarantee Premium

25. Commission & Discount
26. Others
a. Fuel Expenses
b. Tea/ Coffee/ Snacks
c. Contract Service Expense
3,643,552
2,817,112
9,679,225
28,854,697
25,220,647
6,936,318
4,214,400
10,334,251
21,397,806
21,183,711
8,725,960
9,345,385
754,918
1,204,140
15,000
684,340
1,246,115
57,800
2,456,413
3,244,132
1,534,413
2,168,132
1,100,000
1,002,000
922,000
1,433,948
1,100,000
1,076,000
1,193,788
1,002,000
123,903,510
130,515,883
29,168,505
-
25,336,243
-
38,894,664
39,833,365
15,278,517
84,899,828
33,621,994
5,808,531
1,227,414
70,972,878
25,170,699
5,248,254
11,232,073
10,968,519
e. Customer Relations and Sponsorship
5,434,985
4,749,372
g. Janitorial
8,429,279
7,455,298
d. Prize Expense
f. Membership Fees
Total
14,358,884
h. Others
1,034,300
19,338,666
468,781,187
1,909,050
15,471,686
430,909,132
105
Provision for Possible Losses
Schedule 25

PARTICULARS
THIS YEAR RS.
PREVIOUS YEAR RS.
1. Loans and Advances
26,075,593
390,694,824
638,562
2. Investments
3. Non-Banking Assets
4. Other Assets
Total
736,756
27,450,911
Non-Operating Income/(Loss)
23,253,856
413,948,680
Schedule 26

PARTICULARS
THIS YEAR RS.
1. Profit/(Loss) on Sale of Investments
(8,102,434)
3. Dividend
20,588,465
2. Profit/(Loss) on Sale of Fixed Assets

4. Subsidies Received from Nepal Rastra Bank
a. Compensation Agreement for Losses of Specified Branches

b. Interest Indemnity
c. Exchange Counter
5. Others
Total Non-Operating Income/(Loss)
PREVIOUS YEAR RS.
982,541
(2,779,613)
13,468,572
Provision for Possible Losses / Write Back
16,619,364
-
13,839,751
Schedule 27

PARTICULARS
THIS YEAR RS.
PREVIOUS YEAR RS.
1. Loans and Advances
12,465,446
3. Investments
12,262,255
Total
24,727,701
2. Non-Banking Assets
4. Other Assets
106
Nabil Bank Limited
Income/(Expense) from Extra-Ordinary Activities
Schedule 28

PARTICULARS
THIS YEAR RS.
1. Recovery of Write off Loan
10,441,593
2. Voluntary Retirement Scheme Expenses
16,770,964
(11,717,325)
(52,532)
(5,083,897)
3. Bad Loan Written Off [28 (a)]
(27,843,275)
Total
(17,454,214)
4. Other Income/(Expense)
PREVIOUS YEAR RS.
Details of Loans Written Off
(3,006,491)
(3,036,749)
Schedule 28 (A)

TYPES OF LOAN
1 Working Capital Loan

2 Project Loan
3 Fixed Capital Loan

4 Personal Loan
5 Credit Card Loan

6 Others
Total Loan
WRITTEN OFF
AMOUNT (Rs.)
TYPE OF
SECURITY
BASIS OF
SECURITY
LOAN
APPROVED
EFFORTS MADE
FOR RECOVERY OF LOANS
14,465,210
6,503,311
259,989
622,863
5,991,901
27,843,275
Notice publication,
regular follow ups and blacklisting
REMARKS
1,063,040
2,224,165
6 Ganja / Kalyani Dahal
Note:
Total
1,164,312
55,905,656
300,000
11,432,156
12,306,298
739,084
800,000
1,787,409
968,286
2,208,070
1,063,040
105,865
94,517
7,371
9,118
20,372
158,627
10,688
4,408
11,703
4,275
636,096
1 Loan given to employees as per Employees' Rules and against Fixed Deposits/Government Securities not presented above.
3. .
2. .....
1. .
E. Shareholders
15 Tara Neupane & Ram Chandra Neupane
14 Sanjay Tripathee
13 Mohan Prasad Pandey / Sobha Pathak
12 Durga Rajya Laxmi
11 Usha Khanal / Rajaram Khanal
10 Muna Pyakurel / Dilip Kumar Pyakurel
9 Gita Adhikari / Dilli Ram Adhikari
8 Dipendra Giri
7 Shulav Ausadhalaya
476,038
5 Prakash Dahal
4 Shanta Gyawali / Vinod Kumar Gyawali
2,056,602
460,151
18,983,085
55,905,656
OUTSTANDING UP TO LAST YEAR

PRINCIPAL
INTEREST
3 Laxmi Shrestha / Padam Prasad Shrestha
2 Ramesh Maharjan / Ram Maharjan
1 Subash Chandra / Chandra Prasad / Nanda Kumar Bhattarai
D. Family Members of Employees
3. .
2. .....
1. .
C. Promoters
3. .
2. .....
1. .
B. Chief Executive Officer
3. .
2. .....
1. .
A. Directors
NAME OF PROMOTER/DIRECTOR/CHIEF EXECUTIVE OFFICER
96,964
5,051,637
6,392
708,767
1,307,986
116,121
852,254
376,656
127,775
55,593
1,335,266
36,239
31,623
5,051,637
96,433
3,689,960
44,123
1,294,311
343,383
165,617
204,711
112,264
161,318
303,692
58,028
214,789
55,196
636,096
3,689,960
RECOVERED IN CURRENT YEAR

PRINCIPAL
INTEREST
1,909,457
400,000
895,674
328,217
255,531
30,035
1,909,457
ADDITIONAL
LENDING IN CY
Schedule 29
52,763,476
293,608
10,723,389
10,998,311
642,120
1,083,879
895,674
935,155
591,630
2,536,287
1,292,068
2,254,200
420,446
721,336
423,912
18,951,462
52,763,476
4,198
4,198
4,198
OUTSTANDING AS OF 15 JULY 2013

PRINCIPAL
INTEREST
Statement of Loans and Advances extended to Directors/ Chief Executive/ Promoters/ Employees
and Shareholders with more than 1% Shares
107
108
Table
of Capital Fund
Nabil Bank Limited
Schedule 30(A1)

PARTICULARS
1.1 Risk Weighted Exposures

a. Credit Risk
b. Operation Risk
c. Market Risk
Total Risk Weighted Exposures Before Adjustment
Adjustment under Pillar - II
ADD: 2% of the total RWE added under Supervisory Review as per 6.4.a.9 for
Overall Risk Management" of Capital Adequacy Framework 2007, NRB Unified Directive
ADD:.. % of the total RWE due to non compliance to Disclosure Requirement
Add: % of the total deposit due to insufficient Liquid Assets
Total Risk Weighted Exposures
1.2 Capital
Core Capital (Tier 1)
a. Paid up Equity Share Capital
b. Irredeemable Non-cumulative preference shares

c. Share Premium
d. Proposed Bonus Equity Shares

e. Statutory General Reserves
AS AT 15 JULY 2013
AS AT 15 JULY 2012
57,191,503,224
50,021,684,138
5,011,133,921
89,170,240
4,088,674,543
79,167,220
62,291,807,385
54,189,525,901
1,245,836,148
1,083,790,518
63,537,643,533
55,273,316,419
As at 15 July 2013
As at 15 July 2012
2,436,841,400
2,029,769,400
6,340,748,750
74,000
609,210,350
5,139,280,637
74,000
405,953,880
2,620,500,000
2,176,500,000
44,574,722
42,575,441
(78,000,000)
(78,000,000)
1,023,765,936
947,460,587
b. Subordinated Term Debt
300,000,000
300,000,000
d. General loan loss provision
453,370,175
413,855,853
f. Investments Adjustment Reserves
106,222,191
94,031,164
f. Retained Earnings
g. Un-audited current year cumulative profit
704,970,278
559,829,916
h. Capital Redemption Reserves

i. Capital Adjustment Reserves
j. Dividend Equalization Reserves
k. Debenture Redemption Reserves

l. Deferred Tax Reserve
m. Other Free Reserves

n. Less: Goodwill
2,578,000
2,578,000
o. Less: Fictitious Assets
p. Less: Investment in equity of licensed Financial Institutions
q. Less: Investment in equity of institutions with financial interests
r. Less: Investment in equity of institutions in excess of limits
s. Less: Investments arising out of underwriting commitments

t. Less: Reciprocal crossholdings
u. Less: Other Deductions
Adjustment Under Pillar - II

Less: Shortfall In Provision
Less: Loans & Facilities extended to Related Parties & Restricted Lending
Supplementary Capital (Tier 2)
a. Cumulative and/or Redeemable Preference Share

c. Hybrid Capital Instruments
e. Exchange Equalization Reserves

g. Assets Revaluation Reserves
h. Other Reserves
Total Capital Fund (Tier 1 and Tier 2)
1.3 Capital Adequacy Ratio
Tier 1 Capital to Total Risk Weighted Exposures
Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures
150,300,000
13,873,570
7,364,514,686
126,300,000
13,273,570
6,086,741,224
As at 15 July 2013
As at 15 July 2012
11.59%
11.01%
9.98%
9.30%
Claims on Foreign Government and Central Bank (ECA Rating: 3)
Claims on Foreign Corporates (ECA 0-1)
Claims on Domestic Corporates
buffer of 1% above their respective regulatory capital requirement
Claims on foreign bank incorporated in SAARC region operating with a
Claims on foreign bank (ECA Rating 7)
33,229,362,385
7,489,865,180
46,025,659
Claims on foreign bank (ECA Rating 3-6)
Claims on foreign bank (ECA Rating 2)
2,094,707,520
376,429,060
1,410,633,237
Claims on foreign bank (ECA Rating 0-1)
requirements
Claims on domestic banks that do not meet capital adequacy
Claims on domestic banks that meet capital adequacy requirements
Claims on Public Sector Entity (ECA 7)
Claims on Public Sector Entity (ECA 3-6)
Claims on Public Sector Entity (ECA 2)
Claims on Public Sector Entity (ECA 0-1)
Claims on Other Multilateral Development Banks
(MDBs) recognized by the Framework
Claims On BIS, IMF, ECB, EC and on Multilateral Development Banks
Claims on Foreign Government and Central Bank (ECA Rating: 4-6)
6,918,313
Claims on Foreign Government and Central Bank (ECA Rating: 0-1)
All claims on Nepal Rastra Bank
279,990,121
Investment in Nepal Rastra Bank Securities
All Claims on Government of Nepal
7,914,002,433
Gold
Investment in Nepalese Government Securities
1,140,212,319
4,789,295,130
BOOK VALUE
Balance With Nepal Rastra Bank
Cash Balance
A. Balance Sheet Exposures
PARTICULARS
Credit Risk
203,990
SPECIFIC
PROVISION
705,778,015
c
1,140,212,319
20%
32,523,380,380
7,489,865,180
46,025,659
2,094,707,520
376,429,060
1,410,633,237
6,918,313
279,990,121
7,914,002,433
4,789,295,130
d=a-b-c
AS AT 15 JULY 2013
ELIGIBLE
NET VALUE
CRM
0%
20%
100%
20%
150%
100%
50%
100%
20%
150%
100%
50%
20%
100%
0%
150%
100%
50%
20%
0%
0%
0%
0%
0%
0%
0%
RISK
WEIGHT
32,523,380,380
1,497,973,036
23,012,829
418,941,504
376,429,060
282,126,647
f=d*e
RISK WEIGHTED
EXPOSURE
27,605,552,631
4,035,282,052
42,037,754
1,598,647,498
44,408,511
1,446,038,038
1,307,346
280,267,465
7,999,977,303
1,050,658,504
3,681,980,327
27,605,552,631
807,056,410
42,037,754
319,729,500
44,408,511
289,207,608
AS AT 15 JULY 2012
NET VALUE
RISK WEIGHTED
EXPOSURE
Schedule 30(B)
Contd.
109
Contd.
Claims not fully secured by residential properties
foreign counterparty (ECA Rating 7 )
foreign counterparty (ECA Rating: 3-6)
foreign counterparty (ECA Rating: 2)
domestic counterparty
LC Commitments With Original Maturity Up to 6 months
Forward Exchange Contract
Bills Under Collection
Revocable Commitments
B. Off Balance Sheet Exposures Gross Book
TOTAL
Other Assets
Cash in transit and other cash items in the process of collection
Interest Receivable/claim on government securities
Staff loan secured by residential property
of institutions not listed in the stock exchange
Investments in equity and other capital instruments
of institutions listed in the stock exchange
Investments in equity and other capital instruments
High Risk claims
Past due claims (except for claim secured by residential properties)
Claims secured by Commercial real estate
Claims secured by residential properties (Overdue)
5,408,248,181
3,566,950,915
7,750,100,520
381,079,757
76,189,370,779
b
1,863,443,857
1,024,827,559
29,984,682
2,944,555
13,346,612
965,937
802,953,366
18,201,838
84,767,486
673,977,091
397,191,864
2,484,197,941
2,194,955,058
864,878,700
98,758,145
3,237,979,245
Claims secured by residential properties
SPECIFIC
PROVISION
168,450,830
863,005,947
94,014,070
34,015,328
29,198,534
3,398,500,085
7,750,100,520
381,079,757
d=a-b-c
73,462,920,976
4,289,406,551
29,984,682
81,822,931
673,977,091
383,845,252
2,449,216,676
1,392,001,692
864,878,700
80,556,307
3,237,979,245
1,907,792,497
AS AT 15 JULY 2013
ELIGIBLE
NET VALUE
CRM
150%
100%
50%
20%
20%
10%
0%
e
0%
100%
20%
0%
60%
150%
100%
150%
150%
100%
100%
150%
60%
100%
75%
150%
50%
100%
RISK
WEIGHT
679,700,017
775,010,052
f=d*e
50,403,130,391
4,289,406,551
122,734,397
404,386,254
383,845,252
3,673,825,014
2,088,002,538
864,878,700
80,556,307
1,942,787,547
1,430,844,373
RISK WEIGHTED
EXPOSURE
231,357,521
4,714,248,677
4,224,977,742
63,594,359,961
3,220,513,211
36,049,252
71,953,862
640,251,473
256,708,081
1,865,864,774
592,888,869
4,197,671,386
15,174,145
2,839,960,950
2,071,166,528
Contd.
942,849,735
422,497,774
44,235,622,844
3,220,513,211
107,930,793
384,150,884
256,708,081
2,798,797,162
889,333,304
4,197,671,386
15,174,145
1,703,976,570
1,553,374,896
AS AT 15 JULY 2012
NET VALUE
RISK WEIGHTED
EXPOSURE
Schedule 30(B)
Nabil Bank Limited
Regulatory Retail Portfolio Except for Granularity
1,936,991,031
Regulatory Retail Portfolio (Not Overdue)
Claims on Foreign Corporates (ECA 7)
BOOK VALUE
Claims on Foreign Corporates (ECA 3-6)
Claims on Foreign Corporates (ECA 2)
PARTICULARS
Credit Risk
110
245,490,008
Unpaid portion of Partly paid shares and Securities
Total RWE for Credit Risk (After Bank's Adjustment of Pillar - II)
Add: 1% of the contract(Sale) value in case of the sale of credit with recourse
Add: 10% of the loan and facilities in excess of Single Obligor Limit
Total RWE for credit Risk (A) +(B)
TOTAL
Guarantee claimed but not accepted / honoured
Other Contingent Liabilities
Irrevocable Credit commitments (long term)
Irrevocable Credit commitments (short term)
102,582,045,306
102,582,045,306
22,916,755
26,392,674,527
4,554,990,199
39,250,000
1,006,152,586
Acceptances and Endorsements
Financial Guarantee
1,756,223,528
Advance Payment Guarantee
Repurchase Agreements
Lending of Bank's Securities or Posting of Securities as collateral
Underwriting commitments
280,692,377
890,176,235
4,015,235,762
1,883,415,885
BOOK VALUE
Bid Bond, Performance Bond and Counter guarantee
foreign couterparty (ECA Rating: 3-6 )
foreign counterparty (ECA Rating: 2 )
foreign counterparty (ECA Rating: 0-1 )
LC Commitments With Original Maturity Over 6 months
PARTICULARS
Credit Risk Contd.
1,863,443,857 4,409,978,993
1,863,443,857 4,409,978,993
334,156,534
1,125,240,630
140,346,188
338,846,652
712,140,988
727,791,224
22,916,755
96,308,622,456
96,308,622,456
22,845,701,481
4,220,833,665
39,250,000
1,006,152,586
630,982,898
245,490,008
140,346,188
178,035,247
3,676,389,110
1,155,624,661
AS AT 15 JULY 2013
ELIGIBLE
NET VALUE
CRM
- 3,546,973,046
SPECIFIC
PROVISION
200%
100%
50%
20%
100%
100%
100%
100%
100%
100%
50%
150%
100%
50%
50%
20%
150%
100%
50%
20%
50%
RISK
WEIGHT
57,191,503,224
57,191,503,224
6,788,372,833
45,833,510
844,166,733
39,250,000
1,006,152,586
630,982,898
245,490,008
70,173,094
35,607,049
1,838,194,555
577,812,331
RISK WEIGHTED
EXPOSURE
16,386,500
81,789,479,648
81,789,479,648
18,195,119,688
3,219,740,434
39,250,000
682,166,582
847,111,964
229,855,926
171,287,056
164,679,818
3,557,395,235
96,662,233
32,935,964
50,021,684,138
50,021,684,138
5,786,061,293
32,773,000
643,948,087
39,250,000
682,166,582
847,111,964
229,855,926
85,643,528
1,778,697,617
48,331,116
AS AT 15 JULY 2012
NET VALUE
RISK WEIGHTED
EXPOSURE
Schedule 30(B)
111
Claims on domestic banks that meet capital adequacy requirements
adequacy requirements
Claims secured by residential properties
Regulatory Retail Portfolio Except for Granularity
Regulatory Retail Portfolio (Overdue)
Regulatory Retail Portfolio (Not Overdue)
Claims on Foreign Corporates (ECA: 7)
Claims on Foreign Corporates (ECA: 3-6)
Claims on Foreign Corporates (ECA: 2)
Claims on Foreign Corporates (ECA: 0-1)
Claims on Domestic Corporates / Individuals
a buffer of 1% above their respective regulatory capital requirement
Claims on foreign bank incorporated in SAARC region operating with
Claims on foreign bank (ECA Rating: 7)
29,198,534
Claims on foreign bank (ECA Rating: 3-6)
Contd.
29,198,534
705,778,015
Claims on foreign bank (ECA Rating: 2)
Claims on foreign bank (ECA Rating: 0-1)
Claims on domestic banks that do not meet capital
Claims on Public Sector Entity (ECA: 7)
Claims on Public Sector Entity (ECA: 3-6)
Claims on Public Sector Entity (ECA: 2)
Claims on Public Sector Entity (ECA: 0-1)
Claims on Other Multilateral Development Banks
(MDBs) recognized by the Framework
Claims On BIS, IMF, ECB, EC and on Multilateral Development Banks
Claims on Foreign government and Central Bank (ECA: 7)
Claims on Foreign government and Central Bank (ECA: 4-6)
All claims on Nepal Rastra Bank
All Claims on Government of Nepal
Gold
TOTAL
SEC/G'TEE OF
FOREIGN BANKS
MDBS
G'TEE OF
Claims on Foreign government and Central Bank (ECA:0-1)
BANKS
DOMESTIC
577,407,717
OTHER
SOVEREIGNS
Investment in Nepal Rastra Bank Securities
NEPAL
128,370,299
SECURITIES
G'TEE OF
Investment in Nepalese Government Securities
GOLD
GOVT. OF
SEC/G'TEE OF
BANKS/ FIS
WITH BANK
G'TEE OF
GOVT.& NRB
Schedule 30(C)
Nabil Bank Limited
Balance With Nepal Rastra Bank
Cash Balance
Balance Sheet Exposures
CREDIT EXPOSURES
DEPOSITS
WITH OTHER
DEPOSITS
Credit Risk Mitigation

112
Off Balance Sheet Exposures

Revocable Commitments
Bills Under Collection
Forward Exchange Contract Liabilities
LC Commitments With Original Maturity Up to 6 months
foreign counerparty (ECA Rating: 2)
LC Commitments With Original Maturity Over 6 months
Bid Bond, Performance Bond and Counter guarantee
foreign counteparty (ECA Rating: 2)
Gurantee claimed but not honored
Underwriting commitments
Lending of Bank's Securities or Posting of Securities as Collateral
Repurchase Agreements
Advance Payment Guarantee
Financial Guarantee
Acceptances and Endorsements
Unpaid portion of Partly paid shares and Securities
Irrevocable Credit commitments (short term)
Irrevocable Credit commitments (long term)
Other Contingent Liabilities
Claims not fully secured by residential properties

Claims secured by residential properties (Overdue)
Claims secured by Commercial real estate
Past due claims (except for claim secured by residential properties)
High Risk claims
Investments in equity and other capital instruments of institutions
listed in the stock exchange
Investments in equity and other capital instruments of institutions
not listed in the stock exchange
Staff loan secured by residential property
Interest Receivable/claim on government securities
Cash in transit and other cash items in the process of collection
Other Assets
CREDIT EXPOSURES
BANKS
DOMESTIC
MDBS
G'TEE OF
73,766,865
12,653,604
1,112,587,026
712,140,988
140,346,188
SEC/G'TEE OF
FOREIGN BANKS
94,014,070
34,015,328
TOTAL
338,846,652
712,140,988
140,346,188
1,125,240,630
334,156,534
4,409,978,993
260,389,669
OTHER
SOVEREIGNS
338,846,652
NEPAL
G'TEE OF
727,791,224
-
4,217,614
SECURITIES
GOVT. OF
SEC/G'TEE OF
727,791,224
GOLD
G'TEE OF
GOVT.& NRB
168,450,830
-
BANKS/ FIS
DEPOSITS
WITH OTHER
Schedule 30(C)
168,450,830
89,796,455
34,015,328
WITH BANK
DEPOSITS
Credit Risk Mitigation Contd.
113
114
Nabil Bank Limited

Operations
Risk
Schedule 30(D)

PARTICULARS
Net Interest Income
Commission and Discount Income
YEAR 1
YEAR 2
YEAR 3
2,978,248,622
2,298,599,711
2,089,606,277
201,084,866
180,570,348
184,024,512
364,075,214
Other Operating Income
Exchange Fluctuation Income
447,070,485
Additional Interest Suspense during the period
98,947,274
Gross income (a)

Alfa (b)
Capital Requirement for operational risk (d) (average of c)
276,102,798
51,116,013
4,089,426,461
3,097,243,927
613,413,969
464,586,589
15%
Fixed Percentage of Gross Income [c=(ab)]
290,855,057
15%
Risk Weight (reciprocal of capital requirement of 10%) in times (e)
215,481,543
276,964,251
69,520,870
2,835,597,453
15%
425,339,618
501,113,392
408,867,454
5,011,133,921
4,088,674,543
10
10
5,011,133,921
4,088,674,543
10
Equivalent Risk Weight Exposure [f=(de)]

If Gross Income for all the last three years is negative
Total Credit and Investment (Net of Specific Provision)

Capital Requirement for operational risk (5%)
Risk Weight (reciprocal of capital requirement of 10%) in times

Equivalent Risk Weight Exposure (g)
Equivalent Risk Weight Exposure (h=f+g)
LAST YEAR
Market Risk
10
Schedule 30(E)
CURRENCY
OPEN POSITION (FCY)
THIS YEAR Rs.

OPEN POSITION
(NPR)
USD
317,152
30,430,756
30,430,756
109,652,725
EUR
29,476
3,695,656
3,695,656
2,274,283
AUD
5,649,360
2,286,373
CHF
4,337,038
3,047,060
S.NO.
4
6
8
GBP
CAD
51,781
42,987
64,995
JPY
2,335,665
CNY
59,019
DKK
42,751
7,502,036
3,960,350
5,649,360
2,257,887
4,337,038
922,467
RELEVANT OPEN
POSITION
PREVIOUS YEAR Rs.

RELEVANT OPEN
POSITION
7,502,036
3,960,350
2,257,887
922,467
3,641,860
3,143,591
1,628,899
258,190
85,457
1,437,385
1,437,385
2,812,736
INR
71,962,722
115,194,328
115,194,328
26,435,484
SAR
16,044
410,566
410,566
10
HKD
12
QAR
14
SGD
24,068
1,826,768
1,826,768
2,153,243
16
AED
4,045
105,696
105,696
109,125
44,840
138,107
138,107
69,582
11
13
15
17
18
Total Open Position (a)

Fixed Percentage (b)
Capital Charge for Market Risk [c=(ab)]
Risk Weight (reciprocal of capital requirement of 10%) in times (d)

Equivalent Risk Weight Exposure [e=(cd)]
SEK
MYR
THB
2,600
5,575
6,160
6,781
178,340,484
32,162
146,901
88,642
204,379
178,340,484
32,162
146,901
88,642
204,379
158,334,447
5%
47,981
163,480
487,287
1,508
121,040
5%
8,917,024
7,916,722
89,170,240
79,167,220
10
10
115
Principal Indicators
Schedule 31

S.N.
PARTICULARS
Net Profit/Gross Income
Market Value per Share
2
4
5
6
7
8
9
10
11
12
13
14
15
16
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
2007/08
2008/09
FINANCIAL YEAR
2009/10
2010/11
2011/12
2012/13
29.68
30.56
24.11
22.29
23.74
32.66
1,355
1,815
60.00
65.00
Earnings Per Share
Rs.
Price Earning Ratio
Times
Dividend (including bonus) on share capital

Cash Dividend on Share Capital
Interest Income/Loans & Advances
Employee Expense/Total Operating Expense
Interest Expense on Total Deposit and Borrowings

Exchange Gain/Total Income
Staff Bonus/ Total Employee Expenses

Net Profit/Loans & Advances
Net Profit/ Total Assets
Total Credit/Deposit
Rs.
115.86
113.44
83.81
70.67
83.23
45.53
43.19
28.45
17.72
16.21
5,275
100.00
8.04
%
%
%
%
60.00
21.17
2.64
7.81
4,899
85.00
35.00
8.82
23.96
3.22
7.47
2,384
70.00
30.00
10.41
13.79
4.43
6.17
1,252
30.00
30.00
12.50
11.91
6.15
4.60
40.00
12.85
12.26
5.74
6.26
95.14
19.08
40.00
11.64
19.59
3.67
7.20
41.42
43.50
44.29
42.05
48.26
48.90
2.32
2.55
2.37
2.43
2.80
3.25
3.96
4.02
3.47
3.73
4.14
5.04
68.18
73.87
71.17
78.29
77.91
74.90
a. Core Capital
8.75
8.74
8.77
8.83
9.30
9.98
c. Total Capital Fund
11.10
10.70
10.50
10.58
11.01
11.59
0.74
0.80
1.48
1.77
2.33
2.13
Total Operating Expenses/Total Assets
Adequacy of Capital Fund on Risk Weighted Assets

b. Supplementary Capital
17
INDIC-ATORS
Liquidity (CRR)
Non Performing Loans/Total Loans
Weighted Average Interest Rate Spread

Book Net Worth per Share
Total Shares
Total Permanent Employees
Weighted Average Number of Ordinary

Shares Outstanding
Return on Equity
Return on Assets
Dividend Payout Ratio

Earnings Yield
Dividend Yield
Cost to Income Ratio
Total Assets to Shareholders' Fund
Shareholders' Fund to Liability including

Contingent Liability
Number of Offices
Number of ATMs
%
%
Rs.
3.86
2.35
8.37
3.94
354
4.34
1.96
9.03
4.16
324
5.54
1.73
3.02
4.40
265
6.91
1.75
4.90
4.37
225
6.73
1.71
8.60
4.95
269
4.84
1.61
9.32
5.48
275
Number
6,892,160
9,657,470 14,491,240
20,297,694
20,297,694
24,368,414
Number
6,442,910
9,089,256 13,590,702
18,929,598
20,297,694
23,320,064
2.32
2.43
2.80
3.25
Number
%
%
416
29.35
92.33
2.20
1.90
505
557
33.93
30.27
79.62
89.05
2.55
2.32
1.74
2.38
3.52
2.94
657
29.02
42.45
5.64
2.40
650
30.25
71.80
6.17
4.43
742
32.78
68.32
5.24
3.58
51.14
52.11
56.31
63.50
57.16
48.60
5.74
5.98
6.21
6.61
7.71
8.33
Number
32
48
63
68
78
times
Number
15.24
28
14.01
38
13.59
49
12.73
49
10.09
52
9.56
51
81
contd.
116
Nabil Bank Limited
NOTE:
1. Gross Income in S.N. 1 comprises of
Interest Income, Commission and Discount,
Other Operating Income and Exchange
Income.
2. EPS in S.No.2 is computed in line with
Nepal Accounting Standard (NAS) 26 Earning
Per Share that requires computation of EPS
dividing earnings attributable to equity holders
by weighted average number of shares.
Weighted average number of ordinary shares
outstanding (in S.No.23) during the period is
the number of ordinary shares outstanding at
the beginning of the period, adjusted by the
number of ordinary shares bought back or
issued during the period multiplied by a timeweighting factor. The time-weighting factor is
the number of days that the shares are
outstanding as a proportion of the total
number of days in the period. Bank's basic
and diluted EPS is same since there are no
potential ordinary shares outstanding as on the
balance sheet date.
3. Market Value per Share in S.N. 3 is the
closing price quoted in Nepal Stock Exchange
on Monday, the 15th July 2013.
4. The Interest Income in S. N. 7 is the

interest income from loans and advances
(excluding staff loans) only. The loans and
advances are the average loans and advances
for the entire financial year. The average
balance during the year was
Rs.43,997,640,455.17.
9. Total Assets in S.N. 13 and S.N. 15 are

average balance of assets computed by
averaging outstanding balance of previous
financial year and current financial year.
5. Total Operating Expense in S.N. 8

comprises Interest Expense, Staff Expense and
Other Operating Expense.
11. CRR in the S.N. 17 is computed on the

basis of cash and cash equivalents and
deposits outstanding on the balance sheet
date. The CRR (as per NRB Directives) for the
last week of the current financial year is
6.22%.
6. The Deposits and Borrowings in S.N.9 are

the average deposits and borrowings (including
debentures) for the entire financial year. The
average balances of deposits and borrowing
during the year was Rs.58,330,804,734.32
and Rs.1,300,107,665.58 respectively.
7. Total Income in S.N. 10 is same as Gross
Income in S.N. 1 comprising of Interest
Income, Commission and Discount, Other
Operating Income and Exchange Income.
8. The Loans and Advances in S.N. 12 is
same as Loans and Advances in S.N. 7 and is
the average balance for the entire financial
year.
10. Credit and Deposit in S.N. 14 is the

outstanding balance as of balance sheet date.
12. Return on Equity in S.N. 24 is computed

by taking average Equity including Proposed
Dividend of previous year till the date of AGM
and average after-tax net profit of current year.
Figures of previous years have been restated
accordingly wherever necessary.
13. Earnings Yield represent earning
(attributable to equityholders) per market
value of share.
14. Dividend Yield represent dividend per
market value of share.
117
Principal Accounting Policies
1. CORPORATE INFORMATION
1.1 Reporting Entity: Nabil Bank Limited

(hereinafter referred to as the Bank) is a
joint venture public limited company,
incorporated on 11th May 1984 as per the
then Companies Act 1964 of Nepal, and
domiciled in Nepal. It is a Ka class licensed
institution licensed under the Bank and
Financial Institutions Act, 2006 and
commenced its commercial banking
operations from 12th July 1984 as per the
then Commercial Banking Act, 1964. The
registered office of the Bank is located at
Nabil Centre, Durbar Marg, Kathmandu,
Nepal. Its ordinary shares (Class C),
institutional investor shares (Class B) and
promoter shares (Class A) are listed on the
Nepal Stock Exchange Limited (the sole stock
exchange in Nepal) for public trading.
The Bank has employed 1,270 people in
total as at 15 July 2013 that comprises of
742 permanent staff (650 as at 15 July
2012) and 528 outsourced and contract
staffs (604 as at 15 July 2012).
1.2 Subsidiary: Nabil Investment Banking
Ltd. (herein after referred to as the
Subsidiary) is a subsidiary company of the
Bank. It was incorporated on 07th of
February 2010 as a public limited company
as per the Companies Act 2006. It is a
Merchant Banker licensed by Securities Board
of Nepal under the Securities Businessperson
(Merchant Banker) Regulations, 2008. The
Bank, as at the Balance Sheet date, holds
74.29% controlling interest in the Subsidiary.
The Subsidiary has employed 17 people in
total as at 15 July 2013 that comprises of
12 permanent staff (8 as at 15 July 2012)
and 5 outsourced and contract staffs (4 as at
15 July 2012). Additional 2 personnel are
deputed by the Bank to work in the
Subsidiary.
The financial year of the Subsidiary is

common to that of the Bank (parent
company). The current Financial Year ended
on July 15, 2013.
1.3 The Bank and the Subsidiary are
collectively referred to as the Group.
2. PRINCIPAL ACTIVITIES
2.1 The principal activities of the Bank are to

provide full-fledged commercial banking
services including, agency services, trade
finance services, card services, e-commerce
products and services and commodity trading
services to its customers through its strategic
business units, branches, extension counters,
ATMs and network of agents.
2.2 The principal activities of the Subsidiary
are to provide merchant/investment banking
services that include management of public
offerings, portfolio management, underwriting
of securities, fund management of mutual
fund schemes, depository participant's
service under Central Depository Service
(CDS) and administration and record keeping
of securities of its clients.
3. APPROVAL OF FINANCIAL
STATEMENTS BY BOARD OF
DIRECTORS
3.1 The accompanied financial statements

including consolidated financial statements
have been authorized by the Board of
Directors, vide its resolution dated September
06, 2013 and recommended for its approval
by the Annual General Meeting of the
shareholders.
4. RESPONSIBILITY FOR
FINANCIAL STATEMENTS
4.1 The Board of Directors, per paragraph 6 of

NAS 01, Presentation of Financial Statements
read in conjunction to Section 108(2) of the
Company Act 2006, is responsible for the
preparation of financial statements of the Bank.
The Board of Directors acknowledges this
responsibility as set out in the Annual Report
of the Board of Directors.
Schedule 32
4.2 These financial statements include the

following components:
a. a Balance Sheet (including Consolidated
Balance Sheet) disclosing the information on
financial position of the Group and the Bank;
b. a Profit and Loss Account (including
Consolidated Profit and Loss Account)
disclosing the financial performance of the
Group and the Bank for the period under
review;
c. a Cash Flow Statement (including
Consolidated Cash Flow Statement)
disclosing the information on the ability of the
Group and the Bank to generate cash and
cash equivalents;
d. a Statement of Changes in Equity
(including Consolidated Statement of Changes
in Equity) showing all changes in equity of
the Group and Bank; and
e. Notes to the Financial Statements
comprising a summary of principal
accounting policies of the Group and the
Bank and other relevant explanatory notes
that is of material importance to the readers
of the financial statements to facilitate
informed decision making.
5. STATEMENT OF COMPLIANCE
5.1 Except otherwise stated by Nepal Rastra

Bank (NRB) Directives, Bank & Financial
Institutions Act 2006 and Company Act
2006, the consolidated financial statements
of the Group and separate financial
statements of the Bank have been prepared
in accordance with Nepal Accounting
Standards (NAS) as issued by the Nepal
Accounting Standard Board (NASB) and in
accordance with International Financial
Reporting Standards 10 "Consolidated
Financial Statements".
118
Nabil Bank Limited
5.2 NAS comprise of all accounting

standards as well as interpretations issued by
the NASB that were effective at the time of
preparation and presentation of financial
statements. As of the balance sheet date,
NASB has pronounced nineteen accounting
standards in effect and six accounting
standards for voluntary application.
5.3 NRB Directives comprise of NRB Unified
Directives and circulars issued by NRB (the
licensing and regulatory authority) relevant
for the preparation and presentation of
financial statements.
5.4 The Group and the Bank do not adopt
accounting treatments that are inconsistent
with NRB Directives and NAS and comply
with these in all material respects. In case of
any inconsistency prevailing between the
provisions in NRB Directives and NAS, NRB
Directives have been complied with to the
extent of such inconsistencies.
6. BASIS OF PREPARATION
6.1 The assets and liabilities reported in the

consolidated financial statements of the
Group and the separate financial statements
of the Bank are presented in functional
currency which is Nepalese Rupees (NRs.)
and are prepared on historical cost
convention except for translated foreign
currency value.
6.2 Preparation of financial statements in
conformity with NAS requires the use of
certain critical accounting estimates and also
requires management to exercise judgement
in process of applying the Group's and the
Banks accounting policies.
7. BASIS OF CONSOLIDATION
7.1 The consolidated financial statements

have been prepared in accordance with
International Financial Reporting Standards
10 Consolidated Financial Statements. In
preparing the consolidated financial
statements, the financial statements of the
Bank and the Subsidiary are combined line
by line by adding together like items of
assets, liabilities, equity, income and
expenses.
7.2 The consolidated financial statements of

the Bank for the year ended on July 15, 2013
comprise of the accounts of the Bank and the
Subsidiary. The Bank consolidates the financial
statements of the Subsidiary only when it
controls the Subsidiary. An investor controls
investee when it is exposed, or has rights, to
variable returns from its involvement with the
investee and has the ability to affect those
returns through its power over the investee.
Para 7 of IFRS 10 outlines three conditions to
be fulfilled in order to establish control:
(a) power over the investee;
(b) exposure, or rights, to variable returns
from its involvement with the investee; and
(c) the ability to use its power over the
investee to affect the amount of the investors
returns.
In the case of the Bank and the Subsidiarys
investor-investee relationship,
(a) Power over the Subsidiary exists from the
voting rights granted by the equity share. The
Bank holds 74.29% of controlling interest in
the Subsidiary.
(b) The Subsidiarys capital composes only
equity instruments and the Banks returns
from the involvement in equity instruments
have the potential to vary with the
performance of the Subsidiary. The Bank has
thus exposure, or rights, to variable returns
from its involvement with the Subsidiary.
(c) The Bank has deputed its staff as CEO of
the Subsidiary and CEO of the Bank represents
in the Board of the Subsidiary in the capacity
of Chairman. The Bank thus has the ability to
exercise its power over the Subsidiary to affect
the amount of the Banks return.
7.3 The financial statements of the
Subsidiary are included in the consolidated
financial statement from the date that control
effectively commences until the date that the
control effectively ceases.
7.4 All intra Group transactions and

balances, income and expenses and any
unrealised gains / losses arising from such
inter-company transactions and balances are
eliminated in full while preparing the
consolidated financial statements.
8. SIGNIFICANT
ACCOUNTING POLICIES
8.1 The principal accounting policies applied

by the Group and the Bank in the preparation
of these financial statements are presented
below. These policies have been consistently
applied to all the years presented unless
stated otherwise.
A. Equity
Equity is the residual interest of the equity
holders in the assets after deducting all its
liabilities. It comprises of all funds
contributed by equity holders, retained
earnings and reserves representing
appropriation of retained earnings.
The Group discloses all residual interest in
the form of Share Capital and Reserves &
Surplus on the face of balance sheet except
proposed cash dividend, which is separately
disclosed as Proposed Dividend on the face in
line with the format prescribed by NRB. The
proposed cash dividend continues to remain
as a part of equity until the date of
ratification by AGM. Dividend proposed by
the Subsidiary company are eliminated from
proposed dividend while consolidation and
are restated in the consolidated retained
earnings and non-controlling interest.
As per Section 44 of Bank and Financial
Institutions Act 2006, all licensed institutions
are required to transfer minimum 20% of net
profit after tax to the General Reserve until it
becomes double of paid up capital. The Bank
consistently transfers the fund from the profit
in the General Reserve to comply with this
requirement. There is no such statutory
requirement for the Subsidiary.
As per Section 45 of the aforesaid Act, all
licensed institutions are required to transfer
minimum 25% of the Total Revaluation Gain
(except gain from revaluation of Indian
119
Currency) in the Exchange Fluctuation

Reserve. The Bank consistently maintains the
Reserve by transferring the fund from the profit
to comply with this requirement. There is no
such statutory requirement for the Subsidiary.
As per Directives 4 of NRB Unified
Directives, all licensed institutions are
required to maintain Deferred Tax Reserve
equivalent to the amount of Deferred Tax
Asset. The Bank consistently maintains
equivalent reserve to the amount of deferred
tax asset to comply with the requirement of
the Directives. The Subsidiary also maintains
equivalent amount in the reserve.
The Group maintains Investment
Adjustment Reserve for Available for Sale
Investment which is not made available for
distribution to its equity holders.
The Bank has constituted a Contingent
Reserve in line with Scheme for Payment of
Staff Hospitalization Charges that is
primarily intended to fund staffs medical
treatment for cases of severe ailments that
are not covered by medical insurance policy.
According to this Scheme, the Bank
appropriates NRs.1,000 thousand from
Retained Earning towards this reserve on
annual basis and transfers back to Retained
Earning to the extent of amount that is
contributed to the staff in the year of such
contribution. No such reserve is being
maintained by the Subsidiary.
B. Assets
Assets are resources controlled by the entity
as a result of past events and from which
future economic benefits are expected to flow
to the entity. Group's assets include all assets
controlled by the Group from which it expects
derivation of economic benefits in the future
to the Group. The assets of the Group
comprise of cash, balances held with the
central bank and financial institutions,
investments (including derivative investment),
loans and advances, fixed assets,
non-banking assets and the assets aggregated
under other assets.
i. Loans and Advances

including Bills Purchased
Loans and advances include direct finance
provided to the customers. These comprise of
business loans of short term and long term
nature, project and infrastructure loans,
consumer loans, credit card loans, bills
purchased and discounted and loans provided
to deprived sectors.
Loans and advances are recognised when
the loans are actually disbursed and are
derecognized at the time of their settlement.
Bills purchased or discounted are
recognised as loans when the bills are
actually purchased or discounted and are
derecognized at the time of their settlement
by presentation and/or endorsement.
These are presented at net of loan loss
provisions and are not stated on amortised
cost basis.
ii. Investment
Investment includes short term and long
term placements, money at call and short
notice, derivative investments, government
securities (development bonds and Treasury
Bills), bonds, debentures, mutual fund
investments and share investments in
subsidiary companies and other organised
institutions.
All investments are initially recognised at
cost, being fair value of the consideration
given, including acquisition charges
associated with the investment. The
investments held by the Bank are classified in
following 3 categories:
a. Held till Maturity (HTM) Investments:
These investments are primarily intended to
hold until the maturity and are stated at cost
and carried at these values in the Balance
Sheet until the maturity. Any impairment
losses arising in such investments are
provisioned and charged to the Profit and
Loss Account (Income Statement). Premiums
paid/ discount received while acquiring HTM
Investments is recognized as the part of initial
cost and subsequently adjusted with the

interest income on effective interest basis
until the maturity.
b. Held for Trading (HFT) Investments:
These are the marketable investments and
held with the primary intention of resale over
a short period of time. These investments are
initially measured at cost and subsequently
recognised at market value. Gains or losses
arising from trading / revaluation are
recognised in Profit and Loss Account
(Income Statement).
c. Available for Sale (AFS) Investments:
These are the investments held with the
primary intention to recover value of
investments through sale rather than
continuing to hold. These investments are
initially measured at cost and subsequently
recognised at market value. Any gains or
losses arising till the investments are held are
recognised on Investment Adjustment
Reserve. Any gains or losses are recognised
in Profit and Loss accounts only at the time of
disposal of such investments.
While assessing the market value,
consideration is given to the transaction
activities in the stock exchange and
conservative approach is adopted in order to
avoid overstatement of the equity position.
Accordingly, those investments which are not
actively traded at the stock market are carried
at cost and amount equivalent to at least 2%
of such investments are earmarked on
Investment Adjustment Reserve from the
retained earnings in line with the requirement
of NRB.
In case of unquoted investments other than
the investments in the Subsidiary, investment
adjustment reserve is maintained to the
extent of 100% of such investment:
to the period of maximum 1 year from the
date of investment, if the company is already
incorporated prior to the investment of the
Bank and the shares of such company are not
listed in stock exchange within 1 year from
the date of investment;
120
Nabil Bank Limited
to the period of maximum 2 years from the

date of investment, if the company is newly
incorporated and the Bank has also promoted
such company and the shares of such
company are not listed in the stock exchange
within 2 years from the date of investment.
In case of investment in the Subsidiary,
whether listed or not in stock exchange,
investment adjustment reserve is maintained
to the extent of 100% of such equity
investment. Such investment is also deducted
while determining the Tier 1 Capital for
Capital Adequacy calculation purpose in line
with the requirement of NRB Directives.
All investments are subject to periodic
review as required by NRB Directives.
iii. Property, Plant and Equipment
(Fixed Assets)
Property, plant and equipment are tangible
items that are held for use in the production
or supply of services, for rental to others, or
for administrative purposes and are expected
to use during more than one financial year.
Group's property, plant and equipment
comprise of the Bank's and the Subsidiarys
land & premises registered under its
ownership, office equipments and furniture,
vehicles, leasehold developments, software
applications and assets under construction or
work-in-progress.
Cost of an item of property, plant and
equipment is recognised as an asset, if and
only if, it is probable that future economic
benefits associated with the item will flow to
the entity and the cost of the item can be
measured reliably. The cost of an item of
property, plant and equipment comprises of
purchase prices including taxes, custom
duties and any costs that is directly
attributable to bring the asset to the location
and condition that is necessary for it to be
capable for operating in the manner intended
by the management. Costs incurred for
dismantling / removal and for restoration of
site are recognised as a part of the new item

of the property, plant and equipment. Cost of
an item of an asset includes cost of an asset
under construction and work-in-progress.
Any subsequent cost incurred for the
property, plant and equipment is recognised
as an asset if it meets the recognition criteria.
The cost that does not qualify as an asset is
charged off in the Income Statement as repair
and maintenance.
The carrying amount of an asset is
derecognised at the time of disposal or when
no future economic benefits are expected to
flow from its use or disposal. The gain or loss
arising from derecognition of an item of
property, plant and equipment is included in
profit or loss when the item is derecognised.
The carrying amount of the property, plant
and equipment is the amount at which an
asset is recognised after deducting any
accumulated depreciation and accumulated
impairment losses.
Non-consumable items having life more
than one year and/or costing less than NRs.
5,000 are expensed off during the year of
purchase.
The Bank consistently adopts cost model
for entire class of its property, plant and
equipment.
iv. Inventory
a. Stationery
i. Stationery stocks are inventories in the form
of materials or supplies held by the Group to
be consumed while rendering the services.
The Group does not hold any item of the
inventory that is in the state which is not
readily usable (i.e. raw material or semifinished) for rendering the services or that for
the selling purposes.
ii. Stationeries are measured either at the
lower of cost or net realisable value (NRV),
except for certain items that are specifically
used only by the Group and the Bank. Such

specific items are measured at the lower of
cost or replacement price.
iii. The stationeries are written down on an
item by item basis, when the inventories are
damaged or have become wholly or partially
obsolete that affects the effective use while
rendering services.
iv. Stationeries are recorded at actual cost
basis and charged to revenue at the time of
its consumption.
b. Bullion Stock under Consignment
i. The Bank holds precious metals (gold and
silver) in its possession arising from
consignment transaction. All risks and
rewards pertaining to the assets are vested
with the consignor. The Bank merely acts as
an agent of the consignor and hence does not
recognise the stock in its books as an
inventory.
v. Staff Loans
Staff loans are loans granted to the staffs
as per the Integrated Staff Loan Policy of the
Bank and are recognised as loans at the time
of their disbursement. They are derecognised
at the time of recovery/settlement.
Staff loans comprise of housing loan
facility, personal loan facility and vehicle loan
facility and are presented under "Staff Loans
and Advances" in Schedule 16 of the
Financial Statements.
vi. Interest Receivables
Interest receivable comprise of interest
accrued on loans (including receivables on
loans to staffs under Integrated Staff Loan
Policy of the Bank) and investments and are
recognised on daily basis based on the
outstanding balance at the end of the day.
Interest receivables on loans (except staff
loans) are stated at full value and are
disclosed net of interest suspense under
Accrued Interest on Loan in Schedule 16 of
121
the Financial Statements. Similarly, Interest

receivables on staff loans are presented under
Others in the same Schedule.
100% loss provision is maintained for

NBA and continues to remain until it is
disposed off.
Interest receivables on investments are

stated at full value.
C. Liabilities
Liabilities are present obligations of the entity
arising from past events, the settlement of
which are expected to result in an outflow
from the entity of resources embodying
economic benefits. Liabilities of the Group
and the Bank comprise of borrowings,
deposits, bills payable, dividend payable,
interest accruals, unearned income, sundry
creditors and other liabilities.
vii. Prepayments
Prepayments are the amount paid in
advance on account of provision of services in
future. Prepayments comprise of amount paid
in advance for insurance services, rental of
leased premises, communication like internet
connectivity, maintenance of services (AMCs)
and other miscellaneous services.
Prepayments are recognised as asset at
full value on the date of payment.
They are derecognised as and when
services are received or at the time service
accrues or period mature.
viii. Security Deposits
Security deposits are the amount
deposited by the Bank or the Group on
account of security of fees on services that is
being received from the provider.
They are recognised as security deposits
until the receipt of service continues and the
Bank and the Group do not have any
intentions to discontinue the service.
ix. Non Banking Assets (NBA)
Non Banking Assets of the Bank comprise
of assets or the mortgaged properties realised
from the borrowers in lieu of settlement of the
loan after exercising all efforts for settlement
in cash.
NBA is recognised lower of recoverable
amount from the market (Net Realisable
Value) and outstanding dues recoverable from
the borrower, immediately after the
ownership of assets is transferred to the Bank
at the concerned authority. The recoverable
amount from the market is estimated on the
basis of independent evaluation of the
approved Valuator. NBA is derecognized at
the time of its disposal.
i. Borrowings
Borrowings comprise of local and foreign
currencies' inter-bank borrowing and the
debentures issued to the public.
Borrowings are recorded at the full value
and recognised on the effective dates
mentioned in the deed or contract.
Borrowings are derecognised at the time of its
disposal / settlement.
ii. Deposits
Deposits of the Bank and the Group
comprise of local and foreign currencies' current
deposits, savings deposits, call deposits, time
deposits, margin deposits and other deposits of
the customers held by the Bank and the Group.
Deposits are stated at full value and
recognised on the date of deposition.
Deposits are derecognised at the time of its
withdrawal / maturity.
iii. Bills Payable
Bills payable are negotiable instruments
issued/endorsed by the Bank for
consideration received in exchange from the
customer. Bills payable comprise of manager
cheques, travellers cheques, drafts issued in
local currency and foreign currencies payable
at the counter of the Bank and the cheques
realised at Nostro banks on behalf of
customer sent for collection by endorsement.
These are recorded at full value and
recognised at the time of its issuance for the
consideration received. They are derecognised

at the time of its disposal at the Bank's
counter or after receipt of information of
disposal from other banks and financial
institutions.
iv. Dividend Payable
Dividend payables are the dividends,
payable to its equity holders duly ratified by
the current or earlier AGMs.
They are stated at full value immediately
after AGM ratifies the Board's proposal on
dividend. Immediately before the AGM
ratification, it retains the status of Equity.
v. Interest Accruals
Interest accruals comprise of interest
payables on deposits, borrowings and
debenture. They are recognised on the
outstanding balance at the end of the day on
daily basis.
Interest accruals are derecognised at the
due date i.e. on the date it is credited in
customers' account.
vi. Unearned Income
Unearned Income comprise of income
received in advance on account of loans
under subvention scheme, LC fees and
guarantee fees issued with a risk period of
more than 1 year period and for fees with
more than Rs.50,000 (fifty thousand).
They are recognised as liability at the time of
its receipt and are derecognised as and when
income accrues and / or risk period expires.
Unearned interest income is presented in
13 Others in Schedule 7.
vii. Provisions
Provisions are liabilities of uncertain
timing or amount. They are recognised as
liabilities when the Group or the Bank has a
present obligation (legal or constructive) as a
result of past event and that there are
probabilities of outflow of resources
embodying economic benefits to settle the
obligation and can be estimated reliably.
122
Nabil Bank Limited
While making an estimate, consideration

is given to immediate trends, past practices
and approved polices. In extremely rare
circumstances, where no reliable estimate
can be made, a liability exists that cannot be
recognised. That liability is disclosed as a
contingent liability.
Provisions for utility expenses: Provisions
for utility expenses are recognised based on
immediate trends. Excess or deficits are
adjusted in the subsequent months.
Provisions for communication: Provisions
for communication (viz., telephone, swift) are
recognised based on immediate trends.
Activity log wherever possible is also
considered while estimating the provision.
Excess or deficits are adjusted in the
subsequent months.
Provision for audit fees: Audit fees are
provisioned based on the remuneration fixed
by the equity holders at the Annual General
Meeting.
Provision for staff bonus: Staff bonus is
provided as per Bonus Act, 1974.The Bonus
Act requires provision at the rate of 10% on
the amount of net profit before tax.
Employee Leave:
i. Employee leave are compensated absences
and comprises of annual leave, sick leave,
casual leave, maternity leave, paternity leave,
substitute leave and bereavement leave and
are compensated as per Employee Bye-Laws
of the Bank and the Subsidiary.
ii. Entitlement to compensated absences fall
into two category:
a. accumulating; and
b. non accumulating
iii. The Group recognizes cost of
compensated absences as follows:
a. in case of accumulating, when the
employees render service that increases their
entitlement to future compensated absences;
and
b. in case of non accumulating, when the
absences occur.
iv. Annual leave and sick leave are

accumulated to the maximum extent of 60
days and 30 days (15 days till last year)
respectively and is carried forward for the use
in future periods. Leave balance in excess of
90 days (75 days till last year) as on mid
April is paid each year. Leave earned and
accrued on a proportionate basis as at the
balance sheet date (Mid July) is recognized
as liability duly reduced by the absences
availed by the employees.
viii. Gratuity, Insured benefits
and Provident Fund:
Gratuity, insured benefits and provident
fund are post-employment benefits available
only to the permanent employees and after
completing designated service period or
probation period.
The Bank and the Subsidiary make regular
contribution to the approved Retirement Fund
and to the Insurance Company for the disposal
of gratuity, insurance and provident fund
obligations. These benefits are defined
contributions plans and the Bank and the
Subsidiary have limited legal or constructive
obligation only to the extent that they agree to
contribute to the fund and in consequence,
actuarial risk (that benefits will be less than
expected) and investment risk (that the assets
invested by the independent entity will be
insufficient to meet expected benefits) fall on
the employee.
Gratuity, insured benefits and provident
fund obligation to employees are computed as
per the approved policy of the Bank and the
Subsidiary and are expensed off in the Profit
and Loss Account on accrual basis. Provident
fund obligation is settled every month while
the insured benefits are paid in advance and
are recognized as prepayments and settled on
monthly basis. Gratuity obligation is
determined and settled on the last month of
each financial year (i.e. Mid July). Contribution
to approved retirement fund against the
gratuity obligations (incremental) has been
made since Mid July 2004 annually.
The gratuity obligation disclosed as

Gratuity Fund in Schedule 7 of the financial
statement is the total gratuity obligation
accrued till Mid July 2003 and payable to the
employees of the Bank who are continuing
their employment as at the balance sheet
date. At the time of retirement (including
resignation) of the employee, the obligation is
settled by paying the amount from this Fund.
The Bank does not bear any further obligation
(either legally or constructively) to pay return
on this fund to the employees.
D. Income
Incomes are increases in economic benefits
during the accounting period in the form of
inflows or enhancements of assets or
decreases of liabilities that result in increases
in than equity, other those relating to
contributions from equity participants.
Income comprises of interest income, fees
and commission, foreign exchange income,
cards income, disposal income etc.
i. Interest Income
Interest income comprise of interest
earnings on foreign currencies and local
currency loans & advances, investments in
Bonds, Treasury Bills and Placements.
Interest income on loans and advances
(except staff loan under Integrated Staff Loan
Policy) are recognised on cash basis as
prescribed by NRB Directives, which is not in
accordance with NAS that prescribes
recognition of interest on effective interest
method. The practice followed by the Bank as
per NRB Directives is more conservative and
prudent. Interest income on staff loans is
recognised on accrual basis.
Interest income on Investments including
earnings from call accounts and fixed deposits
and staff house loan is recognized on effective
interest method. Interest accruals on bonds
and debentures at the time of purchase are
reduced from the cost of acquisition. Discount
or premium on bonds / debentures and
transaction costs are adjusted with the cost of
investment to determine effective interest rate.
123
Interest income received by the Bank from

the vendors / dealers under subvention
scheme at the beginning of the loan tenure is
initially recognised as liability and
subsequently charged to Profit or Loss
Account (Income Statement) as and when
they are earned.
All interest earnings (including on foreign
currencies' assets) are accounted in functional
currency.
ii. Fees and Commission Income
Fees and commission on credit service
(management/ appraisal) including renewals are
recognised as and when credit line is approved
or renewed. All other fees ancillary to credit
services is recognised as and when services are
rendered. The recognition of fees is not in line
with NAS 7, Revenue Recognition, which
prescribes that the fees that are integral part of
the effective interest rate of a financial
instrument by making an adjustment in the
effective interest rate but is in accordance with
NRB Directives which prescribes recognition of
interest on loans and advances on cash basis.
Prepayment fee levied for pre-mature
settlement of loans and advances are
recognised at the time of credit settlement.
Commission on guarantee exceeding NRs.
50,000 covering period more than a year is
accounted for on accrual basis over the
period of guarantee. Commission other than
above are recognised immediately after
issuance of guarantee.
Commissions on LC issuance /
amendment, LC acceptance, draft issuance,
card issuance are recognised at the time of
issuance / amendment /acceptance. Ancillary
communication fees on LCs (issued,
amended, accepted and settlement) are
recognised at the time of their issuance,
amendment, acceptance and settlement.
Renewal fees and cancellation charges are
recognised as and when services are renewed
or cancelled.
TC sales, bill purchases, remittance are

recognised at the time of transactions.
Rental fees for letting safe deposit lockers
are initially recognised when the occupancy
right is granted to the customer and
subsequent renewal fees are recognised
immediately after rental period expires.
Agency commission on insurance services
which do not require rendition of additional
services in future are recognised on the
effective commencement or renewal dates of
the related policies.
Commission from bullion operation is
recognised at the time the risks and rewards
attributable to the bullion are transferred to
the buyer.
Fees for management service rendered to
the Subsidiary are recognised at the end of
every month in line with the contract executed.
All other commissions are accounted after
rendering the services.
iii. Dividend Income
Cash dividend on equity shares is
recognised as and when right to receive is
established. Dividend declared from net profit
of pre-acquisition period is recognised as a
recovery of part of cost unless it is difficult to
segregate into pre-acquisition and postacquisition dividend. In case there is a
difficulty in segregation, such dividends are
recognised as revenue.
Cash dividend declared by resident
companies are recorded at net of withholding
tax, while declared by non resident companies
are recorded at gross value. Tax deducted by
non resident companies is recognised as
Advance Tax to the extent adjustable with the
Banks corporate tax liability.
Bonus/Stock dividend declared and whose
right to receive has been established is not
recognised as income. The quantity of shares
received as bonus/stock dividend is disclosed
in Schedule 12(A) of the financial statements.
iv. Foreign Exchange Transactions

Foreign currency transactions are initially
recognised in functional currency, by applying
to the foreign currency amount, the prevailing
exchange rate between the functional
currency and the foreign currency at the date
of transaction.
Each foreign currency assets and liabilities
arising from foreign currency transactions and
outstanding at the end of the day are
revaluated by mid exchange rate prevailing at
the end of each day. Mid exchange rate is the
average exchange rate of Non-Cash Ask Rate
and Bid rate.
Gain or loss realized on trading of foreign
currencies is recognized on daily basis and
accounted as Trading Gain / (Loss). This is
presented under "Trading Gain / (Loss) in
Schedule 22 of the financial statements.
Gains/losses arising due to fluctuation in
exchange rates of different foreign currencies
at every point of time (including intra-day
fluctuations) is recognized on daily basis and
accounted as Revaluation Gain / (Loss). This
is presented under Revaluation Gain/(Loss)
in Schedule 22 of the financial statements.
Premium/discount on foreign exchange
forward contract is accounted for as trading
gain or loss at the time of transaction and
presented under "Trading Gain / (Loss)" in
Schedule 22 of the financial statements.
25% of such revaluation gain is
transferred to Exchange Fluctuation Fund
charging Profit and Loss Appropriation
Account as per NRB Directives.
v. Recovery from Written-Off Loans
Recovery from written-off loans is
recognised as income when the amount is
actually received from the borrower.
All transaction costs viz., legal costs,
notice publication expense, negotiation fees
etc. incurred for the recovery of written-off
loans are reduced from the gross recovery
amount and disclosed in Schedule 28 of the
124
Nabil Bank Limited
vi. Gain / (Loss) arising on disposal of assets

The gain or loss arising from the
derecognition of an item of property, plant
and equipment is included in profit or loss
when the item is derecognised. The gain or
loss is determined as the difference between
the net disposal proceeds, if any, and the
carrying amount of the item.
The carrying amount of an item of property,
plant and equipment is derecognised:
a. on disposal; or
b. when future economic benefits are not
expected from its use or disposal.
The gain or loss arising on disposal of
Available for Sale Investments is included in
the profit or loss when the investments are
actually sold.
E. Expenses
Expenses are decreases in economic benefits
during the accounting period in the form of
outflows or depletions of assets or
incurrences of liabilities that result in
decreases in equity, other than those relating
to distributions to equity participants.
i. Interest Expense
Interest expense comprise of interest
expense accrued on foreign currencies and
local currency deposits, bonds and borrowings.
All interest expenses are accounted in
functional currency on accrual basis.
ii. Employment Benefits
Employee benefits are all forms of
consideration given by the Bank and the
Subsidiary in exchange for service rendered
by employees.
This comprises of:
a. short term employee benefits viz., salary
and all allowances, short term compensated
expenses, (annual leave, sick leave etc.), profit
sharing bonuses and perquisites (car facility,
subsidized loans) that is payable within twelve
months after the end of the period;
b. post employment benefits that is payable

after the completion of employment; and
c. termination benefits that is payable as a
result of the Bank's and the Subsidiary's
decision to terminate an employee's
employment before the normal retirement date
or of an employee's decision to accept voluntary
retirement in exchange of those benefits.
Short term employee benefits are
recognised as an expense when an employee
renders the service or at the time when the
entitlement of compensation increases due to
rendition of service.
Post employment benefits are recognised
as expense when the entitlement of
compensation accrues as a result of rendition
of service.
iii. Depreciation
Depreciation is the systematic allocation of
the depreciable amount of an asset over its
useful life.
Each part of an item of property, plant and
equipment of the Group which is identifiable
separately is depreciated separately. The
depreciation charge for each period is
recognised in profit or loss unless it is
included in the carrying amount of another
asset.
Depreciation of an asset begins when it is
available for use, i.e. when it is in the
location and condition necessary for it to be
capable of operating in the manner intended
by the management. For simplicity,
depreciation is charged from the next month
it is made available for use. Depreciation of
an asset ceases when it is derecognised at
the time of its disposal.
Depreciation on following assets is
charged to Profit and Loss Account on
Diminishing Balance method over the
estimated useful life of depreciable assets.
Land is not depreciated.
Leasehold assets (improvements) are

amortized over the period of lease using
Straight Line Method.
Cost of software licences and are
amortized over a period of useful life of the
software, estimated as 5 years from the date
of acquisition.
NATURE OF ASSETS
Furniture
Equipments
Vehicles
Computers
Building
USEFUL
LIFE
DEPRECIATION
RATE
10 years
25%
7 years
20%
10 years
7 years
50 years
25%
25%
5%
iv. Impairment Provision

The amount of loss that results due to the
reduction of recoverable amount than the
carrying amount of an asset or as a result of
legal requirement is charged to Profit and Loss
Account as an impairment loss. The
impairment loss is provided for on the credit
portfolios, investments and fixed assets (if any)
at every reporting date.
a. Loan Loss Provision
Provision for possible losses on loans is
made to cover the risks inherent in the Banks
credit portfolio. Provision for possible losses
from loans, advances and bills purchased are
made at the rates ranging from 0.25% (first
slab for insured deprived sector loans) up to
100% (for overdue loans exceeding one year)
according to the classification of such risk
assets as per NRB Directives. Additional
provision in excess of the regulatory
requirement (NRB Unified Directives) can also
be made to ensure comfortable cushion.
b. Provision on Investments
Impairment on quoted investments is
recognised by assessing the recoverable
amount of an investment from the stock
exchange and the cost of an investment. In
case of investments that are not actively
traded at stock exchange, recoverable amount
is computed on equity basis. Impairment is
determined when the carrying amount exceeds
the recoverable amount.
125
In case of unquoted investments,

recoverable amount of an investment is
determined on an equity basis. Impairment
loss is recognised if the recoverable amount
so calculated on an equity basis is less than
the cost of an investment.
c. Impairment on Fixed Assets
The Bank does not identify smallest group
of fixed assets that generates cash inflows
that are largely independent of the cash
inflows from other assets or group of assets
and hence no impairment loss is provided
unless there is clear evidence that its market
value has been reduced.
The Bank and the Subsidiary assess, at
each reporting date, whether there is any
indication that an impairment loss recognised
in prior periods for an asset no longer exist or
may have reduced. If any such indication
exists, the Bank and the Subsidiary estimate
the recoverable amount of that asset. The
Bank and the Subsidiary reverse impairment
loss to the extent it has been expensed off in
prior years when the recoverable amount
exceeds the carrying amount.
v. Write Off
Loan accounts graded Bad / Loss in
compliance with NRB Directives are written
off in the books as per Loan Write off By-Law
of the Bank approved by NRB and in
compliance with Income Tax Act 2002,
without prejudice to the Bank's right to
recovery.
Impairment provisions held for the loss
accounts are written back immediately after
the loans are written-off.
vi. Income Tax Expense
Income tax expense comprises of current
and deferred income tax and additional
income tax assessed by the tax auditor and
taxation authorities. Disclosure of additional
income tax in the Profit and Loss Account is
made as required by NRB.
Current tax liabilities (assets) are the
amounts that are expected to be paid to
(recovered from) the Inland Revenue
Department in respect of income of current

year. The tax rates (and tax laws) used for the
computation are those that are enacted or
substantively enacted by the Balance Sheet
date. Accordingly, provision for current tax
has been made with reference to the profit of
the financial year based on the provisions of
the Income Tax Act 2002 and amendments
thereto.
Deferred taxes are recognized and
provided for on temporary differences arising
between taxable incomes and accounting
incomes.
Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply to the period when the asset is
realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted
or substantively enacted by the balance sheet
date.
Deferred tax assets are not recognised
unless there is convincing evidence that there
will be sufficient future taxable income
available to realize such assets. Deferred tax
assets & liabilities are netted off and
presented either under Other Assets or under
Other Liabilities.
Deferred Tax Reserve is earmarked to the
extent of outstanding balance of Deferred Tax
Assets as per NRB guidelines.
F. Contingent Liabilities
The contingent liabilities comprise of:
a. possible obligations that arise from past
events and whose existence will be confirmed
only by the occurrence or non-occurrence of
one or more uncertain future events not
wholly within the control of the Bank; or
b. present obligations that arise from past
events but is not recognised because:
i. it is not probable that an outflow of
resources embodying economic benefits will
be required to settle the obligation; or
ii. the amount of the obligation cannot be

measured with sufficient reliability.
All letter of credit, bank guarantee and
forward exchange contract liabilities have
been shown in full amount as contingent
liabilities in accordance with the directive
issued by NRB.
Besides above, all known liabilities
wherever material are provided for, and
liabilities, which are material and whose future
outcome cannot be ascertained with
reasonable certainty, are treated as contingent
and disclosed under contingent liabilities.
G. Events after the Balance Sheet Date
Events after the Balance Sheet Date are those
events, favorable and unfavorable, that occur
between the Balance Sheet date and the date
when the financial statements are authorized
for issue.
In this regard, all material and important
events that occurred after the balance sheet
date have been considered and appropriate
disclosures are made in Note 16 to the
H. Earnings Per Share
Basic Earnings per Share is calculated for
profit or loss attributable to the Bank's and
the Subsidiary's ordinary equity holders and,
if presented, profit or loss from continuing
operation attributable to those equity holders.
It is calculated by dividing profit or loss
attributable to ordinary equity holders (in the
numerator) by the weighted average number
of ordinary shares outstanding (in the
denominator) during the period.
The earnings attributable to the ordinary
equity holders comprise of the earnings of the
Bank and the Subsidiary after adjustment of
all expenses including tax expense and
preference dividends, differences arising on
the settlement of preference shares, and
other similar effects of preference shares
classified as equity.
126
Nabil Bank Limited
Ordinary equity (share) comprises an

equity instrument that is subordinate to all
other classes of equity instruments of the
Bank and the Subsidiary, if any.
Weighted average number of ordinary
shares outstanding during the period is the
number of ordinary shares outstanding at the
beginning of the period, adjusted by the
number of ordinary shares bought back or
issued during the period multiplied by a timeweighting factor. The time-weighting factor is
the number of days that the shares are
outstanding as a proportion of the total
number of days in the period.
Diluted Earnings per Share is calculated for
profit or loss attributable to the Bank's and
the Subsidiary's ordinary equity holders and,
if presented, profit or loss from continuing
operation attributable to those equity holders.
It is calculated by dividing profit or loss
attributable to ordinary equity holders (in the
numerator) by the weighted average number
of ordinary shares outstanding (in the
denominator) during the period and is
adjusted for the effects of all dilutive potential
ordinary shares.
As a result of adjustment for the effects of

dilutive potential ordinary shares:
i. profit or loss attributable to ordinary equity
holders of the Bank and the Subsidiary is
increased by the after-tax amount of
dividends and interest recognised in the
period in respect of the dilutive potential
ordinary shares and is adjusted for any other
changes in income or expense that would
result from the conversion of the dilutive
potential ordinary shares; and
I. Basis of Interest Computation

Interest expenses on
deposits/borrowings/bonds and interest
income on loans & local currency investments
are computed on the basis of 365 days a
year.
ii. the weighted average number of ordinary

shares outstanding is increased by the
weighted average number of additional
ordinary shares that would have been
outstanding assuming the conversion of all
dilutive potential ordinary shares.
8.2 The Bank and its subsidiary adopt

uniform accounting policies for like
transactions and events in similar
circumstances.
Dilutive potential ordinary share is a

financial instrument or other contract that
may entitle its holder to ordinary shares. It
comprises of convertible instruments like
convertible preference shares, convertible
debentures, options and warrants and similar
such instruments.
Interest on foreign currency investments is

computed on the basis of 365 days a year for
GBP and 360 days a year for USD, EUR,
DKK and JPY.
127
Schedule 33
Notes to Accounts
1. EQUITY
1.1. Changes in paid-up equity capital

Nepal Rastra Bank (NRB), the licensing and regulatory authority, has prescribed NRs.2 billion as
minimum equity capital requirement for class A licensed commercial banks.The Banks capital
position at balance sheet date is as follows:
PARTICULARS
NRs. 000
REGULATORY MINIMUM
NABIL BANK
Paid Up Capital
1,600,000
3,046,052
Total Equity Capital
2,000,000
6,418,749
Reserves eligible for Tier - I Capital Fund
400,000
3,372,697
1.2. Proposed changes in paid-up equity capital

The Board of Directors of the Bank, in its meeting dated September 6, 2013, has passed a resolution
recommending for distribution of stock dividend at 25% of paid up equity capital at year ended July
15, 2013. The Banks paid up equity capital shall increase by NRs.609,210 thousands upon
approval from the upcoming shareholders Annual General Meeting.
1.3. Chronology of stock issuance
Since incorporation, the Bank has increased its paid up equity capital to NRs.3,046,052 thousands
from initial level of NRs.28,182 thousands.
PARTICULARS
Initial issuance (469,707 @ NRs.60 per share)
Additional issuance (3,820 @ NRs.60 per share)

Additional issuance (180 @ NRs.60 per share)
NRs. 000
EQUITY
ENHANCEMENT
ENHANCEMENT DURING
FINANCIAL YEAR
28,182
1984 - 85
229
11
1985 - 86
1986 - 87
1,400
1987 - 88
Final Call (500,000 @ NRs. 40 per share)*
20,000
1991 - 92
Issuance of 100% Bonus Shares
65,426

177
15,426
130,851
1988 - 89
1992 - 93
1994 - 95
1996 - 97
131,094
1997 - 98
197,562
2007 - 08

98,858
276,531
2000 - 01
2008 - 09
483,377
2009 - 10
407,073
2012 - 13
Capital Issued and Paid up at balance sheet date
580,645
2,436,842
*NRs.40 per share was capitalized from retained earnings to make paid up value NRs.100.
2010 - 11
128
Nabil Bank Limited
1.4. General Reserve

The banks reserve position is presented hereunder:
PARTICULARS
AMOUNT
Opening balance
Minimum regulatory requirement @ 20% of net profit
443,752
Actual amount transferred to General Reserve
444,000
Closing balance
NRs. 000
AMOUNT
2,176,500
444,000
2,620,500
1.5. Contingent Reserve

The Bank has appropriated NRs.1,000 thousands in contingent
reserve out of current years net profit.
In the current year the bank paid NRs.400 thousands to an employee as reimbursement of medical
expenses incurred for his heart surgery performed in India. This amount has been transferred from
contingent reserve to retained earnings and recognized as medical expense presented in Schedule 23
of the financial statements.
NRs. 000
PARTICULARS
AMOUNT
Opening balance
13,274
Add: Appropriation from current year's Profit
1,000
Less: Transferred to Retained Earnings on account of Hospitalization expense reimbursement to staff (400)
Closing balance
13,874
1.6. Deferred Tax Reserve

Deferred tax reserve has increased due to creation of additional deferred tax assets during the current year.
PARTICULARS
Opening balance
Capital nature expense charged in Profit & Loss Account

Deferred tax assets on other temporary differences
Closing balance
TEMPORARY DIFFERENCE
614
6,050
NRs. 000
AMOUNT
42,575
184
1,815
44,575
129
1.7. Investment Adjustment Reserve (IAR)

The bank has maintained adequate IAR as required in NRB directives 04/069 and 08/069. Detail
calculation of IAR requirement under different categories of investment is presented hereunder:
PARTICULARS
NET INVESTMENTS RESERVE REQUIREMENT
Opening balance
Shares of local licensed institutions

- Listed securities @ 2%
- Not listed securities @ 100%

- Not listed securities @ 2%
Shares of local organized institutions
- Not listed securities (Subsidiary) @ 100%

- Exempted securities *
Other Investments
- Listed securities (Nabil Balance Fund I) @ 2%
- Not listed securities (SWIFT shares) @ 100%

Closing balance
NRs. 000
MOVEMENT IN RESERVE
94,031
122,581
24,081
22,071
22,071
8,750
82,936
78,000
4,936
47,735
52,775
78,000
107,041
105,000
2,041
312,558
955
1,056
9,834
29
1,056
78,000
4,141
2,100
2,041
106,222
2,357
2,075
282
106,222
* These investments are exempted from IAR requirement per provisions in

NRB Directives 4/069 and 8/069.
The bank has maintained IAR equivalent to 100% of its equity investment in subsidiary company in
compliance to clause 3 of NRB Directive 8/069. The bank has also deducted such investment while
calculating Tier I Capital per the same clause.
1.8. Exchange Fluctuation Fund
Licensed institutions are required to appropriate 25% of net revaluation income to exchange
fluctuation fund each year. This is a requirement under section 45 of the Banks and Financial
Institutions Act 2006 and applies to revaluation gain on foreign currency position except the Indian
currency. The bank is in compliance to this requirement and the calculation of such appropriation is
presented hereunder:
PARTICULARS
AMOUNT
Opening balance
Minimum regulatory requirement @ 25%
of revaluation gain presented in Schedule 22
Actual amount transferred to Exchange Fluctuation Fund

Closing balance
NRs. 000
AMOUNT
126,300
23,923
24,000
24,000
150,300
130
Nabil Bank Limited
2. PROPOSED DIVIDEND
2.1. Nabil Bank

For the year ended on July 15, 2013, the Board of Directors of the Bank have recommended for
distribution of dividend NRs.65 per share (65%) that consists of a cash dividend of NRs.40 per share
(40%) and a stock dividend of NRs.25 per share (25%). This will be decided at the forthcoming
Annual General Meeting of the Bank. Total cash dividend proposed for the year will amount to
NRs.974,737 thousands.
Proposed cash dividend has been appropriated from the profit and disclosed separately on the face of
balance sheet per provisions in NRB Directive 4/069.
2.2. Subsidiary (Nabil Invest)
Until endorsement of Bank's financial statement, the Board of Directors of Nabil Invest is yet to
endorse its financial statements. The company's total distributable reserve as of balance sheet date is
NRs. 23,643 thousands an increase by NRs.21,167 thousands from last year's figure.
2.3. No interim dividends were paid during the year by the Bank or Subsidiary. Withholding tax will be
deducted at source at 5% at the time of dividend payment.
3. CAPITAL REDEMPTION RESERVE
Per provisions in clause 5 of NRB directive 16/069 licensed institutions are required to maintain a
capital redemption reserve in respect of debenture liability. Regulator has approved debenture issuance
of the bank vide their letter bearing reference number Bai.Bi.Ni.Bi./Bi.R 2/Nabil Bank/9/064/65 dated
09th May 2008 (27.01.2065 B.S.). As per the approval terms the bank is required to transfer 20%
of the face value of debenture to capital redemption reserve each year, starting from the 6th year of
debenture issuance. As such the bank is required to create debenture redemption reserve starting from
financial year 2013/14.
4. ASSETS
4.1. Balance with Nepal Rastra Bank (NRB)

Reconciliation of NRB Balance (Ledger and Statement Balance)
PARTICULARS
Unreconciled balance as on 15.07.2013

We Debit
They Debit
We Credit
They Credit
Reconciled balance as on 15.07.2013
NRs. 000
LEDGER
STATEMENT
4,789,295
3,972,779
(960,500)
(288)
77,187
67,085
3,972,779
3,972,779
131
Ageing details of pending items is presented as under:

AGE
< 1 month
> 1 month < 3 months
STATEMENT DEBIT
LEDGER CREDIT
STATEMENT CREDIT
960,500
288
67,836
19,018
Total

> 24 months
NRs. 000
LEDGER DEBIT
5,522
960,500
769
47,000
168
1,382
1,510
288
77,187
4.2. Balance with domestic Banks and Financial Institutions

Reconciliation of domestic BFIs balance (Ledger and Statement Balance)
PARTICULARS
96
67,085
NRs. 000
LEDGER
STATEMENT
57,747
68,625
We Debit
(1,394)
We Credit
7,267
They Debit
972
(121)
They Credit
5,126
68,625
68,625

LEDGER DEBIT
STATEMENT DEBIT
LEDGER CREDIT
000
STATEMENTNRs.
CREDIT
1,394
121
5,730
5,123
1533
AGE
< 1 month

> 24 months
Total
1,394
121
4
-
7,267
3
-
5,126
132
Nabil Bank Limited
4.3. Balance with foreign Banks and Financial Institutions
Reconciliation of foreign BFIs balance (Ledger and Statement Balance)

PARTICULARS

We Debit
LEDGER
STATEMENT
(104,686)
1,687,369
(427,542)
They Debit
(18,412)
We Credit
1,854,013
They Credit
383,997
1,687,369
1,687,369

AGE
NRs. 000
LEDGER DEBIT
STATEMENT DEBIT
LEDGER CREDIT
STATEMENT CREDIT
427,542
13,721
1,853,612
342,139
4,667
3,465
< 1 month

> 24 months
Total
427,542
24
186
35,379
46
2,838
101
63
18,412
1,854,013
176
383,997
4.4. Inter-Branch Reconciliation

There are no un-reconciled entries/balances in case of inter-branch transactions as on balance sheet date.
4.5. Loans and Advances
The Bank's year-on-year gross loans and advances rose by 11% to reach NRs.47,645,530 thousands.
Business Loans that comprise of term loans, overdraft, trust receipt and other working capital loans
occupy 66% of total lending portfolio. Similarly, about 25% of the portfolio is occupied by consumer retail
loans and credit card loans while 9% of total exposure is occupied by real estate loans.
During the current year major volume growth was achieved under business loans reporting 12%
increment. Real estate lending saw a decline of 5%.
NRB Directives 03/069 has defined real estate loans as residential real estate loans in excess of NRs.10
million; business complex and residential apartment construction loans; income generating commercial
complex loans; and other real estate loans for land purchasing and plotting.
TYPE OF LOAN AND ADVANCES
1. Real Estate Loan
a. Residential Real Estate Loan
(except Home Loan up to NRs.10 million)
b. Business Complex & Residential Apartment Construction Loan

c. Income generating Commercial Complex Loan
d. Other Real Estate Loan
(Including Land purchase & Plotting)
2. Personal Home Loan up to NRs.10 Million

3. Margin Type Loan
4. Term Loan
CURRENT YEAR
4,435,751
554,870
PREVIOUS YEAR CHANGES VOLUME
(235,706)
(5.0)
353,620
201,250
56.9
610,300
4,265
0.7
786,269
2,446,085
2,921,268
3,270,349
6,948,455
2,446,109
4.3
(475,183)
(16.3)
0.0
824,240
33.7
1,115,682
19.1
7,515,164
920,355
12.2
24,555,456
22,402,265
Total
47,645,530
42,867,768
8,435,519
33,962
5,832,773
5. Overdraft / TR Loan / Working Capital Loan
6. Others
4,671,457
820,231
614,565
NRs. 000
2,153,191
4,777,762
9.6
11.1
133
NRB Directives 03/069 has set a maximum ceiling of lending to total real estate sector at 25% of gross loans and
advances. Within this total ceiling there is a separate ceiling for lending to other real estate loans for land purchasing
and plotting at 10% of gross loans and advances. As at balance sheet date, bank has mere 9% exposure under this
head. The Bank stands in compliance to this requirement.
4.6. Investments
4.6.1. Held for Trading
The Bank does not hold investments that are primarily intended for trading purpose as of balance sheet date.
4.6.2. Held to Maturity Investments

Overall held to maturity investments of current financial year have increased by 15.6% over the previous financial year.
The HTM investment listed on the exchange market is presented net of impairment provision on the balance sheet date.
TYPE OF INVESTMENTS
1. Nepal Government Treasury Bills *

- 91 days
AT COST
IMPAIR-MENT
CURRENT YEAR
4,603,924
595,442
4,603,924
998,042
348,428
998,286
998,286
1,616,173
1,616,173
- 364 days
395,980
3,310,079
4. Placement in local and foreign banks
7,877,602
3. Foreign Bonds (denominated in US $)

Total
239,654
11,773
16,031,258
11,773
2.4
- 362 days
- 363 days
4,494,594
1,996,147
595,442
- 251 days
CHANGE (%)
998,042
- 182 days
NRs. 000
PREVIOUS YEAR
198,428
-
395,980
1,951,591
3,310,079
227,881
3,505,383
(5.6)
5,659,108
39.2
196,245
7,877,602
16,019,485
16.1
13,855,330
15.6
The Accrued Interest Receivable on treasury bills amounting to NRs.21,099 thousand on the balance sheet
date has been capitalised in the value of treasury bills, being amortisation of discount.
The increment reflected on Foreign Bonds (denominated in US $) in comparison to last year was due to
appreciation of US Dollar vis--vis NRs. No other foreign bonds were further acquired or disposed during the
current financial year.
4.6.3. Available for Sale Investments
The Bank's Available for Sale investments comprised of all investments other than held to maturity
investments and held for trading investments.
TYPE OF INVESTMENTS
1. Listed Securities
- Equity in local licensed BFIs

- Mutual Fund units
- Equity in foreign entities
2. Not listed Securities
- Equity in local licensed BFIs
- Equity in local BFIs under licensing process

- Equity in other local institutions
- Equity in SWIFT
Total
- Equity in subsidiary company
AT COST
IMPAIRMENT
154,309
1,574
105,000
49,309
1,574
162,767
2,945
12,000
65,791
4,936
2,041
78,000
317,076
2,945
-
4,518
NRs. 000
NET
MARKET
152,735
586,198
INVESTMENT
47,735
105,000
VALUE
304,949
105,000
176,249
62,846
159,823
12,000
4,936
2,041
78,000
312,558
586,198
134
Nabil Bank Limited
4.6.3.1. Equity investments in local licensed BFIs

These comprise of equity investments in promoter shares of
licensed rural development banks and micro financial
institutions. These investments are also intended for compliance
of mandatory requirements of deprived sector lending as
prescribed by the regulator. These investments are recognized at
cost considering inactive trading for bulk promoter's shares and
unavailability of market prices for such shares.
MasterCard International on conversion into a private stock

corporation allocated its franchisee class B common stock to its
members in recognition of their membership interest. The bank
presently holds 1,114 units of Class B Common Stock having a
par value of USD 0.0001 each. Holders of Class B common
stock are entitled to receive equal amount of dividend declared
for Class A stock and confer equity rights but not the voting
rights in MasterCard Incorporated.
The market price in Stock Exchange generally represents closing

trading price of ordinary shares issued to public equity holders.
Promoter shares are often traded at lower price compared to
ordinary shares. Moreover, bulk promoter shares are seldom
traded due to trading restrictions imposed by the regulators. The
number of institutional investors required to ensure active trading
of these shares is also limited. Due to these reasons, quoted
market price cannot be used to estimate their fair value.
The shares of Class B common stock may be traded privately

among the eligible members of MasterCard International
Incorporated (subsidiary of MasterCard Incorporated) while Class
A common stock is traded in New York Stock Exchange. As on
15th July 2013, the adjusted closing price (for stock splits and
dividends) of Class A common stock was USD 595.87 per
share. The fair value of the Bank's holding of 1,114 units of
common stock is around NRs.63,692 thousands (USD
663,799 @ NRs.95.95 per USD).
The Bank, with due compliance to the regulatory provisions, has

appropriated fund from retained earnings to investment
adjustment reserve for these investments. In addition, these
investments are also tested for impairment on equity basis and
any impairment loss is recognized in the Profit and Loss account
as described in Principal Accounting Policies under Provision on
Investment.
4.6.3.2. Investment in Mutual Fund Unit
The Bank has obtained license from Security Exchange Board of
Nepal (SEBON) on 01st February 2012 to sponsor Mutual Fund
schemes. During the current year the bank sponsored a Mutual
Fund Scheme under name Nabil Balanced Fund I. The Bank
has subscribed to 10,500,000 units @ Rs.10 per Unit. The
Bank has invested in this fund to comply with the regulatory
provision that requires 15% seed capital injection by the Fund
Manager or the Fund Sponsor. The Banks investment constitutes
14% of the fund size. Remaining 1% has been subscribed by
the Fund Manager. The last traded price at Nepal Stock
Exchange was NRs.10.06 per unit.
As at balance sheet date the Net Assets Value of Nabil Balanced
Fund I is NRs.10.22 per unit.
4.6.3.3. Equity investments in foreign entities
The Bank holds different classes of common stocks in
MasterCard International and VISA Inc.
Similarly, the Bank currently holds 6,166 units of Class C

Common Stock of VISA Inc. having a par value of USD 0.0001
each allocated after its conversion to VISA Inc. This class of
stock is eligible for public sale since 7th February, 2011 and
trades at same price as Class A or Class B shares. At 15th July
2013, the Class A common stock were priced at USD 190.25
per share and the fair value of the Bank's holding on that date is
NRs.112,557 thousands (USD 1,173,082 @ NRs.95.95 per
USD).
4.6.3.4. Equity investments in BFIs under licensing process
These comprise of equity investments in promoter shares of
micro financial institutions which are under approval process for
obtaining license from the regulator. Investment is these entities
are intended towards meeting the regulatory minimum deprived
sector lending requirement.
4.6.3.5. Equity investments in Subsidiary
As of balance sheet date, the Bank has invested NRs.78,000
thousand in its subsidiary holding an effective equity interest of
74.29%.
4.6.3.6. Equity investments in other local institutions
These comprise equity investments made in local companies
complementary to the banking industry. The Bank holds
promoter group equity shares in KarjaSuchana Kendra Limited,
National Banking Training Institute and Nepal Clearing House
Ltd.
135
4.6.3.7. Equity investments in SWIFT

The Bank holds eight unit shares in SWIFT (Society for
Worldwide Interbank Financial Telecommunication) having
nominal value of EUR 125 per share. These shares are
denominated in EUR. These shares are conferred to the Bank in
respect of its membership interest in SWIFT network. These
shares are entitled to voting rights at the annual General
Meeting of SWIFT shareholders.
SWIFT shares are not listed at any stock exchange and do not
confer any dividend payments. Based on net assets valuation
the transfer value of one SWIFT share has been fixed at EUR
3,300 at the June 2011 General Meeting of SWIFT
shareholders. There has been no revision in transfer value since
then.
These shares are recognized at cost being the actual transfer
value paid while subscribing to the shares awarded to the Bank.
4.7. Fixed Assets

4.7.1. Capital Work in Progress (WIP)
Carrying amount of capital work-in-progress building include
costs incurred for construction of the banks own building for
Birgunj Branch. As of balance sheet date the entire civil
structure work has been completed and 90% of interior work
has also been completed. Accordingly, proportionate project
work valuations have been recognized as capital work in
progress.
4.7.2. Leasehold Assets
Summary of movement in leasehold assets of the Bank and
Group is presented hereunder:
136
Nabil Bank Limited
NRs. 000
PARTICULARS
At Cost
- opening balance
- additions this year
- deductions this year
Amortization
- opening balance
- additions this year
- deductions this year
Net closing balance
NABIL BANK
SUBSIDIARY CO.
GROUP
77,144
2,625
79,769
5,976
167
90,009
2,458
(18,841)
(18,841)
808
41,112
1,327
16,297
519
(18,659)
6,143
37,942
40,304
92,467
39,269
16,816
39,202
(18,659)
1,298
40,500
4.8. Other Assets

4.8.1. Stock of Stationery
As at balance sheet date, the Banks closing stock of stationery is valued at NRs.7,554 thousands.
Out of this stationery worth NRs.2,996 thousands are held at branches and those worth NRs.4,558
is held at central store. No material items that are disposable at the balance sheet date were held in
possession.
4.8.2. Income receivable on Investments
Income receivable on investments comprised of interest accrued on placements and bonds. Interest
accrued on treasury bills, being amortisation of discount, has been capitalised in the bid value of bills.
PARTICULARS
- Interest accrued on placements

Total
- Interest accrued on bonds
NRs. 000
LOCAL CURRENCY
FOREIGN CURRENCY
92,566
92,566
29,985
95,824
125,809
29,985
3,258
TOTAL
33,243
4.8.3. Accrued Interest Receivables (AIR) on loans

This comprise of interest on loans, advances and bills accrued but not yet due at balance sheet date
as well as those that stand overdue but not realized in cash. As at balance sheet date the interest
accrued but not yet due totaled NRs.80,361 thousands and overdue interest totaled NRs.301,935
thousands.
Per regulatory provisions interest suspense has been recognized equivalent to the entire AIR which is
not realised in cash. This is presented in Schedule 16 of the Financial Statements.
4.8.4. Sundry Debtors
Sundry debtors comprise of accounts receivables and deposits at Large Tax Payer's Office. Deposit at
LTPO is made in line with the requirement of Income Tax Act which stipulates for deposition of 1/3 of
disputed tax before contesting at the IRD for Director General's review against the assessment order.
The deposit reported under this head pertains to assessment of income years 2006-07 and 2007-08.
This tax deposit is not clubbed with advance tax in order to make appropriate presentation of the
bank's net corporate tax liabilities.
137
NRs. 000
PARTICULARS
CURRENT YEAR
PREVIOUS YEAR
885,086
363,129
- Customers *
119,169
346,633
- Others
743,472
Account Receivables
- Nepal Rastra Bank
- Employees **
Deposit at Large Tax Payers Office

Total
6,918
15,527
4,074
889,160
1,307
15,159
30
277
363,406
* Provision on Accounts Receivable Customers amounting NRs.638 thousands has been set off with receivables from customers.
** Similarly, Provision on Accounts Receivable Employees amounting NRs.506 thousands has been set off with receivables from employees above.
4.8.5. Staff loans and advances

Staff loan are extended in line with the integrated staff loan policy of the bank. Eligibility criteria for
availing staff loans are directly linked to the period of service under permanent payroll of the Bank.
Loans extended to staffs have increased during the year as more staffs became eligible and actually
availed such facilities. The loans outstanding as at the balance sheet date were as under:
PARTICULARS
Auto Loan
CURRENT YEAR
32,579
NRs. 000
PREVIOUS YEAR
25,020
Personal Loan
168,784
148,325
Total
875,340
813,596
Housing Loan
673,977
4.8.6. Prepayments
Following is the details of prepayments outstanding as on balance sheet date.
PARTICULARS
Prepaid items
- Rent
- Insurance
- Maintenance
- Communication
Total
- Others
CURRENT YEAR
7,526
640,251
NRs. 000
PREVIOUS YEAR
7,614
13,154
10,905
3,500
4,373
32,517
31,640
5,626
2,711
6,290
2,458
138
Nabil Bank Limited
4.8.7. Others
Items presented under this head are security deposits for availing
public utility services and interest receivable on staff loans.
PARTICULARS
NRs. 000
CURRENT YEAR
PREVIOUS YEAR
AIR on Staff Housing Loan
173,755
136,657
Total
175,232
138,249
Advance deposits for utilities
1,477
1,592
Interest receivable on Staff Housing Loan are realised out of proceeds from Endowment Life Policy.
Before disbursement of individual home loan to employees, an endowment life policy is purchased by
the Bank for insured sum equivalent to the principal loan amount. The insured policy is purchased for
a period earlier of 20 years or remaining service period of the employee till retirement. The employees
pay insurance premium in respect of policy on monthly basis. Upon maturity of the endowment policy,
the proceeds / bonus are applied towards settlement of interest and principal loan amount in a single
installment. Any surpluses or shortfalls are on account of concerned employees.
4.9. Bullion
As at balance sheet date, the Bank has held 309 Kilograms of gold in its possession.
The fair market value of the gold as on that date is NRs.1,223,510 thousands.
PARTICULARS
Opening balance
add : consignments received during the year

less : sold to local commercial banks
less : sold to local non bank parties
Closing balance
Value in USD
GOLD
160
3,750
(3,224)
(377)
309
- Gold USD 1,290.00 per Ounce
12,751,534
Value in NRs.000 (@ NRs.95.95 per USD)
1,223,510
- Silver USD per Ounce
Kilograms
SILVER
48,500
(22,500)
(26,000)
As detailed in Schedule 32 on Significant Accounting Policies, the Bank acts as an agent of the
consignor and hence does not recognise bullion stock in its books as an inventory.
5. LIABILITIES
5.1. Debentures and Bonds

The Bank allotted Nabil Bank Bond 2075 (2018 A.D.) of total face value NRs.300,000 thousands in
July/August 2008 A.D., redeemable in July / August 2018 A.D. The Bond is listed in Nepal Stock
Exchange (NEPSE) with symbol NABILB2075.
5.2. Deposits
5.2.1.During the current financial year, the Bank has been able to increase overall deposits by 15.6%
or NRs.8,586,113 thousands. Movement in different deposit segments is presented hereunder:
139
NRs. 000
PARTICULARS
Interest Free Deposits

- local currency
- foreign currency
Interest Bearing Deposits

- local currency
Total
- foreign currency
CURRENT YEAR
PREVIOUS YEAR
CHANGES
8,451,849
7,417,377
1,034,472
13.9
1,988,958
1,453,493
535,465
36.8
6,214,890
14.9
6,462,890
55,157,960
47,814,777
7,343,182
63,609,808
5,963,884
47,606,318
41,599,887
6,006,431
55,023,695
VOLUME
499,006
7,551,642
1,336,751
8,586,113
8.4
15.9
22.3
15.6
5.2.2. Deposit Insurance

The bank has insured savings and fixed deposits of all natural person account holders for balance up
to NRs.200 thousands threshold amount. For this the Bank has entered into an agreement with the
insurer, Deposit and Credit Guarantee Corporation on 13th December 2011. As of balance sheet date,
the total insured deposit portfolio is NRs.7,926,497 thousands and total number of insured deposit
account holders is 215,633.
5.3. Bills Payable
Bills payable comprise of manager's cheques, demand drafts, traveller's cheques issued by the Bank
and bills (cheques) realised on behalf of customers from Nostro banks but not yet credited in
customers' accounts. Cheques (drafts) of nostro banks issued by the bank are credited in the
respective nostro accounts instead of bills payable.
PARTICULARS
Local currency bills
- demand draft
- bill of exchange
- manager's cheque
- travellers' cheque
Foreign currency bills

- demand draft
- bill of exchange
- manager's cheque
- travellers' cheque
Net closing balance
NRs. 000
CURRENT YEAR
PREVIOUS YEAR
315,681
70,813
44
27
10,580
41,431
305,058
29,355
213,917
108,329
195,176
91,971
5,372
13,369
529,598
4,771
11,587
179,142
140
Nabil Bank Limited
5.4. Other Liabilities

5.4.1. Gratuity Fund
The Bank has a separate Gratuity Fund in respect of gratuity obligation that accrued till Mid July
2003. As per Income Tax Rules, 2003, this portion of retirement benefit is tax free for employees.
This obligation is settled when staffs retire or resign from the services of the Bank. During the current
financial year the Bank settled gratuity obligation NRs.2,133 thousands from this fund.
NRs. 000
PARTICULARS
CURRENT YEAR
Opening balance
78,441
- settled in respect of retired employees
(310)
- settled in respect of resigned employees
(1,823)
Closing balance
76,308
Gratuity obligations that have accrued after Mid July 2003 have been settled
in the same year they arose.
5.4.2. Employees Welfare / Leave Fund
Calculation for current years incremental obligation under leave liability in respect of accrued
employees leave is presented hereunder:
PARTICULARS
WEIGHTED
AVERAGE LEAVE
ACCRUED (MONTHS)
TOTAL LEAVE
OBLIGATION
37,813
1,716
64,893
As at 15-Jul-2012
As at 15-Jul-2013
Incremental leave obligation in current year

Incremental impact of:
- salary raise (on leave balance at 15-Jul-2012)
- increased leave period ( @ salary level at 15-Jul-2013)
Incremental leave obligation in current year
NRs. 000
AVERAGE LAST
DRAWN MONTHLY
SALARY
44,830
7,017
7,017
1,821
105
105
81,653
16,760
12,043
4,718
16,760
141
Employees leave obligation increased as a result of increase in total number of weighted average leave
accrued (in months). Employees start earning leave accrual days as they spend first few years in
service. Afterwards, accrual days start to reach ceiling, if not utilized, and the pace of leave
accumulation subside. Increase in total number of weighted average leave is due to the same reason.
Salary of permanent employees at all corporate levels were raised in the current year leading to raise
in average salary.
5.4.3. Staff Bonus
In line with provision of Bonus Act 1974, employee bonus is provided as under:
NRs. 000
APARTICULARS
Net profit before bonus and taxes as per CY's PL

Adjustments:
CURRENT YEAR
PREVIOUS YEAR
3,485,695
2,651,139
- Error rectification on Premium Amortisation of NRB Dev. Bonds

- Error restated on Previous Year's Profit
6,884
Adjusted Net profit before bonus and taxes of CY for bonus calculation
3,478,811
Provision for staff bonus @ 10% of net profit before tax
(316,256)
Net profit before bonus and taxes reported in PY's PL
(6,884)
2,658,024
(241,639)
5.4.4. Unearned income

As of balance sheet date, the Bank's total outstanding on unearned income stood NRs.93,836
thousands, detail of which is presented hereunder:
NRs. 000
PARTICULARS
- on letter of credit
- on bank guarantee
- on forward forex deals

Total
- on loan extended under subvention schemens
CURRENT YEAR
PREVIOUS YEAR
40,369
90,144
109,805
3,172
4,903
520
93,836
155,077
142
Nabil Bank Limited
Unearned income on guarantee and forward deals is presented under Unearned Discount and
Commission in Schedule 7 and unearned income on loans are presented under Others in the same
schedule of the Financial Statements.
5.4.5. Sundry creditors
NRs. 000
PARTICULARS
- TDS payable
- VAT payable
- Stale instruments
- Payable to Customers
- Payable to Employees
Total
- Other Payables
CURRENT YEAR
PREVIOUS YEAR
106,445
97,846
497
4,073
5,364
335,115
369,160
3,268
14,720
1,419
450,816
5.4.6. Dividend Payable

The Bank's dividend payable at balance sheet date stands NRs.41,098 thousands,
details of which is presented hereunder:
PARTICULARS
826
488,594
NRs. 000
CURRENT YEAR
Dividend relating to profit of Financial Year (FY)

1989 - 1990 to 1999 - 2000
2,399
2000 - 2001 to 2004 - 2005
5,074
2005 - 2006 to 2010 - 11

Total
678
20,900
2011 - 2012
12,725
41,098
In consonance of Directive 16 of NRB Unified Directives and Section 82(3) Bank and Financial
Institutions Act 2006 the Bank has published a general notice to equity holders on 1st August 2012
calling them to collect unclaimed dividends.
5.4.7. Others
Detail of items presented as S.No.13 Others in Schedule 7 is presented hereunder:
NRs. 000
PARTICULARS
CURRENT YEAR
Accrued expense payable
5,632
Total
8,805
Unearned income on Loans
3,172
PREVIOUS YEAR
3,744
45,272
49,015
143
5.5. Staff Housing Fund

The Bank has been extending housing loans to its employees
and therefore provision for staff housing fund as required by the
Labour Act 1992 has not been made. The Bank has recognized
interest income on staff housing loan on accrual basis in line
with NRBs approval.
6. CONTINGENT LIABILITIES (OFF BALANCE

SHEET ITEMS)
Bank's outstanding claim at the beginning of current financial

year from the beneficiaries of expired bank guarantees stood at
NRs.16,387 thousand. These claims were not honoured during
the current financial year and were continued to report under
"Claims on Institution but not accepted by the Institution".
In addition, claims from two beneficiaries of unexpired
guarantees received during the current year and remained
pending as of reporting date has been disclosed under this head.
Of these claims, the concerned applicant paid NRs.29,130
thousand directly to the beneficiary for full settlement of
NRs.32,400 thousand and sought for release of guarantee. Until
the reporting date, as no release was obtained from the
beneficiary, the Bank recognized the difference of NRs.3,470
thousand as its contingent liability. In respect of another claim,
the applicant received a stay order from the Patan Appellate
Court. Until reporting date, the case is pending and accordingly
the Bank has recognized NRs.3,060 thousand as its contingent
liability.
Together with opening claims and aforementioned 2 claims,
Bank's closing contingent liability under "Claims on Institution
but not accepted by the Institution" is NRs. 22,916 thousand.
7. INCOME
7.1. Interest Income on loans and advances

In addition to regulatory provision of recognising interest income
from loans and advances on cash basis, NRB directive 04/069
proviso to Section 5(1) has allowed BFIs to recognise such
interest income, that accrued till year end but was recovered in
cash within 15 days after year-end, in the income of current
year. The Bank did not chose to exercise this option and
recognized only those interest accrued and recovered in cash
within 15th July 2013 as interest income for current year.
7.2. Dividend income
The Bank has recognized NRs.20,588 thousands as dividend
income during the current financial year. This includes dividend
earned from domestic entities NRs.26,098 thousands
(accounted net of tax deduction at source @ 5%), NRs.6,263

thousands refunded to RMDC vide instruction of CIAA and
dividend earned from foreign entities NRs.754 thousand
(NRs.664 thousand from Visa Inc. and NRs.90 thousand from
MasterCard Inc. accounted on gross basis).
Tax deducted by foreign entities is claimed at the time of filing
income tax returns to the maximum extent available as per
Income Tax Act of Nepal.
7.3. Income from Non Deliverable Forward (NDF)
The Bank has recognized premium on Non Deliverable Forward
transactions as Foreign Exchange Income. During the current
financial year, Bank's net earnings against Non Deliverable
Forwards as proprietary income is NRs.110,075 thousands and
same from customer (on behalf of other banks) is Rs.56,935
thousands. As of 15th July 2013, Bank's NDF exposure was
USD16 million equivalent to NPR.1,535,200 thousands (at
NRs.95.95 per USD).
8. EXPENSES
8.1. Staff Expense

8.1.1. Gratuity expense
The Bank, during the current financial year, settled Rs.103,919
thousands in respect of gratuity obligation accrued till the
balance sheet date by contributing in the approved retirement
fund. The Bank does not have any incremental gratuity
obligation as of balance sheet date. The gratuity expense is
presented under "Pension and Gratuity Contribution" in Schedule
23 of the Financial Statements.
Current years gratuity expense is NRs.55,349 thousands or
114% higher than that of previous year. The main reason is due
to increment in employees salary. Cumulative impact of salary
revision on gratuity expense falls only in the year of the
increment. Hence the expense figure is high for current year.
8.1.2. Uniform
The bank expensed NRs.14,562 thousands as uniform expense
in the current year. As per Employee By-laws, office uniform is
provided to employees up to certain corporate level once in
every two years. Such expense is recognized as operating
expense in the same year. This expense is also recognized as a
component of taxable income while calculating employees'
individual tax liability.
8.1.3. Others
144
Nabil Bank Limited
Employees expense Others NRs.75,044 thousand presented under Others in Schedule 23 comprise of
overtime expenses, dashain expense (festival allowance), funeral grant, leave encashment, vehicle
maintenance expenses and cash incentives.
NRs. 000
PARTICULARS
- funeral grant
- cash incentive
- overtime expense
- dashain allowance
- leave encashment and provisions
Net closing balance
CURRENT YEAR
PREVIOUS YEAR
270
135
132
896
25,337
48,409
75,044
285
798
25,455
31,212
57,885
During the current financial year, the Bank accounted leave expense of NRs.48,409 thousands in
total. Of total, NRs.16,760 thousands was to provided for incremental leave obligation (presented in
Schedule 7) while NRs.31,648 thousands was paid in cash. Per Employee By-laws, accrued leave in
excess of ceiling for accumulation are settled on every Mid April through cash.
8.2. Impairment Loss
Impairment loss on investments was recognized respectively for foreign bonds and equity investments.
Impairment loss on foreign bond was recognized as per international market price prevalent on 15th
July 2013. Impairment on equity investments was recognized on equity basis for three micro-financial
institutions based on provisional financial statement received from these institutions.
NRs. 000
PARTICULARS
Impairment loss (net of write back) :
- on loans and advances (net of write back)
- on investments
- on FCY bonds
- on FCY derivative instruments

- on LCY equity instruments
Total
- on account receivable from customers
CURRENT YEAR
PREVIOUS YEAR
13,610
356,536
(12,262)
21,998
(11,525)
23,254
(214)
737
1,470
2,723
379,790
639
145
8.3. Income and Deferred Tax

8.3.1.The corporate tax liabilities of Group are computed and assessed individually. As per Income Tax
Act 2002, the tax rates enacted and substantively enacted at the balance sheet date are 30% and
25% respectively for the Bank and Nabil Invest.
8.3.2.After adjusting for disallowable and tax free items the Bank and Nabil Invest have computed
corporate tax liability of NRs.946,885 thousands and NRs.7,258 thousands respectively.
PARTICULARS
NABIL BANK
Profit from all activities
3,485,695
Profit before tax and tax related adjustments
3,169,439
- provision for staff bonus
Add back disallowable expenses

- donation
- employees' leave provision
- capital nature expense charged to revenue
- excess repair expense
- excess depreciation expense
Deduct allowable expenses and inadmissible income

- gain on sale of fixed assets
- gratuity expense paid to employees
- write back of provision on investment
- dividend income from domestic companies (net)

- excess depreciation charged for tax computation
Taxable Income
Corporate Tax Liability @ 30% and @ 25% respectively

Note: figures stated in parenthesis are deductible balance.
NRs. 000
SUBSIDIARY CO.
31,046
(316,256)
(2,822)
20,697
807
15
28,223
16,760
182
275
614
3,308
351
(983)
(33,852)
(1,510)
(11,525)
(19,835)
3,156,284
946,885
29,031
7,258
146
Nabil Bank Limited
8.3.3.Accounting tax is computed on accounting profit which is profit before tax (before adjustments
of temporary difference) less any permanent differences. Permanent difference in the case of Group
arose on donation (not paid to tax exempt entity) and dividend received from domestic companies (the
tax of which is final withholding tax).
PARTICULARS
NABIL BANK
Profit from all activities
3,485,695
3,169,439
- provision for staff bonus
Adjustments for permanent difference:

- donation
- dividend income from domestic companies
Accounting profit after adjustments
Accounting tax @ 30% and @ 25% respectively (A)
Current Tax (B)
Deferred tax income in profit and loss account (B-A)
SUBSIDIARY CO.
NRs. 000
INTER-CO.
GROUP TOTAL
31,046
(7,410)
3,509,331
28,223
(7,410)
3,190,253
15
3,149,620
28,223
(7,410)
3,170,433
946,885
7,258
954,143
(316,256)
ADJUSTMENTS
(2,822)
(19,835)
944,886
7,056
1,999
202
(319,078)
-
15
(19,835)
951,942
2,201
8.3.4.The relationship between tax expense and accounting profit is explained reconciling figures as under:
PARTICULARS
NABIL BANK
SUBSIDIARY CO.
3,169,439
28,223
950,832
7,056
- corporate tax rate
Corporate tax
Tax impact of permanent difference:

- donation
- dividend income from domestic companies
Prior period tax
Total Accounting Tax
Accounting Tax as expensed in Profit and Loss account:

- current tax
- deferred tax
- prior period tax
Total tax expense in Profit and Loss account
30%
(5,950)
5,792
25%
GROUP TOTAL
(7,410)
3,190,253
ADJUSTMENTS
957,888
5
(5,950)
950,678
7,056
390
946,885
7,258
390
5,792
(1,999)
950,678
(202)
7,056
NRs. 000
INTER-CO.
390
5,792
958,123
954,533
(2,201)
5,792
958,123
147
8.3.5.The Banks deferred tax assets (DTA) as at 15th July 2013 rose to NRs.44,575 thousand from
last years NRs.42,575 thousands. The rise in DTA is mainly attributable to increase in leave liability.
On the other hand, Nabil Invests deferred tax liability as at 15th July 2013 reduced to nil from last
years NRs.47 thousands.
Details of temporary differences and deferred tax assets/liabilities as at 15th July 2013 are presented
below:
PARTICULARS
Temporary difference on fixed assets

- tax base
- carrying value
- unused tax losses
Other Items of temporary differences
NABIL BANK
(31,854)
549,504
581,358
CURRENT YEAR
NABIL INVEST
GROUP
NABIL BANK
296
(31,558)
(34,793)
6,139
587,497
639,472
6,435
555,939
PREVIOUS YEAR
NABIL INVEST
GROUP
(330)
(35,123)
6,952
646,424
604,679
6,622
611,301
-
180,436
324
180,760
176,711
142
176,853
- employees' leave provision
81,653
324
81,977
64,893
142
65,035
- investment impairment provision
16,291
16,291
27,817
27,817
- provision for other assets
- employees' gratuity provision
Net temporary difference *
Deferred tax assets @ 30% / 25%
Deferred tax liability @ 30% / 25%
5,561
76,931
148,582
44,575
619
155
5,561
5,561
76,931
149,202
44,730
78,441
141,918
42,575
* Net Temporary difference presented in parenthesis represents net taxable difference.
8.3.6.The carrying amount and tax base of fixed assets of the Bank having taxable / deductible
differences are presented as under:
PARTICULARS
Asset Class :
- vehicle
- building
- software
- leasehold
- office equipment
Total
NRs. 000
- other assets
CARRYING AMOUNT
116,003
TAX BASE
108,100
NRs. 000
TAXABLE DIFFERENCE
7,903
206,048
201,870
4,178
39,202
34,113
5,089
26,305
193,799
581,358
23,084
181,402
934
549,504
3,221
12,398
(934)
31,854
5,561
78,441
(188)
141,730
(47)
(47)
42,575
148
Nabil Bank Limited
8.3.7.The Bank and its subsidiary have deposited advance tax in line with Income Tax Act 2002. The
amount is disclosed in the face of balance sheet by netting with income tax liabilities. The advance tax
and tax liabilities of the Bank and its subsidiary have not been offset while presenting it in
consolidated financial statements.
PARTICULARS
NABIL BANK
SUBSIDIARY CO.
51,106
(4,527)
(880,013)
(6,330)
66,873
(3,599)
Opening balance
add : current tax
less : advance tax paid
less : previous year's tax paid
Closing balance : liability / (asset)
DETAILS OF ADVANCE TAX PAYMENTS
- 1st instalment
- 2nd instalment
- 3rd instalment
Total
- tax deducted at source by withholder
946,885
(51,106)
NRs. 000
GROUP
7,258
-
NRs. 000
NABIL BANK
SUBSIDIARY CO.
350,640
350,640
262,980
262,980
262,980
3,413
880,013
6,330
6,330
GROUP
262,980
9,742
886,342
8.3.8.In addition to current tax and prior period tax, the Bank has also borne dividend tax of
NRs.1,670 thousands in respect of cash and bonus dividend received from the domestic company.
Tax on dividend being final withholding tax, the dividend earnings are accounted on net basis.
9. CONTINGENT INCOME TAX LIABILITY
Large Tax Payers Office (LTPO) conducts reassessment of each years tax filing done by the Bank
within four years after end of each year. Following reassessment, LTPO can issue reassessment order
for revision in tax liability of the bank. However, the bank may choose to contest against such
decisions. Such process would follow, in order, applying for administrative review to Director General
at Inland Revenue Department (IRD) level; case filing at Revenue Tribunal; and case filing at Supreme
Court.
Till the balance sheet date, the banks corporate tax liability up to income year 2005-06 has been
cleared by the tax authority. Further, reassessment from LTPO has been completed for up to income
year 2008-09. For the reassessment of last three years however, the bank has contested against the
upward revision in tax liability as issued by LTPO in their reassessment order. Total contested amount
for NRs.14,987 thousands in respect of these three income years has been recognized as Continent
Liability and presented in Schedule 17 of Financial Statements.
10. NON CONTROLLING INTEREST (NCI)
As at balance sheet date, the Banks effective interest in Nabil Invest remained at 74.29% while that
of NCI remained at 25.71%.
149
10.1. Share of non-controlling interest (NCI) in the profit of subsidiary

For current financial year, the gross earnings of Nabil Invest is NRs.31,046 thousand and attributable
bonus and corporate tax is NRs.9,878 thousand. Based on NCIs effective interest of 25.71% held in
the subsidiary as at balance sheet date the net profit attributable to NCI is shared as under:
PARTICULARS
NRs. 000
CURRENT YEAR
Subsidiary's operating profit
PREVIOUS YEAR
31,046
- less : provision for staff bonus

- less : provision for income tax
15,794
(2,822)
(1,436)
21,167
10,769
(7,056)
Subsidiary's net profit
NCI's share @ 25.71%
(3,589)
5,443
2,769
10.2. Non-controlling interest (NCI) in consolidated balance sheet

With share in profit and the funds invested, the equity of NCI as at balance sheet date stands
NRs.33,178 thousands recording a growth of 9.49% over that of previous year as stated hereunder:
PARTICULARS
Carrying amount
- paid up equity capital
Total
- reserves and surplus
increment in carrying amount (%)
SUBSIDIARY CO.
NCI'S SHARE
NRs. 000
CURRENT YEAR
PREVIOUS YEAR
CURRENT YEAR
PREVIOUS YEAR
105,000
105,000
27,000
27,000
129,165
117,975
33,214
30,336
24,165
9.49%
11. Risk Management and Basel II

Disclosure
11.1.Basel II disclosure has always been a
guiding principle at Nabil Bank in addressing
the risks and adopting measures to minimize
their impact. Increasing complexities in risks
and fast changing world pose a threat to
sustainability. The Bank, in order to address
the varieties of risk that keep coming out of
business operations, has identified different
risks and adopted different measures to
minimize them. Risk Management is a
daunting task that has a grave impact on our
operations. Failure in identifying the risk and
its correction/management in time poses a
serious threat on sustainability.
12,975
6,214
9.49%
3,336
11.2. The major risk the Bank faces in the

business is Credit where about three fourth of
its incomes come from. Equally this poses a
major threat when any account turns to NPA
as margin against the same is very thin.
Therefore Banks Credit Risk Management has
always been kept in high priority. Any risk
generation and their impact on long term
perspective is well deliberated in the proposal,
risks and returns are properly weighed and
mitigating measures are properly spelled. The
bank has clear demarcation on business
generation and risk management where any
proposal for approval is passed through proper
fitness test, long term soundness test with
knowledge on business, against which credit is
to be sanctioned. Looking at the criticality of
150
Nabil Bank Limited
the businesses and their importance, the Bank has re-aligned its
structure and processes in a way whereby such risks can be
minimized and assessed in a quantifiable manner. Accordingly the
Bank has set up a separate credit risk division, which is headed
by the Chief Risk Officer, one of the most senior level positions in
the Bank. The division oversees global, macro, micro and unit
level risk that arises out of daily business operation and equally
due to changes in the market conditions with that particular
business of the unit. The Banks credit functions are broadly
categorised as Large and Corporate (including infrastructure
financing), SME and Retail credit. Credit Risk Division is manned
with separate set of skills for analysing risks in these different
credit functions, all of them report to the Chief Risk Officer. Daily
report from central level and periodic review of facilities too gives
input for timely action on any relationship which warrant for
correction.
11.3.The Bank makes decision to finance by assessing the
business. It also ensures the inherent credit risks that are
associated with the business are addressed appropriately through
coverage of better safety margin, additional collateral back up and
lower exposure to keep the business at low leverage. Periodic
review of all accounts under credit exposure is one of the prudent
practices that the Bank follows in order to take necessary steps to
avert/minimize the risk. Quarterly inspection of the business and
suggestion for timely corrective actions help protecting the
business from the viewpoint of borrower as well. Besides, where
any business faces difficulties and poses a risk to the Bank in
terms of fall in the value of assets, in those circumstances it
makes adequate provision. Any business decision for credit
exposure is taken only if it is vetted and approved by the credit
risk division. Business generation unit singly cannot take a credit
exposure decision except on instrument purchase where security
is instrument itself and the loan gets settled once instrument is
realized.
11.4.Bank has the policies and operation manuals that stipulate
proper governance and procedure for all credit relationship.
Similarly monitoring of business and annual review of entire
relationship including review of the facilities gives the bank an
idea whether or not to take forward the relationship. Besides this,
periodic review of same by the Internal Audit Department also
assists in identifying the status of exposure/relationship in line
with guiding documents of the Bank. Any weaknesses on the part
of the business of borrower and the relationship strength are
independently assessed by Internal Audit and the advice is taken
positively for necessary changes. Processes are well defined where
checking, control and independency of the credit risk function is

fully complied with.
11.5.All such actions and processes are properly recorded,
reported and discussed. These reports on need basis and on a
defined frequency are put to the oversight of senior management
and the Board. Senior Management or the Board on need basis
issue instruction as apt wherever necessary.
11.6.One of the growing risks among other these days is
Operation Risk that arises out of inefficient processes and people
inside and outside the Bank. Equally system is another area of
concern where it has witnessed growing threat from outside. Bank
has separate division to oversee operation risk including
compliance of KYC and AML. The division is headed by senior
level staff with adequate access to the daily report, operational
processes and right to recommend the changes in the system and
procedures. The head of operation risk directly reports to the Chief
Risk Officer. Bank has SIMs (Standing Instruction Manuals) for all
businesses of the bank. All the activities are undertaken in line
with the set criteria in the Standing Instruction Manual, policies
and guidelines including Directives and circulars from central
bank (the regulatory authority). Similarly daily functions at
operations are independently reported through separate reporting
line other than business generation and credit risk where
independence of checking and control is complied with.
11.7.Processes are reviewed periodically so that their perfection
can be weighed and any shortcoming can be addressed. Most of
the functions like line approval, bill payment, loan disbursement
are centralized which controls activities that can cause mistake
due to inadequate knowledge on the part of staff at
remote/branch. Similarly awareness to the public is made on our
service and products periodically. Staff is well educated and is put
to the operation for action once one gets well acquainted with the
banks functioning. Any staff for the first time in any job is put
under the supervision of an experienced staff and is allowed to
work independently after attaining required skills. Bank has
Whistle Blowing policy to report to senior or management directly
on anyones suspicious conduct outside and inside the bank.
11.8.In operations, the Bank has put in place a maker and
checker concept in which a transaction has to compulsorily go
through two individuals from a control standpoint with proper MIS
to capture deviations, if any. The activities of a personnel and
division / branch can be viewed and monitored centrally through
an integrated system, which helps in minimizing the risk of
151
misconduct, if any. The Bank has an on-line replication

Disaster Recovery Site (DRS) which captures the record of
each transaction that takes place at the Production Server.
Both the sites (Production Server and Disaster Recovery
Back up site) are housed in well-conditioned and high shock
resistant buildings and are at different seismic zone, far from
each other. DRS is outsourced to a professionally managed
company having expertise in the sector. Drill is being done
periodically and is being tested occasionally to assess the
functioning of DRS.
11.9.Each desktop is implemented with Active Directory
System (ADS) which does not allow user to take away the data
in devices like data traveller (pen drive) or bring in data for
processing or any other purposes posing threat to the
repository. Similarly individual data in desk are also stored and
backed up in periodic interval at data centre so that any loss
of data in desk top can be retrieved from data centre.
11.10.The Bank has a separate Legal division which is
adequately manned by qualified and experienced staff. All
legal agreements, deeds and documents including claims and
charges are thoroughly studied prior to making any decision
involving such documents. Compliance with existing rules and
regulations and business practices globally and locally are
taken into account before arriving at the decision. The cases
where the Bank needs expert's opinion on any of the issues the
same is done through the expert in the respective field.
The Bank in line with Basel provisions calculates risk exposure
and allocates sufficient capital/cushion for perceived
operational risks.
11.11.Market Risks are addressed through the Asset and
Liability position and management of same on daily basis. The
limits for open position are controlled level wise which ensures
in-depth knowledge of the market and movement before taking

decision (by choice). The monthly reports on such aspects are
well discussed and dealt in ALCO (Asset Liability Management
Committee). The committee ensures functioning of the jobs in
line with the policies and procedures and
suggests/recommends for necessary steps collectively to
address the risk on interest rate movement, exchange rate
movement and equity price changes. Most of the market
operations (investments) are done from the front office which
reports to the Chief Financial Officer and exposure accounting
including booking of income/expense is done from back office
which reports to the Chief Operating Officer. The Bank
assesses the open position on daily basis and calculates risk
exposure for allocation of required capital in line with Basel
provisions.
11.12.Further the Bank takes on the capital adequacy norms
pursuant to the central bank's statutory provision for Basel
requirement under Basel - II. The determinants to this end are
the past experiences with the products, Banks own risk
assessment culture and contingency management for
unpredictable situations. To this effect going by the best
international practices the Bank provides for adequate capital
to withstand the inherent risks against the assets the Bank
finances. Wherever possible the Bank obtains additional
collateral, set aside higher safety margin and operates under
prudent banking norms. The Bank equally through its annual
plans projects the capital adequacy and risk exposure growth
which is reviewed monthly. The Bank also reviews its total risk
weighted exposure and Capital Adequacy Ratio (CAR) on
monthly basis. If growth exposure is higher than the formation
of capital in the Bank, the Bank pulls rein on business
generation so that CAR can be maintained. However the Bank
has not experienced such instances in its history of 29 years.
The adequacy of capital is seriously taken into consideration at
regular meetings like ALCO, X-Com and board meetings.
152
Nabil Bank Limited
11.13.
Risk Management and Reporting Line are presented as follows:
Chief Risk Officer
Head-Operation Risk,
AML & Compliance
Head Infrastructure,
Corporate, SME, PLU Credit
11.14.Internal audit of the Bank is independent from the

management and directly reports to Audit Committee, a board
level committee. Internal Audit too has adopted risk based
auditing approach and keeps recommending the suggestions for
the area needing higher attention. Further the Banks Strategic
Planning Unit assesses macroeconomic indicators both on a
national and international level and observes the market trend
and suggests for necessary action to minimize the risks involved.
11.15.The Bank has developed a risk assessment culture and
has in place the required reports for assessing concentration of
risks. Periodical performance reporting based on Balanced
Scorecard, in line with capital strength, to the Board is also in
place. These reports are periodically put up to the board. Board
also reviews the same and issues instructions, as appropriate, to
the Banks management.
11.16.Pursuant to the guidance of Capital Adequacy Framework
2007 (updated July 2008) issued under NRB Unified Directives,
the Bank recognises following credit risk mitigating factors in
order to manage the Banks credit risks:
Deposits with Banks,
Deposits with other banks and financial institutions,
Securities / instruments issued by the Government and NRB,
Guarantee of government of Nepal,
Security / guarantee of other sovereigns,
Guarantee of domestic banks,
Security / guarantee of specified multilateral development
banks, and
Security / guarantee of foreign banks.
ALCO (including CEO)
Head Legal
(Legal Risks)
(Market Risks exchange, interest,

equity price, liquidity
and other risks)
Legal, Share &

Company Secretariat
Credit risk mitigating factors are recognized only when

following eligibility criteria is fulfilled:
That the Bank holds clear rights over the collateral to
liquidate in the event of default,
That the credit quality of the borrower (obligor) and the
collateral does not have material positive correlation,
That the maturity of the collateral is longer than the maturity
of the credit exposure being undertaken,
That the currency mismatches arising from possible
differences in denomination of currencies of collateral and
credit exposure is minimized to the extent possible. In case of
existence of mismatches, 10% haircut is assigned on the
gross value of CRM,
That the Bank employs policies and procedures to manage
legal, operational, liquidity and market risks that may be
exposed from the credit risk mitigating factors,
That the guarantees of domestic and foreign institutions are
unconditional whatsoever.
153
During the current financial year, the Bank has availed the benefits of credit risk mitigation as under:
NRs. 000
PARTICULARS
Benefits availed of following credit risk mitigants :

- deposit with own bank
1,602,890
- securities and bank guarantees issued by foreign banks
1,965,074
- deposit with other banks and financial institutions
Total
CURRENT YEAR
- securities issued by Nepal Government and Nepal Rastra Bank
842,015
4,409,979
While availing the benefits of credit risk mitigation, supervisory haircuts have been assigned on case
to case basis by:
20%, in case of CRM that is deposits with other banks and financial institutions,
20% and 50%, in case of CRM that is security / guarantee of foreign banks
with ECA rating 0 - 1 and 2.
11.17. Capital Structure and Capital Adequacy:
As at balance sheet date, the Bank's capital adequacy status is as under:
11.17.1. Tier 1 capital and a breakdown of its components:
PARTICULARS
Eligible items for Tier - I Capital Fund :

a. Paid up equity share capital
b. Irredeemable Non-cumulative preference shares

c. Share Premium
d. Proposed Bonus Shares

e. General Reserves
f. Retained Earnings
g. Current year Profit/(loss)
h. Capital Redemption Reserves

i. Capital Adjustment Reserves
j. Dividend Equalization Reserves

k. Deferred Tax Reserve
l. Other Free Reserves
m. Less: Goodwill
n. Less: Fictitious Assets not written off
o. Less: Investment in equity of licensed Financial Institutions
p. Less: Investment in equity of institutions with financial interests

Core Capital Fund (Tier - I)
NRs. 000
CURRENT YEAR
2,436,841
74
609,210
2,620,500
704,970
44,575
2,578
(78,000)
6,340,749
154
Nabil Bank Limited
11.17.2. Tier 2 capital and a breakdown of its components:

PARTICULARS
NRs. 000
CURRENT YEAR
Eligible items for Tier - II Capital Fund :
a. Cumulative and / or Redeemable Preference Share
b. Subordinated Term Debt
300,000
d. General loan loss provision *
453,370
f. Investments Adjustment Reserves
106,222
c. Hybrid Capital Instruments
e. Exchange Equalization Reserves
150,300
g. Assets Revaluation Reserves
h. Other Reserves
13,874
Supplementary Capital Fund (Tier - II)
1,023,766
* Maximum available limit is NRs.794,221 thousands being 1.25% of total risk weighted exposures.
11.17.3. Details of Subordinated Term Debt:

The Bank has issued Nabil Bank Bond 2075 (2018 AD) for NRs.300 million in July/August 2008.
Main features of Nabil Bank Bond 2075 are as follows:

Maturity period: 10 Years.

Interest rate: 8.5% per annum.
Interest Payment frequency: Half Yearly.
Claim in case of liquidation: After depositors.
Capital Redemption Reserve shall be created from year 2013/14 (i.e. from 6th year).
11.17.4. Deductions from Capital:

The Bank has deducted NRs.78,000 thousands in respect of its equity investment in subsidiary,
while calculating its core capital.
11.17.5.Risk weighted exposures for Credit Risk, Market Risk and Operational Risk:
NRs. 000
PARTICULARS
Risk Weighted Exposures :

- for Credit Risk
- for Operational Risk

- for Market Risk
Adjustments under Pillar - II
- add: . % of the total RWE due to non compliance to Disclosure Requirement

- add: % of the total Deposit due to insufficient Liquid Assets
- add: 2% of the total RWE upon Supervisory Review
Total Risk Weighted Exposures (after bank's adjustments of Pillar II)
CURRENT YEAR
57,191,503
5,011,134
89,170
-
1,245,836
63,537,644
155
11.17.6. Risk weighted exposures under each 11 categories of Credit Risk:

PARTICULARS
Risk exposure categories under Credit Risk :

a. Claims on Government & Central Bank
b. Claims on Other Financial Entities
c. Claims on Banks
d. Claims on Domestic Corporates and Securities Firms

e. Claims on Regulatory Retail Portfolio
f. Claims Secured by Residential Properties
g. Claims secured by Commercial real estate
NRs. 000
CURRENT YEAR
2,982,328
32,523,380
1,430,844
2,427,730
864,879
h. Past due claims
2,088,003
j. Other Assets
4,289,407
i. High Risk claims

k. Off Balance Items
Total risk weighted Exposure under Credit Risk
11.17.7. Capital Adequacy and Risk Weighted Exposure

PARTICULARS
Total Capital Fund
- Core Capital Fund (Tier - I)
- Supplementary Capital Fund (Tier - II)
Total Risk Weighted Exposures (RWE)
Tier - I Capital Fund to Total RWE (%)

Total Capital Fund to Total RWE (%)
3,796,559
6,788,373
57,191,503
NRs. 000
CURRENT YEAR
7,364,515
6,340,749
1,023,766
63,537,644
9.98
11.59
Others
Fixed Deposits
16
-
Others (Standing Liquidity Facility)
Sundry Creditors
Repo
26
25
24
Cumulative Net Assets
Net Assets
Total Liabilities
Others
Call Deposit
Payable of facilities under mentioned in S. No. 11
Letter of Credit / Guarantee (Net)
23
22
Unutilised Credit Facilities
Payable to Institutions under Commitment (Customer Acceptance)
Others
Provisions
Accrued Interest Payable
Bills Payable
663,933
663,933
4,029,130
220
761,957
346,666
720,191
218,911
59,432
103,373
162,806
Refinance
Inter-Bank / Financial Institutions
Call / Short Notice
Borrowings:
394,765
339,436
1,084,179
4,693,063
7,010
1,157,191
22
801,912
1,634,306
(47,590)
1,140,212
Bonds / Debentures
21
20
19
18
17
Savings Deposit
Current Deposits (Including Margin Deposits and Matured TDs)
15
14
Liabilities :
Total Assets
Receivable under facility mentioned in S. No. 20, 21 and 22
13
12
Receivable under Commitment
Reverse Repo
Accrued Interest Receivables (including AIR from staff loans)
Loans and Advances (including staff loans)
Inter-Bank / Financial Lending / Investments in Local Banks
NRB Bonds
11
10
Call Money
Government Securities
Investments in Foreign Banks
Balances held with Banks and Financial Institutions
Cash Balances
0 - 7 DAYS
428,969
(234,964)
6,547,993
1,142,935
1,085,030
488,280
383,875
293,892
155,060
448,952
863,498
509,155
1,626,269
6,313,029
23,804
1,761,466
124,281
2,023,569
335,825
2,044,083
8 - 30 DAYS
6,184,302
5,755,332
8,027,381
4,626,601
1,050,871
316,425
30,308
65
155,060
185,432
1,848,052
13,782,713
43,778
5,394,507
98,028
4,730,343
95,950
1,996,328
1,423,778
31 - 90 DAYS
12,283,384
6,099,082
4,666,710
2,095,090
760,794
49,172
6,434
103,373
109,807
1,651,848
10,765,792
3,135
3,213,939
73,658
4,252,443
1,337,334
1,885,284
91 - 180 DAYS
13,973,175
1,689,791
3,349,736
720,132
674,585
4,729
4,729
1,950,290
5,039,527
1,545,751
53,253
2,841,446
407,178
191,900
181 - 270 DAYS
17,291,242
3,318,068
3,664,002
531,861
541,782
4,661
4,661
2,585,698
6,982,070
1,105,750
50,870
2,841,446
1,562,973
1,421,031
271 - 365 DAYS
7,534,159
(9,757,084)
55,516,992
19,130,894
6,186,359
125
178,780
178,780
300,000
1,491,879
7,603,258
20,625,698
45,759,909
35,060
6,293,849
281,749
31,029,711
2,610,190
719,405
4,789,946
1 YEAR ABOVE
4,742,356
7,534,159
85,801,945
220
21,035,785
15,591,740
4,236,627
968,382
578,237
65
516,865
1,095,167
300,000
10,786,028
8,451,849
23,336,146
93,336,103
112,787
20,472,454
681,860
48,520,869
431,775
7,914,002
1,634,306
7,685,481
1,140,212
TOTAL
NRs. 000
Nabil Bank Limited
Assets :
S.NO. PERIOD:
12. Statement of Liquidity Risk Analysis as at 15 July 2013
156
157
13. Related Parties Disclosures

13.1.The Bank has entered into financial transactions with the
following entities where the directors have financial interest.
13.1.1.United Insurance Company (Nepal) Ltd. - Mr. Ashish
Sharma and Mr. Nirvana Chaudhary have held positions of
chairman and director respectively in the Company during the
current financial year. As at 15th July 2013, Nabil Bank owed
NRs.1,338 thousands to United Insurance in current account
deposit.
In addition, Bank purchased various insurance policies to secure
risks on assets. The coverage of risks inter alia encompassed
bankers' blanket insurance on cash in vault, transit and ATM;
fire insurance on Office Equipment, Wooden Furniture, Building
& Leasehold Assets; machinery breakdown insurance on Office
Equipment;burglary insurance on Office Equipment, Wooden
Furniture; and fire and burglary insurance on bullions. Total risk
exposures secured was NRs.1,509,402 thousands and total
insurance premium paid for these insurances amounted
NRs.3,669 thousands. The Bank has however discontinued
purchasing policies from the Company and has not renewed
since expiry.
Furthermore, Bank carried agency services on behalf of
Company in line with the agency agreement to solicit Company's
policies to the Bank's customer. During the current financial
year, Bank has earned NRs.827 thousand through the agency
service from the Company.
No loans were granted to the Company. All transactions carried
with the Company were on arms length.
13.1.2.CG Finco Pvt. Ltd. - Mr. Nirvana Chaudhari is a
Chairman of the Company and it has depository relationship
with the Bank. As at balance sheet date, the Bank owed
NRs.2,644 thousands and has paid interest NRs.106
thousands during the current financial year.
CG Finco is also shareholder of Nabil Invest, the subsidiary of
Nabil Bank. During the current financial year, the Company
received NRs.2,565 thousands net dividend declared @ 10%
from the profit of last financial year.
No loans were granted to the Company. All transactions with the

Company were on arms length.
13.1.3.Employees Provident Fund - Mr. Krishna Prasad
Acharya, director of the Bank, has held position of Chief
Administrator (CEO) until the balance sheet date. The
Employees Provident Fund, one of the largest provident fund
mobiliser in Nepal, has depository relationship with Nabil Bank.
As at balance sheet date, total deposit liability owed to
Employees Provident Fund amounted NRs.53,119 thousands
and total interest paid totaled to NRs.3,300 thousands.
No loans were granted to the EPF. All transactions with the EPF
were on arms length.
13.2.All related party transactions between the Bank and its
subsidiary are disclosed under note 13.5 Transactions with
Nabil Invest. Such transactions are eliminated in Consolidated
Financial Statements.
13.3. Key management personnel
Key Management Personnel of the Bank include members of the
Board, Chief Executive Officer and all managerial level
executives. Following is a list of Board of Directors and CEO
bearing office as at 15th July 2013.
Mr. Krishna BahadurManandhar
Mr. Shambhu Prasad Poudyal
Mr. Dayaram Gopal Agrawal
Mr. Krishna Prasad Acharya
Mr. Nirvana Kumar Chaudhary

Mr. Ashish Sharma
Mr. Mohiuddin Ahmed
Mr. Anil Gyawali
Chairman
Director
Director
Director
Director
Director
Director
158
Nabil Bank Limited
13.4. Compensation to key management personnel of the Bank

13.4.1. Compensation to Board of Directors
All members of the Board are non-executive directors and no executive compensation is paid to the
directors. Specific non-executive allowances paid to directors are as under:
NATURE OF TRANSACTION
NRs. 000
CURRENT YEAR
PREVIOUS YEAR
922
1,076
2,456
3,244
Meeting Fees Paid
Allowance and other expenses relating to Board Meetings
1,534
Total Compensation Paid
2,168
Allowances paid to directors include Rs.15 thousand per month paid for covering newspaper and
communication expenses. Other expenses include reimbursement of travelling, accommodation and
daily allowances paid to directors who do not reside in Nepal and have to come to Nepal for
attending board meetings.
13.4.2. Compensation to Management Level Employees
During the current financial year NRs.215,421 thousands was incurred towards compensation to
Management Team. This includes NRs.1,886 thousands for additional leave expense accrued
during the year.
MANAGERIAL LEVEL
Asst. General Manager and above

below Asst. General Manager
Total
NRs. 000
HEAD
COUNT
SHORT TERM
BENEFITS
POST RETIREMENT
BENEFITS
TOTAL
BENEFITS
15,985
935
16,920
43
110,193
52
45,725
171,903
Other benefits (perquisites) are provided to CEO and managerial

level employees as per the Bank's policy. Above, head count and
total benefits paid is including in respect of those management
personnel who retired/resigned during the year. As of balance
sheet date, total 50 management personnel (including CEO) are
in the services of the Bank.
13.5. Transactions with Nabil Invest
13.5.1.The Bank has entered into a Service Level Agreement
(SLA) with Nabil Invest for the provision of management services.
Provisions laid in SLA are in line with arms length principle.
13.5.2.In line with the SLA, the Bank received NRs.500
thousands in respect of providing various administrative services
and NRs.3,836 thousands in respect of providing technical
management services to Nabil Invest.
6,974
35,610
43,518
52,699
145,803
215,421
13.5.3.The Bank paid NRs.3,472 thousands to Nabil Invest as

interest on deposit accounts maintained by Nabil Invest with the
Bank. Such deposit balances of Nabil Invest as of 15th July
2013 is NRs.104,352 thousands.
13.5.4.The Bank also paid management fee for operating bullion
business in line with SLA. The SLA prescribed fees @ 30% on
the net income from bullion business after deduction of all
related charges. During the year, the Bank paid NRs.9,982
thousands to Nabil Invest for the operation of bullion business.
13.5.5.The Bank received net dividend NRs.7,410, thousands
from Nabil Invest distributed at the rate of 10% from the profit of
last financial year (2011-12).
13.5.6.All receipt and payment transactions entered into by the
Bank with Nabil Invest were made net of TDS. The TDS has
been duly deposited at the Large Taxpayer's Office.
159
14. Ratios and other information

14.1. Weighted average interest rate spread
During the current financial year, in line with market rates, weighted average yield on loans and advances has decreased.
Similarly, weighted average cost on deposits and borrowings has decreased due to similar reasons. However, better
reduction under cost of deposit has bolstered improve spread.
PARTICULARS
Weighted average interest :
- yield on loans and investments
- cost on deposit and borrowings
CURRENT YEAR
PREVIOUS YEAR
9.14%
10.69%
5.48%
4.95%
3.67%
Net Interest Spread
5.74%
Annual average of loans, investments, deposits and bonds/borrowings have been taken while computing the above data.
14.2. Earnings per Share
The Banks and the Groups earnings per share has been disclosed in line with Nepal Accounting Standard (NAS) 26 on
Earning per Share in Schedule 31 "Principal Indicators". As on balance sheet date, the Banks and the Groups earnings per
share stood at NRs.95.14 and NRs.95.48 respectively. Compared to last year, these figures are higher by NRs.11.57 and
NRs.11.71 respectively.
PARTICULARS
NABIL BANK
GROUP
Net Profit for the year (in NRs. 000)
2,218,762
2,226,686
Weighted average number of outstanding shares
23,320,064
Earnings per Share in NRs.
95.14
Earnings per Share in NRs. (previous year)
23,320,064
95.48
83.23
Annual growth rate in Earnings per Share
83.43
14.31%
14.45%
The Bank and the Group has not issued any form of capital raising instruments with embedded options of conversion into
equity shares. Consequently, the Banks and the Groups basic and diluted earnings per share both stand at NRs.95.14 and
NRs.95.48 respectively.
14.3. Non-performing assets
14.3.1. Amount of non-performing assets (both gross and net)

The Bank's non-performing assets as at balance sheet date amounted NRs.1,015,177 thousands, which is 2.13% of total
loan. The bank has set aside possible loss provisioning of NRs.808,370 thousands in respect of these loan assets. The
provision (related to non performing assets) coverage for the non performing assets is 80%. Similarly total provision coverage
(NRs.1,275,695 thousands) over the non performing assets is 126%.
PARTICULARS
Loan Classification per NRB's definition

- pass loan
- non performing loans
- restructured / rescheduled
CURRENT
YEAR
PREVIOUS YEAR
CHANGES
46,630,353
41,867,709
4,762,645
1,015,177
1,000,059
17,204
- substandard
204,962
162,441
- loss
705,792
783,630
- doubtful
Gross loans and advances
104,422
47,645,530
36,784
42,867,768
15,118
NRs. 000
%
11.4
1.5
(17,204)
(100)
67,638
183.9
4,777,762
11.1
42,521
(77,837)
26.2
(9.9)
160
Nabil Bank Limited
14.3.2. NPA Ratios

PARTICULARS
Performing Loan (pass loan)
Non Performing Loans (NPL) :
GROSS NPL
LOSS PROVISION
NET NPL
46,630,353
467,325
46,163,028
1,015,177
- restructured/ rescheduled
- substandard
- doubtful
Total
- loss
NRs. 000
808,370
206,807
204,962
51,289
153,673
705,792
704,760
1,032
104,422
47,645,530
52,320
1,275,695
52,102
46,369,835
NPL Ratios :
Gross NPL to Gross loans and advances
2.13%
Net NPL to Net loans and advances
0.45%
This year NPA ratio has improved to 2.13% when compared to 2.33% in the previous year.
14.4. Write off loans and interest suspense
Written off loan is presented in Schedule 28(A) of the financial statements.
Additional information on interest suspense related to such loan is presented as under:
NRs. 000
PARTICULARS
AMOUNT
Loan Written Off
27,843
Interest Suspense related to written off loan
14,748
14.5. Summary of book write off loan and recovery

PARTICULARS
- loan written off till previous year

- loan written off in current year
Total loan written off (A)
NRs. 000
PRINCIPAL
INTEREST
TOTAL
678,919
266,472
945,391
706,762
281,220
987,983
27,843
14,748
42,592
- recovered till previous year
(448,112)
(75,699)
(523,811)
Total recovery from written off loan (B)
(456,434)
(77,819)
(534,253)
234,318
164,604
398,923
- recovered in current year
Net not recovered portion (A-B)

- book write off
- actual write off *
Recovery ratio (on total write-off amount)
(8,322)
250,328
16,010
64.58%
*The bank has relinquished its recovery rights considering remote possibility of loan recovery.
(2,120)
203,401
38,797
27.67%
(10,442)
453,730
54,807
54.08%
161
14.6. Movement in loan loss provision and interest suspense

With increase in business volumes figures of loan loss provisions and interest suspense has also
increased. The rise in loan loss provision of 1% is mainly due to incremental gross loan volume.
Gross loan volume has increased by 11% compared to that of previous year. Per regulatory
provisions the bank is required to maintain loss provisioning in respect of performing loans at 1% of
loan amount. Similarly, 3% rise in interest suspense is against 7% fall in gross interest income.
PARTICULARS
CURRENT
Loan Loss Provision

Interest Suspense
YEAR
PREVIOUS YEAR
CHANGES
1,275,695
1,262,085
13,610
382,296
371,152
NRs. 000
%
1.08
11,144
3.00
15.Disclosure of components of cash and cash equivalents in Cash Flow Statement:

15.1. From operating activities:
15.1.1. Interest Income
PARTICULARS
Interest Income in Income Statement
Interest Income from Long term Investment
Income Receivable on Short Term Investments (Current Year)
Income Receivable on Short Term Investment (Previous Year)

Interest Receivable on Staff Housing Loan (Current Year)
Interest Receivable on Staff Housing Loan (Previous Year)

Unearned Interest Income - Vehicle Loan (Current Year)
PREVIOUS YEAR
5,702,122,918
6,126,854,828
(92,594,687)
(101,475,564)
(173,755,044)
(136,656,764)
909,046
1,992,921
(239,364,585)
101,475,564
136,656,764
Unearned Interest Income - Vehicle Loan (Previous Year)
(1,992,921)
Unearned Interest Income - Housing Loan (Previous Year)
(2,909,903)
Unearned Interest Income - Housing Loan (Current Year)

Unearned Interest Income - Bills (Current Year)
Unearned Interest Income - Bills (Previous Year)

Cash Inflow
NRs.
CURRENT YEAR
2,263,079
-
(40,368,893)
5,392,441,338
15.1.2. Commission and Discount Income
(215,912,363)
56,982,150
112,624,270
(4,069,060)
2,909,903
(672,550)
40,368,893
(17,744,581)
5,865,202,083
NRs.
PARTICULARS
CURRENT YEAR
PREVIOUS YEAR
Commission and Discount Income in Income Statement
393,050,514
366,387,194
(109,805,125)
(54,643,419)
Unearned Commission - Guarantee (Current Year)
Unearned Commission - Guarantee (Previous Year)

Cash Inflow
67,000,243
350,245,632
109,805,125
421,548,900
162
Nabil Bank Limited
15.1.3. Income from Foreign Exchange Transaction
NRs.
PARTICULARS
CURRENT YEAR
PREVIOUS YEAR
Exchange Income in Income Statement
489,051,079
447,070,485
Unearned Commission - Forward (Current Year)
Unearned Commission - Forward (Previous Year)

Cash Inflow
23,663,585
512,714,664
15.1.4. Interest Expense

PARTICULARS
Interest Expense in Income Statement
Interest Payable on Deposit (Current Year)
Interest Payable on Deposit (Previous Year)
Interest Payable on Borrowing (Current Year)
Interest Payable on Borrowing (Previous Year)

Cash Outflow
447,070,485
NRs.
CURRENT YEAR
PREVIOUS YEAR
(2,186,184,871)
(3,155,490,469)
(38,399)
(1,108,860)
64,854
3,712,957
(3,856,189)
(2,186,301,648)
15.1.5. Staff Expense

PARTICULARS
38,399
3,856,189
(4,388,033)
(3,157,092,774)
NRs.
CURRENT YEAR
PREVIOUS YEAR
Staff Expenses as per Income Statement
(646,759,675)
(500,712,844)
Total Staff Expenses
(963,015,196)
(742,351,345)
Grauity Fund Balance (Previous Year)
(78,441,012)
(87,626,265)
Leave Provision (Previous Year)
(64,892,721)
(59,337,671)
(69,574)
Bonus Expenses (regrouped from other liabilities)

Grauity Fund Balance (Current Year)
Leave Provision (Current Year)
Other Staff Expenses Payable (Current Year)
Other Staff Expenses Payable (Previous Year)

Staff Bonus Payable (Current Year)
Staff Bonus Payable (Previous Year)

Cash Outflow
(316,255,521)
76,931,147
81,653,026
316,255,521
(241,638,501)
(873,217,310)
(241,638,501)
78,441,012
64,892,721
69,574
241,638,501
(190,943,019)
(695,216,492)
163
15.1.6. Office Operating Expense

PARTICULARS
Office Operating Expenses as per Income Statement
Depreciation / Amortisation on Fixed Assets / Intangibles

Accrued Expense Payable (Current Year)
Accrued Expense Payable (Previous Year)

Cash Outflow
PREVIOUS YEAR
(468,781,187)
(430,909,132)
6,732,393
4,745,609
123,903,510
(4,745,609)
Income Tax Expense in Income Statement (Current Year)

Prior Period Tax
Current Year Tax Liability
Previous Year Tax Liability

Cash Outflow
RECONCILIATION OF INCOME TAX PAID FROM TAX EXHIBIT
Adv. Tax Deposited at the request of LTPO
130,515,883
(8,397,600)
(342,890,893)
(304,045,240)
CURRENT YEAR
PREVIOUS YEAR
(946,885,251)
(728,302,031)
66,872,707
51,106,490
15.1.7. Income Tax Payments

PARTICULARS
NRs.
CURRENT YEAR
(5,791,658)
(51,106,490)
NRs.
(44,104,071)
(936,910,692)
(721,299,612)
CURRENT YEAR
PREVIOUS YEAR
20,000,000
NRs.
1st Instalment of Corporate Tax Paid for FY 2069-70
330,640,000
262,000,000
2nd Instalment of Corporate Tax Paid for FY 2069-70
262,980,000
176,500,000
3rd Instalment of Corporate Tax paid for FY 2069-70
232,980,000
196,000,000
5,791,658

Payment of Previous Year's Tax
Payment of Prior's Year Tax
TDS Deposition (Insurance Commision,

Technical Service Fee, Dividend)
Cash Outflow
30,000,000
51,106,490
3,412,544
936,910,692
20,000,000
20,000,000
44,104,071
2,695,541
721,299,612
164
Nabil Bank Limited
15.1.8. Other Expense
NRs.
PARTICULARS
CURRENT YEAR
Income/(Expense) from Extra-ordinary Activities

as per Income Statement
PREVIOUS YEAR
(17,454,214)
Recovery of Loan Write Off

Bad Loan Write Off
(3,036,749)
(10,441,593)
(16,770,964)
(52,532)
(16,801,222)
27,843,275
Cash Outflow
3,006,491
15.1.9. (Increase)/Decrease in Other Short Term Investment

PARTICULARS
Total Investment in Balance Sheet
Nepal Government Other Securities

Foreign Bonds
Organized Institutions' Shares
Organized Institutions' Bonds and Debentures

Indexed Linked and Credit Linked Deposits
NCM Mutual Fund
SWIFT Investment
Provision for Investments

Cash Inflow (Outflow)
FY 2012/13 in NRs.
CURRENT YEAR
PREVIOUS YEAR
INFLOW / (OUTFLOW)
16,332,043,012
14,048,965,792
(2,283,077,220)
(220,280,173)
19,373,995
(3,310,078,588)
(3,498,498,924)
(210,034,800)
(201,284,800)
(239,654,168)
-
(441,000,000)
(2,041,186)
(1,759,054)
12,586,525,436
9,712,702,506
16,291,166
(1,257,000)
27,816,665
(188,420,336)
8,750,000
(441,000,000)
(1,257,000)
282,132
11,525,499
(2,873,822,930)
FY 2011/12 in NRs.
PARTICULARS
Total Investment in Balance Sheet
Nepal Government Other Securities

Foreign Bonds
Organized Institutions' Shares
Organized Institutions' Bonds and Debentures

Indexed Linked and Credit Linked Deposits
NCM Mutual Fund
SWIFT Investment
Provision for Investments

CURRENT YEAR
PREVIOUS YEAR
INFLOW / (OUTFLOW)
14,048,965,792
13,081,205,527
(967,760,265)
(3,498,498,924)
(2,255,275,527)
1,243,223,397
(201,284,800)
(192,489,000)
8,795,800
(220,280,173)
(178,059,588)
42,220,585
(441,000,000)
(570,400,000)
(129,400,000)
(1,759,054)
(1,640,373)
118,681
(1,257,000)
27,816,665
9,712,702,506
(1,257,000)
4,562,809
9,886,646,848
(23,253,856)
173,944,342
165
15.1.10. (Increase)/Decrease in Loans, Advances and Bills Purchase

PARTICULARS
Loans and Advances in Balance Sheet

(Net of Provision & Loan Write-Off)
Net Provision Change
Loan Write Off During the Year

PREVIOUS YEAR
INFLOW / (OUTFLOW)
(46,369,834,571)
(41,605,682,634)
(4,764,151,937)
(46,411,287,993)
(41,605,682,634)
(4,805,605,359)
CURRENT YEAR
PREVIOUS YEAR
INFLOW / (OUTFLOW)
(41,605,682,634)
(38,034,097,554)
(3,571,585,080)
38,034,097,554
(3,965,286,395)
CURRENT YEAR
PREVIOUS YEAR
INFLOW / (OUTFLOW)
(2,150,185,391)
(1,548,964,565)
(601,220,826)
173,755,044
136,656,764
37,098,280
(13,610,147)
(27,843,275)
PARTICULARS
Loans and Advances in Balance Sheet

(Net of Provision & Loan Write-Off)
Net Provision Change
Loan Write Off During the Year

FY 2012/13 in NRs.
CURRENT YEAR
(390,694,824)
(3,006,491)
(41,999,383,949)
(13,610,147)
(27,843,275)
FY 2011/12 in NRs.
(390,694,824)
(3,006,491)
15.1.11. (Increase) / Decrease in Other Assets

PARTICULARS
Other Assets in Balance Sheet

(Net of Provision)
Income receivable on Investment
Interest receivable from Staff Housing Loan

Deferred Tax
Provision on Receivables
Cash Outflow
PARTICULARS
Other Assets in Balance Sheet
Income receivable on Investment
Interest receivable from Staff Housing Loan

Deferred Tax
Provision on Receivables
Cash Outflow
125,808,564
44,574,722
(638,562)
(1,806,685,623)
152,535,579
42,575,441
(1,217,196,781)
FY 2012/13 in NRs.
(26,727,015)
1,999,281
(638,562)
(589,488,842)
FY 2011/12 in NRs.
CURRENT YEAR
PREVIOUS YEAR
INFLOW / (OUTFLOW)
(1,548,964,565)
(1,201,984,291)
(346,980,274)
136,656,764
112,624,270
24,032,494
152,535,579
42,575,441
(1,217,196,781)
79,395,660
34,382,312
(975,582,049)
73,139,919
8,193,129
(241,614,732)
166
Nabil Bank Limited
15.1.12. (Increase) / Decrease in Other Liabilities

FY 2012/13 in NRs.
PARTICULARS
CURRENT YEAR
PREVIOUS YEAR
INFLOW / (OUTFLOW)
Bills Payable as per Balance Sheet
529,597,845
179,142,358
350,455,487
Other Liabilities as per Balance Sheet

Interest Payable on Deposits
Interest Payable on Borrowings

Gratuity Fund
Employees' Welfare Fund / Leave Fund

Dividend Payable
Unearned Income
(Int on Housing/Vehicle Loans and Bills)

Accrued Expense Payable
Unearned Income (Guarantee)

Other Staff Expenses Payable
Cash Outflow
1,071,099,849
(64,854)
(3,712,957)
(76,931,147)
(81,653,026)
(316,255,521)
(41,097,769)
(3,172,125)
(6,732,393)
(90,663,828)
450,816,229
1,072,481,023
(38,399)
(3,856,189)
(78,441,012)
(64,892,721)
(241,638,501)
(35,197,741)
(45,271,717)
(4,745,609)
(109,805,125)
(69,574)
488,524,435
(37,708,206)
312,747,281
FY 2011/12 in NRs.
PARTICULARS
CURRENT YEAR
PREVIOUS YEAR
INFLOW / (OUTFLOW)
Bills Payable as per Balance Sheet
179,142,358
415,767,753
(236,625,395)
1,072,481,023
859,405,624
(3,856,189)
(4,388,033)
Other Liabilities as per Balance Sheet

Interest Payable on Deposits
Interest Payable on Borrowings

Gratuity Fund
Employees' Welfare Fund / Leave Fund

Dividend Payable
Unearned Income
(Int on Housing/Vehicle Loans and Bills)

Accrued Expense Payable
Unearned Income (Guarantee)

Other Staff Expenses Payable
Cash Outflow
(38,399)
(1,108,860)
(78,441,012)
(87,626,265)
(241,638,501)
(190,943,019)
(45,271,717)
(22,486,191)
(109,805,125)
(54,643,419)
488,524,435
403,171,567
(64,892,721)
(35,197,741)
(4,745,609)
(69,574)
(59,337,671)
(27,302,999)
(8,397,600)
85,352,868
(151,272,527)
167
15.2. From investing activities:

15.2.1. (Increase) / Decrease in Long Term Investments
FY 2012/13 in NRs.
PARTICULARS
CURRENT YEAR
PREVIOUS YEAR
INFLOW / (OUTFLOW)
Foreign Bonds
239,654,168
220,280,173
(19,373,995)
201,284,800
(8,750,000)
Long Term Government Bonds

Shares Investment
Mutual Fund
SWIFT Fund
Indexed Linked Deposits / Credit Linked Deposits

Cash Outflow
3,310,078,588
210,034,800
2,041,186
3,498,498,924
1,257,000
1,759,054
441,000,000
188,420,336
1,257,000
(282,132)
441,000,000
3,761,808,742
4,364,079,951
PARTICULARS
CURRENT YEAR
PREVIOUS YEAR
INFLOW / (OUTFLOW)
Foreign Bonds
220,280,173
178,059,588
(42,220,585)
Long Term Government Bonds

Shares Investment
Mutual Fund
SWIFT Fund
Indexed Linked Deposits / Credit Linked Deposits

Cash Outflow
3,498,498,924
2,255,275,527
1,257,000
1,257,000
201,284,800
1,759,054
441,000,000
4,364,079,951
192,489,000
1,640,373
570,400,000
3,199,121,488
15.2.2. (Increase) / Decrease in Fixed Assets

PARTICULARS
602,271,209
FY 2011/12 in NRs.
(1,243,223,397)
(8,795,800)
(118,681)
129,400,000
(1,164,958,463)
NRs.
CURRENT YEAR
PREVIOUS YEAR
Addition during the Year (Excluding LeaseHold)
(66,677,211)
(77,329,458)
Closing Work In Progress
(49,447,381)
(6,553,648)
Disposal During the Year
7,847,648
Addition during the Year (LeaseHold)

Opening Work In Progress
Cash Outflow
(5,976,438)
6,553,648
(107,699,734)
(14,649,650)
2,582,168
10,200,485
(85,750,103)
168
Nabil Bank Limited
15.2.3. Interest Income from Long Term Investment
NRs.
PARTICULARS
CURRENT YEAR
PREVIOUS YEAR
Interest Income in Income Statement
239,364,585
215,912,363
Income Receivable on Long Term Investment (Current Year)
(33,213,877)
(51,060,015)
Cash Inflow
257,210,723
187,265,858
Income Receivable on Long Term Investment (Previous Year)
51,060,015
22,413,510
15.3. From investing activities:

15.3.1. Dividend Payments
PARTICULARS
Closing Dividend Payable in Balance Sheet
CURRENT YEAR
41,097,769
NRs.
PREVIOUS YEAR
35,197,741
Proposed Cash Dividend Previous Year
(811,907,760)
(608,930,820)
Cash Outflow
(806,007,732)
(601,036,078)
Opening Dividend Payable in Balance Sheet
(35,197,741)
(27,302,999)
16. Events after the Balance Sheet date

No circumstances have arisen since the Balance Sheet date which would require adjustments to or
disclosure in the Financial Statements other than those discussed below.
16.1. Proposed Dividend
The directors have recommended the payment of dividend of NRs.65 per share which consists of a
cash dividend of NRs.40 per share and a stock dividend of NRs.25 per share for the year ended
July 15, 2013. This will be declared at the forthcoming Annual General Meeting of the Bank for
approval of the shareholders.
16.2. Recognition of Interest Income on deferred cash basis
NRB directive 04/069 Section 5 has allowed BFIs to recognise interest income on loans and
advances that accrued till year end but was recovered in cash within 15 days after year-end, in the
income of current year. The Bank did not opt to exercise this option.
169
17. Rounding off &regrouping

17.1. All figures have been rounded off to the nearest rupee.
17.2.Previous years figures have been regrouped/rearranged wherever necessary and explained as under:
17.2.1. Restatement of items in Balance Sheet
INVESTMENT
NRS.
Balance disclosed in PY's Balance Sheet
14,055,850,055
Restated Balance disclosed in CY's Balance Sheet
14,048,965,792
- Reduction of erroneous unamortized Premium
(6,884,263)
17.2.2. Restatement of items in Profit and Loss Account

INTEREST INCOME
NRS.
Balance disclosed in PY's Profit and Loss Account
6,133,739,091
Restated Interest Income disclosed in CY's Profit and Loss Account
6,126,854,828
(6,884,263)
17.2.3. Restatement of items in Schedules of Financial Statements

INTEREST INCOME
NRS.
Balance disclosed in PY's Schedule 18 B.1.b.
202,946,829
Restated Balance disclosed in CY's Schedule 18 B.1.b.
196,062,566
- Rectification of erroneous Unamortized Premium on Bonds
BOND
(6,884,263)
NRS.
Balance disclosed in PY's Schedule 12
3,505,383,187
Restated Balance disclosed in CY's Schedule 12
3,498,498,924
COMMISION INCOME CARDS
(6,884,263)
NRS.
Balance disclosed in PY's Schedule 20 B.5.
111,378,070
Restated Balance disclosed in CY's Schedule 20. B.5.
113,690,050
- Rectification of erroneous offsetting of ATM Management Fee
HOUSE RENT
2,311,980
NRS.
Balance disclosed in PY's Schedule 24 1.
52,486,027
Restated Balance disclosed in CY's Schedule 20. B.5.
54,798,007
- Regrouping of ATM Management Fee under Rent
2,311,980
170
Nabil Bank Limited
17.2.4. Restatement of items in Cash Flow Statements

CASH RECEIVED - INTEREST INCOME
NRS.
Balance disclosed in PY's Cash Flow Statement a.1. 1.1
5,865,202,083
Restated Balance disclosed in CY's Cash Flow Statement
5,858,317,820
(INCREASE)/DECREASE IN LONG-TERM INVESTMENT
(6,884,263)
NRS.
Balance disclosed in PY's Cash Flow Statement b.1.
(1,171,842,726)
Restated Balance disclosed in CY's Cash Flow Statement
(1,164,958,463)
6,884,263
17.2.5. Restatement of items in Consolidated Balance Sheet

INVESTMENT
NRS.
Balance disclosed in PY's Consolidate Balance Sheet
14,076,850,055
Restated Balance disclosed in CY's Consolidated Balance Sheet
14,069,965,792
(6,884,263)
17.2.6. Restatement of items in Consolidated Profit and Loss Account

INTEREST INCOME
NRS.
Balance disclosed in PY's Consolidated Profit and Loss Account
6,145,750,888
Restated Interest Income disclosed in CY's Consolidated Profit and Loss Account
6,138,866,625
(6,884,263)
17.2.7. Restatement of items in Consolidated Cash Flow Statement

CASH RECEIVED - INTEREST INCOME
NRS.
Balance disclosed in PY's Consolidated Cash Flow Statement a.1. 1.1
5,873,693,127
Restated Balance disclosed in CY's Consolidated Cash Flow Statement
5,866,808,864
(INCREASE)/DECREASE IN LONG-TERM INVESTMENT
(6,884,263)
NRS.
Balance disclosed in PY's Consolidated Cash Flow Statement b.1.
(1,195,442,726)
Restated Balance disclosed in CY's Consolidated Cash Flow Statement
(1,188,558,463)
6,884,263
PROMOTERS / SHAREHOLDERS CLASSIFIED UNDER PROMOTERS GROUP
SHARES REGISTERED IN THE NAME OF PROMOTERS

TOTAL NO. OF SHARES
% ON TOTAL PAID
UP CAPITAL
NAME OF BANKS / FINANCIAL
INSTITUTION PROVIDING LOANS
STATEMENT OF LOANS
LOAN AMOUNT
NO. OF SHARES PLEDGED
REMARKS
Schedule 34
for borrowing money.
Furthermore, it has disposed 1.08% shares during F/y 2012-13. These shares can be freely traded in NEPSE. 119 such shareholders holding 465,222 shares have pledged 368,239 shares with banks / financial institutions / cooperative societies
Note: None of the promoters have borrowed money by pledging bank's shares. One of the promoters, NIDC, holding 10% shares of the Bank from the beginning, disposed 3.85% shares in F/y 2007-08 to the general public through auction.
S. No.
Statement of Loans availed by promoters / shareholders classified under promoters' group

from other banks and financial institutions by pledging shares under their ownership
171
172
Nabil Bank Limited
Comparison of Unaudited and Audited Financial Statement
Schedule 35
As of 15.07.2013 of Financial Year 2012-13

S.N. PARTICULARS
1. Total Capital and Liabilities (1.1 to 1.7)
1.1 Paid up Capital
1.2 Reserve and Surplus
1.3 Debenture and Bonds
1.4 Borrowings
1.5 Deposits (a+b)
Domestic Currency (a)

Foreign Currency (b)
1.6 Income Tax Liability

1.7 Other Liabilities
2. Total Assets (2.1 to 2.7)
2.1 Cash and Bank Balance
2.2 Money at Call and Short Notice
2.3 Investments
AS PER AUDITED
FINANCIAL STATEMENT
IN AMOUNT
(NPR)
74,531,125
73,241,260
(1,289,865)
5,225,337
4,617,829
(607,508)
-11.63%
#DIV/0!
0.00%
2,436,841
300,000
63,609,808
3,046,052
300,000
63,609,808
54,277,667
54,277,667
66,736
66,873
9,332,141
2,892,402
9,332,141
1,600,698
609,210
-
136
(1,291,704)
74,531,125
73,241,260
(1,289,865)
1,634,306
1,634,306
5,882,569
16,348,334
5,882,569
16,332,043
(16,291)
2.4 Loans and Advances
47,645,530
46,369,835
(1,275,695)
2.6 Non Banking Assets
2.5 Fixed Assets
VARIANCE.
AS PER UNAUDITED
FINANCIAL STATEMENT
872,322
872,322
IN
%
-1.73%
25.00%
0.00%
0.00%
0.20%
-44.66%
-1.73%
-0.10%
Note 7
0.00%
0.10%
3.1 Interest Income
5,702,123
5,702,123
0.00%
A Net Interest Income (3.1-3.2)
3,515,938
3,515,938
0.00%
209,905
209,905
0.00%
4,607,945
4,607,945
0.00%
468,780
468,781
3.3 Fees,Commission and Discount
3.4 Other Operating Income
3.5 Foreign Exchange Gain/Loss (Net)
B Total Operating Income (A+3.3+3.4+3.5)
3.6 Staff Expense
3.7 Other Operating Expense
393,051
489,051
646,751
393,051
489,051
646,760
(10)
C Operating Profit Before Provision (B-3.6-3.7)
3,492,414
3,492,404
D Operating Profit (C-3.8)
2,999,714
3,464,953
490,714
24,728
(465,986)
(17,454)
3.8 Provision for Possible Losses
3.9 Non Operating Income/Expenses (Net)
3.10 Write Back of Provision for Possible Loss
492,700
17,832
27,451
13,469
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
(465,250)
-94.43%
(4,364)
-24.47%
(5,111)
-0.15%
465,239
15.51%
-94.96%
E Profit from Regular Activities (D+3.9+3.10)
3,508,260
3,503,149
F Profit before Bonus and Taxes (E+3.11)
3,490,806
3,485,695
(5,111)
-0.15%
950,762
950,678
(85)
-0.01%
3.11 Extra Ordinary Income/Expense (Net)

3.12 Provision for Staff Bonus
3.13 Provision for Tax
G Net Profit/(Loss) (F-3.12-3.13)
(17,454)
316,720
2,223,323
316,256
2,218,762
(465)
(4,561)
Note 5
Note 6
2,121
2,186,185
Note 4
-2.68%
2,150,185
2,186,185
Note 3
0.00%
0.00%
2,148,064
3.2 Interest Expense
Note 1
Note 2
0.00%
2.7 Other Assets
3. Profit and Loss Account
REASONS FOR
VARIANCE
Note 8
Note 9
Note 10
0.00%
-0.15%
-0.21%
Note 11
Note 12
173
NOTE:
1
2
3
4
5
6
7
8
9
10
11
12
Increase in Equity Capital as a result of proposed stock dividend @ 25% on paid up equity capital.
Impact on reserve due to stock dividend declaration of Rs. 609,210 thousand. In addition,
impact of dividend income Rs.1.9 million accounted post publication.
Impact on current tax liability due to booking of dividend (increment less reversal) giving arise to staff bonus (net) .
Provision on possible losses on Investments and Loans presented under Other Liabilities while publishing
fourth quarter unaudited financial results.
Investments reported on gross basis in fourth quarter unaudited financial results.
Loans, Advances and Bills reported on gross basis in fourth quarter unaudited financial results.
Booking of accounts receivable (dividend receivable) and other receivables.
Provision presented on net basis (incremental less writeback) in the Profit and Loss Account.
Additional loan loss provision of NRs.34,159 thousand booked.
Initially, dividend refund to RMDC vide instruction of CIAA was reported/adjusted directly to opening retained earning.
Considering non-applicability of NAS 2, Accounting Policiies, Changes in Accounting Estimates & Errors,
this has been reported/adjusted under extraordinary income.
Provision presented on net basis (incremental less writeback) in the Profit and Loss Account.
Proportional Impact of additional loan loss provisioning and dividend income in provision for staff bonus.
Proportional Impact of additional loan loss provisioning and staff bonus in provision for tax.
174
Nabil Bank Limited
Unaudited Financial Highlights
Schedule 4(A)
As at 4th Quarter End of FY 2012/13

S.N. PARTICULARS
1. Total Capital and Liabilities (1.1 to 1.7)

1.1 Paid up Capital
1.2 Reserve and Surplus
1.3 Debenture and Bond

1.4 Borrowings
1.5 Deposits (a+b)
Domestic Currency (a)

Foreign Currency (b)
1.6 Income Tax Liability
1.7 Other Liabilities
1.8 Non-Controlling Interest

2. Total Assets (2.1 to 2.7)
2.1 Cash and Bank Balance
2.2 Money at Call and Short Notice

2.3 Investments
2.4 Loans and Advances

a. Real Estate Loan
1. Residential Real Estate Loan (Except
15 JULY 2013
GROUP
AS AT
13 APRIL 2012
GROUP
74,644,964
74,531,125
71,145,589
69,854,407
64,547,274
64,490,200
5,243,231
5,225,337
4,548,493
4,536,175
3,024,801
3,015,162
2,436,841
300,000
-
2,436,841
300,000
-
2,436,841
300,000
1,450,000
NABIL
15 JULY 2012 (AUDITED)

GROUP
NABIL
NABIL
2,436,841
300,000
1,450,000
2,435,723
300,000
311,080
2,435,723
300,000
311,080
63,517,756
63,609,808
57,308,041
57,597,877
54,905,676
55,023,695
9,332,141
9,332,141
8,354,729
8,354,729
7,459,924
7,459,924
54,185,615
66,736
54,277,667
66,736
48,953,312
38,385
49,243,148
33,683
47,445,752
51,106
47,563,771
51,106
3,047,205
2,892,402
5,032,565
3,499,830
3,488,551
3,353,433
74,644,964
74,531,125
71,145,589
69,854,407
64,547,274
64,490,200
1,634,306
1,634,306
942,300
942,300
826,436
33,194
5,909,059
5,882,569
31,264
5,661,561
4,451,850
30,336
4,294,046
4,275,822
826,436
16,360,194
16,348,334
16,754,428
16,701,252
14,104,667
14,083,667
4,435,751
4,435,751
4,370,587
4,370,587
4,671,457
4,671,457
47,645,530
47,645,530
45,100,468
45,100,468
42,867,768
42,867,768
Personal Home Loan up to Rs.10 Million)
554,870
554,870
427,930
427,930
353,620
353,620
Apartment Construction Loan
820,231
820,231
648,529
648,529
786,269
786,269
2,446,085
2,446,085
2,724,845
2,724,845
2,921,267
2,921,267
2. Business Complex & Residential
3. Income generating Commercial Complex Loan

Other Real Estate Loan
(Including Land purchase & Plotting)
b. Personal Home Loan up to 80 Lacs

c. Margin Type Loan
d. Term Loan
e. Overdraft Loan/TR Loan/WC Loan

f. Others
2.5 Fixed Assets
2.6 Non Banking Assets

2.7 Other Assets
614,565
3,270,349
6,948,455
614,565
3,270,349
6,948,455
569,284
2,753,004
6,432,481
569,284
2,753,004
6,432,481
610,300
2,446,109
5,832,773
610,300
2,446,109
-
5,832,773
24,555,456
24,555,456
24,246,954
24,246,954
22,402,265
22,402,265
878,461
872,322
881,988
875,667
894,495
887,543
8,435,519
-
2,217,414
8,435,519
-
2,148,064
7,297,442
-
1,804,844
7,297,442
-
1,782,870
7,515,164
-
1,559,863
7,515,164
-
1,548,965
Contd.
175
Unaudited Financial Highlights

For the period ending on 4th Quarter of FY 2012/13
S.N. PARTICULARS
3. Profit and Loss Account
Schedule 4(A)
Contd.
15 JULY 2013
GROUP
NABIL
4 Quarters This Year
FOR THE PERIOD ENDING ON

13 APRIL 2012
GROUP
NABIL
3 Quarters This Year

GROUP
NABIL
4 Quarters Last Year
3.1 Interest Income
5,721,591
5,702,123
4,218,025
4,204,779
6,145,751
6,133,739
A Net Interest Income (3.1-3.2)
3,535,290
3,515,938
2,538,048
2,525,102
2,992,811
2,978,249
3.2 Interest Expense
3.3 Fees,Commission and Discount

3.4 Other Operating Income
3.5 Foreign Exchange Gain/Loss (Net)
B Total Operating Income (A+3.3+3.4+3.5)

3.6 Staff Expenses
3.7 Other Operating Expenses
2,186,301
405,255
223,080
489,051
2,186,185
393,051
209,905
489,051
1,679,977
342,176
1,679,677
332,560
110,536
342,522
100,944
342,522
3,152,940
367,676
207,296
447,070
4,652,676
4,607,945
3,333,283
3,301,129
4,014,853
476,318
468,780
345,690
338,200
432,881
652,339
646,751
394,330
390,356
505,009
3,155,490
364,075
201,085
447,070
3,990,479
500,713
428,597
C Operating Profit Before Provision (B-3.6-3.7)
3,524,019
3,492,414
2,593,262
2,572,573
3,076,963
3,061,169
D Operating Profit (C-3.8)
3,031,319
2,999,714
2,112,973
2,092,284
2,663,014
2,647,221
490,714
490,714
305,365
305,365
3.8 Provision for Possible Losses
3.9 Non Operating Income/(Expenses) Net
3.10 Write Back of Provision for Possible Loss
492,700
10,422
492,700
17,832
480,289
1,587
480,289
1,587
413,949
9,940
413,949
13,840
-
E Profit from Regular Activities (D+3.9+3.10)
3,532,455
3,508,260
2,419,925
2,399,236
2,672,954
2,661,060
F Profit before Bonus and Taxes (E+3.11)
3,515,001
3,490,806
2,426,482
2,405,793
2,669,917
2,658,024
958,271
950,762
658,147
653,445
723,698
3.11 Extra Ordinary Income/Expenses (Net)

3.12 Provision for Staff Bonus
3.13 Provision for Tax
G Net Profit/(Loss) (F-3.12-3.13)
3.14 Share of Non-Controlling Interest

on Profit of Subsidiary
H Net Profit/(Loss) (G-3.14)

4.
RATIOS & OTHERS (%)
4.1 Capital Fund to RWA
4.2 Non Performing Loan (NPL) to Total Loan
4.3 Net Non Performing Loan to Net Loan
4.4 Cost of Funds
4.5 CD Ratio (as per NRB Directive)
(17,454)
319,593
(17,454)
316,720
6,557
220,589
6,557
218,708
(3,037)
243,074
(3,037)
241,639
720,109
2,237,136
2,223,323
1,547,745
1,533,639
1,703,145
1,696,276
5,558
3,627
2,769
2,231,579
2,223,323
1,544,118
1,533,639
AS AT
13 APRIL 2012
15 JULY 2013
1,700,376
1,696,276
13.29
13.17
12.93
12.85
11.18
11.01
0.45
0.45
1.17
1.17
0.38
0.38
2.13
4.36
74.42
2.13
4.36
74.43
3.40
4.59
76.60
3.40
4.59
76.33
2.33
6.85
74.69
2.33
6.85
74.65
06
SHAREHOLDER
INFORMATION
06
STRUCTURE OF SHARE CAPITAL

GENERAL
PUBLIC
NB INTERNATIONAL
LIMITED
50%
30%
REPRESENTATION IN
THE BOARD OF DIRECTORS
Representation of A class shareholders
OWNERSHIP
STRUCTURE OF NABIL
(in relation to 50% interest of NB International Ltd.)

1. Mr. K.B. Manandhar
2. Mr. Nirvana Chaudhary
3. Mr. Dayaram Gopal Agrawal
4. Mr. Mohiuddin Ahmed
Representation of B class shareholders

(in relation to 20% interest of NIDC, other
institutional investors and other promoters group)
1. Mr. K.P. Acharya
Representation of C class shareholders
(in relation to 30% interest of public shareholders)

1. Mr. Shambhu Prasad Poudyal
2. Mr. Ashish Sharma
OTHER
PROMOTER
GROUP
4.93%
OTHER
ENTITIES
10%
NIDC DEVELOPMENT
BANK
5.07%
177
06
SHAREHOLDERS PROFILE
As at balance sheet date (15th July 2013), the Banks share registrar,
M/s Nabil Investment Banking Ltd. has recorded following details of shareholders:
SHAREHOLDING RANGE
NO. OF SHAREHOLDERS
TOTAL SHARES HELD
1-100
4,001
216,645
501-1000
1,041
101-500
1001-2500
2501-5000
5001-10000
10001-25000
25001-50000
50001-100000
Above 100000
Total
4,683
1,212,391
1,200
1,993,479
248
751,585
867,648
89
623,457
36
549,403
12
7
11
11,328
477,541
552,209
17,124,056
24,368,414
06
STOCK SYMBOL
Nabil Banks shares are traded on the Nepal Stock Exchange Ltd. (NEPSE) with stock
symbol "NABIL" for ordinary shares and "NABILP" for promoter shares.
178
Nabil Bank Limited
06
ANNUAL GENERAL MEETING
The 29th Annual General Meeting (AGM) of the Bank

will be held on 27th December 2013 at 1:00 p.m.
Following agendas will be discussed in the meeting.
ORDINARY RESOLUTION
SPECIAL RESOLUTION
1. To receive and adopt Directors

Report 2012/13;
1. To ratify the amendment of Banks

Memorandum of Association and to
authorize Board of Directors for needful
adjustment in case of changes made by the
Nepal Rastra Bank in the proposed
amendment.
2. To receive and approve Balance Sheet as

of 15th July 2013, Profit/Loss Account and
Cash Flow Statement for the year ended
thereat, together with Auditors Report;
3. To approve consolidated books of
accounts i.e. including books of accounts of
Banks subsidy Nabil Investment Banking
Limited for F.Y. 2012/13;
4. To approve cash dividend @ 40% of the
Paid-up Capital (i.e Rs.40/- per share) as
proposed by the Board; and
5. To appoint Auditor(s) for the financial year
2013/14 (2070/71) and to fix the auditors
remuneration as per Section 111 of the
Companies Act 2006.
(Proviso to Section 60(2) of the Bank and
Financial Institutions Act 2006 (B.S.
2063), present Auditor M/s CSC & Co. will
be eligible for re-appointment)
2. To increase authorized capital of the Bank

to NRs.3,100,000,000 (in words rupees
three billion and hundred million).
3. To increase the issued and paid capital to
NRs.3,046,051,750 by issuing bonus
shares at the ratio of 4:1 (for every 4 share
to issue 1 share or 25% of each share) from
the profit of year that ended on July 15,
2013 and to approve the adjustment in paid
up capital, keeping intact the shareholding
ratio, due to adjustment of fraction share
into whole from the cash dividend as a
consequence of issuance of bonus shares in
such proportion.
All resolutions considered at 28th AGM held
on 17th October 2012 were ratified by the
shareholders in the meeting.
179
06
SHAREHOLDER ENQUIRIES
AND COMMUNICATION
COMMUNICATION
All information related and relevant to
shareholders that are necessary and
mandatory in accordance to law is
communicated via print media (national
daily) and electronically through Banks
official website www.nabilbank.com. The
detailed information of AGM including
agendas that will be discussed is notified
publicly through national daily 21 days
before the date of AGM. Similarly, interim
financial highlights are published within the
stipulated deadline of 30 days prescribed by
Securities Exchange Board of Nepal. These
statements along with Basel II Disclosures as
prescribed by Point 7.4(b) of Capital
Adequacy Framework 2007 (updated July
2008) under Directive 1 of NRB Unified
Directives are posted in the Banks official
website.
ENQUIRES
Any enquiries related to the shareholders of
Nabil Bank on the share register viz.,
maintenance of shareholders record, share
transfer including domestic transfer in case
of death of a shareholder, replacement of lost
share certificate, pledge of shares, dividend
warrants/bonus shares declared and ratified
by the AGM, payment against dividend/ lost
warrant should be sent at the address given
below:
Nabil Investment Banking Ltd.
Naxal, Narayan Chaur, Kathmandu, Nepal
Tel: -977-1-4411604, 4411733
Fax: -977-1-4410554
Email: nabilinvest@nabilbank.com
Web: www.nabilinvest.com.np
180
Nabil Bank Limited
06
TAXATION ON DIVIDENDS
AND SHARES
TAXATION ON DIVIDENDS
(CASH AND BONUS DIVIDENDS)
Pursuant to Section 88(2) of the Income Tax
Act 2002, the tax on dividend received by
the shareholders of Nabil Bank from the
Nabil Bank is subject to withholding tax at
the rate of 5%. The tax is final withholding
tax as per Section 92(1)(a) of the Act and
need not require further assessment while
filing annual tax return under Section 96.
However, the dividend distributed by the
Bank from the dividend earned from the
resident company is not subject to tax at the
time of its distribution as per Section 54(3).
The Bank has received dividend
NRs.61,323 thousand from the resident
companies from financial year 2001-02 till
2012-13.
CAPITAL GAINS ON
DISPOSAL OF SHARES
Pursuant to clause (a) of Section 95A(2) of
the Income Tax Act, 2002 (amended by
Finance Ordinance 2013), the gain on
disposal of shares listed in Securities Board
of Nepal computed as per Section 37 of the
Act is subject to withholding tax at the rate
of 5%, in case, the beneficiary of the gain is
resident natural person and at the rate of
10%, in case of any other person other than
resident natural person. Shares of Nabil
Bank are listed both in Securities Board of
Nepal and Nepal Stock Exchange for the
purpose of public trading and therefore the
gain on disposal of Banks shares are subject
to withholding tax in accordance to clause
(a) of Section 95A(2).
S.N. YEAR
Gain or loss arising from disposal of shares

under Section 37 of the Act shall be the
amount that is determined by reducing the
amount incurred while acquiring the shares
with the amount that is received at the time
of its disposal. The amount of disposal in
case the Nabil Banks shares are sold
through stock exchange shall be the net
amount received from the buyer less
brokerage and other costs incurred during
the transaction. The costs incurred for the
shares by the way of an acquisition through
stock exchange shall be the amount paid to
the beneficiary plus all costs attributable to
the acquisition. Further, the costs incurred
for the shares by the way of transfer from the
deceased person shall be the market value
prevailing immediately before the death of
the transferor. The tax being withheld on the
gains arising from disposal of shares is an
advance tax and the tax credit is available at
the time of filing annual tax returns.
NRS.
FY 2001-02 (2058-59)
323,000
FY 2003-04 (2060-61)
456,000
2
4
5
6
7
8
9
10
11
12
Total
FY 2002-03 (2059-60)
FY 2004-05 (2061-62)
FY 2005-06 (2062-63)
FY 2006-07 (2063-64)
418,000
476,853
469,205
720,323
FY 2007-08 (2064-65)
1,850,862
FY 2009-10 (2066-67)
7,764,735
FY 2008-09 (2065-66)
FY 2010-11 (2067-68)
FY 2011-12 (2068-69)
FY 2012-13 (2069-70)
2,409,200
10,526,931
16,073,799
19,834,571
61,323,479
Capitalization of profits is deemed as

distribution under Section 53(1)(b) of the
Act and hence, issuance of bonus shares by
the Bank from the profits earned (excluding
dividend received) is subject to withholding
tax at the rate of 5% under Section 88(2).
07
NABIL
INVESTMENT
BANKING LIMITED
DIRECTORS REPORT
Respected Shareholders,
On behalf of Nabil Investment Banking
Limited, I would like to welcome all the
shareholders in the Fourth Annual General
Meeting (AGM) of the Company. Nabil Bank
Limited with its mission to be the First Choice
Provider of Complete Financial Solutions
incepted "Nabil Investment Banking Ltd.
(Nabil Invest)" as a Subsidiary so as to develop
the company as Investment Banker of First
Choice in the long run introducing innovative
products and services in the Nepalese capital
market.
I will be presenting achievements of the
Company during the review FY 2012/13,
policies and strategies adopted by and future
plans of the Company in this AGM which shall
be passed after your approval. In this context,
I would like to seek your consent for
presenting audited financials of the company
for the review period including Balance Sheet,
Income Statement and Cash Flow Statement
for your approval. I request you all to discuss
and approve the same.
Now, I proceed to briefly inform the overall
capital market situations along with expansion
in financial systems of the Country during the
review fiscal year:
For the Fiscal Year 2012/13
EXPANSION IN FINANCIAL SYSTEM:

The number of BFIs and Insurance Companies as of July 15, 2013 are as follows:
BFIs/Insurance Companies
Mid July 2013
Mid July 2012
Commercial Banks
31
32
Finance Companies
59
70
Development Banks
Microfinance Institutions
86
Co-operatives Licensed by NRB (for Limited Banking Services)

NGOs Licensed by NRB (for Microfinance activities)
Insurance Companies
Source: Websites of NRB and Insurance Board
Deposit mobilization and credit extension of

banks and financial institutions licensed by
Nepal Rastra Bank as of mid July 2013 stood
at NPR 1252 billion 890 million and NPR
987 billion 770 million respectively compared
to NPR 1076 billion 620 million and NPR
807 billion 570 million as of mid July 2012
having increased by 17.4% towards deposit
mobilization and 18.6% towards credit
extension in FY 2012/13. The growth rate of
deposit mobilization being lesser than the
growth rate of loans & advances has resulted
lower liquidity in the banking industry.
31
16
31
25
88
24
16
36
25
SECURITIES MARKET:
The main glimpses of securities market of the
country during FY 2012/13 are as follows:
a. FY 2012/13 witnessed remarkable
improvements in the securities market. By the
mid of July 2013 NEPSE index reached a level
of 518.3 points with an increase of 33 percent
over the previous year same period where it
was 389.7 points.
b. During the review period securities
transactions volume recorded a significant
growth of 114.5 percent as compared to
previous year. During FY 2012/13 NEPSE
posted a transaction volume of NPR 22.05
182
Nabil Bank Limited
billion comprising of 81.6 million units of

shares while it was NPR 10.26 billion of 41.9
million shares in the previous year.
c. The number of listed companies with
NEPSE reached 230 by the mid July 2013
whereas it was 216 in mid July 2012.
In the previous year, SEBON approved

issuance of common shares (IPO) of 15
corporate bodies comprising NPR 4.05 billion,
right issues of 7 companies comprising NPR
0.45 billion and debenture issue of 4
commercial banks consisting of NPR 1.50
billion.
d. In the review period, the market

capitalization of listed companies increased by
39.7 percent to be NPR 514 billion as
compared to market capitalization of NPR 368
billion in the previous fiscal year.
SUMMARY OF FINANCIAL
INFORMATION OF FY 2012/13
e. Banks and Financial Institutions including

Insurance Companies constitute 71.7%,
Manufacturing and Processing Companies 3%,
Hotels 1.7%, Trading Organizations 0.2%,
Hydropower Companies 6% and Others
17.4% share in the total market capitalization
of listed companies. The trend of dominating
the capital market by BFIs continues this year
as in the past.
A) MAJOR ACTIVITIES
f. The total value of listed securities as of July

15, 2013 increased by 14% as compared to
previous year and reached to NPR 126.06
billion.
g. During the review period, 14 Securities
Business Persons (Merchant Banker) licensed
by SEBON have been providing their services
of Issue Management, Share Registration,
Portfolio Management and Underwriting in
accordance with their paid up capital.
h. During the review period, SEBON approved
issuance of common shares (IPO) of 23
corporate bodies comprising NPR 3.11 billion,
right issues of 5 companies comprising NPR
3.93 billion and debenture issue of 7
commercial banks consisting of NPR 3.55
billion.
The major activities of the company and its

financial highlights during FY 2012/13 have
been presented below:
Issue Management: During the review period,

the Company, as joint issue manager,
successfully managed IPOs of three
commercial banks and debenture issues of two
commercial banks. The company has been
providing debenture trusteeship services to five
commercial banks.
Portfolio Management Service: As per the
objective of the company to cater its services
to the investors, the company has been
providing Portfolio Management Services to its
wide clientele in a professional manner.
Mutual Fund: The Sponsor Nabil Bank
appointed Nabil Invest, an institution licensed
by SEBON to render Fund Management
services to the schemes of Nabil Mutual Fund.
During the review period, the Company as the
Fund Manager successfully launched Nabil
Balanced Fund I under the Nabil Mutual Fund,
Due to the overwhelming response from the
market, the issue was highly oversubscribed
and hence 75 million units of NPR 10 each
were allotted against the issue size of 60
million units of NPR 10 each as per the
prevailing Mutual Fund Regulation.
The Company has also been rendering

Depository services to the unit holders of Nabil
Balanced Fund I as per its license obtained
from SEBON & in line with the provisions of
prevailing regulations on mutual funds.
Depository Participant and Registrar to
Shares: The Company has obtained the DP
license from SEBON and took the membership
of CDS and Clearing Limited in order to
provide DP services to its clientele. The
required logistics and infrastructure have also
been prepared. The company started rendering
RTS services to Nabil Bank Limited and
Swabalamban Laghubitta Bikas Bank Limited
from its Anamnagar premises in the review
period.
Corporate Advisory Service: The Company has
already prepared the Product Papers and SIM
to launch Corporate Advisory Services like
Loan Syndication and Merger & Acquisition
Advisory Services. The Company is exploring
business opportunities in these new areas and
reached a few institutions in order to provide
such services. In addition, the Company also
provided advisory services to few institutions
in the form of Investment Advisory and
Business Valuation Reports during the review
period.
During FY 2012/13, the company has earned
about NPR 7.1 million from securities
business (including PMS), NPR 3.7 million
from mutual fund and remaining income
constitute the return from investment of its
share capital and service fees in lieu of various
administrative/operational supports provided to
its promoter Nabil Bank Limited. The company
expects to generate additional revenue from
DP and share registration services, loan
syndication and merger & acquisitions services
under corporate advisory services and from
second scheme under Nabil Mutual Fund
providing fund management and depository
services to it in the current fiscal year.
183
B) FINANCIAL HIGHLIGHTS:
PARTICULARS
NPR IN THOUSAND
FY 2012/13
NPR IN THOUSAND
FY 2011/12
GROWTH (%)
105,000
105,000
Share Capital
Total Assets
284,038
253,093
Total Expenses
20,650
12,728
Net Profit (After Employees Bonus and Tax)
21,167
10,769
Total Income
Operating Profit
Proposed Dividend
No. of Shares (in thousands)
Earnings Per Share (Rs.)
Return on Assets (Rs.)
Net worth per Share (after Dividend)(Rs.)
51,695
31,045
15,750
1,050
12.23
28,522
81.25
15,794
96.56
10,500
1,050
62.24
96.55
50.00
-
20.16
10.26
96.57
108.01
102.36
5.52
16.39
9.13
79.54
The amount to be refunded to the applicants

after allotment of the IPO amounting to NPR
100 million (approx.) has been placed in
various Bankers to the Issue (BTI) accounts.
The company attained a growth of approx.
12% in its total assets in the review period
2012/13 because of increased balance in the
BTI accounts and income generating activities
carried out by the company during the year.
The company witnessed an encouraging
growth of 96% in net profits in the review
period as compared to previous period.
Similarly, total income of the company has
increased by 81% whereas total expenses
have increased by 62% in the review period.
This shows that the overall transactions and
financial situation of the company remained
satisfactory during the review period. In the
previous year, the company distributed 10%
cash dividend (NPR 10.5 million) while this
year the company has proposed to distribute
15% cash dividend (NPR 15.75 million), an
increment of 50%.
On behalf of the Board, I would like to express

sincere gratitude to all the customers, wellwishers, promoter company Nabil Bank
Limited and its employees; and institutional
shareholder CG Finco Pvt. Ltd. for their
continuous support and cooperation. I also
thank all the Regulators for their cooperation
and guidance. I appreciate tremendous
contributions made by Mr. Sabin Joshi,
Director and Mr. Rewat Bahadur Karki,
Independent Professional Director during their
association (till the acceptance of resignation)
with the company. I extend my sincere thanks
to Mr. Sujan Kumar Kafle of M/s Sujan Kafle &
Associates, Chartered Accountants for
professionally completing the audit of the
company for the review period and suggestion
and contributions made during the course of
audit. Similarly, my especial thanks go to all
the employees of the company for their
noteworthy contributions for achieving
objectives of the company and expect similar
contributions in the days ahead.
The additional details as required by section

109(4) of prevailing Companies Act has been
presented in Annexure.
Thank you.
On behalf of the Board
Anil Gyawali
Chairman
184
Nabil Bank Limited
07
INFORMATION UNDER SECTION 109(4)

OF COMPANIES ACT, 2006
a) Business assessment of review fiscal year:

During the review period, the Company, as
joint issue manager, successfully managed
IPOs of three commercial banks and debenture
issues of two commercial banks. The company
has been providing debenture trusteeship
services to five commercial banks.
The company has already started rendering
full fledge PMS services with an objective of
establishing the company as Investment
Banking company in addition to Issue
Manager. The company has brought Nabil
Balanced Fund I under Nabil Mutual Fund into
operation in the review period. During the
review year, the company has made an action
plan of creating a separate unit for providing
Corporate Advisory Services in full fledge from
the coming year and has performed a few
Business Valuation jobs.
b) Any impact that caused to the business of
the company due to national and
international condition:
In the context of Nepalese capital market not
being directly linked with International
markets, the changes in the international
conditions do not have significant impact on
Nepalese market. However, few impacts can
be observed sometimes.
If the political situations of the country move
towards positive direction, Nepal can be
benefitted a lot from the attractive economic
growth of its neighboring countries China and
India which ultimately result positive impact
on the business of the company.
The new investors have not attracted towards
the capital market of Nepal as the Nepalese
capital market has not become lucrative for a
long period. Because of this, there were less
participation in the IPO and Rights issued by
majority of the companies except commercial
banks and microfinance development banks.
Therefore, while providing underwriting
services by the company, the overall financial
conditions of Issuer Company need to be
correctly evaluated. SEBON has already issued

policies, regulations and directives relating to
mutual fund, credit rating and central
depository system and accordingly institutions
have made their presence in the market to
provide such services. It can be expected that
these new services will have a positive impact
to boost the market in the days to come.
Similarly, there will be positive impact on the
market if elections for Constituent Assembly
completes within the deadline in a fearless
environment.
always placed high priority to the compliance

with related acts, laws and directives issued
by the regulators from time to time. The
company has been conducting its business on
the basis of healthy competition to other
licensed merchant bankers. The company has
been contributing growth of overall capital
market with association with the Merchant
Bankers Association in the capacity of General
Secretary. There is amicable relationship
between the management and other
employees in the company.
c) Current years achievement until the date

of preparation of Report from the Board of
Directors view on future activities of the
company:
The company has already signed an
agreement as Issue Manager for IPO of a
commercial bank and Debenture Issue
(through public and private placement) of
another commercial bank till the date of this
report.
The company has successfully launched Nabil
Balanced Fund I under Nabil Mutual Fund and
serving as Fund Manager and Depository to
the Scheme. Similarly, the Company has
obtained the DP license from SEBON and took
the membership of CDS and Clearing Limited
in order to provide DP services.
The company shall improvise the above
services; the existing services rendered by the
company and adopt the services rendered by
the regional investment bankers as per need in
the context of Nepalese market so as to cater
high level services to its customers. For this,
the company will make necessary coordination
with the regulators.
e) Board of Directors:
The details of Board of Directors and the Chief
Executive Officer have been presented below:
d) Industrial and professional relation of the

company:
The company has been maintaining cordial
relationship with industrial and professional
corporate bodies and enhancing its business
substantially therefrom. The company has
Mr. Anil Gyawali - Chairman

Mr. Krishna Dutta Bhattarai - Director
Mr. Kapil Adhikari - Director
Mr. Krishna Kumar Pradhan Independent Professional Director
Mr. Mahesh Kumar Karki Independent Professional Director
Mr. Pravin Raman Parajuli Chief Executive Officer/Company Secretary
During the review period, Mr. Sabin Joshi,
Director and Mr. Rewat Bahadur Karki,
Independent Professional Director tendered
their resignation due to business and personal
reasons respectively. Both the resignations
were approved the Board.
f) Board of Directors response on
Independent Auditors Report:
The audit of review period was carried out by
auditor Mr. Sujan Kumar Kafle of M/s Sujan
Kafle & Associates, Chartered Accountants
appointed unanimously by the third AGM of
the company. The Board discussed the
auditors report and unanimously approved the
audited annual accounts, Balance Sheet, Profit
& Loss A/c, P/L Appropriation A/c and Cash
Flow Statement of the company.
185
g) Details of shares forfeited:

The company has not forfeited any shares.
h) Review of the progresses made by the
company and its subsidiary and the position
of the same at the end of the fiscal year:
The progresses made and major activities
undertaken by the company during the review
period have already been mentioned above.
The company does not have any subsidiary.
i) Any information given to the company by
its fundamental shareholders:
The information provided by promoter
shareholder Nabil Bank Limited under group A
and institutional shareholder CG Finco Pvt.
Ltd. under group B have been maintained by
the company.
j) Shares held by the directors and officials of
the company and information received by the
company on their involvement in trading
shares:
The directors of the company have been
nominated by institutional shareholders and
the directors have no shareholding and
involvement of trading thereon. The same fact
applies in case of independent professional
directors.
k) Information provided on personal interest
of Board of Directors and their close relatives
regarding contract or agreement done with
the company:
The company has not received any such
information.
l) Buy back of shares by the company and
information pertaining to this:
The company has not bought back any shares
m) Information of internal control system:

The internal audit of the company for the
review period was carried out by the Internal
Audit Department of the bank as per the
provision of Service Level Agreement entered
between the bank and the company. Further,
the Board of the company has approved
Financial Administration Bylaws, HR Bylaws
including Product Paper and Standard
Instruction Manual (SIM) of services rendered
for maintaining effective internal control
system and enhancing service quality.
n) Details of management expenses incurred
during the year:
The total management expenses under the
heading of employee and administrative
expense incurred by the company during the
review period is NPR 15,069,450.
o) Remuneration, allowances and benefits
paid to directors, managing director, chief
executive officer and officials:
The Articles of Association of the company lays
down a provision of granting meeting allowance
of NPR 10,000 to the chairman and directors
in each meeting of the Board. Accordingly, the
company has paid NRs. 100,000 to its
Professional Independent Directors as meeting
fee during the review period. However, the
Board of Directors representing the Bank & CG
Finco Pvt. have decided not to accept any
meeting fees until otherwise decided at a later
stage. The Company does not provide any other
financial benefits to its Board of Directors
except meeting fee to the Professional
Independent Director.
The employees of the company are being
provided remuneration, allowances and
benefits as provided in the Employees Bylaws

of the company approved by the Board. In
case of employees deputed by the promoter
bank, the remuneration, allowances and
benefits have been provided as per the Bylaws
of the bank and agreements between the bank
and the company. Accordingly, the total
employee benefits paid to Chief Executive
Officer of the company in the review period
amounts to NPR 1.91 Million.
p) Income Tax:
The company has provided NPR 7,055,828
for income tax liability for the review period
which was calculated at the rate of 25% on
net profit (after provision for staff bonus) of
NPR 28,223,313 i.e. NPR 7,257,694 and
adjusting deferred tax of NPR 201,866
thereon.
q) Location of office:
The company currently has its office at
Chabahil, Kathmandu.
r) Technology:
The company has been using Accounting
Software purchased from MicroBanker Pvt.
Ltd. for recording all financial and accounting
transactions. Similarly, the company has been
using different software developed by local
vendor for transactions relating to issue
management, RTS, PMS and fund
management and depository under mutual
fund. In addition, the company is operating its
separate official website.
186
Nabil Bank Limited
Nabil Investment Banking Limited

Chabahil, Kathmandu, Nepal
Balance Sheet

SCHEDULE
THIS YEAR Rs.
PREVIOUS YEAR Rs.
105,000,000
105,000,000
154,873,861
135,118,050
284,038,969
253,093,273
SCHEDULE
THIS YEAR Rs.
PREVIOUS YEAR Rs.
110,535,802
128,243,001
98,382,600
107,000,000
284,038,969
253,093,273
Share Capital
Reserves and Surplus

Proposed Dividend
Total
ASSETS
Fixed Assets
Investments
Other Assets
Total
Significant Accounting Policies
24,165,108
6,139,204.
68,981,363
12,975,223
6,952,017
10,898,255
Schedule 12
Notes to Accounts
Schedule 13
Schedules 1 to 7 form integral part of the Balance Sheet.
Suman Kumar Bohara
Pravin Raman Parajuli
Anil Gyawali
Krishna Dutta Bhattarai
Kapil Adhikari
Krishna Kumar Pradhan
Head-Accounts
Director
DATE: September 15, 2013

PLACE: Chabahil, Kathmandu
Director
Chairman
Professional Independent
Director
Mahesh Kumar Karki

Director
Sujan Kumar Kafle, FCA

For and on behalf of sujan
kafle & Associates Chartered
Accountants
187
Income Statement
(For the period from 16July 2012 to 15 July 2013)
PARTICULARS
SCHEDULE
THIS YEAR Rs.
PREVIOUS YEAR Rs.
Commission Income
12,424,269
3,601,182
Other Income
16,816,641
Income
Interest Income
Total Income
Expenses
Personnel Expenses
10
11
Depreciation Charge
22,454,763
51,695,673
5,603,220
9,466,230
14,632,926
10,287,962
28,522,070
4,296,050
6,646,989
1,992,333
1,714,052
Total Expenses
20,650,029
12,728,105
31,045,644
15,793,965
Interest Expenses
Operating Profit
3,588,246
31,045,644
2,822,331
Profit Before Income tax

Provision for Income Tax
Current Tax
1,435,815
14,358,150
7,257,694
3,602,948
(201,866)
Net Profit/(Loss) for the year
15,793,965
28,223,313
7,055,828
Deferred Tax
71,014
21,167,485
3,589,538
(13,410)
10,768,612
Schedules 8 to 11 form integral part of the Income Statement.
Suman Kumar Bohara
Anil Gyawali
Kapil Adhikari
Head-Accounts
Director

Director
Chairman
Director
Mahesh Kumar Karki

Director

Accountants
188
Nabil Bank Limited
Profit and Loss Appropriation Account

Fiscal Year 2012/13 (2069/2070)
PARTICULARS
SCHEDULE
Income
Accumulated Profit up to Last Year (Restated Balance)

Current Year's Profit

Expense
Accumulated Loss up to Last Year

Current Year's Loss
7,456,611
21,167,485
10,768,612
34,142,708
18,225,223
154,845
Dividend Payment
10,500,000
Total
10,654,845
Retained Earnings
23,487,863
Suman Kumar Bohara
Anil Gyawali
Kapil Adhikari

12,975,223
Director
PREVIOUS YEAR Rs.
Total
Head-Accounts
THIS YEAR Rs.
Director
5,250,000
5,250,000
12,975,223
Chairman
Director
Mahesh Kumar Karki

Director

Accountants
189
Cash Flow Statement
PARTICULARS

1. Cash Received from Income
THIS YEAR Rs.
PREVIOUS YEAR Rs.
(26,999,123)
129,732,575
39,864,029
1.1 Income from Merchant Banking Operation
12,424,269
1.2 Interest Income

1.2 Other Income
2.1 Personnel Expenses
11,112,173
(26,423,317)
(14,690,627)
(9,466,230)
(6,646,989)
(7,039,035)

(3,588,246)
2.4 Income Tax Paid

1. (Increase)/Decrease in Available for Sale and Trading Investments
10,287,962
(4,296,050)
(71,014)
(6,329,806)
(3,676,574)
(58,856,151)
(5,236,448)
(58,856,151)
(5,236,448)
13,440,712
3,601,182
10,623,119
16,816,641
2. Cash Payment
25,001,317
18,416,316
10,310,690
124,658,333
3. Increase/(Decrease) in Borrowings
(2,000,000)
19,791,924
(22,576,168)
(1,179,520)
(2,496,921)
20,416,316
1. (Increase)/Decrease in HTM Investment
9,139,800
11,831,644
24,000,000
100,658,333
(23,600,000)
3,520,753
(10,500,000)
(5,250,000)
(10,500,000)
(5,250,000)
(17,707,199)
101,906,407
110,535,802
128,243,001
1. Increase/(Decrease) in Share Capital
2. Payment of Dividend
128,243,001
Suman Kumar Bohara
Anil Gyawali
Kapil Adhikari
Head-Accounts
Director

Director
26,336,594
Chairman
Director
Mahesh Kumar Karki

Director

Accountants
190
Nabil Bank Limited
Statement of Changes in Equity

Fiscal Year 2012/13 (2069/70)
Rs.
PARTICULARS
SHARE
Restated Balance
Net Gains and Losses not recognised in the Income Statement
TAX RESERVE
105,000,000
12,975,223
105,000,000

Cash Dividend
12,975,223
117,975,223
21,167,485
(10,500,000)
Available for Sale Reserve
105,000,000
TOTAL
AMOUNT
117,975,223
Closing Balance
AVAILABLE
FOR SALE RESERVE
21,167,485
Adjustments:
DEFERRED
EARNINGS
Share Capital Adjustment
RETAINED
CAPITAL
(154,845)
23,487,863
522,400
154,845
154,845
Share Capital
522,400
(10,500,000)
522,400
-
129,165,108
Schedule 1

PARTICULARS
1. Share Capital
1.1 Authorized Capital
1.2 Issued Capital

1.3 Paid Up Capital
1.4 Proposed Bonus Shares

1.5 Calls in Advance
THIS YEAR RS.
PREVIOUS YEAR RS.
200,000,000
200,000,000
150,000,000
150,000,000
105,000,000
105,000,000
200,000,000
150,000,000
105,000,000
200,000,000
105,000,000
105,000,000
191
Share Ownership
PARTICULARS
THIS YEAR RS.
PREVIOUS YEAR RS.
100.00
105,000,000
100.00
105,000,000
74.29
78,000,000
74.29
78,000,000
1.4 Other Entities
25.71
27,000,000
25.71
27,000,000
100.00
105,000,000
100.00
105,000,000
1. Local Ownership
1.1 Government of Nepal
1.3 Other Licensed Institutions

1.5 General Public
1.6 Others
2. Foreign Ownership
Total
Details of Shareholders Holding 0.5% Shares

S.N.
PARTICULARS
Nabil Bank Limited
2
3
CG Finco Pvt. Ltd.

General Public
THIS YEAR
Rs.
74.29
78,000,000
25.71
Reserves & Surplus
27,000,000
Schedule 2
PARTICULARS
2. Available for Sale Reserve
3. Retained Earnings
Total
THIS YEAR RS.
PREVIOUS YEAR RS.
154,845
522,400
23,487,863
24,165,108
Other Liabilities & Provisions
12,975,223
12,975,223
Schedule 3
PARTICULARS
1. Accounts Payable
2. Provision for Audit Expense
3. Provision for Expenses

5. Deferred Tax Liability
6. Short Term Loan
7. Others
Total
THIS YEAR RS.
PREVIOUS YEAR RS.
119,287,004
109,207,831
323,708
45,000
64,900
2,822,331
1,435,815
22,000,000
24,000,000
154,873,861
135,118,050
10,440,818
47,021
317,483
192
Nabil Bank Limited
Schedule 4
PARTICULARS
THIS YEAR RS.
PREVIOUS YEAR RS.
10,000
Current Account
(4,715,934)
10,000
2. Nabil Bank Limited
(7,208,372)
Cash Balance
Petty Cash Fund
1. Nepal Rastra Bank
3. Everest Bank Limited
10,000
617,987
143,808
6. Nabil Bank Limited - RTS
191,316
7. Civil Bank Limited
8. Commerz & Trust Bank Nepal Limited
9. Grand Bank Nepal Limited (Current A/c - PMS)
10. Janata Bank Nepal Limited (Current A/c - PMS)

11. Global IME Bank Limited (Current A/c - PMS)
12. Citizens Bank International Limited (Current A/c - PMS)
13. Clean Energy Development Bank Limited

Call Account
2. Pacific Development Bank Limited

3. Sanima Bank Limited
4. Nabil Bank Limited -RTS (SWBBL)

Bankers to the Issue Account
2. Mega Bank Nepal Limited

3. NMB Bank Limited
5. Civil Bank Limited
6. Sunrise Bank Limited
7. Century Commercial Bank Limited
8. Janata Bank Nepal Limited

9. Nepal SBI Bank Limited
10. Siddhartha Bank Limited
11. Global IME Bank Limited
12. Laxmi Bank Limited
13. Bank of Asia Nepal Limited

14. Nabil Bank Limited - MF
15. Nabil Bank Limited (Mega Bank Limited - IPO)

16. Kumari Bank Limited
17. Machhapuchhre Bank Limited
18. Nepal Investment Bank Limited

Total
35,392
4. Sunrise Bank Limited
5. NIDC Development Bank Limited
10,000
472,052
301,922
182,864
20,310
114,238
206,194
206,355
7,787,172
18,007,439
36,881
34,863
4,806,383
4,459,769
96,513
13,512,807
107,464,564
110,215,562
2,847,395
86,497,436
851,380
583,365
31,986
5,000
1,172,332
105,559,276
73,270
909,001
277,527
5,000
84,378
84,572
19,580
13,101
534,760
2,674,975
1,672,632
7,000
-
20,056
7,874,375
696,959
306,849
163,031
7,484,490
110,535,802
7,000
70,795
-
128,243,001
e. Depreciation on Writen Off Assets
Total (3+4+5+6)
6. Leasehold Assets
5. Pending Capitalization
4. Land
3. Book Value (WDV*) (1-2)
Total Depreciation
d. Depreciation on Sold Assets
b. For This Year
a. Up to Previous Year
2. Depreciation
Total Cost (a+b+c+d+e)
d. Sold during the Year
e. Write off during the Year
BUILDING
b. Addition during the Year
a. Previous Year Balance
1. Cost Price
PARTICULARS
Fixed Assets
2,226,622
2,226,622
1,026,505
556,655
469,850
3,253,127
3,253,127
VEHICLES
340,951
340,951
347,813
111,687
236,126
688,764
35,349
653,415
FURNITURE
ASSETS
1,326,251
1,326,251
1,956,272
622,058
1,334,214
3,282,523
502,798
2,779,725
COMPUTER &
OFFICE EQUIPMENT
947,630
947,630
349,377
182,561
166,816
1,297,007
474,600
822,407
SOFTWARE
1,297,750
1,297,750
OTHERS
6,139,204
1,297,750
4,841,454
3,679,967
1,472,961
2,207,006
8,521,421
1,012,747
7,508,674
TOTAL
THIS YEAR RS.
6,952,017
1,650,349
5,301,668
2,207,006
984,539
1,222,467
7,508,674
2,496,921
5,011,753
PREVIOUS YEAR RS.
Schedule 5
193
194
Nabil Bank Limited
Investments
Schedule 6
PARTICULARS
THIS YEAR RS.
PREVIOUS YEAR RS.
Fixed Deposits
12,875,000
8,000,000
8,000,000
4,875,000
8,000,000
-
Bonds & Debentures
85,507,600
99,000,000
2. 11% Siddhartha Bank Limited Debenture
15,000,000
15,000,000
1. 12.5% Nepal SBI Bank Limited Debenture

3. 10% Global Bank Limited Debenture
4. 8% Laxmi Bank Limited Debenture

5. Siddhartha Mutual Fund
6. Commerz & Trust Bank Nepal Limited- IPO

7. Nabil Balanced Fund I (Seed Capital)
8. NLG Insurance Company Limited - IPO
9. Mega Bank Nepal Limited - IPO

Total
60,000,000
60,000,000
24,000,000
552,000
1,646,400
7,500,000
78,300
730,900
98,382,600
Other Assets
107,000,000
Schedule 7

PARTICULARS
1. Deferred Tax Assets
2. Account Receivables
3. Advance Tax (Net of Tax Liability)

4. Deposit for Telephone
5. Advance Salary
6. Others
Total
THIS YEAR RS.
PREVIOUS YEAR RS.
154,845
30,485,692
6,330,282
112,000
12,000
3,599,013
-
34,629,813
68,981,363
Commission Income
4,526,901
-
29,072
10,898,255
Schedule 8

PARTICULARS
1. Issue Management Commission

2. Underwriting
3. Registrar to Issue
4. Portfolio Management Services

Total
THIS YEAR RS.
PREVIOUS YEAR RS.
6,853,731
2,133,809
633,878
1,477,326
3,459,334
12,424,269
210,000
1,257,373
3,601,182
195
Other Income
Schedule 9

PARTICULARS
1. Operational Support/Advisory Fees

2. Fund Management Fees (NBF I)
3. Depository Fees (NBF I)
4. Business Advisory
5. Miscellaneous Income
Total
THIS YEAR RS.
PREVIOUS YEAR RS.
9,981,575
10,161,472
925,994
2,777,982
511,200
2,619,890
16,816,641
Personnel Expenses
126,490
10,287,962
Schedule 10

PARTICULARS
1. Salary
2. Allowances
3. Contribution to Provident Fund

4. Overtime
5. Training Expenses
6. Uniform Expenses
7. Dashain Expenses
THIS YEAR RS.
PREVIOUS YEAR RS.
2,666,914
1,946,405
222,411
171,726
1,997,282
-
156,240
314,128
275,871
106,247
10. Leave Encashment
233,238
Total
55,000
8. Staff Insurance Premium

9. Contract Staff Expenses
1,280,588
8,000
5,603,220
75,916
150,281
239,023
4,296,050
196
Nabil Bank Limited
Schedule 11

PARTICULARS
THIS YEAR RS.
PREVIOUS YEAR RS.
226,245
114,551
50,000
45,000
4. Repairs & Maintenance
502,705
179,485
6. Electricity
205,162
131,844
8. Advertisement Expenses
256,306
449,335
10. Board Meeting Fees
100,000
60,000
1. Supplies and Stationeries
2. Communication Expenses
3. Expenses relating to Audit

a. Audit Fees
b. Other Expenses
5. Water
7. Janitorial
9. Insurance - Fire & Others

11. Professional Services - Others
12. Technical Management Service Fees

13. Fuel Expensses - Vehicle
14. Fuel Expensses - Generator
15. Newspapers/Periodicals/ Books
167,267
2,558
63,547
56,737
28,517
645,063
109,597
1,610
47,133
17,373
57,717
720,060
3,873,100
3,577,202
267,156
76,529
354,508
18,021
188,293
13,349
16. Tea, Coffee & Snacks
255,014
123,526
18. Other Taxes & Fees (SEBON)
425,000
246,869
1,236,564
383,574
8,421
11,716
17. Membership Fees
19. Vehicle Registration & Renewal

20. Contract Service Expenses
21. Miscellaneous Expenses
22. AGM Expenses
23.Travelling Expenses
24. AMC Charges
25. Bank Charges

Total
70,000
58,615
51,202
144,475
354,477
45,570
9,466,230
20,000
36,980
31,285
2,780
-
1,181
6,646,989
197
Significant Accounting Policies
1. CORPORATE INFORMATION
Nabil Investment Banking Limited (Nabil

Invest) is a limited liability Company,
incorporated on 7th February, 2010 and
domiciled in Nepal. It is a licensed Merchant
Bank as a subsidiary of Nabil Bank Ltd. with
CG Finco Pvt. Ltd. as its Institutional
shareholder, licensed under Securities
Businessperson (Merchant Banker) Rules,
2064 from the Securities Board of Nepal
(SEBON). The registered address of Nabil
Invest is Kathmandu, Nepal.
2. APPROVAL OF FINANCIAL
STATEMENTS BY THE BOARD
OF DIRECTORS
The Financial Statements for the year ended

on 15th July, 2013 was approved for
issuance by the Board of Directors on
September 15, 2013
3. PRINCIPAL ACTIVITIES
AND OPERATIONS
Nabil Invest obtained license for commercial

operation as a Securities Businessperson
(Merchant Banker) from SEBON on May 26,
2010. The major activities of the Company
are issue management, portfolio management
services, underwriting of securities, securities
trustee, registrar to shares, fund management
& depository services in a mutual fund,
depository participant services in a central
depository services, corporate advisory
services, provide allied support services etc.
ISSUE MANAGEMENT
During the review period, the Company, as
joint issue manager, entered into Agreements
with four commercial banks for managing
their IPOs. Of these, IPO of the following
three banks were successfully managed:
Civil Bank Limited
Commerz and Trust Bank Nepal Limited
Mega Bank Nepal Limited
IPO of Century Commercial Bank Limited is

in the process of approval with SEBON and is
targeted to be completed by second quarter
of coming fiscal year.
Further, the Company was able to
successfully manage the debenture issues of
the following Commercial Banks:
8% Laxmi Bank Limited Debentures
8% Everest Bank Limited Debentures
The Company was awarded Debenture issue
management job of the following Commercial
Banks which was underway till the end of the
review period:
8% Nepal Investment Bank Limited
Debentures
8% Everest Bank Limited Debentures
Schedule 12
All the above issues were oversubscribed.

Hence, the Company did not incur any
financial liability towards its underwriting
commitment. However, the IPO of Century

Commercial Bank is yet to hit the market.
REGISTRAR TO SHARES (RTS) &
DEPOSITORY PARTICIPANT (DP) SERVICES:
The Company started rendering RTS from its
Anamnagar premises in the review period. In
F.Y. 2069-70, the Company entered into
Agreements and started rendering RTS
services to the following Companies:
Nabil BanK Limited
Swabalamban Laghubitta Bikas Bank
Limited
The Company also obtained the DP license
from SEBON and took the membership of
CDS and Clearing Limited in order to provide
DP services to its clientele. The required
logistics and infrastructure have been
prepared at Anamnagar premises of the
Company to render the said services and we
target to render full fledged services in
coming FY once CDSC renders its full scale of
operations.
UNDERWRITING
The Company entered into Agreements to
undertake the underwriting commitment of
the IPOs of the following Commercial Banks:
COMMERCIAL BANKS
UNDERWRITING AMOUNT (RS.)
Civil Bank Limited
66,666,667 (666,667 shares of Rs.100 each)
Mega Bank Nepal Limited
90,000,000 (900,000 shares of Rs.100 each)
Commerz and Trust Bank Nepal Ltd.

Century Commercial Bank Limited
94,000,000 (940,000 shares of Rs.100 each)

62,500,000 (625,000 shares of Rs.100 each)
198
Nabil Bank Limited
PORTFOLIO MANAGEMENT SERVICES (PMS)

PMS is a professional service offered by
Portfolio Managers to their Clients to help
them manage their wealth professionally. The
Portfolio Manager manages the assets of the
Client considering their investment goals and
risk appetite. As managing investments
requires time, knowledge, experience and
constant monitoring, investors who lag these
aspects seek the support of professional
Portfolio Managers.
The Company provides the following services
to the investors under PMS:
Discretionary Portfolio Management Services
Non Discretionary
Portfolio Management Services
Advisory Services
Administrative Services
Customized Portfolio Management Services
The size of the total Assets under Management
(AuM) has reached NRs. 616,595,480 at the
end of the review period. Out of the total size,
NRs 574,876,129 constitutes the guaranteed
returns portfolio.
FUND MANAGEMENT & DEPOSITORY
SERVICES TO NABIL MUTUAL FUND
The Sponsor Nabil Bank appointed Nabil
Invest, an institution licensed by SEBON
render Fund Management services to the
schemes of Nabil Mutual Fund. During the
review period, the Company as the Fund
Manager successfully launched Nabil
Balanced Fund I under the Nabil Mutual
Fund, Due to the overwhelming response
from the market, the issue was highly
oversubscribed and hence 75 million units of
NPR 10 each were allotted against the issue
size of 60 million units of NPR 10 each as
per the prevailing Mutual Fund Regulation.
The Company has also been rendering
Depository services to the unit holders of Nabil
Balanced Fund I as per its license obtained
from SEBON & in line with the provisions of
prevailing regulations on mutual funds.
CORPORATE ADVISORY SERVICES

The Company has already prepared the
Product Papers and SIM to launch Corporate
Advisory Services like Loan Syndication and
Merger & Acquisition Advisory Services. The
Company is exploring business opportunities
in these new areas and reached a few
institutions in order to provide such services.
The process is positively moving ahead and
probably would materialize in the coming FY.
In addition, the Company also provided
advisory services to few institutions in the
form of Investment Advisory and Business
Valuation Reports.
OTHER SUPPORT SERVICES
The Company continued rendering its
operational support services to Nabil Bank in
their bullion operations in coordination with
Treasury & the Branches of the Bank.
4. RESPONSIBILITY FOR
FINANCIAL STATEMENTS
The Board of Directors of the Company is

responsible for the preparation of financial
statements. The Board of Directors
acknowledges this responsibility as set out in
the Annual Report of the Board of Directors.
These financial statements include the
following components:
a. a Balance Sheet disclosing the information
on financial position of Nabil Invest;
b. an Income Statement disclosing the
financial performance of Nabil Invest for
the period under review;
c. a Statement of Changes in Equity showing
all changes in equity of Nabil Invest;
d. a Cash Flow Statement disclosing the
information on the ability of Nabil Invest to
generate cash and cash equivalents; and
e. Notes to the Financial Statements
comprising a summary of principal
accounting policies and other relevant
explanatory notes.
5. STATEMENT OF COMPLIANCE
The Financial Statements which comprises

components mentioned above have been
prepared in accordance with Nepal Accounting
Standards (NAS) pronounced by the Institute
of Chartered Accountants of Nepal and in
compliance with Companies Act, 2007.
6. BASIS OF PREPARATION
The Financial Statements are presented in

Nepalese Rupees (NRs) and are prepared on
historical cost basis. Preparation of financial
statements in conformity with NAS and GAAP
requires the use of certain critical accounting
estimates and also requires management to
exercise judgement in the process of applying
Nabil Invests accounting policies.
7. SUMMARY OF PRINCIPAL
ACCOUNTING POLICIES
The principal accounting policies adopted by

the Board of Directors are presented below.
8. INCOME RECOGNITION
A. INCOME FROM INVESTMENTS

Interest earnings on fixed deposits, call
deposits and bonds and debentures are
recognised on accrual basis.
Dividend on share investments is
recognised as and when the right to
receive is established.
B. FEE INCOME
Issue Management Income is recognised
when the issue management services are
fully rendered.
Underwriting Commission is recognised
when the Issuing Company complies with
all the terms of underwriting commitment
Agreement.
Portfolio / Assets Management Income is
recognised when the contract with the
Client for the Portfolio Management
Service is executed.
Bond / Debenture Trusteeship Income are
accounted for on accrual basis when the
Trust Deed provides lump sum fee
covering period more than 1 year, it shall
be accounted on pro-rata basis.
199
Income with respect to advisory services

are recognised:
- after the services are fully rendered, if
the right to receive the fee is subject to
the fulfilment of terms of advisory
services,
- on accrual basis, if the right to receive
the fee is established after elapse of a
time.
Income from facilitation services to Banks
customers for securities is recognised after
the transactions are executed.
Loan Syndication Fee is recognised after
the loan syndication services are rendered.
Fee from Business Outsourcing Services
are recognised:
- after the services are fully rendered, if
the right to receive the fee is subject to
the fulfilment of terms of business
outsourcing services,
- on accrual basis, if the right to receive
the fee is established after elapse of a
time.
Fee from Cross Sale Services are
recognised when the cross selling services
are rendered.
Commission on ETF is accounted for as
and when contract for ETF is executed.
C. GAINS / LOSSES ON TRADING AND
AVAILABLE FOR SECURITIES (SELL)
Gains and losses arising from trading are
recognised after the securities are sold
while gains and losses arising from
revaluation are recognised on daily basis.
9. EXPENSE RECOGNITION
A. INTEREST ON BORROWINGS
Interest expenses on borrowings are
accounted for on accrual basis.
Interest assured on funds received for
Portfolio Management are accounted for
on accrual basis.
B. STAFF BONUS
Provision for staff bonus is provided for as
per the Bonus Act, 1974.
10. INVESTMENTS
A. The investments held by Nabil Invest are

classified under 3 categories:
Investments Held for Trading:
These are marketable investments and
held with the primary intention of resale
over a short period of time. These
investments are initially measured at cost
and subsequently accounted at market
value.
Investments Available for Sale:
These are investments held with the
primary intention to recover value of
investments through sell rather than
continuing to hold. These investments are
initially measured at cost and
subsequently accounted at market value.
Investments Held Till Maturity (HTM):
These investments are primarily intended
to be held till maturity and are valued at
cost and carried at these values in the
Balance Sheet till maturity. Any
impairment losses arising in such
investments are provisioned and charged
in the Income Statement. Premiums paid
while acquiring HTM Investments shall be
recognized as the part of initial cost and
subsequently amortized on proportionate
basis till maturity.
B. Investments in unlisted companies are
initially stated at cost and carried at these
values in the Balance Sheet. Any
impairment losses arising in such
investments are provisioned and charged
in the Income Statement. Nabil Invest
recognizes equity method to calculate
impairment losses on unlisted
investments.
11. FIXED ASSETS AND

DEPRECIATION
A. Fixed assets are stated at cost less

accumulated depreciation.
B. Depreciation is charged to Income
Statement on Written Down Value method
over the estimated useful lives of the fixed
assets. The depreciation rates applied for
various asset categories are as follows:
NATURE OF ASSETSDEPRECIATION RATE
ESTIMATED USEFUL LIFE
Furniture
25%
15 years
Vehicles
20%
7 years
Equipments
Computers
Building
25%
40%
5%
Leasehold Items 20% (Straight Line)
15 years
5 years
50 years
5 years
C. In case of fixed assets purchased during

the year and booked for more than one
month, depreciation is charged from the
subsequent month of booking. Depreciation
on fixed assets sold or disposed off during the
year is charged to the previous month after
(after or previous) of such disposal.
D. Leasehold improvements are amortized
over the period of lease.
E. Cost of computer software licences are
capitalised and are amortized over a period of
useful life of the software, estimated as 5
years from the date of acquisition.
F. Non-consumable items having life less than
one year and/or costing less than NRs. 5,000
are expensed off during the year of purchase.
12. CONTINGENT LIABILITIES
All types of guarantees & claims whose future

outcome cannot be ascertained with
reasonable certainty is recognized as
contingent liabilities in accordance with NAS
12 Provisions, Contingent Liabilities and
Contingent Assets.
200
Nabil Bank Limited
13. STATIONERY STOCK
Stationery purchased are charged to revenue

at the time of consumption and valued at
average cost basis.
14. INCOME TAXES
A. Provision for current tax is made based on

the provisions of the Income Tax Act, 2058
and amendments thereto.
B. Deferred tax is recognized and provided for

on the timing differences between taxable
income and accounting income.
C. Deferred tax assets are not recognised
unless there is a virtual/reasonable certainty
that there will be sufficient future taxable
income available to realize such assets.
Deferred tax assets & liabilities are netted off
and presented either under Other Assets or
under Other Liabilities'.
D. The equivalent amount of outstanding

Deferred Tax Assets is earmarked under
Deferred Tax Reserve in order to make the
accounting policy uniform with the
accounting policy of Nabil Bank Limited, the
parent Company.
201
Notes to Accounts
Schedule 13
1. PAID UP CAPITAL
The issued and paid up capital of the Company is NRs.150 Million and NRs. 105 Million
respectively. The remaining portion of the issued capital shall be issued by the Company in future in
such a manner as the Board of the Company deems appropriate. Out of paid-up capital of NRs.105
Million, Nabil Bank Limited holds NRs.78 Million while the balance of NRs.27 Million is held by
CG Finco Pvt. Ltd.
2. INCOME TAX AND DEFERRED TAX
The tax liability of the Company for the review period is NRs. 7,257,694.25, detailed as under:
PARTICULARS
CURRENT YEAR
Accounting Net Profit Before Tax
28,223,312
Tax Rate
25%
Tax on Accounting Profit
7,055,828
Current Tax
7,257,694
Deferred Tax Income
201,866
Deferred tax income of NRs. 201,866 has been recognised in the income statement this year on the
taxable temporary difference arising due to charge of depreciation and on creating provision for
Leave Encashment as shown hereunder:
Deferred Tax of Previous Year
ITEMS
CARRYING AMOUNT
TAX BASE
TAXABLE
TEMPORARY
DIFFERENCES
6,952,017
6,622,044
329,973
141,889
Fixed Assets
Provision for
Leave Encashment
Total
DEDUCTIBLE
TEMPORARY
DIFFERENCES
DEFERRED TAX
LIABILITY /
(ASSETS)
82,493
329,973
(141,889)
(141,888)
(35,472)
DEDUCTIBLE
TEMPORARY
DIFFERENCES
DEFERRED TAX
LIABILITY /
(ASSETS)
47,021
Calculation of Deferred Tax -This Year

ITEMS
CARRYING AMOUNT
TAX BASE
TAXABLE
TEMPORARY
DIFFERENCES
6,139,204
6,434,875
(295,671)
323,708
Fixed Assets
Provision for
Leave Encashment
Total
Deferred Tax Income Recognised in the review period is Rs. 201,866.00
(323,708)
(619,379)
(73,918)
(80,927)
(154,845)
202
Nabil Bank Limited
3. RELATED PARTIES DISCLOSURES

A. THE COMPANY HAS THE FOLLOWING RELATED PARTIES:
NAME
RELATIONSHIP
Nabil Bank Limited
Holding Company
CG Finco Pvt. Limited
An Associate Company
The Company has entered into following transactions with its related parties during F.Y.2069/70:
RELATED PARTY
TRANSACTIONS
AMOUNT
Nabil Bank Limited
Balance in Call Account
Closing Balance NRs. 110,542,740.01
Nabil Bank Limited
Interest Income on Call &
Nabil Bank Limited
Nabil Bank Limited
Nabil Bank Limited

Nabil Bank Limited
Balance in Fixed Deposit

Fixed Deposit Accounts
Proceeds realised for rendering

operational support assistance
Closing Balance NRs. 8,000,000

NRs. 3,472,174.84
for the Bank
NRs.9,981,575.02
(SLA) Fees paid
NRs.5,00,000
Fee paid
NRs.3,873,099.89
Service Level Agreement

Technical Management Service
B. KEY MANAGEMENT PERSONNEL

Key Management Personnel of Nabil Invest includes
the Board of Directors and the Chief Executive Officer:
Mr. Anil Gyawali - Chairman
Mr. Krishna Dutta Bhattarai - Director
Mr. Kapil Adhikari - Director
Mr. Krishna Kumar Pradhan - Independent Professional Director
Mr. Mahesh Kumar Karki - Independent Professional Director
Mr. Pravin Raman Parajuli - Chief Executive Officer/Company Secretary
C. COMPENSATION TO KEY MANAGEMENT PERSONNEL OF NABIL INVEST
The total employee benefits paid to Mr. Pravin Raman Parajuli in the capacity as Chief Executive
Officer of Nabil Invest in the review period amounts to NRs.1.91 Million.
D. TRANSACTION WITH KEY MANAGEMENT PERSONNEL OF THE BANK
The Board of Directors representing the Bank & CG.Finco Pvt. have decided not to accept any
meeting fees until otherwise decided at a later stage. However, this decision does not apply to the
Professional Independent Directors. The Company has paid NRs.100,000 to its Professional
Independent Directors as meeting fee during the review period. The Company does not provide any
other financial benefits to its Board of Directors except meeting fee to the Professional Independent
Director.
203
4. USAGE OF NABIL BANKS

INFRASTRUCTURE
5. BORROWING
b.The Company has been using the premises of Nabil Bank at

Chabahil and Anamnagar. The Company has reimbursed
NRs.1,127,388 i.e. the rental cost of the premises used by
the Company as per the provisions of Management Service
Agreement (MSA), entered between Nabil Bank & the
Company, to the Bank on actual cost basis.
6. INVESTMENTS
a.The Company has entered into Service Level Agreement

(SLA) with Nabil Bank under which the Company receives
services of the Bank in areas like Administration, Operations,
Accounts, Finance & Planning, Information Technology,
Clearing & Settlement, Human Resources, Legal, Treasury etc.
at an annual fees of NRs. 5,00,000.
c.The Company has been receiving services from two staffs

deputed by the Bank including the CEO of the Company.
During the year, the Company has reimbursed
NRs.2,745,712 to the Bank as fees paid on actual cost basis
for the deputed staffs as per the provisions of Management
Service Agreement (MSA) entered between Nabil Bank & the
Company.
The Company has borrowed NRs. 22 Million against the

pledge of "12.5% Nepal SBI Debenture 2078" worth NRs. 60
Million. Further, the Company has obtained an Overdraft
Facility of NPR 7.6 Million from Nabil Bank Limited against
the pledge of banks own FD receipt worth NPR 8 Million.
Out of the approved limit, the actual utilization as on Ashadh
End 2070 (15 July, 2013) stands to be NPR 7.21 Million.
The investments of Company constitute investments in
Debentures, Time Deposits, Mutual Fund Units and Equity
Shares purchased through IPO. Some of these investments
have been made with objective of holding them till maturity
for regular returns and hence valued at cost. The investments
in equity shares through IPO shall be sold once they are listed
with NEPSE and upon receipt of reasonable targeted returns.
Such investments have been classified under Available for
Sale Category and valued at fair value that is market price as
on Balance Sheet date in case of shares which are listed with
NEPSE. In case of shares which are not listed till the Balance
Sheet date, they are valued at cost. The Company does not
hold any investments which are classified as Held for Trading.
204
Nabil Bank Limited
The details of investments of the Company as on Balance Sheet date is as follows;

PARTICULARS
COST PRICE, NRS.
MARKET VALUE, NRS
12,875,000
12,875,000
4,875,000
4,875,000
75,000,000
75,000,000
60,000,000
60,000,000
15,000,000
15,000,000
Capital (750,000 units @ Rs. 10 each) 7,500,000
7,545,000
Held to Maturity Investments

Fixed Deposits
8,000,000

Bonds/ Debentures
1. 12.5% Nepal SBI Bank Limited

Debenture (60,000 Units
@ Rs. 1,000 each)
2. 11% Siddhartha Bank Limited

Debenture (15,000 Units
@ Rs. 1,000 each)
Mutual Fund Units
7,500,000
1. Nabil Balanced Fund I -Seed

Total
MARKET PRICE AS
ON ASAR END 2070, NRS.
8,000,000
7,545,000
95,375,000
95,375,000
2,485,200
3,007,600
500,000
552,000
Rs. 11.04
- IPO (11,760 Units @ Rs. 100 each) 1,176,000
1,646,400
Rs. 140
78,300
Not Listed
730,900
Not Listed
Available for Sale Investments
Equity Shares and Mutual Fund Units

1. Siddhartha Mutual Fund
(50,000 units @ Rs.10 each)

3. NLG Insurance Company Ltd. - IPO
(783 Units @ Rs. 100 each and bonus

shares 157 Units - total 940 Units)
4. Mega Bank Nepal Limited IPO
(7,309 Units @ Rs. 100 each)
Total
Total Investments
78,300
730,900
2,485,200
97,860,200
3,007,600
98,382,600
7. INTEREST INCOME
The Company has earned total interest income of NRs. 22,454,763 which includes NRs.
13,269,397 earned from placement of subscription amount raised from public offers with Bankers
to the Issue and NRs. 13,269,397 received from Investment on Debentures and Bank Deposits.
8. PROPOSED DIVIDEND
The Board of Directors of the Company has decided to propose 15 percent of cash dividend for
approval in its forth coming Annual General Meeting.
9. PREVIOUS YEAR'S FIGURES HAVE BEEN REGROUPED/REARRANGED

WHEREVER NECESSARY.
205
AWARDS
WINNER
National Best Presented
Accounts Award, 2009
WINNER
Mr. Krishna Dutta Bhattarai, Chief

Finance Officer of Nabil Bank Limited
receiving the prestigeous BPA Award
2012 from Honorable Finance Minister
Mr. Shankar Prasad Koirala
WINNER
Mr. Anil Gyawali, Chief Executive Officer of

Nabil Bank Limited receiving the Peoples
Excellence Award 2013 from Rt. Honorable
President Dr. Ram Baran Yadav
Highest Tax Payer Award

among banking and financial
institution category for year
2010/11
206
Nabil Bank Limited
OFFICE NETWORK
1. KANTIPATH BRANCH
Kantipath, Kathmandu
Phone: 01-4239204, 01-4239205
Fax: 01-4239203
P.O. Box no.: 3729, Kathmandu
2. TRIPURESHWOR BRANCH
UWTC Building, Tripureshwor, Kathmandu
Phone: 01-4117014/15/16/17
Fax: 01-4117018
P.O. Box no.: 3729, KTM
3. NEW ROAD BRANCH
New Road, Kathmandu
Phone: 01-4224592, 01-4224533, 014225420
Fax: 01-4224837
NABIL BANK LTD. Nabil Center

HEAD OFFICE Beena Marga, Durbar Marga, Kathmandu, Nepal
Tel: 01-4221718, 01-4227181, Fax: 01-4226905
SWIFT: NARBNPKA
Email: info@nabilbank.com
www.nabilbank.com
12. POKHARA BRANCH

Dipendra Sabha Griha, New Road, Pokhara,
Kaski
Phone: 061-525715, 061-532951
Fax: 061-525203
P.O. Box no.: 442, Pokhara
13. BHAIRAHAWA BRANCH
Narayanpath, Bhairahawa, Rupandehi
Phone: 071-524041
Fax: 071-524141
P.O. Box no.: 18, Butwal
14. NEPALGUNJ BRANCH
Dhamboji, Nepalgunj, Banke
Phone: 081-524221
Fax: 081-524222
P.O. Box no.: 22, Nepalgunj
4. JORPATI BRANCH
Jorpati, Kathmandu
Phone: 01-4917498, 01-4917569
Fax: 01-4917343
15. LAKESIDE BRANCH

Lakeside, Pokhara, Kaski
Phone: 061-464268
Fax: 061-461969
P.O. Box no.: 442, Pokhara
5. BIRGUNJ BRANCH
Aadarsha Nagar, Birgunj, Parsa
Phone: -051-521476, 051-521746, 051530723
Fax: 051- 523156
P.O. Box no.: 73, Birgunj
16. DHARAN BRANCH

Mahendrapath, Dharan, Sunsari
Phone: 025-530130, 025-530621
Fax: 025-530131
P.O. Box no.: 208, Biratnagar
6. POWER HOUSE CHOWK BRANCH

Shreepur, Birgunj, Parsa
Phone: 051-525449, 530216
Fax: 051-528680
P.O. Box no.: 73, Birgunj
7. BIRATNAGAR BRANCH
Goshwara Road, Biratnagar, Morang
Phone: 021-526213, 021-522752, 021525372, 021-526214
Fax: 21-524800
8. LALITPUR BRANCH
Kupoundol, Kathmandu
Phone: 01-5542891, 01-5520431, 015532189
Fax: 01-5542890
9. ITAHARI BRANCH
Main Road, Itahari, Sunsari
Phone: 025-580741, 01-581400
Fax: 025-581054
10. BUTWAL BRANCH
Main Road, Butwal, Rupandehi
Phone: -071-541059, 071-542274
Fax: 071-541210
11. BHALWADI BRANCH
Bhalwadi, Rupandehi
Phone: 071-560357, 071-561357
Fax: 071-560957
17. MAHARAJGUNJ BRANCH

Maharajgunj, Kathmandu
Phone: 01-4720870/71, 01-4720875/77
Fax: 01-4720844
18. BIRTAMODE BRANCH
Hicola Road, Anarmani, Jhapa
Phone: 023-543727
Fax: 023-543400
19. DAMAK BRANCH
Main Highway Road, Damak, Jhapa
Phone: 023- 585190/91
Fax: 023-585192
20. HETAUDA BRANCH
Bank Road, Hetauda, Makwanpur
Phone: 057-524667/689
Fax: 057-524690
21. NARAYANGARH BRANCH
SahidChowk, Narayangarh, Chitwan
Phone: 056-523033, 056-532487
Fax: 056-523034
22. TULSIPUR BRANCH
Sitalpur Road, Tulsipur, Dang
Phone: 082-522673/74
Fax: 082-522672
23. GHORAHI BRANCH
Ganesh Hall Road, Ghorahi, Dang
Phone: 082-561685/86
Fax: 082-561687
24. BAGLUNG BRANCH
Mahendrapath, Baglung, Baglung
Phone: 068-522193/94
Fax: 068-522195
25. DHANGADI BRANCH

Main Road, Dhangadi, Kailali
Phone: 091-526681/85
Fax: 091-526682
26. MAHENDRANAGAR BRANCH
Mahendranagar, Kanchanpur
Phone: 099-525450, 099-525431
Fax: 099-525601
P.O. Box no.: 16, Kanchanpur
27. NEW BANESHWOR BRANCH
New Baneshwor, Kathmandu
Phone: 01-4485212, 4492125
Fax: 01-4490882
28. HALCHOWK BRANCH
Halchowk, Kathmandu
Phone: 01-4033553/54
Fax: 01-4033552
29. THAMEL BRANCH
Thamel, Kathmandu
Phone: 01-4212167, 01-4212606
Fax: 01-4238543
30. KAUSHALTAR BRANCH
Kaushaltar, Bhaktapur
Phone: 01-6635184, 01-6635460
Fax: 01-6635199
31. CHABAHIL BRANCH
Chabahil, Kathmandu
Phone: 01-4464470, 4461895
Fax: 01-4464469
32. MAITIDEVI BRANCH
Maitidevi, Kathmandu
Phone: 01-4439488, 01-4443706
Fax: 01-4434045
33. BALAJU BRANCH
Balaju, Kathmandu
Phone: 01-4388915, 01-4388916
Fax: 01-4388918
34. KULESHWOR BRANCH
Kuleshwor, Kathmandu
Phone: 01-4287576, 01-4287596
Fax: 01-4287547
35. SATDOBATO BRANCH
Satdobato, Lalitpur
Phone: 01-5550332
Fax: 01-5548766
36. CHARIKOT BRANCH
Bhimeshwor, Charikot, Dolakha
Phone: 049-421882, 049-421883
Fax: 049-421887
37. KHADBARI BRANCH
Khadbari, Sankhuwasabha
Phone: 029-560874/84/85
Fax: 029-560883
38. DHULIKHEL BRANCH

Dhulikhel, Kavre
Phone: 011-490730, 011-490731
Fax: 011-490732
39. GORKHA BRANCH
Gorkha, Gorkha
Phone: 064-421529
Fax: 064-421530
40. BESHISAHAR BRANCH
Beshisahar, Lamjunj
Phone: 066-520805, 066-520806
Fax: 066-520807
41. CHANDRAGADHI BRANCH
Chandragadhi, Jhapa
Phone: 023-457021, 023-457022
Fax: 023-457023
42. DHAPASI BRANCH
Dhapasi, Kathmandu
Phone: 01-4384990, 01-4384991
Fax: 01-4384855
43. ANAMNAGAR BRANCH
Anamnagar, Kathmandu
Phone: 01-4249884, 01-4245274
Fax: 977-1-4250339
44. GWARKO BRANCH
Gwarko, Kathmandu
Phone: 01-5541590, 5554190
Fax: 01-5538190
45. ATTERKHEL BRANCH
Atterkhel, Kathmandu
Phone: 01-4912990, 4912991
Fax: 01-4912992
46. SINAMANGAL BRANCH
Sinamangal, Kathmandu
Phone: 01-4110852, 4110851
Fax: 01-4110850
47. TEENDHARA BRANCH
Teendhara, Kathmandu
Phone: 01-4227181, 01-4221718
Fax: 01-4226905, 4241808
48. JANAKPUR BRANCH
Dhanusa, JanakpurDham
Phone: 041-528706, 528709
Fax: 041-528708
49. EXTENSION COUNTER
Kathmandu Metropolitan City Office
Baghdurbar, Kathmandu
Phone: 01-4216070
P.O.Box No.: 3729, KTM
50. EXCHANGE COUNTER
Pokhara Airport, Pokhara
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Mahendranagar (1)
Dhangadi (1)
Tulsipur (1)
Nepalgunj (1)
Pokhara (2)
Baglung (1)
Beshisahar (1)
Gorkha (1)
Ghorahi (1)
Butwal (1)
Bhalwadi (1)
Bhairahawa (1)
Charikot (1)
Narayanghdh (1)
Kathmandu (17)
Lalitpur (3)
Dhulikhel (1)
Khandbari (1)
Bhaktapur (1)
Hetauda (1)
Dharan (1)
Birgunj (2)
Janakpur (1)
Itahari (1)
Biratnagar (1)
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Annual Report 69-70 - 20140305122025

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ANNUAL REPORT 2012/13

ANNUAL REPORT 2012/13

DESIGN & PRINT PROCESS:

TheSquare Design Communication Pvt. Ltd.

PARTNERSHIP ON A LONG JOURNEY

the country the Bank has developed

institutions and individuals and has

manifold, enriching every relationship,

complementing each others progress.

Nabil Bank Limited

Analysis of key items of Statement

The Board of Directors

Analysis of key items of Income Statement of past 5 years

Segmental performance of the Bank

Interim position and performance (unaudited)

Corporate Social Responsibility 66

3 PRODUCT & SERVICES

About Nabil Bank

Vision, Mission and Value Statement

The Board of Directors

Investment Banking / Merchant Banking

ANNUAL REPORT 2012/13

Annual general meeting

Shareholder enquiries and communication

Disclosure of information under Section 109(4) of Companies Act 2006

independent Auditors Report

Financial Statements with Schedules

Information under section

Financial Statements with Schedules

Bancassurance Division for risk as well as

journey of glorious 29 years; however

CHRONOLOGY OF BRANCH EXPANSION IS PRESENTED AS UNDER

Nabil Bank Limited

At Nabil, our Vision is to be a bank for

We at Nabil work together up to our vision

We surge to turn our services and products

ANNUAL REPORT 2012/13

TOTAL OPERATING INCOME

NET PROFIT AFTER TAX

GROSS LOANS AND ADVANCES

Growth Rate of 2012/13: 31%

Growth Rate of 2012/13: 15%

Nabil Bank Limited

AVERAGE RETURN ON ASSETS

CREDIT TO DEPOSIT RATIO

CAPITAL ADEQUACY RATIO

GROSS NPA RATIO

NET NPA RATIO

CLOSING PRICE IN NEPSE

DIVIDEND PER SHARE

EARNINGS PER SHARE

Nabil Bank Limited

ANNUAL REPORT 2012/13

We achieved good growth and we were

vendors for implementation of 2 factor

We will maintain the best governance

Krishna Bahadur Manandhar

Nabil Bank Limited

ANNUAL REPORT 2012/13

SENIOR DIRECTORS MESSAGE

Modern banking in Nepal started after the

sector. Such a public confidence has given