2014-2015 Kumari Bank Annual Report

CONTENTS
4 Introduction
6 Chairman’s Message
8 Board of Directors
9 Board of Director’s Report for 15th AGM
22 ACEO’s Message
24 Management Team
27 Product Review
30 CSR Activities & SME Financing
33 Auditor’s Report
35 Schedules
76 Significant Accounting Policies
79 Notes to Account
93 Disclosure as per Basel II
97 ATM Locations
98 Branches
INTRODUCTION
Kumari Teller Counter at Durbarmarg Branch
Kumari Bank Limited, came into existence as the fifteenth particular branch. Similarly the bank has been providing 365
commercial bank of Nepal by starting its banking operations days banking facilities, extended banking hours till 7 PM in
from Chaitra 21, 2057 B.S (April 03, 2001) with an objective the evening, Utility Bill Payment Services, Inward and Outward
of providing competitive and modern banking services in the Remittance services, Online remit Services and various other
Nepalese financial market. The bank has paid up capital of banking services.
NPR 2,699,166,532 of which 51% is contributed from pro-
moters and remaining from public. Visa Electron Debit Card, which is accessible in entire VISA
linked ATMs (including 46 own ATMs) and POS (Point of Sale)
Kumari Bank Ltd has been providing wide - range of modern terminals both in Nepal and India, has also added convenience
banking services through 38 points of representations located to the customers. The bank has been able to get recogni-
in various urban and semi urban part of the country, 36 tion as an innovative and fast growing institution striving
branches outside and inside the valley; and 2 extension to enhance customer value and satisfaction by backing
counters. The bank is pioneer in providing some of the latest transparent business practice, professional management,
/ lucrative banking services like E-Banking and SMS Banking corporate governance and total quality management as the
services in Nepal. The bank always focus on building sound organizational mission.
technology driven internal system to cater the changing
needs of the customers that enhance high comfort and The key focus of the bank is always center on serving unful-
value. The adoption of modern Globus Software, developed filled needs of all classes of customers located in various parts
by Temenos NV, Switzerland and arrangement of centralized of the country by offering modern and competitive banking
4
data base system enables customer to make highly secured products and services in their door step. The bank always
transactions in any branch regardless of having account with prioritizes the priorities of the valued customer.
4 | Kumari Bank | Annual Report 2015-2016

MISSION
Our mission is to deliver innovative products
and services to our customers, use these inno-
vative products to achieve financial inclusion,
and do so by exemplifying good corporate gov-
ernance, proactive risk management practices,
and superior corporate social responsibility.
VISION
Our vision is to be the preferred financial partner
to our customers, a center of career growth to
our employees, and to maximize our sharehold-
ers’ value, while contributing to our nation’s
financial sector and to its economic welfare.
Kumari Bank | Annual Report 2015-2016 | 5

6

CHAIRMAN’S MESSAGE
Dear Shareholders, of services by operating Kumari Swastha Jeevan

Bachat Khata, Kumari Remit Bachat Khata and
It gives me immense pleasure to place before Personal Loans and advances. Moving forward,
you the highlights of your Bank’s performance we anticipate your continued support and
during the financial year 2014-15. Details of the patronage to encourage us to accomplish in
achievements and initiatives taken by your Bank order to become one of the leading financial
are provided in the enclosed Annual Report for service providers in the country.
the year 2014-15.
The 14th Annual General Meeting of the Bank
I take this opportunity to impart you that the bank has proposed its plan for merger with Banks
has announced 11% bonus share and 0.58% and Financial Institutions in order to raise the
cash dividend for tax purpose, as proposed by paid up capital to NPR 8 billion in line with the
the Board of Directors. Central Bank requirement. Consequently, banks
including Nepal Credit and Commerce Bank Ltd.,
In the review period, the Bank has achieved Infrastructure Development Bank Ltd., Apex
growth in deposits and loans by 21.19% and Development Bank Ltd., Supreme Development
18.69% respectively to NPR 33.42 billion and Bank Ltd. and International Development Bank
NPR 27.07 billion respectively as compared to the Ltd. signed an MOU for merger on Poush 29, 2072
previous fiscal year. In this period, bank’s net profit and Letter of Interest has already been obtained
has increased by 15.55%. With past experiences, from NRB. Charter Accountant Firm P.Y.C. and
teamwork and taking up right strategies by the Associates have been appointed for the Due
management, the Bank shall strive to perform Diligence Audit to decide on the swap ratio.
better in the days to come.
Finally, I wish to thank the bank’s management
In the current fiscal year, the Bank has targeted and staff members for considering the bank’s
to increase its loan and investment to NPR 32 progress to be their own by providing dedicated
billion and NPR 5.78 billion respectively. Likewise, services. I would like to express my gratitude and
the deposit amount is targeted at NPR 38.50 deep appreciation to Nepal Rastra Bank, Office of
billion. In the fiscal year 2015-16, the bank has Company Registrar, Nepal Securities Board, Nepal
a target of achieving operating profit of NPR Stock Exchange Ltd., shareholders, customers,
895.60 million and net profit of NPR 550 million. partners-in-progress and all our well-wishers
The operating expense in the running fiscal year for their continued support, encouragement and
is expected to be NPR 643.50 million. Currently, guidance in making possible for us to complete
the Bank has 25 branches outside valley and 11 yet another successful year.
branches inside valley, altogether 36 branches,
2 extension counters and 46 ATMs. By the end
of FY 2071/72, paid up capital of the bank has
reached NPR 2.69 billion (including bonus share).
With best wishes!
During the review period, the bank provided Santosh Kumar Lama
continuity on product innovation and automation Chairman

BOARD OF
DIRECTORS

BOARD OF DIRECTORS’ REPORT
FOR FIFTEENTH ANNUAL GENERAL MEETING
Respected Shareholders,
On behalf of the Board of Directors, we would like to extend from our past experiences and facing utmost challenges in
warm welcome to all the shareholders to the fifteenth Annual the banking sector, we have completed glorious 15 years of
General Meeting of Kumari Bank Ltd. services. From its inception, this bank has been achieving
continuous progress through modern banking technology
We would like to express our heartfelt condolences to the and practices with its core objectives to provide excellent
departed souls due to the massive earthquake on April 26, customer services, maximum return to our investors, maintain
2015. Let us stand together, and pray to give courage to all good corporate governance and moral values; and adhere
those bereaved family members who have lost their loved to the rules and regulations set forth by the government. In
ones. Also, we pray for the speedy recovery of those who days to come, with techno-savvy service delivery we shall
have been injured due to this natural disaster. continuously put our effort for the optimum quality of banking
solutions. We take your suggestions as our course of action
We are delighted to present you this bank’s financial status of so that the bank can be more successful and sustained. We
the fiscal year 2071/72, its achievement and future prospects take your permission to present you with the achievements
in this fifteenth Annual General Meeting. Learning lessons attained in the fiscal year 2071/72.
1. A HOLISTIC VIEW OF THE TRANSACTIONS IN THE PAST YEARS

Table 1: Financial look at the bank’s past 5 years’ performance
Amount in NPR million
Fiscal year
067/68 068/69 069/70 070/71 071/72
Particulars
Paid-up Capital* 1,603.80 1,603.80 1,828.33 2,431.68 2,699.17
Deposit 16,986.28 21,985.20 25,318.57 27,578.38 33,421.91
Loans, Borrowings & Advances 14,926.23 18,101.34 20,119.79 22,808.50 27,070.39
Investments 3,985.14 3,261.80 4,888.55 3,672.10 5,299.47
Fixed Asset (Net) 306.28 277.27 255.86 235.78 259.46
Total Assets 20,491.79 25,131.40 28,222.57 31,020.60 37,374.51
Net Interest Income 685.24 819.09 978.03 835.47 925.77
Other Income 190.06 203.36 237.05 330.83 297.55
Operating Expense 380.93 406.32 434.27 461.82 538.08
Operating Profit before loan loss provision 494.38 616.13 780.81 704.48 685.24
Net Profit/ (Loss) 251.24 275.50 291.45 341.65 394.79
Non-Performing Loan Ratio (%) 1.12 2.21 2.89 4.03 2.49
*Paid-up Capital includes Bonus Shares.
Looking at the past 5 year’s performance, it is evident that balance sheet size.
the bank’s financial business had a significant growth. The
bank’s deposit collection showed steady growth along with The bank had shown tremendous success in the part of
boost up to the lending portfolio; the bank has had pushed recovery aspect with Non-performing loan ratio decline to
its capital growth steadily to match with the growing 2.49% from 4.03%.
volume of the bank. The bank has been able to increase
its profit steadily over the years along with growth in its A comparison between the fiscal year 2070/71 and 2071/72

shows that bank achieved growth in loan, investment and and other operating expenses increased by 28.22% and
deposit by 18.69%, 44.32% and 21.19% respectively. During 5.71% respectively; which led to increment in total operating
the period, although the other operating income had declined expense by 16.51%. Net loan loss provision decreased by
by 10.06%; due to the incremental impact of net interest 65.16% in fiscal year 2071/72 than that of previous fiscal
income by 10.81%; the total operating income of the bank had year. Similarly, Bank’s net profit had increased by 15.55%
increased by 4.89%. Under operating expense, staff expenses in FY 2071/72.
Paid up Capital Reserve & Funds

3000 1000
2500 800
2000 600
1500 400
67/68 68/69 69/70 70/71 71/72 67/68 68/69 69/70 70/71 71/72
Deposit Loan & Borrowings

35000 30000
30000 25000
25000 20000
20000 15000
1015000 67/68 68/69 69/70 70/71 71/72

10000
67/68 68/69 69/70 70/71 71/72

Investment Total Assets
6000 40000
35000
5000
30000
4000
25000
3000 20000
67/68 68/69 69/70 70/71 71/72 67/68 68/69 69/70 70/71 71/72
Net Interest Income Other Income
1000 350
300
800 250
200
600 150
67/68 68/69 69/70 70/71 71/72 67/68 68/69 69/70 70/71 71/72

Operating Expense Operating Profit Before Loan Loss Provision
600 800
700
500
600
400
500
300 400
67/68 68/69 69/70 70/71 71/72 67/68 68/69 69/70 70/71 71/72
Net Profit Non-Performing Loan Ratio (%)
5
400
350
300
250 1
67/68 68/69 69/70 70/71 71/72 67/68 68/69 69/70 70/71 71/72
12

REVIEWING NATIONAL/ INTERNATIONAL sustained in social sector, 25.2% in productive sector, 9.5%
in infrastructure sector and remaining 7.5% in other sectors.
ECONOMY: The total damage by earthquake comes around one-third of
International
GDP for the fiscal year 2071/72. Loss on GDP is estimated to
During the year 2015, the economic growth of developed
be NPR 36 billion, which subsequently effected in decline in
countries is projected to improve and that of emerging and
the overall economic growth rate by 1.6%. In the review period,
developing countries are expected to diminish. As per the the agriculture sector which shares 33% of the total GDP; is
World Economic Outlook published by International Monetary expected to grow by 1.9% and that of non-agriculture sector
Fund as of July 2015; world’s economic growth is estimated by 3.6%. In the previous year the agriculture sector growth
to be 3.3% in 2015 whereas that on 2014 was 3.4%. The rate was 2.9% and that of non-agriculture sector rate was
economic growth of United States of America for the year 6.3%. Due to the late monsoon, the main agriculture crops;
2014 was 2.4% whereas that on the year 2015 is expected wheat and maize production declined; and also due to the
to be 2.5%. Similarly, economy of European countries and earthquake, which had impact on the loss of live stocks and
Japan in the year 2015 is expected to grow by 1.5% and 0.8% crop production resulted in the low growth of the agriculture
respectively. During the year 2014, the economy of European sector in the review period. In the review period, the growth rate
country increased by 0.8% and that of Japan declined by 0.1%. of industrial sector is expected to be 2.6% which was 6.2% in
According to International Monetary Fund, the economy of previous year. Damage caused by earthquake directly to the
emerging and developing countries in 2014 extended by 4.6% fixed assets and production capacity of the industries; also
and is expected to grow by 4.2%. Similarly, in the year 2015, induced scarcity of labor, their temporary management and low
the economic growth of countries with minimum income demand in the industrial produce had impacted adversely on the
level is expected to decline. The economic growth of such growth of industrial sector in the review period. The earthquake
countries in 2014 was 6.0% and is expected to be 5.1% in affected fixed assets and production capacity of industries
2015. The economic growth of neighboring countries India by NPR 19 billion; almost 20% of the major road network had
and China in 2015 is expected to be 7.5% and 6.8%. In 2014, been damaged and affected 25% of the electricity production
the economic growth of such countries was 7.3% and 7.4% capacity which lead to adverse impact in industrial sector. The
respectively. The world trade in the year 2014 increased by growth rate of service sector in the review period is expected
3.2%; was expected to grow by 4.1% in 2015. Due to the to be 3.9% whereas that of previous year was 6.3%. Though
decline in price of petroleum products and with decrease in there have been some improvements regarding industrial
the internal demand of petroleum products in the developed labor, peace security and other infrastructural problems; the
countries, the inflation of the developed countries is expected major factor for decline in growth rate of service sector are
to decrease. In 2014, the inflation rate of such countries was due to effects of devastating earthquake and its aftershocks
maintained at 1.4% whereas it is expected to be 0% in 2015. on hospitality business, real estate business, rental, wholesale
In 2014, the inflation of emerging and developing countries and consumer business.
was 5.1% and that in 2015 it is expected to be 5.5%. As per
the estimation of International Monetary Fund on April 2015; In the fiscal year 2071/72, the annual average inflation rate as
the inflation rate of neighboring countries India and China is per Consumer Price Index (CPI) is 7.2% and that in previous
expected to be 6.1% and 1.2% respectively. (Source: Nepal year was 9.1%.
Rastra Bank, Monetary Policy of Fiscal Year 2072/73).
In the fiscal year 2071/72, low export and increase imports had
National resulted in deficit in foreign trade. Due to the earthquake, due
According to the primary estimation by Central Bureau of to low volume of imports at the end of the review period had
Statistics, for the fiscal year 2071/72, the Real Gross Domestic resulted in the low rate of trade deficit. In the review period,
Product (GDP) rate based on actual base rate is expected to be total export decreased by 7.3% to NPR 85.32 billion whereas
3.0% which was 5.1% in the previous fiscal year. Similarly, GDP that in previous year was NPR 91.99 billion, which was a
in production price was 5.4% previous year and is expected to growth of 19.60% in comparison to its corresponding previous
be 3.4% in the review period. In the review period, the economy year. In the same review period, total import increased by
was affected negatively and the growth rate remained minimum 8.4% to NPR 774.68 billion whereas that in previous year
due to late monsoon, and devastating earthquake on Baisakh was NPR714.37 billion, which was a growth of 28.3% in
12, 2072 and its aftershocks. According to the National Planning comparison to its corresponding previous year. Although
Commission, the earthquake had affected the economy there was decline in export and increase in import, but the
adversely by NPR 706 billion approximately. Out of the total, export-import rate decreased to 11% in the review period
it is estimated that 57.8% of the damage by earthquake is which was 12.9% in previous year.

The remittance inflow increased by 25% in the previous in Asadh 2071 is 0.02% whereas it remained 0.1739% in
year and 13.6% in the review period which reached to NPR Asadh 2072. Similarly, weighted average interbank interest
617.28 billion. rate among commercial banks in Asadh 2071 was 0.16%
whereas that in Asadh 2072 is 1.01%. The weighted average
In the fiscal year 2071/72, the Balance of Payment reached interest rate for inter-bank transactions of other financial
the highest i.e. NPR 144.85 billion which was NPR 127.13 institutions for Asadh 2071 was 2.4% whereas that in Asadh
billion last year. 2072 is 3.89%.
In the fiscal year 2071/72, the total government expenditure In Asadh 2072, weighted average interest rate spread for
under cash basis increased by 19.8% and reached NPR commercial banks is 4.61% and was 5.21% in Asadh 2071.
499.96 billion and that in previous year increased by 16.3% Similarly, the average base rate of commercial banks in Asadh
i.e. to NPR 417.47 billion. In the review period, the capital 2071 was 8.36% and that in Asadh 2072 is 7.88%.
expenditure based on cash basis increased by 26.6% and
reached NPR 77.67 billion which was increased by 19.8% in The overall Non-Performing loan ratio of Banks and Financial
previous year. In the review period the capital expenditure was Institutions in Asadh 2072 is 3.33% and that in Asadh 2071
66.5% of the budget estimated for the period. In the previous is 3.76%.
year, the government expenditure increased in hefty due to
the constituent assembly election; and due to the same the The NEPSE Index’s annual basis points diminished by 7.2%
increment in the current year is seen minimal in comparison and reached to 961.2 points in Asadh 2072. The index was
to the last year’s increment. increased by 99.9% up to 1036.1 points in Asadh 2071.
The deposit of Bank and Financial Institutions in the review Considering the overall economic situation of the fiscal year
period increased by 20.1% (NPR 282.6 billion) whereas that 2071/72, economic situation seems to be strong enough
of previous year increased by 18.4% (NPR 218.68 billion). although economic structural framework seemed to be
In the fiscal year 2071/72, the loan and investment of Bank fragile. Even though country had an exceptional balance
and Financial Institutions increased by 17.5% (NPR 229.30 of payment situation, sufficient level of foreign exchange
billion) whereas that in previous year increased by 14.4% reserves and a mere single digit inflation indicating
(NPR 165.48 billion). In the review period, the private sectors satisfactory level of economic stability, but inability to
by the Banks and Financial Institutions had extended loans pace up the overall economic activities of the country is
in highest amount to production, construction and retail viewed as alarming factor inducing low rate of economic
business portfolio. The loan to industrial production sector growth. Also, due to the earthquake in the last quarter of
has increased by NPR 32.89 billion (14.8%) in the review period the review period had impact on the economic growth.
whereas that in previous year was increased by NPR 32.10 (Source: Nepal Rastra Bank, Country’s Current Economic
billion (16.8%). In the review period, loan to construction sector Status of Fiscal Year 2071/72).
increased by Rs 33.31 billion (27.9%); retail business increased
by NPR 53.23 billion (21.8%); transportation, communication 3. REVIEW OF THE BANK’S OPERATIONS IN FY
and public service sector increased by NPR 12.75 billion 2071/72:
(27%); which was NPR 23.49 billion (24.5%), NPR 45.94 billion Analysis of the financial statement of review period clearly
(23.2%), NPR 3.45 billion (7.9%) respectively in previous fiscal depicts the growth in banking transaction, asset and profit.
year. Likewise, loan in agricultural sector in previous year Such increment led in increment of balance sheet size by
increased by NPR 11.13 billion (28%) and that in the review 20.48%, which is NPR 37.37 billion in fiscal year 2071/72.
period increased by NPR 14.25 billion (25%).
A. Capital management: By the end of 2071/72, paid up
In the fiscal year 2071/72, the liquidity was retained through capital of the bank has reached to NPR 2.69 billion (including
frequent deposit collection of NPR 155 billion, reverse repo proposed bonus share). Also the capital adequacy ratio has
NPR 315.80 billion and outright sale NPR 6 billion. Similarly, to be minimum 10%, of which by the end of review period,
in the previous year, the liquidity was retained through reverse the total capital adequacy is 10.84%. As per the Nepal Rastra
repo by NPR 602.50 billion and outright sale by NPR 8.50 Bank’s Capital requirement, bank had formulated following
billion. capital plan to adhere with the requirement of the Central
The weighted average interest rate of 91 days Treasury bill Bank obligations.
14

Addition to Paid-up Capital of Bank
F/Y Opening Balance Closing Balance
Share Dividend Merger Right Share / Merger
2071/72 2,432 243 - - 2,675
2072/73 2,675 760 2,751 - 6,185
2073/74 6,185 742 - 1,237 8,164
B. Deposit: Compared to the last fiscal year, deposit increased by 21.19% and the total deposit reached NPR 33.42 billion.
Table 2: Comparative State of Deposits:

Deposit FY 071/72 % of total deposit FY 070/71 % of total deposit
Current 1,666 4.98 1,391 5.04
Savings 8,005 23.95 7,234 26.23
Call 9,281 27.77 6,812 24.70
Fixed 14,470 43.29 12,142 44.03
Total 33,422 100.00 27,578 100.00
C. Lending and its Management: In fiscal year 2070/71, The bank has been carefully investing in local and international
the bank’s total loan was NPR 22.80 billion, while at the end market and various organizations’ share and bonds. The bank
of review year, it increased by 18.69% reaching NPR 27.07 has invested NPR 2.57 billion in NG’s treasury bills, NPR 1.33
billion. The bank has diversified its lending into personal billion in development bonds; making the total investment
loans, education loans, small and medium scale business of the bank to be NPR 5.29 billion by the end of FY 2071/72.
loans, organizational loans and development projects loan.
During the review period, bank’s non-performing loan was E. Profit: During the review period, the interest spread
2.49 %, but the gross non-performing loan ratio was only between deposit and loan has decreased; although there
0.44%. Certain improvements were noted in the real estate was substantial increment in loans and investment amount
sector of lending in the current review period. In the current but there was only marginal increment in net interest
review period along with recoveries certain non performing income. Such decrease in interest spread was seen in all the
loans were taken as non banking asset of the bank, which banking institutions. In addition, the education loans to the
resulted in the decline in the non performing loan ratio in students going abroad for further studies also declined which
comparison to the previous year. We would like to inform
further reduced the commission revenues of the bank. The
you that we shall put continuous efforts to regularize these
employee’s salary scale was reviewed, adding up to the staff
loans in the days to come.
expenses. With high degree of internal control mechanism
and robust service delivery process; the expenses control
In FY 2070/71, the loans of real estate amounted to NPR
worked effectively with only 6% increase in other operating
2.04 billion, which was pulled down by 1.5% to NPR 2.1 billion
as of Asadh 2072. As per Nepal Rastra Bank the real estate expenses in relation to the last year expenses.
loans should not exceed 25% of the total loan exposure of
the bank. In the same line, with due caution while investing In the fiscal year 2071/72, the bank was able to recover net loan
in real estate loans, bank’s exposure on such loan portfolio loss provision of NPR 86 million and a total of Rs 146 million was
is 7.43% only at the end of Asadh 2072. added as Non banking assets of the bank, while the net profit of
the bank increased by 15.55% amounting to NPR 394.79 million.
D. Investment: In accordance with the bank’s objective of
getting returns from the overall resources by maintaining F. Contribution to Government Revenue: The bank had paid
balanced liquidity, the bank has given continuity to its policy NPR 148.2 million in fiscal year 2070/71 as corporate tax
of investing in Nepal Government and Nepal Rastra Bank’s to the government and during the current year NPR 173.7
risk free securities (Treasury bill, development bond, etc). million was paid as advance corporate tax to the government.

G. Products and Services: Kumari bank has launched I. Corporate Governance: Banks and financial institutions
differentiated products Kumari Swastha Jeevan Bachat Khata, are public organizations not only operated with shareholders’
Kumari Remit Bachat Khata and Personal Term Loans. Kumari funds but also through institutional and public deposit. This
Swastha Jeevan Bachat Khata has been introduced to promote means that good corporate governance and moral character
savings and for improvement of quality of healthy lifestyle. are two extremely sensitive issues that the bank takes into
The account holders of this new and peculiar product can account. Being aware that the good corporate governance
avail discounts in the treatment cost incurred at Medanta is the guiding path of the bank’s operations, the board of
Hospital, New Delhi. Customers are offered with co-branded directors is consistently giving effort to conduct its activities
ATM card used to get 5% discount with privileged services according to the same, and to develop strong and transparent
in pre-appointment, admission, consultation and follow-ups. good corporate governance also in other activities of the bank.
Depositors under this scheme can also avail medical insurance
facility of NPR 10,000.00 free of cost and heavy discounts are J. Risk Management: A separate risk management sub-
provided for the various types of services that the bank provides. committee has been established to identify, monitor and
Keeping in purview of providing service for transfer of fund within protect the bank from potential risks associated with different
country and outside country the bank has been providing quality activities of the bank. Policies and regulations have also
services via Kumari Remit Bachat Khata. The saving account been formed and implemented to manage the numerous
scheme holders can also avail numerous discounts on varied risks associated with banking activities as well as other
services provided by the bank. In order to serve our valued potential risks. The bank has taken the policy to make the
customers Kumari bank has come up with various schemes internal control system more effective and efficient by
under personal lending in simple and robust manner. properly managing the bank’s loans, operations, market
and other risks.
The Bank has been always been a techno-savvy service
provider offering SMS Banking, Internet Banking and Kumari The bank has executive management that formulates
Mobile banking to its valued customers. The customers availing required policies, regulations, and documentation related
such services can make payments for mobile bills, telephone to loan management, customer recognition, stress test and
bills, credit card payments and other utility payments through daily transactions activities.
internet portals. Similarly, the e-services of the bank can be
linked with e-sewa, which could be used for interbank fund i. Loan Risk Management: To identify and manage
transfer, payment of air ticket, electricity bills and many other loan risks, bank has set up a separate department. The
payment solutions. For smooth and easy remittance services, department assesses the risks associated before making
the Bank has introduced Kumari Remit software. Along with it, any loan disbursements by the bank keeping in mind of
bank had made service level agreements with other remittance the possible risks assessed with the predefined standards
service providers to enhance further reach to the market in and policies set by the Nepal Rastra Bank as well as bank’s
niche level. The Bank has been providing remittance services internal policy to hedge risks. The bank has taken up policy
through more than 1000 remit agents throughout the country. to determine loan risk segments and invest in the least
The Bank has also signed agreement with 7 international remit risky segments by studying current scenario and expected
companies. future possible risk factors. Depending upon the changed
market scenario bank adhere amendment of policies,
The bank is even more resilient to bring newer services reformulation of the loan portfolios, and determination
and added features for easier access of the products to the of the level of risk and loan sectors. Also, the bank has
customers. We are continually in the process to provide market priority set to reduce the concentration risks.
competitive privileged products and services to our valued
customers. Electronic Banking since its inception, Kumari Bank ii. Operating Risk Management: All the banking activities
has been providing varied innovative products and has made directed towards the operation of the bank is driven by
distinct market position in the industry. Visa Electron, Dollar given policies and guidelines with clearly defined work
Debit cards can be accessed via VISA network in Nepal, India ethics, proper implementation and hedging of operational
and any other part of the world. risk of the bank. To cope with the operational risk, the
bank has set up a separate operation risk management
H. Branch and Network Expansion: The bank has extended 2 department. It works as an identifier of risk associated
new branches inside the Kathmandu valley in this fiscal year. with internal workflows and procedures, human resources
Currently, the bank has 25 branches outside valley and 11 related risks and provides suggestive solutions for such
branches
16 inside valley, altogether 36 branches, 2 extension risk minimization. Because of this, we are confident that
counters and 46 ATMs. operating risks are being managed well.

iii. Liquidity Risk Management: Considering the scenario of L. Committees and sub-committees appointed by Board of
excess liquidity and liquidity crunch on time from previous Directors: According to popular law and the policies made
years, and impacts of the same on the profitability of the under bank’s authority, the following committees and sub-
bank, various financial source and investment areas are committees are in place:
determined and utilized in order to maintain optimum
balance of liquidity. In order to cope and balance the liquidity i. Audit committee: In accordance with Section 164 of the
scenarios and profitability match, ALCO/ Pricing Committee Company Act, an audit committee was in place comprising
is formed. of director Naresh Dugar and bank’s internal audit head
as member secretary under the convenorship of non-
iv. Market Risk Management: Bank is always alert regarding executive director Rasendra Bahadur Malla. Since, both
factors related to market risks and analyses those factors to directors Rasendra Bahadur Malla and Naresh Dugar have
prepare plan for the same. The bank has made policies and been staying abroad, their responsibilities are handed
devised working methods to monitor the foreign exchange over to director Er. Binod Dawadi and director Dr. Shobha
situation to minimize risks associated with fluctuations in Kant Dhakal for the time being. The bank’s internal audit
foreign currency exchange rates. Similarly, arrangements division reports directly to this committee.
have also been made for formulating the necessary policies
and regulation by regular monitoring market interest rates. ii. Human resource sub-committee: In order to guide
The ALCO/ Pricing Committee is formulated and entrusted management in selection of capable employees,
to control such risks. recruitment, appointments, skill development and related
services/ facilities, and other such matters, a human
K. Corporate Social Responsibility: The bank is aware of its resource sub-committee comprising of head of human
social responsibilities along with this professional intent as resource department under the convener ship of director
well. Kumari Bank, an eminent participant in CSR activities, had Dr. Shobha Kant Dhakal is in place.
made its mark to support devastating earthquake victims. The
bank had provided galvanized sheets worth of NPR 4.6 million iii. Risk management sub-committee: In order to correctly
towards those who lost their houses in the calamity. The bank identify and eradicate the risks of the bank, a committee
had also extended helping hands to renovate ‘Kumari Ghar’ comprising director Rasendra Bahadur Malla, director Puna
of Kathmandu by providing NPR 0.5 million; which in total Ram Bhandari and head from the concerned department
comes to NPR 5.1 millions worth in cash value as support to under the convener ship of director Uttam Prasad Bhatarai
earthquake victims. The bank has been providing scholarship is in place that formulates policies, regulations for the
to children via HOPAD Child and Women Promotion Society same.
(NGO) as part of its regular CSR activities to support child
welfare. The bank has provided free health camp service in Such committees and sub-committees appointed by the
Sindhupalchowk area through Indrawatee Community Service board of directors have been conducting their activities
Centre as an initiative taken by bank towards promotion within the premises set by the Board, Company Act 2063
of healthy community. Cultural and social harmony is our and in accordance to the Nepal Rastra Bank’s directives.
responsibility; the bank has established ‘Kumari Education This committees and sub-committees’ work, duties and
Fund’ in order to support Goddess Kumari for her higher authority and the conveners and member of the stated
studies. Every year NPR 50,000.00 is deposited in the fund. committees and sub-committees have not been provided
As part of cultural preservation initiative, the bank has been with any additional reimbursements and facilities except
supporting Kumari Puja and Indra Jatra festival every year for meeting allowances.
through various activities and financial support. For social
welfare, the bank has distributed food to elderly citizens at iv. Other management level committees: Besides the
Nisahaya sadan old age homes. In order to create awareness above mentioned committees and sub-committees
regarding possible diseases due to mosquitoes in Terai Region; appointed by the Board of Directors, the following have
Kumari Bank, Nijgadh branch distributed mosquito nets to also been conducting their activities under convener ship
Community Hospital of Nijgadh. The bank also organized tree of the CEO in order to implement the bank’s activities more
plantation program in Dhanusa, Mahendranagar for creating effectively: management committee, pricing committee
environmental awareness. Besides, the bank also made its / asset and liability management committee, labor
presence in various socio-cultural programs as blood donation relations, HR committee, discipline and performance
program, school and colleges’ development programs, financial review committee, procurement committee and bad loans
literacy programs and support to various clubs working for recovery committee. The members of these committees
social development on regular basis. are not provided any allowances or any additional facilities.

M. Human Resource: Executives/ staffs play the key role balanced. The bank continually amends the Executive Service
for the overall development of any bank. The bank human Terms, 2064 so that the administration of the bank is always
resource policy appoints able and professional staffs while effective. Also, the bank’s executive organizational structure
recruiting and to increase the efficiency, professional ability, is reviewed and new structure is put in its place so that the
managerial techniques and productivity of the staffs, the operation becomes more effective even so often. At the end
bank provides national and international level training as of the review period, total 407 staffs are working in the bank
well. The bank is currently focused to increase the efficiency (including 392 as permanent and 15 as contract). During
of the manpower and bring in new techniques, so that the review period, our staffs were also involved in various
in the days to come, the ratio between risk and result is sporting and social activities as well.
Current year’s achievements and programs: These are the financial status of the current year (till the end of Poush month)
Table 3: Current year’s financial glimpse:

Amount in NPR Million
2072 Poush 2071 Poush
Titles Change (NPR) Change %
month’s end month’s end
Paid-up Capital 2,431.68 2,431.68 0.00 0.00
Deposit 34,531.23 29,884.77 4,646.46 15.55
Loans, Borrowings and Advances 27,505.74 25,289.25 2,216.73 8.76
Investment (Net) 8,128.05 5,274.78 2,853.27 54.09
Interest Income 1,271.62 1,148.21 123.42 10.75
Interest Expense 806.91 714.10 92.81 13.00
Net Interest Income 464.71 434.11 30.60 7.05
Other Operating Income 160.26 139.33 20.93 15.02
Operating Expense 259.60 249.41 10.18 4.08
Operating Profit/ (Loss) before the loan loss provision 365.37 324.02 41.35 12.76
Net Profit 210.19 181.67 28.52 15.70
Programs for Current Year:

In the current fiscal year, bank has targeted to increase its loan by developing newer and modern services, to bring in financially
and investment respectively by 18.23% and 9.00% to NPR 32 deprived population into the circle of banking, disburse loans
billion and NPR 5.78 billion. Likewise, the deposit amount is to small scale industries and thus controlling the risk factor
targeted to increase by 15.2% to keep at NPR 38.50 billion. The and above all, contribute to the economic development of
Bank’s net interest income, other operating income and other the nation. The bank plans to extend its banking activities
operating expenses is expected to increase by 26.63%, 23.29% to the semi-urban and rural areas with additional branch set
and 19.59% to NPR 1,172.2 million, NPR 366.9 million and NPR up and also via Kumari Mobile Banking services and Kumari
643.5 million respectively. Similarly, operating profit before the loan Branchless Banking Services. The bank looks forward to newer
loss provision is expected to increase by 30.71% and reach NPR technological advances and to study the prospects of merging
895.6 million. In the review period, the Bank is able to decrease or being merged to a bank or financial institution via Nepal
the non-performing loan ratio to 2.49% than that of previous Rastra Bank’s approval and with shareholders’ suggestion,
year i.e. 4.03%. In the current year, the effect of recovery of loan discussion and proposition to tackle the challenges in the
loss provision in profit and loss account is expected to be NPR banking sector, and other such programs.
30 million. Bank’s net profit in the current fiscal year is expected
to increase by 39.52% to reach at NPR 550 million.
4. BANK’S INDUSTRIAL AND BUSINESS
To make the bank more efficient, the bank has planned to RELATIONS:
increase the potential of its assets, bring changes to deposit The bank has been maintaining cordial relationships with all
structure, increase staffs’ productivity and also introduce concerned industrial and professional bodies and is committed
quality
18 services for the benefit of the customers. The bank has to continue doing so in the future as well, in the process, making
also planned to fulfill the financial requirements of customers use of the same in the bank’s favor.

5. CHANGES IN BOARD OF DIRECTORS AND THE 8. DIVIDEND DECLARATION:
REASONS: Kumari Bank announces 11% bonus share from its paid-up
Bank’s former Chairman, Mr. Noor Pratap J.B. Rana resigned capital i.e. NPR 267.4 million and NPR 14.0 million cash
from his position on Poush 21, 2072 on his self interest, which dividend for tax purpose on bonus share as proposed by
was accepted by the board meeting, held on Poush 23, 2072 the board of directors; i.e. total of 11.58% which makes total
effective from Poush 21, 2072. amount of NPR 281.5 million as total dividend.
Professor Dr. Rajan Bahadur Poudel resigned 9. FORFEITED SHARES

from the position on Chaitra 26, 2071 on personal In the reported year, no shares have been forfeited.
grounds which was accepted by the board meeting.
10. PROGRESS OF THE BANK AND ITS SUBSIDIARY
We would like to thank them for their hard work and dedicated COMPANIES
service towards the bank. The progress of the bank has been presented under various
headings in this report. The bank does not have any subsidiary
The board meeting held on Poush 27, 2072 appointed promoter companies.
shareholder Er. Binod Dawadi in place of Mr. Rana.
11. MAJOR BUSINESSES CONDUCTED BY THE BANK
Similarly, the board meeting held on Magh 28, 2072 appointed
Mr. Santosh Kumar Lama, promoter shareholder as Chairman AND ITS SUBSIDIARY COMPANIES IN FY 2071/72
which remained vacant after the resignation by Mr. Rana. AND ANY IMPORTANT CHANGES IN BUSINESS
ACTIVITIES
6. MAJOR ISSUES AFFECTING BUSINESS: The bank does not have any subsidiary companies and there
The devastating earthquake that shook the country on Baisakh are no major changes other than mentioned in this Annual
12, 2072 and its aftershocks had its impact on the industrial and Report.
business activities. Apart from which, after the promulgation
of the constitution of Nepal, the unstable political situation, 12. IMPORTANT INFORMATION PROVIDED BY VALUED
border blockade, energy crisis and labor crisis had affected SHAREHOLDER
adversely to the bank. Country’s industrial and business sector None.
need to develop in order to develop banking sector. Currently,
industrial and business activities of the country are experiencing
abnormal conditions, due to which the capacity of borrowers 13. DETAILS OF SHARE HOLDING BY THE COMPANY’S
to repay loan and interest amount has diminished. Moreover, DIRECTORS AND OFFICE BEARERS IN THE
excess liquidity situation prevailed in the financial market; in the PREVIOUS FY AND INFORMATION PROVIDED
absence of justifiable and profitable investment opportunities. BY THEM ABOUT THEIR INVOLVEMENT IN THE
Hence, due to these factors banks are not in position to run
TRADING OF COMPANY SHARES, IF ANY
its business activities in normal conditions and possibilities
No information as such.
of negative impact on the bank’s profitability as well.
14. INFORMATION ABOUT ANY AGREEMENTS

7. BOARD OF DIRECTORS’ RESPONSES TO THE
CONCERNING THE BANK THAT SERVICE THE SELF
AUDITOR’S REPORT
Except for normal comments concerning the bank’s regular INTEREST OF ANY DIRECTOR OR PEOPLE CLOSE
business, no especially negative comments have been TO THEM
observed in the audit report. Instructions have also been None.
given to the management to implement the suggestions and
advice of the audit report. The financial statements of fiscal 15. DETAILS ABOUT RE-PURCHASE OF SHARES
year 2071/72 were accepted by Nepal Rastra Bank on Magh None.
20, 2072; the comments and instructions have been included
in the annual report. Bank has already given direction to its 16. DETAILS ABOUT INTERNAL CONTROL SYSTEM:
management team for implementation of received comments There is a separate department to maintain the bank’s internal
and instructions. control systems. This department is always active to minimize

risks associated with the Bank’s loans, operations and market internal audit report. The audit committee has been conducting
risks. Monitoring of the effectiveness of the internal control regular monitoring of the internal control systems and regularly
systems is done on a regular basis by the Audit Department providing suggestions concerning implementation to the
while conducting its regular audit. management besides providing information on the same to
the board of directors. The management of the bank has been
17. DETAILS OF THE BANK’S TOTAL OPERATING improving its daily activities regularly as per the suggestion
provided by audit committee.
COSTS
The Bank’s operating costs in FY 2071/72 were as follows:
19. INFORMATION ABOUT ANY CASH BALANCE TO
Staff expenses: NPR 284,256,955 BE PAID TO THE BANK BY DIRECTOR, MANAGING
Other operating costs: NPR 253,823,364 DIRECTOR, CHIEF EXECUTIVE OFFICER, BANK’S
Detailed description of the bank’s total operating costs has PROMOTERS OR THEIR CLOSE RELATIVES OR
been stated in Annexure 4.23 and 4.24 of the Annual Report. FIRM ASSOCIATED WITH THEM, COMPANY OR
ORGANIZATION
18. INFORMATION ABOUT AUDIT COMMITTEE None.
According to the Company Act, Section 164, the audit committee
is comprised of directors Naresh Dugar and bank’s internal
20. DETAILS ABOUT SALARIES, ALLOWANCES AND
audit department head, Ganesh Kumar K.C., as member
secretary under the convener ship of non-executive director FACILITIES PROVIDED TO DIRECTORS, MANAGING
Rasendra Bahadur Malla (Mr. Malla and Mr. Dugar have been DIRECTOR, CEO AND OTHER EXECUTIVES:
staying abroad so director Er. Binod Dawadi and director Dr. Directors: The bank’s directors are paid meeting allowances
Shobha Kant Dhakal are given responsibility temporarily). for taking part in meetings of committees and sub-committees
Bank’s internal audit department reports directly to this as set up according to applicable rules at the rate of NPR
committee. This committee has had 10 sittings in FY 2071/72. 10,000 to the chairperson and NPR 8,000 to the members.
Member of this committee have been provided with meeting Also, NPR 10,000 per month is being provided for media and
allowance at par with other board members. This committee’s daily newspapers for each board of directors. The bank has not
activities are conducted in accordance with Nepal Rastra provided the directors with any other facilities than the above.
Bank‘s directives and Company Act regulations. No serious In FY 2071/72, NPR3,175,033 (In words, NPR 3.175 million) has
remarks on the bank’s operations have been observed in the been paid as meeting and media allowances to the directors.
Annual Salary, Allowances and services for CEO and other executives/ managers for the F/Y 2071/72:
Table – 4 Amount in NPR

S.No. Salary and services CEO Managers
1 Salary 4,584,711 32,687,198
2 Allowances 10,111,905
3 Provident Fund 458,471 3,268,720
4 Vehicle maintenance 705,973
5 Medical Treatment (annual + accumulated ) 2,151,280
6 Dashain Allowance 495,000 3,244,799
7 Leave (annual + accumulated) 506,437 7,285,996
8 Insurance - 2,127,726
9 Gratuity 11,240,044
10 Others
Total NPR 6,044,619 72,823,641
Note: The salary and services of CEO includes the amount received by the then CEO for the period of Shrawan 1, 2071 to
Chaitra
20 17, 2071 only.

Other than above mentioned salary and allowances, other had presented the same to Nepal Rastra Bank for principle
managers are also provided with following services: approval. Chartered accountant firm P.Y.C. and associates
is appointed as due diligence auditor for the valuation of
1. Vehicle along with driver to the CEO; vehicle loan, driver, fuel, the merging banks and financial institutions. Currently, the
and repair and maintenance to ACEO and AGM ;and vehicle appointed audit firm is carrying its activities and had set forth
loan, fuel and repair expenses according to the bank’s target to accomplish the DDA process by the end of Asadh
policy on transportation vehicles to other management 2072.
office bearers.
Vote of Thanks:
2. Home and real estate loans/ personal loans to all permanent We would like to extend our heartfelt gratitude to respected
office bearers as per the bank’s staff service regulations. shareholders, customers, executives from Nepal Rastra Bank,
Office of Company Registrar, Nepal Securities Board, Nepal
3. Journals, telephone and mobile facilities as per the bank’s Stock Exchange Ltd., CDS & Clearing Ltd., general public
human resource policy. and all other concerned who have continuously provided
their support, encouragement and guidance. We would also
21. DIVIDEND YET TO BE TAKEN BY SHAREHOLDERS: like to thank our statutory auditor M/s Dev Associates for
Out of 12% cash dividend distributed in FY 2066/67 and 7% conducting the audit on time and providing the bank with
cash dividend distributed in FY 2068/69; the shareholders realistic professional advice. In addition, we wish to thank
are yet to collect the remaining amount of NPR 7,839,484 (in the bank’s management and staff members for considering
words NPR 7.83 million) from the distributed cash dividend the bank’s progress to be their own by providing dedicated
till Asadh end 2072. services. Finally, by incorporating as its main principle the fact
that bank and its customers are two sides of the same coin,
and that it is due to our customers’ affection and trust that
22. DETAILS OF ASSET SALES AND PURCHASES the bank has succeeded in reaching its present position. We
AS PER SECTION 141 OF THE COMPANY ACT, 2063: offer our heartfelt gratitude to them with the promise to be
None. still more committed to increase our strong relationship with
our customers in the future.
23. DETAILS OF BUSINESS WITH ASSOCIATED
COMPANIES AS PER SECTION 175 OF THE COMPANY Thank You,
ACT, 2063: On behalf of the Board of Directors
None.
24. ANY OTHER INFORMATION NECESSARY TO

BE REVEALED IN THE DIRECTORS REPORT AS PER
THE COMPANY ACT, 2063, AND APPLICABLE LAWS:
None.
…….............…………………………
25. OTHER INFORMATION: The bank’s board of directors Dr. Shobha Kant Dhakal
accepted the resignation of CEO, Udaya Krishna Upadhyay (Director)
effective from date Chaitra 18, 2071.
Information regarding Merger: …….............…………………………

14th Annual General Meeting of the Bank had entrusted authority Santosh Kumar Lama
to the bank’s board of directors to seek for appropriate banks (Chairman)
and financial institutions for merger and/or acquisition and
proceed for merger and/or acquire by appointing auditor for Date: Falgun 3, 2072
the purpose of due diligence audit. In the same spirit, the bank
had reached agreement for merger process with Nepal Credit
and Commerce Bank Ltd, Infrastructure Development Bank Ltd,
Apex Development Bank Ltd., Supreme Development Bank and
International Development Bank Ltd. on Poush 29, 2072 and

22

ACTING CHIEF EXECUTIVE
OFFICER’S MESSAGE
I am privileged to be leading Kumari Bank at year. While in the health sector, we are conducting
this juncture on your behalf. I am fully aware of health camps in those areas which are deprived
the responsibilities and the trust that you have of good medical facilities. The bank is also
bestowed upon me and the management team contributing to number of CSR activities related
to lead the bank. I can assure you that our prime to education, health and environment. Moreover,
focus shall be in delivering the best results and the bank has supported the earthquake victims
taking the bank to newer heights. by distributing Galvanized sheets of value NPR
5,100,000.00 in Gorkha, Dhading, Sindhupalchowk
Here, I would like to mention that your bank has and Nawalparasi. The bank has also provided
been able to increase its deposit base by 21.19% financial support to Kumari Ghar, Basantapur,
totaling NPR 33.42 billion and loan amount by Kathmandu for NPR 500,000.00 only to repair
18.69% totaling NPR 27.07 billion in the fiscal of Kumari Ghar against damage caused due to
year 2071/72. The net profit has increased by devastating earthquake dated Baisakh 12, 2072.
15.55% as compared to last FY. Other financial
indicators have witnessed a marked improvement As in the past years, we shall continue to elevate the
including Non-Performing Loan (NPL) ratio by bank’s stature through expertise and dedication
virtue of our tenacity and concerted efforts in of our staff members, constant guidance and
the recovery process. We have continuously tried support from the board, encouragement from
to introduce norms to establish the robust risk our shareholders and support from the regulators
management process in the bank. and our valued customers.
During the review period, the bank provided I would also like to mention here that recently
continuity on product innovation and automation Mr. Santosh Kumar Lama has been positioned as
of services by focusing on Kumari Swastha Chairman of the bank; who had been shouldering
Jeevan Bachat Khata, Kumari Remit Bachat the bank’s responsibilities as Director for a long
Khata and Personal Loans and advances. In the time.
review period, we have been able to increase
our business through Kumari Remit and tie-ups Finally, I take this opportunity to thank our valued
with several renowned national and international shareholders, regulatory bodies, NRB, customers,
companies. Presently, we are providing quality employees and well-wishers for their continued
services through 38 points of representations trust and support.
and 46 ATMs throughout the country.
Kumari Bank has remained committed to

strengthen Corporate Social Responsibility (CSR)
whereby we have been providing sponsorships
to under privileged children from rural parts of
Nepal. The bank has also provided financial
With warm regards,
support of NPR 50,000.00 for education to Ms.
Rajib Giri
Matina Shakya, Living Goddess Kumari every
Acting Chief Executive Officer

24

MANAGEMENT TEAM
Sitting, Center
Mr. Rajib Giri, Acting Chief Executive Officer
Standing in First Row (Left to Right)

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

Mr. Narendra P. Chhatkuli, Head – Legal, Compliance and Company Secretary
Mr. Ajit P. Bhattarai, Branch Manager, New Road
Mr. Bikas Khanal, Head – Corporate Credit
Mr. Ganesh Kumar K.C., Head – Internal Audit
Mr. Rohit Singh, Head – Human Resources

More Responsible to Services
26

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

Kumari Smart Bachat Khata offers account opening facility at zero
balance. We believe in providing banking access to all hence, this
is a very suitable account for everyone. Besides the facility to open
account in zero balance, the accountholders are offered various
banking facilities.
Kumari Savings
Kumari Savings account is a special saving account that beholds the
corporate name after “Living Goddess Kumari”. The customers can
avail various value added banking services in this account.
50 Plus Savings
As the name suggests, this saving account is targeted to all the
individuals of 50 years and above. Interest rate is calculated on daily
balance and provided on quarterly basis. There are attractive features
associated with this account like 25% discount on locker, ATM debit
card, Internet/ Mobile banking facilities, etc.
Subha Laxmi Savings

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

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

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

Kumari Flexi-Fix Scheme is specially designed based on hybrid concept
of flexi-fix mechanism to attract retail deposits. The customer will be
able to receive facilities of a saving deposit type and earn interest similar
to that of fixed deposit type. The scheme is based on “standing order”
whereby a condition is applied for those applying for the scheme. The
product carries special features such as:
a. Maximum Returns – As soon as the balance in saving
account exceeds NPR 100,000.00, the excess sum amount,
in multiples of NPR 10,000.00 will be transferred automatically
to a higher interest earning non-operative account (FD).
b. Maximum Liquidity - The money parked in non-operative account
(FD) as a result of the sweep from saving account can be easily
accessed by issuing a cheque or through ATM etc. The amount
is reversed swept from non- operative account (FD) to saving
whenever the balance in saving falls short of required available
balance to be maintained at all time.
c. Auto renewal facility – The Flexibility to maintain fund in non-
operative account (FD) at a higher rate, can be renewed for
period of 1 year and above 1 year i.e. 2 years.
28

PRODUCT REVIEW
Kumari Swastha Jeevan Bachat Khata

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

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

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

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

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

CSR ACTIVITIES & Scholarship program for ‘living goddess Kumari’ of Kathmandu on the
occasion of its 14th anniversary, in order to give continuity to her further
SME FINANCING
education. The amount of NPR 50,000.00 will be deposited every year in
her saving account and upon her retirement, a lump sum amount will be
granted to her for education purpose.
Celebrating Global Money Week 2015 Jasta pata distribution in Dhading to support earthquake victims
30
Jasta pata distribution in Gorkha to support earthquake victims Jasta pata distribution in Nawalparasi to support earthquake victims

Krishi Sahakari Sangh Limited, Nawalparasi – Financed by Kumari Bank Ltd. Support to Kumari Ghar of NPR 500,000.00 only to renovate Kumari Ghar
for destruction caused due to devastating earthquake & NPR 5,100,000.00
only for earthquake victims.
Jasta pata distribution in Sindhupalchowk to support earthquake victims Health Camp conduction in association with Indrawatee Community Service
Centre (ICSC).
Kumari Bank Employees Union organized “Blood Donation Kumari Bank Limited conducted ‘Financial LiteracyTraining’ in coordination
Program” on the occasion of Bank’s 15th anniversary. with Nepal Banking Institute (NBI) as a part of its CSR activity in Budhanilkantha.
Around 55 people were benefited from the training including staffs from
various cooperatives and other local people of Budhanilkantha area.

More Responsible Via Network
More Responsible in Technology
34

KUMARI BANK LIMITED
Balance Sheet
As at Ashad End 2072 (16 July 2015)
Capital and Liabilities Schedule Current Year (NPR) Previous Year (NPR)
1. Share Capital 4.1 2,699,166,532 2,431,681,560
2. Reserves and Funds 4.2 648,149,644 534,924,396
3. Debentures & Bonds 4.3 - -
4. Borrowing Outstanding 4.4 328,000,000 201,951,900
5. Deposit Liabilities 4.5 33,421,910,946 27,578,376,145
6. Bills Payable 4.6 32,782,142 22,428,891
7. Proposed Dividend Payable 14,078,156 31,755,240
8. Income Tax Liabilities - -
9. Other Liabilities 4.7 230,423,406 219,483,913
Total Capital and Liabilities 37,374,510,826 31,020,602,045
Assets Schedule Current Year (NPR) Previous Year (NPR)

1. Cash Balance 4.8 829,463,812 777,836,820
2. Balance with Nepal Rastra Bank 4.9 3,349,001,322 3,829,349,524
3. Balance with Banks/Financial Institution 4.10 812,509,759 288,499,107
4. Money at Call and Short Notice 4.11 436,880,592 507,478,409
5. Investment 4.12 4,862,590,135 3,164,625,890
6. Loans, Advances and Bills Purchase 4.13 26,246,038,476 21,898,115,132
7. Fixed Assets 4.14 259,463,477 235,775,955
8. Non Banking Assets 4.15 - -
9. Other Assets 4.16 578,563,253 318,921,208
Total Assets 37,374,510,826 31,020,602,045
Contingent Liabilities Schedule 4.17

Directors’ Declaration Schedule 4.29
Statement of Capital Fund Schedule 4.30 (A)
Statement of Risk Weighted Assets Schedule 4.30 (B)
Principal Indicators Schedule 4.31
Significant Accounting Policies Schedule 4.32
Notes to Accounts Schedule 4.33
Schedules 4.1 to 4.17 form an integral part of the Balance Sheet.
Rajib Giri Santosh Kumar Lama Dr. Shobha Kant Dhakal Uttam P. Bhattarai
Acting Chief Executive Officer Chairman Director Director
Nirmal Kumar Khatiwada Naresh Dugar Er. Binod Dawadi

Head– Finance, Planning & MIS Director Director
As per our report of even date
Puna Ram Bhandari Rasendra Bahadur Malla CA. Rajnish Dahal
Director Director Partner
Dev Associates
Chartered Accountants
Date – 17 January 2016
Place- Durbar Marg, Kathmandu

KUMARI BANK LIMITED
Profit and Loss Account
From 1st Shrawan 2071 to 31 Ashad 2072 (From 17 July 2014 to 16 July 2015)
Particulars Schedule Current Year (NPR) Previous Year (NPR)

1. Interest Income 4.18 2,433,130,920 2,410,784,399
2. Interest Expenses 4.19 1,507,364,997 1,575,311,889
Net Interest Income 925,765,923 835,472,510
3. Commission and Discount 4.20 154,634,692 188,725,481
4. Other Operating Income 4.21 47,668,121 56,944,610
5. Exchange Fluctuation Income 4.22 95,251,346 85,155,477
Total Operating Income 1,223,320,081 1,166,298,078
6. Staff Expenses 4.23 284,256,955 221,701,158
7. Other Operating Expenses 4.24 253,823,364 240,120,657
8. Exchange Fluctuation Loss 4.22
Operating Profit before Provision for Possible Losses 685,239,763 704,476,263
9. Provision for Possible Losses 4.25 284,491,537 236,311,721
Operating Profit 400,748,226 468,164,542
10. Non Operating Income /(Expense) 4.26 (7,020,620) 2,540,345
11. Loan Loss Provision Written Back 4.27 228,688,373 76,151,082
Profit from Regular Activities 622,415,979 546,855,969
12. Profit/Loss from Extra-ordinary Activities 4.28 - -
Net profit after Considering All Activities 622,415,979 546,855,969
13. Provision for Staff Bonus 56,583,271 49,714,179
14. Provision for Income Tax 171,044,332 155,486,824
* Current Year’s 169,026,791 148,173,334
* Upto Previous year 5,298,717
* Deferred Tax 2,017,541 2,014,772
Net Profit/Loss 394,788,376 341,654,966
Schedules 4.18 to 4.28 form an integral part of the Balance Sheet.

Dev Associates

KUMARI BANK LIMITED
Profit and Loss Appropration Account
Particulars Current Year (NPR) Previous Year (NPR)

Income
1. Accumulated Profit up to Last Year 26,270,265 4,700,386
2. This Year’s Profit 394,788,376 341,654,966
3. Exchange Fluctuation Fund
4. Bond Redemption Reserve
5. Share Premium
6. General Reserve to Capital Adjustment Fund - 400,000,000
Total 421,058,641 746,355,352
Expenses
1. Accumulated Loss up to Last Year
2. Current Year’s Loss
3. General Reserve Fund 78,957,675 68,330,993
4. Contingent Reserve
5. Institution Development Fund
6. Dividend Equalization Fund
7. Staff Related Reserves
8. Proposed Cash Dividend 14,078,156 31,755,240
9. Proposed Bonus Share 267,484,972 603,349,560
10. Capital Adjustment Fund 44,412,519
11. Special Reserve Fund
12. Exchange Fluctuation Fund 3,580,984 5,879,623
13. Bond Redemption Reserve Fund
14. Previous Year’s Tax Adjustment
15. Deferred Tax Fund (849,607) (230,329)
16. Investment Adjustment Reserve - 11,000,000
Total 407,664,700 720,085,087
17.Accumulated Profit/(Loss) 13,393,941 26,270,265

Dev Associates

KUMARI BANK LIMITED
Statement of Changes in Equity
Capital Exchange Other

Accumulated General Share Deferred Total Amount
Particulars Share Capital Adjustment Fluctuation Reserve &
Profit/Loss Reserve Fund Premium Tax Fund (NPR)
Fund Fund Fund
Opening Balance 2,431,681,560 26,270,265 467,413,482 - - 20,391,043 849,607 20,000,000 2,966,605,956
Adjustments 267,484,972 (12,876,324) 78,957,675 44,412,519 - 3,580,984 (849,607) - 380,710,220
Net Profit for the Period 394,788,376 394,788,376

Transfer to General Reserve (78,957,675) 78,957,675 -
Capital Adjustment Fund (44,412,519) - 44,412,519 -
Declaration of Dividend (14,078,156) (14,078,156)
Exchange Fluctuation Fund (3,580,984) 3,580,984 -
Right Share Issued -
Transfer to Retained Earnings -
Proposed Bonus Share 267,484,972 (267,484,972) -
Debenture Redemption Reserve -
Previous Year tax Adjustment -
Deferred Tax Fund 849,607 (849,607) -
Investment Adjustment Reserve - - -
Share Premium -
Closing Balance 2,699,166,532 13,393,941 546,371,157 44,412,519 - 23,972,027 0 20,000,000 3,347,316,176

Dev Associates
KUMARI BANK LIMITED
Cash Flow Statement

(A). Cash Flow from Operating Activities 1,058,589,851 1,266,582,023
1. Cash Received 2,654,932,964 2,758,129,300
1.1 Interest Income 2,361,680,039 2,416,108,749
1.2 Commission and Discount Income 196,271,359 255,013,852
1.3 Income from Foreign Exchange Transaction 95,251,346 85,155,477
1.4 Recovery of Loan Written off
1.5 Other Income 1,730,221 1,851,221
2. Cash Payment (2,220,592,324) (2,131,224,225)
2.1 Interest Expenses (1,493,595,392) (1,584,428,529)
2.2 Staff Expenses (333,971,134) (221,701,158)
2.3 Office Overhead Expenses (210,531,723) (192,090,016)
2.4 Income Tax Paid (182,494,075) (133,004,522)
2.5 Other Expenses
Cash Flow before Changes in Working Capital 624,249,212 639,676,948
Increase /( Decrease) of Current Assets (5,206,880,378) (1,564,807,175)
1.(Increase)/Decrease in Money at Call and Short Notice 70,597,817 245,931,591
2. (Increase)/Decrease in Short Term Investment (651,576,893) 945,276,348
3. (Increase)/Decrease in Loans, Advances and Bills Purchase (4,271,467,947) (2,688,714,114)
4. (Increase)/Decrease in Other Assets (354,433,355) (67,301,000)
Increase /( Decrease) of Current Liabilities 5,831,129,590 2,204,484,123
1. Increase/(Decrease) in Deposits 5,843,534,801 2,259,807,343
2. Increase/(Decrease) in Certificates of Deposits
3. Increase/(Decrease) in Short Term Borrowings
4. Increase/(Decrease) in Other Liabilities (12,405,212) (55,323,220)
(B) Cash Flow from Investment Activities (1,089,348,509) 20,268,149
1. (Increase)/Decrease in Long-term Investment (1,046,387,352) 25,239,849
2. (Increase)/Decrease in Fixed Assets (66,540,243) (27,888,169)
3. Interest income from Long Term Investment 22,712,706 22,280,932
4. Dividend Income 866,381 635,536
5. Others
(C) Cash Flow from Financing Activities 126,048,100 201,951,900
1. Increase/(Decrease) in Long term Borrowings (Bonds,Debentures etc)
2. Increase/(Decrease) in Share Capital - -
3. Increase/(Decrease) in Other Liabilities - -
4. Increase/(Decrease) in Refinance/Facilities received from NRB 126,048,100 201,951,900
(D) Income/Loss from Change in Exchange Rate in Cash & Bank Balances - -
(E) This Year’s Cash Flow from All Activities 95,289,442 1,488,802,071
(F) Opening Balance of Cash and Bank Balances 4,895,685,451 3,406,883,380
(G) Closing Balance of Cash and Bank Balances 4,990,974,893 4,895,685,451

KUMARI BANK LIMITED Schedule 4.1
Share Capital and Ownership


1. Share Capital
1.1 Authorized Capital 5,000,000,000 2,000,000,000
a) 50,000,000 Ordinary Shares of NPR 100 each 5,000,000,000 2,000,000,000
b) ………...Non-redeemable Preference Shares of Rs……….. each - -
c) …………Redeemable Preference Shares of Rs……….. each - -
1.2 Issued Capital 2,431,681,560 1,828,332,000
a) 24,316,815.60 Ordinary Shares of NPR 100 each 2,431,681,560 1,828,332,000
b) ………..Non-redeemable Preference Shares of Rs……….. each - -
c) …………Redeemable Preference Shares of Rs……….. each - -
1.3 Paid Up Capital 2,431,681,560 1,828,332,000
a) 24,316,815.60 Ordinary Shares of NPR100 each 2,431,681,560 1,828,332,000
b) ……….Non-redeemable Preference Shares of Rs……….. each
c) …………Redeemable Preference Shares of Rs……….. each
1.4 Proposed Bonus Share 267,484,972 603,349,560
1.5 Calls in Advance - -
1.6 Total (1.3 + 1.4 + 1.5) 2,699,166,532 2,431,681,560
Share Ownership
Particulars Current Year Previous Year (NPR)

A. Local Shareholders % Amount (NPR) % Amount (NPR)
1.1 Government of Nepal - -
1.2 “A” Class Licensed Institution - -
1.3 Other Licensed Institutions - -
1.4 Other Institutions (promoter and public both) 5.29 128,624,745 4.78 87,352,500
1.5 General Public (promoter and public both) 94.71 2,303,056,815 95.22 1,740,979,500
1.6 Others - -
B. Foreign Shareholders
Total 100 2,431,681,560 100 1,828,332,000

ANNEXURE 1(A)
Share Capital And Ownership
LIST OF SHAREHOLDERS HOLDING SHARE CAPITAL OF 1% OR MORE
Current Year Previous Year (NPR)
SN Name of the Shareholder
% Share Capital in NPR. % Share Capital in NPR.
1 NOOR PRATAP J. B. RANA 6.50 158,059,200 6.50 118,841,400
2 AMIR PRATAP J. B. RANA 4.76 115,811,000 5.06 92,513,500
3 SABITRI GURUNG 3.00 72,881,300 3.07 56,286,700
4 BIMALA DEVI AGRAWAL 2.75 66,983,500 2.75 50,363,400
5 RISHI AGRAWAL 2.40 58,360,300 2.40 43,879,900
6 RAJENDRA PRASAD SHRESTHA 1.39 33,854,200 1.62 29,551,600
7 BIDHYA KRISHNA SHRESTHA 1.34 32,480,300 1.34 24,421,300
8 YAGYA PRATAP RANA 1.31 31,927,800 1.32 24,005,800
9 MAHABIR PRASAD GOEL 1.28 31,061,000 1.28 23,354,100
10 LAXMAN SHRESTHA 1.23 29,811,400 1.22 22,414,600
11 GOVINDA DAS SHRESTHA 1.10 26,650,500 1.09 20,038,000
12 MANJU TAPARIA 1.01 24,541,700 1.01 18,452,400
13 PHURBA BANGDEL LAMA 1.00 24,366,400 1.31 23,983,200
14 PASHUPATI MURARKA 1.00 24,337,800 0.70 12,798,300
15 PRADEEP KUMAR MURARKA 1.00 24,320,200 0.70 12,798,300
16 JANUKI KUMARI J. B. RANA 1.00 24,316,700 1.00 18,283,200
17 SANTOSH KUMAR LAMA 0.91 22,249,100 0.91 16,728,600
18 MANOJ KUMAR GOEL 0.90 21,904,400 0.88 16,089,200
19 ANUPAM RATHI 0.90 21,885,100 0.90 16,454,900
20 SHIVA SHANKER AGRAWAL 0.88 21,301,400 0.88 16,016,000
21 KUMUD KUMAR DUGAD 0.87 21,189,600 0.85 15,591,600
22 BHIM KRISHNA UDAS 0.79 19,118,200 0.79 14,374,600
23 BIRENDRA KUMAR SHAH 0.78 18,986,200 0.86 15,819,200
24 CIT CITIZEN UNIT SCHENE 0.75 18,237,600 0.75 13,712,400
25 SHREE NIWAS SHARDA 0.75 18,209,000 0.75 13,690,900
26 LIFE INSURANCE CORPORATION NEPAL LTD 0.75 18,194,300 0.75 13,679,900
27 SANJAY LAMA 0.74 17,994,700 0.74 13,629,900
28 ANIL DAS SHRESTHA 0.73 17,716,400 0.73 13,320,600
29 PRABHU INVESTMENT P LTD 0.73 17,716,100 0.74 13,420,400
30 NARESH DUGAD 0.70 17,021,700 0.70 12,798,300
31 BIKASH DUGAD 0.70 17,021,700 0.70 12,798,300
32 ASHOK KUMAR BAHETI 0.65 15,721,300 0.94 17,297,300
33 SANTOO SHRESTHA 0.61 14,881,500 0.61 11,161,100
34 JAGADISH PRASAD CHAUDHARY 0.60 14,590,000 0.60 10,969,900
35 DEV KISHAN MUDANDA 0.60 14,590,000 0.60 10,969,900
36 SHARMILA ARYAL 0.59 14,391,400 0.60 10,969,900
37 VIDUSHI RANA 0.58 14,103,700 0.58 10,604,300
38 JAMUNA MAHESWORI RATHI 0.57 13,923,100 0.55 10,072,500
39 PRAVA LAXMI RANA 0.53 12,935,700 0.59 10,726,100
40 RITA K.C. 0.52 12,749,900 0.52 9,594,000
41 UTTAM PRASAD BHATTARAI 0.50 12,158,300 0.50 9,141,600
42 RAKSHYA PAHADI 0.50 12,158,300 0.50 9,141,600
43 NIRMAL PRADHAN - 0.51 9,350,000
44 ATMARAM MURARKA - 0.60 10,988,300

Reserves and Funds

Particulars Current Year NPR Previous Year (NPR)

1. General/Statutory Reserve Fund 546,371,157 467,413,482
2. Capital Reserve Fund
3. Capital Redemption Fund
4. Capital Adjustment Fund 44,412,519 -
5. Other Reserve & Funds 20,000,000 20,849,607
a. Contingent Reserve
b. Institution Development Fund
c. Dividend Equalization Fund
d. Special Reserve Fund
e. Assets Revaluation Fund
f. Deferred Tax Reserve - 849,607
g. Other Free Fund
h. Other Reserve Fund
i. Investment Adjustment Reserve 20,000,000 20,000,000
j. Bond Redemption Reserve
6. Accumulated Profit/Loss 13,393,941 26,270,265
7. Exchange Fluctuation Fund 23,972,027 20,391,043
8. Share Premium
Total 648,149,644 534,924,396
Debenture and Bond

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

Issued on …………… and to be matured on ……….
2. ………. - -
Total (1+2) - -

Outstanding Loan (Borrowings)


A. Domestic
1. Government of Nepal - -
2. Nepal Rastra Bank 328,000,000 201,951,900
3. Repo Obligations - -
4. Inter Bank and Financial Institutions - -
5. Other Organized Institutions - -
6. Others - -
Total (A) 328,000,000 201,951,900
B. Foreign
1. Banks - -
2. Others - -
Total (B) - -
Total (A+B) 328,000,000 201,951,900

Deposit Liabilities

1. Non-Interest Bearing Accounts
A. Current Deposit 1,446,060,927 1,237,175,209
1. Local Currency 1,380,725,206 1,202,240,826
1.1 Government of Nepal
1.2 “A” Class Licensed Institutions 17,925,801 20,131,262
1.3 Other Licensed Financial Institutions 302,149,120 255,795,690
1.4 Other Organized Institutions 893,913,938 727,511,094
1.5 Individuals 166,736,346 198,802,780
1.6 Others
2. Foreign Currency 65,335,721 34,934,383
2.1 Government of Nepal
2.2 “A” Class Licensed Institutions 5,572,724 5,061,523
2.3 Other Licensed Financial Institutions
2.5 Individuals 5,590 5,301
2.6 Others
B. Margin Deposits 207,683,932 147,197,848
1. Employees Guarantee 15,352,975
2. Guarantee Margin 72,810,868 60,202,728
3. Margin on Letter of Credit 119,520,090 86,995,120
C. Others 12,281,186 6,436,778
1. Local Currency 12,281,186 6,436,778
1.1 Financial Institutions
1.2 Other Organized Institutions
1.3 Individuals 12,281,186 6,436,778
2. Foreign Currency - -
2.1 Financial Institutions
2.2 Other Organized Institutions
2.3 Individuals
Total of Non-Interest Bearing Accounts (1) 1,666,026,045 1,390,809,835

KUMARI BANK LIMITED
Deposit Liabilities (Continued….)

2. Interest Bearing Accounts
A. Saving Deposits 8,005,479,731 7,234,105,180
1. Local Currency 7,898,967,088 7,117,127,540
1.1 Organized Institutions 62,331,685 36,192,699
1.2 Individuals 7,836,635,403 7,080,934,841
1.3 Others
2.1 Organized Institutions
2.2 Individuals 106,512,643 116,977,640
2.3 Others
B. Fixed Deposits 14,469,717,535 12,141,754,675
1. Local Currency 14,002,357,535 11,445,625,925
1.1 Organized Institutions 11,673,164,532 9,538,004,526
1.2 Individuals 2,329,193,003 1,907,621,400
1.3 Others
2.1 Organized Institutions 457,200,000 693,720,000
2.2 Individuals 10,160,000 2,408,750
2.3 Others
C. Call Deposits 9,280,687,635 6,811,706,455
1. Local Currency 9,040,048,625 6,585,251,433
1.1 “A” Class Licensed Institutions
1.2 Other Licensed Financial Institutions 4,832,152,198 2,496,286,718
1.3 Other Organized Institutions 4,081,208,165 4,033,820,827
1.4 Individuals 126,688,262 55,143,888
1.5 Others
2.1 “A” Class Licensed Institutions
2.2 Other Licensed Financial Institutions
2.4 Individuals
2.5 Others
D. Certificate of Deposit - -
1. Organized Institutions
2. Individuals
3. Others
Total of Interest Bearing Accounts (2) 31,755,884,901 26,187,566,310
Total Deposits (1+2) 33,421,910,946 27,578,376,145

Bills Payable

1. Local Currency 25,976,295 15,747,781
Total 32,782,142 22,428,891
Other Liabilities

1. Pension/Gratuity Fund - -
2. Employees Provident Fund - -
3. Employees Welfare Fund 162,972 84,820
4. Provision for Staff Bonus 56,583,271 49,714,179
5. Interest Payable on Deposits 50,397,482 36,881,320
6. Interest Payable on Borrowings 347,778 94,335
7. Unearned Discount and Commission 6,840,372 12,871,826
8. Sundry Creditors 44,009,920 37,378,646
9. Branch Reconciliation Account - -
10. Deferred Tax Liability 1,167,934 -
11. Dividend Payable 7,839,484 9,985,798
12. Others 63,074,193 72,472,989
a. Audit Fees 417,958 826,030
b. Others 62,656,235 71,646,959
Total 230,423,406 219,483,913
Cash Balance
As at Ashad End 2072 (16 Jul 2015)

1. Local Currency (Including Coins) 815,520,186 763,020,416
Total 829,463,812 777,836,820

Balance with Nepal Rastra Bank

Foreign Currency in equivalent NPR Current Year Total Previous Year

Particulars Local Currency
INR Convertible FCY Total (NPR) (NPR)
1. Nepal Rastra Bank 3,349,001,322 3,829,349,524
a. Current Account 3,339,668,897 9,332,425 9,332,425 3,349,001,322 3,829,349,524
b. Other Account - - -
Balance with Banks/Financial Institution

Foreign Currency in Rupee equivalent Current Year Previous Year

Particulars Local Currency
INR. Convertible FCY Total (NPR) (NPR)
1. Local Licensed 169,571,096 - 4,592,766 4,592,766 174,163,862 110,260,147
Institutions
a. Current Account 169,571,096 4,592,766 4,592,766 174,163,862 110,260,147
2. Foreign Banks - 222,574,347 415,771,549 638,345,896 638,345,896 178,238,961
a. Current Account 222,574,347 415,771,549 638,345,896 638,345,896 178,238,961
Total 169,571,096 222,574,347 420,364,315 642,938,662 812,509,759 288,499,107
Money at Call and Short Notice


1. Local Currency - -
Total 436,880,592 507,478,409

Investment
Purpose Previous Year

Particulars Current Year (NPR)
Trading Other (NPR)
1. Treasury Bills of Nepal Government - 2,570,072,292 2,570,072,292 2,368,403,910
2. Saving Certificate of Nepal Government - - -
3. Other Bonds of Nepal Government - 1,335,670,164 1,335,670,164 289,282,812
4. Nepal Rastra Bank Bonds - - -
5. Foreign Bonds - - -
6. Local Licensed Institutions - - -
7. Foreign Banks - 931,912,179 931,912,179 482,003,668
8. Shares of Organized Institutions - 24,935,500 24,935,500 24,935,500
9. Bonds and Debentures in Organized Institutions - - -
10. Other Investment - - -
Total Investment - 4,862,590,135 4,862,590,135 3,164,625,890
Provision - - - -
Net Investment - 4,862,590,135.00 4,862,590,135 3,164,625,890
KUMARI BANK LIMITED Schedule 4.12 (A)
Investment in Shares, Debentures and Bonds

Market
Par value Provision Current Year Previous
Particulars Value
(NPR) (NPR) (NPR) Year (NPR)
(NPR)
1. Investment in Shares 24,935,500 - - 24,935,500 24,935,500
1.1 Credit Information Centre Limited 1,235,500 - - 1,235,500 1,235,500
36,599 Ordinary Shares of NPR 100 each, fully paid
Primary Shares 3530 Kitta of NPR 100 each
Right Shares 8825 Kitta of NPR 100 each
Bonus Shares 24,244 Kitta of NPR 100 each
1.2 Nepal Clearing House Limited 2,500,000 - - 2,500,000 2,500,000
1.3 National Banking Training Institute 1,200,000 - - 1,200,000 1,200,000
1.4 National Micro Finance Bank Limited 20,000,000 - - 20,000,000 20,000,000
2. Investment in Debentures and Bonds - - - - -
Total Investment 24,935,500 - - 24,935,500 24,935,500
3. Provision for Loss
3.1 Up to previous year - - - - -
3.2 Change in current year - - - - -
Total Provision - - - - -
Net Investment 24,935,500 - - 24,935,500 24,935,500

KUMARI BANK LIMITED Schedule 4.12.1
Investment Held for Trading

Current This Year Previous Year (NPR)

Par Last Market
Particulars Market Price Remarks
Value Price (A) Gain / Loss (B-A) Gain / Loss (NPR)
(B)
1. Treasury Bill of Nepal Government - - - - -
2. Saving Bond of Nepal Government - - - - -
3. Other Bond of Nepal Government - - - - -
4. NRB Bond - - - - -
5. Foreign Bond - - - - -
6. Shares of Domestic Licensed
- - - - -
Institutions
7. Debenture & Bonds of Domestic
- - - - -
Licensed Institutions
8. Shares, Debentures & Bonds of
- - - - -
Domestic Institutions
9. Placement in Foreign Banks - - - - -
10. Interbank Lending - - - - -
11. Other Investments - - - - -
Total Investment - - - - -
Investment Held to Maturity

Previous Year
This Year
Cumulative Current Year (NPR)
Particulars Par Value (A) Remarks
Loss (B) Loss (C) Gain / Loss
Gain / Loss (NPR)
(A-B-C)
1. Treasury Bill of Nepal 2,570,072,292 - - - 2,368,403,910
Government
2. Saving Bond of Nepal - - - - -
Government
3. Other Bond of Nepal - - - 289,282,812
Government 1,335,670,164
4. NRB Bond - - - - -
5. Foreign Bond - - - - -
6. Shares of Local Licensed - - - - -
Institutions
7. Debenture & Bonds of Local - - - - -
8. Shares, Debentures & Bonds of - - - - -
Local Organised Bodies
9. Placement in Foreign Banks 931,912,179 - - - 482,003,668
10. Other Investments - - - - -
Total Investment 4,837,654,635 - - - 3,139,690,390

Investment Available for Sale

Previous Year
Closing Prevailing Current Year
(NPR)
Particulars Par Value (A) Market Market Remarks
Price (A) Price (B) Adjustment
Gain / Loss (NPR)
Reserve (B - A)
1. Treasury Bill of Nepal - - - -
Government
2. Saving Bond of Nepal - - - -
Government
3. Other Bond of Nepal Government - - - -
4. NRB Bond - - - -
5. Foreign Bond - - - -
6. Shares of Domestic Licensed - - - -
Institutions
7. Debenture & Bonds of Domestic - - - -
8. Shares, Debentures & Bonds of 24,935,500 - - 24,935,500
Domestic Corporate Bodies
9. Placement in Foreign Banks - - -
10. Other Investments - - - -
Total Investment 24,935,500 - - 24,935,500

KUMARI BANK LIMITED
Classification of Loans, Advances and Bills Purchase & Provision
As at Ashad End 2072 (16 July 2015) Schedule 4.13
Loans & Advances Bills Purchased/Discounted

Domestic Current Year Previous Year
Particulars
Priority Sector Foreign Total Domestic Foreign Total (NPR) (NPR)
Other
Insured Uninsured
1. Performing Loan - 1,154,040,867 25,195,861,359 - 26,349,902,226 39,235,000 7,254,327 46,489,327 26,396,391,553 21,890,188,512
1.1 Pass 1,154,040,867 24,886,781,095 - 26,040,821,962 39,235,000 7,254,327 46,489,327 26,087,311,288 21,890,188,512
1.2 Watch List - 309,080,265 - 309,080,265 - - - 309,080,265 -
2. Non-Performing Loan - 664,706 673,334,200 - 673,998,907 - - - 673,998,907 918,314,503
2.1 Restructured 66,689,228 66,689,228 - - - 66,689,228 68,732,063
2.2 Sub-Standard 49,918,549 49,918,549 - - - 49,918,549 49,785,517
2.3 Doubtful 41,819,310 41,819,310 - - - 41,819,310 258,697,625
2.4 Loss 664,706 514,907,114 515,571,821 - - - 515,571,821 541,099,299
A. Total Loan - 1,154,705,573 25,869,195,559 - 27,023,901,133 39,235,000 7,254,327 46,489,327 27,070,390,460 22,808,503,015
3. Loan Loss Provision
3.1 Pass - 11,540,409 248,867,811 - 260,408,220 392,350 72,543 464,893 260,873,113 218,901,885
3.2 Watch List - - 6,181,605 - 6,181,605 - - - 6,181,605
3.3 Restructured - - 8,336,153 - 8,336,153 - - - 8,336,153 8,591,508
3.4 Sub-Standard - - 12,479,637 - 12,479,637 - - - 12,479,637 12,446,379
3.5 Doubtful - - 20,909,655 - 20,909,655 - - - 20,909,655 129,348,812
3.6 Loss - 664,706 514,907,114 - 515,571,821 - - - 515,571,821 541,099,299
B. Total Provisioning - 12,205,115 811,681,976 - 823,887,091 392,350 72,543 464,893 824,351,984 910,387,883
4. Provisioning up to previous
year
4.1 Pass - 9,931,391 208,825,456 - 218,756,847 11,000 134,038 145,038 218,901,885 193,431,423
4.2 Watch List
4.3 Restructured - - 8,591,508 - 8,591,508 - - - 8,591,508 -
4.4 Sub-Standard - - 12,446,379 - 12,446,379 - - - 12,446,379 5,866,853
4.5 Doubtful - - 129,348,812 - 129,348,812 - - - 129,348,812 202,006,491
4.6 Loss - 664,706 540,434,592 - 541,099,299 - - - 541,099,299 349,166,251
C. Total provision till last year - 10,596,098 899,646,747 - 910,242,845 11,000 134,038 145,038 910,387,883 750,471,018
D. Written Back from last year - - (134,221,990) - (134,221,990) - - - (134,221,990) (72,657,678)
provision
E. Additional Provision in this - 1,609,018 46,257,219 - 47,866,236 381,350 (61,495) 319,855 48,186,091 232,574,543
year

Change in this year - 1,609,018 (87,964,771) - (86,355,754) 381,350 (61,495) 319,855 (86,035,899) 159,916,865
Net Loan (A-B) 1,142,500,458 25,057,513,584 - 26,200,014,042 38,842,650 7,181,784 46,024,434 26,246,038,476 21,898,115,132
KUMARI BANK LIMITED Schedule 4.13 (A)
Security for Loan, Advances and Bills Purchased


A. Secured
1. Against Security of Movable/Immovable Assets 25,244,715,236 21,943,331,334
2. Against Guarantee of Local Licensed Institutions
3. Against Government Guarantee 147,321,989 146,702,311
4. Against Guarantee of Internationally Rated Bank
5. Against Security of Export Documents
6. Against Security of Fixed Deposit Receipts 104,968,292 101,432,866
a. Own FDR 104,968,292 101,432,866
b. FDR of Other Licensed Institutions
7. Against Security of Government Bonds
8. Against Counter Guarantee
9. Against Personal Guarantee
10. Against Other Securities 1,573,384,943 617,036,504
B. Unsecured - -
Total 27,070,390,460 22,808,503,015

Schedule 4.14
KUMARI BANK LIMITED
Fixed Assets
ASSETS
Current Year Previous Year
Particulars Office
Building Vehicles Machinery Others (NPR) (NPR)
Equipment
1. Cost Price
a. Previous Year’s Balance 4,814,041 114,161,058 - 291,997,737 44,304,268 455,277,104 443,039,332
b. Addition This Year 27,548,126 32,329,294 59,877,420 31,159,957
c. Revaluation/Write Back This Year - -
d. This Year Sold (10,900,000) (956,490) (11,856,490) (18,922,185)
e. This Year Writte Off - -
Total Cost (a+b+c+d+e) 4,814,041 130,809,184 - 323,370,541 44,304,268 503,298,034 455,277,104
2. Depreciation
a. Up to previous year 1,564,277 51,715,069 - 227,468,246 37,470,093 318,217,685 291,772,602
b. For this year 162,488 12,539,109 18,965,427 2,744,339 34,411,363 38,468,843
c. Depreciation on Revaluation/Write off (3,827,352) (847,278) (4,674,630) (12,023,757)
d. Depreciation Adjusment/Add back - -
Total Depreciation (a+b+c+d) 1,726,766 60,426,826 - 245,586,394 40,214,432 347,954,417 318,217,688
3. Book Value (WDV*) (1-2) 3,087,276 70,382,358 - 77,784,147 4,089,835 155,343,617 137,059,417
4. Land - - - - - 85,593,635 85,593,635
5. Capital Work In Progress (pending Capitalization) - - - - - 261,369 261,369
6. Leasehold Assets - - - - - 18,264,856 12,861,534
Total (3+4+5+6) 259,463,477 235,775,955
* Written Down Value
Leasehold Details Current Year (NPR)
Opening Value - Gross 98,117,584
Add - Addition During the Year 13,862,072
Less - Write Off/Sales During the Year (4,518,772)
Total Cost 107,460,884
Accumilated Depreciation Up to Last Year 85,256,049
Depreciation for Current Year 8,404,642
Total Depreciation on Asset Write Off/Sale (4,464,663)
Total Depreciation 89,196,028

Balance at the End of the Year 18,264,856
Non Banking Assets

Acquired Total Amount Provision for loss Net

Name & Address of Borrower or Previous
Date of Non of Non Banking Non Banking
Party Amount Year (NPR)
Banking Asset Asset Percent Asset (NPR)
(NPR)
Sarita Rajbhandari (Vaidhya) 4-Dec-12 5,209,800 100 5,209,800 - 5,216,247
Sarita Rajbhandari (Vaidhya) 31-Mar-13 6,447 100 6,447 -
Shilu Housing and Developers 5-Jul-13 52,795,000 100 52,795,000 -
Pvt Ltd 52,795,000
Opportunity Manpower Service 27-Jan-14 2,892,225 100 2,892,225 - 2,892,225
Everest Floriculture Pvt.Ltd. 5-Apr-15 20,546,677 100 20,546,677 -
Aayusha Developers 5-Jul-15 135,124,850 100 135,124,850 -
Total 216,574,998 216,574,998 - 60,903,472
Other Assets

1. Stock of Stationery 5,605,510 3,142,044
2. Income receivable on Investment 12,422,551 5,118,022
3. Accrued Interest Receivable on Loan 41,433,647 15,281,297
Accrued Interest Receivable on Loan 252,895,774 295,316,052
Less:Interest Suspense Account (211,462,127) (280,034,755)
4. Commission Receivable - -
5. Sundry Debtors 15,511,818 8,269,618
6. Staff Loan & Advances 207,019,813 183,878,752
7. Pre Payments 15,783,855 16,259,490
8. Cash in Transit - -
9. Other Transit items (including Cheques) - -
10. Drafts payment without notice - -
11. Expenses not written off - -
12. Branch Reconciliation Account 86,002 500
13. Deferred Tax Assets 849,607
14. Others 280,700,058 86,121,878
a. Advance Tax (net) 26,142,097 12,013,147
b. Others 254,557,962 74,108,731
Total 578,563,253 318,921,208

KUMARI BANK LIMITED Schedule 4.16(A)
Other Assets (Additional Statement)

Current Year (NPR) Previous Year

Particulars
Up to 1 Year 1 to 3 Year Above 3 Years Total (NPR)
1. Accrued Interest Receivable on Loan 107,216,377 69,216,729 76,462,669 252,895,774 295,316,052
2. Drafts Payment without notice - -
3. Branch Reconciliation Account 86,002 86,002 500
4. Domestic/Foreign Agency Account - -
Contingent Liabilities

1. Claims Lodged but not accepted by the Institution - -
2. Letter of Credit (Full Amount) 2,152,476,622 1,563,482,460
a. Maturity period up to 6 months 980,633,705 981,827,687
b. Maturity period more than 6 months 1,171,842,917 581,654,773
3. Rediscounted Bills -
4. Unmatured Guarantees/Bonds 1,069,670,702 882,691,809
a. Bid Bonds 55,148,500 34,605,053
b. Performance Bonds 1,014,522,202 848,086,756
c. Other Guarantee/Bonds
5. Unpaid Shares Investment - -
6. Outstanding of Forward Exchange Contract Liabilities 1,870,505,918 563,686,099
7. Bills under Collection
8. Acceptance & Endorsement 410,780,664 317,542,960
9. Underwriting Commitment
10. Irrevocable Loan Commitment 1,210,163,679 1,118,154,971
11. Guarantees against Counter Guarantee of Internationally Rated Banks
12. Advance Payment Guarantee 446,300,237 358,401,412
13. Financial Guarantee for loan disbursement
14. Contingent Liabilities on Income Tax
15. Others

Interest Income

A. On Loans, Advances and Overdraft 2,384,355,840 2,323,992,056
1. Loans & Advances 1,456,557,650 1,342,659,310
2. Overdraft 927,798,191 981,332,747
B. On Investment 41,231,293 81,000,936
1. Government Securities 41,231,293 81,000,936
a. Treasury Bills 18,518,587 58,720,004
b. Development Bonds 22,712,706 22,280,932
c. National Saving Certificates
2. Foreign Debt Papers - -
a. ……… - -
b. ……… - -
3. Nepal Rastra Bank Bonds - -
4. Debenture & Bonds -
5. Interest on Interbank Investment - -
a. Bank/ Financial Institutions - -
b. Other Institutions - -
C. On Agency Balances 407,238 438,704
1. Domestic Banks/ Financial Institutions - -
2. Foreign Banks 407,238 438,704
D. On Money at Call and Short Notice 7,136,550 5,352,704
1. Domestic Banks/Financial Institutions 3,664,183 1,046,270
2. Foreign Banks 3,472,367 4,306,434
E. On Others - -
1. Certificate of Deposits - -
2. Inter-Bank/ Financial Institution Loan - -
3. Others - -
Total 2,433,130,920 2,410,784,399

Interest Expenses

A. On Deposit Liabilities 1,506,003,864 1,574,507,984
1. Fixed Deposits 875,950,202 943,819,484
1.1 Local Currency 864,002,347 914,271,994
1.2 Foreign Currency 11,947,855 29,547,491
2. Saving Deposits 248,500,598 291,086,737
2.1 Local Currency 246,246,200 288,963,778
3. Call Deposits 381,553,065 339,601,762
3.1 Local Currency 375,868,731 335,238,757
4. Certificate of Deposits -
B. On Borrowings 1,361,133 803,905
1. Debentures & Bonds
2. Loan from Nepal Rastra Bank 1,361,133 803,905
3. Inter Bank /Financial Institutions Borrowing
4. Other Organized Institution
5. Other Loans
C. On Others - -
1. - -
2. - -
Total 1,507,364,997 1,575,311,889

Commission and Discount Income


A. Bills Purchase & Discount 341,008 1,158,472
1. Local 341,008 1,158,472
2. Foreign
B. Commission 51,965,227 47,647,185
1. Letters of Credit 15,636,883 14,706,216
2. Guarantees 17,439,721 15,164,234
3. Collection Fees 1,062,010 917,111
4. Remittance Fees 17,826,614 16,859,624
5. Credit Card
6. Share Underwriting/Issue
7. Government Transactions
8. E. Pra. Commission
9. Exchange Fee
C. Others 102,328,457 139,919,824
Total 154,634,692 188,725,481
Other Operating Income


1. Safe Deposit Lockers Rental 2,215,454 1,769,948
2. Issue & Renewals of Credit Cards
3. Issue & Renewals of ATM Cards 28,422,535 31,728,102
4. Telex / T. T./ SWIFT 4,515,714 4,445,123
5. Service Charges
6. Renewal Fees
7. Others 12,514,418 19,001,437
Total 47,668,121 56,944,610

Exchange Fluctuation Gain/Loss


a. From Revaluation 14,323,937 23,518,491
b. From Trading (except Exchange Fees) 80,927,408 61,636,986
Total Gain (Loss) 95,251,346 85,155,477
Expenses Relating to Employees


1. Salary 122,383,187 98,895,813
2. Allowances 79,977,791 63,131,407
a. Normal Allowance 37,565,922 29,950,802
b. Inchargeship Allowance 185,677 88,057
c. Relocation Allowance 333,462 364,767
d. Outstation Allowance 5,809,251 3,939,517
e. Dashain Allowance 11,074,130 10,829,686
f. Vehicle Maintenance Allowance 705,973 741,180
g. Leave Fare Allowance 23,640,954 17,165,505
h. International Deputation Allowance 662,420 51,893
3. Contribution to Provident Fund 12,033,321 9,748,444
4. Training Expenses 1,680,076 2,922,712
5. Uniform 3,101,195 2,479,296
6. Medical 8,230,016 7,650,418
7. Insurance 6,737,030 7,477,821
8. Gratuity Expenses 31,738,572 13,317,642
9. Others 18,375,767 16,077,604
a. Wages 7,031,589 5,978,149
b. Teller Risk Fund 804,477 889,454
c. Other Staff Benefits 3,603,501 3,003,575
d. Overtime 6,936,201 6,206,426
Total 284,256,955 221,701,158

Other Operating Expenses


1. House Rent 59,544,865 55,744,270
2. Electricity & Water 18,832,223 18,430,039
3. Repair & Maintenance 1,969,128 1,640,955
a. Building 407,592 426,455
b. Vehicles 1,561,537 1,214,500
c. Others
4. Insurance 10,185,811 10,667,741
5. Postage, Telex, Telephone & Fax 17,919,152 18,625,371
6. Office Equipment, Furniture and Repair 4,326,106 4,074,115
7. Travelling Allowances & Expenses 1,864,106 1,574,625
8. Stationery & Printing 6,830,651 6,207,993
9. Periodicals & Books 524,568 498,919
10. Advertisements 6,554,921 5,402,097
11. Legal Expenses 763,652 920,788
12. Donations 5,127,500 6,000
13. Expenses relating to Board of Directors 3,632,860 2,291,800
a. Meeting Fees 3,175,033 2,104,300
b. Other Expenses 457,826 187,500
14. Annual General Meeting Expenses 759,603 688,181
15. Expenses relating to Audit 948,327 892,904
a. Audit Fees 423,581 403,410
b. Other Expenses 524,746 489,494
16. Commission on Fund Transfer - -
17. Depreciation on Fixed Assets 42,816,005 48,030,641
18. Amortization of Pre-operating Expenses - -
19. Share Issue expenses - -
20. Technical Services Reimbursment - -
21. Entertainment Expenses - -
22. Written Off Expenses - -
23. Security Expenses 25,547,199 23,760,319
24. Credit Guarantee Premium
25. Commission & Discount
26. Others 45,676,686 40,663,900
a. Transport 8,012,460 8,858,881
b. Professional Fees 432,684 1,570,610
c. Public Relation Expenses 1,349,747 923,827
d. Correspondent Banking Charges 960,135 435,998
e. Fees and Taxes 25,892,677
31,255,939
f. Miscellaneous 1,161,247 591,080
g. Janitorial 2,504,474 2,390,827
Total 253,823,364 240,120,657

Provision for Possible Losses


1. Increase in Loss Provision on Loans 142,652,474 234,189,383
2. Increase in Provision for Loss on Investment
3. Provision for loss on Non-Banking Assets 141,839,063 2,122,338
4. Provision for Other Assets
Total 284,491,537 236,311,721
Non-Operating Income / Loss


1. Profit/ (Loss) on Sale of Investments
2. Profit/ (Loss) on Sale of Assets (6,120) (10,380)
3. Dividend 866,381 635,536
4. Subsidies received from Nepal Rastra Bank - -
a. Compensation for losses of specified branches - -
b. Interest Compensation - -
c. Exchange Counter - -
5. Others (7,880,881) 1,915,189
Net Non-Operating Income (Loss) (7,020,620) 2,540,345
Write Back from Provision for Possible Losses

(Fiscal Year 2014/15)

1. Provision for Loan Loss Written Back 228,688,373 74,272,518
2. Provision against Non Banking Assets Written Back 1,878,565
3. Provision for Investment Written Back
4. Provision for other Assets Written Back
Total 228,688,373 76,151,082

Income/ (Expenses) from Extra Ordinary Transactions

Particulars Current Year NPR Previous Year NPR

1. Recovery of Written Off Loan - -
2. Voluntary Retirement Expenses - -
3. Irrecoverable Loan Write Off (4.28 (A)) - -
4. Other Expenses/Income - -
5. ……………………………………………… - -
Total - -
Statement of Loan Written-Off

Fiscal Year 2071/72 (2014/15)
Loan
Basis of
Types of Written off Type of Security Approving Initiations Made for
S.N. Valuation of Remarks
Loan Amount & Value Authority & Recovery
Collateral
Level
1 Consortium 9,581,198 Land and Panchikrit mulya Suman Joshi, Being the loan financed
Term Loan Building conducted by AGM under consortium
representative participated by 7
of CDO office, financial institutions,
Malpot office, the recovery process
VDC office has been carried out
-
and local in in joint effort lead by
coordination of HBL comprising of
lead Bank publishing call notice,
auction notice, booking
into NBA and filing
case at DRT.
Total 9,581,198 396,318,500

Statement of Loans and Advances Extended to Directors /

Chief Executive / Promoters / Employees and Shareholders
The Statement of amount included under total amount of Bills Purchased and Discounted, Loans, Advances and
Overdraft, provided to the Directors, Chief Executive, Promoters, Employees, Shareholders and the individual members
of ‘ their undivided family’ or against the guarantee of such person or to the organisation or, companies in which
such individual are ‘managing agent’ are as follows:
Amount in NPR
Outstanding up to Recovered in Current Additional Outstanding as of
Name of Promoter/Director/ Last Year Year Ashad End 2071
Lending in
Chief Executive
Principal Interest Principal Interest this year Principal Interest
A. Directors
1. ……………………
2. ……………………
3. ……………………
B. Chief Executive
1. ……………………
2. ……………………
C. Promoter
D. Employee
E. Shareholders
Total

Table of Capital Fund

End of Ashad 2072 (16 July 2015)
1.1. RISK WEIGHTED EXPOSURES This Year (NPR) Previous Year (NPR)
a Risk Weighted Exposure for Credit Risk 29,448,841 24,136,981
b Risk Weighted Exposure for Operational Risk 1,800,154 1,633,844
c Risk Weighted Exposure for Market Risk 89,998 170,673
Adjustments under Pillar II 31,338,993 25,941,498
Add: 3% of the total RWE due to non compliance to Disclosure Requirement
Addition to RWE as per supervisiory review (3%) 940,170 778,245
Add RWE equvalent to reciprocal of capital charge of 2 % of gross income. 239,377 256,105
Add: ...% of Total Deposit due to Insufficient Liquid Assets
Total Risk Weighted Exposure (After Bank’s adjustment of Pillar II) 32,518,540 26,975,848
1.2. CAPITAL This Year (NPR) Previous Year (NPR)

Core Capital (Tier I) 3,214,663 2,926,215
a Paid Up Equity Share Capital 2,431,682 1,828,332
b Irredeemable Non- cumulative Preference Share
c Share Premium - -
d Proposed Bonus Equity Share 267,485 603,350
e Statutory General Reserves 546,371 467,413
f Retained Earnings/Loss till Previous Year 13,394 26,270
g Un-audited current period profit/(loss) ( after all provision including tax) -
h Capital Redemption Reserve - -
i Capital Adjustment Reserve 44,413 -
j Dividend Equalization Reserves
k Other Free Reserves
l Less: Deffered Tax Assets - 850
m Less: Goodwill
n Less: Fictitious Assets
o Less: Investment in equity in licensed Financial Institutions
p Less: Investment in equity of institutions with financial interests
q Less: Investment in equity of institutions in excess of limits
r Less: Investments arising out of underwriting commitments
s Less: Reciprocal crossholdings
t Less: Purchase of land and building in excess of limit and unutilised (88,681)
u Less: Other Deduction
Adjustments under Pillar II - -
Less: Shortfall in Provision
Less: Loans & Facilities Extended to Related Parties & Restricted Lending

Supplementary Capital (Tier II) 311,027 259,293
a Cumulative and/or Redemable Preference Share
b Subordinated term debt - -
c Hybrid Capital Instruments
d General Loan Loss provision 267,055 218,902
e Exchange Equalization Reserve 23,972 20,391
f Investment Adjustment Reserve 20,000 20,000
g Assets Revaluation Reserve
h Other Reserve
Total Capital Fund (Tier I and Tier II) 3,525,690 3,185,508
1.3 CAPITAL ADEQUACY RATIOS Current Period Previous Year (NPR)

Tier I Capital to Total Risk Weighted Exposure (After Bank’s adjustment of Pillar II) 9.89 10.85
Tier I and Tier II Capital to Total Risk Weighted Exposure (After Bank’s adjustment 10.84 11.81
of Pillar II)

Schedule 4.30(B)
Credit Risk Exposures
Rs in ‘000
On Balance Sheet Exposures (A) “Gross Book “Specific Eligible “ Risk Risk Weighted Risk
Net Value
Value Provision CRM Weight Exposures Net Value Weighted
d=a-b-c
(a)” (b)” (c) (e) “ (f)=(d)*(e) Exposures
Cash Balance 829,464 829,464 0% - 777,837 -
Balance With Nepal Rastra Bank 3,349,001 3,349,001 0% - 3,829,350 -

Gold 0%
Investment in Nepalese Government Securities 3,905,742 3,905,742 0% - 2,657,687 -
All Other Claims on Government of Nepal 146,624 - 146,624 0% - 146,702 -
Investment in Nepal Rastra Bank Securities - 0% - - -
All Other Claims on Nepal Rastra Bank - 0% - - -
Claims in Foreign Government & Central Bank (ECA rating
- 0% - - -
0-1)
Claims in Foreign Government & Central Bank (ECA rating 2) - 20% - - -
Claims in Foreign Government & Central Bank (ECA rating
- 100% - - -
4-6)
Claims On BIS, IMF, ECB, EC and Claims On Multilateral
Development Banks(MDB’s) Recognised By Standard - 0% - - -
Framework
Claims on Other MDB’s - 100% - - -
Claims on Public Sector Entity (ECA 0 - 1) - 20% - - -
Claims on Public Sector Entity (ECA - 2) - 50% - - -
Claims on Public Sector Entity (ECA 3-6) - 100% - - -
Claims on Public Sector Entity (ECA - 7) - 150% - - -
“Claims on Domestic Banks that meet Capital Adequacy
233,483 233,483 20% 46,697 334,033 66,807
requirements”
“Claims on Domestic Banks that do not meet Capital
Adequacy 76,146 76,146 100% 76,146 45,244 45,244
Requirements”
Claims on Foreign Bank (ECA Rating 0- 1) 1,178,231 1,178,231 20% 235,646 562,242 112,448
Claims on Foreign Bank (ECA Rating - 2) 678,011 678,011 50% 339,006 326,689 163,345
Claims on Foreign Bank (ECA Rating 3-6) - 100% - - -
Claims on Foreign Bank (ECA Rating - 7) - 150% - - -
Claims on foreign bank incorporated in SAARC region
operating with a buffer of 1 %above their respective 15,430 15,430 20% 3,086 9,772 1,954
regulatory capital requirement
Claims on Domestic Corporates 15,860,516 - 15,860,516 100% 15,860,516 13,939,529 13,939,529
Claims on Foreign Corporates (ECA 0 - 1) - 20% - - -
Claims on Foreign Corporates (ECA 2) - 50% - - -
Claims on Foreign Corporates (ECA 3-6) - 100% - - -
Claims on Foreign Corporates (ECA - 7) - 150% - - -
Regulatory Retail Portfolio (Not Overdue) 4,355,263 634 4,354,630 75% 3,265,972 3,271,600 2,453,700
Claims fulfilling all creterion of regulatory retail except
- 100% - - -
granularity
Claims secured by residential properties 2,569,862 2,569,862 60% 1,541,917 1,702,549 1,021,530
Claims not fully secured by residential properties - 150% - - -
Claims secured by residential properties (Overdue) 56,435 21,597 34,839 100% 34,839 37,698 37,698
Claims secured by Commercial real estate 1,210,422 1,210,422 100% 1,210,422 1,122,258 1,122,258
Past due claims (except for claims secured by residential
941,775 544,010 397,764 150% 596,646 594,798 892,197
properties)
High Risk claims 1,929,493 1,929,493 150% 2,894,240 1,272,149 1,908,223
“Investment in equity and other capital instruments of
institutions - 100% - - -
listed in the stock exchange”
“Investment in equity and other capital instruments of
institutions 24,936 24,936 150% 37,403 24,936 37,403
not listed in the stock exchange”
Staff Loan secured by residential property 132,912 132,912 60% 79,747 110,606 66,364
Interest Receivable/ Claim on government securities 11,452 11,452 0% - 4,788 -
Cash in Transit and other cash items in the process of
- 20% - - -
collection
Other Assets (as per attachment) 2,113,655 1,421,560 692,095 100% 692,095 435,941 435,941
Total 39,618,854 1,987,167 634 37,631,054 26,914,379 31,206,408 22,304,640

Off Balance Sheet Exposures (B) “Gross Book “Specific “Risk Risk Weighted Risk
Eligible Net Value
Value Provision Weight Exposures Net Value Weighted
CRM (c) d=a-b-c
(a)” (b)” (e)” (f)=(d)*(e) Exposures
Revocable Commitments 0% - -
Bills Collection 0% - -
Forward Exchange Contract Liabilities 1,870,506 1,870,506 10% 187,051 563,686 56,369
LC Commitments With Original Maturity Up to 6 months
980,634 46,370 934,263 20% 186,853 941,805 188,361
Domestic counterparty
Foreign counterparty ECA Rating 0-1 - 20% - - -
Foreign counterparty ECA Rating 2 - 50% - - -

L C Commitments With Original Maturity over 6 months
1,171,843 12,124 1,159,719 50% 579,860 572,507 286,253
Domestic counterparty
Bid Bond, Performance Bond and Counter Guarantee
1,069,671 59,373 1,010,298 50% 505,149 841,023 420,512
Domestic Counterparty
Underwriting commitments - 50% - - -
Lending of Bank’s Securities or Posting of Securities as
- 100% - - -
collateral
Repurchase Agreements, Assets sale with recourse - 100% - - -
Advance Payment Guarantee 446,300 6,424 439,876 100% 439,876 352,176 352,176
Financial Guarantee - 100% - - -
Acceptence and Endrosements 410,781 17,139 393,642 100% 393,642 305,038 305,038
Unpaid portion of Partly paid shares and securities - 100% - - -
Irrevocable Credit Commitments (short term) 1,210,164 1,210,164 20% 242,033 1,118,155 223,631
Irrevocable Credit Commitments (long term) - 50% - - -
Other Contingent Liabilities - 100% - - -
Unpaid Guarantee Claims 200% - -
Total 7,159,898 - 141,430 7,018,467 2,534,462 4,694,391 1,832,340
Total RWE for Credit Risk before Adjustment (A + B) 46,778,752 1,987,167 142,064 44,649,521 - 29,448,841 35,900,799 24,136,981
Adjustment under Pillar II
Add:10% of the loan & facilities in excess of Single Obligor
Limits
Add:1% of the contract (sale) value in case of the sale of
credit with recourse
Total RWE for Credit Risk 46,778,752 1,987,167 142,064 44,649,521 29,448,841 35,900,799 24,136,981

Schedule 4.30(C)
KUMARI BANK LIMITED
Eligible Amount of Credit Risk Mitigation (CRM)
NPR In ‘000
“Deposit Deposits Sec/G’tee G’tee of Sec/G’tee
Govt.&NRB G’tee of G’tees
with with other Gold of other Domestic of Foreign Total
Credit exposures Securities Govt.of Nepal of MDBs
bank” banks/FI Sovereigns Banks Banks
(a) (b) (c) (d) (e) (f) (g) (h) (i)

On Balance Sheet Credit exposures
Claims on Foreign government and Central
-
Bank (ECA-2)
-
Bank (ECA-3)
-
Bank (ECA-4-6)
-
Bank (ECA-7)
Claim on Other Multilateral Development
-
Banks
Claims on Public Sector Entity(ECA-0-1) -
Claims on Public Sector Entity(ECA-2) -
Claims on Public Sector Entity(ECA-3-6) -
Claims on Public Sector Entity(ECA -7) -
Claims on domestic banks that meet capital
-
adequacy requiremaent
Claims on domestic banks that do not meet
-
capital adequacy requiremaent
Claims to a Foreign bank (ECA Rating 0-1) -
Claims to a Foreign bank(ECA Rating 2) -
Claims to a Foreign bank(ECA Rating 3-6) -
Claims to a Foreign bank(ECA Rating 7) -
Claims on foreign bank incorporated in SAARC
region operating with a buffer of 1 %above -
their respective regulatory capital requiremente
Claims on Domestic Corporates -
Claims on Foreign Corporates (ECA 0-1) -
Claims on Foreign Corporates (ECA 2) -
Claims on Foreign Corporates (ECA 3-6) -
Claims on Foreign Corporates (ECA 7) -
Regulatory Retail Portfolio (Not Overdue) 634 634
Claims fulfilling all creterion of regulatory
-
retail except granularity
Claims secured by residential properties -
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 -
“Investment in equity and other capital
instruments of institutions -
listed in the stock exchange”
“Investment in equity and other capital
instruments of institutions -
not listed in the stock exchange”
Other Assets (as per attachment) - - -
TOTAL 634 - - - - - - - - 634
Off Balance Sheet Exposures

Forward Exchange Contract Liabilities
LC Commitments With Original Maturity Up to
46,370 46,370
6 months domestic counterparty
foreign counterparty (ECA Rating 0-1) -
foreign counterparty (ECA Rating 2) -
L C Commitments With Original Maturity Over
12,124 12,124
6 months domestic counterparty

Bid Bond and Performance Bond(Domestic) 59,373 59,373
Underwriting commitments -
Lending of Bank’s Securities or Posting of
-

Securities as collateral
Repurchase Agreements,Assets salewith
-
resourse
Advance Payment Guarantee 6,424 6,424
Financial Guarantee -
Acceptances and Endorsements 17,139 17,139
Unpaid portion of partly paid shares and
-
securities
Irrevocable Credit Commitments - short -
Irrevocable Credit Commitments -long -
Other Contingent Liabilities -
Unpaid Guarantee Claims -
TOTAL 141,430 - - - - - - - - 141,430
GRAND TOTAL 142,064 - - - - - - - - 142,064
KUMARI BANK LIMITED Schedule 4.30 (D)
Risk Weight Exposure for Operational Risk

Rs in ‘000
“ Year 1 “Year 2 “Year 3 Previous
Particular
(2011/12) “ (2012/13)” (2013/14)” Year (NPR)
Net Interest Income 819,088 978,025 835,473
Commission and Discount income 110,866 138,200 188,725
Other Operating Income 48,812 41,862 56,945
Exchange Fluctuation Income 44,206 56,993 85,155
Addititonal Interest Suspense during the period 99,927 65,445 30,585
Total Gross Income (a) 1,122,899 1,280,525 1,196,884
Alfa (b) 15% 15% 15% 15%
Fixed Percentage of Gross Income {C= (axb)} 168,435 192,079 179,533
Capital Requirement for operational risk (d) = ( average of c) 180,015 163,384
Risk Weight ( reciprocal of capital requirement of 10 %) in times (e) 10 10
Equivalent Risk Weight Exposure {f=(dxe)} 1,800,154 1,633,844

KUMARI BANK LIMITED Schedule 4.30 (E)
Risk Weight Exposure for Market Risk

Rs in ‘000
S.No Currency “Open Position (FCY)” “Open Position (NPR)” “Relevant Open Position” Previous Year (NPR)
1 INR (104,028) (166,523) 166,523 79,702
2 USD 60 6,097 6,097 245,678
3 GBP (3) (412) 412 299
4 EUR (1) (84) 84 1,456
5 THB (10) (31) 31 10
6 CHF - - - 236
7 AUD (15) (1,095) 1,095 5,379
8 CAD (5) (416) 416 364
9 SGD (0) (18) 18 54
10 JPY (579) (475) 475 2,735
11 HKD (0) (2) 2 4
12 DKK (12) (175) 175 278
13 SEK (3) (36) 36 51
14 SAR (79) (2,125) 2,125 2,255
15 QAR (31) (868) 868 1,062
16 AED (20) (549) 549 605
17 MYR (31) (822) 822 511
18 KRW (300) (26) 26 -
19 CNY (1) (24) 24 443
20 KWD (1) (216) 216 221
21 BHD (0) (3) 3 5
Total Open Position (a) 179,997 341,347
Fixed Pecentage (b) 5% 5%
Capital Charge for Market Risk [c=(aXb)] 9,000 17,067
Risk Weight (reciprocal of capital requiremnet of 10%) in times (d) 10 10
Equivalent Risk Weight Exposure {e=(cXd)} 89,998 170,673

Schedule 4.31
KUMARI BANK LIMITED
PRINCIPAL INDICATORS
(For 7 years)
F. Y. F. Y. F. Y. F. Y. F. Y. F. Y. F. Y.
Particulars Indicators
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15
1. Net Profit/Gross Income % 36.98% 37.39% 28.70% 26.95% 23.99% 29.29% 32.27%
2. Earnings Per Share NPR 22.04 24.24 15.67 17.18 18.17 18.69 16.24
3. Market Value per Share NPR 700 468 266 242 260 536 380
4. Price Earning Ratio Ratio 31.76 19.31 16.98 14.09 14.31 28.68 23.41
5. Stock Dividend on share capital % 10.58% 12.00% 8.44% 0.00% 14.00% 33.00% 11.00%
6. Cash Dividend on share Capital % 0.55% 12.00% 0.44% 7.00% 0.74% 1.74% 0.58%
7. Interest Income/Loans & Advances % 8.34% 11.58% 13.75% 12.26% 11.72% 10.19% 8.81%
8. Employee Expenses/Total Operating Expenses % 40.73% 41.49% 44.20% 47.82% 46.93% 48.01% 52.83%
9. Interest Expenses to Total Deposit and Borrowings % 5.10% 6.66% 8.88% 7.38% 5.87% 5.67% 4.47%
10. Exchange Fluctuation Gain/Gross Income % 5.91% 4.48% 4.20% 4.32% 4.69% 7.30% 7.79%
11. Staff Bonus/ Total Employee Expenses % 24.04% 24.20% 17.55% 16.84% 17.03% 18.32% 16.60%
12. Net Profit/Loans & Advances % 1.77% 2.12% 1.68% 1.52% 1.45% 1.50% 1.46%
13. Net Profit/ Total Assets % 1.41% 1.59% 1.23% 1.10% 1.03% 1.10% 1.06%
14. Total Credit/Deposit % 94.17% 79.45% 87.87% 82.33% 79.47% 82.70% 81.00%
15. Total Operating Expenses/Total Assets % 1.54% 1.69% 1.86% 1.62% 1.54% 1.49% 1.44%
16. Adequacy of Capital Fund on Risk Weightage
Assets
a. Core Capital % 9.08% 10.29% 12.35% 11.30% 11.24% 10.85% 9.89%
b. Supplementary Capital % 2.47% 2.05% 1.41% 0.90% 0.93% 0.96% 0.96%
c. Total Capital Fund % 11.56% 12.34% 13.76% 12.20% 12.17% 11.81% 10.84%
17. Liquidity (CRR) Ratio 7.13% 8.02% 5.74% 13.52% 12.43% 13.62% 7.48%
18. Non Performing Loans/Total Loans % 0.44% 0.50% 1.12% 2.21% 2.89% 4.03% 2.49%
19. Weighted Average Interest Rate Spread % 4.17% 3.28% 3.92% 4.27% 4.62% 3.71% 3.17%
20. Book Net worth Per Share NPR 137 137 138 148 166 162 138
21. Total Shares Number 11,860,992 13,060,159 16,038,000 16,038,000 18,283,320 24,316,816 26,991,665
22. Total Employees Number 260 364 347 327 377 362 392

Schedule 4.32
KUMARI BANK LIMITED

SIGNIFICANT ACCOUNTING POLICIES
FINANCIAL YEAR 17 JULY 2014 TO 16 JULY 2015

(1 SHRAWAN 2071 TO 31 ASHAD 2072)
1. General Information 3.2 Basis of Preparation

Kumari Bank Limited (the “Bank”) is a public limited The financial statements have been prepared under
company, incorporated on 10 December 1999 and the historical cost convention. Use of certain critical
domiciled in Nepal. The address of its registered office accounting estimates and exercise judgement in the
is Durbar Marg, Kathmandu, Nepal. The Bank is listed in process of applying the Bank’s accounting policies have
Nepal Stock Exchange Limited. been done, wherever required, in conformity with NAS
and generally accepted accounting principles.
The Bank carries out commercial banking activities in
Nepal under license from Nepal Rastra Bank (the central 3.3 Interest Income
bank of Nepal) as Class “A” licensed institution. Interest income on loans and advances is recognised on
cash basis as per the directive issued by NRB, which is
2. Date of Authorization of Financial not in accordance with Nepal Accounting Standards.
Statement
The Financial Statements for the year ended on 16 July Due interest on loans that is realised after Ashad end
2015 is approved by Board of Directors (BOD) of the 2072 and till 30 Aswin 2072 has been recognised as
Bank on 03 Magh 2072 (17 January 2016). interest income on deferred cash basis which is in
compliant of NRB circular.
3. Summary of Significant Accounting
Interest for the moratorium period on some term loans
Policies as stated in point no 23 of Notes to Accounts has been
The Significant accounting policies applied in the recognised as income after capitalising it on loans which
preparation of the financial statements of the bank are is in accordance with NRB approval.
set out below. These policies have been consistently
applied to all the years presented, unless otherwise Interest income on investments is recognised on accrual
stated. basis provided that premium on government bonds
has been netted off against interest income from such
3.1 Statement of Compliance bonds.
The financial statements have been prepared in
accordance with Nepal Accounting Standards (NAS) 3.4 Commission Income
issued by the Nepal Accounting Standard Board (NASB) Guarantee commission up to NPR. 100,000 is recognised
except for exceptions as mentioned below, generally as commission income on cash basis. Commission
accepted accounting principles, and the provisions income on guarantee covering more than one fiscal year
of Bank and Financial Institution Act, 2063, directives and commission amount above NPR.100,000 is booked
issued by Nepal Rastra Bank and the Company Act, on accrual basis.
2063.

Other commission incomes are recognised as income Amounts recovered against loans written off in earlier
on accrual basis. Recognition of guarantee commission years are recognized as income in the year of recovery.
income is not in accordance with NAS – 07 “Revenue”.
3.12 Investments
3.5 Dividend Income ◊ Investments in Government Securities are valued at
Dividend is recognised as income when the bank’s right cost.
to receive payment is established. It is recognised as ◊ Placements with maturity period up to 7 days and
income at net of withholding tax. more than 7 days are classified as money at call and
investments respectively.
3.6 Foreign Exchange Incomes ◊ Investment in shares, debenture and bonds are
◊ Foreign currency assets and liabilities as at the valued at cost or market value, whichever is lower.
Balance Sheet date have been translated at the mid Necessary reserves for certain investments have
rate (average of buying and selling rate) of exchange been created as per NRB directive.
rates prevalent as on the Balance Sheet date.
◊ Foreign currency trading gain/loss realised in the 3.13 Fixed Assets and Depreciation
foreign currency transactions is accounted for on the ◊ Fixed assets are stated at historical cost. Historical
date of transaction and based on transaction rate. cost includes expenditures that are directly
◊ Revaluation gain arising due to fluctuation in attributable to the acquisition of individual asset
exchange rate of foreign currencies is accounted item.
for and shown as “Revaluation Gain/Loss”. Amount ◊ Below mentioned fixed assets are depreciated on
equivalent to 25% of revaluation gain of the current Straight Line Method at the rates mentioned below -
year is appropriated to Exchange Fluctuation Reserve
as per directive issued by Nepal Rastra Bank. Asset Rate
Computer Software 20%
3.7 Interest Expenses
Leasehold 20%
Interest expense on deposit liabilities, bonds and
borrowings are accounted for on accrual basis. Battery 33.33%
3.8 Loans and Advances, Overdraft and Bills ◊ Depreciation on newly acquired fixed assets is
charged from the next month of booking. Depreciation
Purchased
of an asset ceases when it is derecognised at the
Loans and advances, overdrafts and bills purchased
time of its disposal.
include direct finance provided to the customers as
◊ Depreciation on below mentioned assets is charged
per the Bank’s policy and product papers such as bank
on the basis of diminishing value method at the rates
overdrafts, personal loans, term loans, hire purchase
mentioned below -
loans and loans to deprived sectoNPR All the loans are
subject to regular review and are graded according to the
level of credit risk and classified as per NRB Directives. Asset Rate
Total Loans and advances are stated net of loan loss Building 5%
provisions in the Balance Sheet. Office Equipments 25%
Furniture & Fixtures (Wooden & Metal) 25%
3.9 Staff Loans
Computer 25%
Staff loan has been provided as per the bank’s policy
and shown under the head ‘Other Assets’ as per NRB Vehicles 20%
Directives.
◊ Assets costing more than NPR 10,000 and/or having
3.10 Loan Loss Provision useful life more than 1 year are booked under fixed
Provision is made for possible losses on loans and assets.
advances, overdraft and bills purchase at 1% to 100% in
accordance with the directives issued by NRB. 3.14 Amortisation of Software Cost and Leasehold
Assets
3.11 Loans & Advances Write off ◊ Computer software are capitalised on cost incurred
Unrecoverable loans and advances are written off in to acquire specific software. Bank amortises such
accordance with the by-laws of the Bank approved by cost over a period of useful life, estimated as 5 years
Bank’s BOD and NRB. from the date of acquisition.

◊ Leasehold properties are capitalised on cost incurred 3.18 Stationery
to set up such assets. Such assets are amortised Stationery purchased for consumption is charged
over the period of 5 year as expense on consumption basis. FIFO method of
stationery valuation has been adopted by the bank.
3.15 Lease Rental
3.19 Non-banking Assets
The lease agreements entered into by the Bank for office Non-banking Asset is booked at lower of market price or
buildings are operating lease agreements. The total total dues, on the day before booking and provision for
payments made under operating leases are charged to the asset has been made as per NRB directive.
Rent Expenses in the profit and loss account. The details of non-banking assets as on Ashad end 2072
have been stated in point no. 24 of Notes to Accounts.
3.16 Employee Retirement Benefits
3.20 Provisions and Contingent Liabilities
The Bank has schemes of retirement benefits namely The Bank creates a provision when there is a present
Provident Fund and Gratuity Fund. Provision for obligation as a result of past events that probably
expenses on account of Provident and Gratuity Funds requires an outflow of resources and a reliable estimate
is made on accrual basis with the amount of liabilities can be made of the amount of the obligation. A disclosure
computed by the bank in accordance with its applicable for contingent liability is made when there is a possible
schemes. Contributions to retirement fund are made on obligation or a present obligation that may, but probably
a regular basis as per its rules and regulations. will not, require an outflow of resources. When there is a
possible obligation or a present obligation in respect of
3.17 Income Tax which the likelihood of outflow of resources is remote,
a. Current Income Tax no provision or disclosure is made.
Provision for current income tax is made in
accordance with the provisions of the prevailing 3.21 Staff Bonus
Income Tax Act, 2058 and Rules as amended. Provision for staff bonus is made as per the NRB
Directive.
b. Deferred Income Tax
Deferred income tax is provided on temporary
differences arising between the tax bases of assets
and liabilities and their carrying amounts in the
financial statements. It is determined using tax rates
(and laws) that have been enacted at the balance
sheet date and are expected to apply when the
related deferred income tax asset is realised or the
deferred income tax liability is settled.

Schedule 4.33
KUMARI BANK LIMITED

NOTES TO ACCOUNTS
FINANCIAL YEAR 17 JULY 2014 TO 16 JULY 2015

( 1 SHRAWAN 2071 TO 31 ASHAD 2072)
1. Provision for staff bonus 5. Gratuity Expenses

Provision for staff bonus has been provided at 10% of During the year, the Bank has provided NPR. 31,738,572/-
net profit before providing for income tax provision. This (Previous Year NPR. 13,317,642/-) on account of gratuity.
provision has been made as per NRB directive.
6. Dividend and Bonus
2. Staff Housing Fund Bank’s BOD meeting held on 03 Magh 2072 has decided
Staff Home Loan is provided as per the bank’s policy. A to propose 11% stock dividend and 0.58% cash dividend
separate housing fund in accordance with Labour Act, (for tax purpose) from the profit of the FY 2071/72.
2048 has not been created.
7. Unpaid Dividend
3. General Reserve Out of total cash dividend proposed in FY 2066/67 &
As per the requirement of Nepal Rastra Bank, 20% of FY 2068/69 which were distributed in FY 2067/68 & FY
current year’s profit has been transferred to General Re- 2069/70 respectively, cash dividend of NPR. 7,839,484 is
serve. still payable because shareholders have not yet collect-
ed the dividend.
4. Tax Settlement Outstanding / Contingent
Liability
Tax settlement up to the FY 2066/67 has been complet-
ed. Against tax reassessment order of FY 2067/68, the
bank has filed a case for Administrative Review.
8. Loan Disbursed, Recovered and Outstanding During the Year.

The loan disbursed, recovered and outstanding during the year is given below:
NPR. In Million
Opening Balance Total Disbursed Total Settled Outstanding
22,809 29,869 25,608 27,070
9. Summary of Changes in Deposit During the Year

Growth in deposits during the year is given below:
NPR. In Million
Particulars This Year (NPR) Last Year (Rs) Changes in amount
1) Current Deposit 1,458 1,244 215
a) Local Currency 1,393 1,209 184
b) Foreign Currency 65 35 30
2) Saving Deposit 8,005 7,234 771
a) Local Currency 7,899 7,117 782
b) Foreign Currency 107 117 (10)

3) Fixed Deposit 14,470 12,142 2,328
a) Local Currency 14,002 11,446 2,557
b) Foreign Currency 467 696 (229)
4) Call Deposit 9,281 6,812 2,469
a) Local Currency 9,040 6,585 2,455
b) Foreign Currency 241 226 14
5) Margin Deposit 208 147 60
a) Local Currency 208 147 60
b) Foreign Currency - - -
Total Deposit 33,422 27,578 5,844
10. Average Interest Rate Spread

Particulars Percentage
The weighted average yield rate on loans and investments 8.17
The weighted average cost rate on deposits and borrowings 5.00
The weighted average interest rate spread 3.17
11. Summary of Amortizable Expenses Yet to be Written Off

No such item.
12. Summary of Concentration of Exposure

No balance sheet and off balance sheet transaction have been highly concentrated to a single person, firm, organi-
zation or to a particular sector. Detail of highest exposure to a single person or organization is as follows:
NPR. In Million
Maximum concentration to a single customer

Particulars Total Exposure
Amount %
Loans & Advances 27,070 560 2.07
Deposits 33,422 2,065 6.18
Off Balance Sheet Items 4,079 410 10.06

13. Classification of Assets and Liabilities based on Maturity
NPR. In Million
1-90 91-180 181-270 271-365 More than

S.N. Particulars Total
days days days days 1 year
Assets
1 Cash Balance 829 - - - - 829
2 Balance with Banks & FIs 4,162 - - - - 4,162
3 Investment in Foreign Banks 830 102 - - - 932
4 Call Money 437 - - - - 437
5 Government Securities 837 362 350 1,158 1,200 3,906
6 Nepal Rastra Bank Bonds - - - - - -
7 Inter Bank & FI Lending - - - - - -
8 Loans & Advances 8,327 3,837 3,846 1,720 9,340 27,070
9 Interest Receivable 258 2 1 1 4 265
10 Reverse Repo - - - - - -
11 Acceptance Receivable - - - - - -
12 Payments under S.No. 20,21 & 22 601 918 78 189 1,159 2,944
13 Others 262 87 87 304 284 1,025
Total (A) 16,543 5,308 4,362 3,371 11,987 41,570
Liabilities
14 Current Deposits 750 250 250 250 166 1,666
15 Saving Deposits (including call) 4,322 864 864 864 10,372 17,286
16 Fixed Deposits 3,408 2,593 4,564 3,283 621 14,470
17 Debentures/Bonds - - - - - -
18 Borrowings - 328 - - - 328
Call/Short Notice - - - - - -
Inter-bank/Financial Institutions - 328 - - - 328
Refinance - - - - - -
Others - - - - - -
19 Other Liabilities and Provisions 85 7 7 7 - 105
Sundry Creditors - - - - - -
Bills Payable 16 5 5 5 - 33
Interest Payable 51 - - - - 51
Provisions - - - - - -
Others 18 1 1 1 - 22
20 Acceptance Liabilities 228 183 - - - 411
21 Irrevocable Loan Commitment 182 257 257 257 257 1,210
22 Letter of Credit/Guarantee 1,110 1,415 313 464 366 3,668
23 Repo - - - - - -
24 Payable under s.no.11 - - - - - -
25 Others 86 29 29 29 - 171
Total (B) 10,170 5,926 6,284 5,154 11,782 39,316
Net Financial Assets (A-B) 6,373 (618) (1,923) (1,783) 205 2,254
Cumulative Net Financial Assets 6,373 5,755 3,833 2,049 2,254

14. Borrowings by the bank against the collateral of own assets
The bank has no such borrowings.
15. Related Parties

Key Management Personnel
Key Management Personnel of the Bank includes Chief Executive Officer and members of the Board of Directors of
the Bank, as follows:
Mr. Santosh Kumar Lama - Chairman (Promoter)

Dr. Shobha Kant Dhakal - Director (Public)
Mr. Uttam P. Bhattarai - Director (Promoter)
Mr. Naresh Dugar - Director (Promoter)
Er. Binod Dawadi - Director (Promoter)
Mr. Puna Ram Bhandari - Director (Public)
Mr. Rasendra Bahadur Malla - Director (Public)
Mr. Rajib Giri - Acting Chief Executive Officer
Compensation to Key Management Personnel-CEO of the Bank

Amount in NPR.
Categories Current Year
Short-term employee benefits 5,538,182
Signing bonus -
Post-employment benefits -
Other long-term benefits -
Termination benefits 506,437
Share-based benefits -
Total 6,044,619
Above figure is for the period of 1 Shrawan 2071 to 17 Chaitra 2071. Then CEO resigned from the service of the bank from 18 Chaitra 2071.
In addition to the above, bank had borne the expenses relating to mobile bill and had provided vehicle facility till his
tenure in the bank.
Transaction with Key Management Personnel (BOD) of the Bank

The following provides transactions between the Bank and then Key Management Personnel (Directors) of the Bank
during the year –
Amount in NPR.
Nature of Transaction Current Year
Meeting Allowances 3,175,033
Other expenses 457,827
Total 3,632,860

16. Paid up Share Capital
Paid up share capital of the Bank has changed over the years as follows:
Fiscal Year Cumulative Paid up Capital Remarks
2057/58 350,000,000
2058/59 350,000,000
2059/60 350,000,000
2060/61 500,000,000 Initial Public Offering of NPR. 150 million
2061/62 625,000,000 Right share issue of NPR. 125 million (25%)
2062/63 750,000,000 Bonus share issue of NPR. 125 million (20%)
2063/64 900,000,000 Bonus share issue of NPR. 150 million (20%)
Right share issue of NPR. 180 million (20%). NPR. 170 million capitalized
2064/65 1,070,000,000
on balance sheet date and balance on subsequent year.
In the fiscal year 2064/65, the bank had proposed 10 % bonus share and 15
2065/66 1,186,099,200 % right share. 10 % bonus share had been capitalized as on balance sheet
date pending issuance of right share.
In the FY 2065/66, the bank had issued 10% bonus share including to those
who were released from black list during the year. Further, right share of
2066/67 1,306,015,920 NPR. 1,080,000 issued on FY 2064/65 relating to blacklisted shareholders
are included in current year’s capital subsequent to their release from black
list.
In the FY 2067/68, the bank capitalized NPR. 178,200,000 (15%) share
capital which was approved for issuance in fiscal year 2064-65. Further,
the bank auctioned 7841 numbers of shares that include right and bonus
2067/68 1,603,800,000 shares of subsequent years relating to right share approved in FY 2064-65
but issued only in FY 2067-68.
Bonus share at the rate of 8% (NPR. 118,800,000) had been proposed in
the FY 2067/68.
2068/69 1,603,800,000 -
2069/70 1,828,332,000 14% bonus share of NPR 224.532 million proposed in the FY 2069/70.
2070/71 2,431,681,560 33% bonus share of NPR 603,349,560 issued in the FY 2070-71
2071/72 2,699,166,531.60 11% bonus share of NPR 267,484,971.60 issued in the FY 2071/72
17. Sale of Land and Building

Bank has not sold its land or building during the year.
18. Deferred Tax

Component of Deferred Tax Assets
Amount in NPR.
As per financial As per Income Tax

Particulars Taxable temporary difference
statement act
Fixed assets base 173,608,473 169,715,360 3,893,113

Total 173,608,473 169,715,360 3,893,113
Current Deferred Tax Liability 1,167,934
Opening Deferred Tax Asset 849,607
Adjustment (2,017,541)
Deferred tax is calculated considering the existing tax rate of 30%.

19. Reconciliation Status
NPR. In Million
Particulars Upto 1 Year Above 1 Year to 3 Years More than 3 Years Grand Total
They Credit 39.39 - - 39.39
We Debit 0.00 - - 0.00
They Debit 2.85 0.00 - 2.85
We Credit 28.50 0.01 - 28.51
Total 70.75 0.01 - 70.76
20. Details of Software Application

Amount in NPR.
Net Opening Balance Additions during the year Amortization during the year Net Closing Balance
6,834,175 - 2,744,339 4,089,836
21. Interest Capitalisation

Following are the loans, interest on which is capitalised to recognise income in accordance with NRB approval.
These loans are the project loans interest on which were capitalised for moratorium period. Detail of such loans and
interest recognised in FY 2071/72 is as follows –
Amount in NPR.
Capitalized
SN Name of the Client Type NRB approval date
Interest
1 SANIMA MAI HYDROPOWER PVT. LTD Term Loan 3,850,778 1/29/2070
2 NEPAL HEALTH CARE CO-OPERATIVE LTD Term Loan 12,670,527 3/25/2070
3 RURU JALBIDHYUT PARIYOJANA CO.P.LTD Term Loan 6,103,595 9/30/2070
4 CHHYANGDI HYDROPOWER PVT.LTD Term Loan 2,328,861 02/02/2071
Grace period extended due
5 ELECTROCOM AND RESEARCH CENTER P. L Term Loan 2,990,173
to earthquake
6 MARUTI CEMENTS PVT.LTD Term Loan 9,242,682 6/14/2070
7 JOSHI HYDROPOWER DEV. COM. PVT. LT Term Loan 3,007,987 9/27/2069
8 MANDAKINI HYDROPOWER LTD. Term Loan 1,239,148 08/17/2071
9 SARBOTTAM CEMENT PVT. LTD Term Loan 7,181,547 9/22/2070
Total 48,615,298
22. Interest Income Recognised on Deferred Cash Basis
Of the total amount of interest due as on Ashad end 2072, interest of NPR 7,810,261 is realised in cash by 15 of
Shrawan 2072 and interest of NPR 33,623,386 is realised after 15 Shrawan 2072 till 30 Aswin 2072. Total interest
of NPR 41,433,647 so realised in cash till Aswin end 2072 has been recognised as interest income on balance sheet
date which complies NRB directive regarding recognition of interest income on deferred cash basis.
23. Capital Adjustment Reserve

Of the total interest recovered as stated in point no 22 above, interest of NPR 33,623,386 recovered after 15 Shrawan
2072 till 30 Aswin 2072 and interest of NPR 2,990,173 realised by way of capitalising interest on project loan impact-
ed by the Earth Quake, is transferred to Capital Adjustment Reserve through Profit and Loss Appropriation Account.
Similarly, loan loss provision of NPR 7,798,961 written back due to complete settlement of NPLs in the month of
Mangsir 2072 has been transferred to Capital Adjustment Reserve.

24. Staff Leave Encashment
Bank has not made any provision for accumulated leave encashment. However, any encashment of leave in excess
of minimum accumulation as per bank’s rule has been charged as an expense in the year of encashment. As per the
‘Personnel Policy Guideline’ of the Bank, staffs are entitled to encash accumulated leave on retirement.
25. Non-banking assets (NBA) Disclosure

Bank’s detail of NBA as on Ashad end 2072 is as follows -
Amount in NPR.
Acquired Date of Non Banking Total Amount of Non Banking
Name & Address of Borrower or Party
Asset Asset
Sarita Rajbhandari (Vaidhya) 4-Dec-12 5,216,247
Shilu Housing and Developers Pvt Ltd 5-Jul-13 52,795,000
Opportunity Manpower Service 27-Jan-14 2,892,225
Everest Floriculture Pvt.Ltd. 5-Apr-15 20,546,677
Aayusha Developers 5-Jul-15 135,124,850
Total 216,574,999
The bank has booked loss provision on NBA as per NRB directive.
26. Capital Work in Progress (WIP)

Carrying amount of capital work-in-progress includes cost incurred for the soil testing work for building construc-
tion site at Naxal. As of the balance sheet date, the carrying amount of WIP is NPR. 261,369.
27. Lending to National Trading Limited and Problematic FIs

The bank has no lending against National Trading Limited. The bank has no inter-bank placements and/or other
claims against the FIs that are declared problematic by NRB.
28. Rounding off and Comparative Figures

Figures are rounded to nearest rupees. Previous year’s figure has been regrouped or rearranged where necessary.

Schedule 4.34
KUMARI BANK LIMITED
Statement of Loan Availed by Bank’s Promoter/Promoters’ Group
from Other Bank and Financial Institutions by Pledging Their Shares.
Promoter Shares Under the

Details of Loan
Promoter’s/ Ownership of Promoter
S.No. Remarks
Shareholders’s Name % of Paid-up Loan Amount Number of
Total Shares Lending Bank
Capital (NPR) Share Pledge

RAJENDRA DAS Now, No credit facilities is in
1 17,785 0.07 CENTRAL FINANCE LIMITED - 3,000
SHRESTHA utilization
MACHHAPUCHHERE BANK
- 5,160
LIMITED
GURKHA DEVELOPMENT
2 LAXMAN SHRESTHA 251,199 1.03 6,800,000.00 82,620 N/A
BANK LIMITED
Pledged against the credit facilities
BHIM KRISHNA
3 177,164 0.73 NIC ASIA BANK LIMITED 9,500,000.00 141,518 availed by Mr. Bhim Krishna Udas &
UDAS
Mr. Ranjan Udas.
Pledged as additional security against
PHURBA BANGDEL
177,164 0.73 NABIL BANK LIMITED - 21,468 the credit facilities availed by Atlas
LAMA
International Relocation Pvt.Ltd.
4 Pledged against the credit facilities
SANIMA BANK LIMITED 4,300,000.00 87,358 availed by Mr. Phurba Wangel Lama.
Ranjan Udas.
SIDDHARTHA BANK LIMITED 3,170,000.00 24,380 N/A
GOVINDA DAS the Credit Facilities availed by
265,747 1.09 LUMBINI BANK LIMITED *30,269,000.00 114,252
SHRESTHA *Himalayan Travels & Tours Pvt.Ltd.
**20,832,000.00
5 and ** Oriental Firm Pvt.Ltd.
#Pledged as additional security
NABIL BANK LIMITED 43,200 against the credit facilities availed by
#51,530,989.48
Himalayan Travels & Tours Pvt.Ltd.
BIDHYA KRISHNA the Credit Facilities availed by
324,803 1.34 LUMBINI BANK LIMITED *30,269,000.00 95,862
6 **20,832,000.00
and ** Oriental Firm Pvt.Ltd.
PRIME COMMERCIAL BANK
29,388,648.92 26,780 N/A
NEPAL LIMITED
#51,530,989.48
ANIL DAS the Credit Facilities availed by
7 177,164 0.73 LUMBINI BANK LIMITED *30,269,000.00 71,668
**20,832,000.00
and ** Oriental Firm Pvt.Ltd.
#51,530,989.48
SUNIL NANDA RELIABLE DEVELOPMENT Pledged against the credit facilities
8 17,716 0.07 1,650,000.00 9,000
SINGH PRADHAN BANK LIMITED availed by Mr. Santoo Shrestha
MADHAV KUMAR RELIABLE DEVELOPMENT Pledged against the credit facilities
9 17,716 0.07 1,650,000.00 9,000
BASNET BANK LIMITED availed by Mr. Santoo Shrestha
LUMBINI LEASING AND
10 SOPHIE UPADHAYA 85,039 0.35 1,200,000.00 22,361 N/A
FINANCE COMPANY LIMITED
CENTURY COMMERCIAL the credit facilities availed by Nepal
6,334,813.77 8,200
BANK LIMITED Escort and engineering service pvt.
Ltd.
YETI DEVELOPMENT BANK
11 PEGI PANDEY 21,494 0.09 1,137,530.07 14,176 N/A
LIMITED
12 SITA GURUNG 53,148 0.22 SANIMA BANK LIMITED 400,000.00 9,096 N/A
HIMALAYAN BANK LIMITED 1,498,516.75 30,865
This is the protion of credit limit
SOCIETY DEVELOPMENT
13 KANCHAN SHARMA 3,543 0.01 517,684.93 2,337 provided only against the shares of
BANK LIMITED
Kumari Bank Limited
KUMUD KUMAR SOCIETY DEVELOPMENT
14 151,083 0.62 - 85,269 No credit facilities is in utilization
DUGAR BANK LIMITED
SOCIETY DEVELOPMENT
15 BIKASH DUGAR 124,016 0.51 - 77,266 No credit facilities is in utilization
BANK LIMITED
EVEREST BANK LIMITED - 4,528 No credit facilities is in utilization
16 BACHHA RAJ TATER 70,865 0.29 NIC ASIA BANK LTD 1,174,675.00 41,987
availed by Mr. Vivek Tater
ANANDA KUMAR
17 53,150 0.22 NEPAL SBI BANK LIMITED 73,222,000.00 9,441 the credit facilities availed by Ananda
RUNGATA
Trade Concern
Pledged against the Credit Facilities
NABIL BANK LIMITED 93,181,681.76 25,614
availed by *Urga Venture pvt ltd

18 BALRAM NEUPANE 53,082 0.22 SIDDHARTHA BANK LIMITED 3,520,344.89 39,911 availed by M/S Tulasi Investment Pvt
Ltd.
PRIME COMMERCIAL BANK Pledged against the credit facilities
19 GANGA AMATYA 88,582 0.36 1,579,737.03 22,264
NEPAL LIMITED availed by Mr.Samir Kapil
BIJAY BAHADUR
20 17,698 0.07 UNION FINANCE LIMITD - 5,760 N/A
MANANDHAR
BHIMESHOR CO-OPERATIVE
21 DEVI LAL BIST 885 0.00 66,982.00 524 provided only against the shares of
LIMITED
Kumari Bank Limited
SHAMBHU KUMAR BHIMESHOR CO-OPERATIVE
22 885 0.00 493,085.00 583 provided only against the shares of

BASNET LIMITED
Kumari Bank Limited
RAJENDRA PRASAD
23 318,180 1.31 LAXMI BANK LIMITED 152,596 availed by Bhatbhateni Supermarket
SHRESTHA 187,419,381.10
and Departmental Store P. Ltd.
24 SABITRI GURUNG 708,661 2.91 LAXMI BANK LIMITED 353,675 availed by Bhatbhateni Supermarket
187,419,381.10
and Departmental Store P. Ltd.
25 JEEVAN NEPAL 35,433 0.15 SRIJANA FINANCE LIMITED 1,050,000.00 21,210 N/A
INTERNATIONAL This is the protion of credit limit
BODH PRASAD 89,520 0.37 DEVELOPMENT BANK 2,367,900.00 47,358 provided only against the shares of
26 LIMITED Kumari Bank Limited
TRIPATHI
NIC ASIA BANK LTD 895,234.59 11,685 N/A
BOBBY BIKRAM MACHHAPUCHHRE BANK Pledged against the credit facilities
27 14,174 0.06 599,920.47 10,657
SINGH LIMITED availed by Mr. Kamal Bikaram Singh
PRABHU PRIME COMMERCIAL BANK
28 176,975 0.73 25,505,264.50 160,634 provided only against the shares of
INVESTMENT P.LTD NEPAL LIMITED
Kumari Bank Limited
PRADEEP KUMAR Pledged against the credit facilities
29 177,255 0.73 PRABHU BANK LIMITED 93,245
MURARKA 500,000,000.00 availed by Mr. Sirish Murarka.
PASHUPATI Pledged against the credit facilities
30 177,255 0.73 PRABHU BANK LIMITED 93,245
MURARKA 500,000,000.00 availed by Mr. Sirish Murarka.
31 AMRITA PARAJULI 49,606 0.20 NIC ASIA BANK LTD 6,488,314.33 49,476 availed by Mr. Ananta Raman Parajuli
& Mrs. Amrita Parajuli
ANANTA RAMAN
32 56,693 0.23 NIC ASIA BANK LTD 6,488,314.33 56,563 availed by Mr. Ananta Raman Parajuli
PARAJULI
& Mrs. Amrita Parajuli
Fiscal Year 2071/72 (2014/15) Comparison of Unaudited and

Audited Financial Statement as Ashad 2072 of FY 2071/72
NPR in 000’
As per As per Variance
Unaudited Audited
S.N. Particulars Reasons for Variance
Financial Financial In Amount In %
Statement Statement
Total Capital and Liabilities (1.1
1 38,186,723 38,198,863 12,140 0.03%
to 1.7)
Declaration of stock
1.1 Paid Up Capital 2,431,682 2,699,167 267,485 11.00%
dividend
Change in profit and
1.2 Reserve and Surplus 887,658 648,150 (239,509) -26.98% declaration of stock
dividend
1.3 Debenture and Bond - - - -
1.4 Borrowings 328,000 328,000 - -
1.5 Deposits (a+b) 33,421,911 33,421,911 - -
a. Domestic Currency 32,542,064 32,542,064 - -
b. Foreign Currency 879,847 879,847 - -
1.6 Income Tax Liability - - -
Change in LLP,
provision for staff
1.7 Other Liabilities 1,117,472 1,101,636 (15,836) -1.42% bonus, provision for
other expenses and
deferred tax liability.
2 Total Assets (2.1 to 2.7) 38,186,723 38,198,863 12,140 0.03%

2.1 Cash & Bank Balance 4,990,975 4,990,975 - -
2.2 Money at Call and Short Notice 436,881 436,881 - -
2.3 Investments 4,862,590 4,862,590 - -
Loans and Advances
2.4 27,070,390 27,070,390 - -
(a+b+c+d+e+f)
a.Real Estate Loan 2,010,181 2,010,181 - -
1. Residential Real Estate Loan 491,529 491,529 - -
2. Business Complex &
Residential Apartment 373,819 373,819 - -
Construction Loan
3. Income Generating
- - -
Commercial Complex Loan
4. Other Real Estate loan 1,144,833 1,144,833 - -
b. Personal Home Loan of NPR10
2,885,047 2,885,047 - -
million
c.Margin Type Loan 852,523 852,523 - -
d.Term Loan 5,542,243 5,542,243 - -
e.Overdraft Loan/TR Loan/WC Loan 14,311,637 14,311,637 - -
f. Others 1,468,760 1,468,760 - -

Depreciation
2.5 Fixed Assets 259,399 259,463 64 0.02%
adjustment
2.6 Non Banking Assets - - - -
Change in tax
provision, booking of
income receivables,
2.7 Other Assets 566,487 578,563 12,076 2.13%
recovery of interest
and adjustment of
deferred tax assets.
3 Profit and Loss Acccount

Recovery of interest
3.1 Interest Income 2,405,354 2,433,131 27,777 1.15%
on loans
3.2 Interest Expenses 1,507,365 1,507,365 - -
A. Net Interest Income (3.1-3.2) 897,989 925,766 27,777 3.09%
3.3 Fees, Commission and Discount 154,645 154,635 (10) (0.00) Adjustment
Booking of income
3.4 Other Operating Income 47,403 47,668 266 0.56%
receivables
3.5 Foreign Exchange Gain/ Loss (Net) 95,251 95,251 - -
B. Total Operating Income
1,195,288 1,223,320 28,032 2.35% Above reasons
(A.+3.3+3.4+3.5)
3.6 Staff Expenses 284,347 284,257 (89.78) -0.03% Adjustment
Adjustment of
3.7 Other Operating Expenses 254,368 253,823 (545) -0.21%
provision
C. Operating Profit Before
656,573 685,240 28,667 4.37% Above reasons
Provision (B.- 3.6-3.7)
3.8 Provision for Possible Losses 314,732 284,492 (30,241) -9.61% Recovery of loans
D. Operating Profit (C-3.8) 341,840 400,748 58,908 17.23% Above reasons
Non Operating Income/Expenses
3.9 (6,892) (7,021) (129) 1.87% Adjustment
(Net)
Write Back of Provision for
3.10 221,752 228,688 6,937 3.13% Recovery of loans
Possible Loss
E. Profit from Regular Activities
556,700 622,416 65,716 11.80% Above reasons
(D+3.9+3.10)
Extraordinary Income/Expenses
3.11 - - -
(Net)
F. Profit before Bonus and Taxes
556,700 622,416 65,716 11.80% Above reasons
(E. + 3.11)
3.12 Provision for Staff Bonus 50,609 56,583 5,974 11.80% Above reasons
3.13 Provision for Tax 153,357 171,044 17,687 11.53% Above reasons
G. Net Profit/Loss (F.-3.12-3.13) 352,734 394,788 42,055 11.92% Above reasons

KUMARI BANK LIMITED Schedule 4 A
Unaudited Financial Results (Quarterly)

As at Fourth Quarter (16 July 2015) of the Fiscal Year 2014/15
Amount in NPR ‘000

32.03.2071/16.07.2014
30.03.2072/16.07.2015 30.12.2071/13.04.2015
S.N. Particulars Corresponding Previous
This Quarter Ending Previous Quarter Ending
Year Quarter Ending
1 Total Capital and Liabilities
38,186,723 35,789,691 31,930,990
(1.1 to 1.7)
1.1 Paid Up Capital 2,431,682 2,431,682 2,431,682
1.2 Reserve and Surplus 887,658 786,272 534,924
1.3 Debenture and Bond - - -
1.4 Borrowings 328,000 2,456 201,952
1.5 Deposits (a+b) 33,421,911 31,224,317 27,578,376
a. Domestic Currency 32,542,064 30,346,488 26,503,880
b. Foreign Currency 879,847 877,829 1,074,496
1.6 Income Tax Liability - - -
1.7 Other Liabilities 1,117,472 1,344,964 1,184,056
2 Total Assets (2.1 to 2.7) 38,186,723 35,789,691 31,930,990

2.1 Cash & Bank Balance 4,990,975 2,871,899 4,895,685
2.2 Money at Call and Short Notice 436,881 879,040 507,478
2.3 Investments 4,862,590 4,520,963 3,164,626
2.4 Loans and Advances (a+b+c+d+e+f) 27,070,390 26,699,294 22,808,503
a.Real Estate Loan 2,010,181 2,036,179 2,040,879
1. Residential Real Estate Loan 491,529 419,746 234,772
2. Business Complex &
Residential Apartment 373,819 502,372 617,892
Construction Loan
3. Income Generating
- - -
Commercial Complex Loan
4. Other Real Estate loan 1,144,833 1,114,062 1,188,215
b. Personal Home Loan of NPR 1
2,885,047 2,667,011 1,948,109
Crore or Less
c.Margin Type Loan 852,523 854,582 538,887
d.Term Loan 5,542,243 5,221,304 4,399,845
e.Overdraft Loan/TR Loan/WC Loan 14,311,637 14,597,365 12,624,206
f. Others 1,468,760 1,322,852 1,256,576
2.5 Fixed Assets 259,399 241,982 235,776
2.6 Non Banking Assets - - -
2.7 Other Assets 566,487 576,513 318,921
Corresponding Previous
3 Profit and Loss Account Upto This Quarter End Previous Quarter Ending
Year Quarter End
3.1 Interest Income 2,405,354 1,742,797 2,410,784
3.2 Interest Expenses 1,507,365 1,072,107 1,575,312
A. Net Interest Income (3.1-3.2) 897,989 670,690 835,473

3.3 Fees, Commission and Discount 154,645 121,753 188,725
3.4 Other Operating Income 47,403 32,777 56,945
3.5 Foreign Exchange Gain/ Loss (Net) 95,251 71,343 85,155
B. Total Operating Income
1,195,288 896,563 1,166,298
(A.+3.3+3.4+3.5)
3.6 Staff Expenses 284,347 206,281 221,701
3.7 Other Operating Expenses 254,368 175,975 240,121
C. Operating Profit Before Provision
656,573 514,307 704,476
(B.- 3.6-3.7)
3.8 Provision for Possible Losses 314,732 198,341 236,312
D. Operating Profit (C-3.8) 341,840 315,967 468,165
3.9 Non Operating Income/Expenses
(6,892) (8,087) 2,540
(Net)
3.1 Write Back of Provision for Possible
221,752 87,095 76,151
Loss
E. Profit from Regular Activities
556,700 394,975 546,856
(D+3.9+3.10)
3.11 Extraordinary Income/Expenses (Net) - - -
F. Profit before Bonus and Taxes
556,700 394,975 546,856
( E. + 3.11)
3.12 Provision for Staff Bonus 50,609 35,907 49,714
3.13 Provision for Tax 153,357 107,720 155,487
G. Net Profit/Loss (F.-3.12-3.13) 352,734 251,348 341,655
At the End of
At the End of This At the End of Previous
4 Ratios Corresponding Previous
Quarter Quarter
Year Quarter
4.1 Capital Fund To RWA 11.12% 10.98% 11.92%
4.2 Non Performing Loan (NPL) to Total
2.76% 3.98% 3.19%
Loan
4.3 Total Loan Loss Provision to Total
115.31% 94.31% 125.41%
NPL
4.4 Cost of Funds (annualized - LCY) 5.00% 4.91% 6.03%
4.5 Credit to Deposit Ratio (as per NRB
74.66% 79.63% 77.37%
directives)
4.6 Base Rate (FTM) 8.66% 8.10% 8.86%
4.7 Average Interest Rate Spread (as per
3.11% 3.22% 3.62%
NRB directives)

KUMARI BANK LIMITED
“Disclosure Under Basel II as at 16 July 2015
(For F/Y 2014/15)”
Capital Structure and Capital Adequacy
Tier I Capital and a breakdown of its components

Amount in NPR
S.N. Particular Current Year
a Paid Up Equity Share Capital 2,431,681,560
b Irredeemable Non- cumulative preferenece share -
c Share premium -
d Proposed Bonus Equity Share 267,484,972
e Statutory General Reserves 546,371,157
f Retained Earnings 13,393,941
g Un-audited current period profit (after all provision including tax) -
h Bond Redemption Reserve -
i Capital Adjustment Reserve 44,412,519
j Dividend Equalization Reserves -
k Other free Reserve -
Total Tier I Capital 3,303,344,149
Tier 2 Capital and a breakdown of its components
Amount in NPR
a Cumulative and/or Reedemable Preference Share -
b Subordinated term debt -
c Hybrid Capital Instruments -
d General Loan Loss provision 267,054,718
e Exchange Equalisation Reserve 23,972,027
f Investment Adjustment Reserve 20,000,000
g Assets Revaluation Reserve -
h Other Reserve (Deferred Tax Reserve) -
Total of Tier 2 Capital 311,026,746
Deductions from Capital

Amount in NPR
i. Less: Purchase of land and building in excess of limit and unutilised (88,680,911)
Total Deductions from Core Capital (88,680,911)

Total Qualifying Capital

Amount in NPR
a Tier I Capital 3,214,663,238
b Tier II Capital 311,026,746
Total Capital Fund 3,525,689,984

Capital Adequacy Ratios
S.N. Particular Current Year (%)
a Tier 1 Capital to total RWA 9.89
b Total Capital Fund (Tier 1 + Tier 2) to Total RWA 10.84
Bank’s Internal Approach to Access Capital Adequacy

Bank’s mangement regularly reviews Bank’s Capital Adequacy. Plans and budgets are prepared on the basis of current and
projected capital adequacy. Bank’s plan and investment decision are based on the level of capital adequacy it feels comfortable.

Risk weighted exposures for Credit Risk, Market Risk and Operational Risk
Amount in NPR.
1 Risk Weighted Exposure for Credit Risk 29,448,840,680
2 Risk Weighted Exposure for Operational Risk 1,800,153,843
3 Risk Weighted Exposure for Market Risk 89,998,446
Total 31,338,992,969

Risk weighted exposures under each of 11 categories of Credit Risk
Amount in NPR
1 Claims on government and central bank -
2 Claims on other official entities -
3 Claims on banks 700,581,127
4 Claims on corporate and securities firms 15,860,516,174
5 Claims on regulatory retail portfolio 3,265,972,352
6 Claims secured by residential properties 1,576,755,905
7 Claims secured by commercial real estate 1,210,421,906
8 Past due claims 596,646,374
9 High risk claims 2,894,239,673
10 Other Assets 809,245,052
11 Off balance sheet items 2,534,462,117
Total 29,448,840,680
Total risk weighted exposure calculation table -

Amount in NPR
1 Risk Weighted Exposure for Credit Risk 29,448,840,680
2 Risk Weighted Exposure for Operational Risk 1,800,153,843
3 Risk Weighted Exposure for Market Risk 89,998,446
Total Risk Weighted Exposure 31,338,992,969
Add: 3% of the total RWE due to non compliance to Disclosure Requirement
Addition to RWE as per supervisiory review (3%) 940,169,789
Add RWE equvalent to reciprocal of capital charge of 2 % of gross income. 239,376,796
Add: ...% of Total Deposit due to Insufficient Liquid Assets
Total Risk Weighted Exposure (After Bank’s adjustment of Pillar II) 32,518,539,554
Amount of NPAs (Non Performing Assets) both gross and net

Current Year’s Amount in NPR
S.N. Non Performing Assets Gross Amount Net Amount
1 Restructured / Rescheduled 66,689,228 58,353,074.26

2 Substandard 49,918,549 37,438,911.63
3 Doubtful 41,819,310 20,909,654.77
4 Loss 515,571,821 -
Total 673,998,907 116,701,640.65

NPA Ratios
S.N. Particulars Current Year (%)
1 Gross NPA to gross advances 2.49%
2 Net NPA to net advances 0.44%

Movement of Non Performing Assets
Amount in NPR
S.N. Non Performing Assets Previous Year Change Current Year
1 Restructured / Rescheduled 68,732,063 (2,042,835.47) 66,689,228
2 Substandard 49,785,517 133,032.21 49,918,549
3 Doubtful 258,697,625 (216,878,315.38) 41,819,310
4 Loss 541,099,299 (25,527,478.00) 515,571,821
Total 918,314,503 (244,315,596.64) 673,998,907

Write Off of Loan and Interest Suspense
Amount in NPR
1 Loan Write Off 9,581,198
2 Interest Suspense Write Off 35,304,926
Movement of Loan Loss Provision and Interest Suspense

Amount in NPR
S.N. Particular Previous Year Change Current Year
1 Loan Loss Provision 910,387,883 (86,035,899.01) 824,351,984
2 Interest Suspense 280,034,755 (68,572,626.93) 211,462,128

Details of additional loan loss provision
Current Year’s Amount in NPR
S.N. Loan Classification Additional provision
1 Good 48,152,833
2 Restructured / Rescheduled (255,354)
3 Substandard 33,258
4 Doubtful (108,439,158)
5 Loss (25,527,478)
Total (86,035,899)

Segregation of investment portfolio
Amount in NPR
S.N. Investment category Current Year
1 Held for trading -
2 Held to maturity 4,837,654,635
3 Available for sale 24,935,500
Total 4,862,590,135

RISK MANAGEMENT FUNCTION
Risk Assessment/Mitigation Practices at Kumari Bank Limited
Considering the need to establish effective Risk Management and Risk Mitigation practices at Kumari Bank Ltd,
we have developed a system of continuous improvement of processes wherein each member of the Bank works
towards balancing profitability with prudence. The system encompasses all banking functions from client interface,
to back office operation, to the strategic decision formulated by the management committees and the Board of
Directors. Each area has its own check and balance procedure to assess and mitigate risks involved. The practices
thus observed are as follows:

KBL Organization Structure
The bank’s lending approval authority is divided into two distinct units, namely Business and Risk Management. While
the Business Unit concentrates more on optimum utility of assets, every lending decision of this Unit is re-assessed
and revaluated by the Credit Risk Management Unit for final approval. The Credit Risk Management Unit applies its
objective judgement on risk variables deemed appropriate in each instance of lending decision. For this purpose, the
Credit Risk Management Unit has two distinct subunits, the Credit Risk Management Department, which facilities
final lending decision after duly adjusting risks as mitigated to an acceptable level, and the Credit Administration and
Compliance Department , which evaluates the endorsed paperwork prior to actual sanction, and also after it.

Depending upon the volume of loans and the nature of risk associated, lending decision are subject to validation and
approval by various levels of the hierarchy, in which some lending decision are to be approved by the CEO, and other
by even the Board of Directors as each case may require.
Risk Measurement Criteria and Mitigation Process

Credit risks are evaluated from the initial customer interface on an array of risk variables by the Credit Policy Guidelines
of the Bank, as well as on the individual intuition of experienced officers. As proposals are escalated for approval,
judgmental and analytical criteria become broader and more conceptual.
Kumari Bank Ltd. uses the best practices in banking, to make its operation secure through a system of procedural
crosschecking mechanism in each operational transaction. An Internal Audit Department, continuously functions to
alert bank personnel to the meticulousness required in handling operations in every functional department. A credit
monitoring system is well established in the Bank, which periodically checks on credit quality, compliance, and level
of risk exposure. This practice has created a continuous learning and improvement environment, and the Bank’s
efficiency goal has been to move towards the most prudent practices in the industry.

Types of eligible credit risk mitigants used and the benefits availed under CRM -
Particular Eligible CRM

Deposit with Bank & Cash Margin 142,064,042

ATM LOCATIONS
INSIDE KATHMANDU VALLEY
Putalisadak ATM I & II Kantipur Mall ATM Naxal ATM
Kumari Bank Limited, Right to Main Entrance Kumari Bank Limited, Kantipur Mall, Gongabu Opposite Police Head Quarter, Naxal,
Gate, Putalisadak, Kathmandu Kathmandu
Koteshwor ATM
Putalisadak ATM III & IV Koteshwor, Kathmandu Lazimpat ATM
Kumari Bank Limited, Ground Floor (Lobby), Big Mart Building (Way to Hotel Radisson),
Putalisadak, Kathmandu Durbarmarg ATM Lazimpat, Kathmandu
Kumari Bank Limited, Durbarmarg, Kathmandu
New Road ATM Jhamsikhel ATM
Kumari Bank Limited, New Road,Kathmandu Chuchhepati ATM 8 Degrees Fine Dine & Venues (opposite St.
Kumari Bank Limited, Chuchhepati, Chabahil Mary’s Bus Stop), Jhamsikhel, Lalitpur
New Baneshwor ATM
Royal Thai Restaurant premise, Near Everest Buddhanilkantha ATM Mangal Bazar ATM
Hotel, New Baneshwor Chowk, Kathmandu Kumari Bank Limited, Buddhanilkantha, Yala Guest House premise, Patan Durbar
Kathmandu Square (Near Honacha)
Ratna Park ATM
Nepal Electricity Authority Building, Ratna Old Baneshwor ATM Balkhu ATM
Park, Kathmandu Kumari Bank Limited, Old Baneshwor, Balkhu Chowk
Kathmandu
Thamel ATM Kalanki ATM
Fire Club Building, Thamel, Kathmandu Kumaripati ATM Millennium House, Near Kalanki Chowk
Kumari Bank Limited, Kumaripati, Lalitpur
OUTSIDE KATHMANDU VALLEY

Bhairahawa ATM Birgunj ATM II Sauraha ATM
Kumari Bank Limited, Bhairahawa Branch, National Medical College Bacchauli-2, Sauraha, Chitwan
Narayan Path Bhairahawa
Itahari ATM Salyan ATM
Pokhara ATM I Kumari Bank Limited, Pathivara Market , Kumari Bank Limited, Khalanga, Salyan
Chiple Dhunga, Pokhara, Kaski Dharan Road, Itahari, Sunsari
Tulsipur ATM
Pokhara ATM II Urlabari ATM B.P. Chowk, Tulsipur, Dang
Lakeside, Opposite to Lalupate Marga Kumari Bank Limited, Urlabari, Morang
Kawasoti ATM
Jhapa ATM Butwal ATM Kumari Bank Limited, Sabhapati Chowk,
Kumari Bank Limited, Birtamode Jhapa Infront of Kumari Bank Limited, Ram Mandir Kawasoti
Line, Butwal
Baglung ATM Okhaldhunga ATM
Kumari Bank Limited Mahendra Path Baglung Nepalgunj ATM Kumari Bank Limited, Rambazar, Okhaldhunga
Surkhet Road, Dhambhoji, Nepalgunj
Narayangadh ATM Mahendranagar ATM
Kumari Bank Limited Narayangadh Branch, Dhangadi ATM Kumari Bank Limited, Mahendranagar
Pulchowk, Narayangadh Ratopul, Dhangadi, Kailali
Nijhgadh ATM
Biratnagar ATM Surkhet ATM Kumari Bank Limited, Nijhgadh
Kumari Bank Limited, Goshwara Road, Morang Birendra Nagar, Surkhet
Byapaar Sangh Building, Biratnagar, Morang Kohalpur ATM
Damauli ATM Kumari Bank Limited, Kohalpur
Birgunj ATM I Kumari Bank Limited,Damauli-2
Kumari Bank Limited, Adarsha Nagar, Birgunj, Musikot ATM
Parsa Kumari Bank Limited, Musikot
MEMBER GROUP NETWORK

Nepal Investment Bank ATM Network Global Bank ATM Network Prime Commercial Bank ATM Network
Rastriya Banijya Bank ATM Network Siddhartha Bank ATM Network NCC Bank ATM Network
National Payment ATM Network

BRANCHES
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Corporate Office: Head Office:
P.O. Box: 21128, Durbarmarg, Kathmandu Putalisadak, Kathmandu
Tel: 01-4221311, 01-4221314 | Fax: 01-4226644 Tel: 01-4232112, 4232113 | Fax:014231960
Email: [email protected] Email:[email protected]
www,kumaribank.com www.kumaribank.com

2014-2015 Kumari Bank Annual Report

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2014-2015 Kumari Bank Annual Report

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CONTENTS

Kumari Teller Counter at Durbarmarg Branch

4 | Kumari Bank | Annual Report 2015-2016

Kumari Bank | Annual Report 2015-2016 | 5

6 | Kumari Bank | Annual Report 2015-2016

Dear Shareholders, of services by operating Kumari Swastha Jeevan

Kumari Bank | Annual Report 2015-2016 | 7

8 | Kumari Bank | Annual Report 2015-2016

1. A HOLISTIC VIEW OF THE TRANSACTIONS IN THE PAST YEARS

*Paid-up Capital includes Bonus Shares.

Kumari Bank | Annual Report 2015-2016 | 9

Paid up Capital Reserve & Funds

Deposit Loan & Borrowings

1015000 67/68 68/69 69/70 70/71 71/72

10 | Kumari Bank | Annual Report 2015-2016

Net Interest Income Other Income

Kumari Bank | Annual Report 2015-2016 | 11

Net Profit Non-Performing Loan Ratio (%)

12 | Kumari Bank | Annual Report 2015-2016

Kumari Bank | Annual Report 2015-2016 | 13

14 | Kumari Bank | Annual Report 2015-2016

Table 2: Comparative State of Deposits:

Kumari Bank | Annual Report 2015-2016 | 15

16 | Kumari Bank | Annual Report 2015-2016

Kumari Bank | Annual Report 2015-2016 | 17

Table 3: Current year’s financial glimpse:

Programs for Current Year:

18 | Kumari Bank | Annual Report 2015-2016

Professor Dr. Rajan Bahadur Poudel resigned 9. FORFEITED SHARES

14. INFORMATION ABOUT ANY AGREEMENTS

Kumari Bank | Annual Report 2015-2016 | 19

Table – 4 Amount in NPR

20 | Kumari Bank | Annual Report 2015-2016

24. ANY OTHER INFORMATION NECESSARY TO

Information regarding Merger: …….............…………………………

Kumari Bank | Annual Report 2015-2016 | 21

22 | Kumari Bank | Annual Report 2015-2016

Kumari Bank has remained committed to

Kumari Bank | Annual Report 2015-2016 | 23

24 | Kumari Bank | Annual Report 2015-2016

Standing in First Row (Left to Right)

Standing in Second Row (Left to Right)

Kumari Bank | Annual Report 2015-2016 | 25

26 | Kumari Bank | Annual Report 2015-2016

Kumari Smart Bachat Khata

Subha Laxmi Savings

Kumari Bank | Annual Report 2015-2016 | 27

Kumari Remit Bachat Khata

Kumari Flexi-Fix Scheme

28 | Kumari Bank | Annual Report 2015-2016

Kumari Swastha Jeevan Bachat Khata

The accountholders of this product will be provided a “co-branded

In addition, the account holders of KSJBK will also receive

KBL Recurring Deposit Scheme

Kumari Salary Saving Account

Kumari Bank | Annual Report 2015-2016 | 29

30 | Kumari Bank | Annual Report 2015-2016

Kumari Bank | Annual Report 2015-2016 | 31

34 | Kumari Bank | Annual Report 2015-2016

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