np-scb-annual-report-two-zero-twenty-two-twenty-three

Annual Report 2022-23
Driving commerce and prosperity

through our unique diversity
37th ANNUAL GENERAL MEETING
Sunday, 10 December 2023
1
ªAbout Standard Chartered Bankº
Standard Chartered Bank Nepal Limited (SCBNL) has been in In Nepal, with 15 points of representation across the country
operation in Nepal since 1987 when it was initially registered and more than 504 local staff, SCBNL is serving its clients and
as a joint-venture operation. Today, the Bank is an integral customers through a strategic domestic network. In addition,
part of Standard Chartered Group having an ownership the global network of Standard Chartered Group enables the
stake of 70.21% in the company with 29.79% shares owned by Bank to provide truly international banking services in Nepal.
the Nepalese public. The Bank enjoys the status of the only The Bank has 12 branches, 3 extension counters and 27 ATMs
international bank currently operating in Nepal. It is also the in the country. We have also established a dedicated Student
only bank in Nepal accredited with ICRANP-IR AAA rating by Service Counter for outbound students to avail Foreign
ICRA Nepal for the fourth time in a row, with regards to timely Exchange facilities and other related services.
servicing of financial obligations.
SCBNL offers a full range of banking products and services to
Globally, we are a leading international banking group with a wide range of clients and customers including individuals,
over 170 years of history in some of the world’s most dynamic mid-market local corporates, multinationals, large public-
markets. Our heritage and values are expressed in our brand sector companies, government corporations as well as the
promise, Here for good. Our operations reflect our Purpose, development organisations segment comprising of aid
which is to drive commerce and prosperity through our unique agencies, multilateral entities, non-government organisations
diversity. With 83000 employees, the SCB Group is present in and international non-government organisations. The Bank
52 markets and listed on the London and Hong Kong Stock has been a pioneer in introducing client-focused products
Exchanges, as well as the Nepal Stock Exchange. There are and services and aspires to continue its leadership. It is the
131 nationalities present in our workforce and 174 languages / first bank in Nepal to implement the Anti- Money Laundering
dialects spoken by our colleagues across the SCB Group. policy and to apply the ‘Know Your Customer’ procedure on
all the customer accounts.
Our Valued Behaviours
Never Settle Better Together Do the right thing
• • See more in others

• Continuously improve and innovate • How can I help? • Think client
• Learn from your successes and failures • Build for the long term • Be brave, be the challenge
In 2018, the Bank launched Valued Behaviours, to help us we do this is by sponsoring properties and events. We
become more ‘Human’ and bring our Purpose to life. Since have been the Main Club Sponsor of Liverpool FC since
then, we have applied them to everything we do – how 2010, and our name is featured on the Club’s red jerseys.
we work, how we lead and how we make decisions. These However, our partnership runs deeper than that.
three valued behaviours are a shared understanding
of how we relate to one another, our clients and our Over the years, we have demonstrated that we can be a
communities. profitable, purpose-led company that is Here for good. We
have laid a strong foundation (Chapter 1) and returned
The Bank believes in delivering shareholder value in a to growth (Chapter 2). We believe our unique history,
social, ethical, and environmentally responsible manner. core capabilities, diverse footprint and international
Standard Chartered throughout its long history has played reputation gives Standard Chartered the potential to be
an active role in supporting those communities in which its a leading disruptor, innovator, and champion of change.
clients and colleagues live. The Bank is also determined to The world is facing unprecedented challenges, which is
develop significant sustainable finance revenues to grow why there has never been a more important time for the
its business, and to integrate environmental and social Bank to lean into this moment and accelerate change and
considerations into all its decision-making. transformation. To this end, we kicked off the next phase
of our transformation journey (Chapter 3) in 2021, taking
‘Futuremakers by Standard Chartered’ is our global a stand for climate change, wider inclusion and greater
sustainability initiative to tackle inequality by promoting globalisation, by partnering with our regulators, clients and
greater economic inclusion in our markets. Futuremakers the industry. By accelerating our ongoing transformation
supports disadvantaged young people, especially girls to deliver our Stands, we are taking the lead in driving
and people with visual impairments, to learn new skills meaningful change and getting future-ready.
and improve their chances of getting a job or starting
their own business. Globally, we have set out to fundraise Our Stands
and donate USD50Mn for Futuremakers between 2019
and 2023 to empower the next generation to learn, earn
and grow. The Bank is also actively engaged with local
communities in Nepal to raise awareness around Financial Accelerating
Zero
Literacy, Environment, Health and Education.
As a bank, we strive to give something back to the Facebook.com/StandardCharteredNP

communities in which we operate, and one of the ways www.sc.com/np
Bn stands for Billion, Mn is for Million and Tn represents Trillion. Also, NPR stands for Nepali Rupees.
2 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

ªInside this reportº
Strategic Report Performance Highlights 4

Operational Overview 5
Report of the Board of Directors 7
Chief Executive Officer’s Report 13
Corporate Governance Our Approach to Corporate Governance 19

Additional Information 28
Board of Directors 30
Management Team 32
Schedule- 15 35
Leading the way in Digital 38
Sustainability: Our Social Purpose 43
Meet the Futuremakers 50
Human resources 51
Property 53
Branch and ATM Network 56
Financial Statements Consolidated Statement of Financial Position 63

Consolidated Statement of Profit or Loss Account 65
Consolidated Statement of Other Comprehensive Income 66
Consolidated Statement of Changes in Equity 67
Consolidated Statement of Cash Flow 69
Notes to the Consolidated Financial Statements 71
Statement of Distributable Profit or Loss 114
Disclosure & Additional Information 115
Condensed Consolidated Statement of Financial Position 135
Condensed Consolidated Statement of Profit or Loss 136
Ratios as per NRB Directive 137
Comparison of Unaudited & Audited Financial Statements 139
Key Indicators 142
Nepal Rastra Bank’s Approval & Directions 143
Five-Year Financial Summary 144
Comparison of Projection on Approved Prospectus and Audited Financial 148
Statements
Branch Managers 151
3
ªPerformance Highlightsº
36.75
2.61
30.39 2.29
3.47 682
645
590 24.81 1.83
23.92
530 1.71
2.43
2.26
1.99 396 1.22
14.83
1.40
2022-23
2022-23
2022-23
2022-23
2019-20
2019-20
2019-20
2019-20
2020-21
2020-21
2020-21
2020-21
2021-22
2021-22
2021-22
2021-22
2018-19
2018-19
2018-19
2018-19
Market Value per Share Earning per Share Return on Total Assets
(NPR) (NPR) (In %)
1.18
0.96
87.91
20.14 19.69
74.91 75.80
18.14 18.51 72.81
17.17 17.09
16.22 15.95 0.59
14.93 15.10
57.45
0.44
0.15
2022-23
2022-23
2022-23
2022-23
2019-20
2019-20
2019-20
2019-20
2020-21
2020-21
2020-21
2020-21
2021-22
2021-22
2021-22
2021-22
2018-19
2018-19
2018-19
2018-19
Total Shareholder's Equity Capital Adequacy Ratio NPL/Total Loan Total Credit/Deposits Ratio
(NPR Bn) (In%) (In%) (In%)
151.38
213.61
20.78
19.49 123.36
116.44 114.74
7.84
15.15 93.26
14.21
192.32 5.21 5.33

189.24 4.97
188.51 9.44
186.32 4.06
2022-23
2022-23
2022-23
2022-23
2019-20
2019-20
2019-20
2019-20
2020-21
2020-21
2020-21
2020-21
2021-22
2021-22
2021-22
2021-22
2018-19
2018-19
2018-19
2018-19
Net Worth Per Share ROE Total Assets Operating Income

(NPR) (In%) (NPR Bn) (NPR Bn)
36.16 22.50
19.00
26.00 16.51
22.44
13.06
11.84
16.56
14.42
2022-23
2022-23
2019-20
2019-20
2020-21
2020-21
2021-22
2021-22
2018-19
2018-19
Price Earnings Ratio

Operational Overview
ªOperational Overviewº
Operational Overview
Standard Chartered Bank Nepal Limited (SCBNL) has continued to focus on building a strong Balance Sheet, optimising use of our
capital base, maximising returns to our shareholders while investing to underpin future momentum.
Financial Highlights
Operating Income Operating Profit Total Assets
NPR 7.84 Bn NPR 4.97 Bn NPR 151.38 Bn
Capital Adequacy Return on Equity Dividend
17.09% 20.78% 19.00%
Non-Financial Highlights
Point of Representation Employees
15 504
Operational Highlights
• Robust performance in a challenging macroeconomic • Comfortable liquidity position, well capitalised above
conditions and subdued credit demands supported by the regulatory threshold and robust Balance Sheet
improved margin growth
• Disciplined and proactive approach to risk • Overall portfolio remains stable and resilient with
management, control and governance in Consumer, Non Performing Loans (NPL) well below the industry
Private & Business Banking (CPBB) and Corporate, average
Commercial and Institutional Banking (CCIB)
• Strong market capitalisation of ~ NPR50Bn
• Focused approach on protecting low-cost deposit mix (34% growth YoY) reflecting higher market confidence
with stable base rate index resulting in competitive
offers on loan pricing
5
Zarin Daruwala
Chairperson

Report of the Board of Directors (BOD)
ªReport of the Board of Directorsº
Report of the BOD

Dear Shareholders, capital has given us one of the highest financial returns in the
history of our operations in the country. We will continue to deliver
Standard Chartered Bank’s role to connect markets across on improving financial performance as executing our strategy
footprints we operate in has been increasingly pronounced for better shareholder returns remains our primary focus area.
as we navigated through crises and volatile macroeconomic Moreover, our financial metrics and our approach to prioritising
environments across the globe during the Financial Year (FY) efficiency in optimising RWA metrices has also supported our
ended 16 July 2023. As we are the only International Bank in objective in maximising shareholder returns for our Nepal franchise.
Nepal, we are focused to deliver our purpose of driving commerce At the Management and Group level we have shifted our focus
and prosperity through our unique diversity using our network to measuring Return on Tangible Equity (RoTE) which drives our
strength to add value in strategic areas including facilitating approach in measuring financial returns. This ties in very well with
trade, correspondent banking and sustainable finance in line with local metrices including the Return on Equity (RoE) and indicators
our Group’s strategy, while generating accretive and long-term that measure the economic value added to shareholders.
returns, in line with Standard Chartered Group’s strategy, for our
franchise in Nepal. In line with our Group Strategy, the Board is very clear that any
capital that is not required for growth will be distributed to
When we entered the FY in July 2022, we did see a slowdown in shareholders. We have announced a cash dividend of 19.00%
certain macroeconomic variables in Nepal. The policy question which is one of the highest in the last five years. Our income
during the initial months was a choice between stability and grew by 47.0% to NPR7.8Bn and Profit After Tax (PAT) by 53.6%
regularity in public finances in the face of increasing commodity to NPR3.5Bn. Our performance in FY 2022/23 demonstrates that
prices and pressures in foreign exchange reserves. We maintain our current strategy of growing the balance sheet efficiently with
our stance that the Nepalese economy has shown resilience in a focus on prudent risk management, is working. We plan to focus
the face of various crisis episodes including the earthquake in further on efficiency, supporting clients to transition to sustainable
2015, trade disruptions, COVID-19 and the most recent global solutions, increasing our investment in digital capabilities and
rise in commodity prices. This situation coupled with prudent maintaining our strong capital position.
stabilisation austerity measures introduced by regulators, helped
the country towards a better equilibrium. Encouraging financial performance this year
Nepal’s resilience can also be seen by the increase in foreign despite headwinds
exchange reserves which constantly increased after October
2022 to the tune of USD11Bn, supporting more than 10 months Our underlying PAT is NPR3.5Bn, grew 53.6% supported by an
of merchandise and service import cover by the end of July 2023. optimised balance sheet, margin, and higher yields on SLR
Though austerity measures did impact government revenue securities. Asset growth was 6.4% despite an industry wide subdue
collection, this was a choice which we feel was very well handled; in credit demand. The balance sheet remained sufficiently liquid
we are now seeing indicators tending towards normalcy. However, and is well within all regulatory and internal liquidity requirements.
certain aftermaths of an uneven macroeconomic scenario remain,
which will be important for us to navigate through in the coming The Board has recommended cash dividend of 19.00% of paid-
year. up capital as at 31 Ashadh 2080, an increase of 2.5% from last
year. Major highlights of the Bank’s financial performance are as
Like last year, we maintain that our focus on robust risk follows:
management foundations and our strategy of optimising
NPR Bn FY 2079-80 FY 2078-79 Increase

Net Profit 3.5 2.3 53.6%
Gross Loans & Advances 96.9 91.0 6.4%
Customer Deposits 122.5 101.9 20.2%
Earnings per share 36.8 23.9 53.6%
ROE (%) 20.8 14.2 6.6%
Dividend (%) 19.0 16.5 2.5%
The Bank has contributed NPR1.5Bn to the Government Exchequer on account of corporate taxes as compared to NPR976Mn last year. As
per the statutory and regulatory requirements, the Board has recommended a transfer of NPR693Mn to the General Reserve fund, NPR35Mn
to Corporate Social Responsibility (CSR) fund, NPR4Mn to Foreign Exchange Fluctuation fund, NPR480Mn to Capital Redemption Reserve,
and a transfer of NPR206Mn to the Regulatory Reserve. Our Tier 1 and Tier 2 Capital Adequacy ratios are 14.2% and 2.9% respectively with
an overall ratio of 17.1%, well above the regulatory requirement of 11%.
7
Our Strategic Pillars
Our global strategy aligns us to the major segments of global Our performance this year has been driven by efficient balance
growth and we also are adhering to the same in Nepal. sheet management, a healthy growth of asset numbers from
These pillars include leveraging our global expertise around the previous base last year which had already registered a
sustainability and our network strength to support the high-volume growth, and prudent risk management practices
development story of the country. Since the past four years, which prints a better NPL ratio as compared to the market. Our
we have continued to focus on growing our balance sheet Loans and Advances this year increased by 6.4% to a base of
with healthy assets focused around using our capital towards NPR96.9Bn, and impairment as measured by the percentage
productive sectors, contributing to our Specified Sector of Non-Performing Loans (NPL) is at 1.18% (as compared to
Lending (SSL) targets, with a strict focus on risk management the industry average of 2.98%). Our focus on efficiency helped
practices enabling us to maximise shareholder returns. Our our Return on Equity (RoE) grow to 20.8% this year from a low
performance this year evidenced that this strategy is for the base of 14.2% last year. The resulting Earnings per Share (EPS)
long term. We are also clear that our long-term commitment at NPR36.8 puts us amongst the top positions despite our
to Nepal is driven by our purpose of driving commerce and limited reach and participation model.
prosperity through our unique diversity, and we are using our
global resources to contribute to the economic development Standard Chartered Bank Nepal Limited (SCBNL) has a one
of the country. bank strategy where we believe all segments and colleagues
contribute to the larger purpose of the Bank. Our Corporate,
Commercial and Institutional Banking (CCIB) and Consumer
Private and Business Banking (CPBB) segments are continuing
with new initiatives to contribute to the overall targets of
The International Conference on Financing for Nepal organised on 12 Dr. Neelam Dhungana Timsina, Deputy Governor of Nepal Rastra Bank, and
May 2023 was attended by Rt Hon’ Prime Minister and Chairperson of the Anirvan Ghosh Dastidar, CEO of Standard Chartered Bank Nepal Limited
Investment Board, Pushpa Kamal Dahal ‘Prachanda’, Hon’ Finance Minister (SCBNL), inaugurating our day care facility in the New Baneshwor office
Dr. Prakash Sharan Mahat, Hon’ Governer Maha Prasad Adhikari and
several other dignitaries.
This is the fourth year in a row that Standard Chartered Bank Nepal Limited
We were the main sponsor of the Standard Chartered NewBiz Business
has received the coveted AAA rating
Women Summit & Awards 2023 held on 7 July 2023 to recognise talented
women entrepreneurs across the seven provinces of Nepal

SSL, while adhering to our credit underwriting standards. We their own business. Through Futuremakers, we have been able
continue to be focused on organic assets that would generate to contribute through several projects such as Project Silpa, in
long term returns for the Bank. Our strength has been our partnership with Shequal Foundation, aimed to encourage,
low-cost deposit base, which we have historically focused empower, and equip adolescent girls with foundational,
on to provide benefit to customers from competitive cost of financial digital and life skills; and, in partnership with Plan
funds. Our cost of funds continues to be one of the lowest in International Nepal, the ‘Promoting Economic Empowerment
Report of the BOD

the market; additionally, we also have in FY 2022/23, raised of Adolescents for Resilient Livelihood (PEEARL)’ project which
capital through a Debenture issuance of NPR2.4Bn as per aims to ensure that vulnerable and excluded young people
statutory requirements. especially women are actively engaged in independent
livelihood generating activities.
With the strength of our global network, we continue to
focus on our role to facilitate trade and foreign exchange Being a ‘Human Bank’ is inextricably linked to our Purpose. It is
clearing for the country. SCBNL’s share in the overall trade integral to our business strategy, which is about putting clients,
and payments for Nepal are approximately 40% and 60% customers, and our employees at the heart of everything we
respectively. Additionally, we are proud to be representing do. We pride ourselves in being a ‘Bank with a Soul’, which
Nepal in global platforms as the first point of contact for is not merely a nice-to-have, but vital for the success of the
various international entities trying to set operations in the organisation in the spirit of our collective Purpose, and our
country. We also do support projects with non-funded services brand promise of being Here for good. We reopened our
including guarantees, our digital offerings and payment suits. crèche/day care facility for children of our employees, at the
Our commitment to support the financial industry in Nepal New Baneshwor corporate office building in Kathmandu,
through our role as a ‘Banker to the banks’, implementation which we inaugurated on 26 June 2023. We believe in creating
of global practices including IFRS9 and initiating discussions a supportive and inclusive environment that is conducive
around the latest digital developments remains to be a value to professionals, especially working mothers. As of now, we
addition we are proud of and connects to our promise of being are the only bank in the country to launch such a facility to
Here for good. help working parents (particularly women) in continuing
their professional journey, without parenthood acting as a
Globally, we have set priorities in our strategy, underpinned deterrent in their career growth.
by our ‘Stands’. ‘Stands’ are strategic areas where we have
set long term ambitions in markets that we operate in, Our commitment to using our network strength to offer
which includes three pillars: Accelerating Zero, Resetting global expertise in the financial sector, and to link Nepal
Globalisation and Lifting Participation. Through Accelerating with international markets remains to be a key element of
Zero, we are contributing to our global ambition through our focus. We have seen trends globally, including the use of
initiatives in Nepal to support a just transition. We are focused sustainable finance instruments for development purposes,
on partnering with institutions in the country who share the discussions around the use of blockchain, digital currencies
common ambition of enhancing the use of renewable energy and the focus around climate change risks. We are committed
in increasing universal energy access and contributing to the to offering our expertise through engagements with various
national target of achieving Net Zero by 2045. This also links stakeholders in country on these subjects to play our part to
directly with the national priority to mobilise resources to the help the financial industry adapt to these dynamic global
productive sector in line with the SSL regulatory requirements developments.
focused on Agriculture, Energy, and Micro Cottage, Small and
Medium Enterprises (MCSME) and towards creating more Focus on Governance and Risk Management
energy efficient portfolios. We will continue to grow and
support the Bank’s Energy and Agriculture portfolio in line with SCBNL adheres to Risk Management Principles and practices
our participation model in Nepal. as per local regulatory frameworks and that of Standard
Chartered Group which ensures our practices align to a
Leveraging our network and role as one of the world’s largest healthy risk culture and drive the highest standards in
trade banks, our purpose is also focused in contributing to conduct. In Standard Chartered, both risk and conduct are
a fairer and inclusive model of global growth and building integral part of our Enterprise Risk Management Framework
resilience in the global supply chain through international (ERMF) which forms the guiding principles for all colleagues,
diversification and digital technologies. In Nepal, we enabling us to have holistic risk considerations. This underpins
have been facilitating a significant portion of trade and an ability to identify and assess, openly discuss, and take swift
continuously engaging ourselves in ideas that would have action to address existing and emerging risks. We empower
a positive impact to the industry. We have been involved in our senior management to promote a healthy culture around
various initiatives including contributing to the discussion risk that includes risk-based thinking, transparency, and a safe
of the feasibility of Distributed Ledger Technologies (DLT) environment for employees to communicate concerns. The
in increasing the efficiency of trade financing in the country. Bank continues to celebrate ‘Conduct Week’ with an objective
Additionally, we also are exploring partnerships and of fostering a culture where each of our colleagues feels
collaboration opportunities around risk participation and responsible towards the conduct of the Bank.
supply chain financing particularly for MCSMEs.
We strive to uphold the highest standards of conduct and
Lifting participation has been a major priority for us, as we focus on outcomes. While incidents may not be entirely
continue to play our role in the purpose of supporting the avoided, we are clear that we have no appetite for wilful
communities that we operate in. We are extremely fortunate or negligent misconduct. We have consistently worked on
to have rolled out the Futuremakers programme in Nepal. empowering our frontline to focus more on conduct risk
Futuremakers by Standard Chartered is our global initiative ownership to enhance conduct insights so that we have a
to tackle inequality by promoting greater economic inclusion richer analysis on risk management approaches. In line with
in our markets. The aim is to support young people from low- the guidance from both the local regulator and our Group,
income communities, especially girls, to learn new skills and we have recognised principal risks in ten areas, including
improve their chances of securing employment or starting
* Required by regulation as per Nepal Rastra Bank’s (NRB) circular released 27 July 2020 and amended on 24 August 2021, 23 Feb 2022 and 14 Dec 2022
9
Compliance, Credit, Financial Crime, Information and Cyber Outlook and the Way Forward
Security, Model, Operations & Technology, Reputational and
Sustainability, Traded and Treasury. Given their integrated We maintain our view on Nepal’s economy being unique and
nature, Digital Asset Risk (at Group level), Third Party Risk and resilient due to various structural advantages including a low
Climate Risk are categorised as integrated risk types in the debt to GDP ratio, a young population, rapid digitisation, and
Bank’s ERMF. a strong base of FX reserves as of date. There has been a
growth moderation, following prudent stabilisation measures
Our Risk Management approach in the Group incorporates in the monetary and fiscal policies to address inflation and
enhancements including the elevation of model risk into increasing global commodity prices which exerted some
a Principal Risk Type (PRT) as well as updates aimed to pressure on the external sector. As domestic and external
holistically transform our approach (for Information and demand restores, with policies focused on increasing
Cyber Security, Operational and Technology Risks). We are hydropower generation and agricultural output, some
constantly updating our PRTs to reflect changes in risk and correction in the growth moderation is expected. Multilateral
local requirements. We believe that PRTs are risks inherent in agencies real GDP forecasts range between 4 – 5% for the
our strategy and business model. These are formally defined coming FY while this year seems to be slower, compared to
in our ERMF which provides a structure for monitoring through the estimates released by National Statistical Office (NSO)
the Group and Local Board-approved Risk Appetite. We will estimated at around 2%. With emerging markets growing
not compromise adherence to our Risk Appetite in order to at a faster pace compared to other markets, Nepal being
pursue revenue growth or higher returns. Oversight on risk linked to China and India, is expected to benefit through the
management is ensured through Board and Management start of various cross border economic advancements and
level committees. developments around bilateral trade agreements.
The Directors confirm that, throughout the period, the Bank Nepal’s potential for renewable energy is connected to the
has complied with provisions set out in the local regulatory economic growth of the country; we believe that utilising the
framework applicable to Nepal. renewable energy prospects to export power has the possibility
of supporting the country’s Balance of Payments (BoP) and
Structure of Our Board growth potential in the long term. This also has been cited
as a factor that favours the external sector of the country
Rino Santodiono Dono Seputro and Anirvan Ghosh Dastidar positively. Hydropower has been cited to have contributed to
represent Standard Chartered Grindlays Pty Limited, the industrial growth of Nepal in multilateral economic reports
Australia in the Board;. Siddhant Raj Pandey represents as an as well (Nepal Development Update released on 3 October
Independent Director and Avinash Agrawal, represents the 2023). We believe that the SSL targets and the focus of the
general public shareholders in the Board. I, Zarin Daruwala, regulators on productive sectors to augment the country’s
am assuming the Chairperson’s role representing Standard economic growth is dedicated to supporting this policy
Chartered Bank, U.K. in the Board of SCBNL. direction.
As on the date of this report, the Board is made up of the As last year, we maintain that Nepal is extremely rewarding
Non-Executive Chairperson, one Executive Director and three in the long term, and immediate shocks (positive or negative)
Non-Executive Directors of which one is an Independent tend to equilibrium quickly, which is why our commitment
Professional Director, and one is a Public Director representing and focus remains for the long term. This is also supported by
General Public shareholders as per the provisions of the Bank various reports on the macroeconomic outlook of the country
and Financial Institutions Act and the Companies Act. in addition to the reserves position as published in the NRB
data for external sector indicators as of FY 2022/23. Our
strategy for the next FY will be focused at driving a healthy
balance sheet growth, maintaining a strong capital position,
increasing our focus in executing robust risk management
practices and operating a well-managed diverse portfolio
that makes us resilient during challenging external conditions.
External sector trends (Macroeconomic and financial situation data, NRB):
14 12
12 10
10 8
USD Bn
Months
8
6
6
4
4
2 2
0 0
23
22
22
23
23
23
23
-2
-2
l-2
-2
-2
-2
-2
b-
n-
n-
p-
-
p-
ar
pr
ay
ug
ug
ct
ov
ec
Ju
Ja
Ju
Fe
Se
Se
A
D
N
A
A
USD Bn Merchandise and Service Import Cover (Months)

Real GDP Forecast 2019/20 2020/21 2021/22 2022/23 2023/24 (F)

World Bank -2.4 4.8 5.6 1.9 3.9
IMF -2.4 4.8 5.6 0.8 3.5
Report of the BOD

SCB Research -2.1 2.7 5.8 2.2 4.5
ADB -2.4 4.8 5.6 1.9 4.3
Government -2.4 4.8 5.6 1.9 6.0
Sources: ADB, IMF (Third review of Nepal ECF dated November 30, 2023), World Bank (Nepal Development Update October 2023), SCB Research, National
Statistical Office and FY 2023/24 target mentioned in the latest Budget Speech released 29 May 2023 (point 494)
This year’s performance is a testament to our teams’ ‘Net Zero’ targets of the country. Initiatives centred on this
perseverance to deliver our strategy while maintaining our theme resonate strongly with our Group strategy and ‘Stands’,
valued behaviours including ‘Never settle’, ‘Better together’ and we have worked on various partnerships, collaborations
and ‘Do the right thing’. Despite slower economic growth rates and initiatives that will have long term benefits for the
and a challenging credit environment, our teams have been Franchise.
successful in executing our strategy, generating accretive
returns for our shareholders, while remaining compliant to Kudos to our Management team for a successful execution
regulatory requirements. of our strategy while remaining committed to our Purpose
of driving commerce and prosperity through our unique
Some key performance highlights of the Bank for the FY ended diversity. SCBNL remains committed to playing a unique role
16 July 2023 based on published unaudited financial results of in the country’s economic growth, as the only International
20 commercial banks are: Bank present in Nepal and is proud of its long history, having
started its operations from 1987. We are proud of our network
• Highest Return on Equity (20.8%*) strength, agile culture and international expertise that help us
deliver our strategic priorities.
• Highest Capital Adequacy Ratio (17.1%*)
The Board will continue to support the team while maintaining
• Second highest growth in Net Profit (53.6%*) oversight on governance and risk to deliver against the agreed
targets; we also maintain the view that the leadership team is
• Second highest EPS (NPR36.8*) on the right track in the execution of strategic priorities. We
would also like to express our heartfelt gratitude to our clients
• Second lowest Cost of Fund (6.91%*) for their continued trust, our employees for the delivery of
remarkable performance in the financial year 2022/23 and our
* Audited figures for SCBNL valued shareholders for your support and guidance.
Our strategy in Nepal will continue to hinge on the As always, we would like to express our gratitude for the
fundamentals we have focused on which also helped us valuable support and guidance from the Ministry of Finance,
through various challenging periods in the economy, including Nepal Rastra Bank and other regulatory bodies, who have
COVID-19 and a surge in global commodity prices. These helped us tremendously in executing our strategic priorities
fundamentals include maintaining a healthy balance sheet, and contributing to the financial sector of Nepal.
strong capital position, robust risk management practices
and a well-managed business portfolio. This also has been
the base of our resilience to external shocks, and we will Thank you,
continue on the same principles. One key change and focus
area that we have paid special attention to this year is around
Sustainable Finance and doing our part to contribute to the
Zarin Daruwala
Chairperson
Date: 16 November 2023
11
Anirvan Ghosh Dastidar
CEO and Executive Director

Chief Executive Officer’s (CEO) Report
ªChief Executive Officer’s Reportº
CEO’s Report
Our record performance this year comes at the back of various Our primary focus has been on strengthening our balance
macroeconomic headwinds, including global commodity sheet, effectively utilising capital, and ensuring maximum
price shocks that had an impact on local imports and external returns to our shareholders. This approach has been carefully
sector pressures and thus local liquidity during the first half chosen to align with the local context and the unique economic
of FY 22/23. Our strategy to focus on organic balance sheet structure of Nepal. It is evident that due to the structure of the
growth combined with robust risk management practices, financial sector in the country, majority of income is derived
focus on initiatives that contributed to maintain the Bank’s from interest earnings, creating a strong dependency on
capital position and our push towards Capital Light Income the aggregate demand and economic indicators including
(CLI) blended perfectly with market conditions, allowing us to inflation and foreign exchange reserves. Despite headwinds,
maximise shareholder returns. we are committed to the priorities outlined by the Central
Bank, notably the focus on channeling credit to productive
This year we have been successful in obtaining a growth in sectors through Specified Sector Lending (SSL) targets. There
Profit After Tax (PAT) by 53.6%, driven by an increase in both is also a substantial synergy between SSL priorities and the
Net Interest Income (NII) and Non-Funded Income (NFI). Our potential of increasing investment in renewable energy in the
focus on fundamentals to ensure positive income to cost country. This aligns seamlessly with our overarching global
jaws combined with an adherence to our global standards ‘Purpose’ of ‘Net Zero.’
on credit risk helped us navigate through macroeconomic
headwinds despite increased industry impairment levels. Our A recurring theme this year, also has been managing risk
results have demonstrated that the work we have put over the and the focus on an efficient balance sheet. While we are
years on strengthening our fundamentals has been strategic. capitalised adequately, we are also contemplating the
We have announced 19.00% cash dividend, 249 basis points best way forward given regulatory developments around a
(bps) higher than last year. transition to more advanced models of credit risk calculations.
Therefore, while the balance sheet remains liquid and well
We remain committed to furthering our organic growth capitalised with a Capital Adequacy Ratio (CAR) of 17.1% as
supported by fundamentals which we have worked on through against the regulatory requirement of 11%, the prime focus has
the years – we remain adequately liquid, well capitalised and been on optimising capital position and increasing efficiency
prepared to deliver growth targets for the year to come. in optimising Risk Weighted Assets (RWA) for the franchise. We
are looking at various collaborations around risk participation
in addition to strategic initiatives to focus on CLI. Our Current
Account and Savings Account (CASA) deposits continue to be
amongst the highest levels in the industry at 61.3% which also
drives our advantage of having one of the lowest base rates in
the industry. While we continue to maintain a healthy position
of being highly capitalised and liquid, we also are focusing on
efficiency to minimise risk further.
We see a substantial opportunity to create a brighter future

through our Purpose which is to promote commerce and
prosperity by leveraging our unique diversity. Our commitment
is to foster a consensus to address critical global issues,
specifically ‘Accelerating Zero’, ‘Lifting Participation’ and
36th Annual General Meeting of the Bank on 11 December 2022
‘Resetting Globalisation’. These objectives align with our
overarching strategic framework. In the current year, we have
Our Local Strategy using our Global Best expanded our efforts and initiated impactful action in Nepal
in line with our core strategic pillars as follows:
Practices to Deliver our Purpose in Nepal
• Affluent: As Nepal’s sole AAA rated company, we focus
An important policy discussion we have been witnessing on cultivating loyalty and trust among affluent segments
through the years, is to discuss strategies to present Nepal’s by offering personalised services. Our focus is also on
macroeconomic story better to the world. This is on the digitalisation, partnerships and collaboration to further
back of the country’s potential on multiple fronts including strengthen our unique advantages derived out of efficiency,
renewable energy, infrastructure, and tourism. Nepal’s unique including one of the lowest base rates in the industry.
macroeconomic features, such as the comfortable public
debt position, the young population and rapid digitisation • Network: Harnessing our network strength to drive
has been the source of resilience despite challenges in commerce and prosperity in Nepal and to use our position
global macroeconomic environments. We also see that new as the only international bank in the country for various
regulations, stabilisation measures during shocks and capital strategic purposes. We are actively working on initiatives
controls have provided the necessary support to the financial both in the national level and with our clients, on various
industry. This presents a unique opportunity of combining fronts.
global best practices to a customised strategy that would
generate accretive returns to shareholders. • Mass Retail: We have implemented various digital solutions
in our systems and are constantly upgrading our offerings
in line with market developments. We have also refreshed
13
our strategy to concentrate on Business Banking and the The only AAA Rated Company in Nepal for
Affluent/Emerging Affluent clients in Nepal to service both
the MCSME and Priority segments.
the Fourth Year in a Row
In February 2023, ICRA Nepal reaffirmed the issuer rating of
• Sustainability: Our commitment to exploring the
Standard Chartered Bank Nepal Limited (SCBNL) as
potential of Nepal’s Sustainable Finance proposition is
[ICRANP – IR] AAA for the fourth consecutive year. This rating
twofold; firstly, we view SSL in Agriculture and Energy as
signifies the Bank’s ability to meet its financial obligations in a
a significant opportunity and secondly, we are exploring
punctual manner.
various innovative financial solutions, collaboration, and
partnership opportunities.
The rating assessment considers key factors including our
competitive positioning being supported by our global brand
The Board continues to focus on issues around diversity, health
reputation and cost-efficient access to funds. Additionally, it
and safety, community partnership and conduct with the
has been noted that we also possess a deposit portfolio with
highest standards while reviewing the Bank’s performance
a sizeable proportion of low-cost deposit which is contributing
and the implementation of the Nepal strategy.
to our rating. Our rating action has also been quoted to be
supported by our profitability indicators including our Net
Interest Margins (NIMs), a fee-based income, and minimal
credit related expenses. Moreover, the rating action has
been noted to be reinforced by our ownership structure and
the support we receive from the Group; our Technical Service
Agreement (TSA) with SCB-UK has been factored in the rating
decision to ensure parental backing.
Our track record in the industry has been noted to be since

our inception in 1987 in Nepal, on the back of our adherence
to established underwriting norms, implementation of risk
management practices, the expertise of our management
Townhall with the Chairperson and the CEO, during which they shared key team and our ability to maintain non-performing loans (NPLs)
highlights from Nepal’s performance, and valuable life lessons from their
at acceptable levels.
professional and personal journey
Overall Performance
The Bank showcased a strong financial performance of 53.6%
Year on Year (YoY) growth on net profit with positive jaws
of 31% and reflected a healthy assets and deposits growth
of 6.4% and 20.2% despite tough market conditions and
subdued credit demand. The Bank has booked a record net
profit of NPR3.5Bn in the history of operations in Nepal since
1987.
Major key performance indicators improved substantially

this year because of improvement in margin and assets
momentum during the year. The highlights are as follows*:
• The Bank is ranked 6th on profitability as compared to 17th CEO participating in a Meet and Greet programme with the executive
position last year members of the Education Consultancy Association of Nepal (ECAN)
• ROE at 20.8% and EPS at NPR36.8 puts the Bank on a better Giving Back to Our Communities
footing versus the competition
The Bank has collaborated with Nepal Eye Programme
• The Bank reported a capital to risk weighted assets ratio (Tilganga Institute of Ophthalmology) and NGO MITRA
(CAR) of 17.1% against the minimum regulatory requirement Samaj to identify and treat cases of avoidable blindness,
of 11% cataract and posterior segment eye diseases across all
provinces in the country. Eye health care is an essential
• Strong assets quality continued with NPL ratio at 1.18% while component of basic health services to be provided to all
the industry average was at 2.98% citizens as stated in the constitution of Nepal. Despite efforts
from various stakeholders, vision impairment continues to be a
• The Bank’s healthy deposit profile continues with a relatively major problem. The Bank has made a significant contribution
high share of low-cost deposits which has helped in of NPR10Mn to help provide accessible, affordable and quality
maintaining one of the lowest cost of funds and base rate in eye care in the country. The project will focus on aged people,
the industry women, children, people with impairment, and people with
disabilities. The funding provided to MITRA Samaj will be
used for the Cataract Blindness Alleviation Project aimed at
*Audited figures for SCBNL, based on unaudited results of 20 commercial identifying cases of avoidable blinding diseases, including
banks.

cataract, among the hard-to-reach population (especially SCBNL has been historically working on the broader
50+years), in priority areas of all provinces of Nepal. purpose of helping the country achieve development goals
CEO’s Report
by marketing the positive macroeconomic story of Nepal
There are various other initiatives under the Futuremakers around resilience and the potential of Sustainable Finance in
programme where the Bank currently is involved. Futuremakers various international forums. SCBNL has also been providing
by Standard Chartered is our global initiative to tackle various services to the industry specially around bringing in
inequality by promoting greater economic inclusion in our FDI, sourcing international financing, banking the banks and
markets. The programme supports young people from low- acting as an ambassador for Nepal in international financial
income communities, especially girls to learn new skills and markets. Considering previous discussions largely centred
improve their chances of securing employment or starting around only one approach of financing (i.e., Blended Finance),
their own business. With this vision, SCBNL has been able to we felt the need to update the discussion to consider holistic
contribute to several projects: aspects of new global financial instruments and strategies
given global macroeconomic developments to close the SDG
• Project Silpa: This is an extension of our project Kishori which financing gap for Nepal.
was implemented last year in partnership with Shequal
Foundation, across all provinces of Nepal. The Bank has We organised the ‘International Conference on Financing
contributed NPR5Mn to this project, aimed to encourage, for Nepal’ 2023 jointly with the Investment Board Nepal (IBN,
empower, and equip adolescent girls with foundational, Government of Nepal) and in collaboration with the Society
financial, digital and life skills. Through KISHORI and Silpa: of Economic Journalists – Nepal (SEJON) on 12 May 2023, with
Shaping the Future, we are creating a lasting impact in the following objectives:
the lives of 200+ young women from underprivileged • To bring together private sector, development partners
backgrounds across Nepal, providing them with essential and government sectors to discuss financing instruments
skills and opportunities for personal and professional and structures possible for Nepal, its practicability in
growth. development projects, and policy interventions
• PEEARL project: We have been partnering with Plan • To explore best practices and experiences from other
International Nepal since January 2022 to implement the markets
‘Promoting Economic Empowerment of Adolescents for • To discuss policy interventions required to create financial
Resilient Livelihood (PEEARL)’ project in two municipalities of infrastructures that would support the use of financing
Bardiya District. The major objective has been to ensure that instruments in Nepal
vulnerable and excluded young people, especially young
women (18-24 years) are made resilient and are actively • To strategise on how Sustainable Finance Instruments (SFI)
engaged in decent work of their choosing. Through the and other financing instruments can support major national
project, we have been able to achieve a decent livelihood priorities including:
for 120 young women, whether through job placements or - Net Zero Targets
business start-up support. - Graduation from LDC status and the impact to Debt
Servicing of Nepal
- To discuss the challenges and way forward to optimally
Nepal’s Potential for Sustainable Finance incentivise and utilise Sustainable Finance approaches in
infrastructure projects at scale
Macroeconomic and geopolitical changes post COVID-19 saw
global output losses and therefore uneven recovery for many
markets including Nepal. Additionally, increasing financial
instability impacted inflation and economic growth for various
countries; these events and crisis scenarios have led to setbacks
to financing sustainable opportunities. Post COVID-19, various
estimates cited that the Sustainable Development Goals
(SDG) financing gap in developing countries had increased
by 56% in 2020, totalling USD3.9Tn. Nepal was no exception
to global macroeconomic trends and the funding gap which
was already noted to be significant was expected to widen.
Government reports estimated a funding requirement of
USD17.5Bn annually till 2030 to achieve SDG goals for Nepal
and current levels of Official Development Assistance (ODA)
were forecasted to leave a gap of 12% of GDP, requiring action
from various stakeholders including the private sector. On the
flipside, targets for the country were ambitious; Nepal’s 15th
Periodic Plan envisions graduating from the ‘Least Developed
Countries’ (LDCs) status by 2022 and achieving its Sustainable
Development Goals (SDGs) by 2030.
Nepal has a unique advantage that needed more recognition
in international markets. Moreover, the potential of Sustainable
Finance given natural assets in the country for renewable Glimpses from the International Conferencing on Financing for Nepal
energy complements the current global attention around ‘Net 2023 attended by the Prime Minister and Finance Minister, and senior
Zero’ and ‘Climate Change’. representatives from the government and the industry
15
Representation of ‘Lifting Participation’ in the country and regulatory lending
targets by supporting small enterprises. As a strategy we
As of the date of this report, the Bank maintained 15 points are focused on building a strong low-cost CASA base and
of representation which included 12 branches and 3 extension have aligned our deposit product offerings accordingly. We
counters. Services were also extended to our clients through 27 do offer products including the Senior Citizen account and
ATMs located across the country. Non-Resident Nepali (NRN) Accounts; and are continuously
exploring modification to product offerings as per changes
in the market. We have been continuously revamping Client
Serving the Corporate Clientele through Value Propositions (CVP) and have bundled offers in the
Commercial, Corporate & Institutional market which has helped us better connect with clients.
Banking (CCIB) CPBB also offers a wide range of lending products including
Mortgage, Personal Loans and Credit Cards. Our Business
SCBNL is strategically positioned to offer a diverse set of Banking segment provides a comprehensive financial solution
banking products and services tailored to specific market to entrepreneurs and endeavours to meet the end-to-end
segments, enabled by our teams’ concentrated efforts and banking needs of small and medium sized enterprises as the
product partners. Within this framework, our Commercial market evolves. We have consistently expanded our Business
Banking (CB) division is primarily focused on catering to the Banking portfolio which remains a key focus for the CPBB
local corporate sector, aiming to harness the entrepreneurial segments, and we believe that this also would help us foster
drive while fostering a long-term vision for international an ecosystem including Priority and Employee Banking which
expansion. would help us to drive revenue stream from these segments.
Our Corporate & Institutional Banking (CIB) services are

designed to leverage the vast expanse of our global network.
These services encompass a spectrum of lending and
financing solutions tailored to the unique needs of companies
engaged in intricate international operations. Within the
ambit of CIB, we extend our services to banks, governmental
entities, public sector organisations, and investors seeking to
optimise their activities within the regions of Asia, Africa and
the Middle East.
Our commitment to our Purpose in Nepal is emphasised by the

delivery of world class International Trade and Cash Services, a
domain overseen by a dedicated team of experts specialising
in Transaction Banking. We also provide Foreign Exchange
services through our Financial Markets team. For other Inauguration of Digital Standing Instructions by MetLife Nepal and
Standard Chartered Bank Nepal Limited for premium payments collection
distinctive services that require customisation, we draw upon
the strength of our network and specialised teams. Our global
presence and geographical alignment with the Belt and Road Client Experience
Initiative, spanning across 47 countries positions us in a unique
and unparalleled role. This strategic position enables us to SCBNL distinguishes itself within the market through its client
play the role of an ambassador in facilitating Foreign Direct centric approach. Our commitment to delivering exceptional
Investments (FDI) which is extremely relevant for Nepal’s long service is underscored by consistently high client satisfaction
term economic development particularly key sectors including scores obtained through periodic surveys. As a client-oriented
Energy, Transportation, Agriculture and Tourism. institution, our Bank places significant emphasis on effective
complaint management.
Consumer Private and Business Banking The process of receiving, resolving, analysing, and providing
(CPBB) Overview and Prospects feedback on complaints is overseen by the Client Experience
team, which serves as a catalyst for process enhancements
With over 36 years of experience in Nepal, we have gained based on root causes identified in received complaints. These
insights into the local economy enabling us to effectively insights are presented at the Customer Experience Meeting
collaborate with our clients. Our unique blend of local (CEM) chaired by the Head of Consumer, Personal and
expertise and our network strength empowers us to offer Business Banking (CPBB) as well as other management / top
customied solutions including digital banking services with teams, and findings of which are presented to the Executive
a personalised touch. We have included several offerings in Committee (ExCo).
our digital platform across deposits, payments, financing, and
wealth management. Addressing client concerns about CPBB’s products, services,
colleagues, or the complaint handling process itself is of
Through our CPBB segment, we serve over 140,000 clients paramount importance. We aim to address complaints
across Personal, Priority and Business Banking, with a primary promptly and fairly, ensuring that clients are left satisfied with
focus on Business Banking and Affluent/Emerging Affluent solutions provided by our dedicated Client Experience team.
clients. Our strategy is centred around the growth potential of At SCBNL, complaints are not viewed as negative feedback
Business Banking which also contributes to our dual purpose but rather as opportunities to engage with our clients,
clarify misunderstandings, and work towards improving any

identified shortcomings to prevent future recurrences. Outlook and the Road Ahead
CEO’s Report
The Bank believes in fostering a sense of shared responsibility Nepal has been a rewarding market for SCBNL, and we
for client experience, with every team member contributing maintain that the long-term outlook for the franchise remains
to how we are perceived in the market. Our digital service positive. The country has shown resilience by successfully
offerings have expanded; an example includes our integration enduring through several pressure events such as a decade
with fast payment service offerings in Nepal. This not only long conflict (1997-2006), political transition, a global financial
enhances the need for enhanced cybersecurity, but also the crisis (2008-2011), a massive earthquake (2015), and the
necessity of prompt responses in case of any incident in turn COVID-19 pandemic (2020-2022) in the past. One pattern we
creating a streamlined offering through online banking. have witnessed is the rapid recovery of economic growth rates
after pressure events.
We believe in the invaluable role of client feedbacks and
compliments in shaping our product and services offerings to The macroeconomic situation of the country in FY 22/23
better align with client needs and enhance overall experiences. remained broadly stable. The external position of the country
We have consistently improved our 24 x 7 Client Care Centre has exceeded the Central Bank targets of maintaining more
services, providing uninterrupted assistance throughout the than 7 months of merchandise and service import cover
year. The Client Care Centre serves as a vital channel for supported by prudent fiscal and monetary policies, strong
clients to submit requests, which are expected promptly post- remittances, and recovery in tourism after the pandemic,
authentication, ensuring clients are left satisfied with their despite global inflationary pressures. Resumption of exports
experience. of Cement, Electricity and IT services including remittance
inflows is expected to help maintain external sector stable in
The table below shows the number of complaints received the future. Growth, as forecasted by IMF and the World Bank
and redressed during the fiscal year 2022-23: is projected to recover to close pre-pandemic levels in 2024
and this remains to be a positive driver for growth. As we
have witnessed that the performance of the banking sector
S. No. Particulars No. of Complaints has a high correlation to the economic activity of the country,
opportunities of furthering our growth targets should broaden
as the economy gains momentum.
1 Cases pending at the beginning of the 2
year
Though there were some pressures experienced this year in
the economy in various indicators including Consumer Price
2 Cases received during the year 835
Index (CPI) and public finances, as the economy tends to a
normal pace, this is expected to stabilise. We maintain that
3 Cases redressed during the year 799 inflation seems to remain moderate, almost in line with the
Indian inflation given the prudent monetary and fiscal policy
measures. We do trust that the long-term growth trajectory for
4 Cases pending at the end of the year 38 Nepal has not been impacted by these momentary instances
as structural aspects of the economy remain resilient. We
see an immense potential for sustainable finance for the
country given renewable energy assets and the progress in
the financial sector. The commitment of the government on
various fronts including initiatives to connect the country to
global financial markets does signal opportunities for various
sectors including Agriculture, Energy, Information Technology
(IT), Trade and Tourism.
The financial sector of the country remains resilient and

continues to adapt to best international practices including
the introduction of various aspects, as mentioned in the annual
Monetary Policy such as the transition to more advanced
methods of risk identification, including Expected Credit Loss
(ECL) measures as per local accounting standards and the
introduction of Internal Credit Risk Grading frameworks. The
recognition of capital charges and the transition to more
realistic risk recognition given the country’s macroeconomic
The dedicated Student Service Counter at New Baneshwor branch for profile is an important achievement and we remain fully
outbound students to avail Foreign Exchange facilities and other related committed to support this initiative given our experience
services and practice globally. We believe that the heightened focus
on credit risk including new policies around Working Capital
Guidelines, when combined with modern concepts of ECL
methods including the calculation of Probability of Default
(PD) and client credit grades, will benefit the industry at large.
17
We would like to express our gratitude for the support and
guidance extended by Nepal Rastra Bank and the Ministry
of Finance, and we remain committed to drive economic
development though the strategic initiatives that contribute
to economic development and the advancement of the
financial sector. Our heartfelt thanks to our shareholders,
whose unwavering support has contributed to a robust
performance this year. We hold firm in our belief that, united
as team, we will persistently work towards realising our shared
goals in the upcoming year.
Auditors
S.A.R. Associates, Chartered Accountants, were appointed as
Statutory Auditor for FY 2022-23 by the 36th Annual General
Meeting of the Bank held on 11 December 2022. As per the
recommendation of the Audit Committee, this meeting will
decide on the appointment of the auditor for next financial
year.
Proposed Dividend
The 449th Meeting of the Board of Directors of the Bank has
proposed cash dividend of 19.00% to the shareholders of the
Bank for the year ended 31 Ashadh 2080.
We won the award for the ‘Best Managed

Anirvan Ghosh Dastidar
Commercial Bank in Nepal’ at the 7th NewBiz
Business Conclave & Awards organised by
Chief Executive Officer New Business Age Pvt Ltd.

Corporate Governance
ªOur Approach to Corporate Governanceº

The Board of the Bank has taken the following steps for • The Executive Risk Committee (ERC) chaired by the Chief
strengthening corporate governance: Risk Officer and represented by senior business and other
risk staff is directly responsible for overseeing and managing
• The Board is responsible and accountable to the all the risks of the Bank except for Treasury Risk which is
shareholders and ensures that proper corporate governance managed by the Asset and Liability Committee (ALCO).
standards are maintained.
• The Country Financial Crime Risk Committee, chaired by
• The Bank adheres to the applicable laws, regulations the CEO, is a management level committee that meets at
and directives to meet the local regulatory requirements. least six times a year. It is responsible to ensure appropriate
In addition to this, the Board has also adopted Standard governance of financial crime risk and to oversee the
Chartered Group Risk frameworks, policies and standards implementation of the risk type framework applicable to
relevant to business segments and functions. financial crime.
• An organisation structure that supports clear lines • The Credit Issue Committee (CIC) chaired by the CEO
of communication and tiered levels of authority with is responsible for reviewing the existing Early Alert (EA)
accountability has been established. and Stressed Assets Group (SAG) portfolio in Corporate,
Commercial & Institutional Banking (CCIB), Stress Account
• The management of the Bank is committed in maintaining Management (SAM) portfolio in Business Banking as
a sound system of internal controls enlisting: well as new accounts presented to the Committee. It also
reviews CPBB Portfolio to ensure credit issues or adverse
• Efficiency and effectiveness of operations trends in the portfolio are identified and addressed through
appropriate actions.
• Compliance of laws and regulations
• Reliability and transparency of financial reporting • Internal control policies, tools and reporting structures have
been enhanced to provide greater clarity over roles and
Board’s Sight on Internal Control System of responsibilities. Relevant training materials are updated on
a continuous basis and staff members are provided training
the Bank appropriate to their job roles and responsibilities.
Synopsis:
• There is an annual budgeting and strategic planning
• The Audit Committee meets quarterly to review the internal process. Financial forecasts are reviewed during the year
and external inspection / audit reports, control and on a periodic basis to reflect significant changes in business
compliance issues and provides feedback to the Board as environment. Regular reporting and monitoring of financial
appropriate. performance of the departments and the Bank as a whole,
using operating statistics and monthly management
• The Board Risk Committee meets on a quarterly basis to accounts which highlight key performance indicators and
review overall risks of the Bank. Necessary guidance / variance from budgets and forecasts, is in place.
suggestions are given by the Committee to the Board as
appropriate. • The ultimate responsibility of effective Risk Management
rests with the Board supported by Audit Committee, Board
• The Board Financial Crime Risk Committee meets on a Risk Committee, Board Financial Crime Risk Committee,
quarterly basis to review the financial crime related risks of Executive Committee (EXCO), Executive Risk Committee,
the Bank, including status of adherence to NRB’s Directives Credit Issue Committee, Financial Crime Risk Committee
for mitigating financial crime. and ALCO.
• The Management gives due consideration to the • Embracing exemplary standards of governance and ethics
recommendations made by independent units within first wherever we operate is an integral part of our strategic
and second line of defence and the internal and external intent. The Standard Chartered Group Code of Conduct is
auditors for improvements in the internal control system, adopted to help us meet this objective by setting out the
and implements such recommendations. standards of behaviours that we must follow with each
other and our clients, communities, investors and regulators.
• The Management has adopted different strategies to
ensure effective monitoring and improvement of internal
controls. These include Enterprise Risk Management
Framework (ERMF) and Internal Audit in which assurance
responsibilities are divided into three lines of defence i.e.
the business function, control functions independent of the
business function and Group Internal Audit.
• The Executive Committee (EXCO) represented by heads of

all businesses and functions is the apex body managing the
day to day operations of the Bank. Chaired by the CEO, it
meets at least once a month for formulating and reviewing
strategic decisions.
19
The Board
Analysis
The Board is collectively responsible for the long-term success
of the Bank and for ensuring leadership within a framework of
effective controls. The Board sets the strategic direction of the The Board of SCBNL is responsible for the overall
Bank, approves the strategy and takes appropriate actions management of the Bank and for ensuring that proper
to ensure that the Bank is suitably resourced to achieve its corporate governance standards are maintained
strategic aspirations. The Board considers the impact of its along with being responsible and accountable to
decisions and its responsibilities to all stakeholders, including the shareholders. The Board has complied with
employees, shareholders, regulators, clients, suppliers, the the principles and provisions of Nepal Rastra Bank
environment, and the communities. The Board meets regularly Directives on Corporate Governance and the provisions
and has a formal schedule of matters specifically reserved for of Companies Act, 2063 and Banks and Financial
its decision. These matters include determining and reviewing Institutions Act, 2073 (the ‘Corporate Governance
the strategy of the Bank, annual budget and performance Code’). The Bank confirms that:
oversight, overseeing statutory and regulatory compliance,
risk and governance, people, culture and values, and the • Throughout FY 2079-80, all the provisions of
Bank’s capital. Corporate Governance have been complied with
by the Directors. The Bank complied with the listing
During the year under review, 15 board meetings were held. The rules of Nepal Stock Exchange Limited
Directors were given accurate, timely and clear information
so that they could maintain full and effective control over • Throughout FY 2079-80, the Bank complied with
strategic, financial, operational, compliance and governance the Securities Registration and Issuance Regulation,
issues. 2073
• The Bank has adopted a Code of Conduct regarding

securities transactions by Directors on further
terms no less than required by Nepal Rastra Bank
Directives and the Companies Act, and that all the
Directors and Staff of the Bank complied with the
Code of Conduct throughout FY 2079-80
The following table illustrates the number of Board Meetings attended during the FY 2079-80 and sitting fees paid to the
Directors:
Board members Meeting attendance Meeting fees paid

Zarin Daruwala, Chairperson 15 Nil-does not take meeting fee
Karen De Alwis, Director 2 Nil-does not take meeting fee
Rino Santodiono Dono Seputro, Director* 12 Nil-does not take meeting fee
Siddhant Raj Pandey, Independent Director 13 NPR273,000
Anirvan Ghosh Dastidar, Director 13 Nil-does not take meeting fee
Bharat Kunwar, Public Director 6 NPR126,000.00
Avinash Agrawal, Public Director** 9 NPR189,000.00
* Rino Santodiono Dono Seputro replaced Karen De Alwis effective 4 September 2022
** Avinash Agrawal replaced Bharat Kunwar effective 11 December 2022
Continuous development of our Board Directors is crucial to the Non-Executive Directors is crucial and well understood at
maintaining a highly engaged, well-informed and effective SCBNL.
Board. Mandatory learnings and trainings are key elements
of the Directors’ fit and proper assessments are mandated This year’s Board effectiveness review, as completed by
under the Senior Managers Regime. During the year, all the date of this report, took the form of a self-assessment
Directors received a combination of mandatory learnings and questionnaire, completed by each Director which was
trainings, internal and external briefings, presentations from facilitated by Independent Audit, a service provider. This is
guest speakers and papers on a range of topics to ensure an opportunity for Board members to offer their insights into
effectiveness. The Committee members also received specific the effectiveness of the Board and highlight areas where its
training relevant to their work. effectiveness could be enhanced. A final report incorporating
the feedback and observations from the Directors, including
Board Effectiveness Review recommendations for action, was presented to the Board
meeting for its consideration. The overall conclusion from
The effective operation of the Board and the collaborative this year’s Board effectiveness review was that the Board
and open relationship between the Executive Directors and effectively focuses on the stakeholder management,
proactiveness and ESG.

As on the date of this report, the Board is made up of one Non- and reviews internal and external audit reports, control and
Executive Chairperson, one Executive Director and three Non- compliance issues, the Bank’s financial condition etc. The Audit
Executive Directors of which one is an Independent Director Committee provides feedback to the Board of Directors by
appointed as per the legal requirement and one of them is a tabling Audit Committee meeting minutes at the subsequent
Public Director representing general public shareholders. The Board meeting for review.
Board composition complies with the legal and regulatory
requirements. Three Directors including the Non- Executive The Audit Committee also liaises with Group Internal Audit
Chairperson are nominated by the Standard Chartered Group. to the extent necessary to ensure that the conduct of the
Committee’s business is consistent with and complementary
Induction of Directors and ongoing to the practice and requirement of Standard Chartered Group
in this regard.
engagement plans
The following table illustrates the Audit Committee’s
All new Board Directors receive an extensive, formal and attendance and meeting fees paid during FY 2079-80. A total
tailored induction programme to enable them to function of 8 meetings were held during the period.
effectively as quickly as possible, while building a deep
understanding of our business and markets. Their induction is Audit Committee Meeting Meeting fees paid
supplemented with a handbook, which includes information members attendance
on a broad range of matters relating to the role of a Director
as well as details of applicable procedures. Training and Rino Santodiono 5* Nil – Does not
development of our Directors is ongoing and does not end Dono Seputro, take
following their induction. Chairperson meeting fee
Board Level Committees Gopi Bhandari, 2** Nil – Does not

Member take
The Board delegates certain responsibilities to its Committees meeting fee
to assist them in carrying out its their function of ensuring
independent oversight. Each of the Committees play an
independent and key role in supporting the Board. The Bank Kabir Tamrakar, 8 Nil – Does not
has three Board Level Committees, namely Audit Committee, Member Secretary take
Board Risk Committee and Board Financial Crime Risk meeting fee
Committee constituted as required by the applicable laws and
regulations. The Bank’s Board has made a conscious decision
* The preceding Chairperson attended three meetings.
to delegate broader range of issues to the Board Committees. **The preceding member attended six meetings and NPR126,000 was paid
The linkage between the Committees and the Board is critical, as Meeting fees
given that it is impractical for all non-executive directors to be
members of all Committees. During the financial year 2079-80, Audit Committee
performed the following tasks, among others:
In addition to there being common Committee membership,
the Board receives minutes of each of the Committees’ • Reviewed and reported to the Board on the Bank’s internal
meetings. Furthermore, the Committee chairs/ coordinators control system
provide regular updates to the Board throughout the year.
We have effective mechanisms in place to ensure that there • Reviewed the issues raised in the Internal Audit Reports and
are no gaps or unnecessary duplications. The Bank also has directed them to the management for resolution
clear guidance for the Committees in the fulfilment of their
oversight responsibilities. • Reviewed the work performed by Internal Audit against the
country Audit plan
Audit Committee
• Reviewed and approved the Audit Committee’s Terms of
As mandated by the local regulations, the Board has formed Reference
an Audit Committee with clear Terms of Reference (ToR).
The duties and responsibilities of the Audit Committee are in • Reviewed and approved the revised Audit Charter
congruence with the framework defined by Nepal Rastra Bank
Directives, Banks and Financial Institution Act and Companies • Reviewed the annual Audit plan based on the risk
Act. assessment and regulatory requirements
The Audit Committee is chaired by a Non-Executive Director • Reviewed the Audit team’s resourcing and development
and other members include Company Secretary and the activities
Head of Internal Audit, thus ensuring complete independence.
The Composition of the Audit Committee as on 31 Ashad 2080 • Reviewed the findings of the NRB Inspection Team and
was as below: Statutory Auditor, and directed the management for
resolution of the issues raised
• Rino Santodiono Dono Seputro, Chairperson
• Gopi Krishna Bhandari , Member • Reviewed the status of audit issues raised in Internal Audit
• Kabir Tamrakar, Head of Internal Audit, Member Secretary Reports, Statutory Audit Report and Nepal Rastra Bank
Inspection Report
The Audit Committee meets at least once every quarter
21
• Recommended to the Bank’s Annual General Meeting The following table illustrates the number of Board Risk
through the Board for reappointment of Statutory Auditor Committee Meetings held during the FY 2079-80 and sitting
and fixing the remuneration fees paid to the members:
• Reviewed quarterly and annual financial statements,

Board Members Meeting Meeting fees
comparison of key financial indicators and adequacy of
attendance paid
loan loss provisions
Siddhant Raj Pandey, 3 NPR63,000
• Reviewed and discussed top risks, emerging risks and
Chairperson, Board Risk
themes of the country and the appropriateness of the
Committee
management action plan to mitigate these risks
Rino Santodiono Dono 3 Nil-does not
• Reviewed the Compliance Report to understand the Seputro, Director take
regulatory developments, emerging regulatory hotspots, meeting fee
regulatory breaches and state of compliance of the Bank
Sujit Shrestha, 3 Nil-does not
• Reviewed the Financial Crime Compliance Report Member take
meeting fee
• Reviewed the cases of fraud and loss to the Bank Sanjay Pant, Member 3 Nil – Does not
Secretary take
• Reviewed the Pillar 3 disclosure comprising of capital meeting fee
structure, capital adequacy, risk exposures and Risk
management function in the annual financial statements
of the Bank
Board Financial Crime Risk Committee
Board Risk Committee Financial Crime Risk is categorised as one of the main risks of
the Bank. In line with Nepal Rastra Bank’s Directive, the Bank
The ultimate responsibility for setting our risk appetite has formed a Board Level Financial Crime Risk Committee
boundaries and for the effective management of risk rests (BFCRC) chaired by an INED. Other members of the BFCRC
with the Board. Under Nepal Rastra Bank Directive on are Chief Risk Officer & Chief Compliance Officer. The
Corporate Governance, the Board has established a Board BFCRC is responsible for overseeing financial crime related
Risk Committee (BRC) with clear Terms of Reference (ToR). risks including those within the remit of Assets Laundering
The BRC is chaired by an Independent Non- Executive Director Prevention Act and NRB Unified Directives. Other governance
(INED). The Chairperson of the Audit Committee is a member, arrangements are structured as per the NRB Directives and
the Chief Operating Officer and Chief Risk Officer act as the Group’s requirements. List of members of the BFCRC are as
member /secretary. The Committee meets a minimum of four follows:
times annually. The BRC oversees and reviews the fundamental • Avinash Agrawal, Director, Coordinator
prudential risks including credit, traded, treasury, operational • Sanjay Pant, Chief Risk Officer & Chief Compliance Officer,
& technology, compliance, financial crime, reputational and Member
sustainability, and information and cyber security risk. The BRC • Netra Subedi, Head Financial Crime Compliance, Member/
receives periodic reports on risk management, including our Secretary
portfolio trends, stress testing, liquidity and capital adequacy,
and is authorised to seek and review any information relating ** Avinash Agrawal appointed as Coordinator of Board Financial Risk
Committee with effect from 30 January 2023.
to an activity within its terms of reference. The BRC’s role is to
review and advise, diving deeply into risk issues so that the
The following table illustrates the number of Board Financial
Board is well placed to perform its role as the ultimate owner
Crime Risk Committee Meetings held during the FY 2079-80
of risk appetite.
and sitting fees paid to the members:
The composition of the BRC as on 31 Ashad 2080 BS was as
below:
• Siddhant Raj Pandey, Director, Chairperson
Board Members Meeting Meeting fees
• Rino Santodiono Dono Seputro, Director, Member
attendance paid
• Sujit Shrestha, Chief Technology & Operations Officer,
Member
Avinash Agrawal, 2* NPR42,000
• Sanjay Pant, Chief Risk Officer & Chief Compliance Officer,
Chairperson, Board
Member Secretary
Financial Crime Risk
** Siddhant Raj Pandey was appointed as Coordinator of Board Risk Committee
Committee with effect from 22 September 2022
Sanjay Pant, Chief 4 Nil-does not
Risk Officer & Chief take
Compliance Officer, meeting fee
Member
Netra Subedi, Head 4 Nil – Does not
Financial Crime take
Compliance, Member meeting fee
Secretary
* The preceding Chairperson attended two meetings and NPR42,000 was
paid as meeting fees

Executive Committee (EXCO) that describe its risk management culture. The principles of
risk management followed by the Bank include:
The Executive Committee (EXCO) represented by heads of all
key businesses and functions is the apex body that manages • Balancing risks and returns
the Bank’s operations on a day-to-day basis. The EXCO meets • Conduct of business: Seeking to achieve good outcomes for
formally once a month and adhoc as and when required. clients, investors and the market in which we operate while
The CEO chairs the EXCO where strategies for the Bank are abiding by the spirit and letter of laws and regulations,
decided and monitored on a regular basis; decisions are taken and demonstrating that we are Here for Good through our
collectively by this Committee. As of the date of this report, the conduct
Bank’s core EXCO comprised of the following: • Responsibility and Accountability: Ensuring that risk taking
is disciplined and focused, particularly within area of
• Anirvan Ghosh Dastidar authority and that risk taking is transparent, controlled
Chief Executive Officer, Nepal and reported in line with the ERMF, within risk appetite
boundaries and where there is appropriate infrastructure
• Gorakh Rana and resource
Deputy Chief Executive Officer • Anticipation: Anticipating material future risks, learning
& Head - Client Coverage, Nepal lessons from events producing adverse outcomes and
ensuring awareness of known risks
• Gopi Krishna Bhandari • Competitive advantage: Achieving competitive advantage
Head - Specified Sector Lending & Company Secretary, Nepal through efficient and effective risk management and
control
• Michael Siddhi
Head - Transaction Banking, Nepal The ultimate responsibility for setting our risk appetite
boundaries and for the effective management of risk rests
• Rajan Udas with the Board. Acting within the authority delegated by
Head - Human Resources, Nepal the Board, the Board Risk Committee, chaired by an INED is
responsible for overseeing and reviewing prudential risks,
• Sanjay Pant including but not limited to credit, traded, reputational &
Chief Risk Officer & Chief Compliance Officer, Nepal sustainability, treasury, operational & technology, financial
crime, compliance, and information and cyber security risk.
• Sujit Shrestha
Chief Technology & Operations Officer, Nepal The Executive Risk Committee (ERC) is responsible for the
establishment of, and compliance with policies relating to risk.
• Sarbendra Mishra It is responsible for the management of all risks other than
Head - Financial Markets & Treasury Markets, Nepal those managed by Assets and Liabilities Committee (ALCO).
• Md. Yasir Arafin The ERC is represented by a senior management team

Chief Financial Officer, Nepal including the heads of the concerned risk management
units and chaired by the Chief Risk Officer. The Committee
• Sudhir Sharma normally meets every two months and reviews the credit
Head - Consumer, Private and Business Banking, Nepal risk, operational & technology risk, market / traded risk,
reputational & sustainability risk, conduct risk, financial
crime risk, compliance risk, country risk and information and
Risk Governance cyber security risk. The Committee also analyses the trend,
and provides a summary report to the EXCO. Its objective is
Effective Risk Management is essential to consistent and to ensure the effective management of risks throughout the
sustainable performance for all our stakeholders and is Bank in support of the Bank’s business strategy.
therefore a central part of the Bank’s financial and operational
performance. The Bank adds value to clients and therefore The ALCO is responsible for the management of capital and
the communities in which it operates, generating returns for establishment of, and compliance with, policies relating to
shareholders by taking and managing risks. balance sheet management, including management of our
liquidity, capital adequacy and structural foreign exchange
The Enterprise Risk Management Framework (ERMF) adopted and interest rate exposure.
by the Bank sets out a refreshed risk culture and clear control
framework, with sharper delineation of responsibilities The Credit Issue Committee (CIC), a sub-committee of ERC,
between the three lines of defence. ERMF sets out the principles is responsible for overseeing clients in CCIB and Business
and standards for risk management across the Bank. Through Banking (BB) segments showing signs of actual or potential
our ERMF, we manage enterprise-wide risks that are inherent weaknesses and also for monitoring of agreed remedial
in our strategy and our business model, with the objectives of actions for such clients. The CIC reviews the existing Early Alert
maximising risk-adjusted returns while remaining within our portfolio in CCIB, Stress Account Management (SAM) portfolio
risk appetite. The Bank’s key risk priorities are to strengthen in Business Banking, Watchlist/Non-Performing Loans in both
the risk culture, manage and improve information and cyber the business segments, as well as new accounts presented to
security, manage financial crime risk, strengthen our conduct the Committee. It also reviews BB Portfolio to ensure credit
environment, enhance our compliance infrastructure and issues / adverse trends in the portfolio are identified and
improve our efficiency and effectiveness. The Bank will not addressed through appropriate actions. The CIC additionally
compromise adherence to its risk appetite to pursue revenue reviews, and monitors strategies and actions being taken on
growth or higher returns. accounts within Special Assets Group portfolio. It is chaired
by the CEO and meets monthly. For retail exposures, portfolio
As part of this framework, the Bank uses a set of principles delinquency trends are monitored continuously at a detailed
23
level. Individual customer behaviour is also tracked and risk classification and assigns Subject Matter Experts (SMEs)
considered for lending decisions. as the owners for the identified risk sub-types within the
gambit of overall OR.
Accounts that are past-due are subject to a collections
process, managed independently by the Risk Function. The ERC chaired by the Country Chief Risk Officer (CCRO),
Charged-off / provisioned accounts are managed by oversees the management of operational risks across the
specialist Recovery teams. The credit risk management covers Bank. SMEs have responsibilities for setting appropriate
credit rating and measurement, credit risk assessment and policies and supporting control standards of the following
credit approval, large exposures and credit risk concentration, operational risk sub types:
credit monitoring, credit risk mitigation and portfolio analysis.
• Execution Capability (Transaction Processing, Product
The Bank’s committee governance structure ensures that risk- Mismanagement)
taking authority and risk management policies are cascaded • Operational Resilience (Client Service Disruption,
down from the Board to the appropriate functional, client Technology Risk, Change Mismanagement, People Risk)
business, senior management and committees. Information • Physical Safety and Security
regarding material risk issues and compliance with policies • Governance (Corporate Governance, Enterprise Risk
and standards is communicated through the business, Governance)
functional, senior management and committees. • Reporting and Obligations (Financial Books and Records,
Tax Risk, and Financial Regulatory Reporting)
Credit Risk • Legal Risk
Credit Risk is defined as “the potential for loss due to failure
OR management approach seeks to ensure management of
of a counterparty to meet its agreed obligations to pay the
the risk by maintaining a complete process universe defined
Bank in accordance with agreed terms”..
for all business segments, products and functions processes.
The Bank manages its credit exposures following the principle
Products and services offered to clients and customers are
of diversification across products, client segments and industry
also assessed and authorised in accordance with product
sectors. Country Portfolio Guidelines and the Credit Approval
programme guidelines. The OR governance structure is as
Documents (CAD) / Credit Processing Manuals govern the
follows:
extension of credit to CCIB and CPBB clients respectively. Each
policy provides the framework for lending to counterparties,
• It ensures consistent oversight across all levels regarding the
account management, product approvals and other product
execution and effectiveness of Operational & Technology
related guidance, credit criteria, processes and portfolio
Risk Type Framework (ORTF)
standards.
• SMEs have responsibilities for setting appropriate policies
and supporting control standards for the risk sub types
Credit Risk under CPBB and CCIB is managed through a defined
under their responsibility OR risks are identified and graded
framework which sets out policies and standards covering the
at the business/ unit level. Risks graded medium and above
measurement and management of credit risk. There is a clear
along with the treatment plan are agreed with the Process
segregation of duties between transaction originators in the
Owner, SMEs and Operational Risk Officer. These are raised
businesses and the approvers in the Risk functions. All credit
in the system and tabled in the ERC for endorsement and
exposure limits are approved within a defined Credit Approval
support for escalating to the Group. Mitigating controls
Authority framework.
are put in place and mitigation progress monitored until its
effectiveness
All Corporate and Institutional borrowers, at individual and
• The ERC ensures the effective management of OR
group level, are assigned internal credit rating that supports
throughout the business/functions in support of the Bank’s
identification and measurement of risk and integrated into
strategy and in accordance with the ERMF. The ERC assigns
overall Credit Risk analysis. Credit Grade (CG) is reviewed
ownership of required actions to be taken and monitors
periodically and amended considering changes in the
progress of risks identified, in addition to confirming the risk
borrower’s circumstances or behaviour. CG plays a central role
grading provided at the business/unit level
in the credit quality assessment and monitoring of risk.
• The ERC accepts Operational & Technology risks arising in
the country basis the Risk Assessment Matrix. All risks that
Operational & Technology Risk are above a certain threshold are reported to the ERC for
endorsement and escalated to the Group by the relevant
We define Operational & Technology Risk (OR) as “the country process owner for acceptance. The material risks
potential for loss resulting from inadequate or failed and issues are escalated timely to Regional and/or Group
internal processes, technology events, human error, or from Risk Committees
the impact of external events (including legal risks)”. • The Country Financial Crime Risk Committee (CFCRC),
a sub-committee of ERC chaired by the CEO, ensures
appropriate governance of Financial Crime Risk and
It can arise across all business lines and from any activity oversees the implementation of the Financial Crime Risk
carried out by the Bank. OR exposures are managed through Type Framework
a consistent set of management processes that drive risk
identification, assessment, control and monitoring. OR Risk
Type Framework outlines the overall risk management Traded Risk
approach for operational and technology risk for the Bank.
The framework defines how risks are managed and controlled, The Bank defines Traded Risk as “potential for loss
how OR policies and controls are assured, how effective resulting from activities undertaken by the Group in
governance is exercised, as well as the key roles required to financial markets”.
manage the underlying processes. The framework defines the

This includes Market Risk and the other Risk sub-types. Market Reputational & Sustainability Risk
Risk is defined as the potential for loss of economic value due
to adverse changes in financial market rates or prices. Risks
arising out of adverse movements in currency exchange rates Reputational & Sustainability Risk (RSR) is the “potential
and interest rates are covered under Market Risk Management. for damage to the franchise (such as loss of trust, earnings
Our exposure to Market Risk arises predominantly from or market capitalisation) because of stakeholders taking
customer driven transactions. In line with Risk Management a negative view of the Group through actual or perceived
Guidelines prescribed by NRB, the Bank focuses on exchange actions or inactions – including a failure to uphold
risk management for managing/ computing the capital responsible business conduct or lapses in our commitment
charge on Market Risk. The Bank adopts the Net Open to do no significant environmental and social harm
Position approach for reporting Market Risk. In addition to through our client and third-party relationships, or our
currency exchange rate risk, interest rate risk is assessed at a own operations”.
regular interval to strengthen Market Risk management. The
Market Risk is managed within the agreed risk tolerances and
Market Risk limits. The Bank’s Reputational & Sustainability Risk Type
Framework establishes the framework for the governance
and management of Reputational & Sustainability Risk. RSR
Treasury Risk is further managed through three risk sub-types namely, the
Stakeholder Perception, Environmental, and Social.
Treasury Risk is defined as the “potential for insufficient
capital, liquidity or funding to support our operations, the The framework aims to protect the Bank’s reputation and
risk of reductions in earnings or value from movements restrict the ability to undertake any activities that may cause
in interest rates impacting banking book items and the material damage to the Bank’s franchise. Reputational &
potential for losses from a shortfall in the Group’s pension Sustainability Risk is managed by ERC and EXCO, which are
plans”. responsible for protecting the Bank’s reputation locally and
have the responsibility to ensure that the Bank does not
undertake any activities that may cause material damage
Treasury Risk encompasses Capital Risk, Liquidity and Funding to the franchise. All employees are responsible for day-to-
Risk, Interest Rate Risk in the Banking Book, and Pension Risk. day identification and management of reputational risk. The
scope of reputational risks includes environment and social
‘Capital Risk’ is the potential for insufficient level, composition risk management, social media risk management and media
or distribution of capital, own funds and eligible liabilities to engagement risk management.
support our activities under normal environments and stressed
conditions. Information & Cyber Security (ICS) Risk
‘Liquidity and Funding Risk’ is the risk that we may not have
sufficient stable or diverse sources of funding to meet our Information & Cyber Security Risk is “the risk to the Group’s
contractual and contingent obligations as they fall due. assets, operations and individuals due to the potential
for unauthorised access, use, disclosure, disruption,
‘Interest Rate Risk in the Banking Book’ is the potential for a modification, or destruction of information assets and/or
reduction in earnings or economic value due to movements in information systems”.
interest rates on banking book (non- traded) assets, liabilities
and off-balance sheet items.
This may lead to adverse customer and reputational impacts,
‘Pension Risk’ is the potential for loss due to having to meet regulatory censure, financial loss, litigation and/or the
an actuarially assessed shortfall in the Group’s pension plans. potential for the Group to fail; affecting financial markets
Pension obligation risk to a firm arises from its contractual or and the wider economy. The Bank seeks to avoid risk and
other liabilities to or with respect to an occupational pension uncertainty for our critical information assets and systems,
plan, or other long term benefit obligation. For a funded plan and has low appetite for material incidents affecting these
it represents the risk that additional contributions will need to or the wider operations and reputation of the Bank. The ICS
be made because of a future shortfall in the funding of the Risk Type Framework adopted by the Bank outlines the overall
plan or, for unfunded obligations, it represents the risk that approach for managing the ICS risks in the Bank and seeks
the cost of meeting future benefit payments is greater than to introduce operational structure for the identification and
currently anticipated. mitigation of ICS risks. The Bank allocates responsibilities for
the management of ICS risk in a manner consistent with the
The Bank maintains a strong capital position sufficient to Three Lines of Defense Model. ICS risks are further managed
support its strategic aims. Capital adequacy ratio of the Bank through its three risks sub-types, namely Financial Loss by
is within the regulatory requirements at all times. The Treasury External Attacker and/or Trusted Insider, Disclosure of Sensitive
Risk Framework governs liquidity risk and is managed by Information by External Attacker and/or Trusted Insider, and
ALCO. In accordance with that policy, the Bank maintains a Disruption of Business Operations by External Attacker and/
liquid portfolio of marketable securities as a liquidity buffer. or Trusted Insider.
The net liquid assets to total deposits ratio is within the
mandated regulatory requirements.
25
Internal Control System pre-defined levels when they are impacted by disasters, be it
man made or natural. The BCP plan is tested once in a year.
The Bank is committed to managing risks and in controlling
its business and financial activities in a manner which enables
it to maximise profitable business opportunities, avoid or
Relations with shareholders
reduce risks which can cause loss or reputational damage, The Bank recognises the importance of good communication
ensure compliance with applicable laws and regulations, with all the shareholders. There is regular information,
and enhance resilience to external events. To achieve this, the financials as well as non-financial reports, published by the
Board has adopted the Standard Chartered Group policies company for the shareholders’ information. The Annual
and procedures of risk identification, risk evaluation, risk General Meeting is used as an opportunity to communicate
mitigation and control / monitoring, besides implementation with all the shareholders.
of the local regulations / Nepal Rastra Bank directives. The
effectiveness of the Bank’s internal control system is reviewed Climate Related Financial Disclosures
regularly by the Board, its Committees, Management and
Internal Audit. The Audit Committee has reviewed the We are leveraging our unique footprint across Asia, Africa and
effectiveness of the Bank’s system of internal control during the the Middle East to positively impact environmental outcomes
year, and provided feedback to the Board as appropriate. The through our financing decisions. We see enabling a just
Internal Audit monitors compliance with policies/ standards transition in these regions as our mission, as we collectively
and the effectiveness of internal control structures across work towards a global net-zero economy. Climate change
the Bank through its programme of business/unit audits. The and its associated risks, opportunities and organisational
Internal Audit function is focused on the areas of greatest implications are overseen by Standard Chartered Group’s (the
risk as determined by a risk-based assessment methodology. Group) Board, Management Team and multiple supporting
Internal Audit reports are forwarded periodically to the Audit sub-committees. In 2021, the Group announced our net-
Committee. The findings of all audits are reported to the zero roadmap setting out plans to cut financed emissions,
CEO and Business Heads for initiating immediate corrective mobilise capital, and accelerate climate solutions to reach
measures. net zero by 2050. This roadmap was informed by the Science
Based Target initiative (SBTi) and the Net Zero Banking
Capital Management Alliance (NZBA), and we have set out our approach in a
detailed white paper in the hope that this will help others
and contribute to collective progress. Globally, we have a
The capital management approach of the Bank is guided
plan to mobilise USD300Bn in green and transition financing
by Standard Chartered Group’s Capital Management
by 2030, to help our clients set and reach net-zero targets.
policy which sets minimum standards for Capital
We are also clear that where clients do not show a sufficient
Management and is linked to the Treasury Risk Type
level of commitment to the transition, we intend to reduce or
Framework.
eliminate the financial services we provide. We will continue to
play our part in reducing the most harmful activities, seeking
A sound Capital Management Framework is at the very core
to reduce absolute financed thermal coal mining emissions by
of the overall performance landscape to ensure that the Bank
85 percent by 2030 alongside our long-standing commitment
delivers on its objective of maximising shareholders’ value.
to not provide any direct financing to coal-power projects.
While focussing on our financed emissions, we have continued
At all times, the Bank aims to maintain a strong capital
to support this with action in areas where we have greatest
position, including the maintenance of management buffers
control. We have accelerated our approach to net zero in our
sufficient to support its strategic aims.
operations and we are on track to achieve this in 2025, five
years ahead of our original plans. As we continue to reduce our
The Bank maintains internal capital targets taking into
emissions, we are compensating for those that remain with a
consideration regulatory minimum capital requirements
mixture of high-quality carbon credits. We have made great
(inclusive of any regulatory buffers), and anticipated changes
progress but a lot more remains to be done across various
to those requirements. The establishment of Capital Risk
footprints. We look forward to working in partnership with all
Appetite is the formal embodiment of these internal targets.
our stakeholders to lead the way and safeguard our shared
The Bank manages its capital levels to reflect forecasted
future.
organic growth and return expectations. As part of capital
management process, an updated capital forecast is
presented to the ALCO on a regular basis.
Group Code of Conduct summary
In addition to these metrics, the Bank maintains a Recovery As a global bank, we have the privilege, opportunity and
responsibility to be a force for good in the markets in which
Plan which includes a broad set of recovery indicators, an
we operate. In an environment where the conduct of banking
escalation framework and a set of management actions that
can be effectively implemented in the event of a liquidity and is under increasing scrutiny, our ethical standards must be
funding stress. The plan is reviewed on an annual basis. beyond reproach. We need to understand and follow both the
letter and the spirit of the law, play a robust role in the fight
against financial crime, and be mindful of the reputational
Crisis Management consequences of our actions. The Standard Chartered Group
The Bank has a Crisis Management Plan and a Country Crisis has a Group Code of Conduct (GCOC) in place to reflect our
Management Team to manage and resolve crises effectively Valued Behaviours, conduct principles and human lens.
which may affect the operations of the Bank. In addition to
this, the Bank has a Business Continuity Plan (BCP) to maintain, Our success will be measured by our ability to achieve good
manage and restore department critical business functions to outcomes for all our stakeholders - clients, investors, regulators,
markets, colleagues and the communities that we serve. Living

the GCOC is one way in which we can take a step towards and managing conflicts of interest that arise in daily working
achieving these outcomes. The GCOC has been developed to life. This includes actual conflicts and anything which could be
help all of us live our values and deliver our brand promise in seen as a conflict.
everything we do. The Code is supplemented with resources
that will support the Bank’s staff to navigate through tough Do not engage in or support insider dealing
and unfamiliar situations, if at all. The GCOC is embedded We have access to privileged information and must protect
in how we do business, so all staff members need to know, it. The misuse of inside information undermines the entire
understand and commit to it annually. Our Purpose, values financial system and unfairly disadvantages others in the
and our brand promise are central to the way we work. The market.
Code is important because it outlines how we can make sure
that the decisions we make are the right ones. Fight financial crime
Summary of GCOC It is critically important to protect the global financial system.
We must comply with laws, regulations and Group standards
Use good judgement: We recognise that we may face complex on anti-money laundering (including those on tax evasion),
situations which don’t have simple, clear-cut solutions. We use preventing financing for terrorism, fraud or sanctions.
the Code’s decision-making framework to help make decisions
well, appropriately and with care.
Reject bribery and corruption
Act responsibly and within your authority Bribery is illegal, dishonest and damages the communities
where it takes place. We do not give or accept bribes nor take
We must be disciplined, responsible and take accountability
part in any form of corruption.
for the risks we take. When we take risks, they must be within
our delegated authority and must be appropriate to the
business area or activity.
Respect our communities and the
environment
Comply with laws, regulations and Group The communities where we operate are extremely important
standards to our business. Let’s ensure we help them thrive by contributing
to the economic stability in our markets, reducing our effect
We must comply with laws, regulations and our Group on the environment, and giving back to our communities
standards, as well as the spirit in which they are intended. wherever we can.
Each of us has a personal responsibility to do this.
Treat colleagues fairly and with respect
Be open and honest with regulators - give We pledge to provide a safe working environment which is
them your full co-operation inclusive and free from discrimination, exploitation, bullying
and harassment. We hold the key to maintaining this positive
We must deal with regulators / government officials in a environment, which is a central part of our ultimate success.
responsive, open, timely and co-operative manner and We treat our colleagues fairly and work together to deliver our
disclose appropriately matters which they would reasonably brand promise. We are all in this together.
expect notice of.
Speaking Up
Ensure fair outcomes for clients We have a responsibility to Speak Up when we see anything
that we are not comfortable with at work. This could be poor
We must always do our best to deliver fair outcomes to clients.
behaviour, or a process or system that isn’t working well.
Our clients are at the heart of everything that we do and we
are committed to providing clear and honest advice to them,
and to making sure that the financial products we offer are
right for them. Never
Protect confidential information settle
Building trust is an integral part of all the relationships we have
with our clients. They rely on us to keep information safe. We
must not release confidential information unless authorised to
do so.
Valued
Compete fairly in the marketplace Behaviours Do
We must understand and comply with competition laws which
the
affect how we compete both locally and internationally. right
Better thing
Manage conflicts of interest:
together
It is important not to put us in a position where our judgement
could be affected. We are responsible for identifying, assessing
27
ªAdditional Informationº
As required by section 109 of the Company Act, 2006
Unaudited first quarter result of financial year 2023-24 (local FY 2080-2081) is as follows:
Key Parameters Amount in NPR'000
Gross Loans and Advances* 95,165,597
Deposits 124,051,932
Total Operating Income 1,773,751
Operating Profit 1,188,883
Profit before tax 1,182,428
Net Profit 827,700

*Loans and advances as per NFRS before provision
A review of the business during the previous year: Main transactions carried out by the company and its
Please refer to ‘Report of the Board of Directors’ enclosed subsidiary company during the financial year and any
along with this report. important change in the transaction of the company during
the period:
Impact caused on the transactions of the Company, if any, The Bank does not have a subsidiary company and there is
from National and International Situation: no significant change in the business of the company during
Please refer to ‘Report of the Board of Directors’. the period.
Industrial or Professional Relations of the Company: Information furnished to the company by its substantial
The Company maintains a good professional relationship shareholders during the previous financial year:
with its customers, people and regulators. Senior managers There are no substantial shareholders in the Bank as no
of the Company represent at a number of committees and shareholder, except the Standard Chartered Group, holds
sub-committees of regulator, professional organisations, more than 1 percent of the paid-up capital of the Company.
associations, and forums. The Company is a member of No such information has been received from the Standard
the Nepal Bankers’ Association, Federation of Nepalese Chartered Group in this regard.
Chamber of Commerce & Industry, Confederation of Nepalese
Industries, Nepal Britain Chamber of Commerce & Industry, Particulars of the ownership of shares taken up by the Directors
Nepal India Chamber of Commerce & Industry, Independent and office-bearers of the company during the previous
Power Producers’ Association Nepal and Nepal Institute of financial year, and information received by the company from
Company Secretaries. them about their involvement, if any, in the transactions of the
shares of the company:
Changes made in the Board of Directors, and reasons Directors and office-bearers have not been involved in the
therefore: share transactions of the Bank in FY 2079-80 as per the
Please refer to ‘Report of the Board of Directors’. declaration provided by them to the Bank.
Main factors affecting the business: Particulars of information furnished by any Director or any of
Please refer to ‘Report of the Board of Directors’. his/her close relatives about his/her personal interest in any
agreement connected with the company signed during the
Board of Director’s Reaction to Remarks made, if any, in the previous financial year:
Audit Report: No such information has been received by the Bank.
There are no adverse remarks in the Audit Report.
Purchase of own Shares:
The amount recommended for distribution as dividend: The Bank has not purchased its own shares in the year under
The Board has recommended paying NPR1,791,596,240/- as review.
cash dividend inclusive of tax for the FY 2079-80.
Whether or not there is an internal control system, and if there
Forfeited Shares: is any such system, details there of :
There are no shares forfeited during the financial year. Please refer to section on ‘Our Approach to Corporate
Governance’.
Progress of transaction between the Bank and its Subsidiary
Company and review of status as of the financial year end:
The Bank does not have a subsidiary company.

Additional Information
Particulars of the total management expenses of the Details of sale and purchase of properties pursuant to Section
previous financial year: 141:
The management expense of the financial year is None.
NPR2,272,600,686 (total of Staff Expenses includes staff bonus,
Other Operating Expenses and Depreciation & Amortisation Details of transactions carried on between the associated
as per Schedule 4.36, 4.37 and 4.38 of the Financial Statements). companies pursuant to Section 175:
General Banking transactions.
A list of members of the Audit Committee, remunerations,
allowances and facilities being received by them, particulars Any other matters required to be set out in the report of board
of functions discharged by the Committee, and particulars of of directors under this Act and the prevailing law:
suggestions, if any, provided by the Committee: None.
Please refer to chapter on ‘Our Approach to Corporate
Governance’. Other necessary matters:
None.
Payments due, if any, to the company from any Director,
Managing Director, Executive Chief or basic shareholder of
the company or any of their close relatives, or from any firm,
company or corporate body in which he/she is involved:
Additional Information
Nil.
Amount of remuneration, allowances and facilities paid

to the Director, Managing Director, Chief Executive and
officer-bearers:
The details of payment made to the Directors has been
mentioned under ‘Our Approach to Corporate Governance’.
Salary, allowance and bonus paid to the CEO was
NPR36,813,709/- (excluding tax) during FY 2022-23 (2079/80
BS).
Other staff are paid the salary, allowance and benefits as per
the decision of the Board following Staff Services By-laws of
the Bank.
Amount of dividends remaining unclaimed by the shareholders:

Such outstanding dividend amount was NPR162,768,283.27 as
at Ashadh end 2080.
29
ªBoard of Directorsº
Zarin Daruwala Zarin Daruwala has been the Chief Executive Officer of
Chairperson Standard Chartered Bank, India since 2016 and currently serves
as Cluster CEO, India & South Asia Markets (Bangladesh,
Nepal and Sri Lanka). In a career spanning over 32 years
she has worked across all areas of banking ranging from
wholesale banking, agri-finance, corporate finance, corporate
planning, investment banking and credit. Prior to Standard
Chartered, Zarin worked at ICICI Bank India, where she spent
26 years of her career, starting out as a management trainee,
eventually becoming President and Head of the Wholesale
Banking business. She has served on the Board of Directors of
key ICICI group companies, ICICI Lombard General Insurance
and ICICI Securities, and was also on the board of JSW Steel
India for almost eight years. She has also been recognised for
‘Outstanding Contribution towards Banking and Financial
Services’ for 2017-18 by Ladies’ wing of IMC Chamber of
Commerce and Industry. Zarin features in the ‘Top 100 Most
Influential BFSI Leaders’ released by the World BFSI Congress
and Awards. A rank holder in Chartered Accountancy, Zarin
has also won the President’s gold medal, topping the All India
Company Secretary exams. She has also been conferred the
CA Business Achiever award by the Institute of Chartered
Accountants of India.
Rino Santodiono In a global career spanning 25 years with Standard Chartered,

Rino Santodiono has held diverse roles across businesses and
Dono Seputro functions in 7 countries – Indonesia, United Kingdom, United
Director Arab Emirates, Singapore, Brunei Darussalam, Chile and
Falkland Islands. Currently serving as the Vice Chairperson
for the ASEAN region, Rino Santodiono is responsible for
driving execution of the Standard Chartered Bank’s strategy
and providing governance oversight across all ten ASEAN
countries. Prior to this, he held the role of CEO for Standard
Chartered Bank Indonesia from 2016 to 2019.
As Project Director for the Bank’s Group M&A in London, he led

Standard Chartered’s successful acquisition of Permata Bank
in Indonesia and American Express Bank in the US.
Rino Santodiono spent four years from 2010 as the Bank’s

Regional Head of Internal Audit for Asia based in Singapore.
Prior to CEO Indonesia, Rino Santodiono has also held the role
of CEO for Standard Chartered Bank in the Falkland Islands
and Brunei Darussalam.
In addition to his current role, Rino Santodiono is the President

Commissioner for Standard Chartered Bank Indonesia and
the Bank’s Sustainable Finance champion in Asia. He is also
the Bank’s representative for the World Economic Forum’s
ASEAN Regional Action Group. He is also the Chairperson of
the British Chamber of Commerce Indonesia.

Board of Directors
Siddhant Raj Pandey Siddhant Raj Pandey is the Independent Director in the Bank’s
Independent Director Board effective from 1 September 2022. He holds a MSc
Degree in Development Economics from University of Bristol,
UK. He is the Chairperson/CEO of the company, Business
Oxygen Pvt Ltd, which is a PE Fund with a climate focus. He
is also the Non-Executive Chairperson of Nepal Agriculture
Business Incubation Centre, a non-profit company set up by
the Ministry of Agriculture and the World Bank. Previously, he
was the Chief Executive Officer of Ace Development Bank
Limited, Nepal for eight years. He has also served as a Member
of the Board of Directors at the Investment Committee of the
Central Renewable Energy Fund (CREF) and as Chairperson of
the Board of Credit Information Bureau Ltd (CIB), Nepal.
He has more than 30 years of experience in the banking and

financial sector in Nepal.
Board of Directors
Avinash Agrawal Avinash Agrawal was appointed to the Board as a Non-
Public Director Executive Director with effect from 11 December 2022
representing the general public shareholders. Agrawal had
also served as Non-Executive / Public Director in the Board of
SCB Nepal for a period of 6 months in 2018. He also chairs
the Board Financial Crime Risk Committee of SCB Nepal.
He possesses substantial experience as an investor in the
Nepalese market. Agrawal has secured his MBA degree from
Cardiff Business School of Cardiff University, UK.
Anirvan Ghosh Dastidar With 31 years of work experience as a banker, Anirvan has
CEO & Executive Director held various senior positions during his career with Standard
Chartered Bank. He had earlier assumed the role of CEO Sri
Lanka, Philippines and Brunei Darussalam. Dastidar started
his career with ANZ Grindlays Bank in India.
He holds a Degree in Commerce and has undertaken

corporate management courses from the Said Business
School, University of Oxford and INSEAD.
31
ªManagement Teamº

33
Schedule- 15
ªSchedule- 15º
Related to Sub Rule (2) of Rule 26 of Securities Registration and Issuance Regulation, 2073
1. Report of Board of Directors:

Covered in the ‘Report of the Board of Directors’.
2. Report of Auditor:
Included in the Annual Report.
3. Audited Financial Detail:

Balance Sheet, Profit or Loss, Cash Flow details and related schedules included.
4. Detail relating to Legal Actions:
Schedule- 15
(a) If any case filed by or against Organised Institution during the quarterly period: Except in the regular course of business, there
are no law suits of material nature filed by the Bank or against the Bank.
(b) Case relating to disobedience of prevailing law or commission of criminal offence filed by or against the Promoter or Director
of Organised Institution: No such information has been received.
(c) Any case relating to commission of financial crime filed against any Promoter or Director: No such information has been
received.
5. Analysis of share transaction and progress of Organised Institution:

a. Management’s view on share transaction that happened at Securities Market: Price and transactions of the Bank’s shares are
being determined by the open share market operations through a duly established Stock Exchange. Management’s view on
this is neutral.
b. Maximum, minimum and last share price of Organised Institution including total transacted number of shares and transacted
day during each quarter of last FY 2079-80:
Quarterly Update Maximum Share Minimum Share Last Share Price Total Transacted Total Transacted
Price Price Shares Days
Ashwin end NPR512 NPR387 NPR410 1,146,425 65
Poush end NPR489 NPR392 NPR463 715,081 52
Chaitra end NPR555 NPR447 NPR525 2,297,082 56
Ashadh end NPR572 NPR499 NPR530 2,004,383 62
6. Problem and Challenges:

INTERNAL
i. Maximising operational efficiency.
ii. Improve Non-Interest Income (NII).
EXTERNAL
i. Subdued credit demand and deteriorating asset quality in the industry.
ii. Change in regulatory landscape.
STRATEGY
i. Prudent management of balance sheet momentum and diversifying funding sources.
ii. Expand and refresh branch distribution plan.
iii. Continue to enhance and innovate products and services, introduce new digital offerings.
iv. Drive digitisation to improve efficiency.
v. Drive key partnerships, collaborations through local partners.
vi. Continue to build an inclusive culture and provide a platform for development opportunities for all colleagues.
7. Corporate Governance:
Incorporated in detail under ‘Our approach to Corporate Governance’ chapter in this annual report.
35
Summary of Annual Compliance Report Relating to the Corporate Governance
for the FY 2079-80 (2022-23)
Issued by Securities Board of Nepal (SEBON)
1. Details as to the Board of Chairperson
a) Name and date of appointment of Chairperson of the Board of Directors:

Chairperson: Zarin Daruwala Date of Appointment: 09/01/2021
b) Details as to the share structure of the company (Promoter, General People and Others):
Promoter: 70.21% General Public: 29.79%
c) Details as to the Board of Directors:
Date of Methods
taking Oath (Procedures) of
Name and Address of Representative Number of Date of of Office and Appointments of
S.N. Directors Group Shares Appointment Confidentiality Directors
1. Zarin Daruwala, SCB India SCB UK 22,068,169.35 09/01/2021 09/01/2021 Appointed from
units Promoter Group
2. Rino Santodiono Dono SC Grindlays 44,136,338.69 04/09/2022 04/09/2022 Appointed from
Seputro, SCB Indonesia Australia units Promoter Group
Pty Limited,
Promoter
3. Anirvan Ghosh Dastidar, SCB SC Grindlays 21/01/2019 21/01/2019 Appointed from
Nepal Australia Promoter Group
Pty Limited,
Promoter
4. Siddhanth Raj Pandey, Independent 04/05/2018 04/05/2018 Appointed
Kathmandu Director as per legal
requirement
5. Avinash Agrawal, Kathmandu Representing 660,836.85 11/12/2022 11/12/2022 Elected
General public units by public
shareholders
from 36th AGM
d) Details of the matter, if the meeting of the Board of Directors has been postponed due to insufficient quorum:
None
e) Other details relating to the Meeting of the Board of Directors:
Presence/absence of Director or alternate Director in meeting of the Board Directors attend the scheduled meetings and there is no alternative
of Directors (state the reason and date of board meeting for not attending) Director in the Board
Maintenance or non-maintenance of a separate record of minute of the

meeting including names of Directors showing presence in the meeting, Maintained
discussed agendas
Difference of maximum time period of conducting two subsequent meetings

of the Board of Directors 48 Days
Date of the annual general meetings of the Board of Directors as to the

determination of meeting allowance 29th AGM held on 03/06/2016
Amount per meeting of the Board of Directors

Chairperson : NPR22,500/- Directors : NPR21,000/-
(Standard Chartered Group appointed Directors do not take meeting
Total expense in amount of the meeting of the Board of Directors for the FY fee)
2022-23 (2079-80)
NPR588,000/-
2. Details as to Risk Management of the Company and Internal Control System

a) Formation or non-formation of any committee for risk management, if not formed then reasons for non-formation:
Various risk management committees have been formed in the Bank which include Board Risk Committee, Board Financial Crime
Committee, Executive Risk Committee, Assets & Liabilities Committee, Credit Issue Committee and Financial Crime Risk Committee.
b) Information relating to the risk management committee, number of meetings and functions of the committee:

Schedule- 15
S.No. Name of Committee Coordinator and Members Numbers of Functions of the

Meetings Committee
1. Board Risk Coordinator: Siddhant Raj Pandey Min. 4 times Oversight and
Committee a year review of
(Independent Non-Executive Director) various risks
Members: including
Credit, Operational
a) Rino Santodiono Dono Seputro (Non-Executive &
Director/Coordinator-Audit Committee) Technology, Traded,
Treasury,
b) Sujit Shrestha (Chief Technology & Operations Compliance,
Officer) Information and
c) Sanjay Pant (Chief Risk Officer & Chief Compliance Cyber
Officer) - Member Secretary Security (ICS) etc.
3. Details as to the accounts and audit of the company

a) Details as to Accounts
Confirmation of the matters, if the financial statement of the Company of the latest FY Prepared as per NFRS
Schedule- 15
has been prepared/ not prepared as per NFRS, reasons for not preparing:
Date of approval of the latest financial statement by the Board of Directors as of FY 30/10/2023
2079-80:
Date of publication of Quarterly financial statement as of FY 2079-80: Q1: 24/10/2022
Q2: 21/01/2023
Q3: 20/04/2023
Q4: 06/08/2023
Date of completion of latest audit as of FY 2079-80: 30/10/2023
Date of approval of financial statement from the general meeting as of FY 2078-79 11/12/2022
(2021-22):
Details as to the internal audit of the bank:
a) Confirmation of matters whether auditing is done internally or through the external a) Done Internally from Internal
appointed expert Audit Department
b) Details, if auditing is through the externally appointed expert b) NA
c) Time period for conducting internal audit (Quarterly or Half Yearly) c) As per Audit Plan approved by
Internal Audit Department
b) Details as to the Audit Committee (AC)

Name, Designation and Qualification of Coordinator and Members:
S.N. Name Designation Qualification

1. Rino Santodiono Dono Seputro Coordinator MBA
2. Gopi K Bhandari Member MBA
3. Kabir Tamrakar Country Head of Audit/ Member Secretary MBA
With effect from 14 March 2023, Gopi K. Bhandari has been appointed as a member of Audit Committee.
Date of meeting and number of members showing presence:
S.N. Meeting Dates FY 2022-23
1. 26/07/ 2022
2. 03/08/2022
3. 29/08/2022
4. 23/10/2022
5. 01/11/2022
6. 11/12/2022
7. 31/03/2023
8. 28/06/2023
All AC members were present in these meetings

None of the Coordinator, Member and the Member Secretary take meeting fees.
Date of submission of report to the Board of Directors The committee has been regularly reporting to the Board
by the Audit Committee regarding the functions
performed:
37
ªLeading the way in Digitalº
The rise of digital banking capabilities has revolutionised the processes by providing clients with customised payer details.
face of financial services globally, and Nepal too has seen a S2B is fully integrated with Nepal Clearing House Limited &
rapid transformation in this space. With these developments, RTGS network and enabled to provide seamless and straight-
customer expectations are also changing. To meet these through payment processing via Inter-bank Payment System
demands and stay ahead of the curve, we are continually (IPS), Connect IPS (CIPS) and RTGS.
enhancing our digital banking value proposition with new
capabilities. We are the only bank with our proprietary channel integrated
for Tax & SSF payments where our clients can now make these
Our digital value proposition is delivered through two verticals payments without having to use third party platforms.
- CPBB (Retail clients) and CCIB (Corporate & Institutional
Banking clients and Business Banking clients). For our retail
customers, Online Banking and SC Mobile app are our digital
delivery platforms, while our award-winning digital platform
Straight2Bank (S2B) is the choice of our digital delivery
platform for our Corporate & Business Banking customers. Our
digital value proposition in these two segments is aligned with
the Group’s product offerings.
Michael Siddhi, Head of Transaction Banking, in conversation

with News24, on the Bank’s digital strategy
We are the only bank in the country with our own proprietary
channel integrated with government payments.
This end-to-end integration of our payment systems with

the national payment switches will provide our Corporate
Clients more efficiency, better liquidity and risk management
through our enhanced payment capabilities. S2B trade allows
our Corporate Clients to initiate trade transactions online like
Letter of Credits / Guarantee issuance, amendments, request
for finance, check trade outstanding etc. Through the same
Session for branch colleagues on our digital offerings platform, the Bank can advise clients of receipt of trade
documents, advise discrepancies, notification of documentary
collection etc. This enhanced connectivity not only helps
clients to process transactions from the comfort of their office
Best-in-class platforms for Corporate and home, but also helps in reducing cost, improving controls,
Clients adding scalability, driving productivity and better liquidity and
risk management.
We take pride in stating that our digital value proposition for
our Corporate Clients is unique in the industry. Our award- To create the best digital experience for clients and make
winning Straight2Bank (S2B) platform offers various levels of it easy to bank with us, we have introduced Digital Trade
connectivity and is a one-stop-solution for our clients’ cash Counter (DTC) and Trade Track-It which is an alternative to
management and trade services requirements. We have digital workflow over the legacy over the counter submission
integrated S2B with Real Time Gross Settlement (RTGS) and tracking of trade documents. DTC & Trade Track-It was
system and enabled the payments for ConnectIPS, Tax and designed for our corporate clients who are less technologically
Social Security without the need for third party platforms. inclined to use S2B Trade. DTC enables clients to scan and
upload their trade application forms and documents digitally
Our digital value proposition is designed to provide efficiency anywhere from the convenience of their office or home,
to treasury functions by taking banking capabilities into our without the need to submit the request over-the-counter or
clients’ ecosystem. S2B offers various levels of connectivity to via fax, email, or couriers.
our clients viz. S2B Web, S2B Access, SWIFT for corporates,
Application Programming Interface (API) Banking, etc. S2B We will continue to invest in the digitisation agenda which
Web is our web-based transaction banking system that remains at the heart of our Bank’s strength, network, and value
facilitates efficient and effective connectivity to the Bank proposition. We are also exploring advanced capabilities
to provide a range of solutions across cash management including S2BPay – ecommerce collection solutions, API based
and trade finance. S2B Access offers advanced host-to-host solutions, and exploring the possibility of a Distributed Ledger
connectivity with the client’s Enterprise Resource Planning Technology (DLT) for processing trade transactions. The Bank
(ERP) system that allows direct connectivity with the Bank’s has also launched Application Programming Interface (API)
system. Banking which is expected to accelerate digital transformation
of clients. API banking can provide real time debit credit
S2B offers various kinds of cash and trade reports, including notification, push payments, provide bank statements which
multi-banking reports like MT940 (bank statements in organisations can consume to update their records and
swift standard format). Coupled with our Virtual Account do auto-reconciliations. Similarly, we are also exploring use
solution, our collection reports can enhance the reconciliation cases of distributed ledger technology (Blockchain) which
will provide customers with additional alternative banking

Digital Update
channel which will streamline operations, enhance security To provide our clients with additional collection solutions,
and provide efficiency. Similarly, we have added new features we have enabled QR based collection by integrating with
in our S2B Trade like digital trade counter and Trade Track-It to NepalPay QR and rolled out Direct Debit (Request To Pay)
provide clients the ease of banking services. through Nepal Clearing House Ltd. We are the first commercial
bank in the country to rollout Request To Pay which is enabled
We are the first bank in Nepal to offer proprietary API banking for an insurance customer to collect the insurance premium.
which is going to fundamentally change how its clients
consume banking services. API banking is going to be the In the year 2024, we will be introducing S2BPay – ecommerce
future of banking channels and SCBNL is at the forefront of collection solutions and Distributed Ledger Technology (DLT)
leading this digital initiative in Nepal. for processing trade transactions. DLT (Blockchain) is touted
as the future platform, and we have already socialised the use
APIs are still evolving in Nepal, and are mostly used by high of this platform with the regulators. Last year, we arranged an
end, technologically advanced clients only. Our APIs will offer orientation session for the officials from Nepal Rastra Bank
a differentiated customer experience to Corporate Treasury on the use of Blockchain for Trade Finance by Contour, which
and provide improved visibility, better risk management, cost is a global leader for providing blockchain platform in Trade
reduction, increased efficiency by integrating our APIs to the finance. Similarly, the Bank will continue to partner with various
client’s ERP. There are opportunities to introduce more banking Fintechs to provide better solutions to our clients without
APIs like Corporate Financial Market and Trade initiation APIs compromising on our controls, security, and standards.
Digital Update
which we are currently studying. Some of our top corporate
clients are already availing our API services for collections and Digital assets
reporting activities which is helping us garner stickiness in
client relationships and increased business opportunities and
revenues in the future. Digital assets are an important aspect of the future of financial
services, and we will explore opportunities in this space within
While the Bank has around 100+ API capabilities available the limits of the regulatory landscape. We are well-positioned
globally, we currently offer the below off-the-shelf API as a connector between traditional finance and the emerging
capabilities: digital assets opportunities for our clients and we believe we
• Debit credit notification APIs have a strategic role to play in facilitating the ‘new economy’
• Real-time balance enquiry APIs and the next era of Web 3.0 through the thoughtful adoption
• Move Money APIs of digital assets. In line with this strategy, we will continue
• MT 940 reporting APIs to engage with the regulators on the development and
implementation of Central Bank Digital Currency (CBDC).
Using these API capabilities, our clients can get real-time
bank balances, debit / credit notification, and MT940 bank Capturing digital economy flows
statements are directly dropped to the clients’ ERP system. Our
clients can also request domestic bank payments through IPS Financial Technology and New Payment Methods (FinTech/
or RTGS or CIPS using Move Money APIs. If market and clients NPM) is a rapidly evolving sector, fuelled by the growth in
demand, we can explore introducing advance APIs that suits popularity of mobile devices, mobile apps and online products
their requirements. that can be accessed anywhere at any time. FinTech/NPM
offers alternative methods (i.e., non-traditional) for local
Our digital value proposition is designed to provide efficiency and/or cross-border payments or storage of monetary value,
to our clients’ treasury functions by taking banking functions offers customers greater accessibility, convenience and speed.
into the clients’ ecosystem. To support the specialised Our strategy aims to capitalise on rapid advances in mobile
requirement of Corporate Treasury, we have a Virtual Account communications and digital payment systems to expand the
for collection which is integrated with IPS / CIPS / RTGS. availability of affordable and reliable financial tools that serve
We offer MT940 statement and API solutions which can be the needs of the communities we operate in. In line with this,
consumed by clients for auto-reconciliations and enhancing we are engaging with a number of global players in the area
treasury functions. H2H and API connectivity will enable our of cross border inwards & cross border outward payments. On
clients to process payments using their own ERP system. To the other hand, this sector introduces an increased financial
meet our clients’ requirements, we offer bespoke solutions for crime risk by creating new opportunities for criminals to misuse
payable and receivables reconciliations that are scalable and such alternative payment methods for the purposes of money
efficient. laundering and terrorist financing. In this backdrop, we will
explore opportunities and growth in this sector only after
enhanced client due diligence, process and governance to
ensure that unique risks presented are adequately identified,
In partnership with Contour, we arranged a Blockchain knowledge sharing session for Nepal Rastra Bank
39
assessed and mitigated by following the Bank’s Financial • ‘Think client’ in every solution:
Crime Compliance guidelines. • AI to enhance client experience and bespoke products /
services
• APIs to develop partnership and deepen financial
inclusion
Correspondent Banking (CB) Academy sessions held in Kathmandu
These innovative value propositions are a testament of the

Bank’s strength, our network, digital value proposition and risk
management framework.
Initiative led by the Bank’s ‘Digital Influencers’ to test our colleagues’
knowledge of Online Banking and SC Mobile App
Our Retail (CPBB) offerings
The upgraded SC Mobile App and Online Banking boast of an
The Bank is focused on offering its customers a seamless digital array of exciting features, including:
banking experience and has made significant investments in
technology and innovation for the advancement of its digital
1. Apply for various products
platforms.
2. Fund Transfers and payments services:
We rolled out SC Mobile App 2.0, the wrapped version of
• SC transfers (within SCB account to third party)
Online Banking which was upgraded in 2020. The offering
• Local bank fund transfer through IPS
was relaunched with a gamut of added features i.e fresh
• ConnectIPS (Instant local bank fund transfers)
look with a running video screen with special effects, push
with connectIPS linking feature
notification capabilities, option to apply for products straight
• Standing Instruction Set up
from the login screen etc and with availability of multiple
• Bill Payments and wallet top up
service journeys.
• Credit Card Bill payments/Standing instruction
• QR payments in NepalPay and Smart Pay
Enablement of fast payments through SCPay: The Bank’s
accepted merchant outlets
flagship global payments platform and cloud-based solution
are key milestones in our digital transformation journey. The
3. Help & Services:
integration of SCPay with connectIPS has digitised payment
• Personal information update
processes, thus enabling instant outward/inward fast fund
• Signature update
transfers and real-time credit card payments. The unique
• Online Cheque book request
feature of linking SCB account in connectIPS through SCB online
• Statement request (CASA and Cards)
channels has further enabled the use of wide array of services
• Open Fixed Deposit/Renewal of Fixed Deposit
through connectIPS portal itself. The recent addition of QR
• Fixed Deposit confirmation advice
payment capability through our SC Mobile App has enabled
• Debit/Credit/Prepaid Card activation and PIN
our clients to use scan and pay feature on over 650 NepalPay
Change
and Smart Pay accepted merchant outlets. Furthermore, as
• Debit/Credit/Prepaid Card block and
part of our continuous endeavour to review existing offerings,
replacements
there is a recent change in our online channel where clients
• Credit Card fee waiver (Late fee)
are now able to use local bank fund transfer option for high
• Credit Card Instabuy request
value transactions.
• Cards Statement cycle date change
• Card supplementary detail update
The Bank’s vision is to deliver a seamless end-to-end, client-
• Loan closure letter
first digital banking experience, powered by innovation and
• Copy of Original documents (loan)
data and analytics with key priorities:
• Other banking services – With text box option
• Deliver digital innovation to meet evolving client needs:
• Tracking status of various requests
End-to-end digital capabilities to provide clients a seamless
digital experience
4. Other services:
• Expand our digital reach: Offer a scalable model to access
• Account summary
the mass segment
• Forex Details
• Be data-driven: Harness data and insights to deliver
• Loan and cards summary details
personalised client solutions

Digital Update
Other existing online service offerings like eStatements,

• Mail box complete SMS alert solution, online purchases (eCommerce
• Fund transfer limit change transactions) through the Bank issued chip based EMV Debit
• Re-set password and change password and Credit Cards along with contactless feature, Online
• Change alert setting USD prepaid cards, website in dual language, online unified
• Push notifications account opening form for seamless onboarding etc. have also
• Biometric login helped in enhancing client experience.
Other payment services and channels: We will continue to deliver our digital strategy by accelerating
• Credit Card payments through Fonepay for digital innovation to meet evolving client needs, implement
member banks and eSewa agile approach across our payment products, operations
• Instant Credit Card payments through connectIPS & technology, harness the existing payment platforms to
• All payments and services offered from connectIPS expand our digital reach, offer a scalable model to our clients,
portals Web/App re-align our investments in payment systems to fund growth,
Digital Update
product extension and client experience, and think client in
every situation.
41
CSR Update
ªSustainability: Our Social Purposeº

Lifting Participation through Futuremakers Our partnership with Plan International
by Standard Chartered Nepal
Under our Futuremakers initiative in Nepal funded by Standard

Chartered Foundation (UK), Plan International Nepal has
been implementing the ‘Promoting Economic Empowerment
of Adolescents for Resilient Livelihood (PEEARL)’ project from
January 2022 in two municipalities of Bardiya District. The
beneficiaries of the project include vulnerable and excluded
young people, especially young women (18-24 years of age)
who have been made resilient and are actively engaged
in decent work of their choosing. The project also aims to
provide young women with opportunities to expand and
CSR Update
strengthen technical and vocational skills that will lead
At Standard Chartered, we believe everyone deserves the to rebuild economic resilience shattered by the COVID-19
opportunity to realise their potential. Yet globally, more pandemic. After rigorous selection, a total of 120 young
than 282Mn young people are not in education, training or women were selected under the project and they underwent
employment. The economic impact of the global COVID-19 390 hours of technical skills training in 10 different vocations
pandemic has made this worse. like tailoring/fashion designing, security guard, beautician,
dental assistants, animal husbandry, computer operators etc.
Futuremakers by Standard Chartered is our global initiative The project has successfully concluded in October 2023, and
to tackle inequality by promoting greater economic inclusion we have managed to achieve decent livelihoods for all the
in our markets. The programme supports disadvantaged 120 girls, whether through job placements or business startup
young people aged 35 or below, especially girls and people support.
with visual impairments, to learn new skills and improve their
chances of getting a job or starting their own business. We The Bank’s Corporate Affairs, Brand & Marketing (CABM) team
set out to fundraise and donate USD50Mn for Futuremakers visited the project implementation locations on 30 March – 01
between 2019 and 2023 to empower the next generation to April 2023, along with representatives from Plan Nepal and
learn, earn and grow. In response to COVID-19, we committed local NGO partner, Banke UNESCO Club. They interacted with
a further USD25Mn to Futuremakers to support economic the project beneficiaries across various locations as well as
recovery for young people impacted by the pandemic. In representatives from local government bodies (municipality)
2022, Futuremakers reached more than 335,000 young who have been regularly engaged with the project. The team
people, and more than one million young people (74 percent visited Nepalgunj, Thakurdwara, Bhurigaun and other villages
young women) between 2019 and 2022 across 43 markets. in Bardiya.
Guided by our brand promise Here for good, our sustainability
philosophy sets out how we integrate sustainability into our
organisational decision-making.
Inequality, along with gaps in economic inclusion, have

resulted in many young people, women and small businesses
struggling to gain access to the financial system to save for
their futures and grow their businesses. Under the theme of
‘Lifting Participation through Financial Inclusion’, we aim to
expand the reach and scale of financial services to promote
economic inclusion. Our endeavour is to unleash the full
potential of women and small businesses in our core markets to
improve the lives of millions of people and their communities.
Financial literacy programme at Tri-Padma Vidyashram Secondary Our visit to Bardiya to meet the beneficiaries of the PEEARL project
School in Lalitpur
43
Reopening of our day care centre The donation covered the renovation of the building, CEC
setup, community outreach activities, basic eye care training
The Bank is making great efforts to ensure gender parity at and salary and benefits of the CEC staff for a year. The project
our workplace, foster better work life balance and facilitate is focused on aged people, women, children, people with
better working conditions for the workforce, particularly our impairment, and people with disabilities.
women colleagues. We were the first bank in Nepal to open
a day care centre (creche) for the children of employees in Based on the total population of proposed project area (rural
our head office in 2013 but had to close it down due to the municipality and catchment area), about 50,000 people will
pandemic. be benefitted from the Community Eye Centre.
We have refurbished the creche using our local CSR A total of 7,200 persons will directly benefit from this
funds for the cost of NPR1,231,074.00 (~ USD9397.5). The project such as community eye centre (3,000), community
creche was inaugurated on 26 June 2023 by chief guest Dr. screenings (2,000), school screenings (2,000) and cataract
Neelam Dhungana Timsina, Deputy Governor of Nepal surgeries (200) through the outreach programme in a year.
Rastra Bank.
Other programmes
In Nepal, as per the provisions of Unified Directives 6/2079
Clause 16 issued by Nepal Rastra Bank, we are required to
annually appropriate 1% of the net profit for the fiscal year to
be spent in the subsequent fiscal year as CSR spending. For
the fiscal year 2022-2023, 1% of the Net Profit of the previous
fiscal year was set aside for CSR project/s to be spent from
local books. From the CSR budget, 5% was spent on Financial
Literacy projects across provinces, and 5% was spent on the
promotion of digital initiatives.
We had solicited Expressions of Interest (EOI) from interested

NGOs for sustainability projects keeping in view segments
prescribed from NRB which overlapped with our global
The Community Eye Centre at Nichuta, Prasa
sustainability agenda, i.e. Futuremakers. The notice was
published in a national daily newspaper to seek proposals,
following which NGOs/projects were selected after careful TIO had been our implementation partner during the multi-
consideration, review, elaborate proposals, and discussion year Seeing is Believing programme. TIO started eye health
considering previous discussions for eye health/avoidable services in 1994, in different communities of Nepal, and is
blindness related projects in addition to Futuremakers (also the World Health Organisation’s (WHO) collaborating
complying with NRB target segments) and the following centre for ophthalmology. TIO is a tertiary level hospital with
criteria: super specialty facilities, dedicated to providing promotive,
preventive, and curative eye care services to the communities.
• Project Objectives CEC is a model developed by TIO, which provides visual acuity
• Target Audience / Scope of the Project / Reach testing, refraction, eye examination, investigation, treatment
• Need in the community including minor procedures, medical and optical dispensing,
• Sustainable Impact referral to higher centre as well as community activities
like outreach micro-surgical eye clinics and school eye
Other criteria: health programme. CEC also delivers eye health promotion,
• The selected NGO has been in operation for a minimum of education programmes and basic eye care training for health
three years within the country/region workers and community volunteers.
• The NGO has a proven track record and strong positive
reputation by conducting additional adverse media
searches
• The NGO is conducting relevant and impactful activities in
relation to the proposed social welfare activity
Below are the key projects that were selected basis the above
criteria:
Tilganga Institute of Opthalmology (TIO)
The Bank donated USD36,434 (NPR4,790,866) to Nepal Eye

Programme which was used in the establishment of a Community
Eye Centre (CEC) at Nichuta, Parsa, to deliver comprehensive eye
care services to the people of Paterwa Sugauli Rural Municipality A beneficiary undergoing eye examination
– 5 and its adjoining rural and urban municipalities.

CSR Update
The purpose of this project is to maximise the reach of eye care A mapping of specialty hospitals across all provinces was
services provided to the rural areas, and the marginalised and carried out in the beginning to identify best possible technical
disadvantage population residing in the Tarai region of Nepal. establishments for possible partnership in the roll out of
It also aims to improve eye health of the rural population in the project. A quick assessment of the facilities was carried
collaboration with local government units and social groups. out before establishing the partnership. A detailed project
protocol was prepared jointly with the selected partner
(specialty hospital/facility) to ensure standardisation in the
overall implementation of the project. Screening camps were
set-up in different catchment communities of the project
areas selected by Provincial level government authorities
in coordination with local level partner organisations of
MITRA Samaj. A dedicated and competent clinical team
was deployed for screening the hard-to-reach population to
identify cases with cataract and other avoidable blindness.
CSR Update
Cheque handover of USD36,434 (NPR4,790,866) to Nepal Eye Programme
which was used in the establishment of a Community Eye Centre (CEC) at
Nichuta, Parsa
MITRA Samaj
The donation made to MITRA Samaj USD51,379

(NPR6,725,000) was used for the Cataract Blindness
Alleviation Project to identify cases of avoidable blindness,
including cataract, among the hard-to-reach population
(especially 50+years), in priority areas of all provinces of
Nepal. A cataract surgery being performed in Birgunj
MITRA (Measures for Intervention Training Research and The screened cases of cataract are being treated free of cost
Action) Samaj, established in 2006, is a non-governmental with high quality cataract surgery, i.e. Small Incision Cataract
organisation with proven distinction in designing and Surgery with Intra Ocular Lens Implantation (SICS with IOL). The
implementing large to larger scales of different types of clinical team includes a Senior Consultant Ophthalmologist
research, developmental programmes, health programmes, and other medical staff from partnered specialty hospital/
advocacy actions, social and behavioural change facility. Along with cataract, other manageable eye health
programmes, capacity building activities, awareness raising problems are also being treated, including refractive errors,
campaigns, social marketing, and disaster response in wider- myopia, presbyopia.
ranging health and non-health sectors.
“We are super excited to partner with Standard Chartered

Bank to identify cases of avoidable blinding diseases and
improve people’s vision by organising free Outreach Micro
Surgical Eye Clinics (OMSEC). We are looking forward to
touching lives positively.”
- Vivek Singh Thakuri, Executive Director of MITRA Samaj
OUTCOME:
- 3,000 people screened
- 700-1,000 cataract cases identified
- 1,500 cases with refractive error to get treated and/or
receive reading glasses
- At least 700 cataract cases restored with vision
Eye health care is an essential component of basic health

service to be provided to all citizens as stated in the constitution
of Nepal. Despite efforts from various stakeholders, vision
impairment continues to be a major problem. In line with
this, the Bank has made significant donations to help provide
Cheque handover to MITRA Samaj for the Cataract Blindness
Alleviation Project
accessible, affordable and quality eye care in the country.
Through our collaboration with Nepal Eye Programme
45
(Tilganga Institute of Ophthalmology) and MITRA Samaj, we KISHORI will provide girls with necessary transferable and life
endeavour to provide eye care services to those who would not skills, while Silpa will equip a few shortlisted females from the
have easy access or cannot afford this treatment. The focus is previous cohort with necessary training on industry driven jobs
on early detection of eye ailments, referral, and appropriate to make them financially stable for the long run so that they
treatment. Serving communities will always be at the heart of are able to afford their own education. These two projects,
Standard Chartered. targeting more than 200 higher secondary female students,
are being implemented in more than 10 public colleges across
Shequal Foundation - Project Silpa the seven provinces in the country.
The Bank has contributed NPR5Mn to Shequal Foundation’s

‘Silpa: Shaping the Future project’ to create a lasting
impact in the lives of young women from underprivileged
backgrounds in Nepal, equipping them with essential skills
and opportunities for personal and professional growth.
This is an extension of our project Kishori which was
implemented last year.
Shequal Foundation works with school students, adolescents,

undergraduates, professionals, underprivileged women,
mothers, civil society organisations, and small and medium-
sized women entrepreneurs. This year, Shequal Foundation
has expanded its efforts by introducing Silpa: Shaping the
Future project, that is focused on empowering and equipping
female school or higher secondary school dropouts from
Bagmati and Koshi Province with certified blue-collar job skills.
The project’s primary objective is to encourage these young Our CABM team with Shequal Foundation at their office in Lalitpur
women to continue their education while simultaneously
improving their family’s living conditions through income-
“Inspired by the depth of transformation in young women’s
generating skill training.
lives, Standard Chartered Bank’s invaluable support for the
project has been a catalyst for positive change. We are
very grateful to SCBNL for their generous contribution and
believing in our mission to empower young women with
vital skills for their brighter future.”
- Astha Sharma, Managing Director, Shequal Foundation
Highlights: Employee Engagement and Volunteering
• Our partnership with Restless Development Nepal: In

April 2023, a donation of NPR1,498,640.00 (~ USD11,440)
was made to Restless Development Nepal for delivering
Cheque handover to Shequal Foundation
financial literacy initiatives / sessions across Nepal. The
main objective was to educate young people aged 18-25
years from marginalised communities, women, people with
Demographics for KISHORI disabilities, and sexual minority groups about the concept
and importance of financial independence.
Age group: 15 - 20 years (females)
Background: Higher Secondary Students from Public
School
Number of Schools: 10 Public Schools
Number of Provinces targeted: 7 Provinces
Number of Participants targeted: 200+ females
Demographics for Silpa
Age group: 18 - 20 years of female

Background: KISHORI Graduates
Number of Schools: 2 Public Schools (Participated in
KISHORI Project)
Number of Provinces targeted: Koshi Province and
Bagmati Province
Number of Participants targeted: 20+ females
Our partnership with Restless Development Nepal to
deliver financial literacy across provinces in Nepal

CSR Update
• Below were the Financial Literacy sessions conducted by • The below Financial Literacy sessions were conducted by
Restless Development Nepal, with the Bank’s support: Shequal Foundation on behalf of the Bank:
- Session for students of Vishwa Adarsha Secondary - Session for class 11 and 12 students of different colleges
School of the Bagmati province on the importance of savings,
- Session for students of Sacred Heart English School foreign employment and remittances, banking products
- Session for Grade 12 students of Shree Shanti Namuna (including L/C & Guarantee), types and features of bank
Madhyamik Vidyalaya, Lumbini accounts, types of loans, insurance etc.
- Session for students in Siddhartha Secondary School, - Session on benefits of banking and savings for 20 female
Hetauda and Hetauda School of Management and students of Jana Maitri, Kuleshwor
Social Science
- Session for BBA students of Rajashri Janak Campus • In partnership with Shequal Foundation we also planned a
- Session for students of Shree Shakal Bhawan Kanya Digital and Financial Literacy workshop for students from
Secondary School and Jugal School a government school in our office premises, on 5 July 2023.
- Session for trainees of Grand Computer and Language The session covered digital banking awareness, financial
CSR Update
Centre on understanding online banking, digital literacy training, and mentoring the students on their career
payments, cyber security in financial transactions, aspirations. The Bank’s CEO also addressed the students
investments and share trading, etc. and spoke to them on the future of banking, the importance
- Series of sessions for students of Shree Panchakanya of going digital, etc.
Secondary Secondary School, Budhanilkantha,
Shree Shram Rastriya Secondary School, Kumarigal, • Digital Banking Awareness: As per Nepal Rastra Bank’s
Aadharshila Academy, Ekantakuna, Lalitpur, AIMS monetary policy 2079/80 clause no. 142, the Central
International Academy, Lagankhel, Lalitpur and Bank has been encouraging digital payments. In this
Richmond International College, Kalanki, Vidyapunja regard, News24 TV channel celebrated March - May
Engilsh Secondary School, Lamatar, and Jugal School, 2023 as ‘Digital Awareness Months’ in collaboration with
Dhapakhel. These sessions were aimed at educating the Nepal Rastra Bank, Banker’s Association, Development
students on the importance of financial literacy, money Banker’s Association and Society Of Economic Journalists
problems and their impact, budget planning, setting (SEJON). Standard Chartered Bank Nepal Limited (SCBNL)
financial goals, etc. supported the broadcast of a series of episodes on News
24 themed on digital awareness. The television programme
• The below Financial Literacy programmes were organised featured Anirvan Ghosh Dastidar - CEO, SCBNL, Michael
during Global Money Week 2023: Siddhi – Head, Transaction Banking, SCBNL, and Pranu
- Financial Literacy related awareness posts on Standard Singh - Head of Corporate Affairs, Brand & Marketing
Chartered Bank Nepal’s official social media handle (CABM), SCBNL, where they talked about the Bank’s digital
- Three colleagues carried financial literacy placards and offerings and our digital transformation journey.
displayed it to the public outside the head office
- Session on basics of banking and budgeting was • We organised a ‘Home Run’ fundraising programme
conducted for the students of Public Health and D wherein around 200 colleagues participated by walking,
Pharmacy students of Koshi Health Institute Biratnagar running and cycling across a ~11km route covering the
- Session on promoting saving habits and making Bank’s branches in Naxal, Newroad and Naya Baneshwor.
participants aware of loan facilities for entrepreneurship The funds raised through the event will be used for
development, for the students of Bhaldhunga Secondary Futuremakers-related CSR projects in Nepal.
School at Bishnupaduka-20
• A Tree plantation programme was organised at Laboratory
• Below were the Financial Literacy sessions conducted by School, Kirtipur on 3 June, 2023 where ~140 colleagues
SCBNL volunteers: participated. This is the 12th year of the tree plantation
- Session for class 12 students of Tri-Padma Vidyashram programme. More than 300 trees were planted by the
Secondary School employees of the Bank.
- Session for class 11 and 12 students of Janamaitri Multiple • A Blood Donation camp was organised by the D&I council
Campus in collaboration with the Nepal Red Cross Society on 5 April
- Session for students of ‘Vittiya Saksharta Sambandhi 2023 in the Bank’s premises. Over 77 donors from the Bank
Janchetana Karyakram’ to make them aware of digital donated blood.
banking, remittance and Clean Note policy
- Session for students of ‘Stay At School’ in Kathmandu on
basics of banking and digital banking products
- Session for students from class 11 and 12 of Shree
Bhaldhunga Secondary School
- Session for women entrepreneurs (Mahila Udhyami) to
equip them with knowledge of the financial sector in
Nepal
- Session for Youth With Disability (hearing impaired
youth) in collaboration with CBM Global Nepal to
make them aware of the importance of savings, foreign
employment and remittances, types of loans, insurance
etc.
CEO’s interview on News24 on Digital Banking and the way forward’
47
On the occasion of International Women’s Day 2023, SCBNL supported Zonta Club of
Kathmandu by celebrating ‘Yellow Rose Day’ and honouring inspirational women
The Home Run event organised in Kathmandu
Tree plantation activity held at LAB school in Kirtipur to mark World Environment Day

CSR Update
ªCSR Spend for NP Year 2079-80º

The detailed information as per the Unified Directive 2079 directive number 6.16 (cha) issued by Nepal Rastra Bank:
Standard Chartered Bank Nepal Limited has conducted various corporate social responsibility programmes to support our communities. The Bank has set aside 1% of the net
profit and deposited in the Corporate Social Responsibility Fund.
Sectoral and provincial details of expenses incurred in the F.Y 2079/2080 from the corporate social responsibility fund:
Segment Koshi Madhesh Bagmati Gandaki Lumbini Karnali Sudurpashchim TOTAL
Environment/Society 65,380.66 52,770.66 1,661,798.07 52,770.66 102,770.66 52,770.66 52,770.66 2,041,032.00
Education 2,495,200.00 2,495,200.00 4,990,400.00
Health 960,714.29 5,760,714.29 960,714.28 960,714.29 960,714.29 960,714.29 960,714.29 11,525,000.00
Financial Literacy 388,928.57 388,928.57 388,928.57 388,928.57 388,928.57 388,928.57 388,928.57 2,722,500.00
Others 178,123.71 178,123.71 188,123.71 178,123.71 201,668.71 178,123.71 178,123.71 1,280,411.00
TOTAL 3,638,024.29 5,930,214.29 8,396,702.00 1,130,214.29 1,203,759.29 1,130,214.29 1,130,214.29 22,559,342.71
49
CSR Update
ªMeet the Futuremakersº
Futuremakers by Standard Chartered is our global initiative to tackle inequality by promoting greater economic inclusion,
supporting young people from low-income communities to learn new skills, and improve their chances of getting a job or starting
their own business.
“I started my beauty parlour with the support of Standard “I have been successfully running a pig farm in Bardiya since
Chartered Bank and Plan International Nepal. Initially my last year. I am truly grateful to Standard Chartered Bank
parents were a bit hesitant when I told them about this new and Plan International Nepal for supporting me financially,
venture as I had no prior background. But when my business as well as providing the necessary technical skills training
started flourishing and I became financially independent, for successful pig-rearing. In 2022, I joined the Futuremakers
they realised I had made the right decision. Although I am project training, which provided skills training to 120
originally from Thakurbaba, I set up my business in Gulariya vulnerable young women. Despite my prior experience of
since my fiancé lives there, and we plan to get married soon. working with livestock, I had limited information about
He has been immensely supportive, right from the start. the health of animals, how to identify diseases and access
veterinary services, or market a business to customers. The
I am only 22, but I feel a sense of accomplishment and pride training really helped me with work-readiness skills and
for having been able to start something of my own. I manage knowledge of pig-rearing.
to earn around NPR2000 daily; the income varies depending
on the festive season. I am also looking at training some My father-in law has also been very supportive and is actively
girls to assist me and would like to expand my business in involved in the business. Fortunately, everything is going well,
the future. A big thank you to Standard Chartered Bank and and I am able to save enough to manage the household
Plan International Nepal for changing my life for the better.” expenses and take care of my son’s education. Going forth,
I want to scale up my business and use the profits from pig-
- Laxmi (Founder and owner of a beauty salon) rearing to improve my family’s income. Kudos to Standard
Beneficiary of Standard Chartered Bank Nepal’s Chartered Bank and Plan International Nepal for having
PEEARL project in Bardiya district, in collaboration faith in me and providing me the opportunity to start my
with Plan International Nepal own business.”
- Parbati (Founder and owner of a piggery business)

Beneficiary of Standard Chartered Bank Nepal’s PEEARL project in
Bardiya district, in collaboration with Plan International Nepal

HR Update
ªHuman Resourcesº
Our people are our greatest asset The Bank attracted attention locally and globally after
relaunching its one-of-a-kind creche i.e. day care centre for
The Human Resources department plays a pivotal role in employees. We had launched our day care centre in 2013 but
the success of Standard Chartered Bank Nepal Limited by it had to be closed in 2020 citing health related risks due to
ensuring the recruitment, development, and retention of COVID-19. The facility was relaunched on 26 June 2023, and
talented individuals who contribute to our Bank’s growth and employees can now bring their infants and toddlers (up to
excellence. This report outlines key HR initiatives, achievements, three years of age) to be cared for by experienced nannies
and challenges during the fiscal year 2022/2023. in the Bank’s head office building. It is aimed at helping
our employees, especially women, in maintaining work-life
balance and work towards increased productivity. Standard
Workforce Overview Chartered Bank Nepal Limited (SCBNL) is the first and only
bank in the country to launch such a facility to help working
As on 16 July 2023, the total number of employees in the parents continue their professional journey.
Bank stood at 504 with a gender ratio of 55:45 (male to
HR Update
female colleagues). We are committed to fostering diversity
and inclusion in our workforce which is the key to achieving Recruitment and Talent Acquisition
our purpose of driving commerce and prosperity. We aspire
to build an inclusive work culture where everyone feels safe During the fiscal year, we hired 29 new employees, including
and heard and no one at work feels they have been treated the Head of Financial Markets and Treasury Markets. Our
differently. recruitment efforts were focused on finding individuals who
align with our values and possess the skills needed to thrive
in the dynamic banking industry. There were equal number of
male and female candidates who were selected in the total
job openings throughout the year. Majority of the positions
were closed with internal candidates as compared to external
hires. The Bank believes in putting internal candidates first
and hence, competent or deserving internal candidates are
given first preference, if they are interested. This internal first
practice is helpful in promoting growth and development of
internal candidates in building their career in the Bank, which
will in turn help us retain top talent.
Employee Development and Training

Investing in employee development remains a top priority
for the Bank. We provided 1555 man days of formal training
and development programmes to enhance the skills and
competencies of our workforce. These programmes included
classroom and activity-based seminars, e-learnings and virtual
training sessions, conducted both internally and externally.
The employees were involved in accessing more than 6500
e-learning materials in the fiscal year. The Bank has a separate
e-learning platform, diSCover, wherein employees can access
various reputed international learning platforms via a single
Diversity and Inclusion site. Each employee has a target learning of 64 hours in a year
on diSCover, and they can access any learning material they
The Bank has a distinguished Diversity and Inclusion Council
are interested in. As part of our learning and development
chaired by the country Chief Executive Officer through which
initiative, the Bank also carries out internal transfers and short-
we are able to connect with our colleagues, clients and
term attachment programmes wherein employees can learn
communities, and define key objectives and areas that we
from different departments and functions.
need to focus on to build a culture of inclusion, respect and
equality. The Council organises various engagement activities
The Learning Employee Resource Group was also actively
to celebrate different facets of our culture, to value our diverse
involved in driving learning initiatives by coordinating and
workforce and share information on important aspects related
organising learning programmes. Like every year, we observed
to wellbeing. During the fiscal year, we celebrated various
Global Learning Week, and participated in various learning
events like Purple Tuesday, International Men’s Day, Women’s
sessions organised globally. Local learning week initiatives
Day and World Day for Cultural Diversity for Dialogue and
were also organised by the Learning Employee Resource
Development with a series of events and sessions and
Group, including sessions by the CEO and senior managers
witnessed active participation from all colleagues. There
of the Bank, and we witnessed active participation from our
were contests organised to make these occasions even
colleagues.
more exciting. We also celebrated Dashain festival with a
one-day ‘Changa Chet’ contest for kite flying aspirants. A
blood donation camp was organised in the Bank premises
where eligible colleagues participated to donate blood and
all colleagues were encouraged to wear red to show their
support.
51
Depending on the knowledge and skillset of the employees Retention and Talent Management
and the market conditions, the Bank considers redeployment
of talent in areas that need additional headcount. Human Retaining top talent is essential. We have succession planning
Resources supports the business and functions in need in place for critical talent in the Bank to ensure a smooth
through proper collaboration and technical assistance. This transition in leadership positions. The work culture and the
way, the Bank can efficiently manage its Human Resources overall benefits offered by the Bank are the key factors in
without adding additional cost burden, and employees can in attracting and retaining top talent in the Bank. Top talent and
turn explore their interest by utilising their core competencies female leadership in the Bank go through intense mentorship
within the Bank. and training to help them upskill / reskill, and prepare them for
leadership positions in the future.
Employee Engagement
Conclusion
Employee engagement is crucial to our Bank’s success. Our
annual My Voice survey revealed an 73% engagement rate, The Human Resources department at Standard Chartered
reflecting the dedication of our colleagues to our values remains dedicated to fostering a high-performing, diverse,
and brand promise. The HR team in collaboration with the and engaged workforce. We are committed to aligning our
Diversity & Inclusion Council and the Corporate Affairs Brand efforts with the Bank’s strategic goals and look forward to
and Marketing (CABM) team conducted various engagement contributing to another successful year.
activities to drive employee engagement. The Bank supported
the government’s drive to provide national ID to its citizens
by inviting officials in the Bank premises and arranged for a
dedicated space for our employees and their family members
to register for the national ID. The arrangement was well
appreciated by our employees and the government officials,
as it provided our employees the chance to register for the
national ID in case they had missed out on prior opportunities.
Our Fair Pay Charter and Gender Pay Gap

With our Fair Pay Charter, we have pledged to our colleagues
that we are committed to a culture of sustainable high
performance where everyone can be at their best and feel
that their contributions are fairly rewarded. The Charter
covers all aspects of reward and sets out the principles Inauguration of our day care facility in the New Baneshwor
that underpin our performance and reward strategy and office on 26 June 2023
associated decisions – including providing a sufficient level of
financial scrutiny, being competitive across the market, paying
for performance, ensuring consistency and transparency in
outcomes, supporting flexibility and wellbeing of colleagues,
and rewarding colleagues in a way that is free from any
biases. The Bank is taking actions to reduce the Gender Pay
Gap to focus on addressing the historical imbalance in gender
representation in the financial services industry.
Local learning day session with the CEO on ‘Communication

and Presentation Skills’
World Day for Cultural Diversity for Dialogue and Development

(WDCD) celebrations organised by the D&I Council
Panel discussion on ‘Helping Men and Boys’ on the occasion

of International Men’s Day

Property Update
ªPropertyº
Transforming our workplace
Our workplace transformation has allowed us to reimagine the way we work. With the release of the Property 2.0 strategy in 2023,
the Nepal Property team has been focusing on seven strategic pillars:
- Accelerating to a sustainably higher group RoTE

- Building a best in-class customer experience
- Strengthening our position as the customer of choice
- Providing twice the experience
- Transforming the branch network
- Driving sustainability
- Delivering every day for colleagues and clients
Branch interior retrofit work
Property Update
To provide best-in-class customer experience, the Property team along with CPBB initiated the Branch interior retrofit work across
three branches - Biratnagar, Boudha and Birgunj. The aim was to enhance the current look and feel of the branches and meet few
specific space requirements which would ultimately enhance customer experience.
Biratnagar branch: The branch lacked space for a Personal Financial Consultant (PFC), a meeting room for BB clients and
a separate space for CCIB customers. Though the branch was constructed basis the Bank’s latest Next Gen standards, meeting
these extra requirements made it more customer friendly. The retrofitting work was successfully carried out with the addition of a
PFC space, a meeting room and a separate CCIB space.
Boudha branch: The branch had been constructed as per old standards and the spaces were non-aligned and cluttered.
Retrofitting work was carried out to convert the PFC space basis the new guidelines by creating an additional meeting room, back-
office area and enhancing the overall look and feel of the branch.
Birgunj branch: Though the branch was recently constructed as per the latest Next Gen standards, minor work was carried
out to create extra space, while enhancing the interiors of the branch.
The work was initiated in January 2023 and completed by May 2023.
Biratnagar branch Boudha branch Birgunj branch
Launch of the Day Care Centre

Due to the outbreak of COVID-19 in 2020, the old creche facility was kept on hold for almost three years. With the end of the
pandemic and due to repeated requests from working parents, the Property team along with the country Diversity & Inclusion
team reinstated the creche facility in the head office, with new and refreshed interiors.
The site was designed for 8-10 babies of 3 to 12 months of age, with a maid-to-baby ratio of 1:2. Below are the salient physical
features of the project:
• Colourful and child-friendly wallpapers

• New ceiling lights in the shape of the clouds
• Refreshed mothers’ room
53
• Child-friendly wardrobe
• H&S compliant multi-colour flooring
• Reinstatement of attached child-friendly washrooms
• Pantry facility with microwave oven
The project took over 45 days for completion. The facility was officially inaugurated on 26 June 2023.
Furthermore, to support the Bank’s agenda of ‘Accelerating to a sustainably higher group RoTE’, the Property team was able to
save almost half of the maintenance cost and optimise around 4,300 sq.ft. of space by virtue of the relocation of branch from
Lazimpat to Naxal. The branch is the first-of-its-kind with a dedicated Priority Centre and Retail space. The branch also covers all
accessibility aspects like ramps and unisex toilets for the differently abled.
Health, Safety and Security

The Safety and Security of our colleagues, clients, customers, and visitors is the Bank’s utmost priority. Our robust Safety and
Security policy is embedded in the foundation of the Bank’s values. The head office restack project which was carried out in the
last fiscal year is a perfect example of the Bank’s efforts to maintain a safe and secure environment for colleagues, customers and
visitors. This year we also achieved the international Well HS rating for the head Office building. Under the Safety and Security
framework, we carried out Indoor Air Quality and Water Quality tests for all the big portfolios, including our head office and
branches. Furthermore, our agenda for the branch and office accessibility for differently abled customers and visitors is being
met through the construction of the ramp and accessible toilets. A recent example of this is the Naxal branch with all these
components and features. The accessibility agenda will continue for our future projects as well.
The Property team has an excellent track record of managing emergencies and pandemic situations like the earthquake and the
COVID-19 pandemic in the past. The team has been constantly monitoring the situation for natural calamities and epidemic risks.
Given our prior experience, we are well prepared to manage any such untoward incidents.

Property Update
ªNepal Property 2.0º
Accelerate to a sustainably Build a best-in class customer

higher group RoTE experience
• Lazimpat branch relocation and optimisation • HO restack level 1 till 4

from 7,800 sq.ft. to 3,500 sq.ft • Mezzanine face uplift- Washroom
• Dharan branch relocation and optimisation refurbishment, storage and plant addition,
from 5,500 sq.ft. to 1,800 sq.ft. (WIP) fresh air addition
• Installation of Solar panel at HO. 100 kw. • Minor interior retrofits in 3 branches -
Estimated USD5000k saving annually Birgunj, Boudha and Biratnagar
• EV Car Vehicle pooling project in progress • Archival Outsourcing under planning stage
Property Update
Strengthen our position as an
employer of choice
• HO restack level 1 till level 4

• Revamp and revival of Day care centre at
head office after COVID-19
• WELL HS certification, addition of signages
and First aid room in progress
• Kitchen at HO parking revamped into
Modern SS type
• Introduction of Table football (Foosball) at
Level 5 HO cafeteria
• Targeted creation of wellness area for staff
wellness
Twice the experience Transforming the branch

network
• Created 360 ABW WS during HO • Lazimpat branch relocation
restack (Naxal branch project) as per Next
• Created priority centre and branch Gen standards, dedicated priority
complying with Next Gen standards centre
at Naxal branch • Dharan branch relocation as per
Next Gen Standards (WIP)
• Pokhara branch relocation in the
pipeline
Driving sustainability Our revamped branch

network
• Installation of solar panel 100 • All PPMs and reactive maintenance
KW at HO; Estimated savings of intact
USD5000k annually (In the planning • Electrical rectification at Butwal
stage) branch (Completed)
• Installation of LED lights in all floors • GIA graded Acceptable; established
and branches during 2023 audit
55
ªBranch Network and ATMº
Branch Network
Biratnagar Branch Lalitpur Branch Nepalgunj Branch
PO Box. 201. Mahendra Chowk- 11 Norkhang Complex, Jawlakhel, Lalitpur, Surkhet Road, Karkando, Ward No. 18
Biratnagar, Morang, Nepal Nepal Nepalgunj Sub Metropolitan, Banke,
Tel: +977 -021 -590091, 590092, 590099 Tel: +977 -01 -5970590 Nepal Tel: +977 -081 -531514, 531515
Naxal Branch New Road Branch
Birgunj Branch Raina Basera, Basantapur Durbar
Adarshnagar-10, Birgunj, Nepal Kathmandu Metropolitan City Ward
No. 1, Narayan Chaur, Naxal Square, New Road-23, Kathmandu,
Tel: +977 -051 -529499, 529677 Nepal
Tel: +977 -01 -5970570
Tel: +977 -01-5344505, 5344406
Butwal Branch Narayangarh Branch
Gyawali Complex Milan Chowk, Bhatbhateni premises (ground floor), Pokhara Branch
Butwal 9, Rupandehi, Nepal Bharatpur-10, Chitwan, Nepal. PO Box 08, New Road, Pokhara, Nepal
Tel: +977 -071 -539832, 536832 Tel: +977-01-5970581 Tel: +977 -061 -523876, 586230, 586231
Dharan Branch New Baneshwor Branch Boudha Branch

Dharan 7, Buddha Marga, Bhote Pul, PO Box 3990, New Baneshwor, Bhatbhateni premises (ground floor),
Sunsari, Nepal Kathmandu, Nepal Chuchepati, Boudha Ward No. 7,
Tel: +977 -025 -570505, 535480, 535980 Tel: +977 -01 -5970500 Kathmandu, Nepal
Tel: +977 -01 -4581819, 4581822
Extension Counters
United Nations Counter British Gurkhas British Gurkhas
UN Building, Lalitpur PPO Pokhara PPO, Manbhawan, Lalitpur
Tel: +977 -01 5970591 Tel: +977 -061 -567259 Tel: +977 -01-4235328

Property Update
ATM Network
Naya Baneshwor, Kathmandu Tribhuvan International Airport, Bhotepul, Dharan
Standard Chartered Bank Nepal Kathmandu Standard Chartered Bank Nepal
Limited., Head Office TIA Arrival Hall Limited
Boudha Bhatbhateni premises
Naxal, Kathmandu Standard Chartered Bank Nepal Dharan
Standard Chartered Bank Nepal Limited B P Koirala Institute of Health and
Limited Science (BPKIHS) premises
Boudha Stupa, Boudha
Maharajgunj, Kathmandu Mahendra Chowk, Biratnagar
Property Update
Saleways Department Store Norkhang Complex, Jawlakhel, Lalitpur Standard Chartered Bank Nepal
Standard Chartered Bank Nepal Limited
Raina Basera, Basantapur, Durbar Limited
Square Adarshnagar, Birgunj
Standard Chartered Bank Nepal Near UNDP Complex, Lalitpur Standard Chartered Bank Nepal
Limited Hariharbhawan, Pulchwok Limited
Thamel, Kathmandu UN House, Lalitpur Bharatpur-10, Chitwan, Bhatbhateni
Kathmandu Guest House Standard Chartered Bank Nepal premises
Limited Standard Chartered Bank Nepal
Narsingh Chowk Limited
Thamel, Kathmandu Hallan Chowk, Lakeside, Pokhara
Near Ying Yang Restaurant ATM Lounge, Centre Point Milan Chowk, Butwal
Standard Chartered Bank Nepal
Hotel De’l Annapurna Durbar Marg, Deep, Pokhara Limited
Kathmandu British Gurkhas Nepal
Adjacent to the main entrance gate of Karkado-18 Nepalgunj, Banke
the hotel New Road, Pokhara Standard Chartered Bank Nepal
Opposite of BBSM Limited
Manbhawan, Lalitpur
British Gurkhas Nepal
57
ªIndependent Auditor’s Reportº
To the Shareholders of Standard Chartered Bank Nepal Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Standard Chartered Bank Nepal Limited (the “Bank”), which comprise the statement
of financial position as at 31 Ashadh, 2080 (16 July, 2023), and the statement of profit or loss, statement of other comprehensive
income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Bank as
at 31 Ashadh, 2080 (16 July, 2023), and of its financial performance and its cash flows for the year then ended in accordance with
Nepal Financial Reporting Standards.
Basis for opinion

We conducted our audit in accordance with Nepal Standards on Auditing (NSAs). Our responsibilities under those standards
are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our Report. We are
independent of the Bank in accordance with the ICAN’s Handbook of Code of Ethics for Professional Accountants together with
the ethical requirements that are relevant to our audit of the financial statements in Nepal, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and ICAN’s Handbook of Code of Ethics for Professional Accountants. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of the most significance in the audit of the financial
statements of the current period. These matters were addressed in the context of the audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters
described below to be the Key Audit Matters to be communicated in our report.
S. N Key Audit Matters Auditor’s Response

1. Interest Recognition Our audit approach regarding verification of the process of
The interest income of the Bank has to be recognised on an interest recognition included:
accrual basis and following the Interest Income Recognition
Guidelines 2019 issued by NRB. Though accrual basis of a. Obtaining a clear understanding of the process of
income recognition is prescribed in general, the guidelines accrual of interest income on loans and advances in
require suspension of interest recognition on accrual basis the Core Banking Software of the Bank.
for loans and advances with an overdue of more than 12 b. For fair valuation of collateral, we relied on the latest
months whereas for loans and advances with an overdue available engineer’s valuation of the collateral and
interest/instalment for 3 to 12 months, interest recognition have test-checked the hair cut in fair value of collateral
on accrual basis is limited on the basis of result of collateral as per NRB Income Recognition Guidelines 2019.
testing as specified. Given the lack of system capability c. Test check of the interest income booking with manual
to suspend recognition of income on the basis of overdue computation.
status of loan and fair value of collateral as well as review d. Test-checked the premium charged on sampled
of fair valuation of collateral on regular basis, manual borrowers from the report provided and basis taken
intervention will be required in interest recognition process by the Management to arrive at the excess interest
and hence this might create risk of improper application of payable.
the guidelines and determination of the Fair Value of the
collateral. This may, in turn, have an effect on recognition
of interest income by the Bank.
Other liabilities include excess interest payable to ‘loan

customers’ reversing the interest income which may vary
when the Bank commences the refund. This may, in turn,
have an effect on recognition of interest income of the
Bank. Thus, we have considered it as a Key Audit Matter.

Independent Auditor’s Report
2. Investment Valuation, Identification, and Impairment Our audit approach regarding verification of the process
of investment valuation, identification and impairment
Investment of the Bank comprises of investment in included:
government bonds, T-bills, development bonds and a. Review of the investment of the Bank and its valuation
Auditor’s Report
investment in quoted and unquoted equity instruments. having reference to NFRS issued by the Accounting
The valuation of the aforesaid securities has been done Standard Board of Nepal and NRB Directive 4 read
in compliance with NFRS9 and NRB Directive no. 8. The with 8.
investment in the government and NRB bonds and T-bills b. We assessed the nature of expected cash flow of the
should be recognised on reporting date on amortised cost investments as well as the business model adopted
basis whereas other investments in equity instruments, by the Management based on available evidence/
other than those held for trading, should be valued at Fair circumstances and ensured that classification of
Value through Other Comprehensive Income. investment is commensurate with the nature of
cash flow and management intention of holding the
Given the varieties of treatments recommended for investment.
valuation of investment based on nature of cash flow, the c. For the investment valuation done at amortised cost,
business model adopted, complexity of calculations and we checked the EIR and amortisation schedule on test
the significance of amount involved in such investments, basis.
the same has been considered as a Key Audit Matter. d. For the investment valued through OCI for quoted
investment, we ensured that fair valuation has been
done at the closing transaction rate in NEPSE as on
16.07.2023 and for the unquoted investment the fair
value has been taken on the basis of net worth as per
latest available audited financial statements.
3. Impairment of Loans and Advances Our audit approach regarding verification of impairment
As per NRB Directive 4, the Bank shall measure impairment of loans and advances included:
loss on loans and advances at the higher of:
a. Review of the overdue status of loans and advances
- Amount derived as per norms prescribed by Nepal by obtaining data from the system and matched the
Rastra Bank for loan loss provisioning; and same with the NRB 2.2 report.
- Amount determined as per para 5.5. of NFRS9, read with b. Sample credit files were reviewed, among other
carve-out issued by Institute of Chartered Accountants things, from the perspective of utilisation of loans and
of Nepal dated 18 July 2022, adopting Incurred Loss advances for intended purpose by way of scrutiny of
Model financial statements, account movement, account
turnover etc.
As per the norms prescribed by NRB, provision at c. Expected future cash flows from the individually
prescribed rate should be created on loans and advances significant loans and advances with indication of
based on overdue status of loans and advances as well as impairment are assessed on the basis of realisable
utilisation status of the facility, status of security, borrower’s value of collateral securities based on management
whereabouts etc. estimate.
As per NFRS9 read with carve-out issued by Institute d. Grouping of homogeneous groups of loans was
of Chartered Accountants of Nepal dated 18 July 2022, assessed on the basis of nature and purpose of loans
impairment of loans and advances should be made on and data of historical loss experience in portfolios are
individual impairment basis for loans and advances that assessed on the basis of past due data from the system
are individually significant and on collective impairment as well as data of loan loss provisions of the defined
basis for homogeneous groups of loans that are not group in the past.
considered individually significant.
On individual impairment, the amount of the loss is
measured as the difference between the assets’ carrying
amount and the present value of estimated future cash
flows. Under collective impairment, the loss is determined
after considering the Historical Loss Experience in portfolios
of similar credit risk and the Management’s experienced
judgement as to whether current economic and credit
conditions are such that the actual level of inherent losses
on the reporting date is likely to be greater or less than that
suggested by historical experience.
Impairment of loans and advances under incurred loss

model require assessment of future cash flows as well as
historical loss experiences of portfolios. Further, impairment
of loans and advances under NRB norms for loan loss
provisioning will require assessment of overdue status
of loans and advances and proper utilisation of loan
for intended purpose. Hence, assessment of availability
and accuracy of required data for impairment of loans
and advances under incurred loss model as well as NRB
provisioning norms is regarded as a Key Audit Matter.
59
4. Information Technology General Controls Our audit approach regarding Information Technology
of the Bank is based upon the Information Technology
IT controls with respect to recording of transactions, Guidelines 2012 issued by NRB and it included:
generating various reports in compliance with NRB
guidelines and other compliances to regulators is an a. Understanding the coding system adopted by the
important part of the process. Such reporting is highly Bank for various categories of customers.
dependent on the effective working of Core Banking b. Understanding the feeding of the data in the system
Software and other allied systems. and going through the extraction of the financial
information and statements from the IT system
We have considered this a Key Audit Matter as any control existing in the Bank.
lapses, validation failures, incorrect input data and wrong c. Checking of the user requirements for any changes in
extraction of data may result in wrong reporting of data the regulations / policy of the Bank.
to the management, shareholders and regulators. d. Reviewed the reports generated by the system on a
sample basis. We verified the interest income and
expense booking regarding loan and deposit on test
basis with the CBS of the Bank.
e. We relied on the IT audit conducted by the Bank.
f. We verified the provisioning of the loan and advances
based on ageing on the test-check basis as on
16.07.2023.
Information Other than Financial Statements and Auditor’s Report Thereon
The Management is responsible for ‘the other information’. ‘The other information’ comprises the information included in the
Management Report, Report of the Director’s Report, and Chairman’s Statement but does not include the financial statements
and our auditor’s report thereon. Such information is expected to be made available to us after the date of this auditor’s report.
Our opinion on the financial statements does not cover ‘the other information’ and we will not express any form of assurance
conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read ‘the other information’
identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read such ‘other information’, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance.
Responsibility of the Management and Those Charged with Governance for the Financial Statements
The Management is responsible for the preparation and fair presentation of the financial statements in accordance with
Nepal Financial Reporting Standards and for such internal control as the Management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing the Bank’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Management either intends to liquidate the Bank or to cease operations or has no realistic alternative but to do so.
Those charged with Governance are responsible for overseeing the Bank’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit conducted in accordance with NSAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.

Independent Auditor’s Report
As part of an audit in accordance with NSAs, we exercise professional judgement and maintain professional skepticism
throughout the audit. We also:
Auditor’s Report
• Identify and assess the risk of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Bank’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Management.
• Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Bank to cease to continue as a going concern.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the Key Audit Matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on the requirements of Banks and Financial Institutions Act, 2073 and Company Act, 2063
We have obtained satisfactory information and explanations asked for, which to the best of our knowledge and belief were
necessary for the purpose of our audit; the returns received from the branch offices of the Bank, though the statements are
independently not audited, were adequate for the purpose of the audit; the financial statements including the statement of
financial position, statement of profit or loss, statement of comprehensive income, statement of changes in equity, statement
of cash flows including a summary of significant accounting policies and other explanatory notes have been prepared in all
material respect in accordance with the provisions of the Company Act, 2063, and they are in agreement with the books of
accounts of the Bank; and the accounts and records of the Bank are properly maintained in accordance with the prevailing laws.
To the best of our information and according to the explanations given to us, in the course of our audit, we observed that the
loans have been written off as specified; the business of the Bank was conducted satisfactorily, and the Bank’s transactions were
found to be within the scope of its authority. We did not come across cases of accounting related fraud and the cases where the
Board of Directors or any director or any office bearer of the Bank has acted contrary to the provisions of law or caused loss or
damage to the Bank or committed any misappropriation of the funds of Bank.
Sunir Kumar Dhungel

Managing Partner
S.A.R. Associates
Chartered Accountants
Place: Kathmandu, Nepal

Date: 30 October, 2023
UDIN: 231030CA00109IJuRT
61
FINANCIAL
STATEMENTS

Financial Statements
Consolidated Statement of Financial Position

As on 31 Ashadh 2080
Assets Note Current Year Previous Year
Cash and cash equivalent 4.1 16,961,548,093 19,139,900,106
Due from Nepal Rastra Bank 4.2 4,032,144,427 2,380,225,869
Placement with Bank and Financial Institutions 4.3 6,940,365,177 2,567,372,453
Derivative financial instruments 4.4 8,182,017 22,003,204
Other trading assets 4.5
Loan and advances to B/FIs 4.6 16,830,212,730 10,217,345,818
Loans and advances to customers 4.7 77,831,302,936 79,197,404,216
Investment securities 4.8 26,362,128,243 7,910,850,201
Current tax assets 4.9 152,504,058 113,132,554
Investment in subsidiaries 4.10
Investment in associates 4.11
Investment property 4.12
Property and equipment 4.13 568,144,309 612,939,813
Goodwill and Intangible assets 4.14
Deferred tax assets 4.15 10,313,158 51,174,308
Other assets 4.16 1,681,164,252 1,143,361,945
Total Assets 151,378,009,400 123,355,710,487
63
Continued
Liabilities Note Current Year Previous Year

Due to Bank and Financial Institutions 4.17 4,992,295,339 8,223,667,337
Due to Nepal Rastra Bank 4.18 514,986,268
Derivative financial instruments 4.19 88,848,457 185,476
Deposits from customers 4.20 117,500,977,420 93,721,916,376
Borrowing 4.21 2,630,600,000
Current Tax Liabilities 4.9
Provisions 4.22
Deferred tax liabilities 4.15
Other liabilities 4.23 3,528,729,099 2,759,852,645
Debt securities issued 4.24 2,493,868,274
Subordinated Liabilities 4.25
Total liabilities 131,235,318,589 105,220,608,102
Equity
Share capital 4.26 9,429,453,895 9,429,453,895
Share premium
Retained earnings 2,710,555,600 2,197,903,017
Reserves 4.27 8,002,681,317 6,507,745,473
Total equity attributable to equity holders 20,142,690,811 18,135,102,385
Non-controlling interest
Total equity 20,142,690,811 18,135,102,385
Total liabilities and equity 151,378,009,400 123,355,710,487
Contingent liabilities and commitment 4.28 117,213,874,842 93,432,936,334
Net assets value per share 213.61 192.32
Md Yasir Arafin Anirvan Ghosh Dastidar Rino Santodiono Dono Seputro Zarin Daruwala
Chief Financial Officer Chief Executive Officer Director Chairperson
& Director
As per our report of even date
Avinash Agrawal Siddhant Raj Pandey CA Sunir K Dhungel

Director Director Managing Partner
S.A.R. Associates
Date: 30 October 2023 Place: Kathmandu Chartered Accountants

Consolidated Statement of Profit or Loss

For the year ended 31 Ashadh 2080
Particulars Note Current Year Previous Year
Interest income 4.29 12,744,038,318 7,527,920,105
Interest expense 4.30 6,788,013,158 3,787,458,004
Net interest income 5,956,025,161 3,740,462,101
Fee and commission income 4.31 1,475,463,094 989,622,216
Fee and commission expense 4.32 191,529,486 56,977,277
Net fee and commission income 1,283,933,608 932,644,939
Net interest, fee and commission income 7,239,958,769 4,673,107,040
Net trading income 4.33 582,147,329 657,438,566
Other operating income 4.34 20,448,426 2,920,598
Total operating income 7,842,554,524 5,333,466,204
Impairment charge/(reversal) for loans and other 4.35 598,246,140 134,306,886
losses
Net operating income 7,244,308,384 5,199,159,318
Operating expense
Personnel expenses 4.36 1,542,790,061 1,267,997,121
Other operating expenses 4.37 571,025,784 542,074,379
Depreciation & Amortisation 4.38 158,784,841 148,642,596
Operating Profit 4,971,707,697 3,240,445,221
Non operating income 4.39 7,448,230
Non operating expense 4.40 19,539,160 8,490,203
Profit before income tax 4,959,616,767 3,231,955,019
Income tax expense 4.41 1,494,286,792 976,020,692
Current Tax 1,495,880,480 1,019,487,612
Deferred Tax (1,593,689) (43,466,920)
Profit for the period 3,465,329,975 2,255,934,327
Profit attributable to:
Equity holders of the Bank 3,465,329,975 2,255,934,327
Profit for the period 3,465,329,975 2,255,934,327
Earnings per share
Basic earnings per share 36.75 23.92
Diluted earnings per share 36.75 23.92
Chief Financial Officer Chief Executive Officer & Director Chairperson
Director
CA Sunir K Dhungel
Avinash Agrawal Siddhant Raj Pandey Managing Partner
Director Director S.A.R. Associates
Date: 30 October 2023 Place: Kathmandu
65
Consolidated Statement of Other Comprehensive
Income
Particulars Note Current Year Previous Year
Profit for the year 3,465,329,975 2,255,934,327
Other comprehensive income, net of income tax
a) Items that will not be reclassified to profit or loss
Gain/(losses) from investments in equity instruments measured 148,217,748 (156,332,881)
at fair value
Gains/(losses) on revaluation
Actuarial gains/(losses) on defined benefit plans (6,701,620) 63,755,460
Income tax relating to above items (42,454,838) 27,773,226
Net other comprehensive income that will not be reclassified to 99,061,289 (64,804,195)
profit or loss
b) Items that are or may be reclassified to profit or loss
Exchange gains/(losses) (arising from translating financial
assets of foreign operation)
Income tax relating to above items
Reclassify to profit or loss
Net other comprehensive income that are or may be reclassified
to profit or loss
c) Share of other comprehensive income of associate accounted
as per equity method
Other comprehensive income for the period, net of income tax 99,061,289 (64,804,195)
Total comprehensive income for the year 3,564,391,264 2,191,130,132
Total comprehensive income attributable to:
Equity holders of the Bank 3,564,391,264 2,191,130,132
Total comprehensive income for the period 3,564,391,264 2,191,130,132
& Director
Avinash Agrawal Siddhant Raj Pandey CA Sunir K Dhungel

Director Director Managing Partner
S.A.R. Associates
Date: 30 October 2023 Place: Kathmandu Chartered Accountants

Consolidated Statement of changes in Equity
For the year ended 31 Ashadh 2080 Attributable to equity holders of the Bank
Share Capital Share General Exchange Regulatory Fair value Revaluation Retained Other reserve Total Non- Total equity
premium reserve equalisation reserve reserve Reserve earning controlling
reserve interest
Balance at 1 Shrawan, 2078 8,572,230,813 4,784,005,765 537,515,225 404,901,071 356,823,373 1,776,753,263 (210,111,359) 16,222,118,151 16,222,118,151
Adjustment/Restatement (15,835,636) (15,835,636) (15,835,636)
Adjusted/Restated balance at 8,572,230,813 4,784,005,765 537,515,225 404,901,071 356,823,373 1,760,917,627 (210,111,359) 16,206,282,515 16,206,282,515
1 Shrawan, 2078
Comprehensive income for the year
Profit for the year 2,255,934,327 2,255,934,327 2,255,934,327
Other comprehensive income, net

of tax
Gain/(losses) from investments in (109,433,017) (109,433,017) (109,433,017)

equity instruments measured at
fair value
Actuarial gains/(losses) on 44,628,822 44,628,822 44,628,822

defined benefit plans
Gains/(losses) on cash flow hedge
Exchange gains/(losses) (arising

from translating financial assets of
foreign operation)
Total comprehensive income for the (109,433,017) 2,255,934,327 44,628,822 2,191,130,132 2,191,130,132
year
Transfer to reserve during the year 451,186,865 225,669,384 (699,415,593) 22,559,343
Transfer from reserve during the year
Transactions with owners, directly

recognised in equity
Share issued
Share based payments
Dividends to equity holders
Bonus shares issued 857,223,081 (857,223,081)
Cash dividend paid (262,310,263) (262,310,263) (262,310,263)
Others
Total contributions by and distributions 857,223,081 (1,119,533,344) (262,310,263) (262,310,263)
Balance at Ashadh end 2079 9,429,453,895 5,235,192,630 537,515,225 630,570,455 247,390,356 2,197,903,017 (142,923,194) 18,135,102,385 18,135,102,385
67
68
Continued
Balance at 1 Shrawan 2079 9,429,453,895 5,235,192,630 537,515,225 630,570,455 247,390,356 2,197,903,017 (142,923,194) 18,135,102,385 18,135,102,385
Adjustment/Restatement
Adjusted/Restated balance at 1 9,429,453,895 5,235,192,630 537,515,225 630,570,455 247,390,356 2,197,903,017 (142,923,194) 18,135,102,385 18,135,102,385
Shrawan 2079
Comprehensive income for the

year
Profit for the year 3,465,329,975 3,465,329,975 3,465,329,975
Other comprehensive income,

net of tax
Gain/(losses) from 103,752,423 103,752,423 103,752,423

investments in equity
instruments measured at fair
value
Actuarial gains/(losses) on (4,691,134) (4,691,134) (4,691,134)

defined benefit plans
Gains/(losses) on cash flow

hedge
Exchange gains/(losses)
(arising from translating
financial assets of foreign
operation)
Total comprehensive income for 103,752,423 3,465,329,975 (4,691,134) 3,564,391,264 3,564,391,264
the year
Transfer to reserve during the year 693,065,995 4,494,832 206,219,771 (1,418,433,898) 514,653,300
Transfer from reserve during the 22,559,343 (22,559,343)

year
Standard Chartered Bank Nepal Limited - Annual Report 2022-23

Transactions with owners, directly
recognised in equity
Share issued
Share based payments
Dividends to equity holders
Bonus shares issued
Cash dividend paid (1,556,802,838) (1,556,802,838) (1,556,802,838)
Others
Total contributions by and (1,556,802,838) (1,556,802,838) (1,556,802,838)

distributions
Balance at Ashadh end 2080 9,429,453,895 5,928,258,625 542,010,057 836,790,226 351,142,780 2,710,555,600 344,479,629 20,142,690,811 20,142,690,811
Consolidated Statement of Cash Flows

Particulars Current Year Previous Year
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received 12,383,891,072 7,194,432,316
Fees and other income received 1,133,255,557 1,059,503,647
Divided received
Receipts from other operating activities 589,517,601 657,108,051
Interest paid (6,534,850,728) (3,415,590,998)
Commission and fees paid (49,798,640) (50,208,717)
Cash payment to employees (1,289,662,485) (1,203,614,185)
Other expense paid (566,448,129) (538,228,307)
Operating cash flows before changes in operating assets and 5,665,904,248 3,703,401,808
liabilities
(Increase)/Decrease in operating assets (11,618,979,241) (20,698,035,542)

Due from Nepal Rastra Bank (1,651,918,557) (143,743,576)
Placement with bank and financial institutions (4,372,992,724) (2,567,372,453)
Other trading assets 13,821,188 (21,730,681)
Loan and advances to bank and financial institutions (6,696,171,412) (1,165,773,532)
Loans and advances to customers 831,698,436 (16,917,511,804)
Other assets 256,583,828 118,096,504
Increase/(Decrease) in operating liabilities 22,806,753,257 6,290,326,521

Due to bank and financial institutions (3,231,371,998) (202,782,659)
Due to Nepal Rastra Bank (514,986,268) (106,524,732)
Deposit from customers 23,779,061,044 6,157,696,693
Borrowings 2,630,600,000
Other liabilities 143,450,479 441,937,219
Net cash flow from operating activities before tax paid 16,853,678,263 (10,704,307,214)
Income taxes paid (1,535,251,985) (1,007,897,406)
Net cash flow from operating activities 15,318,426,278 (11,712,204,620)
69
Continued
CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of investment securities (18,303,060,294)
Receipts from sale of investment securities 4,749,156,916
Purchase of property and equipment (112,987,060) (484,073,533)
Receipt from the sale of property and equipment
Purchase of intangible assets
Receipt from the sale of intangible assets
Purchase of investment properties
Receipt from the sale of investment properties
Interest received
Dividend received 1,466,819 5,359,320
Net cash used in investing activities (18,414,580,535) 4,270,442,702
CASH FLOWS FROM FINANCING ACTIVITIES

Receipt from issue of debt securities 2,400,000,000
Repayment of debt securities
Receipt from issue of subordinated liabilities
Repayment of subordinated liabilities
Receipt from issue of shares
Dividends paid (1,500,177,087) (272,464,312)
Interest paid
Other receipt/payment
Net cash from financing activities 899,822,913 (272,464,312)
Net increase (decrease) in cash and cash equivalents (2,196,331,343) (7,714,226,229)

Cash and cash equivalents at 1 Shrawan 19,139,900,106 26,856,975,057
Effect of exchange rate fluctuations on cash and cash equivalents 17,979,330 (2,848,722)
held
Cash and cash equivalents at Ashadh end 2080 16,961,548,092 19,139,900,106
& Director
CA Sunir K Dhungel

Notes to the Consolidated Financial Statements

For the year ended 31 Ashadh, 2080
1. Reporting Entity
Standard Chartered Bank Nepal Limited (SCBNL or “the Bank”) has been in operation in Nepal since 1987. The Bank is an integral
part of Standard Chartered Group, which holds 70.21% in the company with remaining 29.79% owned by the Nepalese public.
The Bank is registered with the Office of Company Registrar in Nepal as a public limited company and is listed on the Nepal Stock
Exchange. The registered head office of the Bank is in New Baneshwor, Kathmandu, Nepal.
The Bank carries out commercial banking activities in Nepal under the license issued by Nepal Rastra Bank (The Central Bank of
Nepal).
The Bank offers a full range of banking products and services to a wide range of clients encompassing individuals, mid-market,
local corporate, multinationals, large public sector companies, government corporations, airlines and hotels, as well as the DO
segment comprising of embassies, aid agencies, INGOs and NGOs.
2. Basis of Preparation
The financial statements of the Bank have been prepared on a going concern basis and in accordance with Nepal Financial
Reporting Standards (NFRS) published by Accounting Standards Board, Nepal (ASB Nepal) and pronounced by The Institute of
Chartered Accountants of Nepal (ICAN) and in the format prescribed by Directive 4 of NRB Directives, 2079 issued by Nepal
Rastra Bank. The financial statements comprise of Statement of Financial Position, Statement of Profit or Loss (including
Other Comprehensive Income, Statement of Change in Equity, Cash flow Statement, significant Accounting Policies, and other
explanatory notes.
2.1 Statement of Compliance

The financial statements have been prepared under historical cost convention except where the standards require treatment
otherwise. The financial statements have been approved by the Board of Directors in accordance with Nepal Financial Reporting
Standards (NFRS) with allowed carve-outs as published by the Accounting Standards Board, Nepal (ASB Nepal) and pronounced
by The Institute of Chartered Accountants of Nepal (ICAN).
2.2 Reporting Period and Approval of Financial Statements

The Bank follows the Nepalese financial year based on the Nepalese calendar. The corresponding dates for the English calendar
are as follows:
Relevant Financial Statement Nepalese Calendar Date / Period English Calendar Date / Period
Comparative SFP* Date 32 Ashadh 2079 16 July 2022
Comparative reporting Period 1 Shrawan 2078 - 32 Ashadh 2079 16 July 2021 - 16 July 2022
NFRS SFP* Date 31 Ashadh 2080 16 July 2023

NFRS reporting period 1 Shrawan 2079 - 31 Ashadh 2080 17 July 2022 - 16 July 2023
* SFP = Statement of Financial Position
These financial statements for the year ended 31 Ashadh, 2080 have been approved by the Board of Directors in its meeting held
on 30 October 2023 and have been recommended for approval by Nepal Rastra Bank and shareholders in the Annual General
Meeting.
Comparative reporting period figures have been restated/reclassified wherever necessary by the standards/regulations and/or
for better presentation which has been disclosed separately if any.
2.3 Functional and Presentation Currency

The financial statements are presented in Nepalese Rupees (NPR), which is the Bank’s functional currency. The figures are rounded
to the nearest Rupee unless otherwise indicated.
2.4 Use of Estimates, Assumptions and Judgements

The Management of the Bank, makes accounting judgements, estimates and assumptions which have an impact on the reported
amounts of assets, liabilities, income and expenses on the financial statements. NFRS requires the Bank to exercise judgement in
making accounting estimates. The Management believes that these estimates and assumptions are reasonable and prudent.
These estimates and assumptions are reviewed on an ongoing basis. The significant accounting policies that relate to the financial
statements along with the judgements made are described herein.
Where an accounting policy is generally applicable to a specific item, the policy is described within that relevant note. Description
of such estimates has been given in the relevant sections wherever they have been applied.
71
2.5 Changes in Accounting Policies
The Bank applies its accounting policies consistently from year to year, and changes required by accounting standards, if any, have
been explicitly disclosed.
2.6 New Standards in issue but not yet effective

A number of new standards and amendments to the existing standards and interpretations have been issued by IASB after the
pronouncements of IFRS with varying effective dates. Those become applicable when ASB Nepal incorporates them within NFRS.
NFRS9 has been applicable from the annual period beginning on or after 16 July, 2020. The Bank is following all the provisions
of NFRS9 except impairment requirements of the standard, for which the carve-out pronounced by ICAN till FY 2080-81 is being
adhered to.
2.7 New Standards and Interpretation not Adapted

All accounting standards along with carve-outs, developed by Nepal Accounting Standards Board, Nepal (ASB Nepal) and
pronounced by The Institute of Chartered Accountants of Nepal (ICAN) where applicable, have been incorporated.
2.8 Discounting
The Bank considers discounting of assets and liabilities where realisation or obligation is above one year, and the impact of the
discounting is material. The determination of discount rate where applicable considers various internal and external factors guided
by requirement of relevant accounting standards.
3. Significant Accounting Policies

3.1 Basis of Measurement
Financial Statements of the Bank have been prepared on historical cost convention, and modified where required to include fair
valuation as required by NFRS and relevant accounting policies.
3.2 Basis of Consolidation
a. Business Combinations
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Bank. The cost of an acquisition
is measured as the fair value of the assets given; equity instruments issued, and liabilities incurred or assumed at the date of
exchange, together with the fair value of any contingent consideration payable. The excess of the cost of acquisition over the
fair value of the Bank’s share of the identifiable net assets and contingent liabilities acquired is recorded as goodwill. If the cost
of acquisition is less than the fair value of the net assets and contingent liabilities of the subsidiary acquired, the difference is
recognised directly in the income statement.
The Bank does not have any subsidiary to report.
b. Non-Controlling Interest (NCI)

Non-controlling interests are measured either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s
identifiable net assets.
c. Subsidiaries
Subsidiaries are all entities, including structured entities, controlled by the Bank. The Bank controls an entity when it is exposed
to, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the investee. The assessment of power is based on the Bank’s practical ability to direct the relevant activities of the
entity unilaterally for the Bank’s own benefit and is subject to reassessment if and when one or more elements of control change.
Subsidiaries are fully consolidated from the date on which the Bank effectively obtains control. Upon loss of control, the Bank stops
consolidation and where any interest in the subsidiary remains, then such interest is measured to its fair value at the date control
is lost and the change in carrying amount is recognised in the income statement.
d. Loss of Control
The Bank does not have any subsidiary, hence not applicable to the Bank.
e. Special Purpose Entity (SPE)

A Special Purpose Entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding
who controls the entity. Contractual arrangements determine the rights and therefore relevant activities of the Special Purpose
Entity. They are generally created to achieve a narrow and well-defined objective with restrictions around their activities. They
are consolidated when the substance of the relationship between the Bank and the Special Purpose Entity indicates the Bank has
power over the contractual relevant activities of the Special Purpose Entity, is exposed to variable returns, and can use that power
to affect the variable return exposure.
The Bank does not have any Special Purpose Entity.
f. Transaction Elimination on Consolidation

The Bank does not have any subsidiary, hence no consolidation of financial statements and resulting transaction elimination.

3.3 Cash and Cash Equivalent

Cash & cash equivalent includes cash-in-hand balances with other banks and financial institutions, money at call and short notice,
and highly liquid financial assets with original maturities of three months or less from the acquisition date, with an insignificant risk
of changes in their fair value.
Explanatory Notes
Cash and cash equivalent reported under schedule 4.1 includes Money at call and short notice which comprises of interbank
lending to Group entities payable on demand with a tenure of maximum seven days.
Others in cash and cash equivalent comprise of balance with NRB above Cash Reserve Ratio (CRR).
3.4 Financial Assets and Financial Liabilities
3.4.1 Recognition
All financial instruments are initially recognised at fair value, which is normally the transaction price, plus directly attributable
transaction costs for financial assets which are not subsequently measured at fair value through profit or loss. Purchases and sales
of financial assets and liabilities held at fair value through profit or loss, and debt securities classified as financial assets held at
fair value through other comprehensive income are initially recognised on the trade date (the date on which the Bank commits to
purchase or sell the asset). Loans and advances and other financial assets held at amortised cost are recognised on the settlement
date (the date on which cash is advanced to the borrowers).
3.4.2 Classification & Measurement

The Bank classifies its financial assets as per NFRS9 into the following categories: amortised cost; fair value through other
comprehensive income (FVOCI); and fair value through profit or loss (FVTPL). Financial liabilities are classified as held at amortised
cost or held at fair value through profit or loss. The Management determines the classification of its financial assets and liabilities
at initial recognition of the instrument or, where applicable, at the time of reclassification.
Financial assets held at amortised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cashflows that are solely
payments of principal and interest (SPPI) characteristics. Principal is the fair value of the financial asset at initial recognition but this
may change over the life of the instrument as amounts are repaid. Interest consists of consideration for the time value of money,
for the Credit Risk associated with the principal amount outstanding during a particular period and for other basic lending risks
and costs, as well as a profit margin. In assessing whether the contractual cashflows have SPPI characteristics, the Bank considers
the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cashflows such that it would not meet this condition.
Whether financial assets are held at amortised cost or at FVOCI depends on the objectives of the business models under which
the assets are held. A business model refers to how the Bank manages financial assets to generate cashflows. The Bank makes
an assessment of the objective of a business model in which an asset is held at the individual product business line, and, where
applicable, within business lines depending on the way the business is managed, and information is provided to Management.
Financial assets which have SPPI characteristics and that are held within a business model whose objective is to hold financial
assets to collect contractual cashflows (hold to collect) are recorded at amortised cost. Conversely, financial assets which have
SPPI characteristics but are held within a business model whose objective is achieved by both collecting contractual cashflows and
selling financial assets (Hold to collect and sell) are classified as held at FVOCI.
Both hold to collect and hold to collect and sell business models involve holding financial assets to collect the contractual cashflows.
However, the business models are distinct by reference to the frequency and significance that asset sales play in meeting the
objective under which a particular group of financial assets is managed. Hold to collect business models are characterised by
asset sales that are incidental to meeting the objectives under which a group of assets is managed. Sales of assets under a hold
to collect business model can be made to manage increases in the credit risk of financial assets but sales for other reasons should
be infrequent or insignificant.
Equity instruments designated as held at FVOCI

Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated at initial
recognition as held at FVOCI on an instrument-by-instrument basis. Dividends received are recognised in profit or loss. Gains and
losses arising from changes in the fair value of these instruments, are recognised directly in equity and are never reclassified to
profit or loss, even on derecognition.
Financial assets and liabilities held at fair value through profit or loss
Financial assets which are not held at amortised cost or which are not held at FVOCI are held at fair value through profit or loss.
Financial assets and liabilities held at fair value through profit or loss are either mandatorily classified fair value through profit or
loss or irrevocably designated at fair value through profit or loss at initial recognition.
Mandatorily classified at fair value through profit or loss

Financial assets and liabilities which are mandatorily held at fair value through profit or loss are split between two subcategories
as follows:
73
Trading, including:
• Financial assets and liabilities held for trading, which are those acquired principally for the purpose of selling in the short-term
• Derivatives
Designated at fair value through profit or loss
Financial assets and liabilities may be designated at fair value through profit or loss when the designation eliminates or significantly
reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities on a different
basis (‘accounting mismatch’).
Financial liabilities may also be designated at fair value through profit or loss where they are managed on a fair value basis or
have an embedded derivative where the Bank is not able to bifurcate and separately value the embedded derivative component.
Financial liabilities held at amortised cost
Financial liabilities that are not financial guarantees or loan commitments and that are not classified as financial liabilities held at
fair value through profit or loss are classified as financial liabilities held at amortised cost.
Subsequent measurement
Financial assets and financial liabilities held at amortised cost
Financial assets and financial liabilities held at amortised cost are subsequently carried at amortised cost using the effective
interest method. Foreign exchange gains and losses are recognised in the income statement.
Financial assets held at FVOCI

Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses arising from changes in
fair value recognised in other comprehensive income and accumulated in a separate component of equity.
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses arising from
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity. On
derecognition, the cumulative reserve is transferred to retained earnings and is not recycled to profit or loss.
Financial assets and liabilities held at fair value through profit or loss
Financial assets and liabilities mandatorily held at fair value through profit or loss and financial assets designated at fair value
through profit or loss are subsequently carried at fair value, with gains and losses arising from changes in fair value, including
contractual interest income or expense, recorded in the net trading income line in the profit or loss unless the instrument is part of
a cashflow hedging relationship.
Financial liabilities designated at fair value through profit or loss

Financial liabilities designated at fair value through profit or loss are held at fair value, with changes in fair value recognised in the
net trading income line in the profit or loss, other than that attributable to changes in Credit Risk. Fair value changes attributable to
Credit Risk are recognised in other comprehensive income and recorded in a separate category of reserves, unless this is expected
to create or enlarge an accounting mismatch, in which case the entire change in fair value of the financial liability designated at
fair value through profit or loss is recognised in profit or loss.
3.4.3 De-recognition
Financial assets are derecognised when the right to receive cash flows from the assets have expired or where the Bank has
transferred substantially all risks and rewards of ownership. If substantially all the risks and rewards have been neither retained
nor transferred and the Bank has retained control, the assets continue to be recognised to the extent of the Bank’s continuing
involvement.
On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated
to the portion of the asset derecognised) and the sum of the consideration received (including any new asset obtained less any
new liability assumed) and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in
profit or loss, except for equity instruments elected FVOCI.
Financial liabilities are derecognised when they are extinguished. A financial liability is extinguished when the obligation is
discharged, cancelled or expired and this is evaluated both qualitatively and quantitatively.
3.4.4 Determination of Fair Value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date in the principal market for the asset or liability, or in the absence of a principal market, the
most advantageous market to which the Bank has access at the date. The fair value of a liability includes the risk that the Bank will
not be able to honour its obligations.
The fair value of financial instruments is generally measured on the basis of the individual financial instrument. However, when a
group of financial assets and financial liabilities is managed on the basis of its net exposure to either Market Risk or Credit Risk, the
fair value of the group of financial instruments is measured on a net basis.
The fair values of quoted financial assets and liabilities in active markets are based on current prices. A market is regarded as
active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an
ongoing basis. If the market for a financial instrument, and for unlisted securities, is not active, the Bank establishes fair value by
using valuation techniques.

Valuation hierarchy
Assets and liabilities carried at fair value or for which fair values are disclosed have been classified into three levels according to the
observability of the significant inputs used to determine the fair values. Changes in the observability of significant valuation inputs
during the reporting period may result in a transfer of assets and liabilities within the fair value hierarchy. The Bank recognises
transfers between levels of the fair value hierarchy when there is a significant change in either its principal market or the level
of observability of the inputs to the valuation techniques as at the end of the reporting period. The fair value hierarchy gives the
highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest
priority to unobservable inputs (Level 3 inputs).
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date. A quoted price in an active market provides the most reliable evidence of fair value and shall be used without
adjustment to measure fair value whenever available.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full
term of the asset or liability
Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs shall be used to measure fair value to the
extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity
for the asset or liability at the measurement date. However, the fair value measurement objective remains the same, i.e. an exit
price at the measurement date from the perspective of a market participant that holds the asset or owes the liability. Therefore,
unobservable inputs shall reflect the assumptions that market participants would use when pricing the asset or liability, including
assumptions about risk.
3.4.5 Impairment
The Bank has applied the impairment requirement of NAS 39 to financial assets measured at amortised cost. The Bank assesses
at the end of each reporting period whether there is any objective evidence that a financial assets or group of financial assets
measured at amortised cost has been impaired. If any such evidence exists, the Bank applies the “Incurred Loss Model” as required
by NAS 39 to calculate the impairment loss. However, as per the carve-out issued by ICAN, the Bank shall measure impairment loss
on loan and advances as the higher of amount derived as per norms prescribed by Nepal Rastra Bank for loan loss provision and
amount determined as per paragraph 63 of NAS 39.
Loan loss provisions are the Management’s best estimate of incurred loss in the loan portfolio at the balance sheet date, on both
individually and collectively assessed loans and advances.
The Bank assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial
assets is impaired. Some of the key factors to be considered in assessing objective evidence of impairment include whether the
counterparty is in default of principal or interest payments, where there is observable data indicating that there is measurable
decrease in the estimated future cash flows of a group of financial assets, when a restructuring of obligation is agreed, when a
counterparty files for Bankruptcy protection, etc.
For individually significant financial assets, we consider judgements that have an impact on the expected future cash flows of the
assets, which include the business prospects, industry and geopolitical climate, quality of realisable value of collateral, the legal
position relative to other claimants and any renegotiation options.
For financial assets which are not individually significant such as Retail Banking portfolio or small business loans, which comprise a
large number of homogenous loans that share similar characteristics, statistical estimates and techniques or models are used, as
well as credit scoring analysis. Further judgement is required to determine overlays on the models used.
The loan loss provisions are established to recognise incurred impairment losses either on specific loan assets or within a portfolio
of loans and advances. Provisions are taken in the form of:
a) Individually impaired provisions (IIP);
b) Portfolio impairment provisions (PIP), which is held to cover the inherent risk of losses in the portfolio that exist at the balance
sheet date, through experience, but have not yet been individually identified.
As on the reporting date, individual loan impairment provisions in CCIB (Corporate, Commercial and Institutional Banking) is
NPR15,317,456, whereas such provisions amounted to NPR144,004,078 in Consumer, Private and Business Banking (CPBB).
In CCIB, a loan is considered impaired or an IIP is recognised where analysis and review indicate that full payment of either interest
or principal, including timeliness of such payment is questionable or as soon as payment of interest or principal is 90 days overdue.
In CCIB, in cases of clients where the impairment assessment indicates that there will be a loss of principal, the loan is internally
graded CG 14 while other impairment loans will be graded CG 13. Loans graded CG 13 - CG 14 are classified as non-performing loans.
Such individually impaired accounts in CCIB are managed by an independent Stressed Asset Risk (SAR) unit. SAR will calculate an
IIP based on estimated cash flows revised to reflect anticipated recoveries.
75
The performing loan portfolio is subject to a Portfolio Impairment Provision (PIP) to cover latent losses, i.e. those that are not
specifically identified but are known, by experience, to be present in any performing portfolio. The PIP is based on models using risk
sizing (including probability of default and loss given default), environmental parameters and exceptional adjustment overlays.
For CCIB portfolio, the emergence risk factor is considered as three months for the calculation of PIP. An overlay in the form of
Specific Risk Adjustment (SRA) is added to the PIP calculation to take into account specific credit stress events not covered by the
baseline calculation.
In CPBB, a loan is considered impaired or an IIP is recognised when it meets certain defined threshold conditions in terms of overdue
payment (contractual impairment) or meets other objective conditions such as bankruptcy, debt restructuring, fraud or death. A
loan is considered delinquent (or past due) when the customer has failed to make a principal or interest payment in accordance
with the loan contract. The core components of IIP calculation are the value of gross charge off and recoveries. Gross charge off
and/or provisions are recognised when it is established that the account is unlikely to pay.
CPBB PIP covering the inherent losses in the portfolio that exist at the balance sheet date but have not been individually identified
is computed on performing loans (no IIP), using expected loss (EL) rates, to determine latent losses in the portfolio. The EL utilises
probability of default and loss given default inherent within the portfolio of impaired loans or receivables and the historical
loss experience for assets with credit risk characteristics. For mortgage, auto, personal loan and credit cards, PD percentage is
calculated using Was-Is model and for Business Banking, PD is correspondent to internal credit grading of the client.
Impairment provision as per “Incurred Loss Model” as per para 63 of NAS 39
Particulars Amount
Individual 159,321,534
PIP-CCIB 118,214,454
PIP-CPBB 152,580,684
Auto 32,205,659
Cards 7,964,455
Mortgage 14,967,930
Personal Loan 76,538,808
SME 20,671,834
WM 231,998
Total 430,116,672
Impairment provision as per norms prescribed by NRB directive 2
Category % Loan Amount* Provision Amount

Pass Loans #
1.3% 90,387,865,037 1,363,332,729
Watch List Loans 5% 3,507,451,151 174,919,477
Restructured Loans 12.5% 57,196,415 7,149,552
Substandard Loans 25% 450,614,249 112,653,562
Doubtful Loans 50% 177,926,486 88,963,243
Bad Loans 100% 489,269,838 462,253,712
Total 95,070,323,175 2,209,272,274
* Loan amount does not include staff loan, AIR, EIR & other NFRS adjustments.
100% provision has been made on few loans under pass category as per the NRB direction.
#
3.4.6 Financial Assets
Cash in hand
The fair value of cash is the carrying amount. Cash at vault is adequately insured for physical and financial risks. The amount
of cash at vault is maintained based on the regulatory, liquidity and business requirements. Cash held in FCY is subject to risk of
changes in the foreign exchange rates. These are closely monitored, and risks, if identified, are promptly managed.

Balance with BFIs & Central Bank

The fair value of balance with other Banks & financial institutions (BFIs) & Central Bank is the carrying amount. Risks associated
with these assets are regularly assessed. Balance with the central Bank is principally maintained as part of the regulatory cash
reserve ratio required by the Central Bank. There are regulatory and liquidity restrictions placed on the level of balance with the
Central Bank.
Money at Call & Short Notice & Interbank Placement

Placement with local and foreign BFIs including intergroup companies with maturity up to 7 days is included under money at call &
short notice. Interbank placement includes investment above 7 days with other local & foreign BFIs. The fair value of money at call
& short notice and interbank placement is the carrying amount. Risks associated with these assets are regularly assessed. These
are interest bearing placements and the income on these assets is credited to statement of profit or loss under interest income.
Placement with Banks and financial institutions include interbank lending & placement to Group companies having original
maturities of more than 90 days. As on the end of reporting period the Bank has made two deals on such placements to the inter
group companies.
Derivative financial instrument

Derivative financial instruments are initially measured at fair value on the contract date and are subsequently re-measured to fair
value at each reporting date. Accordingly, it has been measured at fair value through profit or loss.
Loans & Advances

This includes Loans & advances to BFIs, customers and staff. The fair value of loans & advances is the carrying amount using
effective interest rate method. Impairment on loans & advances is calculated at the higher of NRB Directive 2 and NAS 39. Loans
& advances is the summation of loan outstanding, accrued interest on these loans and other NFRS adjustments less unamortised
fee and unamortised deferred benefits, if any.
Loans and advances to BFIs does not include any unamortised cost because the portfolio consists of demand loan/working capital
loan and overdraft loan which are short term in nature. Loans and advances to customers include unamortised cost in the carrying
amount of the loan.
Explanatory Notes
Loans and advances to BFIs in schedule 4.6 comprise loans to microfinance and loans to other BFIs includes credit purchase by the
Bank.
Treasury bills & Government bonds

Treasury bills & Government bonds have been classified as financial assets measured at amortised cost. These instruments have
been considered as risk free instruments. These are highly liquid instruments and can be converted into cash immediately on
requirement.
Equity Investments
These include equity investments in four different companies. None of these investments result in control or significant influence
over the invested entities. These investments have been designated at fair value through other comprehensive income (FVTOCI)
as the Bank makes irrevocable election to measure it at FVTOCI with only dividend income recognised in profit or loss and are
not designated at fair value through profit or loss (FVTPL). The movement in fair value of these instruments have been adjusted
through other comprehensive income.
Investments in Karja Suchana Kendra Limited and Nepal Clearing House Ltd.
These investments have been made as a strategic investment to support the Bank’s operational requirement. Similar investments
in the companies have been made by other banks and financial institutions. Both of these investments are not actively traded in
the market, therefore not liquid. The Bank has no intention to dispose these investments in foreseeable future. The Bank considers
that the cash flows that it expects to receive in the future exceeds the carrying value of the investments. These investments have
been valued at net assets value based on latest available financial statements.
Grameen Bikas Laghubitta Bittiya Sanstha Limited (GBLBSL)

Equity investment in this institution is as a result of the Bank’s earlier investment in merged components of the new company,
namely in Purwanchal Grameen Bikas Bank Ltd. and Sudur Paschimanchal Grameen Bikas Bank Ltd. GBLBSL is the merged entity
of the five development banks. Investments in GBLBSL include 600 ordinary shares of NPR100 each fully paid up. Initial investments
in the erstwhile companies stood at NPR6,000,000. The decrease in the paid-up value was as a result of the poor performance of
those two companies and the agreed share exchange ratio in the merged entity. The Bank made these investments to comply with
the deprived sector lending requirement of the Central Bank.
Sana Kisan Bikas Laghubitta Bittiya Sanstha Limited (SKBBL)

Equity investment in this institution is as a result of the Bank’s earlier investment in RMDC Laghubitta Bittiya Sanstha Ltd. merged
with SKBBL during the FY. Investment in SKBBL includes 1,365,427 ordinary shares of NPR100 each fully paid up.
Karja Suchana Kendra Limited (KSKL)

Investment in KSKL includes 154,403 ordinary shares of NPR100 each fully paid up, including 142,048 bonus shares received by the
Bank.
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Nepal Clearing House Ltd. (NCHL)
Investment in NCH includes 130,562 ordinary shares of NPR100 each fully paid up including 105,562 bonus shares received by the
Bank.
SWIFT
As set in SWIFT by-laws, SWIFT shares are re-allocated at least every three years based on the financial contribution to SWIFT for
network-based services. The number of shares allocated to Standard Chartered Bank Nepal Limited is 1. The fair value of the same
is USD 8,429 i.e NPR1,106,981.
Fair Value Movement Equity Securities

Fair value movement of equity securities has been presented under schedule 4.8.3. Investment in quoted equity is valued at
closing market rate prevailing on the date of statement of financial position. Investment in promoter share below is valued at the
proportion of weighted average of promoter script to publicly traded script for the last one year as per level 2 input of valuation
hierarchy. The market price of the quoted equity as on the end of reporting period is presented below.
Investment in quoted equity Market Value Value Considered

Sana Kisan Bikas Laghubitta Bittiya Sanstha Limited 899 333.94
Grameen Bikas Laghubitta Bittiya Sanstha Ltd 633 261.28
Similarly, investment in unquoted equity is valued at net assets value (NAV) as per level 3 input of valuation hierarchy. The NAV of
unquoted equity as on the reporting period is as below:
Investment in unquoted equity NAV per share

Karja Suchana Kendra Limited 500
Nepal Clearing House Ltd. 177
Agriculture Bond
Agriculture bond issued by Agricultural Development Bank Limited has been classified as financial assets measured at amortised
cost.
Explanatory Notes
Investment securities include investment on equity shares, agriculture bond issued by Agricultural Development Bank Limited,
treasury bills with maturity greater than 90 days and reverse repo.
Other Assets
Other assets include financial assets like trade receivables, debtors etc. and excludes assets which are not financial instruments
like prepaid expenses, deferred revenue and assets which are not contractual in nature. The other assets that fall under the
classification of financial instruments are carried at amortised cost. These instruments are regularly monitored for impairment.
3.4.7 Financial Liabilities

All financial liabilities falling under the definition of financial instruments have been measured at amortised cost. Financial liabilities
include deposits from banks, customers, trade payables, creditors and other accruals. Financial liabilities do not include liabilities
which are not contractual in nature and which do not involve transfer of financial assets.
3.5 Trading Assets

Trading assets are those assets that the Bank acquires and holds principally for the purpose of selling in the near term or as part
of a portfolio that is managed together for short-term profit. It includes non-derivative financial assets, Government bonds, NRB
bonds, Domestic Corporate bonds, Treasury bills, Equities, etc. held primarily for trading purpose.
Explanatory Notes
The Bank does not have any trading assets.
3.6 Derivative Assets and Derivative Liabilities

Derivative assets and liabilities (herein referred to as instrument) is a contract whose value changes to the change in agreed-upon
underlying financial asset/liability which requires no initial net investment and is settled at future date. Derivative instruments
include transactions like interest rate swap, currency swap, forward foreign exchange contract etc. held for trading as well as
risk management purposes. Derivative financial instruments are initially measured at fair value on the contract date and are
subsequently re-measured at each reporting date to fair value through profit or loss (FVTPL).
3.7 Property & Equipment

Accounting, recognition & measurement of property and equipment is done as per NAS 16. Land and buildings comprise branches
and offices. All property, plant and equipment are recognised at cost less accumulated depreciation and impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of the assets.

Subsequent expenditure is included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits from the expenditure will flow to the Bank and can be measured reliably. Ongoing repairs
and maintenance are charged to the statement of profit or loss during the financial period in which they are incurred. Any gain or
loss on disposal of an item of property and equipment is recognised within other operating income in the statement of profit or loss.
Depreciation
Freehold land is not depreciated although it is subject to impairment testing. Depreciation on other assets is calculated using the
straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:
Buildings up to 50 years
Machineries up to 3 years
Leasehold improvements life of the lease period
Furniture and Fixtures up to 3 years
Computers and Office Equipment up to 3 years
Motor Vehicles up to 6 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date.
The value of the assets fully depreciated but which continue to be in use is considered not material.
De-recognition
At each reporting date, assets are also assessed for indicators of impairment. The carrying amount of PPE is derecognised on
disposal or when no future economic benefits are expected from its use. When the carrying amount is determined to be greater
than the recoverable amount, the asset is written down to the recoverable amount.
Assets with costs less than NPR600,000 are charged off on purchase as revenue expenditure. Any gain or loss on disposal of an
item of property and equipment is recognised within other operating income in the statement of profit or loss.
Capital Work in progress

Cost of assets not ready for use are reported under capital work in progress.
3.8 Goodwill and Intangible Assets

Goodwill represents the residual of the cost of acquisition over the fair value of the identifiable net assets and contingents acquired.
Goodwill represents those intangibles that are not identifiable. Goodwill is allocated to a cash-generating unit (CGU), which may
be larger than the entity acquired, and is not amortised. It is assessed for impairment on an annual basis by comparing the present
value of the expected cash flows generated by the CGU to the carrying value of the net assets of that CGU (including the goodwill).
To the extent impairment is identified, this is charged to the income statement at that time.
Acquired Intangible Assets

Intangible assets are initially measured at fair value, which reflects market expectations of the probability that the future economic
benefits embodied in the asset will flow to the Bank, and are amortised on the basis of their expected useful lives.
Explanatory Notes
The Bank does not have goodwill and intangible assets.
Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. Costs associated with the development of software are capitalised where it is probable that it will generate future
economic benefits in excess of its cost. Computer software costs are amortised on the basis of expected useful life. Costs associated
with maintaining software are recognised as an expense as incurred.
At each reporting date, these assets are assessed for indicators of impairment. In the event that an asset’s carrying amount is
determined to be greater than its recoverable amount, the asset is written down immediately.
Software assets with costs less than NPR60,000,000 are charged off on purchases as revenue expenditure.
Amortisation:
Software is amortised using the straight-line method to allocate cost to the residual values over its estimated useful.
Explanatory Notes
The Bank has been operating on the software provided by its parent company, Standard Chartered Group. No cost has been
incurred by the Bank in procuring the software systems. The Bank pays for the maintenance of the system, when required and such
expenses are included in the periodic maintenance expenses charged to Statement of Profit or Loss.
79
3.9 Investment Property
An investment property is defined as property held by the Bank to earn rentals or for capital appreciation or both, rather than
own-occupied. It will not be held for consumption in the business operations and its disposal would not affect the operations of
the Bank. Investment properties are initially measured at cost, including transaction costs. Subsequently all investment properties
(without exception) are reported at fair value with any gains or losses in fair value reported in the income statement as they arise.
The fair value used is that which the property could be exchanged between knowledgeable, willing parties in an arm’s length
transaction and should reflect market conditions at the balance sheet date.
Explanatory Notes
The Bank does not have any investment property.
3.10 Income Tax
Current Tax
The accounting for taxes on income is as per NAS 12. Provision for current income tax is made in accordance with the provisions
of the prevailing Income Tax Act, 2058 and Rules including amendments thereon. The prevailing income tax rate (i.e. 30%) is used
for the determination of current tax payable (or recoverable) which is based on the taxable profit for the year and is recognised
as expense in the same period. Taxable profit differs from the profit reported in the statement of profit or loss, given different
treatment of expense and income as per Income Tax laws.
Current tax assets and liabilities have been shown separately on the face of statement of financial position. Banks have a legally
enforceable right to set off a current tax asset against a current tax liability as it relates to income taxes levied by the same
taxation authority and the taxation authority permits the Bank to make or receive a single net payment.

Explanatory Notes
Reconciliation between book profit & tax profit Amount in NPR
Profit as per statement of profit or loss 4,959,616,767
Add: Items disallowed or separately allowed
Depreciation as per book 77,517,635
Equipment & furniture charged to revenue considered separately 11,780,036
Repairs & Maintenance considered separately 17,325,688
Repairs & Maintenance considered separately 13,579,046
Gratuity Provision in books added back 39,043,797
Provision for Performance & Dashain Bonus 184,278,807
Provision for Leave 22,329,055
Statutory bonus out of dividend income - proportionate disallowance 146,682
Share issue charges 100,000
Lease Finance cost 26,095,015
Depreciation on Lease Assets 81,267,206
Leasehold As per IAS 17 5,134,724
Debenture issue expenses 4,562,119
CSR expenses 22,559,343
Less: Items allowed for tax purpose
Unamortised Processing fee (17,252,436)
Profit on sale of depreciable fixed assets considered separately (1,002,277)
Tax Depreciation claimed for leased assets & Software (23,317,084)
Tax Depreciation allowed from Pool of Asset Calculation (61,523,410)
Repairs & Maintenance Lease Assets (13,579,046)
Repairs & Maintenance on Fixed Assets from Pool of Asset Calculation (14,708,028)
Performance & Dashain Bonus payment (186,183,028)
Leave encashment (13,896,326)
Gratuity Payment and Contribution to SSF (47,368,871)
Dividend Income (1,466,819)
Actual Lease payment (98,770,326)
Total Taxable Adjustments in Profit 26,651,501
Taxable Profit 4,986,268,268
Tax @ 30% 1,495,880,480
Tax assessment Status

The Bank’s income tax assessments by the tax authorities are final and settled up to the income year 2015-16 (2072-73) and for
the income year 2017-18 (2074-75). For income year 2016-17 (2073-74) and 2018-19 (2075-76) the Bank has filed for Administrative
Review with Director General Inland Revenue Department on the assessment done by Large Taxpayer Office (LTPO). Assessment
for income year 2019-20, 2020-21 and 2021-22 have not yet been opened by tax authority.
Deferred Tax
Deferred tax is provided in full, using the balance sheet approach, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using
prevailing tax rate (i.e. 30%) applicable to the Bank as at the reporting date, which is expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled.
81
Deferred tax assets are recognised where it is probable that future taxable profit will be available against which the temporary
differences can be utilised. Current and deferred tax relating to items which are charged or credited directly to equity is subsequently
recognised in the statement of profit or loss together with the current or deferred gain or loss.
Explanatory Notes
Particulars Carrying Amount Tax Base Temporary Difference

Assets
Fixed Assets 215,846,890 342,066,995 126,220,105
Loans & Advances 96,870,787,940 96,949,312,059 78,524,119
Debenture issue expenses 4,657,119 4,657,119
Investment 557,618,043 55,985,500 (501,632,543)
Lease Property (Right of use assets) 352,297,419 502,867,050 150,569,631
Total Assets 97,996,550,292 97,854,888,723 (141,661,569)
Liabilities
Gratuity (72,689,554) (124,157,626) 51,468,072
Performance Bonus 97,254,487 97,254,487
Provision for leave 78,082,641 78,082,641
Lease Obligation 381,155,332 431,921,768 (50,766,435)
Total Liabilities 483,802,906 307,764,141 176,038,764
Tax Rate 30%
Net DTA/DTL 10,313,158
Opening DTA/DTL 51,174,308
Net difference (40,861,150)
P&L 1,593,689
Equity (OCI Items-FV loss & Actuarial loss) (141,516,128) (42,454,838)
3.11 Deposits, Debt Securities Issued and Subordinated Liabilities

The estimated fair value of deposits with no stated maturity period is the amount repayable on demand. The estimated fair value
of borrowings without quoted market prices is based on discounting cash flows using the prevailing market rates for debts with a
similar credit risk and remaining maturity period.
Deposits by banks
Deposits by banks comprise amounts owed to other domestic or foreign banks.
Customer accounts
Customer accounts comprise amounts owed to creditors that are not banks.
Deposits by banks & customers are financial liabilities as there is an obligation to deliver cash or financial assets back to the
depositing bank or customer and are initially recognised at fair value including transaction costs directly attributable to the
acquisition.
Debt securities and Subordinated debt

The Bank borrows money by issuing debt securities and subordinated debt. The borrowing is acknowledged or evidenced by issue
of a negotiable instrument. The negotiable instrument can be a certificate of deposit, commercial paper or debt note.
Subordinated debt is issued to meet the capital requirements at the Bank level and to supply the capital to various operations.
This debt generally consists of negotiable instruments and is usually listed on exchanges providing an active secondary market
for the debt.

Explanatory Notes
Total deposits including deposits by banks as on balance sheet data is NPR122.49 billion.
Type of Deposit Deposit Amount

Call 11,201,446,566
Current 27,839,620,153
Fixed 47,430,459,996
Margin 1,876,054,356
Saving 34,145,691,688
Total 122,493,272,759
The Bank does not have any debt securities and subordinated liabilities.
Debt Securities issued
The Bank has issued “10.30% Standard Chartered Bank Nepal Limited debenture” amounting to NPR2.4Bn with a maturity of
5 years and this is presented under this line item. The debenture issue expense has not been accounted as per amortised cost
considering it as immaterial. The Bank will create a debenture redemption reserve (DRR) of NPR480Mn every FY throughout the
tenure as below:
FY Debenture Redemption Reserve

2079/80 480,000,000
2080/81 480,000,000
2081/82 480,000,000
2082/83 480,000,000
2083/84 480,000,000
3.12 Provisions
Provisions are recognised when the Bank has a present legal or constructive obligation as a result of past events; it is more likely
than not that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. A provision
is a recognised obligation, which is relatively imminent, and is a reasonable estimate of that obligation at that time. The distinction
between an accrual and a provision is that an accrual can be calculated exactly, whereas a provision is the best estimate of the
obligation.
A commitment or contingency is a liability for which it is uncertain as to whether it will become an obligation as it depends on the
occurrence of an uncertain future event. These amounts are recorded off- balance sheet and generally comprise of documentary
credits, forward asset purchases and undrawn formal standby facilities (which may or may not be irrevocable).
Explanatory Notes
There are no provisions as on the Balance Sheet date. Contingent liabilities and commitments are reported under schedule 4.28.
3.13 Revenue Recognition

Interest Income
Interest income for financial assets held at either fair value through other comprehensive income or amortised cost, and interest
expense on all financial liabilities held at amortised cost is recognised in profit or loss using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of
allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that discounts
estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter
period, to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the
Bank estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but
does not consider future credit losses. The calculation includes all fees paid or received between parties to the contract that are
an integral part of the effective interest rate, transaction costs and all other premiums or discounts. Where the estimates of cash
flows have been revised, the carrying amount of the financial asset or liability is adjusted to reflect the actual and revised cash
flows, discounted at the instruments original effective interest rate. The adjustment is recognised as interest income or expense in
the period in which the revision is made.
After implementation of NFRS in banks and financial institutions, the basis of accounting of interest income has been changed
from cash basis to effective interest method. The effective interest method is a method of allocating the interest income over the
relevant period of the loans.
83
NRB has made a provision to allocate the differential interest income between two bases of accounting to the Regulatory Reserve
and retain it until the accrued interest is received. Hence, the amount transferred to the Regulatory Reserve is NPR203Mn. As per
Directive 4 issued by NRB such accrued interest received within 15 Shrawan, 2080 can be released from the Regulatory Reserve.
The Bank has not availed of this relief.
The Bank has no interest capitalisation during FY 2079-80 as per Directive 2 issued by NRB.
Interest suspension
NRB has issued guidelines on recognition of interest income in 2019 which requires suspension of interest by banks. The Criteria for
determining when interest income should be suspended or cease to accrue are as follows:
a. Loans where there is reasonable doubt about the ultimate collectability of principal or interest.
b. Loans against which individual impairment as per NAS 39 or life-time impairment as per NFRS9 has been made.
c. Loans where contractual payments of principal and/or interest are more than 3 months in arrears and where the “net realisable
value” of security is insufficient to cover payment of principal and accrued interest.
d. Loans where contractual payments of principal and/or interest are more than 12 months in arrears, irrespective of the net
realisable value of collateral.
e. Overdrafts and other short-term facilities which have not been settled after the expiry of the loan and not even renewed within
3 months of the expiry, and where the net realisable value of security is insufficient to cover the payment of principal and
accrued interest.
f. Overdrafts and other short-term facilities which have not been settled after the expiry of the loan and not even renewed within
12 months of the expiry, irrespective of the net realisable value of collateral.
The Bank is suspending interest income basis above NRB interest recognition guidelines and the Bank’s internal policy.
The Bank earns interest income from loans & advances and investments.
Explanatory Notes
Interest income for the reporting period is NPR12.74Bn which is presented under schedule 4.29.
Fee and Commission Income

Fees and commissions are generally recognised on an accrual basis when the service has been provided or a significant act
performed. Loan origination fees or other yield enhancing fees are integral part of the effective interest of Loans & Advances if the
expected term of contract is more than one year.
Explanatory Notes
Fees & Commission income for the reporting period is NPR1.48Bn which is presented under schedule 4.31.
Dividend Income
Dividend income received from equity shares is recognised in the books when the Bank’s right to receive the dividend is established.
Explanatory Notes
Dividend income for the period is NPR1.47Mn and reported under other operating income schedule 4.34.
Net Trading Income

Gains and losses arising from changes in the fair value of financial instruments held at fair value through profit or loss are recorded
in net trading income in the period in which they arise. Gain or loss on trading instruments are recognised in the income statement
on a mark-to-market basis and not on a cash basis.
Explanatory Notes
The Bank’s net trading income solely includes gain or loss arising from the settlement of transactions in foreign currency amounting
NPR582.15Mn reported under schedule 4.33.
Net Income from Other Financial Instrument at Fair Value Through Profit or Loss
At initial recognition, the Bank may choose to designate certain financial assets and liabilities as being held at fair value through
profit or loss (the fair value option). Realised and unrealised gain or loss on these instruments are reported through net trading
income.
Explanatory Notes
The Bank does not have net trading income from another financial instrument at FVTPL.
Other operating income

The Bank presents income other than those presented under interest income, fees and commission income and trading income
under this heading. Income recognised here includes items such as foreign exchange revaluation gain or loss; dividend on equity
investments that are measured at FVOCI; gain or loss on disposal of property and equipment.
Explanatory Notes
Other operating income for the period is NPR20.45Mn and reported under other operating income schedule 4.34.

3.14 Interest Expense

Interest expense on all financial liabilities is recognised in the statement of profit or loss using the effective interest method. Interest
expense is determined in a similar way to interest income, with interest expense incorporating contractual interest due, premiums
or discounts and any capitalisable fees and transaction costs such as origination fees or costs.
Explanatory Notes
Interest expense for the period is NPR6.79Bn and reported under other Interest expense schedule 4.30.
Current Year Previous Year

Fixed Deposits 4,345,201,019 1,955,709,143
Savings Deposits 2,019,377,894 1,595,689,141
Call Deposits 170,614,448 44,147,701
Borrowings 2,379,546 148,166,433
Others 250,440,251 43,745,586
Total 6,788,013,158 3,787,458,004
3.15 Employee Benefits

Employee benefits includes all forms of consideration given by an entity in exchange of service rendered by employees during the
term of employment. The Bank’s remuneration package includes both short term and long-term benefits and comprises of items
such as salary, allowances, paid leave, accumulated leave, gratuity, provident fund and annual statutory bonus.
3.15.1 Short term employee benefits

These are employee benefits which fall due wholly within twelve months in which the employees render the related service. This
includes salary, allowances, medical insurance, statutory bonus to employees, etc. These are measured on an undiscounted basis
and are charged to profit or loss over the period in which employees render services to which the payments relate.
The Bank provides Home loan, Auto loan & Personal loan to the staff as per staff by-laws. Staff loan is measured at amortised
cost using effective interest rate method and presented in loans and advances to customers under schedule 4.7. Benefits on loans
advanced to employees at below-market interest rate are amortised over the full period of the loan. Unamortised staff benefit
is the difference between the value of loan at carrying amount and present value of staff loan discounted at market rate and
presented in deferred employee expenditure under schedule 4.16.
Statutory staff bonus is provided at 10% of Net Profit before such bonus as per Bonus Act 2031 and tax as per Income Tax Act 2058.
In addition to statutory staff bonus, the Bank pays performance bonus to its staff in accordance with the overall performance
evaluation system. The Bank’s total reward consists of fixed and variable compensation. Performance bonus is a variable
component based on the Bank’s overall performance and the individual employee’s annual performance. Provision is made on
the basis of individual targets set and paid in line with the actual achievements. A total of NPR181Mn has been provided for the
performance bonus in this year.
Defined contribution plan and defined obligation

The Bank operates a defined contribution plan for provident fund contribution as a post retirement benefit for employees and
defined benefit plan for Gratuity payment as required by staff service by-laws.
For defined contribution plan, a fixed percentage of basic salary is contributed to the provident fund scheme managed by Social
Security Fund (SSF) and such amounts as contributed by the Bank are recognised as operating expenses. The Bank has no further
payment obligations once the contributions have been paid. The Bank started contributing to SSF under Contribution Based Social
Security Act, 2074 from Baishakh 2078. For current financial year such contribution amount is NPR27.95Mn.
Defined benefit plan

For funded defined benefit plan, the liability recognised in the balance sheet is the present value of the defined benefit obligation
at the balance sheet date less the fair value of plan assets. Such obligations are estimated on the basis of actuarial assumptions.
The Bank has been regularly funding such obligation to the Standard Chartered Bank Approved Retirement Fund. For the current
financial year the Bank has not made any contribution. Actual gratuity payment to retired employees during the year is NPR19.42
Mn.
The defined benefit obligation is calculated annually by independent actuaries using the projected unit method. Actuarial gain
or loss that arise due to re-measurement as at balance sheet date are recognised in shareholders’ equity and presented in the
statement of other comprehensive income in the period they arise. The Bank determines the net interest expense on the net
defined benefit liability for the year by applying the discount rate used to measure the defined benefit obligation at the beginning
of the annual period to the net defined benefit liability, taking into account any changes in the net defined benefit liability during
the year as a result of contributions and benefit payments. Net interest expense, the cost of the accrual of new benefits, benefit
enhancements (or reductions) and administration expenses met directly from plan assets are recognised in the income statement
in the period in which they were incurred.
As per the limit mentioned in para 62(b) of NAS 14, NPR1,502,963 has not been recognised as an Asset.
85
Significant accounting estimates and judgements
There are many factors that affect the measurement of the retirement benefit obligations. This measurement requires the use of
estimates, such as discount rates, inflation, salary increases, and life expectancies which are inherently uncertain. Discount rates
are determined by reference to market yields at the end of the reporting period on sovereign bonds with term consistent with the
term of the post-employment benefit obligations.
Leave benefit
The Bank has provided for accumulated annual and sick leave benefit to staff complying with the Labour Act, 2074. The liability
and expenses for accumulated leave is treated as long-term employee benefit in accordance with NAS 19 on Employee Benefits.
The Bank has started recognising leave liability on actuarial valuation basis from FY 2078-79.
Explanatory Notes
Employee benefit reported under schedule 4.36 includes provision for bonus as per bonus act.
Defined benefit obligations, plan assets, movement in present value of defined benefit obligation & fair value of assets, actuarial
assumptions related with long term employee benefits have been presented under schedule 4.23.
The various metrics used for calculation of amortised staff loan is presented below.
Total Staff Loan (NPR) 1,257,921,478

Unamortised staff benefits (NPR) 371,952,285
Amortised Staff Loan (NPR) 885,969,193
Particulars Home Loan Auto Loan Personal Loan

Original Average Tenure (Yrs) 21.06 6.67 4.91
Remaining Average Tenure (Yrs) 16.61 4.26 3.55
Interest Rate % 2.39 3.55 5.67
Market Rate 9.02 9.02 9.02
3.16 Leases
As per NFRS16 the Bank assesses whether a contract is a lease in scope by determining whether the contract gives it the right to use
a specified underlying physical asset for a lease term greater than 12 months, unless the underlying asset is of low value.
Where the Bank is a lessee and the lease is deemed in scope, it recognises a liability equal to the present value of lease payments
over the lease term, discounted using the incremental borrowing rate applicable in the economic environment of the lease as
estimated by the Group managed vendor system. The liability is recognised in ‘Other liabilities’. A corresponding right-of-use asset
equal to the liability, adjusted for any lease payments made at or before the commencement date, is recognised in ‘Property, plant
and equipment’. The lease term includes any extension options contained in the contract that the Bank is reasonably certain it will
exercise.
The Bank subsequently depreciates the right-of-use asset using the straight-line method over the lease term and measures the
lease liability using the effective interest method. Depreciation on the asset is recognised in ‘Depreciation and amortisation’, and
interest on the lease liability is recognised in ‘Interest expense’.
The Bank has applied NFRS16 effective FY 2078-79 for lease accounting and recognised the cumulative effect of initial application
of the standard as an adjustment to the opening balance of retained earnings as per clause C5 (b) of NFRS16. Short term leases or
leases for which the underlying asset is of low value, the lease payment associated with those leases are recognised as expense on
straight line basis over the lease term.
Significant judgements and estimates

The judgements in determining lease balances are the determination of whether the Bank is reasonably certain that it will exercise
extension options present in lease contracts. On initial recognition, the Bank considers a range of characteristics such as premises
function and the term remaining on the lease to determine whether it is reasonably certain that a contractual right to extend
a lease will be exercised. Where a change in assumption is ascertained, a remeasurement is performed in the Group-managed
vendor system.
The estimates were the determination of incremental borrowing rates in the given economic environment.
The Bank primarily enters lease contracts that grant it the right to use premises such as office buildings and retail branches.
Existing lease liabilities may change in future periods due to changes in assumptions or decisions to exercise lease renewal or
termination options, changes in payments due to renegotiations of market rental rates as permitted by those contracts. In general,
the re-measurement of a lease liability under these circumstances leads to an equal change to the right-of-use asset balance, with
no immediate effect on the income statement.

Explanatory Notes
Lease expenses are shown in schedule 4.37 under other operating expenses.
S. N Description Amount
a. depreciation charge for right-of-use assets by class of underlying asset 81,267,206
b. interest expense on lease liabilities 26,095,015
c. the expense relating to short-term leases accounted for applying paragraph 6. This 4,255,525
expense need not include the expense relating to leases with a lease term of one month or
less
d. the expense relating to low-value assets accounted for applying paragraph 6. This 8,161,383
expense shall not include the expense relating to short-term leases of low-value assets
included in paragraph 53(c)
e. the expense relating to variable lease payments not included in the measurement of lease
liabilities
f. income from subleasing right-of-use assets
g. total cash outflow for leases 98,770,326
h addition to right of use assets 85,947,000
i. gain or losses arising from sale and leaseback transaction
j. the carrying amount of right-of-use assets at the end of the reporting period by class of 352,297,419
underlying asset
3.17 Foreign Currency Translation

Foreign currency transactions are those conducted in a currency other than the functional currency of an entity. The functional
currency is the currency of the primary economic environment in which an entity operates. Foreign currency transactions are
translated into the functional currency using the exchange rates prevailing at the transaction date.
Foreign exchange gain or loss resulting from the settlement of such transactions, and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the statement of profit or loss.
Explanatory Notes
Foreign currency translation gain/loss is presented under schedule 4.34 other operating income. 25% of such revaluation gain (if
any) is transferred to foreign exchange fluctuation fund as per the requirement of NRB directive.
Foreign exchange revaluation gain/(loss) 17,979,330

25% of the gain transferred to foreign exchange fluctuation fund 4,494,832
3.18 Financial Guarantee and Loan Commitment

Financial guarantee contracts are contracts that require the Bank to reimburse the holder for a loss that it incurs if a specified
debtor fails to make payment on a debt instrument. A loan commitment is a firm commitment to provide credit under pre-specified
terms and conditions in the future.
Explanatory Notes
Financial guarantee is reported under schedule 4.28 contingent liabilities and commitments under the sub-heading “Guarantees”.
The Bank does not have any loan commitments that meets the definition of derivatives except the undrawn portion of overdrafts
and other loans.
3.19 Share Capital and Reserves

Financial instruments issued are classified as equity when there is no contractual obligation to transfer cash, other financial assets,
or issue available number of own equity instruments. Incremental costs directly attributable to the issue of new shares are shown
in equity as deduction net of taxes from the proceeds.
Dividends on ordinary shares and preference shares classified as equity are recognised in equity when declared by AGM.
87
Explanatory Notes
Details of share capital are reported under schedule 4.26. The details of shareholders holding more than 0.5% is presented below:
SN Shareholder Name Total Shareholdings Shareholder Percentage

1 Standard Chartered Grindlays Pty Ltd 44,136,338.69 46.81%
2 Standard Chartered Bank UK 22,068,169.35 23.40%
3 Shankar Lal Agrawal 620,089 0.66%
4 Sashi Agrawal 660,836 0.70%
5 Priyanka Agrawal 660,836 0.70%
6 Komal Agrawal 660,836 0.70%
7 Avinash Agrawal 660,836 0.70%
Proposed Distributions (Dividends and Bonus Shares)

The Board has recommended 19.00% cash dividend for the reported year, 2079-80. This proposal of the Board of Directors is
subject to approval by NRB and ratification by the annual general meeting of shareholders. The proposed distribution shall be
recognised in equity in the period in which they are ratified.
Reserves
The reserves include retained earnings, and other statutory reserves such as general reserve, exchange fluctuation reserve,
regulatory reserve and others. Reserves are listed under schedule 4.27.
3.19.1 General Reserve

There is a regulatory requirement by the Central Bank to set aside 20% of the net profit after tax every year as general reserve until
the reserve is twice the paid-up share capital and thereafter minimum 10% of the net profit. This reserve is the accumulation of
setting aside of profits over the years.
3.19.2 Exchange Fluctuation Fund

There is a regulatory requirement to set aside 25% of the foreign exchange revaluation gain on the translation of foreign currency
to the reporting currency. This reserve is the accumulation of such gains over the years.
3.19.3 Regulatory Reserve

There is a regulatory requirement to earmark and set aside amount of accrued interest receivable during the year, deferred tax
assets, actuarial gain/loss from retained earnings to regulatory reserves. Amount in this reserve account is not distributable unless
approved by the regulator.
Short
provision Fair Value
Short for possible Short Gain on Actuarial Loss
Interest loan loss losses on provision Deferred Bargain Loss Recognised
FY receivable provision investment on NBA Tax Assets Goodwill Purchase Recognised in OCI Others Total
2074/75 218,896,037 75,546,496 51,592,565 346,035,099
2075/76 65,873,565 (3,748,664) 49,955,116 112,080,017
2076/77 (4,073,829) (35,308,031) 75,817,713 36,435,854
2077/78 (65,840,222) (56,555,640) 32,745,964 (89,649,899)
2078/79 199,058,059 71,240,147 (44,628,822) 225,669,384
2079/80 203,122,325 (1,593,689) 4,691,134 206,219,771
Total 836,790,226
3.19.4 Corporate Social Responsibility Reserve

The Bank has a regulatory requirement to set aside 1% of net profit for Corporate Social Responsibility Reserve.
3.19.5 Fair Value Reserve

Fair Value Reserve is the difference between cost price and market value of equity investment as on the balance sheet date.
3.19.6 Movement in reserves

Movement in the reserves is detailed in Statement of Changes in Equity.

3.20 Earnings Per Share including Diluted

The Bank measures Earnings Per Share based on the earnings attributable to equity shareholders for the period. The number of
shares is taken as weighted average number of shares for the relevant period as required by NAS 33-Earnings per Share.
Explanatory Notes

Earning attributable to equity shareholders 3,465,329,975 2,255,934,327
Weighted average number of shares for the period 94,294,539 94,294,539
Earnings per share (NPR) 36.75 23.92
Adjustments for bonus issue
Adjusted Earnings per share (NPR) 36.75 23.92
There are no instruments, such as convertibles, that would require dilution of EPS, therefore diluted EPS is same as basic EPS.
3.21 Segment Reporting
The Bank is organised for management and reporting purposes into segments such as: Consumer, Private and Business Banking
(CPBB), Corporate, Commercial and Institutional Banking (CCIB) and Others. The products offered to these client segments are
summarised under ‘Income by product’ below. The focus is on broadening and deepening the relationship with clients, rather than
maximising a particular product line. Hence the Bank evaluates segmental performance based on overall profit or loss before
taxation (excluding corporate items not allocated) and not individual product profitability. Product revenue information is used as
a way of assessing client needs and trends in the marketplace. The strategies adopted by the client segments is adapted to local
market and regulatory requirements.
89
Cash and cash equivalent 4.1
Cash in hand 1,024,792,056 1,175,663,778

Balances with B/FIs 1,217,610,884 954,121,397
Money at call and short notice 6,504,258,400 12,694,904,000
Other 8,214,886,752 4,315,210,931
Total 16,961,548,093 19,139,900,106
Due from Nepal Rastra Bank 4.2

Statutory balances with NRB 4,032,144,427 2,380,225,869
Securities purchased under resale agreement
Other deposit and receivable from NRB
Total 4,032,144,427 2,380,225,869
Placements with Bank and Financial Institutions 4.3

Placement with domestic B/FIs
Placement with foreign B/FIs 6,940,365,177 2,567,372,453
Less: Allowances for impairment
Total 6,940,365,177 2,567,372,453
Derivative financial instruments 4.4

Held for trading 76,726
Interest rate swap
Currency swap
Forward exchange contract 76,726
Others
Held for risk management 8,182,017 21,926,479
Interest rate swap
Currency swap
Forward exchange contract 8,031,087 21,925,846
Other 150,929 633
Total 8,182,017 22,003,204

Other trading assets 4.5

Treasury bills
Government bonds
NRB Bonds
Domestic Corporate bonds
Equities
Other
Total
Pledged
Non-pledged
Loan and advances to B/FIs 4.6
Loans to microfinance institutions 4,631,338,819 4,217,702,667
Other 12,414,778,410 6,132,243,151
Less: Allowances for impairment (215,904,499) (132,600,000)
Total 16,830,212,730 10,217,345,818
4.6.1: Allowances for impairment

Balance at Shrawan 1 132,600,000 118,939,702
Impairment loss for the year:
Charge for the year 83,304,499 13,660,298
Recoveries/reversal
Amount written off
Balance at Ashadh end 215,904,499 132,600,000
Loans and advances to customers 4.7

Loan and advances measured at amortised cost 79,824,670,711 80,675,830,350
Less: Impairment allowances
Collective impairment (955,465,255) (982,303,065)
Individual impairment (1,037,902,520) (496,123,069)
Net amount 77,831,302,936 79,197,404,216
Loan and advances measured at FVTPL
Total 77,831,302,936 79,197,404,216
91
4.7.1: Analysis of loan and advances - By Product
Product
Term loans 15,786,503,946 11,674,766,987
Overdraft 12,276,243,290 11,447,879,743
Trust receipt/Import loans 5,814,421,671 7,459,331,043
Demand and other working capital loans 20,009,623,026 23,250,740,774
Personal residential loans 8,702,787,097 8,832,679,974
Real estate loans 7,498,472,870 7,418,434,012
Margin lending loans
Hire purchase loans 3,771,165,659 4,571,448,967
Deprived sector loans 137,002,542 137,002,542
Bills purchased 546,695,802 661,425,824
Staff loans 885,969,193 824,048,450
Other 1,861,074,555 2,412,585,988
Sub total 77,289,959,652 78,690,344,303
Interest receivable 541,343,284 507,059,913
Grand total 77,831,302,935 79,197,404,215
4.7.2: Analysis of loan and advances - By Currency

Nepalese rupee 76,190,163,772 77,707,169,053
Indian rupee
United State dollar 1,632,646,319 1,484,687,309
Great Britain pound 4,087,364 2,773,927
Euro 4,405,481 2,773,927
Japanese yen
Chinese yuan
Other
Total 77,831,302,935 79,197,404,216

4.7.3: Analysis of loan and advances - By Collateral

Secured
Movable/immovable assets 73,058,456,395 74,088,928,156
Gold and silver
Guarantee of domestic B/FIs 4,241,626 4,241,546
Government guarantee 137,015,852 137,215,506
Guarantee of international rated bank 1,057,378,454 1,251,681,663
Collateral of export document
Collateral of fixed deposit receipt 234,382,790 287,117,518
Collateral of Government securities
Counter guarantee
Personal guarantee
Other collateral 3,339,827,819 3,428,219,827
Subtotal 77,831,302,935 79,197,404,216
Unsecured
Grant Total 77,831,302,935 79,197,404,216
4.7.4: Allowances for impairment

Specific allowances for impairment

Balance at 1 Shrawan 496,123,069 597,401,497
Charge for the year 662,657,115
Recoveries/reversal during the year (120,877,664) (101,278,429)
Write-offs
Exchange rate variance on foreign currency impairment
Other movement
Balance at Ashadh end 1,037,902,520 496,123,069
Collective allowances for impairment
Balance at 1 Shrawan 982,303,065 760,378,048
Charge/(reversal) for the year (26,837,810) 221,925,017
Exchange rate variance on foreign currency impairment
Other movement
Balance at Ashadh end 955,465,255 982,303,065
Total allowances for impairment 1,993,367,775 1,478,426,134
Investment securities 4.8

Investment securities measured at amortised cost 25,804,510,200 7,501,449,906
Investment in equity measured at FVTOCI 557,618,043 409,400,295
Total 26,362,128,243 7,910,850,201
93
4.8.1: Investment securities measured at amortised cost
Debt securities 1,020,013,915 1,020,000,000
Government bonds
Government treasury bills 22,733,746,504 6,481,449,906
Nepal Rastra Bank bonds
Nepal Rastra Bank deposits instruments
Other 2,050,749,781
Less: specific allowances for impairment
Total 25,804,510,200 7,501,449,906
4.8.2: Investment in equity measured at fair value through other comprehensive income
Equity instruments
Quoted equity securities 456,128,746 334,824,672
Unquoted equity securities 101,489,297 74,575,623
Total 557,618,043 409,400,295
4.8.3: Information relating to investment in equities

Cost Fair Value Cost Fair Value
Investment in quoted equity 52,250,000 456,128,746 52,250,000 334,824,672
Sana Kisan Bikas Laghubitta Bittiya Sanstha Limited 52,190,000 455,971,980 52,190,000 334,665,182
(1,365,427 shares of NPR100 each)
Grameen Bikas Laghubitta Bittiya Sanstha Ltd. 60,000 156,766 60,000 159,491
(600 shares of NPR100 each)
Investment in unquoted equity 3,735,500 101,489,297 3,735,500 74,575,623
Karja Suchana Kendra Limited 1,235,500 77,207,930 1,235,500 56,956,693
(154,403 shares of NPR100 each)
Nepal Clearing House Ltd. 2,500,000 23,174,387 2,500,000 17,618,930
(130,562 shares of NPR100 each)
SWIFT 1,106,981
Total 55,985,500 557,618,043 55,985,500 409,400,295
Current tax assets 4.9

Current tax assets 1,648,384,539 1,132,620,166
Current year income tax assets 1,535,251,985 1,007,897,406
Tax assets of prior periods 113,132,554 124,722,760
Current tax liabilities 1,495,880,480 1,019,487,612

Current year income tax liabilities 1,495,880,480 969,959,053
Tax liabilities of prior periods 49,528,559
Total 152,504,058 113,132,554

Investment in subsidiaries 4.10

Investment in quoted subsidiaries
Investment in unquoted subsidiaries
Total investment
Net carrying amount
4.10.1: Investment in quoted subsidiaries

Current Year Cost Previous Year Cost
"…………………………………….Ltd. …………shares of NPR …….each"
……………………………….
Total
4.10.2: Investment in unquoted subsidiaries

……………………………….
Total
4.10.3: Information relating to subsidiaries of the Bank

Percentage of ownership held by the Bank
…………………………………….Ltd.
…………………………………….Ltd.
…………………………………….Ltd.
…………………………………….Ltd.
…………………………….
Total
4.10.4: Non controlling interest of the subsidiaries

Equity interest held by NCI (%)
Profit/(loss) allocated during the year
Accumulated balances of NCI as on Ashadh end……..
Dividend paid to NCI
Equity interest held by NCI (%)

Profit/(loss) allocated during the year
Accumulated balances of NCI as on Ashadh end……..
Dividend paid to NCI
Total
95
Investment in associates 4.11
Investment in quoted associates
Investment in unquoted associates
Total investment
Net carrying amount
4.11.1: Investment in quoted associates


……………………………….
Total
4.11.2: Investment in unquoted associates

……………………………….
Total
4.11.3: Information relating to associates of the Bank

Percentage of ownership held by the Bank
…………………………………….Ltd.
…………………………………….Ltd.
…………………………………….Ltd.
…………………………………….Ltd.
…………………………….
4.11.4: Equity value of associates

…………………………………….Ltd.
…………………………………….Ltd.
……………………………….
Total

Investment properties 4.12

Investment properties measured at fair value
Balance as on 1 Shrawan, ……..
Addition/disposal during the year
Net changes in fair value during the year
Adjustment/transfer
Net amount
Investment properties measured at cost
Balance as on 1 Shrawan, ……..
Addition/disposal during the year
Adjustment/transfer
Accumulated depreciation
Accumulated impairment loss
Net amount
Total
97
98
Property and Equipment 4.13
Particulars Land Building Leasehold Computer & Vehicles Furniture & Machinery Equipment & Total Ashadh Total Ashadh
Properties Accessories Fixture Others End 2080 End 2079
Cost
As on 1 Shrawan, 2078 147,052,981 161,934,245 59,257,481 29,191,402 30,005,647 51,911,079 479,352,834
Addition during the Year 86,588,731 37,550,872 47,393,469 1,550,000 420,904,278 593,987,351
Acquisition
Capitalisation
Disposal during the year 27,513,367 3,173,086 1,113,616 600,000 14,955,353 47,355,422
Adjustment/Revaluation
Balance as on Ashadh end 2079 206,128,345 196,312,031 59,257,481 75,471,256 30,955,647 457,860,003 1,025,984,763
Addition during the Year 32,842,085 14,657,223 993,270 85,947,000 134,439,577
Acquisition
Capitalisation
Disposal during the year 47,511,881 8,861,973 2,084,054 1,034,216 3,853,738 4,127,823 67,473,685
Balance as on Ashadh end 2080 191,458,549 202,107,281 57,173,427 74,437,041 28,095,178 539,679,180 1,092,950,655 1,025,984,763
Depreciation and Impairment
As on 1 Shrawan, 2078 107,499,844 84,767,430 36,325,110 27,897,933 30,005,647 45,712,052 332,208,016
Depreciation charge for the Year 17,684,096 39,017,813 6,051,996 10,083,110 495,139 75,310,443 148,642,596
Impairment for the year
Disposals 27,513,367 3,173,086 1,113,616 600,000 14,955,353 47,355,422
Adjustment -

As on Ashadh end 2079 97,670,573 120,612,157 42,377,106 36,867,427 29,900,785 106,067,142 433,495,191
Depreciation charge for the Year 22,313,120 33,771,651 5,715,064 12,275,581 723,598 83,985,827 158,784,841
Disposals 47,511,881 8,861,973 2,084,054 1,034,216 3,853,738 4,127,823 67,473,685
Adjustment -
As on Ashadh end 2080 72,471,812 145,521,836 46,008,116 48,108,793 26,770,645 185,925,145 524,806,346 433,495,191
Capital Work in Progress 20,450,240
Net Book Value
As on Ashadh end 2078 169,507,195 77,166,814 22,932,371 1,293,469 6,199,027 277,098,876
As on Ashadh end 2079 128,908,013 75,699,874 16,880,375 38,603,829 1,054,861 351,792,862 612,939,813 612,939,813
As on Ashadh end 2080 118,986,737 56,585,445 11,165,311 26,328,248 1,324,533 353,754,034 568,144,309
Goodwill and Intangible Assets 4.14

Particulars Goodwill Software Software Other Total Total
Purchased Developed Ashadh end Ashadh end
2080 2079
Cost
As on 1 Shrawan, 2078
Addition during the Year
Acquisition
Capitalisation
Disposal during the year
Balance as on Ashadh end 2079
Addition during the Year
Acquisition
Capitalisation
Disposal during the year
Balance as on Ashadh end 2080
Amortisation and Impairment

As on 1 Shrawan, 2078
Amortisation charge for the Year
Disposals
Adjustment
As on Ashadh end 2079
Amortisation charge for the Year

Disposals
Adjustment
Capital Work in Progress
Net Book Value

99
Deferred Tax 4.15
Current Year
Particulars Deferred Tax Deferred Tax Net Deferred
Assets Liabilities Tax Assets/
(Liabilities)
Deferred tax on temporary differences on following items
Loan and Advance to B/FIs
Loans and advances to customers 23,557,236 23,557,236
Investment properties
Investment securities 150,489,763 (150,489,763)
Property & equipment 37,866,032 37,866,032
Debenture issue expenses 1,397,136 1,397,136
Employees’ defined benefit plan 15,440,422 15,440,422
Lease liabilities 29,940,959 29,940,959
Provisions 52,601,138 52,601,138
Other temporary differences
Deferred tax on temporary differences 160,802,921 150,489,763 10,313,158
Deferred tax on carry forward of unused tax losses
Deferred tax due to changes in tax rate
Net Deferred tax asset/(liabilities) as on year end of Ashadh end 2080 10,313,158
Deferred tax asset/(liabilities) as on 1 Shrawan 2079 51,174,308
Origination/(Reversal) during the year (40,861,150)
Deferred tax (expense)/income recognised in profit or loss 1,593,689

Deferred tax (expense)/income recognised in other comprehensive (42,454,838)
income
Deferred tax (expense)/income recognised in directly in equity

Continued
Previous Year
Particulars Deferred Tax Deferred Tax Net Deferred
Assets Liabilities Tax Assets/
(Liabilities)
Deferred tax on temporary differences on following items
Loan and Advance to B/FIs
Investment properties
Investment securities 106,024,439 (106,024,439)
Property & equipment 36,044,263 36,044,263
Employees' defined benefit plan 15,927,458 15,927,458
Lease liabilities 25,822,973 25,822,973
Provisions 50,642,586 50,642,586
Other temporary differences 28,500 28,500
Deferred tax on temporary differences 157,198,747 106,024,439 51,174,308
Deferred tax on carry forward of unused tax losses
Deferred tax due to changes in tax rate
Net Deferred tax asset/(liabilities) as on year end of 2079 51,174,308
Deferred tax asset/(liabilities) as on 1 Shrawan, 2078 (20,065,839)
Origination/(Reversal) during the year 71,240,147
Deferred tax (expense)/income recognised in profit or loss 43,466,920
Deferred tax (expense)/income recognised in other comprehensive 27,773,226
income
Deferred tax (expense)/income recognised in directly in equity
Other assets 4.16

Assets held for sale
Other non banking assets

Bills receivable
Accounts receivable
Accrued income
Prepayments and deposit 86,753,769 53,483,981
Income tax deposit
Deferred employee expenditure 371,952,285 352,679,948
Other Assets 1,222,458,199 737,198,016
Total 1,681,164,252 1,143,361,945
101
Due to Bank and Financial Institutions 4.17
Money market deposits
Interbank borrowing
Other deposits from BFIs 4,992,295,339 8,223,667,337
Settlement and clearing accounts
Other deposits from BFIs
Total 4,992,295,339 8,223,667,337
Due to Nepal Rastra Bank 4.18

Refinance from NRB 514,986,268
Standing Liquidity Facility
Lender of last report facility from NRB
Securities sold under repurchase agreements
Other payable to NRB
Total 514,986,268
Derivative financial instruments 4.19

Held for trading 63,920
Interest rate swap
Currency swap
Forward exchange contract 63,920
Others
Held for risk management 88,848,457 121,556
Interest rate swap
Currency swap
Forward exchange contract 86,492,901
Other 2,355,556 121,556
Total 88,848,457 185,476

Deposits from customers 4.20

Institutions customers: 50,064,818,375 38,945,170,717
Term deposits 12,536,403,532 8,688,976,404
Call deposits 11,195,010,562 7,167,109,197
Current deposits 22,586,351,096 18,941,623,403
Other 3,747,053,185 4,147,461,713
Individual customers: 67,436,159,045 54,776,745,659
Term deposits 34,894,056,464 22,911,995,824
Saving deposits 32,269,988,389 31,485,729,597
Current deposits 260,973,718 309,637,877
Other 11,140,474 69,382,361
Total 117,500,977,420 93,721,916,376
4.20.1: Currency wise analysis of deposit from customers

Nepalese rupee 101,522,736,662 80,712,041,894
Indian rupee
United State dollar 15,025,611,930 10,557,934,296
Great Britain pound 377,118,300 2,011,497,960
Euro 151,714,691 109,897,954
Japanese yen 2,604,565 4,517,994
Chinese yuan 54,781,056
Other 366,410,216 326,026,278
Total 117,500,977,420 93,721,916,376
Borrowing 4.21
Domestic Borrowing
Nepal Government
Other Institutions
Other
Sub total
Foreign Borrowing 2,630,600,000
Foreign Bank and Financial Institutions 2,630,600,000
Multilateral Development Banks
Other Institutions
Sub total 2,630,600,000
Total 2,630,600,000
103
Provisions 4.22
Provisions for redundancy
Provision for restructuring
Pending legal issues and tax litigation
Onerous contracts
Other
4.22.1: Movement in provision

Balance at 1 Shrawan, 2079
Provisions made during the year
Provisions used during the year
Provisions reversed during the year
Unwind of discount
Balance at Ashadh end
Other liabilities 4.23

Liability for employees defined benefit obligations (72,689,554) (90,484,551)
Liability for long-service leave 78,082,641 69,649,912
Short-term employee benefits 91,676,382 94,469,805
Bills payable 130,178,961 159,798,956
Creditors and accruals 1,159,525,076 867,998,590
Interest payable on deposit 751,239,740 604,982,818
Interest payable on borrowing 119,027,344 12,121,836
Liabilities on deferred grant income
Unpaid Dividend 162,768,283 106,142,532
Liabilities under Finance Lease 372,710,409 447,716,912
Employee bonus payable 551,068,530 359,106,113
Liabilities under Operating Lease
Total 3,528,729,099 2,759,852,645

4.23.1: Defined benefit obligations

The amounts recognised in the statement of financial position are as follows:
Present value of unfunded obligations (72,689,554) (90,484,551)
Present value of funded obligations 808,731,539 723,144,955
Total present value of obligations 734,539,022 626,869,797
Fair value of plan assets 807,228,576 717,354,348
Present value of net obligations (72,689,554) (90,484,551)
Recognised liability for defined benefit obligations (72,689,554) (90,484,551)
4.23.2: Plan assets
Plan assets comprise
Equity securities
Government bonds
Bank deposit* 749,101,132 691,464,969
Other** 59,630,407 31,679,986
Total 808,731,539 723,144,955
Actual return on plan assets
* Bank Deposits include NPR723Mn in term deposits and NPR26.10Mn in other deposits.
** Fund with Social Security Fund (SSF)
4.23.3: Movement in the present value of defined benefit obligations

Defined benefit obligations at 1 Shrawan 626,869,797 683,980,200
Actuarial (gain)/loss 26,428,584 (53,453,212)
Benefits paid by the plan (19,418,451) (89,386,153)
Current service costs and interest 100,659,092 85,728,962
Defined benefit obligations at Ashadh end 734,539,022 626,869,797
4.23.4: Movement in the fair value of plan assets

Fair value of plan assets at Shrawan 723,144,955 664,800,396
Contributions paid into the plan 27,950,420 100,433,213
Benefits paid during the year (19,418,451) (89,386,153)
Actuarial (loss)/gain 15,439,320 16,092,855
Expected return on plan assets 61,615,295 31,204,644
Fair value of plan assets at Ashadh end 808,731,539 723,144,955
105
4.23.5: Amount recognised in profit or loss
Current service costs 46,457,100 52,892,505
Interest on obligation 54,201,992 32,836,457
Expected return on plan assets 61,615,295 31,204,644
Total 39,043,797 54,524,318
4.23.6: Amount recognised in other comprehensive income

Actuarial (gain)/loss 6,701,620 (63,755,460)
Total 6,701,620 (63,755,460)
4.23.7: Actuarial assumptions

Discount rate 6.35% 8.49%
Expected return on plan asset 6.35% 8.49%
Future salary increase 6.83% 8.56%
Withdrawal rate
Debt securities issued 4.24

Debt securities issued designated as at fair value through profit
or loss
Debt securities issued at amortised cost 2,493,868,274
Total 2,493,868,274
Subordinated Liabilities 4.25

Redeemable preference shares
Irredeemable cumulative preference shares
(liabilities component)
Other
Total
Share capital 4.26

Ordinary shares 9,429,453,895 9,429,453,895
Convertible preference shares (equity component only)
Irredeemable preference shares (equity component only)
Perpetual debt (equity component only)
Total 9,429,453,895 9,429,453,895

4.26.1: Ordinary shares

Authorized Capital
100,000,000 Ordinary share of NPR100 each 10,000,000,000 10,000,000,000
Previous Year - 100,000,000 share of NPR100 each
Issued capital
Subscribed and paid up capital
Total 9,429,453,895 9,429,453,895
4.26.2: Ordinary share ownership
Percent Percent
Domestic ownership 29.79 29.79
Nepal Government
"A" class licensed institutions
Other licensed institutions
Other Institutions 1.58 1.20
Public 28.21 28.59
Other
Foreign ownership 70.21 70.21
Total 100.00 100.00
Reserves 4.27
Statutory general reserve 5,928,258,625 5,235,192,630
Exchange equalisation reserve 542,010,057 537,515,225
Corporate social responsibility reserve 34,653,300 22,559,343
Capital redemption reserve 480,000,000
Regulatory reserve 836,790,226 630,570,455
Investment adjustment reserve
Capital reserve
Assets revaluation reserve
Fair value reserve 351,142,780 247,390,356
Dividend equalisation reserve
Actuarial gain/(loss) (170,173,671) (165,482,537)
Special reserve
Other reserve
Total 8,002,681,317 6,507,745,473
107
Contingent liabilities and commitments 4.28
Contingent liabilities 80,839,890,593 60,413,736,611
Undrawn and undisbursed facilities 35,248,853,759 32,907,256,512
Capital commitment
Lease Commitment
Litigation 1,125,130,490 111,943,211
Total 117,213,874,842 93,432,936,334
4.28.1: Contingent liabilities

Acceptance and documentary credit 8,866,925,285 8,626,378,912
Bills for collection 693,114,569 1,833,314,670
Forward exchange contracts 6,031,786,575 1,631,872,645
Guarantees 64,700,280,915 48,047,755,884
Underwriting commitment
Other commitments 547,783,250 274,414,500
Total 80,839,890,593 60,413,736,611
4.28.2: Undrawn and undisbursed facilities

Undisbursed amount of loans 7,884,085,495 6,719,267,878
Undrawn limits of overdrafts 5,322,503,420 5,000,977,316
Undrawn limits of credit cards 2,160,335,509 2,002,597,502
Undrawn limits of letter of credit 18,515,081,337 17,994,709,133
Undrawn limits of guarantee 1,366,847,998 1,189,704,683
Total 35,248,853,759 32,907,256,512
4.28.3: Capital commitments

Capital commitments in relation to Property and Equipment
Approved and contracted for
Approved but not contracted for
Sub total
Capital commitments in relation to Intangible assets

Approved and contracted for
Approved but not contracted for
Sub total
Total

4.28.4: Lease commitments

Operating lease commitments
Future minimum lease payments under non cancellable
operating lease, where the bank is lessee
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Sub total
Finance lease commitments

Future minimum lease payments under non cancellable
operating lease, where the bank is lessee
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Sub total
Grand total
4.28.5: Litigation
The Bank has an income tax litigation for FY 2073/74 and FY 2075/76 on disallowance of gratuity funding to Approved Retirement
Fund and share issue expenses. The total tax demand from tax authority including fines, interest and advance tax shortfall is
NPR211.87Mn. Further the Bank is in litigation on tax on bonus share distributed from premium on further public offering (FPO)
against the provision of Finance Act 2080 amounting to NPR913Mn.
Interest income 4.29

Cash and cash equivalent
Due from Nepal Rastra Bank
Placement with bank and financial institutions 757,046,744 77,400,608
Loan and advances to bank and financial institutions 1,745,106,101 656,909,047
Loans and advances to customers 8,918,010,670 6,090,141,296
Investment securities 1,230,364,510 655,881,617
Loan and advances to staff 76,000,766 46,400,645
Other 17,509,528 1,186,892
Total interest income 12,744,038,318 7,527,920,105
Interest expense 4.30

Due to bank and financial institutions
Due to Nepal Rastra Bank 2,234,312 17,154,016
Deposits from customers 6,537,218,498 3,595,545,985
Borrowing 2,379,546 148,166,433
Debt securities issued 93,868,274
Subordinated liabilities
Other int expenses 152,312,527 26,591,570
Total interest expense 6,788,013,158 3,787,458,004
109
Fees and Commission Income 4.31
Loan administration fees 110,400,144 65,673,926
Service fees 20,867 8,677
Consortium fees
Commitment fees
DD/TT/Swift fees 25,067,584 24,681,268
Credit card/ATM issuance and renewal fees 160,614,412 116,633,750
Prepayment and swap fees
Investment banking fees
Asset management fees
Brokerage fees
Remittance fees 41,739,863 47,342,745
Commission on letter of credit 26,907,202 17,194,061
Commission on guarantee contracts issued 466,955,191 428,246,680
Commission on share underwriting/issue
Locker rental 6,431,279 6,720,454
Other fees and commission income 637,326,552 283,120,655
Total fees and Commission Income 1,475,463,094 989,622,216
Fees and commission expense 4.32

ATM management fees 5,328,458 5,379,925
VISA/Master card fees 38,740,423 20,951,092
Guarantee commission
Brokerage
DD/TT/Swift fees expenses
Remittance fees and commission
Other fees and commission expense 147,460,605 30,646,260
Total fees and Commission Expense 191,529,486 56,977,277
Net trading income 4.33

Changes in fair value of trading assets
Gain/loss on disposal of trading assets
Interest income on trading assets
Dividend income on trading assets
Gain/loss foreign exchange transaction 582,147,329 657,438,566
Other
Net trading income 582,147,329 657,438,566

Other operating income 4.34

Foreign exchange revaluation gain/(loss) 17,979,330 (2,848,722)
Gain/loss on sale of investment securities
Fair value gain/loss on investment properties
Dividend on equity instruments 1,466,819 5,359,320
Gain/loss on sale of property and equipment 1,002,277 410,000
Gain/loss on sale of investment property
Operating lease income
Gain/loss on sale of gold and silver
Locker rent
Other
Total 20,448,426 2,920,598
Impairment charge/(reversal) for loan and other losses 4.35

Impairment charge/(reversal) on loan and advances to B/FIs 83,304,499 13,660,298
Impairment charge/(reversal) on loan and advances to
514,941,641 120,646,589
customer
Impairment charge/(reversal) on financial Investment
Impairment charge/(reversal) on placement with banks and
financial institutions
Impairment charge/(reversal) on property and equipment
Impairment charge/(reversal) on goodwill and intangible
assets
Impairment charge/(reversal) on investment properties
Total 598,246,140 134,306,886
Personnel Expense 4.36

Salary 397,860,654 366,335,913
Allowances 179,784,955 158,397,533
Gratuity expense 39,043,797 54,524,318
Provident fund 33,677,133 30,635,641
Uniform 86,436 161,563
Training & development expense 9,719,904 2,803,088
Leave encashment 22,329,055 21,717,759
Medical 19,090,555 17,620,775
Insurance 3,454,100 3,331,231
Employees incentive 187,924,664 181,295,100
Cash-settled share-based payments
Pension expense
Finance expense under NFRS 37,730,856 17,608,541
Other expenses related to staff 61,019,423 54,459,546
Subtotal 991,721,531 908,891,008
Employees bonus 551,068,530 359,106,113
Grand total 1,542,790,061 1,267,997,121
111
Other operating expense 4.37
Directors' fee 882,000 840,000
Directors' expense 144,897 12,430
Auditors' remuneration 2,050,000 2,050,000
Other audit related expense 598,900
Professional and legal expense 12,096,617 11,303,744
Office administration expense 528,158,203 511,035,622
Operating lease expense 5,134,724 16,233,683
Operating expense of investment properties
Corporate social responsibility expense 22,559,343
Onerous lease provisions
Other
Total 571,025,784 542,074,379
4.37.1: Office Administration Expenses

Water & Electricity 11,180,261 11,537,482
Repair and Maintenance 30,904,734 25,484,739
a) Building 12,795,308 5,896,742
b) Vehicles 1,348,307 1,289,212
c) Computer and accessories
d) Office equipment and furniture 9,473,826 7,118,870
e) Other 7,287,293 11,179,915
Insurance 9,793,529 13,930,237
Postage, telex, telephone, fax 56,946,424 40,963,138
Printing and stationary 32,808,483 23,875,756
Newspaper, books and journals 30,650 15,193
Advertisement 28,386,350 32,297,184
Donation 3,036,750
Security expense 32,890,382 33,777,366
Deposit and loan guarantee premium 21,809,479 15,710,407
Travel allowance and expense 16,587,210 7,332,626
Entertainment 750,685 2,145,617
Annual/special general meeting expense 4,215,993 2,541,627
Other 281,854,024 298,387,500
(a) Office Equipment and Furniture 11,780,036 11,764,314
(b) Cleaning Expenses 12,388,809 11,485,909
(c) Clearing House Charges 1,842,021 2,219,182
(d) Technology Support Cost (Technical Services Fees ) 160,184,092 177,701,393
(e) Commission and Discount 12,240,552 10,094,025
(f) Hire of Vehicle and Equipments 7,813,658 8,330,180
(g) Other Professional Fees 7,845,798 7,398,892
(h) Other 67,759,057 69,393,606
Total 528,158,203 511,035,622

Depreciation & Amortisation 4.38

Depreciation on property and equipment 158,784,841 148,642,596
Depreciation on investment property
Amortisation of intangible assets
Total 158,784,841 148,642,596
Non operating income 4.39

Recovery of loan written off 7,448,230
Other income-non operating
Total 7,448,230
Non operating expense 4.40
Loan written off 19,461,203 8,159,688
Redundancy provision
Expense of restructuring
Other expense-non operating 77,958 330,515
Total 19,539,160 8,490,203
Income tax expense 4.41

Current tax expense 1,495,880,480 1,019,487,612
Current year 1,495,880,480 969,959,053
Adjustments for prior years 49,528,559
Deferred tax expense (1,593,689) (43,466,920)
Origination and reversal of temporary differences (1,593,689) (43,466,920)
Changes in tax rate
Recognition of previously unrecognised tax losses
Total income tax expense 1,494,286,792 976,020,692
4.41.1: Reconciliation of tax expense and accounting profit

Profit before tax 4,959,616,767 3,231,955,019
Tax amount at tax rate of 30% 1,487,885,030 969,586,506
Add: Tax effect of expenses that are not deductible for tax
146,540,015 154,950,558
purpose
Less: Tax effect on exempt income (440,046) (1,607,796)
Add/less: Tax effect on other items (139,698,207) (146,908,576)
Total income tax expense 1,494,286,792 976,020,692
Effective tax rate 30.13% 30.20%
113
Statement of Distributable Profit or Loss
For the year ended 31 Ashadh 2080 (As per NRB Regulation)
Particulars Current Year Previous Year
Net profit or (loss) as per statement of profit or loss 3,465,329,975 2,255,934,327
Appropriations:
a. General reserve 693,065,995 451,186,865
b. Foreign exchange fluctuation fund 4,494,832
c. Capital redemption reserve 480,000,000
d. Corporate social responsibility fund 34,653,300 22,559,343
e. Employees' training fund
f. Other
Profit or (loss) before regulatory adjustment 2,253,115,848 1,782,188,118

Regulatory adjustment :
a. Interest receivable (-)/previous accrued interest received (+) (203,122,325) (199,058,059)
b. Short loan loss provision in accounts (-)/reversal (+)
c. Short provision for possible losses on investment (-)/reversal (+)
d. Short loan loss provision on Non Banking Assets (-)/reversal (+)
e. Deferred tax assets recognised (-)/ reversal (+) 1,593,689 (71,240,147)
f. Goodwill recognised (-)/ impairment of Goodwill (+)
g. Bargain purchase gain recognised (-)/reversal (+)
h. Actuarial loss recognised (-)/reversal (+) (4,691,134) 44,628,822
i. Other (+/-)
Net Profit for the year ended on 31 Ashadh 2080 available for distribution 2,046,896,077 1,556,518,734
Opening Retained Earning as on 1 Shrawan, 2079 2,197,903,017 1,776,753,263
Corporate social responsibility fund 22,559,343
Adjustment (+/-) (15,835,636)
Distribution:
Bonus shares issued (857,223,081)
Cash Dividend Paid (1,556,802,838) (262,310,263)
Total Distributable profit or (loss) as on year end date 2,710,555,600 2,197,903,017
Annualised Distributable Profit/Loss per share 28.75 23.31
& Director
CA Sunir K Dhungel

ªDisclosures & Additional Informationº

5.1 Risk management
Board Risk Committee

The ultimate responsibility for setting the Bank’s risk appetite boundaries and ensuring effective management of risk rests with
the Board. Under Nepal Rastra Bank Directive on Corporate Governance, the Board has established a Board Risk Committee
(BRC) with clear Terms of Reference. The BRC is chaired by a Non-Executive Director as appointed by the SCBNL Board. Other
members of the committee are chairman of the Audit Committee, Chief Operating Officer, and Chief Risk Officer who is also the
secretary. The Committee meets a minimum of four times annually. The BRC oversees and reviews the fundamental prudential
risks including credit, traded, treasury (capital and liquidity), operational & technology, compliance, financial crime, reputational
and sustainability, and information and cyber security risk. The BRC receives periodic reports on risk management, including our
portfolio trends, stress testing, liquidity and capital adequacy, and is authorised to seek and review any information relating to an
activity within its terms of reference. The BRC’s role is to review and advise on risk issues so that the Board is well placed to perform
its role as the ultimate owner of risk appetite.
The composition of BRC as on 31 Ashadh 2080 BS was as below:
• Siddhant Raj Pandey, Director, Chairperson
• Rino Santodiono Dono Seputro, Director, Member
• Sujit Shrestha, Chief Operating Officer, Member
• Sanjay Pant, Chief Risk Officer & Chief Compliance Officer, Member Secretary
Board Financial Crime Risk Committee

Financial Crime Risk is categorised as one of the main risks of the Bank. In line with Nepal Rastra Bank’s requirement, the Bank has
formed a Board Level Financial Crime Risk Committee (BFCRC) chaired by an Independent Non-Executive Directive. Other members
of the BFCRC are the Chief Risk Officer & Chief Compliance Officer. The BFCRC is responsible for overseeing financial crime related
risks including those within the remit of Assets Laundering Prevention Act and NRB Unified Directives. Besides, BFCRC is also
responsible for reviewing bribery and corruption risk, sanctions risk and fraud risk. Other governance arrangements are structured
as per the NRB Directives and Group’s requirements. List of members of the
BFCRC are as follows:
• Avinash Agrawal, Director, Chairman

• Sanjay Pant, Chief Risk Officer & Chief Compliance Officer, Member
• Netra Subedi, Head Financial Crime Compliance, Member/Secretary
Risk Governance
Effective Risk Management is essential to ensure consistent and sustainable performance for all of our stakeholders and is therefore
a central part of the Bank’s financial and operational performance. The Bank adds value to clients and therefore the communities
in which it operates, generating returns for shareholders by taking and managing risks.
Our Enterprise Risk Management Framework “ERMF” outlines how we manage risk across the Bank. It gives us the structure to
manage existing risks effectively in line with our Risk Appetite, as well as allowing for holistic risk identification.
SCBNL has adopted an approach to manage and monitor the Material Risks through eight Principal Risk Types (standalone
risks) and three Integrated Risk Types (Cross-cutting risks). Principal Risks are risks inherent in our strategy and business model.
These are formally defined in our Enterprise Risk Management Framework (ERMF) which provides a structure for monitoring and
controlling these risks. Through the Bank’s Enterprise Risk Management Framework, enterprise-wide risks that are inherent in
the Bank’s strategy and business model are managed with the objectives of maximising risk-adjusted returns while remaining
within the risk appetite boundaries. The Bank will not compromise adherence to its risk appetite in order to pursue revenue growth
or higher returns. The Bank’s key risk priorities are to strengthen the risk culture, manage and improve information and cyber
security, manage financial crime risk, strengthen our conduct environment, enhance our compliance infrastructure and improve
our efficiency and effectiveness.
Credit Risk, Treasury Risk and Traded Risk are Financial Risks inherent in our strategy and business model. For our Corporate,
Commercial and Institutional Banking (CCIB) business, we closely monitored our clients that may face difficulties on account of
increasing interest rate, foreign exchange movements, commodity volatility or increase in price of essential goods. Stress tests and
portfolio reviews are also done to identify vulnerable exposures. These exposures are then tracked through our well-established
Early Alert monitoring process. Consumer, Private and Business Banking (CPBB) portfolio has demonstrated strong resilience
despite challenging operating environment, while we remain alert to the risks of the uncertain economic outlook. We manage
our liquidity and capital risks to ensure a strong and resilient balance sheet that supports sustainable growth. Liquidity remains
resilient and the capital position is much above the regulatory minima as well as the internal risk appetite.
Managing the risks from climate change is a core element of our strategy and stands and an integral part of our Credit Risk
assessment criteria. We have continued to build and embed our in-house Climate Risk models, training and education, and work with
our clients to enhance our Climate Risk identification and measurement capabilities. We continue to advance Environment, Social
and Governance (ESG) risk management across the organisation and have further embedded consideration of Environmental
and Social risks into the Risk and Control Self-Assessments for both our CCIB and CPBB client segments and functions. In keeping
with our sustainable and transition finance goals, we have made good progress on enhancing our policies, processes, and controls
115
to manage the risks associated with greenwashing across products, transactions, disclosures and our marketing materials.
On non-financial risks side, key priorities are to manage and improve information and cyber security, manage financial crime risk,
strengthen our conduct environment, enhance our compliance infrastructure and improve our efficiency and effectiveness.
The ultimate responsibility for setting the Bank’s risk appetite boundaries and for effective management of risk rests with the
Board.
Acting within an authority delegated by the Board, the Board Risk Committee, chaired by a Non-Executive Director (NED), has
responsibility for oversight and review of prudential risks, including but not limited to credit, traded, reputational & sustainability,
capital and liquidity, operational & technology, financial crime, compliance, and information and cyber security risk.
The Executive Risk Committee (ERC) is responsible for the establishment of and compliance with policies relating to risk. It is
responsible for management of all risks other than those managed by Assets and Liabilities Committee (ALCO).
The ERC is represented by a senior management team including the heads of the concerned risk management units and chaired
by the Chief Risk Officer. The Committee meets normally every two months and reviews the Credit Risk, Operational & Technology
Risk, Market/Traded Risk, Reputational & Sustainability Risk, Conduct Risk, Financial Crime Risk, Compliance Risk, Country Risk,
Information and Cyber Security Risk, Third-Party Risk; analyses trends and provides a summary report to the Executive Committee.
Its objective is to ensure the effective management of risks throughout the Bank in support of the Bank’s Business Strategy.
The Assets and Liabilities Committee (ALCO) is responsible for the management of capital and establishment of, and compliance
with, policies relating to balance sheet management, including management of liquidity, capital adequacy and structural foreign
exchange and interest rate exposure.
The Bank’s Committee Governance structure ensures that risk-taking authority and risk management policies are cascaded down
from the Board to the appropriate functional, client business, senior management and committees. Information regarding material
risk issues and compliance with policies and standards is communicated through the business & functions.
Internal Control Review

The Bank is committed to managing risk and controlling its business and financial activities in a manner which enables it to
maximise profitable business opportunities, avoid or reduce risks which can cause loss or reputational damage, ensure compliance
with applicable laws and regulations and enhance resilience to external events.
Besides regular review by management level committees, the effectiveness of the Bank’s internal control system is reviewed
regularly by the Board, Board Risk Committee, Board Financial Crime Risk Committee, and the Audit Committee. The Audit
Committee reviews the effectiveness of internal control system reports to the Board. The Internal Audit monitors compliance with
policies and standards and the effectiveness of internal control structures across the Bank through its programme of business/unit
audits. The Internal Audit function is focused in the areas of greatest risk as determined by a risk-based assessment methodology.
Internal Audit reports regularly to the Audit Committee. The findings of all adverse audits are also notified to the Chief Executive
Officer and Business Heads for immediate corrective actions.
Credit Risk
Credit Risk is the potential for loss due to failure of a counterparty to meet its agreed obligations to pay the Bank in accordance
with agreed terms. The Bank manages its credit exposures following the principle of diversification across products, client segments
and industry sectors. Country Portfolio Guidelines and the Credit Approval Document (CAD) / Credit Processing Manuals govern
the extension of credit to Corporate & Institutional Banking (CIB) and Commercial Banking (CB) Clients and Consumer, Private
and Business Banking (CPBB) Clients respectively. Each policy provides the framework for lending to counterparties, account
management, product approvals and other product related guidance, credit criteria & processes and portfolio standards.
Credit Risk under CPBB, Commercial Banking and Corporate & Institutional Banking is managed through a defined framework
which sets out policies and standards covering the measurement and management of Credit Risk. There is a clear segregation
of duties between transaction originators in the businesses and the approvers in the Risk functions. All credit exposure limits are
approved within a defined Credit Approval Authority Framework.
All Corporate and Institutional borrowers, at individual and group level, are assigned internal credit ratings that supports
identification and measurement of risk and integrated into overall Credit Risk analysis. Credit Grade (CG) is reviewed periodically
and amended in light of changes in the borrower’s circumstances or behaviour. CG plays a central role in the credit quality
assessment and monitoring of risk.
The Credit Issue Committee (CIC), a sub-committee of Executive Risk Committee, is responsible for overseeing clients in CIB, CB
and Business Banking (BB) segments showing signs of actual or potential weaknesses and also for monitoring of agreed remedial
actions for such clients. The CIC reviews the existing Early Alert portfolio in CIB and CB, Stress Account Management (SAM) portfolio
in Business Banking, and Watchlist/Non-Performing Loans in both the business segments, as well as new accounts presented to
the Committee. It also reviews BB Portfolio to ensure credit issues / adverse trends in the portfolio are identified and addressed
through appropriate actions. The CIC additionally reviews and monitors strategies and actions being taken on accounts within
Group SAM’s portfolio. It is chaired by the CEO and meets monthly. For BB exposures, portfolio delinquency trends are monitored
continuously at a detailed level. Individual customer behaviour is also tracked and considered for lending decisions. Accounts
that are past due are subject to a collections process, managed independently by the Risk Function. Charged-off / provisioned

accounts are managed by specialist Recovery teams. The credit risk management covers credit rating and measurement, credit
risk assessment and credit approval, large exposures and credit risk concentration, credit monitoring, credit risk mitigation and
portfolio analysis.
Operational & Technology Risk

Operational & Technology Risk (OR) is the potential for loss from inadequate or failed internal processes, technology events,
human error, or from the impact of external events (including legal risks). Operational & Technology Risk exposures are managed
through a consistent set of management processes that drive risk identification, assessment, control and monitoring. Operational
& Technology Risk Type Framework outlines the overall risk management approach for Operational & Technology Risk for the Bank
and defines how risks are managed and controlled and how Operational & Technology Risk policies and controls are assured, how
effective governance is exercised as well as the key roles required to manage the underlying processes. The framework defines
the risk classification and assigns Subject Matter Experts (SMEs) as the owners for the identified risk types. The Executive Risk
Committee, chaired by the Country Chief Risk Officer (CCRO), oversees the management of operational risks across the Bank.
SMEs have responsibilities for setting appropriate policies and supporting control standards of the following operational risk sub
types:
• Execution Capability (Transaction Processing, Product Mismanagement);

• Operational Resilience (Client Service Disruption, Technology Risk, Change Mismanagement; People Management; Physical
Safety and Security)
• Governance (Corporate Governance, Enterprise Risk Governance);
• Reporting and Obligations (Financial Books and Records, Tax Risk, Financial Regulatory Reporting);
• Legal Risk
Operational & Technology Risks can arise from all business lines and from all activities carried out by the Bank. The Operational
& Technology Risk management approach seeks to ensure management of the risk by maintaining a complete process universe
defined for all business segments, products and functions.
Risk management practices help the business grow safely and ensures governance and management of Operational and
Technology Risk through the delivery and embedding of effective frameworks and policies, together with continuous oversight
and assurance. Managing Operational and Technology Risk well makes the Bank more efficient and enables it to offer better and
safer service to its customers. Bank’s Operational and Technology Risk Management Framework is designed to enable it to govern,
identify, measure, monitor and test, manage and report on its Operational and Technology risk. The Bank continues to ensure the
Operational and Technology Risk Framework supports the business and functions in effectively managing risk and controls within
risk appetite to meet their strategic objectives.
Overall, the Bank’s Operational Risk profile has remained stable with the quality of risk understanding and identification improving.
The Bank continues to demonstrate progress in visibility of risks and risk management through the ongoing implementation of a
simplified and standardised risk taxonomy. The risk taxonomy implementation will help ensure risks are consistently identified,
described and assessed as well as enable improved risk aggregation and reporting.
Operational and Technology Risk continues to be heighted in areas such Information and Cyber Security, Data Management and
Transaction Processing which are subject to ongoing control enhancement programmes. Other key areas of focus are Change
Management, Systems Health/Technology Risk, Third Party Risk, Financial Crime and Regulatory Compliance. The Bank adopts
a risk governance structure designed to address these risks and significant efforts continue to enhance the control environment.
The Bank continues to monitor and manage Operational and Technology Risks associated with the external environment such as
evolving digital legislature, geopolitical factors and the increasing risk of cyber-attacks. Digitalisation, regulatory expectations,
and the changing technology landscape remain key emerging areas on the risk radar for the Bank, to keep pace with new
business developments whilst ensuring risk and control frameworks evolve accordingly. The Bank continues to strengthen its risk
management processes in order to understand the full spectrum of risks in the operating environment, enhance its defences and
improve resiliency. The following Risk-governance structure in in place to oversee the Operational and Technology Risks:
• The Executive Risk Committee (ERC) ensures the effective management of Operational & Technology Risk throughout the
business/functions in support of the Bank’s strategy and in accordance with the Enterprise Risk Management Framework. The
ERC assigns ownership, requires actions to be taken and monitors progress of risks identified, in addition to confirming the risk
grading provided at the business/unit level.
• The Executive Risk Committee (ERC) accepts Operational & Technology Risks arising in the country basis the Risk Assessment
Matrix. All risks that are above a certain threshold are reported to the ERC for endorsement and escalated to the Group by the
relevant country process owner for acceptance. The material risks and issues are timely escalated to Regional and/or Group Risk
Committees.
• The Country Financial Crime Risk Committee (CFCRC), a sub-committee of ERC chaired by the CEO, ensures appropriate
governance of Financial Crime Risk and oversees the implementation of the Financial Crime Risk Type Framework.
117
Traded Risk
Traded Risk is the potential for loss resulting from activities undertaken by the Bank in financial markets. Under the Enterprise
Risk Management Framework, the Traded Risk Framework brings together Market Risk, Counterparty Credit Risk and Algorithmic
Trading. Traded Risk Management is the core risk management function supporting market-facing businesses, predominantly
Financial Markets and Treasury Markets.
Market Risk is the potential for loss of earnings or economic value due to adverse changes in financial market rates or prices. Risks
arising out of adverse movements in currency exchange rates and interest rates are covered under Market Risk Management.
Market Risk limits are formally approved by the ERC. These limits are consistent with financial budgets, any changes in the business
operations, and with Market Risk appetite metrics. Limit excesses are escalated according to the Market Risk Limit and Excess
Procedure. Exposure to Market Risk is measured, monitored and controlled by Market and Traded Credit Risk (MTCR) which is the
independent control function for Market Risk. Our exposure to Market Risk arises predominantly from customer driven transactions.
In line with Risk Management Guidelines prescribed by NRB, the Bank focuses on exchange risk management for managing/
computing the capital charge on Market Risk. The Bank adopts the Net Open Position approach for reporting Market Risk. In
addition to currency exchange rate risk, interest rate risk is assessed at a regular interval to strengthen Market Risk management.
The Market Risk is managed within the risk tolerances and Market Risk limits set by the Board. Internally, The Bank applies a VaR-
based model for measuring market price risk in the liquid trading book.
Treasury Risk
Capital Risk is the potential for insufficient level or composition of capital to support the Bank’s normal operation. The Bank maintains
a strong capital position sufficient to support its strategic aims. Capital adequacy ratio of the Bank is always within the regulatory
requirements. Liquidity Risk is the potential that the Bank either does not have sufficient liquid financial resources available to meet
all its obligations as they fall due or can only access these financial resources at an excessive cost. The Liquidity Risk Framework
governs liquidity risk and is managed by ALCO. In accordance with that policy, the Bank maintains a liquid portfolio of marketable
securities as a liquidity buffer. The net liquid assets to total deposits ratio is within the mandated regulatory requirements.
Reputational & Sustainability Risk

Reputational & Sustainability Risk is the potential for damage to the franchise (such as loss of trust, earnings or market capitalisation)
because of stakeholders taking a negative view of the Bank through actual or perceived actions or inactions – including a failure to
uphold responsible business conduct or lapses in our commitment to do no significant environmental and social harm through our
client and third-party relationships or our own operations. The Bank’s Reputational & Sustainability Risk Type Framework establishes
the framework for the governance and management of Reputational & Sustainability Risk. The framework aims to protect the
Bank’s reputation and restrict the ability to undertake any activities that may cause material damage to the Bank’s franchise.
Reputational & Sustainability Risk is managed by the ERC and EXCO, which are responsible for protecting the Bank’s reputation
locally and has the responsibility to ensure that the Bank does not undertake any activities that may cause material damage to
the franchise. All employees are responsible for day-to-day identification and management of reputational risk. The scope of
reputational risks includes environment and social risk management, social media risk management and media engagement risk
management.
Information & Cyber Security (ICS) Risk

Information & Cyber Security Risk is the risk to the Bank’s assets, operations and individuals due to the potential for unauthorised
access, use, disclosure, disruption, modification, or destruction of information assets and/or information systems. The risk may lead
to adverse customer and reputational impacts, regulatory censure, financial loss, litigation and/or the potential for the Bank to
fail; affecting financial markets and the wider economy The Bank seeks to avoid risk and uncertainty for our critical information
assets and systems and has low appetite for material incidents affecting these or the wider operations and reputation of the
Bank. The ICS Risk Type Framework adopted by the Bank outlines the overall approach for managing the ICS risks in the Bank and
seeks to introduce operational structure to the identification and mitigation of ICS risks. The Bank allocates responsibilities for the
management of ICS risk in a manner consistent with the Three Lines of Defence Model.
Fair value of financial assets and liabilities

Fair value of financial assets and fair value of financial liabilities is discussed in 3.4 above.
5.2 Capital Management
5.2.1 Qualitative disclosures

The total equity of the Bank comprises of paid-up capital, statutory reserves and other reserves. The paid-up capital is fully paid
equity shares. The Bank has no other complex or hybrid capital instrument like preference share, subordinated debts, warrants etc.
The interest of equity holder in the net assets of the Bank is residual in nature.
The Bank has a robust capital management plan to meet its organic growth ambitions over the coming years both during the
normal conditions and to support its projected risk profile under economically stressful conditions. As per the latest ICAAP submitted
to NRB, the Bank has higher total capital in comparison with its ceiling as defined in its Capital Risk Appetite due to mandatory
paid up capital and regulatory reserves. The capital position strengthened due to increase in paid-up capital of the Bank in FY
2016/17. The Bank remains committed to being well capitalised and maintaining a sustainable capital position.

5.2.2 Quantitative disclosures

5.2.2.1 Capital structure and capital adequacy
a. Tier 1 capital and a breakdown of its components.

As on 16.07.2023
Core Capital (Tier 1) 18,548,268,120
a Paid up Equity Share Capital 9,429,453,895
b Proposed Bonus Equity Share
c Share Premium
d Statutory General Reserves 5,928,258,625
e Retained Earnings 2,710,555,600
f Un-audited current year cumulative profit
g Other Free Reserve
h Debenture Redemption Reserve 480,000,000
b. Tier 2 capital and a breakdown of its components.
As on 16.07.2023
Supplementary Capital (Tier 2) 3,815,448,840
a General loan loss provision 1,353,438,783
b Exchange Equalisation Reserve 542,010,057
c Subordinated Term Debt 1,920,000,000
c. Detailed information about the Subordinated Term Debts with information on the outstanding amount, maturity, and amount
raised during the year and amount eligible to be reckoned as capital funds.
Not applicable.
d. Deductions from capital

Nil
e. Total qualifying capital

NPR22,363,716,960
f. Capital adequacy ratio

17.09%
g. Summary of the Bank’s internal approach to assess the adequacy of its capital to support current and future activities, if
applicable.
Sound Capital Assessment

The Bank has a capital management framework adopted by the Board. The policy under the framework sets minimum standards
for maintaining sufficient capital buffer and the requirements for having adequate processes and controls in place to manage
capital risk.
• The Capital Risk appetite standard of the Bank stipulates risk appetite to be set for a five-year horizon and it sets the range
within which the entity should operate (a floor and a ceiling).
• The Capital forecast standard requires capital forecast on quarterly basis and is monitored and discussed in ALCO
• The ICAAP standard ensures a robust process which is a regular assessment of amounts, types and distribution of capital
adequate to cover the level and nature of risks to which a firm may be exposed. It incorporates baseline financials forecast for
five years prepared basis latest strategic outlook, stress test under economically severe but plausible stress environment over
the forecast period, pillar II internal risk assessment including management actions to ensure capital levels are maintained
within risk appetite limits at all times. Apart from risks covered under Pillar 1 such as Credit, Operational and Market risks, Pillar
2 assessment is to assess whether Pillar 1 capital is adequate to cover the material risks according to the principal risk types
that are defined under the Bank’s risk management framework such as treasury (capital and liquidity) risks, operational and
technology risks, reputational risks, compliance risks, information and cyber security risks, financial crime risk. The Bank’s Risk
Management Framework sets out the Bank’s approach to risk management and the control framework within which risks are
managed.
119
h. Summary of the terms, conditions and main features of all capital instruments, especially in case of subordinated term debts
including hybrid capital instruments.
- Bank has fully paid equity shares as qualifying capital.
5.2.2.2 Risk exposures
a. Risk weighted exposures for Credit Risk, Market Risk and Operational Risk
Risk Weighted Exposures As on 16.07.2023
a Risk Weighted Exposure for Credit Risk 123,286,646,605
b Risk Weighted Exposure for Operational Risk 6,531,144,690
c Risk Weighted Exposure for Market Risk 102,527,607
Add: Adjustments Under Pillar-II 969,624,156
Total Risk Weighted Exposures 130,889,943,058
b. Risk Weighted Exposures under each of 11 categories of Credit Risk

S. N Particulars As on 16.07.2023
1 Claims on govt. and central Bank
2 Claims on other official entities
3 Claims on Banks 5,186,827,519
4 Claims on corporate and securities firm 52,570,114,595
5 Claims on regulatory retail portfolio 2,266,540,691
6 Claim secured by residential properties 6,981,422,395
7 Claims secured by commercial real state 45,300,750
8 Past due Claims 548,777,164
9 High risk claims 13,734,169,632
10 Other Assets 7,172,294,723
11 Off Balance sheet Items 34,781,199,138
Total 123,286,646,605

c. Total risk weighted exposure calculation table
Risk Weighted Exposure for Credit Risk

S.N. A. Balance Sheet Exposures Book Value (a) Specific Provision Eligible CRM (c) Net Value Risk Weight (e) Risk Weighted
(b) (d=a-b-c) Exposures (f=d*e)
1 Cash Balance 1,024,792,056 1,024,792,056 0%
2 Balance with Nepal Rastra Bank 4,577,264,179 4,577,264,179 0%
3 Gold 0%
4 Investment in Nepalese Government Securities 25,692,871,504 25,692,871,504 0%
5 All claims on Government of Nepal 138,807,033 138,807,033 0%
6 Investment in Nepal Rastra Bank securities 0%
7 All claims on Nepal Rastra Bank 0%
8 Claims on Foreign Government and Central Bank (ECA 0-1) 0%
9 Claims on Foreign Government and Central Bank (ECA - 2) 20%
11 Claims on Foreign Government and Central Bank (ECA 4-6) 100%
13 Claims On BIS, IMF, ECB, EC and on Multilateral Development Banks (MDBs) 0%

recognised by the framework.
14 Claims on Other Multilateral Development Banks 100%
15 Claims on Domestics Public Sector Entities 100%
16 Claims on Public Sector Entity (ECA 0-1) 20%
17 Claims on Public Sector Entity (ECA 2) 50%
18 Claims on Public Sector Entity (ECA 3-6) 100%
19 Claims on Public Sector Entity (ECA 7) 150%
20 Claims on domestic banks that meet capital adequacy requirements 4,492,564,743 4,492,564,743 20% 898,512,949
21 Claims on domestic banks that do not meet capital adequacy requirements 100%
22 Claims on foreign bank (ECA Rating 0-1) 21,326,351,469 21,326,351,469 20% 4,265,270,294
23 Claims on foreign bank (ECA Rating 2) 1,377,541 1,377,541 50% 688,770
24 Claims on foreign bank (ECA Rating 3-6) 100%
25 Claims on foreign bank (ECA Rating 7) 150%
26 Claims on Foreign bank incorporated in SAARC Region operating with a buffer 111,777,531 111,777,531 20% 22,355,506
of 1% above their respective regulatory capital requirement
27 Claims on Domestic Corporates (Credit rating score equivalent to AAA) 50%
121
122
Continued
28 Claims on Domestic Corporates (Credit rating score equivalent to AA+ to AA-) 3,237,780,245 3,237,780,245 70% 2,266,446,171
29 Claims on Domestic Corporates (Credit rating score equivalent to A+ to A-) 3,401,610,017 3,401,610,017 80% 2,721,288,014
30 Claims on Domestic Corporates (Credit rating score equivalent to BBB+ & 25,164,826,614 4,305,315,393 20,859,511,221 100% 20,859,511,221
below)
31 Claims on Domestic Corporates (Unrated) 31,500,425,325 12,456,136 4,765,100,000 26,722,869,189 100% 26,722,869,189
32 Claims on Foreign Corporates (ECA 0-1) 20%
33 Claims on Foreign Corporates (ECA 2) 50%
34 Claims on Foreign Corporates (ECA 3-6) 100%
35 Claims on Foreign Corporates (ECA 7) 150%
36 Regulatory Retail Portfolio (Not Overdue) 3,058,725,329 36,671,075 3,022,054,254 75% 2,266,540,691
37 Claims fulfilling all criterion of regulatory retail except granularity 100%
38 Claims secured by residential properties 10,981,218,573 5,560 10,981,213,013 60% 6,588,727,808
39 Claims not fully secured by residential properties 150%
40 Claims secured by residential properties (Overdue) 446,654,154 53,959,567 392,694,587 100% 392,694,587
41 Claims secured by Commercial real estate 45,300,750 45,300,750 100% 45,300,750
42 Past due claims (except for claim secured by residential properties) 914,604,608 548,753,165 365,851,443 150% 548,777,164
43 High Risk claims 8,900,403,216 203,987,988 245,537,640 8,450,877,588 150% 12,676,316,382
44 Lending against securities (bonds) 100%
45 Lending against Shares (upto Rs.2.5 Million) 100%
46 Trust Receipt Loans for Trading Firms 2,669,967,313 2,669,967,313 120% 3,203,960,775
47 Investment in equity and other capital instruments of institutions listed in the 1,052,250,000 1,052,250,000 100% 1,052,250,000
stock exchange
48 Investment in equity and other capital instruments of institutions not listed in 3,735,500 3,735,500 150% 5,603,250
the stock exchange

49 Staff loan secured by residential property 882,937,328 882,937,328 60% 441,468,664
50 Interest Receivable/claim on government securities 749,781 749,781 0%
51 Cash in transit and other cash items in the process of collection 20%
52 Other Assets (as per attachment) 3,563,551,875 36,686,591 3,526,865,284 100% 3,526,865,284
Total (A) 153,190,546,682 892,520,082 9,315,953,033 142,982,073,567 88,505,447,467

Gross Book Value Specific Provision Eligible CRM Net Value Risk Weight RWE
S.N. B. Off Balance Sheet Exposures
(a) (b) (c) (d=a-b-c) (e) (f=d*e)
1 Revocable Commitments 0%
2 Bills Under Collection 693,114,569 693,114,569 0%

3 Forward Exchange Contract Liabilities 6,031,786,575 6,031,786,575 10% 603,178,657
4 LC Commitments with Original Maturity Up to 6 months (domestic counterparty) 5,234,450,334 189,700,301 5,044,750,033 20% 1,008,950,007
Foreign Counterparty (ECA Rating 0-1) 20%
Foreign Counterparty (ECA Rating 2) 50%
5 L C Commitments with Original Maturity Over 6 months (domestic counterparty) 480,366,213 3,632,815 476,733,398 50% 238,366,699
6 Bid Bond, Performance Bond and Counter Guarantee (domestic counterparty) 2,688,759,032 230,959,937 2,457,799,095 40% 983,119,638
Foreign Counterparty (ECA Rating 0-1) 9,424,501,264 7,484,017,396 1,940,483,867 20% 388,096,773
Foreign Counterparty (ECA Rating 2) 20,425,294,572 9,489,531,420 10,935,763,152 50% 5,467,881,576
Foreign Counterparty (ECA Rating 3-6) 458,175,422 458,175,422 100% 458,175,422
7 Underwriting commitments 50%
8 Lending of Bank's Securities or Posting of Securities as collateral 100%
9 Repurchase Agreements, Assets sale with recourse 100%
10 Advance Payment Guarantee 24,966,832,288 12,648,064,334 12,318,767,954 100% 12,318,767,954
11 Financial Guarantee 2,375,474,130 1,388,512,226 986,961,904 100% 986,961,904
12 Acceptances and Endorsements 3,152,108,738 92,924,678 3,059,184,060 100% 3,059,184,060
13 Unpaid Portion of Partly paid shares and Securities 100%
14 Irrevocable credit commitments (short term) 12,712,103,096 538,773,007 12,173,330,089 20% 2,434,666,018
123
124
Continued
15 Irrevocable Credit commitments (long term) 2,654,821,328 2,654,821,328 50% 1,327,410,664
16 Claims on foreign bank incorporated in SAARC region operating with a buffer of 1% 20%
above their respective regulatory capital requirement
17 Other Contingent Liabilities 6,033,657,946 528,218,181 5,505,439,765 100% 5,505,439,765
18 Unpaid Guarantee Claims 500,000 500,000 200% 1,000,000
Total (B) 97,331,945,506 32,594,334,296 64,737,611,211 34,781,199,138
Total RWE for Credit Risk Before Adjustment (A) + (B) 250,522,492,188 892,520,082 41,910,287,328 207,719,684,778 123,286,646,605
Adjustments under Pillar-II
Add: 10% of the loan and facilities in excess of Single Obligor Limits (6.4 a 3)
Add: 1% of the contract (sale) value in case of the sale of credit with recourse (6.4
a 4)
Total RWE for Credit Risk (After Bank's adjustments of Pillar II) 250,522,492,188 892,520,082 41,910,287,328 207,719,684,778 123,286,646,605

Risk Weighted Exposure for Operational Risk
SN Particulars 2078/79 2077/78 2076/77

1 Net Interest Income 3,740,462,101 2,593,794,084 3,456,017,661
2 Commission and Discount Income 932,644,939 700,301,174 756,777,070
3 Other Operating Income 2,920,598 10,521,651 179,228,465
4 Exchange Fluctuation Income 657,438,566 759,045,455 580,803,550
5 Additional/ Deduction Interest Suspense during the period
Gross Income (a) 5,333,466,204 4,063,662,364 4,972,826,746
Alfa (b) 15% 15% 15%
Fixed Percentage of Gross Income [ c=(a*b)] 800,019,931 609,549,355 745,924,012
Capital Requirement for operational risk(d) (average of c) 718,497,766
Risk Weight (reciprocal of capital requirement of 11%) in times (e) 9.09
Equivalent Risk Weight Exposure [f=(d*e)] 6,531,144,690
SRP 6.4a (8) Adjustments under Pillar II

(If Gross Income for the last three years is negative)
Total Credit and Investment (net of Specific Provision) of related
month
Capital Requirement for Operational Risk (5% of net credit and
investment)
Risk Weight (reciprocal of capital requirement of 11%) in times 9.09
Equivalent Risk Weight Exposure (g)
Equivalent Risk Weight Exposure [(h=f+g)] 6,531,144,690
125
Risk Weighted Exposures for Market Risk
S. N. Currency Open Position Exchange Rate Open Position Relevant Open

(FCY) (NPR) Position
1 INR 112,749,877 1.60 180,484,366 180,484,366
2 USD (142,462) 131.53 (18,738,076) 18,738,076
3 GBP 31,395 172.55 5,417,237 5,417,237
4 EUR 1,871 147.69 276,312 276,312
5 THB 460 3.80 1,748 1,748
6 CHF (67,421) 153.10 (10,322,102) 10,322,102
7 AUD (9,806) 90.38 (886,261) 886,261
8 CAD 4,229 100.25 423,921 423,921
9 SGD 16,523 99.65 1,646,536 1,646,536
10 JPY 2,178,407 0.95 2,069,487 2,069,487
11 HKD 124,271 16.83 2,091,480 2,091,480
12 DKK 23,921 19.82 474,115 474,115
13 SEK 33,198 12.85 426,600 426,600
14 SAR 39,777 35.06 1,394,582 1,394,582
15 QAR 410 36.08 14,793 14,793
16 AED 4,960 35.81 177,618 177,618
17 MYR 6,834 29.06 198,596 198,596
18 KRW 10,000 0.10 1,040 1,040
19 CNY 5,764 18.43 106,224 106,224
20 KWD 241 429.39 103,483 103,483
21 BHD 942 348.96 328,720 328,720
(a) Total Open Position 225,583,294
(b) Fixed Percentage 5%
(c) Capital Charge for Market Risk [c=(a*b)] 11,279,165
(d) Risk Weight (reciprocal of capital requirement of 11%) in times 9.09
(e) Equivalent Risk Weight Exposures [e=(c*d)] 102,527,607
d. Amount of NPAs (both Gross and Net)

• Restructure/Reschedule Loan
Gross value NPR57,196,414
Net values NPR50,046,863
• Substandard Loan
Net values NPR337,960,687
• Doubtful Loan
Net value NPR88,963,243
• Loss Loan
Net value: NPR27,016,127
e. NPA ratios
• Gross NPA to gross advances
1.18%
• Net NPA to net advances
0.49%

5.2.3 Compliance with external requirement

The Bank has complied with the requirement of capital adequacy framework issued by Nepal Rastra Bank throughout the
reporting period.
5.3 Classification of financial assets and financial liabilities

Classification of financial assets and financial liabilities and their measurement has been presented below
Financial Assets Amortised Cost FVTOCI* FVTPL** Total

Cash in hand 1,024,792,056 1,024,792,056
Balances with B/FIs 1,217,610,884 1,217,610,884
Money at call and short notice 6,504,258,400 6,504,258,400
Interbank placement 13,701,007,177 13,701,007,177
Balance at NRB 4,577,264,179 4,577,264,179
Derivate financial instrument 8,182,017 8,182,017
Loans & Advances 96,935,714,489 96,935,714,489
Government bonds
Government treasury bills 23,642,871,504 23,642,871,504
Debt securities 3,070,763,696 3,070,763,696
Equity investments 557,618,043 557,618,043
Other assets 1,222,458,199 1,222,458,199
Total Financial Assets 151,896,740,584 557,618,043 8,182,017 152,462,540,643
*Fair value through other comprehensive income
** Fair value through profit or loss
FVTPL
Financial Liabilities Amortised Cost Held for Designated at Total
trading FVTPL
Deposits from BFIs 4,992,295,339 4,992,295,339
Deposits from customers 117,500,977,420 117,500,977,420
Refinance from NRB
Financial Derivative Liabilities 88,848,457 88,848,457
Borrowing 2,630,600,000 2,630,600,000
Debt Securities 2,493,868,274 2,493,868,274
Employee related liabilities 642,744,912 642,744,912
Bills payable 130,178,961 130,178,961
Creditors and accruals 511,941,874 511,941,874
Interest payable on deposit 751,239,740 751,239,740
Interest payable on borrowing 119,027,344 119,027,344
Unpaid Dividend 162,768,283 162,768,283
Total Financial Liabilities 130,120,783,433 88,848,457 130,209,631,890
127
5.4 Operating Segment Information
5.4.1 General information
Segment description: The Bank runs its operations under the following segments:
Segment Definition Activity

Consumer, Private and Business Banking serves small businesses and individuals, from
Mass Retail clients to affluent and high-net-worth individuals through the branch network
Consumer, Private and Business and other delivery channels. This segment raises deposits from customers and makes
Banking loans and provides other services to such customers. This segment also includes activities
(CPBB) relating to credit cards, debit cards, mortgage loans, auto loans, SME segments and
third-party product distribution. Exposures are classified under CPBB taking into account
the orientation, product, granularity and individual exposure criteria.
Local corporate financing, advances to partnership firms, companies and statutory bodies,
Corporate, Commercial and
which are not included under Retail Banking segments, Treasury including foreign exchange,
Institutional Banking (CCIB)
fixed income, and money market and derivative transactions are reported under CCIB
Others include Treasury Markets, Corporate Real Estate Services, other items not allocable
Others
in the aforementioned segments.
5.4.2 Information about profit or loss, assets and liabilities
SN Particulars CPBB CCIB Others Total

a. Revenues from external customers 2,042,969,151 3,909,298,383 1,890,286,990 7,842,554,524
b. Intersegment revenues 1,462,252,953 (1,354,079,105) (108,173,848)
c. Net Revenue 592,764,989 5,252,220,047 1,997,569,488 7,842,554,524
d. Interest revenue 15,640,279,475 5,382,083,893 (8,278,325,049) 12,744,038,318
e. Interest expense 19,070,019,280 3,085,364,146 (15,367,370,268) 6,788,013,158
f. Net interest revenue 1,687,218,969 2,400,894,275 1,867,911,916 5,956,025,161
g. Depreciation and amortisation 86,253,367 72,531,474 158,784,841
h. Segment profit /(loss) before tax 400,441,481 3,242,211,568 1,329,054,648 4,971,707,697
Entity’s interest in the profit or loss of associates
i.
accounted for using equity method
j. Other material non-cash items:
k. Impairment of assets 554,578,964 43,667,177 598,246,140
l. Segment assets 47,078,870,024 45,842,421,716 58,456,717,660 151,378,009,400
m. Segment liabilities 62,879,874,109 40,913,610,412 27,441,834,068 131,235,318,589
5.4.3 Measurement of operating segment profit or loss, assets and liabilities
Segment revenues are aggregate of net income reported by the Bank under various heads. Segment results are determined after
considering the following inter-unit notional charges/recoveries.
Fund Transfer Pricing (FTP): Treasury gives notional interest benefits to other segments for funds mobilised by the latter through
deposits and similarly charges notional interest to other segments for funds utilised by them for lending purpose. FTP mechanism
incorporates liquidity position as well as interest rate scenario and is allocated at a segment and product level based on nature
and tenor of assets/liabilities, Treasury calculates notional interest rates used for this purpose.
Support costs (costs pertaining to Finance, HR, Corporate Real Estate Services, Legal & Compliance, Corporate Affairs, Information
Technology etc) are allocated to CPBB, CCIB & Other segments based on the Management’s estimates of the benefits accruing to
these segments for the costs incurred. This is similar to the basis used for the internal management reporting.

5.4.4 Reconciliations of reportable segment revenues, profit or loss, assets and liabilities
a. Revenue
Total revenues for reportable segments 7,842,554,524
Other revenues
Elimination of intersegment revenues
Entity’s revenues 7,842,554,524
b. Profit or loss
Total profit or loss for reportable segments 4,959,616,767
Other profit or loss
Elimination of intersegment profits
Unallocated amounts:
Profit before income tax 4,959,616,767
c. Assets
Total assets for reportable segments 151,378,009,400
Other assets
Unallocated amounts
Entity’s assets 151,378,009,400
d. Liabilities
Total liabilities for reportable segments 131,235,318,589
Other liabilities
Unallocated liabilities
Entity’s liabilities 131,235,318,589
5.4.5 Information about products and services

Information about product & services is mentioned in point no. 5.4 above.
5.4.6 Information about geographical areas

Revenue from following geographical areas
a Domestic 7,842,554,524
Koshi Province 227,102,472
Madhesh Province 239,715,056
Bagmati Province 7,331,131,446
Gandaki Province (241,752,725)
Lumbini Province 286,358,275
Karnali Province
Sudurpashchim Province
b Foreign
Total 7,842,554,524
129
5.4.7 Information about major customers
Revenue from a single external customer is less than 10 percent of the Bank’s total revenue.
5.5 Share options and share based payment

Share options is a contract that gives the holder the right, but not the obligation, to subscribe the Bank’s shares at a fixed or
determinable price for a specified period.
A share-based payment is a transaction in which the Bank receives goods or services either as consideration for its equity
instruments or by incurring liabilities for amounts based on the price of the Bank’s shares or other equity instruments of the Bank.
Explanatory Notes
The Bank does not have any share options contract and share based payment transactions for the reporting period.
5.6 Contingent liabilities and commitment

Contingent liabilities: Where the Bank undertakes to make a payment on behalf of its customers for guarantees issued, such as for
performance bonds or as irrevocable letters of credit as part of the Bank’s transaction Banking business for which an obligation
to make a payment has not arisen at the reporting date, those are included in these financial statements as contingent liabilities.
Other contingent liabilities primarily include revocable letters of credit and bonds issued on behalf of customers to customs, for
bids or offers.
Commitments: Where the Bank has confirmed its intention to provide funds to a customer or on behalf of a customer in the form
of loans, overdrafts, future guarantees, whether cancellable or not, or letters of credit and the Bank has not made payments at the
reporting date, those instruments are included in these financial statements as commitments.
Explanatory Notes
The Bank seeks to comply with all applicable laws and regulations, but may be subject to regulatory actions and investigations,
the outcome of which are generally difficult to predict and can be material to the Bank.
In addition to these matters, the Bank may receive legal claims against it in the normal course of business. The Bank considers
none of these claims as material. Where appropriate, the Bank recognises a provision for liabilities when it is probable that an
outflow of economic resources embodying economic benefits will be required and for which a reliable estimate can be made of
the obligation(s).
Contingent liabilities and commitment Current Year Previous Year

Bills Under Collection 693,114,569 1,833,314,670
Forward Exchange Contract Liabilities 6,031,786,575 1,631,872,645
Letter of Credit 5,714,816,547 6,833,262,898
Bid Bond, Performance Bond and Counter Guarantee 64,323,772,615 47,827,753,251
Advance Payment Guarantee 22,650,000 77,076,733
Financial Guarantee 353,858,300 142,925,900
Acceptances and Endorsements 3,152,108,738 1,793,116,015
Irrevocable credit commitments (short term) 35,248,853,759 32,907,256,512
Other Contingent Liabilities 547,783,250 274,414,500
Tax Litigation* 1,125,130,490 111,943,211
Total 117,213,874,842 93,432,936,334
* The Bank has income tax litigation for FY 2073/74 and FY 2075/76 on disallowance of gratuity funding to Approved Retirement
Fund and share issue expenses. The total tax demand from tax authority including fines, interest and advance tax shortfall is
NPR211.87Mn. Further the Bank is in litigation on tax on bonus share distributed from premium on further public offering (FPO)
against the provision of Finance Act 2080 amounting NPR913Mn.
Other details relating to Contingent liabilities and commitment is depicted under schedule 4.28.

5.7 Related party disclosure

The Bank identifies the following as related parties under the requirements of NAS 24.
i) Ultimate parent company as a result of the Bank’s major shareholders and companies within definition of the Group of
the ultimate parent company
ii) Post-employment benefit plan for the benefit of the employees
iii) Directors of the Bank and their close family members, if any
iv) Key Managerial Personnel and their close family members, if any
Explanatory Notes
Ultimate Parent and the Group
i) Ultimate Parent Company : Standard Chartered Plc., London, UK

ii) Major Shareholders
(a) Standard Chartered Grindlays Ltd, Australia: Holding 46.81% of shares
(b) Standard Chartered Bank, UK: Holding 23.40% of shares
Related parties with whom transactions have occurred during the current year.
(a) Head Office and Branches of Head Office

1. Standard Chartered Bank, UK
2. Standard Chartered Bank, India
3. Standard Chartered Bank, Japan
4. Standard Chartered Bank, Singapore
5. Standard Chartered Bank, USA
6. Standard Chartered Bank, Germany
7. Standard Chartered Bank, Bangladesh
8. Standard Chartered Bank, Brunei
9. Standard Chartered Bank, UAE
10. Standard Chartered Bank, Sri Lanka
11. Standard Chartered Bank, Qatar
12. Standard Chartered Bank, Jordan
13. Standard Chartered Bank, Indonesia
14. Standard Chartered Bank, South Africa
(b) Subsidiaries of Head Office (Standard Chartered Bank UK)

1. Standard Chartered Bank (Hong Kong) Limited
2. Standard Chartered Bank (China)
3. Standard Chartered Bank Malaysia
4. Standard Chartered Bank Singapore (Sub)
5. Standard Chartered Bank, Kenya
6. Standard Chartered Bank, Zambia
7. Standard Chartered Bank, Thailand
8. Standard Chartered Bank, Mauritius Limited
9. Standard Chartered Bank, Ghana
10. Standard Chartered Bank, South Korea
11. Standard Chartered Bank, Uganda
The Bank being a subsidiary of an international bank avails of support services from its global support functions governed by
approved agreements. Foreign currency funds have mainly been placed with Standard Chartered Bank (SCB) network points.
These funds are all under the management of Standard Chartered Group with high governance levels and acceptable country
risks and returns.
Transaction during the period (NPR in ‘000) 2079/80

Interest on placements 825,259
Shared Service Centre Costs 160,184
Year End Balance (NPR in ‘000)
Placements 20,104,460
Nostro Balances 809,135
Interest Receivable 100,805
Trade Contingents 35,674,500
Fee Income Receivables 90,211
131
Post Employee benefit plan for the benefit of Bank’s employees
The Bank operates an approved retirement benefit plan for its employees. The amount of contribution made to such plan and
amount of payments made to the Bank’s employees under the Bank’s staff rules have been described in note 3.15 and reported
under schedule 4.23.
Transactions with and payments to Directors of the Bank

The following payments have been made to the Directors of the Bank during the reporting period.
Particulars (NPR in ‘000) 2079/80

Directors’ sitting fees 882
Directors’ travel and meeting expenses 145
Remuneration and bonus of the Executive Director 60,194
Other benefits of the Executive Director 13,350
Details of the Board of Directors and their composition, and changes if any during the period, are disclosed in the Director’s report.
There have been no payments or transactions with the close family member of the Directors, except in the normal course of
banking business.
Transactions with and payment to key management personnel (other than Directors) compensation
The Bank defines its executive committee members as the key management personnel other than its Directors. One executive
committee member is the Director of the Bank. Payments and transactions relating to the Executive Director are disclosed above.
Particulars 2079/80 Pay Elements considered

Salary, Allowances, PF, SSF-1.67% Other Benefits, SSF -
Remuneration and current employee benefits 65,711,085
8.33% Gratuity
SSF Contribution 1,761,845 SSF Contribution (8.33%+1.67%)
Vehicle benefit 3,467,903 Car Allowance
Bonus 22,281,835 Statutory Bonus / Welfare Assistance
Performance Bonus 22,045,046 Performance Bonus
Festival Allowance, Medical Claim Reimbursement
Other benefits and payments 3,747,486
(Domiciliary), Leave Encashment
Termination Benefits 93,333 PF, Gratuity & Leave Encashment paid to leavers
Benefits are paid as per the Staff service bye-laws. Statutory bonus is paid in accordance with the requirement of the Bonus
Act. Performance bonus is paid in accordance with the performance assessment procedures practised within the Bank. Vehicle
allowance is as per the Bank’s Rules.
Details of the key management personnel and their composition, and changes if any during the period, are disclosed in the key
management personnel report.
There have been no payments or transactions with the close family members of the key managerial personnel except in the normal
course of banking business.
5.8 Merger and acquisition

The Bank has not entered into any merger and acquisitions deal during the reporting period.
5.9 Additional disclosures of non-consolidated entities

The Bank has no investment in any entities which requires consolidation as per applicable NFRS nor any investment in associates
which needs to be pooled in the financial statement of the Bank. Except for strategic investment in equity shares, the Bank has no
other equity investment.
5.10 Events after reporting date

The Bank monitors and assesses events that may have potential impact to qualify as adjusting and / or non- adjusting events
after the end of the reporting period. All adjusting events are adjusted in the books with additional disclosures and non-adjusting
material events are disclosed in the notes with possible financial impact, to the extent ascertainable.

Explanatory Notes
There are no material events that have occurred subsequent to 16 July 2023 till the signing of this financial statement on 30 October
2023.
5.11 Disclosure effect of transition from previous GAAP to NFRSs

Not applicable to the Bank as it is not the first-time adopter as per NFRS1 “First Time Adoption of Nepal Financial Reporting
Standards”.
5.12 Others
5.12.1 Training and Corporate Social Responsibility (CSR) Fund Allocations

As per Nepal Rastra Bank directive, the Bank is required to create a fund for corporate social responsibilities related activities
equivalent to 1% of the net profit. The Bank has allocated 1% of the net profit to CSR fund amounting to NPR34.65Mn. As per the
requirement of unified directive 6(16 cha) the detail of CSR expenses are as follows:
Segment wise CSR expense details:
Segment Amount
Environment/ Society 2,041,032
Education 4,990,400
Health 11,525,000
Financial Literacy 2,722,500
Others 1,280,411
Total 22,559,343
Province wise CSR expenses details:
Province Amount
Koshi Province 3,638,024
Madhesh Province 5,930,214
Bagmati Province 8,396,702
Gandaki Province 1,130,214
Lumbini Province 1,203,759
Karnali Province 1,130,214
Sudurpashchim Province 1,130,214
Total 22,559,343
Similarly, as per Nepal Rastra Bank directive, the Bank is required to spend 3% of staff cost in the Training & Development of the
staff. The Bank has spent NPR9,719,904 in this head, besides this, employees of the Bank being an integral part of the Standard
Chartered Group are required to undergo classroom, virtual, e-Learning courses – various trainings modules of the Standard
Chartered Group which are free of cost to the Bank. In view of that, no separate fund is created for Training and Development
133
5.12.2 Compliance with NRB provision relating to COVID-19 & Others
As of Ashadh end 2080
Particulars
No of Customers Amount (NPR)
Accrued Interest Received after Ashadh end 2080 till 15 Shrawan 2080 Nil Nil
Additional 0.3% Loan Loss Provision created on Pass Loan Portfolio Nil Nil
Extension of moratorium period of loan provided to Industry or Project under Nil Nil
construction
Restructured/Rescheduled Loan with 5% Loan Loss Provision 21 764,365,575
Enhancement of Working Capital Loan by 20% to COVID affected borrowers Nil Nil
Enhancement of Term Loan by 10% to COVID affected borrowers Nil Nil
Expiry Date of Additional 20% Working Capital Loan (COVID Loan) extended for up Nil Nil
to 1 year with 5% provisioning
Expiry Date of Additional 10% Term Loan (COVID Loan) extended for up to 1 year Nil Nil
with 5% provisioning
Time Extension provided for repayment of Principal and Interest for up to two years 9 55,865,292
as per clause 41 of NRB Directives 2
During FY 2079/80
Particular
Refinance Loan Nil Nil
Business Continuity Loan Nil Nil
As of Ashadh 2080
Particular
Subsidised Loan 556 1,614,442,839

Condensed Consolidated Statement of Financial Position

As on Quarter ended 31 Ashadh 2080
NPR In ‘000
Assets This Quarter Ending Immediate Previous
Year Ending
Cash and cash equivalent 34,872,083 19,139,900
Due from Nepal Rastra Bank 4,088,938 2,380,226
Placement with Bank and Financial Institutions 6,940,365 2,567,372
Derivative financial instruments 8,182 22,003
Other trading assets
Loan and advances to B/FIs 16,830,213 10,217,346
Investment securities 8,578,067 7,910,850
Current tax assets 137,492 113,133
Investment in subsidiaries
Investment in associates
Investment property
Property and equipment 568,144 612,940
Goodwill and Intangible assets
Deferred tax assets 9,966 51,174
Other assets 1,718,145 1,143,362
Total Assets 151,609,155 123,355,710
Liabilities
Due to Bank and Financial Institutions 4,992,295 8,223,667
Due to Nepal Rastra Bank 514,986
Derivative financial instruments 88,848 185
Deposits from customers 117,500,875 93,721,916
Borrowing 2,630,600
Current Tax Liabilities
Provisions
Deferred tax liabilities
Subordinated Liabilities
Total liabilities 131,431,846 105,220,608
Equity
Share capital 9,429,454 9,429,454
Share premium
Retained earnings 2,733,936 2,197,903
Reserves 8,013,919 6,507,745
Total equity attributable to equity holders 20,177,308 18,135,102
Total equity 20,177,308 18,135,102
Total liabilities and equity 151,609,155 123,355,710
135
Condensed Consolidated Statement of Profit or Loss
For the Quarter ended 31 Ashadh 2080
NPR In ‘000
Correspoding
Particulars
This Quarter Upto This This Quarter Upto This
Quarter (YTD) Quarter (YTD)
Interest income 3,527,815 12,743,270 2,603,189 7,527,920
Interest expense 1,979,833 6,788,013 1,333,792 3,787,458
Net interest income 1,547,983 5,955,257 1,269,397 3,740,462
Fee and commission income 511,439 1,536,212 241,150 989,622
Fee and commission expense 137,926 186,352 30,182 56,977
Net fee and commission income 373,513 1,349,860 210,967 932,645
Net interest, fee and commission income 1,921,495 7,305,117 1,480,364 4,673,107
Net trading income 134,929 582,147 157,034 657,439
Other operating income 17,760 20,448 (7,048) 2,921
Total operating income 2,074,183 7,907,713 1,630,349 5,333,466
Impairment charge/(reversal) for loans and other losses 159,758 598,333 172,612 134,307
Net operating income 1,914,425 7,309,380 1,457,737 5,199,159
Operating expense
Personnel expenses 416,555 1,551,311 357,534 1,267,997
Other operating expenses 148,621 550,884 132,226 542,074
Depreciation & Amortisation 38,914 158,785 60,412 148,643
Operating Profit 1,310,335 5,048,400 907,566 3,240,445
Non operating income 7,448 7,448
Non operating expense 10,169 19,539 2,431 8,490
Profit before income tax 1,307,614 5,036,309 905,135 3,231,955
Income tax expense 392,284 1,510,893 277,975 976,021
Current Tax 392,284 1,510,893 321,442 1,019,488
Deferred Tax (43,467) (43,467)
Profit/ (Loss) for the period 915,330 3,525,417 627,160 2,255,934
Condensed Consolidated
Statement of Comprehensive lncome
Profit/(loss) for the period 915,330 3,525,417 627,160 2,255,934
Other Comprehensive lncome 28,447 96,152 (18,084) (64,804)
Total Comprehensive lncome 943,777 3,621,568 609,076 2,191,130
Basic earnings per share 37.39 37.39 23.92 23.92
Diluted earnings per share 37.39 37.39 23.92 23.92
Profit attributable to:

Equity holders of the Bank 943,777 3,621,568 609,076 2,191,130
Total 943,777 3,621,568 609,076 2,191,130

Ratios as per NRB Directive

Correspoding
Ratios
This Quarter Upto This This Quarter Upto This
Quarter (YTD) Quarter (YTD)
Capital fund to RWA 17.12% 16.00%
Non performing loan (NPL) to toal loan 1.17% 0.59%
Total loan loss provision to Total NPL 198.54% 303.08%
Cost of Funds 6.91% 6.21%
Credit to Deposit Ratio ( As per NRB Directive) 75.80% 85.15%
Base Rate 9.02% 8.81%
Interest Rate Spread 4.00% 4.23%
137
Statement of Distributable Profit or Loss
For the quarter ended 31 Ashadh 2080 (As per NRB Regulation)
NPR In ‘000
Upto this Quarter YTD Correspondng Quarter YTD
Net profit or (loss) as per statement of profit or loss 3,525,417 2,255,934
Appropriations
a. General reserve (705,083) (451,187)
b. Foreign exchange fluctuation fund (4,495)
c. Capital redemption reserve (480,000)
d. Corporate social responsibility fund (35,254) (22,559)
e. Employees' training fund
f. Other
Profit or (loss) before regulatory adjustment 2,300,584 1,782,188
Regulatory adjustment
a. Interest receivable (-)/previous accrued interest received (+) (203,058) (199,058)
b. Short loan loss provision in accounts (-)/reversal (+)
c. Short provision for possible losses on investment (-)/reversal (+)
d. Short loan loss provision on Non Banking Assets (-)/resersal (+)
e. Deferred tax assets recognised (-)/ reversal (+) (71,240)
f. Goodwill recognised (-)/ impairment of Goodwill (+)
g. Bargain purchase gain recognised (-)/resersal (+)
h. Actuarial loss recognised (-)/reversal (+) (4,691) 44,629
i. Other
Net Profit for the quarter ended on 31 Ashadh 2080 available for 2,092,835 1,556,519
distribution
Opening Retained Earning as on 1 Shrawan, 2079 2,197,903 1,760,918
Adjustment (+/-)
Distribution:
Bonus shares issued (857,223)
Cash Dividend Paid (1,556,803) (262,310)
Total Distributable profit or (loss) as on quarter end date 2,733,936 2,197,903
Annualised Distributable Profit/Loss per share 28.99 23.31
Explanatory Notes:
1. Loans & advances includes loans to BFIs, customers and staffs. The fair value of loans & advances is the carrying amount using
effective interest rate method. Impairment on loans & advances is calculated at the higher of NRB directive 2 and NAS 39. Loans
& advances is calculated as the summation of loan outstanding and accrued interest on these loans less impairment provisions,
unamortised fee, unamortised deferred benefits if any.
2. Investment in securities has been marked to market using NFRS 13 input value and has been measured at Fair Value Through
Other Comprehensive Income.
3. Effective Interest rate has been used for recognition of interest income.
4. Personnel Expenses includes staff bonus and staff benefits amortisation.
5. Immediate previous year ending figures in statement of financial position are updated unaudited figures.
6. Regulatory adjustments includes accrued interest receivable on loans and advances, deferred tax assets and actuarial loss.
7. The above figures are subject to change as per the instructions and directions from Nepal Rastra Bank / Statutory Auditors.
8. Detailed interim report has been published in the Bank’s website.

Comparison of Unaudited and Audited Financial Statements

As of Fiscal Year 2079/80
Statement of Financial Position NPR in ‘000
As per As per
unaudited Audited
Variance Reasons for Variance
Financial Financial
Statement Statement
Assets In amount In %
Error in Treasury Bills maturity profile
due to system change. Reclassified
Cash and cash equivalent 34,872,083 16,961,548 (17,910,535) -51.4% to investment securities and
negative nostro balance reclassified
from other liabilities
Due from Nepal Rastra Bank 4,088,938 4,032,144 (56,793) -1.4% Reclass to cash and cash equivalent
Placement with Bank and
6,940,365 6,940,365 0.0%
Financial Institutions
Derivative financial instruments 8,182 8,182 0.0%
Loan and advances to B/FIs 16,830,213 16,830,213 0.0%
Adjustment of Loan Loss Provision,
Accrued Interest Receivable (AIR)
Loans and advances to customers 77,857,560 77,831,303 (26,257) 0.0%
and deferred staff benefits in Loans
& Advances as per NFRS
Error in Treasury Bills maturity profile
Investment securities 8,578,067 26,362,128 17,784,061 207.3% due to system change. Reclassified
from cash & cash equivalent
Current tax assets 137,492 152,504 15,012 10.9% Due to change in income
Investment in susidiaries
Investment property
Property and equipment 568,144 568,144 0.0%
Deferred tax assets 9,966 10,313 347 3.5% Due to Deferred Tax for the year
Adjustment of deferred empoyee
Other assets 1,718,145 1,681,164 (36,981) -2.2%
benefits & other reclass
Total Assets 151,609,155 151,378,009 (231,145) -0.2% Due to above transactions
139
Continued
Liabilities
Due to Bank and Financial Instituions 4,992,295 4,992,295 0.0%
Due to Nepal Rastra Bank
Derivative financial instruments 88,848 88,848 100.0%
Deposits from customers 117,500,875 117,500,977 102 0.0% Excess payment on customer account
Borrowing 2,630,600 2,630,600 0.0%
Provisions
Change in provision for statutory bonus
due to change in net income for the
Other liabilities 3,725,359 3,528,729 (196,630) -5.3%
period and negative nostro balance
reclassified to cash & cash equivalent
Debt securities issued 2,493,868 2,493,868 0.0%
Total liabilities 131,431,846 131,235,319 (196,528) -0.1% Due to above transactions
Equity
Share capital 9,429,454 9,429,454 0.0%
Share premium
Due to appropriation of profit during
Retained earnings 2,733,936 2,710,556 (23,380) -0.9%
the year and other adjustments
Due to appropriation of profit during
Reserves 8,013,919 8,002,681 (11,238) -0.1%
the year
Total equity attributable
20,177,308 20,142,691 (34,618) -0.2% Due to above transactions
to equity holders
Total equity 20,177,308 20,142,691 (34,618) -0.2% Due to above transactions
Total liabilities and equity 151,609,155 151,378,009 (231,145) -0.2% Due to above transactions


Statement of Profit or Loss NPR in ‘000
As per As per Variance
Particulars unaudited Audited
Reasons for Variance
Financial Financial In amount In %
Statement Statement
Interest income 12,743,270 12,744,038 768 0.0% Adjustment of interest income
Interest expense 6,788,013 6,788,013 0.0%
Net interest income 5,955,257 5,956,025 768 0.0% Due to above transactions
Change in Transfer Pricing
Fee and commission income 1,536,212 1,475,463 (60,749) -4.0%
Revenue and reclass of expense
Fee and commission expense 186,352 191,529 5,178 2.8% Reclass of expense
Net fee and commission income 1,349,860 1,283,934 (65,927) -4.9% Due to above transactions
Net interest, fee and commission
7,305,117 7,239,959 (65,159) -0.9% Due to above transactions
income
Net trading income 582,147 582,147 0.0%
Other operating income 20,448 20,448 0.0%
Total operating income 7,907,713 7,842,555 (65,159) -0.8% Due to above transactions
Impairment charge/(reversal) for Due to change in Loan Loss
598,333 598,246 (87) 0.0%
loans and other losses Provision
Net operating income 7,309,380 7,244,308 (65,072) -0.9% Due to above transactions
Operating expense
Staff bonus impact due to above
Personnel expenses 1,551,311 1,542,790 (8,521) -0.5% adjustments and reclass of some
expenses
CSR expense, Reversal of
Other operating expenses 550,884 571,026 20,142 3.7%
provision & other adjustments
Depreciation & Amortisation 158,785 158,785 0.0%
Operating Profit 5,048,400 4,971,708 (76,693) -1.5% Due to above transactions
Non operating income 7,448 7,448 0.0%
Non operating expense 19,539 19,539 0.0%
Profit before income tax 5,036,309 4,959,617 (76,693) -1.5% Due to above transactions
Income tax expense 1,510,893 1,494,287 (16,606) -1.1%
Current Tax 1,510,893 1,495,880 (15,012) -1.0% Due to above transactions
Deferred Tax (1,594) (1,594) 100.0% Due to Deferred Tax for the year
Profit/ (Loss) for the period 3,525,417 3,465,330 (60,087) -1.7% Due to above transactions
141
Key Indicators
NFRS based
Particulars Indicators FY FY FY FY FY
2018/2019 2019/2020 2020/2021 2021/2022 2022/2023
1. Net Profit/Gross Income Percent 46.72 39.97 34.42 42.30 44.19
2. Earning Per Share Rs. 30.39 24.81 23.92 23.92 36.75
3. Market Value Per Share Rs. 682 645 590 396 530
4. Price Earning Ratio Ratio 22.44 26.00 36.16 16.56 14.42
5. Dividend (including bonus) on Share Capital Percent 22.50 11.84 13.06 16.51 19.00
6. Cash Dividend on Share Capital Percent 22.50 4.84 3.06 16.51 19.00
7. Interest Income/Loan & Advances Percent 11.71 11.52 7.40 8.40 13.40
8. Staff Expenses/Total Operating Expenses Percent 65.89 65.48 64.06 64.74 67.89
9. Interest Expenses/Total Deposit and Percent 3.91 3.14 2.82 3.70 5.32
Borrowings
10. Exchange Fluctuation Income/Total Income Percent 16.20 14.97 18.81 12.27 7.65
11. Staff (statutory) Bonus/Total Staff Expenses Percent 35.60 28.55 21.20 28.32 35.72
12. Net Profit/Loan and Advances Percent 4.39 3.48 1.95 2.52 3.65
13. Net Profit/Total Assets Ratio 2.61 1.71 1.22 1.83 2.29
14. Total Credit/Deposit Percent 72.81 57.45 74.91 87.91 77.61
15. Total Operating Expenses/Total Assets Percent 1.76 1.45 1.43 1.59 1.50
16. Adequacy of Capital Fund on Risk Weighted
Assets
a. Core Capital Percent 18.31 16.85 15.53 14.40 14.17
b. Supplementary Capital Percent 1.38 1.66 1.64 1.55 2.92
c. Total Capital Fund Percent 19.69 18.51 17.17 15.95 17.09
17. Liquidity (CRR) Ratio 7.52 14.49 7.53 4.44 4.71
18. Non-performing Credit/Total Credit Percent 0.15 0.44 0.96 0.59 1.18
19. Base Rate Percent 7.63 7.00 5.51 8.81 9.02
20. Weighted Average Interest Rate Spread Percent 4.45 3.63 3.88 4.23 4.00
21. Book Net-worth Rs’000 14,927,075 15,102,495 16,222,118 18,135,102 20,142,691
22. Total Shares No. 80,114,307 80,114,307 85,722,308 94,294,539 94,294,539
23. Total Staff No. 531 535 504 505 504
24. Networth Per Share Rs. 186 189 189 192 214
25. Return on Equity Percent 19.49 15.15 9.44 14.21 20.78
26. Profit per Employee Rs’000 4,585 3,715 2,775 4,467 6,876

Directive from Nepal Rastra Bank while approving the Dividend Declaration/ Distribution
and Publication of Financial Statements
On the basis of financial statements and other documents submitted by that bank, the provisions of Sub-section (2) of Section
47 of Bank and Financial Institution Act, 2073 appeared to have been complied; therefore, as per Sub-section (1) of the above
Section, approval has been granted to distribute the proposed cash dividend of NPR1,791,596,240.00 (Nepalese Rupees one billion
seven hundred ninety-one million five hundred ninety-six thousand two hundred forty only), i.e. 19 percent of the paid up capital
of NPR9,429,453,895.00 (inclusive of dividend tax) only after the approval from the Annual General Meeting and also complying
with other prevalent regulatory provisions. Also the consent has been granted as per decision made to publish the annual financial
statement of FY 2079/80 for the purpose of approval by annual general meeting with following directives:
1. To take steps to completely address the observations in the Auditor’s Preliminary Report and make arrangement so that such
observations are not repeated.
2. Since the Point 7 of Directive No 10 issued by this Bank allows to make investment maximum up to 15 percent of the paid up
capital in the promoter share of any one licenced bank and financial institution or one percent of the paid up capital in other
banks and financial institutions, arrangement to be made to withhold distribution of the proposed dividend to the promoter
shareholders who hold shares more than above limit till the time they bring the shareholding within the limit.
3. Since the provision of Section 11, Sub-section 3 of Bank and Financial Institution Act 2017 requires the promoter shareholders
holding shares of more than 2 percent of the paid up capital (of this bank) to obtain approval of Nepal Rastra Bank while
selling or pledging the shares held by them, arrangement to be made to withhold distribution of the proposed dividend to the
promoter shareholders who have availed loan from other bank and financial institution against pledge of shares held by them
till the time they take approval from Nepal Rastra Bank or they release the shares by fully repaying the loan availed against
the pledge of shares.
4. To comply with the prevalent regulatory provisions while making repatriation of the amount towards payment of dividend to
the foreign shareholders.
Also to publish the above directions in a separate page of the Annual Report of that bank.
143
Five years Financial Summary
Statement of Financial Position
As per NFRS
2075-76 2076-77 2077-78 2078-79 2079-80
Particulars (NPR’000)
2018-19 2019-20 2020-21 2021-22 2022-23
Assets
Cash and cash equivalent 12,626,985 39,244,049 26,856,975 19,139,900 16,961,548
Due from Nepal Rastra Bank 2,454,907 1,985,450 2,236,482 2,380,226 4,032,144
Placement with Bank and Financial Institutions 9,902,700 4,210,500 2,567,372 6,940,365
Derivative financial instruments 43,338 41,753 273 22,003 8,182
Loan and advances to B/FIs 2,541,465 4,124,861 9,065,233 10,217,346 16,830,213
Loans and advances to customers 53,092,117 52,810,894 62,408,699 79,197,404 77,831,303
Investment securities 11,538,225 13,058,681 12,816,340 7,910,850 26,362,128
Current tax assets 50,081 171,939 124,723 113,133 152,504
Investment property
Property and equipment 147,736 187,148 277,099 265,322 568,144
Deferred tax assets 71,798 36,490 51,174 10,313
Other assets 794,831 566,508 952,940 1,490,980 1,681,164
Total Assets 93,264,183 116,438,274 114,738,763 123,355,710 151,378,009
Liabilities
Due to Bank and Financial Institutions 505,840 4,246,466 8,426,450 8,223,667 4,992,295
Due to Nepal Rastra Bank 621,511 514,986
Derivative financial instruments 1,172 20,807 185 88,848
Deposits from customers 75,731,527 95,020,841 87,564,220 93,721,916 117,500,977
Borrowing 2,630,600
Provisions 42,376 37,400 19,595 23,441
Deferred tax liabilities 20,066
Other liabilities 2,057,365 2,029,899 1,843,996 2,736,412 3,528,729
Total liabilities 78,337,109 101,335,778 98,516,645 105,220,608 131,235,319

Continued
Equity
Share capital 8,011,431 8,011,431 8,572,231 9,429,454 9,429,454
Share premium
Retained earnings 1,807,876 1,517,920 1,776,753 2,197,903 2,710,556
Reserves 5,107,767 5,573,145 5,873,134 6,507,745 8,002,681
Total Shareholders Fund 14,927,075 15,102,495 16,222,118 18,135,102 20,142,691
Contingent Liabilities
Letter of Credit 5,237,487 4,035,714 6,386,018 8,626,379 8,866,925
Guarantees 25,243,974 31,783,754 44,913,571 48,047,756 64,700,281
Forward Exchange Contracts 4,108,966 5,216,199 5,052,519 1,631,873 6,031,787
Other Contingent Liabilties 12,605,408 11,636,513 30,174,869 35,126,929 37,614,882
Total Contingent Liabilities 47,195,835 52,672,179 86,526,977 93,432,936 117,213,875
145
Five years Financial Summary
Statement of Profit or Loss
As per NFRS
2075-76 2076-77 2077-78 2078-79 2079-80
Particulars (NPR'000)
2018-19 2019-20 2020-21 2021-22 2022-23
Interest income 6,500,039 6,569,456 5,320,631 7,527,920 12,744,038
Interest expense 2,978,177 3,113,438 2,726,837 3,787,458 6,788,013
Net interest income 3,521,862 3,456,018 2,593,794 3,740,462 5,956,025
Fee and commission income 873,845 797,736 739,043 989,622 1,475,463
Fee and commission expense 45,097 40,959 38,742 56,977 191,529
Net fee and commission income 828,748 756,777 700,301 932,645 1,283,934
Net interest, fee and commission income 4,350,610 4,212,795 3,294,095 4,673,107 7,239,959
Net trading income 729,050 580,804 759,045 657,439 582,147
Other operating income 131,951 179,228 10,522 2,921 20,448
Total operating income 5,211,611 4,972,827 4,063,662 5,333,466 7,842,555
Impairment charge/(reversal) for loans and other
88,238 439,066 408,381 134,307 598,246
losses
Net operating income 5,123,373 4,533,761 3,655,281 5,199,159 7,244,308
Operating expense
Personnel expenses 1,084,359 1,104,236 1,052,255 1,267,997 1,542,790
Other operating expenses 525,696 530,301 526,332 542,074 571,026
Depreciation & Amortisation 35,691 51,856 64,105 148,643 158,785
Operating Profit 3,477,627 2,847,369 2,012,589 3,240,445 4,971,708
Non operating income 758 7,448
Non operating expense 2,950 10,612 4,998 8,490 19,539
Profit before income tax 3,474,677 2,837,515 2,007,591 3,231,955 4,959,617
Income tax expense 1,040,012 850,124 608,755 976,021 1,494,287
Current Tax 1,022,939 810,788 598,717 1,019,488 1,495,880
Deferred Tax 17,074 39,336 10,038 (43,467) (1,594)
Profit for the period 2,434,665 1,987,391 1,398,835 2,255,934 3,465,330

Continued
Accumulated Profit up to Previous Year 1,403,042 1,807,876 1,517,920 1,760,918 2,197,903

Adjustment to Opening Reserve
This Year's Profit 2,434,665 1,987,391 1,398,835 2,255,934 3,465,330
Others
Total 3,837,707 3,795,267 2,916,755 4,016,852 5,663,233
Accumulated Loss up to Previous Year
Current Year's Loss
General Reserve Fund 486,933 397,478 279,767 451,187 693,066
Foreign exchange fluctuation fund 28,817 40,862 1,331 4,495
Capital redemption reserve 480,000
Corporate social responsibility fund 22,559 34,653
Employees' training fund
Proposed Dividend 1,402,000 1,802,572 387,753 262,310 1,556,803
Proposed Issue of Bonus Shares 560,800 857,223
Special Reserve Fund
Other Appropriations 112,080 36,436 (89,650) 225,669 183,660
Accumulated Profit/(Loss) 1,807,876 1,517,920 1,776,753 2,197,903 2,710,556
Profit Before Tax 3,474,677 2,837,515 2,007,591 3,231,955 4,959,617

Return on Shareholder's Fund 19.49% 15.15% 9.44% 14.21% 20.78%
Cost Income ratio 31.58% 33.91% 40.42% 36.72% 28.98%
Profit per employee 4,585 3,715 2,775 4,467 6,876
Dividend Cover ratio 1.35 2.10 1.25 1.45 1.93
147
Comparison of Projection on Approved Prospectus
and Audited Financial Statements as of FY 2079/80
The Bank has issued “10.30% Standard Chartered Bank Nepal Limited debenture” amounting to NPR2.4Bn with a maturity of 5
years. Reasons for 15% or more variance between projection on approved prospectus and audited financial statements as of FY
2079/80 are presented below.
Statement of Financial Position Amount In NPR ‘000

Particulars Projection Audited Variance (%) Reason for 15% or more
FY 2079/80 FY 2079/80 variance
Assets
Cash and cash equivalent 20,366,690 16,961,548 -17% Due to lower money at call
Due from Nepal Rastra Bank 2,532,789 4,032,144 59% Due to higher LCY deposits
Placement with Bank and Financial 2,731,931 6,940,365 154% Due to higher placements
Institutions within SCB group
Derivative financial instruments 23,414 8,182 -65% Due to segregation of
derivative assets and
liabilities
Loan and advances to B/FIs 13,064,460 16,830,213 29% Due to credit demand in the
market
Loans and advances to customers 89,940,983 77,831,303 -13%
Investment securities 14,498,990 26,362,128 82% Due to higher investment on
treasury bills
Current tax assets 120,384 152,504 27% Due to higher advance tax
payment
Investment property
Property and equipment 484,819 568,144 17% Due to lease accounting as
per NFRS16
Deferred tax assets 54,454 10,313 -81% Due to regular business
transactions
Other assets 1,216,647 1,681,164 38% Due to regular business
transactions
Total Assets 145,035,560 151,378,009 4% Due to above transactions
Liabilities
Due to Bank and Financial Institutions 10,534,086 4,992,295 -53% Due to lower deposits from
BFIs
Due to Nepal Rastra Bank 514,986 -100% Due to settlement of
refinance facility
Derivative financial instruments 202 88,848 43971% Due to segregation of
derivative assets and
liabilities
Deposits from customers 109,465,914 117,500,977 7%
Borrowing 2,630,600 100% Due to FCY borrowing
Provisions

Continued

Other liabilities 2,999,798 3,528,729 18% Due to higher statutory bonus
resulting from higher income
Debt securities issued 2,400,000 2,493,868 4%
Total liabilities 125,914,986 131,235,319 4%
Equity
Share capital 9,429,454 9,429,454 0%
Share premium
Retained earnings 2,039,636 2,710,556 33% Due to higher net profit
Reserves 7,651,484 8,002,681 5%
Total equity attributable to equity 19,120,574 20,142,691 5%
holders
Total equity 19,120,574 20,142,691 5%
Total liabilities and equity 145,035,560 151,378,009 4%
149
Statement of Profit or Loss Amount In NPR ‘000
Particulars Projection Audited Variance (%) Reason for 15% or more
FY 2079/80 FY 2079/80 variance
Interest Income 10,008,120 12,744,038 27% Due to improved margin
Interest Expense 5,823,665 6,788,013 17% Due to higher deposits
Net Interest Income 4,184,454 5,956,025 42% Due to above transactions
Fee and Commission Income 1,111,548 1,475,463 33% Due to regular business
transactions
Fee and Commission Expense 63,997 191,529 199% Due to regular business
transactions
Net Fee and Commission Income 1,047,551 1,283,934 23% Due to above transactions
Net Interest, Fee and Commission 5,232,005 7,239,959 38% Due to above transactions
Income
Net Trading Income 774,111 582,147 -25% Due to regular business
transactions
Other Operating Income 7,860 20,448 160% Due to higher revaluation
gain
Total Operating Income 6,013,976 7,842,555 30% Due to above transactions
Impairment Charge/ (Reversal) for 268,174 598,246 123% Due to increase on NPL
Loans and Other Losses position
Net Operating Income 5,745,803 7,244,308 26% Due to above transactions
Operating Expense
Personnel Expenses 1,345,103 1,542,790 15% Due to higher statutory bonus
resulting from higher income
Other Operating Expenses 633,163 571,026 -10%
Depreciation & Amortisation 128,121 158,785 24% Due to lease accounting as
per NFRS16
Operating Profit 3,639,416 4,971,708 37% Due to above transactions
Non Operating Income 7,448 100% Due to recovery of loan
written off
Non Operating Expense 19,539 100% Due to loan written off
Profit Before Income Tax 3,639,416 4,959,617 36% Due to above transactions
Income Tax Expense 1,091,825 1,494,287 37% Due to higher income
Current Tax 1,091,825 1,495,880 37% Due to higher income
Deferred Tax (1,594) -100%
Profit for the Period 2,547,591 3,465,330 36% Due to above transactions

ªBranch Managersº
Mukesh Singh Bhawana Gurung Chinta Mani Rai Prativa Nepal

New Baneshwor Newroad, Kathmandu Naxal Boudha
Priyanka Ranjit Smriti Gurung Bhim Dhungana Uddav Sigdel

Lalitpur UN Branch Pokhara Narayanghat
Harmesh Soni Sudan Prajapati Jay Prakash Kumar Sharmila Homagain

Butwal Nepalgunj Birgunj Biratnagar
Niwesh Shrestha
Dharan
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Annual Report 2022-23

Driving commerce and prosperity

Our Valued Behaviours

Never Settle Better Together Do the right thing

• • See more in others

As a bank, we strive to give something back to the Facebook.com/StandardCharteredNP

2 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

Strategic Report Performance Highlights 4

Corporate Governance Our Approach to Corporate Governance 19

Financial Statements Consolidated Statement of Financial Position 63

192.32 5.21 5.33

Net Worth Per Share ROE Total Assets Operating Income

Price Earnings Ratio

4 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

Operating Income Operating Profit Total Assets

NPR 7.84 Bn NPR 4.97 Bn NPR 151.38 Bn

Capital Adequacy Return on Equity Dividend

17.09% 20.78% 19.00%

Point of Representation Employees

6 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

ªReport of the Board of Directorsº

Report of the BOD

NPR Bn FY 2079-80 FY 2078-79 Increase

8 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

Report of the BOD

External sector trends (Macroeconomic and financial situation data, NRB):

USD Bn Merchandise and Service Import Cover (Months)

10 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

Real GDP Forecast 2019/20 2020/21 2021/22 2022/23 2023/24 (F)

Report of the BOD

Date: 16 November 2023

12 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

ªChief Executive Officer’s Reportº

We see a substantial opportunity to create a brighter future

Our track record in the industry has been noted to be since

Major key performance indicators improved substantially

14 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

Our Corporate & Institutional Banking (CIB) services are

Our commitment to our Purpose in Nepal is emphasised by the

16 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

The financial sector of the country remains resilient and

We won the award for the ‘Best Managed

18 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

ªOur Approach to Corporate Governanceº

• The Executive Committee (EXCO) represented by heads of

• The Bank has adopted a Code of Conduct regarding

Board members Meeting attendance Meeting fees paid

20 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

Board Level Committees Gopi Bhandari, 2** Nil – Does not

• Reviewed quarterly and annual financial statements,

22 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

• Md. Yasir Arafin The ERC is represented by a senior management team

24 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

26 Standard Chartered Bank Nepal Limited - Annual Report 2022-23

Key Parameters Amount in NPR'000

Gross Loans and Advances* 95,165,597

Total Operating Income 1,773,751

Operating Profit 1,188,883