Himalayan Bank Ltd. | Annual Report 2013/14 2 Committed to change ... for better Committed to change ... for better 3 Himalayan Bank Ltd. | Annual Report 2013/14 7 9 5 13 14 16 17 18 24 35 10 20 22 29 81

Organizational Structure Organizational HBL Profile/History and ServicesProducts NetworkCorrespondent Network Local Report of Directors of the Board Disclosure HBL Additional Highlights Financial Head Office Branches and About us Vision/Mission/Objective Our Statement Chairman’s of Directors Board the Desk of CEO From Team Senior Management ...... for Better...... for

] Contents

Committed to change ...... to Committed [ Himalayan Bank Ltd. | Annual Report 2013/14 4 Committed to change ... for better Committed to change ... for better 5 Himalayan Bank Ltd. | Annual Report 2013/14 - Bank Limited of Pakistan. Despite the of Pakistan. Bank Limited competition in the Nep cut-throat been have we bankingalese sector, maintain a lead in the primaryable to banking activities-loans and deposits. -

]

to be tailored as per requirement of our as per requirement be tailored to clientele. was estab (HBL) Himalayan Bank Ltd with Habib lished in 1993 in joint venture - - - -

Us About We believe we have a strong role to to role a strong have we believe We by growth for in these endeavors play Wheth help financially. in to stepping in- financial and banks many so With stitutions in the market, what makes Bank being Himalayan us so different? the most experiencedone of banks in the country was established as four private commer one of the first er it is for business establishment or establishment business for is it er manageable social business growth, education, hous obligation, children’s we medical expenses etc., ing needs, in as a helping hand. can step cial banks and has a solid portfolio of commendable and unimpeachable helped many have We achievements. We feet. stand on their own people to to entrepreneurs many assisted have sup and have set up their businesses ported people in their time of many the flexibility Our products have need. progress, these dreams could be achieved. could dreams these progress, to pursue their dreams. With a helping hand to assist along the path of assist along the path hand to a helping With pursue their dreams. to to rise above their circumstances on the basis of enterprise and effort on the basis of enterprise their circumstances rise above to other and we have a proactive role to play for those who are striving are those who for play to role a proactive have other and we We at Himalayan Bank believe that we are much a part are we that of society as any Bank believe Himalayan at We [ Himalayan Bank Ltd. | Annual Report 2013/14 6 Committed to change ... for better Committed to change ... for better 7 Himalayan Bank Ltd. | Annual Report 2013/14 Our Mission] Himalayan Bank’s mission is to become the preferred the preferred become mission is to Bank’s Himalayan of quality financial servicesprovider country. in the ‘preferred our mission: to components two are There We believe financial services’. ‘quality and provider’ by only accomplished be will mission our that important these two satisfying with the components of all our efforts. point the focal at customer [

] Vision Our To become the Bank of first choice is the main objective is the of the Bank. the Bank of first choice become To

[ [Objective] Himalayan Bank has the vision of becoming a has the vision of becoming Bank Himalayan the countryleading bank of gaining substantial by products and premium through business growth thus ensuring attractive services customers, to all our stakeholders. to returns and substantial Himalayan Bank Ltd. | Annual Report 2013/14 8 Committed to change ... for better Committed to change ... for better 9 Himalayan Bank Ltd. | Annual Report 2013/14 - rent profit drivers. Additionally, man- Additionally, drivers. profit rent new explore agement continues to business opportunities new deliver to products and services. we Despite the political headwinds, hopeful that the countryremain will strive We forward in consensus. move the Bank ensure to focused remain to a pioneering in the leader remains banking industry in Nepal and look servingforward to our clients in the and beyond. Year New you. Thank Manoj Bahadur Shrestha of Directors Chairman, Board ly towards the Bank’s profitability and profitability and the Bank’s ly towards identify management continues to within cur further of growth areas [ - - - - -

As mentioned above, the Bank per mentioned above, As all the challenges despite well formed During facing the Nepalese economy. effortof a lot into put was year, the governance the overall strengthening policies Various structure of the bank. mar changing suit the to revised were oper several ket Similarly, conditions. and re reviewed ating manuals were risk mitigation, whilst ensure vised to on operational ef not compromising The Bank is continuously im- ficiency. and processes operations, its proving the significantly reduce to procedures lapses. risk or control of errors of the Although the political economy country uncertain,remains Bank the strategy. continue its growth aims to on SMEs and focus to Bank aims The lending opportunitiesretail grow to Key portfolio. businesses its credit treasury and like remittance, credit, - contributingbeen strong have cards ------

CHAIRMAN From the Desk of From similar to the previous fiscal year. year. fiscal the previous similar to fiscal year 2013-2014. Overall, the economy of the country of the remained the economy year 2013-2014. fiscal Overall, economy, we were pleased that the Bank reported strong profits for the for profits reported the Bank that pleased strong were we economy, to the Bank. headwinds facing the to the political and economic Despite the management team and staff members for their resolve and dedication dedication and resolve for their and staff members team the management On behalf of the Board of Directors, I would like to congratulate and thank and thank congratulate like to I would of Directors, On behalf of the Board Dear shareholders,

The economy continued to experito continued economy The close was able to government The some important particular FDI deals, ence excess liquidity, making it diffi liquidity, ence excess and financial institutions banks cult for sound invest capital into deploy to ment opportunities. Despite the chal a few by encouraged were we lenges, put into developments macro positive motion duringyear. the fiscal sector –one of in the hydropower ly the prime of the country. potentials sector can power our in Investment start of forces constellation a circular a to tailwinds strong provide can that Political process. holistic development still has the po uncertainty, however, prog for derail all potential to tential amongst political Disagreements ress. parties on and their inability agree to keythe remain constitutional issues main risk facing public confidence sentiment. and investor [ [Board of DIRECTORS]

1. Mr. Manoj Bahadur Shrestha Chairman

2. Mr. Salim Amlani First Vice Chairman

3. Mr. Himalaya S. Rana Chief Advisor to the Board

4. Mr. Radha Krishna Pote Director 8 7 5. Mr. Upendra Keshari Poudyal Professional Director

6. Mr. Prachanda Bahadur Shrestha Director

7. Mr. Surendra Silwal Alternate Director

8. Mr. Sushil Bikram Thapa Director

2 6

5 4

1 3 Himalayan Bank Ltd. | Annual Report 2013/14 12 Committed to change ... for better Committed to change ... for better 13 Himalayan Bank Ltd. | Annual Report 2013/14 ------Ashoke SJB Rana Ashoke OfficerChief Executive Himalayan Bank Ltd. results in the upcoming fiscal year. in the upcoming fiscal results you. Thank pansion through identification of new pansion through opportunities of business in all areas expansion, de credit and in particular, volume posit mobilization, remittance bread the remains Credit cards. and the Bank and the Man for and butter agement is putting concerted efforts The identify lending opportunities.to Management is constantly looking its tech opportunitiesfor improve to and quality better servicesnology for and this shall continue in the upcom Bank will contin- The as well. ing year new unchartered explore areas ue to expansion. Considerable branch for amount of time and effort will be pro and online expansion of card vided to Everybusinesses. opportunity will be fee the Bank’s enhance to explored and commission based income. I am very much hopeful that the ded ication of the Management coupled work and sinceritywith hard of all the of the Bank will yield better employees will continue to focus on business ex on business focus will continue to ------The countryThe through has been reeling of economy political The uncertainty. polit The the country ideal. is far from consensus partiesreach ical to yet are the new constitution promulgate to existing the already adding fuel to a however were There uncertainties. on part good signs few of the newly important A few government. formed thereby signed deals were FDI related the in to signal sending a positive and tour agriculture Hydro, vestors. be the sectors that the ism seem to and rightly is focusing government advantage the comparative so given too Bank The countrythe possesses. tryingis around businesses its align to that are these sectors SME’s alongside bankingThe un-banked. still largely industry a phase is also going through from of consolidation that is reflected announced in the last the mergers Recent history so. or suggests year is diminishing impactthat there of political uncertainty in private sector optimistic of therefore are We growth. in the adversities despite our growth of the country. political economy of the under the aegis Going forward, the Management of Directors, Board put in its effortto im will continue to of the Bank. governance overall prove a lot of effortto im was put in Similarly, mechanism control the overall prove operational risk avoid of the Bank to and this effort go to continue is going ManagementThe ing forward as well. - - - -

of the Bank. their contributions to this effort. Business expansion has been the focus this effort.has been the expansion to Business their contributions would sincerely like to thank the Management and all the employees for for thank the Management all the employees and like to sincerely would Bank was able to put up a great performance I year and during the fiscal put up a great able to Bank was The Bank’s performance in fiscal year 2013-14 has been remarkable. The remarkable. performance has been year 2013-14 in fiscal Bank’s The Technology has been one of the Technology now years of the Bank for strengths IT in improvement and continuous ensure was sought during to the year efficiency and quality service deliv- large ManagementThe invested ery. busi strategize chunk of its time to The credit portfolio of the bank con credit The sup well was it while grow to tinued in deposits. ported the growth by lending has been While SME and retail of the Bank during the year, the focus - lookedprof the also of some we into itable business opportunities in the expansion of our The corporate sector. branch network base and customer services remittance coming through ensuringin helped con- greatly have sta- yet cost low the of growth tinuous will focus and this deposit savings ble as well. continue in the coming years new ness operations and as a result, boost to has been explored avenues business that has been remittance Bank the keythe of one for businesses could There years. few last the over be a set back on the volume however the new central bank directives given flexibilityto mon more that provide agencies and remittance ey transfer companies that the banking industry playing an uneven is creating feels The Bank is leading the industry field. in discussions with the central bank bringto about necessary changes in compete be able to to the directives in the market on equal terms. From the Desk the ] CEO of [From Himalayan Bank Ltd. | Annual Report 2013/14 14 Committed to change ... for better Senior General Manager General Senior Mr. Ejaz QadeerGill Chief Manager Mr. Maheshwor P. Joshi [ Chief Executive Officer Mr. Ashoke SJBRana Chief Manager Mr. Rabindra N.Pradhan MANAGEMENT TEAM Asst. Manager General Mr. UjjalRajbhandary Asst. Manager General Mr. Anup Maskay General Manager General Mr. SushielJoshi Senior Senior

] Committed to change ... for better 15 Himalayan Bank Ltd. | Annual Report 2013/14 Himalayan Bank Ltd. | Annual Report 2013/14 16 Committed to change ... for better

Chairman BoD Secretariat & Audit Committee Board of Directors Internal Audit & Secretary to Chairman Media Unit Inspection Dept 2 Shares Chief Executive Officer Executive Secretariat

Risk Management Dept. Compliance and (Credit Unit, Retail/SME Unit, IT Security Department Internal Control Market Risk Unit, Operational Department Risk Unit) Sr. General Manager

AGM – Business AGM – Business Planning and Development - Secretary to SGM/ General Manager - Development & System Product Corporate GM/AGMs Office Operations Support Development Department

Executive Operating Executive Officer Executive Officer Executive Officer Legal Executive Financial Executive Remittance Executive (Retail/SME) Officer Executive IT (Liability Products) (Corporate) Dept. Officer Administrative Centre Officer Recovery Officer (Marketing) Executive Human Officer Resource Officer

Retail/SME Centralized Credit Liability Products Corporate Accounts Department Management & Admin Department Business Dept. Business Dept. General Information Global FI Card Centre Loan Recovery Administration (Marketing) Technology Dept. Department Dept.-All Branches Human Resource Trade Operation Centre (Through BM) Department Retail/SME Business Treasury Dept. -Front (TOC) Marketing Function Office Service Consortium/ Corporate Quality Card Centre Corporate Business Branches – Monitoring Treasury Dept. Support Function Bancassurance (IT) Credit Marketing Dept. Reconciliation Dept. – Back Office Unit HR Development Function Function Retail/SME Credit Function (H.O & Branches) Training

Operations Dept.-All Remittance Branches (Through BM) Branch Credit Branch Credit Cross Selling Centre (IT) Function Function (Retail/SME) Function (Corporate) (Ancillary Reporting Department Products - (NRB & MIS) Mobile/Internet Banking

Card Centre (Operations)

Remittance Centre (Operations) [Organizational STRUCTURE] Committed to change ... for better 17 Himalayan Bank Ltd. | Annual Report 2013/14 - - - - - power to to power tic approach in defining our scope tic approach update always of operations and we HBL with the surroundings. ourselves should that the technology believes And be a friend and not a hindrance. been has always our focus that is why the with keep update to ourselves to innovations technological latest banking and secured prompt deliver transactions. new in a lookout always for are We business opportunities that can add a re have We our portfolio. value to who sponsibility our shareholders, to us with their trust entrusted have and the bank understands the need As them with the returns. reward to part strate of its continued growth on mainstreaming HBL is focused gy, sustainable business practices its into deliver Bank strives to The operations. that is sustainable economic growth responsi environmentally profitable, ble and socially relevant. embark journeyour on we bank of As see lots of opportunities we ing, to also see new things and we introduce lots of opportunities learn to newer in learning gives The always things. sights and experiences maneuver to HBL will the situation. In all its journey, learn cease to and it is with this never learn to that the desire unrelenting with itself equip will bank lead. - - - - - HBL is focused on setting a bench setting on is focused HBL mark in terms of quality services and products innovative introducing by and services market. in the Nepalese ahead of the race stay to aspire We the fu on set eyes our have we and tomor a stronger Our journey for ture. is ably supported the strong row by profes and led by of directors board Our strong sional management team. the give to aspires always workforce best service and the customers to customer a strong have we that is why all geographical that transcends base barriers. take immense pride on being able We the harbinger be to of success in the take a holis We Nepalese economy.

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anced business, operating within a operating anced business, footprint.clearly defined global tions. priorities us help three will that bank: better build an even being en on customers; focused more diversitydepth, leadership hancing and being better and deployment; serve to organized customers. shared values and works together values and works together shared with expert customers provide to insights and financial solu advice, Profile/History [HBL ] • A egy • A • A their needs and customizing the business processes to suit their needs. to processes the business and customizing their needs continued Himalayan Bank Ltd’s on sev founded is and success growth determined to provide excellent services to its customers by understanding understanding services by its customers to excellent provide to determined eral key factors like; fully focused and committed to fulfill our responsibilities. The bank is bank The responsibilities. our fulfill to and committed fully focused carved a name for itself. As one of the leading commercial banks, we are are we banks, commercial one of the leading As carved itself. a name for With 22 years of excellence in bankinghas services, Bank Ltd. Himalayan of excellence 22 years With Himalayan Bank Ltd. | Annual Report 2013/14 18 Committed to change ... for better [Products] &Services ccount Call • ayroll Current • Special • Shareholders’ • Bishesh • Recurring emit • Himal remium • Super • vings Premium • Himal • Normal • the following accounts: quirements. Savings products include choose from to suit their individual re deposit productsthatcustomers can BankoffersHimalayan achoiceof DEPOSIT PRODUCTS innovative products. reputation asapioneerinintroducing awell-deserved has earned many cater to the different individual needsof itsmany customers. The Bank Himalayan BankLtd. that hasadiverse range andservices ofproducts Fixed depositproducts for individuals est rates) inter trustswithattractive charitable Current Call (for NGOs, INGOs, and daily businesstransactions. employees houses) ofcorporate Bank). the shareholders ofHimalayan capped, andilliterate people) senior citizens, physically handi monthly deposits) turns) &highre (with exclusive service exclusive services) portunity for businesses) portunity ciaries), tomized for remitters andbenefi ance account) imum balance)

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credit facilitiesto suitdifferent funding tailor-made fundedandnon-funded Bank offersHimalayan a wide range of CREDIT SERVICES returns). attractive and earn fundsforwilling to park 2to 5years Fixed Term Account Deposit (for those and institutionsinclude: and medium enterprises (SMEs), Small (SMEs),Small and mediumenterprises wards providing credit facilitiesto small Specialized Lending is directed to loan againstshares. government bonds/securities, and fixed deposit receipt, loan against al institutionfinancing, loanagainst cility, card merchant loan,education loan, subidhaandFDwithODfa gage loan,credit card loan,housing rate home/hire purchase loan,mort Home Loan, hire purchase loan,fixed Retail/Consumer Lending: against firstclassbankguarantee. financing, tradefinancing, andloan ing, capital fixed loan, term working Project financ financing, consortium Corporate Lending: requirements. - - - - - Committed to change ... for better 19 Himalayan Bank Ltd. | Annual Report 2013/14

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F (ABBS). the country. institutions. educational for higher for those going abroad studies. of varying sizes as per its customers’ of varying its customers’ as per sizes loca convenient and at preference, tions. ofstatus balance, their check to lastthe not), or (encashed cheque transactions, and the Bank’s three rate. exchange foreign Banking and can be done safely from at all times of the day securely is a connection. there wherever than 70 locations. in more (ATMs): Fee Service SMS Himal@net 24/7 365 Any

• und • • Himalayan Bank offers a host of ancil a host of Himalayan Bank offers lary services convenience, that provide security and comfortits customers. to are: Among these • Safe • • • • • utomated ANCILLARY SERVICES SERVICES ANCILLARY - - - ing prompt execution of remittances. remittances. of execution prompt ing and serviced product is monitored The De our Remittance24/7 by Promotion partmentandfast deliver to dedicated services Hireliable - the customers. to net payment malRemit has the largest than 2000 payment work with more and towns, all cities, locations covering villages of the country. card service card of JCB and China Union its network. through cards Pay HIMALREMIT Himalayan Bank is a pioneer in the field business with money transfer of retail a decade-long serviceover customized The delivery experiencethe field. in conductsbank this business through HimalRemit, a state-of-art web-based that is system online money transfer our main easily accessible through domain www.himalayanbank. web com. It all can be directly accessed by our branches and network thus ensur - - - - - duce the first Nepali credit card for the card duce the first Nepali credit which wasdomestic market.HBL Card, countrythe in most popular card the Himalayan Bank is Now, at one time. various servicesoffering types of card like; HBL SCT/Visa /Master Debit Card, HBL Master Cred Card, Credit Visa HBL and Hi Card Visa HBL Prepaid it Card, Gold Bank Americanmalayan Express been facilitat has Bank The Card. Credit acquiring providing by customer its ing CARD SERVICES Himalayanto intro Bank was the first Personal Business Loan, Trade ServicesTrade Business Loan, Personal perfor (bid bond, and guarantee (LC) and advance payment, mance bond, guarantee). counter UK GERMANY SOUTH KOREA

Habib - UK Plc Standard Chartered Bank Korea Exchange Bank

Standard Chartered Bank Commerz Bank Kookmin Bank JAPAN

Standard Chartered Bank

USA Standard Chartered Bank

Mashreq Bank

Habib American Bank

AUSTRALIA PAKISTAN SINGAPORE Habib Bank Limited Commonwealth Bank INDIA Habib Bank Limited ICICI Bank Limited [Correspondent NETWORK] Bank Of America Bank Of India HDFC Bank Limited Standard Chartered Bank UK GERMANY SOUTH KOREA

Habib - UK Plc Standard Chartered Bank Korea Exchange Bank

Standard Chartered Bank Commerz Bank Kookmin Bank JAPAN

Standard Chartered Bank

USA Standard Chartered Bank

Mashreq Bank

Habib American Bank

AUSTRALIA PAKISTAN SINGAPORE Habib Bank Limited Commonwealth Bank INDIA Habib Bank Limited ICICI Bank Limited Bank Of America Bank Of India HDFC Bank Limited Standard Chartered Bank BETRAWATI BRANCH CORPORATE OFFICE KAMALADI THAMEL BRANCH BHAKTAPUR BAGLUNG POKHARA HUMLA BRANCH MAHARAJGUNJ BRANCH BRANCH BRANCH KAUSHALTAR NEW ROAD BRANCH RAM BAZAAR BRANCH DARCHULA BRANCH SAMAKHUSI BRANCH HETAUDA TEKU BRANCH BAJHANG BRANCH MUGU SWOYAMBHU BRANCH BAITADI BAJURA NEW BANESHWOR BRANCH GORKHA BRANCH DILLI BAZAAR BRANCH JUMLA DADELDHURA SORAHKHUTTE BRANCH KALIKOT DOLPA DOTI ACHHAM MUSTANG DHADING KALANKI BRANCH BRANCH BATTISPUTALI BRANCH KANCHANPUR DAILEKH JAJARKOT CHABAHIL BRANCH KAILALI RUKUM MANANG

SURKHET MYAGDI PULCHOWK BRANCH SALYAN BARDIYA ROLPA GORKHA KASKI LAMGUNGMJUNG SATDOBATO BRANCH BAHRABISE BAGLUNG RASUWA BRANCH

PYUTHAN GULMI BANKE PARBAT SINDHUPALCHOK SYANJA TANAHU DHANGADI DANG NUWAKOT ARGHAKHANCHI DOLAKHA BRANCH PALPA SOLUKHUMBU DHADING K SANKHUWASABHA RUPANDEHI NAWALPARASI B TAPLEJUNG KAPILVASTU L KAVRE CHITWAN MAKWANPUR RAMECHAP OKHALDHUNGA PARSA NEPALGUNJ SINDHULI KHOTANG BHOJPUR

BRANCH TERHATHUM GHOIHAR BARA PANCHTHAR BRANCH BULAWT AH AT UDAYPUR DHANKUTA ILAM BRANCH PALPA SARLAHI HIMALAYAN REGION BRANCH RAUT

AH ATTORI SIRAHA

M SUNSARI HILLY REGION HA NUSA BHAIRAHAWA D MORANG

BRANCH SAPTARI JHAPA TERAI REGION TANDI

BRANCH BIRGUNJ KAWASOTI BRANCH BRANCH BHARATPUR DAMAK BANEPA BRANCH BRANCH BRANCH BIRTAMODE TRISHULI BRANCH PARSA BRANCH DNARAH [Local NETWORK] BRANCH BRANCH BIRATNAGAR BRANCH ITAHARI Himalayan Bank Ltd. BRANCH BETRAWATI BRANCH CORPORATE OFFICE KAMALADI THAMEL BRANCH BHAKTAPUR BAGLUNG POKHARA HUMLA BRANCH MAHARAJGUNJ BRANCH BRANCH BRANCH KAUSHALTAR NEW ROAD BRANCH RAM BAZAAR BRANCH DARCHULA BRANCH SAMAKHUSI BRANCH HETAUDA TEKU BRANCH BAJHANG BRANCH MUGU SWOYAMBHU BRANCH BAITADI BAJURA NEW BANESHWOR BRANCH GORKHA BRANCH DILLI BAZAAR BRANCH JUMLA DADELDHURA SORAHKHUTTE BRANCH KALIKOT DOLPA DOTI ACHHAM MUSTANG DHADING KALANKI BRANCH BRANCH BATTISPUTALI BRANCH KANCHANPUR DAILEKH JAJARKOT CHABAHIL BRANCH KAILALI RUKUM MANANG

SURKHET MYAGDI PULCHOWK BRANCH SALYAN BARDIYA ROLPA GORKHA KASKI LAMGUNGMJUNG SATDOBATO BRANCH BAHRABISE BAGLUNG RASUWA BRANCH

PYUTHAN GULMI BANKE PARBAT SINDHUPALCHOK SYANJA TANAHU DHANGADI DANG NUWAKOT ARGHAKHANCHI DOLAKHA BRANCH PALPA SOLUKHUMBU DHADING K SANKHUWASABHA RUPANDEHI NAWALPARASI B TAPLEJUNG KAPILVASTU L KAVRE CHITWAN MAKWANPUR RAMECHAP OKHALDHUNGA PARSA NEPALGUNJ SINDHULI KHOTANG BHOJPUR

BRANCH TERHATHUM GHOIHAR BARA PANCHTHAR BRANCH BULAWT AH AT UDAYPUR DHANKUTA ILAM BRANCH PALPA SARLAHI HIMALAYAN REGION BRANCH RAUT

AH ATTORI SIRAHA

M SUNSARI HILLY REGION HA NUSA BHAIRAHAWA D MORANG

BRANCH SAPTARI JHAPA TERAI REGION TANDI

BRANCH BIRGUNJ KAWASOTI BRANCH BRANCH BHARATPUR DAMAK BANEPA BRANCH BRANCH BRANCH BIRTAMODE TRISHULI BRANCH PARSA BRANCH DNARAH BRANCH BRANCH BIRATNAGAR BRANCH ITAHARI Himalayan Bank Ltd. BRANCH Himalayan Bank Ltd. | Annual Report 2013/14 24 Committed to change ... for better Report ofthe [Report BOARD To the Twenty-second Meeting AnnualGeneral port oftheshareholders andcreativeport With thetrustofcustomers, sup and total numberofATM to 78. Bank’s total numberofBranchesto 42 ise oftheBranch. the This hastaken alongwithanATMvalley intheprem- branchinsidethe established 1new the the Bank review period During inChinaandNepal. courts with the case is under observation Melamchi Water Supply. The disputed of thetotal bankguarantee issuedon of theprovisioning donetowards 50% of 14.26%inoperatingprofit because Account however reflectsadecrease creased by 13.65%. The Profit and Loss 13.65%. The Bank’s operatingprofit in and operatingprofit increased by folio oftheBankincreased by 13.13% As compared to lastyear loanport maintain depositofRs. 64.67billion. of F.Y. 2013-14theBankwasableto dependable bankinthecountry. As as oneoftheleading, secured and the last 22 years HBL today stands Having providedover efficient service approval by theAnnual GeneralMeeting. Profit and Loss Appropriation Account andother financial statements for July 16,2014,theProfit and Loss Account for thefiscal year2013-14,the Himalayan BankLimited. Iwould like to present theBalance Sheetason shareholders present at this Twenty-second of Annual GeneralMeeting On behalfoftheBoard ofDirectors, we cordially welcome allthe Shareholders.Dear - - - OF 13.13 percent over theprevious year. der review, recording anincrease of un Rs. the period 46.44billionduring larly, theloansandadvances reached percent over the previous year. Simi billion, recording anincrease of21.86 Bank’s total deposit reached Rs. 64.67 underreview, theperiod During the Review oftheBank’s Operations vices to thegeneralpublic. financialser vide accessto quality system inNepalandto probanking towardscontribute asafe andsecure ception, theBank’s goalhasbeento passing ofeachyear. in Sinceitsvery Bank hasbeenableto progress by the initiative ofthemanagement, 4. 3. 2. 1. S.N. Investments Bills Loans, and Overdrafts Deposits Gross Assets Particulars DIRECTORS 2013 As on 14,151 59,361 69,197 - - - - - Oct 17 Oct 41,725 given below: end)is 17,2014(firstquarter October The financial status of the Bank as on profit. 982 million with 959 million as net able to post an operating profit of Rs Melamchi Water Supply, theBankwas for theguarantee amountissued on Even providing after Rs319million billion. percent andare valuedatRs. 74.718 the gross assetsincreased by 19.65 thereview period,billion during while by 14.79percent, reaching Rs. 6.834 The netassetsoftheBankincreased 2014 As on 17,438 68,912 80,979 Oct 17 Oct 50,548 Increase (De (In Rs. million) (In crease) % 23.22 21.14 16.09 17.03 ] - Committed to change ... for better 25 Himalayan Bank Ltd. | Annual Report 2013/14 ------previous year stood at 20.6%. stood year previous a surplus of Rs. BOP recorded overall The 127.13 billion during period the review billion 68.94 a surplus to of Rs. compared ex foreign gross The year. in the previous percent. 24.8 reservesby change surged 21.4 Such reservesby had increased broad The year. in the previous percent money supply during peri the review to as compared 19.1% by od increased of 16.4%. Sim increment the last year’s money supply during the narrow ilarly, 17.7% as by periodthe review increased of increment the last year’s to compared 14.4% the total During under review, the year deposits in the banking sector increased Similarly, (18.4%). billion 218.68 Rs. by the loans and advances in the banking billion 165.48 Rs. by sector increased and ad loans the total (14.4%). Last year 112 billion. Rs. by vances had increased - and Banking Envi Financial Current ronment Good2070- during monsoon year the in the agricultural 71 has helped growth sectorcontributionthe and apparent is The of the country’s GDP. in the growth 3.5% in FY by country’s GDP that grew The at 5.2% in FY 2070-71. 2069-70 grew banking industry ex have continued to op cess liquidity and lack of investment portunities in the country into resulted parking return funds in low of excess such as the treasury tools investment report Some banks may bills. losses in financing estate real to their exposure impact an adverse and this could have and Competition industry. overall the on thrust on consolida Bank’s the Central bankingthe of tion industry to led has of some financial institutions in merger the industry be and this seems to already as well. continued in the near future in number of bank and financial Total to NRB dropped stitutions licensed by 207 as of 2014 from 204 as in mid-July the issuance of bank 2013. After mid-July - - - 1.63 9.44 48.11 52.72 13.13 21.86 19.65 14.79 (0.56) (14.26) crease) % crease) (In million) Rs. Increase (De Increase Oct 17 959 982 1,679 2,049 2,494 6,083 19,842 46,449 64,674 74,718 2014 As on 2014 As 5,299 Oct 17 943 1,146 1,535 1,384 2,508 12,992 41,057 53,072 62,447 2013 As on 2013 As - : Annex D

Net Profit Operating Profit Operating and Staff Ex pense Other Income Net Interest IncomeNet Interest Investments Loans, Overdrafts and Loans, and Bills Purchased Discounted Deposits Gross Assets Gross Net Assets (Net Worth) (Net Net Assets Particulars 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. S.N. Comparative Financial Indicators of the Bank Indicators Financial Comparative are years 2011-12 and 2012-13 fiscal of the financial indicators comparative The below:presented view. Owing bad concertedrecover to to effortsview. by the management put being that this effort like will help in enhancing profitability assure would to we loans, year. fiscal of the bank in the ongoing During the year under review, pursuant to the directives of Nepal Rastra the directives to pursuant Bank, under review, During the year able been has Bank The million. 9.699 Rs. of tune the to loans off wrote Bank the as com- NPA Bank’s The written loans. off already from Rs 18 million recover to under re during the year percent 1.96 to decreased year the previous to pared As per Nepal Rastra at 5.2% duringAs of Nepal stood 2070/71 Bank, the GDP growth that rate inflation The 3.5%. was year previous in the rate growth the GDP while Exportduring2070/71. the growth F.Y. in 9.1% at clockedstood year last 9.9% which at at 27.3% stood import at 17.4% while rate stood year review growth Expenditure composition Expenditure and their Impact on the Bank Events and International National Most of the developed growth. struggle for continues to world economy The particularlycountries, finding it difficult countries are America and European impactThe of the shrink. GDP of the world continues to overall The recover. to India, countries the biggest as well. been seen in Asian has global slowdown of Nepal’s growth The trade partner hit in South Asia. has been worst of Nepal, quickly depend on how will largely the Indianeconomy will recover. economy political uncertaintyThe adverse be continued going ahead thereby appears to ly impacting investments. Deposit composition : Annex A composition : Annex B Credit Income composition : Annex C The comparative compositions of deposit, credit, income and expenditure of the income and expenditure compositions of deposit, credit, comparative The presented review are under year the and 2069/70 year duringBank fiscal the as an: below Himalayan Bank Ltd. | Annual Report 2013/14 26 Committed to change ... for better entralized credit management 15. n order to increase the liability 14. egionalization conceptintro 13. the to make ontinuous effort raded software T24 banking 12. 11. ade depositandloanproducts 10. roviding hourcounter extended 9. nstalled additional586POSma ted card businesswithUnion 8. 7. 6. 5. givenontinuity of to therecovery A limited to 1.96percent. 4. 3. TMs installedatSamakhusi 2. 1. for theFY2012-2013 Strategy andProgram oftheBank Implementation Status ofthe mergers. have comedown to 25asaresult of of 65banksandfinancialinstitutions acquisition regulation in 2068, a total and financialinstitutionmerger and

C structure. initsorganization vertical ucts troduced prod aseparate liability thebankin business ofthebank, I R and environmental friendly. ambience ofbranchesconvenient C browser Upg of thegeneralpublic. more asperthedemand attractive M Banking’. inthenameof service ‘Non-Stop P I Pay andAMEX. Star Counters atstrategic location. Established H cated services. withafocus onsophisti markets to Asian, European andAmerican Expanded r ner. loansman- in an active written-off C NP installed by theBankis78. Branch. The total number of ATMs A Established 1branchinsidetheval Branches. Nepalgunj BranchasRegional Bharatpur, Birgunj, Pokhara and duced –Biratnagar, Bhairahawa, debit andcredit card customers. chines for theconvenience ofthe the Bankreached to 42. ley. The total numberofbranches emittance business imal Center Flagship ------one setofX-Ray for Machine Commu cial assistance for theprocurement of services. The Bankhasprovided finan healthcare, culture and social sports, include thoserelating to education, ing rendered by theBankonthisfront lied institutions. be The mainservices sibilities through social andal various has been discharging its social respon From itscommencement,theBank Corporate Responsibility Social o upgrade T24 version and fine 13. the ambience of various o make 12. o introduce deposit,credit new 11. o give to recovery continuity 10. o introduce deposit,credit new 9. o install additional 400 POS ma 8. o setupadditional6ATMs atvar 7. 6. o expandremittance business 5. ntroduction ofLoyalty Card for the 4. o establishfirst representative of 3. o establish5brancheswithinand o containNPA atthelowest. 2. 1. 2013/2014 Strategies andPrograms for FY 16.

tune for better performance T mental friendly. branches convenient andenviron T products andservices T manner. loansinanactive –off of written T products andservices. T T T branches andprofit centers Enhance ser cated services. withafocus onsophisti markets to Asian, European andAmerican T mestic market. indo Remit customers ofHimal I T outside thevalley. T T has beenestablished A separat centralized system. ofthis 39 branchesare already part ready commenced and a total of and credit administrationhasal- fice in Malaysia. fice in chines. been installed. ious places. Till date 78ATMs has e IT security department department e ITsecurity vice delivery ofthe vice delivery ------2014. of theBankwith effect from 21, April Torup Prasai as the Alternate Director national hasbeenreplaced by Mr. Director representing Ava Inter Mr. SunilBahadur Thapa, Alternate 2014. of Directors witheffect from 21, April has resigned from theBank’s Board representing Public Shareholders Mr. Bijaya BahadurShrestha, Director in theBank’s Board ofDirectors. sional Director continueasDirectors Mr. Poudyal UpendraKeshari Profes- Board ofDirectors. additionto this, In continue asDirectors intheBank’s senting Employees Provident Fund) Poteal), Mr. Krishna (repre Radha Thapa (representing Ava Internation Mr. haya International), SushilBikram Bahadur Shrestha (representing Ch spectively. Similarly, Mr. Prachanda man andSecond Vice re Chairman Board First asChairman, Vice Chair ing Company) continueto chairthe (representingKhetan Mutual Trad senting HabibBankLtd.) andMr. P.P Trading), Mr. SalimAmlani(repre Bahadur Shrestha (representing N. thereview period,During Mr. Manoj Board ofDirectors ditional fields. responsibilities insuchandotherad indischarging its The Bankisalert exhibition andmusiccompetition. include dancecompetition,painting sored culturalprograms various that programs. Similarly, the Bank spon- danceandother cultural sponsoring basketball, golf, badminton besides football,culture such as the cricket, volved inthedevelopment ofsports The Bankhasbeencontinuouslyin- Gaun. Machhey at School Primary Devi Thimi andSeti to theold agehomesituated atSano goods for thepurchase ofnecessary Bank hasprovided financialassistance Health Carenity Centre. Similarly, the ------Committed to change ... for better 27 Himalayan Bank Ltd. | Annual Report 2013/14 ------ed. After the distribution After of the pro ed. up capital paid - shares, posed bonus 3.33 Rs. amount to of the Bank would billion. of Thanks Vote I of Directors, On behalf of the Board like thanks extendwould to sincere cus esteemed shareholders, the to officials of theGovernment of tomers, Rastra Nepal and Nepal Bank. I would special also likerecord place on to the management of our thanks to partner Pakistan, Habib Bank Limited, Se Officer, Chief Executive the Bank’s General Man nior General Manager, General SeManagers, Assistant ager, for staff and associates nior Executives, makingdynamic contributions the to and prosperity of the Bank. progress like extend I would to hearty Finally, wide giving the media for thanks to our activities all to to and coverage our well-wishers. you. Thank of Directors On behalf of the Board ______Manoj Bahadur Shrestha Chairman million respectively has been allocat million respectively ------Profit and Loss Appropriation Appropriation Loss and Profit Rs. amounts Bank the of profit net The year 2012- the fiscal for 959.17 million earnings the retained 13. Besides this, balance year’s last in million 4.685 Rs of reservestax suspended and sheet of dis for available Rs 15.41 million are Rs. i.e. 20% the net profit tributions. appropriated 191.82 million, has been the Statutoryto General Reserve Fund. claim of US$ 6.655 million the Given made against the performance bond of Melamchi issued in favor guarantee is Supply Development Board Water still pending with the courts in China and Kathmandu District Court, the the claim and in Bank has not honored instruc line with Nepal Rastra Bank’s for made a provision tion, the Bank has 50% of the total losses amounting to Rs 319.772 million, claim amount, i.e. separately which has been reflected the amount 25. Similarly, in annexure to 212.516 million transferred of Rs. contingent general reserves cover to the same losses towards possible for year has been in the last fiscal kept Inunchanged. addition, the Bank has its Rs 157.142 million from allocated to Bond it Re and transferred profit Reserve.payment like announce with plea I would to on distribut a special resolution sure and a bonus share ing a 15 percent the on dividend cash percent 6.0526 the shareholders capital to paid–up For the pro year 2013/14. the fiscal for an and dividends, posed bonus shares 175.4 and million 434.7 Rs. of amount ------Further, Mr. Himalaya SJB Rana con Mr. Further, and Other Sheet Balance Audit, Financials Balance Sheet as on July 16, 2014, The fiscal for Account Loss and Profit the Loss Ap and 2013-14, the Profit year Similarly, Miss. MenukaSimilarly, rep Shrestha International, Mrs. Chhaya resenting N. Ranjana representing Shrestha Siwako Himalaya Prasad Mr. Trading, Provident Employee ti representing Silwal rep Surendra and Mr. Fund Company Trading Mutual resenting in Director Alternate the as continues of Directors. Board the Bank’s of Chief hold the position tinues to like congratulate I would to Advisor. the to Director the new Alternate coopera and expectBoard his future and progress the Bank’s tion towards like also thank I would to prosperity. Bahadur Bijaya Mr. director former Direc Alternate and former Shrestha their for Thapa Sunil Bahadur Mr. tor, contributions the Bank’s to invaluable the Board, Further, years. success for its firm on this occasion, expresses continue work in the commitment to of the Bank.best interest year fiscal the for Account propriation for Statement Flow 2013-14, the Cash relevant an year 2013-14, the fiscal Report en are and the Auditors’ nexes infor closed with this report. Further, be disclosed as per to mation required Act 2063, of Company the provisions 7, Clause 109, Sub-ClauseChapter (4) as Annex E. presented are Himalayan Bank Ltd. | Annual Report 2013/14 28 Committed to change ... for better Annexure D Annexure B Annexure A Annexure C Committed to change ... for better 29 Himalayan Bank Ltd. | Annual Report 2013/14 ember ember secretary o-ordinator C M M . 1,679,949,425 . 713,829,706 . 966,119,719 : Rs : Rs : Rs

1) Mr. Sushil Bikram Thapa Thapa Sushil Bikram 1) Mr. Radha Krishna2) Mr. Pote & Mahat (Engagement Leader L.D. 3) Mr. Ltd) – CSC Pvt. Managing Partner Employee Expenses during the FY Employee during Expenses the FY Administrative Total and facilities and description their remuneration members, Committee 9) List of Audit performance during the year: of the Committee’s (and suggestions if any) members: Committee Audit 1) Detail of Share Forfeiture: 1) Detail of Share during forfeited the year. were No shares with Subsidiaries: Transaction 2) Bank has no subsidiariesThe Shareholders: its Substantial by the Company to provided 3) Information NIL year: during the Company Directors and Officials by of the purchased 4) Shares No such transactionwas reported the Bank. to - Agreement/Con in any of Directors and their close relatives on the personal interest received 5) Information the Company: by into tract entered during the year. was received No such information during the year: Buy-Back 6) Detail of Share during the year. shares buy-back its own Bank didn’t The System: Control 7) Detail of Internal major components: following Bank has a very in operation which has the The System Control effective Internal internal checks and controls 1) Strong conductorderly of operations. and guidelines for procedures policies, Comprehensive 2) Operation Manuals, Guidelines and various Policy manuals 3) Credit Department & Internal4) Compliance system monitoring Control compliance of & periodic of internal control review for 5) Independent Internal & Inspection Audit Department Committee. Audit by audit issues and significant of internal controls review 6) Periodic during the year: expenses Management Total 8) SECTION 109(4) OF COMPANIES ACT, 2063 ACT, SECTION OF COMPANIES 109(4) ADDITIONAL DISCLOSURE AS PER DISCLOSURE ADDITIONAL HIMALAYAN BANK LIMITED BANK HIMALAYAN Himalayan Bank Ltd. | Annual Report 2013/14 30 Committed to change ... for better onus as per Bonus Act, 1974waspaid to Act, onus as perBonus allemployees except Manager, the ex-pat. General Senior whowaspaid bill isreimbursedbasisto theCEOandGM. onactual ater andElectricity 6) 5) anagers are covered andLifeaspertheBank’s for basisforelephone billispaidby Insurance Accidental theBankonactual Medical CEO. Insurance, Staff Rules. caseofSGM&G.M.reimbursement as perpolicy, In upto a 4) areectors covered ofRs. 3,000,000. withmedicalinsuranceofRs. policy 200,000andAccident Insurance accommodationatBank’sully furnished costisprovided to theEx-pats. branchmanagers. &outside valley 3) 2) fficedriver, vehiclewith fuelandmaintenance is provided totheCEO, Manager, General AGMsand Ex-Pat (Sr. Gen 1) per meetingfees: The Committee membershave beenpaidnootherremuneration/facilitythan theundermentioned Notes: 3) Reviewed Annual Accounts and Auditors Preliminary Audit Report issued by Statutory Auditors, AnnualAccounts Bankin 3) Reviewed issuedby andAuditors Statutory NepalRastra Preliminary Audit Report recommendations investigation andmadevarious 2) Reviewed to theBoard reports ofDirectors. for to theManagement instruction resolution ofauditissues. andgave necessary Audit Reports Internal 1) Reviewed whichit,amongothers: The CommitteetheFY2070/71during 21meetingsduring conducted MANAGERIAL REMUNERATION 109(4) for ofsection thepurpose during theand Officials year: 11) Remuneration, Allowances andfacilities given to Directors,Director, Managing Chief Executive Officer NIL their closerelatives andassociated firms, Companies etc: 10) Amount receivable by theCompany from Directors,Director, Managing Substantial Shareholders and to4) Directed improve theManagement Control Internal system andprocedures andrecommended amendmentsto SN 1 2 3 4 5 6 7 Total 8 9 Number ofpersons

eral Manager). eral Manager). areThe Managers given schemewithfuelaspertheBank’s vehicle underOYVS policy. Performance Bonus amounting toPerformance Bonus USD10,000(netoftax). B W maximum ofRs. 12,000and Rs. 2,000respectively permonth ismadeby theBank. T CEO andEx-pats are covered ofcontract. aspertheirterms for Insurance andMedical Accidental Insurance (b) AllM (a) Dir ***F **O Manuals, Policies andprocedures for improvement andeffective control, wherever necessary. issuedby theCommittee.structions andrecommended theiradoptionby report theBoard ofthedirectives/in ofDirectorsspection incorporation after PARTICULARS Meeting FeesMeeting Salary Salary Allowances PF Contribution PF Contribution Telephone /Utilities /Mobile Others Others Car Facility Accommodation Insurance Coverage Insurance Rs C o-ordinator o-ordinator . 10,000

DIRECTORS Rs M 4,311,469 embers . 8,000 1,152,500 2,915,826 243,143 Yes No No 12 - - - 10,750,858 4,950,000 4,533,500 1,199,374 67,984 **Yes CEO Yes No - 1 - 172,732,398 MANAGERS 93,123,511 51,394,224 14,740,737 8,115,030 5,358,896 ***No Yes Yes 90 - - - - Committed to change ... for better 31 Himalayan Bank Ltd. | Annual Report 2013/14 Manoj Bahadur Shrestha Chairman 14) Other relevant issues: 14) Other relevant NIL 13) Others matters required to be disclosed in the Directors’ Report by this Ordinance or others Laws in force: or others Laws Report this Ordinance by be disclosed in the Directors’ to required 13) Others matters NIL 12) Amount of Dividend remaining unpaid: Dividend of remaining 12) Amount 32, 2071. Asar 35,894,005 as on Unpaid Dividend : Rs. Total Himalayan Bank Ltd. | Annual Report 2013/14 32 Committed to change ... for better Committed to change ... for better 33 Himalayan Bank Ltd. | Annual Report 2013/14 Himalayan Bank Ltd. | Annual Report 2013/14 34 Committed to change ... for better Committed to change ... for better 35 Himalayan Bank Ltd. | Annual Report 2013/14 -

88,429,000 24,267,960 33,290,473 276,000,000 865,059,928 356,124,343 2,898,000,000 2,401,708,123 1,100,000,000 1,219,486,180 2,427,014,381 2,061,831,588 1,308,773,543 1,378,847,102 53,072,319,487 Previous Year Year Previous 12,992,044,772 39,723,805,566 Previous Year Year Previous 61,113,501,223 61,113,501,223 CA. Prabhu Ram Bhandary Ram BhandaryCA. Prabhu Managing Partner Joshi & Bhandary Chartered Accountants OctoberDate: 27, 2014 As per our attached report of even date report per our attached date As of even - - 57,575,637 95,187,157 Current Year Year Current 175,404,348 663,969,702 196,100,000 3,332,700,000 2,750,711,016 1,100,000,000 1,403,419,245 Current Year Year Current 1,112,465,463 3,766,154,837 1,322,814,480 1,365,921,687 64,674,848,295 19,842,060,285 45,320,359,244 73,589,845,698 73,589,845,698 Schedule 17 Schedule 29 Schedule 30 (A1) Schedule 30 (B) Schedule 30 (C) Schedule 30 (D) Schedule 30 (E) Schedule 31 Schedule 32 Schedule 33 8 9 10 11 12 13 14 15 16 1 2 3 4 5 6 7 Schedule Schedule Sushiel Joshi General Manager Manoj Bahadur Shrestha Chairman ASSETS 1. Cash Balance 1. Cash 2. Balance with Nepal Rastra Bank 3. Balance with Banks / Financial Insitutions 3. Balance with Banks / Financial 4. Money and Short at Call Notice 5. Investments 6. Loan Advances and Bills Purchase Advances 6. Loan 7. Fixed Assets 7. Fixed 8. Non - Banking Assets 9. Other Assets Total Assets Total Contingent Liabilities Contingent Declaration of Directors Fund of Capital Statement RiskCredit RiskCredit Mitigation Operation Risk Market Risk Indicators Principal Policies Accounting Principal Accounts to Notes CAPITAL AND LIABILITIES CAPITAL 5. Deposits Dividend 7. Proposed Liabilities Tax 8. Income 9. Other Liabilities 1. Share Capital 1. Share 2. Reserves and Funds and Bonds 3. Debentures 4. Borrowings 6. Bills Payables & Liabilities Capital Total BALANCE SHEET BALANCE Schedules 1 to 17 & 32 and 33 form an integral part Sheet an integral of this Balance Schedules 17 & 32 and 33 form 1 to As at Ashad End, 2071 (July2071 End, 2014) 16, Ashad at As Ashoke S. Rana Ashoke Officer Chief Executive Directors Bahadur Shrestha Prachanda Radha Krishna Pote Sushil Bikram Thapa Keshari Poudyal Upendra Satish Raj Joshi Officer Financial Executive Himalayan Bank Ltd. | Annual Report 2013/14 36 Committed to change ... for better FOR SHRAWANTHE PERIODFROM 1,2070 TO ASHAD32,2071(JULY 16,2013 TO JULY 16,2014) PROFIT ANDLOSS ACCOUNT Executive Financial Officer Joshi Satish Raj Upendra Poudyal Keshari Thapa Bikram Sushil Pote Krishna Radha Prachanda BahadurShrestha Directors Chief Executive Officer Ashoke S.Rana Net Profit/(Loss) c)Deferred Tax b)Previous Year’s Additional Tax a)Current Years 14. TaxProvision Bonus 13. Staff Provision Net Profit all considering after Activities 12. Profit/(Loss) Activities from Extra-ordinary Profit fromRegular Operations 11. Loan Loss Provision Written-Back Income/(Loss) 10. Non-Operating Operating Profit 9. Provision for Possible Losses Operating Profit before Provision for Possible Losses 8. Exchange Fluctuation Loss OperatingExpenses 7. Other 6. StaffExpenses Total OperatingIncome 5. Exchange Fluctuation Income OperatingIncome 4. Other 3. Commission andDiscount Net Interest Income 2. Interest Expenses 1. Interest Income Particulars Chairman Shrestha Bahadur Manoj General Manager Sushiel Joshi

Schedule 28 27 26 25 22 24 23 22 21 20 19 18 959,107,241 Current Year 1,783,277,130 1,774,631,324 1,080,863,093 2,063,442,211 3,743,391,636 2,494,177,768 2,248,797,712 4,742,975,480 645,799,454 662,053,786 162,116,103 982,579,118 774,565,043 966,119,719 713,829,706 385,101,575 206,814,193 657,298,100 15,401,440 17,487,163 8,645,806 As per our attached report ofevenAs perourattacheddate report Date: October 27,2014 Date: October AccountantsChartered Joshi &Bhandary Managing Partner PrabhuCA. Bhandary Ram 852,892 - Previous Year 943,697,990 1,145,973,993 1,514,361,986 1,521,365,867 1,988,874,082 3,523,962,942 2,508,273,070 2,119,062,154 4,627,335,224 (39,512,982) 471,705,889 432,994,725 137,669,271 842,900,089 369,392,717 852,110,746 682,978,114 300,469,098 165,071,706 550,149,068 (7,003,881) 5,999,157 801,818

- Committed to change ... for better 37 Himalayan Bank Ltd. | Annual Report 2013/14 ------

4,685,148 (Amount in Rs.) (Amount 72,898,928 39,512,982 943,697,990 188,739,598 212,516,333 276,000,000 138,000,000 157,142,857 1,016,596,918 Previous Year Year Previous 1,011,911,770 CA. Prabhu Ram Bhandary Ram BhandaryCA. Prabhu Managing Partner Joshi & Bhandary Chartered Accountants OctoberDate: 27, 2014 As per our attached report of even date report per our attached date As of even ------

4,685,148 1,767,187 15,401,440 18,357,988 959,107,241 191,821,449 175,404,348 434,700,000 157,142,857 979,193,829 Current Year Year Current 960,835,841 Sushiel Joshi General Manager Manoj Bahadur Shrestha Chairman Particulars Income Year to Last up Profit 1. Accumulated Profit Year's 2. Current Fund Adjustment Capital from Transfer 3. Reserve Tax Deferred from Transfer 4. 5. Transfer from Investment Adjustment Reserve Adjustment Investment from Transfer 5. Total Total Expenses Year Last up to Loss 1. Accumulated 2. Current year's Loss year's 2. Current 3. General Reserve Reserve4. Contingent 5. Institutional Development Fund Fund 6. Dividend Equalization Fund 7. Staff ReserveRelated Dividend 8. Proposed Issue of Bonus Share 9. Proposed 10. Special Reserve Fund Fund Fluctuation 11. Exchange Redemption12. Capital Reserve Fund Fund Adjustment 13. Capital 14. Bond Redemption Reserve Reserve Tax 15. Deferred Reserve Adjusment 16. Investment Total Total / (Loss) Profit 17. Accumulated PROFIT AND LOSS APPROPRIATION ACCOUNT APPROPRIATION PROFIT AND LOSS 16, 2014) JULY TO 16, 2013 32, 2071 (JULY ASHAD TO 1, 2070 FROMTHE PERIOD SHRAWAN FOR Ashoke S. Rana Ashoke Officer Chief Executive Directors Bahadur Shrestha Prachanda Radha Krishna Pote Sushil Bikram Thapa Keshari Poudyal Upendra Satish Raj Joshi Officer Financial Executive Himalayan Bank Ltd. | Annual Report 2013/14 38 Committed to change ... for better

STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM SHRAWAN 1, 2070 TO ASHAD 32, 2071 (JULY 16, 2013 TO JULY 16, 2014) (Amount in Rs.) PROPOSED SPECIAL OTHER DEFERRED INVESTMENT SHARE ACCUMULATED GENERAL EXCHANGE TOTAL PARTICULARS BONUS RESERVE RESERVE TAX ADJUSTMENT CAPITAL PROFIT/(LOSS) RESERVE FLUCTUATION AMOUNT SHARE FUND FUND RESERVE RESERVE Opening Balance as at 16 July 2013 2,760,000,000 4,685,148 1,571,890,689 138,000,000 4,000,000 29,769,898 726,802,046 62,887,064 1,673,278 5,299,708,123 Changes in Accounting Policies ------Restated Balance as at 16 July 2013 2,760,000,000 4,685,148 1,571,890,689 138,000,000 4,000,000 29,769,898 726,802,046 62,887,064 1,673,278 5,299,708,123 Net Profit for the year - 959,107,241 ------959,107,241 Transfer to General Reserve - (191,821,449) 191,821,449 ------Bond Redemption Fund transferred ------Proposed Dividend (175,404,348) ------(175,404,348) Issue of Bonus Share 138,000,000 - - (138,000,000) ------Proposed Issue of Bonus Shares - (434,700,000) - 434,700,000 ------Trasnser from Deferred Tax Reserve - 15,401,440 - - - - - (15,401,440) - - Transfer to Exchange Fluctuation Fund - (1,767,187) - - - 1,767,187 - - - - Transfer to Bond Redemption Fund - (157,142,857) - - - - 157,142,857 - - - Transfer to Contingent Reserve ------Closing Balance 2,898,000,000 18,357,988 1,763,712,138 434,700,000 4,000,000 31,537,085 883,944,903 47,485,624 1,673,278 6,083,411,016 Committed to change ... for better 39 Himalayan Bank Ltd. | Annual Report 2013/14 - - - - 3,039,791 9,635,805 88,429,000 599,860,000 189,884,737 103,803,352 165,071,706 300,469,098 550,149,068 (Amount in Rs.) (Amount (354,294,346) (952,922,100) (128,643,739) (876,795,259) (100,749,689) 333,994,654 (138,909,155) (430,864,749) (660,815,839) (639,014,466) 5,341,325,578 4,463,256,155 (5,188,673,457) (1,130,746,916) (1,797,231,588) (2,129,360,493) Previous Year Previous 3,648,198,652 6,362,296,158 5,445,128,930 5,488,581,832 1,489,617,130 (2,714,097,506) (1,765,436,570) (8,217,401,650) (2,772,272,720) (3,998,964,702) - - - - (140,000) 14,479,955 18,345,299 181,826,005 240,855,933 206,814,193 385,101,575 657,298,100 (88,429,000) (69,926,494) (338,409,616) (140,168,122) (368,338,748) (137,669,271) (622,367,182) (770,422,502) (688,943,580) 1,865,731,588 4,529,280,816 Current Year Year Current (426,978,616) 11,602,528,808 (3,891,024,989) (2,878,859,625) (5,591,587,067) (2,221,584,726) 5,542,590,002 3,648,198,652 1,894,391,350 7,679,264,020 5,796,839,983 1,355,852,722 11,843,384,741 (6,713,746,776) (4,164,120,721) (4,440,987,261) G Closing Balance of Cash and Bank Balances of Cash Balance G Closing F. Opening Balance of Cash and Bank Balances of Cash Opening Balance F. E.Current Year’s Cash Flow from All Activities All from Flow Cash Year’s E.Current D. Income/Loss from change in exchange rate in Cash and Bank Balances in Cash rate change in exchange from Income/Loss D. 4. Increase/(Decrease) in Refinance/facilities received from NRB. from received in Refinance/facilities 4. Increase/(Decrease) 3. Increase/(Decrease) in Other 3. Increase/(Decrease) Liabilities 2. Increase/(Decrease) in Share Capital in Share 2. Increase/(Decrease) 1. Increase/(Decrease) in Long Term Borrowings ( Bond,Debentures etc) ( Bond,Debentures Borrowings Term in Long 1. Increase/(Decrease) C. Cash Flow from Financing Activities Financing from Flow C. Cash 5.Others 4. Dividend Income 3. Interest Income from Long Term Investment Term Income3. Interest Long from 2. (Increase)/Decrease in Fixed Assets in Fixed 2. (Increase)/Decrease 1. (Increase)/Decrease in Long Term Investments Term in Long 1. (Increase)/Decrease B. Cash Flow from Investment Activities Investment from Flow Cash B. 4. Increase/(Decrease) in Others4. Increase/(Decrease) Liabilities 3. Increase/(Decrease) in Short Term Borrowing Term in Short3. Increase/(Decrease) 2. Increase/(Decrease) in Certificate2. Increase/(Decrease) of Deposits 1. Increase/(Decrease) in Deposits1. Increase/(Decrease) Increase / (Decrease) in Current Liabilities in Current / (Decrease) Increase 4. (Increase) / Decrease in Others4. (Increase) / Decrease Assets 3. (Increase) / Decrease in Loan & Bills Purchases in Loan 3. (Increase) / Decrease 2. (Increase) / Decrease in Other2. (Increase) / Decrease Short-term Investment 1. (Increase) / Decrease in Money1. (Increase) / Decrease and Short at Call Notice (Increase) / Decrease in Current Assets in Current / Decrease (Increase) Cash Flow before Changes in Working Capital Working in Changes before Flow Cash 2.5 Other Expenses 2.4 Income Tax Paid Tax 2.4 Income 2.3 OfficeOverhead Expenses 2.2 Staff Expenses 2.1 Interest Expenses 2.1 Interest 2. Cash Payment 2. Cash 1.5 Other Income 1.4 Recovery of Loan Written off Written 1.4 Recovery of Loan 1.3 Income from Foreign Exchange Transaction Exchange 1.3 Income Foreign from 1.2 Commission and Discount Income and Discount 1.2 Commission 1.1 Interest Income 1.1 Interest 1. Cash Received 1. Cash A. Cash Flow from Operating Activities Operating from Flow A. Cash Particulars CASH FLOW STATEMENT CASH FLOW 16, 2014) JULY TO 16, 2013 32, 2071 (JULY ASHAD TO 1, 2070 FROMTHE PERIOD SHRAWAN FOR Himalayan Bank Ltd. | Annual Report 2013/14 40 Committed to change ... for better SHARE CAPITAL &OWNNERSHIP SHARE OWNNERSHIP Particulars ofIndividual/Group/Firm/Company holding0.5%orabove are asfollows: 1.6 Total 1.5 Calls-in-advance 1.4 Proposed Shares Bonus c. Preference Redeemable Shares b. Non-redeemable Preference Shares (Previous Shares ofRs100eachfullypaidup) year 27,600,000Ordinary Shares ofRs100eachfullypaidup a.28,980,000Ordinary 1.3 Paid upCapital c. Preference Redeemable Shares b. Non-redeemable Preference Shares (Previous Shares ofRs. year 27,600,000Ordinary 100each) Shares ofRs100each a.28,980,000Ordinary 1.2 IssuedCapital c. Preference Redeemable Shares b. Non-redeemable Preference Shares Shares ofRs100each. a.40,000,000Ordinary 1.1 Authorized Capital 1. Share Capital Particulars Particulars Total &Co.Sharma Pvt.Ltd. Co.Syakar Ltd. AgrawalShashi Kanta Pvt.Ltd.Chhaya International Pvt.Ltd.Ava International Mutual Trading Co. Pvt.Ltd. N. Trading Co. Pvt.Ltd. Sanchaya Kosh Karmachari Habib BankLimited ofShareholder Name Particulars Particulars Total 2.Foreign Ownership 1.6Others Public 1.5General Entities 1.4Other Licensed Institutions 1.3Other 1.2 “A” ClasssLicensedInstitutions 1.1NepalGovernment 1.DomesticOwnership % 100.00 20.00 80.00 15.00 65.00 Current Year Number ofShares Number - - - - 24,214,195 Share Capital 2,575,849 3,299,189 3,657,275 3,682,878 4,057,199 5,795,999 2,898,000,000 2,318,400,000 191,268 286,903 667,635 1,883,700,000 579,600,000 434,700,000 - - - - 3,332,700,000 2,898,000,000 2,898,000,000 4,000,000,000 Current Year 2,898,000,000 2,898,000,000 4,000,000,000 434,700,000 83.55 11.38 12.62 12.71 14.00 20.00 0.66 0.99 2.30 8.89 % % ------Previous Year 100 20 80 65 15 - - - - Share Capital 2,760,000,000 2,421,419,500 SCHEDULE 1 2,208,000,000 Share Capital Previous Year 2,898,000,000 2,760,000,000 2,760,000,000 4,000,000,000 1,794,000,000 552,000,000 2,760,000,000 2,760,000,000 4,000,000,000 138,000,000 414,000,000 257,584,900 329,918,900 365,727,500 368,287,800 405,719,900 579,599,900 Amount inRs. Amount inRs. 19,126,800 28,690,300 66,763,500 Amount inRs. ------Committed to change ... for better 41 Himalayan Bank Ltd. | Annual Report 2013/14 ------4,000,000 1,673,278 4,685,148 62,887,064 88,429,000 Amount in Rs. Amount in Rs. Amount in Rs. 212,516,333 514,285,713 29,769,898 88,429,000 500,000,000 600,000,000 88,429,000 795,362,388 1,571,890,689 Previous Year Year Previous Previous Year Year Previous Previous Year Year Previous 2,401,708,123 SCHEDULE 3 SCHEDULE 4 SCHEDULE 2 SCHEDULE 1,100,000,000 ------4,000,000 1,673,278 47,485,624 500,000,000 600,000,000 212,516,333 671,428,570 18,357,988 31,537,085 Current Year Year Current Current Year Year Current 937,103,805 Current Year Year Current 1,763,712,138 1,100,000,000 2,750,711,016  8 P HBLBond 2072ofRs1,000each ercent [Balance in Redemption Reserve Rs. 500,000,000 (Previous Year Rs. 428,571,427)] Rs. Year [Balance in Redemption Reserve 500,000,000 (Previous Rs. 1. (Issued in Ashadh 2065 and maturing in Ashadh 2072 ) 2072 2065 and maturing in Ashadh (Issued in Ashadh Particulars 8 Percent HBL Bond each 2077 of Rs 1,000 2. 8 Percent 2077 ) 2070 and maturing in Ashadh (Issued in Ashadh 85,714,286) Rs. Year [Balance in Redemption Reserve 171,428,569 (Previous Rs. Total 4. Inter Bank and Financial Institutions 4. Inter Bank and Financial Institutions 5. Other Financial 6. Others Total Foreign B. 1. Banks 2. Others Total ( A+B) Total 3. Repo Obligation 2. Nepal Rastra Bank Particulars A. Local A. Local 1. Nepal Government 5. Other Reserve Fund 5. Other Reserve Fund Reserve a. Contingent Institution Development Fund b. 4. Capital Adjustment Fund Fund Adjustment 4. Capital Fund Dividend Equalization c. Special Reserve d. Fund Revaluation Assets Reserve e. Reserve Tax Deferred f. Reserves Other g. Free h. Bond Redemption Reserve Reserve Adjustment i. Investment / (Loss) Profit 6. Accumulated Fund Fluctuation 7. Exchange Total 3. Capital Redemption Reserve 3. Capital Particulars 1. General Reserve Fund Reserve 1. General Fund Reserve 2. Capital Fund BORROWINGS DEBENTURES AND BONDS RESERVES AND FUNDS RESERVES Himalayan Bank Ltd. | Annual Report 2013/14 42 Committed to change ... for better DEPOSITS Particulars Particulars A.Current Deposits 1.NonInterest accounts Bearing 1.Local Currency 1.1NepalGovernment 1.2 “A” ClasssLicensedInstitutions 1.3 Other Licensed Institutions LicensedInstitutions 1.3Other 1.4 Other Organized Institutions 1.4Other 1.5 Individuals 1.5Individuals 1.6 Others 1.6Others 2.Foreign Currency 2.1NepalGovernment 2.2 “A” ClasssLicensedInstitutions 2.3 Other Licensed Institutions Licensed Institutions 2.3Other 2.4 Other Organized Institutions 2.4Other 2.5 Individuals 2.5Individuals 2.6 Others 2.6Others B. Margin Deposits 1.Employees Guarantee 2.Guarantee Margin 3.Letters ofCredit Margin C. Others C.Others 1.Local Currency 1.1Financial Institutions 1.2 Other Organized Institution 1.2Other 1.3 Individual 1.3Individual 2.Foreign Currency 2.1Financial Institutions 2.2 Other Organized Institutions 2.2Other 2.3 Individual 2.3Individual Total ofNon-Interest Accounts Bearing 7,650,320,333 6,407,989,296 5,055,369,195 1,352,620,101 1,242,331,037 Current Year 1,065,261,762 3,194,815,890 395,569,475 257,873,707 141,848,361 394,400,418 892,990,933 244,206,943 998,124,094 47,253,027 10,825,856 7,149,867 ------6,765,003,113 SCHEDULE 5 Previous Year 5,844,054,504 4,607,905,855 1,236,148,649 3,471,289,446 1,035,964,115 920,948,609 177,644,003 227,112,368 639,091,353 163,100,889 354,771,943 566,176,666 92,768,685 21,193,119 15,780,941 Amount inRs. continued... 109,585 ------Committed to change ... for better 43 Himalayan Bank Ltd. | Annual Report 2013/14 ------90,864 continued... Amount in Rs. 24,060,831 248,430,370 294,478,972 150,171,843 735,198,905 547,107,486 485,604,917 832,233,803 808,172,972 4,094,593,617 4,954,619,695 7,760,260,633 1,249,758,163 1,099,586,320 25,104,938,949 4,637,502,959 5,858,397,645 1,220,894,686 Previous Year Year Previous SCHEDULE 5 SCHEDULE 12,714,880,328 46,307,316,374 25,652,046,435 13,964,638,491 26,484,280,238 53,072,319,487 ------829,198 284,089 6,347,201 81,878,192 30,715,214 142,741,777 681,464,154 6,581,813,874 5,699,476,436 5,723,165,255 2,166,728,657 2,023,986,880 3,920,558,804 1,055,239,498 1,024,524,284 Current Year Year Current 31,106,742,604 6,664,521,264 3,927,190,094 10,591,711,358 11,422,641,691 57,024,527,962 31,788,206,758 13,589,370,348 32,843,446,256 64,674,848,295 1.2 “A” Classs Licensed Institutions “A” 1.2 1.3 Other Licensed Institutions 1.4 Other Institutions Organized 1.5 Individuals 1.6 Others Classs Licensed Institutions “A” 2.1 1.1 Organized Institutions 1.1 Organized 1.2 Individuals 1.3 Others Currency 2. Foreign Institutions 2.1 Organized 2.2 Individuals 2.3 Others 2.2 Other Licensed Institutions 2.3 Other Institutions Organized 2.4 Individuals 1.1 Organized Institutions 1.1 Organized 1.2 Individuals 1.3 Others 2.5 Others 1. Other Institutions Organized 2. Individual 3. Other Bearing Accounts of Interest Total 2. Foreign Currency 2. Foreign Institutions 2.1 Organized 2.2 Individuals 2.3 Others 1. Local Currency Currency 1. Local C. Call Deposits C. Call Currency 2. Foreign Deposits Total 1. Local Currency Currency 1. Local 1. Local Currency Currency 1. Local Deposits Fixed B. of Deposits Certificate D. 2. Interest Bearing accounts Bearing accounts 2. Interest Deposits A. Saving Particulars DEPOSITS Himalayan Bank Ltd. | Annual Report 2013/14 44 Committed to change ... for better OTHER LIABILITIES BILL PAYABLES Total 2.Foreign Currency 1.Local Currency Particulars Particulars Particulars 1.Pension Fund /Gratuity 2.Employees Provident Fund 3.Employees Welfare Fund 4.Provision forBonus Staff 5.Interest Payable onDeposit 6.Interest Payable onBorrowings/Bonds 7. Unearned Discount&Commission 7.Unearned 8. Sundry Creditors 8.Sundry 9.BranchAdjustment Account 10.Deferred Tax Liability 11.DividendPayable 12. Others 12.Others Total a.Provision for Audit Fee b. Provision for leave encashment c. MaturedPayable HBLBond d. Provision for Gratuity e. Others e. Others 1,403,419,245 Current Year Current Year 95,187,157 162,116,103 105,654,778 140,134,791 194,895,280 657,994,497 41,467,903 35,894,005 64,166,508 94,078,321 1,108,836 820,380 275,000 ------1,219,486,180 SCHEDULE 7 SCHEDULE 6 Previous Year Previous Year 24,267,960 137,669,271 166,390,915 122,719,916 178,408,291 494,831,959 24,179,856 19,266,931 10,715,257 32,555,469 55,767,371 Amount inRs. Amount inRs. 745,800 415,000 88,104 - - - - - Committed to change ... for better 45 Himalayan Bank Ltd. | Annual Report 2013/14 - - - Year Year Previous Previous Amount in Rs. 54,684,123 Amount in Rs. Amount in Rs. 95,218,373 95,218,373 810,375,805 2,427,014,381 2,427,014,381 356,124,343 260,905,970 260,905,970 865,059,928 Previous Year Year Previous 2,427,014,381 Previous Year Year Previous SCHEDULE 8 SCHEDULE SCHEDULE 9 - - SCHEDULE 10 - 427,993,882 427,993,882 235,975,820 235,975,820 663,969,702 Current Year Year Current 3,766,154,837 3,766,154,837 Current Year Year Current - - - - 3,766,154,837 Total Total - 427,993,882 427,993,882 Total Total 427,993,882 99,840,284 99,840,284 - - - - 99,840,284 49,439,656 - 1,063,025,807 Current Year Year Current 348,714,457 348,714,457 1,112,465,463 348,714,457 99,840,284 99,840,284 99,840,284 Foreign Currency Foreign Convertible Currency Currency Convertible Foreign Currency Foreign - - - - Convertible Currency Currency Convertible INR - - - - 79,279,425 79,279,425 79,279,425 INR

- - - - - 235,975,820 235,975,820 235,975,820 3,666,314,553 3,666,314,553 Local Currency 3,666,314,553 Local Currency Local Currency Particulars 1. Nepal Rastra Bank Account a. Current Other b. Account Total 1.Local Licensed Institutions1.Local Particulars 2. Foreign Bank 2. Foreign Account a. Current Other b. Account Total b. Other b. Account a. Current Account Account a. Current Total Total 1 Local Currency (Including 1 Local coins) Currency 2. Foreign Particulars BALANCE WITH NEPAL RASTRA BANK WITH NEPAL BALANCE Note: Total balance as per the statement of Nepal Rastra balance as per the statement Bank is Rs 3,845,524,661 Total Note: Note: Total balance as per the statement received from respective bank is Rs 995,657,223 respective from received balance as per the statement Total Note: BALANCE WITH BANKS/ FINANCIAL INSTITUTIONS WITH BANKS/ BALANCE CASH BALANCE Himalayan Bank Ltd. | Annual Report 2013/14 46 Committed to change ... for better INVESTMENTS MONEY AT ANDSHORTNOTICE CALL Total 2.Foreign Currency 1.Local Currency Particulars 1.NepalGovernment Treasury Bills 2NepalGovernmentSaving Bond 3.Nepal Government Other Securities Securities 3.NepalGovernmentOther 4. NRB Bonds 4.NRBBonds 5.Foreign Bonds 6.Local LicensedInstitutions 7.Foreign Banks 8.Corporate Shares 9.Corporate andDebentures Bonds 10. Other Investments 10.Other TotalInvestment Provision Net Investment Particulars Particulars Trading ------Purpose 19,843,275,144 10,158,618,779 2,024,355,644 1,288,873,410 6,281,425,252 90,002,059 Other Other - - - - - 196,100,000 Current Year 100,000,000 96,100,000 19,842,060,285 19,843,275,144 10,158,618,779 Current Year 2,024,355,644 1,288,873,410 6,281,425,252 90,002,059 1,214,859 - - - - - SCHEDULE 12 SCHEDULE 11 12,992,044,772 12,993,259,631 2,061,831,588 Previous Year Previous Year 7,279,759,154 2,607,001,327 1,218,946,916 1,797,550,175 2,011,831,588 90,002,059 1,214,859 Amount inRs. Amount inRs. 50,000,000 - - - - - Committed to change ... for better 47 Himalayan Bank Ltd. | Annual Report 2013/14 - - 1,214,859 3,000,000 7,380,100 1,214,859 1,423,300 2,500,000 1,200,000 Amount in Rs. 48,000,000 12,793,300 12,490,500 1,214,859 90,002,059 88,787,200 Previous Year Year Previous - - SCHEDULE 12 (A) SCHEDULE 1,214,859 3,000,000 7,380,100 1,214,859 1,423,300 2,500,000 1,200,000 48,000,000 12,793,300 12,490,500 1,214,859 90,002,059 88,787,200 Current Year Year Current ------1,214,859 1,214,859 1,214,859 Provision Provision 1,214,859 - 3,795,000 1,214,859 3,930,400 2,500,000 1,200,000 407,040,000 350,165,400 368,409,734 280,178,345 Market value value Market 1,418,433,738 - 3,000,000 7,380,100 1,214,859 1,423,300 2,500,000 1,200,000 48,000,000 12,793,300 12,490,500 Cost Price Price Cost 90,002,059 2.1 ………….. 2.2 ………….. 2.3 ………….. 480,000 Shares @ Rs. 100 per share, fully paid up 100 per share, @ Rs. 480,000 Shares 37,950 Shares (including 7,950 bonus shares) shares) (including 7,950 bonus 37,950 Shares fully paid up 100 per share, @ Rs. 269,358 Shares (including 141,425 bonus shares) shares)bonus (including 141,425 Shares 269,358 fully paid up per share, @ Rs.100 251,818 Shares (including 178,017 bonus shares) shares)bonus (including 178,017 Shares 251,818 fully paid up 100 per share, @ Rs. 180,179 Shares (including 55,274 bonus shares) 55,274 bonus shares) (including 180,179 Shares fully paid up 100 per share, @ Rs. 6 Shares 6 Shares 39,304 shares (including 25,071 bonus shares) 25,071 bonus shares) (including 39,304 shares fully paid up 100 per share, @ Rs. 25,000 shares @ Rs. 100 each, fully paid up Rs. @ 25,000 shares 12,000 shares of Rs. 100 each, fully paid up 100 each, fully of Rs. 12,000 shares 5,860 nos. of Common Stock Stock of Common 5,860 nos. C Shar Laghu Bitta Bikas dividend in the last National Banking not declared Information have Bank Limited, Corporation Limited Institute and Credit Limited Bitta Laghu Years. three Development Centre are listed in Nepal Stock Exchange. Exchange. in Nepal Stock listed are Development Centre Total Investment Investment Total Total Provision Provision Total 3. Provision for Loss Loss for 3. Provision year previous 3.1 Up to 3.2 Addition this year this year 3.2 Addition 2. Investment in Debentures and Bonds in Debentures 2. Investment 1.1 Rural Microfinance Dev Centre 1.1 Rural Microfinance Centre Dev Particulars 1. Investment in Shares in Shares 1. Investment Net Investment Investment Net 1.2 Western Rural Development Bank Western 1.2 1.3 Nirdhan Utthan Bank Ltd. 1.3 Nirdhan Utthan Ltd. Bank 1.4 Chhimek Laghu Bitta Bikas Ltd. Bank 1.5 Swabalamban Laghu Bitta Bikas1.5 Swabalamban Ltd. Bank 1.6 Swift SC 1.7 Credit Information Corporation Limited 1.7 Credit 1.8 Nepal Clearing House Ltd. 1.9 VISA Card InternationalVISA Card 1.9 1.10 National Banking Institute Limited 2. 2. RuralDevelopment Bank, Swabalamban Western Bikas Nirdhan Utthan BankLimited, BankLimited, Bitta RMDC,ChhimekLaghu ompanies except Note: Note: 1. LaghuBittaBikases ofChhimekLaghuBittaBikas Swabalamban Nirdhan Utthan BankLimited, andRuralMicro Finance BankLimited BankLimited, INVESTMENTS IN SHARES, DEBENTURES AND BONDS AND DEBENTURES IN SHARES, INVESTMENTS Himalayan Bank Ltd. | Annual Report 2013/14 48 Committed to change ... for better HELD TO MATURITY INVESTMENTS HELD FOR INVSTMENTSTRADING 6.Shares ofLocal LicensedInstitutions Total Investments 5.Foreign Bonds 11. Other Investments 11.Other 4. Nepal Rastra BankBonds 4.NepalRastra 10. Inter BankLending 10.Inter 3. Nepal Government Other Securities 3.NepalGovernmentOther 9.Placement inForeign Banks 2.NepalGovernmentSaving Bonds Local Organised Institutions 1.NepalGovernment Treasury Bills 8.Shares, Debentures of andBonds 7. Debentures ofLocal andBonds LicensedInstitution Particulars Total Investments Investments 10.Other 9.Placement inForeign Banks Local Organised Institutions 8.Shares, Debentures of andBonds nsedInstitutions 7.Debentures of Local andBonds Lice- 6.Shares ofLocal LicensedInstitutions 5.Foreign Bonds BankBonds 4.NepalRastra Securities 3.NepalGovernmentOther 2.NepalGovernmentSaving Bonds 1.NepalGovernment Treasury Bills Particulars 19,753,273,085 19,753,273,085 10,158,618,779 1,288,873,410 6,281,425,252 2,024,355,644 Cost Price Cost price ------15-Jul-2013 15-Jul-2013 Market Price AsAt Impaired Amount till ------16-Jul-2014 16-Jul-2014 ------Current Year Current Year Profit / Loss Profit / Loss ------Previous Year Previous Year SCHEDULE 12.1 SCHEDULE 12.2 ------Amount inRs. Amount inRs. Remarks Remarks Committed to change ... for better 49 Himalayan Bank Ltd. | Annual Report 2013/14 Remarks Amount in Rs. SCHEDULE 12.3 SCHEDULE Previous Year Year Previous Profit / Loss / Profit Current Year Year Current 7,630,400 1,214,859 1,409,588,479 16-Jul-2014 1,418,433,738 Market Price As At At As Price Market 6,975,300 1,214,859 262,571,461 15-Jul-2013 270,761,620 ------5,123,300 1,214,859 Cost price Cost 83,663,900 90,002,059 Particulars 8. Shares, Debentures and Bonds of Debentures 8. Shares, Local Organised Institutions Organised Local 9. Placement in Foreign Banks in Foreign 9. Placement 10. Other Investments Total Investments Total 7. Debentures and Bonds of Local Licensed Institution and Bonds of Local 7. Debentures 1. Nepal Government Treasury Bills Treasury 1. Nepal Government 2. Nepal Government Saving Bonds 2. Nepal Government Saving 3. Nepal Government Other Securities 4. Nepal Rastra Bank Bonds Bonds 5. Foreign Licensed Institutions of Local 6. Shares AVAILABLE FOR SALE INVESTMENTS FOR AVAILABLE *For the shares, which are not listed in Nepal Stock Exchange, cost of acquisition is considered as the market acquisition is considered cost of price. Exchange, in Nepal Stock not listed which are the shares, *For Himalayan Bank Ltd. | Annual Report 2013/14 50 Committed to change ... for better

CLASSIFICATION OF LOANS AND BILLS PURCHASED AND PROVISIONING SCHEDULE 13 Amount in Rs. Loans & Advances Bills Purchased & Discounted Particulars Domestic Current Year Previous Year Priority Foreign Total Local Foreign Total Other Insured Un-insured 1. Performing Loan - - 42,899,192,698 591,334,407 43,490,527,105 44,280,008 2,003,007,319 2,047,287,327 45,537,814,432 39,871,207,583 1.1 Pass Loan - - 42,899,192,698 591,334,407 43,490,527,105 44,280,008 2,003,007,319 2,047,287,327 45,537,814,432 39,871,207,583 2. Non-Performing Loan - - 879,051,190 30,276,413 909,327,603 2,000,000 187,395 2,187,395 911,514,998 1,186,189,950 1.2 Re-structured - 151,102,227 - 151,102,227 - - - 151,102,227 153,485,973 2.1 Substandard - - 235,258,043 - 235,258,043 2,000,000 - 2,000,000 237,258,043 73,774,236 2.2 Doubtful - - 74,432,313 - 74,432,313 - - - 74,432,313 456,150,359 2.3 Loss - - 418,258,607 30,276,413 448,535,020 - 187,395 187,395 448,722,415 502,779,382 (A) Total Loan - - 43,778,243,888 621,610,820 44,399,854,708 46,280,008 2,003,194,714 2,049,474,722 46,449,329,430 41,057,397,533 3. Loan Loss Provision 3.1 Pass - 434,301,753 5,913,344 440,215,097 442,800 20,030,073 20,472,873 460,687,970 470,949,511 3.2 Re-structured - - 123,029,134 - 123,029,134 - - - 123,029,134 113,344,335 3.3 Substandard - - 58,814,511 - 58,814,511 500,000 - 500,000 59,314,511 18,443,559 3.4 Doubtful - 37,216,156 - 37,216,156 - - - 37,216,156 228,075,180 3.5 Loss - - 418,258,607 30,276,413 448,535,020 - 187,395 187,395 448,722,415 502,779,382 (B) Total Provisioning - - 1,071,620,161 36,189,757 1,107,809,918 942,800 20,217,468 21,160,268 1,128,970,186 1,333,591,967 4. Provisioning up to Previous Year 4.1 Pass - 450,017,234 6,847,221 456,864,455 276,702 13,808,354 14,085,056 470,949,511 359,029,377 4.2 Re-structured - - 113,344,335 - 113,344,335 - - - 113,344,335 104,973,933 4.3 Substandard - - 18,443,559 - 18,443,559 - - - 18,443,559 19,101,417 4.4 Doubtful - 228,075,180 - 228,075,180 - - - 228,075,180 31,033,894 4.5 Loss - - 499,035,937 3,544,340 502,580,277 - 199,105 199,105 502,779,382 488,900,318 (C) Total Provison up to Last Year - - 1,308,916,245 10,391,561 1,319,307,806 276,702 14,007,459 14,284,161 1,333,591,967 1,003,038,939 (D) Provision written back this year - (768,036,539) (2,780,256) (770,816,795) (121,702) (3,080,915) (3,202,617) (774,019,412) (368,625,160) (E) This year’s additional provision 530,740,455 28,578,452 559,318,907 787,800 9,290,924 10,078,724 569,397,631 699,178,188 (F) Net adjustment during the year - - (237,296,084) 25,798,196 (211,497,888) 666,098 6,210,009 6,876,107 (204,621,781) 330,553,028 Net Loan (A - B) - - 42,706,623,727 585,421,063 43,292,044,790 45,337,208 1,982,977,246 2,028,314,454 45,320,359,244 39,723,805,566 Committed to change ... for better 51 Himalayan Bank Ltd. | Annual Report 2013/14 - -

- - - - 240,000 6,852,109 (1,395,305) 1,534,821,236 Amount in Rs. Amount in Rs. 107,192,847 546,248,336 77,730,770 32,324,781 28,066,673 121,608,460 (17,139,269) (26,301,881) 564,051,368 519,850,811 519,850,811 325,671,342 898,519,322 636,301,914 1,440,909,962 1,426,919,932 1,408,704,678 Previous Year Year Previous 37,077,239,290 Previous Year Year Previous 1,308,773,543 41,057,397,533 41,057,397,533 SCHEDULE 14 - -

SCHEDULE 13 (A) SCHEDULE Year Year (449,254) Current Current 1,622,940,422 106,164,870 636,301,914 62,768,762 36,803,856 118,017,126 (17,096,882) (29,448,686) 1,322,814,480 1,534,821,236 325,671,342 897,570,520 725,369,902 - -

- - - - - Office (504,483) (236,774) (464,649) 521,414,864 equipment 37,014,437 26,846,419 240,722,999 495,269,868 244,181,911 277,232,953 56,249,128 60,522,484 644,241,595 418,806,021 418,806,021 1,895,300,617 2,049,474,722 Current Year Year Current 41,324,734,863 46,449,329,430 - -

46,449,329,430 (212,480) 421,177,942 28,218,857 32,482,802 (3,172,905) (3,850,619) Machinery 258,322,175 392,758,239 137,809,815 283,368,127 Assets - - -

Vehicles Vehicles 254,532,599 22,400,542 83,872,182 56,022,600 92,853,230 223,643,417 (13,419,494) (25,133,418) 161,679,369 - - - - -

Building 2,665,305 425,815,017 18,531,034 53,384,558 71,915,592 423,149,712 353,899,425 Total (3 + 4 + 5 + 6) Total 6. Leasehold Assets Assets 6. Leasehold 5. Capital Construction (WIP) Construction 5. Capital 4. Land 3. Book Value (WDV)*(1-2)Value 3. Book Total Depreciation Depreciation Total d. Depreciation Adjusted/Written Back Adjusted/Written Depreciation d. c. Depreciation on revaluation/written on revaluation/written Depreciation c. back b. For this year this year For b. a. Up to previous year year previous a. Up to 2. Depreciation 2. Depreciation Total Cost (a + b + c + d + e) (a + b + Cost Total e. This Year written off Year This e. d. This year sold year This d. c. Revaluation / Written back this year back this year Written Revaluation / c. b. Addition this year this year Addition b. (B) Unsecured Total 10. Other Securities 9. Personal Guarantee Guarantee 9. Personal b. FDR of other Licensed Institutions b. 7. Nepal Government Bonds Guarantee 8. Counter a. Own FDR 6. Fixed Deposit Receipts 6. Fixed 5. Export Documents 3. Government Guarantee 3. Government Guarantee 4. Internationally Rated Bank Guarantee 2. Guarantee of Local Licensed Institutions of Local 2. Guarantee Cost 1. At Particulars (A) Secured (A) 1. Movable / Immovable Assets Balance Year a. Previous Particulars FIXED ASSETS SECURITY WISE DETAIL OF LOANS, WISE DETAIL SECURITY BILLS PURCHASED AND ADVANCES Himalayan Bank Ltd. | Annual Report 2013/14 52 Committed to change ... for better OTHER ASSETS NON BANKING ASSETS Total Less: Provision for possiblelosses c.Others b. Advance Corporate Tax a.Advance for capitalworks 14.Others 13.Deferred Tax Assets 12.BranchAdjustment Account off 11.Expensesnotwritten Paid 10.Drafts withoutNotice 9.Other Transit Cheques) Items(Including 8.Cash in Transit 7.Prepayments 6.Staff Loan and Advances Debtors 5.Sundry 4.Commission Receivable Less :Interest SuspenseAmount 3.Accrued Interest onLoan oninvestments Receivable 2.Income 1.Stock ofStationery Particulars Net Assets Non-banking Closingprovision onNBA Addition theyear during OpeningBalanceofNBAProvision Grand Total Prism International Everest Floriculture Everest Floriculture Everest Floriculture Ramesh BabuShrestha Ramesh Borrower orParty &AddressName of Date ofAssuming Non-Banking Non-Banking Assets 2013.10.17 2014.06.23 2013.10.02 2013.07.15 2010.12.09 of Non-Banking of Non-Banking Totalamount (182,753,122) (409,263,389) 276,722,146 449,463,362 9,055,230 Assets 265,939,756 265,939,756 182,454,717 112,590,645 83,485,039 53,000,000 16,864,072 83,109,039 376,000 -

- 100 100 100 100 100 Loss Provision % 1,365,921,687 265,939,756 Current Year in Amount 112,590,645 103,024,254 167,315,022 863,958,962 53,000,000 16,864,072 83,109,039 47,485,624 64,319,140 40,199,973 51,952,149 26,699,457 376,000 960,318 6,788 - - - - 182,454,717 112,590,645 Current 53,000,000 16,864,072 Year SCHEDULE 15 SCHEDULE 16 - - 1,378,847,102 Previous Year 83,485,039 (172,609,918) (651,046,236) 83,485,039 83,109,039 83,109,039 Amount inRs. Amount inRs. 338,600,373 185,710,671 195,079,123 799,601,079 651,046,236 Previous 19,720,216 62,887,064 53,556,249 60,283,463 21,729,453 376,000 376,000 Year ------Committed to change ... for better 53 Himalayan Bank Ltd. | Annual Report 2013/14 ------Amount in Rs. Amount in Rs. 44,291,281 651,046,236 393,250,015 569,722,321 174,794,978 269,404,117 138,921,351 289,679,180 657,703,739 3,573,845,874 1,132,497,904 2,352,049,320 1,377,795,689 1,786,121,157 3,407,349,096 3,697,028,276 Previous Year Year Previous 651,046,236 Previous Year Year Previous 14,381,304,865 SCHEDULE 17 - - SCHEDULE 16 (A) SCHEDULE Total Total 449,463,362 449,463,362 ------56,690,052 447,489,324 661,251,268 607,819,643 491,194,947 233,829,552 947,411,169 653,105,239 4,205,049,312 1,043,767,670 3,021,093,483 1,568,767,631 2,293,792,130 5,915,111,928 6,862,523,097 Current Year Year Current 74,282,871 74,282,871 19,852,581,218 Above 3 Years Years 3 Above - - Current Year Year Current 125,977,911 1 to 3 Year Year 3 1 to 125,977,911 - - 249,202,580 249,202,580 Upto 1 year 1 year Upto 15. Others Total 14. Contingent Liabilities on Income Tax Tax Liabilities on Income 14. Contingent 13. Financial Guarantee Guarantee 13. Financial 12. Advance Payment Guarantee Guarantee Payment 12. Advance 11. Counter Guarantee of internationallyRated Guarantee Banks 11. Counter 10. Irrevocable Loan Commitments Commitments 10. Irrevocable Loan 9. Underwriting Commitments 8. Acceptance and Endorsements 8. Acceptance 7. Bills under collection 5. Unpaid Shares in Investment in Investment 5. Unpaid Shares contract Exchage liablities 6. Forward c. Other c. Bonds Guarantees/ b. Performance Bond Performance b. a. Bid Bond 3. Rediscounted Bills 3. Rediscounted Guarantees/Bonds 4. Unmatured b. More than 6 months maturity More b. a. Less than 6 months maturity a. Less 2. Letters of Credit (full amount) of Credit 2. Letters Particulars 1. Claims on Institutions bank by but not accepted 1. Accured interest on Loan on Loan interest 1. Accured without Notice 2. Drafts Paid Particulars 3. Branch Adjustment A/c 3. Branch Adjustment 4. Agency Balance Total CONTINGENT LIABILITIES CONTINGENT OTHER ASSETS (Additional Statement) (Additional ASSETS OTHER Himalayan Bank Ltd. | Annual Report 2013/14 54 Committed to change ... for better INTEREST INCOME Particulars A. On Loan, A.On Advances andOverdraft B. Investment On C. On Agency Balances Agency C.On D. Notice at Money On Call and Short E. On Others E. Others On Total 1.Loan andAdvances 2. Overdraft 2.Overdraft 1. Nepal Government Securities 1.NepalGovernmentSecurities 2.Foreign Securities 3. Nepal Rastra Bank Bonds BankBonds 3.NepalRastra 4.Debenture andBonds 5. Interest on Inter BankLending 5.Interest onInter 1.Local Banks 2.Foreign Banks 1.Local Banks 2.Foreign Banks 2. Inter-Bank Loan 2.Inter-Bank Deposits of 1.Certificate 3.FCYPlacements a. Treasury Bills b. Bonds Development c. NationalSaving Certificate a.…………. b…………… B. Other Organizations B. Other A.Bank/Financial Institutions 4,742,975,480 4,380,824,588 Current Year 3,319,241,072 1,061,583,516 289,002,310 289,002,310 111,464,109 177,538,201 70,245,458 20,757,208 49,488,250 1,973,468 1,913,237 929,656 929,656 60,231 ------SCHEDULE 18 4,627,335,224 Previous Year 4,261,373,692 3,090,912,514 1,170,461,178 326,766,166 326,766,166 137,281,229 189,484,937 35,607,317 27,088,258 3,128,456 Amount inRs. 3,117,083 8,519,059 459,593 459,593 11,373 ------Committed to change ... for better 55 Himalayan Bank Ltd. | Annual Report 2013/14 ------6,209,781 4,490,942 Amount in Rs. 34,072,986 64,242,337 25,416,114 95,559,852 10,491,907 47,594,222 40,131,507 55,948,324 24,328,142 24,328,142 Amount in Rs. 185,770,968 206,289,793 840,403,834 916,931,689 58,086,129 87,000,682 102,289,612 230,617,935 844,894,776 941,259,831 405,062,257 550,149,068 Previous Year Year Previous Previous Year Year Previous 2,119,062,154 SCHEDULE 20 SCHEDULE 19 SCHEDULE ------494,233 5,726,340 50,317,539 51,355,121 30,078,704 10,163,049 59,098,084 88,000,000 42,150,062 20,003,124 28,143,160 118,624,131 252,097,006 220,365,030 942,251,633 901,664,130 69,261,133 85,564,466 130,644,295 240,368,154 947,977,973 929,807,290 502,472,501 Current Year Year Current Current Year Year Current 657,298,100 2,248,797,712 1. Debentures and Bonds 1. Debentures Nepal Rastra from Bank 2. Loan 3. Inter Bank/Financial Institutions Borrowing 3. Inter Bank/Financial 4. Other Bodies Corporate 3.1 Local Currency 3.1 Local Currency 3.2 Foreign 5. Other Loans 2.1 Local Currency 2.1 Local Currency 2.2 Foreign 1.1 Local Currency 1.1 Local Currency 1.2 Foreign 4. Certificate of Deposits 4. Certificate 3. Call Deposit 3. Call 2. Saving Deposits 2. Saving 1. Fixed Deposits 1. Fixed 1. Letters of Credit 1. Letters 2. Guarantees 3. Collection Fees 4. Remittance Fees Fee Cards 5. Credit Underwriting6. Share /Issue 1. Local 2. Foreign 7. Government Trasactions 8. Agency Commissions Fees 9. Exchange B. On Borrowings On Borrowings B. C. Others Total A. On Deposit Liabilites A. On Deposit Liabilites Particulars B. Commission B. Total A. Bills Purchased and Discounted A. Bills Purchased C. Others Particulars COMMISSION AND DISCOUNT INCOME AND DISCOUNT COMMISSION INTEREST EXPENSES INTEREST Himalayan Bank Ltd. | Annual Report 2013/14 56 Committed to change ... for better STAFF EXPENSES EXCHANGE GAIN/(LOSS) OTHER OPERATING INCOME Total 7.Others Fees 6.Renewal Charges 5.Service 4. Telex/ T. T ofATM 3.IssueandRenewals Cards ofCredit 2.IssueandRenewal Cards 1.Safe Lockers Deposit Rental Particulars Total 9.Others 8.Pension andGratuity 7.Insurance 6.Medical 5.Uniform 4. Training Expenses to 3.Contribution Provident Fund 2.Allowances 1.Salary Particulars Total Income /(Loss) B. Trading (includingexchange Gain Fee onINR) Gain/(Loss) A.Revaluation Particulars 385,101,575 713,829,706 206,814,193 Current Year Current Year Current Year 378,032,829 291,931,480 267,887,314 25,171,812 64,166,508 29,381,946 25,337,520 68,102,243 17,808,589 33,878,828 71,793,046 15,231,487 7,068,746 6,448,600 3,504,526 - - - SCHEDULE 22 SCHEDULE 21 SCHEDULE 23 Previous Year Previous Year Previous Year 300,469,098 165,071,706 682,978,114 (43,691,223) 344,160,321 280,202,263 254,821,527 52,709,108 14,828,973 36,420,170 51,806,748 29,867,118 55,767,371 28,137,848 23,433,855 Amount inRs. Amount inRs. Amount inRs. 9,306,707 5,672,515 5,075,617 - - - Committed to change ... for better 57 Himalayan Bank Ltd. | Annual Report 2013/14 - - 960,800 634,219 459,051 944,500 966,518 758,572 745,800 644,280 2,785,845 1,887,509 1,173,293 5,856,202 4,911,702 1,390,080 1,505,969 7,494,521 95,436,822 17,695,143 68,477,681 63,804,327 11,598,315 30,999,399 38,986,002 29,141,535 30,780,423 18,692,091 23,563,695 23,127,190 32,655,408 49,588,315 15,132,773 83,343,488 Amount in Rs. 154,500,394 252,837,690 107,192,847 852,110,746 Previous Year Year Previous SCHEDULE 24 SCHEDULE - - 490,412 196,255 1,019,176 1,439,693 6,703,788 1,158,990 1,456,423 1,380,187 1,693,789 7,839,498 19,344,477 70,069,017 15,789,574 40,684,981 46,739,721 25,889,005 34,923,946 31,117,667 24,864,456 87,838,558 102,995,984 336,319,252 106,164,870 Current Year Year Current 966,119,719 799,600 820,380 636,043 1,871,048 2,078,673 1,152,500 5,551,288 66,119,296 43,919,658 57,493,269 27,980,043 206,126,682 1. Office Rent Meeting Fees Committee c. Janitorial & Cleaning Fuel, d. Particulars 2. Electricity & Water Water 2. Electricity & 3. Repairs and Maintenance a. Building Vehicles b. Others c. 4. Insurance Fax Telephone, Telex, 5. Postage Furniture- 6. Office Repairs Equipment & and Expenses Allowances 7.Travelling and Stationery 8. Printing 9. Books and Periodicals 10 Advertisements Expenses 11. Legal 12. Donations of Directors Board 13. Expenses Relating to a. Meeting Fees Other b. Expenses 14. Annual General Meeting Expenses Audit 15. Expenses Relating to Fees a. Audit Services Fee Technical 20 21. Entertainment off Expenses Written 22. 23. Security Expenses Premium Guarantee 24. Credit and Discount 25. Commission 26. Others and Charges Fee a. Registration Membership and other expenses Card b. Others e. Total b. Other b. Expenses on Remittances 16. Commission Assets on Fixed 17. Depreciation 18. Amortization Issue Expenses 19. Share OTHER OPERATING EXPENSES OPERATING OTHER Himalayan Bank Ltd. | Annual Report 2013/14 58 Committed to change ... for better PROFIT/ (LOSS) FROM EXTRA-ORDINARY ACTIVITIES LOSS PROVISIONS BACKWRITTEN NON OPERATING INCOME /(LOSS) PROVISION FORPOSSIBLELOSSES Total 5.Provision for Guarantee Performance Bond ClaimofMWSDB 4.Provision Assets againstOther 3.Provision Assets againstNon-Banking inProvision 2.Increase for Loss onInvestment inLoan 1.Increase Loss Provision Particulars Total Non- Operating Income (Loss) 5.Others c. Exchage counter b. interest subsidy oflossesspecified branches a.Reimbursement 4.Subsidiesreceived Bank from NepalRastra 3.Dividend profit onsaleofNBARs.2,454,495] [Includes 2.Profit /(Loss) onSaleof Assets 1.Profit/(Loss)Investment onSale Particulars Total 4.Provision Assets againstOther Written Back 3.Investment Provision Written Back 2.Provision Assets againstNon-Banking Written Back 1.Loan Loss Provision Written Back Particulars Total Expenses/Income 4.Other 3.Loan Write/offs 28 [Schedule (A)] 2. Retirement Expenses Voluntary Scheme of 1.Recovery Writen off Loan Particulars Current Year 8,645,806 (9,699,493) 18,345,299 1,080,863,093 774,565,043 Current Year Current Year Current Year 17,487,163 - - 319,772,750 182,454,717 569,397,631 774,268,452 14,479,955 3,007,208 9,237,995 296,591 ------SCHEDULE 26 SCHEDULE 25 SCHEDULE 28 SCHEDULE 27 Previous Year Previous Year Previous Year Previous Year 842,900,089 369,392,717 (7,003,881) (16,639,686) 699,178,188 368,625,160 5,999,157 83,109,039 60,612,862 Amount inRs. Amount inRs. Amount inRs. Amount inRs. 9,635,805 3,039,791 2,959,366 767,557 ------

Committed to change ... for better 59 Himalayan Bank Ltd. | Annual Report 2013/14

Total Loan Total 9,699,493 9,699,493

balcklisted

with the photographs, cardholders cardholders photographs, the with

published in newspaper along along newspaper in published

Credit Card Loan Card Credit 3 BM/ECO/DGM/SGM NA Guarantee Personal 4,804,952

the card holders, 35 days notice notice days 35 holders, card the

calls, written notices served to to served notices written calls,

Follow-up through telephonic telephonic through Follow-up

newspaper, borrowers blacklisted. borrowers newspaper,

favour of bank of favour

Hire Purchase Hire 2 2,528,121 2,528,121 Purchased / invoice value invoice / Purchased BM/EC/DGM 35 days notice published in in published notice days 35

Vehicle registered in in registered Vehicle

Served various follow-up letters, letters, follow-up various Served

NBA take over take NBA

newspaper, borrowers blacklisted, blacklisted, borrowers newspaper,

(land and building) and (land government value government

Overdrafts Overdrafts 1 2,366,420 2,366,420 BM/SGM letters, 35 days notice published in in published notice days 35 letters,

Mortgage of fixed assets assets fixed of Mortgage 70% market value 30% 30% value market 70%

calls, served various follow-up follow-up various served calls,

Follow-up through telephonic telephonic through Follow-up

Type of Loan of Type N. S. Amount Written off Written Amount Security Detail Security Basis of valuation of Basis Approving authority Approving Recovery steps taken steps Recovery Remarks

Amount in Rs. in Amount STATEMENT OF LOANS WRITTEN-OFF LOANS OF STATEMENT SCHEDULE 28A SCHEDULE Himalayan Bank Ltd. | Annual Report 2013/14 60 Committed to change ... for better Note: Staff The Bankhasvarious Schemes andtheloans Loan availed undersuchschemes by theStaffs are includedunder Other Assets”“Schedule 16- CEO/ PROMOTERS/ EMPLOYEES ANDSHAREHOLDERS STATEMENT OFLOANS &ADVANCES GIVEN TO DIRECTORS/ or to theorganizations orcompaniesinwhichsuchindividualsare managing agent,are asfollows: Promoters, Out oftoal BillsPurchased andDiscounted, Loans, Advances amountprovided andOverdraft, to theDirectors, ChiefExecutive, 1. ………….. (A) Directors /Chief ExecutiveDirectors ofPromotersName / Total 2. ………….. 3. ………….. 1. ………….. (B) ChiefExecutives 2. ………….. 3. ………….. 1. ………….. Promoters(C) 2. ………….. 3. ………….. 1. ………….. (D) Employees 2. ………….. 3. ………….. 1. ………….. (E) Shareholders 2. ………….. 3. …………..

Emplo yees, Shareholders andto individualmembersoftheirundividedfamilyoragainsttheguarantee ofsuchpersons Previous Years’s Balance Principal ------Interest ------Principal This YearRecovery ------Interest ------

Additions This Year ------Balance asofAshad32,2068 Principal ------SCHEDULE 29 Amount inRs. Interest ------

Committed to change ... for better 61 Himalayan Bank Ltd. | Annual Report 2013/14 ------8.96 11.55 500,856 4,685,148 4,000,000 1,673,278 83,074,061 62,887,064 29,769,898 Amount in Rs. 138,000,000 514,285,713 442,298,029 567,753,622 212,516,333 800,000,000 398,304,246 1,571,890,689 3,906,766,930 1,077,507,758 2,760,000,000 49,526,322,948 1,442,263,755 4,972,173,697 6,414,437,452 Previous Year Year Previous 55,520,649,287 SCHEDULE 30A SCHEDULE ------9.03 11.23 283,657 4,000,000 1,673,278 82,926,027 47,485,624 18,357,988 31,537,085 700,000,000 434,700,000 671,428,570 189,690,740 212,516,333 455,378,144 1,763,712,138 4,586,360,657 1,820,321,497 1,803,169,336 2,898,000,000 Current Year Year Current 55,329,593,123 1,401,104,840 5,754,474,636 7,155,579,476 63,729,135,353 Subordinated Term Debt Term Subordinated Less shortfallLess in Provision parties loans and facilities extended related to and restricted Less lending Cumulative and/or Redeemable Preference Share and/or Redeemable Preference Cumulative Less: Goodwill Less: Miscellaneous not written off Expenditure Less: Institutions in equity Investment in licensed Financial Less: in equity Investment with financial interests of institutions Less: in equity of limits Investment in excess of institutions Less: arising Investments out of underwritingLess: commitments crossholdings Reciprocal Less: OtherLess: Deductions Current year profit/(loss) year Current Reserve Tax Deferred Share Premium Share Bonus Equity Shares Proposed Statutory General Reserves Retained Earnings RedemptionCapital Reserve Reserve Adjustment Capital ReservesDividend Equalization RedemptionDebenture Reserve Special Reserve Adjustment under Pillar II under Pillar Adjustment risk operational for income 5% of gross Add RWE risk 3% of total overalll Add: for PARTICULARS WEIGHTED EXPOSURES RISK Risk Credit for Exposure Weighted Risk Risk Operational for Exposure Weighted Risk Market for Exposure Risk Weighted Risk CAPITAL Capital up Equity Share Paid shares Irredeemable Non-cumulative preference Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures Weighted Risk Total to 2 Capital Tier 1 and Tier Assets RevaluationAssets Reserve Other Reserves RATIOS ADEQUACY CAPITAL Exposures Weighted Risk Total to 1 Capital Tier Hybrid Instruments Capital Reserve Adjustment Investment General loan loss provision Reserve Equalization Exchange b Adjustment under Pillar II under Pillar Adjustment Supplementary (Tier Capital II) a n o p q r s t u g m c d e f h i j k l 1.1 a b c (a+b+c) Exposures Weighted Risk Total 1.2 (Tier Capital I) Core a b g h II) Tier (Tier I and Fund Capital Total 1.3 c f d e TABLE OF CAPITAL FUND CAPITAL OF TABLE 2014) 16, 2071 (JULY ASHAD 32, AS AT Himalayan Bank Ltd. | Annual Report 2013/14 62 Committed to change ... for better AS AT ASHAD32,2071(JULY 16,2014) FOR CREDITRISK EXPOSURE RISK WEIGHTED Claims onForeign Government andCentral (ECA-7) Bank Claims onForeign Government andCentral (ECA-4-6) Bank Claims onForeign Government andCentral (ECA-3) Bank Claims onForeign Government andCentral (ECA-2) Bank Claims onForeign Government andCentral (ECA0-1) Bank All Claims on Nepal Rastra Bank All Claims Bank onNepalRastra Investment securities Bank inNepalRastra All Claims onGovernment ofNepal Gold Investment inNepaleseGovernment Securities Balance With Bank NepalRastra Other Assets Cash intransit & othercash items intheprocess ofcollection Claims onPublic Entity (ECA7) Sector Claims onPublic Entity (ECA3-6) Sector Claims onPublic Entity (ECA2) Sector Claims onPublic Entity (ECA0-1) Sector Claims onOtherMultilateral Development Banks (MDB's)recognizedBanks by theframework Claims BIS,IMF, On ECB, ECandon Multilateral Development Cash Balance TOTAL Interest Receivable/Claim onGovernment securities Regulatory Retail Portfolio (NotOverdue) Portfolio Retail Regulatory Claims onForeign Corporates (ECA7) Claims onForeign Corporates (ECA3-6) Claims onForeign Corporates (ECA2) A. BALANCE SHEETEXOSURESA. BALANCE PARTICULARS requirements Claims ondomesticbanksthat meetcapital adequacy Claims secured by residential properties Claims fulfillingallcriterion of regulatory retail except granularity requirements Claims ondomesticbanksthat donotmeetcapital adequacy Claims notfully secured by residential properties Claims onforeign 0-1) bank(ECARating Claims secured by residential (Overdue) properties Claims onforeign 2) bank(ECARating Claims secured by Commercial real estate requirement with abufferof1%above their respective capital regulatory Claims onforeign bankincorporated inSAARCregion operating Claims onforeign 7) bank(ECARating Claims onforeign 3-6) bank(ECARating Past dueclaims(except forclaimsecured by residential properties) Claims on Domestic CorporatesClaims onDomestic High Risk claims High Risk Claims onForeign Corporates (ECA0-1) listed inthestock exchange Investments andothercapital instruments inequity ofinstitutions not listed inthestock exchange Investments andothercapital instruments inequity ofinstitutions Staff loansecured by residential Property BOOKVALUE 76,817,596,349 76,817,596,349 12,182,974,423 29,734,017,616 29,734,017,616 3,766,154,836 3,766,154,836 3,962,570,688 3,962,570,688 1,112,465,462 1,112,465,462 5,106,915,974 5,106,915,974 1,251,732,463 1,251,732,463 1,432,267,034 1,432,267,034 5,228,317,460 5,228,317,460 1,760,977,355 1,760,977,355 4,072,746,083 4,072,746,083 3,871,528,809 3,871,528,809 255,195,221 255,195,221 415,571,710 415,571,710 478,324,810 478,324,810 193,946,997 193,946,997 111,529,676 111,529,676 926,899,988 926,899,988 762,536,635 762,536,635 35,906,711 35,906,711 62,719,570 62,719,570 83,663,900 83,663,900 A 2,287,981 2,287,981 6,338,159 6,338,159 6,788 6,788 ------

2,755,180,963 2,755,180,963 PROVISION PROVISION 2,080,374,063 2,080,374,063 SPECIFIC SPECIFIC 630,125,337 630,125,337 18,949,333 18,949,333 19,207,545 19,207,545 4,160,000 4,160,000 1,214,859 1,214,859 B 894,779 894,779 255,047 255,047

------506,602,460 506,602,460 ELIGIBLE ELIGIBLE 149,589,306 149,589,306 151,016,073 151,016,073 122,209,062 122,209,062 83,788,019 83,788,019 CRM C Current YearCurrent

------73,555,812,926 73,555,812,926 NETVALUE 12,182,974,423 12,182,974,423 29,607,648,554 29,607,648,554 D=A-B-C D=A-B-C 3,766,154,836 3,766,154,836 1,882,196,625 1,882,196,625 1,112,465,462 1,112,465,462 4,955,644,854 4,955,644,854 1,251,732,463 1,251,732,463 3,871,528,809 3,871,528,809 1,432,267,034 1,432,267,034 5,228,317,460 5,228,317,460 1,130,852,018 1,130,852,018 3,970,008,731 3,970,008,731 255,195,221 255,195,221 265,982,404 265,982,404 478,324,810 478,324,810 193,946,997 193,946,997 926,005,209 926,005,209 762,536,635 762,536,635 35,906,711 35,906,711 92,322,131 92,322,131 62,719,570 62,719,570 83,663,900 83,663,900 2,287,981 2,287,981 5,123,300 5,123,300 6,788 6,788

------WEIGHT RISK RISK E 150% 100% 100% 150% 100% 100% 150% 100% 100% 100% 150% 100% 100% 150% 100% 150% 100% 150% 100% 150% 50% 20% 50% 20% 50% 20% 75% 20% 60% 20% 50% 20% 60% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

RISK WEIGHTED RISKWEIGHTED EXPOSURES EXPOSURES 49,530,028,847 49,530,028,847 29,607,648,554 29,607,648,554 F=D*E F=D*E 1,882,196,625 1,882,196,625 3,716,733,641 3,716,733,641 2,322,917,285 2,322,917,285 1,045,663,492 1,045,663,492 1,696,278,027 1,696,278,027 5,955,013,097 5,955,013,097 398,973,606 398,973,606 250,346,493 250,346,493 478,324,810 478,324,810 290,920,496 290,920,496 286,453,407 286,453,407 926,005,209 926,005,209 457,521,981 457,521,981 92,322,131 92,322,131 31,359,785 31,359,785 83,663,900 83,663,900 7,684,950 7,684,950 1,358 1,358

------

61,258,396,997 61,258,396,997 SCHEDULE 30(B) NETVALUE 25,169,635,117 25,169,635,117 1,820,256,900 1,820,256,900 1,679,208,302 1,169,767,626 1,169,767,626 1,045,871,779 1,159,984,060 1,159,984,060 9,886,760,481 2,427,014,381 2,427,014,381 4,493,551,663 4,493,551,663 1,437,816,109 1,437,816,109 2,686,284,955 2,686,284,955 1,173,567,852 1,173,567,852 4,017,584,990 4,017,584,990 255,195,221- 255,195,221- 606,658,983 606,658,983 720,151,739 865,059,928 865,059,928 184,537,810 184,537,810 268,542,977 268,542,977 83,663,900 83,663,900 54,845,685 54,845,685 47,313,239 47,313,239 5,123,300 5,123,300 Previoius Year ------Amount inRs. 44,184,344,398 CONTINUE... WEIGHTED WEIGHTED EXPOSURE 25,169,635,117 1,820,256,900 3,370,163,747 1,611,770,973 1,169,767,626 1,739,976,090 6,026,377,485 276,806,715 287,563,222 606,658,983 402,814,466 335,841,660 586,783,926 209,174,356 432,011,043 RISK RISK 47,313,239 83,663,900 7,684,950 ------Committed to change ... for better 63 Himalayan Bank Ltd. | Annual Report 2013/14 ------1,437,000 7,322,024 44,291,281 17,479,498 16,842,748 41,671,869 714,769,175 122,385,981 377,327,179 590,041,265 137,856,118 826,858,019 1,132,497,904 1,311,198,490 EXPOSURE 5,341,978,550 49,526,322,948 49,526,322,948 RISK WEIGHTED CONTINUE... Amount in Rs. ------Previous Year Previous 1,437,000 84,213,739 14,644,047 44,291,281 244,771,962 655,599,245 275,712,236 208,359,347 377,327,179 174,794,978 3,573,845,874 2,950,206,324 2,352,049,320 1,653,716,038 1,132,497,904 NET VALUE SCHEDULE 30 (B) SCHEDULE 75,001,863,471 75,001,863,471 13,743,466,474

------

4,471,557 99,253,322 56,690,052 60,781,964 14,540,805 77,864,237 839,221,240 368,664,844 434,066,789 663,834,590 F=D*E 1,087,084,454 1,043,767,670 1,049,322,752 EXPOSURES 5,799,564,276 55,329,593,123 55,329,593,123 RISK WEIGHTED

0% 0% 20% 20% 50% 50% 50% 20% 50% 20% 50% 10% 20% 20% 50% 50% E 100% 100% 100% 150% 100% 100% 200% 100% 150% 100% 100% 100% 100% 150% RISK WEIGHT ------

8,943,113 56,690,052 72,704,023 737,329,688 434,066,789 331,917,295 198,506,644 607,819,643 389,321,184 5,435,422,272 D=A-B-C 4,196,106,199 1,043,767,670 3,021,093,483 2,098,645,503 NET VALUE NET VALUE 92,188,146,484 92,188,146,484 18,632,333,558

------439,286 280,131 C 1,415,194 Current Year Current 13,422,535 479,689,656 210,081,481 195,146,627 900,474,910 1,407,077,370 1,407,077,370 ELIGIBLE CRM ------

B 319,772,750 319,772,750 SPECIFIC PROVISION 3,074,953,713 3,074,953,713

------

8,943,113 A 56,690,052 73,143,309 947,411,169 447,489,324 653,105,239 198,506,644 607,819,643 389,601,315 5,915,111,928 4,196,106,199 1,043,767,670 3,021,093,483 2,293,792,130 BOOK VALUE BOOK VALUE 96,670,177,567 96,670,177,567 19,852,581,218 PARTICULARS Irrevocable Credit commitments (long term) commitments Credit Irrevocable Adjustment under Pillar II under Pillar Adjustment of Single of the loan and facilities in excess Add:10% Obligor Limits of the contract(sale) in caseAdd:1% of the sale value with recourse of credit Risk (A)+(B)+(C) credit RWE for Total Unpaid portion of Partly paid shares and SecuritiesUnpaid portion paid shares of Partly Irrevocable Credit commitments (short commitments term) Credit Irrevocable foreign counterparty (ECA Rating 0-1) foreign counterparty (ECA Rating 2) foreign counterparty (ECA Rating 3-6) foreign Total RWE for credit Risk (A) +(B) Risk (A) credit RWE for Total foreign counterparty (ECA Rating 3-6) foreign counterparty (ECA Rating 7) foreign LC Commitments With Original Maturity Over 6 months domestic counterparty Financial Guarantee Financial and Endorsements Acceptances TOTAL foreign counterparty (ECA Rating 2) foreign foreign counterparty (ECA Rating 0-1) foreign foreign counterparty (ECA Rating 3-6) foreign Underwriting commitments of Securities as collateral of Bank's Securities or Posting Lending Assets sale with recourse Agreements, Repurchase Guarantee Payment Advance foreign counterparty (ECA Rating 7) foreign Unpaid guarantee claims Unpaid guarantee LC LC Commitments With Original Maturity Upto 6 months domestic counterparty foreign counterparty (ECA Rating 2) foreign Other Contingent Liabilities Other Contingent Forward Exchange Contract Liabilities Contract Exchange Forward foreign counterparty (ECA Rating 0-1) foreign Claims on foreign bank incorporated in SAARC region operating operating in SAARC region bank incorporated on foreign Claims regulatorycapital respective their with a buffer of 1% above requirement Bills Under Collection foreign counterparty (ECA Rating 7) foreign domestic guarantee BondBid and Counter Performance Bond, counterparty B. Off Sheet Exposures Balance B. Commitments Revocable AS AT ASHAD 32, 2071 (JULY 16, 2014) 2071 (JULY ASHAD 32, AS AT RISK WEIGHTED WEIGHTED RISK EXPOSURE RISK FOR CREDIT Himalayan Bank Ltd. | Annual Report 2013/14 64 Committed to change ... for better

ELIGIBLE CREDIT RISK MITIGANTS AS AT ASHAD 32, 2071 ( JULY 16, 2014) SCHEDULE 30 (C) Amount in Rs. SEC/G’TEE SEC/G’TEE DEPOSITS DEPOSITS GOVT. & G’TEE OF G’TEE OF G’TEE OF GOLD OF OF WITH WITH OTHER NRB GOVT. OF DOMESTIC MDBS CREDIT EXPOSURES OTHER FOREIGN TOTAL BANK BANKS/FI SECURITIES NEPAL BANKS (C) SOVEREIGNS BANKS (A) (B) (D) (E) (G) (H) (F) (I) A. BALANCE SHEET EXOSURES Cash Balance ------Balance With Nepal Rastra Bank ------Gold ------Investment in Nepalese Government Securities ------All Claims on Government of Nepal ------Investment in Nepal Rastra Bank securities ------All claims on Nepal Rastra Bank ------Claims on Foreign Government and Central Bank (ECA 0-1) ------Claims on Foreign Government and Central Bank (ECA -2) ------Claims on Foreign Government and Central Bank (ECA -3) ------Claims on Foreign Government and Central Bank (ECA-4-6) ------Claims on Foreign Government and Central Bank (ECA -7) ------Claims On BIS, IMF, ECB, EC and on Multilateral Development Banks (MDB's) recognized by the framework ------Claims on Other Multilateral Development Banks ------Claims on Public Sector Entity (ECA 0-1) 149,589,306 ------149,589,306 Claims on Public Sector Entity (ECA 2) ------Claims on Public Sector Entity (ECA 3-6) ------Claims on Public Sector Entity (ECA 7) ------Claims on domestic banks that meet capital adequacy requirements ------Claims on domestic banks that do not meet capital adequacy requirements ------Claims on foreign bank (ECA Rating 0-1) ------Claims on foreign bank (ECA Rating 2) ------Claims on foreign bank (ECA Rating 3-6) ------Claims on foreign bank (ECA Rating 7) ------Claims on foreign bank incorporated in SAARC region operating with a buffer of 1% above their respective ------regulatory capital requirement Claims on Domestic Corporates 86,955,792 ------35,253,271 122,209,063 Claims on Foreign Corporates (ECA 0-1) ------Claims on Foreign Corporates (ECA 2) ------Claims on Foreign Corporates (ECA 3-6) ------Claims on Foreign Corporates (ECA 7) ------Regulatory Retail Portfolio (Not Overdue) 151,016,073 ------151,016,073 Claims fulfilling all criterion of regulatory retail except granularity ------Claims secured by residential properties ------Claims not fully secured by residential properties ------Claims secured by residential properties (Overdue) ------Claims secured by Commercial real estate ------Past due claims (except for claim secured by residential properties) ------High Risk claims 83,788,018 ------83,788,018 Investments in equity and other capital instruments of institutions listed in the stock exchange ------Other Assets ------Total 471,349,189 ------35,253,271 506,602,460

CONTINUED...

Committed to change ... for better 65 Himalayan Bank Ltd. | Annual Report 2013/14

Total (a+b) Total 1,407,077,370

Total Total 900,474,910 900,474,910 719,417 ------899,755,493 899,755,493

Other Contingent Liabilities Liabilities Contingent Other ------

Unpaid Claims on Guarantees Guarantees on Claims Unpaid 1,415,194 1,415,194 ------1,415,194

Irrevocable Credit commitments commitments Credit Irrevocable ------

a buffer of 1% above their respective regulatory capital requirement capital regulatory respective their above 1% of buffer a

280,131 280,131 280,131 ------

Claims on foreign bank incorporated in SAARC region operating with with operating region SAARC in incorporated bank foreign on Claims

Unpaid portion of Partly paid shares and Securities Securities and shares paid Partly of portion Unpaid ------

Acceptances and Endorsements Endorsements and Acceptances ------

Financial Guarantee Guarantee Financial ------

Advance Payment Guarantee Guarantee Payment Advance 13,422,535 13,422,535 ------13,422,535

Repurchase Agreements, Assets sale with recourse recourse with sale Assets Agreements, Repurchase ------

Lending of Bank's Securities or Posting of Securities as collateral collateral as Securities of Posting or Securities Bank's of Lending ------

Underwriting commitments commitments Underwriting ------

foreign counterparty (ECA Rating 7) 7) Rating (ECA counterparty foreign ------

foreign counterparty (ECA Rating 3-6) 3-6) Rating (ECA counterparty foreign ------

foreign counterparty (ECA Rating 2) 2) Rating (ECA counterparty foreign ------

foreign counterparty (ECA Rating 0-1) 0-1) Rating (ECA counterparty foreign 439,286 439,286 439,286 ------

domestic counterparty counterparty domestic

195,146,627 195,146,627 ------195,146,627

Bid Bond, Performance Bond and Counter guarantee guarantee Counter and Bond Performance Bond, Bid

foreign counterparty (ECA Rating 7) 7) Rating (ECA counterparty foreign ------

foreign counterparty (ECA Rating 3-6) 3-6) Rating (ECA counterparty foreign ------

foreign counterparty (ECA Rating 2) 2) Rating (ECA counterparty foreign ------

foreign counterparty (ECA Rating 0-1) 0-1) Rating (ECA counterparty foreign ------

counterparty counterparty

210,081,481 210,081,481 210,081,481 210,081,481 ------

LC Commitments With Original Maturity Over 6 months domestic domestic months 6 Over Maturity Original With Commitments LC

foreign counterparty (ECA Rating 7) 7) Rating (ECA counterparty foreign ------

foreign counterparty (ECA Rating 3-6) 3-6) Rating (ECA counterparty foreign ------

foreign counterparty (ECA Rating 2) 2) Rating (ECA counterparty foreign ------

foreign counterparty (ECA Rating 0-1) 0-1) Rating (ECA counterparty foreign ------

counterparty counterparty

479,689,656 479,689,656 479,689,656 479,689,656 ------

LC Commitments With Original Maturity Upto 6 months domestic domestic months 6 Upto Maturity Original With Commitments LC

Forward Exchange Contract Liabilities Liabilities Contract Exchange Forward ------

B. Off Balance Sheet Exposures Exposures Sheet Balance Off B.

(I) (I) (F) (B) (A)

(H) (H) (G) (E) (D) (C)

BANKS SOVEREIGNS

BANKS NEPAL SECURITIES

CREDIT EXPOSURES EXPOSURES CREDIT TOTAL TOTAL FOREIGN OTHER BANKS/FI BANK

MDBS DOMESTIC OF GOVT. NRB

OF OF OTHER WITH WITH WITH

OF G’TEE OF G’TEE OF G’TEE GOVT.& GOLD

SEC/G’TEE SEC/G’TEE SEC/G’TEE DEPOSITS DEPOSITS DEPOSITS

Amount in Rs. in Amount

AS AT ASHAD 32, 2071 ( JULY 16, 2014) 16, JULY ( 2071 32, ASHAD AT AS SCHEDULE 30 (C) 30 SCHEDULE

ELIGIBLE CREDIT RISK MITIGANTS RISK CREDIT ELIGIBLE CONTINUED... Himalayan Bank Ltd. | Annual Report 2013/14 66 Committed to change ... for better RISK RISK WEIGHTED EXPOSUREFORMARKET RISK WEIGHTED EXPOSUREFOROPERATIONAL RISK Equivalent Risk Weight Exposure [f=(d*e)] Risk Weight (reciprocal ofcapitalrequirement of10% times)(e) Capital Requirement for (d) (average operationalrisk ofc) Fixed percentage ofGross Income [c=(a*b)] Alfa (b) Gross Income (a) theperiod inInterest Suspenseduring Additional/Deduction Exchange Fluctutation Income OperatingIncome Other Commission andDiscountIncome Net Interest Income Particulars Equivalent Risk Weight Exposure [e=(c×d)] Risk Weight (reciprocal ofcapitalrequirement of10%)times(d) Capital Charge for [c=(a×b)] Market Risk Fixed Percentage (b) Total Position Open (a) S.No. 18 17 16 15 14 13 12 11 10 19 9 8 7 6 5 4 3 2 1 Currency AUD NOK CAD MYR HKD QAR USD SGD CNY AED CHF DKK GBP THB EUR SAR SEK INR JPY Open Position (FCY) Position Open (FCY) (44,908,996) (2,639,848) 2,722,800 (156,029) (56,980) (56,025) (76,700) (26,995) (16,503) (49,184) (75,218) (15,600) (67,346) (31,634) (11,353) (74,497) (66,435) (8,470) (2,650) 2,693,310,211 1,911,333,345 403,996,532 16 July2011 106,566,235 195,528,538 129,516,981 350,365,112 Mid Rate Mid 1.60075 164.66 130.18 106.75 77.24 13.84 24.45 25.44 16.67 29.31 12.36 17.54 15.31 88.96 89.67 25.09 96.10 0.94 2.85 0.15 Open PositionOpen 2,838,768,110 1,908,445,919 425,815,217 15 July2012 (71,888,075) 261,661,108 (72,444,685) 309,897,962 182,028,635 510,840,279 (2,493,468) (4,327,119) (3,814,129) (1,951,248) (8,098,675) (9,791,507) (1,030,731) (3,376,747) (1,009,977) (6,679,814) (1,666,522) (117,182) (791,088) (203,976) (273,546) (162,393) (44,176) (NPR) 0.15 Relevant Open 189,690,740 4,586,360,657 3,640,642,993 2,508,273,070 379,381,480 546,096,449 15 July2013 18,969,074 261,661,108 458,636,066 116,680,051 300,469,098 165,071,706 550,149,068 71,888,075 2,493,468 4,327,119 3,814,129 1,951,248 8,098,675 9,791,507 1,030,731 3,376,747 1,009,977 6,679,814 1,666,522 Position 117,182 791,088 203,976 273,546 162,393 44,176 0.15 SCHEDULE 30(D) 5% 10 SCHEDULE 30(E) 10 3,906,766,930 Relevant Open Previous Year Previous Year 442,298,029 884,596,059 390,676,693 44,229,803 299,522,501 548,997,534 Amount inRs. Amount inRs. 16,169,689 1,485,944 1,877,406 1,872,791 1,154,591 3,318,975 2,149,015 4,478,512 1,088,708 1,143,250 Position 200,292 194,398 152,926 260,988 480,170 41,883 6,486 10 5% 10 Committed to change ... for better 67 Himalayan Bank Ltd. | Annual Report 2013/14 FY 941 835 2.12 1.30 8.72 1.96 4.25 9.03 6.05 3.48 5.67 2.20 27.12 71.82 18.51 33.10 28.43 10.21 42.49 26.25 21.05 11.23 209.92 Amount in Rs. 28,980,000 2013/2014 2070/2071 SCHEDULE 31 SCHEDULE FY 700 830 6.08 2.89 4.25 8.96 1.54 2.38 3.99 5.00 2.60 34.19 20.47 27.83 77.36 11.27 44.49 16.78 25.19 15.00 10.00 11.55 192.02 27,600,000 2012/2013 2069/2070 FY 653 793 8.72 2.09 4.25 9.60 1.76 2.74 5.90 5.00 1.43 39.94 16.35 24.00 75.36 13.14 47.03 17.97 24.65 28.42 13.42 11.02 193.00 24,000,000 2011/2012 2068/2069 FY 575 647 5.75 4.22 3.96 8.88 1.91 2.83 5.90 3.66 1.80 44.66 12.88 22.88 80.57 13.12 47.06 19.30 25.46 36.84 16.84 10.68 199.77 20,000,000 2010/2011 2067/2068 FY 816 577 6.76 3.52 4.21 8.68 2.04 1.19 1.82 4.13 4.80 31.80 25.66 25.60 77.43 10.81 46.83 15.41 22.13 36.84 11.84 10.72 226.79 16,000,000 2009/2010 2066/2067

Rs. Rs. Rs. Unit Ratio Ratio Percent Percent Percent Percent Percent Percent Percent Percent Percent Percent Percent Percent Percent Percent Percent Percent Percent Number Number Capital AdequacyCapital Ratio: Capital A. Core SupplementaryB. Capital Total Operating Expenses/Total Income Operating Expenses/Total Total Net Profit/Total Assets Net Profit/Total Loan/Deposits Total Net Profit/Loan and Advances and Net Profit/Loan Interest Income/Loan and Advances Income/Loan Interest Operating Expenses Staff Expenses/Total Deposit Total Expenses on Interest Income Gain/Total FX Fluctuation Staff Expenses Staff Bonus/Total Particulars Net Profit/Total Income Net Profit/Total Income Share Per Value Market Share Per Earning RatioPrice (Including Capital Bonus)Dividend on Share Capital Share Dividend on Cash C. Total Capital Fund Capital Total C. Liquidity ) ( CRR Loan Non-performing Loan/Total Rate Interest Spread Average Weighted Book Networth per share Share Total Staff Total PRINCIPAL INDICATORS FOR LAST FIVE YEARS LAST FOR FIVE INDICATORS PRINCIPAL Himalayan Bank Ltd. | Annual Report 2013/14 68 Committed to change ... for better SIGNIFICANT ACCOUNTINGSIGNIFICANT POLICIES when right to receivewhen right isestablished. Dividend income(netofwithholding tax)isaccounted for asand Income2.5. Dividend transaction. credit areatthetimeof booked guarantees anddocumentary Commission andfee incomeon bills purchased anddiscounted, 2.4. Fees andCommission Income basis. Interest incomeonInvestments, however, isrecognized onaccrual Bank. (1) ofDirective #4issuedby NepalRastra be recognised as income of the financial year in line with clause (5) within the first fifteen days of the following month (Shrawan) can and advancesasattheendoffinancial year and recovered income recognition onaccrualbasis. Interest accruedonloans withNepalAccountingnot inconformity Standards thatrequires whichhowever is Bank, as perthedirectives issuedby NepalRastra Interest incomeonloansandadvancesisrecognised oncashbasis 2.3. Interest Income the Bank’s accountingpolicies. management’s judgement & discretion in the process of applying accountingestimates as well critical requires as theuseofcertain withNASandgenerallyacceptedconformity accountingprinciples cost convention. The preparation ofthefinancialstatements in The financialstatements have beenprepared underthehistorical ofpreparation2.2. Basis the Company 2063. Act, Bankand 2063,directives Act, issuedby NepalRastra Institutions generally accepted accountingprinciples, BanksandFinancial Nepal Accounting stated, Standards (NAS)except asotherwise The financial statements have beenprepared inaccordance with 2.1. Statement ofCompliance all theyears presented, unlessstated otherwise. herein below. The saidpolicieshave beenconsistently appliedto presentation ofthefinancialstatements oftheBankare stated The significant accounting policies applied in the preparation & ofSignificant 2. Summary Accounting Policies Stock Exchange Limited. Bank andFinancial 2063. Act, Institution The Bankislisted inNepal inNepalasclass activities banking ‘A’ financialinstitutionunderthe outcommercial thecentralbankofNepal, to carry Bank, Rastra venture ofHabibBankLimited, Pakistan &islicensedby Nepal Nepal. Box Kathmandu, No. 20590, Kamaladi, The Bank is a Joint- company domiciledinNepal, withitsregistered officeasG.P.O. is a public limited liability Bank LimitedBank”) Himalayan (“the 1. General Information 2.8. Interest Expenses (Legal Expenses)ofthefinancialstatements. loansareSchedule 24 includedin for ofwritten-off therecovery costsviz.,legalcosts,All transaction commissionfee etc. incurred receivedwhen theamountisactually from borrowers. loansis fromrecognised asincome written-off Recovery 2.7. Recovery from written-off Loans are accounted for astradinggain/(loss). differences buyingand selling rates between of foreign currencies duetoAppropriation the arising Account. Income/(expenses) byto charging Exchange Fluctuation to Reserve Profit and Loss of suchrevaluationtheaccountingyear gainduring istransferred for as gain/(Loss)”.“Revaluation As required by NRBDirectives, 25% date. Netdifferences from arising suchconversion isaccounted at mid exchangecurrency rate prevailing on the Balance Sheet Foreign assetsandliabilitiesare translated currency into local of recovery. recognized as incomein the profit and lossaccountin the year Amounts recovered years are offinearlier against loanswritten laws oftheBankdulyapproved Bank. by NepalRastra deemed irrecoverable are offinaccordance written with the by- Loans and advances classified as loss loan for at least a year and 2.12. Loans &Advances Write off management onprudentbasis. the prescribed requirement isprovided atthediscretion ofthe in accordance with NRB Directives. Additional provision over is provided at0.25%to 100%onthebasisofassetsclassification Provision for possible losses on loans and advances & bills purchased 2.11. Loan Loss Provision approved ofthebank. policy & staffs ofthebankare provided withcredit cardunder facility Assets.policies areadditionto this, shown In underOther directors Loans and advances provided to staff in accordance with the Bank’s 2.10. Staff Loans provision. and advancesincludingbillspurchased are shown netofloanloss Loans Rastra Bank. classified asperthedirectives issued by Nepal deprived sector. Suchloansareto regular subject review andare loans, consumerloans, credit card facilities&loansgiven to the financing provided term to thecustomers &includealllong/short Loans andadvances, overdrafts andbillspurchased represent direct 2.9. Loans andAdvances, Overdraft andBillsPurchased banks are accounted for onaccrualbasis. Interest expenses on deposit liabilities&borrowings from other 2.6. Foreign Exchange Transactions SCHEDULE 32 Committed to change ... for better 69 Himalayan Bank Ltd. | Annual Report 2013/14 loss account in the same year as per NRB directives. Provision for for Provision as per NRB directives. loss account in the same year possible losses on non banking assets is made as per the directives of Nepal Rastra Bank. Corporate Income Tax liability has been calculated as per the liability as per the has been calculated Tax IncomeCorporate Act, 2058. of Income-Tax provisions Tax: Deferred b. arising on temporary between tax is provided differences Deferred carryingand their liabilities and of assets base the tax amounts in is determined using tax income Deferred financial statements. the and date sheet balance the enactedbeen by have that rates tax income tax asset deferred apply when the related expected to are income tax liability is settled. or the deferred is realized the carrying where amount recognized tax liabilities are Deferred its tax base so that taxable economic benefits of the assets exceeds as allowed be will that the amount exceed will arising in future tax purposes. deduction for tax reserveearmarked is Deferred the extent outstanding to of as per NRB guidelines. Assets Tax balance of Deferred Banking2.21. Non- Assets Non-Banking the assets obtained as security loans are for Assets in the course of the Bank by & advances subsequently taken over valued at fair market assets are Such value (Panchakrit loan recovery. is whichever the borrower, amount due from Mulya) or total and profit to is charged and the balance loan remaining lower All leases entered into by the Bank are operating leases. Total Total leases. operating are Bank the by into entered leases All and profit to charged are under operating leases made payments on monthly basis. ‘Other Expenses’ Operating as loss account Benefits 2.17. Retirement retirement as Fund Gratuity Provident of and provision has Bank The Expenses on account of Gratuity and to the employees. benefits contributionswith basis accrual on recognised are Fund Provident Staff Service of the Bank’s with the provisions made in accordance Approved the to transferred are contributions Such By-Laws. entity(an regular on Bank) the of independent Fund Retirement Fund. of the said Retirement regulations basis as per the rules and Provision Encashment Leave 2.18. Staff for on accrual basis. liability is accounted staff leave Accumulated as sick as well leave of annual of 120 days excess balance in Leave as on mid April as per the Staff Service is encashed each year leave By-Laws. Scheme Housing 2.19. Employees’ Bank its employees, In of housing loan facilities to view of provision as required Housing Fund Employees’ for does not make provision under the Labour Act, 2048. Taxes and Deferred 2.20. Income Tax: a. Corporate 2.16. Lease Rental 2.16. Lease 5% 15% 15% 10% 15% 20% 15%

H positive intent and ability to hold till maturity and are recorded and ability hold till maturity intent to recorded positive and are amortisation for or at cost or at cost adjusted of premiums paid on acquiring these investments Premiums discounts. on income amortizedinterest of subsequently are reversal as proportionate impairment losses basis till the maturity Any date. the in charged and provisioned are arisinginvestments such in Account. Loss or Profit Building C G F F O V Held F a short over gain or loss Any of resale periodintention of time. and in Profit recognised are trading / revaluation arising from Account. Loss Retained Earnings in line with NRB Directives. A marked and are market to on Maturity” Till “Held or Trading” for classified under this category investments The basis. regular carried are at cost at the exchange, in the stock but not listed portfolio this of 2% least at to equivalent Amount Sheet. Balance is earmarked Reserve Adjustment as Investment the from Non- one year and / or costing less than Rs.5,000 are expensed off in are less than Rs.5,000 and / or costing one year of purchase. the year F Historical that is directly attributable cost includes expenditure acquisition of the assets. the to diminishing balance method at the following rates: diminishing balance method at the following F 

2.15. Amortization amortized a the Bank are Software by over applications purchased by paid fees Licence purchase. of month the from periodyears 5 of amortized Leasehold the periodthe Bank are the licence. of over amortized the are in equal annual instalments over improvements period of lease. charged up to the month prior disposal. up to to charged and purpose rates at the is calculated Tax Income for Depreciation Act, 2058. Tax the Income by manners prescribed Depreciation on assets acquired during the accounting year is during is the accounting year acquired on assets Depreciation of acquisition, the date the month subsequent to from charged year is on assets disposed off during the depreciation whereas 5. 6. ffice Equipment 7. omputers enerators 2. 3. ehicles 4. urniture-Wood urniture-Steel S.N. Nature of Assets Rates S.N. Nature 1. c.  on depreciated are land freehold than other assets ixed b. oflessthan normally usefullife items having consumable a.  athistorical costlessdepreciation. stated assetsare ixed 2.14. Fixed Assets and Depreciation Assets and 2.14. Fixed c) “Held under falling not investments are These Sale: for vailable b) with purchased are Maturity: investments Till These eld a) primarily held are withan investments These Trading: or 2.13. Investments three the Bank compriseby held of the following investments The categories as per NRB Directives: Himalayan Bank Ltd. | Annual Report 2013/14 70 Committed to change ... for better 2014 (Shrawan 01,2070to Ashad 32,2071) For theFinancial Year July16,2013to July16, NOTESACCOUNTS TO purchase includingany subsequentpurchase. Accordingly, asum the date ofcommencementoperation andfrom thedate of Expenditure within five foryears effective amortization from The hasbeencapitalized computer as Deferred software Revenue Rs.year 20,663,042and balanceRs. amortized 77,730,770). leaving abalanceofRs. 62,768,762for(Previous future amortization Accordingly, Rs.20,448,228 the year, during has been amortized basisinequalinstalmentsoversame onayearly theleaseperiod. Improvements”. the ofamortizing The Bank hasadopted thepolicy premises areon theleasedbanking capitalized as “Leasehold Expenses incurred byandotherimprovements way ofconstruction ofexpenses2. Amortization notwritten off transfers etc. payments madeby branchesthrough inter-branch HeadOffice, to pertain ofthesependingentries Branch Account. part Major A sum of With Foreign Banks With Authorized Other Financial Local Institutions With Nepal Rastra Bank 1. Status Reconciliation ofBank Period Up to 1months 1 to 3months Total above 2years 1 to 2years 6 to 12months 3 to 6months Total above 2years 1 to 2years 6 to 12months 3 to 6months 1 to 3months Up to 1months Period Total above 2years 1 to 2years 6 to 12months 3 to 6months 1 to 3months Up to 1months Period

Rs.960,318 (DebitBalance) 2,511,424 2,511,424 141,714,354 141,714,354 LEDGER LEDGER 2,511,424 19,585 88,731,213 47,001,000 12,740 DEBIT 4,119,785 1,735,974 DEBIT 6,845 LEDGER LEDGER 126,382 DEBIT DEBIT ------51,827,203 51,827,203 - 41,062,149 181,212,201 181,212,201 145,307,715 LEDGER 1,525,000 2,345,175 6,894,879 20,200,416 LEDGER CREDIT CREDIT 5,692,897 8,026,455 1,984,718 LEDGER LEDGER 8,207 CREDIT CREDIT 8,207 ------STATEMENT 5,088,085 STATEMENT 92,005,102 STATEMENT 91,808,981 is outstanding in Inter is outstandinginInter 5,088,085 154,472 DEBIT DEBIT 41,596 DEBIT DEBIT 53 ------370,584,720 STATEMENT STATEMENT 44,342,132 STATEMENT 13,957,436 334,939,989 11,640,108 10,155,844 30,635,292 22,406,438 2,202,208 2,470,354 1,080,642 6,170,813 1,814,003 4,505,624 CREDIT CREDIT 747,853 CREDIT CREDIT ( In Rs.) ( In Rs.) ( In Rs.) ( In 49,800 65,320 - - - - 3. Summary ofLoans andAdvances3. Summary 500,856) Rs. 283,657(Previous Rs220,282 andbalanceRs year amortized the during yearamortized under review, leaving a balance of the date ofpurchase. Accordingly, asumofRs. 241,199hasbeen revenue expenditureinthree foryears effective amortization from Expenses incurred onofficefurnishing are capitalized asdeferred Rs. 62,460,164andbalanceRs.amortized 194,578,267). balance ofRs. 167,031,364for(Previous future amortization year theyear, during of Rs. 67,149,132hasbeenamortized leaving a 4.Summary ofChanges Liabilities inDeposit 4.Summary 5. Weighted Average Interest Rate Spread 7. Summary ofConcentration7. Summary ofExposure 6. Details ofDeferred Expenses is4.93%. at theyear-end Note: Average interest spread calculated asperNRBDirectives as Loan the during year Written-off as attheyear end Loan &Advances outstanding Particulars Total Deposits Interest Bearing Interest Free Deposits Particulars Highest %ofexposure toHighest singlegroup Exposure toHighest singlegroup Total Amountason16July2014 Particulars Net Spread Weighted Average onLoans Interest Rate andInvestments Particulars Weighted Average on Deposits, Interest and Borrowing Rate Bonds 3. Remaining ValueRemaining 3. 2. Amortization thisyear c) Deduction b) Addition thisyear a) Upto Last Year 1. At Cost Particulars 53,072,319 41,057,398 46,307,316 2012-13 2012-13 6,765,003 Loan andAdvances 16,640 2012-13 195,079 231,365 164,198 262,246 426,444 46,449,329 64,674,848 46,449,329 57,024,528 883,079 2013-14 2013-14 7,650,320 1.90% SCHEDULE 33 - Figures inRs. in ‘000 9,699 Contingent Amount inRs. 11,916,643 2013-14 Change % Change % 167,315 298,755 426,444 466,070 370,288 Rs. in ‘000 Rs. in ‘000 Rs. Rs. in ‘000 Rs. 39,626 Rate % Rate 3.12% 4.26 4.54 (41.71) 8.80 21.86 13.13 23.14 13.08 - Committed to change ... for better 71 Himalayan Bank Ltd. | Annual Report 2013/14 - - Total 95,187 196,100 Remarks 74,720,031 74,720,031 1,112,465 4,430,125 2,024,356 7,660,301 1,322,814 1,365,922 6,407,989 1,242,331 1,100,000 6,083,411 2,766,585 10,158,619 46,449,329 10,591,711 32,843,447 13,589,370 ------Figures in Rs. in ‘000 in in Rs. Figures 707,353 861,615 320,761 600,000 20,959,847 22,902,682 Issue of 5% bonus share (1,942,835) 2,655,073 1,294,528 1,322,814 2,690,907 6,083,411 1,712,397 Issue of 5% bonus share Issue of 15% bonus share Issue of 20% bonus share Issue of 25% bonus share Issue of 20% bonus share Issue of 25% bonus share Issue of 20% bonus share Issue of 20% bonus share Issue of 25% bonus share Issue of 10% bonus share Issue of 30% bonus share Issue of 25% bonus share Issue of 25% bonus share Issue of 60% bonus share 14,118,464 11,495,206 Issue of 100% bonus share Above Above 1 Yr. Issue of 31.56% bonus share ------3,310 37,388 396,944 701,036 528,836 500,000 4,260,058 14,446,472 2,595,854 1,603,805 8,210,862 4,128,495 (10,186,414) 1,942,835 271 to 365 Days 271 to ------3,310 799,501 40,425 794,349 615,967 6,306,686 5,507,185 1,162,646 3,693,299 1,603,805 1,642,172 2,257,898 2,898,000,000.00 2,760,000,000.00 2,400,000,000.00 2,000,000,000.00 1,600,000,000.00 1,216,215,000.00 60,000,000.00 240,000,000.00 192,000,000.00 120,000,000.00 12,129,249 1,013,512,500.00 810,810,000.00 772,200,000.00 643,500,000.00 536,250,000.00 429,000,000.00 390,000,000.00 300,000,000.00 181 to 270 Days 181 to ------53,335 279,793 6,356,554 7,321,665 Cumulative Paid up Capital Rs. up Capital Paid Cumulative 13,678,219 3,476,541 4,197,388 5,950,955 1,283,044 3,284,345 1,509,372 11,329,748 91 to 180 Days 91 to - - - - 95,187 196,100 476,903 373,159 767,775 4,008,083 29,515,221 25,507,138 1,112,465 1,775,052 5,490,785 1,596,574 8,210,862 3,002,698 1,242,331 20,090,757 10,591,711 4,008,083 Up to 90 Days Up to oan has been categorized in Gross amount & provision provided is included in other liabilities under above 1 year bucket. 1 year is included in other liabilities under above provided amount & provision in Gross oan has been categorized The Bank has no borrowings against the collateral of its own assets. of its own against the collateral Bank has no borrowings The A) L B)

Cumulative Net Financial Assets Financial Net Cumulative F.Y. 2012-13 (BS 2069-70) F.Y. F.Y. 2011-12 (BS 2068-69) F.Y. F.Y. 2010-11 (BS 2067-68) F.Y. F.Y. 2009-10 (BS 2066-67) F.Y. F.Y. 2008-09 (BS 2065-66) F.Y. F.Y. 2007-08 (BS 2064-65) F.Y. F.Y. 2006-07 (BS 2063-64) F.Y. F.Y. 2005-06 (BS 2062-63) F.Y. F.Y. 2004-05 (BS 2061-62) F.Y. F.Y. 2003-04 (BS 2060-61) F.Y. F.Y. 2002-03 (BS 2059-60) F.Y. F.Y. 2001-02 (BS 2058-59) F.Y. F.Y. 2000-01 (BS 2057-58) F.Y. F.Y. 1999-00 (BS 2056-57) F.Y. F.Y. 1998-99 (BS 2055-56) F.Y. F.Y. 1997-98 (BS 2054-55) F.Y. Initial capital (BS 2051-52) F.Y.1994-95 Financial Year Financial Assets Assets Balance Cash Balance with Banks Money at Call Particulars Treasury Bills Treasury Govt. Bonds Other Investments Loans & Advances /Bills purchase & Advances Loans Liabilities Borrowings Deposits Current Fixed Assets Fixed Other Assets Assets (A) Total DepositsCall Saving Deposits Saving Fixed Deposits Fixed Margin Deposits Margin Bills Payable Bonds Share Capital & Reserves Capital Share OtherLiabilities Liabilities (B) Total Net Financial Assets (A-B) Assets (A-B) Financial Net

NOTE: NOTE: Paid up share capital of the Bank has moved over the years as follows: the years over capital of the Bank has moved up share Paid 9. Paid up Share Capital up Share 9. Paid 8. Classification of Assets Liability of 8. Classification Maturity 16, 2014 at July as Himalayan Bank Ltd. | Annual Report 2013/14 72 Committed to change ... for better suspense for thesamehasnotbeenprovided. 40,199,973 hasbeenrecognised asincomeoftheyear andinterest realised within 15 days of Shrawan 2071 amounting to Rs. and Interest accruedonloansandadvancesasattheyea-end realised asatthe year-end. interest suspenserepresenting interest accruedonloansbutnot A sumofRs. 409,263,389 hasbeenprovided tilltheyear endas 18. Interest suspense currently holds5,860unitsofclassCcommonstock. members in recognition of their membership interest. The bank allocated itsfranchiseeclassCcommonstockcorporation to Visa onconversion Card International into stock a private 17. Investments in Visa Card International year from investment inshares madeby thebank. A total of Rs. 14,479,995hasbeenreceived the asdividendduring Income16. Dividend been charged to theprofit the andlossaccount during year. Provision for staffleave expensesamounting to Rs. 29,345,957has 15. Staff Leave Encashment Provision loss provision andbonus. provided for adjustments at10%ofnetprofit,for loan making after Provision for 2030and Act, bonushasbeenmadeaspertheBonus 14. Provision for Bonus transferred toRetirement HBLStaff Fund. Rs. 55,767,371) on account of gratuity which has been subsequently theDuring year, the Bank has provided Rs. 64,166,508 (Previous Year 13. Provision for Gratuity Appropriation A/C. Account &adjusted inDeferred Tax through Profit Reserve & Loss The movement theyear during ischarged to theProfit and Loss is asfollows: The movement indeferred theyear taxassets/(liabilities)during using aneffective taxrate of30%. Deferred income taxes differences are calculated on temporary Deferred Tax12. amounts to Rs.6,756,653. As onthebalancesheetdate, unpaiddividendover five years 11. UnpaidDividend & 15%stock dividendfor thefinancial year. The Board ofDirectors hasrecommended 6.0526%cashdividend andBonus 10. Dividend Closing Deferred Tax Assets /(Liabilities) the Movement During Year Opening Deferred Tax Assets /(Liabilities)

15 Jul2013 62,887,064 39,512,982 23,374,082 Balance 16 Jul2014 (15,401,440) 47,485,624 62,887,064 Balance 19. Contingent Liability filed appeal with the Revenuefiled appealwiththe against theassessment Tribunal been completed andtaxes fullysettled. However, thebankhas Assessments oftheyearsto thosementionedabove prior have are Department. pendingforRevenue assessmentwithInland 2010-11 (2067-68), 2011-12 (2068-69) and 2012-13 (2069-70) assessmentreturns filed Self by thebank for thefinancial years Bank. ofNepalRastra under instruction forcontingent reserve theclaiminaccountsofprevious year The bankof Rs. also has a reserve 212,516,333 appropriated to a account oftheclaimwhichisdisclosedseparately inschedule25. amount hasbeenprovided intheaccountsfor possible losses on asumofRs. 319,772,750equivalentto 50%oftheclaimBank, under thesaidcase, however, ofNepalRastra underinstruction of Patan Appellate Court. The bankhasnotaccepted theliability Banktilltheconclusionofcaseasperdecision Nepal Rastra inthebank’sin NPRhasbeenblocked accountmaintainedwith Nepal. Anequivalentamount Court, District well asinKathmandu People’s inZhengzhouIntermediate sub-judice Chinaas Court, which hasalsobeenshown ascontingentliability. The claimis China againstthecounter guarantee Bank, ofChinaConstruction guarantee issuedby thebankon behalf ofCRCC 15Bureau J/V, Water Supply Development Board bond against a performance bank hasreceived aclaimofUSD6,655,000madeby Melamchi which addition the tobank has not accepted this, as debt. In the ofbankguarantees haveBeneficiaries claimedRs. 13,559,739 Mr. Ashoke S. Rana S. Mr. Ashoke Mr. Torup Prasai Mr. Shiwakoti Himalaya Shrestha Ms. Menuka Mr. Surendra Silwal Shrestha Ranjana Mrs. Mr. Poudyal UpendraKeshari Mr. SushilBikram Thapa PoteMr. Krishna Radha Mr. Prachanda BahadurShrestha Mr. Khetan Prem Prakash Mr. SalimAmlani Mr. BahadurShrestha Manoj Board and andChiefExecutiveare as Officer follows: Personnel Management Key oftheBanksincludesDirectors ofthe Key Management Personnel dividend payable for F.Y. 2012-13(2069-70). (net of tax) has been repatriated to Habib Bank on account of 20% oftotal share capital.Rs. thereview period During 51,060,000 Habib Bank Ltd. is a joint venture with the bank holding partner 20. Related Disclosure Parties shown ascontingentliability. (2063-64), withrespectto whichasumofRs. 56,690,052hasbeen to FY2006-07 pertaining (2066-67) andwiththeSupreme Court to 2007-08(2064-65BS),2008-09(2065-66)&2009-10 pertaining done by Large Tax Revenue PayersDepartment Inland &the Office

Alt Alt Alt Alt Alt Dir Dir Dir Dir V Chair Chief S econd Vice Chairman ice Chairman ernate Directorernate Directorernate Directorernate Directorernate Directorernate ector ector ector ector man Executive Officer Committed to change ... for better 73 Himalayan Bank Ltd. | Annual Report 2013/14 - 8% 9.03 11.23 7 Years July 2020 189,690,740 398,973,606 926,005,209 AMT IN RS. AMT IN RS. AMT IN RS. AMT 5,754,474,636 1,401,104,840 4,586,360,657 1,820,321,497 1,803,169,336 2,092,147,987 3,716,733,641 3,071,359,762 1,788,600,158 5,955,013,097 1,973,546,833 5,799,564,276 29,607,648,554 63,729,135,353 HBL Bond 2077 55,329,593,123 55,329,593,123 Half Yearly Half Yearly Basis 7,155,579,476 NPR 600,000,000 NPR 600,000,000 8% 7 Years July 2015 HBL Bond 2072 Half Yearly Half Yearly Basis NPR 100,000,000 NPR 500,000,000 PARTICULARS Supplementary (Tier Capital II) Core Capital (Tier Capital Core I) PARTICULARS Total Adjustment under Pillar II under Pillar Adjustment RWE risk 3% of total overalll Add: for (a+b+c) Exposures Weighted Risk Total Total PARTICULARS Risk Weighted Exposure for Credit Risk Credit for Exposure Weighted Risk Risk Weighted Exposure for Operational for Exposure Weighted Risk Risk Market for Exposure Risk Weighted Risk Add 5% of gross income for operational risk income for 5% of gross Add Claims on government & central bank Claims on government Claims on other official entities Claims on banks Claims on domestic corporates & securities firms Claims on regulatory portfolio retail Claims secured by residential properties residential by Claims secured estate real commercial by Claims secured Past due claims Past High risk claims Other assets Off balance sheet items D Debts with information on the outstanding amount, amount, on the outstanding information with Debts and the year during raised and amount maturity, as capital funds be reckoned to eligible amount R of Credit Risk of Credit R and Operational Risk and Operational

Amount recognised as capital Amount recognised Tenor Interest Payment Interest Maturity Date 2 Exposure Weighted Risk Total to Capital Total SN SN Bond Issued RateInterest SN 1 Exposure Risk weighted Total to Capital Core a 1 Outstanding Amount b c 2 3 4 5 6 7 8 9 10 11 II. Risk exposures a. Risk Risk, Market Credit for exposures isk weighted b. undereachof11categories Exposures Weighted isk c. c. Term about theSubordinated information etailed qualifying capital: Total d. adequacy Capital ratio: e. - . 12,939 Rs 4,000,000 1,152,500 5,551,288 . 1,267,358 . 9,483,500 47,485,624 18,357,988 671,428,570 434,700,000 AMT IN RS. AMT (83,209,684) Rs Rs . 713,829,706 2,898,000,000 1,763,712,138 Current Year Current Rs 5,754,474,636

AMT IN RS. AMT 1,401,104,840 700,000,000 455,378,144 31,537,085 1,673,278 212,516,333

PARTICULARS PARTICULARS Subordinated Term Debt Term Subordinated General loan loss provision Reserve Equalization Exchange Reserve Adjustment Investment Other Reserves Core Capital (Tier Capital I) Core Supplementary (Tier Capital II) Miscellaneous not w/off Expenditure Debenture RedemptionDebenture Reserve Special Reserve Reserve Tax Deferred Proposed Bonus Equity Shares Proposed Reserve Adjustment Capital Paid up Equity Share Capital up Equity Share Paid Statutory General Reserves Retained Earnings U M T V B

9 6 7 8 4 5 SN 1 2 3 1 2 3 4 5 SN Nature Nature of Transaction Meeting Fees Paid Paid Meeting Fees & expenses and other fees Allowance

b. Tier 2 capital and a breakdown of its components: 2 capital and a breakdown Tier b. a. Tier 1 capital and a breakdown of its components: 1 capital and a breakdown Tier a. I. Capital structure and capitalI. Capital adequacy 22. Disclosure under New Capital Adequacy Framework Adequacy Capital under New 22. Disclosure The future minimum lease payment under non-cancellable payment minimum lease future The operating leases with the bank as lessee is NIL. 21. Operating Lease Commitment Commitment Lease 21. Operating Management Personnel of the Bank during the year. of the Bank during the year. Management Personnel Transaction with Key Management Personnel of the Bank Personnel Management with Key Transaction Key and Bank the transactions between provides following The i) Act, localstaffasper Bonus onus to ii) ehicle Facility Total Staff Expenses of this FY Staff Expenses Total as benefits following Officer the provided Executive also is Chief per the terms of the contract: b) d) tilities Payment Insuranceedical andAccidental Premium a) otal SalaryAllowances & Compensation to Key Management Personnel of the Bank Personnel Management Key to Compensation serviceThe the terms of the contract by is governed of the CEO paid compensation Total betweenhim and the bank. into entered Officer follows: Chief Executive year is as duringto the Himalayan Bank Ltd. | Annual Report 2013/14 74 Committed to change ... for better Movement • vements inLoan Loss Provisions andInterest h. g. Write offof Loans andInterest Suspense f. Movement ofNon Performing Assets e. NPA ratios d. Amount ofNPAs c. Total Risk Weight Exposures calculation table • 2 1 SN 4 3

4 3 2 1 SN 9,699,493 PRINCIPAL SN Net NPA to NetAdvances Gross NPA to Gross Advances PARTICULARS 3 2 1 SN Interest Suspense PARTICULARS 5 4 3 2 1 Movement

Suspense Suspense Mo Loss Loan Doubtful LoanDoubtful Substandard Loan Restrucutred Loan Pass Loan PROVISION LOAN LOSS Loss Loan LoanDoubtful Substandard Loan Restrucutred Loan Substandard Loan Restrucutred Loan CLASSIFICATION LOAN Loss Loan LoanDoubtful Total Total Capital to Total RWE Total Core Capital to Total RWE Total Total CLASSIFICATION LOAN Total I&II) Capital Fund (Tier Total Core I) Capital Fund (Tier Total Risk Weighted Exposure PARTICULARS

in

in

Interest

Loan 409,263,389 CURRENT

Loss 448,722,415 237,258,043 151,102,227 1,128,970,186 1,128,970,186 911,514,998 911,514,998 911,514,998 911,514,998 237,258,043 151,102,227 448,722,415 74,432,313 YEAR

Suspense 448,722,415 123,029,134 460,687,970 74,432,313 CURRENT 37,216,156 59,314,511 AMOUNT CURRENT

Provision GROSS 226,405,295 YEAR INTEREST YEAR 651,046,236 PREVIOUS PREVIOUS 1,186,189,950 1,186,189,950 502,779,382 456,150,359 153,485,973 668,282,216 668,282,216 123,029,134 448,722,415 PROVISION 1,333,591,967 502,779,382 228,075,180 113,344,335 470,949,511 73,774,236 PREVIOUS PREVIOUS 18,443,559 37,216,156 59,314,511 PREVIOUS PREVIOUS YEAR YEAR YEAR PEERCENTAGE 63,729,135,353 7,155,579,476 5,754,474,636 MOVEMENT AMT INRS. 236,104,788 TOTAL (Rs) MOVEMENT MOVEMENT 177,943,532 MOVEMENT MOVEMENT 243,232,782 28,073,093 37,216,157 NET NPA (30.13) (15.34) (10.75) (83.68) (37.14) 221.60 11.23 (10.75) (83.68) 221.60 (1.55) (2.18) 1.96 9.03 0.54 8.54 (%) (%) (%) - encompasses assignment ofsystematic credit ratings. The Risk institutional & SMEborrowers against stipulated& also criteria individual appraisalofallborrowers includingcorporate, credit assessmentprocess risk hasbeendefinedwhichinvolves for for credit approval. appraisal&authority Acomprehensive manual & product documents lay down the basic framework product. developed forDocuments eachbanking These policies, Credit Policy Guidelines, Credit Policy Manual, andspecific Product Credit atHBLisbeing managed through Risk implementation of requirements.regulatory Framework and basedonBaselIIaccord aswell asotherstatutory ensure compliancewiththerequirements oftheCapital Adequacy operational aspects.Asystematic assessmentprocess isinplaceto procedures havedetailed working beenlaidoutfor various roles and responsibilities at different levels of management and controlinternal rights, system isinplacewhichdefines authorities, comprehensive managementatalllevels ofoperation.Astrong risk HBL hassetupastrong control environment &monitoring for Management III. Risk i. Segregation ofInvestment Portfolio account ofexposure ismeasured to operationalrisk andreviewed to remedyactions any breakdown inthesystem. Capital charge on related control internal corrective&preventive systems andtakes Office. riskand Themanagement analysesthesedata, assesses ManagerattheHead General and Executive OperatingOfficer to the related reports atlocallevel to andmake operationalrisks data collect of eachbusiness unitandbranchmanagersfurther Heads Controlcentrally by Compliance &Internal Department. BankismonitoredNepal Rastra atbranchlevel by KYC & Officers prudential guidelinesandotherdirectives andcirculars issuedby at different levels. Compliance & procedures,to these policy as well as procedural matters activities for operation of banking Manual, etc. Record Manual & Reconciliation which define policy Manual, ITPolicy, Policy,Banking ITSecurity Retention Document Manual, Fundand Remittance Transfer Manual, SMSandInternet Manual, Bills Cash &Customeroperation manualslike Service thebankhasdeveloped andimplemented differentthe risk, faced byrisk financial institutions. For proper management of The bank recognizes as asignificant operational risk potential the bank’s credit portfolio. oramendthepoliciesinorder instructions to strengthen necessary conditions&managementanalysisissue of thecurrent market reviews theoverall credit onthebasis director further &otherrisk CommitteeManagement undercoordination ofannon-executive management. The Board ofDirectors on its own &through Risk &recommendsscenario initiatives for to betaken improved risk concentration,market ofthebankwithrespectto risk portfolio reviewadditional to &appraisaloftheoverall periodical loan with thecredit proposals for forwarded approval by branchesin reviews associated and assesses the risk Department Management Placements Investment inGovernmentBonds Investment in Treasury Bills Held to Maturity Investment inequity Available for Sale PARTICULARS 19,949,373,085 10,158,618,779 7,766,398,662 2,024,355,644 AMT INRS. 90,002,059 Committed to change ... for better 75 Himalayan Bank Ltd. | Annual Report 2013/14 Remarks Amount in NPR SCHEDULE 34 No. of Shares pledged of Shares No. 323,237 Loan Amount Amount Loan (Rs.) 45,000,000 Particulars of Loan Name of Bank / Financial Name of Bank / Financial loan Institution providing Century Bank Ltd Commercial

% of paid up capital 2.30 Sahres registered in Sahres registered the name of promoters Total No. No. Total of shares 667,635 Shahsi Kant Agrawal Promoters / Promoters Shareholders classified under Group Promoters their ownership Statement of loans availed by pomoters/shareholders pomoters/shareholders by of loans availed Statement other banks and from group falling under promoters’ of the Bank under by pledging shares financial institutions / re-arranged necessary. fair comparison, facilitate where to 23. Rounding off and Comparative Figures Comparative 23. Rounding off and reclassified have been year figures Previous rupee. to the nearest rounded off in Nepalese Rupees, presented are financial statements The directly reporting to the Audit Committee of the Board. Any lapses or non-compliance with the stipulated control systems as identified lapses or non-compliance systems Any control with the stipulated of the Board. Committee directly reporting the Audit to departments& branches during variousof audit the units, business Board the & reportedis department the Committee by Audit the to such reported instances. remedy the management to issued to upon instructionswhere are assumes the primary responsibility of ensuring that all control systems are in place & are functioning as required within the bank.assumes the primary functioning in place & are as required are systems responsibility of ensuring that all control Department & InternalCompliance Control & on-site off-site day functioning at Head Office to of the bank through day the monitors with particularreviews & makes functioning systems reporting of internal emphasis on proper control the senior management along to necessary for with recommendations actions. Internal corrective function Audit independent with the department within the bank is fully A strong & effective internal control system in continuous operation is inevitable for smooth functioning of any organization. functioningManagementfor smooth organization. in continuous operation is inevitable of any system internal control & effective A strong by the senior management of the bank. The bank is in the final stages of PCIDSS certification is in the final stages bank The will further which bank. management of the the senior by the card strengthen of all levels at system internal control a strong maintaining towards committed management is strongly The in the bank.operations banking risks operational possible extent. the maximum mitigate to to activities in order under market in equity covered liquidity are and investment rate, interest rates, in exchange movements Risks with adverse associated Department Treasury direct supervision under Financial Executive of the the by riskThis monitored is continuously risk management. treasury authority & regulating the procedures aimed at A comprehensive manual is in place which defines Officer & General Manager. activities of all currencies Net open position setting up of various including maintaining liquidityrelated risk & risk levels limits, hedging. necessary reporting on daily basis and reported for the management to is done & risk review assessment. Periodic / return is prepared on the assesses the impact risks of the exposure the associated and returns, which reviews Liabilities Management Committee Assets to capital adequacy position and makesbank’s periodic reports of Directors. the Board to reputation & other with operational and marketrisks associated In the credit, to legal, addition to risk, significance due the bank gives The Board intervalsregular at management. senior the by monitored and assessed identified, risks These are banking activities well. as market & the prevailing the management from scenario & issue necessary these risks also reviews on the basis of feedback of Directors and operational factual including credit, all data on provides MIS is in place which risks, instructions the management. An effective to market in analysis & management of the risks which is instrumental assessment of capital requirement. & exposures Himalayan Bank Ltd. | Annual Report 2013/14 76 Committed to change ... for better

FINANCIAL STATEMENT F.Y. 2013/14 COMPARISON OFUNAUDITED ANDAUDITED S.N. 3.13 3.12 3.11 3.5 3.4 3.3 3.10 3.9 3.6 1.3 1.2 1.1 2.5 2.4 2.3 2.2 2.1 2. 1.7 1.6 1.5 1.4 1. 1. 3.8 3.7 3.2 3.1 3. 2.7 2.6 A.NetInterest Income (3.1–3.2) PARTICULARS Provision For Tax Provision ForBonus Staff Extraordinary Income /Expenses(Net) Income Extraordinary Foreign Exchange Gain/Loss (Net) Operating Income Other Fees, Commission AndDiscount ProvisionWrite BackOf For Possible Loss Non Operating Income /Expenses(Net) NonOperatingIncome StaffExpenses Debenture AndBond AndSurplus Reserve Paid UpCapital Fixed Assets Loans AndAdvances Investments Notice At Call AndShort Money Cash AndBankBalance TOTAL (2.1 ASSETS TO 2.7) Liabilities Other Income Tax Liability Deposits Borrowings Interest Expense TOTAL CAPITAL ANDLIABILITIES(1.1 TO 1.7) Provision For Possible Losses Other OperatingExpenses Other Interest Income Interest Income PROFIT ANDLOSS ACCOUNT Assets Other Assets NonBanking G.Net Profit / Loss (F. - 3.12 -3.13) (E. +3.11) F. ProfitBefore Bonus And Taxes (D. +3.93.10) E. Profit From Regular Activities (A. +3.33.43.5) B. Total Operating Income D. Operating Profit (C.–3.8) (B.–3.6–3.7) C.Operating ProfitBefore Provision Statements 74,992,922 Unaudited 74,992,922 74,992,922 46,449,329 19,842,060 64,674,848 1,802,243 2,495,801 3,745,176 2,065,459 1,102,806 1,820,581 1,786,913 1,100,000 3,504,515 2,898,000 1,322,778 5,542,590 2,815,559 2,248,798 4,744,599 1,640,065 Financial 552,268 165,507 385,102 206,450 657,823 713,823 196,100 278,546 965,894 18,338 15,033 As per As per 297 – – – Statements 74,718,815 74,718,815 74,718,815 46,449,329 19,842,060 64,674,848 1,783,277 1,774,631 3,743,392 2,063,442 2,494,178 1,100,000 2,750,711 3,332,700 1,322,814 5,542,590 2,802,980 2,248,798 1,080,863 4,742,975 1,365,922 Financial 959,107 982,579 Audited 662,054 162,116 385,102 206,814 657,298 774,565 713,830 196,100 966,120 17,487 57,576 As per Asper 8,646 – – (804,334) (274,107) (143,699) Variance (753,804) (274,143) (274,107) (37,304) (27,612) (12,579) 109,786 774,268 434,700 802,317 (1,784) (2,017) (1,623) (3,391) (9,692) (1,624) 57,576 2,454 (525) 226 36 7 – – – – – – – – – – – Variance % % Variance (45.01) (13.03) (52.85) (21.51) (16.72) 288.04 (2.05) (1.53) (0.37) (0.10) (0.07) (0.05) (0.37) (2.05) (0.08) (0.45) (0.03) 19.88 16.33 15.00 0.00 0.00 0.02 – – – – – – – – – – – – - loan written offdisclosedseparatelyloan written during theyearduring shown separately Additional Tax provision audit after post audit changes in profit and tax post auditchanges in profit andtax adjustment ofexcess depreciation regrouping ofaccountbalances, regrouping ofaccountbalances, regrouping ofaccountbalances regrouping ofaccountbalances regrouping ofaccountbalances regrouping ofaccountbalances additional provisions, expenses for provision shown separately declaration ofbonusshares & declaration ofcashdividend post auditchanges inprofit declaration ofbonusshares post year-end adjustments,post year-end post year-end adjustments,post year-end post year-end adjustments,post year-end post year-end adjustments,post year-end post year-end adjustments,post year-end post year-end adjustments,post year-end reversal ofprovisions made Amount inNPRthousand post year-end adjustments post year-end adjustment ofprovisions, adjustment ofprovisions, adjustment ofprovisions, adjustment ofprovisions Reasonsfor Variance SCHEDULE 35 cash dividend liability Committed to change ... for better 77 Himalayan Bank Ltd. | Annual Report 2013/14 - 5,999 88,429 (7,004) 33,290 550,149 165,072 300,469 682,978 852,111 842,900 369,393 137,669 432,995 431,623 934,681 144,279 631,126 2,508,273 3,523,963 1,988,874 1,145,974 1,521,366 1,514,362 943,698 1,418,311 4,627,335 2,119,062 2,898,000 2,401,708 1,100,000 2,892,810 3,648,199 2,061,832 3,154,574 1,643,991 2,591,601 6,198,857 6,315,947 1,308,774 4,733,348 12,992,045 41,057,398 22,165,293 53,072,319 48,338,972 62,486,557 62,486,557 PREVIOUS YEAR PREVIOUS YEAR SCHEDULE 36 SCHEDULE CORRESPONDING CORRESPONDING QUARTER ENDING QUARTER Amount in NPR in thousand Amount in NPR – – 258 5,298 68,090 14,653 456,148 192,500 130,050 297,302 625,625 480,054 673,046 299,182 113,334 340,487 555,450 602,383 951,626 7,994,664 1,795,246 2,678,746 1,525,646 1,226,464 1,241,375 1,246,673 ENDING 792,852 54,922,521 2,171,311 3,528,870 1,733,624 2,898,000 3,194,561 1,100,000 3,451,171 5,961,787 2,886,065 1,660,142 3,257,623 5,501,983 7,823,285 1,307,174 62,917,185 17,971,768 45,715,752 25,295,170 QUARTER QUARTER PREVIOUS 73,753,417 73,753,417 – – – 297 This This 18,338 60,741 15,033 657,823 206,450 385,102 196,100 713,823 965,894 165,507 552,268 665,907 397,346 549,964 Ending 8,739,108 2,495,801 3,745,176 2,065,459 1,786,913 1,802,243 1,820,581 278,546 Quarter 55,935,740 1,640,065 4,744,599 2,248,798 2,898,000 3,504,515 1,100,000 2,815,559 5,542,590 2,735,573 1,611,578 3,525,954 5,676,510 8,470,789 1,322,778 64,674,848 19,842,060 46,449,329 25,490,539 1,102,806 74,992,922 74,992,922 (Fourth Quarter)(Fourth 1. Residential Real Estate (except Personal Home Loan upto Rs. 10 Mil) Rs. upto Home Loan Personal 1. Residential (except Real Estate 2. Business Complex & Residential Apartment2. Business Complex Construction 3. Income Generating Commercial Complex Loan 3. Income Complex Generating Commercial 4. Other Real Estate Loan (including Land Purchase & Plotting) 4. Other (including Land Purchase Loan Real Estate PARTICULARS OTHER ASSETS OTHER PROFIT AND LOSS ACCOUNT PROFIT AND LOSS INTEREST INCOME INTEREST EXPENSE TOTAL CAPITAL AND LIABILITIES (1.1 TO 1.7) TO AND LIABILITIES (1.1 CAPITAL TOTAL AND DISCOUNT FEES, COMMISSION PAID UP CAPITAL PAID RESERVE AND SURPLUS DEBENTURE AND BOND BORROWINGS INCOME OPERATING OTHER DEPOSITS (A + B) (A DEPOSITS LIABILITY TAX INCOME (NET) GAIN/LOSS FOREIGN EXCHANGE OTHER LIABILITIES OTHER TOTAL ASSETS (2.1 TO 2.7) TO (2.1 ASSETS TOTAL CASH AND BANK BALANCE CALL AND SHORT NOTICE MONEY AT INVESTMENTS AND ADVANCES LOANS STAFF EXPENSES STAFF OTHER OPERATING EXPENSES OPERATING OTHER WRITE BACK OF PROVISIONWRITE BACK POSSIBLE LOSSES FOR PROVISION LOSSES FOR POSSIBLE / EXPENSES (NET) INCOME NON OPERATING / EXPENSES (NET) INCOME EXTRAORDINARY BONUS PROVISION FOR STAFF PROVISION FOR TAX FIXED ASSETS NON BANKING ASSETS A. NET INTEREST INCOME (3.1–3.2) A. NET INTEREST INCOME A. DOMESTIC CURRENCY FOREIGN CURRENCY B. a. Real Estate Loan Loan a. Real Estate (A+3.3+3.4+3.5) INCOME OPERATING TOTAL B. C. OPERATING PROFIT BEFORE PROVISION (B-3.6-3.7) PROFIT BEFORE PROVISION C. OPERATING PROFIT (C–3.8) OPERATING D. E. PROFIT FROM REGULAR (D + 3.9 + 3.10) ACTIVITIES F. PROFIT BEFORE BONUS AND TAXES (E + 3.11) TAXES PROFIT BEFORE BONUS AND F. G. NET PROFIT / LOSS (F - 3.12 - 3.13) / LOSS G. NET PROFIT b. Personal Home Loan of Rs. 10 Mil of Rs. or less Home Loan Personal b. Loan Type Margin c. d. Term Loan Term d. Loan Loan/WC Overdraft Loan/TR e. Others f. 2.7 3. 3.1 3.2 S.N. 1. 3.3 1.1 1.2 1.3 1.4 3.4 1.5 1.6 3.5 1.7 2. 2.1 2.2 2.3 2.4 3.6 3.7 3.10 3.8 3.9 3.11 3.12 3.13 2.5 2.6 UNAUDITED FINANCIAL RESULTS RESULTS FINANCIAL UNAUDITED Himalayan Bank Ltd. | Annual Report 2013/14 78 Committed to change ... for better

10 YEAR’S FINANCIAL SUMMARY BALANCE SHEET Amount in NPR in thousand

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 PARTICULARS 2061/62 2062/63 2063/64 2064/65 2065/66 2066/67 2067/68 2068/69 2069/70 2070/71 Assets Cash & Bank Balances 2,014,471 1,717,352 1,757,341 1,448,143 3,048,527 3,866,491 2,964,651 6,362,296 3,648,199 5,542,590 Money at Call 441,081 1,005,280 1,710,024 518,530 1,170,794 308,840 734,000 264,600 2,061,832 196,100 Investments 11,692,342 10,889,031 11,822,985 13,340,177 8,710,691 8,444,910 8,769,939 10,031,580 12,992,045 19,842,060 Loans,Advances & Bills Purchased 13,451,168 15,761,977 17,793,724 20,179,613 25,519,519 29,123,755 32,968,270 35,968,473 41,057,398 46,449,329 Fixed Assets 295,822 540,825 574,060 795,310 952,196 1,061,871 1,187,493 1,305,364 1,308,774 1,322,814 Other Assets 976,459 665,343 656,734 575,852 644,959 1,054,384 1,513,144 1,435,153 1,418,311 1,365,922 Total Assets 28,871,343 30,579,808 34,314,868 36,857,624 40,046,686 43,860,251 48,137,497 55,367,467 62,486,557 74,718,816 Liabilities Borrowings 506,048 504,625 595,968 943,178 500,000 500,000 510,000 500,000 1,188,429 1,100,000 Deposit Liabilities 24,814,012 26,490,852 30,048,418 31,842,789 34,681,345 37,611,202 40,920,627 47,730,994 53,072,319 64,674,848 Reserve for Doubtful Debts 1,026,648 1,119,417 795,727 682,093 726,364 1,143,126 1,401,294 1,003,039 1,333,592 1,128,970 Other Liabilities 982,888 698,738 728,256 876,573 1,019,096 1,166,717 1,310,099 1,501,424 1,592,509 1,731,586 Total Liabilities 27,329,596 28,813,632 32,168,368 34,344,633 36,926,805 40,421,046 44,142,019 50,735,457 57,186,849 68,635,405 Net Assets 1,541,747 1,766,176 2,146,500 2,512,992 3,119,881 3,439,205 3,995,478 4,632,010 5,299,708 6,083,411 Shareholders’ Equity Paid up Capital 643,500 772,200 810,810 1,013,513 1,216,215 1,600,000 2,000,000 2,400,000 2,760,000 2,898,000 Proposed capitalisation of profits 128,700 38,610 202,703 202,703 383,785 400,000 400,000 360,000 138,000 434,700 Reserves 611,372 798,808 948,601 1,199,934 1,483,355 1,302,618 1,562,546 1,799,111 2,397,023 2,732,353 Retained Earnings 158,175 156,558 184,386 96,842 36,526 136,587 32,932 72,899 4,685 18,358 Total Shareholders’ Equity 1,541,747 1,766,176 2,146,500 2,512,992 3,119,881 3,439,205 3,995,478 4,632,010 5,299,708 6,083,411 Total Capital + Liabilities 28,871,343 30,579,808 34,314,868 36,857,624 40,046,686 43,860,251 48,137,497 55,367,467 62,486,557 74,718,816 Contingent Liabilities Letter of Credit 3,469,134 3,068,891 2,916,470 6,125,565 7,042,307 5,294,496 3,574,914 3,983,150 3,697,028 6,862,523 Guarantees 3,451,242 3,423,337 3,449,207 1,644,703 1,701,268 4,104,631 3,292,959 3,371,855 2,355,843 2,955,043 Forward Exchange Contract 2,818 – 165,278 13,998 169,911 5,603 821,620 199,188 174,795 607,820 Other Contingent Liabilities 795,554 86,880 322,681 3,087,675 5,836,222 3,513,372 5,743,679 6,882,662 8,153,638 9,427,195 Total Contingent Liabilities 7,718,748 6,579,108 6,853,636 10,871,941 14,749,708 12,918,103 13,433,171 14,436,855 14,381,305 19,852,581

Committed to change ... for better 79 Himalayan Bank Ltd. | Annual Report 2013/14

18,358 18,358 4,685 72,899 32,932 136,587 36,525 96,842 184,385 156,557 158,175 Sheet Balance to Transferred Profit

Contingent Reserve Contingent - - 212,516

- - - - 47,259 1,479 - - - - - Reserve Adjustment Investment

Deferred Tax Reserve Tax Deferred - - 39,513 20,473 - 596 7,760

Income Tax of last year last of Tax Income ------15,998 (10,122) 1,369 3,774

Proposed capitalisation of profit-Bonus Share profit-Bonus of capitalisation Proposed 434,700 434,700 138,000 360,000 400,000 400,000 383,785 202,703 202,703 38,610 128,700

Transfer to Capital Adjustment A/c Adjustment Capital to Transfer 38,610 38,610 ------

Transfer to Paid up Capital up Paid to Transfer ------

Proposed Dividend Proposed 175,404 175,404 276,000 322,106 336,842 189,474 145,946 253,378 121,622 231,660 74,511

Interim Dividend Interim ------

HBL Bond redemption fund redemption Bond HBL 51,429 51,429 157,143 157,143 157,143 71,429 71,429 71,429 122,857 122,857 51,429 51,429

Interest Spread Reserve Fund Reserve Spread Interest ------

Exchange Equalisation Fund Equalisation Exchange 1,767 1,767 - - 6,682 - 2,237 1,302 - 5,906 -

Statutory General Reserve General Statutory 191,821 191,821 188,740 191,728 178,623 101,760 150,567 127,174 98,365 91,492 61,655

Interest Spread Reserve reversed Reserve Spread Interest ------

Profit/Loss carried down carried Profit/Loss 979,194 979,194 1,016,597 1,038,634 1,073,766 901,324 849,676 820,254 648,380 615,633 478,244

P/L Appropriation P/L

Net Profit after Tax after Profit Net 959,107 959,107 943,698 958,638 893,115 508,798 752,835 635,869 491,823 457,458 308,277

Income Tax provision Tax Income 662,054 662,054 432,995 430,453 344,619 246,929 313,771 312,970 225,580 214,941 214,265

Profit before Tax before Profit 1,621,161 1,621,161 1,376,693 1,389,092 1,237,734 755,727 1,066,606 948,839 717,404 672,399 522,542

Total Expenses Total 2,139,718 2,139,718 2,153,269 1,530,127 1,364,866 1,414,614 925,252 658,357 679,452 723,023 676,175

Non-Operating Expenses Non-Operating (783,211) (362,389) (462,939) (330,438) (239,686) (9,511) (79,069) (96,763) 2,902 15,012

Provision for Staff Bonus Staff for Provision 162,116 162,116 137,669 138,909 123,773 75,573 106,661 94,884 71,740 67,240 58,060

1,080,863 1,080,863 842,900 505,491 471,729 692,640 68,806 6,008 90,689 88,593 147,139 Provision for Doubtful Debts Doubtful for Provision

Operating Expenses Operating 966,120 966,120 852,111 714,436 582,210 471,103 398,317 344,321 322,865 329,699 277,375

Staff Expenses Staff 713,830 713,830 682,978 634,229 517,592 414,984 360,981 292,213 290,921 234,589 178,589

Expenses

Total Income Total 3,760,879 3,760,879 3,529,962 2,919,218 2,602,600 2,170,341 1,991,858 1,607,196 1,396,855 1,395,422 1,198,717

Non Operating Income Operating Non 17,487 17,487 5,999 8,006 15,856 12,382 3,810 9,700 3,493 1,887 2,795

Other Income Other 206,814 206,814 165,072 182,029 129,517 112,346 46,343 62,103 40,329 52,325 41,301

Foreign Exchange Income Exchange Foreign 385,102 385,102 300,469 309,898 195,529 180,279 249,983 207,669 151,637 198,130 137,301

Commission & Discount & Commission 657,298 657,298 550,149 510,840 350,365 270,259 284,302 187,820 193,224 165,448 132,816

Net Interest Income Interest Net 2,494,178 2,494,178 2,508,273 1,908,446 1,911,333 1,595,075 1,407,420 1,139,903 1,008,171 977,632 884,504

Interest Expense Interest 2,248,798 2,248,798 2,119,062 2,816,441 2,414,807 1,553,531 934,778 823,745 767,411 648,842 561,964

Interest Income Interest 1,446,468 1,446,468 1,626,474 1,626,474 1,775,583 1,775,583 1,963,647 1,963,647 2,342,198 2,342,198 3,148,605 3,148,605 4,326,141 4,326,141 4,724,887 4,724,887 4,627,335 4,627,335 4,742,975 4,742,975

Income

2070/71 2061/62 2062/63 2063/64 2064/65 2065/66 2066/67 2067/68 2068/69 2069/70

PARTICULARS

2013/14 2004/05 2005/06 2006/07 2007/08 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 10 YEAR’S FINANCIAL SUMMARY PROFIT AND LOSS ACCOUNT LOSS AND PROFIT SUMMARY FINANCIAL YEAR’S 10 Himalayan Bank Ltd. | Annual Report 2013/14 80 Committed to change ... for better

Instruction issued by Nepal Rastra Bank in the course of approval of Financial Statements of FY 2013/14: (a) To resolve the observations raised in the audit report and to ensure that similar observations are not repeated.

(b) To freeze cash dividend and bonus shares due to promoter shareholders with holding in excess of provision under clause 7 of Unified Directive 10/070 till the said ceiling is complied with. Committed to change ... for better 81 Himalayan Bank Ltd. | Annual Report 2013/14 Gangabu, Samakhusi Gangabu, 977-1-4354446 01-4354663, Fax: Tel: [email protected] Email: Branch Hetauda Hetauda Main Road, 977-57-523156 057-525877,522899, Fax: Tel: : [email protected] Email Branch Swoyambhu Plaza, Swoyambhu Welfare APF 977-1-4033776 01-4033798, 4285461, Fax: Tel: : [email protected] Email Branch Kawasoti Nawalparasi Chowk-5, Shabhapati 977-78-541045 078-541040, Fax: Tel: [email protected] Email: Branch Bhairahawa Siddharthanagar Tole, Prahari 977-71-524407 071-526945, 524395, Fax: Tel: : [email protected] Email Branch Trishuli Trisuli Bidur Bidur, Chowk, 977-10-561697 010-561696, Fax: Tel: [email protected] Email: Card Centre Kathmandu Kamaladi, 977-1-4245932 01-4245979, 4245980, Fax: Tel: 16-600-112-000 No.: Free Toll : [email protected] Email Ghorahi Branch Dang Ghorahi, New Road, 977-82-562902 082-562901, Fax: Tel: : [email protected] Email Branch Biratnagar Biratnagar Mainroad, Sanihat, 977-21-528452 534944, Fax: 021-524653, Tel: [email protected] Email: Branch Baneshwor New Kathmandu Chowk, New Baneshwor 977-1-4785589 4784859, Fax: 01-4785583, Tel: [email protected] Email: Dhading Branch Dhading Besi, Dhading 977-10-521110 Fax: 010-521111, Tel: : [email protected] Email Damak Branch Damak, Jhapa Highway, 977-23-585094 585292 Fax: 023-585291, Tel: : [email protected] Email Ram Bazaar Branch Pokhara Rambazaar, Chowk, Amarsingh 977-61-430302 Fax: 061-430301, Tel: Branch Thamel Thamel Marg, Tridevi Building, Kosh Sanchaya Karmachari Phone : 4250202, 4250359 977-1-4250356 Fax: : [email protected] Email Samakhusi Branch

Butwal Branch Butwal Chowk, Butwal Traffic 977-71-546908 071-551016, 551017, Fax: Tel: : [email protected] Email Sohrakhutte Branch Kathmandu Chowk, Sorahkhutte 977-1-4389036 01-4389035, Fax: Tel: [email protected] Email: Branch Teku Kathmandu Business Park, Kathmandu 977-1-4104568 01-4104572, 4104687, Fax: Tel: [email protected] Email: Dillibazar Branch Kathmandu Kalikasthan, 977-1-4431659 01-4431658, Fax: Tel: [email protected] Email: Branch Nepalgunj Dhamboji, Nepalgunj 977-411291 081-411290, 411292, Fax: Tel: [email protected] Email: Dhangadi Branch Dhangadi Ratopool, 977-91-520204 091-520202, Fax: Tel: : [email protected] Email Branch Bharatpur Chitwan Pulchowk, 977-56-571822 056-572097, 572225, Fax: Tel: [email protected] Email: Itahari Branch Itahari Road, Dharan Market, Pathibhara 977-25-587940 025-587041, 587042, Fax: Tel: [email protected] Email: Gorkha Branch Gorkha Bus Park, 977-64-421521 Fax: 064-421520, Tel: : [email protected] Email Branch Tandi Sauraha Tandi Chowk, 977-56-561850 Fax: 056-560750, Tel: : [email protected] Email Branch Palpa Palpa Tansen, Silkhan Tole, 977-75-522642 520095, Fax: 075-522641, Tel: : [email protected] Email Kalanki Branch Kathmandu Chowk, Kalanki 977-1-4279765 Fax: 01-4279762, Tel: : [email protected] Email Bhaktapur Branch Sukuldhoka, Bhaktapur 977-1-6617492 6616092 Fax: 01-6617493, Tel: : [email protected] Email Chabahil Branch Chabahil Chuchepati, 977-1-4490064 Fax: 01-4462045, Tel: [email protected] Email: Branch Satdobato Lalitpur Chowk, Satdobato 977-1-5002535 Fax: 01-5002645, Tel: [email protected] Email:

Corporate Offi ce: Corporate Nepal Kathmandu, Kamaladi, 977-1-4222800 4227749, Fax: Tel: 20590, Box: P.O. E-mail: [email protected] HIMANPKA SWIFT: www.himalayanbank.com, Website: Baglung Branch Baglung Jeep Park, 977-68-522691 068-522690, Fax: Tel: [email protected] Email: Branch Battisputali Kathmandu Battisputali, 977-1-4484991 01-4484990, Fax: Tel: [email protected] Email: Birtamod Branch Sanischarya Birtamod, Road, Jhapa 977-023-545610 023-545611, Fax: Tel: [email protected]: Branch Betrawati Rasuwa Betrawati, Laharepauwa, 977-10-412002 010-681343, 412001, Fax: Tel: [email protected] Email: Bahrabise Branch Sindhupalchowk Barahabise Bazar, 977-11-489291 011-489290, Fax: Tel: [email protected] Email: Banepa Branch Banepa Road, Panauti 977-11-664735 011-664734, Fax: Tel: : [email protected] Email Branch Patan Lalitpur Pulchowk, 977-1-5010754 01-5010584, 5010593, Fax: Tel: : [email protected] Email Branch Road New Kathmandu Bishal Bazaar Complex, 977-1-4240086 01-4243107, 4224787, Fax: Tel: : [email protected] Email Maharajgunj Branch Kathmandu Maharajgunj, 977-1-4425181 4424292, Fax: 01-4425183, Tel: : [email protected] Email Centre Global FI & Remittance Kathmandu Kamaladi, 977-1-4250351 4250354 Fax: 01-4227749, Tel: 16-600-111-000 No.: Free Toll Dharan Branch Sunsari Line, Putali 977-25-528968 528967, Fax: 025-528966, Tel: : [email protected] Email Kaushaltar Branch Bhaktapur Madhyapur, 977-1-6639563 Fax: 01-6639564, Tel: : [email protected] Email Branch Pokhara Pokhara New Road, 977-61-538908 540230, Fax: 061-538907, Tel: : [email protected] Email Branch Parsa Chitwan Parsa, Road, Naya 977-56-583629 Fax: 056-583628, Tel: : [email protected] Email Branch Birgunj Birgunj Mahabir Road, 977-51-527518 527504, Fax: 051-524678, Tel: : [email protected] Email ] and Branches Office [Head Himalayan Bank Ltd. | Annual Report 2013/14 82 Committed to change ... for better