www.everestbankltd.com

19 th Annual Report 2012/013 At a aGlance Glance

Deposit Loans & Advances Investment Capital & Reserve Net Worth (Rs. in million) (Including Bills Purchases) (Rs. in million) (Rs. in million) (Rs. in million) (Rs. in million) 9263.8 57720.4 44197.7 4827.8 33322.9 36932.3 41127.9 50006.1 24469.6 28156.4 31661.8 36616.8 5948.5 5008.3 7743.9 7863.6 2203.6 2759.1 3113.6 4177.3 2205.4 2757.1 3640.7 4017.3 4667.8 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013

Operating Profit Net Profit Earning Per Share No. of Branches No. of Staff (Rs. in million) (Rs. in million) (In Rs.) 2401.6 50 643 1471.1 91.88 1073.5 1349.1 1516.7 1790.4 638.7 831.8 931.3 1090.6 99.99 100.16 83.18 88.55 32 37 43 47 531 568 583 625 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013

Joint-Venture Partner, PNB, at a glance (31 March 2013)

Total Business Total Assets Operating Profit INR 700285 Crore INR 478877 Crore INR 10907 Crore (Growth of 4.00% YoY) (Growth of 4.51% YoY) (Growth of 2.76% YoY)

Net Profit Book Value Per Share Earning Per Share INR 4748 Crore INR 884.03 INR 139.52 (Growth of -2.78% YoY) BOARD OF DIRECTORS

B. K. Shrestha Ved K. Shrestha Dr. Bal Gopal Baidya Arun Man Sherchan Chairman Director Director Director

K. Ram Mohan Dr. Rakesh Gupta Director Director (Punjab National Bank, India) (Punjab National Bank, India)

Shiva Sharan K.C. Navin Bhakta Shrestha Director Director (Public Shareholders) (Public Shareholders)

Pramod Raj Sharma Legal Advisor Auditor Company Secretary Sr. Advocate Shambhu Thapa Sundar Man Shrestha, FCA Sundar & Company Chartered Accountants MANAGEMENT TEAM

A. K. Ahluwalia Chief Executive Officer

A. K. Bansal H.P. Kulkarni Hum Nath Gurung Dy. General Manager Dy. General Manager Dy. General Manager

Pramod Raj Sharma Company Secretary 1 Chairman’s Statement 2

2 Board of Directors’ Report 3

3 Auditors’ Report 10

4 Balance Sheet 11

5 Profit and Loss Account 12

6 Profit Appropriation Account 13

7 Statement of Changes in Equity 14

8 Cash Flow Statement 15

9 Schedules 16

10 Main Indicators 43

11 Significant Accounting Policies 44

12 Notes to Account 46

13 Disclosure Relating to Base-II Framework 55

14 Branch Offices 58

15 Branch Managers & Offices 59

16 Department Head 60 &+$,50$1·6££67$7(0(17

In the banking sector, the liquidity remained volatile.

While the government has been encouraging mergers of Bank to create fewer but strong banks, no major merger have taken place.

Your Bank tried its best and invited other banks to merge. Your Bank with the support of Punjab National Bank has the ability not only to complete such merger but also resolve all the likely issues that could arise as a result of such merger. Unfortunately, the effort of your Bank has not resulted in a positive manner so far. We continue to keep our doors open. One of the main reasons of merger not going through is because most of the Banks were shy to go through the valuation of the two Banks by an independent International Agency, for determining the share swap ratio. Last year I had mentioned in my statement to the respected shareholders about the turmoil and the consequent uncertainties On the part of the Government/Nepal Rastra Bank while certain created in the two largest economies of the world (a) USA and concessions were given in the areas of (a) Capital Gain Tax and (b) Europe. After the Presidential election in USA in November, (b) Land registration duties. However, important concessions 2012, there has been clear sign of improvement in the US needed in the area of (a) rate of income tax for the merged bank economy. It is reported that by introducing the technology of (b) write off of surplus assets when the two banks are merged extracting oil from the underground shell, USA is said to be now and (c) ceiling on “Golden Handshake” to surplus staff, if any, free of oil imports. This is quite a major factor. have not been pronounced.

Consequently, the US Dollar has gained strength against all The Bank is continuing its fundamental policy of avoiding currencies. That may be good for USA but has affected Indian temptation of higher earnings by investing in advances with currency and Indian economy badly – with direct effect to Nepal. relatively higher risk has kept the Non Performing Assets (bad The dollar rate in Nepal has now jumped to Rs.99/-. debts) as low as possible with steady consistent growth in profit.

The equity market in U.S has strengthened and hence investors Keeping in view (a) trend of profit and (b) our General Reserve are choosing to invest in US Securities compared to other countries Position including India. The Board considered and recommended issue of 50% cash The other good sign is that Germany, has stood as the pillar of dividend. This dividend is on the increased Capital based on 30% strength in Europe, in-spite of most of the countries in Europe bonus shares issued last year and hence amounts to 65%. If you continuing to flounder. The other dangerous development continues take the capital base of the year before last year. to be in Middle East and North Africa. Your Bank’s growth has been consistent not only in profit, but Near to our country, Indian politics continue to be volatile with also in size. The total business of the Bank (deposits and advances) the present Central Government reduced to a minority. This has crossed 10,000 crores. There are only two other Banks (Nabil uncertain political situation in India is likely to continue till the Bank and Nepal Investment Bank) who have crossed the benchmark general election scheduled in 2014. of 10,000 crores. However, your Banks EPS (Earning Per Share) is better compared to these two Banks. In our own country, the government has announced 19th November as the date for election. However, several issues connected with I would like to express my gratitude for all the help that we the election and several parties opposing the election continue receive from Nepal Rastra Bank as well as Punjab National Bank. to give an air of uncertainties. Likewise, I am thankful to the valuable suggestions and cooperation extended to me by my Board members as well as the entire Officer Investors seek certainty. One of the reasons why investment has and staff of the Bank. gone down all over the world is because of the aforesaid uncertainties. B. K. SHRESTHA Apart from the political uncertainties the central impediment for CHAIRMAN economic development is the continuing poor supply of the electricity in the country. Directors’ Report

Ladies and Gentlemen: Other Major Performance: It gives me great pleasure to welcome you to the 19th Annual General a) Business: Rs. In crore Meeting (AGM) of your Bank. I have the privilege of presenting the Increased over Balance Sheet as at 31st Ashadh 2070 (15th July, 2013), the Profit & Previous Over Loss Account and Cash Flow Statement of your Bank for the year ending 2064/065 2068/069 2069/070 Year 5 year’s on that date and the Auditors' report made there on. Particulars (2007/08) (2011/12) (2012/13) % period % Deposit 2397.63 5000.61 5772.05 15.42 240.70 1. GENERAL ECONOMIC ENVIRONMENT OF THE COUNTRY (Please also Loans & Advances 1883.64 3661.68 4419.78 20.70 234.60 refer Annexure 1 & 2) & REVIEW OF OPERATIONS OF YOUR BANK: 2. Performance Review: b) Profitability: It is my great pleasure to present the performance of your bank Rs. In crore over a period of last five years. As per the table presented below, Increased over core strength of your Bank has consistently increased over the Previous Over 2064/065 2068/069 2069/070 Year 5 year’s period. Total shareholders' fund has gone up over the last five Particulars (2007/08) (2011/12) (2012/13) % period % years from Rs. 209.22 crore to Rs. 552.42 crore consisting of the Total Income 184.82 550.83 556.05 0.95 200.86 following: Rs. in crore Operating Profit 81.82 179.04 240.16 34.13 193.52 2064/065 2069/070 Net Profit after Tax 45.12 109.06 147.11 34.88 226.04 Particulars (2007/08) (2012/13) Paid Up Capital Ordinary Shares 49.14 160.11 The table shows consistent progress of the Bank over the last five Statutory General Reserve* 32.31 161.58 years. Share Premium 20.64 1.85 Capital Adjustment Reserve 22.01 36.71 During the year under review, your Bank has earned operating profit Other Reserves 1.92 5.93 of Rs. 240.16 crore which is 34.13% more than last year and has been Debenture Redemption Reserve 6.00 4.69 able to post a after tax net profit of Rs. 147.11 crore, which is 34.88% Capital Redemption Reserve - 14.00 higher than the last year. Deferred Tax Reserve 0.94 9.95 The total deposits have reached Rs. 5772.05 crore recording an annual Retained Profit 8.37 55.95 growth of 15.42%. The loans and advances stood at Rs. 4419.78 crore Proposed Bonus Share 14.74 16.01 showing an annual growth of 20.70%. General Loan Loss & NBA Provision 53.15 85.64 Total Shareholders' Fund 209.22 552.42 Directors are glad to report that with the present proposal being placed to the shareholders for approval of issuing 10% Bonus Shares, the * As per Nepal Rastra Bank recent circular, debenture redemption reserve Bank's Paid Up Capital will cross Rs. 176 crores (Rs. 176.12 crores) against already redeemed debenture for Rs. 30.00 crores transferred to Nepal Rastra Bank Nepal Rastra Bank has issued guidelines to make General Reserve. up the paid up capital of Rs. 200 crores by Ashadh 2071.

Out of the above shareholders total funds, following reserves As a result of the continuous efforts made by the management for amounting to Rs. 114.41 crore is available for appropriation keeping the non-performing loans at the lowest level, I am happy to subject to regulatory stipulations. The details of Rs. 114.41 crore inform the honorable shareholders that the level of non-performing are given below: loans of your Bank is just 0.62% (previous year 0.84%) of gross loans and the net non performing loan is minus 1.19%. (i.e. we have more

Rs. in Crore provision against NPA than the gross NPA). Share Premium 1.85 With increase in profit, the bonus provision at 10%, payable to the Capital Adjustment Reserve 36.71 employees has also gone up to Rs. 21.00 crores which was Rs. 15.58 Debenture Redemption Reserve 14.00 crores in the previous year. Accumulated Profit 55.92 Likewise, the income tax liability also has gone up to Rs. 62.98 Crore Other Free Reserve 5.93 for the year from Rs. 46.74 crore the previous year. Ordinary Capital & other related Funds 114.41 Your Bank has been using Corporate Slogan “ Consistent, Strong & Dependable”. Respected shareholders, it is my pleasure to reiterate

19th Annual Report | 3 | that our Bank was placed in number one Bank under CAMELS parameters various locations as well as about 1100 other ATMs tied up along with Nabil Bank last year( KAROBAR national daily - 11th Ashwin with Smart Choice Technology (SCT) within the country and 2069). In this year also, you must have read in the newspapers that more than 6,500 PNB ATMs in India. EBL Debit Card can also your Bank was conferred with the Asian Pints Newbiz Award in the be used at more than 1,500 Point of Sales (PoS) terminals “Best Managed Commercial Bank” category for 2013. for purchase of merchandise. In addition to above, in an endeavor to provide various range of services to the customers, 3. Internal & External Factors Impacting Bank's Activities: our Bank has introduced e-banking, SMS banking, e-ticketing, mobile-banking. Our customers can do banking transactions During the year 2069/70 also, banking sector faced high liquidity such as-viewing their account, money transfers, recharge their position. Low demands for loans from private sector on the one mobile, pay telephone bills etc. sitting at home. We always hand and excess liquidity in the banking sector on the other hand, strive to provide easy, fast, reliable and hassle free services made the banks competing with one another on interest rates to our customers. In this endeavor, we have installed cash (both on loans and treasury bills). Loan demand from private kiosk at different five branches for depositing cash. sector during the review period did not increase due to lack of confidence of the entrepreneurs. The Board is of the view that the The Bank is striving to improve customer service quality, fulfill banking sector will be facing further challenges if the political their needs through technology and extended services. Most situation does not improve, a firm view is not taken by the concerned of our important valley branches and outside valley branch political parties regarding the role of private sector and the imbalance are providing extended customer services through evening on development vis-a-vis revenue expenditure of the government. counters. Our New Road and New Baneshwor branch provide 365 days banking services (including on holidays). Nepal has joined the South Asia Free Trade Area (SAFTA), and has also joined Economic Cooperation (BIMST-EC). Nepal has become Further, our Bank has launched its' own remittance package a member of the World Trade Organization (WTO). We have to shape “Everest Remit”. Presently, this remittance facility is available our plans and strategies accordingly to meet the challenges which to the Nepalese who are working in UAE, Qatar, UK, Bahrain, may crop up due to globalization. Malaysia and Israel. This facility will be extended to other places too in due course. In order to facilitate inward remittance Keeping in view the challenges ahead, we should start thinking and foreign trade, we have tied up with various foreign banks from right now. For this, we should start shaping our size, networks in different countries. and have proper planning. Respected shareholders with your prior approval we had initiated the merger process with other suitable Likewise, Agreements for instant money transfer have been bank/financial institution. However, due to various unseen/imbedded entered into with EZ Remit, Xpress Money Transfer, Nepal reasons the merger could not materialize despite our sincere efforts. Remit, Moneygram, thame.com. These arrangements have We would like to inform the shareholders that the agenda is still facilitated the Bank for inward remittance from different open. countries (USA, UK, Malaysia, Singapore, UAE, Kuwait, Baharain, Qatar etc.). 4. ACTIVITIES OF THE BANK AND FUTURE PLAN: Similarly, instant remittance facility to and from India has a. Operations: been in operation. It has facilitated the remitter to remit the money to any place in India and from there to Nepal without The prolonged political uncertainty has created a lot of any hassles. Presently, it is available in all PNB branches. problems. Under such circumstances, it is challenging to predict/forecast future activities as well as set plan in a right b. Branch expansion/outreach: way. However, we believe that opportunity comes with Our Bank opened three more branches during the year 2069/70 difficulties. Keeping this in mind, we have to sketch our (two outside the valley and one inside the valley) namely strategies and draw plans for future growth of the Bank. Tikapur (Kailali District), Gulariya (Bardiya District) and Not to be left behind in technology advancement, a continuous Gongabu (Kathmandu District). Now the total branch networks review and upgrading of the technology is undertaken for the have reached to 50. During the period we opened three more convenience of the customers. In this connection, Bank is extension banking counters in different locations- Parsa using world class computer software 'Finacle' and all the (Chitawan), Attariya (Kailali) and Chandrauta (Kapilvastu). information have been migrated in to it. All the branches of Including these extension counters, now the total extension EBL have been housed in centralized data base backed by a counters reached to five. In addition to these, Bank is running Disaster Recovery Cell operating from outside valley. additional twenty Government Revenue collection counters. With the changing technology, aspiration and requirement of In addition, with an aim to extend our reach and facilitate customers, our service delivery channels are also to be updated. the financial inclusion in the rural area, we have launched In this endeavor, we are increasing our own network of ATMs. Ghar Dailo Banking Sewa in different four locations by Till the review period 3.06 Lac depositors have been issued appointing 28 Business Correspondents (BCs) through smart debit card. EBL Debit Card can be used in 67 own ATMs at card based technology. The places are – Nagarkot (Bhaktapur

| 4 | 19th Annual Report District), Baglung (hilly region), Birtamode (Terai region) and 6. CAPITAL ADEQUACY: Nepalgunj (Terai region). Under the Basel – II framework, minimum bench mark fixed by Nepal Rastra Bank the Capital Adequacy Ratio is 10%. However, Further, with a view to reach the rural/semi rural people as the NRB has further directed to maintain additional one percent well as to increase our customer base and core deposit, we as buffer in case Cash Dividend is declared. The Capital Adequacy have recently launched a handset mobile based product under Ratio of the Bank as at the year end 15th July 2013, after proposed the brand name “MOBILE ATM” for Bank’s customers. dividends, stands at 11.59%. To maintain the capital adequacy The Account holder needs to register his/her mobile in the ratio intact, proper capital back up is required. If the Bank fails system. Using the Mobile, transfer of fund within the Bank to maintain the required capital adequacy ratio, further growth can be effected without visiting the Branch. Besides the in bank’s business will be adversely affected. customer can also withdraw cash from BC’s where Branch network is not available by generating coded transfer message. 7. BOARD OF DIRECTORS: Later, we will make available other services like mobile There have been some changes in the Board of Directors of the recharging, utility bill payment etc through this mode. Bank during the financial year under review. Sh. Nabin Bhakta c. Human Resources Development & Per Employee Business: Shrestha and Sh. Shiva Sharan K.C. have been re-elected (unanimously) as director representing the public shareholders in The staff strength of the Bank at the end of the financial year the 19th AGM held on 23rd Aswin, 2070 (9th Oct. 2012). 2068-69 (2011/12) was 625, which has now gone up to 643 Sh. Muskan Shrestha has been retired from the director effective in the financial year 2069/70 (2012/13). The per employee from the same date. CEO as well as the director nominee from the business as at the end of the financial year is as under: Punjab National Bank, India, Sh. P.K. Mohapatra has been returned Rs. In Lac to PNB after completion of his tenure and Dr. Rakesh Gupta, GM- 2068-69 (2011/12)2069-70 (2012/13) % Increase PNB, has been nominated as director in EBL Board. Sh. Nabin Per Per Total Total over Bhakta Shrestha, Sh. Shiva Sharan K.C. and Dr. Rakesh Gupta are Description Employee Employee Amount Amount last Amount Amount year welcomed in the EBL Board and thanks to Sh. Muskan Shrestha Deposits, Loans & Advances 866229 1385.97 1019181 1585.04 14.36 and Sh. P.K. Mohapatra for their valuable contributions made Operating Profit 17904 28.65 24015 37.34 30.33 towards the development of the Bank. Sh. A.K. Ahluwalia has been appointed as CEO of the Bank who Net Profit 10906 17.45 14711 22.87 31.06 is deputed from the Punjab National Bank, India Warm welcome It is the considered view that the progress and success of any to EBL family. organization depends upon the knowledge, skills and motivational level of its workforce. The Bank has been taking 8. AMENDMENT IN MEMORANDUM AND ARTICLES OF ASSOCIATION: keen and special interest in the development of its human In the Agenda for the Annual General Meeting a separate Agenda resources by imparting its employees training in various is executed for amendment of Articles of Association for reasons aspects of banking. Besides this, the Bank has taken special explained in the Agenda itself. care to keep the motivational level of its employees high as also to instill a sense of belongingness to the Bank. 9. EMPLOYEE RELATIONS: The Board is pleased to report that during the year under review In order to bring positive swing in the working attitude of the Management Employee relation has remained harmonious. In senior officers, the Bank has been conducting special program view of your Bank’s expansion, the recruiting of new manpower on Management Development. In addition to this, during the as well as motivating our existing employees is proceeding apace. review period various types of in-house training/talk program were conducted, staff were deputed/sent for training in 10. Corporate Good Governance: programs organized by other institutions too. During the Respected shareholders, Corporate Good Governance are one of period being reported, various trainings have been provided the key factors for strength, stability and sustainable progress of to 381 employees. (In-house and outside). an institution. We always remain alert about the corporate good governance in your Bank. Your Bank has complied with the related 5. DIVIDEND/BONUS SHARE: provisions of related Acts, Rules and Directives issued by Nepal The Board in its' meeting held on 6th September 2013 has decided Rastra Bank. to recommend to the forthcoming Annual General Meeting to declare bonus share @10% and cash dividend @ 50% subject to approval of Nepal Rastra Bank. The same is being placed before you for approval

19th Annual Report | 5 | 11. APPOINTMENT OF THE STATUTORY AUDITORS: concerned Departments of Nepal Government, Nepal Rastra Bank, The Shareholders are requested to appoint the Auditor from the our joint-venture partner, Punjab National Bank, other concerned list of the auditors approved by Nepal Rastra Bank for the authorities and institutions for their patronage and all the financial year 2070/71 (2013/14) and also fix the remuneration. employees of the Bank for their hard work and dedication. The present auditor Mr. Sundar Man Shrestha (Sundar & Co., Further we also express our sincere thanks to members of the Chartered Accountants) is eligible for re-appointment. press and other well wishers of the Bank for their valuable co- The Audit Committee of the Bank has recommended to appoint operation and support. Sundar Man Shrestha (M/s Sundar & Co. Chartered Accountants) Finally, I am sure that the Bank shall continue to get the same as auditor of the Bank for the F.Y. 2013/14 . Respected co-operation and support from all of you in the future which shareholders are requested to approve the appointment and will be a source of inspiration in our endeavor to take our Bank their remuneration as recommended by the Audit Committee of to newer heights of success in the times to come. the Board.

Thank you. 12. ACKNOWLEDGEMENT: On this occasion, on behalf of the Board of Directors and on my own behalf, I would like to thank all the shareholders for their

continuous support and guidance. I also take this opportunity On behalf of the Board of Directors, to extend thanks to our valued customers for their patronage. B. K. Shrestha, Further, we express our sincere gratitude to the officials of Chairman

| 6 | 19th Annual Report (Annexure I) Progress made by the Bank during five years period is provided for reference:

TABLE 1 : Paid up Capital, Reserve & Surplus and Business:

(Rs. in Lacs)

2065/066 2066/067 2067/068 2068/069 2069/070 Particulars (2008/09) (2009/10) (2010/11) (2011/12) (2012/13)

Paid Up Capital-Ordinary shares 6388 8305 11196 12316 16011 Statutory General Reserve 4508 6172 8034 10216 16158 Share Premium 148 148 148 185 185 Capital Adjustment Reserve 2841 3671 3671 3671 3671 Other Free Reserve 252 533 542 541 558 Capital Redemption Reserve 1400 1400 1400 1400 1400 Debenture Redemption Reserve 1200 1800 2400 3000 469 Deferred Tax 337 345 629 738 994 Proposed Bonus Share 1916 2491 1120 3695 1601 Retained Profit 824 726 361 4375 5595 Provision for possible losses 6182 6100 6042 7059 8046 Total Funds 26216 31691 35543 47197 54688 Total Deposit 333229 369323 411279 500061 577205 Total Advances 244696 281564 316618 366168 441978 Total Investment 59485 50083 77439 78636 92654

TABLE 2 : Profitability:

(Rs. in Lacs)

2065/066 2066/067 2067/068 2068/069 2069/070 Particulars (2008/09) (2009/10) (2010/11) (2011/12) (2012/13)

Total Income 25653 35355 47475 56586 55605 Interest Expenses (10129) (15728) (25359) (28733) (21792) Staff Expenses (1630) (2077) (2395) (3156) (3741) Operating Expenses (2920) (3525) (3831) (4673) (5095) Operating Profit 10974 14025 16160 20023 24977 Provision for possible losses (931) (770) (983) (2520) (988) Provision for staff bonus (891) (1188) (1331) (1558) (2101) Provision for staff gratuity (239) (187) (536) (365) (877) Profit before Income Tax 8913 11880 13310 15581 21010 Provision for Income Tax (2527) (3562) (3997) (4675) (6299) Net profit after Tax 6387 8318 9313 10906 14711

19th Annual Report | 7 | ANNEXURE : II General Economic Environment Some important information is reproduced which are taken from the Economic Survey for the year 2069/70 (2012/13) published by Nepal Government for information: i) Economic growth rate: As per the Economic Survey 2012/13, the total GDP (at producers' price) is estimated to grow by 3.65% (previous year increased by 4.5%). The main reasons for such slow down in the GDP growth are attributed to energy crisis, disturbance in industrial sector, decline in capital expenditure. ii) Increase in per capita GDP: As per the Economic Survey, per capita GDP in producers price is estimated to be US$ 717 (previous year 706). iii) Macroeconomic Indicators: Major macroeconomic indicators of the economy have been re-produced below:

Macroeconomic Indicators Unit 2011/12 2012/13

GDP (at producer's current price) Rs. Billion 1558.0 1701 Per capita GDP (at producer's current price) Rs. 57726 62502 Gross Consumption/GDP %age 90.0 90.7 Gross Domestic Savings (GDS)/GDP %age 10.0 9.3 Gross National Savings/GDP %age 36.7 38.4 Gross Fixed Capital Investment/GDP %age 19.6 21.2 Gross Investment (GI)/GDP %age 32.8 37.8 Gap between GDS and GI/GDP %age (22.8) (28.5) Revenue/GDP %age 13.2 17.00 Government Expenditure/GDP %age 23.5 23.8

Source: Economic Survey Fiscal Year 2012/13.

iv) Foreign Trade:

The following comparative table of foreign trade of the country is presented on the basis of the information provided in the Economic Survey: (Rs. in Crores)

2068/69 (2011/12) 2069/70 (2012/13) Particulars Change % Amount Share % Amount Share % EXPORT (F.O.B.) India 3259 67.1 3325 65.19 2.02 Other countries 1597 32.9 1775 34.81 11.17 Total Export 4856 100.00 5101 100.00 5.03 IMPORT (C.I.F.) India 19127 64.8 23764 65.90 24.24 Other countries 10397 35.2 12292 34.10 18.22 TOTAL IMPORT 29524 100.00 36056 100.00 22.12 Total foreign trade With India 22387 65.1 27090 65.82 21.01 With other countries 11994 34.9 14067 34.18 17.29 Total Foreign Trade 34381 100.00 41157 100.00 19.71 Source: Economic Survey 2012/13.

| 8 | 19th Annual Report From the above, total volume of foreign trade during review period increased by Rs. 6776.59 Crore (19.71%) over same period the last year. The share of total foreign trade with India and other countries stand at 65.82 percent and 34.9 percent respectively (previous year 65.1 percent and 34.9 percent). v) Banking:

Following information are reproduced for information of the respected shareholders:

Particulars Commercial Development Financial Micro-finance NRB Licensed NRB Licensed Bank Bank Companies Companies Co-operatives NGOs Total No. 32 89 65 28 16 33 Total Branches 1472 713 298 – – – Presume in Market per Capital Deposit (%) 80.32 12.14 6.98 0.56 – – Presume in Market per Capital Loan & Advances (%) 77.03 12.92 7.83 2.22 – –

Source: Economic Survey 2012/13.

19th Annual Report | 9 | SUNDAR & CO. Chartered Accountants Pulchowk (Machagaa), Phone No. (977-1) 5521804 / 5529942 Lalitpur 20/8 Gha. Fax : 977-1-5524804 P.O.B 3102 Kathmandu, Nepal Email: [email protected]

Independent Auditor's Report to The Members of Everest Bank Ltd.

Report on the Financial Statements b. In our opinion, proper books of account as required by law have We have audited the accompanying financial statements of Everest been kept by the bank, in so far as appears from our examination Bank Ltd., which comprise the Balance Sheet as at 31st Ashadh 2070 of those books of account and the financial statements dealt corresponding to 15th July 2013, and the Profit & Loss Account, with by this report, prepared in the format prescribed by Nepal Statement of Changes in Equity and Cash Flow Statement for the year Rastra Bank, are in agreement with the books of accounts. then ended and a summary of significant accounting policies and c. In our opinion, the returns received from the respective branches other explanatory notes. are adequate for the audit purpose, though the statements are Management’s Responsibility for the Financial Statements independently not audited. Management is responsible for the preparation and fair presentation d. In our opinion and to the best of our information and according of these Financial Statements in accordance with Nepal Accounting to the explanations given to us and our examination of the books Standards so far as applicable in compliance with Prevailing Acts and of account of the Bank, we have not come across the cases where Laws. This responsibility includes: designing, implementing and the Board of Directors or any member thereof or any employee maintaining internal control relevant to the preparation and fair of the Bank has acted deliberately contrary to the provisions of presentation of financial statements that are free from material the law relating to accounts or caused loss or damage to the misstatement, whether due to fraud or error; selecting and applying Bank or committed any misappropriation or violated any directive appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. of Nepal Rastra Bank or acted in a manner to jeopardize the interest and security of the Bank and its depositors. Auditors’ Responsibility e. In our opinion, adequate capital fund and provisions for losses Our responsibility is to express an opinion on these financial statements have been made and the business of the Bank has been conducted based on our audit. We conducted our audit in accordance with Nepal Standards on Auditing. Those standards require that we comply with within its authority. relevant ethical requirements and plan and perform the audit to Opinion on the Financial Statements obtain reasonable assurance whether the financial statements are In our opinion and to the best of our information and according to free from misstatement. An audit involves performing procedures to the explanations given to us, the said financial statements referred obtain audit evidence about the amounts and disclosures in the to above, read together with the notes attached thereon give a true financial statements. The procedures selected depend on our judgment, and fair view of the financial position of the bank as of Ashadh 31st, including the assessment of risks of material misstatement of the 2070 (July 15th, 2013) and of the results of its financial performances financial statements, whether due to fraud or error. In making those and its Cash Flows for the year then ended in accordance with Nepal risk assessments, we consider internal control relevant to the bank’s Accounting Standards so far as applicable in compliance with the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, Prevailing Laws. but not for the purpose of expressing an opinion on the effectiveness F.C.A. of the bank’s internal control. An audit also includes evaluating the Sundar Man Shrestha, Chartered Accountants appropriateness of accounting policies used and the reasonableness Partner of accounting estimates made by the management, as well as evaluating For Sundar & Co. the overall presentation of the financial statements. Date: September 08, 2013 We believe that the audit evidence we have obtained is sufficient Kathmandu and appropriate to provide a basis for our audit opinion. Report of Other Legal and Regulatory Requirements (Bank & Financial Institution Act and Company Act) On examination of the financial statements as aforesaid, we report that: a. We have obtained all information and explanations asked for, which to the best of our knowledge and belief were necessary for the purpose of our examination.

| 10 | 19th Annual Report Balance Sheet As on 31 Ashadh 2070 (15th July, 2013)

This Year Previous Year S.No. Capital and Liabilities Schedule Rs. Rs. 1 Share Capital 4.1 1,921,239,051 1,761,126,410 2 Reserve and Surplus 4.2 2,906,605,621 2,416,176,477 3 Debenture and Bonds 4.3 468,845,000 – 4 Loans and Borrowings 4.4 402,360,000 – 5 Deposit Liabilities 4.5 57,720,464,632 50,006,100,272 6 Bills Payable 4.6 393,056,902 692,398,816 7 Proposed Cash Dividend 820,190,186 30,646,879 8 Income Tax Liabilities 23,932,525 9,297,074 9 Other Liabilities 4.7 1,084,456,540 897,383,129 Total Capital and Liabilites 65,741,150,457 55,813,129,057

This Year Previous Year S.No. Assets Schedule Rs. Rs. 1 Cash in Hand 4.8 1,723,208,985 1,700,991,770 2 Balance with Nepal Rastra Bank 4.9 8,205,090,428 8,159,753,523 3 Balance with other Banks & Financial Institutions 4.10 1,287,494,550 502,561,014 4 Money at Call and Short Notice 4.11 - - 5 Investments 4.12 9,263,858,419 7,863,627,165 6 Loan, Advances and Bills Purchased 4.13 43,393,187,065 35,910,974,673 7 Fixed Assets 4.14 631,182,801 547,925,679 8 Non-Banking Assets 4.15 - - 9 Other Assets 4.16 1,237,128,209 1,127,295,233 Total Assets 65,741,150,457 55,813,129,057

Contingent Liabilities 4.17 Directors' Declaration 4.29 Table of Capital Adequacy Ratio 4.30 (A1) Table of Risk Weighted Assets 4.30 (B,C,D,E) Main Indicators 4.31 Significant Accounting Policies 4.32 Notes to Accounts 4.33 Details of Loans Taken by Promoters against Promoter Share 4.34 Comparison of Unaudited and Audited Financial Result 4.35 Unaudited Financial Result 4.A

Schedules 4.1 to 4.17, 4.32 and 4.33 are integral part of the Balance Sheet

Hum Nath Gurung A.K. Ahluwalia Directors Bishnu Krishna Shrestha As per our report even date Dy. General Manager C.E.O. Ved Krishna Shrestha Chairman Sundar Man Shrestha, FCA Nabin Bhakta Shrestha Chartered Accountants Shiva Sharan K.C. Partner Arun Man Sherchan Sundar & Company Date: Sep 8, 2013 Dr. Bal Gopal Vaidya K. Ram Mohan Dr. Rakesh Gupta

19th Annual Report | 11 | Profit and Loss Account From Shrawan 1st, 2069 to Ashadh 31, 2070 (July 16, 2012 to July 15, 2013)

This Year Previous Year Particulars Schedule Rs. Rs. 1 Interest Income 4.18 4,936,924,072 4,959,998,415 2 Interest Expenses 4.19 2,179,182,368 2,873,334,682 Net Interest Income 2,757,741,704 2,086,663,733 3 Commission and Discounts 4.20 266,820,914 233,569,801 4 Other Operating Income 4.21 249,385,306 179,822,385 5 Exchange Income 4.22 98,905,369 109,679,321 Total Operating Income 3,372,853,293 2,609,735,240 6 Staff Expenses 4.23 461,809,285 352,050,004 7 Other Operating Expenses 4.24 509,487,902 467,292,948 8 Exchange Loss 4.22 - - Operating Profit Before Provision for Possible Loss 2,401,556,106 1,790,392,288 9 Provision for Possible Losses 4.25 98,807,333 252,054,098 Operating Profit 2,302,748,773 1,538,338,190 10 Non-operating Income/Loss 4.26 8,336,601 25,155,849 11 Write-back of Loan Loss Provision 4.27 88,312 150,348,539 Profit from Regular Activities 2,311,173,686 1,713,842,578 12 Profit /Loss from Transaction of Extraordinary Activities 4.28 (88,312) – Profit after Inclusion of all Transaction 2,311,085,374 1,713,842,578 13 Provision for Staff Bonus 210,098,670 155,803,871 14 Provision for Income Tax Tax for the year 655,436,284 478,355,956 Tax for Earlier Year 106,774 – Current Year Deferred Tax (Income)/Expense (25,673,645) (10,881,471) NET PROFIT 1,471,117,291 1,090,564,222 Schedules 4.18 to 4.28, 4.32 and 4.33 are integral part of the Profit & Loss Account

Hum Nath Gurung A.K. Ahluwalia Directors Bishnu Krishna Shrestha As per our report even date Dy. General Manager C.E.O. Ved Krishna Shrestha Chairman Sundar Man Shrestha, FCA Nabin Bhakta Shrestha Chartered Accountants Shiva Sharan K.C. Partner Arun Man Sherchan Sundar & Company Date: Sep 8, 2013 Dr. Bal Gopal Vaidya K. Ram Mohan Dr. Rakesh Gupta

| 12 | 19th Annual Report Profit Appropriation Account From Shrawan 1st, 2069 to Ashadh 31, 2070 (July 16, 2012 to July 15, 2013)

This Year Previous Year Particulars Rs. Rs. INCOME 1 Retained Profit upto last year 437,523,859 36,091,697 2 Profit for the year 1,471,117,291 1,090,564,222 3 Excgange Fluctuation Fund – – 4 Refund of Last Year Dividend Income of R.M.D.C. (385,320) –

TOTAL 1,908,255,830 1,126,655,919 APPROPRIATION 1 Accumulated Loss upto last year – – 2 Loss for the year – – 3 General Reserve 294,224,000 218,113,000 4 Deferred Tax Reserve 25,673,645 10,881,471 5 Bank Development Fund – – 6 Dividend Equalization Fund – – 7 Staff related funds – – 8 Dividend on Preference Share 11,200,000 11,200,000 9 Proposed dividend on ordinary shares 808,990,186 19,446,879 10 Proposed Bonus Share 160,112,641 369,490,710 11 Capital Redemption Reserve – – 12 Exchange Equalization Fund 1,704,000 – 13 Debenture Redemption Reserve 46,885,000 60,000,000 14 Capital Adjustment Reserve – – 15 Investment Adjustment Reserve – – 16 Other Free Reserve – – TOTAL 1,348,789,472 689,132,060 RETAINED PROFIT/(LOSS) 559,466,358 437,523,859

Hum Nath Gurung A.K. Ahluwalia Directors Bishnu Krishna Shrestha As per our report even date Dy. General Manager C.E.O. Ved Krishna Shrestha Chairman Sundar Man Shrestha, FCA Nabin Bhakta Shrestha Chartered Accountants Shiva Sharan K.C. Partner Arun Man Sherchan Sundar & Company Date: Sep 8, 2013 Dr. Bal Gopal Vaidya K. Ram Mohan Dr. Rakesh Gupta

19th Annual Report | 13 | Total Rs. Rs. Tax Deferred Rs. Reserve Other Free Rs. Profit Accumulated Rs. Fund Exchange Fluctuation itself. Rs.* Fund Capital 46,885,000 – (46,885,000) – – – Adjustment Rs. Reserve General Rs. Share Premium – – – – – (808,990,186) – – (808,990,186) Rs. Share Capital Statement of Changes in Equity July 15, 2013) 31, 2070 (July 16, 2012 to Ashadh 1st, 2069 to Shrawan From Transfer from Debenture Redemption Debenture from Transfer Reserve***Reserve to General Dividend- of Declaration SharesPreference Share Bonus of Issue TaxDeferred Reserve Redemption to Debenture Transfer – 160,112,641 – – – 300,000,000 – (300,000,000) – – – – – – – – – – – – – – (160,112,641) – – – (11,200,000) – – – (25,673,645) – – – – 25,673,645 – (11,200,000) – Transfer to Exchange Fluctuation Fund Fluctuation to Exchange Transfer Closing Balance – 1,921,239,051 18,555,127 – 1,615,790,514 554,032,000 24,606,539 559,466,358 – 34,701,674 99,453,409 4,827,844,671 – 1,704,000 (1,704,000) – – – Opening BalanceOpening Adjustment** after AdjustmentBalance Recognised Not Gains/Losses Net statement Income in the period the for Profit Net Reserve to General Transfer 1,761,126,410 1,391,635,700 Shares Ordinary of Dividend of Declaration 18,555,127 18,555,127 369,490,710 1,021,566,514 1,021,566,514 807,147,000 667,147,000 – 22,902,539 22,902,539 – – – 437,138,539 437,523,859 544,192,384 34,701,674 – 73,779,764 73,779,764 4,177,302,887 4,176,917,567 – – – 140,000,000 294,224,000 – – – – – (385,320) – (509,490,710) – (294,224,000) – – – 1,471,117,291 (385,320) – – – – – – 1,471,117,291 – – – ** Last year Bonus Shar Capitalized of Rs. 369,490,710.00. Rs. ** Last year Bonus Shar Capitalized of Reserve from other free reserve. 140,000,000.00 transferred to Capital Adjustment ** Rs. 385,320,000. Rs. R.M.D.C. of pre last year dividend income of ** Refund of 30 crore transferred to General Reserve. Rs. *** Debenture Redemption Reserve against already redemed debenture for Particulars Reserves Debenture Redemption Reserve and Capital Adjustment Reserves includes Capital Redemption Reserve, * Capital Adjustment

| 14 | 19th Annual Report Cash Flow Statement From Shrawan 1st, 2069 to Ashadh 31, 2070 (July 16, 2012 to July 15, 2013)

Particulars Current Year Rs. Previous Year Rs. A. Cash flow from Operating Activities 1. Cash Received 5,251,036,856 5,051,031,097 1.1 Interest Income 4,636,675,822 4,516,291,164 1.2 Commission & Discounts Income 266,820,914 233,569,801 1.3 Income from Foreign Exchange Transaction 92,092,513 116,515,667 1.4 Recovery of Loan written off – – 1.5 Other Income 255,447,607 184,654,465 2. Cash Paid (3,773,353,009) (4,169,742,469) 2.1 Interest Expense (2,184,026,904) (2,854,635,150) 2.2 Staff Expense (374,134,234) (318,195,338) 2.3 Office Administration Expenses (418,480,394) (367,851,117) 2.4 Income Tax Paid (640,907,607) (495,959,297) 2.5 Other Expenses (155,803,871) (133,101,567) Cash Flow before Changes in Working Capital 1,477,683,847 881,288,627 (Increase)/Decrease in Current Assets 1. (Increase)/Decrease in Money at Call & Short Notice – – 2. (Increase)/Decrease in Short-Term Investments (1,006,916,978) 1,625,900,558 3. (Increase)/Decrease in Loan & Advances and BP (7,581,019,726) (4,954,988,770) 4. (Increase)/Decrease in Other Assets (105,402,703) (299,431,848) Increase/(Decrease) in Current Liabilities 1. Increase/(Decrease) in Deposit 7,714,364,360 8,878,185,933 2. Increase/(Decrease) in Certificate of Deposit – – 3. Increase/(Decrease) in Short-Term Borrowing 402,360,000 – 4. Increase/(Decrease) in Other Liabilities (235,667,183) 925,566,343 Total Cash Flow from Operating Activities 665,401,618 7,056,520,844 B. Cash flow from Investing Activities 1. Purchase of Shares & Debentures – 1,200,000 2. Proceeds from Sale of Shares & Debentures – – 3. Purchase of Fixed Assets (174,531,212) (198,493,378) 4. Proceeds from Sale of Fixed Assets 147,590 31,225,467 5. (Increase)/Decrease in Long-Term Investments (393,314,276) (1,744,399,402) 6. Proceeds from Sale of Non-Banking Assets – – 7. Interest Income from Long-Term Investments 321,491,622 478,196,129 8. Dividend Received 2,393,293 482,904 9. Others (Refund of Last Year Dividend Income of R.M.D.C.) (385,320) – Total Cash flow from Investing Activities (244,198,304) (1,434,188,279) C. Cash flow from Financing Activities 1. Increase/(Decrease) in Long Term borrowings (Bond, Debentrues, etc) 468,845,000 (782,000,000) 2. Increase/(Decrease) in Share Capital – 65,261 3. Increase/(Decrease) in Share Premium – 3,774,227 4 Share Application Money Received – – 5 Dividend Paid (41,659,568) (560,089,641) 6 Interest in Borrowing Paid (2,713,946) (36,802,711) 7 Increase/(Decrease) in Refinance / facilities received from NRB – – Total Cash flow from Financing Activities 424,471,486 (1,375,052,864) D. Income / Loss from change in exchange rate in Cash & Bank Balance 6,812,856 (6,836,346) E. Current Year's Cash Flow from all activities 852,487,656 4,240,443,355 F. Opening Balance of Cash & Bank Balances 10,363,306,307 6,122,862,952 G. Closing Balance of Cash & Bank Balances 11,215,793,963 10,363,306,307

19th Annual Report | 15 | Share Capital and Shareholding As on 31 Ashadh 2070 (15 July 2013) Schedule 4.1 Particulars Current Year Rs. Previous Year Rs. 1. Share Capital 1.1 Authorized Capital 2,000,000,000 2,000,000,000 A) 18,400,000 nos. of Ordinary Shares of Rs. 100 each 1,840,000,000 1,840,000,000 (Previous 18,400,000 nos. of Ordinary Shares of Rs. 100 each) B) 1,600,000 nos. of 7% Cumulative Convertible 160,000,000 160,000,000 Preference Share of Rs.100 each 1.2 Issued Capital 1,761,126,410 1,391,635,700 A) 16,011,264 nos. of Ordinary Shares of Rs. 100 each 1,601,126,410 1,231,635,700 (Previous 12,316,357 nos. of Ordinary Shares of Rs. 100 each) B) 1,600,000 nos. of 7% Cumulative Convertible 160,000,000 160,000,000 Preference Share of Rs. 100 each 1.3 Paid up Capital 1,761,126,410 1,391,635,700 A) 16,011,264 nos. of Ordinary Shares of Rs. 100 each 1,601,126,410 1,231,635,700 (Including 13,213,610 Bonus Shares fully paid) (Previous 12,316,357 nos. of Ordinary Shares of Rs. 100 each) B) 1,600,000 nos. of 7% Cumulative Convertible 160,000,000 160,000,000 Preference Share of Rs.100 each 1.4 Propose Bonus Share 160,112,641 369,490,710 1.5 Calls in Advance – – Total (1.3 + 1.4 + 1.5) 1,921,239,051 1,761,126,410

Detail of Share Ownership

Current Year Rs. Previous Year Rs. Particulars % Share Capital Share Capital % A. Local Ownership 80.00 1,279,722,210 984,401,700 80.00 1.1 Nepal Government – – – – 1.2 'A' Class Licensed Institutions – – – – 1.3 Other Licensed Institutions – – – – 1.4 Other Institutions 10.73 171,724,300 129,321,700 10.50 1.5 Individual 69.27 1,107,997,910 855,080,000 69.50 1.6 Others – – – – B. Foreign Ownership 20.00 321,404,200 247,234,000 20.00 TOTAL 100 1,601,126,410 1,231,635,700 100

Detail of Shareholders holding more than 0.5% of the Share Capital is as under : Name & Address % Amount in Rs. Name & Address % Amount in Rs. Sh. B.K. Shrestha, Sanepa Lalitpur 9.20 147,328,600 Sh. Kul Bir Singh Tuladhar, Tripureshwor, Ktm 1.01 16,092,800 M/s Snow Lion Hotel P. Ltd., Bagbazar Ktm 9.33 149,330,000 M/s Punjab National Bank, India 20.00 321,404,200 Sh. Maitra Dev Pathak, Kamalpokhari, Ktm 5.82 93,218,400 Ms. Roma Pradhan, Gyaneshwor - 33, Ktm 0.64 10,320,700 Sh. Radha Shrestha, Tapahiti Lalitpur 8.49 135,857,800 Sh. Pratik Kayastha, Baluwatar, Kathmandu 0.81 13,000,300 Sh. Nepal Krishna Shrestha, Tahachal, Ktm 9.09 145,608,800 Sh. Arun Man Sherchan, Gairidhara, Ktm 3.83 61,395,200 Sh. Shanta Dev Pathak, Kamalpokhari, Ktm 2.66 42,639,300

| 16 | 19th Annual Report Reserve and Surplus As on 31 Ashadh 2070 (15 July 2013) Schedule 4.2

Particulars Current Year Rs. Previous Year Rs. 1 General Reserve 1,615,790,514 1,021,566,514 2 Capital Reserve – – 2.1 Share Premium 18,555,127 18,555,127 3 Capital Redemption Reserve 140,000,000 140,000,000 4 Capital Adjustment Reserve 367,147,000 367,147,000 5 Other Reserve a. Reserve for contingencies – – b. Bank Development Fund – – c. Dividend Equlization Fund – – d. Debenture Redemption Reserve 46,885,000 300,000,000 e. Assets Revaluation Fund – – f. Deferred Tax Reserve 99,453,409 73,779,764 g. Other free reserves 30,000,000 30,000,000 h. Investment Adjustment Reserve 3,475,866 3,475,866 i. Others 1,225,808 1,225,808 6 Retained Profit 559,466,358 437,523,859 7 Exchange Equalization Reserve 24,606,539 22,902,539 TOTAL 2,906,605,621 2,416,176,477

Debenture and Bond As on 31 Ashadh 2070 (15 July 2013) Schedule 4.3 Particulars Current Year Rs. Previous Year Rs. 300,000 nos. of 8% Unsecured Debenture of Rs. 1,000 each 468,845,000 – (Issued on 14/06/2013 and Maturing on 13/06/2023) (Redemption Reserved till Balance sheet date Rs. 46,884,500) TOTAL 468,845,000 –

Loans and Borrowing As on 31 Ashadh 2070 (15 July 2013) Schedule 4.4 Particulars Current Year Rs. Previous Year Rs. A. Local 1. Nepal Government – – 2. Nepal Rastra Bank (Refinance Loan) – – 3. Repo Obligation – – 4. Inter-bank & Financial Institutions – – 5. Other Body Corporates – – 6. Others – – TOTAL OF (A) – – B. Foreign 1. Banks 402,360,000 – 2. Others – – TOTAL OF (B) –– GRAND TOTAL (A+B) 402,360,000 –

19th Annual Report | 17 | Deposit Liabilities As on 31 Ashadh 2070 (15 July 2013)

Schedule 4.5

Particulars Current Year Rs. Previous Year Rs.

1 Non-interest bearing deposits A. Current Deposits 8,099,050,980 6,098,254,263 1. Local Currency 7,980,816,862 6,019,885,766 1.1 Nepal Government 2,713,760,186 2,271,494,507 1.2 'A' Class Licensed Institutions 115,371,517 103,767,174 1.3 Other Licensed Financial Institutions 325,917,824 58,257,543 1.4 Other Body Corporates 4,168,492,315 3,172,718,319 1.5 Individuals 295,288,183 276,612,281 1.6 Others 361,986,837 137,035,943 2. Foreign Currency 118,234,118 78,368,496 2.1 Nepal Government – – 2.2 'A' Class Licensed Institutions – – 2.3 Other Licensed Financial Institutions – – 2.4 Other Body Corporates 117,387,451 78,119,240 2.5 Individuals 846,667 249,257 2.6 Others – – B. Margin 495,889,582 451,737,361 1. Staff earnest money – – 2. Security margin 248,553,490 214,995,062 3. LC margin 247,336,092 236,742,300 C. Others 199,923,193 227,177,220 1. Local currency 166,618,507 198,229,352 1.1 Financial Institutions – – 1.2 Other Body Corporates 9,914,329 9,876,579 1.3 Individual 156,704,178 188,352,772 2. Foreign currency 33,304,686 28,947,868 2.1 Financial Institutions – – 2.2 Other Body Corporates 33,304,686 28,947,868 2.3 Individual – – Total Non-interest Bearing Deposit 8,794,863,755 6,777,168,844 2. Interest Bearing Deposits A. Saving Deposit 21,067,485,936 17,269,289,330 1. Local Currency 20,976,829,773 17,184,503,729 1.1 Body Corporate – – 1.2 Individual 20,870,163,859 17,052,096,032 1.3 Others 106,665,914 132,407,697

contd..

| 18 | 19th Annual Report Deposit Liabilities As on 31 Ashadh 2070 (15 July 2013) Schedule 4.5

Particulars Current Year Rs. Previous Year Rs.

2. Foreign Currency 90,656,163 84,785,602 2.1 Body Corporate – – 2.2 Individual 90,656,163 84,785,602 2.3 Others – – B. Fixed Deposit 14,104,779,337 13,007,478,505 1. Local Currency 14,004,538,594 12,914,498,305 1.1 Body Corporate 6,739,015,534 6,460,375,635 1.2 Individual 6,438,952,555 5,781,808,441 1.3 Others 826,570,505 672,314,229 2. Foreign Currency 100,240,743 92,980,200 2.1 Body Corporate 100,240,743 92,000,625 2.2 Individual – 979,575 2.3 Others – – C. Call Deposit 13,753,335,604 12,952,163,592 1. Local Currency 10,608,858,179 10,902,394,131 1.1 'A' Class Licensed Institution – – 1.2 Other Licensed Institutions 1,333,608,397 2,828,572,256 1.3 Other Body Corporates 8,031,721,636 6,224,049,699 1.4 Individual 369,605,154 1,262,465,889 1.5 Others 873,922,992 587,306,287 2. Foreign Currency 3,144,477,425 2,049,769,460 2.1 'A' Class Licensed Institution – 447,037 2.2 Other Licensed Institutions – – 2.3 Other Body Corporates 3,142,568,963 2,047,518,750 2.4 Individual 1,908,462 1,803,673 2.5 Others – – D. Certificate of Deposits –– 1. Body Corporate – – 2. Individual – – 3. Others – – Total Interest Bearing Deposits 48,925,600,877 43,228,931,427 TOTAL DEPOSITS 57,720,464,632 50,006,100,272

19th Annual Report | 19 | Bills Payable As on 31 Ashadh 2070 (15 July 2013) Schedule 4.6

Particulars Current Year Rs. Previous Year Rs. 1 Local Currency 82,133,541 411,017,944 2 Foreign Currency 310,923,361 281,380,872 TOTAL 393,056,902 692,398,816

Other Liabilities As on 31 Ashadh 2070 (15 July 2013) Schedule 4.7

Particulars Current Year Rs. Previous Year Rs. 1 Pension / Gratuity Fund (Provision) 256,337,920 168,662,869 2 Staff Provident Fund – – 3 Staff Welfare Fund – – 4 Staff Bonus 210,098,670 155,803,871 5 Interest Payable on Deposits 23,805,498 32,694,061 6 Interest Payable on Borrowings – – 7 Unearned Discount/Commission – – 8 Sundry Creditors 307,275,094 286,856,352 9 Branch Adjustment Account 6,511,258 9,536,092 10 Deferred Tax Liabilities – – 11 Unpaid Dividend 29,962,170 40,974,858 12 Others a) Agency Account 28,479,024 18,730,799 b) Interest on Debenture 2,107,409 777,328 c) Remittance Payable 95,427,692 104,927,791 d) Debenture Matured – 6,765,000 e) Audit Fee 225,000 200,000 f) Others 124,226,805 71,454,109 TOTAL 1,084,456,540 897,383,129

Cash in Hand As on 31 Ashadh 2070 (15 July 2013) Schedule 4.8

Particulars Current Year Rs. Previous Year Rs. 1 Local Currency (Including Coins) 1,709,864,092 1,688,388,398 2 Foreign Currency 13,344,893 12,603,372 TOTAL 1,723,208,985 1,700,991,770

| 20 | 19th Annual Report Balance with Nepal Rastra Bank As on 31 Ashadh 2070 (15 July 2013) Schedule 4.9

Foreign Currency Current Year Previous Particulars Local Currency INRs. Convertible Total Rs. Year Rs. 1. Nepal Rastra Bank

a. Current Account 8,161,293,719 – 43,796,709 43,796,709 8,205,090,428 8,159,753,523

b. Others – – – – – –

Total 8,161,293,719 – 43,796,709 43,796,709 8,205,090,428 8,159,753,523

Balance as per Balance Certificate Rs. 10,265,800,253 (Previous Year Rs. 12,649,611,238) and the difference amount is reconciled.

Balance with Other Bank & Financial Institutions As on 31 Ashadh 2070 (15 July 2013)

Schedule 4.10

Foreign Currency Current Year Previous Particulars Local Currency INRs. Convertible Total Rs. Year Rs. 1. Other Local 252,917,598 – 73,280 73,280 252,990,878 144,364,387 Licensed Institutions a. Current Account 252,917,598 – 73,280 73,280 252,990,878 144,364,387 b. Others – – – – – – 2. Foreign Banks – 678,699,955 355,803,717 1,034,503,672 1,034,503,672 358,196,627 a. Current Account – 678,699,955 355,803,717 1,034,503,672 1,034,503,672 358,196,627 b. Others – – – – – – Total 252,917,598 678,699,955 355,876,997 1,034,576,952 1,287,494,550 502,561,014 Balance as per Balance Certificate Rs. 1,781,878,158 (Previous Year Rs. 1,180,092,950) and the difference amount is reconciled.

Money at Call & Short Notice As on 31 Ashadh 2070 (15 July 2013) Schedule 4.11

Particulars Current Year Rs. Previous Year Rs. 1 Local Currency – – 2 Foreign Currency – – TOTAL – –

19th Annual Report | 21 | Investments As on 31 Ashadh 2070 (15 July 2013) Schedule 4.12

Purpose Current Year Previous Year Particulars Trading Others Rs. Rs. 1. Nepal Government Treasury Bills – 4,126,508,708 4,126,508,708 3,119,591,730 2. Nepal Government Saving Bonds – – – – 3. Nepal Government Other Securities – 2,861,800,911 2,861,800,911 2,949,284,635 4. Nepal Rastra Bank Bonds – – – – 5. Foreign Securities – – – – 6. Local Licensed Institutions – – – – 7. Foreign Banks – 2,251,300,000 2,251,300,000 1,685,575,000 8. Corporate Shares – 25,848,800 25,848,800 25,848,800 9. Corporate Bond & Debenture – – – 84,927,000 10. Other Investments – – – – Total Investments – 9,265,458,419 9,265,458,419 7,865,227,165 Provision for Investment in Shares – – (1,600,000) (1,600,000) NET INVESTMENTS – – 9,263,858,419 7,863,627,165

Investments in Shares, Debentures and Bonds As on 31 Ashadh 2070 (15 July 2013) Schedule 4.12(ka)

Previous Year Particulars Cost Market Value Provision Rs. 1. Investments in Shares 1.1 Rural Microfinance Development Centre Ltd. 3,120,000 NA – 3,120,000 (31,200 shares of Rs. 100 each) 1.2 Nirdhan Utthan Bank Ltd. 12,793,300 62,850,200 – 12,793,300 (224,465 shares of Rs. 100 each including 96,532 bonus shares) 1.3 Credit Information Center Ltd. 1,235,500 NA – 1,235,500 (30,499 shares of Rs. 100 each) including 18,144 bonus shares) 1.4 Taragaon Regency Hotel Ltd.* 5,000,000 5,000,000 1,600,000 5,000,000 (50,000 shares of Rs. 100) 1.5 Nepal Clearing House 2,500,000 NA – 2,500,000 (25,000 shares of Rs. 100) 1.6 National Banking Training Institute 1,200,000 NA – 1,200,000 (12,000 shares of Rs. 100) 2. Investment in Debentures 2.1 NEA Bonds – – – 84,927,000 (84,927 units of Bond of Rs. 1 000 each) Total Investments 25,848,800 – – 110,775,800 3. Provision 3.1 Upto last year (1,600,000) (1,600,000) 3.2 This year – – Total Provision (1,600,000) (1,600,000) NET INVESTMENTS 24,248,800 – – 109,175,800 * Taragaon Regency Hotel Ltd. has not declared any dividend for last three years.

| 22 | 19th Annual Report Held for Trading

As on 31 Ashadh 2070 (15 July 2013) Schedule 4.12.1

This Year Last Year This Year Profit/(Loss) Last Year Cost Market Price Market Price Amount Profit/(Loss) Particulars Price (A) (B) (B-A) Amount Remarks 1. Nepal Government Treasury Bills – – – – – – 2. Nepal Government Saving Bonds – – – – – – 3. Nepal Government Other Securities – – – – – – 4. Nepal Rastra Bank Bonds – – – – – – 5. Foreign Securities – – – – – – 6. Local Licensed Institution's Shares – – – – – – 7. Local Licensed Institution's Debenture & Bond –––––– 8. Corporate Shares, Debenture & Bond –––––– 9. Foreign Bank Placement – – – – – – 10. Inter Bank Lending 11. Other Investments – – – – – – Total Investments – – – – – –

Held to Maturity As on 31 Ashadh 2070 (15 July 2013) Schedule 4.12.2 Last Amount Loss Amount This Year Cost up to This Addition to Profit/(Loss) Last Year Price Year This Year Amount Profit/(Loss) Particulars (A) (B) (C) (A-B-C) Amount Remarks 1. Nepal Government Treasury Bills 4,126,508,708 – – – – – 2. Nepal Government Saving Bonds – – – – – – 3. Nepal Government Other Securities 2,861,800,911 – – – – – 4. Nepal Rastra Bank Bonds – – – – – – 5. Foreign Securities – – – – – – 6. Local Licensed Institution's Shares –– – – –– 7. Local Licensed Institution's Debenture & Bond – – – – – – 8. Corporate Shares, Debenture & Bond –– – – –– 9. Foreign Bank Placement 2,251,300,000 – – – – – 10.Other Investments – – – – – – Total Investments 9,239,609,619 – – – – –

19th Annual Report | 23 | Available for Sale As on 31 Ashadh 2070 (15 July 2013) Schedule 4.12.3

This Year Last Year This Year Adustment Market Market Fund Last Year Cost Price Price Amount Profit/(Loss) Particulars Price (A) (B) (B-A) Amount Remarks 1. Nepal Government Treasury Bills – – – – – – 2. Nepal Government Saving Bonds – – – – – – 3. Nepal Government Other Securities – – – – – – 4. Nepal Rastra Bank Bonds – – – – – – 5. Foreign Securities – – – – – – 6. Local Licensed Institution's Shares – – – – – – 7. Local Licensed Institution's – – – – – – Debenture & Bond 8. Corporate Shares, 25,848,800 – 67,850,200 – – (Includes extra Provision Debenture & Bond Rs. 1,600,000) 9. Foreign Bank Placement – – – – – – 10. Other Investments – – – – – – Total Investments 25,848,800 – 67,850,200 – – –

| 24 | 19th Annual Report Rs. Year Previous Schedule 4.13 Schedule 36,616,831,527 35,910,974,673 Rs. 44,197,762,941 43,393,187,065 Current Year Bills Purchased/Discounted Total Domestic Foreign Total 43,732,196,15543,732,196,155 548,079 548,079 188,819,935 189,368,014 188,819,935 43,921,564,169 36,309,338,831 189,368,014 43,921,564,169 36,309,338,831 44,008,394,927 548,079 188,819,935 189,368,014 43,205,712,731 542,598 186,931,736 187,474,334 1,139,659,917 1,139,659,917 1,139,659,917 1,128,263,318 Advances 40,401,796,947 41,176,156,761 Domestic Uninsured Other Foreign Deprived Insured Loan & Advances and Provisioning Loan & Advances 2070 (15 July 2013) on 31 Ashadh As 3.3 Substandard ------3.1 Loan Pass 3.2 Restructure/Reshedule 259,327,099 1,615,6363.3 Substandard 3.4 Doubtful -3.5 - Loss - --46,3503.6 Provision Additional 259,327,099 1,615,636 - - -4.1 218,831,800 16,925,783 Loan Pass 5,204,565 408,999,580 - -4.3 - 11,396,599 Substandard -4.4 Doubtful - - 437,321,9624.5 Loss 218,878,150 -4.6 - Provision Additional - 5,204,565 5,481 99,212,934 - - 1,888,199 - 12,681,327 - - - - 259,327,099 1,893,680 345,221,689 - - 1,615,636 2,781,827 439,215,642 218,878,150 - - 363,093,388 99,212,934 19,353,644 - 360,684,843 - - - - 19,353,644 - 97,798 - - 99,212,934 5,224,988 - 218,878,150 2,310,747 - - 2,408,545 16,915,781 5,204,565 - 363,093,388 - - 19,353,644 5,224,988 93,750 315,534,412 99,212,934 5,224,988 - - 99,212,934 - - 99,212,934 - - - - - 19,353,644 - 99,212,934 18,275,302 5,224,988 249,561,473 2,088,340 Particulars 3. Loan loss Provision B. Loan Loss Provision Total 4. 2069 end upto Ashad Provision 4.2 Restructure/Reshedule - 16,925,783 774,359,814 11,396,599 - end 2069 upto Ashad Provision C. Total 802,682,196 Provision Back of D. Write the year for E. Provision - the year for Net Increase/Decrease 5,481F. - 12,727,677 (A-B)NET LOAN 687,938,805 1,888,199 2,781,827 1,893,680 93,750 - - 804,575,876 703,448,309 4,198,106 705,856,854 - 46,350 86,421,008 - 97,798 4,244,456 8,614,772 86,462,970 2,310,747 41,962 8,614,772 99,233,886 - 2,408,545 93,750 1,675,652,466 705,856,854 (92,317) 99,322,198 604,151,295 - (422,548) (92,317) - (514,865) (422,548) 98,719,021 88,312 (514,865) 101,705,558 98,807,333 - 252,054,097 - - - 93,750 1,775,987 - 88,312 150,348,539 (a) Pass Loan (a) Pass 2. Loan Non-Performing 2.1 Restructure/Reschedule 2.2 Substandard 2.3 Doubtful 2.4 Loss A. - Loan (1+2) Total - - 1,692,578,249 40,899,957,989 - - - - 276,198,772 - - 1,692,578,249 - - - - 6,462,543 - 276,198,772 10,409,130 - - 259,327,099 - - 6,462,543 - - 10,409,130 259,327,099 ------276,198,772 - - 307,492,696 - - - - 6,462,543 10,409,130 - 77,414,569 259,327,099 - 10,449,977 218,878,150 750,000 1. Loan Performing - 1,692,578,249 40,899,957,989

19th Annual Report | 25 | Security Wise Detail of Loans, Advances and Bills Purchases As on 31 Ashadh 2070 (15 July 2013) Schedule 4.13(Ka)

Particulars Current Year Rs. Previous Year Rs. A. Secured 44,197,762,941 36,616,831,527

1. Against Fixed/Movable Properties 43,119,359,856 35,798,417,297

2. Loan Against Guarantee Local Licensed Institutions – –

3. Against Government Guarantee 198,736,758 198,736,758

4. Against International Rated Bank's Guarantee – –

5. Against Export Document – –

6. Against Fixed Deposit Receipts 820,897,883 578,457,264

a) Own Fixed Deposit Receipts 820,897,883 578,457,264

b) Other Licensed Institutions' Fixed Deposit – –

7. Against Government Securities 12,818,802 3,591,092

8. Against Counter Guarantee – –

9. Against Personal Guarantee 2,496,538 2,499,708

10. Against Other Securities 43,453,104 35,129,408

B. Unsecured ––

TOTAL 44,197,762,941 36,616,831,527

| 26 | 19th Annual Report Rs. Year Previous Schedule 4.14 Schedule Current Year Rs. Office Equipment Others Assets Vehicles Machinery Building Upto Last Year This YearAddition Upto Last Year This YearAddition 47,560,785 - 21,269,020 4,756,079 Cost Total CostTotal Amortisation AmortisationToal Net Book Value 47,560,785 26,025,098 21,535,687 Detail of Computer Software - Finacle Computer Software Detail of

Fixed Assets Fixed 2070 (15 July 2013) on 31 Ashadh As e) Transfers Head Inter Cost (a + b c d e)Total c) Transfers Head Inter of Depreciation 34,777,087 181,069,047 161,958,565 330,514,330 17,740,571 – – 726,059,601 ( 3 + 4 5 6 7)Total 673,076,681 – – – – 22,783,715 410,407 72,851,059 45,975 79,623,878 109,350,837 346,573,310 – 631,182,801 – 547,925,679 410,407 45,975 – – 1. Cost a) Upto Last Year b) this Year Addition c) year the during Revaluation d) year the Sold during f) this year during Write off 2. Depreciation a) Upto Last Year b) this Year Addition Depreciation d) 32,807,231 write off 1,969,856 of Depreciation Total e) – 174,913,397 assets sold of Depreciation 3. 145,950,663 6,246,000 ( 1 - 2 ) Book Value 4. 302,054,668 Land 16,007,9025. – Capital WIP 17,350,7216. 32,832,627 – Leasehold Asset –7. Finacle Software (90,350) 673,076,681 389,850 10,828,788 1,164,584 603,271,888 – – 90,736,949 57,446,235 17,566,824 – 11,993,372 – 69,080,620 – 13,254,067 – 86,200,354 (1,442,382) 108,217,988 192,795,379 22,783,715 32,577,085 82,334,687 72,851,059 – 14,006,667 (85,785) – 221,163,493 79,623,878 1,557,357 (3,340,990) – 109,350,837 – 15,564,024 377,448,403 – 2,176,547 66,119,916 316,924,247 439,273,563 – – 286,786,038 (1,532,732) – 71,110,047 – (1,180,365) 377,448,403 – – 295,628,278 – (10,980,413) – (3,074,581) – (3,340,990) – (5,415,148) – – – – – – – (1,266,150) – (3,074,581) (5,635,809) – – – – – (4,950,083) – – – – 30,054,497 – 21,535,687 292,806,579 30,054,497 292,806,579 21,535,687 – 41,921,056 184,084,579 – 26,291,766 – – Particulars

19th Annual Report | 27 | Non Banking Assets As on 31 Ashadh 2070 (15 July 2013)

Schedule 4.15 Provisoning Name & Address of the Net Previous Party/Borrower Date of Transfer Amount of NBA % Amount Amount Year Rs. 1. NB Garments 04.06.2004 5,856,238 100 5,856,238 – 5,856,238 Bathnah VDC - 6, Simara 2. Daya Nanda & Kalpana Thapa 14.07.2011 45,930,349 100 45,930,349 – 45,930,349 Maharajgunj, Kathmandu

Total 51,786,587 51,786,587 – 51,786,587

Previous Year's Provisions – (51,786,587)

TOTAL 51,786,587 51,786,587 – –

| 28 | 19th Annual Report Other Assets As on 31 Ashadh 2070 (15 July 2013) Schedule 4.16

Particulars Current Year Rs. Previous Year Rs. 1. Stationeries Stock 13,016,012 12,828,361 2. Interest Receivable on Investments 35,502,506 56,745,878 3. Interest Receivable on Loans & Advances – – Interest Receivable on Loans & Advances 131,877,935 88,605,387 Less: Interest Suspense (131,877,935) (88,605,387) 4. Commission Receivables – – 5. Sundry Debtors 39,249,211 11,950,377 6. Staff Loans & Advances 981,205,270 806,111,780 7. Pre-paid Expenses 13,968,612 13,373,133 8. Cash in Transit 37,073 – 9. Others in Transit (including cheques) – – 10. Draft Paid Without Advices – – 11. Expenses to be Written -off – – 12. Branch Account – – 13. Deferred Tax Assets 99,453,409 73,779,764 14. Others – – Security Deposit 45,670,489 37,942,220 Misc. (Remittance Receivable) 9,025,627 114,563,720 TOTAL 1,237,128,209 1,127,295,233

Other Assets (Additional Details) As on 31 Ashadh 2070 (15th July, 2013) Schedule 4.16(ka)

Current Year Rs.

More than 1 Year More than Previous Year Particulars Up to 1 Year & upto 3 Years 3 Years Total Rs. 1. Interest Receivables on Loan 99,068,112 11,514,029 21,295,794 131,877,935 88,605,387 2. Draft Paid without Schedule – – – – – 3. Branch Account – – – – – 4. Domestic Foreign Agency A/c – – – – – TOTAL 99,068,112 11,514,029 21,295,794 131,877,935 88,605,387

19th Annual Report | 29 | Contingent Liabilities As on 31 Ashadh 2070 (15 July 2013)

Schedule 4.17

Particulars Current Year Rs. Previous Year Rs. 1. Claim Lodged but Not Accepted by the Bank – – 2. Letters of Credits 5,269,858,281 4,521,402,069 a. Maturity Value of Less Than Six Months 5,267,841,412 4,429,491,649 b. Maturity Value of More Than Six Months 2,016,869 91,910,420 3. Re-discounted Bills – – 4. Unexpired Guarantees 2,492,315,974 2,321,987,077 a. Bid Bond 207,106,451 168,408,882 b. Performance Bond 2,285,209,524 2,153,578,195 5. Share Money Against Investments in Shares – – 6. Forward Exchange Contracts – – 7. Bills on Collection 379,273,489 290,871,448 8. Acceptance and Endorsements 657,783,310 630,428,397 9. Underwriting Commitment – – 10. Irrevocable Loan Commitment 4,399,207,139 4,456,584,140 11. Guarantee Against Counter Guarantee of International Rated Bank 81,381,176 86,280,752 12. Advance Payment Guarantee 577,137,630 637,478,803 13. Financial Guarantees – – 14. Contigent Liability Against Income Tax 138,252,700 104,852,085 15. Others – – TOTAL 13,995,209,700 13,049,884,771

| 30 | 19th Annual Report Interest Income From 16th July 2012 to 15th July 2013 Schedule 4.18

Particulars Current Year Rs. Previous Year Rs.

A. Interest on Loans, Advances & Overdrafts 4,636,675,822 4,504,895,230 1. Loans & Advances 2,326,909,639 2,166,606,990 2. Overdrafts 2,309,766,183 2,338,288,240 B. Interest on Investments 274,945,912 428,294,810 1. Government Securities 248,262,702 420,444,071 a. Treasury Bills 68,451,858 257,502,294 b. Development Bonds 179,810,844 162,941,777 c. National Saving Bonds – – 2. Foreign Securities – – 3. Nepal Rastra Bank Securities – – 4. Debenture & Bond 4,625,572 6,581,843 5. Interest on Inter-bank Lending 22,057,638 1,268,896 a. Bank/Financial Institutions 22,057,638 1,268,896 b. Other Institutions – – C. Agency Balance 25,062,231 26,737,122 1. Local Banks/Financial Institutions – – 2. Foreign Banks 25,062,231 26,737,122 D. Money at Call & Short Notice 240,107 71,253 1. Local Banks/Financial Institutions – – 2. Foreign Banks 240,107 71,253 E. Others –– 1. Certificate of Deposits – – 2. Inter Bank/Financial Institution Loan – – 3. Others – – TOTAL 4,936,924,072 4,959,998,415

19th Annual Report | 31 | Interest Expenses From 16th July 2012 to 15th July 2013

Schedule 4.19

Particulars Current Year Rs. Previous Year Rs. A. Interest on Deposits 2,175,138,341 2,856,347,883 1. Fixed Deposits 1,039,130,300 1,629,008,229 1.1 Local Currency 1,036,968,040 1,627,500,110 1.2 Foreign Currency 2,162,260 1,508,119 2. Saving Deposits 719,674,812 601,093,286 2.1 Local Currency 718,366,390 599,585,167 2.2 Foreign Currency 1,308,422 1,508,119 3. Call Deposits 416,333,229 626,246,368 3.1 Local Currency 359,744,239 609,871,122 3.2 Foreign Currency 56,588,990 16,375,246 4. Certificate of Deposits – – B. Interest on Loans 4,044,027 16,986,799 1. Debenture & Bond 3,596,619 14,621,918 2. Loan from NRB – 2,343,055 3. Inter-Bank Loan 447,408 21,826 4. Other Organisation – – 5. Other Loan – – C. Others –– TOTAL 2,179,182,368 2,873,334,682

Commission and Discounts From 16th July 2012 to 15th July 2013

Schedule 4.20

Particulars Current Year Rs. Previous Year Rs. A. Bills Purchased & Discounted 16,968,313 3,748,586 1. Local 1,260,568 1,002,315 2. Foreign 15,707,745 2,746,271 B. Commission 219,123,108 198,583,750 1. Letter of Credits 47,315,444 37,216,798 2. Letter of Guarantees 43,548,757 43,219,400 3. Collection Fees 11,696,709 6,839,686 4. Remmittance Fees 70,549,686 75,836,219 5. Credit Card – – 6. Share Underwriting/Issue com. – – 7. Government Transaction 1,020,000 765,000 8. Exchange Commission – – 9. Batta 44,992,512 34,706,647 C. Others 30,729,493 31,237,465 TOTAL 266,820,914 233,569,801

| 32 | 19th Annual Report Other Operating Income From 16th July 2012 to 15th July 2013 Schedule 4.21

Particulars Current Year Rs. Previous Year Rs. 1. Safe Deposit Vault Rental Income 6,831,550 5,323,011

2. Credit Card Issue and Renewals – –

3. ATM Card Issue and Renewals 86,667,774 45,473,899

4. Telex / T.T. 12,618,676 10,981,157

5. Service Charges 89,873,080 73,791,372

6. Renewal Charges 11,905,232 10,283,107

7. Others 41,488,994 33,969,839

TOTAL 249,385,306 179,822,385

Exchange Gain/(Loss) From 16th July 2012 to 15th July 2013 Schedule 4.22

Particulars Current Year Rs. Previous Year Rs. A. Exchange Rate Difference 6,812,856 (6,836,346)

B. Foreign Exchange Trading (except batta) 92,092,513 116,515,667

TOTAL 98,905,369 109,679,321

Staff Expenses From 16th July 2012 to 15th July 2013 Schedule 4.23

Particulars Current Year Rs. Previous Year Rs.

1. Salary 259,932,190 223,155,703

2. Allowances 30,077,823 25,589,304

3. PF Contributions 24,776,614 20,628,104

4. Training 1,488,497 1,938,143

5. Uniform 5,804,142 2,452,121

6. Medical 1,405,498 1,157,100

7. Insurance 6,819,281 5,811,735

8. Gratuity 90,197,451 36,465,177

9. Others

a) Dashain Expenses 18,546,251 17,100,010

b) Leave Encashment 13,903,386 9,894,217

c) Leave Travel Assistance 8,858,152 7,858,390

TOTAL 461,809,285 352,050,004

19th Annual Report | 33 | Operating Expenses From 16th July 2012 to 15th July 2013 Schedule 4.24

Particulars Current Year Rs. Previous Year Rs. 1. House Rent 61,150,381 56,329,677 2. Electricity & Water 15,725,653 12,702,563 3. Repair & Maintenance – – A. Building 705,118 945,630 B. Vehicles 2,511,616 2,464,286 C. Others – – 4. Insurance Premium 31,013,595 20,595,395 5. Postage, Telex, Telephone, Fax 29,156,874 31,862,500 6. Office Equipment/Furniture & Maintenance 11,705,136 10,714,834 7. Traveling Expenses 9,746,432 9,047,580 8. Printing & Stationeries 18,115,316 15,550,975 9. Newspaper & Magazine 546,250 612,311 10. Advertisement 25,165,554 29,037,202 11. Legal Expenses 1,427,219 967,368 12. Donation 615,385 692,482 13. Board Expenses – – A. Meeting Fee 940,000 1,074,000 B. Other Expenses 2,584,193 2,081,026 14. Annual General Meeting Expenses 2,126,113 2,237,445 15. Audit Expenses – – A. Audit Fee 225,000 200,000 B. Other Expenses 881,875 588,985 16. Remmittance Expenses 26,325,660 15,276,945 17. Depreciation 66,119,916 71,110,047 18. Pre-operating Expenses Write Off – – 19. Debenture /Share Issue Expenses 1,967,275 233,366 20. TSA Fee and Expenses Reimbursement 25,557,498 26,008,204 21. Entertainment 7,361,997 6,163,013 22. Amortization 24,621,183 27,732,518 23. Security Expenses 29,601,999 27,273,767 24. Loan Insurance Premium – – 25. Commission & Discounts – – 26. Others A) Business Promotion 19,309,348 16,673,552 B) Consultancy Charges 456,689 3,614,802 C) Registration/Renewals 7,792,467 5,368,125 D) Misc. 10,894,331 9,554,283 E) Fuel & Lubricant 28,922,686 21,202,312 F) Assets Written Off 266,409 599,266 G) A.T.M. Related Expenses 14,062,574 11,587,408 H) Temporary Staff Wages 12,010,626 12,724,752 I) Software Contract Expenses 13,156,374 9,697,145 J) Electronic Cheque Clearing 2,781,280 – K) Loss on Sale of Non Banking Assets – – L) Branch Less Banking 294,230 617,534 M) Disaster Recovery Site 3,643,650 4,151,650 Total 509,487,902 467,292,948

| 34 | 19th Annual Report Provision for Possible Loss From 16th July 2012 to 15th July 2013 Schedule 4.25

Particulars Current Year Rs. Previous Year Rs. 1. Increase In Loan Loss Provision 98,807,333 252,054,098

2. Increase In Provision For Investment – –

3. Provision For Non-banking Assets – –

4. Provision Against Other Assets – –

Total 98,807,333 252,054,098

Gain/(Loss) from Non-Operating Activities From 16th July 2012 to 15th July 2013 Schedule 4.26

Particulars Current Year Rs. Previous Year Rs. 1. Gain/(Loss) on Sale of Investment – – 2. Gain/(Loss) on Sale of Assets (118,993) 19,840,865 3. Dividend – – A. Rural Development Banks 2,393,293 – B. Credit Information Center – 482,904 4. Subsidy Received From NRB – – A. Compensation of Branch Loss – – B. Interest Compensation – – C. Exchange Counters – – 5. Others A. House Rent 6,062,301 4,832,080 Total Gain / (Loss) 8,336,601 25,155,849

Write Back from Provision for Possible Loss From 16th July 2012 to 15th July 2013

Schedule 4.27

Particulars Current Year Rs. Previous Year Rs. 1. Write-back From Loan Loss Provision 88,312 150,348,539

2. Write-back From Provision for NBA – –

3. Write-back From Provision For Investment – –

4. Write-back From Other Provision – –

Total 88,312 150,348,539

19th Annual Report | 35 | Profit/(Loss) from Extra-Ordinary Transaction From 16th July 2012 to 15th July 2013

Schedule 4.28

Particulars Current Year Rs. Previous Year Rs. 1. Recovery of Loss Loan – – 2. Expenses for Retirement Package – – 3. Write off of Bad Loan (Schedule 4.28 ‘Ka’) 88,312 – 4. Other Income/Expenses – – TOTAL 88,312 –

Details of Loan Written Off From 16th July 2012 to 15th July 2013 Schedule 4.28(ka)

Nature of Basis of Sancitioning Action taken Amount Security & Valuation of Authority/ to Recover the S.No. Type of Loan Written off Amount Security Level Loan Remarks 1. Working Capital – 2. Project Finance – 3. Fixed Term Loan – 4. Personal Loan 88,312 5. Others – Total 88,312

Loans to Directors, CEO, Promoters, Employees and Shareholders holding more than 1% Share As on Ashad 31, 2070 (15th July 2013) Details of Loans & Advances including Bills Purchased and discounted provided to Directors, CEO, Promoters, Employees and Shareholders holding more than 1% shares (included in total loans & advances) and their undivided family members or Company in which such family members are the Managing Agent or Guarantor of such company is as under: Schedule 4.29 Upto Previous Year This Year Recovery Outstanding Addition Name of the borrower Principal Interest Principal Interest This Year Principal Interest

1. Directors – – – – – – – 2. Chief Executive – – – – – – – 3. Promoters – – – – – – – 4. Employee – – – – – – – 5. Shareholders – – – – – – – 6. Holding more than 1% share – – – – – – – Total – – – – – – – No Loans have been provided to any of the above mentioned group/person except the staff loans to employees under the staff loan schemes.

| 36 | 19th Annual Report Capital Adequacy Table As on Ashad 31, 2070 (15th July, 2013) Schedule 4.30 (Ka1) (Rs. in ‘000)

Particulars Current Year Rs. Previous Year Rs.

1.1 RISK WEIGHTED EXPOSURES 48,349,497 40,711,125 a. Risk Weighted Exposure for Credit Risk 44,793,263 37,792,502 b. Risk Weighted Exposure for Operational Risk 3,356,986 2,832,941 c. Risk Weighted Exposure for Market Risk 199,249 85,682 Adjustments under Pillar II Overall risk management policies and precedures are not satisfcatory. Add: 2% of RWE (6.4 a 9) 966,990 814,222 Add: RWE equvalent to reciprocal of capital charge of 2% of gross income. (6.4 a7) 517,558 – Add: …% of the total deposit due to insufficient liquid Assets (6.4 a6) Total Risk Weighted Exposures (after adjustment under Pillar II) 49,834,045 41,525,347 1.2 CAPITAL Core Capital (Tier 1) 4,639,762 3,990,926 a. Paid up Equity Share Capital 1,601,126 1,231,636 b. Proposed Bonus Equity Shares 160,113 369,491 c. Share Premium 18,555 18,555 d. Irredeemable Non- cumulative preference shares – – e. Statutory General Reserves 1,615,791 1,021,567 f. Retained Earnings 559,466 437,524 g. Reserve for Deferred Tax 99,453 73,780 h. Un-audited current year cumulative profit – – i. Debenture Redemption Reserve 46,885 300,000 j. Capital Adjustment Reserve 367,147 367,147 k. Capital Redemption Reserve 140,000 140,000 l. Other Free Reserve 31,226 31,226 m. Less: Goodwill – – n. Less: Miscellaneous Expenditure not written off – – o. Less: Investment in Equity in licensed Financial Institutions – – p. Less: Investment in Equity of Institutions with vested interests –– q. Less: Investment in Equity of institutions with excess of limits –– r. Less: Investments arising out of underwriting commitments – – s. Less: Reciprocal crossholdings – – t. Less: Other Deductions – – Adjustments under Pillar II Less: Shortfall in Provision (6.4 a 1) Less: Loans and Facilities extended to Related Parties and Restricted lending (6.4 a 2) Supplementary Capital (Tier 2) 1,137,920 583,827 a. Cumulative and/or Redeemable Preference Share 160,000 160,000 b. Subordinated Term Debt 421,960 – c. Hybrid Capital Instruments – – d. General Loan Loss provision 439,216 363,093 e. Investment Adjustment Reserve 3,476 3,476 f. Assets Revaluation Reserve – – g. Exchange Equalization Reserve 24,607 22,903 h. Additional Loan Loss Provision 88,661 34,355 i. Other Reserves – – Total Capital Fund (Tier I and II) 5,777,682 4,574,753 1.3 CAPITAL ADEQUACY RATIOS Tier 1 Capital to Total Risk Weighted Exposures 9.31 9.61 Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures 11.59 11.02

19th Annual Report | 37 | Risk Weighted Exposure For Credit Risk As on Ashad 31, 2070 (15th July, 2013) Schedule 4.30 (Kha) (Rs. in ‘000)

2070 Ashadh End Previous Year Book Specific Eligible Risk Risk Weighted Risk Value Provision CRM Net Value Weight (%) Exposures Net Weighted Balance Sheet Exposures (A) (A) (B) (C) (D=A-B-C) (E) (F = D x E) Value Exposures Cash Balance 1,723,209 - - 1,723,209 0% - 1,700,992 - Balance With Nepal Rastra Bank 8,205,090 - - 8,205,090 0% - 8,159,754 - Gold - - - - 0% - - - Investment in Nepalese Government Securities 6,988,310 - - 6,988,310 0% - 6,068,876 - All other Claims on Government of Nepal 425,661 - - 425,661 0% - 318,183 - Investment in Nepal Rastra Bank securites - - - - 0% - - - All other Claims on Nepal Rastra Bank - - - - 0% - - - Claims on Foreign Government Securities (ECA Rating 0-1) - - - - 0% - - - Claims on Foreign Government Securities (ECA- 2) - - - - 20% - - - Claims on Foreign Government Securities (ECA-3) - - - - 50% - - - Claims on Foreign Government Securities (ECA-4-6) - - - - 100% - - - Claims on Foreign Government Securities (ECA-7) - - - - 150% - - - Claims On BIS MIFECBEC and on Multilateral Development Banks (MDB's) recognized by the framework - - - - 0% - - - Claims on Other Multilateral Development Banks - - - - 100% - - - Claims on Public Sector Entity (ECA 0-1) - - - - 20% - - - Claims on Public Sector Entity (ECA 2) - - - - 50% - - - Claims on Public Sector Entity (ECA 3-6) - - - - 100% - - - Claims on Public Sector Entity (ECA 7) - - - - 150% - - - Claims on domestic banks that meet capital adequacy requirements 1,245,923 - - 1,245,923 20% 249,185 872,460 174,492 Claims on domestic banks that do not meet capital adequacy requirements 21,697 - - 21,697 100% 21,697 22,072 22,072 Claims on Foreign Bank (ECA Rating 0-1) 2,613,640 - - 2,613,640 20% 522,728 1,904,615 380,923 Claims on Foreign Bank (ECA Rating 2) - - - - 50% - - - Claims on Foreign Bank (ECA Rating 3-6) - - - - 100% - - - Claims on Foreign Bank (ECA Rating 7) - - - - 150% - - - Claims on foreign bank incorporated in SAARC region operating with a buffer of 1% above their respective regulatory capital requirement 678,700 - - 678,700 20% 135,740 154,038 30,808 Claims on Domestic Corporates 20,540,162 - 833,717 19,706,445 100% 19,706,445 13,945,095 13,945,095 Claims on Foreigns Corporates (ECA 0-1) - - - - 20% - - - Claims on Foreigns Corporates (ECA 2) - - - - 50% - - - Claims on Foreigns Corporates (ECA 3-6) - - - - 100% - - - Claims on Foreigns Corporates (ECA 7) - - - - 150% - - - Regulatory Retail Portfolio (Not Overdue) 11,209,934 - - 11,209,934 75% 8,407,451 10,333,369 7,750,027 Claims fulfilling all criterion of regulatory retail except granularity - - - - 100% - - - Claims secured by residental properties 4,639,020 - - 4,639,020 60% 2,783,412 3,783,909 2,270,345 Claims not fully secured by residental properties - - - - 150% - - - Claims secured by residental properties (overdue) 14,996 14,996 - - 100% - - - Claims secured by Commercial real estate 3,897,511 - - 3,897,511 100% 3,897,511 4,874,535 4,874,535 Past due claims (except for claim secured by residential properties) 261,203 261,203 - - 150% - - - High Risk claims (Venture capital private equity investments personal loans and credit card receivables) 2,194,647 500 - 2,194,147 150% 3,291,221 1,721,117 2,581,676 Investment in equity of institutions listed in the stock exchange 17,793 - - 17,793 100% 17,793 102,720 102,720 Investment in equity of institutions not listed in the stock exchange 8,056 1600 - 6,456 150% 9,683 6,456 9,684 Staff Loan Secured by Residential Property 448,463 448,463 60% 269,078 298682 179,209 Interest Receivable/Claim on Government Securities 28,967 28,967 0% - 38,564 - Cash in transit and other cash items in process of collection 37 - - 37 20% 7 - - Other Assets 1,384,308 - 122,826 1,261,482 100% 1,261,482 1,323,093 1,323,093 TOTAL 66,547,326 278,299 956,543 65,312,484 40,573,432 55,628,530 33,644,678 Contd……

| 38 | 19th Annual Report Risk Weighted Exposure For Credit Risk As on Ashad 31, 2070 (15th July, 2013) Schedule 4.30 (Kha) (Rs. in ‘000)

2070 Ashadh End Previous Year Gross Book Specific Eligible Risk Risk Weighted Risk Value Provision CRM Net Value Weight (%) Exposures Net Weighted Off Balance Sheet Exposures (B) (A) (B) (C) (D=A-B-C) (E) (F = D x E) Value Exposures Revocable Commitments – – – – 0% – – – Bills under Collection 379,273 – – 379,273 0% – 290,871 – Forward Exchange Contract Liabilities – – – – 10% – – – LC Commitments with Original Maturity Up to 6 months (domestic) 5,267,841 – 549,725 4,718,116 20% 943,623 4,183,906 836,781 ECA Rating 0-1 – – – – 20% – – – ECA Rating 2 – – – – 50% – – – ECA Rating 3-6 – – – – 100% – – – ECA Rating 7 – – – – 150% – – – LC Commitments with Original Maturity Over 6 months (domestic) 2,017 – 334 1,683 50% 841 69,501 34,751 ECA Rating 0-1 – – – – 20% – – – ECA Rating 2 – – – – 50% – – – ECA Rating 3-6 – – – – 100% – – – ECA Rating 7 – – – – 150% – – – Bid Bond, Performance Bond and Counter guarantee (domestic) 2,573,697 – 194,592 2,379,105 50% 1,189,553 2,224,875 1,112,438 ECA Rating 0-1 – – – – 20% – – – ECA Rating 2 – – – – 50% – – – ECA Rating 3-6 – – – – 100% – – – ECA Rating 7 – – – – 150% – – – Underwriting commitments – – – – 50% – – – Lending of Bank's Securities or Posting of Securities as Collateral – – – – 100% – – – Repurchase Agreements Assets sale with recourse (including repo/reverse repo) – – – – 100% – – – Advance Payment Guarantee 577,138 – 33,477 543,661 100% 543,661 605,877 605,877 Financial Guarantee – – – – 100% – – – Acceptances and Endorsements 657,783 – 133,725 524,058 100% 524,058 561,808 561,808 Unpaid portion of Partly Paid Shares and Securities – – – – 100% – – – Irrevocable Credit Commitments (Short Term) 4,399,207 – – 4,399,207 20% 879,841 4,456,584 891,317 Irrevocable Credit Commitments (Long Term) – – – – 50% – – – Other Contingent Liabilities 138,253 – – 138,253 100% 138,253 104,852 104,852 Unpaid Guarantee Claims – – – – 200% – – – TOTAL 13,995,210– 911,853 13,083,357 4,219,830 12,498,274 4,147,823 Total RWE for Credit Risk Before Adjustment (A)+ (B) 80,542,536 278,299 1,868,396 78,395,841 44,793,263 68,126,804 37,792,502 Adjustments under Pillar II – – – – – – – Add: 10% of the loan and facilities in excess of Single Obligor limits (6.4 a 3) – – – – – – – Add: 1% of the contract(sale) value in case of the sale of credit with recourse (6.4 a 4) – – – – – – – Total RWE for credit Risk (After Bank's Adjustment of Pillar II) 44,793,263 68,126,804 37,792,502

19th Annual Report | 39 | Total Contd…… (Rs. in ‘000) (Rs. (i) Bank Schedule 4.30 (Ga) Schedule Sec/G’tee of Foreign (h) MDBs G’tee of (g) Banks G’tee of Domestic (f) of Other Sec/G’tee Sovereigns (e) Nepal G’tee of Gpvt. of (d) Securities Govt. & NRB (c) Gold (b) Deposits Banks/FI with Other ––––––– –––––– (a) Deposits with Bank Eligible Credit Risk Mitigants Eligible Credit 2070 (15 July 2013) on 31 Ashadh As Investments in Equity of Institutions Listed in The Stock Exchange Listed in The Institutions in Equity of Investments Attachment) (as Per Assets Other Total – – 122,826 – – – – 956,543 – – – – – – – – – – – – – – – – – – 122,826 – – 956,543 Balance Sheet Exposures Sheet Balance (ECA-2) Securities Government in Foreign Investment (ECA-3) Securities Government in Foreign Investment (ECA-4-6) Securities Government in Foreign Investment (ECA-7) Securities Government in Foreign Investment Banks Development Multilateral on Other Claims (ECA 0-1) Sector Entity on Public Claims (ECA 2) Sector Entity on Public Claims – (ECA 3-6) Sector Entity on Public Claims – – (ECA 7) Sector Entity on Public Claims Capital Banks That Meet on Domestic Claims – RequirementsAdequacy – Capital Meet Not Banks That do on Domestic Claims – – – RequirementsAdequacy 0-1) Bank (ECA Rating on Foreign Claims – – – 2) Bank (ECA Rating on Foreign Claims – 3-6) Bank (ECA Rating on Foreign Claims – – 7) Bank (ECA Rating on Foreign Claims – – –Claims On Domestic Corporates – – (ECA 0-1) – Corporates on Foreign Claims – (ECA 2) – Corporates on Foreign Claims – – – (ECA 3-6) Corporates on Foreign Claims – – (ECA 7) – Corporates on Foreign Claims – Overdue) (Not Regulatory Retail Portfolio – – – (Overdue) –Regulatory Retail Portfolio – – – (With Condition) Properties by Residental Secured Claims – – – – Condition) (Without Properties – by Residental Secured Claims – – Properties by Residential Secured Claims of Portion Unsecured – – – – – (Overdue) Properties by Residential Secured Claims 833,717 – – – Real Estate – by Commercial Secured Claims – – – – – Due Claims Past – – – – – Properties) – by Residential Claim Secured for –(Except – – – – – – Risk Claims High – – – – – Capital, Private Equity Investments, –(Venture – – – – – – Receivables) Card Credit and Loans Personal – – – – – – Stock Exchange Listed in The Not in Institutions Equity of Investments – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 833,717 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Credit Exposures

| 40 | 19th Annual Report Total (Rs. in ‘000) (Rs. (i) Bank Schedule 4.30 (Ga) Schedule Sec/G’tee of Foreign (h) MDBs G’tee of (g) Banks G’tee of Domestic (f) of Other Sec/G’tee Sovereigns (e) Nepal G’tee of Gpvt. of (d) Securities Govt. & NRB (c) Gold (b) Deposits Banks/FI with Other ––––––– –––––– (a) 194,592 – – – – – – – – 194,592 549,725 – – – – – – – – 549,725 Deposits with Bank 334 – – – – – – – – 334 Eligible Credit Risk Mitigants Eligible Credit 2070 (15 July 2013) on 31 Ashadh As LC Commitments With Original Maturity Over 6 months (domestic) Over 6 months Maturity With Original LC Commitments Off Balance Sheet Exposure Liabilities Contract Exchange Forward (domestic) Up to 6 months Maturity With Original LC Commitments – – – – – – as collateral Securities of or Posting Bank's Securities of Lending – – – – – – – – – – – – – – ECA Rating 0-1 ECA Rating 2 ECA Rating 3-6 ECA Rating 7 ECA Rating (domestic) Guarantee Counter Bond Performance Bond, Bid 0-1 ECA Rating 2 ECA Rating 3-6 ECA Rating 7 ECA Rating Commitments Underwriting – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – ECA Rating 0-1 ECA Rating 2 ECA Rating 3-6 ECA Rating 7 ECA Rating – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Repurchase Agreements, Assets sale with recourse Assets Agreements, Repurchase repo) repo/reverse (including Guarantee Payment Advance Guarantee Financial Endorsements and Acceptances Securities and Shares Paid Partly of Portion Unpaid Commitments Credit Irrevocable Liabilities Contingent Other Total TotalGrand – 33,477 – 133,725 – – – – – – – – – – – – – – – – 1,868,396 – – – – 911,853 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 33,477 – 133,725 – – – – – – – – – – – – – 1,868,396 – 911,853 Credit Exposures

19th Annual Report | 41 | Risk Weighted Exposure For Operational Risk As on 31 Ashadh 2070 (15 July 2013) Schedule 4.30 (Gha) (Rs. in ‘000)

Previous Financial Year of Ashadh end F.Y. F.Y. F.Y. 2069 Ashadh Particulars (2066/067) (2067/068) (2068/069) end Net Interest Income 1,529,661 1,795,151 2,086,664 Commission and Discount Income 208,123 203,468 233,570 Other Operating Income 142,311 148,062 179,882 Exchange Fluctuation Income 47,880 46,259 109,679 Additional Interest Suspense During the Period (14,740) 20,005 (22,004) Gross Income (A) 1,913,235 2,212,945 2,587,791 Alfa (B) 15% 15% 15% Fixed Percentage of Gross Income [C=(A x B)] 286,985 331,942 388,169 Capital Requirement for Operational Risk (D) (Average of C) 335,699 283,294 Risk Weight (Reciprocal of Capital Requirement of 10%) in Times (E)10 10 Equivalent Risk Weight Exposure [F=(D x E)] 3,356,986 2,832,942

Risk Weighted Exposure For Market Risk As on 31 Ashadh 2070 (15 July 2013) Schedule 4.30 (Nga) (Rs. in ‘000)

2070 Ashadh End Relevant open position of Open Position Open Position Relevant Open 2069 Ashadh Particulars (FCY) (NPR) Position (NPR) end (NPR) 1. Indian Rupees 219,020 350,431 350,431 133,662 2. U.S. Dollor 121 11,591 11,591 11,419 3. Euro (137) (17,111) 17,111 9,183 4. Pound Sterling 94 13,553 13,553 12,990 5. Swish Frank 12.5 1,262 1,262 125 6. Australian Dollor 45 3,872 3,872 923 7. Canadian Dollor 1.80 165 165 159 8. Singapore Dollor 1.73 131 131 106 9. Japanese Yen 292 280 280 971 10. Hongkong Dollar 1 14 14 48 11. Chinese Yuan 4 69 69 199 12. Thailand Bhat 3.00 9 9 1,581 13. Qatari Riyal 0.25 7 7 – 14. Korean Won 18.00 1 1 – Total Open Position (a) – 364,275 398,498 171,364 Fixed % (b) – – 5% 5% Capital Charge for Market Risk c= a x b – – 19,925 8,568 Risk Weight (reciprocal of capital – – 10 10 requirement of 10%) in times (d) Equivalent Risk Weight Exposure (c x d) = (e) – – 199,249 85,682

| 42 | 19th Annual Report Main Indicators Schedule 4.31 Financial Years

Particulars Indicator 2008/09 2009/10 2010/112011/12 2012/13

1 Net Profit/Total Income % 24.92 16.49 14.27 14.36 17.69 2 Per Share Earning (after tax income) Rs. 99.99 100.16 83.18 88.55 91.88 3 Market Price Per Share Rs. 2455 1630 1094 1033 1591 4 Price/Earning Ratio Times 24.55 16.27 13.15 11.67 17.32 5 Dividend on Share- Bonus Share % 30 30 10 30 10 6 Cash Dividend % 30 30 50 – 50 7 Interest Income/Loans & Advances % 7.57 9.95 12.22 12.30 10.49 8 Employee Expenses/Total Operating Expenses % 12.53 10.52 9.13 9.53 14.66 9 Interest Expenses/Total Deposits & Borrowing % 2.98 4.18 6.05 5.75 3.72 10 Exchange Income/Total Income % 2.44 – 0.05 – 0.08 11 Staff Bonus/Total Employee Expenses % 47.68 52.48 45.41 44.26 45.49 12 Net Profit/Loans & Advances % 2.61 2.95 2.94 2.98 3.33 13 Net Profit/Total Assets % 1.73 2.09 2.10 2.11 2.39 14 Total Loans & Advances/Total Deposits % 73.43 76.24 76.98 73.22 76.57 15 Total Operating Expenses/Total Assets % 4.04 5.20 6.95 6.62 4.79 16 Capital Adequacy Ratio: a) Core Capital % 8.52 8.39 8.46 9.61 9.31 b) Supplementary Capital % 2.82 2.38 1.97 1.41 2.28 c) Total Capital Funds % 11.34 10.77 10.43 11.02 11.59 17 Cash Reserve Ratio (CRR) % 14.26 15.53 9.55 17.22 15.19 18 NPAs/Total Loans & Advances % 0.48 0.16 0.34 0.84 0.62 19 Weighted Average Interest Rate Spread % 4.40 4.78 4.60 5.32 5.68 20 Book Net Worth (Rs. in Lacs) Rs. 22054 27571 36407 40173 46678 21 Total Shares Number 6388210 8304673 11196095 12316357 16011264 22 Total Employee Number 534 568 586 625 643 23 Others - Per Employee Business (Rs. in Lakh) Rs. 1082 1146 1242 1386 1585 - Employee Expenses/Total Income % 7.29 4.50 4.49 4.65 5.56 Note: CRR Amount has been taken as Year end Balance.

19th Annual Report | 43 | SIGNIFICANT ACCOUNTING POLICIES Schedule 4.32

1. General Information Everest Bank Limited (Bank) is a limited liability company domiciled in Nepal. Its registered office is at Lazimpat, Kathmandu, Nepal. The Bank is listed with Nepal Stock Exchange Ltd. and provides full commercial banking services as licensed by Nepal Rastra Bank (NRB) (Central Bank). The Bank has entered into Technical Services Agreement (TSA) for the equity & management participation with Punjab National Bank Ltd, New Delhi, India.

2. Basis of Preparation The financial statements of the Bank have been prepared on historical cost convention basis in conformity with Generally Accepted Accounting Principles, prevailing accepted banking norms/practices, applicable Nepal Accounting Standards issued by the Institute of Chartered Accountants of Nepal, provisions of Banks and Financial Institutions Act and directives issued by the NRB.

3. Fixed Assets, Depreciation and Amortization a) Fixed assets are valued at cost of purchase/construction plus expenses incurred which are incidental to such purchase/construction. Purchase of items of durable (capital) nature costing Rs. 5,000 or less has been charged to Profit and Loss Account. b) Depreciation on fixed assets (except for leasehold development and computer software) are charged to Profit & Loss Account on reducing balance method, computed by applying the rates and method as prescribed by Schedule 2 of the Income Tax Act, 2058. c) Leasehold development expenses have been amortized in equal installment over the period of lease or 5 years whichever is longer. d) Cost incurred for acquiring computer software “Finacle” has been amortized in ten equal yearly installments and other software are amortized in five equal yearly installments.

4. Income Tax Income tax is provided on the basis of the taxable income for the year computed under self assessment in accordance with the provision of Income Tax Act, 2058. Deferred tax is recognized and provided for on timing difference between taxable income and accounting income subject to consideration of prudence. Deferred tax assets are not recognized unless there is virtual / reasonable certainty that there will be sufficient future taxable income available to realize such assets.

5. Investments Investments made in shares of listed companies are stated at cost or market price whichever is less. Shares which are not listed in the Stock Exchange are stated at cost. Investment made in Government Treasury Bills/Bonds is valued at cost. The excess of the cost over face value of long term government bond is proportionately amortized over the maturity period of the bond by adjusting it to the interest booked as income from such bonds.

6. Foreign Exchange Transactions Assets and liabilities denominated in foreign currencies are revalued at the mid-rate on daily basis. Gain/loss on the foreign exchange transactions is recognized as income/expense in the profit and loss account and included under exchange trading gain/loss. Gains/losses arising due to fluctuation in exchange rates of different foreign currencies is accounted for and shown as Revaluation Gain/ (Loss). 25% of such revaluation gain is transferred to Exchange Fluctuation Reserve through Profit and Loss Appropriation Account as per the directives issued by Nepal Rastra Bank.

7. Non-Banking Assets Collateral securities taken over by the Bank during the process of recovery of loans are transferred to Non-Banking Assets. Non Banking Assets are valued at lower of the total amount outstanding (including interest) or market value of the assets acquired and is stated at net of provision made for such assets as per the directive issued by NRB. The surplus or deficit arising on sale of such asset is taken to Profit & Loss Account in the year of sale.

| 44 | 19th Annual Report 8. Recognition of Income

a) Interest Income Interest on loans and advances are accounted on accrual basis by credit to interest suspense account. As per unified directive issued by NRB, interest on loans and advances are recognized as revenue on cash realization with the exception of interest capitalization on project financing. Interest income on investment made on government securities, bonds and foreign placement are recognized on accrual basis. b) Commissions received on account of LCs, Guarantees etc. are recognized on cash basis. c) Dividend on investment is recognized on cash basis at net of withholding tax.

9. Loan Loss Provision and Loan Write off Loan Loss Provision is made on the basis of classification of loans & advances in accordance with the directives issued by the NRB. The Bank has a policy to write off unrecoverable loan after appraisal and due approval of the Board of Directors on case to case basis. The amount of loans written off is charged to Profit & Loss Account and the corresponding amounts of loan loss provision made on such loan account are written back in the Profit & Loss Account.

10. Employees Retirement Benefit

a) Gratuity Gratuity payable to eligible employees on retirement/termination is accounted for on accrual basis and the amount of liability on this account are determined in accordance with the Bank’s rule. Gratuity liability is not funded. b) Leave Encasement Leave encashment payable to the employees are charged to revenue on cash basis. c) Provident Fund Contributions to the employees’ provident fund are made regularly on monthly basis which are charged to revenue. The above together with the employees’ contribution are deposited in a separate individual interest bearing account with the Bank.

11. Bonus Staff bonus is provided at 10% of net profit before tax (after charging the bonus) as per Bonus Act, 2030.

12. Contingent Liabilities All letter of credit, bank guarantee and forward exchange contract liabilities have been shown in full amount as contingent liabilities in accordance with the directive issued by Nepal Rastra Bank.

Letter of Credits (LCs) denominated in foreign currencies, are stated at the equivalent Rupees calculated at the current exchange rate. Besides above, all known liabilities wherever material, are provided for and liabilities, which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed under contingent liabilities.

13. Dividend and Proposed Bonus Shares Dividend and proposed bonus shares are provided as proposed by the Board of Directors pending approval by NRB and Annual General Meeting.

19th Annual Report | 45 | NOTES TO ACCOUNT Schedule 4.33

1. Dividend and Proposed Bonus Shares The Board of Directors has proposed cash dividend of Rs. 50 per share, bonus share of Rs. 10/- per share and Rs. 7/- on convertible preference shares. Proposed cash dividend includes Rs. 8,426,981/- on account of dividend tax on proposed bonus share. 2. Reconciliation Position a) Inter Branch Reconciliation Inter-branch transactions have been reconciled and are up to date. The summary of age-wise amount of the pending reconciliation items are as under: (Rs. in Lacs) Particulars Debit Pending Credit Pending Less than 3 months – –

3 to 6 months - -

More than 6 months 6.56 71.67

b) Reconciliation of Agency Banks Agency bank accounts have been reconciled and are up to date. The summary of the age-wise amount of the reconciliation pending amount are as under: (Amount in ‘000)

Ledger Pending Statement Pending Currency Debit Credit Debit Credit

Sterling Pound Upto 1 Year – – 0.24 1.53 More than 1 year to 3 years – – – 0.18 More than 3 years – 3.12 – 4.96 US Dollar Upto 1 Year 2826.66 496.68 454.44 484.70 More than 1 year to 3 years – 2.02 – 27.66 More than 3 years – 9.45 – 15.82 EURO Upto 1 Year – 4.30 0.22 6.01 More than 1 year to 3 years – – – 0.25 More than 3 years – 12.81 – 2.26 Japanese Yen Upto 1 Year – – 17.50 – More than 1 year to 3 years – 140.13 – – More than 3 years – – – – Australian Dollar Upto 1 Year 11.27 – – 11.62 More than 1 year to 3 years – – – 3.35 More than 3 years – – – 2.87 Indian Rupee Upto 1 Year 18.92 14949.74 30748.88 32313.52 More than 1 year to 3 years – 459.43 404.29 6251.23 More than 3 years 10.03 94354.10 20.05 10207.55

| 46 | 19th Annual Report 3. Increase/decrease in Loans & Advances The following depicts the movement of the balances of Loans & Advances during the year:

(Rs. in Lacs)

Particulars Current Year Previous Year Balance as on Ashad 31, 2069 (July 15, 2012) 366,168 316,618 Loans Disbursed during the year 1,933,509 1,170,450 Recovered during the year (1,857,699) (1,120,900) Balance as on Ashad 31, 2070 (July 15, 2013) 441,978 366,168 Write off during the year Principal 0.88 Nil Interest 0.45 0.38

4. Change in Deposit Liabilities The following depicts the percentage change in deposit between the balances as at Ashad 31, 2070 (July 15, 2013) and Ashad 31, 2069 (July 15, 2012). (Rs. in Lacs)

Types of Deposit As at Ashad 31, 2070 As at Ashad 31, 2069 Change %

Current 80,990 60,983 32.81 Margin 4,959 4,517 9.78 Saving 210,675 172,693 21.99 Fixed 141,048 130,075 8.44 Call 137,533 129,522 6.19 Others 1,999 2,272 (12.01) Total 577,205 500,061 15.43

5. Average Interest Spread Rate During the year, the average yield rate on interest bearing assets is 10.21% (Previous year 11.98%). The average cost of deposit for the year is 4.53% (Previous Year 6.66%). Accordingly, the average spread for the financial year stands at 5.68% (Previous Year 5.32%). 6. Leasehold Improvements and Computer Software The expenses incurred in the renovation and modification of the leased properties and the cost of software purchased are capitalized in the Leasehold assets and Software respectively. The above assets are amortized as per the policies stated in the significant accounting policies. The balances in above account pending amortization are as under: a) Leasehold Assets

Particulars Current Year (Rs.) Previous Year (Rs.)

Opening Balance 41,921,056 44,273,125 Addition made during this year 8,362,978 20,758,570 Total 50,284,034 65,031,695 Amortized during the year 20,229,537 21,970,866 Disposed off during the year – 1,139,774 Closing Balance 30,054,497 41,921,056

19th Annual Report | 47 | b) Software i) Finacle

Particulars Current Year (Rs.) Previous Year (Rs.)

Opening Balance 26,291,766 31,047,844 Addition made during this year – – Total 26,291,766 31,047,844 Amortized during the year (4,756,079) (4,756,078) Closing Balance 21,535,687 26,291,766

ii) Others

Particulars Current Year (Rs.) Previous Year (Rs.)

Opening Balance 3,344,055 3,404,375 Addition made during this year 389,850 1,573,500 Total 3,733,905 4,977,975 Amortized during the year (1,557,357) (1,633,820) Balance at the end of the year 2,176,548 3,344,055

7. There is no over concentration of Assets and Liabilities of the Bank to an individual, a firm, a company or in a particular sector as specified by NRB. The highest concentration of loan in a single sector is 27.83% of total loan (Previous year 30.95%) and concentration of deposit to a single institution is of total deposit 9.67% (Previous year 10.53%). 8. Non-Banking Assets (NBA) The position of the Non-banking Assets of the Bank is as under:

Particulars Current Year (Rs.) Previous Year (Rs.)

Opening Balance (at Cost) 51,786,587 51,786,587 Addition during the year – – Disposed off during the year – – Closing Balance (at Cost) 51,786,587 51,786,587 Total Provision 51,786,587 51,786,587 Balance (Net of Provision) Nil Nil

9. Convertible Preference Share : Bank issued Convertible Preference Share of Rs. 20 Crore on 7% for 15 years Ashwin 2064. 20% of initial amount will be converted into ordinary share in every 3 years. Rs. 4 Crore has been already converted into ordinary Share. Now Rs. 16.00 crore remains as Convertible Preference Shares. 10. Debenture and Debenture Redemption Reserve 10.1 10 years of 8% debenture of Rs. 46.88 crores maturing on Jestha 2080 has been issued during this fiscal year. 10.2 Rs. 4.69 crores has been appropriated through Profit & Loss Account to Debenture Redemption Reserve. Accumulated Balance of Rs. 30.00 Crore made on amount of Debenture Redemption Reserve against the debenture issued earlier and already reedeomed have been transferred to General Reserve. 11. General Reserve As required by the Bank and Financial Institution Act, 2063, 20% of the current year's net profit of Rs. 294,224,000 (Previous year Rs. 218,113,000) has been transferred to General Reserve through Profit and Loss Appropriation Account. In addition to mis Rs. 30.00 crore have been transfered from Debentur Redemption Reserve. 12. Staff Housing Fund Since the Bank has been extending housing loan to the employees, provision for staff housing as required by the Labour Act, 2048 has not been made.

| 48 | 19th Annual Report 13. Exchange Fluctuation Reserve As required by NRB directive, 25% of Revaluation Gain has to be transferred to Exchange Fluctuation Reserve through Profit and Loss Appropriation Account. Accordingly Rs 1,704,000 (Previous year Rs. Nil) has been transferred to this account. The bank has earned Rs 6,812,856 as exchange rate difference income during the year under review (Previous Year Loss of Rs 6,836,346). 14. Liquidity Risk The liquidity risk as on Ashad 31, 2070 (July 15, 2013) is set out in the Table of Liquidity Statement (Format No. 5.1) as prescribed by the Directives of Nepal Rastra Bank is given as under: (Rs. in Lacs)

1-7 8-30 31-90 91-180 181-270 271-365 More than S.N. Particulars Days Days Days Days Days Days 1 year Total Assets 1. Cash Balance 17,232 – – – – – – 17,232 2. Balance with Banks & FIs 94,926 – – – – – – 94,926 3. Investment in Foreign Banks – – 14,370 8,143 – – – 22,513 4. Call Money – – – – – – – – 5. Government Securities – 4,924 8,081 704 405 27,150 – 41,265 6. Nepal Rastra Bank Bonds – – – – – 14,464 14,154 28,618 7. Inter Bank & FI Lending – – – – – – – – 8. Loans & Advances 31,459 8,735 41,714 12,796 14,214 9,878 323,183 441,978 9. Interest Receivable – 41 54 15 6 160 80 355 10. Reverse Repo – – – – – – – – 11. Acceptance Receivable – – – – – – – – 12. Payments under S.No. 20,21 & 22 22,214 9,455 36,083 9,252 5,962 7,279 44,530 134,777 13. Others 322 1 4 6 1,116 27 8,336 9,812 Total (A) 166,153 23,156 100,306 30,917 21,703 58,958 390,283 791,476 Liabilities 14. Current Deposits 8,595 4,297 4,297 – – – 68,760 85,949 15. Saving Deposits (including call) 17,410 17,410 17,410 – – – 295,977 348,208 16. Fixed Deposits 12,607 10,783 36,989 27,880 20,654 23,047 11,088 143,047 17. Debentures/Bonds – – – – – – 4,688 4,688 18. Borrowings 4,024 – – – – – – 4,024 Call/Short Notice – – – – – – – – Inter-bank/Financial Institutions 4,024 – – – – – – 4,024 Refinance – – – – – – – – Others – – – – – – – – 19. Other Liabilities and Provisions 4,477 2,635 129 – – – 10,609 17,851 Sundry Creditors 437 2,635 – – – – – 3,073 Bills Payable 3,931 – – – – – – 3,931 Interest Payable 110 – 129 – – – – 238 Provisions – – – – – – 10,609 10,609 Others – – – – – – – – 20. Acceptance Liabilities 933 1,585 3,285 775 – – – 6,578 21. Irrevocable Loan Commitment 4,399 – – – – – 39,593 43,992 22. Letter of Credit/Guarantee 16,883 7,870 32,798 8,477 5,962 7,279 4,937 84,207 23. Repo – – – – – – – – 24. Payable under s.no.11 – – – – – – – – 25. Others – – – – – – – – Total (B) 69,328 44,581 94,909 37,132 26,616 30,326 435,652 738,544 Net Financial Assets (A-B) 96,8258 (21,426) 5,397 (6,214) (4,913) 28,632 (45,369) 52,932 Cumulative Net Financial Assets 96,825 75,399 80,796 74,581 69,668 98,300 52,932 –

15. Deferred Tax The component of deferred tax assets as on Ashad 31, 2070 (July 15, 2013) is as follows:

As at Ashad 31, 2070 As at Ashad 31, 2069 Deferred Tax Asset (Rs.) (Rs.) On Employees’ Gratuity 76,901,376 50,598,861 On Provision for Investment 480,000 480,000 On Provision for Non Banking Assets 15,535,976 15,535,976 On Fixed Assets 6,536,057 7,164,927 Total 99,453,409 73,779,764

19th Annual Report | 49 | In accordance with Nepal Accounting Standard (NAS) – 09 Income Taxes, Rs. 25,673,645 (Previous year Rs. 10,881,471) has been credited to profit on account of deferred tax. As per the circular issued by NRB, the amount credited to profit & loss account of Rs. 25,673,645 (Previous year Rs. 10,881,471) has been transferred to Deferred Tax Reserve and the balance in this reserve as on Ashad 31, 2070 (July 15, 2013) is Rs. 99,453,409 (Previous year Rs. 73,779,764). This reserve is not a free reserve and is not available for distribution as dividend or bonus shares. Explanation of the relationship between tax expenses and accounting profit

Particulars Current Year (Rs.) Previous Year (Rs.) Accounting Profit 2,100,986,703 1,558,038,707 Income tax at the applicable tax rate of 30% 630,296,011 467,411,612 Tax effect of expenses/income that are not deductible/included in determining Taxable Profit Donation 184,615 207,744 Others 35,697 – Dividend Income (717,988) (144,871) Total (497,674) 62,873 Other changes in temporary difference – – Total Tax Expenses for the Current Year 629,798,336 467,474,485 (including deferred tax) Tax Relating to Earlier Year 107,774 – Total Tax Expenses 629,906,110 467,474,485 16. Related Party Disclosure Following are the related party as defined in Nepal Accounting Standard (NAS 16) • Joint Venture Partner – Punjab National Bank (PNB) Following depicts the transaction between the Bank and PNB and the status of balances as on Ashad 31, 2070 (July 15, 2013): (Rs. in Lacs)

Nature of Transaction Current Year (Rs.) Previous Year (Rs.)

Technical Service Agreement Fees Paid 70.81 70.81 Cash Dividend (including Dividend Tax on Bonus Shares Issued) 60.33 1135.62 Bonus Shares Issued 741.70 224.76 Balance as on Ashad 31, 2070 (July 15, 2013) Deposit with PNB (NPR) 7755.95 413.43 Technical Service Agreement Fees Payable 70.56 70.81

• Key Management Personnel a. Mr. Bishnu Krishna Shrestha Chairman b. Mr. Ved Krishna Shrestha Director c. Mr. Arun Man Sherchan Director d. Dr. Bal Gopal Vidya Director e. Mr. Nabin Bhakta Shrestha Director f. Mr. Shivasharan K.C. Director g. Mr. K. Ram Mohan Director h. Dr. Rakesh Gupta Director i. Mr. A.K. Ahluwalia Chief Executive Officer • Compensation to Key Management Personnel of the Bank Short term employee benefits paid to (Seconded staff) Chief Executive Officer (CEO) amount to Rs. 9,082,704/- (Previous year Rs. 6,127,539/-). In addition to the above, other benefits and amenities such as residence facilities, vehicle facility etc. has been provided as per the terms of Technical Service agreement with Punjab National Bank. Fees for board meetings paid Rs. 940,000/- (Previous year Rs. 1,074,000/-) and fees for other committee meetings such as Management Committee, Audit Committee and Special Committee paid Rs. 2,584,192/- (Previous Year Rs. 671,345/-).

| 50 | 19th Annual Report 17. Encumbrance of Bank Assets/Properties In this financial year the bank has not obtained refinancing loan from Nepal Rastra Bank (NRB) against the security of the loan documents for the loan extended to various parties. 18. Others a) During the year, the Bank has provided Rs. 90,197,451/- (Previous year Rs. 36,465,177/-) for gratuity as per the Bank’s policy. The balance of provision for gratuity as on Ashadh 31, 2070 (July 15, 2013) is Rs. 256,337,920/- (Previous year Rs. 168,662,869/-). Rs. 2,522,400/- (Previous year Rs. 2,610,511/-) has been paid during the year to retiring/outgoing staff. b) Share premium detailed as below:

Particulars Amount (Rs.) Premium on Issue of Ordinary Shares (on partial issue only) 6,427,200 Premium on Issue of 7% Cumulative Convertible Preference Shares 200,000,000 Amount used for issuig bonus share on F.Y. 2065/66 from Share Premium (191,646,300) Increase in Share Premium from fraction share on F.Y. 2068/69 3,774,227 Total 18,555,127

c) Provision of Income Tax i) During the year, Rs. 655,436,284/- (Previous year Rs. 478,355,956/-) has been provided in the accounts for income tax. Income tax is calculated on the basis of taxable profit determined under self assessment in accordance with the provisions of Income Tax Act, 2058 and rules made there under. Any additional tax arises on final assessment of tax by the income tax authorities shall be accounted on cash basis. ii) Large tax payer office has reassessed the income tax for the year 2063-64 and 2064-65 demanding total addition tax of Rs. 13.83 crores. The bank has disputed the said assessment by appealing in the Revenue Tribunal. Contingent Liability is created. However no provision has been provided for the additional tax demand. d) Capital Adjustment Reserve the balance of the reserve on this account as on Ashad 31,2070 (July 15, 2013) is Rs. 367,147,000 (Previous Year Rs. 367,147,000). e) Other Free Reserve The balance of the reserve on this account as on Ashad 31, 2070 (July 15, 2013) is Rs. 30,000,000 (Previous year Rs. 30,000,000). f) Capital Structure During the year, the paid up capital has been increased by Rs. 369,490,710 on account of capitalization of previous year’s bonus share. g) Effect of Change in Accounting Policy The Bank’s income recognition policy as regards the interest on loan and advance is on cash basis. h) Valuation of Investment Shares The increase in the market value of shares over the value of the previous year has not been considered for valuation as the impact of such increase is not material. Investment in shares has been treated as available for sale category. Bank had appropriated reserve towards such investment being 2% on the share investment of Nirdhan Utthan Bank limited and Taragoan Regency Hotel limited while in case of Rural Microfinance Development Centre’s shares 100% reserve made, which is being continued for the current year. i) Interest Capitalisation on Project Financing Interest on Project financing is capitalized with the approval of NRB. j) Previous year’s figure and rounding off Figures of previous year have been regrouped/rearranged wherever necessary, to make the same comparable with the current year’s figure. k) Income on sale of Gold Income on sale of Gold is Rs. 16.30 lacs (previous years Rs. 35.61 lacs). Books of account for the gold transaction have been kept by B/o New Road. l) Figures in the Financial Statements are rounded off to the nearest rupee.

19th Annual Report | 51 | Details of Loan & Advances taken by Promoter/Group of Promoter from Other Financial Institutions against Promoter Share As on 31 Ashadh 2070 (15 July 2013) Schedule 4.34

Share Owned by Details of Loan and Advances Promoters Name of Promoter/ Total % Over Paid Name of Financial No. of Shares S.No. Group of Promoter Shares up Capital Institution Amount as Collateral Remarks 1. Shanta Dev Pathak 426,393 2.66 Nepal Investment Bank 30,000,000 158,654

| 52 | 19th Annual Report Comparison of Unaudited and Audited Financial Statement Financial Year 2069/070 Schedule 4.35 Rs. in ‘000 As per As per Variance Unudited Audited Financial Financial Reasons for S.No. Particulars Statement Statement In Amount % Variance 1. Total Capital and Liabilities ( 1.1 To 1.7) 66,545,726 66,545,726 – – 1.1 Paid Up Capital* 1,761,126 1,921,239 160,113 9.09 Issue of Bonus Share 1.2 Reserve and Surplus 3,875,708 2,906,606 (969,103) 25.00 Issue of Bonus Share & Cash Dividend 1.3 Debenture and Bond 468,845 468,845 – – 1.4 Borrowings 402,360 402,360 – – 1.5 Deposits (A+B) 57,720,465 57,720,465 – – A. Domestic Currency 54,228,551 54,228,551 – – B. Foreign Currency 3,491,914 3,491,914 – – 1.6 Income Tax Liability 23,933 23,933 – – 1.7 Other Liabilities 2,293,289 3,102,280 808,990 35.28 Issue of Bonus Share & Cash Dividend 2. Total Assets (2.1 To 2.7) 66,545,726 66,545,726 – – 2.1 Cash & Bank Balance 11,215,794 11,215,794 – – 2.2 Money at Call & Short Notice – – – – 2.3 Investments 9,263,858 9,263,858 – – 2.4 Loans and Advances (Gross) (a+b+c+d+e+f) 44,197,763 44,197,763 – – a. Real Estate Loan 2,194,192 2,194,192 – – 1. Residential Housing Loan (Except Personal Hosuing Loan upto 1 Crore) 775,205 775,205 – – 2. Business Complex & Residential Apartment Con. Loan 862,507 862,507 – – 3. Income Generating Commerical Complex Loan 183,025 183,025 – – 4. Other Real Estate Loan (Including Land Purchase & Plotting) 373,455 373,455 – – b. Personal Housing Loan upto Rs. 1 Crore 5,325,989 5,325,989 – – c. Margin Type Loan 43,453 43,453 – – d. Term Loan 7,307,935 7,307,935 – – e. Overdraft Loan/TR Loan/Working Capital Loan 22,055,638 22,055,638 – – f. Others 7,270,556 7,270,556 – – 2.5 Fixed Assets 631,183 631,183 – – 2.6 Non Banking Assets (Net of Provision) – – – – 2.7 Other Assets 1,237,128 1,237,128 – – 3. Profit and Loss Account 3.1 Interest Income 4,936,924 4,936,924 – – 3.2 Interest Expense 2,179,182 2,179,182 – – A. Net Interest Income (3.1-3.2) 2,757,742 2,757,742 – – 3.3 Fees, Commission and Discounts 266,821 266,821 – – 3.4 Other Operating Income 249,385 249,385 – – 3.5 Foreign Exchange Gain/Loss ( Net) 98,905 98,905 – – B. Total Operating Income (A+3.3+3.4+3.5) 3,372,853 3,372,853 – – 3.6 Staff Expenses 461,809 461,809 – – 3.7 Other Operating Expenses 509,488 509,488 – – C. Operating Profit Before Provision (B-3.6-3.7) 2,401,556 2,401,556 – – 3.8 Provision for Possible Losses 98,807 98,807 – – D. Operating Profit (C-3.8) 2,302,749 2,302,749 3.9 Non Operating Income/Expenses (Net) 8,337 8,337 – – 3.10 Write Back of Provision for Possible Loss 88 88 – – E. Profit From Regular Activities (D+3.9+3.10) 2,311,174 2,311,174 – – 3.11 Extra Ordinary Income/Expenses (Net) (88) (88) – – F. Profit Before Bonus and Taxes (E+3.11) 2,311,085 2,311,085 – – 3.12 Provision for Staff Bonus 210,099 210,099 – – 3.13 Provision for Income Tax 629,869 629,869 – – G. Net Profit/Loss (F-3.12-3.13) 1,471,117 1,471,117 – – * Paid Up Capital includes Convertible Preference Shares of Rs. 16 crore.

19th Annual Report | 53 | Unaudited Financial Results (Provisional) As at Fourth Quarter 31/03/2070 (15/07/2013) of the Fiscal Year 2069/70 Schedule 4(Ka) Rs. in ‘000 Corresponding Previous Year This Quarter Previous Quarter 15.07.2012 S.No. Particulars 15.07.2013 13.04.2013 (Audited) 1 Total Capital and Liabilities ( 1.1 To 1.7) 66,545,726 60,236,671 56,518,986 1.1 Paid Up Capital* 1,761,126 1,761,126 1,761,126 1.2 Reserve and Surplus 3,875,708 3,450,511 2,416,176 1.3 Debenture and Bond 468,845 – – 1.4 Borrowings 402,360 – – 1.5 Deposits (A+B) 57,720,465 51,293,441 50,006,100 A. Domestic Currency 54,228,551 46,924,147 47,671,249 B. Foreign Currency 3,491,914 4,369,294 2,334,852 1.6 Income Tax Liability 23,933 71,916 9,297 1.7 Other Liabilities 2,293,289 3,659,677 2,326,287 2 Total Assets (2.1 To 2.7) 66,545,726 60,236,671 56,518,986 2.1 Cash & Bank Balance 11,215,794 4,416,042 10,363,306 2.2 Money at Call & Short Notice – 3,150,000 – 2.3 Investments 9,263,858 8,946,626 7,863,627 2.4 Loans and Advances (Gross) (a+b+c+d+e+f) 44,197,763 41,854,467 36,616,832 a. Real Estate Loan 2,194,192 1,978,260 2,183,796 1. Residential Housing Loan (Except Personal Housing Loan upto Rs. 1 Crore) 775,205 668,223 518,298 2. Business Complex & Residential Apartment Construction Loan 862,507 662,522 771,263 3. Income Generating Commercial Complex Loan 183,025 189,107 223,174 4. Other Real Estate Loan (Including Land Purchase & Plotting) 373,455 458,408 671,061 b. Personal Housing Loan upto Rs. 1 Crore 5,325,989 4,989,725 4,329,004 c. Margin Type Loan 43,453 2,950 35,129 d. Term Loan 7,307,935 6,870,049 6,062,028 e. Overdraft Loan/Tr Loan/Working Capital Loan 22,055,638 20,994,438 17,522,771 f. Others 7,270,556 7,019,045 6,484,104 2.5 Fixed Assets 631,183 694,680 547,926 2.6 Non Banking Assets (Net of Provision) – – – 2.7 Other Assets 1,237,128 1,174,856 1,127,295 3 Profit and Loss Account 3.1 Interest Income 4,936,924 3,533,789 4,959,998 3.2 Interest Expense 2,179,182 1,630,295 2,873,335 A. Net Interest Income (3.1-3.2) 2,757,742 1,903,494 2,086,664 3.3 Fees, Commission and Discounts 266,821 204,239 233,570 3.4 Other Operating Income 249,385 163,798 179,822 3.5 Foreign Exchange Gain/Loss (Net) 98,905 65,822 109,679 B. Total Operating Income (A+3.3+3.4+3.5) 3,372,853 2,337,353 2,609,735 3.6 Staff Expenses 461,809 297,134 352,050 3.7 Other Operating Expenses 509,488 329,661 467,293 C. Operating Profit Before Provision (B-3.6-3.7) 2,401,556 1,710,558 1,790,392 3.8 Provision for Possible Losses 98,807 88,908 252,054 D. Operating Profit (C-3.8) 2,302,749 1,621,650 1,538,338 3.9 Non Operating Income/Expenses (Net) 8,337 3,733 25,156 3.10 Write Back of Provision for Possible Loss 88 46 150,349 E. Profit From Regular Activities (D+3.9+3.10) 2,311,174 1,625,429 1,713,843 3.11 Extra Ordinary Income/Expenses (Net) (88) (46) – F. Profit Before Bonus and Taxes (E+3.11) 2,311,085 1,625,383 1,713,843 3.12 Provision for Staff Bonus 210,099 147,762 155,804 3.13 Provision for Income Tax 629,869 443,286 467,474 G. Net Profit/Loss (F-3.12-3.13) 1,471,117 1,034,335 1,090,565 4 Ratios 4.1 Capital Fund to RWA 13.21% 11.59% 11.02% 4.2 Non Performing Loan (NPL) to Total Loan 0.62% 0.70% 0.84% 4.3 Total Loan Loss Provision to NPL 100% 100% 100% 4.4 Average Yield 10.21% 10.21% 11.98% 4.5 Cost of Fund 4.53% 4.59% 6.66% 4.6 Base Rate 7.16% 7.03% NA * Paid Up Capital includes Convertible Preference Shares of Rs. 16 crore.

| 54 | 19th Annual Report DISCLOSURE RELATING TO BASEL –II FRAMEWORK

1. Capital Structure and Capital Adequacy • Summary of the terms, conditions and main features of • Tier 1 capital and a breakdown of its components : In Rs. ‘000 all capital instruments, especially in case of subordinated Core Capital (Tier 1) 4,639,762 term debts including hybrid capital instruments: a. Paid up Equity Share Capital 1,601,126 As of 15th July 2013, Bank has the following capital structure: b. Proposed Bonus Equity Shares 160,133 Paid up ordinary capital Rs. 176.12 crore (with proposed c. Irredeemable Non- cumulative preference shares - bonus share) d. Share Premium 18,555 e. Statutory General Reserves 1,615,791 Convertible preference share Rs. 16.00 crore (Rs. 4 Crore f. Retained Earnings 559,466 already converted into Ordinary g. Reserve for Deferred Tax 99,453 Shares out of Rs. 20 Crores) h. Un-audited current year cumulative profit - The salient features of each instrument are as under: I. Debenture Redemption Reserve 46,885 i) Convertible Preference Shares of Rs. 20 crore: j. Capital Adjustment Reserve 367,147 These shares were issued at 100% premium with the terms k. Dividend Equalization Reserves – and condition of 7% fixed dividend on the face value on l Capital Redemption Reserve 140,000 unconverted portion. These shares are convertible into m. Other Free Reserve 31,226 ordinary shares @ 20% after completion every three year. n. Less: Goodwill Rs. 4 Crore has been already converted into ordinary o. Less: Fictitious Assets share. p. Less: Shortfall in provisions q. Less: Loan to parties prohibited by Acts and directives ii)EBL Debenture Rs. 46.88 crore: These debentures were r. Less: Investment in Equity in licensed Financial Institutions issued for 10 years with a fixed interest of 8%. These s. Less: Investment in Equity of Institutions with vested interests debentures are redeemded after expiry of its’ fixed period t. Less: Investment in Equity of institutions with excess of limits of ten years. u. Less: Investments arising out of underwriting commitments - v. Less: Reciprocal crossholdings 2. Risk Exposures w. Less: Other Deductions • Risk weighted exposures for Credit Risk, Market Risk and • Tier 2 capital and a breakdown of its components Operational Risk. Supplementary Capital (Tier 2) 1,137,920 The Risk Weighted exposure as of 15th July 2013 is given a. Cumulative and/or Redeemable Preference Share 160,000 below: b. Subordinated Term Debt 421,960 c. Hybrid Capital Instruments - Particulars Amount (000) d. General Loan Loss Provision 439,216 1. Credit Risk 44,793,263 e. Investment Adjustment Reserve 3,476 2. Market Risk 199,249 f. Assets Revaluation Reserve - g. Exchange Equalization Reserve 24,607 3. Operational Risk 3,356,986 h. Additional Loan Loss Provision 88,661 4. Adjustment under Pillar II 1,484,548 i. Other Reserves TOTAL 49,834,045 Total Capital Fund (Tier I and II) 5,777,682 • Detailed information about the Subordinated Term Debts with • Risk weighted exposures under each of 11 categories of information on the outstanding amount, maturity, amount raised Credit Risk: during the year and amount eligible to be reckoned as capital funds. Risk weighted exposure under each of 11 categories of Credit • Deductions from capital : Nil Risk as of 15th July 2013 is given as under: • Total qualifying capital : 5,777,682 thousand • Capital adequacy ratio : 11.59% Particulars Amount (000) • Summary of the bank’s internal approach to assess the adequacy 1. Claims on other official entities of its capital to support current and future activities, if applicable: 2. Claims on banks 929,349 Bank assesses the adequacy of capital on a regular basis taking into consideration of the present total risk exposure and expected future 3. Claims on Domestic corporate & securities firms 19,706,445 increase in this respect. Bank is aiming to maintain a proper mix of 4. Claims on regulatory retail portfolio 8,407,451 different types of capital so that there would not be pressure on 5. Claims secured by residential properties 2,783,412 dividend policy as well as inadequacy of total capital funds against 6. Claims secured by commercial real estate 3,897,511 the risk exposure. In addition to annual capitalization of profit through 7. Past due claims - issue of bonus shares, bank is setting aside certain amount towards “Capital Adjustment Reserve” for strengthening the total capital pool 8. High risk claims 3,291,221 more strong. In the past, bank had issued convertible preference share 9. Investment in Equity of Institutions 27,477 of Rs. 20 crore at a premium of 100% convertible into ordinary share 10. Other assets 1,530,568 @ 20% on completion of each third year. Further, the bank has issued 11. Off balance sheet items 4,219,830 debenture of Rs. 46.88 Crores in F.Y. 2069/70 for the period of 10 years. Total 44,793,263

19th Annual Report | 55 | • Total risk weighted exposure calculation table: • Segregation of Investment Portfolio Enclosed as an Annexure: • Amount of NPAs (both Gross and Net) Rs. in ‘000 Investment Catagory Amount (000) Gross NPA : 276,199 1. Held for Trading - Net NPA : Nil 2. Held to Maturity 9,239,610 O Restructure/Reschedule loan : - 3. Available for Sale 25,849 O Substandard Loan : 6,463 O Doubtful Loan : 10,409 O Loss Loan : 259,327 3. Risk Management Function • For each separate risk area (Credit, Market and Operational risk), bank must • NPA Ratios describe their risk management objectives and policies, including: O Gross NPA to gross advances : 0.62% O Provision to NPA : >100% O Strategies and processes; • Movement of Non Performing Assets: O The structure and organization of the relevant risk management function; O The scope and nature of risk reporting and/or measurement systems; Amount Rs. (000) and Particulars Amount Provision O Policies for hedging and/or mitigating risk and strategies, and processes Opening balance 307,493 242,675 for monitoring the continuing effectiveness of hedges/mitigants.

Addition during the year 29,213 73,598 A. Credit Risk: Sold during the year (60,507) (50,126) Strategies and Process: Balance as at 15 July 2013 276,199 266,147 Strategies: Main focus is given on medium sized entity. Maximum percentage of sectorial exposure in terms of capital funds for a particular financial • Write off of Loans and Interest Suspense: year is fixed at the beginning of a financial year and approved by the Following Loans and Interest Suspenses have been written Board. Loaning power to concerned official at branch as well as Head Office off during the year 2012/13: have been fixed. The loaning power at branch level has been fixed Amount Rs. (000) comparatively at lower level with a view to have strong appraisal system Out- Interest w/o at corporate level. Manuals relating to credit is in place. Every aspect Particulars Facility Type standing from suspense relating to credit such as procedure, documentation etc. are clearly defined. Thirtha Kumar Pradhan Consumer Loan 21.20 9.99 Credit Policy of the Bank has also been put in place. Tara Nath Sapkota Consumer Loan 20.76 9.79 Process: Indra Raj Chhetri Deprived Sector Loan 24.20 13.45 Pre sanction: Each credit limit is approved after due scrutiny by two layer Nawaraj Lama Deprived Sector Loan 22.15 11.32 of authority in branch level of their limit. Loans are approved after due scrutiny of background of the promoter, nature of business, turnover in Total 88.31 44.55 the account, cash flows, debt/equity ratio, income or profit, value of • Movements in Loan Loss Provisions and Interest Suspense: primary and collateral security. Loans above branch power are recommended to Head Office for consideration on merit. Risk rating mechanism is in place Amount Rs. (000) for certain credits and beyond certain amount. Loan Loss Interest Particulars Provision Suspense Post sanction monitor/follow up: Opening balance 705,857 88,605 Concerned branch obtains regular returns from the borrower as stipulated Write back /off in the year (88) (41,389) in the sanctioned letter on regular interval. Drawing power in case of Addition in the year 98,807 84,662 revolving type of loan is calculated to keep the exposure within its DP. Business place of the borrower is visited, physical stock level is also being Balance as at 15 July 2013 804,576 131,878 checked at regular interval checked on a time bound basis. In case there • Details of additional Loan Loss Provisions is symptom of any slippage in a particular account, steps are taken for regularizing or repayment or exit. Loans more than Rs. 1 Lac which are either irregular or likely irregular are reported to Board on regular basis Particulars Amount (000) and discussed about the course of action. Credit related returns such as 1. Substandard 4,846 Credit Officer’s Report, Review Sheet etc. are submitted to H.O. in a specified 2. Doubtful 5,225 time interval on regular basis.

3. Loan against PG 500 B. Market Risk: 4. Deprived Sector Loan 8,463 a) Investments: Presently bank has made no investment for trading purposes. All instruments 5. Retail Lending 80,199 either government securities or bonds issued by government are intended Total 99,213 to hold upto maturity. Instruments issued by semi-government body corporate have been purchased at face value. Premium paid on purchase of government bonds are amortized out of profit on a prorate basis in each year.

| 56 | 19th Annual Report b) Foreign Exchange: iv) Generation of Exceptional Report: The Bank’s policy is to maintain the net open position of convertible foreign Exceptional report at the end of day is generated through system and currency where exchange rate risk persist in matching position. 25% of examined. total revaluation profit if any in a financial year are transferred to a separate v) Morning Checking: Each and every vouchers are physically verified with reserve for building a cushion. the ledger posted at the start of next day.

C. Operational Risk: 2. Risk arising from Procedural Lapses and Internal Control: 1. Risk arising from break down of information & Operating system: Operating manual describing every procedure related to banking function All banking transactions are done through highly sophisticated software. is in place. In addition to this, internal circulars are issued as and when All related data are processed centrally. To safe guard the probable losses required. Regular returns are submitted by every branch on regular interval resulting from system failure or natural disaster, bank has taken following to H.O. Internal audit of each and every branch including Head Office is policies to minimize the risk: carried out every year. The internal audit department conducts off site as i) Back up: Daily back up of all balances are taken at the end of day. Auto well as on site inspection. Monthly manager’s certificate in respect of back up while the system is running are also taken at certain time compliance of set systems & procedures are obtained from each branch. interval to safe guard the normal system failure. 3. Corporate Good Governance: Guidelines issued by the central bank, (Nepal ii) Disaster Recovery Site (DRS): To safe guard the natural disaster, DRS Rastra Bank) are observed and complied with: site is being maintained outside valley, which is considered to be less • Types of eligible credit risk mitigants used and the benefits availed seismic zone. under CRM. Margin money deposited with the bank against off balance iii) Validation of entry & Password Control: Each entry in the system is sheet exposures-Lc, Gtee and Loan against Fixed Deposit Receipt & revaluated by another staff having the power to do so before final Govt. Bond etc. have been claimed as CRM. Under this, Rs. 1868396 posting. Level wise access authority is given for data entry, update, thousand have been deducted from risk as CRM. modification and validation process. Password control is maintained at each level of operation very strictly and confidentially.

19th Annual Report | 57 | ILAM

JHAPA PANCHTHAR

TAPLEJUNG TERHATHUM MORANG DHANKUTA SUNSARI BHOJPUR SANKHUWASABHA 8848 m. Mt. Everest SAPTARI KHOTANG BHAKTAPUR SOLUKHUMBU UDAYAPUR VALLEY SIRAHA KATHMANDU OKHALDHUNGA KATHMANDU LALITAPUR

DOLAKHA DHANUSA

RAMECHHAP SINDHULI MAHOTTARI KABHRE

SINDHUPALCHOK SARLAHI

BHAKTAPUR RASUWA RAUTAHAT KATHMANDU LALITAPUR NUWAKOT BARA

MAKAWANPUR DHADING PARSA GORKHA CHITWAN LAMJUNG MANANG TANAHU

Pokhara KASKI PARRBAT NAWALPARASI SYANGJA MUSTANG PALPA Butwal MYAGDI RUPANDEHI GULMI BAGLUNG DOLPA ARGHAKHANCHI KAPILBASTU PYUTHAN RUKUM ROLPA Lamahi DANG MUGU JUMLA SALYAN : Limited Company : Nepal : Nepal 13384, Kathmandu, Lazimpat, P.O.Box : Nepal Limited, Stock Exchange Nepal JAJARKOT HUMLA BANKE DAILEKH KALIKOT SURKHET BAJURA BARDIYA ACHHAM BAJHANG DOTI KAILALI Dhangadi Legal form of the Company of Legal form Domicile Office Registered Shares Listing of DARCHULA BAITADI DADELDHURA KANCHANPUR

| 58 | 19th Annual Report BRANCH MANAGER & OFFICES:

Santosh Bhattarai Mrs. Kamana Shrestha Ramesh Shakya Saajan K.C. New Baneswor Branch Kirtipur Branch I.C.D. Branch Taulihawa Branch New Baneswor, Kathmandu Naya Bazar, Kirtipur, Ktm Dryport, Parsa Purano Haat Bazar, Lumbini Tel: 4780018 (hunting) Tel: 4336423, 4336424 Tel: 051-533835 Tel: 076-561148 Fax: 4781025 Fax: 4336425 Fax: 051-533834 Fax: 076-561149 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Prashanna Khadka Mrs. Anju Sharma Sumit Kumar Amatya Arjun Sharma Poudel New Road Branch Pulchowk Branch Hetauda Branch Krishna Nagar Branch New Road, Kathmandu Pulchowk, Lalitpur Bank Road, Hetauda-10 Krishna Nagar-2, Kapilvastu Tel: 4222230, 4245782, 4245784 Tel: 5549738, 5549739 Tel: 057-527003 Tel: 076-520428 Fax: 4245779 Fax: 5549736 Fax: 057-527004 Fax: 076-520429 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Raghu Nath Pradhan Bijay Kumar Singh Janak Chapagain Rajesh Gyawali Teku Branch Gwarko Branch Narayangarh Branch Sandhikharka Branch Teku, Kathmandu Gwarko, Lalitpur Shahidpath, Narayangarh Sandhikharka-9, Chutrabeshi Tel: 4242333, 4230642 Tel: 5540348 Tel: 056-521465 Tel: 077-420801 Fax: 4247009 Fax: 5539066 Fax: 056-520465 Fax: 077-420802 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Ranjan Khadka Mrs. Kalpana Pandey Rudra Pd. Joshi Sudhir Gautam Lazimpat Branch Lagankhel Branch Gorkha Branch Nepalgunj Branch EBL House, Lazimpat, Ktm Lagankhel (Bus Park), Lalitpur Shakti Chowk, Gorkha Bazar-3 Surkhet Road, Dhamboji Tel: 4443377 (Hunting) Tel: 5551470, 5551471 Tel: 064-690986 Tel: 081-525804, 525805 Fax: 4443160 Fax: 5551472 Fax: 064-421558 Fax: 081-525902 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Lava Prasad Kuikel Mrs. Heera Shakya Ujjwal Pokharel Yagya Raj Timilsina Chabahil Branch Bhaktapur Branch Pokhara Branch Surkhet Branch Chabahil, Kathmandu Suryabinayak, Bhaktapur New Road, Pokhara Birendra Chowk, Birendranagar Tel: 4464895 Tel: 6620001 Tel: 061-541491, 550291 Tel: 083-523552 Fax: 4464914 Fax: 6620002 Fax: 061-541492 Fax: 083-523553 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Anil Karki Suman Sharma Chhitij Parajuli Purushottam Luitel Balaju Branch Tatopani Branch Lekhnath Branch Gulariya Branch Naya Bazar, Balaju, Kathmandu Liping, Tatopani, Sindhupalchowk Taal Chowk, Lekhnath Narayan Gopal Chowk-8, Guleria Tel: 4380301, 4380381 Tel: 011-480003 Tel: 061-560777 Tel: 084-420038 Fax: 4358986 Fax: 011-480004 Fax: 061-560977 Fax: 084-420039 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Mani Ram Lamichhane Nar Bahadur Rawal Dhruba Pd. Acharya Nava Raj Timsina Golfutar Branch Birtamod Branch Beshishahar Branch Tikapur Branch Golfutar, Kathmandu Shanishchare Road, Birtamod, Jhapa Beshishahar, Lamjung Tikapur-9, Khakraula Rode, Kailali Tel: 4650793, 4879705 Tel: 023-543805 Tel: 066-520771 Tel: 091-561357 Fax: 4374917 Fax: 023-540170 Fax: 066-520772 Fax: 091-561358 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Satish Pratap Singh Swalid Sthapit Suman Raj Shrestha Yogesh Shrestha Maitidevi Branch Biratnagar Branch Kushma Branch Tulsipur Branch Maitidevi, Kathmandu Mangala Devi Super Market, Hanuman Das Road Shahid Chowk, Kushma Bazar, Parbat BP Chowk, KA Line, Tulsipur, Dang Tel: 4445172, 4445173 Tel: 021-530528, 527645 Tel: 067-421169 Tel: 082-521620 Fax: 4445175 Fax: 021-530527 Fax: 067-421169 Fax: 082-521621 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Pranaya Pradhan Jagadish Karki Suraj Bhakta Shrestha Harish K. Acharya Thamel Branch Duhabi Branch Baglung Branch Dhangadhi Branch A One Business Complex, Ktm Duhabi, Sunsari Aawa Road, Baglung Dhangadhi, Kailali Tel: 4433037, 4436117 Tel: 025-540628 Tel: 068-522185, 522186 Tel: 091-523641, 523642 Fax: 4435530 Fax: 025-540627 Fax: 068-522187 Fax: 091-523643 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Mrs. Sarita K.C. Shashank Koirala Chandra Bdr. Gurung Sunil Raj Khanal Kalimati Branch Itahari Branch Syangja Branch Chandranigahapur Branch Kalimati, Kathmandu Itahari, Sunsari Shahid Chowk, Putalibazar-01 Gour Road, Chandranigahapur Tel: 4278556, 4278557 Tel: 025-586411 Tel: 063-421174 Tel: 055-540642 Fax: 4283897 Fax: 025-586412 Fax: 063-421175 Fax: 055-540690 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Bishwajit Lal Maskey Ram Bharosh Yadav Devi Dutta Gyawali Binaya Pd. Upadhaya Bagbazar Branch Janakpur Branch Butwal Branch Rajbiraj Branch Bagbazar, Kathmandu Mills Area, Janakpur Mali Complex, BP Path, Butwal Tribhuvan Chowk, Saptari Tel: 4242712 Tel: 041-525855 Tel: 071-543661, 545661 Tel: 031-523570 Fax: 4242713 Fax: 041-525361 Fax: 071-543662 Fax: 031-523571 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Ram Hari Acharya Bishnu Prasad Gyawali Budhi Prasad Tiwari Satungal Branch Birgunj Branch Bhairahawa Branch Satungal, Kathmandu Adarshanagar, Birgunj Prahari Tole, Siddharthanagar, Bhairahawa Tel: 4311080, 4310657 Tel: 051-527163, 523048 Tel: 071-527360 Fax: 4310272 Fax: 051-527164 Fax: 071-527361 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Bibhuti Neupane Niranjan Karki Mrs. Shanti Sharma Gongabu Branch Simara Branch Lumbini Branch Samakhushi Chowk, Gongabu Simara Chowk, Simara Madhuvani-8, Rupandehi Tel: 4363076 Tel: 053-520506 Tel: 071-580297 Fax: 4363077 Fax: 053-520616 Fax: 071-580298 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] DEPARTMENT HEAD

Ashutosh Upadhyay Corporate Credit

Keshab Raj Poudel Credit

Ashutosh Sharma Risk Management

Purna Bahadur Shrestha Inspection

Bijay K. Gautam IT Department

Kumar Joshi Human Resource

Rajan Kayastha Accounts

Pramod Raj Sharma Company Secretary

Dev Ranjan Dangal Marketing

Dharma P. Gauli Legal

Sukra P. Gautam Treasury

Mahesh Bajracharya General Administration

Sirish Bohara Remittance

Priti Lama Planning & Development

Corporate Office: EBL House, Lazimpat P.O.Box 13384, Kathmandu, Nepal Tel: 4443377, Fax: 4443160 E-mail: [email protected] Swift: EVBLNPKA

Representative Office: New Delhi 9th floor, Antariksha Bhawan, K G Marg, New Delhi-100 001 Tel: 91-11-23710327 Fax: 91-11-23710326 E-mail: [email protected] Glimpses of 18th Annual General Meeting Deposit Loans & Advances Operating Profit Net Profit (Rs. in million) (Including Bills Purchases) (Rs. in million) (Rs. in million) (Rs. in million) 2401.6 1471.1 33322.9 36932.3 41127.9 50006.1 57720.4 24469.6 28156.4 31661.8 36616.8 44197.7 1073.5 1349.1 1516.7 1790.4 638.7 831.8 931.3 1090.6 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013 2008/09 2009/010 2010/011 2011/012 2012/013

Everest Bank Branches Network

Kathmandu Bagbazar Balaju Chabahil Golfutar Gongabu Kalimati Valley: Kirtipur Lazimpat Maitidevi New Baneshwor New Road Satungal Teku Thamel Gwarko Lagankhel Pulchowk Suryabinayak (Bhaktapur)

Eastern: Birtamod Biratnagar Birgunj Chandranigahpur Duhabi

Hetauda I.C.D. Itahari Janakpur Narayangarh Rajbiraj

Simara Tatopani

Western: Baglung Beshisahar Bhairahawa Butwal Gorkha Krishnanagar

Kushma Lekhnath Lumbini Pokhara Sandhikarka Syangja Taulihawa

Mid-Western: Nepalgunj Surkhet Tulsipur Gulariya

Far-Western: Dhangadhi Tikapur

Corporate Office: Representative Office: EBL House, Lazimpat New Delhi P.O.Box 13384, Kathmandu, Nepal 9th floor, Antariksha Bhawan, K G Marg Tel: 4443377 (Hunting), Fax: 4443160 New Delhi-100 001, Tel: 91-11-23710327 E-mail: [email protected], Swift: EVBLNPKA Fax: 91-11-23710326, E-mail: [email protected]