Annual Report and Accounts 2008-2009 Leading the way in Asia, Africa and the Middle East Leading the way “2008 was a year of extraordinary dislocation and disruption in financial markets. Banks collapsed or were rescued by governments, Design by Black Sun Plc markets fell precipitously and economic growth Printed by Park Communications Printed by Park Communications on FSC certified stalled. Given our conservative business model, paper. Park is a CarbonNeutral company and its Environmental Management System is certified to ISO14001:2004. 100% of the electricity used is our clear strategy and our focus on the basics, generated from renewable sources, 100% of the inks used are vegetable oil based, 95% of press chemicals Standard Chartered has weathered the storm are recycled and on average 99% of any waste associated with this production will be recycled.
relatively well. We have not been unscathed This document is printed on Revive 50:50. Revive 50:50 contains 50% recycled waste and 50% virgin but we have continued to be open for business fibre and is fully recyclable, biodegradable, Elemental Chlorine Free (ECF) and contains fibre from well for customers and once again delivered managed forests. The laminate consists of cellulose acetate record profits.” biodegradable film made of wood pulp, also from sustainable managed forests.
Peter Sands This document is fully recyclable. Group chief executive 3 March 2009
Our markets
Asia Philippines Africa The Middle East Europe The Americas Afghanistan Singapore Botswana Bahrain Austria Argentina Australia South Korea Cameroon Egypt France Bahamas Bangladesh Sri Lanka Côte d’Ivoire Jordan Germany Brazil Brunei Taiwan Ghana Lebanon Guernsey Canada Cambodia Thailand Kenya Oman Ireland Cayman Islands China Vietnam Nigeria Qatar Italy Chile Hong Kong Sierra Leone UAE Jersey Colombia India South Africa Luxembourg Falkland Islands Indonesia Tanzania Monaco Mexico Japan The Gambia Poland Peru Kazakhstan Uganda Romania Uruguay Laos Zambia Russia US Macau Zimbabwe Spain Venezuela Malaysia Sweden Mauritius Switzerland Nepal Turkey Pakistan UK Ukraine
© Standard Chartered PLC. All rights reserved. The STANDARD CHARTERED word mark, its logo device and associated product brand names are Standard Chartered PLC is headquartered in London where it is regulated by the UK’s Financial Services Authority. The Group’s head office provides owned by Standard Chartered PLC and centrally guidance on governance and regulatory standards. Standard Chartered PLC stock code: 02888. licensed to its operating entities. Registered Office: Note: Within this document ‘the Bank’ and ‘the Group’ refer to Standard Chartered PLC together with its subsidiary undertakings. The Hong Kong Special Administrative Region 1 Aldermanbury Square, London EC2V 7SB. of the People’s Republic of China is referred to as Hong Kong and includes Macau; India includes Nepal; The Republic of Korea is referred to as Korea or South Korea; Middle East Telephone +44 (0) 20 7885 8888. Principal place of and Other South Asia (MESA) includes, amongst others: Afghanistan, Bahrain, Bangladesh, Egypt, Jordan, Lebanon, Oman, Pakistan, Qatar, Sri Lanka, United Arab Emirates (UAE); business in Hong Kong: 32nd Floor, 4-4A Des Voeux Road, and Other Asia Pacific includes, amongst others: Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Mauritius, the Philippines, Taiwan, Thailand and Vietnam. Central, Hong Kong. Registered in England No. 966425.
www.standardchartered.com Contents
Business Review
6 Chairman’s Statement 12 CEO & Director’s Report 16 Our Approach to Corporate Responsibility 22 Our people, Our Strength 26 Our Approach to Corporate Governance 34 Additional Information 38 Board of Directors 39 Management Team 42 Branches and ATM’s
Financial Statements and Notes to Accounts
43 Auditor’s Report 44 Balance Sheet 45 Profit & Loss Account 46 Profit & Loss Appropriation Account 47 Statement of Changes in Equity 48 Cash Flow Statement 49 Schedules 78 Significant Accounting Policies 80 Notes to Accounts 86 Disclosure as per Bank’s disclosure policy under the Basel –II Capital Accord of Nepal Rastra Bank 89 Nepal Rastra Bank’s Approval and Directions 90 Five Years Financial Summary
Get more on Line Please visit us on line at www.standardchartered.com/np for more information on the Bank and its full range of banking services. Our performance FYE 2008/09
Financial highlights (in NPR where applicable)
Operating Income Operating Profit Total Assets 2092m 1506m 40,587m
Capital Adequacy Return on equity Dividend
(Including 14.70% 33.58% 100% Bonus Shares)
Non-financial highlights
Points of representation Employees 17 392
Operational highlights
Strong Income Growth Sound capital base
Strong Profit Growth Solid deposit growth
Robust balance sheet Sustainable business Group overview Our business
AboutOur appro aUsch StandardWe have Charteredoperate Bankd for Nepalover 1Limited50 ye hasars beenin so inm operatione of the in Nepal since 1987 whenworld it’ swasmo initiallyst dy nregisteredamic m aasrk ae tjoint-ventures, leading toperation.he way i nTodayAsia the, Bank is an integral Africa and the Middle East. part of Standard Chartered Group having an ownership of 75% in the company with 25% shares owned by the Nepalese public. The Bank enjoys the status of the largest international bank currently operating in Nepal. Our business
StandardStand aCharteredrd Cha rhaster ead historyPLC ,ofl ioversted 150on yearsboth int bankinghe Lon anddon and Honcorporations,g Kong st oairlines,ck ex hotels,chang SME'ses, ra asnk wells a mas otheng DOth esegment operatestop 2 5in cmanyomp ofa ntheie sworld'sin th efastest-growingFTSE 100 b marketsy mark withet c anap italisation. comprisingThe Bank ofh embassies,as grown aidsu agencies,bstantia NGOslly in randec eINGOs.nt extensiveyears, globalprim anetworkrily as ofa overresu 1600lt of branchesorganic (includinggrowth ,subsidiaries,suppleme nted by acquisitions. overview Business review associatesStanda andrd C jointha rventures)tered a sinp overires 70to countriesbe the bine thest iAsiante rPacificnation al bankThefor Bankits c hasust beenome thers. pioneerThe B ainn introducingk derives 'customermore focused' products and services in the country and aspires to continue to be Region,than South90 p eAsia,r ce thent oMiddlef its oEast,per aAfrica,ting ithenc oUnitedme a Kingdomnd prof iandts f rom Asia, Africa and the Middle East, generated a leader in introducing new products in delivering superior services. thefr Americas.om its W Asho oneles aofle thea nworld'sd Con mostsum internationaler Bankin gbanks,bus iStandardnesses . The Group has over 1,600 branches and outlets Chartered employs around 70,000 people, representing over 125 It is the first Bank in Nepal that has implemented the Anti-Money located in over 70 countries. nationalities, worldwide. This diversity lies at the heart of the Bank's Laundering policy and applied the 'Know Your Customer' procedure values and supports the Bank's growth as the world increasingly on all the customer accounts. becomes one market. Corporate Social Responsibility is an integral part of Standard With 17 points of representation, 21 ATMs across the country and with Chartered's ambition to become the world's best international bank and more than 375 local staff, Standard Chartered Bank Nepal Ltd. is in a is the mainstay of the Bank's values. The Bank believes in delivering positionOu tor servepri itsn customersciple sthrough an extensive domestic network. shareholder value in a socially, ethically and environmentally responsible In Laddition,eading theby globalexa mnetworkple to ofb Standarde the rig Charteredht partn eGroupr for givesits s ttheak eholdemanner.rs, the StandardGroup iChartereds comm throughoutitted to b itsui llongding historya has played an Banksus at auniqueinabl eopportunitybusines sto oprovidever th trulye lo internationalng term th bankingat is tr uservicessted w orldwactiveide rolefor inu psupportingholding thosehigh communitiesstandards ino whichf cor pitso customersrate and in gNepal.overnance, social responsibility, environmental protection anstaffd e live.mp Itlo concentratesyee divers onity .projectsIt emp thatloy assists ove children,r 70,00 particularly0 people, nearly half of whom are women. The Group’s employine thees areasare o off 1health25 n andatio education.nalities, Environmentalof which 68 projectsare are also Standard Chartered Bank Nepal Limited offers a full range of banking occasionally considered. It supports non-governmental organisations represented among senior management. products and services in Wholesale and Consumer banking, catering to involving charitable community activities. The Group launched two major a wide range of customers encompassing individuals, mid-market local initiatives in 2003 under its 'Believing in Life' campaign- 'Living with HIV/ corporates, multinationals, large public sector companies, government AIDS' and 'Seeing is Believing'. Corporate Governance WhatWhat wewe sstandtand f oforr
To be the world’s best international bank Strategic intent Leading the way in Asia, Africa and the Middle East
Brand promise Leading by Example to be The Right Partner
Values Courageous Responsive International Creative Trustworthy
Approach Participation Competitive positioning Management discipline Focusing on attractive, growing Combining global capability, Continuously improving the way we markets where we can leverage our deep local knowledge and creativity work, balancing the pursuit of growth relationships and expertise to outperform our competitors with firm control of costs and risk
Commitment to Customers Our people Communities Investors Regulators stakeholders Passionate about our Helping our people Trusted and caring, A distinctive Exemplary customers’ success, to grow, enabling dedicated to making investment delivering governance and delighting them with individuals to make a a difference outstanding ethics wherever the quality of our difference and teams performance and we are Financial statements and notes service to win superior returns
4 Standard Chartered 2008 Chairman’s Statement
Building strong foundations
Our deep understanding of this market, It is my pleasure to report that Standard Chartered Bank Nepal Limited has been able to successfully ability“ to quickly adapt to the changing scenario maintain its record of consistent performance and delivered robust financial results for the fiscal and the aptitude of our management to year ended 15 July 2009. Our results clearly demonstrate the underlying strength of our execute the Bank’s strategy are continuously businesses and the overall resilience of the Bank. propelling our intent to garner a balanced and We have been consistent in our strategy, carrying out business in the areas of our strength and sustainable growth. with products of our expertise. To deliver record results in this exceptional environment is a great – Neeraj Swaroop, Chairman ” achievement. Full credit goes to the Nepal Team for having achieved this feat in the backdrop of global
6 Annual Report and Accounts 2008-2009 economic melt down coupled with challenging are continuously propelling our intent to garner a We continued political and economic environment within the balanced and sustainable growth. country itself. Throughout our presence, we have lived our “to show restraint commitment in being the right partner to our people, Some improvement in the underlying security and customers, regulators, industry and the community. while leading the political situation has paved way for the Bank to This is a firm foundation which prepares us to seize consider investment in footprint expansion and in the opportunities even as the business environment best practices launching innovative products. These have had becomes increasingly challenging. Our brand a positive effect in the Bank’s performance as is the most valuable asset which is at the heart for the industry, evidenced by our FYE 2008/09 numbers. of our strategic intent i.e, to be the world’s best be it in the area overview Business review We continued to show restraint while leading international Bank, leading the way in Asia, Africa the best practices for the industry, be it in the and the Middle East. Standard Chartered is the of products sold area of products sold to customers or in the best brand in this market and we are committed to quality of services rendered to them. Our deep maintain this position in the future as well. to customers understanding of this market, ability to quickly adapt to the changing scenario and the aptitude Results – A Synopsis or in the quality of our management to execute the Bank’s strategy of services Financial Highlights Net Profit after tax rose by 25.18 percent to rendered to 1,025 Rs.1.025 billion compared to Rs. 818.92 million in the previous year them. Earnings per share is lower by Rs. 21.93 due to
819 increase in the number of shares last year ” Risk Assets decreased by less than a percent to 692 Rs.13.88 billion 659 Deposits increased by 20.60 percent to Rs. 536 35.87 billion
A Consistent Performance The Bank has been continuously delivering on its promises year on year. As a result of another
exceptional year, the Bank continues to be one Corporate Governance of the highest contributors to the Government Exchequer by contributing Rs. 443 million as
2004-05 2005-06
2006-07
2007-08 2008-09 compared to Rs. 381 million last year on account of Profit After Tax In NPR Mn Corporate tax.
In accordance with the statutory requirements, the Board recommends a transfer of Rs. 31,918,164 to 6,830 Exchange Fluctuation Reserve from current year’s profits and the statutory transfer of Rs. 205,022,907 5,900 6,010 into General Reserve Fund. In congruence with the revised capital requirements as stipulated by the Central Bank, the Board has proposed to increase the capital by issuing 50 percent Bonus shares for 3,775 which Rs. 465,983,200 has been allocated from current year profit.
2,345 Our Tier 1 and Tier 2 Capital Adequacy Ratios were 13.05 percent and 1.65 percent respectively with an overall ratio of 14.70 percent. Our capital position is more than adequate and exceeds the current Nepal Rastra Bank’s capital adequacy requirement under
2004-05
2005-06
2006-07
2007-08
2008-09 the new Basel II capital accord of 10.00 percent and Market value per share In Rs. also exceeds the international norms. Financial statements and notes
www.standardchartered.com/np 7 Chairman’s Statement continued
A Challenging Environment The performance of export sector was relatively It appears that the worst of the global financial satisfactory against the backdrop of the global crisis is mostly over but its effects may remain economic crisis. The total export grew by 19.8 for quite sometime. Markets seem to be quite percent in the first ten months of FY2008/09 cautious about the perplexing turning points compared to decline of 2.4 percent in the previous of economies as there can be conflicting year. Likewise total imports increased significantly by economic data failing to clearly justify if an 25.4 percent compared to a growth of 16.8 percent economy has hit the bottom and turning in the previous year. around. Increased inflow from remittances which grew by The obvious is that the last quarter of 2008 51 percent helped expand country’s total gross and the first quarter of 2009 were appalling, foreign exchange reserves to USD 3.59 billion as of as exports slumped, inventories were cut and mid June 2009. This is sufficient to cover import of spending plans were put on hold. While many merchandise and services for 9.6 months. indicators were still poor in the second quarter of 2009, there were signs of improvement. Asia In line with the depreciation of the Indian Rupees is leading this rebound and even the economies against the US dollar, the Nepalese Rupee also hit hard by the collapse in exports are starting recorded a weakening trend against USD and to recover. Latest data suggests that it should depreciated by 14.6 percent during FY 2008/09. become even more apparent and widespread Nepalese Rupee has a fixed parity of 1:1.6 with the as we progress into the second half of the year. Indian Rupee.
This year was even more challenging for Outlook for 2009/10 Nepal in both political and economic fronts The government holds firm plans to attain high as the country transitioned into a republic growth rate in the economy and contract the double state. Difficult labor relations and continuous digit inflation rate. However, achievement of such an power crisis were the major issues in the augmentation will, to a great extent, depend upon manufacturing sector. Poor monsoon hit the political stability in the country and provision of hard on the agriculture as well. Growth in adequate security. The nation, thus, optimistically Remittance remained a major driver in holding awaits the government’s efforts to implement its the economy. plans and resuscitate the economy.
Markets seem to In FYE 2008/09, Nepal’s GDP growth is Agriculture sector, which is largely dependant on “be quite cautious expected around 4 percent. During the year, the weather conditions, is expected to witness a agriculture sector is estimated to have grown depressed momentum. Arrival of late monsoon is about the perplexing by 2.2 percent compared to a growth of 4.7 likely to have a negative impact this year. However, percent in the previous year. improvement in the rural security situation is turning points of expected to expand cultivation area, enhance The growth in non-agricultural sector is distribution of inputs and services, and raise economies as there estimated at 4.8 percent compared to a growth farm productivity. Likewise, the industrial sector of 5.6 percent in the previous year. is also estimated to grow at a mediocre pace of can be conflicting 4-5 percent in the coming FY. The government’s economic data failing The government revenue increased by 32.1 focus to increase infrastructural expenditure and percent to Rs. 142.2 billion in FY 2008/09 improve the operating condition in manufacturing to clearly justify if an compared to a growth of 22.7 percent in the sector coupled with a consistent remittance-driven previous year. Similarly government expenditure consumer spending are likely to provide stability in economy has hit the rose by 32.4 percent to Rs. 213.6 billion. Such the economy. expenditure had increased by 20.8 percent in bottom and turning the comparable period of the preceding year. Service sector growth is likely to remain around 5 The budget deficit amounted to Rs 36.8 billion percent stemming mainly from higher tourism related around. during the period under review compared to the activities. Investment in infrastructural projects by ” budget deficit of Rs 21.20 billion in the same private sector is also expected to grow. However, period of the preceding year. labor and industrial security issues would be key factors to build investors’ confidence. Giving The annual average consumer inflation is credence to these factors, an overall economic expected to soar to 13 percent compared to growth of 4% is considered achievable in the coming a rise of 7.7 percent in the previous year. The year. upsurge in inflation was mainly driven by the power cuts, supply disturbances and poor labor relations resulting in low outputs.
8 Annual Report and Accounts 2008-2009 175.84 167.37 Corporate Governance Robert Green, Mr. Ranjan Ghosh and Mr. Rajeev Governance across the Bank is robust. As you Uberoi for their contribution during their tenure as 143.14 can appreciate, banking is a relationship business. Alternate Directors of the Bank. 131.92 We highly value the relationships that we have with our people, regulators, clients and the other In Conclusion 109.99 stakeholders and we would strive hard to remain A review of the world economy reveals that the crisis The Right Partner for them. is yet to be over. It is therefore important to look beyond the immediate future. While the near-term We are committed to ensuring the integrity economic conditions have deteriorated, our markets
of governance. In addition to the established mainly in Asia remain fundamentally strong and overview Business review committees, we have committees on Diversity attractive. With the advent of growing middle class, and Inclusion, Health and Safety, the Environment, rapid urbanization and continuing industrialization, Outserve Plus and Community Partnership. The our markets offer vast potential. We are in the right
2004-05
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2007-08 initiatives taken by these committees have added markets and will stay focused on them. 2008-09 value to our stakeholders and delighted them. Earning Per Share In Rs. We believe good governance provides clear Nepal experienced a relatively stable condition accountabilities, ensures strong controls, instills the during the downturn of the major global economies. right behaviors and reinforces good performance. Apparently, the Nepali financial market does not seem to have been directly impacted by the crisis 2.56 Mr. Arjun Bandhu Regmi representing the public due mainly to insignificant amount of foreign private shareholders, Mr. Anurag Adlakha and Mr. Sushen capital inflows. However, the country has critical 2.53 Jhingan, nominated by the Standard Chartered dependence on other larger economies both in Grindlays Australia and Mr. Ram Bd. Aryal as terms of imports and exports including remittances. Professional/Independent Director continue to be in Therefore, the contagion effect of the global the Board of SCB Nepal Limited. I, Neeraj Swaroop economies cannot be underestimated. For Nepal, 2.46 and Mr. Sujit Mundul, continue to represent the tourism, foreign aid, big budget projects including 2.46 Standard Chartered Group on the Board of Standard FDIs, exports and remittances are areas which Chartered Bank Nepal Limited. could prove to be vulnerable as a result of the global economic meltdown. 2.42 During the period, Standard Chartered Group nominated Peter Warbanoff and Aniruddha Bose Against the backdrop of a difficult overall economic as Alternate Director to Sushen Jhingan and Neeraj scenario, Nepal recorded a satisfactory growth Swaroop respectively replacing Robert Green and during the review period as evidenced by FYE Corporate Governance
2004-05
2005-06
2006-07
2007-08 Ranjan Ghosh respectively with effect from 1st 2008/09 economic indicators. In line with this, 2008-09 February 2009. Rajeev Uberoi, Alternate Director to the Bank was also able to achieve good results Return on Total Assets In Percent Anurag Adlakha, resigned from Standard Chartered due mainly to the efforts, focus and commitment Bank. We are delighted to have new Alternate displayed by the management team in creating Directors on our Board. I would like to thank Mr. shareholders value.
The Bank has undertaken various initiatives to make it an employer of choice. Continuous focus 3,052 is placed on staff’s learning and development. The We are committed to Bank has embraced Work-life Balance by creating ensuring“ the integrity of a conducive work environment which could fulfill 2,493 the different needs of individuals. Ours is probably the only Bank in the country to introduce a five day 2,116 governance. In addition to week, which allows our people to stay on leave on 1,754 alternate Sundays. the established committees, 1,582 we have committees on The Diversity and Inclusion Council in the Bank continued to address the different strands of Diversity and Inclusion, Health diversity including women, and the differently-abled. and Safety, the Environment, Ministry of Finance and the Central Bank have played important roles in driving the financial sector
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2007-08 Outserve Plus and Community reforms in Nepal. We appreciate any initiatives that 2008-09 are aimed at driving reforms and strengthening the Financial statements and notes Partnership. In NPR Mn overall financial system in the country. Support and Total Shareholder Equity ” guidance received from our Regulators and the
www.standardchartered.com/np 9 Chairman’s Statement continued
high level of governance of the Standard Chartered Enterprise (SME) portfolio. We are happy the Group have been the cornerstones for us in way we are growing and we want to maintain this consistently delivering good results, in maintaining momentum. We have taken a proactive approach exemplary governance standards and in providing towards managing risks for ensuring that we do not superior products and services. experience “any surprises” in both the businesses. In the meanwhile, we are keeping a firm grip on Continued support and trust received from our costs. As in the past, in the coming year, we will valuable customers, shareholders and other stick to our strategy and will continue to focus on stakeholders has enabled us to remain the Best deepening our relationships with our clients. Bank in Nepal - Leading the Way. I sincerely appreciate their efforts to bestow us with their It has been more than a year that the country encouragement, trust and loyalty. has seen in place an elected government. The successful holding of Constituent Assembly elections and the formation of an elected government has injected renewed hope for peace, Our `Sustainability’ agenda revolves around several security and economic progress after more than a decade long instability and strife. At this juncture, pillars,“ including community investment, environment SCB Nepal intends to make meaningful contribution in accelerating the economic activities of the country protection, financial inclusion, tackling financial crime and attaining a higher growth trajectory.
and responsible selling and marketing. On behalf of SCB Nepal’s Board of Directors, I ” take this opportunity to thank all the stakeholders for being our Right Partner. I express my sincere As a leading corporate citizen, our approach has appreciation to our valued customers and been to take a long-term view of our actions and shareholders for guiding and supporting us in our use our core skills and services to make a positive journey. I would also like to express my deepest contribution to the society. Our `Sustainability’ gratitude to our people for exhibiting their seamless agenda revolves around several pillars, including engagement and commitment to take the Bank to community investment, environment protection, insurmountable heights. I am sure we will deliver financial inclusion, tackling financial crime and another year of record performance next year. Let responsible selling and marketing. Building a me assure you that we are in a strong position to sustainable business is an integral part of our long- deal with the emerging challenges and opportunities term strategy to enhance shareholder value. on an ongoing basis.
We are cautious in expanding our risk assets portfolio. Our asset quality is conservative, diverse and tightly secured. We are disciplined in the risks we take. Our Wholesale Banking business comprising of Origination & Client Coverage (OCC) Neeraj Swaroop and Financial Markets (FI) exhibited broad-based Chairman growth by continuing to benefit from the increasing market share. Consumer banking, on the other hand, also displayed strong growth in all fronts of Auto, Mortgage, Credit Card & Personal Loan including our recently introduced Small and Medium
10 Annual Report and Accounts 2008-2009 Leading the way in helping realize local dreams CEO & Director’s Report
CEO & Director’s Report
The CEO & Director presents this report together underlying businesses and disciplined management with the Balance Sheet and statement of Profit and of risks and costs. Loss for the year ended 15 July 2009. The report is in conformity with the provisions of the Companies Representation Act 2063 and Bank & Financial Institution Act 2063 As at 15 July 2009, the Bank maintained seventeen including the directives issued by the Nepal Rastra points of representation which included thirteen Bank. branches and four extension counters. In addition to this, services were also extended to our customers Standard Chartered Bank Nepal is in good through twenty one ATMs located at different parts shape and we continue to deliver strong financial of the country. performance. Through the disciplined execution of our strategy and the hard work of our team, we Wholesale Banking have delivered another set of strong results. An Wholesale Banking (WB) business grew at an increase in the net profit after tax of 25.18 percent impressive rate with broad spectrum income stream over last year to Rs. 1.03 billion is commendable in - across the client base and product range. Given the backdrop of difficult economic and socio-political the challenging operating environment in terms conditions. This has been achieved by relentless of political uncertainties and global meltdown – focus on cost and risk management while pursuing maintaining the credit quality of the portfolio and limited business growth. at the same time supporting clients with enhanced credit facilities were the biggest challenges. Standard Chartered There is a marginal decline in the volume of risk “ Bank Nepal is in assets compared to the preceding year. The Bank Our focus continued to be on the Clients as has been able to manage the credit portfolio better we provided solutions under trade finance, good shape and we as a result of which the loan loss provision balance cash management, foreign exchange and risk has contracted to Rs. 201 million this year from management products offering. Our strategy was continue to deliver Rs. 245 million last year. Similarly the ratio of Non- to remain or become the core bank to our clients, performing credit to Total credit has reduced from deepen relationship with them and provide them strong financial 0.92 percent to 0.66 percent. The provisions made with a broad range of products. The focused are adequate to cover all the potential credit losses approach and client centric strategy enabled us performance. of the Bank as of the balance sheet date. to dominate our chosen areas of activity like Gold Sale, Trading in FCY and LCY, Structured Trade, ” After transfer to general reserve Rs. 205.02 million, – Sujit Mundul, CEO Acquisition Financing and Investment Solutions. We exchange fluctuation reserve Rs. 31.92 million, continued to build scale cautiously - more so - in the proposed dividend Rs. 465.98 million and bonus cross border space and catered to client needs by share Rs. 465.98 million, total retained earnings as offering sophisticated value added solutions. at 15 July 2009 stood at Rs. 239.49 million. This performance reflects a very good momentum in the Our uncompromising international standard of due diligence was appreciated by our clients as they understood the benefits it brought along. Especially In Rs. ‘000s In Rs. ‘000s the global financial crises made everyone alert and 15-Jul-09 16-Jul-08 % Change recognize risk which enabled us to tap the “flight Operating Profit 1,506,109 1,248,432 20.64% to safety” of deposits. The bank adopted and successfully embedded the Basel II guidelines. It Transfer to General Loan Loss Provision 56,635 69,885 (18.96)% enabled us to effectively use collaterals in managing Provision for Tax 442,091 374,452 18.06% risk and reduce capital allocation. WB continued to Net Profit After Provision and Tax 1,025,115 818,921 25.18% monitor risk / reward using advanced tools and by Issue of Bonus Shares 465,983 310,392 50.13% introducing new parameters like RWA, etc. Booking Proposed Cash Dividend 465,983 496,627 (6.17)% and sell down of assets were initiated to enhance return for the shareholders. The merger of American
12 Annual Report and Accounts 2008-2009 overview Business review
Market Extension: The Bank has launched SME Banking – Holistic Branch Expansion Bank expanded its footprint by opening its Narayangarh Branch relocation The Bank has recently Banking Solutions, targeting small and medium scale enterprises. Branch. Sujit Mundul, CEO, SCB Nepal inaugurated the Bank’s 13th branch relocated its existing branch at Main Road located at Lion’s Chowk, Narayangarh, Chitwon. Biratnagar to Hanumandas Road.
Express Bank Representative Office in Nepal with which was launched last year and is now gaining the Bank as part of our global acquisition was momentum. completed successfully. In order to enhance the plastic money culture in the Consumer Banking country, our suite of plastic money –Rupee and USD Consumer Banking priorities continue to be Credit Card, Prepaid Rupee and USD Card and customer centric product innovation, service Proprietary ATM Cards have provided alternatives to excellence, investment for the future and appropriate Travellers Cheques and Cash. risk based pricing. The `Voice of Customer’ survey is an integral tool During FY 2008/09, despite a number of challenges to gauge the level of satisfaction of our customers. posed by the political conundrum, coupled with The Mystery Shopping Concept that we conducted sporadic shortage of fuel and acute load shedding, gave us significant insight into our business and Consumer Banking fared pretty well in growing both customers’ perception. Further, our strategy to take quality assets and deposits. direct feedback from customers on a regular basis Corporate Governance has also helped us in enhancing the value to our We launched SME business with a focus to develop customers. This is an ongoing journey and it is our both asset and liability business in this segment, commitment that we will continue to add value to which is heading in the right direction. our customers.
In line with our commitment to expand at the right We have developed a system whereby each time and in the right place, we opened two more customer’s complaint/feedback gets captured and branches- one each in Narayangarh and Birgunj. responses / resolution to each of these issues are With these two additional branches, our branch provided within an agreed timeline. network has now reached seventeen. In line with the customers’ feedback and our Similarly for the ease of transactions, we installed aspiration to extend footprints in the right places, we four more ATMs- one each in Lazimpat, Naya have plans to open two more branches in the year Baneshwar, Narayangarh and Itahari. With these four 2009/10. additional ATMs, our total ATM network has now reached twenty one. Outserve Plus - Continuously Improving the Way We Work Our commitment to Treating Customers Fairly and In line with the Bank’s strategic intent and our our policies on Mis-selling and Mis- representation commitment to our stakeholders, the Bank has been remain core to our values. successful in embedding a culture of continuous improvement to provide a differentiated, quality In order to simplify banking we are aggressively service to our customers. Continuous efforts in educating our customer base for Online Banking inculcating behavioral changes throughout the Bank Financial statements and notes
www.standardchartered.com/np 13 CEO & Director’s Report continued
Enhancing plastic money culture With a view to enhance Broadening the market reach With a view to reach out to Handling of complex FX transactions Bank has already plastic money culture in Nepal, the Bank has since long been the Women segment in the market, the Bank has introduced built its capability to underwrite and manage customer offering Credit, Debit and Prepaid cards to the market. Diva Account built-in with an attractive product packages. transactions relating to Interest Rate and other Derivatives.
have enabled our people to find ways for improving Future Plans the way we work to achieve Operational Excellence. As mentioned above, we intend to add two more branches in the year 2009/2010. As the political and We have an Outserve Council in the Bank to ensure economic landscape continues to be challenging that transformational agendas and improvement and the impact of the global meltdown in Nepal activities on service and processes are delivered to particularly in respect of remittances is yet to be “delight customers”. fully known, we will continue to be cautious in our approach. Any new investment will depend on how We treat all customer complaints as golden conducive the environment is. Hence our focus opportunities to better understand what is important will continue to be in improvising on our existing to our customers and to drive service improvement products with focus on quality, customer service and priorities. We are working to make our complaint returns for our stakeholders. tracking system more effective to gauge our service quality and put in place corrective measures for Despite a challenging environment from the Bank’s meeting our customers’ needs and expectations. perspective - future holds opportunities. However, we will approach these opportunities with caution. We are freeing up capacity to support growth Wholesale Bank will stick to its strategy of becoming through simplification of processes and elimination the core bank to the existing clients by further of inefficient practices. deepening the relationships – offering new products and innovative solutions. We also intend to develop We have built a framework to ensure that the new relationships – though on a selective basis. Our Bank’s transformational initiatives being driven by differential capabilities stemming from the Group businesses and functions actually deliver on their expertise vis-à-vis other players in the market enable promises of substantive changes and reasonable us to anticipate and respond to the extraordinary benefits. changes that may take place in the future.
The objective is to add value to the client’s businesses at an acceptable risk.
Nepal, which holds a huge potential to become a popular tourist destination, has witnessed a rise in the flow of tourists into the country. This trend is likely to continue. Similarly, the steady economic growth of India and China is likely to offer significant opportunities for Nepal to act as a trade corridor. Appropriate policy decisions to capitalize on these opportunities are expected to have a positive impact in propelling the economic growth of the country and in transforming the lives of common people through their economic development. The formation of a Wholesale trade of gold The Bank is `Leading the Way’ in Home Remit SCB Nepal has established stable government will provide the much needed Wholesale trade (import and sale) of physical gold in Nepal today. itself as a key player for remittance transactions impetus for economic growth. The Bank was one of the pioneers in introducing this product to the emanating from the Middle East. ‘Standard Nepalese market. Chartered Home Remit’ provides an easy solution to our customers in meeting their needs. The growing trend of inward remittances into the country is likely to play a pivotal role in expanding the consumer market. 14 Annual Report and Accounts 2008-2009 overview Business review
Outserve Plus- Striving for success Bank staff indulge in the morning or afternoon huddles/storming sessions and Online banking: Bank’s Online Banking has gained popularity in brainstorm to find ways to improve both service and product standards with a view of ‘Outserving’ its customers. terms of reliability and security as an alternate banking channel. The Bank today has about 10,000 customers subscribing to this facility.
We are making continuous efforts to better our declining trend. The overall business momentum in revenue streams through innovation as well as by the country remained slow owing to the concerns introducing products which provide value added in political stability, security situation, power financial solutions to our customers. Our prime supply, labour relations and the global economy. objective is to provide safety to our loyal depositor Nepal’s economic growth rate in last FY 2008/09 is base by maintaining a healthy net-worth and liquidity estimated to have declined as the agriculture sector position. As a Bank, we are resilient with a good suffered from adverse weather conditions and non- appetite for acceptable risks as we have a strong agriculture sector also could not perform better due balance sheet coupled with our expertise in striking mainly to unstable socio-political situations. a proper balance between risks and growth. We will combine our global capability, deep local knowledge Against the backdrop of a difficult economic and creativity to outperform the competition. and political environment, we have been able to maintain our credit quality owing to our robust risk In line with our brand promise to be The Right management procedures. We continue to stick to Partner, we will continue to invest in our people, the fundamentals of good banking. Clear strategy, processes and systems so as to improve our quality broadening and deepening our relationships with of service for customer delight. For our communities existing clients, rigorous monitoring, debating on we will endeavor to make a real difference. We will risk-return dynamics, etc are pivotal to our ongoing Corporate Governance consciously drive and maintain our high level of success in risk management. governance. For our shareholders we shall strive to continue providing them with superior returns. Auditor CSC & Co; Chartered Accountants, were Credit Environment reappointed as Statutory Auditors for FY 2008/09 by The last Financial Year remained very challenging in the 22nd Annual General Meeting of the Bank held terms of risk management. Since the onset of the on 25th of November 2008. They are not eligible for financial crisis about two years ago, there have been reappointment as Auditors. We would like to thank catastrophic effects in the major global economies them for their contribution made during their tenure with contraction in GDPs, bankruptcies of large as Auditors of the Bank. As per the recommendation number of corporates and financial institutions of the Audit Committee, this meeting will decide on and sharply rising unemployment particularly in the appointment of the auditor for next year. the developed western world. The instability and uncertainty in the global economy is not yet over. Proposed Dividend Though Nepal was relatively insulated from the The 253rd meeting of the Board of Directors of the global financial crisis, the sharp and sudden drop in Bank has proposed dividend to the shareholders of commodity prices globally and severe fluctuations the Bank for the year ended 15 July 2009 at the rate in exchange markets have had adverse impacts of 50% in cash and issue of bonus share of one for in the country’s corporate sector. The continued each two shares held. security concerns and political uncertainty in the country, very high inflation level, growing energy crisis, frequent industrial and transport strikes (bandhs) were some other key elements affecting the country’s credit environment in the last FY. Financial statements and notes
Unfavorable macroeconomic situation and tough Sujit Mundul competition in the banking industry also affected Director and CEO the credit environment. Industrial sector recorded a www.standardchartered.com/np 15 Our Approach to Corporate Responsibility
The importance of taking a sustainable approach to businesses can be illustrated by the extraordinary dislocation and disruption in financial markets globally in 2008. Banks with unsustainable business models collapsed or were rescued by governments.
In this context, we believe that our sustainability large extent, mitigate lack of credit delivery system agenda must take into account the fundamental to the unreached population of the country. The task of re-establishing confidence and trust in banks Bank’s association with this business has been whilst continuing to maintain an unwavering focus for long in that SCB Nepal is the promoter of few on addressing the longer-term challenges that the rural development banks and Rural Microfinance world faces. Development Centre (RMDC). The Bank is represented in the Board of RMDC, an eminent So our approach to sustainability focuses both on wholesale lending micro finance entity. To facilitate continuing to manage our core banking practices onward lending to the rural population for the responsibly and on the seven specific areas which development of microfinance in Nepal, the Bank have been at the heart of our sustainability strategy has been lending to rural development banks and for some years. These are outlined as below: NGO’s.
Access to financial services Sustainable finance The Bank is improving access to financial services to The world will need to generate twice the energy majority of population of Nepal and is committed to it does today but with half the carbon. The Bank help bring who are not in realm of financial services believes in minimizing the environmental impact of into the mainstream economy. This is vital part of whatever it does thereby influencing its customers promoting economic growth and will help to bring and suppliers to do likewise through its sustainable people out of poverty. lending practices and procurement processes.
The Bank considers that presence of an extensive The Bank has a policy in place on Environmental risk network of micro finance institutions would, to a in lending since 1995. After 2003, Social and Ethical factors were also included in the policy where each credit application, regardless of its size is required to be identified, evaluated and if necessary, mitigate the Social and Environmental risks.
Tackling financial crime To effectively manage risks from financial crime and to minimise the risk of our products and services being used by money launderers, we use a multi- layered approach which starts with ‘Know Your customer’ (KYC)/ Customer Due Diligence (CDD) procedure from the time a customer opens an account. It also includes modern systems to screen suspicious transactions.
Walkathon 2008 A glimpse of the inauguration Commitment to communities For the past 7 years in a row, the Responsible selling and marketing ceremony of Bank’s annual fund raising event Walkathon Bank has been awarding scholarships to 15 meritorious students As a result of the global financial crisis, many people 2008. Such types of fund raising events are organized and outstanding teachers of Shree Mahendra Shanti Madhyamik have witnessed the value of their investments to give continuity to initatives like `Seeing is Believing’, Vidyalaya, Balkot Bhaktapur. Living with HIV/AIDS and Other Community activities.
16 Annual Report and Accounts 2008-2009 Leading by touching lives Our Approach to Corporate Responisbility continued
Environment Day 2009 The Bank organized various programs Making a difference The Bank extended financial support Leading by touching lives SCB Nepal entered into an to mark the World Environment Day 2009. Solar energy to the Koshi Flood victims with a view to assist government in agreement with Tilganga Eye Centre (TEC) for sponsoring 600 exhibition put-up by Environment Committee of the Bank in Naya providing immediate relief measures. CEO Sujit Mundul handed cataract surgeries between period October 2008 to July 2009. Dr Baneshwore and Lazimpat premises were major attractions. over a cheque of NPR 500,001 to Finance Minister Baburam Sanduk Ruit, Director TEC and Sujit Mundul, CEO, SCB Nepal Bhattarai at his office in Singhadurbar. exchange agreement after signing the same.
drop. This has prompted increased customer this through our businesses. To achieve our goal of and regulator awareness around the mis-selling continuing to be a truly a great brand in the market, of financial products and further highlights how we have invested strategically in our brand through responsible selling and marketing has to be at the various communication vehicles and community heart of Banking. initiatives. Key sponsorships include Pro-Am event of the prestigious Surya Nepal Golf Tournament, Supporting our customers to make the right financial Senior Nepal National Cricket Team, VOW Top 10 decisions sits at the core of our business. We have College Women Competition etc. always taken the protection of customer’s funds seriously while endeavoring to match individual In line with sharing our best practices and being customer’s risk profiles to the products offered to at the forefront of developing banking standards them. in the local market and our intent of partnering the regulators in the reform process/policy changes, the Great place to work Bank sponsored a workshop on ‘World Financial Over the past five years, the number of our Crisis and its impact in Nepal’ organized by employees has substantially increased. We Independent Business News (IBN). recognize that it is increasingly important to have a diverse, talented and engaged workforce to drive the Community Investment growth opportunities we have in our markets. With As a leading corporate citizen with a responsibility rapid growth across our franchise and changing to help ensure the country’s sustained growth and customer and employee demographics, the development, our approach is to take a long-term Bank believes that our innovative and sustainable view of our actions and using our core skills and approach to managing our people is a source of services to make a positive contribution to our competitive advantage. society. Our work with local communities also helps
To sustain our success in future, along with the talents, diversity and values of our people, we refreshed awareness of our values as a guiding We recognize that compass of responsible behaviors in 2008. it is increasingly In 2007, we made good progress in three key areas as part of our approach to managing our people: important to have a Diversity and Inclusion (D&I), Employee Engagement diverse, talented and and Health and Safety. engaged workforce The Brand We place our brand, our most valuable asset, at the to drive the growth heart of our strategic intent to be the world’s best international Bank, leading the way in Asia, Africa opportunities we and the Middle East. Our brand promise is to be We care With a view to assist Prayash Nepal, a drop-in centre for street children, SCB Nepal handed over a set of computer and stationery items for the ‘Right Partner’ to our customers, communities, providing the children’s with an opportunity to learn and develop. have in our markets. staff, stakeholders and regulators, and we practice
18 Annual Report and Accounts 2008-2009 overview Business review
‘Sahayogi Haat Haru’ To assist Koshi Flood victims, the Bank partnered with Go Greeen campaign Under the ‘Go Green’ campaign, SCB Annapurna Post in their fund raising initiative `Sahayogi Haat Haru’. On behalf of Nepal planted approximately 80 saplings of flowers and trees the Bank, Diwakar Poudel, Head of Corporate Affairs handed over an additional alongside Hariharbhawan Road in Lalitpur. The Executive Chief financial assistance of NPR 200,000 under the initiative. of Lalitpur Sub-Metropolitan City and Chief Executive Officer of SCB Nepal jointly inaugurated this initiative.
us to engage our employees, provide opportunities has been conducting Walkathon –an annual fund for product innovation and differentiate our brand. raising event every year since 2003. Walkathon 2008 witnessed an active support and participation With an objective to undertake various community from all our stakeholders’ i.e. staff, vendors, initiatives in Nepal, SCB Nepal has constituted customers and the community and made this Standard Chartered Nepal Community Partnership event a great success. `Standard Chartered Nepal Forum (SCNCPF) which has been registered with Walkathon’ continues to remain a signature event of District Administration Office and has received the Bank. affiliation from Social Welfare Council. Under the ‘Vitamin A Capsule distribution’ project, ‘Seeing is Believing’ and ‘Living with HIV’ are the volunteers from SCB Nepal joined the teams from two major initiatives of the Bank under its ‘Believing Helen Keller International (HKI) and the Nepal in Life’ campaign launched in 2003. Technical Assistance Group (NTAG) to raise awareness and provide support to community health Seeing is Believing (SiB) volunteers during the Nepal National Vitamin A Seeing is Believing is our global programme to help Program’s distribution days on 19th & 20th April. tackle preventable and curable blindness. Launched Corporate Governance in 2003, this programme has already reached over World Sight Day was celebrated on 12th of five million people in 17 countries, contributing to over November 2008. An agreement was signed two million sight restorations by the end of 2008. between the Bank and Tilganga Eye Centre (TEC) for conducting a minimum of 15 screening eye Through the ‘Standard Chartered Nepal Walkathon’, clinics with different community partners and for the Bank provides a platform to engage cross sponsoring 600 cataract surgeries. The Bank has sections of our community to raise funds. The Bank been instrumental in restoring sights to more than
Vitamin A Capsule Distribution For the past Give blood... give life With the help of Blood Transfusion We have a vision- Seeing is Believing Patients after having undergone 2 years, Standard Chartered Bank has been Centre, Nepal Red Cross Society, the Bank organized a blood cataract surgery at a camp jointly organized by Tilganga Eye Centre and Financial statements and notes supporting Vitamin A Capsule distribution program donation camp at its premises in Naya Baneshwore. About 50 SCB Nepal. in Kathmandu Valley through Helen Keller Nepal. customers and staff members donated blood through this camp. The program supports feeding of Vitamin A Capsule to children between the age of 5-60 months.
www.standardchartered.com/np 19 Our Approach to Corporate Responisbility continued
4,000 people till date. In FY 2008/09 alone, the Minister’s Relief Fund at a special ceremony held Bank helped in restoration of sight to approximately at Ministry of Finance. 800 people. 25 Eye Clinics were conducted in l Contributed NPR 200,001 in partnership with different parts of the country through which ~ 9,000 Annapurna Post (AP), a national daily in support underprivileged people in the community got an of their initiative `Sahayogi Haat Haru’ as an opportunity of treatment. immediate relief measure to Koshi flood victims. The assistance was channeled through Nepal Under the Phase II program of SiB, SCB Group Red Cross Society to the victims. provided a financial assistance of USD 20,400 for l For the sixth consecutive year, the Bank procurement of the eye equipments to the Hetauda continued its support to the deserving students Community Eye Hospital, Hetauda. of Shree Mahendra Shanti High School in Bhaktapur by providing incentives/scholarships Living with HIV through VISCOSS programme. Living with HIV, is the Bank’s global HIV and AIDS l Organised a Blood donation camp with the education programme that aims to reduce the technical assistance from Nepal Red Cross number of new HIV infections, reduce stigma Society, Blood Transfusion Centre. More than associated with HIV, and meet our Clinton Global 50 staff members and customers donated blood Initiative (CGI) commitment to educate one million through this camp. people about HIV and AIDS by 2010. We care... Economic Journalist Gajendra In the capacity of co-sponsor of Senior Nepal National Budathoki receiving a financial assistance of NPR Cricket Team, SCB Nepal branded the Team for 50,000 for his medical treatment from the CEO of Giving people the facts about HIV and AIDS enables SCB Nepal. Mr. Budathoki had earlier met with a them to avoid risky behavior and also dispels the ICC World Cricket League Div 5 Cricket Tournament fatal motorcycle accident. myths that drive stigma. Education is part of our held in Jersey and for the ACC Trophy held in Kuala Group Policy on HIV. This takes place via face-to- Lumpur, Malaysia. The Bank has an exclusive right face workshops and is supplemented by an online to brand the Senior National Cricket Team for its eLearning module. Education sessions are run entire overseas matches. We are proud to be the by our own staff volunteers; who have undergone co-sponsor of our National Team which has brought `Train the Trainers’ program and termed as “HIV many glories to the nation. We are continuing with Champions”. this sponsorship for year 2009/10 also.
The Bank extended support to Karuna Bhawan Environment (a shelter home for the HIV infected women and Environment being high on our agenda, the Bank children) by facilitating a skill learning training to has set up an Environment Committee which help HIV infected women learn skills and generate undertakes various initiatives for the Environmental income to support their livelihood. conservation and awareness.
Similarly, the Bank has been sponsoring the In our response to the growing environmental education and living expenses of two HIV- infected challenges, the Bank launched a Greenery project by children from Maiti Nepal (MN) for three consecutive planting 80 saplings alongside Hariharbhawan road Recognizing outstanding performance years. in Kathmandu. It may be recalled that the Bank had National Cricketer Mehboob Alam receiving a cash award of NPR 50,000 from Sujit Mundul, CEO SCB planted 100 trees in Lakeside and New Road area Nepal for his heroic 10 wicket haul in one innings in Various activities were organized by SCB Nepal to of Pokhara in partnership with Green Pokhara in the the ICC World Cup Division 5 Cricket Tournament mark the World AIDS Day 2008. year 2007/08. against Mozambique. SCB Nepal is the sponsor of Senior Nepal National Cricket Team. Our Focus on Youth, Health, Education and To mark the Environment Day 2009, several activities Environment were organized which included solar energy exhibition, vehicle de-carbonizing, wearing green, In line with our effort to be ‘The Right Partner’ to the staff holding placards with environmental messages community where we operate, the Bank undertook at the Bank’s entrance, car pooling, cycling to office, various initiatives such as: walking to office etc. l Supported the Koshi flood victims by making a contribution of NPR 500,001 to the Prime
20 Annual Report and Accounts 2008-2009 Leading with our sustainable business strategy Our People, Our Strength
With an aspiration to start Driving performance through productivity and engagement and grow their career with an Engaging employees is a key to retaining talent and helps to motivate them to ‘go the extra mile’, which organization that strives to be is particularly important in today’s environment.
a Great Place to Work in, a We genuinely believe that in the current challenging total of 89 new joiners started environment it is more important than ever to focus on our people. Establishing a strength based their journey with the Bank in organization has been our priority where we know our people and help them to be at their best. We set this fiscal year. As compared clear performance expectations so that everyone knows what they are doing and how to perform at to last year, our staff strength their best. We care about what happens to them, both in and outside work and inspire them to learn was 392 as of July 15, and grow. 2009 against 377 full time We place particular importance on living the equivalent staff in July 15, organization’s values embedded in our company culture. We believe that our behavior and culture 2008. The current mix of male which come from living our organization’s values are and female ratio is 62:38. sources of our competitive advantage. Keeping these priorities in mind the following A total of 3 ‘Right Start’ Induction Programs for initiatives/activities were conducted in the year under the 68 New Joiners were conducted during the review: year. The program helps our new joiners make a great start with the Bank by enabling them to gain Feel the Russh an overview of how the company works and also ‘Feel the Russh’ workshop, which was originally helps them become more quickly integrated into the rolled out a few years back was again conducted organization. We believe that this program provides between 26-29 August for the staff who had not the new joiners the foundation that they need to attended the workshop earlier. The workshop aimed build a wonderful career and perform at their best. at providing clarity to the Bank’s aspiration and strategy and boosting the passion and energy of individuals and teams to achieve the organizational mission.
Annual staff function The Bank recognizes the dedication, commitment and engagement of its people for its success and making it a Great Place to Work. Celebrating this at a function organized by the Bank staff members were honored for their dedicated 5, 10, 15 and 20 years of service to the Bank.
Living with Hiv week We at Standard Chartered Nepal are committed to Feel the Russh Staff actively participating in `Feel Diversity & Inclusion Female staff members greeted all their male the pledge that SCB Group has made to the Clinton the Russh’ workshop organized by the Bank. The counterparts in the Bank by presenting them with `palpali dhaka topi’ in Global Initiative to educate one million people on workshop was held with a view to provide clarity on celebration of Bhai Tika festival during ‘Tihar’. SCB Group’s Vision and Strategy. HIV/AIDS by 2010.
22 Annual Report and Accounts 2008-2009 Leading the way through our talented and diverse team Our People, Our Strength continued
Handicraft exhibition Diversity & Inclusion (D & I) Committee Jubilant after the training Members of staff in jubilant mood after undergoing `Great put-up an exhibition of handicraft items under a program Managers’ training program organized by the Bank. organized to mark International Women’s Day.
We aim to create an inclusive workplace environment where everyone has the opportunity to maximise their more about Vitamin A capsule distribution program in the country which has received financial support potential and perform to their very best. from the SCB Group, 11 of our people volunteered to actively participate in this program in Kathmandu.
Wellness Week- May 10-15, 2009 Wellness Week was observed in the Bank from May With the objective of educating, creating awareness 10-15 with particular focus on Physical, Mental and and removing stigma around HIV/AIDS through Emotional Health. our Living with HIV program both to internal and external stakeholders, we increased the number of Various activities were organized to mark the HIV Champions who conducted many activities to Wellness Week which generated a good level of celebrate the ‘Living with HIV Week’ starting from interest and participation from our people in all the World AIDS Day, 1 December 2008. branches.
Various activities like sharing stories, quotes, thoughts, creating the ambience in the work place Other engagement programs Our people from various departments and branches was held throughout the week with a very high level participated in the “Soaltee Crowne Plaza Super of enthusiasm, creativity and engagement by all our Sixes Cricket Tournament – 2008” organized people by Soaltee Crowne Plaza and in the “Inter Bank Volleyball Tournament 2009” organized by Nepal Blood donation camp Rastra Bank (NRB) on the occasion of its 54th With very active participation of staff, a blood Anniversary. donation camp was organized by the Bank in collaboration with Nepal Red Cross Society on January 24, 2009 in the Bank’s Head Office premises.
International Women’s Day 2009 celebration With the objective to make our female colleagues feel special and to appreciate their contribution in the workplace, International Women’s Day 2009 was celebrated by organizing various engaging activities with a good level of cheer and participation of staff.
Vitamin A capsule distribution program To get more closely associated with the Bank’s ‘Seeing is Believing’ initiative and to understand
24 Annual Report and Accounts 2008-2009 overview Business review
Ready for the tournament Members of SCB Nepal After the training Participants of training program `How to influence others and win co- Volleyball Team that represented the Bank in Inter Bank operation’ organized by the Bank. Volleyball Tournament ogranised by Nepal Rastra Bank to mark its 54th anniversary.
Learning and Development In addition to the cash rewards, our people’s We believe that development of our people is crucial for the growth and prosperity of the organization extraordinary contributions are rewarded by as they are one of the determining factors for the success of the company. We provide our excellence awards, appreciation letters and diverse workforce with the skills needed to serve learning and development opportunities. our customers and operate in an international environment. Number of learning opportunities - In-house trainings, Local programs by external trainers/organizations, Global trainings, Short term attachment programs in the Group, On the job Diversity & Inclusion learning inside and outside the country were given In today’s world the only thing that remains continuity during the year. A total of 1630 man-days constant is change. Our markets, customer were spent in learning and development programs groups and talent pools are constantly during the review period. changing. Our success depends on our ability to manage these changes, and our approach Corporate Governance Building great leaders to Diversity and Inclusion (D&I). D&I lie in the Our strength based philosophy stands on our heart of our Values. We focus on inclusion to belief that we get the maximum contribution of our ensure that each individual feels valued for people by playing to their strengths. Ensuring that what they bring to the Bank. we get the best from our people is the responsibility of every leader in the Bank. For this purpose and Our country D&I Committee along with the in our continuous efforts to sharpen and enhance Group’s D&I Council are involved in driving D&I the leadership skills of our managers, the following agenda across the Bank. Leadership Development Programs were conducted in this fiscal year:
• “Leading Teams Effectively” • “How to Build a Winning Team” • “Great Managers Program” Financial statements and notes
www.standardchartered.com/np 25 Our approach to corporate governance
A Synopsis of Conduct is adopted to help us meet this Details relating to steps taken by the management objective by setting out the standards of for strengthening Corporate Governance in the behavior we must follow with each other and organisation. with our customers, communities, investors and regulators. l The Board of Standard Chartered Bank is responsible and accountable to the shareholders Analysis and ensures that proper corporate governance The Board of Standard Chartered Bank Nepal standards are maintained. Limited is responsible for the overall management of l The Audit Committee meets quarterly to review the Company and for ensuring that proper corporate the internal and external inspection reports, governance standards are maintained. The Board is control and compliance issues and provides also responsible & accountable to shareholders. feedback to the Board as appropriate. l The Manco (Management Committee) The report describes how the Board has applied represented by all Business and Function Heads the principles and provisions of the Nepal Rastra is the apex body managing the day to day Bank directives on Corporate Governance and operations of the Bank. Chaired by the CEO, the provisions of Company Act, 2063 and Bank it meets at least once a month for formulating and Financial Institution Act, 2063 (the “Corporate strategic decisions. Governance Code”). The directors confirm that: l The Annual General Meeting is used as l throughout FY 2065/066, the Company an opportunity to communicate with all complied with all the provisions of the Corporate shareholders. Governance Code. l To ensure compliance with applicable laws, l throughout FY 2065/066, the Company enhance resilience to external events and avoid complied with the listing rules of Nepal Stock reputational risk, the Board has adopted SCB Exchange Limited. Group policies and procedures. l throughout FY 2065/066, the Company l Ultimate responsibility of effective Risk complied with the Securities Registration and Management rests with the Board supported by Issuance Regulation, 2065 Audit Committee, Manco, Country Operational l the Company has adopted a code of conduct Risk Group (CORG), Asset and Liability regarding securities transactions by directors on Committee (ALCO) and Credit Risk Management further terms no less than required by the Nepal Committee (CRMC) Rastra Bank Directives and the Company Act l Embracing exemplary standards of governance and that all the Directors of the Bank complied and ethics wherever we operate is an integral with the Code of Conduct throughout FY part of our Strategic Intent. The Group Code 2065/066.
The Board As at the date of this report, the Board is made up of the Non-Executive Chairman, one Executive Director and four Non-Executive Directors of which one is professional /independent Director appointed as per the regulatory requirement and one Director, representing the public shareholders. The Board composition complied with the regulatory requirements. Four Directors including the Non- Executive Chairman are nominated by the SCB Group to represent it in the Board in proportion to its shareholding. The Board meets regularly and has a formal schedule of matters specifically reserved Annual General Meeting Chairman of Standard Meeting the Hon’ble President Neeraj Swaroop, Chairman of for its decision. These matters include determining Chartered Bank Nepal Limited, Neeraj Swaroop SCB Nepal Board of Directors and Sujit Mundul, CEO, SCB Nepal and reviewing the strategy of the Company, annual delivering Chairman’s speech in the 22nd Annual paying a courtesy call on the Hon’ble President Dr. Ram Baran Yadav. General Meeting of the Bank.
26 Annual Report and Accounts 2008-2009 Leading the way through a collective vision Our Approach to Corporate Governance continued
The effectiveness of the Company’s internal control system is reviewed regularly by the Board, its committees, Management and Internal Audit.
budget, overseeing statutory and regulatory Ram Bahadur Aryal - Non Executive Director- compliance and issues related to the Company’s Chairman capital. The Board is collectively responsible for the Anurag Adlakha - Director - Member success of the Bank. Sushen Jhingan, Director - Member Gopi Krishna Bhandari - Member During the year under review, the Board held 13 Kabir Tamrakar - Member Secretary board meetings of which 4 were held by circulations. The Directors are given accurate, timely and clear All members of the Audit Committee are either non- information so that they can maintain full and executive directors or independent of business. The effective control over strategic, financial, operational, responsibilities of the Committee are in congruence compliance and governance issues. with the framework defined by the NRB Directives and the Company Act. The following table shows the number of Board and Audit Committee meetings held during the year: Management Committee (Manco) The Management Committee (Manco) represented by all Business and Function Heads of the Bank is Audit the apex body that manages the Bank’s operation Board Committee on a day to day basis. Manco meets formally at Number of meetings in FY 2065/066 13 4 least once a month and informally as and when Neeraj Swaroop 7 - required. The strategies for the Bank are decided Anurag Adlakha* 8 - and monitored on a regular basis and decisions are Sushen Jhingan* 12 - taken jointly by this Committee. The CEO chairs the Sujit Mundul 13 - Manco. Ram Bahadur Aryal 13 4 Arjun Bandhu Regmi 13 - As at the date of this report, the composition of the Manco was as follows: * Mr. Anurag Adlakha attended two Board meetings through his alternate Director Mr. Rajeev Uberoi and Mr. Sushen Jhingan attended Mr. Sujit Mundul, Chief Executive Officer one Board meeting through his alternate Director Mr. Peter Warbanoff. Mr. Anurag Mishra, Head Wholesale Banking Ms. Anju Sharma, Head Consumer Banking Audit Committee Ms. Rakhi Singh, Chief Financial Officer As required by the local regulations, the Board has Mr. Sudesh Khaling, Chief Information Officer formed an Audit Committee with clear terms of Mr. Shobha Bd. Rana, Head Legal and Compliance reference. The Audit Committee meeting is normally & Assurance held on a quarterly basis. The Committee reviews Mr. Diwakar Poudel, Head Corporate Affairs internal audit reports, Nepal Rastra Bank Inspection Ms. Bina Rana, Head Human Resources reports, Statutory Audit reports, Bank’s financial Mr. Gopi Bhandari, Senior Manager Credit condition, internal audit/controls issues, compliance issues, etc. The Committee provides guidance/ feedback to the Management through the Board of Directors as appropriate.
The Independent/Professional Director chairs the Committee for ensuring complete independence. The composition of the Audit Committee as on 15/07/2009 is as follows:
28 Annual Report and Accounts 2008-2009 To ensure that the key operational risks are managed in a timely and effective manner, a framework of policies, procedures and tools has been established within the Bank to identify, assess, monitor, control and report such risks. Business review The effectiveness of the Company’s internal control Relations with Shareholders system is reviewed regularly by the Board, its The Board recognizes the importance of good committees, Management and Internal Audit. The communications with all shareholders. There Audit Committee has reviewed the effectiveness are regular information, both financial as well of the Bank’s system of internal control during as non-financial, published by the Company the year and provided feedbacks to the Board as for shareholder’s information. The AGM is used appropriate. as an opportunity to communicate with all the shareholders. The Internal Audit monitors compliance with policies/ standards and the effectiveness of internal control The notice of the AGM, as required by the Company structures across the Company through its program Act, was sent to shareholders at least 21 days of business/unit audits. The Internal Audit function is before the date of the meeting at their mailing focused on the areas of greatest risk as determined addresses available in the Company’s records. In by a risk-based assessment methodology. Internal addition to that the notice and agenda of the AGM Audit reports are periodically forwarded to the Audit were also published twice in the national level daily Committee. The findings of all audits are reported to newspaper for the shareholders information. the Chief Executive Officer and Business Heads for immediate corrective measures. Internal Control The Board is committed to managing risks and to Risk Governance controlling its business and financial activities in Through its risk management framework the a manner which enables it to maximize profitable Bank seeks to efficiently manage credit, market business opportunities, avoid or reduce risks which and liquidity risks which arise directly through the can cause loss or reputational damage, ensure Bank’s commercial activities as well as operational, Corporate Governance compliance with applicable laws and regulations and regulatory and reputational risks which arise as a enhance resilience to external events. To achieve normal consequence of any business undertaking. this, the Board has adopted the SCB Group policies and procedures of risk identification, risk evaluation, As part of this framework, the Bank uses a set of risk mitigation and control/monitoring. principles that describe its risk management culture. The principles of risk management followed include: • Balancing risk and reward. • Disciplined and focused risk taking to generate a return. • Taking risk with appropriate authorities and where there is appropriate infrastructures and resource to manage them. • Anticipating future risks and ensuring awareness of all risks. • Efficient and effective risk management and control to take competitive advantage.
Ultimate responsibility of the effective management of the risk rests with the Board. The Audit Committee, within an authority delegated by the Board, reviews risk areas and monitors the activities of Management Committee (Manco), Country Operational Risk Group (CORG), Asset and Liability
Committee (ALCO), and Credit Risk Management Financial statements and notes Committee (CRMC).
www.standardchartered.com/np 29 Our Approach to Corporate Governance continued
The effectiveness of the Company’s internal control system is reviewed regularly by the Board, its committees, Management and Internal Audit.
The committee governance structure seeks to that the cash flow demands can be met through ensure that risk management standards and policies asset maturities supported by customer deposits are cascaded down through the organization and wholesale raisings where required. The Asset/ from the Board to business and functional level. Liability Management Committee (ALCO) under Information is communicated through the functional, the chairmanship of CEO meets at regular intervals business committees to the Board which seeks to to review the Deposit/Investment strategy of the ensure that key risk issues are addressed at the Company and regulatory compliance. The ALCO is appropriate level and to provide assurance that responsible for both statutory and prudential liquidity. standards and policies are being followed. Operational Risk Credit Risk Operational Risk is the risk of direct or indirect loss Credit risk is the risk that counterparty to a due to an event or action resulting from the failure financial instrument will cause a financial loss to of internal processes, people and systems, or from the Company by failing to discharge an obligation. external events. To ensure that the key operational Credit exposure includes individual borrowers and risks are managed in a timely and effective manner, connected groups of counterparties and portfolios, a framework of policies, procedures and tools has in the banking and trading books. Standards are been established within the Bank to identify, assess, approved by the Board and the delegation of credit monitor, control and report such risks. authorities are overseen by the CEO. Procedures for managing credit risk are determined at the business A robust Operational Risk Management and level with specific policies and procedures being Assurance Framework (ORMAF) has been adapted to different risk environment and business established as per SCB Group guidelines to goals. Business risk officers are in place to maximize supervise and manage the operational risk in the the efficiency on decision making. The Credit Risk Bank. A Country Operational Risk Group (CORG) Management Committee chaired by the CEO under the chairmanship of CEO is in place to reviews and monitors the Bank’s Assets Portfolio. supervise and direct the management of operational risk at country level whilst Business and Functional Market Risk Operational Risk Groups are responsible for Market risk is the exposure created by potential managing business and functional level operational changes in market prices and rates. The Bank risk in the Bank. Similarly, each unit in the Bank has is exposed to market risk arising principally from a Unit Operational Risk Manager responsible for customer driven transactions. The objective of managing the operational risk at the unit level. the Bank’s market risk policies and processes is to obtain the best balance of risk and return while Bank’s existing operational risk management meeting our customers’ requirements. Market risk is system has been further strengthened by creating managed by Asset and Liability Committee (ALCO) a separate unit viz. Country Operational Risk which agrees policies and levels of risk appetite. Management & Assurance headed by a Senior Manager. The unit commenced independent Liquidity Risk Assurance Reviews and Reporting from April 2008. Liquidity risk is defined as the risk that the Bank either does not have sufficient financial resources available to meet all its obligations and commitments as they fall due, or can access them only at excessive costs. It is the policy of the Bank to maintain adequate liquidity at all times and for all currencies, and hence, to be in a position to meet all obligations as they fall due. The liquidity risk is managed both on a short term and a medium terms basis. In the short term, the focus is on ensuring
30 Annual Report and Accounts 2008-2009 To ensure that the key operational risks are managed in a timely and effective manner, a framework of policies, procedures and tools has been established within the Bank to identify, assess, monitor, control and report such risks.
Regulatory Risk objective of maximizing the shareholder’s value. The Business review Regulatory risk includes the risk of non-compliance senior management of the company is engaged and with the regulatory requirements. The Bank has responsible for prudent capital management at all implemented appropriate compliance framework, times. policies and procedures and has effectively managed the regulatory risk. While compliance team In compliance with the regulatory requirement is responsible for establishing and maintaining the of increasing the capital base as prescribed by compliance risk, compliance of such policies and the Central Bank, the Bank has a well drafted procedures is the responsibility of each employee. capital plan in place. The Bank is comfortable in meeting the minimum capital requirements and is Legal Risk very strongly positioned to meet the performance Legal risk is the risk of unexpected loss, including benchmarks as outlined in the plan. reputational loss arising from defective transactions or contracts, claims being made or some other The capital plan takes the following into account: event resulting in liabilities or other loss for the Bank, • Regulatory Capital requirements failure to protect the title to and ability to control the • Increase in the capital required due to projected rights to assets of the Bank (including intellectual business growth, market uncertainties and property rights), changes in the law, or jurisdictional stresses. risk. The Bank has appropriate legal framework, • Available sources of capital and capital raising policies and procedures in place and has effectively options managed the legal risk. Legal risk is managed by the Legal Team. Crisis Management The Bank has in place a Crisis Management Plan and a Country Crisis Management Team to manage
Reputational Risk Corporate Governance Reputational Risk is the risk of failure to meet the and resolve effectively serious crisis that may affect standards of performance or behaviors, expected the operations of the Bank. In addition to this the, by stakeholders in the way in which business is Bank has a detailed Business Continuity Plan (BCP) conducted. It is the Bank policy that, at all times, to manage disruptions of operations and a Disaster the protection of the Bank’s reputation should take Recovery Plan (DRP) to manage Technological priority over all other activities, including revenue problems. generation. Reputational risk is not a primary risk, but may arise from the failure to effectively mitigate one or more of credit, liquidity, market, legal and regulatory and operational risk. It also arises from the failure to comply with social, environmental and ethical standards. A Reputational Risk Committee within the Bank has been established which meets at regular intervals to review and monitor this risk. All employees are responsible for day to day identification and management of reputational risk.
Capital Management The Bank’s capital management approach is driven by its desire to maintain a strong capital base to support the development of its business and to meet the regulatory capital requirements at all times. Financial statements and notes As Capital is the centerpiece of the Bank’s performance matrix, a sound capital management forms the very core of the overall performance landscape to ensure that the Bank delivers on its
www.standardchartered.com/np 31 Our Approach to Corporate Governance continued
Health, Safety and Security 4. Speak up: Staff must Speak Up if they suspect, We consider the health and safety of our people and or know of, any actual, planned or potential the integrity of our business as most important aspect behaviour that breaks, or may break, any laws, of our operations. We regularly conduct audits of regulations or Group standards. Details are Health & Safety and Environment Management and contained in the Speaking Up Guide. conduct inspections of buildings and departments to 5. Combatting financial crime: Staff must comply provide assurance to all stakeholders that risks are with laws, regulations and Group standards on being managed effectively and that there is a healthy money laundering, terrorist financing and fraud and safe working environment for both our staff and prevention. our customers. As part of Health & Safety corrective 6. Avoid conflicts of interest: Staff are action plans, the Bank during the year has invested in responsible for identifying conflicts of interest. constructing a new emergency escape staircase at our Once these have been identified staff must Head Office building and uplifted/renovated the cafeteria take immediate steps to resolve the problem. facility for the staff apart from redesigning and renovating Definitive guidelines can be found in the Group work areas in many parts of Head Office building in Naya and Business Conflicts of Interest Policies and Baneshwore. We replaced our existing chairs with Group Procedures. recommended safer chairs for our entire staff members. 7. Do not deal in shares when in possession of inside information: Staff must comply with We believe these actions will undoubtedly help our brand the Group’s Personal Account Dealing Policy to stand out from our competitors. Ultimately they underpin eliminate the risk of insider dealing. our business and will help us to grow stronger. 8. Treat customers fairly (TCF): Staff must follow the Group’s seven TCF standards. Group Code of Conduct – Summary 9. Respect customer confidentiality: Staff 1. Comply with laws, regulations and Group should not disclose customer or Group data standards: Staff are individually responsible for unless authorised to do so. complying with the spirit, not just the letter, of laws, 10.Treat people fairly and with respect: All regulations and Group standards. employees are entitled to a safe working 2. Reject bribery and corruption: Staff must not give environment that is free from discrimination, or accept bribes nor engage in any form of corruption. bullying and harassment. 3. Avoid being compromised by gifts and 11.Responsibilities to our communities and entertainment: Staff must not offer, give or accept regulators: Staff must be responsive to their inappropriate gifts or benefits to or from third parties. communities and demonstrate exemplary Definitive guidelines can be found in the Group Gifts governance at all times. and Entertainment Policy.
32 Annual Report and Accounts 2008-2009 Leading with innovative products and services Additional Information as required by section 109 of the Companies Act 2006
Achievements of the current year as of the date Industrial or Professional Relations of the of preparation of the report, and opinion of the Company Board of Directors on future actions The Company maintains a good professional Un-audited first month result of the current relationship with its customers, people and financial year is as follows: regulators. Senior managers of the Company represent in number of councils, committees (Rs.) and sub-committees of regulators’, professional organizations, associations, and Risk Assets: 14.65 billion forums. Deposits: 36.97 billion Operating profit: 117.86 million The Company is a Member of Nepal Bankers Profit before bonus and taxes: 153.31 million Association, Federation of Nepalese Chamber Net profit for the period: 97.56 million of Commerce & Industry, Nepal Britain Chamber of Commerce & Industry, Nepal The bank will continue to invest in building the India Chamber of Commerce & Industry, franchise and expand its footprints cautiously. Management Association of Nepal and Nepal It will continue to strike a fine balance between Institute of Company Secretary. growth and revenue. Similarly strong vigilance will be maintained over the quality of assets. Changes made in the Board of Directors, and More innovative products will be introduced reasons therefore to add value to our customers by adhering Please refer the section ‘Corporate to their needs. We shall be customer centric Governance’ under Chairman’s Statement. rather than product centric and will continue to improve the way we work to delight our Main factors affecting the business customers and other stakeholders. We will Please refer the sections ‘A Challenging continue to invest in our people through cross Environment’ and ‘Conclusion’ under border placements, trainings and knowledge Chairman’s Statement and ‘Credit enhancement and other measures in order Environment’ under CEO & Director’s Report. to promote a meritocratic work performance culture and with the objective of increasing Board of Directors’ Reaction to Remarks made, overall productivity and grooming managers for the future. if any, in the Audit Report There are no adverse remarks made in the auditor’s report. A review of the business during the previous year: Please refer the sections ‘Wholesale Banking’ & ‘Consumer Banking’ under CEO and Director’s Report.
Impact if any to the business of company from national and international situation: Please refer the Chairman’s statement and sections ‘Wholesale Banking’ & ‘Consumer Banking’ under CEO and Director’s Report.
34 Annual Report and Accounts 2008-2009 Business review The amount recommended for distribution as them about their involvement, if any, in the dividend transactions of the shares of the company The Board has recommended paying Rs. NIL. Directors and office bearer have not 465,983,200 by way of bonus shares and involved in the shares transactions of the bank Rs. 465,983,200 by way of dividend to the in FY 2065/66 as per the declaration provided shareholders. by them to the Company.
Forfeited Shares Particulars of information furnished by any There are no shares forfeited during the fiscal Director or any of his close relatives about his year. personal interest in any agreement connected with the company signed during the previous Transaction between the Bank and its Subsid- financial year iary Company and the Progress There are no such information furnished by made in the Business the directors and any of their close relatives. The Bank does not have a subsidiary company. Purchase of own Shares The bank has not purchased its own shares in Main transactions carried out by the company the year under review. and its subsidiary company during the financial year and any important change in the business Whether or not there is an internal control of the company during the period system, and if there is any such system, details The Bank does not have a subsidiary
thereof Corporate Governance company and there is no significant change Please refer section ‘Our approach to in the business of the company during the Corporate Governance’ under CEO & period. Director’s Report.
Information furnished to the company by its Particulars of the total management expenses basic shareholders during the previous finan- of the previous financial year cial year The management expenses of the financial There are no basic shareholders in the bank year is Rs. 529.38 million (total of Staff as no shareholder, except the SCB Group, Expenses and Other Operating Expenses as holds more than 1% of the paid up capital of per Schedule 4.23 & 4.24 of the Financial the Company. There has been no information Statements.) received from the SCB Group in this regard.
Particulars of the ownership of shares taken up by the Directors and office-bearers of the company during the previous financial year, and information received by the company from Financial statements and notes
www.standardchartered.com/np 35 Additional Information as required by section 109 of the Companies Act 2006 continued
A list of members of the Audit Committee, to Directors. However directors representing remunerations, allowances and facilities being SCB Group are not entitled to meeting received by them, particulars of functions dis- allowance as per the Company’s policy. Meeting allowances paid to the Directors are charged by the Committee, and particulars of as follows: suggestions, if any, offered by the Committee. Please refer section ‘Our approach to Ram Bahadur Aryal 130,000.00 Corporate Governance’ under CEO & Arjun Bandhu Regmi 130,000.00 Director’s Report. Remunerations, allowances and bonus paid Remunerations, allowances and facilities: to the CEO in FY 065/066, who also was a The Committee members and the Chairman Director of the Board, is Rs. 21,391,556.00 have been paid meeting allowance of NPR 5000 and NPR 6000 per meeting respectively, Dividends yet to Be Collected By Shareholders except to the members representing the Total dividends yet to be collected by the SCB Group and employees of SCB, Nepal. shareholder amounts to Rs. 10,312,848 No remuneration and other facilities were provided to them. The total amount of Audit Detail of property’s buy or sell as per Clause Committee meeting allowance paid during the fiscal year was NPR 24,000; this was paid 141 to Mr. Ram Bahadur Aryal, the only member Nil. eligible to get meeting allowance, for attending the Audit Committee meetings as Chairman of Detail of the transactions held between Associ- the Committee. ated Companies as per Clause 175 Nil. Functions discharged by the Committee: Please refer section ‘Our approach to Any other matter to be mentioned in the Board Corporate Governance’ under CEO & of Directors’ report under Companies Act, 2063 Director’s Report. Nil
Payments due, if any, to the company from any Director, Managing Director, Executive Chief or basic shareholder of the company or any of their close relatives, or from any firm, company or corporate body in which he is involved Nil
Remunerations, Allowances and Facilities to the Directors, the Managing Director, the Ex- ecutive Chief and other Office-bearers Directors have not been paid any remuneration and no facilities have been provided to them. Meeting allowance is paid at Rs.11,000 to the Chairman and Rs. 10,000
36 Annual Report and Accounts 2008-2009 Schedule- 13 Ashwin end: (Related to Sub Rule (1) of Rule 22 of Securities Maximum- Rs. 9,200, Minimum- Rs. 6,627, Last- 7,750, and total transacted number of shares- Registration and Issuance Regulation, 2065 41030 respectively.
1. Report of Board of Directors Poush end: Covered in the same chapter of this annual report. Maximum- Rs. 8,036, Minimum- Rs. 4,350, Last- Rs. 4,733, and total transacted number of shares- Business review 2. Report of Auditor 54790 respectively. Included in the same chapter. Chaitra end: Maximum- Rs. 4,900, Minimum- Rs. 4,100, Last- 3. Audited Financial Detail Rs. 4,699, total transacted number of shares- 61825 Balance Sheet, Profit & Loss, cash flow detail and and transacted days-56 respectively. related schedules included in this report. Aashadh end: 4. Detail relating to Legal Actions Maximum- Rs. 6,050, Minimum- Rs. 4,599, Last- (a) If any case filed by Organized Institution in Rs. 6,010, total transacted number of shares- 62504 the quarter, and transacted days-65 respectively. On 2065.06.08 two cases of Likhat Badar and Jalsaji, on 2065 Bhadra a case of Certiorari and on 2066.01.13 a case of Dishonour of Cheque 6. Problem and Challenge The inflationary pressure has been a major internal were filed against the Bank as co defendant. challenge as it continues to push the cost of operations. Furthermore, the retention of talent (b) If any case relating to commission of and staff engagement in such a competitive disobedience or criminal offence filed by or market is also attracting much attention from the against the Promoter or Director of Organized management. Institution. No Such information has been received. The major external problems pertain to the unstable socio-political situation of the country and the (c) If any case relating to commission of financial deteriorating risk environment. The frequent strikes crime filed against any Promoter or Director. are a huge impediment to the smooth functioning of
No Such information has been received. Corporate Governance the economy as a whole. Alongside the repercussion of the fluid local business milieu, the contagion of 5. Analysis of share transaction and progress of the global financial crisis is also impacting the overall Organized Institution financial environment. (a) Management view on share transaction of the Organized Institution happened at Securities Your bank is well placed to monitor and proactively Market. deal with the challenges posed by internal as well Since price and transactions of the Bank’s shares as external factors. We intend to continue being are being determined by the open share market the pioneer in introducing new products and operations thorough a duly established Stock services to better serve the market and deal with Exchange, management view on this is neutral. the competition. Our portfolio is being managed well by emphasizing more on quality rather than (b) Maximum, minimum and last share price quantity. The employees are engaged into various of Organized Institution including total trainings and programs to continuously upgrade transacted number of shares and transacted their performance and enhance their motivation day during each quarter of last year. level. A crisis management plan is in place to deal with exigencies.
7. Corporate Governance Incorporated under the same chapter in this annual report. Financial statements and notes
www.standardchartered.com/np 37 Board of Directors
Neeraj Swaroop, (Chairman) Sujit Mundul, (Chief Executive Officer) Anurag Adlakha, (Director) Neeraj Swaroop, the Chairman of SCB Sujit Mundul, the Director & CEO of SCB Anurag Adlakha, Director of the Bank, is a Nepal is an MBA and BE with more than 25 Nepal holds the degree of M. Sc., BA (Hons) Chartered Accountant by profession. He years of experience in the banking sector of in Economics & English, LLB, CAIIB and AIB. has over 22 years of professional career of which 17 years in Indian Banking industry He has also served as a Lecturer in Kolkata which 17 years in financial services industry including Bank of America and HDFC bank. and possesses more than 34 years of banking including HSBC India. He is presently He is currently serving as the Regional Chief experience in SCB. working as the Chief Financial Officer, India Executive, India and South Asia. and South Asia.
Sushen Jhingan (Director) Ram Bahadur Aryal, Arjun Bandhu Regmi Sushen Jhingan, Director of this Bank, is an (Independent Director) (Director representing Public MBA with 12 years of banking experience in Ram Bahadur Aryal, Independent/ Shareholders) Strategic Sourcing and Corporate Real Estate Professional Director is an MA in Economics Arjun Bandhu Regmi, Director representing Services, government and regulatory relations. with more than 37 years experience public shareholders, is an MA in He is presently working as a Director - Public in Nepal Rastra Bank (Central Bank of Economics and holds a Post Graduate Affairs, India. Nepal) holding senior positions in banking Diploma in Population Studies. He has operation, planning, training, foreign experience as Associated Professor in exchange and Human Resources. Tribhuvan University affiliated campuses and also has more than 22 years experience in the field of media business.
38 Annual Report and Accounts 2008-2009 Sudesh Khaling Sujit Mundul Bina Rana Management Team Chief Information Officer Chief Executive Officer Head – Human Resources Gopi Bhandari Diwakar Poudel Rakhi Singh Senior Manager – Credit Head – Corporate Affairs Chief Financial Officer
Shobha Bahadur Rana Anurag Mishra Anju Sharma Head Legal and Compliance & Assurance Head – Wholesale Banking Head - Consumer Banking Origination & Client Coverage
Gorakh Rana Rajib Giri Anil K Shrestha Amit Koirala Senior Relationship Manager Senior Relationship Manager Senior Relationship Manager Senior Relationship Manager Development Organisations Financial Institutions
Origination & Client Coverage Consumer Banking
Deepak K C Dambar B Saru Sudhir Sharma Bishnu Pokharel Head – Shared Distribution Value Centre GM, Mortgage & Auto Value Centre GM, Credit Card Relationship Manager & Personal Loans Consumer Banking
Sanjeev Mishra Vishnu Manandhar Abhishek Shrestha Sujeet Karn Value Centre GM, SME Branch Manager – Lalitpur Manager – UN Counter Branch Manager - Biratnagar
Consumer Banking Consumer Banking Share Operations
Tara Manandhar Chintamani Rai Ujjwal Dixit Madhab Pd. Regmi Branch Manager - Birgunj & Hetauda Branch Manager - Narayangarh Assistant Manager, Share Operations Company Secretary Origination & Client Coverage Arun Devkota Relationship Manager Navin Manandhar Sunil Pokharel Sandeep Wagle Relationship Manager Business Development Manager Relationship Manager Transaction Banking Consumer Banking
Pushpa Rana Kishoree Manandhar Probin Acharya Neelam Sharma Head – Priority Banking Head Credit – Consumer Banking Branch Manager- Lazimpat Branch Manager- Naya Baneshwore Consumer Banking
Mukesh Paudel Dhan Thapa Raj Kumar Gurung Netra Subedi Branch Manager - Lakeside & Branch Manager- Bhairahawa & Branch Manager – Dharan Branch Manager - Nepalganj Newroad, Pokhara Butwal SCB Nepal Head Office, New Baneshwor Lazimpat Branch Lalitpur Branch
Branches ATM sites
Bhairahawa Hetauda Bhairahawa PO Box 14, Budha Chowk Colony Bank Road, Hetauda - 4 Siddhartha Nagar, Hotel Pawan Building Burmeli Tole, Bhairahawa, Siddhartha Nagar Makwanpur, Nepal Boudha, Kathmandu 977-71-524029, 524429 Tel. 977-57-523019, 524972 Boudha, Near Boudhanath stupa 977-71-524039 Fax. 977-57-525695 Dharan Biratnagar Lalitpur BP Koirala Institute of Health Science PO Box 201, Hanumandas Road PO Box 3990 Biratnagar - 8, Nepal Jawalakhel, Lalitpur, Nepal Itahari Chowk, Sunsari Tel. 977-21-528983 Tel. 977-1-5540544, 5540566 Bhu Pu Gorkha Departmental Store, Dharan Biratnagar Road Itahari 1, Sunsari Fax. 977-21-528982 Fax. 977-1-5523266 Jawalakhel, Lalitpur Butwal Lazimpat Standard Chartered Bank Nepal Ltd Milan Chowk PO Box 3990 Butwal, Municipality - 11 Lazimpat, Kathmandu, Nepal Kamladi, Kathmandu Rupandehi, Nepal Tel. 977-1-4418456 , 4417428 Kashtamandap Departmental Store Tel. 977-71-546832 Fax. 977-1- 4417428 Lakeside, Pokhara Fax. 977-71-546882 Hotel Snowland, Lakeside, Pokhara Nepalgunj Dharan Surkhet Raod, Ward No 13 Lakeside, Pokhara Panna Kamala Complex Nepalgunj Banke, Nepal Standard Chartered Bank Nepal Ltd Ward No 7/100Ka, Buddha Marga Tel. 977-81-525514, 520022 Dharan - 7 Sunsari, Nepal Fax. 977-81-525515 Lazimpat, Kathmandu Tel. 977-25-520505, 530980 Standard Chartered Bank Nepal Limited Fax. 977-25-530981 Pokhara, Lakeside Maharajgunj ATM PO Box 08 Shubham Departmental Store Head Office Lakeside Baidam P.O.Box 3990 Pokhara, Nepal Mangal Bazar, Patan Naya Baneshwar, Kathmandu, Nepal Tel. 977-61-462102, 462805, 461746 Patan, Mangal Bazar, Lalitpur, Nepal Tel. 977-1-4782333, 4783753 Fax. 977-61-462318 Fax. 977-1- 4780762 Nrayangarh, Bharatpur Standard Chartered Bank Nepal Limited Pokhara, New Road P.O.Box 08 Naya Baneshwor, Kathmandu New Road, Pokhara, Nepal Standard Chartered Bank Nepal Limited Tel. 977-61-536230 Extension Counters Fax. 977-61- 531761 New Road, Pokhara UN Counter – Lalitpur New Road, Pokhara, Nepal BP Koirala Medical College – Dharan Birgunj British Gurkhas PPO – Pokhara New Road, Kathmandu Adarsha Nagar-13, Bishal Bazar, New Road, Kathmandu, Nepal Manipal Counter - Pokhara Birgunj Nepal Tel. 977-51-529499 Pulchowk, Lalitpur Fax. 977-51-529677 Near UNDP Complex, Lalitpur, Nepal
Narayangarh Thamel, Kathmandu Lion's Chowk, Ward-4 Arcadia Building, Near Yin Yang Restaurant Narayangarh,Bharatpur Thamel, Kathmandu Tel. 977-56-571277 Kathmandu Guest House Fax. 977-56-571279 World Trade Center, Tripureshwor World Trade Center, Tripureshwor
42 Annual Report and Accounts 2008-2009 CSC & Co Chartered Accountants
1955, Tanka Prasad Ghumti Sadak Babar Mahal PO Box: 4861, Kathmandu, Nepal Tel: +977-1-4259414, 4268798, 4251518 Fax: +977-1-4244255 E-mail: [email protected]
Auditors’ Report
To the Shareholders of Standard Chartered Bank Nepal Limited
Financial statements and management’s responsibility We have audited the accompanying financial statements of Standard Chartered Bank Nepal Limited which comprise the balance sheet as of July 15, 2009 (Ashadh 31, 2066) and the profit and loss account, statement of changes in equity and cash flow statement for the year then ended and a significant accounting policies and other explanatory notes. These financial statements are the responsibility of the Bank’s management.
Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Nepal Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
Report on the requirements of Banks and Financial Institutions Act 2063 and Company Act 2063 We have obtained satisfactory information and explanations asked for, which to the best of our knowledge and belief were necessary for the purpose of our audit; the returns received from the branch offices of the bank were adequate for the purpose of the audit; the financial statements including the Balance Sheet, the Profit and Loss Account and the Cash flow Statement have been prepared in accordance with the methods and format specified by Nepal Rastra Bank, and they are in agreement with the books of accounts of the Bank; and the accounts and records of the Bank are properly maintained in accordance with the prevailing laws.
To the best of our information and according to the explanations given to us, in the course of our audit, we observed that the bank has taken actions for protection of the interest of depositors and investors; the capital fund and risk bearing fund were adequately maintained; loans have been written off as specified; the business of the Bank was conducted satisfactorily and the Bank’s transactions were found to be within the scope of its authority. We did not come across cases where the board of directors or any director or any office bearer of the Bank has acted contrary to the provisions of law or caused loss or damage to the Bank or committed any misappropriation or violated directives of Nepal Rastra Bank.
Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Bank as of 31 Ashad, 2066 (15 July 2009), and its financial performance and cash flows for the year then ended in accordance with Nepal Accounting Standards, the directives from Nepal Rastra Bank, Bank and Financial Institution Act 2063 and Company Act 2063.
Madan Krishna Sharma Partner Date : 12 August 2009 CSC & Co. Place: Kathmandu Chartered Accountants Financial Statements and Notes to Accounts continued
Balance Sheet as at 15 July 2009 (31 Ashad 2066)
Capital & Liabilities Schedule This Year Previous Year Rs. Rs. 1. Share Capital 4.1 931,966,400 620,784,000 2. Reserves and Funds 4.2 2,120,503,331 1,871,763,996 3. Debentures and Bonds 4.3 - - 4. Loans and Borrowings 4.4 300,000,000 - 5. Deposit Liability 4.5 35,871,721,127 29,743,998,794 6. Bills Payables 4.6 72,941,748 87,397,021 7. Proposed and Unpaid Dividend 476,296,048 506,366,940 8. Income Tax Liability 4,262,601 2,051,550 9. Other Liabilities 4.7 809,776,754 503,426,025 Total Liabilities 40,587,468,009 33,335,788,326
Assets Schedule This Year Previous Year Rs. Rs. 1. Cash Balance 4.8 463,345,996 414,875,467 2. Balance with Nepal Rastra Bank 4.9 1,851,132,637 1,266,273,524 3. Balance with Banks/Financial Institutions 4.10 822,684,902 369,094,223 4. Money at Call and Short Notice 4.11 2,055,549,000 2,197,537,600 5. Investments 4.12 20,236,121,082 13,902,819,011 6. Loans, Advances and Bills Purchased 4.13 13,679,756,990 13,718,597,132 7. Fixed Assets 4.14 137,292,540 117,272,258 8. Non-Banking Assets 4.15 - - 9. Other Assets 4.16 1,341,584,862 1,349,319,111 Total Assets 40,587,468,009 33,335,788,326
Contingent Liabilities Schedule 4.17 Declaration of Directors Schedule 4.29 Capital Adequacy Table Schedule 4.30 (Ka 1) Statement of Credit Risk Schedule 4.30 (Kha) Statement of Eligible Credit Risk Mitigation Schedule 4.30 (Ga) Statement of Operational Risk Schedule 4.30 (Gha) Statement of Market Risk Schedule 4.30 (Nga) Key Indicators Schedule 4.31 Significant Accounting Policies Schedule 4.32 Notes to Accounts Schedule 4.33 Statement of Loan Availed by Promoter Shareholders from Other Bank and FIs by Pledging Their Shares Schedule 4.34 Unaudited Financial Results (4th Quarter) Schedule 4.35 Comparision of Unaudited and Audited Financial Statements Schedule 4.36
Schedules 4.1 to 4.17 form integral part of the Balance Sheet As per our report of even date
Rakhi Singh Sujit Mundul Neeraj Swaroop Chief Financial Officer CEO & Director Director
Arjun Bandhu Regmi Anurag Adlakha Ram Bahadur Aryal Madan Krishna Sharma Director Director Director Partner for and on behalf of CSC & Co. Chartered Accountants Kathmandu Date : 12.08.2009
44 Annual Report and Accounts 2008-2009 Profit and Loss Account for the period 16 July 2009 to 15 July 2009 (1 Shrawan 2065 to 31 Ashadh 2066)
Particulars Schedule This Year Previous Year Rs. Rs. 1. Interest Income 4.18 1,887,221,257 1,591,195,526 2. Interest Expenses 4.19 543,786,600 471,729,700 Net Interest Income 1,343,434,657 1,119,465,826 3. Commission and Discount 4.20 235,468,846 276,432,255 4. Other Operating Incomes 4.21 33,191,251 32,594,085 5. Exchange Fluctuation Income 4.22 480,030,913 345,653,020 Total Operating Income 2,092,125,667 1,774,145,186 6. Staff Expenses 4.23 253,055,504 225,256,195 7. Other Operating Expenses 4.24 276,326,674 230,571,409 8. Exchange Fluctuation Loss 4.22 - - Operating Profit Before Provision for Possible Loss 1,562,743,489 1,318,317,582 9. Provision for Possible Losses 4.25 56,634,631 69,885,338 Operating Profit 1,506,108,858 1,248,432,244 10. Non-Operating Income/ (Loss) 4.26 22,098,317 1,682,509 11. Provision for Possible Loss Written Back 4.27 101,075,167 90,634,940 Profit from Ordinary Activities 1,629,282,342 1,340,749,693 12. Income/(Expenses) from Extra Ordinary Activities 4.28 (15,356,059) (28,039,437) Net Profit after considering all Activities 1,613,926,283 1,312,710,256 13. Provision for Staff Bonus 146,720,571 119,337,296 14. Provision for Income Tax 442,091,176 374,451,952 • Current Year’s 443,119,138 381,493,368 • Upto Previous Year - - • Deferred Tax (1,027,962) (7,041,416) Net Profit/Loss 1,025,114,536 818,921,008
Schedules 4.18 to 4.28 form integral part of this Profit and Loss Account As per our report of even date
Rakhi Singh Sujit Mundul Neeraj Swaroop Chief Financial Officer CEO & Director Director
Arjun Bandhu Regmi Anurag Adlakha Ram Bahadur Aryal Madan Krishna Sharma Director Director Director Partner for and on behalf of CSC & Co. Chartered Accountants
Kathmandu Date : 12.08.2009
www.standardchartered.com/np 45 Financial Statements and Notes to Accounts continued
Profit and Loss Appropriation Account for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Particulars Schedule This Year Previous Year Rs. Rs.
Income 1. Accumulated Profit up to Previous Year 383,287,577 557,724,177 2. This Year’s Profit 1,025,114,536 818,921,008 3. Exchange Fluctuation Fund - - 4. Capital Adjustment Fund upto Previous Year - - Total 1,408,402,113 1,376,645,185 Expenses 1. Accumulated Loss up to Previous Year - - 2. Current Year’s Loss - - 3. General Reserve Fund 205,022,907 163,784,202 4. Contingent Reserve - - 5. Institutional Development Fund - - 6. Dividend Equalisation Fund - - 7. Employees Related Reserves - - 8. Proposed Dividend 465,983,200 496,627,200 9. Proposed Issue of Bonus Shares 465,983,200 310,392,000 10. Special Reserve Fund - - 11. Exchange Fluctuation Fund 31,918,164 22,554,206 12. Capital Redemption Reserve Fund - - 13. Capital Adjustment Fund - - Total 1,168,907,471 993,357,608 Accumulated Profit/(Loss) 239,494,642 383,287,577
As per our report of even date
Rakhi Singh Sujit Mundul Neeraj Swaroop Chief Financial Officer CEO & Director Director
Arjun Bandhu Regmi Anurag Adlakha Ram Bahadur Aryal Madan Krishna Sharma Director Director Director Partner for and on behalf of CSC & Co. Chartered Accountants
Kathmandu Date : 12.08.2009
46 Annual Report and Accounts 2008-2009 Statement of Changes in Equity Financial Year 2065/66 (FY 2008/09)
Particulars Share Accumulated General Capital Share Exchange Proposed Capital Capital Profit Reserve Reserve Premium Fluctuation Issue of Adjustment Fund Fund Bonus Shares Fund Total
Opening Balance
as at 16 July 2008 620,784,000 383,287,577 990,293,802 - - 187,790,617 310,392,000 - 2,492,547,996 Adjustments ------Restated Balance
as at 16 July 2008 620,784,000 383,287,577 990,293,802 - - 187,790,617 310,392,000 - 2,492,547,996 Surplus/ Deficit on revaluation of properties ------Surplus/ Deficit on revaluation of investments ------Net Profit for the Period - 1,025,114,536 - - - - - 1,025,114,536 Transfer to General Reserve - (205,022,907) 205,022,907 - - - - - Proposed Dividend - (465,983,200) - - - - - (4,65,983,200) Issue of Bonus Share 311,182,400 - - - - - (310,392,000) - 790,400 Proposed Issue of Bonus Shares - (465,983,200) - - - - 465,983,200 - - Issue of Share Capital ------Exchange Fluctuation Fund - (31,918,164) - - - 31,918,164 - - Capital Adjustment Fund ------Closing Balance as at 15 July 2009 931,966,400 239,494,642 1,195,316,709 - - 219,708,780 465,983,200 - 3,052,469,731
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Cash Flow Statement for the period 16 July 200 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. (45,233,839) (A) Cash Flow from Operating Activities 6,948,938,465 1,862,221,002 1. Cash Receipts 2,128,177,260 1,295,672,504 1.1 Interest Income 1,480,241,128 272,068,274 1.2 Commission and Discount Income 238,616,592 255,436,198 1.3 Income from Foreign Exchange Transaction 352,358,259 5,867,246 1.4 Recovery of Loan Written off 23,770,030 33,176,780 1.5 Other Income 33,191,251 1,621,292,559 2. Cash Payments 1,963,910,721 474,628,760 2.1 Interest Expenses 521,840,234 223,667,612 2.2 Staff Expenses 254,218,116 206,769,247 2.3 Office Operating Expenses 250,890,193 385,040,406 2.4 Income tax Payment 440,908,086 331,186,534 2.5 Other Expenses 496,054,092 240,928,443 Cash Flow before Changes in Working Capital 164,266,539 (4,364,232,028) Decrease/ (Increase) of Current Assets 233,676,234 (436,386,100) 1. Decrease / (Increase) in Money at Call and Short Notice 141,988,600 - 2. Decrease / (Increase) in Short-term Investment - (3,255,242,077) 3. Decrease / (Increase) in Loan and Bills Purchase 44,154,587 (672,603,852) 4. Decrease / (Increase) in Other Assets 47,533,047 4,078,069,747 (Decrease) /Increase of Current Liabilities 6,550,995,692 5,096,978,038 1. (Decrease) / Increase in Deposits 6,127,722,333 - 2. (Decrease) / Increase in Certificate of Deposits - (348,771,311) 3. (Decrease) / Increase in Short Term Borrowings 285,544,727 (670,136,980) 4. (Decrease) / Increase in Other Liabilities 137,728,632 (16,662,637) (B) Cash Flow from Investment Activities (5,990,481,198) (323,460,547) 1. Decrease/ (Increase) in Long term Investment (6,333,302,071) (14,116,435) 2. Decrease/ (Increase) in Fixed assets (24,719,699) 319,814,530 3. Interest Income from Long Term Investment 365,061,547 1,099,815 4. Dividend Income 2,479,025 - 5. Others - 901,800 (C) Cash Flow from Financing Activities 790,400 - 1. Increase/ (Decrease) in Long term Borrowings (Bond, Debenture etc) - 901,800 2. Increase / (Decrease) in Share Capital 790,400 - 3. Increase / (Decrease) in Other Liability - - 4. Increase / (Decrease) in Refinance /Facilities received from Nepal Rastra Bank - 90,216,822 (D) Income/Expense from change in exchange rate in Cash and Bank Balance 127,672,654 29,222,146 (E) Current year’s cash flow from all activities 1,086,920,321 2,021,021,068 (F) Opening Cash and Bank Balance 2,050,243,214 2,050,243,214 (G) Closing Cash and Bank Balance 3,137,163,535
As per our report of even date
Rakhi Singh Sujit Mundul Neeraj Swaroop Chief Financial Officer CEO & Director Director
Arjun Bandhu Regmi Anurag Adlakha Ram Bahadur Aryal Madan Krishna Sharma Director Director Director Partner for and on behalf of CSC & Co. Chartered Accountants Kathmandu Date : 12.08.2009
48 Annual Report and Accounts 2008-2009 Schedule 4.1: Share Capital and Ownership as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This year Rs. Rs. 1. Share Capital 1,000,000,000 1.1 Authorised Capital 1,000,000,000 1,000,000,000 A) 10,000,000 Ordinary Shares of Rs. 100 each 1,000,000,000 - B) - Non-Redeemable Preference Shares of Rs. - each - - C) - Redeemable Preference Shares of Rs. - each - 1,000,000,000 1.2 Issued Capital 1,000,000,000 1,000,000,000 A) 10,000,000 Ordinary Shares of Rs. 100 each 1,000,000,000 - B) - Non-Redeemable Preference Shares of Rs. - each - - C) - Redeemable Preference Shares of Rs. - each - 620,784,000 1.3 Paid Up Capital 931,966,400 620,784,000 A) 9,319,664 Ordinary Shares of Rs. 100 each 931,966,400 - B) - Non-Redeemable Preference Shares of Rs. - each - - C) - Redeemable Preference Shares of Rs. - each -
Share Ownership
Share Capital Share Capital Rs. % Particulars % Rs. 465,588,000 75.00 A. Promoters 75.00 698,974,800 - - 1.1 Government of Nepal - - 465,588,000 75.00 1.2 Foreign Institutions 75.00 698,974,800 - - 1.3 “Ka” Class Licensed Institutions - - - - 1.4 Other Licensed Institutions - - - - 1.5 Other Entities - - - - 1.6 Individuals - - - - 1.7 Others - - 155,196,000 25.00 B. General Public 25.00 232,991,600 620,784,000 100.00 Total 100.00 931,966,400
Details of the Shareholders holding 0.5 % or more of the Total Shares
Sn Number of Name of the Shareholders % of Total Shares Amount Rs. Shares Held 1 4,659,832 Standard Chartered Grindlays Ltd, Sydney, Australia 50.00 465,983,200 2 2,329,916 Standard Chartered Bank, UK 25.00 232,991,600 3 49,500 Priyanka Agrawal 0.53 4,950,000 4 49,500 Avinash Agrawal 0.53 4,950,000 5 49,500 Komal Agrawal 0.53 4,950,000 6 49,500 Shashi Agrawal 0.53 4,950,000 7 49,500 Shankar Lal Agrawal 0.53 4,950,000 8 49,500 Pashupati Soap Industries 0.53 4,950,000 9 47,375 Arjun Bandhu Regmi 0.51 4,737,500
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Schedule 4.2: Reserves and Funds as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 990,293,802 1. General Reserve Fund 1,195,316,709 310,392,000 2. Proposed Issue of Bonus Shares 4,65,983,200 3. Capital Reserve Fund - - 4.Capital Redemption Reserve - - 5. Capital Adjustment Fund - - 6. Other Reserves and Funds - - a) Contingent Reserve - - b) Institutional Development fund - - c) Dividend Equalisation Fund - - d) Special Reserve Fund - - e) Assets Revaluation Reserve - - f) Other Free Reserves - - g) Other Reserves - 383,287,577 7. Accumulated Profit/ (Loss) 2,39,494,642 187,790,617 8. Exchange Fluctuation Fund 219,708,780 1,871,763,996 Total 2,120,503,331
Schedule 4.3: Debentures and Bonds as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. - 1. Debentures - - 2. Bond - - Total ( 1+2 ) -
Schedule 4.4 : Loans and Borrowings as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. A. Local - 1. Government of Nepal - - 2. Nepal Rastra Bank - - 3. Repo Liabilities - - 4. Inter Bank and Financial Institution 300,000,000 - 5. Other Institutions - - 6. Others - - Total A 300,000,000 B. Foreign - 1. Banks - - 2. Others - - Total B - - Total (A+B) 300,000,000
50 Annual Report and Accounts 2008-2009 Schedule 4.5 : Deposit Accounts as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 1. Non-Interest Bearing Accounts 6,174,560,842 A. CURRENT DEPOSITS 6,202,861,116 3,855,500,048 1. Local Currency 3,582,919,639 48,089,639 1.1 Government of Nepal 92,567,910 123,931,954 1.2 “Ka” Class Licensed Institutions 137,475,948 9,206,433 1.3 Other Licensed Institutions 21,749,191 3,165,968,610 1.4 Other Organised Institutions 2,890,040,434 456,274,990 1.5 Individuals 393,747,688 52,028,422 1.6 Others 47,338,468 2,319,060,794 2 Foreign Currency 2,619,941,477 - 2.1 Government of Nepal - 11,559,317 2.2 “Ka” Class Licensed Institutions 25,501,017 - 2.3 Other Licensed Institutions - 1,877,548,029 2.4 Other Organised Institutions 2,099,710,655 352,110,544 2.5 Individuals 221,663,863 77,842,904 2.6 Others 273,065,942 474,043,934 B. MARGIN DEPOSITS 377,959,072 1. Employees Guarantee 239,360,196 2. Guarantee Margin 114,647,316 76,797,871 3. Letter of Credit Margin 118,436,904 157,885,867 4. Others 144,874,852 - C. OTHERS - - 1. Local Currency - - 1.1 Financial Institutions - - 1.2 Other Organised Institutions - - 1.3 Individuals - - 2. Foreign Currency - - 2.1 Financial Institutions - 2.2 Other Organised Institutions - 2.3 Individuals - 6,648,604,776 Total of Non-Interest Bearing Accounts 6,580,820,188
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Schedule 4.5: Deposit Accounts (Continued) as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 2. Interest Bearing Accounts 17,856,134,474 A. SAVING DEPOSITS 19,187,636,692 14,580,554,084 1. Local Currency 15,389,165,289 5,011,067,547 1.1 Organised Institutions 1,980,603,687 9,514,167,068 1.2 Individuals 13,306,329,514 55,319,469 1.3 Others 102,232,088 3,275,580,390 2. Foreign Currency 3,798,471,403 2,361,768,655 2.1 Organised Institutions 1,953,787,903 880,569,361 2.2 Individuals 1,809,147,447 33,242,374 2.3 Others 35,536,053 3,301,013,939 B. FIXED DEPOSITS 7,101,697,629 478,457,766 1. Local Currency 791,923,115 81,269,770 1.1 Organised Institutions 27,340,793 394,787,996 1.2 Individuals 105,071,746 2,400,000 1.3 Others 659,510,576 2,822,556,173 2. Foreign Currency 6,309,774,514 2,391,330,141 2.1 Organised Institutions 5,990,331,061 431,226,032 2.2 Individuals 319,443,453 - 2.3 Others - 1,938,245,605 C. CALL DEPOSITS 3,001,566,618 1,919,285,169 1. Local Currency 2,912,566,877 - 1.1 “Ka” Class Licensed Institutions - - 1.2 Other Licensed Institutions 257,491 1,791,404,856 1.2 Other Organised Institutions 2,480,450,342 127,880,313 1.4 Individuals 431,859,044 - 1.5 Others - 18,960,436 2. Foreign Currency 88,999,741 6,916,000 2.1 “Ka” Class Licensed Institutions - - 2.2 Other Licensed Institutions - 12,044,436 2.3 Other Organised Institutions 88,999,741 - 2.4 Individuals - - 2.5 Others - - D. CERTIFICATE OF DEPOSITS - - 1. Organised Institutions - - 2. Individuals - - 3. Others -
23,095,394,018 Total of Interest Bearing Accounts 29,290,900,939 29,743,998,794 Total Deposits (1+2) 35,871,721,127
52 Annual Report and Accounts 2008-2009 Schedule 4.6: Bills Payable as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 63,123,816 1. Local Currency 60,773,754 24,273,205 2. Foreign Currency 12,167,994 87,397,021 Total 72,941,748
Schedule 4.7 : Other Liabilities as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 61,837,684 1. Pension/Gratuity Fund 61,606,523 - 2. Employees Provident Fund - - 3. Employees Welfare Fund - 119,337,296 4. Provision for Staff Bonus 146,720,571 32,552,503 5. Interest Payable on Deposits 54,442,157 - 6. Interest Payable on Borrowings 56,712 28,929,766 7. Unearned Discount and Commission 30,718,324 201,236,901 8. Sundry Creditors 277,233,810 - 9. Branch Adjustment Account - 59,531,875 10. Others 238,998,657 446,000 a) Audit Fees Payable 446,000 59,085,875 b) Others 238,552,657 503,426,025 Total 809,776,754
Schedule 4.8: Cash Balance as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 382,753,590 1. Local Currency (including coins) 416,767,782 32,121,877 2. Foreign Currency 46,578,214 414,875,467 Total 463,345,996
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Schedule 4.9: Balance with Nepal Rastra Bank as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars Local Currency Foreign Currency Rs. Grand Total Convertible Rs. Rs. INR Foreign Currency Total Rs. 1,266,273,524 1. Nepal Rastra Bank 1,832,777,184 - 18,355,453 18,355,453 1,851,132,637
1,266,273,524 a) Current A/C 1,832,777,184 - 18,355,453 18,355,453 1,851,132,637 - b) Other A/C - - - - -
Schedule 4.10: Balance with Banks / Financial Institutions as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars Local Foreign Currency (Rs.) Grand Total Currency Convertible Rs. Rs. INR Foreign Currency Total Rs. 49,615,608 1. Local Licensed Institutions 51,292,893 - - - 51,292,893 49,615,608 a. Current Account 51,292,893 - - - 51,292,893 - b. Other Account - - - - - 319,478,615 2. Foreign Banks - 196,183,413 575,208,596 771,392,009 771,392,009 319,478,615 a. Current Account - 196,183,413 575,208,596 771,392,009 771,392,009 - b. Other Account - - - - - 369,094,223 Total 51,292,893 196,183,413 575,208,596 771,392,009 822,684,90
Note: Balance as per the confirmation and statement received from respective banks is Rs.1,374,220,555 and the differences have been reconciled.
54 Annual Report and Accounts 2008-2009 Schedule 4.11: Money at Call and Short Notice as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. - 1. Local Currency - 2,197,537,600 2. Foreign Currency 2,055,549,000 2,197,537,600 Total 2,055,549,000
Schedule 4.12: Investments as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars Purpose This Year Rs. Trading Other Rs. 7,157,731,943 1.Government of Nepal Treasury Bills - 9,050,988,434 9,050,988,434 917,150,000 2.Government of Nepal Saving Bonds - 917,150,000 917,150,000 62,733,235 3. Government of Nepal Others Securities (Special Bond) - 30,615,124 30,615,124 - 4. Nepal Rastra Bank Bonds - - - - 5. Foreign Securities - - - - 6. Local Licensed Institutions - 250,613,524 250,613,524 5,675,042,833 7. Foreign Banks - 9,895,710,500 9,895,710,500 106,043,000 8. Corporate Shares - 106,925,500 106,925,500 8,493,000 9. Corporate Debenture and Bonds - 8,493,000 8,493,000 - 10. Other Investments - - - 13,927,194,011 Total Investments - 20,260,496,082 20,260,496,082 24,375,000 Provision 24,375,000 24,375,000 13,902,819,011 Net Investments - 20,236,121,082 20,236,121,082
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Schedule 4.12(A): Investment in Shares, Debentures and Bonds as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Cost Price Cost Price Market Price Provision Rs. Rs. Rs. Amount Rs. 106,043,000 1. Investment in Shares 106,925,500 - 24,375,000 3,000,000 1.1 Purwanchal Grameen Bikash Bank Ltd. 3,000,000 NA (Note - 3) 30,000 Ordinary Shares of Rs.100 each fully paid up 3,000,000 1.2 Sudur Paschimanchal Grameen Bikash Bank Ltd. 3,000,000 NA (Note - 3) 3,000,000 30,000 Ordinary Shares of Rs.100 each fully paid up 52,190,000 1.3 Rural Micro Finance Development Centre Ltd. 52,190,000 NA (Note - 3) - 521,900 Ordinary Shares of Rs.100 each fully paid up 353,000 1.4 Credit Information Centre Ltd. 1,235,500 NA (Note - 3) - 14,120 Ordinary Shares of Rs.100 each fully paid up (including 1,765 bonus shares fully paid up) 47,500,000 1.5 Taragaon Regency Hotels Ltd. 47,500,000 NA (Note - 3) 21,375,000 475,000 Ordinary Shares of Rs. 100 each fully paid up 8,493,000 2. Investment in Debentures and Bonds 8,493,000 - - 8,493,000 2.1 Nepal Electricity Authority 8,493,000 NA (Note - 3) - 7.75%; 8,493 bonds of Rs. 1,000 each fully paid up, interest payable semiannually, maturity on 27th March 2013 114,536,000 Total Investment 115,418,500 - 24,375,000 3. Provision for Loss 24,375,000 3,000,000 3.1 Upto Previous year 24,375,000 21,375,000 3.2 Increase/Decrease this Year - 24,375,000 Total Provision 24,375,000 90,161,000 Net Investments 91,043,500
NOTE: 1. The following companies have not distributed dividends in the last three years : 1.1 Purwanchal Grameen Bikash Bank Ltd. 1.2 Sudur Paschimanchal Grameen Bikash Bank Ltd. 1.3 Taragaon Regency Hotels Ltd. 2. Out of the total investment above, Nepal Electricity Authority Bond and Purwanchal Grameen Bikash Bank Ltd. shares are listed at the Nepal Stock Exchange Ltd (NEPSE). 3. NA - In the absence of sufficient information and/or listing in NEPSE , the market value of the investments have not been shown.
56 Annual Report and Accounts 2008-2009 - - - - Rs. 8,605,511 9,675,654 6,226,536 91,041,656 34,422,042 11,851,308 44,768,306 44,768,306 45,006,193 55,801,251 56,634,631 This Year This Year 137,896,614 200,946,085 138,352,640 245,386,620 101,075,167 (44,440,536) 13,789,661,419 13,789,661,419 13,880,703,075 13,679,756,990
------Rs. Total Total 7,621,115 7,621,115 6,094,058 6,094,058 1,527,057 1,527,057 762,111,490 762,111,490 762,111,490 754,490,375
------Rs. Foreign Foreign 7,571,977 7,571,977 6,075,645 6,075,645 1,496,332 1,496,332 757,197,668 757,197,668 757,197,668 749,625,692 ------Rs. 49,138 49,138 18,413 18,413 30,725 30,725 Bills Purchased and Discounted Bills Purchased 4,913,822 Domestic 4,913,822 4,913,822 4,864,684
- - - Rs. Total Total 8,605,511 9,675,654 6,226,536 34,422,042 11,851,308 44,768,306 44,768,306 45,006,193 55,801,251 91,041,656 55,107,575 130,275,499 193,324,970 132,258,582 239,292,562 101,075,167 (45,967,592) 13,027,549,929 13,027,549,929 13,118,591,585 12,925,266,615 ------9 9 6 Rs. 924 924 924 915 Foreign Foreign 899,197 899,197 899,194 (899,188)
- Rs. Other Loans & Advances 4,351,308 8,605,511 2,175,654 6,226,536 3,006,193 34,422,042 44,235,645 44,235,645 54,956,962 83,008,995 55,879,758 44,649,968 125,921,992 180,938,802 127,978,901 192,168,592 (11,229,790) 12,592,199,236 12,494,269,429 12,494,269,429 12,675,208,231 12,592,199,236
Domestic - Rs. 532,661 532,661 844,289 7,500,000 4,353,498 7,500,000 3,380,484 8,032,661 435,349,769 Uninsured Uninsured 42,000,000 12,386,159 46,224,773 44,296,215 10,457,601 443,382,430 (33,838,614) 430,996,272 435,349,769
------Rs. Priority Sector Insured Insured 2.1 Substandard 2.1 Substandard 2.2 Doubtful 2.3 Loss Loans Total 1.1 Pass 1.2 Restructured Non-Performing Loans Loan Loss Provision 3.1 Pass 3.2 Restructured 3.3 Substandard 3.4 Doubtful 3.5 Loss 4.1 Pass loan 4.2 Restructured 4.3. Substandard 4.4 Doubtful 4.5 Loss Provision Total upto PreviousYear Year’s Previous written back Provision This Year’s additional This Year’s provision of the Year
Performing Loans Particulars (A) 2. 3. Provision (B) Total up to 4. Provision Year Previous (C) (D) (E) Net Adjustments Net Loan (A-B) 1.
- - -
Rs. 6,226,536 4,113,494 24,906,145 48,012,386 55,801,251 45,006,193 55,801,251 63,096,760 90,634,940 48,510,338 128,719,782 245,386,620 105,931,312 114,369,656 287,511,222 (42,124,602) Schedule 4.13: Classification of Loans, Advances and Bills Purchased and Provisioning and Provisioning and Bills Purchased Advances Classification of Loans, 4.13: Schedule as at 15 July 2009 (31 Ashad 2066) Year Previous 138,352,640 13,835,263,970 Note: Figures in Priority Sector column includes Deprived Sector loans only. in Priority Sector column includes Deprived loans only. Note: Figures 13,963,983,752 13,835,263,970 13,718,597,132
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Schedule 4.13(A) :Securities Against Loan, Advance and Bills Purchased as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 13,963,983,752 (A) Secured 13,880,703,075 7,949,450,793 1. Movable / Immovable Assets 9,159,793,509 - 2. Guarantee of Local Licensed Institutions - 3. Government Guarantee 198,112,176 4. Guarantee of Internationally Rated Banks 299,204,033 - 5. Export Documents - 6. Fixed Deposit Receipts 369,566,490 (a) Own FDR 193,655,080 742,030,701 (b) FDR of Other Licensed Institutions 400,620,131 762,719,465 7. Government Securities/ Bonds 301,314,808 8. Counter Guarantee 9. Personal Guarantee 3,942,104,127 10. Other Securities 3,526,115,514 - (B) Unsecured
13,963,983,752 Total 13,880,703,075
58 Annual Report and Accounts 2008-2009 - - - - - Rs. This Year 7,395,000 57,372,262 24,318,709 15,034,556 (22,539,857) (13,309,643) 414,271,532 449,103,937 323,231,887 334,240,953 114,862,984 137,292,540
- - Rs. Others (986,617) (986,617) 4,040,616 60,998,325 15,766,765 75,778,473 31,627,982 34,681,981 41,096,492 41,096,492 Leasehold Assets
- Rs. Office Equipment (6,479,899) (6,479,899) 35,382,927 10,455,766 49,211,270 49,211,270 276,056,058 304,959,086 255,747,816 251,771,949
------Rs. Assets Machinery
- - Rs. Vehicles 5,215,192 9,172,890 8,190,443 8,190,443 (1,450,000) (1,450,000) 42,882,636 46,647,828 30,734,495 38,457,385
- - - Rs. 649,437 Freehold 1,007,378 9,097,461 5,353,771 (4,393,127) 34,334,513 21,718,550 16,364,779 15,034,556 31,399,335 (13,623,341) and Buildings 1. At Cost Year a. Balance upto Previous b. Addition this year this year c. Revaluation/Written-back d. Sold this year this year e. Written-off Cost (a+b+c+d+e) Total 2. Depreciation Year a. Upto Previous b. For this Year on Revaluation / Written-back c. Depreciation adjustment/ write back d. Depreciation (a+b+c+d) Depreciation Total (WDV)* (1-2) 3. Book Value Particulars 4. Land in Progess 5. Capital Work be Capitalised) (To 6. Leasehold Assets (3+4+5+6) Total
- - - Rs. 7,322,057 (4,838,030) (2,320,723) 14,069,522 23,017,849 91,039,645 18,910,556 405,040,040 414,271,532 302,534,761 323,231,887 117,272,258
Schedule 4.14: Fixed Assets Fixed 4.14: Schedule as at 15 July 2009 (31 Ashad 2066) Year Previous Down Value. * Written
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Schedule 4.15: Non-Banking Assets as at 15 July 2009 (31 Ashad 2066)
Previous Name and Date of assuming Total Amount of Provision for Loss Net Non Banking Year Rs. Address of Non Banking Assets Non-Banking Assets Assets Rs. Borrower or Party Rs. % Amount Rs. ------Total - - - - -
Schedule 4.16: Other Assets as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. - 1. Stock of Stationery 5,232,888 177,995,967 2. Income Receivable on Investments 219,914,548 115,480,631 3. Accrued Interest on Loan 117,646,865 - (115,480,631) Less: Interest Suspense Amount (117,646,865) 5,464,261 4. Commission Receivable 2,316,516 69,577,429 5. Sundry Debtors 80,381,635 162,082,419 6. Staff Loan and Advances 182,487,582 64,633,009 7. Prepayments 38,871,378 - 8. Cash in Transit - 767,874,490 9. Other Transit Items (Including Cheques) 536,066,709 - 10. Drafts Paid without Notice - 41,420,592 11. Expenses Not Written-off 36,402,914 - 12. Branch Adjustment Account - 60,040,444 13. Deferred Tax Assets 61,068,405 230,500 14. Others 178,842,287 a) Advance Income Tax (net of Provision) - 230,500 b) Others 178,842,287 1,349,319,111 Total 1,341,584,862
Schedule 4.16(A) : Other Assets (Additional Statement) as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year (Rs.) Up to 1 1 to 3 Above 3 Rs. Year Years Years Total 115,480,631 1. Accrued Interest on Loans and Advances 64,448,838 5,401,315 47,796,712 117,646,865 - 2. Drafts Paid without Notice - - - - - 3. Branch Adjustment Account - - - -
60 Annual Report and Accounts 2008-2009 Schedule 4.17: Contingent Liabilities as at 15 July 2009 (31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. - 1. Claims on Bank but not Acknowledged as Liabilities by the Bank - 1,857,993,804 2. Letters of Credit (Full amount) 3,120,878,804 1,647,335,898 (a) Maturity period of less than 6 months 2,867,156,012 210,657,906 (b) Maturity period of more than 6 months 253,722,792 - 3. Rediscounted Bills - 1,367,342,770 4. Unmatured Guarantees/Bonds 1,484,857,424 22,978,842 (a) Bid Bonds 358,686,280 833,994,982 (b) Performance Bonds 716,145,390 510,368,946 (c) Other Guarantee/Bonds 410,025,754 - 5. Unpaid amount on Investment in Shares 193,985,365 6. Outstanding Liabilities of Forward Exchange Contracts 1,332,125,612 155,926,528 7. Bills for Collection 151,110,615 1,129,471,910 8. Acceptance and Endorsements 1,016,660,739 - 9. Underwriting Commitment - 10. Irrevocable Loan Commitments 1,215,235,221 1,344,662,896 11. Guarantee against Counter Guarantee of Internationally Rated Banks 2,098,631,210 3,901,828 12. Advance Payment Guarantee 97,500 84,559,383 13. Financial Guarantee 103,786,602 - 14. Contingent Liabilities on Income Tax 3,901,166 1,939,847 15. Others 123,808,727 6,139,784,331 Total 10,651,093,620
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Schedule 4.18: Interest Income for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 872,690,380 A. On Loan, Advances and Overdraft 1,104,047,249 813,194,903 1. Loan and Advances 1,027,707,274 59,495,477 2. Overdrafts 76,339,975 319,814,530 B. On Investment 406,980,129 319,606,116 1. Government of Nepal Securities 406,325,553 259,844,722 a. Treasury Bills 348,126,573 54,288,317 b. Development Bonds 53,955,991 - c. National Savings Certificates - 5,473,077 d. Special Bonds 4,242,989 - 2. Foreign Securities - - 3. Nepal Rastra Bank Bonds - 208,414 4. Debenture and Bonds 654,576 - 5. Interest on Inter bank Investment - - a. Financial Institutions - b. Other Organisations 8,590,700 C. On Agency Balances 1,867,239 - 1. Local Banks / Financial Institutions - 8,590,700 2. Foreign Banks 1,867,239 80,316,058 D. On Money at Call and Short Notice 39,051,565 - 1. Local Banks / Financial Institutions - 80,316,058 2. Foreign Banks 39,051,565 309,783,858 E. On Others 335,275,075 - 1. Certificate of Deposits - 2,339,370 2. Inter-Bank / Financial Institution Loan 39,322,576 300,453,278 3. Placement with Foreign Banks 286,022,751 6,991,210 4. Others 9,929,748 1,591,195,526 Total 1,887,221,257
62 Annual Report and Accounts 2008-2009 Schedule 4.19: Interest Expenses for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 449,092,662 A. On Deposit Liabilities 520,761,481 118,980,221 1. Fixed Deposits 134,404,092 11,060,210 1.1. Local Currency 11,953,974 107,920,011 1.2. Foreign Currency 122,450,118 279,308,138 2. Savings Deposits 296,105,028 236,501,982 2.1. Local Currency 260,030,008 42,806,156 2.2. Foreign Currency 36,075,020 50,804,303 3. Call Deposits 90,252,361 46,520,407 3.1. Local Currency 84,999,297 4,283,896 3.2. Foreign Currency 5,253,064 - 4. Certificate of Deposits - 18,838,042 B. On Borrowings 18,531,766 - 1.Debentures and Bonds - 2,288,928 2. Loans from Nepal Rastra Bank 1,584,935 16,549,114 3. Inter Bank /Financial Institutions Borrowings 16,946,831 - 4. Other Institutions - - 5. Other Loans - 3,798,996 C. On Others 4,493,353 3,798,996 1. Premium on Development Bonds 4,493,353 - 2. Others (Forwards) - 471,729,700 Total 543,786,600
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Schedule 4.20: Commisssion and Discount for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 13,878,858 A. Bills Purchased and Discounted 19,413,965 746,993 1. Domestic 907,464 13,131,865 2. Foreign 18,506,501 97,374,784 B. Commission 113,216,168 8,082,861 1. Letters of Credit 7,280,626 23,031,011 2. Guarantees 33,122,424 3,388,821 3. Collection Fees 3,994,042 34,520,663 4. Remittance Fees 37,049,477 27,035,978 5. Credit Cards 31,469,999 - 6. Share Underwriting/Issues - - 7. Government Transactions - 1,200,000 8. Agency Commission 200,000 115,450 9. Exchange Fees ( Batta Income) 99,600 165,178,613 C. Others 102,838,713 44,844,673 1. Management Fees 6,652,025 31,541,247 2. Loan Processing Fees 29,987,959 37,984,533 3. Ledger and Activity Fees 27,899,001 6,927,780 4. Commission on Travellers Cheque 6,683,471 43,880,380 5. Others 31,616,257 276,432,255 Total 235,468,846
Schedule 4.21: Other Operating Income for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 3,287,555 1. Rental on Safe Deposit Locker 3,773,301 8,846,536 2. Issue and Renewals of Credit Cards 8,602,065 8,200,727 3. Issue and Renewals of ATM Cards 8,777,397 9,578,585 4. Telex /T.T. 7,921,513 - 5. Service Charges - 692,858 6. Renewal Fees 456,973 1,987,824 7. Others 3,660,002 32,594,085 Total 33,191,251
64 Annual Report and Accounts 2008-2009 Schedule 4.22: Exchange Fluctuation Gain/Loss for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 90,216,822 A. Revaluation Gain 127,672,654 255,436,198 B. Trading Gain (except Batta) 352,358,259 345,653,020 Total Income (Loss) 480,030,913
Schedule 4.23: Staff Expenses for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 137,983,659 1. Salary 165,352,156 873,837 2. Allowances 743,710 7,306,787 3. Contribution to Provident Fund 8,115,518 4,714,722 4. Training Expenses 4,800,913 199,795 5. Uniform 161,355 2,727,883 6. Medical 3,009,449 - 7. Insurance - 16,812,712 8. Pension and Gratuity Provision 12,738,534 54,636,800 9. Others 58,133,869 47,130,719 a) Staff Incentive 50,005,200 7,506,081 b) Others 8,128,669 225,256,195 Total 253,055,504
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Schedule 4.24: Other Operating Expenses for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 33,055,294 1. House Rent 39,725,664 11,742,955 2. Light, Electricity and Water 15,394,850 7,356,046 3. Repair and Maintenance 14,691,414 4,983,143 (a) Building 8,889,511 791,453 (b) Vehicles 923,782 1,581,450 (c) Others 4,878,121 6,644,867 4. Insurance 5,585,155 33,003,722 5. Postage, Telex, Telephone, Fax 43,913,129 24,587,579 6. Office Equipment, Furniture and Repair 32,978,690 15,095,414 (a) Office Equipment and Furniture (non capitalised item) 24,518,268 9,492,165 (b) Repairs 8,460,422 12,394,197 7. Travelling Allowances and Expenses 10,489,786 11,403,133 8. Stationery and Printing 11,868,187 1,600,072 9. Periodicals and Books 751,770 10,009,236 10. Advertisement 12,671,068 1,890,964 11. Legal Expenses 1,141,641 - 12. Donations - 416,363 13. Expenses Relating to Board of Directors 524,927 303,000 (a) Meeting Allowance 284,000 113,363 (b) Others Expenses 240,927 1,082,650 14. General Meeting Expenses 1,753,078 1,306,746 15. Expenses Relating to Audit 731,826 1,046,163 (a) Audit Fees 452,000 260,583 (b) Other Expenses 279,826 - 16. Commission on Remittances - 23,017,849 17. Depreciation on Fixed Assets 24,318,709 - 18. Amortization of Pre Operating Expenses - - 19. Share Issue Expenses - 23,490,863 20. Technology Support Cost (Technical Services Fees ) 14,100,098 1,754,151 21. Entertainment 1,837,866 22. Written Off Expenses 179 12,432,830 23. Security Expenses 16,184,618 - 24. Credit Guarantee Premium - 550,824 25. Commission and Discount 199,641 12,831,068 26. Others 27,464,378 1,356,004 (a) Charges on Foreign Currency Notes 2,011,434 206,065 (b) Software Expenses Charged Off 10,391,206 1,057,879 (c) Pest Control and Waste Management 2,550,013 10,211,120 (d) Others 12,511,725 230,571,409 Total 276,326,674
66 Annual Report and Accounts 2008-2009 Schedule 4.25: Provision for Possible Losses for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 48,510,338 1. Increase in Loan Loss Provision 56,634,631 21,375,000 2. Increase in Provision for Loss on Investments - - 3. Provision for Non-Banking Assets - - 4. Provision for Other Assets - 69,885,338 Total 56,634,631
Schedule 4.26: Non Operating Income/ (Loss) for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. - 1. Profit (Loss) on Sale of Investment - 582,694 2. Profit (Loss) on Sale of Assets 19,619,292 1,099,815 3. Dividend (Net) 2,479,025 - 4. Subsidies Received from Nepal Rastra Bank - - a. Compensation against Losses of Specified Branches - - b. Interest Indemnity - - c. Exchange Counter - - 5. Others - 1,682,509 Net Non Operating Income/ (Loss) 22,098,317
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Schedule 4.27: Provision for Possible Loss Written Back for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 90,634,940 1. Loan Loss Provision Written Back 101,075,167 - 2. Provision against Non-Banking Assets Written Back - - 3 Investment Provision Written Back - - 4. Provision against Other Assets Written Back - 90,634,940 Total 101,075,167
Schedule 4.28: Income / (Expenses) from Extra-Ordinary Activities for the period 16 July 2008 to 15 July 2009 (1 Shrawan 2065 to 31 Ashad 2066)
Previous Year Particulars This Year Rs. Rs. 5,867,246 1. Recovery of Loans Written Off 23,770,030 - 2. Voluntary Retirement Scheme Expenses - (33,906,683) 3. Unrecoverable Loan Write Off (Schedule 4.28A) (39,126,089) - 4. Other Expenses/Income - (28,039,437) Total (15,356,059)
68 Annual Report and Accounts 2008-2009 Recoveries from year Current is write off Rs. 266,952 Recoveries from year Current is write off Rs. 369,393 Recoveries from year Current is write off Rs. 91,200 Recoveries from year Current is write off Rs. 5000 Recoveries from year Current is write off Rs. 15,529,900 Remarks Follow up phone through calls & letters Phone calls & letters Phone calls & letters Phone calls & letters Phone calls/ Letters /Visits,Vehicle Repossession, Auction Notice. Securities sold by Negotiation/Auction sale. Initiations made for Recovery Manager Credit/ Head Manager Credit/ Consumer Bank Head Manager Credit/ Consumer Bank Head Manager Credit/ Consumer Bank Head Manager Credit/ Consumer Bank Head Manager Credit/ Consumer Bank Loan Approving Loan Approving Authority / Designation NA NA NA NA Report from Valuation & Valuators Approved cost price at the time of disbursement Loan Basis of Valuation Basis of Valuation of Security None None None None Vehicle Type of Security and Type Amount Rs.
- - - 12,583 2,743,583 2,039,245 5,841,946 Amount Rs. 33,284,143 28,488,732 39,126,089 off Written Project Loan Project Fixed Capital Loan Personal Loan Working Capital Loan Working Cards a) Credit Other Loan b) Gramin Prathamik Karja c) Home Loan d) Auto Loan Loan Total Types of Loan Types S.N 2 3 4 1 5
Schedule 4.28 A: Statement of Loans Written Off Statement of Loans A: 4.28 Schedule for the period 16 July 2008 to 15 2009 (1 Shrawan 2065 to 31 Ashad 2066) of Auto Loan, the value a vehicle, that in posession loans as shown under Remarks column. In respect year written off the amount against current Bank has recovered During the year, valuators). of the Bank is Rs. 650 thousand ( as per valuation approved
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Schedule 4.29:Statement of Loans & Advances Extended to Directors/Chief Executive Officer/Promoters/Staff and Shareholders as at 15 July 2009 (31 Ashad 2066)
The Statement of amount, included under total amount of Bills Purchased and Discounted, Loans, Advances and Overdraft, provided to the Directors, Chief Excecutive Officer, Promoters, Staff, Shareholders and to the individual members of their undivided family or against the guarantee of such persons or to the organisations or companies in which such individuals are managing agent, are as follows:
Name of Promoter/Director/ Balance upto Recovery made Additions Balance as at Chief Executive Officer Previous Year This Year during Ashad end Principal Interest Principal Interest the year Principal Interest Rs. Rs. Rs. Rs. Rs. Rs. Rs. (A) Directors - - - (B) Chief Executive Officer ------(C) Promoters ------(D) Staff ------(E) Shareholders ------Total ------Note : As per clause 3 of the Nepal Rastra Bank (The Central Bank of Nepal ) Directive No. 6, loans given to executive officers and employees are as per Bank staff rules and hence not disclosed above.
70 Annual Report and Accounts 2008-2009 Schedule 4.30 (Ka 1): Capital Adequacy Table as at 15 July, 2009 (31 Ashad 2066) Rs. in '000 1.1 RISK WEIGHTED EXPOSURES This Year Previous Year A Credit Risk 18,758,432 17,587,870 B Operational Risk 2,690,615 2,399,696 C Market Risk 254,117 26,510 Total Risk Weighted Exposures (a+b+c) 21,703,164 20,014,076 1.2 CAPITAL FUND This Year Previous Year
Core Capital (Tier 1) 2,832,761 2,304,758 a Paid up Equity Share Capital 931,966 620,784 b Irredeemable Non-cumulative preference shares - - c Share Premium - - d Proposed Bonus equity Shares 465,983 310,392 e Statutory General Reserves 1,195,317 990,294 f Retained Earnings 239,495 383,288 g Un-audited current year cumulative profit - - h Capital Redemption Reserve - - i Capital Adjustment Reserve - - j Dividend Equalization Reserves - - k Other Free Reserve - -
Deductions a Goodwill - - b Miscellaneous Expenditure not written off - - c Investment in equity in licensed Financial Institutions - - d Investment in equity of institutions with financial interests - - e Investment in equity of institutions in excess of limits - - f Investments arising out of underwriting commitments - - g Reciprocal crossholdings - - h Other Deductions - - Supplementary Capital (Tier 2) 357,606 326,144 a Cumulative and/or Redeemable Preference Share - - b Subordinated Term Debt - - c Hybrid Capital Instruments - - d General loan loss provision 137,897 138,353 e Investment Adjustment Reserve - - f Assets revaluation reserve - - g Exchange Equilization Reserve 219,709 187,791 h Other Reserves - - Total Capital Fund (Tier 1 and Tier 2) 3,190,367 2,630,902
1.3 Capital Adequacy Ratios Current Period Previous Period Tier 1 Capital to Total Risk Weighted Exposures 13.05% 11.52% Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures 14.70% 13.15%
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Schedule 4.30 (Kha): Credit Risk As at 15 July, 2009 (31 Ashad 2066)
Assets 15th July, 2009 (31 Asadh 2066) Previous Year
Book Specific Eligible Net Value Risk Risk Weighted Net Risk Balance Sheet Exposure Value Provision CRM d=a-b-c Weight Exposures Value Weighted a b c e f=d*e Exposures Cash Balance 463,346 - - 463,346 0% - 414,875 - Balance With Nepal Rastra Bank 1,851,133 - - 1,851,133 0% - 1,266,274 - Gold 178,349 - - 178,349 0% - - - Investment in Nepal Government Securities 9,998,754 - - 9,998,754 0% - 8,137,615 - All claims on Government of Nepal 154,044 - - 154,044 0% - - - Investment in Nepal Rastra Bank securities - - - - 0% - - - All claims on Nepal Rastra Bank - - - - 0% - - - Claims on Foreign Government and Central Bank - - - - 0% - - - (ECA Rating 0-1) Claims on Foreign Government and Central Bank (ECA Rating 2) - - - - 20% - - - Claims on Foreign Government and Central Bank (ECA Rating 3) - - - - 50% - - - Claims on Foreign Government and Central Bank - - - - 100% - - - (ECA Rating 4-6) Claims on Foreign Government and Central Bank (ECA Rating 7) - - - - 150% - - - Claims On BIS, IMF, ECB, EC and on Multilateral Development - - - - 0% - - - Banks (MDBs) recognized by the framework. 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) 83,793 - - 83,793 150% 125,690 407,152 610,727 Claims on domestic banks that meet capital 269,729 - 234,176 35,554 20% 7,111 566,213 113,243 adequacy requirements Claims on domestic banks that do not meet 32,177 - - 32,177 100% 32,177 18,399 18,399 capital adequacy requirements Claims on foreign bank (ECA Rating 0-1) 11,695,334 - - 11,695,334 20% 2,339,067 7,413,304 1,482,661 Claims on foreign bank (ECA Rating 2) 389,350 - - 389,350 50% 194,675 345,800 172,900 Claims on foreign bank (ECA Rating 3-6) 637,967 - - 637,967 100% 637,967 432,955 432,955 Claims on foreign bank (ECA Rating 7) - - - - 150% - - - Claims on Foreign bank incorporated in SAARC Region - - - 20% - - - operating with a buffer of 1% above their respective regulatory capital requirement Claims on Domestic Corporates 3,680,088 8,033 928,121 2,743,934 100% 2,743,934 2,168,630 2,168,630 Investment on Foreign Corporates (ECA rating 0-1) - - - - 20% - - - Investment on Foreign Corporates (ECA rating 2) - - - - 50% - - - Investment on Foreign Corporates (ECA rating 3-6) - - - - 100% - - - Investment on Foreign Corporates (ECA rating 7) - - - - 150% - - - Regulatory Retail Portfolio (Not Overdue) 4,159,696 0 11,868 4,147,828 75% 3,110,871 2,747,901 2,060,926 Claims fulfilling all criterion of regulatory retail - - - - 100% - - - except granularity Claims secured by residential properties 2,513,718 0 - 2,513,718 60% 1,508,231 2,886,630 2,164,973 Claims not fully secured by residential properties - - - - 150% - - - Claims secured by residential properties (Overdue) 22,184 4,226 - 17,957 100% 17,957 8,875 8,875 Claims secured by Commercial real estate 2,106,506 38,000 - 2,068,506 100% 2,068,506 1,787,455 1,787,455 Past due claims (except for claim secured by 165,054 12,790 - 152,263 150% 228,395 12,971 19,456 residential properties) High Risk claims 1,089,397 0 181,273 908,124 150% 1,362,186 1,376,620 2,064,930 Investment in equity and other capital instruments of 3,000 - - 3,000 100% 3,000 - - institutions listed in the stock exchange Investment in equity and other capital instruments of 103,926 24,375 - 79,551 150% 119,326 81,668 122,501 institutions not listed in the stock exchange Other Assets 1,667,133 880,742 - 786,391 100% 786,391 743,577 743,576
Total 41,264,678 968,166 1,355,438 38,941,073 15,285,484 30,816,914 13,972,207
72 Annual Report and Accounts 2008-2009 Schedule 4.30 (Kha): Credit Risk As at 15 July, 2009 (31 Ashad 2066)
15th July, 2009 (31 Asadh 2066) Previous Year
Book Specific Eligible Net Value Risk Risk Weighted Net Risk Off Balance Sheet Exposure Value Provision CRM d=a-b-c Weight Exposures Value Weighted a b c e f=d*e Exposures Revocable Commitments - - - - 0% - - - Bills Under Collection 151,111 - 151,111 0% - 155,927 - Forward Exchange Contract 1,332,126 - - 1,332,126 10% 133,213 193,985 19,399 LC Commitments With Original Maturity Up to 6 2,867,156 - 1,015,360 1,851,796 20% 370,359 1,590,773 318,155 months (domestic counterparty) Foreign Counterparty ECA Rating 0-1 - - - - 20% - - - Foreign Counterparty ECA Rating 2 - - - - 50% - - - Foreign Counterparty ECA Rating 3-6 - - - - 100% - - - Foreign Counterparty ECA Rating 7 - - - - 150% - - - L C Commitments With Original Maturity Over 6 253,723 - 253,723 - 50% - 188,698 94,349 months (domestic counterparty) Foreign Counterparty ECA Rating 0-1 - - - - 20% - - - Foreign Counterparty ECA Rating 2 - - - - 50% - - - Foreign Counterparty ECA Rating 3-6 - - - - 100% - - - Foreign Counterparty ECA Rating 7 - - - - 150% - - - Bid Bond and Performance Bond (domestic counterparty) 658,457 - 55,224 603,233 50% 301,616 330,763 165,381 Foreign Counterparty ECA Rating 0-1 511,989 - 409,591 102,398 20% 20,480 103,185 20,637 Foreign Counterparty ECA Rating 2 996,563 - 498,281 498,281 50% 249,141 278,862 139,431 Foreign Counterparty ECA Rating 3-6 337,252 - - 337,252 100% 337,252 130,000 130,000 Foreign Counterparty ECA Rating 7 - - - - 150% - - - Underwriting commitments - - - - 50% - - - Lending of Bank’s Securities or Posting of - - - - 100% - - - Securities as collateral Repurchase Agreements, Assets sale with recourse - - - - 100% - - - Advance Payment Guarantee 589,261 - 331,780 257,481 100% 257,481 250,218 250,218 Financial Guarantee 117,699 - 30,450 87,249 100% 87,249 85,149 85,149 Acceptances and Endorsements 1,016,661 - 17,221 999,440 100% 999,440 1,097,017 1,097,017 Unpaid Portion of Partly paid shares and Securities - - - - 100% - - - Irrevocable credit commitments (short term) 1,215,235 - 116,715 1,098,521 20% 219,704 2,216,387 1,108,193 Irrevocable Credit commitments (Long Term) - - - 50% - - - Other Contingent Liabilities 594,056 - 100,965 493,090 100% 493,090 187,735 187,734 Claim Received on Guarantee 9,807 - 7,846 1,961 200% 3,923 - - (As per directive 13/065/66) Total 10,651,096 - 2,837,156 7,813,939 3,472,948 6,808,699 3,615,663 Total RWE for Credit Risk (A) +(B) 51,915,774 968,166 4,192,594 46,755,012 18,758,432 37,625,613 17,587,870
www.standardchartered.com/np 73 Schedule 4.30 (Ga): Eligible Credit Risk Mitigants As at 15 July, 2009 (31 Ashad 2066)
Credit Exposures Deposits Deposits Gold Govt. G’tee of Sec/G’tee of G’tee of G’tee of Sec/G’tee Total with with & NRB Govt. of of Other domestic MDBs of Foreign Bank other Securities Nepal Sovereigns banks Banks banks/FI
Balance Sheet Exposures Cash Balance ------Balance With Nepal Rastra Bank ------Gold ------Investment in Nepal Government Securities ------All claims on Government of Nepal ------Investment in Nepal Rastra Bank securities ------All claims on Nepal Rastra Bank ------Claims on Foreign Government and Central Bank (ECA Rating 0-1) ------Claims in Foreign Government and Central Bank (ECA Rating 2) ------Claims in Foreign Government and Central Bank (ECA Rating 3) ------Claims in Foreign Government and Central Bank (ECA Rating 4-6) ------Claims in Foreign Government and Central Bank (ECA Rating 7) ------Claims on Other Multilateral Development Banks ------Claims on Public Sector Entity (ECA 0-1) ------Claims on Public Sector Entity (ECA 2) ------Claims on Public Sector Entity (ECA 3-6) ------Claims on Public Sector Entity (ECA 7) ------Claims on domestic banks that meet capital - 234,176 ------234,176 adequacy requirements Claims on domestic banks that do not meet ------capital adequacy requirements Claims on foreign bank (ECA Rating 0-1) ------Claims on foreign bank (ECA Rating 2) ------Claims on foreign bank (ECA Rating 3-6) ------Claims on foreign bank (ECA Rating 7) ------Claims on Foreign bank incorporated in SAARC Region ------operating with a buffer of 1% above their respective regulatory capital requirement Claims on Domestic Corporates 151,023 270,161 - 231,307 - - - - 275,630 928,121 Claims on Foreign Corporates (ECA 0-1) ------Claims on Foreign Corporates (ECA 2) ------Claims on Foreign Corporates (ECA 3-6) ------Claims on Foreign Corporates (ECA 7) ------Regulatory Retail Portfolio (Not Overdue) - - - 11,868 - - - - - 11,868 Claims fulfilling all criterion of regulatory retail except granularity ------Claims secured by residential properties ------Claims not fully secured by residential properties ------Claims secured by residential properties (Overdue) ------Claims secured by commercial real estate ------Past due claims (except for claim secured by residential properties) ------High Risk claims 50,365 - - 58,320 - - - - 72,588 181,273 Investment in equity and other capital instruments of ------institutions listed in the stock exchange Investment in equity and other capital instruments of ------institutions not listed in the stock exchange Other Assets ------
Off Balance Sheet Exposures Revocable Commitments ------Bills Under Collection ------Forward Exchange Contract ------LC Commitments With Original Maturity Up to 6 968,323 - - 47,037 - - - - - 1,015,360 months (domestic counterparty) Foreign Counterparty ECA Rating 0-1 ------Foreign Counterparty ECA Rating 2 ------Foreign Counterparty ECA Rating 3-6 ------Foreign Counterparty ECA Rating 7 ------
Continue...
74 Annual Report and Accounts 2008-2009 Schedule 4.30 (Ga): Continued...
Deposits Deposits Gold Govt. G’tee of Sec/G’tee of G’tee of G’tee of Sec/G’tee Total with with & NRB Govt. of of Other domestic MDBs Foreign Bank other Securities Nepal Sovereigns banks of Banks banks/FI
L C Commitments With Original Maturity Over 253,723 ------253,723 6 months (domestic counterparty) Foreign Counterparty ECA Rating 0-1 ------Foreign Counterparty ECA Rating 2 ------Foreign Counterparty ECA Rating 3-6 ------Foreign Counterparty ECA Rating 7 ------Bid Bond and Performance Bond (domestic ------3,374 - - 55,224 counterparty) 51,850 Foreign Counterparty ECA Rating 0-1 ------409,591 409,591 Foreign Counterparty ECA Rating 2 ------498,281 498,281 Foreign Counterparty ECA Rating 3-6 ------Foreign Counterparty ECA Rating 7 ------Underwriting commitments ------Lending of Bank’s Securities or Posting of ------Securities as collateral Repurchase agreements, Assets sale with recourse ------Advance Payment Guarantee 5 ------331,775 331,780 Financial Guarantee 23,493 ------6,957 30,450 Acceptance and Endorsements 17,221 ------17,221 Unpaid Portion of Partly paid shares and Securities ------Irrevocable Credit commitments (short term) 58,817 3,433 - 11,950 - - - - 42,515 116,715 Irrevocable Credit commitments (long term) ------Other Contingent Liabilities 55,909 ------45,056 100,965 Claim Received on Guarantee ------7,846 7,846 (As per directive 13/065/66)
Schedule 4.30 (Gha): Operational Risk As at 15 July, 2009 (31 Ashad 2066) Rs. in '000 Previous Years ending on SN Particulars 15.07.2009 15.07.2008 16.07.2007 15.07.2008 1 Net Interest Income 1,343,435 1,119,466 998,927 2 Commission and Discount Income 235,469 276,432 221,207 3 Other Operating Income 33,191 32,594 28,785 4 Exchange Fluctutation Income 480,031 345,653 309,087 5 Additional/ Deduction Interest Suspense during the period 2,166 (66,972) 21,759 Gross Income (a) 2,094,292 1,707,173 1,579,765 Alfa (b) 15% 15% 15% Fixed Percentage of Gross Income [ c=(a*b)] 314,144 256,076 236,965 Capital Requirement for operational risk(d) (average of c) 269,061 239,970 Risk Weight (reciprocal of capital requirement of 10%) in times (e) 10 10 Equivalent Risk Weight Exposure [f=(d*e)] 2,690,615 2,399,696
www.standardchartered.com/np 75 Schedule 4.30 (Nga): Market Risk As at 15 July, 2009 (31 Ashad 2066)
As on 15 July, 2009
S. No. Currency Open Position (FCY) Open Position Relevant Open Previous Year Relevant Open (NPR) Position (NPR) Position (NPR) as on 15.07.2008 1 Indian Rupees 297,719 476,573 476,573 8,610 2 US Dollars 136 10,617 10,617 29,187 3 Pound Sterling 45 5,744 5,744 1,528 4 Euro 20 2,185 2,185 2,191 5 Canadian Dollar 68 4,703 4,703 3,997 6 Danish Kroner 171 2,517 2,517 2,556 7 Chinese Yuan 7 80 80 484 8 Swedish Kroner 54 538 538 803 9 Swiss Franc 1 100 100 348 10 Japanese Yen (400) (333) 333 556 11 Honkong Dollar 167 1,677 1,677 987 12 Singapore Dollar 15 793 793 641 13 Saudi Riyal 12 240 240 401 14 Thai Baht 60 136 136 77 15 Malyasian Ringgit 2 54 54 154 16 UAE Dirham 13 272 272 392 17 Australian Dollar 24 1,489 1,489 40 18 Qatar Riyal 9 184 184 70 Total Open Position (a) 508,235 53,022 Fixed Percentage (b) 5% 5% Capital Charge for Market Risk [c=(a*b)] 25,412 2,651 Risk Weight (reciprocal of capital requirement of 10%) in times (d) 10 10 Equivalent Risk Weight Exposures [e=(c*d)] 254,117 26,510
76 Annual Report and Accounts 2008-2009 Schedule 4.31: Key Indicators
Particulars Indicators FY FY FY FY FY 2004/2005 2005/06 2006/07 2007/08 2008/09 1. Net Profit/Gross Income Percent 34.01 37.06 34.55 34.94 36.84 2. Earning Per Share Rs. 143.14 175.84 167.37 131.92 109.99 3. Market Value Per Share Rs. 2,345 3,775 5,900 6,830 6,010 4. Price Earning Ratio Ratio 16.38 21.47 35.25 51.77 54.64 5. Dividend (including bonus) on Share Capital Percent 120 140 130 130 100 6. Cash Dividend on Share Capital Percent 120 130 80 80 50 7. Interest Income/Loan & Advances Percent 7.43 6.23 6.49 6.20 7.95 8. Staff Expenses/Total Operating Expenses Percent 22.53 24.29 23.75 24.28 23.58 9. Interest Expenses on Total Deposit and Borrowings Percent 1.31 1.31 1.65 1.59 1.50 10. Exchange Fluctuation Income/Total Income Percent 17.32 15.95 15.44 14.75 17.25 11. Staff (statutory) Bonus/Total Staff Expenses Percent 37.38 35.83 33.71 34.63 36.70 12. Net Profit/Loan and Advances Percent 6.85 7.63 6.75 6.24 7.93 13. Net Profit/Total Assets Percent 2.46 2.56 2.42 2.46 2.53 14. Total Credit/Deposit Percent 43.49 39.92 43.78 46.95 38.70 15. Total Operating Expenses/Total Assets Percent 3.03 2.69 2.94 2.78 2.64 16. Adequacy of Capital Fund on Risk Weighted Assets a. Core Capital Percent 13.99 12.99 13.77 11.52 13.05 b. Supplementary Capital Percent 2.07 1.94 1.94 1.63 1.65 c. Total Capital Fund Percent 16.06 14.93 15.71 13.15 14.70 17. Liquidity (CRR) Ratio 8.77 6.86 5.46 5.84 8.18 18. Non-performing Credit/Total Credit Percent 2.69 2.13 1.83 0.92 0.66 19. Weighted Average Interest Rate Spread Percent 3.70 4.10 3.95 4.01 3.98 20. Book Net-worth Rs’000 1,582,415 1,754,139 2,116,353 2,492,548 3,052,470 21. Total Shares No. 3,746,404 3,746,404 4,132,548 6,207,840 9,319,664 22. Total Staff No. 302 345 351 377 392
Note : Adequacy of Capital Fund on RWA for FY 2007-08 onwards is as per Basel II Capital Accord of Nepal Rastra Bank.
www.standardchartered.com/np 77 Financial Statements and Notes to Accounts continued
Income realised from the difference between Schedule 4.32: Significant Accounting Policies buying and selling rates of foreign currencies is accounted for as trading gains. Financial Year 16 July 2008 to 15 July 2009 2.7 Interest Expense (1 Shrawan 2065 to 31 Ashad 2066) Interest on deposit liabilities and borrowing from other banks are accounted for on accrual basis.
2.8 Loans and Advances, Overdraft and Bills Purchased Loans and advances, overdrafts and bills 1. General Information preparation of the financial statements in purchased include direct finance provided Standard Chartered Bank Nepal Ltd (the conformity with NAS and generally accepted to the customers such as bank overdrafts, “Bank”) is a limited liability company domiciled accounting principles require the use of credit card, personal loans, term loans, hire in Nepal. The address of its registered office certain critical accounting estimates. It purchase finance and loans to deprived is G.P.O. Box 3990, Naya Baneshwor, also requires the management to exercise sectors. All loans are subject to regular review Kathmandu, Nepal. The Bank has a primary judgement in the process of applying the and are graded according to the level of credit listing on the Nepal Stock Exchange Limited. Bank’s accounting policies. risk and classified as per Nepal Rastra Bank’s The Bank is a subsidiary company of Directives. Loans and advances, overdraft and bills purchased are net of loan loss provisions. Standard Chartered Bank PLC, London. 2.3 Interest Income Interest income on Loans and advances is The Bank carries out commercial banking treated as per Para 2.1. 2.9 Staff Loans activities in Nepal under license from Nepal Loans and advances granted to staff in Rastra Bank (the Central Bank of Nepal) as Interest income on Investments is recognised accordance with the staff loan scheme are Class “Ka” licensed institution. on accrual basis. reflected under Other Assets.
2. Summary of Significant Accounting 2.4 Commission Income 2.10 Loan Loss Provision Policies Income from usance export bills is accounted Provision is made for possible losses on loans The principal accounting policies applied in for on accrual basis whereas earning from and advances, overdraft and bills purchased the preparation of the financial statements of sight bills is accounted upfront. at 1% to 100% on the basis of classification the Bank are set out below. These policies of loans and advances, overdraft and bills have been consistently applied to all the years Commission income exceeding Rs. 100,000 purchased in accordance with the directives presented, unless otherwise stated. earned on guarantees covering more than a of Nepal Rastra Bank. Additional provisions year is accounted for on accrual basis over than the minimum requirement as per Nepal Rastra Bank directives, are made by the 2.1 Statement of Compliance the period of the guarantee. management on prudence basis. The financial statements have been prepared in accordance with Nepal Accounting 2.5 Dividend Income Standards (NAS) issued by the Accounting Dividend is recognised as income when the 2.11 Loans & Advances Write off Standards Board of Nepal (ASB) except for right to receive the payment is established. Unrecoverable loans and advances are written exceptions as mentioned below, generally off in accordance with the Loan Write-off Bye Law 2062 of the Bank approved by the Nepal accepted accounting principles, and the 2.6 Foreign Exchange Transactions Rastra Bank. provisions of Bank and Financial Institution Assets and liabilities denominated in foreign Act, 2063, directives issued by Nepal Rastra currencies at the Balance Sheet date are Amounts recovered against loans written off Bank (Central Bank) and the Company Act, translated at mid-point exchange rates of in earlier as well as current year is recognized 2063. the Nepal Rastra Bank after adjustment for as income in the profit and loss account in the effective trading rate.Net difference arising year of recovery. Recognition of interest income on Loans from the conversion of foreign currency assets and advances is on Cash basis, proposed and liabilities is accounted for as revaluation dividend and extraordinary items (if any) are gain. In conformity with the Directives of Nepal 2.12 Investments accounted for as per the directives issued by Rastra Bank, 25% of the total revaluation gain Investment in Treasury Bills, Government of Nepal Rastra Bank. is transferred to Exchange Fluctuation Fund Nepal Development Bonds and Special Bonds by charging to Profit and Loss Appropriation are those, which the Bank has purchased 2.2 Basis of Preparation Account. with the positive intent and ability to hold until The financial statements have been prepared maturity. Such securities are recorded at under the historical cost convention. The cost or at cost adjusted for amortisation of premiums or discounts.
78 Annual Report and Accounts 2008-2009 Investments in shares held for strategic 2.15 Lease Rental be available against which the temporary purpose are stated at lower of cost or market Commercial and Residential premises differences can be utilised. value with additional provisions for possible are taken as operating leases which are diminution in value as estimated by the cancellable in nature. The total payments Deferred tax related to temporary differences management on prudence basis. made under operating leases are charged to in opening balances is credited or charged Other Operating Expenses in the profit and directly to equity and subsequent year All investments are subject to regular review loss account on a monthly basis. differences are recognised in the profit and according to the directives of Nepal Rastra loss account together with the deferred gain Bank. 2.16 Retirement Benefits or loss. The Bank has schemes of retirement 2.13 Fixed Assets and Depreciation benefits namely Gratuity and Provident Fund. 2.18 Stationery a. Fixed assets are stated at historical cost Provision for expenses on account of Gratuity Stationery purchased is accounted for on cost less depreciation. Historical cost includes and Provident Fund is made on accrual basis and expended as and when it is issued for expenditures that are directly attributable with the amount of gratuity computed by consumption on a weighted average basis. to the acquisition of the assets. the Bank in accordance with its applicable scheme. Contributions to approved retirement 2.19 Non Banking Assets b. Vehicles, equipment, furniture and fixtures fund are made on a regular basis as per the Non Banking Assets are accounted for as per with a unit value of Rs. 400,000 or less are Retirement Fund rules and regulations. the directives of Nepal Rastra Bank. expensed off in the year of purchase. 2.17 Income Tax 2.20 Provisions, Contingent Liabilities and c. Land is not depreciated. Depreciation a.Current Income Tax of other assets is calculated using the Contingent Assets Provision for current income tax is made straight-line method to allocate their cost The Bank creates a provision when there is a in accordance with the provisions of the to their residual values over their estimated present obligation as a result of past events prevailing Income Tax Act, 2058 and Rules as useful lives, as follows: that probably requires an outflow of resources amended. and a reliable estimate can be made of the amount of the obligation. A disclosure for a S.N. Assets Types Life of an Asset contingent liability is made when there is a possible obligation or a present obligation 1. Equipment 36 months 2. Furniture & Fittings/Fixtures 36 months that may, but probably will not, require an 3. Vehicle 36 months outflow of resources. When there is a possible 4. Computers – PC, Printer, Laptop etc. 36 months obligation or a present obligation in respect of 5. Computers – Server 60 months which the likelihood of outflow of resources is 6. Computer – ATM 84 months remote, no provision or disclosure is made. 7. Premises Freehold 600 months Contingent assets are not recognised in the financial statements. However, contingent d. Costs on improvements and renovation of assets are assessed continually and if it is b. Deferred Tax leasehold premises are depreciated over virtually certain that an economic benefit Deferred tax is provided on temporary the remaining period of that lease. will arise, the asset and related income are differences arising between the tax bases recognised in the period in which the change of assets and liabilities and their carrying e. For additions during the year, depreciation occurs. amounts in the financial statements. Deferred is charged from the month subsequent to tax is determined using tax rates (and laws) the month of acquisition and for disposal Liability on account of derivative contracts that have been enacted by the balance sheet depreciation is charged up to the date of are reported under Contingent liabilities date and are expected to apply when the disposal. under subheading Outstanding Liabilities for related deferred tax asset is realised or the Forward Exchange Contract. These include deferred tax liability is settled. notional principal on outstanding forward rate 2.14 Amortisation agreements. Software applications purchased by the The principal temporary differences arise from Bank, costing greater than Rs. 40,000,000 are depreciation of fixed assets, provision for amortised over a period of thirty-six months 3. Rounding off and Comparative Figures diminution in the value of investment in shares The financial statements are presented in from the month of purchase. Software costs and provisions for gratuity and performance Nepalese Rupees, rounded off to the nearest with a unit value of Rs. 40,000,000 or less are bonus. rupee. Where necessary, amounts shown for expensed off in the year of purchase. the previous year have been reclassified to Deferred tax assets are recognised where facilitate comparison. Licence fees paid by the Bank are amortised it is probable that future taxable profit will over the period of the licence.
www.standardchartered.com/np 79 Financial Statements and Notes to Accounts continued
Schedule 4.33: Notes to Accounts Financial Year 16 July 2008 to 15 July 2009
(1 Shrawan 2065 to 31 Ashad 2066)
1. Provision for Bonus targets set and paid in line with the actual Provision for bonus has been calculated and achievements. A total of Rs. 42,991,939 has provided for at 10% of net profit, after making been provided for the performance bonus in adjustments for loan loss provision and bonus. this year.
2. Staff Housing Fund 6. Dividend and Bonus As the terms of service of the staff has a The Board has recommended 100% dividend provision for extending housing loans to the (including bonus shares) out of which, Rs. eligible staff, a separate housing fund has not 465,983,200 to be distributed as cash and been created in accordance with Labour Act, balance as bonus issue in the ratio of 2:1 2048. i.e. 1 bonus share for every 2 shares held. This proposal of the Board has been shown 3.Tax Settlement Outstanding under Proposed and Dividend along with Self assessment return filed by the Bank for the balance of unpaid dividends and under the financial year 2005-06 (2062-63 BS) has Reserves and Funds schedule respectively. been opened by the Large Tax Payers Office (LTPO) and an assessment order has been 7. Unpaid Dividend issued for Rs. 3,901,166 as additional tax. As on the balance sheet date, unpaid dividend The Bank has contested the assessment over five years amounts to Rs. 2,174,438. order and have applied for an Administrative Review at the Office of the Director General 8. Paid up Share Capital of Inland Revenue Department. Pending Paid up share capital of the Bank has moved resolution of the matter, a contingent liability over the years as follows: has been raised for the additional tax amount. Financial Year Cumulative Paid up Remarks Self assessment returns for the financial years Capital Rs. 2006-07 (2063-64 BS) and 2007-08 (2064-65 BS) are pending for assessment at the Large 1987-88 (2044-45 BS) 30,000,000 Opening Share Capital at Rs. 60 paid up Tax Payers Office. 1990-91 (2047-48 BS) 50,000,000 Capitalisation of Reserve Rs. 100 paid up 1992-93 (2049-50 BS) 100,000,000 Issuance of 100% Bonus Shares 1994-95 (2051-52 BS) 150,000,000 Issuance of 50% Bonus Shares 4. Provision for Gratuity 1996-97 (2053-54 BS) 225,571,800 Issuance of 50% Bonus Shares During the year, the Bank has provided Rs. 1997-98 (2054-55 BS) 339,548,800 Issuance of 50% Bonus Shares 12,738,534 (Previous Year Rs. 16,812,712) 2002-03 (2059-60 BS) 374,640,400 Issuance of 10% Bonus Shares on account of gratuity. Out of the amount 2005-06 (2062-63 BS) 413,254,800 Issuance of 10% Bonus Shares provided, Rs 10,472,391 has been funded 2006-07 (2063-64 BS) 620,784,000 Issuance of 50% Bonus Shares (previous year Rs 13,491,431) and Rs. 2007-08 (2064-65 BS) 931,966,400 Issuance of 50% Bonus Shares 3,428,755 (previous year Rs. 1,732,697) has been paid to the staff at the time of 9. Sale of Land and Building separation. The Bank has sold its land and building at Biratnagar, Morang during the year for Rs. 5. Performance Bonus 32,334,501 at a profit of Rs. 19,228,290. The Bank’s reward programmes recognize world-class performance and behaviour in 10. Deferred Tax support of the Bank’s values across all job Deferred tax is calculated on temporary levels. The Bank’s total reward consists of differences using an effective tax rate of fixed and variable compensation. Performance 30.00% (previous year rate: 31.50%) Bonus is a variable component based on the Bank’s overall performance and The items attributable to deferred tax assets individual employee’s annual performance. It and liabilities and their movement are as is provisioned on the basis of the individual follows:
80 Annual Report and Accounts 2008-2009 Balance Movement Balance 15 Jul 2008 during the year 15 Jul 2009 Deferred Income Tax Assets Accelerated Depreciation in Financial Statements 27,463,143 1,621,060 29,084,203 Gratuity Provision 19,478,870 (996,913) 18,481,957 Provision for Performance bonus 5,420,305 769,440 6,189,745 Provision for investment impairment 7,678,125 (365,625) 7,312,500 Total Deferred Tax Assets 60,040,443 1,027,962 61,068,405 Deferred Tax Liabilities - - - Net – Deferred Tax Asset 60,040,443 1,027,962 61,068,405
The net deferred tax movement during the year is debited / credited to the profit and loss account.
11. Related Party Disclosures Compensation Details for Key Management personnel
Total of Key Management Personnel Compensation Rs. 33,384,523 A) Short Term Employee Benefits Rs. 31,966,899 (Salary, Allowance, PF) B) Post Employment Benefits NIL C) Other Long Term Benefits NIL D) Termination Benefits Rs. 1,417,624 E) Share Based Payment NIL
Additional information: a) Key Management Personnel includes 2 expatriate staff. b) Key Management Personnel are also provided with the following benefits: i) Benefits as per Staff Service Bye-laws, ii) Bonus to local staff as per Bonus Act, iii) Performance Bonus depending on performance of the individual, iv) Car Allowance as per Bank’s Car Scheme. Apart from above Rs. 284,000 was paid as meeting fees to the Public and Professional Directors in the financial year.
The Bank being a subsidiary of an international bank avails of support services from its global support functions governed by approved agreements. 12. Operating Lease Commitment The future minimum lease payment under non-cancellable operating leases, where the bank is lessee is NIL.
13. Claims Against the Bank There has been a claim on the Bank by Agriculture Input Corporation on account of a guarantee issued by the Bank against the counter guarantee of Rabo Bank, Netherland. As on the Balance Sheet date, the beneficiary has lodged a claim with the Bank and the Bank in turn has lodged the claim with the counter guarantee provider. Pending settlement, this item has been disclosed under Contingent Liabilities.
www.standardchartered.com/np 81 Financial Statements and Notes to Accounts continued
14. Reconciliation Status: Rs. in ‘000 Particulars Total Amount ≤ 3 Months > 3 ≤ 9 Months > 9 Months Branch Adjustments Account - - - - Agency Accounts 584,769 577,023 7,746 -
The reasons for differences are fully identified and are being addressed in regular course of business.
15 Summary of Loans and Advances Disbursed, Recovered and Principal and Interest Written-off during the year: Rs. in ‘000 Particulars Amount Loans Disbursed 6,889,692 Loans Recovered 7,129,518 Loans Written-off 39,126 Interest Written-off -
16 Summary of Changes in Deposit Liabilities : Rs. in ‘000 Particulars Balance as at 15/07/2008 Received/ (Withdrawn) Balance as at 15/07/2009 Current and Margin Accounts 6,648,605 (67,785) 6,580,820 Saving Account 17,856,134 1,331,502 19,187,636 Call Deposits 1,938,246 1,063,321 3,001,567 Fixed Deposits 3,301,014 3,800,684 7,101,698 Total 29,743,999 6,127,722 35,871,721
17 Weighted Average Interest Spread:
Particulars Rate % Average Rate of Credit and Investments 5.61 Average Rate on Deposits 1.63 Net Spread 3.98
18 Particulars of Amortised Expenses yet to be Expensed Off:
Rs. in ‘000 Particulars Amount Software Costs - Licence Fees 1,044 Premium on Development Bonds 35,359 Total 36,403
19 Summary of Concentration of Exposure:
Rs. in ‘000 Particulars Loans & Advances and Bills Deposits & Borrowings Contingent Total Amount as on 15 July 2009 13,880,703 35,871,721 10,651,094 Highest Exposure to Single unit 379,915 4,649,213 1,055,771 Highest % of Exposure to Single unit 2.74 12.96 9.91
82 Annual Report and Accounts 2008-2009 20 Classification of Assets and Liabilities based on Maturity:
Rs. in Million Particulars 1-90 Days 91-180 Days 181-270 Days 271 Days -1 Year Over 1 Year Total Assets Cash Balance 463 463 Balance with Banks 2,674 2,674 Investment in Foreign Banks 7,272 2,968 699 389 623 11,951 Government Securities 3,948 2,224 744 2,429 653 9,998 Nepal Rastra Bank Bonds - Inter Bank Lending 251 251 Loans, Advances & Bills Purchased 4,032 564 817 546 7,721 13,680 Other Assets 1,424 146 1,570 Total Assets 20,064 5,756 2,260 3,364 9,143 40,587 Liabilities Loans and Borrowings 300 300 Current Deposits 2,106 4,475 6,581 Saving Deposits 4,222 14,966 19,188 Fixed Deposits 7,977 763 100 588 675 10,103 Debentures - Other Liabilities, Capital & Reserves 1.363 3,052 4,415 Total Liabilities 15,968 763 100 588 23,168 40,587 Net Financial Assets 4,096 4,993 2,160 2,776 (14,025) - Cumulative Net Financial Assets 4,096 9,089 11,249 14,025
Rs. in ‘000 21 Statement of age-wise agency account reconciliation pending items
Particulars Total Amount Upto 1 year 1 to 3 years Above 3 years Agency Accounts - - - -
22 Borrowing by Bank against the collateral of own assets is Nil.
Schedule 4.34: Statement of loan availed by bank’s promoter/promoters’ group from other bank and financial institutions by pledging their shares. As at 15th July 2009 (31st Ashad 2066)
Shares under the ownership of Promoter Description of Loan S.No. Name of Promoter/ Name of other Shareholders bank/financial under institution from Promoters’ Total no. of Percentage of which loan Loan No. of shares Group shares paid up capital has been taken amount Rs. pledged Remarks 1 2 3 4 5
www.standardchartered.com/np 83 Schedule 4.35 Unaudited Financial Results (Quarterly) As at the end of Fourth Quarter (15/07/2009) of the Fiscal Year 2065/66 ( FY 2008-2009) Rs. in ‘000
This Quarter Ending Previous Quarter Corresponding Previous S.N. Particulars (Unaudited) Ending (Unaudited) Year Quarter Ending (Audited)
1 Total Capital and Liabilities (1.1 to 1.7) 40,587,468 38,462,129 33,335,788 1.1 Paid-up Capital 931,966 931,966 620,784 1.2 Reserves and Surplus 2,586,487 2,272,383 1,871,764 1.3 Debenture and Bond - - - 1.4 Borrowings 300,000 200,000 - 1.5 Deposits (a+b) 35,871,721 34,259,002 29,743,999 a Domestic Currency 21,984,022 20,417,797 21,247,387 b Foreign Currency 12,887,700 13,841,205 8,496,612 1.6 Income Tax Liability (Net) 4,262 7,759 2,051 1.7 Other Liabilities 893,032 791,019 1,097,190 2 Total Assets (2.1 to 2.7) 40,587,468 38,462,129 33,335,788 2.1 Cash & Bank Balance 3,137,164 2,869,127 2,050,243 2.2 Money at Call and Short Notice 2,055,549 1,788,695 2,197,538 2.3 Investments 20,236,121 18,937,661 13,902,819 2.4 Loans and Advances 13,679,757 13,826,709 13,718,597 2.5 Fixed Assets 137,292 159,949 117,272 2.6 Non Banking Assets - - - 2.7 Other assets 1,341,585 879,988 1,349,319 3 Profit and Loss Account Up to This Up to Previous Up to Corresponding Quarter Quarter Previous Year Quarter 3.1 Interest Income 1,887,221 1,376,643 1,591,196 3.2 Interest Expense 543,787 406,088 471,730 A Net Interest Income (3.1 - 3.2) 1,343,434 970,555 1,119,466 3.3 Fees, Commission and Discount 235,469 162,951 276,432 3.4 Other Operating Income 33,191 22,384 32,594 3.5 Foreign Exchange gain / Loss (Net) 480,031 340,073 345,653 B Total Operating Income (A+3.3+3.4+3.5) 2,092,125 1,495,963 1,774,145 3.6 Staff Expense 253,055 183,623 225,256 3.7 Other Operating Expenses 276,327 207,864 230,571 C Operating Profit Before Provision (B-3.6-3.7) 1,562,743 1,104,476 1,318,318 3.8 Provision for Possible Losses 56,635 41,041 69,885 D Operating Profit (C - 3.8) 1,506,108 1,063,435 1,248,433 3.9 Non Operating Income / Expense ( Net) 22,099 2,570 1,682 3.10 Write back of Provision for Possible Losses 101,075 56,728 90,635 E Profit from Regular Activities (D+3.9+3.10) 1,629,282 1,122,733 1,340,750 3.11 Extraordinary Income/ Expenses ( Net) (15,356) (5,430) (28,040) F Profit Before Bonus and Taxes (E + 3.11) 1,613,926 1,117,303 1,312,710 3.12 Provision for Staff Bonus 146,720 101,573 119,337 3.13 Provision for Tax 442,091 304,719 374,452 G Net Profit / Loss (F - 3.12 - 3.13) 1,025,115 711,011 818,921
4 Ratios At the End of At the End of At the End of Corresponding This Quarter Previous Quarter Previous Year Quarter 4.1 Capital Fund to RWA 16.85% 14.68% 13.15% 4.2 Non Performing Loan ( NPL) to Total Loan 0.66% 0.70% 0.92% 4.3 Total Loan Loss Provision to Total NPL 220.72% 228.14% 190.64%
84 Annual Report and Accounts 2008-2009 Schedule4.36 : Comparison of Unaudited and Audited Financial Statement As at 2065/66 Rs. in ‘000 Variance Reasons for As per Unaudited As per Audited Variance S.No. Particulars Financial Statement Financial Statement In Amount In %
1 Total Capital and Liabilities (1.1 to 1.7) 40,587,468 40,587,468 0 0 1.1 Paid up Capital 931,966 931,966 0 0.00% 1.2 Reserve and Surplus 2,586,487 2,120,503 465,983 18.02% As per the proposed appropration 1.3 Debenture and Bond 0 0 0 0.00% 1.4 Borrowings 300,000 300,000 0 0.00% 1.5 Deposits (a+b) 35,871,721 35,871,721 0 0.00% a. Domestic Currency 22,984,022 22,984,022 0 0.00% b. Foreign Currency 12,887,700 12,887,700 0 0.00% 1.6 Income Tax Liability 4,263 4,263 0 0.00% 1.7 Other Liabilities 893,031 1,359,015 (465,983) -52.18% As per the proposed appropration 2 Total Assets (2.1 to 2.7) 40,587,468 40,587,468 0 0.00% 2.1 Cash and Bank Balance 3,137,164 3,137,164 0 0.00% 2.2 Money at Call and Short Notice 2,055,549 2,055,549 0 0.00% 2.3 Investments 20,236,121 20,236,121 0 0.00% 2.4 Loans and Advances 13,679,757 13,679,757 0 0.00% 2.5 Fixed Assets 137,293 137,293 0 0.00% 2.6 Non Banking Assets 0 0 0 0.00% 2.7 Other Assets 1,341,585 1,341,585 0 0.00% 3 Profit and Loss Account 3.1 Interest Income 1,887,221 1,887,221 0 0.00% 3.2 Interest Expense 543,787 543,787 0 0.00% A. Net Interest Income (3.1 - 3.2) 1,343,435 1,343,435 0 0.00% 3.3 Fees, Commission and Discount 235,469 235,469 0 0.00% 3.4 Other Operating Income 33,191 33,191 0 0.00% 3.5 Foreign Exchange Gain/Loss (Net) 480,031 480,031 0 0.00% B. Total Operating Income (A+3.3+3.4+3.5) 2,092,126 2,092,126 0 0.00% 3.6 Staff Expenses 253,056 253,056 0 0.00% 3.7 Other Operating Expenses 276,327 276,327 0 0.00% C. Operating Profit Before Provision (B -3.6 - 3.7) 1,562,743 1,562,743 0 0.00% 3.8 Provision for Possible Losses 56,635 56,635 0 0.00% D. Operating Profit (C -3.8) 1,506,109 1,506,109 0 0.00% 3.9 Non Operating Income/Expenses (Net) 22,098 22,098 0 0.00% 3.10 Write Back of Provision for Possible Loss 101,075 101,075 0 0.00% E. Profit from Regular Activities (D+3.9+3.10) 1,629,282 1,629,282 0 0.00% 3.11 Extraordinary Income/Expenses (Net) (15,356) (15,356) 0 0.00% F. Profit before Bonus and Taxes (E +3.11) 1,613,926 1,613,926 0 0.00% 3.12 Provision for Staff Bonus 146,721 146,721 0 0.00% 3.13 Provision for Tax 442,091 442,091 0 0.00% G. Net Profit/Loss (F - 3.12 - 3.13) 1,025,115 1,025,115 0 0.00%
www.standardchartered.com/np 85 Disclosure as per Bank’s disclosure policy under the Basel –II Capital Accord of Nepal Rastra Bank
1. Capital structure and capital adequacy a. Tier 1 capital and a breakdown of its taken by the bank and relating the risk to the standards get escalated and approved by components; the capital adequacy level. The Credit Risk the appropriate authorities as stipulated in the As on 15.07.2009 Committee reviews the Credit Risk, analyzes standards, policy manual and the PDD, with Core Capital (Tier 1) 2,832,760,951 the trend, assesses the exposure impact on audit trail. a Paid up Equity Share Capital 931,966,400 capital and provides a summary report to the b Proposed Bonus Equity Share 465,983,200 Management Committee. Operational Risk Management & Assurance c Statutory General Reserves 1,195,316,709 Framework (ORMAF) has been implemented d Retained Earnings 239,494,642 In respect of operational risk, the Consumer for managing operational risks. In line with e Un-audited current year - Banking, Wholesale Banking and each ORMAF, the 3 lines of assurance ensure cumulative profit Support Function Business Operational effective management of all operational b Tier 2 capital and a breakdown of its compo- Risk Manager provide operational loss data risks. In the 3 lines of assurance, business nents; to Country Operational Risk Assurance is the first line which is primarily responsible As on 15.07.2009 Manager who in turn analyzes the trend and for managing the risk whilst compliance Supplementary provides a summary report to the CORG & assurance and Group Audit occupy the Capital (Tier 2) 357,605,394 & the Management Committee. Finance & second and the third lines respectively to a General loan Strategic Planning checks the capital charge ensure an independent assurance to the loss provision 137,896,614 on operational risk. Board and Senior Management on the b Exchange effectiveness of the risk management. Equalization Reserve 219,708,780 With regard to market risk, the Financial Markets Operation maintains net open The market risks are managed in line with the c. Detailed information about the Subordinated position of all currencies on a daily basis and Bank’s market risk and other related policies, Term Debts with information on the outstand- provides data to Head WB who reviews and giving due consideration to the prevalent analyzes the trend, assesses the exposure market conditions. ing amount, maturity, and amount raised during impact on capital and provides a summary the year and amount eligible to be reckoned as report to the Management Committee. The Comprehensive assessment of risks capital funds. net open position report is also discussed at Credit risk the ALCO. • Not applicable. The credit risk of individual borrowers or counterparties as well as at the portfolio level d. Deductions from capital; Management Committee reviews the is assessed. The credit review assessment • NIL. summary reports received from CRC, CORAM cover risk rating systems, portfolio analysis, e. Total qualifying capital; and the HWB and provides a synopsis to large exposures and the risk concentrations. All NRs 3,190,366,345 the Board along with its view on the risks Corporate and Institutional borrowers including exposure and the adequacy of capital, for SME borrowers, at individual and group level, review and noting. f. Capital adequacy ratio; are assigned internal credit rating that supports 14.70 %. identification and measurement of risk and Sound Capital Assessment integrated into overall credit risk analysis. g. Summary of the bank’s internal approach to In order to ensure a sound capital assessment process, all three risks that have direct impact assess the adequacy of its capital to support Operational Risk on the capital adequacy level are managed current and future activities, if applicable; and Operational Risk Management and Assurance in a structured manner with clear roles and Framework (ORMAF) adopted by the bank responsibilities. For managing the Credit Risk Board and Senior Management Oversight provides comprehensive risk management the Country Underwriting Standards, Country tools for managing operational risk. The Bank management is responsible for Credit Policy, Credit Policy Manual, and understanding the nature and level of risk Operational Risk Management and Assurance Product Development Documents have been Framework (ORMAF) defines how risks are prepared and implemented. Any exception to
86 Annual Report and Accounts 2008-2009 managed, how Operational Risk policies and and monitors strategic and reputational risks controls are assured, how effective governance at a regular interval. While strategic risk is is exercised as well as the key roles required to managed by the CEO, the Reputational Risk manage the underlying processes. Committee is responsible for the management of reputational risk. The governance structure of OR is as follows: • Operational Risk governance ensures Monitoring and Reporting consistent oversight across all levels All risks, including credit, operational and regarding the execution and effectiveness market risks are identified, escalated, of ORMAF. monitored and mitigated to the satisfaction • Operational risks are identified and graded of the risk type owner. The risk type owner at the unit level. Mitigating controls are is responsible for ensuring that risks are put in place and mitigation progress is adequately identified, escalated monitored monitored. These risks are reported to the and mitigated. The bank has adequate system Business Operational Risk Group (BORG). for monitoring and reporting risk exposures • BORG (as a committee) assign ownership, and assessing how the changing risk profile require actions to be taken and monitor affects the need for capital. The Credit Risk progress of risks identified, in addition to Committee reviews and assesses the credit confirming the risk grading provided at risk and provide a report to the Management the unit level. Risks categorized as High Committee. Similarly, the CORG provides or Medium are reported to the Country Country Operational Risk profile and the Operational Risk Group (CORG) and Reputational Risk Committee provides the escalated to Business Operational Risk Reputational Risk profile to the Management Committees (ORCs) at the Regional level. Committee. All other risks are identified and • CORG determines final risk grading and reported by the respective risk type owner. ensures appropriateness of risk ownership, required actions and progress to date. Internal Control Review Risks graded high, are escalated to Group The Bank is committed to managing risk Operational Risk Committee (GORC) and controlling its business and financial h. Summary of the terms, conditions and main through Group Operational Risk Assurance activities in a manner which enables it to features of all capital instruments, especially (GORA) team. maximize profitable business opportunities, • The Business / Function Operational Risk avoid or reduce risks which can cause loss or in case of subordinated term debts including Committees (ORCs) at Regional level reputational damage, ensure compliance with hybrid capital instruments. oversee operational risks within businesses applicable laws and regulations and enhance - Bank has fully paid equity shares as and functions across the Region. resilience to external events. qualifying capital. • The GORC oversees operational risks at Group level with the support of the GORA The effectiveness of the Company’s internal hybrid capital instruments. team. The team assesses risks escalated control system is reviewed regularly by the - Bank has fully paid equity shares as by CORGs and Business / Function ORCs. Board, its committees, Management and qualifying capital. Internal Audit. The Audit Committee has Market Risk reviewed the effectiveness of the internal 2. Risk exposures Risks arising out of adverse movements control system during the FY 2065/66 and a. Risk weighted exposures for Credit Risk, in exchange rates, interest rates, liquidity reported on its review to the Board. The and equity are covered under market risk Internal Audits monitor compliance with Market Risk and Operational Risk management. In line with capital framework policies and standards and the effectiveness of RISK WEIGHTED As on prescribed by NRB, the bank focuses on internal control structures across the Company EXPOSURES 15.07.2009 exchange risk management for managing/ through its program of business/unit audits. computing the capital charge on market The Internal Audit function is focused on the A Risk Weighted Exposure for Credit Risk 18,758,431,918 risk. In addition the interest rate risk, liquidity areas of greatest risk as determined by a risk- B Risk Weighted Exposure risk and equity risk are assessed at a based assessment methodology. Internal Audit for Operational Risk 2,690,614,405 regular interval to strengthen market risk reports regularly to the Audit Committee. The C Risk Weighted Exposure management. The market risk is managed findings of all adverse audits are reported to the for Market Risk 254,117,435 within the tolerance limit set by the Board. Chief Executive Officer and Business Heads for immediate corrective actions. Total Risk Weighted Other risks Exposures (a+b+c) 21,703,163,759 In addition to the credit, operational and market risk, the bank identifies, assesses
www.standardchartered.com/np 87 b. Risk Weighted Exposures under each of 11 categories of Credit Risk calculated for every transaction to determine No. Particulars Claim as on RWE as on 15.07.2009 the appropriate level of approval. Significant 15.07.2009 exposures beyond the authority of Credit Officers in both WB and CB are approved 1 Claims on govt. and central Bank 12,003,929,710 - by CEO as per the delegation of authority 2 Claims on other financial entities 83,793,000 125,689,500 conferred by the SCB Nepal Board after 3 Claims on Banks 13,024,557,926 3,210,997,145 4 Claims on corporate and securities firm 3,680,088,427 2,743,934,216 support from the respective credit risk function 5 Claims on regulatory retail portfolio 4,159,696,473 3,110,871,337 at the group level. 6 Claim secured by residential properties 2,535,902,113 1,526,188,433 7 Claims secured by commercial real state 2,106,505,547 2,068,505,546 Credit function in consumer banking uses 8 Past due Claims 165,053,790 228,395,096 standard application forms which are 9 High risk claims 1,196,322,148 1,484,511,278 processed in central units and credit approval 10 Other Assets 1,667,132,771 786,391,587 process is guided by product development 11 Off Balance sheet Items 10,651,093,620 3,472,947,780 document (PDD) and credit operating manual. The probably of default is calculated Total 51,274,075,525 18,758,431,918 using portfolio delinquency flow rates. c. Total risk weighted exposure calculation table; 3. Risk Management Function Please refer Schedule 4.30 (Kha), 4.30 (Ga), a. For each separate risk area (Credit, Market There are risk officers for both Consumer 4.30 (Gha) and 4.30 (Nga) of the financial and Operational risk), banks must describe Banking and Wholesale Banking businesses. statements for details. their risk management objectives and policies, They have their primary reporting line into the including: group functional level and CEO Nepal. We d. Amount of NPAs (both Gross and Net) have a manual approval process. • Restructure/Reschedule Loan • Strategies and processes; NIL • The structure and organization of the The scope and nature of risk reporting and/or • Substandard Loan relevant risk management function; measurement procedures are covered in the Gross value Rs. 34,422,042, Net values • The scope and nature of risk reporting Country Underwriting Standards approved by Rs. 25,816,531 and/or measurement systems; and the board, PDD and credit operating manual • Doubtful Loan • Policies for hedging and/or mitigating and other group level policies & procedures Gross value Rs. 11,851,308 Net value Rs risk and strategies, and processes for adopted after the board approval. The Risk 2,175,654 monitoring the continuing effectiveness of Management Committee chaired by the • Loss Loan hedges/mitigants. CEO, reviews the portfolio exposure, portfolio Gross value Rs. 44,768,306 Net value: Credit Risk Management strategies include quality, country level risk triggers, etc atleast NIL effectively managing the risk of financial on a quarterly basis. e. NPA ratios loss arising out of booking an exposure on Country underwriting standards and PDD / • Gross NPA to gross advances 0.66 % counterparty and also ensuring independence credit operating manual outlines the Bank’s • Net NPA to net advances 0.20 % of the Credit Risk Management function from the origination and sales function. policies and processes for hedging and/or f. Movement of Non Performing Assets mitigating and monitoring risk. Collaterals Year on year downward movement of Rs. Credit risk under both consumer banking and which are eligible for risk mitigation and 37,678,126. wholesale banking is managed through a valuation of the same are reviewed every year, g. Write off of Loans and Interest Suspense defined framework which sets out policies and underwriting standards also prescribe the Loans Write off during the year is Rs. procedures covering the measurement and frequency of valuation for different collateral 39,126,089 and interest suspense balance as management of credit risk. There is a clear types. Collateral held against impaired loans is on year end is Rs 117,646,865. segregation of duties between transaction maintained at fair value. h. Movements in Loan Loss Provisions and originators and the approvers in the risk Interest Suspense functions. b. Types of eligible credit risk mitigants used Year on year downward movement in Loan and the benefits availed under CRM. Loss Provisions of Rs. 44,440,535 An alpha numeric grading system is used for quantifying the risk associated with the No. Credit Risk Mitigant As on 15.07.2009 Year on year upward movement in Interest counterparty for corporate and institutional 1 Deposits with Bank 1,630,728,762 clients (including SME). The grading is based suspense of Rs. 2,166,234. 2 Deposits with other banks/FI* 507,770,089 i. Details of additional Loan Loss Provisions on a probability of default methodology, 3 Govt. & NRB Securities 360,481,737 Provisions due to growth in the volume have with customers analyzed against a range 4 G’tee of Domestic Banks* 3,374,092 been added. No major additional provisions of quantitative and qualitative measures. In 5 Sec/G’tee of Foreign Banks* 1,690,238,963 have been made. addition to nominal aggregate exposure, Loss Given Default is used in the delegation Total 4,192,593,643 of credit approval authority and must be * net of supervisory haircut
88 Annual Report and Accounts 2008-2009 Nepal Rastra Bank’s Approval and Directions
Nepal Rastra Bank has granted permission to the Bank to publish the Financial Statements along with Balance Sheet; Profit & Loss Account and the related schedules for the Fiscal Year 2065/66 along with the following direction vide Letter no. Bai. Su.Bi /Offsite/AGM 2/066/67 dated 2066/05/08 (24th August 09) and to distribute the Dividend and Bonus Shares on the basis of approval of the Annual General Meeting:
To rectify the comments raised by Statutory Auditor and to ensure that the comments are not repeated.
www.standardchartered.com/np 89 Five years Financial Summary Balance Sheet
(figures in Rs. thousands) Particulars 2061-62 2062-63 2063-64 2064-65 2065-66 2004-05 2005-06 2006-07 2007-08 2008-09
Assets Cash & Bank Balances 1,111,117 1,276,241 2,021,021 2,050,243 3,137,164 Money at Call and Short Notice 2,259,691 1,977,271 1,761,152 2,197,538 2,055,549 Investments 9,702,553 12,838,555 13,553,233 13,902,819 20,236,121 Loans, Advances & Bills Purchased 8,143,208 8,935,418 10,502,637 13,718,597 13,679,757 Fixed Assets 71,413 101,302 125,591 117,272 137,293 Other Assets 493,697 638,565 633,055 1,349,319 1,341,585 Total Assets 21,781,679 25,767,352 28,596,689 33,335,788 40,587,468
Liabilities Borrowings 27,551 - 400,000 - 300,000 Deposit Liabilities 19,363,470 23,061,032 24,647,021 29,743,999 35,871,721 Other Liabilities 808,243 952,181 1,433,315 1,099,242 1,363,277 Total Liabilities 20,199,264 24,013,213 26,480,336 30,843,241 37,534,998 Shareholders’ Equity Paid up Capital 374,640 374,640 413,255 620,784 931,966 Proposed Capitalisation of profit 74,928 112,392 206,627 310,392 465,983 Reserves (General Reserves including Exchange Reserves) 881,511 896,522 991,746 1,178,084 1,415,025 Retained Earnings 251,336 370,585 504,725 383,287 239,495 Total Shareholders’ Equity 1,582,415 1,754,139 2,116,353 2,492,547 3,052,470 Contingent Liabilities Letter of Credit 1,456,762 1,837,398 1,861,944 1,857,994 3,120,879 Guarantees 1,531,069 2,046,063 2,389,969 2,800,467 3,687,373 Forward Exchange Contracts 66,571 362,646 1,121,870 193,985 1,332,126 Other Contingent Liabilities 1,023,066 938,720 1,480,339 1,287,338 2,510,716 Total Contingent Liabilities 4,077,468 5,184,827 6,854,122 6,139,784 10,651,094
90 Annual Report and Accounts 2008-2009 Five years Financial Summary Profit & Loss Account
(figures in Rs. thousands) 2061-62 2062-63 2063-64 2064-65 2065-66 Particulars 2004-05 2005-06 2006-07 2007-08 2008-09 Interest Income 1,058,678 1,189,603 1,411,982 1,591,196 1,887,221 Interest Expenses 254,127 303,198 413,055 471,730 543,787 Net Interest Income 804,551 886,405 998,927 1,119,466 1,343,435 Commission and Discount 178,651 222,929 221,207 276,432 235,469 Other Operating Incomes 29,293 25,442 28,785 32,594 33,191 Exchange Fluctuation Income 273,044 283,472 309,087 345,653 480,031 Total Operating Income 1,285,539 1,418,247 1,558,006 1,774,145 2,092,126 Staff Expenses 148,586 168,231 199,778 225,256 253,056 Other Operating Expenses 256,649 221,087 228,451 230,571 276,327 Exchange Fluctuation Loss - - - - Operating Profit Before Provision for Possible Loss 880,304 1,028,930 1,129,776 1,318,318 1,562,743 Provision for Possible Losses 27,726 47,730 36,809 69,885 56,635 Operating Profit 852,578 981,200 1,092,968 1,248,432 1,506,109 Non-Operating Income/ (Loss) 2,957 1,433 9,492 1,683 22,098 Provision for Possible Loss Written Back 33,685 53,090 20,160 90,635 101,075 Profit from Ordinary Activities 889,220 1,035,723 1,122,620 1,340,750 1,629,282 Income/(Expenses) from Extra Ordinary Activities (2,389) (2,411) (4,915) (28,039) (15,356) Net Profit after considering all Activities 886,831 1,033,312 1,117,705 1,312,710 1,613,926 Provision for Staff Bonus 88,683 93,937 101,610 119,337 146,721 Provision for Income Tax 261,903 280,619 324,427 374,452 442,091 Net Profit/Loss 536,245 658,756 691,668 818,921 1,025,115 Accumulated Profit up to Previous Year 217,586 251,336 370,585 557,724 383,288 This Year’s Profit 536,245 658,756 691,668 818,921 1,025,115 Capital Adjustment Fund upto Previous Year - 74,928 Total 753,831 910,092 1,137,181 1,376,645 1,408,402 General Reserve Fund - - 77,229 163,784 205,023 Proposed Dividend 449,568 487,033 330,604 496,627 465,983 Proposed Issue of Bonus Shares - 37,464 206,627 310,392 465,983 Exchange Fluctuation Fund 15,463 15,011 17,996 22,554 31,918 Capital Adjustment Fund 37,464 - - - Accumulated Profit/(Loss) 251,336 370,585 504,725 383,288 239,495
www.standardchartered.com/np 91 Notes: Disclaimer
Standard Chartered Bank Nepal Limited entities are Equal Employment Opportunity/ Affirmative Action employers. Standard Chartered Bank Nepal Limited is committed to providing equal employment opportunities to every employee and every applicant for employment, regard-less of, but not limited to, such factors as race, color, religion, sex, age, familial or marital status, ancestry, sexual orientation, veteran status or being a qualified individual with a disability; within the legal framework of the country.
Standard Chartered Bank Nepal Limited undertakes no obligation to update any statement in this Annual Report 2008-2009 to reflect events or circumstances after the date on which such statement is made. Information in this Summary Annual Report is as of July 15, 2009.
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