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 overview 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. 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