Financial Highlights Deposits (NPR. In Billion) Loans and Advances (NPR. In Billion) 92.28 83.44 79.18 69.24 58.23 46.42 51.84 40.90 34.05 28.59 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 As at Mid July As at Mid July Investments (NPR. In Billion) Total Assets (NPR. In Billion) 16.96 109.06 91.82 13.17 70.00 10.73 9.16 55.96 7.74 40.30 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 As at Mid July As at Mid July Shareholders Fund (NPR. In Billion) Net Interest Income (NPR. In Million) 11.99 10.79 4,208.70 9.06 3,015.52 5.35 2,242.12 3.43 1,722.30 1,139.39 2015 2016 2017 2018 2019 2014/15 2015/16 2016/17 2017/18 2018/19 As at Mid July Fiscal Year Operating Profit (NPR. In Million) Net Profit (NPR. In Million) 2,285.10 3,224.90 2,415.20 1,697.50 1,998.10 1,304.10 1,478.50 996.05 925.70 624.14 2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19 Fiscal Year Fiscal Year Financial Highlights Non Performing Loans (%) CAR (%) 15.57 11.08 12.36 12.41 13.19 0.073 0.019 0.010 0.030 0.080 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 As at Mid July As at Mid July ROE (%) DPS (%) No. of Branches No. of ATM 74 78 23.20 21.05 22.69 18.67 74 53 69 16.00 47 21.05 40 18.19 15.79 14.39 14.00 46 38 40 2014/15 2015/16 2016/17 2017/18 2018/19 2015 2016 2017 2018 2019 Fiscal Year As at Mid July Composition of Income Composition of Expenses Interest Interest Forex Personnel 13% Others Income Tax Others 3% 10% 90% 7% 67% 10% Contents S.N. Particulars Page No. 1 Profile 1 2 Chairman's Speech 2 3 Director's Report 3 4 Additional Disclosures as per section 109 of the Companies Act, 2063 9 5 Disclosure Related to Sub Rule (2) of Rule 26 as per annexure 15 of Securities Registration and Issuance Regulation, 2073 11 6 Independent Auditor's Report 12 7 Consolidated Statement of Financial Position 14 8 Consolidated Statement of Profit or Loss 15 9 Consolidated Statement of Other Comprehensive Income 16 10 Consolidated Statement of Cash Flows 17 11 Consolidated Statement of Changes in Equity 18 12 Notes to the Financial Statements and Significant Accounting Policies 20 13 Disclosures and Additional Information 72 14 Comparision-Unaudited and Audited Financial Statements of FY 2018/19 86 15 Capital Adequacy 87 16 Sanima Capital's Financial Statements 95 Profile Sanima is a leading commercial bank in Nepal, promoted by Sanima recognizes that in the capacity of a commercial prominent Non-Resident Nepali’s (NRNs) that commenced bank, it is an inevitable part of the society’s economic organ operations in 2004 as a National Level Development Bank. and it draws on societal resources for day to day functioning. Since February 2012, Sanima has upgraded to an "A" Class The bank is a trustee of public money in addition to being Commercial Bank with its registered office at 'Alakapuri', a corporate body. Therefore, apart from its core objectives, Naxal, Kathmandu, Nepal. the bank has certain obligations to contribute to society as a whole. Sanima believes in creating societal impact through Sanima is committed to provide one window financial replicable, sustainable and scalable CSR programmes. solutions to various customer segments and to achieve a healthy level of growth in profitability, consistent with the Capital Structure NPR bank's risk appetite. The Bank has displayed dedication Authorized Capital 9,000,000,000 towards maintaining the highest level of ethical standards, Issued Capital 8,001,255,440 professional integrity, corporate governance and regulatory Paid Up Capital 8,001,255,440 compliance. Consequently, Sanima is perceived as a strong and reliable player in the banking industry. Sanima has always been committed to meet customer expectations in all areas of its business through continuous improvement. Sanima Bank offers a wide range of banking products and financial services to corporate and retail customers through 79 full-fledged branches and 1 extension counter spread across the geography of Nepal. The bank is actively exploring alternative channels and also expects to add more branches in the coming days. Annual Report 2018/19 Chairman's Speech Respected Shareholders, It gives me immense pleasure to welcome our shareholders the areas of health & education and is also aiming to extend and guests to the 15th Annual General Meeting of Sanima Bank continuity to the same. The bank shall continuously focus on Limited. I am equally delighted to report that Sanima Bank has Technology, Human Resource Management, Risk Management, delivered a strong performance in the Fiscal Year 2018/19 as Enhanced Customer Satisfaction etc. to grow in a strong and well. sustainable manner. Bank has already implemented enhanced Core Banking Software. Despite huge competition in the banking industry, Sanima Bank has been able to maintain successful identity in financial sector. Achievement and activities of the bank till date have been The Bank has grown income in a strong, safe and sustainable disclosed in detail in the ‘Annual Report of Board of Directors’. manner while efficiently managing both cost and capital. For this We remain focused on improving our service to our clients, achievement, I would like to thank all shareholders, customers, generating strong returns for our investors and contributing well-wishers, employees, other stakeholders and all associated even more to the communities in which we operate. organizations for their valuable contribution. I express my sincere gratitude to all our shareholders and The Bank (inclusive of Sanima Capital) has been able to guests for your continued support and cooperation. I would increase net profit by 34.68% in fiscal year 2018/19 on y-o-y like to extend my heartfelt gratitude to all the stakeholders, basis generating the net profit of NPR Two Billion Two Hundred Government Entities, Nepal Rastra Bank, Securities Board, Seventy Three Million Five Hundred Sixty Seven Thousand. It has Office of Company Registrar, Nepal Stock Exchange Limited, been proposed to distribute 10% stock dividend and 11.05% External Auditors, Media and all well-wishers for their valuable cash dividend from the retained earnings. suggestions, feedbacks and continued support. I look forward to continuous guidance from the Board of Directors, dedication and As banking plays a crucial role at the heart of the economy and in hard work from our staff members, and valuable advice, trust & the lives of individuals, we remain committed in Nepal’s economic support from all our shareholders and stakeholders. growth by supporting our clients and customers in various ways. On the corporate social responsibility front, Sanima Bank has Once again, I welcome you all to this 15th Annual General been contributing to deprived communities through activities in Meeting and wish you prosperity and progress. Thank you! Binaya Kumar Shrestha Chairman September 22, 2019 2 www.sanimabank.com Annual Report 2018/19 Director’s Report Respected Shareholders, Credit and Deposit Sanima is performing well under proper guidance aligned In the review year, credit from Banks and Financial with appropriate strategy and we have continued to provide Institutions increased by 19.4 percent compared to a reasonable returns to our shareholders. Sanima’s position growth of 22.5 percent in the previous year. Similarly has been upgrading in terms of financial indicators and we deposits collection increased by 18 percent compared to a are making efforts to be in the frontline. Sanima Bank has growth of 19.2 percent in the previous year. Growth of credit been able to generate profit since its inception and despite by 19.4 percent and deposits by 18 percent clearly reflects of various adversities in the banking sector, it has been able tight liquidity situation in market. to strengthen business and profitability. Share of Institutional deposit in total deposit of Banks and A. Synopsis of Financial Performance Financial Institutions stood at around 45 percent likely in the NPR In Million previous year. Share of demand, saving, and fixed deposits Details Mid July Mid July Change (%) in total deposits stood at 9.7 percent, 32.8 percent and 46.3 2019 2018 percent respectively in mid-July 2019. Such shares were Net Loans and Advances 83,439 69,243 20.50 9.3 percent, 34.5 percent, and 44.8 percent respectively Investments 16,959 13,173 28.74 a year ago. Deposit 92,284 79,183 16.54 Profit/ Loss FY 2018/19 FY Change (%) In the mid July 2019, 64.4 percent against the collateral of 2017/18 land and building and 13.5 percent against the collateral Net Interest Income 4,209 3,016 39.57 of current assets (such as agricultural and nonagricultural Operating Profit 3,225 2,415 33.53 products of the total outstanding credit of the Banks and Net Profit 2,258 1,698 33.02 Financial Institutions. Such ratios were 61.7 percent and FY 14.4 percent respectively a year ago. Other Details FY 2018/19 2017/18 Change (%) Stock and Cash Dividend 1,684 1,120 50.37 During the review year, loans to agriculture sector increased CAR (%) 13.19 12.41 0.78 by 42.5 percent, industrial production sector increased Non-Performing Loan by 20.3 percent, construction sector increased by 22.2 (%) 0.08 0.03 0.05 percent, wholesale and retail sector increased by 15.7 percent, service industry sector increased by 24.3 percent During the review year, loans and advances of the bank and transportation, communication and public sector increased by 20.50 percent whereas deposit mobilization increased by 32.8 percent.