;g\/fOh a}+s lnld6]8 SUNRISE BANK LIMITED RISING TO SERVE www.sunrisebank.com.np ANNUAL REPORT 2013/14 A.D.(2070/71 B.S.) 2 Sunrise Bank Limited Seventh Annual Report 2013/14 BOARD OF DIRECTORS MR. MOTILAL DUGAR Chairman DR. BHOGENDRA GURAGAIN ER. BACHH RAJ TATER MR. SHRAWAN KUMAR GOYAL MR. MALCHAND DUGAR Director Director Director Director DR. DEEPAK PRASAD MR. DEEPAK NEPAL MR. JYOTI KUMAR BEGANI MR. SHANKHAR PD. DAHAL BHATTARAI Public Director Public Director Professional Director Public Director MR. ISHWOR KUMAR PATHAK (Company Secretary) Seventh Annual Report 2013/14 Sunrise Bank Limited 3 FINANCIAL GLANCE OF THE YEAR 2013/14 DEPOSITS GROSS LOANS NET PROFIT 26,617M 20,978M 247M 14% 14% 21% NET INTEREST OTHER OPETATING STAFF & INCOME INCOME OPERATING COST 1,095M 309M 624M 11% 15% 14% LOAN LOSS PROVISION TAX TO PROVISION WRITE BACK GOVERNMENT 467M 94M 124M 27% 55% 16% NET INTEREST SPREAD NPA PERCENTAGE LIQUIDITY 4.55% 4.94% 33.31% 0.21% 1.20% 0.20% CAPITAL ADEQUACY EARNING PER SHARE CLOSING SHARE PRICE 11.49% 11.03 510 0.31% 4.43 278 NO OF EMPLOYEES NO OF BRANCHES/ATM NO OF ACCOUNTS 445 51/61* 2,50,000 5 2/4 16% (* Currently Bank has 53 brances & 64 ATMs) (M = million) 4 Sunrise Bank Limited Seventh Annual Report 2013/14 CHAIRMAN MESSAGE Dear Shareholders, With the increased market competition as well as I am privileged to welcome all our distinguished bargaining power of customers and compliance with shareholders, guest and stakeholders to the Seventh internal, national and international standards etc Annual General Meeting of Sunrise Bank Limited and it is evident that the bank will have to face several would like to present the Bank’s Annual Report for the challenges in the various aspects in the coming Financial Year 2013/14. financial years. However the Bank is confident with its dedicated board and employee along with its valued I am delighted to state that the bank has been able customers to overcome those challenge and enhance to increase its Balance Sheet size by 14% which is a the return to its stakeholders. satisfactory growth despite some adverse market conditions like excess market liquidity, decreasing Based on the first three quarter performance of the interest spread and unstable political condition. The bank, I am very much confident that Bank will deliver bank has been able to achieve a growth of 14% both better financial result in current financial year without in terms of Deposits and Loans & Advances. However compromising on its prudent approach on credit and due to provision of loan loss on certain bad loans corporate governance. bank’s profitability has been reduced by 21%. Finally, I would like to thank my Board members for The Capital Adequacy Ratio of the Bank remained their valuable contribution and continuous support at 11.49% which is above our prescribed regulatory in bringing this organization so far. Further, I would requirement. also like to express my sincere gratitude to our valued customers without whom the journey so far would not I am very pleased to announce that the Seventh be possible. I would also like to thank the statutory Annual General Meeting has passed the issue of 15% authorities: Nepal Rastra Bank, Securities Exchange Right shares. Board of Nepal, Nepal Stock Exchange, Company Two new branches have been established at Dumre Registrar Office, Finance Ministry, Nepal Government and Butwal during the review period. The bank and Other Statutory bodies. I would also like to established other two branches at Lahan and Gaighat express my appreciation to all our employees for their during the year. The bank has also opened its first sincere effort and continuous support throughout this extension counter at B.P. Koirala Institute of Health glorious journey. Sciences. Currently the bank has been extending services to our valued customers through 53 branches, 1 extension counter and 64 ATM outlets. Thank You, Motilal Dugar We have successfully operated for the seventh Chairman consecutive years with the support of our stakeholders. We further endeavor to move towards excellence thereby benefiting our stakeholders and the organization. Seventh Annual Report 2013/14 Sunrise Bank Limited 5 From the Desk of Chief Executive Officer It is my immense pleasure to share with you all that customer satisfaction and the better return to the Sunrise Bank Limited has completed its seventh glori- stakeholders. ous years of operation. In this moment, I would like to Amidst the unstable political situation, stringent regu- extend my gratitude to all our customers, sharehold- latory requirements and cut to throat competition in ers, employees, business partners and stakeholders the financial market; we have been able to earn a con- for their continuous support throughout this journey. siderable amount of profit. This has only been possi- The Fiscal Year 2013/14 has been yet another chal- ble through the joint support of all our stakeholders lenging year for us. Despite the challenges, we have and dedicated team of employees. been able to earn an Operating profit before loan loss provision of NPR 779.28 Millions. We have grown our As always, our human capital has been our greatest deposit base to NPR 26.61 billion and our lending intangible assets. We have invested a good chunk base to NPR 20.98 billion. We have our primary focus on improving our human capital for organizational on business expansion coupled with unparalleled ser- efficiency and productivity. Further, with the view of vice delivery. Our branch expansions have helped us continuously improving our service delivery, we have in increasing and diversifying our clientele base and focused on upgrading IT support. we further endeavor to expand our financial reach to many other untapped markets in the country. Although the net profit of the bank has reduced during the year, the Bank’s profitability will show a greater Thank You, upward move in the current financial year. The mate- Ratna Raj Bajracharya rialization of NPA recovery, control in operating cost Chief Executive Officer will result in the increase in profit of the Bank. Currently bank is serving its valued 250,000 customers through 61 ATMs and 53 branches across the coun- tries. We will continue to focus in Retail & Small Busi- ness Loan and Agriculture Loan focusing direct benefit to the marginalized farmers. We believe in achieving another milestone through this product. Reaching to the masses catering their small loan requirements through our wider branch network has remained our priority. Our prime focus will always be the greater 6 Sunrise Bank Limited Seventh Annual Report 2013/14 DIRECTOR’S REPORT Respected Shareholders, I am glad to present on behalf of Board of Directors the Balance Sheet, Profit & Loss Account and Cash Flow Statements of Financial Year 2013-14 along with summary of Bank’s progress & developments, Operational Challenges and complete banking sector analysis. This report is prepared in accordance to Company Act, 2063, Banks & Financial Institution Act, 2063 and NRB Circulars & Directives issued from time to time. GLOBAL ECONOMIC CONDITION NATION’S ECONOMIC Although the global economy is slowly CONDITION reviving from the adverse effect of During the FY 2013/2014 the actual GDP recession, the aggregate internal demand growth rate at base price stood at 5.2% of developed countries is still weak which while the average consumer inflation is assumed to exert less pressure on the stood at 9.1%. Similarly, the country’s net overall inflation of the world. According export reached NPR 90.29 Billion with an to the IMF, the World’s economic growth increase of 17.4% while the import also is forecasted to be 3.6% and 3.9% in 2014 increased to NPR 708.76 Billion which led & 2015 respectively. The US economy is to a vulnerable trade deficit. However, due expected to grow by 2.8% and Euro Zone to the remarkable improvement in the is expected to grow by 1.2% while the remittance inflow, tourism and subsidy emerging and developing countries are the current account of balance of payment expected to grow by 4.9%. The adverse showed a surplus of NPR 89.85 Billion. effects of the financial crisis prevailing in In the FY 2013/14, due to the remarkable America, Euro Zone, Japan and developed increase in remittance inflow, there had countries are expected to end in 2014/15 been wide expansion in deposit collection and hence the improvement in these in comparison to loan outflow in the BFIs economies is assumed. Similarly, our which had led to high liquidity in the BFIs. neighboring countries India and China According to the preliminary estimation of which had achieved the economic growth Central Bureau of Statistics, the actual GDP rate of 4.4% and 7.7% respectively in 2013 growth rate stood at 5.2% at base price are expected to grow by 5.4% and 7.5% and 5.5% at production price. In the first respectively. 11 month of FY 2013/14, the balance of payment showed a surplus of NPR 109.56 With the improvement seen in the Billion. The net export and net import economy of the developed countries, increased by 16.9% and 27% respectively the economic activities in the emerging in the review period. and developing countries have expanded and global trade volume have widened. FINANCIAL SECTOR’S CONDITION Specially, since the increase in price level IN NEPAL of the Euro Zone is below the targeted Although the increase in number of merger level, it will have contractionary effect on and acquisitions of the BFIS has decreased the world’s aggregate inflation rate. the number of BFIs, the business expansion of such institutions had increased the financial reach.