2013-2014 Kumari Bank Annual Report

Board of Directors’ Report
For Fourteenth Annual General Meeting
Respected Shareholders.
On behalf of the Board of Directors, we would like to welcome all the shareholders, invited representatives’,
media representatives and assisting staffs to the fourteenth Annual General Meeting of Kumari Bank Ltd.
We are delighted to present you this bank’s financial status, its achievement and future prospects in this
fourteenth Annual General Meeting. We have reached 14th year of service collecting all good and bad
experiences and learning lessons from such experiences. From its inception, this bank has been achieving
continuous progress through modern banking technology and practices. We take your suggestions as
our course of action so that the bank can be more successful and sustained. We take your permission to
present you with the achievements attained in the fiscal year 2070/71.
1. A holistic view of the transactions in the past years
Table 1: Financial look at the bank’s past 5 years’ performance

Amount in Rs. million
Fiscal year
066/67 067/68 068/69 069/70 070/71
Particulars
Paid-up Capital* 1,306.01 1,603.80 1,603.80 1,828.33 2,431.68
Deposit 17,432.25 16,986.28 21,985.20 25,318.57 27,578.38
Loans, Borrowings & Advances 14,966.08 14,926.23 18,101.34 20,119.79 22,808.50
Fixed Asset (Net) 285.64 306.28 277.27 255.86 235.78
Interest Income 1,871.07 2,251.79 2,441.58 2,464.31 2,410.78
Interest Expense 1,188.92 1,566.55 1,622.49 1,486.28 1,575.31
Net Interest Income 682.15 685.24 819.09 978.03 835.47
Other Income 164.35 190.06 203.36 237.05 330.83
Operating Expense 345.36 380.93 406.32 434.27 461.82
Operating Profit before loan
501.14 494.38 616.13 780.81 704.48
loss provision
Operating profit 488.06 380.60 429.09 466.19 468.16
Net Profit/ (Loss) 316.54 251.24 275.50 291.45 341.65
Dividend Per Share 12.01 8.44 7.00 14.74 34.74
*Paid-up Capital of FY 2070/71 includes Bonus Share.
Looking at the performance of the past 5 years, it is evident that the bank has had a significant increment
in this financial business. In the past years, the bank has had a good deposit collection and had increased
the area of loan and to cope up with increased financial transaction, bank had increased the capital as
well. The bank has been able to increase its profit along with its balance sheet size.
A comparison between the fiscal year 2069/70 and 2070/71 shows that bank achieved growth in deposit
and loan by 8.93% and 13.36% respectively. Due to minimization of spread rate of Interest on Loans and
Deposits has reduced Net Profit by 14.58%. Other Operating Income increased by 40% in FY 2070/71
whereas operating expenses growth limited to 6.34% only. Likewise, Operating Profit of bank increased by
0.42% and Net Profit increased by 17.23%. With the experiences gained from the past, the bank shall strive
to perform better in the days to come.
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Kumari Bank Annual Report 2013/14

2. Reviewing national/ international economy:

International Monetary Fund has estimated that the world economic growth in the year 2015 is to be
at around 3.9%. Similarly, it is projected to increase United States’ economy by 2.8% and European
economy by 1.2% in 2014. The economy of emerging and developing countries are expected to grow
by 4.9%. At the same time, Indian and Chinese economies are expected to grow respectively at 5.4&
and 7.5%. Developed countries including United States, European countries and Japan are affected
by recession from a long period is expected to improve in 2014/15. Due to significant increment rate
in recession is still expected to affect European economy. Some amount of risk of recession is still
expected to impact the European economy. World Economy has moved towards improvement from
recession but with persistent risks and challenges.
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Demand side is still weak in the world economy. In this perspective, there is less pressure in global
inflation. According to International Monetary Fund’s projection in the year 2014 will be 1.5% in
developed countries. Similarly, inflation rate in emerging and developing countries will be at around
5.5% in 2014. At the same time, according to International Monetary Fund’s projection, inflation rate of
China and India will be 3% and 8% respectively.
In fiscal year 2070/71, due to favorable climate, there was growth in agricultural products along with
security and labor; which led improvement in non-agricultural sector, Gross Domestic Product (GDP)
rate as compared to the last fiscal year.
In review period, GDP is in the rise as compared to the last fiscal year. According to Central Beaureu
of Statistics, the actual base rate of GDP is at 5.2% and production is at 5.5% which was 3.5% and 3.9%
respectively. In the review period, growth percentage of agricultural and non-agricultural sector is
expected to be 4.7% and 5.3% respectively; which was 1.1% and 4.6% in last fiscal year. In the review
period, industrial sector and service sector under the non-agricultural sector grew by 2.7%and 6.1%
respectively; which was 2.5% and 5.2% respectively. On the basis of Consumer Price Index (CPI) for
11 months, the average inflation rate for fiscal year 2070/71 is 9.1%; which was 9.9% in previous year.
The price hike in edible products like fruit and vegetable, meat and fish, egg and milk products; weak
supply, energy crisis, weakening exchange rate and high price of petroleum products and Indian
inflation rate causing overall pressure to our inflation. Per Capita expenses increment was up to 14.9%
where as production remained the same that has also affected country’s inflation rate.
Total export has increased by 16.9% and total import increased by 27%. Import basis and increment
rate is higher as compared to export; as a result the export import ratio of 11 months for the fiscal year
2070/71 limited to 12.7%; which was 13.7% previous year.
Liquidity condition has eased and short term/ temporary interest rates are quite low in bank and financial
institutions from the very beginning of the fiscal year 2070/71, in Asadh 2070, the weighted average of
91-days Treasury bill rate decreased to 0.02%, which was 1.19% in previous year. Commercial bank’s
weighted average inter-banking rate decreased to 0.16% which was 0.86% last year. The weighted
average of deposit is 4.22% and that of loan is 10.81%; which caused interest rate spread of 6.59%.
The ratio of Loan/ Capital and Deposit of commercial banks has reached 73.5% in Baisakh 2071. The
inactive loan of commercial banks reached 3.04% by Chaitra 2070. Considering total internal loan of
11 months, it increased to 7.1% as compared to 10.9% increment in previous year. Similarly, the deposit
of financial institution has increased by 12.5% than that of 9.8% in previous year. Financial Institution’s
gross loan for agriculture and energy has increased by 6.16% and 2.13% respectively.
After holding second constitutional election, excitement in investors eased liquidity scenario and
decreasing interest rate led to increase in NEPSE Index by 99.9% to 1,036.1 in Asadh 2071. There is
significant increment in trading amount also.
According to the data of Asadh End 2070, published by Nepal Rastra Bank, there are 30 A category,
84 B category, 53 C category and 37 D category, altogether there are 204 bank & financial institutions
in operation. (Source: Nepal Rastra Bank Website)
3. Review of the Bank’s operations in FY 2070/71:

Analysis of the financial statement of review period clearly depicts the growth in banking transaction,
asset and profit. Such increment led in increment of balance sheet size by 10%, which is Rs. 31.02 billion
in fiscal year 2070/71.
A. Capital management: By the end of 2070/71, paid up capital of the bank has reached to Rs. 2.43 billion
(including proposed bonus share). Also the capital adequacy ratio has to be minimum 10%, of which
by the end of review period, the total capital adequacy is 11.81%.
B. Deposit: Compared to the last fiscal year, deposit increased by 8.93% and the total deposit reached
Rs. 27.57 billion.
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Table 2: Comparative State of Deposits:
Amount in Rs. million
Deposit FY 070/71 % of total deposit FY 069/70 % of total deposit
Current 1,391 5.04 1,175 4.64
Savings 7,234 26.23 6,823 26.95
Call 6,812 24.70 5,968 23.57
Fixed 12,142 44.03 11,353 44.84
Total 27,579 100.00 25,319 100.00
C. Loans, borrowings and advances: In fiscal year 2069/70, the bank’s total loan was Rs. 20.11 billion, while
at the end of review year, it increased by 13.36% reaching Rs. 22.80 billion. The bank has distinguished
its lending into personal loans, education loans, small business loans, organizational loans and
development projects loan. During the review period, bank’s inactive loan was 4.03 %, but the gross
inactive loan ratio was only 1.04%. The bank suffered from the low movement in real estate, just like
other banks. Because of this, the inactive loan has increased. We would like to inform you that we shall
regulated these loans in the days to come.
In FY 2069/70, the loans of real estate amounted to Rs. 2.18 billion, which the bank brought down by
7% to Rs. 2.04 billion. Nepal Rastra Bank directed real estate loan should not exceed 25% whereas the
bank has reduced it to 8.95% only at the end of Ashadh 2071. All the commercial banks in Nepal have
been able to bring down the percentage only by 5%. (Source: Unpublished Financial Data). In this
context, the bank’s management is working vigorously to minimize the risk of real estate loans.
D. Investment: In accordance with the bank’s objective of getting returns from the overall resources
by maintaining balanced liquidity, the bank has given continuity to its policy of investing in Nepal
Government and Nepal Rastra Bank’s risk free securities (Treasury bill, development bond, etc). The
bank has been carefully investing in local and international market and various organizations’ share
and bonds. The bank has invested Rs. 2.36 billion in NG’s treasuring bills making the total investment of
the bank to be Rs. 3.16 billion by the end of FY 2070/71.
E. Profit: During the review period, interest rates of loan and deposit have decreased in the bank along
with that of financial institutions; which resulted decrease in net interest income by 14.58%. In fiscal year
2070/71, the bank successfully achieved other operating income of 40% whereas operating expense
limited to 6.34% only. Similarly, the banks’ operating income increased by 0.42% resulting increment in
net profit by 17.23% in the same year.
F. Contribution to Government Revenue: The bank has already paid Rs. 148.2 million as corporate tax to
the government during this year’s review period in comparison to the entire FY 2069/70 when Rs. 123
million was paid in tax.
G. Products and Services: In the review period, the bank has introduced advantageous products and
services for its customers. The agreement between JME and the bank was held to bring online remit
service. As per the agreement, the fund transferred from Japan routed through JME could be provided
amongst customers via all branches of Kumari bank and almost 1500 agents of Kumari Remit. Similarly,
there has been agreement between Kumari bank and Sanima bank to provide remittance service
through 27 branches of Sanima bank also. The bank itself has been providing bill payment facility to
NTC ADSL service users. This service facilitates the customers to pay for NTC ADSL service from any
branch of Kumari bank, via Kumari Mobile Banking or Internet Banking as well. Also, the customers can
make bill payments for NTC Prepaid Recharge Card, Worldlink Recharge Card, NTC postpaid bill, NTC
landline bill, Ncell postpaid bill and others.
The bank has been introducing newest and the most modern products and services since its inception.
Technologically sound and modern services have helped the bank reach a respectable position in
the financial market. The bank is even more resilient to bring newer services and added features for
easier access of the products to people. Our products and service areas encompass education loan,
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exports-imports business, hybrid loan, remittance service, and various types of deposit service and
others as well. Products that are introduced to cope up with the market competition like Visa Electron
Debit Card, Visa Prepaid card, Internet Banking, eSewa, SMS Banking, Kumari Mobile Banking and
others have been very popular. Visa Electron, Dollar Debit cards can be accessed via VISA network in
Nepal, India and any other part of the world. The bank has been continuously working towards adding
remittance agency in order to provide better access to sending and receiving funds from inside and
outside the country via Kumari Remittance Software.
H. Branch and Network Expansion: The bank extended 6 new branches this fiscal year. Currently, the
bank has 25 branches outside valley and 9 branches inside valley, altogether 34 branches, 2 extension
counters and 40 ATMs. Moreover, the bank is planning to introduce 2 new branches inside Kathmandu
valley.
I. Corporate Governance: Banks and financial institutions are public organizations not only operated with
shareholders’ funds but also through institutional and public deposit. This means that good corporate
governance and moral character should be followed compulsorily.
J. Risk Management: A separate risk management sub-committee has been established to identify,
monitor and protect the bank from potential risks associated with different activities of the bank.
Policies and regulations have also been formed and implemented to manage the numerous risks
associated with banking activities as well as other potential risks. The bank has taken the policy to
make the internal control system more effective and efficient by properly managing the bank’s loans,
operations, market and other risks.
The bank has executive management that formulates required policies, regulations, and documentation
related to loan management, customer recognition, stress test and daily transactions activities.
a. Loan Risk Management: To manage loan risks, the bank as taken up a policy to determine the loan
risk segments and invest in the least risky segment. And, the bank has given priority to concentrated
risk minimization.
b. Operating Risk Management: All activities related to the bank’s operations are based on given
policies and guidelines and clearly stated work ethics and implementation. Because of this, we are
confident that operating risks are being managed well.
c. Liquidity Risk Management: Consideration the scenario of maximum liquidity and liquidity crunch
on time, the bank determines various financial source and investment area in order to maintain
balanced liquidity. The bank has followed the instructions of NRB regarding liquidity.
d. Market Risk Management: The bank has made policies and devised working methods to monitor
the foreign exchange situation to minimize risks associated with fluctuations in foreign currency
exchange rates. Similarly, arrangements have also been made for formulating the necessary policies
and regulation by regular monitoring market interest rates.
K. Corporate Social Responsibility: The bank is aware of its social responsibilities along with this professional
intent as well. The bank has been providing scholarship to children via HOPAD Child and Women
Promotion Society (NGO) as part of CSR. The bank has provided 3 days free health camp service to
flood victims in Sindhupalchowk area through Indrawatee Community Service Centre. Similarly, bank
provided financial support to flood victims through Nepalgunj branch. The bank provided educational
materials to Dhaulagiri Deaf School, Baglung for deaf students. The bank also held Banking Literacy
Campaign in Balaju Engineering College focusing awareness in banking and advantages of saving.
It is our responsibility to retain our culture. So, the bank also supports the organizer of Kumari Jatra by
providing financial supports. The bank also conducts blood donation program, school and colleges’
development programs and supports various clubs in frequent basis in order to participate social
activities.
L. Committees and sub-committees appointed by Board of Directors: According to popular law and the
policies made under bank’s authority, the following committees and sub-committees are in place:
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a. Audit committee: In accordance with Section 164 of the Company Act, an audit committee was
in place comprising of Directors Naresh Dugar and bank’s internal audit chief member under the
convenorship of Non-executive Director Prof. Rajan Bahadur Paudel. The bank’s internal audit
division reports directly to this committee.
b. Human resource sub-committee: In order to guide management in selection of capable employees,
recruitment, appointments, skill development and related services/ facilities, and other such matters,
a human resource sub-committee comprising of director Santosh Kumar Lama, Director Rashindra
Bahadur Malla and head of human resource department under the convenorship of Director Dr.
Shobha Kant Dhakal.
c. Risk management sub-committee: In order to correctly identify and eradicate the risks of the bank,
a committee comprising Director Prof. Dr. Rajan Bahadur Paudel, Director Puna Ram Bhandari and
head from the respective department under the convenorship of Director Uttam Prasad Bhatarai is
placed in the sub-committee for formulation of policies, regulations for the same.
Such committees and sub-committees appointed by the board of directors have been conducting
their activities within the premises set by the Board, Company Act 2063 and in accordance to the
Nepal Rastra Bank’s directives. This committees and sub-committees’ work, duties and authority
and the conveners and member of the stated committees and sub-committees have not been
provided with any additional reimbursements and facilities except for meeting allowances.
d. Other management level committees: Besides the above mentioned committees and sub-
committees appointed by the Board of Directors, the following have also been conducting
their activities under convenorship of the CEO in order to implement the bank’s activities more
effectively: management committee, asset and liability management committee, labor relations,
pricing committee, HR committee, discipline and performance review committee, and bad loans
recovery committee.
M. Human Resource: Executives/ staffs play the key role for the overall development of any bank. The
bank human resource policy appoints able and professional staffs while recruiting and to increase the
efficiency, professional ability, managerial techniques and productivity of the staffs, the bank provides
national and international level training as well. The bank is currently focused to increase the efficiency
of the manpower and bring in new techniques, so that in the days to come, the ratio between risk
and result is balanced. The bank continually amends the Executive Service Terms, 2064 so that the
administration of the bank is always effective. Also, the bank’s executive organizational structure is
reviewed and new structure is put in its place so that the operation becomes more effective even so
often. At the end of the review period, 362 staffs are working in the bank. During the review period, our
staffs were involved in various porting and social activities as well.
Current year’s achievements and programs: These are the financial status of the current year till the
end of Bhadra month.
Table 3: Current year’s financial glimpse:
Amount in Rs. Million
2071 Bhadra 2070 Bhadra
Titles Change (Rs.) Change %
month’s end month’s end
Paid-up Capital 2,431.68 1,828.33 603.35 33.00
Deposit 28,987.23 25,642.17 3,345.06 13.05
Loans, Borrowings and Advances 23,481.95 20,114.32 3,367.63 16.74
Investment (Net) 3,508.39 4,463.72 (955.33) (21.40)
Interest Income* 386.26 426.73 (40.47) 9.48
Interest Expense 242.24 290.27 (48.03) (16.55)
Net Interest Income 144.02 136.46 7.56 5.54
Other Operating Income 49.68 50.59 (0.91) (1.80)
Operating Expense 77.08 69.05 8.03 11.63
Operating Profit/ (Loss) before the
116.62 118.00 (1.38) (1.17)
loan loss provision
*On the basis of Accruals against Loans.
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Programs for Current Year:
In the current fiscal year, bank has targeted to increase its loan and investment respectively to Rs. 27.71
billion and Rs. 4.57 billion. Likewise, the deposit amount is targeted to keep at Rs. 33.37 billion. In the current
fiscal year, bank has set target of earning Rs. 1.46 billion operating income, Rs. 847.8 million operating
profit and Rs. 508.3 million net profits. Meanwhile, the operating expense is expected to be 615.5 million.
In the current fiscal year, bank has opened 6 new branches outside the valley and planning to operate 2
new branches inside the valley. In the current fiscal year, bank has target of constructing its own building
in Naxal.
To make the bank more efficient, the bank has planned to increase the potential of its assets, bring
changes to deposit structure, increase staffs’ productivity and also introduce quality services for the benefit
of people. The bank has also planned to fulfill the financial requirements of customers by developing
newer and modern services, to bring in financially deprived population into the circle of banking, disburse
loans to small industries and thus controlling the risk factor and above all, contribute to the economic
development of the nation. The bank plans to extend its banking activities to the semi-urban and rural
areas via Kumari Mobile Banking services and Kumari Branch Less Banking Services. The bank looks forward
to newer technological advances and to study the prospects of merging or being merged to a bank or
financial institution via Nepal Rastra Bank’s approval and with shareholders’ suggestion, discussion and
proposition to tackle the challenges in the banking sector, and other such programs.
4. Bank’s industrial and business relations: The bank has been maintaining cordial relationships with all
concerned industrial and professional bodies and is committed to continue doing so in the future as
well, in the process, making use of the same in the bank’s favor.
5. Changes in Board of Directors and the reasons: In the review period, the representatives of board
members Mr. Noor Pratap J.B. Rana, Mr. Uttam Prasad Bhattarai and Mr. Naresh Dugar were re-
elected and Mr. Santosh Kumar Lama was elected from 13th Annual General Meeting. Similarly,
Mr. Puna Ram Bhandari was elected from public group of directors. We welcome all the elected
directors in new working period. In addition, we thank Mr. Amir Pratap J.B. Rana and Mr. Rishi Agrawal
representing promoter group for rendering service to bank during their working period.
6. Major issues affecting business: Decreasing spread in interest rate of Loan and deposit, fluctuation in
market’s liquidity, decreasing interest rates in Government bonds (Treasury bills), continuous recession
in real estate business, energy crisis, increasing competition in financial sector etc are main factors
effecting business. Such decreasing spread in interest rate of loan and deposit, decreasing interest
rate in government bonds and increasing operating expenses etc. are expected to have adverse
effect on overall profit of the bank.
7. Board of Directors’ responses to the auditor’s report: Except for normal comments concerning the
bank’s regular business, no especially negative comments have been observed in the audit report.
Instructions have also been given to the management to implement the suggestions and advice of
the audit report. Because the financial details of FY 2070/71 were accepted by Nepal Rastra bank on
2071/06/14, the received comments and instructions have been included in the annual report. Bank
has already given direction to its management team for implementation of received comments and
instructions.
8. Dividend Declaration: Kumari Bank announces 33% bonus share from its Paid-Up Capital i.e. NPR
603.3 million and 1.74% cash dividend on Tax on Bonus Share as proposed by the Board of Directors
i.e. NPR 31.7 million which makes total amount of NPR 635.1 million as total dividend.
9. Forfeited shares: in the reported year, no shares have been forfeited.
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10. Progress of the bank and its subsidiary companies: The progress of the bank has been presented
under various headings in this report. The bank does not have any subsidiary companies.
11. Major businesses conducted by the bank and its subsidiary companies in FY 2070/71 and any
important changes in business activities: The bank does not have any subsidiary companies and
there are no major changes other than mentioned in this Annual Report.
12. Important information provided by valued shareholder: None.
13. Details of share holding by the company’s directors and office bearers in the previous FY and
information provided by them about their involvement in the trading of company shares, if any:
No information as such.
14. Information about any agreements concerning the bank that service the self interest of any director
or people close to them: None.
15. Details about re-purchase of shares: None.
16. Details about Internal Control System: There is a separate department to maintain the bank’s internal
control systems. This department is always active to minimize risks associated with the Bank’s loans,
operations and market risks. Monitoring of the effectiveness of the internal control systems is done on
a regular basis by the Audit Department while conducting its regular audit.
17. Details of the Bank’s total operating costs: The Bank’s operating costs in FY 2070/71 were as follows:
Staff expenses: NPR 221,701,158
Other operating costs: NPR 240,120,657
Detailed description of the bank’s total operating costs has been stated in Annexure 4.23 and 4.24 of
the Annual Report.
18. Information about audit committee: According to the Company Act, Section 164, the audit committee
is comprised of Directors Naresh Dugar and bank’s internal audit head, Niraj Rai, as member under
the convenorship of Non-Executive Director Prof. Dr. Rajan Bahadur Poudel. This committee has had
10 sittings in FY 2070/71. Member of this committee have been provided with meeting allowance at
par with other Board Members. This committee’s activities are conducted in accordance with Nepal
Rastra Bank‘s directives and Company Act regulations. No serious remarks on the bank’s operations
have been observed in the internal audit report. The audit committee has been conducting
regular monitoring of the internal control systems and regularly providing suggestions concerning
implementation to the management besides providing information on the same of the board of
directors. The bank’s internal audit department reports directly to the audit committee.
19. Information about any cash balance to be paid to the Bank by Director, Managing Director, Chief
Executive Officer, Bank’s Promoters or their close relatives or firm associated with them, company or
organization: None.
20. Details about salaries, allowances and facilities provided to directors, managing director, CEO and
other executives:
a. Directors: The bank’s directors are paid meeting allowances for taking part in meetings of
committees and sub-committees as set up according to applicable rules at the rate of Rs. 10,000
to the chairperson and Rs. 8,000 to the members. Also, Rs. 2,000 per month is being provided for
media and daily newspapers. The bank has not provided the directors with any other facilities than
the above. In FY 2070/71, Rs. 1,936,000 (in words, Rs. 1.936 million) has been paid as meeting and
media allowances to the directors.
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b. Annual Salary, Allowances and services for CEO and other executives/ managers for the F/Y
2070/71:
Amount in NPR.
S.No. Salary and services CEO Managers
1 Salary 5,492,475.80 27,995,402.04
2 Allowances 98,927.42 8,388,436.39
3 Provident Fund 549,247.58 2,790,108.99
4 Vehicle maintenance 4,838.71 736,341.52
5 Medical Treatment (annual + accumulated ) 113,972.60 2,021,376.70
6 Dashain Allowance 495,000.00 2,998,077.00
7 Leave (annual + accumulated) 1,067,783.76 4,712,428.10
8 Insurance 158,376.00 2,132,778.88
9 Gratuity 15,205.70 5,460,684.86
10 Others 80,645.16 120,733.45
Total 8,076,472.73 57,356,367.93
Note: Under the medical and leave expense of CEO, the remaining expenses of medical and leave of Acting CEO is also included.
Other than above mentioned salary and allowances, other managers are also provided with following
services:
1. Vehicle along with driver to the CEO; vehicle loan, driver, fuel, and repair and maintenance
to DCEO ;and according to the bank’s policy on transportation, vehicle loan, fuel and repair
allowance to other management office bearers.
2. Home and real estate loans/ personal loans to all permanent office bearers as per the bank’s staff
service regulations.
3. Journals, telephone and mobile facilities as per the bank’s human resource policy.
21. Dividend yet to be taken by shareholders: Out of 12% cash dividend distributed in FY 2066/67 and 7%
cash dividend distributed in FY 2068/69; the shareholders are yet to collect the remaining amount of
Rs. 9,985,798 (in words: Rs. 9.98 million) from the distributed cash dividend till Ashadh end 2071.
22. Details of asset sales and purchases as per Section 141 of the Company Act, 2063: None.
23. Details of business with associated companies as per Section 175 of the Company Act, 2063: None.
24. Any other information necessary to be revealed in the Directors Report as per the Company Act, 2063,
and applicable laws: None.
25. Other information: None.
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Vote of Thanks:
We would like to extend our heartfelt gratitude to respected shareholders, customers, executives from
Nepal Rastra Bank, Office of Company Registrar, Nepal Securities Board, Nepal Stock Exchange Ltd.,
general public and all other concerned who have continuously provided their support, encouragement
and guidance. We would also like to thank our statutory auditors Mr. GP Rajbahak and Company for
conducting the audit on time and providing the bank with realistic professional advice. In addition, we
wish to thank the bank’s management and staff members for considering the bank’s progress to be their
own by providing dedicated services. Finally, by incorporating as its main principle the fact that bank and
its customers are two sides of the same coin, and that it is due to our customers’ affection and trust that
the bank has succeeded in reaching its present position. We offer our heartfelt gratitude to them with the
promise to be still more committed to increase our strong relationship with our customers in the future.
Thank You,
On behalf of the Board of Directors
Noor Pratap J.B. Rana Prof. Dr. Rajan Bahadur Paudel

(Chairman) (Director)
Date: 26th Ashwin 2071
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Management Team
From left Standing From Left Seated
Mr. Bikash Khanal- Head Corporate Credit Mr. Suresh K. Karna- Chief Marketing Officer
Mr. Binod N. Shrestha- Head Central Logistics Mr. Narendra P. Chhatkuli- Head Legal and Compliance
Mr. Tika Ram Chapagain- Chief Regional Officer (Eastern) Mr. Rajib Giri- Acting CEO
Mr. Rajesh Shrestha- Branch Manager, Newroad Mr. Ajit P. Bhattarai- Head Operations
Mr. Geha N. Dhungana- Chief Operations Officer
Bishwa Mani Regmi, Head- Retail Ishor Gurung, Head - SME

Pankaj SJB Rana, Head- Card Niraj Rai, Head - Internal Audit
Yemi Karki, Head- Credit Risk Management Dinesh Nidhi Tiwari, Head - Recovery
Rena Rijal, Head- Institutional Banking & Remittance Vishal Rauniyar, Head - Credit Administration & Compliance
Sipa Regmi, Head- Marketing & Corporate Communication Namita Shakya, Head - Branch Operations
Nirmal K. Khatiwada, Head- Finance & Treasury Milan K. Maskey, Head - Foreign Trade

Supporting Indrajatra Festival “Parijat Mushroom Farming at Sangla-9, Kathmandu”,
funded by Kumari Bank Ltd.
Kumari Bank Ltd., Okhaldhunga branch provided financial Financial support to landslide victims in Banke
support to Mr. Tej Bahadur Karki “World Wheel Chair Traveler”
Kumari Bank Ltd.,Baglung provided educational materials Kumari Bank Ltd. set up drinking water facility to the
to Dhaulagiri Deaf School, Baglung devotees visiting Budhanilkantha Temple on the occasion
of Haribodhani Ekadashi
KUMARI BANK LIMITED
Balance Sheet
As at Ashad end 2071 (16 July 2014)
Capital and Liabilities Schedule Current Year (Rs.) Previous Year (Rs.)
1. Share Capital 4.1 2,431,681,560 1,828,332,000
2. Reserves and Funds 4.2 534,924,396 828,374,231
3. Debentures & Bonds 4.3 - -
4. Borrowing Outstanding 4.4 201,951,900 -
5. Deposit Liabilities 4.5 27,578,376,145 25,318,568,802
6. Bills Payable 4.6 22,428,891 21,348,138
7. Proposed Dividend Payable 31,755,240 11,817,474
8. Income Tax Liabilities -
9. Other Liabilities 4.7 219,483,913 214,129,111
Total Capital and Liabilities 31,020,602,045 28,222,569,756
Assets Schedule Current Year (Rs.) Previous Year (Rs.)

1. Cash Balance 4.8 777,836,820 638,769,784
2. Balance with Nepal Rastra Bank 4.9 3,829,349,524 2,537,960,922
3. Balance with Banks/Financial Institution 4.10 288,499,107 230,152,674
4. Money at Call and Short Notice 4.11 507,478,409 753,410,000
5. Investment 4.12 3,164,625,890 4,135,142,087
6. Loans, Advances and Bills Purchase 4.13 21,898,115,132 19,369,317,883
7. Fixed Assets 4.14 235,775,955 255,864,841
8. Non Banking Assets 4.15 - -
9. Other Assets 4.16 318,921,208 301,951,565
Total Assets 31,020,602,045 28,222,569,756
Contingent Liabilities Schedule 4.17

Directors' Declaration Schedule 4.29
Statement of Capital Fund Schedule 4.30 (A)
Statement of Risk Weighted Assets Schedule 4.30 (B)
Principal Indicators Schedule 4.31
Significant Accounting Policies Schedule 4.32
Notes to Accounts Schedule 4.33
Schedules 4.1 to 4.17 form an integral part of the Balance Sheet.
Uday K Upadhyaya Noor Pratap JB Rana Santosh Kumar Lama

Chief Executive Officer Chairman Director
As per our report of even date

Geha Nath Dhungana
Chief Operation Officer
Prof. Dr. Rajan B. Paudel Dr. Shobha Kant Dhakal Uttam P. Bhattarai
Director Director Director
Nirmal Kumar Khatiwada
Head-Finance and Treasury
CA. Rajnish Dahal

Partner
Date: 16 September 2014 Naresh Dugad Puna Ram Bhandari Rashindra Bahadur Malla Dev Associates
Place: Durbar Marg Director Director Director Chartered Accountants
29

KUMARI BANK LIMITED
Profit and Loss Account
From 1st Shrawan 2070 to 32 Asadh 2071
(From 16 July 2013 to 16 July 2014)
Particulars Schedule Current Year (Rs.) Previous Year (Rs.)

1. Interest Income 4.18 2,410,784,399 2,464,306,976
2. Interest Expenses 4.19 1,575,311,889 1,486,281,639
Net Interest Income 835,472,510 978,025,337
3. Commission and Discount 4.20 188,725,481 138,199,665
4. Other Operating Income 4.21 56,944,610 41,861,784
5. Exchange Fluctuation Income 4.22 85,155,477 56,993,498
Total Operating Income 1,166,298,078 1,215,080,284
6. Staff Expenses 4.23 221,701,158 203,805,242
7. Other Operating Expenses 4.24 240,120,657 230,469,644
8. Exchange Fluctuation Loss 4.22 -
Operating Profit before Provision for Possible Losses 704,476,263 780,805,397
9. Provision for Possible Losses 4.25 236,311,721 314,618,980
Operating Profit 468,164,542 466,186,417
10. Non Operating Income /(Expense) 4.26 2,540,345 (11,134,197)
11. Loan Loss Provision Written Back 4.27 76,151,082 5,258,602
Profit from Regular Activities 546,855,969 460,310,821
12. Profit/Loss from Extra-ordinary Activities 4.28 - -
Net profit after Considering All Activities 546,855,969 460,310,821
13. Provision for Staff Bonus 49,714,179 41,846,438
14. Provision for Income Tax 155,486,824 127,016,018
* Current Year's 148,173,334 126,075,028
* Upto Previous year 5,298,717 -
* Deferred Tax 2,014,772 940,989
Net Profit/Loss 341,654,966 291,448,365
Schedule 4.18 to 4.28 a form an integral part of Profit and Loss Account


Geha Nath Dhungana
CA. Rajnish Dahal

Partner
30
KUMARI BANK LIMITED
Profit and Loss Appropriation Account
Particulars Schedule Current Year (Rs.) Previous Year (Rs.)

Income
1. Accumulated Profit up to Last Year 4,700,386 14,196,807
2. This Year's Profit 341,654,966 291,448,365
3. Exchange Fluctuation Fund -
4. Bond Redemption Reserve 400,000,000
5. Share Premium 4,438,289
6. General Reserve to Capital Adjustment Fund 400,000,000
Total 746,355,352 710,083,461
Expenses
1. Accumulated Loss up to Last Year -
2. Current Year's Loss -
3. General Reserve Fund 68,330,993 458,289,673
4. Contingent Reserve -
5. Institution Development Fund -
6. Dividend Equalization Fund -
7. Staff Related Reserves -
8. Proposed Cash Dividend 31,755,240 11,817,474
9. Proposed bonus share from Capital Adjustment Fund & 603,349,560 224,532,000
Current Year's Profit
10. Special Reserve Fund -
11. Exchange Fluctuation Fund 5,879,623 2,714,918
12. Bond Redemption Reserve Fund -
13. Previous Year's Tax Adjustment -
14. Deferred Tax Fund (230,329) (940,989)
15. Investment Adjustment Reserve 11,000,000 8,970,000
Total 720,085,087 705,383,075
16. Accumulated Profit/(Loss) 26,270,265 4,700,386


Geha Nath Dhungana
CA. Rajnish Dahal

Partner
31

32
KUMARI BANK LIMITED
Statement of Changes in Equity
Capital Exchange Other

Accumulated General Share Deferred Total Amount
Particulars Share Capital Adjustment Fluctuation Reserve &
Profit/Loss Reserve Fund Premium Tax Fund (Rs.)
Fund Fund Fund
Opening Balance 1,828,332,000 4,700,386 799,082,488 - - 14,511,420 1,079,936 9,000,000 2,656,706,231
Adjustments 603,349,560 21,569,879 (331,669,007) - - 5,879,623 (230,329) 11,000,000 309,899,726
Net Profit for the Period 341,654,966 341,654,966
Transfer to General Reserve (68,330,993) 68,330,993 -
Capital Adjustment Fund (400,000,000) 400,000,000 -
Declaration of Dividend (31,755,240) (31,755,240)
Exchange Fluctuation Fund (5,879,623) 5,879,623 -
Right Share Issued -
Transfer to Retained Earnings -
Proposed Bonus Share 603,349,560 (203,349,560) (400,000,000) -
Debenture Redemption Reserve -
Previous Year tax Adjustment -
Deferred Tax Fund 230,329 (230,329) -
Investment Adjustment Reserve (11,000,000) 11,000,000 -
Share Premium -
Closing Balance 2,431,681,560 26,270,265 467,413,482 - - 20,391,043 849,607 20,000,000 2,966,605,956


Geha Nath Dhungana
CA. Rajnish Dahal

Partner
KUMARI BANK LIMITED
Cash Flow Statement
Particulars Current Year (Rs.) Previous Year (Rs.)

(A). Cash Flow from Operating Activities 1,266,582,023 79,266,237
1. Cash Received 2,758,129,300 2,643,075,766
1.1 Interest Income 2,416,108,749 2,408,500,581
1.2 Commission and Discount Income 255,013,852 176,527,316
1.3 Income from Foreign Exchange Transaction 85,155,477 56,993,498
1.4 Recovery of Loan Written off
1.5 Other Income 1,851,221 1,054,371
2. Cash Payment (2,131,224,225) (1,989,812,204)
2.1 Interest Expenses (1,584,428,529) (1,486,281,639)
2.2 Staff Expenses (221,701,158) (203,805,242)
2.3 Office Overhead Expenses (192,090,016) (176,725,322)
2.4 Income Tax Paid (133,004,522) (123,000,000)
2.5 Other Expenses
Cash Flow before Changes in Working Capital 639,676,948 (573,997,326)
Increase/(Decrease) of Current Assets (1,564,807,175) (3,735,405,440)
1.(Increase)/Decrease in Money at Call and Short Notice 245,931,591 (432,166,859)
2. (Increase)/Decrease in Short Term Investment 945,276,348 (1,208,180,926)
3. (Increase)/Decrease in Loans, Advances and Bills Purchase (2,688,714,114) (2,076,778,289)
4. (Increase)/Decrease in Other Assets (67,301,000) (18,279,366)
Increase/(Decrease) of Current Liabilities 2,204,484,123 3,161,408,114
1. Increase/(Decrease) in Deposits 2,259,807,343 3,333,370,526
2. Increase/(Decrease) in Certificates of Deposits
3. Increase/(Decrease) in Short Term Borrowings (5,403,000)
4. Increase/(Decrease) in Other Liabilities (55,323,220) (166,559,412)
(B) Cash Flow from Investment Activities 20,268,149 4,989,550
1. (Increase)/Decrease in Long-term Investment 25,239,849 13,595,513
2. (Increase)/Decrease in Fixed Assets (27,888,169) (32,339,033)
3. Interest income from Long Term Investment 22,280,932 23,473,830
4. Dividend Income 635,536 259,241
5. Others
(C) Cash Flow from Financing Activities 201,951,900 (400,000,000)
1. Increase/(Decrease) in Long term Borrowings (Bonds,Debentures etc) (400,000,000)
2. Increase/(Decrease) in Share Capital -
3. Increase/(Decrease) in Other Liabilities - -
4. Increase/(Decrease) in Refinance/Facilities received from NRB 201,951,900 -
(D) Income/Loss from Change in Exchange Rate in Cash & Bank Balances - -
(E) This Year's Cash Flow from All Activities 1,488,802,071 (315,744,213)
(F) Opening Balance of Cash and Bank Balances 3,406,883,380 3,722,627,593
(G) Closing Balance of Cash and Bank Balances 4,895,685,451 3,406,883,380
33

Schedule 4.1
KUMARI BANK LIMITED

Share Capital and Ownership
1. Share Capital
1.1 Authorized Capital 2,000,000,000 2,000,000,000
a) 20,000,000 Ordinary Shares of Rs. 100 each 2,000,000,000 2,000,000,000
b) ………...Non-redeemable Preference Shares of Rs……….. each - -
c) …………Redeemable Preference Shares of Rs……….. each - -
1.2 Issued Capital 1,828,332,000 1,603,800,000
a) 1,82,83,32,000 Ordinary Shares of Rs. 100 each 1,828,332,000 1,603,800,000
b) ………..Non-redeemable Preference Shares of Rs……….. each - -
c) …………Redeemable Preference Shares of Rs……….. each - -
1.3 Paid Up Capital 1,828,332,000 1,603,800,000
a) 1,82,83,32,000 Ordinary Shares of Rs.100 each 1,828,332,000 1,603,800,000
b) ……….Non-redeemable Preference Shares of Rs……….. each -
c) …………Redeemable Preference Shares of Rs……….. each -
1.4 Proposed Bonus Share 603,349,560 22,45,32,000
1.5 Calls in Advance - -
1.6 Total (1.3 + 1.4 + 1.5) 2,431,681,560 1,828,332,000
Share Ownership
Particulars Current Year Previous Year
A. Local Shareholders % Amount (Rs.) % Amount (Rs.)
1.1 Government of Nepal - -
1.2 "A" Class Licensed Institution - -
1.3 Other Licensed Institutions - -
1.4 Other Institutions (promoter and public both) 4.78 87,352,500 3.02 48,423,800
1.5 General Public (promoter and public both) 95.22 1,740,979,500 96.98 1,555,376,200
1.6 Others - -
B. Foreign Shareholders
Total 100 1,828,332,000 100 1,603,800,000
34
ANNEXURE 1(A)
LIST OF SHAREHOLDERS HOLDING SHARE CAPITAL OF 0.5% OR MORE As at

Ashad end 2071 (16 July 2014)
Current Year Last Year

S.N. Name of the Shareholder
% Share Capital in NPR. % Share Capital in NPR.
1 Noor Pratap J.B. Rana 6.50 118,841,400 6.50 104,247,000
2 Amir Pratap J.B Rana 5.06 92,513,500 5.06 81,152,200
3 Sabitri Gurung 3.07 56,286,700 4.00 64,152,000
4 Bimala Devi Agrawal 2.75 50,363,400 3.78 60,568,500
5 Rishi Agrawal 2.40 43,879,900 2.40 38,491,200
6 Rajendra Prasad Shrestha 1.62 29,551,600 2.10 33,615,000
7 Bidhya Krishna Shrestha 1.34 24,421,300 1.83 29,403,000
8 Govinda Das Shrestha 1.09 20,038,000 1.50 24,057,000
9 Laxman Shrestha 1.22 22,414,600 3.20 51,282,800
10 Manju Taparia 1.01 18,452,400 1.01 16,186,300
11 Mahabir Prasad Goel 1.28 23,354,100 1.32 21,170,100
12 Yagya Pratap Rana 1.32 24,005,800 1.31 21,057,800
13 Santosh Kumar Lama 0.91 16,728,600 1.23 19,674,300
14 CIT Citizen Unit Scheme 0.75 13,712,400 0.75 12,028,500
15 Bhim Krishna Udas 0.79 14,374,600 1.00 16,038,000
16 Phurba Bangdel Lama 1.31 23,983,200 1.00 16,038,000
17 Anil Das Shrestha 0.73 13,320,600 1.00 16,038,000
18 Januki Kumari J.B. Rana 1.00 18,283,200 1.00 16,038,000
19 Birendra Kumar Shah 0.86 15,819,200 0.62 10,000,000
20 Prabhu Investment Pvt. Ltd. 0.74 13,420,400 - -
21 Sanjaya Lama 0.74 13,629,900 0.99 15,930,000
22 Ashok Kumar Baheti 0.94 17,297,300 0.62 10,000,000
23 Anupam Rathi 0.90 16,454,900 0.90 14,434,200
24 Manoj Kumar Goel 0.88 16,089,200 - -
25 Shiva Shanker Agrawal 0.88 16,016,000 0.88 14,049,200
26 Kumud Kumar Dugad 0.85 15,591,600 0.85 13,676,900
27 Santoo Shrestha 0.61 11,161,100 1.00 16,038,000
28 Shree Niwas Sharada 0.75 13,690,900 0.78 12,509,600
29 Jamuna Maheshwori Rathi 0.55 10,072,500 0.55 8,835,500
30 Life Insurance Corporation Nepal Ltd. 0.75 13,679,900 0.75 12,000,000
31 Nirmal Pradhan 0.51 9,350,000 0.84 13,406,900
32 Pradeep Kumar Murarka 0.70 12,798,300 0.70 11,226,600
33 Pashupati Murarka 0.70 12,798,300 0.70 11,226,600
34 Naresh Dugad 0.70 12,798,300 0.70 11,226,600
35 Bikash Dugad 0.70 12,798,300 0.70 11,226,600
36 Atmaram Murarka 0.60 10,988,300 0.60 9,639,000
37 Jagdish Prasad Chaudhary 0.60 10,969,900 0.60 9,622,800
38 Sharmila Aryal 0.60 10,969,900 0.60 9,622,800
39 Dev Kishan Mundada 0.60 10,969,900 0.60 9,622,800
40 Pravalaxmi Rana 0.59 10,726,100 0.59 9,408,900
41 Vidushi Rana 0.58 10,604,300 0.58 9,302,000
42 Rita K.C 0.52 9,594,000 0.52 8,415,700
43 Uttam Prasad Bhattarai 0.50 9,141,600 0.50 8,019,000
44 Rakshya Pahadi 0.50 9,141,600 0.50 8,019,000
45 Surendra Bhandari - - 0.50 8,019,000
46 Ganga Amatya - - 0.50 8,019,000
47 Antoo Shrestha - - 0.68 10,889,500
48 Sandeep Lama - - 0.50 8,019,000
35

Schedule 4.2
KUMARI BANK LIMITED

Reserves and Funds
Particulars Current Year Rs. Previous Year Rs.
1. General/Statutory Reserve Fund 467,413,482 799,082,488
2. Capital Reserve Fund -
3. Capital Redemption Fund -
4. Capital Adjustment Fund - -
5. Other Reserve & Funds 20,849,607 10,079,936
a. Contingent Reserve
b. Institution Development Fund
c. Dividend Equalization Fund
d. Special Reserve Fund
e. Assets Revaluation Fund
f. Deferred Tax Reserve 849,607 1,079,936
g. Other Free Fund
h. Other Reserve Fund
i. Investment Adjustment Reserve 20,000,000 9,000,000
j. Bond Redemption Reserve
6. Accumulated Profit/Loss 26,270,265 4,700,386
7. Exchange Fluctuation Fund 20,391,043 14,511,420
8. Share Premium
Total 534,924,396 828,374,231
Schedule 4.3
KUMARI BANK LIMITED

Debenture and Bond
1. ……….% Bond/Debentures of Rs……..…each - -

Issued on …………… and to be matured on ……….
2. ………. - -
Total (1+2) - -
36
Schedule 4.4
KUMARI BANK LIMITED
Outstanding Loan (Borrowings)
A. Domestic
1. Government of Nepal - -
2. Nepal Rastra Bank 201,951,900 -
3. Repo Obligations - -
4. Inter Bank and Financial Institutions - -
5. Other Organized Institutions - -
6. Others - -
Total (A) 201,951,900 -
B. Foreign
1. Banks - -
2. Others - -
Total (B) - -
Total (A+B) 201,951,900 -
37

Schedule 4.5
KUMARI BANK LIMITED

Deposit Liabilities
1. Non-Interest Bearing Accounts
A. Current Deposit 1,237,175,209 1,032,116,414
1. Local Currency 1,202,240,826 1,002,052,097
1.1 Government of Nepal
1.2 "A" Class Licensed Institutions 20,131,262 36,937,000
1.3 Other Licensed Financial Institutions 255,795,690 235,408,000
1.4 Other Organized Institutions 727,511,094 658,679,303
1.5 Individuals 198,802,780 71,027,794
1.6 Others -
2. Foreign Currency 34,934,383 30,064,318
2.1 Government of Nepal
2.2 "A" Class Licensed Institutions 5,061,523
2.3 Other Licensed Financial Institutions 192,000
2.5 Individuals 5,301 5,000
2.6 Others
B. Margin Deposits 147,197,848 137,462,504
1. Employees Guarantee
2. Guarantee Margin 60,202,728 60,436,821
3. Margin on Letter of Credit 86,995,120 77,025,683
C. Others 6,436,778 5,607,153
1. Local Currency 6,436,778 5,607,153
1.1 Financial Institutions -
1.2 Other Organized Institutions -
1.3 Individuals 6,436,778 5,607,153
2. Foreign Currency - -
2.1 Financial Institutions -
2.2 Other Organized Institutions -
2.3 Individuals -
Total of Non-Interest Bearing Accounts (1) 1,390,809,835 1,175,186,072
38
KUMARI BANK LIMITED
Deposit Liabilities (Continued….)
2. Interest Bearing Accounts
A. Saving Deposits 7,234,105,180 6,822,654,865
1. Local Currency 7,117,127,540 6,750,023,394
1.1 Organized Institutions 36,192,699 47,497,524
1.2 Individuals 7,080,934,841 6,702,525,870
1.3 Others -
2.1 Organized Institutions 113,000
2.2 Individuals 116,977,640 72,518,471
2.3 Others -
B. Fixed Deposits 12,141,754,675 11,353,147,320
1. Local Currency 11,445,625,925 10,327,813,570
1.1 Organized Institutions 9,538,004,526 8,866,004,000
1.2 Individuals 1,907,621,400 1,461,809,570
1.3 Others -
2. Foreign Currency 696,128,750 1,025,333,750
2.1 Organized Institutions 693,720,000 1,022,932,750
2.2 Individuals 2,408,750 2,401,000
2.3 Others -
C. Call Deposits 6,811,706,455 5,967,580,545
1. Local Currency 6,585,251,433 5,879,323,329
1.1 "A" Class Licensed Institutions -
1.2 Other Licensed Financial Institutions 2,496,286,718 3,068,482,000
1.3 Other Organized Institutions 4,033,820,827 2,634,932,453
1.4 Individuals 55,143,888 175,908,876
1.5 Others -
2.1 "A" Class Licensed Institutions -
2.2 Other Licensed Financial Institutions -
2.4 Individuals -
2.5 Others -
D. Certificate of Deposit - -
1. Organized Institutions -
2. Individuals -
3. Others -
Total of Interest Bearing Accounts (2) 26,187,566,310 24,143,382,730
Total Deposits (1+2) 27,578,376,145 25,318,568,802
39

Schedule 4.6
KUMARI BANK LIMITED

Bills Payable
1. Local Currency 15,747,781 17,837,785
Total 22,428,891 21,348,138
Schedule 4.7
KUMARI BANK LIMITED

Other Liabilities
1. Pension/Gratuity Fund - -
2. Employees Provident Fund - -
3. Employees Welfare Fund 84,820 61,922
4. Provision for Staff Bonus 49,714,179 41,846,438
5. Interest Payable on Deposits 36,881,320 46,092,295
6. Interest Payable on Borrowings 94,335 -
7. Unearned Discount and Commission 12,871,826 3,528,063
8. Sundry Creditors 37,378,646 32,604,506
9. Branch Reconciliation Account - -
10. Deferred Tax Liability - -
11. Dividend Payable 9,985,798 15,110,813
12. Others 72,472,989 74,885,074
a. Audit Fees 826,030 384,200
b. Others 71,646,959 74,500,874
Total 219,483,913 214,129,111
40
Schedule 4.8
KUMARI BANK LIMITED
Cash Balance
1. Local Currency (Including Coins) 763,020,416 622,182,064
Total 777,836,820 638,769,784
Schedule 4.9
KUMARI BANK LIMITED

Balance with Nepal Rastra Bank
Foreign Currency in equivalent Rs.
Local Current Year Previous Year
Particulars Convertible
Currency INR Total Total (Rs.) (Rs.)
FCY
1. Nepal Rastra Bank 3,829,349,524 2,537,960,922
a. Current Account 3,812,114,260 17,235,264 17,235,264 3,829,349,524 2,537,960,922
b. Other Account - - -
Schedule 4.10
KUMARI BANK LIMITED

Balance with Banks/Financial Institution
Local Foreign Currency in Rupee equivalent Current Year Previous

Particulars
Currency INR. Convertible FCY Total (Rs.) Year (Rs.)
1. Local Licensed Institutions 106,322,283 - 3,937,864 3,937,864 110,260,147 63,729,593
a. Current Account 106,322,283 3,937,864 3,937,864 110,260,147 63,729,593
2. Foreign Banks - 85,099,046 93,139,915 178,238,961 178,238,961 166,423,081
a. Current Account 85,099,046 93,139,915 178,238,961 178,238,961 166,423,081
Total 106,322,283 85,099,046 97,077,779 182,176,825 288,499,107 230,152,674
Note: Total balance for which the confirmations are received from respective Banks is NPR. 175,720,528.35
41

Schedule 4.11
KUMARI BANK LIMITED

Money at Call and Short Notice

1. Local Currency 350,000,000
TOTAL 507,478,409 753,410,000
Schedule 4.12
KUMARI BANK LIMITED

Investment
Purpose Current Year Previous Year
Particulars
Trading Other (Rs.) (Rs.)
1. Treasury Bills of Nepal Government - 2,368,403,910 2,368,403,910 3,266,296,960
2. Saving Certificate of Nepal Government - - -
3. Other Bonds of Nepal Government - 289,282,812 289,282,812 325,522,661
4. Nepal Rastra Bank Bonds - - -
5. Foreign Bonds - - -
6. Local Licensed Institutions - - 49,081,550
7. Foreign Banks - 482,003,668 482,003,668 480,305,416
8. Shares of Organized Institutions - 24,935,500 24,935,500 13,935,500
9. Bonds and Debentures in Organized Institutions - - -
10. Other Investment - - -
Total Investment - 3,164,625,890 3,164,625,890 4,135,142,087
Provision - - - -
Net Investment - 3,164,625,890 3,164,625,890 4,135,142,087
42
Schedule 4.12 (A)
KUMARI BANK LIMITED

Investment in Shares, Debentures and Bonds
Par value Market Provision Current Previous
Particulars
(Rs.) Value (Rs.) (Rs.) Year (Rs.) Year (Rs.)
1. Investment in Shares 24,935,500 - - 24,935,500 13,935,500
1.1 Credit Information Centre Limited 1,235,500 - - 1,235,500 1,235,500
36,599 Ordinary Shares of Rs. 100 each, fully paid
Primary Shares 3530 Kitta of Rs. 100 each
Right Shares 8825 Kitta of Rs. 100 each
Bonus Shares 24,244 Kitta of Rs. 100 each
1.2 Nepal Clearing House Limited 2,500,000 - - 2,500,000 2,500,000
1.3 National Banking Training Institute 1,200,000 - - 1,200,000 1,200,000
1.4 National Micro Finance Bank Limited 20,000,000 - - 20,000,000 9,000,000
2. Investment in Debentures and Bonds - - - - -
Total Investment 24,935,500 - - 24,935,500 13,935,500

3. Provision for Loss
3.1 Up to previous year - - - - -
3.2 Change in current year - - - - -
Total Provision - - - - -
Net Investment 24,935,500 - - 24,935,500 13,935,500
43

Schedule 4.12.1
KUMARI BANK LIMITED
Investment Held for Trading
Last Current This Year Previous Year

Par
Particulars Market Market Gain / Gain / Loss Remarks
Value
Price (A) Price (B) Loss (B-A) (Rs.)
1. Treasury Bill of Nepal Government - - - - -
2. Saving Bond of Nepal Government - - - - -
3. Other Bond of Nepal Government - - - - -
4. NRB Bond - - - - -
5. Foreign Bond - - - - -
6. Shares of Domestic Licensed Institutions - - - - -
7. Debenture & Bonds of Domestic Licensed - - - - -
Institutions
8. Shares, Debentures & Bonds of Domestic - - - - -
Institutions
9. Placement in Foreign Banks - - - - -
10. Interbank Lending - - - - -
11. Other Investments - - - - -
Total Investment - - - - -
Schedule 4.12.2
KUMARI BANK LIMITED
Investment Held to Maturity
This
Previous
Current Year
Year
Particulars Par Value (A) Cumulative Year Gain Remarks
Gain / Loss
Loss (B) Loss (C) / Loss
(Rs.)
(A-B-C)
1. Treasury Bill of Nepal Government - - -
2,368,403,910 3,266,296,960
2. Saving Bond of Nepal Government - - - - -
3. Other Bond of Nepal Government 289,282,812 - - - 325,522,661
4. NRB Bond - - - - -
5. Foreign Bond - - - - -
6. Shares of Local Licensed Institutions - - - - -
7. Debenture & Bonds of Local Licensed - - - - -
Institutions
8. Shares, Debentures & Bonds of Local - - - - -
Organised Bodies
9. Placement in Foreign Banks 482,003,668 - - - 480,305,416
10. Other Investments - - - - 49,081,550
Total Investment 3,139,690,390 - - - 4,121,206,587
44
Schedule 4.12.3
KUMARI BANK LIMITED
Investment Available for Sale
Current Year
Closing Prevailing Previous Year
Par Value Adjustment
Particulars Market Price Market Price Gain / Loss
(A) Reserve
(A) (B) (Rs.)
(B - A)
1. Treasury Bill of Nepal Government - - - -
2. Saving Bond of Nepal Government - - - -
3. Other Bond of Nepal Government - - - -
4. NRB Bond - - - -
5. Foreign Bond - - - -
6. Shares of Domestic Licensed - - - -
Institutions
7. Debenture & Bonds of Domestic - - - -
Licensed Institutions
8. Shares, Debentures & Bonds of 24,935,500 - - 13,935,500
Domestic Corporate Bodies
9. Placement in Foreign Banks - - -
10. Other Investments - - - -
Total Investment 24,935,500 - - 13,935,500
45

46
KUMARI BANK LIMITED
Schedule 4.13
Classification of Loans, Advances and Bills Purchase & Provision
Loans & Advances Bills Purchased/Discounted

Domestic Previous
Current Year
Particulars Year
Priority Sector Total Domestic Foreign Total (Rs.)
Foreign (Rs.)
Other
Insured Uninsured
1. Performing Loan - 993,139,107 20,882,545,557 - 21,875,684,664 1,100,000 13,403,848 14,503,848 21,890,188,512 19,343,142,255
1.1 Pass 993,139,107 20,882,545,557 - 21,875,684,664 1,100,000 13,403,848 14,503,848 21,890,188,512 19,343,142,255
2. Non-Performing Loan - 664,706 917,649,797 - 918,314,503 - - - 918,314,503 776,646,646
2.1 Restructured 68,732,063 68,732,063 - - - 68,732,063 -
2.2 Sub-Standard 49,785,517 49,785,517 - - - 49,785,517 23,467,414
2.3 Doubtful 258,697,625 258,697,625 - - - 258,697,625 404,012,981
2.4 Loss 664,706 540,434,592 541,099,299 - - - 541,099,299 349,166,251
A. Total Loan - 993,803,814 21,800,195,353 - 22,793,999,167 1,100,000 13,403,848 14,503,848 22,808,503,015 20,119,788,901
3. Loan Loss Provision
3.1 Pass - 9,931,391 208,825,456 - 218,756,847 11,000 134,038 145,038 218,901,885 193,431,423
3.2 Restructured - - 8,591,508 - 8,591,508 - - - 8,591,508 -
3.3 Sub-Standard - - 12,446,379 - 12,446,379 - - - 12,446,379 5,866,853
3.4 Doubtful - - 129,348,812 - 129,348,812 - - - 129,348,812 202,006,491
3.5 Loss - 664,706 540,434,592 - 541,099,299 - - - 541,099,299 349,166,251
B. Total Provisioning - 10,596,098 899,646,747 - 910,242,845 11,000 134,038 145,038 910,387,883 750,471,018
4. Provisioning up to previous year

4.1 Pass - 7,736,485 185,329,177 193,065,663 58,190 307,570 365,760 193,431,423 177,013,765
4.2 Restructured - - - - - - - - 325,748
4.3 Sub-Standard - - 5,866,853 5,866,853 - - - 5,866,853 10,799,707
4.4 Doubtful - - 202,006,491 202,006,491 - - - 202,006,491 55,306,865
4.5 Loss - 664,706 348,501,545 349,166,251 - - - 349,166,251 243,541,957
C. Total provision till last year - 8,401,192 741,704,066 - 750,105,258 58,190 307,570 365,760 750,471,018 486,988,042
D. Written Back from last year provision - (72,657,678) - (72,657,678) (47,190) (173,531) (220,721) (72,657,678) (5,258,602)
E. Additional Provision in this year - 2,194,906 230,600,359 - 232,795,265 - - - 232,574,543 268,741,577
Change in this year - 2,194,906 157,942,681 - 160,137,587 (47,190) (173,531) (220,721) 159,916,865 263,482,976
Net Loan (A-B) 983,207,716 20,900,548,606 - 21,883,756,322 1,089,000 13,269,809 14,358,809 21,898,115,132 19,369,317,883
Schedule 4.13 (A)
KUMARI BANK LIMITED
Security for Loan Advances and Bills Purchased
A. Secured
1. Against Security of Movable/Immovable Assets 21,943,331,334 19,527,447,782
2. Against Guarantee of Local Licensed Institutions
3. Against Government Guarantee 146,702,311 146,702,428
4. Against Guarantee of Internationally Rated Bank
5. Against Security of Export Documents
6. Against Security of Fixed Deposit Receipts 101,432,866 100,148,677
a. Own FDR 101,432,866 100,148,677
b. FDR of Other Licensed Institutions
7. Against Security of Government Bonds
8. Against Counter Guarantee
9. Against Personal Guarantee
10. Against Other Securities 617,036,504 345,490,013
B. Unsecured - -
Total 22,808,503,015 20,119,788,901
47

48
Schedule 4.14
KUMARI BANK LIMITED
Fixed Assets
ASSETS Current Year Previous Year

Particulars
Building Vehicles Machinery Office Equipment Others (Rs.) (Rs.)
1. Cost Price
a. Previous Year's Balance 4,814,041 107,645,403 - 286,942,772 43,637,116 443,039,332 416,310,461
b. Addition This Year - 22,393,805 8,099,000 667,152 31,159,957 36,407,871
c. Revaluation/Write Back This Year - - -
d. This Year Sold - (15,878,150) (3,044,035) (18,922,185) (9,679,000)
e. This Year Writte Off - - - - - - -
Total Cost (a+b+c+d+e) 4,814,041 114,161,058 - 291,997,737 44,304,268 455,277,104 443,039,332
2. Depreciation
a. Up to previous year 1,393,237 47,399,115 - 210,584,585 32,395,665 291,772,602 255,720,842
b. For this year 171,040 13,642,110 19,581,265 5,074,428 38,468,843 40,951,213
c. Depreciation on Revaluation/Write off (9,326,156) (2,697,602) (12,023,757) (4,899,452)
d. Depreciation Adjusment/Add back - -
Total Depreciation (a+b+c+d) 1,564,277 51,715,069 - 227,468,248 37,470,093 318,217,688 291,772,602
3. Book Value (WDV*) (1-2) 3,249,764 62,445,989 - 64,529,489 6,834,175 137,059,417 151,266,730
4. Land - - - - - 85,593,635 85,593,635
5. Capital Work In Progress (Pending Capitalization) - - - - - 261,369 261,369
6. Leasehold Assets - - - - - 12,861,534 18,743,107
Total (3+4+5+6) 235,775,955 255,864,841

Leasehold Details Current Year (Rs.)
Opening Value - Gross 94,759,407
Add - addition during the year 3,680,227
Less - write off/sales during the year (322,050)
Total Cost 98,117,584
Accumulated depreciation up to last year 76,016,301
Depreciation for current year 9,561,798
Total depreciation on asset write off/sale (322,050)
Total depreciation 85,256,049
Balance at the end of the year 12,861,534
Schedule 4.15
KUMARI BANK LIMITED
Non Banking Assets
Acquired Provision for loss

Total Amount
Date Net
of Non Previous Year
Name & Address of Borrower or Party of Non Amount Non Banking
Banking Percent Gross (Rs.)
Banking (Rs.) Assets (Rs.)
Assets
Assets
Sarita Vaidya (Rajbhandari), Kathmandu 4-Dec-12 5,216,247 100 5,216,247 - 5,216,247
Chija Adhikari, Chitwan 4-Dec-12 1,878,564.56
Shilu Housing & Developers Pvt. Ltd., Lalitpur 5-Jul-13 52,795,000 100 52,795,000 - 52,795,000.00
Opportunity Manpower Service, Gongabu 27-Jan-14 2,892,225 100 2,892,225 -
Total 60,903,472 60,903,472 - 59,889,811.17
Schedule 4.16
KUMARI BANK LIMITED
Other Assets
Current Year Previous Year
Particulars
(Rs.) (Rs.)
1. Stock of Stationery 3,142,044 4,131,643
2. Income Receivable on Investment 5,118,022 23,661,055
3. Accrued Interest Receivable on Loan 15,281,297 24,343,546
Accrued Interest Receivable on Loan 295,316,052 273,793,276
Less:Interest Suspense Account (280,034,755) (249,449,730)
4. Commission Receivable - -
5. Sundry Debtors 8,269,618 18,993,445
6. Staff Loan & Advances 183,878,752 161,194,393
7. Pre Payments 16,259,490 10,772,109
8. Cash in Transit - -
9. Other Transit items (including Cheques) - -
10. Drafts payment without notice - -
11. Expenses not written off - -
12. Branch Reconciliation Account 500
13. Deferred Tax Assets 849,607 1,079,936
14. Others 86,121,878 57,775,437
a. Advance Tax (net) 12,013,147 30,963,203
b. Others 74,108,731 26,812,235
Total 318,921,208 301,951,565
49

Schedule 4.16 (A)
KUMARI BANK LIMITED

Other Assets (Additional Statement)
Current Year (Rs.) Previous Year

Particulars
Up to 1 Year 1 to 3 Year Above 3 Years Total (Rs.)
1. Accrued Interest Receivable on Loan 108,752,450 144,075,549 42,488,053 295,316,052 273,793,276
2. Drafts Payment without notice - - - - -

3. Branch Reconciliation Account 500 - - - -
4. Domestic/Foreign Agency Account - - - - -
Schedule 4.17
KUMARI BANK LIMITED
Contingent Liabilities
As at Ashad end 2071( 16 July 2014)
1. Claims Lodged but not accepted by the Institution - -
2. Letter of Credit (Full Amount) 1,563,482,460 1,016,167,572
a. Maturity period up to 6 months 981,827,687 802,846,661
b. Maturity period more than 6 months 581,654,773 213,320,910
3. Rediscounted Bills - -
4. Unmatured Guarantees/Bonds 882,691,809 894,133,682
a. Bid Bonds 34,605,053 31,297,948
b. Performance Bonds 848,086,756 862,835,733
c. Other Guarantee/Bonds
5. Unpaid Shares Investment - 11,000,000
6. Outstanding of Forward Exchange Contract Liabilities 563,686,099 182,603,573
7. Bills under Collection
8. Acceptance & Endorsement 317,542,960 483,918,277
9. Underwriting Commitment
10. Irrevocable Loan Commitment 1,118,154,971 917,104,596
11. Guarantees against Counter Guarantee of -
Internationally Rated Banks
12. Advance Payment Guarantee 358,401,412 162,091,686
13. Financial Guarantee for loan disbursement -
14. Contingent Liabilities on Income Tax
15. Others -
50
Schedule 4.18
KUMARI BANK LIMITED
Interest Income

A. On Loans, Advances and Overdraft 2,323,992,056 2,358,815,482
1. Loans & Advances 1,342,659,310 1,266,437,255
2. Overdraft 981,332,747 1,092,378,226
B. On Investment 81,000,936 89,586,192
1. Government Securities 81,000,936 88,661,099
a. Treasury Bills 58,720,004 66,112,362
b. Development Bonds 22,280,932 22,548,737
c. National Saving Certificates -
2. Foreign Debt Papers - -
a. ……… - -
b. ……… - -
3. Nepal Rastra Bank Bonds - -
4. Debenture & Bonds 925,093
5. Interest on Interbank Investment - -
a. Bank/ Financial Institutions - -
b. Other Institutions - -
C. On Agency Balances 438,704 1,291,001
1. Domestic Banks/ Financial Institutions - -
2. Foreign Banks 438,704 1,291,001
D. On Money at Call and Short Notice 5,352,704 14,614,302
1. Domestic Banks/Financial Institutions 1,046,270 10,475,371
2. Foreign Banks 4,306,434 4,138,931
E. On Others - -
1. Certificate of Deposits - -
2. Inter-Bank/ Financial Institution Loan - -
3. Others - -
Total 2,410,784,399 2,464,306,976
51

Schedule 4.19
KUMARI BANK LIMITED
Interest Expenses

A. On Deposit Liabilities 1,574,507,984 1,454,586,611
1. Fixed Deposits 943,819,484 791,147,585
1.1 Local Currency 914,271,994 760,736,380
1.2 Foreign Currency 29,547,491 30,411,205
2. Saving Deposits 291,086,737 348,281,688
2.1 Local Currency 288,963,778 347,041,922
3. Call Deposits 339,601,762 315,157,338
3.1 Local Currency 335,238,757 313,383,136
4. Certificate of Deposits -
B. On Borrowings 803,905 31,695,028
1. Debentures & Bonds 28,756,164
2. Loan from Nepal Rastra Bank 803,905
3. Inter Bank /Financial Institutions Borrowing 2,938,864
4. Other Organized Institution
5. Other Loans
C. On Others - -
1. - -
2. - -
Total 1,575,311,889 1,486,281,639
52
Schedule 4.20
KUMARI BANK LIMITED
Commission and Discount Income
A. Bills Purchase & Discount 1,158,472 1,302,335
1. Local 1,158,472 1,302,335
2. Foreign
B. Commission 47,647,185 44,271,223
1. Letters of Credit 14,706,216 16,990,751
2. Guarantees 15,164,234 13,179,544
3. Collection Fees 917,111 664,297
4. Remittance Fees 16,859,624 13,436,630
5. Credit Card
6. Share Underwriting/Issue
7. Government Transactions
8. E. Pra. Commission
9. Exchange Fee
C. Others 139,919,824 92,626,107
Total 188,725,481 138,199,665
Schedule 4.21
KUMARI BANK LIMITED
Other Operating Income
1. Safe Deposit Lockers Rental 1,769,948 1,666,094
2. Issue & Renewals of Credit Cards
3. Issue & Renewals of ATM Cards 31,728,102 28,590,665
4. Telex / T. T./ SWIFT 4,445,123 3,803,769
5. Service Charges
6. Renewal Fees
7. Others 19,001,437 7,801,256
Total 56,944,610 41,861,784
53

Schedule 4.22
KUMARI BANK LIMITED
Exchange Fluctuation Gain/Loss
a. From Revaluation 23,518,491 10,859,670
b. From Trading (except Exchange Fees) 61,636,986 46,133,828
Total Gain (Loss) 85,155,477 56,993,498
Schedule 4.23
KUMARI BANK LIMITED
Expenses Relating to Employees
1. Salary 98,895,813 89,255,129
2. Allowances 63,131,407 58,212,817
a. Normal Allowance 29,950,802 30,050,200
b. Inchargeship Allowance 88,057 96,599
c. Relocation Allowance 364,767 164,705
d. Outstation Allowance 3,939,517 3,647,517
e. Dashain Allowance 10,829,686 9,518,653
f. Vehicle Maintenance Allowance 741,180 664,102
g. Leave Fare Allowance 17,165,505 14,071,041
h. International Deputation Allowance 51,893
3. Contribution to Provident Fund 9,748,444 8,713,612
4. Training Expenses 2,922,712 1,176,211
5. Uniform 2,479,296 467,204
6. Medical 7,650,418 6,700,304
7. Insurance 7,477,821 7,696,701
8. Gratuity Expenses 13,317,642 14,117,726
9. Others 16,077,604 17,465,538
a. Wages 5,978,149 6,442,337
b. Teller Risk Fund 889,454 845,676
c. Other Staff Benefits 3,003,575 3,590,833
d. Overtime 6,206,426 6,586,691
Total 221,701,158 203,805,242
54
Schedule 4.24
KUMARI BANK LIMITED
Other Operating Expenses
1. House Rent 55,744,270 51,457,964
2. Electricity & Water 18,430,039 18,054,513
3. Repair & Maintenance 1,640,955 2,058,101
a. Building 426,455 616,277
b. Vehicles 1,214,500 1,441,825
c. Others -
4. Insurance 10,667,741 10,246,482
5. Postage, Telex, Telephone & Fax 18,625,371 15,435,737
6. Office Equipment, Furniture and Repair 4,074,115 5,073,846
7. Travelling Allowances & Expenses 1,574,625 1,993,336
8. Stationery & Printing 6,207,993 5,402,866
9. Periodicals & Books 498,919 452,453
10. Advertisements 5,402,097 4,547,803
11. Legal Expenses 920,788 918,308
12. Donations 6,000 23,000
13. Expenses relating to Board of Directors 2,291,800 2,845,533
a. Meeting Fees 2,104,300 2,698,000
b. Other Expenses 187,500 147,533
14. Annual General Meeting Expenses 688,181 683,868
15. Expenses relating to Audit 892,904 841,668
a. Audit Fees 403,410 384,200
b. Other Expenses 489,494 457,468
16. Commission on Fund Transfer - -
17. Depreciation on Fixed Assets 48,030,641 53,744,322
18. Amortization of Pre-operating Expenses - -
19. Share Issue expenses - -
20. Technical Services Reimbursment - -
21. Entertainment Expenses - -
22. Written Off Expenses - -
23. Security Expenses 23,760,319 19,882,978
24. Credit Guarantee Premium
25. Commission & Discount
26. Others 40,663,900 36,806,864
a. Transport 8,858,881 8,578,462
b. Professional Fees 1,570,610 573,470
c. Public Relation Expenses 923,827 1,002,028
d. Correspondent Banking Charges 435,998 1,889,719
e. Fees and Taxes 25,892,677 21,343,288
f. Miscellaneous 591,080 1,141,963
g. Janitorial 2,390,827 2,277,933
Total 240,120,657 230,469,644
55

Schedule 4.25
KUMARI BANK LIMITED
Provision for Possible Losses
1. Increase in Loss Provision on Loans 234,189,383 268,741,577
2. Increase in Provision for Loss on Investment -
3. Provision for loss on Non-Banking Assets 2,122,338 45,877,403
4. Provision for Other Assets -
Total 236,311,721 314,618,980
Schedule 4.26
KUMARI BANK LIMITED
Non-Operating Income / Loss

Particulars
(Rs.) (Rs.)
1. Profit/ (Loss) on Sale of Investments -
2. Profit/ (Loss) on Sale of Assets (10,380) 8,206
3. Dividend 635,536 259,241
4. Subsidies received from Nepal Rastra Bank - -
a. Compensation for losses of specified branches - -
b. Interest Compensation - -
c. Exchange Counter - -
5. Others 1,915,189 (11,401,644)
Net Non-Operating Income (Loss) 2,540,345 (11,134,197)
Schedule 4.27
KUMARI BANK LIMITED
Write Back from Provision for Possible Losses
(Fiscal Year 2012/13)
1. Provision for Loan Loss Written Back 74,272,518 5,258,602
2. Provision against Non Banking Assets Written Back 1,878,565 -
3. Provision for Investment Written Back -
4. Provision for other Assets Written Back -
Total 76,151,082 5,258,602
56
Schedule 4.28
KUMARI BANK LIMITED

Income/ (Expenses) from Extra Ordinary Transactions
1. Recovery of Written Off Loan - -
2. Voluntary Retirement Expenses - -
3. Irrecoverable Loan Write Off (4.28 (A)) - -
4. Other Expenses/Income - -
5. ……………………………………………… - -
Total - -
Schedule 4.28(A)
KUMARI BANK LIMTED
Statement of Loan Written-Off
Fiscal Year 2070/71 (2013/14)
Type of Basis of Loan Approving
Types of Written off Initiations Made
S.N. Security & Valuation of Authority & Remarks
Loan Amount for Recovery
Value Collateral Level
Total
57

Schedule 4.29
KUMARI BANK LIMITED
Statement of Loans and Advances Extended to Directors/Chief
Executive /Promoters/Employees and Shareholders
32 Ashad 2071 (16 July 2014)
The Statement of amount,included under total amount of Bills Purchased and Discounted, Loans, Advances and Overdraft,
provided to the Directors, Chief Executive, Promoters, Employees, Shareholders and the individual members of ' their undivided
family' or against the guarantee of such person or to the organisation or, companies in which such individual are 'managing agent'
are as follows:
Amount in Rs.
Outstanding up to Recovered in Additional Outstanding as of
Name of Promoter/Director/ Last Year Current Year Ashad End 2071
Lending in
Chief Executive
Principal Interest Principal Interest this year Principal Interest
A. Directors
1. ……………………………...
2. ……….……………………..
3. ………………………………
B. Chief Executive
1. ……………………………..
2. ……………………………..
C. Promoter
D. Employee
E. Shareholders
Total
58
Schedule 4.30 (A)
KUMARI BANK LIMITED
Table of Capital Fund
End of Ashad 2071 (16 July 2014)
1.1. RISK WEIGHTED EXPOSURES Current Year (Rs.) Previous Year (Rs.)
a. Risk Weighted Exposure for Credit Risk 24,136,981 20,934,511
b. Risk Weighted Exposure for Operational Risk 1,633,844 1,412,218
c. Risk Weighted Exposure for Market Risk 170,673 177,557
Adjustments under Pillar II 25,941,498 22,524,285
Add: 3% of the total RWE due to non compliance to Disclosure Requirement
Addition to RWE as per supervisiory review (3%) 778,245 675,729
Add RWE equivalent to reciprocal of capital charge of 2 % of gross income. 256,105 218,728
Add: ...% of Total Deposit due to Insufficient Liquid Assets
Total Risk Weighted Exposure (After Bank's adjustment of Pillar II) 26,975,848 23,418,742
1.2. CAPITAL Current Year (Rs.) Previous Year (Rs.)

Core Capital (Tier I) 2,926,215 2,633,195
a. Paid Up Equity Share Capital 1,828,332 1,603,800
b. Irredeemable Non- cumulative Preference Share
c. Share Premium - -
d. Proposed Bonus Equity Share 603,350 224,532
e. Statutory General Reserves 467,413 799,082
f. Retained Earnings/Loss till Previous Year 26,270 4,700
g. Un-audited current period profit/(loss)
h. Bond Redemption Reserve - -
i. Capital Adjustment Reserve -
j. Dividend Equalization Reserves
k. Capital Redemption Reserve
l. Other free Reserve (Deffered Tax Fund) 850 1,080
m. Less: Goodwill
n. Less: Miscellaneous Expenditure not written off
o. Less: Investment in equity in licensed Financial Institutions
p. Less: Investment in equity of institutions with financial interests
q. Less: Investment in equity of institutions in excess of limits
r. Less: Investments arising out of underwriting commitments
s. Less: Reciprocal crossholdings
t. Less: Other Deduction
Adjustments under Pillar II
Less: Shortfall in Provision
Less: Loans & Facilities Extended to Related Parties & Restricted Lending
59

Supplementary Capital (Tier II) 259,293 216,943
a Cumulative and/or Redeemable Preference Share
b Subordinated term debt - -
c. Hybrid Capital Instruments
d. General Loan Loss provision 218,902 193,431
e. Exchange Equalization Reserve 20,391 14,511
f. Investment Adjustment Reserve 20,000 9,000
g. Assets Revaluation Reserve
h. Other Reserve
Total Capital Fund (Tier I and Tier II) 3,185,508 2,850,138
1.3 CAPITAL ADEQUACY RATIOS Current Period Previous Period

Tier I Capital to Total Risk Weighted Exposure (After Bank's adjustment of 10.85 11.24
Pillar II)
Tier I and Tier II Capital to Total Risk Weighted Exposure (After Bank's 11.81 12.17
adjustment of Pillar II)
60
End of Ashad 2071 (16 July 2014) Schedule 4.30 (B)
Credit Risk Exposures
Rs in '000
On Balance Sheet Exposures (A) Gross Book Specific Eligible Net Value Risk Risk Weighted Net Value Risk
Value Provision CRM d=a-b-c Weight Exposures Weighted
(a) (b) (c) (e) (f)=(d)*(e) Exposures
Cash Balance 777,837 777,837 0% - 584,140 -
Balance With Nepal Rastra Bank 3,829,350 3,829,350 0% - 2,862,924 -
Gold 0%
Investment in Nepalese Government Securities 2,657,687 2,657,687 0% - 2,574,619 -
All Other Claims on Government of Nepal 146,702 - 146,702 0% - 146,702 -
Investment in Nepal Rastra Bank Securities - 0% - -
All Other Claims on Nepal Rastra Bank - 0% - -
Claims in Foreign Government & Central Bank (ECA rating 0-1) - 0% - -
Claims in Foreign Government & Central Bank (ECA rating 2) - 20% - -
Claims in Foreign Government & Central Bank (ECA rating 4-6) - 100% - -
Claims On BIS, IMF, ECB, EC and Claims On Multilateral - 0% - -
Development Banks(MDB's) Recognised By Standard Framework

Claims on Other MDB's - 100% - -
Claims on Public Sector Entity (ECA 0 - 1) - 20% - -
Claims on Public Sector Entity (ECA - 2) - 50% - -
Claims on Public Sector Entity (ECA 3-6) - 100% - -
Claims on Public Sector Entity (ECA - 7) - 150% - 16,985 25,478
Claims on Domestic Banks that meet Capital Adequacy 334,033 334,033 20% 66,807 335,320 67,064
requirements
Claims on Domestic Banks that do not meet Capital Adequacy 45,244 45,244 100% 45,244 8,449 8,449
Requirements
Claims on Foreign Bank (ECA Rating 0- 1) 562,242 562,242 20% 112,448 545,730 109,146
Claims on Foreign Bank (ECA Rating - 2) 326,689 326,689 50% 163,345 - -
Claims on Foreign Bank (ECA Rating 3-6) - 100% - 65,313 65,313
61
62
Claims on Foreign Bank (ECA Rating - 7) - 150% - - -
Claims on foreign bank incorporated in SAARC region operating 9,772 9,772 20% 1,954 (15,488) (3,098)
with a buffer of 1 %above their respective regulatory capital
requirement
Claims on Domestic Corporates 13,939,529 - 13,939,529 100% 13,939,529 10,165,410 10,165,410
Claims on Foreign Corporates (ECA 0 - 1) - 20% - - -
Claims on Foreign Corporates (ECA 2) - 50% - - -
Claims on Foreign Corporates (ECA 3-6) - 100% - - -
Claims on Foreign Corporates (ECA - 7) - 150% - - -
Regulatory Retail Portfolio (Not Overdue) 3,299,209 27,609 3,271,600 75% 2,453,700 2,446,311 1,834,733
Claims fulfilling all creterion of regulatory retail except granularity - 100% - - -
Claims secured by residential properties 1,702,549 1,702,549 60% 1,021,530 1,438,147 862,888
Claims not fully secured by residential properties - 150% - - -
Claims secured by residential properties (Overdue) 49,805 12,107 37,698 100% 37,698 33,706 33,706
Claims secured by Commercial real estate 1,122,258 1,122,258 100% 1,122,258 2,083,249 2,083,249
Past due claims (except for claims secured by residential properties) 1,276,302 681,504 594,798 150% 892,197 539,974 809,962
High Risk claims 1,272,149 1,272,149 150% 1,908,223 707,478 1,061,217
Investment in equity and other capital instruments of institutions - 100% - - -
listed in the stock exchange
Investment in equity and other capital instruments of institutions 24,936 24,936 150% 37,403 6,436 9,653
not listed in the stock exchange
Staff Loan secured by residential property 110,606 110,606 60% 66,364 85,177 51,106
Interest Receivable/ Claim on government securities 4,788 4,788 0% - 36,624 -
Cash in Transit and other cash items in the process of collection - 20% - - -

Other Assets (as per attachment) 1,691,274 1,255,333 435,941 100% 435,941 410,823 410,823
Total 33,182,961 1,948,944 27,609 31,206,408 22,304,640 25,078,030 17,595,099
Off Balance Sheet Exposures (B) Gross Book Specific Eligible Risk Risk Weighted Risk
Net Value
Value Provision CRM Weight Exposures Net Value Weighted
d=a-b-c
(a) (b) (c) (e) (f)=(d)*(e) Exposures
Revocable Commitments 0% - -
Bills Collection 0% - -
Forward Exchange Contract Liabilities 563,686 563,686 10% 56,369 310,022 31,002
LC Commitments With Original Maturity Up to 6 months 981,828 40,023 941,805 20% 188,361 908,505 181,701
Domestic counterparty
Foreign counterparty ECA Rating 0-1 - 20% - - -
Foreign counterparty ECA Rating 2 - 50% - - -
L C Commitments With Original Maturity over 6 months 581,655 9,148 572,507 50% 286,253 64,384 32,192
Domestic counterparty
Bid Bond, Performance Bond and Counter Guarantee 882,692 41,669 841,023 50% 420,512 618,752 309,376
Domestic Counterparty

Underwriting commitments - 50% - - -
Lending of Bank's Securities or Posting of Securities as collateral - 100% - - -
Repurchase Agreements, Assets sale with recourse - 100% - - -
Advance Payment Guarantee 358,401 6,225 352,176 100% 352,176 125,364 125,364
Financial Guarantee - 100% - - -
Acceptence and Endrosements 317,543 12,505 305,038 100% 305,038 478,390 478,390
63
64
Unpaid portion of Partly paid shares and securities - 100% - 13,500 13,500
Irrevocable Credit Commitments (short term) 1,118,155 1,118,155 20% 223,631 1,165,380 233,076
Irrevocable Credit Commitments (long term) - 50% - - -
Other Contingent Liabilities - 100% - 2,494 2,494
Unpaid Guarantee Claims 200% - -
Total 4,803,960 - 109,569 4,694,391 1,832,340 3,686,791 1,407,095
Total RWE for Credit Risk before Adjustment (A + B) 37,986,921 1,948,944 137,178 35,900,799 - 24,136,981 28,764,821 19,002,194
Adjustment under Pillar II
Add:10% of the loan & facilities in excess of Single Obligor Limits
Add:1% of the contract (sale) value in case of the sale of credit with
recourse
Total RWE for Credit Risk 37,986,921 1,948,944 137,178 35,900,799 24,136,981 28,764,821 19,002,194

Schedule 4.30(C)
KUMARI BANK LIMITED

Eligible Amount of Credit Risk Mitigation (CRM)
End of Ashad 2071 (16 July 2014)
Rs. In '000
Deposits G'tee of Sec/G'tee G'tee of Sec/G'tee

Deposit Govt.&NRB G'tees
with other Gold Govt.of of other Domestic of Foreign
Credit exposures with bank Securities of MDBs Total
banks/FI Nepal Sovereigns Banks Banks
(a) (b) (c) (d) (e) (f) (g) (h) (i)
On Balance Sheet Credit exposures
Claims on Foreign government and Central Bank -
(ECA-2)
(ECA-3)
(ECA-4-6)
(ECA-7)
Claim 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 -
adequacy requirement
Claims on domestic banks that do not meet -
capital adequacy requirement
Claims to a Foreign bank (ECA Rating 0-1) -
Claims to a Foreign bank(ECA Rating 2) -
Claims to a Foreign bank(ECA Rating 3-6) -
Claims to a 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 -
65
66
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) 27,609.05 27,609
Claims fulfilling all creterion 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 -
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 (as per attachment) - - -
TOTAL 27,609.05 - - - - - - - - 27,609
Off Balance Sheet Exposures

Forward Exchange Contract Liabilities

LC Commitments With Original Maturity Up to 6 40,023 40,023
months domestic counterparty
Foreign counterparty (ECA Rating 0-1) -
Foreign counterparty (ECA Rating 2) -
L C Commitments With Original Maturity Over 6 9,148 9,148
months domestic counterparty
Bid Bond and Performance Bond(Domestic) 41,669 41,669
Underwriting commitments -
Lending of Bank's Securities or Posting of -
Securities as collateral
Repurchase Agreements,Assets salewith -
resourse
Advance Payment Guarantee 6,225 6,225
Financial Guarantee -
Acceptances and Endorsements 12,505 12,505
Unpaid portion of partly paid shares and securities -
Irrevocable Credit Commitments - short -
Irrevocable Credit Commitments -long -
Other Contingent Liabilities -
Unpaid Guarantee Claims -
TOTAL 109,569 - - - - - - - - 109,569

GRAND TOTAL 137,178 - - - - - - - - 137,178
67
Schedule 4.30 (D)
KUMARI BANK LIMITED
Risk Weight Exposure for Operational Risk
End of Ashad 2071 (16 July 2014) Rs in '000
Year 1 Year 2 Year 3 Previous
Particulars year
(2010/11) (2011/12) (2012/13)
Net Interest Income 685,240 819,088 978,025
Commission and Discount income 99,708 110,866 138,200
Other Operating Income 53,636 48,812 41,862
Exchange Fluctuation Income 36,719 44,206 56,993
Additional Interest Suspense during the period (11,038) 99,927 65,445
Total Gross Income (a) 864,264 1,122,899 1,280,525
Alfa (b) 15% 15% 15% 15%
Fixed Percentage of Gross Income {C= (axb)} 129,640 168,435 192,079
Capital Requirement for operational risk (d) = ( average of c) 163,384 141,222
Risk Weight (reciprocal of capital requirement of 10 %) in times (e) 10 10
Equivalent Risk Weight Exposure {f=(dxe)} 1,633,844 1,412,218
68
Schedule 4.30 (E)
KUMARI BANK LIMITED
Risk Weight Exposure for Market Risk
End of Ashad 2071 (16 July 2014) Rs in '000
Open Position Open Position Relevant

S.N. Currency Previous Year
(FCY) (NPR) Open Position
1 INR (49,790) (79,702) 79,702 172,458
2 USD (2,550) (245,678) 245,678 168,937
3 GBP (2) (299) 299 2,418
4 EUR (11) (1,456) 1,456 301
5 THB (3) (10) 10 -
6 CHF (2) (236) 236 1,621
7 AUD (60) (5,379) 5,379 276
8 CAD (4) (364) 364 163
9 SGD (1) (54) 54 3,120
10 JPY (2,891) (2,735) 2,735 102
11 HKD (0) (4) 4 1,642
12 DKK (16) (278) 278 41
13 SEK (4) (51) 51 1,598
14 SAR (88) (2,255) 2,255 902
15 QAR (40) (1,062) 1,062 238
16 AED (23) (605) 605 419
17 MYR (17) (511) 511 9
18 KRW - - - 865
19 CNY (29) (443) 443
20 KWD (1) (221) 221
21 BHD (0) (5) 5 4
Total Open Position (a) 341,347 355,114
Fixed Pecentage (b) 5% 5%
Capital Charge for Market Risk [c=(aXb)] 17,067 17,756
Risk Weight (reciprocal of capital requirement of 10%) in times (d) 10 10
Equivalent Risk Weight Exposure {e=(cXd)} 170,673 177,557
69

70
KUMARI BANK LIMITED
PRINCIPAL INDICATORS
Schedule 4.31
(For 7 years)
Particulars Indicators F. Y. F. Y. F. Y. F. Y. F. Y. F. Y. F. Y. F. Y.
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
1. Net Profit/Gross Income % 36.18% 30.87% 36.98% 37.39% 28.70% 26.95% 23.99% 29.29%
2. Earnings Per Share Rs. 22.70 16.35 22.04 24.24 15.67 17.18 18.17 18.69
3. Market Value per Share Rs. 830 1,005 700 468 266 242 260 536
4. Price Earning Ratio Ratio 36.56 61.47 31.76 19.31 16.98 14.09 14.31 28.68
5. Stock Dividend on share capital % 21.05% 10.53% 10.58% 12.00% 8.44% 0.00% 14.00% 33.00%
6. Cash Dividend on share Capital % 1.05% 0.53% 0.55% 12.00% 0.44% 7.00% 0.74% 1.74%
7. Interest Income/Loans & Advances % 7.63% 7.61% 8.34% 11.58% 13.75% 12.26% 11.72% 10.19%
8. Employee Expenses/Total Operating Expenses % 41.63% 37.68% 40.73% 41.49% 44.20% 47.82% 46.93% 48.01%
9. Interest Expenses on Total Deposit and Borrowings % 3.69% 3.87% 5.10% 6.66% 8.88% 7.38% 5.87% 5.67%
10. Exchange Fluctuation Gain/Gross Income % 4.31% 7.38% 5.91% 4.48% 4.20% 4.32% 4.69% 7.30%
11. Staff Bonus/ Total Employee Expenses % 25.08% 22.32% 24.04% 24.20% 17.55% 16.84% 17.03% 18.32%
12. Net Profit/Loans & Advances % 1.88% 1.52% 1.77% 2.12% 1.68% 1.52% 1.45% 1.50%
13. Net Profit/ Total Assets % 1.43% 1.16% 1.41% 1.59% 1.23% 1.10% 1.03% 1.10%
14. Total Credit/Deposit % 85.84% 90.20% 94.17% 79.45% 87.87% 82.33% 79.47% 82.70%
15. Total Operating Expenses/Total Assets % 1.50% 1.58% 1.54% 1.69% 1.86% 1.62% 1.54% 1.49%
16. Adequacy of Capital Fund on Risk Weightage
Assets
a. Core Capital % 10.26% 10.40% 9.08% 10.29% 12.35% 11.30% 11.24% 10.85%

b. Supplementary Capital % 0.96% 4.01% 2.47% 2.05% 1.41% 0.90% 0.93% 0.96%
c. Total Capital Fund % 11.22% 14.41% 11.56% 12.34% 13.76% 12.20% 12.17% 11.81%
17. Liquidity (CRR) Ratio 3.65% 1.91% 7.13% 8.02% 5.74% 13.52% 12.43% 13.62%
18. Non Performing Loans/Total Loans % 0.73% 1.32% 0.44% 0.50% 1.12% 2.21% 2.89% 4.03%
19. Weighted Average Interest Rate Spread % 4.67% 4.30% 4.17% 3.28% 3.92% 4.27% 4.62% 3.71%
20. Book Net worth Per Share Rs. 137 128 137 137 138 148 166 162
21. Total Shares Number 7,500,000 10,700,000 11,860,992 13,060,159 16,038,000 16,038,000 1,828,332 2,431,681,560
22. Total Employees Number 212 256 260 364 347 327 377 362
Schedule 4.32
Kumari Bank Limited

Significant Accounting Policies
Financial Year 16 July 2013 to 16 July 2014
(1 Shrawan 2070 to 32 Ashad 2071)
1. General Information
Kumari Bank Limited (the “Bank”) is a public limited company, incorporated on10 December 1999 and
domiciled in Nepal. The address of its registered office is Durbar Marg, Kathmandu, Nepal. The Bank is
listed in Nepal Stock Exchange Limited.
The Bank carries out commercial banking activities in Nepal under license from Nepal Rastra Bank
(the central bank of Nepal) as Class “A” licensed institution.
2. Date of Authorization of Financial Statement

The Financial Statements for the year ended on 16 July 2014 is approved by Board of Directors (BOD)
of the Bank on 31 Bhadra 2071 (16 September 2014).
3. Summary of Significant Accounting Policies

The Significant accounting policies applied in the preparation of the financial statements of the bank
are set out below. These policies have been consistently applied to all the years presented, unless
otherwise stated.
3.1 Statement of Compliance

The financial statements have been prepared in accordance with Nepal Accounting Standards
(NAS) issued by the Nepal Accounting Standard Board (NASB) except for exceptions as mentioned
below, generally accepted accounting principles, and the provisions of Bank and Financial Institution
Act, 2063, directives issued by Nepal Rastra Bank and the Company Act, 2063.
3.2 Basis of Preparation

The financial statements have been prepared under the historical cost convention. Use of certain
critical accounting estimates and exercise judgement in the process of applying the Bank’s
accounting policies have been done, wherever required, in conformity with NAS and generally
accepted accounting principles.
3.3 Interest Income

Interest income on loans and advances is recognised on cash basis as per the directive issued by
NRB, which is not in accordance with Nepal Accounting Standards.
Interest for the moratorium period on some term loans as stated in point no 23 of Notes to Accounts
has been recognised as income after capitalising it on loans which is in accordance with NRB
approval.
Interest income on investments is recognised on accrual basis provided that premium on government
bonds has been netted off against interest income from such bonds.
3.4 Commission Income

Guarantee commission up to Rs. 100,000 is recognised as commission income on cash basis.
Commission income on guarantee covering more than one fiscal year and commission amount
above Npr.100,000 is booked on accrual basis.
Other commission incomes are recognised as income on accrual basis. Recognition of guarantee
commission income is not in accordance with NAS – 07 “Revenue”.
71

3.5 Dividend Income
Dividend is recognised as income when the bank’s right to receive payment is established. It is
recognised as income at net of withholding tax.
3.6 Foreign Exchange Incomes

i. Foreign currency assets and liabilities as at the Balance Sheet date have been translated at the
mid rate (average of buying and selling rate) of exchange rates prevalent as on the Balance
Sheet date.
ii. Foreign currency trading gain/loss realised in the foreign currency transactions is accounted for
on the date of transaction and based on transaction rate.
iii. Revaluation gain arising due to fluctuation in exchange rate of foreign currencies is accounted
for and shown as “Revaluation Gain/Loss”. Amount equivalent to 25% of revaluation gain of the
current year is appropriated to Exchange Fluctuation Reserve as per directive issued by Nepal
Rastra Bank.
3.7 Interest Expenses

Interest expense on deposit liabilities, bonds and borrowings are accounted for on accrual basis.
3.8 Loans and Advances, Overdraft and Bills Purchased

Loans and advances, overdrafts and bills purchased include direct finance provided to the
customers as per the Bank’s policy and product papers such as bank overdrafts, personal loans,
term loans, hire purchase loans and loans to deprived sectors. All the loans are subject to regular
review and are graded according to the level of credit risk and classified as per NRB Directives. Total
Loans and advances are stated net of loan loss provisions in the Balance Sheet.
3.9 Staff Loans

Staff loan has been provided as per the bank’s policy and shown under the head ‘Other Assets’ as
per NRB Directives.
3.10 Loan Loss Provision

Provision is made for possible losses on loans and advances, overdraft and bills purchase at 1% to
100% in accordance with the directives issued by NRB.
3.11 Loans & Advances Write off

Unrecoverable loans and advances are written off in accordance with the by-laws of the Bank
approved by Bank’s BOD and NRB.
Amounts recovered against loans written off in earlier years are recognized as income in the year of
recovery.
3.12 Investments
Investments in Government Securities are valued at cost.
Placements with maturity period up to 7 days and more than 7 days are classified as money at call
and investments respectively.
Investment in shares, debenture and bonds are valued at cost or market value, whichever is lower.
Necessary reserves for certain investments have been created as per NRB directive.
3.13 Fixed Assets and Depreciation

a) Fixed assets are stated at historical cost. Historical cost includes expenditures that are directly
attributable to the acquisition of individual asset item.
72
b) Below mentioned fixed assets are depreciated on Straight Line Method at the rates mentioned
below -
Asset Rate
Computer Software 20%
Leasehold 20%
Battery 33.33%
c) Depreciation on newly acquired fixed assets is charged from the next month of booking.
Depreciation of an asset ceases when it is derecognised at the time of its disposal.
d) Depreciation on below mentioned assets is charged on the basis of diminishing value method at
the rates mentioned below -
Asset Rate
Building 5%
Office Equipments 25%
Furniture & Fixtures (Wooden & Metal) 25%
Computer 25%
Vehicles 20%
e) Assets costing more than Rs. 10,000 and/or having useful life more than 1 year are booked under
fixed assets.
3.14 Amortisation of Software Cost and Leasehold Assets

a) Computer software are capitalised on cost incurred to acquire specific software. Bank amortises
such cost over a period of useful life, estimated as 5 years from the date of acquisition.
b) Leasehold properties are capitalised on cost incurred to set up such assets. Such assets are
amortised over the period of 5 years.
3.15 Lease Rental

The lease agreements entered into by the Bank for office buildings are operating lease agreements.
The total payments made under operating leases are charged to Rent Expenses in the profit and
loss account.
3.16 Employee Retirement Benefits

The Bank has schemes of retirement benefits namely Provident Fund and Gratuity Fund. Provision
for expenses on account of Provident and Gratuity Funds is made on accrual basis with the amount
of liabilities computed by the bank in accordance with its applicable schemes. Contributions to
retirement fund are made on a regular basis as per its rules and regulations.
3.17 Income Tax

a. Current Income Tax
Provision for current income tax is made in accordance with the provisions of the prevailing
Income Tax Act, 2058 and Rules as amended.
b. Deferred Income Tax
Deferred income tax is provided on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. It is determined using
tax rates (and laws) that have been enacted at the balance sheet date and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability
is settled.
73

3.18 Stationery
Stationery purchased for consumption is charged as expense on consumption basis. FIFO method of
stationery valuation has been adopted by the bank.
3.19 Non-banking Assets

Non-banking Asset is booked at lower of market price or total dues, on the day before booking and
provision for the asset has been made as per NRB directive.
The details of non-banking assets as on Ashad end 2071 have been stated in point no. 24 of Notes
to Accounts.
3.20 Provisions and Contingent Liabilities

The Bank creates a provision when there is a present obligation as a result of past events that
probably requires an outflow of resources and a reliable estimate can be made of the amount of
the obligation. A disclosure for contingent liability is made when there is a possible obligation or a
present obligation that may, but probably will not, require an outflow of resources. When there is a
possible obligation or a present obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.
3.21 Staff Bonus

Provision for staff bonus is made as per the NRB Directive.
74
Schedule 4.33
Kumari Bank Limited

Notes to Accounts
Financial Year 16 July 2013 to 16 July 2014
(1 Shrawan 2070 to 32 Ashad 2071)
1. Provision for staff bonus

Provision for staff bonus has been provided at 10% of net profit before providing for income tax
provision. This provision has been made as per NRB directive.
2. Staff Housing Fund

Staff Home Loan is provided as per the bank’s policy. A separate housing fund in accordance with
Labour Act, 2048 has not been created.
3. General Reserve
As per the requirement of Nepal Rastra Bank, 20% of current year’s profit has been transferred to
General Reserve.
4. Tax Settlement Outstanding / Contingent Liability

Tax reassessment by Large Tax Payers’ Office has been completed up to the FY 2066/67. We are in
process of filing a case in Supreme Court against tax assessment order for the FY 2063/64. For tax
reassessment of subsequent years, the bank has filed cases against the decision of tax authorities.
5. Gratuity Expenses
During the year, the Bank has provided Rs. 13,317,642/- (Previous Year Rs. 14,117,726/-) on account of
gratuity.
6. Dividend and Bonus

Board meeting of the bank held on 31st Bhadra 2071 has decided to propose 33% stock dividend
from the profit of current fiscal year and 1.74% cash dividend (tax on bonus share).
Rs. 400,000,000/- that was transferred from Bond Redemption Reserve to General Reserve Fund in the
fiscal year 069/70, has been proposed to transfer to Capital Redemption Reserve in fiscal year 070/71
which is further proposed to be distributed as Stock Dividend.
7. Unpaid Dividend
Out of total cash dividend proposed in FY 2066/67 & FY 2068/69 which were distributed in FY 2067/68
& FY 2069/70 respectively, cash dividend of Rs. 9,985,798 is still payable because shareholders have
not yet collected the dividend.
8. Loan Disbursed, recovered and outstanding during the year.

The loan disbursed, recovered and outstanding during the year is given below:
NPR. In Million
Opening Balance Total Disbursed Total Settled Outstanding
20,120 23,674 20,985 22,809
75

9. Summary of Changes in deposit during the year
Growth in deposits during the year is given below:
NPR. In Million
Particulars This Year (Rs.) Last Year (Rs) Changes in amount
1) Current Deposit 1,237 1,038 199
a) Local Currency 1,202 1,008 194
b) Foreign Currency 35 30 5
2) Saving Deposit 7,234 6,823 411
3) Fixed Deposit 12,142 11,353 789
a) Local Currency 11,446 10,328 1,118
b) Foreign Currency 696 1,025 (329)
4) Call Deposit 6,812 5,967 845
5) Margin Deposit 154 137 17
a) Local Currency 154 137 17
b) Foreign Currency - 0 -
Total Deposit 27,578 25,319 2,260
10. Average Interest Rate Spread

Particulars Percentage
The weighted average yield rate on loans and investments 8.87
The weighted average cost rate on deposits and borrowings 5.17
The weighted average interest rate spread 3.70
11. Summary of amortizable expenses yet to be written off

No such item.
12. Summary of concentration of exposure

No balance sheet and off balance sheet transaction have been highly concentrated to a single
person, firm, organization or to a particular sector. Detail of highest exposure to a single person or
organization is as follows:
NPR. In Million
Maximum concentration to a single customer
Particulars Total Exposure
Amount %
Loans & Advances 22,809 457 2.00
Deposits 27,578 3,046 11.05
Off Balance Sheet Items 3,122 356 11.41
76
13. Classification of Assets and Liabilities based on Maturity
NPR. In Million
1-90 91-180 181-270 271-365 More than

S.N. Particulars Total
days days days days 1 year
Assets
1 Cash Balance 777.84 - - - - 777.84
2 Balance with Banks & FIs 4,118 - - - - 4,118
3 Investment in Foreign Banks 193 289 - - - 482
4 Call Money 507 - - - - 507
5 Government Securities 653 748 208 913 136 2,658
6 Nepal Rastra Bank Bonds - - - - - -
7 Inter Bank & FI Lending - - - - - -
8 Loans & Advances 9,683 3,102 1,944 1,116 6,963 22,809
9 Interest Receivable 297 1 1 1 0 300
10 Reverse Repo - - - - - -
11 Acceptance Receivable - - - - - -
12 Payments under S.No. 20,21 & 22 789 235 101 - 1,254 2,379
13 Others 149 50 50 50 261 559
Total (A) 17,167 4,425 2,303 2,079 8,615 34,590
Liabilities
14 Current Deposits 626 209 209 209 139 1,391
15 Saving Deposits (including call) 3,511 702 702 702 8,428 14,046
16 Fixed Deposits 1,498 3,148 3,395 3,339 763 12,142
17 Debentures/Bonds - - - - - -
18 Borrowings 34 168 - - - 202
Call/Short Notice - - - - - -
Inter-bank/Financial Institutions 34 168 - - - 202
Refinance - - - - - -
Others - - - - - -
19 Other Liabilities and Provisions 53 5 5 5 - 69
Sundry Creditors - - - - - -
Bills Payable 11 4 4 4 - 22
Interest Payable 37 - - - - 37
Provisions - - - - - -
Others 5 2 2 2 - 10
20 Acceptance Liabilities 254 63 - - - 318
21 Irrevocable Loan Commitment 168 238 238 238 238 1,118
22 Letter of Credit/Guarantee 1,249 556 273 162 565 2,805
23 Repo - - - - - -
24 Payable under s.no.11 - - - - - -
25 Others 118 29 29 29 - 204
Total (B) 7,511 5,117 4,851 4,683 10,132 32,294
Net Financial Assets (A-B) 9,656 (692) (2,548) (2,603) (1,518) 2,296
Cumulative Net Financial Assets 9,656 8,965 6,417 3,813 2,296 -
77

14. Borrowings by the bank against the collateral of own assets
The bank has no such borrowings.
15. Related Parties

Key Management Personnel
Key Management Personnel of the Bank includes Chief Executive Officer and members of the Board
of Directors of the Bank, as follows:
Mr. Noor Pratap JB Rana - Chairman (Promoter)

Mr. Santosh Kumar Lama - Director (Promoter)
Prof. Dr. Rajan B. Paudel - Director (Professional)
Dr. Shobha Kant Dhakal - Director (Public)
Mr. Uttam P. Bhattarai - Director (Promoter)
Mr. Naresh Dugad - Director (Promoter)
Mr. Puna Ram Bhandari - Director (Public)
Mr. Rasendra Bahadur Malla - Director (Public)
Mr. Uday Krishna Upadhyaya - Chief Executive Officer
 Compensation to Key Management Personnel-CEO of the Bank

Amount in NPR.
Categories Current Year

Short-term employee benefits 9,197,215
Signing bonus -
Post-employment benefits -
Other long-term benefits -
Termination benefits -
Share-based benefits -
Total 9,197,215
Above figure includes final clearance of medical, leave encashment and gratuity of then Acting CEO who became the CEO of the
bank from 05 September 2013.
In addition to the above, bank bears the expenses relating to mobile bill and fuel for the vehicle.
 Transaction with Key Management Personnel (BOD) of the Bank

The following provides transactions between the Bank and then Key Management Personnel (Directors)
of the Bank during the year –
Amount in NPR.
Nature of Transaction Current Year

Meeting Allowances 2,104,300
Other expenses 1,87,500
Total 22,91,800
78
16. Paid up Share Capital
Paid up share capital of the Bank has changed over the years as follows:
Fiscal Cumulative
Remarks
Year Paid up Capital
2057/58 350,000,000
2058/59 350,000,000
2059/60 350,000,000
2060/61 500,000,000 Initial Public Offering of NPR. 150 million
2061/62 625,000,000 Right share issue of NPR. 125 million (25%)
2062/63 750,000,000 Bonus share issue of NPR. 125 million (20%)
2063/64 900,000,000 Bonus share issue of NPR. 150 million (20%)
2064/65 1,070,000,000 Right share issue of NPR. 180 million (20%). Npr. 170 million capitalized on balance sheet date
and balance on subsequent year
2065/66 1,186,099,200 In the fiscal year 2064/65, the bank had proposed 10 % bonus share and 15% right share.
10 % bonus share had been capitalized as on balance sheet date pending issuance of right
share
2066/67 1,306,015,920 In the FY 2065/66, the bank had issued 10% bonus share including to those who were released
from black list during the year. Further, right share of NPR. 1,080,000 issued on FY 2064/65
relating to blacklisted shareholders are included in current year’s capital subsequent to their
release from black list
2067/68 1,603,800,000 In the FY 2067/68, the bank capitalized NPR. 178,200,000 (15%) share capital which was
approved for issuance in fiscal year 2064-65. Further, the bank auctioned 7841 numbers
of shares that include right and bonus shares of subsequent years relating to right share
approved in FY 2064-65 but issued only in FY 2067-68.
Bonus share at the rate of 8% (NPR. 118,800,000) had been proposed in the FY 2067/68
2068/69 1,603,800,000 -
2069/70 1,828,332,000 14% bonus share of NPR. 224.532 million proposed in the FY 2069/70
2070/71 2,431,681,560 33% bonus share of NPR. 603.349 million proposed in the FY 2070/71
17. Sale of Land and Building

Bank has not sold its land or building during the year.
18. Deferred Tax

Component of Deferred Tax Assets
Amount in NPR.
Taxable temporary
Particulars As per financial statement As per Income Tax act
difference
Fixed assets base 149,920,951 15,27,52,973 28,32,022
Total 149,920,951 15,27,52,973 28,32,022
Current Deferred Tax Assets 8,49,607
Opening Deferred Tax Asset 1,079,936
Adjustment (2,30,329)
Deferred tax is calculated considering the existing tax rate of 30%. As prescribed by NRB Directives, total
deferred tax assets up to July 16, 2014 amounting Rs. 849,607 have been ear-marked as deferred tax
reserve.
79

19. Reconciliation Status
NPR. In Million
Particulars Upto 1 Year Above 1 Year to 3 Years More than 3 Years Grand Total
They Credit 47 10 0 58
We Debit 25 0 0 26
They Debit 1 0 0 1
We Credit 36 1 1 38
Total 110 11 1 122
20. Details of Software Application

Amount in NPR.
Net Opening Balance Additions during the year Amortization during the year Net Closing Balance
11,241,451 667,152 5,074,428 6,834,175
21. Interest Capitalisation

Following are the loans, interest on which is capitalised to recognise income in accordance with NRB
approval. These loans are the project loans interest on which were capitalised for moratorium period.
Detail of such loans and interest recognised in FY 2070/71 is as follows –
Amount in NPR.
SN Name of the client Type Capitalized Interest NRB approval date
1 JOSHI HYDROPOWER DEV. COM. PVT. LT Term Loan 11,705,455 9/27/2069
2 RURU JALBIDHYUT PARIYOJANA CO.P.LTD Term Loan 1,043,563 9/30/2070
3 MARUTI CEMENTS PVT.LTD Term Loan 9,988,266 6/14/2070
4 BIRATNAGAR ASPATAL PVT. LTD Term Loan 7,490,916 10/14/2070
5 MAILUNG KHOLA HYDROPOWER CO. P. LTD Term Loan 2,560,852 7/1/2068
6 SARBOTTAM CEMENT PVT. LTD Term Loan 8,107,326 9/22/2070
7 ELECTROCOM AND RESEARCH CENTER P. L Term Loan 8,116,247 7/1/2068
8 RADHI BIDHYUT COMPANY LTD Term Loan 8,801,240 5/25/2069
9 NEPAL HEALTH CARE CO-OPERATIVE LTD Term Loan 6,865,862 3/25/2070
10 SANIMA MAI HYDROPOWER PVT. LTD Term Loan 11,908,676 1/29/2070
Total 40,896,378
22. Interest income recognised on deferred cash basis

Of the total amount of interest due as on Ashad end 2071, interest of Rs. 15,281,297 realised in cash by
15 of Shrawan 2071 has been recognised as interest income on balance sheet date which complies
NRB directive regarding recognition of interest income on deferred cash basis.
23. Staff Leave Encashment

Bank has not made any provision for accumulated leave encashment. However, any encashment of
leave in excess of minimum accumulation as per bank’s rule has been charged as an expense in the
year of encashment. As per the ‘Personnel Policy Guideline’ of the Bank, staffs are entitled to encash
accumulated leave on retirement. As per NAS 14, ‘Employee Benefits’ (Voluntary Compliance for
now) bank is required to account for such liability on accrual basis.
80
24. Non-banking assets (NBA) Disclosure
Bank’s detail of NBA as on Ashad end 2071 is as follows -
Amount in NPR.
Acquired Date of Non Total Amount of Non
Name & Address of Borrower or Party
Banking Asset Banking Asset
Sarita Vaidya (Rajbhandari), Kathmandu 4-Dec-12 5,216,247
Shilu Housing & Developers Pvt. Ltd., Lalitpur 5-Jul-13 52,795,000
Opportunity Manpower Service, Gongabu 27-Jan-14 2,892,225
Total 60,903,472
The bank has booked loss provision on NBA as per NRB directive.
25. Capital Work in Progress (WIP)

Carrying amount of capital work-in-progress includes cost incurred for the soil testing work for building
construction site at Naxal. As of the balance sheet date, the carrying amount of WIP is NPR. 261,369.
26. Lending to National Trading Limited and problematic FIs

The bank has no lending against National Trading Limited. The bank has no inter-bank placements
and/or other claims against the FIs that are declared problematic by NRB.
27. Mortgaged property under Rokka from NRB

The mortgaged property relating to following loans are under Rokka from NRB –
Name of Loan Amount (Ashad end 2070) Loan Loan Loss Rokka
Borrower Principal Interest Total Classification Provision Letter No. Date
Aayusha
Bai.Su.Bi./Bi.Ni./
Developers 121,014,176 13,832,464 134,846,640 Good 60,507,088 2070-03-25
/069/70
Pvt. Ltd.
Kohinoor
Bai.Su.Bi./Bi.Ni./
Hill Housing 73,719,086 12,211,444 85,930,530 Good 36,859,543 2070-03-25
/069/70
(P). Ltd.
28. Rounding off and Comparative Figures

Figures are rounded to nearest rupees. Previous year's figure has been regrouped or rearranged
where necessary.
81

82
KUMARI BANK LIMITED Schedule 4.34
Statement of loan availed by bank's promoter/promoters' group from
other bank and financial institutions by pledging their shares.
as on 32 Ashad 2071 (16 July 2014)
Promoter
Shares
under the % of Details of Loan
Promoter's/ Number of
S.No. ownership of Paid-up Loan Amount (Rs.) Remarks
Shareholders's Name Share Pledge
Promoter capital
Total Shares Lending Bank

1 RAJENDRA DAS
13,372 0.07 CENTRAL FINANCE LIMITED - 2,000
SHRESTHA
MACHHAPUCHHERE BANK
- 5,160
LIMITED
2 GURKHA DEVELOPMENT
LAXMAN SHRESTHA 188,871 1.03 6,840,000 82,620
BANK LIMITED
3 JANATA BANK NEPAL
BHIM KRISHNA UDAS 133,206 0.73 6,131,254 116,848
LIMITED
4 PHURBA BANGDEL
133,206 0.73 NABIL BANK LIMITED - 6,468
LAMA
- SIDDHARTHA BANK LIMITED 6,688,584 58,000
5 Pledged as additional security
GOVINDA DAS *33,274,363.39 against the Credit Facilities availed by
199,810 1.09 LUMBINI BANK LIMITED 114,252
SHRESTHA **25,350,203.95 *Himalayan Travels & Tours Pvt.Ltd.
and ** Oriental Firm Pvt.Ltd.
#Pledged as additional security

NABIL BANK LIMITED #55,444,211.00 43,200 against the credit facilities availed by
Himalayan Travels & Tours Pvt.Ltd.
6 Pledged as additional security
BIDHYA KRISHNA *33,274,363.39 against the Credit Facilities availed by
244,213 1.34 LUMBINI BANK LIMITED 1,14,252
SHRESTHA **25,350,203.95 *Himalayan Travels & Tours Pvt.Ltd.
and ** Oriental Firm Pvt.Ltd.
PRIME COMMERCIAL BANK
28,089,420 26,780
NEPAL LIMITED
NABIL BANK LIMITED #55,444,211.00 69,800 against the credit facilities availed by
Pledged as additional security
*33,274,363.39 against the Credit Facilities availed by
7 ANIL DAS SHRESTHA 133,206 0.73 LUMBINI BANK LIMITED 71,668
**25,350,203.95 *Himalayan Travels & Tours Pvt.Ltd.
and #Oriental Firm Pvt.Ltd.
NABIL BANK LIMITED #55,444211 20,800 against the credit facilities availed by
SUNIL NANDA SINGH RELIABLE DEVELOPMENT
8 13,320 0.07 1,650,000 9,000
PRADHAN BANK LIMITED
MADHAV KUMAR RELIABLE DEVELOPMENT
9 13,320 0.07 1,650,000 9,000
BASNET BANK LIMITED
SHIVA SHANKAR
10 116,688 0.64 NMB BANK LIMITED - 35,925
AGRAWAL
LUMBINI LEASING AND
11 SOPHIE UPADHAYA 63,939 0.35 1,500,000 22,361
FINANCE COMPANY LIMITED
CENTURY COMMERCIAL
6,434,497 8,200
BANK LIMITED
NEPAL HOUSING AND
KAMAL BIKRAM
12 5,328 0.03 MERCHANT FINANCE 963,614 3,011
SINGH
LIMITED
YETI DEVLOPMENT BANK
13 PEGI PANDEY 16,160 0.09 1,138,838 14,176
LIMITED
CLEAN ENERGY
SURENDRA
14 66,603 0.36 DEVLOPMENT BANK - 52,484
BHANDARI
LIMITED

15 SITA GURUNG 39,961 0.22 SANIMA BANK LIMITED 400,000 9,096
H & B DEVLOPMENT BANK
16 KANCHAN SHARMA 2,664 0.01 522,901 2,337
LIMITED
KUMUD KUMAR H & B DEVLOPMENT BANK
17 113,596 0.62 1,388,931 85,269
DUGAR LIMITED
H & B DEVLOPMENT BANK
18 BIKASH DUGAR 93,245 0.51 - 81,794
LIMITED
19 BACHHA RAJ TATER 53,282 0.29 NIC ASIA BANK LTD 1,174,675 41,987
ANANDA KUMAR
20 39,962 0.22 NEPAL SBI BANK LIMITED 75,255,400 9,441
RUNGATA
NABIL BANK LIMITED 99,511,993 25,614
21 NAVIN AGRAWAL 39,961 0.22 NMB BANK LIMITED 4,790,438 18,404
DEVAKI NANDAN
22 42,625 0.23 NMB BANK LIMITED - 24,431
AGRAWAL
83
84
23 BALRAM NEUPANE 39,911 0.22 SIDDHARTHA BANK LIMITED 292,672 23,370
PRIME COMMERCIAL BANK
24 GANGA AMATYA 66,603 0.36 1,588,009 22,174
NEPAL LIMITED
BIJAY BAHADUR
25 13,306 0.07 UNION FINANCE LIMITD - 5,760
MANANDHAR
BHIMESHOR CO-OPERATIVE
26 DEVI LAL BIST 665 0.00 60,197 524
LIMITED
SHAMBHU KUMAR BHIMESHOR CO-OPERATIVE
27 665 0.00 394,714 583
BASNET LIMITED
SAPANA MULTI PURPOSE
28 BIKRAM BISTA 1,866 0.01 CO-OPERATIVE SOCIETY 417,836 1,023
LIMITED
RAJENDRA PRASAD
29 279,196 1.53 LAXMI BANK LIMITED 52,009,800 116,753
SHRESTHA
30 SABITRI GURUNG 532,828 2.91 LAXMI BANK LIMITED 52,009,800 233,240
31 JEEVAN NEPAL 26,641 0.15 SRIJANA FINANCE LIMITED 1,050,000 21,210
INTERNATIONAL
BODH PRASAD
32 67,309 0.37 DEVELOPMENT BANK 2,367,900 47,408
TRIPATHI
LIMITED
PRABHU PRIME COMMERCIAL BANK
33 133,064 0.73 28,677,514 116,723
INVESTMENT P.LTD NEPAL LIMITED
Total 2928592 16.02 382,998,987 1,754,756

Schedule 4.35
Kumari Bank Limited
Fiscal Year 2070/71 (2013/14)Comparison of Unaudited and Audited
Financial Statement as of FY 2070/71

Rs. in 000'
As per As per Variance
Unaudited Audited Reasons for
S.N. Particulars
Financial Financial Amount % Variance
Statement Statement
Total Capital and Liabilities Reasons
1 31,932,433 31,930,990 (1,443) 0.00%
(1.1 to 1.7) mentioned below
Proposed bonus
1.1 Paid Up Capital 1,828,332 2,431,682 603,350 33.00%
shares
Issue of bonus
share, tax on bonus
1.2 Reserve and Surplus 1,169,283 534,924 (634,359) -54.25%
share and change
in profit
1.3 Debenture and Bond - - - -
1.4 Borrowings 201,952 201,952 - -
1.5 Deposits (a+b) 27,578,376 27,578,376 - -
a. Domestic Currency 26,503,880 26,503,880 - -
b. Foreign Currency 1,074,496 1,074,496 - -
1.6 Income Tax Liability - - -
Adjustment of
provision for
1.7 Other Liabilities 1,154,490 1,184,056 29,566 2.56% expenses made at
year end and tax
on bonus share
2 Total Assets (2.1 to 2.7) 31,932,433 31,930,990 (1,443) 0.00%
2.1 Cash & Bank Balance 4,895,685 4,895,685 - -
2.2 Money at Call and Short Notice 507,478 507,478 - -
2.3 Investments 3,164,626 3,164,626 - -
2.4 Loans and Advances (a+b+c+d+e+f) 22,808,503 22,808,503 - -
a. Real Estate Loan 2,040,879 2,040,879 - -
1. Residential Real Estate Loan 234,772 234,772 - -
2. Business Complex & Residential
617,892 617,892 - -
Apartment Construction Loan
3. Income Generating Commercial
- - -
Complex Loan
4. Other Real Estate loan 1,188,215 1,188,215 - -
b. Personal Home Loan of Rs.10 million 1,948,109 1,948,109 - -
c.Margin Type Loan 538,887 538,887 - -
d.Term Loan 4,399,845 4,399,845 - -
e.Overdraft Loan/TR Loan/WC Loan 12,624,206 12,624,206 - -
f. Others 1,256,576 1,256,576 - -
Depreciation
2.5 Fixed Assets 235,769 235,776 7 0.00%
adjustment.
2.6 Non Banking Assets - - - -
Adjustment of
2.7 Other Assets 320,371 318,921 (1,450) -0.45% advance tax and
deferred tax
85

3 Profit and Loss Acccount
Accrued Nostro
3.1 Interest Income 2,410,762 2,410,784 23 0.00%
Income booked
3.2 Interest Expenses 1,575,312 1,575,312 - -
A. Net Interest Income (3.1-3.2) 835,450 835,473 23 0.00%
3.3 Fees, Commission and Discount 188,725 188,725 - -
Accrued income
3.4 Other Operating Income 56,647 56,945 298 0.53%
booked
3.5 Foreign Exchange Gain/ Loss (Net) 85,155 85,155 - -
B. Total Operating Income
1,165,977 1,166,298 321 0.03%
(A.+3.3+3.4+3.5)
Adjustment of
3.6 Staff Expenses 221,653 221,701 47.68 0.02%
expenses
Adjustment of
3.7 Other Operating Expenses 240,594 240,121 (473) -0.20% expense provision
and depreciation
C. Operating Profit Before Provision
703,730 704,476 747 0.11%
(B.- 3.6-3.7)
3.8 Provision for Possible Losses 234,437 236,312 1,875 0.80% LLP adjustment
D. Operating Profit (C-3.8) 469,293 468,165 (1,128) -0.24%
Adjustment of
3.9 Non Operating Income/Expenses (Net) 2,556 2,540 (16) -0.62%
expenses
Write Back of Provision for Possible
3.10 72,191 76,151 3,960 5.49% LLP adjustment
Loss
E. Profit from Regular Activities
544,040 546,856 2,816 0.52%
(D+3.9+3.10)
3.11 Extraordinary Income/Expenses (Net) - - -
F. Profit before Bonus and Taxes ( E.
544,040 546,856 2,816 0.52%
+ 3.11)
3.12 Provision for Staff Bonus 49,458 49,714 256 0.52% Change in profit
Change in profit
3.13 Provision for Tax 153,673 155,487 1,813 1.18%
and deferred tax
G. Net Profit/Loss (F.-3.12-3.13) 340,909 341,655 746 0.22%
86
Schedule 4 A
KUMARI BANK LIMITED
Unaudited Financial Results (Quarterly)
As at Fourth Quarter (16/July/2014) of the Fiscal Year 2013/2014
Amount in Rs. '000
31.03.2070/
32.03.2071/ 30.12.2070/
15.07.2013
16.07.2014 13.04.2014
S.N. Particulars Corresponding
This Quarter Previous Quarter
Previous Year
Ending Ending
Quarter Ending
1 Total Capital and Liabilities (1.1 to 1.7) 31,932,433 31,916,218 28,973,041
1.1 Paid Up Capital 1,828,332 1,828,332 1,828,332
1.2 Reserve and Surplus 1,169,283 828,374 828,374
1.3 Debenture and Bond - - -
1.4 Borrowings 201,952 288,000 -
1.5 Deposits (a+b) 27,578,376 27,424,123 25,318,569
a. Domestic Currency 26,503,880 26,138,510 24,102,282
b. Foreign Currency 1,074,496 1,285,613 1,216,287
1.6 Income Tax Liability - - -
1.7 Other Liabilities 1,154,490 1,341,941 997,766
2 Total Assets (2.1 to 2.7) 31,932,433 31,916,218 28,973,041
2.1 Cash & Bank Balance 4,895,685 3,526,890 3,406,883
2.2 Money at Call and Short Notice 507,478 1,590,182 753,410
2.3 Investments 3,164,626 3,891,224 4,135,142
2.4 Loans and Advances (a+b+c+d+e+f) 22,808,503 22,331,275 20,119,789
a. Real Estate Loan 2,040,879 2,050,679 2,185,842
1. Residential Real Estate Loan 234,772 143,689 127,538
2. Business Complex & Residential Apartment 617,892 616,711 590,274
Construction Loan
3. Income Generating Commercial Complex Loan - - -
4. Other Real Estate loan 1,188,215 1,290,279 1,468,030
b. Personal Home Loan of Rs. 1 Crore or Less 1,948,109 1,757,776 1,637,162
c. Margin Type Loan 538,887 298,867 338,866
d. Term Loan 4,399,845 4,120,950 3,251,548
e. Overdraft Loan/TR Loan/WC Loan 12,624,206 12,556,227 11,324,489
f. Others 1,256,576 1,546,775 1,381,882
2.5 Fixed Assets 235,769 237,080 255,865
2.6 Non Banking Assets - - -
2.7 Other Assets 320,371 339,566 301,952
87

Upto This Corresponding
Upto Pervious
3 Profit and Loss Account Quarter Previous Year
Quarter End
End Quarter End
3.1 Interest Income 2,410,762 1,779,860 2,464,307
3.2 Interest Expenses 1,575,312 1,192,733 1,486,282
A. Net Interest Income (3.1-3.2) 835,450 587,127 978,025
3.3 Fees, Commission and Discount 188,725 144,687 138,200
3.4 Other Operating Income 56,647 42,099 41,862
3.5 Foreign Exchange Gain/ Loss (Net) 85,155 66,217 56,993
B. Total Operating Income (A.+3.3+3.4+3.5) 1,165,977 840,130 1,215,080
3.6 Staff Expenses 221,653 168,092 203,805
3.7 Other Operating Expenses 240,594 168,838 230,470
C. Operating Profit Before Provision (B.- 3.6-3.7) 703,730 503,200 780,805
3.8 Provision for Possible Losses 234,437 240,754 314,619
D. Operating Profit (C-3.8) 469,293 262,445 466,186
3.9 Non Operating Income/Expenses (Net) 2,556 3,458 (11,134)
3.1 Write Back of Provision for Possible Loss 72,191 36,423 5,259
E. Profit from Regular Activities (D+3.9+3.10) 544,040 302,326 460,311
3.11 Extraordinary Income/Expenses (Net) - - -
F. Profit before Bonus and Taxes ( E. + 3.11) 544,040 302,326 460,311
3.12 Provision for Staff Bonus 49,458 27,484 41,846
3.13 Provision for Tax 153,673 82,453 127,016
G. Net Profit/Loss (F.-3.12-3.13) 340,909 192,389 291,448
At the End of
At the End At the End
Corresponding
4 Ratios of This of Previous
Previous Year
Quarter Quarter
Quarter
4.1 Capital Fund To RWA 11.92% 11.73% 12.17%
4.2 Non Performing Loan (NPL) to Total Loan 3.19% 3.69% 2.89%
4.3 Total Loan Loss Provision to Total NPL 125.41% 115.68% 128.94%
4.4 Cost of Funds (annualized - LCY) 6.03% 6.17% 6.61%
4.5 Credit to Deposit Ratio (as per NRB directives) 77.37% 77.10% 75.26%
4.6 Base Rate (FTM) 8.86% 8.50% 10.36%
4.7 Average Interest Rate Spread (as per NRB directives) 3.62% 5.17%
88
KUMARI BANK LIMITED
Disclosure Under Basel II as at 16 July 2014
(For F/Y 2013/14)
Capital Structure and Capital Adequacy
Tier I Capital and a breakdown of its components

Amount in Rs.
S.N. Particular Current Year
a Paid Up Equity Share Capital 1,828,332,000
b Irredeemable Non- cumulative preferenece share -
c Share premium -
d Proposed Bonus Equity Share 603,349,560
e Statutory General Reserves 467,413,482
f Retained Earnings 26,270,265
g Un-audited current period profit ( after all provision including tax) -
h Bond Redemption Reserve -
i Capital Adjustment Reserve -
j Dividend Equalization Reserves -
k Other free Reserve 849,607
Total Tier I Capital 2,926,214,913
Tier 2 Capital and a breakdown of its components

Amount in Rs
a Cumulative and/or Reedemable Preference Share -
b Subordinated term debt -
c Hybrid Capital Instuments -
d General Loan Loss provision 218,901,885
e Exchange Equalisation Reserve 20,391,043
f Investment Adjustment Reserve 20,000,000
g Assets Revaluation Reserve -
h Other Reserve (Deferred Tax Reserve) -
Total of Tier 2 Capital 259,292,928
Deductions from Capital:

The bank does not hold any amount as stipulated in the Capital Adequacy Framework that qualifies for
deduction from Capital.
89

Total Qualifying Capital
Amount in Rs
a Tier I Capital 2,926,214,913
b Tier II Capital 259,292,928
Total Capital Fund 3,185,507,842
Capital Adequacy Ratios

Amount in Rs
S.N. Particular Current Year (%)
a Tier 1 Capital to total RWA 10.85
b Total Capital Fund (Tier 1 + Tier 2) to Total RWA 11.81
Bank's Internal Approach to Access Capital Adequacy
Bank's mangement regularly reviews Bank's Capital Adequacy. Plans and budgets are prepared on the
basis of current and projected capital adequacy. Bank's plan and investment decision are based on the
level of capital adequacy it feels comfortable.
Risk weighted exposures for Credit Risk, Market Risk and Operational Risk
Amount in Rs.
1 Risk Weighted Exposure for Credit Risk 24,136,980,509
2 Risk Weighted Exposure for Operational Risk 1,633,843,987
3 Risk Weighted Exposure for Market Risk 170,673,428
Total 25,941,497,924
Risk weighted exposures under each of 11 categories of Credit Risk

Amount in Rs.
1 Claims on government and central bank -
2 Claims on other official entities -
3 Claims on banks 389,798,136
4 Claims on corporate and securities firms 13,939,528,720
5 Claims on regulatory retail portfolio 2,453,699,898
6 Claims secured by residential properties 1,059,227,635
7 Claims secured by commercial real estate 1,122,257,988
8 Past due claims 892,196,915
9 High risk claims 1,908,223,108
10 Other Assets 539,707,842
11 Off balance sheet items 1,832,340,267
Total 24,136,980,509
90
Total risk weighted exposure calculation table -
Amount in Rs.
1 Risk Weighted Exposure for Credit Risk 24,136,980,509
2 Risk Weighted Exposure for Operational Risk 1,633,843,987
3 Risk Weighted Exposure for Market Risk 170,673,428
Total Risk Weighted Exposure 25,941,497,924
Add: 3% of the total RWE due to non compliance to Disclosure
Requirement
Addition to RWE as per supervisiory review (3%) 778,244,938
Add RWE equvalent to reciprocal of capital charge of 2 % of gross 256,105,032
income.
Add: ...% of Total Deposit due to Insufficient Liquid Assets
Total Risk Weighted Exposure (After Bank's adjustment of Pillar II) 26,975,847,893
Amount of NPAs (Non Performing Assets) both gross and net

Current Year's Amount in Rs.
S.N. Non Performing Assets Gross Amount Net Amount
1 Restructured / Rescheduled 68,732,063 60,140,555
2 Substandard 49,785,517 37,339,137
3 Doubtful 258,697,625 129,348,812
4 Loss 541,099,299 -
Total 918,314,503 226,828,505
NPA Ratios
S.N. Particulars Current Year (%)
1 Gross NPA to gross advances 4.03%
2 Net NPA to net advances 1.04%
Movement of Non Performing Assets

Amount in Rs.
S.N. Non Performing Assets Previous Year Change Current Year
1 Restructured / Rescheduled - 68,732,063 68,732,063
2 Substandard 23,467,414 26,318,103 49,785,517
3 Doubtful 404,012,981 (145,315,356) 258,697,625
4 Loss 349,166,251 191,933,047 541,099,299
Total 776,646,646 141,667,857 918,314,503
Write Off of Loan and Interest Suspense

Amount in Rs
1 Loan Write Off -
2 Interest Suspense Write Off -
91

Movement of Loan Loss Provision and Interest Suspense
Amount in Rs.
S.N. Particular Previous Year Change Current Year
1 Loan Loss Provision 750,471,018 159,916,865 910,387,883
2 Interest Suspense 249,449,730 30,585,024 280,034,755
Details of additional loan loss provision

Current year's amount in Rs
S.N. Loan Classification Additional provision
1 Good 25,470,463
2 Restructured / Rescheduled 8,591,508
3 Substandard 6,579,526
4 Doubtful (72,657,678)
5 Loss 191,933,047
Total 159,916,865
Segregation of investment portfolio

Amount in Rs.
S.N. Investment category Current Year
1 Held for trading -
2 Held to maturity 3,139,690,390
3 Available for sale 24,935,500
Total 3,164,625,890
92

93

Branches
94
95

ATM Locations
Inside Kathmandu Valley
Putalisadak ATM I, II & III Budhanilkantha ATM
Kumari Bank Limited Kumari Bank Limited
New Road ATM Old Baneshwor ATM
Kumari Bank Limited Kumari Bank Limited
New Baneshwor ATM Kumaripati ATM
Royal Thai Restaurant premise Kumari Bank Limited
Ratna Park ATM Naxal ATM
Nepal Electricity Authority Building Opposite Police Head Quarter
Thamel ATM Lazimpat ATM
Fire Club Building Big Mart Building
Kantipur Mall ATM Jhamsikhel ATM
Kumari Bank Limited 8 Degrees Fine Dine & Venues
Koteshwor ATM Mangal Bazar ATM
Kumari Bank Limited Yala Guest House Premise, Patan Durbar Square,
(Near Honacha)
Durbarmarg ATM
Kumari Bank Limited Balkhu ATM
Balkhu Chowk
Chuchhepati ATM
Kumari Bank Limited Kalanki ATM
Millennium House, Near Kalanki Chowk
Outside Kathmandu Valley

Bhairahawa ATM Urlabari ATM
Kumari Bank Limited, Narayan Path Kumari Bank Limited, Morang
Pokhara ATM Butwal ATM
Chipledhunga Infront of Kumari Bank Limited
Ram Mandir Line
Pokhara ATM II
Lakeside, Opposite to Lalupate Marga Nepalgunj ATM
Surkhet Road, Dhambhoji
Jhapa ATM
Kumari Bank Limited, Birtamode Dhangadi ATM
Ratopul, Dhangadi, Kailali
Biratnagar ATM
Kumari Bank Limited, Goshwara Road, Morang Surkhet ATM
Byapaar Sangh Building Birendra Nagar, Surkhet
Itahari ATM Damauli ATM
Kumari Bank Limited, Pathivara Market, Dharan Kumari Bank Limited, Damauli-2
Road
Sauraha ATM
Baglung ATM Bacchauli-2
Kumari Bank Limited, Mahendra Path
Salyan ATM
Narayangadh ATM Kumari Bank Limited, Khalanga
Kumari Bank Limited, Pulchowk
Tulsipur ATM
Birgunj ATM I B.P. Chowk, Tulsipur, Dang
Kumari Bank Limited, Adarsha Nagar, Parsa
Kawasoti ATM
Birgunj ATM II Kumari Bank Limited, Sabhapati Chowk
National Medical College
NOTE

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Board of Directors’ Report

For Fourteenth Annual General Meeting

1. A holistic view of the transactions in the past years

Table 1: Financial look at the bank’s past 5 years’ performance

*Paid-up Capital of FY 2070/71 includes Bonus Share.

Kumari Bank Annual Report 2013/14

2. Reviewing national/ international economy:

3. Review of the Bank’s operations in FY 2070/71:

Kumari Bank Annual Report 2013/14

Kumari Bank Annual Report 2013/14

*On the basis of Accruals against Loans.

Kumari Bank Annual Report 2013/14

Kumari Bank Annual Report 2013/14

Noor Pratap J.B. Rana Prof. Dr. Rajan Bahadur Paudel

Date: 26th Ashwin 2071

Bishwa Mani Regmi, Head- Retail Ishor Gurung, Head - SME

Assets Schedule Current Year (Rs.) Previous Year (Rs.)

Contingent Liabilities Schedule 4.17

Schedules 4.1 to 4.17 form an integral part of the Balance Sheet.

Uday K Upadhyaya Noor Pratap JB Rana Santosh Kumar Lama

As per our report of even date

CA. Rajnish Dahal

Kumari Bank Annual Report 2013/14

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

Uday K Upadhyaya Noor Pratap JB Rana Santosh Kumar Lama

As per our report of even date

CA. Rajnish Dahal

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

Uday K Upadhyaya Noor Pratap JB Rana Santosh Kumar Lama

As per our report of even date

CA. Rajnish Dahal

Kumari Bank Annual Report 2013/14

Capital Exchange Other

Kumari Bank Annual Report 2013/14

As per our report of even date

CA. Rajnish Dahal

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

Kumari Bank Annual Report 2013/14

KUMARI BANK LIMITED

LIST OF SHAREHOLDERS HOLDING SHARE CAPITAL OF 0.5% OR MORE As at

Current Year Last Year

Kumari Bank Annual Report 2013/14

KUMARI BANK LIMITED

KUMARI BANK LIMITED

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

1. ……….% Bond/Debentures of Rs……..…each - -

Kumari Bank Annual Report 2013/14

KUMARI BANK LIMITED

Kumari Bank Annual Report 2013/14

KUMARI BANK LIMITED

KUMARI BANK LIMITED

KUMARI BANK LIMITED

KUMARI BANK LIMITED

Local Foreign Currency in Rupee equivalent Current Year Previous

Kumari Bank Annual Report 2013/14

KUMARI BANK LIMITED

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

KUMARI BANK LIMITED