Annual Report For Eng (18-19

NOTICE OF
22ND ANNUAL GENERAL MEETING
As decided by the 420th Board of Directors meeting held on September 4, 2019, 22nd Annual General Meeting (AGM) of the
Bank will be held on following date, place, and time:
Date, Time, and Place of Meeting
Date : September 27, 2019 (2076 Ashwin 10)
Time : 09:00 AM
Place : Army Officer Club, Bhadrakali, Kathmandu
Following agendas will be discussed at the Annual General Meeting:
Ordinary Resolution
1. To approve Director’s Reports of FY 2018/19.
2. To approve the Balance Sheet as of July 16, 2019, Profit and Loss Account, and Cash Flow Statement of the year ended
thereon, along with Auditor’s Report after deliberation.
3. To approve the Consolidated Financial Statement that includes the Financial Statement of FY 2018/19 of the Bank and
Bank’s subsidiary companies NIC ASIA Laghubitta Bittiya Sanstha Limited and NIC ASIA Capital Limited after deliberation.
4. To appoint auditor for FY 2019/20 (2076/77) and to fix the auditor’s remuneration as per the recommendation of Audit
Committee. (Present auditor M/s. TR Upadhya & Co., Chartered Accountant are not eligible for re-appointment)
5. To approve allocation of cash dividend at the rate of 11.0526% of paid up capital for FY 2018/19 equivalent to NPR
976,414,751 (NPR nine hundred seventy six million four hundred fourteen thousand seven hundred fifty one) (including
tax on dividend) as proposed by the Board.
Special Resolution
1. To approve allocation of bonus share at the rate of 10% of paid up capital for FY 2018/19 equivalent to NPR 883,422,870
(NPR eight hundred eighty three million four hundred twenty two thousand eight hundred seventy) as proposed by the
Board.
2. To approve increment of authorized capital of the Bank to NPR 9,750,000,000 (NPR nine billion seven hundred fifty
million) from NPR 8,840,000,000 (NPR eight billion eight hundred forty million), increment of issue capital to NPR
9,717,651,568 (NPR nine billion seven hundred seventeen million six hundred fifty one thousand five hundred sixty
eight) from NPR 8,834,228,698 (NPR eight billion eight hundred thirty four million two hundred twenty eight thousand
six hundred ninety eight) and increment of paid up capital to NPR 9,717,651,568 (NPR nine billion seven hundred
seventeen million six hundred fifty one thousand five hundred sixty eight) from NPR 8,834,228,698 (NPR eight billion
eight hundred thirty four million two hundred twenty eight thousand six hundred ninety eight).
3. To amend Memorandum of Association (MOA) and Article of Association (AOA) as per contemporary scenario.
4. Delegation of authority to the Board of Directors or the representative appointed by the Board of Directors for making
necessary adjustments in the MOA and AOA of the Bank in case any instructions are received from the approving
authority during approval of amendments of the MOA and AOA.
5. Delegation of authority to the Board of Directors for acquisition of other banks and financial institutions and to carry
out the entire task necessary for such acquisition.
By Order,
Deepen Karki
Company Secretary
ANNUAL REPORT 2018/19 1

VISION
To ensure creation of optimum
values for all the stakeholders.
MISSION
To be a bank of first choice for all
the stakeholders.
STRATEGIC EMPLOYEE CUSTOMER

FIRST CENTRIC
OBJECTIVES
2 ANNUAL REPORT 2018/19

CORE VALUES
Meritocracy : NIC ASIA adopts a
system where candidates are chosen
on the basis of their merits. Jobs,
rewards, etc. are distributed according
to skills and effort.
Transparency : We conduct our

business and financial activities in
an openway without secrets so that
people can trust its fairness and
honesty.
Professionalism : We build the

competence and skill expected of a
professional.
Team Spirit : We NIC ASIAN have the

feeling of pride and loyalty that exists
among the members of a team and that
makes us want our team to do well or
be the best.
Service Excellance : We drive a

DIGITAL transformational journey towards
SUSTAINABLE service excellance together ensuring
FIRST
BANK BANKING delivery of guranteed customer service
standard as a first responsibility.

CONTENTS MANAGEMENT
DISCUSSIONS AND
ANALYSIS
2.1 Financial Highlights 90
2.2 Vertical and Horizontal Analysis 98
2.3 Business Values 100
2.4 Future Prospects and Strategies 103
Financial Highlights 06
2.5 Human Capital and Human Resource Accounting 108
Non Financial Highlights 16
2.6 Stakeholder Anaylysis 113
2.7 Economic Outlook 118
2.8 Business Enviroment Analysis 120
2.9 Stock Price Statistics 124
2.10 Experience Transformation 125
2.11 Experience Transformation Strategy 130
2.12 Investors’ Relation 133
BRIEF ABOUT
NIC ASIA BANK
1.1 NIC ASIA in FY 2018-19 20
1.2 Milestone of NIC ASIA Bank 24
1.3 Profiles of the Directors of the Board 26
1.4 Message from the Chairman 31 CORPORATE
1.5 Message from the CEO 37
GOVERNANCE
1.6 Message from the CFO 39
1.7 DNA Oversight Committee 41 3.1 Shareholding Structure 136
1.8 Code of Conduct and Guiding Principles 43 3.2 Board Committees and Management Committee 137
1.9 Group Structure 46 3.3 History of AGM 142
1.10 Organizational Structure 47 3.4 Corporate Governance 144
1.11 Corporate Profile 57 3.5 Director’s Report 154
1.12 Subsidiaries of NIC ASIA Bank 59 3.6 Audit Committee 172
1.13 Business Division of NIC ASIA Bank 63 3.7 Risk Management Committee 175
1.14 Products and Services 70 3.8 Karmachari Sewa Suvidha Samiti 177
1.15 Product Portfolio 78 3.9 Sampati Sudhikaran Niwaran Samiti (Assets/
1.16 Banking Industry Indicator 80 Money Laundering Prevention Committee) 179
1.17 21st AGM in Pictures 82 3.10 Anti Money Laundering and

Countering Financial Terrorism Report 181
1.18 Awards and Recognitions 84
3.11 Speaking Up and Whistle Blow Mechanism 183
1.19 Credit Rating 87
3.12 Statement of Directors Responsibility 186
3.13 Director’s Statement on
Internal Control and Its Adequacy 187
3.14 Responsibility Statement of CEO and CFO 188
3.15 Integrated Reporting 189
RISK NIC ASIA
MANAGEMENT LAGHUBITTA
4.1 Statement of Risk Management 192 BITTIYA
4.2 Statement of Capital Adequacy 203 SANSTHA
4.3 Statement on Non Performing
Loan Management 206 7.1 Directors’ Report 316
4.4 Report on Going Concern 208 7.2 Independent Auditor’s Report 324
7.3 Financial Statement 326
NIC ASIA
SUSTAINABILITY CAPITAL
5.1 Sustainability Banking 212
8.1 Directors’ Report 356
5.2 Corporate Social Responsibility 213
8.2 Independent Auditor’s Report 363
5.3 Value Added Statements 216
5.4 Statement on Contribution to Economy 220
NETWORK OF
NIC ASIA BANK
AUDITED FINANCIAL 9.1 Bank’s Network 384
STATEMENT OF 9.2 Subsidiaries 386
NIC ASIA BANK 9.3 Business Partners 387
6.1 Independent Auditor’s Report 224


FINANCIAL
HIGHLIGHTS
FISCAL YEAR 2014-15 - 2018-19
TOTAL ASSETS
(NPR Million)
217,697
170,943
99,274
80,457
60,519
2014/15 2015/16 2016/17 2017/18 2018/19
TOTAL LOANS AND ADVANCES

(NPR Million)
150,108
120,667
72,562
59,499
43,330
2014/15 2015/16 2016/17 2017/18 2018/19

TOTAL DEPOSITS
(NPR Million)
180,575
151,219
87,678
69,488
53,477
2014/15 2015/16 2016/17 2017/18 2018/19
TOTAL NUMBER OF SHARES

(Number in Millions)
88
80
67
46
27
2014/15 2015/16 2016/17 2017/18 2018/19

SHAREHOLDERS’ FUND
(NPR Million)
14,936
11,670
10,116
7,383
5,499
2014/15 2015/16 2016/17 2017/18 2018/19
TOTAL OPERATING INCOME

(NPR Million)
9,506
5,358
3,434
2,613
2,102
2014/15 2015/16 2016/17 2017/18 2018/19

NET PROFIT
(NPR Million)
3,023
1,473
1,335
1,067
680
2014/15 2015/16 2016/17 2017/18 2018/19
EARNING PER SHARE

(NPR)
34.22
28.31
25.59
23.06
16.62
2014/15 2015/16 2016/17 2017/18 2018/19

PRICE EARNING (PE) RATIO
28.19
24.11
19.3 19.01
13.09
2014/15 2015/16 2016/17 2017/18 2018/19
CAPITAL ADEQUACY RATIO (%)
13.83
13.32
12.49 12.44 12.24
2014/15 2015/16 2016/17 2017/18 2018/19

RETURN ON ASSETS (%)
1.64
1.56
1.51
1.21
0.97
2014/15 2015/16 2016/17 2017/18 2018/19
RETURN ON EQUITY (%)

22.73
16.84
16.5
13.05
12.09
2014/15 2015/16 2016/17 2017/18 2018/19

BOOK NET WORTH
(NPR per Share)
207
169
161
151
145
2014/15 2015/16 2016/17 2017/18 2018/19
MARKET PRICE PER SHARE

(NPR)
798
617
445 448
316
2014/15 2015/16 2016/17 2017/18 2018/19

AMOUNT EARNED - FY 2018/19
(NPR Million)
Interest Income
87.73% NPR. 19,346
Non Operating Income

0.14%
NPR. 31 Fees and Commission
10.20% NPR. 2,249
TOTAL AMOUNT
NRP. 22,051
1.58% Net Trading Income

Other Operating Income
0.34% NPR. 394
NPR. 76
AMOUNT SPENT AND RETAINED - FY 2018/19

(NPR Million)
Interest Expense
56.17%
NPR. 12,386
Non Operating Expense Profit for the Period

NPR. 104 0.47% 13.71% NPR. 3,023
Fees and
Commission Expense 0.58%
NPR. 128
Personnel Expenses
TOTAL AMOUNT 11.23% NPR. 2,477
NPR. 22,051
Depreciation &
Amotisation 0.93%
NPR. 204
7.77% Other Operating Expense
NPR. 1,713
Impairment for
Loans and Other Loss 2.72%
NPR. 599 6.43% Income Tax Expense
NPR. 1,417

14
COMPOSITION OF ASSETS IN BALANCE SHEET - FY 2018/19
(NPR Million)
ANNUAL REPORT 2018/19

Loans and Advances
to Customers NPR. 142,574
65.49%
Other Trading Assets NPR. 7
0%
Goodwill and
Intangible Assets NPR. 110 0.05%
Cash and Cash
9.29% Equivalent NPR. 20,215
Investment Property
NPR. 276 0.13%
Placement with BFIs

0.18%
NPR. 384
TOTAL ASSETS
Investment
Investment in Subsidiaries NRP 217,697 8.34% Securities NPR. 18,153
NPR. 1,205 0.55%
Other Assets 0.99%

NPR. 2,162
Due from NRB
7.39% NPR. 16,098
Property and 1.19%
Equipment NPR. 2,584
Derivative Fis
3.18% 3.22% NPR. 7,006
Loans and Advances
to BFIs NPR. 6,923
COMPOSITION OF EQUITY AND LIABILITIES IN BALANCE SHEET - FY 2018/19
(NPR Million)
Deposits from
Customers NPR. 176,821
81.22%
Deferred Tax Liabilities

0.08%
NPR. 178
Current Tax Liabilities Share Capital

0.11% 4.06% NPR. 8,834
NPR. 243
Due to NRB
0.14%
NPR. 314
TOTAL EQUITY AND
LIABILITIES
NPR. 217,697 Due to BFIs
Other Liabilities 3.92% NPR. 8,536
0.94%
NPR. 2,046
Retained Earning
NPR. 2,113 0.97%
Deb securities issued
3.54% NPR. 7,710
Reserves
NPR. 3,989 1.83%
3.18%
Derivative FIs
NPR. 6,913

15
NON-FINANCIAL
HIGHLIGHTS
Total Number of
Branches Total ATMS Extension Counters
292 302 47
Total Number of Number of Number of

Branchless Banking Deposit Accounts Employees
41 1,604,718 3,472
Awards
ICAN - Best
Number of
Training Programs
Presented Annual
Report (BPA)
1,112 Awards, 2018

Participant in
CSR Contribution
Training Programs
NPR 11.7Million 38,447
Credit Ratings
Subsidiaries
CARE NP-A(Is) by
CARE Ratings Nepal Limited NIC ASIA Capital Ltd
[ICRA NP-IR] A- NIC ASIA Laghubitta Bittiya

by ICRA Nepal Limited Sanstha Ltd
System-Core Number of Number of

Banking Debit Card Credit Card
Finacle
10.0.18 597,746 8,910
Number of Number of
Internet Banking Mobile Banking
91,739 831,063
BRIEF ABOUT
NIC ASIA
BANK
1.1 NIC ASIA in FY 2018-19....................................................20
1.2 Milestone of NIC ASIA Bank.........................................24
1.3 Profiles of the Directors of the Board.....................26
1.4 Message from the Chairman.........................................31
1.5 Message from the CEO................................................... 37
1.6 Message from the CFO...................................................39
1.7 DNA Oversight Committee............................................41
1.8 Code of Conduct and Guiding Principles................43
1.9 Group Structure..................................................................46
1.10 Organizational Structure...............................................47
1.11 Corporate Profile................................................................ 57
1.12 Subsidiaries of NIC ASIA Bank.....................................59
1.13 Business Division of NIC ASIA Bank.........................63
1.14 Products and Services....................................................70
1.15 Product Portfolio...............................................................78
1.16 Banking Industry Indicator........................................... 80
1.17 21st AGM in Pictures..........................................................82
1.18 Awards and Recognitions............................................ 84
1.19 Credit Rating........................................................................87

Brief About NIC Management Corporate Risk Sustainability Audited Financial Statement NIC ASIA Laghubitta NIC ASIA Network of
ASIA Bank Discussions & Analysis Governance Management of NIC ASIA Bank Bittiya Sanstha Capital NIC ASIA Bank
1.1 NIC ASIA IN FY 2018-19

NIC ASIA BANK LIMITED
NIC ASIA Bank Ltd is one of the largest banks of Nepal with 3,472 employees, 292 branches and 302 ATMs. NIC ASIA
Bank has connected the remotest part to financial services and have made strong foothold in all the major financial
centers of the country. Having made a separate “EXPERIENCE ENRICHMENT DEPARTMENT”, the bank is committed to
provide efficient service to its customers branding itself as the most trustworthy bank of the nation. The Bank is one of
the largest private sector banks in terms of net profit, savings & deposits, lending, balance sheet size, capital base and
customer base.
During the review year, the Bank’s deposit collection was NPR Number of branches in the beginning of FY 2018-19 was 231
180.58 billion. Deposit collection increased by 19% of the NIC and in the end of the FY, it was 292 also the Bank’s ATMs
ASIA Bank, while the industry’s average growth rate was 16%. increased by 82 to reach 302. While the Bank was able to add
The Bank’s outstanding loans was NPR 150.108 billion during 525,039 new saving accounts to reach 1,604,718 as on end of
the FY 2018-19, while it was NPR 120.667 billion during FY FY 2018-19.
2017-18. The Bank’s total investment was NPR 18.15 billion as
on end of FY 2018-19, the figure was NPR 14.13 billion last year. The Bank has proposed 21.0526% (10% bonus share and
11.0526% cash) dividend for the year 2018-19. Last year, the
In the FY 2018-19, NIC ASIA Bank Ltd had operational profit of Bank had distributed 10.526% dividend to the shareholders.
NPR 4.51 billion, while in FY 2017-18, it was NPR 1.92 billion. The
Bank earned net profit of NPR 3.02 billion during FY 2018-19,
which is increment of 126% compared to last year. Earning per
share increased from NPR 16.62 to 34.22 and Return on Equity
increased to 22.73% from 12.09%.
Deposits (NPR millions) Loans (NPR millions)

(excluding staff loans)
180,575 150,108
151,219 120,667
2017-18 2018-19 2017-18 2018-19

Operating Profit (NPR millions) Net Profit (NPR millions)
4,514
3,023
1,918
1,335
2017-18 2018-19 2017-18 2018-19
Earning Per Share (NPR) 34.22 Return on Equity (Percentage)
28.31
22.73
16.5
23.06 16.84
12.09
16.62
2015/16 2016/17 2017/18 2018/19 2015/16 2016/17 2017/18 2018/19
Branches (in number) ATMs (in number)
292 302
231
220
2017-18 2018-19 2017-18 2018-19

NIC ASIA LAGHUBITTA BITTIYA SANSTHA organization is in process of issuing shares to public in year
LIMITED 2019-20. During the first year of operation, the organization
had 28 branches in 14 districts. In 2018/19, 33 new branches
NIC ASIA Laghubitta Bittiya Sanstha Limited was incorporated were opened which expanded the organization’s operation
as a public limited company, registration no. 171621/074/075, over 19 districts. The organization during the year 2018-19 has
on 2074.4.10 BS, at Company Registrar Office of Government provided microfinance service through its 61 branches to 2,395
of Nepal under Company Act 2063. The company is a “D” Class groups consisting of 24,392 members. During FY 2018-19, total
financial institutions (micro-credit development bank) license loans and advances of NPR 5.49 billion was disbursed out of
no. NRB “Gha” 61/074/75 on 2074.8.5 by Nepal Rastra Bank which NPR 1 billion was settled resulting outstanding loan
(NRB) under the Bank and Financial Institution Act, 2063. The balance as on 16 July 2019 to be NPR 4.49 billion. Total deposit
Bittiya Sanstha commenced its financial transactions from balance of 24,300 members as on 16 July 2019 amounts to NPR
2074.9.5 BS. The head office of the company is located at Bheri 570 million. There has been increase in number of staffs along
Municipality, ward no. 4, Jajarkot District, Nepal, and its service with increased transactions of institution. As on 16 July 2019,
area is nationwide. 205 staffs were employed by institution out of which 80 staffs
(39%) were female.
The organization earned operating profit of NPR 172,177 and
net profit of NPR 110,309 during the review year 2018-19. The
Members (in number) Group (in number)

24,392 2,395
6,437 668
2017-18 2018-19 2017-18 2018-19
No. of Branches No. of Districts Coverage
61 19
14
28
2017-18 2018-19 2017-18 2018-19

NIC ASIA Capital earned NPR 69.4 million revenue, NPR 62.2
million operating profit and net profit of NPR 21.4 million during
the FY 2018/19 with earning per share of NPR 10.69. The capital
has provided issue management and underwriting services to
eight companies till date including a mutual fund for public
Female issue, right share issue and auction sale of unsubscribed right
39% Employees Male shares. NIC ASIA Capital is operating first scheme of NIC ASIA
61% growth fund worth NPR 835.2 million, which is under NIC ASIA
Mutual Fund. The company was able to maintain grow Net
Asset Value (NAV) of growth fund at 11.18 despite of decreasing
trend of secondary market. The company has been providing
share registrar service to six companies including a mutual
fund. During the FY 2018/19, the NIC ASIA Capital provided
portfolio management services to 152 customers amounting to
NPR 377.4 million. NIC ASIA Capital was successful in opening
NIC ASIA CAPITAL LIMITED 168,045 DEMAT accounts till FY 2018/19, which weighs to
10.85% of total DEMAT accounts opened in the market.
The NIC ASIA Capital was registered on 15th May, 2016 with
Similarly, the capital has been able to secured second position
the office of company registrar, Nepal Government as per
in terms of total DEMAT accounts out of total 71 depository
the provisions of the Company Act. The capital has obtained
participants/merchant bankers.
the license to carry out merchant banking activities on 19th
February, 2017 as per the Securities Businessperson (Merchant Position of NIC ASIA Capital among 31 Merchant Bankers
Banker) Regulations, 2008 and fully commenced its merchant S.N Particulars Overall Position
banking activities from 5th March, 2017. NIC ASIA Capital 1 Depository Participant 2nd
Limited provides services such as Issue Management and
2 Share Register Service 9th
Underwriting, Registrar to Share, Depositary Participant, and
3 Portfolio Management Service 3rd
Portfolio Management. The Capital aims to provide innovative
and best investment banking solutions to its clients.
DEMAT opened by
other DPs
89.15% DEMAT
ACCOUNTS
NIC ASIA Capital Market
Share
10.85 %

1.2 MILESTONE OF NIC ASIA BANK

2018/19 YEAR 21
• Nepal’s No. 1 Bank with loan portfolio of NPR 150.10 billion

• Nepal’s No. 1 Private Sector bank with deposits of NPR 180.5
billion.
• Net Profit growth: 126%
• Total Deposit Account: 1,889,743 (Highest market share in
private sector bank with 8.24% of total deposit account)
• Best Presentation Award for Annual Report from ICAN
• SAFA BPA Certificate of Merit Award
• 5 years Strategy 2020 achieved within 4 year and formulation of
“Vision 18-22”.
2012/13 YEAR 15 2013/14 YEAR 16
• Awarded “Bank of the Year 2013-Nepal” by • Introduction of NIC ASIA Bank Home
the world renowned financial publication The Banking Service, establishment of Call
Banker-The Financial Times, London Centre for telemarketing and Service
• Initiated unified operation after end of Excellence Unit, development of izone2
merger process of NIC Bank and Bank of as international level intranet platform for
Asia Nepal bank staffs
• Deposit Growth: 80%
• Risk Assets growth: 85%
• Increase in Paid up Capital: 76%
2011/12 YEAR 14 2009/10 YEAR 12
• Memorandum of Understanding • Awarded ISO 9001:2008 certified

Signed between NIC Bank and Bank for its Quality Management System
of Asia Nepal for the purpose of by United Registrar System (URS)
merger Ltd.
• Introduction of Visa debit card,
internet banking, mobile banking,
PSTN bill payment and utility bill
payment
1998/99 YEAR 1 2003/04 YEAR 6 2004/05 YEAR 7
• Establishment of NIC Bank Ltd. • First bank in Nepal to introduce • First Bank in Nepal to offer lowest
• First commercial bank in Nepal to Savings Account Bundled with life priced home loan schemes “Ghar
be capitalized at NPR 500 million insurance by launching “NIC Life Subidha”.
Savings Account” • Operating Profit Growth: 34%
• No. of Branches: 6 • Net Profit growth: 67%
• Loans and advances: 3,743.1 million • Share Price Growth: 68%
• Deposits and Borrowings: NPR 5,215.8
million
• Operating Profit Growth: 50%
• Deposit Growth: 64%
• Risk Assets growth: 46%

2017/18 YEAR 20 2016/17 YEAR 19
• Formal operation of subsidiary • Formal operation of subsidiary company

company NIC ASIA Laghubitta Bittiya NIC ASIA Capital Ltd.
Sanstha. • Introduction of NIC ASIA remit and made
• Total No. of Branches: 231 including arrangement for remittance transactions
112 new branches through 4,198 agents nationwide
• Deposit Growth: 72% • Total No. of Branches: 119 including 53
• Risk Assets growth: 67% new branches
2014/15 YEAR 17 2015/16 YEAR 18
• Formulation of 5 years strategy paper • Net Profit growth: 57%

“Strategy 2020” • Deposit Growth: 30%
• Donated NPR 2.551 million as • Risk Assets growth: 37%
financial assistance for victims of • Increase in paid up capital: 56%
earthquake dated 25-Apr-2015 to
Prime Minister relief fund
2008/09 YEAR 11 2007/08 YEAR 10
• Introduced Domestic Remittance • Awarded “Bank of the Year 2007-Nepal” by the

whereby customers could remit funds world renowned financial publication of The
from all branches of the Bank and Financial Times, U.K. – The Banker
beneficiaries could collect funds • First Bank to offer bullion trading in country by
from almost 350 locations throughout directly importing from internationally recognized
Nepal. mints
• First bank to introduce high-interest earning
Fixed deposit scheme with the ease of Saving
Account “NIC Super Deposit”
2005/06 YEAR 8 2006/07 YEAR 9
• Loans and advances: NPR 6,902.1 • First commercial bank in Nepal to be

million awarded ISO 9001:2000 certified for its
• Deposits and Borrowings: NPR Quality Management System by United
9,223.7 million Registrar System (URS) Ltd.
• Deposit Growth: 40% • First Bank in Nepal to be provided a line of
• Risk Assets growth: 41% credit by International Finance Corporation
• Share Price Growth: 36% (IFC), an arm of World Bank Group under its
Global Trade Finance Program enabling our
Letters of Credit to be accepted/ confirmed
by more than 200 banks worldwide
• Share Price Growth: 92%

1.3 PROFILES OF THE DIRECTORS OF THE BOARD
FRONT LEFT TO RIGHT

Mr. Ram Chandra Sanghai Mr. Trilok Chand Agrawal Mr. Tulsi Ram Agrawal
Director Director Chairman
BACK LEFT TO RIGHT

Mr. Rajendra Prasad Aryal Mr. Binod Kumar Pyakurel Mr. Ganesh Man Shrestha Mr. Nikunj Agrawal
Director Director Independent Director Director

Mr. Trilok Chand Agrawal
Mr. Ram Chandra Sanghai
Member, General Shareholders'
Member, Promoters' Group
Group (Representative-Asian
Distributors Pvt. Ltd.) Mr. Sanghai has 30 years of
Mr. Tulsi Ram Agrawal experience in promoting and
Mr. Trilok Chand Agrawal has
Chairman managing various industrial
more than 36 years of experience
companies.
in industries, export-import,
Mr. Tulsi Ram Agrawal hailing from commerce and banking sector.
POSITION IN COMMITTEE
Biratnagar is the prominent name Mr. Agrawal was born in 1949
and joined business on 1974 and Karmachari Sewa Subhidha
in business society of Nepal.
during last four decades he has Samiti
Born in 1951, Mr. Agrawal has established himself as a very Coordinator
been associated with NIC ASIA successful business person. Sampati Sudhikaran
Bank since its foundation. Mr. POSITION IN COMMITTEE Niwaran Samiti
Agrawal is a Commerce graduate Member
Land Acquisition and
and is involved in trade, industry, Land Acquisition and
Construction sub-committee
banking and insurance since last Coordinator Member
30 years. Mr. Agrawal is an Ex- Karmachari Sewa Subhidha
Honorary Consul of the Republic Samiti
Member
of Maldives.
Audit Committee
Member

Mr. Rajendra Prasad Aryal Mr. Ganesh Man Shrestha

Member, General Mr. Binod Kumar Pyakurel
Member, Independent Director
Shareholders' Group Member, General
Shareholders' Group Mr. Ganesh Man Shrestha
Mr. Rajendra Aryal has serves NIC ASIA Bank as an
remarkable presence in Mr. Binod Kumar Pyakurel Independent Director. Mr.
advertising sector and has 32 years of banking Shrestha has M.A in Economics
held various positions in experience. He worked in and Bachelor in Law from
commerce and industrial Nepal Bank Limited for three Tribhuvan University, Kirtipur.
association. Mr. Aryal has 25 decades before retiring at He has remarkable banking
years of experience in audio/ Managerial Level. He has 5 experience of 32 years in Nepal
video, mass communication, years experience in Foreign Bank Ltd and Rastriya Baniya
media publicity and product Management Team of Nepal Bank Limited.
production. Bank Limited. POSITION IN COMMITTEE
POSITION IN COMMITTEE Audit Committee
POSITION IN COMMITTEE
Sampati Sudhikaran Niwaran Coordinator
Samiti Risk Management Risk Management Committee
Coordinator Committee Member
Coordinator
Risk Management Committee Sampati Sudhikaran Niwaran
Member Sampati Sudhikaran Samiti
Niwaran Samiti Member
Member
Land Acquisition and
Member

Mr. Nikunj Agrawal
Member, Promoters' Group
Mr. Nikunj Agrawal is a young business personality born in 1983. Mr. Agrawal
completed his A Level study from Bellerbys College, London and B.B.A fron
University of Kent, Canterbury U.K. He completed his Masters from Regents
College, London, U.K.
Date of appointment:
September 12, 2019
BOARD MEETINGS
Name of the Director No. of meeting attended Meeting Allowance (NPR)
Tulsi Ram Agrawal, Chairman 54/54 844,000
Jagdish Prasad Agrawal, Director 51/54 660,000
Trilok Chand Agrawal, Director 53/54 684,000
Ram Chandra Sanghai, Director 41/54 504,000
Rajendra Prasad Aryal, Director 44/54 556,000
Binod Kumar Pyakurel, Director 52/54 672,000
Ganesh Man Shrestha, Independent Director 50/54 696,000
NON-EXECUTIVE DIRECTORS
No directors of the Bank hold any executive position. All the directors are non-executive directors. As per the article of association
of the Bank no director can be appointed as Chief Executive Officer. Hence, the Chairman of the Board and Chief Executive Officer
of the Bank are two separate persons.

The Bank has declared

Year 2019-20 as “YEAR
OF EXPERIENCE
TRANSFORMATION” and
has firm determination in its
commitment. NIC ASIA Bank
believes in “CUSTOMER FIRST”
motto keeping customers
in its priority for experience
enrichment

1.4 MESSAGE FROM THE CHAIRMAN
I am delighted to welcome the respected shareholders, representatives from regulatory
institutions, statutory auditors, legal advisors, staff of the NIC ASIA Bank and the entire
stakeholders on behalf of the Board of Directors for your remarkable presence in this 22nd
Annual General Meeting of the Bank.
“One achievement leads to another the VISION 18-22 is heading towards

achievement” with this cornerstone right direction.
the Bank is able to achieve remarkable
success in long term strategy, business VISION 18-22 shall provide greater
performance, technological reforms, assistance in long run business
shareholders’ value and social expansion. We are motivated and
responsibilities. I am overwhelmed devoted to achieve VISION 18-22 which
to be present here as Chairman of will increase shareholders’ value and
Board as the Bank has performed wealth.
exceptionally well in the review period.
BUSINESS ACHIEVEMENT: OUR
VISION 18-22 PRIDE
Long term vision, efficient management, The Bank has built a DNA; motivated
impactful infrastructure and intelligent to find best of the best and passionate
investment are the pillars of successful employees for extraordinary
business. The Bank has embedded achievements. The Bank endeavors to
these qualities in its foundation. I am accomplish more than just the stated
delighted to inform that the Bank has goals. The biggest competitor rather
achieved the goals of Strategy 2020 lies within us than in the market, so it
within four years. The Bank has made propels us everyday to be better than
astonishing performance in risk assets, yesterday.
and, saving deposit, revenue and profit.
The Bank has made an exceptional
“Consistent action brings consistent performance in term of credit, saving
success”. Stepping on this motto, the deposit, profit and many other business
Bank has been able to achieve its five factors during the review period. I am
year long integrated strategy plan- thrilled at the Bank’s accomplishment
STRATEGY 2020 within four years, and very proud to present following
reflecting the proficiency of the Bank. facts:
With the achievement of Strategy
1. Nepal’s No.1 Bank for loan
2020, the Bank formulated a long
outstanding of NPR 150.10 billion
term strategy with higher ambitions—
as on FY 2018-19.
VISION 18-22 for FY 2018-19 to FY 2021-
22 for achieving greater heights. With 2. Nepal’s No. 1 Bank for increment
TULSI RAM AGRAWAL the splendid performance of Bank in FY in net loan growth by NPR 29.44
CHAIRMAN 2018-19, I can tell you with pride that billion as on FY 2018-19

3. Nepal’s No. 1 Private Sector Bank 17. Nepal’s No. 1 Bank in increment in plans serve senior citizens, women,
for mobilisation of deposit of NPR net profit by NPR 1.69 billion for FY employees, entrepreneurs, children,
180.50 billion as on FY 2018-19 2018-19 students, people in foreign employment
as well people from various regions
4. Nepal’s No. 1 Bank for net increment 18. Nepal’s No. 1 Private Sector Bank in
and societies providing them insurance
in deposit mobilisation by NPR 29.40 return in equity with 22.73% for as
facilities, mobile banking, internet
billion as on FY 2018-19 on FY 2018-19
banking, debit card and other attractive
5. Nepal’s No. 1 Private Sector Bank 19. Nepal’s No. 1 Bank in expansion of facilities and heavy discounts in
for mobilisation of saving deposits branch to 292, 302 ATMs and 47 transaction fees. Like a friend in journey,
outstanding of NPR 58.40 billion as extension counters as on FY 2018-19 the Bank is gratified to provide security
on FY 2018-19 to the families.
20. No. 1 Bank in Kathmandu Valley
6. Nepal’s No. 1 Bank for net increment with 61 branch, 141 ATMs and 27 The Bank has provided great assistance
in mobilisation of saving by NPR extension counter. Also No. 1 Bank in Nepal Government's drive for
10.36 billion as on FY 2018-19 in Kathmandu Valley for Banking “SAMRIDHHA NEPAL SUKHI NEPALI”,
Brand. initiating every Nepali to have a bank
7. Nepal’s No. 1 Private Sector Bank for
account. Customers who open account
current and saving account deposit
under “SABAI NEPALIKO BANK KHATA”
of NPR 72.48 billion as on FY 2018-19
are rewarded with Rs. 100 each. We feel
8. Nepal’s No. 1 Private Sector Bank for Bank always proud to be part of such initiation for
net increment in current and saving wellbeing of the people and the nation.
account deposit outstanding of NPR
moves towards the
13.18 billion as on FY 2018-19 direction of our customer For the coming days, the Bank shall
transmute creative and innovative
9. Nepal’s No. 1 Bank for net mobilisation desires and needs, so the
banking facilities in order to mitigate our
of fixed deposit of NPR 13.18 billion in Bank is pleased to introduce customer needs and desires.
FY 2018-19
various “CHAMATKARIK"
10. Nepal’s No. 1 Bank in earning gross MODERN TECHNOLOGY
Products and
interest income of NPR 19.35 billion With changing scenario in technological
for FY 2018-19 Schemes. advancement, the Bank’s future lies on
11. Nepal’s No. 1 Bank in increment in how it copes with those changes. With
earning gross interest income by the adoption of new technologies, the
NPR 5.80 billion for FY 2018-19 Bank can provide banking facilities
CREATIVE BANKING FACILITIES-
anytime and anywhere within minimum
12. Nepal’s No. 1 Bank in increment in
RELISH FOR THE CUSTOMERS
time frame. The Bank is aware of the
earning net interest income by NPR The Bank always strives for achieving technological importance and made
2.75 billion for FY 2018-19 utmost customer desires and needs, the services accessible through various
for which the Bank has introduced tech platforms. The Bank is committed
13. Nepal’s No. 1 Bank in fees and other
various “CHAMATKARIK” Products to make maximum use of technological
operational income with NPR 2.67
and Services. For NIC ASIA Bank, advancement and build a separate
billion for FY 2018-19
the definition of customer is broad champion brand to be “FIRST MODERN
14. Nepal’s No. 1 Bank in increment in which is not just limited to defining TECH BANK”. During the review period,
fees and other operational income customers as borrower or depositor our Bank has achieved its aim to
by NPR 1.43 billion for FY 2018-19 but their families including. The Bank increase digital transaction from 32%
15. Nepal’s No. 1 Bank in increment in has brought “CHAMATKARIK” Products to 50%, which means 50% of our total
gross revenue by NPR 4.15 billion for which aim at befitting our customers’ transactions are conducted via digital
FY 2018-19 families as well. Currently there are four channels.
“CHAMATKARIK” plans for fixed deposit
16. Nepal’s No. 1 Bank in increment in and 15 “CHAMATKARIK” plans for saving Credit card online application processing,
operational profit by NPR 2.60 billion deposit. Total of our 19 “CHAMATKARIK” analytical application, mobile banking
for FY 2018-19

version upgrade, missed call banking TRANSFORMATION” and has firm
service and Chatbot 'Saathi' among other determination in its commitment. NIC
HUMAN RESOURCE
automation services were developed ASIA Bank believes in “Customer First”
and put to use during the review motto keeping customers in its priority Human Resource is the most important
period. To maintain smooth relationship for experience enrichment. Fresh desk, and productive asset and Bank can
with customers, applications such as fresh chat, live chat platform, social achieve its vision, mission and long term
Customer Relationship Management media listening tool, call centre and other strategies only from Human Resource.
Software for helping in business various platform has been exercised to Bank’s success and failure both depends
decision making; Business Analytics resolve queries and create value during upon our human resource, so the
for managing human resource; Human the review period. Bank is always committed towards
Resource Information system, among professional and capacity development
other, are put in test phase and soon will The Bank has taken steps to provide and motivating employees. During the
be brought to operation. every banking facility within stipulated review period, Bank conducted 1,101
time frame. We are hopeful that the national level training and 11 international
The Bank has committed team and fast and convenient service shall levels training which had employee
necessary infrastructure for security bring experience enrichment to our participation of 38,447. Chief Executive
of database and made changes in its customers. Our customer enrichment Officer visited various provincial and
policies for stronger Information Security. plan shall bestow our slogan “BANK PANI regional branches during the review
SATHI PANI, RAMRO PANI HAMRO PANI”. period and conducted 20 professional
Our momentous focus on digital banking
development and motivational program.
has paid off with increment of users in RESPONSIBILTY TOWARDS
The Bank has made a new reward policy,
internet banking, mobile banking and INVESTORS
which we believe will bring the best out
cards by 36%, 38% and 57% respectively.
Foundation of the Bank is set by its of our employees.
During the review period, the bank has
investors and it is the duty
market share of growth in debit card,
of the Bank to honor its
credit card, mobile banking and internet
investors with return. It is
banking users by 32%, 35%, 11% and
well known that the Bank has
35% respectively.
been respectable towards
The Bank is committed in providing its investors with admirable
return. With the return of
AWARDS AND RECOGNITION
services through automated and
digital channels and effectively uses equity of 22.73% during the The bank is able to win various awards and
technological advancement in its review period, NIC ASIA Bank recognition during the review period. For the
activities. is Nepal No. 1 Private Sector
first time in history, the Bank won “ICAN - Best
Bank.
Presented Annual Reports Award 2018” during
EXPERIENCE ENRICHMENT
Though the Bank has the review period. Also, the bank achieved
The Bank is moving forward to make momentous growth in huge success in Branding. In impactful message
paradigm transformation in customer expansion of branch, ATMs delivery and branding sector, Bank won an
experience. The Bank’s primarily focus and extension counters, we award in Best Financials Sector-Campaign
is enriching customer experience in are more proud to deliver Category for “Soch Badlau” advertorial. During
delivery of our services. Price Waterhouse exceptional return to our the review period NIC ASIA Bank was Nepal’s
Cooper, a reputed international shareholders. No. 1 Bank in terms of Banking Brand.
consultant has been appointed to help
us in our customer enrichment journey. We have made provision of
Suggestions from our consultant have 21.0526% (10% bonus share
been already implemented and we have and 11.0526% cash) dividend Currently, Nepal Rastra Bank requires
made noticeable progress in enriching from current year profit and accumulated the Bank to spend 3% of its operational
customer experience. profit for FY 2018-19 and presented cost on employee training and
in General Meeting; I hope you will development. The Bank is making
The Bank has declared Year 2019- overwhelmingly support it. necessary expenditure on employees
20 as “YEAR OF EXPERIENCE

training and development of at least schools, and various programs for clean year, his contribution to Bank will be
3% of operational cost. These training and healthy environment, and assistance acknowledged forever. I, on behalf of
and development has provided great to victims of natural calamities. To the Board and personally would like to
assistance for Bank to achieve No. 1 help pilgrims; donation of bio toilets thank Mr. Jagdish Prasad Agrawal for this
position in various categories. to Pashupati Development Board, devotion and contribution to the success
ambulance to Nepal Police, financial of this Bank. I wish him all the very best
UNIVERSAL BANKING literacy programs for deprived peoples for coming days.
Bank is devoted to provide any financial was carried out by the Bank during the
review period. Under corporate social NIC ASIA Bank has ranked as Nepal’s
needs to people of various region,
responsibility, the Bank has made direct biggest Private Sector bank, thanks
sector and society while paving the
expenditure of NPR 11.7 million during to all the hardworking and assiduous
way towards universal banking. For the
the review period. employees. The Bank has obtained all
cause, associate companies NIC ASIA
its achievement only because of its
Laghubitta Bittiya Sanstha Ltd. and NIC
Likewise, Bank has proudly contributed employees who have toiled their effort
ASIA Capital Ltd. are aiding the Bank.
NPR 3.15 billion to the government in materializing the mission and vision
NIC ASIA Capital Ltd in its fourth year of
exchequer through direct and indirect of this Bank. Therefore, I would like to
operation generated net profit of NPR
tax. acknowledge our employee contribution
21.3 million and distributed 10% dividend
in this historical achievement. My
to the shareholders in FY 2018-19. Keeping Nation’s interest higher than deepest appreciation to Chief Executive
Bank’s interest, the Bank opened 13 Officer, Key Managerial Personnel and all
While NIC ASIA Laghubitta Bittiya
branches in the remote places of 11 the employees holding various positions
Sanstha Ltd. in its second year of
remote districts so that every citizen can helping the Bank achieve higher success
operation expanded to 61 branches and
avail banking facilities. every day.
has distributed loan of NPR 4.5 billion,
collected saving of NPR 571.7 million AWARDS AND RECOGNITION It isn’t an individual effort that Bank
and generated net profit of NPR 110.3
The Bank is able to win various awards has reached this height; co-operation
thousands and stood to be one of the
and recognition during the review of regulatory institutions, trust laid by
best Microfinance of the nation. The
period. For the first time in history, our shareholders, customers’ support,
microfinance is planning to issue shares
the Bank won “ICAN - Best Presented hard work of employees and various
to public in FY 2019-20.
Annual Reports Award, 2018” during the governments and non-government
To help the public with excellent and review period. Also, the Bank achieved institutions’ support has made possible
first in class experience in securities huge success in Branding. In impactful for us to achieve success. I would like
transaction, the Bank shall provide message delivery to the society, the to express deep gratitude on behalf of
service through NIC ASIA Securities Bank bagged an award in Best Financials the Board to every stakeholder and we
Ltd, which is in its initial stage of Sector-Campaign Category for “Soch hope you continue to assist us in future
establishment. Badlau” ideology. During the review as well.
period NIC ASIA Bank was Nepal’s No. 1
These achievements have motivated us Thank You!
Bank in terms of Banking Brand.
towards universal banking.
Finally, at this time of great achievement, Mr. Tulsi Ram Agrawal
CORPORATE SOCIAL I would like to express gratitude to Chairman
RESPONSIBILITY Mr. Jagdish Prasad Agrawal, who has
Business is subset of society. The worked like a guardian of the Bank since
Bank has played a useful role in the its very first day of establishment. I am
functioning of society in diverse way thankful to Mr. Jagdish Prasad Agrawal
such as: forestation, blood donation for being with Bank’s every ascend or
program, parks development, computers descend from the beginning till July 2019.
handover to schools, health camps, He has devoted 22 years of his life to
cultural programs, financial helps to help the Bank reach new heights every

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The Bank achieved

historical achievement
during the review
period as it became
Nepal’s No. 1 Private
Sector Bank with
highest RETURN ON
EQUITY i.e 22.73%

1.5 MESSAGE FROM THE CEO
The review period was marked by ups and downs for entire banking industry. Liquidity crunch which began
after the first quarter continued till the last quarter of the review period that affected the bank’s strategy
of business expansion of the entire banking industry. While the loan disbursement was satisfactory in the
industry, deposit creation was at low and continuous deficit hammered the domestic liquidity. Despite
these challenges, it is with utmost joy that I declare that NIC ASIA Bank has uninterruptedly moved towards
new height of the success like every previous year.
The Bank’s performance during the from NPR 1.33 billion to NPR 3.02 billion
review period is a remarkable and has which is a historical achievement.
motivated us to reach new heights.
Even with the unfavorable market In addition, the Bank’s return on
situation, the Bank has astonishing assets and return on equity increased
performance with net growth in loans considerably. Return on assets and
and deposit by NPR 29.60 billion and Return on equity grew from 0.97%
NPR 29.40 billion respectively. The and 12.09% to 1.56% and 22.73%
Bank has total outstanding loans and respectively during the review period.
deposits of NPR 150.10 billion and NPR Similarly during this period, the Bank’s
180.60 billion respectively during the earning per share took a big leap from
end of FY 2018/19. The Bank stands NPR 16.62 to NPR 34.22.
Number 1 position in loans in industry
HISTORICAL ACHIEVEMENT
and Number 1 position in private sector
banks in deposit. Mover and Shaker in Nepal’s banking
sector, NIC ASIA Bank has made an
With a core belief that banking facilities extraordinary record in the banking
should be nimbly accessible to the history of Nepal. Year 2018-19 was
people, the Bank continued to mete celebrated as “Year of Capacity
out banking services through new Management” with the phenomenal
branches. The Bank, therefore, secures growth, the Bank wind up the year as
top position in branch expansion in the “Year of Significant Achievements” and
country, making it the largest Bank in “Year of Milestones”. The Bank is able
terms of footprint. Further, the Bank to achieve rarest of rarest success in
has acquired impressive result in brand almost every category and set itself as
presence, creation of direct and indirect an exemplar in the banking industry.
employment, banking transactions
through digital channel, increase in The Bank has created a golden
debit cards, mobile banking users, history in banking sector, as the bank
increase in new customers and various conducted 53 skill development
other categories. training, provided training to 1,548
staffs in a single day and conducted
The Bank’s balance sheet size 1,112 training programs during the
increased by NPR 46.50 billion to reach review period.
ROSHAN KUMAR NEUPANE NPR 217.69 billion during the review
New 5,26,023 saving accounts
CHIEF EXECUTIVE OFFICER period. Net profit of the Bank increased

and opened 21 local bodies’ bank attractive schemes for digital channel facilities with changing needs of our
account during the review period. transactions, and luring customers to customers. “CHAMATKARIK Products
During the review period, the Bank opt digital banking channels and Services” is one of our innovative
increased its mobile banking and endeavours to address the customer
HUMAN RESOURCE needs. With the overwhelming reaction
debit card users by 250,000.
MANAGEMENT and participation of customers in
Acquire 800 discount merchant in
Human resources are the backbone “CHAMATKARIK Products and Services”,
hotels, café, restaurant, hospital
of the bank’s achievements. Without we are motivated and propelled to bring
to provide discount on payment
the dedication of our employees, the better plans in coming days.
through digital platform during the
bank couldn’t have been in its current
review period. The Bank is dedicated to provide timely
position. The Bank is ably equipping
The Bank achieved historical and quick service to the customer under
its employees with right training and
achievement during the review 'First Time Right' approach, hence
development activities to achieve the
period as it became Nepal’s No. 1 the review period was celebrated as
next big ambitious goal of becoming
Private Sector Bank with highest “Year of Capacity Management” with
NextGen Banking. During the review
Return on Equity i.e 22.73%. huge investment in capacity and skill
period, the Bank conducted various
development, human resource and
training and seminars to enrich
EMBEDDING MODERN digital banking.
employees’ technical and professional
TECHNOLOGY
developments. Banking services and products are not
The Bank has well accepted the fact
only the needs of customers. We have
that this is the age of digital technology The Bank has strong belief that satisfied
taken a step forward for “Experience
and it is the need of an hour to and skilled employees can drive the
Enrichment” as we believe experience
incorporate modern technology in our bank towards favorable outcome. With
banking is the future. Experience
banking deliverables. For the best use this belief, the Bank has placed top
enrichment shall focus on customer
of modern technology in its activities priority on employee remuneration,
expectation, needs and desire and fulfill
and services, the Bank has initiated incentive, skill development as overall
them with better banking experience
customer relationship management, employee satisfaction is the foundation
business intelligence, business process for “Experience Transformation” and THANKING YOU
management, etc which are all in final “Experience Enrichment” to pave our
way towards “Bank of the First Choice To all the customers, shareholders,
stage of implementation. Along with
for all our Stakeholders”. employees, regulatory and business
this, keeping digital banking as a key
institutions who have helped on our
factor in business practice, the bank
believes that its desire to increase
VISION 18-22 way to success, I would like to express
my deepest gratitude. Also, I would like
efficiency, decrease cost, increase Setting up long term strategy and
to appreciate our chairperson and board
customer and decrease turn around taking small step towards it every
members who are continuously devoted
time will be fulfilled. The Bank has day is the most important factor of
to making the Bank best of the best.
widened the digital banking services success. Vision 18-22 is formulated for
Heartfelt thanks to all our employees
with addition of credit card online greater our achievements in business,
of head office, provincial offices, branch
application, analytica application, social and economy and various other
offices, extension counters and DNA
mobile banking version upgradation, indicators to stand out as Nepal’s most
Oversight committee members and
missed call banking service, saathi trusted bank. With Vision 18-22, Bank
every single employee whose effort has
chatbot in its services. The Bank has is eyeing for business expansion, gain
made us the Largest Bank of Nepal.
updated digital services for real time in market share, increase in branch,
basis transaction with payment of digital banking, improvement in internal Thank You!
electricity bill, telephone bill, mobile process, best banking practice within
Roshan Kumar Neupane
recharge and top up facility through its the defined period.
Chief Executive Officer
upgraded mobile banking.
CUSTOMER FOCUSED BANKING
The Bank, in association with different
Needs leads to innovation. We are
business entities, is providing
committed to provide innovative banking

Despite the liquidity constraints and
adverse market situations regarding low
creation of deposits, huge trade deficits,
the Bank made historical achievements
by increasing Return on Equity by 88% to
reach 22.73% from 12.09%. We now have
Earning per Share of NPR 34.22, which
was NPR 16.62 last year.
CA RUPESH LUITEL,
CHIEF FINANCIAL OFFICER 1.6 MESSAGE FROM THE CFO
For NIC ASIA Bank, fiscal year 2018-19 24.34% in loans and advances and 19.5%
was a year of remarkable achievements. in deposits and the figure is expected to
The Bank continued to make strong increase in coming years as well.
presence in the financial sector of Nepal
with one of the biggest balance sheet Despite the liquidity constraints and
size in the entire banking industry. The adverse market situations regarding low
Bank strike record growth in net profit creation of deposits, huge trade deficits,
by 126.49% as it grew from NPR 1,334.86 the Bank made historical achievements
million to NPR 3,023.28 million, making by increasing Return on Equity by 88%
it Nepal’s No.1 Bank in term of growth in to reach 22.73% from 12.09%. We now
net profit. have Earning per Share of NPR 34.22,
which was NPR 16.62 last year.
With the increasing number of branches
throughout the nation, the Bank has Our major source of income, interest
astonishingly increased the deposits income contributes 88% of the total
and loans and advances. It is Nepal’s No. earning while fees and commission
1 Private Bank in terms of deposit and amounts to 10% of the total income. With
loans and advances with NPR 180.50 increasing focus on cash less economy,
billion and NPR 150.10 billion respectively. we expect fees and commission income
With the continuous effort, the Bank to be higher in coming years. While in
was able to achieve yearly growth of terms of expense, interest expense is

56% of total expense. Footprint expansion has required the The Bank issued two debentures during the year; 11% NIC ASIA
Bank to hire more qualified personnel, hence the employee Bond 2082/83 and 10% NIC ASIA Bond 2085/86 amounting
cost increased from NPR 1,782 million to NPR 2,477 million, yet to NPR 1,830 million and NPR 2,405 million respectively.
the Bank achieved positive result on net profit per employee. Both these debentures were given rating CARE-NP A by
CARE Nepal which means these bonds are considered to
The Bank has left no effort in providing superior experience to have adequate degree of safety regarding timely servicing of
customers, both in their physical visit to the Bank's branches financial obligations and carry low credit risk. Also, CARE Nepal
or their virtual acquaintance with the Bank through digital reaffirmed rating of CARE-NP A (Is) to NIC ASIA Bank. Issuers
channels. With wide range of products and services, the Bank with this rating are considered to offer adequate degree of
was able to increase deposits customers by 525,039 to reach safety regarding timely servicing of financial obligations, in
total tally of 1,604,718. Also, in transaction banking, the Bank Nepal. With these ratings, it is safe to presume that the Bank’s
garnered best result in the banking industry with increasing overall position is well satisfactory.
customer base by 229,809 in mobile banking, 3,087 credit
cards, 256,096 debit cards, 22,455 internet banking, 2,173 The Bank's five year strategy, “STRATEGY 2020” was attained
POS and 5,235 QR Code. NIC ASIA Bank has also allied with within four years which is astounding. Hence, a long term
various business entities for providing attractive schemes and strategy “VISION 18-22” has been formulated with new
discount on digital transaction to NIC ASIA Customers. challenges and higher goals.
Treasury, which manages local and foreign currency, NIC ASIA Bank, being one of the top banks of the nation, is
contributed 15% to the total income earned. Also, it makes committed to provide the best customer experience. Every day
appropriate investments with low risk and high yield. During we are committed to be better than yesterday.
the review period, investment of the Bank reached NPR 19.36
billion, which is 34% in addition to investment of previous year.
Treasury has moved beyond its traditional role of managing and
monitoring the bank’s fund position and overall asset liability
position to a role where it is involved directly in profit centered
activities. With increasing investment, we expect Treasury’s
contribution to total income will increase in days to come. Capital Adequacy
Ratio (CAR)
NIC ASIA Bank is Nepal’s No. 1 Bank in terms of balance
sheet size as the overall size increased by 27.35%. The non-
performing loan ratio is at 0.46% of total credit. The Bank has
13.32 %
prioritized investment in low risk loans in order to achieve
results in line with the long-term strategy adopted by the Bank.
Recovery and management of loan function of the Bank has Total Deposit Total Loan and
(NPR) Advances (NPR)
been strengthened in order to minimize the risk that may occur
due to non-performing loans, and reduce loan loss provision.
Capital Adequacy Ratio of the Bank is 13.32% while last year it 180.5 Billion
150.1
Billion
was 12.24%. Our Capital Adequacy Ratio (CAR) can be seen to
be comfortably above the minimum CAR of 11% prescribed by
Nepal Rastra Bank and the minimum CAR of 11.5% as required
Earning Per
by the Internal Capital Adequacy Assessment Policy (ICAAP). Share (NPR)
As NIC ASIA Bank values its investors the most, it has

continuously provided good return to its investors. Last year,
34.22
the Bank distributed dividend in form of bonus share at
10% (excluding tax) of total paid up share capital, while this
year the proposed dividend rate is 20% (excluding tax). The
proposed dividend includes 10% bonus share. Respecting our
investors’ faith and trust they have put on the Bank, the Bank
is committed to provide greater return to its investors.

1.7 DNA OVERSIGHT COMMITTEE
DNA Oversight Committee is a management level apex committee, which works continuously towards attaining the Bank’s vision
and mission. The DNA Oversight Committee has been envisioned to be above all the verticals of the Bank (viz. Business, Support, and
Control). All these verticals are equally important for the Bank, and each vertical is so oriented and managed that they impeccably
contribute towards achievement of the vision, mission, and strategies of the Bank as envisaged by VISION 18-22 in a balanced,
sustainable, and sound manner, thus collectively protecting the best interests of the Bank by striking right balance of business,
support, and control activities of the Bank.
COMPOSITION OF DNA OVERSIGHT COMMITTEE

Position in
S.N Name Position in Organization
Committee
1 Mr. Roshan Kumar Neupane Chief Executive Officer Coordinator
2 Mr. Sudhir Nath Pandey Deputy Chief Executive Officer Member
Assistant Chief Executive Officer - Image & Experience Projection & Promotion
3 Mr. Santosh Kumar Rathi Member
Ecosystem
4 Mr. Rajesh Rawal Assistant Chief Executive Officer - Performance Assurance Ecosystem Member
5 Mr. Kapil Dhakal Assistant Chief Executive Officer - Quality Assurance Ecosystem Member
6 Mr. Jayendra Rawal Assistant Chief Executive Officer - Performance Assurance Ecosystem Member
7 Mr. Bhesh Raj Khatiwada Assistant Chief Executive Officer - Experience Assurance Ecosystem Member
8 Mr. Ranjan Khadka Assistant General Manager - Strategic Resource Penetration Ecosystem Member
9 Mr. Dipendra Bahadur Rajbhandari Chief Risk Officer Member
10 Mr. Arjun Raj Khaniya Chief Business Officer Member
11 Mr. Bishal Sigdel Chief Experience Transformation Officer Member
12 Mr. Prakash Baral Chief Credit Officer Member
13 Mr. Bapin Rajbhandari Chief Technology Officer Member
14 Mr. Dinesh Bhari Head Legal Member
15 Mr. Narayan Sundar Shilpakar Chief Digital Marketing Officer Member
16 Mr. Raju Prasad Adhikari Head Internal Audit Member
17 Mr. Rupesh Luitel Chief Financial Officer Member
18 Mr. Kailash Gautam Head DNA and Talent Management / Branding/ GAP Member
Member
19 Mr. Deepen Karki Company Secretary
Secretary
20 Mr. Narayan Prasad Nepal Head Strategy & Transformational Organization Development Member
21 Mr. Suman Thapaliya Head Strategy, BPR & Think Tank Member

ROLES AND RESPONSIBILITIES OF DNA OVERSIGHT COMMITTEE

Following are the broader scope of work of the committee;
i. To assist in realizing the vision, mission, and strategies iv. To maximize return on human as well as other investments
of the Bank by fostering harmony, synchronization, and of the Bank by ensuring efficient utilization of all human
balance amongst all departments, regional offices, and resource and other physical resources of the Bank and to
branches of the Bank. achieve synergic effect.
ii. To act as a central authority above all the verticals of the v. To assist all the departments, provincial and branch offices
Bank (viz. Business, Support, and Control) and ensure of the Bank for effective implementation of all the policies
that each vertical is so oriented and managed that they and guidelines of the Bank, as applicable.
impeccably contribute towards achievement of the vi. To constantly steer the implementation of VISION 18-22
vision, mission, and strategies of the Bank in a balanced, through quality assurance, value addition, and intervention.
sustainable, and sound manner, thus collectively protecting
the best interests of the Bank by striking right balance of
business, support, and control activities of the Bank.
iii. To provide direct oversight to all the departments,
provincial offices, and branches, so as to enable them to
effectively implement strategies and tactical plans.

1.8 CODE OF CONDUCT AND GUIDING PRINCIPLES
NIC ASIA Bank and its subsidiary companies have always maintained by the Human Resource Department.
endeavoured to ensure maintenance of high standards
of ethics, honesty, integrity, confidentiality, impartiality, The Bank shall be committed in all its actions to the interests
professionalism, and conduct, and to avoid misconduct and of the public.
conflicts of interest, in order to maintain the confidence of
the public and customers. The bank has always been adhering NIC ASIAN DNA
to the highest standards of responsible business practices
in interactions with all stakeholders. The bank's governance The NIC ASIAN DNA is the thread woven throughout all actions
structure has been designed so as to facilitate greater and decisions to effectively implement the Bank’s strategies,
empowerment and faster decision-making at all levels of and ensure achievement of its vision in an effective and
business. efficient manner. The organization’s culture consists of the
values, beliefs, attitudes, and behaviors that are revealed
The Nepal Rastra Bank's Directive No.6 has detailed a Code through what really happens in day-to-day interactions
of Conduct to be observed by licensed institutions, directors, between employees with customers and other stakeholders.
employees, and Board-level committees and sub-committees The NIC ASIAN DNA is about culturalization or the process of
and their members. Whenever, the bank faces concerns or becoming cultured, refinement of the same and intellectual
issues that do not present an obvious solution, judgments cultivation. It is more than mere words on a piece of paper as
are exercised on the basis of principles outlined in the Code we try to reflect it in the way each and every NIC ASIAN thinks,
of Conduct. behaves, and acts.
Following common issues are covered by the Code of Conduct: Higher level of passion, creativity, motivation, energy,
enthusiasm, and morality among NIC ASIANs has been
• Highest level of confidentiality and fairness in dealing
possible due to effective practice of distinctively and explicitly
within and outside the Bank.
formulated NIC ASIAN DNA. With such an extraordinary DNA
• Absolute fairness in monetary transactions and all other that we all possess at our core, supported by unmatched
kinds of transactions. touch-points, amazing branding, rapid momentum,
• Adherence to the highest standards of ethical conduct instrumental capacities, and unparalleled customer base, the
while dealing with actual or apparent conflicts of interest goals that we had collectively set for ourselves were achieved,
between personal and professional relationships. and we believe that the goals that we have set for the coming
• Reward on the basis of hard work and effort. years are without any doubt achievable, and together as an
unbeatable team, we shall definitely surpass them. Everything
• Proper use and application of the Bank’s assets and
that we achieved in the past was the result of the extraordinary
resources.
DNA that we embody at our core, both as a team, and as an
• Full, fair, accurate, sensible, timely, and meaningful individual.
disclosures in the periodic reports required to be filed by
the Bank with government and regulatory agencies. Everything else (products, services, strategies, even
innovations) may be replicated, but our NIC ASIAN DNA is the
The detailed provision of Nepal Rastra Bank’s directive has
only true identifier that differentiates NIC ASIAN from the
been presented under a separate Director’s Handbook and
rest of the world. The Bank has resolved to establish “Service
Employee Code of Conduct Handbook. NIC ASIA Bank, in its
DNA” as an integral part of the organizational culture, and
endeavor to abide by the code of conduct, provides a copy of
DNA. “Service with Smile” has been able to ensure consistent
the Code of Conduct Handbook to a new staff before he/she
customer delight and loyalty.
formally assumes duty. The acknowledgement of the same is

THE NIC
ASIAN DNA VALUES
Adoption of core values is essential for execution
of our strategy, and for ensuring a work
environment that supports goals and objectives
of the Bank and inspires employees to new levels
of productivity by helping them achieve their
professional goals.
NIC ASIA DNA is based on five core values:
• Meritocracy
• Transparency
VISION • Service Excellence
• Team Spirit
Vision is the most powerful way to keep us
• Professionalism
focused on what we want, while keeping us
motivated in achieving it. We believe that for
NIC ASIAN DNA, vision is not seen as a dream,
but a reality that has not come into existence.
NIC ASIANs are expected to have following

vision in their DNA:
• The Revolutionary Vision

• Evolutionary Execution

INTELLIGENCE
Intelligence is the ability to perceive
information and retain it as
knowledge to be applied as skills
towards adaptive behaviors within an
environment or context. Intelligence
strengthens the Bank’s ability to make
decisions and plan for the future.
MINDSET Intelligence in the following matters is

expected in NIC ASIAN DNA:
Mindset is a habitual or
characteristic mental attitude • Self-Intelligence
that determines how we • Group Intelligence
interpret and respond to
• Socio-Cultural Intelligence
CULTURES situations. Cultivating a growth
• Business Intelligence
mindset can be the single most
The culture of an organization important thing we ever do to • Market Intelligence
is like its finger print/ unique help us achieve success.
identifier. When a culture is
strong, it leads to motivated NIC ASIAN DNA is expected to
employees and high performing practice the following mindsets
managers. Developing a high- for best possible results:
performance corporate culture
is more important, because it is • Entrepreneurial/ Owner
essential to strong results. • Open
• Vibrant
NIC ASIAN DNA is expected to • Dynamic
have the following attributes to • Pragmatic
ensure a winning culture within • Innovative
the Bank: • Adaptive
• Energetic
• Co-Ownership • Passionate
• Collaboration • Persistent
• Synchronization
• Empowerment
• Accountability

1.9 GROUP STRUCTURE

The group consists of three companies, including NIC ASIA Bank Limited being its parent company. NIC ASIA
Bank Limited has two subsidiaries, namely NIC ASIA Laghubitta Bittiya Sanstha Limited and NIC ASIA Capital
Limited. Both NIC ASIA Capital Limited and NIC ASIA Laghubitta Bittiya Sanstha Limited are wholly owned
subsidiaries of the NIC ASIA Bank Limited.
NIC ASIA
BANK
NIC ASIA
NIC ASIA LAGHUBITTA
CAPITAL BITTIYA
LIMITED SANSTHA
LIMITED

1.10 ORGANIZATIONAL STRUCTURE
BOARD OF
DIRECTOR
RISK SAMPATI
KARMACHARI
MANAGEMENT SUDHRIKANAN AUDIT
SEWA SUVIDA
COMMITTEE NIWARAN COMMITTEE
SAMITI
SAMITI CHIEF
EXECUTIVE
OFFICER
(CEO)
DEPUTY CHIEF
EXECUTIVE
COMPANY
OFFICER
SECRETARY
(DCEO)
INTERNAL
INTEGRATED STRATEGY & AUDIT
RISK STRATEGY,
TRANSFORMATIONAL TRANSFORMATIVE
BPR & THINK DEPARTMENT
MANAGEMENT ORGANIZATION ACTION RESEARCH
DEPARTMENT TANK DEVELOPMENT ECOSYSTEM
(CHIEF RISK ECOSYSTEM ECOSYSTEM
OFFICER)


(CEO)
Deputy Chief Executive

Officer (DCEO)
Provincial Provincial Provincial Provincial ACEO - ACEO - ACEO - Chief Credit

Performance Performance Performance Performance Image & Experience Quality Officer
Assurance Assurance Assurance Assurance Experience Assurance Assurance
Ecosystem- Ecosystem- Ecosystem- Ecosystem- Projection & Ecosystem Ecosystem
ACEO - PAE ACEO - PAE ACEO - PAE CBO PAE Promotion
Ecosystem
Province 1&2 Province 3 Province 4,6,7 Province 5

(CEO)
Deputy Chief Executive

Officer (DCEO)
Technology & Head - DNA & Talent Head - General Head - Experience
Digital Management Administration and Enforcement
Ecosystem - CTO Ecosystem Project Management Ecosystem
Ecosystem

FINANCIAL MANAGEMENT ECOSYSTEM
Deputy Chief Executive Officer

(DCEO)
ACEO - Image & Experience

Projection & Promotion Ecosystem
Chief Experience Transformation

Officer (CETO)
Financial Management Ecosystem

- Chief Financial Officer (CFO)
Treasury and International

Finance Department
Banking Department
IMAGE AND EXPERIENCE PROJECTION AND PROMOTION ECOSYSTEM
Deputy Chief Executive Officer

(DCEO)
ACEO - Image & Experience Projection &

Promotion Ecosystem - ACEO - IEPPE
Chief Experience AGM-Strategic Resource Penetration Chief Business Officer

Transformation Officer - CETO Ecosystem - AGM - SRPE (CBO)

EXPERIENCE TRANSFORMATION ECOSYSTEM
Image & Experience Projection &

Experience Transformation
Ecosystem - CETO
Experience
Digital Transformation Digital Marketing
Transformation
Fintech Digital Products Digital Partnership Digital Projects
STRATEGIC RESOURCE PENETRATION ECOSYSTEM
ACEO - IEPPE
Strategic Resource Penetration

Ecosystem
Provincial, Local Proprietorship Firms

Ministerial Relation Public Limited Non Profit Making
Authorities & & Private Limited
Management Companies Institutions
Government Companies
Department
Transaction Department

DIGITAL BUSINESS ECOSYSTEM
Image & Experience Projection &

Digital Business Ecosystem - Chief

Digital Marketing Officer
Transaction Banking, Digital Sales

Digital Business Individual Deposit
Remittance, BLB & BANCA Support
RISK ASSET ECOSYSTEM
ACEO - IEPPE
Risk Assets Ecosystem -

Chief Business Officer
Branding Individual Loans Tourism Loans Energy Loans Other Priority General Business
Department Department Department Department Business Loans Loans
Department Department
DCEO
Provincial Performance Assurance

Ecosystem - ACEO - PAE Province 4, 6 & 7
Credit Operation Credit Control

Department Legal Ecosystem
Department

QUALITY ASSURANCE ECOSYSTEM
DCEO
Quality Assurance Ecosystem ACEO - QAE
Loan Recovery Department
EXPERIENCE ASSURANCE ECOSYSTEM
DCEO
Experience Assurance Ecosystem - ACEO - EAE
Government
Channel Experience Trade Central Centralized Experience
Central Transactions
Support Support Operation Remittance Clearing Enrichment
Archive Operation
Ecosystem Department Department Department Department
Department
CHANNEL SUPPORT ECOSYSTEM
Experience Assurance Ecosystem

ACEO - EAE
Channel Support Ecosystem -

Head Channel Support
POS & QR Card Support

Unit ATM Support Unit
Support Unit

TECHNOLOGY & DIGITAL ECOSYSTEM
DECO
Technology & Digital Ecosystem -

Chief Technology Officer
Information Digital Payment

Digital Factory
Technology Implementation
Core Banking Network

IT Administration
System Management
RISK & COMPLIANCE ECOSYSTEM
Risk & Compliance Ecosystem -

Chief Risk Officer
Credit Risk Operational Risk Market & Liquidity Information

Compliance
Management Management Risk Security
Department
Department Department Management Department

AUDIT ECOSYSTEM CREDIT APPROVAL ECOSYSTEM
Audit Ecosystem - Deputy Chief Executive

Head Audit Officer - DCEO
Credit Approval Ecosystem -

Internal Audit Department
Chief Credit Officer
Credit Approval Department

Branch Specific Audit Corporate
Audit Projects Audit
Valuer
Credit Assurance Credit
Management
& Credit Review Assessment
& MIS
DNA AND TALENT MANAGEMENT ECOSYSTEM
DCEO
DNA & Talent Management Ecosystem - Head DNA &

Talent Management Ecosystem
Employer Talent
Talent Engagement,
DNA Talent Branding, Talent Talent DNA Grievance
Accounting & Bonding &
Planning Identification & Development Enforcement Handling,
Administration Retention
Recruitment Assurance &
Redressal

GENERAL ADMINISTRATION AND PROJECT MANAGEMENT ECOSYSTEM
DCEO
General Administration & Project Management Ecosystem, Head

General Administration & Project Management Ecosystem
Preventive Safety &

Project Administrative Procurement/ Vendor
Maintenance & Security
Management Support Management
Support Management Management
STRATEGY, BPR AND THINK TANK ECOSYSTEM
CEO
Strategy, BPR & Think Tank Ecosystem - Head Strategy, BPR &
Think Tank Ecosystem
Turnround
Think Tank
Assurance
Strategy & Product New Extension ATM, POS,

Business Provincial
Business Performance Branches Counter QR, BLB
Intelligence Assurance
Process Re- Assurance Performance Performance Performance
Department
engineering Department Assurance Assurance Assurance

STRATEGY TRANSFORMATIONAL ORGANIZATION DEVELOPMENT ECOSYSTEM
CEO
Strategy & Transformational Organization Development Ecosystem -

Head strategy & Transformational Organization Development
Transformational Employee
Assurance Delight
Employee Productivity
Departmental Customer Govermance,
Brand Assurance & Strategic HR
Effectiveness Experience Risk & Control
Assurance Management & Organization
Assurance Assurance Assurance
Development
TRANSFORMATIVE ACTION RESEARCH ECOSYSTEM
CEO
Transformative Action Research Ecosystem
Transformative Action Research Department
Effectiveness Cultural, Effectiveness Effectiveness Effectiveness Effectiveness of Effectiveness

of Behavioral & of Digital of Experience of Competency Corporate of Products/
Organization DNA Ecosystem Ecosystem Planning, Governance, Services/ Deliver
Structure Research Engagement & Compliance Channels, &
Development & Risk Data & Decision
Ecosystem Management Model
Ecosystem

1.11 CORPORATE PROFILE
NIC ASIA Bank is Nepal’s leading bank in terms of footprints, The Bank has the reputation of the Nepal’s Largest Bank
deposits, lending, customer base and balance sheet size. Over in terms of footprints. NIC ASIA Bank is providing its service
the operation of 22 years, the Bank has established itself as a across 73 districts of the nation with its 292 branches and 302
household name and a prominent player in nation’s economic ATMs.
development. Each year, Bank has created history with
extraordinary achievements and contribution. With the motto of “bank pani sathi pani, ramro pani hamro
pani”, the Bank is serving more than 1.6 million customers
NIC Bank was established in 1997 in Biratnagar, as NIC Bank making it the largest private sector Bank. The Bank aims to
later merged with Bank of Asia on 30 June 2013 and started provide banking service to remotest part of nation to financial
operation under “NIC ASIA Bank”. The merger was the first of hub with superior banking experience.
kind among two successful commercial banks of Nepal.
NIC ASIA Bank has two subsidiaries; NIC ASIA Capital Limited
NIC ASIA Bank has been awarded with prestigious title of Bank and NIC ASIA Laghubitta Bitiya Sanstha Limited, both of them
of the Year by The Banker, Financial Times, UK on two occasion. being one of the leading companies in their respective domain.
The Bank was awarded the title Bank of the Year on 2007 and
2013. NIC ASIA Bank was awarded Best Presentation Annual
Report Award-2018 by Institute of Chartered Accountants of
Nepal (ICAN).
CORPORATE INFORMATION
Registered Name of the Company Legal Form Company Registration Number

NIC ASIA Bank Limited Public Limited Company, 658/53/54
listed with Nepal Stock Exchange
Company Registration Date NRB License Number Registered Office

30-May-1997 13/62/63 Ward no. 11, Trade Tower, Thapathali
Kathmandu, Nepal
57 ANNUAL REPORT 2018/19 ANNUAL REPORT 2018/19 57

PROVINCE OFFICE
Province 1: Province 2: Bagmati Province:

Biratnagar Metropolitan, Biratnagar, Bardibas Municipality, Bardibas, Trade Tower, Thapathali, Kathmandu,
Ward no. 7 Ward no. 1 Ward no. 11
Gandaki Province: Province 5: Karnali Province:

Pokhara Metropolitan, Tilottama Municipality, Birendranagar Municipality,
Ward no. 8 Ward no. 3 Ward no. 6
Sudurpashchim Province:
Dhangadhi Sub Metropolitan,
Card Center: Kamaladi, Ganeshthan, Kathmandu
Ward no. 4
Tel No: +977-01-4262277
SUBSIDIARY INFORMATION
NIC ASIA LAGHUBITTA

NIC ASIA CAPITAL LIMITED BITIYA SANSTHA LIMITED
Babar Mahal, Kathmandu Bheri Municipality, Ward-4, Jajarkot
Tel no: +977-01-5705994 Tel no: +977-11-660034
Email: info@nicasiacapital.com Email: info@nicasialaghubitta.com
Website: www.nicasiacapital.com Website: www.nicasialaghubitta.com
BOARD OF DIRECTORS Company Secretary

CONTACT DETAIL
Mr. Tulsi Ram Agrawal (Chairman) Deepen Karki
Tel No: + 977-1-5111177/5111179
Mr. Trilok Chand Agrawal (Director) Chief Financial Officer
Fax No: + 977-1-5111180
Mr. Ram Chandara Sanghai (Director) Rupesh Luitel
Toll Free No: 1660-01-77771
Mr. Rajendra Prasad Aryal (Director) Auditors PO Box: 11021
Mr. Binod Kumar Pyakureal (Director) PKF T.R. Upadhya & Co.
Mr. Ganesh Man Shrestha (Independent Director) Chartered Accountants www.nicasiabank.com
Mr. Nikunj Agrawal (Director) Share Registrar info@nicasiabank.com
NIC ASIA Capital Limited
facbook.com/NicAsiaBank
twitter.com/nic_asia_bank
instagram.com/nicasiabank

1.12 SUBSIDIARIES OF NIC ASIA BANK
NIC ASIA LAGHUBITTA BITTIYA SANSTHA SERVICES OF NIC ASIA LAGHUBITTA
NIC ASIA Laghubitta Bittiya Sanstha Limited is incorporated
BITTIYA SANSTHA LIMITED
as a public limited company registration no. 171621/074/075 CREDIT
on 2074.4.10 BS at Company Registrar Office of Government
General Loan: A client is eligible for General Loan after
of Nepal under Company Act 2063. NIC ASIA Laghubitta
group recognition test conducted by the NIC ASIA
Bittiya Sanstha Limited is a subsidiary company of NIC ASIA
Laghubitta representative. The initial loan amount will be
Bank Limited. The company is one of the “D” Class financial
disbursed to all members of the group. Any kind of income-
institutions (micro-credit development bank) license no. NRB
generating business can use this loan.
“Gha” 61/074/75 on 2074.8.5 by Nepal Rastra Bank (NRB)
under the Bank and Financial Institution Act, 2063. The Bittiya Micro Enterprise Loan: The clients are eligible to get Micro
Sanstha commenced its financial transactions from 2074.9.5 Enterprise Loan after group recognition test conducted
BS. The head office of the company is located at Bheri by NIC ASIA Laghubitta representative. The initial loan
Municipality, ward no. 4, Jajarkot District, Nepal, and its service amount will be disbursed to all members of the group. Any
area is nationwide. The main objective of the institution is kind of micro entrepreneur can use this loan.
to provide micro-finance services to households from hilly Energy Loan: This loan is given to the clients for solar
and mountainous regions of Nepal, with the prime focus on home system, solar cooker, solar dryer, solar pump, bio-
low-income households and assets-less and self-employed gas, improved water mill, wind energy, etc.
individuals in the informal sector to uplift their livelihood and
increase their involvement in economic and income-generating
activities. Besides these financial services, it also focuses
on their social development, cultural promotion, educational Micro
development, and skill development. General Enterprise
Loan Loan
VISION
LOAN
The vision of the financial institution is poverty alleviation
PRODUCTS
of rural community through economic development and
enhancing their standard of living.
MISSION
To encourage saving to skill-oriented productive programs and
uplifting the income level of the deprived sector. Energy Loan
OBJECTIVE SAVING
The main objective of the financial institution is to provide Personal Saving: This is a voluntary saving designed to
institutional credit for general public of rural areas who has encourage saving habits of members, as well as to provide
no formal banking facility, with the intention to encourage safety net for both NIC ASIA Laghubitta and members. A
and help rural communities attain sustainable growth in member can open account with a minimum of NPR100.
financial activities by mobilizing local resources they venture NIC ASIA Laghubitta provides interest @ 8% p.a. on this
to undertake. savings. Members can withdraw this saving as per their
need.

Educational Saving: This is a voluntary saving product

offered to all members of NIC ASIA Laghubitta A member
Notable achievements of the micro-
can open account with a minimum of NPR100. NIC ASIA
financing services of NIC ASIA Laghubitta
Laghubitta provides interest @ 8% p.a. on this saving.
Bittiya Sanstha Limited are as follows:
Members can deposit in this saving account when they
have surplus and withdraw from this account as per their
need.
Health Saving: This is a voluntary saving product offered to

all members of NIC ASIA Laghubitta. A member can open
account with a minimum of NPR100. NIC ASIA Laghubitta In its second year of operation,
provides interest @ 8% p.a. on this saving. Members can the organization earned
deposit in this saving account when they have surplus and operating profit of NPR 172,177/-
withdraw from this account as per their need. and net profit of NPR 110,309/-.
Health
Educational Saving
Saving
SAVING
The organization has expanded
RODUCTS
to 19 districts with 61 branches.
In 2018/19, 33 new branches
were opened.
Personal Saving
During the second year of operation,

NIC ASIA CAPITAL LIMITED
the organization has provided
NIC ASIA Capital Limited is a 100% subsidiary of NIC ASIA microfinance service through its 61
Bank Limited. NIC ASIA Capital was incorporated under branches to 2,395 groups consisting
the Companies Act 2007 of Nepal and is licensed by the of 24,392 members.
Securities Board of Nepal to undertake merchant banking
activities, which includes services like Issue Management and
Underwriting, Registrar to Share, Depositary Participant, and
Portfolio Management.
During FY 2018/19, total loans and

advances of NPR 5.49 billion was
disbursed out of which NPR 1 billion
was settled resulting outstanding
loan balance as on 16 July 2019 to
be NPR 4.49 billion. Total deposit
balance of 24,300 members as on
16 July 2019 amounts to NPR 570
million.

VISION CORPORATE ADVISORY
To become one of the leading investment and merchant banks NIC ASIA offers bespoke corporate finance and strategic
in Nepal. advisory services to public and private companies, institutions,
and entrepreneurs. The Capital is specialized in giving advice
MISSION regarding strategic reviews, mergers and acquisitions (M&A),
To provide innovative and best investment solutions and divestitures, capital raisings, and emerging companies.
excellent growth opportunities as a good corporate citizen. Services include:
SERVICES OF NIC ASIA CAPITAL LIMITED Investment

• Private Equity/ Venture Capital/ Foreign Direct Investment
NIC ASIA Capital Limited provides services like Issue
Management and Underwriting, Registrar to Share, Depositary • Investment Advisory
Participant, and Portfolio Management. The Capital aims to • Business Valuation
provide innovative and best investment solutions to its clients. • Mergers & Acquisition
Planning
Issue Management & • Business Plan as well as Strategic Planning
Corporate
Underwriting
Advisory • Project Appraisal
Financing
• Loan Syndication
• Financial Advisory
Complete Bespoke Solution
Mutual SERVICES OF Registar
Fund NIC ASIA to share • Mentoring Service
CAPITAL LTD
• One-Stop Solution
MUTUAL FUND
Mutual fund is a pool of small investments collected from
Portfolio Depositary various investors, which are then invested into different
Management Participant
financial instruments, such as stocks, bonds, preference shares,
and fixed deposits (as prescribed by Mutual Fund Regulation,
PORTFOLIO MANAGEMENT 2067). The decisions are made by the fund manager and the
profit is distributed at year-end in the form of cash dividend. A
Portfolio is the collection of different asset classes, such as
mutual fund’s portfolio is structured and maintained to match
equities, bonds, fixed deposits, mutual funds, real estate, cash
the investment objectives stated in its prospectus.
and cash equivalent, etc. It mainly focuses on the principle of
diversification, wherein varied stocks and bonds are combined
REGISTRAR TO SHARE
to form a portfolio, rather than investing all out in one single
asset or security. Portfolio Management Service (PMS) is a NIC ASIA Capital offers complete Registrar to Share (RTS) and
personalized management of finance that caters to individual Registrar and Transfer Agent (RTA) services.
needs and unique investment objectives. A team of expert
professionals carry extensive research on markets to provide a
ISSUE MANAGEMENT AND UNDERWRITING
customized solution to achieve desired investment objectives NIC ASIA Capital offers a comprehensive and one stop solution
and ensure best selection of investment opportunities within to address all the issue management and underwriting
an asset class. PMS also ensures appropriate monitoring and needs of clients, which includes meeting all the regulatory
review of the portfolios for optimum results, and keeps track requirements, such as depositing fees, publishing necessary
of any future volatility and events. NIC ASIA Capital offers a information on a timely basis, opening of the minimum required
service ranging across two asset classes, Equity and Fixed collection centers, designing and publishing the necessary
income instruments, as has been guided by SEBON. brochures and prospectus, assistance with financial forecasts,
etc.

DEPOSITARY PARTICIPANT SERVICE NIC AISA

Capital received the registration certificate to function as a Notable achievements of the Investment
Depositary Participant (DP) of Central Securities Depository Banking Services of NIC ASIA Capital
from Securities Board of Nepal (SEBON) in January 2017. NIC Limited are as follows:
ASIA Capital, together with its parent company, NIC ASIA Bank
Limited, is one of the market leaders in providing DP Services.
NIC ASIA Capital earned NPR 69.4 million
Depository participant services of NICASIA Capital include: revenue, NPR 62.2 million operating profit
and net profit of NPR 21.4 million during
• Opening DEMAT Account the FY 2018/19 with earning per share of
NPR 10.69.
• Dematerialization of Physical Shares
• Re-Materialization of the Shares in your DP Account
The capital has provided issue
• Maintaining up to date record of securities in the electronic management and underwriting services
form to eight companies till date including a
• Providing Online access to your Account to view and track mutual fund for public issue, right share
your shareholding issue and auction sale of unsubscribed
right shares. Currently, there are five
• Settlement of trades by transferring/receiving the
companies on process of public issue and
securities from/in the accounts
one company for right share issue.
• Settlement of off-market trades that is occurred between
the Beneficial Owner (BO - the investors) outside NEPSE
The company has been providing share
• Providing electronic credit of securities allotted by issuers registrar service to six companies including
during IPOs a mutual fund.
• Depositing the non-financial corporate benefits (such as
bonus, right shares, etc.) issued by issuers in the DEMAT During the FY 2018/19, the NIC ASIA
Account of Beneficial Owners (BOs) Capital provided portfolio management
services to 152 customers amounting to
• Facilitation of pledging of dematerialized securities.
NPR 377.4 million.
NIC ASIA Capital was successful in

opening 168,045 DEMAT accounts upto FY
2018/19, which weighs to 10.85% of total
DEMAT accounts opened by 71 depository
participants. Similarly, the capital has been
able to secured second position in terms
of total DEMAT accounts out of total 71
depository participants/merchant bankers.
NIC ASIA Capital is operating first plan of

NIC ASIA growth fund worth NPR 835.2
million, which is under NIC ASIA Mutual
Fund. The company was able to maintain
grow Net Asset Value (NAV) of growth
fund at 11.18 despite of decreasing trend of
secondary market. Along with that SEBON
has permitted for issue of second plan NIC
ASIA Balance Fund under NIC ASIA Mutual
Fund worth NPR 1.25 billion and maturity
period of 10 years.

1.13 BUSINESS DIVISION OF NIC ASIA BANK
BUSINESS
DIVISION
Corporate
Others
Banking
Small & Medium Transaction

Enterprise Banking Banking
Deprived Sector
Treasury
Lending
Retail Banking
Transaction Others
Banking 7% 4%
Corporate
Banking 10%
Treasury
15%
TOTAL INCOME
DSL FROM BUSINESS
7%
DIVISION SME Banking
26%
Retail Banking
31%

Treasury
Treasury Others DSL 1%
4% 1% 9%
DSL Corporate Corporate Banking
8% Banking 16% 17%
INTEREST INCOME INTEREST

OF BUSINESS EXPENSES OF
DIVISION BUSINESS DIVISION
Retail Banking
Retail Banking 41%
40% SME Banking SME Banking
31% 32%
DIVISIONAL ASSETS AND LIABILITIES
Assets Liabilities
69,669 70,446
69,764
67,129
NPR Million
47,770
45,566
17,842
17,202 17,927
11,928
Corporate SME Retail DSL Treasury
Nominal amount of TB and Others excluded in diagram
A. CORPORATE BANKING SUB SEGMENTS
Loans provided to corporate customers valuing more than Project Financing

NPR100 million are classified under Corporate Banking. The The Bank has a dedicated Project Finance cell to cater to
interest incomes from corporate loans, fee incomes generated growing demand for a specialized approach to project financing
out of such loans, and foreign exchange earned through LC/BG either singly or through a syndication of banks, especially for
are revenue items of this segment. Expenses of this segment projects under hydro, cement, road, large hotel & hospital, etc.
comprises interest expenses on deposits used for providing The Bank recognizes the immense scope for growth in these
corporate loans, personnel expenses, and operating expenses, sectors and the need for a specialized approach to manage
as well as provision for loss created for such loans. such business effectively. The Bank is strategically focused to
leverage its expertise and balance sheet strength to grow this
portfolio aggressively.

The major products the Bank has been offering are as follows: Various Service Sector such as Education, Health, Hotels &
Restaurants, Construction and Contractors, Travel & Tours,
Funded Facilities Transportation, Automobiles, Agriculture and other Private
Project Finance / Consortium Finance / Term Loans / Bridge Businesses etc. (whether running entity or new) can avail
Financing various facilities (funded and non-funded) to meet their short-
term and long-term financing requirements.
Working Capital Financing (Overdraft, Demand Loan, Short
Term Loan, etc.)
Other features of SME Loans
Non Funded Facilities Easy repayment options
Letter of Credit Attractive rates of interest
Bank Guarantee Fast, fair and flexible processing

Types of Loan under SME:
General Corporate
Overdraft
This unit caters the need of the large corporate houses with Short term loan
an average wallet size of more than Rs. 100 million. The Bank
Demand loan
has a well experienced team that understands the financial
needs of such customers and advises tailor made financial Long Term Loan
solutions. As a part of the Bank's long term strategy, the Bank Bridge Gap Loan
shall maintain and grow this portfolio on a very selective basis. Trade based facilities (Trust Receipt, Import Loan etc.)
Funded Facilities Letter of Credit

Guarantees, etc.
Export Finance
Products of SME
Import Finance (TR Loan / Import Loan)
Bill Discounting under Usance Letter of Credit NIC ASIA Fast Track Business Loan
Clean Bills purchase and discounted Credit Facility starting from NPR 300,000 to a maximum of
NPR 10,000,000
Competitive Interest Rate
Hassel Free Processing
Financing of Net Assets Requirements.
Project
Financing 16% Term loan facility with a tenor of up to 20 years
Corporate
Banking NIC ASIA Priority Business Loan
sub-segment
Credit Facility starting from NPR 300,000 to a maximum of
income
General NPR 10,000,000
Corporate
84% Competitive Interest Rate
Hassel Free Processing
Financing working capital & capital expenditure
requirements and trade based facilities.
B. SMALL AND MEDIUM ENTERPRISE Mix of revolving overdraft and term loan facility with a
BANKING tenor of up to 10 years can be extended depending upon
nature and facility requirement of business
With an aim to meet the financing needs/ requirements of
Small and Mid-sized enterprises and make small business NIC ASIA Premium Business Loan
loans easy, NIC ASIA Bank has designed special products with
Credit Facility starting from NPR 10,000,000 up to a
competitive pricing.
maximum of NPR 50,000,000.
Industrial/Manufacturing unit, Retail/Wholesale Trading unit, Competitive Interest Rate.

Financing working capital & capital expenditure defined by NRB from time to time.
requirements and trade based facilities.
Transportation Loan:
Term loan facility with a tenor of up to 15 years can be
Target Market: New or Existing Companies in Public
extended depending upon nature and requirement of
Transportation Business such as Public Buses, Micro-Vans,
business.
Taxis, Safa Tempos, Motorcycles, Rickshaws or any other
Interest Subsidized Agriculture and Livestock Loan entity which is involved in providing similar services.
Attractive interest rate with upfront 5% subsidy on interest Automobiles Sector Loan
rate. Target Market: New or Existing Dealers / Sub- Dealers of
Nil Loans Processing Fee. Automobiles/ Vehicles and Motorcycles including Sales,
Service and Spare Parts and any other business entity involved
Hassle-Free Processing.
in similar nature of business.
Easy and Fast Loan processing.
Construction & Contractors Business Loan
Availability of technical assistance from Agriculture
Financing Unit. Target Market: Entrepreneurs/ Units/ Companies/ Group/
Contractors and Businesses involved in Construction Business
In order to meet the specific financing requirement of different
economically important sectors, and to cater right product Other Private Business
following sector wise loans are also available:
Small Businss
Travel & Tours Companies Loan 30%
Target Market: New or existing business entities/ agencies/

companies involved in Travelling, Touring, Trekking, Rafting,
Mountaineering, Money Exchange and others similar business. SME Banking
Sub-Segment Medium
Hotels Loan Easy Business Enterprises 46%
Income
5%
Target Market: New or Existing Restaurants, (Star/Non-Star)
Hotels & Resorts or any other business entity involved in
similar nature of business. Mid-Market
Enterprises 19%
Health Sector Loan
Target Market: New or Existing Health Clinics, Nursing Homes,

Labs, Pathology Labs, Hospitals , Homeopathic( Ayurvedic) C. DEPRIVED SECTOR LENDING
Clinics/ Hospitals or any other business entity which is involved
The loans provided to deprived sectors of the society directly
in providing similar services.
(say to agricultural sector) or indirectly (say to organizations
Education Sector Loan working for uplifting the poor) are classified under DSL Banking.
Target Market: New or Existing Pre-Schools, Higher Secondary The interest and fee incomes generated out of such loans are
Schools, Colleges, Universities, Technical/Vocational Institutes revenue items of this segment. Expenses of this segment
or any other entity which is involved in providing similar include interest expenses on deposits used for providing DSL
educational services/vocational trainings. loans, personnel expenses, and operating expenses, as well as
provision for loss created on such loans. The Bank’s approach
Agriculture Loan: on deprived sector lending is as follows:
Target Market: All Agriculture related business such as Crop
Cultivation, Vegetable & Fruits Cultivation, Fertilizer and Direct Lending Under direct lending, bank focuses, but not
Pesticides Production, Storage, Irrigation, Forestry, Tea/Coffee limited to, on following parameters:
Plantation, Fish Farming, Livestock Farming, Feed Production, Renewable energy financing
Poultry Farming, Mushroom Farming, Bee Keeping & Honey Women Entrepreneur Loan
Production, Agriculture Equipments, Animals and Birds
Micro Enterprise Loan
Slaughter Houses, Floriculture, Dairy Products and other
business entities involved in similar nature of business and as Deprived General Loan

Hospitals Features of Loan against Mortgaged Property
Hydro Loans Competitive Interest Rate
Agricultural Loan Credit facility as term loan and/or draft/demand loan
Following products are developed by Bank for lending to Flexible loan tenure up to 50 years
deprived sector: Easy documentation
Laghu Udhyam Karza Hassle free loan processing
Commercial Agriculture Loan Home Loan opportunity can be explored for following purpose:
Low Cost Housing Purchase of Land/Land and houses
Agriculture Equipment Loan Construction of house
Indirect Lending under indirect lending, the Bank provides loan Repair/Renovation and Re-construction of houses
in deprived sector as follows:
Equity Financing option- Finance against own land or land/
Wholesale Lending house
Equity Investment Refinancing
Lending to Youth and Small Entrepreneur Self Employment Pre-Approved Home Loan for purchase of house- Get your
Fund (YSESEF) home loan approved before choosing your dream home.
2. Auto Loan
Indirect
Deprived NICASIA Auto loan is an exclusive financing option to “move
Sector Lending
in style” by owing a vehicle of your own choice. With an aim
47%
to enhance and upgrade your automobile experience, there
are varieties of Auto loan scheme available with simple loan
processing and minimum turnaround time.
DSL Sub Segment
Income Features of Auto Loan
Competitive interest rate
Attractive financing limit
Direct Deprived Up to 50% of VAT bill for individuals
Sector Lending
53% Up to 80% of VAT bill for firm/companies
D. RETAIL BANKING Flexible loan tenure up to 15 years

Easy documentation
The loans provided to other than corporate customers are
Hassle free loan processing
classified under Retail Banking. The interest incomes and fee
incomes generated out of such loans are revenue items of
Types of auto loan financing:
this segment. Expenses of this segment comprises interest
expenses on deposits used for providing retail loans, personnel Red plated private vehicles
expenses, and operating expenses, as well as provision for Red plated business use vehicles and red plated semi
loss created for such loans. commercial vehicles
Black Plated commercial vehicles
Products of Retail Banking
Body building financing
1. Loan against Mortgaged Property
Second hand/ used vehicle financing (Red plated private
Loan against mortgaged property is an attractive financing
vehicles and Black plated Taxi)
scheme bundled with special features to purchase/construct
dream home of customers and help them live with family 3. Personal Loan
happily ever after.
NIC ASIA Personal Loan is a non-collateral based loan
scheme especially designed to facilitate Nepalese Salaried
Individuals and Professionals to meet their individual financial

requirements; offers lower monthly obligation and hassle- Accommodation cost/ living expenses
free services along with fastest service delivery to our valued Cost of overseas student health cover
customers. This loan is based purely on personal credibility of
Miscellaneous costs (Shopping expenses and foreign
the customer, and is not backed by collateral.
exchange facility against passport)
Features of Personal Loan
Minimum criterions, Hassel free and simple documentation
Mix of overdraft and term loan facility
Loan amount: Minimum NPR 300,000 to maximum NPR
Borrower’s life is insured at the cost of Bank as secure 10,000,000
mind insurance tie has been done for entire portfolio for
Term loan facility with a tenor up to 15 years excluding
better security
moratorium period
Maximum loan limit NPR 1,500,000
Acceptable collateral type
Credit facility as Term and/or overdraft/demand loan in
monthly payment Land and/or building
Hassel free and simple loan documentation Fixed deposit
4. Residential Home Loan 6. Loan against Share

Residential Home Loan is an attractive financing bundle Loan against Shares is financing individuals or companies
scheme for our customers looking to buy/construct their home. against securities of shares. This is a hassle-free and easy loan
Features of Loan against Mortgaged Property scheme, where any individual/companies who/ which hold
Competitive Interest Rate shares and stock of companies listed in Nepal Stock Exchange
can avail loan against the security of such shares. This is an
Credit facility as term loan up to NPR 15 million
instant solution if cash is required within a short period of time
Flexible loan tenure up to 50 years with simple documentation and processing.
Easy documentation
Features of Loan against Share
Hassle free loan processing
Home Loan opportunity can be explored for following purpose: • Overdraft and/or demand loan facility
Purchase of houses • Attractive interest rate
Construction of house • Hassel free and simple loan documentation
Repair/Renovation and Re-construction of houses • Loan against pledge of shares of actively traded companies
Refinancing/ SWAP of existing Home Loan • Additional real state collateral is not Mandatory
5. Education Loan
Retail Banking Sub Segment Income
Better education is seen as a stepping stone to a highflying
NPR Million
career. One of the biggest constraints between students
and better education might be tuition fees, and it is for that
purpose that we have come up with the Education Loan
product to support the students and not let their dreams Home Loan-Term
wither away. NIC ASIA Education Loan is a collateral based loan NPR. 1,773
specially designed to facilitate Nepalese students to meet Education

their financial requirement to pursue higher education above Loan NPR. 13 Auto Loan
NPR. 633
+2 Level in Nepal or abroad.
Loan Against
Features of Education Loan FD NPR. 19 TOTAL INCOME
NPR 3,129 Home
Cost accepted for education loan Loan-OD
NPR. 394
Fees payable to college/institute Gold Loan
NPR. 55
Cost of educational materials
Loan against
Travelling cost Other Loans Share NPR. 179
NPR. 63

E. Treasury
The Bank operates a full-fledged Treasury Department within
Trading Gain
the parameters of the foreign exchange rules and regulations 24%
issued by Nepal Rastra Bank (NRB) – Central Bank of Nepal.
Treasury has moved beyond its traditional role of managing
and monitoring the bank’s fund position and overall asset Treasury sub
segment income
liability position to a role where it is involved directly in profit
centered activities.
The Bank offers a full range of treasury services, which includes Investment in
T- bills and Govt
buy/sell of foreign currencies in both spot and forward market, Bonds
money market dealings, buy/sell of government treasury bills/ 76%
bonds and treasury advisory services. It looks into Bank’s

liquidity & market risk management, ALM, Bank’s balance sheet
F. Transaction Banking
management, transfer pricing, investment and correspondent
banking. The core treasury operations comprise the balance The income from card (debit card/credit card) sales, income
sheet management function, the client-related corporate from sales of Bank assurance, mobile and SMS banking,
markets business and the proprietary trading activity. The customer services fees, agency remittance commissions,
principal responsibilities of the Treasury included management locker fees, cheque processing fees, etc. are revenue items of
of liquidity and exposure to market risks. this segment. Expenses of this segment comprise personnel
expenses and operating expenses.
Treasury’s primary earnings are in the form of exchange
income which comes from proactive management of foreign
exchange which basically comes from trade finance activities
and partnership with remittance agencies. Bank’s Treasury is Cards and
New Channel
also a major participant in the FX Forward market. The Bank 41%
deals in FX Forward for balance sheet management and market
making purposes whereby the Bank offers forward products to
its customers, enabling them to hedge their risks. Transaction
Banking Sub
Major responsibilities of Treasury Segment Income
Manage local and foreign currency position of the Bank
(including buying/selling foreign currencies, lending/
borrowing foreign and local currency, swapping one
currency against the other, buying/ selling bullion, or any
other task to manage the overall fund position of the Bank) Other Transaction
Banking Services
Monitoring and management of cash reserve ratio, credit 59%
to deposit ratio, and liquidity ratio, statutory liquidity ratio
G. Others
Foreign exchange rate publication and advice to branches
All other revenues and expenses which cannot be classified in
Management of the Bank’s investment portfolio for both
the above-mentioned segments fall under this segment. The
foreign currency and local currency
income from sale of assets and other fees and commissions
Execution of forward contract deals are revenue items of this segment. Unattributable personnel
Relationship management with foreign banks for counter expenses, operating expenses and written-off assets are
guarantees business expense items of this segment.
Development and sales of various Treasury products
Corporate Banking, Retail Banking, SME Banking, DSL Banking,
Management of deposit/lending relationships of selected Transaction Banking, and Treasury comprise at least 75% of
institutions/corporate our total revenue. Hence, these operations are treated as
reportable segments, and the remaining are classified under
other segments.

1.14 PRODUCTS AND SERVICES
NEW PREMIUM SUPER CHAMATKARIK

BACHAT KHATA
New Premium Super Chamatkarik Bachat Khata is a specially designed saving account
to transform the way of managing the hard earned money. New Premium Super
Chamatkarik Bachat Khata accommodates exclusive benefits and competitive rates to
help you to grow your fund. art vftf
Eligibility : General public of all age, income level, and any gender.
Diamond Gold Silver

Minimum Balance NPR 50,000 NPR 25,000 NPR 1,000
Interest Rate 5.5% p.a 5.5% p.a 5.5% p.a
Accidental Coverage of Rs. 1,000,000
N/A N/A
Insurance for account holder
Coverage of Rs. 1,000,000
Critical Insurance N/A N/A
for account holder
Coverage of Rs. 100,000
Medical Insurance N/A N/A
for account holder
Debit Card Free for the first year Free for the first year Free for the first year
Free joining and issuance
Credit Card As per STC As per STC
fee for the first year
Mobile Banking Free for the first year Free for the first year Free for the first year
DEMAT Account Free for the first year As per STC As per STC
ATM Withdrawal Free from all ATMs
Free from all ATMs in Nepal Free from all ATMs in Nepal
Charges in Nepal

JESTHA NAGARIK BACHAT KHATA
New Premium Super Chamatkarik Jestha Nagarik Bachat
Khata is the highest interest-bearing saving account specially
designed for senior citizens of 55 years & above who wants
value for their saving and security of their funds. Our insurance
facility up to Rs. 2.1 million will give you a sense of safety while
the Home Banking facility will give you convenience.

A special benefit for senior citizens is an additional 0.5% interest rate on the published interest rate of Fixed Deposit.
Diamond Gold Silver

Accidental Insurance Coverage of Rs. 1,000,000 for account holder N/A N/A
Critical Insurance Coverage of Rs. 1,000,000 for account holder N/A N/A
Medical Insurance Coverage of Rs. 100,000 for account holder N/A N/A
Credit Card Free joining and issuance fee for the first year As per STC As per STC
Free from all ATMs in Free from all ATMs in
ATM Withdrawal Charges Free from all ATMs in Nepal
Nepal Nepal
Discount on Loan Processing
Flat 25 basis point N/A N/A
Fee
Additional 0.5% on the published interest rate of Fixed
Higher Interest Rate on FD
Deposit

NARI BACHAT KHATA
NIC ASIA Bank brings special saving account for the financial independence of women with its
'New Premium Super Chamatkarik Nari Bachat Khata'. It is an interest bearing saving account for all
age group of all segment which includes salaried, self-employed, professionals, businesswomen
and techno-savvy female individuals who are Nepali Citizens/Indian National/ foreigners/Minors.
This New Premium Super Chamatkarik offer for Women has Exclusive benefits of Insurance, ATM
Withdrawal, Loyalty program, Privilege Service and Special discount on loan administrative fees
& interest rates.
Diamond Gold Silver

Accidental Insurance Coverage of Rs. 1,000,000 for account holder N/A N/A
Critical Insurance Coverage of Rs. 1,000,000 for account holder N/A N/A
Medical Insurance Coverage of Rs. 100,000 for account holder N/A N/A
Credit Card Free joining and issuance fee for the first year As per STC As per STC
ATM Withdrawal Charges Free from all ATMs in Nepal Free from all ATMs in Nepal Free from all ATMs in Nepal
Discount on Loan Processing Fee Flat 25 basis point N/A N/A


BABU NANI BACHAT KHATA
Every parent wants a better future for their child and to pursue
a better future NIC ASIA bank feels the sense of responsibility
to teach a child the value of money.For the best solution, the
Bank has offered “New Premium Super Chamatkarik Babu Nani
Bachat Khata” with the highest interest rate to support saving
habit of a child below the age of 18 years.
Maximum Age Children up to age of 18

Minimum Balance Nil
Interest Rate 5.5% p.a
Issuance of Cheque Book Free on demand
Monthly fee transfer facility among
Free standing instruction
listed schools

TALAB BACHAT KHATA
This product is targeted for salaried people and has two variants i.e. Prime and Normal to differentiate for insurance coverage. The
Prime variant is for those institutions having a minimum of 50 employees with average salary of Rs. 30k per months, and under
normal variant is for institutions having a minimum of 5 and less than 50 employees.
Normal Prime
Minimum Balance Zero Zero
Minimum Average Salary N/A NPR 25,000
Interest Rate 5.5% p.a 5.5% p.a
Debit Card Free for the first year Free for the first year
Credit Card Free joining and issuance fee for the first year Free joining and issuance fee for the first year
Mobile Banking Free for the first year Free for the first year
Accidental Insurance N/A Coverage of Rs. 1,000,000 for account holder

Critical Insurance N/A Coverage of Rs. 500,000 for account holder
Medical Insurance N/A Coverage of Rs. 100,000 for account holder

BIDHYARTHI BACHAT KHATA
We provide financial service along with developing habits of saving
for students who are the future of our nation. “New Premium Super
Chamatkarik Bidhyarthi Bachat Khata” helps enhance the student’s
knowledge and experience on the offered financial solutions. This
product also provides the facility of education loan to support your
dreams of further studies.
Target Segment Students having valid identity card

Minimum Balance Nil
Interest Rate 5.5% p.a
Issuance of Cheque Book Free on demand
Education Loan Facility Available as guided by Bank's policy
NEW PREMIUM SUPER CHAMATKARIK NEW PREMIUM SUPER CHAMATKARIK

BAIDESHIK ROJGAR BACHAT KHATA FIXED DEPOSIT
The Bank is determined to provide you service even though New Premium Super Chamatkarik Fixed Deposit Account is only
you are far from your home country. New Premium Super the term deposit products in the market which provides you
Chamatkarik Baideshik Rojgar Bachat Khata” is specifically the highest-earning at interest rate of 8.25% with insurance
designed for individuals who are planning to go abroad for coverage facility up to Rs. 21 lakhs. To meet the short term
employment and those who are already residing abroad. obligations, the Bank provides you credit facility up to 90% of
your Fixed Deposit. The tenure of fixed deposit can be from 3
This product offers the highest interest rate on your hard- months to 1 year.
earned money and provides you Rs. 100 cashback for each
remittance sends via NIC ASIA Remit to your Bank account.

SWOROJGAR BACHAT KHATA
New Premium Super Chamatkarik Swarojgar Bachat Khata” is
an interest bearing customized savings account scheme to
provide complete financial and lifestyle solutions for the self-
employed. Self-employed people of all age groups and any
income level can open this account. And either of the spouses
can open an account and enjoy all facilities available under this
scheme irrespective of a registered name in proprietorship/
organization owned by them based on the relationship
certificate.
It has special facility of discount on loan administrative fee for

the account holder.

NEW PREMIUM SUPER CHAMATKARIK NEW PREMIUM SUPER CHAMATKARIK

MASIK NICHHEP KHATA SAHAJ BACHAT KHATA
"New Premium Super Chamatkarik Masik Nichhep Khata" is a New Super Chamatkarik Sahaj Bachat Khata is designed
special kind of term deposit offered by NIC ASIA Bank to its exclusively to the general public of all income level, age group
customers with regular incomes that enables them to transfer and gender with no minimum balance requirement for opening
a certain amount every month into their Premium Masik an account providing interest at 5.5% p.a
Nichhep account from other normal accounts and earn interest
at the rate applicable to fixed deposits.
SERVICES
This deposit facility is available to those individuals who have
a saving account with NIC ASIA Bank. A customer with pre- A. Viber Banking Service
existing savings account at NIC ASIA Bank can instruct the The Bank began to offer Viber banking service to its customers
Bank to transfer a certain portion of their monthly income from the review period. Viber banking is a digital technology
(in the multiple of 500) to PremiumMasik Nichhep Khata. The that allows you to enjoy various services by interacting with
advantage for the customer is that they can earn an interest the Bank directly through Viber, the popular internet-based
rate of up to 8.75% in Premium Masik Nichhep Khata. cross-platform instant messaging and voice over IP (VoIP)
application, available for free from Google Play Store and App
All Nepalese individual customers including minors are eligible
Store.
to open this account. The minimum period of deposit is 3
months and the maximum is 10 years but the pre-mature This service can be easily used on mobile, computer, tablets,
withdrawal of Premium Masik Nichhep Khata is allowed if the laptop, etc. The Bank has got into viber banking services to
period of the Premium Masik Nichhep Khata has crossed 50% make customer service technology-friendly. With the use of
of the agreed duration. Viber banking service, customers can get information about
the following:
Location of Bank branches and ATMs
Banking hours
Balance enquiry
Mini statement
Foreign exchange rates
Online account opening
Check loan eligibility
Interest rate and other information of the Bank
B. Missed Call Banking

The Bank has been providing digital banking service to its
account holders with the aim of easing financial transactions.
NIC ASIA Bank introduced the missed-call banking service
under its modern banking services. This service has been in
effect since July 17, 2018.
Under this service, account holders of NIC ASIA Bank get

an SMS regarding their balance, if they give a missed call
to 9801227733. Likewise, account holders also get a mini-
statement by giving a missed call to 9801227744. The mini-
statement gives details on the previous three transactions
under one message. Similarly, account holders can give a
missed call to 9801227755 for call back service. Bank staffs call
back to the customers after receiving a missed call under this
feature.

C. Mobile Banking NIC ASIA REMIT
Mobile banking is a platform provided to the customers NIC ASIA Remit, a remittance product of NIC ASIA Bank Limited
enabling them to access their accounts through mobile phones is a premium, online, customer-focused Money Transfer Service
in a secure manner. The mobile banking service gives customer designed to meet the need of customers to send/receive
account information and real-time transaction capabilities remittance from various countries as well as to facilitate
from mobile phones at a true “anywhere, anytime, anyhow” domestic fund transfer within the country. It is a web-based
convenience. It also allows sending informational messages money transfer system which can be accessed from all the
about the Bank’s products and services to customers. Mobile branches of the bank, Extension Counters, Branchless Banking
Banking service of NIC ASIA shall allow customers to carry out Units and more than 5,500 active payout locations covering
various informational and financial transactions through their every prime and rural areas of the country.
mobile phones as follows:
The bank has a dedicated Remittance Business Unit,
Enquire account information which comprises of an experienced and energetic team of
Mini statement view competent staff to provide exceptional customer services
during remittance payments. Currently, NIC ASIA Remit has
Funds transfer between registered accounts of the
its presence in various countries including South Korea, India,
customers
Canada, UAE and Malaysia. The bank plans to further expand
Funds transfer to any customer’s account within the bank its remittance services to the Nepalese Migrants residing in
Foreign Exchange Rate inquiry various other countries like Qatar, U.K, Japan, Saudi Arabia,
Oman, Kuwait, Bahrain, and others.
Bill Payment of NTC Land Line / NTC GSM Post-Paid
Competitive Features of NIC ASIA Remit
NTC GSM/CDMA Pre-Paid recharge PIN purchase
Convenient, affordable and accessible remittance service
Merchant Payments
to take pride in happy customers.
The scope of Mobile Banking services is not only be limited Wider payout network to make the payment of customers
to the features mentioned above and is subject to review at their doorstep.
according to market trends and customer needs. Safe, secure, reliable and fast means of transfer.
Competitive prices and exchange rate to the customer.
Applies automated AML solutions across its network for
effective KYC management, risk assessment, transaction
monitoring, etc.

Fund Transfer
Travels & Tours
Buses
Movies Electricity
NIC ASIA
MoBank
THE REAL M O B I L E BA NK I NG
Insurance
Airlines
Internet
Education Fees
TV
NIC ASIA
AVAILABLE ON
Download on the Available on the
App Store Google Play

NIC ASIA's MoBank is safe and feature-rich NIC ASIA’s MoBank has made my life
application that allows me effortless user very easy. No more staying on queue to
experience. Therefore, I don't carry cash pay bills and you can transfer fund as
anymore, I carry MoBank. I do all possible well. Quick access, easy service.
banking on this Mobile App.
Rashu Shiwakoti, Student
Swornima Chhetri, Student
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ug{ ;lhnf] x'g] ePsfn] clwsf+z u|fxsn] MoBank sfdx¿ ug{ EofO{/x]sf] x'Flbg . t/ Pg cfO{ ;L
App k|of]u ug{ ?rfpg' x'G5 . QR Code Plzof a}+ssf] df]jfO{n a}lsª\u ;]jf lnPb]lv d]/f]
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. Pg cfO{ ;L Plzof a}+ssf] MoBank App n] u|fxs sf/f]af/x¿ Pg cfO{ ;L Plzof a}+ssf] df]jfOn
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Krishna Pyakurel, Owner - Marich Cafe Dr. Bijay Mehta, Medical Officer
The best thing that I like about NIC Asia’s

MoBank is you can pay your school/ college
fees. It’s a very convenient featues.
Astha Pandit, (Student)

1.15 PRODUCT PORTFOLIO
DEPOSIT PRODUCTS
Total Deposit of Bank TOTAL DEPOSIT

NPR 180.5 billion
Institutional: 44% FCY: 6%
Individual: 56% LCY: 94%
Total Market Share
In terms of Amount Fixed: 47% FCY Deposit

6.35% Saving: 32% Individuals: 1%
Money at Call: 13% Domestic Instutions
In terms of Account
Current: 8% and
8.24% Margin: 0% Companies: 99%
Deposit Account Number Percentage (%)

Current: 63,895 3.94%
Saving: 1,479,868 91.36%
Fixed: 42,426 2.62%
Money at Call: 27,612 1.70%
Margin: 5,942 0.37%
Total: 1,619,743 100.00%

LOAN PRODUCTS
Total Loan of Bank TOTAL LOAN

NPR 150.1 billion Retail Lending: 43%
Deprived Sector Lending: 9%
Total Loan Market Share Small and Medium Enterprises lending: 31%
6.02% Corporate & Project Finance: 17%
Corporate & Project Finance Deprived Sector Lending Retail Lending

1. Project Finance 1. Commercial Agriculture 1. Loan Against Mortgaged Property
2. Consortium Finance Loan a. Ghar Subidha
3. Term Loan 2. Laghu Udham Karza b. Sajilo Karza
4. Bridge Financing 3. Agricultural Equipment c. Sajilo Subidha
Loan
5. Working Capital Financing d. Premium Home Loan
4. Low Cost Housing
6. Export Finance 2. Auto Loan
5. Kisan Karza
7. Import Finance a. Black Plated Vehicle Financing
8. Clean bills purchased and discounted b. Red Plated Vehicle Financing
c. Green Plated Vehicle Financing
d. Used/ Second Hand Vehicle
Financing
Small and Medium Enterprises Lending
3. Loan Against Shares
1. Easy Business Loan
4. Personal Loan
2. Small Business Loan (Business Overdraft, Term Loan, Demand Loan)
5. Education Loan
3. Medium Enterprises Loan (Business Overdraft, Term Loan, Demand Loan)
6. Gold Loan
4. Mid Market Loan (Business Overdraft, Term Loan, Demand Loan)
7. Loyalty Financing
8. Foreign Employment Loan
9. Credit Cards

1.16 BANKING INDUSTRY INDICATOR

Industry-'A' Class Bank Industry
Total Assets Total Deposits
Growth Rate (%) of Total Assets Growth Rate (%) of Total Deposits
66% 74%
Percentage
38% Percentage
30%
23% 27% 25%
23% 22%
20% 18% 18%
19% 19%
18% 20% 19% 21% 19% 16%

2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19
Industry NIC ASIA Bank Industry NIC ASIA Bank
Total Loans and Advances Net Profit
Growth Rate (%) of Total Loans and Advances Growth Rate (%) of Net Profit
68% 126%
Percentage
Percentage
40%
57%
25% 28%
22% 23%
24%
18% 22%
27%
23% 32% 36%
18%
19%
13% -2%
2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19
-18%

Total Operating Income Interest Income
77%
Growth Rate (%) of Total Operating Income Growth Rate (%) of Interest Income
91%
49%
38%
Percentage
Percentage
61%
49%
27% 43%
24%
23% 23%
43% 26%
14%
24% 12%
6%
12%
2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19
-2%
-6% Industry NIC ASIA Bank Industry NIC ASIA Bank
Shareholders’ Fund Total Credits/Deposits
Sharholders' Fund Growth Rate Credits/Deposit (%) Over the Year 87%
44%
85%
84%
83%
32%
80% 84%
36% 79%
Percentage
Percentage
82%
31% 20%
21%
74% 78%
12%
19%
16%
11%
2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19
Other Key Indicators
NPL to 0.46
Total Loan (%)
1.40
Net Worth per 169.41

Share (NPR)
175.46
13.09
P/E Ratio
13.89
EPS 34.22
(NPR)
26.21
(Source: Nepal Rastra Bank) "A" Class Bank Industry NIC ASIA Bank

1.17 21 ST
AGM IN PICTURES

1.18 AWARDS AND RECOGNITIONS
SAFA - Certificate of Merit, Private Sector Banks 2018 ICAN - Best Presented Annual Report (BPA) Award, 2018
Crity Award for Crity Award for Crity Award for

Best Integrated Ad Campaign Best Financial Sector Campaign Best Copywriter (Print/TVC/Radio)

Bank of the Year 2007 Bank of the Year 2013
Best Brand Award

(Banking Sector)
Best Employer Brand Award ISO 9001:2000 Certification

Hon' Finance Minister Dr. Yuba Raj Khatiwada awarding ICAN Best Presented Annual Report Award to
CEO Mr. Roshan Kumar Neupane

1.19 CREDIT RATING
CARE Ratings Nepal Limited has assigned

Issuer Rating of CARE-NP A (Is)” to NIC ASIA
Bank on July 2018. CARE-NP A (Is) indicates
that issuers with this rating are considered
to offer adequate degree of safety regard-
ing timely servicing of financial obligations
in Nepal. Such issuers carry low credit risk.
NIC ASIA Bank’s credit rating has been

done by ICRA Nepal Limited (ICRA Nepal),
which has assigned Issuer Rating of “[ICRA
NP - IR] A-“ as on May 2017. “[ICRA NP - IR]
A-” rating is considered as adequate credit
quality rating, and the rated entity carries
average credit risk.

NIC ASIA Laghubitta NIC ASIA Network of
Bittiya Sanstha Capital NIC ASIA Bank
MANAGEMENT
DISCUSSIONS
AND
ANALYSIS
2.1 Financial Highlights.......................................................90
2.2 Vertical and Horizontal Analysis.............................98
2.3 Business Values...........................................................100
2.4 Future Prospects and Strategies......................... 103
2.5 Human Capital and Human Resource
Accounting......................................................................108
2.6 Stakeholder Analysis....................................................113
2.7 Economic Outlook........................................................ 118
2.8 Business Environment Analysis.............................120
2.9 Stock Price Statistics...................................................124
2.10 Experience Transformation......................................125
2.11 Experience Transformation Strategy................. 130
2.12 Investors’ Relation.......................................................133

2
2.1 FINANCIAL HIGHLIGHTS

Annual
CAGR
FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 Growth
(5 years)
(18-19)
Total Loans and Advances (Gross) (NPR Million) 43,330.02 59,498.83 72,561.82 121,745.36 150,108.00 23.30% 36.43%
Total Assets (NPR Million) 60,519.40 80,456.52 99,274.04 170,943.18 217,697.05 27.35% 37.72%
Net Assets (NPR Million) 5,498.78 7,382.84 10,116.18 11,670.46 14,935.74 27.98% 28.38%
Total Deposits (NPR Million) 53,477.18 69,488.00 87,678.37 151,219.12 180,875.00 19.41% 35.56%
Shareholders Fund (NPR Million) 5,498.78 7,382.84 10,116.18 11,670.46 14,935.74 27.98% 28.38%
Total Operating Income (NPR Million) 2,102.21 2,613.25 3,433.54 5,358.14 9,506.23 77.42% 45.83%
Profit Before Tax (NPR Million) 970.69 1,532.70 2,088.13 1,810.60 4,440.76 145.26% 46.25%
Profit After Tax (NPR Million) 680.32 1,066.91 1,473.47 1,334.86 3,023.28 126.49% 45.19%
Gross Revenue (NPR Million) 4,049.38 4,545.60 7,058.63 14,511.97 21,594.50 48.80% 51.96%
G.P Ratio (Percentage) 42.21 46.23 38.20 23.39 35.00 49.64% -4.57%
Return on Assets (Percentage) 1.21 1.51 1.64 0.97 1.56 59.71% 6.38%
Return on Equity (Percentage) 13.05 16.50 16.84 12.09 22.73 88.00% 14.88%
Return on Capital Employed (Percentage) 12.49 12.44 13.83 12.24 13.32 8.82% 1.62%
Liquidity Ratio (%) 28.91 23.79 25.80 24.45 26.05 6.54% -2.06%
Net Profit Per Employee (NPR Million) 0.93 0.97 0.84 0.58 0.87 50.00% -1.65%
Staff Cost Per Employee (NPR Million) 0.58 0.49 0.48 0.78 0.71 -8.97% 5.19%
Total Credit/Deposits (Percentage) 81.03 85.62 83.70 86.30 84.55 -2.03% 1.07%
Interest Income/Loans and Advances & Investments (Percentage) 8.31 7.77 9.10 10.12 11.74 15.96% 9.03%
Interest Expense/Total Deposits and Borrowings (Percentage) 5.12 4.41 5.61 6.53 6.71 2.86% 7.00%
Net Profit/Total Loan (Multiple) 1.57 1.79 2.03 1.10 2.00 82.15% 6.20%
Earning Per Share (NPR) 25.59 28.31 23.06 16.62 34.22 105.90% 7.54%
Dividend(including bonus share) on Share Capital (Percentage) 41.05 27.37 21.05 10.53 21.05 110.53% -15.38%
Cash Dividend on Share Capital (Percentage) 2.05 1.37 1.05 0.53 11.05 2001.33% 52.33%
Dividend Cover Ratio (Cash Dividend) (Ratio) 12.47 17.04 20.97 31.60 3.10 -90.20% -29.41%
Price Earning (PE) Ratio (Ratio) 24.11 28.19 19.30 19.01 13.09 -31.14% -14.16%
Stock Performance (Closing stock price per stock) 617.00 798.00 445.00 316.00 448.00 41.77% -7.69%
Market Capitalization (NPR Million) 16,399.86 36,508.50 29,779.40 25,377.96 39,576.32 55.95% 24.64%
Capital Adequacy Ratio (Percentage) 12.49 12.44 13.83 12.24 13.32 8.80% 1.62%
No. of Shares (Million) 26.58 45.75 66.92 80.31 88.34 10.00% 35.02%

Total Loans and Advances Net Assets
The total loans and advances reached NPR 150,108 million Net assets represent total assets less total liabilities. The
as on end of review year. The Bank achieved growth rate Bank’s Net Assets has upward trend with compound annual
of 23.30% on loans and advances, from the last fiscal year growth rate of 28.38% of last five years and during the
figure of NPR 121,745 million. The industry’s average growth review period. The net assets figure rose from NPR 11,670
rate during the same period was 19%. million to 14,936 with growth rate of 27.98%.
The bank achieved compound annual growth rate (CAGR)

of 36.43% over the last five years period positioning as the 5,499 7,383 10,117 11,670 14,936
Nepal’s largest private sector bank in terms of total loans

and advances.
43,330 59,499 72,562 121,745 150,108
NRP Millions
NRP Millions
2014/15 2015/16 2016/17 2017/18 2018/19
2014/15 2015/16 2016/17 2017/18 2018/19
Total Assets Total Deposits

Total Assets increase or decrease with the volume of NIC ASIA is the Nepal’s largest private sector bank in terms
business and represents the total balance sheet value of of deposits. With increasing customers every day, the Bank
the Bank. The Bank’s balance sheet size is consistently has been able to achieve enormous growth in deposits.
increasing since last five years with CAGR of 37.72%. During FY 17-18, the bank had total deposits of NPR 151,219
million while in FY 18-19, the figure of total deposits reached
During the review year, Bank’s total assets increased from to NPR 180,875 million with growth rate of 19%. Compound
NPR 170,943 million to NPR 217,697 million with growth rate annual growth rate of Bank is 35.56% of last five years for
of 27.35%. deposits.
60,519 80,457 99,274 170,943 217,697 53,477 69,488 87,678 151,219 180,875
NRP Millions
NRP Millions
2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19

Shareholders Fund Profit before Tax

Total assets less total liabilities represent Shareholders Profit earned by the bank before all taxation related
fund. Over the last five years, shareholders fund is steadily expenses is Profit Before Tax (PBT). Beside a mere decline
growing with CAGR of 28.38%. The Bank’s share capital in FY 2017-18 due to increased operating expense, the bank
has increased by 27.98% during FY 2018/19 due to bonus has been making growth in PBT. The Bank earned massive
share and with increasing retained earnings. In FY 2017-18, Profit before Tax amounting NPR 4,441 million during FY
the shareholders fund was NPR 11,670 million and it is NPR 2018-19 achieving growth rate of 145.26%. NIC ASIA is
14,936 million in FY 2018-19 able to achieve such enormous figure due to its footprint
expansion and improvement in margins. With increasing
operating profit of Bank, the Bank achieved CAGR of 46.25%.
5,499 7,383 10,116 11,670 14,936
971 1,533 2,088 1,811 4,441
NRP Millions
NRP Millions
2014/15 2015/16 2016/17 2017/18 2018/19

2014/15 2015/16 2016/17 2017/18 2018/19
Total Operating Income

Profit earned from normal course of business is operating Profit after Tax
income. Increasing interest income, fees and commission
Profit after Tax (PAT) is the net amount earned by the Bank
income have boosted the operating income of the
after deduction of all the tax expenses from Profit before Tax.
company. The Bank’s operating income is in increasing
Other than FY 2017-18, the Bank has positive performance
trend since last five years. The banked earned operating
in Profit after Tax. NIC ASIA is one of the Nepal’s largest
income of NPR 5,358 million in FY 2017-19, while it earned
Private Sector Bank in terms of Profit after Tax. The Bank’s
NPR 9,506 million with impressive growth rate of 77.42%.
compound annual growth rate during previous five years is
NIC ASIA is the Nepal’s No.1 private sector Bank in terms
45.19%. The Bank achieved annual growth of 126.49% to
of total operating income. Compound growth rate over the
reach NPR 3,023 million from NPR 1,335 million.
five period is 45.83%.
680 1,067 1,473 1,335 3,023

2,102 2,613 3,434 5,358 9,506
NRP Millions
NRP Millions
2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19

Gross Revenue Return on Assets
Total interest and fees and commission earned by the Bank The percentage of profit earned by the business during
without deducting related expenses is Gross Revenue. the year as compared to its total assets value is Return on
Increasing number of branches and customer base, growth Total Assets. The Bank had steady increment in Return on
in loans and advances, the Bank achieved annual growth of Total Assets till 2017-18, the operational expenses grew
48.80% in gross revenue during the review period. Gross due to footprint expansion on the same year. But, the Bank
Revenue is in increasing trend since last five years with regained its increasing trend in FY 2018-19 from 0.97% to
CAGR of 51.96%. During FY 2017-18, the gross revenue was 1.56%. Return of Total Assets’ compound annual growth
NPR 14,512 million and it reached impressive figure of NPR rate is 6.38%.
21,595 million during 2018-19.
4,049 4,546 7,051 14,512 21,595 1.21 1.51 1.64 0.97 1.56
NRP Millions
Percentage
2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19
Gross Profit Ratio Return on Equity

Gross Profit Ratio represents ratio of net interest and fees Percentage of profit earned compared to equity outstanding
and commission income to gross revenue. The Bank was as on end of period is called Return on Equity. Return on
able to increase the Gross Profit ratio in FY 2018-19 from Equity is at all time high of last five years as on end of FY
23.39% to 35% and during FY 2017/18, the gross profit ratio 2018-19 standing at 22.73%. The annual growth rate on FY
was declined due to bank's strategy decision to expand its 2018-19 is 88%. Compound annual growth rate is 14.88% of
footprint. Compound Annual Growth Rate in GP ratio of last the last five years.
five years is at negative.
13.05 16.5 16.84 12.09 22.73
42.21 46.23 38.2 23.39 35.0

Percentage
Percentage
2014/15 2015/16 2016/17 2017/18 2018/19
2014/15 2015/16 2016/17 2017/18 2018/19

Return on Capital Employed Net Profit per Employee

Return on Capital Employed is a percentage of net operating Net profit per employee represents average net profit
profit to capital employed which represents how efficiently earned by a staff of the bank. With branch expansion,
the business can generate profit from its employed capital. the bank had to recruit high number of skilled manpower;
In year 2017-18, steady growth was disturbed but it has hence the net profit per employee decreased in 2017-18. In
regained the upward trend in 2018-19. Return on capital FY 2018-19, net profit per employee had positive trend with
employed increased from 12.24% to 13.32% in FY 2018-19 at growth of 50% to reach NPR 0.87 million.
growth rate of 8.82%
12.49 12.44 13.83 12.24 13.32 0.93 0.97 0.84 0.58 0.87
Percentage
NPR Million
2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19
Liquidity Ratio
Liquidity ratio is the ratio that measure the ability of a
company to meet its short term debt obligations. The ratio Staff Cost per Employee
measure the ability of a company to pay off its short-term Average staff expenses incurred per employee is Staff Cost
liabilities when they fall due. The liquidity ratio is a result per Employee. Bank’s policy to retain skilled employees,
of dividing cash and other liquid assets by the short term promotion to deserving employees, hiring of talented and
borrowings and current liabilities. It shows the number skilled staff affect the staff expense per employee. The
of times the short term debt obligations are covered by cost has declined to NPR 0.71 million per employee during
the cash and liquid assets. The Bank’s liquidity ratio has FY 2018/19 from that of 0.78 million in FY 2017/18.
increased from 24.45% to 26.05% in FY 2018-19 at annual
growth rate of 6.54%. The liquidity ratio was 28.91% at FY
0.58 0.49 0.48 0.78 0.71
2014-15, it dipped to 23.79% on FY 2015-16, but has gradually
increased since then.
28.91 23.79 25.80 24.45 26.05

NPR Million
Percentage
2014/15 2015/16 2016/17 2017/18 2018/19
2014/15 2015/16 2016/17 2017/18 2018/19

Total Credits per Deposits Interest Expense/Total Deposits and Borrowings
It represents the credit provided by the Bank in comparison It is ratio of interest expenses incurred by the Bank in
to deposits collected from the customers. Total Credits/ comparison to total deposits and borrowing. Beside in year
Deposits was showing a fluctuating trend over the last 2015-16, the ratio is in increasing order due to increase in
five years. While the figure was highest of last five years deposits cost. In FY 2017-18, the ratio was at 6.53% and it
in 2017-18, it has significantly declined by 2.03% to settle increased by 2.86% to reach 6.71%.
at 84.55%.
5.12 4.41 5.61 6.53 6.71

81.03 85.62 83.70 86.30 84.55
Percentage
Percentage
2014/15 2015/16 2016/17 2017/18 2018/19

2014/15 2015/16 2016/17 2017/18 2018/19
Interest Income/Loans and Advances & Investments Net Profit to Total Loan
It represents the interest income earned by the bank in Net Profit/Total Loan represents ratio of the Net Profit
comparison to total of loans and advances & investments. earned by the Bank in comparison to total loan of the Bank.
The figure had a downward movement in 2015-16 but it has The ratio had decreased in 2017-18 but regained its upward
been moving upward after that. Interest income to loans momentum in FY 2018-19 with growth rate of 82.15%. With
and advances & investments during 2018-19 is at all time increasing net profit of the bank and loan, net profit per
high at 11.74%. It has annual growth rate 15.96% during the total loan ratio has increased from 1.10 in FY 2017-18 to 2.00
review period. The CGAR during last five years is 9.03%. during FY 2018-19.
8.31 7.77 9.1 10.12 11.74

1.57 1.79 2.03 1.10 2.00
Multiple
Percentage
2014/15 2015/16 2016/17 2017/18 2018/19

2014/15 2015/16 2016/17 2017/18 2018/19

Earning per Share Cash dividend on share capital

Earning per Share (EPS) represents the share of each of The Bank in FY 2018-19 has declared cash dividend of
the outstanding ordinary share in the profit earned during 11.0526% which includes 1.0526% for taxation purpose for
the year by the Bank. EPS was decreasing till 2017-18 but it the dividend declared by the bank.
has increased by 105.90% during 2018-19. Despite issue of
bonus share, the bank was able to grow EPS at such rate
due to increase in profit. EPS reached from MPR 16.62 to 2.05 1.37 1.05 0.53 11.05
MPR 34.22 at the end of FY 2018-19.
25.29 28.31 23.06 16.62 34.22
Percentage
NPR
2014/15 2015/16 2016/17 2017/18 2018/19
Dividend Cover Ratio (Cash Dividend)

2014/15 2015/16 2016/17 2017/18 2018/19
Dividend Cover Ratio is a financial metric that measures
the number of times the company can pay dividends to its
shareholders from its net profit. The dividend cover ratio
Dividend (including bonus share) on share capital is the ratio of the company’s net income divided by the
dividend paid to shareholders. The Bank’s dividend cover
The bank has been continuously distributing dividend to its
ratio for FY 2018-19 is 3.10 while it was 31.60 during FY 2017-
valued investors either in cash or in form of bonus share.
18, the decrement is due to increase in cash dividend in FY
Last fiscal year, the Bank has distributed 10.526% (including
2018-19.
10% bonus share) for the FY 2018-19, 21.0526% (including
10% bonus share) was declared.
12.47 17.04 20.97 31.6 3.1
41.05 27.37 21.05 10.53 21.05

Ratio
Percentage
2014/15 2015/16 2016/17 2017/18 2018/19
2014/15 2015/16 2016/17 2017/18 2018/19

Price Earning (PE) Ratio Market Capitalization
Price Earning (PE) Ratio is ratio of earning per share in Market Capitalization is total market value of all outstanding
comparison to current share price. PE Ratio is in decreasing shares of Bank. As the share price trends were decreasing, the
market capitalization value of the Bank was decreasing too.
trend since FY 2015-16. In FY 2017-18, the PE Ratio was 19.01
However, the share price increased by 41.77% as on end of FY
and it has further declined by 31.14% to 13.09 as on end of
2018-19 and issuance of bonus share, market capitalization
FY 2018-19. increased by 55.95%. The Bank’s market capitalization was
NPR 25,377.96 million as on beginning of FY 2018-19, it reached
NPR 39,576.32 million in the end of the year.
24.11 28.19 19.30 19.01 13.09 16,400 36,509 29,779 25,378 39,576
NPR Million
Percentage
2014/15 2015/16 2016/17 2017/18 2018/19
2014/15 2015/16 2016/17 2017/18 2018/19

Number of Shares
With the issuance of bonus share and right share, the number
of shares of the Bank has increased. The Bank’s number of
share increased to 88.34 million from 80.31 million of issuance
Stock Performance (closing stock price per stock) of proposed 10% bonus share.
Due to adverse market conditions, the prices of shares 26.58 45.75 66.92 80.31 88.34
were not performing well. In FY 2015-16, the price per share
Number in Millions
was NPR 798 while it declined to NPR 316 as on end of FY

2017-18. However, the share price increased by 41.77% as on
end of FY 2018-19. The closing price of share was NPR 448
on end of FY 2018-19.
2014/15 2015/16 2016/17 2017/18 2018/19
617 798 445 316 448

Capital Adequacy Ratio
Capital Adequacy Ratio represents the measure of capital of
a bank’s eligible capital expressed as a percentage of its risk
weighted asset. There were slight fluctuations in the CAR of
the Bank over the last five years. However, it is always higher
NPR
than the regulatory requirement and that required by the

ICAAP of the Bank.
12.49 12.44 13.83 12.24 13.32
Percentage
2014/15 2015/16 2016/17 2017/18 2018/19
2014/15 2015/16 2016/17 2017/18 2018/19

2.2 VERTICAL AND HORIZONTAL ANALYSIS

STATEMENT OF FINANCIAL POSITION
Mid Horizontal Analysis Variance Vertical Analysis Variance

Particulars
July, 2019 July, 2018 2018 to 2019 2019 2018
Assets
Cash and cash equivalent 20,214.54 8,132.49 148.57% 9.29% 4.76%
Due from Nepal Rastra Bank 16,097.92 15,860.73 1.50% 7.39% 9.28%
Placement with Bank and Financial Institutions 383.95 313.93 22.30% 0.18% 0.18%
Derivative financial instruments. 7,006.01 1,266.02 453.39% 3.22% 0.74%
Other trading assets 7.44 9.65 -22.92% 0.00% 0.01%
Loan and advances to B/FIs 6,923.29 4,658.15 48.63% 3.18% 2.72%
Loans and advances to customers 142,574.01 115,804.62 23.12% 65.49% 67.74%
Investment securities 18,152.96 14,132.77 28.45% 8.34% 8.27%
Current tax assets - - 0.00% 0.00%
Investment in subsidiaries 1,204.50 270.00 346.11% 0.55% 0.16%
Investment in associates - - 0.00% 0.00%
Investment property 275.94 74.38 270.97% 0.13% 0.04%
Property and equipment 2,583.72 1,759.42 46.85% 1.19% 1.03%
Goodwill and Intangible assets 110.49 49.83 121.73% 0.05% 0.03%
Deferred tax assets - - 0.00% 0.00%
Other assets 2,162.29 8,611.18 -74.89% 0.99% 5.04%
Total Assets 217,697.05 170,943.18 27.35% 100.00% 100.00%
Liabilities
Due to Bank and Financial Institutions 8,535.65 11,629.51 -26.60% 3.92% 6.80%
Due to Nepal Rastra Bank 314.54 742.27 -57.62% 0.14% 0.43%
Derivative financial instruments 6,913.41 1,721.81 301.52% 3.18% 1.01%
Deposits from customers 176,820.69 139,589.61 26.67% 81.22% 81.66%
Borrowing - - 0.00% 0.00%
Current Tax Liabilities 242.94 25.03 870.79% 0.11% 0.01%
Provisions - - 0.00% 0.00%
Deferred tax liabilities 178.27 2.81 6233.79% 0.08% 0.00%
Other liabilities 2,045.71 2,073.78 -1.35% 0.94% 1.21%
Debt securities issued 7,710.10 3,487.91 121.05% 3.54% 2.04%
Subordinated Liabilities - - 0.00% 0.00%
Total liabilities 202,761.31 159,272.72 27.30% 93.14% 93.17%
Equity - - 0.00% 0.00%
Share capital 8,834.23 8,031.12 10.00% 4.06% 4.70%
Share premium - - 0.00% 0.00%
Retained earnings 2,112.88 943.65 123.90% 0.97% 0.55%

Particulars
July, 2019 July, 2018 2018 to 2019 2019 2018
Reserves 3,988.63 2,695.68 47.96% 1.83% 1.58%
Total equity attributable to equity holders 14,935.74 11,670.46 27.98% 6.86% 6.83%
Non-controlling interest - - 0.00% 0.00%
Total equity 14,935.74 11,670.46 27.98% 6.86% 6.83%
Total Liabilities and Equity 217,697.05 170,943.18 27.35% 100.00% 100.00%
The Bank’s assets increased by 27.35% during the review year from NPR 170,943.18 million NPR 217,697.05 million, with increase
in loans and advances to customers by 23.30% and deposits by customers by 19.41%. The investment property of the Bank
has increased from NPR 74.38 million to NPR 275.94 million. Booking non banking assets resulted in increase in investment
property.
In vertical analysis, share of loans and advances to customers have decreased from 67.74% to 65.49% also deposits from
customers have a minute decrement from 81.66% to 81.22%.
STATEMENT OF PROFIT OR LOSS

Particulars
July, 2019 July, 2018 2018 to 2019 2019 2018
Interest income 19,345.59 13,545.82 42.82% 100.00% 100.00%

Interest expense 12,385.56 9,336.16 32.66% 64.02% 68.92%
Net interest income 6,960.03 4,209.66 65.33% 35.98% 31.08%
Fees and commission income 2,248.91 966.15 132.77% 11.62% 7.13%
Fees and commission expense 127.60 96.50 32.23% 0.66% 0.71%
Net fee and commission income 2,121.31 869.65 143.93% 10.97% 6.42%
Net interest, fee and commission income 9,081.34 5,079.31 78.79% 46.94% 37.50%
Net trading income 348.92 195.21 78.74% 1.80% 1.44%
Other operating income 75.97 83.62 -9.14% 0.39% 0.62%
Total operating income 9,506.23 5,358.14 77.42% 49.14% 39.56%
Impairment charge/(reversal) for loans and other losses 598.92 304.83 96.47% 3.10% 2.25%
Net operating income 8,907.32 5,053.30 76.27% 46.04% 37.31%
Operating expense
Personnel expenses 2,476.83 1,782.11 38.98% 12.80% 13.16%
Other operating expense 1,712.84 1,237.09 38.46% 8.85% 9.13%
Depreciation & Amortization 204.03 115.80 76.19% 1.05% 0.85%
Operating Profit 4,513.62 1,918.29 135.29% 23.33% 14.16%
Non operating income 31.30 2.50 1151.86% 0.16% 0.02%
Non operating expense 104.17 110.19 -5.47% 0.54% 0.81%
Profit before income tax 4,440.76 1,810.60 145.26% 22.95% 13.37%
Income tax expense
Current Tax 1,368.66 525.43 160.49% 7.07% 3.88%
Deferred Tax 48.82 (49.68) -198.25% 0.25% -0.37%
Profit for the period 3,023.28 1,334.86 126.49% 15.63% 9.85%
Earnings per share
Basic earnings per share 34.22 16.62 105.90%
Diluted earnings per share 34.22 16.62 105.90%
Adjusted earning per share 34.22 15.11 126.49%

2.3 BUSINESS VALUES

VALUE CREATION STRUCTURE
Our Value Creation Structure is guided by our vision: “To ensure creation of optimum values for all the stakeholders.” The Bank
creates values not only for the shareholders and customers, but also for all the stakeholders, through various operational
activities, by utilizing various inputs and resources of the Bank.
INPUTS PROCESSES OUTPUTS

Financial Capital Business Activities Financial Capital
• Equity • Strategic Planning and Budgeting • Return on Equity of 22.73%
• Reserves • Corporate Banking • Operating Income of NPR 4,440.76
• Deposit and Borrowings • SME Banking Million
• Capital Adequacy • Retail Banking • Net Profit of NPR 3,023.28 Million
• DSL Banking • Capital Adequacy Ratio of 13.32
Human Capital • Treasury • NPL Rate of 0.46%
• Employee Engagement • Transaction Banking

• Experience and Competent Human • Trade Operation Human Capital
Resources • Card Center • Total of 3472 personnel
• Technical and Managerial Skills • Remittance Business • 546 employees promoted
• Diversity and Equality • Strategic Business Development • Total Employee expenditure of NPR
2.48 billion
Intellectual Capital • 1,101 national level trainings and 11
Supporting Activities
international trainings
• Management and Control System • Human Resource and Training
• Technological Capabilities • Marketing
Social and Relationship Capital
• Integrated Risk Management • Research and Development
• 21.0526% dividend (including 10%
• Culture and Process • Administration and Engineering bonus share)
• Knowledge and E-learning • IT System Development • Contributed towards economic growth
• Finance, Legal and Recoveries of the nation
Social and Relationship Capital • Risk Management and Internal Audit • Various CSR activities conducted
• Relationship with Stakeholders • 526,023 new saving accounts and 21
• CSR Activities local bodies account
• Quality Service to Customers
• Awards and Recognitions Manufactured Capital
• 5,225 QR and 2,222 POS and the
Manufactured Capital Bank's market share in QR is 35% and
POS is 18%
• Branches
• 292 Branches and 302 ATMs
• Branchless Banking
• Improvement and Expansion of Digital
• Remittance Agents
Banking
• ATM
• Reduction in Turn Around Time
• IT Infrastructure and innovations

VALUE CREATION BY BANK FOR EMPLOYEES
FOR CUSTOMERS The Bank has been creating values to its employees by
helping them improve their skills and capability through
With our motto “Bank Pani Sathi Pani, Ramro Pani Hamro
various trainings and programs and by acknowledging their
Pani”, NIC ASIA is driven to provide efficient service to its
hard work with gratifying incentives. The Bank has ensured
valued customers. Our “Customer Experience Enrichment
that employees are continuously motivated and culture of
Department” looks after enhancing the experience of
gaining knowledge is developed among the employees. The
customers in availing our services. The Bank is continuously
Bank has 3,472 employees as on end of review period and
motivated to offer various attractive products to its valued
incurred total employee cost of NPR 2.48 billion. The Bank
customers in a way to help our customers secure their
has incurred NPR 64.2 million towards staff training for
financial futures, by supporting people when making
development and growth of the employees. The Bank has
life- changing decisions, through seamless processing
conducted 1,101 national level training and 11 international
of transactions. The Bank is embedding the modern
training for its employees and the employee participation
technology in its digital banking creating higher values
was 38,447. Employees are the Bank’s biggest asset and
to its customers. Proper usage guidelines and policies
will continue to invest towards employee trainings and
are developed to secure the transaction through various
digital channels. Through foot print expansion from remote developments.
areas to financial hub, the Bank is committed towards
FOR SUPPLIERS, VENDORS AND BUSINESS PARTNERS
providing financial service to every citizen of the nation.
Valuing the changes in technology, customers’ needs The Bank creates value to suppliers, vendors, and business
and business processes, the Bank continuously makes partners by helping them grow and expand their business.
researches and developments to provide better services The Bank is always committed towards making timely
and products. Currently NIC ASIA Bank is providing services payment of dues and complying with the contractual terms
through 292 branches, 302 ATMs, 47 extension counters. and conditions with them. The Bank’s expansion in remote
The Bank is aiming to open 20 new branches, 198 ATMs areas to financial hub is helping every aspect of citizen
and 109 extension counters primarily focusing on providing reach financial services and explores opportunities for
financial service to people of remote areas. Also, the Bank business. With growing branches and business of the Bank,
shall focus on expansion in credit card, POS machine and it will create more demand and business for the suppliers,
KIOSK services in coming days. vendors, and business partners, thereby helping them
grow and expand their businesses. The Deposit and Loans
FOR INVESTORS AND SHAREHOLDERS
& Advances of the bank as on end of review year reached
Since the establishment, NIC ASIA Bank has been providing NPR 180.58 billion and NPR 150.11 billion respectively. The
satisfactory return to its investors in form of return on bank is providing services through 292 branches, 302 ATMs,
investment and return on assets, profit, distribution of 47 extension counters in various part of the nation.
bonus shares and dividend, market value of stock of the
Bank, and the creation of brand value. NIC ASIA Bank is
FOR GOVERNMENT AND SOCIETIES
Nepal’s No. 1 bank in terms of balance sheet size, loans The Bank creates value to government and societies
and advances. Also, the Bank is biggest among private through taxes, helping the government implement
banks in terms of saving and deposits. The Bank earned its policies, cooperating with regulators for reforms,
operational profit of NPR 4.51 billion and net profit of NPR contributing to well being and development society through
3.02 billion with increment of 135% and 126% respectively. its various corporate social responsibilities initiative. The
The Earning per share of NIC ASIA Bank was NPR 16.62 in Bank has been actively working towards the benefits and
FY 2017-18, while it increased by 106% to reach NPR 34.22 developing various aspects of society as a responsible
during the review period. The Bank has Return on Assets corporate citizen.
and Return on Equity 1.56% and 22.73% respectively. The
Bank has proposed dividend at 21.0526% of total paid up Each year the Bank allocates 1% of its net profit to corporate
capital which includes 10% bonus share and 11.0526% cash social responsibility reserve. The Bank incurred NPR 11.7
dividend. Also, the stock price of the Bank increased by million towards social cause which includes donation
41.77% to reach NPR 448 as on end of review period. of ambulance to Nepal Police, Bio toilet to Pashupati

development board, computers and financial assistance

to community schools. Also, the Bank actively participated TANGIBLE ASSETS OF NIC ASIA BANK
in protection of environment and maintaining ecological NPR Million
balance. The Bank’s CSR activities include assistances to
victims of natural calamities, blood donation programs,
2018/19 2,584
health camp, and financial literacy programs. The Bank has
opened 13 branches in remote areas of 11 remote districts 2017/18 1,759
to provide banking service to deprived peoples.
2016/17 1,063
The Bank has actively participated in the Government
2015/16 537
initiation of “SABAI NEPALIKO BANK KHATA” with reward
of NPR 100 on opening of new account under the policy.
The Bank has been providing employment opportunities
directly to 3,472 people. Ease of loan facility helping
people grow or start their business, the Bank has been INTANGIBLE CAPITAL
creating employment indirectly. The Bank has ensured
its noteworthy contribution to national goals like raising NIC ASIA Bank has always valued the importance of
the living standard of the deprived sector, supporting Intangible Capital on its journey of being the one of the
employment creation, increasing tax/revenue collection, biggest bank of Nepal. The Bank has made the best use
promotion of cashless economy, and enhancing financial of modern technologies to provide its customers the best
access. NIC ASIA Bank has made contribution to the banking experience also for business process management.
government exchequer of NPR 2.51 billion during the review The Bank has either in house developed or procured the
year. The amount consists of NPR 1.4 billion in the form of intangible infrastructures suitable for its banking activities.
income tax and NPR 1.11 billion in the form of tax deducted
at source. With the best use of modern technology in its banking
activities and services, the bank is implementing customer
relationship management, business intelligence, business
TANGIBLE CAPITAL process management, omni channel, etc. With revolution in
digital banking the Bank is heading to increase efficiency,
The substantial resources made use to perform Bank’s
reduce cost, increase customer experience and decrease
activities for its various stakeholders are tangible capital.
turn around time.
NIC ASIA Bank’s tangible assets comprises of various
fixed assets, branches, ATMs, extension counters
which are utilized to provide services to customers,
INTANGIBLE ASSETS OF NIC ASIA BANK
values to investors, business to vendors, coordination
NPR Million
with regulators, etc. The Bank’s fixed assets include
land, building, leasehold property, computer and its
accessories, vehicles, furniture and fixtures, machinery 2018/19 111
and other office equipments. The Bank’s has its primary
2017/18 50
data centre located at Durbarmargha, Kathmandu while
the disaster recovery data centre is kept at Bhairahawa, 2016/17 35
Rupendehi. 2015/16 18
The bar below depicts the Bank’s fixed assets;

2.4 FUTURE PROSPECTS AND STRATEGIES
The Bank's vision, mission and values are driving it to employees. In future, we will exercise our foremost effort
become the Nepal’s No. 1 Bank. NIC ASIA Bank’s commitment in supporting the government vision of broader financial
towards service excellence has made the Bank the most inclusion through pervasive financial access. We have
prominent and visible brand in the country. The Bank already set on this path by opening highest number of rural
has been living up to the motto “bank pani sathi pani, branches in the country till date and we will continue to do
ramro pani hamro pani” through various customers’ need so in future as well.
based services with excellence. NIC ASIA Bank’s biggest
competitor lies within itself; hence the Bank is dedicated, In future, NIC ASIA will elevate its banking operations in par
committed and motivated to be better than yesterday. with international standard with the use of modern digital
technology and innovative business models. As digital
Our agile performance in the past has given us an banking and online payments have been taking toll in the
unprecedented success, and in the future, we plan to global banking scenario, the Bank is committed to spread
simplify our operations to maintain economy and reduce this global trend throughout the country for sustainable
organizational complexity. We will seek ways to create a online banking service with an aspiration to become
cohesive culture and employee loyalty because our success country's Digital First Bank.
so far is the outcome of robust culture and hardworking
Sustainable
Banking
Digital
First Bank
FUTURE Employee First &

Employee's First
APPROACH
Next Gen
Banking
Experience
Transformation

SUSTAINABLE BANKING
Sustainability is about meeting the needs of present responsible corporate citizen, NIC ASIA Bank is determined
without compromising the ability of future generation. NIC to be a powerful agent of change.
ASIA Bank has set an approach to sustainable financial
service considering sustainability as strategy through NIC ASIA Bank has commitment to transparency, long term
focusing on risk measurement, assessing new business resiliency, and effective governance with these cultures
opportunities and addressing stakeholders. Bank’s mission, the bank is already on path towards sustainable banking.
vision and values are aligned evaluating and addressing the Our services are based on customer needs and the Bank
environmental and social impact of financial services. As a has always acted as customer centric.
SUSTAINABILITY
Revenue
Regulation
Oppourtunities
Cost Benefit Investment
Enviroment Society
Productivity
Value creation by sustainability
EMPLOYEE FIRST AND EMPLOYEE’S FIRST

Bank has been directing its efforts towards nurturing support and assurance for issues that have been leading to
delightness of each member of NIC ASIAN Family and discontentment and dissatisfaction.
towards synchronizing the focus paralleled with theme of
"Employee First". Each and every individual staffs of the Bank We have already inculcated a culture of EMPLOYEE FIRST
irrespective of geographical areas have become a close where the Bank seeks fulfillment of our own people vision
knit family while working together over a period including by collaborating it with the Bank's vision. The Bank’s
those families who are connected indirectly with NIC ASIA employees are like 'Entrepreneurs at work' fully loaded with
Bank over the same span of time. Considering the same, owner mentality. The Bank is dedicated to be the best and
Bank has been focusing on connecting the dots among most sought-after career destination for all the aspiring
its Transformation Riders and has embraced for creating banking geniuses. The Bank shall not leave any stone
a culture that shall foster happiness garnering greater unturned to be Bank Nepal's No 1 Employer in all terms
success in experiencing satisfaction and contentment (including pay and benefit packages, work environment,
among the Transformation Riders. Bank has aimed at and challenges and opportunities for career advancements,
establishing itself as the "Performer Paradise" incorporating and so forth).
the objectives to focus on strategies and plans under the
NIC ASIA Bank guarantees each and every transformation
Theme of "Employee First" and encompassing confidential
riders of Instrumental Empowerment, Instrumental

Enablement, Professionalism, Fair Merit, and Empathetic As per the Experience Audit Rating as on July 17, 2019, the
Leadership. Bank scored 74% weight in customer experience. This show
that the Bank's overall customer experience so far has
The Bank appointed Deloitte Touche Tohmatsu India LLP,
been on satisfactory level and the Bank is targeting for cent
a leading Big Four Consultant, as the Human Resource
percent scores to achieve the overall rating of Excellent by
Consultant of the Bank, which reflects the Bank's strategic
the end of the year. The Bank forecasts that 100% service
intent to improve the return on its human capital, establish
excellence is possible after the effective implementation of
conducive working environment, and inculcate international
Experience Transformation Strategy.
best practices in Human Resource Management.
While customer service is a touchpoint that enlightens
EXPERIENCE TRANSFORMATION about brand quality, customer experience is more dynamic
term that talks about how customer felt and emotion that
The Bank has declared Fiscal Year 2019-20 as “Year of encompasses the entire customer journey. Therefore, by
Experience Transformation” where the Bank would refine focusing on 'Customer First' ideology, the Bank looks at
its service delivery to cater state-of-the-art experience to building a strong connection with customers based on
its revered customers. The Bank has formulated robust trust and rapport framework.
strategy and allocated necessary resource to make this
Experience Transformation idea a first-of-its-kind in the With the successful implementation of Experience
industry. The Bank aims to achieve its goal of Experience Transformation, NIC ASIA undoubtedly will become the first
Transformation by overhauling key areas such as unmatched bank in the country to deliver customer delight through
banking products, unparalleled personal banking approach entirely new and uncontested approach.
and fully digitized banking operations.
DIGITAL FIRST BANK
Undoubtedly, customers visit bank for their financial
need. But in this era of competition where every other The Bank has resolved to be the 'Digital First' Bank of the
bank is offering similar products, it has become extremely country and has accordingly put in place robust structure,
challenging to book customer loyalty for a longer period. framework, system, and resources to accomplish the said
Besides, traditional banking approaches and paperwork goal.
hassles that consume customer's valuable time have
The Bank has been zooming its focus on channel
created dissatisfaction among public. NIC ASIA, through its
diversification and migration from physical banking
Experience Transformation strategy, intends to jump into
channels to the digital banking channels. As a result, the
filling this vacuum and enrich the banking experience of
Bank has already achieved its objective of channelizing
public by engineering surprising measures to be rolled in
at least 50% of its total customer transactions through
this new Fiscal Year.
digital medium in Fiscal Year 2018-19 which is a drastic up
The Bank has meticulously planned numerous approaches as compared to 32% in Fiscal Year 2017-18. The Bank has
to achieve its Experience Transformation Strategy. In the pursued the goal to increase its digital channel transaction
forefront lies the honest pursuit of its Vision: 'To ensure lo 75% in the next fiscal year.
creation of optimum values for all the stakeholders'
The Bank has been aggressively pursuing strategic digital
and Mission: 'To Become Bank of First Choice For all
partnerships, alliances, and collaborations with FinTech
Stakeholders'. Likewise, the Bank thrives to keep its
companies and migrating new digital banking outcomes
operations organic and simple by abiding with the law of
into its deliveries. Despite being a late entrant, the Bank
land. The Bank would seek to stand out among competitors
has already deployed 5,225 QR and 2,222 POS and the
by creating uncontested market space and ruling out
Bank's market share in QR is 35% (Industry QR - 15,000)
competition. Also, the Bank aims at sustaining customer
and POS is 18% (Industry POS - 12,000). The Bank has
relationship and business by understanding customer
planned to acquire 25,000 QR Merchants and 5,000 POS
ecosystem of the Bank. With these measures, the Bank
during next fiscal year.
looks at bringing paradigm shift from service delivery to
experience enrichment. The Bank has already automated most of its internal

processes as well as customer centric processes to start Lifestyle banking means being present in people’s lives
from "paperless" banking and then move to "cashless" anywhere, at any time and creating constant bonding with
banking and ultimately reach to the "man less" banking era. them. It means transformation to something more than just
Through a variety of digital channels, the Bank has already an institution – to a reliable partner, guide, and assistant.
ensured 2417 "Anytime" and "Anywhere" banking services
With technological advancement, peoples’ life are changing
across the country.
also they are getting busier. People try to catch up with
While scores of financial intermediaries across globe are everything via their smartphones, tablets or laptops even
renewing their focus on the transaction banking sector, though the schedule is tight. Hence, the Banking service is
NIC ASIA is zooming its focus on becoming a Transaction to be provided in such way it fits the life of people.
Bank by acquiring a minimum of 25% of total industry
NIC ASIA Bank has always been a customer centric Bank, the
transaction market into its fold. The Bank has strategized
services are provided as per the needs of customers. Our
to doubling the current footfall from existing level in
services are bundled to suit the life style of our customers.
fiscal year 2019-20. The Bank has also placed its focus
Banking services along with the medical, health and life
on revenue diversification. In order to achieve the non-
insurance are taken care through a single plan, which easily
interest income to total cost ratio at 78% in the Fiscal Year
blends to the life style of people.
2019-20, the Bank aims to escalate ATM transactions, card
sales, bancassurance, mobile banking, internet banking, With changing circumstances, the Bank understands well
POS machines and QR code transactions. Furthermore, the that the traditional or legacy banking is being replaced by
Bank will forge ties with government sector and increase disruption of technology which is ultimately enhancing the
its revenue base by becoming an integral part of their boundary of banking service. Hence, the DIGITAL FIRST
ecosystem. BANK theme is created not just for digital payment but
to blend in to the next generation life style banking. The
The Bank has targeted to penetrate the entire digital
Bank focuses on analyzing customer experience, exploring
banking ecosystem of the country and diversify its revenue
omni-channel delivery model, making mobile/internet as
source to extraordinarily higher level. This ambitious goal
the key growth channel etc.
seems possible by the Bank's talent pool, hardworking
staffs, success oriented NIC ASIA DNA and far-sighted NIC ASIA Bank is looking forward for designing financial
mindset of management committees. products to be in line with current social and business
realities and is ensuring that these product innovations
NEXT GEN BANKING along with technological revolutions will meet the rapidly
changing choices and lifestyles of today’s customers.
NIC ASIA Bank has understood the fact that, it’s not enough
for banks to just have “some” digital app, to get customers Experience transformation and digital first bank; both of
loyalty, the banking products should be exceptional – and our approaches channels NIC ASIA Bank for Life Style Next
reflect the lifestyle of customers – no matter what digital Gen Banking.
channels customers are using.
INTERNET MOBILE
BANKING BANKING
CALL
CENTER CHAT BOT
POINT OF
INTERNET SALES
(POS)
CHANNEL FOR
NEXT GEN
ATMs BANKING QR CODE

VISION 18-22 VISION 18-22 has following non-financial aspirations
NIC ASIA Bank through the right strategy had achieved Branches 400 by the end of 2021-22
the goals of five year plan Strategy 2020 within four years. ATMs 750 with increment of 150 per year
Strategy 2020 had the strategic objective of setting course Brachless banking of 1,000
to become the leading client-centric bank in the financial Extension counter 200
sphere of Nepal and has rightly achieved the goal before
POS to reach 10,000 and QR code at 100,000
the stipulated time.
Remittance agent payout of 15,000
Hence, VISION 18-22, a successor of Strategy 2020 is
formulated with higher goals to achieve, competing VISION 18-22 has following aspirations on customer
within own-self to be the better and bigger version than
base
yesterday. VISION 18-22 sets the goals to achieve by the Deposit customer of 3,222,000
end of FY 2021-22 and the steps has already been taken. Debit card customer base of 1,940,000
VISION 18-22 has following financial aspirations; Credit card customer base of 75,800
Mobile Banking customer of 2,216,000
To achieve balance sheet size of NPR 633 billion
Internet Banking user base of 173,000
To achieve market share of 9.85% in deposit and 9.22%
in loans The Bank is very excited with the result of 2018-19 in align
To earn net interest income of NPR 17.03 billion and non with VISION 18-22, with the enthusiasm and energy of
interest income of NPR 7.31 billion every transformation rider; we are optimistic of attaining
To earn operating profit of NPR 17 billion and net profit our goals.
of NPR 10 billion
NPL at 0.30% and EPS at NPR 78
Automation of
Processes Strengthening
Information
Technology
Platform
Branding
Trainings
HOW TO ACHIEVE and Capacity
OUR GOALS? Building
Reduction in
Turn-Around
Time (TAT) Customer Centric
and Customer
Delight
Optimization of
Resouce

2.5 HUMAN CAPITAL AND

HUMAN RESOURCE ACCOUNTING
Human Resources are the biggest value creator for NIC ASIA Bank. The Bank embraced for creating a culture that fosters
happiness garnering greater success in experiencing satisfaction and contentment among the employees. Bank has aimed at
establishing itself as the "Performer Paradise" incorporating the objectives to focus on strategies and plans under the theme of
"Employee First" and encompassing confidential support and assurance for issues that have been leading to discontentment
and dissatisfaction.
NIC ASIA Bank has successfully celebrated the Fiscal Year 2018-19 as the 'Year of Capacity Management’, with capacity building
exercises and skills upgradation of of its employee.
NIC ASIA Bank guarantees each and every Employee an environment of:
INSTRUMENTAL EMPOWERMENT INSTRUMENTAL ENABLEMENT
Right to be fully backed by required autonomies, Right to be fully backed by adequate resources,
flexibilities and authorities. structures and strategies.
PROFESSIONALISM
FAIR MERIT
Right to work with respected individuality, differences
Right to be unbaised with equal opportunities and
and celebrated diversities.
treatment.
EMPATHETIC LEADERSHIP
Right to be free from discrimination, harrasment and

humilation.
For the Year 2018-19, employee expense was NPR 2.48 Particulars 2018-19 2017-18 % Increment
billion which is incremental of 39.15% from last year of
Staff Expenses (NPR Million) 2,477 1,780 39.15%
NPR 1.78 billion. Total employees as on end of review
period increased by 1,181 to reach 3,472. With the increase Number of Staff 3,472 2,291 51.55%
of branches and business, new skilled employees were Staff Expense per Staff (NPR) 713,373 777,876 - 8.29%
hired. NIC ASIA Bank employs highest number of personnel
Net Profit Per Staff (NPR) 870,761 582,655 49.45%
among all the Bank and Financial Institutions.

WORK FORCE COMPOSITION EMPLOYEE TYPE
49% 51% 39% 61%

Female Male Contract Regular
2017/18 2018/19
3,472
2,477
1,780 2,291
Staff Expenses No. of Staffs

(NPR Millions)
2017/18 2018/19
AGE WISE CLASSIFICATION
Less Than 20 55
582,655
Net Profit per
Staff (NPR) 21-30 2,555
870,761
31-40 737
41-50 102
51-60 20
Staff Expense 777,876 Above 60 3

per Staff (NPR)
Total Employees 3,472
713,373
Average Employee Age 28

STAFF TRAINING AND DEVELOPMENT Analysis of human resource on the basis of benefits and
facilities provided:
We believe that training expenses spent on the development
of employees skills and capability is an investment for Particulars 2018-19 2017-18
achieving long-term strategy of the Bank. The Bank Salary 791,528,904.64 557,440,861.15
has always considered its staff as an essential asset of
Allowances 693,168,253.12 552,806,861.03
the organization. Participation of employees in various
Gratuity expense 28,218,112.00 19,303,561.95
internal and external trainings is ensured to enhance their
capability, to motivate them, and to develop their skills and Provident fund 56,424,538.69 47,274,172.32
knowledge in line with meeting the demands of a dynamic Uniform 15,602,466.44 17,995,270.42
environment. Training & development expense 64,237,498.07 43,089,134.50
Leave encashment 62,622,381.00 54,423,885.07

During the review period, the Bank incurred NPR 64.20
million on Staff Training and Development which amounts Medical 8,248,439.76 10,529,080.88
to 2.59% of total employee cost of current year. As per Insurance 3,649,517.48 8,262,096.23
requirement of Nepal Rastra Bank, Staff Training Expenses Others employees expenses 74,695,888.54 -
should be at least 3% of total staff expenses of previous
Finance expense under NFRS 105,456,236.19 198,921,706.55
year, and the Bank has spent 3.60% of total staff expenses
Other expenses related to staff 79,561,659.61 70,888,225.48
of previous year in staff training.
Employees bonus 493,417,300.66 201,178,091.87
Particulars 2018-19 2017-18 % Increment Total (NPR) 2,476,831,196.20 1,782,112,947.46
Staff Training Expenses

64.2 42.1 52.49%
(NPR Million)
HUMAN CAPITAL
Number of Staff 3,472 2,291 51.55%
Human Resources are the greatest strength and wealth
Staff Training Expense Per Staff
18,491.00 18,808.00 -1.69% for the Bank. The Bank is committed to retain the skilled
(NPR)
and capable employees. The contribution of our valued
During the review period, Bank conducted 1,101 national personnel has made us the largest Bank of Nepal. The Bank
level training and 11 international levels training which had recognizes the value of human resources in the growth
employee participation of 38,447. Chief Executive Officer and expansion of business of the Bank. The total value of
visited various provincial and regional branches during Human Capital has been computed to be NPR 20,137 million
the review period and conducted 20 professionalism for FY 2018/19 while it was NPR 39,891 million for FY 2017/18
development and motivational program. by using “The Lev and Schwartz Model” (Discounted Wages
and Salaries). This model involves determining the value
of human resources as present value of estimated future
STAFF BENEFITS AND FACILITIES earnings of employees (in the form of wages, salaries, etc.)
The bank provides the following benefits and facilities to discounted by the rate of return on investment (cost of
the staffs: capital). Due to high Return on Equity (i.e 22.73%), the value
of Human Capital has decreased compared to previous
wages, salaries and social security contributions, year. The Bank had Return on Equity at 12.09% during the
paid annual leave and paid sick leave, previous year.
bonuses,
FY 2018-19 FY 2017-18
staff loan facility at concessionary interest rate,
Total Human Capital (NPR in Millions) 20,137 39,891
non-monetary benefits, No. of Staffs (Under Payroll) 2,110 2,064
Contribution to Provident Fund, Human Capital per Staff (NPR in Millions) 9.54 19.33
Return on Equity (approx) 23% 12%
Gratuity, etc.

Human Capital • Total employees’ benefits include all direct and indirect
benefits provided to the employees.
39,891

(After considering Human Capital)
20,137 In NPR Million
Assets FY 2018-19 FY 2017-18
Cash and cash equivalent 20,215 8,132

Due from Nepal Rastra Bank 16,098 15,861
Placement with Bank and Financial Institutions 384 314
2017-18 2018-19 Derivative financial instruments. 7,006 1,266
Other trading assets 7 -
Following assumptions were used to calculate the human Loan and advances to B/FIs 6,923 4,658
capital by using “The Lev and Schwartz Model”: Loans and advances to customers 142,574 115,805
Investment securities 18,153 14,133
• As per the staff service bylaws of the Bank, employees
Current tax assets - -
should compulsorily retire after reaching 60 years of
Investment in subsidiaries 1,205 270
age or 30 years of qualifying service.
Investment in associates - -
- For 2018-19: Average age of employees is 27.95 Investment property 276 74
years, so average remaining years for compulsory Property and equipment 2,584 1,759
retirement is 32.05 years (but limited to 30 years). Goodwill and Intangible assets 110 50
However, average years of service completed is 1.72 Human Assets 20,137 39,891
years, so average remaining years of service is 28.28 Deferred tax assets - -
years. Therefore, mean value of both the average Other assets 2,162 8,621
remaining years of service has been considered Total Assets 237,834 210,834
for the purpose of calculation of human capital. Equity and Liabilities
Hence, an average year of service is 29.14 years, i.e. Due to Bank and Financial Institutions 8,536 11,630
approximately 29 years. Due to Nepal Rastra Bank 314 742
Derivative financial instruments 6,913 1,722
- For 2017-18: Average age of employees is 29.47
Deposits from customers 176,821 139,590
years, so average remaining years for compulsory
Borrowing - -
retirement is 30.53 years (but limited to 30 years).
Current Tax Liabilities 243 25
However, average years of service completed is 2.61
Provisions - -
years, so average remaining years of service is 27.39
Deferred tax liabilities 178 3
years. Therefore, mean value of both the average
Other liabilities 2,046 2,074
remaining years of service has been considered
Debt securities issued 7,710 3,488
for the purpose of calculation of human capital.
Subordinated Liabilities - -
Hence, an average year of service is 28.70 years, i.e.
Human Capital 20,137 39,891
approximately 29 years.
Share capital 8,834 8,031
• Average increment of employees’ benefits over the Share premium - -
years is estimated to be 10%. Retained earnings 2,113 944
• Discounting factor for the purpose of calculating Reserves 3,989 2,696
the present value of future benefits of employees Total Equity and Liabilities 237,834 210,834
is considered as the same as return on equity, i.e.

22.73%, which is approximately 23% and 12.09, which
is approximately 12% for FY 2018/19 and FY 2017/18,
respectively.

BANK’S POLICY ON EMPLOYEES’ HEALTH FOR WELNESS OF EMPLOYEE

AND SAFETY
Allowance
Employees are the Bank’s most valuable assets. The Bank Employees working in cash department are provided with
is committed to the effective management of health and risk allowance. Considering additional risk exposure of
safety to provide a healthy and safe working environment employee involved in long routes for more than four hours,
and is committed to devoting the necessary resources to bulk cash transfer allowance is provided.
meet health and safety legal requirements wherever we
operate. The Bank believes that the effective management Medical Insurance
of health and safety is a sound business principle that makes All eligible staff of the bank are covered under Medical
a significant contribution to the company’s profitability. Insurance of NPR 100,000.
Creating healthy and safe environment responsibility Accidental Insurance

lies in every employee of the Bank and the Bank expects All eligible staff of the Bank are covered under Accidental
everyone’s contribution towards it. The Bank is committed Insurance as follows:
to the effective and continual improvement of employees’
Insurance
health and safety. S.N Job Grade
Coverage
1 Messenger/ Senior Messenger/ Driver/ Senior Driver NPR 1 million
NIC ASIA Bank’s element of employees’ health and safety
2 Trainee Assistant - Supervisor NPR 1 million
includes;
3 Junior Officer NPR 1 million
i. Physical structure to assure safety and health at work. 4 Officer- Deputy Manager NPR 1.5 million
5 Manager- Senior Manager NPR 2 million
ii. Conduct workplace inspections to ensure workplace
6 ACEO - DCEO NPR 3 million
safety
7 CEO NPR 4 million
iii. Training to equip personnel with knowledge to work
safely and without risk to health. Term Life Insurance
iv. In-house safety rules to provide instruction for All employees are covered for term life insurance of NPR
achieving safety management objectives. 300,000.
v. Investigation of accidents or incidents to find out
Speaking Up
the cause of any accident or incident and to develop
prompt arrangements to prevent reoccurrence. Employees facing any workplace bully or harassment are
encouraged to speak up. A separate mechanism is built for
vi. Emergency preparedness to develop, communicate and
employees to make grievance through iZone. The Bank is
execute plans prescribing the effective management of
committed to create a safe environment for every employee
emergency situations.
where mental well being and physical well being are given
vii. Evaluation of job related hazards or potential hazards equal importance.
and development of safety procedures to address.
viii. Promoting, developing and maintaining safety and
health awareness in the workplace.
ix. Set out clear roles and responsibilities for all
stakeholders involved in health and safety
x. Consult with relevant parties on health and safety
arrangements, as appropriate

2.6 STAKEHOLDER ANALYSIS
The Bank operates with a vision to ensure creation of depends on the progress of overall stakeholders, rather
optimum values for all the stakeholders. The Bank's than its progress alone. The Bank has always received, and
stakeholders are those individuals or organizations who expects to receive in future, the contribution, cooperation,
have direct or indirect interest in its success or failure, and encouragement, and motivation from all its stakeholders.
whose opinions and actions can impact the business of the Success and sustainability of the Bank primarily depend
Bank, or be affected by the activities and decisions of the upon its relation with the stakeholders.
Bank. The Bank follows the belief that progress of the Bank
INVESTORS/
SHAREHOLDERS
BOARD
MEMBERS CUSTOMERS
SOCIETY KEY EMPLOYEES

STAKEHOLDERS
REGULATORY SUPPLIERS
BODIES
LENDERS

INVESTORS/SHAREHOLDERS
Investors/ Shareholders are the holders of shares of the has been able to achieve outstanding growth in terms of
Bank. They provide financial capital to the Bank in the business expansion, i.e. increase in lending and deposits,
form of share capital. The Bank therefore always aspires expansion of bank networks, etc. The Bank has proposed
to provide attractive returns to its investors/shareholders. 21.0526% dividend (10% bonus share and 11.0526% cash)
The Bank has earned operational profit and net profit of
Investors/shareholders expect attractive return on NPR 4.51 billion and NPR 3.02 billion, which is increment
investment, adequate communication of information, of NPR 2.6 billion and NPR 1.69 billion respectively, during
and transparent disclosures. They also expect reasonable the review period. During FY 2018-19 Return on Equity and
growth, sustainability of business, and proper management Return on Assets are 22.73% and 1.56% respectively which
of business. were 12.09% and 0.97% respectively during the FY 2017-18.
Earning per Share has increased by 106% from NPR 16.62 to
The Bank has an experienced and qualified management
NPR 34.22 during FY 2018-19.
team capable achieving its mission and vision. The Bank
COMMUNICATION WITH INVESTORS

All the relevant information is communicated to dividend/lost warrant, opening of DEMAT account, and
shareholders, customers, and the general public on a regular dematerialization of shares should be sent to the address
basis through print media (national daily newspapers) given below:
and electronic means (official website of the Bank (www.
nicasiabank.com). Detailed information on annual general
meeting of the Bank, including ordinary agendas and REGISTERED OFFICE:
special agendas to be discussed in meeting, was published
in national daily newspaper 21 days prior to the date of Ward No.11, Trade Tower,
annual general meeting. Thapathali Kathmandu, Nepal
Email: info@nicasiabank.com
Likewise, interim financial results are published for public
reference within the stipulated deadline prescribed by P.O. Box: 11021
Securities Board of Nepal and Nepal Rastra Bank. These Tel No: + 977-1-5111177/ 78/ 79
interim financial results, along with Basel III Disclosures as Fax No: + 977-1-5111180
prescribed by clause 7.4(b) of Capital Adequacy Framework,
SWIFT: NICENPKA
2015 under Directive 1 of Integrated NRB Directive, are
posted on the official website of the Bank on a quarterly Toll Free No: 1660-01-77771
basis. Feedback/grievance can be emailed to
feedback@nicasiabank.com for timely resolution.
Any enquiries related to the shareholders of the Bank
on share register, i.e. maintenance book of shareholder’s
record, share transfer including domestic transfer in case
of death of a shareholder, replacement of lost share
certificates, pledge of shares, dividend warrants/ bonus
shares declared and ratified by the AGM, payment against

BOARD OF DIRECTORS improved flexibility. The customers expect availability of
the required services from the Bank at the time of need.
Members of the Board of Directors are the representatives
of the promoter shareholders and general shareholders The Bank has been able to expand its business by winning
elected by the shareholders of the bank. It also includes customers’ confidence by providing qualitative services.
an independent director appointed in compliance with the The Bank is always ready to help the customers grow
legal and regulatory requirements. and provide financial services as and when required. The
Bank has opened 61 branches during the review period,
There are seven members on the Board of Directors,
in order to facilitate customers’ easy access to the
including one independent director and Chairman. The Board
financial services. For improvement in customer service,
expects the implementation of effective internal control
effective monitoring is done through establishment of a
and corporate governance, safeguard of shareholders’
separate Experience Enrichment Department. Experience
wealth and value creation to the shareholders, sound
enrichment shall focus on customer’s expectation, needs
financial position and efficient financial performance of
and desire and fulfill them with better experience. Bank
business, reasonable growth of business, sustainability of
is committed in providing services through automated
the business, and proper management of business. The
and digital channels and effectively uses technological
Board also expects proper communication of information
advancement for customers’ service. Bank in agreement
and transparent disclosure.
with various merchants is providing attractive discount on
The Bank has implemented robust internal control system payment through digital channels.
and corporate governance by forming relevant policies and
guidelines. Protection of shareholders’ wealth and value EMPLOYEES
creation to the shareholders are always the utmost priority Employees are the backbone of any business organization.
of the Bank. The Bank has earned operational profit and Effective and efficient performance of skilled and capable
net profit of NPR 4.51 billion and NPR 3.02 billion, which is employees help the business organizations grow and
increment of NPR 2.6 billion and NPR 1.69 billion respectively, succeed. It is very important for the business organizations
during the review period. The Bank has achieved remarkable to retain and motivate skilled and capable employees.
growth in business during the review period; and with the
proper strategic planning and successful execution of the The employees of the Bank expect proper and reasonable
same; similar growth is expected in the future as well. The incentives in exchange for their hard work and effort for the
Bank has an experienced and qualified management team success of the company. The employees also expect healthy
capable of achieving its mission and vision, and for effective and safe working environment, good relationship with the
management of business. The Bank management always employers, and part in the decision-making process, career
communicates the material matters and information to the development opportunities, adequate training, and proper
Board, and complies with its directions and guidelines. The skill and personality development programs.
Bank is committed to adequate and transparent disclosure The Bank has incurred NPR 2.48 billion in employee
of information. expenditures during the review period, out of which, NPR
64.24 million was incurred towards staff training expenses
CUSTOMERS
for the development and growth of the employees. During
Customers are the foundation of any business. The business the review period, Bank conducted 1,101 national level
cannot sustain and grow without customer satisfaction. training and 11 international levels training which had
Satisfied customers are the pillars of a successful business. employee participation of 38,447. Bank has made a new
In today’s cutthroat competition, it is very important for reward policy, which we believe will bring best out of
banks to retain customers and develop customer loyalty. our employees. The Bank provides various benefits and
facilities to the employees. (Details are given in the topic
Customers expect quality services from the Bank. It is the
‘Human Resource Accounting’)
responsibility of the Bank to provide protection to the
assets, wealth, investment, and privacy of the customer SUPPLIERS AND VENDORS
through secured IT systems and infrastructure. The
Suppliers and vendors supply goods and services to the
customers expect convenient and easy access to the
business organizations. It’s very important for the business
financial services of the Bank, with less complexity and

organization to maintain healthy relationship with the internal control and corporate governance within the Bank,
suppliers and vendors to ensure uninterrupted daily protection of customers’ assets, investment and privacy,
operational activities of the business organization. To help value creation to the general shareholders, implementation
the expansion and growth of business organizations, it is of advanced system and information technology, timely
necessary to build healthy relationship with suppliers and and adequate reporting, and transparent disclosures and
vendors to fulfill the increasing requirement of stationary compliance with applicable laws.
and other related supplies and services.
The Bank is committed to comply with all the policies,
The suppliers and vendors expect timely payment of dues guidelines, rules and regulations, and applicable laws. The
and compliance with contractual terms and conditions by the Bank has implemented a robust internal control system
Bank. and corporate governance by forming relevant policies and
guidelines. Protection of customers’ assets, investment,
The Bank is committed to maintain healthy relationship with and privacy, and value creation to the general shareholders
its suppliers and vendors to ensure the continuous supply of are always the utmost priority of the Bank. The Bank has
quality supplies and services. The Bank spares no effort to developed and implemented various automated reporting
make timely payments and to comply with the contractual systems to ensure timely and adequate reporting and
terms and conditions with the suppliers and vendors. transparent disclosure. The Bank has made an effort to
adopt and implement advanced system and information
LENDERS
technology prevailing in the domestic and international
Lenders provide fund to fulfill the requirement of business banking industry.
organizations. It is very important for the business
SOCIETY
organization to maintain healthy relationship with the lender
to ensure smooth growth and expansion of the business Society is the environment where the business organization
organization. Lenders, in case of the Bank, are the fund operates and carries out its business activities. Business
providers and banking partners. organization operates within the society, therefore, it
has certain responsibilities towards the society. Business
Lenders expect competitive interest rate prevailing in
organization needs to act in a socially responsible manner
the market in the fund they invest, compliance with the
and fulfill its obligations and duties towards society as a
contractual terms, and building healthy business relationship.
responsible corporate citizen.
The Treasury Department of the Bank is committed to
The society expects banks to act in a socially responsible
maintain healthy relationship with its lenders and banking
manner and contribute towards the well-being and
partners, and to provide them with reasonable and
development of society, protection of environment and
competitive interest rate prevailing in the market on the fund
ecological balance, instead of sole benefit of the bank.
invested in the Bank. The Bank always makes an effort to
According to a provision stipulated by Nepal Rastra Bank,
comply with all the contractual terms and conditions with its
banks are required to allocate 1% of net profit towards
lenders to build long-term relationship with them.
activities related to social responsibility.
REGULATORY BODIES
The bank has played a useful role in the functioning of society
Regulatory bodies are public organizations or government in diverse way such as: forestation, blood donation program,
agencies that are set up to exercise a regulatory function. parks development, computers handover to schools, health
This involves imposing requirements, conditions, or camps, cultural programs, financial helps to schools, and
restrictions, setting the standard for activities, and enforcing various programs for clean and healthy environment, and
in these areas, or obtaining compliance. The primary goal for assistance to victims of natural calamities. To help pilgrims;
a regulatory body is to protect the public, such as providing donation of bio toilets to Pashupati Development Board,
and enforcing adequate standards for internal control, ambulance to Nepal Police, financial literacy programs for
governance, and transparency in an organization. deprived peoples was carried by Bank during the review
period. Under corporate social responsibility bank has made
The regulatory bodies expect from the Bank, compliance direct expenditure of NPR 11.7 million during the review
with their policies, guidelines, rules and regulations, effective period.

STAKEHOLDERS RELATIONSHIP
Strong relationship and fair treatment with stakeholders are keys to our long-term profit and business success. NIC ASIA is
committed towards ethical and transparent relationship to all its stakeholders and has always valued the importance of all
its stakeholders. Ranging from employees to loyal customers and investors, the Bank has symbiotic and healthy engagement
with all its stakeholders.
KEY STAKEHOLDERS OF NIC ASIA BANK
Mode of Engagement Areas of Importance Bank’s Response
• Establishment of “Customer
• Interaction with employees Experience Enrichment Department”
• Convenience to customers
• Multiple channels for queries • Ensure right selling of products and
• Responsive and skilled employees
and grievances services
Customers • Availability of relevant products and
• Communication through • Zero tolerance policy for unethical
services
social media, digital media conduct by employees
and prints. • Quick response to grievances
• Continuous knowledge building and
upskilling of employees
• Continuous Engagement • Employee alignment to common

• Various training and programs
• Online secure portal for organizational goals
employees’ queries • Care for employees through various
• Meritocracy
Employees plans and policies
• Periodic communication • Work culture enabling equal
meetings with senior • Employees' first approach adapted by
opportunities for growth and
management the Bank.
learning
• Shareholder value creation

• Annual General Meeting • Governance and ethical practices
Investors/ • Increased interaction with investors
• Communication through • Compliance
Shareholders • Publication of interim financials
prints and media • Transparency
• Medium and long term strategy
• Compliance with rules and

• Periodic meetings with
regulations
regulatory bodies • Compliance culture
• Role in development of financial
Regulators • Participation with policy • Continues communication with
system
reforms regulatory bodies
• Banks act as first line of defense
• Supervisory meetings
against financial crimes
• Establishment of branches in rural

• Corporate Social • Financial literacy
areas
Responsibility of the Bank • Improving access to financial
Society • Partnership with local bodies for
• Supporting government services in rural areas
developing skills of locals
initiative • Contributing to social development
• Various initiation through CSR

2.7 ECONOMIC OUTLOOK

GLOBAL ECONOMY OUTLOOK
Global economic growth is forecasted to ease to a weaker- been reversed. Emerging and developing economies need
than-expected 2.6% in 2019 before inching up to 2.7% in to strike a careful balance between borrowing to promote
2020. Growth in emerging market and developing economies growth and avoiding risks associated with excessive
is expected to stabilize next year as some countries move borrowing.
past periods of financial strain, but economic momentum
remains weak. Growth rates in low-income countries are expected to
rise to 6% in 2020 from 5.4% in 2019, but that is still not
Emerging and developing economy growth is constrained enough to substantially reduce poverty. While a number
by sluggish investment, and risks are tilted to the downside. of low-income countries progressed to middle income
These risks include rising trade barriers, renewed financial status between 2000 and 2018, the remaining low-income
stress, and sharper-than-expected slowdowns in several countries face steeper challenges to achieving similar
major economies, as per the World Bank. progress. Many are poorer than the countries that made the
leap to higher income levels and are fragile, disadvantaged
Growth among advanced economies as a group is by geography and heavily reliant on agriculture.
anticipated to slow in 2019, especially in the Euro Area, due
to weaker exports and investment. U.S. growth is forecast Investment growth among emerging and developing
to ease to 2.5% this year and decelerate to 1.7% in 2020. economies is expected to remain subdued and below
Euro Area growth is projected to hover around 1.4% in 2020- historical averages, held back by sluggish global growth,
21, with softness in trade and domestic demand weighing limited fiscal space, and structural constraints. A sustained
on activity despite continued support from monetary policy. pickup in investment growth is necessary to meet key
development goals. Business climate reforms can help
Growth among emerging market and developing economies encourage private investment.
is projected to fall to a four-year low of 4% in 2019 before
recovering to 4.6% in 2020. A number of economies are Sharp currency depreciations are more common in emerging
coping with the impact of financial stress and political and developing economies than in advanced economies,
uncertainty. Those drags are anticipated to wane and and central banks are often required to respond to these
global trade growth – which is projected to be the weakest fluctuations to maintain price stability. The exchange rate
in 2019 since the financial crisis a decade ago -- is expected pass-through to inflation is more limited when central
to recover somewhat. banks pursue credible inflation targets, operate within a
flexible exchange rate regime, and are independent of the
Government debt has risen substantially in emerging and central government.
developing economies, as hard-won cuts in public debt
ratios prior to the financial crisis have to a large extent (Based on analysis and data from World Bank)

DOMESTIC ECONOMIC OUTLOOK Trade deficit widened by 17.2 percent to Rs.1211.96 billion
in the eleven months of 2018-19. Similarly, current account
As per the preliminary estimates of the Central Bureau registered a deficit of Rs. 248.72 billion in the review period.
of Statistics, Gross Domestic Product (GDP) is estimated High current account deficit is due to the expansion of
to grow by 7.1 percent in 2018-19. Increase in agricultural imports. Remittance inflows increased by 17.5 percent to
production, ease in energy supply, acceleration in Rs.799.02 billion in the eleven months of 2018-19. However,
construction activities, expansion in industrial production, Balance of Payments (BOP) remained at deficit of Rs.90.83
and an uptick in tourist arrival have contributed to the billion. Nepalese currency vis-à-vis US dollar depreciated by
higher economic growth. Ratios of Gross Domestic Savings 0.02 percent in 2018-19. The buying rate for one US dollar
and Gross National Savings to GDP are estimated at 20.5 stood at Rs.109.36 in mid-July 2019 compared to Rs.109.34
percent and 52.4 percent respectively in 2018-19. In the a year ago.
previous year, such ratios were 17.8 percent and 47.1
percent. Ratios of Gross Fixed Capital Formation and Gross In mid-July 2019, the weighted average interest rate of 91-
Capital Formation to GDP are estimated at 36.9 percent and days Treasury bills stood at 4.97 percent and the weighted
62.3 percent respectively in 2018-19. In the previous year, average inter-bank rate among the commercial banks
such ratios were 34.7 percent and 55.2 percent respectively. stood at 4.52 percent. Such rates were 3.74 percent and
Higher investment compared to savings led to a resource 2.96 percent respectively in mid-July 2018. In mid-June 2019,
gap at 9.9 percent of GDP in 2018-19. In the previous year, the weighted average deposit rate and lending rate of
such gap was 8.1 percent. commercial banks stood at 6.64 percent and 12.20 percent
respectively. Such rates were 6.61 percent and 12.42 percent
The average consumer price inflation in the eleven month in mid-June 2018.
of 2018-19 is 4.5 percent. Such inflation was 4.2 percent
a year ago. According to the preliminary statement of (Based on Monetary policy 2019-20 published by Nepal Rastra Bank)
receipts and expenditure released by the Office of the
Financial Comptroller General, recurrent expenditure of the
government stood at Rs.714.98 billion, capital expenditure
stood at Rs. 238.36 billion, financing stood at Rs.141.24 Gross Domenstic Consumer Price
billion and revenue mobilization stood at Rs.859.60 Product (GDP) Inflation Rate
billion in 2018-19. Government mobilized domestic debt
of Rs.96.38 billion and made a payment of Rs. 34.31billion
thereby mobilizing net domestic debt of Rs.62.07 billion in
7.1%2018-19
4.5%2018-19
2018-19 which is 1.8 percent of GDP.
THE CAPITAL MARKET billion a year ago. Policy to encourage BFIs in mobilizing
financial resources through the issuance of debentures
Stock market remained stable in the review year. The has contributed to the development of bond market. In
NEPSE index stood at 1,259.0 in mid-July 2019 compared to 2018/19, altogether 14 commercial banks obtained approval
1,212.4 a year ago. Similarly, market capitalization increased from this Bank to issue debenture worth Rs.43.98 billion.
to Rs.1,567.50 billion in mid-July 2019 from Rs. 1,435.14

2.8 BUSINESS ENVIRONMENT ANALYSIS

Business environment is internal and external factors that within the organization itself. The internal environment can
affect how the business functions including employees, be modified or amended, as the entire authority and rights
customers, and management, supply and demand and are embedded in the organization itself.
business regulations. External environment can be described
as a set of elements that are not part of the organization, In the context of the Nepalese banking industry, internal
but possess an influence upon the organization. Similarly, and external factors that affect banking business have
internal environment can be termed as the environment been presented below:
FACTORS
OF
INTERNAL
AND EXTERNAL
ENVIRONMENT
INTERNAL EXTERNAL
ENVIRONMENT ENVIRONMENT
• Organizational Structure • Competition

• Corporate Culture and Code • Laws and Regulation
of conduct • Consumer Behaviour
• Organizational Resources • Economy & Location
Opportunities and threats are results of external threats. SWOT analysis provides better leverage to the
environment, whereas strength and weakness are results bank to take advantage of future business opportunities
of internal environment. SWOT analysis of a bank formally and better understanding of its operational weaknesses,
evaluates the strength, weakness, opportunities, and so as to combat threats to potential growth.

STRENGTH
• Wide Spread Network WEAKNESS

• Large Customer Base
• Brand Equity
• Innovative and Diversified Products and Service
• Strong Leadership • Unavailability of desired resources in the market
• Expertise and high level of experience on Digital Payment Business and Operation • Limitation in core banking system’s capacity and large number of
• Strong internal control framework and code of conduct information available in file only
• World class core banking software • Other inherent limitations of control functions
• Customer Centric Business Model
Addressing our weakness
Factors of Strength • Liaison with regulatory bodies
• NIC ASIA Bank has 292 branches and 302 ATMs across the nation
• Continuous improvement in core banking system and emphasis
• The Bank is serving 1.6 million customers till the end of FY 2018-19 on paper less operation
• NIC ASIA Bank is No. 1 Banking Brand of the country • Update on policies as per the changing market and operational
• The bank is providing various products and services under “CHAMATKARIK” Schemes scenarios
• Board members and Management are strongly committed towards goal attainment
• Continuous improvement in digital banking embedding recent technologies
• Zero tolerance policy against unethical behaviors
• The Bank is continuously making upgrades in its core banking software
• Separate “CUSTOMER EXPERIENCE ENHANCEMENT DEPARTMENT” to
enhance the customers’ experience
SWOT
ANALYSIS
OPPORTUNITY
THREAT
• Enhancement of brand image through Corporate Social Responsibility

• Economic and Political Changes
• Leveraging existing wide branch network
• Value Creation and Enhancement by automation and digitization • Fierce competition from strategic peers
• Better management of deposits by exploring possibility of investing in high yield
Facing the Threats
segments
• The bank shall making continuous changes in its policies with
• Enhanced customer experience
changing scenarios
Grabbing the Opportunities • NIC ASIA will continue to provide efficient service to its
• Bank is working on various social initiations customers
• The Bank has its root from remote areas to financial hub to serve every citizen
• The Bank is embedding technological changes in its services and operation
• The Bank is diversifying its investments and market research on subsidiaries are
carried

• “CUSTOMER EXPERIENCE ENHANCEMENT DEPARTMENT” is making continuous
improvement in services to retain customers
121
PESTEL ANALYSIS
POLITICAL
Scenario Impact on Industry The Bank’s Response
• The country since its last general election • Plans and policies brought by the • Any changes in nation’s political scenario
two years ago has a stable government. government vastly affect the business are taken into account while formulating the
of the banking industry. business strategy of the Bank.
• With the stability of government, ease • Bank can target for higher growth and explore
of business is promoted resulting for new areas of investment.
increase of loans and advances.
ECONOMIC
• GDP of Nepal for 2018-19 is estimated • Service sector recorded growth of 7.3% and agriculture • The Bank cautiously through
at 7.1%. recorded growth at 5% during various product and service is
2018-19 increasing its business in different
• Ratios of Gross Domestic Savings and
economic sectors.
Gross National Savings to GDP are • Balance of Payment (BoP) widened to NPR 67.4 billion
estimated at 20.5 percent and 52.4 during 2018-19 • The Bank is focusing on deposit to
percent respectively in 2018-19. link the liquidity risk.
• Import stands at NPR 1418.54 billion while export
• The average consumer price inflation was NPR 97.11 billion resulting to trade deficit of NPR • Bank undertakes required
in the eleven month of 2018-19 is 4.5 1321.43 billion in 2018-19 approach to optimize between risk
percent. and return.
• Share of service sector in GDP stands at 57.8%.
• High current account deficit is due to the • Widening trade deficit might result domestic liquidity
expansion of imports.
adversely.
• Hike in interest rates on deposits due to • Remittance inflows increased by 17.5 percent to
the liquidity crisis and increased credit
Rs.799.02 billion in the eleven months of 2018-19
demand.
• Increase in interest rate might result in decrease in
demand for credit.
SOCIAL
• With increase in number of youth • Remittance has helped decrease poverty of • The Bank has primarily focused on Deprived
attracted towards foreign employment, Nepal also the people’s purchasing power Sector Lending the upliftment of the
the life style of Nepalese people is has increased considerably in last decade. community.
gradually changing. • Banking industry taking in fact the people’s • Bank has offered product and services as per
needs should offer product and services to the people’s need.
• Per Capita Income is estimated at USD people.
1,034 for 2018-19, while richest 10% earn
• Bank has tied up with remittance agencies in
the country with higher Nepali population.
more than poorest 40%.

TECHNOLOGY
• Technology has largely impacted the • Banking industry is embedding the • The Bank has structured its business
life of Nepalese people. Ever changing recent technological changes into its environment to technological advancement and
technology has people’s life easier, product and services. invested to capture the technological need of
simpler and dependable. stakeholders.
• Industry is gradually shifting from
• Rapid changes in technologies have eased traditional banking to technology • The Bank is providing services through various
the way of doing business. banking digital channels.
• Industry as a whole is promoting cashless • The Bank is focused in increasing user of debit
economy with the help of technology. card, credit card, internet banking, POS and
mobile banking.
• Manual processes are being automated to
increase efficiency and reduce TAT further.
ENVIRONMENT
• Climate change concern is rapidly • Banking industry as a whole are focused • The Bank is focusing on paperless office
increasing with stricter regulations from on green banking and any environmental and emphasis has been given for various
regulatory bodies. hazard activities are being seriously taken. environmental protection plans and programs.
• Sustainable development is focused in • Regulatory focus on sustainable • Adequate assessments of environmental
both financial and non-financial sectors. environment impact reporting. analysis of customer have been done.
• Increased demand of ecofriendly • Increased environmental concerns on • Implemented Environmental Social Risk
developments. investment decisions.. Management (ESRM) Policy.
LEGAL
• Tighter regulation are being introduced to • Banking industry are required to implement • The Bank has zero tolerance against non-
prevent money laundering, black economy AML, CFT and KYC regulations compliance of regulations.
and strict action being taken towards non-
• Banks are required to comply with policies • Continuous communication is being carried
compliance with regulations
of Nepal Rastra Bank and Companies Act, with regulatory bodies for any changes in
Income Tax and various other regulations policies and the Bank has strictly complied
with the directives and amendments.

2.9 STOCK PRICE STATISTICS

BANK’S SUMMARY
Company’s Name NIC ASIA Bank Limited
Symbol NICA
Sector Commercial Bank
Share Registrar NIC ASIA Capital Limited
Total Listed Share 88,342,287
Face value (NPR) 100
BANK’S STOCK PERFORMANCE IN NEPAL STOCK EXCHANGE (NEPSE):
Market Capitalization
Month No. of Traded Share
Month Month High Closing (end of month)
Low Trades Quantity
(NPR million)
Shrawan-2075 17 Jul-16 Aug 324 304 322 776 158,022 25,860
Bhadra-2075 17 Aug-16 Sept 425 307 408 3,046 1,095,118 32,767
Ashwin -2075 17 Sept-17 Oct 459 401 441 3,294 1,114,049 35,417
Karthik-2075 18 Oct-16 Nov 453 410 417 1,295 441,449 36,839
Mangsir-2075 17 Nov-15 Dec 426 351 378 1,705 451,914 33,393
Poush-2075 16 Dec-14 Jan 400 376 386 1,634 621,088 34,100
Magh-2075 15 Jan-12 Feb 401 381 386 1,685 414,287 34,100
Falgun-2075 13 Feb-14 Mar 405 368 399 1,875 426,473 35,249
Chaitra-2075 15 Mar-13 Apr 478 393 469 4,340 1,070,985 41,433
Baisakh-2076 14 Apr-14 May 515 466 493 4,788 1,224,866 43,553
Jestha-2076 15 May-15 Jun 502 447 454 3,313 979,321 40,107
Ashad-2076 16 Jun-16 Jul 480 441 448 2,626 687,138 39,577

2.10 EXPERIENCE TRANSFORMATION
FY - 2019-20 YEAR OF
EXPERIENCE TRANSFORMATION
Creating a value for the customer has always been into company does surveys for the same, the results are often
the priority of the service sector. Most of the companies not shared or even used as references. The market is
are already responsive towards the need to create value for getting competitive day by day and customers have greater
their customers. The value being created for the customers number of choices than before. Hence, it is not effective
need not to be always in the form of monetary of functional to assume that the given offerings are enough to create
benefits, it can also be in the form of experience that impact upon customers’ choices in same way it used to do
today’s most of the companies are trying to create for in past.
their customers. As a result, customer experience has now
become the imperative objective for the companies. The good experience is not the multiplicity of the features
on offer. It also incorporates the service quality and
When we talk about the customer experience, it is the core scope. In such, it is vital to understand the customers’
and individual response customer get during any direct or fundamental value propositions. Both ‘what’ and ‘how’
indirect contact with the company. Direct contact is made factor matters when service is being provided. For instance,
when customers physically be present to exercise/obtain all banks provide the same line of products and services
the services whereas the indirect contact is made when to the customer yet it matters how these banks provide
customers has unplanned encounters with representations services where the service delivery time could be one of
of the company’s products, services or brands, which may the experience driving factor for the customers in the bank.
later take the form of word of mouth recommendations
or criticisms, advertisements, reviews and so forth. These Moreover, most of the company’s understanding
both direct and indirect contacts are equally responsible in on customer experience is constrained to customer
forming the experience for the customers. satisfaction which is true and justified to some extent.
This is the reason why whenever companies talk about
However, some companies don’t understand why they customer experience, most of them highly emphasize on
should worry about the customer experience. Even if some touch points management. And most of them are focused

towards the maximization of satisfaction at the moments complements the products but also compliments it. Post
of touchpoints which has also distorted the image of purchase services not only satisfy the customer but also
customers being happy with the services than they actually provide scope and avenue for the business to up sell or
are. This has led to diversion of attention from bigger and cross sell. By showing that you care and are listening
important picture of customers’ journey with the company. (not just hearing) to the customer needs and grievances,
businesses can deepen the roots and create a brand loyalty
But this doesn’t suggest the solution as to replace mindset.
touchpoint with other alternates. The touchpoints and
expertise will always be the invaluable sources of insights Delivering positive experience increases the loyalty among
for company. Rather, in addition to that, the company the customers. The main objective of any business is to
requires identifying the customer journeys, understanding transform its existing customer into their brand ambassador,
the current performance, building cross functional which will in turn promote the business via word of mouth.
processes to redesign and support the proposed journeys Positive customer experience will generate Goodwill for
and internalizing the cultural change for sustainable the business and this is generally used as an arsenal by
achievements in excelling at customer experience. The the marketing department to market their products, which
customer’s journey begins with the expectations they have will significantly reduce the marketing cost and the amount
before the experience occurs and ends with the assessments saved can be used to further develop the business.
they are likely to make once it is over. It incorporates
the emotional and functional attachments between Benefits of Positive Customer Experience
company and the customers. Therefore, recognizing the • Creates loyalty among the internal and external
clues that company is sending to their customers is first
customers.
step towards understanding and managing the customer
experience. Further, the companies that can combine both • Reduction of expenses and increase the profits of the
the functional and emotional benefits in their offerings business.
can always have the competitive edge over competitors. • Provides competitive edge among its peers.
In overall, the customer experience can be good, bad or
indifferent but the key is to how effectively the experience • New market opportunities at lower cost.
of customers is being understood and managed by the • More customer acquisition and conversions
companies.
EXPERIENCE TRANSOFRMATION
ENRICHING CUSTOMER EXPERIENCE
With a vision of installing a robust and scalable apparatus
Customer experience differentiates the bank among for Delivery of Guaranteed Service standard for experience
its competitors. At the beginning of the 21st century,
enrichment in the bank and to drive the transformational
businesses quickly learned that experience is the most
journey towards customer experience into next level, the
important factor for its success. According to a recent
survey, over 80% of organizations expect to compete Bank has established Experience Enrichment Department
mainly based on Customer experience. Be it customer (EED). EED was formed with bifurcation of Experience
service, product or just the way the customers feel about Support, Strategic Experience and Experience Care Units.
the companies they do business with, customer experience The functions have been implemented with defined TOR,
rises to the top of whether or not the customer will decide and monitoring metrics. With the aim of standardizing
to keep doing business with a brand. servicing model, Strategic Integration Planning is underway
involving channel migration and Digital Solutions for
Customer does not just purchase the product; they also
purchase the services along with the product. Services integration and implementation, Standardization in Turn
should be designed in such a way that it not only Around Time for all services through Branches, Monitoring

of TAT of Branches with EQMS, PBX and Customer Assessing Customer Delight
Experience Solution. Customer flow can be increased by assessing the customer
delight which can be done by enhancing the image and
RATIONALE OF EXPERIENCE TRANSFOR- goodwill, customer experience and service delivery.
MATION
WHERE WE
WHERE WE ARE OUTCOME
Guaranteed Service Delivery WANT TO BE
Customer Satisfaction Customer Delight

Customers are becoming increasingly demanding and
expect a connected, seamless service experience with Fragmented Delivery Integrated Seamless Experience
Experience
Enrichment
a Brand. The culture of Guaranteed Service Delivery can
Idiosyncratic Service Sustainable Guaranteed Service
ensure the satisfaction among the customers. Besides, Mode Delivery
there will be uniform communication across both physical
and digital touchpoints with implementation of Knowledge
Zone. The EQMS and Omni Channel that can be used to
measure the TAT on guaranteed service delivery with the
implementation of EQMS and Omni Channels.
Integrating Service Delivery

As a Servicing Organization, every department and every
program that the Bank organizes will have some way of
understanding and assessing its customer's opinion and
improving customer satisfaction over time.
Effectiveness of Service Excellence

Implementation of Key KPI Metrics as a tool in measuring
the Customer Experience Rating at Individual, Branch,
Department and Bank can ensure the service excellence.
For which, the different internationally practiced tools and
framework can be used for measuring effectiveness.
Continuous Improvement
It is very essential to assess the underlying bottleneck
through service audit in order to achieve continuous
improvement, develop a culture of excellence, cultivate
good practices, drive innovation, and deliver sustainable
results in the area of Service excellence, further internalize
the sense of responsibility and delight in featuring
excellent service delivery among our staff members, to be
meticulously attentive to the needs of customers, learn,
innovate and perform; and, to Reduce waste, increase
economic efficiencies and improve societal relationships
and Map the internal and customer journey.

VISION FOR EXPERIENCE BUSINESS OBJECTIVES TECHNOLOGY

TRANSFORMATION OBJECTIVES
To define, map and standardized
To instill a robust and scalable Service Turn Around Time and To instigate intelligent system
apparatus for Delivery of customer journey mapping for measurement of Service
Guaranteed Service Standard Turn Around Time
To identify nodes acting as bottle
for Experience Enrichment in necks and impediments in customer To reduce customer-
the Bank. journey and to eliminate them service processing duration
To drive the transformational through electronic queue
To reduce customer effort by
journey towards Customer management system
leveraging both traditional and
Experience towards next digital channels To enhance service range
level. through digital interface (non-
To provide a Customer Support
To initiate KPI’s and Customer assisted self-servicing) and
service to enable customers to issue
Experience Metrics as a tool deliver the service uniformity
complaints on-line and receive a
in measuring the organization at assisted servicing channels
direct response from the Bank with
performance (Branches, Extension
resolution and response based on
Counters etc)
First Time Right Culture.
CUSTOMER
FIRST PERFORMANCE MONITORING
ON SERVICE DELIVERY
• Implementation and Monitoring of Self
Declaration Model on Standard Service
Delivery.
FIRST TIME CUSTOMER EMOTIONAL
CENTRIC • Placement of Client Charter on Guaranteed
RIGHT CONNECT
APPROACH Turn Around Time in all Branches’
Experience Floor.
• Tiered Grievances and Resolution Model
Country Circular has been rolled out.
DIGITAL
ENABLEMENT

CHIEF EXPERIENCE
TRANSFORMATION OFFICER
(CETO)
Manager - Experience
Transformation
Strategic Experience
Experience Care Unit
Experience Unit Support Unit
Disruption, Trend and Experience Initiative Experience Initiative

Best Practice Implementation Implementation
Experience Journey Experience Journey

Center for Experience
Design and Design and
Excellence
Implementation Implementation
Data Driven Monitoring Knowledge Management Knowledge

and Service Audit Center Management Center
Continuous Feedback
Monitoring

2.11 EXPERIENCE TRANSFORMATION STRATEGY
This year the Bank is celebrating ‘Year of Experience Transformation’, a vision that has
potential to revolutionize the banking industry. If this strategy succeeds in bringing desired
impact, the Bank will be symbolized as the epitome of the change in financial landscape of
Nepal. Presence in public through different means of media alone doesn’t boost the brand.
IMPORTANCE OF EXPERIENCE But we have seen mushrooming and thus offer value added service.
TRANSFORMATION STRATEGY public discontents related to banking The bank wants to establish itself
service. Yet people have no choice as the last resort after which their
In banking industry, 'change' has
but to continue acquaintance with search for better banks will be over.
become more rapid than ever.
their existing bank because they
People are soon bored by status- MARKET SITUATION IN THE FIELD
know it's same everywhere and
quo and expect frequent innovation OF CUSTOMER EXPERIENCE
changing a bank is just going to
that enriches their interaction and
cost them time without additional Looking at the banking perception of
experience with a bank. People
value. In this context, the Experience public in Nepal and when compared
perceive that new and enriched
Transformation is what they seek it with developed countries, one
services are value addition to what
and what bank have been looking to can say the banking experience for
they have been paying for the service.
offer. NIC ASIA want to be better than Nepali is at very low level. The high
But if you fail to deliver upon that
other banks in terms of offering swift competition has caused banks to
expectation of public, you fail to
and hassle-free banking service and focus on profitability and expansion
retain their loyalty. The customers
prompt resolution to their problems. rather than improving customer
get satisfied with your service and are
less likely to switch the brand as long experience. Every single customer
This very reason triggered NIC ASIA
as they receive renewed and fault- has gone through some form of
Bank to shift its focus towards
less banking experience. That's why hassles while availing service from
experience transformation. When a
the experience transformation has their banks.
customer joins our Bank, we want to
become of paramount importance. give them a new kind of experience- NIC ASIA has realized this fact and is
-something they have not received trying to intervene and bring a shift
Banking service has close link with
at other banks. The bank want its in the ways banks should treat their
everyday financial affairs of public.
delivery to exceed their expectation customers. Now with 'customer first'

strategy, the Bank aims to provide the But at the end, every department and repeated commitment from
best banking service to the public in and every job are interconnected. corporate leadership throughout the
entire banking industry. Those who don't have direct roles in company has boosted the Bank's
experience transformation process morale to pursue this idea more
Talking about our Bank, our able have supportive function and their job valiantly. The Bank is confident this
Experience Enrichment Department roles are somewhere connected to strategy will be no. 1 pivot of the
has developed a system to measure experience transformation paradigm. Bank in driving it towards the summit
customer experience based Besides, every employee is the voice of success. Our leaders at various
on qualitative and quantitative of the Bank and thus employee role positions have understood the
dimensions. As per the Experience in disseminating positive views of the essence of Experience Transformation
Audit Rating of mid-October 2019, Bank to public is always important. very well and they own it. With such
the Bank scored 79.2% weight in ownership and commitment, it is
customer experience. This show EXPERIENCE TRANSFORMATION certain the idea will bring radical
that the Bank's overall customer MINDSET change in the banking industry with
experience so far has been on almost NIC ASIA becoming a pioneer.
The modern day business has hugely
satisfactory level and the Bank is
transformed due to evolving trend and
targeting for cent percent scores CHALLENGES AND RESOLUTION
technology disruption. Businesses
to achieve the status of Service
those are adamant in aligning with The Experience Transformation idea
Excellence by the end of the year.
emerging trends have faced extinction provides picture of why customer
The Bank forecasts that more than
or slow growth. As discussed earlier, experience could be a next big leap
90% service excellence is possible
banking business has constantly for NIC ASIA Bank to establish itself
after the effective implementation of
undergone transformation over the as a first preferred bank for all service
Experience Transformation Strategy.
years and the process of change seekers. What does a person expect
CARRIER OF THE STRATEGY is perpetual. NIC ASIA Bank strives from a bank? An error-free service,
to better the banking industry by immediate accomplishment of tasks,
The strategy formed at top level is bringing radical change in the way better response by staffs and swift
futile unless it is executed with full banking business is done. This quest digital service so that customers don't
swing at operational level. Experience for newness triggered NIC ASIA Bank have to run to banks for every single
transformation has two dimensions-- to opt experience transformation issue. These are very simple things
customer physical banking experience strategy. Thus, the Bank's strong which could be easily embedded and
and virtual digital banking experience. urge and need for innovation caused enforced at once. But why we can't do
Our customer facing staffs like the Bank to completely transform it overnight is the important question.
CSD, Experience Managers and banking business into experience It is because of culture adaptation.
Relationship Managers are the ones center as people in modern era wants People are used to doing tasks in
who have direct role in substantiating better and improved experience. certain way and are adamant on
our experience transformation Through successful implementation bringing change in this pattern. Our
strategy while our Digital Innovation of experience transformation, the biggest obstacle is thus the culture
department also has a high stake Bank will resolve all customer-facing adaptation. The sooner our colleagues
in offering digital banking service problems in banking industry. understand the importance of
without fail. Only when both these experience transformation, faster we
aspects are executed simultaneously, The success depends on its effective will attain the pinnacle of customer
we will achieve the goal of experience implementation and convergence of trust.
transformation. efforts of all colleagues to meet this
goal. The Bank is confident at the OUTCOMES
ROLE OF OTHER DEPARTMENTS success of this new idea because
AND EMPLOYEES The experience transformation
there is tone at the top about this
strategy will put the bank with huge
The Bank is a large family and works experience transformation idea. This
competitive advantage and distinctly
are divided among all members. idea has been approved by the Board
different from the industry peers.

As today's society and businesses customers, more sales, and more to connote our top position in the
are shifting towards experience- loyalty. industry.
driven or value-based services apart
from regular models, the experience A continuous approach to Through seamless banking
transformation strategy of NIC transforming the experience of experience for our customers, we will
ASIA Bank will help bank align its customers will allow our Bank to be able to create a massive word-
operations to emerging trend and manage its risk exposure, reduce of-mouth promotion. NIC ASIA Bank
re-invent itself towards the path of operational cost, deliver bottom line will be synonymous to best banking
sustainable growth. benefits, and develop the ecosystem service provider in the country.
for sustainable business growth while Eventually, our bank will be the most
Customers today are well-researched driving retention, loyalty and brand preferred financial destination and
and have higher expectations reputation. will be prized for leading the change
than before. With Experience in Nepalese financial landscape.
Transformation paradigm, the Bank VISION AT THE END OF FISCAL
will be offering them value and YEAR
enriched emotion through better If the Bank's Experience
experience. This will help gain the Transformation strategy goes into
proactive engagement of customers right direction and when all our
with our Bank. With this strategy we colleagues understand the crux of
expect to gain customer retention, experience transformation and orient
likelihood of buying additional themselves towards achieving this
products and services, and advocacy goal of the Bank, we will be able to
i.e. likelihood of recommending our set a strong bedrock foundation built
service to others. Good customer on customer experience which leaves
experience will produce more us in the most advantageous position

2.12 INVESTORS’ RELATION
INVESTORS’ QUERIES
REDRESSAL
During the discussion session on 21st AGM of NIC ASIA Bank held at Heritage Garden, Sanepa,
Lalitpur on 19th December 2018, our valued shareholders had raised some queries related to
the Bank’s financial and operational performance which were satisfactorily addressed by CEO
Mr. Roshan Kumar Neupane.
INVESTOR COMPLAIN
MECHANISM
1. Investors can go to https://helpdesk.nicasiabank.com/support/home and raise grievance

2. Investors can contact through toll free hotline number 16600177771
The Bank continuously monitors the complaint raised by its investors and are addressed in a timely
manner.
INVESTORS’ RIGHT TO
INFORMATION
1. The notice regarding Annual General Meeting is published in the national daily atleast 21 days
prior to the date of meeting, with information on the date, time, venue and all agenda items
with comprehensive support data concerning the issues to be discussed.
2. The Bank makes arrangement for its investors to inspect and obtain copies of the annual
financial statement, directors’ report and auditors’ report.
3. The notice of the shareholders meeting is also posted on the Company’s website.
4. The invitation to the Annual General Meeting contains shareholder information and guidelines
relevant to the meeting, including the voting procedure. In case shareholders cannot personally
attend the meeting, they may appoint a proxy.

CORPORATE
GOVERNANCE
3.1 Shareholding Structure..........................................................................136
3.2 Board Committees and Management Committee....................137
3.3 History of AGM............................................................................................142
3.4 Corporate Governance...........................................................................144
3.5 Director’s Report.......................................................................................154
3.6 Audit Committee.......................................................................................172
3.7 Risk Management Committee............................................................175
3.8 Karmachari Sewa Suvidha Samiti...................................................... 177
3.9 Sampati Sudhikaran Niwaran Samiti
(Assets/Money Laundering Prevention Committee)...............179
3.10 Anti Money Laundering and
Countering Financial Terrorism Report.......................................... 181
3.11 Speaking Up and Whistle Blow Mechanism............................... 183
3.12 Statement of Directors Responsibility.......................................... 186
3.13 Director’s Statement on
Internal Control and Its Adequacy....................................................187
3.14 Responsibility Statement of CEO and CFO.................................. 188
3.15 Integrated Reporting............................................................................. 189

3.1 SHAREHOLDING STRUCTURE

Particulars Number of Shares Amount (NPR)
Authorized Capital 88,400,000 8,840,000,000
Issued Capital 88,342,287 8,834,228,698
Paid up Capital 88,342,287 8,834,228,698
ORDINARY SHARE OWNERSHIP
Particulars Amount Percentage Holding

Domestic Ownership
Nepal Government - -
"A" Class Licensed Institutions - -
Other Licensed Institutions 556,556,408 6.30%
Other Institutions 8,277,672,290 93.70%
Public - -
Other - -
Foreign Ownership - -
8,834,228,698 100%
CAPITAL STRUCTURE
Particulars Number of Shares Capital Structure Paid up Amount (NPR)
Promoters Shareholders 45,054,566 51% 4,505,456,636
General Public Shareholders 43,287,721 49% 4,328,772,062
Total 88,342,287 100% 8,834,228,698
SHAREHOLDING STRUCTURE OF DIRECTORS
Name of Director Position Number of Shares Percentage Holding

Tulsi Ram Agrawal Chairman 1,575,865 1.7838%
Trilok Chand Agrawal Director 4,713,807 5.3358%
Ram Chandra Sanghai Director 3,898,206 4.4126%
Rajendra Prasad Aryal Director 86,633 0.0981%
Binod Kumar Pyakurel Director 470 0.0005%
Ganesh Man Shrestha Independent Director 283 0.0003%
Nikunj Agrawal Director 1,734,701 1,7856%

3.2 BOARD COMMITTEES AND
MANAGEMENT COMMITTEE
AUDIT COMMITTEE
S.N Name Status in Organization Status in Committee
1 Mr. Ganesh Man Shrestha Independent Director Coordinator
2 Mr. Trilok Chand Agrawal Director Member
3 Mr. Raju Prasad Adhikari Head-Internal Audit Department Member Secretary
RISK MANAGEMENT COMMITTEE

1 Mr. Binod Kumar Pyakurel Director Coordinator
2 Mr. Rajendra Prasad Aryal Director Member
3 Mr. Ganesh Man Shrestha Director Member
4 Mr. Kapil Dhakal ACEO-Quality Assurance Ecosystem Member
5 Mr. Dipendra Bahadur Rajbhandari Chief Risk Officer Member Secretary
KARMACHARI SEWA SUVIDHA SAMITI

1 Mr. Ram Chandra Sanghai Director Coordinator
3 Mr. Roshan Kumar Neupane CEO Member
5 Mr. Sudhir Nath Pandey DCEO Member Secretary
SAMPATI SUDHIKARAN NIWARAN SAMITI
1 Mr. Rajendra Prasad Aryal Director Coordinator
2 Mr. Ram Chandra Sanghai Director Member
3 Mr. Binod Kumar Pyakurel Director Member
4 Mr. Kamal Khadka AML Implementing Officer Member Secretary

LAND ACQUISITION COMMITTEE

1 Mr. Trilok Chand Agrawal Director Coordinator
2 Mr. Ram Chandra Sanghai Director Member
4 Mr. Roshan Kumar Neupane CEO Member
6 Mr. Kapil Dhakal ACEO-Quality Assurance Ecosystem Member
7 Mr. Kailash Gautam Head DNA and Talent Management/ Branding/ GAP Member
8 Mr. Sudhir Nath Pandey DCEO Member Secretary
Know your BALANCE from a

SINGLE MISSED CALL
For BALANCE ENQUIRY give a

missed call at 98011227733
For MINI STATEMENT give a

missed call at 9801227744
F O R R E G I S T E R E D M O B I L E N U M B E R O N LY

D N A O V E R S I G H T CO M M I T T E E
(MANAGEMENT LEVEL COMMITTEE)
Mr. Roshan Kumar Neupane

Mr. Santosh Kumar Rathi

Mr. Sudhir Nath Pandey Assistant Chief Executive Officer - Im-
Deputy Chief Executive Officer age & Experience Projection & Promo-
tion Ecosystem
Mr. Rajesh Rawal

Mr. Kapil Dhakal
Assistant Chief Executive Officer -
Assistant Chief Executive Officer -
Performance Assurance Ecosystem
Quality Assurance Ecosystem
Mr. Jayandra Rawal Mr. Bhesh Raj Khatiwada

Assistant Chief Executive Officer - Assistant Chief Executive Officer -
Performance Assurance Ecosystem Experience Assurance Ecosystem
Mr. Ranjan Khadka Mr. Dipendra Bahadur

Assistant General Manager - Strate- Rajbhandari
gic Resource Penetration Ecosystem Chief Risk Officer

Mr. Arjun Raj Khaniya Mr. Bishal Sigdel

Chief Business Officer Chief Experience Transformation
Officer
Mr. Prakash Baral Mr. Bapin Rajbhandari

Chief Credit Officer Chief Technology Officer
Mr. Dinesh Bhari Mr. Narayan Sundar Shilpakar

Head Legal Chief Digital Marketing Officer
Mr. Rupesh Luitel Mr. Raju Prasad Adhikari

Chief Financial Officer Head Internal Audit
Mr. Kailash Gautam Mr. Deepen Karki

Head DNA and Talent Management / Company Secretary
Branding/ GAP
Mr. Suman Thapaliya Mr. Narayan Prasad Nepal

Head Strategy, BPR & Think Tank Head Strategy & Transformational
Organization Development

South Asian Federations of Accountants (SAFA)
awarded Certificate of Merit for Best Presented Annual
Report
Winner Kathmandu Kings XI Corporate Indoor Cricket Winner Jungle Cricket

Tournament Corporate Tournament

3.3 HISTORY OF AGM
1st 2nd 3rd
Date of AGM: 22/12/1998 Date of AGM: 10/03/2000 Date of AGM: 21/03/2001

Place of AGM: Head Office, Biratnagar Place of AGM: Head Office, Biratnagar Place of AGM: Birendra Sabhagriha,
Major Decision Taken: Major Decision Taken: Biratnagar
• Increase Authorised Share Capital to Major Decision Taken:
NPR 1,000,000,000 Appointment of Mr. Rajendra Aryal
• Increase Subscribed and Paid up and Mr. Ramesh Koirala from General
Share Capital to NPR 500,000,000 Shareholders' Group to Board of Directors
11th 10th
Date of AGM: 17/12/2008 Date of AGM: 14/12/2007

Place of AGM: Udhyog Sanghathan Sabha, Biratnagar Place of AGM: Udhyog Sanghathan Sabha, Biratnagar
Major Decision Taken: Major Decision Taken:
• Declaration of dividend at 21.05263% (including bonus share 20%) • Declaration of dividend at 21.05263% (including bonus share 20%)
• Appointment of Mr. Rajendra Aryal and Mr. Birendra Kumar Sanghai from General • Authorized issue of right share at 5:1
Shareholders' Group to Board of Directors • Increase Authorised Share Capital to NPR 1,600,000,000
• Increase Subscribed and Paid up Share Capital to NPR 1,140,480,000 • Increase Subscribed and Paid up Share Capital to NPR 950,400,000
• Appointment of Mr. Suresh Prasad Acharya as Independent Director
12th 13th 14th

Place of AGM: Udhyog Sanghathan Sabha, Place of AGM: Udhyog Sanghathan Sabha, Place of AGM: Udhyog Sanghathan Sabha, Biratnagar
Biratnagar Biratnagar Major Decision Taken:
Major Decision Taken: Major Decision Taken: • Declaration of dividend at 20%
• Declaration of dividend at 15.79% • Declaration of dividend at 26.31579% • Appointment of Mr. Ganesh Man Shrestha as
(including bonus share 15%) Independent Director
• Increase Subscribed and Paid up Share • Appointment of Mr. Jagdish Prasad Agrawal, Mr. Tulsi
Capital to NPR 1,311,552,000 Ram Agrwal, Mr. Lokmanya Golcha and Mr. Bishal
Agrawal from Promoters' Group to Board of Directors
21st 20th

Place of AGM: Sanepa, Lalitpur Place of AGM: Babarmahal, Kathmandu
• Declaration of bonus share at 10% • Declaration of bonus share at 20%
• Increase Authorised Share Capital to NPR • Appointment of Mr. Jagdish Prasad Agrawal, Mr. Tulsi Ram Agrwal, and Mr. Ram
8,840,000,000 Chandra Sanghai from Promoters' Group to Board of Directors
• Increase Subscribed and Paid up Share Capital • Appointment of Mr. Rajendra Aryal, Mr. Binod Kumar Pyakurel and Mr. Aditya Kumar
to NPR 8,834,228,698 Agrawal from General Shareholders' Group to Board of Directors
• Increase Authorised Share Capital to NPR 8,040,000,000
• Increase Subscribed and Paid up Share Capital to NPR 8,031,116,998

4th 5th 6th

Place of AGM: Birendra Sabhagriha, Biratnagar Place of AGM: Hotel Ratna, Biratnagar Place of AGM: Hotel Namaskar, Biratnagar
Major Decision Taken: Major Decision Taken: Major Decision Taken:
• Declaration of dividend at 10% Appointment of Mr. Jagdish Prasad Agrawal, Mr.
Lokmanya Golcha, Mr. Basudev Golyan and Mr. Tulsi
Ram Agrawal from Promoters' Group to Board of
Directors
9th 8th 7th

Place of AGM: Udhyog Sanghathan Sabha, Biratnagar Place of AGM: Udhyog Sanghathan Sabha, Place of AGM: Hotel Namaskar, Biratnagar
Major Decision Taken: Biratnagar Major Decision Taken:
• Declaration of dividend at 10.5263% (including bonus Major Decision Taken: Appointment of Mr. Rajendra Aryal and Mr. Birendra
share 10%) Declaration of dividend at 30% (including bonus Kumar Sanghai from General Shareholders' Group to
• Appointment of Mr. Jagdish Prasad Agrawal, Mr. Tulsi Ram share 20%) Board of Directors
Agrwal, Mr. Ashok Kumar Agrawal and Mr. Nirmal Kumar
Agrawal from Promoters' Group to Board of Directors
15th 16th

Place of AGM: Udhyog Sanghathan Sabha, Biratnagar Place of AGM: Udhyog Sanghathan Sabha, Biratnagar
• Declaration of dividend at 25% • Declaration of dividend at 20%
• Appointment of Mr. Rajendra Aryal and Mr. Birendra Kumar Sanghai from General • Appointment of Mr. Jagdish Prasad Agrawal, Mr. Tulsi Ram Agrwal, Mr. Lokmanya
Shareholders' Group to Board of Directors Golcha, Mr. Ram Chandra Sanghai and Mr. Trilok Chand Agrawal from Promoters'
• Authrorized Board of Director for merger with "Bank of Asia" Group to Board of Directors
• Increase Authorised Share Capital to NPR 3,600,000,000 • Appointment of Mr. Rajendra Aryal, Mr. Binod Kumar Pyakurel and Mr. Birendra
• Increase Subscribed and Paid up Share Capital to NPR 2,311,552,000 Kumar Sanghai from General Shareholders' Group to Board of Directors
19th 18th 17th

Place of AGM: Dillibazar, Kathmandu Place of AGM: Udhyog Sanghathan Sabha, Biratnagar Place of AGM: Udhyog Sanghathan Sabha,
Major Decision Taken: Major Decision Taken: Biratnagar
• Declaration of bonus share at 26% • Declaration of bonus share at 39% Major Decision Taken:
• Authorized issue of right share at 1:0.15 • Authorized issue of right share at 4:1 • Declaration of dividend at 30% (including
• Increase Authorised Share Capital to NPR 8,000,000,000 • Shift registered office from Biratnagar to Kathmandu-11, bonus share 15%)
• Increase Subscribed and Paid up Share Capital to NPR Thapathali Trade Tower • Increase Subscribed and Paid up Share
6,692,597,498 • Increase Authorised Share Capital to NPR 5,000,000,000 Capital to NPR 2,658,284,800
• Increase Subscribed and Paid up Share Capital to NPR
4,618,769,840

3.4 CORPORATE GOVERNANCE

Since Banking is a trust business and a Bank manages hefty Recognizing the fact, the Board of Directors of the Bank has
amount of public funds in the form of public deposits and public approved the NIC ASIA Bank Corporate Governance Policy on
shares, the issue of corporate governance assumes a pivotal 31st May 2015 and effectively implemented thereafter.
significance in the Banking industries. Without having a robust
and sound corporate governance framework, the utmost job Objectives of the Policy
of protecting and ensuring the legitimate interest of all the Formulation of system documents (Policy/Manual/
stakeholders cannot be discharged effectively. It is therefore Guideline/Standard Operating Procedure (SOP) for each
imperative that a sound corporate governance framework that significant activity)
instills, monitors, reviews, and reacts to pertinent corporate
Periodic Review of effectiveness of such system
governance issues is pervasively implemented at all functions,
documents
activities, and levels of the Bank.
Establishment of a sound Organization Structure
The Bank is committed to be governed by the highest standards
Enforcement of Code of Conduct and Effective Discharge
of corporate Governance. Compliance with the applicable
of Roles & Responsibilities
rules and regulations of the country and with the directives/
circulars/guidelines issued by various regulatory authorities is Framework for identification and avoidance of Conflict of
the utmost priority of the Bank and the Bank ensures robust Interests
compliance thereto, in word as well as the spirit. Enforcement of sound corporate cultures and practices
Monitoring, Review, and Reporting Framework
LEGISLATIVE AND REGULATORY FRAMEWORK ON CORPORATE GOVERNANCE
Bank and
Financial
Institutions
Act Company
Securities
Act Act
Banking
Securities
Offense and
Issue and
Punishment
Regulation
Act
Act
NRB Unified Nepal Rastra

Directive Bank Act

INDICATORS OF CORPORATE GOVERNANCE
INDICATORS OF
CORPORATE GOVERNANCE
Internal/ Responsibility division Internal Control

Corporate Culture Stakeholders'
Regulatory between Board and System and Risk
and Practice Response
Compliance Management Management
CORPORATE GOVERNANCE FRAMEWORK Procedural and operational provisions required for

implementation of the policies are covered in the manuals,
The Corporate Governance Framework of the Bank typically or guidelines, or Standard Operating Procedures
consists of the following:
Various policy documents of same nature (interrelated)
Formulation of system documents formulated by the Bank are integrated into a single policy
Periodic Review of effectiveness of system documents document
Establishment of a sound Organization Structure Prior to formulation of any policy/manual/guideline/
Enforcement of Code of Conduct and Effective Discharge procedures, the impact and readiness assessment
of Roles & Responsibilities of such document are analyzed so that all aspects of
implementation of the documents are duly taken care of.
Framework for identification and avoidance of Conflict of
Interests Comprehensive "Integrated Risk Management Policy"
covering all major risk areas viz. credit risk, operational
Enforcement of sound corporate cultures and practices
risk, market risk, liquidity risk of the banking business are
Effective monitoring, Review, and Reporting Framework formulated and approved by the Board.
Formulation of all the Policies/Manual/Guidelines except
Policy/Manual/Guidelines related to Internal Audit
FORMULATION OF SYSTEM DOCUMENTS Department are coordinated by the Integrated Risk
Management Department in liaison with various other
The Bank formulates required Policies, Manuals, and Guidelines
departments
for each significant area of business, control, and support. A
separate Standard Operating Procedure (SOP) is prepared All the manuals/guidelines/Standard operating Procedures
for each important activity carried out by the Branches and approved by the Chief Executive Officer or his designate
Departments of the Bank. are forwarded to the Board for its information after their
formulation and revision.
Board level policies are formulated and implemented after
approval of Board.

The authorities for approval of various internal documents are as follows:
Final Approving Au-

S.N Document title
thority
1 Bylaws Nepal Rastra Bank
2 Policy Board
3 Manual Chief Executive Officer
4 Circular Chief Executive Officer
5 Procedural Guideline Chief Executive Officer
6 Standard Operating Procedure Chief Executive Officer
Product Paper Guideline (expect Product Paper Guideline for products that qualify under Claims on Regu-
7 Chief Executive Officer
latory Retail Portfolio and Claims Secured by Residential Properties)
Product Paper Guideline for products that qualify under Claims on Regulatory Retail Portfolio and Claims
8 Board
Secured by Residential Properties
Any Policy/Guideline/Product paper which is required to be approved by the Board as per the prevailing
9 Board
regulation
10 Revision of any forms/ formats incorporated in existing Policy except the format prescribed by Regulator Chief Executive Officer
ESTABLISHMENT OF SOUND Channel Support and ATM Management Department, SWIFT

ORGANIZATION STRUCTURE Department, Central Support Department and Loan Recovery
Department
Organization structure of the Bank is defined by ensuring
independency and compatibility of the functional units. The 3. Control Function
basic fundamental principle of any system of Internal Control
The Departments/Units involved in control and compliance
i.e. segregation of incompatible functions are ensured in all
functions fall under this function i.e. Integrated Risk
structures within the Bank. Organization structures of the
Management Department and Internal Audit Department
Bank are categorized under following three functions:
1. Business Function: CODE OF CONDUCT OF THE BANK

The Departments/Units involved in client facing activity of the Bank's code of conduct or code of ethics defines acceptable
Bank fall under this function e.g. Corporate Loans, Small and and unacceptable behaviors;
Medium Enterprises Loans, Retail Loans, DSL, Priority Loans,
CASA, Institution Deposit, Branchless Banking, Remittance, It explicitly disallows behavior that could lead to any
Business functions at Branches and Treasury Department. reputation risks or improper or illegal activity, such as
financial misreporting, money laundering, fraud, anti-
2. Support Function competitive practices, bribery and corruption, or the
The Departments/Units involved in supporting the Business violation of consumer rights.
Functions fall under this function e.g. Credit Approval It makes clear that employees are expected to conduct
Department, Branding, Corporate Communication and CSR themselves ethically in addition to complying with laws,
Department, Experience Enrichment Department, Finance regulations and company policies.
Department, Think Tank Department, DNA and Talent
Management Department, General Administration and
Project Department, Information Technology Department, APPOINTMENT OF DIRECTOR
Digital Banking Department, Legal Department, Credit General Meeting of the Bank appoints the director in line
Operation Department, Central Remittance Department, with the Bank and Financial Institution Act, Company
Centralized Clearing Department, Central Account Opening Act, Directives and Regulations of Nepal Rastra Bank,
Department, Centralized Trade Operation Department, Digital

Memorandum and Article of the Bank. and control bank operations and risks and to comply
However, in case if position of director becomes vacant with relevant legislation and regulations
before next annual general meeting, appointment of Provides regular and sufficient information to the
director for remaining period till next annual general Board to enable it to discharge its monitoring duties in
meeting is done by Board of Directors. relation to these matters;
As provided in the Article of Association of the Bank, in Implements disclosure policies and procedures that
compliance with Bank and Financial Institution Act, the comply with regulatory requirements
tenure of directors is four years. All the directors are eligible Recommendation of final dividend payments;
for reappointment.. Approval of the adoption of any significant change in
accounting policies or practice;
BOARD OF DIRECTORS’ COMMITMENTS
Approval of the applicable policies of the Bank;
Upholds the highest ethical standards of integrity and Appointment of the independent director
probity;
Ensuring that the Board has the appropriate number and
Supports executives in their leadership of the business
quality of directors to fulfill its responsibilities;
while monitoring their conduct;
Constitution of committees of the Board with terms of
Questions intelligently, debates constructively, challenges
reference as necessary;
rigorously and decides dispassionately;
Ensuring the forward planning of the main executive
Listens sensitively to the views of others;
appointments within the organization;
Gains the trust the respect of colleagues; and
Approval of the appointment, dismissal, and remuneration
Promotes high standards of corporate governance
of the executives of the Bank one level below the Board;
Approval of the appointment and removal of the Head of
BOARD OF DIRECTORS’ ROLES & Internal Audit Department, and the Company Secretary;
RESPONSIBILITIES
Approval and review of the corporate governance policy/
Decision on the long-term objectives of the Bank; framework of the Bank;
Decision on the credit and investment policies of the Bank;
BOARD OVERSIGHT
Approval of the strategies necessary to achieve these
The Board approves overall strategies and policies of the Bank,
objectives, bearing in mind the activities of competitors
taking into account the Bank's long-term financial interests, its
and potential competitors and the risks inherent in these
exposure to risk, and its ability to manage risk effectively, and
strategies;
approve and oversee the implementation of the banks:
Approval of authorities and powers delegated to the
Business objective and strategy;
Chairman, Board of Directors, Board Level Committees and
Chief Executive Officer. Overall risk strategy, including its risk tolerance/appetite;
Approval of the Bank's annual budget; Policies for risk, risk management and compliance; .Internal
Reviewing and, where appropriate, approving material Capital Adequacy Assessment Process, Capital Plan and
related party transactions which are not in the ordinary Liquidity Plans;
course of business; Compensation System;
Approval of the establishment of any subsidiary company; Internal control system;
Ensuring that the bank manages risk effectively by Corporate governance framework, principles and corporate
Determining and approving the Bank's risk appetite values, including a code of conduct
Approving the Bank's risk management framework It is also responsible for providing oversight of senior
Monitoring the Bank's aggregate risk exposures and management, which includes approval of policies of the Bank
return on risk taken. as well as monitoring and reviewing the effectiveness of
policies implemented. In doing so, the Board::
Ensuring that the executive management of the Bank
Establishes and maintains appropriate systems to plan Monitor that senior management's actions are consistent
with the strategy and policies approved by the board,

including the risk appetite; The newly appointed directors are oriented in the following
Meet regularly with senior management; subject matter, among others, within one month of the
Question and critically review explanations and information appointment:
provided by senior management; Organizational structure of the Bank
Set appropriate performance and remuneration standards Nature of Bank's Business;
for senior management consistent with the long-term Corporate Governance;
strategic objectives and financial soundness of the bank; Mission, Vision and Values of the Bank;
Ensure that senior management's knowledge and Business Plan of the Bank;
expertise remain appropriate given the nature of the
Duties, responsibilities and accountability of the Director;
business and the bank's risk profile; and
e.g. Risk management strategy;
Ensure that appropriate succession plans are in place for
Integrated economic and financial position;
senior management positions.
Prevalent legal Provision;
TRAINING & KNOWLEDGE ENHANCEMENT Prevalent banking services and practices; and
PROGRAM FOR BOARD Regulatory Provisions.
Orientation program on the following subject matter, among
The role of Board of Directors is vital in effective implementation
others' are provided to the Directors on an annual basis
of corporate governance. Hence, the Directors have a clear
understanding of their role in corporate governance and able Transparency;
to exercise sound and objective judgment about the affairs Disclosure;
of the Bank. In order to help Directors acquire, maintain and Conflict of Interest;
deepen their knowledge and skills required to fulfill their Compliance;
responsibilities, various training and education programs are
Relation and Coordination with other institutions; and
conducted.
International best Practices.
BOARD LEVEL COMMITTEE/ SUB COMMITTEE
AUDIT
COMMITTEE
RISK MANAGEMENT
COMMITTEE
BOARD LEVEL
COMMITTEE/ SUB KARMACHARI SEWA
COMMITTEE SUBIDHA SAMITI
SAMPATI
SUDDHRIKARAN
NIWARAN SAMITI
LAND ACQUISITION
COMMITTEE

Ensuring that employees, including senior management,
are aware that appropriate disciplinary or other actions will
CHAIRMAN’S ROLES AND
follow unacceptable behaviors and transgressions.
RESPONSIBILITIES
Leading the Board in providing strong strategic DUTY OF CARE AND DUTY OF LOYALTY
oversight, setting the agenda, challenging The Directors exercise their "duty of care" and "duty of loyalty"
management’s thinking and proposals to ensure to the Bank. This includes engaging actively in the major
sharpness of thinking and creativity in a challenging, affairs of the Bank and keeping up with material changes in
complex and fast-changing environment, thereby the Bank's business and the external environment, as well as
ensuring clear decisions are made and action are acting to protect the interests of the Bank' Directors act on a
taken. fully informed basis, in good faith' with due diligence and care,
Ensuring the Board is a high-performing team with a and in the best interest of the Bank. In doing so:
shared sense of purpose and open and constructive
The Directors should take informed decisions with
debate amongst all the directors.
adequate due diligence and care, where director's expertise
Organize periodic monitoring and evaluation, including is insufficient in any of the decision making activity, the
externally facilitated evaluation of the performance of board seeks counsel from competent and independent
the Board and its committees and individual directors. experts as needed;
Promote the highest standard of corporate The Directors should be fully satisfied that, the key
governance, complying with directives and regulations corporate information and compliance systems are
of regulatory bodies. fundamentally sound and underpin the key monitoring role
Ensure effective, regular communication with of the Board;
shareholders and that their views are communicated The Directors should question and critically review
to the Board as a whole. explanations and information provided by the senior
With support of Company Secretary arrange Board management during the course of Board and Board Level
meeting in regular interval throughout the year. Committee meetings;
The Directors shouldn’t act in their own interest, or the

interest of another individual or group, at the expense of
the Bank;
ESTABLISHMENT OF “TONE AT THE TOP” The Directors should promptly disclose any matter that
In order to promote a sound corporate culture, the Board takes may result, or has already resulted, in a conflict of interest.
the lead in establishing the "tone at the top" by Whenever there is a conflict of interest (actual or perceived)
the directors is not involved in such activity;
Setting and adhering to corporate values for itself,
senior management and other employees that create The Directors should help Board to set tone at the top to
expectations that all business are conducted in a legal and promote highest standard of corporate culture and values
ethical manner; in the Bank;
Promoting risk awareness within a strong risk culture, The Directors should individually as well as collectively
conveying the board's expectation that it does not with other directors, own responsibility for inculcating,
support excessive risk taking and that all employees are steering, promoting, reviewing and controlling overall
responsible for helping to ensure that the bank operates corporate governance framework of the Bank and abide
within the agreed risk appetite and risk limits; by exemplarily corporate governance norms in all their
actions, behavior and decisions; and
Ensuring that appropriate steps are taken to communicate
throughout the bank the corporate values, professional The Directors shouldn’t directly or indirectly, influence the
standards or codes of conduct it sets, together with lending, recruitments, procurement and other operational
supporting policies; and or business decisions of the Bank except those falling
under the Board's Decision.

APPOINTMENT OF CEO Chief Executive Officer, Director, and Employee at other profit-
oriented organization. However, restriction is not imposed
Appointment of Chief Executive Officer of the Bank is governed to become a Director of "Infrastructure Development Bank"
by several regulatory provisions under Banks and Financial funded by the Bank.
Institutions Act and Nepal Rastra Bank Directives, Circulars and
Guidelines. In addition, the Board has its own requirements Appointment of Chief Executive Officer of the Bank is governed
for assessment of qualification of Chief Executive Officer to by several regulatory and internal provisions as follows:
be appointed. Appointment of Chief Executive Officer is based
I. REGULATORY REQUIREMENT
on evaluation of skills, experience, capability, track record and
qualification of the candidate. The competency of the candidate Bank and Financial Institutions Act
is evaluated based on past performance of the individual. Nepal Rastra Bank Directives, Circular and Guidelines
Nepotism or favoritism is avoided. The Board of Directors
Other legal provisions
of the Bank also refers to Memorandum of Association and
Articles of Association of the Bank, and Bank and Financial II. INTERNAL REQUIREMENT
Institutions Act, and other legal provisions related with the
Memorandum of Association
appointment of the Chief Executive Officer. The Chairman of
the Board is not appointed as Chief Executive Officer. Likewise, Article of Association
the Chief Executive Officer is restricted to hold positions of Framework established by Board
CEO’S ROLES & RESPONSIBILITIES

To oversee and control the entire functions and operations of To implement a robust system of internal control, risk
the Bank; management, and corporate governance at all levels,
To prepare annual budget and strategic plan of the Bank functions, and processes of the Bank;
and furnish to the Board for approval and effectively To ensure that the Bank is managed systematically, and
implement the same and ensure that the Bank is effectively effective policies, procedures, manuals, guidelines, and
managed, and its periodic goals and budgets are achieved Standard Operating Procedures are in place for each
in an effective and efficient manner; significant activity in which the Bank engages;
To manage the human resources of the Bank within the To ensure prudence, propriety, regularity, economy, and
scope of the Employee Services By-Laws of the Bank and effectiveness at all levels, functions, and activities of the
ensure their effective utilization and management; Bank;
To implement the decisions of the Board of Directors and To ensure adequate disclosures to pertinent stakeholders
the General Meetings of the shareholders; To perform other activities as specified by the Board of
To ensure compliance with the Bylaws and Policies of the Directors from time to time.
Bank as well as with the legal and regulatory requirements;
CODE OF CONDUCT FOR CEO

It is the responsibility of Chief Executive Officer to fully Act, 2073 has stipulated the appointment and condition of
adhere to the highest standards of Corporate Governance, service of Chief Executive Officer and functions, duties and
Code of Conduct, Ethical Practices and Regulatory and Legal authorities of the Chief Executive Officer. Nepal Rastra Bank's
compliance. The Chief Executive Officer is accountable to the Directive No. 6 has prescribed some of the qualification and
Board for all functions and implements the decisions of the conducts of the Chief Executive Officer.
Board, supervise and control the activities and transactions of
the Bank. Section 29 and 30 of Banks and Financial Institution

APPOINTMENT IN SENIOR MANAGEMENT by the Board itself, and the job carried out by various Board
POSITIONS Level Committees, and the Chief Executive Officer.
The Board is responsible for constituting the panel of a. Periodic Evaluation of Board
Senior Management of the Bank through approval of the The Board shall conduct an assessment of its own activities
Organization Structure and the Job Positions and Grades and functions at least on an annual basis. The detailed criteria
Available at the Senior Management. Management Committee and procedure for evaluation of the Board's performance and
is headed by the Chief Executive Officer. The appointment for peer evaluation of the directors shall be as prescribed by
in Senior Management positions is based on assessment of the Board from time to time. Further' the board:
qualifications, skills and experience for performing in the Periodically review its structure, size and composition;
respective functional area of the Bank. The Chief Executive
Assess the ongoing suitability of each board member
Officer, Chief Risk Officer, Head of Internal Audit Department
periodically (at least annually) also taking into account his
and the Company Secretary are appointed by the Board
or her performance on the board;
remaining within the provisions of related Act and NRB
directives/guidelines. Appointment of DCEO is done by the Either separately or as part of these assessments,
Board of Directors on recommendation of CEO. Appointment periodically review the effectiveness of its own governance
in the other job grades is approved by Chief Executive Officer practices and procedures' determine where improvements
in line with provision of HR Service Bylaws of the Bank. The may be needed, and make any necessary changes; and
Bank has "Integrated Organization Development and Human Use the results of these assessments as part of the ongoing
Resource Management Policy” for governing appointment improvement efforts of the board and, where required by
function of the Bank. the supervisor, share results with the supervisor.
ROLES & RESPONSIBILITIES OF SENIOR b. Periodic Evaluation of Board Committee

MANAGEMENT Evaluation of the activities carried out by all the Board Level
Committees are conducted by the Board at least on half yearly
Senior Management is the team led by the Chief Executive
basis. The Terms of Reference of the Board level committees
Officer in carrying out the business and operational functions
as prescribed by the Nepal Rastra Bank and the Board form a
of the Bank. The illustrative list of roles and responsibilities of
primary basis for the evaluation.
the Senior Management relating to this policy are as follows:
Carry out and manage the Banks activities in a manner c. Periodic Evaluation of Chief Executive Officer
consistent with the business strategy, risk appetite, The Board establishes specific evaluation criteria and the
incentive compensation and other policies approved by evaluation process for reviewing the performance of the Chief
the Board. Executive Officer at least on an annual basis. The performance
review is based on various qualitative as well as quantitative
Contribute to the Banks Corporate Governance through
factors including the budgetary performance, profitability,
personal conduct.
asset quality, effectiveness of the system of Internal Control,
Delegating authorities to staff and shall establish a Risk Management, and Corporate Governance and the status
management structure that promotes accountability and of implementation of the strategic plan of the Bank. The
transparency throughout the Bank. results of the review are also communicated to the Chief
Provide the Board with the information it needs to Executive Officer.
carry out its responsibilities and keep Board adequately d. Review of Financial Performance of the Bank
informed relating to the changes in business strategy, risk
The Board reviews the financial performance of the Bank at
strategy, Banks performance and conditions, risk limits
least on a monthly basis. It is the responsibility of the Board
and compliance rules legal and regulatory concerns and
to review whether growth of the Bank is as per its long-term
internal control failures.
strategy and the risk appetite. The Senior Management is
responsible to present fair, balanced and understandable
PERIODIC EVALUATION
assessment of financial performance of the Bank to the
Periodic evaluation and review is crucial for improving the Board as well as to external parties as required by prevailing
performance of any authority. Hence, the Board of Directors of regulatory/statutory requirements The Board establishes
the Bank shall conduct periodic evaluation of the job performed arrangements that will enable it to ensure that the information

presented is fair, balanced and understandable. colleagues, subordinates, and seniors. Employees should
respect people from all cultures and social backgrounds.
e. Annual Performance Review Employees should not practice any form of discrimination,
Senior management of the Bank is responsible for annual harassment and bullying in the workplace.
performance review of every Department, Branch and
In a case where any employee feels that he/she is being
Business/Operating unit of the Bank as per the policies
victimized by such behavior, he/she may report/consult
approved by the Board and in compliance with the HR
with line manager or senior authority Employees are
Bylaws of the Bank. Also, performance of each employee
also encouraged to inform one's line manager or senior
is evaluated against objective criteria and result of such
authority when they observe other employees being
evaluation is utilized as one of the basis for career movements
victimized by such behavior.
of employees. The criteria based on which performance of an
individual assessed are fair, objective to the extent possible Being a corporate citizen, the Bank is committed to building
and instrumental and are also communicated to the concerned and maintaining a strong relationship between the Bank
individual and the performance goal for a Fiscal Year are and the larger community. The Bank also invests in social
agreed before the commencement of the Fiscal Year. The Bank causes through separate vehicle.
has a "Performance Management, Reward and Punishment Bank respects the protection of internationally proclaimed
Policy" for governing all the functions relating with Annual human rights and make sure that businesses being
Performance Review activities of the Bank conducted by the Bank are not complicit in human rights
abuses.
ORGANIZATION CULTURE OF ZERO
Bank upholds the freedom of association and the effective
TOLERANCE
recognition of the right to collective bargaining within the
The Bank adheres to the zero tolerance policy on the standards Bank; the elimination of all forms of forced and compulsory
of corporate governance and compliance. All the employees labor within the Bank; the effective abolition of child labor
are required to be fully committed to abide by the highest within the Bank; and the elimination of discrimination in
standards of corporate governance. It shall be the individual respect of employment and occupation within the Bank.
and collective responsibility of all the employees of the Bank Bank supports a precautionary approach to environmental
to ensure compliance with all the legal, regulatory, and internal challenges; undertake initiatives to promote greater
requirements. Any deviation from the prescribed standard may environmental responsibility; and encourage the
invite disciplinary action. development and diffusion of environmentally friendly
technologies.
FINANCIAL DISCIPLINE & MALPRACTICE Bank doesn’t tolerate corruption in all its forms including
Lack of financial discipline and malpractice can hinder Bank's extortion and bribery while conducting its transactions.
success and put its reputation at risk. All financial expenses of
the Bank are controlled within limit of the approved budget EQUAL EMPLOYMENT OPPORTUNITY
and within exceptions provided in Finance Administration
Bylaw of the Bank. The financial or accounting records are The Bank is an equal opportunity employer and does not
maintained so as to reflect an accurate and true depiction unlawfully discriminate against employees or applicants for
of the transaction to which they relate. Illegal practice can employment on the basis of an individual's race, religion, creed,
involve deliberate actions of theft, fraud, false accounting or sex, marital status or any other status protected by applicable
recording, violating the policies of the Bank, etc. lf any mal- law. This policy applies to all terms, conditions and privileges
practice is suspected, such issues are thoroughly investigated of employment, including recruitment, hiring' placement,
and reported to the Board. compensation, promotion, discipline and termination. Senior
Managements ensure equal opportunity employment.
ORGANIZATION BEHAVIOUR
NEED TO KNOW & RIGHT TO KNOW
Corporate governance is not achieved merely by complying
with the requirements. It is effectively practiced in the day Information about the Bank is shared generally on need to
to day working culture, values, behavior, and approaches. know basis. However, information that is statutorily required to
Employees should show respect and politeness to be provided to various stakeholders is provided as prescribed

under applicable statutes. It is the policy of the Bank to keep IT GOVERNANCE
the relevant stakeholders fully updated of material aspects
of the Bank except the business strategies, and business IT governance, as sub-category of corporate governance, has
and customer secrets. The employees of the Bank generally its specification and is of crucial importance for the Bank to
have right to know all the Bylaws, Policies, Manuals, Standard continue performing business activities by minimizing risks and
Operating Procedures, and similar documents of the Bank. In accomplishing its full potential. The Bank has led the industry
fact, it is the individual responsibility of all the employees of by embracing emerging technologies, and the role of IT in
the Bank to keep them fully updated of all the internal and delivering customer value has continued to gain prominence
regulatory pronouncements so far as these are applicable as the Bank drives migration to e-based platforms. The
to their areas of work. All the Policies, Bylaws, Manuals, and reliability and efficiency of IT systems also has a direct impact
Circulars of the Bank are also uploaded into iZone. Similarly, on the quality and timeliness of information that is generated
as a general rule, the Board and the Board level committees for regulatory reporting and decision making. The Bank has
have the right to be updated on material aspects of the Bank. thus identified the competitive advantage stemming from the
The Board and Board level committees may also specify appropriate alignment of IT objectives with overall business
their information and update requirements through various objectives. The Bank’s integrated information technology
documents and decisions, wherever required which are to be policy, approved by the Board, is a consolidated version
promptly taken care of. All the employees of the Bank should of different policies and procedural guidelines related to
deal with the documents, records, information etc. about information technology. It facilitates and supports authorized
the Bank or any of its stakeholders that came to their notice access to the Bank’s information system, changes management
with utmost confidentiality and sincerity. Any unauthorized framework on information technology, and aids management
disclosure or other misuse of information shall immediately of various IT security incidents occurring during the course
trigger disciplinary actions. of day-to-day operations. Audit of networks and systems is
conducted on a periodic basis to ensure compliance with the
Bank’s information technology policies and procedures.
EXPLICITLY DISALLOWED BEHAVIOR
It is the individual and collective responsibility of all the
employees of the Bank not to involve in behavior explicitly
disallowed that could lead to any reputation risks or
improper or illegal activity, such as financial misreporting,
money laundering, fraud, anti-competitive practices, bribery
and corruption, or the violation of consumer rights, sexual
harassments etc.

3.5 DIRECTOR’S REPORT

Respected Shareholders, Based on Bank’s non-funded revenue, Bank has achieved
tremendous growth of 126% in profit,
With warm regards, I would like to welcome you on behalf
of Board of Directors and entire NIC ASIA family for your Bank was awarded with Best Presentation Annual
noteworthy participation in 22nd Annual General Meeting of Report Award by Institute of Chartered Accountants of
Bank. Nepal (ICAN). Bank has always been enroute of Integrity,
Transparency and Fairness.
In year 2018-19, banking sector faced deficit of resource
around the year. Liquidity crisis continued from beginning of In addition to above, bank is vigorously moving ahead for
first quarter till last quarter. Despite the deficit, business and achievement of long term goals like special focus on personal,
financial result achieved by our bank during the review small and medium enterprises loan and attention on
period is commendable. current and saving deposit, increase in customer
base and increase in share of non-interest
During review period, Bank had formulated income during the review period.
and passed long term strategy, “VISION
18-22”. All tactical plans of Banks were
We are committed We are committed towards uplifting
oriented towards achievement of towards uplifting banks banks to new prominence in near future
goals of “VISION 18-22”. Highlights of and this is evident through financial
achievements of Bank as per long
to new prominence in near result of this year.
term strategy are as follows: future and this is evident
Following report prepared in
For year 2017-18, bank had through financial result of accordance with Companies Act, 2063,
historic achievement of footprint this year. Securities Registration and Issuance
expansion of 112 branches. Regulation, 2073 and Bank and Financial
Bank has continued its historic Institutions Act, 2073, for review of
achievement with expansion of 61 achievements and challenges during review
branches during the review period. NIC period, short term and long term plans for future
ASIA Bank is Nepal’s No. 1 Bank in terms of period and overall banking activities have been
branches with 292 branches in total (Total of 297 presented in this 22nd annual general meeting on behalf of
branches till date of preparation of this report), Board of Directors of bank.
With new facilities in digital banking, Bank has provided A. OVERVIEW OF BANKING TRANSACTIONS
service to nearly 10% of overall digital banking customers, DURING 2018/19
In impactful message delivery and branding sector, As financial statement of 2018/19 was prepared as per Nepal
Bank won an award in Best Financials Sector-Campaign Financial Reporting Standard (NFRS), financial details and
Category for “Soch Badlau” advertorial. During the review indicators of 2017/18 were calculated on the same basis.
period NIC ASIA Bank was Nepal’s No. 1 Bank in terms of Details of achievements of 2018/19 and 2017/18 are presented
Banking Brand, as follows:
For Experience Transformation of customers, “Customer

Experience Enrichment Department” has made continuous
improvement in services and facilities,

NPR in millions
Percentage
Particulars 2017-18 2018-19 Increment/
(Decrement)
Paid up Capital 8,031 8,832 10%
Deposit 151,219 180,575 19%
Total Loan 120,667 150,108 24%
Investment 14,403 19,357 34%
Total Asset 170,943 217,697 27%
Operating Profit 1,918 4,514 135%
Net Profit 1,335 3,023 126%
Net Profit/Total Asset (%) 0.97 1.56 60%
Net Profit/Net worth (%) 12.09 22.73 88%
Non-Performing Loan/Total Loan (%) 0.0697 0.46 560%
Earning Per Share (NPR) 16.62 34.22 106%
During the review period, total lending of the Bank has Net Profit (in millions)
increased by 24% and reached NPR 150.11 billion. Similarly,
deposit has increased by 19% and reached NPR 180.58 billion.
3,023
Total lending and deposit of the banking industry of the
nation has increased by 19% and 16%, respectively, during the
review period. Likewise, size of balance sheet of the Bank has
increased by 27% and reached NPR 217.69 billion.
There has been tremendous increment in Net Profit despite

1,335
increment in operational and employee expenses. During FY
2018/19 Operational Profit increased by 135% and net profit
increased by 126% and reached NPR 4513 million and NPR
3023 million respectively. During FY 2018/19 Return on Equity
and Return on Assets are 22.73% and 1.56% respectively 2017-18 2018-19
which were 12.09% and 0.97% respectively during the FY

2017/18. We believe that investment made during FY 2018/19
shall contribute for enhancement of business and generating
income in the coming years. Earning per Share has increased Operating Profit (in millions)
by 106% from NPR 16.62 to NPR 34.22 during FY 2018/19.
PAID UP CAPITAL AND CAPITAL ADEQUACY RATIO 4,514
Capital Adequacy Ratio of the Bank during FY 2018/19 is 13.32

%. It is 2.32% more than the minimum Capital Adequacy Ratio
prescribed by Nepal Rastra Bank, i.e 11%.
ACCUMULATED PROFIT AND RESERVE FUND 1,918
Due to tremendous increment in Net Profit by 126%, Reserve

fund has increased by 48% and reached NPR 3.98 billion from
NPR 2.70 billion. Also, accumulated profit has increased by
124% from NPR 943.65 million to NPR 2112.88 million.
2017-18 2018-19

DEPOSIT
Investment (in millions)
Total deposit has increased by 19% during FY 2018/19 and
reached NPR 180.58 billion. Average growth rate of deposit of
industry during review period is 16% only. During the review 19,357
period, fixed deposit, saving deposit, and call deposit of the
Bank have increased by 21%, 22%, and 20%, respectively.
14,403
During the review period, the Bank has introduced
“Sammunaatti Bachat Khata”, “New Premium Sammunaatti
Khata”, “Chamatkarik Bachat Khata” and “Chamatkarik Muddati
Khata” plans which helped the bank to achieve growth of 22%
in deposit and open 525,039 new saving accounts. For the
coming years, the bank’s strategy shall focus on increasing
saving deposits and number of deposit accounts. As on the
end of review period, the bank has 1,604,718 deposit accounts. 2017-18 2018-19
Bank’s current and saving deposit contributes to 42.33% of

total deposit which was 40.62% during previous period.
During the review period, the bank's incremental market share

in deposit of the bank's market is 6.23%. Similarly. share on Paid up Share Capital (in millions)
total deposit of the banking industry is 6.17% during FY 2018-
8,834
19, which was 5.85 during FY 2017-18. The Bank is able to
maintain ratio of individual and institutional deposits as per the
requirement of Nepal Rastra Bank, i.e. portion of institutional
deposit is not more than 50% of total deposit, as follows:
Type of Deposit Percentage
Individual Deposit 67 8,031

Institutional Deposit 33
Total Deposit 100
The Bank is focused on collecting deposit from small depositors

2017-18 2018-19
scattered all over the country in order to minimize the liquidity
risk and concentration risk for the Bank and this is expected to
improve the cost of deposit as well.
Loans and Borrowings (in millions)
LOAN AND LOAN LOSS PROVISION
'Excluding Staff Loan'
During the review period, total loans and advances of the Bank
stood at NPR 150.10 billion, which is 24% growth compared to 150,108
previous year. Average growth rate of loans and advances of
the banking industry in the review period was 19%. As per the 120,667
strategy of the Bank, retail loan portfolio increased by 20%,
small and medium enterprises by 28%, deprived sector lending
by 46%, and corporate credit by 19%.
Business Segment % Increase in Loan Limit
Retail Loan 20
Small and Medium Enterprises Loan 28
Deprived Sector 46
Corporate 19 2017-18 2018-19

In line with the long term strategy of the bank and to make
21%
the Bank the first choice of customers, Retail, Productive, and Other Investments
Small and Medium Enterprise Loans have been prioritized by
simplifying the procedures as per the requirement of customers,
and by introducing various schemes with innovative features.
The Bank has attained increment by 20% in retail loan due to 7%
the same long term strategy. By focusing on deprived sector INVESTMENT Treasury Bills
lending, NPR 13.63 billion has been disbursed to the deprived

sector, which is 9% of total loans and advances.
In line with minimum limit set by Nepal Rastra Bank for 72%
Government
investment in agriculture, energy & tourism, and priority
Bond
sector, which is 10%, 15% and 25% of total lending, the Bank
has ensured compliance with the same by investing 10.90%,
15.73%, and 28.17%, respectively, in those sectors. Similarly, the In order to ensure proper utilization, diversification of
Bank has invested 9.08% in deprived sector lending, where investment, and to improve income from investment, the Bank
minimum limit set by Nepal Rastra Bank is 5%. is conscious about expanding scope of investment.
Investment in mutual fund and shares during the review

Loan Limit Set by NRB (%) Bank Loan (%)
period is NPR 4.01 billion. Investment in secondary market has
Agriculture 10 10.90
been done in companies that are capable of distributing long-
Energy and tourism 15 15.73
term return in the form of dividend, and the Bank earned NPR
Priority Sector 25 28.17 31 million cash dividend from investments portfolio during the
Deprived Sector 5 9.08 review period .
Similarly, the Bank is committed to comply with any investment INTEREST INCOME
limits set by Nepal Rastra Bank from time to time. During the review period, Interest Income of the Bank increased
by 43%, and total interest income during FY 2018/19 stood at
During the review period, total loan loss provision of the Bank
NPR 19.35 billion. Interest Income from loans and advances
increased from NPR 1.28 billion to NPR 1.88 billion. NPR 598.9
was NPR 18.35 billion, which is 45% increment compared to
million has been booked as expenses for loan loss provision
previous year. Similarly, Interest Income from other investment
during FY 2018/19. Ratio of non-performing loan over total loan
is NPR 810 million, which is 33% increment in comparison with
loss provision is 273%. Ratio of nonperforming loan to total
that of previous year.
loans and advances has increased during the review period to
0.46%, which was 0.06% during the previous year. Breakdown of Interest Amount during review
% Increment
Income period (in NPR ‘million)
The Bank has prioritized investment in low risk loans in order Interest Income on Loan 18,350 45
to achieve results in line with the long-term strategy adopted
Interest Income on Investment 810 33
by the Bank. Recovery and management of loan function of
Total 19,350
the Bank has been strengthened in order to minimize the risk
that may occur due to non-performing loans, and reduce loan Due to increase in total loans and advance by 24% during the
loss provision. review period and graded replacement law yield corporated
portfolio by high yield SME portfolio have contributed the 45%
increment in the interest income from loans.
INVESTMENT
Also, the interest income on investment was optimised by 33%
During the review period, investment of the Bank has reached when investments in low return treasury bills were replaced by
NPR 19.36 billion, which is 34% in addition to investment of high yielding Government bond.
previous year. Out of total investment, investment in Treasury
bills, government bond, and other investment is 7.24%, 72.02%, INTEREST EXPENSE
and 20.74%, respectively. During the review period, total interest expense of the

Bank reached NPR 12.39 billion, which is 33% increment in and other operating income in the total profit of the Bank.
comparison to that of the previous year. Total interest expense With extension services like NIC ASIA Remittance, credit card,
on deposit reached NPR 11.65 billion, which is 36% increment QR Code and point of sale (POS), we believe that net fees and
in comparison to that of the previous year. Similarly, Interest commission income of the Bank shall increase in the coming
Expense on borrowing stood at NPR 562.7 million, which is years.
219% increment in comparison to the previous year because of
issuance of debenture amounting to NPR 4.23 billion. OTHER OPERATING INCOME
Other Operating Income of the Bank during the review period
Amount during review
Breakdown of Interest Expense period % Increment is NPR 76 million, which is 9% less in comparison to that of
(in NPR ‘million) the previous year i.e. NPR 83.6 million. Share of income from
Interest Expense on Deposit 11,650 36 trading of foreign exchange in other operating income of the
Bank is 3.34%.
Interest Expense on Debenture 563 219
Interest to BFIs and NRB 173 (66)

STAFF EXPENSES
During the review period, Staff Expenses of the Bank increased
Total 12,386
by 39.15%, from NPR 1.78 billion in previous fiscal to NPR 2.48
billion. Staff Expenses of NPR 2.48 billion includes staff bonus
Increment in deposit, decrease in minimal interest call account,
of NPR 493 million which is increased by 145% due to increase
and conversion of saving deposits into fixed deposits resulted
in profit.
in increase in Bank’s total deposit by 19%; hence the Bank’s
interest expense increased by 33%. Increase in Staff Expenses by 39.15% is the result of increase
in number of employees due to expansion of branches Total
In line with the long-term strategy of the Bank to increase
number of staff has increased by 1,181 during the review period,
share of current and saving accounts in total deposits of
from 2,291 to 3,472.
the Bank, various deposit products and schemes have been
introduced. With this, we hope that we will be able to achieve
Particulars 2018-19 2019-20 % Increment
gradual improvement in cost of deposit.
Staff Expenses (NPR’ million) 1,782 2,476 39.15
NET INTEREST INCOME
Number of Staff 2,291 3,472 51.55
As a result of enhancement of business and sound management
of the Bank during the review period, Net Interest Income of Training Expenses (NPR ‘million) 64.2 43.1 32.87
the Bank increased by 65% and reached NPR 6.96 billion. The
Bank has adopted a strategy to maintain optimum credit-to- NPR 64.2 million was incurred as staff training expenses,
deposit ratio and interest spread for optimum utilization of which is 2.59% of the total staff expenses (with staff bonus)
fund in the days to come. of the review period. As per requirement of Nepal Rastra Bank,
staff training expenses should be at least 3% of total staff
NET FEES AND COMMISSION INCOME expenses of previous year, and the Bank has spent3.6% of
These are the income based on non-funded sources. The total staff expenses of the previous year in staff training.
Bank has been able to earn NPR 2.12 billion as Net Fees and
Realizing that employees are the most valuable asset, we
Commissions, which is 144% increment in comparison to
believe that staff training expenses spent for the development
that of the previous year. The Bank has achieved remarkable
of their skills and capability is investment for achieving the
growth in income from debit card, credit card, Bank assurance,
long-term strategy of the Bank.
remittance, etc.
During the review period, the Bank was able to increase DEPRECIATION AND AMORTIZATION
229,809 mobile banking, 3,087 credit card, 256,096 debit card, During the review period, depreciation and amortization
22,455 internet banking, 2,173 POS, 5,235 QR Code customers expenses of the Bank has risen by 76.19%, from NPR 115.8
which have greatly helped to achieve growth in net fees and million to NPR 204 million. Increase in depreciation and
commission income. amortization by 76.19% is due to increase in capital expenditure
Various services and facilities of the Bank have been from NPR 2.37 billion to NPR 3.26 billion by 38%.
improvised with the intent of increasing share of commission

OTHER OPERATING EXPENSES Transfer from Investment Adjustment fund - -
During the review period, Other Operating Expenses of the Transfer From Share Premium - -
Bank increased by 38.46% from NPR 1.24 billion to NPR 1.71
Total 3,967 3,180
billion. Increase in Other Operating Expenses by 38.46% is
due to increase in number of staff, additional 61 branches, and Appropriation
increase in business promotion expenses opened business. General Reserve Fund 605 267
It is expected that such expenses shall act as investment Exchange Fluctuation Fund 0.64 4
in the days to come through enhancement of business, and NIC ASIA Bond Redemption Reserve 131 71
positive result shall be seen in the coming years through
Deferred Tax Reserve (42) -
reduction of cost after simplification and naturalization of
banking procedures. Investment Adjustment Fund 12 16
Social Responsibility Fund 30 13

COST TO INCOME RATIO
Regulatory Fund 272 456
During the review period, Cost to Income Ratio decreased to
Cash Dividend 42 70
46.22% from 58.41%. Table below shows the Bank’s Cost to
Income Ratio of last two years. Bonus Share 803 1,339
Accumulated Profit 2,113 944

58.41%
46.22%
20% of Net Profit of the review period, i.e. NPR 605 million,
has been transferred to the General Reserve Fund. Likewise,
NPR 0.64 million to Exchange Fluctuation Fund, NPR 131
million to NIC ASIA Bond Redemption Reserve, NPR 30 million
to Corporate Social Responsibility Fund, NPR 11.9 million
to Investment Adjustment Fund, and NPR 272 million to
2017-18 2018-19 Regulatory Reserve.
Increase in net fees and commission resulted in changes in As per the requirement of Nepal Rastra Bank Directive 6.16, 1%
Cost to Income Ratio. Long term strategy of “VISION 18-22” of Net Profit is transferred to the Corporate Social Responsibility
focuses on decrease in Cost to Income Ratio over the period Fund. Amount of such fund shall be spent during current year
of time. for carrying out various activities in order to fulfill corporate
social responsibilities of the Bank.
PAYMENT FOR INCOME TAX AND TAX DEDUCTED AT
SOURCE Amount of Accumulated Profit after appropriation and
The bank has contributed NPR 2.51 billion towards the revenue transfers as stated above is NPR 2.11 billion.
of the country; NPR 1.41 billion in the form of income tax and
NPR 1.11 in the form of tax deducted at source.
B. ANY IMPACT CASUED TO THE BUSINESS
APPROPRIATION OF PROFIT/LOSS
OF THE COMPANY DUE TO NATIONAL AND
The bank has earned NPR 3.02 billion as Net Profit during the INTERNATIONAL CONDITION
review period. Appropriation of Profit/Loss during the review
period has been presented below; 1. GLOBAL ECONOMY
In 2018, there was 3.1% growth in the global economy.
(NPR ‘MILLION)
United State’s financial policy has largely affected the global
Review PREVIOUS
Particulars economy. For the year 2019, growth rate of 3% is expected in
Period YEAR
global economy. In the beginning of 2019, there were decline
Accumulated Profit 944 1,845
in business and manufacture due to trade dispute, financial
Net Profit of Current Year 3,023 1,335
tension, instability, and geographical tension. These factors
Transfer from Capital Reserve Fund - - have largely affected growth rate of developed countries.

Developing countries from East Asia and South Asia have C. Current Year (FY 2019-20) ) achievement until the
achieved economy growth rate of 5.8% and 5.6% respectively. date of preparation of Report from the Directors and
Countries depending upon import of crude oil and products Board of Director’s view on future activities of the
were affected due to fluctuation of currencies. Commodity company
Market crash of 2014 and 2015 is still having its effect on
No substantive event affecting the Bank has occurred during
financial and trade deficit. Trade dispute between United
the period after balance sheet date (Jul 16, 2019) till the date of
States and China, geographical tension between India and
preparation of this report.
China regarding Kashmir, BREXIT and climate change have
made negative impact in global economy. Comparison of financial results of first month of 2019-20 with
(Source: Based on analysis of World Bank and IMF)
that of first month of 2018-19:
17 July 2019 to 17 July 2018 to

Particulars % Increment
17 August 2019 16 August 2018
2. STATUS OF NATIONAL ECONOMY
Total Deposit 178.03 156.02 14
A. Gross Domestic Product and Inflation
Total Loans and
157.81 128.14 23
Central Department of Statistics has assumed the growth rate Advances
of GDP for 2018-19 at 7.1%. Increase in agriculture production,

tourism; pace of construction, industries and ease in energy We believe that bank shall achieve desired goals during current
generation have largely helped in growth of economy. Growth year as well.
rate of agriculture sector was 5%, and that of industrial and
I. Branch Expansion
service sector was at 8.2% and 7.3% respectively.
As per long term strategic plan of Bank regarding extensive
Inflation rate of the nation was 4.6% for 2018-19 which was expansion of branches, 61 new branches were opened during
4.2% for 2017-18. review period. To ensure appropriate guidelines and scientific
methodology for expansion and management of scope of work
Particulars 2017-18 2018-19
and branches of bank, Footprint Expansion and Management
Economic Growth Rate 6.7% 7.7% Policy, 2018 was formulated and brought into implementation.
Growth Rate of Agriculture Sector 2.8% 5%
Bank shall expand 20 new branches and 198 additional ATM
Growth Rate of Industrial Sector 9.6% 8.2%
during current year. Such expansion shall definitely contribute
Growth Rate of Service Sector 7.2% 7.3% towards financial inclusion strategy of government through
Average Consumer Inflation 4.2% 4.6% availability of banking services and facilities in both city and
remote areas of country.
B. Status of Financial Market
II. Service Expansion
Private sector credit, on y-o-y basis, increased by 20.6% in
mid-June 2019. The projected growth rate of such credits was As per the desire and demand of customers, the Bank has been
20%. In mid-July 2019, the weighted average interest rate of providing latest, improved, reliable, and qualitative service to
91-days Treasury bills stood at 4.97 percent and the weighted its customers. Continuous research and development have
average inter-bank rate among the commercial banks stood at been considered as an important aspect of this organization
4.52 percent. Such rates were 3.74 percent and 2.96 percent for capacity building of employees and providing improvised
respectively in mid-July 2018. In mid-June 2019, the weighted services to customers through evaluation of technological
average deposit rate and lending rate of commercial banks development, requirement of customers, and need as per
stood at 6.64 percent and 12.20 percent respectively. Such change in business. For improvement in customer service,
rates were 6.61 percent and 12.42 percent in mid-June 2018. effective monitoring is done through establishment of a
Interbank transaction among the commercial banks stood at separate Experience Enrichment Department. In line with the
Rs.1775.11 billion and among other financial institutions (except concept of Universal Banking, for the purpose of conducting
commercial banks) at Rs. 209.55 billion in 2018/19. activities related to Capital Market and Investment Banking,
(Source: Monetary Policy 2019-20, Nepal Rastra Bank)
NIC ASIA Capital Ltd., under the full ownership of the Bank,
has been established in order to extend scope of service of

LIST OF NEW BRANCHES OPENED DURING 2018/19
B A G M AT I GANDAKI
PROVINCE PROVINCE PROVINCE PROVINCE
1 2 3 4
Birtabazzar, Jhapa Gaushala, Mahottari Baluwatar, Kathmandu Bajhpatan, Pokhara, Kaski
Panchruki, Sunsari Bayalbas, Sarlahi Baniyatar, Kathmandu Powerhouse chowk, Pokhara, Kaski
Mane Bhanjyang, Sankhuwasabha Lalbandi, Sarlahi Bhotahiti, Kathmandu Budhibazar, Pokhara, Kaski
Manglung, Terhathum Garuda, Rautahat Chabhil, Kathmandu Amarsingh, Pokhara, Kaski
Falgunanda Chowk, Jhapa Fattepur, Saptari Chapagaun, Lalitpur Bagar, Pokhara, Kaski
Inaruwa, Sunsari Nijgadh, Bara Gongabu, Kathmandu Parsyang, Pokhara, Kaski
Prakshspur, Sunsari Mahendranagar, Dhanusa Kadaghari, Kathmandu
Rani mills Area, Biratnagar Fetta, Bara Koteshwor, Kathmandu
Haathkhola, Morang Pidari Chowk, Dhanusa Kuleshowr, Kathmandu
Damak Chowk, Jhapa Powerhouse, Birgunj Manthali, Ramechap
Katari, Udayapur Link Road, Birgunj Radhe Radhe, Bhaktapur
Buddha Chowk, Dharan Sankhamul, Kathmandu
Foodling, Taplejung Sinamangal, Kathmandu
Safebagar, Taplejung Sorakhutte, Kathmandu
Dhankuta Thulobharyang, Kathmandu
Roadsesh chowk, Biratnagar Sauraha, Chitwan
Chanauli, Chitwan
Baseni, Chitwan
Killagal, Kathmandu
Ramkot, Kathmandu
Bhandara, Chitwan
Syafrubasi, Rasuwa
PROVINCE KARNALI SUDURPASCHIM

PROVINCE PROVINCE
5 6 7
Belbas, Rupandehi Sri nagar, Salyan Patan, Baitadi
Devinagar, Rupandehi Dailekh Dodhara Chandi, Mahakali

the Bank. Further, services like credit card, POS machine, and V. Human Resource
KIOSK were also expanded during the review period.
The Bank has always considered its staff as an key asset of
the organization. Participation of employees in various internal
III. Plans for upcoming period
and external trainings is ensured to enhance capability of
The Bank has planned to open new branches and extension
employees, motivate them, and develop their skills and
counters in different regions in order to ensure easy access of
knowledge in line with need of dynamic environment.
banking sector to people of each and every region. In remote
areas, where it is not possible to expand branch and extension During the review period, 165 external and 147 internal
counters, banking access of customers shall be ensured trainings were attended by staff members of the Bank for skills
through expansion of branchless banking services. and capacity development. The Bank has established itself as
a platform for development of skills, knowledge, and capacity
We believe that the perception of customers towards banking
of employees, and various activities have been performed to
services will be directed towards new dimension by providing
ensure that the culture of gaining knowledge is developed
latest and modern technology oriented services.
among employees.
Footprint expansion plan for current year
We believe that human resource development not only
Particulars Planned Addition During Total number as of
supports daily activities, but assists in introduction of
Current Year Year end 2019/20
innovative thoughts and modern technologies as well. Internal
Branches 20 312
and external trainings for enhancement of knowledge and
Extension Counter 109 156
capacity of employees shall be conducted in the years to come
ATM 198 500
as well. Total number of staff of the Bank has reached 3,472
IV. Technological Development and Information till July 16, 2019, out of which, 51.44% are male and 48.56% are
Management System female.
Nepal is still far behind than other developed nation in terms of D. Industrial and Business Relation of Company
digital banking services. Our neighboring countries; China and
To expand scope of business of the Bank, the Bank has
India are way ahead in digital banking than us. To enclose this
established and maintained healthy relations with associations
gap, NIC ASIA Bank has created awareness “SOCH BADLAU”
and industrial, commercial, and other institutions that are
to promote banking facilities while upgrading Bank’s digital
concerned with the progress of the Bank. Such relationships
channel. Implementation of such awareness program helps
shall be continued in the future, as well.
in digital banking, cashless economy and easily accessible
banking.
The Bank has been maintaining healthy relations with the
following organizations:
By embedding technologies into life style banking experience,
the bank wants to touch every dimension of customer life.
• Nepal India Chamber of Commerce
We have planned to automate all banking transactions and • Forum of Nepalese Bankers
ensure a paperless office environment. The Bank is always • Foreign Exchange and Money Dealers Association
cautious towards security of information source and data
• Nepal Bankers’ Association
system. The Bank has implemented an IT policy that ensures
that matters like Data Centre Operation, Hardware, Network • Banking Promotion Committee
Security, and Computer System are under regular monitoring • Nepal Foreign Trade Association
of Internal Audit. Similarly, through regular audit of Information
• Nepal Institute of Company Secretaries
System, information management and security of the Bank
have been strengthened. • International Chamber of Commerce Nepal
• World Bank
Finacle Core Banking Software has been upgraded to 10.0.18
• International Finance Corporation
version from 7.0.10 version and brought into implementation
in order to ensure that the information system of the Bank is • Asian Development Bank
enhanced with latest and ultramodern technology. • Federation of Nepalese Chambers of Commerce and
Industry

E. Change in the Board of Directors and the Reasons and areas.
Thereof
There is no alteration in Board of Directors during review
period. G. Opinion of Board in Case of any Qualification in
Auditor’s Report
Board of Directors structure
Unqualified opinion was issued by auditor in audit report.
Name of Director Details
H. Amount recommended for distribution of dividend
Mr. Tulsi Ram Agrawal Chairman
Mr. Jagdish Prasad Agrawal Director The 418th meeting of the Board of Directors, dated September
28, 2019, proposed NPR 1,859,837,621 (NPR one billion eight
Mr. Trilok Chand Agrawal* Director
hundred and fifty-nine million eight hundred thirty seven
Mr. Ram Chandra Sanghai Director
thousand six hundred twenty-one) which is equal to 21.0526%
Mr. Rajendra Prasad Aryal Director of the paid-up capital (10% share and 11.0526% cash including
Mr. Binod Kumar Pyakurel Director for tax purpose) as dividend.
Mr. Ganesh Man Shrestha Independent Director

I. Details of shares forfeited
*Representative: Asian Distributors Pvt. Ltd
Bank has not forfeited any share till date.
Meeting of Board of Directors

J. Review of the progress made by the Company and its
Meeting of the Board is held on a regular basis as per the subsidiary(s) in the current fiscal year 2018/19 and the
requirement of prevailing act and regulation of the Bank. The position of the same at the end of fiscal year
Chief Executive Officer of the Bank is a permanent member at
Progress report of the company and its subsidiaries has been
meetings of the Board.
disclosed separately in the annual report.
During the review period, meetings of the Board were held
K. Main activities carried out by the Company and
54 times. Details of attendance of Directors in meetings and
its subsidiary(s) during the financial year and any
allowance received by them are as follows:
significant changes in the business activities of the
No. of meetings Meeting
Company and its subsidiary during the same period
Name of Director
attended Allowance (NPR)
The bank has carried out normal banking activities and the
Mr. Tulsi Ram Agrawal, Chairman 54 844,000
subsidiaries also carried out the normal activities as per its
Mr. Jagdish Prasad Agrawal, Director 51 660,000
business nature. No such significant changes during the same
Mr. Trilok Chand Agrawal, Director 53 684,000 period.
Mr. Ram Chandra Sanghai, Director 41 504,000
L. Any information given to the Company by its principal
Mr. Rajendra Prasad Aryal, Director 44 556,000
shareholder (who holds 1% or more shares of the
Mr. Binod Kumar Pyakurel, Director 52 672,000
Company) in last fiscal year
Mr. Ganesh Man Shrestha, Director 50 696,000
No such information provided by the principal shareholders in
F. Main factors that affect business activities last fiscal year.
Overall financial condition, liquidity, limited investment M. Details of shares held by the directors and officials of
opportunities, and interest spread management will remain the Company and information received by the Company
as challenges during the current year, as well. Additional on their involvement in trading of shares in last fiscal
challenges have evolved due to increasing competition and year.
shortage of skilled manpower.
Details of Directors and Officials shareholding in the Bank.
Considering these challenges and opportunities, the Bank’s
strategy is oriented towards enhancement of quality and
expansion of scope of banking services, providing innovative
services, and expansion of banking services in new markets

Shareholders' No./Demat
Position Name of Director No. of Shares Remarks
No.
1,202,890 Promotors Share

Chairman 1301370000693141 Tulsi Ram Agrawal
372,975 Ordinary Share

1301370000695662 Jagdish Prasad Agrawal
Director 499,090 Ordinary Share
19774 1 Ordinary Share
1301060000076172 2,840,123 Promotors Share

Director Ram Chandra Sanghai
1301060000002377 1,058,083 Ordinary Share

Director 1301370000102204 Trilok Chand Agrawal

Director 1301290000014282 Rajendra Prasad Aryal
55,688 Promotors Share
1301290000000940 439 Ordinary Share
Director 104993 Binod Kumar Pyakurel 25 Ordinary Share
1301290000023597 254 Ordinary Share

Independent Director Ganesh Man Shrestha
1301370000136151 2,297 Ordinary Share

Chief Executive Officer Roshan Kumar Neupane
1301420000034146 2,097 Ordinary Share
Deputy Chief Executive Officer 1301370000136301 Sudhir Nath Pandey 8,216 Ordinary Share
1301370000103630 4,701 Ordinary Share

Assistant Chief Executive Officer Santosh Kumar Rathi
1301370000020174 4,794 Ordinary Share

Assistant Chief Executive Officer Jayendra Rawal
Assistant Chief Executive Officer 1301330000002129 Rajesh Rawal 3,685 Ordinary Share
Dipendra Bahadur
Chief Risk Officer 107636 1 Ordinary Share
Rajbhandari
Chief Technology Officer 1301390000002138 Bapin Rajbhandari 17 Ordinary Share
1301370000265853 5,390 Ordinary Share

Heal Legal Dinesh Bhari
Company Secretary 1301370000175421 Deepen Karki 2,023 Ordinary Share
Sold in FY 2018-19
Chief Technology Officer 1301390000002138 Bapin Rajbhandari 100 Ordinary Share

N. Information provided on personal interest of Board that are inherent in the Bank and that may arise in the future
of Directors and their relatives (nearest kin) regarding by fulfilling the responsibilities of this committee as defined
contract or agreement done with the Company in last by the Unified Directive of Nepal Rastra Bank, and to present
fiscal year. the reports to the Board of Directors, as well as to provide the
necessary recommendations to the management of the Bank.
No such information received by the bank in last fiscal year.
Details regarding the Composition, terms and reference, major
O. Buyback of share by the Company, reason thereof for activities and decisions of this committee are given in separate
buyback, number of shares bought back, face value of section under 3.6 “Risk Management Committee”
share and amount paid during the buyback
2. Karmachari Sewa Suvidha Samiti
The Bank has not bought back any share till date.
Banking business is a calculated risk-taking business in
addition to a service-oriented business. Therefore, skilled and
P. Information on existence of Internal control system
professional manpower is required for proper management
and if there is, its detail
of risk and to provide excellent services. As skilled employee
The responsibility to review internal control system of the is a strong foundation of a bank, review and adjustment of
Bank and its effectiveness lies with the Board of Directors. management and management principles should be done
For this purpose, various committees have been formed under on a regular basis in order to attract quality manpower and
the Board of Directors and its authority has been delegated by to make manpower management more effective, as well as
forming necessary committees for completion of operation in for efficient operation of the banking business. The main
special areas and formation of smooth and effective strategy objective of the Karmachari Sewa Suvidha Samiti, which is a
and its implementation. The audit committee reviews audit board-level committee, is to prepare policies and mechanisms
reports of internal auditor, external auditor, and supervisory related to manpower management of the Bank and to submit
inspector, and provides its independent suggestion to the it to the Board of Directors, and to submit information related
Board of Directors about the effectiveness of the internal to the decisions made and the actions taken to the Board on
control system of the Bank. a periodic basis. Details regarding the Composition, terms and
reference, major activities and decisions of this committee are
The Bank’s overall area of operations is divided into three
given in separate section 3.7 “Karmachari Sewa Suvidha Samiti”.
parts- Business, Operation Assistance, and Control in order
to manage the risks properly and smoothen operation of the 3. Audit Committee
bank.
Details are provided in the Point no. (r) of this report.
The Integrated Risk Management Department of the Bank is
4. Sampati Sudhikaran Niwaran Samiti
being empowered so as to make the internal control system
of the Bank more robust. This department operates as an The main objective of the Sampati Sudhikaran Niwaran
independent unit, rather than being under the management Samiti, which is a Boardlevel committee, is to review the
of the Bank, and the department is accountable to the Risk policies, rules, and guidelines followed by the Bank for the
Management Committee of the Bank. prevention of money laundering and periodic review of the
system developed by the Bank to identify and control the
Similarly, Internal Audit Department of the Bank performs risk related to money laundering, financing of terrorism, and
audit of the areas of operations of the Bank and compliance corruption. This committee can provide suggestions to the
with policies and procedures prepared and implemented by management for the implementation of policies of the Bank,
the Bank. This department carries out necessary actions as standards fixed by the regulatory body, and laws relating to
an independent unit and presents its reports to the Audit money laundering, financing of terrorism, and corruption. This
Committee committee presents the reports on decisions made by the
committee and activities undertaken as per the decisions of
Following committees are functional in the Bank during the
the committee to the Board of Directors on a periodic basis.
review period:
Details regarding the Composition, terms and reference, major
activities and decisions of this committee are given in separate
1. Risk Management Committee
section 3.8 “Sampati Sudhikaran Niwaran Samiti".
The main objective of this committee is to identify, monitor,
and manage the various risks (credit, market, operational, etc.)

5. Land Acquisition and Construction Sub-committee Summary of major activities undertaken by the committee
during the review period is stated below:
The 392nd Board Meeting dated 22nd February 2019, had
constituted a subcommittee to acquire land and build
Feasibility study in Surkhet and Bagbazzar for acquisition
necessary banking infrastructure required for its business
of land
growth.
Reviewed the progress of building construction in Kamladi
Composition of members of the Land Acquisition and and Birgunj Branch.
Construction Sub-Committee is as follows:
Total of 4 meetings of this committee were held during FY
Status in the Status in the 2018/19 and details of meetings attended and allowance
SN Name
Organization Committee received by the directors are as follows:
1 Mr. Trilok Chand Agrawal Director Coordinator
2 Mr. Ram Chandra Sanghai Director Member No. of meetings Meeting Allowance
Members
attended (NPR)
Mr. Trilok Chand Agrawal 4 64,000
4 Mr. Roshan Kumar Neupane Chief Executive Officer Member
Mr. Ram Chandra Sanghai 4 64,000
Chief Experience
5 Mr. Bishal Sigdel Member
Transformation Officer Mr. Binod Kumar Pyakurel 3 48,000
Chief Human Resource
6 Mr. Kapil Dhkala & Chief Development Member Q. Statement of total administration expenses of last
Officer
fiscal year
Head-General
7 Mr. Kailash Gautam Administration and Member For the fiscal year 2018-19, total administration expenses was
Project
NPR 4.52 billion with staff expenses of NPR 2.48 billion and
Deputy Chief Executive Member
8 Mr. Sudhir Nath Pandey office operation expenses of NPR 2.04 billion.
Offier Secretary
Terms of references of the committee are as follows: R. Name list of members in the audit committee,
remuneration, allowance and benefits they have
In accordance with the direction by Nepal Rastra Bank, received, the details of activities of the committee and
8/075, the committee shall primarily focus on ready to the details of any recommendation by them
acquire lands and buildings as the acquired land and
The Board of Directors has constituted the Audit Committee
building should be put to Bank’s use within 3 years of
under non-executive director in compliance with the
acquirement
regulatory provisions of NRB Unified Directives and the
To publish bid notice and take necessary actions provisions of Bank and Financial Institutions Act and Company
To determine whether the Bank’s Head office extension, Act. Head of Internal Audit Department is Member Secretary of
Province Office, Sub-province office or branches need the committee. Details regarding the Composition, terms and
their own building. If needed, make a feasibility report and reference, major activities and decisions of this committee are
present to the Board. given in separate section 3.5 “Audit Committee”
To determine whether the Bank should acquire land and
S. Dues payable to the company by any director, MD,
construct the building or make purchase/acquisition, the
CEO, principal shareholders (holding share more than
report shall be presented to the Board.
1%) or their relatives or firms or institutions in which
To review building’s drawing, design and layout and make they have their involvement (interest)
necessary recommendations to the Board of Directors.
Information relating to this is disclosed in the notes to account
To negotiate with Construction Company regarding of the financial statement.
structural engineering, building materials and cost. The
final agreement shall be presented to the Board. T. Remuneration, allowances and benefits paid to the
To prepare a location wise report regarding whether the director, MD, CEO and officials
organization should acquire or rent/lease its office space Information relating to this is disclosed in the respective places
and present to the Board. of this report and notes to account of the financial statement
To convene the meeting of the committee at least once in
a month and the committee shall expire in a year.

U. Uncollected dividend by the shareholders benefit of shareholders and other stakeholders.
Out of cash dividend declared by the Bank for the fiscal year The Bank has formulated and implemented a Corporate
2010/11, 2011/12, 2012/13, and 2013/14, NPR 90,597,534 remains Governance Policy to make corporate governance of the Bank
uncollected till the end of the review period. smoother and stronger. The main objectives of the policy are
as follows:
The Bank has published notice from time to time in national
level newspaper requesting shareholders to collect uncollected To apply high corporate governance at all the levels,
dividend, and details of dividend uncollected for more than five structures, and activities of the Bank.
years have also been uploaded on the website of the Bank
(www.nicasiabank. com). To perform all the activities of the Bank as per the internal
and external policies.
V. Information on asset bought or sold as per section
141 To formulate effective policy, procedures, and guidelines
required for achieving goals and objectives of the Bank and
The bank has not bought or sold any assets as per section 141
to implement and monitor the same.
of the companies’ act, 2006 during the last fiscal year.
3. Corporate Social Responsibility
W. Details of related party transaction as per Section
175 (transactions between associated companies) As the Bank is a responsible corporate citizen also, the Bank has
been playing an active role for social benefit and development
Information relating to this is disclosed in the notes to account
in various areas of society. The Bank has allocated 1% of the
of the financial statement.
net profit of the review period for activities related to corporate
X. Any other details to be disclosed in the report from social responsibility as per Clause 6.16 of the Unified Directive
the Directions in accordance with Companies Act, 2006 of Nepal Rastra Bank. The Bank has allocated 1% of the net
or other prevailing laws profit of review period, NPR 30.2 million to the corporate social
responsibility reserve. Last year, the amount was NPR 13.3
1. External Auditor million. Out of which, expenses of NPR 11.8 million has been
Audit of this Bank for FY 2018/19 was successfully completed incurred from the reserve fund and amount remaining in the
by the external auditor of the Bank, M/s. TR Upadhya & Co. fund is NPR 43 million.
Further, as the present auditor is not eligible for reappointment
4. Customer Identification (KYC) and Assets Laundering
for FY 2018/19 as per section 111 of the Companies Act, 2006,
(AML and CFT)
appointment of the auditor and his remuneration as per the
recommendation of the Audit Committee has been proposed The Bank is effectively complying with Prevention of Money
for approval in this general meeting. Laundering Act rules and regulations and directives related to
the prevention of money laundering issued by Nepal Rastra
2. Corporate Governance Bank. The Bank has formulated and implemented an effective
The Bank regards corporate governance as a priority, not policy, rules, and guidelines to control and prevent money
only for compliance with statutory bodies and laws, but also laundering.
for genuine business practice and necessary transparency.
With the objective of keeping employees of the Bank updated
As per the corporate governance structure of the Bank,
on the subject of KYC and money laundering, the Bank has
the Board of Directors and the Board-level committees are
been continuously conducting trainings related to these
operational to make the work execution of the Bank smoother,
subjects. Apart from that, the Bank has made arrangements
effective, independent, and transparent, and ensure that daily
for all the employees to mandatorily participate in annual Skill
managerial activities function without the interference of the
Assessment Test in these subjects, and the same has been
Board of Directors.
effectively implemented. As a result of overall effort in the
The three integral parts of corporate governance— integrity, area of KYC and prevention of money laundering, level of this
transparency, and fairness—have always been assimilated Bank in the area of KYC and money laundering is in the top
by the Bank. The Bank considers corporate governance as rank among the Nepalese banking industry.
an integral part of the policies and rules in order to enhance
the quality of services provided to the customer and for the

5. Relationship with Shareholders and arrangement to Our companions, our customers, and our well wishers have
provide information to Shareholders always been with us at every achievement, and on behalf
of the Board of Directors, I would like to extend my sincere
We want to inform that there are a total of 117,282 shareholders
gratitude for your unwavering assistance.
of this Bank till the end of fiscal year 2018/19. The Bank
has provided high priority to the activities of exchanging
I want to extend gratitude to Nepal Rastra Bank, Securities
information with the shareholders. The Bank obtains
Board of Nepal, Nepal Stock Exchange, Office of Company
directions and guidelines through direct conversation with
Registrar, Ministry of Finance, Government of Nepal, and other
the shareholders in the general meetings. The Bank provides
regulatory bodies who continuously provide guidance and
annual reports, quarterly reports, press releases, and other
assistance to this Board of Directors. Further, appreciating the
information through various communication media, as well as
effort and hard work of all the employees of the Bank, who
through its website (www.nicasiabank.com).
provide their important contribution in every progress and
achievement of the Bank, the Board of Directors of the Bank
6. Thank You
expects similar assistance and cooperation from you in the
Our shareholders are our companions through each and every upcoming period.
journey of this Bank. Today, the Bank is in a capable and strong
position because of our shareholders’ direct and indirect Thank You,
cooperation, important suggestions, recommendations, On behalf of the Board of Directors
decisions, and guidelines for the progress and prosperity of the
Bank. The Board of Directors of the Bank always appreciates Tulsi Ram Agrawal,
the faith and confidence placed upon us by our shareholders. Chairman
DISCLOSURE OF INFORMATION UNDER SECTION 4. Legal Proceedings

109(4) OF COMPANIES ACT 2006
a. During the last fiscal year, no lawsuits were filed, apart
Disclosed under the respective parts/heads of the director’s from the lawsuits related to the normal course of banking
report. business filed by and against the Bank.
DISCLOSURE RELATED TO SUB RULE (2) OF RULE b. The Bank has no knowledge related to any lawsuit filed by
22 OF SECURITIES REGISTRATION AND ISSUANCE or against the promoters or directors of the Bank involving
REGULATION, 2073 (ANNEXURE-14) statutory regulations or criminal offence.
1. Report of the Board of Directors c. The Bank has no knowledge related to any lawsuit filed
Above presented director’s report was the report of the Board against the promoter or director of the Bank for committing
of Directors. economic crimes.
2. Auditor’s Report 5. Analysis of Stock Transactions and Performance of

the body corporate
Disclosed in the respective parts/heads of this report.
a. Management’s view on the share transactions of body
3. Audited Financial Statement corporate: The management’s view is neutral in this
respect, as the Bank’s share price is guided by the capital
Presented under Statement of Financial Position, Statement
market operations.
of Profit or Loss, Statement of Other Comprehensive Income,
Statement of Cash Flow Statement, Statement of Changes in
b. High, low, and closing price of the stocks of the company
Equity and respective notes.
during each quarter of the preceding year along with the
total volume of trading of shares and number of days
traded:

First Quarter Second Quarter
(mid October 2018) (mid January 2019)
Maximum price per share NPR 447 Maximum price per share NPR 450
Minimum price per share NPR 304 Minimum price per share NPR 357
Closing price per share NPR 441 Closing price per share NPR 386
Total shares traded 7,116 Total shares traded 4,634
Total days traded 62 Total days traded 60
Third Quarter Fourth Quarter

(mid April 2019) (mid July 2019)
Maximum price per share NPR 469

Minimum price per share NPR 441
Minimum price per share NPR 370
Closing price per share NPR 448
Closing price per share NPR 469
Total shares traded 10,727
Total shares traded 11,750
Total days traded 64
Total days traded 60
6. Problem and Challenges • Lack of coordination between the interest rate and
inflation.
a. Internal problem and challenges
• Challenges of financial management and market risk
• Lack of skilled manpower due to increasing competition, arising from the increasing liquidity and strategic dilemma.
and challenges to retain the present manpower of the
• Tough competition and unhealthy competitive behavior
Bank.
resulting from the same.
• To develop and motivate skilled manpower.
• Limited investment opportunities
• Increasing operation cost.
7. Corporate Governance
b. External problem and challenges
Disclosed in the respective parts/heads of directors’ report.
• Unfavorable interest rate and liquidity situation and
emergency fluctuations of the same.
8. If there is a deviation of 20% or more between the details as per the audited financial statements and those
forecasted in the prospectus, details of such deviation
BALANCE SHEET AS ON YEAR ENDED 2018-19
Amount in NPR ‘000
As per Audited As per Forecasted Variance
Remarks
Financial Statement Financial Statement (%)
Assets
Cash and cash equivalent 20,214,540 7,854,678 157%
Due from Nepal Rastra Bank 16,097,915 14,000,000 15%
Placement with Bank and Financial
383,950 345,322 11%
Institutions
Derivative financial instruments. 7,006,011 1,519,221 361% High investment in Forward contract than forecasted
Other trading assets 7,440 -

As per Audited As per Forecasted Variance

Remarks
Financial Statement Financial Statement (%)
Loan and advances to B/FIs 6,923,285 5,123,960 35% High investment in Forward contract than forecasted
Loans and advances to customers 142,574,006 148,600,091 (4%)
Investment securities 18,152,959 19,300,969 (6%)
Current tax assets - -

Investment in right share of NIC ASIA Laghubitta Bittiya
Investment in subsidiaries 1,204,500 690,000 75%
Sanstha
Investment in associates - -
Investment property 275,939 74,383 271% Increase in non banking assets
Property and equipment 2,583,720 2,337,492 11%
Goodwill and Intangible assets 110,490 54,815 102% Upgrade of assets
Deferred tax assets - -
Other assets 2,162,294 14,232,379 (85%) Reclassification with other liabilities
Total Assets 217,697,049 214,133,409
Liabilities
Due to Bank and Financial Institutions 8,535,646 12,792,458 (33%) Decrease in interbank credit
Due to Nepal Rastra Bank 314,541 731,000 (57%) Decrease in loan renew
Derivative financial instruments 6,913,409 2,066,176 235% High investment in Forward contract than forecasted
Deposits from customers 176,820,689 167,909,695 5%
Borrowing - -
Current Tax Liabilities 242,945 - Reclassification with other assets
Provisions - -
Deferred tax liabilities 178,273 - Reclassification with other assets
Other liabilities 2,045,713 8,709,781 (77%) Reclassification with other assets
Debt securities issued 7,710,097 7,707,749
Total Liabilities 202,761,314 199,916,859
Equity
Share capital 8,834,229 8,834,225
Share premium - -
Amount transferred to regulatory reserve lower than
Retained earnings 2,112,881 1,454,349 45%
forecasted
Reserves 3,988,626 3,927,976 2%
Total Equity 14,935,736 14,216,550
Total Liabilities and Equity 217,697,049 214,133,409

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 2018-19
Amount in NPR ‘000
As per Audited As per Forecasted

Variance (%) Remarks
Financial Statement Financial Statement
Interest income 19,345,594 19,612,126 (1%)
Interest expense 12,385,561 12,794,360 (3%)
Net Interest Income 6,960,033 6,817,766
Fees and commission income 2,248,906 2,622,798 (14%)

Reclassification of net fees and commission
Fees and commission expense 127,599 238,436 (46%)
income
Net Fees and Commission Income 2,121,307 2,387,362
Net Interest, Fees and Commission
9,081,340 9,202,128
Income
Reclassification of fees and commission
Net trading income 348,921 229,195 52%
income
Other operating income 75,974 84,755 (10%)
Total Operating Income 9,506,235 9,516,080

Impairment charge/(reversal) for loans
598,918 557,312 7%
and other losses
Net operating income 8,907,317 8,958,768
Operating expense
Personnel expenses 2,476,831 2,561,617 (3%)
Other operating expense 1,712,836 2,057,203 (17%)
Depreciation & Amorti-zation 204,033 144,357 41% Depreciation in assets acquired
Operating Profit 4,513,617 4,195,591
Non operating income 31,305 64,000 (51%) Reclassification of non operating income
Non operating expense 104,165 - 100% Reclassification of non operating expense
Profit before income tax 4,440,756 4,259,591
Income tax expense
Current Tax 1,368,656 1,258,677 9%
Deferred Tax 48,817
Profit for the period 3,023,283 3,000,914
9. Details on special events and circumstances as d. Resignation from Senior Level Management
specified in sub rule (5) of Rule 22 Name: Sudip Khanal
Position: Assistant Chief Executive Officer
1) Amendments in the regulations of body corporate
Date of release: 07/06/2019
• No amendments
e. New appointment in the Senior Level Management
2) Changes of Board of Directors or High Level Managerial Name: Rupesh Luitel
officials of the body corporate Position: Chief Financial Officer
Date of appointment: 14/07/2019
a. Expiry of Tenure of Directors
• Tenure of elected directors of the bank has not f. Declaration of Dividend or Change in Capital
expired. Structure
b. Resignation from the Board of Directors For FY 2017/18, 10% bonus share was distributed from the
• No resignation 21st general meeting held on 19/12/2018. After distribution of
bonus shares, paid-up capital of the company has reached
c. New Appointment in the Board of Directors
NPR 8,834,228,698.
• No new appointment

3.6 AUDIT COMMITTEE

The Board of Directors constituted the Audit Committee committee is to enhance and maintain the internal auditors’
under a non-executive director. It is an independent body to independence in order to enable them to achieve their duties.
monitor and review the internal control practices of the Bank The internal auditors provide the committee with the necessary
through Internal Audit Department. The Head of Internal information to which they have direct access, in order to enable
Audit Department is Member Secretary of the committee. the Audit Committee, accomplish its oversight and monitoring
The committee reviews the Bank’s financial performance, its mission. On the other hand, the Audit Committee supports
internal controls, audit plan/program, and issues necessary the position of the internal audit function and submits
instructions to the management after detailed discussion management’s irregularities and other relevant managerial and
on the findings of the internal audit reports. The external as financial issues to the Board of Directors after discussing such
well as internal auditors have free access to this committee. issues with the internal auditors and other relevant parties.
The CEO can be included as an invitee of meetings of the
committee as necessary. Other employees of the Bank are The internal audit of all the branches and departments are
also called as invitees from time to time as required by agenda carried out at least once in a year. The audit report is issued to
under discussion. the branches/ departments and their responses are recorded.
The audit issues and responses are discussed in the Audit
The issues of corporate governance are under the primary Committee meeting, and audit grade is assigned to every
jurisdiction of the committee and it constantly reviews the branch/department. Every subsequent internal audit monitors
status of corporate governance and periodically reports to the whether preventive and corrective actions have been applied
Board on the status of corporate governance and the ways for in the issues identified in previous audit reports. The Audit
further strengthening it. The Audit Committee plays a major Committee also calls senior bank managers to discuss the audit
role in corporate governance regarding the organization’s issues, and reports the major findings to the Board of Directors.
direction, control, and accountability. As a representative
of the Board of Directors and focal point of the corporate Composition of members of the Audit Committee is as follows:
governance mechanism, the committee is involved in both of
From July 17, 2018 to July 16 2019
the organization’s internal and external audits, internal control,
accounting and financial reporting, regulatory compliance, Status in the Status in the
S.N Name
and risk management. The committee is responsible for Organization Committee
overseeing the organization’s disclosure process, ensuring 1 Mr. Ganesh Man Shrestha Independent Director Coordinator
that the organization complies with the relevant local and 2 Mr. Trilok Chand Agrawal Director Member
international laws, implement regulations, ethical standards Head-Internal Audit Member
3 Mr. Raju Prasad Adhikari
Department Secretary
and principles, and comply with the organization’s bylaws
and internal guidelines. The committee provides the Board of
In line with provisions of Banks and Financial Institutions Act,
Directors with necessary advice and recommendations, which
2073, and unified NRB Directive No. 6, following duties and
includes ensuring: that the respective organization complies
responsibilities are assigned to the Audit Committee of the
with relevant regulations, ethical principles and standards; that
Bank:
the internal auditors are independent and competent; and that
the financial statements have been prepared correctly and Review and approve audit plan prepared by the Internal
accurately. Audit Department, scope of audit, human resource
requirements, and budget of the internal audit functions.
The scope of the internal audit functions is determined by
the Audit Committee. One of the main responsibilities of the Review and discuss audit reports presented by Internal

Audit Department and provide necessary instructions to To review overall financial situation of the Bank.
the management to take corrective actions.
To review the observations raised in the internal audit
Ensure and facilitate the Risk Based Internal Audit of the report and external audit report and provide necessary
Bank. directions to the management relating to the actions to be
Approve Risk-Based Internal Audit guidelines and manuals undertaken regarding the same.
prepared by Internal Audit Department and monitor the To review adherence to the regularity, economy,
effectiveness of the Risk Based Internal Audit approach justification, and effectiveness in operation of the company
adopted by the Internal Audit Department. and provide the necessary recommendations to the Board.
Supervise activities conducted by the Internal Audit To review the status of implementation of the remarks
Department and provide necessary guideline to regulate raised in the inspection and supervision report of Nepal
the functions of the department so as to enable it to Rastra Bank and provide information relating to the same
achieve its objectives. It shall include review of the Audit to the Board of Directors.
Policy and other related guidelines as and when required.
To undertake other actions required by NRB directives,
Ensure that the Internal Audit Department is able to Bank and Financial Institutions Act, and Company Act.
discharge its responsibilities in an independent manner,
and that internal audit functions have sufficient standing
and authority within the Bank so as to enable them to Summary of major activities undertaken by the
function with objectivity; committee during the review period is stated
below:
Regular assessment of the quality of internal audit
functions of the Bank to ensure that they are conducted Approved risk-based annual internal audit plan of
with the highest degree of professionalism and ethics, and the Internal Audit Department and its continuous
in line with relevant auditing standards, and are capable of inspection and supervision.
providing accurate and adequate assurance regarding the
governance system of the Bank. Submitted the audit report by getting the regular audit
done for various branches and departments of the
Carry out appraisal of Head-Internal Audit Department and
Bank as per the annual audit plan. Also reviewed the
review Annual Performance Appraisal (APR) of the staff
internal audit report of 450 branches and extension
working in the Internal Audit Department conducted by
counters, 52 departments, and 3 regional offices, and
Head-Internal Audit Department.
provided direction to the management to improve,
Make recommendation for the promotion of Head Internal resolve, and implement the remarks raised in the
Audit Department and approve the promotion of other audit report during FY 2018/19.
staff working in the Internal Audit Department upon
Submitted the audit report by getting the special
recommendation of Head-Internal Audit Department.
audit done for important areas of the Bank like
Assign tasks to the Internal Audit Department as deemed income, expenses, loan write off, margin lending,
necessary by the committee. policy implementation, performance of ATM, POS,
workstation, KYC, etc. as per the annual audit plan.
The main goals of the Audit Committee are as follows:
Also audit of NIC ASIA Microfinance and NIC ASIA
Capital Limited was done and audit report was
To approve the overall operation mechanism relating to
submitted.
internal audit.
Detailed review of financial statement and provided
To discuss on internal audit system, audit results, risk
the necessary direction to the management.
management of the Bank, and corporate governance, and
provide necessary directions to the management. Performed detailed review of the external audit report
and inspection and supervision report of Nepal Rastra
To review the compliance with provisions of guidelines/
Bank and provided the necessary direction to the
directives issued by Nepal Rastra Bank and prevailing laws
management to improve, resolve, and implement the
and regulations and provide necessary directions to the
remarks raised in the audit report.
management.

Major areas of discussion in Audit Committee and its decisions Deliberation on observations, directions, and
during FY 2018/19 are as follows: recommendations made by Nepal Rastra Bank during their
inspections, and issuance of necessary instructions to
Approval of Risk Based Annual Audit plan, tactical plan, and management for effective resolution and implementation,
staffing of Internal Audit Department. together with deliberation on the follow up status.
Deliberation on Internal Audit Report of branches and Deliberation on quarterly financial statements of the
departments (450 branches and extension counters, Bank and approval for publishing the same provided with
52 departments, and 3 regional offices) with issuance recommendation for necessary changes.
of necessary directions and recommendations to
management in the areas needing improvement for further Recommendation for appointment of external auditor
strengthening the internal control, risk management made to Annual General Meeting.
system, and governance, among others.
Deliberation on special areas audit reports, such as 2018/19, and details of meetings attended and allowance
revenue, expense, loan write off, loan against shares, policy received by the directors are as follows:
implementation, performance of ATM, POS, workstation,
KYC, NIC ASIA Microfinance, NIC ASIA Capital Limited etc. No. of meetings Meeting
Members
attended Allowance (NPR)
(34 audit reports) and forwarding the same to the attention
of Board of Directors. Mr. Ganesh Man Shrestha 29 412,000
Provided feedback to the Board of Directors through Mr. Trilok Chand Agrawal 28 396,000
Audit Committee meeting minutes at subsequent Board

meetings for necessary review.
Review of external auditor’s report and issuance of

necessary instructions to management for effective
resolutions of the issues raised.

3.7 RISK MANAGEMENT COMMITTEE
The Risk Management Committee is an independent committee From January 22, 2019 to May 31, 2019
of the Board of Directors that has, as its sole and exclusive
Status in the Status in the
function, responsibility for the risk management policies of the S.N Name
Organization Committee
Bank and oversight of implementation of risk management 1 Mr. Binod Kumar Pyakurel Director Coordinator
framework of Bank. Risk Management Committee, under the 2 Mr. Rajendra Prasad Aryal Director Member
coordination of a non-executive director, is formed by the 3 Mr. Ganesh Man Shrestha Independent Director Member
Board. The committee assists the Board of Directors in fulfilling
4 Chief Human Resource & Chief Development Officer Member
its oversight responsibilities with regard to risk appetite that
the Bank is able and willing to assume in its exposures and Mr. Dipendra Bahadur Member
5 Chief Risk Officer
Rajbhandari Secretary
business activities, risk management, compliance framework,
and governance structure that supports it. From June 1, 2019 to June 12, 2019
The committee constantly monitors the nature and level S.N Name
of risk being taken by the Bank and how the risk relates
to adequate capital levels. It periodically reviews the risk
management process to ensure its integrity, accuracy, and
3 Mr. Ganesh Man Shrestha Independent Director Member
reasonableness. It also reviews whether the internal control
AECO Support Service
and risk management system is adequate or not to ensure 4 Mr. Sudip Khanal
Ecosystem
Member
well-ordered and prudent conduct of business. Terms of Mr. Dipendra Bahadur Member
Reference (TOR) of the committee are as specified in the Rajbhandari Secretary
Unified Directives issued by Nepal Rastra Bank and Risk
Management Policy of the Bank. As the corporate governance From June 13, 2019 to July 16, 2019
issues are simultaneously risk issues too, the committee also Status
deals with the issues of corporate governance, having due S.N Name Status in the Organization in the
Committee
regard of their implication on the overall risk profile of the
Bank, and offers pertinent suggestions to the Board and the
senior management of the Bank to strengthen the system of
3 Mr. Ganesh Man Shrestha Independent Director Member
corporate governance and risk management
AECO Performane
4 Mr. Kapil Dhakal Assurance Ecosystem/ Member
Composition of members of the Risk Management Committee Support Service Ecosystem*
is as follows: Mr. Dipendra Bahadur Member
Till January 21, 2019
* Then title are being used
SN Name
Organization Committee The main responsibility of this committee is to review the
1 Mr. Binod Kumar Pyakurel Director Coordinator overall risk management structure and review and monitor the
2 Mr. Ganesh Man Shrestha Independent Director Member effectiveness of the risk management system. This committee
3 Mr. Kapil Dhakal Chief Development Officer Member has been fulfilling the leading role in identification and
4
Mr. Dipendra Bahadur
Chief Risk Officer
Member mitigation of various risks that may arise during the operation
of the Bank. Terms of references of the committee are as
follows:

To identify and monitor the risks associated with the Bank To suggest to the Board of Directors for development and
and risk management, and present the report to the Board implementation of necessary policies and mechanisms as
of Directors, along with recommendations. per the guidelines/directives issued by Nepal Rastra Bank,
To prepare and monitor procedures related to the business, and necessary internal guidelines for risk management of
operation, and risk appetite of the Bank, and prepare a the Bank.
strategy for mitigation of risks and present it to the Board To submit report relating to its work completion and
of Directors for approval. procedure to the Board of Directors.
To collect reports on risk management related to various
areas of operation of the Bank through management
Major areas of discussion in Risk Management Committee
committee, and present it to the Board of Directors, along
and its decisions during FY 2017/18 are as follows:
with necessary recommendations.
Review of ALCO updates
To analyze and review capital adequacy as per the risk
Feasibility study reports for opening new branches
assets (Internal Capital Adequacy Assessment Plan
(ICAAP), appropriateness of policies as per the business New and amendment in policies, guidelines, frameworks,
strategy, and maximum level of risk the Bank may assume, and product paper guidelines
and submit necessary recommendations and opinions to Follow up/ status update on the observations of special
the Board. audit performed by Internal Audit
Audit observations of regular and special audits
Security Risk Assessment Report, Credit Risk Assessment
Report, Operational Risk Assessment Report, and Market
Summary of major activities undertaken by & Liquidity Risk Assessment Report
the committee for risk management during the Business segment wise portfolio review reports
review period is stated below:
Quarterly reconciliation report
The committee reviewed and effectively implemented Liquidity Risk Management Report and Market Risk
40 Policies, 13 Product paper guidelines and 6 Management Report
Procedural guidelines. Stress Testing and Reverse Stress Testing Report
Determined the risk tolerance and appetite limit in
Sector wise industry profile
policies relating to business of the Bank.
Report on IT System Infrastructure and Finacle
Prepared and submitted Integrated Risk Monitoring
and Reporting Framework to mitigate operational Annual performance appraisal
risk, credit risk, market risk and liquidity risk. Action Taken Report on recommendations of prior Risk
Prepared the operation risk, credit risk, market risk, Management Committees (completed and under progress)
and liquidity risk management policies and credit risk
review guidelines required for risk management and Total of 20 meetings were held during FY 2018/19, and details
submitted it to the Board for approval. of meetings attended and allowance received by the directors
are as follows:
Took necessary action for mitigation of risks after
review of risk report
No. of meetings Meeting Allowance
Members
Reviewed the reports relating to capital adequacy attended (NPR)
and submitted to the Board, along with necessary Mr. Binod Kumar Pyakureal 20 280,000
recommendation. Mr. Rajendra Prasad Aryal 9 144,000
Prepared report on determination of necessary risk
Mr. Ganesh Man Shrestha 20 280,00
tolerance level, after review of necessary policies
and mechanisms, and submitted it to the Board
of Directors on a quarterly basis as per guidelines/
directives issued by Nepal Rastra Bank.

3.8 KARMACHARI SEWA
SUVIDHA SAMITI
Karmachari Sewa Subidha Samiti is a Board-level committee performance appraisal, rewards, punishment, and so on, and
that constantly reviews, recommends, and forwards for present it to the Board. Terms of references of the committee
approval, plans and policies recommended by the CEO as are as follows:
reported by HR/ Staffing Committee of the Bank for the
development and motivation of the staff. The committee To provide the required help to the Board for interpretation
makes recommendations on organizing, succession, and of “Determination of Remuneration Policy” of the bank.
appointment of senior officials, and consults on matters relating The committee reviews and analyses the remuneration
to compensation and welfare plans for staff. Amendment in structure of the overall employees from time to time and
staff service bylaws is also advised by the committee from reviews the effect of the change in remuneration structure
time to time in order to incorporate the current market trend in the market to the Bank regularly and submits the report
and requirement. to the Board.
If it appears that there is a need to increase the remuneration
Composition of members of the Karmachari Sewa Suvidha
of the employees, including the Chief Executive Officer,
Samiti of the Bank is as follows:
as per the “Determination of Remuneration Policy” of
From July 17, 2018 to May 31, 2019 the Bank in compliance with prevailing laws and policies/
guidelines, then the committee recommends it to the
S.N Name
Organization Committee Board, along with appropriate basis.
1 Mr. Ram Chandra Sangai Director Coordinator Develop the indicators for statement of job required to be
2 Mr. Trilok Chand Agrawal Director Member performed by employees of the Bank, goals and progress
3
Mr. Roshan Kumar Acting Chief
Member
evaluation, and review their performance on the basis of
Neupane Executive Officer*
the performance appraisal system.
Chief Financial
Officer* Prepare plan, policies, and standards relating to manpower
5 Head Human Resource
Member management-related actions like admission, selection,
Secretary
appointment, replacement, transfer, promotion, training
*Then title are being used
and development, performance appraisal, and rewards and
punishment, and present it to the Board of Directors.
From June 1, 2019 to July 16, 2019
Review the employee policy and structure of existing
S.N Name employees and prepare succession planning and submit
1 Mr. Ram Chandra Sangai Director Coordinator the recommendations to the Board for approval.
Major areas of discussion in Karmachari Sewa Subidha
3 Mr. Roshan Kumar Neupane Chief Executive Officer Member
Samiti and its decisions during FY 2018/19 are as follows:
Chief Experience
Transformation Officer
Deputy Chief Executive Member Integrated Organization Development and Human
5 Mr. Sudhir Nath Pandey
Officer Secretary Resource Management Policy that includes the necessary
provision of remuneration determination policy
Major roles and responsibilities of the committee are to
prepare plan and make policies and standards relating to Review of performance management and reward budget
human resource management such as selection, appointment, Performance appraisal based on key performance
replacement, transfer, promotion, training and development, indicators, which are developed as productivity parameters

based on job specification/description and long-term Review of need of amendment in recruitment policy
strategy of the Bank Review of need of amendment in remuneration and
Job design of branch, regional office, and department academic qualification of contract staff
Reviewed and recommended to the Board about Annual Review of need of amendment in promotion policy
Recruitment Calendar Total of 12 meetings of this committee were held during FY
Reviewed and recommended to the Board about Annual 2018/19, and details of meetings attended and allowance
Learning Development Plan received by the directors are as follows:
Revised country-level organization structure
No. of meetings Meeting Allowance
Members
Review of succession planning attended (NPR)
Mr. Ram Chandra Sangai 12 168,000
Review of Annual Tactical Plan of Human Resource
Department Mr. Trilok Chand Agrawal 12 168,000
Summary of major activities undertaken by the committee during the review period is stated below:
• Reviewed Staff Compensation and Benefit Policy, Bank’s employees’ duties and responsibilities with
Facilitator Allowance Policy and Overtime Work respect to Bank’s size, network, risk appetite and plan
Management Policy. These policies were passed by and policies.
405th Board Meeting held on May 30, 2019. • Reviewed DNA & Talent Management Department’s
• Reviewed following policies regarding employee Business Process Reengineering Report.
recruitment, performance appraisal, retention, • Reviewed activities carried under “Year Capacity
remuneration, allowance and benefits; Management”.
1. Staff Retention Policy • Reviewed report of Employee Survey 2018 by Price
2. Facilitator Allowance Policy Waterhouse Coopers (PWC) regarding employees’
3. Performance Appraisal Policy emotional and motivational state which consist seven
4. Staff Succession Planning Policy questions.
5. Know Your Employee Policy • Reviewed recruitment through internal vacancy as
6. Overtime Work Management Policy per Integrated Organization Development and Human
7. Staff Compensation and Benefit Policy Resource Management Policy, 2017
8. Contract Staff Management Policy • Reviewed internal recruitment through written

9. Outsource Staff Management Policy examination as per Internal Examination Guideline for
Appointment through Internal Vacancy.
10. Policy for Placement of Support Staff
• Reviewed any activities carried under Policy on Staff
• Reviewed employees succession plan
Rotation and Transfer for interdepartmental transfer
• Reviewed update of Strategic Financial Plan (SFP) for with respect to employees’ professional capacity and
2076/77 which was passed by the Board Meeting the organizational need.
• Monthly review of data regarding head count, • Reviewed Integrated Organization Development and
recruitment, internal promotion, resignation, and Human Resource Management Policy 2019 Chapter 6,
transfers. Learning and Development Program for development
• Reviewed details of internal, external, international of employees’ professional capacity.
and Ad-hoc trainings and training budget and the • Reviewed draft report of Human Resource Consultant.
expenditure incurred for the review period. M/S Deloitte Touche Tohmatsu India was appointed as
• Reviewed Country Level Organization Structure of consultant by 394th Board Meeting.

3.9 SAMPATI SUDHIKARAN NIWARAN SAMITI
(ASSETS/MONEY LAUNDERING PREVENTION COMMITTEE)
The purpose of establishing the Sampati Sudhikaran Niwaran From July 17, 2018 to January 21, 2019
Samiti is to assist the Board of Directors in addressing matters
related to anti money laundering and compliance in the Bank, S.N Name
and to combat terrorism finance and financial crimes. The 1 Mr. Rajendra Prasad Aryal Director Coordinator
committee is responsible for ensuring that the Bank has a 2 Mr. Ganesh Man Shrestha Independent Director Member
comprehensive and effective AML program with oversight that 3 AML Implementing Officer/Head-Compliance Member Secretary
is designed to promote compliance with AML regulations.
From January 22, 2019 to July 16, 2019
The committee reviews and approves the Bank’s policies
related to KYC/AML and CFT as per changes in NRB Directive S.N Name
No 19. It also provides necessary instructions on combating 1 Mr. Rajendra Prasad Aryal Director Coordinator
financial terrorism, money laundering, and corruption from 2 Mr. Ram Chandra Sangai Director Member
time to time. It is responsible for reviewing measures and 3 Mr. Binod Kumar Pyakurel Director Member
tools set by the Bank to indentify and mitigate risks related 3 AML Implementing Officer/Head-Compliance Member Secretary
to money laundering, financial terrorism, and corruption. The
committee carries out periodic review of the actions and Terms of references of the committee are as follows:
activities undertaken by the Bank in relation to prevention of
money laundering and financing of terrorism. The committee To review the policies, rules, and guidelines followed by the
may invite individuals or experts to attend its meetings or Bank in relation to the prevention of money laundering.
present reports and studies to the committee. The committee To evaluate actions and activities undertaken by the
presents a report to the Board of Directors regarding the committee itself and submit the progress report to the
activities carried out in relation to the prevention of money Board of Directors on a quarterly basis.
laundering and combating financing of terrorism, along with
To perform periodic review of systems developed by
necessary suggestions and recommendations.
the Bank to identify and control risks related to money
During the review period, the committee reviewed the policies, laundering, financing of terrorism, and corruption.
rules, and guidelines required to be followed by the Bank in To review the reports on actions and activities undertaken
order to comply with international norms, reviewed the actions as per the Prevention of Money Laundering Act, Rules, and
and activities undertaken by the Bank in relation to AML/CFT, Directives issued by Nepal Rastra Bank on a quarterly basis
reviewed the report related to the evaluation of risk related and present it to the Board of Directors.
to money laundering and financing of terrorism, and reviewed
the report related to compliance of Prevention of Money To convene the meeting of the committee at least once in
Laundering Act and rules and provisions of regularity bodies, 45 days.
and submitted the report to the Board.
Composition of members of the Sampati Sudhikaran Niwaran

Samiti is as follows:

Major areas of discussion in Sampati Sudhikaran Niwaran No. of meetings Meeting Allowance
Members
Samiti and its decisions during FY 2018/19 are as follows: attended (NPR)
Mr. Rajendra Prasad Aryal 15 208,000

Periodical review of digitization status of KYC related
Mr. Ganesh Man Shrestha 8 96,000
documents
Mr. Ram Chandra Sangai 6 96,000
Review and support of policies, procedures, and guidelines
Mr. Binod Kumar Pyakurel 7 136,000
Reviewed the Annual Risk Assessment Report of FY
2016/17
Assessment of compliance of NRB Directive No. 19, Assets

(Money) Laundering Prevention Act and Rules
Discussion on update on annual training on AML/CFT &

KYC
Discussion on update on end-to-end AML/CFT solutions

2018/19, and details of meetings attended and allowance
received by the directors are as follows:
Summary of major activities undertaken by the

committee during the review period is stated
below:
Reviewed the policies, rules, and guidelines required

to be followed by the Bank in order to comply with the
provisions related to money laundering and financing
of terrorism as per international norms.
Performed periodic review of actions and activities

undertaken by the Bank in relation to prevention of
money laundering and financing of terrorism and
submitted the report to the Board of Directors.
Reviewed the report related to the evaluation of

risk related to money laundering and financing of
terrorism and submitted it to the Board of Directors.
Reviewed the report related to the compliance of

Prevention of Money Laundering Act, Rules and
Provisions of Regularity Body.

3.10 ANTI MONEY LAUNDERING AND
COUNTERING FINANCIAL TERRORISM REPORT
The Bank has zero tolerance against money laundering and implementation of various manuals or procedural guidelines
financial terrorism. NIC ASIA Bank has strong belief in integrity that is required for effective AML/CFT & KYC compliance
and transparency and committed towards anti corruption.
The bank complies with the requirements of the following
The bank adopts policy of not only adhering country’s legal Laws and rules:
and regulatory requirement, but also adopts international
• Asset (Money) Laundering Prevention Act, 2064 (Including
best practices to the extent reasonable and practicable to
second amendment)
effectively manage ML/FT risks in the bank.
• Asset (Money) Laundering Prevention Rules, 2073
It is the policy of the bank to make maximum use of technology
and upgrade the systems and procedures in accordance with RISK BASED APPROACH ON ML/FT
the upcoming challenges regarding ML/FT. Likewise, bank
The RBA principals propose identification, assessment,
implements/uses automated AML solutions across its network
understanding and mitigation of ML/FT risk including explicit
for effective KYC management, risk assessment, transaction
consideration to key risk factors such as customers, products/
monitoring etc. The Bank pursues a zero tolerance policy on all
services, transactions, country, geographic areas and coverage
matters related to AML/CFT compliance. The bank takes action
of banking activities and delivery channel and with varying
for resolving issues in high priority.
degrees of impact and levels of risk. It is a continuous process,
The major objectives of Bank’s AML CFT Policy are: carried out with a dynamic approach.
• To lay down a framework to be implemented by the Bank in The bank adopts Risk Based Approach (RBA) in managing its
order to safeguard it against being used for money laundering ML/FT risks and assesses potential ML/FT risks and implement
and financing of terrorism measures and controls commensurate with the identified risk.
• To ensure full compliance by the Bank with all applicable The bank strengthens, make priorities and perform its activities
legal and regulatory requirements pertaining to money to manage higher risks first and ensure that greatest risks
laundering and financing of terrorism, and receive the highest attention. RBA is adopted in all activities
that are performed to prevent ML/FT risks in the bank.
• To provide a broad framework for formulation and
RISK MANAGEMENT VIA THREE LINES OF DEFENSE

For the effective assessment, understanding, management and mitigation of ML/FT risks, bank adopts three line of defense.
Identification and analysis of ML/FT risks and effective implementation of policies and procedures to encounter the identified risk is
the feature of effective and sound risk management. The lines of defense acts as safeguard of the bank during the adversities and
are liable for effective risk management.
1st Line of Defense 2nd Line of Defense 3rd Line of Defense
Business units and departments functions as a first Compliance Department function as a second line of de- This is performed by internal audit. The inter-
line of defense to prevent ML/FT risks. Business fense to prevent ML/FT risks in the bank. The Compliance nal audit reviews the activities of the first two
units make an appropriate risk assessment before Department monitors overall legal, regulatory and internal lines of defense with the purpose to ensure
introducing any product or service and implement compliance of policies, procedures and guidelines. It also that legislation, regulations and internal
required mitigations. It is the responsibility of provides businesses with regulatory compliance expertise policies are processed effectively.
compliance department to assist business units/ and guidance, set standards and training for businesses
departments in this process. to manage and oversee ML/FT risks.

PROHIBITED CUSTOMERS AND TRANSACTION 6. Maintain relationship with persons and entities sanctioned
by major sanction authorities such as United Nations,
On the Bank’s fight against ML/FT, it doesn’t carry out following
Office of Foreign Assets Control- United States, Her
activities;
Majesty’s Treasury-United Kingdom;
1. Establish or maintain dummy accounts, anonymous 7. Payment orders with an inaccurate representation of the
accounts, or accounts in fictitious names or transact in person placing the order;
such accounts or cause to do so; 8. Acceptance of payment remittances from other banks
2. Maintain relationship with shell Banks or other banks without indication of the name or account number of the
which deals with shell bank or shell entities; beneficiary;
3. Establish an account or continue business relationship 9. Use of accounts maintained by the bank for technical
or conduct transaction with the customer who cannot reasons, such as sundries accounts or transit account,
provide documents, information and details required for or employees’ accounts to filter or conceal customer
the customer identification and verification as required by transactions;
law and regulation. However, in case customer submits 10. Maintaining accounts under pseudonyms that are not
valid reason for inability of presenting some document or readily identifiable;
information and bank become satisfied with the reason,
11. Opening Accounts without name or with notional name;
relationship can be established and transaction can be
done with maintaining record of the information of non- 12. Acceptances and documentation of collateral that do
existence of document/information; not corroborate with the actual economic situation or
documentation of fictitious collateral for credit granted on
4. Customers who provide conflicting Documents, information
trust;
and details;
13. Payable through Accounts;
5. Maintain relationship with the banks operating in offshore
jurisdictions; 14. Providing Downstream Correspondent Banking;
15. Maintain relationship with shell entities or other entities or
individuals which deal with shell bank or shell entities.
GOVERNANCE, OVERSIGHT, STRUCTURE AND REPORTING
Board of Directors

(CEO)
Sampati Sudhikaran Niwaran Risk Management
Samiti Committee (RMC)
Chief Risk Officer (CRO)
Head Compliance/ AML

Business Unit/ Implementing Officer Regional AML
Department Heads Implementing Officer
Support Unit/
Department Heads Branch AML
Implementing Officer

3.11 SPEAKING UP AND WHISTLE
BLOW MECHANISM
Bank’s workforce represents a valuable source of information The Bank has established an effective guideline on speaking
that can be utilized to identify a potential problem, and deal up and whistles blowing for employees to report to the
with it, before it causes significant damage to operations and/ appropriate authority their concerns about unethical behavior,
or reputation. Employees have an important role in identifying actual or suspected fraud, or violation of the Bank’s code of
and reporting all concerns about serious unethical or illegal conduct.
conduct through the appropriate internal channels. In most
situations, the traditional internal reporting lines are sufficient Employees are encouraged and able to communicate
to prevent malpractice. However, where fraud, corruption or confidentially, and without the risk of reprisal, legitimate
other malpractice has served to undermine the Bank’s internal concerns about illegal, unethical, or questionable practices.
controls and lines of reporting, whistle blowing is an effective The Bank believes in encouraging its employees to bring the
safeguard. problems to the attention of management, and also reassures
The main objectives of Speaking up and Whistle Blowing guideline are:
To encourage staff of the bank to speak up on any wrongdoing occurred in

the Bank;
To deal with reports by staff on ‘wrongdoing’ in the Bank;
To promote an open and accountable workplace in which malpractice is
deterred, risk management systems of the Bank are reinforced, stakeholders’
interests are protected and the good reputation of the Bank is maintained.
To lay down procedure to report or whistle blowing by employees.
To develop a culture of openness, accountability and integrity.

the employees that their concerns are very important to the PROCESS OF WHISTLE BLOWING
Bank.
Any employee could directly report such reportable instances
The issues can be related to: to its line managers or HR Department or AML Implementing
Officer. However, for any good reason not to disclose to the
• Conflict of interest line managers/HR Department or AML Implementing officer,
• Safety a mechanism has been devised placed in the intranet page
• Misuse of confidential information (iZone3) of the Bank for directly whistle blowing.
• Falsifying reports The link for the whistle blowing in the intranet page of the
• Bullying, harassment and discrimination of others Bank (iZone3) has been given below along with 3 simple steps
for the lodgment:
• Bribery, facilitation payments
• Workplace violence
• Drugs and substance use
• Trading insider information
HOME
• Improper use of Bank’s assets
• Employment law
• Theft, etc.
PRINCIPLES OF SPEAKING UP & WHISTLE BLOWING AML_CFT_KYC

i. Staffs have a responsibility to Speak Up if they suspect any
actual, planned or potential wrongdoing that breaches any
law, regulation, and mismanagement, abuse of authority
and resources of the bank.
APPLICATION
ii. Staffs are encouraged to meet this responsibility by
providing them with access to a confidential and secure
means to raise legitimate concerns.
iii. Staffs are expected to raise concerns through line WHISTLEBLOW
management unless there is a good reason not to do so.
In such circumstances report or information can be directly
send to senior management.
iv. All reports will be recorded, reviewed and, where
appropriate, independently investigated. Feedback will be Arrangement has been made to review the lodgment in the
provided to the employee who has raised the concern. Intranet page by members of the Corporate Governance
v. Where requested, every effort is made to maintain the Committee and CEO only.
confidentiality of the staff making a report (although
The application protects anonymity of the employee (i.e.
where, for example, the report leads to legal proceedings,
whistle blower) by impersonating as a system account i.e.,
this cannot be absolutely guaranteed).
regardless of iZone3 User ID reporting through the application,
vi. Unless a report has been made maliciously, no staffs are the reporting user ID is seen as system@nicasiabank.com.
disadvantaged for Speaking Up. The content of the whistle blowing is automatically sent
vii. The submissions of malicious or deliberately misleading via whistleblow@nicasiabank.com to the members of the
reports are considered a serious breach Code of Conduct. Corporate Governance Committee and CEO only. The content
It may also render the individual making the report subject cannot be accessed by any other person.
to civil or criminal action.

BANK’S APPROACH TO SPEAKING UP & WHISTLEBLOWING
FAIRNESS
INVESTIGATION
REPORTING
SAFEGUARD & CONFIDENTIALITY

PROTECTION
i. FAIRNESS iii. CONFIDENTIALITY

The Bank understands that the staff raises the concern in The Bank shall not disclose the identity of the staff speaking
good faith and shall not take action against the individual. up unless required by law. Staff should be aware that there
It is important that all staff understand that it is acceptable may be times when the Bank is unable to resolve a concern
for them to speak up even in cases where a genuine concern without revealing the staff member’s identity, for example
turns out to be mistaken or misguided. when the staff member’s personal evidence is essential. If so,
the matter shall be discussed with the staff member whether
ii. INVESTIGATION and how the matter can best proceed.
Compliance Department or any other departments as
assigned by Corporate Governance Committee shall assess iv. SAFEGUARD AND PROTECTION
the merit of any concern raised by the Staff and shall initiate Any staff who reports a wrongdoing, provided that this is done
for investigation. All efforts will be made to give feedback to in good faith and in compliance with the provisions of this
the individual on the outcome of any investigation, subject to guideline, shall be protected against any acts of retaliations.
legal or investigatory limits. This process will be agreed on a Staffs who make a report in bad faith, particularly if it is based
case-by-case basis as issues such as confidentiality may need knowingly on false or misleading information, shall not be
to be taken into account. protected and shall be subject to disciplinary measures.
Where a concern is investigated and it is found to implicate v. REPORTING

another staff member or a member of the Board, he/she will The investigated case and its action taken by the Bank against
be dealt with effectively in accordance with employment and the case shall be reviewed by the Corporate Governance
other law and contracts of employment. Committee of the Bank. Strict confidentiality shall be adopted
in submission of the investigation reports.

3.12 STATEMENT OF DIRECTORS RESPONSIBILITY

The Statement of Director’s Responsibility should be In the preparation of the financial statements, the directors
read simultaneously with the Auditor’s Statement of their undertake the responsibility of following arrangements:
responsibilities set out in the Auditor’s Report to shareholders,
Select suitable accounting policies and then apply them
which provides the shareholders a precise view to distinguish
consistently
the respective responsibilities of the directors and of the auditor
Make reasonable judgments and estimates where
in relation to the financial statements. The Board of Directors is
necessary
responsible for preparing the annual report, separate financial
State that financial statement complies with the Generally
statements of the Bank, and the consolidated financial
Accepted Accounting Principles, Nepal Financial Reporting
statements of the Bank and its subsidiary(ies) in accordance
Standards, Directives issued by Nepal Rastra Bank,
with the prevailing laws and regulations of Nepal.
Companies Act, National Legislation, regulation issued by
Section 108 read together with Section 109 of the Companies local authorities, guidelines issued, and other prevalent
Act 2006 of Nepal stipulates the ultimate responsibilities of laws and regulations
the Board of Directors to prepare the financial statements Prepare the financial statements on a going concern basis
of the company to its shareholders for presentation in AGM. with the assurance that the Bank has the resources to
The financial statements have been prepared and approved continue the business in the foreseeable future, unless
by the Board of Directors in accordance with Nepal Financial it is not appropriate. Since the directors are satisfied that
Reporting Standards (NFRS) as published by the Accounting the group and the Bank have the resources to continue
Standards Board (ASB) Nepal and pronounced by The Institute the business in the foreseeable future, and there are no
of Chartered Accountants of Nepal (ICAN) and in the format indicators that cast doubt on the Bank and its subsidiary(ies)
issued by Nepal Rastra Bank in Directive No. 4 of NRB going concern assumption, the financial statements are
Directives, 2075. These policies have been consistently applied continually prepared on going concern basis.
to all the years presented except otherwise stated.
The directors are responsible for keeping proper books of
The Bank has applied several amendments to standards for the account which discloses the financial position of the Bank
first time during the year ended 32Ashad 2075. The Bank has with reasonable accuracy at any time. Also, the directors
prepared the opening statement of financial position as per ensure that financial statements comply with the Companies
Nepal Financial Reporting Standard (NFRS) as at July 16, 2016 Act, 2006. Further, the directors have general responsibility for
(the transition date) by recognizing all assets and liabilities taking such steps as are reasonably open to them to safeguard
whose recognition is required by NFRS, not recognizing the the assets of the group and to prevent and detect fraud and
items of assets or liabilities which are not permitted by NFRS, other irregularities. As such, the Bank and its subsidiary(ies)
by reclassifying items from previous GAAP to NFRS as required have implemented policies, procedures, and mechanisms
by NFRS and applying NFRS in measurement of recognized that are intended to mitigate the risks that may arise due to
assets and liabilities. control lapses. The Bank has constituted Audit Committee
The stand-alone financials have been consolidated on the that comprises of two non-executive directors and Head
basis of Nepal Financial Reporting Standard (NFRS) 10 toarrive Internal Audit, who is the secretary of the committee. The
at the consolidated financial statements. In para 19 of NFRS 10, Audit Committee functions independently and reports directly
a parent shall prepare consolidated financial statements using to the Board of Directors.
uniform accounting policies for like transactions and other On behalf of the Board of Directors
events in similar circumstances unless it is impractical to do so. Tulsi Ram Agrawal
The carve-out is optional and has been provided for FY 2017/18 Chairman
to 2019/20. Accordingly, the Bank has opted the carve-out.

3.13 DIRECTOR’S STATEMENT ON
INTERNAL CONTROL AND ITS ADEQUACY
The Board of Directors ("Board") • The respective committees of the risk in order to ensure structures and
recognizes the importance of Board are established by the Boards procedures of risk management are
sound internal controls and risk to assist the Boards in ensuring the in place and they are reflective of the
management practices to good effectiveness of the Bank's operations Bank's risk tolerance.
corporate governance. However, such and that the Bank's operations are
system of internal control is designed in accordance with the corporate • The Board of the Bank receives and
to manage the Bank's risks within an objectives, strategies and the annual review reports from management on a
acceptable risk profile, rather than budget as well as the policies and regular basis on business operations at
eliminate the risk of failure to achieve business environment and internal the board meetings.
the policies and business objectives operating conditions.
• There are policy guidelines
of the Bank. Accordingly, it can only
• The Audit Committee of the Bank and authority limits imposed on
provide reasonable assurance against
monitors compliance with policies management in respect of the day-to
misstatement of management and
and procedures and the effectiveness day banking and financing operations,
financial information and records. To
of the internal control systems and extension of credits, investments,
this end, the Board has established an
highlights significant findings in acquisitions and disposals of assets.
organization structure which clearly
defines lines of accountability and respect of any non-compliance. Audits
• Policies and procedure to ensure
delegated authority. are carried out on all units or branches,
compliance with internal controls and
the frequency of which is determined
the relevant laws and regulations
The Board has delegated specific by the level of risk assessed, to provide
are set out in operations manuals,
responsibilities to four committees an independent and objective report
guidelines and directives issued by the
(Audit, Risk Management, Karmachari on operational and management
Bank which are updated from time to
Sewa Subidha and Samapatti activities of these units or branches.
time.
Sudhhikaran Niwaran Samiti). These The annual audit plan is reviewed and
committees have the authority approved by the Audit Committee. • Annual budgets are approved by
to examine particular issues and the Board and the management’s
report back to the Board with their • The Audit Committee review
performance is assessed against the
recommendation. These committees internal control issues identified
approved budgets and explanations
are chaired by non-executive directors, by the internal audits, the external
are provided for significant variances
while Audit Committee is chaired by auditors, regulatory authorities and
on a monthly basis to the Board.
Independent non-executive director. management, and evaluate the
adequacy of internal control system. On behalf of board,
The management assists the Board The minutes of the Audit Committee
Tulsi Ram Agrawal
in the implementation of the Board's meetings are tabled to the Board of
Chairman
policies and procedures on risk and the Bank on a periodic basis.
control by identifying and assessing
the risks faced, and in the design, • The Risk Management Committee
operation and monitoring of suitable was established by the Board to
internal controls to mitigate and assist the Board to oversee the overall
control these risks. management of principal areas of

3.14 RESPONSIBILITY
STATEMENT OF CEO AND CFO
The financial statements of NIC ASIA Bank and the consolidated in preparing and presenting the financial statements and
financial statements of the Bank and its subsidiaries as on July such estimates and underlying assumptions are reviewed
16, 2018, are prepared and presented in compliance with the periodically. The revision to accounting estimates are
requirement of the followings: recognized in the period in which the estimates are revised
and are applied retrospectively. Disclosures of the accounting
Nepal Financial Reporting Standards (NFRS) as published estimates have been included in the relevant sections of the
by the Accounting Standards Board (ASB) Nepal and notes wherever the estimates have been applied, along with
pronounced by The Institute of Chartered Accountants of the nature and effect of changes of accounting estimates, if
Nepal (ICAN); any.
Nepal Financial Reporting Standards (NFRS) as published
Internal Audit Department has conducted periodic audits to
by the Accounting Standards Board (ASB) Nepal and
provide reasonable assurance that the established policies
pronounced by The Institute of Chartered Accountants of
and procedures of NIC ASIA Bank were consistently followed.
Nepal (ICAN);
However, there are inherent limitations that should be
Format issued by Nepal Rastra Bank in Directive No. 4 of recognized in weighing the assurances provided by any system
NRB Directives, 2075; of internal controls and accounting.
Companies Act, 2063;
The financial statements of NIC ASIA Bank were audited by M/s.
Banks and Financial Institutions Act, 2073; TR Upadhya & Co., Chartered Accountants, the independent
external auditor.
Securities Act, 2063;
Income Tax Act, 2058; We confirm that,
The formats used in the preparation of the financial statements NIC ASIA Bank and its subsidiaries have complied with all
and disclosure made comply with the format prescribed in the applicable laws, regulations, and regulatory requirements
Unified Directive issued by Nepal Rastra Bank. There are no material non-compliances
The accounting policies used in the preparation of the financial There are no material litigations that are pending against
statements are appropriate and have been consistently applied the group
to by the group except otherwise stated. The accounting
Required and adequate provisions have been made for the
policies have been included in the relevant notes for each item
overdue loans and advances as per the NRB Directive and
of the financial statements and the effect and nature of the
NFRS.
changes, if any, have been disclosed.
Roshan Kumar Neupane Rupesh Luitel
The NFRS requires the Bank to make estimates and CEO CFO
assumptions that will affect the assets, liabilities, disclosure of
contingent assets and liabilities, and profit or loss as reported
in the financial statements. The Bank applies estimates

3.15 INTEGRATED REPORTING
Integrated Reporting is a concise communication of an With the changes in time, we believe our stakeholders require
organization’s strategy, governance and performance which more than just the financial statement. So, our integrated
demonstrates the links between its financial performance report provide information regarding business performance,
and its wider social, environmental and economic context and corporate social responsibility, statutory compliances,
shows how organizations create value over the short, medium sustainability banking, internal control, risk analysis,
and long term. management analysis, committee reports.
We, NIC ASIA Bank believe that our stakeholders should be In our Integrated Report, we aim to provide all the required
accessed to our financial activities, our goals, our strategies information to our existing shareholders as well as our
and our non-financial performance as well. On our drive prospective investors.
to transparency, we prepare Integrated Reports to help
stakeholder evaluate the Bank’s financial performance,
non-financial performance, strategies, resource allocation,
governance, future outlook, business model.
ED REPO
AT RT
GR IN
TE G
IN
RISK FINANCIAL SUSTAINABILITY

ANALYSIS STATEMENT REPORTING
MANAGEMENT CORPORATE
ANALYSIS GOVERNANCE

RISK
MANAGEMENT
4.1 Statement of Risk Management......................................... 192

4.2 Statement of Capital Adequacy..........................................203
4.3 Statement on Non
Performing Loan Management...........................................206
4.4 Report on Going Concern.......................................................208

4.1 STATEMENT OF RISK MANAGEMENT

Taking risk is an integral part of banking business. Failure Management Framework commensurate to the size
to adequately assess and manage risks may lead to losses and complexity of its operations, which shall consists of
endangering the soundness of individual financial institutions appropriate management strategy, proper governance
and affecting the stability of the overall financial system. structure, comprehensive processes, scientific and
systematic methodology, reliable system and data
The setting of an appropriate strategy and risk tolerance/
arrangement and appropriate reporting for timely action
appetite levels, a holistic risk management approach and
ensuring effective risk management.
effective reporting lines to the management body in its
management and supervisory functions, enable managers b. To put in place appropriate reporting and monitoring tools
of the Bank to take risks knowingly and treat risks where with regards to the risk management.
appropriate. c. To ensure that senior level management as well as staffs
Risk management is a part of internal governance involving all responsible for risk management are provided with
areas of financial institutions. There is a strong link between adequate policy framework to accomplish risk management
good corporate governance and sound risk management. function.
Without proper risk management, the various functions in d. To allocate various responsibilities to the relevant staffs,
a financial institution cannot work together to achieve the department/functions and/or committees in relation to the
institution’s objectives. It is an essential part of helping the management of risk.
financial institution grow and promote sustainability and
e. To ensure that a sound management culture is established
resilience.
throughout the bank.
Risk management is a discipline at the core of every enterprise f. To comply with applicable regulations.
and encompasses all activities that affect its risk profile. The
g. To put in place appropriate stress testing framework with
definition of a sound or adequate risk management system is
regards to the market and liquidity risk management.
ever changing, as new technology accommodates innovation
and better information and as market efficiency grows. Each h. To review credit initiation/ screening/ underwriting/
financial institution should put in place a comprehensive management/ monitoring and administration procedures
risk management program tailored to its needs and the of the business units/branches.
circumstances under which it operates. i. To review whether the loan is implemented as per the
approved terms and conditions.
The Board of Directors of the Bank had approved Integrated
Risk Management Policy for implementation after review j. To review compliance to our internal credit policies &
and recommendation of Risk Management Committee. The guidelines, credit approval terms, internal/external audit
purpose of this policy is to provide a framework for integrated reports and Nepal Rastra Bank regulations.
philosophy, policies, framework, rules and regulations relating k. Conduct immediate on site credit risk review, if any branch
to efficient management of Operational Risk, Credit Risk and seem problematic.
Market and Liquidity Risk at the Bank. The core objective of the
l. To identify the Key Risk Indicators and Key Risk Areas in the
policy is to put in place a robust risk management system and
areas of credit risk management.
framework within the Bank.
m. To recommend remedial measures both corrective and
Major goals and objectives relating to the Bank’s Integrated preventive improvements of the issues identified and foster
Risk Management Policy are; the credit management and administration of business
a. To put in place in the Bank, a comprehensive Risk unit/branches.

n. To guide, facilitate and support the respective areas/ • Enhance understanding and coordination between
departments of the Bank in implementing the sales and credit
recommendations made in the Credit Risk Review Report. • Raise report on non-compliance of previous audit
o. To identify and/or enhance or reduce the market and scope comments/remarks and credit risk review
of lending, depending upon risk appetite • Immediately provide corrective action, if credit flow/
p. Various other objectives are; disbursements are not in line with Bank’s expectation
• Identify training needs to Branch Manager/ through Business Heads
Relationship Manager/Assistant Relationship Manager q. To understand/review sectoral concentration vis-à-vis the
and recommend the same to Human Resource overall market, its opportunities and challenges.
Department through Credit Risk Review Report
• Provide spot training to Branch Manager/Relationship
Manager/Assistant Relationship Manager including
execution of security documentations
RISK MANAGEMENT STRUCTURE OF THE BANK
BOARD OF
DIRECTOR
RISK SAMPATI
KARMACHARI
MANAGEMENT SUDHRIKANAN AUDIT
SEWA SUVIDA
COMMITTEE NIWARAN COMMITTEE
SAMITI
SAMITI CHIEF
EXECUTIVE
OFFICER
(CEO)
DEPUTY CHIEF
EXECUTIVE
COMPANY
OFFICER
SECRETARY
(DCEO)
INTERNAL
INTEGRATED AUDIT
RISK DEPARTMENT
MANAGEMENT
DEPARTMENT
(CHIEF RISK
OFFICER)

CHIEF RISK
OFFICER
(CRO)
Credit Risk Operational Market & Information

Management Risk Liquidity Risk Compliance
Security
Department Management Management Department
Department
Department
CREDIT RISK and controls to ensure the overall risk remain within acceptable
level and the reward compensate for the risks taken. Credit
Credit Risk is the risk that a borrower or counterparty will fail to portfolio is structured to ensure that no single event can have
meet their obligations according to the agreed terms, resulting a significant adverse impact on overall performance of the
in the economic loss to the institution. For the banks, loans are Bank.
the largest source of credit risk, also other sources of credit
risk exist throughout the activities of the bank in the trading ii. Policies/Procedures
book and both on and off the balance sheet.
The Bank establishes credit policies and procedures which
Credit risk management for banking is robust and flexible provide a minimum standard for credit activities and foster
solution for measuring and reporting regulatory credit risk a common approach to credit risk management by individual
measures of the bank portfolio. It also helps to optimize the units/branches/departments. These are established to provide
allocation of credit risk mitigates, while computing such credit a prudent framework for individual staff to operate within. In
risk measures. It lets the bank to configure all regulatory addition, resources within the Bank are deployed so as to take
parameters and options that drive the calculations, and maximum advantage of profitable credit risk opportunities in
support multiple configuration sets. its target market.
Among the various risk that the bank is exposed to, credit risk iii. Management/Functional Level
is the major risk arising during the normal course of lending The Bank relies on the competences of the staff involved in
and credit underwriting. Apart from lending, banks increasingly credit related activities to identify acceptable credit risk and
face credit risk in various financial instruments, including to make sound judgment based decisions in the approval and
acceptances, interbank transactions, trade financing, foreign ongoing management of those risks.
exchange transactions, and in the extension of commitments
and guarantees and settlement of transactions.
CREDIT RISK STRATEGICIES, POLICIES
The Bank’s approaches to Risk Management are in three levels; AND PROCEDURES
i. Strategic level Credit risk strategy includes an assessment of risk profile of the
bank and a statement of the Bank’s appetite to take credit risk
It encompasses risk management functions performed by Board for each activity type, product type (working capital, consumer
of Directors, Board level committees and senior management. loan, fixed term, etc), economic sector (such as real estate,
For instance, direction and orientation of business, definition construction, retail), geographical location, etc. The credit
of risk, ascertaining risk appetite, formulating strategy and risk strategies are communicated through the organization
policies for managing risk; and establishing adequate systems and periodically reviewed at board or management level. For

each type of loan, credit policies and procedures are defined CREDIT LIMIT AND INDICATORS
in criteria for granting loans in a safe and sound manner
including, but not limited to; To ensure diversification of risks and limit concentration risk,
limits on credit exposures should be set for all the relevant
• Purpose of credit and source of repayment
activities. It includes;
• Collection of relevant information based on the different
client risk profiles • Limits on exposure of specific activities or type of products,
including off balance sheet items
• Use of adequate tools such as scoring or internal rating
systems • Limits on single counterparties and groups of connected
counterparties, including other banks and financial
• Analysis of borrower’s repayment history
institutions, domestic and foreign
• For commercial credits, the borrower’s business expertise
• Limits on specific industries and/or economic sectors/sub-
and the condition of the borrower’s economic sector and
sectors
its position within the sector
• Limits on exposure to type of collateral
• Net worth of the borrower and personal guarantee
• Limits on exposures to related parties
• The proposed terms and conditions and covenants of the
credit agreement • Limits on branches and/or exposures to geographic
regions, including other countries
• Collateral and its sensitivity to economic and market
developments • Limits on the credit that may be granted by approving
managers.
• Adequacy, enforceability, and liquidity status of collaterals
as well as the practical aspects of their mobilization. In addition to setting limits, Bank uses early warning indicators
Credit policies address credit risk in all the Bank’s activities, at to signal at an early stage where there is increased exposure
both individual and portfolio levels. Such policies are clearly to specific components of credit risk, and responds to these
defined, consistent with the credit strategy, comply with indicators by assessing whether they point to potential
regulatory requirements, international standards and banking problems in credit quality.
practices, and be adequate for the nature and complexity of
the Bank’s activities.
CREDIT GRANTING PROCESS

Credit proposal assessment are performed at relevant level following procedures, methodology and operating
Assessment guidelines describing the necessary nature and extent of due diligence and collection of relevant supporting
documents and information based on their risk profiles.
Before submitting the proposal to the approval person, unit and/or committee, the Bank undertakes a review
Review
and analysis of loan proposals by a person independent from the initial assessment
The designated level of approving authority takes the approval decision, including approval of specific terms and
Approval
conditions based on initial credit assessment, independent review and analysis.
Following the notification of approval, disbursement is made by designated unit/person, following the procedures
Disbursement
to ensure that all terms and conditions are verified and guarantees
The credit administration function is responsible for maintaining credit files and ensuring they are kept up to
Administration
date and for follow-up for necessary actions.

CREDIT RISK MONITORING process that includes a justification for how it will improve
repayment prospects. While restructuring includes all aspects
Monitoring of risks is performed by the Credit Risk Management of rescheduling requiring fresh credit assessments and
Function without any influence of the risk taking units. Bank additional documents, a specific approval process is followed.
has in place a methodology to adequately classify their credit The Bank uses neither rescheduling nor restructuring by way
risk at Bank’s portfolio and borrower’s level. The classifications of forbearance.
of the credit risk uses quantitative and qualitative borrower
level follow a graduation of the different level of inherent risk
and with appropriate actions consistent with the level of risk RECOVERY PROCESS
identified. When rescheduling and restructuring are not options or fails to
improve the situation, problem loans are dealt by specialized
Internal Rating System is used as valuable tool in monitoring
recovery unit. This unit makes proactive efforts in dealing with
the quality of individual loans which helps the Bank to
problem borrowers.
differentiate between the different credits exposures in
its portfolio’s characteristics and verify the accuracy of the When all efforts fail, the Bank writes off loans and liquidate
provisions. collateral to minimize cost. Such process are strictly monitored,
require specific level of approval and specific information to
The Bank monitors quality of the credit relationships on
the board and the Nepal Rastra Bank.
an on-going basis and keep updated information on their
credit portfolios and on the risk profiles and situation of the
borrowers. This includes timely collection and regular review OPERATION RISK
of financial information including audited annual financial
Basel Committee on banking supervision defines Operational
statements.
Risk as “the risk of loss resulting from inadequate or failed
Business borrowers are also monitored through on-site internal processes, people and systems or from external
visits, while repayment capacities of individual customers events, this definition includes legal risk, but excludes strategic
are updated regularly for early identification of any adverse and operational risk”. It further adds, ‘Legal risks includes
developments that may affect repayment of loans. but not limited to exposure to fines, penalties or punitive
damages resulting from supervisory actions, as well as private
settlements”.
Following tools are used for Risk Monitoring:
• Concentration Monitoring Operational Risk is pervasive across all the functions of the
Bank and is influenced by all resources, including human
• Industry Profile Analysis
resource, system and procedural designs deployed by the
• Credit Risk Review (CRR) Bank to carry out those functions. Operational Risk can be
• Stress Testing caused by both internal and external sources such as fraud,
business interruptions, system failures, damage to physical
infrastructure, failure in execution and service delivery,
REMEDIAL ACTIONS inherent risk in product, flawed design or process, and business
practice.
The Bank has effective processes and procedures in place for
the early implementation of remedial actions on deteriorating
Legislative and Regulatory framework on Operational
credits and management of problem loans, including assessing
Risk Management
the appropriate legal actions. Appropriate remedial actions are
taken without delay, including requiring additional or increased a. Unified Directives 1, 5, 6 issued by Nepal Rastra Bank
guarantees. b. Risk Management Guidelines, 2010 issued by Nepal
Rastra Bank
Rescheduling tenure of loans, schedules are appropriate only
when the loan is performing. However, when rescheduling is c. Information Technology Guidelines, 2018 issued by
used as remedial action, the Bank follows a specific approval Nepal Rastra Bank.

Operational Risk Management Framework of the Bank consists of following
a. Board and Senior Management Oversight
b. Operational Risk Function and Structure
c. Framework for Risk Assessment and Qualification
d. Framework for Risk Monitoring and Reporting
e. Enforcement of Sound Operational Risk Management Culture and Practices
f. Verification of Operational Risk Management Framework
g. Control Functions
h. Contingency Planning
OPERATIONAL RISK MANAGEMENT PROCESS
Identification of Solution
Dissemination
Operational Risk Identification
Disclosure of Execution and

Analysis
Risk Closure
Grading Operation
Distribution
Risk
(Prioritization and
Classification)

MEASUREMENT AND QUANTIFICATION OF

GRADING OPERATION RISK
OPERATIONAL RISK
The measurement and quantification is carried out through:
• Operational Risk Loss Data Base and Near Misses

• Modified Internal Measurement Approach
HIGH
HIGH
FREQUENCY -
FREQUENCY -
LOW
SEVERITY
HIGH SEVERITY CLASSIFICATION OF OPERATIONAL RISK
TYPE
Execution,
LOW LOW
delivery &
FREQUENCY - FREQUENCY -
LOW SEVERITY HIGH SEVERITY process
management
Business
Disruption External
& System Fraud
Failure
Employement
Practice &
Workplace
Safety
OPERATIONAL RISK APPETITE OF THE Damaget to
Internal
BANK Physical
Fraud
Assets
The overall Operational Risk Appetite and Tolerance Statement Clients,
shall encapsulate the changes in environment factors, the Products
Bank’s financial condition, quality of control standards, and & Business
control environment, loss data, changes in volume of business Practice
and activity, and occurrence of operational risk events. The
Operational Risk Appetite and Tolerance Statement shall be
revised by the approval of the Risk Management Committee as
and when required, but at least once in a year.
RISK MANAGEMENT TOOL KITS
The risk exposure shall not exceed 125% of the average of sum The Bank uses following tool kits for the effective management
of percentage risk weighted exposure for operational risk of of Operational Risk Management. These toolkits serve as
the past three years, i.e. 25% additional exposure is within the fundamentals for identification, assessment, and management
risk appetite of the Bank. of operational risk and are embedded in the operational risk
management framework of the Bank. These tool kits are
The risk exposure shall not exceed 125% of the average of sum
deployed proactively in an anticipatory fashion to recognize
of percentage Risk Weighted Exposure for Operational Risk of
and manage risk in a forward looking manner;
past three years. i.e. 25% additional exposure is within the risk
appetite of the bank. 1. Key Control Standards
2. Key Control Self Assessments
3. Risk Key Indicators

1. Key Control Standards
Key Control Standards are bare minimum qualitative control standards to be attained by all the functions. These control standards
are segregated as;
S.N Standard Control Scope
• Clear segregation of roles and responsibilities

1 Organization • Updated Delegation of Authority in commensurate with the Bank’s Policies
• Duly recorded handover, takeover procedures during staff movements / resignation etc.
• Compliance with all Laws of the land
• Compliance with all regulatory requirements including reporting
2 Compliance • Impact of regulatory changes
• Compliance with Employee Code of Conduct
• Maintenance of Customer Confidentiality
• Adequate legal arrangements while dealing with external parties
3 Legal • Legal Actions
• Adequate legal arrangements in dealings with customers
• Competencies in assigned roles and responsibilities
• Mandatory leaves and peer reviews
4 Human Resource • Adequate staffing
• Work Environment and workplace hazards
• Adequacy in staff members records and Know Your Employee
• Adequate risk mitigation in product support processes
5 Product
• Products in alignment with regulatory compliance and defined risk appetite
• Business Continuity Plan
6 Contingency Planning • Disaster Recovery Plan
• Operation during Disaster
• Adequacy in security arrangements and alarm system
• Adequacy in protection measures for physical assets
• Adequacy in protection of Information
7 Security and Protection
• Adequacy in protection of intellectual property of the Bank
• Adequacy in protection measures against cyber threats
• Adequacy in staff members security and control of work place hazards
• Service Delivery
8 Reputation • Customer Complaints
• External Environmental threats to reputation
• Audit Plan
9 Audit • Adequacy of Audit
• Issues raised by Audit
• Adequate assessment of Operational risk by Units/ Departments/ Branches
10 Risk Assessments • Adherence to Operational Risk Management Policies and Guidelines
• Key Control Self-Assessment
• Adherence to prescribed Accounting Standards
11 Finance • Assets/ liabilities reconciliation
• General Ledger reviews and accuracy

2. Key Control Self-Assessment (KCSA) • Funding liability risk is the risk that the financial institution
is unable to settle obligations when due without seriously
Key Control Self-Assessments is checks used by functional
affecting either its daily operations or financial condition.
supervisors to ensure that the controls designed for mitigation
Funding liquidity risk derives from a maturity gap
of Operational Risk are duly adhered to. The other outcomes
between assets and funding, resulting from the maturity
of KCSA are weather the controls are adequate in the given
transformation embedded in commercial banking business
operating environment, identification of internal and external
issues that may result in Operational Risk events and weather • Market liquidity risk is the risk that a financial institution
the given controls are effective. cannot easily cover its liquidity needs by liquidating
a position through securities lending or selling at the
The Integrated Risk Management Department facilitates market price because of inadequate market depth, price
carrying out of KCSA on a periodic frequency according to the deterioration or market disruption. Market liquidity risk
nature of control standard and risk indicator. The operation risk materializes in asset and derivative markets
reporting also includes components of KCSA.
• Funding cost risk is the risk that a financial institution can
3. Key Risk Indicators (KRIs) replace maturing funding only at higher costs to fund its
assets.
The major objective of KRIs is to enable the Bank to identify
current risk exposure and emerging risk trends, highlight
FUNDAMENTALS PRINCIPLES ON
control weakness and allow for the strengthening of poor
controls and facilitate the risk reporting and escalation process.
LIQUIDITY RISK MANAGEMENT
The Bank establishes comprehensive and robust liquidity
The Integrated Risk Management Department on periodic basis
or as and when required but atleast once a year, updates the management framework which commensurate with the
KRIs based on the Control Standards and Risk Assessments. complexity of its on and off balance sheet activities, the
The KRIs monitors within assigned frequency and is an integral liquidity of its assets and liabilities, the extent of its funding
part of the risk reporting of the Bank. mismatches and the diversity of its business mix and funding
strategies and ensure maintenance of sufficient liquidity,
MARKET & LIQUIDITY RISK cushion of unencumbered high quality liquid assets to
withstand a range of stress events, including those involving
Market risk is defined as the risk of losses resulting from the loss or impairment of both secured and unsecured funding
movements in market price that adversely affect the value of
source.
on-and-off balance sheet positions of financial institutions.
Financial institutions may be exposed to market risk in a The Bank’s liquidity risk management framework is well
variety of ways. Market risk takes various forms; integrated into the Bank-wide risk management process with
• Foreign exchange risk, commodities risk throughout the a primary objective of ensuring a high degree of confidence
institution that the Bank is in position to both address its daily liquidity
obligations and withstand a period of liquidity stress affecting
• Position risk arising from interest rate related financial
instruments and equities (both cash and derivatives) both secured and unsecured funding, source of fund.
• Concentration risk in the trading book as well as in the The Bank uses conservative assumptions about the
banking book. marketability of assets and its access to funding, both secured
Liquidity risk is the risk that a financial institution losses its and unsecured, during the period of stress. Moreover, the Bank
ability to fund its assets or to meet its obligations as they does not allow any competitive pressure to compromise the
come due without unacceptable cost or losses. Liquidity risk integrity of its liquidity risk management, control functions,
encompasses various aspects; limit systems and liquidity cushion.
• Intraday liquidity risk is the risk the financial institution

becomes unable to settle its financial obligations in due
time during the day

INDICATOR OF LIQUIDITY RISK e. The Bank actively manages its collateral positions,
differentiating between encumbered and unencumbered
Liquidity risks are identified with the help of following non assets. It also monitors the legal entity and physical
exhaustive lists: location where collateral is held and how it is mobilized in
timely manner.
Rapid asset growth, especially Repeated incidents of positions
when funded with potentially volatile approaching or breaching internal or
liabilities regulatory limits f. The Bank conducts stress tests on a regular basis for a
variety of short term and long term institution specific and
Decrease in weighted average maturity
Increase in currency mismatch
of liabilities market wide stress scenarios to identify sources of potential
liquidity strain and to ensure that current exposures remain
Growing concentration with assets
Negative Publicity in accordance with the Bank’s established liquidity risk
and liabilities
tolerance. The Bank uses stress test outcome to adjust its
Negative trends or heightened risk Significant deterioration in the Bank’s
liquidity risk management strategies, policies and positions
associated with a particular product earnings, asset quality and overall
line financial condition and to develop effective contingency plans.
Sharp stock price decline or rising debt
Credit rating downgrade
costs g. The Bank has a formal Contingency Funding Plan (CFP)
approved by Assets Liability Committee (ALCO) that clearly
Extension of credit Increasing retail deposit outflows sets out the strategies for addressing liquidity shortfalls in
emergency situations. The CFP also outlines the procedures
to maintain a range of stress environments, establish
PRINCIPLES FOR MEASUREMENT AND clear lines of responsibility, include clear invocation and
escalation procedures and be regularly tested and updated
MANAGEMENT OF LIQUIDTY RISK
to ensure that it is operationally robust.
a. The Bank has a sound process for identifying, measuring,
monitoring and controlling liquidity risk. The process h. The Bank maintains a cushion of unencumbered, high
includes a robust framework for comprehensively quality assets to be held as insurance against a range of
projecting cash flows arising from assets, liabilities and liquidity stress scenarios, including those that involve the
off-balance sheet items over an appropriate set of time loss or impairment of unsecured and typically available
horizons. secured funding sources.
b. The Bank actively monitors and controls liquidity risk

DISCLOSURE PRINCIPLE
exposures and funding needs within and across business
lines and currencies, taking into legal, regulatory and The Bank publically disclose reports, ratios and other
operational limitations to the transferability of liquidity. information on regular basis as stipulated by applicable laws
and directives that enable market participants to make an
c. The Bank has established a funding strategy that provides informed judgment about the soundness of its liquidity risk
effective diversification in the sources and tenor of the management framework and liquidity position.
funding. It maintains an ongoing presence in its chosen
funding markets and strong relationships with funds
providers to promote effective diversification of funding
FUNDAMENTAL PRINCIPLES OF MARKET
sources. The Bank regularly gauges its capacity to raise RISK
funds quickly from each source. It identifies the main Market risk is the risk of losses on balance sheet and off
factors that affect its ability to raise funds and monitor balance sheet positions arising from movement in value of the
those factors closely to ensure that estimates of fund market risk factors.
raising capacity remain valid.
The major constituents of market risk are;
d. The Bank actively manages its intraday liquidity positions
and risk to meet payment and settlement obligations on
a timely basis under both normal and stressed conditions
and thus contribute to the smooth functioning of payment
and settlement systems.

• Interest Rate Risk • Equity Risk

Interest rate risk is measured by using re-pricing risk The Bank measures equity risk by preparing monthly exposures
management model and stress testing model. Re-pricing risk in equity and by stress testing. Monthly exposures in equity
management model is designed to measure adverse impact are calculated by using various structured tables. Stress
if interest rate changes by, say 2.5% p.a. (volatility rate), so as testing is also a tool to measure and manage equity risk of the
to allow management plan and maintain/grow its profitability Bank’s portfolio to some extent. Under stress testing, various
accordingly. Stress testing is a tool to measure and manage scenarios are developed, and the potential shocks on capital
interest rate risk of the Bank to some extent. Under stress adequacy (CAR), etc. are measured. Equity risk is measured
testing, various scenarios are developed on the potential on portfolio basis and segregated as per the investment/
shocks on the capital adequacy ratio (CAR), and impact on total equity category, such as, held for trading, available for sale,
cost aftershock is measured. and held to maturity. Equity risk in case of investment in non-
listed companies shall be assessed through periodic review
Re-pricing the Risk Measurement Table as per re-pricing of financial performance. Apart from the above, equity risk
management model is prepared on monthly basis by Finance is calculated by using fundamental analysis and technical
and Accounts Department, and review and monitoring of the analysis.
impact on Net Interest Income (NII) is carried out by Treasury
Middle Office. Finance and Accounts Department also prepares Monitoring of equity risk is done by Treasury Middle Office
stress testing/MIS report on a monthly basis. The results are by reviewing the Equity Risk Table showing the exposures in
put up at least monthly in the ALCO meeting, which monitors equity prepared by Finance and Accounts Department on a
the same. monthly basis. Monitoring of equity risk is also being done by
Treasury Middle Office by reviewing stress testing, MIS report
• Currency & Commodity Risk (equity risk) prepared by Finance and Accounts Department on
Currency and commodity risk is measured by adopting Net a monthly basis. Any anomaly is reported at the ALCO meeting
Open Position approach and stress testing. The net open for discussion and deliberation.
foreign currency position is the difference between the total
open long (receivable) and the total open short (payable)
positions in a given currency held by the Bank. Stress testing is
also a tool to measure and manage exchange rate risk of the
Bank to some extent. Under stress testing, various scenarios
are developed, and the potential shocks on capital adequacy Interest
(CAR) etc. are measured.
Rate Risk
The Net Open Position Measurement Table, as per net open
position approach, and the Table for Measurement of Stress
Testing (exchange rate risk), are prepared by Finance and
Accounts Department and monitored by Treasury Middle
Office on a monthly basis. The MIS report as prepared, along Currency & Equity
with comments (if any), is put up at least once a month in the Commodity Risk
ALCO meeting for discussion and deliberation. In case of any
Risk
perceived potential issue, as depicted by net open position
on account of exchange rate fluctuation, ALCO formulates
internal control and strategies as appropriate.
Management of currency and commodity risk is also being

done by hedging. Hedging is a risk management strategy used
in limiting or offsetting probability of loss from fluctuations in
the prices of commodities and currencies. In effect, hedging is
a transfer of risk without buying insurance policies.

4.2 STATEMENT OF CAPITAL ADEQUACY
Capital is a prime factor to consider when assessing the safety The Bank has formulated and implemented Internal Capital
and soundness of a bank. It acts as a cushion in case the value Adequacy Assessment Process 2018 (ICAAP 2018), which
of the bank’s assets decline and liability rises. Maintaining a has been approved by the Board of Directors. ICAAP 2018 is
minimum capital level is of paramount importance for a bank a system of sound, effective, and complete strategies and
so that adequate protection against risk can be ensured. A processes that allow the Bank to assesses and maintain on an
strong capital management policy protects an organization ongoing basis the amounts, types, and distribution of internal
by identifying and mitigating risks, besides establishing the capital that the Bank considers adequate to cover the nature
confidence of depositors, creditors, and other stakeholders. and level of risk to which the Bank is or might by exposed to.
Capital adequacy gives a view on a bank’s financial strength
ICAAP 2018 shall also include requirement to have robust
and stability.
governance arrangements, efficient process of managing
Capital adequacy is a basis for measurement of the amount all material risks, and an effective regime for assessing and
of capital that the bank needs to hold to ensure that no maintaining adequate and economic capital at the Bank, where
excess leverage is taken that would lead to insolvency. Capital economic capital (economically needed capital) refers to the
adequacy is best expressed as Capital Adequacy Ratio (CAR), amount of capital required for the Bank’s business operations
also known as Capital to Risk Weighted Assets Ratio. CAR is a and for financing the associated risks.
measure of a bank’s eligible capital expressed as a percentage
ICAAP 2018 shall provide policy and procedural guidelines for
of its risk weighted asset. The objective of CAR is built around
the calculation of internal capital adequacy by prescribing
market discipline, whereby depositors get a standardized
appropriate methodologies, techniques, and procedures to
measurement on the extent to which their wealth is exposed
assess the capital adequacy requirements in relation to the
to risk, and thereby establish confidence on the financial
Bank’s risk profile and effectiveness of its risk management,
institution’s operations. The CAR measurement is also directed
control environment, and strategic planning.
towards making a bank’s capital more risk sensitive and shock
absorbent. The Board shall be primarily responsible for ensuring the current
and future capital needs of the Bank in relation to strategic
The Basel III document of the Basel Committee requires banks
objectives. The management shall review and understand the
to comply with the following:
nature and level of various risks that the Bank is confronting
• Banks should have in place a process for assessing their in the course of different business activities, and how this risk
overall capital adequacy in relation to their risk profile and a relates to capital levels, and accordingly implement sound risk
strategy for maintaining their capital levels. management framework specifying control measures to tackle
• Banks should operate above the minimum regulatory each risk factor.
capital ratios. To achieve the long-term plans, the Bank prepares annual
Internal Capital Adequacy Assessment Process Guideline 2012 budgets/ operating/ tactical plans as stipulated in the budget
(updated July 2013) issued by Nepal Rastra Bank requires banks policy and strategy document of the Bank. To ensure that the
and financial institutions to develop their own internal policy, Bank’s capital adequacy is commensurate to the demand of the
procedures, and structure to manage the risk inherent in their Bank’s capital required by business planning, the management
business. Banks should report if there are any changes made and the Board prudently and proactively engage on ongoing
in the previous ICAAP or its outcome within three months of process of capital and risk assessment, stress testing and
fiscal year end. scenarios testing, monitoring, and reporting as per ICAAP 2018.
The Bank has also formulated and implemented Stress Testing

Guidelines 2018 in order to assess of the vulnerability of the maintain minimum Capital Adequacy Ratio of 11%.
Bank under various stress situations, typically, application of
During FY 2017/18, the Bank prepared the statement of capital
“what if” scenarios, especially in the problematic identification
fund as stated in schedule 1.1 of Capital Adequacy Framework,
of low frequency but high severity events, and identifying
2015 on the basis of the financial statements at the last day
expected and unexpected losses. It focuses on capturing the
of every month and submitted the same to the Banks and
impact of large but still plausible events, and understanding
Financial Institutions Regulation Department and concerned
the overall risk profile in a coherent and consistent framework,
supervision department of Nepal Rastra Bank within 15 days
including impact analysis on earnings, solvency, and liquidity.
from the date of completion of every month, getting them
Stress testing of the Bank also includes macroeconomic authenticated by the internal auditors. Also, the Bank has
environment of the country and its impact in the Bank’s uploaded the quarterly statement of Capital Adequacy Ratio
business, as well as entire key risk areas and functions of the and report on Internal Capital Adequacy Assessment Policy on
Bank, as far as data availability and resources permit, having the Bank’s website www.nicasiabank.com.
ultimate impact on the capital adequacy of the Bank.
DETAILS OF CAPITAL ADEQUACY RATIO
A formal monitoring and reporting mechanism has been
Risk Weighted Exposures for credit risk, market risk and
established to provide the senior management necessary
operational risk (Risk Exposure):
information on the risk profile, trends, and capital requirements
(Amount in Million)
as per ICAAP 2018 and Stress Testing Guidelines 2018. Such
Risk Weighted Exposure 16-Jul-19 16-Jul-18
reports are being prepared on a monthly and quarterly basis
and circulated to relevant business units/departments, a. Risk Weighted Exposure for Credit Risk 154,507.09 118,625.31
Integrated Risk Department (IRMD), and tabled in Assets b. Risk Weighted Exposure for Operational Risk 5,686.33 4,066.90
Liability Committee (ALCO) meeting. Further quarterly reports c. Risk Weighted Exposure for Market Risk 117.55 117.55
are presented to the Risk Management Committee and the d. Adjustments under Pillar II
Board for review and discussions. ALM policies & practices are not satisfactory, add
160.74 104.84
3% of gross income to RWE
The Bank has determined and implemented Capital Adequacy 2% adjustment on Total RWE 3,206.22 2,456.20
Ratio of 0.5% more than that required by the regulatory Total Risk Weighted Exposures (After Bank's
163,677.93 125,370.80
adjustments of Pillar II)
body as a prudent measure of the Internal Capital Adequacy
Assessment Policy (ICAAP). This has provided assistance in
Tier I Capital and its breakdown of components
maintaining shock absorption capacity of the Bank at higher
level during the time of probable ups and downs of the Bank. Particulars 16-Jul-19 16-Jul-18
Paid up Equity Share Capital 8,834.23 8,031.12
REPORTING OF CAPITAL ADEQUACY Proposed Stock Dividend - -
As per Unified Directive No. 1 issued by Nepal Rastra Bank, Statutory General Reserves 2,429.81 1,825.15
the Bank is required to maintain minimum capital fund based Retained Earnings 2,112.88 943.65
on total risk-weight assets as prescribed by Capital Adequacy Capital Redemption Reserve 416.67 285.71
Framework-2015 issued by Nepal Rastra Bank. The Bank is Less:
required to maintain the prescribed ratio of capital adequacy Intangible Assets (110.49) (22.97)
at all times. Further, the Bank is required to prepare statement Investment in equity of institutions with financial (200.00) (200.00)
as to capital fund as stated in schedule 1.1 of Capital Adequacy interests
Framework, 2015 on the basis of the financial statements on Core Capital (A) 13,483.10 10,862.66
the last day of every month. Those statements are required

Tier II Capital and its breakdown of components
to be sent to the Banks and Financial Institutions Regulation
Department and concerned supervision department of Nepal
Particulars 16-Jul-19 16-Jul-18
Rastra Bank within 15 days from the date of completion of
Cumulative and/or Redeemable Preference Share - -
every month, having them authenticated by internal auditors.
Subordinated Term Debt 6,741.55 3,200.00
In the rare event of failure to send them unaudited, the same
General loan loss provision 1,484.28 1,204.73
will have to be mentioned in the monthly statement. However,
Exchange Equalization Reserve 39.01 38.37
such statements at the end of the quarter must be submitted
Investment Adjustment Reserve 56.20 44.24
after getting them authenticated by the internal auditors. As
Supplementary Capital (B) 8,321.04 4,487.35
per Capital Adequacy Framework-2015, the Bank is required to

Particulars 16-Jul-19 16-Jul-18
Total Capital Fund (A+B) 21,804.14 15,350.01
Capital Adequacy Ratio (Total Capital Ratio) 13.32% 12.24%
Details of Capital Adequacy Ratio during the FY 2018-19
Quarter Ending Capital Adequacy Ratio (CAR)
First Quarter (mid October 2018) 12.48%
Second Quarter (mid January 2019) 11.97%
Third Quarter (mid April 2019) 13.10%
Fourth Quarter (mid July 2019) 13.32%
Capital Adequacy Ratio (CAR) of this Bank can be seen to be comfortably above the minimum CAR of 11% prescribed by Nepal Rastra
Bank and the minimum CAR of 11.5% as required by the Internal Capital Adequacy Assessment Policy (ICAAP).
W W W. N I C A S I A B A N K . CO M

4.3 STATEMENT ON NON

PERFORMING LOAN MANAGEMENT
A non-performing loan (NPL) is a sum of borrowed money upon This policy provides for the determination of approving limit on
which the debtor has not made the scheduled payments for a the basis of qualification, experience, job grade, and position,
specified period. A non-performing loan (NPL) is considered in etc, of the employees, which helps to lower the risk of default
default, or close to default. Management of NPL is a biggest on repayment of loans.
challenge faced by the banks and financial institutions in the
Credit Risk Management Policy of the Bank provides for various
present days.
duties and responsibilities of the Credit Risk Management
As per the directives issued by Nepal Rastra Bank, NPL is Department, Loan Recovery Department, and segment
categorized as follows: heads in case of NPL reaching trigger level. This policy also
provides for various processes and procedures and duties and
• Sub-standard: Loans/advances which are overdue by a
responsibilities of various departments and personnel for the
period from three months to a maximum period of six
management of credit risk. Credit risk management cycle of the
months.
Bank provides for sound practices in:
• Doubtful: Loans/advances which are overdue by a period
• Credit Business Sourcing
from six-months to a maximum period of one year.
• Credit Appraisal
• Loss: Loans/advances which are overdue by a period of
more than one year. • Credit Approval
The Bank is committed to maintain a lower rate of NPL. The • Credit Administration - Credit Documentation –
Bank has formulated and implemented integrated credit policy, Disbursement
integrated policy for collection and recovery of loans, and non-
• Monitoring and Control
banking assets management policy, credit risk review policy,
and credit risk management policy, which help the Bank to • Credit Classification
define standard process and procedure for NPL management.
• Managing Problematic Credits/Recovery
The Credit Risk Management Department also independently
reviews the credit files to minimize the risk of default and to The policy for collection and recovery of loans prescribes
maintain a lower NPL rate. Reflection of non-performing loans following measures to prevent the loans from becoming non
(NPL) also tarnishes image of the Bank, and Bank comes under performing loans:
surveillance of regulatory bodies, and even by its customers.
Thus, recovery of NPL is a major concern for the Bank. • Close monitoring during validity repayment period of the
Therefore, the Bank has given maximum emphasis to prevent loan
transformation of regular loan to NPL and recovery of NPL to • Early warning signals and monitoring of its early stage.
increase its profitability and quality of assets.
• Gearing up follow-up right from the initial stage of its
The integrated credit policy of the Bank defines the provisions default/non-payment of installments / interest.
related to the maintenance of relationship with customers,
review of proposal based on requirement of fund, repayment • Understanding reasons of non-payment to avert the
capability, and adequacy of collateral and securities, etc., as well problem.
as periodic review and analysis of the loan after disbursement. • Constant follow- up with default borrowers.
This policy also provides for restriction and limitations
for providing loans to risky areas like loans to relatives of • Taking effective steps to save the loan from becoming NPL.
employees and directors, loans in some specified areas, etc.

This policy also provides the process and procedures to defaulting borrower, and legal recovery actions, including
be followed by the Loan Recovery Department, concerned takeover of the properties as NBA in the Bank’s name, filing
branches and RMs, Collection Unit, Deteriorating Credit recovery suit with DRT/Court, and other recovery actions.
Management Unit, and Core Recovery Unit, in case of default
The Bank’s non-performing assets ratio stood at 0.46% as at
in repayment of loans. These procedures include reminding
the balance sheet date. Gross total non-performing assets as
the customers through text, call, emails, collection letters,
on end of FY 2018-19 was NPR 690 million while a net non-
and personal visits, publishing 35 days’ notice in national
performing asset was NPR 345 million.
newspaper, vehicle/equipment repossession process, auctions
procedures, and revaluation of securities, blacklisting of the
(Amount in ‘000)
Gross NPA Net NPA
Particulars
Current Year Previous Year Change Current Year Previous Year Change
Restricted/Reschedule Loans - - - - - -
Sub Standard Loans 425,965 12,384 413,581 319,474 9,288 310,186
Doubtful Loans 50,482 4,861 45,621 25,241 2,431 22,810
Loss 213,955 66,886 147,069 - - -
Total NPAs 690,402 84,131 606,261 344,715 11,719 332,996
NPL Ratios
Gross NPL to Gross Loans & Advances 0.46%
Net NPL to Net Loans & advances 0.23%
TREND ANALYSIS OF NPL

0.76 NPL Ratio (%)
0.46
0.36
0.07
2015/16 2016/17 2017/18 2018/19

4.4 REPORT ON GOING CONCERN

An entity prepares financial statements on a going concern Capital Adequacy Ratio (CAR) of the Bank was comfortably
basis when, under the going concern assumption, the entity above the minimum CAR of 11% prescribed by Nepal Rastra
is viewed as continuing in business for the foreseeable future. Bank and the minimum CAR of 11.5% as required by the
The concept of going concern is n underlying assumption in the Internal Capital Adequacy Assessment Policy (ICAAP) during
preparation of financial statements, hence it is assumed that the review period.
the entity has neither the intention, nor the need, to liquidate
or curtail materially the scale of its operations. If management The Bank has established itself as a platform for
concludes that the entity has no alternative but to liquidate or development of skills, knowledge, and capacity of
curtail materially the scale of its operations, the going concern employees, and various activities have been performed to
basis cannot be used and the financial statements must be ensure that the culture of gaining knowledge is developed
prepared on a different basis. among employees.
The material factors supporting the Bank’s ability to operate as The Bank has implemented robust internal control and
a going concern are as under: corporate governance by forming and implementing various
policies and guidelines.
NIC ASIA Bank is the Nepal’s Largest Private Sector
Bank with 292 branches, 302 ATMs and employing 3,472 The Bank is focused on complying with various rules,
personnel. regulations, policies, and guidelines of the regulatory
bodies and prevailing laws and regulations. The Bank also
The Bank earned operating profit of NPR 4.51 billion and focuses on timely and adequate reporting and transparent
net profit of NPR 3.02 billion during the review year which disclosure.
is increment of 135% and 126% respectively.
The Bank is committed to work towards the development
The Bank’s total deposits increased by 19% to reach NPR and well-being of society and protection of environment
180.58 billion and total loans and advances reached NPR and ecological balance. The Bank was involved in various
150.11 billion with increment by 24% during the review year. social service activities during the review period.
As compared to last year, Bank’s investment increased from The Bank has very healthy relationship with its lenders,
NPR 14. billion to NPR 19.36 billion. banking partners, suppliers, and vendors.
The total assets increased by 27% to reach NPR 217.70

billion from NPR 170.94 billion from last year.
Earning per share increased to NPR 34.22 from 16.62.
The bank was successful in opening 525,039 new deposit

accounts to reach 1,604,718 as on the end of review year.
For the review period, the bank has proposed dividend of

21.0526% (10% bonus share and 11.0526% cash) out of its
profit.

LOAN PRODUCTS
FAST TRACK
BUSINESS
LOAN
PRIORITY
BUSINESS LOAN
PREMIUM
BUSINESS
LOAN
EMPLOYER’S
OVERDRAFT
LOAN
AUTO
LOAN
EDUCATION
LOAN
PERSONAL
LOAN
LOAN AGAINST
MORTGAGED
PROPERTY
COMMERCIAL
AGRICULTURAL
AND LIVESTOCK
LOAN
DEPRIVED
SECTOR
LOAN

NIC ASIA Network of
Capital NIC ASIA Bank
SUSTAINABILITY
5.1 Sustainability Banking................................................... 212

5.2 Corporate Social Responsibility................................ 213
5.3 Value Added Statements.............................................216
5.4 Statement on Contribution To Economy............. 220

5.1 SUSTAINABILITY BANKING

Sustainable Banking integrates environmental, social to such movements as the fair trade movement, ethical
and governance criteria into traditional banking and sets consumerism, and social enterprise.
environmental, social and governance benefits among its
objective. The sustainable banking movement includes: Banks being the biggest lender to society, NIC ASIA is morally
ethical investment, impact investment, socially responsible committed towards sustainable banking with stress on social
investment, corporate social responsibility, and is also related and environmental values.
NIC ASIA focuses on following issues for sustainability banking:
Food and Women Economic

Agriculture Empowerment
Poverty
Alleviation
& Education Energy
ISSUES
ON
SUSTAINABILITY
Waste BANKING Waste
Consumption Management
Climate Change Human & Labour

& Green Facilities Rights

5.2 CORPORATE SOCIAL RESPONSIBILITY
NIC ASIA Bank being a corporate citizen is responsible towards The Bank is not only liable for its customer, employees and
the environment, consumers, employees, communities and investors, also to the environment it survives. So, the Bank is
all other various stakeholders and like a responsible citizen committed to work for the betterment of the society to make
encourages a positive impact with its activities. It is a duty of the world a better place to live.
the Bank, to benefit the society in which it exists.
The Bank has contributed towards corporate social
Like stated, “Business is subset of society”, the society can responsibility in the following major sectors:
survive without business but the business shall fail without
society. A business is obligated to fulfill its social responsibility Environment Society
because it will fail to exist without a society. Health Education
ENVIRONMENTAL CONTRIBUTION
• Plantation program across the nation was organized with active participation of our employees of
various branches, department, provincial and sub-provincial offices.
• The Bank has made some progress for paperless workplace with minimization in use of papers in office.
CONTRIBUTION FOR HEALTH
• Conducted various blood donation programmes across branches, departments, provincial and sub-
provincial offices.
• Conducted health camps
CONTRIBUTION FOR EDUCATION
• Donation of computers to government schools.
• Conducted various educational programmes.

SOCIAL CONTRIBUTION
• Donation of facilities equipped ambulance to Nepal Police to provide fast and efficient service for needy.
• Contribution in development of park
• Financial Literacy Programme to literate citizens about needs and importance of banking facilities.
• Donation of bio toilet to Pashupati Development Board to facilitate pilgrims.

As a responsible corporate citizen of the country, the Bank has been involved in contributing
to the society in various ways as a part of its Corporate Social Responsibility (CSR). In order to
promote and focus on CSR activities the Bank has established a charitable foundation called
NIC ASIA Foundation. The Bank has committed to pledge 1% of its net profit every year to the
NIC ASIA Foundation for promoting various CSR related activities. In the past, the NIC ASIA
Foundation has carried out various activities including, but not limited to, distributing disaster
relief packages to the victims of various disasters, contributing to the Prime Minister Relief
Fund, organizing health camps, organizing blood donation camps, providing support to old
age homes and orphanages, providing scholarships to the needy students, etc. A significant
number of people have been benefitted, directly or indirectly, by the activities carried out by
the Foundation. The Foundation plans to continue the same in the future as well.

5.3 VALUE ADDED STATEMENTS
VALUE ADDED STATEMENT

Value added statement depicts wealth created and how the created wealth is distributed among various stakeholders; employees,
government, providers of capital, expansion and growth of the organization. Value added is the profit generated by the collective
efforts of management, employees, capital and the utilization of capacity that is distributed among its various stakeholders.
Value added by the Bank stood at NPR 7,121 million as on end of 2018-19
For the year ended 16 July 2019
2018-19 2017-18
Particulars
NPR million % NPR million %
Add: Income From Banking Service
Net Interest Income 6,960 98% 4,210 113%
Net Commission and Operating Income 2,121 30% 870 23%
Net Trading Income 349 5% 195 5%
Other Operating Income 76 1% 84 2%
9,506 5,359
Less: Cost of Service or Supplies
Operating Expenses 1,713 24% 1,237 33%
Value added by Banking Service 7,793 4,122
Add/(Less): Non-Banking Income/(Expense) (73) -1% (107) -3%
Less: Provision
Impairment charge for loans and other losses 599 8% 305 8%
Total Value Added 7,121 3,710
Application of Value Added

2018-19 2017-18
Application
NPR million % NPR million %
To Employees
2,477 35% 1,782 48%
as Salaries and Allowance
To Government
1,417 20% 476 13%
as Corporate Tax
To Providers of Capital
1,860 26% 845 23%
as Dividend (bonus share and cash)
To Expansion & Growth

as Depreciation 204 3% 116 3%
as Retained Earning 1,163 16% 491 13%
7,121 100% 3,710 100%

13%
Retained Earning
16%
Retained Earning
3%
Depreciation
3% 35%
Depreciation Salaries and
Allowance
FY 2018-19 23% FY 2017-18

Dividend
48%
Salaries and
Allowance
26%
Dividend
13%
20% Corporate
Corporate Tax
Tax
Total Value Added by the Bank (NPR million) 7,121 3,710
Number of employees at the end of year 3,472 2,291
Total number of shares (million) 88.34 80.31
Value Added per employee (NPR million) 2.05 1.62
Value Added per share (NPR) 80.61 46.20
MARKET VALUE ADDED STATEMENT

Market value is the difference between the market value of the company and total book value
The Bank has market value added of NPR 24,640.32 million.
Total number of shares (A) (million) 88.34 80.31
Price per Share (B) (NPR) 448 316
Total Market Value (C=A*B) (NPR million) 39,576 25,377
Total Book Value (D) (NPR million) 14,936 11,670
Market Value Added (C-D) (NPR million) 24,640 13,707

2017/18 2018/19
11,670
Total Book
Value 14,936
25,378
Net Market
Value 39,576
13,708
Market Value
Added 24,640
ECONOMIC VALUE ADDED

Economic Value Added is the calculation of the Bank’s performance over and above the expected return of shareholders for investing
in the Bank. Expected return consists of risk-free return and risk premium for investing in the Bank.
During the review period, the Bank has generated Economic Value Added of NPR 1,529 million.
Net Profit (A) (NPR million) 3,023 1,335
Total Shareholders Fund (B) (NPR million) 14,936 11,670
Cost of Equity* (C) 10% 10%
Cost of Capital (D=B*C) 1,494 1,167
Economic Value Added (A-D) (NPR million) 1,529 168
Total number of shares (million) 88.34 80.31
EVA per share (NPR) 17.31 2.09

1529
FY 2018-19
ECONOMIC
VALUE ADDED
168
FY 2017-18
* Cost of Equity has been assumed to be 10%, slightly higher than

the return on government bonds by considering the different
between the cost of equity and return on government bonds to be
risk premium.
EVA PER
SHARE
(NPR)
17.312018-19
2.09
2017-18

5.4 STATEMENT ON CONTRIBUTION TO ECONOMY
CONTRIBUTION THROUGH TAX promoting cashless economy, and enhancing financial access.
NIC ASIA being an ethical and legitimate corporate citizen
Government is the most important stakeholder in economic contributes to the government exchequer when the necessary
well being of the nation. For the sustainability of the nation, amounts fall due.
taxation plays the vital role. NIC ASIA Bank is committed to
facilitate the nation in every possible way. The Bank has been NIC ASIA Bank has made contribution to the government
pivotal on Government’s objective of every citizen’s bank exchequer of NPR 2.51 billion during the review year. The
accounts. Being a responsible corporate citizen, the Bank amount consists of NPR 1.4 billion in the form of income tax
has ensured its noteworthy contribution in national goals and NPR 1.11 billion in the form of tax deducted at source
like raising living standard of deprived sector, supporting
in employment creation, increasing tax/revenue collection, .
The table below shows the Bank’s contribution during last three years;
TDS Income Tax Total 2.51

(Amount in billion)
1.4 1.4
1.08 1.11
0.92
0.62
0.46 0.48
2016/17 2017/18 2018/19
While the Bank’s direct contribution to government exchequer to either set up the business or expand the horizon of their
is clearly visible but it can be assumed the indirect contribution business, and in return the government is benefited through
which is not in figure to be even higher. The Bank’s loans and taxes.
advances has helped large corporate to start up businesses;

CREATION OF EMPLOYMENT The Bank’s Deprived Sector Lending is focused on less
fortunate sectors. In recent years, the Bank is continuously
The Bank as on the end of review period directly employs 3,472 increasing the DSL banking and the people are largely
peoples, with the increasing branches, extension counters benefitted with the services. During the review period Bank’s
and the business of the Bank in coming days the number of DSL was NPR 13.42 billion, the last year it was NPR 9.31 billion.
employees are expected to further increase.
With the Bank’s increasing Deprived Sector Lending, it has been PIONEERING CASH LESS ECONOMY
able to help people create, expand their businesses. Indirectly
With various digital payment channels, NIC ASIA Bank is
the Bank is making huge impact on creation of employment
encouraging people to go cash less. Digital Transaction
with its easy lending facilities. Corporate financing and Project
helps in eliminating black money as the every payment and
financing are equally creating huge number of employment
receipt are traceable. The Bank is providing attractive features
opportunities and the NIC ASIA Bank feels proud to investment
and discount to encourage people to use digital channel.
in these employments generating business.
Continuous update according to the customers’ needs in the
Mobile Banking app and its user friendly interface is attracting
BANKING FACILITIES TO THE DEPRIVED the customer to use the digital channels. Also, the Bank’s ATM
card service is very quick. Customers making payment through
NIC ASIA Bank has its footprint from financial hubs to the
POS, QR code are provided attractive discounts. In a journey
remote areas of the nation. The Bank is able to provide easy
towards zero black economy, NIC ASIA is encouraging cash
access of banking services in remote areas through expansion
less transactions through various benefits and services.
of branches or branchless banking. During the review year,
NIC ASIA opened 13 branches in remote places of 11 remote
districts so that every citizen can get banking facilities. The
Bank is committed to provide its services to all of people from
cities to villages.

AUDITED
FINANCIAL
STATEMENT
OF
NIC ASIA
BANK
6.1 Independent Auditor's Report............................... 224
6.2 Financial Statement.................................................... 226

6
6.1 INDEPENDENT AUDITOR'S REPORT

6.2 FINANCIAL STATEMENT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As on 31 Asar 2076 (As at 16 July 2019)
Amount in NPR
GROUP BANK
Note As at As at As at As at
16 July 2019 16 July 2018 16 July 2019 16 July 2018
ASSETS
Cash and cash equivalent 4.1 20,485,247,232 8,173,703,208 20,214,540,268 8,132,486,809
Due from Nepal Rastra Bank 4.2 16,097,915,246 15,860,733,092 16,097,915,246 15,860,733,092
Placement with Bank and Financial Institutions 4.3 383,950,000 313,929,191 383,950,000 313,929,191
Derivative financial instruments. 4.4 7,006,010,607 1,266,017,586 7,006,010,607 1,266,017,586
Other trading assets 4.5 175,793,419 9,713,375 7,440,000 9,652,500
Loan and advances to B/FIs 4.6 5,423,285,128 4,008,145,235 6,923,285,128 4,658,145,235
Loans and advances to customers 4.7 147,049,664,210 116,625,120,722 142,574,005,954 115,804,620,907
Investment securities 4.8 18,320,559,017 14,304,768,273 18,152,959,017 14,132,768,273
Current tax assets 4.9 - - - -
Investment in susidiaries 4.10 - 1,204,500,000 270,000,000
Investment in associates 4.11 - - - -
Investment property 4.12 275,938,557 74,382,923 275,938,557 74,382,923
Property and equipment 4.13 2,620,265,206 1,784,405,723 2,583,719,788 1,759,424,471
Goodwill and Intangible assets 4.14 113,483,110 52,705,510 110,490,299 49,831,991
Deferred tax assets 4.15 - - - -

Other assets 4.16 2,178,396,222 8,619,224,803 2,162,294,264 8,611,184,848
Total Assets 220,130,507,955 171,092,849,642 217,697,049,129 170,943,177,826
Note Current Year Previous Year Current Year Previous Year
LIABILITIES
Due to Bank and Financial Instituions 4.17 10,236,897,443 11,728,515,665 8,535,646,475 11,629,507,290
Due to Nepal Rastra Bank 4.18 314,541,457 742,269,472 314,541,457 742,269,472
Derivative financial instruments 4.19 6,913,408,934 1,721,813,609 6,913,408,934 1,721,813,609
Deposits from customers 4.20 177,374,678,093 139,578,561,246 176,820,688,914 139,589,607,845
Borrowing 4.21 - - - -
Current Tax Liabilities 4.9 242,944,821 25,025,507 242,944,821 25,025,507
Provisions 4.22 - - - -
Deferred tax liabilities 4.15 175,040,445 2,799,908 178,272,826 2,814,629
Other liabilities 4.23 2,099,866,079 2,125,162,751 2,045,713,090 2,073,775,098
Debt securities issued 4.24 7,710,097,099 3,487,908,815 7,710,097,099 3,487,908,815

Subordinated Liabilities 4.25 - - - -
Total Liabilities 205,067,474,371 159,412,056,972 202,761,313,616 159,272,722,265

Amount in NPR
GROUP BANK
Note As at As at As at As at
Note Current Year Previous Year Current Year Previous Year
EQUITY
Share capital 4.26 8,834,228,698 8,031,116,998 8,834,228,698 8,031,116,998
Share premium - - - -
Retained earnings 2,215,910,907 953,991,664 2,112,880,839 943,654,556

Reserves 4.27 4,012,893,979 2,695,684,007 3,988,625,977 2,695,684,007
Total equity attributable to equity holders 15,063,033,584 11,680,792,670 14,935,735,514 11,670,455,561

Non-controlling interest - - - -
Total equity 15,063,033,584 11,680,792,670 14,935,735,514 11,670,455,561

Total liabilities and equity 220,130,507,955 171,092,849,642 217,697,049,129 170,943,177,826
Contingent liabilities and commitment 4.28 40,222,064,104 29,790,833,130 40,222,064,104 28,523,419,521

Net assets value per share 170.51 145.44 169.07 145.32
Rupesh Luitel Roshan Kumar Neupane Trilok Chand Agrawal Ram Chandra Sanghai
Chief Financial Officer Chief Executive Officer Director Director

Rajendra Prasad Aryal Binod Kumar Pyakurel Ganesh Man Shrestha Tulsi Ram Agrawal
Director Director Director Chairman
Place: Kathmandu As per our report of even date

Date : August 28, 2019 Sanjeev Kumar Mishra, FCA
Partner
TR Upadhya & Co.
Chartered Accountants

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the year ended 31 Asar 2076 (16 July 2019)
Amount in NPR
GROUP BANK
Note Year ended Year ended Year ended Year ended
Interest income 4.29 19,820,078,025 13,556,413,650 19,345,593,620 13,545,820,277
Interest expense 4.30 12,525,030,719 9,322,245,087 12,385,561,034 9,336,156,241
Net interest income 7,295,047,306 4,234,168,562 6,960,032,586 4,209,664,036
Fees and commission income 4.31 2,266,064,641 1,015,242,499 2,248,906,357 966,148,768
Fees and commission expense 4.32 135,935,804 109,072,510 127,599,155 96,498,109
Net fee and commission income 2,130,128,837 906,169,989 2,121,307,202 869,650,660
Net interest, fee and commission income 9,425,176,143 5,140,338,552 9,081,339,788 5,079,314,696
Net trading income 4.33 350,020,925 195,289,632 348,920,815 195,206,579
Other operating income 4.34 75,974,201 83,628,893 75,974,201 83,615,018
Total operating income 9,851,171,268 5,419,257,077 9,506,234,804 5,358,136,293
Impairment charge/(reversal) for loans and other losses 4.35 621,827,988 313,114,135 598,917,799 304,831,572
Net operating income 9,229,343,281 5,106,142,941 8,907,317,005 5,053,304,721
Operating expense
Personnel expenses 4.36 2,565,755,516 1,804,575,268 2,476,831,196 1,782,112,947
Other operating expense 4.37 1,750,923,259 1,248,266,772 1,712,836,238 1,237,092,835
Depreciation & Amortisation 4.38 213,224,638 119,360,721 204,032,944 115,804,043
Operating Profit 4,699,439,868 1,933,940,180 4,513,616,628 1,918,294,896
Non operating income 4.39 31,104,551 2,500,650 31,304,551 2,500,650
Non operating expense 4.40 104,165,473 110,192,719 104,165,473 110,192,719
Profit before income tax 4,626,378,946 1,826,248,111 4,440,755,706 1,810,602,827
Income tax expense 4.41
Current Tax 1,425,799,079 530,722,814 1,368,655,984 525,425,880

Deferred Tax 45,599,397 (49,464,804) 48,817,056 (49,684,980)
Profit for the period 3,154,980,470 1,344,990,101 3,023,282,666 1,334,861,927
Profit attributable to:

Equity holders of the Bank 3,154,980,470 1,344,990,101 3,023,282,666 1,334,861,927
Non-controlling interest - - - -
Profit for the period 3,154,980,470 1,344,990,101 3,023,282,666 1,334,861,927
Earnings per share

Basic earnings per share 37.41 16.75 34.22 16.62
Diluted earnings per share 37.41 16.75 34.22 16.62

Adjusted earning per share 37.41 16.75 34.22 15.11


Partner
TR Upadhya & Co.

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Amount in NPR
GROUP BANK
Year ended Year ended Year ended Year ended
Profit for the year 3,154,980,470 1,344,990,101 3,023,282,666 1,334,861,927
Other comprehensive income, net of income tax
a) Items that will not be reclassified to profit or loss

- Gains/(losses) from investments in equity instruments
405,437,043 (5,305,644) 405,437,043 (5,305,644)
measured at fair value
- Gains/(losses) on revaluation -
- Actuarial gains/(losses) on defined benefit plans 16,700,092 (2,596,150) 16,700,092 (2,596,150)
- Income tax relating to above items (126,641,141) 2,370,538 (126,641,141) 2,370,538
Net Other Comprehensive Income that will not be

295,495,995 (5,531,256) 295,495,995 (5,531,256)
reclassified to profit or loss
b) Items that are or may be reclassified to profit or loss
- Gains/(losses) on cash flow hedge - - - -

- Exchange gains/(losses) (arising from translating financial
- - - -
assets of foreign operation)
- Income tax relating to above items - - - -
- Reclassify to profit or loss - - - -
Net Other Comprehensive Income that are or may be

- - - -
reclassified to profit or loss
c) Share of other comprehensive income of associate accounted
- - - -
as per equity method
Other comprehensive income for the period, net of income

295,495,995 (5,531,256) 295,495,995 (5,531,256)
tax
Total comprehensive income for the period 3,450,476,465 1,339,458,845 3,318,778,661 1,329,330,671
Total comprehensive income attributable to:

Equity holders of the Bank 3,450,476,465 1,339,458,845 3,318,778,661 1,329,330,671
Non-controlling interest -
Total comprehensive income for the period 3,450,476,465 1,339,458,845 3,318,778,661 1,329,330,671


Partner
TR Upadhya & Co.

CONSOLIDATED STATEMENT OF CASH FLOW STATEMENT

Amount in NPR
GROUP BANK
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received 18,416,914,067 12,643,946,538 18,526,236,274 12,599,013,166
Fees and other income received 2,266,064,641 981,570,401 2,248,906,357 966,148,768
Dividend received - - - -
Receipts from other operating activities 392,501,638 252,310,014 391,601,528 228,141,180
Interest paid (11,706,255,762) (9,607,378,454) (11,682,668,050) (9,597,690,869)
Commission and fees paid (135,935,804) (107,145,165) (127,599,155) (96,498,109)
Cash Payment to Employees (2,533,618,433) - (2,449,296,579) -
Other expense paid (1,932,265,068) (2,927,365,535) (1,992,459,907) (2,904,276,516)

Operating cash flows before changes in operating
4,767,405,279 1,235,937,799 4,914,720,468 1,194,837,621
assets and liabilities
(Increase)/Decrease in Operating Assets (27,134,112,032) (58,972,357,400) (24,129,688,857) (58,668,928,326)
Due from Nepal Rastra Bank (237,182,154) (5,598,982,810) (237,182,154) (5,539,592,494)
Placement with Bank and financial institutions (70,020,809) 1,077,455,778 (70,020,809) 1,179,455,778
Other trading assets (166,080,044) - 2,212,500 -
Loan and advances to Bank and financial institutions (1,415,139,893) - (2,265,139,893) -
Loans and advances to customers (31,046,371,475) (49,647,262,943) (27,368,302,846) (48,388,421,155)
Other assets 5,800,682,343 (4,803,567,425) 5,808,744,345 (5,920,370,454)
Increase/(Decrease) in operating liabilities 35,905,160,786 64,163,336,781 33,838,001,405 64,029,884,624
Due to Bank and financial institutions (1,491,618,222) 3,856,740,748 (3,093,860,815) 3,856,740,748
Due to Nepal Rastra Bank (427,728,015) 742,269,472 (427,728,015) 742,269,472
Deposit from customers 37,796,116,846 59,420,319,722 37,231,081,069 59,684,005,428
Borrowings - 750,000,000 - -
Other liabilities 28,390,177 (605,993,161) 128,509,166 (253,131,025)

Net cash flow from operating activities before tax
13,538,454,033 6,426,917,180 14,623,033,016 6,555,793,919
paid
Income taxes paid (1,207,879,764) (465,286,115) (1,150,736,669) (490,542,829)
Net cash flow from operating activities 12,330,574,269 5,961,631,064 13,472,296,347 6,065,251,089
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities (3,610,353,701) (3,740,826,460) (4,549,253,701) (4,198,817,743)
Receipts from sale of investment securities - - - -
Purchase of property and equipment (1,045,425,578) (944,523,776) (1,025,291,297) (638,606,219)
Receipt from the sale of property and equipment 140,515,153 128,959,060 140,515,151 128,959,060
Purchase of intangible assets (84,927,088) (28,444,442) (84,186,213) (28,444,442)
Receipt from the sale of intangible assets - - - -
Purchase of investment properties (196,191,955) - (196,191,955) -
Receipt from the sale of investment properties - 39,893,310 - 39,893,310
Interest received 1,403,163,958 535,003,938 819,357,345 535,003,938
Dividend received 30,958,693 8,683,843 30,958,693 10,789,107
Net cash used in investing activities (3,362,260,518) (4,001,254,527) (4,864,091,977) (4,151,222,991)

Amount in NPR
GROUP BANK
CASH FLOWS FROM FINANCING ACTIVITIES -
Receipt from issue of debt securities 4,222,188,284 2,990,254,749 4,222,188,284 3,005,153,898
Repayment of debt securities - - - -
Receipt from issue of subordinated liabilities - - - -
Repayment of subordinated liabilities - - - -
Receipt from issue of shares - - - -
Dividends paid (60,183,054) (72,392,319) (45,446,211) (72,392,319)
Interest paid (818,774,958) (194,131,344) (702,892,984) (194,131,344)
Other receipt/payment - -
Net cash from financing activities 3,343,230,273 2,723,731,087 3,473,849,089 2,738,630,236
Net increase (decrease) in cash and cash

12,311,544,024 4,684,107,624 12,082,053,459 4,652,658,334
equivalents
Cash and cash equivalents at Shrawan 1, 2075 8,173,703,208 3,489,595,585 8,132,486,809 3,479,828,475
Effect of exchange rate fluctuations on cash and cash

-
equivalents held
Cash and cash equivalents at Ashadh end 2076 20,485,247,232 8,173,703,208 20,214,540,268 8,132,486,809


Partner
TR Upadhya & Co.

GROUP
232
STATEMENT OF CHANGES IN EQUITY
ASIA Bank

Brief About NIC
Amount in NPR
Non
Share General Exchange Regulatory Fair Value Revaluation Retained Other
Particulars Share Capital Total controlling Total Equity
Premium Reserve Equalisation Reserve Reserve Reserve Earning Reserve
Interest
Management
Balance as at Sawan 1, 2074 6,692,597,498 - 1,558,180,565 34,686,094 - 2,312,016 28,472,369 1,846,858,328 254,035,350 10,417,142,219 - 10,417,142,219
Adjustment/Restatement - - - - - - - - - - - -
Discussions & Analysis
Transfer to regulatory reserve - - - - - - - - - - - -

Adjusted Restated Balance at
6,692,597,498 - 1,558,180,565 34,686,094 - 2,312,016 28,472,369 1,846,858,328 254,035,350 10,417,142,219 - 10,417,142,219
Sawan 1, 2074
Comprehensive Income for the year
Corporate
Governance
Profit for the year - - - - - - - 1,344,990,101 - 1,344,990,101 - 1,344,990,101

Other Comprehensive income,
- - - - - - - - - - - -
net of tax
Risk
Gains/(losses) from investments

in equity instruments measured at - - - - - (720,323) - - (5,158,121) (5,878,444) - (5,878,444)
fair value
Management
Net gain(loss) on revaluation - - - - - - - - - - - -

Atuarial gains/(losse) on defined
- - - - - - - - (1,817,305) (1,817,305) - (1,817,305)
benefit plans
Gains/(losses) on cash flow hedge - - - - - - - - - - - -
Sustainability
Fair Value Reserve (Investment in

- - - - - - - - - - - -
Equity Investment) :
Exchange gains/(losses) (arising
from translating financial assets of
foreign operation)
Total comprehensive income for
- - - - - (720,323) - 1,344,990,101 (6,975,426) 1,337,294,353 - 1,337,294,353
the year
of NIC ASIA Bank
Transfer to reserve during the

- - 266,972,385 3,686,060 455,575,876 - 15,772,093 (826,783,606) 84,777,192 - - -
year
Transfer from the reserve during
Audited Financial Statement
- - - - - - - - (1,090,244) (1,090,244) - (1,090,244)

the year
Transactions with owners, directly
recognized in equity
Right share issued - - - - - - - - - - - -
Bittiya Sanstha
Share based payments - - - - - - - - - - - -

NIC ASIA Laghubitta
Dividends to equity holders: - - - - - - - - - - - -
Bonus Shares issued 1,338,519,500 - - - - - - (1,338,519,500) - - - -
Cash Dividend Paid - - - - - - - (72,553,659) - (72,553,659) - (72,553,659)

Capital
Other
NIC ASIA
Total contributions by and

1,338,519,500 - - - - - - (1,411,073,158) - (72,553,659) - (72,553,659)
distributions:
Balance as at Asar End, 2075 8,031,116,998 - 1,825,152,950 38,372,154 455,575,876 1,591,694 44,244,462 953,991,664 330,746,871 11,680,792,670 - 11,680,792,670
Network of
NIC ASIA Bank
Amount in NPR
Non
Share General Exchange Regulatory Fair Value Revaluation Retained Other
Particulars Share Capital Total controlling Total Equity
Premium Reserve Equalisation Reserve Reserve Reserve Earning Reserve
Interest
Adjustment/Restatement - - - - - (5,305,644) - - 5,305,644 - - -

8,031,116,998 - 1,825,152,950 38,372,154 455,575,876 (3,713,951) 44,244,462 953,991,664 336,052,515 11,680,792,670 - 11,680,792,670
Sawan 1, 2075
Comprehensive Income for the

- - -
year
Profit for the year 3,154,980,470 3,154,980,470 - 3,154,980,470

- - - -
net of tax

in equity instruments measured - - - - - 283,805,930 - - - 283,805,930 - 283,805,930
at fair value
Gains/(losses) on revalution - - - - - - - - - - - -

- - - - - - - - 11,690,064 11,690,064 - 11,690,064
benefit plans

from translating financial assets of - - - - - - - - - -
foreign operation)
- - - - - 283,805,930 - 3,154,980,470 11,690,064 3,450,476,464 - 3,450,476,464
the year
Transfer to reserve during the year - - 626,718,354 635,106 272,070,442 - 11,959,548 (1,074,774,837) 163,930,842 539,455 - 539,455

- - - - - - - 41,831,188 (53,600,314) (11,769,126) - (11,769,126)
the year
- - - - - - - - - - - -
Dividends to equity holders: - - - - - - - - - - - -
Bonus Shares issued 803,111,700 - - - - - - (803,111,700) - 0 - 0
Other - - - - - - - - - - -
803,111,700 - - - - - - (860,117,579) - (57,005,879) - (57,005,879)
distributions:
Balance as at Asar End, 2076 8,834,228,698 - 2,451,871,304 39,007,260 727,646,318 280,091,979 56,204,010 2,215,910,907 458,073,108 15,063,033,584 - 15,063,033,584
Chief Financial Officer Chief Executive Officer Director Director As per our report of even date
Rajendra Prasad Aryal Binod Kumar Pyakurel Ganesh Man Shrestha Tulsi Ram Agrawal Sanjeev Kumar Mishra, FCA
Partner

TR Upadhya & Co.
Place: Kathmandu Chartered Accountants
Date : August 28, 2019
233
B ANK
234
ASIA Bank

Brief About NIC
Amount in NPR
Non-
Share Share General Exchange Regulatory Fair Value Revaluation Retained
Particulars Other Reserve Total controlling Total Equity
Capital Premium Reserve Equalisation Reserve Reserve Reserve Earning
Interest
Management
Balance as at Sawan 1, 2074 6,692,597,498 - 1,558,180,565 34,686,094 - 2,312,016 28,472,369 1,844,544,130 254,035,350 10,414,828,022 - 10,414,828,022
Restatement - - -
Adjustment - - -

6,692,597,498 - 1,558,180,565 34,686,094 - 2,312,016 28,472,369 1,844,544,130 254,035,350 10,414,828,022 - 10,414,828,022
Sawan 1, 2074
Comprehensive Income for the year - - -
Corporate
Profit for the year - - - - - - - 1,334,861,927 1,334,861,927 - 1,334,861,927

Governance

- - -
net of tax
Risk
in equity instruments measured at - - - - - (720,323) - - (5,158,121) (5,878,443) - (5,878,443)

fair value
Management
Net gain(loss) on revaluation - - - - - - - - - - - -

- - - - - - - - (1,817,305) (1,817,305) - (1,817,305)
benefit plans
Sustainability
foreign operation)
- - - - - (720,323) - 1,334,861,927 (6,975,426) 1,327,166,178 - 1,327,166,178
the year
Transfer to reserve during the year - - 266,972,385 3,686,060 455,575,876 - 15,772,093 (826,783,606) 84,777,192 - - -
- - - - (1,090,244) (1,090,244) - (1,090,244)
the year
of NIC ASIA Bank

- - -
Dividends to equity holders: - - -
Bonus Shares issued 1,338,519,500 - - - - - - (1,338,519,500) - - - -

Bittiya Sanstha
Other
NIC ASIA Laghubitta

1,338,519,500 - - - - - - - (70,448,395) - (70,448,395)
distributions: (1,408,967,895)
Balance as at Asar End, 2075 8,031,116,998 - 1,825,152,950 38,372,154 455,575,876 1,591,694 44,244,462 943,654,556 330,746,871 11,670,455,561 - 11,670,455,561
Capital
Balance as at Sawan 1, 2075 8,031,116,998 - 1,825,152,950 38,372,154 455,575,876 1,591,694 44,244,462 943,654,556 330,746,871 11,670,455,561 - 11,670,455,561
NIC ASIA
Adjustment/Restatement (5,305,644) 5,305,644 - - -

8,031,116,998 - 1,825,152,950 38,372,154 455,575,876 (3,713,951) 44,244,462 943,654,556 336,052,515 11,670,455,561 - 11,670,455,561
Sawan 1, 2075
Network of
NIC ASIA Bank
Amount in NPR
Non-
Share General Exchange Regulatory Fair Value Revaluation Retained
Particulars Share Capital Other Reserve Total controlling Total Equity
Premium Reserve Equalisation Reserve Reserve Reserve Earning
Interest
Comprehensive Income for the year - - -
Profit for the year - - - - - - - 3,023,282,666 3,023,282,666 - 3,023,282,666

- - -
net of tax
in equity instruments measured at - - - - - 283,805,930 - - 283,805,930 - 283,805,930
fair value
Gains/(losses) on revalution - - - - - - - - - - -
- - - - - - - 11,690,064 11,690,064 - 11,690,064
benefit plans
Gains/(losses) on cash flow hedge - - - - - - - - - - -
foreign operation)
- - - - - 283,805,930 - 3,023,282,666 11,690,064 3,318,778,661 - 3,318,778,661
the year
Transfer to reserve during the year - - 604,656,534 635,106 272,070,442 11,959,548 (1,050,506,835) 161,724,660 539,455 - 539,455
- - - - 41,831,188 (53,600,314) (11,769,126) - (11,769,126)
the year
- - -
Dividends to equity holders: - - -

Bonus Shares issued 803,111,700 - - - - - - (803,111,700) - - - -
Other
803,111,700 - - - - - - (845,380,737) - (42,269,037) - (42,269,037)
distributions:
Balance as at Asar End, 2076 8,834,228,698 - 2,429,809,484 39,007,260 727,646,318 280,091,979 56,204,010 2,112,880,839 455,866,926 14,935,735,514 - 14,935,735,514
Other Reserve includes Capital Redemption Reserve, Corporate Social Responsibility Reserve and Other Comprehensive Reserve
As on the reporting date, the Deferred Tax Liabilities has been created, as a result the corresponding Deferred Tax Reserve of NPR 41,845,804 on the books is not required. Thus same has been transferred from Deferred
Tax Reserve to Retained Earning.

Chief Financial Officer Chief Executive Officer Director Director As per our report of even date
Rajendra Prasad Aryal Binod Kumar Pyakurel Ganesh Man Shrestha Tulsi Ram Agrawal Sanjeev Kumar Mishra, FCA
Partner
TR Upadhya & Co.
Place: Kathmandu Chartered Accountants

235
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
4.1 Cash and Cash Equivalent

Amount in NPR
GROUP BANK
As at As at As at As at
Cash In Hand 5,345,995,955 3,755,748,988 5,345,486,177 3,754,383,849
Balances with BFIs 8,677,400,244 3,374,009,734 8,627,027,950 3,334,158,475
Money at Call and Short Notice 3,720,186,399 - 3,500,361,507 -

Other 2,741,664,634 1,043,944,486 2,741,664,634 1,043,944,486
20,485,247,232 8,173,703,208 20,214,540,268 8,132,486,809
The fair value of cash and cash equivalent is its carrying value. Cash at vault is adequately insured for physical and financial risks. The
amount of cash at vault is maintained on the basis of the liquidity and business requirements. Balance with BFIs includes balance
maintained at various banks and financial institutions. Cash held in foreign currency is subject to risk of changes in the foreign
exchange rates. These are closely monitored, and risks, if identified, are promptly managed. Other items on cash and cash equivalents
includes interbank placements and treasury bills within maturity below 90 days.
4.2 Due from Nepal Rastra Bank

Amount in NPR
GROUP BANK
Statutory Balances with NRB 16,007,710,926 15,812,712,630 16,007,710,926 15,812,712,630
Securities purchased under Resale Agreement - - - -
Other deposit and receivable from NRB 90,204,320 48,020,461 90,204,320 48,020,461
16,097,915,246 15,860,733,092 16,097,915,246 15,860,733,092
The fair value of balance with the Nepal Rastra Bank (NRB) is its carrying amount itself. Balance with the NRB is principally maintained
as a part of the regulatory cash reserve ratio required by the NRB. Other deposit and receivable from NRB includes citizen saving bond
which the Bank has held for market maker purpose and receivable from NRB for interest subsidy.
4.3 Placement with Banks & Financial Institutions

Amount in NPR
GROUP BANK
Placement with Domestic B/FIs - - - -
Placement with Foreign B/FIs 383,950,000 313,929,191 383,950,000 313,929,191
Less: Allowances for Impairment - - -
383,950,000 313,929,191 383,950,000 313,929,191
Placements with domestic as well as foreign Bank and financial institutions with original maturities of more than three months from
the acquisition date are presented above.

4.4 Derivative financial instruments
Amount in NPR
GROUP BANK
Held for Trading
Interest Rate Swap - - - -
Currency Swap - - -
Forward exchange Contract. - - - -
Others - - - -
Held for risk management - - -
Currency Swap 3,019,706,751 - 3,019,706,751 -
Forward exchange Contract 3,986,303,856 1,266,017,586 3,986,303,856 1,266,017,586

Others - - - -
7,006,010,607 1,266,017,586 7,006,010,607 1,266,017,586
A significant part of the derivatives in the portfolio are related to servicing corporate clients in their risk management to hedge,
e.g. foreign currency exposures. These products are used by Bank as part of its own regular treasury activities as well. From a risk
perspective, the gross amount of derivative assets must be considered together with the gross amount of derivative liabilities, which
are presented separately on the statement of financial position.
4.5 Other Trading Assets

Amount in NPR
GROUP BANK
Tresury bills - - - -
Government Bonds - - - -
NRB Bonds - - - -
Domestic Corporate bonds - - - -
Equities - 60,875 - -
Other 175,793,419 9,652,500 7,440,000 9,652,500
Total 175,793,419 9,713,375 7,440,000 9,652,500
Pledged - - - -
Non-Pledged - - - -
Trading assets are those assets that the licensed institution acquires principally for the purpose of selling in the near term, or holds as
part of a portfolio that is managed together for short-term profit are presented under this account head. The trading asset includes
derivative assets and non derivative assets. Other trading assets includes stock of silver and gold.

4.6 Loan and Advances to BFIs

Amount in NPR
GROUP BANK
Domestic BFIs
Loans to Microfinance Institutions 5,493,217,301 4,055,193,757 6,993,217,301 4,705,193,757
Other
Less: Allowances for impairment 69,932,173 47,048,521 69,932,173.01 47,048,521
Total 5,423,285,128 4,008,145,235 6,923,285,128 4,658,145,235
As per the Carve out notice issued by ICAN, the Bank has measured impairment loss on loan and advances as the higher of amount
derived as per norms prescribed by Nepal Rastra Bank for loan loss provision and amount determined as per paragraph 63 of NAS 39.
4.6.1 Specific Allowance for Impairment

Amount in NPR
GROUP BANK
Balance at Shrawan 1 47,048,521 16,463,717 47,048,521 16,463,717
Impairment loss for the year:
Charge for the year 22,883,652 30,584,805 22,883,652 30,584,805
Recoveries/reversal
Amount written off
Balances at Ashad end 69,932,173 47,048,521 69,932,173 47,048,521
No individual loans to banks and micro finance has terms and conditions that significantly affect the amount, timing or certainty of
consolidated cash flows of the Bank. These assets have been classified as loans and receivables and are subsequently measured at
amortized costs. Risks associated with these assets are regularly assessed. These are interest bearing advances and the income on
these assets is credited to statement of profit or loss under interest income.
4.7 Loans and advances to customers

Amount in NPR
GROUP BANK
Loans and advances to customers at amortised cost 148,882,647,948 117,868,952,952 144,383,491,226 117,040,170,573
Less: Impairment Allowances
Collective Impairment 1,437,850,039 1,171,420,285 1,414,351,573 1,163,137,722
Individual Impairment 395,133,699 72,411,944 395,133,699 72,411,944
Net amount 147,049,664,210 116,625,120,722 142,574,005,954 115,804,620,907

Loan and advance measured at FVTPL - - - -
Total 147,049,664,210 116,625,120,722 142,574,005,954 115,804,620,907
As per the Carve out notice issued by ICAN, the Bank has measured impairment loss on loan and advances as the higher of amount
derived as per norms prescribed by Nepal Rastra Bank for loan loss provision and amount determined as per paragraph 63 of NAS
39.Impairment in loans and advances to BFIs and loans and advances to customer are as per NRB directive no.2 (NPR 1,870,649,040)
which is higher than total impairment as per NAS 39. As per NAS 39, impairment are NPR 374,183,619 & NPR 280,779,250 for FY
2018/19 & FY 2017/18 respectively.
Amount in NPR
GROUP BANK
Particulars
Loans and advances to customers 147,610,715,959 116,790,730,297 143,114,499,449 115,961,947,918
Loans and advances to staff 743,104,260 636,641,280 740,164,049 636,641,280
Accrued Interest 528,827,729 449,863,939 528,827,729 441,581,376
Total 148,882,647,948 117,877,235,516 144,383,491,226 117,040,170,574
Impariment
As per NRB Directive No. 2 1,832,983,738 1,243,832,229 1,809,485,272 1,235,549,666
AS per NAS 39 374,183,619 280,779,250 374,183,619 280,779,250
4.7.1 Analysis of loan and advance- By Product

Amount in NPR
GROUP BANK
Product
Term loans 31,295,727,628 22,686,434,587 26,796,570,906 22,685,908,516
Overdraft 31,352,726,512 28,184,560,362 31,352,726,512 28,184,560,362
Trust receipt/Import loans 717,672,334 1,532,270,540 717,672,334 1,532,270,540
Demand and Other Working Capital loans 18,172,390,056 16,020,083,918 18,172,390,056 15,191,827,610
Personal residential loans 18,021,623,381 17,340,210,218 18,021,623,381 17,340,210,218
Real estate loans 10,460,959,284 8,370,704,675 10,460,959,284 8,370,704,675
Margin lending loans 912,271,786 1,931,155,660 912,271,786 1,931,155,660
Hire purchase loans 10,297,804,170 5,023,527,515 10,297,804,170 5,023,527,515
Deprived sector loans 13,415,082,336 9,314,091,390 13,415,082,336 9,314,091,390
Bills Purchased - - -
Staff loans 843,531,371 636,641,280 843,531,371 636,641,280
Other 12,864,031,363 6,387,691,431 12,864,031,363 6,387,691,431
Sub Total 148,353,820,219 117,427,371,576 143,854,663,498 116,598,589,197
Interest Receivable 528,827,729 441,581,376 528,827,729 441,581,376
Grand Total 148,882,647,948 117,868,952,952 144,383,491,226 117,040,170,573
Interest Accrued of NPR 11,809,920 has been derecognized as per the income recognition guidelines issued by Nepal Rastra Bank
through circular no. Bai.Bi.Ni.Bi./Niti/Paripatra/KaKhaGa/01/076/77 dated 2076/04/10 and adjusted from accrued interest.

4.7.2 Analysis of loan and advance- By Currency

Amount in NPR
GROUP BANK
Nepalese rupee 148,547,168,046 117,114,089,952 144,048,011,324 116,285,307,574
Indian rupee - - - -
USD 335,479,902 754,863,000 335,479,902 754,863,000
GBP - - - -
Euro - - - -
JPY - - - -
Chinese Yuan - - - -
Other - - - -
Total 148,882,647,948 117,868,952,952 144,383,491,226 117,040,170,573
4.7.3 Analysis of loan and advance - By Collateral

Amount in NPR
GROUP BANK
Movable / Immovable assets 135,612,707,981 107,605,359,214 135,612,707,981 106,777,102,906
Gold and silver 223,673,189 616,834,265 223,673,189 616,834,265
Guarantee of domestic B/Fis - - - -
Government Guarantee 217,134,275 216,534,275 217,134,275 216,534,275
Guarantee of international rated bank - - - -
Export document - - - -
Fixed Deposit receipts 437,871,186 207,313,501 437,871,186 207,313,501
Government securities / bonds Counter guarantee - -
Counter guarantee - - -
Personal guarantee - - -
Other 12,391,261,317 9,222,911,697 7,892,104,596 9,222,385,626
Subtotal 148,882,647,948 117,868,952,952 144,383,491,226 117,040,170,573
Unsecured
Grand Total 148,882,647,948 117,868,952,952 144,383,491,226 117,040,170,573

4.7.4 Allowances for Impairment
Amount in NPR
GROUP BANK
Specific allowances for impairment
Balance at Shrawan 1 70,796,628 236,916,814 70,796,628 236,916,814
Impairment loss for the year: -
Charge for the year 324,337,071
Recoveries/reversal during the year - (166,120,186) (166,120,186)
Write-offs -
Exchange rate variance on foreign currency
Other movement
Balance at Ashad end 70,796,628 70,796,628 395,133,699 70,796,628
Collective allowances for impairment
Balance at Shrawan 1 1,164,753,038 724,386,137 1,164,753,038 724,386,137
Impairment loss for the year:
Charge/(reversal) for the year 249,598,535 440,366,901 249,598,535 440,366,901
Exchange rate variance on foreign currency - -
Other movement
Balance at Ashad end 1,414,351,573 1,164,753,038 1,414,351,573 1,164,753,038
Total allowances for impairment 1,485,148,201 1,235,549,666 1,809,485,272 1,235,549,666
4.8 Investment Securities

Amount in NPR
GROUP BANK
Investment securities measured at amortized cost 15,510,358,496 13,547,545,154 15,342,758,496 13,375,545,154
Investment in equity measure at FVTOCI 2,810,200,522 757,223,119 2,810,200,522 757,223,119
Other - -
18,320,559,017 14,304,768,273 18,152,959,017 14,132,768,273
Investment made by the Bank in financial instruments has been presented under this account head in two categories i.e. investment
securities measured at amortized cost and investment in equity measured at fair value through other comprehensive income.
Investment other than those measured at amortized cost is measured at fair value and changes in fair value has been recognized in
other comprehensive income. Where income from the investment is received in the form of bonus shares, the valuation of investment
is made by increasing the number of shares without changing in the cost of investment. Treasury Bills with maturity up to 90 days
have been classified under cash and cash equivalent.

4.8.1 Investment securities measured at amortized Cost

Amount in NPR
GROUP BANK
Debt securities - 343,102,568 - 343,102,568
Government bonds 13,941,514,176 9,777,619,428 13,941,514,176 9,777,619,428
Government treasury bills 1,401,244,319 2,161,384,193 1,401,244,319 2,161,384,193
Nepal Rastra Bank bonds - - - -
Nepal Rastra Bank deposits instruments - 1,093,438,964 - 1,093,438,964
Other - 172,000,000 - -
Less: specific allowances for impairment - - -
Total 15,342,758,496 13,547,545,154 15,342,758,496 13,375,545,154
4.8.2 Investment securities measured through other comprehensive Income

Amount in NPR
GROUP BANK
Equity instruments
Quoted equity securities 1,602,789,022 566,311,619 1,602,789,022 566,311,619
Unquoted equity securities 1,207,411,500 190,911,500 1,207,411,500 190,911,500
Total 2,810,200,522 757,223,119 2,810,200,522 757,223,119

4.8.3 Information relating to investment in equities
Investment securities designated as at fair value through Other Comprehensive Income
Amount in NPR
GROUP BANK
Equity instruments "As at 16 July 2019" "As at 16 July 2018" "As at 16 July 2019" "As at 16 July 2018"
Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value
Investment in quoted equity
National Life Insurance Company Limited
147,550 shares of Rs 100 Each 56,491,442 60,421,725 51,616,442 51,616,442 56,491,442 60,421,725 51,616,442 51,616,442
Nepal Life Insurance Company
558,636 Shares of Rs 100 Each 445,025,917 503,331,487 2,480,925 3,244,500 445,025,917 503,331,487 2,480,925 3,244,500
Asian Life Insurance Company
57,824 Shares of Rs 100 Each 23,256,762 22,146,592 - - 23,256,762 22,146,592 - -
Neco Insurance Company
97,748 Shares of Rs 100 Each 47,622,610 48,385,260 - - 47,622,610 48,385,260 - -
Shikhar Insurance Company
46,192 Shares of Rs 100 Each 40,402,262 45,942,101 - - 40,402,262 45,942,101 - -
Surya Life Insurance
145,996 Shares of Rs 100 Each 45,815,733 46,601,923 45,815,733 46,601,923
Rural Microfinance Development Centre Limited
387,877 Shares of Rs 100 Each 25,231,000 179,470,688 25,231,000 25,231,000 25,231,000 179,470,688 25,231,000 25,231,000
Global IME Samunnat Scheme 1 *
3,767,268 Shares of Rs 10 Each 37,672,680 31,569,706 37,672,680 33,038,940 37,672,680 31,569,706 37,672,680 33,038,940
NABIL Equity Fund *
475,944 Shares of Rs 10 Each 4,759,440 4,440,558 4,759,440 4,692,808 4,759,440 4,440,558 4,759,440 4,692,808
NIBL Pargati Fund *
1,027,407 Shares of Rs 10 Each 10,274,070 7,643,908 10,274,070 9,246,663 10,274,070 7,643,908 10,274,070 9,246,663
NMB Hybrid Fund L-1 *
1,101,421 Shares of Rs 10 Each 11,014,210 11,047,253 11,014,210 10,672,769 11,014,210 11,047,253 11,014,210 10,672,769
NIC ASIA Growth Fund *
15,000,000 Shares of Rs 100 Each 150,000,000 154,200,000 150,000,000 150,000,000 150,000,000 154,200,000 150,000,000 150,000,000
Mero Microfinance Bittiya Sanstha Limited
460,460 Shares of Rs 100 Each 37,023,000 171,475,304 14,000,000 14,000,000 37,023,000 171,475,304 14,000,000 14,000,000
Citizen Investment Trust
166,032 Shares of Rs 100 Each 264,568,496 282,304,618 264,568,496 264,568,496 264,568,496 282,304,618 264,568,496 264,568,496
Mahuli Samudayik Laghubitta Bittiya Sanstha
51,000 Shares of Rs 100 Each 3,500,000 33,807,900 2,000,000 2,000,000 3,500,000 33,807,900 2,000,000 2,000,000
Total (A) 1,202,657,622 1,602,789,022 573,617,263 568,311,619 1,202,657,622 1,602,789,022 571,617,263 566,311,619
Investment in Unquoted equity
Jyoti Life Insurance Limited *
1,500,000 Shares of Rs 100 Each 150,000,000 150,000,000 150,000,000 150,000,000 150,000,000 150,000,000 150,000,000 150,000,000
Karja Suchana Kendra Ltd
141793 Shares of Rs 100 Each 1,611,500 1,611,500 1,611,500 1,611,500 1,611,500 1,611,500 1,611,500 1,611,500
National Banking Institute
24,000 Shares of 100 Each 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000
Nepal Clearing House limited
72,000 Shars of 100 Each 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Nepal Electronic Payment System *
150,000 Shares of 100 Each 15,000,000 15,000,000 15,000,000 15,000,000 15,000,000 15,000,000 15,000,000 15,000,000
Shrijana Community Development Center *
100,000 Shares of 100 Each 10,000,000 10,000,000 500,000 500,000 10,000,000 10,000,000 500,000 500,000
Solve Laghubitta Bittiya Sanstha Limited *
114,000 Shares of 100 Each 11,400,000 11,400,000 11,400,000 11,400,000 11,400,000 11,400,000 11,400,000 11,400,000
Banking Finance and Insurance Institute of Nepal
30,000 Shares of 100 Each 3,000,000 3,000,000 - - 3,000,000 3,000,000 - -
Nepal Infrastructure Bank Ltd
10,000,000 Shares of Rs 100 Each 1,000,000,000 1,000,000,000 - - 1,000,000,000 1,000,000,000 - -
"Grameen Swayamsewak Laghubitta Bittiya
Sanstha Limited "
90,000 Shares of 100 Each 9,000,000 9,000,000 3,000,000 3,000,000 9,000,000 9,000,000 3,000,000 3,000,000
Total (B) 1,207,411,500 1,207,411,500 188,911,500 188,911,500 1,207,411,500 1,207,411,500 188,911,500 188,911,500
Total (A+B) 2,410,069,122 2,810,200,522 762,528,763 757,223,119 2,410,069,122 2,810,200,522 762,528,763 757,223,119
Investment in unquoted equity is shown at cost considering the networth of equity is not less than cost of investment.
* Companies have not distributed dividends from last three years.

4.9 Current Tax Assets

Amount in NPR
GROUP BANK
Current Tax Assets
Current income tax assets - - -
Current tax of prior periods - - - -
Total - - - -
Current Tax Liabilities
Current income tax liabilities 242,944,821 25,025,507 242,944,821 25,025,507
Current tax of prior periods - - - -
Total 242,944,821 25,025,507 242,944,821 25,025,507
Current Tax Assets includes advance income tax paid by the Bank under self assessment tax returns filed as per the Income Tax Act
2058 and tax deducted at source (TDS) on behalf of the Bank. Similarly, the current income tax liabilities includes the tax payable
to the Government computed as per the provision of the Income Tax Act 2058. Current tax assets has been netted with current
liabilities.
4.10 Investment in subsidiaries

Amount in NPR
As at As at
16 July 2019 16 July 2018
Investment in quoted subsidiaries - -
Investment in unquoted subsidiaries 1,204,500,000 270,000,000
Total Investment 1,204,500,000 270,000,000
Less: Impairmment
Net Carrying Amount 1,204,500,000 270,000,000
4.10.1 Investment in Quoted Subsidiaries

Amount in NPR
BANK
As at 16 July 2019 As at 16 July 2018

Cost Value Cost Value
- - - -
Total - - - -
The Bank's subsidiaries are not listed on the stock exchange as on the reporting date.
4.10.2 Investment in Unquoted Subsidiaries

Amount in NPR
BANK

Cost Value Cost Value
NIC ASIA Capital Limited 200,000,000 200,000,000 200,000,000 200,000,000
NIC ASIA Lagubitta Bittiya Sanstha Limited 1,004,500,000 1,004,500,000 70,000,000 70,000,000.00
Total 1,204,500,000 1,204,500,000 270,000,000 270,000,000

4.10.3 Information relating to subsidiaries of the bank
Amount in NPR
BANK
Percentage of Ownership by Bank
NIC ASIA Capital Limited 100 100
NIC ASIA Lagubitta Bittiya Sanstha Limited 100 100
Both the subsidiaries are wholly owned as on the reporting date. NIC ASIA Capital provides investment banking services and merchant
banking services. Similarly, NIC ASIA Laghubittiya Sanstha provides loans to deprived sectors, communities in remote place of the
country.
4.10.4 Non Controlling Interest of the subsidiaries

Amount in NPR
GROUP

NIC ASIA Lagubitta NIC ASIA Lagubitta
NIC ASIA Capital NIC ASIA Capital
Bittiya Sanstha Bittiya Sanstha
Equity interest held by NCI (%) - - - -
Profit/(loss) allocated during the year - - - -
Accumulated balance of NCI as on ashar end - - - -
Dividend paid to NCI - - - -
As the both the subsidiaries of the Bank are wholly owned subsidiaries thus non controlling interest doesn't exist on those subsidiaries
as on the reporting date.
4.11 Investment in Associates

Amount in NPR
GROUP BANK
As at 16 July 2019 As at 16 July 2018 As at 16 July 2019 As at 16 July 2018
Investment in quoted associates - - -
Investment in unquoted associates - - -
Total Investment - - - -
Less Impairmment
Net Carrying amount - - - -
The Bank does not have any associates as on the reporting date.
4.11.1 Investment in quoted associates

Amount in NPR
GROUP BANK
Cost Value Cost Value Cost Value Cost Value
Total - - - - - - - -

4.11.2 Investment in Unquoted associates

Amount in NPR
GROUP BANK
Cost Value Cost Value Cost Value Cost Value
Total - - - - - - - -
4.11.3 Information relating to associates of the bank

Amount in NPR
GROUP BANK
Percentage of Ownership by Bank Percentage of Ownership by Bank
Total - - - - - - - -
4.11.4 Equity value of associates

Amount in NPR
GROUP
Total - - - -
4.12 Investment Properties

Amount in NPR
GROUP BANK
Investment properties measured at fair value
Balance as on Sharwan 1 - -
Addition/disposal during the year - -
Net changes in fair value during the year - -
Adjustment/transfer - -
Net amount - - - -
Investment properties measured at cost
Balance as on Sharwan 1, 74,382,923 48,254,332 74,382,923 48,254,332
Addition/disposal during the year 201,555,634 26,128,591 201,555,634 26,128,591
Net changes in fair value during the year - -
Adjustment/transfer - -
Net amount 275,938,557 74,382,923 275,938,557 74,382,923
Total 275,938,557 74,382,923 275,938,557 74,382,923
The detailed party-wise details of non-banking assets as on reporting date has been provided in note 5.15.

4.13 Property and Equipment (PE)
Amount in NPR
GROUP
Leasehold Computer Furniture & Equipment & Total Ashad Total Ashad
Freehold land Buildings Vehicles Machinery Capital WIP
Assets Accessories Fixtures Others end 2076 end 2075
Cost or deemed cost
Balance at Ashad end 2074 380,254,769 97,757,972 349,777,387 207,600,506 228,091,033 155,505,851 165,457,783 151,933,361 7,257,928 1,584,445,302
Additions
Acquisition during the year - - 327,211,002 108,053,853 128,353,266 58,484,573 311,291,755 - 10,316,454 943,710,903
Capitalization
Disposals - - (126,078) (107,130,291) (115,909,663) (35,256,432) (35,112,874) - - (293,535,339)
Adjustment -
Others
Additions
Acquisition during the year 58,773,988 148,414,328 348,492,248 77,573,458 113,307,101 33,883,468 230,206,811 27,994,285 6,779,888 1,045,425,575
Capitalization - - 17,138,963 - - - - - (17,138,963) 17,138,963
Disposals - - (4,628,852) (1,468,301) (88,919,789) (2,032,328) (13,003,349) (2,186,867) - (112,239,486)
Adjustment - - (2,950,510) - - - 48,230,124 (48,230,124) - (2,950,510)
Others - - - (3,526,537) - (1,854,854) (7,140,516) (1,213,611) - (13,735,518)

Balance at Ashad end 2076 439,028,757 246,172,300 1,034,914,160 281,102,687 264,921,948 208,730,279 699,929,734 128,297,043 7,215,308 3,310,312,215
Leasehold Computer Furniture & Equipment & Total Ashad Total Ashad
Freehold land Buildings Vehicles Machinery Capital WIP
Assets Accessories Fixtures Others end 2076 end 2075
Accumulated depreciation and impairment
Balance at Ashad end 2074 - 25,160,715 149,587,120 117,050,131 97,631,489 93,317,115 97,403,662 92,956,821 - 673,107,052
Depreciation Charge for the Year - 1,646,485 18,189,349 29,436,661 16,343,521 10,960,101 28,304,470 - - 104,880,586
Impairment for the Year
Disposals - - (59,340) (88,518,079) (26,680,046) (30,857,307) (22,466,438) - - (168,581,209)
Others -
Depreciation Charge for the Year - 2,390,242 44,844,498 43,226,001 24,494,365 16,370,693 55,794,768 1,954,581 - 189,075,149
Impairment for the Year - - - - - - - - -
Disposals - - (4,378,015) (4,829,667) (81,448,969) (1,585,198) (11,342,121) (1,900,089) - (105,484,060)
Others - - (2,950,510) - - - - - - (2,950,510)

Capital Work in Progress
Leasehold Computer Furniture & Equipment & Total Ashad

Net Book Value Freehold land Buildings Vehicles Machinery Capital WIP
Assets Accessories Fixtures Others end 2076

247
4.13 Property and Equipment (PE)
Amount in NPR
248
Freehold Leasehold Computer Furniture & Office Total Ashad Total Ashad
ASIA Bank
Buildings Vehicles Machinery Capital WIP

land Assets Accessories Fixtures Equipment end 2076 end 2075
Brief About NIC
Cost or deemed cost
Balance at Ashad 31 2074 380,254,769 97,757,972 348,222,156 207,600,506 227,921,033 151,933,360 165,375,598 151,933,361 7,257,928 1,738,256,683 1,121,248,986
Additions -
Acquisition during the year 325,472,770 102,161,737 123,412,610 54,415,397 307,455,003 10,316,454 923,233,972
Management
Capitalization
Disposals (126,078) (107,130,291) (115,909,663) (35,256,432) (35,112,874) - (293,535,339)

Adjustment

Others
Balance at Ashad 32 2075 380,254,769 97,757,972 673,568,849 202,631,952 235,423,980 171,092,325 437,717,727 151,933,361 17,574,382 2,367,955,317 1,738,256,683
Corporate
Additions - -
Governance
Acquisition during the year 58,773,988 148,414,328 347,237,725 71,455,866 112,839,801 27,649,004 230,206,811 21,933,885 6,779,888 1,025,291,296
Capitalization 17,138,963 (17,138,963) 17,138,963

Risk
Disposals (4,628,852) (1,468,301) (88,919,789) (2,032,328) (13,003,349) (2,186,865) (112,239,484)
Adjustment (2,950,510) 48,230,124 (48,230,124) (2,950,510)

Management
Others (3,526,537) (1,854,854) (7,140,516) (1,213,611) (13,735,518)
Balance at Ashad 31 2076 439,028,757 246,172,300 1,030,366,175 269,092,980 259,343,992 194,854,147 696,010,798 122,236,645 7,215,308 3,264,321,101
Freehold Leasehold Computer Furniture & Office Total Ashad Total Ashad
Buildings Vehicles Machinery Capital WIP
Sustainability
land Assets Accessories Fixtures Equipment end 2076 end 2075

Accumulated depreciation and
impairment
Balance at Ashad 31 2074 - 25,160,715 152,162,718 117,050,131 97,616,141 92,956,821 97,403,662 92,956,821 - 675,307,009
Depreciation Charge for the Year 1,646,485 17,301,358 28,196,199 16,245,710 10,660,098 27,755,196 101,805,046

of NIC ASIA Bank
Disposals (59,340) (88,518,079) (26,680,046) (30,857,307) (22,466,438) (168,581,209)

Others -
Balance at Ashad 32 2075 - 26,807,200 169,404,737 56,728,250 87,181,805 72,759,613 102,692,420 92,956,821 - 608,530,846
Depreciation Charge for the Year - 2,390,242 43,791,524 40,408,571 23,459,719 14,660,213 55,794,768 180,505,037
Disposals - - (4,378,015) (4,829,667) (81,448,969) (1,585,198) (11,342,121) (1,900,089) (105,484,060)

Others (2,950,510) (2,950,510)
Bittiya Sanstha
Balance at Ashad 31 2076 - 29,197,442 205,867,736 92,307,154 29,192,554 85,834,627 147,145,067 91,056,732 - 680,601,313
NIC ASIA Laghubitta
Freehold Leasehold Computer Furniture & Equipment &

Net Book Value Buildings Vehicles Machinery Capital WIP Total
land Assets Accessories Fixtures Others
Capital
NIC ASIA
Balance at Ashad 31 2074 380,254,769 72,597,257 196,059,438 90,550,376 130,304,892 58,976,539 67,971,936 58,976,540 7,257,928 1,062,949,674
Balance at Ashad 32 2075 380,254,769 70,950,772 504,164,112 145,903,702 148,242,175 98,332,713 335,025,307 58,976,540 17,574,382 1,759,424,471
Balance at Ashad 31 2076 439,028,757 216,974,858 824,498,438 176,785,826 230,151,438 109,019,520 548,865,731 31,179,912 7,215,308 2,583,719,788 2,583,719,788
Network of
NIC ASIA Bank
The cost of an item of property and equipment has been recognized as an asset, initially recognized at cost. Subsequent expenditure
is capitalized if it is probable that the future economic benefits from the expenditure will flow to the Bank. Ongoing repairs and
maintenance to keep the assets in working condition are expensed as incurred. Any gain or loss on disposal of an item of property and
equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognized
within other income in profit or loss.
Depreciation on other assets is calculated using the straight- line method to allocate their cost to their residual values over their
estimated useful life as per management judgment as follows:
Group Useful Life (In Years)
Computer 5
Metal Furniture 10
Office Equipment 10
Vehicle 10
Wooden Furniture 5
Building 50
Leasehold Lower of 15 Years or Lease Period
Assets with cost less than Rs. 10,000 are charged off on purchase as revenue expenditure.

4.13 Goodwill & Intangible Assets
Amount in NPR
GROUP
Particulars Software As at As at
Other
Goodwill Purchased Developed Ashad end 2076 Ashad end 2075
Cost
As on Sawan 1, 2074 58,539,405 58,539,405 31,783,000
Additions: -
Acquisition 30,695,477 30,695,477 -
Capitalization -
Disposals or classified as held for sale -
Adjustment -
Balance at Asar 32 2075 89,234,882 89,234,882 58,539,405
Additions
Acquisition 84,927,088 84,927,088
Capitalization
Disposals or classified as held for sale
Adjustment
Balance as on Asar 31, 2076 174,161,970 174,161,970 89,234,882
Depreciation and Impairment
As on Sawan 1, 2074 22,149,795 22,149,795
Depreciation charge for the Year 14,379,577 14,379,577
Disposals
Adjustment
As on Asar 32 2075 36,529,372 36,529,372 22,149,795
Disposals
Adjustment
As on Asar 31 2076 60,678,860 60,678,860 36,529,372
Net Book Value

Balance at Ashad 31 2074 36,389,609 31,783,000
Balance at Ashad 32 2075 52,705,510 52,705,510
Balance at Ashad 31 2076 113,483,110 113,483,110

4.14 Goodwill & Intangible Assets
Amount in NPR
BANK
Particulars Software As at As at
Other
Goodwill Purchased Developed Ashad end 2076 Ashad end 2075
Cost
As on Sawan 1, 2074 57,443,305 57,443,305 31,783,000
Additions: -
Acquisition 28,444,442 28,444,442 25,660,305
Capitalization -
Disposals or classified as held for sale -
Adjustment -
Balance at Asar 32 2075 85,887,747 85,887,747 57,443,305
Additions
Acquisition 84,186,213 84,186,213
Capitalization
Disposals or classified as held for sale
Adjustment
Balance as on Asar 31, 2076 170,073,960 170,073,960 85,887,747
Depreciation and Impairment
As on Sawan 1, 2074 22,056,759 22,056,759
Disposals -
Adjustment
As on Asar 32 2075 36,055,756 36,055,756
Disposals
Adjustment
As on Asar 31 2076 59,583,661 59,583,661 36,055,756
Net Book Value

Balance at Ashad 31 2074 35,386,546 35,386,546
Balance at Ashad 32 2075 49,831,991 49,831,991
Balance at Ashad 31 2076 110,490,299 110,490,299
Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software.
Costs associated with the development of software are capitalized where it is probable that it will generate future economic benefits
in excess of its cost. Computer software costs are amortized on the basis of expected useful life. Costs associated with maintaining
software are recognized as an expense as incurred.
Software is amortised on a straight-line basis in profit or loss over its estimated useful life, from the date that it is available for use.
The estimated useful life of software for the current and comparative periods is five years. Software assets with costs less than Rs.
10,000 are charged off on purchases as revenue expenditure.

4.15 Deferred tax
GROUP BANK
Deferred Tax Assets/Liabilities
Deferred tax assets -
Deferred tax liabilities 175,040,445 2,799,908 178,272,826 2,814,629
Net Amount (175,040,445) (2,799,908) (178,272,826) (2,814,629)
GROUP BANK
2018-19 Net Deferred
Deferred Tax Deferred Tax Net Deferred Tax Deferred Tax Deferred Tax
Tax Assets/
Assets Liabilities Assets/(Liabilities) Assets Liabilities
(Liabilities)
Deferred tax on temporary differences on following
items
Loan and advance to BFIs
Loan and advance to customers - - - - -
Investment Properties - - - - -
Investment Securities 2,398,542 (120,039,420) (117,640,878) (120,039,420) (120,039,420)
Property & Equipment (132,553,634) (132,553,634) (131,805,939) (131,805,939)
Employees' defined benefit plan 56,091,168 56,091,168 54,679,213 54,679,213
Lease Liabilities 19,062,898 19,062,898 18,893,320 18,893,320
Provisions - - - -
Other temporary differences - - - -
Deferred tax on temporary differences 77,552,608 (252,593,054) (175,040,445) 73,572,533 (251,845,359) (178,272,826)
Deferred tax on carry forward of unused tax losses - - -
Deferred tax due to changes in tax rate - - -
Net Deferred tax asset/liabilities as on Ashadh

(175,040,445) (178,272,826)
31 2076
Deferred tax (asset)/liabilities as on Sawan 1 2075 2,799,908 2,814,629
Origination/(Reversal) during the year (177,840,353) (181,087,455)

Deferred tax expense/(income) recognised in
(48,817,056)
profit or loss
126,641,140
other comprehensive income
Deferred tax expense/(income recognised in
-
directly in equity

4.15 Deferred tax
Amount in NPR
GROUP BANK
2017-18 Net Deferred
Deferred Tax Deferred Tax Net Deferred Tax Deferred Tax Deferred Tax
Tax Assets/
Assets Liabilities Assets/(Liabilities) Assets Liabilities
(Liabilities)
Deferred tax on temporary differences on following
items
Loan and advance to BFIs
Loan and advance to customers - - - - -
Investment Properties - (14,476,300) (14,476,300) (14,476,300) (14,476,300)
Investment Securities 1,591,693 - 1,591,693 1,591,693 1,591,693
Property & Equipment - (36,143,427) (36,143,427) (35,923,251) (35,923,251)
Employees' defined benefit plan 45,993,229 - 45,993,229 45,993,229 45,993,229
Lease Liabilities - - - -
Provisions - - - -
Other temporary differences 234,898 - 234,898 -
Deferred tax on temporary differences 47,819,820 (50,619,727) (2,799,908) 47,584,922 (50,399,551) (2,814,629)
Deferred tax on carry forward of unused tax losses - - -
Deferred tax due to changes in tax rate - - -
"Net Deferred tax asset/liabilities as on year

- - (2,814,629)
end of 32 Ashaad, 2075 (Closing)"
Deferred tax (asset)/liabilities as on Sawan 1, 2074
(55,797,787)
(Opening)
Origination/(Reversal) during the year 52,983,158
49,684,980
profit or loss
3,298,178
other comprehensive income
Deferred tax expense/(income recognised in
-
directly in equity
4.16 Other Assets

Amount in NPR
GROUP BANK
Other Assets
Assets held for sale - - - -
Other non banking assets - - - -
Bills receivable - - - -
Accounts receivable 764,589,553 7,064,062,396 752,688,696 7,057,412,789
Accrued Income - - - -
Prepayments and Deposit 444,313,113 694,875,232 442,165,691 693,850,228
Income Tax Deposit 81,826,222 82,185,928 80,262,628 81,974,220
Deferred Employee expenditure 801,667,605 681,489,026 801,667,605 681,489,026
Other 85,999,730 96,612,220 85,509,645 96,458,585
Total 2,178,396,222 8,619,224,803 2,162,294,264 8,611,184,848

4.17 Due to Bank and financial Institutions

Amount in NPR
GROUP BANK
Money Market Deposit - - - -
Interbank Borrowing 4,780,864,384 - 4,780,864,384 -
Other deposits from BFIs 5,456,033,059 11,728,515,665 3,754,782,091 11,629,507,290
Settlement and clearing accounts - - - -
Other deposits from BFIs - - - -
Total 10,236,897,443 11,728,515,665 8,535,646,475 11,629,507,290
The balances in accounts maintained with the Bank by other local financial institution have been presented under this head. Interbank
borrowing, interbank deposit, balances on settlement and clearing accounts as well as other amount due to Bank and financial
institution is presented under due to Bank and financial institutions.
4.18 Due to Nepal Rastra Bank

Amount in NPR
GROUP BANK
Refinance from NRB 314,541,457 742,269,472 314,541,457 742,269,472
Standing Liquidity Facility - - - -
Lender of last resort facility from NRB - - - -
Sale and repurchase agreement - - - -
Other due to Nepal Rastra Bank - - - -
Total 314,541,457 742,269,472 314,541,457 742,269,472
The amount payable to NRB shall include amount of refinance facilities, standing liquidity facility, lender of last resort, sale and
repurchase agreements, deposit from NRB etc.
4.19 Derivative financial instruments

Amount in NPR
GROUP BANK
Held for Trading
Currency Swap - - - -
Forward exchange Contract. - - - -
Others - - - -
Held for risk management - - -
Currency Swap 3,011,871,101 - 3,011,871,101 -
Forward exchange Contract 3,901,537,833 1,721,813,609 3,901,537,833 1,721,813,609
Others - - - -
6,913,408,934 1,721,813,609 6,913,408,934 1,721,813,609
A significant part of the derivatives in the portfolio are related to servicing corporate and SME clients in their risk management
to hedge, for example, foreign currency exposures. These products are also used by the Bank as part of its own regular treasury
activities. From a risk perspective, the gross amount of derivative assets has been considered together with the gross amount of
derivative liabilities, which are presented separately on the statement of financial position. However, netting of these positions in
the statement of financial position has not been done.

4.20 Deposit from customers
Amount in NPR
GROUP BANK
Particulars
Corporate Customers
Term Deposit 43,044,488,925 34,328,582,447 43,044,488,925 34,328,582,447
Call Deposit 20,162,604,131 13,681,382,500 20,162,604,131 13,761,041,525
Current Deposit 13,183,449,957 10,890,731,098 13,183,449,957 10,890,731,098
Other 367,036,302 487,660,714 384,799,646 487,660,714
Retail Deposit
Term Deposit 40,719,457,748 31,227,993,334 40,719,457,748 31,227,993,334
Saving Deposit 58,946,886,879 48,088,149,478 58,375,134,357 48,019,537,051
Current Deposit 921,519,416 390,793,014 921,519,416 390,793,014
Other 29,234,735 483,268,662 29,234,735 483,268,662
Total 177,374,678,093 139,578,561,246 176,820,688,914 139,589,607,845
Deposit from customers include accrued interest payable as on reporting date for the particular deposit portfolio.
4.20.1 Deposit from customers

Amount in NPR
GROUP BANK
Particulars
Nepalese rupee 167,269,662,895 135,015,131,298 166,697,910,373 135,026,177,897
Indian rupee - - - -
USD 7,446,132,107 4,559,176,476 7,446,132,107 4,559,176,476
GBP 8,292,387 635,823 8,292,387 635,823
Euro 2,667,748,340 2,645,457 2,667,748,340 2,645,457
Japanese Yen - - - -
Chinese yuan - - - -
Other 605,708 972,192 605,708 972,192
Total 177,392,441,436 139,578,561,246 176,820,688,914 139,589,607,845
Currency wise include NPR converted value of deposit on different currencies as on reporting date converted at closing spot rate.

4.21 Borrowing
Amount in NPR
GROUP BANK
Particulars
Domestic Borrowing
Nepal Government - - - -
Other Institution - - - -
Other - - - -
Subtotal - - - -
Foreign Borrowing
Foreign B/FIs - - - -
Multilateral Development Banks - - - -
Other Institutions - - - -
Sub total - - - -
Total - - - -
4.22 Provisions
Amount in NPR
GROUP BANK
Particulars
Provisions for redundancy - - - -
Provision for restructuring - - - -
Pending legal issues and tax litigation - - - -
Onerous contracts - - - -
Total - - - -
4.22.1 Movement in provision

Amount in NPR
GROUP BANK
Particulars
Balance at Sawan 1
Provisions made during the year - - - -
Provisions used during the year - - - -
Provisions reversed during the year - - - -
Unwind of discount - - - -
Balance at Asar end - - - -

4.23 Other Liabilities
Amount in NPR
GROUP BANK
Particulars
Liability for employees defined benefit obligations 12,689,557 26,225,161 8,521,426 24,798,627
Liability for long-service leave 157,788,596 128,816,002 155,623,861 128,512,135
Short-term employee benefits - - - -
Bills Payable 83,428,924 119,442,292 83,428,924 119,442,292
Creditors and accruals 1,048,874,315 1,401,536,368 1,043,165,883 1,400,233,571
Interest payable on deposit - - - -
Interest payable on borrowing 337,494 - - -
Liabilities on defered grant income - - - -
Unpaid Dividend 90,597,534 93,774,708 90,597,534 93,774,708
Liabilities under Finance Lease - - - -
Employee bonus payable 510,634,953 201,178,092 493,417,301 201,178,092
Other 195,514,706 154,190,129 170,958,163 105,835,674
Total 2,099,866,079 2,125,162,751 2,045,713,090 2,073,775,098
Liabilities relating to employees benefits like liabilities for defined benefit obligation gratuity and pension fund, liabilities for long-
service leave, short-term employee benefits etc., Creditors and accruals, unearned income, unpaid dividend etc. are presented under
this account head of other liabilities. Long service leave consists of sick leave and annual leave.
Actuarial breakup for defined benefit obligations have been disclosed in disclosure note under 5.25.
4.23.1 The amount Recognised in Statement of Financial Position:

Amount in NPR
GROUP BANK
Particulars
Present value of unfunded defined benefit obligation 155,623,861 129,938,669 155,623,861 128,512,135
Present value of funded defined benefit obligation 139,784,101 143,072,280 139,784,101 142,768,413
Total Present value of obligations 295,407,962 273,010,949 295,407,962 271,280,548
Fair value of plan assets 131,262,675 117,969,786 131,262,675 117,969,786
Present Value of Net Obligation 164,145,287 155,041,163 164,145,287 153,310,762
Recognised Liability for defined benefit obligations 164,145,287 155,041,163 164,145,287 153,310,762
4.23.2 Plan Assets

Amount in NPR
GROUP BANK
Particulars
Equity Shares - - - -
Government Bonds - - - -
Bank Deposit - - - -
Other 131,262,675 117,969,786 131,262,675 117,969,786
Total 131,262,675 117,969,786 131,262,675 117,969,786

4.23.3 Other Liabilities

Amount in NPR
GROUP BANK
Particulars
Fair Value of Obligation at beginning of the year 142,768,413 226,695,642 142,768,413 226,695,642
Acturial (gain)/loss (17,772,864) (13,023,750) (17,772,864) (13,023,750)
Benefits paid by the plan (22,466,114) (36,665,436) (22,466,114) (36,665,436)
Current Service Cost and Interest 37,254,666 94,274,092 37,254,666 94,274,092
Defined benefits obligation at year end 139,784,101 271,280,548 139,784,101 271,280,548
4.23.4 Movement in Present Value of Plan Assets

Amount in NPR
GROUP BANK
Particulars
Fair Value of Plan Assets at beginning of the year 117,969,786 97,338,382 117,969,786 97,338,382
Contributions paid into plan 27,795,221 46,944,407 27,795,221 46,944,407
Benefits paid by the plan (22,466,114) (16,460,167) (22,466,114) (16,460,167)
Acturial (Losses)/gains (1,072,772) (9,852,836) (1,072,772) (9,852,836)
Expected return on plan assets 9,036,554 - 9,036,554 -
Fair Value of Plan Assets at the year end 131,262,675 117,969,786 131,262,675 117,969,786
4.23.5 Expenses Recognized in Income Statement

Amount in NPR
GROUP BANK
Particulars
Current service cost 52,275,161 75,521,429 52,275,161 75,521,429
Interest cost 42,479,845 18,752,663 42,479,845 18,752,663
Expected Return on Plan Assets (9,036,554) (9,036,554) -
Expenses Recognized in Income Statement 85,718,452 94,274,092 85,718,452 94,274,092
4.23.6 Expenses Recognized in Income Statement

Amount in NPR
GROUP BANK
Particulars
Acturial (gain)/loss (16,700,092) 29,031,579 (16,700,092) 29,031,579
Expenses Recognized in Income Statement (16,700,092) 29,031,579 (16,700,092) 29,031,579
4.23.7 Actuarial Assumptions

Amount in NPR
GROUP BANK
Particulars
Discount rate 8% 9% 8% 9%
Salary escalation rate 8% 10% 8% 10%
Withdrawal rate ** 5% ** 5%
Expected return on Plan Assets 8% 9% 8% 9%
Age upto 30 years 29% 29%
Age upto 31-45 years 30% 30%
Age above 45 years 13% 13%

4.24 Debt Securities Issued
Amount in NPR
GROUP BANK
Particulars
Debt Securities issued designated at fair value through
- - - -
profit or loss
Debt Securities issued at amortized cost 7,710,097,099 3,487,908,815 7,710,097,099 3,487,908,815
Total 7,710,097,099 3,487,908,815 7,710,097,099 3,487,908,815
The Bank has four outstanding debt ‘7.25% NIC ASIA Bond 2077’ of total face value of NPR 500 million , '9% NIC ASIA Bond 2081/82' of
total face value of NPR 3,000 million , 'NIC ASIA Debenture 2082/83' of total face value of NPR 1,830 million and NIC ASIA Debenture
2085/86' of total face value of NPR 2,405 million as on reporting date. The detailed information regarding the debt securities has
been presented under note no.5.2.2(a)(iii) for details regarding debt securities issued.
Amount in NPR
GROUP BANK
Debt Securities In Issues (Maturity)
With in 1 year - -
More than 1 year less than 2 years - -
More than 2 year less than 3 years 500,000,000 - 500,000,000
More than 3 year less than 4 years - 500,000,000 500,000,000
More than 4 year less than 5 years - -
More than 5 years 7,234,688,000 3,000,000,000 7,234,688,000 3,000,000,000
Total 7,734,688,000 3,500,000,000 7,734,688,000 3,500,000,000
4.25
Subordinated Liabilities
Amount in NPR
GROUP BANK
Particulars
Redeemable preference shares - - - -
Irredemable cumulative preference shares - - - -
Other - - - -
Total - - - -
The Bank does not have any kind of subordinated liabilities as on the reporting date.

4.26 Share Capital

Amount in NPR
GROUP BANK
Share Capital
Ordinary Shares 8,834,228,698 8,031,116,998 8,834,228,698 8,031,116,998
Convertible Preference Shares - - - -
Irredemable Preference Shares (equity component only) - - - -
Perpetual debt (equity component only) - - - -
Total 8,834,228,698 8,031,116,998 8,834,228,698 8,031,116,998
4.26.1
Ordinary Shares
Amount in NPR
BANK
As at As at
16 July 2019 16 July 2018
Authorised capital
"80,400,000 Ordinary Shares of Rs 100 each (2017-18)

88,400,000 Ordinary Shares of Rs 100 each (2018-19)"
Issued capital

8,834,228,698 8,031,116,998
Paid up capital

8,834,228,698 8,031,116,998
4.26.2 Ordinary Share Ownership

Amount in NPR
BANK
% Amount % Amount
Domestic Ownership
Nepal Government
"A" Class licensed institutions
Other licensed institutions
Other institutions 6.0 532,291,800 6.3 508,096,800
Public 94.0 8,301,936,898 93.7 7,523,020,198
Other
Foreign Ownership
Total 100 8,834,228,698 100 8,031,116,998

4.27 Reserves
Amount in NPR
GROUP BANK
Statutory General reserve 2,451,871,304 1,825,152,950 2,429,809,484 1,825,152,950
Exchange equalization reserve 39,007,260 38,372,154 39,007,260 38,372,154
Corporate social responsibility reserve 44,197,684 24,616,276 43,094,593 24,616,276
Capital redemption reserve 416,666,667 285,714,288 416,666,667 285,714,288
Regulatory reserve 727,646,318 455,575,876 727,646,318 455,575,876
Investment adjustment reserve 56,204,010 44,244,462 56,204,010 44,244,462
Capital reserve - - - -
Assets revaluation reserve - - - -
Fair value reserve 280,091,979 1,591,694 280,091,979 1,591,694
Dividend equalization reserve - - - -
Actuarial gain - - - -
Special reserve - - - -
Other reserve (2,791,242) 20,416,307 (3,894,334) 20,416,307
Total 4,012,893,979 2,695,684,007 3,988,625,977 2,695,684,007
General Reserve
General Reserve maintained pertains to the regulatory requirement of the Bank and Financial Institutions Act, 2073. There is a
regulatory requirement to set aside 20% of the net profit to the general reserve until the reserve is twice the paid up capital and
thereafter minimum 10% of the net profit.
Exchange Equilization Reserve

Exchange equalization is maintained as per requirement of Nepal Rastra Bank Unified Directive. There is a regulatory requirement to
set aside 25% of the foreign exchange revaluation gain on the translation of foreign currency to the reporting currency. The reserve
is the accumulation of such gains over the years.
Corporate Social Responsibility Reserve

Corporate Social Responsibility reserve of 1% of net profit is maintained as per Nepal Rastra Bank Directive.
Regulatory Reserve
Regulatory reserves includes any amount derived as result of NFRS conversion and adoption with effect in retained earning.
Investment Adjustment Reserve

Investment Adjustment Reserve is created against quoted and unquoted share investments as per Nepal Rastra Bank
Directive.
Other Reserve
NPR 41,845,804 has been transferred from Deferred Tax Reserve to Retained Earning. As on the reporting date, the Deferred
Tax Liabilities has been created as a result the corresponding Deferred Tax Reserve on the books is no longer required.
Other Reserve includes OCI reserve of actuarial loss and fair value. As a result of reversal of Deferred Tax Reserve Other Reserve is
negative. However, regulatory reserve against the actuarial loss has been made in the FY 2017/18.

4.28 Contingent liabilities and commitments

Amount in NPR
GROUP BANK
Particulars
Contingent liabilities 6,326,744,624 11,253,448,274 6,326,744,624 11,793,571,972
Undrawn and undisbursed facilities 33,797,501,347 12,876,548,689 33,797,501,347 15,008,033,941
Capital commitment 97,818,133 97,818,132.86 10,595,795.22
Lease Commitment - - - -
Litigation - - - -
Total 40,222,064,104 24,129,996,963 40,222,064,104 26,812,201,708
4.28.1
Contingent liabilities
Amount in NPR
GROUP BANK
Particulars
Acceptance and documentary credit 1,682,734,336 471,070,000 1,682,734,336 471,070,000
Bills for collection 37,117,990 167,927,436 37,117,990 167,927,436
Forward exchange contracts - - -
Guarantees 4,606,892,298 89,625,588 4,606,892,298 89,625,588
Underwriting commitment - - - -
Other commitments - 11,064,948,948 - 11,064,948,948
Total 6,326,744,624 11,793,571,972 6,326,744,624 11,793,571,972
4.28.2 Undrawn and undisbursed facilities

Amount in NPR
GROUP BANK
Particulars
Undisbursed amount of loans - - - -
Undrawn limits of overdrafts 4,736,717,720 4,816,976,008 4,736,717,720 4,816,976,008
Undrawn limits of credit cards 605,009,999 363,672,772 605,009,999 363,672,772
Undrawn limits of letter of credit 14,787,960,649 8,394,414,368 14,787,960,649 8,394,414,368
Undrawn limits of guarantee 13,667,812,979 1,432,970,793 13,667,812,979 1,432,970,793
Total 33,797,501,347 15,008,033,941 33,797,501,347 15,008,033,941

4.28.3 Capital commitments
Capital expenditure approved by relevant authority of the Bank but provision has not been made in financial statements
Amount in NPR
GROUP BANK
Particulars
Capital commitments in relation to Property and Equipment
Approved and contracted for 59,771,345 10,595,795 59,771,345 10,595,795
Approved but not contracted for 38,046,788 38,046,788
Sub total 97,818,133 10,595,795 97,818,133 10,595,795
Capital commitments in relation to Intangible assets
Approved and contracted for
Approved but not contracted for
Sub total - - - -
Total 97,818,133 10,595,795 97,818,133 10,595,795
Capital commitment comprises of contract with vendor for branch expansion
4.28.4
Lease commitments
Amount in NPR
GROUP BANK
Particulars
Operating lease commitments

Future minimum lease payments under non cancellable
operating lease, where the Bank is lessee
Not later than 1 year - - - -
Later than 1 year but not later than 5 years - - - -
Later than 5 years
Sub total - - - -
Finance lease commitments
Future minimum lease payments under non cancellable
operating lease, where the Bank is lessee
Not later than 1 year
Later than 1 year but not later than 5 years - - - -
Later than 5 years - - - -
Sub total - - - -
Grand total - - - -
All the operating lease entered by Bank are cancellable by giving a notice period and the Bank do not have any finance lease
commitment as as on reporting date.
4.28.5 Litigation
The bank's litigations are generally related to its ordinary course of business pending on various jurisdiction. Litigations are mainly
in the nature of income tax/VAT which is explained in detail in Note 5.6.1. Other litigations include cases pending in various courts &
tribunal in Nepal pertaining to assets recovered from the borrowers.

4.29 Interest income

Amount in NPR
GROUP BANK
Particulars
Year Ended Year Ended Year Ended Year Ended
Cash and cash equivalent 123,274,429 16,956,604 123,274,429 16,956,604
Due from Nepal Rastra Bank 1,694,341 9,397 1,694,341 9,397
Placement with Bank and financial institutions 646,621,766 46,518,821 62,815,153 27,229,558
Loan and advances to Bank and financial institutions 729,863,869 419,645,934 839,186,076 428,341,824
Loans and advances to customers 17,513,647,049 12,234,082,040 17,513,647,049 12,234,082,040
Investment securities 631,573,422 569,838,109 631,573,422 569,838,109
Loan and advances to staff 173,403,149 269,362,745 173,403,149 269,362,745
Other - - - -
Total interest income 19,820,078,025 13,556,413,650 19,345,593,620 13,545,820,277
Interest Accrued of NPR 11,809,920 has been derecognized as per the income recognition guidelines issued by Nepal Rastra Bank
through circular no. Bai.Bi.Ni.Bi./Niti/Paripatra/KaKhaGa/01/076/77 dated 2076/04/10
4.30
Interest expense
Amount in NPR
GROUP BANK
Particulars
Due to Bank and financial institutions 256,025,671 595,448,087 140,143,697 594,458,880
Due to Nepal Rastra Bank 33,014,461 14,637,175 33,014,461 14,637,175
Deposits from customers 11,673,241,301 8,535,783,691 11,649,653,589 8,550,684,052
Borrowing - - - -
Debt securities issued 562,749,287 176,376,134 562,749,287 176,376,134
Subordinated liabilities - - - -
Other - - - -
Total interest expense 12,525,030,719 9,322,245,087 12,385,561,034 9,336,156,241

4.31 Fees and Commission Income
Amount in NPR
GROUP BANK
Particulars
Loan administration fees 1,169,326,497 521,122,469 1,287,889,853 505,533,719
Service fees 329,842,536 112,001,493 236,057,965 112,001,493
Consortium fees 17,746,349 3,490,500 17,746,349 3,490,500
Commitment fees 17,566,514 10,290,091 17,566,514 10,290,091
DD/TT/Swift fees 23,182,281 11,632,036 23,182,281 11,632,036
Credit card/ATM issuance and renewal fees 225,784,877 31,751,700 225,784,877 31,751,700
Prepayment and swap fees 42,066,320 52,088,881 42,066,320 52,088,881
Investment banking fees 25,541,326 5,820,731 - -
Asset management fees 17,696,927 27,368,250 - -
Brokerage fees - - - -
Remittance fees 64,496,763 52,930,522 64,496,763 52,930,522
Commission on letter of credit 24,758,022 40,555,059 24,758,022 40,555,059
Commission on guarantee contracts issued 77,870,965 41,331,251 77,870,965 41,331,251
Commission on share underwriting/issue - - - -
Locker rental 10,421,355 8,097,444 10,421,355 8,097,444
Other fees and commission income 219,763,908 96,762,073 221,065,092 96,446,073
Total fees and Commission Income 2,266,064,641 1,015,242,499 2,248,906,357 966,148,768
4.32 Fees and Commission Income

Amount in NPR
GROUP BANK
Particulars
ATM management fees - - - -
VISA/Master card fees 73,824,065 67,069,753 73,824,065 67,069,753
Guarantee commission - - - -
Brokerage - - - -
DD/TT/Swift fees 8,445,556 11,019,543 8,445,556 11,019,543
Remittance fees and commission - - - -
Other fees and commission expense 53,666,183 30,983,214 45,329,534 18,408,813
Total fees and Commission Expense 135,935,804 109,072,510 127,599,155 96,498,109
Payouts on account of fee and commission for services obtained by the Bank are presented under this account head. This account
head includes card related fees, guarantee commission, brokerage expenses etc.

4.33 Net trading income

Amount in NPR
GROUP BANK
Particulars
Changes in fair value of trading assets 919,573 45,288 - -
Gain/loss on disposal of trading assets - 37,765 - -
Interest income on trading assets - - - -
Dividend income on trading assets 100,887 - - -
Gain/loss foreign exchange transation 348,920,815 195,206,579 348,920,815 195,206,579
Other 79,650 - - -
Net trading income 350,020,925 195,289,632 348,920,815 195,206,579
Trading income comprises gains less losses relating to trading assets and liabilities, and includes all realized interest, dividend and
foreign exchange differences as well as unrealized changes in fair value of trading assets and liabilities are presented under this
account head. Foreign exchange transactions results include gains and losses from spot and forward contracts and translated foreign
currency assets and liabilities.
4.34 Other operating income

Amount in NPR
GROUP BANK
Particulars
Foreign exchange revauation gain 2,540,424 14,744,239 2,540,424 14,744,239
Gain/loss on sale of investment securities - (1,506,280) - (1,506,280)
Fair value gain/loss on investment properties - - - -
Dividend on equity instruments 30,958,693 10,802,981 30,958,693 10,789,107
Gain/loss on sale of property and equipment 28,275,667 4,004,930 28,275,667 4,004,930
Gain/loss on sale of investment property 5,363,679 39,893,310 5,363,679 39,893,310
Operating lease income - - - -
Gain/loss on sale of gold and silver 8,835,738 15,689,713 8,835,738 15,689,713
Other - - - -
Total 75,974,201 83,628,893 75,974,201 83,615,018
4.35 Impairment charge/(reversal) for loan and other losses

Amount in NPR
GROUP BANK
Particulars
Impairment charge/(reversal) on loan and advances to B/FIs 22,883,652 30,584,805 22,883,652 30,584,805
Impairment charge/(reversal) on loan and advances to
591,250,050 282,529,331 576,034,147 274,246,768
customer
Impairment charge/(reversal) on financial Investment 7,694,286 - - -
Impairment charge/(reversal) on placement with banks and
- - - -
financial institutions
Impairment charge/(reversal) on property and equipment - - - -
Impairment charge/(reversal) on goodwill and intangible
- - - -
assets
Impairment charge/(reversal) on investment properties - - - -
Total 621,827,988 313,114,135 598,917,799 304,831,572

4.36 Personnel Expense
Amount in NPR
GROUP BANK
Particulars
Salary 828,076,421 571,394,983 791,528,905 557,440,861
Allowances 714,099,598 556,755,937 693,168,253 552,806,861
Gratuity expense 29,682,340 20,354,085 28,218,112 19,303,562
Provident fund 58,858,817 47,727,836 56,424,539 47,274,172
Uniform 15,602,466 17,995,270 15,602,466 17,995,270
Training & development expense 66,823,351 43,502,518 64,237,498 43,089,135
Leave encashment 66,326,868 54,727,752 62,622,381 54,423,885
Medical 8,285,460 10,529,081 8,248,440 10,529,081
Insurance 3,649,517 8,262,096 3,649,517 8,262,096
Employees incentive 74,875,117 - 74,695,889 -
Cash-settled share-based payments - - - -
Pension expense - - - -
Finance expense under NFRS 105,456,236 198,921,707 105,456,236 198,921,707
Other expenses related to staff 79,973,104 71,124,996 79,561,660 70,888,225
Subtotal 2,051,709,297 1,601,296,262 1,983,413,896 1,580,934,856
Employees bonus 514,046,219 203,279,007 493,417,301 201,178,092
Grand total 2,565,755,516 1,804,575,268 2,476,831,196 1,782,112,947
Provision for staff bonus is a mandatory requirement under the requirement of the Bonus Act, 2030. All expenses related to employees
of a Bank has been included under this head. Expenses covered under this head include employees' salary, allowances, pension,
gratuity, contribution to provident fund, training expenses, uniform expenses, insurance, staff bonus, finance expense under NFRS,
cash-settled share-based payments etc. Staff Loans are fair valued using the market rates.
4.37 Other operating expense

Amount in NPR
GROUP BANK
Particulars
Directors' fee 7,667,500 4,228,000 7,176,000 4,178,000
Directors' expense 5,224,763 4,518,219 5,210,243 4,518,219
Auditors' remuneration 2,822,180 2,113,000 2,486,000 2,000,000
Other audit related expense - - - -
Professional and legal expense 23,887,535 28,276,718 23,887,535 28,256,448
Office administration expense 892,673,437 581,282,809 868,554,749 575,205,050
Operating lease expense 350,480,464 181,178,083 339,229,890 177,612,016
Operating expense of investment properties - - - -
Corporate social responsibility expense - - - -
Onerous lease provisions - - - -
Other 468,167,379 446,669,943 466,291,820 445,323,101
Total 1,750,923,259 1,248,266,772 1,712,836,238 1,237,092,835
All operating expenses other than those relating to personnel expense are recognized and presented under this account head. The
expenses covered under this head includes office administration expense, other operating and overhead expense, directors' meeting
fees and audit fee paid to auditors, professional and legal expense, redundancy cost expense of corporate social responsibility, lease
provisions etc. No individual operating lease has terms and conditions that significantly affect the amount, timing and certainty of
the consolidated cash flows of the Group.

4.38 Depreciation & Amortisation

Amount in NPR
GROUP BANK
Particulars
Depreciation on property and equipment 189,075,150 104,981,144 180,505,038 101,805,046
Depreciation on investment property - - - -
Amortisation of intangible assets 24,149,488 14,379,577 23,527,905 13,998,997
Total 213,224,638 119,360,721 204,032,944 115,804,043
Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. Amortization is the systematic
allocation of the depreciable amount of an intangible asset over its useful life. Depreciation measured and recognized as per NFRS
on property and equipment, and investment properties, and amortization of intangible assets is presented under this account head.
4.39 Non operating income

Amount in NPR
GROUP BANK
Particulars
Recovery of loan written off 26,430,713 2,500,650 26,430,713 2,500,650
Other income 4,673,838 - 4,873,838 -
Total 31,104,551 2,500,650 31,304,551 2,500,650
4.40 Non operating expense

Amount in NPR
GROUP BANK
Particulars
Loan written off 100,192,286 31,152,561 100,192,286 31,152,561
Redundancy provision - - - -
Expense of restructuring - - - -
Other expense 3,973,187 79,040,158 3,973,187 79,040,158
Total 104,165,473 110,192,719 104,165,473 110,192,719
The income and expenses that have no direct relationship with the operation of transactions are presented under this head. The
income/expense covered under this account head includes loan written off, recovery of loan, redundancy provision, expense of
restructuring etc.

4.41 Depreciation & Amortisation
Amount in NPR
GROUP BANK
Particulars
Current tax expense 1,425,799,079 530,722,814 1,368,655,984 525,425,880
Current year 1,322,438,486 530,722,814 1,265,295,391 525,425,880
Adjustments for prior years 103,360,593 103,360,593
Deferred tax expense 45,599,397 (49,464,804) 48,817,056 (49,684,980)
Origination and reversal of temporary differences 45,599,397 (49,464,804) 48,817,056 (49,684,980)
Changes in tax rate
Recognition of previously unrecognised tax losses
Total income tax expense 1,471,398,476 481,258,010 1,417,473,040 475,740,900
The amount of income tax on net taxable profit is recognized and presented under this account head. This account head includes
current tax expense and deferred tax expense/deferred tax income. NPR 103,360,593 has been paid as income tax for the accrued
interest up to FY 2073/74 as a result of adoption of NFRS by the Bank.
4.41.1 Reconciliation of tax expense and accounting profit

Amount in NPR
GROUP BANK
Particulars
Profit before tax 4,626,378,946 1,826,248,111 4,440,755,706 1,810,602,827
Tax amount at tax rate of 30 % 1,387,913,684 547,874,433 1,332,226,712 543,180,848

Add: Tax effect of expenses that are not deductible for tax
117,318,424 84,512,536 117,318,424 84,512,536
purpose
Less: Tax effect on exempt income (184,249,745) (102,267,504) (184,249,745) (102,267,504)
Add/less: Tax effect on other items 103,360,593 603,349 103,360,593
Total income tax expense 1,424,342,956 530,722,814 1,368,655,984 525,425,880
Effective tax rate 30.8% 29.1% 30.8% 29.0%

STATEMENT OF DISTRIBUTABLE PROFIT OR LOSS
Amount in NPR
As at As at
16 July 2019 16 July 2018
Net profit or (loss) as per statement of profit or loss 3,023,282,666 1,334,861,927
Appropriations:
a. General reserve 604,656,533 266,972,385
b. Foreign exchange fluctuation fund 635,106 3,686,060
c. Capital redemption reserve 130,952,378 71,428,572
d. Corporate social responsibility fund 30,232,827 13,348,619
e. Employees' training fund - -
f. Other - -
- Deferred Tax reserve (41,845,804)
- Investment Adjustment Reserve 11,959,548 15,772,093
- Share Premium
Profit or (loss) before regulatory adjustment 2,286,692,078 963,654,197
Regulatory adjustment : (272,070,442) (455,575,876)
a. Interest receivable (-)/previous accrued interest received (+) (26,368,994) (390,117,572)
b. Short loan loss provision in accounts (-)/reversal (+)
c. Short provision for possible losses on investment (-)/reversal (+)

d. Short loan loss provision on Non Banking Assets (-)/resersal (+) (201,555,634) (74,382,923)
e. Deferred tax assets recognised (-)/ reversal (+) (54,244,185) 54,244,185
f. Goodwill recognised (-)/ impairment of Goodwill (+)
g. Bargain purchase gain recognised (-)/resersal (+)
h. Acturial loss recognised (-)/reversal (+) 11,690,064 (46,911,260)
i. Other (+/-)
- Debt securities recognised at amortised cost
Other Reserve
- Fair value reserve (1,591,694) 1,591,694
Distributable profit or (loss) 2,014,621,636 508,078,321
Interest collected till Shrawan 15, 2076 of NPR 30,525,777 has been considered and not been transferred from regulatory reserve
as per circular no. 27/075/76.
NPR 41,845,804 has been transferred from Deferred Tax Reserve to Retained Earning. As on the reporting date, the Deferred Tax
Liabilities has been created as a result the corresponding Deferred Tax Reserve on the books is no longer required.

COMPARISON UNAUDITED AND AUDITED FINANCIAL STATEMENTS AS OF 2075/76
NPR in '000'
As per unaudited As per Audited Variance

Reasons for Variance
Financial Statement Financial Statement In amount In %
Statement of Financial Position
Assets
Cash and cash equivalent 20,214,540 20,214,540 - 0.00%
Due from NRB and placements with BFIs 16,097,915 16,097,915 - 0.00%
Loan and advances 149,506,059 149,497,291 (8,768) -0.01% Additional LLP Booked
Investments Securities 18,152,959 18,152,959 - 0.00%
Investment in subsidiaris and associates 1,204,500 1,204,500 -
Goodwill and intangible assets 110,490 110,490 -
Salary of CEO of Laghubitta deputed
Other assets 12,415,799 12,419,353 3,554 0.03%
from Bank reimbursed
Total Assets 217,702,263 217,697,049 (5,214) 0.00%
Capital and Liabilities
Paid up Capital 8,834,229 8,834,229 - 0.00%
Reserves and surplus 6,131,584 6,101,507 (30,077) -0.49% Decrease in profit
Deposits 185,356,335 185,356,335 - 0.00%
Borrowings - - -
Bond and Debenture 7,710,097 7,710,097 - 0.00%
Booking of additional lease liabilities,
Other liabilities and provisions 9,670,018 9,694,881 24,863 0.26%
adjustment of deferred tax
Total Capital and Liabilities 217,702,263 217,697,049 (5,214) 0.00%
Statement of Profit or Loss

Interest income 19,345,594 19,345,594 - 0.00%
Interest expense 12,385,561 12,385,561 - 0.00%
Net interest income 6,960,033 6,960,033 - 0.00%
Fee and commission income 2,248,911 2,248,906 (4) 0.00% Prepayment charges reimbursed
Fee and commission expense 127,599 127,599 -
Net fee and commission income 2,121,312 2,121,307 (4) 0.00% Prepayment charges reimbursed
Other operating income 424,895 424,895 - 0.00%
Total operaing income 9,506,239 9,506,235 (4) 0.00% Prepayment charges reimbursed
Impairment charge/(reversal) for loans and other
590,149 598,918 8,768 1.49% Additional LLP Booked
losses
Net operating income 8,916,090 8,907,317 (8,773) -0.10%
Salary of CEO of Laghubitta deputed
Personnel expenses 2,486,791 2,476,831 (9,959) -0.40% from Bank reimbursed, decrease of
bonus
Other operating expenses 1,853,891 1,916,869 62,978 3.40% Booking of additional lease liabilities
Operating profit 4,575,408 4,513,617 (61,791) -1.35%
Non operating income/expense (75,206) (72,861) 2,346 -3.12% SLA reimbursement of Laghubitta
Profit before tax 4,500,201 4,440,756 (59,446) -1.32%
Income tax 1,446,897 1,417,473 (29,424) -2.03% Decrease of profit
Profit /(loss) for the period 3,053,304 3,023,283 (30,021) -0.98%
Other comprehensive income 296,998 296,998 - 0.00%
Total comprehensive income 3,350,302 3,320,281 (30,021) -0.90%
Distributable Profit
Net profit/(loss) as per profit or loss 3,053,304 3,023,283 (30,021) -0.98%
Add/Less: Regulatory adjustment as per NRB decrease of profit and additional
(900,447) (1,036,956) (136,509) 15.16%
Directive capital redemption reserve
Free profit/(loss) after regulatory adjustments 2,152,857 1,986,327 (166,530) -7.74%

PRINCIPAL INDICATORS
FY FY FY FY FY
Ratio Indicators
2014/15 2015/16 2016/17 2017/18 2018/19
1. Net Profit/Gross Income Percent 32.36 40.83 42.91 24.91 31.80
2. Earnings Per Share (as per NAS 26 - Earning per Share) NPR 25.59 28.31 23.06 16.62 34.22
3. Market Value Per Share NPR 617 798 445 316 448
4. Price Earning Ratio Ratio 24.11 28.19 19.30 19.01 13.09
5. Dividend (including bonus) on Share Capital Percent 41.05 27.37 21.05 10.00 21.053
6. Cash Dividend on Share Capital Percent 2.05 1.37 1.05 0.526 11.053
7. Interest Income/Loans and Advances & Investment Percent 8.31 7.77 9.10 10.12 11.74
8. Staff Expenses/Total Operating Expenses Percent 48.28 51.59 53.03 61.48 56.85
9. Interest Expenses/Total Deposits and Borrowings Percent 5.12 4.41 5.61 6.53 6.71
10. Exchange Gain/Total Income Percent 2.84 3.29 2.36 1.42 1.60
11. Total Cost/Total Revenue Percent 41.56 40.30 46.14 62.04 49.33
12. Staff Bonus/Total Staff Expenses Percent 23.01 28.21 24.85 11.29 19.92
13. Staff Cost Per Employee NPR 577,778 493,478 478,768 777,876 713,373
14. Net Profit Per Employee NPR 931,941 969,034 839,582 582,655 870,761
15. Total Credit/Deposits Percent 81.03 85.62 83.70 86.30 84.55
16. Total Operating Expenses/Total Assets Percent 1.44 1.31 1.60 1.83 2.02
17. Capital Adequacy (On Risk Weighted Assets)
Core Capital Percent 10.53 10.69 12.38 8.66 8.24
Supplementary Capital Percent 1.96 1.75 1.45 3.58 5.08
Total Capital Fund Percent 12.49 12.44 13.83 12.24 13.32
18. Liquidity (CRR) Percent 28.91 23.79 25.80 24.45 26.05
19. Net Profit / Total Loan Multiple 1.57 1.79 2.03 1.10 2.00
20. Gross Non-Performing Credit/Total Credit Ratio 2.07 0.76 0.36 0.06 0.46
21. Net Non-Performing Credit/Total Credit Ratio 0.41 0.11 0.04 0.01 0.23
22. Weighted Average Interest Rate Spread Percent 3.19 3.36 3.49 3.60 5.02
23. Return on Total Assets Percent 1.21 1.51 1.64 0.97 1.56
24. Return on Equity Percent 13.05 16.50 16.84 12.09 22.73
25. Book Net Worth NPR 207 161 151 145 169
26. Number of Shares No. 26,582,848 45,753,743 66,925,975 80,311,170 88,342,287
27. Number of Staff No. 730 1101 1755 2,291 3,472
28. Number of Branches No. 67 67 119 231 292
29. Number of ATMs No. 68 69 70 220 302

SIGNIFICANT
ACCOUNTING
POLICIES
1. REPORTING ENTITY banking products and services to the deprived sectors/

communities.
NIC ASIA Bank Limited (“NICA” or “the Bank”) is a limited liability
company domiciled in Nepal which has been in operation in The financial year of both of the subsidiaries is same as that of
Nepal since 1998. The Bank is registered with the Office of the Bank ending on 16 July 2019 (31st Ashad 2076).
Company Registrar as a public limited company and carries
out commercial banking activities in Nepal under the license 1.2. “The group” represents the Bank and its
from Nepal Rastra Bank as Class “Ka” licensed institution. It’s subsidiaries.
registered, and corporate office are at Kathmandu, Nepal.
2. BASIS OF PREPARATION
The Bank offers full commercial banking services of banking
products and services including loans and advances, deposits, The financial statements of the Bank have been prepared on
trade finance, e-commerce services, bullion, etc. to wide range accrual basis of accounting in accordance with Nepal Financial
of clients encompassing individuals, corporates, multinationals, Reporting Standards (NFRS) as published by the Accounting
large public sector companies, government corporations, etc. Standards Board (ASB) Nepal and pronounced by The Institute
as authorized by the Nepal Rastra Bank (Central Bank of Nepal). of Chartered Accountants of Nepal (ICAN) and in the format
issued by Nepal Rastra Bank through Directive No. 4 of NRB
The Bank is listed on Nepal Stock Exchange and its stock Directives, 2075.
symbol is “NICA”
The financial statements comprise the Statement of Financial
1.1. Subsidiaries Position, Statement of Profit or Loss,Statement of Other
Comprehensive Income, the Statement of Changes in Equity,
The Bank has two wholly owned subsidiaries namely NIC
the Statement of Cash Flows and the Notes to the Accounts.
ASIA Capital Limited and NIC ASIA Laghubitta Bittiya Sanstha
Limited. 2.1 Statement of Compliance
NIC ASIA Capital Limited is wholly owned subsidiary of the The financial statements have been prepared and approved
Bank and was incorporated on 15 May 2016 as a public by the Board of Directors in accordance with Nepal Financial
limited company as per the Companies Act 2063 and Reporting Standards (NFRS) and as published by the
licensed by Securities Board of Nepal under the Securities Accounting Standards Board (ASB) Nepal and pronounced by
Businessperson (Merchant Banker) Regulations, 2008 The Institute of Chartered Accountants of Nepal (ICAN) and in
to provide merchant banking and investment banking the format issued by Nepal Rastra Bank through Directive No.
services. 4 of NRB Directives, 2075.
NIC ASIA Laghubitta Bittiya Sanstha Limited is also a These policies have been consistently applied to all the years
wholly owned subsidiary of the Bank and was incorporated presented except otherwise stated.
on 25 July 2017 as a public limited company under
Companies Act, 2063 and licensed by Nepal Rastra Bank 2.2 Reporting period and approval of financial
as “D” class financial institution having registered office at statements
Jajarkot, Nepal. The principle activities involved extending The Bank has, for the preparation of financial statements,

adopted the NFRS pronounced by Accounting Standard Board have been applied along with the nature and effect of changes
with effect from fiscal year 2074/75. The bank has prepared of accounting estimates, if any.
financial statement for the fiscal year 2075/76 in accordance
with NFRS. 2.4.1 Going Concern
The financial statements are prepared on a going concern
The approval of financial statements accompanied notes to
basis, as the Board of the Bank is satisfied that the Bank has
the financial statements have been adopted by the Board
the resources to continue in business for the foreseeable
of Directors in its 418th meeting held on 28th August, 2019
future. In making this assessment, the Board of Directors have
and the Board acknowledges the responsibility of preparation
considered a wide range of information relating to present and
of financial statements of the Bank. The approved financial
future conditions, including future projections of profitability,
statements have been recommended for approval by the
cash flows and capital resources.
shareholders in the 23rd annual general meeting of the Bank.
2.5 Changes in Accounting Policies
The Board of Directors may decide to amend the annual
accounts as long as these are not adopted by the general The bank had adopted NFRS for the first time in previous year.
meeting of the shareholders. The general meeting of The Bank prepared the statement of financial position as per
shareholders may decide not to adopt the annual accounts but Nepal Financial Reporting Standard (NFRS) by recognizing all
may not amend these. assets and liabilities whose recognition was required by NFRS,
not recognizing the items of assets or liabilities which were
2.3 Functional and Presentation Currency not permitted by NFRS, and applying NFRS in measurement of
The financial statements are presented in Nepalese Rupees recognized assets and liabilities.
(NPR) which is also the Bank’s functional currency. All financial
However, during the current year, there is no change in
information presented in NPR has been rounded off to the
accounting policies.
nearest rupee except where indicated otherwise.
2.6 Reporting Pronouncements
2.4 Use of Estimates, Assumptions and Judgements
The Bank has, for the preparation of financial statements,
The Bank, under NFRS, is required to apply accounting
adopted the NFRS pronounced by ASB as effective on 13
policies to most appropriately suit its circumstances and
September , 2013. The NFRS conform, in all material respect, to
operating environment. Further, the Bank is required to make
International Financial Reporting Standards (IFRS) as issued by
judgments in respect of items where the choice of specific
the International Accounting Standards Board (IASB).
policy, accounting estimate or assumption to be followed
could materially affect the financial statements. This may later However, the Institute of Chartered Accountants of Nepal
be determined that a different choice could have been more (ICAN) vide its notice dated 20 September 2018 has resolved
appropriate. that Carve-outs in NFRS with Alternative Treatment and
effective period shall be provided to the Banks and Financial
The accounting policies have been included in the relevant
Institutions regulated by NRB on the specific recommendation
notes for each item of the financial statements and the effect
of Accounting Standard Board (ASB). Details of carve out
and nature of the changes, if any, have been disclosed.
provided are as follows.
The NFRS requires the Bank to make estimates and
2.6.1 NFRS 10: Consolidated Financial Statements
assumptions that will affect the assets, liabilities, disclosure of
contingent assets and liabilities, and profit or loss as reported In para 19 of NFRS 10, a parent shall prepare consolidated
in the financial statements. The Bank applies estimates financial statements using uniform accounting policies for like
in preparing and presenting the financial statements and transactions and other events in similar circumstances unless
such estimates and underlying assumptions are reviewed it is impracticable to do so.
periodically. The revision to accounting estimates are
recognized in the period in which the estimates are revised The carve out no. 1 is optional and has been provided for the FY
and are applied prospectively. 2017-18 to 2019-20. Accordingly, the bank has opted the carve
out.
Disclosures of the accounting estimates have been included
in the relevant sections of the notes wherever the estimates

2.6.2 NAS 17: Lease b) Impracticability to determine transaction cost of all
previous years which is the part of effective interest
In para 33, lease payments under an operating lease shall be
rate
recognized as an expense on a straight-line basis over the
lease term unless either: In para 9, the effective interest rate is the rate that exactly
discounts estimated future cash payments or receipts
Another systematic basis is more representative of the through the expected life of the financial instrument or, when
time pattern of the user’s benefit even if the payments to appropriate, a shorter period to the net carrying amount of
the lessors are not on that basis; or the financial asset or financial liability. When calculating the
effective interest rate, an entity shall estimate cash flows
The payments to the lessor are structured to increase in
considering all contractual terms of the financial instrument
line with expected general inflation to compensate for the
(for example, prepayment, call and similar options) but shall
lessor’s expected inflationary cost increases. If payments
not consider future credit losses. The calculation includes
to the lessor vary because of factors other than general
all fees and points paid or received, unless it is immaterial or
inflation, then this condition is not met.
impracticable to determine reliably, between parties to the
2.6.3 NAS 34: Interim Financial Reporting contract that are an integral part of the effective interest rate
(see NAS 18 Revenue), transaction costs and all other premiums
In para 2, if an entity’s interim financial report is described or discounts. There is a presumption that the cash flows and
as complying with NFRSs, it must comply with all of the the expected life of a group of similar financial instruments
requirements of this Standard. Paragraph 19 requires certain can be estimated reliably. However, in those rare cases when
disclosures in that regard. However, an entity shall not require it is not possible to estimate reliably the cash flows or the
to restate its corresponding previous interim period balance if expected life of a financial instrument (or group of financial
it is impracticable to restate. instruments), the entity shall use the contractual cash flows
over the full contractual term of the financial instrument (or
The carve out is optional and has been provided for the FY
group of financial instruments).
2017-18 and 2018-19.
The carve out is optional and has been provided for the FY
Accordingly, the bank has opted the carve out.
2017-18 and 2018-19. Accordingly, the bank has opted the
2.6.4 NAS 39: Financial Instruments: Recognition and carve out.
Measurement
c) Impracticability to determine interest income on
a) Impairment amortized cost
In para 58, an entity shall assess at the end of each reporting In para AG 93, once a financial asset or a group of similar financial
period whether there is any objective evidence that a financial assets has been written down as a result of an impairment
asset or group of financial assets measured at amortized cost loss, interest income is thereafter recognized using the rate
is impaired. If any such evidence exists, the entity shall apply of interest used to discount the future cash flows for the
paragraph 63 to determine the amount of any impairment loss purpose of measuring the impairment loss. Interest income
unless the entity is bank or financial institutions registered as shall be calculated by applying effective interest rate to the
per Bank and Financial Institutions Act, 2073. Such entities gross carrying amount of a financial asset unless the financial
shall measure impairment loss on loan and advances as the asset is written off either partially or fully.
higher of amount derived as per norms prescribed by Nepal
Rastra Bank for loan loss provision and amount determined The carve out is optional and has been provided for the FY
as per paragraph 63; and shall apply paragraph 63 to measure 2017-18 and 2018-19. Accordingly, the bank has opted the
the impairment loss on financial assets other than loan and carve out.
advances. The entity shall disclose the impairment loss as per
2.7 New Standards in issue but not yet effective
this carve-out and the amount of impairment loss determined
as per paragraph 63. For the reporting of financial instruments, NAS 32 Financial
Instruments, Presentation, NAS 39 Financial Instruments
The carve out is not optional and has been provided for the FY Recognition and Measurements and NFRS 7 Financial
2017-18 to 2019-20. Instruments – Disclosures have been applied. NRFS 9 has
been complied for the classification of Financial Instruments.

A number of new standards and amendments to the existing events occurring within the next 12 months (12-month ECL). For
standards and interpretations have been issued by IASB after those financial assets with a remaining maturity of less than 12
the pronouncements of NFRS with varying effective dates. months, a Probability of Default (PD) is used that corresponds
Those become applicable when ASB Nepal incorporates them to the remaining maturity. Interest will be calculated on the
within NFRS. In this connection, ASB has issued Exposure Draft gross carrying amount of the financial asset before adjusting
of Nepal Financial Reporting Standards (NFRSs) 2018. NFRSs for ECL
2018 is yet to be pronounced by the Institute of Chartered
Accountants of Nepal. Stage 2: Lifetime ECL – Significantly increased credit risk
in the event of a significant increase in credit risk since
NFRSs 2018 shall introduce following standards which shall be initial recognition, a provision is required for the lifetime ECL
applicable to the bank representing losses over the life of the financial instrument
(lifetime ECL).
NFRS 15 Revenue from Contracts with Customers: The
standard shall supersede existing NAS 18 Revenue and Interest income will continue to be recognized on a gross basis.
NAS 11 Construction Contract
Stage 3: Lifetime ECL – Defaulted Financial instruments that
NFRS 16 Leases: It shall supersede NAS 17 Leases, IFRIC 4 move into Stage 3 once credit impaired and purchases of
Determining whether an Arrangement contains lease, SIC- credit impaired assets will require a lifetime provision. Interest
15 Operating Lease – Incentives and SIC-27 Evaluating the income will be calculated based on the gross carrying amount
Substance of Transactions Involving the Legal Form of a of the financial asset less ECL.
Lease.
2.8.2 IFRS-15: Revenue from contract with customers:
2.8 New Standards and Interpretations Not adapted
The IASB issued a new standard for revenue recognition which
The following amendments are not mandatory and have not overhauls the existing revenue recognition standards. The
been early adopted by the group. The Bank is still currently standard requires the following five step model framework to
assessing the detailed impact of these amendments – be followed for revenue recognition:
2.8.1 IFRS 9 ‘Financial Instruments’-Impairment Identification of the contracts with the customer
IFRS 9 ‘Financial Instruments’ was issued by the IASB in July Identification of the performance obligations in the
2014 and effective internationally for the financials beginning contract
on or after 1 January 2018. Accounting Standard Board of Nepal Determination of the transaction price
endorsed NFRS 9 Financial Instruments with some exceptions,
Allocation of the transaction price to the performance
mainly in the Impairment. Currently, Incurred Loss Model
obligations in the contract (as identified in step ii)
as specified in NAS 39 is used. The requirement of IFRS 9 is
Expected Credit Loss Model. Recognition of revenue when the entity satisfies a
performance obligation.
Expected Credit Loss Model (ECL) of Impairment The new standard would be effective for annual periods
The Expected Credit Loss (ECL) model is a forward-looking starting from 1 January 2018 and early application is allowed.
model. The ECL estimates are unbiased, probability-weighted, The management is assessing the potential impact on its
and include supportable information about past events, current financial statements resulting from application of IFRS 15.
conditions, and forecasts of future economic conditions.
IFRS 15 Revenue from contract with customers has not yet
Under the general approach, IFRS 9 recognizes three stage been adopted by the Accounting Standard Board of Nepal.
approach to measure expected credit losses and recognized
interest income.
2.8.3 IFRS 16 ‘Leases’
IFRS 16 ‘Leases’ is effective for annual periods beginning on or
Stage 1: 12-month ECL – No significantly increased credit risk after 1 January 2019. IFRS 16 is the new accounting standard for
Financial instruments that have not had a significant increase in leases and will replace IAS 17 ‘Leases’ and IFRIC 4 ‘Determining
credit risk since initial recognition require, at initial recognition whether an Arrangement contains a Lease’. The new standard
a provision for ECL associated with the probability of default removes the distinction between operating or finance leases

for lessee accounting, resulting in all leases being treated as financial and operating policies of an entity to obtain benefits
finance leases. All leases will be recognized on the statement from its activities. In assessing control, the Group takes
of financial position with the optional exceptions for short- into consideration potential voting rights that currently are
term leases with a lease term of less than 12 months and exercisable.
leases of low-value assets (for example mobile phones or
laptops). A lessee is required to recognize a right-of-use The Bank measures goodwill at the acquisition date as;
asset representing its right to use the underlying leased
the fair value of the consideration transferred, plus
asset and a lease liability representing its obligation to make
lease payments. The main reason for this change is that this the recognized amount of any non-controlling interests in
approach will result in a more comparable representation of a the acquire, plus
lessee’s assets and liabilities in relation to other companies if the business combination is achieved in stages, the fair
and, together with enhanced disclosures, will provide greater value of the preexisting equity interest in the acquire, less
transparency of a lessee’s financial leverage and capital
the net recognized amount (generally fair value) of the
employed. The standard permits a lessee to choose either a full
identifiable assets acquired and liabilities assumed.
retrospective or a modified retrospective transition approach.
When the excess is negative, a bargain purchase gain is
2.9 Discounting recognized immediately in profit or loss.
Discounting has been applied where assets and liabilities are The consideration transferred does not include amounts
non-current, and the impact of the discounting is material. related to the settlement of pre-existing relationships.
Such amounts are generally recognized in profit or loss.
2.10 Limitation of NFRS Implementation Transaction costs, other than those associated with the
Wherever the information is not adequately available, and/ issue of debt or equity securities, that the Bank incurs in
or it is impracticable to adopt, such exception to NFRS connection with a business combination are expensed as
implementation has been noted and disclosed in respective incurred.
sections. Any contingent consideration payable is measured
at fair value at the acquisition date. If the contingent
3. SIGNIFICANT ACCOUNTING POLICIES consideration is classified as equity, then it is not re-
measured, and settlement is accounted for within equity.
3.1 Basis of Measurement Otherwise, subsequent changes in the fair value of the
The financial statements have been prepared on historical cost contingent consideration are recognized in profit or loss
basis except for the following material items in the statement except for measurement period adjustment.
of financial position:
There is no business combination during the fiscal year 2075-
Financial assets and liabilities are measured at fair value 76.
at it’s initial recognition. Subsequent recognition of FVTOCI
b. Non-Controlling Interest (NCI)
and FVTPL financial instruments are measured at fair
value. Investment property is measured at fair value For each business combination, the Bank elects to measure
any non-controlling interests in the acquiree either:
The liability for defined benefit obligations is recognized
as the present value of the defined benefit obligation at fair value; or
less the net total of the plan assets, plus unrecognized
at their proportionate share of the acquire identifiable net
actuarial gains, less unrecognized past service cost and
assets, which are generally at fair value.
unrecognized actuarial losses.
Changes in the Bank’s interest in a subsidiary that do not
3.2 Basis of Consolidation result in a loss of control are accounted for as transactions
with owners in their capacity as owners. Adjustments to non-
a. Business Combination
controlling interests are based on a proportionate amount of
Business combinations are accounted for using the acquisition the net assets of the subsidiary. No adjustments are made to
method as at the acquisition date i.e. when control is goodwill and no gain or loss is recognized in profit or loss.
transferred to the Bank. Control is the power to govern the

Since, both the subsidiaries are wholly owned, there is no non- consolidates an SPE:
controlling interest.
The activities of the SPE are being conducted on behalf of
c. Subsidiaries the Bank according to it specific business needs so that
the Bank obtains benefits from the SPE’s operation.
Subsidiaries are the entities controlled by the Bank. The Bank
controls an entity if it is exposed, or has rights, to variable The Bank has the decision-making powers to obtain the
returns from its involvement with the investee and has the majority of the benefits of the activities of the SPE or,
ability to affect those returns through its power over the by setting up an ‘autopilot’ mechanism, the Bank has
investee. The Financial Statements of subsidiaries are included delegated these decision-making powers.
in the Consolidated Financial Statements from the date that The Bank has rights to obtain the majority of the benefits
control commences until the date that control ceases. of the SPE and therefore may be exposed to risks incident
to the activities of the SPE.
The Bank reassesses whether it has control if there are
changes to one or more of the elements of control. In The Bank retains the majority of the residual or ownership
preparing the consolidated financial statements, the financial risks related to the SPE or its assets in order to obtain
statements are combined line by line by adding the like items benefits from its activities.
of assets, liabilities, equity, income, expenses and cash flows
f. Transaction Elimination on Consolidation
of the parent with those of its subsidiary. The carrying amount
of the parent’s investment in subsidiary and the parent’s All intra-group balances and transactions, and any unrealized
portion of equity of subsidiary are eliminated in full. All intra income and expenses (except for foreign currency transaction
group assets and liabilities, equity, income, expenses and cash gains or losses) arising from intra-group transactions are
flows relating to transactions between entities of the group eliminated in preparing the consolidated financial statements.
(such as interest income and technical fee) are eliminated in Unrealized losses are eliminated in the same way as unrealized
full while preparing the consolidated financial statements. gains, but only to the extent that there is no evidence of
impairment.
d. Loss of Control
3.3 Cash and Cash equivalent
Upon the loss of control, the Bank derecognizes the assets and
liabilities of the subsidiary, carrying amount of non-controlling Cash and cash equivalents include cash in hand, balances with
interests and the cumulative translation differences recorded B/FIs, money at call & short notice and highly liquid financial
in equity related to the subsidiary. Further parent’s share of assets with original maturities of three months or less from
components previously recognized in Other Comprehensive the acquisition dates that are subject to an insignificant risk
Income (OCI) is reclassified to profit or loss or retained of changes in their fair value and are used by the Bank in the
earnings as appropriate. Any surplus or deficit arising on the management of its short-term commitments.
loss of control is recognized in the profit or loss. If the bank
retains any interest in the previous subsidiary, then such Cash and cash equivalents are carried at amortized cost in the
interest is measured at fair value at the date that control is statement of financial position.
lost. Subsequently, it is accounted for as an equity-accounted
3.4 Financial Assets and Financial Liabilities
investee or in accordance with the Bank’s accounting policy
for financial instruments depending on the level of influence A. Recognition
retained.
The Bank initially recognizes a financial asset or a financial
liability in its statement of financial position when, and only
e. Special Purpose Entities
when, it becomes party to the contractual provisions of the
Special purpose entities (SPEs) are entities that are created instrument. The Bank initially recognize loans and advances,
to accomplish a narrow and well-defined objective. An SPE is deposits and debt securities/ subordinated liabilities issued
consolidated if, based on an evaluation of the substance of its on the date that they are originated which is the date that
relationship with the Bank and the SPE’s risks and rewards, the Bank becomes party to the contractual provisions of
the Bank concludes that it controls the SPE. the instruments. Investments in equity instruments, bonds,
debenture, Government securities, NRB bond or deposit
The following circumstances may indicate a relationship in
auction, reverse repos, outright purchase are recognized on
which, in substance, the Bank controls and consequently

trade date at which the Bank commits to purchase/ acquire fair value are recognized in other comprehensive income.
the financial assets. Regular way purchase and sale of financial
assets are recognized on settlement date. II. Financial Liabilities
The Bank classifies its financial liabilities, other than financial
B. Classification
guarantees and loan commitments, as follows;
I. Financial Assets
Financial Liabilities at Fair Value through Profit or Loss
The Bank classifies the financial assets subsequently
measured at amortized cost or fair value on the basis of the Financial liabilities are classified as fair value through profit
Bank’s business model for managing the financial assets or loss if they are held for trading or are designated at
and the contractual cash flow characteristics of the financial fair value through profit or loss. Upon initial recognition,
assets. transaction costs are directly attributable to the acquisition
are recognized in Statement of Profit or Loss as incurred.
The two classes of financial assets are as follows: except for particular liabilities designated as at FVTPL, the
amount of the change in the fair value that is attributable
i. Financial assets measured at amortized cost to changes in the liability’s credit risk is recognized in Other
The Bank classifies a financial asset measured at amortized Comprehensive Income.
cost if both of the following conditions are met:
Financial Liabilities measured at amortized cost
The asset is held within a business model whose objective All financial liabilities other than measured at fair value
is to hold assets in order to collect contractual cash flows though profit or loss are classified as subsequently
and measured at amortized cost using effective interest rate
method.
The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of C. Measurement
principal and interest on the principal amount outstanding.
i. Initial Measurement
ii. Financial asset measured at fair value A financial asset or financial liability is measured initially at fair
Financial assets other than those measured at amortized cost value plus or minus, for an item not at fair value through profit
are measured at fair value. Financial assets measured at fair or loss, transaction costs that are directly attributable to its
value are further classified into two categories as below: acquisition or issue. Transaction cost in relation to financial
assets and liabilities at fair value through profit or loss are
Financial assets at fair value through profit or loss. recognized in Statement of Profit or Loss.
Financial assets are classified as fair value through profit or
ii. Subsequent Measurement
loss (FVTPL) if they are held for trading or are designated
at fair value through profit or loss. Upon initial recognition, A financial asset or financial liability is subsequently
transaction cost is directly attributable to the acquisition measured either at fair value or at amortized cost based on
are recognized in profit or loss as incurred. Such assets are the classification of the financial asset or liability. Financial
subsequently measured at fair value and changes in fair asset or liability classified as measured at amortized cost is
value are recognized in Statement of Profit or Loss subsequently measured at amortized cost using effective
interest rate method.
Financial assets at fair value through other
comprehensive income The amortized cost of a financial asset or financial liability is
the amount at which the financial asset or financial liability
Investment in an equity instrument that is not held for is measured at initial recognition minus principal repayments,
trading and at the initial recognition, the Bank makes plus or minus the cumulative amortization using the effective
an irrevocable election that the subsequent changes in interest method of any difference between that initial amount
fair value of the instrument is to be recognized in other and the maturity amount, and minus any reduction for
comprehensive income are classified as financial assets at impairment or uncollectibility.
fair value though other comprehensive income. Such assets
are subsequently measured at fair value and changes in Financial assets classified at fair value are subsequently

measured at fair value. The subsequent changes in fair value of a liability reflects its non-performance risk.
of financial assets at fair value through profit or loss are
recognized in Statement of Profit or Loss whereas of financial For the purpose of Leases under NAS 17, Fair value is the
assets at fair value through other comprehensive income are amount for which an asset could be exchanged, or a liability
recognized in other comprehensive income. settled, between knowledgeable, willing parties in an arm’s
length transaction on the measurement date.
3.4.1 Derecognition
The fair values are determined according to the following
Derecognition of Financial Assets hierarchy:
The Bank derecognizes a financial asset when the contractual
rights to the cash flows from the financial asset expire, or it Level 1 fair value measurements are those derived from
transfers the rights to receive the contractual cash flows in a unadjusted quoted prices in active markets for identical assets
transaction in which substantially all the risks and rewards of or liabilities.
ownership of the financial asset are transferred or in which
Level 2 valuations are those with quoted prices for similar
the Bank neither transfers nor retains substantially all the risks
instruments in active markets or quoted prices for identical
and rewards of ownership and it does not retain control of the
or similar instruments in inactive markets and financial
financial asset.
instruments valued using models where all significant inputs
Any interest in such transferred financial assets that qualify are observable.
for derecognition that is created or retained by the Bank is
Level 3 portfolios are those where at least one input, which
recognized as a separate asset or liability. On derecognition of
could have a significant effect on the instrument’s valuation,
a financial asset, the difference between the carrying amount
is not based on observable market data.
of the asset (or the carrying amount allocated to the portion
of the asset transferred), and the sum of (i) the consideration When available, the Bank measures the fair value of an
received (including any new asset obtained less any new instrument using quoted prices in an active market for that
liability assumed) shall be recognized in profit or loss. instrument. A market is regarded as active if quoted prices
are readily and regularly available and represent actual
In transactions in which the Bank neither retains nor transfers
and regularly occurring market transactions on an arm’s
substantially all the risks and rewards of ownership of a
length basis. If a market for a financial instrument is not
financial asset and it retains control over the asset, the Bank
active, the Bank establishes fair value using a valuation
continues to recognize the asset to the extent of its continuing
technique. Valuation techniques include using recent arm’s
involvement, determined by the extent to which it is exposed
length transactions between knowledgeable, willing parties
to changes in the value of the transferred asset.
(if available), reference to the current fair value of other
De-recognition of Financial Liabilities instruments that are substantially the same, discounted cash
flow analyses.
A financial liability is derecognized when the obligation under
the liability is discharged or canceled or expired. Where an The best evidence of the fair value of a financial instrument
existing financial liability is replaced by another from the same at initial recognition is the transaction price – i.e. the fair
lender on substantially different terms, or the terms of an value of the consideration given or received. However, in
existing liability are substantially modified, such an exchange some cases, the fair value of a financial instrument on initial
or modification is treated as a derecognition of the original recognition may be different to its transaction price. If such
liability and the recognition of a new liability. The difference fair value is evidenced by comparison with other observable
between the carrying value of the original financial liability and current market transactions in the same instrument (without
the consideration paid is recognized in Statement of Profit or modification) or based on a valuation technique whose
Loss. variables include only data from observable markets, then the
difference is recognized in profit or loss on initial recognition
3.4.2 Determination of Fair Value of the instrument. In other cases, the difference is not
Fair value is the price that would be received to sell an asset recognized in profit or loss immediately but is recognized over
or paid to transfer a liability in an orderly transaction between the life of the instrument on an appropriate basis or when the
market participants at the measurement date. The fair value instrument is redeemed, transferred or sold, or the fair value
becomes observable.

All unquoted equity investments are recorded at cost, test is done on annual basis for trade receivables and other
considering the non-trading of promoter shares up to the date financial assets based on the internal and external indication
of balance sheet, the market price of such shares could not observed.
be ascertained with certainty. Hence, these investments are
recognized at cost net of impairment, if any. In assessing collective impairment, the Bank uses statistical
modelling of historical trends of the probability of default,
3.4.3 Impairment the timing of recoveries and the amount of loss incurred,
adjusted for management’s judgment as to whether current
At each reporting date the Bank assesses whether there is
economic and credit conditions are such that the actual losses
any indication that an asset may have been impaired. If such
are likely to be greater or less than suggested by historical
indication exists, the recoverable amount is determined. A
trends. Default rates, loss rates and the expected timing of
financial asset or a group of financial assets is impaired and
future recoveries are regularly benchmarked against actual
impairment losses are incurred if, and only if, there is objective
outcomes to ensure that they remain appropriate.
evidence of impairment as a result of one or more events
occurring after the initial recognition of the asset (a loss a) Impairment losses on assets measured at amortized cost
event), and that loss event (or events) has an impact on the
estimated future cash flows of the financial asset or group of As per NAS 39
financial assets that can be reliably estimated. Financial assets carried at amortized cost (such as amounts
due from Banks, loans and advances to customers as well as
The Bank considers the following factors in assessing held–to–maturity investments is impaired, and impairment
objective evidence of impairment: losses are recognized, only if there is objective evidence as
a result of one or more events that occurred after the initial
Whether the counterparty is in default of principal or
recognition of the asset. The amount of the loss is measured
interest payments.
as the difference between the asset's carrying amount and
When a counterparty files for bankruptcy and this would the deemed recoverable value of loan.
avoid or delay discharge of its obligation.
Where the Bank initiates legal recourse of recovery in Loans and advances to customers with significant value (Top
respect of a credit obligation of the counterpart. 50 borrowers and borrowers classified as bad as per Nepal
Rastra Bank Directive) are assessed for individual impairment
Where the Bank consents to a restructuring of the
test. The recoverable value of loan is estimated on the basis of
obligation, resulting in a diminished financial obligation,
realizable value of collateral and the conduct of the borrower/
demonstrated by a material forgiveness of debt or
past experience of the bank. Assets that are individually
postponement of scheduled payments.
assessed and for which no impairment exists are grouped
Where there is observable data indicating that there is a with financial assets with similar credit risk characteristics and
measurable decrease in the estimated future cash flows of collectively assessed for impairment. The credit risk statistics
a group of financial assets, although the decrease cannot for each group of the loan and advances are determined by
yet be identified with specific individual financial assets. management prudently being based on the past experience.
The Bank considers evidence of impairment for loans and For the purpose of collective assessment of impairment bank
advances and held-to-maturity investment securities at both has categorized assets in to six broad products as follows:
a specific asset and collective level. All individually significant
1. Term Loan
loans and advances and investment securities measured at
2. Auto Loan
amortized cost are assessed for specific impairment. Those
found not to be specifically impaired are then collectively 3. Home Loan
assessed for any impairment that has been incurred but not 4. Personal Loan
yet identified. 5. Working Capital Loan
6. Others
Loans and advances and investment securities measured
If, in a subsequent year, the amount of the estimated
at Amortized Cost that are not individually significant are
impairment loss increases or decreases because of an event
collectively assessed for impairment by grouping together
occurring after the impairment was recognised, the previously
loans and advances and investment securities measured at
recognised impairment loss is increased or reduced by
amortized cost with similar risk characteristics. Impairment

adjusting the other reserves and funds (impairment reserve) 3.6 Derivatives Assets and Derivative Liabilities
in statement of other comprehensive income and statement
Derivatives held for risk management purposes include all
of changes in equity. If a future write–off is later recovered,
derivative assets and liabilities that are not classified as trading
the recovery is credited to the ’Income Statement’.
assets or liabilities. Derivatives held for risk management
As per Loan Loss Provision of Nepal Rastra Bank purposes are measured at fair value in the statement of
financial position.
Loan loss provisions in respect of non-performing loans and
advances are based on management’s assessment of the Considering the requirement of NAS 39 for qualification of
degree of impairment of the loans and advances, subject to hedge accounting and cost benefits along with materiality,
the minimum provisioning level prescribed in relevant NRB Bank has not adopted hedge accounting for certain derivatives
guidelines. Provision is made for possible losses on loans and held for risk management.
advances including bills purchased at 1% to 100% on the basis
of classification of loans and advances, overdraft and bills 3.7 Property and Equipment
purchased in accordance with NRB directives.
a. Recognition and Measurement
Policies Adopted
The cost of an item of property and equipment shall be
As per the Carve out notice issued by ICAN, the Bank has recognized as an asset, initially recognized at cost, if, and only
measured impairment loss on loan and advances as the higher if:
of amount derived as per norms prescribed by Nepal Rastra
Bank for loan loss provision and amount determined as per it is probable that future economic benefits associated
paragraph 63 of NAS 39. with the item will flow to the entity; and
the cost of the item can be measured reliably.
b) Impairment of financial assets classified as fair value
through other comprehensive income Cost includes purchase price including any non-refundable
Where objective evidence of impairment exists for financial taxes after deducting volume rebates and trade discounts
assets measured at FVTOCI except investment in equity and such other costs that are incurred to bring asset to
instrument, the cumulative loss (measured as the difference location and condition to be operating in a manner intended
between the amortised cost and the current fair value, less any by management.
impairment loss on that financial asset previously recognised
The cost of self-constructed assets includes the following:
in the statement of profit or loss) is reclassified from equity
and recognised in the profit or loss. A significant or prolonged the cost of materials and direct labor;
decline in the fair value of an equity security below its cost
any other costs directly attributable to bringing the assets
is considered, among other factors in assessing objective
to a working condition for their intended use;
evidence of impairment for equity securities.
when the Bank has an obligation to remove the asset or
3.5 Trading Assets restore the site, an estimate of the costs of dismantling
and removing the items and restoring the site on which
Trading assets and liabilities are those assets and liabilities
they are located; and
that the Bank acquires or incurs principally for the purpose
of selling or repurchasing in the near term or holds as part of Capitalized borrowing costs for qualifying assets
a portfolio that is managed together for short-term profit or
position taking. The Bank adopts cost model for entire class of property and
equipment. Neither class of the property and equipment are
Trading assets and liabilities are initially recognized at fair value measured at revaluation model nor is their fair value measured
and subsequently measured at fair value in the statement of at the reporting date. The items of property and equipment
financial position, with transaction costs recognized in profit are measured at cost less accumulated depreciation and any
or loss. All changes in fair value are recognized as part of accumulated impairment losses.
net trading income in profit or loss as regarded as fair value
through profit & loss account. Purchased software that is integral to the functionality of the
related equipment is capitalized as part of that equipment.

Subsequent expenditure is capitalized if it is probable that the 3.8 Intangible Assets/ Goodwill
future economic benefits from the expenditure will flow to the
Goodwill
Bank. Ongoing repairs and maintenance to keep the assets in
working condition are expensed as incurred. Any gain or loss Any excess of the cost of acquisition over the fair values of the
on disposal of an item of property and equipment (calculated identifiable net assets acquired in Business Combination is
as the difference between the net proceeds from disposal and recognised as goodwill. Following initial recognition, goodwill
the carrying amount of the item) is recognized within other is measured at cost less any accumulated impairment losses.
income in profit or loss.
Goodwill is reviewed for impairment annually, or more
Assets with a value of less than NPR 10,000 are charged off to frequently, if events or changes in circumstances indicate that
revenue irrespective of their useful life in the year of purchase. the carrying value may be impaired.
b. Capital Work in Progress Acquired Intangible Assets
Fixed assets under construction and cost of assets not ready Intangible assets are initially measured at fair value, which
for use are shown as capital work in progress. reflects market expectations of the probability that the future
economic benefits embodied in the asset will flow to the Bank
c. Depreciation and are amortized on the basis of their expected useful lives.
Depreciation on other assets is calculated using the straight-
Computer software
line method to allocate their cost to their residual values over
their estimated useful life as per management judgement as Acquired computer software licenses are capitalized on the
follows: basis of the costs incurred to acquire and bring to use the
specific software. Costs associated with the development
Group Useful Life (In Years) of software are capitalized where it is probable that it will
Computer 5 generate future economic benefits in excess of its cost.
Metal Furniture 10 Computer software costs are amortized on the basis of
Office Equipment 10 expected useful life. Costs associated with maintaining
Vehicle 10 software are recognized as an expense as incurred.
Wooden Furniture 5
At each reporting date, these assets are assessed for indicators
Building 50
of impairment. In the event that an asset’s carrying amount
Leasehold Lower of 15 Years or Lease Period
is determined to be greater than its recoverable amount, the
asset is written down immediately.
Effect of Change in Depreciation Method in Existing Assets:
During the previous year, the Bank changed its method of Software is amortised on a straight-line basis in profit or loss
depreciation from the Written Down Method (WDV) into over its estimated useful life, from the date that it is available
Straight Line method based on useful life of the assets, and for use. The estimated useful life of software for the current
detailed disclosures has been provided under notes 5.13 in and comparative periods is five years. Software assets with
disclosure. costs less than Rs. 10,000 are charged off on purchases as
revenue expenditure.
d. De-recognition
Amortization methods, useful lives and residual values are
The carrying amount of Property and Equipment shall be
reviewed at each reporting date and adjusted if appropriate.
derecognized on disposal or when no future economic
benefits are expected from its use or disposal. The gain or
3.9 Accounting for Government Grants and Disclosure
loss arising from the de-recognition of an item of property and
of Government Assistance
equipment shall be included in profit or loss when the item is
derecognized except for sales & lease back transaction. The Government grants is recognised in profit or loss on a
gain shall not be classified as revenue. systematic basis over the periods in which the entity
recognises as expenses the related costs for which the grants
Depreciation method, useful lives and residual value are are intended to compensate. Income approach is followed in
reviewed at each reporting date and adjusted, if any. recording grant income.

Government grants related to the assets including non 3.10 Investment Property/Non-Current Assets Held
monetary grants at fair value is presented in the statement of for Sale
financial position by setting up Deferred Grant Income.
Investment Property
Grants related to income are presented as part of profit or loss Investment properties include land or land and buildings other
under other income. than those classified as property and equipment and non-
current assets held for sale. Generally, it includes land, land
During the year the Bank has received grant from Sakchyam
and building acquired by the Bank as non-banking assets but
Access to Finance for Poor Challenge Fund (AFPCF or the
remains unsold at the reporting date.
Project) Programme is an initiative funded by UK Aid. Refer
to Note 5.17 for disclosure on Sakchyam and reconciliation of The Bank holds investment property that has been acquired
Deferred Grant Income. through enforcement of security over the loans and advances.
Received for Sakchyam Access to Finance for Poor Challenge Non-Current Assets Held for Sale
Fund Programme:
Non-current assets (such as property) and disposal groups
Sakchyam Access to Finance for Poor Challenge Fund (AFPCF (including both the assets and liabilities of the disposal groups)
or the Project) Programme is an initiative funded by UK Aid are classified as held for sale and measured at the lower of
from the British Government as part of a bilateral agreement their carrying amount and fair value less cost to sell when: (i)
between the Governments of Nepal and the United Kingdom. It their carrying amounts will be recovered principally through
is managed by the Louis Berger Group Inc. for the Department sale; (ii) they are available-for-sale in their present condition;
of International Development (DFID Nepal) in partnership with and (iii) their sale is highly probable.
local and international institutions.
Immediately before the initial classification as held for sale,
The objective of the project is to provide Complete Banking the carrying amounts of the assets (or assets and liabilities
Solution to the rural populace through branches, branchless in a disposal group) are measured in accordance with the
banking outlets and Alternate Channels. applicable accounting policies described above.
The project aims at encouraging the development and 3.11 Income Tax
implementation of innovative and new financial products and
services aimed at poor people and communities, which deliver Tax expense comprises current and deferred tax expense.
socio-economic benefits to large number of poor people, Current tax and deferred tax are recognised in profit or loss
which are also commercially sustainable. In order to extend except to the extent that they relate to items recognised
various modern and convenient financial services to some directly in equity or in other comprehensive income.
Districts of Mid and Far Western region of Nepal, the Bank has
a. Current Tax
entered into an agreement with Sakchyam Access to Finance
Program implemented by Louis Berger for the Department Current tax is the expected tax payable or recoverable on the
of International Development (DFID Nepal). Through this taxable income or loss for the year, using tax rates enacted
agreement, the Bank has received financial grants as matching or substantively enacted at the reporting date, and any
fund towards its equal share of the expenditure of the adjustment to tax payable in respect of previous years.
project. The reimbursement of expenses received has been
accounted in accordance with Nepal Accounting Standard-10 b. Deferred Tax
on Government Grants. Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for
Grant received towards purchase of fixed assets has been
financial reporting purposes and the amounts used for
recognised to asset account. Any depreciation on the assets,
taxation purposes.
in the income statement will be reduced pro rata in accordance
with grant relative to the asset value. Deferred income tax is determined using tax rate applicable to
the Bank as at the reporting date which is expected to apply
Grant received as reimbursements of operating expenses
when the related deferred income tax asset is realized or the
incurred or to be incurred are recognized in profit or loss in the
deferred income tax liability is settled.
period when the costs are incurred.

Deferred tax assets are recognized where it is probable Provisions are reviewed at each reporting date and adjusted
that future taxable profit will be available against which the to reflect the current best estimate. If it is no longer probable
temporary differences can be utilized. that an outflow of resources would be required to settle the
obligation, the provision is reversed. Contingent assets are not
3.12 Deposits, debts securities issued and subordinated recognized in the financial statements if it is not probable that
liabilities the amount will be received. If it is probable then disclosure is
a. Deposits given for the contingent asset. However, contingent assets are
assessed continually and if it is virtually certain that an inflow
The Bank accepts deposits from its customers under account, of economic benefits will arise, the asset and related income
current, term deposits and margin accounts which allows are recognized in the period in which the change occurs.
money to be deposited and withdrawn by the account holder.
These transactions are recorded on the bank's books, and the 3.14 Revenue Recognition
resulting balance is recorded as a liability for the Bank and
Revenue is the gross inflow of economic benefits during the
represents the amount owed by the Bank to the customer.
period arising from the course of the ordinary activities of
b. Debt Securities Issued an entity when those inflows result in increases in equity,
other than increases relating to contributions from equity
It includes debentures, bonds or other debt securities issued participants. Revenue is recognized to the extent it is probable
by the Bank. Deposits, debt securities issued, and subordinated that the economic benefits will flow to the Bank and the
liabilities are initially measured at fair value minus incremental revenue can be reliably measured. Revenue is not recognized
direct transaction costs, and subsequently measured at their during the period in which its recoverability of income is not
amortised cost using the effective interest rate method, probable. The Bank’s revenue comprises of interest income,
except where the Group designates liabilities at fair value fees and commission, foreign exchange income, cards income,
through profit or loss. remittance income, bancassurance commission, etc. and the
bases of incomes recognition are as follows:
However, debentures issued by the bank are subordinate to
the deposits from customer. a. Interest Income
c. Subordinated Liabilities Interest income on available-for-sale assets and financial
assets held at amortised cost shall be recognized using the
Subordinated liabilities are those liabilities which at the event
bank’s normal interest rate which is very close to effective
of winding up are subordinate to the claims of depositors, debt
interest rate using effective interest rate method.
securities issued and other creditors. The bank does not have
any of such subordinated liabilities. For income from loans and advances to customers, initial
charges are not amortised over the life of the loan and
3.13 Provisions
advances as the income so recognized closely approximates
The Bank recognizes a provision if, as a result of past event, the income that would have been derived under effective
the Bank has a present constructive or legal obligation that interest rate method. The difference is not considered
can be reliability measured and it is probable that an outflow material. The Bank considers that the cost of exact calculation
of economic benefit will be required to settle the obligation. of effective interest rate method exceeds the benefit that
would be derived from such compliance.
A disclosure for contingent liability is made when there is a
possible obligation or a present obligation as a result of past The effective interest method is a method of calculating the
event that may but probably will not require an outflow of amortised cost of a financial asset or a financial liability and
resources. When there is a possible obligation or a present of allocating the interest income or interest expense over
obligation in respect of which the likelihood of outflow of the relevant period. The effective interest rate is the rate
resources is remote, no provision or disclosure is made. that discounts estimated future cash payments or receipts
through the expected life of the financial instrument or, when
A provision for onerous contract is recognized when the appropriate, a shorter period, to the net carrying amount of
expected benefits to be derived by the Bank from a contract the financial asset or financial liability. When calculating
are lower than the unavoidable cost of meeting its obligation the effective interest rate, the Bank estimates cash flows
under the contract. considering all contractual terms of the financial instrument

(for example, prepayment options) but does not consider unrealised fair value changes, interest, dividends and foreign
future credit losses. As per the Carve-out Notice issued by exchange differences.
ICAN, the calculation includes all fees paid or received between
parties to the contract that are an integral part of the effective e. Net Income from other financial instrument at fair
interest rate, transaction costs and all other premiums or value through Profit or Loss
discounts unless it is immaterial or impracticable to determine Net income from other financial instruments at fair value
reliably, between parties to the contract that are an integral through profit or loss relates to non-trading derivatives held for
part of the effective interest rate, transaction costs and all risk management purposes that do not form part of qualifying
other premiums or discounts. hedge relationships and financial assets and liabilities
designated at fair value through profit or loss. It includes all
The bank recognises the interest income on loans and advances
realised and unrealised fair value changes, interest, dividends
as per Guideline on Recognition of Interest Income, 2019.The
and foreign exchange differences.
bank has derecognised the interest income amounting to Rs.
5,127,755.32 in case of loan where contractual payments of 3.15 Interest expense
principal and/or interest are more than 12 months in arrears,
irrespective of the net realizable value of collateral. Further, Interest expense on all financial liabilities including deposits
the bank has derecognised the interest income amounting to are recognized in profit or loss using effective interest
Rs. 6,682,164.52 in case of loans where contractual payments rate method. Interest expense on all trading liabilities are
of principal and/or interest are more than 3 months in arrears considered to be incidental to the Bank’s trading operations
and where the “net realizable value” of security is insufficient and are presented together with all other changes in fair value
to cover payment of principal and accrued interest. of trading assets and liabilities in net trading income.
Loans 3.16 Employees Benefits
Gains and losses arising from changes in the fair value of a. Short Term Employee Benefits
financial instruments held at fair value through profit or loss Short term employee benefit obligations are measured on an
are included in the statement of profit or loss in the period in undiscounted basis and are expensed as the related service is
which they arise. Contractual interest income and expense on provided. A liability is also recognized for the amount expected
financial instruments held at fair value through profit or loss is to be paid under bonus required by the Bonus Act, 2030 to
recognized within net interest income. pay the amount as a result of past service provided by the
employee and the obligation can be estimated reliably under
b. Fees & Commission
short term employee benefits.
Fees and commissions are recognized on an accrual basis when
the service has been provided or significant act performed Short-term employee benefits include all the following items
whenever the benefit exceeds cost in determining such value. (if payable within 12 months after the end of the reporting
Whenever, the cost of recognizing fees and commissions on an period):
accrual basis exceeds the benefit in determining such value,
wages, salaries and social security contributions,
the fees and commissions are charged off during the year.
paid annual leave and paid sick leave,
c. Dividend Income profit-sharing and bonuses and
Dividend income are recognized when right to receive such non-monetary benefits
dividend is established. Usually this is the ex-dividend date
for equity securities. Dividends are presented in net trading b. Post-Employment Benefits
income, net income from other financial instruments at fair
Post-employment benefit plan includes the followings:
value through profit or loss or other revenue based on the
underlying classification of the equity investment.
d. Net Trading Income i. Defined Contribution Plan
Net trading income comprises gains less losses related to A defined contribution plan is a post-employment benefit plan
trading assets and liabilities, and includes all realised and under which the Bank pays fixed contributions into a separate
entity and has no legal or constructive obligation to pay further

amounts. Obligations for contributions to defined contribution after the reporting date, then they are discounted to their
plans are recognised as personnel expenses in profit or loss in present value.
the periods during which related services are rendered.
3.17 Leases
Contributions to a defined contribution plan that are due more
Lease payments under an operating lease shall be recognized
than 12 months after the end of the reporting period in which
as an expense on a straight-line basis over the lease term
the employees render the service are discounted to their
unless another systematic basis is more representative of the
present value.
time pattern of the user’s benefit even if the payments to the
All employees of the Bank are entitled to receive benefits lessors are not on that basis.
under the provident fund, a defined contribution plan, in which
3.18 Foreign Currency Translation
both the employee and the Bank contribute monthly at a pre-
determined rate of 10% of the basic salary. The Bank does not The financial statements are presented in Nepalese Rupees
assume any future liability for provident fund benefits other (NPR).
than its annual contribution.
Transactions in foreign currencies are initially recorded at the
ii. Defined Benefit plan functional currency using rate of exchange ruling at the date of
the transaction. Monetary assets and liabilities denominated in
A defined benefit plan is a post-employment benefit plan other
foreign currencies are retranslated at the functional currency
than a defined contribution plan. The Bank’s net obligation in
rate of exchange at the statement of financial position date.
respect of defined benefit plans is calculated separately for
each plan by estimating the amount of future benefit that Foreign exchange gains and losses resulting from the
employees have earned in return for their service in the current settlement of such transactions, and from the translation at
and prior periods. That benefit is discounted to determine its year-end exchange rates of monetary assets and liabilities
present value. Any unrecognised past service costs and the denominated in foreign currencies are recognised in the
fair value of any plan assets are deducted. statement of profit or loss.
The Bank recognises all actuarial gains and losses net of Non-monetary assets and liabilities are translated at historical
deferred tax arising from defined benefit plans immediately exchange rates if held at historical cost, or year-end exchange
in other comprehensive income and all expenses related to rates if held at fair value, and the resulting foreign exchange
defined benefit plans in employee benefit expense in profit or gains and losses are recognized in either the statement of
loss. profit or loss or other comprehensive income depending on
the treatment of the gain or loss on the asset or liability.
The Bank recognises gains and losses on the curtailment or
settlement of a defined benefit plan when the curtailment 3.19 Financial guarantee and loan commitment
or settlement occurs. The gain or loss on curtailment or Financial guarantees are contracts that require the Bank to
settlement comprises any resulting change in the fair value of make specified payments to reimburse the holder for a loss it
plan assets, any change in the present value of the defined incurs because a specified debtor fails to make payment when
benefit obligation, any related actuarial gains and losses and due in accordance with the terms of a debt instrument. Loan
any past service cost that had not previously been recognised. commitments are firm commitments to provide credit under
pre-specified terms and conditions.
iii. Termination Benefits
Termination benefits are recognised as an expense when the Loan commitment is the commitment where the Bank has
Bank is demonstrably committed, without realistic possibility confirmed its intention to provide funds to a customer or on
of withdrawal, to a formal detailed plan to either terminate behalf of a customer in the form of loans, overdrafts, future
employment before the normal retirement date, or to provide guarantees, whether cancellable or not, or letters of credit
termination benefits as a result of an offer made to encourage and the Bank has not made payments at the reporting date,
voluntary redundancy. Termination benefits for voluntary those instruments are included in these financial statements
redundancies are recognised as an expense if the Bank has as commitments.
made an offer of voluntary redundancy, it is probable that the
offer will be accepted, and the number of acceptances can be
estimated reliably. If benefits are payable more than 12 months

3.20 Share Capital and Reserves 5. DISCLOSURES AND ADDITIONAL INFOR-

The Bank classifies capital instruments as financial liabilities MATION
or equity instruments in accordance with the substance of 5.1 Risk Management
the contractual terms of the instruments. Equity is defined as
residual interest in total assets of the Bank after deducting Risk Management structure of the Bank has set clear separation
all its liabilities. Common shares are classified as equity of the between business function and risk management function.
Bank and distributions thereon are presented in statement of Accordingly, the Bank has set up a separate Integrated Risk
changes in equity. Management Department (IRMD) headed by Chief Risk Officer
(CRO), one of the most senior level positions in the Bank. The
Dividends on ordinary shares classified as equity are recognized IRMD oversees global, macro, micro and departmental level risk
in equity in the period in which they are declared. that arise out of daily business operation as well as on periodic
basis and are put to the oversight of Senior Management, Risk
Incremental costs directly attributable to the issue of an equity Management Committee and the Board to discuss the reports
instrument are deducted from the initial measurement of the thereon and issue instructions as appropriate.
equity instruments considering the tax benefits achieved
thereon. i. Risk Management Committee
The reserves include retained earnings and other statutory Board of Directors is the apex and supreme authority of
reserves such as general reserve, bond redemption reserve, the Bank and is responsible to frame and implement robust
foreign exchange equalization reserve, regulatory reserve, policies and framework for effective compliance of regulation
investment adjustment reserve, staff training and development and direction issued by the regulatory authority. BOD ensures
fund, CSR reserve etc.
3.21 Earnings per share including diluted

The Bank presents basic and diluted earnings per share
(EPS) data for its ordinary shares. The basic EPS is calculated
by dividing the profit or loss attributable to ordinary
shareholders of the Bank by the weighted average number BOARD
of ordinary shares outstanding during the period. Diluted
EPS is determined by adjusting the profit or loss attributable
to ordinary shareholders and the weighted average number Risk Management
CEO
of ordinary shares outstanding for the effects of all dilutive Committee
potential ordinary shares.
If the number of ordinary or potential ordinary shares

outstanding increases as a result of a capitalization due to
right share, bonus issue, the calculation of basic and diluted
earnings per share for all periods presented are adjusted
retrospectively. Assets and Liability
Chief Risk Officer Committee (ALCO)
3.22 Segment Reporting
The Bank is organized for management and reporting purposes
into segments such as Retail Banking, Corporate Banking,
SME Banking, Deprived Sector Banking, Treasury, Transaction
Banking and Other Banking. The segment results that are
reported include items directly attributable to a segment as Integrated Risk
well as those that can be allocated on a reasonable basis. Management Department
Unallocated items comprise mainly common assets, head
office expenses, and tax assets and liabilities.

the strategies, policies and procedure is in accordance with The Board is responsible for ensuring the Bank has
the risk appetite/tolerance limit for effective management appropriate internal control framework in place that supports
of risk within the Bank. The board understands the nature the achievement of the strategies and objectives. The various
of risk of the bank, and periodically reviews reports on risk functions of the Bank should be looked upon with a view
management, including policies and standards, stress testing, to establish a proper control mechanism is in place during
liquidity and capital adequacy through the reporting by the expansion and growth which enables it to maximize profitable
Risk Management Committee and the Asset- Liabilities business opportunities, avoid or reduce risks which can
Management Committee. cause loss or reputational damage, ensure compliance with
applicable laws and regulations and enhance resilience to
Pursuant to the NRB directive on corporate governance, the external events.
Bank has established Risk Management Committee with well-
defined terms of reference in line the NRB directive. At least The Board has set policies and procedures of risk identification,
four meeting is conducted on annual basis however number risk evaluation, risk mitigation and control/monitoring, in line
of meeting can be increased as per the requirement. The with the NRB directives has effectively implemented the same
committee supervise overall risk management of the Bank at the Bank.
broadly classified as liquidity risk, market risk, operational risk
and credit risk. The effectiveness of the Company’s internal control system is
reviewed regularly by the Board, its Committees, Management
ii. Risk Governance and Internal Audit department.
Bank has prepared and implemented policies and procedures The Internal Audit monitors compliance with policies/standards
to mitigate the risk at enterprises level arising to the bank and the effectiveness of internal control structures across
and has inculcated risk culture among the employees by the Bank through regular audit, special audit, information
establishing ownership mentality, capacity building programs, system audit, Off Site review, AML/CFT/KYC audit, ISO audit as
well defined job responsibilities and inhabiting good ethical well as Risk based Internal Audit (RBIA) approach. The audits
culture. observations are reported to the Chief Executive Officer and
Business Heads for initiating immediate corrective measures.
Through its Risk Management Framework, the Bank seeks to
Internal Audit reports are periodically forwarded to the Audit
efficiently manage credit, market and liquidity risks which arise
Committee for review and the committee issues appropriate
directly through the Bank’s commercial activities as well as
corrective action in accordance with the issue involved to the
operational, regulatory and reputational risks which arise as a
respective department, regional offices or branches.
normal consequence of any business undertaking.
5.1.1 Credit Risk
The Risk Management Committee is responsible for the
establishment of, and compliance with, policies relating to Credit risk is the probability of loss of principal and reward
overall risk. associated with it due to failure of counterparty to meet its
contractual obligations to pay the Bank in accordance with
The Assets and Liabilities Committee is responsible for the agreed terms. The Credit Risk Monitoring and Reporting
management of capital and establishment of, and compliance Framework/ have been prepared in order to mitigate/minimize
with, policies relating to balance sheet management, including the credit risk of the Bank through appropriate monitoring and
management of liquidity, capital adequacy and structural reporting framework established within the Bank.
foreign exchange and interest rate exposure and tax exposure.
Bank has implemented various System/ Policies/ Procedures/
The bank’s risk governance structure is such that the Guidelines for the effective management of Credit Risk. For
responsibility for maintaining risk within the banks risk blanket each type of loan, credit policies and procedures define criteria
is cascaded down from the Board to the appropriate functional, for granting loans in a safe and sound manner including but not
client business, senior management and committees. limited purpose of credit and source of repayment, collection of
Information regarding material risk issues and compliance with relevant information based on the different client risk profiles,
policies and standards is communicated through the business, use of adequate tools, adequacy, enforceability and liquidity
functional, senior management and committees. status of collaterals, as well as the practical aspects of their
mobilization.
iii Internal Control

To ensure diversification of risks and limit concentration Current system/policies/procedures/guidelines formulated

risk, limit on credit exposures to specific activities or type of were gone through;
products, single counterparty or groups of interconnected Actual Exposure of credit limit product wise, segment
counterparties, specific industries and/or economic sectors, wise were checked against Risk Appetite, tolerance limit
types of collateral, related parties and geographic regions. mentioned in Respective Product Paper Guidelines, Credit
Policy and Credit Risk Management Policy;
Monitoring of credit risk is performed by credit risk management
function. The bank uses internal rating system which help the Review of various reports prepared by the Departments
bank to differentiate between credit exposures in its portfolio, such as Account Monitoring Report, Loan Overdue Report,
determine the portfolio’s characteristics (concentration, Loan Report, NRB reports and Margin Monitoring Reports
problem loan etc.) and verify the accuracy of the provisions.
Credit Risk Management is ultimately the responsibility of the
Business borrowers are monitored through on-site visits,
Board of Directors hence Overall strategy as well as significant
while repayment capacities of individual customers should
policies has to be reviewed by the board regularly. Further,
be updated regularly for early identification of any adverse
Senior Management is responsible for implementing the bank’s
developments that may affect repayment of loans.
credit risk management strategies and policies and ensuring
Banks have effective processes and procedures in place for that procedures are put in place to manage and control credit
early implementation of remedial actions on deteriorating risk and the quality of credit portfolio in accordance with these
credits and management of problem loans, including assessing policies.
the appropriate legal actions. Furthermore, bank has sound
loss methodology, including credit risk assessment policies,
i) Maximum exposure to credit risk
procedures and controls, to identify troubled exposures and The bank has financial assets consisting mainly of loans &
determine loss provisioning in a timely manner. advances and investments at amortized cost. In these cases,
the maximum exposure to credit risk is the carrying amount of
Bank has implemented various System/ Policies/ Procedures/ the related financial assets.
Guidelines for the effective management of Credit Risk. For
the purpose of assessment of credit risk of the bank, following ii) Credit quality of neither past due nor impaired and
activities were carried out: past due or impaired
NPR in Mn.
Neither past due Past due less Past due 91 to Past due More Individually
Particulars Total
nor impaired 90 days 180 days than 180 days impaired
Financial Assets
Assets carried at Amortised Cost
Cash and cash equivalent 20,215 - - - - 20,215
Due from Nepal Rastra Bank 16,098 - - - - 16,098
Placement with Bank and Financial Institutions 384 - - - - 384
Loans and advances to customers 136,067 6,125 186 196 - 142,574
Loan and advances to B/FIs 6,923 - - - 6,923
Fair Value through Profit and Loss (FVTPL) - - - - - -
Derivative financial instruments. 7,006 - - - - 7,006
Fair Value through Other -
Comprehensive Income (FVTOCI) - - - - -
Investment securities 18,153 - - - - 18,153
Investment in subsidiaries 1,205 - - - - 1,205
Total 206,050 6,125 186 196 - 212,557

The table below shows the credit quality by class of asset for market risk strategy should be periodically updated (at least
all financial assets exposed to credit risk, based on the Bank’s once a year and immediately in case of change in market
internal credit rating system. activity) and regularly reviewed to accommodate changes in
business/strategic plan and significant developments in the
5.1.2 Market Risk external operational environment.
Market risk is defined as the risk of losses resulting from
The bank’s management information system generates regular
movement in market prices that adversely affect the value of
reports that depict actual size, return, risk, potential profit or
on-and-off balance sheet positions of financial institutions.
loss etc of the exposure and such report is forwarded to board
Market risk is the risk that the fair value or future cash flows
and senior management for review. Appropriate contingency
of a financial instrument will fluctuate because of changes in
plans have been put in place.
market prices. Market risk comprises three types of risk: foreign
exchange rates (currency risk), market interest rates (interest 5.1.3 Liquidity Risk
rate risk) and market prices (price risk).
Bank recognize Market Risk as the possibility for loss of
i. Currency Risk: earnings or economic value to the Bank caused due to adverse
changes in the market level of interest rates or prices of
Foreign exchange risk is the potential for the Bank to
securities (equity), foreign exchange rates and commodity price
experience volatility in the value of its assets, liabilities and
fluctuation, as well as the volatilities, of those prices. While
solvency and to suffer actual financial losses as a result of
Liquidity risk is chances of failure of a bank to meet obligations
changes in value between the currencies of its assets and
as they become due. Effective liquidity risk management helps
liabilities and its reporting currency.
ensure the Bank’s ability to meet its obligations as they fall due
The Bank has following foreign currency as receivables/ without adversely affecting the Bank’s financial condition and
payables as at the balance sheet date. reduces the probability of developing of an adverse situation.
ii. Interest Rate Risk Liquidity risk is defined as the risk that the Bank will encounter
difficulty in meeting obligations associated with financial
Interest rate risk is the risk that the fair value or future cash
liabilities that are settled by delivering cash or another financial
flows of a financial instrument will fluctuate because of
asset. Liquidity risk arises because of the possibility that the
changes in market interest rates.
Bank might be unable to meet its payment obligations when
iii. Equity Price Risk they fall due as a result of mismatches in the timing of the
cash flows under both normal and stress circumstances. Such
Equity price risk is the risk that the fair value or future cash
scenarios could occur when funding needed for illiquid asset
flows of a financial instrument will fluctuate because of
positions is not available to the Bank on acceptable terms. To
changes in equity prices (other than those arising from interest
limit this risk, management has arranged for diversified funding
rate risk or currency risk), whether those changes are caused
sources in addition to its core deposit base and adopted a
by factors specific to the individual financial instrument or its
policy of managing assets with liquidity in mind and monitoring
issuer, or by factors affecting all similar financial instruments
future cash flows and liquidity on a daily basis. The Bank has
traded in the market.
developed internal control processes and contingency plans
for managing liquidity risk. This incorporates an assessment of
The Company’s equity price risk exposure relates to financial
expected cash flows and the availability of high grade collateral
investment held at FVTOCI, whose values fluctuate as a result
which could be used to secure additional funding as required.
of changes in market prices.
The following table depicts the maturity profile of the

Based on its risk profile and level of market risk it is willing and/
investment portfolio on a undiscounted cash flow basis which
or able to take, the bank has developed strategy to manage its
is designed and managed to meet the required level of liquidity
market risk. Approved by the board, the market risk management
as and when liquidity outgo arises taking into consideration
is well communicated within the financial institution. The
the time horizon of the financial liabilities of the business.

Amount in NPR Mn
Particulars Less than 3 month 3 to 6 months 6 to 1 year More than 1 year Total
Assets
Cash and cash equivalent 20,215 - - - 20,215
Due from Nepal Rastra Bank 16,098 - - - 16,098
Placement with Bank and Financial Institutions 384 - - - 384
Derivative financial instruments. 7,006 - - - 7,006
Other trading assets 7 - - - 7
Loan and advances to B/FIs 49 1,405 1,966 3,504 6,923
Loans and advances to customers 24,141 14,452 21,709 82,272 142,574
Investment in subsidiaries 1,205 - - - 1,205
Total 69,104 15,857 23,675 85,776 194,412
Liabilities
Due to Bank and Financial Institutions 8,536 - - - 8,536
Due to Nepal Rastra Bank 315 - - - 315
Derivative financial instruments 6,913 - - - 6,913
Deposits from customers 40,764 20,489.80 35,771.22 79,795.60 176,821
Borrowing - - - - 0
Other liabilities 2,046 - - 2,046
Debt securities issued - - 7,710 7,710
Total 66,283 20,490 35,771 79,796 202,340
iv. Operational risk events that do occur. The actions of the board and senior
management, and policies, processes and systems provide the
Operational Risk is defined as the risk of potential loss
foundation for a sound risk management culture
resulting from inadequate or failed internal processes, people
and systems or from the impact of external events, including
Bank seek to minimize our exposure to operational risk by use
legal risks for the bank. Operational Risk is pervasive across all
of key control standards, key control self-assessments and key
the functions of the Bank and is influenced by all resources,
risk indicators as toolkits to identify, assess, monitor and control
including human resource, systems and procedural designs,
operational risk events through timely acknowledgement of
deployed by the Bank to carry out those functions. Operational
emerging threats and underlying vulnerabilities. The Bank
Risk can be caused by both internal and external sources such
shall also ensure highest level of governance standards and
as fraud, business interruptions, system failures, damage
adherence to Code of Conduct and robust compliance to all
to physical infrastructure, failure in execution and service
regulatory as well as the Bank’s internal policy, procedures and
delivery, inherent risks in products, customers, inadequacy in
guidelines.
procedures or flawed process designs, and business practices.
The risk can occur in any business function or the business Effective policies, procedural guidelines and standard
supporting functions. operating procedure are crucial tools for sound risk
management. Therefore, adequacy and effectiveness of the
The Bank is committed to be governed with a strong culture of
policies and procedures and their effective implementation is
risk management and ethical business practices and therefore
closely monitored by the department to ensure that they have
to averse it from potentially damaging operational risk events
continuing relevance in line with regulatory requirement and
and is in a sound position to deal effectively with those
adjusts to dynamic risk environment of the industry.

5.2 Capital Management ICAAP 2018 shall provide policy and procedural guidelines for
the calculation of internal capital adequacy by prescribing
5.2.1 Qualitative disclosures
appropriate methodologies, techniques and procedures to
The Bank has formulated and implemented the "Internal assess the capital adequacy requirements in relation to the
Capital Adequacy Assessment Process 2018" (ICAAP 2018) Bank’s risk profile and effectiveness of its risk management,
which has been approved by the Board of Directors. The ICAAP control environment and strategic planning.
2018 is a system of sound, effective, and complete strategies
and processes that allows the Bank to assess and maintain, The Board shall be primarily responsible for ensuring the current
ongoing basis, the amounts, types and distribution of internal and future capital needs of the bank in relation to strategic
capital that the Bank considers adequate to cover the nature objectives. The management shall review and understand the
and level of risk to which the Bank is or might be exposed to. nature and level of various risks that the bank is confronting
in the course of different business activities and how this risk
Internal Capital Adequacy Assessment Process (ICAAP) relates to capital levels and accordingly implement sound risk
shall also include requirement to have robust governance management framework specifying control measures to tackle
arrangements, efficient process of managing all material each risk factor.
risks and an effective regime for assessing and maintaining
adequate and economic capital at the Bank where economic 5.2.2 Quantitative disclosures
capital (economically needed capital) refers to the amount of a) Capital Structure and Capital Adequacy
capital required for the Bank’s business operations and for
financing the associated risks.
i. Tier 1 capital and a breakdown of its components

NPR in Mn.
S.N. Particulars Amount
a Paid up Capital 8,834

b Share Premium / Capital Reserve -
c Proposed Bonus Shares -
d Statutory General Reserve 2,430
e Retained Earnings 2,113
f Un-audited Current Year Cumulative Profit -
g Capital Redemption Reserve 417
h Other Free Reserves -
i Less: Deferred Tax Assets -
j Less: Intangible Assets (110)
k Less: Investment in equity of institutions with financial interests (200)
l Less: Purchase of land & building in excess of limit and unutilized -
Core (Tier-1) Capital 13,483
ii. Tier 2 capital and a breakdown of its components

NPR in Mn.
S.N. Particulars Amount
a Subordinated Term Debt 6,742
b General Loan Loss Provision 1,484
c Exchange Equalization Reserve 39
d Investment Adjustment Reserve 56
Supplementary (Tier-2) Capital 8,321

iii. Detailed information about the Subordinated Term Debts with information on the outstanding amount, maturity,
and amount rose during the year and amount eligible to be reckoned as capital funds.
Particulars O/s amount Issue Date Maturity Date Interest Rate* Amount eligible for capital fund
7.25% NIC ASIA Bond 2077 500 15-May-14 14-May-21 7.25% 500
9% NIC ASIA Bond 2081/82 3,000 14-Jan-18 13-Jan-25 9.00% 3,000
11% NIC ASIA Bond 2082/83 1,830 20-Sep-18 19-Sep-25 11.00% 1,830
10% NIC ASIA Bond 2085/86 2,405 1-Mar-19 26-Feb-29 10.00% 2,405
Total 7,735 7,735
However, total eligible amount is NPR 6,769 being 50% of core capital fund.
*Interest is payable half yearly basis.
iv. Deductions from capital Bank under various stress situations typically, application of
“what if” scenarios, especially in the problematic identification
• The intangible assets pertaining to software amounting to
of low frequency but high severity events and identifying
NPR 110 Mn. have been deducted from the core capital
expected and unexpected losses. It focuses on capturing the
impact of large, but still plausible events and understanding
• The Bank’s investment in NIC AISIA Capital Ltd., a wholly
the overall risk profile in a coherent and consistent framework,
owned subsidiary, the investment amounting NPR 200 Mn.
including impact analysis on earnings, solvency and liquidity.
has been deducted from the core capital.
A formal monitoring and reporting mechanism have been

v. Total qualifying capital
established to provide the senior management necessary
Amount (NPR information on the risk profile, trends, and the capital
S. N. Particulars
Millions)
requirements as per ICAAP 2018 and Stress Testing Guidelines
A Core Capital 13,483 2017. Such reports are being prepared on a monthly and
quarterly basis and circulated to relevant business units/
B Supplementary Capital 8,321
departments, Integrated Risk Department (IRMD), and tabled
Total Qualifying Capital (Total Capital Fund) 21,804 in Assets Liability Committee (ALCO) meeting. Further quarterly
reports are presented to the Risk Management Committee and
vi. Capital Adequacy Ratio the Board for review and discussions.
Capital Adequacy Ratio of the Bank as at 16 July 2019 stood at viii. Summary of the terms, conditions and main
13.32%. features of all capital instruments, especially in case
of subordinated term debts including hybrid capital
vii. Summary of Bank’s internal approach to assess
instruments
the adequacy of capital to support current and future
activities, if applicable Ordinary share capital: The Bank has only one class of equity
shares having a par value of Rs. 100 per share. Each holder of
The Bank prepares a long term 5 year’s Strategy Plan and
equity shares is entitled to one vote per share. In the event of
to achieve the long term plans the Bank prepares annual
liquidation of the Bank, holder of equity shares will be entitled
Budgets/ Operating/ Tactical plans as stipulated in the Budget
to receive remaining assets of the Bank after distribution of
Policy and strategy Document of the Bank. To ensure that
preferential amount. The distribution will be in proportion to
the Bank’s capital adequacy commensurate to demand of
the number of equity shares held by the shareholders.
the Bank’s capital required by the business planning, the
Management and the Board prudently and proactively engage Debentures: The bank has issued 7.25% NIC ASIA Bond 2077,
on ongoing process of capital and risk assessment, stress 9% NIC ASIA Bond, 11% NIC ASIA Bond 2082-83, 10% NIC ASIA
testing and scenarios testing, monitoring and reporting as per Bond 2085-86 amounting NPR 500 million, NPR 3,000 million,
the ICAAP 2018. NPR 1,830 million and NPR 2,405 million respectively. These
debentures do not carry any voting rights.
The Bank has also formulated and implemented “Stress Testing
Guidelines 2017” in order to assess of the vulnerability of the

b) Risk Exposures
i. Risk weighted exposures for Credit Risk, Market Risk and Operational Risk
NPR in Mn.
S.N. Risk Weighted Exposure Amount
a Risk Weighted Exposure for Credit Risk 154,507

b Risk Weighted Exposure for Operational Risk 5,686
c Risk Weighted Exposure for Market Risk 118
Adjustments under Pillar II
ALM policies & practices are not satisfactory, add 3% of gross income to RWE 161
2% adjustment on Total RWE 3,206
Total Risk Weighted Exposure 163,678
ii. Risk Weighted Exposures under each of 11 categories of Credit Risk

NPR in Mn
S.N. Risk Classification Net Book Value RWE
a Claims on Govt. and Central Bank 31,657 -

b Claims on other Financial Entities - -
c Claims on Banks 21,194 4,398
d Claims on Corporate and Securities Firm 54,595 54,595
e Claims on Regulatory Retail Portfolio 58,305 43,729
f Claims secured by Residential Properties 7,747 4,659
g Claims secured by Commercial Real Estate 1,316 1,316
h Past due Claims 446 669
i High Risk Claims 24,304 35,199
j Other Assets 10,976 5,296
k Off balance sheet items 15,621 4,646
Total 226,160 154,507
c) Total risk weighted exposure calculation table

NPR in Mn
Gross Book Specific Provision & Eligible Net Value Risk Risk Weight
A. Balance Sheet Exposure
Value (A) Valuation Adjustments (B) CRM (D) (A-B-C) Weight (E) Exposure (D *E)
Cash Balance 5,345 - - 5,345 0% -
Balance With Nepal Rastra Bank 16,008 - - 16,008 0% -
Gold - - - - 0% -
Investment in Nepalese Government Securities 15,343 - - 15,343 0% -
All Claims on Government of Nepal 216 - - 216 0% -
Investment in Nepal Rastra Bank securities - - - - 0% -
All claims on Nepal Rastra Bank 90 - - 90 0% -
Claims on Foreign Government and Central Bank (ECA 0-1) - - - - 0% -
Claims on Foreign Government and Central Bank (ECA -2) - - - - 20% -
Claims on Foreign Government and Central Bank(ECA -3) - - - - 50% -
Claims on Foreign Government and Central Bank(ECA-4-6) - - - - 100% -
Claims on Foreign Government and Central Bank(ECA -7) - - - - 150% -
Claims On BIS, IMF, ECB, EC and on Multilateral Development - - - - 0% -

Banks (MDB's) recognized by the framework

Gross Book Specific Provision & Eligible Net Value Risk Risk Weight
A. Balance Sheet Exposure
Value (A) Valuation Adjustments (B) CRM (D) (A-B-C) Weight (E) Exposure (D *E)
Claims on Other Multilateral Development Banks - - - - 100% -
Claims on Public Sector Entity (ECA 0-1) - - - - 20% -
Claims on Public Sector Entity (ECA 2) - - - - 50% -
Claims on Public Sector Entity (ECA 3-6) - - - - 100% -
Claims on Public Sector Entity (ECA 7) - - - - 150% -
Claims on domestic banks that meet capital adequacy

11,373 - - 11,373 20% 2,275
requirements
Claims on domestic banks that do not meet capital adequacy
- - - - 100% -
requirements
Claims on foreign bank (ECA Rating 0-1) 9,078 - - 9,078 20% 1,816
Claims on foreign bank (ECA Rating 2) 532 - - 532 50% 266
Claims on foreign bank (ECA Rating 3-6) - - - - 100% -
Claims on foreign bank (ECA Rating 7) - - - - 150% -
Claims on foreign bank incorporated in SAARC region

operating with a buffer of 1% above their respective regulatory 211 - - 211 20% 42
capital requirement
Claims on Domestic Corporates 54,697 71 25 54,595 100% 54,595
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) 58,653 13 336 58,305 75% 43,729
Claims fulfilling all criterion of regulatory retail except

- - - - 100% -
granularity
Claims secured by residential properties 7,720 1 - 7,719 60% 4,631
Claims not fully secured by residential properties - - - - 150% -
Claims secured by residential properties (Overdue) 41 13 - 28 100% 28
Claims secured by Commercial real estate 1,316 - - 1,316 100% 1,316
Past due claims (except for claim secured by residential

711 259 6 446 150% 669
properties)
High Risk claims (Venture capital, private equity investments,
19,900 33 290 19,578 150% 29,366
personal loans and credit card receivables)
Lending against securities (bonds & shares) 912 - - 912 100% 912
Investments in equity and other capital instruments of

1,603 - - 1,603 100% 1,603
institutions listed in the stock exchange
Investments in equity and other capital instruments of
2,212 - - 2,212 150% 3,318
institutions not listed in the stock exchange
Staff Loan secured by residential property 837 - - 837 60% 502
Interest receivable/claim on government securities - - - - 0% -
Cash in transit and other cash items in the process of

- - - - 20% -
collection
Other Assets 4,794 - - 4,794 100% 4,794
TOTAL (A) 211,592 395 658 210,540 149,861

Gross
Gross Book Gross Book Gross Book Risk Risk Weight
B. Off Balance Sheet Exposure Book Value
Value (A) Value (A) Value (A) Weight Exposure (D *E)
(A)
Revocable Commitments - 0% -
Bills Under Collection 37 - - 37 - -
Forward Exchange Contract Liabilities 3,902 - - 3,902 0% 390
LC Commitments With Original Maturity Up to 6 months (domestic

1,397 - 39 1,357 0% 271
counterparty)
foreign counterparty (ECA Rating 0-1) - - - - 0% -
foreign counterparty (ECA Rating- 2) - - - - 100% -
foreign counterparty (ECA Rating-7) - - - - 200% -
LC Commitments With Original Maturity Over 6 months (domestic

- - - - 100% -
counterparty)
Bid Bond, Performance Bond and Counter guarantee
(domestic counter party) 4,297 - 158 4,139 100% 2,069
foreign counterparty (ECA Rating -7) - - - - 200% -
Underwriting commitments - - - - 100% -
Lending of Bank's Securities or Posting of Securities as collateral - - - - 100% -
Repurchase Agreements, Assets sale with recourse (including repo/

- - - - 100% -
reverse repo)
Advance Payment Guarantee 307 - 3 304 100% 304
Financial Guarantee - - - - 100% -
Acceptances and Endorsements 286 - 21 265 100% 265
Unpaid portion of Partly paid shares and Securities - - - - 100% -
Irrevocable Credit commitments (Short term) 5,342 - - 5,342 0% 1,068
Irrevocable Credit commitments (long term) - - - - 100% -
Claims on foreign bank incorporated in SAARC region operating with

- - - - 0% -
a buffer of 1% above their respective regulatory capital requirement
Other Contingent Liabilities 273 - 0 273 100% 273
Unpaid Guarantee Claims 3 - - 3 200% 5
TOTAL (B) 15,843 - 223 15,621 4,646
Total RWE for credit Risk (A) +(B) 227,436 395 880 226,160 154,507
Adjustments under Pillar II
Add: 10% of the loan and facilities in excess of Single Obligor

- - - - -
Limits(6.4 a 3)
Add: 1% of the contract(sale) value in case of the sale of credit with
- - - -
recourse (6.4 a 4)
Total RWE for credit Risk (After Bank's adjustments of Pillar II) 227,436 395 880 226,160 154,507

d) Amount of NPAs (both Gross and Net)

NPR in ‘000'
Current Year Previous Year
Particulars
Gross NPAs Net NPAs Gross NPAs Net NPAs
Restructured / Reschedule Loans - - - -
Sub Standard Loans 425,965 319,474 12,384 9,288
Doubtful Loans 50,482 25,241 4,861 2,431
Loss 213,955 - 66,886 -
Total NPAs 690,401 344,714 84,132 11,719
5.2.3 Compliance with external requirement

The commercial banks were required by the Monetary Policy 2015/16 to attain a stipulated minimum paid up capital of NPR 8 billion by
mid-July 2017. As on the reporting date, the Bank’s paid up capital stood at NPR 8.83 billion against the requirement of NPR 8 billion.
5.3 Classification of financial assets and financial liabilities

NPR in Mn.
As at 16-Jul-19 As at 16-Jul-18
Financial assets Notes
Carrying Value Fair value Carrying Value Fair value
Assets
Assets carried at Amortised Cost
Cash and cash equivalent 4.1 20,215 20,215 8,132 8,132
Due from Nepal Rastra Bank 4.2 16,098 16,098 15,861 15,861
Placement with Bank and Financial Institutions 4.3 384 384 314 314
Loans and advances to customers 4.7 142,574 142,574 115,805 115,805
179,270 179,270 140,112 140,112
Fair Value through Profit and Loss (FVTPL)
Derivative financial instruments. 4.4 7,006 7,006 1,266 1,266
Fair Value through Other Comprehensive Income (FVTOCI)
Investment securities 4.8 18,153 18,153 14,133 14,133
Investment in susidiaries 4.1 1,205 1,205 270 270
19,357 19,357 14,403 14,403
Liabilities
Liabilities carried at Amortised Cost
Due to Bank and Financial Instituions 4.17 8,536 8,536 11,630 11,630
Due to Nepal Rastra Bank 4.18 315 315 742 742
Deposits from customers 4.2 176,821 176,821 139,590 139,590
Debt securities issued 4.24 7,710 7,710 3,488 3,488
193,381 193,381 155,449 155,449
Fair Value through Profit and Loss (FVTPL)
Derivative financial instruments 4.19 6,913 6,913 1,722 1,722

5.3.1 Fair Value of Financial Assets and Financial Liabilities
NPR Mn.
Fair value Hierarchy As at As at
(Level) 16 July 2019 16 July 2018
Fair Value through profit and loss
Financial Assets
Forward exchange Contract 7,006 1,266
Financial Liabilities
Forward exchange Contract 6,913 1,722
Fair Value through Other Comprehensive Income
Financial assets
Investment securities at OCI
- Quoted equity securities 1 1,603 566
- Unquoted equity securities 3 1,207 191
Investment in susidiaries 1,205 270
Total 4,015 1,027
Financial Instruments held at amortised cost
Financial assets
Debt securities 3 - 343
Government bonds 3 13,942 9,778
Government treasury bills 3 1,401 2,161
Nepal Rastra Bank bonds 3 - -
Loan and advances to B/FIs 3 6,923 4,658
Loans and advances to customers 3 142,574 115,805
Accounts receivable 753 7,057
Accrued Income - -
Total 165,593 139,802
Financial liabilities
Due to Bank and Financial Instituions 3 8,536 11,630
Due to Nepal Rastra Bank 3 315 742
Deposits from customers 3 176,821 139,590
Borrowing 3 - -
Provisions - -
Other liabilities 2046 2,074
Debt securities issued 7,710 3,488
Total 195,427 157,523

5.4 Operating Segment Information working for the upliftment of poor are classified under DSL
Banking. The interest income, fee incomes generated out of
5.4.1 General Information
such loans are revenue items of this segment. Expenses of
Reportable Segments this segment comprises of interest expenses on deposits used
for providing DSL loans, personnel expenses and operating
Business segments have been identified and reported
expenses as well as provision for loss created for such loans.
taking into account, the target customer profile, the nature
of products and services, the differing risks and returns, the
e) Treasury
organization structure, the internal business reporting system.
The Bank operates in the following segments: The balance lying with the banks invested in governmental
bonds, treasury bills, placements, forex trading and shares of
a) Corporate Banking other Organizations come under this segment. The interest
income of bonds and bills, forex gains, dividend income are
The loans provided to corporate customers valuing more than
revenue items of this segment. Expenses of this segment
NPR 5 Crores are classified under Corporate Banking. The
comprises of interest expenses on deposits used for making
interest income from corporate loans, fee incomes generated
investments, forex losses, personnel expenses and operating
out of such loans, foreign exchange earned through LC/BG
expenses as well as provision for loss created for such
are revenue items of this segment. Expenses of this segment
investments.
comprises of interest expenses on deposits used for providing
corporate loans, personnel expenses and operating expenses
f) Transaction Banking
as well as provision for loss created for such loans.
The income from Card (Debit card/Credit card) sales, income
b) Retail Banking from sales of Mobile and SMS Banking, customer services
fees, agency remittance commissions, locker fees, cheque
The loans provided to individuals are classified under retail
processing fees are revenue items of this segment. Expenses
banking. The interest income, fee incomes generated out of
of this segment comprises of personnel expenses and
such loans are revenue items of this segment. Expenses of
operating expenses.
this segment comprises of interest expenses on deposits used
for providing Retail loans, personnel expenses and operating
g) Others
expenses as well as provision for loss created for such loans.
All other revenues and expenses which cannot be classified
c) Small and Medium Enterprises (SME) Banking to the above-mentioned segments fall under this segment.
The income from sale of assets, other fees and commission
The loans provided to small and medium enterprises valuing
are revenue items of this segment. Un-attributable personnel
not more than NPR 5 Crores are classified under SME Banking.
expenses, operating expenses and written off assets are
The interest income, fee incomes generated out of such loans,
expense items of this segment.
foreign exchange earned through LC/BG are revenue items of
this segment. Expenses of this segment comprises of interest
Corporate Banking, Retail Banking, SME Banking, DSL Banking,
expenses on deposits used for providing SME loans, personnel
Transaction banking and Treasury comprise of at least 75%of
expenses and operating expenses as well as provision for loss
our total revenue. Hence, these operations are treated as
created for such loans.
reportable segments and the remaining are classified under
other segments
d) Deprived Sector lending (DSL) Banking
The loans provided to deprived sectors of the society directly

(say to agricultural sectors) or indirectly (say to the organizations

5.4.2 Information about profit or loss, assets and liabilities
NPR in Mn.
Particulars Corporate SME Retail DSL TB Treasury Others Total
Revenue from External Customers 1,061 2,675 3,122 658 674 865 450 9,506
Inter Segment Expenses/ Revenue (17) 7 9 2 - 626 - 626
Total Revenue 1,044 2,682 3,131 660 674 1,492 450 10,132
Interest Income 2,976 6,028 7,791 1,557 - 819 174 19,346
Interest Expenses 2,100 4,033 5,094 1,156 - 2 - 12,385
Net Interest Income 876 1,995 2,697 401 - 818 174 6,961
Depreciation and Amortization 16 93 67 17 8 2 1 204
Profit before Income Tax 84 920 1,611 176 605 1,389 255 5,040
Impairment charge/(reversal) for loans and other losses 112 251 186 51 - - - 599
Segment Assets 17,202 67,129 69,764 17,927 99 45,566 9 217,697
Segment Liabilities 17,842 69,669 70,446 11,928 42 47,770 - 217,697
5.4.3 Measurement of operating segment profit or loss, assets and liabilities

The bank has identified the key segments of business on the basis of nature of operations that assists the Management Committee
of the bank in decision making process and to allocate the resources. It will help the management to assess the performance of the
business segments. The Segment has been identified on the basis of geographic location of the branches. Investment balances, NRB
balance, income from investment, forex income are reported in Head office under Province 3. Intra segment revenue and costs are
accounted as per the policy of the bank and eliminated in the Head Office.
5.4.4 Reconciliation of reportable, segment revenues, profit or loss, assets and liabilities
Revenue NPR in Mn.
Total revenue for reportable segments 10,132

Other revenues -
Elimination of intersegment revenues 626
Entity's revenue 9,506
NPR in Mn.
Profit or Loss
Total profit or loss for reportable segments 5,040
Other profit or loss -
Elimination of intersegment profits 631
Profit before income tax 4,440
NPR in Mn.
Assets
Total assets for reportable segments 217,697
Other assets -
Total assets 217,697
NPR in Mn.
Liabilities
Total liabilities for reportable segments 217,697
Other assets -
Total liabilities 217,697

5.4.5 Information about product and services

Amount in Mn.
S.N. Departments Revenue
1 Corporate 1,044
a Large corporate 881
b Project Financing 162
2 Retail 3,131
a Home Loan Term 1,773
b Home Loan OD 394
c Auto Loan 633
d Gold Loan 55
e Loan against shares 179
f Education loan 13
g Loan against FD 19
h Other Loans 63
3 Small and Medium Enterprises 2,682
a Medium enterprises 1,233
b Mid-market Enterprises 507
c Easy business 136
d Small business 806
4 Deprived Sector Lending 660
a Direct Deprived Sector lending 347
b Indirect Deprived Sector Lending 311
5 Treasury 1,492
a Investments in T Bills and Government bonds 1,141
b Trading Gain 358
Revaluation Gain (7)
6 Transaction Banking 674
a Cards and new banking 276
b Other Transaction banking services 398
7 Other services 450
Others 450
Total 10,132

5.4.6 Information about geographical areas
Revenue from following geographical areas
Amount in Mn.
Area Amount Percentage
(a) Domestic 10,132 100
Province 1 2,028 20
Province 2 1,163 11
Province 3 4,072 40
Province 4 990 10
Province 5 1,295 13
Province 6 220 2
Province 7 364 4
(b) Foreign - -
Total 10,132 100
5.4.7 Information about major customers self-assessment for the financial year 2060-61 to 2071-72.
The additional tax liability demanded on reassessment for
Revenue from single customer doesn’t exceed 10% of total
the above financial years is NPR 326 Mn. (Previous year’s NPR
revenue
285 Mn.) including penalty/fines and interest. The Bank has
5.5 Share Options and Share based Payment appealed against the additional demand with the appropriate
authorities and deposited one third of disputed tax amount as
The Bank do not have a policy for share options with its guarantee deposit with the Inland Revenue Department.
employees. Similarly, during the year the Bank has not made
any payments or settlements by issuing new shares. Pending decision, no provisions have been made against these
additional demands and disclosed as contingent liabilities
5.6 Contingent Liabilities and Commitment under Schedule 17 of Financial Statements.
5.6.1 Income Tax Liability
The Bank has filed tax returns to the LTO up to the financial
The Bank has received reassessment order from Large years 2074/75 under self-assessment procedures.
Taxpayers’ Office (LTO) on the income tax return filed under
5.6.2 Contingent Liability

NPR in Mn.
As at 16-Jul-19 As at 15-Jul-18
Claims on Bank but not Accepted by the Bank
Letter of Credit (Full Amount)
a. Letter of Credit With Maturity Less than 6 Months 1,397 2,265
b. Letter of Credit With Maturity More than 6 Months
Rediscounted Bills
Unmatured Guarantees/Bonds
a. Bid Bonds 4,297 43
b. Performance Bonds 2,187
c. Other Guarantee/Bonds
Unpaid Shares in Investment
Forward Exchange Contract Liabilities 3,902 454
Bills under Collection 37 168
Acceptances and Endorsements 286 471
Underwriting Commitments
Irrevocable Loan Commitments 5,342 6,360
Guarantees issued against Counter Guarantee of Internationally Rated Foreign Banks - 1,192
Advance Payment Guarantees 307 87
Financial Guarantees 0.05
Contingent Liabilities on Income Tax 273 285
Unpaid Guarantee Claims 3 3
Total 15,844 13,515

5.7 RELATED PARTY DISCLOSURES

The Bank identifies the following as the related parties under the requirements of NAS 24.
Name Relationship
NIC ASIA Capital Limited Wholly owned subsidiary

NIC ASIA Laghubitta Bittiya Sanstha Limited Wholly owned subsidiary
Tulsi Ram Agrawal Chairman
Jagdish Prashad Agrawal Director
Ram Chandra Sanghai Director
Rajendra Prasad Aryal Director
Binod Kumar Pyakurel Director
Ganesh Man Shrestha Director
Trilok Chand Agrawal Director
Roshan K. Neupane Chief Executive Officer
Sudhir Nath Pandey Deputy Chief Executive Officer
Santosh Kumar Rathi ACEO - Marketing Eco system
Rajesh Rawal ACEO-Strategy Enforcement Ecosystem
Jayendra Rawal ACEO-Strategy Enforcement Ecosystem
Kapil Dhakal ACEO - Performance Assurance & Support Service Ecosystem
Sudeep Khanal ACEO-Support Service Ecosystem
Arjun Raj Khaniya Chief Business Officer
Bishal Sigdel Chief Experience Transformation Officer
Dinesh Bhari Head Legal
Dipendra Bahadur Rajbhandari Chief Risk Officer
Prakash Baral Chief Credit Officer
Raju Prasad Adhikari Head Internal Audit
Rupesh Luitel Chief Financial Officer
Deepen Karki Company Secretary
5.8 Board Member Allowances and Facilities

The Board of Directors have been paid board meeting fees of NPR 7,176,000 during the fiscal year. There were 54 Board Meetings
conducted during the fiscal year.
As approved by the 21 Annual General Meeting held on 23 November, 2018 and further approved by the Nepal Rastra Bank on 23
January 2019, the Chairperson and other members of the Board are paid NPR 20,000 and NPR 16,000 per meeting respectively after
27 January 2019 (Previously NPR 14,000 and NPR 12,000 respectively) for Board and Board Level Committees meetings.
Meeting fees paid to Board Level Committees are as follows:

NPR in ‘000
Board Level Committees No of Meetings Meeting Allowance
Assets Money Laundering Prevention Committee 15 536,000
Audit Committee Meeting 29 808,000
Karmachari Sewa Suvidha Meeting 12 336,000
Risk Management Committee 20 704,000
Land Acquisition Committee 4 176,000
Total 2,560,000

As approved by the 21st Annual General Meeting held on 23 November, 2018 and further approved by the Nepal Rastra Bank on 23
January 2019, each Board Members and Chairman have been provided with a monthly allowance of NPR 17,000 and NPR 20,000
respectively for telephone, newspaper and mobile expenses. The total amount paid as monthly allowances to the board members
during the fiscal year amounted to NPR 24,11,639.
5.9 Loans and Advances extended to Promoters:

The Bank has not extended any loans to promoters during the year.
5.10 Compensation Details for Key Management Personnel

The compensation paid to the members of management committee except CEO has been depicted in table below:
Amount
S.N. Particulars
in NPR
1 Short Term Employee Benefits 62,973,364
2 Post-Employment Benefits -
3 Other Long-Term Benefits -
Termination Benefits
4 -
(Gratuity and Sick Leave Encashment)
5 Share Based Payment -
Total of Key Management Personnel Compensation 62,973,364
Key management personnel are also provided with the following benefits:
i) Benefits as per the Employee Terms of Service By-laws,

ii) Bonus to staff as per the Bonus Act
The Salary and benefits paid to the CEO are as follow:

Roshan K. Neupane Roshan K. Neupane
Particulars
(Acting CEO) (CEO) (w.e.f. 18/12/2018)
Total annual Salary of CEO including allowances 9,457,123 10,500,000

Work-based remuneration paid to CEO this financial year
a) Employee Bonus
b) Allowances as per prevailing law 1,409,983
c) Others
Total 10,867,106 10,500,000
Total Salary Allowance Provided to CEO 21,367,106
5.11 Transaction with Subsidiaries

S No Particulars NIC ASIA Capital NIC ASIA Laghubitta
1 Share Registrar fee paid 825,000
2 Deposit received from subsidiary 23,618,261 17,763,344
3 Borrowings 1,500,000,000
4 Interest paid to subsidiaries 2,425,617 -
5 Reimbursement received 3,354,352
6 Interest received from subsidiaries 10,932,228
7 Payment from Subsidiaries 118,763,356
The intra-group related figures have been excluded for presentation of the financial statement of the Group.

5.12 Merger and Acquisition

There are no merger or acquisitions transaction during the year.
5.13 Additional Disclosures of non-consolidated entities

The Bank has two subsidiaries as at 16 July 2019, NIC ASIA Capital Limited and NIC ASIA Laghubitta Bittiya Sanstha, which are
consolidated for the year ended 16 July 2019. There are no such entities which are required to be consolidated but not done during
the year.
5.14 Events after reporting date

The Bank monitors and assesses events that may have potential impact to qualify as adjusting and / or non-adjusting events after
the end of the reporting period. All adjusting events are adjusted in the books with additional disclosures and non-adjusting material
events are disclosed in the notes with possible financial impact, to the extent ascertainable. There are no material events that have
occurred subsequent to 16 July 2019 till the signing of this financial statement on 28th August, 2019 except, the Bank has issued
“10.25% NIC ASIA Debenture 2083/84” amounting NPR 4.4 Billion with following particulars.
Name of the Debenture 10.25% NIC ASIA Debenture 2083/84

Amount Rs. 4.4 billon (4.4 million units of Rs. 1,000 each)
Maturity Period 7 Years
Coupon Rate 10.25% p.a. may vary depending upon liquidity situation
Interest Payment frequency Half Yearly
Convertible Status None
Issue Date 6 Shrawan 2076
5.15 Effect on Non-Banking Assets

Non-Banking Assets (NBA) has been shown under investment property. It has been recognized at lower of fair value or amount due
at the time of assumption of NBA.
NPR’000
Name of Borrower Date of assuming Non-Banking Assets As at 16-Jul-19 As at 15-Jul-18
Kedar Aryal And Nirmal Veniyar Udhyog 9-Oct-12 7,456 7,456
Nangeswori Multiple Trading Co. Pvt Ltd 14-Aug-15 4,837 4,837
Auto Craft Pvt Ltd 11-Feb-18 15,800 15,800
P And P Group 7-Jun-18 7,650 7,650
Rekha Kumari Khadka/ Saru Shahi 19-Jun-18 2,513 2,513
Krishna Dangi/Manju Gautam 2-Jul-18 16,297 16,297
Shivendra Kumar Verma/ Jyoti Kumari Verma 5-Jul-18 3,220 3,220
Purna Brahma Trade Link 5-Jul-18 2,400 2,400
Ram Kumar Lama/Tulasa Waiba 22-Aug-18 8,786 -
New Krinishika Traders 10-Oct-18 5,000 -
Antique Himalayan Furniture Udhyog Pvt. Ltd 26-Dec-18 19,000 -
Hotel Delta Pvt Ltd 4-Jan-19 20,500 -
Jay Pathibhara Agriculture And Livestock (P.) Ltd 6-Jan-19 8,258 -
Shree Kalika V.S.B.K Brick Industries 23-Jan-19 14,166 -
Shiva Kumari Sherma Thamsuhang 26-Mar-19 1,056 -
K.B.S International Pvt Ltd 2-Apr-19 - -
Nepal Plywood Group 10-Apr-19 139,000 -
Umar Stores 3-Jul-18 - 9,050
Bal Krishna/Kalpana Bishwakarma 2-Jul-18 - 3,960
Bp Nirman Sewa 3-Jun-16 - 1,200
Total 275,939 74,383

5.16 Change of estimate
There is no change in estimate during the current year.
5.17 Grant Received for Sakchyam Access to Finance for Poor Challenge Fund Programme
Sakchyam Access to Finance for Poor Challenge Fund (AFPCF or the Project) Programme is an initiative funded by UK Aid from the
British Government as part of a bilateral agreement between the Governments of Nepal and the United Kingdom. It is managed by
the Louis Berger Group Inc. for the Department of International Development (DFID Nepal) in partnership with local and international
institutions.
The objective of the project is to provide Complete Banking Solution to the rural populace through branches, branchless banking
outlets and Alternate Channels.
The project aims at encouraging the development and implementation of innovative and new financial products and services aimed
at poor people and communities, which deliver socio-economic benefits to large number of poor people, which are also commercially
sustainable. In order to extend various modern and convenient financial services to some Districts of Mid and Far Western region
of Nepal, the Bank has entered into an agreement with Sakchyam Access to Finance Program implemented by Louis Berger for the
Department of International Development (DFID Nepal). Through this agreement, the Bank has received financial grants as matching
fund towards its equal share of the expenditure of the project. The reimbursement of expenses received has been accounted in
accordance with Nepal Accounting Standard-20 Accounting for Government Grants and Disclosure of Government Assistance.
Particulars Amount
Total Grant Received till date 11,366,206
Total Expenses Made 3,129,170
Remaining Grant Liabilty 8,237,036
5.18 Earnings per share

The Bank measures earning per share on the basis of the earning attributable to the equity shareholders for the period. The number
of shares is taken as the weighted average number of shares for the relevant period as required by NAS 33 Earnings per Share.
Year ended Year ended

Particulars Units
16-Jul-19 16-Jul-18
Profit attributable to equity shareholders (a) NPR.'000 3,023,283 1,334,862
Weighted average of number of equity shares used in computing basic earnings per share (b) 8,834,228 8,031,116
Adjusted weighted average of number of equity shares used in computing basic earnings per share - 8,834,228
Basic and diluted earnings per equity share of Rs 100 each (a/b) Rs 34.22 15.11

As there is no potential ordinary shares that would dilute current earning of equity holders, basic EPS and diluted EPS are equal for
the period presented.
Pursuant to the requirement of NAS 33, the company has retrospectively adjusted and restated the BEPS and DEPS for previous year.
5.19 Proposed Distributions (Dividends and Bonus Shares)

The Board of directors in its meeting dated 28th August, 2019 has passed a resolution recommending for distribution of bonus shares
(stock dividend) at 10% and cash dividend at 11.0527% (includes tax of total issue) of paid up capital as at 16th July, 2019.
As at As at
Particulars
16 July 2019 15 July 2018
Cash Dividend Declared 976,415 42,269
Bonus Shares 883,423 803,112
Total 1,859,838 845,381
5.20 Unpaid Dividends

As at the reporting date, unpaid dividend over five years amounts to as follows.
NPR. '000
As at As at
Particulars
16 July 2019 15 July 2018
Not collected for more than 5 years 61,739 27,937
Not collected up to 5 years 28,858 65,838
Total 90,597 93,775
5.21 Tax Payment on Opening Interest Accrued on Loan

Bank has paid income tax on opening accrued interest amounting to Rs 30.8 crore, at the rate of 30% along with interest at the rate
of 15% up to the month of Baisakh 2076. The details are as follows:
Particulars Amount (Rs)

Opening Interest Suspense for FY 2074-75 308,071,259
Tax @30% 92,421,378
Interest under Section 118 2,852,345
Interest under Section 119 8,086,871
Total tax paid 103,360,593
5.22 Non-performing assets

The Banks’ non-performing assets ratio stood at 0.46% as at balance sheet date. The total non-performing assets as at balance
sheet date is NPR 686,557,177.45 and loan loss provision related to non-performing assets calculated as per NRB directives is NPR
341,842,762.31 which is 50% of NPA. Also, the total loan loss provision to NPA is 273%.
NPR ‘000
Change
Particulars This Year Previous Year
Amount %
Pass loan (performing loans) 149,417,316 120,582,668 28,838,492 24%
Non-Performing Loans (NPL)
Restructured/rescheduled - -
Substandard 425,965 12,384 413,581 3340%
Doubtful 50,482 4,861 45,621 939%
Loss 213,955 66,886 143,225 214%
Gross Loans & Advances 150,107,717 120,666,800 29,440,918 24%
Total Loan Loss Provision to NPA 273% 1524%

NPL ratios:
Gross NPL to Gross Loans & Advances 0.46%
Net NPL to Net Loans & advances 0.23%
5.23 Concentration of Deposits, Loans & Advances and Contingents

NPR in Mn
Loans & Advances and Bills
Deposits & Borrowings Non-Funded
Purchased
Particulars
CY PY CY PY CY PY
Total Amount Outstanding 150,107 120,666 176,821 151,176 6,327 6,795
Highest Exposure of a Single Unit 1,500 704 3961.76 4,952 939 956
Concentration of exposure 0.99% 0.58% 2.24% 3.28% 14.84% 14.07%
* CY= Current Year, PY = Previous Year
For the calculation of concentration, loans and advances is total loans extended to the customers except staff loans and interest
accruals on loans and the deposits is total deposits from the customers excluding interest payables.
Single Obligor Limit and Sector-wise Limit (Directive No. 3) for both funded and non-funded are within the limit as prescribed by NRB
directives.
5.24 Reserves
5.24.1 General Reserve
The movement in general reserve during the year is as follows;
NPR '000
Opening Balance 1,825,153
Transfer as per BAFIA 604,657
Closing balance 2,429,809
As required by Section 44 of Banks and Financial Institutions Act, 2073 (BAFIA), 20% of the current year's net profit amounting to
NPR 604,656,533 (Previous Year NPR 266,972,385) has been transferred to General Reserve through Profit and Loss Appropriation
Account.
5.24.2 Exchange Fluctuation Reserve

As per Section 45 of the Banks and Financial Institutions Act 2006, Bank is required to transfer 25% of revaluation gain to Exchange
Fluctuation Reserve through Profit and Loss Appropriation Account. For the year NPR 635,106 (Previous year NPR 3,686,060) has
been transferred to Exchange Fluctuation Reserve. The closing balance of Exchange Fluctuation Reserve is NPR 39,007,260.
The movement in Exchange Fluctuation reserve during the year is as follows

NPR '000
Opening Balance 38,372
Transfer of 25% of revaluation gain 635
Closing balance 39,007

5.24.3 Capital Redemption Reserve

As per the Clause 5 of NRB directive # 16, licensed institutions are required to maintain a capital redemption reserve in respect of
debenture liability.
For the proportionate apportion of debenture redemption for “7.25% NIC ASIA Debenture 2077” of NPR 500 million, NPR 130,952,378
(Previous Year NPR 71,428,572) has been apportioned from the Profit & Loss Appropriation Account for “7.25% NIC ASIA Debenture
2077”.The closing balance of Capital Redemption Reserve as on reporting data is NPR 416,666,667.
5.24.4 Investment Adjustment Reserve

As required by NRB directive # 8, the Bank has created Investment Adjustment Reserve (IAR) for investment under ‘Available for Sale’
category.
The investment reserve consists of reserve on account of followings;
investment in newly opened corporate body if not listed in stock exchange within one year from the date of operation or investment
being made, and investment in the shares and debentures of corporate body which are not listed in the stock exchange, and
if such listing is not completed within one year from the date of investment, 100% provision of investment amount has been
provided and credited in Investment Adjustment Reserve, and
2% of the total investment portfolio under available for sale category has been provided.
Movement in investment reserve during the year has been depicted below;
NPR ‘000

SN Name of Company Investment Type Market Value
% Amount
1 Citizen Investment Trust Promoter Share 282,305 2% 5,646
2 Global IME Samunnat Scheme 1 Initial Public Offer 31,570 2% 631
3 Jyoti Life Insurance Limited Promoter Share 150,000 2% 3,000
4 Karja Suchana Kendra Ltd Promoter Share 1,612 2% 32
5 Mahuli Samudayik Laghubitta Bittiya Sanstha Promoter Share 33,808 2% 676
6 Mero Microfinance Bittiya Sanstha Limited Promoter Share 171,475 2% 3,430
7 NABIL Equity Fund Initial Public Offer 4,441 2% 89
8 National Banking Institute Promoter Share 2,400 2% 48
9 National Life Insurance Company Limited Promoter Share 60,422 2% 1,208
Further Public Offer /

10 Nepal Life Insurance Company 503,331 2% 10,067
Secondary Market
11 Asian Life Insurance Company Secondary Market 22,147 2% 443
12 Neco Insurance Company Secondary Market 48,385 2% 968
13 Shikhar Insurance Company Secondary Market 45,942 2% 919
14 Nepal Clearing House limited Promoter Share 5,000 2% 100
15 Nepal Electronic Payment System Promoter Share 15,000 2% 300
16 NIBL Pargati Fund Initial Public Offer 7,644 2% 153
17 NIC ASIA Capital Ltd Promoter Share 200,000 2% -
18 NMB Hybrid Fund L-1 Initial Public Offer 11,047 2% 221
19 RMDC Laghubitta Bittiya Sanstha Limited Promoter Share 179,471 2% 3,589

SN Name of Company Investment Type Market Value
% Amount
20 NIC ASIA Lagubitta Bittiya Sanstha Ltd Promoter Share 1,004,500 2% -
21 Nepal Infrastructure Bank Ltd Promoter Share 1,000,000 2% 20,000
22 NIC ASIA Growth Fund Promoter Share 154,200 2% 3,084
23 Grameen Swyamsewak Laghubitta Bittiya Sanstha Limited Promoter Share 9,000 2% 180
24 Shrijana Community Development Center Promoter Share 10,000 2% 200
25 Solve Laghubitta Bittiya Sanstha Limited Promoter Share 11,400 2% 228
26 Banking Finance and Insurance Institute of Nepal Promoter Share 3,000 2% 60
27 Surya Life Insurance Promoter Share 46,602 2% 932
Grand Total 4,014,701 56,204
Previous Year Closing 44,244
Additional 11,960
5.24.5 Regulatory Reserve

As required by NRB directive # 4, the Bank has created Regulatory Reserve and movement of reserve during the year is as follows:
NPR '000
Transfer to Reserve 217,826
Interest collected till Shrawan 15, 2076 of NPR 30,525,777 has been considered and not been transferred from regulatory reserve as
per circular no. 27/075/76
5.24.6 Deferred Tax Reserve

As on the reporting date, the Deferred Tax Liabilities has been created, as a result the corresponding Deferred Tax Reserve of NPR
41,845,804 on the books is not required. Thus, same has been transferred from Deferred Tax Reserve to Retained Earning.
5.24.7 Corporate Social Responsibility

NPR '000
Transfer to Reserve 30,233
Expensed during the year 11,754
As per the NRB directive no. 6.16 on the Corporate Social Responsibility, the Bank has allocated 1% of the net profit of current
fiscal year for CSR activities. The amount allocated for corporate social responsibility reserve is NPR 30,533,041 and NPR 13,348,619
respectively for current year and previous year.

5.25 Disclosure of Actuarial Valuation for Leave and Gratuity

NPR ‘000
2019 2018
Particulars
Leave Leave
Gratuity Gratuity
(Unfunded) (Unfunded)
Change in Present Value Obligations:
PV of Obligation at beginning of the year 142,768 128,512 130,501 96,195
Adjustment to opening liability - - - -
Interest cost 11,838 47,532 11,004 7,748
Current Service Cost 25,416 9,968 24,980 50,542
Benefit paid (22,466) (35,511) (16,460) (20,205)
Actuarial (Gain)/ Loss (17,773) 5,122 (7,257) (5,767)
Liability at the end of the year 139,784 155,624 142,768 128,512
Change in Fair Value of Plan Assets:
FV of Plan Asset at Beginning of the Year 117,970 - 97,338 -
Adjustments to the opening fund - - (3,644) -
Interest Income 9,037 - 9,853 -
Contribution by Employer 27,795 - 40,735 -
Benefit paid (22,466) - (16,460) -
Actuarial Gain/(Loss) on Plan Assets (1,073) - (9,853) -
Fair Value of Plan Asset at End of the Year 131,263 - 117,970 -
Amount Recognized in SOFP:
Present Value of Obligations at Year End 139,784 155,624 142,768 128,512
Fair Value of Plan Assets at Year End 131,263 - 117,970 -
Unfunded Status (8,521) 155,624 (24,799) (128,512)
5.26 Reconciliation Status

NPR '000
Particulars Total Amount < 3 Months > 3 < 6 Months > 6 <12 Months <12 Months
Branch Reconciliation Nil Nil Nil Nil Nil
Agency Accounts 1,147,614 1,145,352 1,931 331 -
The outstanding balance is total of debit and credit balance. The difference has been identified, reconciled and are being reviewed
on periodic basis.

5.27 Disclosure related to Training
As per NRB Directive 6(6), Bank should spend 3% of total personnel expense of previous year on training and personal development
of employees. Accordingly, the Bank has spent NPR 64,237,498 during the FY 2075/76 on different Internal & External Trainings.
Particulars Amount
Total Employee Expense for FY 2074/75 1,782,112,947
3% of the above limit 53,463,388
Surplus Fund brought forward from Last Year -
Minimum Expenses to be made 53,463,388
Total Expense Made during the year

64,237,498
(External & Internal Trainings)
Surplus Fund Carried forward to next year Nil

NIC ASIA
LAGHUBITTA
BITTIYA
SANSTHA
7.1 Director’s Report..............................................................316

7.2 Independent Auditor's Report................................. 324
7.3 Financial Statement......................................................326


REPORT OF BOARD OF DIRECTORS During the first year of operation, the organization had 28
PRESENTED IN SECOND ANNUAL GENERAL branches in 14 districts. In 2018/19, 33 new branches were
MEETING FISCAL YEAR 2018/19 opened which expanded the organization’s operation over 19
districts. The organization was successful in opening following
new branches:
Respected Shareholders, representatives of NIC ASIA Bank Municipality/Rural
S.N District Branch
Ltd. And entire attendees, Municipality
1 Kailali Gauriganga Municipality Masuriya
On behalf of board of directors, I would like to welcome you all 2 Kailali Bardagoria Rural Municipality Bahuniya
for the second annual general meeting of NIC ASIA Laghubitta 3 Kailali Kailari Rural Municipality Hasuliya
Bittiya Sanstha Ltd. 4 Kailali Tikapur Municipality Narayanpur
5 Kapilvastu Mayadevi Rural Municipality Dumara
NIC ASIA Laghubitta Bittiya Sanstha Ltd., registered as
6 Kapilvastu Krishnanagar Municipality Bahadurgunj
subsidiary company of NIC ASIA Bank Ltd. is running in second
7 Kapilvastu Banganga Municipality Bodhgaun
year of its operation. By establishing corporate office in
8 Chitwan Khaireni Municipality Parsa
remote district Jajarkot, we are committed towards providing
9 Chitwan Ratnanagar Municipality Sauraha
microfinance services to those who do not have ease of access
10 Chitwan Ichhakamana Rural Municipality Kurintar
to such services and enhancing their financial and social
11 Nawalparasi-West Sarawal Rural Municipality Gowaraiya
status. During the review period 61 branches are in operation
12 Nawalparasi-West Sunuwal Municipality Swathi
in 14 districts. We are hopeful that we shall always receive
13 Nawalparasi-West Ramgram Municipality Hakui
same level of cooperation from shareholders and stakeholders
14 Nawalparasi-East Kawasoti Municipality Magarkot
in achieving our objectives of providing services to deprived
15 Nawalparasi-East Binayi Triveni Rural Municipality Dumkhibas
sector of remote areas.
16 Nawalparasi-East Hupsekot Rural Municipality Hupsekot
1. Financial Highlights of FY 2018/19 17 Bardiya Badaiyataal Rural Municipality Mainapokhar
18 Bardiya Basgadi Municipality Basgadi
a. Major Highlights
19 Bardiya Geruwa Rural Municipality Shantibazar
Financial highlights and major indicators of FY 2018/19 are as 20 Banke Baijanath Rural Municipality Samjhana chowk
follows: 21 Banke Duduwa Rural Municipality Milan chowk
22 Banke Janaki Rural Municipality Ganapur
Amount NPR ‘000
23 Rupandehi Tilotama Municipality Semara
As on 16 July As on 18 July
Particulars % Increment 24 Rupandehi Gaidhawa Rural Municipality Laundihawa
2019 2018
Paid up Capital 1,004,500.00 70,000.00 1,335 25 Rupandehi Om Satia Rural Municipality Basantpur
Net Worth 1,109,225.00 64,416.00 1,622 26 Surkhet Chaukuney Rural Municipality Chaukuney
Borrowing (Net) 3,201,251.00 749,008.00 327 27 Surkhet Birendranagar Municipality Bangesimal
Saving Deposit 571,753.00 68,612.00 733 28 Dang Rapti Rural Municipality Sishaniya
Investment 4,496,217.00 828,256.00 443 29 Jumla Kankasundari Rural Municipality Gothijeula
Operating Profit 172,177.00 (5,363.00) 3,310 30 Jajarkot Triveni Nalgad Municipality Dalli
Net Profit after tax 110,309.00 (5,584.00) 2,075 Lasakhupakhar Rural

31 Sindhupalchowk Mude Bazar
Municipality
32 Makwanpur Bakaiya Rural Municipality Hattisudey
33 Nuwakot Likhu Rural Municipality Dhikurey
b. Branch Expansion

c. Customer Base d. Lending and Deposit Transaction
During the second year of operation, the organization has During FY 2018/19, total loans and advances of NPR 5.49 billion
provided microfinance service through its 61 branches to 2,395 was disbursed out of which NPR 1 billion was settled resulting
groups consisting of 24,392 members. The table below shows outstanding loan balance as on 16 July 2019 to be NPR 4.49
the increment in customer from last year billion. Total deposit balance of 24,300 members as on 16 July
2019 amounts to NPR 570 million.
e. Human Resource Training and Capacity Development
There has been increase in number of staffs along with

increased transactions of institution. As on 16 July 2019, 205
Members (In Number) staffs were employed by institution out of which 80 staffs
(39%) were female. Realizing the fact that capacity, confidence
24392
and motivation of staffs plays vital role in stable growth of
the organization; training and capacity development of staffs
is prioritized by institution. During the review period, active
participation of all staffs was ensured in 12 trainings organized
by institutions itself. Participation of staffs in various national
6437
and international trainings, workshop and seminar are ensured,
therefore one of our staff participated in a training organized
in Bangladesh.
2017-18 2018-19
f. Investment
During the year 2018-19, the organization in agreement with
NIC Capital Ltd., has invested NPR 150 million in shares of
various companies.
2. Effects of National and International Situation on

Group (In Number) Transactions of the Company
2395
Transactions of company were not significantly affected
by international scenario during review period. However,
company could not mark itself safe from liquidity crunch in
national market. Due to liquidity crisis, it was difficult for
company to arrange for investable fund. Due to expansion of
668 33 new branches during the review period, it became difficult
for company to arrange adequate fund for operation. Cost
of fund was high because of borrowing from other bank and
2017-18 2018-19 financial institutions at high interest up to 14% to meet the
requirement of liquidity for regular operation of business.

3. Progress of current year till date of report and Opinion of Board of Directors on Future Prospects
a. Progress of current year till date of report
Comparison of first month of FY 2019-20 with corresponding first month of FY 2018-19
As On As On
S.N Particulars Units % Achievement
17 August 2019 16 August 2018
1 Branches Number 61 28 118
2 Customer Member Number 24,392 8,156 199
3 Borrowers Number 18,585 4,675 298
4 Loan Distributed Npr '000 5,579,485 1,162,305 380
5 Investment In Loan Npr '000 4,449,591 1,125,669 295
6 Member's Saving/Deposit Npr '000 578,074 85,228 578
7 Interest Income Npr '000 70,449 11,924 491
8 Other Income Npr '000 2,461 6,636 (63)
9 Interest Expense Npr '000 34,148 10,388 229
10 Personnel Expense Npr '000 4,581 2,069 121
11 Other Operating Cost Npr '000 3,740 1,504 149
12 Loan Loss Provision Npr '000 240 2,974 (92)
13 Operating Profit (Before Staff Bonus And Tax) Npr '000 30,201 1,625 1759
Projection of 2019/20
S.N Particulars Units 2018-19 2019-20 Increment
1 Branches Number 61 99 62%
2 Customer Member Number 24,248 60,552 148%
3 Borrowers Number 19,003 48,837 163%
4 Investment in Loan NPR '000 4,496,217 5,253,783 18%
5 Member's Saving/Deposit NPR '000 578,074 1,463,466 153%

6 Net Profit NPR '000 70,449 183,971 161%
b. Opinion of Board of Directors regarding future plan and • Maximum use of technology, adoption of The NIC Asian
prospects for progress of institution is as follows: DNA of holding company NIC ASIA Bank Ltd, cooperation
and technical support of Bank, business management and
• With the increasing opportunities in microfinance sector
prompt service shall be competitive advantage for us. With
of Nepal, number of threat is also increasing. Strategy of
the collaboration of NIC ASIA Bank Ltd. modern services
institution shall be formulated in such a way as to face
and facilities shall be provided to our members and other
challenges tactfully and make optimum utilization of
customers.
opportunities.
• In order to strengthen internal control system of Bank,
• We shall remain committed towards providing customer
effectiveness of board level committees like audit
oriented services and facilities keeping in mind level of
committee and risk management committee shall be
awareness of customers, changing need and demand,
enhanced.
availability of other means of providing services,
development and enhancement of information system
• With the collaboration of NIC ASIA Bank, Financial Literacy
and competitive environment.
Program shall be conducted in different places.

• Necessary improvisation in loan, deposit and other 7. Major Challenges Affecting Business Transactions
microfinance services as per the need and demand of
a. Possible threat from extensive competition in microfinance
customer and expansion of additional services.
sector
• Diversification of means and medium of financial sources b. Difficulty arising due to utilization of loan facility by same
necessary for institution. customer from more than one microfinance financial
institutions
4. Industrial and Business Relationship of Company
c. Lack of adequate financial resources due to Liquidity crisis
Company has maintained harmonious relationship with of banks and financial institutions
regulatory bodies like Nepal Rastra Bank, Company Registrar’s
d. Frequent amendment in rules and regulations by Nepal
Office, and so on. We shall maintain professional relationship
Government and regulatory authorities
with government and non government institutions involved in
poverty alleviation and rural development in days to come. e. Difficulty arising due to inadequate infrastructures like
electricity, internet, road, security and skilled manpower
5. Corporate Social Responsibility and Customer for organizing programs in remote areas
Protection Fund f. Problems arising due to periodic natural calamities
a. Corporate Social Responsibility
Board of Directors shall endeavor to minimize effects of such
As institution was running in first year of its operation, threat and challenges for smooth operation of business.
significant contribution for fulfillment of social responsibility
was not possible during review period. We are confident 8. Audit Report and Opinion of Board of Directors
that we shall ensure our contribution in social activities like:
Audit report attached with this report and financial statements
organization of financial literacy program, participation and
reflect true and fair picture of organizational affairs. There are
contribution in social programs organized at local level, support
no significant remarks in audit report and minor issues raised
to victims of natural calamities and medical treatment of those
by auditors are in process of resolution.
suffering from critical illness, assistance for education, health
and sanitation, internet services, agriculture and other areas 9. Amount of Proposed Dividend
specified by Nepal Rastra Bank.
No dividend was proposed for FY 2018-19, as the shares are
b. Social Security of Customers not issued to public yet.
In order to contribute for the protection of borrowers and 10. Internal Control System
corporate development, customer protection fund shall be
created by allocating specific percentage from the profit of Various procedures shall be developed with time for the
every year and distinct procedural guideline shall be formulated purpose of effective internal control system. In order to ensure
for the purpose of operation of the fund. better governance of institution, financial and administration
bylaw, staff bylaw, loan write off bylaw, credit policy, and
6. Change in Board of Directors and Reasons thereof Information technology policy are formulated and brought
into effect. We shall try our best to strengthen internal control
Then Board Current Board
SN Status Remarks system and maintain better image of institution.
Members Members
1 Mr. Arjun Raj Khaniya Mr. Arjun Raj Khaniya Chairman

a. Audit Committee
2 Mr. Dinesh Bhari Mr. Dinesh Bhari Director
Representative Audit Committee of institution constitutes following members:
3 Mr. Bishal Sigdel Mr. Bishal Sigdel Director of NIC ASIA
Bank Ltd.
4 Mr. Tej Raj Timilsina Mr. Prakash Baral Director Mr. Raju Prasad Adhikari, Director Coordinator
5 Mr. Padam Thakulla Mr. Raju Prasad Adhikari Director
Mr. Bishal Sigdel Member
During the review period Mr. Prakash Baral and Mr. Raju Head Internal Audit Member Secretary
Prasad Adhikari were appointed by NIC ASIA Bank Ltd. as
During fiscal year 2018/19, meeting of audit committee was
representative in the Board in place of Mr. Tej Raj Timilsina and
held five times.
Mr. Padam Thakulla.

b. Risk Management Committee 11. Expression of Gratitude

Risk Management Committee of institution constitutes On behalf of Board of directors, I would like to thank customers,
following members: shareholders, NIC ASIA Bank Ltd., Nepal Rastra Bank, Company
Registrar’s Office, office bearer of different institutions and
Mr. Prakash Baral, Director Coordinator authorities, journalists, and all well wishers for your direct
Head Operation Department Member and indirect support, faith, direction and motivation towards
our institution. We are grateful towards our shareholders, NIC
Head Credit Department Member Secretary ASIA bank Ltd. and other banks and financial institutions for
your financial and technological assistance for the smooth
During fiscal year 2018/19, meeting of risk management operation of business. We hope that we shall receive same
committee was held four times. level of cooperation from everyone in days to come.
c. Karamachari Bebasthapan tatha Sewa Suvida Samiti It is due to support and assistance of organizations mentioned
Karmachari Bebasthapan tatha Sewa Suvida Samiti constitutes above, management and hard work of staffs of institution that
of following members: we are able to achieve desired results. Hence, we would like to
thank chief executive officer, management and all the staffs of
Mr. Prakash Baral, Director Coordinator institutions for their contribution.
Head Internal Audit Member Thank you!

Head Human Resource Member Secretary
On behalf of Board of Directors
During fiscal year 2018/19, meeting of karmachari bebasthapan Arjun Raj Khaniya
tatha sewa suvida samiti was held four times. Chairman
d. Sampati Suddhikaran Anugaman Samiti
Sampati Suddhikaran Anugaman Samiti constitutes of

following members:
Mr. Bishal Sigdel Coordinator

Head Operation Department Member
Head Finance Department Member Secretary
During fiscal year 2018/19, meeting of sampati suddhikaran

anugaman samiti was held two times.

DISCLOSURE AS PER SECTION 109 OF COMPANIES ACT, 2063
1. In case if shares are forfeited number of shares, quoted price of such shares, total paid up amount for such shares before
forfeiture, amount recovered from sale of forfeited shares, amount refunded after sale of forfeited share
No.
2. Details of substantial shareholders provided to company during review period
NIC ASIA Laghubitta Bittiya Sanstha Ltd. is subsidiary of NIC ASIA Bank Ltd. with 100% holding. Separate details of shareholders
have not been obtained from holding company
3. Details of share held by directors of company during review period and details obtained by company regarding involvement
of directors in securities transactions of company
Following is the details of shares held by directors of company during FY 2018/19:
1) Board of Directors
S.N Name Position Nature of Directorship Number of Shares held
1 Mr. Arjun Raj Khaniya Chairman Representative of NIC ASIA Bank Ltd.
2 Mr. Dinesh Bhari Director
Each member of Board of Directors are corporate
3 Mr. Bishal Sigdel Director representative for total 10,0450,000 shares held by NIC ASIA
Bank
4 Mr. Prakash Baral Director
5 Mr. Raju Prasad Adhikari Director
2) Ordinary Share 6. Details of Total Management Expenses During FY

2018/19
The institution has not issued shares that are set aside for
public. Hence, there is no any share under personal ownership Following is the detail of total management expenses
of board of directors and management. during FY 2018/19
NPR ‘000
4. Details provided by Directors in relation to agreement Personnel Expenses 50,922
entered with company and directors/ close relatives of Other Operating Expenses 157,727
directors for personal benefit Total Management Expenses 208,650
During review period company has not entered into any

agreement with directors/ close relatives of directors for 7. Details of amount receivable by company from Directors,
personal benefit of directors or his/ her close relatives Managing Director, Chief Executive Officer, Substantial
Shareholders of Company or their close relatives or firm,
5. In case of buy back of shares by the company, reason company or institutions associated with them
of such buy back, number of shares, quoted price and There is no any amount receivable by company from
Payment made by company for buying back Directors, Managing Director, Chief Executive Officer,
Company was not involved in such transactions during Substantial Shareholders of Company or their close
review year relatives or firm, company or institutions associated with
them

8. Remuneration and other facilities of Directors, managing

Particulars Amount '000
director, and Chief Executive Officer
Details of Balance Sheet
Only meeting allowance is provided to directors and there is
no provision of paying remuneration to Directors. During FY Share Capital invested by NIC ASIA Bank Ltd. 1,004,500
2018/19, total meeting allowance NPR 206,500 was paid to Deposit with NIC ASIA Bank Ltd 17,763
directors representing NIC ASIA Bank Ltd.
Receivable from NIC ASIA Bank Ltd -
S.N Name Position Loan received from NIC ASIA Bank Ltd 1,500,000
1 Mr. Arjun Raj Khaniya Chairman Details of Profit and Loss Account
2 Mr. Dinesh Bhari Director
Interest received from NIC ASIA Bank Ltd 545
3 Mr. Bishal Sigdel Director
Interest paid to NIC ASIA Bank Ltd 109,322
4 Mr. Prakash Baral Director
Loan Processing fee paid to NIC ASIA Bank Ltd 118,563
5 Mr. Raju Prasad Adhikari Director
Deputation/SLA Fee paid to NIC ASIA Bank Ltd 3,554
Meeting allowance payable to chairman and directors is NPR NIC ASIA Capital 242
3,000 and NPR 2,500 respectively. Total meeting allowance
paid to members of board of directors was NPR 206,500 12. Other matters to be disclosed in Director’s Report as per
during FY 2018/19. Practice of providing meeting allowance to the requirement of this act and other prevailing laws
Chief executive officer and company secretary is not in place.
Not applicable
Remuneration of Chief Executive Officer
13. Additional Disclosures as per Section 22(1) of Securities
During FY 2018/19 NPR 3,354,351.75 was paid to Chief executive Registration and Issuance Regulation
officer Mr. Laxmi Prasad Sharma.
a) Details Regarding Legal Proceedings
Remuneration of Chief Managers:
i. in case if any case was filed by or against institution during
Annual review period
S.N Name Position Remuneration
and allowance - Such information was not obtained
1 Mr. Subin Kaji Shrestha Chief Business Officer 1,320,000.00
2 Ms. Ranjita Dulal Chief Operating Officer 949,999.00

ii. in case if any case for non compliance with prevailing
regulation or criminal law was filed by or against director/
Chief Information
3 Mr. Bimal Nepal 830,229.00 promoter during review period
Technology Officer
4 Mr. Gopi Chandra Chief Credit Officer 434,444.00

- Such information was not obtained
Total 3,534,672.00
iii. in case if any case filed against director/ promoter for

9. Unpaid Portion of Dividend Payable to Shareholders financial offence
There is no such unpaid portion of dividend amount payable
- Such information was not obtained
to shareholders
b) Assessment of securities transaction and progress of
10. Details of Assets Purchased and Sold as per Section 141
institution
During the FY 2018/19, the organization has not purchased or
sold assets as per Section 141 i. Opinion of management on trading of shares of institution
in Securities Market
11. Details of Related Party Transactions as per Section 175
- As market price of share and trading of shares is determined
Following transactions were incurred with holding company
by open market process of Nepal Stock Exchange,
NIC ASIA Bank
management does not have separate opinion.

ii. Following details of shares of institution: maximum, minimum, closing price and total number of shares traded and days traded
during every quarter of review year
- Not applicable. Shares set aside for public have not been issued yet and are not listed in Nepal Stock Exchange.
c) Problems and Challenges
i. Internal
• Increasing Operating Expenses
• Lack of staffs for field services
ii. External
• Unhealthy competition
• Credit from more than one microfinance
• Crisis of investable fund and high interest rate
iii. Strategy
• Proficient administration
• Development, expansion and diversification of customer oriented services and facilities
• Reinforcement of risk management
d) Corporate Governance
By prioritizing corporate governance, institution is fully complying with directives issued by Nepal Rastra Bank and other related acts
and regulations.



BALANCE SHEET
As on July 16, 2019
Amount in NPR
Particulars Schedule This Year Previous Year
CAPITAL AND LIABILITIES

1. Share Capital 4.1 1,004,500,000 70,000,000
2. Reserve and Fund 4.2 104,725,059 (5,584,041 )
3. Debenture and Bond 4.3 - -
4. Borrowing 4.4 3,201,250,968 749,008,375
5. Deposit from Customers 4.5 571,752,522 68,612,427
6. Proposed Dividend - - -
7. Income Tax Payable - - -
8. Other Liabilities 4.6 34,525,713 6,268,962
Total Capital and Liabilities 4,916,754,263 888,305,723
ASSETS
1. Cash and Cash Equivalent - 487,646 1,352,894
2. Due from Nepal Rastra Bank - - -
3. Placement with Banks and Financial Institutions 4.7 43,252,105 47,397,649
4. Money at Call and Short Notice - 219,824,892 -
5. Investment 4.8 142,305,714 -
6. Loans and Advances 4.9 4,472,718,044 819,973,745
7. Fixed Assets 4.10 30,530,275 18,681,276.73
8. Non Banking Assets 4.11 - -
9. Other Assets 4.12 7,635,587 900,158
Total Assets 4,916,754,263 888,305,723
Contingent Liabilities Schedule 4.13

Declaration of Directors Schedule 4.23
Index of Capital Fund Schedule 4.24
Index of Risk Weighted Assets Schedule 4.24(a)
Major Indicators Schedule 4.25
Significant Accounting Policies Schedule 4.26
Notes to Accounts Schedule 4.27
Schedule 4.1 to 4.13 are intergral part of Balance Sheet
Subin Kaji Shrestha Laxmi Prasad Sharma Arjun Raj Khaniya

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

C.A Binaya Prakash Shrestha
Bishal Sigdel Prakash Baral Raju Prasad Adhikari Dinesh Bhari K.A.S Associates
Director Director Director Director Chartered Accountant
Place: Kathmandu
Date : September 23, 2019

PROFIT AND LOSS ACCOUNT
For the year ended July 16, 2019
Amount in NPR
1. Interest Income 4.14 561,170,144 11,007,964
2. Interest Expense 4.15 251,217,544 9,685,097
Net Interest Income 309,952,600 1,322,867
3. Commission and Other Operating Income 4.16 93,784,571 15,904,750
4. Income from Foreign Exchange Fluctuation - -
Net Operating Income 403,737,172 17,227,617
5. Personnel Expenses 4.17 50,922,484 7,287,106
6. Other Operating Expenses 4.18 157,727,978 7,021,813
7. Loss from Foreign Exchange Fluctuation - -
Operating Profit before Provision for Possible Losses 195,086,710 2,918,698
8. Provision for Losses 4.19 22,910,189 8,449,200
Operating Profit 172,176,521 (5,530,502 )
9. Non Operating Income/Loss 4.20 - -
10. Provision for Possible Losses Written Back 4.21 - 166,637
Profit from Regular Activities 172,176,521 (5,363,865 )
11. Profit/Loss from Extraordinary Activities 4.22 - -
Net Profit after Inclusion of All Activities 172,176,521 (5,363,865 )
12. Provision for Staff Bonus 17,217,652
13. Provision for Income Tax 44,649,768 220,176
Current Year Provision for Tax 47,526,304
Provision for Tax till Last Year
Differed Tax Income/Expense (2,876,536 ) 220,176
Net Profit/Loss 110,309,100 (5,584,041)
Schedule 4.14 to 4.22 are integral part of Profit and Loss Account


Place: Kathmandu

PROFIT AND LOSS APPROPRIATION ACCOUNT

As on July 16, 2019
Amount in NPR
INCOME
1. Accumulated Profit till Last Year - -
2. Current Year Profit 110,309,100 -
3. Exchange Fluctuation Fund - -
Total 110,309,100 -
EXPENSES
1. Accumulated Loss till Last Year 5,584,041
2. Current Year Loss - (5,584,041)
3. General Reserve Fund 22,061,820 -
4. Contingency Reserve - -
5. Institution Development Fund - -
6. Dividend Adjustment Fund - -
7. Staff Related Reserves - -
8. Proposed Cash Dividend - -
9. Proposed Bonus Share - -
10. Special Reserve Fund - -
11. Exchange Fluctuation Fund - -
12. Capital Redemption Reserve - -
13. Capital Adjustment Fund - -
14. Customer Protection Fund 1,103,091 -
15. Corporate Social Responsibility Fund 1,103,091 -
Total 29,852,043 (5,584,041)
16. Accumulated Profit/Loss 80,457,057 (5,584,041)


Place: Kathmandu

CASH FLOW STATEMENT
Amount in NPR
A. Cash flow from Operating Activities (823,035,330) (751,576,555)
1. Cash Inflow 654,954,716 26,912,714
1.1 Interest Income 561,170,144 11,007,964
1.2 Recovery of Loan written off - -
1.3 Commission and other Income 93,784,571 15,904,750
2. Cash Payment (484,589,445) (21,918,641)
2.1 Interest Expense (250,880,050) (9,685,097)
2.2 Staff Expense (46,245,802) (6,575,700)
2.3 Office Expenses (139,499,317) (5,594,298)
2.4 Income Tax Paid (47,964,276) (63,546)
2.5 Other Expenses - -
Cash flow before changes in Working Capital 170,365,271 4,994,073
Increase/Decrease in Current Assets (3,671,601,299) (829,092,920)
1. Increase/ Decrease in Money at Call and Short Notice -
2. Increase/ Decrease in Other Short Term Investment -
3. Increase/ Decrease in Loan (3,667,960,202) (828,256,308)
4. Increase/ Decrease in Other Assets (3,641,097) (836,612)
Increase/Decrease in Current Liabilities 2,678,200,698 72,522,292
1. Increase/ Decrease in Deposit 503,140,095 68,612,427
2. Increase/ Decrease in Short Term Borrowing 2,180,330,510 -
3. Increase/ Decrease in Other Liabilities (5,269,907) 3,909,865
B. Cashflow from Investment Activities (168,562,654) (18,681,277)
1. Increase/ Decrease in Long Term Investment (150,000,000) -
2. Increase/ Decrease in Fixed Assets (18,562,654) (18,681,277)
3. Interest Income from Long Term Investment - -
4. Dividend Income - -
5. Others - -
C. Cashflow from Financial Activities (1,206,412,084) 819,008,375
1. Increase/ Decrease in Long term Borrowing (Bond, Debenture, etc.) 271,912,084 749,008,375
2. Increase/ Decrease in Share Capital 934,500,000 70,000,000
3. Increase/ Decrease in Long Term Liabilities - -
4. Increase/ Decrease in Subsidized Refinance from Nepal Rastra Bank - -
D. Income/ Expense from Fluctuation of Exchange Rate of Cash and Bank Balance - -
E. Cashflow from All Activities During Current Year 214,814,100 48,750,543
F. Opening Balance of Cash and Cash Equivalents 48,750,543 -
G. Closing Balance of Cash and Cash Equivalents 263,564,643 48,750,543


Place: Kathmandu

330
ASIA Bank

Brief About NIC
Amount in NPR
Accumulated General Capital Share Exchange Deffered Tax Other Reserve

Particulars Share Capital Total Amount
Profit/Loss Reserve Fund Reserve Fund Premium Fluctuation Fund Reserve Fund
Management
Initial Balance 70,000,000 (5,363,865) (220,176) 64,415,959
Deferred Tax -
Adjusted Initial Balance -

Adjustment -
a. Increase in Share Capital 934,500,000 934,500,000

Corporate
Governance
b. Current Year Profit 110,309,100 110,309,100
c. Transfer from Current Year Profit (22,061,820) 22,061,820 -

Risk
d. Deffered Tax Reserve -

Management
e. Proposed Bonus Share -
f. Customer Protection Fund (1,103,091) 1,103,091 -
g. Corporate Social Responsibility Fund (1,103,091) 1,103,091 -
h. Deferred Tax Reserve (220,176) 220,176 -

Sustainability
i. Investment Adjustment Fund -
Final Balance 1,004,500,000 80,457,057 22,061,820 - 2,206,182 1,109,225,059

of NIC ASIA Bank


Place: Kathmandu
Bittiya Sanstha
NIC ASIA Laghubitta
Capital
NIC ASIA
Network of
NIC ASIA Bank
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
4.1 Share Capital and Ownership Amount in NPR
1. Share Capital
1.1 Authorized Capital 1,435,000,000.00 100,000,000
a) 14,350,000 ordinary share @ NPR 100 per share 1,435,000,000.00 100,000,000
b) …… Non Redeemable Preference Share @ NPR … per share - -
c) …… Redeemable Preference Share @ NPR … per share - -
1.2 Issued Capital 1,435,000,000.00 100,000,000
b) …… Non Redeemable Preference Share @ NPR … per share - -
1.3 Paid up Capital 1,004,500,000.00 70,000,000
b) …… Non Redeemable Preference Share @ NPR … per share -
1.4 Proposed Bonus Share - -
1.5 Calls in Advance
Total (1.3+1.4+1.5) 1,004,500,000.00 70,000,000
Amount in NPR
This Year Previous Year

Particulars
% Share Capital % Share Capital
1. Domestic Ownership 100 1,004,500,000 - -
1.1 Nepal Government - - - -
1.2 "A" class Licensed Institutions 100.00 1,004,500,000.00 100 70,000,000
1.3 Other Licensed Institutions - - - -
1.4 Other Institutions - - - -
1.5 Public - - - -
1.6 Other - - - -
2. Foreign Ownership - - - -
Total 100.00 1,004,500,000.00 100 70,000,000
Details of Individual/ Group/ Firm/ Company with investment in share more than 0.5%
Amount in NPR
Name of Shareholder No. of Shares % Share Capital
NIC ASIA Bank Limited 10,045,000 100.00 1,004,500,000

4.2 Reserves and Fund Amount in NPR
1. General / Statutory Reserve Fund 22,061,820.09 -
2. Capital Reserve Fund - -
5. Other Reserve and Fund 2,206,182.01 -
5.1 Contingency Reserve - -
5.2 Microfinance Development Fund - -
5.3 Dividend Equalization Fund - -
5.4 Special Reserve - -
5.5 Assets Revaluation Fund - -
5.6 Customer Protection Fund 1,103,091.00
5.7 Other Free Reserves - -
5.8 Other Reserves Fund 1,103,091.00 -
6. Accumulated Profit/ Loss 80,457,057.34 (5,584,041.00)
7. Exchange Equalization Fund - -
Total 104,725,059.44 (5,584,041.00)
4.3 Debenture and Bond Amount in NPR
1. ... % Bond/ Debenture @ NPR …. Per Debenture issued on …. And to be paid on ….

- -
(Redemption Reserve till date) NPR ….. Other Possible Liabilities
Total - -
4.4 Borrowing Amount in NPR
A. Domestic
1. Nepal Government - -
2. Nepal Rastra Bank - -
3. Repo - -
4. Bank and Financial Institutions 3,201,250,968 749,008,375
5. Other Institutions - -
6. Other - -
Total 3,201,250,968 749,008,375
B. Foreign
1. Banks - -
2. Other - -
Total - -
C. Total (A+B) 3,201,250,968 749,008,375

4.5 Deposit from Customers Amount in NPR
1. Non Interest Bearing Accounts
1.1 Financial Institutions - -
1.2 Other Institutions - -
1.3 Individual - -
Total of Non Interest Bearing Accounts - -
2. Interest Bearing Accounts - -
a. Saving Account 571,752,522.22 68,612,427
1.1 Institutions - -
1.2 Individuals 571,752,522 68,612,427
1.3 Others
b. Fixed Deposit - -
1.1 Institutions - -
1.2 Individuals - -
1.3 Others - -
Total of Interest Bearing Accounts 571,752,522 68,612,427
Total Deposit 571,752,522 68,612,427
4.6 Other Liabilities Amount in NPR
1. Provision/ Gratuity 726,900.00 -

2. Provision for Leave Encashment 2,164,735.29 303,867
3. Employee Provident Fund 295,086.00 241,391
4. Employee Welfare Fund - -
5. Provision for Employee Bonus 17,217,652.08 -
6. Interest Payable on Deposit - -
7. Interest Payable on Borrowings 337,494.20 -
8. Sundry Creditors 5,708,432.28 2,049,981
9. Reconciliation Account - -
10. Differed Tax Liability - 220,176
11. Bills Payable - -
12. Dividend Payable - -
13. Other - -
13.1 Tax Deducted at Source 867,401.74 269,407
13.2 Staff CIT Payable 1,331,261.33 150,000
13.3 Staff Salary Payable 35,622.96 564,160
13.4 Director's Meeting Allowance 121,125.00 42,500
13.5 Rent Payable 59,940.00 136,420
13.6 Audit Fee Payable 167,250.00 111,500
13.7 Leave Encashment Payable - -
13.8 Gratuity Payable - -
13.9 Borrower Protection Fund - -
13.10 Micro Credit Insurance Payable 778,879.12 2,140,575
13.11 Other 4,713,933.23 38,986
Total 34,525,713.23 6,268,962

4.7 Placement with Financial Institutions Amount in NPR
Foreign Currency in NPR

Domestic Total NPR
Particulars Previous Year
Currency Total
Indian Rupees Foreign Exchange
1. Domestic Licensed Institutions 263,076,997.00 - - - 263,076,997.00 47,397,649.43
a. Current Account 43,252,104.57 - - - 43,252,104.57 47,397,649.43
b. Other Account 219,824,892.43 - - - 219,824,892.43 -
Total 263,076,997.00 - - - 263,076,997.00 47,397,649.43
4.8 Investments Amount in NPR
Foreign Currency in NPR

Trading Others
1. Nepal Government Treasury Bill - - - -
2. Nepal Government Saving Bond - - - -
3. Nepal Government other Bonds - - - -
4. Nepal Rastra Bank Bonds - - - -
5. Foreign Bond - - - -
6. Domestic Licensed Institutions - - - -
7. Foreign Bank - - - -
8. Share of Institutions - - 150,000,000 -
9. Debenture and Bond of Institutions - - - -
10. Other Investment - - - -
Total Investment - - 150,000,000 -
Provisions - - 7,694,286 -
Net Investment - - 142,305,714 -
4.8(a) Investment in Share, Debenture and Bond Amount in NPR
Particulars Cost NPR Market Price NPR Provison NPR This Year Previous Year
1. Investment in Share - - - - -
2. Investment in Bond and Debenture - - - - -
Total Investment - - - - -
3. Risk Related Provisions
3.1 Provision till Last Year - - - - -
3.2 Increase/ decrease during This Year - - - - -
Total Provisions - - - - -
Net Investment - - - - -

4.9 Loans and Advances Amount in NPR
Details of Loans and Advances

Insured Uninsured This Year
1. Performing Loan 2,910,900,513.86 1,585,315,996.00 4,496,216,509.86 828,256,308.00
Pass Loan 2,910,900,513.86 1,585,315,996.00 4,496,216,509.86 828,256,308.00
2. Non Performing Loan - - - -
2.1 Substandard - - -
2.2 Doubtful - - -
2.3 Loss - - - -
3. Total Loans and Advances (1+2) 2,910,900,513.86 1,585,315,996.00 4,496,216,509.86 828,256,308.00
4. Loan Loss Provisions 7,586,091.80 15,912,373.96 23,498,465.76 8,282,563.08
4.1 Pass 7,277,251.28 15,853,159.96 23,130,411.24 8,282,563.08
4.2 Substandard - - - -
4.3 Doubtful - - - -
4.4 Loss - - - -
4.5 Additional 308,840.52 - 308,840.52
4.6 Additional for Loan against third party 59,214.00 59,214.00
5. Loan Loss Provisions Till Last Year - 8,282,563.08 8,282,563.08 -
5.1 Pass - 8,282,563.08 8,282,563.08 -
5.2 Substandard - - - -
5.3 Doubtful - - - -
5.5 Loss - - - -
5.5 Additional - - - -
5.6 Additional for Loan against third party - - - -
6. Provision written back this year - - - 166,636.92
7. Additional loan loss provision during this year 7,586,091.80 7,629,810.88 15,215,902.68 8,449,200.00
8. Increase/Decrease this year 7,277,251.28 7,629,810.88 14,907,062.16 8,282,563.08
9. Total Loan Loss Provision 7,586,091.80 15,912,373.96 23,498,465.76 8,282,563.08
Net Loans and Advances 2,903,623,262.58 1,569,403,622.04 4,472,718,044.10 819,973,744.92

4.10 Fixed Assets Amount in NPR
Assets
Previous
Particulars This Year
Office Leasehold Year
Building Vehicles Machinery Other
Equipment Assets
1. Cost
a. Closing Balance Last Year - 4,940,656.00 - 12,405,054.16 1,438,231.23 1,182,055.00 19,965,996.39 19,965,996
b. Addition This Year - 259,900.00 - 17,561,878.60 - 740,875.00 18,562,653.61 19,965,996
c. Addition This Year due to Revaluation - - - - - - - -
d. Sale During The Year - - - - - - - -
e. Written off This Year - - - - - - -
Total (a+b+c+d+e) - 5,200,556.00 - 29,966,932.77 1,438,231.23 1,922,930.00 38,528,650.00 19,965,996
2. Depreciation
a. Till Previous Year - 69,477.98 - 1,032,979.51 81,705.70 100,556.47 1,284,719.66 1,284,720
b. This Year - 1,001,992.54 - 5,274,182.07 95,921.04 341,559.43 6,713,655.08 1,284,720
c. Depreciation Revaluation - - - - - - - -
d. Depreciation Adjustment/Revaluation - - - - - - - -
Total Depreciation - 1,071,470.52 - 6,307,161.58 177,626.74 442,115.90 7,998,374.74 1,284,720
3. Book Value (1-2) - 4,129,085.48 - 23,659,771.19 1,260,604.49 1,480,814.10 30,530,275.26 18,681,277
4. Land - - - - - - - -
5. Capitalized Construction
- - - - - - - -
(To be capitalized)
Total (3+4+5) - 4,129,085.48 - 23,659,771.19 1,260,604.49 1,480,814.10 30,530,275.26 18,681,277
4.11 Non Banking Assets Amount in NPR
Provison for Loss

Date of Acceptance of Total Amount of Non Net Non
Name and Address of Borrower Previous Year
Non Banking Assets Banking Assets Banking Assets
% Amount NPR
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
Total - - - - - -

4.12 Other Assets Amount in NPR
1. Stock of Stationery 490,085.61 490,085.61 -
2. Income Receivable on Investment - -
3. Interest Receivable on Loan 38,075,852.41 - -
Less: Interest Suspense (38,075,852.41) - -
4. Commission Receivable - - -
5. Sundry Debtors 203,465.94 203,465.94 -
6. Employee Loans and Advances 2,940,211.54 2,940,211.54 -
7. Advance Payment 832,146.04 832,146.04 679,977.16
8. Cash in Transit - - -
9. Others in Transit (Including Cheque) - - -
10. Draft Paid Without Notice - - -
11. Miscellaneous Expenditure Not Written Off - - 153,634.92
12. Reconciliation Account - - -
13. Deferred Tax Assets - 2,656,359.63 -
14. Other - -
a. Advance Income Tax 48,027,822.39 - -
Less: Provision for Tax 47,526,303.95 501,518.44 63,546.15

b. Telephone and Other Deposit s - 11,800.00 3,000.00
Total 7,635,587.20 900,158.23
4.12(a) Other Assets (Additional Details) Amount in NPR
This Year
Upto 1 Year More than 1 upto 3 years Above 3 years Total
1. Interest Receivable on Loan 38,075,852.41 - - 38,075,852.41 6,245,625.14
2. Reconciliation Account - - -
3. Agency Amount
Total 38,075,852.41 - - 38,075,852.41 6,245,625.14
4.13 Contingent Liability Amount in NPR
1. Guarantee - -
2. Irrevocable Loan Commitment - -

3. Contingent Liability Against Income Tax - -
4. Acceptance and Other Contingent Liabilities - -
5. Unpaid portion of Partly Paid Shares and Securities - -
6. Unpaid Guarantee Claim - -
7. Claim against Institutions not accepted by Institutions - -
Total - -

4.14 Interest Income Amount in NPR
a. On Loans and Advances 507,460,701.77 9,304,380
b. On Investment - -
1. Nepal Government Security Bond - -
2. Nepal Rastra Bank Debenture - -
3. Debenture and Bond - -
4. Interest on Inter Bank Lending - -
c. Agency Balance - -
d. Money at Call and Short Notice - -
e. Others 53,709,442.72 1,703,584
1. Fixed Deposit - -
2. Call Deposit 53,709,442.72 1,703,584
Total 561,170,144.49 11,007,964
4.15 Interest Expense Amount in NPR
A. Deposit 23,587,711.60 345,599
1. Deposit of Member 23,587,711.60 345,599
2. Deposit of Public - -
B. Borrowing 227,629,832.74 9,339,498
1. Debenture and Bond - -
2. Loan from Nepal Rastra Bank - -
3. Inter Bank Lending 227,629,832.74 9,339,498
4. Other Institutions - -
5. Other Borrowings - -
C. Other - -
Total 251,217,544.34 9,685,097
4.16 Commisson and Other Operating Income Amount in NPR
1. Service Fee 92,875,700.00 15,588,750
2. Renewal Fee
3. Commission - -
4. Discount
5. Other 908,871.35 316,000
Total 93,784,571.35 15,904,750

4.17 Personnel Expenses Amount in NPR
1. Salary 23,605,415.00 2,780,604
2. Allowance 20,060,994.75 3,676,556
3. Additional Contribution to Provident Fund 990,298.00 120,696
4. Training Expenses 2,578,508.16 405,384
5. Uniform - -
6. Medical Expenses - -
7. Insurance - -
8. Provision for Leave Encashment 2,960,368.29 303,867
9. Provision for Gratuity 726,900.00 -
10. Other - -
Total 50,922,484.20 7,287,106

4.18 Other Operating Expenses Amount in NPR
1. Rent 7,136,272.29 978,716
2. Electricity and Water 355,609.48 40,180
3. Repair and Maintenance 1,054,287.80 32,047
a. Building - -
b. Vehicle 160,825.03 -
c. Others 893,462.77 32,047
4. Insurance 234,731.61 41,512
5. Postage, Telephone, Telex, Fax 4,894,982.22 302,197
6. Office Equipment and Furniture - -
7. Travel Allowance and Expenses 2,214,798.00 348,622
8. Printing and Stationery 2,280,186.59 84,761
9. Newspaper and Periodicals 7,200.00 -
10. Advertisement 252,611.18 70,697
11. Legal Expenses 42,000.00 20,270
12. Donation - 1,000
13. Board of Directors Related Expenses 206,500.00 50,000
a. Meeting Allowance 206,500.00 50,000
b. Other Expenses - -
14. Expenses related to Annual General Meeting 15,525.00 -
15. Audit Expenses 250,480.00 113,000
a. Audit Fee 169,500.00 113,000
b. Other Expenses 80,980.00 -
16. Fund Transfer Commission - -
17. Depreciation on Fixed Assets 6,713,655.08 1,284,720
18. Preoperating Expenses Written Off 153,634.92 38,409
19. Share Issuance Expenses - -
20. Professional Service Fees - -
21. Entertainment Expenses - -
22. Write Off - -
23. Security Expenses 759,554.17 424,990
24. Credit Security Premium 6,735,097.13
25. Commission and Discount 119,708,356.00 2,615,000
26. Others 4,712,496.13 575,693
a. Share Registration Expenses 657,754.79 -
b. Youth Access Project - -
c. Fuel Expenses 1,050,362.74 35,361
d. Others 3,004,378.60 540,332
Total 157,727,977.60 7,021,813

4.19 Provision for Possible Losses Amount in NPR
1. Increase in Loan Loss Provision 15,215,902.68 8,449,200
2. Increase in Provision for Investment 7,694,286.22 -
3. Provision for Non Banking Assets - -
4. Provision for Other Assets - -
Total 22,910,188.90 8,449,200
4.20 Non-Operating Income/Losses Amount in NPR
1. Profit/Loss on Sale of Investment - -
2. Profit/Loss on Sale of Assets -
3. Dividend - -
4. Others - -
Net Non-Operating Income/Losses - -
4.21 Provision for Possible Losses Written Back Amount in NPR
1. Loan Loss Provision Written Back - 166,637
2. Provision for Non Banking Assets Written Off -
3. Provision for Investment Written Back - -
4. Provision for Other Assets Written Back - -
Total - 166,637
4.22 Profit/Loss from Extra Ordinary Activities Amount in NPR
1. Recovery of Loan Written Off - -

2. Voluntary Retirement Expenses -
3. Bad Debt Written Off - -
4. Other Income/Expenses - -
Total - -
4.22(a) Details of Written Off Loan Amount in NPR
Amount Type of Collateral Basis of Valuation Designation of Loan Efforts made to

SN Nature of Loan Remarks
Written Off and Value of Collateral Approver recover Loan
1 - - - - - -
2 - - - - - -
3 - - - - - -
Total - - - - - -

4.23 Details of Credit Facilities to Directors, Chief Executive Officer, Promoters, Employees and Shareholders
Amount in NPR
Closing Balance of Last Year Settlement During The Year Closing Balance as on July 16, 2019
Addition During
Particulars
the Year
Principal Interest Principal Interest Principal Interest
A. Director
1.-------- - - - - - - -
2.-------- - - - - - - -
3.-------- - - - - - - -
b. Chief Executive Officer
1.-------- - - - - - - -
2.-------- - - - - - - -
3.-------- - - - - - - -
C. Promoter
1.-------- - - - - - - -
2.-------- - - - - - - -
3.-------- - - - - - - -
D. Employees
1.-------- - - - - - - -
2.-------- - - - - - - -
3.-------- - - - - - - -
E. Shareholders
1.-------- - - - - - - -
2.-------- - - - - - - -
3.-------- - - - - - - -
Total - - - - - - -

4.24 Index of Capital Fund Amount in NPR
SN Particulars This Year Previous Year
A. Primary Capital 1,104,362.52 64,262.32
1. Paid up Capital (Common Share) 1,004,500.00 70,000.00
2. Proposed Bonus Share - -
3. Share Premium - -
4. Irredemable Preference Share - -
5. General Reserve Fund 22,061.82 -
6. Accumulated Profit/Loss 80,457.06 (5,584.04)
7. Profit/Loss of Current Year in Balance Sheet - -
10. Calls in Advance - -
11. Free Reserve - -
Less: - -
Goodwill - -
Differed Tax Assets 2,656.36 -
Investment in Share and Bond in excess of required limit - -
Investment in Debenture of Company with Financial Interest - -
Fictitious Assets - 153.63
Investment in Fixed Assets without complying NRB's requirements - -
Loans and Advances proceed to individual and group prohibited by law - -
B. Supplementary Capital 23,130.41 8,282.56
1. Loan Loss Provision on Pass Loan 23,130.41 8,282.56
2. Additional Loan Loss Provision - -
3. Hybrid Capital Instruments - -
4, Subordinated Term Debt - -
5. Assets Revaluation Fund - -
6. Investment Adjustment Fund - -
C. Total Capital Fund (A+B) 1,127,492.93 72,544.89
D. Minimum Capital to be Maintained on the Basis of Risk Weighted Assets
Capital fund (8%) 378,919.68 68,580.32
Primary Capital (4%) 189,459.84 34,290.16
Capital fund (@excess by 15.8%) 748,573.25 3,964.57
Primary Capital (@excess by 19.32%) 914,902.68 29,972.16
E. Capital Adequacy Ratio
Tier I Capital 23.32% 7.50%
Tier II Capital 23.80% 8.46%

4.24(a) Index of Risk Weighted Assets

Amount in NPR
This Year Previous Year

On-Balance-Sheet Assets Weight
Risk Weighted Risk Weighted
Amount Amount
Assets Assets
Cash Balance 0% 487.65 - 1,352.89 -
Balance with Nepal Rastra Bank 0% - - - -
Investment in Nepalese Government Securities 0% - - - -
Investment in Nepal Rastra Bank Securities 0% - - - -
Claim Fully Secured by Fixed Deposit Receipt of own Bank 0% - - - -
Claim Fully Secured by Government Securities 0% - - - -
Accured Interest Income of Government Securities 0% - - - -
Claims on Fixed Deposit at Banks and Financial Institutions 20% 43,252.10 8,650.00 47,397.65 9,480.00
Money at Call 20% 219,824.89 43,965.00 - -
Interbank Lending 20% - - - -
Investment on Share, Debenture and Bonds 100% - - - -
Other Investment 100% 150,000.00 150,000.00 - -
Loans and Advances 100% 4,496,216.51 4,496,217.00 828,256.31 828,256.00
Fixed Assets 100% 30,530.28 30,530.00 18,681.28 18,681.00
Other Net Interest Income 100%
Other Assets 100% 7,134.07 7,134.00 836.61 837.00
A. Total 4,947,445.50 4,736,496.00 896,524.74 857,254.00
Off-Balance-Sheet items
Guarantee 100% - - - -
Irrevocable Loan Commitments 100% - - - -
Contingent Liability against Tax 100% - - - -
Accured Interest and Other Contingent Liabilities 100% - - - -
Unpaid Portion of Party paid shares and Securities 100% - - - -
Unpaid Guarantee Claim 200% - - - -
Claims against Institutions Not Accepted by Institutions 200% - - - -
B. Total - - - -
Total Risk Weighted Assets (A+B) 4,947,445.50 4,736,496.00 896,524.74 857,254.00

4.25 Major Indicator Amount in NPR
SN Particulars Unit FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
1 Net Profit Ratio % - - - (20.75) 16.84
2 Earning Per Share NPR - - - (7.98) 28.79
3 Market Price Per Share NPR - - - - 0.00
4 PE Ratio Ratio - - - - 0.00
5 Bonus Share to Capital % - - - - 0.00
6 Cash Dividend to Capital % - - - - 0.00
7 Interest Income/Loans and Advances % - - - 1.33 19.06
8 Employees Expenses/Total Operating Expenses % - - - 50.93 24.41
9 Interest Expenses on Total Deposit and Borrowing % - - - 1.18 10.94

10 Foreign Exchange Fluctuation Income/Total Income % - - - - 0.00
11 Employee Bonus/Total Employee Expenses % - - - - 33.81
12 Net Profit/Borrowing % - - - (0.67) 4.14
13 Net Profit/Total Assets Ratio - - - (0.63) 3.80
14 Total Assets/Deposits % - - - 1,207.15 786.39
15 Total Operating Expenses/Total Assets % - - - 1.61 7.19
16 Capital Adequacy on Total Risk Weighted Assets - - -
a. Primary Capital % - - - 7.50 23.32
b. Supplementary Capital % - - - 0.97 0.49
c. Total Capital Fund % - - - 8.46 23.80
17 Cash Reserve Ratio Ratio - - - 0.51 0.56
18 Non Performing Loan/Total Loan % - - - - 0.00
19 Weighted Average Interest Rate Spread % - - - 4.98 8.12
20 Book Networth NPR - - - 64,415,959.00 1,109,225,059.44
21 Total Share Number - - - 700,000.00 10,045,000
22 Total Number of Employees Number - - - 100.00 201.00
23 Other

4.29 COMPARISON OF UNAUDITED AND AUDITED FINANCIAL STATEMENT AS OF FY 2018/19

Amount in NPR
As per Variance
As per Audited
Unaudited
SN Particulars Financial Reasons for Variance
Financial
Statement Statement In Amount In %
1 Total Capital and Liabilities (1.1 to 1.7) 4,938,484.69 4,916,754.26 (21,730) -0.44%
1.1 Paid up Capital 1,004,500.00 1,004,500.00 - - -
Effect of change in LLP, service

1.2 Reserve and Surplus 103,237.91 104,725.06 1,487 1.44%
level agreement fee, tax calculation
1.3 Debenture and Bond - - - -

1.4 Borrowings 3,201,250.97 3,201,250.97 - 0.00%
1.5 Deposits (a+b) 571,752.52 571,752.52 - 0.00%
a. Members 571,752.52 571,752.52 - 0.00%
b. Public - - - -
1.6 Income Tax Liability - - - - -
1.7 Other Liabilities 57,743.29 34,525.71 (23,218) -40.21% LLP reclassified
2 Total Assets (2.1 to 2.7) 4,938,484.69 4,916,754.26 (21,730) -0.44%
2.1 Cash and Bank Balance 263,564.64 43,739.75 (219,825) -83.40% Classification change
2.2 Money at Call and Short Notice - 219,824.89 219,825 100% Classification change
2.3 Investments 142,305.71 142,305.71 - - -
Loan loss provision increased, net
2.4 Loans and Advances 4,496,216.51 4,472,718.04 (23,498) -0.52%
presentation of provision
2.5 Fixed Assets 30,530.28 30,530.28 - 0.00%
2.6 Non Banking Assets - - - - -
2.7 Other Assets 5,867.55 7,635.59 1,768 30.13% Interest Suspense
3 Profit and Loss Account - - -
3.1 Interest Income 561,170.14 561,170.14 - - -
3.2 Interest Expense 251,217.54 251,217.54 - - -
A. Net Interest Income (3.1 - 3.2) 309,952.60 309,952.60 - - -

3.3 Fees, Commission and Discount 93,784.57 93,784.57 - 0.00%
3.4 Other Operating Income - - - 0.00%
3.5 Foreign Exchange Gain/Loss (Net) - - - - -
B. Total Operating Income (A+3.3+3.4+3.5) 403,737.17 403,737.17 - 0.00%

Leave Encashment
3.6 Staff Expenses 50,933.78 50,922.48 (11) -0.02%
provision corrected
Service level agreement
3.7 Other Operating Expenses 157,527.98 157,727.98 200 0.13%
expenses booked
C. Operating Profit Before Provision (B -3.6 - 3.7) 195,275.41 195,086.71 (189) -0.10%
3.8 Provision for Possible Losses 22,542.15 22,910.19 368 1.63% Loan loss provision increased
D. Operating Profit (C -3.8) 172,733.26 172,176.52 (557) -0.32%

3.9 Non Operating Income/Expenses (Net) - - - - -
3.1 Write Back of Provision for Possible Loss - - - - -
E. Profit from Regular Activities (D+3.9+3.10) 172,733.26 172,176.52 (557) -0.32%

3.11 Extraordinary Income/Expenses (Net) - - - - -
F. Profit before Bonus and Taxes (E +3.11) 172,733.26 172,176.52 (557) -0.32%
3.12 Provision for Staff Bonus 17,273.33 17,217.65 (56) -0.32% Due to decrement in profit
Accumulated tax loss claimed,
3.13 Provision for Tax 46,637.98 44,649.77 (1,988) -4.26%
change in depreciation calculation
G. Net Profit/Loss (F - 3.12 - 3.13) 108,821.96 110,309.10 1,487 1.37%

Schedule 4.26 4. DEPRECIATION
a. Depreciation on fixed assets is deducted on the basis of
SIGNIFICANT Straight Line Method at following rates:
ACCOUNTING Particulars
Furniture
Rate of Depreciation
25%
POLICIES Office Equipments

Computer
Vehicles
25%
25%
20%
Leasehold Assets Lease Period
1. OVERVIEW
b. Leasehold assets are depreciated over lease period under
NIC ASIA Laghubitta Bittiya Sanstha Ltd. is national level “D”
straight line method.
class microfinance financial institution licensed by Nepal
Rastra Bank. This is a wholly owned subsidiary of NIC ASIA c. Intangible assets like computer software are accounted on
Bank Limited. Registered office of NIC ASIA Laghubitta Bittiya cost price and are depreciated over the period of 5 years.
Sanstha Ltd. is located at Bherimalika Municipality, Ward No.
4, Jajarkot, Bheri zone. It is involved in providing microcredit 5. PROVISION FOR INCOME TAX
through various groups to members of deprived sector or with Income tax includes both current year tax and deferred tax.
minimal income. The financial statements were authorized
for issue by the Board of Directors on 5-Sep-2018 and have a. Provision for Income Tax Provision for income tax has been
been recommended for approval by shareholders in the calculated on the basis of Income Tax, 2058 and rules.
Annual General Meeting. Management acknowledges the b. Deferred Tax Tax amount deferred on the basis of assets
responsibility of true and fair preparation and presentation of and liabilities is deferred tax. Deferred tax is recognized
financial statements of the company in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting
2. BASIS OF PREPARATION OF FINANCIAL
purposes and the amounts used for taxation purposes.
STATEMENT
Deferred tax is measured at the tax rates that are expected
a. Financial statements of NIC ASIA Laghubitta Bittiya Sanstha to be applied to temporary differences when they reverse,
Ltd. have been prepared on the basis of Generally Accepted using tax rates enacted or substantively enacted at the
Accounting Principles, Nepal Accounting Standards, Bank reporting date.
and Financial Institutions Act and directives issued by
Nepal Rastra Bank. Accounting Policies of this company 6. INVESTMENT
have been compiled with except in cases where specifically Valuation of Investment is done as per Investment related
disclosed. NRB Directive.
b. The financial statements have been prepared on a historical
cost basis and in case of deviations disclosed specifically.
7. ACCOUNTING FOR NON BANKING
c. Except specifically mentioned, financial transactions are ASSETS
accounted on accrual basis.
a. Non Banking assets are recognized at lower of outstanding
d. Financial statements are prepared in line with Nepal Rastra
loan amount to be recovered or fair market value of
Bank Directive No. 4 issued for “D” class licensed institution.
collateral property.
b. Differential amount after sale of property accepted as non
3. FIXED ASSETS
banking asset is transferred to profit and loss account of
a. Fixed assets are accounted on the basis of historical cost same fiscal year.
concept.
c. Provision for non banking asset is recognized as per
b. If fixed assets worth less than NPR 5,000 is purchased requirement of Nepal Rastra Bank.
during the fiscal year, such amount is accounted as
expense during the year.

8. INCOME/ EXPENSE RECOGNITION 12. ACCUMULATED LEAVE EXPENSES

a. Interest Income: Interest income from loans and advances Adequate provision for payment against accumulated leave
are recognized on cash basis as per the provisions of of permanent staffs till fiscal year end is maintained on same
Nepal Rastra Bank. This is not in harmonization with Nepal fiscal year.
Accounting Standard 07 on Revenue.
13. PROVISION FOR GRATUITY
b. Interest Income on Investment: Interest incomes from
investments are recognized on accrual basis. The institution has arranged to provide gratuity to employees
who have served the institution for five years or more at the
c. Commission Income: Commission incomes from services time of their retirement. Currently, there is no any employee
provided by Bank are recognized on cash basis. who has served the institution for 5 years or more. Hence,
d. Interest Expense: Interest on deposits and borrowings are provision for gratuity has not been set aside. This provision is
recognized on accrual basis. not in line with Labor Act, 2074.
9. RECOVERY OF LOAN PRINCIPAL AND 14. EMPLOYEE BONUS

INTEREST Provision for employee bonus is as per the requirement of
Principal and interest of loans and advances are recovered in Bonus Act, 2030.
following sequence: Penal charge, interest, principal
15. EMPLOYEE PROVIDENT FUND
10. LOAN LOSS PROVISION AND LOAN By adding 10% contribution over 10% provident fund
WRITE OFF POLICIES contribution of staff, total amount is deposited in the account
of staff maintained at office of employee provident. Such
a. Loans and advances are classified into performing and non amount contributed by institution is recognized as expense
performing loan as per the requirement of directive issued of same fiscal year. The retirement fund is independent from
by Nepal Rastra Bank. Loans and advances which are not microfinance institution.
overdue or overdue up to six months are classified under
performing loans and loans and advances that are overdue
16. STAFF LOAN
by more than six months are as substandard, doubtful and
loss loan under non performing loan as per requirement of Loans and advances are provided to staffs in line with provision
NRB directives and net loans and advances after deduction of Staff Bylaw.
of applicable loan loss provision is presented in balance 17. CONTINGENT LIABILITIES
sheet.
b. Loans and advances are written off on the basis of directive Possible emergencies and contingent liabilities are disclosed
issued by Nepal Rastra Bank and loan write off policy of by microfinance financial institution.
financial institution. 18. SHARE ISSUANCE EXPENSE
c. No loan are written off as per policy of the financial
The financial institution has not issued share till date.
institution
19. PRE-OPERATING EXPENSE
Pre-operating expense of NRS. 38,408.73 were written off last
year. Balance amount NRS. 153,634.92 are expenses incurred
11. STATIONERY AND PRINTING EXPENSES
in FY 2019/20 and are recorded accordingly. Hence, the balance
Stationery and printing items are recognized as expense on of pre-operating expense is nil.
the basis of consumption under FIFO method.

Schedule 4.27
NOTES TO
ACCOUNTS
1. AMOUNT TRANSFERRED TO GENERAL RESERVE

As financial institution is in loss this year, general reserve fund has not been created.cost concept.
2. DETAILS OF LOANS AND ADVANCES

Particulars Amount (NRs. '000)
Loan Disbursement 4,660,449
Loan Repayment 992,489
Loan outstanding 4,496,217
3. DETAILS OF DEPOSIT
Particulars (Members Only) Amount (NRs. '000)
Total Saving Collection 7,405,427
Total Saving Withdraw 6,902,287
Closing Balance 571,753
4. INTEREST RATE SPREAD

Particulars Rate (In %)
Loan Average Interest Rate 19.06
Borrowing & Loan Average Interest Rate 10.94
Net Interest Spread Rate 8.12
5. DETAILS OF EXPENSES WRITTEN OFF

Remaining Amount to be
Assets Opening Balance (Rs.) Write off Amount (Rs.)
written off (Rs.)
Preliminary Expenses 153,634.92 153,634.92 0.00
6. DETAILS OF CONCENTRATION OF RISK

Particulars Loan (NRs. '000) Saving (NRs. '000)
Total Loan outstanding up to 2076 Ashad end 4,496,217 571,753

Maximum Loan /Saving Size Per Member 1,279 1,038
Maximum Loan/Saving Ratio 0.02% 0.18%

7. DETAILS OF AGEING OF ASSETS AND LIABILITIES

Amount (NPR ‘000)
Times 1-90 Days 91-180 Days 181-270 Days 271-365 Days Over 1 Year Total Amount
Cash Balance 487.65 487.65
Balance with Banks & FIs 43115.30 43115.30
Investment in Foreign Banks
Call Money 7011.23 7011.23
Government Securities
Nepal Rastra Bank Bonds
Inter Bank & FI Lending
Loans & Advances 544826.64 538793.26 529900.08 701002.45 2181694.07 4496216.50
Interest Receivable
Reverse Repo
Receivables from other Institutions under

Commitment
Payment to be made for facilities under s.no
20,21 & 22
Others 90471.82 90471.82
Total Assets (A) 685912.65 538793.26 529900.08 701002.45 2181694.07 4637302.51
Current Deposits 3200994.57 3200994.57
Saving Deposits
Fixed Deposits
Debentures
Borrowings: 1500000.00 1353201.45 347793.12 3200994.57
(a) Call/Short Notice
(b) Inter-bank/Financial Institutions 1500000.00 1353201.45 347793.12 3200994.57
(c) Refinance
(d) Others
Other Liabilities and Provisions 122129.03 7694.29 33224.51 163047.83
(a) Sundry Creditors 6064.36 6064.36
(b) Bills Payable
(c) Interest Payable
(d) Provisions 7694.29 22627.29 30321.58
(e) Others 116064.68 10597.22 126661.89
Payable to other institutions under Commitment
Unutilized Approved Facilities
Letter of Credit/Guarantee (Net of Margin)
Repo
Payment to be made for facilities under S.No 11
Others
Total Liabilities (B) 4823123.60 7694.29 1353201.45 381017.63 6565036.97
Net Financial Assets (A-B) (4137210.96) 538793.26 522205.79 (652199.00) 1800676.44 (1927734.47)
Cumulative Net Financial Assets (4137210.96) (3598417.70) (3076211.90) (3728410.90) (1927734.47)

8. LOAN OBTAINED BY PLEDGING OWN PROPERTY
Financial Institution has not obtained any loan facility by pledging own property
9. DETAILS OF NON BANKING ASSETS

Financial Institution has not accepted any property as non banking asset.
10. DETAILS OF PAID UP CAPITAL

Details of Paid up capital as per Financial Statement of FY 2074/75 are as follows:

Paid up Share Capital as on 2075.04.01 70,000
Add: Issue of Right Share 934,500
Paid up Share Capital as on 2076.03.31 1,004,500
11. DETAILS OF LEASEHOLD PROPERTY

Following is the detail of leasehold property:
Amount (NRs. '000)
Addition in Current Depreciation
Assets Opening WDV Closing Amount in Current Year
Year Amount
Leasehold Assets 1,357 0.00 96 1,261
12. DETAILS OF INVESTMENT

Initial Investment 150,000
Portfolio Value as on Ashadh End 2076 142,306
Decrease in Portfolio value 7,694
13. DETAILS OF LOAN LOSS PROVISION TILL 16-JUL-2019

Provision in Current Year 15,216
Provision up to the end of Ashad 2076 23,498
14. DETAILS OF INTEREST SUSPENSE ACCOUNT TILL 16-JUL-2019

Amount of accrued interest receivable as on balance sheet date has been transferred to Interest Suspense account and presented in
schedule 4.12. NRB Directive and circulars allow Bank and financial institutions to account for interest received till 30 days of expiry of
fiscal year as interest income of that year. Such interest suspense amounts have not been included under interest income.

Current Year Interest Suspense 3,80,76
Current Year Interest Write back
Interest Suspense up to Ashad end 2076 3,80,76

15. DEFERRED TAX ASSETS AND LIABILITIES

Temporary differences as presented below were observed in deferred tax assets and liabilities as on 16-Jul-2019:
Amount (NRs.'000)
Particulars Book Carrying Amount Tax Base Difference
Temporary Difference for:
Gratuity Provision 727 - 727
Leave Provision 2,165 - 2,165
Provision for investment 7,694 - 7,694
Loan Loss Provision 23,498 23,498 -
Deferred Revenue Expenditure
Fixed Assets 30,530 28,799 (1,731)
Total 64,615 52,297 8,855
Tax Rate 30%
Net Deferred Tax Assets / (Liabilities) 2,656
Opening Deferred Tax Assets/ (Liabilities) (220)
Deferred Tax Income/ (Expenses) 2,877
16. DEBT SECURITY FUND AND SOCIAL SECURITY FUND

Although financial institution has not established any debt security fund, microcredit insurance of borrower members have been
done in collaboration with METLIFE so that family of borrower do not face financial burden in case of death of borrower before lapse
of loan tenor.
17. CUSTOMER PROTECTION FUND

As per the directive of Nepal Rastra Bank, the financial institution has established customer protection fund by transferring amount
equivalent to 1% of net profit of Year 2018-19 i.e NPR 1,103,091.
18. CORPORATE SOCIAL RESPONSIBILITY FUND

As per the directive of Nepal Rastra Bank, the financial institution has established corporate social responsibility fund by transferring
amount equivalent to 1% of net profit of Year 2018-19 i.e NPR 1,103,091.
19. STAFF CAPACITY DEVELOPMENT FUND

NPR 2,578,508.16 has been spent by financial institution for capacity development of staffs during FY 2018-19 which is 35.38% of
total personnel expenses.
20. PROVISION FOR STAFF LEAVE AND GRATUITY

For Provision for Staff Leave and Gratuity amount NPR 2,164,735.29 and NPR 726,900.00 respectively have been apportioned and
shown in schedule 4.6.

21. RELATED PARTY TRANSACTIONS
NIC ASIA Laghubitta Bittiya Sanstha is subsidiary company of NIC ASIA Bank Ltd. with 100% ownership. Details of financial transactions
between these companies are as follows:
A. Financial Transactions
S.N. Particulars With Amount NRs. '000
1. Borrowing from NIC ASIA Bank Ltd. Parent Company 1,50,00,00
2. Interest paid to NIC ASIA Bank Ltd. Parent Company 10,93,22
3. Bank Balance on NIC ASIA Bank Ltd. Parent Company 1,77,63
4. Service Charge on Borrowings Parent Company 11,85,63
5. Service Level Agreement Charge Parent Company 200
6. Reimbursement of Deputation Cost Parent Company 3,354
7. Portfolio Management Service (NIC ASIA Capital) Subsidiary Company of NIC ASIA Bank Ltd. 242
8. Portfolio Investment Amount (NIC ASIA Capital) Subsidiary Company of NIC ASIA Bank Ltd. 142,306
NIC ASIA Bank Limited has appointed Mr. Laxmi Prasad Sharma as
B.
the Chief Executive Officer of its 100% subsidiary.
22. PROPOSED BONUS SHARE AND DIVIDEND

As financial institution has not issued its share to public, bonus share and/or dividend has not been proposed.
23. PAYMENT TO CEO AND MANAGEMENT

Details of payment made to CEO and management staffs are given below:
S.N Position Amount (NPR)
1 Chief Executive Officer 3,354,351.75
2 Management 3,534,672.00

NIC ASIA
CAPITAL
8.1 Director’s Report........................................................................356
8.2 Independent Auditor's Report............................................363
8.3 Financial Statement.................................................................365


SECOND ANNUAL GENERAL MEETING developed nations could be managed.
DIRECTORS REPORT
b. China and India’s economic growth
I would like to welcome representative all the representative
Neighbors’ economic growth was slow in the year 2018.
of the promoter company NIC ASIA Bank Ltd in this third Annual
China’s economic growth was affected due to trade war with
General Meeting of NIC ASIA Capital Limited.
United State and economic blockade while India achieved
ordinary improvement. In 2019, growth rate for China and
NIC ASIA Capital Limited is wholly owned subsidiary of NIC ASIA
India is projected at 6.2% and 7% for 2018, it was 6.6% and
Bank Ltd and with your support, help and wishes which are our
6.8% respectively. China and India, the powerful nations have
biggest strength, we have successfully completed third year
significant effect in the Nepal’s economic growth.
of operation. We have managed to stand out amount the new
merchant bankers and expand our area of operation within the
c. Domestic economic growth
three years and with your support, help and wishes we hope
to continually perform better in coming days too. Central Bureau of Statistics has estimated Gross Domestic
Product (GDP) to grow by 7.1 percent in 2018/19. Increase in
I am delighted to present you the company’s progress, agricultural production, ease in energy supply, acceleration
strategic on expansion of business and future strategic plan. in construction activities, expansion in industrial production,
The company had satisfactory expansion and made decent and an uptick in tourist arrival have contributed to the higher
profit during the review period. economic growth. Ratios of Gross Domestic Savings and
Gross National Savings to GDP are estimated at 20.5 percent
I, along with all the board members will continue to value and 52.4 percent respectively in 2018/19. In the previous year,
your inputs in company’s strategies. We are confident that such ratios were 17.8 percent and 47.1 percent. The average
the current management is fully capable and motivated to consumer price inflation in the eleven month of 2018/19 is 4.5
implement our short term as well as long term strategic plans. percent. Such inflation was 4.2 percent a year ago. According
We will continuously assist the company to achieve its goals. to the preliminary statement of receipts and expenditure
released by the Office of the Financial Comptroller General,
In this noteworthy meeting, I would like to share major
recurrent expenditure of the government stood at Rs.714.98
achievements and future plans of this capital:
billion, capital expenditure stood at Rs. 238.36 billion, financing
1. Overall Economic Growth stood at Rs.141.24 billion and revenue mobilization stood at
Rs.859.60 billion in 2018/19.
a. World Economy
IMF has projected the world’s economic growth rate to be
2. Capital Market
3.2% in year 2019, while it was 3.6% last year. Developed and a. Primary Market
developing nations have growth rate of 1.9% and 3.6% while it
Securities Board of Nepal (SEBON) approved Initial Public
was 2.2% and 4.5% in 2018 respectively. Trade wars between
Offering (IPO) of 28 companies worth NPR 7.35 billion during the
developed nations have largely impacted the world economy.
year 2018-19 and all of them were fully subscribed. Comparing
Inflation of developed and developing nations remained at
to year 2017-18, this is decline by 12.95% when 21 companies
1.6% and 4.8% during 2019 respectively. For 2018, the inflation
offered IPO worth NPR 8.3 billion. During the review period,
rate was 2% and 4.8% of developed and developing nations
NPR 5.88 billion worth right share were approved by SEBON.
respectively. World economy can be in better place if the
trade tension and geo-political instability and harmony among

2015-16 2016-17 2017-18 2018-19
Particulars
No. Amount No. Amount No. Amount No. Amount
Initial Public Offering 14 2.76 19 1.40 21 8.30 28 7.35
Right Share Issue 37 9.40 69 41.20 55 25.70 19 5.88
Further Public Offering 3 5.83 3 7.78 6 11.51 - -
Mutual Fund 1 1.00 4 4.25 4 4.80 6 6.55
Debenture and Bond - - - - 1 3.00 11 9.02
Total 55 18.99 92 54.63 87 50.31 64 28.80
b. Secondary Market implementation of much anticipated online trading system,

NEPSE index was adversely impacted. Occasional technical
The NEPSE Index declined in the first three quarter of FY 2018-
issues in NEPSE and CDS & Clearing Ltd. system had negative
19, while it made ordinary improvement in the last quarter.
effect on the market.
NEPSE Index increased by 46.65 at end of the financial year
and reached 1,259.01 from 1,212.36. During the review period, Nepal Rastra Bank on the other hand, set interest rate
NEPSE index reached minimum to 1,100.58 while the maximum as a result there were not much change in interest rate on
it achieved was 1,321. Similarly, there was increment in number borrowings hence the investors were not interested in
of listed companies in the NEPSE hence increased the sales secondary market.
pressure in the market. Even the right shares issued by the
company were not fully subscribed and the unexpected The market is supposed to be positively impacted if the banks
increase in the auction sale of unsubscribed right shares has can act as broker such the share trading will be accessible by
increased the sales pressure of shares in NEPSE, which has people all over the country.
negatively affected the NEPSE index. Due to lack of effective
Particulars 2015-16 2016-17 2017-18 2018-19

Number of listed companies 230 208 196 213
Paid up capital of listed companies (in billions) 204.02 289.59 342.09 418.87
Total trading days 233 230 233 246
Market capitalization (in billions) 1,890.93 1,856.82 1,435.14 1,567.50
NEPSE Index 1718.15 1582.67 1212.36 1259.01
NEPSE Float Index 125.41 116.14 87.15 92.43
NEPSE Sensitive Index 369.07 336.04 255.2 271.25
NEPSE Index 1890
1583
1212 1259
1057
989
513 514
366 377 368
323
186
06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19

c. Nepal’s Share Market Condition For their corporation and support, I would like to express the
gratitude to SEBON, Government of Nepal, Office of Company
Share market in the first three quarter of FY 2018-19, had
Register, Nepal Stock Exchange Ltd., and CDS and Clearing
mixed reaction while there was satisfactory improvement in
Ltd. on behalf of the board and show appreciation for their
the last quarter. NEPSE Index increased to 1259.01 as on end of
regulatory policies and laws to guide and place merchant
FY 2018-19 which was 1212 in the beginning of the fiscal year.
banking to higher quality. I am indebted to our share brokers,
Political stability was supposed to bring positive reaction in
customers, journalists, and all the employees of NIC ASIA
the secondary market but the government could not win the
Capital Ltd. and NIC ASIA Bank Ltd for your undying support
investors’ faith. While the government implemented different
and precious contribution which we will be counting on coming
plans for economic development but its effect were zero in
days too.
the share market. With the increase in online trading investors,
payment through digital channel, process of providing We are well aware to keep our employees motivated, charmed
broker’s license to Banks, separate index for Mutual Fund and and to provide them with better corporate culture and platform
Microfinance, these factors are supposed to positively impact which in return helps in the company growth. We have been in
the share market in coming days. With the expected increase this better position only because of our employees’ constant
in capital expenditure and foreign direct investment, there is effort, I am overwhelmed and thankful for that.
assumption that liquidity crisis and interest rate to be low. We have understood the competitive market situation of
In addition, the government is planning to attract non- merchant banking and focused on expansion of share market
residential Nepalese in share market, provide broker’s license and brand building along with quality of service to provide
to banks and policies to improve share market and entry of maximum return to our shareholders and employees. We
new mutual funds in the market; these factors are supposed are committed and prepared to face any challenges and
to have positive impact in share market. uncertainties and we shall continually move towards our goals.
Thank You!
3. Factors affecting Merchant Banking Industry and the
company
On behalf of the board,
There are 213 companies listed in the Nepal Stock Exchange Bishal Sigdel,
Limited (as on preparation of report), for the last year there were Chairman
196 companies only. During the review period, the companies
listed are mostly microfinance and hydropower companies.
With the government plan to encourage companies having
share capital NPR 500 million or more to go public, commercial DISCLOSURE OF INFORMATION UNDER
banks issuing debentures, there is a huge possibilities for SECTION 109(4) OF COMPANIES ACT, 2006
the company business expansion. As the date is nearing for
1. Business Review
insurance companies to go public and microfinance companies
issuing right share it is expected to help the company in its The company was registered on 15th May, 2016 with the office
growth. of company registrar, Nepal Government as per the provisions
As the shares are seen to be traded at less than their of company act. The capital has obtained the license to carry
indicated value in secondary market, hydropower companies out merchant banking activities on 19th February, 2017 as per
and manufacturing industries are less willing to be listed. As the Securities Businessperson (Merchant Banker) Regulations,
a result, the business of capital is solely dependent in the 2008 and fully commenced its merchant banking activities
growth of secondary market. from 5th March, 2017.
4. NIC ASIA Capital’s use of technology There were 19 merchant bankers when the NIC ASIA Capital
With the right use of technology, the company can be a step Ltd. was established; there are 31 merchant bankers as on
ahead in this competitive market. We have made an observation review period. NIC Capital within four month of its operation
of use of technology for the growth of the company to provide distributed 2% cash dividend in FY 2016-17. As per the
ease service to our valued client. We have installed SYSTM X direction of SEBON to maintain NPR 200 million share capital
Software which is a combination of manual and automated for merchant banker, right share were issued to reach the
technologies to make the best assumption of scrip, indicator, threshold and during FY 2017-18, 7% cash dividend was issued
share price and market movement. Along with that we have on the increased share capital.
upgraded our website and lunched the mobile app.

Position of NIC ASIA Capital Ltd.
As on the end of review period, there were 31 merchant banker, we the satisfactory progress we achieved following overall positions;
S.N Particulars Overall Position

1 Depository Participant 2nd
2 Share Register Service 9th
3 Portfolio Management Service 3rd
Issue Management and Underwriting Services Provided process of public issue while one company’s necessary process
has been completed for issuance in FY 2019-20. Along with
During the review period, NIC ASIA Capital provided service to a
that SEBON has permitted for issue of second plan NIC ASIA
company for issue of right share and two companies for auction
Balance Fund under NIC ASIA Mutual Fund.
sale of unsubscribed right share. There are two companies in
Details of activities related to issue management and underwriting services provided till the end of FY 2018-19
S.N Name of the Company Remarks
1 Aarambha Microfinance Bittiya Sanstha Limited Public Issue
2 Prudential Insurance Co. Limited Right Share Issue
3 NIC ASIA Bank Limited Auction Sale of Unsubscribed Right Share
4 Prudential Insurance Co. Limited Auction Sale of Unsubscribed Right Share
5 NIC ASIA Growth Fund Mutual Fund
6 Surya Life Insurance Co. Limited Right Share Issue
7 Swadeshi Lagubitta Bittiya Sanstha Limited Right Share Issue
8 Swadeshi Lagubitta Bittiya Sanstha Limited Auction Sale of Unsubscribed Right Share
Details of Companies in the process of share issue

S.N Name of the Company Remarks
1 Max Vision Limited Public Issue
2 River Falac Power Limited Public Issue
3 Emerging Nepal Limited Public Issue

4 NIC ASIA Balance Fund Public Issue
5 Surya Life Insurance Co. Limited Public Issue
6 Aarambha Microfinance Bittiya Sanstha Limited Right Share Issue
Details of activities related to the registrar of shares Portfolio Management Service

carried out till the end of FY 2018-19
There was not enough increase in no. of customer for portfolio
The capital has been providing registrar to share services to management services due to declining trend of NEPSE Index
six companies including a mutual fund, which is an exciting and high interest rate of banks. Similarly, expected progress
number as compared to contemporary merchant bankers. could not be achieved in the portfolio management service
as the maximum customers look for the guaranteed return
S.N Name of the Company on investment for obtaining portfolio management service.
1 NIC ASIA Bank Limited We have been able to provide portfolio management services
2 Swadeshi Lagubitta Bittiya Sanstha Limited to 152 customers amounting to NPR 377.4 million during the
3 Sahayogi Bikas Bank Limited FY 2018-19 which is quite impressive regarding the market
4 Arambha Microfinance Bittiya Sanstha Limited condition.
5 NIC ASIA Growth Fund
6 Surya Life Insurance Co. Limited

Depositary Participant Service Management and Development of Human Resources:

Real Capital of the Company
As on FY 2018-19, the NIC ASIA Capital was successful in
opening 168,045 DEMAT accounts which weighs to 10.85% of By accepting the fact that quality of service to be received
total DEMAT accounts opened by 71 depository participants. by the customers from the capital depends on the skill,
Similarly, the capital has been able to secured second position qualification and capacity of the staff and by accepting the
in terms of total DEMAT accounts out of total 71 depository reality that human resources is the real capital of the company,
participants/merchant bankers. Hence, the company was we have adopted the policy to participate the staffs in the high
able to enormously increase annual renewal fees of DEMAT level training for the skill and capacity development.
accounts during the review year.
Our Belief and Desire:
NIC ASIA Mutual Fund
Ever since the inception of business, we are committed and
NIC ASIA Capital is operating first plan of NIC ASIA growth fund will remain committed in the future towards achieving high
worth NPR 835.2 million, which is under NIC ASIA Mutual Fund. business growth by fully complying with rules and guidelines
The company was able to maintain grow Net Asset Value directed by the regulatory body through continuous effort and
(NAV) of growth fund at 11.18 despite of decreasing trend of hard work of the employees with focused on the customer
secondary market. Along with that SEBON has permitted for service, their requirement and satisfaction. We believe
issue of second plan NIC ASIA Balance Fund under NIC ASIA expansion of service of the capital depends on the requirement
Mutual Fund worth NPR 1.25 billion and maturity period of 10 and desire of the customers. To implicate the same this believe
years. in practice, we have formulated service holder oriented plan
and revised the internal procedure and policy structure as per
Financial Achievement of the capital during the FY current environment to make it more customer friendly.
2018-19
We have always believed that the basis of very existence
Financial Achievements:
of the capital depends on the customer satisfaction and
With increasing number of merchant bankers, the market their trust towards the capital. We are committed to always
has become more competitive. But the NIC ASIA Capital is provide excellent services to the customers simply and easily.
continuously performing well despite the market odds. Simple, easy, quick and qualitative services are our means and
customer satisfaction is our end. To give the living form to
During the review period, NIC ASIA Capital earned NPR 69.4 it, we have been providing services to the customer through
million revenue, NPR 62.2 million operating profit and net evening counter, which is the first service in the merchant
profit of NPR 21.4 million. banking industry. We aim to make the excellence in service
main mantra of the capital with focus on the fact that merchant
The earning per share during the review period was NPR
banking is the service oriented business.
10.69 per share. Further, we believe that the business growth
achieved by the capital and the business diversity strategy 2. Any impact caused to the business of the Company
adopted by the capital have helped to build strong foundation due to national and international condition
for the long term growth and expansion of business.
For the last three years, the growth rate of Nepal is above 6%
Corporate Governance, Risk Management and and the year 2018-19 was satisfactory in terms of economic
compliance: Basis for long term growth growth. As per the preliminary estimates of the Central Bureau
of Statistics, Gross Domestic Product (GDP) is estimated
We are always committed towards maintaining standard
to grow by 7.1 percent in 2018/19. Increase in agricultural
corporate governance. For that we have already formulated
production, ease in energy supply, acceleration in construction
some of the internal policies and rules and we have already
activities, expansion in industrial production, and an uptick
formulated and implemented corporate governance policy
in tourist arrival have contributed to the higher economic
and other necessary policies. By adopting zero tolerance
growth. Despite the reforms brought by stable government,
for corporate governance, we have also considered the
capital expenditure was not fully utilized which resulted
management of means and resources required for the
in liquidity crunch. With the expansion of banks in remote
effective management of corporate governance. To maintain
areas, banking facilities are easily accessible. With the ease
corporate governance, we have always followed honesty,
of banking facilities, local people are applying for primary local
transparency, responsibility and accountability. We believe
issue of share.
that strong foundation for the long term growth of the capital
was created from the effective corporate governance.

Trade deficit widened by 17.2 percent to Rs.1211.96 billion in the There are no changes in Board of Directors during the review
eleven months of 2018/19. Similarly, current account registered period.
a deficit of Rs. 248.72 billion in the review period. High current
account deficit is due to the expansion of imports. Remittance 5. Any remarks and observation stated in the
inflows increased by 17.5 percent to Rs.799.02 billion in the Independent Auditors’ Report and Board of Directors’
eleven months of 2018/19. However, Balance of Payments response thereon
(BOP) remained at deficit of Rs.90.83 billion.
No observation apart from the normal observations related to
Nepal Rastra Bank and Insurance Board has set threshold the regular transaction was mentioned in the Auditor’s Report.
limit for paid up share capital, hence the banks and insurance
companies are opting for merger rather than right share 6. Amount recommended for distribution of dividend
issuance. NEPSE Index did not perform well during the review The board of director recommended the cash dividend of 11%
period so the new investors chose to wait and see. Decreasing (including dividend distribution tax) from the profit of the FY
transactions in secondary market adversely affected the 2018-19.
merchant bankers.
7. Details of shares forfeited
3. Goals for the current fiscal year
No shares were forfeited during the review year.
For the current fiscal year, the capital has set mainly following
goals 8. Review of the progress made by the Company and its
subsidiary(s) in the current fiscal year 2018/19 and the
To become the leading bank by expediting the DEMAT position of the same at the end of fiscal year
account opening
The company doesn’t have any subsidiary company.
To increase the number of company receiving the registrar
to share service 9. Main activities carried out by the Company and
its subsidiary(s) during the financial year and any
Providing the quality services by making the activities
related to public issue more effective
significant changes in the business activities of the
Company and its subsidiary during the same period
By searching more customers for portfolio management,
This company is providing the services like Issue Management
rapidly increase the customer and amount for portfolio
and Underwriting, Registrar to Share, Depositary Participant
management service on daily basis
and Portfolio Management, Mutual Fund and Corporate
Start the process after necessary study for the mutual Advisory as a merchant banker. This company doesn’t have any
fund (Open Ended) subsidiary company and the business activities are carried out
by as per the objective mentioned in the MOA and AOA of the
To formulate and implement new customer oriented
company. There is no change in the nature of main business
business plan and emphasis on the maximum utilization of
activities of the company during the review year.
resources
To obtain the goals included in the long term strategy 10. Any information given to the Company by its
principal shareholder in last fiscal year
To keep presenting the company brand in the market in
No such information
effective way
To manage the market of the capital with focus on the 11. Details of shareholding taken by the directors
digital technology and officers of the company in the previous financial
year and, in the event of their involvement in share
We are confident that we would be the first merchant banker transaction of the company, details of information
in the choice of the customer by playing leading role in this received by the company from them in that respect.
industry along with the achievement of above mentioned
No such information
goals.
12. Information provided on personal interest of Board
4. Changes in the Board of Directors and the reason of Directors and their relatives (nearest kin) regarding
thereof contract or agreement done with the Company in last

fiscal year 18. Remuneration, allowances and benefits paid to the

director, MD, CEO and officials.
There is no record of such contract or agreement.
During the review period, an amount of NPR 260,000 was paid
13. Buyback of share by the Company, reason thereof to the members of board as allowance and benefit.
for buyback, number of shares bought back, face value
of share and amount paid during the buyback Details of the remuneration, allowance and benefits paid to
the Chief Executive Officer, Company Secretary and Higher
No shares were bought back during the review year
Level Management Employees of the company during the
14. Information on existence of Internal control system review period:
and if there is, its detail
Head- Company
Chief
The committee has formed procurement committee, human Operation/Head Secretary/
Particulars Executive
Investment Head-Merchant
resource development committee, internal audit committee Officer
Officer Banking
and risk management committee in order to maintain internal No. of staff 1 1 1
control system. These committees hold meetings on regular
Remuneration, allowance
intervals and they give recommendations and suggestions 870,312 1,389,855 957,850
and benefits
to the board of directors and the management. The company (4 months) (12 months) (12 months)
has formed and implemented various policies, guidelines and
procedures to make the internal control system more effective 19. Uncollected dividend by the shareholders
15. Details of total management expenses incurred No dividends were distributed till date.
during the previous financial year
20. Information on asset bought or sold as per section
Head of Expense Expense Amount 141
Staff Expenses 20,784,183
No such information.
Operating Expenses 17,951,930
Total Expenses 38,736,113 21. Details of related party transaction as per Section
175 (transactions between associated companies)
16. Name list of members in the audit committee,
remuneration, allowance and benefits they have The company has received interest income of NPR
received, the details of activities of the committee and 2,425,641.07 from the NIC ASIA Bank Ltd. during the FY
the details of any recommendation by them 2018-19.
Members of audit committee are as follows: The company has been providing service of registrar to
share to the NIC ASIA Bank Ltd, an annual service fee of
S.N Name Remarks which is NPR 825,000.
1 Mr. Rabin Sapkota Independent Director-NIC ASIA Capital Ltd
2 Mr. Raju Adhikari Head-Internal Audit, NIC ASIA Bank Ltd As per the agreement between the company and the bank,
3 Ms. Anshu Shrestha Skim Manager, NIC ASIA Capital Ltd
an amount of NPR 476,184 was paid as staff expenses for
the operational and technical assistance.
Total of 4 meetings of audit committee was held during the
review period and NPR 20,000 allowance and benefits were
paid to them.
17. Dues payable to the company by any director, MD,

CEO, principal shareholders (holding share more than
1%) or their relatives or firms or institutions in which
they have their involvement (interest)
No such information



As at 31 Asar 2076 (16 July 2019)
Amount in NPR
As at As at
Note
16 July 2019 16 July 2018
ASSETS
Non Current Assets
Property, Plant and Equipment 3 3,491,759 3,674,745
Intangible Assets 4 5,516,194 5,498,748
Financial Assets measured at Amortized Cost 6.e. 70,000,000 60,000,000
Loans & Advances 6.f. 451,196 489,153
Deferred Tax Asset 15 576,021 234,898
Total Non Current Assets 80,035,170 69,897,544
Current Assets
Cash and Cash Equivalents 7 24,905,665 72,124,881
Trade Receivables 8 15,179,540 7,396,791
Prepaid Expenses & Advances 9 1,961,409 490,189
Loans & Advances 6.g. 25,148 36,918
Financial Assets measured at Amortized Cost 6.h. 97,600,000 112,000,000
Financial Assets held at fair value through Profit or Loss (Shares) 6.i. 26,047,705 60,875
Total Current Assets 165,719,468 192,109,654
Total Assets 245,754,638 262,007,199
EQUITY AND LIABILITIES
Non Current Liabilities
Employee Benefits 10 1,814,884 1,035,143
Trade & Other Payables 11.a. 565,258 463,624
Deferred Tax Liability - -
Total Non Current Liabilities 2,380,142 1,498,767
Current Liabilities
Trade & Other Payables 11.b. 20,801,485 44,587,282
Total Current Liabilities 20,801,485 44,587,282
Equity
Share Capital 16 200,000,000 200,000,000
Retained Earnings 22,573,011 15,921,150
Total Equity 222,573,011 215,921,150
Total Equity & Liabilities 245,754,638 262,007,199
Schedules and Explanatory Notes forms an integral part of Statement of Financial Position
Ganesh Prasad Pandey Manish Ghimire Ramendra Rayamajhi Dinesh Bhari

Head - Accounts Chief Operating Officer Chief Executive Officer Director As per our report of even date

Arun Raut, FCA
Suman Dangol Rabin Sapkota Bimal Lamsal Bishal Sigdel Partner
Director Director Director Chairman S.R. Pandey & Co.
Place: Kathmandu

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the Period from 1st Shrawan to 31st Asadh 2076 (17th July 2018 to 16th July 2019)
Amount in NPR
As at As at
Note
16 July 2019 16 July 2018
Income from Merchant Banking 13.a. 25,541,326 28,118,250
Income from Mutual Fund 13.b. 17,696,927 5,820,731
Interest Income from Loans & Receivables 13.c. 25,062,120 23,181,659
Gains on disposal of equity securities 13.d. 1,279,102 37,765
Net Unrealised Gains/(Loss) on financial Assets held at Fair value 13.d. (359,529) 45,288
Dividend Income 100,887 -
Other Income 13.d. 79,650 13,875
Total Operating Income 69,400,482 57,217,567
Operating Expense
Merchant Banking Expenses 14.a. 6,181,803 10,293,364
Mutual Fund Expenses 14.b. 1,009,846 416,037
Commission on Sale of Securities - -
Operating Profit 62,208,833 46,508,166
Non - Operating Expense
Staff Cost (including staff bonus) 14.c. 20,784,183 15,175,215
Premises Costs 14.d. 4,114,302 3,895,783
Advertisement and Promotion Expenses 14.E. 759,609 1,395,043
General Administrative Expenses 14.f 3,343,603 2,824,331
Finance Cost 64,726 37,243
Depreciation and amortisation 3 2,478,040 2,171,402
Profit Before Tax 30,664,372 21,009,150
Provision for Tax 15 9,275,668 5,296,934
Profit for the Year 21,388,704 15,712,215
Other Comprehensive Income / (Expenses)
Net Gains on Available-for-Sale Investments - -
Actuarial Gains / (Losses) on Defined Benefits Plan - -
Total Other Comprehensive Income / (Expenses)
less: Tax Expense relating to Components of OCI - -
Total Comprehensive Income for the Year - -
Attributable to
Equity Share Holders 21,388,704 15,712,215


Arun Raut, FCA
Place: Kathmandu

STATEMENT OF CASH FLOW
For the Period from 1st Shrawan 2075 to 31st Asadh 2076 (17th July 2018 to 16th July 2019)
Amount in NPR
As at As at
16 July 2019 16 July 2018
A. Cash Flow from Operating Activities

Net Profit before Tax 30,664,372 21,009,150
Adjustments for:
Depreciation expenses 2,478,040 2,171,402
Unrealized (gain)/loss in Investment - (45,288)
Opening reserve adjustment for unrealised gain on shares - -
Income Tax Paid (9,275,668) (5,296,934)
Dividend Paid (14,736,842) (2,105,263)
Dividend Received (100,887) -
Increase/(Decrease) in Liabilities (22,904,422) 38,675,414
(Increase)/Decrease in Investments (25,986,830) (9,967,434)
(Increase)/Decrease in Fixed Deposits 4,400,000 (92,000,000)
(Increase)/Decrease in Other Assets (9,545,366) (5,358,962)
Net Cash Flow from Operating Activities (1) (45,007,604) (52,917,916)
B. Cash Flow from Financing Activities
Increase/(Decrease) in Share Capital - 100,000,000
Increase/(Decrease) in Long Term Loan - -
Dividend Received 100,887 -

Net Cash Flow from Financing Activities (2) 100,887 100,000,000
C. Cash Flow from Investing Activities
Sale/(Purchase) of Tangible Fixed Assets (2,312,500) (2,479,296)
Sale/(Purchase) of Intangible Assets - (282,670)
Net Cash Flow from Investing Activities (1) (2,312,500) (2,761,966)
Net Increase/(Decrease) in Cash and Cash Equivalents (1+2+3) (47,219,217) 44,320,118
Cash and Cash Equivalents at beginning of the year/period 72,124,881 27,804,767
Cash and Cash Equivalents at end of the year/period 24,905,664 72,124,881


Arun Raut, FCA
Place: Kathmandu


For the Period from 1st Shrawan 2075 to 31st Asadh 2076 (17th July 2018 to 16th July 2019)
Amount in NPR
Share Capital Retained Earnings Total
Balance at the End of FY 2016/17 100,000,000 2,314,198 102,314,198
Issue of Share Capital 100,000,000 - 100,000,000
Profit / (Loss) for the Year - 15,712,215 15,712,215
Other Comprehensive Income/ (Expense) net of tax - - -
Transferred to General Reserve - - -
Dividend Paid during the Year - (2,105,263) (2,105,263)
Issue of Share Capital - - -
Profit / (Loss) for the Year - 21,388,704 21,388,704
Other Comprehensive Income/ (Expense) net of tax - - -
Transferred to General Reserve - - -
Opening Adjustment for unrealised gain on shares - - -
Dividend Paid during the Year - (14,736,842) (14,736,842)


Arun Raut, FCA
Place: Kathmandu

NOTES TO THE
FINANCIAL STATEMENTS
as of Ashad End 2076 (16th July 2019)
1. OVERVIEW OF THE COMPANY General Meeting.
NIC ASIA Capital Limited is a wholly owned subsidiary of NIC

2. SUMMARY OF SIGNIFICANT
ASIA Bank Limited which is one of the leading commercial bank
ACCOUNTING POLICIES
of Nepal. NIC ASIA Capital Limited company registration number
at Companies Registrar is 149312/72/073 with registered office The Principle accounting policies are adopted in preparation
at Trade Tower Nepal, Thapathali and correspondence address of financial statements, which have been consistently applied
at Siddhartha Insurance Complex, Babar Mahal, Kathmandu unless otherwise stated.
and it has been registered in Inland Revenue Office with its
PAN No.604259648. 2.1 Statement of Compliance:
The Financial Statements are presented in Nepalese Rupees,
NIC ASIA Capital Limited is formed with an objective of
rounded to the nearest Rupee. The Financial Statements have
providing merchant banking and investment banking services
been prepared in accordance with Nepal Financial Reporting
like Issue Management & Underwriting, Registrar to Shares
Standards (NFRS) which was applicable from FY 2073/74.
(RTS), Depositary Participant (DP), Portfolio Management
Further the financial statements are in compliance with
Services and Mutual Funds.
Securities Act, 2063 and its regulation and in conformity with
The company has received Merchant Banker License from the Companies Act 2063 with Amendments and other relevant
SEBON dated Falgun 08, 2073. Under the license, the laws.
company is permitted to for providing Issue Management
and Underwriting Services, Registrar to Shares and Portfolio 2.2 Basis of Preparation
Management Services. The company has received Fund The company while complying with the reporting standards,
Manager and Depository License from SEBON dated Ashad 18, makes critical accounting judgement as having potentially
2074. material impact on the financial statements. The significant
accounting policies that relate to the financial statements as a
NIC ASIA Bank Limited, the parent company of NIC ASIA Capital
whole along with the judgements made are described herein.
Limited has received DP registration certificate from SEBON
to operate as Depository Participants dated Ashwin 14, 2071 Where an accounting policy is generally applicable to a specific
and membership license from the CDS and Clearing Ltd, dated item, the policy is described within that relevant note. NFRS
Chaitra 03, 2071 as per the CDS Byelaws, 2058. The authority requires the company to exercise judgement in making
to provide DP services from Chaitra 09, 2073 through NIC ASIA accounting estimates. Description of such estimates has
Capital Limited has been received from CDS and Clearing Ltd been given in the relevant sections wherever they have been
on Chaitra 10, 2073.The company has not been registered in applied.
VAT as it provides financial service which is exempt under
Schedule 1 of VAT Act, 2052. 2.3 Reporting Pronouncements
The Board of Directors of the company acknowledges the The company has, for the preparation of financial statements,
responsibility of preparation of financial statements of the adopted the NFRS pronounced by ASB as effective on
company. The financial statements were authorized for issue September 13, 2013. NFRS conform, in all material respect, to
by the Board of Directors on 08 Bhadra 2076 and have been International Financial Reporting Standards (IFRS) as issued by
recommended for approval by shareholders in the Annual the International Accounting Standards Board (IASB)

2.4 Accounting Conventions operating environment. Further the company is required

to make judgement in respect of items where the choice of
The financial statements have been prepared on a historical
specific policy, accounting estimate or assumption to be
cost basis, as modified by the revaluation of financial assets
followed could materially affect the financial statements. This
and liabilities at fair value through profit or loss.
may later be determined that a different choice could have
The financial statements have been prepared on a going been more appropriate.
concern basis where the accounting policies and judgements
Accounting policies have been included in the relevant notes
as required by the standards are consistently used and in case
for each item of the financial statements. The effect and
of deviations disclosed specifically.
nature of the changes, if any, have been disclosed.
2.5 New reporting standards in issue but not yet NFRS requires the company to make estimates and
effective assumptions that will affect the assets, liabilities, disclosure of
NFRS 9 – Financial Instruments has been issued but is not contingent assets and liabilities, and profit or loss as reported
effective until further notified. For the reporting of financial in the financial statements.
instruments, NAS 32 Financial Instruments, Presentation, NAS
The company applies estimates in preparing and presenting
39 Financial Instruments Recognition and Measurements and
the financial statements. The estimates and underlying
NFRS 7 Financial Instruments – Disclosures have been applied.
assumptions are reviewed periodically. Revision to accounting
estimates are recognized in the period in which the estimates
Numbers of new standards and amendments to the existing
is revised, and are applied prospectively.
standards and interpretations have been issued by IASB after
the pronouncements of NFRS with varying effective dates. Disclosures of the accounting estimates have been included in
Those become applicable when ASB Nepal incorporates them the relevant section of the notes wherever the estimates have
within NFRS. been applied along with the nature and effect of changes of
accounting estimates, if any.
A significant impact on classification and measurement
including impairment of financial instruments, will arise as a 2.9 Financial Periods
result of application of NFRS 9.
The company follows the Nepalese financial year based on the
2.6 Presentation Nepalese calendar.
The financial statements have been presented in the nearest 2.10 Discounting
Nepalese Rupees.
Discounting has been applied where assets and liabilities are
For presentation of the statement of financial position assets non-current and the impact of the discounting is material.
and liabilities have been bifurcated into current and non-
current distinction. 2.11 Limitation of NFRS implementation
If the information is not available and the cost to develop
The statement of profit or loss has been prepared using
would exceed the benefit derived, such exception to NFRS
classification ‘by nature’ method.
implementation has been noted and disclosed in respective
The cash flows from operation within the statement of cash section.
flows have been derived using the indirect method.
2.7 Presentation currency

3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are tangible items that are held
Financial statements are denominated in Nepalese Rupees,
for servicing, or for other purposes and are expected to be
which is the functional and presentation currency of the
used during more than one period.
company.
2.8 Accounting Policies and accounting estimates a. Basis of Recognition

Property, plant and equipment are recognized if it is probable
The company, under NFRS, is required to apply accounting
that future economic benefits associated with the assets will
policies to most appropriately suit its circumstances and

flow to the Company and cost of the asset can be reliably the current and comparative periods are as follows:
measured.
Laptop and Computers 4 years
b. Basis of Measurement
Battery 4 years
An item of property, plant and equipment that qualifies for
recognition as an asset is measured at its cost. Cost includes Furniture, Fixture, Office Equipment 6 years
expenditure that is directly attributable to the acquisition of Motor Cycle 6 years
the asset and cost incurred subsequently to add to, replace part
of, or service it. The cost of self-constructed assets includes Other Office Equipment’s 2 years
the cost of materials and direct labor, any other costs directly
Depreciation of an asset begins when it is available for use, i.e.
attributable to bringing the asset to a working condition for
when it is in the location and condition necessary for it to be
their intended use and the costs of dismantling and removing
capable of operating in the manner intended by management.
the items and restoring the site on which they are located.
Depreciation of an asset ceases at the earlier of the date that

The low value minor equipment below NRs 10,000 are not
the asset is classified as held for sale and the date that the
booked as Property, Plant and Equipment to ease record
asset is derecognized.
keeping and is shown under Office Accessories & Equipment’s
under General Administrative Expenses in Note 14 f as the
Depreciation methods, useful lives and residual values are
cumulative impact of such amount is NRs. 61,576 and is
reviewed at each reporting date.
considered immaterial.
f. Fixed Assets
c. Subsequent costs
Balance Additions Disposals Balance as at
The cost of replacing part of an item of property, plant and as at during during the 31/03/2076
01/04/2075 the year year
equipment is recognized in the carrying amount of the item
if it is probable that the future economic benefits embodied At Cost
within that part will flow to the Company and its cost can Furniture & Office
4,965,480 850,577 - 5,816,057
Equipment
be measured reliably. The costs of day-to-day servicing of
Vehicle 170,000 207,400 - 377,400
property, plant and equipment are charged to the statement
of profit or loss as incurred.
Depreciation
d. De-recognition Furniture & Office
1,417,054 1,208,310 - 2,625,364
Equipment
The carrying amount of an item of property, plant and equipment
Vehicle 43,681 32,654 - 76,335
is derecognized on disposal or when no future economic
benefits are expected from its use or disposal. The gain or
loss arising from the de-recognition of an item of property, Net Book Value
plant and equipment is included in statement of profit or loss Furniture & Office
3,548,426 - - 3,190,693
when the item is derecognized. When replacement costs are Equipment
recognized in the carrying amount of an item of property, plant Vehicle 126,319 - - 301,065
and equipment, the remaining carrying amount of the replaced
Net Book Value 3,674,745 - - 3,491,758
part is derecognized. Major inspection costs are capitalized. At
each such capitalization, the remaining carrying amount of the
previous cost is derecognized.
e. Depreciation 4. INTANGIBLE ASSETS

Depreciation is calculated over the depreciable amount, which An intangible asset is an identifiable non-monetary asset
is the cost of an asset plus and incidental costs related to without physical substance held for use in the production or
acquisition. Depreciation is recognized in the statement of supply of goods or services, or for administrative purpose.
profit or loss on the basis of life of the assets as defined/
estimated by the management. The estimated useful lives for

a. Basis of recognition 5. ASSETS HELD FOR SALE AND

Intangible assets are recognized if it is probable that the DISCONTINUED OPERATIONS
future economic benefits that are attributable to the asset will Non-current assets (such as property) and disposal groups
flow to the entity and the cost of the assets can be measured (including both the assets and liabilities of the disposal groups)
reliably. are classified as held for sale and measured at the lower of
their carrying amount and fair value less cost to sell when: (i)
b. Amortization their carrying amounts will be recovered principally through
sale; (ii) they are available-for-sale in their present condition;
Intangible assets are amortized over their estimated useful and (iii) their sale is highly probable.
economic life on a straight-line basis.
Immediately before the initial classification as held for sale,
They are assessed for impairment whenever there is an the carrying amounts of the assets (or assets and liabilities
indication that the intangible asset may be impaired. in a disposal group) are measured in accordance with the
applicable accounting policies described above.
The estimated useful lives for the current and comparative
periods are as follows: There are no assets that meet the recognition criteria for
assets held for sale and discontinued operation.
• Software - 5 Years
• Leasehold Assets to the extent of lease period– 6 Years
• Amortization methods, useful lives and residual values are
6. FINANCIAL INSTRUMENTS
reviewed at each reporting date. The Company’s principal financial assets comprise assets held
at fair value through profit and loss, financial assets measured
at Amortized Cost and cash and cash equivalents. The main
c. De-recognition
purpose of these financial instruments is to generate a return
An intangible asset is derecognized on disposal or when on the investment made by shareholders. The Company’s
no future economic benefits are expected from its use and principal financial liabilities comprise accrued expenses and
subsequent disposal. other payables which arise directly from its operations.
In accordance with NFRS 39; Financial Instruments: Recognition

d. Intangible Assets and Measurement, the company’s investment in Fixed Deposits
Balance Additions Disposals Balance are classified as Financial Assets measured at amortized cost,
as at during the during the as at Equity securities are classified as fair value through profit and
01/04/2075 year year 31/03/2076
loss. The amount attributable to Shareholders is classified as
At Cost
equity. Payables are designated as Current and Non-Current
License & Software 2,165,080 - - 2,165,080
liabilities at amortized cost.
Leasehold Assets 4,887,712 1,254,523 - 6,142,235
a) Classification
Depreciation The Fund’s investments are classified as fair value through

profit or loss and Financial Assets measured at Amortized
License &Software 373,060 280,023 - 653,083
Cost. They comprise:
Leasehold Assets 1,180,983 957,053 - 2,138,036
• Financial instruments classified as fair value through

Net Book Value
profit or loss
License &Software 1,792,020 - - 1,511,997 Financial assets, held for trading are recorded in the
Leasehold Assets 3,706,729 - - 4,004,199 statement of financial position at fair value. Changes
Net Book Value 5,498,748 - - 5,516,195 in fair value are recognized through profit or loss. This
classification includes quoted equity securities held for
trading.

• Financial Assets measured at Amortized Cost: markets is subsequently based on their quoted market prices
at the end of the reporting period without any deduction for
Financial Assets measured at Amortized Cost are non- estimated future selling costs.
derivative financial assets with fixed or determinable
payments and fixed maturities that are not quoted on an The fair value of financial assets and liabilities that are not
active market. traded in an active market are determined using valuation
techniques. The quoted market price used for financial assets
held by the Company is the cost price which has not been
b) Recognition / De- recognition reclassified due to the assets not being listed in an active
market till date and immaterial impact of such valuation.
The company recognizes financial assets and financial
liabilities on the date it becomes party to the contractual Financial Asset measured at Amortized Cost
agreement (trade date) and recognizes changes in fair value of
the financial assets or financial liabilities from this date. Financial Asset measured at amortized cost are measured
initially at fair value plus transaction costs and subsequently
Investments are derecognized when the right to receive cash amortized using the effective interest rate method, less
flows from the investments has expired or the Company has impairment losses if any. Such assets are reviewed at the
transferred substantially all risks and rewards of ownership. end of each reporting period to determine whether there is
objective evidence of impairment.
Financial liabilities at fair value through profit or loss are
derecognized when the obligation specified in the contract is If evidence of impairment exists, an impairment loss is
discharged or expired. recognized in profit or loss as the difference between the
asset’s carrying amount and the present value of estimated
Realized gains and realized losses on de-recognition are future cash flows discounted at the original effective interest
determined using the weighted average method and are rate.
included in the profit or loss in the period in which they arise.
The realized gain is the difference between an instrument’s If in a subsequent period the amount of an impairment loss
weighted average cost and disposal amount. recognized on a financial asset carried at amortized cost
decreases and the decrease can be linked objectively to an
c) Measurement event occurring after the write-down, the write-down is
Financial assets and liabilities held at fair value through profit reversed through profit or loss.
or loss
d) Fair value measurement
At initial recognition, the Company measures a financial asset The Company measures and recognizes the following assets
at its fair value. Transaction costs of financial assets carried at and liabilities at fair value on a recurring basis:
fair value through profit or loss are expensed in the statement
of Profit or loss and other comprehensive income. The Company has no assets or liabilities measured at fair value
on a non-recurring basis in the current reporting period:
Subsequent to initial recognition, all financial assets and
financial liabilities at fair value through profit or loss are NFRS 13 requires disclosure of fair value measurements by
measured at fair value. Gains and losses arising from changes level of the following fair value hierarchy;
in the fair value of the ‘financial assets or financial liabilities at
fair value through profit or loss’ category are presented in the Level 1 fair value measurements are those derived from
statement of comprehensive income within net gains/(losses) unadjusted quoted prices in active markets for identical assets
on financial instruments held at fair value through profit or or liabilities.
loss in the period in which they arise.
Level 2 valuations are those with quoted prices for similar
Fair value is the price that would be received to sell an asset instruments in active markets or quoted prices for identical
or paid to transfer a liability in an orderly transaction between or similar instruments in inactive markets and financial
market participants at the measurement date. instruments valued using models where all significant inputs
are observable.
The fair value of financial assets and liabilities traded in active

Level 3 portfolios are those where at least one input, which Name of No of Market Investment Input
Cost Cost Price
could have a significant effect on the instrument’s valuation, is Company units Value Value Level
not based on observable market data. Himalayan

General
Level 1
Insurance 1,300 398.53 506,390 350 455,000
Input
e) Financial Assets held at Amortized Cost –Non Company
Limited
Current
Neco
Level 1
Insurance 1,000 535.56 535,562 495 495,000
Particulars 31st Ashad 2076 32nd Ashad 2075 Input
Limited
Fixed Deposit 70,000,000 60,000,000 Swadeshi

Laghubitta
Level 1
Total 70,000,000 60,000,000 Bittiya 27 96.30 2,600 578 15,606
Input
Sanstha
Limited
f) Loans & Advances–Non Current Nirdhan

Level 1
Utthan Bank 500 719.09 359,545 841 420,500
Input
Limited
The non-current security deposit is presented in fair value by
Shikhar
discounting applying the rate of 10%. The unearned portion is Insurance Level 1
152 587.98 130,414 771 117,192
Company Input
shown as loans and advances (all non-current) and this year’s Limited
expenses is charged as finance cost in SOPL. Nepal
Doorsanchar Level 1
11,510 691.68 7,961,187 693 7,976,430
Comapany Input
Particulars 31 Ashad 2076
st
32 Ashad 2075
nd
Limited
Security Deposit 390,593 362,823 Chilime
Hydropower Level 1
1,317 517 680,594 521 686,157
Unearned Interest on Security Deposit 60,603 126,330 Company Input
Limited
Total 451,196 489,153 NMB Bank Level 1
5,000 385.01 1,925,069 382 1,910,000
Limited Input
Nepal Life
g) Loans & Advances– Current Insurance 6,680 948.41 6,335,397 901 6,018,680
Level 1
Input
Co. Ltd.
Particulars 31st Ashad 2076 32nd Ashad 2075 Kumari Bank Level 1
3,000 210.08 630,254 220 660,000
Limited Input
Unearned Interest on Security Deposit 25,148 36,918
Prabhu Bank Level 1
5,000 268.38 1,341,900 266 1,330,000
Total 25,148 36,918 Limited Input
Prime
Level 1
Commercial 6,000 287.49 1,724,938 278 1,668,000
Input
h) Financial Assets measured at Amortized Cost– Bank Limited
Current BFIIN
Level 1
Promotor 10,000 100 1,000,000 100 1,000,000
Input
shares
Particulars 31st Ashad 2076 32nd Ashad 2075
Civil Bank
Level 1
Fixed Deposit 97,600,000 112,000,000 Limited- 540 - - 158 85,320
Input
unlisted
Total 97,600,000 112,000,000 Present value 26,047,705
Cost 26,348,559
i) Financial Assets held at fair value through Profit or Net Unrealized Loss (300,854)
Loss Unrealized gain
58,675
recognized till last year
Particulars 31st Ashad 2076 32nd Ashad 2075 decrease in Fair
(359,529)
value
Investment in Shares 26,047,705 60,875
Total 26,047,705 60,875

7. CASH AND CASH EQUIVALENTS
Name of No of
Cost Cost Price
Market Investment Input For the purpose of presentation in the statement of cash
Company units Value Value Level
flows, cash and cash equivalents includes cash in hand and
Civil Bank Level 1
Limited
5,278 166.76 880,151 158 833,924
Input
at bank. Payments and receipts relating to the purchase and
Sanima Bank Level 1
sale of investment securities are classified as cash flows from
6,032 344.37 2,077,255 348 2,099,136
Limited Input operating activities.
Muktinath
Level 1
Bikash Bank 748 343.98 257,303 370 276,760
Input
Limited

Prepaid Expenses, Deposits & Advances are recognized and
carried at amortized cost, less a provision for any uncollectable
Cash in Hand 22,132 12,246
debts. An estimate for doubtful debt is made when collection
Cash at Bank 24,883,534 72,112,635
of an amount is no longer probable.
Total 24,905,666 72,124,881
Recoverability of receivable is reviewed on an ongoing basis at
an individual portfolio level, Individual debts that are known to
8. TRADE RECEIVABLES be uncollectable are written off when identified. An impairment
Trade Receivables include amounts for dividends, interest and provision is recognized when there is objective evidence
other trade receivables. Dividends are accrued when the right that the Company will not be able to collect the receivable.
to receive payment is established. Interest is accrued at the Financial difficulties of the debtor, default payments are
end of each reporting period from the time of last payment. considered objective evidence of impairment. The amount
Amounts are generally received within 90 days of being of the impairment loss is the receivable carrying amount
recorded as receivables. compared to the present value of estimated future cash flows,
discounted at the original effective interest rate.
Receivable are recognized and carried at amortized cost, less a
provision for any uncollectable debts. An estimate for doubtful Prepaid Expenses & Advances
debt is made when collection of an amount is no longer
probable.
Advance Tax 1,062,075 148,162
Recoverability of receivable is reviewed on an ongoing basis at Prepaid Expenses 450,230 288,753
an individual portfolio level, Individual debts that are known to
Other Advance 402,050 28,330
be uncollectable are written off when identified. An impairment
Interest Receivable 47,055 24,945
provision is recognized when there is objective evidence
Total 1,961,410 490,189
that the Company will not be able to collect the receivable.
Financial difficulties of the debtor, default payments are
considered objective evidence of impairment. The amount 10. EMPLOYEE BENEFIT
of the impairment loss is the receivable carrying amount
compared to the present value of estimated future cash flows, Define contribution plan
discounted at the original effective interest rate. A defined contribution plan is a post-employment plan under
which an entity pays fixed contribution into a separate entity
Trade & Other Receivables
and will have no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution
plans are recognized as an employee benefit expense in
Trade Receivables 2,293,012 897,042
the statement of profit or loss in the periods during which
PMS Clients 1,278,577 48,552 services are rendered by employees. Employees are eligible for
Mutual Fund Receivables 11,461,808 6,451,097 Employees’ Provident Fund Contributions in accordance with
Other Receivables 146,143 100 the respective statutes and regulations.
Total 15,179,540 7,396,791
Contributions to defined contribution plans are recognized as
an expense in the statement of profit or loss as incurred.
9. PREPAID EXPENSES, DEPOSITS &
Employees' provident fund
ADVANCES
The company contributes 10% of the salary of each employee
Prepaid Expenses, Deposits & Advances may include amounts
to the Employees’ Provident Fund managed by government of
for advance tax, prepaid expenses and other advances.
Nepal.
The advance tax represents TDS receivable and tax deposited
by the company. Advance tax for the Income Year paid by the
Gratuity After Bhadra 19, 2074
company has been settled with the provision for income tax The Gratuity Liability of 8.33% on Basic Salary of all staff after
liability and are presented as Net Advance tax as current assets Bhadra 19, 2074 is computed as per New Labour Act 2074 and

provided accordingly treating it as defined contribution plan as Particulars 31st Ashad 2076 32nd Ashad 2075
the contribution is fixed.
Accrued Rent (As per NFRS) 565,258 463,624
Citizens' Investment Trust Total 565,258 463,624
The company doesn't contribute to the Citizens' Investment

Trust but employee may contribute according to their b. Trade & Other Payable-Current
preference.
31st Ashad 32nd Ashad
Particulars
Defined benefit plan 2076 2075
Auction Share Collection Payable 792,469 789,287
A defined benefit plan is a post-employment benefit plan
Right Share Collection 72,620 28,320,020
other than a defined contribution plan. The Company is liable
NIC ASIA GROWTH Fund Collection 500 -
to pay retirement benefits i.e.; gratuity under the Labor Act,
Fees and taxes payable 103,660 -
2048. Gratuity under Labour Act 2074 from Bhadra 19, 2074 is
a defined contribution plan and disclosed separately as above. Renounce Charge - 8
The liability recognized in the financial statements in respect Right Refund 192,650 192,650
of defined benefit plans is the present value of the defined Sahayogi Dividend Payables 9,197,720 2,030,434
benefit obligation as at the reporting date. The defined benefit Sahayogi Refund 448,597 448,997
obligation is calculated as at the reporting date based on an Incentive to PMS Referral - -
internally generated model as on Bhadra 19, 2075. Advance Renewal Fee 1,100 15,000
Advance - Mero Share Renewal Fees 2,350 -

Contributions to defined contribution plans are recognized as
an expense in the statement of profit or loss as incurred. Advance From PMS 191,876 -
Advance Received - Account Opening 2075 50

Gain or loss on re measurement of the plan will be recognized Surya Life Insurance Notice Refund 8,989 -
in other comprehensive income.
Staff Payable 3,683,787 2,228,631
Provident Fund Payable 248,212 77,680

Employee Benefits
CIT Fund Payable 53,146 10,000
Particulars 31 Ashad 2076

st
32 Ashad 2075
nd Performance Guarantee held 25,000 50,000
At the beginning of the Year 1,035,143 56,984 Audit Fee Payable 85,000 78,050
Recognized on Income Statement 1,464,228 1,050,323 Notice Publication - 93,652
Recognized on OCI - - TDS Payable 100,566 74,346
Sundry Creditors 528,101 654,249

Payments/ Payables during the Year (684,487) (72,364)
Payable to Regulatory Authorities 3,084,938 7,356,811
At the end of the Year 1,814,884 1,035,143
Shared Service Fee Payable 1,130,948 654,764
Other Payable 847,182 1,512,653

11. TRADE & OTHER PAYABLE Total 20,801,486 44,587,282
Trade Payable includes amounts payable related to expenditure

including issue Management and RTS services. Payable are 12. IMPAIRMENT
recognized and carried at fair value of liability. Discounting is
made only for material non-current payables. The company assesses at each reporting date whether there
is objective evidence that a financial asset or group of financial
Non-current payable includes accrued rent amount created assets is impaired. A financial asset or a group of financial
due to Lease rental for premises charged on straight line basis assets is impaired and impairment losses are incurred if, and
in accordance to the lease. only if, there is objective evidence of impairment as a result
of one or more events occurring after the initial recognition
Current trade and other payables include payable to be paid
of the asset (a loss event), and that loss event (or events) has
with 90 days.
an impact on the estimated future cash flows of the financial
asset or group of financial assets.
a. Trade & Other Payable-Non Current

13. REVENUE RECOGNITION b. Income from Mutual Fund
Revenue is recognized to the extent that it is probable that the Particulars 31st Ashad 2076 32nd Ashad 2075
economic benefit will flow to the Company and the associated Income from Mutual Fund 17,696,927 5,820,731
costs incurred or to be incurred can be reliably measured. Total 17,696,927 5,820,731
Revenue is measured at the fair value of the consideration

received or receivable, net of sales returns, trade discounts c. Interest Income
and revenue related taxes.
Revenue for services rendered is recognized in the statement Interest on Fixed Deposit 22,987,040 16,283,137
of profit or loss after delivery of the service whereas in case of Interest on Call Accounts 2,075,079 6,898,522
Issue Management Service, the advance received is recognized
Total 25,062,119 23,181,659
as Income as the fees are non-refundable and immaterial
and there is no other mechanism to properly estimate the
percentage of the work completed and the time required to d. Other Income:
complete the issue management.
Particulars
2076 2075
Interest income is recognized in profit or loss for all financial
Net Realized (losses)/Gains on financial
instruments that are not held at fair value through profit or Assets at Fair Value Through Profit or loss
1,279,102 37,765
loss using the effective interest method. Interest income on
Dividend Income 100,887 -
assets held at fair value through profit or loss is included in the
Miscellaneous Income 79,650 13,875
net gains/ (losses) on financial instruments. Other changes in
Net Unrealized Gains on financial assets
fair value for such instruments are recorded in accordance with at Fair Value Through Profit or Loss
(359,529) 45,288
the policies described in Note 6.
1,100,110 96,927
The effective interest method is a method of calculating the Net Realized Gains on Financial Assets at
1,279,102 37,765
Fair value through Profit or Loss
amortized cost of a financial asset or financial liability and of
(Losses)/Gains on disposal of equity
allocating the interest income or interest expense over the 1,279,102 37,765
securities
relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments or receipts
throughout the expected life of the financial instrument, or a 14. EXPENDITURE
shorter period where appropriate, to the net carrying amount
All expenses except specially mentioned are accounted
of the financial asset or liability. When calculating the effective
on accrual basis. All expenditure incurred in running of the
interest rate, the Company estimates cash flows considering
business and in maintaining the property, plant & equipment
all contractual terms of the financial instrument but does
in a state of efficiency has been charged to revenue in arriving
not consider future credit losses. The calculation includes all
at the profit for the year and presented in statement of profit
fees paid or received between the parties to the contract that
or loss.
are an integral part of the effective interest rate, including
transaction costs and all other premiums or discounts. Expenditure incurred for the purpose of acquiring, expanding
or improving assets of a permanent nature by means of which
Dividend income is recognized on the ex-dividend date net of
to carry on the business or for the purpose of increasing the
withholding tax.
earning capacity of the business has been treated as capital
expenditure.
a. Income from Merchant Banking
31st Ashad 32nd Ashad Repairs and renewals are charged to the income statement in
Particulars
2076 2075 the year in which the expenditure is incurred. The profit earned
Income from Issue Management 520,750 4,677,640 by the Company is before income tax expense and after making
Income from Depository Participant 19,232,874 21,138,091 provision for all known liabilities and for the depreciation of
Income from Share Registrar 4,379,506 1,845,377 property, plant & equipment.
Income from Portfolio Management Services 1,408,195 457,142
Total 25,541,325 28,118,250

a. Merchant Banking Expenses d. Premises cost

31st Ashad 32nd Ashad Lease rental for premises are charged on straight line basis in
Particulars
2076 2075
accordance to the lease. All other expenses are recognised
Depository Participant Expense 5,003,155 9,048,873 when they become due for payment.
RTS Expense 186,160 91,552
Portfolio Management Expenses 109,879 94,057 Particulars
2076 2075
Issue management Expenses 18,978 233,882 Office Rent 2,390,267 2,258,520
License Fee to SEBON - 325,000 Office Rent (As per NFRS on Operating Lease) 101,633 233,380
Merchant Banking Membership Renewal Fee
Utility Expenses 889,561 901,064
to SEBON 650,000 500,000
Store Room Rent 99,600 95,450
Renewal Fees Mero Share Charge-Sebon 48,648 -
Membership Fee - Merchant Bankers Security Charge 633,240 407,369
Association 60,000 -
Total 4,114,301 3,895,783
Account Opening Charge -SEBON 97,280 -
Auction Form Charge-Sebon 7,705 - *Note-The company has entered into lease agreement from 1 Poush 2073 for a
period of 6 years with Siddhartha Insurance Ltd for lease property.
Total 6,181,805 10,293,364
e. Advertisement and Promotion Expenses

b. Mutual Fund Expenses
Particulars Advertisement Expenses 166,201 69,156
2076 2075
Mutual Fund Expenses 884,846 291,037 Domain Registration Charge 3,390 2,825
Fund Manager License Renewal Fee to SEBON 125,000 125,000 Marketing & PR 570,243 1,211,422
Total 1,009,846 416,037 Program Expenses - 55,225
Social Service Expenses - 13,865
Web & Mail Hosting 19,775 39,550

c. Staff Cost
Website Development - 3,000
Particulars Total 759,609 1,395,043
2076 2075
Staff Service from NIC ASIA - 574,290
Remuneration 12,942,102 10,599,229 f. General Administrative Expenses

Contribution to Defined Contribution Plan (PF) 717,080 332,968
Force Leave Expenses 744,119 -
Dashain Allowances 870,350 272,520 Insurance Expenses 53,461 33,494

Other Staff Expenses 411,444 153,422 Office Accessories & Equipments 61,576 28,673
Incentives for Staff 179,229 83,349 Office Utilities 41,495 13,219
Training 7,345 8,000 Messenger Service - 155,735
Particulars Office Expenses 798,132 873,752
2076 2075
Leave Encashment and Gratuity 1,464,228 1,050,523 Repair & Maintenance 71,580 81,553
Medical Insurance 37020 - AGM Expenses 12,501 18,543
Staff Bonus* 3,411,266 2,100,915 Audit Expenses 5,700 3,265
Total 20,784,183 15,175,215 Bank Charge 9,624 5,758
Board Meeting fee & Expenses 274,520 151,010

*Provision for staff bonus is made as per Bonus Act at ten percent of net profit
Balance write off 30,760 -
without such bonus.
Prior Period Expenses 14,328 -
Capital Increment Fees - 30,000

Taxation

Certification Charges - 5,650
Audit Fee 80,000 79,100 Income Tax Expenses 9,616,791 5,598,433
Courier Charges 18,678 27,634 Deferred Tax Expenses/(Income) (341,123) (301,499)
Fine & Penalties 144,283 5,486 Total 9,275,667 5,296,934

General Expenses 1,589 7,860
Fees and taxes-municipal taxes 103,660 -

b. Deferred tax
Global Touch IT - AMC 56,585 4,415
Miscellaneous Expenses 11,400 - Deferred tax is recognized in respect of temporary differences

between the carrying amounts of assets and liabilities for
Membership Fee - BFIN 50,000 -
financial reporting purposes and the amounts used for
Printing & Stationery Expenses 575,994 479,899
taxation purposes.
Shared Service from Bank 476,184 476,189
Software Support Charges 142,380 279,500 The measurement of deferred tax reflects the tax
Tally AMC Charge 29,999 5,000 consequences that would follow the manner in which the
System X Software 32,806 - Company expects, at the end of the reporting period to cover
Trademark Expenses - 1,000 or settle the carrying amount of its assets and liabilities.
Transportation Charge 8,940 10,950
Deferred tax is measured at the tax rates that are expected to
Travelling Expenses 132,787 38,645
be applied to temporary differences when they reverse, using
Audit Committee Meeting Allowances 25,000 -
tax rates enacted or substantively enacted at the reporting
Risk Committee Meeting Allowances 70,000 - date.
Toll Free Expenses 1,000 -
Tax Expenses 92 -
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets,
Vehicle Tax 8,550 8,000
and they relate to taxes levied by the same tax authority on
Total
the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis
15. INCOME TAX EXPENSE or their tax assets and liabilities will be realized simultaneously.
Income tax on the profit for the year comprises current and
A deferred tax assets is recognized for unused tax losses,
deferred tax. Income tax is recognized directly in the statement
tax credits and deductible temporally differences to the
of profit or loss except to the extent that it relates to items
extent that it is probable that the future taxable profits will
recognized directly in equity or other comprehensive income.
be available against which they can be utilized. Deferred tax
a. Current tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax
Current tax is the expected tax payable on the taxable income
benefit will be realized, based on the level of future taxable
for the year, using tax rates enacted at the reporting date, and profit forecasts and tax planning strategies.
any adjustment made to tax payable in respect of previous
years. The amount of current tax payable or receivable is Deferred tax liabilities are recognized for all taxable temporary
the best estimate of the tax amount expected to be paid or differences.
received that reflects uncertainty related to income taxes, if
any.

Deferred Tax Asset The detail of share ownership is presented below
31st Ashad 32nd Ashad Share Ownership Detail % Share Capital (Rs.)
2076 2075
1. Domestic ownership 100 200,000,000
13.1 Deferred Tax Asset
Balance at the beginning of the Year 1.1 NIC ASIA Bank Limited 100 200,000,000
Provision/ Release of timing difference made
714,043 449,630 2. Foreign Ownership - -
during the Year
Balance as at the end of the Year 714,043 449,630 Total 100 200,000,000
13.2 Deferred Tax Liability 17. CAPITAL COMMITMENTS & CONTIN-

Balance at the beginning of the Year - GENCIES
Provision/ Release of timing difference made
138,021.85 214,732 Contingent liabilities are possible obligations whose existence
during the Year
Balance as at the end of the Year 138,022 214,732

will be confirmed only by uncertain future events or present
obligations where the transfer of economic benefits is not
Net Deferred Tax (Asset)/ Liability (576,021) (234,898)
probable or cannot be reliably measured.
13.3 Deferred Tax Liability relates to the following
Temporary difference from Property, Plant & 18. EVENTS AFTER THE REPORTING DATE.
760,927 670,486
Equipment
The materiality of the events after the reporting date has been
Temporary difference from Unrealized gain
(565,258) (463,624)
on Investment considered and appropriate adjustments and provisions have
Temporary difference from Operating Lease been made in the financial statements wherever necessary.
(300,854) 45,288
(Rent)
Temporary difference from Employee
(1,814,884) (1,035,143)
Benefits
19. SEGMENTAL REPORTING
Brought forward Tax Loss - -
The company is organized for management and reporting
Temporary Difference (1,920,069) (782,993)
purposes into segments such as: Portfolio Management
Tax @ 30% 30% Services, Issue Management Services, Registrar to Shares,
Depository Participants and Others. The segmental information
16. SHARE CAPITAL is immaterial.
32nd Ashad
31st Ashad 2076
Particulars
2075 20. RELATED PARTY TRANSACTION
Per Unit
Number Amount Amount
Value a) The total interest income earned by NIC ASIA Capital
Authorized Capital 2,000,000 100 200,000,000 200,000,000 Limited on Bank Accounts maintained in NIC ASIA Bank Ltd.
for FY 2075/76 is Rs. 24,25,651.07.
Issued Capital 2,000,000 100 200,000,000 200,000,000
Subscribed Capital 2,000,000 100 200,000,000 200,000,000 b) The Company has been appointed as the Share Registrar
of NIC ASIA Bank Limited for an annual fee of Rs. 8,25,000.

Paid Up Shares (Number)
2076 2075
c) The company has reimbursed NPR 4,76,184.00 as staff
expense as per the Service Level Agreement with the Bank
Fully Paid Ordinary Shares at the beginning
2,000,000 2,000,000
of the Year for providing necessary operational and technical support.
Number of Shares subscribed - -
Fully Paid Ordinary Shares at the end of the

Year (Number)
2,000,000 2,000,000 21. EVENTS AFTER REPORTING PERIOD
Per unit Value of the Shares
100 100
The company monitors and assesses events that may have
Ordinary Shares (Amount)
potential impact to qualify as adjusting and / or non-adjusting
Fully Paid Ordinary Shares (Amount) (Rs.) 200,000,000 200,000,000 events after the end of the reporting period. All adjusting

events are adjusted in the books with additional disclosures and non-adjusting material events are discloses in the notes with
possible financial impact, to the extent ascertainable.
There are no material events that have occurred subsequent to 16 July 2019 till the signing of this financial statement.
22. PROPOSED DIVIDEND

The Board of Directors meeting of NIC ASIA Capital Limited has proposed cash dividend of 11.00% (including corporate dividend tax)
for fiscal year 2075/76.
As per our report on even date
Ganesh Prasad Pandey Manish Ghimire Ramendra Rayamajhi Dinesh Bhari Arun Raut, FCA
Head - Accounts Chief Operating Officer Chief Executive Officer Director Partner
S.R. Pandey & Co.
Suman Dangol Rabin Sapkota Bimal Lamsal Bishal Sigdel

Date: August 25, 2019

Place: Kathmandu

NETWORK
OF
NIC ASIA
BANK
9.1 Bank's Network.............................................................384
9.2 Subsidiaries......................................................................386
9.3 Business Partners........................................................ 387

9.1 BANK'S NETWORK BRANCHES

8
(As on date of report) ATMs
7
KARNALI PROVINCE
Humla
1
1 1
Mugu 1
Darchula
Mustang
1
Bajhang 1
1 1 Dolpa
1
Baitadi Bajura Jumla 1
1
1
1 1 Kalikot Manang
1
1 1
t
es
ra 1 Achham 1 1
dhu
-W Rukum-East
el
Dad Doti Myagdi
m
Jajarkot 1
ku
Dailekh 1 1 Kaski
Ru
Kanchanpur 1
13
4 8 2 9
1 8 2 3 Baglung 1
1
1
at
Surkhet Rolpa 3
Kailali
Parb
1 2 Ta
3 Salyan 1 1 1
3 1 1
Gulmi Syangja
Bardiya Pyuthan
1
7 1 1
6 hi
hac Palpa 1 5
Banke Dang 5
Ar ghak
SUDURPASCHIM 3
Rupendehi
3
al
pu
i
ras
6
PROVINCE 3 21 N
aw
Pa
Kapilbastu 16
BRANCHES PROVINCE 5
19 BRANCHES TOTAL
ATMs
53 BRANCHES 297
13 ATMs
TOTAL
BRANCHLESS BANKING
38 ATMs 302
3 BRANCHLESS BANKING
TOTAL
EXTENSION COUNTER
14 BRANCHLESS 61
6 EXTENSION COUNTER
BANKING
20 TOTAL
EXTENSION 108
COUNTER

BRANCHES
31
BRANCHES
ATMs
26 BRANCHES 56
BRANCHLESS BANKING 87 ATMs
9 ATMs 45
EXTENSION COUNTER 154 BRANCHLESS BANKING
10 BRANCHLESS BANKING 24
4 EXTENSION COUNTER
GANDAKI PROVINCE EXTENSION COUNTER 14
52
PROVINCE 1
BAGMATI PROVINCE
g Gorkha
1
Rasuwa
1
Lamjung 1 Taplejung
Dolkha Sankhuwasabha
1 Sindhupalchowk Solukhumbu
1
3
4 1 1 1 1
6 1 1
5 Nuwakot
6
anaju
KTM 1 1
5 Dhading BKT 3 um
3 1
1 1 1 1
ath
5
Kavre Ramechhap r
Lal
6
tha
Okhaldhunga Bhojpur 1
r
9
itpu
Teh
6 1 2
h
7 2
Pac
Khotang
r
1
ur Chitwan
Makawanpur Dhankuta Ilam
3 Sindhuli 2
3 1
1 1
6 Udayapur 14 17
4 5 4 16
3 9 1 10 14
Rautahat
Dhanusha
3 2 5 Morang Jhapa
Parsa 4 i 6 9
2
ttari
Bara h 4 4 Sunsari
la
ar Siraha
Maha
S Saptari
PROVINCE 2 45
99 6
BRANCHES ATMs BRANCHLESS BANKING EXTENSION COUNTER 11
43 19 7 6
7
16

9.2 SUBSIDIARIES
NIC ASIA Laghubitta Bittiya Sanstha Ltd.
Pg cfO{ ;L Plzof n3'ljQ ljQLo ;+:yf ln=
(Subsidiary of NIC ASIA Bank Limited) (Subsidiary of NIC ASIA Bank Limited)
Bheri-4, Khalanga, Jajarkot 3rd Floor, Siddhartha Insurance Complex,
Tel No:089 430366/68 Babar Mahal, Kathmandu
Fax No: 089 4300367 Tel No: +977-01-5705994 (Hunting Line),
Email: info@nicasialaghubitta.com 5705664, 5706318, 5705337
Website: www.nicasialaghubitta.com Fax No: 977-1-5706458
Email: info@nicasiacapital.com
Website: www.nicasiacapital.com
BRANCHES OF NIC ASIA LAGHUBITTA BITTIYA SANSTHA LIMITED

S.N Branch Name Address S.N Branch Name Address
1 Khalanga Jajarkot, Bheri Malika-4 32 Hakui Nawalparasi, Ramgram-16
2 Thalah Jajarkot, Chhedagadh-5 33 Magarkot Nawalparasi, Kawasoti-10
3 Chaurjahari Rukum, Chaurjahari-1 34 Narayanpur Kailali, Tikapur-6
4 Kotihawa Rupandehi, Tilottama-15 35 Bangesimal Surkhet, Birendranagar-1
5 Sallibazar Salyan, Bangadh Kupinde-1 36 Dalli Jajarkot, Tribeni Nalgand-7
6 Lawani Kapilvastu, Suddhodhan Ga Pa-3 37 Gothijeula Jumla, Kanakasundari-6
7 Bhutaha Nawalparasi, Bardaghat-10 38 Parsa Chitwan, Khairhani-6
8 Imiliya Kapilvastu, Buddha Bhumi-9 39 Bansgadhi Bardiya, Bansgadhi-9
9 Simli Rukum, Sani Bheri Ga Pa-9 40 Masuriya Kailali, Gauriganga-8
10 Chhinchu Surkhet, Bheriganga-12 41 Bahadurganj Kapilvastu, Krishnanagar-7
11 Chappargaudi Banke, Kohalpur, -12 42 Bodgaun Kapilvastu, Banganga-6
12 Ramapur Rupandehi, Sainamaina-10 43 Dumkibas Nawalparasi, Binai Tribeni-1
13 Jamunebazar Surkhet, Simta-9 44 Hupsekot Nawalparasi, Humsekot-3
14 Chhapiya Rupandehi, Siyari Ga Pa-4 45 Gobaraiya Nawalparasi, Sarawal-4
15 Bethari Rupandehi, Mayadevi Ga Pa-6 46 Sauraha Chitwan, Ratnanagar-6
16 Manpakadi Rupandehi, Suddhodhan Ga Pa-5 47 Laundihawa Rupandehi, Gaidawa-3
17 Shankarpur Rupandehi, Devadaha-12 48 Bahuniya Kailali, Bardagoriya-1
18 Gadawa Dang, Gadawa-6 49 Ganapur Banke, Janaki Rmp-6
19 Mehelkuna Surkhet, Gurbhakot-8 50 Basantapur Rupandehi, Om Satiya-4
20 Sardi Nawalparasi, Binayi-4 51 Chaukune Surkhet, Chaukune-8
21 Bhumai Nawalparasi, Sunwal-12 52 Hasuliya Kailali, Kailari Ga Pa-5
22 Baruwa Nawalparasi, Susta-1 53 Samjhanachowk Banke, Baijanath Rmp-6
23 Padampur Chitwan, Kalika-04 54 Milanchowk Banke, Duduwa Rmp-5
24 Joshipur Kailali, Joshipur-2 55 Dumara Kapilvastu, Mayadevi Rmp-2
25 Punarbas Kanchanpur, Punarbaas-3 56 Shantibazar Bardiya, Geruwa Rmp-3
26 Jumla Jumla, Chandannath-6 57 Swathi Nawalparasi, Sunwal-9
27 Bestada Dailekh, Bhagwatimai Ga Pa-1 58 Kurintar Chitwan, Ichhakamana-4
28 Shamshergunj Banke, Raptisunari-8 59 Dhikure Nuwakot, Likhu-1
29 Mainapokhar Bardiya, Badaiyataal-06 60 Mudebajar Sindhupalchowk, Lisankhupakhar Ga Pa-5
30 Sisahaniya Dang, Rapti Ga Pa-5 61 Hattisudhe Makwanpur, Bakaiya Ga Pa-3
31 Semara Rupandehi, Tilottama-7

9.3 BUSINESS PARTNERS
CORRESPONDENT BANK
S.N. Correspondent Bank Name Location Swift Code
1 Standard Chartered Bank Frankfurt, Germany SCBLDEF
2 Commerz Bank Ag Frankfurt, Germany COBADEFF
3 Standard Chartered Bank London, United Kingdom SCBLGB2L
4 Standard Chartered Bank Mumbai, India SCBLINBB
5 HDFC Bank Mumbai, India HDFCINBB
6 Mashreq Bank Psc Mumbai, India MSHQINBB
7 ICICI Bank Limited Mumbai, India ICICINBB
8 Standard Chartered Bank Tokyo, Japan BOTKJPJT
9 Bank Of Tokyo-Mitsubishi Ufj, Ltd Tokyo, Japan SCBLJPJT
10 Standard Chartered Bank Singapore SCBLSG22
11 ICICI Bank Ltd Hong Kong ICICHKHHCLR
12 Standard Chartered Bank New York, USA SCBLUS33
13 Mashreq Bank Psc New York, USA MSHQUS33
14 Kookmin Bank Seoul, South Korea CZNBKRSE
DOMESTIC REMITTANCE PARTNERS FOR NIC ASIA REMIT
Domestic Remittance Partners Address Domestic Remittance Partners Address
China Town Building, China Town Rd, Kumari Bank Ltd. Tangal, Kathmandu
Advance Money Transfer
Kathmandu
Lumbini Bikas Bank Ltd. Dilibazar, Kathmandu
Bhatbhateni Money Transfer Kanti Path, Kathmandu
Rising Mall, Kamaladi, Kathmandu,
Mega Bank Nepal Ltd.
Cashway Money Transfer Pvt. Ltd. Shanta Plaza,Ratopul Nepal
Century Commercial Bank Ltd. Putalisadak, Kathmandu Nepal Investment Bank Limited. Putalisadak, Kathmandu
CG Remit Pvt. Ltd Saket Complex, Kathmandu Nepal Remit International Pvt. Ltd. Hattisar Rd, Kathmandu
City Express Money Transfer Pvt. Ltd. Kamaladi, Kathmandu Devkota Sadak, New Baneshwor,
Panos Remit
Kathmandu
Easylink Remittance Company Naya Bazaar Marg, Kathmandu
Prabhu Money Transfer Kamaladi, Kathmandu
Esara Remit Pvt. Ltd Hattisar Sadak, Kathmandu
Ramro Remit Pvt. Ltd. Baluwatar, Kathmandu
ESEWA Money Transfer Hattisar Sadak, Kathmandu
Remit to Nepal Chakupat, Lalitpur, Nepal
Garima Bikas Bank Ltd. Lazimpat, Kathmandu
Samsara Private Limited. Narayanchaur, Naxal, Kathmandu
Hathway Complex, Lazimpat, Kath-
GME Remit Pvt Ltd.
mandu Sanima Bank Limited. Naxal, Kathmandu
IME Limited IME Complex, Panipokhari, Kathmandu Sewa Remit Pvt. Ltd. Kuleshwor-14, Kathmandu
I PAY Remit Pvt. Ltd. Gairidhara Rd 2, Kathmandu United Remit Pvt. Ltd. New Road, Kathmandu
JME Remit Company Sherpa Mall, Durbar Marg, Kathmandu Western Union - Annapurna Travel &
Durbar Marg, Kathmandu
Tours (P) Ltd
Jyoti Bikash Bank Ltd. Kamaladi, Kathmandu

INTERNATIONAL REMMITANCE PARTNER FOR NIC ASIA REMIT
S.N International Remittance Partners Product Name Remittance Receiving Countries
1 Asian Net Co., Ltd. OK Remit Japan
2 Lumbini Group Pty Ltd. Legal Remit Australia
New Zealand
3 Orbit Remit Limited. Orbit Remit Australia
United Kingdom
Australia
Austria
Belgium
Bulgaria
Canada
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Gibraltar
Greece
Hong Kong
Hungary
Iceland
Ireland
Italy
Japan
4 World Remit Ltd. World Remit
Latvia
Lithuania
Luxembourg
Malta
Netherlands
New Zealand
Norway
Poland
Portugal
Romania
Saudi Arabia
Singapore
Slovakia
Slovenia
Somaliland
South Africa
Spain
Sweden
Switzerland
United Kingdom
United States
5 Kantipur Pty Ltd NIC ASIA Remit Australia
6 Axis Bank Limited Remit Money India
7 Al Muqren Exchange NIC ASIA Remit UAE

BANK’S BRANCHES AND ATMs THROUGH THE YEARS
2018-19
Branches: 292
ATMs: 302
2016-17
Branches: 119 2017-18
ATMs: 70 Branches: 231
ATMs: 220
FUTURE PROSPECTIVE
2015-16
For 2019-20, the Bank aims to open 20 new branches primarily
Branches: 67
ATMs: 69 focusing the remote area of the nation.
To operate 500 ATMs as on end of 2019-20 by opening 198 new

ATMs during the year.
Land Acquisition and Construction Committee is given

responsibility to conduct feasibility study to acquire land or
building or to construct building at Surkhet and Bagbazar,
Kathmandu.
Construction of Bank’s building is at full fledge in Birgunj and

Kamladi, Kathmandu and will be brought into use soon.

PROVINCE WISE BRANCH DETAIL
PROVINCE 1
Branch Name District Local Bodies Ward Branch Name District Local Bodies Ward
Damak Jhapa Damak Municipality 8 Fungling Taplejung Phungling Municipality 5

Gaighat Udayapur Triyuga Municipality 11 Diktel Khotang Rupakot Majhuwagadhi Municipality 1
Biratnagar Morang Biratnagar Metropolitian City 3 Salleri Solukhumbu Solu Dhudhakunda Municipality 5
Itahari Sunsari Itahari Sub-Metropolitian City 1
Ilam Ilam Ilam Municipality 1
Birtamod Jhapa Birtamod Municipality 7 PROVINCE 2
Purwanchal Campus Sunsari Dharan Sub-Metropolitian City 8
Branch Name District Local Bodies Ward
Dharan Main Sunsari Dharan Sub-Metropolitian City 10
Janakpur Dhanusa Janakpur Sub-Metropolitian City 6
Biratchowk Morang Sundarharaicha Municipality 3
Lahan Siraha Lahan Municipality 6
Chandragadi Jhapa Bhadrapur Municipality 6
Malangawa Sarlahi Malangawa Municipality 8
Urlabari Morang Urlabari Municipality 7
Hariwon Sarlahi Hariwan Municipality 9
Puspalal Chowk Morang Budhiganga Rural Municipality 1
Gaur Rautahat Gaur Municipality 7
Budhabare Jhapa Jhapa Rural Municipality 6
Siraha Siraha Siraha Municipality 4
Gauradaha Jhapa Gauradaha Municipality 3
Birgunj Parsa Birgunj Metropolitian City 13
Hile Dhankuta Dhankuta Municipality 1
Kalaiya Bara Kalaiya Sub-Metropolitian City 7
Jhumka Sunsari Ramdhuni Municipality 5
Mirchaiya Siraha Mirchaiya Municipality 4
Duhabi Sunsari Duhabi Municipality 3
Jeetpur Bara Jitpur Simara Sub-Metropolitian City 7
Bhojpur Bhojpur Bhojpur Municipality 7
Chandranigahapur Rautahat Chandrapur Municipality 4
Okhaldhunga Okhaldhunga Siddhicharan Municipality 12
Tinkauriya Dhanusa Bideha Municipality 7
Dhulabari Jhapa Mechinagar Municipality 1
Naraha Siraha Naraha Rural Municipality 6
Kerabari Morang Kerabari Rural Municipality 10
Loharpatti Mahottari Loharpatti Municipality 6
Jhiljhile Jhapa Shivasatakshi Municipality 1
Kabilasi Sarlahi Kabilashi Municipality 8
Kakarvitta Jhapa Mechinagar Municipality 6
Haripurwa Sarlahi Haripurwa Municipality 5
Tarahara Sunsari Itahari Sub-Metropolitian City 20
Bankul Bazar Rautahat Boudhimai Municipality 7
Ramailo Morang Kanepokhari Rural Municipality 6
Samsi Mahottari Samsi Rural Municipality 4
Jhapa Bazar Jhapa Jhapa Rural Municipality 2
Bhagwanpur Siraha Bhagawanpur Rural Municipality 4
Kachankawal Jhapa Kachanakawal Rural Municipality 6
Langadi Parsa Dhobini Rural Municipality 4
Sanischare Jhapa Arjundhara Municipality 8
Mahadewa Saptari Mahadewa Rural Municipality 6
Baliya Morang Sundarharaicha Municipality 5
Tiruhat Saptari Tirahut Rural Municipality 1
Belbari Morang Belbari Municipality 3
Saghara Dhanusa Kamala Municipality 4
Letang Morang Letang Municipality 4
Rajbiraj Saptari Rajbiraj Municipality 8
Biratnagar Main Road Morang Biratnagar Metropolitian City 7
Golbazar Siraha Golbazar Municipality 4
Charpane Jhapa Birtamod Municipality 2
Chakraghatta Sarlahi Chakraghatta Rural Municipality 3
Surunga Jhapa Kankai Municipality 3
Simara Bhawanipur Rautahat Gujara Municipality 9
Dingla Bhojpur Shadananda Municipality 4
Barathawa Sarlahi Barahathawa Municipality 5
Gaurigunj Jhapa Gauriganj Rural Municipality 3
Bagmati Sarlahi Bagmati Municipality 12
Baikunthe Bhojpur Ramprasad Rai Rural Municipality 6
Lalbandi Sarlahi Lalbandi Municipality 7
Manebhanjyang Sankhuwasabha Khandabari Municipality 3
Viswa Parsa Chhipaharmai Rural Municipality 5
Myanglung Terhathum Myanglung Municipality 1
Garuda Rautahat Garuda Municipality 8
Falgunanda Chowk Jhapa Damak Municipality 1
Jagarnathpur Parsa Jagarnathpur Rural Municipality 4
Inaruwa Sunsari Inaruwa Municipality 2
Mahendranagar Dhanusa Chhireshwornath Municipality 5
Prakashpur Sunsari Baraha Municipality 10
Nijgadh Bara Nijagadh Municipality 8
Roadcess Chowk Morang Biratnagar Metropolitian City 9
Fattepur Saptari Saptakoshi Municipality 1
Rani Mills Area Morang Biratnagar Metropolitian City 15
Gaushala Mahottari Gaushala Municipality 5
Dhankuta Dhankuta Dhankuta Municipality 7
Bailbas Sarlahi Ishworpur Municipality 6
Damak Chowk Jhapa Damak Municipality 5
Pidari Chowk Dhanusa Janakpur Sub-Metropolitian City 8
Pachruki Sunsari Itahari Sub-Metropolitian City 5
Pheta Bara Pheta Rural Municipality 3
Haat Khola Morang Biratnagar Metropolitian City 7
Linkroad Parsa Birgunj Metropolitian City 8
Buddhachowk Sunsari Dharan Sub-Metropolitian City 18
Powerhouse Chowk Parsa Birgunj Metropolitian City 17
Katari Udayapur Katari Municipality 4
Bardibas Mahottari Bardibas Municipality 1
Birta Bazar Jhapa Birtamod Municipality 3
Phidim Panchthar Phidim Municipality 1
Pathari Morang Pathari Shanishchare Municipality 1
BAGMATI PROVINCE
New Road, Bishal Bazar Kathmandu Kathmandu Metropolitian City 7 Mahadevbesi Dhading Thakre Rural Municipality 6
Kamaladi Kathmandu Kathmandu Metropolitan City 11 Dharke Dhading Dhunibenshi Municipality 6
Pulchowk Lalitpur Lalitpur Metropolitan City 8 Khadichaur Sindhupalchok Balephi Rural Municipality 7
Kirtipur Kathmandu Kirtipur Municipality 5 Betrawati Nuwakot Bidur Municipality 10
Satdobato Lalitpur Lalitpur Metropolitan City 5 Galchhi Dhading Galchhi Rural Municipality 7
Teku Kathmandu Kathmandu Metropolitan City 6 Koteshwor Kathmandu Kathmandu Metropolitan City 30
Pepsicola Kathmandu Kathmandu Metropolitan City 28 Chabahil Kathmandu Kathmandu Metropolitan City 7
Thankot Kathmandu Chandragiri Municipality 8 Sorhakhutte Kathmandu Kathmandu Metropolitan City 16
Thamel Kathmandu Kathmandu Metropolitan City 29 Sauraha Chitawan Ratnanagar Municipality 6
Baneshwor Kathmandu Kathmandu Metropolitan City 8 Chanauli Chitawan Bharatpur Metropolitan City 18
Bouddha Kathmandu Kathmandu Metropolitan City 6 Baseni Chitawan Bharatpur Metropolitan City 11
Tripureswore Kathmandu Kathmandu Metropolitan City Bhaisepati Lalitpur Lalitpur Metropolitan City 18
Jawalakhel Lalitpur Lalitpur Metropolitan City 10 Sankhamul Kathmandu Kathmandu Metropolitan City 29
Newroad Kathmandu Kathmandu Metropolitan City 22 Bhotahiti Kathmandu Kathmandu Metropolitan City 27
Banepa Kavrepalanchok Banepa Municipality 7 Baluwatar Kathmandu Kathmandu Metropolitan City 4
Bhaktapur Bhaktapur Bhaktapur Municipality 2 Gongabu Kathmandu Kathmandu Metropolitan City 26
Kalanki Kathmandu Kathmandu Metropolitan City 10 Sinamangal Kathmandu Kathmandu Metropolitan City 24
Chhetrapati Kathmandu Kathmandu Metropolitan City 3 Kuleshwor Kathmandu Kathmandu Metropolitan City 14
Maharajgunj Kathmandu Kathmandu Metropolitan City 6 Kilagal Kathmandu Kathmandu Metropolitan City 18
Narayangarh Chitawan Bharatpur Metropolitan City 4 Battar Nuwakot Bidur Municipality 3
Samakhushi Kathmandu Kathmandu Metropolitan City 29 Tandi Chitawan Ratnanagar Municipality 1
Bagbazar Kathmandu Kathmandu Metropolitan City 30 Hakim Chowk Chitawan Bharatpur Metropolitan City 10
Kaushaltar Bhaktapur Madhyapur Thimi Municipality 7 Thulo Bharyang Kathmandu Nagarjun Municipality 3
Gwarko Lalitpur Lalitpur Metropolitan City 6 Kadaghari Kathmandu Kageshwori Manahara Municipality 9
Khumaltar Lalitpur Lalitpur Metropolitan City 5 Ramkot Kathmandu Nagarjun Municipality 6
Sukedhara Kathmandu Kathmandu Metropolitan City 4 Radhe Radhe Bhaktapur Madhyapur Thimi Municipality 5
Dillibazar Kathmandu Kathmandu Metropolitan City 30 Baniyatar Kathmandu Tokha Municipality 8
Balaju Kathmandu Kathmandu Metropolitan City 7 Manthali Ramechhap Manthali Municipality 1
Kapan Kathmandu Kathmandu Metropolitan City 9 Chapagaun Lalitpur Lalitpur Metropolitan City 1
Golfutar Kathmandu Budhanilkhantha Municipality 7 Bhandara Chitawan Rapti Municipality 5
Lazimpat Kathmandu Kathmandu Metropolitan City 10 Syafrubesi Rasuwa Naukunda Rural Municipality 1
Hetauda Makwanpur Hetauda Sub-Metropolitan City 3 Battisputali Kathmandu Kathmandu Metropolitan City 12
Parsa Chitawan Khairahani Municipality 8 Anamnagar Kathmandu Kathmandu Metropolitan City 29
Charikot Dolakha Bhimeshwor Municipality 3 Corporate Office Branch Kathmandu Kathmandu Metropolitan City 12
Sindhuli Sindhuli Kamalamai Municipality 6
Dhading Besi Dhading Nilkhantha Municipality 3
Bhimphedi Makwanpur Bhimphedi Rural Municipality 6
GANDAKI PROVINCE
Gothatar Kathmandu Kageshwori Manahara Municipality 8 Branch Name District Local Bodies Ward
Tokha Kathmandu Tokha Municipality 6 Pokhara Kaski Pokhara Lekhnath Metropolitan City 7
Khanikhola Dhading Dhunibenshi Municipality 7 Damauli Tanahu Byas Municipality 10
Geetanagar Chitawan Bharatpur Metropolitan City 6 Waling Syangja Walling Municipality 3
Manamaiju Kathmandu Tarakeshwor Municipality 11 Lekhnath Kaski Pokhara Lekhnath Metropolitan City 7
Sitapaila Kathmandu Nagarjun Municipality 4 Baglung Baglung Baglung Municipality 2
Thali Kathmandu Kageshwori Manahara Municipality 5 Daldale Nawalparasi East Devchuli Municipality 13
Panchkhal Kavrepalanchok Panchkhal Municipality 7 Birauta Kaski Pokhara Lekhnath Metropolitan City 17
Satungal Kathmandu Chandragiri Municipality 16 Kawasoti Nawalparasi East Kawasoti Municipality 8
Trishuli Nuwakot Bidur Municipality 1 New Road Pokhara Kaski Pokhara Lekhnath Metropolitan City 8
Duwakot Bhaktapur Changunarayan Municipality 2 Lakeside, Pokhara Kaski Pokhara Lekhnath Metropolitan City 6
Balkot Bhaktapur Suryabinayak Municipality 2 Bhimad Tanahu Bhimad Municipality 6
Purano Thimi Bhaktapur Madhyapur Thimi Municipality 6 Nayapool Kaski Annapurna Rural Municipality 5
Dhulikhel Kavrepalanchok Dhulikhel Municipality 6 Beshisahar Lamjung Bensi Shahar Municipality 7
Manahari Makwanpur Manahari Rural Municipality 7 Aabukharieni Tanahu Aanbu Khaireni Rural Municipality 3
Gajuri Dhading Gajuri Rural Municipality 1 Gorkha Gorkha Gorkha Municipality 6
Amrapuri Nawalparasi East Gaidakot Municipality 15 Pakadi Kapilbastu Mayadevi Rural Municipality 1
Dumkibas Nawalparasi East Binayi Tribeni Rural Municipality 1 Taulihawa Kapilbastu Kapilbastu Municipality 1
Arunkhola Nawalparasi East Binayi Tribeni Rural Municipality 10 Majhgawa Rupandehi Kotahimai Rural Municipality 5
Naudanda Kaski Annapurna Rural Municipality 1 Tamghas Gulmi Resunga Municipality 1
Waribeni Parbat Jaljala Rural Municipality 3 Lumbini Rupandehi Lumbini Sanskritik Municipality 7
Gaidakot Nawalparasi East Gaidakot Municipality 4 Jangrawa Dang Rajpur Rural Municipality 5
Dumre Tanahu Bandipur Rural Municipality 1 Samjhana Chowk Banke Baijanath Rural Municipality 5
Krishi Syangja Aandhikhola Rural Municipality 5 Milan Chowk Banke Duduwa Rural Municipality 5
Bajhapatan Kaski Pokhara Lekhnath Metropolitan City 13 Piprahawa Chowk Banke Janaki Rural Municipality 6
Budhibazar Kaski Pokhara Lekhnath Metropolitan City 26 Shisahaniya Dang Rapti Rural Municipality 5
Powerhouse Chowk Kaski Pokhara Lekhnath Metropolitan City 29 Chandrauta Kapilbastu Shivaraj Municipality 5
Parsyang Kaski Pokhara Lekhnath Metropolitan City 5 Sunwal Nawalparasi West Sunawal Municipality 1
Bagar Kaski Pokhara Lekhnath Metropolitan City 1 Belbas Rupandehi Butwal Sub-Metropolitan City 13
Amarsingh Chowk Kaski Pokhara Lekhnath Metropolitan City 10 Devinagar Rupandehi Butwal Sub-Metropolitan City 11
Kushma Parbat Kushma Municipality 4 Ghorahi Dang Ghorahi Sub-Metropolitan City 15
Dulegauda Tanahu Shuklagandaki Municipality 4 Sau Pharsatikar Rupandehi Suddhodhan Rural Municipality 4
Saljhandi Rupandehi Sainamaina Municipality 10
Rukumkot Rukum East Sisne Rural Municipality 6
PROVINCE 5 Liwang Rolpa Rolpa Municipality 4
Arghakhanchi Arghakhanchi Sandhikharka Municipality 6 KARNALI PROVINCE

Butwal Rupandehi Butwal Sub-Metropolitan City 6
Nepalgunj Banke Nepalganj Sub-Metropolitan City 16
Surkhet Surkhet Birendranagar Municipality 5
Kohalpur Banke Kohalpur Municipality 3
Mugu Mugu Chhayanath Rara Municipality 2
Bhairahawa Rupandehi Siddharthanagar Municipality 12
Jajarkot Jajarkot Bheri Malika Municipality 4
Tulsipur Dang Tulsipur Sub-Metropolitan City 4
Rukum Rukum West Musikot Municipality 5
Bardaghat Nawalparasi West Bardaghat Municipality 4
Jumla Jumla Chandannath Municipality 7
Tansen Palpa Tansen Municipality 4
Kalikot Surkhet Bheriganga Municipality 5
Dhakdhahi Rupandehi Rohini Rural Municipality 2
Srinagar Salyan Sharada Municipality 1
Bhumahi Nawalparasi West Sunawal Municipality 12
Dailekh Dailekh Narayan Municipality 1
Bansgadhi Bardiya Bansgadhi Municipality 5
Manigram Rupandehi Tilottama Municipality 4
Rudrapur Rupandehi Kanchan Rural Municipality 3
SUDURPASCHIM PROVINCE
Khajura Banke Khajura Rural Municipality 1
Magragadhi Bardiya Barbardiya Municipality 6 Branch Name District Local Bodies Ward
Kotihawa Rupandehi Tilottama Municipality 15 Dhangadi Chauraha Kailali Dhangadhi Sub-Metropolitan City 3
Jumri Pyuthan Pyuthan Municipality 4 Mahendranagar Kanchanpur Bhimdatta Municipality 4
Bhalwadi Rupandehi Tilottama Municipality 7 Dhangadhi Kailali Dhangadhi Sub-Metropolitan City 5
Shankapur Rupandehi Devdaha Municipality 12 Attariya Kailali Godawari Municipality 2
Buddhachowk Rupandehi Siddharthanagar Municipality 8 Lamki Kailali Lamki Chuha Municipality 4
Gopigunj Nawalparasi West Pratapapur Rural Municipality 2 Tikapur Kailali Tikapur Municipality 1
Khaireni Rupandehi Devdaha Municipality 7 Bauniya Kailali Bardagoriya Rural Municipality 2
Jitpur 4 Kapilbastu Banganga Municipality 1 Bajhang Bajhang Jayaprithbi Municipality 10
Imiliya Kapilbastu Buddhabhumi Municipality 9 Bajura Bajura Badimalika Municipality 8
Manigram 4 Rupandehi Tilottama Municipality 8 Joshipur Kailali Joshipur Rural Municipality 2
Lamahi Dang Lamahi Municipality 2 Darchula Darchula Mahakali Municipality 4
Murgiya Rupandehi Sainamaina Municipality 3 Pahalmanpur Kailali Ghodaghodi Municipality 10
Driver Tole Rupandehi Tilottama Municipality 3 Dipayal Doti Dipayal Silgadhi Municipality 4
Bhurigaun Bardiya Thakurbaba Municipality 1 Bedkot Kanchanpur Bedkot Municipality 3
Rajmarga Chauraha Rupandehi Butwal Sub-Metropolitan City 9 Dadeldhura Dadeldhura Amargadhi Municipality 5
Ram Mandir Rupandehi Butwal Sub-Metropolitan City 4 Punarbas Kanchanpur Punarbas Municipality 3
Tribhuwan Chowk Banke Nepalganj Sub-Metropolitan City 8 Sanfebagar Achham Sanphebagar Municipality 3
Parasi Nawalparasi West Ramgram Municipality 5 Patan Baitadi Patam Municipality 6
Labani Kapilbastu Suddhodhan Rural Municipality 3 Dodhara Chandani Kanchanpur Mahakali Municipality 6
22nd ANNUAL REPORT
TRANSFORMATIONAL JOURNEY 2018/19
(Nepal) A-
ICRA
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NOTICE OF

22ND ANNUAL GENERAL MEETING

Following agendas will be discussed at the Annual General Meeting:

ANNUAL REPORT 2018/19 1

STRATEGIC EMPLOYEE CUSTOMER

2 ANNUAL REPORT 2018/19

Transparency : We conduct our

Professionalism : We build the

Team Spirit : We NIC ASIAN have the

Service Excellance : We drive a

ANNUAL REPORT 2018/19 3

1.17 21st AGM in Pictures 82 3.10 Anti Money Laundering and

6.1 Independent Auditor’s Report 224

ANNUAL REPORT 2018/19 5

2014/15 2015/16 2016/17 2017/18 2018/19

TOTAL LOANS AND ADVANCES

2014/15 2015/16 2016/17 2017/18 2018/19

6 ANNUAL REPORT 2018/19

2014/15 2015/16 2016/17 2017/18 2018/19

TOTAL NUMBER OF SHARES

2014/15 2015/16 2016/17 2017/18 2018/19

ANNUAL REPORT 2018/19 7

2014/15 2015/16 2016/17 2017/18 2018/19

TOTAL OPERATING INCOME

2014/15 2015/16 2016/17 2017/18 2018/19

8 ANNUAL REPORT 2018/19

2014/15 2015/16 2016/17 2017/18 2018/19

EARNING PER SHARE

2014/15 2015/16 2016/17 2017/18 2018/19

ANNUAL REPORT 2018/19 9

2014/15 2015/16 2016/17 2017/18 2018/19

CAPITAL ADEQUACY RATIO (%)

2014/15 2015/16 2016/17 2017/18 2018/19

10 ANNUAL REPORT 2018/19

2014/15 2015/16 2016/17 2017/18 2018/19

RETURN ON EQUITY (%)

2014/15 2015/16 2016/17 2017/18 2018/19

ANNUAL REPORT 2018/19 11

2014/15 2015/16 2016/17 2017/18 2018/19

MARKET PRICE PER SHARE

2014/15 2015/16 2016/17 2017/18 2018/19

12 ANNUAL REPORT 2018/19

Non Operating Income

1.58% Net Trading Income

AMOUNT SPENT AND RETAINED - FY 2018/19

Non Operating Expense Profit for the Period

ANNUAL REPORT 2018/19 13

ANNUAL REPORT 2018/19

Placement with BFIs

Other Assets 0.99%

Deferred Tax Liabilities

Current Tax Liabilities Share Capital

ANNUAL REPORT 2018/19

Total Number of Number of Number of

16 ANNUAL REPORT 2018/19

NPR 11.7Million 38,447

[ICRA NP-IR] A- NIC ASIA Laghubitta Bittiya

System-Core Number of Number of

18 ANNUAL REPORT 2018/19