Report0607 63 64

YOUR BANK @ YOUR SERVICE

ANNUAL REPORT 2006/07
www.nabilbank.com
23 rdANNUAL REPORT 2006/07
NABIL BANK Annual Report 2006/07 2
CONTENTS
About Nabil Bank 3 Human Resource 31 Profit & Loss Account 45

Directors’ Report 5 Corporate Social Responsibility 33 Profit & Loss Appropriation Account 46
Message from the CEO 20 Products and Services 35 Statement of Changes in Equity 47
Risk Management 25 Auditor’s Report 43 Cash Flow Statement 48
Corporate Governance: Our Way of Life 29 Balance Sheet 44 Schedules 49
3 NABIL BANK Annual Report 2006/07
ABOUT NABIL BANK
The 1st Joint Venture Bank in Nepal with a 23 Year History

Nabil Bank, the 1st foreign joint venture Bank set up in the nation with an objective to introduce modern banking services,
commenced its operations on 12th of July 1984 with Rs. 28 million capital and around 50 staff. Dubai Bank Limited, Dubai
was the foreign joint venture partner who extended Nabil a technical service agreement in the initial period.
The Bank, through its quality customer service and innovative products, has today attained a distinguished recognition in
the banking industry of Nepal. The figures in the table below enumerate its 23 year old journey:
Figures in NPR Millions

Mid July
1989 1994 1999 2004 2007

5th Year 10th Year 15th Year 20th Year 23rd Year
Networth 78 323 879 1,482 2,057
Deposits 779 4,408 9,464 14,119 23,342
Loans 362 2,388 5,789 8,549 15,903
Investments 297 1,911 4,634 6,755 9,520
Profit after Tax 25 114 266 455 674
Total Assets 964 5,445 12,430 16,745 27,253
Non-Performing Loans: Total Loans (%) 3.4 7.0 11.2 3.3 1.1
Provision held: Non-Performing Loans (%) 85 50 55 125 200
Capital Adequacy Ratio (%) 10 10 13 13 12
Return on Equity (%) 48.6 48.6 30.7 34.7 35.9
Return on Assets (%) 2.7 2.2 2.2 2.7 2.7
Number of Outlets 6 9 15 17 18
Number of ATMs - - - 5 17
(By 18 December 2007, number of outlets and ATMs reached 28 and 31 respectively)
Today Nabil stands in a position to claim that it is the technological front, the Bank has earned a reputation in
"Bank of 1st Choice" to all its stakeholders. In the span providing an array of card products and Internet /
of 23 years, it has already distributed Rs. 2.86 billion Telebanking facilities besides ATMs and Any Branch
cash dividend and the wealth of the shareholders of Banking Service.
the Bank grew to Rs. 24.8 billion as at mid July 2007.
Spectacular return on assets and return on equity even The statement 'Your Bank at Your Service' that the Bank
during a turbulent and competitive time highlight the holds on firmly is a resemblance that the Bank's
inherent strength of the Bank. stakeholders are at the core of everything it does. As for
the culture embraced by the entire Nabil team, a set of
The Bank provides a complete range of consumer, retail, Values, referred to as 'C.R.I.S.P.' in short, represents the
SME and corporate banking services through its offices fact that the bank uninterruptedly strives to be
spread across the country. Nabil is the sole banker to a Customer Focused, Result Oriented, Innovative,
multitude of large corporates, international aid agencies, Synergistic and Professional. By living these Values,
NGOs and embassies. It is the largest private bank in the individually as professionals and collectively as a Team,
country in terms of branch and ATM network. All its Nabil Bank is committed to Surge Ahead to continue to
branches are interconnected on real time basis. On the be the Bank of 1st Choice in Nepal.
Mr. Satyandra Pyara Shrestha

Chairman
Representative of group ‘A’ shareholders

Former Governor, Nepal Rastra Bank, the Central
Bank of Nepal
Former Advisor - South East Asian Executive
Director’s Office, IMF, USA.
DIRECTORS’ REPORT
FY 2006/07
Ladies and Gentlemen, Total imports during the year increased by 10.3% to
It gives me an immense pleasure to welcome you all Rs. 191.7 billion. Imports from India and other
to the 23rd Annual General Meeting of the Bank and countries rose by 9.9% to Rs.117.7 billion and by 11%
to present the Directors' Report of FY 2006/07 to Rs. 74 billion respectively. Major import items from
together with audited financial statements of FY India recording growth are vehicles and spare parts,
2006/07 for your approval. I consider it my privilege threads, electrical equipment, other machinery and
to be addressing this august gathering and sharing parts, hot/cold rolled sheet in coil, MS billet, cement
the Board's views on the banking scenario together and medicine. Number one import item petroleum
with highlights on your Bank's performance. products (total import volume Rs. 33.5 billion) is
however at last year's level. Major import items
To begin with, I would like to present in brief the recording negative growth are rice, chemicals and
macro economic situation of the country during the textiles. Major import items from other countries
period under review. recording growth are gold, crude soybean oil,
electrical goods, zinc ingot, transport equipments/
Gross Domestic Product (GDP) parts, telecommunication equipments/parts,
Despite an impressive growth rate of South Asia computer parts, aircraft spareparts, betelnuts,
region, our neighbours in particular, our GDP medicines and textile dyes. Major import items
recorded an estimated growth of 2.5% only in FY recording negative growth are other machinery and
2006/07. This is mainly due to conflict between parts, readymade garments, copper wire/rod/scraps,
labour-management in many industries, continuous polythene granules and textiles.
long bandhs, strikes, irregular supply of petroleum
products, shortage of electricity and drought Due to continuous rise in trade with India, India's
adversely impacting paddy production. share in total trade has increased to 63.2% in FY 2006/
07 which was 55.9% in FY 2002/03. Higher growth rate
Foreign Trade of import compared to export has widened the trade
Total foreign trade of the country reached Rs. 252.5 deficit to Rs.130.9 billion this year against Rs.113.5
billion in 2006/07, growth of 7.9% over the previous billion of last year.
year.
Balance of Payment
Total exports increased by 0.9% to Rs. 60.8 billion. BOP posted a surplus of Rs. 5.88 billion in the review
Export to India increased by 2.8% while export to year in comparison to a higher surplus of Rs. 25.6
other countries decreased by 3.1%. Major export billion in the previous year. Major reason for lower
items to India recording growth are vegetable ghee, BOP surplus this year is just 2.5% increase in workers'
textiles, thread, zinc sheet, wire, ginger, juice and jute remittance which was 49% last year. As a result,
goods, while export of polyster yarn, plastic utensils, foreign exchange reserves of the country is Rs.165
readymade garments went down. All major export billion as at mid-July 2007, similar to last year's level
items to third countries have recorded negative due to appreciation of rupees against USD. The
growth this year. Export of carpet, readymade current reserve is sufficient to cover merchandise
garments and pashmina declined by 4.1%, 16.1% and imports of 10.3 months and merchandise and service
41% respectively. imports of 8.5 months.
Price Index Performance of the Bank in FY 2006/07

The annual average inflation during the year 2006/ The year 2006/07 continues to be one of the best
07 registered a rise of 6.4% compared to 8% in the years for Nabil Bank Limited with 36% return on
previous year as measured by National Urban capital employed despite the government increasing
Consumer Price Index. The deceleration in the effective tax rate to 31.5% this year from 29.5% of last
growth of non-food and services group index was year. The Bank has recorded a Profit after Tax of Rs.
largely on account of the base effect of the hike in 674 million this year. The following figures give a
prices of petroleum products in March 2006. glimpse on how the Bank performed this year vis-à-
Similarly, appreciation of rupees against USD is vis last year:
another key factor for moderating the overall price
level in 2006/07.
Source: Nepal Rastra Bank Publications

As at Mid July Growth
2007 2006 Volume %
Net Worth 2,057.0 1,875.0 182.1 9.7

Deposits 23,342.3 19,347.4 3,994.9 20.6
Gross Loans, Advances & Bills Purchases 15,903.0 13,278.8 2,624.2 19.8
Gross Investments Including Money at Call & Short Notice 9,519.8 7,915.6 1,604.3 20.3

Fiscal Year Growth
2006/07 2005/06 Volume %
Interest Income 1,587.8 1,310.0 277.8 21.2

Interest Expenses 555.7 357.2 198.5 55.6
Net Interest Income 1,032.0 952.8 79.2 8.3
Forex Income 209.9 185.5 24.4 13.2
Fee & Others 238.2 221.2 17.0 7.7
Staff Expenses 240.2 219.8 20.4 9.3
Other Operating Expenses 188.2 182.7 5.5 3.0
Operating Profit 1,051.8 957.0 94.8 9.9
Non Operating Income/(Expenses) 5.3 0.7 4.5 618.1
Recovery from Written Off Loan Accounts 43.6 73.6 (30.0) (40.7)
Provision/Book Write Off 6.1 43.5 (37.4) (85.9)
Profit after Provision 1,094.6 987.8 106.7 10.8
Staff Bonus 99.5 89.8 9.7 10.8
Corporate Tax 321.1 262.7 58.3 22.2
Net Profit after Tax 674.0 635.3 38.7 6.1
MR. SUPRIYA GUPTA MR. SHAMBHU PRASHAD MR. DAYARAM GOPAL

Director POUDYAL AGRAWAL
Representative of group ‘A’ Director Director
shareholders Representative of group ‘C’ Representative of group ‘C’
shareholders shareholders
Fmr. Chairman and Managing
Director, UTI Bank Limited, Fmr. Executive Chairman, Engaged in Business for last
India Rastriya Beema Sansthan two decades.
Fmr. Dy. Managing Director, Fmr. Chairman, Nepal
State Bank of India, India Housing and Development
Fmr. Managing Director, State Finance Co Ltd
Bank of Bikaner & Jaipur, Fmr. Vice President, Nepal
India Mountaineering Association,
Ktm. Branch
Fmr. Chairman, Nepal
Tuberculosis Association,
Ktm. Branch
Fmr. Executive Member,
Nepal Family Planning
Association, Ktm. Branch
Member, Board of Directors,
Unilever Company Limited,
Nepal
MR. MILAN BIKRAM SHAH MR. ACHYUT PRASAD MR. TABITH AWAL MR. MOHIUDDIN AHMED
Director BAJAGAIN Director Director
Representative of group ‘B’ Professional Director Representative of group 'A' Representative of group 'A'
shareholders shareholders shareholders
Fmr. Chief Currency Officer
General Manager & CEO, of Nepal Rastra Bank Deputy Chief Executive Fmr. Bangladeshi
Nepal Industrial Officer of Multimode Group, Ambassador to Nepal.,
Development Corporation, Bangladesh . Senegal, Sierra Leone, Ghana
Nepal Managing Director of Kay & & Gambia.
Fmr. General Manager, Que (BD) Ltd . Fmr. Director of Janta Bank.
National Trading Limited, Currently director in many
Nepal (An undertaking of organizations engaged in
Nepal Govt) insurance, real estate,
Chairman of the Board, NIDC investment and production/
Capital Markets Limited, manufacturing business.
Nepal
Your Bank's net worth grew by 9.7% this year even In the review period, your Bank had a drive in
after distributing cash dividend of Rs. 492 million. The soliciting deposits which can be profitably invested.
Core capital of the Bank stood at Rs. 1.99 billion and The efforts in that direction have yielded good results
total capital fund (including Supplementary capital of which can be seen from the growth of 20.6% (Rs. 3.99
Rs. 0.31 billion) stood at Rs. 2.31 billion as on 16 July billion). The Bank increased scarce interest free
2007. The capital adequacy ratio of 10.40% (Core deposits by almost half a billion rupees. Similarly, the
capital) and 12.04% (Total capital) exceeded the Bank recorded a growth of almost one and half billion
statutory requirement by 4.9% and 1.04% respectively. rupees in savings deposit. This growth was possible
These ratios indicate Bank's sound financial position. through attractive special savings scheme 'Nabil
Bachat'. High Fed Rate and relatively higher mix of Call
Following graph gives a trend of the Bank's capital and Fixed deposits however pushed the cost of
over past 5 years: deposits to 2.5% this year from 2.05% of previous year.
I take immense pleasure in informing you that the The Bank grew its gross loans by Rs. 2.62 billion to Rs.
market price of the Bank's share continued to rise this 15.90 billion. The Bank continued cautious expansion
year as well. As at 16 July 2007, the market price per of both business and personal loans. Mix of relatively
share reached Rs. 5,050. It is currently trading at lower risky and diversified personal loans has
around Rs. 6,000. We however feel that market reached around 25% in total loan portfolio. With the
expectation is on the higher side. due diligence that your Bank exercises while
extending new and additional loans and the efforts it
applies in recovery of non-performing loans, your
bank was able to reduce non-performing loans (NPL)
volume to Rs.178 million as at 16 July 2007. NPL to
total loans ratio has thus decreased to 1.12% as at 16
July 2007 from 1.38% of corresponding period last
year. Total provision held as of that date, Rs.357
million is 200% of NPL indicating a comfortable
cushion against non-performing assets.
Tremendous market pressure on lending rates has Foreign exchange income increased by 13.2% this year
caused decline in the Bank's yield on loans and due mainly to contribution from 13% appreciation of LCY
advances to 7.90% from 8.19%. against USD during the year. Fierce competition in the
banking has however continuously narrowed the forex
Investment volume increased by Rs 1.6 billion this spread. Fee & Other Income increased by 7.7% in
year. As a result of high Fed rate and investment in aggregate mainly due to retail business and introduction
high yielding instruments, yield of FCY investments of new sources of fee income. Staff expense increased by
this year improved to 5.27% from 4.39% of last year. 9.3% owing to salary increment at certain levels, rise in
However, low yield of Tbills and maturity of high gratuity expense due mainly to salary increment and
yielding government bonds caused decline in LCY more investment in staff training. Despite high growth
investments yield to 4.08% this year from 5.29% of of business volume, the other office operating expenses
last year. In aggregate, yield of investment has increased by 3% only during the review period. Today,
marginally improved to 4.79% during the review your Bank has the lowest amount of other operating
period from 4.75% of last year. Overall yield on expenses in the peer group.
interest earning assets however declined to 6.75%
this year from 6.95% of previous year due to The Bank, through its continued efforts, has been
decline on yield of loan which has almost 2/3rd able to recover Rs. 43.6 million from the book written
share in total earning assets. Rise in cost of off accounts. The NPA Management Cell exclusively
deposits and decline in yield of earning assets established for recovery of graded and written off
further squeezed interest spread to 4.15% from accounts has been relentlessly putting in its
previous year's 4.90%. endeavors to achieve maximum recovery.
Despite squeezed interest spread, it is satisfying to There is 10.8% growth in the fund set aside for Staff
state that your Bank increased net interest income by Bonus. Corporate tax however records growth of 22%
Rs. 79.2 million this year through growth in business due mainly to the government increasing tax rate by
volume. Moreover, interest spread of your bank is still 2% to 31.5% and payment of Rs. 6.6 million for
the best in the peer group. settlement of prior years' disputed tax.
The Bank recorded profit after tax of Rs 674 million, Similarly, we propose 4 bonus shares for each 10
return on average assets 2.72% and return on equity shares held. It gives me immense pleasure to inform
36% in FY 2006/07. These ratios are above you that your Bank has declared cash dividend of Rs.
international standard and one of the highest in the 2.86 billion in 23 years of its operations. Looking at
domestic industry. the current market capitalization and cash dividend
distributed so far with the initial investment of just
Rs. 30 million, the Bank has significantly maximized
the wealth of its shareholders.
Office Network
Kamaladi branch was shifted to United World Trade
Centre, Tripureshwor to solicit more business.
Similarly, the Bank completed entire homework in
2006/07 for opening 9 branches from Mechi to
Mahakali. These branches will come into operations
soon. In FY 2006/07, new ATMs were installed at
Kalimati, Tripureshwor and Kantipath. Use of internet-
banking is also gradually growing.
In a nutshell, I feel we should be satisfied with the
overall performance of the Bank. Your Bank has
Technology
achieved a satisfactory growth in both the top line
The Bank firmly believes that the technology is a key
and bottom line at a time when the economy of the
enabler in enhancing our service standards. With this
country is almost stagnant and competition in the
in mind, your bank has constantly been striving to
banking sector is getting tougher.
excel in this front and has introduced and expanded
a number of IT based products. Today, your bank is
Dividend forerunner in IT based products.
The Bank earned Rs.137.08 per share (EPS) in FY 2006/
07. After appropriating adequate amount for various
Industrial and Business Relations
reserves, we propose a cash dividend of Rs. 100 per
The Bank would not have come to this stage had
share.
there not been a harmonious relations between the
employees and management. The Bank has always
made endeavours to further strengthen the relations.
There is a registered authorized staff union in the
Bank. The management and staff union are in
constant touch to achieve the common goal of
becoming the Bank of the 1st Choice.
Customer is the pivot around which our all activities

revolve. The Bank is thus driven by the philosophy of
giving paramount importance to its customers. The
Bank has introduced many products and has built a observations/decisions, Internal Audit Department
reputation of delivering the highest quality of reports directly to the Audit Committee, comprised of
professional services in a personalized manner. As a Board Members and not to the CEO. Additionally, CEO
result, the Bank has also been able to attract a large is not allowed to be a member of the Audit Committee.
number of customers from different strata. Nabil is Similarly, Compliance unit is headed by the Company
the sole banker to the multitude of International Aid Secretary of the Board.
Agencies, Embassies, NGOs, INGOs besides a host of
corporate and retail customers. We attribute our Progress Report of the
success to the patronage of the customers and Current Year and Future Outlook
pledge to improve further the customer service The Bank's key result for the first month (up to mid-
standard. Besides the healthy growth in all respects, August 2007) of the current year (FY 2007/08) is as
the Bank is diligently complying with the follows:
international norms of AML/KYC Policies.
AS AT MID AUGUST GROWTH
Corporate Social Responsibility
Nabil continues to pursue its philosophy of Corporate 2007 2006 %
Social Responsibility on three pillars; Health, Education Deposits 23,658 19,487 21.4
and Sport. In Health, it has partnership with the
Interest Bearing 19,881 16,224 22.5
Glaucoma Center at the Tilganga Eye Hospital to
Non Interest Bearing 3,778 3,263 15.8
increase overall knowledge about this blinding
Loans & Advances 16,284 13,806 18.0
disease. In Education, it has partnership with the Mary
Profit Before Bonus & Tax 123 90 37.0
Ward School to educate underprivileged children. And
in Sports, Nabil continues to give its shoulder to Nabil
Three Star Club to promote sportsmanship and Margin in interest, fee and foreign exchange income
healthy living in the country. is shrinking day by day due to ever increasing
competition. Number of banks and financial
Internal Control System institutions and their branches is constantly
Since banking business is exposed to basically credit, increasing despite very low growth rate of the
market and operational risks, it has been the policy of economy. The following statistics sheds light on the
the Bank to strengthen internal control system. The comparative number of banks and financial
Bank has put in place various policies, product papers institutions in the country:
and standard instruction manuals covering work of
almost all areas of its operations. To avoid the conflict
MID JULY 2003 MID JULY 2007
of interest, a clear demarcation has been drawn
Commercial Banks 17 20
between business generation and risk management
Development Banks 17 38
functions besides setting limits for managing all
Finance Companies 56 74
above risks. Similarly, Internal Audit Department and
Compliance Department are strengthened to ensure
compliance of all internal and external requirements. Furthermore, some banks and financial institutions
In order to ensure independent and unbiased are in pipeline.
The Bank is committed to solicit adequate and 27 July 2007. Similarly, Mr. A. P. Bazagain has been
attractive business opportunities to ensure better appointed as a professional director effective 9 July
achievements in the current year despite current 2007 in line with Bank and Financial Institutions Act
political and economic reality of the country is not 2006.
being encouraging.
I wish to place on record our appreciation of the
Future Programs contributions made by outgoing directors and
Major thrusts during FY 2007/08 will be in the welcome new directors.
following areas:
Increase interest free and savings deposits Acknowledgement
Increase quality personal and business loans The Board of Directors places on record its
Increase share of EXIM business appreciation for the continued support and
Increase Card and Remittance related incomes patronage of shareholders, customers and well
Control operating expenses wishers. The Board is thankful to Nepal Rastra Bank,
Increase recovery from written off accounts Government of Nepal and the Ministry of Finance for
Additional disclosures on the Bank as per the Company Act their support and guidance. Similarly, employees of
2006 have been given in Annex A. the Bank have put in hard work to deliver such a
good result. I take this opportunity to extend my
Board of Directors heartfelt thanks to all for their invaluable
After the last Annual General Meeting, there are few contributions.
changes in the Board of Directors. NBIL has
nominated Mr. Tabith Awal and Mr. Mohiuddin Ahmed On behalf of the Board
in place of Mr. A. Mintoo and Mr. Suraj Mehta effective Satyandra P. Shrestha, Chairman
ANNEX - A
Audit Committee
The Board of Directors of the Bank constituted an Audit
Committee on 18 February 2002 (2058.11.06 B.S.). Following 3
non-executive directors were in the Committee as on 16 July
2007:
Mr. Supriya Gupta - Convenor
Mr. A. Mintoo - Member
Mr. Milan Bikram Shah - Member
During the review period, Audit Committee had 17 meetings

for issues including the following:
Report on Past dues import loans for 12 months.
Status Report on Nostro Accounts for 12 months.
Shares owned by Directors Audit report on Business Banking of branches - 12 Reports.
Representative of NBIL (Group "A" Shareholder) Audit report on operations of branches - 12 Reports.
Mr. Satyandra Pyara Shrestha
Audit report on LC operations at Central Trade Operations
Mr. Supriya Gupta
(CTO) - 2 Reports.
Mr. Tabith Awal
Audit report on Personal Lending of branches - 8 Reports.
Mr. Mohiuddin Ahmed
Audit report on central accounts for the FY 2004/05 and FY
2005/06.
Representative of Financial Institutions (Group "B" Report on concurrent audit on LC issuance at CTO.
Shareholders)
Audit report on Card Division.
Mr. Milan Bikram Shah
Half yearly & yearly verification of cash and cash value items of
valley and outside valley branches (mid July 2006 and mid
Elected representative of Public
January 2007).
(Group "C" Shareholders)
Audit report on Treasury & Correspondent Banking.
Mr. Shambhu Prashad Poudyal -795 shares
Investigations & Inspections:
Mr. Daya Ram Gopal Agrawal - 473 shares
Memorandum dated 21.05.2007 on Investigation at CTO - KP.
Memorandum dated 26.06.2007 on Mandatory Business
Shares bought back or forfeited by the Bank Credibility Information Report on the beneficiary of the L/C.
during the review period - None
Review of compliances and branch responses on audit reports.
Directors' and their relatives' interest in any
Review and discussion on NRB Onsite Inspection Report.
contract with the Bank - None Review and discussion on Preliminary Statutory Audit Report
Dues from Directors/CEO and their firms - None
along with Management response and Annual Financial
Statement of the Bank.
Board of Director's response on Audit Report Others:-
Auditor's Report reveals, by and large, a satisfactory
Discussion with the Statutory Auditors on adequacy of
position. The Management has been advised to follow
Provisioning for the Bank's Financial Statement for 2005/
the Auditor's suggestions wherever practicable while 06 and related issues.
conducting the Bank's business.
Memorandum dated 17.10.2006 recommending adoption of
Policies for selection of Statutory Auditor and the
continuation of Statutory Auditor for the Fiscal Year 2006/07.
Discussion & approval of Annual Audit Plans & Directors' Credit Committee (DCC)
Programme for the FY 2006/07. Mr. Satyandra Pyara Shrestha - Convenor
Discussion on and adoption of the draft Audit Guidelines Mr. Supriya Gupta - Member
2007. Mr. Shambhu Prashad Poudyal - Member
Memorandum dated 31.05.2007 on Proposals for Mr. Dayaram Gopal Agrawal - Member
carrying out IT Audit of the Bank. Mr. Milan Bikram Shah - Member
Description of the recommendations given Planning, Performance and

by the Committee Personnel Committee (PPPC)
Monthly review on past due loan account and appropriate Mr. Shambhu Prashad Poudyal - Convenor
measures are advised to Management to keep a watch over Mr. A. Mintoo - Member
such accounts. Mr. Suraj Lal Mehta - Member
Monthly review on status of old and unreconciled items in
the Nostro accounts of the Bank and appropriate directions Information Technology Committee (ITC)
are given to the Management to keep them under control. Mr. Shambhu Prashad Poudyal - Convenor
Review the compliance of the branches in regard to NRB Mr. Dayaram Gopal Agrawal - Member
directives, Bank's Credit policy, internal rules and guidelines Mr. Milan Bikram Shah - Member
and compliance of prevailing laws of the country.
Review and discussions on the NRB Inspection Report and Above committees have regularly been giving various
advise appropriate measures to be taken by the advices/instructions after reviewing the respective
Management for full compliance of the irregularities Banking activities periodically. Similarly, various
pointed out in the report. Management Committees have been formed to ensure
Review and discussions on the preliminary statutory audit effective operations of the Bank:
report along with the Management response and Annual 1. Executive Committee
Financial Statements of the Bank and suggest the 2. Human Resource Committee
Management appropriate measures for compliance and 3. Expenditure Monitoring Committee
recommend the Board for adoption of annual accounts of 4. Asset and Liability Management Committee
the Bank. 5. Investment Management Committee
Review and discussions on the risks mitigation (such as 6. Bid Committee
business, operations, regulatory, external etc.), internal check 7. Profitability Committee
and control and security position in respect of Business Bank,
Branch Operations, Personal Lending business at branches, Amount paid to Directors, CEO and
Treasury operations, CTO, HR&PM, Central Accounts and Company Secretary during FY 2006/07
Privilege Banking functions of the Bank. Amount paid to Directors on account of sitting fee,
newspaper/communication allowance and daily
The Directors in the Audit Committee are paid fees per allowance: Rs.2,710,500
sitting as follows: Remuneration paid to Chief Executive Officer:
Convenor Rs. 10,000 Rs.7,945,000
Other members Rs. 8,000 Amount paid to Company Secretary and Statutory
Auditor towards sitting fee: Rs.200,000
The Board has constituted various Committees for
effective supervision of various areas of the Bank. Status of Dividend
Composition of the Committee was as follows during Cash dividend declared till last fiscal year Rs. 2.37 billion
FY 2006/07: Unpaid dividend as at 16 July 2007 Rs.18 million
In the present competitive atmosphere

in banking sector, Nabil has been able
to provide professional service and
facilities with the state of art banking
system to its customers and its
contribution in developing Nepal's
trade and industry sector is also very
significant. I am very satisfied with and
impressed by prompt and reliable
service of Nabil Bank.
H.E. MR. NAM SANG-JUNG
Ambassador of the Republic of Korea to Nepal
"Nabil is one of the most professionally

managed banks in Nepal, yet very
personal and client-friendly. We have had
very satisfactory and excellent relations
with the bank - at all levels of both
organizations, right from the days of its
inception. Without doubt, Nabil can be
said to be the mother of modern banking
professionals in Nepal!"
DR. ROOP JYOTI

Vice-Chairman
Jyoti Group
For me it's the 3 capital Es:

Education, Employment and Economy.
Nabil Bank and private sector can
contribute to all these in building Nepal's
future. Nabil Bank's professional and
service minded operation is a
contribution to the 3 capital Es in itself.
MR. GUNNAR ANDERSEN

Ms. Raveena Joshi Country Director
Head-Personal Lending Save the Children Norway
MANAGEMENT TEAM
Mr. Anil Shah
Chief Executive Officer
CREDIT LEGAL, COMPLIANCE INFORMATION TECHNOLOGY OPERATIONS

AND COMPANY SECRETARIAT
Mr. Amrit Charan Shrestha Mr. Prabin Chhetry Mr. Rajendra Bahadur Malla
Country Head - Credit Mr. Binaya Regmi Head – Information Technology Head – Operations
Company Secretary and Head –
Mr. Krishna Gopal Manandhar Legal and Compliance Mr. Rajesh Upadhyaya Ms. Neelam Tuladhar
Head – Credit Administration and Head – IT Support Head – National Processing
Support Mr. Kanhaiya Lal Rajwant Centre
Manager - Compliance Mr. Basant Dhakhwa
Mr. Anil Khanal Manager – IT Support Mr. Bishnu Acharya
Head – Business Bank Credit Head – General Administration
TREASURY &
Ms. Neena Thapa CORRESPONDENT BANKING Mr. Shashi Nidhi Tiwari
Sr. Analyst – Business Bank Credit PRIVILEGE BANK Head – Central Trade Operations
Ms. Anupama Khunjeli
Mr. Babu Ratna Bajracharya Head – Treasury & Ms. Barsha Shrestha Mr. Yugesh Lal Bijukchhe
Manager – Credit Administration and Correspondent Banking Head – Privilege Bank Manager – Operations
Support
Mr. Deepok Chhetry
Mr. Yagya Prasad Sharma PERSONAL LENDING & Relationship Manager BRANCHES
Head – Personal Credit REMITTANCE BUSINESS UNIT
Mr. Binay Neupane Mr. Pradeep Mishra
BUSINESS BANK Ms. Raveena Joshi Relationship Manager Manager – Lalitpur
Head – Personal Lending &
Senior Relationship Managers Inward Sourcing Mr. Saroj Pyakuryal
Mr. Deepak Shrestha Manager – Pokhara
Mr. Ramesh Lohani Mr. Pradyuman Pokharel FINANCE AND PLANNING
Mr. Dripu Dhoj Adhikary Head – Remittance Business Unit Ms. Anita Giri
Mr. Bhuvan Dahal Manager – Tripureshwor
Mr. Sanjay Nepal Head – Finance and Planning
Relationship Manager CARD DIVISION Mr. Prakash Babu Pant
– Kathmandu AUDIT AND INSPECTION Manager – Biratnagar
Mr. Binaya Kumar Regmi
Ms. Namita Dixit Head – Card Division Mr. Binod Sharma Mr. Buddhi Ram Sharma
Relationship Manager Head – Audit & Inspection Manager - Nepalgunj
– Kathmandu Mr. Mohan Subba
Manager - Card Marketing
Mr. Gyaneshwar Acharya
Branch/Relationship Manager Mr. Niraj Sharma
– Birgunj Manager - Card Operations
Mr. Gyanendra Pratap Shah

Relationship Manager HUMAN RESOURCE &
– Birgunj PERSONNEL MANAGEMENT
Mr. Krishna Dutta Bhattarai Mr. Jyoti Bahadur K.C.

Branch/Relationship Manager Head – Human Resource &
– Biratnagar Personnel Management
Mr. Kabindra Shrestha

Branch/Relationship Manager
– Butwal
NABIL BANK MANAGEMENT TEAM
From left to right

Mr. Bhuvan Dahal, Mr. Anil Khanal, Mr. Prabin Chhetry, Mr. Amrit Charan Shrestha, Ms. Barsha Shrestha, Mr. Deepak Shrestha, Mr. Rajesh Upadhyaya, Mr. Binay Regmi, Mr. Anil Shah,
Ms. Neena Thapa, Mr. Rajendra Bahadur Malla, Mr. Krishna Gopal Manandhar, Ms. Neelam Tuladhar, Mr. Ramesh Lohani, Mr. Binaya Kumar Regmi, Ms. Anupama Khunjeli, Ms. Raveena Joshi
ORGANIZATIONAL STRUCTURE MESSAGE FROM THE CHIEF EXECUTIVE OFFICER
Dear Stakeholders, puts us amongst the highest in the banking sector of the
Nabil Bank is delighted to continue to be ‘Your Bank @ nation. The Bank has doubled the size of its loan
Your Service’. portfolio in 5 years. As at mid July 2007 our risk asset base
had reached Rs.15.9 billion, from Rs.7.8 billion in mid July
With your support the fiscal year 2006/07 was truly an 2002. Despite such a huge growth of loan volumes, the
exceptional year for Nabil Bank, as we crossed the Rs. 1 Bank has been able to reduce NPL volume to Rs.178
billion milestone in Profit Before Bonus & Taxes, million, just 1.12% of total loans, at mid July 2007 from
registering a growth of 11% over the pervious year. Rs.557 million of mid July 2002. Similarly, the Bank has
Impressive growth in size and volume of major held loan loss provision double of NPL volume at mid
components of the balance sheet, both deposits and July 2007. We believe that this is true vindication of the
loans, yet maintaining both the mixture and quality structural change we implemented in 2004 separating
alongside, have further ascribed the year as remarkable. business generation and risk analysis and removing all
Needless to say, this achievement is a reflection of our conflict of interest therein. In terms of capital, the Bank
success in continuously striving to surge ahead to be continues to be strong and sound with our Capital Fund
the Bank of 1st Choice of all our stakeholders, even totaling NPR 2.3 billion and with our capital adequacy at
amidst the uncertainty and instability that prevailed in 12.04%, which is well above international standard.
the nation.
At this juncture when the nation is passing through a phase
Despite optimistic hopes and anticipation for the year of transition, we at Team Nabil believe that just registering
2006/07, the country did not perform well higher profits, yielding higher returns, strengthening the
economically, as instability and lawlessness seemed to financials and enhancing the books of accounts, is not
increase and the political uncertainties continued. enough in our journey to achieve our mission to be Nepal’s
Bandhs, strikes and extortion in various parts of the Bank of 1st Choice. Therefore beyond these traditional
country including Kathmandu valley crippled daily life parameters, the Bank has embarked on a journey to surge
on numerous instances over the year. At a time when ahead together with the people of Nepal across the nation
our neighboring countries registered impressive building new relationships of mutual benefit and playing
economic growth, we have managed a meager the role of a catalyst in the economic growth of the nation.
growth of 2.5% in the year. Regardless of this, Nabil In our efforts of adding value towards building a ‘New
Bank experienced a successful year and delivered Nepal’, the Bank has opened nine new Branches spanning
excellent results, and elucidating this to you our the entire length of Nepal, from Mechi to Mahakali. We are
partner in this success, gives me immense pleasure. proud of our now greater contribution towards the
upliftment of the economy through our enhanced presence
As already indicated above, Nabil Bank registered a through the entire length of the nation, enabling us to
historic Rs. 1.09 billion profit before bonus and taxes provide the highest levels of financial products and services
and Rs.674 million profit after tax in the year 2006/07. to various communities and different segments of the
The 100% cash dividend along with 40% stock society.
dividend that the Bank has distributed this year was a
record high in the annals of banking history in Nepal. With the opening of the nine branches, Nabil is now able
This is in line with our commitment to increase paid-up to reach and service our customers from Mechi to
capital of the Bank to a minimum of Rs. 1.6 billion by Mahakali through the hills and terai through online
mid July 2013. Furthermore, 36% return on connectivity via VSAT, Radio modems and fiber optics. This
shareholders’ funds and 2.72% return on bank’s is a major step forward for banking in Nepal, as from now
average assets denote superior rate of profitability and modern banking
Mr. Anil Shah

will not only be limited to the urban centers, but a larger taxes during 2006/07. The Bank’s contribution to the banking
part of the economically less privileged, remote and semi industry and the nation continues to be recognized by the
urban societies will have access to international standard community and the regulators. Federation of Nepalese Chamber
banking. At Nabil we view this as a ‘marathon’ we have only of Commerce & Industry (FNCCI) has awarded the National
just started, as the Bank plans to continue enhancing its Excellence Award to Nabil for its achievement and service as
branch network to meet the financial needs of the larger Commendations for Significant Achievement in Institutional Policy
Nepali population. Today, amongst all private banks, Nabil Planning & Commitment during the past year. It gives me
has the largest Branch and ATM networks. We have always immense pleasure to share with you that Central Bank has
been a pioneer in launching innovative products and continuously upgraded our CAMEL rating through onsite
services to meet, if not exceed our customer’s requirements inspections and regularly seek our views on crucial issues and
and now with our plans to extend our reach even further policies.
we will have the ability to truly deliver the very best
banking products and services right across Nepal. In today’s business context where competition is getting more
intense with the number of new banks and financial institutions
Nabil has earned strong market confidence, which is increasing, one of the main strengths of our Bank is our ‘People’.
clearly reflected through the enormous growth in our The consistent achievements that Nabil recorded this year was
share price. The share price that was NRs. 740 four years possible due to the team effort put up by each and every
back has soared up to NRs.5,050 on 16th July 2007, the individual member of the Nabil Team. The team which,
closing day of the fiscal year. Year end market comprises of highly skilled and talented individuals across the
capitalization was NRs. 24.8 billion, the highest in the Bank, is proud to have amongst the very best banking
banking industry. Currently Nabil’s shares are trading professionals in our high performing synergistic team.
close to NPR 6,000. An achievement that we feel is Recognizing this fact, Nabil today is amongst the highest
comprehensive evidence that Nabil’s share is a true blue paymasters and most preferred employers in not only the
chip investment for our shareholders and a lucrative industry but the nation. As always, the Bank is proud of and
opportunity to those looking for investment. thankful to the high performing individuals that make up Team
Nabil, and we are confident that we will continue to surge
The Bank has always felt responsible towards the ahead together to greater heights of success in the days ahead.
betterment of the society and the community of which we
are a part. In this regard, we continue our three pillars Finally, I reiterate my sincere commitment to our Customers,
approach to great corporate citizenship through our Shareholders, Regulators, the Community and Staff, all our
partnerships in: Health, Education and Sports. In health our stakeholders that we continue to Surge Ahead by living our
partnership with the Glaucoma Eye Center at the Tilganga Values of being C.R.I.S.P. or Customer Focused, Result Oriented,
Eye Hospital continues, in Education, the Bank has been Innovative, Synergistic and Professional everyday in everything
associated with the Mary Ward School and is sponsoring we do. As always we remain ‘Your Bank @ Your Service’. I express
the education of less privileged girl children of grades 8, 9 my gratitude to all our stakeholders for your continued
and 10. And in sports, our alliance with the Nabil Three Star confidence and support, as we Surge Ahead to build on
football club is growing from strength to strength. mutually beneficial partnerships as your Bank of 1st Choice.
Nabil continues to be among the largest tax payers in the Best regards.
industry, with the payment of NRs. 321 million corporate Anil Shah, Chief Executive Officer
During these turbulent years in financial
market, Nabil has shown its efficiency
through its proficient services and
modern facilities to prove itself to become
the first choice Bank for Thai Airways. I
hope our mutual understanding and
cordial relationship established since the
inception of Nabil in 1984 will be more
intense and fruitful in the days to come.
MR. PRASERT TANHANSA

General Manager - Nepal & Bhutan
Thai Airways International Public Co. Ltd.
JICA has a long working relationship

with Nabil Bank and feels proud to have
used your expertise until now. JICA truly
appreciates your contribution towards
your country Nepal & its citizens, and
would like to work hand in hand in the
days ahead. Wishing you success in your
endeavor !
MR. NORIAKI NIWA

Resident Representative
JICA Nepal Office
Dabur Nepal has been banking

with Nabil Bank for over a
decade and Nabil has always
been its Bank of the 1st choice.
MR. UDAYAN GANGULY
Dabur Nepal
Ms. Raveena Joshi

Head-Personal Lending
Nabil Bank has been helpful not only in
development of big business and
industries but also in promotion and
growth of microfinance to reduce
poverty in Nepal. It is one of the first
commercial banks to provide on-lending
fund and participate in the equity of
microfinance institutions, including
Nirdhan NGO and Nirdhan Utthan Bank
Ltd.
DR. HARIHAR DEV PANT

Chairman and CEO
Nirdhan Utthan bank
On behalf of Rural Water Supply & Sanitation

Fund Development Board, I would like to
thank Nabil Bank for providing excellent
banking services to us for over a decade and
hope that this mutually beneficial
relationship will grow in future.
MR. ARJUN NARSINGH RAYAMAJHI

Executive Director
Rural Water Supply & Sanitation Fund Development Board
Nice to experience your customer oriented

approach but tomorrow’s market is more
challenging and customer satisfaction is
not the only end and you have to be able
to delight the customers of tomorrow. We
wish you all success for your growth and
we hope to create win win situation
always by building more trust and
confidence.
MR. PRADEEP K. SHRESTHA

Ms. Raveena Joshi Managing Director
Head-Personal Lending Panchakanya Group
RISK MANAGEMENT
Taking risk is an integral part of our business. Our aim securities and other obligations in tradable form and
is to achieve an appropriate balance between risk derivatives referenced to those names.
and return based on our assessment of potential risk
developments in both normal and stressed Banks assume certain risks, especially credit and
conditions. market risks as an integral part of the business
exchanges with the clients. In this connection it is
Banking activities deal with different sorts of risk- important to manage the risks inherent in the
management to a large extent, mainly comprising business with customers in a controllable manner
market and counterparty risks, but also including and this is why bank's Board establishes maximum
liquidity and operational risks. limits for the total risk exposure at every particular
interval of the review period.
Market Risk is the risk of a rise or fall in the value
of the bank's assets and liabilities due to price Market Risk:
changes in the market. The portfolio analysis taking into account the
concentration risk the aggregate control limit, FX risk
Credit Risk (Counterparty Risk) is the risk of any limit, Individual Currency Trading Limit, Intra Day Limit,
kind of non fulfillment by customers (companies, Net Open Position Limit, the guidelines as to
individuals, banks, financial institutions, states etc) maintenance of Credit to Deposit Ratio, Liquid Asset to
of their obligations towards the bank. Most of the Deposit Ratio, Investment limits, GAP Analysis for
counterparty risk is related to credit risks. liquidity purpose and for interest rate sensitive Asset &
Liability book all the above within ALCO / Investment
Liquidity Risk is the risk for a loss due to lack of policy as approved by the Board is monitored by
liquid fund, which may force the bank to close Treasury and Finance & Planning so as to make sure
out a position before maturity, for example: The that no unwarranted surprises are to be observed.
risk arises when the mismatch between assets
and liabilities arises due to the maturity profile Strengthening Risk Control:
where the maturing assets are not enough to Credit Risk:
cater to the maturing liabilities. Credit risk is the risk of loss as a result of failure by a
client or counterparty to meet its contractual
Operational Risk is the risk for unforeseen losses obligations. It is an integral part of many of our
due to administrative or systems deficiencies, business activities and is inherent in traditional banking
which may be intentional, such as violations of products - loans, commitments to lend and contingent
laws or instructions or unintentional, within or liabilities, such as letters of credit - trade products -
beyond the bank's control. derivative contracts such as forwards, swaps, options,
repurchase agreements (Repos and Reverse Repos) and
While credit and liquidity risk may be regarded as securities borrowing and lending transactions. All
classical banking risks, the market risk - is exposure to banking and traded products are governed by a
market variables , interest rates, exchange rates , comprehensive risk management and control
equity market indices , commodity prices and factors framework, which includes detailed credit policy and
specific to individual names affecting the values of procedures which are approved by the Board.
In recent years, the Bank has organized the handling of Operational Risk:
its Credit Risk in an efficient manner through its new The risk of loss resulting from inadequate or
credit organizational structure, where the Credit Unit is failed internal processes, people and system or
responsible of implementing the credit guidelines which from external causes, whether deliberate,
are approved by the Board and also plays an important accidental or natural. It is inherent in all our
role in making evaluations of the credit decisions that are activities, not only in the business we conduct but
separate and uninfluenced from the business side that is also from the fact that we are a business- because
Business Banking Unit or Personnel Lending Unit - thus we are an employer, we own and occupy property
providing a second opinion on each credit case. and we hold assets, including information
belonging to ourselves and our clients. Every
Liquidity Risk: function whether a front end business or a
The Bank as per the approved guidelines from the control or logistic unit must manage the
Board has been maintaining Liquid Asset to deposit operational risk that arise from its own activities.
ratio and has been monitoring the same very closely. We have introduced "Total Quality Management"
The investments for liquid asset mainly comprises of (TQM) approach whereby each unit identifies the
Government Securities: Treasury Bills maturing within risk associated and monitors and escalates
364 days and Bonds. Our Central Bank as per their required information to the Senior Management.
Open Market Committee proceedings brings REPOs The Audit Committee under the direct supervision
and Reverse REPOs in the market as per the market of the Board has been strengthened which
requirement and has been letting the Banks utilize overlooks into the operational risk aspect where
the Standing Liquidity Facility (SLF) against the by we assess the implication of the External and
holding of Government Securities as the last resort Internal audit findings to implement better ways
for liquidity requirement. of mitigating operational risk.
We at Jagadamba Steels Pvt. Ltd. and the

entire Shanker Group family are proud to
be associated with Nabil Bank who has
stood by us through thick and thin. We
have grown with them and they in turn
have always made sure that we reap the
best out of the seeds we sow.
MR. SHANKER LAL AGRAWAL
Chairman
Shanker Group
I am a member of Nabil Bank credit

cards since 1995. I have been
availing credit cards of other banks
as well, but I feel more comfortable
on using cards of Nabil Bank.
MR. LOK MANYA GOLCHA
Chairman
Golcha Organization
We are proud to be associated with

Nabil Bank Ltd, which supports our
growth offering expert financial
advice and various tailor made
services.
MR. PAWAN KR. GOLYAN
CMD
Reliance Spinning
Ms. Raveena Joshi

We view Nabil Bank as the foremost Bank

that introduced modern banking system in
Nepal being the first joint venture Bank in
the country. Our relationship with Nabil
Bank has remained valued and a mutually
beneficial one. Hence, Nabil Bank is our
Bank of the 1st Choice in real sense for us.
MR. I. R. TAMANG
Executive Chairman
Civil Group
I have brains in my head and feet in

my shoes. I could steer myself to any
direction I wanted. I am glad I chose
Nabil Bank which has helped me
move steadily in all my endeavours.
MR. JIWAN SINGH LAMA
Mortgage Finance Customer
Nabil bank deserves a sincere

congratulations for its commitment
towards poverty reduction that
exemplified through its involvement
in microfinance beyond the
mandatory charter.
MR. PITAMBAR ACHARYA
Excutive Director
Deprosc Nepal
Ms. Raveena Joshi

CORPORATE GOVERNANCE: OUR WAY OF LIFE
Nabil realizes that good corporate governance is the Corporate Governance in the
very foundation for its sustainable growth and Management
therefore continues to live by the highest standards Nabil Management is a team of seasoned and
of corporate governance. Moreso, when it comes to experienced professionals who are driven by the
institutions such as banks which can not operate corporate mission and values and believe in a culture
without properly managing and mitigating several of self discipline. The senior executives and managers,
prominent risks and winning the trust of the public with their experience and knowledge, are capable of
at all times, Good Corporate Governance is of utmost maintaining an effective level of control over the
importance for them. This is why in Nabil Bank the banking operations and affairs. Policies and
following areas have always received utmost operational guidelines have been formulated which
importance as a part of good corporate governance. ensure adequate controls over all day to day
business activities and the effective management of
The Board of Directors all inherent risks.
The Board recognizes its responsibility to act
honestly, prudentially and progressively in Clear lines of responsibility and
accordance with the prevailing regulations in serving accountability
the interest of all the stakeholders of the Bank. All our Nabil has structured itself in a manner so that there is
Board Members have extensive experience in the always a clear demarcation between the business
banking industry which makes them qualified in generators and the risk evaluators. This ensures the
adding value by providing seasoned judgments practice of maker and uninfluenced checker each
independently on policy matters. There are different time a deal is put through. Each individual's duties
Board Committees headed by non-executive Board and lines of responsibility and accountability are
Members to look into different Banking affairs like clearly discussed, defined and recorded against which
planning, credit, overall performance management, their performance is monitored and evaluated.
human resource, audit and compliance.
Know Your Customer (KYC) and Anti instrument that helps banks constantly improve its
Money Laundering (AML) Policy risk management system resulting in protection of
Not limited to the guidelines issued by Nepal Rastra interest of all the stakeholders and has started
Bank on 7th April 2005 Nabil Bank has implemented measures to implement it in the Bank.
its Know Your Customer (KYC) and Anti Money
Laundering (AML) policies with approval from the Upcoming Major Challenges and Bank's
Board of Directors to have it at par with international Preparations
standards, effective 14th July 2006. The first round of Competition in the financial market is already tough
training to the entire staff of the Bank has been with the presence of large number of financial
concluded as per the mandate of the policy. The institutions including joint ventures of international
updates about Money Laundering cases around the banks. Interest spread, exchange spread etc of banks
world and its impact on the organization in part as are constantly narrowing. The competition is
well as on the country as a whole have been expected to stiffen further with the government's
disseminated to the entire staff regularly. In commitment of allowing foreign banks to open their
accordance with predefined norms and standards, branches by 1st January 2010. When international
entire transactions of the Bank have been constantly banks come, they come with large capital, modern
monitored and a system of informing the concerned technology and an array of products. Experience of
authorities has been developed in case of any our neighbouring countries suggests us not to panic
suspicious transactions observed to this end. with the arrival of international banks. We however
have decided to focus on the following areas to
BASEL II remain competitive:
With regard to Basel II implementation, Nepal Rastra Augmenting Capital Base.
Bank (NRB) has prescribed the approaches most Developing expertise in various fields:
suitable for Nepalese financial market. New capital International banks have better exposure in
adequacy framework prescribed by NRB based on treasury and credit products than local banks. The
new Capital Accord (Basel II) of Basel Committee on Bank has thus started measures for enhancing
Banking Supervision is meant for parallel run in FY skills of its human resources in these products.
2007/08 and shall come to force effective FY 2008/09. Adopting best human resource practices.
Strengthening risk management system.
Nabil is privileged to be a part of new Capital Accord Improving customer service quality.
Implementation Group formed by NRB, the Central Maximizing use of Information Technology.
Bank of the country. Nabil regards Basel II as an Product innovation and cost management
HUMAN RESOURCE
As part of our mission to be the 'Bank of 1st Choice' of members and utilize the same towards adding value
Staff, Nabil continuously strives to attract and retain to the Bank. With this in mind our training policy
high caliber talent. Being the "best" in the business focuses not only on overcoming the weaknesses of
would mean to be able to attract, develop and retain an individual, but rather building on strengths to
the best talent in the business. The Bank provides foster professionals who can help us continue to be
market driven compensation and benefit packages, a the Bank of 1st Choice of all our stakeholders. During
professional challenging environment, state-of-the- the financial year 2006/07, 68 different training
art learning opportunities and a culture built on time programs were conducted where 245 staff
tested values and beliefs. participated, 233 in local and 12 in foreign training
programs. During the year, 6 managers and 14 officers
We believe that the most important resource of the were promoted to higher positions.
Bank is its Human Resource and the talent pool we
have is one the most vibrant and energetic Teams in Our Human Resource Policy pertaining to Job
the country. We believe we must continuously enrich Descriptions and Performance Management Process
and equip our "Entire Team" members with the latest is regularly reviewed and enhanced. Performance
market developments and provide opportunities to Management Contracts that have been implemented
enhance knowledge to live up to the expectations of make sure that the performing employees are
all our stakeholders. recognized and rewarded. The HR Management
always focuses in putting the right staff in the right
Under HR Development, the basic policy is to identify job and fostering a corporate culture that rewards a
the core strengths and capabilities of individual staff forward looking and creative attitude.
Through Mary Ward School , Nabil extends its

support to deserving underprivileged students.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The notion of Corporate Social Responsibility (CSR) Ward School affiliated with St. Mary’s High School. And
has been in Nepal dating back hundreds of years. in Sport, we have entered into a partnership with
“Giving voluntarily for greater good” has been an Nabil Three Star Club to promote the spirit of sport.
intrinsic part of the social and religious belief of the
people of Nepal. Even business houses have actively We believe CSR is closely linked with the principles of
been involved in trusteeship in their corporate sustainable development and long term partnership
traditions in their own capacities but the last few between the parties where decisions are not based
years have witnessed a notable surge in the concept on generation of profits or dividends but based on
of CSR with increasing numbers of business houses long term social consequences. CSR for us goes
and large corporate establishments promoting this beyond charity where we are merely observing the
concept. benefits generated from our initiative.
Nabil Bank since its inception in 1984 is in a unique The 30 students from Mary Ward School who appeared
position in the banking industry in Nepal carrying with for their School Leaving Certificate (SLC ) examination
it 23 years of experience. When we look forward, we all passed with 1st divisions which was a pride for us as
have a mission and vision to be the ‘Bank of 1st Choice’ well as the school and the students including their
for all our stakeholders - Customers, Shareholders, families. They are all underprivileged children where
Regulators, Communities we work in and Staff. Mary Ward School is supporting the families for their
girl child education. Not only is the Bank involved in
We have charted our set of values C.R.I.S.P to attain supporting the children but the staff in their individual
the mission statement: capacities have been supporting deprived children for
C - Customer Focused their educational needs and therefore are involved in
R - Result Oriented creating awareness in the importance of education in
I - Innovative children especially in a country like Nepal wrought with
S - Synergistic many problems; but we feel that if we in our own
P - Professional capacities can even attempt to make a small difference,
then a certain contribution has been made. This in fact
It is our belief that the differentiator when it comes to is a reflection that not only is Nabil as an institution
the CSR initiatives of Nabil Bank Ltd., a feeling that we committed to such causes but the staff too uphold this
all proudly support, would be our three pillared feeling which in itself supports the fact that CSR
strategy on “Corporate Social Responsibility” which initiatives in Nabil will have continuity and is not just a
goes deeper than just providing funds for an event or short term venture that has been undertaken.
project. Just like with all our other stakeholders, here
too we believe in building long term sustainable To add to the above, the employees of the Bank on a
relationships. Health, Education and Sports are our yearly basis also conduct blood donation programs
main thrust areas. In Health, we have partnered with where we have partnered with the Nepal Red Cross
the Glaucoma Center at the Tilganga Eye Hospital to Society (NRCS). This association with NRCS goes back
increase overall knowledge about this blinding several years and has remained a continuous process
disease. In Education, the Bank is supporting the much appreciated by them with letters of appreciation
education of underprivileged children at the Mary provided to the Bank for the initiative and support
experts estimate that half of the people affected by

glaucoma may not even know they have it, we have
taken a step forward for creating this awareness.
We have also partnered with the football team “Nabil

Three Star Club” with the basic vision to support the
youth and giving them yet another avenue for
building their careers as an athlete. In our part of the
world it is difficult to concentrate fully in games and
sports and earn a standard living. We believe that in
addition to the financial support our Bank provides,
we support our football team by being present in
the field when the matches take place and even to a
large extent support the players morally. The
partnership has been mutually beneficial for both
the parties as “Nabil Three Star Club” has established
itself among the top three teams in the country.
Nabil continues to extend its partnership with Nabil Three
Star Football Club Apart from the above CSR initiatives that we have
continued over the years, we have now partnered with
Western Union under their CSR ‘Agent Gift Match
shown. The employees of the Bank have also been Program’ initiative to assist ‘Prayas’ an organization
supporting girl child education for underprivileged involved in rehabilitation of street children in addition
children long before the Bank as an institution adopted to providing further support to the Mary Ward School.
its CSR initiatives which also goes to complement how This tri-party initiative is envisioned to benefit these
close such causes are to the people who form Nabil Bank. associations who are established organizations
having several years’ history in assuring nationwide
The Bank in support of its other pillar - Health as support for burning social causes.
already mentioned above, has been associated with the
Glaucoma Center at the Tilganga Eye Hospital where It is our vision to continue to give back to society
we have partnered with the hospital for enhancing and add value wherever we can as a leading financial
awareness of this disease. Glaucoma is a very institution in the country with initiatives such as
misunderstood disease. Often, people don’t realize the these undertaken with care and forethought so as
severity or who is affected. Glaucoma being an eye for us to continue to be the Bank of 1st Choice in
disease that gradually steals sight without warning and many ways than just one.
PRODUCTS AND SERVICES
Deposits
At Nabil, our dear depositors enjoy a good return on their
deposits, convenience of modern banking technology
and the comfort of our financial reliability, without
compromising on any of them. Nabil offers an array of
deposit products which provides interest rates quite
competitive among the banks of its class. Equipped with
several distribution channels like cards, internet banking,
largest Network of branches and ATMs and Extended
banking counters, Nabil offers its depositors the freedom
of '24 hours a day, 365 days a year' access to their deposit
accounts and an incredibly convenient banking
experience. Nabil's networth of more than NPR 2 billion,
capital adequacy of 12.04% and impressive ratio of Non-
performing Loans to Total Loans as low as 1.12% reflect
its sound financial stability and risk management skills
which give a sense of comfort to our depositors that
their dear savings will always be safe in Nabil. Therefore
Nabil is today a well established brand name that comes
Mr. Janardan Baral, lucky winner of Nabil Bachat Mega
to the minds of depositors.
Lucky draw, enjoying his prize “Toyota Echo Car”
services whereby Nabil goes to the customers'
Besides the regular deposit accounts like current, doorsteps to give them exclusive banking services.
savings and fixed term deposits in local currency as
well as in a range of other major foreign currencies,
Privilege Lounge
Nabil also offers many other special deposit schemes.
At the Privilege Lounge, Nabil's valued customers can
enjoy exclusive premium banking experience in a
NabilBachat queue-free and personal environment, whilst they avail
NabilBachat is a premium deposit scheme that reflects of the most professional of service deliveries. A team of
the value and respect Nabil gives to its depositors. Relationship Managers are always more than happy to
NabilBachat offers high interest rate on deposits, which give their customers a personalized service, offer
gets even higher as the deposited balance goes up. In financial advices and any assistance what-so-ever on
addition, this scheme offers Visa Electron Debit Card, Any their financial requirements. Nabil believes in
Branch Banking Service, internet banking service relationships for mutual growth and feels proud to have
'NabilNet', Issuance of Travellers Cheques, Issuance of grown on foundation of the relationships that Nabil has
Balance Certificate, all free of charge. built over the decades.
Call Deposits Any Branch Banking Service

For the valued customers, Nabil offers Call Deposits, Thanks to the latest infrastructure in IT connectivity
specially structured to suit its customer's needs. Under and the renowned core-banking software 'Finacle', all
this scheme, Nabil even offers the home banking
In today's world, customer service
seems to be a thing of the past. Not so
with Nabil Cards. I rarely have
problems, but when I do, I am always
able to get through to someone who
can solve my problem then and there
24 hours a day, 365 days a year. Nabil
Cards has made my global business
world a smaller place. Everything is just
a swipe away -convenience at its best.
MR. AJIT BIKRAM SHAH

Chairman
Formation Carpet
I get all the attention I need from Nabil

Bank when it comes to meeting my
financial needs. Nabil Bank does not
lose its focus from a customer just
because its business is small in size.
MS. DOMA LAMA
Doma Lama Group
In terms of banking services, expert

financial advice and customization, I
find Nabil truly a reliable and
dependable bank.
MR. UDAY BIR GURUNG,

Regional Managing Director
Group 4 Securicor Nepal Pvt. Ltd.
Ms. Raveena Joshi

28 Nabil outlets and 31 units of 24-hour-operative ATMs branch locations throughout the country ensure that
are inter-connected on real-time basis. This gives the Nabil products and facilities are tailored to meet the
customers the complete freedom of operating their changing business needs of the customers.
account from any of Nabil's branches and ATMs, no
matter in which branch they maintain their account. Working Capital & Project Financings
Nabil's network of branches and ATMs is the biggest Nabil, through its wide range of flexible products like
among private sector banks in the country with its Overdraft, Demand Loan, Time Loan, Short Term Loan,
presence from Far West to Far East of Nepal. Import Loan etc, can accommodate all specific needs
for the customers' working capital requirements,
Extended Banking Hours whether the need arises for maintaining primary assets
For customers who do not find time for even small inventory, meeting operating costs, financing for
banking transactions during office hours, Nabil receivables, importing goods etc., depending on the
provides 365 days banking and evening counter nature of specific business and trade cycle.
services from selected branches through which all the Relationship Managers maintain continuous close
Nabil customers can operate their accounts. communications with customers to ensure readiness
for financing any requirements on a timely and
Internet Banking Service adequate manner. Medium and Long Term loan
For customers who do not wish to leave the comfort products having more flexible characteristics in terms
of their own home or office simply for account of time period, installment schedule etc., depending
information and fund transfer, the Bank offers on the project cash flow and borrowers repayment
'NabilNet', an internet banking solution through ability are availed for creating fixed and movable
which customers can view their account information assets required for projects under consideration.
and even transfer funds, in a secured environment.
Trade Finance
Additional Services Nabil, through its extensive domestic and international
For the Bank's deposit relationships there are other network of correspondent banking relationships, is
host of services available at Nabil, like implementing well poised to meet the needs of customers' Import
Standing Instructions on accounts, issuing Balance and Export transactions through the facilitation of
Certificates, certifying 'Good for Payment' on cheques Letters of Credit, Letters of Guarantee & Counter
and sending/receiving remittances to/from around the Guarantee, Drafts, SWIFT transfers etc., efficiently at
world through its vast network of correspondents. competitive rates. Various forms of Import and Export
Loans are availed for financing on trade transactions
Business Banking such as Transit Loans, Draft Discounting, Import and
Business Banking is a dedicated division within the Export Bill Discounting or Purchasing, Pre Shipment
Bank to serve the Bank's corporate relationships. It Loan, Post Shipment Loan etc.
facilitates business loans with its diverse and
customized offers to its wide range of customers, Priority & Deprived Sector Financing or Refinancing
from small enterprises loans to large corporate and Nabil has formulated various products to extend
multinational business loans. Highly trained and direct and indirect financing towards micro and small
dedicated Relationship Managers based in various enterprises which help increase production,
employment and income as prioritized under the NabilProperties constitutes an all purpose loan
national development plans with an objective to scheme, not limited just for education, marriage,
uplift the living standard of general public travel, equity infusion purposes only, but a wide
particularly the deprived and low income people by variety of other purposes available to fulfill varied
progressively reducing the prevalent unemployment, financial requirements just by simply mortgaging idle
poverty, economic inequality and backwardness. The property. Application is easy and loan sanction and
Bank has made equity investment in various leading delivery expeditious.
Co-operatives and Rural Development Banks to
further partake in these activities. Nabil has NabilAuto makes commuting easier and owning a
refinanced in the deprived sectors mostly through four wheeler a reality at attractive interest rates, loan
these Co-operatives and Rural Development Banks tenures and flexible repayment options with
providing Institutional Loans. financing available for a large variety of vehicles, with
special facilities to draw cash by pledging a vehicle in
Mortgage Loan the Bank's name also available under the 'Cash for
The Nabil Mortgage Loan Product provides hassle Car' scheme.
free finance facilities for individuals and corporate
bodies to meet their various needs like development NabilPersonal, an all purpose, small ticket size easy
of commercial complexes, acquisition of residential loan scheme, makes commitments comfortable by
complexes, commercial properties, repairs and providing a hassle free finance facility at competitive
renovation of residential or commercial property, or interest rate options available.
to meet business requirements, etc. by simply
mortgaging their idle properties and availing of the NabilSiksha extends easy financial solution to the
needed cash flow. students going abroad for further/higher education.
It is highly customer friendly loan available with
Personal Lending partial disbursement facility and having revolving
Nabil offers a wide range of Personal Lending feature in Education Loan category. Our financing is
Products to meet the consumer loan needs of its not restricted to the education expenses of the
customers and turn their lifetime dreams into reality. students but is also designed to accommodate other
Nabil is dedicated to cater to customers' needs with a expenses of the students viz. boarding cost, traveling
personal touch with each loan specifically tailor made expenses, consultancy fees etc.
and designed keeping in mind the specific needs of
the individual customer. This customer care can be Personal Overdraft has been designed to meet
experienced through the bank's array of Personal contingent obligations of our valued customers. This
Lending Products that the Bank offers. product helps our valued customers with easy and
fast processing of loan with easy payback feature
NabilHousing makes the dream of owning a home a and reinstating credit facility.
reality with attractive features available beyond
market offerings at competitive interest rates and Apartment Financing is an extended product of
extended loan tenures, with flexible repayment and NabilHousing, which is targeted to those customers
partial payment features. who want to purchase a residential unit or apartment
built as per the Community Housing Act (Sanyukta

Awash Ain).
Remittance Products
Nabil Bank offers a number of remittance products to
cater the customer needs for transferring their money
in and out of the country.
Western Union: Nabil Bank is the only Principal Bank

Agent for rendering Western Union Money Transfer
services. In order to provide the service throughout
the country, there are over 450 authorized subagents Traveler's Cheques: Instead of carrying cash, a lot of
of Nabil Bank in different parts of the country. people prefer to carry traveler's cheques for safety
reason, while they travel. Nabil Bank purchases and
NABILREMIT: Nabil Bank has commenced its domestic issues Traveler's Cheques at competitive prices.
remittance services for money transfers from one
place to another place in Nepal. There are over 250 Demand Drafts: To meet the customers’ need for
NABILREMIT agents established in different parts of sending demand drafts, Nabil Bank uses its network
the country for rendering the domestic money of its correspondent banks located all over the world.
transfer services.
Anywhere Branch Banking: The online connectivity of
Foreign Inward Remittances: Nabil Bank has all our outlets makes it possible to remit funds
established remittance relationships with a number domestically to and from any of the branches located
of exchange companies and banks in Qatar, UAE, throughout the kingdom.
Kuwait, Saudi Arabia and so forth for rendering
foreign inward remittance services. Cards Products
Nabil bank, a pioneer in issuing internationally
SWIFT transfers: Through the SWIFT transfer branded cards, launched its first MasterCard credit
mechanism, funds can be transferred to virtually card in 1993. With this experience of more than a
anywhere in the world. Likewise funds can also be decade, Nabil today stands on the forefront in card
received into the customers’ accounts with us from services by providing arrays of card products like
virtually any bank in the world. SWIFT stands for credit cards, debit cards and prepaid cards in world
Society for Worldwide Interbank Financial renowned brands like MasterCard and Visa.
Telecommunication System, which is a reliable
communication network speeding up fund transfer Nabil MasterCard and Visa local cards can be used in
and other financial messages. Nepal and India in over 250,000 outlets for purchases
and in around 25,000 ATMs. Nabil is one of the very on use of Visa Electron and Prepaid cards for cash
few banks in the country who offer 'MasterCard withdrawal from Nabil ATMs and purchase in any
International' against customers' USD Account or outlet across Nepal and India.
against Passport facility that is accepted in countless
ATMs and outlets all over the world. For convenience For a single Bank in Nepal, Nabil has the largest
of the cardholders, Nabil cards have flexible re- network of 31 ATMs and more than 800 POS terminals
payment options whereby customers can choose to spreading across the country from Birtamode to
pay any percentage from 10% to 100% of the due Mahendranagar that accepts range of card brands
amount. like Mastercard, Visa, Maestro, Cirrus, Visa Electron,
Visa Plus and SCT cards. Nabil also provides service of
Similarly, Nabil Visa Electron Debit cards and prepaid online payments through its Card Division and
cards are hassle free, readily available and simple to selected branches enabling customers to make
use. These cards are also accepted for purchases and payments like test registrations, membership fees,
in ATMs in both Nepal and India. There is no charge purchase of books, journals etc.
104 Tanka Prasad Marg
Baneshwor Height
Post Box 4414
Kathmandu, Nepal
T. R. Upadhya & Co.
Chartered Accountants Telephone: 977 (1) 4495000, 4472658
Fax: 977(1) 4474178
E-mail: trunco@ntc.net.np
THE SHAREHOLDERS OF NABIL BANK LIMITED
INDEPENDENT AUDITOR’S REPORT

We have audited the accompanying Balance Sheet of Nabil Bank Limited, as of 16 July 2007 (Corresponding to 32
Ashad 2064), the related Profit and Loss Account and the Cash Flow Statement for the year then ended. These financial
statements are the responsibility of the management of the Bank. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with Nepal Standards on Auditing. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
As per the requirement of the Company Act, 2063 and Bank and Financial Institution Act, 2063 we also report that:
a) we have obtained information and explanations, which, to the best of our knowledge and belief, were necessary
for the purpose of our audit;
b) in our opinion, proper books of account as required by law have been kept by the Bank so far as appears from our
examination of such books;
c) in our opinion, the returns received from branches of the Bank were adequate for the purpose of the audit;
d) in our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report
have been prepared in the format prescribed by Nepal Rastra Bank and are in agreement with the books of
account maintained by the Bank;
e) in our opinion, so far as appeared from our examination of the books, the Bank has maintained adequate capital
funds and adequate provisions for possible impairment of assets in accordance with the directives of Nepal Rastra
Bank;
f) in our opinion, so far as appeared from our examination of the books, the business of the Bank has been
conducted satisfactorily;
g) to the best of our information and according to explanations given to us and from our examination of the books
of account of the Bank necessary for the purpose of our audit, we have not come across cases where Board of
Directors or any employees of the Bank have acted contrary to the provisions of law, or committed any
misappropriation or caused loss or damage to the Bank and violated any directives of Nepal Rastra Bank or acted
in a manner to jeopardise the interest and security of the Bank, its depositors and investors.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Bank as of 16
July 2007 (Corresponding to 32 Ashad 2064), the results of operations and its cash flows for the year then ended in
accordance with Nepal Accounting Standards except for the certain matters stated in Notes to Account, Generally
Accepted Accounting Principles and comply with the provisions of the Company Act, 2063 and Bank and Financial
Institution Act, 2063.
T R Upadhyay
Senior Partner
For and on behalf of T R Upadhya & Co.
Chartered Accountants
27 August 2007 (10 Bhadra 2064), Kathmandu
T.R. Upadhyaya & Co. is a

correspondent firm of KPMG International
Nabil Bank Limited

Balance Sheet
as at 16 July 2007
Figures in NPR
CAPITAL & LIABILITIES SCHEDULE THIS YEAR PREVIOUS YEAR
1. Share Capital 1 491,654,400 491,654,400

2. Reserves and Surplus 2 1,565,395,315 1,383,340,017
3. Debentures & Bonds 3 - -
4. Borrowings 4 882,572,500 173,201,710
5. Deposits 5 23,342,285,327 19,347,399,440
6. Bills Payable 6 83,514,820 92,536,853
7. Proposed & Undistributed Dividends 509,417,925 435,084,062
8. Income Tax Liabilities - 34,604,855
9. Other Liabilities 7 378,552,721 372,149,741
TOTAL 27,253,393,008 22,329,971,078
ASSETS SCHEDULE THIS YEAR PREVIOUS YEAR
1. Cash Balance 8 270,406,987 237,818,512

2. Balance with Nepal Rastra Bank 9 1,113,415,436 318,358,771
3. Balance with Banks/Financial Institutions 10 16,003,428 74,061,305
4. Money at Call and Short Notice 11 563,532,632 1,734,901,943
5. Investment 12 8,945,310,567 6,178,533,108
6. Loans, Advances and Bills Purchased 13 15,545,778,730 12,922,543,153
7. Fixed Assets 14 286,895,224 319,086,147
8. Non Banking Assets 15 - -
9. Other Assets 16 512,050,004 544,668,139
TOTAL 27,253,393,008 22,329,971,078
Contingent Liabilities Schedule 17

Directors' Declaration Schedule 29
Table of Capital Fund Schedule 30
Table of Risk Weighted Assets Schedule 30(A)
Principal Indicators Schedule 31
Principal Accounting Policies Schedule 32
Notes to Accounts Schedule 33
Schedules 1 to 17 form integral part of the Balance Sheet.
Anil Shah S. P. Shrestha S. Gupta S. P. Poudyal As per our report of

Chief Executive Officer Chairman Director Director even date.
Bhuvan Dahal D. G. Agrawal M. B. Shah A. P. Bazgain T. R. Upadhyay , FCA

Head Finance & Planning Director Director Director Senior Partner
T.R. Upadhya & Co.
Date: 27 August 2007

Place: Nabil House, Kamaladi, Kathmandu
Nabil Bank Limited

Profit and Loss Account
For the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashadh 2064)
Figures in NPR
PARTICULARS SCHEDULE THIS YEAR PREVIOUS YEAR
1. Interest Income 18 1,587,758,714 1,309,998,500

2. Interest Expense 19 555,710,109 357,161,304
Net Interest Income 1,032,048,605 952,837,196
3. Commission and Discount 20 150,608,550 138,293,913
4. Other Operating Income 21 87,574,553 82,897,862
5. Exchange Income 22 209,926,167 185,483,662
Total Operating Income 1,480,157,875 1,359,512,633
6. Staff Expense 23 240,161,275 219,780,853
7. Other Operating Expense 24 188,183,330 182,696,413
8. Exchange Loss 22 - -
Operating Profit before Provision for Possible Losses 1,051,813,270 957,035,367
9. Provision for Possible Losses 25 14,206,365 3,769,541
Operating Profit 1,037,606,905 953,265,826
10. Non Operating Income /(Expense) 26 5,280,641 735,324
11. Provision for Possible Losses Write Back 27 10,926,317 7,729,444
Profit from Regular Activities 1,053,813,863 961,730,594
12. Income/(Expense) from Extra-ordinary Activities 28 40,736,694 26,073,578
Profit from All Activities 1,094,550,557 987,804,172
13. Provision for Staff Bonus 99,504,596 89,800,379
14. Provision for Income Tax 321,086,263 262,741,444
This Year 314,526,570 262,562,561
Up to Previous Year 6,559,693 178,883
Net Profit/(Loss) 673,959,698 635,262,349
Schedules 18 to 28 form integral part of the Profit and Loss Account.

T. R. Upadhyay , FCA
Bhuvan Dahal D. G. Agrawal M. B. Shah A. P. Bazgain Senior Partner
Head Finance & Planning Director Director Director T.R. Upadhya & Co.

Nabil Bank Limited

Profit & Loss Appropriation Account
Fiscal Year 2006/07 (2063/64)
Figures in NPR
PARTICULARS SCHEDULE THIS YEAR PREVIOUS YEAR
INCOME
1. Accumulated Profit up to Last Year 33,438,017 29,981,908
2. Current Year's Profit 673,959,698 635,262,349
3. Exchange Equalization Fund -
4. Transfer from Capital Adjustment Reserve 195,300,000 -
Total 902,697,715 665,244,257
EXPENSE
1. Accumulated Loss up to Last Year - -
2. Current Year's Loss - -
3. General Reserve 8,500,000 128,000,000
4. Contingent Reserve 1,000,000 1,000,000
5. Institution Development Fund - -
6. Dividend Equalization Fund 80,000,000 6,500,000
7. Employees Related Reserve - -
8. Proposed Cash Dividend 491,654,400 417,906,240
9. Proposed Stock Dividend (Bonus Shares) 196,661,760 -
10. Special Reserve Fund - -
11. Exchange Fluctuation Fund 11,500,000 6,400,000
12. Capital Redemption Reserve - -
13. Capital Adjustment Fund - 72,000,000
Total 789,316,160 631,806,240
14. Accumulated Profit/(Loss) 113,381,555 33,438,017

T. R. Upadhyay , FCA
Bhuvan Dahal D. G. Agrawal M. B. Shah A. P. Bazgain Senior Partner
Head Finance & Planning Director Director Director T.R. Upadhya & Co.

Nabil Bank Limited
Statement of Changes in Equity
Fiscal Year 2006/07 (2063/64)
Figures in NPR
PARTICULARS SHARE ACCUMULATED GENERAL PROPOSED CAPITAL SHARE CONTINGENT DIVIDEND CAPITAL EXCHANGE INTEREST TOTAL
CAPITAL PROFIT/ (LOSS) RESERVE BONUS RESERVE PREMIUM RESERVE EQUALIZATION ADJUSTMENT EQUALIZATION SPREAD AMOUNT
SHARE FUND FUND RESERVE FUND RESERVE
Opening Balance 491,654,400 33,438,017 975,000,000 74,000 7,750,000 20,000,000 300,300,000 44,200,000 2,578,000 1,874,994,417
Changes in Accounting Policy -
Restated Balance 491,654,400 33,438,017 975,000,000 - - 74,000 7,750,000 20,000,000 300,300,000 44,200,000 2,578,000 1,874,994,417
Surplus on Revaluation of Properties -
Deficit on Investments
Currency Translation Difference -
Net Gains and Losses not
recognised in the Income Statement -
Net Profit for the period 673,959,698 673,959,698
Adjustments: -
Issuance of Share Capital -
Deficit on Revaluation of Properties -
Surplus on Investments -
Cash Dividend (491,654,400) (491,654,400)
Proposed Stock Dividend (1,361,760) 196,661,760 (195,300,000) -
General Reserve Fund (8,500,000) 8,500,000 -
Contingent Reserve (1,000,000) 1,000,000 -
Dividend Equalization Fund (80,000,000) 80,000,000 -
Capital Adjustment Reserve -
Exchange Fluctuation Reserve (11,500,000) 11,500,000 -
Interest Spread Reserve -
Others (250,000) (250,000)
Closing Balance 491,654,400 113,381,555 983,500,000 196,661,760 - 74,000 8,500,000 100,000,000 105,000,000 55,700,000 2,578,000 2,057,049,715
Nabil Bank Limited

Cash Flow Statement
(For the period from 17 July 2006 to 16 July 2007)
Figures in NPR
PREVIOUS YEAR PARTICULARS THIS YEAR
(1,030,740,778) (a) Cash Flow from Operating Activities 544,233,717

1,572,877,673 1. Cash Received 2,009,665,057
1,092,644,431 1.1 Interest Income 1,517,960,858
138,293,913 1.2 Commission and Discount Income 150,608,550
185,483,662 1.3 Income from Foreign Exchange Transaction 209,926,167
73,557,805 1.4 Recovery of Loan Written Off 43,594,929
82,897,862 1.5 Other Incomes 87,574,553
(1,014,973,709) 2. Cash Payment (1,381,651,926)
(357,090,465) 2.1 Interest Expenses (555,211,049)
(219,780,853) 2.2 Staff Expenses (240,161,275)
(119,986,540) 2.3 Office Operating Expenses (130,833,888)
(228,136,589) 2.4 Income Tax Paid (355,691,118)
(89,979,262) 2.5 Other Expenses (99,754,596)
557,903,964 Cash Flow before changes in Working Capital 628,013,131
(6,184,774,567) (Increase)/Decrease of Current Assets (4,374,196,425)
(866,473,636) 1. (Increase)/Decrease in Money at Call and Short Notice 1,171,369,311
(2,916,306,027) 2. (Increase)/Decrease in Other Short Term Investment (2,949,416,537)
(2,379,529,909) 3. (Increase)/Decrease in Loans, Advances and Bills Purchase (2,627,099,741)
(22,464,995) 4. (Increase)/Decrease in Other Assets 30,950,542
4,596,129,825 Increase/(Decrease) of Current Liabilities 4,290,417,011
4,760,790,733 1. Increase/(Decrease) in Deposits 3,994,885,885
- 2. Increase/(Decrease) in Certificates of Deposits -
156,139,030 3. Increase/(Decrease) in Short Term Borrowings 709,370,790
(320,799,938) 4. Increase/(Decrease) in Other Liabilities (413,839,664)
1,101,598,752 (b) Cash Flow from Investment Activities 225,353,544
1,013,601,127 1. (Increase)/Decrease in Long-Term Investment 173,765,973
(21,060,114) 2. (Increase)/Decrease in Fixed Assets (27,263,127)
107,822,929 3. Interest Income from Long Term Investment 71,465,449
469,205 4. Dividend Income 720,323
765,605 5. Other 6,664,926
- (c) Cash Flow from Financing Activities -
- 1. Increase/(Decrease) in Long Term Borrowings (Bonds,Debentures etc) -
- 2. Increase/(Decrease) in Share Capital -
- 3. Increase/(Decrease) in Other Liabilities -
- 4. Increase/(Decrease) in Refinance/facilities received from NRB -
- (d) Income/(Loss) from change in exchange rate in Cash & Bank balance -
70,857,974 (e) Current Year's Cash Flow from All Activities 769,587,261
559,380,614 (f) Opening Cash and Bank Balance 630,238,588
630,238,588 (g) Closing Cash and Bank Balance 1,399,825,851
Nabil Bank Limited

Share Capital and Ownership Schedule 1
(As at 16 July 2007)
Figures in NPR
1. Share Capital
500,000,000 1.1 Authorized Capital 500,000,000
500,000,000 a) 5,000,000 Ordinary Shares of Rs. 100 each 500,000,000
b) ………...Non-redeemable Preference Shares of Rs……….. each
c) …………Redeemable Preference Shares of Rs……….. each
491,654,400 1.2 Issued Capital 491,654,400
491,654,400 1.3 Paid Up Capital 491,654,400
Share Ownership Figures in NPR

% SHARE CAPITAL % SHARE CAPITAL
70.00 344,158,100 1. Promoter 70.00 344,158,100

- - 1.1 Government of Nepal - -
50.00 245,827,200 1.2 Foreign Entity 50.00 245,827,200
- - 1.3 A Class Licensed Institutions
10.00 49,165,800 1.4 Other Licensed Institutions 10.00 49,165,800
10.00 49,165,100 1.5 Other Entities 10.00 49,165,100
- 1.6 Individual - -
- - 1.7 Others - -
30.00 147,496,300 2. General Public 30.00 147,496,300
100.00 491,654,400 Total 100.00 491,654,400
Details of Shareholders Holding 0.5% or More Shares

Figures in NPR
S.NO. PARTICULARS THIS YEAR
% AMOUNT
1 NB International Limited 50.00 245,827,200

2 Nepal Industrial Development Corporation 10.00 49,165,800
3 Rastriya Beema Sansthan 9.67 47,523,800
4 Mrs. Sarika Chaudhary 0.94 4,613,600
5 Mr. Nirwan Kumar Chaudhary 0.78 3,834,300
6 Mr. Barun Chaudhary 0.68 3,343,900
7 Mrs. Prerana Shah 0.59 2,925,000
8 Mr. Binod Kumar Chaudhary 0.56 2,742,400
Nabil Bank Limited

Reserves & Surplus
Schedule 2
Figures in NPR
975,000,000 1. General Reserve 983,500,000

- 2. Proposed Bonus Share 196,661,760
74,000 3. Capital Reserve 74,000
74,000 a. Share Premium 74,000
- 4. Capital Redemption Reserve -
300,300,000 5. Capital Adjustment Fund 105,000,000
30,328,000 6. Other Reserve and Fund 111,078,000
7,750,000 a. Contingent Reserve 8,500,000
- b. Institution Development Fund -
20,000,000 c. Dividend Equalization Fund 100,000,000
- d. Special Reserve Fund -
- e. Assets Revaluation Reserve -
2,578,000 f. Other Free Reserve 2,578,000
- g. Other Reserve Fund
33,438,017 7. Accumulated Profit/(Loss) 113,381,555
44,200,000 8. Exchange Fluctuation Fund 55,700,000
1,383,340,017 Total 1,565,395,315
Nabil Bank Limited

Debentures & Bonds
(As at 16 July 2007) Schedule 3
Figures in NPR
1. ……….% Bond/Debentures of Rs……..…each

Issued on …………… with maturity on ……….
(Redemption Reserve till date: Rs…….)
2. ……….% Bond/Debentures of Rs……..…each
Issued on …………… with maturity on ……….
(Redemption Reserve till date:Rs…….)
- Total (1+2) -
Nabil Bank Limited

Borrowings
Schedule 4
Figures in NPR
A. Local
- 1. Government of Nepal -
- 2. Nepal Rastra Bank (SLF) 600,000,000
- 3. Repo Liability -
173,201,710 4. Inter-Bank and Financial Institutions 282,572,500
- 5. Other Organized Institutions -
- 6. Others -
173,201,710 Total 882,572,500
B. Foreign
- 1. Banks -
- 2. Others -
- Total -
173,201,710 Total (A+B) 882,572,500
Nabil Bank Limited

Deposits Schedule 5
Figures in NPR
1. Interest Free Deposits

2,910,589,772 A. Current Deposits 3,395,239,772
2,289,241,671 1. Local Currency 2,594,683,384
- 1.1 Nepal Government -
15,500,567 1.2 "A" Class Licensed Institutions 39,088,780
60,749,352 1.3 Other Licensed Financial Institutions 131,372,938
1,949,255,619 1.4 Other Organized Institutions 2,104,649,010
263,736,133 1.5 Individuals 319,572,656
- 1.6 Others -
621,348,101 2. Foreign Currency 800,556,388
- 2.1 Nepal Government -
- 2.2 "A" Class Licensed Institutions -
567,067,611 2.4 Other Organized Institutions 749,350,005
52,500,188 2.5 Individuals 49,066,012
- 2.6 Others -
322,899,810 B. Margin Deposits 312,060,101
2,084,043 1. Employees 3,050,849
143,626,035 2. Guarantee 122,368,026
173,452,708 3. Letter of Credit 177,953,785
3,737,024 4. Others 8,687,441
42,896,336 C. Others 50,807,875
37,465,500 1. Local Currency 8,613,458
- 1.1 Financial Institutions -
180,000 1.3 Individual 6,208,458
- 2.1 Financial Institutions -
- 2.3 Individual 501,617
3,276,385,918 Total (A+B+C) 3,758,107,748
Contd.
Figures in NPR
Cont.
2. Interest Bearing Deposits

8,770,759,429 A. Savings Deposits 10,187,354,402
7,756,989,406 1. Local Currency 9,103,563,321
897,373,470 1.1 Institutions 1,082,746,277
6,859,615,936 1.2 Individuals 8,020,817,044
- 1.3 Others -
1,013,770,023 2. Foreign Currency 1,083,791,081
521,742,996 2.1 Institutions 577,126,213
492,027,027 2.2 Individuals 506,664,868
- 2.3 Others -
3,449,094,149 B. Fixed Deposits 5,435,189,720
1,103,946,864 1. Local Currency 2,892,430,577
801,490,795 1.1 Institutions 2,366,757,294
302,456,069 1.2 Individuals 525,673,283
- 1.3 Others -
2,345,147,285 2. Foreign Currency 2,542,759,143
2,092,809,862 2.1 Institutions 2,238,651,462
252,337,423 2.2 Individuals 304,107,681
- 2.3 Others -
3,851,159,944 C. Call Deposits 3,961,633,457
3,104,351,975 1. Local Currency 3,473,185,165
4,545,072 1.1 "A" Class Licensed Institutions -
3,022,472,301 1.3 Other Organized Institutions 3,275,021,723
34,835,568 1.4 Individuals 27,302,840
- 1.5 Others -
- 2.1 "A" Class Licensed Institutions -
- 2.2 Other Licensed Financial Institutions -
93,469 2.4 Individuals 82,426
- 2.5 Others -
- D. Certificate of Deposits -
- 1. Organized Institutions -
- 2. Individuals -
- 3. Others -
16,071,013,522 Total (A+B+C+D) 19,584,177,579
19,347,399,440 Total Deposits (1+2) 23,342,285,327
Nabil Bank Limited

Bills Payable
Figures in NPR
23,759,143 1. Local Currency 37,251,554

92,536,853 Total 83,514,820
Nabil Bank Limited

Other Liabilities Schedule 7
Figures in NPR
102,420,668 1. Gratuity Fund 101,051,123

- 2. Employees Provident Fund -
- 3. Employees Welfare Fund -
89,800,379 4. Provision for Staff Bonus 99,504,596
- 5. Interest Payable on Deposits -
70,839 6. Interest Payable on Borrowings 569,899
26,154,162 7. Unearned Discount and Commission 29,629,132
143,225,905 8. Sundry Creditors 143,924,756
- 9. Branch Reconciliation Account -
750,000 10. Provision for Audit Expense 750,000
9,727,788 11 Others 3,123,215
372,149,741 Total 378,552,721
Nabil Bank Limited

Cash Balance
Figures in NPR
220,109,142 1. Local Currency (Including Coins) 243,058,422

237,818,512 Total 270,406,987
Nabil Bank Limited

Balance with Nepal Rastra Bank Schedule 9
(As at 16 July 2007) Figures in NPR
PREVIOUS YEAR PARTICULARS LOCAL CURRENCY FOREIGN CURRENCY THIS YEAR
INR CONVERTIBLE FCY TOTAL
318,358,771 1. Nepal Rastra Bank 1,101,036,919 - 12,378,517 12,378,517 1,113,415,436

331,593,714 a. Current Account 1,113,323,264 - 12,378,517 12,378,517 1,125,701,781
(13,234,943) b. Other Account (12,286,345) - - - (12,286,345)
Note:Balance as per the confirmation statements is Rs. 1,236,598,879
Nabil Bank Limited

Balance with Banks / Financial Institutions Schedule 10
PREVIOUS YEAR PARTICULARS LOCAL CURRENCY FOREIGN CURRENCY THIS YEAR
INR CONVERTIBLE FCY TOTAL
26,904,282 1. Local Licensed Institutions 31,454,568 - - - 31,454,568

26,904,282 a. Current Account 31,454,568 - - - 31,454,568
- b. Other Account - - - - -
47,157,023 2. Foreign Banks - (44,994,134) 29,542,994 (15,451,140) (15,451,140)
47,157,023 a. Current Account - (44,994,134) 29,542,994 (15,451,140) (15,451,140)
- b. Other Account - - - - -
74,061,305 Total 31,454,568 (44,994,134) 29,542,994 (15,451,140) 16,003,428
Note: Balance as per the confirmation statements is Rs. 386,934,141
Nabil Bank Limited

Money at Call and Short Notice
Schedule 11
Figures in NPR
670,000,000 1. Local Currency 100,000,000

1,064,901,943 2. Foreign Currency 463,532,632
1,734,901,943 Total 563,532,632
Nabil Bank Limited

Investments Schedule 12
Figures in NPR
PREVIOUS YEAR PARTICULARS PURPOSE THIS YEAR
TRADING OTHER
1,222,468,660 1. Nepal Government Treasury Bills - 4,085,835,004 4,085,835,004

- 2. Nepal Government Saving Bonds - - -
1,078,994,678 3. Nepal Government Other Securities - 722,513,499 722,513,499
- 4. Nepal Rastra Bank Bonds - - -
- 5. Foreign Securities - - -
65,704,000 6. Local Licensed Institutions - 12,500,000 12,500,000
3,706,940,518 7. Foreign Banks - 3,846,194,711 3,846,194,711
27,563,000 8. Organized Institutions' Shares - 57,853,000 57,853,000
76,629,082 9. Organized Institutions' Bonds and - 229,104,542 229,104,542
Debentures
2,358,170 10. Other Investments: - - -
1,257,000 10.1. NCM Mutual Fund (100,000 units 1,257,000 1,257,000
@ Rs.10 & 100,000 units Right Share @
Rs. 2.57. Market Value per unit Rs. 16)
1,101,170 10.2. SWIFT Investment - 1,050,916 1,050,916
6,180,658,108 Total Investment - 8,956,308,672 8,956,308,672
2,125,000 Provision - 10,998,105 10,998,105
6,178,533,108 Net Investment - 8,945,310,567 8,945,310,567
Nabil Bank Limited
Investment in Shares, Debentures and Bonds Schedule 12 (A)
PREVIOUS YEAR PARTICULARS COST PRICE MARKET VALUE PROVISION
27,563,000 1. Investment in Shares 57,853,000 14,352,000 -

2,125,000 1.1 Nepal Awas Bikas Bitta Company Limited -
[30,000 ordinary shares of Rs. 100 paid up (Bonus Shares 8,750)]
7,485,000 1.2 Rural Microfinance Development Centre Limited 37,500,000 N/L
(74,850 ordinary shares of Rs. 100 paid up)
3,000,000 1.3 Nirdhan Utthan Bank Limited 3,000,000 3,300,000
[ 33,000 ordinary shares of Rs. 100 paid up (Bonus Shares 3,000)]
1,200,000 1.4 Chhimek Bikash Bank Limited 3,600,000 8,712,000
1,500,000 1.5 Deprosc Development Bank Limited 1,500,000 2,340,000
1,500,000 1.6 Sudur Paschimanchal Grameen Bikash Bank Limited 1,500,000 N/L
3,000,000 1.7 Purbanchal Grameen Bikash Bank Limited 3,000,000 N/L
30,000 ordinary shares of Rs. 100 paid up
3,000,000 1.8 Madhya Paschimanchal Grameen Bikash Bank Limited 3,000,000 N/L
2,000,000 1.9 Sanakisan Bikash Bank Limited 2,000,000 N/L
2,400,000 1.10 Swabalamban Bikash Bank Limited 2,400,000 N/L
353,000 1.11 Karja Suchana Kendra Limited 353,000 N/L
76,629,082 2. Investment in Debentures and Bonds 229,104,542 219,720,729 -
76,629,082 2.1 Development Bank of Singapore Bonds 66,460,278 68,074,571 -
(Bonds of face value USD 1,000,000 at coupon rate 7.875%
maturing on 10 Aug '09)
- 2.2. ICICI Bank Bonds 162,644,264 151,646,159 10,998,105
(Bonds of face value USD 2,500,000 at coupon rate 6.375%
maturing on 20 Sep '11)
104,192,082 Total Investment 286,957,542 - -
3. Provision for Loss
2,425,000 3.1 Up to Previous Year 2,125,000
NABIL BANK Annual Report 2006/07
(300,000) 3.2 Addition/(Writeback) This Year 8,873,105

2,125,000 Total Provision 10,998,105 -
56
Note : Companies except Rural Micro Finance Development Centre Limited, Nirdhan Utthan Bank Limited, Chhimek Samaj Bank Limited & Deprosc Development Bank
Limited have not declared and distributed dividend in the last three years.
N/L stands for not listed in Nepal Stock Exchange Limited (NEPSE).
Nabil Bank Limited
Classification of Loans, Advances and Bills Purchased & Provisioning Schedule 13
(As at 16 July 2007 ) Figures in NPR
PREVIOUS YEAR PARTICULARS LOANS & ADVANCES BILLS PURCHASED & DISCOUNTED THIS YEAR
DOMESTIC FOREIGN TOTAL DOMESTIC FOREIGN TOTAL
PRIORITY SECTOR OTHER
INSURED UNINSURED
13,096,157,779 1. Performing Loans 22,429,259 1,058,512,277 14,394,754,012 6,742,413 15,482,437,961 79,816,627 162,475,193 242,291,820 15,724,729,781
13,010,864,147 1.1 Pass 22,429,259 1,057,872,750 14,309,145,741 6,742,413 15,396,190,163 79,816,627 162,475,193 242,291,820 15,638,481,983
85,293,632 1.2 Restructured - 639,527 85,608,272 - 86,247,799 - - - 86,247,799
182,624,480 2. Non-Performing Loans 9,818,925 6,198,830 160,955,585 545,558 177,518,898 239,345 535,740 775,085 178,293,983
62,665,914 2.1 Sub-Standard 1,545,331 1,749,304 116,409,964 - 119,704,599 - - - 119,704,599
29,565,952 2.2 Doubtful 310,640 665,610 13,495,396 - 14,471,646 - - - 14,471,646
90,392,614 2.3 Loss 7,962,954 3,783,916 31,050,225 545,558 43,342,653 239,345 535,740 775,085 44,117,738
13,278,782,259 A. Total Loan (1+2) 32,248,184 1,064,711,107 14,555,709,598 7,287,971 15,659,956,860 80,055,972 163,010,933 243,066,905 15,903,023,765
3. Loan Loss Provision
130,343,145 3.1 Pass 56,073 10,578,727 162,377,433 67,424 173,079,657 798,166 1,624,752 2,422,918 175,502,575
83,958,156 3.2 Restructured - 79,941 79,761,153 - 79,841,094 - - - 79,841,094
42,573,904 3.3 Sub-Standard 96,583 437,326 56,102,491 - 56,636,400 - - - 56,636,400
13,896,064 3.4 Doubtful 38,830 332,805 6,747,808 - 7,119,443 - - - 7,119,443
85,467,837 3.5 Loss 1,990,738 3,783,916 31,050,225 545,558 37,370,437 239,345 535,740 775,085 38,145,522
356,239,106 B.Total Provisioning 2,182,224 15,212,715 336,039,110 612,982 354,047,031 1,037,511 2,160,492 3,198,003 357,245,035
4. Provisioning up to previous year
108,434,222 4.1 Pass 110,558 6,751,390 120,667,099 381,133 127,910,180 846,817 1,586,148 2,432,965 130,343,145
126,911,349 4.2 Restructured 89,032 - 83,869,124 - 83,958,156 - - - 83,958,156
6,865,463 4.3 Sub-Standard 30,858 413,750 42,129,296 - 42,573,904 - - - 42,573,904
1,415,926 4.4 Doubtful 295,637 540,799 13,059,628 - 13,896,064 - - - 13,896,064
116,939,615 4.5 Loss 1,641,592 4,313,063 76,468,117 825,340 83,248,112 357,365 1,862,360 2,219,725 85,467,837
360,566,575 C.Total Previous Year's Provision 2,167,677 12,019,002 336,193,264 1,206,473 351,586,416 1,204,182 3,448,508 4,652,690 356,239,106
7,429,444 D. Written Back This Year - - 154,154 593,491 747,645 166,671 1,288,016 1,454,687 2,202,331
3,101,975 E. Addition This Year 14,547 3,193,713 - - 3,208,260 - - - 3,208,260
(4,327,469) F. Changes This Year 14,547 3,193,713 (154,154) (593,491) 2,460,615 (166,671) (1,288,016) (1,454,687) 1,005,929
12,922,543,153 Net Loan (A-B) 30,065,960 1,049,498,392 14,219,670,487 6,674,989 15,305,909,828 79,018,461 160,850,441 239,868,902 15,545,778,730
Nabil Bank Limited
Securitywise Loans, Advances and Bills Purchased
Schedule 13 (A)
Figures in NPR
13,278,782,259 A. Secured 15,903,023,765

11,967,488,922 1. Movable/Immovable Assets 15,035,221,333
188,670,000 2. Guarantee of Local Licensed Institutions -
- 3. Government Guarantee -
438,808,136 4. Internationally Rated Bank Guarantee 487,549,843
202,407,000 5. Export Documents 12,808,031
299,783,201 6. Fixed Deposit Receipts 336,081,051
182,823,470 a. Own 203,247,042
116,959,731 b. Other Licensed Institutions 132,834,009
181,625,000 7. Government Securities 30,515,755
- 8. Counter Guarantee -
- 9. Personal Guarantee 847,752
10. Other Securities -
- B. Unsecured -
13,278,782,259 Total 15,903,023,765
Nabil Bank Limited
Fixed Assets Schedule 14
PREVIOUS YEAR PARTICULARS ASSETS THIS YEAR
BUILDING VEHICLES MACHINERY OFFICE EQUIPMENT SOFTWARE OTHERS
1. Cost Price % AMOUNT

544,231,379 a. Previous Year Balance 96,090,321 94,530,511 - 297,622,560 64,262,508 - 552,505,900
26,716,838 b. Addition during the Year - 13,253,400 - 13,786,643 196,350 - 27,236,393
- c. Revaluation/Write Back This Year - - - - - -
(15,283,934) d. Sold during the Year - (5,433,797) - (274,125) - (5,707,922)
(3,158,383) e. Write off during the Year - (2,360) - (31,170,655) (1,039,001) - (32,212,016)
552,505,900 Total Cost (a+b+c+d+e) 96,090,321 102,347,754 - 279,964,423 63,419,857 - 541,822,355
2. Depreciation
250,042,384 a. Up to Previous Year 22,069,795 42,873,146 - 202,409,428 30,164,375 - 297,516,744
57,718,195 b. For This Year 3,701,026 11,199,674 - 25,120,181 12,801,420 - 52,822,301
- c. Revaluation/Write Back This Year - - - - - - -
(7,407,756) d. Depreciation of Sold Assets - (3,030,025) - (126,621) - - (3,156,646)
(2,836,079) e. Depreciation of Writen Off Assets - (1,740) - (28,819,681) (1,039,001) - (29,860,422)
297,516,744 Total Depreciation 25,770,821 51,041,055 - 198,583,307 41,926,794 - 317,321,977
254,989,156 3. Book Value (WDV*) (1-2) 70,319,500 51,306,699 - 81,381,116 21,493,063 - 224,500,378
49,781,848 4. Land - - - - - 48,749,298 48,749,298
- 5. Capital Construction (pending Capitalization) - - - - - - -
14,315,143 6. Leasehold Assets - - - - - 13,645,548 13,645,548
319,086,147 Total (3+4+5+6) 70,319,500 51,306,699 - 81,381,116 21,493,063 62,394,846 286,895,224
* Written Down Value
Nabil Bank Limited

Non Banking Assets INR CONVERTIBLE FCY TOTAL Schedule 15
PREVIOUS YEAR NAME & ADDRESS OF BORROWER DATE

DATEACQUISITION OF
OF ACQUISITION TOTAL AMOUNT OF LOSS
LOSS PROVISION
PROVISION "THIS YEAR'S NET“ THIS YEAR'S NET
BORROWER
BORROWEROR
ORPARTY
PART NON BANKING ASSETS NON-BANKING
NON BANKING ASSETS % NON BANKING ASSETS
NON-BANKING ASSETS
AMOUNT
-
Grand Total - - -
Nabil Bank Limited

Other Assets Schedule 16
Figures in NPR
4,265,124 1. Stock of Stationery 4,308,416

109,531,140 2. Income receivable on Investment 107,863,547
188,633,517 3. Accrued Interest on Loan 112,186,850 -
(109,673,450) Less: Interest Suspense Account 112,186,850
- 4. Commission Receivable -
38,459,036 5. Sundry Debtors 41,870,658
286,709,452 6. Staff Loans & Advances 335,203,606
14,495,026 7. Pre - Payments 20,124,082
- 8. Cash in Transit -
- 9. Other Transit items (including Cheques) -
- 10. Drafts paid without notice -
- 11. Expenses not written off -
- 12. Branch Reconciliation Account -
12,248,294 13. Others 2,679,695
544,668,139 Total 512,050,004
Nabil Bank Limited

Other Assets (Additional Statement) Schedule 16(A)
UP TO 1 YEAR 1 TO 3 YEAR ABOVE 3 YEARS TOTAL
188,633,517 1. Accrued Interest on Loan 88,627,612 19,071,764 4,487,474 112,186,850

- 2. Drafts Paid without notice -
- 3. Branch Reconciliation
Account -
Nabil Bank Limited

Contingent Liabilities Schedule 17
- 1. Claims on Institution but not accepted by the Institution -

2,481,592,335 2. Letter of Credit 2,564,470,480
1,848,687,339 a. Maturity up to 6 Months 2,180,546,214
632,904,996 b. Maturity more than 6 Months 383,924,266
- 3. Rediscounted Bills -
1,706,406,981 4. Guarantees/Bonds 1,703,820,140
81,789,751 a. Bid Bonds 81,864,583
1,624,617,230 b. Performance Bonds 1,621,955,557
- c. Other Guarantees/Bonds -
- 5. Unpaid Shares in Investment -
78,936,228 6. Forward Exchange Contract Liabilities 435,433,382
166,387,137 7. Bills under Collection 140,555,321
730,225,319 8. Acceptance & Endorsement 528,400,356
- 9. Underwriting Commitment -
- 10. Irrevocable Loan Commitment -
210,728,691 11. Guarantee issued against Counter Guarantee of Internationally Rated Banks 192,579,807
102,822,500 12. Advance Payment Guarantee 130,067,839
- 13. Financial Guarantee -
21,841,871 14. Income Tax -
5,498,941,062 Total 5,695,327,325
Nabil Bank Limited

Interest Income Schedule 18
(For the period from 17 July 2006 to 16 July 2007) Figures in NPR
986,231,566 A. Loans, Advances and Overdraft 1,167,255,366

653,811,235 1. Loans & Advances 789,386,811
332,420,331 2. Overdraft 377,868,555
147,861,828 B. Investment 152,005,445
130,197,489 1. Government Securities 132,229,445
37,289,515 a. Treasury Bills 71,195,842
92,907,974 b. Development Bonds 61,033,603
- c. National Saving Certificates -
14,914,955 2. Foreign Securities 10,431,846
5,035,343 a. Development Bank of Singapore Bond 4,899,109
- b. ICICI Bank Bond 5,532,737
9,879,612 c. IDBI Bank Bond -
- 3. Nepal Rastra Bank Bonds -
- 4. Debenture & Bonds -
- a. Bank/Financial Institutions -
- b. Other Organizations -
2,749,384 5. Interbank Investment 9,344,154
2,749,384 a. Bank/Financial Institutions 9,344,154
- b. Other Organizations -
3,299,933 C. Agency Balances 4,844,709
- 1. Local Banks/Financial Institutions -
3,299,933 2. Foreign Banks 4,844,709
39,482,145 D. Money at Call and Short Notice 62,940,438
2,312,904 1. Local Banks/Financial Institutions 1,387,874
37,169,241 2. Foreign Banks 61,552,564
133,123,028 E. Others 200,712,756
- 1. Certificate of Deposits -
- 2. Inter-Bank/Financial Institutions Loan -
130,941,143 3. Foriegn Currency Placements 199,348,471
2,181,885 4. Staff Loan 1,364,285
1,309,998,500 Total 1,587,758,714
Nabil Bank Limited

Interest Expense
Schedule 19
Figures in NPR
345,966,768 A. Deposits 533,129,694

118,349,889 1. Fixed Deposits 199,008,172
47,869,322 1.1 Local Currency 79,076,915
70,480,567 1.2 Foreign Currency 119,931,257
139,749,884 2. Savings Deposits 202,360,936
136,140,423 2.1 Local Currency 194,615,655
87,866,995 3. Call Deposits 131,760,586
75,497,119 3.1 Local Currency 112,716,547
- 4. Certificate of Deposits -
11,194,536 B. Borrowings 22,580,415
- 1. Debentures & Bonds -
1,622,910 2. Loan from Nepal Rastra Bank 4,397,338
9,571,626 3. Inter Bank /Financial Institutions Borrowing 18,183,077
- 4. Other Organized Institutions -
- 5. Others -
- C. Others -
357,161,304 Total 555,710,109
Nabil Bank Limited

Commission & Discount
Schedule 20
Figures in NPR
6,322,210 A. Bills Purchase & Discount 6,912,481

882,240 1. Local 503,044
5,439,970 2. Foreign 6,409,437
113,770,318 B. Commission 121,956,753
31,413,940 1. Letters of Credit 34,462,484
20,684,491 2. Guarantees 23,005,527
2,243,020 3. Collection Fees 2,774,728
34,470,010 4. Remittance Fees 32,123,215
24,958,857 5. Credit Card 29,590,799
- 6. Share Underwriting/Issue -
- 7. Government Transactions -
- 8. Agency Commission -
- 9. Exchange Fee -
18,201,385 C. Others 21,739,316
138,293,913 Total 150,608,550
Nabil Bank Limited

Other Income
Schedule 21
Figures in NPR
1,835,592 1. Safe Deposit Lockers Rental 2,580,225

8,819,196 2. Issue & Renewals of Credit Cards 9,123,005
7,257,359 3. Issue & Renewals of Debit Cards 8,606,901
8,988,260 4. Telex / T. T. 9,647,571
41,451,574 5. Service Charges 44,147,223
- 6. Renewal Fees -
14,545,881 7. Others 13,469,628
82,897,862 Total 87,574,553
Nabil Bank Limited

Exchange Gain/ (Loss)
Schedule 22
Figures in NPR
25,260,491 a. Revaluation 45,987,379

160,223,171 b. Trading (except Exchange Fees) 163,938,788
185,483,662 Total Gain/(Loss) 209,926,167
Nabil Bank Limited

Personnel Expense
Schedule 23
Figures in NPR
98,684,562 1. Salary 107,006,274

51,835,067 2. Allowances 57,232,621
8,643,542 3. Contribution to Provident Fund 9,019,316
1,413,616 4. Training Expenses 3,733,743
2,260,171 5. Uniform 2,797,037
74,314 6. Medical 52,508
5,265,425 7. Insurance 4,964,802
28,808,311 8. Pension and Gratuity Provision 31,280,044
22,795,845 9. Others 24,074,930
219,780,853 Total 240,161,275
Nabil Bank Limited

Office Operating Expense
Schedule 24
Figures in NPR
23,380,942 1. House Rent 26,353,983

8,564,714 2. Electricity & Water 9,172,009
2,923,765 3. Repair & Maintenance 2,624,031
802,137 a. Building 527,619
2,121,628 b. Vehicles 2,096,412
- c. Others -
5,039,425 4. Insurance 5,715,127
14,612,985 5. Postage, Telex, Telephone & Fax 15,069,127
3,982,371 6. Office Equipment and Furniture Repair 4,430,647
1,536,553 7. Travelling Allowances & Expenses 2,039,238
9,807,924 8. Printing & Stationery 11,002,508
302,359 9. Books & Periodicals 455,644
4,846,816 10. Advertisements 5,318,536
1,977,217 11. Legal Expenses 1,564,585
72,277 12. Donations 143,301
3,524,419 13. Expenses relating to Board of Directors 3,495,426
1,362,000 a. Meeting Fees 2,231,000
2,162,419 b. Other Expenses 1,264,426
908,318 14. Annual General Meeting Expenses 818,270
1,076,744 15. Expenses relating to Audit 750,000
450,000 a. Audit Fees 450,000
626,744 b. Other Expenses 300,000
- 16. Commission on Remittances -
57,718,195 17. Depreciation on Fixed Assets 52,822,301
4,991,678 18. Amortization of Deferred Expenses 4,527,141
- 19. Share Issue Expenses -
8,488,791 20. Technical/Consultancy Services Fee 9,888,286
- 21. Entertainment -
- 22. Written Off Expenses -
7,021,068 23. Security Expenses 9,307,560
601,487 24. Credit Guarantee Premium 432,710
- 25. Commission & Discount -
21,318,365 26. Others 22,252,900
6,262,811 a. Fuel Expenses 6,216,268
1,427,771 b. Tea/ Coffee/ Snacks 1,465,389
1,881,457 c. Contract Service Expense 2,022,916
2,891,752 d. Prize Expense 3,333,094
2,499,485 e. Customer Relations and Sponsorship 3,231,669
865,526 f. Membership Fees 648,876
1,476,154 g. Janitorial 1,590,634
4,013,409 h. Others 3,744,054
182,696,413 Total 188,183,330
Nabil Bank Limited

Provision for Possible Losses
(Fiscal Year 2006/07)
Schedule 25
Figures in NPR
3,101,975 1. Loans and Advances 3,208,260

- 2. Investments 10,998,105
- 3. Non-Banking Assets
667,566 4. Other Assets -
3,769,541 Total 14,206,365
Nabil Bank Limited

Non-Operating Income/(Loss)
Schedule 26
Figures in NPR
765,605 1. Profit/(Loss) on Sale of Investments 6,664,926

(499,486) 2. Profit/(Loss) on Sale of Fixed Assets (2,104,608)
469,205 3. Dividend (Net) 720,323
- 4. Subsidies Received from Nepal Rastra Bank -
- a. Compensation Agreement for Losses of Specified Branches -
- b. Interest Indemnity -
- c. Exchange Counter -
- 5. Others -
735,324 Total Non-Operating Income/(Loss) 5,280,641
Nabil Bank Limited

Provision for Possible Losses Write Back
(Fiscal Year 2006/07)
Schedule 27
Figures in NPR
7,429,444 1. Loans and Advances 2,202,331

- 2. Non-Banking Assets -
300,000 3. Investments 2,125,000
- 4. Other Assets 6,598,986
7,729,444 Total 10,926,317
Nabil Bank Limited

Income/(Expense) from Extra-Ordinary Activities
Schedule 28
Figures in NPR
73,557,805 1. Recovery of Write off Loan 43,594,929

- 2. Voluntary Retirement Scheme Expenses -
(47,484,227) 3. Bad Loan Written Off [28 (a)] (2,858,235)
- 4. Other Income/Expense -
26,073,578 Total 40,736,694
Nabil Bank Limited
Details of Loans Written Off INR CONVERTIBLE FCY TOTAL Schedule 28 (A)
(Fiscal Year 2006/07) Figures in NPR
PREVIOUS
S.NO YEAR NAME & ADDRESS OF BORROWER
TYPES OF LOAN DATE OF ACQUISITION
WRITTEN OFF AMOUNT TOTAL AMOUNT
TYPE OF SECURITY BASISOF
OF SECURITY LOSS
LOANPROVISION
APPROVED BY "THIS YEAR'S
EFFORTS MADENET“
FOR REMARKS
& AMOUNT VALUATION NAME/DESIGNATION RECOVERY OF LOANS
BORROWER OR PART NON BANKING ASSETS NON BANKING ASSETS NON-BANKING ASSETS
1 Working Capital Loan Notice

2 Project Loan publication,
blacklisting in the
3 Fixed Capital Loan
Card Association
4 Personal Loan and regular
5 Credit Card Loan 2,858,235 follow ups
Total Loan 2,858,235
Nabil Bank Limited

Statement of Loans and Advances extended to Directors/ Chief Executive/ Promoters/ Employees and
Shareholders with more than 1% Shares Schedule 29
NAME OF PROMOTER/DIRECTOR/ OUTSTANDING UP TO LAST YEAR RECOVERED IN CURRENT YEAR ADDITIONAL LENDING OUTSTANDING AS OF 16 JULY 2007
CHIEF EXECUTIVE OFFICER

PRINCIPAL INTEREST PRINCIPAL INTEREST IN CURRENT YEAR PRINCIPAL INTEREST
A. Directors - - - - % - AMOUNT - -
1. - - - - - - -
2. - - - - - - -
3. - - - - - - -
B. Chief Executive Officer - - - - - - -
1. - - - - - - -
2. - - - - - - -
3. - - - - - - -
C. Promoters - - - - - - -
1. - - - - - - -
2. - - - - - - -
3. - - - - - - -
D. Employees - - - - - - -
1. - - - - - - -
2. - - - - - - -
3. - - - - - - -
E. Shareholders - - - - - - -
1. - - - - - - -
66
2. - - - - - - -
3. - - - - - - -
Total - - - - - - -
Note: Loan given to employees as per Employees' Rules and against Fixed Deposits/Government Securities not presented above.
Nabil Bank Limited

Capital Fund Table
(As at 16 July 2007 )
Schedule 30
Figures in NPR
DETAILS THIS YEAR PREVIOUS YEAR

A. Core Capital 1,992,849,715 1,823,044,417
1) Paid-up Capital 491,654,400 491,654,400
2) Share Premium 74,000 74,000
3) Non Redeemable Preference Share - -
4) General Reserve Fund 983,500,000 975,000,000
5) Cumulative Profit & (Loss) 113,381,555 33,438,017
6) Capital Redemption Reserve - -
7) Capital Adjustment Fund 105,000,000 300,300,000
8) Proposed Bonus Share 196,661,760 -
9) Other Free Reserves 2,578,000 2,578,000
10) Dividend Equalization Fund 100,000,000 20,000,000
Less:
- Goodwill - -
- Investment in Excess of Prescribed Limit in Shares & Debentures - -
- Fictitious Assets - -
- Investment in Securities of Companies having Financial Interest - -
B. Supplementary Capital 314,782,680 266,279,605

1) General Loan Loss Provision 175,502,575 130,343,145
2) Asset Revaluation Reserve - -
3) Hybrid Capital Instruments - -
4) Unsecured Subordinated Term Debt - -
5) Exchange Equalization Fund 55,700,000 44,200,000
6) Additional Loan Loss Provision 64,082,000 81,861,460
7) Investment Adjustment Reserve - -
8) Provision for Loss on Investment 10,998,105 2,125,000
9) Other Reserves 8,500,000 7,750,000
C. Total Capital Fund (A+B) 2,307,632,395 2,089,324,022
D. Minimum Capital Fund Requirement on
the basis of Risk Weighted Assets
Total Capital Fund Requirement (11%) 2,108,344,264 1,867,400,527
Core Capital Requirement (5.5%) 1,054,172,132 933,700,263
Capital Adequacy Ratio (Core) 10.40% 10.74%
Capital Adequacy Ratio (Total) 12.04% 12.31%
Capital Fund Excess by 1.04% 199,288,132 221,923,495
Core Capital Excess by 4.90% 938,677,584 889,344,154
Nabil Bank Limited
Table of Risk Weighted Assets Schedule 30(A)
S. NO. PARTICULARS WEIGHT THIS YEAR PREVIOUS YEAR

%
AMOUNT RWA AMOUNT RWA
A. On Balance sheet assets

1 Cash Balance 0 270,406,987 - 237,818,512 -
2 Gold (Exchangable) 0 - - - -
3 Balance at Nepal Rastra Bank 0 1,113,415,436 - 318,358,771 -
4 Investment on Government Securities 0 4,808,348,503 - 2,301,463,338 -
5 Investment on Nepal Rastra Bank Securities 0 - - - -
6 Fully Secured Loan against own Fixed 0 203,247,042 - 182,823,470 -
Deposit Receipt
7 Fully Secured Loan against NRB/Govt. 0 30,515,755 - 181,625,000 -
Securities
8 Accrued Interest Receivable on Govt. 0 31,283,981 - 15,559,603 -
Securities
9 Balance at Local Banks & Financial Institutions 20 31,454,568 6,290,914 26,904,282 5,380,856
10 Fully Secured Loan against other banks' Fixed 20 132,834,009 26,566,802 116,959,731 23,391,946
Deposit Receipt
11 Balance at Foreign Banks 20 (15,451,140) - 47,157,023 9,431,405
12 Money at Call 20 563,532,632 112,706,526 1,734,901,943 346,980,389
13 Loan against Guarantee of A+ rated 20 487,549,843 97,509,969 438,808,136 87,761,627
International Banks
14 Other Investment at A+ rated International 20 4,075,299,253 815,059,851 3,783,569,600 756,713,920
Banks
15 Investment on Share/Debenture/Bond 100 57,853,000 57,853,000 27,563,000 27,563,000
16 Other Investments 100 14,807,916 14,807,916 68,062,170 68,062,170
17 Other Loans, Advances and Bills Purchased/ 100 15,048,877,116 15,048,877,116 12,358,565,922 12,358,565,922
Discounted
18 Fixed Assets 100 286,895,224 286,895,224 319,086,147 319,086,147
19 Other Net Accrued Interest Receivable 100 85,796,591 85,796,591 172,931,604 172,931,604
(Total AIR - AIR on Govt Sec -Int. Sus)
20 Other Assets (excluding Advance Tax Deposit) 100 393,893,185 393,893,185 356,176,932 356,176,932
Total (A) 27,620,559,901 16,946,257,093 22,688,335,184 14,532,045,918
B. Off Balance Sheet Items
1 Bills Collection 0 140,555,321 - 166,387,137 -
2 Forward Foreign Exchange Contract 10 435,433,382 43,543,338 78,936,228 7,893,623
3 Letters of Credit with maturity up to 6 months 20 2,180,546,214 436,109,243 1,848,687,339 369,737,468
4 Guarantee against Counter Guarantee of 20 192,579,807 38,515,961 210,728,691 42,145,738
A+ Rated Int'l Banks
5 Letters of Credit with maturity >6 months 50 383,924,266 191,962,133 632,904,996 316,452,498
6 Bid Bond 50 81,864,583 40,932,292 81,789,751 40,894,876
7 Performance Bond 50 1,621,955,557 810,977,779 1,624,617,230 812,308,615
8 Underwriting Commitment 100 - - - -

9 Advance Payment Guarantee 100 130,067,839 130,067,839 102,822,500 102,822,500
68
10 Financial Guarantee 100 - - - -

11 Other Guarantee 100 - - - -
12 Irrevocable Loan Commitment 100 - - - -
13 Contingent Tax Liability 100 - - 21,841,871 21,841,871
14 Other Contingent Liabilities (Acceptance) 100 528,400,356 528,400,356 730,225,319 730,225,319
Total (B) 5,695,327,325 2,220,508,940 5,498,941,062 2,444,322,507
Total (A+B) 33,315,887,226 19,166,766,033 28,187,276,246 16,976,368,426
69
Nabil Bank Limited

Principal Indicators
Schedule 30(A)
PARTICULARS INDICATORS FINANCIAL YEAR
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
1. Net Profit/Gross Income % 16.57 29.16 31.92 34.33 35.32 32.16

2. Earnings Per Share Rs. 55.25 84.66 92.61 105.49 129.21 137.08
3. Market Value Per Share Rs. 700 740 1,000 1,505 2,240 5,050
4. Price Earning Ratio Times 12.67 8.74 10.80 14.27 17.34 36.84
5. Dividend (including bonus) on Share Capital % 30 50 65 70 85 140
6. Cash Dividend on Share Capital % 30 50 65 70 85 100
7. Interest Income/Loans & Advances % 10.34 9.83 9.45 8.70 8.29 8.14
8. Employee Expense/Total Operating Expense % 19.48 30.34 29.43 31.50 28.93 24.41
9. Interest Expense on Total Deposit and % 2.91 2.09 1.97 1.68 2.09 2.54
Borrowings
10. Exchange Gain/Total Income % 9.41 10.09 11.03 12.24 10.31 10.02
11. Staff Bonus/ Total Employee Expenses % 30.45 31.51 39.78 42.20 40.86 41.43
12. Net Profit/Loans & Advances % 3.51 5.27 5.33 5.32 5.24 4.62
13. Net Profit/ Total Assets % 1.53 2.43 2.73 3.06 3.23 2.72
14. Total Credit/Deposit % 50.31 60.34 60.55 75.05 68.63 68.13
15. Total Operating Expenses/Total Assets % 4.20 4.06 3.69 3.73 3.86 3.97
16. Adequacy of Capital Fund on Risk Weighted Assets
a. Core Capital % 10.53 11.45 12.12 11.35 10.78 10.40
b. Supplementary Capital % 3.33 1.60 1.44 1.09 1.52 1.64
c. Total Capital Fund % 13.86 13.05 13.56 12.44 12.31 12.04
17. Liquidity (CRR) % 6.78 8.51 6.87 3.83 3.26 6.00
18. Non Performing Loans/Total Loans % 7.14 5.54 3.35 1.32 1.38 1.12
19. Weighted Average Interest Rate Spread % 4.02 4.51 4.46 5.01 4.90 4.15
20. Book Net Worth Per Share Rs. 233 267 301 337 381 418
21. Total Shares Number 4,916,544 4,916,544 4,916,544 4,916,544 4,916,544 4,916,544
22. Total Employees Number 382 326 372 426 441 427
Note: Denominators of point no.7,9,12,13 & 15 above are average of last year and this year figure
Numerator of point no 7 above is interest income loan and advances only.
Liquidity (point no 17 above) is cash and bank balance to total deposits as of year end.
Principal Accounting Policies Schedule 32
i) General information prescribes that the revenue should be recognised on

Nabil Bank Limited (“the Bank”) is a limited liability accrual basis. The practice followed by the Bank (as
company domiciled in Nepal. The address of its per NRB Directives) is more conservative. Interest
registered office is Kathmandu, Nepal. The Bank is income on Investments is accounted for on accrual
listed on the Nepal Stock Exchange Limited. basis.
The Bank is running a commercial banking business vi) Commission Income

in Nepal. The financial statements were authorised for Guarantee commission of more than Rs 50,000 from
issue by the Board of Directors on 27 August 2007. guarantee having maturity more than a year is
accounted for on accrual basis. All other commission
ii) Summary of Significant Accounting income is booked at the time of the transaction.
Policies
The principal accounting policies applied in the vii) Dividend Income
preparation of these financial statements are set out Dividend on equity shares are recognised on cash
below. These policies have been consistently applied basis.
to all the years presented, unless otherwise stated.
viii) Foreign Exchange Transactions
iii) Statement of Compliance Foreign currency assets and liabilities are translated
The financial statements have been prepared in into Nepalese Rupees at the prevailing mid exchange
accordance with Nepal Accounting Standards (“NAS”) rate ruling on the Balance Sheet date.
except otherwise stated, Generally Accepted
Accounting Principles (“GAAP”), Bank & Financial Income realised from the difference between buying
Institutions Act, NRB Directives and the Company Act. and selling rates of Foreign Exchange is accounted
for on a daily basis and shown as “Trading Gain”
iv) Basis of Preparation under “Exchange Gain” in Schedule 22. Gains/losses
The financial statements are prepared on historical arising due to fluctuation in exchange rate of
cost basis except for foreign currency items. The different foreign currencies is accounted for on a
preparation of financial statements in conformity daily basis and shown as “Revaluation Gain”. 25% of
with NAS and GAAP requires the use of certain critical such revaluation gain (Rs.11.5 million this year) is
accounting estimates. It also requires management to transferred to Exchange Fluctuation Fund through
exercise judgement in process of applying the Bank’s Profit and Loss Appropriation Account as per Nepal
accounting policies. Rastra Bank Directive. Premium/discount on foreign
exchange forward contract is accounted for in the
Profit and Loss account at the time of transaction.
v) Interest Income
Interest income on loans and advances are
recognised on cash basis as per the Nepal Rastra ix) Interest Expense
Bank Directive. Recognizing income on cash basis is Interest on deposit liabilities and borrowings from
not in accordance with the Nepal Accounting other banks are accounted for on accrual basis.
Standard, NAS 7 (Revenue Accounting), which
x) Loans and Advances including Bills provided for to cover the possible losses. Investments
Purchased in unlisted companies’ shares are valued at cost.
Loans and advances, overdrafts and bills purchased
include direct finance provided to customers. These Premiums are capitalised and amortised from the
include short term loans, long term loans, consumer date of purchase to maturity.
loans and loans given to priority and deprived
sectors. These assets are classified as per Nepal Rastra All Investments are subject to regular review as
Bank’s Directives. Loans and advances including bills required by Nepal Rastra Bank Directives.
purchased are shown net off provisions.
xv) Fixed Assets and Depreciation
xi) Staff Loans a. Fixed assets are stated at cost less accumulated
Loans and advances granted to staff in accordance depreciation.
with the rules of the Bank are shown under Other
Assets. b. Depreciation is charged to Profit & Loss Account on
a Written Down Value method over the estimated
xii) Loan Loss Provision useful lives of fixed assets. Land is not depreciated.
Provision for possible losses is made to cover the The depreciation rates applied for various asset
risks inherent in Bank’s assets portfolio. Provision for categories are as follows:
possible losses from loans, advances and bills
purchased are made at the rates ranging from 0.25%
to 100% according to classification of such risk assets NATURE OF ASSETS DEPRECIATION RATE
as per NRB directive. Provision has been made
Furniture 25%
exceeding the regulatory requirement (Nepal Rastra
Equipments 25%
Bank guideline) in some accounts to ensure a Vehicles 20%
comfortable cushion. Computers 25%
Building 5%
xiii) Write Off
Loan accounts graded ‘Bad’ in compliance with Nepal
c. In case of fixed assets purchased during the year
Rastra Bank standard are written off in the books as
and booked for more than one month, depreciation
per criteria approved by the Board and in accordance
is charged from the subsequent month of booking.
with Section 25(2)(a) of Income Tax Act 2002, without
Depreciation on fixed assets sold or disposed off
prejudice to Bank’s right to recovery.
during the year is charged up to the previous month
of such disposal.
xiv) Investments
Investments are valued at lower of cost or market
d. Leasehold improvements are amortized over the
value. Diminution in the value of investments is
period of lease.
e. Acquired computer software licences are capitalised xvii) Staff Bonus

on the basis of cost incurred to acquire and bring to Staff bonus is provided at 10% of net profit before
use the specific software. Such costs are amortized tax (after deducting bonus).
over the useful life of the software, estimated as 5
years. xviii) Staff Leave Encashment
Staff leave encashment is accounted for on cash
f. Non-consumable items having life less than one basis. As per Human Resource Rules, the Bank pays
year and/or costing less than Rs.5,000 is expensed off money to the employees every year for leave balance
during the year of purchase. in excess of 75 days, liability of which is Rs.26 million.
This practice is not strictly in line with NAS.
xvi) Gratuity & Provident Fund
Gratuity & Provident Fund are expensed off on xix) Stationery Stock
accrual basis. Bank has put aside 100% fund required Stationery purchased are stated at cost and charged
to meet its gratuity liabilities up to mid-July 2007. to revenue at the time of consumption.
Total gratuity liability pertaining to period up to mid
July 2003 is shown under the head ‘Gratuity Fund’ of xx) Provision for Taxation
‘Other Liabilities’- Schedule 7. Gratuity liability Provision for taxation has been made on the basis of
incurred thereafter together with entire provident the Income Tax Act 2002 and amendments thereto.
fund liability up to mid July 2007 have been
accounted for as income of the concerned staff and xxi) Basis of Interest Computation
the same has been transferred to the approved Interest expense on interest bearing deposits/
retirement fund named Nabil Bank Limited borrowings and interest income on loans and
Retirement Fund. investments are computed on the basis of 365 days a
year. In case of foreign currency investments, it is
computed on the basis of 365 days a year for GBP
and 360 days a year for USD & EUR.
Notes to Accounts Schedule 33
A) Reconciliation
i. Inter-Bank Reconciliation:
With Nepal Rastra Bank

Figures in NPR
Ledger Debit Statement Debit Ledger Credit Statement Credit
Less than a month - 141,156 45,933,071 73,367,622

1-3 Months - 216,414 3,051,675 -
3-6 Months - - 552,782 -
6-12 Months - - 313, 741 -
1-2 Year - - 67,706 -
Above 2 Years - - 254,417 -
Total - 357,570 50,173,391 73,367,622
With Local Licensed Institutions

Figures in NPR
Less than a month - 806 3,475,615 39,830

1-3 Months - 1,008 31,736 -
3-6 Months - - 600 -
6-12 Months - - - -
1-2 Year - - - -
Above 2 Years - - 72,877 -
Total - 1,814 3,580,828 39,830
With Foreign Banks

Figures in NPR
Less than a month 138,731,470 24,682,389 375,379,208 140,061,574

1-3 Months - - 12,075,586 411,331
3-6 Months - - 2,074,286 7,701
6-12 Months - - 458,752 1,750
1-2 Year - - - 34,176
Above 2 Years - - 221,363 -
Total 138,731,470 24,682,389 390,209,195 140,516,532
ii. Inter-Branch Reconciliation: No pending items.

B) Details of Loans, Advances and Discount
Figures in NPR
Increase
FY 2006/07 FY 2005/06 Amount %

Gross Loans, Advances & Discount 15,903,023,765 13,278,782,259 2,624,241,506 19.8
Details of Book Write off Accounts
Figures in NPR
PARTICULARS PRINCIPAL INTEREST

Loans written off in FY 2006/07 2,858,235 1,829,840
Loans written off in FY 2005/06 653,537,759 261,104,660
Recovered till FY 2006/07 320,180,684 47,758,000
Out of above, actual write off made till date is as follows:
Principal Rs. 15,614,079
Interest Rs. 36,153,145
Recovary efforts are pursued including referrals to Debt Recovery Tribunal.
C) Statement of Changes in Deposits

Figures in NPR
Increase
FY 2006/07 FY 2005/06 Amount %

Interest Free Deposits 3,758,107,748 3,276,385,918 481,721,830 14.7
Interest Bearing Deposites 19,584,177,579 16,071,013,522 3,513,164,057 21.9
Total 23,342,285,327 19,347,399,440 3,994,885,887 20.6
D) General Reserve I) Weighted Average Interest Rate Spread

Bank and Financial Institution Act requires the Bank Weighted Average Interest on Loans & Investment 6.65%
to transfer minimum 20% of Profit after tax to Weighted Average Interest on Deposits & Borrowing 2.50%
general reserve until it becomes double of the paid Net Spread 4.15%
up capital. The Bank has thus transferred Rs. 8.5
Annual average of loans, investments, deposits and
million only this year which makes the general
borrowings have been taken while computing above.
reserve more than double of paid up capital.
E) Contingency Fund
Rs.1,000,000 has been appropriated from this year's
J) Details of Leasehold Assets
net profit to "Contingent Reserve".
Figures in NPR
PARTICULARS THIS YEAR PREVIOUS YEAR
F) Capital Adjustment Reserve
Contrary to previous capital policy, new capital 1. At Cost 22,306,839 24,159,314
policy of the central bank (Nepal Rastra Bank) a. Upto last year 24,159,314 26,009,761
requires the Bank to increase paid up capital each b. Addition this year 3,871,283 2,056,780
year to make it minimum Rs.1.6 billion by mid July c. Deduction this year (5,723,758) (3,907,227)
2013. The Bank has already submitted a capital plan
2. Amortization 8,661,291 9,844,171
to NRB in this regard and has proposed to issue this
a. Upto last year 9,844,171 8,745,213
year 40 bonus shares for 100 shares held. The Bank
b. Addition this year 4,527,141 4,991,678
has thus started utilizing capital adjustment reserve c. Deduction this year (5,710,020) (3,892,720)
created in the past to issue bonus shares in line with
the previous capital policy of NRB. 3. Remaining Value 13,645,548 14,315,143
G) Income Tax
Shortfall of Rs.46,045 in Corporate Tax provisioned
for FY 2005/06 and Rs.6,513,648 paid for settling
corporate tax of FYs 1999/2000 to 2004/05 (6 years)
have been provided for in the Profit & Loss account.
Bank got its tax liability cleared this year by Tax

Settlement Commission for FYs 1999/2000 to 2004/05.
Bank's corporate tax liability up to FY 2004/05 is
cleared by tax authority.
H) Staff Housing Fund

Since the Bank has the policy of providing housing
loan to its employees, provision for staff housing
fund has not been made as per the Labour Act. This
is in line with the practice followed by other banks.
K) Statement of Liquidity Risk Analysis (as at 16 July 2007)

Figures in NPR 100,000s
PARTICULARS REMAINING TERMS TO MATURITY
1-90 DAYS 90-180 DAYS 181-270 DAYS 271-365 DAYS OVER 1 YEAR TOTAL
Assets
Cash Balance 2,704 - - - 11,008 2,704
Balance with Banks 284 - - - 5,535 11,292
Investment in Foreign Banks 18,805 5,751 6,550 8,735 4,420 45,375
Nepal Government Securities 2,789 991 6,010 33,873 48,083
Nepal Rastra Bank Bonds - - - - - -
Inter Bank Lending 1,125 - - - - 1,125
Loans & Advances 28,626 23,855 12,723 11,132 82,694 159,030
Other Assets (Including Fixed Assets) 2,325 816 1,359 1,087 3,019 8,606
Total Assets (A) 56,685 31,412 26,641 54,828 106,676 276,216
Liabilities - - - - - -
Borrowings 8,826 - - - - 8,826
Current/ Call/ Margin Deposits/ Others 14,111 1,557 104 134 61,291 77,197
Saving Deposits 5,094 - - - 96,780 101,874
Fixed Deposits 17,811 23,022 5,301 6,814 1,404 54,352
Debentures - - - - - -
Other Liabilities/ Capital & Reserve 6,710 913 1,464 725 24,156 33,968
Total Liabilities (B) 52,551 25,492 6,869 7,673 183,631 276,216
Net Financial Assets (A-B) 4,107 5,920 19,773 47,155 (76,955) (0)
Cumulative Net Financial Assets 4,107 10,027 29,800 76,955 (0) -
L) Share Distribution of Master Card International

Master Card International on conversion into a private stock corporation allocated its franchisee class B common
stock to members in recognition of their membership interest. The bank presently holds 1114 class B common
stock having a par value of USD 0.0001 each.
M) Rounding Off & Regrouping

Figures have been rounded off to the nearest rupee and previous year's figures have been regrouped wherever
necessary.
NABIL BANK LIMITED Damak Branch Baglung Branch

Head Office Main Highway Road, Ward No. 4 Baglung Municipality - 3, Mahendrapath
Nabil House, Kamaladi, Kathmandu Damak, Jhapa Baglung
Phone : (023) 585190/91 Phone : (068) 522193/94
P.O. Box: 3729, Kathmandu
Fax : (023) 585192 Fax : (068) 522195
Phone: +977 1 4430425, 4429546-47,
4435380-85 Biratnagar Branch Butwal Branch
Telex: 2431 NABILH NP Goswara Road, Biratnagar Main Road, Butwal
Fax: +977 1 4429548 Phone: (021) 526213, 522752 Phone: (071) 541059, 542274
Swift: NARBNPKA Fax: (021) 526214 Fax: (071) 541210
P.O. Box: 208, Biratnagar P.O. Box: 18, Butwal
BRANCH OFFICES
Kantipath Branch Itahari Branch Bhalwadi Branch
Kantipath, Kathmandu Main Road, Itahari Bhalwadi, Rupandehi
Phone: 4227181, 4226785-87 Phone: (025) 580741,581400 Phone: (071) 560357, 561357
Fax: 4226905 Fax: (025) 581054 Fax: (071) 560957
P.O.Box: 3729, Kathmandu P.O. Box: 208, Biratnagar P.O. Box: 18, Butwal
Tripureshwore Branch Dharan Branch Bhairahawa Branch

UWTC, Tripureshwore , Kathmandu Mahendrapath, Dharan Narayanpath, Bhairahawa
Phone:4117014-17 Phone: (025) 530130 Phone: (071) 524041
Fax: 4117018 Fax: (025) 530131 Fax: (071) 524141
P.O. Box: 3729, Kathmandu P.O. Box: 208, Biratnagar P.O. Box: 18, Butwal
New Road Branch Birgunj Branch Ghorahi Branch

New Road, Kathmandu Adrash Nagar, Birgunj Ganesh Hall Road
Phone: 4224592, 4224533, 4225420 Phone: (051) 521476, 521746 Tribhuvan Nagar Municipality - 11
Fax: 4224837 Fax: (051) 523156 Ghorahi, Dang
P.O. Box: 3729, Kathmandu P.O.Box: 73, Birgunj Phone : (082) 561685/86
Fax : (082) 561687
Jorpati Branch Powerhouse Chowk Branch
Jorpati, Kathmandu Shreepur, Birgunj Tulsipur Branch
Phone: 4470498, 4460569 Phone: (051) 528680 Shitalpur Road
Fax: 4498343 Fax: (051) 528680 Tulsipur Municipality - Ward 6, Dang
P.O.Box: 3792, Kathmandu P.O. Box: 73, Birgunj Phone: (082) 522673/74
Fax : (082) 522672
Lalitpur Branch Hetauda Branch
Kupondole, Lalitpur Bank Road, Hetauda 4 Nepalgunj Branch
Phone: 5542891,5520431, 5532189 Makawanpur Dhamboji, Nepalgunj
Fax: 5542890 Phone: (057) 524667, 524689 Phone: (081) 524221
P.O. Box: 3729, Kathmandu Fax : (057) 524690 Fax: (081) 524222
P.O. Box: 22, Nepalgunj
Maharajgunj Branch Narayangadh Branch
Maharjgunj, Kathmandu Sahid Chock , Ward No. 4 Dhagadhi Branch
Phone: 4720870 Narayangadh, Chitwan Main Road
Fax: 4720844 Phone : (056) 5230333, 532487 Ward No 4, Dhagadhi
P.O. Box: 3729, Kathmandu Fax : (056) 523034 Phone : (091) 526683/85
Fax : (091) 526682
Birtamod Branch Pokhara Branch
Hicola road, Anarmani - 3 New Road, Pokhara Mahendranagar Branch
Birtamod, Jhapa Phone: (061) 520162, 3 rd Lane, Mahendranagar, Ward 4,
Phone : (023) 543727 525715, 532951 Kanchanpur
Fax : (023) 543400 Fax: (061) 525203 Phone : (099) 525450, (099) 525431
P.O. Box: 442, Pokhara Fax : (099) 525601
P.O. Box-16, Kanchanpur
Lakeside Branch
Lakeside, Pokhara Exchange Counter, Tribhuvan Int’l
Phone: (061) 532268, 532269 Airport, Kathmandu
Fax: (061) 525203 Phone: 4472278, 4488937
P.O. Box: 442, Pokhara P.O. Box: 3729, Kathmandu
ATMs
Nabil Newroad Branch | Jorpati (Gemini Supermarket) | Nabil Lalitpur Branch | Nabil Kantipath Branch ( Kp1) | Nabil Kantipath Branch
(Kp2) | Nabil Kantipath Branch (Kp3) | Tripureshwor (UWTC) | Kc Verity Store, Kalimati| Thamel (Thamel Supermarket) | Thamel (Bakery
Café) | Thamel (Ying Yang Restaturant) | Phora Durbar (Us Mission) | Us Embassy Bramha Cottage | Nabil Maharajgunj Branch| New
Baneshwor (Bakery Café) | Bhaktapur Durbar Squre | Nabil Damak Branch | Nabil Birtamod Branch | Nabil Dharan Branch | Nabil Itahari
Branch | Nabil Biratnagar Branch| Chiple Dhunga, Pokhara | Nabil Butwal Branch| Nabil Bhairawaha Branch | Nabil Narayanghat
Branch| Nabil Hetauda Branch| Nabil Baglung Branch | Nabil Ghorahi Branch| Nabil Tulsipur Branch | Nabil Dhangadi Branch | Nabil
Mahendranagar Branch
NABIL NETWORK
NOTES
www.nabilbank.com

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YOUR BANK @ YOUR SERVICE

YOUR BANK @ YOUR SERVICE

ANNUAL REPORT 2006/07

About Nabil Bank 3 Human Resource 31 Profit & Loss Account 45

ABOUT NABIL BANK

The 1st Joint Venture Bank in Nepal with a 23 Year History

Figures in NPR Millions

1989 1994 1999 2004 2007

Mr. Satyandra Pyara Shrestha

Representative of group ‘A’ shareholders

Price Index Performance of the Bank in FY 2006/07

Source: Nepal Rastra Bank Publications

Figures in NPR Millions

2007 2006 Volume %

Net Worth 2,057.0 1,875.0 182.1 9.7

Figures in NPR Millions

2006/07 2005/06 Volume %

Interest Income 1,587.8 1,310.0 277.8 21.2

MR. SUPRIYA GUPTA MR. SHAMBHU PRASHAD MR. DAYARAM GOPAL

Customer is the pivot around which our all activities

During the review period, Audit Committee had 17 meetings

Description of the recommendations given Planning, Performance and

In the present competitive atmosphere

"Nabil is one of the most professionally

DR. ROOP JYOTI

For me it's the 3 capital Es:

MR. GUNNAR ANDERSEN

CREDIT LEGAL, COMPLIANCE INFORMATION TECHNOLOGY OPERATIONS

Mr. Gyanendra Pratap Shah

Mr. Krishna Dutta Bhattarai Mr. Jyoti Bahadur K.C.

Mr. Kabindra Shrestha

From left to right

ORGANIZATIONAL STRUCTURE MESSAGE FROM THE CHIEF EXECUTIVE OFFICER

Mr. Anil Shah

MR. PRASERT TANHANSA

JICA has a long working relationship

MR. NORIAKI NIWA

Dabur Nepal has been banking

Ms. Raveena Joshi

DR. HARIHAR DEV PANT

On behalf of Rural Water Supply & Sanitation

MR. ARJUN NARSINGH RAYAMAJHI

Nice to experience your customer oriented

MR. PRADEEP K. SHRESTHA

We at Jagadamba Steels Pvt. Ltd. and the

I am a member of Nabil Bank credit

We are proud to be associated with

Ms. Raveena Joshi

We view Nabil Bank as the foremost Bank

I have brains in my head and feet in

Nabil bank deserves a sincere

Ms. Raveena Joshi

CORPORATE GOVERNANCE: OUR WAY OF LIFE

Through Mary Ward School , Nabil extends its

CORPORATE SOCIAL RESPONSIBILITY (CSR)

experts estimate that half of the people affected by

We have also partnered with the football team “Nabil

PRODUCTS AND SERVICES

Call Deposits Any Branch Banking Service

MR. AJIT BIKRAM SHAH

I get all the attention I need from Nabil

In terms of banking services, expert