Nabil0607

Y O U R B A N K @ Y O U R S E R V I C E

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www.nabilbank.com

ANNUAL REPORT 2006/07

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23 rdANNUAL REPORT 2006/07

2NABIL BANK Annual Report 2006/07

C O N T E N T S

Profit & Loss Account 45

Profit & Loss Appropriation Account 46

Statement of Changes in Equity 47

Cash Flow Statement 48

Schedules 49

Human Resource 31

Corporate Social Responsibility 33

Products and Services 35

Auditor’s Report 43

Balance Sheet 44

About Nabil Bank 3

Directors’ Report 5

Message from the CEO 20

Risk Management 25

Corporate Governance: Our Way of Life 29

NABIL BANK Annual Report 2006/073

The 1st Joint Venture Bank in Nepal with a 23 Year HistoryNabil 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, Dubaiwas 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 inthe banking industry of Nepal. The figures in the table below enumerate its 23 year old journey:

ABOUT NABIL BANK

Today Nabil stands in a position to claim that it is the"Bank of 1st Choice" to all its stakeholders. In the spanof 23 years, it has already distributed Rs. 2.86 billioncash dividend and the wealth of the shareholders ofthe Bank grew to Rs. 24.8 billion as at mid July 2007.Spectacular return on assets and return on equity evenduring a turbulent and competitive time highlight theinherent strength of the Bank.

The Bank provides a complete range of consumer, retail,SME and corporate banking services through its officesspread across the country. Nabil is the sole banker to amultitude of large corporates, international aid agencies,NGOs and embassies. It is the largest private bank in thecountry in terms of branch and ATM network. All itsbranches are interconnected on real time basis. On the

technological front, the Bank has earned a reputation inproviding an array of card products and Internet /Telebanking facilities besides ATMs and Any BranchBanking Service.

The statement 'Your Bank at Your Service' that the Bankholds on firmly is a resemblance that the Bank'sstakeholders are at the core of everything it does. As forthe culture embraced by the entire Nabil team, a set ofValues, referred to as 'C.R.I.S.P.' in short, represents thefact that the bank uninterruptedly strives to beCustomer Focused, Result Oriented, Innovative,Synergistic and Professional. By living these Values,individually as professionals and collectively as a Team,Nabil Bank is committed to Surge Ahead to continue tobe the Bank of 1st Choice in Nepal.

Figures in NPR Millions

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

1989 1994 1999 2004 20075th Year 10th Year 15th Year 20th Year 23rd Year

Mid July

(By 18 December 2007, number of outlets and ATMs reached 28 and 31 respectively)


Mr. Satyandra Pyara ShresthaChairman

Representative of group ‘A’ shareholdersFormer Governor, Nepal Rastra Bank, the CentralBank of NepalFormer Advisor - South East Asian ExecutiveDirector’s Office, IMF, USA.


Ladies and Gentlemen,It gives me an immense pleasure to welcome you allto the 23rd Annual General Meeting of the Bank andto present the Directors' Report of FY 2006/07together with audited financial statements of FY2006/07 for your approval. I consider it my privilegeto be addressing this august gathering and sharingthe Board's views on the banking scenario togetherwith highlights on your Bank's performance.

To begin with, I would like to present in brief themacro economic situation of the country during theperiod under review.

Gross Domestic Product (GDP)Despite an impressive growth rate of South Asiaregion, our neighbours in particular, our GDPrecorded an estimated growth of 2.5% only in FY2006/07. This is mainly due to conflict betweenlabour-management in many industries, continuouslong bandhs, strikes, irregular supply of petroleumproducts, shortage of electricity and droughtadversely impacting paddy production.

Foreign TradeTotal foreign trade of the country reached Rs. 252.5billion in 2006/07, growth of 7.9% over the previousyear.

Total exports increased by 0.9% to Rs. 60.8 billion.Export to India increased by 2.8% while export toother countries decreased by 3.1%. Major exportitems to India recording growth are vegetable ghee,textiles, thread, zinc sheet, wire, ginger, juice and jutegoods, while export of polyster yarn, plastic utensils,readymade garments went down. All major exportitems to third countries have recorded negativegrowth this year. Export of carpet, readymadegarments and pashmina declined by 4.1%, 16.1% and41% respectively.

Total imports during the year increased by 10.3% toRs. 191.7 billion. Imports from India and othercountries rose by 9.9% to Rs.117.7 billion and by 11%to Rs. 74 billion respectively. Major import items fromIndia recording growth are vehicles and spare parts,threads, electrical equipment, other machinery andparts, hot/cold rolled sheet in coil, MS billet, cementand medicine. Number one import item petroleumproducts (total import volume Rs. 33.5 billion) ishowever at last year's level. Major import itemsrecording negative growth are rice, chemicals andtextiles. Major import items from other countriesrecording growth are gold, crude soybean oil,electrical goods, zinc ingot, transport equipments/parts, telecommunication equipments/parts,computer parts, aircraft spareparts, betelnuts,medicines and textile dyes. Major import itemsrecording negative growth are other machinery andparts, readymade garments, copper wire/rod/scraps,polythene granules and textiles.

Due to continuous rise in trade with India, India'sshare in total trade has increased to 63.2% in FY 2006/07 which was 55.9% in FY 2002/03. Higher growth rateof import compared to export has widened the tradedeficit to Rs.130.9 billion this year against Rs.113.5billion of last year.

Balance of PaymentBOP posted a surplus of Rs. 5.88 billion in the reviewyear in comparison to a higher surplus of Rs. 25.6billion in the previous year. Major reason for lowerBOP surplus this year is just 2.5% increase in workers'remittance which was 49% last year. As a result,foreign exchange reserves of the country is Rs.165billion as at mid-July 2007, similar to last year's leveldue to appreciation of rupees against USD. Thecurrent reserve is sufficient to cover merchandiseimports of 10.3 months and merchandise and serviceimports of 8.5 months.

DDDDDIRECTORSIRECTORSIRECTORSIRECTORSIRECTORS’ R’ R’ R’ R’ REPORTEPORTEPORTEPORTEPORTFY 2006/07FY 2006/07FY 2006/07FY 2006/07FY 2006/07


Price IndexThe annual average inflation during the year 2006/07 registered a rise of 6.4% compared to 8% in theprevious year as measured by National UrbanConsumer Price Index. The deceleration in thegrowth of non-food and services group index waslargely on account of the base effect of the hike inprices of petroleum products in March 2006.Similarly, appreciation of rupees against USD isanother key factor for moderating the overall pricelevel in 2006/07.

Source: Nepal Rastra Bank Publications

Performance of the Bank in FY 2006/07The year 2006/07 continues to be one of the bestyears for Nabil Bank Limited with 36% return oncapital employed despite the government increasingeffective tax rate to 31.5% this year from 29.5% of lastyear. The Bank has recorded a Profit after Tax of Rs.674 million this year. The following figures give aglimpse on how the Bank performed this year vis-à-vis last year:


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

2007 2006 Volume %

As at Mid July Growth


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 8.3Forex 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 9.9Non 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 10.8Staff 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

2006/07 2005/06 Volume %

Fiscal Year Growth


MR. SHAMBHU PRASHADPOUDYALDirectorRepresentative of group ‘C’shareholders Fmr. Executive Chairman,Rastriya Beema SansthanFmr. Chairman, NepalHousing and DevelopmentFinance Co LtdFmr. Vice President, NepalMountaineering Association,Ktm. BranchFmr. Chairman, NepalTuberculosis Association,Ktm. BranchFmr. Executive Member,Nepal Family PlanningAssociation, Ktm. BranchMember, Board of Directors,Unilever Company Limited,Nepal

MR. SUPRIYA GUPTADirectorRepresentative of group ‘A’shareholders

Fmr. Chairman and ManagingDirector, UTI Bank Limited,IndiaFmr. Dy. Managing Director,State Bank of India, IndiaFmr. Managing Director, StateBank of Bikaner & Jaipur,India

MR. DAYARAM GOPALAGRAWALDirectorRepresentative of group ‘C’shareholders

Engaged in Business for lasttwo decades.

MR. ACHYUT PRASADBAJAGAINProfessional Director

Fmr. Chief Currency Officerof Nepal Rastra Bank

MR. MILAN BIKRAM SHAHDirectorRepresentative of group ‘B’shareholders

General Manager & CEO,Nepal IndustrialDevelopment Corporation,NepalFmr. General Manager,National Trading Limited,Nepal (An undertaking ofNepal Govt)Chairman of the Board, NIDCCapital Markets Limited,Nepal

MR. TABITH AWALDirectorRepresentative of group 'A'shareholders

Deputy Chief ExecutiveOfficer of Multimode Group,Bangladesh .Managing Director of Kay &Que (BD) Ltd .Currently director in manyorganizations engaged ininsurance, real estate,investment and production/manufacturing business.

MR. MOHIUDDIN AHMEDDirectorRepresentative of group 'A'shareholders

Fmr. BangladeshiAmbassador to Nepal.,Senegal, Sierra Leone, Ghana& Gambia.Fmr. Director of Janta Bank.


Your Bank's net worth grew by 9.7% this year evenafter distributing cash dividend of Rs. 492 million. TheCore capital of the Bank stood at Rs. 1.99 billion andtotal capital fund (including Supplementary capital ofRs. 0.31 billion) stood at Rs. 2.31 billion as on 16 July2007. The capital adequacy ratio of 10.40% (Corecapital) and 12.04% (Total capital) exceeded thestatutory requirement by 4.9% and 1.04% respectively.These ratios indicate Bank's sound financial position.

Following graph gives a trend of the Bank's capitalover past 5 years:

In the review period, your Bank had a drive insoliciting deposits which can be profitably invested.The efforts in that direction have yielded good resultswhich can be seen from the growth of 20.6% (Rs. 3.99billion). The Bank increased scarce interest freedeposits by almost half a billion rupees. Similarly, theBank recorded a growth of almost one and half billionrupees in savings deposit. This growth was possiblethrough attractive special savings scheme 'NabilBachat'. High Fed Rate and relatively higher mix of Calland Fixed deposits however pushed the cost ofdeposits to 2.5% this year from 2.05% of previous year.

The Bank grew its gross loans by Rs. 2.62 billion to Rs.15.90 billion. The Bank continued cautious expansionof both business and personal loans. Mix of relativelylower risky and diversified personal loans hasreached around 25% in total loan portfolio. With thedue diligence that your Bank exercises whileextending new and additional loans and the efforts itapplies in recovery of non-performing loans, yourbank was able to reduce non-performing loans (NPL)volume to Rs.178 million as at 16 July 2007. NPL tototal loans ratio has thus decreased to 1.12% as at 16July 2007 from 1.38% of corresponding period lastyear. Total provision held as of that date, Rs.357million is 200% of NPL indicating a comfortablecushion against non-performing assets.

I take immense pleasure in informing you that themarket price of the Bank's share continued to rise thisyear as well. As at 16 July 2007, the market price pershare reached Rs. 5,050. It is currently trading ataround Rs. 6,000. We however feel that marketexpectation is on the higher side.


Tremendous market pressure on lending rates hascaused decline in the Bank's yield on loans andadvances to 7.90% from 8.19%.

Investment volume increased by Rs 1.6 billion thisyear. As a result of high Fed rate and investment inhigh yielding instruments, yield of FCY investmentsthis year improved to 5.27% from 4.39% of last year.However, low yield of Tbills and maturity of highyielding government bonds caused decline in LCYinvestments yield to 4.08% this year from 5.29% oflast year. In aggregate, yield of investmentmarginally improved to 4.79% during the reviewperiod from 4.75% of last year. Overall yield oninterest earning assets however declined to 6.75%this year from 6.95% of previous year due todecline on yield of loan which has almost 2/3rd

share in total earning assets. Rise in cost ofdeposits and decline in yield of earning assetsfurther squeezed interest spread to 4.15% fromprevious year's 4.90%.

Despite squeezed interest spread, it is satisfying tostate that your Bank increased net interest income byRs. 79.2 million this year through growth in businessvolume. Moreover, interest spread of your bank is stillthe best in the peer group.

Foreign exchange income increased by 13.2% this yeardue mainly to contribution from 13% appreciation of LCYagainst USD during the year. Fierce competition in thebanking has however continuously narrowed the forexspread. Fee & Other Income increased by 7.7% inaggregate mainly due to retail business and introductionof new sources of fee income. Staff expense increased by9.3% owing to salary increment at certain levels, rise ingratuity expense due mainly to salary increment andmore investment in staff training. Despite high growthof business volume, the other office operating expenseshas increased by 3% only during the review period. Today,your Bank has the lowest amount of other operatingexpenses in the peer group.

The Bank, through its continued efforts, has beenable to recover Rs. 43.6 million from the book writtenoff accounts. The NPA Management Cell exclusivelyestablished for recovery of graded and written offaccounts has been relentlessly putting in itsendeavors to achieve maximum recovery.

There is 10.8% growth in the fund set aside for StaffBonus. Corporate tax however records growth of 22%due mainly to the government increasing tax rate by2% to 31.5% and payment of Rs. 6.6 million forsettlement of prior years' disputed tax.


The Bank recorded profit after tax of Rs 674 million,return on average assets 2.72% and return on equity36% in FY 2006/07. These ratios are aboveinternational standard and one of the highest in thedomestic industry.

In a nutshell, I feel we should be satisfied with theoverall performance of the Bank. Your Bank hasachieved a satisfactory growth in both the top lineand bottom line at a time when the economy of thecountry is almost stagnant and competition in thebanking sector is getting tougher.

DividendThe Bank earned Rs.137.08 per share (EPS) in FY 2006/07. After appropriating adequate amount for variousreserves, we propose a cash dividend of Rs. 100 pershare.

Similarly, we propose 4 bonus shares for each 10shares held. It gives me immense pleasure to informyou that your Bank has declared cash dividend of Rs.2.86 billion in 23 years of its operations. Looking atthe current market capitalization and cash dividenddistributed so far with the initial investment of justRs. 30 million, the Bank has significantly maximizedthe wealth of its shareholders.

Office NetworkKamaladi branch was shifted to United World TradeCentre, Tripureshwor to solicit more business.Similarly, the Bank completed entire homework in2006/07 for opening 9 branches from Mechi toMahakali. These branches will come into operationssoon. In FY 2006/07, new ATMs were installed atKalimati, Tripureshwor and Kantipath. Use of internet-banking is also gradually growing.

TechnologyThe Bank firmly believes that the technology is a keyenabler in enhancing our service standards. With thisin mind, your bank has constantly been striving toexcel in this front and has introduced and expandeda number of IT based products. Today, your bank isforerunner in IT based products.

Industrial and Business RelationsThe Bank would not have come to this stage hadthere not been a harmonious relations between theemployees and management. The Bank has alwaysmade endeavours to further strengthen the relations.There is a registered authorized staff union in theBank. The management and staff union are inconstant touch to achieve the common goal ofbecoming the Bank of the 1st Choice.

Customer is the pivot around which our all activitiesrevolve. The Bank is thus driven by the philosophy ofgiving paramount importance to its customers. The


Bank has introduced many products and has built areputation of delivering the highest quality ofprofessional services in a personalized manner. As aresult, the Bank has also been able to attract a largenumber of customers from different strata. Nabil isthe sole banker to the multitude of International AidAgencies, Embassies, NGOs, INGOs besides a host ofcorporate and retail customers. We attribute oursuccess to the patronage of the customers andpledge to improve further the customer servicestandard. Besides the healthy growth in all respects,the Bank is diligently complying with theinternational norms of AML/KYC Policies.

Corporate Social ResponsibilityNabil continues to pursue its philosophy of CorporateSocial Responsibility on three pillars; Health, Educationand Sport. In Health, it has partnership with theGlaucoma Center at the Tilganga Eye Hospital toincrease overall knowledge about this blindingdisease. In Education, it has partnership with the MaryWard School to educate underprivileged children. Andin Sports, Nabil continues to give its shoulder to NabilThree Star Club to promote sportsmanship andhealthy living in the country.

Internal Control SystemSince banking business is exposed to basically credit,market and operational risks, it has been the policy ofthe Bank to strengthen internal control system. TheBank has put in place various policies, product papersand standard instruction manuals covering work ofalmost all areas of its operations. To avoid the conflictof interest, a clear demarcation has been drawnbetween business generation and risk managementfunctions besides setting limits for managing allabove risks. Similarly, Internal Audit Department andCompliance Department are strengthened to ensurecompliance of all internal and external requirements.In order to ensure independent and unbiased

observations/decisions, Internal Audit Departmentreports directly to the Audit Committee, comprised ofBoard Members and not to the CEO. Additionally, CEOis not allowed to be a member of the Audit Committee.Similarly, Compliance unit is headed by the CompanySecretary of the Board.

Progress Report of theCurrent Year and Future OutlookThe Bank's key result for the first month (up to mid-August 2007) of the current year (FY 2007/08) is asfollows:

Margin in interest, fee and foreign exchange incomeis shrinking day by day due to ever increasingcompetition. Number of banks and financialinstitutions and their branches is constantlyincreasing despite very low growth rate of theeconomy. The following statistics sheds light on thecomparative number of banks and financialinstitutions in the country:

Furthermore, some banks and financial institutionsare in pipeline.


AS AT MID AUGUST GROWTH

2007 2006 %

Deposits 23,658 19,487 21.4

Interest Bearing 19,881 16,224 22.5

Non Interest Bearing 3,778 3,263 15.8

Loans & Advances 16,284 13,806 18.0Profit Before Bonus & Tax 123 90 37.0

Commercial Banks 17 20

Development Banks 17 38

Finance Companies 56 74

MID JULY 2003 MID JULY 2007


The Bank is committed to solicit adequate andattractive business opportunities to ensure betterachievements in the current year despite currentpolitical and economic reality of the country is notbeing encouraging.

Future ProgramsMajor thrusts during FY 2007/08 will be in thefollowing areas:� Increase interest free and savings deposits� Increase quality personal and business loans� Increase share of EXIM business� Increase Card and Remittance related incomes� Control operating expenses� Increase recovery from written off accountsAdditional disclosures on the Bank as per the Company Act2006 have been given in Annex A.

Board of DirectorsAfter the last Annual General Meeting, there are fewchanges in the Board of Directors. NBIL hasnominated Mr. Tabith Awal and Mr. Mohiuddin Ahmedin place of Mr. A. Mintoo and Mr. Suraj Mehta effective

27 July 2007. Similarly, Mr. A. P. Bazagain has beenappointed as a professional director effective 9 July2007 in line with Bank and Financial Institutions Act2006.

I wish to place on record our appreciation of thecontributions made by outgoing directors andwelcome new directors.

AcknowledgementThe Board of Directors places on record itsappreciation for the continued support andpatronage of shareholders, customers and wellwishers. The Board is thankful to Nepal Rastra Bank,Government of Nepal and the Ministry of Finance fortheir support and guidance. Similarly, employees ofthe Bank have put in hard work to deliver such agood result. I take this opportunity to extend myheartfelt thanks to all for their invaluablecontributions.

On behalf of the BoardSatyandra P. Shrestha, Chairman


Shares owned by DirectorsRepresentative of NBIL (Group "A" Shareholder)� Mr. Satyandra Pyara Shrestha� Mr. Supriya Gupta� Mr. Tabith Awal� Mr. Mohiuddin Ahmed

Representative of Financial Institutions (Group "B"Shareholders)� Mr. Milan Bikram Shah

Elected representative of Public(Group "C" Shareholders)� Mr. Shambhu Prashad Poudyal -795 shares� Mr. Daya Ram Gopal Agrawal - 473 shares

� Shares bought back or forfeited by the Bankduring the review period - None

� Directors' and their relatives' interest in anycontract with the Bank - None

� Dues from Directors/CEO and their firms - None

Board of Director's response on Audit ReportAuditor's Report reveals, by and large, a satisfactoryposition. The Management has been advised to followthe Auditor's suggestions wherever practicable whileconducting the Bank's business.

ANNEX - A

Audit CommitteeThe Board of Directors of the Bank constituted an AuditCommittee on 18 February 2002 (2058.11.06 B.S.). Following 3non-executive directors were in the Committee as on 16 July2007:� Mr. Supriya Gupta - Convenor

� Mr. A. Mintoo - Member

� Mr. Milan Bikram Shah - Member

During the review period, Audit Committee had 17 meetingsfor issues including the following:� Report on Past dues import loans for 12 months.

� Status Report on Nostro Accounts for 12 months.

� Audit report on Business Banking of branches - 12 Reports.

� Audit report on operations of branches - 12 Reports.

� Audit report on LC operations at Central Trade Operations

(CTO) - 2 Reports.

� Audit report on Personal Lending of branches - 8 Reports.

� Audit report on central accounts for the FY 2004/05 and FY

2005/06.

� Report on concurrent audit on LC issuance at CTO.

� Audit report on Card Division.

� Half yearly & yearly verification of cash and cash value items of

valley and outside valley branches (mid July 2006 and mid

January 2007).

� Audit report on Treasury & Correspondent Banking.

� Investigations & Inspections:

� Memorandum dated 21.05.2007 on Investigation at CTO - KP.

� Memorandum dated 26.06.2007 on Mandatory Business

Credibility Information Report on the beneficiary of the L/C.

� Review of compliances and branch responses on audit reports.

� Review and discussion on NRB Onsite Inspection Report.

� Review and discussion on Preliminary Statutory Audit Report

along with Management response and Annual Financial

Statement of the Bank.

� Others:-

� Discussion with the Statutory Auditors on adequacy of

Provisioning for the Bank's Financial Statement for 2005/

06 and related issues.� 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 &

Programme for the FY 2006/07.

� Discussion on and adoption of the draft Audit Guidelines

2007.

� Memorandum dated 31.05.2007 on Proposals for

carrying out IT Audit of the Bank.

Description of the recommendations givenby the Committee� Monthly review on past due loan account and appropriate

measures are advised to Management to keep a watch over

such accounts.

� Monthly review on status of old and unreconciled items in

the Nostro accounts of the Bank and appropriate directions

are given to the Management to keep them under control.

� Review the compliance of the branches in regard to NRB

directives, Bank's Credit policy, internal rules and guidelines

and compliance of prevailing laws of the country.

� Review and discussions on the NRB Inspection Report and

advise appropriate measures to be taken by the

Management for full compliance of the irregularities

pointed out in the report.

� Review and discussions on the preliminary statutory audit

report along with the Management response and Annual

Financial Statements of the Bank and suggest the

Management appropriate measures for compliance and

recommend the Board for adoption of annual accounts of

the Bank.

� Review and discussions on the risks mitigation (such as

business, operations, regulatory, external etc.), internal check

and control and security position in respect of Business Bank,

Branch Operations, Personal Lending business at branches,

Treasury operations, CTO, HR&PM, Central Accounts and

Privilege Banking functions of the Bank.

The Directors in the Audit Committee are paid fees persitting as follows:� Convenor Rs. 10,000� Other members Rs. 8,000

The Board has constituted various Committees foreffective supervision of various areas of the Bank.Composition of the Committee was as follows duringFY 2006/07:

Directors' Credit Committee (DCC)� Mr. Satyandra Pyara Shrestha - Convenor� Mr. Supriya Gupta - Member� Mr. Shambhu Prashad Poudyal - Member� Mr. Dayaram Gopal Agrawal - Member� Mr. Milan Bikram Shah - Member

Planning, Performance andPersonnel Committee (PPPC)� Mr. Shambhu Prashad Poudyal - Convenor� Mr. A. Mintoo - Member� Mr. Suraj Lal Mehta - Member

Information Technology Committee (ITC)� Mr. Shambhu Prashad Poudyal - Convenor� Mr. Dayaram Gopal Agrawal - Member� Mr. Milan Bikram Shah - Member

Above committees have regularly been giving variousadvices/instructions after reviewing the respectiveBanking activities periodically. Similarly, variousManagement Committees have been formed to ensureeffective operations of the Bank:1. Executive Committee2. Human Resource Committee3. Expenditure Monitoring Committee4. Asset and Liability Management Committee5. Investment Management Committee6. Bid Committee7. Profitability Committee

Amount paid to Directors, CEO andCompany Secretary during FY 2006/07� Amount paid to Directors on account of sitting fee,

newspaper/communication allowance and dailyallowance: Rs.2,710,500

� Remuneration paid to Chief Executive Officer:Rs.7,945,000

� Amount paid to Company Secretary and StatutoryAuditor towards sitting fee: Rs.200,000

Status of Dividend� Cash dividend declared till last fiscal year Rs. 2.37 billion

� Unpaid dividend as at 16 July 2007 Rs.18 million


Ms. Raveena JoshiHead-Personal Lending

For me it's the 3 capital Es:Education, Employment and Economy.Nabil Bank and private sector cancontribute to all these in building Nepal'sfuture. Nabil Bank's professional andservice minded operation is acontribution to the 3 capital Es in itself.

MR. GUNNAR ANDERSENCountry DirectorSave the Children Norway

In the present competitive atmospherein banking sector, Nabil has been ableto provide professional service andfacilities with the state of art bankingsystem to its customers and itscontribution in developing Nepal'strade and industry sector is also verysignificant. I am very satisfied with andimpressed by prompt and reliableservice of Nabil Bank.

H.E. MR. NAM SANG-JUNGAmbassador of the Republic of Korea to Nepal

"Nabil is one of the most professionallymanaged banks in Nepal, yet very

personal and client-friendly. We have hadvery satisfactory and excellent relations

with the bank - at all levels of bothorganizations, right from the days of itsinception. Without doubt, Nabil can be

said to be the mother of modern bankingprofessionals in Nepal!"

DR. ROOP JYOTIVice-Chairman

Jyoti Group


MANAGEMENT TEAMMr. Anil ShahChief Executive Officer

INFORMATION TECHNOLOGY

Mr. Prabin ChhetryHead – Information Technology

Mr. Rajesh UpadhyayaHead – IT Support

Mr. Basant DhakhwaManager – IT Support

PRIVILEGE BANK

Ms. Barsha ShresthaHead – Privilege Bank

Mr. Deepok ChhetryRelationship Manager

Mr. Binay NeupaneRelationship Manager

FINANCE AND PLANNING

Mr. Bhuvan DahalHead – Finance and Planning

AUDIT AND INSPECTION

Mr. Binod SharmaHead – Audit & Inspection

OPERATIONS

Mr. Rajendra Bahadur MallaHead – Operations

Ms. Neelam TuladharHead – National ProcessingCentre

Mr. Bishnu AcharyaHead – General Administration

Mr. Shashi Nidhi TiwariHead – Central Trade Operations

Mr. Yugesh Lal BijukchheManager – Operations

BRANCHES

Mr. Pradeep MishraManager – Lalitpur

Mr. Saroj PyakuryalManager – Pokhara

Ms. Anita GiriManager – Tripureshwor

Mr. Prakash Babu PantManager – Biratnagar

Mr. Buddhi Ram SharmaManager - Nepalgunj

LEGAL, COMPLIANCEAND COMPANY SECRETARIAT

Mr. Binaya RegmiCompany Secretary and Head –Legal and Compliance

Mr. Kanhaiya Lal RajwantManager - Compliance

TREASURY &CORRESPONDENT BANKING

Ms. Anupama KhunjeliHead – Treasury &Correspondent Banking

PERSONAL LENDING &REMITTANCE BUSINESS UNIT

Ms. Raveena JoshiHead – Personal Lending &Inward Sourcing

Mr. Pradyuman PokharelHead – Remittance Business Unit

CARD DIVISION

Mr. Binaya Kumar RegmiHead – Card Division

Mr. Mohan SubbaManager - Card Marketing

Mr. Niraj SharmaManager - Card Operations

HUMAN RESOURCE &PERSONNEL MANAGEMENT

Mr. Jyoti Bahadur K.C.Head – Human Resource &Personnel Management

CREDIT

Mr. Amrit Charan ShresthaCountry Head - Credit

Mr. Krishna Gopal ManandharHead – Credit Administration andSupport

Mr. Anil KhanalHead – Business Bank Credit

Ms. Neena ThapaSr. Analyst – Business Bank Credit

Mr. Babu Ratna BajracharyaManager – Credit Administration andSupport

Mr. Yagya Prasad SharmaHead – Personal Credit

BUSINESS BANK

Senior Relationship ManagersMr. Deepak ShresthaMr. Ramesh LohaniMr. Dripu Dhoj Adhikary

Mr. Sanjay NepalRelationship Manager– Kathmandu

Ms. Namita DixitRelationship Manager– Kathmandu

Mr. Gyaneshwar AcharyaBranch/Relationship Manager– Birgunj

Mr. Gyanendra Pratap ShahRelationship Manager– Birgunj

Mr. Krishna Dutta BhattaraiBranch/Relationship Manager– Biratnagar

Mr. Kabindra ShresthaBranch/Relationship Manager– Butwal

NABIL BANK MANAGEMENT TEAM

From left to rightMr. 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


Dear Stakeholders,Nabil Bank is delighted to continue to be ‘Your Bank @Your Service’.

With your support the fiscal year 2006/07 was truly anexceptional year for Nabil Bank, as we crossed the Rs. 1billion milestone in Profit Before Bonus & Taxes,registering a growth of 11% over the pervious year.Impressive growth in size and volume of majorcomponents of the balance sheet, both deposits andloans, yet maintaining both the mixture and qualityalongside, have further ascribed the year as remarkable.Needless to say, this achievement is a reflection of oursuccess in continuously striving to surge ahead to bethe Bank of 1st Choice of all our stakeholders, evenamidst the uncertainty and instability that prevailed inthe nation.

Despite optimistic hopes and anticipation for the year2006/07, the country did not perform welleconomically, as instability and lawlessness seemed toincrease and the political uncertainties continued.Bandhs, strikes and extortion in various parts of thecountry including Kathmandu valley crippled daily lifeon numerous instances over the year. At a time whenour neighboring countries registered impressiveeconomic growth, we have managed a meagergrowth of 2.5% in the year. Regardless of this, NabilBank experienced a successful year and deliveredexcellent results, and elucidating this to you ourpartner in this success, gives me immense pleasure.

As already indicated above, Nabil Bank registered ahistoric Rs. 1.09 billion profit before bonus and taxesand Rs.674 million profit after tax in the year 2006/07.The 100% cash dividend along with 40% stockdividend that the Bank has distributed this year was arecord high in the annals of banking history in Nepal.This is in line with our commitment to increase paid-upcapital of the Bank to a minimum of Rs. 1.6 billion bymid July 2013. Furthermore, 36% return onshareholders’ funds and 2.72% return on bank’saverage assets denote superior rate of profitability and

puts us amongst the highest in the banking sector of thenation. The Bank has doubled the size of its loanportfolio in 5 years. As at mid July 2007 our risk asset basehad reached Rs.15.9 billion, from Rs.7.8 billion in mid July2002. Despite such a huge growth of loan volumes, theBank has been able to reduce NPL volume to Rs.178million, just 1.12% of total loans, at mid July 2007 fromRs.557 million of mid July 2002. Similarly, the Bank hasheld loan loss provision double of NPL volume at midJuly 2007. We believe that this is true vindication of thestructural change we implemented in 2004 separatingbusiness generation and risk analysis and removing allconflict of interest therein. In terms of capital, the Bankcontinues to be strong and sound with our Capital Fundtotaling NPR 2.3 billion and with our capital adequacy at12.04%, which is well above international standard.

At this juncture when the nation is passing through a phaseof transition, we at Team Nabil believe that just registeringhigher profits, yielding higher returns, strengthening thefinancials and enhancing the books of accounts, is notenough in our journey to achieve our mission to be Nepal’sBank of 1st Choice. Therefore beyond these traditionalparameters, the Bank has embarked on a journey to surgeahead together with the people of Nepal across the nationbuilding new relationships of mutual benefit and playingthe role of a catalyst in the economic growth of the nation.In our efforts of adding value towards building a ‘NewNepal’, the Bank has opened nine new Branches spanningthe entire length of Nepal, from Mechi to Mahakali. We areproud of our now greater contribution towards theupliftment of the economy through our enhanced presencethrough the entire length of the nation, enabling us toprovide the highest levels of financial products and servicesto various communities and different segments of thesociety.

With the opening of the nine branches, Nabil is now ableto reach and service our customers from Mechi toMahakali through the hills and terai through onlineconnectivity via VSAT, Radio modems and fiber optics. Thisis a major step forward for banking in Nepal, as from nowmodern banking

MESSAGE FROM THE CHIEF EXECUTIVE OFFICERORGANIZATIONAL STRUCTURE


Mr. Anil ShahChief Executive Officer


will not only be limited to the urban centers, but a largerpart of the economically less privileged, remote and semiurban societies will have access to international standardbanking. At Nabil we view this as a ‘marathon’ we have onlyjust started, as the Bank plans to continue enhancing itsbranch network to meet the financial needs of the largerNepali population. Today, amongst all private banks, Nabilhas the largest Branch and ATM networks. We have alwaysbeen a pioneer in launching innovative products andservices to meet, if not exceed our customer’s requirementsand now with our plans to extend our reach even furtherwe will have the ability to truly deliver the very bestbanking products and services right across Nepal.

Nabil has earned strong market confidence, which isclearly reflected through the enormous growth in ourshare price. The share price that was NRs. 740 four yearsback has soared up to NRs.5,050 on 16th July 2007, theclosing day of the fiscal year. Year end marketcapitalization was NRs. 24.8 billion, the highest in thebanking industry. Currently Nabil’s shares are tradingclose to NPR 6,000. An achievement that we feel iscomprehensive evidence that Nabil’s share is a true bluechip investment for our shareholders and a lucrativeopportunity to those looking for investment.

The Bank has always felt responsible towards thebetterment of the society and the community of which weare a part. In this regard, we continue our three pillarsapproach to great corporate citizenship through ourpartnerships in: Health, Education and Sports. In health ourpartnership with the Glaucoma Eye Center at the TilgangaEye Hospital continues, in Education, the Bank has beenassociated with the Mary Ward School and is sponsoringthe education of less privileged girl children of grades 8, 9and 10. And in sports, our alliance with the Nabil Three Starfootball club is growing from strength to strength.

Nabil continues to be among the largest tax payers in theindustry, with the payment of NRs. 321 million corporate

taxes during 2006/07. The Bank’s contribution to the bankingindustry and the nation continues to be recognized by thecommunity and the regulators. Federation of Nepalese Chamberof Commerce & Industry (FNCCI) has awarded the NationalExcellence Award to Nabil for its achievement and service asCommendations for Significant Achievement in Institutional PolicyPlanning & Commitment during the past year. It gives meimmense pleasure to share with you that Central Bank hascontinuously upgraded our CAMEL rating through onsiteinspections and regularly seek our views on crucial issues andpolicies.

In today’s business context where competition is getting moreintense with the number of new banks and financial institutionsincreasing, one of the main strengths of our Bank is our ‘People’.The consistent achievements that Nabil recorded this year waspossible due to the team effort put up by each and everyindividual member of the Nabil Team. The team which,comprises of highly skilled and talented individuals across theBank, is proud to have amongst the very best bankingprofessionals in our high performing synergistic team.Recognizing this fact, Nabil today is amongst the highestpaymasters and most preferred employers in not only theindustry but the nation. As always, the Bank is proud of andthankful to the high performing individuals that make up TeamNabil, and we are confident that we will continue to surgeahead together to greater heights of success in the days ahead.

Finally, I reiterate my sincere commitment to our Customers,Shareholders, Regulators, the Community and Staff, all ourstakeholders that we continue to Surge Ahead by living ourValues of being C.R.I.S.P. or Customer Focused, Result Oriented,Innovative, Synergistic and Professional everyday in everythingwe do. As always we remain ‘Your Bank @ Your Service’. I expressmy gratitude to all our stakeholders for your continuedconfidence and support, as we Surge Ahead to build onmutually beneficial partnerships as your Bank of 1st Choice.

Best regards.Anil Shah, Chief Executive Officer



During these turbulent years in financialmarket, Nabil has shown its efficiencythrough its proficient services andmodern facilities to prove itself to becomethe first choice Bank for Thai Airways. Ihope our mutual understanding andcordial relationship established since theinception of Nabil in 1984 will be moreintense and fruitful in the days to come.

MR. PRASERT TANHANSAGeneral Manager - Nepal & BhutanThai Airways International Public Co. Ltd.

JICA has a long working relationshipwith Nabil Bank and feels proud to haveused your expertise until now. JICA truly

appreciates your contribution towardsyour country Nepal & its citizens, and

would like to work hand in hand in thedays ahead. Wishing you success in your

endeavor !

MR. NORIAKI NIWAResident Representative

JICA Nepal Office

Dabur Nepal has been bankingwith Nabil Bank for over adecade and Nabil has alwaysbeen its Bank of the 1st choice.

MR. UDAYAN GANGULYChief Executive OfficerDabur Nepal



Nabil Bank has been helpful not only indevelopment of big business andindustries but also in promotion andgrowth of microfinance to reducepoverty in Nepal. It is one of the firstcommercial banks to provide on-lendingfund and participate in the equity ofmicrofinance institutions, including Nirdhan NGO and Nirdhan Utthan BankLtd.

DR. HARIHAR DEV PANTChairman and CEONirdhan Utthan bank

On behalf of Rural Water Supply & SanitationFund Development Board, I would like tothank Nabil Bank for providing excellent

banking services to us for over a decade andhope 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 orientedapproach but tomorrow’s market is morechallenging and customer satisfaction isnot the only end and you have to be ableto delight the customers of tomorrow. Wewish you all success for your growth andwe hope to create win win situationalways by building more trust andconfidence.

MR. PRADEEP K. SHRESTHAManaging DirectorPanchakanya Group


Taking risk is an integral part of our business. Our aimis to achieve an appropriate balance between riskand return based on our assessment of potential riskdevelopments in both normal and stressedconditions.

Banking activities deal with different sorts of risk-management to a large extent, mainly comprisingmarket and counterparty risks, but also includingliquidity and operational risks.

� Market Risk is the risk of a rise or fall in the valueof the bank's assets and liabilities due to pricechanges in the market.

� Credit Risk (Counterparty Risk) is the risk of anykind of non fulfillment by customers (companies,individuals, banks, financial institutions, states etc)of their obligations towards the bank. Most of thecounterparty risk is related to credit risks.

� Liquidity Risk is the risk for a loss due to lack ofliquid fund, which may force the bank to closeout a position before maturity, for example: Therisk arises when the mismatch between assetsand liabilities arises due to the maturity profilewhere the maturing assets are not enough tocater to the maturing liabilities.

� Operational Risk is the risk for unforeseen lossesdue to administrative or systems deficiencies,which may be intentional, such as violations oflaws or instructions or unintentional, within orbeyond the bank's control.

While credit and liquidity risk may be regarded asclassical banking risks, the market risk - is exposure tomarket variables , interest rates, exchange rates ,equity market indices , commodity prices and factorsspecific to individual names affecting the values of

RISK MANAGEMENT

securities and other obligations in tradable form andderivatives referenced to those names.

Banks assume certain risks, especially credit andmarket risks as an integral part of the businessexchanges with the clients. In this connection it isimportant to manage the risks inherent in thebusiness with customers in a controllable mannerand this is why bank's Board establishes maximumlimits for the total risk exposure at every particularinterval of the review period.

Market Risk:The portfolio analysis taking into account theconcentration risk the aggregate control limit, FX risklimit, Individual Currency Trading Limit, Intra Day Limit,Net Open Position Limit, the guidelines as tomaintenance of Credit to Deposit Ratio, Liquid Asset toDeposit Ratio, Investment limits, GAP Analysis forliquidity purpose and for interest rate sensitive Asset &Liability book all the above within ALCO / Investmentpolicy as approved by the Board is monitored byTreasury and Finance & Planning so as to make surethat no unwarranted surprises are to be observed.

Strengthening Risk Control:Credit Risk:Credit risk is the risk of loss as a result of failure by aclient or counterparty to meet its contractualobligations. It is an integral part of many of ourbusiness activities and is inherent in traditional bankingproducts - loans, commitments to lend and contingentliabilities, such as letters of credit - trade products -derivative contracts such as forwards, swaps, options,repurchase agreements (Repos and Reverse Repos) andsecurities borrowing and lending transactions. Allbanking and traded products are governed by acomprehensive risk management and controlframework, which includes detailed credit policy andprocedures which are approved by the Board.


In recent years, the Bank has organized the handling ofits Credit Risk in an efficient manner through its newcredit organizational structure, where the Credit Unit isresponsible of implementing the credit guidelines whichare approved by the Board and also plays an importantrole in making evaluations of the credit decisions that areseparate and uninfluenced from the business side that isBusiness Banking Unit or Personnel Lending Unit - thusproviding a second opinion on each credit case.

Liquidity Risk:The Bank as per the approved guidelines from theBoard has been maintaining Liquid Asset to depositratio and has been monitoring the same very closely.The investments for liquid asset mainly comprises ofGovernment Securities: Treasury Bills maturing within364 days and Bonds. Our Central Bank as per theirOpen Market Committee proceedings brings REPOsand Reverse REPOs in the market as per the marketrequirement and has been letting the Banks utilizethe Standing Liquidity Facility (SLF) against theholding of Government Securities as the last resortfor liquidity requirement.

Operational Risk:The risk of loss resulting from inadequate orfailed internal processes, people and system orfrom external causes, whether deliberate,accidental or natural. It is inherent in all ouractivities, not only in the business we conduct butalso from the fact that we are a business- becausewe are an employer, we own and occupy propertyand we hold assets, including informationbelonging to ourselves and our clients. Everyfunction whether a front end business or acontrol or logistic unit must manage theoperational risk that arise from its own activities.We have introduced "Total Quality Management"(TQM) approach whereby each unit identifies therisk associated and monitors and escalatesrequired information to the Senior Management.The Audit Committee under the direct supervisionof the Board has been strengthened whichoverlooks into the operational risk aspect whereby we assess the implication of the External andInternal audit findings to implement better waysof mitigating operational risk.



We are proud to be associated withNabil Bank Ltd, which supports our

growth offering expert financialadvice and various tailor made

services.

MR. PAWAN KR. GOLYANCMD

Reliance Spinning

We at Jagadamba Steels Pvt. Ltd. and theentire Shanker Group family are proud to

be associated with Nabil Bank who hasstood by us through thick and thin. Wehave grown with them and they in turn

have always made sure that we reap thebest out of the seeds we sow.

MR. SHANKER LAL AGRAWALChairman

Shanker Group

I am a member of Nabil Bank creditcards since 1995. I have beenavailing credit cards of other banksas well, but I feel more comfortableon using cards of Nabil Bank.

MR. LOK MANYA GOLCHAChairmanGolcha Organization



I have brains in my head and feet inmy shoes. I could steer myself to anydirection I wanted. I am glad I choseNabil Bank which has helped memove steadily in all my endeavours.

MR. JIWAN SINGH LAMAMortgage Finance Customer

We view Nabil Bank as the foremost Bankthat introduced modern banking system in

Nepal being the first joint venture Bank inthe country. Our relationship with Nabil

Bank has remained valued and a mutuallybeneficial one. Hence, Nabil Bank is our

Bank of the 1st Choice in real sense for us.

MR. I. R. TAMANGExecutive Chairman

Civil Group

Nabil bank deserves a sincerecongratulations for its commitment

towards poverty reduction thatexemplified through its involvement

in microfinance beyond themandatory charter.

MR. PITAMBAR ACHARYAExcutive Director

Deprosc Nepal


CORPORATE GOVERNANCE: OUR WAY OF LIFE

Nabil realizes that good corporate governance is thevery foundation for its sustainable growth andtherefore continues to live by the highest standardsof corporate governance. Moreso, when it comes toinstitutions such as banks which can not operatewithout properly managing and mitigating severalprominent risks and winning the trust of the publicat all times, Good Corporate Governance is of utmostimportance for them. This is why in Nabil Bank thefollowing areas have always received utmostimportance as a part of good corporate governance.

The Board of DirectorsThe Board recognizes its responsibility to acthonestly, prudentially and progressively inaccordance with the prevailing regulations in servingthe interest of all the stakeholders of the Bank. All ourBoard Members have extensive experience in thebanking industry which makes them qualified inadding value by providing seasoned judgmentsindependently on policy matters. There are differentBoard Committees headed by non-executive BoardMembers to look into different Banking affairs likeplanning, credit, overall performance management,human resource, audit and compliance.

Corporate Governance in theManagementNabil Management is a team of seasoned andexperienced professionals who are driven by thecorporate mission and values and believe in a cultureof self discipline. The senior executives and managers,with their experience and knowledge, are capable ofmaintaining an effective level of control over thebanking operations and affairs. Policies andoperational guidelines have been formulated whichensure adequate controls over all day to daybusiness activities and the effective management ofall inherent risks.

Clear lines of responsibility andaccountabilityNabil has structured itself in a manner so that there isalways a clear demarcation between the businessgenerators and the risk evaluators. This ensures thepractice of maker and uninfluenced checker eachtime a deal is put through. Each individual's dutiesand lines of responsibility and accountability areclearly discussed, defined and recorded against whichtheir performance is monitored and evaluated.


Know Your Customer (KYC) and AntiMoney Laundering (AML) PolicyNot limited to the guidelines issued by Nepal RastraBank on 7th April 2005 Nabil Bank has implementedits Know Your Customer (KYC) and Anti MoneyLaundering (AML) policies with approval from theBoard of Directors to have it at par with internationalstandards, effective 14th July 2006. The first round oftraining to the entire staff of the Bank has beenconcluded as per the mandate of the policy. Theupdates about Money Laundering cases around theworld and its impact on the organization in part aswell as on the country as a whole have beendisseminated to the entire staff regularly. Inaccordance with predefined norms and standards,entire transactions of the Bank have been constantlymonitored and a system of informing the concernedauthorities has been developed in case of anysuspicious transactions observed to this end.

BASEL IIWith regard to Basel II implementation, Nepal RastraBank (NRB) has prescribed the approaches mostsuitable for Nepalese financial market. New capitaladequacy framework prescribed by NRB based onnew Capital Accord (Basel II) of Basel Committee onBanking Supervision is meant for parallel run in FY2007/08 and shall come to force effective FY 2008/09.

Nabil is privileged to be a part of new Capital AccordImplementation Group formed by NRB, the CentralBank of the country. Nabil regards Basel II as an

instrument that helps banks constantly improve itsrisk management system resulting in protection ofinterest of all the stakeholders and has startedmeasures to implement it in the Bank.

Upcoming Major Challenges and Bank'sPreparationsCompetition in the financial market is already toughwith the presence of large number of financialinstitutions including joint ventures of internationalbanks. Interest spread, exchange spread etc of banksare constantly narrowing. The competition isexpected to stiffen further with the government'scommitment of allowing foreign banks to open theirbranches by 1st January 2010. When internationalbanks come, they come with large capital, moderntechnology and an array of products. Experience ofour neighbouring countries suggests us not to panicwith the arrival of international banks. We howeverhave decided to focus on the following areas toremain competitive:� Augmenting Capital Base.� Developing expertise in various fields:

International banks have better exposure intreasury and credit products than local banks. TheBank has thus started measures for enhancingskills of its human resources in these products.

� Adopting best human resource practices.� Strengthening risk management system.� Improving customer service quality.� Maximizing use of Information Technology.� Product innovation and cost management


HUMAN RESOURCE

As part of our mission to be the 'Bank of 1st Choice' ofStaff, Nabil continuously strives to attract and retainhigh caliber talent. Being the "best" in the businesswould mean to be able to attract, develop and retainthe best talent in the business. The Bank providesmarket driven compensation and benefit packages, aprofessional challenging environment, state-of-the-art learning opportunities and a culture built on timetested values and beliefs.

We believe that the most important resource of theBank is its Human Resource and the talent pool wehave is one the most vibrant and energetic Teams inthe country. We believe we must continuously enrichand equip our "Entire Team" members with the latestmarket developments and provide opportunities toenhance knowledge to live up to the expectations ofall our stakeholders.

Under HR Development, the basic policy is to identifythe core strengths and capabilities of individual staff

members and utilize the same towards adding valueto the Bank. With this in mind our training policyfocuses not only on overcoming the weaknesses ofan individual, but rather building on strengths tofoster professionals who can help us continue to bethe Bank of 1st Choice of all our stakeholders. Duringthe financial year 2006/07, 68 different trainingprograms were conducted where 245 staffparticipated, 233 in local and 12 in foreign trainingprograms. During the year, 6 managers and 14 officerswere promoted to higher positions.

Our Human Resource Policy pertaining to JobDescriptions and Performance Management Processis regularly reviewed and enhanced. PerformanceManagement Contracts that have been implementedmake sure that the performing employees arerecognized and rewarded. The HR Managementalways focuses in putting the right staff in the rightjob and fostering a corporate culture that rewards aforward looking and creative attitude.


Through Mary Ward School , Nabil extends itssupport to deserving underprivileged students.


CORPORATE SOCIAL RESPONSIBILITY (CSR)

The notion of Corporate Social Responsibility (CSR)has been in Nepal dating back hundreds of years.“Giving voluntarily for greater good” has been anintrinsic part of the social and religious belief of thepeople of Nepal. Even business houses have activelybeen involved in trusteeship in their corporatetraditions in their own capacities but the last fewyears have witnessed a notable surge in the conceptof CSR with increasing numbers of business housesand large corporate establishments promoting thisconcept.

Nabil Bank since its inception in 1984 is in a uniqueposition in the banking industry in Nepal carrying withit 23 years of experience. When we look forward, wehave a mission and vision to be the ‘Bank of 1st Choice’for all our stakeholders - Customers, Shareholders,Regulators, Communities we work in and Staff.

We have charted our set of values C.R.I.S.P to attainthe mission statement: C - Customer Focused R - Result Oriented I - Innovative S - Synergistic P - Professional

It is our belief that the differentiator when it comes tothe CSR initiatives of Nabil Bank Ltd., a feeling that weall proudly support, would be our three pillaredstrategy on “Corporate Social Responsibility” whichgoes deeper than just providing funds for an event orproject. Just like with all our other stakeholders, heretoo we believe in building long term sustainablerelationships. Health, Education and Sports are ourmain thrust areas. In Health, we have partnered withthe Glaucoma Center at the Tilganga Eye Hospital toincrease overall knowledge about this blindingdisease. In Education, the Bank is supporting theeducation of underprivileged children at the Mary

Ward School affiliated with St. Mary’s High School. Andin Sport, we have entered into a partnership withNabil Three Star Club to promote the spirit of sport.

We believe CSR is closely linked with the principles ofsustainable development and long term partnershipbetween the parties where decisions are not basedon generation of profits or dividends but based onlong term social consequences. CSR for us goesbeyond charity where we are merely observing thebenefits generated from our initiative.

The 30 students from Mary Ward School who appearedfor their School Leaving Certificate (SLC ) examinationall passed with 1st divisions which was a pride for us aswell as the school and the students including theirfamilies. They are all underprivileged children whereMary Ward School is supporting the families for theirgirl child education. Not only is the Bank involved insupporting the children but the staff in their individualcapacities have been supporting deprived children fortheir educational needs and therefore are involved increating awareness in the importance of education inchildren especially in a country like Nepal wrought withmany problems; but we feel that if we in our owncapacities can even attempt to make a small difference,then a certain contribution has been made. This in factis a reflection that not only is Nabil as an institutioncommitted to such causes but the staff too uphold thisfeeling which in itself supports the fact that CSRinitiatives in Nabil will have continuity and is not just ashort term venture that has been undertaken.

To add to the above, the employees of the Bank on ayearly basis also conduct blood donation programswhere we have partnered with the Nepal Red CrossSociety (NRCS). This association with NRCS goes backseveral years and has remained a continuous processmuch appreciated by them with letters of appreciationprovided to the Bank for the initiative and support


shown. The employees of the Bank have also beensupporting girl child education for underprivilegedchildren long before the Bank as an institution adoptedits CSR initiatives which also goes to complement howclose such causes are to the people who form Nabil Bank.

The Bank in support of its other pillar - Health asalready mentioned above, has been associated with theGlaucoma Center at the Tilganga Eye Hospital wherewe have partnered with the hospital for enhancingawareness of this disease. Glaucoma is a verymisunderstood disease. Often, people don’t realize theseverity or who is affected. Glaucoma being an eyedisease that gradually steals sight without warning and

experts estimate that half of the people affected byglaucoma may not even know they have it, we havetaken a step forward for creating this awareness.

We have also partnered with the football team “NabilThree Star Club” with the basic vision to support theyouth and giving them yet another avenue forbuilding their careers as an athlete. In our part of theworld it is difficult to concentrate fully in games andsports and earn a standard living. We believe that inaddition to the financial support our Bank provides,we support our football team by being present inthe field when the matches take place and even to alarge extent support the players morally. Thepartnership has been mutually beneficial for boththe parties as “Nabil Three Star Club” has establisheditself among the top three teams in the country.

Apart from the above CSR initiatives that we havecontinued over the years, we have now partnered withWestern Union under their CSR ‘Agent Gift MatchProgram’ initiative to assist ‘Prayas’ an organizationinvolved in rehabilitation of street children in additionto providing further support to the Mary Ward School.This tri-party initiative is envisioned to benefit theseassociations who are established organizationshaving several years’ history in assuring nationwidesupport for burning social causes.

It is our vision to continue to give back to societyand add value wherever we can as a leading financialinstitution in the country with initiatives such asthese undertaken with care and forethought so asfor us to continue to be the Bank of 1st Choice inmany ways than just one.

Nabil continues to extend its partnership with Nabil ThreeStar Football Club


PRODUCTS AND SERVICES

DepositsAt Nabil, our dear depositors enjoy a good return on theirdeposits, convenience of modern banking technologyand the comfort of our financial reliability, withoutcompromising on any of them. Nabil offers an array ofdeposit products which provides interest rates quitecompetitive among the banks of its class. Equipped withseveral distribution channels like cards, internet banking,largest Network of branches and ATMs and Extendedbanking counters, Nabil offers its depositors the freedomof '24 hours a day, 365 days a year' access to their depositaccounts and an incredibly convenient bankingexperience. 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% reflectits sound financial stability and risk management skillswhich give a sense of comfort to our depositors thattheir dear savings will always be safe in Nabil. ThereforeNabil is today a well established brand name that comesto the minds of depositors.

Besides the regular deposit accounts like current,savings and fixed term deposits in local currency aswell as in a range of other major foreign currencies,Nabil also offers many other special deposit schemes.

NabilBachatNabilBachat is a premium deposit scheme that reflectsthe value and respect Nabil gives to its depositors.NabilBachat offers high interest rate on deposits, whichgets even higher as the deposited balance goes up. Inaddition, this scheme offers Visa Electron Debit Card, AnyBranch Banking Service, internet banking service'NabilNet', Issuance of Travellers Cheques, Issuance ofBalance Certificate, all free of charge.

Call DepositsFor the valued customers, Nabil offers Call Deposits,specially structured to suit its customer's needs. Underthis scheme, Nabil even offers the home banking

services whereby Nabil goes to the customers'doorsteps to give them exclusive banking services.

Privilege LoungeAt the Privilege Lounge, Nabil's valued customers canenjoy exclusive premium banking experience in aqueue-free and personal environment, whilst they availof the most professional of service deliveries. A team ofRelationship Managers are always more than happy togive their customers a personalized service, offerfinancial advices and any assistance what-so-ever ontheir financial requirements. Nabil believes inrelationships for mutual growth and feels proud to havegrown on foundation of the relationships that Nabil hasbuilt over the decades.

Any Branch Banking ServiceThanks to the latest infrastructure in IT connectivityand the renowned core-banking software 'Finacle', all

Mr. Janardan Baral, lucky winner of Nabil Bachat MegaLucky draw, enjoying his prize “Toyota Echo Car”



In today's world, customer serviceseems to be a thing of the past. Not sowith Nabil Cards. I rarely haveproblems, but when I do, I am alwaysable to get through to someone whocan solve my problem then and there24 hours a day, 365 days a year. NabilCards has made my global businessworld a smaller place. Everything is justa swipe away -convenience at its best.

MR. AJIT BIKRAM SHAHChairmanFormation Carpet

I get all the attention I need from NabilBank when it comes to meeting my

financial needs. Nabil Bank does notlose its focus from a customer just

because its business is small in size.

MS. DOMA LAMA Doma Lama Group

In terms of banking services, expertfinancial advice and customization, Ifind Nabil truly a reliable anddependable bank.

MR. UDAY BIR GURUNG,Regional Managing DirectorGroup 4 Securicor Nepal Pvt. Ltd.


28 Nabil outlets and 31 units of 24-hour-operative ATMsare inter-connected on real-time basis. This gives thecustomers the complete freedom of operating theiraccount from any of Nabil's branches and ATMs, nomatter in which branch they maintain their account.Nabil's network of branches and ATMs is the biggestamong private sector banks in the country with itspresence from Far West to Far East of Nepal.

Extended Banking HoursFor customers who do not find time for even smallbanking transactions during office hours, Nabilprovides 365 days banking and evening counterservices from selected branches through which all theNabil customers can operate their accounts.

Internet Banking ServiceFor customers who do not wish to leave the comfortof their own home or office simply for accountinformation and fund transfer, the Bank offers'NabilNet', an internet banking solution throughwhich customers can view their account informationand even transfer funds, in a secured environment.

Additional ServicesFor the Bank's deposit relationships there are otherhost of services available at Nabil, like implementingStanding Instructions on accounts, issuing BalanceCertificates, certifying 'Good for Payment' on chequesand sending/receiving remittances to/from around theworld through its vast network of correspondents.

Business BankingBusiness Banking is a dedicated division within theBank to serve the Bank's corporate relationships. Itfacilitates business loans with its diverse andcustomized offers to its wide range of customers,from small enterprises loans to large corporate andmultinational business loans. Highly trained anddedicated Relationship Managers based in various

branch locations throughout the country ensure thatNabil products and facilities are tailored to meet thechanging business needs of the customers.

Working Capital & Project FinancingsNabil, through its wide range of flexible products likeOverdraft, Demand Loan, Time Loan, Short Term Loan,Import Loan etc, can accommodate all specific needsfor the customers' working capital requirements,whether the need arises for maintaining primary assetsinventory, meeting operating costs, financing forreceivables, importing goods etc., depending on thenature of specific business and trade cycle.Relationship Managers maintain continuous closecommunications with customers to ensure readinessfor financing any requirements on a timely andadequate manner. Medium and Long Term loanproducts having more flexible characteristics in termsof time period, installment schedule etc., dependingon the project cash flow and borrowers repaymentability are availed for creating fixed and movableassets required for projects under consideration.

Trade FinanceNabil, through its extensive domestic and internationalnetwork of correspondent banking relationships, iswell poised to meet the needs of customers' Importand Export transactions through the facilitation ofLetters of Credit, Letters of Guarantee & CounterGuarantee, Drafts, SWIFT transfers etc., efficiently atcompetitive rates. Various forms of Import and ExportLoans are availed for financing on trade transactionssuch as Transit Loans, Draft Discounting, Import andExport Bill Discounting or Purchasing, Pre ShipmentLoan, Post Shipment Loan etc.

Priority & Deprived Sector Financing or RefinancingNabil has formulated various products to extenddirect and indirect financing towards micro and smallenterprises which help increase production,


employment and income as prioritized under thenational development plans with an objective touplift the living standard of general publicparticularly the deprived and low income people byprogressively reducing the prevalent unemployment,poverty, economic inequality and backwardness. TheBank has made equity investment in various leadingCo-operatives and Rural Development Banks tofurther partake in these activities. Nabil hasrefinanced in the deprived sectors mostly throughthese Co-operatives and Rural Development Banksproviding Institutional Loans.

Mortgage LoanThe Nabil Mortgage Loan Product provides hasslefree finance facilities for individuals and corporatebodies to meet their various needs like developmentof commercial complexes, acquisition of residentialcomplexes, commercial properties, repairs andrenovation of residential or commercial property, orto meet business requirements, etc. by simplymortgaging their idle properties and availing of theneeded cash flow.

Personal LendingNabil offers a wide range of Personal LendingProducts to meet the consumer loan needs of itscustomers and turn their lifetime dreams into reality.Nabil is dedicated to cater to customers' needs with apersonal touch with each loan specifically tailor madeand designed keeping in mind the specific needs ofthe individual customer. This customer care can beexperienced through the bank's array of PersonalLending Products that the Bank offers.

NabilHousing makes the dream of owning a home areality with attractive features available beyondmarket offerings at competitive interest rates andextended loan tenures, with flexible repayment andpartial payment features.

NabilProperties constitutes an all purpose loanscheme, not limited just for education, marriage,travel, equity infusion purposes only, but a widevariety of other purposes available to fulfill variedfinancial requirements just by simply mortgaging idleproperty. Application is easy and loan sanction anddelivery expeditious.

NabilAuto makes commuting easier and owning afour wheeler a reality at attractive interest rates, loantenures and flexible repayment options withfinancing available for a large variety of vehicles, withspecial facilities to draw cash by pledging a vehicle inthe Bank's name also available under the 'Cash forCar' scheme.

NabilPersonal, an all purpose, small ticket size easyloan scheme, makes commitments comfortable byproviding a hassle free finance facility at competitiveinterest rate options available.

NabilSiksha extends easy financial solution to thestudents going abroad for further/higher education.It is highly customer friendly loan available withpartial disbursement facility and having revolvingfeature in Education Loan category. Our financing isnot restricted to the education expenses of thestudents but is also designed to accommodate otherexpenses of the students viz. boarding cost, travelingexpenses, consultancy fees etc.

Personal Overdraft has been designed to meetcontingent obligations of our valued customers. Thisproduct helps our valued customers with easy andfast processing of loan with easy payback featureand reinstating credit facility.

Apartment Financing is an extended product ofNabilHousing, which is targeted to those customerswho want to purchase a residential unit or apartment


built as per the Community Housing Act (SanyuktaAwash Ain).

Remittance ProductsNabil Bank offers a number of remittance products tocater the customer needs for transferring their moneyin and out of the country.

Western Union: Nabil Bank is the only Principal BankAgent for rendering Western Union Money Transferservices. In order to provide the service throughoutthe country, there are over 450 authorized subagentsof Nabil Bank in different parts of the country.

NABILREMIT: Nabil Bank has commenced its domesticremittance services for money transfers from oneplace to another place in Nepal. There are over 250NABILREMIT agents established in different parts ofthe country for rendering the domestic moneytransfer services.

Foreign Inward Remittances: Nabil Bank hasestablished remittance relationships with a numberof exchange companies and banks in Qatar, UAE,Kuwait, Saudi Arabia and so forth for renderingforeign inward remittance services.

SWIFT transfers: Through the SWIFT transfermechanism, funds can be transferred to virtuallyanywhere in the world. Likewise funds can also bereceived into the customers’ accounts with us fromvirtually any bank in the world. SWIFT stands forSociety for Worldwide Interbank FinancialTelecommunication System, which is a reliablecommunication network speeding up fund transferand other financial messages.

Traveler's Cheques: Instead of carrying cash, a lot ofpeople prefer to carry traveler's cheques for safetyreason, while they travel. Nabil Bank purchases andissues Traveler's Cheques at competitive prices.

Demand Drafts: To meet the customers’ need forsending demand drafts, Nabil Bank uses its networkof its correspondent banks located all over the world.

Anywhere Branch Banking: The online connectivity ofall our outlets makes it possible to remit fundsdomestically to and from any of the branches locatedthroughout the kingdom.

Cards ProductsNabil bank, a pioneer in issuing internationallybranded cards, launched its first MasterCard creditcard in 1993. With this experience of more than adecade, Nabil today stands on the forefront in cardservices by providing arrays of card products likecredit cards, debit cards and prepaid cards in worldrenowned brands like MasterCard and Visa.

Nabil MasterCard and Visa local cards can be used inNepal and India in over 250,000 outlets for purchases



and in around 25,000 ATMs. Nabil is one of the veryfew banks in the country who offer 'MasterCardInternational' against customers' USD Account oragainst Passport facility that is accepted in countlessATMs and outlets all over the world. For convenienceof the cardholders, Nabil cards have flexible re-payment options whereby customers can choose topay any percentage from 10% to 100% of the dueamount.

Similarly, Nabil Visa Electron Debit cards and prepaidcards are hassle free, readily available and simple touse. These cards are also accepted for purchases andin ATMs in both Nepal and India. There is no charge

on use of Visa Electron and Prepaid cards for cashwithdrawal from Nabil ATMs and purchase in anyoutlet across Nepal and India.

For a single Bank in Nepal, Nabil has the largestnetwork of 31 ATMs and more than 800 POS terminalsspreading across the country from Birtamode toMahendranagar that accepts range of card brandslike Mastercard, Visa, Maestro, Cirrus, Visa Electron,Visa Plus and SCT cards. Nabil also provides service ofonline payments through its Card Division andselected branches enabling customers to makepayments like test registrations, membership fees,purchase of books, journals etc.


T H E S H A R E H O L D E R S O F N A B I L B A N K L I M I T E D

INDEPENDENT AUDITOR’S REPORT

We have audited the accompanying Balance Sheet of Nabil Bank Limited, as of 16 July 2007 (Corresponding to 32Ashad 2064), the related Profit and Loss Account and the Cash Flow Statement for the year then ended. These financialstatements are the responsibility of the management of the Bank. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audit in accordance with Nepal Standards on Auditing. Those Standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statement presentation. We believe that our audit providesa 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 necessaryfor 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 ourexamination 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 ofaccount maintained by the Bank;

e) in our opinion, so far as appeared from our examination of the books, the Bank has maintained adequate capitalfunds and adequate provisions for possible impairment of assets in accordance with the directives of Nepal RastraBank;

f ) in our opinion, so far as appeared from our examination of the books, the business of the Bank has beenconducted satisfactorily;

g) to the best of our information and according to explanations given to us and from our examination of the booksof account of the Bank necessary for the purpose of our audit, we have not come across cases where Board ofDirectors or any employees of the Bank have acted contrary to the provisions of law, or committed anymisappropriation or caused loss or damage to the Bank and violated any directives of Nepal Rastra Bank or actedin 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 16July 2007 (Corresponding to 32 Ashad 2064), the results of operations and its cash flows for the year then ended inaccordance with Nepal Accounting Standards except for the certain matters stated in Notes to Account, GenerallyAccepted Accounting Principles and comply with the provisions of the Company Act, 2063 and Bank and FinancialInstitution Act, 2063.

T R UpadhyaySenior PartnerFor and on behalf of T R Upadhya & Co.Chartered Accountants27 August 2007 (10 Bhadra 2064), Kathmandu

T.R. Upadhyaya & Co. is a

correspondent firm of KPMG International

104 Tanka Prasad Marg

Baneshwor Height

Post Box 4414

Kathmandu, Nepal

Telephone: 977 (1) 4495000, 4472658

Fax: 977(1) 4474178

E-mail: [email protected]

T. R. Upadhya & Co.Chartered Accountants


Schedules 1 to 17 form integral part of the Balance Sheet.

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

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

Nabil Bank Limited

Balance Sheetas at 16 July 2007

Figures in NPR

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

Anil ShahChief Executive Officer

S. GuptaDirector

S. P. PoudyalDirector

As per our report of

even date.

Date: 27 August 2007

Place: Nabil House, Kamaladi, Kathmandu

T. R. Upadhyay , FCASenior Partner

T.R. Upadhya & Co.Chartered Accountants

S. P. ShresthaChairman

Bhuvan DahalHead Finance & Planning

M. B. ShahDirector

A. P. BazgainDirector

D. G. AgrawalDirector


Nabil Bank Limited

Profit and Loss AccountFor the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashadh 2064)


S. GuptaDirector



even date.




T.R. Upadhya & Co.

Chartered Accountants



M. B. Shah

Director

A. P. Bazgain

Director


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 1,032,048,605 952,837,1963. 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 1,359,512,6336. 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 1,051,813,270 957,035,3679. Provision for Possible Losses 25 14,206,365 3,769,541

Operating Profit 1,037,606,905 953,265,82610. 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 1,053,813,863 961,730,59412. Income/(Expense) from Extra-ordinary Activities 28 40,736,694 26,073,578

Profit from All Activities 1,094,550,557 987,804,17213. 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.



S. GuptaDirector



even date.




T.R. Upadhya & Co.Chartered Accountants



M. B. ShahDirector

A. P. BazgainDirector


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 902,697,715 665,244,257EXPENSE

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 789,316,160 631,806,24014. Accumulated Profit/(Loss) 113,381,555 33,438,017

Nabil Bank Limited

Profit & Loss Appropriation AccountFiscal Year 2006/07 (2063/64)

Figures in NPR

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Figu

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PR


PREVIOUS YEAR PARTICULARS THIS YEAR

(1,030,740,778) (a) Cash Flow from Operating Activities 544,233,7171,572,877,673 1. Cash Received 2,009,665,0571,092,644,431 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 4,290,417,0114,760,790,733 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 630,238,588630,238,588 (g) Closing Cash and Bank Balance 1,399,825,851

Nabil Bank Limited

Cash Flow Statement(For the period from 17 July 2006 to 16 July 2007)

Figures in NPR


Nabil Bank Limited

Share Capital and Ownership(As at 16 July 2007)

Schedule 1


1. Share Capital500,000,000 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 a) 4,916,544 Ordinary Shares of Rs. 100 each 491,654,400



491,654,400 1.3 Paid Up Capital 491,654,400 491,654,400 a) 4,916,544 Ordinary Shares of Rs. 100 each 491,654,400



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

Share Ownership 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

Details of Shareholders Holding 0.5% or More SharesFigures in NPR



Nabil Bank Limited

Reserves & Surplus(As at 16 July 2007)

Schedule 2


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) 113,381,55544,200,000 8. Exchange Fluctuation Fund 55,700,000

1,383,340,017 Total 1,565,395,315

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

Debentures & Bonds(As at 16 July 2007) Schedule 3

Figures in NPR


Nabil Bank Limited

Borrowings(As at 16 July 2007)

Figures in NPR

Schedule 4


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(As at 16 July 2007)

Schedule 5


1. Interest Free Deposits2,910,589,772 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

5,430,836 2. Foreign Currency 42,194,417- 2.1 Financial Institutions -


- 2.3 Individual 501,617

3,276,385,918 Total (A+B+C) 3,758,107,748

Figures in NPR

Contd.



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 -

746,807,969 2. Foreign Currency 488,448,292- 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) 19,584,177,57919,347,399,440 Total Deposits (1+2) 23,342,285,327

Cont.Figures in NPR


Nabil Bank Limited

Other Liabilities(As at 16 July 2007)

Schedule 7


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

Figures in NPR

Nabil Bank Limited

Bills Payable(As at 16 July 2007) Schedule 6


23,759,143 1. Local Currency 37,251,554

68,777,710 2. Foreign Currency 46,263,266

92,536,853 Total 83,514,820

Figures in NPR

Nabil Bank Limited

Cash Balance(As at 16 July 2007) Schedule 8


220,109,142 1. Local Currency (Including Coins) 243,058,422

17,709,370 2. Foreign Currency 27,348,565

237,818,512 Total 270,406,987

Figures in NPR

Nabil Bank Limited

Balance with Nepal Rastra Bank(As at 16 July 2007)

Note:Balance as per the confirmation statements is Rs. 1,236,598,879

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)

Schedule 9Figures in NPR


Nabil Bank Limited

Balance with Banks / Financial Institutions(As at 16 July 2007)

Note: Balance as per the confirmation statements is Rs. 386,934,141

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

Schedule 10Figures in NPR

Nabil Bank Limited

Money at Call and Short Notice(As at 16 July 2007)

Schedule 11


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

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

Figures in NPR

Nabil Bank Limited

Investments(As at 16 July 2007)

Schedule 12


Nab

il B

ank

Lim

ited

Inve

stm

ent i

n S

har

es, D

eben

ture

s an

d B

on

ds

(As

at 1

6 Ju

ly 2

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Figu

res

in N

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PR

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1.

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1 N

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of

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35

3,0

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the

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in N

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(NEP

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Sch

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2

(A)

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of L

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Pu

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s at

16

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200

7 )

PR

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Figu

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in N

PR

PR

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SEC

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13

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Per

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Lo

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22,

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1,0

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4,39

4,75

4,01

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15,

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961

79,

816,

627

162

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242

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15,

724,

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13,

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147

1.1

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9,25

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14,

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6,7

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1.2

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39,5

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8,27

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7,79

9

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2. N

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9,8

18,9

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160

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545

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177

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239

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535

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775

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178

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62,

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2.1

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1,5

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19,7

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2.2

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3,49

5,39

6 -

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1,64

6

90,

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2.3

Loss

7,9

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31,

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545

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43,

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239

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535

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259

A. T

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+2)

32,

248,

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1,0

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4,55

5,70

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15,

659,

956,

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80,

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972

163

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243

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15,

903,

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765

3. L

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Lo

ss P

rovi

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130

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3.1

Pas

s 5

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0,57

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7 1

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77,4

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7,42

4 1

73,0

79,6

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98,1

66 1

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2,4

22,9

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75,5

02,5

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83,

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156

3.2

Res

tru

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1,09

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96,

583

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13

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- -

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85,

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837

3.5

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1,9

90,7

38 3

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31,

050,

225

545

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37,

370,

437

239

,345

535

,740

775

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356,

239,

106

B. T

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47,0

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4. P

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up to

pre

viou

s yea

r

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24.

1 P

ass

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6,7

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4 D

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ss 1

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7

360,

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C. T

otal

Pre

viou

s Yea

r's P

rovi

sion

2,1

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77 1

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9,00

2 3

36,1

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64 1

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351

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1,2

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52,6

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56,2

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4D

. Wri

tten

Bac

k Th

is Y

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154

,154

593

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747

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166

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1,2

88,0

16 1

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2,2

02,3

31

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Ad

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Th

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93,7

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F. C

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ges

Th

is Y

ear

14,

547

3,1

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13 (

154,

154)

(59

3,49

1) 2

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(16

6,67

1) (

1,28

8,01

6) (

1,45

4,68

7) 1

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12,

922,

543,

153

Net

Lo

an (A

-B)

30,

065,

960

1,0

49,4

98,3

92 1

4,21

9,67

0,48

7 6

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15,

305,

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79,

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160

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239

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545,

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Sch

edu

le 1

3

DO

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FOR

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UN

INSU

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Nabil Bank Limited

Securitywise Loans, Advances and Bills Purchased(As at 16 July 2007)

Schedule 13 (A)


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

Figures in NPR

%A

MO

UN

T

Nab

il B

ank

Lim

ited

Fixe

d A

sset

s(A

s at

16

July

200

7 )

1. C

ost

Pri

ce

54

4,2

31

,37

9a.

Pre

vio

us Y

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Figures in NPR

Nabil Bank Limited

Other Assets(As at 16 July 2007)

Schedule 16


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

Figures in NPR

Nabil Bank Limited

Other Assets (Additional Statement)(As at 16 July 2007)

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(As at 16 July 2007)

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

Figures in NPR

Nabil Bank Limited

Interest Income(For the period from 17 July 2006 to 16 July 2007)

Schedule 18


986,231,566 A. Loans, Advances and Overdraft 1,167,255,366653,811,235 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

Figures in NPR


Nabil Bank Limited

Interest Expense(For the period from 17 July 2006 to 16 July 2007)

Schedule 19


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

Figures in NPR

Nabil Bank Limited

Commission & Discount(For the period from 17 July 2006 to 16 July 2007)

Schedule 20


6,322,210 A. Bills Purchase & Discount 6,912,481882,240 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

Figures in NPR


Nabil Bank Limited

Personnel Expense(For the period from 17 July 2006 to 16 July 2007)

Schedule 23


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

Figures in NPR

Nabil Bank Limited

Exchange Gain/ (Loss)(For the period from 17 July 2006 to 16 July 2007)

Schedule 22


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

Figures in NPR

Nabil Bank Limited

Other Income(For the period from 17 July 2006 to 16 July 2007)

Schedule 21


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

Figures in NPR


Nabil Bank Limited

Office Operating Expense(For the period from 17 July 2006 to 16 July 2007)

Schedule 24


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

Figures in NPR


Nabil Bank Limited

Provision for Possible Losses(Fiscal Year 2006/07)

Schedule 25


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

Figures in NPR

Nabil Bank Limited

Non-Operating Income/(Loss)(For the period from 17 July 2006 to 16 July 2007)

Schedule 26


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

Figures in NPR

Nabil Bank Limited

Income/(Expense) from Extra-Ordinary Activities(For the period from 17 July 2006 to 16 July 2007)

Schedule 28


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

Figures in NPR

Nabil Bank Limited

Provision for Possible Losses Write Back(Fiscal Year 2006/07)

Schedule 27



- 2. Non-Banking Assets -

300,000 3. Investments 2,125,000

- 4. Other Assets 6,598,986

7,729,444 Total 10,926,317

Figures in NPR



- 2. Non-Banking Assets -

300,000 3. Investments 2,125,000

- 4. Other Assets 6,598,986

7,729,444 Total 10,926,317


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Nabil Bank Limited

Capital Fund Table(As at 16 July 2007 )

Schedule 30

DETAILS THIS YEAR PREVIOUS YEAR

A. Core Capital 1,992,849,715 1,823,044,4171) 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 314,782,680 266,279,6051) 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 2,089,324,022D. Minimum Capital Fund Requirement onthe basis of Risk Weighted AssetsTotal 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

Figures in NPR


Nab

il B

ank

Lim

ited

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le o

f Ris

k W

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d A

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s at

16

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at F

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ney

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of A

+ ra

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97,

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anks

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er In

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stm

ent o

n S

har

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ther

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ther

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10

0 8

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21,

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%


Nab

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ited

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nci

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Net

Pro

fit/

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ss I

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me

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arn

ing

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er S

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ket

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ue

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are

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ce E

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5. D

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end

(in

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din

g b

on

us)

on

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are

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ital

% 3

0 5

0 6

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40

6. C

ash

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iden

d o

n S

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e C

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30

50

65

70

85

100

7.

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rest

In

com

e/Lo

ans

& A

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nce

s%

10

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3 9

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8.1

4

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e Ex

pen

se/T

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l O

per

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g E

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se%

19

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28

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24

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9.

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rest

Exp

ense

on

To

tal D

epo

sit

and

% 2

.91

2.0

9 1

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1.6

8 2

.09

2.5

4

Bo

rro

win

gs

10. E

xch

ang

e G

ain

/To

tal

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me

% 9

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10

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11

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12

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10

.31

10

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11. S

taff

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nu

s/ T

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plo

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Exp

ense

s%

30

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31

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39

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42

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40

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41

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12. N

et P

rofi

t/Lo

ans

& A

dva

nce

s%

3.5

1 5

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5.3

3 5

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5.2

4 4

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13. N

et P

rofi

t/ T

ota

l A

sset

s%

1.5

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2.7

3 3

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3.2

3 2

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14. T

ota

l C

red

it/D

epo

sit

% 5

0.3

1 6

0.3

4 6

0.5

5 7

5.0

5 6

8.6

3 6

8.1

3

15. T

ota

l O

per

atin

g E

xpen

ses/

Tota

l A

sset

s%

4.2

0 4

.06

3.6

9 3

.73

3.8

6 3

.97

16. A

deq

uacy

of C

apita

l Fun

d o

n Ri

sk W

eigh

ted

Ass

ets

a. C

ore

Cap

ital

% 1

0.5

3 1

1.4

5 1

2.1

2 1

1.3

5 1

0.7

8 1

0.4

0

b.

Sup

ple

men

tary

Cap

ital

% 3

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1.6

0 1

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1.0

9 1

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1.6

4

c. T

ota

l Cap

ital

Fu

nd

% 1

3.8

6 1

3.0

5 1

3.5

6 1

2.4

4 1

2.3

1 1

2.0

4

17. L

iqu

idit

y (C

RR

)%

6.7

8 8

.51

6.8

7 3

.83

3.2

6 6

.00

18. N

on

Per

form

ing

Lo

ans/

Tota

l Lo

ans

% 7

.14

5.5

4 3

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1.3

2 1

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1.1

2

19.

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gh

ted

Ave

rag

e In

tere

st R

ate

Spre

ad%

4.0

2 4

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4.4

6 5

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4.9

0 4

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20. B

oo

k N

et W

ort

h P

er S

har

eRs

. 2

33 2

67 3

01 3

37 3

81 4

18

21. T

ota

l Sh

ares

Nu

mb

er

4,9

16

,54

4 4

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6,5

44

4,9

16

,54

4 4

,91

6,5

44

4,9

16

,54

4 4

,916

,544

22. T

ota

l Em

plo

yees

Nu

mb

er

382

326

372

426

441

427

Sch

edu

le 3

0(A

)

Not

e: D

enom

inat

ors

of p

oin

t no.

7,9,

12,1

3 &

15

abov

e ar

e av

erag

e of

last

yea

r an

d th

is y

ear f

igur

e

N

umer

ator

of p

oin

t n

o 7

abov

e is

inte

rest

inco

me

loan

an

d ad

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ces

only

.

L

iqui

dity

(poi

nt

no

17 a

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) is

cas

h a

nd

ban

k ba

lan

ce t

o to

tal d

epos

its

as o

f yea

r en

d.



Schedule 32

i) General informationNabil Bank Limited (“the Bank”) is a limited liabilitycompany domiciled in Nepal. The address of itsregistered office is Kathmandu, Nepal. The Bank is

listed on the Nepal Stock Exchange Limited.

The Bank is running a commercial banking businessin Nepal. The financial statements were authorised for

issue by the Board of Directors on 27 August 2007.

ii) Summary of Significant AccountingPoliciesThe principal accounting policies applied in thepreparation of these financial statements are set outbelow. These policies have been consistently applied

to all the years presented, unless otherwise stated.

iii) Statement of ComplianceThe financial statements have been prepared inaccordance with Nepal Accounting Standards (“NAS”)except otherwise stated, Generally AcceptedAccounting Principles (“GAAP”), Bank & Financial

Institutions Act, NRB Directives and the Company Act.

iv) Basis of PreparationThe financial statements are prepared on historicalcost basis except for foreign currency items. Thepreparation of financial statements in conformitywith NAS and GAAP requires the use of certain criticalaccounting estimates. It also requires management toexercise judgement in process of applying the Bank’s

accounting policies.

v) Interest IncomeInterest income on loans and advances arerecognised on cash basis as per the Nepal RastraBank Directive. Recognizing income on cash basis isnot in accordance with the Nepal AccountingStandard, NAS 7 (Revenue Accounting), which

Principal Accounting Policies

prescribes that the revenue should be recognised onaccrual basis. The practice followed by the Bank (asper NRB Directives) is more conservative. Interestincome on Investments is accounted for on accrual

basis.

vi) Commission IncomeGuarantee commission of more than Rs 50,000 fromguarantee having maturity more than a year isaccounted for on accrual basis. All other commissionincome is booked at the time of the transaction.

vii) Dividend IncomeDividend on equity shares are recognised on cash

basis.

viii) Foreign Exchange TransactionsForeign currency assets and liabilities are translatedinto Nepalese Rupees at the prevailing mid exchangerate ruling on the Balance Sheet date.

Income realised from the difference between buyingand selling rates of Foreign Exchange is accountedfor on a daily basis and shown as “Trading Gain”under “Exchange Gain” in Schedule 22. Gains/lossesarising due to fluctuation in exchange rate ofdifferent foreign currencies is accounted for on adaily basis and shown as “Revaluation Gain”. 25% ofsuch revaluation gain (Rs.11.5 million this year) istransferred to Exchange Fluctuation Fund throughProfit and Loss Appropriation Account as per NepalRastra Bank Directive. Premium/discount on foreignexchange forward contract is accounted for in theProfit and Loss account at the time of transaction.

ix) Interest ExpenseInterest on deposit liabilities and borrowings from

other banks are accounted for on accrual basis.


x) Loans and Advances including BillsPurchasedLoans and advances, overdrafts and bills purchasedinclude direct finance provided to customers. Theseinclude short term loans, long term loans, consumerloans and loans given to priority and deprivedsectors. These assets are classified as per Nepal RastraBank’s Directives. Loans and advances including billspurchased are shown net off provisions.

xi) Staff LoansLoans and advances granted to staff in accordancewith the rules of the Bank are shown under OtherAssets.

xii) Loan Loss ProvisionProvision for possible losses is made to cover therisks inherent in Bank’s assets portfolio. Provision forpossible losses from loans, advances and billspurchased are made at the rates ranging from 0.25%to 100% according to classification of such risk assetsas per NRB directive. Provision has been madeexceeding the regulatory requirement (Nepal RastraBank guideline) in some accounts to ensure acomfortable cushion.

xiii) Write OffLoan accounts graded ‘Bad’ in compliance with NepalRastra Bank standard are written off in the books asper criteria approved by the Board and in accordancewith Section 25(2)(a) of Income Tax Act 2002, withoutprejudice to Bank’s right to recovery.

xiv) InvestmentsInvestments are valued at lower of cost or marketvalue. Diminution in the value of investments is

provided for to cover the possible losses. Investmentsin unlisted companies’ shares are valued at cost.

Premiums are capitalised and amortised from thedate of purchase to maturity.

All Investments are subject to regular review asrequired by Nepal Rastra Bank Directives.

xv) Fixed Assets and Depreciationa. Fixed assets are stated at cost less accumulateddepreciation.

b. Depreciation is charged to Profit & Loss Account ona Written Down Value method over the estimateduseful lives of fixed assets. Land is not depreciated.The depreciation rates applied for various assetcategories are as follows:

c. In case of fixed assets purchased during the yearand booked for more than one month, depreciationis charged from the subsequent month of booking.Depreciation on fixed assets sold or disposed offduring the year is charged up to the previous monthof such disposal.

d. Leasehold improvements are amortized over theperiod of lease.

NATURE OF ASSETS DEPRECIATION RATE

Furniture 25%

Equipments 25%

Vehicles 20%

Computers 25%

Building 5%


e. Acquired computer software licences are capitalisedon the basis of cost incurred to acquire and bring touse the specific software. Such costs are amortizedover the useful life of the software, estimated as 5years.

f. Non-consumable items having life less than oneyear and/or costing less than Rs.5,000 is expensed offduring the year of purchase.

xvi) Gratuity & Provident FundGratuity & Provident Fund are expensed off onaccrual basis. Bank has put aside 100% fund requiredto meet its gratuity liabilities up to mid-July 2007.Total gratuity liability pertaining to period up to midJuly 2003 is shown under the head ‘Gratuity Fund’ of‘Other Liabilities’- Schedule 7. Gratuity liabilityincurred thereafter together with entire providentfund liability up to mid July 2007 have beenaccounted for as income of the concerned staff andthe same has been transferred to the approvedretirement fund named Nabil Bank LimitedRetirement Fund.

xvii) Staff BonusStaff bonus is provided at 10% of net profit beforetax (after deducting bonus).

xviii) Staff Leave EncashmentStaff leave encashment is accounted for on cashbasis. As per Human Resource Rules, the Bank paysmoney to the employees every year for leave balancein excess of 75 days, liability of which is Rs.26 million.

This practice is not strictly in line with NAS.

xix) Stationery StockStationery purchased are stated at cost and chargedto revenue at the time of consumption.

xx) Provision for TaxationProvision for taxation has been made on the basis ofthe Income Tax Act 2002 and amendments thereto.

xxi) Basis of Interest ComputationInterest expense on interest bearing deposits/borrowings and interest income on loans andinvestments are computed on the basis of 365 days ayear. In case of foreign currency investments, it iscomputed on the basis of 365 days a year for GBPand 360 days a year for USD & EUR.


Schedule 33Notes to Accounts

A) Reconciliationi. Inter-Bank Reconciliation:

With Nepal Rastra Bank

With Local Licensed Institutions

With Foreign Banks

Figures in NPR

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

Ledger Debit Statement Debit Ledger Credit Statement Credit

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


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.


Figures in NPR

Gross Loans, Advances & Discount 15,903,023,765 13,278,782,259 2,624,241,506 19.8

FY 2006/07 FY 2005/06 Amount %

Increase

B) Details of Loans, Advances and Discount

C) Statement of Changes in Deposits

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

Figures in NPR

Recovary efforts are pursued including referrals to Debt Recovery Tribunal.

Figures in NPR

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

FY 2006/07 FY 2005/06 Amount %

Increase

Principal Rs. 15,614,079

Interest Rs. 36,153,145

Details of Book Write off Accounts

Out of above, actual write off made till date is as follows:


D) General ReserveBank and Financial Institution Act requires the Bankto transfer minimum 20% of Profit after tax togeneral reserve until it becomes double of the paidup capital. The Bank has thus transferred Rs. 8.5million only this year which makes the generalreserve more than double of paid up capital.

E) Contingency FundRs.1,000,000 has been appropriated from this year'snet profit to "Contingent Reserve".

F) Capital Adjustment ReserveContrary to previous capital policy, new capitalpolicy of the central bank (Nepal Rastra Bank)requires the Bank to increase paid up capital eachyear to make it minimum Rs.1.6 billion by mid July2013. The Bank has already submitted a capital planto NRB in this regard and has proposed to issue thisyear 40 bonus shares for 100 shares held. The Bankhas thus started utilizing capital adjustment reservecreated in the past to issue bonus shares in line withthe previous capital policy of NRB.

G) Income TaxShortfall of Rs.46,045 in Corporate Tax provisionedfor FY 2005/06 and Rs.6,513,648 paid for settlingcorporate 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 TaxSettlement Commission for FYs 1999/2000 to 2004/05.Bank's corporate tax liability up to FY 2004/05 iscleared by tax authority.

H) Staff Housing FundSince the Bank has the policy of providing housingloan to its employees, provision for staff housingfund has not been made as per the Labour Act. Thisis in line with the practice followed by other banks.

I) Weighted Average Interest Rate Spread

Annual average of loans, investments, deposits andborrowings have been taken while computing above.

J) Details of Leasehold Assets

Weighted Average Interest on Loans & Investment 6.65%

Weighted Average Interest on Deposits & Borrowing 2.50%

Net Spread 4.15%

Figures in NPR

PARTICULARS THIS YEAR PREVIOUS YEAR

1. At Cost 22,306,839 24,159,314a. Upto last year 24,159,314 26,009,761

b. Addition this year 3,871,283 2,056,780

c. Deduction this year (5,723,758) (3,907,227)

2. Amortization 8,661,291 9,844,171a. Upto last year 9,844,171 8,745,213

b. Addition this year 4,527,141 4,991,678

c. Deduction this year (5,710,020) (3,892,720)

3. Remaining Value 13,645,548 14,315,143


AssetsCash 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) -

PARTICULARS REMAINING TERMS TO MATURITY

1-90 DAYS 90-180 DAYS 181-270 DAYS 271-365 DAYS OVER 1 YEAR TOTAL

K) Statement of Liquidity Risk Analysis (as at 16 July 2007)

L) Share Distribution of Master Card InternationalMaster Card International on conversion into a private stock corporation allocated its franchisee class B commonstock to members in recognition of their membership interest. The bank presently holds 1114 class B commonstock having a par value of USD 0.0001 each.

M) Rounding Off & RegroupingFigures have been rounded off to the nearest rupee and previous year's figures have been regrouped wherevernecessary.

Figures in NPR 100,000s


NABIL BANK LIMITEDHead OfficeNabil House, Kamaladi, KathmanduP.O. Box: 3729, KathmanduPhone: +977 1 4430425, 4429546-47,4435380-85Telex: 2431 NABILH NPFax: +977 1 4429548Swift: NARBNPKA

BRANCH OFFICESKantipath BranchKantipath, KathmanduPhone: 4227181, 4226785-87Fax: 4226905P.O.Box: 3729, Kathmandu

Tripureshwore BranchUWTC, Tripureshwore , KathmanduPhone:4117014-17Fax: 4117018P.O. Box: 3729, Kathmandu

New Road BranchNew Road, KathmanduPhone: 4224592, 4224533, 4225420Fax: 4224837P.O. Box: 3729, Kathmandu

Jorpati BranchJorpati, KathmanduPhone: 4470498, 4460569Fax: 4498343P.O.Box: 3792, Kathmandu

Lalitpur BranchKupondole, LalitpurPhone: 5542891,5520431, 5532189Fax: 5542890P.O. Box: 3729, Kathmandu

Maharajgunj BranchMaharjgunj, KathmanduPhone: 4720870Fax: 4720844P.O. Box: 3729, Kathmandu

Birtamod BranchHicola road, Anarmani - 3Birtamod, JhapaPhone : (023) 543727Fax : (023) 543400

Baglung BranchBaglung Municipality - 3, MahendrapathBaglungPhone : (068) 522193/94Fax : (068) 522195

Butwal BranchMain Road, ButwalPhone: (071) 541059, 542274Fax: (071) 541210P.O. Box: 18, Butwal

Bhalwadi BranchBhalwadi, RupandehiPhone: (071) 560357, 561357Fax: (071) 560957P.O. Box: 18, Butwal

Bhairahawa BranchNarayanpath, BhairahawaPhone: (071) 524041Fax: (071) 524141P.O. Box: 18, Butwal

Ghorahi BranchGanesh Hall RoadTribhuvan Nagar Municipality - 11Ghorahi, DangPhone : (082) 561685/86Fax : (082) 561687

Tulsipur BranchShitalpur RoadTulsipur Municipality - Ward 6, DangPhone: (082) 522673/74Fax : (082) 522672

Nepalgunj BranchDhamboji, NepalgunjPhone: (081) 524221Fax: (081) 524222P.O. Box: 22, Nepalgunj

Dhagadhi BranchMain RoadWard No 4, DhagadhiPhone : (091) 526683/85Fax : (091) 526682

Mahendranagar Branch3 rd Lane, Mahendranagar, Ward 4,KanchanpurPhone : (099) 525450, (099) 525431Fax : (099) 525601P.O. Box-16, Kanchanpur

Exchange Counter, Tribhuvan Int’lAirport, KathmanduPhone: 4472278, 4488937P.O. Box: 3729, Kathmandu

ATMs

Damak BranchMain Highway Road, Ward No. 4Damak, JhapaPhone : (023) 585190/91Fax : (023) 585192

Biratnagar BranchGoswara Road, BiratnagarPhone: (021) 526213, 522752Fax: (021) 526214P.O. Box: 208, Biratnagar

Itahari BranchMain Road, ItahariPhone: (025) 580741,581400Fax: (025) 581054P.O. Box: 208, Biratnagar

Dharan BranchMahendrapath, DharanPhone: (025) 530130Fax: (025) 530131P.O. Box: 208, Biratnagar

Birgunj BranchAdrash Nagar, BirgunjPhone: (051) 521476, 521746Fax: (051) 523156P.O.Box: 73, Birgunj

Powerhouse Chowk BranchShreepur, BirgunjPhone: (051) 528680Fax: (051) 528680P.O. Box: 73, Birgunj

Hetauda BranchBank Road, Hetauda 4MakawanpurPhone: (057) 524667, 524689Fax : (057) 524690

Narayangadh BranchSahid Chock , Ward No. 4Narayangadh, ChitwanPhone : (056) 5230333, 532487Fax : (056) 523034

Pokhara BranchNew Road, PokharaPhone: (061) 520162,525715, 532951Fax: (061) 525203P.O. Box: 442, Pokhara

Lakeside BranchLakeside, PokharaPhone: (061) 532268, 532269Fax: (061) 525203P.O. Box: 442, Pokhara

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 (BakeryCafé) | Thamel (Ying Yang Restaturant) | Phora Durbar (Us Mission) | Us Embassy Bramha Cottage | Nabil Maharajgunj Branch| NewBaneshwor (Bakery Café) | Bhaktapur Durbar Squre | Nabil Damak Branch | Nabil Birtamod Branch | Nabil Dharan Branch | Nabil ItahariBranch | Nabil Biratnagar Branch| Chiple Dhunga, Pokhara | Nabil Butwal Branch| Nabil Bhairawaha Branch | Nabil NarayanghatBranch| Nabil Hetauda Branch| Nabil Baglung Branch | Nabil Ghorahi Branch| Nabil Tulsipur Branch | Nabil Dhangadi Branch | NabilMahendranagar Branch


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ANNUAL REPORT 2006/07

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