ABRIDGED RIGHTS OFFER DOCUMENT (2011)

In order to increase the capital of the bank and raise the level of capital adequacy level of the bank to acceptable
standards as per RMA guidelines the Board of Directors in it’s 83rd meeting held on November 10, 2011 approved the
issuance of rights shares. The shareholders of Bhutan National Bank Limited in it’s 2nd Extra Ordinary general
meeting held on December 3, 2011 resolved that:
BNB shall issue one rights share for every one share held (1 : 1) amounting to 3,555,175 equity shares.
BNB has applied to the Royal Securities Exchange of Bhutan Limited (RSEBL) for the approval of the additional listing
of the above securities.

i)        The details of the offers are as stated below:

                                                     RIGHTS OFFER
          (3,555,175 Equity shares at Nu. 450.00 per equity share) as 1 rights share for every share held.

          12/12/2011                                         27/12/2011
          Offering Particulars:
          1.1     Price of Securities                -     Nu. 450.00 per equity share
          1.2     Number of Securities offered       -     3,555,175 equity shares
          1.3     Proceeds receivable by Issuer      -     Nu.1,598.228 million (deducting commission for rights offer)
          1.4     Name of Brokerage Firm             - BNB Securities Ltd.
                  Contact Telephone Nos.             - 328577-88

Terms of the present issue

         Shareholder’s shall be issued one rights share each for every one share held.
         The shares will be traded from the existing system of RSEBL
         Individual Trade Confirmation will be distributed to all the shareholders after the transaction of Rights offer.
         In the event that the shares are not fully subscribed, the bank has the right to dispose the shares in such a
          manner as they think it most beneficial and upon approval by the Authority.
         As per the Companies Act of the Kingdom of Bhutan, 2000, persons below the age of 18 years are not
          eligible to subscribe the issue of securities.
         The shareholders shall have the right to renounce the shares offered partially or in full in favour of any person
          other than the promoters and substantial shareholders.

Terms of Payment:

         The BNBL shall open a temporary “BNBL Consolidated Client Account” in the respective branches and then
          transfer the entire deposits into the above account maintained at Thimphu before the allotment date.
         Applicants are required to open Savings accounts at the branch offices of the BNBL that is if they do not have
          an existing saving account with the Bank. Provisions for Savings account numbers have been made on the

                            BHUTAN NATIONAL BANK LTD.                                                                        1
                 ABRIDGED RIGHTS OFFER DOCUMENT (2011)
          top right corner of the application form. The subscribed amount shall be debited from the respective Savings
          account by the BNBL and in the case of extension counter’s, applicants shall submit their applications and
          deposit the subscribed amounts in the respective extension counters.
         If the subscribers/applicants do not desire to maintain the saving accounts after the offer, they have the option
          of closing down the saving accounts at no additional costs.

Availability of forms and offer document and submission

         Application forms and offer document are available at the following:

          -BNBL Branch Offices, Thimphu, Phuentsholing, Paro, Mongar, Gelephu ,Trashigang, Bumthang,
          Samdrupjongkhar ,Gomtu and Wangdue
          -All extension counters of BNBL, Gyalpoishing, Khuruthang, Olakhat Thimphu
          - the web site of the bank at
         Filled in application forms may be submitted at the following addresses:

          -BNBL Branch Offices, Thimphu, Phuentsholing, Paro, Mongar, Gelephu ,Trashigang, Bumthang,
          Samdrupjongkhar ,Gomtu and Wangdue
          -All extension counters of BNBL, , Gyalpoishing, Khuruthang, Olakha, Thimphu

ii)       The BNBL shall pay a Brokerage commission of 0 .10 percent on the traded value to the Brokerage Firm,
          BNBL Securities Ltd. Thimphu.


      Particulars                         2006           2007             2008            2009             2010
      Earnings Per Share (EPS)(Nu.)       161.13         209.69           87.29           74.90            70.55
      Book Value per Share (Nu.)          683.29         852.98           354.67          408.41           450.92
      Dividend Yield (%)                  15.38          4.97             7.13            7.13             6.06
      P.E Ratio(Times)                    4.03           3.84             4.58            5.34             6.66
      Debt-Equity Ratio(Times)            73.46          72.39            41.07           49.13            45.19
      Return on Capital ( Times)          0.23           0.24             0.24            0.18             0.18
      Dividend per share                  100.00         40.00            28.50           28.50            28.50
      Average market price in 2011 is

                            BHUTAN NATIONAL BANK LTD.                                                                    2

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