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Annual Report and Accounts 2006-2007
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20 years
with you in Nepal
Leading the Way in Asia,
Africa and the Middle East
Standard Chartered Bank Nepal Limited, a subsidiary of
Standard Chartered Group is Nepal's largest international
Bank and has completed 20 years of its operation in January
2007. It operates from 15 locations in the country and
employs over 350 local staff. The Bank offers a full range
of banking products and services in Wholesale and
Consumer Banking, catering to a wide range of customers
encompassing individuals, mid-market local corporates,
multinationals, large public sector companies, government
corporations, airlines, hotels as well as the DO segment
comprising of embassies, aid agencies, NGOs and INGOs.
Having a history of over 150 years in banking, Standard
Chartered operates in many of the world's fastest growing
markets with an extensive global network of over 1400
branches (including subsidiaries, associates and joint
ventures) in over 50 countries in the Asia Pacific Region,
South Asia, the Middle East, Africa, the United Kingdom
and the Americas. As one of the world's most international
banks, Standard Chartered employs almost 60,000 people,
representing over 100 nationalities, worldwide. This diversity
lies at the heart of the Bank's values and supports the
Bank's growth as the world increasingly becomes one
market.
Trusted across its network for its standard of governance
and corporate responsibility, Standard Chartered takes a
long term view of the consequences of its actions to ensure
that the Bank builds a sustainable business through social
inclusion, environmental protection and good governance.
Standard Chartered is also committed to all its stakeholders
by living its values in its approach towards managing its
people, exceeding expectations of its customers, making
a difference in communities and working with regulators.
Front Cover: Leading the
way through
'Shaking of Hands' signifies strong performance
Bonding and Partnership that the
Bank has built with its Stakeholders The Bank's strategic intent
over past 20 years by continuing to combines operational rigour,
uphold its Brand Promise of being employee engagement and
'The Right Partner'.
The Partner principles of corporate
governance to drive financial
performance.
- Newly inaugurated branch
New Road, Pokhara
Leading the
way through
responsible business
We are accountable to the
Standard Chartered Bank communities in which we
Nepal Limited operate, to ensure good
governance, and assist with
P.O.Box 3990 environmental and social
Kathmandu, Nepal challenges.
Tel : 977-1-4782333, 4783753
Fax : 977-1-4780762 - Patients waiting in a queue for
SWIFT : SCBLNPKA eye screening test
Financial Highlights
Profit after Tax Total Shareholders' Equity
NPR Million NPR Million
700 659
692
2500
600 2116
538
507
536
2000
500 1754
1582
1496
400 1500 1369
300
1000
200
500
100
0 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007
0 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007
Earning Per Share Return on Total Assets (%)
180 175.84 3.0
167.37
160 149.30
2.56
143.55 143.14 2.5 2.42 2.46 2.42
140 2.27
120 2.0
100
1.5
80
60 1.0
40
0.5
20
0 0.0
2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007
Income by Type Application of Income
Exchange Other c/fd (8%)
Fluctuation Operating
Income (19%) Income (2%) Dividend & Proposed
issued of Bonus Share (29%)
Other
Income (2%)
General Reserve &
Exchange Reserve (6%)
Net Interest
Income (63%)
Income Tax (20%)
Commission
and Discount (14%) Costs (35%)
Provisions (2%)
Strategic Intent The worlds best international bank
Leading the way in Asia, Africa and the Middle East
Brand promise The Right Partner - Leading by Example
Values Responsive Trustworthy Creative International Courageous
Approach Participation Competitive Positioning Management Discipline
Focusing on attractive, growing Combining global capability, deep Continuously improving the way
markets where we can leverage local knowledge and creativity to we work; balancing the pursuit
our customer relationships outperform our competitors of growth with firm control and
and expertise risks
Commitment to Customers Our People Communities Investors Regulators
stakeholders Passionate about Helping our people Trusted and caring, A distinctive Exemplary
our customers to grow, enabling dedicated to making investment delivering governance and
success, delighting individuals to make a a difference outstanding ethics wherever
them with the quality difference and teams performance and we are
of our service to win superior returns
Annual Report and Accounts 2006 - 2007 Standard Chartered 1
Board of Directors
JASPAL SINGH BINDRA (CHAIRMAN)
Standard Chartered Bank
NEERAJ SWAROOP ( DIRECTOR) SUJIT MUNDUL (DIRECTOR)
Standard Chartered Bank Standard Chartered Bank
Chief Executive Officer
Standard Chartered Bank Nepal Limited
SHANTANU MITRA (DIRECTOR) NIRAJAN K. TIBREWALA ( DIRECTOR) RAM BAHADUR ARYAL (DIRECTOR)
Standard Chartered Bank Nepalese Public Shareholders Independent Director
Company Secretary Auditor
KRISHNA K BHATTARAI CSC & Co.
Chartered Accountants
2 Standard Chartered Annual 2007 and Accounts 2004 - 2
Annual Report and Accounts 2006 -Report Standard Chartered 2005
Chairman's Statement
I am very pleased to Report that Standard Chartered Bank Nepal Limited built on its record
of Consistent Performance once again and achieved Strong Financial Results for shareholders
while investing for the future. We have delivered on our Promises to all stakeholders.
Your Bank completed twenty years of successful operation in Nepal in January this year. I am sure you will appreciate the
steady progress that the Bank has made over these long twenty years. In particular, the immediate past decade brought
into surface many challenges as well as opportunities for us and we managed to successfully steer through this important
period of changes.
Despite a challenging situation faced by the country mainly on account of political instability, slowdown in economic growth
and vulnerable security situation, your Bank in the FY 2006/07 continued to invest cautiously in expansion of its footprints,
introduction of new and innovative products, investment in strengthening and upgrading infrastructure platform and in
upgrading the skills of our people. These have had a positive bearing in the Banks performance as reflected in our FYE
2006/07 results which yielded high returns to our shareholders.
Our deep local knowledge and relationships supported by management depth to execute our strategy are driving our ambition
to post strong financial results year on year.
I am pleased to advise that the Bank is well placed to gain from the numerous changes that are underway both in the national
and international arena. We will continue our focus on creating shareholders value through our existing businesses and
emerging opportunities. Standard Chartered is a strong brand and we want everyone in this market to understand our brand
promise to be The Right Partner-Leading by Example.
Results A Synopsis
Financial Highlights
Net Profit after tax rose by 5% to Rs. 691.66 million compared to Rs. 658.75 million in the previous year
Earnings per share is lower by Rs. 8.47 due to increase in the number of shares last year
Risk Assets increased by 17% to Rs.10.79 billion
Deposits increased by 7% to Rs. 24.64 billion
Annual Report and Accounts 2006 - 2007 Standard Chartered 3
A Consistent Performance been 2.5% as against 2.8% achieved growing trend of regional economic
in the preceding year. Agriculture and integration in South Asia.
The Bank has been continuously non-agriculture GDP have grown by
delivering on its promises year on year. 0.7% and 3.6% as against a growth of The government has also unveiled the
As a result of another exceptional year, 1.1% and 4.6% respectively achieved three year interim development plan
the Bank continues to be one of the by these sectors in FY 2005/06. Weak with major focus on reconstruction,
highest contributors to the Government performance of the Agriculture sector infrastructure & hydropower with a
Exchequer by contributing has largely offset the marginal growth target of about 5%. However,
Rs. 324 million as compared to improvement in the overall Industry achievement of such a growth rate after
Rs. 280 million last year on account of results. The modest growth in the a low average growth rate of around
Corporate tax. economy is mainly attributable to the 2% in the past 5 years would largely
adverse weather conditions, be dependent on timely and successful
In accordance with the statutory disturbances in the Terai Region, labor Constituent Assembly election slated
requirements, the Board recommends management issues and inadequate to take place in the near future, an
a transfer of Rs.17,995,632 to power supply. effective governance process, and
Exchange Fluctuation Reserve from political stability after the formation of
current year's profits and the statutory Total government expenditure (cash an elected government.
transfer of Rs.77,228,800 into General basis) for FY 2006/07 is Rs.125.43
Reserve Fund. In congruence with the billion. This consists of recurrent and Outlook for 2007/08
revised capital requirements as capital expenditure of Rs.74.12 billion
stipulated by the Central Bank, the and Rs. 32.43 billion respectively in Agriculture sector is likely to grow by 3
Board has proposed to increase the addition to debt servicing of to 3.5%. However, it will be largely
capital by issuing 50% Bonus shares Rs.18.88 billion. Such expenditure in dependant on the weather conditions.
for which Rs.131,699,320 has been the previous FY totaled to Rs.110.8 Better rural security situation is expected
allocated from current year profit and billion with recurrent and capital to increase cultivation area, improve
the balance from Capital Adjustment expenditures of Rs. 67.1 billion and distribution of inputs and services, and
Fund created in the past for the Rs. 29.6 billion respectively in addition raise farm productivity. Likewise, the
purpose. to debt servicing of Rs.14.2 billion. Industrial sector is expected to grow
Government revenue for FY 2006/07 by more than 6% in the coming FY. The
Our Tier 1 and Tier 2 Capital Adequacy have increased by a significant margin government's focus on increased
Ratios were 13.77% and 1.94% of 20.9% to Rs. 87.35 billion vis-à-vis construction expenditures and better
respectively with an overall ratio of previous FY. operating condition in manufacturing
15.71%. Our capital position is more sector coupled with continued strong
than adequate and exceeds the current Average Consumer Price Index have remittance-based consumer spending
Nepal Rastra Bank's capital adequacy recorded a growth of 6.4% in FY are expected to provide the requisite
requirement of 11.00% and also 2006/07 against an increase of 8% stimulus.
exceeds the international norms. during the preceding year.
Service sector growth is also expected
A Challenging Environment Whilst total imports of the country rose to remain above 4% due to likely
by 10.3% in FY 2006/07, the overall expansion in consumption along with
The Global Economy appears to be exports remained flat in comparison to increased tourist arrivals in the country.
well set for continued growth in 2007 the corresponding period of the previous Investment in infrastructure projects by
despite the slowdown seen in United year. Nevertheless, the overall Balance private sector is expected to grow;
States. With moderation in inflation and of Payments of the country recorded a likewise capital injection is also expected
a well sustained growth trend across surplus of USD 91 million, of which to enhance rural infrastructure,
the globe, the risks to global expansion current account surplus is estimated to rehabilitation and reconstruction
appear to be diminishing. Under the be USD 54 million. activities. However, labor and industrial
circumstances, market optimism is likely security issues would be key factors to
to continue for the year and possibly Country's total gross foreign exchange build investors confidence. Giving
extend beyond it. reserves amounted to USD 2.55 billion credence to these factors, an overall
(NPR 165 billion) as of mid July 2007. 5% growth in the economy is
FY 2006/07 remained challenging as This is sufficient to cover import of considered achievable in the coming FY.
well as eventful in terms of political goods for 10.3 months.
developments. The sign-off of the Corporate Governance
historical peace accord between the In line with the sharp appreciation of
Seven Political Parties and the Maoists the Indian Rupees against the US Governance across the Bank is robust.
formally ending 11 years of armed dollar, the Nepalese Rupee also gained Banking is relationship business and
insurgency, formation of an all party significantly against USD and we highly value the relationships which
interim government and declaration of appreciated by more than 13% during we have with our own people,
holding of Constituent Assembly the FY 2006/07. Nepalese Rupee has regulators, clients and the other
election were the key events creating a fixed parity of 1:1.6 with the Indian stakeholders and we want to be known
positive business sentiment in the Rupee. as The Right Partner for them.
country. Nevertheless, economic growth
in Nepal continued to remain sluggish The recent political developments as We are committed to ensuring the
owing to sporadic violence in the Terai discussed above have revived the integrity of governance. In addition to
region, labor issues in the business hopes of economic resuscitation in the the established committees, we have
sector, slow pace of improvement in country and created cautious optimism committees on diversity and inclusion,
law and order situation in the transition in the business sector. Nepal is health and safety, the environment,
phase and adverse weather conditions. expected to take advantage of the outserve plus and community
booming economies of the neighboring partnership.
The GDP growth in FY 2006/07 has countries - India & China and of the
Annual Report and Accounts 2006 - 2007 Standard Chartered 4
The initiatives taken by these background and a culture that another good performance. We are
committees have added value to our combines performance and a strong certain that we can build on our track
stakeholders and delighted them. We set of shared values. To fulfill our record as we focus on our markets,
believe good governance provides ambition of building leadership which our products, our services and our
clear accountabilities, ensures strong is a key priority, we have plans to people.
controls, instills the right behaviors and accelerate the development of talented
reinforces good performance. people across the Bank. Our country is endowed with great
natural resources which offer huge
In June we welcomed Mr. Neeraj We appreciate the initiatives taken by potential for growth. Since the
Swaroop, CEO of SCB India who has the Ministry of Finance and the Central foundation of peace process has
been nominated by the SCB UK in the Bank in driving financial reforms in the already been laid, we are confident
Board of SCB Nepal replacing country and welcome such moves that this will pave the way in resolving
Mr. Sanjeev Agrawal. We extend our which we are certain will help in the political instability as well as in
sincere thanks to Mr. Sanjeev Agrawal strengthening the overall financial improving the security situation to attain
for his valuable contribution made to system in Nepal. Continuous guidance higher level of economic progress.
the Bank during his tenure as a Director and support received from our Under the circumstances, we are
on the Board. With the appointment regulators coupled with the high level optimistic about the future.
of Mr. Neeraj Swaroop, our Board has of governance of the Standard
been further strengthened who brings Chartered Group have encouraged us I would like to thank our customers
with him rich experience and insight in consistently delivering good results and shareholders for their invaluable
in the banking sector of over 16 years. by adopting quality products and & continuous support and our people
We are delighted to have him on our services. for their professionalism, enthusiasm
Board. and commitment. We look forward to
In particular, we would like to thank another good year.
Mr. Sujit Mundul, CEO Nepal whose our valuable customers and
tenure as director in the Standard shareholders for bestowing us with
Chartered Bank Nepal Limited expired relentless trust, encouragement and
on 8 April 2007 has been reappointed confidence. Your continued support
on 9 April 2007 in the board to and blessings are important to us,
represent Standard Chartered which will enable us to remain at such
Grindlays Limited, Australia. great heights and also help maintaining
our status of the Best Bank in the
Mr. Shantanu Mitra and me Jaspal country-Leading the Way.
Bindra, continue to represent the
Standard Chartered Group on the On behalf of SCB Nepal's Board of Jaspal Singh Bindra
Board of Standard Chartered Bank Directors, I would like to thank all the Chairman
Nepal Limited. Mr. Niranjan K.Tibrewala stakeholders for being our Right
continues to represent the public Partner. Together, we have successfully
shareholders in the capacity of a completed our journey of two decades.
Director since his election at the 17th We look forward to giving continuity
Annual General Meeting of the Bank to this journey for many more decades
and will be retiring from 7th January to come.
2008. The shareholders will elect a
Director to represent them in the Board The Bank is determined to be a good
in this AGM. corporate citizen and a leading bank
in the area of sustainability. After all,
In Conclusion 'sustainability management', or taking
a balanced view of economic,
The global economic upswing ecological and social interest, enables
continued not only in 2006, it gained us to tap new business fields and
further momentum. The key drivers of better manage our risks, not to mention
global growth remained to be the increase the long-term value for our
emerging markets especially those in stakeholders.
Asia. During this phase, although Nepal
witnessed a relatively stable situation, The Bank has consistently been
it was not able to achieve the desired delivering strong performance which
economic growth. Nevertheless, your clearly establishes the fact that we are
Bank was able to come up with good making a steady progress in our goal
results primarily because of the focus of becoming the most profitably
and dedication of the management growing commercial bank in the
team in creating shareholders value. country. The result for FY 2006/07
reiterates our commitment of holding
The unique blend of strong local and firm to our course.
international leadership enabled the
Bank to gain a distinct advantage in While there are many potential risks
leveraging market opportunities, and uncertainties both in the national
consistently meeting the international and the international arena, our
standards and in creating value by businesses are performing strongly
respecting and adhering to local and we are clear about our strategy
practices. We have a pool of highly and priorities. In the coming year, our
talented people with diverse major focus will be to deliver yet
Annual Report and Accounts 2006 - 2007 Standard Chartered 5
Directors' Report
The Directors present their report together with the Balance Sheet and statement of Profit and Loss for the
year ended 16 July 2007. The report is in conformity with the provisions of the Companies Act 2063 and the
provisions of the Bank & Financial Institution Act 2063 including the directives issued by the Nepal Rastra Bank.
Standard Chartered Bank Nepal is in good shape and we as a result of which the ratio of Non-performing credit to total
continue to deliver strong financial results. Through the credit has reduced from 2.13% to 1.83%, which is amongst
disciplined execution of our strategy and the hard work of our the best in the industry. The provisions made are adequate
team, we have delivered another set of strong results. An to cover all the potential credit losses of the Bank as of the
increase in the net profit after tax of 5% over last year to balance sheet date.
Rs. 691.7 million is commendable in the current business
environment. This has been achieved by relentless focus on After transfer to general reserve Rs. 77.22 million, exchange
cost and risk management while pursuing limited business fluctuation reserve Rs.17.99 million, proposed dividend
growth. Rs. 330.60 million and bonus share Rs.131.69 million, total
retained earnings as at 16 July 2007 stood at Rs. 504.72
There is an increase of 17% in the volume of risk assets million.
compared to last year (i.e from Rs. 9.20 billion to Rs.10.79
billion). With significant increase in the Risk Assets volume the This performance reflects very good momentum in the
loan loss provision has also increased by Rs.16.65 million to underlying business and disciplined management of risks and
Rs. 287.51 million in accordance with the NRB guidelines. costs.
The Bank has been able to manage the credit portfolio better
Financial Results - Highlights
In Rs. '000s In Rs. '000s
16-Jul-07 15-Jul-06 % Change
Operating Profit 1,092,967 981,200 11.39%
Transfer to General Loan Loss Provision 36,808 47,730 (22.88%)
Provision for Tax 324,427 280,618 15.61%
Net Profit After Provision and Tax 691,668 658,756 5.00%
Issue of Bonus Shares 206,627 37,464 451.53%
Proposed Cash Dividend 330,604 487,033 (32.12%)
Representation Our Global presence and capabilities provide us with a clear
competitive advantage in originating and delivering complex
As at 16 July 2007, the Bank maintained Fifteen points of transactions. The Bank has maintained its edge in providing
representation which included eleven Branches and four innovative solutions-which have been greatly appreciated by
extension counters. In addition to this, services were also our clients. The focus was also on deepening existing client
extended to our customers through Fifteen ATMs located at relationships by widening the product suite and increasing
different parts. In line with our strategy to expand our footprints wallet share.
and in response to our customer needs, two new branches,
one in Nepalganj (earlier a Counter) and New Road, Pokhara We took the lead in Launching 'Physical Sale of Gold',
were opened. The Bank also added three new ATMs-at the introducing new Investment Products and in Restructuring
United World Trade Centre complex (Tripureshwore), Durbar existing Non Performing Assets (NPAs). The Banks ability to
Square (Patan, Mangalbazaar) and Boudha (Kathmandu). do innovative structures & have the trust of various players
During the year, a new Banking Counter was opened in in the Nepalese Financial sector was best demonstrated by
Pokhara at Manipal Hospital premises whereas Pension the successful closure of 'Taragaon Resuscitation'. It was a
Paying Office (PPO) in Itahari was relocated to our Dharan Herculean task to bring Seventeen banks to agree. For the
Branch. first time in Nepal, lenders had the option to convert debt
into equity as part of the resuscitation. This was a landmark
deal which concluded successfully because we could bring
Wholesale Banking together the Bank's global expertise and it's local knowledge.
The year was a challenging one for our Wholesale Banking Likewise with the new NRB regulation allowing Banks amongst
Customers on account of continued political uncertainty & others to import Gold-the Bank imported the first consignment
security concerns. Businesses faced periodic disruptions in of Gold in April. In a short timeframe we were able to establish
a sluggish economy resulting in postponement of their plans the Bank as one of the leaders in the business. Since then,
to invest for growth and expansion. new features have been added and we are constantly
innovating to stay ahead of the market.
Annual Report and Accounts 2006 - 2007 Standard Chartered 6
TRAIn, an investment product, was introduced and a number of Despite a challenging business environment we have grown
our Clients participated in it expressing their appreciation. The revenues from this segment and have been able to write back
Bank was particularly lauded for having introduced a product in provisions on NPAs. Our main focus was to maintain the credit
a market which carried limited opportunity. The Bank also worked quality while supporting existing businesses and at the same time
closely with the regulators as a result of which NRB came out grabbing the 'one-off opportunities'. The strategy has been
with guidelines on Derivative Products which enabled us to offer successful in growing businesses and risk asset portfolio without
innovative hedging structures to our clients. compromising the quality.
Consumer Banking
Consumer Banking priorities continue to be product innovation, service
excellence and investment for the future.
In the FY 2006/07, along with an array of challenges posed by the Terai unrest,
we have had some achievements in this segment. Our challenge is to invest at
the right pace and at the same time, increase productivity and innovation. You rest assured
we support you
Innovative products set us apart from the competition and delight our customers.
In addition to regular improvisation of existing products, the Bank also introduced
- Secure Living, a new life insurance product in partnership with American Life
Insurance Company (Alico). Through this product, the Bank has entered into the
foray of Bancassurance which has enabled us to provide a whole gamut of
financial services to our customers under one roof.
In order to inculcate a savings habit amongst the younger generation and to make it easy for them to open accounts,
we launched 'Access Plus' Savings Bank Account. This product is very popular amongst school and college going
children.
In order to meet the needs of our diverse customer base and
in line with our commitment to expand our footprint, we opened
two full service branches in New Road, Pokhara and Nepalgunj.
Similarly we opened a counter at the Manipal Hospital in Pokhara
to meet the banking needs of staff, students, patients and their
families.
Pokhara, New Road Branch Nepalgunj Branch
The Bank also added three new ATMs-at the United World Trade
Centre complex (Tripureshwore), Durbar Square (Patan,Mangalbazaar)
and Boudha (Kathmandu).
To constantly gauge the level of our service, the Voice of Customer
survey is an integral tool. We embarked on the Mystery Shopping
Concept to measure how our customers see us.This is an
important tool to continuously improve on the way we work and
deliver.
Our brand promise is to be The Right Partner, Leading by Example.
UWTC, Tripureshwore ATM Boudha ATM
Annual Report and Accounts 2006 - 2007 Standard Chartered 7
Outserve Plus
Outserve Plus 2007
CIP Update
All Ideas Matter
Outserve Plus was launched with the aim of building on the positive things
achieved during the first phase of the Outserve journey that the Bank embarked
The Bank is passionate about its customers success and is committed to provide differentiated
quality service to them. The 'Outserve' journey initiated in late 2004 has made this possible. In line
upon in late 2004. Since its initiation in Nepal, much has been achieved under
Outserve Plus. Various processes have been reengineered and automated and
Mystery Shopping (MS) Report proper tracking systems have been put in place as part of the Banks commitment
to continuously improve the way we work to become operationally excellent.
WB Service Review Action Plan
In June 2007, Nepal formulated its Continuous Improvement Plan (CIP) on
Outserve Plus Quiz the basis of priority and submitted 11 Continuous Improvement initiatives
with our commitment to embed a culture of continuous improvement, the Bank embarked upon the
to the Group. The next phase is to ensure for successful and timely
Success Stories implementation of the initiatives.
Outserve Plus Champions recently completed Outserve Plus awareness
sessions covering the entire staff of the Bank. The awareness sessions were
aimed at reiterating continuous improvement in order to meet the Banks
'Outserve Plus' journey in the year 2007 with an aim to build on the achievements of 'Outserve'.
2011 aspirations.
Of the 11 initiatives included in the Nepal CIP, the following 3 have already been
implemented
Previously, the core banking system (eBBS) contained only one year archival data.
Due to this, the Bank was incapable of providing transaction information to
customers prior to one year. This resulted in frequent customer complaints. Country
IT took up the initiative to address the issue by proposing to use the existing data
warehouse to develop a transaction enquiry system with the aim to provide
The aim of 'Outserve Plus' is to introduce a culture across the Bank so that people will naturally find
ways to improve the way they work and achieve Operational Excellence.
customers with the transaction history of the past five years. Further, the user
definable query system was developed to generate various MIS reports based on
the archival data. The initiative was formally launched in the Bank in August 2007.
Since its implementation it has considerably helped reduce the time taken to access
the customers MIS data with a significant decline in the number of customer
complaints.
The Banks Shareholders were previously being provided with services of share
transfers, issuance of new share certificates both for replacement against
lost/deceased and share/pledge releases without any guaranteed turnaround time.
The Banks Legal and Compliance (L&C) team critically reviewed the entire processing
time and gained confidence to define a minimum but guaranteed time to shareholders.
For share transfer, the overall turn around time guaranteed is five days from the
date of the receipt of the request whereas for share pledge/split request, same day
turn around time has been committed. The initiative will provide the Bank a clear,
competitive edge over the competition leading to shareholder/customer delight.
The initiative was formally launched on 10 September, 2007 and is expected to
give the Bank the needed mileage in terms of gaining shareholders trust.
By becoming Operationally Excellent, the Bank will
Delight the customers with the quality of service
Make life easier for staff and customers
Enable the Bank to grow on a sustained basis
Moving towards UCP 600 with SCB - Customer
Awareness Session held by the Bank
Since its initiation, several initiatives have been introduced under Outserve Plus with positive impact in our
service delivery thereby delighting customers. These initiatives were primarily introduced to reduce the Turn
Around Time (TAT) and minimize waste in all our processes in order to generate faster delivery, better quality
and greater efficiency. Our recent successes include "One Day Account Opening" services, Auto Loan and
Personal Loan Process Re-engineering, Letter of Credit (LC) Service Guarantee and introduction of a centralized
and dedicated Service Desk and Complaint Tracking System (CTS).
Future Plans
After a decade long internal conflict, Nepal is poised an elected government in place. This delay is expected
to enter into a new era of political transformation. The to have a depressing effect on the overall business
country is in the process of achieving a peaceful and investment sentiments and will slowdown the
resolution of the political differences through the process of economic development.
Constituent Assembly election. The prospects of peace
have huge implications for the countrys economic The Bank therefore views the immediate future with
growth which will facilitate investment in infrastructure cautious optimism. We will continue to focus on our
such as roads, bridges, telecommunications and power. prime objective of providing safety to our loyal depositor
base in these uncertain times by maintaining strong
The growing inward remittance flow into the country capital adequacy and liquidity position inherent in your
is chiefly instrumental in expanding the consumer Banks balance sheet which will ensure that we have
market which is expected to contribute in the countrys the capacity and flexibility to address potential strains
economic growth. Emphasis will be laid in introducing that the economy may experience during this transition
new products and services to capture this opportunity. period.
Rapidly growing economies of India and China will
offer significant opportunities for Nepal as a trade Against this backdrop, our main objective would be
corridor and tourism destination. Appropriate policies to protect our revenue lines by providing solutions to
to capitalize on these opportunities are expected to our customers through value added and structured
bring about remarkable changes in the lives of common products at competitive pricing. In line with our brand
people through their economic wellbeing. promise to be The Right Partner, we will continue to
invest in our people, processes and systems so as to
However, the path towards political settlement is improve our quality of service for customer delight. For
strewned with difficulties and is also a time consuming our communities we will endeavor to make a real
process. The recent development of postponement difference. We will consciously drive and maintain our
of the Constituent Assembly election date is indicative high level of governance. For our shareholders we shall
of the fact that it will take a few more months to get strive to continue providing them with superior returns.
Auditor
CSC & Co; Chartered Accountants, were appointed reappointment. As per the recommendation of the
by the 20th Annual General Meeting of the Bank held Audit Committee, this meeting will decide on the
on 3rd December 2006. They are eligible for appointment of the auditor for next year.
Proposed Dividend
The 227th meeting of the Board of Directors of the of 80% in cash and issue of bonus share of one for
Bank has proposed dividend to the shareholders of each two shares held.
the Bank for the year ended 16 July 2007 at the rate
Annual Report and Accounts 2006 - 2007 Standard Chartered 8
In the past, we understood Corporate
Our Approach to Responsibility as doing business in an ethical way
as a business imperative. The language and
Corporate substance of corporate responsibility are changing,
reflecting the need for organizations to take a
Responsibility long-term view of the consequences of their
actions to build a sustainable business.
For us, delivering a sustainable business and activities damaging the driven by our brand promise of being
means attracting high quality staff, environment. By offering services to 'The Right Partner-Leading by Example'.
offering the right products and services, groups who are financially excluded we
contributing to a sustainable can support sustainable economic Treatment of Employees
environment and ensuring that we have growth. Majority of the rural population
the trust of our customers, in Nepal are not yet in the realm of We are working to create an inclusive
shareholders, employees and other financial products. We think more micro workplace in which employees can
stakeholders. We seek to support finance set-ups will help mitigate the develop as an individual and teams.
sustainable economic development lack of credit delivery system in these Ensuring the wellbeing and security of
through social inclusion, environmental areas. employees and enhancing the
protection and good governance. understanding on HIV/AIDS are
The Bank has long been associated examples of our building a healthy,
Sustainable Lending with this business. SCB Nepal is the informed work force.
promoter of few rural development
Our business activities can have both banks. We have recently increased our Supporting the economic development
positive and negative impact on stake in Rural Microfinance of any country is a top priority for the
communities, economies and the Development Centre (RMDC) which is Bank which ties in with its belief towards
environment. We want to be a catalyst a wholesale lending entity to corporate responsibility. We consider
to promote change in our markets. microfinance enterprises. We have lent ourselves the catalysts to help the
Identification and Management of to few rural development banks and economies grow through the services
'sustainability' considerations in lending NGOs to facilitate onward lending to we offer, the jobs we create and the
are important parts of our risk the rural population for the development taxes we pay. We also contribute by
evaluation. of microfinance in Nepal. sharing good practices, knowledge and
expertise we have with us.
Although Standard Chartered had a Responsible Selling and
policy on Environmental risk in lending Marketing In line with sharing our best practices
since 1995, Social and Ethical factors and being at the forefront of developing
were included in the policy after 2003. "Treating Customers Fairly" is already banking standards in the local market
Under the policy, each credit application, a priority for us. We want to set the and our intent of partnering the
regardless of its size is required to standard for openness and regulators in the reform process/policy
identify, evaluate and if necessary, transparency with our customers. changes, the Bank conducted
mitigate the Social and Environmental workshops/seminars on the following
risks. Competition can instigate selling and subjects:
marketing efforts to become too
Tackling Financial Crime aggressive eroding the trust between
the company and the customers. We
Money laundering is the process aim to reflect our core values of being
through which the proceeds of crime Trustworthy, Responsive and
are disguised and concealed. Banks Courageous in our
provide a gateway into the formal marketing and selling
financial sector that, unless effectively efforts to protect our
controlled, can be misused by criminals. reputation and to build
a sustainable business.
We use a multi-layered approach to Customers trust us to
manage money laundering risk. This live our values and we
starts with 'Know Your customer' (KYC)/ work continuously
Customer Due Diligence (CDD) towards this endeavour.
procedure from the time a customer
opens an account, and also includes The policy on Responsible
modern systems to screen suspicious Selling and Marketing
transactions. came into effect in 2005
after a high-level working
Increasing Access to group reviewed the
products and processes and RMDC
Financial Services quity in
ent of e
approved policies on Enhancem
governance, assurance, data
Limited access to financial services can protection, complaints handling and
be the root cause of poverty, conflict mis-selling. Our work in this field is
Annual Report and Accounts 2006 - 2007 Standard Chartered 9
Sharing of Best Practices
A workshop on 'Merger & Acquisition' was held by
Independent Business News with the support of NRB and
Nepal. PR Somasundaram, Head Strategic Initiatives South
Asia & Country Head Subsidiaries, SCB India, was the key
resource person in the workshop.
A presentation was made by the Chief Executive Officer on 'Products in Financial Institutions' at a training
cum workshop organized by South Asia Institute of Management on 'The Winning Way the Art and science
of selling through partnering'.
At a seminar organized by National Insurance Company in
association with Independent Power Producer's Association
Nepal (IPAAN), the Chief Executive Officer made a
presentation on ' Risk Perceptions of Investors in
Hydropower.' The seminar aimed to familiarize the prospects,
risk perceptions of investors and risk aspects in Hydropower
Projects Development in Nepal.
The Bank was the Lead sponsor of the event-'Power Summit
2006'-an Indo-Nepal event focused on private sector initiative
in hydropower development in Nepal conducted by IPAAN
in Kathmandu. Head of Client Relationship, Standard
Chartered Bank Nepal made a presentation on the subject.
A presentation was made by the Bank in May 2007 to
'Partners in Change (PiC)' & 'South Asia Watch on Trade,
Economics & Environment (SAWTEE)' on Standard Chartered
Bank's CSR initiatives.
Community Investment
Community investment is particularly important to
Standard Chartered because of its significant presence
in developing countries. Bank's initiatives seek to
strengthen the relationships between our business,
local people, governments and customers while
providing opportunities to involve our employees and
develop their skills, all of which will help pave the way
towards more sustainable growth.
Nepal, the Bank has constituted Standard Chartered
We have a strong belief that the long-term growth Nepal Community Partnership Forum (SCNCPF) for
depends not just on financial performance but on providing impetus to initiatives launched by the erstwhile
working in partnership with stakeholders to build on 'Believing in Life Committee'. The Forum has been
our brand promise to Lead by Example and be The registered with District Administration Office and is
Right Partner in the communities in which we operate. also affiliated to Social Welfare Council. This entitles
Contributing to communities also helps forge links exemption in income tax to individuals/corporates
with customers, governments and regulators and contributing to the entity.
motivates employees. The Bank encourages its
employees to take part in community projects. Our most prominent programmes cover the global
issues of avoidable blindness under our initiative
In order to undertake various community initiatives in 'Seeing is Believing' and 'Living with HIV'.
Annual Report and Accounts 2006 - 2007 Standard Chartered 10
Led by our employees, the 'Seeing is Believing' (SiB) initiative has proved
highly successful in engaging staff and raising the profile of Standard
Chartered globally.
SCB Group has restored sight to 56,000 people (Phase I). Through
fundraising, awareness building and voluntary work with charities for the
visually impaired, the Group raised USD 6 million to contribute towards
one million sight restorations by World Sight Day 2007, one year ahead
of schedule (Phase II). The Group aims at raising USD 10 million to make
a difference to the lives of 10 million people across 20 countries, focusing
on prevention and education as well as sight restoration (Phase III).
On World Sight Day 2006 Standard Chartered Group announced its most
ambitious programme. The Bank will work with the International Agency
for the Prevention of Blindness and the World Health Organisation to fund
community and education projects to cure and prevent blindness for 10
million people across 20 countries.
As part of the 'Seeing is Believing' initiative and also with an aim to raise funds
in support of our 'Living with HIV' and `Other Community' activities, the
'Believing in Life Committee' of Standard Chartered Bank, Nepal conducted
a Walkathon on November 11, 2006. This event received very good response
and support from all our stakeholders i.e, staff, vendors, customers and the
community, who actively participated to make the event a great success.
Students of Technical & Skill Development Centre for Blind and Disabled
(TSDCBD) also joined the Walk.
ed-off
06 being kick
Walkathon 20
On the occasion of World Sight Day 2006, the Bank entered into an
agreement with Tilganga Eye Centre (TEC) to organize eye camps and
conduct cataract surgeries . In line with the agreement, eye camps were
conducted at Chhaimale, Keelagal, Panauti, Bandegaun, Thimi, Bajrabarahi
and Gaushala. During this phase, the needy patients were also directly
screened and provided treatment at Tilganga Eye Centre. A total of 4,900
out-patients received check-up & treatment and 500 cataract surgeries
were performed through our sponsorship during the period covering
October 2006 to July 2007. In addition, SCB, Nepal in partnership with
Shree Rana Ambika Shah Eye Hospital in Bhairahawa sponsored about
100 cataract eye surgeries and conducted screening for 835 eye patients.
ter having
w-Patients af e Camp
hter Tomorro i Ey
Anticipating a Brig ct surgeries at Thim
catara
undergone
Since the beginning of our efforts with SiB
project in Nepal, we have brought light to the
lives of about 2,600 people with the active
support of all our stakeholders and passionate
involvement of our people.
With an aim to support the visually impaired students of Technical & Skill
Development Centre For Blind & Disabled (TSDCBD), amidst a special function,
CEO Sujit Mundul handed over two sets of knitting machines to the school in
July 2007.
Annual Report and Accounts 2006 - 2007 Standard Chartered 11
Living with HIV continues to be a Academy, a school run by Maiti members rendered her services to
key global programme for Standard Nepal, a shelter home for orphan Karuna Bhawan and donated
Chartered. Our commitment and rescued trafficked girls by clothes, sweets and gifts collected
developed from a desire to protect upgrading its science laboratory with from the bank staff.
basic human rights, promote the new facilities through the funds
health of our employees, keep the raised from the Governance Charity A staff of the Bank, who is also a
business costs associated with Run of Standard Chartered. HIV Champion, attended the 8th
HIV/AIDS to a minimum and Congress on AIDS in Asia Pacific
respond to what we see as a global The Bank has also sponsored held in Colombo as a volunteer.
challenge. In 2006 we focused on education and living expenses of The Bank also supported the
making sure our activities were two LwHIV children at Maiti Nepal participation of a delegate from Maiti
consistently in line with our HIV/AIDS for three years. Nepal in the Congress.
Policy, strengthening our thought
leadership position on HIV/AIDS and With the belief and passion to make In line with the Bank's LwHIV
involving our employees in our a difference in the lives of needy and initiative and in an effort to share
ongoing projects. deserving students of Karuna HIV/AIDS Workplace program with
Bhawan, a shelter for children and the youth of Chitwan, two LwHIV
On World AIDS Day in December PLWHA, few staff of the Bank went Champions of the Bank conducted
2006, as a gesture of care and an extra mile to support five needy a workshop organized by Rotary
support for People Living with children for their education in June Youth Leadership Awards (RYLA ).
HIV/AIDS (PLWHA) and spreading this year. CEO handed over the
awareness on the subject of amount of support to Head Sister Similiarly, workshops on LWHIV have
HIV/AIDS a few initiatives were taken of Karuna Bhawan. Few staff been conducted for new joiners of
by our HIV Champions. The day was members of the Bank also the Bank by LwHIV Champions on
marked with all staff of the Bank celebrated this year's Teej with the a regular basis.
wearing Red Ribbon, and this women and children of Karuna
international symbol of AIDS Bhawan by distributing clothes and
awareness was displayed distinctly sweets.
at all the branches of the Bank.
Under the Employee Volunteering
The Bank supported Teresa (EV) program, one of our staff
LWHIV workshop in progress Celebrating World AIDs Day
Annual Report and Accounts 2006 - 2007 Standard Chartered 12
Our Focus on Youth, Health and Education
In line with the Bank's focus on education, the
Bank donated ten sets of Central Processing Units
(CPUs) to the needy students of Shree Amar
Secondary School, Baigundhura, Jhapa. The Bank
earlier donated 45 sets of computers to various
schools in the year 2006/07.
The Bank continued its support to the deserving students of Shree Mahendra Shanti High School in Bhaktapur
by providing incentives/scholarships through VISCOSS-Nepal for the fifth consecutive year.
Our Pokhara Branch staff visited the Pokhara Briddhashram, an Old Age Home on the occasion of Buddha
Jayanti. The staff members donated food stuff to the residents to run their shared kitchen.
Similarly, staff members of Bhairahawa branch visited an orphanage during the deepawali festival to bring joys
in the lives of these needy children and distributed essential food items and groceries raised through voluntary
contributions.
In an endeavour to help the needy and destitute who have been severely affected by the recent floods in the
various parts of the country, the Bank, its staff and their families stepped forward to support the cause by
providing essential relief materials which were handed over to CARE Nepal and Nepal Red Cross Society in
Nepalganj for onward distribution. The Bank also donated a sum of Rs. 50,000/- for the flood victims through
Nepal Banker's Association. The Bank had earlier donated Rs. 500,001/- to the Prime Minister Disaster Relief
Fund in the year 2006/07 to support the flood victims.
The Bank supported a blood donation camp
organized by Nepal Red Cross Society in Naya
Baneshwore by providing dietary requirements
for the blood donors. A few staff members of the
Bank also donated blood at the camp.
A tripartite agreement has been signed to
sponsor the Senior Nepal National Cricket Team
between Cricket Association of Nepal (CAN),
Surya Nepal Pvt Ltd (SNPL) and Standard
Chartered Bank Nepal Limited (SCBNL). SCBNL
will have the exclusive right to brand the Team
for all its overseas matches and will be the co-
sponsors for all it's local matches. The Bank is
proud to co-sponsor the Senior Nepal National
Cricket Team as this is in line with our brand
promise to be The Right Partner.
Annual Report and Accounts 2006 - 2007 Standard Chartered 3
13
Our People, Our Strength
We continued to make strides on our journey towards our strategic aspirations, both in scale and
competitive position. Our achievements are attributed to the highly talented and diverse team of
people, and a culture that combines performance edge with a cooperative style and a strong set
of shared values.
As at 16th July 2007, Standard Chartered Bank Nepal Limited had strength of 351 full time equivalent staff. The Bank
welcomed 26 new staff on different permanent roles in various departments and branches during the year under review.
The current ratio of male to female is 61:39.
People and Talent Building Winning Teams
We measure employee engagement annually. With 100%
Our challenge in the coming year is to raise the bar again. participation of our staff members in the survey last year
Against the backdrop of a rapidly changing scenario, our reflecting higher engagement level, an improved Q12 score
agenda is firmly placed on increasing our ability to attract, was attained.
develop and engage our talent. We are constantly looking at
Managers play an important role in increasing employee
ways in which we can attract and retain talented individuals. engagement. Great Managers Program has been launched
this year with the intention of helping managers raise the
We have a global systematic approach to talent management profile of people management as a key driver of performance;
for identifying and developing talent and build the skills we making clear what managers need to do and how they need
to do it. Increasing employees' engagement will help us deliver
need for the future. We want to continue to improve the way better performance across a range of business measures,
we work by sharing, learning from ideas adopting best including customer service.
practices for better management of teams driving engagement.
Harnessing the energy and enthusiasm of employees and We believe the key to high performance is ensuring that
employees know what is expected of them, set performance
steering the same in the right direction based on their strengths standards for each individual and track their success.
is an important step to help them plan their careers for which
a renewed focus is being placed. We believe that good work life balance will help our people
to manage their work and personal commitments, maximize
their potential and perform their level best. Our advocacy for
Structured Individual Learning and Development Plans, improving the work life balance of our people is evident from
mentoring and right career development moves for our people the rollout of two Sundays off in a month which helps them
have always been in our agenda. achieve their potential by performing their best at work.
Annual Report and Accounts 2006 - 2007 Standard Chartered 14
Diversity and Inclusion
Our markets, customer groups and talent pools are changing -
as is the Bank in its size and reach. Standard Chartered's Diversity
& Inclusion is a long term priority which we will nurture by focusing
on Inclusion to ensure that each individual feels valued for their
contribution. Diversity lies at the heart of our values.
We are a diverse organization with different facets. With our belief
and focus in Diversity and Inclusion one of the Bank's aspirations
is to be recognized as a leader in gender diversity by helping
women realize their full potential through personal development
and supportive workplace practices implemented in an engaging
and inclusive workplace.
The development of D& I Council in the country since 2006 under
a country Champion has paved the way to continuously improve
and get the best out of the broadest spectrum of our people.
The Council meets frequently and also conducts meetings with
diverse focus groups to understand the various strengths,
opportunities, sensitivities, needs and expectations of our people.
With our belief and focus in Diversity and Inclusion and in our constant endeavour to improve the quality of life of our
people through work-life balance, we are one of the first organizations in the country that has introduced Paternity leave
for the male staff. Under this leave, fathers of newly born babies are entitled to a 7 calendar day leave to celebrate the
birth as well as to share the responsibility of taking care of their new born.
Right Start- Country Induction of learning; takes the responsibility of driving their learning
Program and has the opportunity to learn. Simply put, if you grow,
we will grow.
'Right Start' the Bank's Induction course is more than a
course or a welcome. It's the new joiner's first real contact With this objective, various learning programs were held
with the realities of their job and their choice to join locally and globally during the year under review to impart
Standard Chartered. Right Start is a set of processes knowledge and work towards the learning and
and activities to help every new joiner adjust to the Bank development of the staff. In-house training programs held
over those first all-important days and months. This during the year increased substantially which clearly
Induction Program is a carefully planned and stimulating indicates that the staff are driving their learning and getting
journey for all the new joiners of SCBNL. the opportunity to learn and grow by sharing each other's
knowledge and practices.
The Right Start Programme implemented from April 2006
in the country has improved the way of welcoming new Besides the in-house trainings and local programs held
employees. "Day One Readiness" is a key measure to on a monthly basis, ten global learning programs were
assess if employees have everything they need to do in organized in Nepal in coordination with SCB's
their job on their first day. A total of five Country Induction Organizational Learning during this year.
programs were conducted during the year.
Important training programmes viz. Presentation Skills,
Business Communication Skills, Managing Career Growth
Learning & Development for Managers and for Employees, Managing Business
The Bank places great focus in the growth and Performance, The Finance of International Trade, Basel
development of its people and to create an environment II -A Primer and a workshop on credit 'Rok n Rol' were
where each and every individual understands the value conducted during the period under review.
Career Development Workshop in progress Staff at the Learning Week Program Awards Presentation to Staff during the Learning Week
Annual Report and Accounts 2006 - 2007 Standard Chartered 15
Staff Engagement Activities
We want our people to enjoy and Biratnagar. increases the engagement level of the
themselves while they work, which will staff enabling them to showcase their
lead to higher engagement. In this SCB Idol Finale was held on December natural and creative talent, it also helps
endeavour and to emphasize and 2, 2006 where eighteen finalists in building networks with other
inculcate the importance of work life showcased their amazing organizations.
balance to our people we provide them performances and mesmerized the
with opportunities to exhibit their latent audience. Winners from three different A team from SCB Nepal participated
talent and areas of interest by categories each were presented with in the Standard Chartered Cricket
organizing different events in various trophy and very attractive cash prizes. Challenge held in Chennai amongst
areas like sports, art & culture. Similarly teams from Nepal had the various branches of SCB from different
opportunity of showcasing their locations and countries.
One of the major activities undertaken dancing talents outside the country
was SCB Idol. All staff were by participating in the SCB Dance Idol A family event-'Rang ra Sang', a
encouraged to participate in three competition conducted by the SCB children's painting competition and
different performing categories of Group. food festival, was organized for our
singing, dancing and acting. Over 110 staff. All funds collected at this event
staff participated in the elimination Our people have also been were contributed for the Bank's charity
round of SCB Idol held in the continuously participating in various purposes.
Kathmandu Valley and regional extra-curricular activities organized by
elimination rounds held in Pokhara other Corporate Houses. This not only
SCB Idol-Winners SCB Cricket Challenge-Chennai Rang ra Sang
Career Development Opportunities
In line with Standard Chartered Bank's commitment to provide career development
opportunities for its talented staff force, a Career Development Workshop was successfully
organized for the first time in Nepal.
Career development opportunities are provided both locally through cross-functional
and international moves. Apart from the cross functional moves within the country, we
also leverage our global footprint to provide international experience to our people.
Opportunities for International movement are encouraged and practiced in SCB Nepal.
A total of nine local staff took up challenges in different countries where SCB operates
like India, Singapore, Qatar, Dubai and USA during the year under review.
Staff attending ' Rok n Rol ' - Workshop on Operational Risk
Rewards & Recognition
People are our strength and our pride. We reward our employees based on their
contribution towards our collective aspiration and performance. To recognize and
motivate the staff, we have been giving combination of market based salaries and
benefits and cash bonuses. In addition to this, excellence awards, spot awards,
appreciation letter and value certificates are awarded to staff on a regular basis,
depending on their performance. They receive recognition of their performance and
contribution both locally and globally through various internal communication channels
like Newsletters, Weekly Roundups and Community Roundups. Our people are also
given the opportunity to share in the Group's success by participating in the Group's
Sharesave scheme.
An Annual Staff Party was organized to celebrate 20 years of successful operation of
the Bank in Nepal recognizing staff who have contributed to this success with their
loyal long years of service. A total of 34 staff who completed 5, 10, 15 and 20 years
were awarded Long Service Awards for their hard work during these years which has Long Service Awards
been of great value to the Bank and has contributed to the Bank's growth.
Annual Report and Accounts 2006 - 2007 Standard Chartered 16
Our Approach to Corporate Governance
The Board of Standard Chartered Bank Nepal Limited is responsible for ensuring that proper
standards of corporate governance are maintained and for accounting to shareholders.
The Report has been prepared in accordance with the principles and provisions of the directives on Corporate Governance
issued by the Nepal Rastra Bank and the provisions of Company Act 2063. The directors confirm that the Bank complied
with the principles of Corporate Governance.
The directors confirm that, throughout the financial year, the Bank complied with the listing rules of Nepal Stock Exchange
Limited.
The directors confirm that the Bank has adopted a code of conduct regarding securities transactions by directors on
further terms no less than required by the NRB Directives and the Company Act and that all directors of the Bank complied
with the code of conduct through out the financial period.
The Board
The SCB Board comprises of a non-executive Chairman, one executive director and four non-executive directors of
which one is independent/professional director appointed as per the regulatory requirement and one director, representing
the public shareholders. Four directors including the non-executive chairman are nominated by the SCB Group for four
years term at a time to represent it in the board in proportion to its shareholding. The board is collectively responsible
for the success of the Bank.
During the year under review, in accordance with the regulatory requirements the Board held 13 scheduled board
meetings. The directors are given accurate, timely and clear information so that they can maintain full and effective
control over strategic, financial, operational, compliance and governance issues.
The following table shows the number of Board and Audit Committee meetings held during the year:
Board Audit Committee
Number of meetings in FY 2063/064 13 4
Jaspal Bindra 6 -
Sanjeev Agrawal 6 3
Sujit Mundul 13 -
Shantanu Mitra 3 1
Neeraj Swaroop * 1 -
Niranjan K Tibrewala 11 -
Ram Bahadur Aryal 13 4
* Mr. Neeraj Swaroop was nominated by the SCB UK in the Board of SCB Nepal on 18th June 2007 replacing
Mr. Sanjeev Agrawal.
Audit Committee
The Board has one standing Audit Committee with specific delegated authorities and clear Terms of Reference. The audit
committee meets quarterly to review the bank's financial condition, its internal controls, audit issues, and upon detailed
deliberations provide guidance to the management of the bank as appropriate.
The Board has reconstituted the audit committee following the recent changes in the Board whereby Mr. Sanjeev Agrawal
was replaced by Mr. Neeraj Swaroop. The members of the reconstituted Audit Committee are:
Mr. Neeraj Swaroop, Non Executive Director - Chairman
Mr. Shantanu Mitra, Non Executive Director - Member
Mr. Ram Bahadur Aryal, Professional/Independent Director - Member
Mr. Krishna Bhattarai, Head Legal & Compliance - Member
Mr. Gopi Krishna Bhandari, Senior Manager Credit - Member
Annual Report and Accounts 2006 - 2007 Standard Chartered 17
All members of the audit committee are either independent non-executive directors or independent of business
functions. The responsibilities of the Committee are in congruence with the framework defined by the NRB Directives
and the Company Act.
The committee members have been paid meeting allowance of NRs. 5,000 per meeting, except to the members
representing the SCB Group and employees of the SCB, Nepal. No remuneration and other facilities were provided
to them.
Management Committee an operational impact. To ensure that the key operational
risks are managed in a timely and effective manner, a
framework of policies, procedures and tools has been
The Management Committee (Manco) represented by all established within the Bank to identify, assess, monitor,
Business and Function Heads of the Bank is the apex control and report such risks.
body that manages the bank's operation on day to day
basis. Manco meets formally at least once in a month and A robust Operational Risk Management and Assurance
informally as and when required. The strategies for the (ORMA) Framework has been established to supervise
Bank are decided and monitored on a regular basis and and manage the operational risk. A Country Operational
decisions are taken jointly by this Committee. The CEO Risk Group (CORG) is in place to supervise and direct the
Chairs the Manco. management of operational risk.
Risk Governance Compliance and Regulatory Risk
The Bank's operations are conducted on a sound
organizational structure suitable both internally as well as Compliance and regulatory risk represent the risk of non-
for our customers. Through its risk management structure, compliance with the regulatory requirements. The bank
the Bank seeks to manage efficiently the core risks: credit, has appropriate compliance framework, policies and
market, country and liquidity which arise directly through procedures. While compliance team is responsible for
the Bank's commercial activities. Compliance and establishing and maintaining the compliance risk,
Regulatory risk, Operational and Reputational risk are compliance of such policies and procedures is the
normal consequences of any business undertaking. responsibility of each employee.
Credit Risk Legal Risk
Credit risk is the risk that counterparty will not settle its Legal risk is the risk of unexpected loss, including
obligations in accordance with agreed terms. Credit reputational loss arising from defective transactions or
exposure includes individual borrowers and connected contracts, claims being made or some other event resulting
groups of counterparties and portfolios, on banking and in liabilities or other loss for the bank, failure to protect the
trading books. Standards are approved by the Board and title to and ability to control the rights to assets of the
the delegation of credit authorities are overseen by the bank (including intellectual property rights), changes in
CEO. Procedures for managing credit risk are determined the law, or jurisdictional risk. The bank has appropriate
at the business level with specific policies and procedures legal framework, policies and procedures in place. Legal
being adapted to different risk environment and business risk is managed by the legal team.
goals. Business risk officers are in place to maximize the
efficiency on decision making. The Credit Risk Management
Committee review and monitor the Bank's Assets Portfolio.
Reputational Risk
Reputational Risk is any material adverse effect on the
Liquidity Risk relations between the bank and any one of its significant
stakeholders. It is the bank's policy that the protection of
Liquidity risk is defined as the risk that the bank either the bank's reputation should take priority over all activities
does not have sufficient financial resources available to including revenue generation at all times. Reputational risk
meet all its obligations and commitments as they fall due, is not a primary risk, but may arise from the failure to
or can access them only at excessive costs. effectively mitigate one or more of credit, liquidity, market,
legal and regulatory and operational risk. It also arise from
It is the policy of the Bank to maintain adequate liquidity the failure to comply with social, environmental and ethical
at all times and for all currencies. An Asset/Liability standards. A Reputational Risk Committee within the Bank
Management Committee (ALCO) meets at regular intervals has been established which meets at regular intervals to
to review the Deposit/Investment strategy of the Bank review and monitor this risk. All employees are responsible
and Regulatory compliance. The ALCO is responsible for for day to day identification and management of reputational
both statutory and prudential liquidity. risk.
Operational Risk
Operational Risk is the risk of direct or indirect loss due
to an event or action resulting from the failure of technology,
processes, infrastructure, personnel, and other risks having
Annual Report and Accounts 2006 - 2007 Standard Chartered 18
Additional Information as required by section 109 of the
Companies Act 2006
Achievements of the Current Year Purchase of own Shares
Un-audited first quarter result of the current financial year The bank has not purchased its own shares in the year
is as follows: under review.
Risk Assets: 11.52 billion
Deposits: 24.67 billion Internal Control System
Operating profit: 319 million
Profit before bonus and taxes: 323 million The Bank follows an internal control system and
Net profit for the period: 201 million procedures in line with the SCB Group policies and
procedures and local regulatory requirements. Internal
Industrial or Professional Relations of the control systems are effectively managed in the Bank in
Company terms of effectiveness of Internal Audit Committee and
internal audit functions, adequacy and effectiveness of
The Bank maintains a good professional relationship with policies and procedures on credit, operations, IT security,
its customers, people and regulators. Treasury management, Branch returns and reporting,
controls over fixed assets, Investment and fund
Senior managers of the bank represent in number of management and controls thereon including acquisition
councils, committees and sub-committees of regulators', and disposal of investments, delegation of authority,
professional organizations, associations, and forums. information systems and monitoring and control over the
investment portfolio.
The Bank is a Member of Nepal Bankers Association,
Federation of Nepalese Chamber of Commerce & Industry, Management Expenses
Nepal Britain Chamber of Commerce & Industry, Nepal India
Chamber of Commerce & Industry, Management Association The management expenses of the financial year is
of Nepal and Nepal Institute of Company Secretary. NRs. 428.23 million ( total of Staff Expenses and Other
Operating Expenses as per Schedule 4.23 & 4.24 of the
Board of Directors' Reaction to Remarks made, Financial Statements.)
if any, in the Audit Report
Payments due, from any Director, Managing
There are no adverse remarks made in the auditors' Director, Executive Chief or Basic Shareholder
report.
NIL. (Ref. to the schedule 4.29 of financial statements.)
Forfeited Shares
Remunerations, Allowances and Facilities to the
There are no shares forfeited during the fiscal year. Directors, the Managing Director, the Executive
Chief and other Office-bearers
Transaction between the Bank and its Subsidiary
Company and the Progress made in the Business Directors have not been paid any remuneration and no
facilities have been provided to them.
The Bank does not have a subsidiary company.
Meeting allowance is paid at NRs.11,000 to the Chairman
Information Furnished to the Company by its and NRs. 10,000 to Directors. However directors
basic Shareholders representing SCB Group are not entitled to meeting
allowance as per the Bank's policy.
There are no basic shareholders in the bank as no Remunerations, allowances and bonus paid to the CEO
shareholder, except the SCB Group, holds more than 1% in FY 063/064, who also was a Director of the Board,
of the paid up capital of the Bank. There has been no was NRs.15,260,003.
information received from the SCB Group in this regard.
Dividends yet yo Be Collected By Shareholders
Ownership of Shares taken up by the Directors Total dividends yet to be collected by the shareholder
and Office-bearers of the Company in last year amounts to NRs. 11.14 million.
NIL. Directors and staff have not involved in the shares
transactions of the bank in FY 2063/64 as per the
declaration provided by them to the bank.
Information Regarding Personal Interest
Furnished by any Director or any of His Close
Relatives in any Agreement Signed by the Bank
There are no such information furnished by the directors
and any of their close relatives.
Annual Report and Accounts 2006 - 2007 Standard Chartered 19
Crisis Management Country Health & Safety Committee. The scope and aim
of the committee are to provide a healthy and safe working
The Bank has in place a Crisis Management Plan and a environment to all employees, assist in minimizing the
Country Crisis Management Team to manage and resolve incidence of incidents/accidents/ and ill health occurring
effectively serious crisis that may affect the operations of in the workplace.
the bank. In addition to this the bank has a detailed
Business Continuity Plan to manage disruptions of An e-learning course on health policy, responsibilities,
operations and a Disaster Recovery Plan to manage fire safety and first aid is completed by all our people on
Technological problems. a mandatory basis. Responding to the threat posed to
our people and business by any avian flu pandemic, the
Bank has put in place a comprehensive business continuity
Health, Safety and Security plan.
The health and safety of our people and the integrity of We believe these actions and tools help to make our
our business are of utmost importance. As part of our brand stand out from our competitors. Ultimately they
Health and Safety management and its planning, the underpin our business and will help us to grow stronger.
Bank recently constituted a Working Group known as
Annual Report and Accounts 2006 - 2007 Standard Chartered 20
CSC & Co
an associated firm of Pricewaterhouse Coopers
CSC & Co
Chartered Accountants
1955, Tanka Prasad Ghumti Sadak
Babar Mahal
PO Box: 4861, Kathmandu, Nepal
Tel: +977-1-4259414, 4268798
Fax: +977-1-4244255
E-mail: csc@ntc.net.np
Auditors' Report
To the Shareholders of Standard Chartered Bank Nepal Limited
We have audited the attached Balance Sheet of Standard Chartered Bank Nepal Ltd. as of Ashad 32, 2064 (16, July 2007)
and the Profit and Loss Account and Cash Flow Statement for the year then ended. These financial statements are the
responsibility of the Bank's management. Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with Nepal Standards on Auditing and the auditing standards generally accepted in
Nepal. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
We have obtained satisfactory information and explanations asked for, which to the best of our knowledge and belief were
necessary for the purpose of our audit; the returns received from the branch offices of the bank were adequate for the
purpose of the audit; the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement have been prepared
in accordance with the methods and format specified by Nepal Rastra Bank, and conform to the books of accounts of the
Bank; and the accounts and records of the Bank are properly maintained in accordance with the prevailing laws.
To the best of our information and according to the explanations given to us, in the course of our audit, we observed that
the actions were taken for the protection of the interest of depositors and investors; the capital fund and risk bearing fund
were adequately maintained; the business of the Bank was conducted satisfactorily and the Bank's transactions were found
to be within the scope of its authority. We did not come across cases where the board of directors or any director or any
office bearer of the Bank has acted contrary to the provisions of law or caused loss or damage to the Bank or committed
any misappropriation or violated directives of Nepal Rastra Bank, nor have we been informed of any such case by the
management.
In our opinion, the financial statements give a true and fair view of the financial position of the Bank as of 32 Ashad, 2064
(16 July 2007), and of the results of its operations and its cash flows for the year then ended in accordance with the
accounting practices generally accepted in Nepal and those statements are in compliance with the directives from Nepal
Rastra Bank, Bank and Financial Institution Act 2063 and Company Act 2063.
Madan Krishna Sharma
Partner
Date : 17 September 2007 (31 Bhadra 2064) CSC & Co.
Place: Kathmandu Chartered Accountants
Annual Report and Accounts 2006 - 2007 Standard Chartered 21
Standard Chartered Bank Nepal Limited
Balance Sheet
as at 16 July 2007 (32 Ashad 2064)
This Year Previous Year
CAPITAL & LIABILITIES Schedule
Rs. Rs.
1. Share Capital 4.1 413,254,800 374,640,400
2. Reserves and Funds 4.2 1,703,098,561 1,379,498,377
3. Debentures and Bonds 4.3 – –
4. Loans and Borrowings 4.4 400,000,000 –
5. Deposit Liability 4.5 24,647,020,755 23,061,032,081
6. Bills Payables 4.6 36,168,332 55,750,837
7. Proposed and Unpaid Dividend 341,744,048 499,979,726
8. Income Tax Liability 5,598,588 –
9. Other Liabilities 4.7 1,049,804,367 396,450,647
TOTAL LIABILITIES 28,596,689,451 25,767,352,068
This Year Previous Year
ASSETS Schedule
Rs. Rs.
1. Cash Balance 4.8 378,422,542 279,511,285
2. Balance with Nepal Rastra Bank 4.9 1,613,757,788 749,740,866
3. Balance with Banks/Financial Institutions 4.10 28,840,738 246,989,272
4. Money at Call and Short Notice 4.11 1,761,151,500 1,977,271,000
5. Investments 4.12 13,553,233,464 12,838,555,440
6. Loans, Advances and Bills Purchased 4.13 10,502,637,135 8,935,417,810
7. Fixed Assets 4.14 125,590,978 101,301,932
8. Non-Banking Assets 4.15 – –
9. Other Assets 4.16 633,055,306 638,564,463
TOTAL ASSETS 28,596,689,451 25,767,352,068
Contingent Liabilities Schedule 4.17
Declaration of Directors Schedule 4.29
Statement of Capital Fund Schedule 4.30
Statement of Risk Weighted Assets Schedule 4.30(A)
Key Indicators Schedule 4.31
Significant Accounting Policies Schedule 4.32
Notes to Accounts Schedule 4.33
Schedules 4.1 to 4.17 form an integral part of the Balance Sheet.
Niranjan K. Tibrewala Sujit Mundul Neeraj Swaroop
Director CEO & Director Director
As per our report of even date
Rakhi Singh Ram B. Aryal Madan Krishna Sharma
Chief Financial Officer Director Partner
for and on behalf of CSC & Co.
Chartered Accountants
Kathmandu
Date: 17th September, 2007
22 Standard Chartered Annual Report and Accounts 2006 - 2007
Standard Chartered Bank Nepal Limited
Profit and Loss Account
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
This Year Previous Year
PARTICULARS Schedule
Rs. Rs.
1. Interest Income 4.18 1,411,981,867 1,189,602,957
2. Interest Expenses 4.19 413,055,152 303,198,419
Net Interest Income 998,926,715 886,404,538
3. Commission and Discount 4.20 221,207,433 222,928,812
4. Other Operating Incomes 4.21 28,784,880 25,442,174
5. Exchange Fluctuation Income 4.22 309,086,504 283,471,852
Total Operating Income 1,558,005,532 1,418,247,376
6. Staff Expenses 4.23 199,778,473 168,230,682
7. Other Operating Expenses 4.24 228,450,604 221,086,673
8. Exchange Fluctuation Loss 4.22 – –
Operating Profit Before Provision for Possible Loss 1,129,776,455 1,028,930,021
9. Provision for Possible Losses 4.25 36,808,665 47,729,780
Operating Profit 1,092,967,790 981,200,241
10. Non-Operating Income/(Loss) 4.26 9,492,080 1,432,691
11. Provision for Possible Loss Written Back 4.27 20,159,844 53,090,276
Profit from Ordinary Activities 1,122,619,714 1,035,723,208
12. Income/(Expenses) from Extra Ordinary Activities 4.28 (4,914,979) (2,411,224)
Net Profit after considering all Activities 1,117,704,735 1,033,311,984
13. Provision for Staff Bonus 101,609,521 93,937,453
14. Provision for Income Tax 324,427,150 280,618,650
Current Year's 315,427,150 274,504,897
Upto Previous Year 9,000,000 6,113,753
Net Profit/Loss 691,668,064 658,755,881
Schedule 4.18 to 4.28 from integral part of this Profit and Loss Account.
Niranjan K. Tibrewala Sujit Mundul Neeraj Swaroop
Director CEO & Director Director
As per our report of even date
Rakhi Singh Ram B. Aryal Madan Krishna Sharma
Chief Financial Officer Director Partner
for and on behalf of CSC & Co.
Chartered Accountants
Kathmandu
Date: 17th September, 2007
Annual Report and Accounts 2006 - 2007 Standard Chartered 23
Standard Chartered Bank Nepal Limited
Profit and Loss Appropriation Account
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
This Year Previous Year
PARTICULARS Schedule
Rs. Rs.
Income
1. Accumulated Profit up to Last Year 370,584,678 251,335,904
2. This Year's Profit 691,668,064 658,755,881
3. Exchange Fluctuation Fund – –
4. Capital Adjustment Fund upto Previous Year 74,928,080 –
Total 1,137,180,822 910,091,785
Expenses
1. Accumulated Loss up to Last Year – –
2. Current Year's Loss – –
3. General Reserve Fund 77,228,800 –
4. Contingent Reserve – –
5. Institutional Development Fund – –
6. Dividend Equalization Fund – –
7. Employees Related Reserves – –
8. Proposed Dividend 330,603,840 487,032,520
9. Proposed Issue of Bonus Shares 206,627,400 37,464,040
10. Special Reserve Fund – –
11. Exchange Fluctuation Fund 17,995,632 15,010,547
12. Capital Redemption Reserve Fund – –
13. Capital Adjustment Fund – –
Total 632,455,672 539,507,107
Accumulated Profit/(Loss) 504,725,150 370,584,678
Niranjan K. Tibrewala Sujit Mundul Neeraj Swaroop
Director CEO & Director Director
As per our report of even date
Rakhi Singh Ram B. Aryal Madan Krishna Sharma
Chief Financial Officer Director Partner
for and on behalf of CSC & Co.
Chartered Accountants
Kathmandu
Date: 17th September, 2007
24 Standard Chartered Annual Report and Accounts 2006 - 2007
Standard Chartered Bank Nepal Limited
Cash Flow Statement
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
2,942,214,511 A) Cash Flow from Operating Activities 1,092,749,033
1,251,157,331 1. Cash Receipts 1,572,010,974
778,924,776 1.1 Interest Income 1,071,701,495
220,450,214 1.2 Commission and Discount Income 224,164,421
223,429,663 1.3 Income from Foreign Exchange Transaction 237,103,978
1,576,518 1.4 Recovery of Loan Written off 1,020,334
26,776,160 1.5 Other Income 38,020,746
1,373,139,685 2. Cash Payments 1,631,699,607
300,222,265 2.1 Interest Expenses 397,832,097
168,497,496 2.2 Staff Expenses 200,045,248
188,079,960 2.3 Office Operating Expenses 207,528,139
265,502,934 2.4 Income Tax Payment 330,025,738
450,837,030 2.5 Other Expenses 496,268,385
(121,982,354) Cash Flow before Changes in Working Capital (59,688,633)
(610,533,438) Decrease / (Increase) of Current Assets (1,351,802,697)
282,420,000 1. Decrease / (Increase) in Money at Call and Short Notice 216,119,500
– 2. Decrease / (Increase) in Short Term Investment –
(790,837,272) 3. Decrease / (Increase) in Loan and Bills Purchase (1,589,803,459)
(102,116,166) 4. Decrease / (Increase) in Other Assets 21,881,262
3,674,730,303 (Decrease) / Increase of Current Liabilities 2,504,240,363
3,697,562,231 1. (Decrease) / Increase in Deposits 1,585,988,674
– 2. (Decrease) / Increase in Certificate of Deposits –
(28,098,121) 3. (Decrease) / Increase in Short Term Borrowings 380,417,495
5,266,193 4. (Decrease) / Increase in Other Liabilities 537,834,194
(2,837,132,171) B) Cash Flow from Investment Activities (421,102,274)
(3,144,982,442) 1. Decrease / (Increase) in Long Term Investment (714,678,023)
(47,539,177) 2. Decrease / (Increase) in Fixed Assets (33,230,334)
355,290,743 3. Interest Income from Long Term Investment 326,549,868
98,705 4. Dividend Income 256,215
– 5. Others –
– C) Cash Flow from Financing Activities 1,150,360
– 1. Increase / (Decrease) in Long Term Borrowings (Bond, Debenture etc.) –
– 2. Increase / (Decrease) in Share Capital 1,150,360
– 3. Increase / (Decrease) in Other Liability –
– 4. Increase / (Decrease) in Refinance / Facilities Received From Nepal Rastra Bank –
60,042,189 D) Income / Expense from Change in Exchange Rate in Cash and Bank Balance 71,982,526
165,124,529 E) Current Year's Cash Flow from all Activities 744,779,645
1,111,116,894 F) Opening Cash and Bank Balance 1,276,241,423
1,276,241,423 G) Closing Cash and Bank Balance 2,021,021,068
Niranjan K. Tibrewala Sujit Mundul Neeraj Swaroop
Director CEO & Director Director
As per our report of even date
Rakhi Singh Ram B. Aryal Madan Krishna Sharma
Chief Financial Officer Director Partner
for and on behalf of CSC & Co.
Chartered Accountants
Kathmandu
Date: 17th September, 2007
Annual Report and Accounts 2006 - 2007 Standard Chartered 25
Standard Chartered Bank Nepal Limited
Statement of Changes in Equity
Fiscal Year 2062 / 2063
Rs.
Proposed
Capital Exchange Capital
Share Accumulated General Share Bonus
PARTICULARS Reserve Fluctuation Adjustment Total
Capital Profit Reserve Premium Share
Fund Reserve Fund
Capital
Opening Balance at 17 July 2006 374,640,400 370,584,678 749,280,800 – – 147,240,779 37,464,040 74,928,080 1,754,138,777
Adjustments – – – – – – –
Restated Balance as at 17 July 2006 374,640,400 370,584,678 749,280,800 – – 147,240,779 37,464,040 74,928,080 1,754,138,777
Surplus/Deficit on Revaluation of
Properties – – – – – – – – –
Surplus/Deficit on Revaluation of
Investments – – – – – – – – –
Net Profit for the Period – 691,668,064 – – – – – 691,668,064
Transfer to General Reserve – (77,228,800) 77,228,800 – – _ – – –
Proposed Dividend – (330,603,840) – – – – – (330,603,840)
Issue of Bonus Shares 38,614,400 – – _ – – (37,464,040) – 1,150,360
Proposed Issue of Bonus Shares – (206,627,400) – _ – – 206,627,400 – –
Issue of Share Capital – – – – – – – – –
Exchange Fluctuation Fund – (17,995,632) – – – 17,995,632 – – –
Capital Adjustment Fund – 74,928,080 – – – – – (74,928,080) –
Closing Balance as at 16 July 2007 413,254,800 504,725,150 826,509,600 – – 165,236,411 206,627,400 – 2,116,353,361
26 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.1
Standard Chartered Bank Nepal Limited
Share Capital and Ownership
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
1. Share Capital
1,000,000,000 1.1 Authorised Capital 1,000,000,000
1,000,000,000 a) 10,000,000 Ordinary Shares of Rs. 100 each 1,000,000,000
– b) – Non-Redeemable Preference Shares of Rs. – each –
– c) – Redeemable Preference Shares of Rs. – each –
500,000,000 1.2 Issued 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 –
374,640,400 1.3 Paid Up Capital 413,254,800
374,640,400 a) 4,132,548 Ordinary Shares of Rs. 100 each 413,254,800
– b) – Non-Redeemable Preference Shares of Rs. – each –
– c) – Redeemable Preference Shares of Rs. – each –
Share Ownership
Share Capital Share Capital
PARTICULARS
Previous Year Rs. % % This Year Rs.
280,980,300 75.00 1. Promoters 75.00 309,941,100
– – 1.1 Government of Nepal – –
280,980,300 75.00 1.2 Foreign Institutions 75.00 309,941,100
– – 1.3 "A" Class Licensed Institutions – –
– – 1.4 Other Licensed Institutions – –
93,660,100 – 1.5 Other Entities – –
– – 1.6 Individuals – –
– – 1.7 Others – –
93,660,100 25.00 2. General Public 25.00 103,313,700
374,640,400 100.00 Total 100.00 413,254,800
Details of the Shareholders holding more than 0.5% of the Total Shares :
S.No. No. of Shares Held Name of the Shareholders % of Total Shares Amount Rs.
1. 2,066,274 Standard Chartered Grindlays Ltd. Australia 50.00 206,627,400
2. 1,033,137 Standard Chartered Bank, UK 25.00 103,313,700
3. 22,000 Panita Sundas Lama 0.53 2,200,000
4. 22,000 Pravesh Lama 0.53 2,200,000
5. 22,000 Jhan Man Lama 0.53 2,200,000
6. 22,000 Usha Devi Sundas 0.53 2,200,000
7. 22,000 Zharna Lama 0.53 2,200,000
8. 22,000 Priyanka Agrawal 0.53 2,200,000
9. 22,000 Avinash Agrawal 0.53 2,200,000
10. 22,000 Komal Agrawal 0.53 2,200,000
11. 22,000 Shashi Agrawal 0.53 2,200,000
12. 22,000 Shanker Lal Agrawal 0.53 2,200,000
13. 22,000 Pashupati Soap Industries 0.53 2,200,000
14. 20,550 Nirmal Pradhan 0.50 2,055,000
Annual Report and Accounts 2006 - 2007 Standard Chartered 27
Standard Chartered Bank Nepal Limited Schedule 4.2
Reserves and Funds
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
749,280,800 1. General Reserve Fund 826,509,600
37,464,040 2. Proposed Issue of Bonus Shares 206,627,400
– 3. Capital Reserve Fund –
– 4. Capital Redemption Reserve –
74,928,080 5. Capital Adjustment Fund –
– 6. Other Reserves and Funds –
– a) Contingent Reserve –
– b) Institutional Development Fund –
– c) Dividend Equalization Fund –
– d) Special Reserve Fund –
– e) Assets Revaluation Reserve –
– f) Other Free Reserves –
– g) Other Reserves –
370,584,678 7. Accumulated Profit/(Loss) 504,725,150
147,240,779 8. Exchange Fluctuation Fund 165,236,411
1,379,498,377 Total 1,703,098,561
Standard Chartered Bank Nepal Limited Schedule 4.3
Debentures and Bonds
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
– 1. Debentures –
– 2. Bond –
– Total (1+2) –
Standard Chartered Bank Nepal Limited Schedule 4.4
Loans and Borrowings
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
A) Local
1. Government of Nepal –
2. Nepal Rastra Bank –
3. Repo Liabilities 400,000,000
4. Inter Bank and Financial Institution –
5. Other Institutions –
6. Others –
– Total A 400,000,000
B) Foreign
– 1. Banks –
– 2. Others –
– Total B –
– Total (A + B) 400,000,000
28 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.5
Standard Chartered Bank Nepal Limited
Deposit Accounts
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
1. Non-Interest Bearing Accounts
4,681,937,373 A) Current Deposits 4,794,534,396
3,071,863,196 1. Local Currency 2,754,832,470
8,802,432 1.1 Government of Nepal 505,848
422,491 1.2 "A" Class Licensed Institutions 89,887,360
15,098,969 1.3 Other Licensed Institutions 6,187,403
1,628,535,257 1.4 Other Organised Institutions 2,102,160,783
741,104,484 1.5 Individuals 487,435,944
677,899,563 1.6 Others 68,655,132
1,610,074,177 2. Foreign Currency 2,039,701,926
– 2.1 Government of Nepal –
12,032,556 2.2 "A" Class Licensed Institutions 15,606,235
– 2.3 Other Licensed Institutions –
1,106,704,694 2.4 Other Organised Institutions 1,676,426,765
330,899,346 2.5 Individuals 234,513,249
160,437,581 2.6 Others 113,155,677
509,421,950 B) Margin Deposits 486,101,105
– 1. Employees Guarantee –
40,887,921 2. Guarantee Margin 68,546,396
53,878,031 3. Letters of Credit Margin 94,834,723
414,655,998 4. Others 322,719,986
– C) Others –
– 1. Local Currency –
– 1.1 Financial Institutions –
– 1.2 Other Organised Institutions –
– 1.3 Individuals –
– 2. Foreign Currency –
– 2.1 Financial Institutions –
– 2.2 Other Organised Institutions –
– 2.3 Individuals –
5,191,359,323 Total of Non-Interest Bearing Accounts 5,280,635,501
Annual Report and Accounts 2006 - 2007 Standard Chartered 29
Standard Chartered Bank Nepal Limited
Deposit Accounts (Contd.)
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
2. Interest Bearing Accounts
14,597,674,239 A) Saving Deposits 15,244,384,575
12,079,030,999 1. Local Currency 12,685,954,950
1,363,941,970 1.1 Organised Institutions 3,624,673,130
10,207,087,157 1.2 Individuals 9,001,710,255
508,001,872 1.3 Others 59,571,565
2,518,643,240 2. Foreign Currency 2,558,429,625
1,359,906,752 2.1 Organised Institutions 1,615,020,925
1,111,146,257 2.2 Individuals 926,876,703
47,590,231 2.3 Others 16,531,997
2,136,307,063 B) Fixed Deposits 3,196,489,845
386,517,835 1. Local Currency 413,217,915
48,704,913 1.1 Organised Institutions 38,611,157
330,359,752 1.2 Individuals 371,706,758
7,453,170 1.3 Others 2,900,000
1,749,789,228 2. Foreign Currency 2,783,271,930
200,007,749 2.1 Organised Institutions 637,775,763
1,548,788,882 2.2 Individuals 2,103,461,154
992,597 2.3 Others 42,035,013
1,135,691,456 C) Call Deposits 925,510,834
1,111,686,961 1. Local Currency 913,352,644
– 1.1 "A" Class Licensed Institutions –
– 1.2 Other Licensed Institutions –
1,049,250,182 1.3 Other Organised Institutions 862,727,703
62,436,779 1.4 Individuals 50,624,941
– 1.5 Others –
24,004,495 2. Foreign Currency 12,158,190
10,228,800 2.1 "A" Class Licensed Institutions 6,518,000
– 2.2 Other Licensed Institutions –
13,775,695 2.3 Other Organised Institutions 5,640,190
– 2.4 Individuals –
– 2.5 Others –
– D) Certificate of Deposits –
– 1. Organised Institutions –
– 2. Individuals –
– 3. Others –
17,869,672,758 Total of Interest Bearing Accounts 19,366,385,254
23,061,032,081 Total Deposits (1 + 2) 24,647,020,755
30 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.6
Standard Chartered Bank Nepal Limited
Bills Payable
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
41,204,300 1. Local Currency 27,176,995
14,546,537 2. Foreign Currency 8,991,337
55,750,837 Total 36,168,332
Schedule 4.7
Standard Chartered Bank Nepal Limited
Other Liabilities
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
60,500,576 1. Pension / Gratuity Fund 60,249,100
– 2. Employees Provident Fund –
– 3. Employees Welfare Fund –
93,937,453 4. Provision for Staff Bonus 101,609,521
20,228,509 5. Interest Payable on Deposits 35,217,700
– 6. Interest Payable on Borrowings 233,864
16,100,265 7. Unearned Discount and Commission 23,751,188
149,681,593 8. Sundry Creditors 199,591,253
– 9. Branch Adjustment Account –
56,002,251 10. Others 629,151,741
395,500 a) Audit Fees Payable 446,000
– b) Nostro Credit 570,404,180
55,606,751 c) Others 58,301,561
396,450,647 Total 1,049,804,367
Note: Nostro Credit includes the balance of customer remittance in-transit as on the Balance Sheet date with
a corresponding balance in the Balance with NRB.
Schedule 4.8
Standard Chartered Bank Nepal Limited
Cash Balance
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
243,442,057 1. Local Currency (including coins) 336,374,091
36,069,228 2. Foreign Currency 42,048,451
279,511,285 Total 378,422,542
Annual Report and Accounts 2006 - 2007 Standard Chartered 31
Schedule 4.9
Standard Chartered Bank Nepal Limited
Balance with Nepal Rastra Bank
as at 16 July 2007 (32 Ashad 2064)
Foreign Currency Rs.
Previous Local
Year PARTICULARS Currency Convertible Grand Total
Rs. Rs. INR Foreign Total Rs.
Currency
749,740,866 1. Nepal Rastra Bank 1,592,334,639 – 21,423,149 21,423,149 1,613,757,788
749,740,866 a) Current Account 1,592,334,639 – 21,423,149 21,423,149 1,613,757,788
– b) Other Account – – – – –
Schedule 4.10
Standard Chartered Bank Nepal Limited
Balance with Bank / Financial Institutions
as at 16 July 2007 (32 Ashad 2064)
Foreign Currency Rs.
Previous Local
Year PARTICULARS Currency Convertible Grand Total
Rs. Rs. INR Foreign Total Rs.
Currency
18,578,714 1. Local Licensed Institutions 28,840,738 – – – 28,840,738
18,578,714 a) Current Account 28,840,738 – – – 28,840,738
– b) Other Account – – – – –
228,410,558 2. Foreign Banks – – – – –
228,410,558 a) Current Account – – – – –
– b) Other Account – – – – –
246,989,272 Total 28,840,738 – – – 28,840,738
Note: Balance as per the confirmation and statement received from respective banks is Rs. 157,908,868 and
the differences have been reconciled.
Schedule 4.11
Standard Chartered Bank Nepal Limited
Money at Call and Short Notice
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
– 1. Local Currency –
1,977,271,000 2. Foreign Currency 1,761,151,500
1,977,271,000 Total 1,761,151,500
32 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.12
Standard Chartered Bank Nepal Limited
Investments
as at 16 July 2007 (32 Ashad 2064)
Previous Year Purpose This Year
PARTICULARS
Rs. Trading Other Rs.
7,210,500,501 1. Government of Nepal Treasury Bills – 5,995,101,329 5,995,101,329
1,296,536,000 2. Government of Nepal Saving Bonds – 1,046,076,000 1,046,076,000
128,838,939 3. Government of Nepal Other Securities (Special Bond) – 66,759,974 66,759,974
– 4. Nepal Rastra Bank Bonds – – –
– 5. Foreign Securities – – –
– 6. Local Licensed Institutions – – –
4,190,337,000 7. Foreign Banks – 6,403,353,161 6,403,353,161
15,343,000 8. Corporate Shares – 44,943,000 44,943,000
– 9. Corporate Debenture and Bonds – – –
– 10. Other Investments – – –
12,841,555,440 Total Investments – 13,556,233,464 13,556,233,464
3,000,000 Provisions – 3,000,000 3,000,000
12,838,555,440 Net Investments – 13,553,233,464 13,553,233,464
Schedule 4.12 (A)
Standard Chartered Bank Nepal Limited
Investment in Shares, Debentures and Bonds
as at 16 July 2007 (32 Ashad 2064)
Previous This Year
Year PARTICULARS Cost Price Market Price Provision
Rs. Rs. Rs. Amount Rs.
15,343,000 1. Investment in Shares 44,943,000 – 3,000,000
3,000,000 1.1 Purwanchal Grameen Bikash Bank Ltd. 3,000,000 NA (Note 3) –
30,000 Ordinary Shares of Rs. 100 each fully paid up
3,000,000 1.2 Sudur Paschimanchal Grameen Bikash Bank Ltd. 3,000,000 NA (Note 3) 3,000,000
30,000 Ordinary Shares of Rs. 100 each fully paid up
8,990,000 1.3 Rural Micro Finance Development Centre Ltd. 38,590,000 NA (Note 3) –
385,900 Ordinary Shares of Rs. 100 each fully paid up
353,000 1.4 Credit Information Centre Ltd. 353,000 NA (Note 3) –
3,530 Ordinary Shares of Rs. 100 each fully paid up
– 2. Investment in Debentures and Bonds – – –
– 2.1 Company (Pvt. Ltd. / Ltd.) – – –
Percent Debentures / Bonds of Rs. – each
15,343,000 Total Investment 44,943,000 – –
3,000,000 3. Provision for Loss 3,000,000
– 3.1 Upto Previous Year 3,000,000
3,000,000 3.2 Increase / Decrease this Year –
3,000,000 Total Provisions 3,000,000
12,343,000 Net Investments 41,943,000
Note: 1. The following companies have not distributed dividends in the last three years:
1.1 Purwanchal Grameen Bikash Bank Ltd.
1.2 Sudur Paschimanchal Grameen Bikash Bank Ltd.
1.3 Credit Information Centre Ltd.
2. None of the above shares are listed with the Nepal Stock Exchange Ltd. (NEPSE).
3. NA - In the absence of sufficient information and listing in NEPSE, the market value of the investments have not
been shown.
Annual Report and Accounts 2006 - 2007 Standard Chartered 33
Schedule 4.13
Standard Chartered Bank Nepal Limited
Classification of Loans, Advances and Bills Purchased and Provisioning
as at 16 July 2007 (32 Ashad 2064)
Loans and Advances Bills Purchased and Discounted
Previous This
Domestic
Year PARTICULARS Priority Sector Year
Other Foreign Total Domestic Foreign Total
Insured Uninsured
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
9,010,347,896 1. Performing Loans – 428,526,277 9,911,900,924 8,755 10,340,435,956 2,564,731 250,130,517 252,695,248 10,593,131,204
9,010,347,896 1.1 Pass – 428,526,277 9,911,900,924 8,755 10,340,435,956 2,564,731 250,130,517 252,695,248 10,593,131,204
– 1.2 Restructured – – – – – – – – –
195,932,315 2. Non - Performing Loans – 66,521,177 130,495,976 – 197,017,153 – – – 197,017,153
16,492,340 2.1 Substandard – 759,533 15,694,444 – 16,453,977 – – – 16,453,977
65,608,277 2.2 Doubtful – 60,993,856 5,199,664 – 66,193,520 – – – 66,193,520
113,831,698 2.3 Loss – 4,767,788 109,601,868 – 114,369,656 – – – 114,369,656
9,206,280,211 A) Total Loans – 495,047,454 10,042,396,900 8,755 10,537,453,109 2,564,731 250,130,517 252,695,248 10,790,148,357
3. Loan Loss Provision
90,103,479 3.1 Pass – 4,285,263 99,119,009 88 103,404,360 25,647 2,501,305 2,526,952 105,931,312
– 3.2 Restructured – – – – – – – – –
4,123,085 3.3 Substandard – 189,883 3,923,611 – 4,113,494 – – – 4,113,494
62,804,139 3.4 Doubtful – 60,496,928 2,599,832 – 63,096,760 – – – 63,096,760
113,831,698 3.5 Loss – 4,767,788 109,601,868 – 114,369,656 – – – 114,369,656
270,862,401 B) Total Provision – 69,739,862 215,244,320 88 284,984,270 25,647 2,501,305 2,526,952 287,511,222
4. Provision upto Previous Year
81,945,605 4.1 Pass – 3,948,246 83,143,588 124 87,091,958 44,936 2,966,585 3,011,521 90,103,479
– 4.2 Restructured Loan – – – – – – – – –
2,610,754 4.3 Substandard – 372,579 3,750,506 – 4,123,085 – – – 4,123,085
81,760,735 4.4 Doubtful – 60,639,340 2,164,799 – 62,804,139 – – – 62,804,139
111,343,916 4.5 Loss – 5,870,403 107,961,295 – 113,831,698 – – – 113,831,698
277,661,010 C) Total Provision upto Previous Year – 70,830,568 197,020,188 124 267,850,880 44,936 2,966,585 3,011,521 270,862,401
51,528,393 D) Previous Year's Provision Written Back – 1,090,706 18,571,231 36 19,661,973 19,289 478,582 497,871 20,159,844
– E) This Year's Additional Provision – – 36,795,363 – 36,795,363 – 13,302 13,302 36,808,665
(6,798,609) Net Adjustments of the Year – (1,090,706) 18,224,132 (36) 17,133,390 (19,289) (465,280) (484,569) 16,648,821
8,935,417,810 Net Loan (A - B) – 425,307,592 9,827,152,580 8,667 10,252,468,839 2,539,084 247,629,212 250,168,296 10,502,637,135
Schedule 4.13 (A)
Standard Chartered Bank Nepal Limited
Securities Against Loan, Advance and Bills Purchased
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
9,206,280,211 A) Secured 10,790,148,357
5,040,152,164 1. Movable/Immovable Assets 6,384,899,292
– 2. Guarantee of Local Licensed Institutions –
– 3. Government Guarantee –
221,376,890 4. Guarantee of Internationally Rated Banks 933,378,704
– 5. Export Documents –
– 6. Fixed Deposit Receipts –
229,250,401 a) Own FDR 498,244,846
212,307,230 b) FDR of Other Licensed Institutions 303,084,261
610,145,734 7. Government Securities / Bonds 449,790,721
– 8. Counter Guarantee –
– 9. Personal Guarantee –
2,893,047,792 10. Other Securities 2,220,750,533
– B) Unsecured –
9,206,280,211 Total 10,790,148,357
34 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.14
Standard Chartered Bank Nepal Limited
Fixed Assets
as at 16 July 2007 (32 Ashad 2064)
Assets
Previous This
Freehold Others
PARTICULARS Office
Year and Vehicles Machinery (Leasehold) Year
Equipment
Buildings Assets
Rs. Rs. Rs. Rs. Rs. Rs. Rs.
1. At Cost
375,074,160 a) Balance upto Previous Year 38,000,733 38,623,609 – 254,145,496 40,662,588 371,432,426
21,851,979 b) Addition this Year – 22,154,015 – 16,397,696 27,151,193 65,702,904
– c) Revaluation / Written-back this Year – – – – – –
(22,876,156) d) Sold this Year – (17,894,988) – – – (17,894,988)
(2,617,557) e) Written-off this Year – – – (4,515,256) (9,685,046) (14,200,302)
371,432,426 Total Cost (a+b+c+d+e) 38,000,733 42,882,636 – 266,027,936 58,128,735 405,040,040
2. Depreciation
322,972,098 a) Upto Previous Year 8,703,218 30,305,914 – 242,025,717 35,361,947 316,396,796
18,918,412 b) For this Year 789,408 8,520,699 – 6,097,294 2,769,752 18,177,153
– c) Depreciation on Revaluation/Written-back – – – – – –
(25,493,714) d) Depreciation Adjustment/Written-back – (17,894,988) – (4,515,256) (9,628,944) (32,039,188)
316,396,796 Total Depreciation (a+b+c+d) 9,492,626 20,931,625 – 243,607,755 28,502,755 302,534,761
55,035,630 3. Book Value (WDV)* (1-2) 28,508,107 21,951,011 – 22,420,181 29,625,980 102,505,279
19,310,556 4. Land 19,310,556 – – – – 19,310,556
26,955,746 5. Capital Work in Progress (To be Capitalised) – – – 3,775,143 – 3,775,143
– 6. Leasehold Assets – – – – – –
101,301,932 Total (3+4+5+6) 47,818,663 21,951,011 – 26,195,324 29,625,980 125,590,978
* Written Down Value
Schedule 4.15
Standard Chartered Bank Nepal Limited
Non-Banking Assets
as at 16 July 2007 (32 Ashad 2064)
Previous Net Non
Total Amount of Provision For Loss
Name and Address of Date of assuming Banking
Year Non Banking
Borrower or Party Non Banking Assets Amount Assets
Assets %
Rs. Rs. Rs.
– – – – – – –
– – – – – –
– – – – – – –
Annual Report and Accounts 2006 - 2007 Standard Chartered 35
Schedule 4.16
Standard Chartered Bank Nepal Limited
Other Assets
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
– 1. Stock of Stationery –
188,556,971 2. Income Receivable on Investments 202,287,476
– 3. Accrued Interest on Loan 182,452,998 –
Less: Interest Suspense Amount (182,452,998)
4,057,268 4. Commission Receivable 1,100,280
52,090,689 5. Sundry Debtors 106,879,688
122,884,521 6. Staff Loan and Advances 146,771,946
11,844,510 7. Prepayments 12,137,880
– 8. Cash in Transit –
233,004,679 9. Other Transit Items (Including Cheques) 139,348,820
– 10. Drafts Paid without Notice –
10,735,109 11. Expenses Not Written-off 24,229,216
– 12. Branch Adjustment Account –
15,390,716 13. Others 300,000
15,115,716 a) Advance Income Tax (Net of Provision) –
275,000 b) Others 300,000
638,564,463 Total 633,055,306
Schedule 4.16 (A)
Standard Chartered Bank Nepal Limited
Other Assets (Additional Statement)
as at 16 July 2007 (32 Ashad 2064)
This Year (Rs.)
Previous Year
PARTICULARS Upto 1 1 to 3 Above 3
Rs. Total
Year Years Years
160,694,438 1. Accrued Interest on Loans and Advances 130,978,852 35,574,562 15,899,584 182,452,998
– 2. Drafts Paid without Notice – – – –
– 3. Branch Adjustment Account – – – –
36 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.17
Standard Chartered Bank Nepal Limited
Contingent Liabilities
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
– 1. Claims on Bank but not Acknowledged as Liabilities by the Bank –
1,837,398,481 2. Letters of Credit (Full Amount) 1,861,943,726
1,669,529,915 a) Maturity period of less than 6 months 1,609,210,508
167,868,566 b) Maturity period of more than 6 months 252,733,218
– 3. Rediscounted Bills –
722,203,925 4. Unmatured Guarantees/Bonds 727,519,521
50,734,064 a) Bid Bonds 14,592,130
549,407,908 b) Performance Bonds 517,756,973
122,061,953 c) Other Guarantee/Bonds 195,170,418
– 5. Unpaid Amount on Investment in Shares –
362,646,027 6. Outstanding Liabilities of Forward Exchange Contracts 1,121,869,816
131,653,164 7. Bills for Collection 772,007,943
778,783,000 8. Acceptance and Endorsements 708,304,325
– 9. Underwriting Commitments –
– 10. Irrevocable Loan Commitments –
1,199,541,357 11. Guarantee against Counter Guarantee of Internationally Rated Banks 1,566,122,062
21,117,092 12. Advance Payment Guarantee 32,185,504
103,200,620 13. Financial Guarantee 64,142,079
28,283,334 14. Contingent Liabilities on Income Tax –
– 15. Others 26,935
5,184,827,000 Total 6,854,121,911
Annual Report and Accounts 2006 - 2007 Standard Chartered 37
Schedule 4.18
Standard Chartered Bank Nepal Limited
Interest Income
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
596,622,321 A) On Loan, Advances and Overdraft 728,588,546
537,977,424 1. Loan and Advances 665,157,608
58,644,897 2. Overdrafts 63,430,938
355,290,743 B) On Investment 326,549,868
355,290,743 1. Government of Nepal Securities 326,549,868
235,714,091 a) Treasury Bills 241,964,494
111,698,880 b) Development Bonds 76,064,703
– c) National Savings Certificates –
7,877,772 d) Special Bonds 8,520,671
– 2. Foreign Securities –
– 3. Nepal Rastra Bank Bonds –
– 4. Debenture and Bonds –
– 5. Interest on Inter Bank Investment –
– a) Financial Institutions –
– b) Other Organisations –
8,172,753 C) On Agency Balances 9,678,419
– 1. Local Banks / Financial Institutions –
8,172,753 2. Foreign Banks 9,678,419
56,477,870 D) On Money at Call and Short Notice 95,180,940
– 1. Local Banks / Financial Institutions –
56,477,870 2. Foreign Banks 95,180,940
173,039,270 E) On Others 251,984,094
– 1. Certificate of Deposits –
1,038,865 2. Inter-Bank / Financial Institutional Loan 838,425
168,331,473 3. Placement with Foreign Banks 244,508,800
3,668,932 4. Others 6,636,869
1,189,602,957 Total 1,411,981,867
38 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.19
Standard Chartered Bank Nepal Limited
Interest Expenses
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
299,923,711 A) On Deposit Liabilities 406,198,800
51,697,797 1. Fixed Deposits 97,955,113
16,768,474 1.1 Local Currency 28,414,408
34,929,323 1.2 Foreign Currency 69,540,705
217,198,600 2. Savings Deposits 257,886,856
191,707,442 2.1 Local Currency 236,783,591
25,491,158 2.2 Foreign Currency 21,103,265
31,027,314 3. Call Deposits 50,356,831
30,695,900 3.1 Local Currency 49,889,586
331,414 3.2 Foreign Currency 467,245
– 4. Certificate of Deposits –
2,109,422 B) On Borrowings 5,337,706
– 1. Debentures and Bonds –
– 2. Loans from Nepal Rastra Bank 1,759,461
2,109,422 3. Inter Bank / Financial Institutions Borrowings 3,578,245
– 4. Other Institutions –
– 5. Other Loans –
1,165,286 C) On Others 1,518,646
1,165,286 1. Premium on Development Bonds 1,518,646
– 2. Others (Forwards) –
303,198,419 Total 413,055,152
Schedule 4.20
Standard Chartered Bank Nepal Limited
Commission and Discount
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
11,423,926 A) Bills Purchased and Discounted 15,980,983
625,226 1. Domestic 523,813
10,798,700 2. Foreign 15,457,170
115,642,505 B) Commission 114,814,745
22,344,272 1. Letters of Credit 20,567,961
35,978,317 2. Guarantees 33,723,655
2,715,172 3. Collection Fees 3,241,033
28,574,803 4. Remittance Fees 28,972,496
25,452,891 5. Credit Cards 28,008,750
– 6. Share Underwriting/Issues –
– 7. Government Transactions –
400,000 8. Agency Commission 200,000
177,050 9. Exchange Fees (Batta Income) 100,850
95,862,381 C. Others 90,411,705
35,815,951 1. Management Fees 22,478,960
13,569,952 2. Loan Processing Fees 19,134,746
12,943,095 3. Ledger and Activity Fees 13,102,630
6,820,341 4. Commission on Travellers Cheque 7,285,526
26,713,042 5. Others 28,409,843
222,928,812 Total 221,207,433
Annual Report and Accounts 2006 - 2007 Standard Chartered 39
Schedule 4.21
Standard Chartered Bank Nepal Limited
Other Operating Income
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
1,639,736 1. Rental on Safe Deposit Locker 2,569,126
6,298,454 2. Issue and Renewals of Credit Cards 8,088,426
3,202,602 3. Issue and Renewals of ATM Cards 4,995,157
9,593,929 4. Telex / T.T. 10,160,004
– 5. Service Charges –
397,000 6. Renewal Fees 534,950
4,310,453 7. Others 2,437,217
25,442,174 Total 28,784,880
Schedule 4.22
Standard Chartered Bank Nepal Limited
Exchange Fluctuation Gain / Loss
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
60,042,189 A) Revaluation Gain 71,982,526
223,429,663 B) Trading Gain (Except Batta) 237,103,978
283,471,852 Total Income (Loss) 309,086,504
Schedule 4.23
Standard Chartered Bank Nepal Limited
Staff Expenses
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
103,053,129 1. Salary 117,313,206
1,145,760 2. Allowances 1,066,141
6,273,376 3. Contribution to Provident Fund 6,810,407
3,796,764 4. Training Expenses 3,737,452
207,112 5. Uniform 149,908
2,362,783 6. Medical 2,952,976
– 7. Insurance –
18,093,331 8. Pension and Gratuity Provision 19,202,355
33,298,427 9. Others 48,546,028
28,066,634 a) Staff Incentive 40,740,877
5,231,793 b) Others 7,805,151
168,230,682 Total 199,778,473
40 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.24
Standard Chartered Bank Nepal Limited
Other Operating Expenses
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
28,944,318 1. House Rent 29,193,981
9,138,278 2. Light, Electricity and Water 10,155,915
14,779,884 3. Repair and Maintenance 12,366,447
5,101,572 a) Building 7,515,063
1,075,536 b) Vehicles 1,444,864
8,602,776 c) Others 3,406,520
6,143,792 4. Insurance 6,461,100
30,318,984 5. Postage, Telex, Telephone, Fax 44,200,157
19,897,740 6. Office Equipment Furniture and Repair 21,022,234
17,662,655 a) Office Equipment and Furniture (Non Capitalised Item) 18,534,723
2,235,085 b) Repairs 2,487,511
10,729,442 7. Travelling Allowances and Expenses 12,061,397
9,668,868 8. Stationery and Printing 10,394,729
1,174,398 9. Periodicals and Books 1,393,270
5,120,141 10. Advertisement 11,124,233
730,622 11. Legal Expenses 1,478,274
215,855 12. Donations 696,001
222,767 13. Expenses Relating to Board of Directors 258,678
140,000 a) Meeting Allowance 200,000
82,767 b) Other Expenses 58,678
1,209,894 14. Annual General Meeting Expenses 916,036
668,912 15. Expenses Relating to Audit 702,000
395,500 a) Audit Fees 452,000
273,412 b) Other Expenses 250,000
– 16. Commission on Remittances –
18,918,412 17. Depreciation on Fixed Assets 18,177,153
– 18. Amortization of Pre Operating Expenses –
– 19. Share Issue Expenses –
25,489,473 20. Technical Services Fees 19,515,585
1,630,745 21. Entertainment 2,768,253
11,541,177 22. Written-off Expenses 2,199,509
8,158,007 23. Security Expenses 10,235,152
– 24. Credit Guarantee Premium –
614,292 25. Commission and Discount 1,159,782
15,770,672 26. Others 11,970,718
7,797,640 a) Charges on Foreign Currency Notes 3,047,372
7,973,032 b) Others 8,923,346
221,086,673 Total 228,450,604
Annual Report and Accounts 2006 - 2007 Standard Chartered 41
Schedule 4.25
Standard Chartered Bank Nepal Limited
Provision for Possible Losses
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
44,729,780 1. Increase in Loan Loss Provision 36,808,665
3,000,000 2. Increase in Provision for Loss on Investments –
– 3. Provision for Non-Banking Assets –
– 4. Provision for Other Assets –
47,729,780 Total 36,808,665
Schedule 4.26
Standard Chartered Bank Nepal Limited
Non Operating Income / (Loss)
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
– 1. Profit (Loss) on Sale of Investment –
1,268,550 2. Profit (Loss) on Sale of Assets 9,235,865
98,705 3. Dividend (Net) 256,215
– 4. Subsidies Received from Nepal Rastra Bank –
– a) Compensation against Losses of Specified Branches –
– b) Interest Indemnity –
– c) Exchange Counter –
65,436 5. Others –
1,432,691 Net Non Operating Income / (Loss) 9,492,080
Schedule 4.27
Standard Chartered Bank Nepal Limited
Provision for Possible Loss Written Back
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
51,528,393 1. Loan Loss Provision Written Back 20,159,844
– 2. Provision against Non-Banking Assets Written Back –
– 3. Investment Provision Written Back –
1,561,883 4. Provision against Other Asset Written Back –
53,090,276 Total 20,159,844
Schedule 4.28
Standard Chartered Bank Nepal Limited
Income / (Expenses) from Extra-Ordinary Activities
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Previous Year This Year
PARTICULARS
Rs. Rs.
1,576,518 1. Recovery of Loans Written Off 1,020,334
– 2. Voluntary Retirement Scheme Expenses –
(3,987,742) 3. Unrecoverable Loan Write Off (Schedule 4.28 A) (5,935,313)
– 4. Other Expenses / Income –
(2,411,224) Total (4,914,979)
42 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.28 (A)
Standard Chartered Bank Nepal Limited
Statement of Loans Written Off
for the period 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
Written off Type of Basis of Loan Approving
S. Initiation made
Types of Loan Amount Security and Valuation of Authority / Remarks
N. for Recovery
Rs. Amount Rs. Security Designation
1. Working Capital Loan – – – – – –
2. Project Loan – – – – – –
3. Fixed Capital Loan – – – – – –
4. Personal Loan 2,679,626 None NA Manager Credit/ Follow up through –
Head Consumer phone calls
Bank & letters
5. Other Loan 3,255,687
a) Credit Card 819,827 None NA Manager Credit/ Phone calls –
Head Consumer & Letters
Bank
b) Gramin 715,114 None NA Manager Credit/ Phone calls –
Prathamik Head Consumer & Letters
Karja Bank
c) Auto 1,720,746 Vehicle Valuation Report Manager Credit/ Phone calls/ –
(8,200,000) from Approved Head Consumer Letters / Visits,
Valuators Bank Vehicle
Repossession,
Auction Notice.
Securities sold by
Auction sale.
Total Loan 5,935,313
Schedule 4.29
Standard Chartered Bank Nepal Limited
Statement of Loans & Advances Extended to Directors / Chief Executive Officer /
Promoter / Employees and Shareholders
as at 16 July 2007 (32 Ashad 2064)
The Statement of amount, included under total amount of Bills Purchased and Discounted, Loans, Advances and Overdraft, provided to the
Directors, Chief Executive Officer, Promoters, Staff, Shareholders and to the individual members of their undivided family or against the
guarantee of such persons or to the organisations or companies in which such individuals are managing agent, are as follows:
Name Of Promoter / Balance upto Previous Year Recovery made This Year Additions Balance as at Ashad end
Director / during the
Principal Interest Principal Interest Principal Interest
Chief Executive Officer Year
Rs. Rs. Rs. Rs. Rs. Rs. Rs.
A) Directors – – – – – – –
B) Chief Executive Officer – – – – – – –
C) Promoters – – – – – – –
D) Staff – – – – – – –
E) Shareholders – – – – – – –
Total – – – – – – –
Note: As per clause 3 of the Nepal Rastra Bank (The Central Bank of Nepal) Directive No. 6, loans given to executive officers and employees
are as per the Bank staff rules and hence not disclosed above.
Annual Report and Accounts 2006 - 2007 Standard Chartered 43
Schedule 4.30
Standard Chartered Bank Nepal Limited
Table of Capital Fund
as at 16 July 2007 (32 Ashad 2064)
Rs. in '000
Previous Year This Year
PARTICULARS
Rs. Rs.
1,606,898 A) Core Capital 1,951,117
374,640 1. Paid Up Capital 413,255
– 2. Share Premium –
– 3. Non-Redeemable Preference Share –
749,281 4. General Reserve Fund 826,510
370,585 5. Cumulative Profit/Loss 504,725
– 6. Capital Redemption Reserve –
74,928 7. Capital Adjustment Fund –
37,464 8. Other Free Reserves (Proposed issue of Bonus Shares) 206,627
– Less: Goodwill –
Investment in excess of Prescribed Limit
Fictitious Assets
Investment in Securities of Companies with Financial Interest
240,344 B) Supplementary Capital 274,167
90,103 1. Loan Loss Provision on Pass Loan 105,931
– 2. Assets Revaluation Reserve –
– 3. Hybrid Capital Instruments –
– 4. Unsecured Subordinated Term Debt –
147,241 5. Exchange Equalization Fund 165,236
– 6. Additional Loan Loss Provision –
– 7. Investment Adjustment Reserve –
3,000 8. Provision for Loss on Investment 3,000
1,847,242 C) Total Capital Fund (A+B) 2,225,284
D) Minimum Capital Fund required to be maintained on the
basis of Risk Weighted Assets
1,360,644 • Capital Fund (@ 11.0 Percent) 1,558,526
680,322 • Core Capital (@ 5.5 Percent) 779,263
486,599 Capital Fund (Excess (@ 4.71 Percent) 666,758
926,576 Core Capital (Excess) (@ 8.27 Percent) 1,171,854
44 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.30 (A)
Standard Chartered Bank Nepal Limited
Table of Risk Weighted Assets
as at 16 July 2007 (32 Ashad 2064)
Previous Year This Year
PARTICULARS Weightage Amount Risk Weighted Amount Risk Weighted
Assets Assets
Rs. Rs. Rs. Rs.
A) On-Balance Sheet Assets
Cash Balance 0% 279,511,285 – 378,422,542 –
Gold (Tradable) 0% – – – –
Balance with Nepal Rastra Bank 0% 749,740,866 – 1,613,757,788 –
Investment in Government Securities 0% 8,635,875,440 _ 7,107,937,303 –
Investment in NRB Bonds 0% – – – –
Fully Secured Loan against own Fixed Deposit Receipt 0% 229,250,401 _ 498,244,846 –
Fully Secured Loan against Government of Nepal Securities 0% 610,145,734 _ 449,790,721 –
Balance with Domestic Banks and Financial Institutions 20% 18,578,714 3,715,743 28,840,738 5,768,148
Fully Secured FDR Loan against
Fixed Deposit Receipt of Other Banks 20% 212,307,230 42,461,446 303,084,261 60,616,852
Balance with Foreign Banks 20% 228,410,558 45,682,112 – –
Money at Call 20% 1,977,271,000 395,454,200 1,761,151,500 352,230,300
Loan against the Guarantee of
Internationally Rated Banks 20% 221,376,890 44,275,378 933,378,704 186,675,741
Other Investments with Internationally Rated Banks 20% 4,190,337,000 838,067,400 5,834,176,000 1,166,835,200
Investment in Shares, Debentures and Bonds 100% 15,343,000 15,343,000 44,943,000 44,943,000
Other Investments 100% _ _ 569,177,161 569,177,161
Loan, Advances and Bills Purchased/Discounted 100% 7,933,199,956 7,933,199,956 8,605,649,826 8,605,649,826
Fixed Assets 100% 417,698,728 417,698,728 428,125,739 428,125,739
All Other Assets (Except Net of Advance Tax Paid) 100% 434,891,776 434,891,776 430,767,831 430,767,831
Net Other Interest Receivable (Gross Interest
Receivable – Interest Receivable on Government
Bonds – Interest Suspense) 100% 151,168,574 151,168,574 178,006,322 178,006,322
Total (A) 26,305,107,152 10,321,958,313 29,165,454,282 12,028,796,120
B) Off-Balance Sheet Items
Bills Collection 0% 131,653,164 _ 772,007,943 –
Forward Foreign Exchange Contract 10% 362,646,027 36,264,603 1,121,869,816 112,186,981
Letters of Credit with Maturity of
Less than 6 Months (Full Value) 20% 1,669,529,915 333,905,983 1,609,210,508 321,842,101
Guarantees Issued against Counter Guarantee
of Internationally Rated Banks 20% 1,199,541,357 239,908,271 1,566,122,062 313,224,412
Letters of Credit with Maturity of
more than 6 Months (Full Value) 50% 167,868,566 83,934,283 252,733,218 126,366,609
Bid Bonds 50% 50,734,064 25,367,032 14,592,130 7,296,065
Performance Bonds 50% 549,407,908 274,703,954 517,756,973 258,878,486
Advance Payment Guarantee 100% 21,117,092 21,117,092 32,185,504 32,185,504
Financial Guarantee 100% 103,200,620 103,200,620 64,142,079 64,142,079
Other Guarantee 100% 122,061,953 122,061,953 195,170,418 195,170,418
Irrevocable Loan Commitment 100% – – – –
Contingent Liability in Respect of Income Tax 100% 28,283,334 28,283,334 – –
All Other Contingent Liabilities
(including Acceptances & Endorsements) 100% 778,783,000 778,783,000 708,331,260 708,331,260
Total (B) 5,184,827,000 2,047,530,125 6,854,121,911 2,139,623,915
Total Risk Weighted Assets 31,489,934,152 12,369,488,438 36,019,576,193 14,168,420,035
Annual Report and Accounts 2006 - 2007 Standard Chartered 45
Schedule 4.31
Standard Chartered Bank Nepal Limited
Key Indicators
FY FY FY FY FY
PARTICULARS Indicators
2002/2003 2003/2004 2004/2005 2005/2006 2006/2007
1. Net Profit/Gross Income Percent 33.71 33.95 34.01 37.06 34.55
2. Earning Per Share Rs. 149.30 143.55 143.14 175.84 167.37
3. Market Value Per Share Rs. 1,640 1,745 2,345 3,775 5,900
4. Price Earning Ratio Ratio 10.98 12.16 16.38 21.47 35.25
5. Dividend (including bonus) on Share Capital Percent 120 110 120 140 130
6. Cash Dividend on Share Capital Percent 110 110 120 130 80
7. Interest Income/Loan & Advances Percent 10.11 8.83 7.43 6.23 6.49
8. Staff Expenses/Total Operating Expenses Percent 18.48 19.51 22.53 24.29 23.75
9. Interest Expenses on Total Deposit and Borrowings Percent 1.35 1.30 1.31 1.31 1.65
10. Exchange Fluctuation Gain/Total Income Percent 15.46 17.24 17.32 15.95 15.44
11. Staff (Statutory) Bonus/Total Staff Expenses Percent 37.22 38.96 37.38 35.83 33.71
12. Net Profit/Loan and Advances Percent 9.09 8.51 6.85 7.63 6.75
13. Net Profit/Total Assets Percent 2.42 2.27 2.46 2.56 2.42
14. Total Credit/Deposit Percent 31.99 31.63 43.49 39.92 43.78
15. Total Operating Expenses/Total Assets Percent 3.32 2.92 3.03 2.69 2.94
16. Adequacy of Capital Fund on Risk Weighted Assets
a) Core Capital Percent 12.25 13.76 13.99 12.99 13.77
b) Supplementary Capital Percent 1.89 1.81 2.07 1.94 1.94
c) Total Capital Fund Percent 14.14 15.57 16.06 14.93 15.71
17. Liquidity (CRR) Ratio 9.07 9.46 8.77 6.86 5.46
18. Non-performing Credit/Total Credit Percent 4.13 3.77 2.69 2.13 1.83
19. Weighted Average Interest Rate Spread Percent 4.11 3.76 3.70 4.10 3.95
20. Book Net-worth Rs. '000 1,368,907 1,495,739 1,582,415 1,754,139 2,116,353
21. Total Shares No. 3,395,488 3,746,404 3,746,404 3,746,404 4,132,548
22. Total Staff No. 275 263 302 345 351
46 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.32
Standard Chartered Bank Nepal Limited
Significant Accounting Policies
Financial Year 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
i) General Information
Standard Chartered Bank Nepal Ltd. (the "Bank") is a limited liability company domiciled in Nepal. The address of
its registered office is G.P.O. Box 3990, Naya Baneshwor, Kathmandu, Nepal. The Bank has a primary listing on the
Nepal Stock Exchange Limited. The Bank is a subsidiary company of Standard Chartered Bank PLC, London.
The Bank carries out commercial banking activities in Nepal.
ii) Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
iii) Statement of Compliance
The financial statements have been prepared in accordance with Nepal Accounting Standards (NAS) issued by the
Nepal Accounting Standards Board (NASB) except interest income, Generally Accepted Accounting Principles, Bank
and Financial Institution Act, 2063, presentation requirement of the directives issued by Nepal Rastra Bank (Central
Bank) and in conformity with the Company Act, 2063.
iv) Basis of Preparation
The financial statements have been prepared on the historical cost basis. The preparation of the financial statements
in conformity with NAS and generally accepted accounting principles, requires the use of certain critical accounting
estimates. It also requires the management to exercise judgement in the process of applying the Bank's accounting
policies.
v) Interest Income
Interest income on loans and advances is recognised on cash basis as per the directive issued by the Central Bank,
which is not in accordance with Nepal Accounting Standards.
Interest income on Investments is recognised on accrual basis.
vi) Commission Income
Income from usance export bills is accounted for on accrual basis whereas earnings from sight bills is accounted
upfront under commission income.
Commission income exceeding Rs. 100,000 earned on guarantees covering more than a year is accounted for on
accrual basis over the period of the guarantee.
vii) Foreign Exchange Transactions
Assets and liabilities denominated in foreign currencies at the Balance Sheet date are translated at mid-point exchange
rates of the Central Bank after adjustment for effective trading rate.
Income realised from the difference between buying and selling rates of foreign currencies is accounted for as trading
gains.
Net differences arising from the conversion of foreign currency assets and liabilities is accounted for as revaluation
gain. In conformity with the Directives of the Central Bank, 25% of the total revaluation gain amounting to Rs.
17,995,632 is transferred to Exchange Fluctuation Fund by debit to Profit and Loss Appropriation Account.
viii) Interest Expense
Interest on deposit liabilities and borrowing from other banks are accounted for on accrual basis.
ix) Loans and Advances, Overdraft and Bills Purchased
Loans and advances, overdrafts and bills purchased include direct finance provided to the customers such as bank
overdrafts, credit card, personal loans, term loans, hire purchase finance and loans given to priority and deprived
sectors. All loans are subject to regular review and are graded according to the level of credit risk and classified as
per the Central Bank's Directives. Loans and advances, overdraft and bills purchased are net of loan loss provisions.
Annual Report and Accounts 2006 - 2007 Standard Chartered 47
x) Staff Loans
Loans and advances to staff granted in accordance with the staff loan scheme are reflected under Other Assets.
xi) Loan Loss Provision
Provision for possible losses has been made to cover doubtful loans and advances, overdraft and bills purchased.
The level of loan loss provision is determined from 1% to 100% on the basis of classification of loans and advances,
overdraft and bills purchased in accordance with the directives of the Central Bank. Further, additional provisions for
possible losses have been made as per the directives issued by Central Bank for the blacklisted / restructured
customers.
xii) Loan & Advances Write off
Unrecoverable loans and advances are written off in accordance with the bylaws of the Bank. The bylaws have been
duly approved by the Central Bank.
xiii) Investments
Investment in Treasury Bills, Government of Nepal Development Bonds and Special Bonds are those, which the Bank
has purchased with the positive intent and ability to hold until maturity. Such securities are recorded at cost or at cost
adjusted for amortisation of premiums or discounts.
Certain investments in shares are held for strategic purpose and are stated at lower of cost or market value after
making adequate provisions in diminution in value, based on prudential norms. Dividend is recognised as income
when the right to receive the payment is established.
Premiums and discounts are capitalised and amortised from the date of purchase to maturity.
All investments are subject to regular review according to the Directives of the Central Bank.
xiv) Fixed Assets
Premises, equipment, furniture and fixtures and vehicles are carried at cost less accumulated depreciation.
xv) Non Capitalised Assets
Vehicles, equipment, furniture and fixtures with a unit value of Rs. 400,000 or less and software costs with a unit value
of Rs. 40,000,000 or less are expensed off in the year of purchase.
xvi) Depreciation
Assets other than freehold land are depreciated at rates based upon their expected useful lives, using the straight-
line method. Costs on improvements and renovation of leasehold premises are depreciated over the remaining period
of the lease.
xvii) Amortisation
Software applications purchased by the Bank, costing greater than Rs. 40,000,000, are amortised over a period of
thirty-six months from the month of purchase.
Licence fees paid by the Bank are amortised over the period of the licence.
xviii) Retirement Benefits
The Bank has schemes of retirement benefits namely Gratuity and Provident Fund. Provision for Gratuity and
Provident Fund is made on accrual basis. Contributions to Approved Retirement Fund are made on a regular basis
as per the Retirement Fund rules and regulations.
xix) Stationery
Stationery purchased for internal consumption is expended at the time of purchase.
xx) Provision for Taxation
Provision for taxation has been made based on the prevailing Income Tax Act, 2058 and amendments thereto from
time to time.
xxi) Non Banking Assets
Non Banking Assets are accounted for as per the directives of Nepal Rastra Bank.
xxiI) Rounding off / previous year figures
The financial statements are presented in Nepalese Rupees, rounded off to the nearest rupee. Where necessary,
amounts shown for the previous year have been reclassified to facilitate comparison.
48 Standard Chartered Annual Report and Accounts 2006 - 2007
Schedule 4.33
Standard Chartered Bank Nepal Limited
Notes to Accounts
Financial Year 17 July 2006 to 16 July 2007 (1 Shrawan 2063 to 32 Ashad 2064)
1. Provision for Bonus
Provision for bonus has been calculated and provided for at 10% of net profit, after making adjustments for loan loss
provision and bonus.
2. Staff Housing Fund
As the terms of service of the staff has a provision for extending housing loans to the eligible staff, a separate housing
fund has not been created as prescribed by the Labour Act, 2048.
3. Tax Settlement Outstanding / Contingent Liability
Inland Revenue Office had completed the assessment of tax return for the Fiscal Year 2001-02 filed by the Bank under
the self-assessment. Additional demand aggregating to Rs. 28,283,334 raised by the tax authorities was disputed by the
Bank and referred to Revenue Tribunal. The Bank filed this case with the Tax Settlement Commission along with the
files for the FY 2002-03 to 2004-05 which were yet to be opened by the tax authorities. The Bank settled the four years
assessments under the agreement with the Tax Settlement Commission formed by Nepal Government and paid Rs.
9,000,000 towards the settlement.
4. Provision for Gratuity
During the year, the Bank has provided Rs. 19,202,355 (Previous Year Rs. 18,093,331) on account of gratuity. Out of
the amount provided, Rs. 15,833,778 has been funded (previous year Rs. 13,482,920) and Rs. 4,060,154 (previous year
4,877,225) has been paid to the staff at the time of separation.
5. Performance Bonus
The Bank's reward programmes recognize world-class performance and behaviour in support of the Bank's values
across all job levels. The reward programmes support and drives our business strategy and reinforces our values. The
Bank believes in giving outstanding rewards to the best performers.
The bank's total reward consists of fixed and variable compensations. Performance Bonus is a variable compensation
based on the country’s, business’ and individual’s annual performance. It is provisioned on the basis of the individual
targets set and paid in line with the actual achievements.
6. Balance with Banks
Balance with Foreign Banks / Financial Institutions have been netted off against the credit balance (Rs. 784 Mio) in two
nostro accounts which represented customer remittances in-transit as of 16th July, 2007, with a corresponding positive
balance with Nepal Rastra Bank. The balance nostro credit (Rs. 570 Mio) has been shown under Other Liabilities. The
transactions have been settled on 17 July 2007.
7. Dividend and Bonus
The Board has recommended 130% dividend (including bonus shares). Out of the total, Rs. 80 to be distributed as cash
and balance as bonus issue in the ration of 1:2 i.e. one bonus share for every two shares held. Part of the capitalisation
has been proposed through utilisation of the existing Capital Adjustment Fund created for the purpose.
8. Reconciliation Status Rs. in '000
PARTICULARS Total Amount < 3 Months >3<9 Months > 9 Months
Branch Adjustments Accounts – – – –
Agency Accounts 1,376,098 1,370,966 5,132 –
The reasons for differences are fully identified and are being addressed in regular course of business.
Annual Report and Accounts 2006 - 2007 Standard Chartered 49
9. Summary of Loans and Advances Disbursed, Recovered and Principal and Interest Written-off during the Year
Rs. in '000
PARTICULARS Amount
Loans Disbursed 6,297,723
Loans Recovered 4,674,260
Loans Written-off 5,935
Interest Written-off –
10. Summary of Changes in Deposits Liabilities Rs. in '000
Balance as at Received/ Balance as at
PARTICULARS
16/07/2006 (Withdrawn) 16/07/2007
Current and Margin Accounts 5,191,359 89,276 5,280,635
Saving Account 14,597,674 646,711 15,244,385
Call Deposits 1,135,692 (210,181) 925,511
Fixed Deposits 2,136,307 1,060,183 3,196,490
Total 23,061,032 1,585,989 24,647,021
11. Weighted Average Interest Spread
PARTICULARS Rate %
Average Rate of Credit and Investments 5.66
Average Rate on Deposits 1.71
Net Spread 3.95
12. Particulars of Amortised Expenses yet to be Expensed Off Rs. in '000
PARTICULARS Amount
Software Costs –
Licence Fees 1,587
Premium on Development Bonds 22,642
Total 24,229
13. Summary of Concentration of Exposure Rs. in '000
Loans & Advances Deposits &
PARTICULARS Contingent
and Bills Borrowings
Total Amount as on 17 July 2007 10,790,148 24,647,021 6,854,122
Highest exposure to Single unit 703,316 1,246,835 541,047
Highest % of exposure to Single unit 6.52 5.06 7.89
50 Standard Chartered Annual Report and Accounts 2006 - 2007
14. Classification of Assets and Liabilities based on Maturity Figures in Million Rs.
PARTICULARS 1-90 91-180 181-270 271 Days Over Total
Days Days Days – 1 Year 1 Year
a) Assets
1. Cash Balance 378 – – – – 378
2. Balance with Banks 1,642 – – – – 1,642
3. Investment in Foreign Banks 1,953 566 2,607 3,039 – 8,165
4. Government Securities 790 2,193 1,255 2,034 836 7,108
5. Nepal Rastra Bank Bonds – – – – – –
6. Inter Bank Lending – – – – – –
7. Loans, Advances & Bills Purchased 3,290 697 852 614 5,050 10,503
8. Other Assets 633 – – – 168 801
Total Assets 8,686 3,456 4,714 5,687 6,054 28,597
b) Liabilities
1. Loans and Borrowings 400 – – – – 400
2. Current Deposits 1,109 – – – 4,172 5,281
3. Saving Deposits 3,354 – – – 11,890 15,244
4. Fixed Deposits 1,236 539 845 552 950 4,122
5. Debentures – – – – – –
6. Other Liabilities, Capital & Reserves 1,433 – – – 2,117 3,550
Total Liabilities 7,532 539 845 552 19,129 28,597
Net Financial Assets 1,154 2,917 3,869 5,135 (13,075)
Cumulative Net Financial Assets 1,154 4,071 7,940 13,075 –
15. Statement of Age-wise Agency Account Reconciliation Pending Items Rs. in '000
PARTICULARS Total Amount Upto 1 Year 1 to 3 Years Above 3 Years
Agency Accounts – – – –
16. Borrowing by Bank against the collateral of own assets is Nil.
Annual Report and Accounts 2006 - 2007 Standard Chartered 51
Nepal Rastra Bank's Approval and Directions
Nepal Rastra Bank has granted permission to publish the Financial Statements of the Bank for
the Fiscal Year 2063/064 along with the following directions vide Letter No. Bai. Su. Bi. / Offsite/AGM
03/064/065 dated 2064/06/09:
Proposed amount of Rs. 74.9 Million from Capital Adjustment Fund created by the Bank in the past
years to be debited in the said fund account and transferred to Proposed Bonus Shares through Profit
and Loss Appropriation Account and other Schedules to be changed accordingly while publishing the
accounts.
52 Standard Chartered Annual Report and Accounts 2006 - 2007
MANAGEMENT COMMITTEE
Sujit Mundul
Chief Executive Officer
Anurag Mishra Anju Sharma Sunil KC
Head - Client Relationships Head - Consumer Banking Head - Global Markets
Rakhi Singh Sudesh Khaling Bina Rana
Chief Financial Officer Chief Information Officer Head - Human Resources
Gopi Bhandari Krishna K Bhattarai Diwakar Poudel
Senior Manager - Credit Head - Legal and Compliance & Head - Corporate Affairs
Company Secretary
CLIENT RELATIONSHIPS
Gorakh Rana Rajib Giri Anil K Shrestha Resta Jha
Senior Relationship Manager Senior Relationship Manager Senior Relationship Manager Senior Relationship Manager
Development Organisations Financial Institutions
Arun Devkota Sharad Tegi Sudesh Upadhyaya Pragyawati Shakya
Relationship Manager Relationship Manager Business Development Manager Relationship Manager
Transaction Banking
Bishnu Pokharel
Relationship Manager
Biratnagar
CONSUMER BANKING
Deepak KC Dambar B Saru Sudhir Sharma Pushpa Rana
Head - Shared Distribution Value Centre GM Value Centre GM Head - Priority Banking
Mortgage & Auto Credit Card & Personal Loans
Bobby Gadtaula Raman Pant Kishoree Manandhar Pranav Thakur
Branch Manager Branch Manager Head Credit Branch Manager
Lazimpat Naya Baneshwore Consumer Banking Lalitpur
Sanju Shrestha Sanjeev Mishra Probin Acharya Vishnu Manandhar
Manager Branch Manager Branch Manager Branch Manager
UN Counter Biratnagar Lakeside & New Road Hetauda
Pokhara
Dhan Thapa Raj Kumar Gurung Netra Subedi
Branch Manager Branch Manager Branch Manager
Bhairahawa & Butwal Dharan Nepalgunj
AUDIT & ASSURANCE SHARE OPERATIONS
Shobha B Rana Ujjwal Dixit
Country Operational Risk & Assurance Senior Officer
Mananger (CORAM) and Head - Internal Audit
Annual Report and Accounts 2006 - 2007 Standard Chartered 53
Note:
54 Standard Chartered Annual Report and Accounts 2006 - 2007
Branch Addresses
Naya Baneshwor Bhairahawa
Head Office P. O. Box 14, Budha Chowk
P.O.Box 3990 Colony, Burmeli Tole
Kathmandu Bhairahawa Siddhartha Nagar
Tel : 977-1-4782333, 4783753 Tel : 977-71-524029
Fax : 977-1-4780762 Fax : 977-71-524039
SWIFT : SCBLNPKA Hetauda
Lazimpat Bank Road,Hetauda-4
P.O.Box 3990, Lazimpat Makwanpur
Kathmandu Tel : 977-57-524972, 523019
Tel : 977-1-4418456 Fax : 977-57-525695
Fax : 977-1-4417428 Butwal
Lalitpur Milan Chowk, Butwal
P.O. Box 3990 Municipality-11, Rupandehi
Jawalakhel, Lalitpur Tel : 977-71-546832
Tel : 977-1-5540566, 5540544 Fax : 977-71-546882
Fax : 977-1-5523266 Nepalgunj
Biratnagar Surkhet Road, Ward No-13
P.O.Box 201 Nepalgunj, Banke
Main Road, Biratnagar-3 Tel : 977-81-525514
Tel : 977-21-528983 Fax : 977-81-525515
Fax : 977-21-528982 UN Counter
Pokhara UN Building, Lalitpur
P. O. Box 08, Tel : 977-01-5537134
Lakeside Baidam, Pokhara Fax : 977-01-5540512
Tel : 977-61-520102, 521746 B.P. Koirala Institute of
Fax : 977-61-520318 Health Sciences, Dharan
Pokhara Tel : 977-25-530481
P. O. Box 08, New Road Fax : 977-25-530481
Pokhara British Gurkhas PPO
Tel : 977-61-523875, 536230 Pokhara
Fax : 977-61-531676
Tel : 977-61-440517
Dharan Fax : 977-61-440517
Panna Kamala Complex Manipal Counter
Ward No.: 7/100ka
Buddha Marga, Dharan-7 Manipal Hospital, Fulbari
Tel : 977-25-530980, 520505 Tel: 977-61-526416
Fax : 977-25-530981
24 HOUR ATM Sites
Kathmandu Lalitpur
Thamel Pulchowk
Kathmandu Guest House and Standard Chartered Bank
Arcadia Building Nepal Ltd.
Near Yin Yang Restaurant Pulchowk
New Road Near UN Complex
Bishal Bazar, Shop # 88 Mangal Bazar ATM
Opposite Hotel Classic Mangal Bazar, Patan
Kamaladi
Kashtamandap Departmental Store
Dharan
Lazimpat BP Koirala Institute of
Standard Chartered Bank Nepal Ltd. Health Sciences
Naya Baneshwor
Standard Chartered Bank Nepal Ltd.
World Trade Center
Tripureshwor
Boudha ATM
Boudha
Pokhara
Lakeside
Hotel Snowland and
Standard Chartered Bank Nepal Ltd.
New Road
Standard Chartered Bank Nepal Ltd.
Seeing is Believing , Standard Chartered's community investment programme, has already raised enough funds to contribute
to one million sight restorations by World Sight Day 2007. On World Sight Day 2006, we announced our next and most
ambitious plan:
To raise $ 10 million by World Sight Day 2010, to help make a difference to the lives of 10 million people across 20 countries.
We will continue to help people with cataracts as well as broaden our approach to help tackle other causes of preventable
blindness. In addition to helping reverse avoidable blindness, the project will engage with programmes aimed at preventing
vulnerable people from losing their sight through education and community based projects.
In Nepal, under this initiative, the Bank and its staff have been instrumental in restoration of sight to 2,600 people through
donations and fund raising activities. This has been achieved through sponsoring of cataract operations at eye camps
conducted by hospitals in various parts of the country.
Give someone the power of sight today.
High Performance Banking
www.standardchartered.com
