Annual Report 2014-2015

Driving investment, trade and the creation

of wealth across Asia, Africa and the Middle East

29th Annual General Meeting

About us

Standard Chartered Bank Nepal Limited has been

in operation in Nepal since 1987 when it was initially

registered as a joint-venture operation. Today the Bank

is an integral part of Standard Chartered Group having

an ownership of 75% in the company with 25% shares

owned by the Nepalese public. The Bank enjoys the

status of the largest international bank currently operating

in Nepal.

We are a leading international banking group, with more

than 84,000 employees and a 150-year history in some of

the world’s most dynamic markets. We bank the people

and companies driving investment, trade and the creation of

wealth across Asia, Africa and the Middle East. Our heritage

and values are expressed in our brand promise, Here for

good.

Standard Chartered PLC is listed on the London and Hong

Kong Stock Exchanges as well as the Bombay and National

Stock Exchanges in India.

With 15 points of representation, 23 ATMs across the

country and more than 430 local staff, Standard Chartered

Bank Nepal Ltd. is serving its clients and customers through

an extensive domestic network. In addition, the global

network of Standard Chartered Group enables the Bank to

provide truly international banking services in Nepal.

Standard Chartered Bank Nepal Limited offers a full

range of banking products and services to a wide range

of clients and customers representing individuals, mid-

market local corporates, multinationals, large public sector

companies, government corporations, airlines, hotels as well

as the Development Organisation segment comprising of

embassies, aid agencies, NGOs and INGOs.

The Bank has been the pioneer in introducing ‘client

focused’ products and services and aspires to continue

leadership in introducing new products. It is the ﬁrst Bank in

Nepal to implement the Anti-Money Laundering policy and

to apply the ‘Know Your Customer’ procedure on all the

customer accounts.

Corporate Social Responsibility is an integral part of

Standard Chartered’s ambition to become the world’s

best international bank and is the mainstay of the Bank’s

values. The Bank believes in delivering shareholder value in

a socially, ethically an environmentally responsible manner.

Standard Chartered throughout its long history has played

an active role in supporting those communities in which

its customers and staff live. It concentrates on projects

that assist children, particularly in the areas of health and

education. The Bank is also actively engaged with the

communities in raising awareness around Financial Literacy.

Subsequent to the devastating earthquake of April and May

2015, the Bank is engaging with its disaster relief partner

Habitat for Humanity in undertaking its rehabilitation and

reconstruction project.

Standard Chartered launched two major initiatives in 2003

under its ‘Believing in Life’ campaign- ‘Positive Living’ and

‘Seeing is Believing’. Various activities and initiatives under

this banner are ongoing in Nepal.

For further information please visit

www.sc.com/np

/StandardCharteredNP

Cover Photo: An evening view of Maitighar-Koteshwor road, Kathmandu.

Auditor’s Report 41

Balance Sheet 42

Proﬁt & Loss Account 43

Proﬁt & Loss Appropriation Account 44

Statement of Changes in Equity 45

Cash Flow Statement 46

Schedules 47

Signiﬁcant Accounting Policies 78

Notes to Accounts 81

Disclosure as per Bank’s disclosure policy 91

Nepal Rastra Bank’s Approval and Directions 96

Five Years Financial Summary 97

Corporate governance

Strategic Report

Company overview

Corporate governance Financial statements and notes

What’s inside this report

Financial statements and notes

Performance Highlights 02

Operational Overview 03

Chairman’s Statement 04

CEO & Director’s Report 10

02-10

16-40

41-97

Our Approach to Corporate Governance 16

Additional Information 26

Board of Directors 28

Management Team 30

Sustainability 32

Our People 38

Standard Chartered Bank Nepal Ltd- Branches 40

Standard Chartered Annual Report 2014-2015

Performance highlights

Executing our refreshed strategy

Total Shareholders Equity

(Rs. Million)

Prot After Tax (Rs. Million)

Earning Per Share (Rs.)

Return on Total Assets (In %)

Market Value Per Share (Rs.)

Net Worth Per Share (Rs.)

3,678

4,122

4,618

5,088

2010/11

2011/12

2012/13

2013/14

5,949

2014/15

1,119

1,169

1,218

1,337

2010/11

2011/12

2012/13

2013/14

1,290

2014/15

69.51

72.60

65.70

65.47

2010/11

2011/12

2012/13

2013/14

57.38

2014/15

228

256

249

2010/11

2011/12

2012/13

2013/14

265

2014/15

1,800

1,799

1,820

2,799

2010/11

2011/12

2012/13

2013/14

1,943

2014/15

2.55

2.80

2.67

2.51

2010/11

2011/12

2012/13

2013/14

1.99

2014/15

Standard Chartered Annual Report 2014-2015

Operational overview

Strong foundation

Standard Chartered has continued to deliver consistent,

diverse and sustained growth while investing to underpin future

momentum and building balance sheet resilience.

Financial highlights

Operating Income

Capital Adequacy

Points of representation

n Stable income and operating

proﬁt despite a scenario of

margin compression

n Broad based and diversiﬁed

income growth in both Retail

Banking and Corporate &

Institutional Clients

n Conscious decision to invest to

underpin future growth in both

the Businesses

Operating Proﬁt

Rs.

Return on equity

Employees

Total Assets

Dividend

Non-ﬁnancial highlights

Operational highlights

2,928m

13.10%

1,827m

21.69%

433

64,927m

44.21%

n Disciplined and proactive

approach to risk management

in Retail Banking and Corporate

& Institutional Clients

n Diverse, liquid, well capitalized

and robust balance sheet

composition

n Strong market capitalization of

~ Rs. 44 Billion reﬂecting high

shareholder conﬁdence

Company overview

Standard Chartered Annual Report 2014-2015

Chairman’s statement

Well positioned to drive further value for shareholders

On behalf of the Board of Directors of the Bank, I take this

opportunity to report that Standard Chartered Bank Nepal

has put up a restrained performance during the Financial Year

2014/15. The year proved challenging primarily because of

persistently low interest rates, surplus liquidity, low volatility,

some regulatory implications and, towards the end of the

ﬁnancial year, devastating earthquake leading to change in

market dynamics. It was a challenging year, but it was also a

year when we took decisive action to refocus our strategy and

to reposition the Bank for the future.

In our assessment, FY 2014/15 remained satisfactory from the

socio-political perspective; a sense of urgency was seen for

accelerating the growth momentum. Under the circumstances,

your Bank invested cautiously in enriching product suite and

services; the focus was also made in enhancing skills of our

people. The Bank continued to stick to the basics of good

banking and followed its strategy to grow and deepen long-

term relationships with its clients and customers.

As we see it, the Bank is fully positioned to take advantage of

the opportunities in our markets. We remain optimistic about

our future and our ability to perform and grow. Our strengths

lie in our uniqueness and networking capability; our worldwide

presence provides efﬁciency in enabling trade and investment

around the globe. We continue to fulﬁl our social purpose of

driving Nepal’s economic growth by assisting our clients and

customers in many ways.

We are acutely aware of the impact of our performance on you.

We remain focused on the interest of shareholders and other

stakeholders. Our priority has been to maintain well capitalised,

highly liquid and diverse balance sheet; this will continue. Our

focus also remains in delivering proﬁtable, sustainable growth

within our risk appetite. We are conscious of our need to tighten

control over costs. All these steps will help us keep our earnings

resilient and the balance sheet, robust.

Our brand promise ‘Here for good’ signiﬁes how we operate

as a bank and conduct our business. It is the essence of what

we are all about; we are there for the long run and remain

by the side of our clients and customers through good and

bad times. We stand for the progress and prosperity of the

community and society around us; we strive to do the right

things in the right manner. Our brand is deeply embedded in

our community and we are making all efforts to remain the best

brand in this market.

Results – A Synopsis

Financial Highlights

n Net Proﬁt after tax was down by 3.5 percent to Rs. 1.290

billion compared to Rs. 1.337 billion in the previous year.

n Earnings per share has decreased by Rs. 8.09 to Rs. 57.38

due to increase in number of shares and decrease in proﬁts.

n Risk Assets increased by 6.4 percent to Rs. 28.02 billion

compared to Rs. 26.33 billion last year.

n Deposits increased by 23.7 percent to Rs. 57.29 billion

compared to Rs. 46.30 billion last year.

Bank’s Performance

The Bank has been delivering a reasonable performance year

on year. The Bank has contributed an amount of Rs. 594

million to the Government Exchequer as compared to Rs. 574

million last year on account of corporate tax.

In accordance with the statutory and regulatory requirements,

the Board recommends a transfer of Rs. 24 million to

Exchange Fluctuation Reserve and transfer of Rs. 258 million

into the General Reserve Fund. Further, the Board has

proposed the dividend of 19.21 percent for which Rs 432

million has been appropriated towards dividend. Board has

also proposed to increase the capital by issuing 25 percent

bonus share for which Rs 562 million has been allocated from

current year proﬁt.

Our Tier 1 and Tier 2 Capital Adequacy Ratios were 11.67

percent and 1.43 percent respectively with an overall ratio

of 13.10 percent, post appropriations. Our capital position is

more than adequate to meet our business needs and exceeds

the current Nepal Rastra Bank’s capital adequacy requirement

under the Basel II capital accord and also exceeds the

international norms.

Company overview

In accordance with the statutory

and regulatory requirements,

the Board recommends a

transfer of Rs. 24 million to

Exchange Fluctuation Reserve

and transfer of Rs. 258 million

into the General Reserve Fund.

Standard Chartered Annual Report 2014-2015

Economic Environment

Global Scenario

2015 was not an encouraging year for the world economy.

While the lack of momentum in the world economy is likely

to persist in 2016, market sentiment is expected to improve

as markets make efforts to readjust expectations. This should

provide time to regroup and prepare for a potential rebound in

conﬁdence and emerging-market (EM) performance. Global

growth forecast for 2016 is expected to remain at ~2.5 percent.

US growth is expected to decelerate to 1.0 percent in 2016.

Given the current environment, the Federal Reserve is less

likely to hike interest rates again. While acknowledging an

instance of one more rate hike, it can be expected the cycle

to remain shallow. Monetary policy is less likely to boost the

economy, but low rates should buoy market sentiment.

Euro area is expected to grow by 1.4 percent in 2016;

this is likely to prove inadequate as Europe is in prolonged

stagnation. Monetary policy alone so far, has seen to be less

effective to boost sufﬁcient growth. Furthermore, negative

interest rates could increase pressure on European banks.

The Euro area in particular needs ﬁscal stimulus.

China’s willingness to use ﬁscal policy to ensure growth above

6.5 percent is signiﬁcant and positive. Although China does

not face the monetary policy limitations as the West does,

monetary policy alone may not prove to be enough to achieve

the growth target. Analysts believe that two factors viz. the

way China communicates its policy and the other, how China

manages its currency and capital outﬂows will remain crucial

for international investors.

India’s growth forecast for FY 2016/17 is expected to remain

at 7.4 percent reﬂecting a weaker external sector outlook and

persistent domestic headwinds. While India is a domestically

oriented economy, it is not immune to a global slowdown,

particularly one led by the US and the EU. These economies

together account for about 35% of India’s merchandise

exports, 80% of its services exports and 40% of inward

remittance ﬂows.

Given the expectations on the US and China, it is expected

that the market sentiment and conﬁdence will improve in

2016, particularly for emerging markets – even with a ﬂat

global growth.

Nepal

The GDP growth remained lower in 2014/15 compared to

the previous year because of the contraction in the growth

rate of agriculture sector due to delayed monsoon and the

negative impact of the April 25 earthquake and subsequent

aftershocks. According to the preliminary estimates of the

Central Bureau of Statistics, the real GDP grew by 3.0 percent

at basic price and 3.4 percent at producers’ price in the

review year. Such growth rates were 5.1 percent and 5.4

percent respectively in the previous year.

According to the Post Disaster Needs Assessment (PDNA)

report published by the National Planning Commission, the

earthquake has made a total loss of about Rs. 706 billion to

the overall economy. The destruction of the earthquake is

estimated to be 57.8 percent in the social sector, 25.2 percent

in the manufacturing sector, 9.5 percent in the infrastructure

sector and 7.5 percent in the cross cutting issues. The total

destruction of the earthquake is accounted one third of the

real GDP of ﬁnancial year 2014/15. The destruction made

a loss of Rs. 36.0 billion in the GDP resulting to around 1.6

percent shrinkage in the overall economy.

The balance of payment recorded a surplus of Rs. 144.85

billion in 2014/15 compared to surplus of Rs. 127.13 billion

in the previous year. Export decreased by 7.3% in 2014/15

which had increased by 19.6% the previous year. This is

due to lack of enhancement in productive capacity and the

development of relevant infrastructures. Imports increased by

8.4% in 2014/15, against an increase of 28.3% recorded for

the previous year. The growth in imports remained low mainly

due to the decline in the price of petroleum products as well

as the slowdown in imports of gold, betel-nut, coal, crude

soya bean oil, among others.

The trade deﬁcit as at mid July 2014/15 increased by 10.8

percent compared to a rise of 29.7 percent recorded during

the same period previous year. Due to the rise seen in growth

of imports and a corresponding fall in exports, the ratio of

export to import declined to 11.0 percent during the review

period as compared to 12.9 percent recorded for the same

period previous year.

The current account posted a surplus of USD 1.07 billion as

on mid July 2014/15, compared to a surplus of USD 0.91

billion posted in the previous year. The increase in surplus

in the current account was primarily due to low growth of

goods imports, increase in remittance inﬂows and grants,

Standard Chartered Annual Report 2014-2015

Chairman’s statement

among others. Remittance inﬂows in Nepal during this period

increased by 13.6 percent to USD 6.19 billion as compared to

a growth of 25.0 percent recorded during the previous year.

The Gross foreign exchange reserves grew by 17.4 percent

to USD 8.15 billion as at mid July 2014/15. On the basis of

existing trend of imports, current level of reserves is sufﬁcient

for ﬁnancing merchandise imports of 13.0 months and

merchandise and service imports of 11.2 months.

As on mid July 2014/15, the wholesale price index increased

by 6.1 percent as against an increase of 8.3 percent recorded

during the same period previous year. Similarly, the Consumer

Price Index increased by 7.2 percent, as against an increase

of 9.1 percent recorded during the previous year.

Nepalese currency depreciated by 5.2% vis-à-vis US Dollars

as at mid-July 2015 against the level recorded during the

same period previous year. Nepalese rupee has a ﬁxed parity

of 1:1.6 with the Indian rupee.

The Year Ahead

FY 2014/15 was a year of accelerated political activities which

resulted in promulgation of the new Constitution of Nepal.

The country faced signiﬁcant challenges right before and

after the promulgation of the new Constitution because of the

prolonged agitation going on in the Terai region. The business

environments as well as the normal life of people were further

impacted by the obstruction created in movement of essential

supplies including fuel from the customs points adjoining

India. Together with the devastating earthquake that hit the

country in April and May, the business environment remained

extremely challenging which have had a bearing in our

performance.

Under the circumstances, your Bank delivered a restrained

performance during ﬁnancial year 2014/15. Steady accretion

of risk assets in the balance sheet could not reﬂect in bottom

line growth mainly because of prolonged low interest rate

regime, surplus liquidity and low volatility. We, however,

are conﬁdent that the coming years will be stimulating and

productive for business opportunities. We continue to remain

in good shape to support our clients and customers, and

consider that the growth opportunities will remain compelling

in our markets. Our aim remains to exploit our competitive

strengths and opportunities and drive value for our

shareholders. In doing this, we will be guided by our strategy

by continuing to invest in our businesses. We are mindful that

there are signiﬁcant factors impacting our performance which

cannot be ignored; the imperative to maintain our capital

levels across the industry; the investment need in enhancing

our technological capabilities, and the need to change the

shape of our business to ﬁt the demands of the current

economic and regulatory landscape. Our actions will be

directed towards maintaining the long-term prospects of the

business.

We have identiﬁed a number of priority areas for the Bank

to reshape the business to restore performance and to fully

realise the opportunities in our markets; recent reorganisation

of our Retail Bank structure is one of them. As our markets

develop and get enriched, they will continue to change

and it is our aim to embrace the changes and align them

to our business models. We are stepping up the pace of

digitisation, automating and re-engineering key processes

and standardising technology platforms. The only way we

can manage the ever - increasing complexity of regulation

efﬁciently is through technology, so we are prioritising

investment in this area to achieve sustainable improvement

in both compliance and productivity. This is how we can

continue to remain successful. Our emphasis is on organic

growth with a long-term perspective and in building diverse

income streams. These actions will help us to get back to a

trajectory of sustainable and proﬁtable growth in delivering

returns above our cost of capital and driving the share price.

Our balance sheet is in good shape: diversiﬁed, well

structured and liquid. We have been taking a conservative

approach in managing the balance sheet, maintaining a strong

liquidity and in maintaining the credit quality. This will pay

dividend to us in the medium to long run.

Company overview

The recently completed

reorganisation of our business

will make a difference, enabling

us to put sharper focus on

the key strategic priorities,

optimising the deployment of

capital and investment spend.

Standard Chartered Annual Report 2014-2015

The year 2015/16 looks ahead to be a good year for the

Bank; we have started with a good momentum. We own a

strong balance sheet and have a strong deal pipelines under

our Corporate & Institutional business. The balance sheet

has ample space to capture accelerated growth in the Retail

business. Rapid growth under a scenario of political stability

can be predicted.

The performance of agriculture sector is critical to our

economy; based on what we have experienced so far, we

can expect a mixed agricultural yield this year. However,

the changing trend of using modern agricultural tools and

technology and improvement in distribution of inputs &

services, we can assume that the sectorial contribution from

agriculture on the GDP is likely to improve. Similarly, an

improvement in operating and socio political environment is

also likely to beneﬁt the industrial sector. National agenda

of `Rebuilding Nepal’ after the earthquake is likely to provide

impetus to the industrial sector by fuelling demand for

their outputs. Thrust of the government for accelerating

infrastructural spending is further likely to invigorate the much

needed growth momentum. All these will go in providing

respite to the economy. In addition, we also expect stability

in remittances ﬂow from the Middle East and South East Asia,

which will further help in keeping the national economy active.

Although the Tourism sector has been impacted for the short

term, in the medium to long term, we are hopeful that Nepal

will continue to remain a preferred destination.

Corporate Governance

Governance across the Bank is robust. Strong governance

is also integral to our long-term success. As you may all

appreciate, banking is a relationship business, we highly value

the relationships that we have with our people, regulators,

clients and the other stakeholders; all efforts will be made to

further deepen this relationship.

We are committed to ensuring the integrity of governance. In

addition to the established committees, we have committees

on Diversity and Inclusion, Health and Safety, the Environment

and Community Partnership. The initiatives taken by these

committees have added value to our stakeholders and

delighted them. We believe good governance provides clear

accountabilities, ensures strong controls, instils the right

behaviours and reinforces good performance.

The Bank has been following the Risk Management Principles

and Practices of Standard Chartered Group which are in line

with the latest international best practices in the area of risk

management in banks.

The management of credit, cross-border, market, liquidity,

operational, reputational and other risks are inherent to the

bank’s business. The risk management principles followed

by the Bank include balancing risk and return, responsibility

and accountability, anticipation of risk and competitive

advantage from effective risk management. Similarly, the Bank

follows risk management governance structure of Standard

Chartered Group covering the Board, Audit Committee,

Risk Committee, Executive Committee, Business/Functional

level risk management etc. Roles and responsibilities for risk

management are deﬁned under a Three Lines of Defence

model i.e. business/operations as ﬁrst line of defence, risk

function under the business/operations as second line of

defence and the independent internal audit function reporting

to the Audit Committee as the third line of defence. In this way,

the risk management process involves active participation

from Board level to the business/operational level ensuring an

effective system of risk management in the bank.

The world is currently facing a new threat – terrorism.

Globalisation of standards for Anti-money laundering and

countering the ﬁnancing of terrorism is required if Governments

have to collaborate to ﬁght ﬁnancial crime which includes the

ﬁnancing of terrorism. Nepal is no longer isolated from these

risks; we believe the ﬁnancial sector should be better equipped

to manage the implementation of FATF guidelines, CDD and

AML standards. Risks around Correspondent banking are

bound to increase, making this a high risk and costly channel,

unless banks are prepared to invest in infrastructure and staff

to manage and oversee client accounts.

Mr. Anurag Adlakha, Mr. Sujit Mundul and Mr. Joseph Silvanus

continue to represent Standard Chartered Grindlays Australia

and Mr. Krishna Kumar Pradhan as Professional/Independent

Director continues to be in the Board of the Bank. Ms. Amrit

Standard Chartered Annual Report 2014-2015

Chairman’s statement

We can achieve rapid growth under

a scenario of political stability;

and the near future seems to be

providing that opportunity for

us. Under the situation, ﬁnancial

services industry is likely to grow

and develop into a strong pillar of

our national economy.

Kumari Thapa continues to be in the Board to represent the

public shareholders of the Bank. I, Sunil Kaushal, continue to

represent the Standard Chartered Bank, U.K. in the Board of

Standard Chartered Bank Nepal Limited.

As on the date of this report, the Board is made up of the Non-

Executive Chairman, one Executive Director and four Non-

Executive Directors of which one is Professional /Independent

Director appointed as per the regulatory requirement and one

of them is the Public Director representing General Public

shareholders as per the provisions of the Company Act.

In Conclusion

Our performance priorities are clear. We have taken range of

actions in response to the way our market has changed. We

expect to get back to a trajectory of sustainable and proﬁtable

growth in boosting our performance. We ﬁrmly believe that

we can fulﬁl our aspiration to bank the people and companies

driving trade, investment and the creation of wealth.

We expect our market to do better in year 2015/16. The

political and social transitions do have a signiﬁcant impact on

business conﬁdence and we are positive about our market,

particularly after the progress achieved in the constitution

writing. This will help in ending the transition and in focusing

in the nations’ economic growth. The drivers of economic

growth viz. demographics, urbanisation and growth in

middle class as well as infrastructural investments, all stand

promising for us. However, there is an urgent need to tackle

critical challenges hindering our growth viz. power shortages,

widening trade deﬁcit and the labour issues.

You will agree that the review period was not very encouraging

for us primarily because of prevalence of excess liquidity in the

market, pressure on margins, lower reinvestment yields and

low volatility. The natural calamity that struck towards the end

of the year put further pressure on our operating momentum.

However, we have opened the new ﬁnancial year with renewed

hope and self assurance that the demand for ﬁnancial services

is rising rapidly. Our challenge is to capture these opportunities

in a disciplined, return-focused way to drive shareholder value.

We do have a superb client franchise, a unique network and

a strong balance sheet. More importantly, we have fantastic

team of people - professional and collaborative, and truly

believing in, and committed to being, Here for good. Our

focus thus is directed in building sustainable, long-term

relationships with our clients and being their trusted adviser

and supporting their different needs. We operate with

sophisticated technology to provide products and services

of international standards to our clients; and our aim is to

continuously improve upon it. We are grateful to our clients &

customers, shareholders and other stakeholders for believing

in us; we value their trust.

I would also like to extend my sincere gratitude to the Ministry

of Finance and Nepal Rastra Bank for their invaluable support

and guidance provided to us. I appreciate their commitment in

raising the bar for ﬁnancial industry in Nepal. I also extend my

gratitude to our investors for their strong faith and support.

Our people are much sought after by our competition, and

we are acutely conscious of the importance of retaining

and attracting the best talent and building their learning and

development capabilities. In line with our past practice, we will

reward our people for good performance as well as for their

good behaviours. We are a Bank with strong performance

and values culture. We continuously raise the bar on

conduct & compliance and reﬂect of being a force for good in

society. I thank all our staff for their hard work, sincerity and

commitment.

Bank’s Diversity and Inclusion (D&I) Council is playing an

important role in embedding our D & I agenda to address the

different strands of diversity in our work-force, our products

and our community. This will continue to remain our key

agenda.

I am proud of what we have achieved so far and am conﬁdent

about what the future holds for this great institution. We have

demonstrated resilience and an ability to adapt and reinvent.

We are in good shape to support our clients & customers and

remain focused on delivering proﬁtable and sustainable growth

to drive further value for our shareholders. We believe that

the drivers of economic growth in our markets remain strong,

and the demand for ﬁnancial services is rising rapidly. We are

therefore conﬁdent in delivering enhanced performance in the

years to come.

Sunil Kaushal

Chairman

Company overview

Standard Chartered Annual Report 2014-2015

The Bank continues to perform well and remains in good shape.

The CEO & Director presents this report together with the

Balance Sheet and statement of Proﬁt and Loss for the year

ended 16 July 2015. The report is in conformity with the

provisions of the Companies Act, 2063 and Bank & Financial

Institution Act, 2063 including the directives issued by Nepal

Rastra Bank.

It is my pleasure to report that the Bank has delivered yet

another year of stable performance. Financial Year 2014/15

remained a challenging year in terms of socio-political

environment. Nevertheless, because of our consistent

and focused strategy, we have been able to deliver on

our promises. In the backdrop of a challenging business

environment, a slight fall in the net proﬁt after tax of 3.5% to

Rs. 1.29 billion, can be considered satisfactory. This has been

achieved by persistent focus on cost and risk management

while pursuing business growth.

There is an increase in the volume of risk assets by 6.4 % to

Rs. 28.02 billion compared to Rs. 26.33 billion last year. The

Bank has been able to manage its credit portfolio better as

a result of which the Non-performing credit to Total credit is

0.34%. The provisions made are adequate to cover all the

potential credit losses as of the balance sheet date.

After transfer of Rs. 258 million to general reserve, Rs. 24

million to exchange ﬂuctuation reserve, proposed dividend of

Rs.432 million and proposed bonus shares of Rs. 562 million,

total retained earnings as at 16 July, 2015 stood at Rs. 24

million. This performance reﬂects a good momentum in the

underlying businesses and disciplined management of risks

and costs.

Representation

As at 16 July 2015, the Bank maintained nineteen points

of representation which included fourteen branches and

ﬁve extension counters. In addition to this, services were

also extended to our customers through twenty three ATMs

located at different parts of the country.

Corporate & Institutional Clients (C&IC)

C&IC in line with its stated strategy has performed well

over the review period. After the Gorkha Earthquake, the

growth rate since has been muted, which has impacted our

performance towards the last quarter of FY 2014/15. On

a year-on-year basis, we recorded a growth in risk assets

volume of 13% over the review period as against the liability

growth of as high as 51%. Bulk of these deposits did come

post the aftermath of the earthquake and the balance has

been gradually declining. As anticipated, in the wake of

CEO and Directors Report

The Bank continues to perform well

and remains in good shape.

excess liquidity, our margins have been squeezed. The

increased liquidity is not only resulting in reduction in margins

but also creating unhealthy competition in the industry.

We are keen to invest in areas where there is accretive growth.

We are well positioned to take advantage of opportunities

post the promulgation of the Constitution. Our efforts continue

to engage with clients across the product spectrum. Against

the backdrop of continuously increasing competition and in

the absence of mechanism for pricing for risk, we are hopeful

of the industry getting matured. Our objective over this ﬁscal

year will be to focus on digitisation and e-channels to increase

efﬁciency in delivery. We will be more judicious about the

deployment of capital and will actively engage to increase the

Return on Risk Weighted Assets.

We have been deepening relationships with our existing

clients by offering various Cash Management solutions.

Our electronic banking solution (Straight 2 Bank) is a

unique e-banking platform that can cater to client’s cash,

trade & FX requirements in one single view. S2B allows

multiple-connectivity with clients through internet, mobile

and can be used for automation & straight through

processing of payments, trade transactions; it also extracts

reports, statements and advices and allows automation of

reconciliation for invoices with payments.

Collection products viz. RCMS, Virtual Account have been

tested and already offered to our clients. We have capabilities

to provide globally accepted payment solutions that provide

security & efﬁciency to our clients. Our Trade TING (Trade

Initiation Next Generation) is a world class solution for clients

to open Letter of Credits and Guarantees, electronically.

We have provided support to the banking industry by

providing trainings etc. through our network specialists. In the

space of RMB development, our Bank, with the help of Group

resources conducted sessions on emerging and changing

trade & payment landscape of RMB to the central bank,

commercial banks & clients. We have opened a CNY account

Company overview

Leading to this, the Business

has put up a decent

performance in all parameters.

RC business continued to

assist in maintaining good

liquidity position for the Bank.

Standard Chartered Annual Report 2014-2015

with SCB China to facilitate client’s payments & trade in RMB

currency.

Retail Banking

Positive signs were seen in Retail Banking business

subsequent to holding of the second Constituent assembly

elections and formation of the new government. The business

was able to deliver decent performance in all parameters with

Retail Banking continuing to contribute in maintaining good

liquidity position for the Bank. The devastating impact of the

earthquake on the country’s economy during the latter part

of the ﬁscal year had a resulting impact on the Bank’s overall

business. Despite this, the Bank was able to ensure service

to its clients with minimal disruption. Our branches were up

and running in the shortest possible time after the earthquake

to provide service to clients. However, the change in client

behaviour and shift in client priorities in the aftermath of the

earthquake had a signiﬁcant impact on the Retail lending

business, particularly in the Auto and Mortgage products.

Our focus continues to remain on low cost deposits,

constituting Current and Savings Accounts (CASA). On the

lending front, we have maintained a good momentum and

our focus will continue in maintaining a good mix of secured

and unsecured portfolio. We have revamped our Employee

Banking proposition as it will be one of the key priorities in

driving the Retail Banking business further. Our Priority

Banking client value propositions will continue to provide

enhanced and valued added beneﬁts to high value client base.

Our strong and dedicated team of Relationship Managers

provide the best in class service and client experience. Our

Lazimpat Branch is home to a unique banking experience

for our Priority Banking clients. The branch has an exclusive

lounge, created in an art gallery to provide our high net worth

clients much needed privacy and personalized service.

The cost of fund was managed well, representing one of

the best in the industry. A healthy net interest margin (NIM)

in lending products was maintained in spite of the fact that

our borrowing rates were amongst the lowest in the industry

within the retail lending space

We have renewed our focus on SME business, which is

emerging as the growth engine and a key area of thrust for

Retail Banking. Increasing the wallet share of non-funds based

income will be given due attention.

Our commitment to support the initiative of the Government

to encourage individuals for PAN card registrations continues.

The Auto and Mortgage products offered by the Bank are

CEO and Directors Report

therefore provided with a 0.25% discount on the published

rates to clients producing PAN Cards along with their loan

applications. In our continuous efforts to provide increased

beneﬁts to our clients, Retail Banking plans to introduce

product variants in its existing suite of products both for

individuals and business.

Our 24X7 Client Care Centre provides easy access and

international standard service to our clients from anywhere

in the world. The increasing potential in the Retail Banking

business both from within our ecosystem and beyond will

be exploited to increase our reach and further improve our

performance. This will be done by continually striking a

balance between and risk and return to ensure achievement

of sustained growth of our Retail Banking business.

Client Experience

Delivering high-quality client experience is a priority for the

Bank; it underpins our brand promise – Here for good.

With an aim to drive superior service delivery, the Bank has

established various client experience service standards

viz Client Care Centre service level, online banking and

ATM uptime service level, complaint resolution metrics and

standard processing turnaround time, etc. In addition,

monthly performance measures have been introduced to

gauge our performance against the set standards.

Our global policies and procedures on complaint management

help us to ensure that complaints are identiﬁed and resolved

quickly in fair manner. Root cause analysis of the complaints

is conducted to understand the actual cause for occurrence

of the issue and actions are taken to prevent recurrence of

similar complaints and issues.

To assess clients’ experience in their day to day interactions

with the Bank, at recent transaction and frontline staff speciﬁc

level, monthly Client Satisfaction Surveys are conducted.

The outcomes of these surveys form a part of the frontline

performance scorecard, which has helped reinforce strong

service culture across the Bank. Similarly, Annual Loyalty

Surveys gauge whether our clients are our true advocates on

overall banking relationship across the overall Bank, Segments

and Products through Net Promoter Score (NPS).

We leverage on the set service standards, complaint metrics,

client interactions and surveys to understand client’s need,

trend and drive improvement opportunities.We continue to

focus on improving our productivity, through the removal

of pain points for the clients, improving our processes,

digitisation and also by standardising our operating rhythm.

The Bank’s NPS scores have improved signiﬁcantly from +36

in 2011 to +80 in 2014/15. It is a testament to the numerous

service improvement initiatives that have been introduced

across the Bank.

The Bank believes that each member of the staff owns and

is accountable for client experience. We continue to focus

on trainings on products, soft skills and client experience for

our staff to ensure we are on track with our client focused

strategy.

Future Plans

Our objective remains to build stronger relationships with our

clients. To achieve this, we will continue to cater through

client-centric new and improved product offerings. The critical

driver is to move from basic lending to strategic products for

our clients.

We continue to remain highly liquid, strongly capitalized and

open for business. Our pursuit for growth will however be

closely inﬂuenced by the competitive landscape, regulatory

changes and economic fundamentals. We will continue to

engage with our stakeholders in line with our brand promise –

Here for good.

Over the last 12 months, we have gained signiﬁcant

achievement in our drive of becoming the Digital Main Bank.

We will continue to strive for greater level of Digitisation of our

services including repositioning of social media and revamping

the Bank’s website. The objective of this drive is to improve

the service delivery on our part and for our clients to achieve

operational efﬁciencies. Our clients are already experiencing

our user-friendly features and beneﬁts.

Company overview

Standard Chartered Annual Report 2014-2015

Both our businesses Corporate & Institutional Clients (C&I)

and Retail Banking (RB) have been coordinating and working

together in meeting the needs of our corporate and retail

clients. This collaboration is helping in addressing the clients’

needs more effectively and efﬁciently. Similarly, we are

also working closely with our network points for achieving

synergies in client referrals, initiation and conversions.

Like in the past, we continue to invest in training and development

of our people. Good performance is being recognised and

rewarded. We will be able to differentiate ourselves from the

competition only by enhancing our engagement with clients;

we already have an edge over our competitors by virtue of our

international expertise and knowledge base.

We are in good shape to support our clients & customers; we

have a highly liquid and strongly capitalised balance sheet.

We are equipped with a strong risk management culture.

These fundamentals will help attain higher growth in the

coming years.

Credit Environment

After 80 years, Nepal was hit hard by the devastating

earthquakes towards the end of FY 2014/15, which

dampened the business sentiments garnered during the year

and the business momentum was lost causing wide scale

damages to the economy.

According to the Post Disaster Needs Assessment (PDNA)

report published by the National Planning Commission (NPC),

the earthquake caused a total loss of Rs. 706 billion in the

economy. The damage of the earthquake is estimated at 57.8%

in the social sector, 25.2% in the productive sector, 9.5% in the

infrastructure sector and 7.5% in the cross cutting issues.

The agricultural sector, which contributes about one-third to

real GDP, witnessed a lower rate of growth on account of the

decline in the production of principal cereal crops - paddy

and maize owing to late monsoon, and losses in livestock and

CEO and Directors Report

The low capacity utilisation of the

manufacturing industries, narrow

export base and higher Y-o-Y import

growth resulting in ballooning trade

deﬁcit increased the country’s

economic vulnerability.

some agro-products from the earthquake. Further, the service

sector, which contributes over 50% to country’s total GDP,

had an adverse impact from the earthquake. As a result of

this, the country’s economic growth rate fell sharply to 3% in

last ﬁscal year. The loss from the earthquake is estimated at

about one-third of GDP of FY 2014/15.

Though annual average credit growth during the year

remained higher than the previous FY, credit demand

dropped signiﬁcantly after the earthquake due to impact in

manufacturing and service sectors. The industrial sector was

marred by labour shortage, physical damages caused by the

earthquake and sluggish demand for industrial production.

The obstruction in highways linking Nepal to China impacted

the trade business. The damage to the hydropower projects

in the crisis hit districts and the reduction in the power

production also impacted industrial activities.

The low capacity utilisation of the manufacturing industries

also due to perennial power shortage, reduced exports

and continued Y-o-Y import growth, which resulted in

ballooning trade deﬁcit, further increased country’s economic

vulnerability. Higher cost and lack of competitiveness have

impeded expansion of export base. With the depreciation of

Rupee against US Dollar, the economy, therefore, faced more

challenges due to increasing import to export ratio though this

will prompt Nepalese workers working abroad to remit more

savings into the country.

The higher deposit growth during the FY mainly after the

earthquake because of excessive remittance inﬂows besides high

donations and grants resulted in excess liquidity in the banking

sector. The excess liquidity situation contributed to reduction in

interest rates impacting the interest earnings from both lending and

investment portfolios of the banks. The risk posed by the continual

excess liquidity in the ﬁnancial market was a detriment to sustained

income growth of the banking sector.

The government’s capital expenditure was 67% of annual

budget estimate and remained below 4% of GDP during

the year. The capital expenditure was also impacted by the

earthquake in the last quarter when higher expenditure used

to be incurred historically. The low capital expenditure further

subsided the economic growth prospects.

The steadily increasing inﬂow of remittance from workers and

comfortable foreign exchange reserves, surplus in BOP as

well as current account, reduced debt to GDP ratio, etc. were

some reassuring factors for economy during the year under

review. The business conﬁdence continued to remain weak

in the current ﬁscal year due to the impact from earthquake

and the long Bandhs and strikes in the Terai region which

started from the beginning of the FY 2015/16 and subsequent

blockades along the Indo-Nepal border adversely impacting

trade and transport. Despite having unprecedented

challenges in the economy, long term prognosis of the

economy appears positive expecting more stability in political

environment after the promulgation of new constitution and

the government’s reconstruction plans to re-build the nation

with strong commitments from the donors.

The Bank has largely been successful in achieving disciplined

growth in loans and advances and maintaining the credit

quality of the loan portfolio. Notwithstanding the uncertainties

in the credit environment, we are more resilient because

of our proactive risk management approach, system and

process for risk identiﬁcation and measurement and focus

on risk management principles which include balancing risk

and return, responsibility and accountability in taking risk,

anticipation of material future risks, and our competitive

advantages. The Bank continues to take measured risks

and stands up for what is right. Standard Chartered Bank

Nepal is Here for good; Here for good in the sense of always

seeking to do the right things. Consistency of strategy and

disciplined and focused approach, strong relationship with

the clients, rigors around the portfolio quality, debate on risk-

return dynamics, vigilance and prompt actions, etc. are the

fundamentals of our risk culture.

Auditor

M/S S R Pandey & Co., Chartered Accountants, were

appointed as Statutory Auditors for FY 2014/15 by the 28th

Annual General Meeting of the Bank held on 4th December

2014. As per the recommendation of the Audit Committee,

this meeting will decide on the appointment of the auditor for

next ﬁnancial year.

Proposed Dividend and Bonus Shares

The 340th meeting of the Board of Directors of the Bank has

proposed dividend and bonus shares to the shareholders

of the Bank for the year ended 16 July 2015 at the rate of

19.21% and 25% respectively.

Joseph Silvanus

Director and CEO

Company overview

Standard Chartered Annual Report 2014-2015

A Synopsis

Following are the steps taken by the management for

strengthening Corporate Governance in the organization:

• The Board of Standard Chartered Bank Nepal Limited

is responsible and accountable to the shareholders and

ensures that proper corporate governance standards are

maintained.

• The Audit Committee meets quarterly to review the internal

and external inspection reports, control and compliance

issues and provides feedback to the Board as appropriate.

• The EXCO represented by all Business and Function

Heads is the apex body managing the day to day

operations of the Bank. Chaired by the CEO, it meets at

least once a month for formulating strategic decisions.

• The Annual General Meeting is used as an opportunity to

communicate with all our shareholders.

• To ensure compliance with applicable laws and regulations

and enhance resilience to external events and avoid

reputational risk, the Board has adopted SCB Group

policies and procedures.

• Ultimate responsibility of effective Risk Management rests

with the Board supported by Audit Committee, Board Risk

Committee, EXCO, Executive Risk Committee and Asset &

Liability Committee (ALCO).

• Embracing exemplary standards of governance and ethics

wherever we operate is an integral part of our Strategic

Intent. The Group Code of Conduct is adopted to help

us meet this objective by setting out the standards of

behaviour we must follow with each other and with our

customers, communities, investors and regulators.

Analysis

The Board of Standard Chartered Bank Nepal Limited is

responsible for the overall management of the Company and

for ensuring that proper corporate governance standards are

maintained. The Board is also responsible & accountable to

the shareholders.

The Board has complied with the principles and provisions of

the Nepal Rastra Bank directives on Corporate Governance

and the provisions of Companies Act, 2063 and Banks and

Financial Institutions Act, 2063 (the “Corporate Governance

Code”). The directors conﬁrm that:

• Throughout FY 2071/72, the Company complied with

all the provisions of the Corporate Governance Code. The

Company complied with the listing rules of Nepal Stock

Exchange Limited.

• Throughout FY 2071/72, the Company was in compliance

with the Securities Registration and Issuance Regulation,

2065.

Our approach to

Corporate Governance

• The Company has adopted a Code of Conduct

regarding securities transactions by directors on

further terms no less than required by the Nepal Rastra

Bank Directives and the Company Act and that all

the Directors of the Bank complied with the Code of

Conduct throughout FY 2071/72.

The Board

As on the date of this report, the Board is made up of

the Non-Executive Chairman, one Executive Director and

four Non-Executive Directors of which one is Professional

/ Independent Director appointed as per the regulatory

requirement and one of them is the Public Director

representing General Public shareholders as per the

provisions of the Company Act.

The Board composition complied with the regulatory

requirements. Four Directors including the Non-Executive

Chairman are nominated by the SCB Group to represent

it in the Board in proportion to its shareholding. The Board

meets regularly and has a formal schedule of matters

speciﬁcally reserved for its decision. These matters include

determining and reviewing the strategy of the Bank, annual

budget, overseeing statutory and regulatory compliance

and issues related to the Bank’s capital. The Board is

collectively responsible for the success of the Bank.

During the year under review, the Board held 13 board

meetings of which 7 were held by circulation. 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 illustrates the number of Board meetings

held during the FY 2071/72 and fee paid:

Board Members Scheduled

Meeting 13

Meeting fee paid

Sunil Kaushal

Chairman

13 Nil - Does not take

meeting fee

Anurag Adlakha

Director

12 Nil – Does not take

meeting fee

Sujit Mundul

Director

12 NPR 210,000

(inclusive of tax)

Krishna K. Pradhan

Professional Director

13 NPR 227,500

(inclusive of tax)

Amrit Kumari Thapa

Public Director

13 NPR 227,500

(inclusive of tax)

Joseph Silvanus

CEO & Director

13 Nil –Does not take

meeting fee

7 Board meetings were held by circulation out of 13 Board meetings

Attended 1 Board meeting through Video Conferencing out of 13 Board meetings.

Attended 2 Board Meetings through Video Conferencing out of 12 Board

Meetings.

Corporate governance

Standard Chartered Annual Report 2014-2015

Director Induction and Ongoing Engagement

Plans

We have a very extensive, robust and tailor-made induction

and ongoing development programme in place for our

Board members. We have been conducting induction for

the new directors representing in the Board. The induction

programmes are in-depth and cover areas such as the

basics of banking, including modules on sources of income,

geographic diversity, client distribution, and traditional and

modern banking services etc.

Board Committees

The Board is accountable for the long-term success of the

Bank and for providing leadership within a framework of

effective controls. The Board is also responsible for setting

strategic targets and for ensuring that the Bank is suitably

resourced to achieve those targets. The Board delegates

certain responsibilities to its Committees to assist it in

carrying out its function of ensuring independent oversight.

Committees play key role in supporting the Board.

The Bank has two Board Level Committees called Audit

Committee and Risk Committee constituted as required by

local law and regulation.

Our Board has made a conscious decision to delegate a

broader range of issues to the Board Committees. The

linkages between the committees and the Board are critical,

given that it is impractical for all non-executive directors to

be members of all the committees.

In addition to there being common committee membership,

the Board receives the minutes of each of the committees’

meetings. In addition to the minutes, the Committee Chairs

provide regular updates to the Board throughout the year.

We have effective mechanisms in place to ensure that there

are no gaps or unnecessary duplications between the remit

of each committee. The Bank also has clear guidance for the

committees in fulﬁlment of their oversight responsibilities.

Audit Committee

As mandated by the local regulations, the Board has formed

an Audit Committee with clear Terms of Reference (ToR).

The duties and responsibilities of the Audit Committee are

in congruence with the framework deﬁned by Nepal Rastra

Bank Directives and Companies Act.

The Audit Committee is chaired by a non-executive director.

All other members of the Audit Committee are also non

executive directors thus ensuring complete independence.

The Composition of the Audit Committee as on July 16,

2015 was as below:

1. Mr. Sujit Mundul, Chairman

2. Mr. Anurag Adlakha, Member

3. Ms. Amrit Kumari Thapa, Member

4. Mr. Sanjay Ballav Pant, Country Head of Audit,

Member Secretary

The Audit Committee meets at least on quarterly basis

and reviews internal and external audit reports, control and

compliance issues, bank’s ﬁnancial condition etc. Audit

Committee provides feedback to Board of Directors by

tabling Audit Committee meeting minutes at the subsequent

Board meeting for review. The Audit Committee also liaises

with Group Internal Audit to the extent necessary to ensure

that the conduct of Committee’s business is consistent

with and complementary to the practice and requirement of

Standard Chartered Group in this regard.

The following table illustrates the Audit Committee’s

attendance and meeting fees paid during FY 2071/72. A

total of 6 meetings were held during the period.

Audit Committee

Members

Scheduled

Meeting

Meeting fee paid

Sujit Mundul

Chairman

6 NPR 45,000

(Inclusive of tax)

Anurag Adlakha

Member

3 Nil – Does not take

meeting fee

Amrit Kumari Thapa

Public Director

6 NPR 30,000

(Inclusive of tax)

Sanjay Ballav Pant

Member Secretary

6 Nil – Does not take

meeting fee

Attended 1 meeting through Video Conferencing and 1 through audio

conferencing.

Attended all the meetings through video conferencing.

During the ﬁnancial year 2071/72 (2014/15) Audit Committee

performed the following tasks, among others.

• Reviewed and reported to the Board on the Bank’s

internal control system;

• Reviewed the issues raised in the Internal Audit Reports

and directed the management for resolution;

• Reviewed the work performed by Internal Audit against

the country audit plan;

• Reviewed and approved the Committee’s Terms of

Reference;

• Reviewed and approved the changes to the Audit

Methodology;

• Reviewed and approved the Audit Charter of the Bank;

Corporate Governance

• Reviewed and approved the annual audit plan based on

the risk assessment and regulatory requirements;

• Reviewed the audit team resourcing and development

activities;

• Reviewed the ﬁndings of NRB Annual Onsite Inspection

Team and Statutory Auditor, and directed the management

for resolution of the issues raised in their reports;

• Reviewed the status of audit issues raised in Internal

Audit Reports, Statutory Audit Report and NRB

Inspection Report;

• Reviewed the results of Audit Quality Assurance;

• Recommended to the Bank’s Annual General Meeting

through the Board for appointment of Statutory Auditor

and ﬁxation of remuneration;

• Reviewed quarterly and annual ﬁnancial statements,

comparison of key ﬁnancial indicators and adequacy of

loan loss provisions;

• Reviewed and discussed top risks, emerging risks and

themes of the country and the appropriateness of the

management action plan to mitigate these risks;

• Reviewed the Compliance Monitoring Report to

understand the regulatory developments, emerging

regulatory hotspots, regulatory breaches and state of

compliance of the Bank;

• Reviewed and approved Annual Compliance Plan;

• Reviewed the cases of fraud and loss to the Bank;

• Reviewed the Pillar 3 disclosure comprising of capital

structure, capital adequacy, risk exposures and risk

management function in the annual ﬁnancial statements

of the Bank.

Board Risk Committee

Under Nepal Rastra Bank Directive on Corporate

Governance, the Board has established a Board Risk

Committee with clear terms of reference. The Board Risk

Committee is chaired by an Independent Non-Executive

Director (INED), Chairman of the Audit Committee is a

member and Senior Credit Ofﬁcer & Chief Risk Ofﬁcer

(“SCO&CRO”) is the member/Secretary. The Committee

meets four times annually. The committee oversees

and reviews the fundamental prudential risks including

operational, credit, market, reputational, capital, liquidity and

country cross border risk etc.

At the strategic level, risk in any business, but most especially

in a Bank’s business, is clearly owned by the Board. The

Board Risk Committee’s role is to advise and help, diving

deeply into issues of risk so that the Board is well placed to

perform its role as the ultimate owner of risk appetite.

For the Board Risk Committee to be truly effective, it needs to

be forward looking. We have explored with both management

and the risk function how best this can be achieved so that

the Committee has enough time for the horizon scanning.

Signiﬁcant consideration has also been given to what

information needs to be provided to the Committee on the

current risk position and how this is changing, the likelihood

of it continuing to change and the underlying reasons. In

discharging its responsibilities, the Committee continues to

be vigilant against being overwhelmed with information, while

ensuring that it is provided with all the key data necessary to

fulﬁl its Terms of Reference.

The Composition of the Board Risk Committee as on July

16, 2015 was as below:

• Krishna Kumar Pradhan, Chairman

• Sujit Mundul, Member

• Gopi Bhandari, Member Secretary

The following table illustrates the number of Board Risk

Committee meetings held during the FY 2071/72 and fees

paid:

Board Risk Committee

Members

Scheduled

Meeting

Meeting fee paid

Krishna Kumar Pradhan

Chairman

4 NPR 22,500

(inclusive of tax)

Sujit Mundul

Member

4 NPR 22,500

(inclusive of tax)

Gopi Bhandari

Member Secretary

4 Nil - Does not

take meeting fee

Executive Committee (EXCO)

The Executive Committee (EXCO) represented by all key

Business and Function Heads of the Bank is the apex body

that manages the Bank’s operation on a day to day basis.

EXCO meets formally at least once a month and informally

as and when required. The strategies for the Bank are

decided and monitored on a regular basis and decisions are

taken collectively by this Committee. The CEO Chairs the

EXCO. As at the date of this report, the Bank’s Management

Committee comprised of the following:

Mr. Joseph Silvanus

Chief Executive Ofﬁcer & Head Retail Banking

Ms. Bina Rana

Head Human Resources

Mr. Gopi Bhandari

Chief Risk Ofﬁcer & Senior Credit Ofﬁcer

Corporate governance

Standard Chartered Annual Report 2014-2015

Mr. Gorakh Rana

Head Commercial Banking and International Corporates

Mr. Shobha B Rana

Head Legal & Compliance

Mr. Sujit Shrestha

Chief Information Ofﬁcer

Mr. Suraj Lamichhane

Financial Controller

Risk Governance

Through its risk management framework, the Bank seeks to

efﬁciently manage credit, market and liquidity risks which arise

directly through the Bank’s commercial activities as well as

operational, regulatory and reputational risks which arise as a

normal consequence of any business undertaking.

As part of this framework, the Bank uses a set of principles

that describe its risk management culture. The principles of

risk management followed by the Bank include:

• Balancing risk and reward.

• Disciplined and focused risk taking to generate a return.

• Taking risk with appropriate authorities and where there is

appropriate infrastructure and resource to manage them.

• Anticipating future risks and ensuring awareness of all risks.

• Efﬁcient and effective risk management and control to gain

competitive advantage.

In order to enhance governance/oversight and to enable

earlier detection and mitigation of critical risks, a Small

Country Governance Framework (SCGF) has been

implemented in SCB Nepal Limited. The SCGF provides a set

of guiding principles covering the four key pillars of People,

Governance, Systems and Processes. It also includes a set

of tools which will enable small countries to more proactively

identify, assess and mitigate potential control failures.

The Executive Risk Committee (ERC) is represented by

the senior management team including the heads of the

concerned risk management units and Chaired by the

CEO. The committee meets normally in every two months

and reviews the Credit Risk, Operational Risk, Market Risk

and Reputational Risk; analyzes the trend, assesses the

exposure impact on capital and provides a summary report

to the Management Committee. Its objective is to ensure the

effective management of risks throughout the Bank in support

of the Bank’s Business Strategy.

The Bank’s Committee Governance structure ensures that

risk-taking authority and risk management policies are

cascaded down from the Board to the appropriate functional

and divisional committees. Information regarding material

risk issues and compliance with policies and standards

is communicated through the business and functional

committees up to the Group-level committees, as appropriate.

Credit Risk

Credit risk is the potential for loss due to failure of

counterparty to meet its obligations to pay the Bank in

accordance with agreed terms. Country Portfolio Standards

and the Retail Lending Policy govern the extension of credit

to Corporate & Institutional (C&I) Clients and Retail Clients

respectively. Each policy provides the framework for lending

to counterparties, global account management, product

approvals and other product related guidance, credit

processes and portfolio standards.

The Corporate & Institutional Clients Monitoring and Control

Policy and the Group Process Standards – Retail Clients

Credit MIS provide the outline for how credit risk should be

monitored and managed in the Bank.

All Corporate and Institutional borrowers, at individual and

group level, are assigned internal credit rating that supports

identiﬁcation and measurement of risk and integrated into

overall credit risk analysis.

The Credit Issue Committee (“CIC”) is a sub-committee

of Executive Risk Committee (ERC). It is responsible for

overseeing clients in C&I and Business Clients (erstwhile SME)

segments showing signs of actual or potential weaknesses

and also for monitoring of agreed remedial actions for such

clients. The CIC reviews the existing Early Alert (“EA”) portfolio

and new accounts presented to the committee. It also reviews

Retail Portfolio to ensure credit issues / adverse trends in the

portfolio are identiﬁed and addressed through appropriate

actions. The CIC additionally reviews and monitors strategies

and actions being taken on accounts within GSAM’s portfolio.

It is chaired by the CEO and meets monthly.

For Retail exposures, portfolio delinquency trends are

monitored continuously at a detailed level. Individual

customer behaviour is also tracked and considered for

lending decisions. Accounts that are past due are subject to

a collections process, managed independently by the Risk

Function. Charged-off accounts are managed by specialist

recovery teams.

The credit risk management covers credit rating and

measurement, credit risk assessment and credit approval,

Corporate Governance

large exposures and credit risk concentration, credit

monitoring, credit risk mitigation and portfolio analysis.

Operational Risk

We deﬁne Operational Risk as the potential for loss resulting

from inadequate or failed internal processes, people and

systems or from the impact of external events, including

legal risks. We seek to minimize our exposure to operational

risk, subject to cost trade-offs. Operational risk exposures

are managed through a consistent set of management

processes that drive risk identiﬁcation, assessment, control

and monitoring. Operational Risk Framework (ORF) adopted

by the Bank provides comprehensive risk management tools

for managing operational risk. The Operational Risk Framework

(ORF) deﬁnes how risks are managed, how Operational Risk

policies and controls are assured, how effective governance

is exercised as well as the key roles required to manage the

underlying processes.

The Executive Risk Committee, chaired by the CEO, oversees

the management of operational risks across the Bank. Each risk

control owner is responsible for identifying risks that are material

and for maintaining an effective control environment across the

organization. Risk control owners have responsibility for the

control of operational risk arising from the management of the

following activities: External Rules & Regulations, Liability, Legal

Enforceability, Damage or Loss of Physical Assets, Safety &

Security, Internal Fraud or Dishonesty, External Fraud, Information

Security, Processing Failure, and Model. Operational risks can

arise from all business lines and from all activities carried out

by the Bank. Operational Risk management approach seeks

to ensure management of operational risk by maintaining a

complete process universe deﬁned for all business segments,

products and functions processes.

Products and services offered to clients and customers are

also assessed and authorized in accordance with product

governance procedures.

The OR governance structure is as follows:

• Operational Risk governance ensures consistent oversight

across all levels regarding the execution and effectiveness

of Operational Risk Framework (ORF).

• Risk Control Owners for all major Risk Types are appointed

as per the Risk Management Framework (RMF) and are

responsible for effective management of operational risk of

their respective control function.

• Operational risks are identiﬁed and graded at the

business/unit level. For all risk graded low and above along

with the treatment plan are agreed with the Risk Control

Owner before raising the risk in Phoenix and tabling the

risks in Country Executive Risk Committee for acceptance.

Mitigating controls are put in place and mitigation progress

monitored until its effectiveness.

• The Executive Risk Committee (ERC) ensures the effective

management of Operational Risk throughout the business/

functions in support of the Group’s strategy and in

accordance with the Risk Management Framework. The

ERC assigns ownership, requires actions to be taken

and monitors progress of risks identiﬁed, in addition to

conﬁrming the risk grading provided at the business/unit

level.

• The Executive Risk Committee (ERC) accepts operational

risks arising in the country that have residual risk ratings

which are above ‘Low’ in the country materiality scale,

provided the residual risk rating is ‘low’ on the Group

materiality scale. Risks categorized as Medium, High or

Very High on the Group materiality scale are reported to

the Executive Risk Committee (ERC) for endorsement

and escalated to the Group Process Owner through the

relevant country process owner for acceptance through

the relevant Process Governance Committees (PGCs).

• The Group Risk Committee (GRC) provides oversight of

operational risk management across the Group.

• Process Governance Committee (PGC) provides global

oversight of all material operational risk arising from end-

to-end processes within their Process Universes.

Market Risk

Risks arising out of adverse movements in currency exchange

rates, interest rates, commodity price and equity prices are

covered under Market Risk Management. We recognize

Market Risk as the potential for loss of earnings or economic

value due to adverse changes in ﬁnancial market rates or

prices. Our exposure to market risk arises principally from

customer driven transactions. In line with Risk Management

Guidelines prescribed by NRB, the Bank focuses on exchange

risk management for managing/computing the capital charge

on market risk.

Operational risk

exposures are managed

through a consistent

set of management

processes that drive

risk identiﬁcation,

assessment, control and

monitoring.

Corporate governance

Standard Chartered Annual Report 2014-2015

In addition to the currency exchange rate risk, interest rate

risk and equity price risk are assessed at a regular interval

to strengthen market risk management. The market risk is

managed within the risk tolerances and market risk limits set

by the Board.

Liquidity Risk

Liquidity risk is the potential that the Bank either does not

have sufﬁcient liquid ﬁnancial resources available to meet all its

obligations as they fall due, or can only access these ﬁnancial

resources at excessive cost. The Liquidity Risk Framework

governs liquidity risk and is managed by ALCO. In accordance

with that policy, the Bank maintains a liquid portfolio of

marketable securities as a liquidity buffer. The net liquid assets

to total deposits ratio is 44.4% which includes a buffer of

Rs.11.3 billion over the regulatory requirement.

Reputational Risk

Reputational risk is the potential for damage to the Group’s

franchise, resulting in loss of earnings or adverse impact

on market capitalisation as a result of stakeholders taking a

negative view of the Group or its actions.

The Country Head of Corporate Affairs is the RCO responsible

for monitoring and reporting of reputational risk for the Bank.

Reputational risk is managed by the EXCO and ERC, which

are responsible for protecting the Group’s reputation locally

and has the responsibility to ensure that the Bank does not

undertake any activities that may cause material damage to the

Group’s franchise. Reputational risk is registered, recorded and

reviewed by the CEO through the ERC. Whilst the ERC covers

all forms of reputational risks in the country, any signiﬁcant

business/function related reputational risks, if any, are also

brought up and discussed in the ERC. Corporate Affairs has

representation in the ERC. Monthly reporting from Corporate

Affairs to Group Corporate Affairs is in place to ensure that

signiﬁcant risk issues are socialised and escalated to the Group.

Pension Risk

Pension risk is the potential for loss due to having to meet an

actuarially assessed shortfall in the Bank’s deﬁned beneﬁts

pension schemes. Pension obligation risk to a ﬁrm arises from its

contractual or other liabilities to or with respect to an occupational

pension scheme. It represents the risk that additional contributions

will need to be made to a pension scheme because of a future

shortfall in the funding of the scheme.

The Pension Executive Committee (PEC), is a sub-committee

of the EXCO, and is responsible for pension risk. The PEC

is chaired by CEO and its other members include: Financial

Controller and Head HR. It meets on a half-yearly basis. The

Corporate Governance

Bank assesses and monitors the assets and liabilities within

the deﬁned beneﬁt scheme on a full liability method. The gross

obligation is calculated considering the last drawn salary of

the individual staff and number of year’s service with the Bank.

The PEC reviews the assets and liabilities position of the

deﬁned beneﬁt scheme on a half yearly basis.

Internal Control

The Board is committed to managing risks and in controlling its

business and ﬁnancial activities in a manner which enables it to

maximize proﬁtable business opportunities, avoid or reduce risks

which can cause loss or reputational damage, ensure compliance

with applicable laws and regulations and enhance resilience to

external events. To achieve this, the Board has adopted the SCB

Group policies and procedures of risk identiﬁcation, risk evaluation,

risk mitigation and control/monitoring.

The effectiveness of the Company’s internal control system is

reviewed regularly by the Board, its Committees, Management

and Internal Audit. The Audit Committee has reviewed the

effectiveness of the Bank’s system of internal control during

the year and provided feedback to the Board as appropriate.

The Internal Audit monitors compliance with policies/

standards and the effectiveness of internal control structures

across the Company through its program of business/unit

audits. The Internal Audit function is focused on the areas

of greatest risk as determined by a risk-based assessment

methodology. Internal Audit reports are periodically forwarded

to the Audit Committee. The ﬁndings of all audits are reported

to the Chief Executive Ofﬁcer and Business Heads for initiating

immediate corrective measures.

Capital Management

The Bank’s capital management approach is driven by

its desire to maintain a strong capital base to support the

development of its business and to meet the regulatory capital

requirements at all times.

The Audit Committee

has reviewed the

effectiveness of the

Bank’s system of internal

control during the year

and provided feedback to

the Board as appropriate.

Corporate governance

Standard Chartered Annual Report 2014-2015

As Capital is the centerpiece of the Bank’s performance

matrix, a sound capital management forms the very core of

the overall performance landscape to ensure that the Bank

delivers on its objective of maximizing the shareholder’s

value. The senior management of the Bank is engaged and

responsible for prudent capital management at all times.

In compliance with the regulatory requirement of increasing the

capital base as prescribed by the Central Bank, the Bank is

comfortable in meeting the minimum capital requirements and is

very strongly positioned to meet the performance benchmarks.

Crisis Management

The Bank has in place a Crisis Management Plan and a Country

Crisis Management Team to manage and resolve effectively

serious crisis that may affect the operations of the Bank. In

addition to this, the Bank has a detailed Business Continuity

Plan (BCP) to manage disruptions of operations and a Disaster

Recovery Plan (DRP) to manage Technological disruptions.

Health, Safety and Security

We consider the health and safety of our people and the

integrity of our business as most important aspect of our

operations. We regularly conduct audits of Health & Safety

and Environment Management and conduct inspections

of buildings and departments to provide assurance to all

stakeholders that risks are being managed effectively and that

there is a healthy and safety embedded working environment

for both our staff and our customers. As part of Health &

Safety corrective action plans, the Bank during the year has

completed redesigning and renovating work areas in many

parts of Head ofﬁce building and other branches as well.

We believe these actions will help our brand stand out from

our competitors. Ultimately they underpin our business and

will help us to grow stronger.

Relations with Shareholders

The Board recognizes the importance of good

communications with all the shareholders. There is regular

information, ﬁnancial as well as non-ﬁnancial, published by the

Company for the shareholder’s information. The AGM is used

as an opportunity to communicate with all the shareholders.

The notice of the AGM, as required by the Companies Act,

was sent to shareholders at least 21 days before the date

of the meeting at their mailing addresses available in the

Company’s records. In addition to that the notice and agenda

of the AGM were also published twice in the national level

daily newspaper for the shareholders information.

Group Code of Conduct – Summary

Standard Chartered is a company for which we can be proud

to work. As a global bank, we have the privilege, opportunity

and responsibility to be a force for good in the markets in

which we operate. In an environment where the conduct of

banking is under increasing scrutiny, our ethical standards

must be beyond reproach. We need to understand and follow

both the letter and the spirit of the law, to play a robust role

in the ﬁght against ﬁnancial crime, and to be mindful of the

reputational consequences of our actions.

Good conduct is built on four key pillars: creating the right

environment; a fair outcome for clients; the effective operation

of ﬁnancial markets and the prevention of ﬁnancial crime.

Our success will be measured by our ability to achieve good

outcomes for all our stakeholders — clients, investors, regulators,

markets, our colleagues and the communities we serve.

Living the Group Code of Conduct is one way in which we

can take a step towards achieving these outcomes. The

Group Code of Conduct has been developed to help all of

us live our values and deliver our brand promise in everything

we do. The Code is supplemented with resources that will

support you as you navigate through sometimes tough and

unfamiliar situations.

The Code of Conduct is not something to be glanced at just

once. It needs to be embedded in how we do business, so all of

us need to know and understand it, and commit to it annually.

Do the right thing — the importance of the Code: Our

values and our brand promise are integral to the way we work

every day. The Code is important because it outlines how we

can make sure that the decisions we make are the right ones.

Act responsibly and within authority: Be disciplined,

responsible and take accountability for the risks you take

and make sure that they are appropriate to your business or

We are all responsible for our

actions and for living our values,

but the Code is a framework

to help us make the right

decisions in difﬁcult situations,

underpinning our brand promise

of Here for good.

activity. You must keep to our limits and policies and not make

decisions that are beyond your delegated authority.

Use good judgment: Recognise when there are situations without

simple solutions. Use the Code’s decision making framework to

help you make decisions well, appropriately and with care.

Speaking Up: You have a responsibility to Speak Up

when you see behaviour, a process or system you are not

comfortable with at work. This helps to maintain a culture of

strong ethics, integrity and transparency.

Comply with laws, regulations and Group standards: You

are individually responsible for complying with the spirit, not

just the letter, of laws, regulations and our Group standards.

Combat ﬁnancial crime: It is critically important to protect

the worldwide ﬁnancial system. You must comply with laws,

regulations and Group standards on anti-money laundering

(including those on tax evasion), preventing ﬁnancing for

terrorism, fraud or sanctions.

Reject bribery and corruption: Bribery is illegal, dishonest

and damages the communities where it takes place. You

must not give or accept bribes nor take part in any form of

corruption.

Treat clients fairly: A focus on building long-term

relationships helps to increase our business by improving our

reputation. This includes having well-designed products and

services, which:

• are clearly sold based on suitable advice

• perform as expected

• give clients choice

Manage conﬂicts of interest: It is important not to put

yourself in a position where your judgment could be affected.

You are responsible for identifying, assessing and managing

conﬂicts of interest (whether actual or issues which could be

viewed as conﬂicts) that arise in your daily working life.

Do not engage in or support insider dealing: The misuse of

inside information undermines the ﬁnancial system and unfairly

disadvantages others in the market. You must keep to the

Group Personal Account Dealing Policy to deal with the risk of

insider dealing.

Protect conﬁdential information: Building trust is a basic

part of all our relationships with clients. You must not release

conﬁdential information unless authorised to do so.

Compete fairly in the market place: You must understand

and comply with the laws which affect how you compete in

your markets both locally and abroad.

Treat colleagues fairly and with respect: All staff are entitled

to a safe working environment that is inclusive and free

from discrimination, bullying and harassment. Treating your

colleagues as partners helps our people to deliver on the brand

promise, resulting in a positive effect on our business results.

Be open and co-operate with regulators: Deal with

regulators in a responsive, open and co-operative way and

give regulators information they would reasonably expect to

be told about.

Respect our communities and the environment: To

contribute to economic stability in our markets, we all have a

responsibility to reduce our effect on the environment and give

back to our communities.

We regularly conduct audits of

Health & Safety and Environment

Management and conduct

inspections of buildings and

departments to provide assurance

to all stakeholders that risks are

being managed effectively and

that there is a healthy and safety

embedded working environment for

both our staff and our customers.

Corporate governance

Standard Chartered Annual Report 2014-2015

Un-audited third quarter result of the

current ﬁnancial year is as follows:

Amount in

Thousands (Rs.)

Loans and advances: 29,696,191

Deposits: 58,124,051

Operating proﬁt: 1,319,211

Proﬁt before bonus

and taxes:

1,424,940

Net Proﬁt: 906,780

Achievements of the current year

as of the date of preparation of the

report, and opinion of the Board of

Directors on future actions:

Please refer the ‘Chairman’s Statement’

& CEO and Director’s Report.

A review of the business during the

previous year:

Please refer the sections ‘Commercial

Banking’ & ‘Retail Banking’ under CEO

and Director’s Report.

Industrial or Professional Relations

of the Company

The Company maintains a good

professional relationship with its

customers, people and regulators.

Senior managers of the Company

represent in number of councils,

committees and sub-committees of

regulators’, professional organizations,

associations, and forums.

The Company is a member of Nepal

Bankers Association, Federation of

Nepalese Chamber of Commerce &

Industry, Nepal Britain Chamber of

Commerce & Industry, Nepal India

Chamber of Commerce & Industry,

Management Association of Nepal and

Nepal Institute of Company Secretary.

Changes made in the Board of

Directors, and reasons therefore:

No changes. Please refer the section

‘Corporate Governance’ under

Chairman’s Statement.

Main factors affecting the business

Please refer the sections ‘Economic

Environment’ and ‘Conclusion’ under

Chairman’s Statement and ‘Credit

Environment’ under CEO & Director’s

Report.

Board of Directors’ Reaction to

Remarks made, if any, in the Audit

Report

The Board does not have remarks on

the ﬁndings mentioned in the Auditor’s

Report.

The amount recommended for

distribution as dividend

The Board has recommended paying

Rs. 431,883,592 by way of dividend

and Rs. 562,040,300 by way of bonus

share to the shareholders.

Forfeited Shares

There are no shares forfeited during

the ﬁnancial year.

Transaction between the Bank and

its Subsidiary Company and the

Progress made in the Business

The Bank does not have a subsidiary

company.

Main transactions carried out by the

company and its subsidiary company

during the ﬁnancial year and any

important change in the business of

the company during the period

The Bank does not have a subsidiary

company and there is no signiﬁcant

change in the business of the

company during the period.

Information furnished to the

company by its basic shareholders

during the previous ﬁnancial year

There are no basic shareholders in the

bank as no shareholder, except the

SCB Group, holds more than 1% of the

paid up capital of the Company. There

has been no information received from

the SCB Group in this regard.

Particulars of the ownership of

shares taken up by the Directors and

ofﬁce-bearers of the company during

the previous ﬁnancial year, and

information received by the company

from them about their involvement, if

any, in the transactions of the shares

of the company

Additional Information

as required by Section 109 of the Company Act, 2006

Directors and ofﬁce bearers, except

mentioned above, have not involved

in the shares transactions of the Bank

in FY 2071/72 as per the declaration

provided by them to the Bank.

Particulars of information furnished

by any Director or any of his close

relatives about his personal interest

in any agreement connected with

the company signed during the

previous ﬁnancial year

There are no such information

furnished by the Directors and any of

their close relatives.

Purchase of own Shares

The Bank has not purchased its own

shares in the year under review.

Whether or not there is an internal

control system, and if there is any

such system, details there of

Please refer section ‘Our approach to

Corporate Governance’ under CEO &

Director’s Report.

Particulars of the total

management expenses of the

previous ﬁnancial year

The management expense of the

ﬁnancial year is Rs. 912,723,230 (total

of Staff Expenses and Other Operating

Expenses as per Schedule 4.23 & 4.24

of the Financial Statements).

A list of members of the Audit

Committee, remunerations, allowances

and facilities being received by them,

particulars of functions discharged

by the Committee, and particulars

of suggestions, if any, offered by the

Committee.

Please refer section ‘Our approach to

Corporate Governance’.

Remunerations, allowances and

facilities:

Please refer section ‘Our approach to

Corporate Governance’

Functions discharged by the Committee:

Please refer section ‘Our approach to

Corporate Governance’.

Standard Chartered Annual Report 2014-2015

Payments due, if any, to the

company from any Director,

Managing Director, Executive

Chief or basic shareholder of

the company or any of their

close relatives, or from any ﬁrm,

company or corporate body in

which he is involved

Nil

Remunerations, Allowances and

Facilities to the Directors, the

Managing Director, the Executive

Chief and other Ofﬁce-bearers

Please refer section ‘Our approach to

Corporate Governance’

Remunerations, allowances and

bonus paid to the Chief Executive

Ofﬁcer in FY 2071/72, who also

was a Director of the Board, is

Rs. 1,94,78,185 (after deducting

applicable tax). Chief Executive Ofﬁcer

is entitled for the following facilities:

• Accommodation & Utilities

• Vehicle & Driver

• House Maid / Servant / Helper /

Security

• Mobile / Telephone

• Medical Reimbursement

• Leave Travel Allowance

• Children Education

Reimbursement

Dividends yet to be Collected by

Shareholders

Total dividends yet to be collected

by the shareholders amounts to Rs.

67,896,767/99

Detail of property’s buy or sell as

per Clause 141

Nil.

Detail of the transactions held

between Associated Companies

as per Clause 175

Nil.

Any other matter to be mentioned

in the Board of Directors’ report

under Companies Act, 2063

Nil.

Schedule- 13

Related to Sub Rule (1) of Rule

22 of Securities Registration

and Issuance Regulation, 2065

Details to be incorporated in the Annual

Report

Report Functions

1. Report of Board of Directors

Covered in the CEO & Director’s Report

section of this Annual Report.

2. Report of Auditor

Included in the Annual Report.

3. Audited Financial Detail

Balance Sheet, Proﬁt & Loss, Cash Flow

details and related schedules Included.

4. Detail relating to Legal Actions

(a) If any case ﬁled by Organized Institution

in the year,

Nil

(b) If any case relating to commission of

disobedience or criminal offence ﬁled

by or against the Promoter or Director

of Organized Institution.

No such information has been

received.

of ﬁnancial crime ﬁled against any

Promoter or Director.

No such information has been

received.

5. Analysis of share transaction and

progress of Organized Institution

a) Management view on share transaction

of the Organized Institution happened

at Securities Market.

Price and transactions of the Bank’s

shares are being determined by the

open share market operations through

a duly established Stock Exchange.

Managements view on this is neutral.

(b) Maximum, minimum and last share

price of Organized Institution including

total transacted number of shares and

transacted day during each quarter of

last FY 2071/72.

Ashwin end:

Maximum- Rs. 3094, Minimum- Rs.

2000, Last- Rs. 2095 total number

of shares traded – 158113 and

transacted days - 54 respectively.

Poush end:

Maximum- Rs. 2,190, Minimum- Rs.

1,710, Last- Rs. 1,920 total number

of shares traded – 101,149 and

transacted days - 58.

Chaitra end:

Maximum- Rs. 2,185, Minimum- Rs.

1,800, Last- Rs. 1,959 total number

of shares traded – 315,508 and

transacted days - 57.

Ashadh end:

Maximum- Rs. 2,015, Minimum- Rs.

1,639 Last- Rs. 1,943 total number

of shares traded – 86,369 and

transacted days -45

6. Problem and Challenge

INTERNAL

1. Rise in cost of operations.

2. Managing expectations of

internal stakeholders.

EXTERNAL

1. Unstable socio-political environment.

2. Deteriorating risk environment.

3. Growing local competition.

4. Cost of Regulatory Compliance.

STRATEGY

1. Proactively monitor the internal and

external environmental changes.

2. Continue to address expectations

of internal stakeholders.

3. Continuous enhancement in

products and services to exceed

customer expectations.

4. Achieve service excellence.

5. Strict portfolio management.

7. Corporate Governance

Incorporated in detail under

corporate Governance section in this

annual report.

Corporate governance

Standard Chartered Annual Report 2014-2015

Sujit Mundul

Director

Sujit Mundul, Director of the Bank,

holds the degree of M.Sc., BA

(Hons) in Economics & English, LLB,

CAIIB and AIB. He also served as a

Lecturer in Kolkata and possesses

over 41 years of banking experience

with SCB in different senior

positions.

Board of Directors

Sunil Kaushal

Chairman

Sunil Kaushal, Chairman of the Bank, is the Regional Chief

Executive, India & South Asia of Standard Chartered Bank.

He has over 28 years of banking experience. Prior to moving

into his current role, Sunil was the President and CEO of SCB

(Taiwan) Ltd. He has also assumed the roles of Global Head SME

and New Ventures based in Singapore and Head of Corporate

Banking in UAE. Sunil holds a Bachelor of Commerce degree

from Bombay University, India. He also holds a post-graduate

qualiﬁcation as a Chartered Accountant from the Institute of

Chartered Accountants of India. Sunil has completed general

management courses at Harvard Business School, INSEAD,

Oxford University, and London Business School.

Joseph Silvanus

Director & Chief Executive Ofﬁcer

Joseph Silvanus has been with Standard

Chartered Bank for more than 24 years.

He had earlier assumed the role of CEO

Afghanistan, and the Regional Head,

Development Organizations, Southern Asia.

Prior to joining the Bank, he also worked

with other renowned organizations like Pepsi

Foods and Voltas in India. He holds a Post

Graduate degree in Management and an

honours degree in Economics.

Anurag Adlakha

Director

Anurag Adlakha, Director of the Bank, is a

Chartered Accountant by profession. He

has over 29 years of professional career

of which 22 years in ﬁnancial services

industry including HSBC India. He is

presently working as the Chief Financial

Ofﬁcer, India and South Asia.

Krishna Kumar Pradhan

Professional Director

Krishna Kumar Pradhan has been in the Board of the

Bank since May 2014 in the capacity of a Professional

Director. Prior to this assignment, he served in Nabil

Investment Banking Limited as an Independent Director.

He has also served at Naya Nepal Laghu Bitta Bikas

Bank, Dhulikhel and Micro Finance Training and Research

Institute (MIFTARI) Pvt. Ltd. in the capacity of Chairman.

He has more than 28 years of service experience in Nepal

Rastra Bank, mainly in the areas of Development Finance,

Rural ﬁnance, Micro ﬁnance, Regulation etc.

Amrit Kumari Thapa

Public Director

Amrit Kumari Thapa, Public Director

is Masters in Business Administration

with specialisation in Budgeting,

Proﬁt Planning & Control, Tax Laws

and Tax Planning. She was earlier the

Director in Synchro Media Pvt. Ltd.

and the MD of Vibes Media Pvt. Ltd.,

Kathmandu. She was also associated

with Princeton College in the capacity

of Instructor cum Teacher.

Corporate governance

Standard Chartered Annual Report 2014-2015

Management Team

SHOBHA BAHADUR RANA

Head - Legal and Compliance

SUJIT SHRESTHA

Chief Information Ofﬁcer

GORAKH RANA

Head - Commercial Banking

& International Corporates

JOSEPH SILVANUS

Chief Executive Ofﬁcer & Head Retail Banking

BINA RANA

Head - Human Resources

SURAJ LAMICHHANE

Financial Controllor

GOPI BHANDARI

Chief Risk Ofﬁcer and Senior Credit Ofﬁcer

DIWAKAR POUDEL

Head - Brand & Marketing and Corporate Affairs

Corporate governance

Standard Chartered Annual Report 2014-2015

Sustainability and our business

Using our position as a leading ﬁnancial institution, we are

committed to promoting positive social and economic

development in the countries where we operate.

Sustainability to us is not just about using less energy, or raising

money for good causes, although we are proud of our efforts in

both. Sustainability is embedded in our brand promise, Here for

good, and affects every single thing we do: the way we make

decisions, the contribution we make to local economies and the

impact that we have when we bank the people and companies

driving investment, trade and the creation of wealth across Asia,

Africa and the Middle East.

Our ambition is to be the world’s best international bank.

This means getting the basics right: being ﬁnancially stable,

continuously improving our governance and seizing the

opportunities presented by our markets to provide and promote

sustainable economic growth.

Our approach continues to focus on three key priorities:

contributing to sustainable economic growth, being a responsible

company and investing in communities.

Financial crime prevention

Financial crime hinders economic progress and harms

individuals and communities. We strive to have the most

effective ﬁnancial crime compliance programmes in order to

protect our clients, employees and the places where we do

business. Our goal is to prove that we are leading the way in

combating ﬁnancial crime, while providing a quality service for

our clients. Over the past two years, the Group has dedicated

substantial leadership attention, investment and training to

ﬁnancial crime compliance. In 2014, we more than doubled

the staff working in Financial Crime Compliance and hired

industry leaders into the function. Each year more than 80,000

employees complete training to prevent bribery, corruption

and money laundering. While we have made progress, we still

have more to do to ensure our own behaviours and processes

are operating above regulatory standards. Our commitment to

this work is absolute.

Responsible selling and marketing

Supporting the needs of our clients and delivering a high-quality

client experience is a priority across the business. We focus

on treating clients fairly and work closely with them to deliver

appropriate and suitable products. We have robust global

policies and procedures in place to make sure that complaints are

identiﬁed and resolved quickly. To support our continual focus on

conduct, in 2014 we exited our engagement of third-party vendors

as representatives of the Group for the sale of our retail products.

Sustainability

Our social and economic contribution

Environment

We seek to minimise the impact of our operations on the

environment. In 2014, Standard Chartered reduced its energy use

intensity by 4 per cent, its water use intensity by 3 per cent and its

ofﬁce paper use by 6 per cent per full-time employee. The Bank

remains broadly on track to meet its respective committed targets.

To manage energy and water use across its properties, in 2014

we collaborated with landlords to make sure that 34 per cent of

our new and renewed leases are green. We are working towards

accelerating energy and water savings across our property

footprint.

Suppliers

We made further progress in engaging our suppliers to meet

leading environmental and social standards by joining the United

Nations Global Compact (UNGC) Supply Chain Sustainability

Workstream in 2014. In addition to adhering to our Supplier

Charter established in 2012, we encourage our suppliers to adopt

the 10 UNGC principles relating to issues such as human rights

and labour.

Investing in communities

Promoting the social and economic development of

communities is fundamental to our strategy supporting

sustainable economic growth in our markets. In 2014, we

invested $64.2 million, or the equivalent of 1.06 per cent of

our 2013 operating proﬁt, in community programmes. Our

programmes focus on health and education, with youth as a

target demographic. We support emergency response efforts

across our markets.

Community programmes

The economic prosperity of a community depends on a healthy

and productive population. Seeing is Believing (SiB), Standard

Chartered’s ﬂagship community programme, provides funding

to address avoidable blindness and promote quality eye health.

Through fundraising and bank matching, the Bank raised $10

million in 2014. From 2003 to 2014, the Bank raised more than

$79.4 million and reached 65.8 million people. In 2014, the Bank

awarded nine grants from the SiB Innovation Fund to promote and

develop pioneering solutions to tackle blindness around the world.

Our performance reviews

have taken into account the

extent to which our employees

demonstrate our values through

their everyday actions.

Corporate governance

Standard Chartered Annual Report 2014-2015

For Nepal, Standard Chartered Bank is funding a major expansion

project being undertaken by Tilganga Institute of Ophthalmology

(TIO). The Bank has agreed to grant USD 1,000,000 to fund the

TIO’s project titled ‘Upgrading the facilities at District Community

Eye Centres (DCEC) for sustainable eye care in rural and semi-

urban Districts’ covering the areas of Bhaktapur and Nuwakot

districts for the period 2014 to 2018. The project aims to reduce

avoidable blindness by developing a surgical facility in rural and

semi-urban areas. The objective of the project is to construct two

permanent eye centres in two districts: upgrade Bhaktapur District

Community Eye Centre (DCEC) into Secondary Level Eye Centre

(SLEC) and upgrade Nuwakot DCEC into a periodic surgical

facility. The project also aims to create an awareness of eye care

among school teachers through training program; train 750

primary school teachers on basic eye care; screen school children

and supply 3,810 spectacles and provide cataract surgery service

to people in need through cross-subsidy model.

Standard Chartered’s Living with HIV (LwHIV) programme

marked 15 years of providing education on HIV and AIDS to its

staff and communities in 2014. The Bank focused on ‘Positive

Living’ initiatives across its markets, encouraging colleagues to

get involved in reducing the fear and stigma associated with HIV

and AIDS. Bank’s employees delivered over 5,000 volunteering

days for LwHIV in 2014, an increase of 15 per cent over 2013.

The Bank established a partnership with the MTV Staying Alive

Foundation to provide funding to organisations delivering local

education and awareness programmes on HIV and AIDS in

several of its markets. Standard Chartered Nepal has a pool of 12

HIV Champions who are consistently working with the community

in creating awareness around the subject.

Education provides opportunities for individuals and communities.

Goal, Standard Chartered’s leading education programme,

combines sports with life-skills training to empower girls with

the conﬁdence, knowledge and skills they need to be integral

economic leaders in their families and communities. The Bank

reached more than 50,000 girls across 24 markets in 2014. From

2006 to 2014, the Bank empowered nearly 146,000 girls. The

Bank is contemplating launch of Goal program in Nepal in the near

future.

Standard Chartered’s global Financial Education for Youth

programme trained over 13,100 young people across 15

markets in 2014. Alongside this, the Bank expanded its

Education for Entrepreneurs training programme by developing

a training toolkit enabling staff volunteers to deliver sessions

on ﬁnancial management to micro and small businesses in its

communities. In 2014, the programme ran in eight markets

and reached 835 entrepreneurs. Standard Chartered Nepal

pioneered Financial Literacy program in Nepal in partnership

with World Vision Nepal (WVN) and provided education to

around 300 youths identiﬁed by WVN in Lalitpur district. The

Bank is organising regular sessions on Financial Literacy to the

students of various schools in Kathmandu and Lalitpur.

Standard Chartered Bank provides emergency response and

support reconstruction efforts across its markets. In 2014,

the Bank contributed more than $700,000 to relief efforts

focusing on ﬂood recovery in several countries in Asia and

the Ebola Virus Disease (EVD) in West Africa. To support the

local and international EVD response, the Bank is utilising its

local banking network to open accounts for aid organisations

and to process payments for health workers. We also joined

together with other private sector companies and signed the

UN Business Action Pledge on Ebola Elimination.

Standard Chartered Bank’s contribution on Nepal’s relief,

rehabilitation and reconstruction project, post massive

earthquakes in Nepal in April and May 2015, is explained in

detail in the succeeding section.

Earthquake: Relief & Reconstruction Project

The Bank raised over USD 670,000 including Bank matching

across our markets. USD 271,000 of the total was donated

to the Red Cross and Red Crescent Society of the UAE for

immediate relief such as emergency search and rescue and

ﬁrst-aid. Also we funded specialist health teams for healthcare

provision, mass water treatment facilities and mobile clinics.

The rest of the funds were utilised through partnerships with

Habitat for Humanity and the wider Habitat for Humanity

Group of companies for reconstruction efforts. Habitat’s “Build

Nepal” strategy is aligned with the National Reconstruction

Authority policy for the government of Nepal, which will

focus on an owner driven approach for reconstructing

houses. The “Build Nepal” strategy consists of four pillars:

Social Mobilization (empowering communities to join and

rebuild), Technical Assistance (training to provide improved

construction skills for safer reconstruction), Tiered Assistance

(providing vulnerable households non-ﬁnancial support for

Sustainability

The Bank has a Diversity and

Inclusion council which is actively

engaged in addressing different

strands of diversity.

income generating activities so that they can build their own

capacity) and Market Development (improving housing value

through access to better construction materials and labor).

The ‘Technical Assistance’ project is expected to commence

in Q3 2016 and run for 18-24 months. We are integrating

local staff volunteering over the coming period. An SCB

Graduate Alumni EV build is being planned for Q4 2016.

Employee volunteering

The Bank supports its local communities by encouraging

its staff to volunteer their time and skills, and seeking to

maximise Bank’s impact by encouraging skills-based

volunteering. All the Bank’s employees are entitled to three

days of paid volunteering leave annually.

With an aim to drive Employee Volunteering agenda, the Bank

organised various programs that saw active participation from

the staff. Employee Volunteering was conducted in various

areas viz. relief and rubble clearance after the earthquake, eye

camps, ﬁnancial literacy, Living with HIV/AIDS workshops,

environmental activities, visits to shelter homes, schools and

other needy organisations etc. Our aim is to provide thrust on

employee volunteering through the earthquake rehabilitation

project being undertaken with Habitat for Humanity.

The Bank achieved EV days of 505 against a target of 480 EV

days in 2014.

Corporate governance

Standard Chartered Annual Report 2014-2015

A summary of activities conducted during

FYE 2014/15

l Tree plantation at Bishankhu Narayan community area

on 30 August 2014 and 27 June 2015. We have been

working with the local community of Bishankhu Narayan

and have been planting and maintaining tree saplings

numbering ~10,000. Our staff actively volunteered in the

activities.

l Celebration of Teej at Karuna Bhawan and Missionary of

Charity on 24 August in line with the initiative of our D&I

Council. The Bank also organised internal activities during

the Teej celebrations.

l A blood donation camp was organised at the behest of

Global Technology and Operations (GTO), which was

participated by over 70 staff members.

l A volunteering program was organised at Safalta Sikshya

Niketan in Kirtipur on 18 October 2014. Safalta is a school

for children Living with HIV. Stationery and other food items

were distributed to the children by our staff; our staff also

helped paint the school buildings.

l The Bank partnered with Tilganga Institute of

Ophthalmology (TIO) in celebrating the World Sight Day

on 9 October. Our staff also participated in a cycle rally

organised to mark the occasion from TIO premises to

Bhaktapur.

l The Bank signed an agreement with World Vision Nepal

(WVN) in sharing Financial Literacy sessions to the youths

identiﬁed by WVN Nepal.

l The Bank on November 22 organised its ﬂagship

fundraising event `Walkathon 2014’ with active

participation from its clients, staff, vendors, media and

other stakeholders.

l A surgical eye camp was held by TIO in Nuwakot district

on 20-22 December in partnership with the Bank. The

camp was organised in line with the Project sanctioned to

TIO under SiB Phase V program.

l International Women’s Day was organised on March 8 by

organising various internal and external events.

l An eye camp was organised at Chapacho, Thimi in

partnership with TIO on 28th of March. Staff actively

volunteered during the event.

l An awareness session on Swine Flu was held at our HO

premises by inviting Dr Sameer Mani Dixit, Director of

Research & Public Health/CMDN.

l Staff members volunteered in Walkathon organised to

mark Global Money Week on 14 th March. The Walkathon

was organised by Nepal Rastra Bank.

l Our staff members have been participating in Clean

Bagmati Campaign on a regular basis under the Bank’s

banner.

l An employee volunteering program was organised at Maiti

Nepal on May 9; the program was held with a view to help

release stress and trauma of children and women residing

in Maiti Nepal. Maiti Nepal was also handed over edible

items to overcome the food shortage because of the

earthquake.

l Staff members participated in an employee volunteering

program organised at Ganesh Memorial School,

Dukuchhap. Some essential stationery items were

distributed to children.

l #IOU campaign was launched by the Bank to reinforce

Employee Volunteering agenda in Nepal.

l Our staff members actively participated in `post earthquake

rubble removal’ initiatives organised at different places

including Bungmati village of Lalitpur. This initiative is

continuing in partnership with our Global Disaster Relief

Partner – Habitat for Humanity.

Corporate governance

Standard Chartered Annual Report 2014-2015

The Bank believes in driving high performance by working

with its people to bring out their strengths. In every step of

its way in employee engagement, performance management

and in learning and development, the Bank takes into

account the strengths, in order to create a virtuous cycle

leading to high performance.

During FY 2014/15, the Bank was able to leverage the

strengths of 40 new employees selected through Bank’s

sourcing channels viz. Internal Job Watch and SCB Career

Website. The Bank is proud of its employer brand and aims

to provide both supporting and welcoming environment to

the new hires. With an objective to offer scalable approach

by leveraging on technology, giving more time for line

managers to engage with the new hires and, to enable our

new joiners to be productive, the “On-Boarding Program”

was launched in second half of year 2014. Other than this,

as per the Bank’s mandatory requirement, Day 1 Readiness

was conducted for the new Relationship Managers in Retail

Banking.

As at the end of ﬁnancial year 2014/15, the Bank had a

strong people base of 433 with a gender mix of 62:38.

During this year, the Bank facilitated in development of

people through cross function/business moves, short

term attachment programs, internal transfers, job rotation,

succession planning and mentoring programs.

Staff Wellbeing

The Bank is Here for people – committed to making the

Bank a great place to work, focused on development,

Our People

Supporting the organisation through change

Standard Chartered Annual Report 2014-2015

growth and overall wellbeing of its people. As a proof point,

Standard Chartered Nepal is unique in the industry in providing

Day Care Centre (Crèche) and Mother’s room at its Head Ofﬁce

premises, for expecting & nursing mothers. This is a much

deserved relief to young working parents.

In addition, the Bank operates on a 5 day week basis by

enabling staff to maintain a healthy work/life balance. The Bank

also introduced industry ﬁrst initiative of providing 90 days of

maternity leave as well as provision of paternity leave for male

staff. Among the industry, Standard Chartered is also unique in

having a Health, Safety and Environment programs and policies.

Likewise, the Bank has a policy to encourage staff to work

closely with the community in which it operates; for this purpose,

in addition to the annual leave of 25 days in a calendar year,

the Bank provides 3 additional days of Employee Volunteering

Leave to its employees. These are some of the features that

differentiate Standard Chartered.

Employee Engagement and Relation

Employee engagement and relation is integral in the Bank’s

focus on its people. The Bank encourages behaviors that bring

out the very best of every employee, and assess performance

that is not only based on results, but also on how the results

were achieved. In 2014, My voice, a new global employee

survey was rolled out successfully where targeted staff

were encouraged to participate. The survey was conducted

globally with an aim to understand and measure the employee

engagement.

3939

Our commitment towards the society and community are

driven through volunteering programs. Employee volunteering

is at the heart of our unique culture and is the reason why many

of our people choose to work for us. In the calendar year 2014

our people spent 493 days in volunteering activities through

which our people contribute to a range of local initiatives,

including those aligned to our community investment strategy.

Volunteering activities for the year included blood donation,

supporting schools with LwHIV children, Financial Literacy, eye

camps and environmental initiatives.

To supplement our engagement initiatives, the Bank has

increased its efforts to improve employee relations and

communications. On a regular basis, Nepal Leadership

Team meetings, Town Halls are organized wherein employees

get updated on the Bank’s performance and also get an

opportunity to understand matters of interest to them. Similarly,

interactive sessions are organized to mark senior executive

visits. The Bank also recognizes staff for their long service by

honoring them with loyalty awards; as in previous years, staff

serving ﬁve, ten, ﬁfteen, twenty and twenty ﬁve years were

awarded this year also. Similarly engagement activities were

conducted viz. the Chairman’s Here for good Award at the

Group level and CEO’s Award at the local level, annual fund

raising event Walkathon, Family Fun Day etc.

Promoting Diversity & Inclusion

Diversity and Inclusion is Bank’s initiative that revolves around

creating a workplace culture that enables employees to

fulﬁll their potential and broaden perspectives. The initiative

brings diverse cultural and thinking styles together to enable

employees to recognize their values and skills they bring to

the Bank. Diversity and Inclusion is not conﬁned to Standard

Chartered employees, it also includes customers, clients and

communities.

During the year, the Bank enabled staff engagement through

various D&I initiatives viz. talk programs on useful topics,

Poster Competition, celebration of Teej, Bhai Tika, International

Women’s Day, World AIDS Day and World Sight Day etc.

D&I Committee of the Bank played a key role in increasing

the number of toddler enrolment and in monitoring the

management of Day Care Centre.

Learning and Development Programs

The Bank is actively engaged in unleashing strength of its

people by putting focus on their learning and development.

Growth of people remains a focal point and the Bank has

been helping its staff in drawing a career long learning and

development path to utilize their true or hidden potential.

Recognizing the fact that an individual can evaluate himself

better in learning process, the Bank has developed a process

whereby it recommends people to set and manage their own

development objectives along the 70-20-10 principle. The

Bank believes that managing development objectives enhances

an individual’s professional development and career potential

and provides its people with access to tools and learning

resources that can support their development.

As in the past, the Bank provided opportunities of learning

and development for its people through various learning

channels viz. paper based, web based, classroom and through

phone. Launch of Right Start Live session for new joiners,

general induction within one week of joining and Train the

Facilitator session are few initiatives that were organized this

year. Apart from this, the initiatives such as Day 1 Readiness

for Relationship Managers, Master Class and Learn & Grow

sessions, Group & local programs and other in-house programs

also received continuity.

Corporate governance

Standard Chartered Annual Report 2014-2015

Branch Network

KATHMANDU

Boudha

Branch - Boudha

Bhatbhateni Premises (Ground Floor)

Chuchhepati, Boudha-7, Kathmandu, Nepal

Tel: 977-1-4481819/4481822

Fax: 977-1-4481821

Lazimpat

Branch- Lazimpat

PO Box 3990, Lazimpat, Kathmandu, Nepal

Tel: 977-1-4418456

Fax: 977-1-4417428

Naya Baneshwor

Branch- Naya Baneshwor

PO Box 3990, Naya Baneshwor,

Kathmandu,Nepal

Tel:977-1-4782333, 4783753

Fax: 977-1-4780762

New Road

Branch- 1st Floor, 22, People’s

Plaza (Pako Wing) Pako,

New Road Kathmandu,Nepal

Tel: 977-1-4157527/28

Fax: 977-1-4157530

LALITPUR

Branch- Jawalakhel, Lalitpur

PO Box 3990, Jawalakhel, Lalitpur, Nepal

Tel: 977-1-5540544, 5540566

Fax: 977-1-5523266

BIRATNAGAR

Branch- Biratnagar, Morang

PO Box 201, Main Road, Biratnagar-3, Nepal

Tel: 977-21-528983

Fax: 977-21-528982

BIRGUNJ

Branch- Birgunj

Adarsha Nagar 13, Birgunj, Nepal

Tel: 051-529494

Fax: 051-529677

BUTWAL

Branch-Butwal, Rupandehi

Milan Chowk, Butwal Municipality-11,

Rupandehi, Nepal

Tel: 977-71-546832

Fax: 977-71-546882

DHARAN

Branch- Dharan, Sunsari, Panna Kamala

Complex, Ward No 7/100 Ka, Buddha Marga,

Dharan-7 Sunsari, Nepal

Tel: 977-25-520505, 530980

Fax: 977-25-530981

POKHARA

Pokhara- New Road

Branch- New Road Pokhara, Nepal

PO Box 08

Tel: +977-061-523875, 523876, 536231, 524297

Fax: +977-061-531676

NARAYANGARH

Branch- Lions Chowk Bharatpur Height,

Narayangarh, Nepal

Tel: 056-571277/8

Fax: 056-571279

NEPALGUNJ

Branch-Nepalgunj, Banke

Surkhet Road, Ward No 13,

Nepalgunj Banke, Nepal

Tel: 977-81-525514,520022

Fax: 977-81-525515

KATHMANDU

Maharajgunj

Saleways Department Store

Maharajgunj, Kathmandu

Boudha

Near main entrance of

Boudhanath stupa, Kathmandu

Durbar Marg

Hotel De'l Annapurna,

Durbar Marg, Kathmandu

New Road

Bishal Bazaar, New Road, Kathmandu

Naya Baneshwor

Standard Chartered Bank Nepal Ltd.

Naya Baneshwor, Kathmandu

Jawalakhel, Lalitpur

Standard Chartered Bank Nepal Ltd

Jawalakhel, Lalitpur

UN Building

Standard Chartered Bank Nepal Ltd.,

UN Counter,

Pulchowk, Lalitpur

Standard Chartered Bank Nepal

Limited,

Near UNDP Complex, Lalitpur

Thamel

Fire Club Building, Hot Bread Chowk,

Chaksibari Marg Thamel, Kathmandu

Kathmandu Guest House,

Thamel, Kathmandu

Lazimpat

Standard Chartered Bank Nepal Ltd.

Lazimpat, Kathmandu

DHARAN

Standard Chartered Bank Nepal Limited,

Dharan

BPKIHS

B P Koirala Institute of Health Science

Dharan

BIRATNAGAR

Standard Chartered Bank Nepal Ltd,

Biratnagar

BIRGUNJ

Standard Chartered Bank Nepal Limited,

Birgunj

NARAYANGARH

Standard Chartered Bank

Nepal Limited, Narayangarh

POKHARA

New Road

Branch Pokhara, Nepal

Lake side

ATM Lounge, Centre Point

Hallan Chowk, Lakeside,

Pokhara

BUTWAL

Standard Chartered Bank

Nepal Limited, Butwal

Extension Counters

UN Counter

UN Building, Lalitpur

Tel: 977-1-5537134

Fax No: 977-1-5540512

British Gurkhas,

PPO Pokhara

Tel: 977-61-440517

Fax No: 977-61-440517

US Embassy

Embassy Premises

Maharajgunj

Kathmandu

ATM Network

Financial statements and notes

1. We have audited the accompanying ﬁnancial statements of

Standard Chartered Bank Nepal Limited, which comprise the

Balance Sheet as at Ashadh 31, 2072 (July 16, 2015), and

the Proﬁt and Loss Account, Proﬁt and Loss Appropriation

Account, Statement of Changes in Equity and Cash Flow

Statement for the year then ended, and a Summary of

signiﬁcant Accounting Policies and other explanatory notes.

Management’s Responsibility for the Financial

Statements

2. Management is responsible for the preparation and fair

presentation of these ﬁnancial Statements in accordance

with Nepal Accounting Standards. This responsibility

includes: designing, implementing and maintaining internal

control relevant to the preparation and presentation of

ﬁnancial statements that are free from material misstatement,

whether due to fraud or error; selecting and applying

appropriate accounting policies; and making accounting

estimates that are reasonable in the circumstances.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these

ﬁnancial statements based on our audit. We conducted

our audit in accordance with Nepal Standards on

Auditing. Those Standards require that we comply with

ethical requirements and plan and perform the audit to

obtain reasonable assurance about whether the ﬁnancial

statements are free of material misstatement.

An audit involves performing procedures to obtain audit

evidence about the amounts and disclosures in the ﬁnancial

statements. The procedures selected depend on our

professional judgment, including the assessment of the risks

of material misstatement of the ﬁnancial statements, whether

due to fraud or error. In making those risk assessments,

we consider the internal control relevant to the Bank’s

preparation and fair presentation of the ﬁnancial statements

in order to design audit procedures that are appropriate in

the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of Bank’s internal control.

An audit also includes evaluating the appropriateness of

the accounting policies used and the reasonableness of

accounting estimates made by the management, as well as

evaluating the overall presentation of the ﬁnancial statements.

We believe that the audit evidence we have obtained is sufﬁcient

and appropriate to provide a basis for our audit opinion.

Opinion

4. In our opinion, the accompanying ﬁnancial statements

give a true and fair view, in all material respects, the

Date: February 22, 2016

Place: Kathmandu

CA. Sudarshan Raj Pandey

Senior Partner

S. R. Pandey & Co.

Chartered Accountants

Radha Krishna Marg, New Baneshwor

P.O. Box No. 2343

Kathmandu, Nepal

Tel. : 2104600, 2104700

Fax : 977-1-4491187

e-mail : [email protected]

ﬁnancial position of Standard Chartered Bank Nepal Limited

as at Ashadh 31, 2072 (16 July, 2015) and of the results of

its ﬁnancial performance and its cash ﬂows for the year then

ended in accordance with Nepal Accounting Standards-

so far as applicable in compliance with the prevailing Laws

and comply with Company Act 2063, Banks and Financial

Institutions Act, 2063 and Directives of Nepal Rastra Bank.

Report on Other Legal and Regulatory

Requirements

5. On the basis of our examination, we would like to further report that:

i. We have obtained all the information and explanations, which

were considered necessary for the purpose for our audit.

ii. The Balance Sheet, Proﬁt and Loss Account, Proﬁt and Loss

Appropriation Account, Statement of Changes in Equity, Cash

Flow Statement and attached Schedules dealt with by this report

are prepared as per Directives of Nepal Rastra Bank and are in

agreement with the books of account maintained by the Bank.

iii. In our opinion, proper books of accounts as required

by the law have been kept by the Bank. The Bank has

accounted for Interest Income from Loans & Advances on

cash basis as per Nepal Rastra Bank’s Directives.

iv. During our examination of the books of account of the Bank,

we have not come across the cases where the Board of

Directors or any member thereof or any representative or any

ofﬁce holder or any employee of the Bank has acted contrary

to the provisions of law or caused loss or damage to the Bank.

v. The operations of the Bank were within its jurisdiction

vi. In our opinion, so far as it appeared from our examination of

the book, the Bank has maintained adequate capital funds

and adequate provisions for possible impairment of assets

in accordance with the directives of Nepal Rastra Bank;

vii. The Bank has written-off loans amounting Nrs. 3,136,687

during F/Y 2014/15;

viii. The Bank has been functioning as per the directives of

Nepal Rastra Bank.

ix. The Bank has not acted in a manner to jeopardize the

interest and security of the depositors and shareholders.

x. The returns received from branches of the Bank though the

statements are independently not audited were adequate

for the purpose of our audit, and

xi. We have not come across any fraudulence in the accounts,

so far as it appeared from our examination of the book.

xii. This Audit Report replaces Audit Report issued by us on

December 7, 2015 as the board of directors decided to

propose 25% and 19.21% bonus share and cash dividend

respectively on Paid up Capital as of July 16, 2015

replacing earlier proposal of 15% and 27.11% respectively

vide their meeting dated February 22, 2016.

REPORT OF THE INDEPENDENT AUDITORS

TO THE SHAREHOLDERS OF STANDARD CHARTERED BANK NEPAL LIMITED

Standard Chartered Annual Report 2014-2015

Balance Sheet

As at 16 July, 2015 (31 Ashadh

Contingent Liabilities Schedule 4.17

Declaration of Directors Schedule 4.29

Capital Adequacy Table Schedule 4.30 (Ka 1)

Statement of Credit Risk Schedule 4.30 (Kha)

Statement of Eligible Credit Risk Mitigation Schedule 4.30 (Ga)

Statement of Operational Risk Schedule 4.30 (Gha)

Statement of Market Risk Schedule 4.30 (Nga)

Key Indicators Schedule 4.31

Signiﬁcant Accounting Policies Schedule 4.32

Notes to Accounts Schedule 4.33

Capital & Liabilities Schedule This Year Rs. Previous Year Rs.

1. Share Capital 4.1 2,810,201,500 2,245,839,200

2. Reserves and Funds 4.2 3,138,353,154 2,842,251,698

3. Debentures and Bonds 4.3 - -

4. Loans and Borrowings 4.4 - -

5. Deposit Liability 4.5 57,286,482,037 46,298,532,040

6. Bills Payables 4.6 177,086,075 67,439,885

7. Proposed Dividend 431,883,592 847,293,880

8. Income Tax Liability - -

9. Other Liabilities 4.7 1,082,798,762 1,022,745,469

Total Liabilities 64,926,805,120 53,324,102,172

Assets Schedule This Year Rs. Previous Year Rs.

1. Cash Balance 4.8 785,636,090 613,768,499

2. Balance with Nepal Rastra Bank 4.9 9,308,116,260 6,862,452,256

3. Balance with Banks/Financial Institutions 4.10 1,478,689,578 1,712,083,452

4. Money at Call and Short Notice 4.11 11,973,546,000 7,960,305,000

5. Investments 4.12 12,971,231,533 9,391,378,664

6. Loans, Advances and Bills Purchased 4.13 27,681,313,256 25,976,584,629

7. Fixed Assets 4.14 83,853,400 68,725,873

8. Non-Banking Assets 4.15 - -

9. Other Assets 4.16 644,419,003 738,803,799

Total Assets 64,926,805,120 53,324,102,172

Suraj Lamichhane

Financial Controller

Sujit Mundul

Director

Krishna Kumar Pradhan

Director

Amrit Kumari Thapa

Director

Joseph Silvanus

CEO & Director

CA. Sudarshan Raj Pandey

Partner

For and on behalf of

S.R. Pandey & Co

Chartered Accountants

As per our report of even date

Schedules 4.1 to 4.17 form integral part of the Balance Sheet

Date: February 22, 2016

Financial statements and notes

Proﬁt and Loss Account

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadhh 2072)

Particulars Schedule This Year Rs. Previous Year Rs.

1. Interest Income 4.18 2,574,590,303 2,583,957,771

2. Interest Expenses 4.19 661,074,838 576,298,811

Net Interest Income 1,913,515,465 2,007,658,960

3. Commission and Discount 4.20 362,963,897 383,611,041

4. Other Operating Incomes 4.21 38,009,978 44,156,805

5. Exchange Fluctuation Income 4.22 613,935,937 477,996,116

Total Operating Income 2,928,425,277 2,913,422,922

6. Staff Expenses 4.23 505,669,073 482,083,447

7. Other Operating Expenses 4.24 407,054,157 368,029,767

8. Exchange Fluctuation Loss 4.22 - -

Operating Proﬁt Before Provision for Possible Loss 2,015,702,047 2,063,309,708

9. Provision for Possible Losses 4.25 188,682,237 84,400,931

Operating Proﬁt 1,827,019,810 1,978,908,777

10. Non-Operating Income/ (Loss) 4.26 63,860,761 51,873,871

11. Provision for Possible Loss Written Back 4.27 149,688,331 63,530,968

Proﬁt from Ordinary Activities 2,040,568,902 2,094,313,616

12. Income/(Expenses) from Extra Ordinary Activities 4.28 17,525,496 (1,523,804)

Net Proﬁt after considering all Activities 2,058,094,398 2,092,789,812

13. Provision for Staff Bonus 187,099,491 190,253,619

14. Provision for Income Tax 580,969,559 565,947,006

Current Year's Tax Provision 586,716,733 571,524,721

Upto Previous Year's Tax Provision 7,746,200 2,367,159

Current Year's Deferred Tax Income/Expenses (13,493,374) (7,944,874)

Net Proﬁt/Loss 1,290,025,348 1,336,589,187

Schedules 4.18 to 4.28 form integral part of this Proﬁt and Loss Account

As per our report of even date

Sujit Mundul

Director

Krishna Kumar Pradhan

Director

Amrit Kumari Thapa

Director

Joseph Silvanus

CEO & Director

CA. Sudarshan Raj Pandey

Partner

For and on behalf of

S.R. Pandey & Co

Chartered Accountants

Date: February 22, 2016

Suraj Lamichhane

Financial Controller

Standard Chartered Annual Report 2014-2015

Proﬁt and Loss Appropriation Account

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadhh 2072)

Particulars Schedule This Year Rs. Previous Year Rs.

Income

1. Accumulated Proﬁt up to Previous Year 10,028,482 31,582,090

2. This Year's Proﬁt 1,290,025,348 1,336,589,187

3. Exchange Fluctuation Fund - -

Total 1,300,053,830 1,368,171,277

Expenses

1. Accumulated Loss up to Previous Year - -

2. Current Year's Loss - -

3. General Reserve Fund 258,005,070 267,317,837

4. Contingent Reserve - -

5. Institutional Development Fund - -

6. Dividend Equalisation Fund - -

7. Employees Related Reserves - -

8. Proposed Dividend 431,883,592 847,293,880

9. Proposed Issue of Bonus Shares 562,040,300 204,167,200

10. Special Reserve Fund - -

11. Exchange Fluctuation Fund 23,883,456 25,742,140

12. Capital Redemption Reserve Fund - -

13. Capital Adjustment Fund - -

14. Deferred Tax Reserve - 8,159,238

15. Investment Adjustment Reserve - 5,462,500

Total 1,275,812,418 1,358,142,795

Accumulated Proﬁt/(Loss) 24,241,412 10,028,482

As per our report of even date

Sujit Mundul

Director

Krishna Kumar Pradhan

Director

Amrit Kumari Thapa

Director

Joseph Silvanus

CEO & Director

CA. Sudarshan Raj Pandey

Partner

For and on behalf of

S.R. Pandey & Co

Chartered Accountants

Suraj Lamichhane

Financial Controller

Date: February 22, 2016

Financial statements and notes

Statement of Changes in Equity

Financial Year 2071/72 (FY 2014/15)

Particulars Share Capital Accumulated

Proﬁt

General

Reserve

Capital

Reserve

Fund

Premium

Exchange

Fluctuation

Fund

Deferred

Tax

Reserve

Investment

Adjustment

Reserve

Other

Reserve &

Fund

Total

Opening Balance as at

17 July 2014

2,245,839,200 10,028,482 2,381,024,791 - - 360,597,688 89,556,937 1,043,800 - 5,088,090,898

Adjustments

- - - - - - - - -

Restated Balance as at 17

July 2014

2,245,839,200 10,028,482 2,381,024,791 - - 360,597,688 89,556,937 1,043,800 - 5,088,090,898

Surplus/ Deﬁcit on revalua-

tion of properties

- - - - - - - -

Surplus/ Deﬁcit on revalua-

tion of investments

- - - - - - - -

Net Proﬁt for the Period

- 1,290,025,348 - - - - - 1,290,025,348

Transfer to General

Reserve

- (258,005,070) 258,005,070 - - - - -

Proposed Dividend

- (431,883,592) - - - - - (431,883,592)

Issue of Bonus Share

- - - - - - - - -

Proposed Issue of Bonus

562,040,300 (562,040,300) - - - - - - -

Issue of Share Capital

2,322,000 - - - - - - - 2,322,000

Exchange Fluctuation

Fund

- (23,883,456) - - - 23,883,456 - -

Deferred Tax Reserve

- - - - - - - - -

Investment Adjustment

Reserve

- - -

Closing Balance as at

16 July 2015

2,810,201,500 24,241,412 2,639,029,861 - - 384,481,144 89,556,937 1,043,800 - 5,948,554,654

Standard Chartered Annual Report 2014-2015

Cash Flow Statement

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadhh

Particulars This Year Rs. Previous Year Rs.

(A) Cash Flow from Operating Activities 5,788,412,895 (699,012,314)

1. Cash Receipts 3,491,062,288 3,477,670,974

1.1 Interest Income 2,452,635,409 2,527,527,738

1.2 Commission and Discount Income 364,838,482 394,163,716

1.3 Income from Foreign Exchange Transaction 613,935,937 477,996,116

1.4 Recovery of Loan Written Off 20,662,183 33,654,248

1.5 Other Income 38,990,277 44,329,156

2. Cash Payments 3,046,411,955 2,902,524,631

2.1 Interest Expenses 649,559,280 566,675,104

2.2 Staff Expenses 661,898,109 639,269,612

2.3 Ofﬁce Operating Expenses 337,196,537 374,505,641

2.4 Income tax Payment 569,217,536 597,857,391

2.5 Other Expenses 828,540,493 724,216,883

Cash Flow before Changes in Working Capital 444,650,333 575,146,343

Decrease/ (Increase) of Current Assets (5,717,708,259) (8,209,428,275)

1. Decrease / (Increase) in Money at Call and Short Notice (4,013,241,000) (4,951,241,000)

2. Decrease / (Increase) in Short-term Investment - -

3. Decrease / (Increase) in Loan and Bills Purchase (1,698,598,229) (3,225,169,188)

4. Decrease / (Increase) in Other Assets (5,869,030) (33,018,087)

(Decrease) /Increase of Current Liabilities 11,061,470,821 6,935,269,618

1. (Decrease) / Increase in Deposits 10,987,949,997 6,832,078,800

2. (Decrease) / Increase in Certiﬁcate of Deposits

3. (Decrease) / Increase in Short Term Borrowings - -

4. (Decrease) / Increase in Other Liabilities 73,520,824 103,190,818

(B) Cash Flow from Investment Activities (3,406,597,174) 3,479,935,740

1. Decrease/ (Increase) in Long term Investment (3,579,852,869) 3,404,442,790

2. Decrease/ (Increase) in Fixed assets 22,405,684 (213,653)

3. Interest Income from Long Term Investment 139,716,630 67,747,992

4. Dividend Income 11,133,381 7,958,611

5. Others -

1. Increase/ (Decrease) in Long term Borrowings (Bond, Debenture etc) - -

2. Increase / (Decrease) in Share Capital 2,322,000 2,382,000

3. Increase / (Decrease) in Other Liability - -

4. Increase / (Decrease) in Reﬁnance /Facilities received from Nepal Rastra Bank - -

(D) Income/Expense from change in exchange rate in Cash and Bank Balance - -

(E) Current year’s cash ﬂow from all activities 2,384,137,719 2,783,305,426

(F) Opening Cash and Bank Balance 9,188,304,208 6,404,998,782

(G) Closing Cash and Bank Balance 11,572,441,927 9,188,304,208

As per our report of even date

Anurag Adlakha

Director

Sujit Mundul

Director

Krishna Kumar Pradhan

Director

Amrit Kumari Thapa

Director

Joseph Silvanus

CEO & Director

CA. Sudarshan Raj Pandey

Partner

For and on behalf of

S.R. Pandey & Co

Chartered Accountants

Date: February 22, 2016

Suraj Lamichhane

Financial Controller

Financial statements and notes

Share Capital and Ownership

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.1:

Particulars This year Rs. Previous Year Rs.

1. Share Capital

1.1 Authorised Capital 3,000,000,000 2,041,672,000

A) 30,000,000 Ordinary Shares of Rs. 100 each 3,000,000,000 2,041,672,000

20,416,720 Ordinary Shares of Rs. 100 each (Last Year)

B) - Non-Redeemable Preference Shares of Rs. - each - -

C) - Redeemable Preference Shares of Rs. - each - -

1.2 Issued Capital 2,248,161,200 2,041,672,000

A) 22,481,612 Ordinary Shares of Rs. 100 each 2,248,161,200 2,041,672,000

20,416,720 Ordinary Shares of Rs. 100 each (Last Year)

B) - Non-Redeemable Preference Shares of Rs. - each - -

C) - Redeemable Preference Shares of Rs. - each - -

1.3 Paid Up Capital 2,248,161,200 2,041,672,000

A) 22,481,612 Ordinary Shares of Rs. 100 each 2,248,161,200 2,041,672,000

20,416,720 Ordinary Shares of Rs. 100 each (Last Year)

B) - Non-Redeemable Preference Shares of Rs. - each - -

C) - Redeemable Preference Shares of Rs. - each - -

1.4 Proposed Bonus Share 562,040,300 204,167,200

1.5 Calls in Advance - -

1.6 Total 2,810,201,500 2,245,839,200

Share Ownership Details This Year Previous Year

% Share Capital % Share Capital

1. Domestic Ownership 25.00 562,040,300 25.00 510,418,000

1.1 Government of Nepal - - - -

1.2 "Ka" Class Licensed Institutions - - - -

1.3 Other Licensed Institutions - - - -

1.4 Other Entities 0.94 21,194,100 2.50 51,099,700

1.5 Individuals 24.06 540,846,200 22.50 459,318,300

1.6 Others - - - -

2. Foreign Ownership 75.00 1,686,120,900 75.00 1,531,254,000

Total 100.00 2,248,161,200 100.00 2,041,672,000

Sn Name of the Shareholders Number of Shares Held % of Total Shares Amount Rs.

1 Standard Chartered Grindlays Ltd, Sydney, Australia 11,240,806 50.00 1,124,080,600

2 Standard Chartered Bank, London, UK 5,620,403 25.00 562,040,300

3 Priyanka Agrawal 168,437 0.75 16,843,700

4 Avinash Agrawal 168,437 0.75 16,843,700

5 Komal Agrawal 168,437 0.75 16,843,700

6 Sashi Agrawal 168,437 0.75 16,843,700

7 Shankar Lal Agrawal 168,437 0.75 16,843,700

8 Arjun Bandhu Regmi 160,381 0.71 16,038,100

Details of the Shareholders holding 0.5 % or more of the Total Shares

Standard Chartered Annual Report 2014-2015

Reserves and funds

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.2:

Debentures and Bonds

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.3:

Loans and Borrowings

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.4:

Particulars This Year Rs. Previous Year Rs.

1. General Reserve Fund 2,639,029,861 2,381,024,791

2. Capital Reserve Fund - -

3. Capital Redemption Reserve - -

4. Capital Adjustment Fund - -

5. Other Reserves and Funds 90,600,737 90,600,737

5.1. Contingent Reserve - -

5.2. Institutional Development fund - -

5.3. Dividend Equalisation Fund - -

5.4. Special Reserve Fund - -

5.5. Assets Revaluation Reserve - -

5.6. Deferred Tax Reserve 89,556,937 89,556,937

5.7. Other Free Reserves - -

5.8. Other Reserves 1,043,800 1,043,800

6. Accumulated Proﬁt/ (Loss) 24,241,412 10,028,482

7. Exchange Fluctuation Fund 384,481,144 360,597,688

Total 3,138,353,154 2,842,251,698

Particulars This Year Rs. Previous Year Rs.

1 ....… Percent Bond/Debentures of Rs……….each issued on……………….and Maturing

on…………... (Outstanding balance of Redemption Reserves Rs…….. - -

2 ....… Percent Bond/Debentures of Rs………each issued on……………….and Maturing

on…………...(Outstanding balance of Redemption Reserves Rs……..

- -

Total ( 1+2 )

- -

Particulars This Year Rs. Previous Year Rs.

A. Local

1. Government of Nepal - -

2. Nepal Rastra Bank - -

3. Repo Liabilities - -

4. Inter Bank and Financial Institution - -

5. Other Institutions - -

6. Others - -

Total A

- -

B. Foreign

1. Banks - -

2. Others - -

Total B

- -

Total (A+B) - -

Financial statements and notes

Deposit Accounts

As at 16 July, 2015 (31 Ashadh

Schedule 4.5:

Particulars This Year Rs. Previous Year Rs.

1. Non-Interest Bearing Accounts

A. CURRENT DEPOSITS 16,125,878,269 12,315,435,764

1. Local Currency 10,346,421,348 6,958,489,971

1.1 Government of Nepal 42,210,593 32,228,187

1.2 "Ka" Class Licensed Institutions 113,718,380 63,923,881

1.3 Other Licensed Institutions 3,015,138 1,193,444

1.4 Other Organised Institutions 9,727,958,780 6,464,387,704

1.5 Individuals 397,094,879 335,852,097

1.6 Others 62,423,578 60,904,658

2 Foreign Currency 5,779,456,921 5,356,945,793

2.1 Government of Nepal 543,311,257 40,019,482

2.2 "Ka" Class Licensed Institutions 27,464,539 28,953,892

2.3 Other Licensed Institutions - -

2.4 Other Organised Institutions 5,049,962,827 5,120,012,628

2.5 Individuals 157,347,867 166,462,250

2.6 Others 1,370,431 1,497,541

B. MARGIN DEPOSITS 699,771,413 1,704,085,424

1. Employees Guarantee

2. Guarantee Margin 245,449,096 149,893,921

3. Letter of Credit Margin 366,362,012 1,214,997,525

4. Others 87,960,305 339,193,978

C. OTHERS - 1,203,325

1. Local Currency - 1,203,325

1.1 Financial Institutions - -

1.2 Other Organised Institutions - -

1.3 Individuals 1,203,325

2. Foreign Currency - -

2.1 Financial Institutions - -

2.2 Other Organised Institutions -

2.3 Individuals - -

Total of Non-Interest Bearing Accounts 16,825,649,682 14,020,724,513

Standard Chartered Annual Report 2014-2015

Deposit Accounts (Continued)

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.5:

Particulars This Year Rs. Previous Year Rs.

2. Interest Bearing Accounts

A. SAVING DEPOSITS 23,476,443,903 19,526,973,458

1. Local Currency 20,255,644,884 16,584,064,416

1.1 Organised Institutions 2,491,036,663 1,343,587,055

1.2 Individuals 17,763,797,462 15,238,090,246

1.3 Others 810,759 2,387,115

2. Foreign Currency 3,220,799,019 2,942,909,042

2.1 Organised Institutions 216,544,298 179,891,911

2.2 Individuals 2,994,971,031 2,745,169,884

2.3 Others 9,283,690 17,847,247

B. FIXED DEPOSITS 3,117,222,841 3,075,228,539

1. Local Currency 2,848,377,590 2,344,180,984

1.1 Organised Institutions 1,497,638,756 1,114,518,425

1.2 Individuals 1,350,738,834 1,229,662,559

1.3 Others

2. Foreign Currency 268,845,251 731,047,555

2.1 Organised Institutions 255,805,543 720,157,273

2.2 Individuals 13,039,708 10,890,282

2.3 Others - -

C. CALL DEPOSITS 13,867,165,611 9,675,605,530

1. Local Currency 4,861,965,833 4,972,198,948

1.1 "Ka" Class Licensed Institutions - -

1.2 Other Licensed Institutions 3,416,125 552,921

1.3 Other Organised Institutions 4,658,229,583 4,040,943,592

1.4 Individuals 198,711,857 929,486,451

1.5 Others 1,608,268 1,215,984

2. Foreign Currency 9,005,199,778 4,703,406,582

2.1 "Ka" Class Licensed Institutions - -

2.2 Other Licensed Institutions - -

2.3 Other Organised Institutions 9,005,199,778 4,703,406,582

2.4 Individuals - -

2.5 Others - -

D. CERTIFICATE OF DEPOSITS - -

1. Organised Institutions - -

2. Individuals - -

3. Others - -

Total of Interest Bearing Accounts 40,460,832,355 32,277,807,527

Total Deposits (1+2) 57,286,482,037 46,298,532,040

Financial statements and notes

Bills Payable

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.6:

Other Liabilities

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.7:

Cash Balance

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.8:

Particulars This Year Rs. Previous Year Rs.

1. Local Currency 145,068,342 43,487,188

2. Foreign Currency 32,017,733 23,952,697

Total 177,086,075 67,439,885

Particulars This Year Rs. Previous Year Rs.

1. Pension/Gratuity Fund 127,311,630 93,287,046

2. Employees Provident Fund - -

3. Employees Welfare Fund - -

4. Provision for Staff Bonus 187,099,490 190,253,619

5. Interest Payable on Deposits 73,121,282 61,605,724

6. Interest Payable on Borrowings - -

7. Unearned Discount and Commission 193,917,906 259,415,987

8. Sundry Creditors 317,820,956 265,544,607

9. Branch Adjustment Account - -

10. Deferred Tax Liability

11. Dividend Payable 67,896,768 49,143,381

12. Others 115,630,730 103,495,105

a) Audit Fees Payable 776,060 705,509

b) Others 114,854,670 102,789,596

Total 1,082,798,762 1,022,745,469

Particulars This Year Rs. Previous Year Rs.

1. Local Currency (including coins) 629,564,134 558,692,370

2. Foreign Currency 156,071,956 55,076,129

Total 785,636,090 613,768,499

Standard Chartered Annual Report 2014-2015

Balance with Nepal Rastra Bank

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.9:

Balance with Banks / Financial Institutions

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.10:

Particulars Local

Currency

Rs.

Foreign Currency Rs. Grand Total

Rs.

Previous Year

Rs.

INR Convertible

Foreign

Currency

Total

1. Nepal Rastra Bank 9,248,094,375 - 60,021,885 60,021,885 9,308,116,260 6,862,452,256

a) Current A/C 9,248,094,375 - 60,021,885 60,021,885 9,308,116,260 6,862,452,256

b) Other A/C - - - - - -

Particulars Local

Currency

Rs.

Foreign Currency (Rs.) Grand Total

Rs.

Previous Year

Rs.

INR Convertible

Foreign

Currency

Total

1. Local Licensed Institutions 49,054,738 - - - 49,054,738 255,802,649

a. Current Account 49,054,738 - - - 49,054,738 255,802,649

b. Other Account - - - - - -

2. Foreign Banks - 213,918,529 1,215,716,311 1,429,634,840 1,429,634,840 1,456,280,803

a. Current Account - 213,918,529 1,215,716,311 1,429,634,840 1,429,634,840 1,456,280,803

b. Other Account - - - - - -

Total 49,054,738 213,918,529 1,215,716,311 1,429,634,840 1,478,689,578 1,712,083,452

Note: Balance as per the conﬁrmation and statement received from respective banks is NPR Rs 1,198,912,793.14 and the differences

have been reconciled.

Financial statements and notes

Investments

As at 16 July, 2015 (31 Ashadh

Schedule 4.12:

Money at Call and Short Notice

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.11:

Particulars This Year Rs. Previous Year Rs.

1. Local Currency - -

2. Foreign Currency 11,973,546,000 7,960,305,000

Total 11,973,546,000 7,960,305,000

Particulars Purpose This Year Rs. Previous Year Rs.

Trading Other

1.Government of Nepal Treasury Bills - 5,416,236,033 5,416,236,033 1,983,923,164

2.Government of Nepal Saving Bonds - - - -

3. Government of Nepal Others Securities - 350,000,000 350,000,000 350,000,000

4. Nepal Rastra Bank Bonds - - - -

5. Foreign Securities - - - -

6. Local Licensed Institutions - - - -

7. Foreign Banks - 7,149,070,000 7,149,070,000 7,001,530,000

8. Corporate Shares - 61,925,500 61,925,500 61,925,500

9. Corporate Debenture and Bonds - - - -

10. Other Investments - - - -

Total Investments - 12,977,231,533 12,977,231,533 9,397,378,664

Provision 6,000,000 6,000,000 6,000,000

Net Investments - 12,971,231,533 12,971,231,533 9,391,378,664

Standard Chartered Annual Report 2014-2015

Investment in Shares, Debentures and Bonds

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.12(A):

Particulars Cost Price

Rs.

As per

Market

Price Rs.

Provision

Amount

Rs.

This Year

Rs.

Year Rs.

1. Investment in Shares 61,925,500 - 6,000,000 55,925,500 55,925,500

1.1 Nepal Grameen Bikas Bank Ltd. 6,000,000 NA (Note - 2) 6,000,000 - -

600 Ordinary Shares of Rs.100 each fully paid up

1.2 Rural Micro Finance Development Centre Ltd. 52,190,000 376,028,950 - 52,190,000 52,190,000

574,090 Ordinary Shares of Rs.100 each fully paid up

(including 52,190 bonus shares fully paid up)

1.3 Credit Information Centre Ltd. 1,235,500 NA (Note - 3) - 1,235,500 1,235,500

36,599 Ordinary Shares of Rs.100 each fully paid

up (including 24,244 bonus shares fully paid up)

1.4 Nepal Clearing House Ltd. 2,500,000 NA (Note - 3) - 2,500,000 2,500,000

Ordinary Shares of Rs. 100 each fully paid up

2. Investment in Debentures and Bonds - - - - -

- - - - -

Total Investment 61,925,500 - 6,000,000 55,925,500 55,925,500

3. Provision for Loss

3.1 Upto Previous year 6,000,000

3.2 Increase/Decrease this Year -

Total Provision 6,000,000 -

Net Investments 55,925,500

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 Nepal Clearing House Ltd.

2. After the merger of Purwanchal Grameen Bikas Bank and Sudur Paschimanchal Grameen Bikas Bank along with 3 other Bikas banks, the share certiﬁcate

of the merged entity, Nepal Grameen Bikas Bank was issues to the Bank post the Balance Sheet date.

3. Shares of Credit Information Centre Ltd. and Nepal Clearing House Ltd. are not listed at the Nepal Stock Exchange Ltd. (NEPSE).

Financial statements and notes

Business Investment (Held For Trading)

As at 16 July, 2015 (31 Ashadh 2072)

Investment Held To Maturity

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.12.1:

Schedule 4.12.2:

Particulars Cost

Price Rs.

Market

Price (a)

Rs.

Current

Market

Price (b)

Rs.

This Year

Proﬁt/

(Loss)

(b-a) Rs.

Year

Proﬁt/

(Loss) Rs.

Remarks

1. Nepal Government’s Treasury Bills

2. Nepal Government’s Saving Bonds

3. Nepal Government’s Other Securities

4. Nepal Rastra Bank Bond

5. Foreign Securites

6. Shares of Domestic Licensed Institution

7. Debenture and Bond of Domestic Licensed Institution

8. Shares, Debentures and Bond of Domestic Corporates

9. Foreign Bank Investment (Placement)

10. Interbank Lending

11. Other Investments

Total Investment

Particulars Cost Price (a)

Rs.

Impairment

till Date (b)

Rs.

Impairment

this year (c)

Rs.

This Year

Proﬁt/(Loss)

(a-b-c) Rs.

Previous Year

Proﬁt/(Loss)

Rs.

Remarks

1. Nepal Government's Treasury Bills 5,416,236,033 - -

2. Nepal Government's Saving Bonds - - -

3. Nepal Government's Other Securities 350,000,000 - -

4. Nepal Rastra Bank Bond - - -

5. Foreign Securites - - -

6. Shares of Domestic Licensed

Institution

- - -

7. Debenture and Bond of Domestic

Licensed Institution

- - -

8. Shares, Debentures and Bond of

Domestic Corporates

- - -

9. Foreign Bank Investment (Placement) 7,149,070,000 - -

10. Other Investments - - - - -

Total 12,915,306,033 - - - -

Standard Chartered Annual Report 2014-2015

Business Investment (Available for Sale)

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.12.3:

Particulars Cost Price

Rs.

Market Price

(a) Rs.

Current

Market

Price (b)

Rs.

This Year

Fund Adj

(b-a) Rs.

Year Proﬁt/

(Loss) Rs.

Remarks

1. Nepal Government's Treasury Bills

2. Nepal Government's Saving Bonds

3. Nepal Government's Other Securities

4. Nepal Rastra Bank Bond

5. Foreign Securites

6. Shares of Domestic Licensed Institution 58,190,000 58,190,000 58,190,000 -

7. Debenture and Bond of Domestic Licensed

Institution

8. Shares, Debentures and Bond of Domestic

Corporates

3,735,500 3,735,500 3,735,500 -

9. Foreign Bank Investment (Placement)

10. Other Investments

Total 61,925,500 61,925,500 61,925,500 - -

The market price of the investments which are either not listed or are not actively traded are shown at cost price.

Financial statements and notes

As at 16 July, 2015 (31 Ashadh

Schedule 4.13: Classiﬁcation of Loans, Advances and Bills Purchased and Provisioning

Particulars

Loans & Advances

Bills Purchased and Discounted

This Year

Rs.

Previous Year

Rs.

Domestic

Deprived Sector

Other

Rs.

Foreign

Rs.

Total

Rs.

Insured

Rs.

Uninsured

Rs.

Domestic

Rs.

Foreign

Rs.

Total

Rs.

1. Performing Loans -

1,298,138,759 26,499,879,823 109,702,544 27,907,721,126 - 21,331,925 21,331,925 27,929,053,051 26,201,013,530

1.1 Pass 1,298,138,759 25,972,609,596 109,702,544 27,380,450,899 - 21,331,925 21,331,925 27,401,782,824 26,201,013,530

1.2 Watch list - - 527,270,227 - 527,270,227 527,270,227 -

2. Non-Performing Loans - - 94,769,956 - 94,769,956 - - - 94,769,956 127,347,934

2.1 Restructured/ Rescheduled - - - - - - - - -

2.2 Substandard 48,224,865 - 48,224,865 - - - 48,224,865 45,058,061

2.3 Doubtful 6,129,920 - 6,129,920 - - - 6,129,920 11,048,106

2.4 Loss - 40,415,171 - 40,415,171 - - - 40,415,171 71,241,767

(A) Total Loans - 1,298,138,759 26,594,649,779 109,702,544 28,002,491,082 - 21,331,925 21,331,925 28,023,823,007 26,328,361,464

3. Loan Loss Provision

3.1 Pass - 12,981,388 262,136,267 1,097,025 276,214,680 - 213,319 213,319 276,427,999 263,746,500

3.2 Watch list - 10,545,405 - 10,545,405 - 10,545,405

3.3 Rescheduled/ Restructured - - - - - -

3.4 Substandard - - 12,056,216 12,056,216 - - - 12,056,216 11,264,515

3.5 Doubtful - - 3,064,960 3,064,960 - - - 3,064,960 5,524,053

3.6 Loss - - 40,415,171 40,415,171 - - - 40,415,171 71,241,767

(B) Total Provision - 12,981,388 328,218,019 1,097,025 342,296,432 - 213,319 213,319 342,509,751 351,776,835

4. Provision up to Previous Year

4.1 Pass - 10,886,830 250,796,182 1,949,462 263,632,474 - 114,026 114,026 263,746,500 231,140,146

4.2 Watch list - - - - - - - - -

4.3 Rescheduled/Restructured loan - - - - - -

4.4. Substandard - - 11,264,515 - 11,264,515 - - - 11,264,515 21,519,759

4.5 Doubtful - - 5,524,053 - 5,524,053 - - - 5,524,053 34,317,197

4.6 Loss - 234,363 71,007,405 - 71,241,768 - - - 71,241,768 22,554,769

(C)Total Provision upto

PreviousYear

- 11,121,193 338,592,155 1,949,462 351,662,810 - 114,026 114,026 351,776,836 309,531,871

(D) Previous Year's

Provision written back

- 9,339,805 138,346,613 1,887,887 149,574,305 - 114,026 114,026 149,688,331 42,155,968

(E) This Year's additional

provision

11,200,000 127,972,476 1,035,451 140,207,927 - 213,319 213,319 140,421,246 84,400,931

Net Adjustments of the Year - 1,860,195 (10,374,136) (852,437) (9,366,378) - 99,293 99,293 (9,267,085) 42,244,964

Net Loan (A-B) - 1,285,157,371 26,266,431,760 108,605,519 27,660,194,650 - 21,118,606 21,118,606 27,681,313,256 25,976,584,629

Standard Chartered Annual Report 2014-2015

Securities Against Loan, Advance and Bills Purchased

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.13(A):

Particulars This Year Rs. Previous Year Rs.

(A) Secured 28,023,823,007 26,328,361,464

1. Movable / Immovable Assets 22,194,549,959 20,850,020,782

2. Guarantee of Local Licensed Institutions - -

3. Government Guarantee 138,807,033 138,807,033

4. Guarantee of Internationally Rated Banks 2,591,521,307 2,202,356,412

5. Export Documents - -

6. Fixed Deposit Receipts 313,732,453 456,278,449

(a) Own Fixed Deposit Receipts 3,554,202 13,185,077

(b) Fixed Deposit Receipts of Other Licensed Institutions 310,178,251 443,093,372

7. Government Securities/ Bonds 5,500,000 61,847,138

8. Counter Guarantee - -

9. Personal Guarantee - -

10. Other Securities 2,779,712,255 2,619,051,650

(B) Unsecured - -

Total 28,023,823,007 26,328,361,464

Financial statements and notes

Fixed Assets

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.14:

Particulars

Assets

This Year

Rs.

Year

Rs.

Freehold

and

Buildings

Rs.

Vehicles

Rs.

Machinery

Rs.

Ofﬁce

Equipment

Rs.

Others

Leasehold

Assets

Rs.

1. Cost

a. Balance upto Previous

Year

21,718,550 53,651,417 - 232,206,394 90,963,246 398,539,607 477,125,149

b. Addition this year - 5,216,000 - 28,688,218 4,476,818 38,381,036 1,653,349

c. Revaluation/Written-

back this year

- - -

d. Sold this year (11,294,142) - (2,644,700) (138,816) (14,077,658) (80,238,891)

e. Written-off this year - - -

Total Cost (a+b+c+d+e) 10,424,408 58,867,417 - 258,249,912 95,301,248 422,842,985.00 398,539,607

2. Depreciation

a. Upto Previous Year 7,510,567 53,651,416 - 220,459,359 59,122,948 340,744,290 406,537,554

b. For this Year 290,022 217,333 9,812,387 4,922,428 15,242,170 14,445,627

c. Depreciation on

Revaluation / Written-

back

d. Depreciation adjustment/

write back

(4,673,303) (2,644,700) (138,816) (7,456,819) (80,238,891)

Total Depreciation

(a+b+c+d)

3,127,286 53,868,749 - 227,627,046 63,906,560 348,529,641 340,744,290

3. Book Value (WDV)* (1-2) 7,297,122 4,998,668 - 30,622,866 31,394,688 74,313,344 57,795,317

4. Land 8,511,756 8,511,756 10,930,556

5. Capital Work in Progess - - 1,028,300 1,028,300 -

(To be Capitalised)

6. Leasehold Assets - - - - - - -

Total (3+4+5+6) 15,808,878 4,998,668 - 30,622,866 32,422,988 83,853,400 68,725,873

* Written Down Value.

Standard Chartered Annual Report 2014-2015

Non-Banking Assets

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.15:

Other Assets

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.16:

Name and Address of

Borrower or Party

Date of assuming

Non Banking

Assets

Total Amount of Non-

Banking Assets Rs.

Provision for Loss Net Non

Banking

Assets Rs.

Year

Rs.

% Amount Rs.

- - - - - - -

Total - - - - - -

Particulars This Year Rs. Previous Year Rs.

1. Stock of Stationery - -

2. Income Receivable on Investments 12,830,889 30,592,625

3. Accrued Interest on Loan 116,821,305 - 131,340,855

Less: Interest Suspense Amount (116,821,305) (131,340,855)

4.Commission Receivable 131,781,948 199,154,614

5. Sundry Debtors 32,421,470 19,300,961

6. Staff Loan and Advances 277,442,894 267,165,726

7. Prepayments 21,769,693 22,821,961

8. Cash in Transit - 2,825,000

9. Other Transit Items (Including Cheques) - -

10. Drafts Paid without Notice - -

11. Expenses Not Written-off 13,006,995 16,585,310

12. Branch Adjustment Account - -

13. Deferred Tax Assets 103,050,310 89,556,936

14. Others 52,114,804 90,800,666

a) Advance Income Tax (net of Provision) 18,290,410 - -

b) Others 33,824,394 - -

Total 644,419,003 738,803,799

Financial statements and notes

Other Assets (Additional Statement)

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.16 (A):

Contingent Liabilities

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.17:

Particulars This Year (Rs.) Previous Year

Up to 1 Year 1 to 3 Year Above 3 Year Total Rs.

1. Accrued Interest on Loans and Advances 110,085,141 6,736,164 - 116,821,305 131,340,855

2. Drafts Paid without Notice - - - - -

3. Branch Adjustment Account - - - - -

4. Local/Foreign Agency Account - - - - -

Particulars This Year Rs. Previous Year Rs.

1. Claims on Bank but not Acknowledged as Liabilities by the Bank 475,000 3,205,000

2. Letters of Credit (Full amount)

2,146,922,055 3,583,306,786

(a) Maturity period of less than 6 months 1,687,186,299 2,384,450,328

(b) Maturity period of more than 6 months 459,735,756 1,198,856,458

3. Rediscounted Bills - -

4. Unmatured Guarantees/Bonds

713,406,271 1,202,937,636

(a) Bid Bonds 55,694,495 641,439,575

(b) Performance Bonds 500,976,790 456,311,608

5. Unpaid amount on Investment in Shares - -

6. Outstanding Liabilities of Forward Exchange Contracts 1,377,680,957 1,100,001,164

7. Bills for Collection 608,583,127 190,019,210

8. Acceptance and Endorsements 321,817,055 488,697,485

9. Underwriting Commitment - -

10. Irrevocable Loan Commitments 6,595,213,162 3,253,749,473

11. Guarantee against Counter Guarantee of Internationally Rated Banks 10,237,012,285 11,407,849,925

12. Advance Payment Guarantee 106,464,088 154,814,650

13. Financial Guarantee 18,800,375 14,280,600

14. Contingent Liabilities on Income Tax 1,047,493 29,254,817

15. Others 929,308,410 750,778,300

Total 23,056,730,278 22,178,895,046

Standard Chartered Annual Report 2014-2015

Interest Income

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.18:

Particulars This Year Rs. Previous Year Rs.

A. On Loan, Advances and Overdraft 2,432,303,441 2,450,821,365

1. Loan and Advances 2,100,448,885 2,096,400,847

2. Overdrafts 331,854,556 354,420,518

B. On Investment 55,002,955 56,430,033

1. Government of Nepal Securities 55,002,955 56,430,033

a. Treasury Bills 32,776,104 25,216,164

b. Development Bonds 22,226,851 31,213,869

c. National Savings Certiﬁcates - -

2. Foreign Securities - -

3. Nepal Rastra Bank Bonds - -

4. Debenture and Bonds - -

5. Interest on Inter bank Investment - -

a. Financial Institutions - -

b. Other Organisations

C. On Agency Balances 3,287,053 1,065,924

1. Local Banks / Financial Institutions - -

2. Foreign Banks 3,287,053 1,065,924

D. On Money at Call and Short Notice 16,629,504 10,894,122

1. Local Banks / Financial Institutions - -

2. Foreign Banks 16,629,504 10,894,122

E. On Others 67,367,350 64,746,327

1. Certiﬁcate of Deposits - -

2. Inter-Bank / Financial Institution Loan 415,411 10,959

3. Placement with Foreign Banks 66,951,939 64,735,368

4. Others - -

Total 2,574,590,303 2,583,957,771

Financial statements and notes

Interest Expenses

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.19:

Particulars This Year Rs. Previous Year Rs.

A. On Deposit Liabilities 656,474,775 568,701,093

1. Fixed Deposits 126,196,014 121,615,422

1.1. Local Currency 123,273,637 118,265,250

1.2. Foreign Currency 2,922,377 3,350,172

2. Savings Deposits 351,352,192 357,807,717

2.1. Local Currency 339,209,517 346,575,415

2.2. Foreign Currency 12,142,675 11,232,302

3. Call Deposits 178,926,569 89,277,954

3.1. Local Currency 174,379,957 85,282,901

3.2. Foreign Currency 4,546,612 3,995,053

4. Certiﬁcate of Deposits - -

B. On Borrowings - -

1.Debentures and Bonds - -

2. Loans from Nepal Rastra Bank - -

3. Inter Bank /Financial Institutions Borrowings - -

4. Other Institutions - -

5. Other Loans - -

C. On Others 4,600,063 7,597,718

1. Premium on Development Bonds 3,578,314 3,578,314

2. Others 1,021,749 4,019,404

Total 661,074,838 576,298,811

Standard Chartered Annual Report 2014-2015

Commisssion and Discount

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.20:

Other Operating Income

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.21:

Particulars This Year Rs. Previous Year Rs.

A. Bills Purchased and Discounted 9,505,619 14,529,376

1. Domestic 83,909 73,058

2. Foreign 9,421,710 14,456,318

B. Commission 250,364,609 268,725,336

1. Letters of Credit 35,726,675 27,292,334

2. Guarantees 131,796,875 159,869,905

3. Collection Fees 9,459,424 7,400,472

4. Remittance Fees 41,528,830 44,590,156

5. Credit Cards 31,850,113 29,570,320

6. Share Underwriting/Issues - -

7. Government Transactions - -

8. E.Pra. Commission - -

9. Exchange Fees ( Batta Income) 2,692 2,149

C. Others 103,093,669 100,356,329

1. Management Fees 5,438,467 4,107,494

2. Loan Processing Fees 54,552,908 56,405,862

3. Ledger and Activity Fees 5,718 61,560

4. Commission on Travellers Cheque - 268,353

5. Others (including income from Derivatives) 43,096,576 39,513,060

Total 362,963,897 383,611,041

Particulars This Year Rs. Previous Year Rs.

1. Rental on Safe Deposit Locker 5,428,422 5,295,433

2. Issue and Renewals of Credit Cards 12,594,609 15,619,599

3. Issue and Renewals of ATM Cards 4,485,118 10,423,323

4. Telex /T.T. 14,092,392 11,703,944

5. Service Charges - -

6. Renewal Fees - -

7. Others 1,409,437 1,114,506

Total 38,009,978 44,156,805

Financial statements and notes

Exchange Fluctuation Gain/Loss

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Staff Expenses

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.22:

Schedule 4.23:

Particulars This Year Rs. Previous Year Rs.

A. Revaluation Gain 95,533,824 102,968,560

B. Trading Gain (except Batta) 518,402,113 375,027,556

Total Income (Loss) 613,935,937 477,996,116

Particulars This Year Rs. Previous Year Rs.

1. Salary 293,216,453 272,231,940

2. Allowances 1,302,054 1,275,081

3. Contribution to Provident Fund 14,319,040 12,187,092

4. Training Expenses 2,457,880 1,553,093

5. Uniform 239,484 325,405

6. Medical 6,752,729 8,885,264

7. Insurance 3,116,507 54,797

8. Pension and Gratuity Provision 58,744,097 54,522,170

9. Others 125,520,829 131,048,605

a) Staff Incentive 83,061,354 95,920,564

b) Others 42,459,475 35,128,041

Total 505,669,073 482,083,447

Standard Chartered Annual Report 2014-2015

Other Operating Expenses

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.24:

Particulars This Year Rs. Previous Year Rs.

1. House Rent 69,782,466 66,315,284

2. Light, Electricity and Water 24,424,734 28,486,688

3. Repair and Maintenance 22,246,928 16,720,223

(a) Building 5,512,993 3,241,367

(b) Vehicles 2,837,495 3,037,633

4. Insurance 14,075,192 13,927,624

5. Postage, Telex, Telephone, Fax 22,672,915 23,370,381

6. Ofﬁce Equipment, Furniture and Repair 35,381,126 22,602,946

(a) Ofﬁce Equipment and Furniture (non capitalised item) 23,923,079 11,065,703

(b) Repairs 11,458,047 11,537,243

7. Travelling Allowances and Expenses 18,013,143 22,055,987

8. Stationery and Printing 17,177,446 17,998,080

9. Periodicals and Books 175,365 123,288

10. Advertisement 16,266,874 19,935,238

11. Legal Expenses 1,275,130 384,958

12. Donations - -

13. Expenses Relating to Board of Directors 1,081,728 785,929

(a) Meeting Allowance 822,500 647,500

(b) Others Expenses 259,228 138,429

14. General Meeting Expenses 1,061,186 960,014

15. Expenses Relating to Audit 1,100,001 999,676

(a) Audit Fees 786,501 715,000

(b) Other Expenses 313,500 284,676

16. Commission on Remittances - -

17. Depreciation on Fixed Assets 15,242,170 14,445,627

18. Amortization of Pre Operating Expenses - -

19. Share Issue Expenses - -

20. Technology Support Cost (Technical Services Fees ) 48,145,906 34,256,892

21. Entertainment 2,253,612 4,030,495

22. Written Off Expenses 1,286,833 726,655

23. Security Expenses 29,870,569 32,453,537

24. Credit Guarantee Premium - -

25. Commission and Discount 10,498,989 7,714,958

26. Others 55,021,844 39,735,287

(a) Software Expenses 9,142,362 7,477,511

(b) Cleaning, Pest Control and Waste Management 11,047,370 9,823,454

(d) Other Professional Fees 12,093,940 6,374,543

(e) Hire of Vehicle and Equipments 2,977,430 2,533,245

(f) Clearing House Charges 1,887,591 1,798,083

(g) Credit information and Collection Expenses 788,594 1,666,030

(h) Others 15,975,186 9,481,048

Total 407,054,157 368,029,767

Financial statements and notes

Provision for Possible Losses

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.25:

Non Operating Income/ (Loss)

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.26:

Provision for Possible Loss Written Back

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.27:

Particulars This Year Rs. Previous Year Rs.

1. Increase in Loan Loss Provision 140,421,246 84,400,931

2. Increase in Provision for Loss on Investments -

3. Provision for Non-Banking Assets - -

4. Provision for Other Assets 48,260,991 -

Total 188,682,237 84,400,931

Particulars This Year Rs. Previous Year Rs.

1. Proﬁt (Loss) on Sale of Investment 42,303,215.00

2. Proﬁt (Loss) on Sale of Assets 51,747,081 1,439,695

3. Dividend (Net) 11,133,381 7,958,611

4. Subsidies Received from Nepal Rastra Bank - -

a. Compensation against Losses of Speciﬁed Branches - -

b. Interest Indemnity - -

c. Exchange Counter - -

5. Others 980,299 172,350

Net Non Operating Income/ (Loss) 63,860,761 51,873,871

Particulars This Year Rs. Previous Year Rs.

1. Loan Loss Provision Written Back 149,688,331 42,155,968

2. Provision against Non-Banking Assets Written Back - -

3 Investment Provision Written Back - 21,375,000

4. Provision against Other Assets Written Back - -

Total 149,688,331 63,530,968

Standard Chartered Annual Report 2014-2015

Income / (Expenses) from Extra-Ordinary Activities

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.28:

Statement of Loans Written Off

for the period 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.28 A:

Particulars This Year Rs. Previous Year Rs.

1. Recovery of Loans Written Off 20,662,183 33,654,248

2. Voluntary Retirement Scheme Expenses - -

3. Unrecoverable Loan Write Off (Schedule 4.28A) (3,136,687) (35,178,052)

4. Other Expenses/Income

Total 17,525,496 (1,523,804)

S.N Types of Loan Written off

Amount Rs.

Type of

Security

and

Amount

Rs.

Basis of

Valuation of

Security

Loan

Approving

Authority /

Designation

Initiations made for

Recovery

Remarks

1 Working Capital Loan -

2 Project Loan -

3 Fixed Capital Loan -

4 Personal Loan -

Other Loans 3,136,687

a) Credit Cards 2,902,324 None NA Manager

Credit/ Head

Retail Clients

Follow up through phone

calls, SMS, letters & visit.

Accounts written off as

per Loan Write Off Bylaws

and Collection & Recovery

Guidelines of the Bank.

Recoveries

from Current

year write off

is Rs. 505,985

and previous

Fiscal Years is

Rs. 542,855

b) Gramin Prathamik

Karja

c) Auto Loan -

d) Corporate loan 234,363 Term

loan

Manager

Credit/

GSAM Head

Total Loan 3,136,687

During the year, Bank has recovered the amount against the written off loans as shown under Remarks column.

Financial statements and notes

Statement of Loans & Advances Extended to

Directors/ Chief Executive Ofﬁcer/Promoters/Staff

and Shareholders

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.29:

The Statement of amount, included under total amount of Bills Purchased and Discounted, Loans, Advances and

Overdraft, provided to the Directors, Chief Excecutive 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/

Director/Chief Executive

Ofﬁcer

Balance upto Previous Year Recovery made This Year Additions

during the

year Rs.

Balance as at Ashadh

end

Principal

Rs.

Interest Rs. Principal

Rs.

Interest Rs. Principal

Rs.

Interest

Rs.

(A) Directors - -

(B) Chief Executive Ofﬁcer

- - - - - - -

(D) Staff

- - - - - - -

(E) Shareholders

- - - - - - -

Total - - - - - - -

Standard Chartered Annual Report 2014-2015

Capital Adequacy Table

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.30 (Ka 1):

1.1 RISK WEIGHTED EXPOSURES This Year Previous Year

A Risk Weighted Exposure for Credit Risk 41,171,574 39,210,395

B Risk Weighted Exposure for Operational Risk 4,291,049 4,135,917

C Risk Weighted Exposure for Market Risk 627,249 124,115

Adjustments Under Pillar-II

Add: 2% of the Gross Income(6.4 a 7) 582,781 -

Add: 3% of the total RWE due to non compliance to Disclosure Requirement (6.4 a 10) - -

Add: ...% of the total deposits due to insufﬁcient liquid assets (6.4 a 6)

Total Risk Weighted Exposures (A+B+C) 46,672,653 43,470,427

1.2 CAPITAL FUND This Year Previous Year

Core Capital (Tier 1) 5,446,972 4,709,864

a Paid up Equity Share Capital 2,248,161 2,041,672

b Irredeemable Non-cumulative preference shares - -

c Share Premium - -

d Proposed Bonus equity Shares 562,040 204,167

e Statutory General Reserves 2,639,030 2,381,025

f Retained Earnings 24,241 10,028

g Current year proﬁt/loss - -

h Capital Redemption Reserve - -

i Capital Adjustment Reserve - -

j Dividend Equalization Reserves - -

k Debenture Redemption Reserves

l Other Free Reserve 89,557 89,557

Less

a Goodwill - -

b Deferred Tax Assets (103,050)

c Fictitious Assets (13,007) (16,585)

d Investment in equity in licensed Financial Institutions - -

e Investment in equity of institutions with ﬁnancial interests - -

f Investment in equity of institutions in excess of limits - -

g Investments arising out of underwriting commitments - -

Reciprocal crossholdings

- -

i Land building unutilised and purchased in excess of limits

j Other Deductions -

Adjustments Under Pillar-II

Less: Shortfall in provisions (6.4 a 1) - -

Less: Loans and Facilities extended to related parties and restricted lending (6.4 a 2) - -

Supplementary Capital (Tier 2) 664,816 623,652

a Cumulative and/or Redeemable Preference Share - -

b Subordinated Term Debt - -

c Hybrid Capital Instruments - -

d General loan loss provision 279,291 262,010

e Exchange Equilization Reserve 384,481 360,598

f Investment Adjustment Reserve 1,044 1,044

g Assets revaluation reserve - -

h Other Reserves - -

Total Capital Fund (Tier 1 and Tier 2) 6,111,788 5,333,516

1.3 Capital Adequacy Ratios Current Period Previous Period

Tier 1 Capital to Total Risk Weighted Exposures (After Bank's adjustments of Pillar II) 11.67% 10.83%

Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures (After Bank's Adjustments of Pillar II) 13.10% 12.27%

amount in Rs. ‘000s

Financial statements and notes

Credit Risk

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.30 (Kha):

Assets 16th July, 2015 (32 Asadh 2072) Previous Year

Balance Sheet Exposure Book

Value a

Speciﬁc

Provision

Eligible

CRM c

Net Value

d=a-b-c

Risk

Weight

Risk

Weighted

Exposures

f=d*e

Net Value Risk

Weighted

Exposures

Cash Balance 785,636 - - 785,636 0% - 613,768 -

Balance With Nepal Rastra Bank 9,308,116 - - 9,308,116 0% - 6,862,452 -

Gold - - - - 0% - - -

Investment in Nepalese Government Securities 5,766,236 - - 5,766,236 0% - 2,333,923 -

All claims on Government of Nepal 138,807 - - 138,807 0% - 138,807 -

Investment in Nepal Rastra Bank securities - - - - 0% - - -

All claims on Nepal Rastra Bank - - - - 0% - - -

Claims on Foreign Government and Central Bank

(ECA Rating 0-1)

- - - - 0% - - -

Claims on Foreign Government and Central Bank

(ECA Rating 2)

- - - - 20% - - -

Claims on Foreign Government and Central Bank

(ECA Rating 3)

- - - - 50% - - -

Claims on Foreign Government and Central Bank

(ECA Rating 4-6)

- - - - 100% - - -

Claims on Foreign Government and Central Bank (ECA

Rating 7)

- - - - 150% - - -

Claims On BIS, IMF, ECB, EC and on Multilateral

Development Banks (MDBs) recognized by the

framework.

- - - - 0% - - -

Claims on Other Multilateral Development Banks - - - - 100% - - -

Claims on Public Sector Entity (ECA 0-1) - - - - 20% - - -

Claims on Public Sector Entity (ECA 2) - - - - 50% - - -

Claims on Public Sector Entity (ECA 3-6) - - - - 100% - - -

Claims on Public Sector Entity (ECA 7) - - - - 150% - - -

Claims on domestic banks that meet capital

adequacy requirements

1,206,822 - - 1,206,822 20% 241,364 915,331 183,066

Claims on domestic banks that do not meet capital

adequacy requirements

1,565 - - 1,565 100% 1,565 250,348 250,348

Claims on foreign bank (ECA Rating 0-1) 13,363,575 - - 13,363,575 20% 2,672,715 9,400,054 1,880,011

Claims on foreign bank (ECA Rating 2) - - - - 50% - - -

Claims on foreign bank (ECA Rating 3-6) 7,149,070 - - 7,149,070 100% 7,149,070 7,001,530 7,001,530

Claims on foreign bank (ECA Rating 7) - - - - 150% - - -

Claims on Foreign bank incorporated in SAARC

Region operating with a buffer of 1% above their

respective regulatory capital requirement

39,606 - - 39,606 20% 7,921 16,532 3,306

Claims on Domestic Corporates 11,577,276 - 339,747 11,237,529 100% 11,237,529 11,332,900 11,332,900

Claims on Foreign Corporates (ECA rating 0-1) - - - - 20% - - -

Claims on Foreign Corporates (ECA rating 2) - - - - 50% - - -

Claims on Foreign Corporates (ECA rating 3-6) - - - - 100% - - -

Claims on Foreign Corporates (ECA rating 7) - - - - 150% - - -

Regulatory Retail Portfolio (Not Overdue) 3,713,628 - - 3,713,628 75% 2,785,221 3,768,192 2,826,144

Claims fulﬁlling all criterion of regulatory retail except

granularity

- - - - 100% - - -

Claims secured by residential properties 4,187,849 - - 4,187,849 60% 2,512,709 3,660,832 2,196,499

Claims not fully secured by residential properties - - - - 150% - - -

Claims secured by residential properties (Overdue) 96,988 17,250 - 79,738 100% 79,738 59,427 59,427

Claims secured by Commercial real estate 4,984,409 - - 4,984,409 100% 4,984,409 3,652,157 3,652,157

Past due claims (except for claim secured by

residential properties)

335,023 40,814 - 294,209 150% 441,314 490,200 735,300

High Risk claims 1,830,511 3 31,389 1,799,119 150% 2,698,679 1,905,187 2,857,780

Investment in equity and other capital instruments of

institutions listed in the stock exchange

55,190 3,000 - 52,190 100% 52,190 52,190 52,190

Investment in equity and other capital instruments of

institutions not listed in the stock exchange

6,736 3,000 - 3,736 150% 5,604 3,736 5,603

Staff loan secured by residential property 131,879 - - 131,879 60% 79,127 133,580 80,148

Interest Receivable/claim on government securities 4,225 - - 4,225 0% - 4,123 -

Cash in transit and other cash items in the process

of collection

- - - - 20% - 2,825 565

Other Assets 695,983 116,821 - 579,162 100% 579,161 650,415 650,415

Total 65,379,130 180,888 371,136 64,827,106 35,528,316 53,248,509 33,767,390

amount in Rs. ‘000s

Standard Chartered Annual Report 2014-2015

Credit Risk (Continued)

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.30 (Kha):

Off Balance Sheet Exposures Book Value

Speciﬁc

Provision

Eligible

CRM c

Net Value

d=a-b-c

Risk

Weight

Risk

Weighted

Exposures

f=d*e

Net Value Risk

Weighted

Exposure

Revocable Commitments 211,774 - - 211,774 0% - 323,223 -

Bills Under Collection 608,583 - - 608,583 0% - 190,019 -

Forward Exchange Contract 1,377,681 - - 1,377,681 10% 137,768 1,100,001 110,000

LC Commitments With Original Maturity Up to 6 months

(domestic counterparty)

1,687,186 - 186,649 1,500,537 20% 300,107 2,145,792 429,158

Foreign Counterparty ECA Rating 0-1 - - - - 20% - - -

Foreign Counterparty ECA Rating 2 - - - - 50% - - -

Foreign Counterparty ECA Rating 3-6 - - - - 100% - - -

Foreign Counterparty ECA Rating 7 - - - - 150% - - -

L C Commitments With Original Maturity Over 6 months

(domestic counterparty)

459,736 - 426,216 33,520 50% 16,760 2,182 1,091

Foreign Counterparty ECA Rating 0-1 - - - - 20% - - -

Foreign Counterparty ECA Rating 2 - - - - 50% - - -

Foreign Counterparty ECA Rating 3-6 - - - - 100% - - -

Foreign Counterparty ECA Rating 7 - - - - 150% - - -

Bid Bond, Performance Bond and Counter Guarantee

(domestic counterparty)

362,923 - 153,315 209,608 50% 104,804 159,561 79,780

Foreign Counterparty ECA Rating 0-1 3,896,503 - 3,046,799 849,704 20% 169,941 882,477 176,495

Foreign Counterparty ECA Rating 2 3,124,128 - 1,476,153 1,647,974 50% 823,987 2,393,335 1,196,668

Foreign Counterparty ECA Rating 3-6 315,910 - - 315,910 100% 315,910 201,337 201,337

Foreign Counterparty ECA Rating 7 - - - - 150% - - -

Underwriting commitments - - - - 50% - - -

Lending of Bank's Securities or Posting of Securities as

collateral

- - - - 100% - - -

Repurchase Agreements, Assets sale with recourse - - - - 100% - - -

Advance Payment Guarantee 3,188,671 - 2,069,330 1,119,341 100% 1,119,341 1,294,307 1,294,307

Financial Guarantee 23,885 - 3,267 20,618 100% 20,618 13,731 13,731

Acceptances and Endorsements 321,817 - 8,351 313,466 100% 313,466 463,081 463,081

Unpaid Portion of Partly paid shares and Securities - - - - 100% - - -

Irrevocable credit commitments (short term) 6,595,213 - 77,572 6,517,641 20% 1,303,528 3,180,269 636,054

Irrevocable Credit commitments (Long Term) - - - - 50% - - -

Other Contingent Liabilities 1,094,020 - 77,895 1,016,125 100% 1,016,125 840,662 840,662

Unpaid Guarantee Claims 475 - 24 451 200% 902 321 641

Total 23,268,505 - 7,525,571 15,742,933 5,643,257 13,190,298 5,443,005

Total RWE for Credit Risk (A) +(B) 88,647,635 180,888 7,896,707 80,570,039 41,171,573 66,438,811 39,210,403

Adjustments under Pillar-II - - -

Add: 10% of the loan and facilities in excess of Single Obligor

Limits (6.4 a 3)

- - - - - - - -

Add: 1% of the contract (sale) value in case of the sale of credit

with recourse (6.4 a 4)

- - - - - - - -

Total RWE for Credit Risk (After Bank's adjustments of

Pillar II)

88,647,635 180,888 7,896,707 80,570,039 - 41,171,573 66,438,806 39,210,395

16th July, 2015 (32 Asadh 2072) Previous Year

amount in Rs. ‘000s

Financial statements and notes

Eligible Credit Risk Mitigants

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.30 (Ga):

Credit exposures Deposits

with

Bank

Deposits

with other

banks/FI

Gold Govt.

& NRB

Securities

G’tee

Govt.

Nepal

Sec/G’tee

of Other

Sovereigns

G’tee of

domestic

banks

G’tee of

MDBs

Sec/G’tee

of Foreign

Banks

Total

Cash Balance - - - - - - - - - -

Balance With Nepal Rastra Bank - - - - - - - - - -

Gold - - - - - - - - - -

Investment in Nepal Government Securities - - - - - - - - - -

All claims on Government of Nepal - - - - - - - - - -

Investment in Nepal Rastra Bank securities - - - - - - - - - -

All claims on Nepal Rastra Bank - - - - - - - - - -

Claims on Foreign Government and Central

Bank (ECA Rating 0-1)

- - - - - - - - - -

Claims on Foreign Government and Central

Bank (ECA Rating 2)

- - - - - - - - - -

Claims on Foreign Government and Central

Bank (ECA Rating 3)

- - - - - - - - - -

Claims on Foreign Government and Central

Bank (ECA Rating 4-6)

- - - - - - - - - -

Claims on Foreign Government and Central

Bank (ECA Rating 7)

- - - - - - - - - -

Claims on Other Multilateral Development

Banks

- - - - - - - - - -

Claims on Public Sector Entity (ECA 0-1) - - - - - - - - - -

Claims on Public Sector Entity (ECA 2) - - - - - - - - - -

Claims on Public Sector Entity (ECA 3-6) - - - - - - - - - -

Claims on Public Sector Entity (ECA 7) - - - - - - - - - -

Claims on domestic banks that meet capital

adequacy requirements

- - - - - - - - - -

Claims on domestic banks that do not meet

capital adequacy requirements

- - - - - - - - - -

Claims on foreign bank (ECA Rating 0-1) - - - - - - - - - -

Claims on foreign bank (ECA Rating 2) - - - - - - - - - -

Claims on foreign bank (ECA Rating 3-6) - - - - - - - - - -

Claims on foreign bank (ECA Rating 7) - - - - - - - - - -

Claims on Foreign bank incorporated in SAARC

Region operating with a buffer of 1% above

their respective regulatory capital requirement

- - - - - - - - - -

Claims on Domestic Corporates - 223,674 - 5,500 - - - - 110,573 339,747

Claims on Foreign Corporates (ECA 0-1) - - - - - - - - - -

Claims on Foreign Corporates (ECA 2) - - - - - - - - - -

Claims on Foreign Corporates (ECA 3-6) - - - - - - - - - -

Claims on Foreign Corporates (ECA 7) - - - - - - - - - -

Regulatory Retail Portfolio (Not Overdue) - - - - - - - - - -

Claims fulﬁlling all criterion of regulatory retail

except granularity

- - - - - - - - - -

Claims secured by residential properties - - - - - - - - - -

Claims not fully secured by residential

properties

- - - - - - - - - -

Claims secured by residential properties

(Overdue)

- - - - - - - - - -

Claims secured by commercial real estate - - - - - - - - - -

Past due claims (except for claim secured by

residential properties)

- - - - - - - - - -

High Risk claims 31,389 - - - - - - - - 31,389

Investment in equity and other capital

instruments of institutions listed in the stock

exchange

- - - - - - - - - -

Investment in equity and other capital

instruments of institutions not listed in the

stock exchange

- - - - - - - - - -

Other Assets - - - - - - - - - -

amount in Rs. ‘000s

Standard Chartered Annual Report 2014-2015

Continued...

Schedule 4.30 (Ga):

Credit exposures Deposits

with

Bank

Deposits

with other

banks/FI

Gold Govt.

& NRB

Securities

G’tee

Govt.

Nepal

Sec/G’tee

of Other

Sovereigns

G’tee of

domestic

banks

G’tee of

MDBs

Sec/G’tee

of Foreign

Banks

Total

Off Balance Sheet Exposures - - - - - - - - - -

- - - - - - - - - -

Forward Exchange Contract Liabilities - - - - - - - - - -

LC Commitments With Original Maturity Up to

6 months (domestic counterparty)

186,649 - - - - - - - - 186,649

Foreign Counterparty ECA Rating 0-1 - - - - - - - - - -

Foreign Counterparty ECA Rating 2 - - - - - - - - - -

Foreign Counterparty ECA Rating 3-6 - - - - - - - - - -

Foreign Counterparty ECA Rating 7 - - - - - - - - - -

L C Commitments With Original Maturity Over

6 months (domestic counterparty)

426,216 - - - - - - - - 426,216

Foreign Counterparty ECA Rating 0-1 - - - - - - - - - -

Foreign Counterparty ECA Rating 2 - - - - - - - - - -

Foreign Counterparty ECA Rating 3-6 - - - - - - - - - -

Foreign Counterparty ECA Rating 7 - - - - - - - - - -

Bid Bond, Performance Bond and Counter

Guarantee (domestic counterparty)

153,315 - - - - - - - - 153,315

Foreign Counterparty ECA Rating 0-1 - - - - - - - - 3,046,799 3,046,799

Foreign Counterparty ECA Rating 2 - - - - - - - - 1,476,153 1,476,153

Foreign Counterparty ECA Rating 3-6 - - - - - - - - - -

Foreign Counterparty ECA Rating 7 - - - - - - - - - -

Underwriting commitments - - - - - - - - - -

Lending of Bank's Securities or Posting of

Securities as collateral

- - - - - - - - - -

Repurchase agreements, Assets sale with

recourse

- - - - - - - - - -

Advance Payment Guarantee 1,921 - - - - - - - 2,067,409 2,069,330

Financial Guarantee 725 - - - - - - - 2,542 3,267

Acceptance and Endorsements 8,351 - - - - - - - - 8,351

Unpaid Portion of Partly paid shares and

Securities

- - - - - - - - - -

Irrevocable Credit Commitments(short term) - 13,741 - - - - - - 63,831 77,572

Irrevocable Credit Commitments(long term) - - - - - - - - - -

Claims on Foreign bank incorporated in SAARC

Region operating with a buffer of 1% above

their respective regulatory capital requirement

- - - - - - - - - -

Other Contingent Liabilities 74,392 - - - - - - - 3,502 77,894

Claim Received on Guarantee (As per

directive 13/065/66)

24 - - - - - - - - 24

Total Eligible CRM 882,982 237,415 - 5,500 - - - - 6,770,809 7,896,707

amount in Rs. ‘000s

Financial statements and notes

Operational Risk

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.30 (Gha):

SN Particulars 15.07.2013 16.07.2014 16.07.2015 16.07.2014

1 Net Interest Income 1,923,977 2,007,659 1,913,515

2 Commission and Discount Income 294,968 383,611 362,964

3 Other Operating Income 42,727 44,157 38,010

4 Exchange Fluctutation Income 515,050 477,996 613,936

5 Additional/ Deduction Interest Suspense during the period (9,564) (12,389) (14,520)

Gross Income (a) 2,767,158 2,901,034 2,913,905

Fixed Percentage (b) 15% 15% 15%

Gross Income as per Fixed Percentage[ c=(a*b)] 415,074 435,155 437,086

Capital Requirement for Operational Risk(d) (average of c) 429,105 413,592

Risk Weight (reciprocal of capital requirement of 10%) in

times (e)

10 10

Equivalent Risk Weight Exposure for Operational

Risk[f=(d*e)]

4,291,050 4,135,917

Pillar-II Adjustments

If Gross Income for all the last three years is negative (6.4 a 8)

Total Credit and investments (net of Speciﬁc Provision) -

Capital Requirement for operational risk (5%) -

Risk Weight (reciprocal of capital requirement of 10%) in times -

Equivalent Risk Weight Exposure (g) -

Equivalent Risk Weight Exposure [(h=f or g)] 4,291,050 4,135,917

amount in Rs. ‘000s

Standard Chartered Annual Report 2014-2015

Market Risk

As at 16 July, 2015 (31 Ashadh 2072)

Schedule 4.30 (Nga):

S. No. Currency

As on 16 July, 2015 Previous Year

Relevant Open

Position (NPR) as

on 16.07.2014

Open Position

(FCY)

Open Position

(NPR)

Relevant Open

Position (NPR)

1 INR 735,457 1,177,282 1,177,282 211,189

2 USD 600 60,984 60,984 3,169

3 EUR 20 2,187 2,187 1,150

4 GBP (17) (2,670) 2,670 7,834

5 CHF (5) (541) 541 1,492

6 AUD 1 49 49 6,451

7 CAD 32 2,492 2,492 3,774

8 SGD 30 2,219 2,219 3,004

9 JPY 752 617 617 1,024

10 CNY 14 223 223 220

11 SAR 35 957 957 2,644

12 QAR 1 29 29 58

13 THB 1 1 1 71

14 AED 13 355 355 589

15 MYR 15 412 412 177

16 SEK 90 1,070 1,070 1,171

17 DKK 94 1,395 1,395 2,314

18 HKD 72 949 949 1,514

19 BHD - - - -

20 KRW 496 44 44 384

21 KWD - 22 22 -

Total Open Position (a) 1,254,498 248,229

Fixed Percentage (b) 5% 5%

Capital Charge for Market Risk [c=(a*b)] 62,725 12,411

Risk Weight (reciprocal of capital requirement of 10%) in times (d) 10 10

Equivalent Risk Weight Exposures for Market Risk [e=(c*d)] 627,255 124,115

amount in Rs. ‘000s

Financial statements and notes

Key Indicators

Schedule 4.31:

Particulars Indicators FY

2010/2011

2011/2012

2012/2013

2013/2014

2014/2015

1. Net Proﬁt/Gross Income Percent 31.40 30.12 34.96 36.73 33.74

2. Earning Per Share Rs. 69.51 72.60 65.70 65.47 57.38

3. Market Value Per Share Rs. 1,800 1,799 1,820 2,799 1,943

4. Price Earning Ratio Ratio 25.90 24.78 27.70 42.75 33.86

5. Dividend (including bonus) on Share Capital Percent 50.00 60.00 50.00 51.50 44.21

6. Cash Dividend on Share Capital Percent 50.00 45.00 40.00 41.50 19.21

7. Interest Income/Loan & Advances Percent 10.34 11.16 9.76 9.31 8.68

8. Staff Expenses/Total Operating Expenses Percent 21.86 22.19 29.79 33.80 32.13

9. Interest Expenses on Total Deposit and Borrowings Percent 2.62 2.80 1.55 1.24 1.15

10. Exchange Fluctuation Income/Total Income Percent 10.86 12.07 14.78 13.14 16.06

11. Staff (statutory) Bonus/Total Staff Expenses Percent 30.40 30.22 29.24 28.30 27.01

12. Net Proﬁt/Loan and Advances Percent 6.00 5.90 5.26 5.08 4.60

13. Net Proﬁt/Total Assets Ratio 2.55 2.80 2.67 2.51 1.99

14. Total Credit/Deposit Percent 49.11 55.13 58.63 56.87 48.92

15. Total Operating Expenses/Total Assets Percent 3.82 4.18 3.10 2.67 2.42

16. Adequacy of Capital Fund on Risk Weighted Assets

a. Core Capital Percent 12.10 12.29 11.03 10.83 11.67

b. Supplementary Capital Percent 2.12 1.64 1.51 1.44 1.43

c. Total Capital Fund Percent 14.22 13.93 12.54 12.27 13.10

17. Liquidity (CRR) Ratio 6.10 22.40 16.43 21.18 24.03

18. Non-performing Credit/Total Credit Percent 0.62 0.78 0.77 0.48 0.34

19. Weighted Average Interest Rate Spread (different

basis till 2012/13)

Percent 3.28 3.92 4.12 7.09 5.27

20. Book Net-worth Rs'000 3,677,777 4,122,169 4,617,574 5,088,091 5,948,555

21. Total Shares No. 16,101,680 16,101,680 18,539,000 20,416,720 22,481,612

22. Total Staff No. 429 424 454 460 433

23. Networth Per Share Rs. 228 256 249 249 265

24. Return on Equity Percent 30.43 28.36 26.38 26.27 21.69

25. Proﬁt per Employee Rs'000 2,609 2,757 2,683 2,906 2,979

Standard Chartered Annual Report 2014-2015

Signiﬁcant Accounting Policies

Financial Year 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh 2072)

Schedule 4.32:

1. Background

The accompanying ﬁnancial

statements for the year ended 16

July 2015 comprise the accounts

of Standard Chartered Bank Nepal

Ltd. The Bank carries out commercial

banking activities in Nepal under the

license from Nepal Rastra Bank (The

Central Bank of Nepal) as Class “Ka”

licensed institution. The Bank is listed

on Nepal Stock Exchange. The Banks

ultimate holding company is Standard

Chartered Plc (SCPLC), which is

incorporated in United Kingdom.

2. Approval of Financial

Statements

Accompanied ﬁnancial statements

have been adopted by the Board

of Directors on its meeting held

on 22

February 2016 and have

recommended for approval of

shareholders in the Annual General

Meeting.

3. Basis of Preparation

The ﬁnancial statements are prepared

under the historical cost convention

on the accrual basis of accounting

(except for interest income on loans

and advances which is accounted for

on cash basis), and in accordance

with Generally Accepted Accounting

Principles (GAAP), Statutory

requirements of Banks and Financial

Institutions Act 2063, The Companies

Act 2063, directives, circulars and

guidelines issued by Nepal Rastra

Bank (NRB) from time to time, Nepal

Accounting Standards to the extent

applicable and current practices

prevailing within the banking industry

in Nepal.

4. Use of Estimates

The preparation of ﬁnancial statements

in conformity with GAAP requires

management to make estimates and

assumptions that affect the reported

amounts of assets, liabilities, income

and expenses and disclosures relating

to the contingent liabilities reported in

the ﬁnancial statements. Management

believes that the estimates used in the

preparation of the ﬁnancial statements

are prudent and reasonable. Actual

results could differ from these

estimates. Any revision to accounting

estimates is recognised prospectively

in the current and future periods.

5. Signiﬁcant Accounting Policies

5.1 Income Recognition

Interest income on Loans and

advances is accounted for on cash

basis.

Interest income on discounted

instruments is recognised over the

tenor of the instrument on a constant

effective yield basis.

Commission on guarantees and letters

of credit are recognised over the facility

tenure, except for commission on sight

bills which is recognised upfront.

Fees on loans and credit cards are

recognised at the inception of the

transactions.

Dividend on equity shares is

recognised as income when the right

to receive the same is established, i.e.

after it is declared in the company’s

Annual General Meeting.

5.2 Foreign Currency

Transactions and Balances

Transactions in Foreign currency are

recorded at exchange rates prevailing

on the date of transaction. Exchange

differences arising on foreign exchange

transactions settled during the year are

recognised as trading gains/losses in

the Proﬁt and Loss Account.

Monetary assets and liabilities

denominated in foreign currencies

are translated at mid-point exchange

rates on a daily basis and resultant

exchange differences are recognised

as revaluation gain/loss in the proﬁt

and loss account. In conformity with

the directives of Nepal Rastra Bank,

25% of the total revaluation gain is

transferred to Exchange Fluctuation

Fund by charging to Proﬁt and Loss

Appropriation Account.

5.3 Loans, Advances and Bills

Purchased

Classiﬁcation and provisioning of

Loans, Advances and Bills Purchased

is carried out in accordance with the

directives issued by Nepal Rastra

Bank.

Classiﬁcation

Loans, Advances & Bills Purchased

are classiﬁed into performing loans

and Non Performing Loans based

on management’s periodical internal

assessment and NRB’s directives

on classiﬁcation. Further Performing

Loans are classiﬁed into Good

Loan and Watch List Loan and Non

Performing Loans are classiﬁed

into Restructured/Rescheduled,

Substandard, Doubtful & Loss assets

based on the criteria stipulated by

NRB.

Loans and advances granted to staff in

accordance with the Staff loan scheme

as prescribed by Staff By laws are

reﬂected under Other Assets.

Financial statements and notes

Provisioning

Loans Advances and Bills Purchased

are stated net of speciﬁc & General

Loan Loss provisions. Speciﬁc

provisions are maintained in line with

the minimum provisioning norms

laid down by NRB. The Bank

also maintains a General Loan Loss

Provision at rates and as per the

norms prescribed by NRB.

Write off

The bank has written off unrecoverable

loans and advances as per the

procedures prescribed in the directives

issued by NRB. Amounts recovered

against loans written off in earlier as

well as current year are recognized as

income in the year of recovery.

5.4 Investments

Classiﬁcation and valuation of

Banks Investments is carried out in

accordance with the directives issued

by NRB.

Classiﬁcation

Investments are classiﬁed as ‘Held

to Maturity (HTM) or ‘Held for

Trading’ (HFT) or ‘Available for Sale’

(AFS) at the time of their purchase.

Investments acquired by the Bank

with the intention and ability to hold

up to maturities are classiﬁed as HTM.

Investments acquired with the intention

to trade by taking advantage of short

term price/interest rate movement are

classiﬁed as HFT. All other investments

are classiﬁed as AFS.

The Bank follows the settlement date

accounting for its investments.

Valuation

Investments classiﬁed as HTM are

carried at acquisition cost. Any

premium or discount on acquisition is

amortised over the remaining period

till maturity on the basis of a constant

yield to maturity. Where in the opinion

of management and in accordance

with NRB guidelines, there is a

diminution in the value of any HTM

security, which is other than temporary,

appropriate provisions are made and

charged to Proﬁt and Loss account

Investments classiﬁed as AFS are

marked to market regularly and any

movement in the value is adjusted

through reserves, while the permanent

decline in value is charged to proﬁt

and loss account. Similarly increase in

the recoverable value of the impaired

equity investment (up to cost value) is

recognised in Investment Adjustment

Reserve.

Investments classiﬁed as HFT are

marked to market on a daily basis and

any appreciation/depreciation in the

value is recognised in the proﬁt and

loss account.

Treasury Bills being discounted

instruments are disclosed at cost

including the pro rata discount

accreted for the holding period.

As required by NRB Directives, the

Bank also maintains Investment

Adjustment Reserve to the extent of

2% of Available for Sale Portfolio. This

Reserve is considered as Tier 2 capital.

All investments are subject to regular

review according to the directives of

Nepal Rastra Bank.

5.5 Fixed Assets and

Depreciation

Fixed assets are stated at acquisition

cost less depreciation. Acquisition cost

includes expenditures that are directly

attributable to the acquisition of the

assets.

Fixed assets individually costing less

than or equal to Rs. 400,000 (Rs.

Four Lakhs) are expensed in the year

of purchase.

Costs of refurbishment and

renovation of leasehold/owned

premises are capitalised provided

they are in excess of Rs. 400,000 (Rs.

Four Lakhs).

Computer software costing less than

or equal to Rs. 40,000,000 (Rs. Four

Crores) is expensed in the year of

purchase.

Licence fees for the software paid by

the Bank is amortised over the period

of the licence.

Proﬁt or loss on disposal of ﬁxed

assets is recognised in the proﬁt and

loss of the year.

Land is not depreciated. Depreciation

of other assets is calculated using the

straight-line method to amortise their

cost over their estimated useful lives,

as follows:

S.N. Assets Types Life of an

Asset

1. Equipment 36 months

2. Furniture & Fittings/Fixtures 36 months

3. Vehicle 36 months

4. Computers – PC, Printer,

Laptop etc.

36 months

5. Computers – Server 60 months

6. Computer – ATM 84 months

7. Freehold Premises 600 months

8. Software Applications 36 months

Costs of refurbishment and

renovation of leasehold premises

are depreciated over the remaining

period of that lease or 120 months

whichever is less.

Standard Chartered Annual Report 2014-2015

For additions during the year,

depreciation is charged from the

month the assets is put to use and

for disposed assets, depreciation is

charged up to the month immediately

preceding the month of disposal.

5.6 Accounting for Leases

Premises are taken as operating leases

which are cancellable in nature. The

expenses under operating leases as

per the lease agreements are charged

to Other Operating Expenses in the

Proﬁt and Loss account.

5.7 Retirement and Other

Employee Beneﬁts

The Bank has schemes of retirement

beneﬁts namely Gratuity and Provident

Fund. Provision for expenses on

account of Gratuity and Provident

Fund is made on accrual basis with the

amount of gratuity computed by the

Bank in accordance with its applicable

scheme. Contributions to approved

retirement fund are made on a regular

basis as per the Retirement Fund rules

and regulations.

5.8 Taxation

a. Current Income Tax

Provision for current income tax

is made in accordance with the

provisions of the prevailing Income Tax

Act, 2058 and Rules as amended.

b. Deferred Income Tax

Deferred income tax is provided on

temporary differences arising between

the tax bases of assets and liabilities

and their carrying amounts in the

ﬁnancial statements. Deferred income

tax is determined using tax rates (and

laws) that have been enacted by the

balance sheet date and are expected

to apply when the related deferred tax

asset is realised or the deferred tax

liability is settled.

The principal temporary

differences arise on account of

differences in depreciation of ﬁxed

assets, provision for diminution

in the value of investment in

shares, provisions for gratuity,

performance bonus and premium

on development bonds between

ﬁnancial statements and tax

bases.

Deferred tax assets are

recognised where it is probable

that future taxable proﬁt will

be available against which the

temporary differences can be

utilised. Deferred tax assets are

deducted from the calculation of

core capital.

Deferred Tax Reserve equivalent

to Deferred Tax Assets has been

created as per the regulatory

requirement is transferred to other

reserve as per directive issued by

Nepal Rastra Bank.

5.9 Stationery

Stationery purchased is expended

directly for consumption.

5.10 Non Banking Assets

Non Banking Assets are

accounted for as per the

directives of Nepal Rastra Bank.

5.11 Provisions, Contingent

Liabilities and Contingent

Assets

The Bank creates a provision

when there is a present obligation

as a result of past events that

probably requires an outﬂow of

resources and a reliable estimate

can be made of the amount of

the obligation. A disclosure for a

contingent liability is made when

there is a possible obligation or a

present obligation that may, but

probably will not, require an outﬂow of

resources. When there is a possible

obligation or a present obligation in

respect of which the likelihood of

outﬂow of resources is remote, no

provision or disclosure is made.

Provisions are reviewed at each

balance sheet date and adjusted to

reﬂect the current best estimate. If it

is no longer probable that an outﬂow

of resources would be required to

settle the obligation, the provision is

reversed.

Contingent assets are neither

recognised nor disclosed in the

ﬁnancial statements. However,

contingent assets are assessed

continually and if it is virtually certain

that an economic beneﬁt will arise,

the asset and related income are

recognised in the period in which the

change occurs.

Liabilities on account of derivative

contracts are reported under

Contingent liabilities under sub heading

Outstanding Liabilities for Forward

Exchange Contract. These include

notional principal on outstanding

forward rate agreements.

5.12 Provision for reward points

awarded to customers

The Bank has a policy of awarding

reward points to customers for credit

card spends. Provision for such

reward points is made on the basis

of behavioural analysis of utilisation

trends.

5.13 Rounding off and

Comparative Figures

The ﬁnancial statements are presented

in Nepalese Rupees, rounded off to

the nearest rupee.

Financial statements and notes

Notes to Accounts

Financial Year 17 July 2014 to 16 July 2015 (1 Shrawan 2071 to 31 Ashadh

Schedule 4.33:

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

The Staff By-Laws approved by our Board and also approved

by NRB, has a provision for extending housing loans to the

eligible staff at concessional rates. Hence a separate housing

fund has not been created in accordance with Labour Act,

2048.

3. Taxation Assessment Status

Financial year 2006-07

During the year, the Bank applied to the Tax Settlement

Commission (TSC) for a negotiated settlement of the case.

An agreement was signed between the Bank and the TSC for

settlement of the case for Rs. 45 Lakhs after the Balance Sheet

date. The contingent liability of Rs. 292.55 Lakhs up to previous

year relating to this tax case has been reversed in the books.

Financial Year 2009-10

For ﬁnancial year 2009-10 (2066-67) LTPO has done the

reassessment of tax and raised the demand of Rs. 14.78

Lakhs of tax and 3.05 Lakhs of interest. The Bank contested

the order on few issues and ﬁled for Administrative Review.

LTPO is yet to issue revised assessment order as per the

decision of Administrative Review. However based on the

initial assessment order of LTPO, contingent liability for the

tax (including interest up to year end) of Rs. 10.47 Lakhs has

been created in the books.

Financial Year 2010-11

For ﬁnancial year 2010-11 (2067-68) LTPO has done the

reassessment of tax and raised the demand of Rs. 30.09

Lakhs of tax and Rs. 10.22 Lakhs of interest. The amount

paid is charged to proﬁt and loss account for the year.

Accordingly the issue of reverse VAT on payments made

to Visa and Master Card for the services provided by them

was raised and a demand of Rs. 129.80 Lakhs was made

(including interest of Rs. 35.97 Lakhs). The Bank contested

the order and ﬁled for Administrative Review.

The Bank has created a provision of Rs. 482.61 Lakhs during

the year for the probable liability that might arise in the future

for the above issue of VAT for the years 2010-11 to 2014-15.

Though the Bank has contested on this issue and accordingly

ﬁled for the administrative review, the provision has been

created based on the Banks own assessment procedures.

Financial Year 2011-12 to 2013-14

The self assessment returns ﬁled by the Bank for ﬁnancial

year 2012-13 (2068-69 BS) to 2013-14 (2070-71 BS), has

not yet been opened for reassessment by the LTPO.

Tax demands (including interest) amounting to Rs. 10.47

Lakhs for the assessment year 2009-10 (2066-67 BS) is

pending ﬁnal outcome of the appeals ﬁled by the Bank. The

Bank believes that these demands are largely unsustainable

and accordingly no provision has been made.

4. Provision for Gratuity

During the year, the Bank has provided Rs. 58,744,097

(Previous Year Rs. 54,522,170) on account of gratuity. Out

of the amount provided, Rs. 22,204,437 has been funded

(previous year Rs. 28,199,376) and Rs. 2,515,075 (previous

year Rs. 9,309,315) has been paid to the staff at the time of

separation.

5. Performance Bonus

The Bank’s total reward consists of ﬁxed and variable

compensation. Performance Bonus is a variable component

based on the Bank’s overall performance and individual

employee’s annual performance. It is provisioned on the

basis of the individual targets set and paid in line with the

actual achievements. A total of Rs 62,623,750 has been

provided for the performance bonus in this year.

6. Dividend and Bonus

The Board has recommended 19.21% as cash dividend and

25% bonus shares as appropriation for the reported year.

This proposal of the Board has been shown under Proposed

Dividend for the cash portion and under Share Capital for the

Proposed Bonus Shares issue respectively.

7. Investment Adjustment Reserve

There has been no change in the Investments Adjustment

Reserve of Rs. 1,043,800 created last year as required by

NRB Directives. As per IAS 39 the impairment provision

on investment is charged to Proﬁt and Loss Account while

the release of impairment provision is released through

Investment Adjustment Reserve.

Particulars Balance

16.07.2015

Balance

16.07.2014

Remarks

Total Available For Sale (AFS)

Investments

61,925,500 61,925,500

Less; Provision held in the

books

6,000,000 6,000,000

Less; Exempted for Reserve

creation as per NRB

directives

3,735,500 3,735,500 Credit Information

Company and

Nepal Clearing

House Ltd are

exempted

Net AFS Investment 52,190,000 52,190,000

Investment Adjustment

Reserve@2%

1,043,800 1,043,800

Closing balance of

Investment Adjustment

Reserve

1,043,800 1,043,800 Balance reported

as Other Reserves

amount in Rs.

Standard Chartered Annual Report 2014-2015

8. Unpaid Dividend

As on the balance sheet date, unpaid dividend for over ﬁve

years amounts to NPR 5,185,289.The Bank published a

notice in a national daily detailing the information about the

unclaimed dividend on 17

August 2015.

9. Paid up Share Capital

Paid up share capital of the Bank has moved over the years

as follows:

Financial Year Cumulative Paid

up Capital Rs.

Remarks

1987-88 (2044-45 BS) 30,000,000 Opening Share Capital at Rs. 60

paid up

1990-91 (2047-48 BS) 50,000,000 Capitalisation of Reserve Rs. 100

paid up

1992-93 (2049-50 BS) 100,000,000 Issuance of 100% Bonus Shares

1994-95 (2051-52 BS) 150,000,000 Issuance of 50% Bonus Shares

1996-97 (2053-54 BS) 225,571,800 Issuance of 50% Bonus Shares

1997-98 (2054-55 BS) 339,548,800 Issuance of 50% Bonus Shares

2002-03 (2059-60 BS) 374,640,400 Issuance of 10% Bonus Shares

2005-06 (2062-63 BS) 413,254,800 Issuance of 10% Bonus Shares

2006-07 (2063-64 BS) 620,784,000 Issuance of 50% Bonus Shares

2007-08 (2064-65 BS) 931,966,400 Issuance of 50% Bonus Shares

2008-09 (2065-66 BS) 1,398,483,600 Issuance of 50% Bonus Shares

2009-10 (2066-67 BS) 1,610,168,000 Issuance of 15% Bonus Shares

2011-12 (2068-69 BS) 1,853,900,000 Issuance of 15% Bonus Shares

2012-13 (2069-70 BS) 2,041,672,000 Issuance of 10% Bonus Shares

2013-14 (2070-71 BS) 2,248,161,200 Issuance of 10% Bonus Shares

Share capital of Rs. 2,322,000 is issued after collecting

cash from the shareholders for any odd lot bonus

share.

10. Provision for Taxation

a. Current & Deferred Tax

Current tax has been provided for in the books as per the

provisions of Income Tax Act 2058 and Rules thereon prevailing

as on the year end. The following table details the calculation of

Income Tax provisions for the current ﬁnancial year:

Particulars Amount

(Rs. ‘000)

Permanent

Difference

Temporary

Difference

Proﬁt before Tax 1,870,995

Adjustment for tax purposes (presented

on net basis)

Depreciation (2,056) (2,056)

Repairs & Maintenance 9,506 9,506

Gratuity 34,025 34,025

Performance & Other Bonus (262) (262)

Premium on Development Bond 3,578 3,578

Dividend Income (11,133) (11,133) -

Software expenses 188 - -

Provision on VAT on Visa and Master

Card payments

48,261 48,261

Miscellaneous 2,622 2,622 -

Total 1,955,723 39,750 44,979

Current & Deferred Tax @30% 586,717 13,493

Additional tax for earlier ﬁnancial years 7,746

Net Tax charge for current year 580,970

b. Deferred Tax

Deferred tax is calculated on temporary differences between

the book values of ﬁnancial assets/liabilities and tax bases of

assets/liabilities using an effective tax rate of 30.00%.

The items attributable to deferred tax assets and liabilities

and their movement are as follows:

Balance

16 Jul

2014

Movement

during the

year

Balance

16 Jul 2015

Deferred Tax Assets

Fixed Assets 40,147,031 2,291,214 42,438,426

Gratuity Provision 27,986,114 10,207,375 38,193,489

Provision for Performance bonus 12,136,556 -78,710 12,057,846

Provision for investment impairment 1,800,000 - 1,800,000

Premium on Development Bond 7,487,235 1,073,494 8,560,729

Total Deferred Tax Assets 89,556,936 13,493,373 103,050,490

Deferred Tax Liabilities - - -

Net – Deferred Tax Asset 89,556,936 13,493,373 103,050,490

The deferred tax movement of current year amounting to

Rs. 13,493,373 has been credited to the Proﬁt and Loss

account.

11. Related Party Disclosures

a. Related Parties and the nature of their

relationship with the Bank are given below:

i) Ultimate Parent Company : Standard Chartered Plc

ii) Major Shareholders

(a) Standard Chartered Grindlays Ltd, Australia : Holding

50% of shares

(b) Standard Chartered Bank, UK : Holding 25% of

iii) Related parties with whom transactions have occurred

during the current year.

(a) Head Ofﬁce and Branches of Head Ofﬁce

1. Standard Chartered Bank, UK

2. Standard Chartered Bank, India

3. Standard Chartered Bank, Japan

4. Standard Chartered Bank, Singapore

5. Standard Chartered Bank, USA

6. Standard Chartered Bank, Germany

7. Standard Chartered Bank, Indonesia

8. Standard Chartered Bank, Qatar

9. Standard Chartered Bank, South Korea

10. Standard Chartered Bank, U.A.E

11. Standard Chartered Bank, Bangladesh

(b) Subsidiaries of Head Ofﬁce (Standard Chartered Bank UK)

1. Standard Chartered Bank (Mauritius) Limited

2. Scope International Private Limited

3. Standard Chartered Bank (Hong Kong) Limited

4. Standard Chartered Bank (China)

5. Standard Chartered Bank Malaysia

6. Standard Chartered Bank, Kenya

7. Standard Chartered Thailand

amount in Rs.

Financial statements and notes

iv) Key Management Personnel compensation

1. Total of Key Management Personnel Compensation

Rs. 50,966,087

a) Short Term Employee Beneﬁts Rs. 41,017,225

(Salary, Allowance, PF)

b) Post Employment Beneﬁts NIL

c) Other Long Term Beneﬁts NIL

d) Termination Beneﬁts Rs. 9,948,862

(Gratuity)

e) Share Based Payment NIL

Additional information:

a) Key Management Personnel includes 3 expatriate staff.

(Existing - 2, repatriated - 1)

b) Key Management Personnel are also provided with the

following beneﬁts:

i) Beneﬁts as per Staff Service Bye-laws,

ii) Bonus to local staff as per Bonus Act,

iii) Performance Bonus depending on performance of the individual,

iv) Car Allowance as per Bank’s Car Scheme.

2. Apart from above Rs. 822,500 was paid as meeting fees

to the Directors in the ﬁnancial year.

b. Transactions & Balances

The Bank being a subsidiary of an International Bank

avails of support services from its global support functions

governed by approved agreements. Foreign currency

funds have mainly been placed with Standard Chartered

Bank (SCB) network points. These funds are all under

the management of Standard Chartered Group with high

governance levels and acceptable country risks and returns.

Following are the details of transactions and the end of

period balances:

Transactions during the year

Transactions Total SCB Group

Placements 2,041,170,105,454

Interest on placements 102,864,999

Shared Service Center Costs 47,757,540

Training Fees

Balances at the year end

Transactions H O & SCB

Branches

SCB

Subsidiaries

Placements 11,973,546,000 7,149,070,000

Nostro Balances 652,391,746 658,410,454

Interest Receivable 39,318 8,566,535

Shared Service cost Payable - 1,784,781

Trade Contingents 1,130,403,430 1,869,976,524

Fee Income Receivables 44,122,804 85,585,090

12. Operating Lease Commitment

The future minimum lease payment under non-cancellable

operating leases, where the bank is lessee is NIL.

13. Segment Reporting with description of

segments and methodology.

a. Segment Description

The Bank has disclosed its operations under the following

segments:

Segment

Deﬁnition

Activity

Retail

Banking

Retail Banking serves retail customers

through the branch network and other

delivery channels. This segment raises

deposits from customers and makes

loans and provides other services to such

customers. This segment also includes

activities relating to credit cards, debit cards,

mortgage loans, auto loans, SME segments

and third party product distribution.

Exposures are classiﬁed under Retail

Banking taking into account the orientation,

product, granularity and individual exposure

criteria.

Corporate

and

Institutional

Client (C&I)

Local corporate ﬁnancing, advances to

partnership ﬁrms, companies and statutory

bodies, which are not included under Retail

Banking segments are reported under C&I.

Treasury

Treasury include foreign exchange, ﬁxed

income, and money market and derivative

transactions.

Others

Others include Corporate Real Estate

Services and other items not allocable in the

aforementioned Segments.

b. Segment Accounting Policy

Segment revenues stated below are aggregate of net

income reported by the Bank under various heads. Segment

results are determined after considering the following inter-

unit notional charges/recoveries.

i) Fund Transfer Pricing (FTP): Treasury gives notional

interest beneﬁts to other segments for funds mobilised

by the latter through deposits and similarly charges

notional interest to other divisions for funds utilised by

them for lending and investment purposes. Based on

tenor of assets/liabilities and market scenarios, Treasury

calculates notional interest rates used for this purpose.

ii) Support costs (costs pertaining to Finance, HR,

Corporate Real Estate Services, Legal & Compliance,

Corporate Affairs, Information Technology etc) are

allocated to Retail, C&I & Treasury segments based on

Management’s estimates of the beneﬁts accruing to

these segments for the costs incurred. This is similar to

the basis used for the internal management reporting.

amount in Rs.

Standard Chartered Annual Report 2014-2015

c. Segmental Reporting

For the year ended 16.07.2015

amount in Rs. ‘000

Particulars

Retail C& IC Treasury Others Total

Net Segment Revenue 1,419,424 1,386,539 141,922 -1,914 2,945,971

Net Segment Results 903,337 963,352 7,114 -2,807 1,870,995

Proﬁt before Tax - - - - -

Provision for Tax - - - 58,970 590,970

Net Proﬁt - - - - 1,290,025

Segment Assets 14,757,460 13,665,881 35,707,529 800,436 64,931,305

Segment Liabilities 27,204,277 30,518,220 33,312 7,175,496 64,931,305

Capital Expenditure to

acquire Fixed Assets

- - - - -

Depreciation 8,220 353 - 6,670 15,242

Contingent 231,760 20,994,801 929,308 32,222 22,188,092

For the year ended 15.07.2014

Particulars

Retail C&IC Treasury Others Total

Net Segment Revenue 1,429,827 1,130,689 404,614 166 2,965,297

Net Segment Results 796,577 731,753 374,040 166 1,902,536

Proﬁt before Tax 1,902,536

Provision for Tax 565,947 565,947

Net Proﬁt 1,336,589

Segment Assets 14,064,990 12,803,048 25,951,387 504,676 53,324,102

Segment Liabilities 24,625,036 20,459,955 1,655,394 6,583,716 53,324,102

Capital Expenditure to

acquire Fixed Assets

- - - - -

Depreciation 11,968 2,439 38 14,446

Contingent 1,100,186 19,198,674 1,850,779 29,255 22,178,895

*FTP has been adjusted for Nepali calendar years.

14. Details of Lending/Investment qualifying as Deprived sector

lending

Rs. Mn

S.No. Particulars Outstanding

% of

total

Loans Requirement

a. As of 16th July 2015 1,356 4.60% 4.50%

a. As of 16th July 2014 1,147 4.57% 4.00%

15. Concentration of Deposits, Loans & advances and

Contingents

NPR Mn

S.No. Particulars

As at 16th

July 2015

As at 15th

July 2014

a. Total deposits 57,286 46,299

b. Total deposits of twenty largest depositors 21,624 14,983

Financial statements and notes

c. Total Deposit of a single largest depositor 8,901 5,049

Percentage of deposits of twenty largest depositors

to total deposit of the Bank

37.75% 32.36%

e. Percentage of highest single depositor 15.54% 10.90%

f. Total Loans & Advances 28,024 26,328

g. Total loans & advances of twenty largest borrowers 12,201 11,375

h. Total loans & advances to a single largest borrower 1,973 2,444

Percentage of twenty largest borrowers to total

loans and advances

43.54% 43.2%

Percentage of highest exposure in a single largest

borrower

7.04% 9.28%

k. Total Contingent Liabilities 23,088 22,179

l. Total Contingent to a single largest customer 410 1,179

m. Highest exposure in a single largest customer 1.78% 5.32%

16. Reconciliation Status:

Particulars Total

Amount

< 3

Months

>3<9

Months

> 9<12

Months

> 12

Months

Branch

Adjustments

Accounts

- - - - -

Agency

Accounts

24,856,039

24,853,332

2,707

The reasons for differences are fully identiﬁed and are being addressed in regular course of business.

17. Summary of Loans and Advances Disbursed, Recovered and Principal and

Interest Written-off during the year:

amount in Rs. ‘000s

Particulars Amount

Loans Disbursed 54,836,531

Loans Recovered 53,137,934

Loans Written-off 3,136

Interest Written-off 412

18. Summary of Changes in Deposit Liabilities :

amount in Rs. ‘000s

Particulars

Balance as

at 16.07.2014

Received/

(Withdrawn)

Balance as

at 16.07.2015

Current and Margin Accounts 14,020,724 2,804,926 16,825,650

Saving Account 19,526,973 3,949,471 23,476,444

Call Deposits 9,675,606 4,191,560 13,867,166

Fixed Deposits 3,075,229 41,994 3,117,223

Total 46,298,532 10,987,950 57,286,482

19. Weighted Average Interest Spread:

Particulars Rate %

a. Weighted average yield on loans and investments (Gsec) 7.01

b. Average Cost of local currency deposits 1.74

c. Spread (Yield - Cost) i.e. c=b-a 5.27

Standard Chartered Annual Report 2014-2015

20. Particulars of Amortised Expenses yet to be Expensed Off:

Particulars Amount

Software Costs -

Licence Fees -

Premium on Development Bonds 13,007

Total 13,007

21. Classiﬁcation of Assets and Liabilities based on Maturity

Rs. in Mio

Particulars 1-90 Days 91-180 Days 181-270 Days 271 Days - 1 Year Over 1 Year Total

Assets

Cash Balance 786 - - - - 786

Balance with Banks & FIs 10,787 - - - - 10,787

Investment in Foreign Banks 2,542 1,017 1,556 2,034 - 7,149

Call Money 11,974 - - - - 11,974

Government Securities 330 - 224 4,963 250 5,767

Nepal Rastra Bank Bonds - - - - - -

Inter Bank & FI Lending - - - - - -

Loans, Advances & Bills Purchased 8,704 2,411 3,377 1,535 11,998 28,025

Interest Receivable 2 1 5 3 2 13

Reverse Repo - - - - - -

Receivables from other Institutions under

Commitment

- - - - - -

Payments under S.No. 20,21 & 22 - - - - - -

Other Assets - - - 632 140 772

Total Assets 35,125 3,429 5,162 9,167 12,390 65,273

Liabilities

Current Deposits 3,592 - - - 12,534 16,126

Saving Deposits (Including call) 10,372 - - - 26,971 37,343

Fixed Deposits 388 357 1,499 864 8 3,116

Debentures and Bonds - - - - - -

Borrowings - - - - - -

Call/Short Notice - - - - - -

Inter-bank/Financial Institutions - - - - - -

Reﬁnance - - - - - -

Others - - - - - -

Other Liabilities and Provisions 568 187 - 504 343 1,602

Sundry Creditors 318 - - - - 318

Bills Payable 177 - - - - 177

Interest Payable 73 - - - - 73

Provisions - 187 - - 343 530

Others - - - 504 - 504

Payable to other institutions under

Commitment

- - - - - -

Irrevocable Loan Commitment 5,209 70 180 81 154 5,694

Letter of Credit/Guarantee (Net of Margin) 2,071 1,343 2,473 2,735 3,989 12,611

Repo - - - - - -

Payable under s.no.11 - - - - - -

Others 88 - 432 - 5,949 6,469

Rs. in ‘000

Financial statements and notes

Board of Directors

Executive Committee

(EXCO)

Audit

Committee

(Board Level)

Risk

Committee

(Board Level)

Executive Risk

Committee

(ERC)

Asset &

Liability

Committee

(ALCO)

Country

Pensions

Committee

(CPC)

Credit Issues

Committee

(CIC)

Total Liabilities 22,288 1,957 4,584 4,184 49,948 82,961

Net Financial Assets 12,837 1,472 578 4,983 -37,558 -17,688

Cumulative Net Financial Assets 12,837 14,309 14,887 19,870 -17,688 -

22. Borrowing by Bank against the collateral of own asset is Nil.

23. Closure of branch at Lakeside Pokhara and disposal of assets:

The Bank has closed its branch at Lakeside Pokhara and sold its land and building

at a total price of Rs. 60.71 million. This has resulted into a gain of Rs. 51.75

million and the same has been disclosed as proﬁt on sale of assets under Non-

operating Income.

24. Details of Customer complaints

S.No. Particulars

For the ﬁscal

year 2014/15

a. No. of complaints pending at the beginning of the year 2

b. No. of complaints received during the year 400

c. No. of complaints redressed during the year 402

d. No. of complaints pending at the end of the year 0

25. Penalties

There were no penalties paid by the Bank during the last two ﬁscal years to the

regulators i.e. NRB, Company Registrar’s Ofﬁce, SEBON and NEPSE.

26. Interest Realisation after Year End

Bank has not utilised the facility given in Uniﬁed Directive 4(5)(1) for accounting in

income the interest on customer loans and advances which were due as at end of

ﬁnancial year and were collected within 15 days of end of ﬁnancial year.

27. Country Governance Framework with Chart.

The diagram below illustrates the high level risk committee structure.

Standard Chartered Annual Report 2014-2015

Statement of loan availed by bank’s promoter/

promoters’ group from other bank and ﬁnancial

institutions by pledging their shares.

as on 16th July 2015 (31 Ashadhh 2072)

Schedule 4.34:

S.No. Name of

Promoter/

Shareholders

under Promoters’

Group

Shares under the

ownership of Promoter

Description of Loan Remarks

Total no. of

Percentage of

total paid up

capital

Name of other bank/

ﬁnancial institution from

which loan has been taken

Loan

amount Rs.

No. of shares

pledged

Financial statements and notes

Comparison of Unaudited and Audited

Financial Statement as of FY 2071/72

Schedule 4.35:

No.

Particulars As per

Unaudited

Financial

Statement

As per

Audited

Financial

Statement

Variance in Reasons for

Variance

Amount In %

1 Total Capital and Liabilities (1.1 to 1.7) 65,254,673 65,269,315 (14,642) -0.02%

1.1 Paid up Capital 2,248,161 2,810,202 (562,041) -25.00%

1.2 Reserve and Surplus 4,137,079 3,138,353 998,726 24.14%

1.3 Debenture and Bond - - - 0.00%

1.4 Borrowings - - - 0.00%

1.5 Deposits (a+b) 57,286,482 57,286,482 - 0.00%

a. Domestic Currency 38,814,201 38,814,201 - 0.00%

b. Foreign Currency 18,472,281 18,472,281 - 0.00%

1.6 Income Tax Liability - - - 0.00%

1.7 Other Liabilities 1,582,950 2,034,278 (451,328) -28.51%

2 Total Assets (2.1 to 2.7) 65,254,673 65,269,315 (14,642) -0.02%

2.1 Cash and Bank Balance 11,572,442 11,572,442 - 0.00%

2.2 Money at Call and Short Notice 11,973,546 11,973,546 - 0.00%

2.3 Investments 12,971,232 12,971,232 - 0.00%

2.4 Loans and Advances (a+b+c+d+e+f)* 28,007,758 28,023,823 (16,065) -0.06%

a. Real Estate Loan 1,455,682 1,455,682 - 0.00%

1. Residential Real Estate Loan (Except Personal Home

Loan upto Rs.10 million)

408,172 408,172 - 0.00%

2. Business Complex and Residential Apartments

Construction Loan

- - -

3. Income generating Commercial Complex Loan - - -

4. Other Real Estate Loan (including land purchase and plotting) 1,047,509 1,047,509 - 0.00%

b. Personal Home Loan of Rs. 10 million or Less 4,989,718 4,989,718 - 0.00%

c. Margin Type Loan - - -

d. Term Loan 2,169,257 2,169,257 - 0.00%

e. Overdraft/ TR Loan/WC Loan 10,511,099 10,511,099 - 0.00%

f. Others 8,882,003 8,882,003 - 0.00%

2.5 Fixed Assets 83,853 83,853 - 0.00%

2.6 Non Banking Assets - - - 0.00%

2.7 Other Assets 645,842 644,419 1,423 0.22%

3 Proﬁt and Loss Account

3.1 Interest Income 2,574,590 2,574,590 - 0.00%

3.2 Interest Expense 661,075 661,075 - 0.00%

A. Net Interest Income (3.1 - 3.2) 1,913,515 1,913,515 - 0.00%

3.3 Fees, Commission and Discount 363,686 362,964 722 0.20%

3.4 Other Operating Income 40,601 38,010 2,591 6.38%

3.5 Foreign Exchange Gain/Loss (Net) 613,936 613,936 - 0.00%

B. Total Operating Income (A+3.3+3.4+3.5) 2,931,739 2,928,425 3,314 0.11%

3.6 Staff Expenses 505,669 505,669 - 0.00%

3.7 Other Operating Expenses 406,113 407,054 (941) -0.23%

C. Operating Proﬁt Before Provision (B -3.6 - 3.7) 2,019,957 2,015,702 4,255 0.21%

3.8 Provision for Possible Losses 175,186 188,682 (13,496) -7.70%

D. Operating Proﬁt (C -3.8) 1,844,771 1,827,020 17,751 0.96%

3.9 Non Operating Income/Expenses (Net) 63,861 63,861 - 0.00%

3.10 Write Back of Provision for Possible Loss 149,688 149,688 - 0.00%

E. Proﬁt from Regular Activities (D+3.9+3.10) 2,058,320 2,040,569 17,751 0.86%

3.11 Extraordinary Income/Expenses (Net) 1,461 17,525 (16,064) -1099.52%

F. Proﬁt before Bonus and Taxes (E +3.11) 2,059,781 2,058,094 1,687 0.08%

3.12 Provision for Staff Bonus 187,253 187,099 154 0.08%

3.13 Provision for Tax 577,700 580,970 (3,270) -0.57%

G. Net Proﬁt/Loss (F - 3.12 - 3.13) 1,294,828 1,290,025 4,803 0.37%

* Loans and advances are shown on gross value.

Increase due to payment

of tax for prior years

Staff bonus decrease as

per decrease in proﬁt

Reclassiﬁcation

Increase in Provision

amount

Accrual of expenses

Provision created

for known liabilities

Reinstatement of

written off loans

Provision of written off

loans reinstated and

proposed dividend

Movement in proﬁt

and proposed

appropriation

As per proposed

appropriation of

proﬁts

Adjustment of tax provisions

& other reclassification

amount in Rs. ‘000s

Standard Chartered Annual Report 2014-2015

Unaudited Financial Results (Quarterly)

As at the end of Fourth Quarter (16/07/2015) of the Fiscal Year 2071/72 ( FY 2014-2015)

Schedule 4.35: Kha

S. N. Particulars

This Quarter

Ending

(Unaudited)

Quarter

Ending

(Unaudited)

Corresponding

Previous Year

Quarter Ending

(Audited)

1 Total Capital and Liabilities 65,254,673 58,821,684 53,675,879

1.1 Paid-up Capital 2,248,161 2,248,161 2,245,839

1.2 Reserves and Surplus 4,137,079 3,799,834 2,842,252

1.3 Debenture and Bond - - -

1.4 Borrowings - - -

1.5 Deposits (a+b) 57,286,482 51,397,991 46,298,532

a Domestic Currency 38,814,201 33,282,466 31,295,555

b Foreign Currency 18,472,281 18,115,525 15,002,977

1.6 Income Tax Liability (Net) - (26,325) -

1.7 Other Liabilities 1,582,950 1,402,023 2,289,256

2 Total assets 65,254,673 58,821,685 53,675,879

2.1 Cash & Bank Balance 11,572,442 3,625,404 9,188,304

2.2 Money at Call and Short Notice 11,973,546 11,252,226 7,960,305

2.3 Investments 12,971,232 12,498,947 9,391,379

2.4 Loans and Advances 28,007,758 30,798,309 26,328,361

a. Real Estate Loan 1,455,682 1,507,482 1,407,046

1. Residential Real Estate Loan (Except Personal Home Loan upto Rs 10 million) 408,172 443,598 237,085

2. Business complex and residential apartments construction loan - - -

3. Income generating Commercial Complex Loan - - -

4. Other Real Estate Loan (including land purchase and plotting) 1,047,509 1,063,885 1,169,961

b. Personal Home Loan of Rs. 10 million or less 4,989,718 5,052,155 4,557,020

c. Margin Type Loan - - -

d. Term Loan 2,169,257 2,613,483 2,563,866

e. Overdraft/ TR loan/WC loan 10,511,099 12,745,367 9,297,525

f. Others 8,882,003 8,879,821 8,502,905

2.5 Fixed Assets 83,853 83,276 68,726

2.6 Non Banking Assets - -

2.7 Other assets 645,842 563,523 738,804

3 Proﬁt and Loss Account Up to This

Quarter

Up to

Quarter

Up to

Corresponding

Previous Year

Quarter

3.1 Interest Income 2,574,590 1,889,900 2,583,958

3.2 Interest Expense 661,075 487,207 576,299

A Net Interest Income 1,913,515 1,402,693 2,007,659

3.3 Fees, Commission and Discount 363,686 271,514 383,611

3.4 Other Operating Income 40,601 32,431 44,157

3.5 Foreign Exchange gain / Loss (Net) 613,936 379,786 477,996

B Total Operating Income 2,931,738 2,086,424 2,913,423

3.6 Staff Expense 505,669 347,824 482,083

3.7 Other Operating Expenses 406,113 293,616 368,030

C Operating Proﬁt Before Provision 2,019,957 1,444,984 2,063,310

3.8 Provision for Possible Losses 175,186 116,937 84,401

D Operating Proﬁt 1,844,771 1,328,047 1,978,909

3.9 Non Operating Income / Expense ( Net) 63,861 63,771 51,874

3.10 Write back of Provision for Possible Losses 149,688 110,575 63,531

E Proﬁt from Regular Activities 2,058,320 1,502,393 2,094,313

3.11 Extraordinary Income/ Expenses ( Net) 1,461 2,380 (1,524)

F Proﬁt Before Bonus and Taxes 2,059,780 1,504,773 2,092,790

3.12 Provision for Staff Bonus 187,253 136,798 190,254

3.13 Provision for Tax 577,700 410,393 565,947

G Net Proﬁt / Loss 1,294,828 957,583 1,336,589

4 Ratios At the End

of This

Quarter

At the End

of Previous

Quarter

At the End of

Corresponding

Previous Year

Quarter

4.1 Capital Fund to RWA 13.86% 13.01% 12.27%

4.2 Non Performing Loan ( NPL) to Total Loan 0.28% 0.18% 0.48%

4.3 Total Loan Loss Provision to Total NPL 421.66% 631.97% 276.23%

4.4 Cost of Funds (LCY) 1.74% 1.89% 1.90%

4.5 Credit to Deposit Ratio (as per NRB Directive) 62.34% 78.70% 72.55%

4.6 Base Rate 4.92% 6.41% 5.18%

4.7 Average Yield 7.01% 7.24% 8.99%

4.8 Net Interest Spread 5.27% 5.35% 7.09%

Note: Loans and Advances includes Bills Purchased amount, ﬁgures are shown in Gross Value. Figures have been regrouped wherever

necessary. Above ﬁgures may change with the audited ﬁgures if modiﬁed by the External Auditors or the Regulators.

amount in Rs. ‘000s

Financial statements and notes

1. Capital structure and capital

adequacy

a. Tier 1 capital and a

breakdown of its components;

As on 16.07.2015

Core Capital (Tier 1) 5,446,972,404

a Paid up Equity Share

Capital

2,248,161,200

b Proposed Bonus Equity

562,040,300

c Statutory General

Reserves

2,639,029,861

d Retained Earnings 24,241,412

e Current year proﬁts -

f Other Free Reserve 89,556,936

g Less : Deferred Tax

Assets

(103,050,310)

h Less : Deferred

Revenue Expenses

(13,006,995)

b. Tier 2 capital and a

breakdown of its components;

As on 16.07.2015

Supplementary Capital

(Tier 2)

664,815,475

a General loan loss provision 279,290,531

b Exchange Equalization

Reserve

384,481,144

c Investment Adjustment

Reserve

1,043,800

c. Detailed information

about the Subordinated Term

Debts with information on the

outstanding amount, maturity,

and amount raised during the

year and amount eligible to be

reckoned as capital funds.

• Not applicable.

d. Deductions from capital;

• Rs. 116,057,305.

e. Total qualifying capital;

• Rs 6,111,787,879.

f. Capital adequacy ratio;

• 3.10%.

Disclosure as per Bank’s disclosure policy under the

Capital Adequacy Framework of Nepal Rastra Bank

g. Summary of the bank’s

internal approach to assess

the adequacy of its capital to

support current and future

activities, if applicable; and

Board and Senior Management

Oversight

The Bank management is responsible

for understanding the nature and level

of risk taken by the Bank and relating

the risk to the capital adequacy

level. The Country Executive Risk

Committee (CERC) reviews Credit

Risk, Operational Risk, Market Risk

and Reputational Risk; analyzes the

trend, assesses the exposure impact

on capital and provides a summary

report to the Executive Committee.

In respect of Operational Risk, this is

managed through Country Executive

Risk Committee which exercises

oversight of the Bank’s operational risk

exposures to ensure that exposures

are managed in a manner consistent

with the Risk Management Framework

and contained within the Bank’s risk

appetite. The responsibility for daily

management of Operational Risk

exposures rests with Business and

Business Support Functions. Country

Operational Risk Ofﬁcer has been

appointed with the key responsibilities

to ensure consistency in the application

of the Risk Management Framework

across all areas of operational risk

management by monitoring the controls

associated with the Risk Management

Framework processes and working with

the Chief Credit Ofﬁcer to remediate

identiﬁed gaps.

With regard to Market Risk, the

Financial Market Operations maintain

net open position of all currencies on a

daily basis and provides data to Head

FM who reviews and analyzes the

trend, assesses the exposure impact on

capital and provides a summary report

to the ALCO. The net open position

report is also discussed at the ALCO.

Executive Committee reviews the

inputs received from CERC and

ALCO and provides a synopsis to the

Board along with its view on the risks

exposure and the adequacy of capital,

for review and noting.

Sound Capital Assessment

In order to ensure a sound capital

assessment process, all three risks

that have direct impact on the capital

adequacy level are managed in a

structured manner with clear roles and

responsibilities.

Operational Risk is managed through

Risk Management Framework (RMF)

which sets out the Bank’s approach

to risk management and the control

framework. Through the Risk

Management Framework, we manage

enterprise-wide risks with the objective

of maximizing risk-adjusted returns while

remaining within our risk appetite. Roles

and responsibilities for risk management

are deﬁned under ‘three lines of defense’

model. Each ‘line of defense’ describes

a speciﬁc set of responsibilities for risk

management and control.

• The First Line of defense comprises of

all individuals that have management

responsibility to ensure the effective

management of risks within the

scope of their direct organizational

responsibilities and align business

strategy with risk appetite.

• The Second Line of defense

comprises of the Risk Control

Owners, supported by their

respective control functions. The

Second Line is independent of

the origination, trading and sales

functions and is responsible for

ensuring that the residual risks within

the scope of their responsibilities

remain within appetite.

• The Third Line of defense

comprises the independent

assurance provided by the Group

Internal Audit (GIA) function, which

has no responsibilities for any

in Rs.

Standard Chartered Annual Report 2014-2015

of the activities it examines. GIA

provides independent assurance of

the effectiveness of management’s

control of its own business activities

(the First Line) and of the processes

maintained by the Risk Control

Functions (the Second Line). As

a result, GIA provides assurance

that the overall system of control

effectiveness is working as required

within the Risk Management

Framework. The ﬁndings from

GIA’s audits are reported to

all relevant management and

governance bodies – accountable

line managers, relevant oversight

function or committee and

committees of the Board.

Credit risk is the potential for loss

due to the failure of a counterparty to

meet its obligations to pay the Bank in

accordance with agreed terms. Credit

exposures arise from both the banking

and trading book.

Credit Risk is managed through a

framework that sets out policies,

procedures and standards covering the

measurement and management of credit

risk. Credit policies and standards are

considered and approved by the Board.

Any exception to the credit policies and

standards get escalated and approved

by the appropriate authorities as

stipulated in the policies and standards.

The Market Risk is managed in line with

the Bank’s market risk and other related

policies, giving due consideration to the

prevalent market conditions.

Comprehensive assessment of

risks

The Country Executive Risk Committee

is responsible for overseeing the

effective implementation of the Risk

Management Framework, including

the clear assignment of the roles

and responsibilities of Risk Control

Owners for the effective management

of risk throughout the Bank. ERC is

responsible for the management of all

risks, except those for which ALCO

and Country Pension Committee

have direct responsibilities. Risk limits

and risk exposure approval authority

frameworks are set by the ERC in

respect of all risks including credit risk,

country risk and market risk.

Credit risk

The credit risk of individual

counterparties or groups of

connected counterparties as well

as at the portfolios of retail clients is

assessed and reviewed. The credit

risk management covers credit rating

and measurement, credit approval,

large exposures and credit risk

concentration, credit monitoring, and

portfolio analysis. All Corporate and

Institutional borrowers including SME

borrowers, at individual and group

level, are assigned internal credit

rating that supports identiﬁcation and

measurement of risk and integrated

into overall credit risk analysis.

Operational Risk

Operational Risk is the potential for

loss resulting from inadequate or

failed internal processes, people and

systems or from the impact of external

events, including legal risks.

Operational Risk Framework (ORF)

adopted by the Bank provides the

Bank’s approach to the management

of operational risk in accordance

with the RMF and the Board’s Risk

Tolerance limit. The bank’s operational

risk management approach serves to

continually improve the Bank’s ability

to anticipate all material risks and to

increase our ability to demonstrate,

with a high degree of conﬁdence, that

those risks are well controlled. It also

clariﬁes and reinforces the need for

clear ownership and accountability for

all processes across the Bank, with no

signiﬁcant gaps or duplication.

We seek to minimize our exposure to

operational risk, subject to cost trade-offs.

Operational risk exposures are managed

through a consistent set of management

processes that drive risk identiﬁcation,

assessment, control and monitoring.

The OR governance structure is as

follows:

• Operational Risk governance

ensures consistent oversight across

all levels regarding the execution

and effectiveness of Operational

Risk Framework (ORF).

• Risk Control Owners for all major

Risk Types are appointed as per

the RMF and are responsible

for effective management of

operational risk of their respective

control function.

• Operational risks are identiﬁed and

graded at the business/unit level.

For all risk graded low and above

along with the treatment plan are

agreed with the Risk Control Owner

before raising the risk in phoenix

and tabling the risks in Country

Executive Risk Committee for

acceptance. Mitigating controls are

put in place and mitigation progress

monitored until its effectiveness.

• The Executive Risk Committee

(ERC) ensures the effective

management of Operational Risk

throughout the business/functions

in support of the Group’s strategy

and in accordance with the Risk

Management Framework. The ERC

assigns ownership, requires actions

to be taken and monitors progress

of risks identiﬁed, in addition to

conﬁrming the risk grading provided

at the business/unit level.

• The Executive Risk Committee

(ERC) accepts operational risks

arising in the country that have

residual risk ratings which are above

‘Low’ on the country materiality

scale, provided the residual

risk rating is ‘low’ on the Group

materiality scale. Risks categorized

as Medium, High or Very High on

the Group materiality scale are

reported to the Executive Risk

Committee (ERC) for endorsement

Financial statements and notes

and escalated to the Group Process

Owner through the relevant country

process owner for acceptance

through the relevant Process

Governance Committees (PGCs).

• The Group Risk Committee (GRC)

provides oversight of operational

risk management across the

Group. It is supported by Global

Business Risk Committee (GBRC),

the Group Functions Operational

Risk Committee (GFORC), the

Group Financial Crime Risk

Committee (GFCRC) and the

Group Information Management

Governance Committee (GIMGC),

which oversee operational risk

arising from the global businesses,

Group functions, ﬁnancial crime

compliance and information

management respectively.

• Process Governance Committee

(PGC) provides global oversight of

all material operational risk arising

from end-to-end processes within

their Process Universes.

Market Risk

We recognise Market Risk as the

potential for loss of earnings or

economic value due to adverse changes

in ﬁnancial market rates or prices.

Our exposure to market risk arises

predominantly from customer-driven

transactions. The objective of our market

risk policies and processes is to obtain

the best balance of risk and return while

meeting customer’s requirement.

Risks arising out of adverse movements

in exchange rates, interest rates,

liquidity and equity are covered under

market risk management. In line with

capital framework prescribed by NRB,

the bank focuses on exchange rate risk

management for managing / computing

the capital charge on market risk. In

addition the interest rate risk, currency

exchange rate risk, liquidity risk and

equity price risk are assessed at a

regular interval to strengthen market

risk management. The market risk is

managed within the risk tolerance limit

set by the Board.

Market risk is tightly monitored using

value at risk (VaR) methodologies

complemented by sensitivity measures,

gross nominal limits and loss triggers

at a detailed portfolio level. This is

supplemented with extensive stress

testing which takes account of more

extreme price movements.

Other risks

In addition to the credit, operational,

market and liquidity risk, the Bank

identiﬁes, assesses and monitors

strategic and reputational risks at a

regular interval. The Board maintains

the primary responsibility to establish

the strategic direction of the Bank. The

Country Executive Risk Committee

and EXCO are also responsible for the

management of reputational risk.

Monitoring and Reporting

All risks, including credit, operational

and market risks are identiﬁed,

escalated, monitored and mitigated

to the satisfaction of the Risk Control

Owner. The Risk Control Owner is

responsible for ensuring that risks

are adequately identiﬁed, escalated

monitored and mitigated. The Bank

has adequate system for monitoring

and reporting risk exposures and

assessing how the changing risk

proﬁle affects the need for capital. The

Country Executive Risk Committee

reviews and assesses the credit risk,

operational risk, reputational risk,

market risk, etc. and provides a report

to the Executive Committee.

Internal Control Review

The Bank is committed to managing

risk and controlling its business and

ﬁnancial activities in a manner which

enables it to maximize proﬁtable

business opportunities, avoid or

reduce risks which can cause loss

or reputational damage, ensure

compliance with applicable laws and

regulations and enhance resilience to

external events.

The effectiveness of the Bank’s

internal control system is reviewed

regularly by the Board, its committees,

Management and Internal Audit. The

Audit Committee has reviewed the

effectiveness of the internal control

system during the FY 2071/72 BS

and reported on its review to the

Board. The Internal Audit monitors

compliance with policies and

standards and the effectiveness of

internal control structures across the

Bank through its program of business/

unit audits. The Internal Audit function

is focused on the areas of greatest

risk as determined by a risk-based

assessment methodology. Internal

Audit reports regularly to the Audit

Committee. The ﬁndings of all adverse

audits are also notiﬁed to the Chief

Executive Ofﬁcer and Business Heads

for immediate corrective actions.

h. Summary of the terms,

conditions and main features

of all capital instruments,

especially in case of

subordinated term debts

including hybrid capital

instruments.

• Bank has fully paid equity shares as

qualifying capital.

2. Risk exposures

a. Risk weighted exposures for

Credit Risk, Market Risk and

Operational Risk

Standard Chartered Annual Report 2014-2015

RISK WEIGHTED EXPOSURES As on 16.07.2015

A Risk Weighted Exposure for Credit Risk 41,171,574,050

B Risk Weighted Exposure for Operational Risk 4,291,048,528

C Risk Weighted Exposure for Market Risk 627,248,751

D Adjustments under Pillar-II 582,781,145

Total Risk Weighted Exposures (a+b+c) 46,672,652,474

b. Risk Weighted Exposures under each of 11 categories of

Credit Risk

In NPR

No. Particulars Claim As on

16.07.2015

RWE as on

16.07.2015

1 Claims on govt. and central Bank 15,217,384,362 -

2 Claims on other ofﬁcial entities - -

3 Claims on Banks 21,760,637,305 10,072,635,184

4 Claims on corporate and securities ﬁrm 11,639,201,784 11,295,322,547

5 Claims on regulatory retail portfolio 3,713,627,599 2,785,220,699

6 Claim secured by residential properties 4,416,716,263 2,671,575,090

7 Claims secured by commercial real state 4,984,408,844 4,984,408,844

8 Past due Claims 335,023,475 441,314,353

9 High risk claims 1,830,510,946 2,698,677,844

10 Other Assets 1,481,618,601 579,161,207

11 Off Balance sheet Items 23,268,503,910 5,643,258,282

Total 88,647,633,089 41,171,574,050

c. Total risk weighted exposure calculation table;

Please refer Schedule 4.30 (Kha), 4.30 (Ga), 4.30 (Gha) and 4.30 (Nga) of

the ﬁnancial statements for details.

d. Amount of NPAs (both Gross and Net)

• Restructure/Reschedule Loan

◊ NIL

• Substandard Loan

◊ Gross value Rs. 48,224,865, Net values Rs. 36,168,649

• Doubtful Loan

◊ Gross value Rs. 6,125,920, Net value Rs 3,064,960

• Loss Loan

◊ Gross value Rs. 40,415,171, Net value: NIL

e. NPA ratios

• Gross NPA to gross advances

◊ 0.34%

• Net NPA to net advances

◊ 0.14 %

f. Movement of Non Performing Assets

Year on year downward movement of Rs. 32,577,978

g. Write off of Loans and Interest Suspense

Loans Write off during the year is Rs. 3,136,687 and interest suspense

charged off during the year is Rs 412,286.

h. Movements in Loan Loss Provisions

and Interest Suspense

Year on year downward movement in Loan Loss

Provisions of Rs. 9,267,084.Year on year downward

movement in Interest suspense of Rs. 14,519,550.

i. Details of additional Loan Loss Provisions

Additional watch-list provisions have been made

as required by the regulations.

i. Segregation of Investment Portfolio

into Held for Trading, Held to Maturity

and Available for Sale

Investment Portfolio Net Amount

(Rs.)

Held For Trading NIL

Held To Maturity 12,915,306,033

Available For Sale 61,925,500

3. Risk Management Function

a. For each separate risk area (Credit, Market and

Operational risk), banks must describe their risk

management objectives and policies, including:

• Strategies and processes;

• The structure and organization of the relevant

risk management function;

• The scope and nature of risk reporting and/or

measurement systems; and

• Policies for hedging and/or mitigating risk and

strategies, and processes for monitoring the

continuing effectiveness of hedges/mitigants.

Credit Risk Management strategies include

effectively managing the risk of ﬁnancial

loss arising out of booking an exposure on

counterparty and also ensuring independence

of the Credit Risk function from the origination,

trading and sales function.

Credit risk under Retail Clients (including SME)

and Corporate & Institutional Clients is managed

through a deﬁned framework which sets out

policies, procedures and standards covering the

measurement and management of credit risk.

There is a clear segregation of duties between

transaction originators in the businesses and

the approvers in the Risk functions. All credit

exposure limits are approved within a deﬁned

credit approval authority framework. A standard

alphanumeric credit risk grade system is used for

quantifying the risk associated with the counterparty

for Corporate and Institutional Clients (including

Financial statements and notes

SME clients). The grading is based on our

internal estimate of probability of default

over a one year horizon, with customers

or portfolios assessed against a range of

quantitative and qualitative factors. The

numeric grades run from 1 to 14 and some

of the grades are further sub-classiﬁed

into A, B or C. Lower credit grades are

indicative of a lower likelihood of a default.

Credit Grades 1A to 12C are assigned to

performing customers or accounts, while

credit grades 13 and 14 are assigned to

non-performing or default customers.

In addition to nominal aggregate

exposure, Expected Loss and Tenor are

used in the delegation of credit approval

authority and must be calculated for

every transaction to determine the

appropriate level of approval. Signiﬁcant

exposures beyond the authority of Credit

Ofﬁcers in Retail Clients and Corporate &

Institutional Clients are approved by CEO

on behalf of Executive Risk Committee

after support from the respective credit

risk function at the Group level. The

SCB Nepal Board delegates its authority

to approve credit, market and other

risks exposures (“Risk Authorities”) to

the Executive Committee for onward

delegation of these Risk Authorities to

the Executive Risk Committee.

The independence of the Risk function is

effectively maintained to ensure that the

necessary balance in risk/return decisions

is not compromised by short term

pressures to generate revenues. This is

particularly important given that revenues

are recognized from the point of sale while

losses arising from risk positions typically

manifest themselves over time. Credit

function in Retail Clients uses standard

application forms which are processed in

central units and credit approval process is

guided by Credit Approval Document (CAD)

and Credit Operating Manual. The probably

of default is calculated using portfolio

delinquency ﬂow rates and judgement,

where applicable.

There are risk ofﬁcers in Retail Clients

(including SME) and Corporate &

Institutional Clients. They have their

primary reporting line into the country

and Group functional levels. Credit

approval authorities are delegated

by Executive Risk Committee to

Senior Credit Ofﬁcer in Corporate &

Institutional and Commercial Clients,

and Credit Head in Retail Clients based

on their judgment and experience,

who may further delegate the credit

authorities to other credit ofﬁcers in their

respective segment. We have a manual

approval process in Retail segment and

on-line approval process in Corporate &

Institutional Clients and SME segments.

The scope and nature of risk reporting

and/or measurement procedures

are covered in the Country Portfolio/

Underwriting Standards approved by

the Board, CAD and Credit Operating

Manual speciﬁc to each business and

other Group level policies & procedures

adopted after the Board approval. The

Executive Risk Committee chaired

by the CEO, reviews the portfolio

exposure, portfolio quality, country level

risk triggers, etc on a bi-monthly (once

in two months) basis.

Country Portfolio/Underwriting

Standards and CAD / Credit Operating

Manual outlines the Bank’s policies and

processes for hedging and/or mitigating

and monitoring risk. We regularly monitor

credit exposures, portfolio performance

and external trends including political

and economic trends that may impact

risk management outcomes.

Internal risk management reports

are presented to the Executive Risk

Committee containing information

on key environmental, political and

economic trends, portfolio delinquency

and loan impairment performance.

Corporate and SME clients accounts or

portfolios are placed on early alert when

they display signs of actual or potential

weakness or ﬁnancial deterioration. Such

accounts and portfolios are subjected

to a dedicated process overseen by the

Credit Issue Committee. Client account

plans and credit grades are re-evaluated.

In addition, remedial actions are agreed

and monitored. Remedial actions

include, but are not limited to, exposure

reduction, security enhancement, exiting

the account, or immediate movement

of the account into the control of Group

Special Assets Management (GSAM),

our special recovery unit.

In Retail Lending portfolio, delinquency

trends are monitored continuously at a

detailed level. Individual client behavior is

also tracked and considered for lending

decision. Accounts that are past due

are subject to a collections process,

managed independently by the Risk

Function. Charged-off accounts are

managed by specialist recovery teams.

Collateral is held to mitigate credit risk

exposures and risk mitigation policies

determine the eligibility of collateral

types. Regular valuation of collateral is

required in accordance with the Risk

Mitigation Policy and Portfolio Standards,

which prescribe both the process and

the frequency of valuation for different

collateral types. Collateral held against

impaired loans is maintained at fair value.

The Executive Risk Committee which

has been formed by and receives

authority from the Executive Committee

is responsible for ensuring the effective

risk governance and management of

credit, reputational, market, operational

risk etc. throughout the Bank.

b. Types of eligible credit risk

mitigants used and the beneﬁts

availed under CRM.

No Credit Risk Mitigants As on

16.07.2015

1 Deposits with Bank 882,981,941

2 Deposits with other

banks/FI*

237,415,200

3 Govt. & NRB Securities 5,500,000

4 G'tee of Domestic Banks*

5 Sec/G'tee of Foreign

Banks*

6,770,809,984

Total 7,896,707,124

* net of supervisory haircut

Standard Chartered Annual Report 2014-2015

Nepal Rastra Bank’s Approval and Directions

On the basis of submitted ﬁnancial statements

and other documents, since the provisions of

Sub- section (1) of Section 46 of Bank and

Financial Institutions Act,2063 appeared to

have been complied; as per Sub-section (2) of

the above Section, approval has been granted

to distribute the proposed cash dividend

Rs. 431,883,592 (19.21 percent of paid up

capital) and bonus share of Rs. 562,040,300

(25 percent of paid up capital) only after the

approval from the annual general meeting.

Also the consent has been granted to publish

the ﬁnancial statement of FY 2071/72 for the

purpose of approval by annual general meeting with

following directives:

1. To take steps to completely address the

observations of the auditors and make

arrangement so that such observations are not

repeated

2. To bring down the net spread within prescribed

limit as this is not found to be within such limit.

3. To increase the lending to productive sector so

as to meet the prescribed limit as this is found

to be below the prescribed minimum limit of 20

percent of total loans and advances.

Financial statements and notes

Five years Financial Summary

Balance Sheet

amount in Rs. ‘000s

Particulars 2067-68 2068-69 2069-70 2070-71 2071-72

2010-11 2011-12 2012-13 2013-14 2014-15

Assets

Cash and Bank Balance 2,975,795 6,366,233 6,404,999 9,188,304 11,572,442

Money at Call and Short Notice 4,280,888 2,126,035 3,009,064 7,960,305 11,973,546

Investments 17,258,682 12,966,635 12,753,518 9,391,379 12,971,232

Loans and Advances 18,427,270 19,575,968 22,828,838 25,976,585 27,681,313

Fixed Assets 106,071 89,633 81,518 68,726 83,853

Other Assets 761,812 552,548 553,163 738,804 644,419

Total Assets 43,810,520 41,677,052 45,631,100 53,324,102 64,926,805

Liabilities

Borrowings 350,000 - - -

Deposits 37,999,242 35,965,631 39,466,453 46,298,532 57,286,482

Other Liabilities 1,783,500 1,589,253 1,547,073 1,937,479 1,691,768

Total Liabilities 40,132,743 37,554,883 41,013,526 48,236,011 58,978,250

Shareholders Fund

Paid Up Capital 1,610,168 1,610,168 1,853,900 2,041,672 2,248,161

Proposed Bonus Shares - 241,525 185,390 204,167 562,040

Reserve (including Exchange Reserve) 2,023,202 2,261,536 2,546,916 2,832,223 3,114,112

Undistributed Proﬁt 44,407 8,940 31,368 10,028 24,241

Total Shareholders Fund 3,677,777 4,122,169 4,617,574 5,088,091 5,948,555

Contingent Liabilities

Letter of Credit 1,542,549 2,605,897 3,046,891 3,583,307 2,146,922

Guarantees 4,333,115 6,535,797 8,560,504 12,779,883 11,075,683

Forward Exchange Contracts 388,522 249,067 3,097,266 1,100,001 1,377,681

Other Contingent Liabilties 4,253,643 3,590,037 3,389,423 4,715,704 8,456,444

Total Contingent Assets 10,517,829 12,980,797 18,094,084 22,178,895 23,056,730

Standard Chartered Annual Report 2014-2015

Five years ﬁnancial Summary

Proﬁt & Loss Account

amount in Rs. ‘000s

Particulars 2067-68 2068-69 2069-70 2070-71 2071-72

2010-11 2011-12 2012-13 2013-14 2014-15

Interest Income 2,718,699 2,870,971 2,535,359 2,583,958 2,574,590

Interest Expenses 1,003,100 1,007,199 611,382 576,299 661,075

Net Interest Income 1,715,599 1,863,772 1,923,977 2,007,659 1,913,515

Commission and Discount 314,674 267,766 294,968 383,611 362,964

Other Operating Incomes 36,753 38,355 42,727 44,157 38,010

Exchange ﬂuctuation Income 394,231 468,557 515,050 477,996 613,936

Total Operating Income 2,461,257 2,638,449 2,776,721 2,913,423 2,928,425

Staff Expenses 365,986 386,823 421,631 482,083 505,669

Other Operating Expenses 305,215 349,365 382,484 368,030 407,054

Exchange ﬂuctuation Loss

Operating Proﬁt Before Provision for Possible Loss 1,790,055 1,902,261 1,972,607 2,063,310 2,015,702

Provision for Possible Losses 82,739 208,251 110,125 84,401 188,682

Operating Proﬁt 1,707,316 1,694,010 1,862,481 1,978,909 1,827,020

Non-Operating Income/ (Loss) 6,445 708 1,170 51,874 63,861

Provision for Possible Loss Written Back 67,159 190,918 50,135 63,531 149,688

Proﬁt from Ordinary Activities 1,780,921 1,885,635 1,913,786 2,094,314 2,040,569

Income/(Expenses) from Extra Ordinary Activities (22,765) (42,577) 2,410 (1,524) 17,525

Net Proﬁt after considering all Activities 1,758,156 1,843,059 1,916,196 2,092,790 2,058,094

Provision for Staff Bonus 159,832 167,551 174,200 190,254 187,099

Provision for Income Tax 479,153 506,540 524,056 565,947 580,970

Net Proﬁt/Loss 1,119,171 1,168,967 1,217,941 1,336,589 1,290,025

Accumulated Proﬁt up to Previous Year 22,033 44,407 10,795 31,582 10,028

This Year's Proﬁt 1,119,171 1,168,967 1,217,941 1,336,589 1,290,025

Capital Adjustment fund upto Previous Year

Total 1,141,204 1,213,375 1,228,736 1,368,171 1,300,054

General Reserve Fund 223,834 233,793 243,588 267,318 258,005

Proposed Dividend 805,084 724,576 741,560 847,294 431,884

Proposed Issue od Bonus Shares - 241,525 185,390 204,167 562,040

Exchange Fluctuation Fund 18,104 47,691 27,971 25,742 23,883

Capital Adjustment Fund

Other Appropriations 49,775 (43,151) (1,141) 13,622 -

Accumulated Proﬁt/(Loss) 44,407 8,940 31,368 10,028 24,241

Proﬁt Before Tax 1,598,324 1,675,508 1,741,996 1,902,536 1,870,995

Return on Shareholder's Fund 30.43% 28.36% 26.38% 26.27% 21.69%

Cost Income ratio 33.76% 34.25% 35.23% 35.71% 37.56%

Proﬁt per employee 2,609 2,757 2,683 2,906 2,979

Dividend Cover ratio 1.39 1.21 1.31 1.27 1.30

Financial statements and notes

Disclaimer

Standard Chartered Bank Nepal Limited is an

Equal Employment Opportunity/ Afﬁrmative

Action employers. Standard Chartered Bank

Nepal Limited is committed to providing equal

employment opportunities to every employee and

every applicant for employment, regardless of, but

not limited to, such factors as race, color, religion,

sex, age, familial or marital status, ancestry,

sexual orientation, veteran status or being a

qualiﬁed individual with a disability; within the legal

framework of the country. Standard Chartered

Bank Nepal Limited undertakes no obligation to

update any statement in this Annual Report 2014-

2015 to reﬂect events or circumstances after the

date on which such statement is made. Information

in this Annual Report is as of July 16, 2015.

Bimal Pratap Singh

Company Secretary

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Print Communication, 4241355

Printed in Nepal

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