Risk Weighted Assets, Capital Adequacy, Supplementary Capital, Total Capital Fund, Notes to Accounts, Sanima Bank.

1. RISK WEIGHTED ASSETS
AND NOTES TO
ACCOUNTS OF SANIMA
BANK
Prepared by:
Dipesh Raj Pandey
Ace Institute of Management (BBA-BI)
Year - 2014

2. Risk weighted assets
 Risk weighted assets is a measure of the amount of a
banks assets, adjusted for risk. The nature of a bank's
business means it is usual for almost all of a bank's assets
will consist of loans to customers. Comparing the amount
of capital a bank has with the amount of its assets gives a
measure of how able the bank is to absorb losses. If its
capital is 10% of its assets, then it can lose 10% of its
assets without becoming insolvent.

3. Risk weighted assets
 Nepal Rastra Bank has developed and enforced capital
adequacy requirement based on international practices
with appropriate level of customization based on domestic
state of market developments. The existing regulatory
capital is based on the Basel committee's 1988
recommendations.
 The NCAF(New Capital Adequacy Framework) outlines the
Nepal Rastra Bank's guidelines for domestic commercial
banks, which is based on the simplest approaches of Basel
II framework.

4. Capital Adequacy should be maintained on
the basis of total risk weighted assets. The
logic behind the capital adequacy is to
protect the interest of public deposit as
well as safeguard the banks in their critical
financial position.
Institution Minimum capital adequacy on RWA(%)
Primary Capital Total Capital Fund
A, B and C class 6.0 12.0
D class 4.0 8.0

5. Risk weighted assets
 This system provided for the implementation of
a credit risk measurement framework with a
minimum capital requirement of 8% on banks
Risk Weighted Assets (RWA).
 In all the fiscal years, Sanima Bank has
maintained this requirement.

6. Risk weighted assets
 RISK WEIGHTED ASSETS
Particulars FY
2066/67
FY
2067/68
FY
2068/69
FY
2069/70
FY
2070/71
Adequacy of capital
fund on RWA
Core Capital 15.56 27.54 19.82 13.91 11.52
Supplementary
Capital
0.94 0.87 0.93 0.96 1.02
Total Capital Fund 16.51 28.41 20.74 14.87 12.54

7. Notes to accounts
 The notes to the accounts are a series of notes that are referred to in the main body of
the financial statements.
 The notes give further details on the numbers given in the accounts. The importance of
these numbers should not be underestimated. The accounts are not complete without
the notes. Investors who rely on the main body of the accounts and ignore the notes
are likely to find themselves misled.
 Typical notes include:
 a reconciliation of operating profit to operating cash flow which can be used to
calculate EBITDA, and working capital movements.
 a geographic breakdown of sales which can give investors an idea of exposure to
different national economies.
 details of assets and liabilities.
Because the notes can greatly change one's interpretation of the numbers in the financial
statements, a very effective way of understanding a set of financial statements is
to read the notes first — to read the accounts from the bottom up.

8. Notes to Accounts
 The notes to accounts of Sanima Bank give detailed information about
1. Equity (paid-up equity capital, general reserve, deferred tax reserve,
investment adjustment reserve, exchange equalization fund)
2. Proposed Bonus Share and Cash Dividend
3. Unpaid Dividend
4. Reconciliation Status
5. Loans and advances [Sectoral Classification, Movement of Loans, Summary
of Loans and Advances Disbursed, Recovered and Principal and Interest
Written-Off, Concentration of Loans & Advances (Funded & Non Funded
Facilities), Deprived sector lending (DSL)]

9. Notes to Accounts
6. Deposit Liabilities (Movement of Deposits, Concentration of Deposits)
7. Weighted Average Interest Rate Spread
8. Staff Loans and Advances
9. Taxation
10. Staff Housing
11. Gratuity
12. Staff Leave
13. Provision for staff bonus
14. Interest realization after year end

10. Notes to Accounts
15. Borrowing by the Bank against collateral of own Assets – NIL
16. Earnings Per Share, Share Price And Share Transaction
17. Details of Non Banking Assets
18. Details of Leasehold Assets Amortization
19. Fixed Assets Used By Government in Road Expansion
20. Classification of Assets And Liabilities Based On Maturity
21. Related Parties
22. Total of key management personnel compensation (Disclosure as per NAS-16)
23. Compensation to Board of Directors (BODs)
24. Risk Management Functions & BASEL II Disclosure