To the Members
Your Directors are pleased to present the Fourteenth Annual Report on business andoperations of your Bank together with the audited accounts for the year ended March 312018.
BUSINESS OVERVIEW AND OUTLOOK
Your Bank had another year of highly satisfactory business and financial outcomes inFinancial Year (FY') 2017-18 with a net profit of Rs. 42246 million which is anincrease of 26.9% from FY 2016-17. Your Bank showed continued acceleration and momentum inbuilding a strong liability franchise with CASA ratio at 36.5% at the end of FY 2017-18.Your Bank's Retail Assets Product Suite has also built significant traction andDigitization remains a key focus to further grow the Retail and MSME book. Your Bank'sbranch network stood at 1100 branches and 1724 ATMs (including Bunch Note Acceptors) ason March 31 2018.
STATE OF THE AFFAIRS OF THE BANK
FY 2017-18 was a significant year in your Bank's lifecycle wherein your Bank raisedincremental growth capital aggregating to Rs. 124150 million through various instrumentsthus demonstrating its ability to raise capital across products and cycles. Of thisamount your Bank raised an aggregate of Rs. 70000 million via Basel III compliant Tier 2bonds and Rs. 54150 million via Basel III compliant AT1 bonds.
Your Bank was the first bank in India to commence operations at International FinancialServices Centre (IFSC') at GIFT City Gujarat (IBU'). In FY 2017-18 yourBank's IFSC Business Unit (IBU') balance sheet size crossed USD 2.5 billion as onMarch 31 2018 on the back of significant momentum from specialized knowledge sectors.
On February 06 2018 your Bank successfully completed issuance of its maiden USD 600million bond issuance in the international debt markets under its USD 1 billion MediumTerm Note (MTN) programme which was the largest debut international bond issuance by anIndian bank including the lowest spread. The tenor of the bond is 5 years with a rating ofBaa3 by Moody's Investors Service. The Bond is listed on the London Stock ExchangeInternational Securities Market (LSE ISM) the Singapore Exchange Securities TradingLimited (SGX) and the India
International Exchange IFSC at GIFT City Gandhinagar. The proceeds are being used tofund your Bank's IFSC Banking Unit (IBU) in Gift City and expand IBU's rapidly growingbusiness opportunities.
Your Bank raised USD 150 million long tenor loan from Overseas Private InvestmentCorporation (OPIC') the U.S. Government's development finance institution andWells Fargo to increase lending to MSMEs in India. USD 50 million of the financing isbeing specifically used to expand support to women-owned businesses while another USD 50million is being used for financing MSME businesses in low-income states. This was thethird such transaction between OPIC and your Bank after the first transaction of USD265 million OPIC facility in 2016 towards MSME financing in India.
Your Bank entered into a USD 400 million co-financing programme with the EuropeanInvestment Bank (EIB') to increase lending to renewable energy power generationacross India with special focus on construction of new solar plants and wind farms acrossthe country. This novel initiative where EIB will lend USD 200 million to your Bank for15 years for on-lending to the renewable sector is EIB's first partnership with your Bankand is also EIB's first-of-its-kind financing agreement for renewable energy in Asia. Thisdemonstrates another milestone in your Bank's leadership as India's pre-eminentGreen Bank'. The highly successful transaction showcases continued trust andenthusiasm of Global multilaterals and Finance Institutions in partnering with your Bank.
In November 2017 your Bank successfully closed a 5 year Syndicated loan facilityled by CTBC Bank Bank of Taiwan Mega International Commercial Bank and Land Bank ofTaiwan which saw participation from 17 banks. The syndication which closed at USD 250million saw a total subscription of USD 355 million and ranks amongst the largest bankparticipation in a Taiwan loan transaction. This is your Bank's second such strategic loansyndication transaction in Taiwan after a successful maiden transaction in 2016 for a 5year USD 130 million syndicated loan.
Your Bank raised its maiden one year Samurai loan in a syndication led by Bankof Tokyo Mitsubishi UFJ Ltd. (MUFG). The issue was successfully closed withoversubscription and saw total participation of JPY 16.5 billion (~USD 150 million) across8 banks.
Further information on the Business overview and outlook and State of the affairs ofyour Bank is discussed in detail in the Management Discussion & Analysis section.
There is no change in the nature of business of your Bank for the year under review.
FINANCIAL PERFORMANCE _STANDALONE_
Rs. in million
|Particulars ||April 01 2017 to March 31 2018 ||April 01 2016 to March 31 2017 |
|Deposits ||2007381.48 ||1428738.57 |
|Borrowings ||748935.81 ||386066.73 |
|Advances ||2035338.63 ||1322626.77 |
|Total Assets/Liabilities ||3124456.03 ||2150599.18 |
|Net Interest Income ||77370.59 ||57973.07 |
|Non-Interest Income ||52238.34 ||41567.57 |
|Operating profit ||77481.13 ||58375.23 |
|Provisions and Contingencies ||15538.04 ||7934.05 |
|Profit before Tax ||61943.09 ||50441.18 |
|Provision for taxes ||19697.45 ||17140.21 |
|Net Profit ||42245.64 ||33300.96 |
|Add: Surplus/(Deficit) brought forward from last period ||79333.92 ||55446.80 |
|Amount available for appropriation ||121579.56 ||88747.77 |
|APPROPRIATIONS || || |
|Statutory Reserve under Section 17 of the Banking Regulation Act 1949 ||10561.41 ||8325.24 |
|Capital Reserve ||659.65 ||1083.00 |
|Investment Reserve ||- ||- |
|Proposed Dividend and Tax thereon* ||6605.48 ||- |
|Adjustment to earlier year dividend and tax thereon ||- ||5.61 |
|Surplus carried to Balance Sheet ||103753.02 ||79333.91 |
|KEY PERFORMANCE INDICATORS || || |
|Net Interest Margin ||3.5% ||3.4% |
|Return on Annual Average Assets ||1.6% ||1.8% |
|Return on Equity ||17.7% ||21.5% |
|Cost to Income Ratio ||40.2% ||41.4% |
* The Bank has sub-divided each equity share having face value of Rs. 10 pershare into five equity shares having a face value of Rs. 2 per share. Thesub-division of equity shares has been approved by shareholders. The record date for thesub-division was September 22 2017. Per share information mentioned above reflects theeffect of sub-division for each of period presented.
Your Bank posted Net Revenue (Net Interest Income and other income) of Rs. 129608.93million and Net Profit of Rs. 42245.64 million for FY 2017-18. The Net Revenue and NetProfit for FY 2016-17 were Rs. 99540.64 million and
Rs. 33300.96 million respectively. Appropriations from the Net Profit have beeneffected as per the table given above. Please refer to the section on Financial andOperating Performance in the Management Discussion and Analysis for a detailed analysis offinancial data.
Your Bank is rewarding its shareholders by way of consecutive cash dividendsconsidering the consistent financial performance of your Bank and promising futureprospects while retaining capital to maintain a healthy Capital Adequacy Ratio and tosupport future growth. In view of the excellent financial performance of your Bank and incontinuance of the earlier trends of cash dividends the Board of Directors haverecommended Dividend at a rate of Rs. 2.70 per equity share having face value of Rs. 2each (135%) for the year ended March 31 2018 for approval by the Shareholders at the 14thAnnual General Meeting (Rs. 12 per equity share having face value of Rs. 10 each (120%)for the previous year ended March 31 2017). This dividend shall be subject to tax ondividend to be paid by the Bank. The dividend proposed is in line with the Dividend Policyof the Bank. The details about the Dividend Policy of the Bank has been provided in theReport on Corporate Governance forming part of this Annual Report.
On September 08 2017 the shareholders of the Bank had approved the sub-division ofeach equity share having a face value of Rs. 10 into five equity shares having a facevalue of Rs. 2 each through postal ballot. The record date for the sub-division wasSeptember 22 2017.
TRANSFER TO RESERVES
As per requirement of RBI regulations the Bank has transferred the following amount tovarious reserves during Financial Year ended March 31 2018: Rs. in million
|Amount transferred to Statutory Reserve ||Amount |
| ||10561.41 |
|Capital Reserve ||659.65 |
|Investment Reserve ||- |
CAPITAL RAISING & CAPITAL ADEQUACY RATIO _CAR_
During FY 2017-18 with a view to encourage wider participation of small investors bymaking Equity Shares of the Bank a_ordable your Bank had sub-divided the erstwhile Facevalue of Equity Shares of Rs. 10 (Rupees Ten only) each fully paid into a smallerdenomination of Rs. 2 (Rupees Two only) per Equity Share fully paid up.
During the FY 2017-18 your Bank has issued 20538180 equity shares of Rs. 2 eachpursuant to the exercise of stock optionsaggregatingtoRs. 41076360outofwhich1540740equity shares were of the face value of Rs. 10 each issued prior to sub-division of theequity shares of the Bank which were later converted into 7703700 equity shares of Rs.2 each and 12834480 equity shares of Rs. 2 each were issued post sub-division of equityshares of the Bank.
Post allotment of aforesaid equity shares the issued subscribed and paid up sharecapital of your bank stands at Rs. 4606 million comprising of 2302967245 equity sharesof Rs. 2 each as on March 31 2018.
Your Bank has not issued any equity shares with differential voting rights during theyear.
During the year the bank has raised Rs. 70000 million by way of issue ofnon-convertible redeemable Basel III Compliant Tier 2 bonds and Rs. 54150 million byway of issue of Basel III compliant Additional Tier 1 bonds. Further the Bank has raisedUSD 600 million (Rs. 38975 million) by way of issue of fixed rate medium term note ininternational debt market under its USD 1 billion Medium Term Note Programme.
In line with the RBI circular on Capital Adequacy Framework your Bank has computedcapital charge for operational market & credit risk and its Capital Adequacy Ratio asper Basel III accord as at March 31 2018.
Your Bank is well capitalized with a Capital Adequacy Ratio of 18.4% as on March 312018 of which Tier 1 Capital Ratio was 13.2% and Tier 2 Capital Ratio was 5.2%.
Being a banking company the disclosures required as per Rule 8(5)(v) & (vi) of theCompanies (Accounts) Rules 2014 read with Sections 73 and 74 of the Companies Act 2013are not applicable to your Bank.
AWARDS AND RECOGNITIONS
During the year under review your Bank was recognized in various ways/by variousinstitutions and some of the key awards presented to the Bank are listed below: YES BANKwas awarded the Best Bank for SMEs in India' at the Asiamoney Best Banks Awards 2018YES BANK was awarded Bank of the Year India 2017' by The Banker Magazinepart of the Financial Times group UK (twice in last three years) YES BANK was awardedBest Bank in India in the Asiamoney Corporate Client Choice Survey 2017 and Recognized asBest Bank in India for CSR in the Asiamoney Awards 2017 YES BANK was awarded theAPAC Leader in Digital Transformation' in White Label Products andBank-as-a-Service' category at the Financial Insights Innovation Awards 2017 SingaporeYES BANK was awarded the Karlsruhe Sustainable Finance Award 2017 in the BestInnovation in Sustainable Financial Products & Services' category for its innovativeblended finance facility aimed at promoting environmentally sustainable livelihood amongwomen salt farmers in Gujarat India YES BANK was recognized in the Gartner ExcellenceAwards for its Big Data Analytics use cases YES SECURITIES recognized as India'sBest Investment Bank' by Global Finance magazine YES BANK was recognized as theFastest Growing Mid-Sized Bank' at Business Today Best Bank Awards YES BANK wasawarded in the Fastest Growing Mid-Sized Bank' Category at BW Bussinessworld MagnaAward YES BANK was awarded for innovation in Blockchain product (supply chain vendorfinancing) and YES ENGAGE at the Finnoviti Award 2018 YES BANK was awarded as TheExtraordinaire Brand' at the Brand Vision Summit 2018 YES BANK was ranked first forSustainability Performance & Sustainability Reporting at the Indian Chamber ofCommerce Corporate Governance & Sustainability Vision Awards 2018 YES BANK was awardedAccelerator of the Year' for YES FINTECH by the India Fintech Awards 2017
YES BANK was awarded at the 29th Qualtech Prize for Improvement and Innovation in theBFSI Industry for use of Data Analytics by Qimpro Consultants YES BANK was adjudged theGlobal Winner' in the Supply Chain Finance category and was also adjudged asTransaction Bank of the Year for Asia Pacific at The Banker Transaction Banking Awards2017 YES BANK was awarded Best Bank in India CSR in the Asiamoney Country Awards2017 Hong Kong YES BANK was one of the highest gainers in rankings in the prestigious TheBanker 1000 Rankings in 2017 of Largest Banks of the World and 2017 edition of ForbesGlobal 2000 List of World's Largest Companies Rose 129 places to #271 World Ranking inThe Banker 1000 Rankings' Rose 493 places to #1239 World ranking in ForbesGlobal 2000 List'. Continues to be amongst the youngest Banks in this list.
YES BANK won two awards at The Asset Triple A Asia Infrastructure Awards 2017 Renewableenergy deal of the year Solar (Overall) for Sepset Construction Limited loanfacility in which YES BANK acted as the Lead Arranger Project finance/Renewable energydeal of the year Solar India for Sepset Construction Limited in which YES BANKacted as the Lead Arranger YES BANK was awarded Celent Model Bank 2017 Award for PaymentsProduct for API Banking in Boston. YES BANK was the first Bank to introduce APIBanking' service in India YES BANK was adjudged the Best Trade Finance Bank inIndia' at The Asian Banker Transaction Banking Awards 2017 for the 3rd year in a row YESBANK was awarded the Best Digital Payments System by Banks for Smart Cities' duringthe Smart City Conclave 2017 in Chandigarh YES BANK was awarded Golden Peacock award forCorporate Social Responsibility 2017 YES BANK was awarded Golden Peacock National TrainingAward 2018
EMPLOYEES STOCK OPTION SCHEME
On September 22 2017 pursuant to the approval of shareholders your Bank hassub-divided the equity shares having face value of Rs. 10 each fully paid up into fiveequity shares having face value of Rs. 2 each fully paid up. All shares and per shareinformation in the table given below are restated to reflect the effect of sub-divisionfor each of the periods presented.
Your Bank has instituted Stock Option Plans to enable its employees to participate inyour Bank's future growth and financial success. Your Bank provides its employees aplatform for participating in important decision making and instilling long-termcommitment towards future growth of the Bank by way of rewarding them through StockOptions. In terms of compensation and benefit policy of the Bank employees are grantedoptions as part of Annual Performance Review process based on their performance as well asto ensure their retention and to hire the best talent for its senior management and keypositions.
The Bank has Four Employee Stock Option Schemes in operation viz.: Joining EmployeeStock Option Plan II (JESOP II); Joining Employee Stock Option Plan III (JESOP III); YBLESOP (consisting of two sub schemes JESOP IV/ PESOP I); and YBL JESOP V/PESOP II(consisting of three sub schemes JESOP V/ PESOP II/PESOP II -2010).
The Employee Stock Option Plans are administered by the Nomination & RemunerationCommittee of the Board of the Bank. The details of vesting of various schemes are asfollows:
|ESOP Schemes ||Vesting Period |
|JESOP II ||50% at the end of 3rd year and balance at the end of 5th year from the Grant date. |
|JESOP III ||50% at the end of 3rd year and balance at the end of 5th year from the Grant Date. |
|JESOP IV ||50% at the end of 3rd year and balance at the end of 5th year from the Grant date. |
|JESOP V ||50% at the end of 3rd year and balance at the end of 5th year from the Grant Date. |
|PESOP I ||25% at the end of each year from the Grant Date. |
|PESOP II ||30% 30% & 40% at the end of 1st year 2nd year and 3rd year respectively from the Grant Date. |
|PESOP II - 2010 ||30% 30% & 40% at the end of 3rd year 4th year and 5th year respectively from the Grant Date. |
During the year all new grants have been made in YBL JESOP V and PESOP II 2010and grant under PESOP II has been discontinued w.e.f. January 20 2010. The schemesare in compliance with the SEBI (Share based Employees benefits) Regulations 2014. Sourceof shares are primary in nature since your Bank has been issuing new equity shares uponexercise of options.
Options under all the aforesaid plans are granted for a term of 10 years (inclusive ofthe vesting period) and are settled with equity shares being allotted to the beneficiaryupon exercise.
No stock options were issued to the Directors of your Bank.
Various details including option movement during the year under Schemes i.e. JESOP IIJESOP III YBL ESOP and YBL JESOP V / PESOP II respectively are as follows:
| || || || || || || |
YBL JESOP V / PESOP II
| ||JESOP II ||JESOP III ||YBL ESOP YBL ESOP (JESOP IV) ||YBL ESOP (PESOP I) ||YBL JESOP V ||YBL PESOP II ||YBL PESOP II 2010 |
|Date of Shareholders Approval ||July 24 ||July 24 ||August 29 ||August 29 ||September 18 ||September 18 ||September 18 2008* |
| ||2006 ||2006 ||2007 ||2007 ||2008* ||2008* || |
|Total Number of Options approved ||25000000 ||25000000 ||25000000 ||25000000 ||47500000 ||76140000 ||101360000 |
|Total Number of options outstanding at the Beginning of the period ||- ||- ||367300 ||664825 ||20247650 ||5030675 ||59106665 |
|Total No. of Options granted (during FY 2017-18) ||- ||- ||- ||- ||1697500 ||- ||3847500 |
|The Pricing Formula ||Refer Note 1 ||Refer Note 1 ||Refer Note 1 ||Refer Note 1 ||Refer Note 1 ||Refer Note 1 ||Refer Note 1 |
|Options Vested (during FY 2017-18) ||- ||- ||- ||- ||649900 ||- ||5328100 |
|Options Exercised (during FY 2017-18) ||- ||- ||335550 ||263450 ||4611800 ||2754025 ||12573355 |
|Total No. of shares arising as a result of exercise of option ||- ||- ||335550 ||263450 ||4611800 ||2754025 ||12573355 |
|Options lapsed / Forfeited (during FY 2017-18) ||- ||- ||25500 ||154000 ||1376500 ||- ||6647500 |
|Total No. of options outstanding at the end of the year ||- ||- ||6250 ||247375 ||15956850 ||2276650 ||43733310 |
|Total No. of options exercisable at the end of the year ||- ||- ||6250 ||247375 ||2271100 ||2276650 ||15889560 |
|Variation of terms of options ||Refer Note 2 ||Refer Note 2 ||Refer Note 2 ||Refer Note 2 ||Refer Note 2 ||Refer Note 2 ||Refer Note 2 |
|Money realized by exercise of Options (during FY 2017-18) (in Rs. ) ||- ||- ||12108830 ||9188143 ||356917936 ||65074379 ||935364414 |
|(i) Total No. of Options granted to Senior Management Personnel (SMP) ||- ||- ||- ||- ||- ||- ||Refer |
| || || || || || || ||Sub-table 1 |
|(ii) Any other employee who received a grant in any one year of options || || || || ||Refer || ||Refer |
| ||- ||- ||- ||- || ||- || |
|amounting to 5% or more of options granted during that year || || || || ||Sub-table 2 || ||Sub-table 2 |
|(iii) Identified employees who are granted options during any one year ||Nil ||Nil ||Nil ||Nil ||Nil ||Nil ||Nil |
|equal to or exceeding 1% of the issued capital (excluding outstanding || || || || || || || |
|warrants and conversions) of the Company at the time of grant || || || || || || || |
|Diluted Earnings Per Share (EPS) of the Bank after considering the || || || || || || || |
| || || || ||18.06 || || || |
|e_ect of potential equity shares on account of exercise of Options || || || || || || || |
Impact of the difference between the Intrinsic Value of the Options and the Fair Valueof the Options on Profits and on EPS
The Bank has charged Nil amount being the intrinsic value of the stock options grantedfor the year ended March 31 2018 and March 31 2017. Had the Bank adopted the FairValue method (based on Black- Scholes pricing model) for pricing and accounting ofoptions net profit after tax would have been lower by Rs. 414.98 million (Previous year:Rs. 464.49 million) the basic earnings per share would have been Rs. 18.24 (Previousyear: Rs. 15.56) per share instead of Rs. 18.43 (Previous year: Rs. 15.78) per share; anddiluted earnings per share would have been Rs. 17.88 (Previous year: Rs. 15.14) per shareinstead of Rs. 18.06 (Previous year: Rs. 15.35) per share.
|Weighted average price of the shares exercised during the year (in Rs. ) ||- ||- ||36.09 ||34.88 ||77.39 ||23.63 ||74.39 |
|Weighted average fair values of the outstanding options (in Rs. ) ||- ||- ||22.94 ||28.89 ||164.32 ||26.77 ||133.97 |
* The options under the scheme were increased subsequently from 1 crore to 3crores and finally to 4.5 crores by the shareholders' approval dated September 03 2009and June 28 2011 respectively.
The Securities and Exchange Board of India (SEBI') has prescribed two methods toaccount for stock grants; namely (i) the intrinsic value method; (ii) the fair valuemethod. The Bank adopts the intrinsic value method to account for the stock options itgrants to the employees. The Bank also calculates the fair value of options at the time ofgrant using Black-Scholes pricing model with the following assumptions:
| ||March 31 2018 |
|Risk free Interest Rate ||6.29%-9.23% |
|Expected life ||1.5 yrs 7.5 yrs |
|Expected Volatality** ||25.01%-48.72% |
|Expected dividends ||1.20% |
Note 1: Being the closing price of the Equity Shares on the stock exchange with thehighest trading volumes on the last working day prior to the date of grant.
Note 2: There is no variation in the terms of the options during the Financial Yearended March 31 2018.
**Expected volatility is average volatility for expected life of the option.
Sub-table 1: Following are the total number of stock options that have been granted toSenior Management Personnel (SMP') during the financial year ended March 31 2018:
|Scheme ||Name of Employees ||Designation ||Options granted ||Grant Price |
|PESOP II 2010 ||Amit Sanan ||Group President ||50000 ||351.05 |
|PESOP II 2010 ||Amit Shah ||Senior President ||75000 ||351.05 |
|PESOP II 2010 ||Arun Agrawal ||Group President ||125000 ||351.05 |
|PESOP II 2010 ||Aseem Gandhi ||Senior President ||75000 ||351.05 |
|PESOP II 2010 ||Ashish Agarwal ||Senior Group President ||375000 ||351.05 |
|PESOP II 2010 ||Devamalya Dey ||Senior Group President ||37500 ||351.05 |
|PESOP II 2010 ||Jyoti Prasad Ratho ||Senior President ||50000 ||351.05 |
|PESOP II 2010 ||Kumar Padhmanabhan ||Senior Group President ||125000 ||351.05 |
|PESOP II 2010 ||Lata Dave ||Senior President ||100000 ||351.05 |
|PESOP II 2010 ||Namita Vikas ||Group President ||25000 ||351.05 |
|PESOP II 2010 ||Niranjan Banodkar ||Senior President ||62500 ||351.05 |
|PESOP II 2010 ||Pralay Mondal ||Senior Group President ||175000 ||351.05 |
|PESOP II 2010 ||Preeti Sinha ||Senior President ||25000 ||351.05 |
|PESOP II 2010 ||Punit Malik ||Group President ||125000 ||351.05 |
|PESOP II 2010 ||Rajat Mehta ||Senior President ||37500 ||351.05 |
|PESOP II 2010 ||Shubhada Rao ||Group President ||25000 ||351.05 |
|PESOP II 2010 ||Vinod Bahety ||Group President ||150000 ||351.05 |
Sub-table 2: Following are the details of the employees who have received the grant ofoptions amounting to 5% or more of options granted during the financial year ended March31 2018.
|Scheme ||Name of Employees ||Designation ||Options granted* ||Grant Price |
|JESOP V ||Ajay Rajan ||Group President ||300000 ||311.65 |
| || ||- YES BANK Ltd. || || |
|PESOP II 2010 ||Ashish Agarwal ||Senior Group President ||375000 ||351.05 |
| || ||- YES BANK Ltd. || || |
|JESOP V ||Prasanth Prabhakaran ||CEO & Senior President ||300000 ||344.15 |
| || ||Brokerage || || |
| || ||- YES Securities (India) Ltd. || || |
|JESOP V ||Prasun Kumar Sikdar ||Group President ||175000 ||311.65 |
| || ||- YES BANK Ltd. || || |
|JESOP V ||Sandeep Prabhani ||COO & Senior President ||100000 ||311.65 |
| || ||- YES Asset Management || || |
| || ||(India) Ltd. || || |
* 5% of Schemewise grants.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY COMPANIES
As on March 31 2018 your Bank had three wholly owned Subsidiaries YES Securities(India) Limited (YSIL') YES Asset Management (India) Limited(YAMIL') and YES Trustee Limited (YTL').
YES SECURITIES _INDIA_ LIMITED _YSIL_
YES Securities (India) Limited successfully completed its fourth full financial year ofoperations on March 31 2018.
During FY 2017-18 YSIL earned a total revenue of Rs. 718.58 million against Rs. 637.90million in the previous year. YSIL earned a profit of Rs. 133.01 million in FY 2017-18.
YSIL has two business segments namely Retail Broking and Investment Banking &Merchant Banking which are explained as under:
YSIL continued to offer a best-in-class 3-in-1 account proposition supported by theBank and leveraged the Bank's branch network coverage to further strengthen its presencein the 10 focus cities Mumbai NCR Bengaluru Chennai Hyderabad KolkataChandigarh Pune Ahmedabad and Jaipur. During the year YSIL continued to invest inpeople technology and processes to provide the Bank's valued customers a superiorinvestment experience both online and through a competent team of dealers.
YSIL's web and mobile investment platform saw consistent growth in client transactionvolumes leading to record daily average turnover (DAT) metrics throughout the year. YSIL'sResearch desk continues to deliver solid fundamental and technical views and is closelyfollowed by clients for its in-depth coverage.
1. Systematic Value Subscription Plan (S-VSP): Volume-linked advance brokerage plansgeared towards long-term wealth creation by investing in direct equities through SIP route
2. YES Selectus: Portfolio Investment Advisory product offered to wealth-categoryclients
3. YES NRML: Leveraged product for high-volume traders
Investor Education Initiative(s) YES MasterClass:
Multi-city events where experts from respected financial services institutions deliverinvestor education and investment-related insights to existing and potential customers.
In FY 2017-18 YES MasterClass travelled to over 5 cities and addressed 700+ financialenthusiasts and investors.
Further in FY 2017-18 YSIL continued to build its Institutional Broking capabilitiesand secured empanelment as a Broker with several leading institutional and corporateclients.
The Investment Banking team provides M&A and Capital Advisory services to large andmid-market corporate and financial sponsor clients through key products such as Mergers& Acquisition Advisory and Private Equity fund-raising.
YSIL's highly-experienced teams offer expertise across a variety of sectors includingFood & Agribusiness Media & Entertainment Consumer Markets Infrastructure &EPC BFSI Internet & E-commerce Industrials and Logistics.
Further YSIL's Sustainable Investment Banking (SIB) practice focuses on providingadvisory services exclusively in the areas of Sustainability Clean Technology RenewableEnergy Environmental Services and Education.
YSIL's Investment Banking team closed marquee M&A and fund raising transactionsduring the year under review. Some of the representative transactions consummated by theteam include: Exclusive strategic & financial advisor for sale of North Country MallStrategic & financial advisor to Signature Global for raising growth capital from KKR
Exclusive strategic & financial advisor to Massive Restaurant and Everstone Capitalfor raising funds from Gaja Capital Exclusive strategic & financial advisor to TravelNews Service for stake sale to Future Retail Exclusive strategic & financial advisorto Bhilwara Energy for sale of 83 MW wind assets
YSIL's Merchant Banking practice provides Capital Market products such as InitialPublic O_erings (IPO) Qualified Institutional Placements (QIP) Public Debt O_eringsRights Issues and other structured offerings to leading Indian companies at each stage ofthe capital life-cycle.
In FY 2017-18 the Merchant Banking team completed 15 transactions across ticket sizesand instrument types with an aggregate fund raise of over Rs. 250 billion including 2 ofthe Top 3 Equity fund raises for the year. Some of the representative transactionsconsummated by the team during the year under review include: Book Running Lead Manager tothe IPO of New India Assurance Seller's Broker to the OFS of NTPC
Lead Manager to the QIP of Union Bank of India Book Running Lead Manager to the IPO ofReliance Nippon Life Asset Management
YES ASSET MANAGEMENT _INDIA_ LIMITED _YAMIL_ & YES TRUSTEE LIMITED _YTL_
YES BANK Limited has incorporated YES Asset Management (India) Limited on April 212017 and YES Trustee Limited on May 03 2017 as wholly owned subsidiaries for the proposedmutual fund business. The final approval from SEBI for the mutual fund is awaited. YTLwill be the legal owner of the property of the Mutual Fund (with the beneficial ownershipvesting in the unit holders of the Mutual Fund) and will hold the same in trust for thebenefit of the unit holders of the Mutual Fund.
YAMIL has been appointed as the Investment Manager of the Mutual Fund by the YTL videduly signed and executed Investment Management Agreement between them.
The Financials of the subsidiaries of the Bank are available on the website of the Bank(www.yesbank. in). Any member who is desirous to have a copy of the annual accounts of thesubsidiaries may write to the Company Secretary of the Bank. Financials of Bank and itssubsidiaries shall also be available for inspection by members or trustees of the holdersof any debentures of the Bank at its Registered office.
RATINGS OF VARIOUS DEBT INSTRUMENTS
During the year under review your Bank has raised
Rs. 124150 million by way of issue of rated listed unsecured Bonds in the nature ofDebentures and USD 600 million by way of issue of senior unsecured fixed rate notes underits maiden USD 1 billion Medium Term Notes (MTN') Programme. These instruments havebeen rated by various rating agencies namely Moody's Investors Service ICRA Limited(ICRA') and India Ratings
& Research Pvt. Ltd. (India Ratings') a Fitch Group Company etc. Thedetails of the instruments as well as their ratings are as below: i. Your Bank issued25000 Rated Listed Non-Convertible Redeemable Unsecured Basel III Compliant Tier 2 bondsin the form of Debentures issued on Private Placement basis of Face Value of Rs. 1000000each fully paid up aggregating to
Rs. 25000 million on September 29 2017 and the issue was rated by ICRA and IndiaRatings. ICRA assigned a rating of ICRA AA+ (hyb)' with a Positive Outlook and IndiaRatings assigned a rating of IND AA+' with a Stable Outlook. ii. Your Bank issued15000 Rated Listed Non-Convertible Redeemable Unsecured Basel III Compliant Tier 2 bondsin the form of Debentures issued on Private Placement basis of Face Value of Rs. 1000000each fully paid up aggregating to
Rs. 15000 million on October 03 2017 and the issue was rated by ICRA and IndiaRatings. ICRA assigned a rating of ICRA AA+ (hyb)' with a Positive Outlook and IndiaRatings assigned a rating of IND AA+' with a Stable Outlook. iii. Your Bank issued54150 Perpetual Subordinated Unsecured Basel III Compliant Additional Tier 1 Bonds in thenature of Debentures issued on Private Placement basis of Face Value of Rs. 1000000 eachfully paid up aggregating to Rs. 54150 million on October 18 2017 and the issue wasrated by ICRA and India Ratings. ICRA assigned a rating of ICRA AA (hyb)' with aPositive Outlook and India Ratings assigned a rating of IND AA' with a StableOutlook. iv. Your Bank issued 30000 Rated Listed Non-Convertible Redeemable UnsecuredBasel III Compliant Tier 2 bonds in the form of Debentures issued on Private Placementbasis of Face Value of Rs. 1000000 each fully paid up aggregating to
Rs. 30000 million on February 22 2018 and the issue was rated by ICRA and IndiaRatings. ICRA assigned a rating of ICRA AA+ (hyb)' with a Positive Outlook and IndiaRatings assigned a rating of IND AA+' with a Stable Outlook. v. Your Bankestablished a USD 1 billion MTN Programme during the FY 2017-18 which was listed on IndiaINX's Global Securities Market (GSM') London Stock Exchange InternationalSecurities Market (LSE ISM') and the Singapore Exchange Securities Trading Limited(SGX'). Your Bank has drawn down USD 600 million under the MTN Programme. The MTNProgramme of the Bank was rated by Moody's Investors Service which has assigned a ratingof Baa3' with a Stable Outlook to the notes of the Bank.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
MR. SUBHASH CHANDER KALIA
Mr. Subhash Chander Kalia was appointed as an Additional Director on the Board of theBank on April 03 2018 to hold office as Non-Executive Non-Independent Director upto thedate of ensuing Annual General Meeting (AGM'). Mr. Kalia was earlier associated withthe Bank as Strategic Advisor. Your Bank has received a notice in writing from a memberproposing the candidature of Mr. Kalia as Director on the Board of the Bank.Further the Nomination and Remuneration Committee (N&RC') and Board ofDirectors of the Bank have also recommended the appointment of Mr. Kalia as Non-ExecutiveNon-Independent Director liable to retire by rotation to the Shareholders at the ensuingAGM.
MR. RENTALA CHANDRASHEKHAR
Mr. Rentala Chandrashekhar was appointed as an Additional Director on the Board of theBank on April 26 2018 to hold office upto the date of ensuing AGM. Your Bank hasreceived a notice in writing from a member proposing the candidature of Mr. Chandrashekharas Director on the Board of the Bank. Further the N&RC and Board of Directors of theBank have also recommended the appointment of Mr. Chandrashekhar as an IndependentDirector to the Shareholders at the ensuing AGM.
Dr. PRATIMA SHEOREY
Dr. Pratima Sheorey was appointed as an Additional Director on the Board of the Bank onApril 26 2018 to hold office upto the date of ensuing AGM. Your Bank has received anotice in writing from a member proposing the candidature of Dr. Sheorey as Director onthe Board of the Bank. Further the N&RC and Board of Directors of the Bank have alsorecommended the appointment of Dr. Sheorey as an Independent Director to the Shareholdersat the ensuing AGM.
The relevant details including profiles of Mr. Subhash Chander Kalia Mr. RentalaChandershekar and Dr. Pratima Sheorey are included separately in the AGM Notice andreport on Corporate Governance forming part of this Annual Report.
MR. AJAI KUMAR
In terms of Section 152 of the Companies Act 2013 Mr. Ajai KumarNon-Executive Non-Independent Director being liable to retire by rotation shall retireat the ensuing AGM and being eligible for re-appointment offers himself forre-appointment.
MR. RANA KAPOOR
Mr. Rana Kapoor has been serving as the Managing Director & CEO of the Bank sinceSeptember 01 2004 in accordance with the provisions of the Articles of Association(AOA') of the Bank recommendation of N&RC and the Board of Directors and withthe approval of the Reserve Bank of India (RBI') and Members from time to time. Hiscurrent tenure as MD & CEO of the Bank as approved by the RBI and Members (as approvedby the Members at the AGM held on June 06 2015) is valid upto August 31 2018.
- The Board of Directors at their meeting held on April 26 2018 based on theprovisions of the AOA and recommendation of N&RC have decided to recommend there-appointment of Mr. Rana Kapoor as MD & CEO with effect from September 01 2018 fora period of three (3) years to the Members of the Bank for approval subject to approvalof RBI.
Mr. SAURABH SRIVASTAVA
Mr. Saurabh Srivastava Independent Director of the Bank on April 22 2018 completedhis tenure as Director on the Board of the Bank in terms of RBI approval dated January 282016 and March 28 2018. Accordingly Mr. Srivastava ceased to be Director on theBoard of the Bank.
Ms. DEBJANI GHOSH
Ms. Debjani Ghosh Independent Director of the Bank has tendered her resignation fromthe directorship of the Bank on April 26 2018 with immediate effect due to herpreoccupation on account of her joining the NASSCOM as President.
The Board places on record its sincere appreciation for the valuable services renderedby Mr. Saurabh Srivastava and Ms. Debjani Ghosh during their tenure as Directors of theBank.
KEY MANAGERIAL PERSONNEL
Mr. Rana Kapoor MD & CEO Mr. Raj K. Ahuja Group Chief Financial Officer and Mr.Shivanand R. Shettigar Company Secretary of the Bank are the Key Managerial Personnel asper the provisions of the Companies Act 2013 and rules made thereunder.
Mr. Raj K. Ahuja was appointed as Chief Financial Officer (CFO') and KeyManagerial Personnel and was designated as Group CFO of the Bank w.e.f. April 03 2018 incompliance with RBI circular dated May 18 2017 which inter-alia prescribed minimumqualification for CFO of the Banks. Mr. Rajat Monga ceased to be the CFO and KeyManagerial Personnel in terms of the provisions of Section 203 of the Companies Act 2013with effect from April 03 2018. Mr. Rajat Monga is continuing with his other importantresponsibilities in the Bank.
DECLARATION BY INDEPENDENT DIRECTORS
The Bank has received necessary declarations from each Independent Director underSection 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations')that they meet the criteria of independence laid down thereunder.
FAMILIARIZATION PROGRAMS FOR INDEPENDENT DIRECTORS
Various programs were undertaken for familiarizing the Independent Directors which aredisclosed in detail in the Corporate Governance Report which forms part of this AnnualReport.
NUMBER OF MEETINGS OF THE BOARD
Regular meetings of the Board are held to discuss and decide on various businesspolicies strategies financial matters and other businesses. The schedule of theBoard/Committee meetings to be held in the forthcoming financial year is circulated to theDirectors in advance to enable them to plan their schedule for effective participation inthe meetings. Due to business exigencies the Board has also been approving severalproposals by circulation from time to time.
The Board met Eight (8) times during the Financial Year 2017-18 viz. on April 19 2017April 20 2017 May 09 2017 (for business strategy) June 06 2017 July 26 2017October 26 2017 November 29 2017 and January 18 2018.
Additionally several Committee meetings were held during the year including AuditCommittee and Risk Monitoring Committee Meetings which met six (6) times during the year.
Detailed information on the meetings of the Board and its Committees are included inthe report on Corporate Governance which forms part of this Annual Report.
COMMITTEES OF THE BOARD
The Bank has following twelve (12) Board level Committees which have been establishedin compliance with the requirements of the business and relevant provisions of applicablelaws and statutes:
1. Audit Committee
2. Risk Monitoring Committee
3. Board Credit Committee
4. IT Strategy Committee
5. Corporate Social Responsibility Committee
6. Nomination and Remuneration Committee
7. Capital Raising Committee
8. Stakeholders Relationship Committee
9. Fraud Monitoring Committee
10. Service Excellence Branding and Marketing Committee 11. Board Committee on WillfulDefaulters & Non-Cooperative Borrowers 12. Committee of Independent Directors.
The details with respect to the composition terms of reference number of meetingsheld etc. of these Committees are given in the report on Corporate Governance which formspart of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Bank has established CorporateSocial Responsibility (CSR') Committee and statutory disclosures with respect to theCSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure1. The CSR Policy as recommended by the CSR Committee and as approved by Board isavailable on the website of the Bank at https://www.yesbank.in/pdf/ybl_corporate_socialfiresponsibility_policy
PERFORMANCE EVALUATION OF THE BOARD
Your Bank has laid down criteria for performance evaluation of the Directors includingChairman and MD & CEO Board Level Committees and Board as a whole as well as theevaluation process for the same in line with the provisions of the Companies Act 2013Listing Regulations and SEBI Guidance Note on the Board Evaluation dated January 05 2017.
The performance evaluation of the members of the Board the Board Level Committees andBoard as a whole was carried out on April 25 and 26 2018. Additional information on theBoard Evaluation Process forms part of the Report on Corporate Governance.
Corporate governance is an ethically driven business process that is committed tovalues aimed at enhancing an organization's brand and reputation. This is ensured bytaking ethical business decisions and conducting business with a firm commitment tovalues while meeting stakeholders' expectations. Further Corporate governance is basedon the principles of conducting the business with all integrity fairness and beingtransparent with all the transactions making the necessary disclosures and decisionscomplying with the laws of the land accountability and responsibility towards thestakeholders and commitment of conducting the business in an ethical manner. Your Boardfunctions as trustees of the shareholders and seeks to ensure that the long-term economicvalue for its shareholders is achieved while balancing the interest of all thestakeholders. Your Bank is committed to achieve the highest standards of CorporateGovernance and also adheres to the Corporate Governance requirements set by theRegulators/ applicable laws. In line with the foregoing your Bank has adopted a Code ofCorporate Governance which acts as a guide to the Bank and the Board on the best practicesin the Corporate Governance.
A separate section on Corporate Governance standards followed by your Bank and therelevant disclosures as stipulated under Listing Regulations Companies Act 2013 andrules made thereunder forms part of this Annual Report.
A Certificate from M/s. Mehta & Mehta Practicing Company Secretaries conformingcompliance by the Bank to the conditions of Corporate Governance as stipulated underListing Regulations is annexed to the Report on Corporate Governance which forms part ofthis Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report for the year under review as stipulatedin Listing Regulations is presented in a separate section forming part of this AnnualReport.
In line with the provisions of Listing Regulations the Companies Act 2013 and theprinciples of good governance the Bank has devised and implemented a vigil mechanism inthe form of Whistle Blower Policy'. The policy devised is also aligned to therecommendations of Protected Disclosure Scheme for Private Sector and Foreign Banksinstituted by Reserve Bank of India. Detailed information on the Vigil Mechanism of theBank is provided in the Report on the Corporate Governance which forms part of this AnnualReport.
RISK MANAGEMENT FRAMEWORK
The Bank's Enterprise Risk Management framework encompasses the following:
Risk Governance Framework: The Bank has implemented an Enterprise Risk Governanceframework to ensure non-silo based management and oversight of Risk. The Bank's RiskManagement philosophy is guided by the Three Lines of Defence Principle First Line ofDefence Business Management: Each business segment of the Bank has riskownership and is responsible for assessment and management of risks and has the overallresponsibility of the management and mitigation of the Risk. The segments are required toimplement appropriate procedures to fulfil their risk governance responsibilities.
Second Line of Defence Independent functions: The Bank's independentoversight functions such as Risk Management Compliance Legal Fraud Containment Unitetc. set standards for management and oversight of risks including compliance withapplicable laws regulatory requirements and policies. Risk Management: Risk Managementestablishes policies and guidelines for risk assessment and management and contributes tocontrols and tools to manage measure and mitigate risks faced by the Bank.
Compliance: The Compliance vertical manages adherence to applicable laws and regulatoryguidelines.
Legal: The Legal Risk Management division of the Bank undertakes various activitiesincluding advising business and operational management acting as an independent controlfunction while facilitating business ensuring legal compliance assisting the Board andCommittees of the Board regarding analysis of laws and regulations regulatory mattersdisclosure matters and potential risks and exposures on key litigation and transactionalmatters.
Finance: The Finance vertical provides key data and consultation to facilitate sounddecisions in support of the objectives of the Bank and the business verticals. Financeserves as an independent control function advising business management and establishingpolicies or processes to manage risk. It has overall responsibility for managing theBank's balance sheet and the Bank's liquidity and interest rate risk.
FCU & AML: The Fraud Containment Unit is responsible for prevention and detectionof internal and external frauds in the areas of Liabilities Product and Supportfunctions. The unit conducts transaction monitoring forensic scrutiny employee awarenesstrainings and vulnerability assessments to help achieve the said objective. The Anti MoneyLaundering Unit is responsible for identifying and reporting of suspicious transactions asprescribed under PMLA Act/ Regulators across all Business segments of the Bank. The AMLunit is equipped with qualified trained and experienced staff which monitors varioustransactions undertaken by customers with a view to combat financial crimes and preventsmisuse of the accounts for money laundering. Third Line of Defence InternalAudit: The Bank's Internal Audit function independently reviews activities of the firsttwo lines of defence based on a risk-based audit plan and methodology approved by theAudit Committee of the Board. Internal Audit provides independent assurance to the Boardthe Audit Committee senior management and regulators regarding the effectiveness of theBank's governance and controls designed for risk mitigation framework.
The Board of Directors of the Bank has overall responsibility of Risk Management. TheBoard oversees the Bank's Risk and related control environment reviews and approves thepolicies designed as a part of overseeing the Risk Management practices. The Board ensuresthat comprehensive policies systems and controls are in place to identify monitor andmanage material risks at a Bank-wide level with clearly defined risk limits. The Boardhas laid down a Risk Appetite framework which articulates the quantum of risk the Bank iswilling and able to assume in its exposures and business activities in pursuit of itsstrategic objectives and desired returns. The Board has also established policiesgoverning risk management such as Enterprise Risk Management Policy Reputation RiskManagement Policy Group Risk Management Policy Credit Policy ALM Policy Model Risk& Governance Policy etc.
The Board has put in place five Board level committees which inter-alia pertainto Risk Management viz. Risk Monitoring Committee (RMC) Audit Committee (ACB) FraudMonitoring Committee (FMC) Board Committee on Wilful Defaulters & Non-CooperativeBorrowers (BCWD&NCB) and Board Credit Committee (BCC) to deal with risk managementpractices policies procedures and to have adequate oversight on the risks faced by theBank.
The Board Committees have set up various Executive level Committees for oversight overspecific risks.
1. Management Credit Committee
2. Executive Credit Committee
3. Retail and Business Banking Credit Committee
4. Model Assessment Committee
5. Asset & Liability Management Committee
6. Investment & Financial Markets Management Committee
7. Operational Risk Management Committee
8. Outsourcing Management Committee
9. Business Continuity Management Committee 10. Security Council 11. Product ProcessApproval Committee 12. Fraud & Suspicious Transaction Monitoring Committee 13. WhistleBlower Committee 14. Enterprise Risk Management & Capital Management Committee 15.Strategy Management Committee 16. Reputation Risk Management Committee 17. StandingCommittee on Customer Service 18. IT Steering Committee 19. Steering Committee for IFRS(Ind AS) 20. RBS Reporting Oversight Committee 21. Apex Management Committee 22.Staff Accountability Committee
Risk events potential threats performance of the Bank vis--vis Risk Limits and RiskAppetite Risk Profile dashboard covering key risk indicators etc. are presented to theseCommittees with QoQ/YoY trends highlighted with level and direction of risk. The Bankalso conducts a detailed Internal Capital Adequacy Assessment Policy (ICAAP') reviewexercise to identify its Risk universe internal controls and mitigation measures in placefor the risks and capital requirements for identified risks. The ICAAP findings arepresented to the RMC and the Board.
The Risk Management Unit is headed by the Chief Risk Officer (CRO') who leads theCredit Risk (Underwriting) Unit General Legal Counsel and other Risk Units. The CROreports to the MD&CEO. The CRO is responsible to ensure an effective implementation ofan enterprise wide risk management framework through various risk policies processeslimits and controls that enable prompt risk identification accurate risk measurement andeffective risk mitigation. CRO is also responsible for risk compliance and monitoring aswell as reviewing and presenting various risk reports policies and dashboards to RMC andBoard.
The Risk Management Unit in the Bank is designed to establish an effective EnterpriseRisk Management (ERM) framework for the Bank to ensure sustainable business growth withstability and to promote a proactive approach in identification assessment managementand reporting of risks associated with business. The Risk Management Unit enables the Bankto successfully meet its business and financial goals while maintaining effective Boardand management oversight on Risk and Control parameters.
Risk Appetite: The Bank's Risk Appetite statement details the level of aggregaterisk that the Bank is willing to undertake and successfully manage in pursuit of itsbusiness goals.
Risk Management: The Bank follows a standardized methodology of identification andassessment of material risks implementation of internal controls and mitigation measuresongoing quality reporting and monitoring of risks.
Capital Management and Risk-based Capital Allocation and Performance Measurement:The Bank ensures deployment of capital within the organization based on risk toleranceeconomic constraints stakeholder needs and ensuring risk-based capital allocation andperformance measurement.
LOANS GUARANTEES OR INVESTMENTS IN SECURITIES
Pursuant to Section 186(11) of the Companies Act 2013 loans made guarantees given orsecurities provided or acquisition of securities by a Banking company in the ordinarycourse of its business are exempted from disclosure requirements under Section 134(3) (g)of the Companies Act 2013.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There were no materially significant transactions with related parties includingpromoters directors key managerial personnel subsidiaries or relatives of the Directorsduring the financial year which could lead to a potential conflict with the interestbetween the Bank and these parties. The details of the transactions with related partiesif any were placed before the Audit Committee from time to time. There were no materialindividual transactions with related parties which were not in the ordinary course ofbusiness of the Bank nor were there any transactions with related parties which were noton arm's length basis. Accordingly AOC-2 is not applicable to the Bank. Suitabledisclosure as required by the Accounting Standards (AS18) has been made in the notes tothe Financial Statements.
Prior omnibus approval for normal banking transactions is also obtained from the AuditCommittee for the related party transactions which are of repetitive nature as well as forthe normal banking transactions which cannot be foreseen and accordingly the requireddisclosures are made to the Committee for their approval.
The policy on materiality of Related Party Transactions and also on dealing withRelated Party Transactions as approved by the Audit Committee and the Board of Directorsis uploaded on the website of the Bank and the link for the same ishttps://www.yesbank.in/about-us/ corporate-governance
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act 2013 a Consolidated FinancialStatement of the Bank along with its subsidiaries i.e. YES Securities (India) Limited YESAsset Management (India) Limited and YES Trustee Limited has been prepared in the sameform and manner as that of the Bank which shall be laid before the ensuing AGM along withthe laying of the Bank's Financial Statement under Section 129(2) i.e. StandaloneFinancial Statement of the Bank.
Further pursuant to the provisions of Accounting Standard (AS') 21 ConsolidatedFinancial Statements notified under Section 133 of the Companies Act 2013 read togetherwith Rule 7 of the Companies (Accounts) Rules 2014 issued by the Ministry of CorporateAffairs the Consolidated Financial Statements of the Bank along with its subsidiaries forthe year ended March 31 2018 forms part of this Annual Report.
INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY
Your Bank has implemented adequate procedures and internal controls which providereasonable assurance regarding reliability of financial reporting and preparation offinancial statements. The Bank also ensures that internal controls are operatingeffectively.
DIVERGENCE IN ASSET
CLASSIFICATION AND PROVISIONING FOR NPAs
As part of the Risk Based Supervision (RBS) exercise for FY 2016-17 concluded inOctober 2017 the RBI has pointed out certain retrospective divergence in the Bank's assetclassification and provisioning as on March 31 2017. In conformity with the RBIcirculars DBR. BP.BC.NO.63/21.04.018/2016-17 issued on April 18 2017 SEBI circularissued on July 18 2017 and as per the approval from the Board of Directors at its Meetingheld on October 26 2017 the detailed table outlining divergences in asset classificationand provisioning is provided in the schedule 18 note number 184.108.40.206 - Significantaccounting policies and notes forming part of the accounts for the year ended March 312018.
_A_ STATUTORY AUDITORS AND THEIR REPORT
The Members of the Bank at the 12th Annual General Meeting held on June 07 2016 haveapproved the appointment of M/s. B S R & Co. LLP Chartered Accountants as StatutoryAuditors of the Bank for a period of 4 years subject to the approval of the Reserve Bankof India to hold office from the conclusion of the 12th AGM till the conclusion of 16thAGM of the Bank to be held in 2020 subject to ratification of their appointment by theMembers at every AGM. Accordingly appointment of M/s. B S R & Co. LLP CharteredAccountants as a Statutory Auditors of the Bank is required to be ratified by the Membersat ensuing AGM of the Bank subject to the annual approval of the Reserve Bank of India.The Bank has received the consent from the Auditors and confirmation to the effect thatthey are not disqualified to be appointed as the Auditors of the Bank in terms of theprovisions of the Companies Act 2013 and rules made thereunder. Accordingly the Board ofDirectors has recommended the ratification of appointment of M/s. B S R & Co. LLPChartered Accountants as the Statutory Auditors of the Bank to hold office from theconclusion of the ensuing AGM till the conclusion of the 15th AGM to the Members fortheir approval.
The Report given by the Auditors on the financial statements of the Bank forms part ofthis Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report. Also no o_ence of fraud was reported bythe Auditors of the Bank.
_B_ SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT
Pursuant to Section 204 of the Companies Act 2013 your Bank had appointed M/s. BNP& Associates Practicing Company Secretaries Mumbai as its Secretarial Auditors toconduct the secretarial audit of the Bank for the FY 2017-18. The Bank provided allassistance and facilities to the Secretarial Auditors for conducting their audit. TheReport of Secretarial
Auditors for FY 2017-18 is annexed to this report as Annexure 2. There are noobservations reservations or adverse remarks in the Secretarial Audit Report.
BUSINESS RESPONSIBILITY REPORT
As stipulated in Listing Regulations the Business Responsibility Report describing theinitiatives undertaken by the Bank from environmental social and governance perspectiveis attached and forms part of this Annual Report.
MATERIAL CHANGES AND COMMITMENT AFFECTING
FINANCIAL POSITION OF THE BANK
There are no material changes and commitments affecting the financial position of theBank which has occurred between the end of the financial year of the Bank i.e. March 312018 and the date of the Directors' Report i.e. April 26 2018.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
During the year under review no significant and material orders were passed by theregulators or courts or tribunals impacting the going concern status and Bank's operationin future.
POLICY ON APPOINTMENT OF DIRECTORS
The Board of Directors of the Bank had formulated and adopted policy on BoardDiversity and Fit & Proper Criteria and Succession Planning' for appointment ofDirectors on the Board of the Bank and succession planning. The details of the same havebeen included in the Report on Corporate Governance forming part of this Annual Report.
The Board of Directors of the Bank had formulated and adopted policies for Remunerationof Employees of the Bank Remuneration of Directors including the Chairman of the Bank.The details of the same have been included in the Report on Corporate Governance formingpart of this Annual Report.
(a) The statement containing particulars of employees as required under Section 197(12)of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this report. In terms ofSection 136 of the Companies Act 2013 the same is open for inspection during workinghours at the Registered Office of your Bank. A copy of this statement may be obtained bythe members by writing to the Company Secretary of your Bank.
(b) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Bank and other details in terms of Section 197(12) of the Companies Act2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this report as Annexure 3.
EXTRACTS OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 theextracts of the Annual Return as at March 31 2018 forms part of this report asAnnexure 4.
DISCLOSURES UNDER GREEN INFRASTRUCTURE BONDS
Since the first issuance by Your Bank in February 2015 green bond issuances in Indiaare witnessing a steady growth making India one of the top ten largest green bond marketsglobally. These instruments are playing a pivotal role in the realization of India'srenewable energy potential and towards achieving its globally committed target of 175 GWof renewable capacity by 2022. Your Bank has issued three green bonds: February 2015:Your Bank issued India's first-ever Green Infrastructure Bonds raising an amount of Rs.1000 crore. This 10 year tenor bond witnessed strong demand from leading investorsincluding Insurance companies Pension & Provident Funds Foreign Portfolio InvestorsNew Pension Schemes and Mutual Funds.
August 2015: Your Bank raised Rs. 315 crore through the issue of GreenInfrastructure Bonds to International Finance Corporation on a private placement basiswhich is the first investment by IFC in an Emerging Markets Green Bond issue in the world.The bonds are for a tenor of 10 years. IFC paid for the placement using the proceeds fromthe first Green Masala Bond program that aimed at raising capital in the o_shore rupeemarket.
December 2016: Your Bank has raised Rs. 330 crore through an issue of a 7-yearGreen Infrastructure Bonds to FMO the Dutch Development Bank on a private placementbasis. This is FMO's first Investment in a Green Bond issued by a bank in India. FMO haspaid for placement using the proceeds from their sustainability bonds issued in 2015.
The amount raised is used to finance green infrastructure projects as perEligible Projects' outlined in the Bank's internal guidelines that were put in placein adherence to Green Bond Principles by international capital market association. KPMGIndia has provided assurance on the internal tracking method and the allocation of fundsof green bonds for FY 2017-18.
GREEN BOND PRINCIPLES _GBP_
The Green Bond Principles are voluntary process guidelines intended for broad use bythe market that recommend transparency and disclosure and promote integrity in thedevelopment of the Green Bond market. The GBP has the following four key components thatyour Bank has adopted: Use of Proceeds: The proceeds raised are used in eligibleproject categories and include all projects funded in whole or in part in the fields ofrenewable and clean energy projects including Wind Solar Biomass Hydropower and othersuch projects. Process for Evaluation and Selection of Eligible Projects: Theprocess includes interactions with potential borrowers to understand the overall aspectsof the project and a preliminary comparison against the eligibility criteria. Postpreliminary consideration based on the merits of the project the evaluation moves to therisk team which assesses it and confirms the eligibility of the project. Furtherdocumentation is sought as per the Bank's policies and GBP.
Management of Proceeds: Green Bond allocations to eligible projects are trackedthrough an MIS based asset tagging system on a quarterly basis. The unallocated proceedsif any are placed in liquid instruments (Government Securities) on a quarterly basis.
Reporting: Communication to investors through an annual update includes: List ofprojects to which Green Bond proceeds have been allocated to with brief descriptionincluding amounts disbursed and installed capacity Summary of Environmental and Social(E&S) impacts associated with these projects if any Information on investment ofunallocated proceeds in liquid instruments
The proceeds of the green bonds have been utilized in augmenting solar and wind energycapacities with a
significant impact of avoidance of emissions of CO2 SO2
and NOx apart from other air pollutants associated with energy generation. Estimatedemission reductions
are shared along with project details. Through financing solar and wind power plantsthese bonds contribute to a positive environmental impact and also strengthen India'senergy security by reducing fossil fuel dependency.
List of projects against which green bonds proceeds have been allocated as on March 312018 is provided below:
Proceeds Utilization Against Bond Issuance Size of Rs. 1000 crore (February2015)
|Sr. No. ||Project Location ||Description ||Total Fund Based Utilization Rs. crore (as on March 31 2018) ||Estimated** positive E&S impacts - CO2 Emissions Reduction / yr) (tCO2 ||Known significant negative E&S Impacts |
|1 ||Madhya Pradesh ||12 MW wind energy project ||42.74 ||21410.66 ||None |
|2 ||Telangana ||15 MW solar energy project ||9.66 ||26953.59 ||None |
|3 ||Telangana ||15 MW solar energy project ||9.66 ||26953.59 ||None |
|4 ||Andhra Pradesh ||10 MW solar energy project ||1.24 ||17241.84 ||None |
|5 ||Maharashtra ||31.5 MW wind energy project ||130.54 ||66324.86 ||None |
|6 ||Karnataka ||50 MW solar energy project ||20.70 ||94073.31 ||None |
|7 ||Telangana ||143 MW solar energy project ||142.48 ||249460.44 ||None |
|8 ||Telangana ||42 MW solar energy project ||84.79 ||83070.33 ||None |
|9 ||Andhra Pradesh & ||155.4 MW wind energy project ||239.70 ||357426.16 ||None |
| ||Rajasthan || || || || |
|10 ||Karnataka ||40 MW solar energy project ||115.00 ||86555.90 ||None |
|11 ||Madhya Pradesh ||250 MW solar energy project ||1.00 ||492140.83 ||None |
|12 ||Karnataka ||46.2 MW wind energy project ||2.91 ||111340.52 ||None |
|13 ||Karnataka ||40 MW solar energy project ||23.00 ||64265.81 ||None |
| || || ||823.42* ||1697217.84 || |
Proceeds Utilization Against Bond Issuance Size of Rs. 315 crore (August 2015)
|Sr. No. ||Project Location ||Description ||Total Fund Based Utilization Rs. crore (as on March 31 2018) ||Estimated** positive E&S impacts - CO2 Emissions Reduction / yr) (tCO2 ||Known significant negative E&S Impacts |
|1 ||Andhra Pradesh ||100 MW wind energy project ||214.62 ||226621.55 ||None |
|2 ||Telangana ||30 MW solar energy project ||1.85 ||59335.95 ||None |
|3 ||Telangana ||5 MW solar energy project ||6.53 ||7610.43 ||None |
| || || ||223.00* ||293567.93 || |
Proceeds Utilization Against Bond Issuance Size of Rs. 330 crore (December 2016)
|Sr. No. ||Project Location ||Description ||Total Fund Based Utilization Rs. crore (as on March 31 2018) ||Estimated** positive E&S impacts - CO2 Emissions Reduction / yr) (tCO2 ||Known significant negative E&S Impacts |
|1 ||Telangana ||20 MW solar project ||100.13 ||42719.85 ||None |
|2 ||Gujarat ||30 MW wind energy project ||142.00 ||69001.19 ||None |
|3 ||Telangana ||50 MW solar energy project ||9.14 ||86420.61 ||None |
|4 ||Telangana ||10 MW solar energy project ||50.27 ||21359.93 ||None |
|5 ||Rajasthan ||50 MW solar energy project ||15.45 ||98893.25 ||None |
|6 ||Telangana ||10 MW solar energy project ||13.01 ||21359.93 ||None |
| || || ||330.00 ||339754.76 || |
| || ||/ yr) || ||2330540.53 || |
|Total CO2 Emissions Reduction (tCO2 || || || |
* The shortfall (of Rs. 176.58 crore and Rs. 92 crore in allocation ofproceeds of Rs. 1000 crore bond issued in February 2015 and Rs. 315 crorebond issued in August 2015 respectively) is due to the repayment of disbursement. Thetemporary unallocated proceeds have been invested in Government Securities and will beallocated back to new eligible projects.
**The total emission reduction for individual projects have been calculated based onmethodology outlined in the document
Baseline Database for the Indian Power Sector User Guide Version 12.0 May 2017' alongwith other relevant factors such as project PLF/ CUF estimates installed projectcapacity resultant annual unit generation etc.
The disclosures required to be made under Section 134(3) (m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 on the conservation of energytechnology absorption and Foreign exchange earnings and outgo are given as under:
_A_ CONSERVATION OF ENERGY
Environmental stewardship in the financial sector
ISO 14001:2015 Environmental Management System (EMS) certification for the Bankembarked on the 5th year
Your Bank since inception has embedded concept of Natural Capital as one of its corevalues. The Bank has one of the largest Renewable Energy lending portfolios among privatesector banks and is the first Indian bank to be ISO 14001 certified for EnvironmentalManagement System and was the first Bank globally to migrate to the latest ISO 14001:2015version of the standard in 2017 is the first Indian signatory to the Natural CapitalFinance Alliance is recognized as a Climate Disclosure Leader and drives environmentalsustainability initiatives as its CSR focus.
In line with its commitment to achieve internal natural resource consumptionefficiencies and minimizing its carbon footprint your Bank completed phase V of thecertification in the reporting period and has 744 locations including 688 metro-urbanbranches 50 rural branches 4 corporate offices and YES Securities certified as per ISO14001:2015 standard the highest number for certified facilities for any BFSI organizationin India.
The Bank's Environmental Management Policy revised in 2016 outlines the Bank'scommitment to achieve a 10% reduction in its carbon emissions intensity annually throughorganization-wide environment management initiatives and employee engagement. Withdigitization as a key focus area your Bank's environment management policy highlightsstronger commitment to environment protection and commitment to source renewable energyfor greening the Bank's operation with strategic objectives to Improve key resourceefficiency such as usage of electricity fossil fuel paper and water with Digitizationof processes Conserve natural resources by adopting the 3-R' (reduce reuseand recycle) approach towards prevention of pollution and disposal of waste especiallyelectronic waste in line with regulatory requirements or industry best practices
Explore renewable energy sourcing for greening the Bank's operations and adopt greenbuilding principles Set monitor and review the overall Environmental Management System(EMS) objectives and targets on an ongoing basis towards achieving continuous improvementin environmental performance on digital platform Resustain' Promote greenprocurement' to influence strategic suppliers sustainable sourcing of product and servicesIntegrate energy and environmental considerations in the design of new infrastructuralfacilities
Your Bank has undertaken environmental mitigation initiatives by aggressive awarenesscreation around electricity paper water and diesel conservation in day-to-day activitiesthrough Bank-wide circulation of resource conservation mailers signage and posters.Periodical trainings on Environmental Management System through comprehensive e-learningmodule workshops and involvement of employees in idea generation and implementation isensured.
I. THE STEPS TAKEN OR IMPACT ON CONSERVATION OF ENERGY
The Bank has been migrating to LED lighting in phases. As on March 31 2018 4403 LEDlights have been installed at 66 new branch locations and 2 corporate locations with aninvestment of Rs. 51.22 lakh with a potential saving of 319217.5 kwh of energyconsumption and Rs. 31.8 lakh in monetary savings annually Similarly power factors atbranches are being monitored above 0.9 with the help of capacitor bank and monitoringpanels are installed and reduce risk of penalty levied by DISCOMs The Bank is in theprocess of phasing out air-conditioning systems that use ozone depleting coolants and inthe current reporting cycle the Bank initiated replacement of all air conditioners thatare more than 10 years old with systems that use eco-friendly coolants The airconditioning replacement model has been developed with a criteria for replacing old modelswith an energy consumption of 1.6 1.8 times of peak load and temperature controlwith dedicated AHU units for centralized AC systems Retrofit solutions for HVAC systemswhich have a potential saving of 10% to 15% would be incorporating in a phased manner overa 2 year period. Maintaining AC temperature above
250 Celsius at all times has helped the Bank to achieve 3% saving of hourly kwhconsumptions 100% of YES BANK branches are issued Petro cards for procurement of dieselwhich has resulted into enhanced transparency reduced wastages and cost saving of 2% overlast financial year YES BANK's energy management initiatives aim at reducing 15-20% energyconsumption by 2020 from sustainable facility management
II. THE STEPS TAKEN BY THE BANK FOR UTILIZING ALTERNATE SOURCES OF ENERGY
Your Bank has explored the potential of using alternate sources of energy through openaccess and your Bank would continue to explore alternative sources of energy in future.
III. THE CAPITAL INVESTMENT ON ENERGY CONSERVATION EQUIPMENTS
Rs. 3.45 crore upto present financial year (AC retrofitting LED Tube lights andsignages project at corporate offices and branch locations)
_B_ TECHNOLOGY ABSORPTION
(I) THE EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION
Information Technology (IT) is a critical enabler of business transformation and growthand needs to play a fundamentally distinctive role as it partners with the business.IT-enabled businesses enrich products and innovation and foster customer-led growth. As anew generation Bank your Bank has deployed Technology' as a Strategic Businessenabler to build a distinct competitive advantage and to achieve superior standardsof Customer Service.
Your Bank has recognized this and has committed to investing in Technology adopting anA-R-T (Alliances Relationships and Technology) approach where-in the Bank has identifiedthe need of the current times and pain points of the customers concluding on these as aset of opportunities without compromising on security to ensure that the customers carryout their banking needs and services with ease.
The vision of the Business & Digital Technology Solutions Group (BDTS) at your Bankremains the same To make life simpler for our customers and colleagues'. Working onits strategy which is broken into two parts i.e. Run the Bank' to continue work onInitiatives which are needed to keep the banks operations running effectively andBuild The Bank' BDTS keeps a laser-sharp focus on transformation initiatives to meetthe Vision of the Group and your Bank. During the current FY many new initiatives werecompleted successfully as well as systems were upgraded to latest versions to support thegrowing needs of your Bank. Few of the key projects which were Bank-wide during the yearare listed below: YES asap! Mobile App Chatbot ROBOTICS CoE including RoboticsProcess Automations (RPA) PI-CONTROL Platform YES ROBOT AI Enabled BankingAssistant Debit Card and ATM System Upgrade YESFXOnline (Credence) Direct CustomerDealing (DCD) Module YES MSME Mobile App on iOS and Android platforms EnhancedWealth Management System (WMS) Samsung Pay' for YES BANK Credit Cards UnifiedCustomer Experience Portal (UCXP) Hadoop Analytical Campaign Application Hadoop Merchant Funded Discounts Sales Portfolio Management System GEM e-PBG Module(Government e-Marketplace) Newgen Platform Notiva Application Puratech channel financeCRIF Highmark Connect Tool for Retail Assets for CIBIL reporting RESUSTAIN (ADigital Platform for Environmental and CSR Reporting) New Application on ISB; Ganaseva forcatering to JLG
Y-COLORS (Yes Corporate Loan Originating System) Bharat Bill Payment System (CustomerOperating Unit) Kaizala implementation for YES BANK Employees (Enterprise Commutation)
For more details on Information Technology and its key initiatives please refer to theManagement Discussion and Analysis section of this Annual Report.
(II) THE BENEFITS DERIVED LIKE PRODUCT IMPROVEMENT COST REDUCTION PRODUCT DEVELOPMENTOR IMPORT SUBSTITUTION Technology has responded by being true strategicpartnerofBusiness.Manyfirstmoverimplementations have provided business long lastingadvantages and have also won many accolades and awards for the Bank. For instance firstIndustry initiative Merchant Funded O_er Program with key USPs like Analytical drivenpersonalized offers for customer basis their profile Real-time analytical tracking oftransactions and communication (SMS and Push Notification) to customers about the Cashbackeligibility Completely automated process right from tracking transactions to settlement.
Innovations like YES ROBOT Chatbot integration with YES PAY Mobile Wallet YES asap! Mobile App enabling account opening of Individual Savings Accounts (SA) RESUSTAIN;A Digital Platform for Environmental and CSR Reporting Samsung Pay' for YES BANKCredit Cards helps the products and sales teams to offer superior products and services.
Your Bank has evaluated and implemented cutting edge technologies like virtualizationcloud computing & social media and continues to invest in best-in-class IT systems andpractices and to ensure that its technology platform becomes a strategic business toolfor building a competitive advantage. Apart from product development product improvement& effective cost management technology has also played a major role in customeracquisition & ensuring high level of service delivery & customer excellence. YourBank has also been able to cater to Financial Inclusion needs through its award winningand globally recognized technology solution platform which offers doorstep bankingservices.
(III) IN CASE OF IMPORTED TECHNOLOGY (IMPORTED DURING THE LAST THREE YEARS RECKONEDFROM THE BEGINNING OF THE FINANCIAL YEAR)
|Details of Technology Imported ||Year of Import ||Whether the Technology been fully absorbed ||If not fully absorbed areas where absorption has not taken place and the reasons thereof |
|Software Tokens for Net Banking Implementation fees ||Aug-14 ||Yes ||NA |
|and delivery of Branded Software Tokens || || || |
|Enabling Radius licenses for 10000 concurrent users ||Sep-15 ||Yes ||NA |
|(SMS/Email OATH software tokens) on existing setup || || || |
|Master Data Management licenses ||Nov-15 ||Yes ||NA |
|Cisco WanStack for Branch WAN Architecture Revamp ||Dec-16 ||Yes ||NA |
|Up gradation of Murex 2.11 to Murex 3.1 ||Apr-17 ||Yes ||NA |
|Cisco CUCM ||Dec-17 ||Yes ||NA |
_C_ FOREIGN EXCHANGE EARNINGS AND OUTGO
The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows.
During the year ended March 31 2018 your Bank earned Rs. 10307.25 million and spentRs. 7865.59 million in foreign currency. This does not include foreign currency cashflows in derivatives and foreign currency exchange transactions.
NUMBER OF CASES FILED IF ANY AND THEIR DISPOSAL UNDER SECTION 22 OF THE SEXUALHARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013.
As a responsible organization your Bank strives to foster a safe and respectful workenvironment. The Bank has Zero tolerance towards any action on the part of any executivewhich may fall under the ambit of Sexual Harassment' at workplace and is fullycommitted to uphold and maintain the dignity of every women executive working in the Bank.The
Policy regarding Prevention & Prohibition of Sexual Harassment at Workplaceprovides for protection against sexual harassment of women at workplace and for preventionand redressal of complaints. Also in its endeavour to spread awareness on theaforementioned policy and ensure compliance by all the executives the Bank hasimplemented a plan of action to disseminate the information and train the executives onthe policy under the ambit of Gender Respect and Commitment to Equality' (GRACE)program.
|Particulars ||Numbers |
|Number of complaints pending as on the beginning of the financial year ||3 |
|Number of complaints filed during the financial year ||9 |
|Number of complaints pending as on the end of the financial year ||1 |
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 it ishereby confirmed that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; (b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Bank at the end of the financial year and of the profit ofthe Bank for that period; (c) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Bank and for preventing anddetecting fraud and other irregularities; (d) the directors had prepared the annualaccounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by the Bankand that such internal financial controls are adequate and were operating effectively; and(f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Your Directors take this opportunity to express their deep and sincere gratitude to thecustomers of the Bank for their confidence and patronage as well as to the Reserve Bankof India Securities and Exchange Board of India Government of India and otherRegulatory Authorities for their cooperation support and guidance. Your Directors wouldlike to express a deep sense of appreciation for the commitment shown by the employees insupporting the Bank in its continued robust performance on all fronts. The Bank has beenfollowing the A.R.T. Alliances Relationships and Technology led approach toBanking. Taking the approach further your Bank is embracing Future: Now' bybringing the future to the present through various process product & serviceinnovations thereby fast forwarding the Bank into the future. In line with thisphilosophy the Directors would also like to thank all our valued partners vendors andstakeholders who have played a significant role in the continued Business Excellenceachieved by the Bank. Your Directors would also like to thank the employees for theircontinued support as the Bank evolves as the Professionals' Bank of India' with avision of BUILDING THE FINEST QUALITY LARGE BANK OF THE WORLD IN INDIA'.
For and on behalf of the Board of Directors
|Rana Kapoor ||Ashok Chawla |
|Managing Director & CEO ||Non-Executive |
|(DIN No. 00320702) ||(Independent) Chairman |
| ||(DIN No. 00056133) |
|Place: Mumbai || |
|Date: April 26 2018 || |