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As on: Oct 18, 2019 09:00 AM
Yes Bank Ltd
Industry: Banks - Private Sector
BSE Code ISIN Demat Book Value(Rs) NSE Symbol Mar.Cap(Rs Cr.) P/E(TTM) EPS(TTM) Face Value(Rs)
532648 INE528G01027 113.0656989 YESBANK 12088.57 21.07 2.25 2

To the Members,

Your Directors are pleased to present the Fifteenth Annual Report on business and operations of the Bank together with the audited financial statements (consolidated as well as standalone) for the year ended March 31, 2019.

BUSINESS OVERVIEW AND OUTLOOK

The Bank showed continued acceleration and momentum in building a strong retail franchise with retail advances growing 62.3% Y-o-Y in Financial Year (FY) 2018-19 to now comprise 16.7% of total advances. Consequent to the Bank’s retail focus, the branch network stood at 1,120 branches and 1,456 ATMs (including Bunch Note Acceptors) as on March 31, 2019. Digitization remains a key focus area for the Bank to further grow the Retail/MSME segments as well as the Transaction Banking business. The Bank already dominates the new age payments space with the highest market share in UPI P2M transactions with ~8x growth in Volumes in FY 2018-19.

Superior structuring capabilities in the Corporate Segment remains an area of Strength and the Bank will continue to leverage this in a calibrated manner as it embarks upon a compliance led culture with a prudent accounting policy.

STATE OF THE AFFAIRS OF THE BANK

FY 2018-19 was a significant year in the Bank’s lifecycle when the Bank successfully navigated through leadership transition. The Reserve Bank of India (RBI) in September 2018, intimated that Mr. Rana Kapoor may remain the MD & CEO of the Bank till January 31, 2019. In addition, over the following months, there were changes in the Bank’s Directorate including the Chairman of the Bank.

In response to this, the Board of Directors rose to the challenge and successfully completed the process of appointment of a new MD & CEO within the stipulated time provided by the RBI. The Directors whole heartedly welcome Mr. Ravneet Singh Gill as the new MD & CEO who has joined the Bank on March 1, 2019. The Board express its full faith that he will take the Bank to newer heights in this environment which is filled with numerous challenges as well as opportunities.

Further, the Board of Directors have also strengthened itself through, appointment of Mr. Brahm Dutt as the Chairman of the Bank, and appointment of four new Board members who are doyens in their chosen field of expertise and have a rich experience in the Industry which can benefit the Bank: Mr. Uttam Prakash Agarwal (ex-President ICAI), Mr. Thai Salas Vijayan (Ex IRDAI & LIC Chairman), Mr. Maheswar Sahu (Ex Additional Chief Secretary, Govt. of Gujarat) and Mr. Anil Jaggia (Ex CIO, HDFC Bank).

Further, the Indian Partners viz. Mr. Rana Kapoor and Ms. Madhu Kapur, Ms. Shagun Kapur Gogia & Mr. Gaurav Kapur have inter-se agreed and jointly recommended the names of Mr. Ravindra Kumar Khanna and Ms. Shagun Kapur Gogia as their representative directors on the Board of the Bank. Accordingly, the Board of the Bank at its meeting held on April 26, 2019, approved the appointment of Mr. Ravinder Kumar Khanna and Ms. Shagun Kapur Gogia as Additional (Non-Executive Non-Independent) Indian Partners' Representative Directors, on the Board of the Bank w.e.f. April 26, 2019.

Most importantly, through this transition phase, the business of the Bank continued its momentum as evident from sustained growth in balance sheet with 18.7% Y-o-Y growth in advances during FY 2018-19 and 13.4% Y-o-Y growth in Deposits. Even Revenue and Profitability parameters showed resilience with 26.8% Y-o-Y growth in Net Interest Income and 5.0% Y-o-Y growth in Pre Provision Operating Profit.

Another important focus area during FY 2018-19 for the Bank was assuring the stakeholders regarding the Bank’s Asset Quality. Steps towards this include:

1. No disclosure requirements under the RBI regulations on disclosures of divergences in asset classification and provisioning, pursuant to the conclusion of its FY 2017-18 RBI Annual Supervisory Process.

2. The Bank has proactively created contingency Provision of about '21,000 million during the year, pursuant to a review of the Bank’s credit portfolio.

3. Providing proactive disclosures with respect to exposures to sensitive sectors and below investment grade assets as well as other details such as outstanding SMA 2 proportion to total advances.

YES BANK also successfully raised Non-Convertible, Redeemable, Unsecured, BASEL III compliant Tier II Bonds worth '30,420 million during Q2 FY 2018-19. At the time of issue, CARE had assigned a rating of ‘CARE AAA’ (Outlook: Stable) and India Ratings had assigned a rating of ‘IND AA+’ (Outlook: Stable). Currently, CARE has assigned a rating of ‘CARE AA+’ (Outlook: Credit watch with developing implications) w.e.f. November 28, 2018 and India Ratings has assigned a rating of ‘IND AA+’ (Outlook: Negative) w.e.f. November 2, 2018.

On February 18, 2019, the Bank successfully completed the repurchase of the Medium-Term Note (MTN) Program amounting to USD 122,854,000 out of USD 150 million at a fixed price of 94.25% of the Face Value of the Notes. The MTN is listed on the London Stock Exchange International Securities Market (LSE ISM), the Singapore Exchange Securities Trading Limited (SGX) and the India International Exchange IFSC at GIFT City, Gandhinagar.

Further information on the Business overview and outlook and State of the affairs of the Bank is discussed in detail in the Management Discussion & Analysis section of the Annual Report.

There is no change in the nature of business of the Bank for the year under review.

FINANCIAL PERFORMANCE (STANDALONE)

' in million
Particulars April 1, 2018 to March 31, 2019 April 1, 2017 to March 31, 2018
Deposits 2,276,101.82 2,007,381.48
Borrowings 1,084,241.09 748,935.81
Advances 2,414,996.02 2,035,338.63
Total Assets/Liabilities 3,808,261.65 3,124,456.03
Net Interest Income 98,090.31 77,370.59
Non-Interest Income 45,901.53 52,238.34
Operating profit 81,349.07 77,481.13
Provisions and Contingencies 57,775.60 15,538.04
Profit before Tax 23,573.47 61,943.09
Provision for taxes 6,370.68 19,697.46
Net Profit 17,202.79 42,245.64
Add: Surplus/(Deficit) brought forward from last period 103,753.02 79,333.92
Amount available for appropriation 120,955.80 121,579.55
Appropriations
Statutory Reserve under Section 17 of the Banking Regulation Act, 1949 4,300.70 10,561.41
Capital Reserve 1,010.10 659.65
Investment Reserve 6.71 -
Investment Fluctuation Reserve 539.07 -
Dividend and Dividend Tax paid 7,503.64 6,605.48
Surplus carried to Balance Sheet 107,595.60 103,753.02
Key Performance Indicators
Net Interest Margin 3.20% 3.50%
Return on Annual Average Assets 0.50% 1.60%
Return on Equity 6.53% 17.67%
Cost to Income Ratio 43.50% 40.22%

The Bank posted Net Revenues (Net Interest Income and other income) of '143,991.84 million and Net Profit of '17,202.79 million for FY 2018-19. The Net Revenues and Net Profit for FY 2017-18 was '129,608.93 million and '42,245.63 million respectively. Appropriations from the Net Profit have been effected as per the table given above. Please refer to the section on Financial and Operating Performance in the Management Discussion and Analysis for a detailed analysis of financial data.

DIVIDEND

The Bank is rewarding its shareholders by way of consecutive cash dividends. The Board of Directors have recommended Dividend at a rate of '2 per equity share (100%) for the year ended March 31, 2019 subject to approval of the Shareholders at the 15th Annual General Meeting as against '2.70 per equity share (135%) of '2 each for the previous year ended March 31, 2018. This dividend shall be subject to tax on dividend to be paid by the Bank. The details about the Dividend Policy of the Bank have been provided in the Report on Corporate Governance forming part of this Annual Report.

TRANSFER TO RESERVES

As per requirement of RBI Regulations, the Bank has transferred the following amounts to various reserves during Financial Year ended March 31, 2019:

' in million
Amount transferred to Amount
Statutory Reserve 4,300.70
Capital Reserve 1,010.10
Investment Reserve 6.71
Investment Fluctuation Reserve 539.07

CAPITAL RAISING & CAPITAL ADEQUACY RATIO (CAR)

During the FY 2018-19, the Bank has issued 12,065,794 equity shares of '2 each pursuant to the exercise of stock options aggregating to '24.13 million.

Post allotment of aforesaid equity shares, the issued, subscribed and paid up share capital of the Bank stands at '4,630.07 million comprising of 2,315,033,039 equity shares of '2 each as on March 31, 2019.

The Bank has not issued any equity shares with differential voting rights during the year.

During the year, the Bank has raised Non-convertible Redeemable Unsecured Basel III compliant Tier II Bonds of '30,420 million.

The Bank is well capitalized with a Capital Adequacy Ratio of 16.5% as at March 31, 2019; of which Tier I Capital Ratio was 11.3% and Tier II Capital Ratio was 5.2%.

DEPOSITS

Being a banking company, the disclosures required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74 of the Companies Act, 2013 are not applicable to the Bank.

AWARDS AND RECOGNITIONS

During the year under review, the Bank was recognized in various ways/by various institutions and some of the key awards presented to the Bank are listed below:

• YES BANK won the ‘Product Innovation of the Year’ Award among 100+ financial services companies at International Finance Corporation’s (IFC Washington’s) Global SME Finance Awards.

• YES BANK became first Indian Bank to join ‘Natural Capital Coalition’ - a global multi-stakeholder collaboration, wherein the bank will integrate natural capital thinking into its strategy & operations.

• YES BANK was honored at the 20th edition of the coveted global award, The Asset Triple A Country Awards 2018 with ‘Best New Bond India’ for launching the largest debut international bond issuance, priced at the tightest spread over US treasuries by an Indian bank since 2008.

• YES BANK won the coveted ‘Golden Peacock Award For Sustainability’ - 2018.

• YES BANK was honored with the runner-up award at the 30th Qualtech Qimpro Award in the Continuous Improvement category, winning in the Qualtech Qimpro Awards for the third year in a row.

• YES BANK was felicitated by Business France and Indo-French Chamber of Commerce and Industry for ‘Promoting & Facilitating Indo-French Bilateral Relations’.

• YES BANK won the SKOCH Editor’s Choice Award for ‘YES Rewardz’ Loyalty Program at the 55th SKOCH Summit.

• YES BANK was adjudged Global winner in Payments at the ‘Technology Project Awards-2018’, a prestigious award recognizing innovation in financial technology instituted by The Banker, a London-based leading global financial publication promoted by The Financial Times (FT).

• YES BANK has the highest number of its facilities under environment management system ISO 14001:2015 certification ambit in the BFSI Sector, leading the BFSI sector globally with the highest number of ISO 14001 certified green facilities. This extraordinary global achievement by an Indian bank comes on the back of YES BANK’s unmatched commitment to environmental sustainability.

• YES BANK became the only Indian bank to be selected in the Dow Jones Sustainability Indices (DJSI) Emerging Markets for the fourth year in a row (2015-2018) o ~3,500 companies invited. The Bank was selected among 50 banks (from 267 banks) out of the 13 invited Indian banks, The Bank is the only Indian Bank to make it to the index of 93 companies from 14 countries included in the DJSI Emerging Markets Index (EMI). The 2018 Index became effective as of September 24, 2018.

• YES BANK was adjudged winner for outstanding performance in Instant Payment Products (UPI + IMPS + BHIM + USSD), at the National Payments Excellence Awards (NPCI) 2017 hosted by National Payments Corporation of India (NPCI) in May 2018.

• YES BANK was selected in FTSE4Good Emerging Index, for the second consecutive year. FTSE Russell benchmarks ~USD 12.5 trillion in assets across 80 countries and 98% of the investable global market. YES BANK received an ESG Rating which is above the required index inclusion threshold for emerging economies (2.2) and developed markets (3.5) reiterating YBL’s ESG leadership with its global peers. The Bank was selected among 87 banks from emerging markets including Itau Unibanco Holdings, Brazil & SBERBANK, Russia.

• YES BANK was recognized with three Gold Awards at the India Content Leadership Award- 2018 for compelling Marketing & Corporate Communication initiatives for its flagship Fintech start-up Business Innovation Program, YES FINTECH and for successfully running CFO Insights, a magazine read widely by Chief Financial Officers (CFOs).

• YES BANK was recognized with the ‘Best Implementation of Digital Payments’ award at the 4th edition of prestigious BW Businessworld Digital India Summit & Awards 2018.

• YES BANK was adjudged as the ‘Best Bank in India’ for Payments, Blockchain Initiative, API Initiative, Financial Supply chain Management Deal, Trade Finance Deal, Automation Application and Trade Finance at The Asian Banker Transaction Banking Awards 2018.

• YES BANK recognized with the Best Technology Bank of the Year, Best use of Data & Analytics for Business Outcome and the Most Customer-Centric Bank using Technology Awards in the Medium Size Banks category at the Indian Banks’ Association (IBA) Banking Technology Innovation Awards.

• YES BANK applauded as Winner in ‘Innovation in Data Science’ at the 9th edition of Aegis Graham Bell Award 2018, for the industry-first project ‘Yes EEE (Engage Enrich Excel)’.

• YES BANK has been selected by Global Finance magazine as Best Debt Bank in Asia Pacific for deals announced/completed in 2018 Accolades for Small & Medium Enterprises Financing:

• YES BANK was awarded ‘SME Bank of the Year - India’ in the Asian Banking & Finance Retail Banking Awards, Singapore in July 2018.

• YES BANK was adjudged as the ‘Best Bank in India for Small and Medium-Sized Enterprises (SMEs)’ at the Asiamoney Best Bank Awards 2018 and 2019.

• YES BANK was recognized as the ‘Best Banking Solutions provider for SMEs’ at Engineering Export Promotion Council (EEPC India) 48th Northern Region Awards for Export Excellence, Dehradun.

Multiple recognitions for CSR practices:

• YES BANK was adjudged as winner in ‘Excellent CSR for Women Empowerment’ category of Social Footprints Awards 2018 for YES BANK’s innovative blended finance facility, aimed at promoting environmentally sustainable livelihood among women salt farmers in Gujarat.

• YES BANK was adjudged the winner in ‘Safe Drinking Water’ category of Social Footprints Awards 2018 for successful implementation of Water ATMs and Water Health Centers under Water and Livelihood project in India.

• YES BANK received ‘CSR Excellence Award’ for its first-of-its-kind MSME CSR project ‘Say YES to Sustainable MSMEs in India’ at the Apex India Awards.

EMPLOYEES STOCK OPTION SCHEME

The Bank has instituted Stock Option Schemes to enable its employees to participate in the Bank's future growth and financial success. The Bank provides its employees a platform for participating in important decision making and instilling long-term commitment towards future growth of the Bank by way of rewarding them through Stock Options. In terms of compensation and benefit policy of the Bank, employees are granted options as part of Annual Performance Review process based on their performance as well as to ensure their retention, and to hire the best talent for its senior management and key positions.

The Bank has from time to time granted Stock Options to its employees under the following Employee Stock Option Plans viz.,

• Joining Employee Stock Option Plan II (JESOP II);

• Joining Employee Stock Option Plan III (JESOP III);

• YBL ESOP (consisting of two sub-schemes JESOP IV / PESOP I);

• YBL JESOP V / PESOP II (Consisting of three sub schemes JESOP V / PESOP II / PESOP II -2010); and

• YBL Employee Stock Option Scheme, 2018 (YBL ESOS 2018) [Consisting of YBL Joining Employee Stock Option Plan, 2018 (JESOP 2018); YBL Performance Employee Stock Option Plan, 2018 (PESOP 2018); and YBL MD & CEO (New) Stock Option Plan, 2019 (MD & CEO Plan 2019).

JESOP II and JESOP III were in force for employees joining the Bank up to March 31, 2006 and March 31, 2007 respectively. Grants under PESOP II had been discontinued w.e.f. January 20, 2010. Grants under YBL ESOP and YBL JESOP V / PESOP II had been discontinued w.e.f. June 12, 2018 pursuant to coming into effect of YBL ESOS 2018. However, any options already granted under the abovementioned plans would be valid in accordance with the terms & conditions mentioned in the plans.

Options under all the aforesaid plans are granted for a term of 10 years (inclusive of the vesting period) and are settled with equity shares being allotted to the beneficiary upon exercise.

In accordance with the various Employee Stock Option Plans/ Schemes of the Bank as mentioned above, the Employees can exercise the options granted to them from time to time as per the below vesting schedule:

ESOP Plan Exercise period
JESOP II 50% after 3 years and balance after 5 years from the Grant date
JESOP III 50% after 3 years and balance after 5 years from the Grant date
JESOP IV 50% after 3 years and balance after 5 years from the Grant date
JESOPV 50% after 3 years and balance after 5 years from the Grant date
PESOPI 25% after each year from the Grant date
PESOP II 30%, 30% & 40% after each year from the Grant date
PESOP II - 2010 30%, 30% & 40% each year, from end of 3rd year from the Grant date
JESOP 2018 50% after 3 years and balance after 5 years from the Grant date
PESOP 2018 30%, 30% & 40% each year, from end of 3rd year from the Grant date
MD & CEO Plan 2019 20%, 30% & 50% each year, from end of 1st year from the Grant date

Effective from June 13, 2018, all new options have been granted under the YBL ESOS 2018 (which inter-alia consists of JESOP 2018, PESOP 2018 and MD & CEO Plan 2019). The YBL ESOS 2018 and plans formulated thereunder are in compliance with the SEBI (Share Based Employees Benefits) Regulations, 2014 as amended from time to time. Source of shares are primary in nature, since the Bank has been issuing new equity shares upon exercise of options.

No stock options were issued to the Directors of the Bank except Mr. Ravneet Singh Gill, MD & CEO of the Bank.

Various details including option movement during the year under aforementioned Schemes/ Plans, i.e. JESOP II, JESOP III, YBL ESOP, YBL JESOP V/PESOP II and YBL ESOS 2018 respectively are as follows:

YBL ESOP

YBL JESOP V/PESOP II

YBL ESOS 2018

JESOP II

JESOP III

YBL ESOP (JESOP IV)

YBL ESOP (PESOP I)

YBLJESOP V

YBL PESOP II

YBL PESOP 11-2010

JESOP 2018

YBL PESOP 2018

YBL MD & CEO PLAN 2019
Date of Shareholders’ Approval July 24, 2006

July 24, 2006

August 29, 2007

August 29, 2007

September 18, 2008*

September 18, 2008*

September 18, 2008*

June 12, 2018

June 12, 2018

June 12, 2018
Total Number of Options approved 25,000,000

25,000,000

25,000,000

25,000,000

47,500,000

76,140,000

101,360,000

2,00,00,000

4,00,00,000

1,50,00,000
Total Number of options outstanding at the beginning of the period -

-

6,250

247,375

15,956,850

2,276,650

43,733,310

-

-

-
Total No. of Options granted (during FY 2018-19) -

-

-

-

522,500

-

100,000

417,500

265,000

5,000,000
The Pricing Formula Refer Note 1

Refer Note 1

Refer Note 1

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 2018-19) -

-

-

-

2,530,751

-

5,499,330

-

-

-
Options Exercised (during FY 2018-19) -

-

3,500

122,000

2,797,274

1,523,050

7,619,970

-

-

-
Total No. of shares arising as a result of exercise of option -

-

3,500

122,000

2,797,274

1,523,050

7,619,970

-

-

-
Options lapsed/forfeited (during FY 2018-19) -

-

2,750

-

844,750

-

2,338,200

-

-

-
Total No. of Options outstanding at the end of the year -

-

-

125,375

12,837,326

753,600

33,875,140

417,500

265,000

5,000,000
Total No. of Options exercisable at the end of the year -

-

-

125,375

3,901,451

753,600

17,822,290

-

-

-
Variation of terms of Options Refer Note 2

Refer Note 2

Refer Note 2

Refer Note 2

Refer Note 3

Refer Note 3

Refer Note 3

Refer Note 2

Refer Note 2

Refer Note 2
Money realized by exercise of Options (during FY 2018-19) (in ?) -

-

80,290

3,415,088

297,015,481

38,502,666

614,457,888

-

-

-
Total No. of Options in force

125,375

12,837,326

753,600

33,875,140

417,500

265,000

5,000,000
Total No. of Options granted to:
(i) Senior Management

Refer Sub

Refer Sub

Refer Sub

Refer Sub

Refer Sub
Personnel (SMP)

table 1

table 1

table 1

table 1

table 1
(ii) Any other employee who
received a grant in any one year of options, amounting to 5% or more of options granted during that year -

-

-

-

Refer Subtable 2

-

-

-

Refer Sub table 2

Refer Sub table 2
(iii) Identified employees who are granted options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Diluted Earnings Per Share (EPS) of the Bank after considering the effect of potential equity shares on account of exercise of Options

?7.38/-

Impact of the difference between the Intrinsic Value of the Options and the Fair Value of the Options on Profits and on EPS The Bank has charged Nil amount, being the intrinsic value of the stock options granted for the year ended March 31, 2019 and March 31, 2018. Had the Bank adopted the Fair Value method (based on Black- Scholes pricing model), for pricing and accounting of options, net profit after tax would have been lower by ?375.18 millions (Previous year: ?414.98 millions), the basic earnings per share would have been ?7.29 (Previous year: ?18.24) per share instead of ?7.45 (Previous year: ?18.43) per share and diluted earnings per share would have been ?7.22 (Previous year: ?17.88) per share instead of ?7.38 (Previous year: ?18.06) per share.
Weighted average price of the shares exercised during the year (in ?) -

-

22.94

-

106.18

25.28

80.64
Weighted average fair values of the outstanding options (in ?) -

-

-

29.77

179.61

29.77

142.30

231.15

*The option under the scheme were increased subsequently from 1 crore to 3 crores and finally to 4.5 crores by the shareholders’ approval dated September 3, 2009 and June 28, 2011 respectively The Securities and Exchange Board of India (‘SEBI’) has prescribed two methods to account for stock grants; namely (i) the intrinsic value method; (ii) the fair value method. The Bank adopts the intrinsic value method to account for the stock options it grants to the employees. The Bank also calculates the fair value of options at the time of grant, using Black-Scholes pricing model with the following assumptions:

(a) the weighted-average values of share price, exercise price, expected volatility, expected option life, expected dividends, the risk-free interest rate and any other inputs to the model;

(b) the method used and the assumptions made to incorporate the effects of expected early exercise;

(c) how expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility; and

(d) whether and how any other features of the option grant were incorporated into the measurement of fair value, such as a market condition.

March 31, 2019
Risk free Interest Rate 6.29%-9.23%
Expected life 1.5 yrs - 7.5 yrs
Expected Volatality** 25.01%-48.72%
Expected dividends 1.50%

**Expected volatility is average volatility for expected life of the option.

Note 1: Being the closing price of the Equity Shares on the stock exchange with the highest 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 Year ended March 31, 2019.

Note 3: The Shareholders of the Bank by way of Postal Ballot on January 17, 2015 had approved certain modifications in terms of YBL JESOP V / PESOP II Scheme (consisting of three sub-schemes JESOP V / PESOP II / PESOP II-2010).

Sub-table 1: Following are the total number of stock options that have been granted to Senior Management Personnel ("SMP") of the Bank and its subsidiaries during the financial year ended March 31,2019:

Scheme Name of Employees Designation Options granted Grant Price
YBL PESOP 2018 Akash Prasad Group President 100,000 384.35
YBL JESOP 2018 Amar Kirti Ambani President 25,000 192.35
YBL JESOP 2018 Anand Deva Priya President 30,000 384.35
YBL JESOP 2018 Ashish Joshi Senior President 60,000 200.85
YBL JESOP 2018 Binoj Vasu Senior President 50,000 200.85
PESOP II - 2010 Mahesh Rajaraman Group President 50,000 313.05
PESOP II - 2010 Neeraj Dhawan Senior Group President 50,000 313.05
JESOPV Raj Ahuja Senior Group President 400,000 313.05
YBL PESOP 2018 Rajiv Anand Group President 150,000 384.35
YBL MD & CEO PLAN 2019 Ravneet Singh Gill MD & CEO 5,000,000 231.15
YBL JESOP 2018 Sai Venkataramana Kosuri Senior President 35,000 192.35
YBL PESOP 2018 Vikash Modi Senior President 15,000 192.35
YBL JESOP 2018 Vikram Mago President 25,000 200.85
YBL JESOP 2018 Vineet Dhar Group President 100,000 192.35

Sub-table 2: Following are the details of the employees to whom 5% or more of options were granted during the financial year ended March 31,2019.

Scheme Name of Employees Designation Options granted Grant Price
JESOPV Raj Ahuja Senior Group President 400,000 313.05
YBL PESOP 2018 Rajiv Anand Group President 150,000 384.35
YBL MD & CEO PLAN 2019 Ravneet Singh Gill MD & CEO 5,000,000 231.15

None of the employees were granted options equal to or exceeding 1% of the issued capital of the Bank at the time of grant during FY 2018-19.

DIVERGENCE IN ASSET CLASSIFICATION AND PROVISIONING FOR NPAS

In terms of the RBI circular no. DBR.BP.BC.No.32/ 21.04.018/2018-19 dated April 1, 2019, the banks are required to disclose the divergences in asset classification and provisioning consequent to RBI's annual supervisory process in their notes to accounts to the financial statements, wherever either or both of the following conditions are satisfied: (a) the additional provisioning for NPAs assessed by RBI exceeds 10 per cent of the reported profit before provisions and contingencies for the reference period and (b) the additional Gross NPAs identified by RBI exceed 15 per cent of the published incremental Gross NPAs for the reference period. Based on the above, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI's annual supervisory process for FY2018-19.

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

As on March 31,2019, the Bank had three wholly-owned subsidiaries, YES Securities (India) Limited (‘YSIL’), YES Asset Management (India) Limited (‘YAMIL’) and YES Trustee Limited (‘YTL’).

The Bank does not have any material subsidiary, associate and joint venture company.

Performance and Financial Position of Subsidiary Companies

YES Securities (India) Limited (YSIL)

YES Securities (India) Limited or YSIL, the Bank’s wholly-owned capital markets intermediary, completed five years of operations in FY 2018-19. YSIL, today, offers retail, HNI and corporate customers a comprehensive range of products and services, encompassing Investment Banking (including a dedicated Sustainable Investment Banking practice), Merchant Banking, Wealth Broking, Advisory, Research and Institutional Equities services.

YSIL is a SEBI* registered Stock Broker holding membership of National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and Multi Commodity Exchange (MCX). YSIL is also a SEBI-registered Category I Merchant Banker, Investment Adviser and Research Analyst.

*Securities and Exchange Board of India

Wealth Broking

In FY 2018-19, YSIL’s Wealth Broking business continued to enhance its product and service proposition to offer customers a more comprehensive investment management experience. YSIL offers a best-in-class 3-in- 1 proposition in major cities across India. Its online trading platform (available on web and mobile app) witnessed consistent growth in client transaction volumes further complementing the growing engagement between high net-worth clients and the dedicated dealing desk.

In FY 2018-19, YSIL took significant strides in achieving the long-term vision of establishing itself as a research-backed and client-centric multi-asset wealth solutions provider. YSIL has set up a strong product team with expertise across asset classes - Equity, Derivatives, Debt, Advisory/Fund Management, Commodities, Currency, as well as a dedicated team focusing on developing digital products. During the year, YSIL also significantly strengthened its research credentials and expanded its research coverage universe across fundamental, thematic and technical insights.

Investment Banking

The Investment Banking team provides Mergers and Acquisition (M&A) and Capital Advisory services to large ssand mid-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 including Food and Agribusiness; Media and Entertainment; Consumer Markets; Infrastructure and Engineering, Procurement and Construction (EPC), Banking, Financial Services and Insurance (BFSI), Internet & E-commerce, Industrials and Logistics to corporate clients.

Merchant Banking: YSIL’s Merchant Banking practice has a strong focus on capital market activities offering a comprehensive bouquet of products including Initial Public Offerings (IPO), Qualified Institutional Placements (QIP), Rights Issues, Open Offer, Buyback, Delisting and other advisory services. During FY 2018-19, the highly-experienced team successfully engaged with leading Indian companies as a fund-raising partner and trusted advisor for their capital market requirements.

Institutional Sales & Trading

FY 2018-19 was a significant year as institutional brokerage rose 57 % over FY 2017-18. The team successfully secured empanelment as broker across major Asset Management and Insurance companies. Besides, backed by improved client service, execution excellence and superior research, the team succeeded in reactivating transaction activity from valued institutional clients. YSIL has proactively engaged and ideated with clients’ on capital market insights, corporate road shows and regular research inputs.

As on March 31, 2019, YSIL is empaneled with 30 institutions.

YES Trustee Limited (YTL) & YES Asset Management (India) Limited (Yamil)

YES BANK Limited has incorporated YES Asset Management (India) Limited on April 21, 2017 and YES Trustee Limited on May 3, 201 7 as wholly owned subsidiaries for the mutual fund business.

YAMIL was granted an approval by Securities and Exchange Board of India ("SEBI") on July 3, 2018 to act as an Asset Management Company / Investment Manager to YES Mutual Fund.

YAMIL pursues to combine its investors’ and stakeholders’ interests and bring out the optimum solutions for its investors. Towards the same, YAMIL has launched its First Mutual Fund Scheme "YES Liquid Fund", NFO which was open from January 2, 2019 to January 16, 2019. The NFO has received extremely good response. Further, Average Assets Under Management (AAUM) of YES Mutual Fund for the period from January 16, 2019 to March 31, 2019 stood at '2000.12 crore.

YES Mutual Fund is presently focusing on tailoring liquidity management solutions for Corporates, HNI’s and Retail investors. It had further received SEBI’s approval to launch an Ultra Short-Term Fund and YES Overnight Fund.

YTL is acting as a Trustee Company to YES Mutual Fund (YMF). It will provide trusteeship services to all the funds launched by YMF.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of Financial Statements of subsidiaries in Form AOC-1 forms part of the Annual Report. 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 the subsidiaries may write to the Company Secretary of the Bank. Financials of Bank and its subsidiaries shall also be available for inspection by members or trustees of the holders of any debentures of the Bank at its Registered office.

RATINGS OF VARIOUS DEBT INSTRUMENTS

During the year under review, the Bank had raised '30,420 million by way of issue of rated listed unsecured Tier II Bonds in the nature of Debenture. This instrument has been rated by rating agencies namely Credit Analysis and Research (‘CARE’) and India Ratings & Research Pvt. Ltd. (‘India Ratings’), A Fitch Group Company. The details of the instrument as well as the ratings are as below:

• The Bank issued 30,420 Rated Listed Non-Convertible Redeemable Unsecured Basel III Compliant Tier II bonds in the form of Debentures issued on Private Placement basis of Face Value of '10,00,000/- each fully paid up aggregating to '30,420 million on September 14, 2018 and the issue was rated by CARE and India Ratings. At the time of issue, CARE had assigned a rating of ‘CARE AAA’ (Outlook: Stable) and India Ratings had assigned a rating of ‘IND AA+’ (Outlook: Stable). Currently, CARE has assigned a rating of ‘CARE AA+’ (Outlook: Credit watch with developing implications) w.e.f. November 28, 2018 and India Ratings has assigned a rating of ‘IND AA+’ (Outlook: Negative) w.e.f. November 2, 2018.

The Credit Rating and change/revision in the Credit Ratings for various debt instruments issued by the Bank from time to time are provided in the Corporate Governance Report forming part of the Annual Report.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

Appointments/Re-appointments:

Mr. Ravneet Singh Gill

The Board of Directors of the Bank on January 24, 2019, basis recommendation of the Nomination & Remuneration

Committee (N&RC) appointed Mr. Ravneet Singh Gill as an Additional Director w.e.f. the date of his taking charge and to hold office up to the date of the ensuing Annual General Meeting (AGM). In the said meeting the Board also appointed Mr. Ravneet Singh Gill as the Managing Director and Chief Executive Officer (MD & CEO) of the Bank for a period of three (3) years commencing from the date of his taking charge as MD & CEO, on the terms & conditions as approved by the RBI and as may be further decided by the Board of Directors from time to time, subject to necessary sanctions and approvals from the RBI and the Shareholders of the Bank, as may be applicable. Mr. Ravneet Singh Gill took charge as MD & CEO of the Bank w.e.f. March 1, 2019. The Bank has received a notice in writing from a member proposing the candidature of Mr. Ravneet Singh Gill as MD & CEO on the Board of the Bank. Further, the N&RC and Board of Directors of the Bank have also recommended the appointment of Mr. Ravneet Singh Gill as MD & CEO, not liable to retire by rotation, to the Shareholders at the ensuing AGM.

Mr. Ajai Kumar

Mr. Ajai Kumar, Non-Executive Non-Independent Director, was appointed as an Interim MD & CEO of the Bank on January 29, 2019, to hold office as an Interim MD & CEO for a period from February 1,2019 to February 28, 2019. The Bank had received approval from RBI on January 30, 2019 for appointment of Mr. Ajai Kumar as an Interim MD & CEO. Further, resolution for ratification of appointment and remuneration of Mr. Ajai Kumar as Interim MD & CEO is proposed to be passed at the ensuing AGM.

Dr. Pratima Sheorey

Dr. Pratima Sheorey was appointed as an Additional Director (Independent) on the Board of the Bank w.e.f. April 26, 2018 and was appointed as an Independent Director by the Shareholders at the 14th AGM of the Bank held on June 12, 2018.

Mr. Rentala Chandrashekhar

Mr. Rentala Chandrashekhar was appointed as an Additional Director (Independent) on the Board of the Bank w.e.f. April 26, 2018 and was appointed as an Independent Director by the Shareholders at the 14th AGM of the Bank held on June 12, 2018.

Mr. Uttam Prakash Agarwal

Mr. Uttam Prakash Agarwal was appointed as an Additional Director (Independent) on the Board of the Bank w.e.f. November 14, 2018, to hold office upto the date of ensuing AGM. The Bank has received a notice in writing from a member proposing the candidature of Mr. Uttam Prakash Agarwal as an Independent Director

on the Board of the Bank. Further, the N&RC and Board of Directors of the Bank have also recommended the appointment of Mr. Uttam Prakash Agarwal as an Independent Director, not liable to retire by rotation, to the Shareholders at the ensuing AGM.

Mr. Thai Salas Vijayan

Mr. Thai Salas Vijayan was appointed as an Additional Director (Independent) on the Board of the Bank w.e.f. December 3, 2018, to hold upto the date of ensuing AGM. The Bank has received a notice in writing from a member proposing the candidature of Mr. Thai Salas Vijayan as an Independent Director on the Board of the Bank. Further, the N&RC and Board of Directors of the Bank have also recommended the appointment of Mr. Thai Salas Vijayan as an Independent Director, not liable to retire by rotation, to the Shareholders at the ensuing AGM.

Mr. Maheswar Sahu

Mr. Maheswar Sahu was appointed as an Additional Director (Independent) on the Board of the Bank w.e.f. January 24, 2019, to hold upto the date of this AGM. The Bank has received a notice in writing from a member proposing the candidature of Mr. Maheswar Sahu as an Independent Director on the Board of the Bank. Further, the N&RC and Board of Directors of the Bank have also recommended the appointment of Mr. Maheswar Sahu as an Independent Director, not liable to retire by rotation, to the Shareholders at the ensuing AGM.

Mr. Anil Jaggia

Mr. Anil Jaggia was appointed as an Additional Director (Independent) on the Board of the Bank w.e.f. January 24, 2019, to hold office upto the date of this AGM. The Bank has received a notice in writing from a member proposing the candidature of Mr. Anil Jaggia as an Independent Director on the Board of the Bank. Further, the N&RC and Board of Directors of the Bank have also recommended the appointment of Mr. Anil Jaggia as an Independent Director, not liable to retire by rotation, to the Shareholders at the ensuing AGM.

Mr. Ravinder Kumar Khanna

Mr. Ravinder Kumar Khanna was appointed on the Board as Additional (Non-Executive Non-Independent), Indian Partners' Representative Director w.e.f. April 26, 2019. The Bank has received a notice in writing from a member proposing the candidature of Mr. Ravinder Kumar Khanna as a Director on the Board of the Bank. Further, the N&RC and Board of Directors of the Bank have also recommended the appointment of Mr. Ravinder Kumar Khanna as a Non-Executive Non-Independent Director, not liable to retire by rotation, to the Shareholders at the ensuing AGM.

Ms. Shagun Kapur Gogia

Ms. Shagun Kapur Gogia was appointed on the Board as Additional (Non-Executive Non-Independent), Indian Partners' Representative Director w.e.f. April 26, 2019. The Bank has received a notice in writing from a member proposing the candidature of Ms. Shagun Kapur Gogia as a Director on the Board of the Bank. Further, the N&RC and Board of Directors of the Bank have also recommended the appointment of Ms. Shagun Kapur Gogia as a Non-Executive Non-Independent Director, not liable to retire by rotation, to the Shareholders at the ensuing AGM.

Mr. Subhash Chander Kalia

Mr. Subhash Chander Kalia was appointed as an Additional Director (Non-Executive Non-Independent) on the Board of the Bank w.e.f. April 3, 2018 and was appointed as a Non-Executive Non-Independent Director by the Shareholders at the 14th AGM of the Bank held on June 12, 2018.

In terms of Section 152 of the Companies Act, 2013, Mr. Subhash Chander Kalia, Non-Executive Non-Independent Director, being liable to retire by rotation, shall retire at the ensuing AGM and being eligible for re-appointment, offers himself for re-appointment.

Lt. General (Dr.) Mukesh Sabharwal (Retd.)

The term of office of Lt. General (Dr.) Mukesh Sabharwal (Retd.), as an Independent Director, will expire on June 13, 2019. The Bank has received a notice in writing from a member proposing the candidature of Lt. General (Dr.) Mukesh Sabharwal (Retd.) as an Independent Director on the Board of the Bank. Further, the N&RC and Board of Directors of the Bank have also recommended the re-appointment of Lt. General (Dr.) Mukesh Sabharwal (Retd.), as an Independent Director of the Bank for a second term upto April 24, 2020 (i.e. completion of eight years in the Bank as permissible under the Banking Regulation Act, 1949) or such other extended term as may be approved by RBI, subject to maximum 5 years of second term as provided under Companies Act, 2013, not liable to retire by rotation, to the Shareholders of the Bank at the ensuing AGM.

Mr. Brahm Dutt

The term of office of Mr. Brahm Dutt, as an Independent Director, will expire on June 13, 2019. The Board of Directors of the Bank, basis the recommendation of the N&RC and approval of RBI, had appointed Mr. Brahm Dutt, Independent Director, as Part-Time Chairman of the Bank. Mr. Brahm Dutt took charge as Part-Time Chairman of the Bank w.e.f. January 11, 2019 pursuant to approvals received from RBI and will hold the office as Part-Time Chairman of the Bank till January 10, 2022.

The Bank has received a notice in writing from a member proposing the candidature of Mr. Brahm Dutt as an Independent Director on the Board of the Bank. The N&RC and Board of Directors of the Bank have also recommended the re-appointment of Mr. Brahm Dutt, as an Independent Director of the Bank for the second term, not liable to retire by rotation, to the Shareholders of the Bank at the ensuing AGM and he shall hold office till January 10, 2022 (i.e. tenure as Part-Time Chairman of the Bank). A resolution for taking on record the RBI approval for appointment of Mr. Brahm Dutt and approval of remuneration as Part-Time Chairman of the Bank is proposed to the Shareholders at the ensuing AGM.

The relevant details including profiles of Mr. Ravneet Singh Gill, Mr. Ajai Kumar, Mr. Uttam Prakash Agarwal, Mr. Thai Salas Vijayan, Mr. Maheswar Sahu, Mr. Anil Jaggia, Mr. Ravinder Kumar Khanna, Ms. Shagun Kapur Gogia, Mr. Subhash Chander Kalia, Lt. General (Dr.) Mukesh Sabharwal (Retd.) and Mr. Brahm Dutt are included separately in the Notice of AGM and Report on Corporate Governance of the Bank forming part of the Annual Report.

Retirements/Cessations:

Mr. Saurabh Srivastava

In terms of RBI letter dated January 28, 2016 & March 28, 2018, Mr. Saurabh Srivastava completed his tenure as Director of the Bank on April 22, 2018.

Ms. Debjani Ghosh

Ms. Debjani Ghosh, Independent Director has resigned from the office of the Director w.e.f. April 26, 2018, due to her pre-occupation with full time engagement as President of National Association of Software and Services Companies (NASSCOM).

Mr. Ashok Chawla

Mr. Ashok Chawla, Non-Executive (Independent) Part-Time Chairman of the Bank, had resigned from the directorship of the Bank w.e.f. November 14, 2018, mentioning that during the current transition period, the Bank would need a Chairman who could devote more time and attention.

Mr. Vasant Gujarathi

Mr. Vasant Gujarathi, Independent Director, had resigned from the directorship of the Bank w.e.f. November 14, 2018, due to his personal commitments.

Mr. Rentala Chandrashekhar

Mr. Rentala Chandrashekhar, Independent Director of the Bank, resigned from the directorship of the Bank w.e.f. November 19, 2018, citing that he was deeply concerned about the recent developments at the Bank and dismayed

at the manner in which they have been dealt with and it is more distressing that all this should have been occurred during a critical transition period when tact, wisdom and purposeful, well-considered actions were called for and the resulting situation arising from recent development and their handling is not conducive to the discharge of his duties.

The Board places on record its sincere appreciation and thanks for the valuable contributions made by Mr. Ashok Chawla as Part-Time Chairman of the Bank and Mr. Saurabh Srivastava, Ms. Debjani Ghosh, Mr. Vasant Gujarathi and Mr. Rentala Chandrashekhar as Independent Directors of the Bank.

Mr. Rana Kapoor

Mr. Rana Kapoor demitted office as MD & CEO of the Bank w.e.f. the close of business hours on January 31, 2019 upon completion of RBI approved term.

The Board places on record its sincere appreciation and thanks for the valuable services and leadership of Mr. Rana Kapoor as MD & CEO of the Bank. The Bank over the last fourteen and half years of performance, has demonstrated track record of consistent delivery of business and financial outcomes across all critical parameters such as Capital Adequacy, Profitability, Steady Growth and look forward to carry on the excellent performance under the leadership of Mr. Ravneet Singh Gill.

Key Managerial Personnel

Mr. Ravneet Singh Gill, MD & CEO, Mr. Raj Ahuja, Group Chief Financial Officer and Mr. Shivanand R. Shettigar, Group Company Secretary of the Bank are the Key Managerial Personnel as per the provisions of the Companies Act, 2013 and rules made thereunder.

During the year under review, Mr. Rana Kapoor demitted office as MD & CEO and Key Managerial Personnel of the Bank in terms of the provisions of Section 203 of the Companies Act, 2013 w.e.f. close of business hours on January 31, 2019. Further, Mr. Ajai Kumar was appointed as an Interim MD & CEO and Key Managerial Personnel in terms of the provisions of Section 203 of the Companies Act, 2013 for the period commencing from February 1, 2019 to February 28, 2019. Mr. Ravneet Singh Gill took charge as MD & CEO and Key Managerial Personnel of the Bank in terms of the provisions of Section 203 of the Companies Act, 2013 for a period of three (3) years, w.e.f. March 1, 2019 to February 28, 2022.

Mr. Raj Ahuja was appointed as the Group Chief Financial Officer and Key Managerial Personnel in terms of the provisions of Section 203 of the Companies Act, 2013 w.e.f. April 3, 2018.

DECLARATION BY INDEPENDENT DIRECTORS

The Bank has received necessary declarations from each Independent Director under Section 149(6) and 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’), that they meet the criteria of independence laid down thereunder.

FAMILIARIZATION PROGRAMS FOR INDEPENDENT DIRECTORS

The various programs were undertaken for familiarizing the Independent Directors which are disclosed in detail in the Corporate Governance Report, which forms part of the Annual Report.

NUMBER OF THE MEETINGS OF THE BOARD AND COMMITTEES

Regular meetings of the Board and its Committees are held to discuss and decide on various business policies, strategies, financial matters and other businesses. The schedule of the Board/Committee meetings to be held in the forthcoming financial year is circulated to the Directors in advance to enable them to plan their schedule for effective participation in the meetings. Due to business exigencies, the Board has also been approving several proposals by circulation from time to time.

The Board met thirteen (13) times during the FY 2018-19 viz. on April 3, 2018, April 26, 2018, June 12, 2018, June 13, 2018, July 26, 2018, August 28, 2018, September 25, 2018, October 25, 2018, December 13, 2018, January 9, 2019, January 24, 2019, January 29, 2019 and March 14, 2019.

Additionally, several Committee meetings were held during the year including Audit Committee and Risk Monitoring Committee Meetings, which met nine (9) and six (6) times respectively during the year.

Detailed information on the meetings of the Board and its Committees are included in the Report on Corporate Governance, which forms part of the Annual Report.

COMMITTEES OF THE BOARD

The Bank has the following twelve (12) Board level Committees which have been established in compliance with the requirements of the business and relevant provisions of applicable laws 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 Willful Defaulters & Non-operative Borrowers; and

12. Committee of Independent Directors.

The details with respect to the composition, terms of reference, number of meetings held, etc. of these Committees are given in the report on Corporate Governance which forms part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Bank has established Corporate Social Responsibility (‘CSR’) Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure 1. The CSR Policy as recommended by the CSR Committee and as approved by Board is available on the website of the Bank and can be accessed at https://www.yesbank.in/pdf/ ybl_corporate_social_responsibility_policy.

PERFORMANCE EVALUATION OF THE BOARD

The Bank has laid down criteria for performance evaluation of the Directors including Chairman, MD & CEO, Board Level Committees and Board as a whole as well as the evaluation process for the same, in line with the provisions of the Companies Act, 2013, Listing Regulations and SEBI Guidance Note on the Board Evaluation dated January 5, 2017.

The performance evaluation of the members of the Board, the Board Level Committees and Board as a whole was carried out on April 25 and 26, 2019. Additional information on the Board Evaluation Process forms part of the Report on Corporate Governance.

CORPORATE GOVERNANCE

Corporate Governance is an ethically driven business process that is committed to values aimed at enhancing an organization’s brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders’ expectations. Further, Corporate Governance is based on the principles of conducting the business with all integrity, fairness, and transparency with all the transactions, making the necessary disclosures and decisions, complying with the laws of the land, accountability and responsibility towards the stakeholders and commitment of conducting the business in an ethical manner. Your Board functions as trustees of the shareholders and seeks to ensure that the long-term economic value for its shareholders is achieved while balancing the interest of all the stakeholders. The Bank is committed to achieve the highest standards of Corporate Governance and also adheres to the Corporate Governance requirements set by the Regulators/applicable laws. In line with the foregoing, the Bank has adopted a Code of Corporate Governance which acts as a guide to the Bank and the Board on the best practices in the Corporate Governance.

A separate section on Corporate Governance standards followed by the Bank and the relevant disclosures, as stipulated under Listing Regulations, Companies Act, 2013 and rules made thereunder forms part of the Annual Report.

A Certificate from M/s. Mehta & Mehta, Practicing Company Secretaries, conforming compliance by the Bank to the conditions of Corporate Governance as stipulated under Listing Regulations, is annexed to the Report on Corporate Governance, which forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulated in Listing Regulations is presented in a separate section forming part of the Annual Report.

VIGIL MECHANISM

In line with the provisions of Listing Regulations, the Companies Act, 2013 and the principles of good governance, the Bank has devised and implemented a vigil mechanism, in the form of 'Whistle-Blower Policy'. The policy devised is also aligned to the recommendations of Protected Disclosure Scheme for Private Sector and Foreign Banks, instituted by RBI. Detailed information on the Vigil Mechanism of the Bank is provided in the Report on the Corporate Governance which forms part of the Annual Report.

RISK MANAGEMENT FRAMEWORK

The Bank’s Enterprise Risk Management framework encompasses the following:

• Risk Governance Framework: The Bank has implemented an Enterprise Risk Governance framework to ensure non-silo based management and oversight of Risk. The Bank’s Risk Management philosophy is guided by the Three Lines of Defence Principle:

• First Line of Defence - Business Management: Each business segment of the Bank has risk ownership and is responsible for assessment and management of risks and has the overall responsibility of the management and mitigation of the Risk. The segments are required to implement appropriate procedures to fulfil their risk governance responsibilities.

• Second Line of Defence - Independent functions: The Bank’s independent oversight functions, such as, Risk Management, Compliance, Legal, Fraud Containment Unit, etc. set standards for management and oversight of risks, including compliance with applicable laws, regulatory requirements and policies.

• Risk Management: Risk Management establishes policies and guidelines for risk assessment and management and contributes to controls and tools to manage, measure and mitigate risks faced by the Bank.

• Compliance: The Compliance unit manages adherence to applicable laws and regulatory guidelines.

• Legal: The Legal Risk Management division of the Bank undertakes various activities including advising business and operational management, acting as an independent control function while facilitating business, ensuring legal compliance, assisting the Board and Committees of the Board regarding analysis of laws and regulations, regulatory matters, disclosure matters, and potential risks and exposures on key litigation and transactional matters.

• Finance: The Finance vertical provides key data and consultation to facilitate sound decisions in support of the objectives of the Bank and the business verticals. Finance serves as an independent control function advising business management and establishing policies or processes to manage risk. It has overall responsibility for managing the Bank’s balance sheet and the Bank’s liquidity and interest rate risk.

• FCU & AML: The Fraud Containment Unit (FCU) is responsible for prevention and detection of internal and external frauds in the areas of Liabilities, Product and Support functions. The unit conducts transaction monitoring, forensic scrutiny, employee awareness trainings and vulnerability assessments to help achieve the said objective. The Anti Money Laundering Unit (AML) is responsible for identifying and reporting of suspicious transactions as prescribed under PMLA Act/Regulators, across all Business segments of the Bank. The AML unit is equipped with qualified, trained and experienced staff, which monitors various transactions undertaken by customers with a view to combat financial crimes and prevents misuse of the accounts for money laundering.

• Third Line of Defence - Internal Audit: The Bank’s Internal Audit function independently reviews activities of the first two lines of defence based on a risk-based audit plan and methodology approved by the Audit Committee of the Board. Internal Audit provides independent assurance to the Board, the Audit Committee, senior management and regulators regarding the effectiveness of the Bank’s governance and controls designed for risk mitigation framework.

The Board of Directors of the Bank has overall responsibility for Risk Management. The Board oversees the Bank’s Risk and related control environment, reviews and approves the policies designed as part of overseeing the Risk Management practices. The Board ensures that comprehensive policies, systems and controls are in place to identify, monitor and manage material risks at a Bank-wide level, with clearly defined risk limits. The Board has laid down a Risk Appetite framework which articulates the quantum of risk the Bank is willing and able to assume in its exposures and business activities in pursuit of its strategic objectives and desired returns. The Board has also established policies governing risk management, such as, Enterprise Risk Management Policy, Reputation Risk Management 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 pertain to Risk Management, viz. Risk Monitoring Committee (RMC), Audit Committee of the Board (ACB), Fraud Monitoring Committee (FMC), Board Committee on Wilful Defaulters & Non-Cooperative Borrowers (BCWD&NCB) and Board Credit Committee (BCC) to deal with risk management practices, policies, procedures and to have adequate oversight on the risks faced by the Bank.

The Board Committees have set up various Executive level committees for oversight over specific 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 Process Approval Committee;

12. Fraud & Suspicious Transaction Monitoring Committee;

13. Whistle-Blower Committee;

14. Enterprise Risk Management & Capital Management Committee;

15. Strategy Management Committee;

16. Reputation Risk Management Committee;

17. Standing Committee 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; and

23. Committee for Classification of Wilful Deafulters;

Risk events, potential threats, performance of the Bank vis-a-vis Risk Limits and Risk Appetite, Risk Profile dashboard covering key risk indicators, etc. are presented to these Committees, with Q-o-Q/Y-o-Y trends highlighted, with level and direction of risk. The Bank also conducts a detailed Internal Capital Adequacy Assessment Policy (‘ICAAP’) review exercise to identify its Risk universe, internal controls and mitigation measures in place for the risks and capital requirements for identified risks. The ICAAP findings are presented to the RMC and the Board.

The Risk Management Unit is headed by the Chief Risk Officer (‘CRO’) who leads the Credit Risk (Underwriting) Unit, General Legal Counsel and other Risk Units. The CRO reports to the MD & CEO. The CRO is responsible to ensure an effective implementation of an enterprise wide risk management framework through various risk policies, processes, limits and controls that enable prompt risk identification, accurate risk measurement and effective risk mitigation. CRO is also responsible for risk compliance and monitoring as well as reviewing and presenting various risk reports, policies and dashboards to RMC and Board.

The Risk Management Unit in the Bank is designed to establish an effective Enterprise Risk Management (ERM) framework for the Bank to ensure sustainable business growth with stability and to promote a proactive approach in identification, assessment, management and reporting of risks associated with business. The Risk Management Unit enables the Bank to successfully meet its business and financial goals, while maintaining effective Board and management oversight on Risk and Control parameters.

• Risk Appetite: The Bank’s Risk Appetite statement details the level of aggregate risk that the Bank is willing to undertake and successfully manage in pursuit of its business goals.

• Risk Management: The Bank follows a standardized methodology of identification and assessment of material risks, implementation of internal controls and mitigation measures, ongoing 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 tolerance, economic constraints, stakeholder needs and ensuring risk-based capital allocation and performance measurement.

LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to Section 186(11) of the Companies Act, 2013, loans made, guarantees given or securities provided or acquisition of securities by a Banking company in the ordinary course 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 including promoters, directors, key managerial personnel, subsidiaries or relatives of the Directors during the financial year which could lead to a potential conflict with the interest between the Bank and these parties. The details of the transactions with related parties, if any, were placed before the Audit Committee from time to time. There were no material individual transactions with related parties, which were not in the ordinary course of business of the Bank, nor were there any transactions with related parties, which were not on arm’s length basis. Accordingly the disclosure in Form AOC-2 is not applicable to the Bank for the year under review. Suitable disclosure as required by the Accounting Standards (AS-18) has been made in the notes to the Financial Statements.

Prior omnibus approval for normal banking transactions is also obtained from the Audit Committee for the related party transactions which are repetitive in nature as well as for the normal banking transactions which cannot be foreseen and accordingly the required disclosures are made to the Committee for their approval.

The policy on materiality of Related Party

Transactions and also on dealing with Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Bank and can be accessed at https://www.yesbank.in/about-us/corporate-governance.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129(3) of the Companies Act, 2013, a consolidated financial statement of the Bank along with its Subsidiaries i.e. YES Securities (India) Limited, YES Asset Management (India) Limited and YES Trustee Limited has been prepared in the same form and manner as that of the Bank which shall be laid before the ensuing AGM along with the laying of the Bank’s Financial Statement under Section 129(2) i.e. Standalone Financial Statement of the Bank.

Further, pursuant to the provisions of Accounting Standard (AS-21), the Consolidated Financial Statements notified under Section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 issued by the Ministry of Corporate Affairs, the Consolidated Financial Statements of the Bank along with its subsidiaries for the year ended March 31, 2019 forms part of the Annual Report.

INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY

The Bank has implemented adequate procedures and internal controls which provide reasonable assurance regarding reliability of financial reporting and preparation of financial statements. The Bank also ensures that internal controls are operating effectively.

AUDITORS

A. Statutory Auditors

The Members of the Bank at the 12th Annual General Meeting held on June 7, 2016, have approved the appointment of M/s. B S R & Co. LLP, Chartered Accountants as Statutory Auditors of the Bank for a period of four (4) years, subject to the approval of the RBI, to hold office from the conclusion of the 12th AGM till the conclusion of 16th AGM of the Bank to be held in the year 2020, subject to ratification of their appointment by the Members at every AGM. Accordingly, RBI had approved the appointment of M/s. B S R & Co., LLP as Statutory Auditors of the Bank for FY 2018-19, which was also ratified by the Shareholders in the 14th AGM of the Bank held on June 12, 2018.

Further, in terms of Companies (Amendment) Act, 2017 notified w.e.f May 7, 2018, the requirement of Section 139(1) of Companies Act, 2013 stands omitted and the ratification of appointment of the Statutory Auditor at every AGM is not required. The Bank has received the consent from the Auditors and confirmation to the effect that they are not disqualified to be appointed as the Auditors of the Bank in terms of the provisions of the Companies Act, 2013 and rules made thereunder. Accordingly, the Board of Directors has recommended to RBI to seek its approval for appointment of M/s. B S R & Co. LLP, Chartered Accountants as Statutory Auditors of the Bank for FY 2019-20.

The Report given by the Auditors on the financial statements of the Bank forms part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. Also, no offence of fraud was reported by the Auditors of the Bank.

B. Secretarial Auditors and Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, the Bank had appointed M/s. BNP & Associates, Practicing Company Secretaries, Mumbai as its Secretarial Auditors to conduct the secretarial audit of the Bank for the FY 2018-19. The Bank provided all assistance and facilities to the Secretarial Auditors for conducting their audit. The Report of Secretarial Auditors for the FY 2018-19 is annexed to this report as Annexure 2. There are no observations, reservations or adverse remarks in the Secretarial Audit Report.

BUSINESS RESPONSIBILITY REPORT

As stipulated in Listing Regulations, the Business Responsibility Report describing the initiatives undertaken by the Bank from environmental, social and governance perspective is attached as part of the Annual Report.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE BANK

There are no material changes and commitments, affecting the financial position of the Bank which has occurred between the end of the financial year of the Bank i.e. March 31, 2019 and the date of the Directors’ Report i.e. April 26, 2019.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Bank’s operation in future.

MAINTENANCE OF COST RECORDS

Being a Banking Company, the Bank is not required to maintain cost records as per sub-section (1) of Section 148 of the Companies Act, 2013.

POLICY ON APPOINTMENT OF DIRECTORS

The Board of Directors of the Bank had formulated and adopted policy on "Board Diversity and Fit & Proper Criteria and Succession Planning" for appointment of Directors on the Board of the Bank and succession planning. The details of the same have been included in the Report on Corporate Governance forming part of this Annual Report.

REMUNERATION POLICY

The Board of Directors of the Bank had formulated and adopted policies for Remuneration of Employees of the Bank, Remuneration of Directors including the Chairman of the Bank. The details of the same are made available on the Bank’s website and can be accessed at https://www.yesbank.in/about-us/corporate-governance.

EMPLOYEE REMUNERATION

(a) The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. In terms of Section 136 of the Companies Act, 2013, the same is open for inspection during working hours at the Registered Office of the Bank. A copy of this statement may be obtained by the Members by writing to the Company Secretary of the Bank.

(b) The ratio of the remuneration of each Director and employees of the Bank as required under the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure 3.

ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules,

2014, the Annual Return of the Bank as at March 31,2019 is uploaded on the website of the Bank and can be accessed at https://www.yesbank.in/about-us/corporate-governance

DISCLOSURES UNDER GREEN INFRA BONDS

Since the maiden issuance by YES BANK in 2015, Green Bonds have emerged as an innovative instrument for financing climate action in India. Over the past few years, the Green Bonds market has witnessed a steady growth and is currently pegged at over USD 7 billion. Green Bonds are playing a pivotal role towards the realization of ambitious climate targets that India pledged during Paris Accord in 2015. Driven by its commitment of mobilizing USD 5 billion towards climate action by 2020, as taken during Paris Accord, YES BANK has issued three green bonds:

• February 2015: YES BANK issued India’s first-ever Green Infrastructure Bonds, raising an amount of '10 billion. This 10 year tenor bond witnessed strong demand from leading investors including Insurance companies, Pension & Provident Funds, Foreign Portfolio Investors, New Pension Schemes and Mutual Funds.

• August 2015: YES BANK raised '3.15 billion through the issue of Green Infrastructure Bonds to International Finance Corporation on a private placement basis which 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 from the first Green Masala Bond program that aimed at raising capital in the offshore rupee market.

• December 2016: YES BANK has raised '3.30 billion, through an issue of a 7-year Green Infrastructure Bonds to FMO, the Dutch Development Bank, on a private placement basis. This is FMO’s first Investment in a Green Bond issued by a bank in India. FMO has paid for placement using the proceeds from their sustainability bonds issued in 2015.

The amount raised is used to finance Green Infrastructure Projects as per ‘Eligible Projects’ outlined in the Bank’s internal guidelines that are in adherence to the Green Bond Principles (GBP). For FY 2018-19, KPMG, India has provided limited assurance on conformity of the use of proceeds, process for evaluation and selection of projects, management of proceeds and reporting of these green bonds to GBP 2018.

The GBP are voluntary guidelines, developed by the International Capital Markets Association, for broad use by the market that recommend transparency and disclosure, and promote integrity in the development of the Green Bond market. They have the following four key components and the bank showcases its adoption below:

• Use of Proceeds: The proceeds raised by the Bank are used in eligible project categories and include all projects funded in whole, or in part, in the fields of renewable and clean energy projects including Wind, Solar, Biomass, Hydropower and other such projects.

• Process for Evaluation and Selection of Eligible Projects: The Bank’s process starts with interactions with potential borrowers to understand the overall aspects of the project and a preliminary confirmation against the eligibility criteria. The evaluation moves to risk assessment for confirmation of the eligibility, post which further documentation is sought as per the Bank’s policies and GBP.

• Management of Proceeds: Green Bond allocations to eligible projects are tracked by the Bank through an MIS based asset tagging system on a quarterly basis. The unallocated proceeds, if any, are placed in liquid instruments (Government Securities) on a quarterly basis.

• Reporting: The Bank’s communication to investors through an annual update includes:

• List of projects to which proceeds have been allocated to, with brief description including amounts disbursed, installed capacity

• Summary of Environment and Social (E&S) impacts associated with projects, if any

• Information on investment of unallocated proceeds in liquid instruments.

Impacts

Through financing solar and wind power plants, these bonds strengthen India’s energy security while reducing fossil fuel dependency. These bonds have been crucial in financing climate change mitigation with avoidance of emissions of CO2, SO2, NOX and other air pollutants associated with fossil fuel based energy generation. Estimated CO2 emission reductions are shared along with project details.

List of projects against which green bonds proceeds have been allocated as on March 31, 2019 is provided below: Proceeds Utilization* Against Bond Issuance Size of '1,000 crore (February 2015)

Sr. No. Project Location Description Total Fund Based Utilization, ' crore (as on March 31, 2018) Estimated** positive E&S impacts - CO2 Emissions Reduction (tCO2 / yr) Known significant negative E&S Impacts
1. Maharashtra 31.5 MW wind energy project 121.32 45,756.09 None
2. Andhra Pradesh 10 MW solar energy project 18.61 18,183.66 None
3. Madhya Pradesh 12 MW wind energy project 38.48 28,595.27 None
4. Karnataka 50 MW solar energy project 94.44 92,588.38 None
5. Telangana 15 MW solar energy project 9.29 20,945.42 None
6. Telangana 143 MW solar energy project 189.74 2,90,199.61 None
7. Telangana 15 MW solar energy project 9.29 11,731.39 None
8. Telangana 42 MW solar energy project 11.42 73,189.22 None
9. Rajasthan & Andhra Pradesh 155.4 MW wind energy project 231.20 2,55,734.57 None
10. Karnataka 40 MW solar energy project 174.92 83,390.64 None
11. Karnataka 21 MW wind energy project 56.57 48,758.60 None
12. Karnataka 32 MW solar energy project 48.25 63,870.91 None

Proceeds Utilization* Against Bond Issuance Size of '315 crore (August 2015)

Sr. No. Project Location Description Total Fund Based Utilization, 'crore (as on March 31, 2018) Estimated** positive E&S impacts - CO2 Emissions Reduction (tCO2 / yr) Known significant negative E&S Impacts
1. Andhra Pradesh 100 MW wind energy project 141.92 2,83,508.64 None
2. Telangana 30 MW solar energy project 89.72 52,278.02 None
3. Telengana 5 MW solar energy project 22.63 9,625.44 None

Proceeds Utilization* Against Bond Issuance Size of '330 crore (December 2016)

Sr. No. Project Location Description Total Fund Based Utilization, ' crore (as on March 31, 2018) Estimated** positive E&S impacts - CO2 Emissions Reduction (tCO2 / yr) Known significant negative E&S Impacts
1. Gujarat 30 MW wind energy project 40.87 68,677.52 None
2. Telangana 50 MW solar energy project 6.32 89,207.46 None
3. Karnataka 40 MW solar energy project 188.60 85,215.53 None
4 Rajasthan 300 MW solar energy project 111.85 4,52,391.80 None

* For the Green Bonds which have been fully utilized, the cumulative lending to the projects which received the proceeds may exceed the issuance size. The temporary unallocated proceeds f60.73 crore of '315 crore bond issued in August 2015) have been invested in Government Securities and will be allocated back to eligible projects, when available.

The assurance statement issued by KPMG India is attached as Annexure 4 to this report.

STATUTORY DISCLOSURES

The disclosures required to be made under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 on the conservation of energy, technology absorption and Foreign exchange earnings and outgo are given as under:

A. Conservation of Energy

I. The steps taken or impact on Conservation of Energy:

• The Bank has been migrating to LED lighting in phases. In present financial year we have replaced 3,592 LED units, which has a potential for annual energy saving of 20775 KW.

• The Bank is in the process of phasing out air-conditioning systems that use ozone depleting coolants, and in the current reporting cycle, the Bank has initiated the process to replace all air conditioners that are more than 10 years old with energy efficient (star rated) systems that use eco-friendly coolants and thus reducing its environmental footprint, which have potential saving of 10 to 15%.

• The Bank is in the process of phasing out signage’s using tube light with energy efficient LED’s which have potential saving of 20 to 25%. In FY 2018-19, it has been completed across 70 branches.

• YES BANK’s energy management initiatives aim at reducing 15-20% energy consumption by introducing Energy management system, wherein the consumption will be monitored centrally using IOT.

II. The steps taken by the Bank for utilizing alternate sources of Energy:

The Bank has explored the potential of using alternate sources of energy by installing 5KVA solar system at Pune Bundh garden branch, which has a potential to generate 7,200 units annually. The Bank would continue to explore alternative sources of energy in future.

III. The Capital Investment on Energy Conservation Equipments:

'4.25 crore spent in present financial year (including AC retrofitting, LED projects at corporate offices and branch locations).

B. Technology Absorption

I. Efforts Toward Technology Absorption

The advancements in Information Technology (IT) have led to accelerated development in newer technologies, resulting in higher demand for digital solutions to create alternative banking products that deliver customer delight through a better service delivery framework.

Since inception, YES BANK has been at the forefront of technology innovation and adoption, and will continue its focus on technology. This will enable the Bank to build a more secure, resilient, and seamless way of interacting and transacting for customers. It will further enforce YES BANK’s endeavors to become a technology-led company in the business of banking.

During FY 2018-19, several new initiatives were completed successfully, as well as systems were upgraded to latest versions to support the growing needs of the Bank. The key Bank-wide projects completed during FY 2018-19 were:

• Right Sourcing Strategy: YES BANK has successfully completed transitions of end user support system, IT infrastructure management and business applications maintenance, among others from total outsourcing arrangements to Right Sourcing operating model. This ensures retention of key technology talent and a more efficient use of partners. The model further entails the use of an optimal mix of insourcing and outsourcing of staff to support and maintain technology assets like business applications and IT infrastructure.

• YES RAPIDO: A truly modern, state-of-the-art, lightweight workflow management solution having a front-end using Progressive Web Apps has been implemented by the Bank. YES Rapido leverages the power of Cloud technologies like Kubernetes and micro services to make it one of the most agile and resilient technologies. This digital fabric solution will form a critical part of furthering digital transformation objectives of the Bank.

• YES Genie: YES Genie leverages the Bank’s efforts to consolidate all its customer data (transactions, interactions, behavioral attributes and so on) into the Big Data platform (Hadoop) as its Enterprise Datawarehouse technology. It is built using Modern Application Architecture (the state-of-the-art Microservice Mesh using Kubernetes, Google Istio and other latest technologies). As part of the first phase, YES Genie creates a single view of customers across all banking relationships with the Bank. Besides, it allows a call-to-action enablement to assist in delivering services.

• YES Bank Datathon: This initiative was launched with the objective of crowd sourcing ideas and building an augmented data science team for the Bank. In the first edition, YES BANK received an overwhelming response with over 6,000+ applications. The key outcomes of the YES BANK Datathon’s 1st edition were building data model prototypes for the Next Best Action model (predicting a next-best action of a

customer/user), Anomaly Detection model for POS terminals to ensure higher service levels and a Recommender model for relationship managers to identify priority customers.

• API Banking: YES BANK has undertaken tremendous strides to ensure a stronger connect with its customers and ensure a seamless experience when transacting and/ or making basic enquiries. Currently, it has more than 850 customers on API Banking and this continues to grow at a healthy pace. This product offering is replicated across Enterprise Technology Architecture and the API first’ philosophy is being imbibed by the Bank’s technology team.

• Awards and accolades: YES BANK won multiple awards at the prestigious Indian Banking Association Awards 2018-19. The Bank was recognized with - Best use of customercentric technology solution - Winner and Best Technology Bank 2019- Runner Up, Best use of Analytics for superior Customer experience - Runner Up.

II. Proposed New Projects

There is a healthy pipeline of exciting new initiatives, which will enable YES BANK to deliver world-class digital-first customer service in both assisted and self-help mode.

• Retail Net-Banking Upgrade: A completely refreshed and revamped Retail Net-Banking platform is expected to be launched in FY 2019-20. It has been built using state-of-

the-art security framework and using concepts of the Modern Technology architecture.

• Unified Cash Management and Corporate Net-Banking Solution: A robust Core System is critical to deliver a superior experience to all corporate customers of the Bank. The new solution will enable a more seamless and straight-through processed environment for customer transactions. This will also be scaled up further to ensure it promptly address the needs and expectations of customers and growing business volumes.

• Extend Cloud-based Use cases: YES BANK plans to use Cloud infrastructure extensively to ensure that the power of FutureTech is being leveraged across all levels of the Bank.

• Apollo Program for OSD Technology Transformation: With a vision to position YES BANK as the most ‘Customer Centric’ Bank in the services segment and focus on the end-to-end Operation Service Delivery (OSD) Technology Transformation with Digital Solutions, Apollo Program will review, reimagine and/or re-engineer every Business Operations Process, keeping customer at the forefront with the objective to ensure Efficiency, Productivity, Risk Management, and Compliance.

• Rural Retail Banking: The Bank is building a comprehensive mobility platform to create a paperless banking experience and become the preferred banker in rural and semi-urban geographies.

III. In case of Imported Technology (imported during the last three years reckoned from 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 and delivery of Branded Software Tokens Aug-14 Yes NA
Enabling Radius licenses for 10,000 concurrent users (SMS/E-mail, OATH, software tokens) on existing setup Sep-15 Yes NA
Master Data Management licenses Nov-15 Yes NA
Cisco Wan Stack for Branch WAN Architecture Revamp Dec-16 Yes NA
Upgradation of Murex 2.11 to Murex 3.1 Apr-17 Yes NA
Cisco CUCM Dec-17 Yes NA
Portwise Nexus Hybrid Access Gateway Oct-18 Yes NA
Palo Alto Firewall Feb-19 Yes NA

C. Foreign Exchange Earnings and Outgo

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows.

During the year ended March 31, 2019 the Bank earned '37,897.01 million and spent '17,396.41 million in foreign currency. This does not include foreign currency cash flows in derivatives and foreign currency exchange transactions.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirm that the Bank has complied with the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India (SS1 and SS2) respectively relating to Meetings of the Board, its Committees and the General Meetings.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Bank has Zero tolerance towards any act on the part of any executive which may fall under the ambit of ‘Sexual Harassment’ at workplace, and is fully committed to uphold and maintain the dignity of every women executive working in the Bank. The Policy regarding Prevention & Prohibition of Sexual Harassment at Workplace provides for protection against sexual harassment of women at workplace and for prevention and redressal of complaints. Also, in its endeavor to spread awareness on the aforementioned policy and ensure compliance by all the executives, the Bank has implemented a plan of action to disseminate the information and train the executives on the policy under the ambit of ‘Gender Respect and Commitment to Equality’ (GRACE) program.

The Bank has complied with provisions relating to the constitution of Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH).

Number of cases filed and their disposal under Section 22 of the POSH is as follows:

Particulars Numbers
Number of complaints pending as on the beginning of the financial year 1
Number of complaints filed during the financial year 10
Number of complaints pending as on the end of the financial year 2

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors, had laid down internal financial controls to be followed by the Bank and 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 of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGMENT

Your Directors take this opportunity to express their deep and sincere gratitude to the customers of the Bank for their confidence and patronage, as well as to the Reserve Bank of India, Securities and Exchange Board of India, Government of India, and other Regulatory Authorities for their cooperation, support and guidance. Your Directors would like to express a deep sense of appreciation for the commitment shown by the employees in supporting the Bank in its continued robust performance on all fronts. In the Bank’s 15th year of Institutional Excellence, the Directors would also like to thank all our valued partners, vendors and stakeholders who have played a significant role in the continued Business Excellence achieved by the Bank. Your Directors would also like to thank the employees for their continued support as the Bank evolves as the "Professionals’ Bank of India" with a vision of "BUILDING INDIA’s FINEST QUALITY LARGE BANK OF THE WORLD IN INDIA".

For and on behalf of the Board of Directors

Ravneet Singh Gill Brahm Dutt
Managing Director & CEO Chairman
(DIN: 00091746) (DIN: 05308908)
Place: Mumbai
Date: April 26, 2019