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Notes to Accounts of YES Bank Ltd.

Mar 31, 2023

III) Sales and transfers of securities to/from Held to Maturity (HTM) category

During the year ended March 31, 2023 and March 31, 2022, the Bank has not sold and transferred securities from HTM category exceeding 5% of the book value of investment held in HTM category at the beginning of the year. Hence, in line with RBI guidelines, specific disclosures on book value, market value, and provisions if any, relating to such sale and transfers are not made.

The 5% threshold referred to above does not include onetime transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks as per extant RBI guidelines, sale of securities under pre-announced Open Market Operation (OMO)/switch operations auction to the RBI and sale of securities or transfer to AFS / HFT consequent to the reduction of ceiling on SLR securities under HTM.

17.5.19 Disclosures on risk exposure in derivatives

As per RBI Master circular DOR.ACC.REC.No.45/21.04.018/2021-22 dated August 30, 2021, the following disclosures

are being made with respect to risk exposure in derivatives of the Bank:

a) Purpose: The Bank uses Derivatives including Forwards & swaps for various purposes including hedging its currency and interest rate risk in its balance sheet, customer offerings and proprietary trading. The management of these products and businesses is governed by Market Risk Policy, Investment Policy, Derivatives Policy, Derivatives Appropriate ness Policy, Hedging Policy and ALM policy.

b) Structure: The Board of Directors of the Bank have constituted a Board level sub-committee, the Risk Management Committee (''RMC'') and delegated to it all functions and responsibilities relating to the risk management policy of the Bank and its supervision thereof.

c) As part of prudent business and risk management practice, the Bank has also instituted a comprehensive limit and control structure encompassing Value-at-Risk (VAR), Sensitivity, Greeks, Stop loss & credit limits for derivative transactions including suitability and appropriateness framework. The Bank has an internal reporting mechanism providing regular reports to the RMC as well as to the management of the Bank. Such a structure helps the Bank to monitor and mitigate market risk across FX and interest rates.

d) The Bank has an independent Middle Office and Market Risk functions, which are responsible for monitoring, measurement, and analysis of derivative related risks, among others. The Bank has a Credit Risk Management unit which is responsible for setting up counterparty limits and also a treasury operation unit which is responsible for managing operational aspects of derivatives including settlement of transactions. The Bank is subject to a concurrent audit for all treasury transactions, including derivatives transactions, a monthly report of which is periodically submitted to the Audit & Compliance Committee of the Bank.

e) In addition to the above, the Bank independently evaluates the potential credit exposure on account of all derivative transactions, wherein risk limits are specified separately for each product, in terms of both credit exposure and tenor. As mandated by the Credit Policy of the Bank, the Bank has instituted an approval structure for all treasury/derivative related credit exposures. Wherever necessary, appropriate credit covenants are stipulated as trigger events to call for collaterals or terminate transaction and contain the risks.

f) The Bilateral Netting of Qualified Financial Contracts has been notified by the RBI through circular dated March 30, 2021. The Bank has computed capital adequacy as well as exposure on account of these contracts as per Current Exposure method considering each transaction as separate netting set on conservative basis. The Bank shall work progressively over the period on classification of multiple permissible transactions into a netting set which may result in reduction in capital requirement and exposure due to these transactions. There is no change in Current Exposure Method (CEM) computation for Non-Bilateral Counterparties & Quasi Central Counter Party (QCCP) trades.

g) The Bank reports all trading positions to the management on a daily basis. The Bank revalues its trading position on a daily basis for Management and Information System (''MIS'') and control purposes and records the same in the books of accounts on a monthly basis.

h) For derivative contracts in the banking book designated as hedge, the Bank documents at the inception of the relationship between the hedging instrument and the underlying exposure, the risk management objective for undertaking the hedge and the ALCO monitors all outstanding hedges on a periodical basis. Further the Bank''s ''Hedging Policy has stipulated conditions to ensure that the Hedges entered into are effective.

1) Denotes absolute value of loss which the Bank could suffer on account of a change in interest rates by 1% which however doesn''t capture the off-setting exposures between interest rate and currency derivatives.

2) PV01 exposures reported above may not necessarily indicate the interest rate risk the Bank is exposed to, given that PV01 exposures in Investments (which may offset the PV01 reflected above) do not form part of the above table.

3) The notional principal amount of foreign exchange contracts classified as trading at March 31, 2023 amounted to '' 2,856,151.13 million (previous year: '' 3,414,165.71 million). For these trading contracts, as at March 31, 2023, marked to market position was asset of '' 16,621.96 million (Previous year: '' 14,614.09 million) and liability of '' 18,478.52 million (Previous year: '' 16,937.80 million). The notional principal amount of foreign exchange contracts classified as hedging at March 31, 2023 amounted to '' 15,412.88 million (Previous year: '' 7,765.38 million). Credit exposure on forward exchange contracts at March 31, 2023 was '' 78,753.71 million (Previous year: '' 142,555.85 million) of which exposure on CCIL is '' 56,878.04 million (Previous year: '' 1,18,448.02 million).

17.5.21 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 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 condition mentioned in RBI circular, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI''s supervisory process for FY2022 and FY2021.

17.5.22 Disclosure as per requirement of Prudential Framework for Resolution of Stressed Assets

Details of Resolution Plan (RP) implemented during the year under Prudential Framework for Resolution of Stressed Assets dated June 07, 2019:

17.5.27 Non-performing financial assets purchased / sold from/to other banks/ Financial Institutions / NBFCs (excluding ARCs)

The Bank has not purchased/sold from/to other banks/Financial Institutions/NBFCs (excluding ARCs) during the year ended March 31,2023 and March 31, 2022.

17.5.28 Transfer of Loan Exposure

Details of loans transferred / acquired during the year ended March 31, 2023 under the RBI Master Direction on Transfer of Loan Exposures dated September 24, 2021 (as updated from time to time):

For stressed loans transferred to ARC for a consideration lower than the NBV at the time of transfer, the shortfall of '' 6,086.09 million to the Bank was debited to the Profit and Loss Account during the year ended March 31,2023 spread equally over the quarter ended December 31,2022 and the quarter ended March 31, 2023. The realized profit amounting to '' 5,113.81 million where the cash recovery was exceeding the net book value of stressed loans was credited to Profit and Loss Account in the quarter ended December 31,2022. For stressed loans where the consideration received was higher than that net book value at the time of transfer and the cash recovery is lower than the net book value, such excess amount of '' 31,613.38 million was not reversed in the Profit and Loss Account. The Bank has continued to carry forward the same as provision against these security receipts. In effect the Bank has reflected such sale in a manner that the value of security receipts is not higher than the net book value of the loans transferred to JC Flowers ARC. The same is being assessed for the provisioning requirements as per the extant RBI guidelines on each reporting date also taking into account the principle that there should be no provisioning arbitrage between the provisioning on Security Receipts vis-a-vis the provisioning requirements on the underlying exposure, had it stayed in the books.

17.5.34 Risk Category wise Country Exposure

As per the extant RBI guidelines, the country exposure (direct and indirect) of the Bank is categorized into various risk categories listed in the following table. As at March 31, 2023, the net funded country exposure (direct) of the Bank as a percentage of total funded assets for United States of America was 1.09% (for previous year March 31, 2022 United States of America was 1.19%). As the net funded exposure to United States of America exceeded 1.0% of total funded assets, the Bank held a provision of '' 102.0 million on country exposure (direct and indirect) at March 31, 2023 (March 31,2022: '' 103.9 million) based on RBI guidelines.

17.5.35 Details of factoring exposure

The factoring exposure of the Bank outstanding as at March 31, 2023 is '' 3,669.50 million (Previous year: '' 2,581.17 million).

Miscellaneous17.5.36 Disclosure on borrowing and lending activities

The Bank, as part of its normal banking business, grants loans and advances, makes investments, provides guarantees to and accept deposits and borrowings from its customers, other entities and persons. These transactions are part of the Bank''s normal banking business and are undertaken in accordance with the guidelines prescribed by the Reserve Bank of India.

Other than the transactions described above, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other persons or entities, including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in other persons or entities identified by or on behalf of the Bank (Ultimate Beneficiaries) or provide any guarantee, security or like on behalf of the Ultimate Beneficiaries.

The Bank has also not received any fund from any persons or entities, including foreign entities (''Funding Party'') with the understanding, whether recorded in writing or otherwise, that the Bank shall whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

The difference between weighted average number of equity shares outstanding between basic and diluted in the above mentioned disclosure is on account of outstanding ESOPs and share warrants convertible into equity shares.

Basic earnings per equity share has been computed by dividing net profit / (loss) for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share has been computed by dividing the net profit / (loss) for the year attributable to the equity shareholders by the weighted average number of equity shares and dilutive potential equity shares outstanding during the year, except where the results are anti-dilutive. The dilutive impact is on account of stock options granted to employees by the Bank and allotment of share warrants convertible into equity shares. There is no impact of dilution on the profits in the current year and previous year.

17.5.46 Repatriation of profits

The Bank has not repatriated any profit from overseas branch during the FY 2022-23 and FY 2021-22.

17.5.47 Sponsored SPVs

The Bank has not sponsored any SPV during FY 2022-23 and FY 2021-22 and hence there is no consolidation due to SPVs in Bank''s books.

17.5.48 Credit default swaps

The Bank has not transacted in credit default swaps during the year ended March 31, 2023 (previous year: ''Nil'').

The above information is as certified by the actuary and relied upon by the auditors.

National Pension Scheme

The Bank has contributed '' 53.47 million for the year ended March 31,2023 (March 31, 2022: '' 39.12 million) to NPS for employees who had opted for the scheme. The Bank has no liability for future fund benefits other than its annual contribution for the employees who agree to contribute to the scheme.

Provident Fund (PF)

The Bank has recognised in the profit and loss account '' 1,187.74 million for the year ended March 31, 2023 (March 31,2022: '' 1,019.73 million) towards contribution to the provident fund.

Compensated absences

The Bank has recognised '' 47.31 million in the profit and loss account for the year ended March 31, 2023 (March 31,2022: '' 76.61 million) towards compensated absences.

Pursuant to the guidelines issued by RBI on AS-17 (Segment Reporting) - Enhancement of Disclosures dated April 18,

2007, effective from period ending March 31,2008, the following business segments have been reported.

• Treasury: Includes investments, all financial markets activities undertaken on behalf of the Bank''s customers, proprietary trading, maintenance of reserve requirements and resource mobilisation from other banks and financial institutions.

• Corporate / Wholesale Banking: Includes lending, deposit taking and other services offered to corporate customers.

• Retail Banking: Includes lending, deposit taking and other services offered to retail customers. RBI in its Circular DOR.AUT.REC.12/22.01.001/2022-23 dated April 7, 2022, for the purpose of disclosure under Accounting Standard 17, Segment Reporting, has identified ''Digital Banking'' as a sub-segment under Retail Banking. During the year ended March 31,2023, a Digital Banking Unit (DBU) of the Bank has commenced its operations. The Bank has presented segment results pertaining to the said DBU of the Bank in sub-segment ''Digital Banking'' of Retail banking segment for the year ended March 31,2023. Comparative presentation of segmental results of sub-segment ''Digital Banking'' for the year ended March 31,2022 is not applicable.

Other banking operations includes income from bancassurance business '' 1,785.54 million during year ended

March 31,2022.

Notes for segment reporting:

1. The business of the Bank is concentrated largely in India. Accordingly, geographical segment results have not been reported in accordance with AS-17 (Segment Reporting).

2. In computing the above information, certain estimates and assumptions have been made by the Management and have been relied upon by the auditors.

3. Income, expense, assets and liabilities have been either specifically identified with individual segment or allocated to segments on a systematic basis or classified as unallocated.

4. The unallocated assets Includes tax paid in advance/tax deducted at source and deferred tax asset.

5. The unallocated liabilities include Share Capital and Reserves & Surplus.

6. Inter-segment transactions have been generally based on transfer pricing measures as determined by the Management.

The deferred tax asset of '' 89,411.54 million as at March 31, 2023 and '' 91,842.08 million as at March 31, 2022, is included under other assets and the corresponding credits have been taken to the profit and loss account.

During the year ended March 31, 2023, the Bank has reported net profit of '' 7,174.09 million. The Bank continues to carry such deferred tax asset in its Balance Sheet, as basis financial projections approved by the management, there is reasonable certainty of having sufficient taxable income to enable realisation of the said deferred tax asset as specified in Accounting Standard 22 (Accounting for Taxes on Income). The Bank has opted to exercise the option permitted under section 115BAA of the Income-tax Act, 1961. Accordingly, the Bank has recognised Provision for Income Tax basis the rate prescribed in the aforesaid section.

17.5.54 Related Party Disclosures

The Bank has transactions with its related parties comprising of subsidiary, key management personnel and the relatives of key management personnel.

As per AS 18 "Related Party Disclosures", notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014, the Bank''s related parties for the year ended March 31, 2023 are disclosed below:

Subsidiary

• YES Securities (India) Limited

Individuals having significant influence & Key Management Personnel (''KMP'') (Whole time Directors) and their relatives (to the extent transactions made):

• Mr. Prashant Kumar, Managing Director & CEO Relative - Neelam Agarwal

• Mr. Rajan Pental, Executive Director (Appointed with effect from February 02, 2023)

Relatives - Anju Pental, Aryan Pental, Shreya Pental, Jyoti Walia, Sangeeta Rajpal

Investing Company

• State Bank of India Limited (SBI)

Values of the related party transactions during the reporting period and their balances containing amounts below '' 10,000 are denoted as ''0.00''.

During the year ended March 31, 2023, the Bank has contributed ''Nil'' to YES Foundation. YES Foundation is public charitable trust which undertakes social charitable activities.

Lease payments recognized in the profit and loss account for the year ended March 31,2023 was '' 3,693.83 million (Previous year: '' 3,378.62 million). During the year ended March 31, 2023, the Bank paid minimum lease payment '' 3,394.50 million (Previous year: '' 3,335.19 million).

The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.

There are no undue restrictions or onerous clauses in the agreements.

17.5.56 ESOP disclosures

The Bank has following Employee Stock Option Plans Schemes in operation viz:

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

(ii) YBL Employee Stock Option Scheme, 2020 (YBL ESOS 2020) which is consisting of YBL Joining Employee Stock Option Plan, 2018 (JESOP 2018), YBL Performance Employee Stock Option Plan, 2018 (PESOP 2018), YBL Performance Employee Stock Option Plan, 2020 (PESOP 2020) and YBL MD&CEO Stock Option Plan, 2020 (MD&CEO Plan 2020). Effective September 10, 2020 nomenclature of the scheme was changed from YBL ESOS -2018 to YBL ESOS -2020 and all the plans under the said scheme continue to be valid. All new options have been granted under the YBL ESOS 2020 (which inter-alia consist of JESOP 2018, PESOP 2018, PESOP 2020 and MD & CEO Plan 2020. YBL ESOS 2020 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.

Grants under JESOP V/ PESOP II -2010 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.

The Bank has changed its accounting policy from the intrinsic value method to the fair value method for all share-linked instruments granted beginning from April 01,2021. The fair value of the stock-based compensation is estimated on the date of grant using Black-Scholes model and is recognized as compensation expense over the vesting period. As a result, ''Employees cost'' for the year ended March 31,2023 is '' 216.26 million and '' 82.42 million for the year ended March 31, 2022. The Bank has adopted the Fair Value method (based on Black- Scholes pricing model), for pricing and accounting of options for the year ended March 31, 2023. If the Bank had adopted the Fair Value for all the options granted till March 31, 2021, the net profit after tax would have been lower by '' 53.24 million (the net profit after tax would have been lower by '' 175.95 million in previous year), There will be no impact on the basic earnings per share and diluted earnings per share i.e. '' 0.27 per share (Previous year: '' 0.42 per share instead of '' 0.43 per share) due to the impact of the aforesaid mentioned difference between the Intrinsic Value of the Options and the Fair Value of the Options.

The roles and responsibilities of the N&RC are as under-

1) To review the current Board composition, its governance framework and determine future requirements and making recommendations to the Board for approval;

2) To examine the qualification, knowledge, skill sets and experience of each director vis-a- vis the Bank''s requirements and their effectiveness to the Board on a yearly basis and accordingly recommend to the Board for the induction of new Directors;

3) To scrutinize nominations for Directors with reference to their qualifications and experience and making recommendations to the Board for appointment/filling of vacancies;

4) To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal;

5) To formulate performance evaluation framework of Individual Directors (including Chairperson, Managing Director & CEO, Executive Directors, Independent Directors, Non-Independent Directors), Board as a whole and Board level Committees;

6) To review the implementation of performance evaluation framework and its compliance;

7) To evaluate Whether to extend or continue the term of appointment of the independent director on the basis of report of performance evaluation of independent directors;

8) To validate ''fit and proper'' status of all Directors on the Board of the Bank in terms of the Guidelines issued by the RBI or other regulatory authorities;

9) To develop and recommend to the Board Corporate Governance guidelines applicable to the Bank for incorporating best practices;

10) To implement policies and processes relating to Corporate Governance principles;

11) To formulate the criteria for determining qualifications, positive attributes and independence of a director;

12) To evaluate the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an independent director. The person recommended to the Board for appointment as an independent director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Committee may:

(a) use the services of an external agencies, if required;

(b) consider candidates from a wide range of backgrounds, having due regard to diversity; and

(c) consider the time commitments of the candidates.

13) To devise a Policy on Board diversity;

14) To recommend to the Board a policy relating to, the remuneration for the directors, key managerial personnel and other employees including performance/achievement bonus, perquisites, retirals, sitting fee, etc.;

15) To review the Bank''s overall compensation structure and related polices with a view to attract, motivate and retain employees and review compensation levels vis-a-vis other Banks and the industry in general;

16) To ensure the following while formulating the policy on the below matters:

(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors, key managerial personnel and senior management of the quality required to run the Company successfully;

(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks;

(c) remuneration to Whole time directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long- term performance objectives appropriate to the working of the Company and its goals ; and

17) To recommend to the Board all remuneration, in whatever form, payable to senior management.

18) To formulate detailed terms and conditions of the Employee Stock Option Schemes and to adopt, administer, enforce, modify and supervise the same;

19) To function as the Compensation Committee as prescribed under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and to consider grant of stock options to employees and allot shares pursuant to exercise of Stock Options by employees;

20) To review the Human Capital Capacity Planning on annual basis;

21) To review the Succession Planning;

22) To review the HCM Policies and provide suitable guidance for additions/ modification/ deletions, if any;

23) To approve the appointment of Chief Human Resources Officer;

24) To approve the appointment of Chief Financial Officer and Company Secretary;

25) To approve the hiring requisition for any new position as MD&CEO Direct Reports

26) To perform any other functions or duties as stipulated by the Companies Act, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges and any other regulatory authority or under any applicable laws as may be prescribed from time to time.

(b) Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy.

The design and structure of remuneration process for MD & CEO/ WTDs/ MRTs is in line with the guidelines stated in the RBI circular dated 04 November 2019 (Ref. RBI/2019-20/89, DOR.APPT. BC. No. 23/29.67.001/2019-20). The remuneration for MD & CEO/ WTDs/ MRTs is adjusted for all types of risk, symmetrical with risk outcomes as well as sensitive to the time horizon of risk. Further, the compensation in all forms is consistent with the risk alignment taking into account the adherence to statutory requirements and industry practices.

The Compensation components comprise the following:

i. Fixed Pay and perquisites: Fixed Compensation includes components as Basic Salary, Supplementary Allowance, Superannuation/ retirals and the perquisites including monetary value of reimbursements which have a monetary ceiling.

ii. Variable Pay: The Variable Pay for MD & CEO/ WTDs/ MRTs comprises Performance Bonus and Share Linked Instrument. The proportion of Variable pay to the remuneration, the composition of variable pay between Performance Bonus and Share Linked Instruments, and the deferral arrangements for payment are in line with the RBI Guidelines.

An overview of the key features and objectives of remuneration policy -

The Bank''s Human Capital philosophy focuses on acquiring top quality Human Capital and empowering them to push

their boundaries beyond their comfort zones, inculcating the right mind-set based on a deep sense of organizational

commitment and ownership. This promotes a deepening of the mind share of stakeholders through superior

outcomes which in turn enhances the market share and drives sustainable growth.

In line with the above, the "Total Rewards Policy" of the Bank has the following objectives:

• Attracting and retaining top class talent

• Creating and reinforcing a strong meritocracy-based performance culture

• Reinforcing employee behaviors aligned with organizational values, which include adherence to the best Governance practices, prudent risk taking and delivering superior outcomes to stakeholders

(c) Description of the ways in which current and future risks are taken into account in the remuneration processes. It should include the nature and type of the key measures used to take account of these risks.

Our current remuneration process/ Policy considers the current and future risks in the following steps:

1. Defined Performance measures of each employee in accordance with overall target of their operating units, which is determined basis the stated risk appetite of the Bank and reflects the applicable Risk profile and tolerance.

2. Defined Key Performance Indicators (KPI) which comprise factors such as Risk Management, Superior & Consistent customer service, Cost Management, Strengthening Systems, Controls & Processes and Human Capital Development. Thus, the performance assessment is an outcome of measuring the performance holistically.

3. A significant portion of remuneration for Senior Executives of the Bank is the Variable Pay and it is dependent on the performance of Bank, Business Unit and the Individual. The Bank''s Variable Pay Program rewards employees on both short-term and long-term basis. There is a direct correlation between the quantum of Variable Pay payout and level of risk exposure and level and role of an employee in the organization.

4. To assess and incorporate the future risk, deferral arrangements have been incorporated for the payout of Variable Pay, where a certain proportion of Variable Pay (Cash and Non-Cash) is deferred over a period of time for the Senior Executives of the Bank. The Bank assesses through the Business Unit Head/ Risk/ Compliance/ Audit/ Finance function for any adverse outcomes in the case of organizational or business unit or individual level prior to the payment of the deferred portion.

5. In the event of a negative contribution or adverse outcomes, deferred compensation is subject to appropriate malus/claw-back arrangements as decided by the Board Remuneration Committee.

(d) Description of the ways in which the Bank seeks to link performance during a performance measurement period with levels of remuneration.

The Bank''s performance management process and compensation philosophies are structured to support the achievement of the Bank''s Key Strategic Objectives (KSO) such as Governance Compliance, Liability Generation, Cost Management, Customer service, Strengthening Systems, Controls & Processes and Human Capital Development. The Bank has a comprehensive process towards defining measurable Key Performance Indicators (KPIs) for MD & CEO/ WTDs/ MRTs, which are set against the financial and non-financial KSOs of the Bank, and the goals framed for the performance year have a linkage with these KSOs. The targets for these are determined at the Bank, Business Unit and Individual level. Achievement of targets is assessed during the Annual Performance Review and the performance assessment outcomes have an impact on the remuneration.

(e) A discussion of the Bank''s policy on deferral and vesting of variable remuneration and a discussion of the Bank''s policy and criteria for adjusting deferred remuneration before vesting and after vesting.

The variable remuneration (cash and non-cash), above certain threshold, for the Senior Executives of the Bank is subject to a deferral arrangement as per the RBI guidelines. An assessment of individual/ Business Unit/ Bank performance as well as identification of cases with negative or adverse outcomes is done prior to payout of the deferred component. The payment of the same is subject to malus and claw-back clauses defined in the Bank''s Total Rewards Policy.

(f) Description of the different forms of variable remuneration (i.e., cash and types of share-linked instruments) that the bank utilizes and the rationale for using these different forms.

In line with the guidelines in the RBI circular, Variable Remuneration for MD & CEO/ WTDs/ MRTs at YES BANK comprise Performance Bonus Plan and Share Linked Instruments as prescribed in the guidelines.

For Senior and Top management employees (other than MRTs) at Bank, the variable remuneration includes Performance Bonus and Share Linked Instruments.

For the rest of employees at Bank, the variable remuneration includes, Performance Bonus or Sales Incentives. Additionally, remuneration of select employees in Middle management also includes Share Linked Instruments.

(g) There were 11 meetings of the N&RC held during the year ended March 31, 2023 (Previous year: 10 meetings). The Bank had paid a remuneration of '' 2.45 million to the members of the N&RC for attending the meetings of the N&RC (Previous year: '' 1.9 million).

17.5.58 Movement in Floating Provisions

The Bank has not created or utilized any floating provisions during the financial year ended March 31,2023 (Previous year: '' ''Nil'').

17.5.59 Drawdown from Reserves

During the financial year ended March 31, 2023, the Bank has not drawn down any reserve. (Previous year: '' ''Nil'').

Qualitative Disclosure:

Liquidity Coverage Ratio (LCR) is one of the key reforms adopted by RBI to develop a more resilient banking sector.

LCR indicates the bank''s ability to meet proportion of the Bank''s liquidity needs under a 30 day stress period as assessed based on regulatory guidelines with the High Quality Liquid Assets (HQLA) maintained by the Bank. As per the regulatory guidelines, Banks are required to maintain minimum LCR at 100% i.e. maintain HQLA of a minimum 100% for Net Cash Outflows as assessed based on the regulatory guidelines.

The Bank has implemented robust process to compute and report the LCR in line with regulatory guidelines and is monitored at consolidated level. Further, the Bank also monitors its liquidity requirements in USD.

The Bank segregates its deposits into various customer segments, viz. Retail (which include deposits from individuals), Small Business Customers (those with deposits up to '' 7.5 crore) and Wholesale Customers to determine the cash outflows for LCR. Within Wholesale, deposits on account of Operational activity by the customers through clearing, custody, and cash management services of the Bank are classified as Operational Deposits. Non-Operational Deposits from wholesale customers are further segregated within Non-Financial Corporates and Others to compute the corresponding Cash Outflow for LCR. The Bank also includes other contractual funding including a portion of other liabilities which are expected to run down in a 30-day time frame in the cash outflows. These classifications, based on regulatory guidelines, are part of the Bank''s LCR framework. Expected derivative cash outflows and inflows from outstanding contracts are considered for computation of Net Cash Outflow. The Bank considers the other expected inflows in next 30 days as prescribed in the regulatory guidelines to compute the Net Cash Outflows for LCR.

HQLA maintained by the Bank primarily comprises of cash reserves in excess of required CRR, Government Securities i.e., Treasury Bills, dated securities issued by the Central & State Government along with eligible Corporate Bonds & Commercial Papers that qualify as Level 2 HQLA. Further, securities forming part of HQLA maintained by the Bank is well diversified across various marketable instruments, which shall provide the Bank adequate and timely liquidity to meet the Net Cash Outflow as & when required.

The Bank endeavors to meet the LCR requirement and adequacy of LCR remains a conscious strategy of the Bank. The Bank has placed stringent threshold as risk appetite for maintenance of LCR to maintain sufficient liquidity and compliance to LCR on an ongoing basis.

The Board of Directors of the Bank has empowered the Asset Liability Management Committee i.e. ALCO (Top Management Executive Committee) to monitor and strategize the Balance Sheet profile of the Bank within overall Board approved Strategic and Risk framework. In line with the business strategy, ALCO forms an Interest Rate/Liquidity view for the bank with the help of the economic analysis. ALCO of the Bank channelizes various business segments of the Bank to target good quality asset and liability profile to achieve an optimal funding mix which is consistent with prudent liquidity, diversity of sources and servicing costs and meet the Bank''s profitability as well as Liquidity requirements with the help of robust MIS and Risk Limit architecture of the Bank. BSMG (Balance Sheet Management Group) of the Bank estimates daily liquidity requirement of the various business segments and manages the same on consolidated basis as per ALCO guidance.

The daily average LCR for the quarter ending March 31, 2023 is 120.12% (for the quarter ending March 31,2022 was 114.99 %), which is well above the prudential requirement of 100%

Qualitative Disclosure:

The Basel Committee on Banking Supervision (BCBS) proposed reforms to strengthen global capital and liquidity regulations with the objective of promoting a more resilient banking sector in the backdrop of global financial crisis in 2007. Net Stable Funding Ratio (NSFR) was one of the important reform proposed in order to ensure resilience of the Banks over a longer term and stable liabilities to fund their business activities. NSFR was subsequently prescribed by the RBI to enhance resilience of the Indian Banking system.

NSFR ensures that the bank has sufficient stable funding available to fulfill the funding requirements by restricting the reliance on unstable short-term funding to finance potentially illiquid long-term assets. NSFR reduces long-term refinancing risk over longer-term time horizon (over 1 year) of the Bank by measuring the extent of stable sources of funds with the Bank to fund its long term assets.

Net Stable Funding Ratio (NSFR) is defined as amount of Available Stable Funding (ASF) to fulfil the amount of Required Stable Funding (RSF).

s Available stable funding (ASF) is defined as the portion of capital and liabilities expected to be reliable over 1 year period. The amount of available stable funding is a function of the source and type of liability along with residual maturities of the various liabilities.

s Required stable funding (RSF) is defined as the funding required for assets and off-balance sheet exposures over 1 year period. The amount of required stable funding is a function of the underlying liquidity characteristics and residual maturities of the various assets.

NSFR was implemented w.e.f. October 01, 2021 by the RBI with stipulation of minimum NSFR maintenance at 100%.

The Bank has implemented robust process to compute and report the NSFR in line with regulatory guidelines and is monitored at consolidated level. The Bank endeavors to meet the NSFR requirement and adequacy of NSFR remains a conscious strategy of the Bank. The Bank has placed stringent threshold as risk appetite for maintenance of NSFR to maintain sufficient liquidity and compliance to NSFR on an ongoing basis.

The Board of Directors of the Bank have empowered Asset Liability Management Committee i.e. ALCO (Top Management Executive Committee) to monitor and strategize the Balance Sheet profile of the Bank within overall Board approved Strategic and Risk framework. In line with the business strategy, ALCO forms an Interest Rate/Liquidity view for the bank with the help of the economic analysis. ALCO of the Bank channelizes various business segments of the Bank to target good quality asset and liability profile to achieve an optimal funding mix which is consistent with prudent liquidity, diversity of sources and servicing costs and meet the Bank''s profitability as well as Liquidity requirements with the help of robust MIS and Risk Limit architecture of the Bank. BSMG (Balance Sheet Management Group) of the Bank estimates daily liquidity requirement of the various business segments and manages the same on consolidated basis as per ALCO guidance.

NSFR as at March 31,2023 is 109.95% (as at March 31,2022 was 119.15%), which is well above the minimum regulatory requirement of 100%.

17.5.64 Investor Education and Protection Fund

The unclaimed dividend amount due to be transferred to the Investor Education and Protection Fund (IEPF) during the year ended March 31,2023 and year ended March 31, 2022 has been transferred without any delay.

17.5.65 Marketing and distribution

The Bank has received a fee of '' 1,489.13 million in respect of the marketing and distribution function (excluding bancassurance business) during the year ended March 31, 2023 (Previous year: '' 1,370.70 million).

17.5.66 Implementation of IFRS converged Indian Accounting Standards (Ind AS)

The Indian Accounting Standards (''Ind AS''), as notified under section 133 of the Companies Act 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time, have been formulated keeping the Indian economic and legal environment in view and with a view to converge with IFRS Standards. The RBI through its notification No. RBI/2018-2019/146 DBR.BP.BC. No.29/21.07.001/ 2018-19 dated March 22, 2019 on "Deferral of Implementation of Indian Accounting Standards (Ind AS)" notified to all the scheduled commercial banks that legislative amendments recommended by the RBI are under consideration of the Government of India. Accordingly, RBI has decided to defer the implementation of Ind AS till further notice.

As per RBI directions, the Bank has taken following steps so far:

• The Bank is submitting half yearly Proforma Ind AS financial statements to the RBI

• Formed Steering Committee for Ind AS implementation (''the Ind AS Steering Committee''). The Ind AS Steering Committee comprises Group Chief Financial Officer (CFO) (Chairman), Chief Risk Officer (CRO), Chief Operating Officer (COO), Chief Information Officer (CIO) and members of the Senior Management from Financial Management, Risk Control and Treasury Operations. The Ind AS Steering Committee oversees the progress of Ind AS implementation in the Bank and provides guidance on critical aspects of the implementation such as Ind AS technical requirements, systems and processes, business impact, people and project management. The Ind AS Steering Committee closely reviews progress of the implementation.

• The Ind AS Steering Committee gives updates to the Audit Committee of the Board and to the Board on preparedness for migration to Ind AS on a periodic basis.

17.5.68 Unhedged Foreign Currency Exposure of Bank''s Customer

The Bank has in place a policy on managing credit risk arising out of unhedged foreign currency exposures of its borrowers. The objective of this policy is to maximize the hedging on foreign currency exposures of borrowers by reviewing their foreign currency product portfolio and encouraging them to hedge the unhedged portion. In line with the policy, assessment of unhedged foreign currency exposure is a part of assessment of borrowers and is undertaken while proposing limits or at the review stage. Additionally, at the time of sanctioning limits for all clients, the Bank stipulates a limit on the unhedged foreign currency exposure of the client (as a % of total foreign currency exposure sanctioned by the Bank) after considering factors such as internal rating of the borrower, size, possibility of natural hedging, sophistication of borrower and maturity of borrower''s financial systems, relative size of unhedged foreign currency exposure with respect to total borrowings of the client, etc. Further, the Bank reviews the unhedged foreign currency exposure across its portfolio on a periodic basis. The Bank also maintains incremental provision and capital towards the unhedged foreign currency exposures of its borrowers in line with the extant RBI guidelines.

The Bank has maintained provision of '' 912.37 million (previous year of '' 850.90 million) and additional capital of '' 2,876.74 million (previous year of '' 2,199.25 million) on account of Unhedged Foreign Currency Exposure of its borrowers as at March 31, 2023.

17.5.71 Dues to Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been '' 803.62 million (previous year '' 1,046.93 million) worth bills which were paid with delays to micro and small enterprises. There have been '' 2.84 million worth bills remained unpaid with delays as at March 31,2023 (Previous year: '' 17.42 million). There have been no demand of interest on these payments.

The above is based on the information available with the Bank which has been relied upon by the auditors.

17.5.72 Securitization Transactions (separate table if there is any securitized transactions)

The Bank has not done any securitization transactions during the year ended March 31, 2023 and March 31, 2022. Hence requirement of master direction of Securitisation of Standard Assets dated September 24, 2021 is not applicable.

Prior period comparatives

Previous year''s figures have been regrouped where necessary to conform to current year classification.


Mar 31, 2022

Sales and transfers of securities to/from Held to Maturity (HTM) category

During the year ended March 31, 2022, the Bank has not sold and transferred securities from HTM category exceeding 5% of the book value of investment held in HTM category at the beginning of the year. The book value of HTM investment sold exceeding 5%, during the year ended March 31, 2022 was '' Nil. Hence, in line with RBI guidelines, specific disclosures on book value, market value, and provisions if any, relating to such sale and transfers are not made.

During the year ended March 31,2021, the Bank has sold and transferred securities from HTM category exceeding 5% of the book value of investment held in HTM category at the beginning of the year. The book value of HTM investment sold during the year ended March 31, 2021 was '' 87,170.72 million. The market value of investments (excluding investments in subsidiaries) under HTM category was ''300,195.82 million and was higher than the book value thereof as at March 31, 2021.

The 5% threshold referred to above does not include onetime transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks as per extant RBI guidelines, sale of securities under pre-announced Open Market Operation (OMO)/switch operations auction to the RBI and sale of securities or transfer to AFS / HFT consequent to the reduction of ceiling on SLR securities under HTM.

17.5.17 Currency Futures

The Bank had dealt in exchange traded currency forwards (Futures) during the financial year ended March 31, 2022 and

March 31,2021. As at March 31,2022, the open contracts on the exchange were ''4.26 million and at March 31,2021 the

open contracts on the exchange were ''Nil''.

17.5.18 Disclosures on risk exposure in derivatives

As per RBI Master circular DOR.ACC.REC.No.45/21.04.018/2021-22 dated August 30, 2021, the following disclosures

are being made with respect to risk exposure in derivatives of the Bank:

a) Purpose: The Bank uses Derivatives including Forwards & swaps for various purposes including hedging its currency and interest rate risk in its balance sheet, customer offerings and proprietary trading. The management of these products and businesses is governed by Market Risk Policy, Investment Policy, Derivatives Policy, Derivatives Appropriate ness Policy, Hedging Policy and ALM policy.

b) Structure: The Board of Directors of the Bank have constituted a Board level sub-committee, the Risk Management Committee (''RMC'') and delegated to it all functions and responsibilities relating to the risk management policy of the Bank and its supervision thereof.

c) As part of prudent business and risk management practice, the Bank has also instituted a comprehensive limit and control structure encompassing Value-at-Risk (VAR), Sensitivity, Greeks, Stop loss & credit limits for derivative transactions including suitability and appropriateness framework. The Bank has an internal reporting mechanism providing regular reports to the RMC as well as to the management of the Bank. Such a structure helps the Bank to monitor and mitigate market risk across FX and interest rates.

d) The Bank has an independent Middle Office and Market Risk functions, which are responsible for monitoring, measurement, and analysis of derivative related risks, among others. The Bank has a Credit Risk Management unit which is responsible for setting up counterparty limits and also a treasury operation unit which is responsible for managing operational aspects of derivatives including settlement of transactions. The Bank is subject to a concurrent audit for all treasury transactions, including derivatives transactions, a monthly report of which is periodically submitted to the Audit & Compliance Committee of the Bank.

e) In addition to the above, the Bank independently evaluates the potential credit exposure on account of all derivative transactions, wherein risk limits are specified separately for each product, in terms of both credit exposure and tenor. As mandated by the Credit Policy of the Bank, the Bank has instituted an approval structure for all treasury/derivative related credit exposures. Wherever necessary, appropriate credit covenants are stipulated as trigger events to call for collaterals or terminate transaction and contain the risks.

f) The Bilateral Netting of Qualified Financial Contracts has been notified by the RBI through circular dated March 30, 2021. The Bank has computed capital adequacy as well as exposure on account of these contracts as per Current Exposure method considering each transaction as separate netting set on conservative basis. The Bank shall work progressively over the period on classification of multiple permissible transactions into a netting set which may result in reduction in capital requirement and exposure due to these transactions.

g) The Bank reports all trading positions to the management on a daily basis. The Bank revalues its trading position on a daily basis for Management and Information System (''MIS'') and control purposes and records the same in the books of account on a monthly basis.

h) For derivative contracts in the banking book designated as hedge, the Bank documents at the inception of the relationship between the hedging instrument and the underlying exposure, the risk management objective for undertaking the hedge and the ALCO monitors all outstanding hedges on a periodical basis. Further the Bank''s ''Hedging Policy'' has stipulated conditions to ensure that the Hedges entered into are effective.

1. Denotes absolute value of loss which the Bank could suffer on account of a change in interest rates by 1% which however doesn''t capture the off-setting exposures between interest rate and currency derivatives.

2. PV01 exposures reported above may not necessarily indicate the interest rate risk the Bank is exposed to, given that PV01 exposures in Investments (which may offset the PV01 reflected above) do not form part of the above table.

3. The notional principal amount of foreign exchange contracts classified as trading at March 31, 2022 amounted to ?3,414,165.71 million (previous year: ?2,004,598.80 million). For these trading contracts, as on March 31, 2022, marked to market position was asset of ?14,614.09 million (Previous year: ?10,075.82 million) and liability of ?16,937.80 million (Previous Year: ?10,163.47 million). The notional principal amount of foreign exchange contracts classified as hedging at March 31, 2022 amounted to ?7,765.38 million (previous year: ?16,792.97 million). Credit exposure on forward exchange contracts at March 31, 2022 was ?142,555.85 million (Previous Year: ?58,733.82 million) of which exposure on CCIL is '' 1,18,448.02 million (Previous Year: ?40,822.85 million).

17.5.20 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 01, 2019 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 condition mentioned in RBI circular, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI''s supervisory process for FY 2020 and FY 2021.

17.5.21 Disclosure as per requirement of Prudential Framework for Resolution of Stressed Assets17.5.27 Disclosure under COVID-19 Regulatory Package

The outbreak of the COVID-19 pandemic had led to a nation-wide lockdown in April-May 2020. This was followed by localized lockdowns in areas with a significant number of COVID-19 cases. In FY2022, India witnessed two more waves of the COVID-19 pandemic and the re-imposition of localised/regional lock-down measures in certain parts of the country. Currently, while the number of new COVID-19 cases have reduced significantly and the Government of India has withdrawn most of the COVID-19 related restrictions, however, the extent to which the COVID-19 pandemic will continue to impact the Bank''s results will depend on ongoing as well as future developments, which are uncertain.

FY 2020-21

As per requirement of RBI circular RBI/2019-20/220 DOR.No.BP.BC.63/21.04.048/2019-20 dated April 17, 2020 on COVID-19 Regulatory Package - Asset Classification and Provisioning, below mentioned are details of where moratorium / deferment was extended as of March 31, 2020 and corresponding position as of March 31, 2021 as per above circular.

RBI issued guidelines on COVID-19 Regulatory Packages under which, the Bank granted a moratorium of three months (further extended by three months) on the payment of all instalments and / or interest, as applicable, falling due between March 1, 2020 and August 31, 2020. For all such accounts where the moratorium was granted, the asset classification remained stand still during the moratorium period (i.e. the number of days past-due shall exclude the moratorium period for the purposes of asset classification under the Income Recognition, Asset Classification and Provisioning norms) and the same had been retained based on the overdue status as at February 29, 2020.

Asset Classification and Income Recognition following the expiry of COVID-19 regulatory package:

In accordance with the instructions in the RBI circular DOR.STR.REC.4/21.04.048/2021-22 dated April 07, 2021, the Bank shall refund/adjust ''interest on interest'' to all borrowers including those who had availed of working capital facilities during the moratorium period, irrespective of whether moratorium had been fully or partially availed, or not availed. Pursuant to these instructions, the methodology for calculation of the amount of such ''interest on interest'' finalised by the Indian Banks Association (IBA) in consultation with other industry participants/bodies. The Bank based on the instructions/methodology from IBA, recognised a charge of '' 1,444.6 million in its Profit and Loss Account for the year ended March 31, 2021.

17.5.29 Non-performing financial assets purchased/ sold from/ to other bank

The Bank has not purchased/sold any non-performing financial assets from/to another bank during the year ended March 31, 2022 and March 31, 2021.

17.5.30 Transfer of Loan Exposure

Details of loans transferred/acquired for the period October 01, 2021 to March 31, 2022 under the RBI Master Direction on Transfer of Loan Exposures dated September 24, 2021 are given below:

(i) The Bank has not transferred/acquired any non-performing assets (NPAs).

(ii) The Bank has not transferred/acquired any Special Mention Account (SMA) and loan not in default.

1 Working funds represents the average of total assets as reported in Return Form X to RBI under Section 27 of the Banking Regulation Act, 1949.

2 For the purpose of computation of business per employee and profit per employee (deposits plus advances), interbank deposits have been excluded and average employees have been considered.

Classification of assets and liabilities under the different maturity buckets is based on the same estimates and assumptions as used by the Bank for compiling the return submitted to the RBI.

Maturity profile of foreign currency assets and liabilities is excluding Off Balance Sheet item.

The Bank has lending to sectors, which are sensitive to asset price fluctuations. Such sectors include capital market and real estate.

Capital market exposure is reported in line with Para 2.3 of RBI''s Master Circular on Exposure Norms dated July 1, 2015 (DBR.No.Dir.BC.12/13.03.00/2015-16).

* Exposure of Stock Broker comprises Fund-based & Non-fund based portfolio and the Consolidated Exposure is inclusive of ''YES Securities Ltd.''

* Out of the above ?2,708.97 million is exposure to YES Securities (India) Limited, which is a subsidiary of the Bank.

17.5.35 Risk Category wise Country Exposure

As per the extant RBI guidelines, the country exposure (direct and indirect) of the Bank is categorised into various risk categories listed in the following table. As at March 31, 2022, the net funded country exposure (direct) of the Bank as a percentage of total funded assets for United States of America was 1.19% (for previous year March 31, 2021 Singapore was 1.01%). As the net funded exposure to United States of America exceeded 1.0% of total funded assets, the Bank held a provision of '' 103.85 million on country exposure (direct and indirect) at March 31, 2022 (March 31, 2021: '' 69.38 million) based on RBI guidelines.

17.5.36 Details of factoring exposure

The factoring exposure of the Bank outstanding as on March 31, 2022 is '' 2,581.17 million (Previous year: '' 385.62 million).

Miscellaneous

17.5.37 Disclosure on borrowing and lending activities

The Bank, as part of its normal banking business, grants loans and advances, makes investments, provides guarantees to and accept deposits and borrowings from its customers, other entities and persons. These transactions are part of the Bank''s normal banking business and are undertaken in accordance with the guidelines prescribed by the Reserve Bank of India.

Other than the transactions described above, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other persons or entities, including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in other persons or entities identified by or on behalf of the Bank (Ultimate Beneficiaries) or provide any guarantee, security or like on behalf of the Ultimate Beneficiaries.

The Bank has also not received any fund from any persons or entities, including foreign entities (''Funding Party'') with the understanding, whether recorded in writing or otherwise, that the Bank shall whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

17.5.38 Concentration of Deposits

The below table represents the deposits of top 20 depositors (excluding certificate of deposits, which are tradable instruments) as at March 31, 2022 and March 31, 2021.

The Bank reports basic and diluted earnings per equity share in accordance with Accounting Standard (AS) 20, "Earnings Per Share". The dilutive impact is mainly due to stock options granted to employees by the Bank.

The difference between weighted average number of equity shares outstanding between basic and diluted in the above mentioned disclosure is on account of outstanding ESOPs.

Basic earnings per equity share has been computed by dividing net profit/(loss) for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share has been computed by dividing the net profit/(loss) for the year attributable to the equity shareholders by the weighted average number of equity shares and dilutive potential equity shares options outstanding during the year, except where the results are anti-dilutive. The dilutive impact is on account of stock options granted to employees by the Bank. There is no impact of dilution on the profits in the current year and previous year.

The valuation of credit card and debit card reward points is based on actuarial valuation method obtained from an independent actuary.

17.5.51 Corporate Social Responsibility (CSR)

a) Amount required to be spent by the Bank on CSR during the year was ''Nil'' (Previous year: '' ''Nil'').

Amount spent towards CSR during the year and recognised as expense in the Profit and Loss account on CSR related activities is ''Nil'' (Previous year: '' ''Nil'')

17.5.52 Staff retirement benefits

The following table sets out the funded status of the Gratuity Plan and the amounts recognised in the Bank''s financial statements as of March 31, 2022 and March 31, 2021 which is as per AS-15 Employee Benefits (Revised):

National Pension Scheme

The Bank has contributed '' 39.12 million for the year ended March 31, 2022 (March 31, 2021: '' 29.76 million) to NPS for employees who had opted for the scheme. The Bank has no liability for future fund benefits other than its annual contribution for the employees who agree to contribute to the scheme.

Provident Fund (PF)

The Bank has recognised in the profit and loss account '' 1,019.73 million for the year ended March 31,2022 (March 31, 2021: '' 933.66 million) towards contribution to the provident fund.

Compensated absences

The Bank has recognised '' 76.61 million in the profit and loss account for the year ended March 31, 2022 (March 31, 2021: '' 17.72 million) towards compensated absences.

17.5.53 Segment Results

Pursuant to the guidelines issued by RBI on AS-17 (Segment Reporting) - Enhancement of Disclosures dated April 18, 2007, effective from period ending March 31, 2008, the following business segments have been reported.

• Treasury: Includes investments, all financial markets activities undertaken on behalf of the Bank''s customers, proprietary trading, maintenance of reserve requirements and resource mobilisation from other banks and financial institutions.

• Corporate / Wholesale Banking: Includes lending,deposit takingandotherservicesofferedto corporatecustomers.

• Retail Banking: Includes lending, deposit taking and other services offered to retail customers.

• Other Banking Operations: Includes para banking activities like third party product distribution, merchant banking etc.

The deferred tax asset of ''91,842.08 million as at March 31, 2022 and ''95,538.43 million as at March 31, 2021, is included under other assets and the corresponding credits have been taken to the profit and loss account.

Notes for segment reporting:

1. The business of the Bank is concentrated largely in India. Accordingly, geographical segment results have not been reported in accordance with AS-17 (Segment Reporting).

2. In computing the above information, certain estimates and assumptions have been made by the Management and have been relied upon by the auditors.

3. Income, expense, assets and liabilities have been either specifically identified with individual segment or allocated to segments on a systematic basis or classified as unallocated.

4. The unallocated assets Includes tax paid in advance/tax deducted at source and deferred tax asset.

5. The unallocated liabilities include Share Capital and Reserves & Surplus.

6. Inter-segment transactions have been generally based on transfer pricing measures as determined by the Management.

During the year ended March 31, 2022, the Bank has reported net profit of ''10,662.12 million. The Bank continues to carry such deferred tax asset in its Balance Sheet, as basis financial projections approved by the Board of Directors, there is reasonable certainty of having sufficient taxable income to enable realisation of the said deferred tax asset as specified in Accounting Standard 22 (Accounting for Taxes on Income). The Bank has opted to exercise the option permitted under section 115BAA of the Income-tax Act, 1961. Accordingly, the Bank has recognised Provision for Income Tax basis the rate prescribed in the aforesaid section.

17.5.55 Related Party Disclosures

The Bank has transactions with its related parties comprising of subsidiary, key management personnel and the relative of key management personnel.

# As per RBI Circular, where there is only one entity in any category of related party, banks need not disclose any details pertaining to that related party other than the relationship with that related party.

*Represents outstanding as of March 31, 2022.

1 As per Accounting Standard 18 - Related Party Disclosure, State Bank of India Limited (SBI) is an investing company for YES Bank Limited and YES BANK is associate of SBI.

2 On November 01, 2021, the Bank has completed the sale of its entire stake in its wholly-owned subsidiaries YES Asset Management (India) Limited and YES Trustee Limited to GPL Finance and Investments Limited. The net positive impact to the standalone financial results post this sale, including reversal of the impairment provision was '' 149.40 million.

During the year ended March 31, 2022, the Bank has contributed '' ''Nil'' (Previous year: '' Nil million) to YES

Foundation. YES Foundation is an independent public charitable trust which undertakes social charitable activities.

YES Foundation does not qualify as Related Party, as defined under the Accounting Standard 18 - Related Party

Disclosure and RBI guidelines.

The following represents the significant transactions between the Bank and such related parties including relatives

of above-mentioned KMP during the year ended March 31, 2021:

# As per RBI Circular, where there is only one entity in any category of related party, banks need not disclose any details pertaining to that related party other than the relationship with that related party.

* Represents outstanding as of March 31, 2021.

1 As per Accounting Standard 18 - Related Party Disclosure, State Bank of India Limited (SBI) is an investing company for YES Bank Limited and YES BANK is associate of SBI.

2 During the year, Bank has made investment in YES Asset Management (India) Limited for '' 200 million and '' 0.30 million in Yes Trustee Limited.

3 As per the RBI master circular on Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks, the Bank has provided ?437.8 million for impairment of investment in subsidiaries.

4 The Bank has entered into a definitive agreement to sell its entire stake in YES Asset Management (India) Limited and YES Trustee Limited to GPL Finance and Investments Limited. The transaction is subject to requisite regulatory approvals.

During the year ended March 31, 2021, the Bank has contributed ''Nil'' (Previous year: '' 405.42 million) to YES

Foundation. YES Foundation is an independent public charitable trust which undertakes social charitable activities.

YES Foundation does not qualify as Related Party, as defined under the Accounting Standard 18 - Related Party

Disclosure and RBI guidelines.

17.5.56 Operating Leases

Lease payments recognised in the profit and loss account for the year ended March 31, 2022 was '' 3,378.62 million

(Previous year: '' 3,892.44 million). During the year ended March 31, 2022, the Bank paid minimum lease payment

'' 3,335.19 million (Previous year: '' 3,903.91 million).

The following table sets forth, for the period indicated, the details of future rentals payment on operating leases:

The Bank does not have any provisions relating to contingent rent.

The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.

There are no undue restrictions or onerous clauses in the agreements.

17.5.57 ESOP disclosures

The Bank has three Employee Stock Option Plans Schemes in operation viz:

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

(ii) YBL Employee Stock Option Scheme, 2020 (YBL ESOS 2020) which is consisting of YBL Joining Employee Stock Option Plan, 2018 (JESOP 2018), YBL Performance Employee Stock Option Plan, 2018 (PESOP 2018), YBL Performance Employee Stock Option Plan, 2020 (PESOP 2020) and YBL MD&CEO Stock Option Plan, 2020 (MD&CEO Plan 2020). Effective September 10, 2020 nomenclature of the scheme was changed from YBL ESOS -2018 to YBL ESOS -2020 and all the plans under the said scheme continue to be valid. All new options have been granted under the YBL ESOS 2020 (which inter-alia consist of JESOP 2018, PESOP 2018, PESOP 2020 and MD & CEO Plan 2020. YBL ESOS 2020 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.

Grants under JESOP V/ PESOP II -2010 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.

The Bank has changed its accounting policy from the intrinsic value method to the fair value method for all share-linked instruments granted beginning from April 01,2021. The fair value of the stock-based compensation is estimated on the date of grant using Black-Scholes model and is recognised as compensation expense over the vesting period. As a result, ''Employees cost'' for the year ended March 31, 2022 is higher by '' 82.4 million and ''Nil'' for the year ended March 31, 2021. The Bank has adopted the Fair Value method (based on Black-Scholes pricing model), for pricing and accounting of options for the year ended March 31, 2022. If the Bank had adopted the Fair Value for all the options granted till March 31, 2021, the net profit after tax would have been lower by '' 175.95 million (the net loss after tax would have been higher by '' 338.86 million in previous year), the basic earnings per share would have been '' 0.42 (Previous year: '' (1.65)) per share instead of '' 0.43 (Previous year: '' (1.63)) per share; and diluted earnings per share would have been '' 0.42 (Previous year: '' (1.66)) per share instead of '' 0.43 (Previous year: '' (1.65)) per share.

The roles and responsibilities of the N&RC are as under -

1. To review the current Board composition, its governance framework and determine future requirements and making recommendations to the Board for approval;

2. To examine the qualification, knowledge, skill sets and experience of each director vis-a- vis the Bank''s requirements and their effectiveness to the Board on a yearly basis and accordingly recommend to the Board for the induction of new Directors;

3. To review:

(a) the composition of the existing Committees of the Board and to examine annually whether there is any need to have a special committee of directors to meet the business requirements of the Bank and accordingly recommend to the Board for formation of a special committee.

4. To scrutinise nominations for Independent/Non-Executive Directors with reference to their qualifications and experience and making recommendations to the Board for appointment/filling of vacancies;

5. To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal;

6. To Formulate/review the criteria for performance evaluation and carry out the performance evaluation of independent directors and the members of the Board of Directors;

7. Whether to extend or continue the term of appointment of the independent director on the basis of report of performance evaluation of independent directors;

8. To validate ''fit and proper'' status of all Directors on the Board of the Bank in terms of the Guidelines issued by the RBI or other regulatory authorities;

9. To develop and recommend to the Board Corporate Governance guidelines applicable to the Bank for incorporating best practices;

10. To implement policies and processes relating to Corporate Governance principles;

11. To formulate the criteria for determining qualifications, positive attributes and independence of a director;

12. Evaluate the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an independent director. The person recommended to the Board for appointment as an independent director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Committee may:

(a) use the services of an external agencies, if required;

(b) consider candidates from a wide range of backgrounds, having due regard to diversity; and

(c) consider the time commitments of the candidates.

13. To devise a Policy on Board diversity;

14. To recommend to the Board a policy relating to, the remuneration for the directors, key managerial personnel and other employees including performance/achievement bonus, perquisites, retirals, sitting fee, etc.;

15. To review the Bank''s overall compensation structure and related polices with a view to attract, motivate and retain employees and review compensation levels vis-a-vis other Banks and the industry in general;

16. To ensure the following while formulating the policy on the below matters:

(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors, key managerial personnel and senior management of the quality required to run the Company successfully;

(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(c) remuneration to Whole time directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

(d) Recommend to the board all remuneration, in whatever form, payable to senior management.

17. To consider grant of Stock Options to employees and administer and supervise the Employee Stock Option Plans;

18. To function as the Compensation Committee as prescribed under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and is authorised to allot shares pursuant to exercise of Stock Options by employees;

19. To review the Human Capital Capacity Planning on annual basis;

20. To review the list of risk takers on annual basis;

21. To review the Succession Planning;

22. To review the HCM Policies and provide suitable guidance for additions/ modification/ deletions, if any;

23. To perform any other functions or duties as stipulated by the Companies Act, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges and any other regulatory authority or under any applicable laws as may be prescribed from time to time.

(b) Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy.

The design and structure of remuneration process for MD & CEO/ WTDs/ MRTs is in line with the guidelines stated in the RBI circular dated November 04, 2019 (Ref. RBI/2019-20/89, DOR.APPT. BC. No. 23/29.67.001 /2019-20). The remuneration for MD & CEO/ WTDs/ MRTs is adjusted for all types of risk, symmetrical with risk outcomes as well as sensitive to the time horizon of risk. Further, the compensation in all forms is consistent with the risk alignment taking into account the adherence to statutory requirements and industry practices.

The Compensation components comprise the following:

i. Fixed Pay and perquisites: Fixed Compensation includes components as Basic Salary, Supplementary Allowance, Dearness allowance, Superannuation/retirals and the perquisites including monetary value of reimbursements which have a monetary ceiling.

ii. Variable Pay: The Variable Pay for MD & CEO/ WTDs/ MRTs comprises Performance Bonus and Share Linked Instrument. The proportion of Variable pay to the remuneration, the composition of variable pay between Performance Bonus and Share Linked Instruments, and the deferral arrangements for payment are in line with the RBI Guidelines.

An overview of the key features and objectives of remuneration policy -

The Bank''s Human Capital philosophy focuses on acquiring top quality Human Capital and empowering them to push their boundaries beyond their comfort zones, inculcating the right mind-set based on a deep sense of organisational commitment and ownership. This promotes a deepening of the mind share of stakeholders through superior outcomes which in turn enhances the market share and drives sustainable growth.

In line with the above, the "Total Rewards Policy" of the Bank has the following objectives:

• Attracting and retaining top class talent

• Creating and reinforcing a strong meritocracy-based performance culture

• Reinforcing employee behaviours aligned with organisational values, which include adherence to the best Governance practices, prudent risk taking and delivering superior outcomes to stakeholders.

(c) Description of the ways in which current and future risks are taken into account in the remuneration processes. It should include the nature and type of the key measures used to take account of these risks.

Our current remuneration process/Policy considers the current and future risks in the following steps:

1. Defined Performance measures of each employee in accordance with overall target of their operating units, which is determined basis the stated risk appetite of the Bank and reflects the applicable Risk profile and tolerance.

2. Defined Key Performance Indicators (KPI) which comprise factors such as Risk Management, Superior & Consistent customer service, Cost Management, Strengthening Systems, Controls & Processes and Human Capital. Thus, the performance assessment is an outcome of measuring the performance holistically.

3. A significant portion of remuneration for Senior Executives of the Bank is the Variable Pay and it is dependent on the performance of Bank, Business Unit and the Individual. Bank''s Variable Pay Programme rewards employees on both short-term and long-term basis. There is a direct correlation between the quantum of Variable Pay payout and level of risk exposure and level and role of an employee in the organisation.

4. To assess and incorporate the future risk, deferral arrangements have been incorporated for the payout of Variable Pay, where a certain proportion of Variable Pay (Cash and Non-Cash) is deferred over a period of time for the Senior Executives of the Bank. The Bank assess through the Business Unit Head/ Risk/ Compliance/ Audit/ Finance function for any adverse outcomes in the case of organisational or business unit or individual level prior to the payment of the deferred portion.

5. In the event of a negative contribution or adverse outcomes, deferred compensation is subject to appropriate malus/claw-back arrangements as decided by the Board Remuneration Committee.

(d) Description of the ways in which the Bank seeks to link performance during a performance measurement period with levels of remuneration.

The Bank''s performance management process and compensation philosophies are structured to support the achievement of the Bank''s Key Strategic Objectives (KSO) such as Governance Compliance, Liability Generation, Cost Management, Customer service, Strengthening Systems, Controls & Processes and Human Capital Development. The Bank has a comprehensive process towards defining measurable Key Performance Indicators (KPIs) for MD & CEO/ WTDs/ MRTs, which are set against the financial and non-financial KSOs of the Bank, and the goals framed for the performance year have a linkage with these KSOs. The targets for these are determined at the Bank, Business Unit and Individual level. Achievement of targets is assessed during the Annual Performance Review and the performance assessment outcomes have an impact on the remuneration.

(e) A discussion of the Bank''s policy on deferral and vesting of variable remuneration and a discussion of the Bank''s policy and criteria for adjusting deferred remuneration before vesting and after vesting.

The variable remuneration (cash and non-cash), above certain threshold, for the Senior Executives of the Bank is subject to a deferral arrangement as per the RBI guidelines. An assessment of individual/ Business Unit/ Bank performance as well as identification of cases with negative or adverse outcomes is done prior to payout of the deferred component. The payment of the same is subject to malus and claw-back clauses defined in the Bank''s Total Rewards Policy.

(f) Description of the different forms of variable remuneration (i.e. cash and types of share-linked instruments) that the bank utilises and the rationale for using these different forms.

In line with the guidelines in the RBI circular, Variable Remuneration for MD & CEO/ WTDs/ MRTs at YES BANK comprise Performance Bonus Plan and Share Linked Instruments as prescribed in the guidelines.

For Senior and Top management employees (other than MRTs) at Bank, the variable remuneration includes Performance Bonus and Share Linked Instruments.

For the rest of employees at Bank, the variable remuneration includes, Performance Bonus or Sales Incentives. Additionally, remuneration of select employees in Middle management also includes Share Linked Instruments.

Notes:

1. Compensation for MD & CEO is as approved by the RBI and paid by the Bank to the MD & CEO. Compensation for other risk takers is as approved by the Bank.

2. For the Financial Year ended March 31, 2022, 12,476,000 ESOP were issued to 17 material risk takers and MD & CEO (previous year 1,200,000 ESOPs to 5 risk takers).

*This computation is based on Annual Fixed Pay.

AVested & not exercised and un-vested ESOPs forfeited.

17.5.59 Movement in Floating Provisions

The Bank has not created or utilised any floating provisions during the financial year ended March 31, 2022 and financial year ended March 31, 2021.

17.5.60 Drawdown from Reserves

During the financial year ended March 31, 2022, the Bank has not drawn down any reserve. (Previous year: '' ''Nil'').

The Bank measures and monitors the LCR in line with the Reserve Bank of India''s circular dated June 09, 2014 and November 28, 2014 on "Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards" as amended for "Prudential Guidelines on Capital Adequacy and Liquidity Standards" dated March 31, 2015. The LCR guidelines aims to ensure that a bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario. At a minimum, the stock of liquid assets should enable the bank to survive until day 30 of the stress scenario, by which time it is assumed that appropriate corrective actions can be taken. Banks are required to maintain High Quality Liquid Assets of a minimum of 100% of its Net Cash Outflows as prescribed by regulator.

• The Bank endeavours to meet the LCR requirement on an ongoing basis. The adequacy in the LCR maintenance remains a conscious strategy of the Bank towards complying with LCR mandate.

• The Board of Directors of the Bank have empowered ALCO (Top Management Executive Committee) to monitor and strategise the Balance Sheet profile of the Bank. In line with the business strategy, ALCO forms an Interest Rate/Liquidity view for the bank with the help of the economic analysis provided by the in-house economic research team of the bank. ALCO of the Bank channelises various business segments of the Bank to target good quality asset and liability profile to meet the Bank''s profitability as well as Liquidity requirements with the help of robust MIS and Risk Limit architecture of the Bank.

• Funding strategies are formulated by the ALCO of the Bank. The objective of the funding strategy is to achieve an optimal funding mix which is consistent with prudent liquidity, diversity of sources and servicing costs. Accordingly, BSMG (Balance Sheet Management Group) of the Bank estimates daily liquidity requirement of the various business segments and manages the same on consolidated basis under ALCO guidance. With the help of Liquidity Statement prepared by the Bank, BSMG evaluates liquidity requirement and takes necessary action. Periodical reports are also placed before the ALCO for perusal and review.

• The Bank''s HQLA comprises of Excess CRR, Excess SLR, eligible foreign sovereign investments, Marginal Standing Facility (MSF) and Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) as permitted under prudential guidance and eligible Level 2 investments. The Bank has a very limited exposure to liquidity risk on account of its Derivatives portfolio. Further, the Bank believes that all inflows and outflows which might have a material impact under the liquidity stress scenario have been considered for the purpose of LCR. Further, SLR investments as well as Corporate Bond portfolio of the Bank considered for HQLA is also well diversified across various instruments and Liquid Asset Type Mix and should provide the Bank with adequate and timely liquidity.

• The daily average LCR for quarter ending March 31, 2022 is 114.6% which is well above the prudential requirement of 100%.

The Net Stable Funding Ratio (NSFR) is a significant component of the Basel III reforms. In the backdrop of the global financial crisis that started in 2007, the Basel Committee on Banking Supervision (BCBS) proposed certain reforms to strengthen global capital and liquidity regulations with the objective of promoting a more resilient banking sector. In this regard, the Basel III rules text on liquidity - "Basel III: International framework for liquidity risk measurement, standards and monitoring" was issued in December 2010 which presented the details of global regulatory standards on liquidity. Two minimum standards, viz., Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) for funding liquidity were prescribed by the Basel Committee for achieving two separate but complementary objectives. The NSFR promotes resilience over a longer-term time horizon by requiring banks to fund their activities with more stable sources of funding on an ongoing basis.

The Liquidity Risk Management of the Bank is governed by the Asset Liability Management (ALM) Policy approved by the Board. The Asset Liability Committee (ALCO) is a decision-making unit responsible for implementing the liquidity and interest rate risk management strategy of the Bank in line with its risk management objectives and ensures adherence to the risk tolerance/limits set by the Board.

The guidelines for NSFR maintenance were made effective from October 01, 2021. The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding. "Available stable funding" (ASF) is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered by the NSFR, which extends to one year. The amount of stable funding required ("Required stable funding") (RSF) of a specific institution is a function of the liquidity characteristics and residual maturities of the various assets held by that institution as well as those of its off-balance sheet (OBS) exposures.

17.5.63 Intra-Group Exposures to Subsidiaries

The Bank had three subsidiaries viz. "YES Securities (India) Limited, Yes Asset Management (India) Limited and Yes Trustee Limited" as at the end of March 31, 2021. During the year ended March 2022, the Bank had sold two subsidiaries viz. " Yes Asset Management (India) Limited and Yes Trustee Limited "

17.5.65 Investor Education and Protection Fund

The unclaimed dividend amount due to be transferred to the Investor Education and Protection Fund (IEPF) during the year ended March 31, 2022 and year ended March 31, 2021 has been transferred without any delay.

17.5.66 Marketing and distribution

The Bank has received a fee of '' 1,370.70 million in respect of the marketing and distribution function (excluding bancassurance business) during the year ended March 31, 2022 (Previous year: '' 673.70 million).

17.5.67 Implementation of IFRS converged Indian Accounting Standards (Ind AS)

The Institute of Chartered Accountants of India has issued Ind AS (a revised set of accounting standards) which largely converges the Indian accounting standards with International Financial Reporting Standards (IFRS). The Ministry of Corporate Affairs (MCA) has notified these accounting standards (Ind AS) for adoption. The RBI through press release RBI/2018-2019/146 DBR.BP.BC. No.29/21.07.001/2019-20 March 22, 2019 updated all scheduled commercial banks that legislative amendments recommended by the RBI are under consideration of the Government of India. Accordingly, RBI has decided to defer the implementation of Ind AS till further notice.

As per RBI directions, YES Bank has taken following steps so far:

• The Bank is submitting half yearly Proforma Ind AS financial statements to the RBI

• Formed Steering Committee for Ind AS implementation. The Steering Committee comprises Chief Financial Officer (CFO) (Chairman), Chief Risk Officer (CRO), Chief Operating Officer (COO), Chief Information Officer (CIO) and members of the Senior Management from Financial Management, Risk Control and Treasury Operations. The Committee oversees the progress of Ind AS implementation in the Bank and provides guidance on critical aspects of the implementation such as Ind AS technical requirements, systems and processes, business impact, people and project management. The Committee closely reviews progress of the implementation.

• Steering committee updates the Audit Committee and the Board on preparedness for migration to Ind AS on a half yearly basis.

• The Bank will continue to liaise with RBI and industry bodies on various aspects pertaining to Ind AS implementation.

17.5.69 Unhedged Foreign Currency Exposure of Bank''s Customer

The Bank has in place a policy on managing credit risk arising out of unhedged foreign currency exposures of its borrowers. The objective of this policy is to maximise the hedging on foreign currency exposures of borrowers by reviewing their foreign currency product portfolio and encouraging them to hedge the unhedged portion. In line with the policy, assessment of unhedged foreign currency exposure is a part of assessment of borrowers and is undertaken while proposing limits or at the review stage. Additionally, at the time of sanctioning limits for all clients, the Bank stipulates a limit on the unhedged foreign currency exposure of the client (as a % of total foreign currency exposure sanctioned by the Bank) after considering factors such as internal rating of the borrower, size, possibility of natural hedging, sophistication of borrower and maturity of borrower''s financial systems, relative size of unhedged foreign currency exposure with respect to total borrowings of the client, etc. Further, the Bank reviews the unhedged foreign currency exposure across its portfolio on a periodic basis. The Bank also maintains incremental provision and capital towards the unhedged foreign currency exposures of its borrowers in line with the extant RBI guidelines.

17.5.72 Dues to Micro and Small Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 02, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been '' 1,046.93 million (Previous year: '' 570.14 million) worth bills which were paid with delays to micro and small enterprises. There have been '' 17.42 million worth bills remained unpaid as at March 31, 2022. There have been no demand of interest on these payments. The above is based on the information available with the Bank which has been relied upon by the auditors.

17.5.73 Securitisation Transactions (separate table if there is any securitised transactions)

The Bank has not done any securitisation transactions during the year ended March 31, 2022 and March 31, 2021.

17.5.74 Letter of comfort

The Bank has not issued any letter of comfort which is not recorded as contingent liability during the year ended March 31, 2022 and March 31, 2021.

The Bank has a process whereby periodically all long-term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Bank has reviewed and recorded adequate provision as required under any law /accounting standards for material foreseeable losses on such long-term contracts (including derivative contracts) in the books of account and disclosed the same under the relevant notes in the financial statements.

Sr.

No.

Contingent Liabilities

Brief

1.

Claims against the Bank not acknowledged as debts

The Bank is a party to various legal and tax proceedings in the normal course of business.

The Bank does not expect the outcome of these proceedings to have a material adverse effect on the Bank''s financial conditions, results of operations or cash flows.

2.

Liability on account of forward exchange and derivative contracts.

The Bank enters into foreign exchange contracts, currency options, forward rate agreements, currency swaps and interest rate swaps with interbank participants and customers. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to exchange cash flows by way of interest/ principal in one currency against another, based on predetermined rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows. The notional amounts of financial instruments of such foreign exchange contracts and derivatives provide a basis for comparison with instruments recognised on the balance sheet but do not necessarily indicate the amounts of future cash flows involved or the current fair value of the instruments and, therefore, do not indicate the Bank''s exposure to credit or price risks. The derivative instruments become favourable (assets) or unfavourable (liabilities) as a result of fluctuations in market rates or prices relative to their terms. The aggregate contractual or notional amount of derivative financial instruments on hand, the extent to which instruments are favourable or unfavourable and, thus the aggregate fair values of derivative financial assets and liabilities can fluctuate significantly.

3.

Guarantees given on behalf of constituents, acceptances, endorsements and other obligations

As a part of its commercial banking activities the Bank issues documentary credit and guarantees on behalf of its customers. Documentary credits such as letters of credit enhance the credit standing of the customers of the Bank. Guarantees generally represent irrevocable assurances that the Bank will make payments in the event of the customer failing to fulfill its financial or performance obligations.

4.

Other items for which the Bank is contingently liable

Purchase of securities pending settlement, capital commitments, amount deposited with RBI under Depositor Education Awareness Fund (DEAF), bill re-discounting, Foreign Exchange Contracts (Tom & Spot), Undrawn partial credit enhancement facilities, When Issued (W) securities.

Refer Schedule 12 for amounts relating to contingent liability.

Prior period comparatives

Previous year''s figures have been regrouped where necessary to conform to current year classification.


Mar 31, 2021

Investment Reserve

The Bank has transferred ''153.70 million to Investment Reserve (Previous year: ''147.23 million) (net of applicable taxes and transfer to statutory reserve requirements) on provisions for depreciation on investments credited to Profit and Loss Account.

Cash Flow Hedge Reserve

The Bank has credited ''32.84 million to Cash Flow Hedge Reserve (Previous year: debited ''15.53 million) on cross currency interest rate swaps which are used by the Bank to hedge its foreign currency borrowings and have been designated as cash flow hedges and are measured at fair value.

Investment Fluctuation Reserve (IFR)

The Bank has reported loss during the year ended March 31,2021, and hence the Bank has transferred ''Nil'' in IFR (Previous year: '' ''Nil'').

Tier I and Tier II Capital

During the financial year ended March 31,2021 and March 31,2020, the Bank has not issued Tier I or Tier II instruments.

Write Down of AT1 Bonds

In March 2020, YES Bank Limited ("the Bank") was reconstructed pursuant to the provisions of Section 45 of the Banking Regulation Act, 1949 under the "YES Bank Reconstruction Scheme, 2020". As a consequence of the reconstruction, the Bank was deemed to be nonviable or approaching non-viability and both "the pre-specified trigger" and "the trigger at the point of non-viability" were activated. Accordingly, the Bank was constrained to write down Additional Tier 1 Bonds ("AT 1 Bonds") on March 14, 2020. The Axis Trustee Services Limited (Trustee on behalf of the bondholders of AT 1 Bonds) and other bondholders have filed various writ petition(s) and consumer complaint(s) across India challenging the decision of the Bank to write down AT 1 Bonds. A Transfer Petition has been preferred by the Bank to transfer all pending litigation(s) to Mumbai as per the jurisdictional clause in the Information Memorandum(s) for the issuance of AT 1 Bonds. The Bank, based on the legal opinion of its external independent legal counsel is of the view that the Bank''s decision to write down the AT 1 Bonds is in accordance with the contractual terms for issuance of AT 1 Bonds.

Separately, on October 26, 2020, Securities and Exchange Board of India ("SEBI") issued a Show Cause Notice, inter alia, alleging mis-selling of AT-1 Bonds. Though the Bank filed its objections, SEBI vide its Adjudication Order No. Order/SM/MG/2021-22/11306-11309 dated April 12, 2021 ("the Order") has imposed a penalty of ''25 Crore against the Bank under Section 15 HA of SEBI Act, 1992 for the alleged mis-selling of AT-1 Bonds in the secondary market. The Bank is in the process of filing an appeal before the Hon''ble Securities Appellate Tribunal against the Order." Interest on Additional Tier I Capital (Unsecured, Non-Convertible, Tier I Subordinated Perpetual Bonds in the nature of Promissory Notes issued under Basel II guidelines) amounting to ''84.0 million which was not cumulative was not paid by Bank during FY 2019-20 as the regulatory Capital Adequacy ratio of the Bank were lower than the minimum prudential requirement. However post capital raise (FPO), the Bank exercised the call option with approval of RBI and repaid the Bonds along with interest for FY 2020-21.

Sales and transfers of securities to/from Held to Maturity (HTM) category

During the year ended March 31, 2021, the Bank has sold and transferred securities from HTM category exceeding 5% of the book value of investment held in HTM category at the beginning of the year. The 5% threshold referred to above does not include onetime transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks as per extant RBI guidelines, sale of securities under pre-announced Open Market Operation (OMO) auction to the RBI and sale of securities or transfer to AFS / HFT consequent to the reduction of ceiling on SLR securities under HTM. The book value of HTM investment sold during the year ended March 31, 2021 was ''87,170.72 million

(March 31,2020 ''241,592.9 million). The market value of investments (excluding investments in subsidiaries) under HTM category was ''300,195.82 million (March 31, 2020 ''316,942.3 million) and was higher than the book value thereof as at March 31,2021.

18.6.15 Disclosures on risk exposure in derivatives

As per RBI Master circular DBR.BP.BC.No.23/21.04.018/2015-16 dated July 1, 2015, the

following disclosures are being made with respect to risk exposure in derivatives of the Bank:

a) Purpose: The Bank uses Derivatives including Forwards & swaps for various purposes including hedging its currency and interest rate risk in its balance sheet, customer offerings and proprietary trading. The management of these products and businesses is governed by Market Risk Policy, Investment Policy, Derivatives Policy, Derivatives Appropriate ness Policy, Hedging Policy and ALM policy.

b) Structure: The Board of Directors of the Bank have constituted a Board level sub-committee, the Risk Monitoring Committee (''RMC) and delegated to it all functions and responsibilities relating to the risk management policy of the Bank and its supervision thereof.

c) As part of prudent business and risk management practice, the Bank has also instituted a comprehensive limit and control structure encompassing Value-at-Risk (VAR), Sensitivity, Greeks, Stop loss & credit limits for derivative transactions including suitability and appropriateness framework. The Bank has an internal reporting mechanism providing regular reports to the RMC as well as to the management of the Bank. Such a structure helps the Bank to monitor and mitigate market risk across FX and interest rates.

d) The Bank has an independent Middle Office and Market Risk functions, which are responsible for monitoring, measurement, and analysis of derivative related risks, among others. The Bank has a Credit Risk Management unit which is responsible for setting up counterparty limits and also a treasury operation unit which is responsible for managing operational aspects of derivatives including settlement of transactions. The Bank is subject to a concurrent audit for all treasury transactions, including derivatives transactions, a monthly report of which is periodically submitted to the Audit & Compliance Committee of the Bank.

e) In addition to the above, the Bank independently evaluates the potential credit exposure on account of all derivative transactions, wherein risk limits are specified separately for each product, in terms of both credit exposure and tenor. As mandated by the Credit Policy of the Bank, the Bank has instituted an approval structure for all treasury/derivative related credit exposures. Wherever necessary, appropriate credit covenants are stipulated as trigger events to call for collaterals or terminate transaction and contain the risks.

f) The Bilateral Netting of Qualified Financial Contracts has been notified by the RBI through circular dated March 30, 2021. The Bank has computed capital adequacy as well as

exposure on account of these contracts as per Current Exposure method considering each transaction as separate netting set on conservative basis. The Bank shall work progressively over the period on classification of multiple permissible transactions into a netting set which may result in reduction in capital requirement and exposure due to these transactions.

g) The Bank reports all trading positions to the management on a daily basis. The Bank revalues its trading position on a daily basis for Management and Information System (''MIS'') and control purposes and records the same in the books of accounts on a monthly basis.

h) For derivative contracts in the banking book designated as hedge, the Bank documents at the inception of the relationship between the hedging instrument and the underlying exposure, the risk management objective for undertaking the hedge and the ALCO monitors all outstanding hedges on a periodical basis. Further the Bank''s ''Hedging Policy'' has stipulated conditions to ensure that the Hedges entered into are effective.

Note:

1) Denotes absolute value of loss which the Bank could suffer on account of a change In Interest rates by 1% which however doesn''t capture the off-setting exposures between interest rate and currency derivatives.

2) PV01 exposures reported above may not necessarily Indicate the Interest rate risk the Bank Is exposed to, given that PV01 exposures in Investments (which may offset the PV01 reflected above) do not form part of the above table.

3) The notional principal amount of foreign exchange contracts classified as trading at March 31, 2021 amounted to ''2,004,598.80 million (previous year: ''1,496,207.26 million). For these trading contracts, as on March 31, 2021, marked to market position was asset of ''10,075.82 million (Previous year: ''34,541.65 million) and liability of ''10,163.47 million (Previous Year: ''33,551.58 million). The notional principal amount of foreign exchange contracts classified as hedging at March 31, 2021 amounted to ''16,792.97 million (previous year: ''23,260.15 million). Credit exposure on forward exchange contracts at March 31, 2021 was ''58,733.82 million (Previous Year: ''57,079.44 million) of which exposure on CCIL is ''40,822.85 million (Previous Year: ''28,336.86 million)

18.6.17 Provision coverage Ratio (PCR)

The provision coverage ratio of the Bank as at March 31, 2021 computed as per the RBI guidelines is 65.70% (previous year 73.77%). PCR considering technical write off is 78.58% (previous year 78.02%)

18.6.18 Divergence in Asset Classification and Provisioning for NPAs FY 2020-21

In terms of the RBI circular no. DBR.BP.BC.No.32/21.04.018/2018-19 dated April 1, 2019 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 FY 2019-20.

FY 2019-20

As part of the Risk Based Supervision (RBS) exercise for FY 2018-19 concluded in November 2019, the RBI has pointed out certain retrospective divergence in the Bank''s asset classification and provisioning as on March 31,2019. In conformity with the above mentioned RBI circular, the below table outlines divergences in asset classification and provisioning.

18.6.23 Restructuring of Advances - Micro Small and Medium Enterprises.

During the year ended March 31, 2021, the Bank has restructured advances amounting to ''1,202.68 million (previous year ''369.24 ) to Micro Small and Medium Enterprises.

18.6.24 Disclosure under COVID19 Regulatory Package

As per requirement of RBI circular RBI/2019-20/220 DOR.No.BP.BC.63/21.04.048/2019-20 dated April 17, 2020 on COVID19 Regulatory Package - Asset Classification and Provisioning, below mentioned are details of where moratorium / deferment was extended as of March 31, 2020 and corresponding position as of March 31,2021 as per above circular.

RBI issued guidelines on COVID-19 Regulatory Packages under which, the Bank granted a moratorium of three months (further extended by three months) on the payment of all instalments and / or interest, as applicable, falling due between March 1, 2020 and August 31, 2020. For all such accounts where the moratorium was granted, the asset classification remained stand still during the moratorium period (i.e. the number of days past-due shall exclude the moratorium period for the purposes of asset classification under the Income Recognition, Asset Classification and Provisioning norms) and the same had been retained based on the overdue status as at February 29, 2020.

Asset Classification and Income Recognition following the expiry of Covid-19 regulatory package:

In accordance with the instructions in the RBI circular DOR.STR.REC.4/21.04.048/2021-22 dated April 07, 2021, the Bank shall refund / adjust ''interest on interest'' to all borrowers including those who had availed of working capital facilities during the moratorium period, irrespective of whether moratorium had been fully or partially availed, or not availed. Pursuant to these instructions, the methodology for calculation of the amount of such ''interest on interest'' finalised by the Indian Banks Association (IBA) in consultation with other industry participants / bodies. The Bank based on the instructions/methodology from IBA, recognised a charge of ''1,444.6 million in its Profit and Loss Account for the year ended March 31,2021.

18.6.26 Non-performing financial assets purchased/ sold from/ to other bank

The Bank has not purchased/sold any non performing financial assets from/to another bank during the year ended March 31, 2021 and March 31,2020.

18.6.27 Provisions for Standard Assets

Provision on standard advances for the year FY 2020-21 was ''19,492.54 million.

Provision on standard advances for the year FY 2019-20 was ''12,597.18 million. As per requirement of RBI circular RBI/2019-20/220 DOR.No.BP.BC.63/21.04.048/2019- 20 dated April 17, 2020 on COVID19 Regulatory Package - Asset Classification and Provisioning, the Bank has created provision amounting to ''2,378.42 million in FY 2019-20.

18.6.37 Concentration of Advances

As at March 31, 2021 the top 20 advances aggregated to ''381,576.76 million (previous year ''439,799.02 million), representing 11.77% (previous year 11.62%) of the total advances. For this purpose, advance is computed as per definition of Credit Exposure in RBI Master Circular on Exposure Norms DBR.No.Dir.BC.12/13.03.00/2015-16 dated July 1,2015.

18.6.38 Concentration of Exposures

As at March 31,2021 the top 20 exposures aggregated to ''418,476.21million (previous year ''497,206.14 million), representing 12.27% (previous year 12.56%)of the total exposures. Exposure is computed as per definition of Credit and Investment Exposure in RBI Master Circular on Exposure Norms DBR.No.Dir.BC.12/13.03.00/2015-16 dated July 1,2015.

18.6.39 Earnings Per Share (''EPS'')

The Bank reports basic and diluted earnings per equity share in accordance with Accounting Standard (AS) 20, "Earnings Per Share". The dilutive impact is mainly due to stock options granted to employees by the Bank.

18.6.36 Concentration of Deposits

As at March 31, 2021, the deposits of top 20 depositors aggregated to ''285,237.23 million (previous year: ''130,699.58 million) (excluding certificate of deposits, which are tradable instruments), representing 18.28% (previous year: 13.28%) of the total deposit base.

The difference between weighted average number of equity shares outstanding between basic and diluted in the above mentioned disclosure is on account of outstanding ESOPs. Basic earnings per equity share has been computed by dividing net profit / (loss) for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share has been computed by dividing

the net profit / (loss) for the year attributable to the equity shareholders by the weighted average number of equity shares and dilutive potential equity shares options outstanding during the year, except where the results are anti-dilutive. The dilutive impact is on account of stock options granted to employees by the Bank. There is no impact of dilution on the profits in the current year and previous year.

18.6.41 Repatriation of profits

The Bank has not repatriated any profit from overseas branch during the FY 2020-21 and FY 2019-20 .

18.6.42 Sponsored SPVs

The Bank has not sponsored any SPV and hence there is no consolidation due to SPVs in Bank''s books.

18.6.43 Credit default swaps

The Bank has not transacted in credit default swaps during the year ended March 31, 2021 (previous year: ''Nil'').

18.6.45 Corporate Social Responsibility (CSR)

a) Amount required to be spent by the Bank on CSR during the year was ''Nil'' (previous year ''831.9 million ).

b) Amount spent towards CSR during the year and recognised as expense in the Profit and Loss account on CSR related activities is ''Nil'' (previous year ''405.52 million), which comprise of following -

18.6.46 Staff retirement benefits

The following table sets out the funded status of the Gratuity Plan and the amounts recognized in the Bank''s financial statements as of March 31,2021 and March 31, 2020 which is as per AS-15 Employee Benefits (Revised):

The Bank is yet to determine future contribution to Gratuity fund for Financial Year 2021-22

National Pension Scheme

The Bank has contributed ''29.76 million for the year ended March 31, 2021 (March 31, 2020: ''24.36 million) to NPS for employees who had opted for the scheme. The Bank has no liability for future fund benefits other than its annual contribution for the employees who agree to contribute to the scheme.

Provident Fund (PF)

The Bank has recognised in the profit and loss account ''933.66 million for the year ended March 31,2021 (March 31,2020: ''1,039.82 million ) towards contribution to the provident fund.

Compensated absence

The Bank has recognised ''17.72 million in the profit and loss account for the year ended March 31,2021 (March 31,2020: ''169.54 million) towards compensated absences.

18.6.47 Segment Results

Pursuant to the guidelines issued by RBI on AS-17 (Segment Reporting) - Enhancement of Disclosures dated April 18, 2007, effective from period ending March 31,2008, the following business segments have been reported.

» Treasury: Includes investments, all financial markets activities undertaken on behalf of the Bank''s customers, proprietary trading, maintenance of reserve requirements and resource mobilisation from other banks and financial institutions.

» Corporate / Wholesale Banking: Includes lending, deposit taking and other services offered to corporate customers.

» Retail Banking: Includes lending, deposit taking and other services offered to retail customers.

» Other Banking Operations: Includes para banking activities like third party product distribution, merchant banking etc.

Other banking operations includes income from bancassurance business ''836.40 million during year ended March 31,2020.

Notes for segment reporting:

1. The business of the Bank is concentrated largely in India. Accordingly, geographical segment results have not been reported in accordance with AS-17 (Segment Reporting).

2. In computing the above information, certain estimates and assumptions have been made by the Management and have been relied upon by the auditors.

3. income, expense, assets and liabilities have been either specifically identified with individual segment or allocated to segments on a systematic basis or classified as unallocated.

4. The unallocated assets Includes tax paid in advance/tax deducted at source and deferred tax asset.

5. The unallocated liabilities include Share Capital, Reserves & Surplus and Tier 1 bond borrowings.

6. Inter-segment transactions have been generally based on transfer pricing measures as determined by the Management.

18.6.48 Related Party Disclosures

The Bank has transactions with its related parties comprising of subsidiary, key management personnel and the relative of key management personnel

As per AS 18 "Related Party Disclosures", notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014, the Bank''s related parties for the year ended March 31,2021 are disclosed below:

Subsidiary

» Yes Securities (India) Limited » Yes Asset Management (India) Limited » Yes Trustee Limited Individuals having significant influence:

» Mr. Prashant Kumar, Managing Director & CEO Investing Company

Investing party - State Bank of India Limited (SBI)

Key Management Personnel (''KMP'') (Whole time Director)

» Mr. Prashant Kumar, Managing Director & CEO

18.6.49 Operating Leases

Lease payments recognized in the profit and loss account for the year ended March 31, 2021 was ''3,892.44 million (Previous year: ''3,900.61 million). During the year ended March 31, 2021, the Bank paid minimum lease payment ''3,903.91 million (Previous year: ''3,782.51 million).

18.6.50 ESOP disclosures

Statutory Disclosures Regarding Joining Stock Option Scheme:

The Bank has Six Employee Stock Option Schemes viz.

» Joining Employee Stock Option Plan I (JESOP I),

» 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)

» 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), PESOP 2019, PESOP 2020, YBL MD&CEO (New) Stock Option Plan, 2019 (MD&CEO Plan 2019) and YBL MD&CEO Stock Option Plan, 2020 (MD&CEO Plan 2020)]

While amending/varying the employee stock option scheme of the bank i.e. YBL ESOS - 2018 which was approved in 14th Annual General Meeting of the Bank held on June 12, 2018. Effective September 10,2020 nomenclature of the scheme from YBL ESOS - 2018 to YBL ESOS -2020 and all the plans under the said scheme would continue to be valid. All new options have been granted under the YBL ESOS 2020 (which inter-alia consists of JESOP 2018, PESOP 2018, PESOP 2020, MD & CEO Plan 2019 and MD & CEO Plan 2020). The YBL ESOS 2020 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.

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 after January 1, 2010. Grants under JESOP IV/PESOP I and JESOP V/ PESOP II -2010 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 above mentioned plans would be valid in accordance with the terms & conditions mentioned in the plans

The Bank has charged ''Nil'' amount, being the intrinsic value of the stock options granted for the year ended March 31, 2021 and March 31, 2020. Had the Bank adopted the Fair Value method (based on Black- Scholes pricing model), for pricing and accounting of options, net loss after tax would have been higher by ''338.86 million (Previous year: ''505.40 million), the basic earnings per share would have been ''(1.65) (Previous year: ''(56.24)) per share instead of ''(1.63) (Previous year: ''(56.07)) per share; and diluted earnings per share would have been ''(1.66) (Previous year: ''(56.24)) per share instead of ''(1.65) ( Previous year: ''(56.06)) per share.

The Bank has a totaldeferred tax asset of ''95,538.43 million as at March 31, 2021. During the year ended March 31, 2021, the Bank has reported net loss of ''34,622.27 million. The Bank continues to carry such deferred tax asset in its Balance Sheet, as basis financial projections approved by the Board of Directors, there is reasonable certainty of having sufficient taxable income to enable realization of the said deferred tax asset as specified in Accounting Standard 22 (Accounting for Taxes on Income). The bank has opted to exercise the option permitted under section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, the Bank has recognised Provision for Income Tax basis the rate prescribed in the aforesaid section.

1) To review the current Board composition, its governance framework and determine future requirements and making recommendations to the Board for approval;

2) To examine the qualification, knowledge, skill sets and experience of each director vis-a- vis the Bank''s requirements and their effectiveness to the Board on a yearly basis and accordingly recommend to the Board for the induction of new Directors;

3) To review:

(a) the composition of the existing Committees of the Board and to examine annually whether there is any need to have a special committee of directors to meet the business requirements of the Bank and accordingly recommend to the Board for formation of a special committee.

(b) Review the Terms of Reference of the Board Level Committees and recommend the changes therein, if any, to the Board;

4) To scrutinize nominations for Independent/Non-Executive Directors with reference to their qualifications and experience and making recommendations to the Board for appointment/filling of vacancies;

5) To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal;

6) To Formulate criteria for evaluation of performance of independent directors and the board of directors;

7) To carry out evaluation of every director''s performance;

8) Whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors;

9) To validate ''fit and proper'' status of all Directors on the Board of the Bank in terms of the Guidelines issued by the RBI or other regulatory authorities;

10) To develop and recommend to the Board Corporate Governance guidelines applicable to the Bank for incorporating best practices;

11) To implement policies and processes relating to Corporate Governance principles;

12) To formulate the criteria for determining qualifications, positive attributes and independence of a director;

13) To devise a Policy on Board diversity;

14) To recommend to the Board a policy relating to, the remuneration for the directors, key managerial personnel and other employees including performance/ achievement bonus, perquisites, retirals, sitting fee, etc.;

15) To review the Bank''s overall compensation structure and related polices with a view to attract, motivate and retain employees and review compensation levels vis-a-vis other Banks and the industry in general;

16) To ensure the following while formulating the policy on the aforesaid matters:

a. the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors, key managerial personnel and senior management of the quality required to run the company successfully;

b. relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c. remuneration to Whole time directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long- term performance objectives appropriate to the working of the company and its goals.

d. Recommend to the board all remuneration, in whatever form, payable to senior management

17) To consider grant of Stock Options to employees including employees of subsidiaries and administer and supervise the Employee Stock Option Plans;

18) To function as the Compensation Committee as prescribed under the SEBI (Share Based Employee Benefits) Regulations, 2014 and is authorized to allot shares pursuant to exercise of Stock Options by employees;

19) To review the Human Capital Capacity Planning on annual basis;

20) To review the list of risk takers on annual basis;

21) To review the Succession Planning;

22) To review the HCM Policies and provide suitable guidance for additions/ modification/ deletions, if any;

23) To perform any other functions or duties as stipulated by the Companies Act, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges and any other regulatory authority or under any applicable laws as may be prescribed from time to time.

(a) Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy-

The design and structure of remuneration process for MD & CEO/ WTDs/ MRTs is in line with the guidelines stated in the RBI circular dated 04 November 2019 (Ref. RBI/2019-20/89, DOR.APPT. BC. No. 23/29.67.001/2019-20). The remuneration for MD & CEO/WTDs/MRTs is adjusted for all types of risk, symmetrical with risk outcomes as well as sensitive to the time horizon of risk. Further, the compensation in all forms is consistent with the risk alignment taking into account the adherence to statutory requirements and industry practices.

The Compensation components comprise the following:

i. Fixed Pay and perquisites: Fixed Compensation includes components as Basic Salary, Supplementary Allowance, Dearness allowance, Superannuation/ retirals and the perquisites including monetary value of reimbursements which have a monetary ceiling

ii. Variable Pay: The Variable Pay for MD & CEO/WTDs/MRTs shall comprise Performance Bonus and Share linked instrument. The proportion of Variable pay to the remuneration, the composition of variable pay between Performance Bonus and Share Linked Instruments, and the deferral arrangements for payment are in line with the RBI Guidelines.

An overview of the key features and objectives of remuneration policy -

The Bank''s Human Capital philosophy focuses on acquiring top quality Human Capital and empowering them to push their boundaries beyond their comfort zones, inculcating the right mind-set based on a deep sense of organizational commitment and ownership. This promotes a deepening of the mind share of stakeholders through superior outcomes which in turn enhances the market share and drives sustainable growth.

In line with the above, the "Total Rewards Policy" of the Bank has the following objectives:

» Attracting and retaining top class talent

» Creating and reinforcing a strong meritocracy-based performance culture

» Reinforcing employee behaviors aligned with organizational values, which include adherence to the best Governance practices, prudent risk taking and delivering superior outcomes to stakeholders.

(b) Description of the ways in which current and future risks are taken into account in the remuneration processes. It should include the nature and type of the key measures used to take account of these risks.

Our current remuneration process/ Policy considers the current and future risks in the following steps

1. Defined Performance measures of each employee in accordance with overall budget of their operating units which is determined basis the stated risk appetite of the Bank and reflects the applicable Risk profile and tolerance

2. Defined Key Performance Indicators (KPI) which comprise factors such as Risk Management, Superior & Consistent customer service, Cost Management, Strengthening Systems, controls & Processes, Human capital and thus, the performance assessment is an outcome of measuring the performance holistically

3. A significant portion of remuneration for Senior Executives of the Bank is

the Variable Pay and it is dependent on the performance of Bank, Business Unit and the individual. Bank''s Variable Pay Program rewards employees on both short term and long-term basis. There is a direct correlation between the quantum of Variable Pay and level of risk exposure and level and role of an employee in the organization

4. To assess and incorporate the future risk, deferral arrangements have been incorporated for the payout of Variable Pay, where a certain proportion of Variable Pay (Cash and Non Cash) is deferred over a period of time for the Senior Executives of the Bank. The Bank assess through the Business Unit Head/Risk/Finance function for any adverse outcomes in the case of organizational or business unit or individual level prior to the payment of the deferred portion

5. In the event of a negative contribution, deferred compensation is subject to appropriate malus/claw back arrangements as decided by the Board Remuneration Committee

(c) Description of the ways in which the Bank seeks to link performance during a performance measurement period with levels of remuneration.

The Bank''s performance management process and compensation philosophies are structured to support the achievement of the Bank''s Key Strategic Objectives (KSO). The Bank follows a "Pay for Performance" approach and has a comprehensive process towards defining Key Result Areas (KRAs) / measurable Key Performance Indicators (KPIs) for MD & CEO/WTDs/MRTs, which are set against the financial and non-financial KSO of the Bank, and the goals framed for the performance year have a linkage with these KSOs. The targets for these are determined at the Bank, Business Unit and Individual level. Achievement of targets is assessed during the Annual Performance Review, which has an impact on the remuneration.

(d) A discussion of the bank''s policy on deferraland vesting of variable remuneration and a discussion of the bank''s policy and criteria for adjusting deferred remuneration before vesting and after vesting.

The variable remuneration (cash and non-cash), above certain threshold, for the Senior Executives of the Bank is subject to a deferral arrangement as per guidelines given by RBI. An assessment of individual/ Business Unit/

Bank performance as well as identification of cases with negative or adverse outcomes is done prior to payout of the deferred component. The payment of the same is subject to malus or claw back clauses defined in the Bank''s Total Rewards Policy.

(e) Description of the different forms of variable remuneration (i.e., cash and types of share-linked instruments) that the bank utilizes and the rationale for using these different forms.

In line with the guidelines in the RBI circular, Variable Remuneration for MD & CEO/WTDs/MRTs at YES BANK comprise Performance Bonus Plan and Share linked instruments as prescribed in the guidelines.

For Senior and Top management employees (other than MRTs) at Bank, the variable remuneration includes Performance Bonus and Share Linked Instruments.

For the rest of employees at Bank, the variable remuneration includes, Performance Bonus or Sales Incentives.

There were 8 meetings of the N&RC held during the year ended March 31, 2021. The Bank had paid a remuneration of ''1.45 million to the members of the N&RC for attending the meetings of the N&RC.,

18.6.54 Movement in Floating Provisions

The Bank has not created or utilized any floating provisions during the financial year en March 31,2021 and financial year ended March 31,2020.

18.6.55 Drawdown from Reserves

During the financial year ended March 31, 2021, the Bank has not drawn down any rese (Previous year: '' ''Nil'').

1. Amounts disclosed represent variable pay paid during the year ended March 31, 2021 and March 31, 2020 for services rendered by the risk takers during the year March 31, 2020 and March 31,2019 respectively. As the bonus pool for the year ended March 31, 2021 has not yet been allocated and accordingly, the deferred component for the risk takers is yet to be determined.

2. Compensation for MD & CEO is as approved by the RBI and paid by the Bank to the MD & CEO. Compensation for other risk takers is as approved by the Bank.

3. For the Financial Year ended March 31, 2021, 1,200,000 ESOP were issued to 5 risk takers (previous year 2,995,000 ESOPs to 11 risktaker)

Qualitative Disclosure:

The Bank measures and monitors the LCR in line with the Reserve Bank of India''s circular dated June 09, 2014 and November 28, 2014 on "Basel III Framework on Liquidity Standards -Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards" as amended for "Prudential Guidelines on Capital Adequacy and Liquidity Standards" dated March 31, 2015. The LCR guidelines aims to ensure that a bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario. At a minimum, the stock of liquid assets should enable the bank to survive until day 30 of the stress scenario, by which time it is assumed that appropriate corrective actions can be taken. Banks are required to maintain High Quality Liquid Assets of a minimum of 90% of its Net Cash Outflows as prescribed by regulator.

» The Bank endeavors to meet the LCR requirement on an ongoing basis. The adequacy in the LCR maintenance remains a conscious strategy of the Bank towards complying with LCR mandate.

» The Board of Directors of the Bank have empowered ALCO (Top Management Executive Committee) to monitor and strategize the Balance Sheet profile of the Bank. In line with the business strategy, ALCO forms an Interest Rate/Liquidity view for the bank with the help of the economic analysis provided by the in-house economic research team of the bank. ALCO of the Bank channelizes various business segments of the Bank to target good quality asset and liability profile to meet the Bank''s profitability as well as Liquidity requirements with the help of robust MIS and Risk Limit architecture of the Bank.

» Funding strategies are formulated by the ALCO of the Bank. The objective of the funding strategy is to achieve an optimal funding mix which is consistent with prudent liquidity, diversity of sources and servicing costs. Accordingly, BSMG (Balance Sheet Management Group) of the Bank estimates daily liquidity requirement of the various business segments and manages the same on consolidated basis under ALCO guidance. With the help of Liquidity Statement prepared by the Bank, BSMG evaluates liquidity requirement and takes necessary action. Periodical reports are also placed before the ALCO for perusal and review.

» The Bank''s HQLA comprises of Excess CRR, Excess SLR, eligible foreign sovereign investments, Marginal Standing Facility (MSF) and Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) as permitted under prudential guidance and eligible Level

2 investments. The Bank has a very limited exposure to liquidity risk on account of its Derivatives portfolio. Further, the Bank believes that all inflows and outflows which might have a material impact under the liquidity stress scenario have been considered for the purpose of LCR. Further, SLR investments as well as Corporate Bond portfolio of the Bank considered for HQLA is also well diversified across various instruments and Liquid Asset Type Mix and should provide the Bank with adequate and timely liquidity.

» The daily average LCR for quarter ending March 31,2021 is 113.9% which is well above the prudential requirement of 90%.

» The Bank has been in compliance with prudential requirement for Liquidity Coverage Ratio for the FY 2020-21 on all days, starting from from Jun 15, 2020 onwards except for 4 days (Aug 26, 2020 and from Aug 31,2020 to Sep 2, 2020) due to repayment of Special Liquidity facility availed from RBI. Since Sept 3,2020 Bank was in compliance with LCR prudential requirements.

18.6.59 Investor Education and Protection Fund

The unclaimed dividend amount due to be transferred to the Investor Education and Protection Fund (IEPF) during the year ended March 31, 2021 and year ended March 31, 2020 has been transferred without any delay.

18.6.60 Unhedged Foreign Currency Exposure of Bank''s Customer

The Bank has in place a policy on managing credit risk arising out of unhedged foreign currency exposures of its borrowers. The objective of this policy is to maximize the hedging on foreign currency exposures of borrowers by reviewing their foreign currency product portfolio and encouraging them to hedge the unhedged portion. In line with the policy, assessment of unhedged foreign currency exposure is a part of assessment of borrowers and is undertaken while proposing limits or at the review stage. Additionally, at the time of sanctioning limits for all clients, the Bank stipulates a limit on the unhedged foreign currency exposure of the client (as a % of total foreign currency exposure sanctioned by the Bank) after considering factors such as internal rating of the borrower, size, possibility of natural hedging, sophistication of borrower and maturity of borrower''s financial systems, relative size of unhedged foreign currency exposure with respect to total borrowings of the client, etc. Further, the Bank reviews the unhedged foreign currency exposure across its portfolio on a periodic basis. The Bank also maintains incremental provision and capital towards the unhedged foreign currency exposures of its borrowers in line with the extant RBI guidelines.

The Bank has maintained provision of ''736.55 million (previous year of ''777.93 million) and additional capital of ''1,945.24 million (previous year of ''2,304.16 million) on account of Unhedged Foreign Currency Exposure of its borrowers as at March 31,2021.

The Bank has reported 383 cases of fraud in the financial year ended March 31, 2021 amounting to ''1,29,215.25 million (Previous Year: 75 cases amounting to ''65,931.87 million). The Bank has expensed off/ provided for the expected loss arising from these frauds and does not have any unamortized provision.

The above is based on the information available with the Bank which has been relied upon by the auditors.

18.6.63 Dues to Micro and Small Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been ''570.14 million (previous year ''655.70 million) worth bills which were paid with delays to micro and small enterprises. There have been ''35.73 million worth bills remained unpaid as at March 31, 2021. There have been no demand of interest on these payments. The above is based on the information available with the Bank which has been relied upon by the auditors.

18.6.64 Securitization Transactions

The Bank has not done any securitization transactions during the year ended March 31, 2021 and March 31, 2020. The Bank had assigned retail loans amounting to ''27,511.49 million (90% of portfolio) during the financial year ended March 31,2020.

18.6.65 Letter of comfort

The Bank has not issued any letter of comfort which is not recorded as contingent liability during the year ended March 31,2021 and March 31,2020.

The Bank has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Bank has reviewed and recorded adequate provision as required under any law / accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) in the books of account and disclosed the same under the relevant notes in the financial

18.6.69 Disclosure on Complaints-

The Bank became aware in September 2018 through communications from stock exchanges of anonymous whistleblower complaints alleging irregularities in the Bank''s operations, potential conflict of interest of the founder / former MD & CEO and allegations of incorrect NPA classification. The Bank conducted an internal enquiry of these allegations, which was carried out by management and supervised by the Board of Directors. The enquiry resulted in a report that was reviewed by the Board in November 2018. Based on further inputs and deliberations in December 2018, the Audit Committee of the Bank engaged an external firm

to independently examine the matter. In April 2019, the Bank had received the phase 1 report from the external firm and based on further review/ deliberations had directed a phase 2 investigation from the said firm. In February 2020, the Bank has received the final phase 2 report from the said external firm. The Bank has taken this report to the Audit Committee. As advised by the Audit Committee, the Bank has reviewed and carried out remediation actions across areas of process, design, policy and control related issues highlighted in the report including conducting forensic audits for few of the identified borrower accounts. The forensic audits for remaining accounts are in the process. Basis guidance from the ACB during the year, further action has been taken and a comprehensive note was put up to the Board on January 15, 2021 for closure of the report. The Board expressed satisfaction with the review carried out and approved the closure of the review of the anonymous complaints received by the Bank in September / December 2018. Exposure to such borrower accounts are recognized as NPA and commensurately provided.

Further, the Bank received forensic audit reports on certain borrower groups commissioned by other consortium bankers, which gave more information regarding the above mentioned allegations and has filed complaints with the law enforcement agencies. Also, Law Enforcement Agencies (LEAs) - the Enforcement Directorate (ED), the Central Bureau of Investigations (CBI) and the Serious Fraud Investigation Office (SFIO) have launched investigations into some aspects of transactions of the founder / former MD & CEO, and alleged links with certain borrower groups. LEAs are investigating allegations of money laundering, fraud and nexus between the founder / former MD & CEO and certain loan transactions. The investigation continues to be carried out by the various law enforcement agencies. There are no claims made by any whistleblower or other parties against the Bank in this matter. The Bank does not foresee any substantial financial impact on the Bank arising out of these investigations.

18.6.70 Description of contingent liabilities

Sr.

No

Contingent Liabilities

Brief

1.

Claims against the Bank not acknowledged as debts

The Bank is a party to various legal and tax proceedings in the normal course of business. The Bank does not expect the outcome of these proceedings to have a material adverse effect on the Bank''s financial conditions, results of operations or cash flows.

2.

Liability on account of forward exchange and derivative contracts.

The Bank enters into foreign exchange contracts, currency options, forward rate agreements, currency swaps and interest rate swaps with interbank participants and customers. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to exchange cash flows by way of interest/principal in one currency against another, based on predetermined rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows. The notional amounts of financial instruments of such foreign exchange contracts and derivatives provide a basis for comparison with instruments recognized on the balance sheet but do not necessarily indicate the amounts of future cash flows involved or the current fair value of the instruments and, therefore, do not indicate the Bank''s exposure to credit or price risks. The derivative instruments become favorable (assets) or unfavorable (liabilities) as a result of fluctuations in market rates or prices relative to their terms. The aggregate contractual or notional amount of derivative financial instruments on hand, the extent to which instruments are favorable or unfavorable and, thus the aggregate fair values of derivative financial assets and liabilities can fluctuate significantly.

3.

Guarantees given on behalf of constituents,

acceptances, endorsements and other obligations

As a part of its commercial banking activities the Bank issues documentary credit and guarantees on behalf of its customers. Documentary credits such as letters of credit enhance the credit standing of the customers of the Bank. Guarantees generally represent irrevocable assurances that the Bank will make payments in the event of the customer failing to fulfill its financial or performance obligations.

4.

Other items for which the Bank is contingently liable

Purchase of securities pending settlement, capital commitments, amount deposited with RBI under Depositor Education Awareness Fund (DEAF), bill rediscounting, Foreign Exchange Contracts (Tom & Spot)

Refer Schedule 12 for amounts relating to contingent liability

Prior period comparatives

Previous year''s figures have been regrouped where necessary to conform to current year classification.


Mar 31, 2019

Schedules forming part of Financial Satements

The Bank measures and monitors the LCR in line with the Reserve Bank of India''s circular dated June 9, 2014 and November 28, 2014 on "Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards" as amended for "Prudential Guidelines on Capital Adequacy and Liquidity Standards" dated March 31, 2015. The LCR guidelines aims to ensure that a bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario. At a minimum, the stock of liquid assets should enable the bank to survive until day 30 of the stress scenario, by which time it is assumed that appropriate corrective actions can be taken. Banks are required to maintain High Quality Liquid Assets of a minimum of 100% of its Net Cash Outflows by January 1, 2019. However, with a view to provide transition time, the guidelines mandate a minimum requirement of 60% w.e.f. January 1, 2015 and a step up of 10% every year to reach the minimum requirement of 100% by January 1, 2019.

A The adequacy in the LCR maintenance is an outcome of a conscious strategy of the Bank towards complying with LCR mandate ahead of the stipulated timelines. The maintenance of LCR, both on end of period and on a average basis, has been on account of multiple factors viz. increase in excess SLR, existing eligibility in Corporate Bond Investments, increase in Retail deposits and increase in non callable deposits.

A The Board of Directors of the Bank has empowered ALCO (Top Management Executive Committee) to monitor and strategize the Balance Sheet profile of the Bank. In line with the business strategy, ALCO forms an Interest Rate/Liquidity view for the bank with the help of the economic analysis provided by the in-house economic research team of the bank.

ALCO of the Bank channelizes various business segments of the Bank to target good quality asset and liability profile to meet the Bank''s profitability as well as Liquidity requirements with the help of robust MIS and Risk Limit architecture of the Bank.

A Funding strategies are formulated by the ALCO of the Bank. The objective of the funding strategy is to achieve an optimal funding mix which is consistent with prudent liquidity, diversity of sources and servicing costs. Accordingly, BSMG (Balance Sheet Management Group) of the Bank estimates daily liquidity requirement of the various business segments and manages the same on consolidated basis under ALCO guidance. With the help of Structural and Liquidity Statement prepared by the Bank, BSMG evaluates liquidity requirement and takes necessary action. Periodical reports are also placed before the ALCO for perusal and review.

A The Bank''s HQLA comprises of Excess CRR, Excess SLR, eligible foreign sovereign investments, Marginal Standing Facility (MSF) and Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) as permitted under prudential guidance and eligible Level 2 investments. The Bank has a very limited exposure to liquidity risk on account of its Derivatives portfolio. Further, the Bank believes that all inflows and outflows which might have a material impact under the liquidity stress scenario have been considered for the purpose of LCR. Further, SLR investments as well as Corporate Bond portfolio of the Bank considered for HQLA is also well diversified across various instruments and Liquid Asset Type Mix and should provide the Bank with adequate and timely liquidity.

The daily average LCR for quarter ending March 31, 2019 is 110.9% which is comfortably above RBI prescribed minimum requirement of 100%.

18.7.5 Intra-Group Exposures

The Bank has three subsidiary viz. "YES Securities (India) Limited, Yes Asset Management (India) Limited and Yes Trustee Limited ". Below mentioned are details of Intra-Group Exposure as of March 31, 2019 and March 31, 2018.

(Rs in million)

Particulars

As of March 31. 2019

As of March 31, 2018

Total amount of intra-group exposures

7,500.00

2,150.00

Total amount of top-20 intra-group exposures

7,500.00

2,150.00

Percentage of intra-group exposures to total exposure of the bank on borrowers/customers (%)

0.15%

0.05%

During the year ended 31 March, 2019 and 31 March, 2018, the intra-group exposures were within the limits specified by RBI. 18.7.6 Transfers to Depositor Education and Awareness Fund (DEAF)

(Rs. in million)

Particulars

For the year ended March 31, 2019

For the year ended March 31, 2018

Opening balance of the amount transferred to DEAF

13.53

4.70

Add: Amounts transferred to DEAF during the year

20.06

8.83

Less: Amounts reimbursed by DEAF towards claims

0.75

-

Closing balance of amounts transferred to DEAF

32.83

13.53

18.7.7 Investor Education and Protection Fund

The unclaimed dividend amount due to be transferred to the Investor Education and Protection Fund (IEPF) during the year ended March 31, 2019 has been transferred without any delay.

18.7.8 Unhedged Foreign Currency Exposure of Bank''s Customer

The Bank has in place a policy on managing credit risk arising out of unhedged foreign currency exposures of its borrowers. The objective of this policy is to maximize the hedging on foreign currency exposures of borrowers by reviewing their foreign currency product portfolio and encouraging them to hedge the unhedged portion. In line with the policy, assessment of unhedged foreign currency exposure is a part of assessment of borrowers and is undertaken while proposing limits or at the review stage. Additionally, at the time of sanctioning limits for all clients, the Bank stipulates a limit on the unhedged foreign currency exposure of the client (as a % of total foreign currency exposure sanctioned by the Bank) after considering factors such as internal rating of the borrower, size, possibility of natural hedging, sophistication of borrower and maturity of borrower''s financial systems, relative size of unhedged foreign currency exposure with respect to total borrowings of the client, etc. Further, the Bank reviews the unhedged foreign currency exposure across its portfolio on a periodic basis. The Bank also maintains incremental provision and capital towards the unhedged foreign currency exposures of its borrowers in line with the extant RBI guidelines.

The Bank has maintained provision of Rs. 537.52 million (previous year of Rs.560.49 million) and additional capital of 1,297.78 million (previous year of Rs.1,710.94 million) on account of Unhedged Foreign Currency Exposure of its borrowers as at March 31, 2019.

18.7.9 Provisioning pertaining to Fraud Accounts

The Bank has reported 107 cases of fraud in the financial year ended March 31, 2019 amounting to Rs.1,939.69 million (Previous Year: 91 cases amounting to Rs.9.51 million). The Bank has expensed off/provided for the expected loss arising from these frauds and does not have any unamortized provision.

18.7.10 Disclosure of complaints

A. Customer Complaints

Year ended March 31, 2019

Year ended March 31, 2018

i)

No. of Complaints pending at the beginning of the year

2,681

2,617

ii)

No. of Complaints received during the year

110,301

84,580

iii)

No. of Complaints redressed during the year

109,711

84,516

iv)

No. of Complaints pending at the end of the year

3,271

2,681

Auditors have relied upon the information presented by management as above.

B. Awards passed by the Banking Ombudsman

|

Year ended March 31, 2019

Year ended March 31, 2018

i)

No. of unimplemented Awards at the beginning of the year

Nil

Nil

ii)

No. of Awards passed by the Banking Ombudsman during the year

Nil

Nil

iii)

No. of Awards implemented during the year

Nil

Nil

iv)

No. of unimplemented Awards at the end of the year

Nil

Nil

18.7.11 Dues to Micro and Small Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been Rs.437.40 million worth bills which were paid with delays to micro and small enterprises. There have no demand of interest on these payments. The above is based on the information available with the Bank which has been relied upon by the auditors.

18.7.12 Securitization Transactions

The Bank has not done any securitization transactions during the year ended March 31, 2019 and March 31, 2018.

18.7.13 Letter of comfort

The Bank has not issued any letter of comfort which is not recorded as contingent liability during the year ended March 31, 2019 and March 31, 2018.

18.7.14 Software Capitalized under Fixed Assets

The Bank has capitalized software under Fixed Asset amounting to Rs.1,578.12 million and Rs.1,418.30 million during the financial year ended March 31, 2019 and March 31, 2018 respectively.

(Rs. in million)

Particulars

As at March 31. 2019

As at March 31, 2018

At cost at March 31st of preceding year

3,722.63

2,488.26

Additions during the year

1,578.12

1,418.30

Deductions during the year

(3.99)

(183.93)

Depreciation to date

(2,974.02)

(1,939.86)

Net block

2,322.74

1,782.77

18.7.15 Provision for Long-Term contracts

The Bank has a process whereby periodically all long-term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Bank has reviewed and recorded adequate provision as required under any law/accounting standards for material foreseeable losses on such long-term contracts (including derivative contracts) in the books of account and disclosed the same under the relevant notes in the financial statements.

18.7.16 PSLCs sold and purchased during the ended March 31, 2019

(Rs. in million)

Particulars

2018-19 Purchased

2017-18

Sold

Purchased

Sold

PSLC- Agriculture

-

PSLC-SF/MF

96,000.00

-

58,000.00

-

PSLC - Micro Enterprises

-

-

-

PSLC - General

68,000.00

-

12,800.00

-

18.7.17 Disclosure on complains

The Bank became aware in September 2018 through communications from stock exchanges of an anonymous whistle-blower complain alleging irregularities in the Bank''s operations, potential conflicts of interests in relation to the former MD and CEO and allegations of incorrect NPA classification. The Bank conducted an internal enquiry of these allegations, which was carried out by management and supervised by the Board of Directors. The enquiry resulted in a report that was reviewed by the Board in November 2018. Based on further inputs and deliberations in December 2018, the Audit Committee of the Bank engaged an external firm to independently examine the matter. The Bank, at the direction of the Audit Committee and with the assistance of this external firm, is continuing to analyze the allegations in the whistle-blower complaint and work is currently ongoing. Based on work done and findings till date, the Bank has not identified any material financial statement implications. The Bank will consider the implications of ongoing work in the next financial year as the examination of this matter is completed.

18.7.18 Description of contingent liabilities

Sr. No.

Contingent Liabilities

Brief

1.

Claims against the Bank not acknowledged as debts

The Bank is a party to various legal and tax proceedings in the normal course of business. The Bank does not expect the outcome of these proceedings to have a material adverse effect on the Bank''s financial conditions, results of operations or cash flows.

2.

Liability on account of forward exchange and derivative contracts

The Bank enters into foreign exchange contracts, currency options, forward rate agreements, currency swaps and interest rate swaps with inter-bank participants and customers. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to exchange cash flows by way of interest/principal in one currency against another, based on predetermined rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows. The notional amounts of financial instruments of such foreign exchange contracts and derivatives provide a basis for comparison with instruments recognized on the balance sheet but do not necessarily indicate the amounts of future cash flows involved or the current fair value of the instruments and, therefore, do not indicate the Bank''s exposure to credit or price risks. The derivative instruments become favorable (assets) or unfavorable (liabilities) as a result of fluctuations in market rates or prices relative to their terms. The aggregate contractual or notional amount of derivative financial instruments on hand, the extent to which instruments are favorable or unfavorable and, thus the aggregate fair values of derivative financial assets and liabilities can fluctuate significantly.

3.

Guarantees given on behalf of constituents, acceptances, endorsements and other obligations

As a part of its commercial banking activities the Bank issues documentary credit and guarantees on behalf of its customers. Documentary credits such as letters of credit enhance the credit standing of the customers of the Bank. Guarantees generally represent irrevocable assurances that the Bank will make payments in the event of the customer failing to fulfill its financial or performance obligations.

4.

Other items for which the Bank is contingently liable

Purchase of securities pending settlement, capital commitments, amount deposited with RBI under Depositor Education Awareness Fund (DEAF), bill re-discounting, Foreign Exchange Contracts (Tom & Spot)

5

PF Liability

In February 2019, the honorable Supreme Court of India in its judgment clarified that certain special allowances should be considered to measure obligations under Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 (the PF Act). The Bank has been legally advised that there are interpretative challenges on the application of judgment retrospectively and as such does not consider there is any probable obligations for past periods. Due to imperative challenges, the Bank has not disclosed contingent liability amount for past liability.

Refer Schedule 12 for amounts relating to contingent liability.

Prior period comparatives previous year''s figures have been regrouped where necessary to conform to current year classification.

For B S R & Co. LLP

For and on behalf of the Board of Directors

Chartered Accountants

YES BANK Limited

Firm''s Registration No: 101248W/W-100022

Venkataramanan Vishwanath

Ravneet Gill

Brahm Dutt

Ajai Kumar

Partner

Managing Director & CEO

Chairman

Director

Membership No: 113156

(DIN: 00091746)

(DIN: 05308908)

(DIN: 02446976)

Uttam Prakash Agarwal

Raj Ahuja

Shivanand R. Shettigar

Director (DIN: 00272983)

Group Chief Financial Officer

Group Company Secretary

Mumbai

April 26, 2019


Mar 31, 2018

Note:

1)    Denotes absolute value of loss which the Bank could suffer on account of a change in interest rates by 1% which however doesn’t capture the off-setting exposures between interest rate and currency derivatives.

2)    PV01 exposures reported above may not necessarily indicate the interest rate risk the Bank is exposed to, given that PV01 exposures in Investments (which may offset the PV01 reflected above) do not form part of the above table.

3)    The notional principal amount of foreign exchange contracts classified as trading at March 31, 2018 amounted to Rs,2,999,631.85 millions (previous year: Rs,1,631,110.62 millions). For these trading contracts, at March 31, 2018, marked to market position was asset of Rs,21,147.95 millions (previous year: Rs,35,428.99 millions) and liability of Rs,20,920.03 millions (previous year: Rs,40,014.63 millions). The notional principal amount of foreign exchange contracts classified as hedging at March 31, 2018 amounted to Rs,816.98 millions (previous year: Rs,2,329.98 millions). Credit exposure on forward exchange contracts at March 31, 2018 was Rs,93,577.45 millions (previous year: Rs,66,733.58 millions) of which exposure on CCIL is Rs,56,459.69 millions (previous year: Rs,35,132.52 millions).

The Bank does not have any advances which are outstanding in the books of the branches, but have been written-off (fully or partially) at Head Office level.

4.    Provision coverage Ratio

The provision coverage ratio of the Bank as at March 31, 2018 computed as per the RBI guidelines is 50.02% (previous year: 46.88%).

5.    Divergence in Asset Classification and Provisioning for NPAs

-    The Bank classifies performing and non-performing advances (NPAs) as per the RBI’s Prudential Norms on Income recognition, Asset Classification and Provisioning.

-    Based on application of RBI’s prudential norms as stated above, the Bank classified and made the prescribed provisions against the NPAs as at the end of 31stMarch, 2017.

-    As part of the Risk Based Supervision (RBS) exercise for FY 2016-17 concluded in October 2017, the RBI has pointed out certain retrospective divergence in the Bank’s asset classification and provisioning as on 31st March 2017. In conformity with the RBI circulars DBR.BP.BC.NO.63/21.04.018/2016-17 issued on April 18, 2017, SEBI circular issued on July 18, 2017 and as per approval from the Board of Directors at its Board Meeting held on October 26, 2017,

The net current impact of the aforementioned retrospective slippages due to divergence noted by RBI in October 2017 has been duly reflected in the results for the year ended March 31, 2018.

* includes cash received from ARC for loans sold ** Recorded at Net book value of Rs,5,681.97 millions *** Corresponding provision carried is 40%

6. Concentration of NPAs

Exposure (Funded + Non Funded) of the Bank to top four NPA is Rs,14,510.13 millions as at March 31, 2018 (previous year: Rs,15,553.78 millions).

Notes:-

1.    There are no SME cases which have been restructured during the year ended March 31, 2018.

2.    There have been 3 accounts upgraded of restructured advances during the year ended March 31, 2018.

3.    The outstanding amount and number of borrowers as at March 31, 2018 is after considering recoveries and sale of assets during the year.

4.    The above table pertains to advances and does not include investment in shares of net book value of XT1 millions in the amount outstanding.

5.    The provision in the above table includes general loan loss provision and other provisions held on the restructured advances.

6.    Additional facilities availed by borrowers in existing restructured accounts are disclosed under “Fresh restructuring during the year” and partial repayments in existing restructured accounts are disclosed under “Write-offs/sale/recovery of restructured accounts”, however, for the purpose of arithmetical accuracy, the number of existing borrowers availing additional facility or partial repayments have been ignored for presentation purpose.

7.    For the purpose of arithmetical accuracy as required by Para 3.4.2. (xii) of RBI circular no DBR.BP.BC.No.23/21.04.018/2015-16 movement in provisions in the existing restructured account as compared to opening balance, is disclosed under column fresh restructuring(for increase in provision) and write-off/sale/recovery(for decrease in provision) during the year and are not comparable with the additional facilities availed and partial recovery disclosed under the respective columns.

*As per the extant RBI guidelines, the Bank has not recognized the gains in the financial statements and has recorded the Security Receipts at Net Book Value (NBV). If the sale value is lower than the net book value, the entire loss has been written off in the year of sale.

* Includes all Security Receipts received by Bank on sale of assets as permitted under RBI circular DBOD.BP.BC.No. 98/21.04.132/2013-14 dated February 26, 2014.

Provision on standard advances is Rs,9,493.91 millions and Rs,7,806.48 millions as at March 31, 2018 and March 31, 2017 respectively.

During the year, the Bank has made certain modifications to its Master Rating scale and Credit Labeling mechanism for establishing additional general provision on standard advances and has fully adopted the requirements of RBI’s circular dated April 18, 2017 Ref no RBI/2016-17/282-DBR.No.BP.BC.64/21.04.048/2016-17 that requires banks to make provisions at higher rates in respect of standard advances to stressed sectors of the economy. Also, the Bank has made provision on accounts under the Insolvency and Bankruptcy Code (IBC) as identified by RBI.

Classification of assets and liabilities under the different maturity buckets is based on the same estimates and assumptions as used by the Bank for compiling the return submitted to the RBI.

Maturity profile of foreign currency assets and liabilities is excluding Off Balance Sheet item.

7. Exposures

The Bank has lending to sectors, which are sensitive to asset price fluctuations. Such sectors include capital market and real estate.

8.    Details of Single Borrower Limit (SBL) and Group Borrower Limit (GBL)

During the year ended March 31, 2018 and March 31, 2017, the Bank has complied with the Reserve Bank of India guidelines on single borrower and borrower group limit. As per the exposure limits permitted under the extant RBI regulation, the Bank, with the approval of the Board of Directors, can enhance exposure to a single borrower or borrower group by a further 5 percent of capital funds.

During the year ended March 31, 2018, with the prior approval of the Board of Directors, the Bank sanctioned enhancement in single borrower limit for Reliance Industries Limited (Reliance Group) within the ceiling of 20% of Capital Funds. As on March 31, 2018, the exposure to Reliance Industries Limited as a percentage of capital funds was 12.3%.

During the year ended March 31, 2018, with the prior approval of the Board of Directors, the Bank sanctioned enhancement in single borrower limit for Essar Oil Limited (Rosneft Trafigura-UCP Consortium Group) within the ceiling of 20% of Capital Funds. As on March 31, 2018, the exposure to Essar Oil Limited (Rosneft Trafigura-UCP Consortium Group) as a percentage of capital funds was 10.6%.

During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned enhancement in single borrower limit for Nirma Limited within the ceiling of 20% of Capital Funds. As on March 31, 2017, the exposure to Nirma Limited as a percentage of capital funds was 0.1%.

During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned enhancement in single borrower limit for Reliance Ports and Terminals Limited (infrastructure company) within the ceiling of 25% of Capital Funds. As on March 31, 2017, the exposure to Reliance Ports and Terminals Limited as a percentage of capital funds was 4.6%.

During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned enhancement in group borrower limit for Reliance Group within the ceiling of 55% of Capital Funds. As on March 31, 2017, the exposure to Reliance Group as a percentage of capital funds was 21%.

During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned enhancement in group borrower limit for Tata Group within the ceiling of 55% of Capital Funds. As on March 31, 2017, the exposure to Tata Group as a percentage of capital funds was 18.3%.

9.    Details of factoring exposure

The factoring exposure of the Bank as on March 31, 2018 is Rs,7,362.30 millions (previous year: Rs,4,426.83 millions)

10.    Fees/ Remuneration received from bancassurance

Bank has earned Rs,767.80 millions from bancassurance business during year ended March 31, 2018 (previous year: Rs,1,003.58 millions).

11.    Concentration of Deposits

As at March 31, 2018, the deposits of top 20 depositors aggregated to Rs,244,366.30 millions (previous year: Rs,158,244.68 millions) (excluding certificate of deposits, which are tradable instruments), representing 12.17% (previous year: 11.08%) of the total deposit base.

12.    Concentration of Advances

As at March 31, 2018 the top 20 advances aggregated to Rs,484,353.89 millions (previous year: Rs,330,579.80 millions), representing 12.72% (previous year: 12.38%) of the total advances. For this purpose, advance is computed as per definition of Credit Exposure in RBI Master Circular on Exposure Norms DBR.No.Dir.BC.12/13.03.00/2015-16 dated July 1, 2015.

13.    Concentration of Exposures

As at March 31, 2018 the top 20 exposures aggregated to Rs,556,575.44 millions (previous year: Rs,361,516.54 millions), representing 13.68% (previous year: 12.55%) of the total exposures. Exposure is computed as per definition of Credit and Investment Exposure in RBI Master Circular on Exposure Norms DBR.No.Dir.BC.12/13.03.00/2015-16 dated July 1, 2015.

14.    Sponsored SPVs

The Bank has not sponsored any SPV and hence there is no consolidation due to SPVs in Bank’s books.

15.    Credit default swaps

The Bank has not transacted in credit default swaps during the year ended March 31, 2018 (previous year: Nil).

16.    Credit/Debit card reward points

During financial year ending March 31, 2018, the Bank has provided Rs,77.70 millions for accumulated rewards points on credit and debit card (previous year: Rs,34.42 millions) using an actuarial valuation method by employing an independent actuary.

17.    Corporate Social Responsibility (CSR)

a) Amount required to be spent by the Bank on CSR during the year was Rs,772.21 millions (previous year: Rs,600.17 millions).

The following table sets out the funded status of the Gratuity Plan and the amounts recognized in the Bank’s financial statements as of March 31, 2018 and March 31, 2017:

The Bank has entire contribution of Gratuity Fund as Investments with Insurance Companies.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Pursuant to the guidelines issued by RBI on AS-17 (Segment Reporting) - Enhancement of Disclosures dated April 18,

2007, effective from period ending March 31, 2008, the following business segments have been reported.

-    Treasury: Includes investments, all financial markets activities undertaken on behalf of the Bank’s customers, Proprietary trading, maintenance of reserve requirements and resource mobilization from other banks and financial institutions.

-    Corporate/Wholesale Banking: Includes lending, deposit taking and other services offered to corporate customers.

-    Retail Banking: Includes lending, deposit taking and other services offered to retail customers.

-    Other Banking Operations: Includes para banking activities like third party product distribution, merchant banking etc.

Other banking operations includes income from banc assurance business '1,003.58 millions during year ended March 31, 2017.

Notes for segment reporting:

1.    The business of the Bank is concentrated largely in India. Accordingly, geographical segment results have not been reported in accordance with AS-17 (Segment Reporting).

2.    I n computing the above information, certain estimates and assumptions have been made by the Management and have been relied upon by the auditors.

3.    Income, expense, assets and liabilities have been either specifically identified with individual segment or allocated to segments on a systematic basis or classified as unallocated.

4.    The unallocated assets Includes tax paid in advance/tax deducted at source and deferred tax asset.

5.    The unallocated liabilities include Share Capital, Reserves & Surplus and Tier 1 bond borrowings.

6.    Inter-segment transactions have been generally based on transfer pricing measures as determined by the Management.

18. Related Party Disclosures

The Bank has transactions with its related parties comprising of subsidiary, key management personnel and the relative of key management personnel

Subsidiary

Yes Securities (India) Limited

Yes Asset Management (India) Limited Yes Trustee Limited

Individuals having significant influence:

Mr. Rana Kapoor, Managing Director & CEO

Key Management Personnel (‘KMP’) (Whole time Director)

Mr. Rana Kapoor, Managing Director & CEO

Related party to key management personnel

Late Mrs. Sheela Kapoor

Mrs. Raakhe Kapoor Tandon (transaction till March 31, 2017)

*    Represents outstanding as of March 31, 2017

#    In Financial Year 2016-17 there was only one related party in the said category, hence the Bank has not disclosed the details of transactions in accordance with circular issued by the RBI on March 29, 2003 “Guidance on compliance with the accounting standards by banks”.

19. Operating Leases

Lease payments recognized in the profit and loss account for the year ended March 31, 2018 was Rs,4,041.06 millions (previous year: Rs,3,334.71 millions).

The Bank does not have any provisions relating to contingent rent.

The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements. There are no undue restrictions or onerous clauses in the agreements.

The Bank reports basic and diluted earnings per equity share in accordance with Accounting Standard (AS) 20, “Earnings Per Share”. The dilutive impact is mainly due to stock options granted to employees by the Bank.

The difference between weighted average number of equity shares outstanding between basic and diluted in the above mentioned disclosure is on account of outstanding ESOPs.

Basic earnings per equity share has been computed by dividing net profit for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share has been computed by dividing the net profit for the year attributable to the equity shareholders by the weighted average number of equity shares and dilutive potential equity shares outstanding during the year, except where the results are anti-dilutive. The dilutive impact is on account of stock options granted to employees by the Bank. There is no impact of dilution on the profits in the current year and previous year.

All shares and per share information in the above table are restated at Rs,2 per equity shares to reflect the effect of sub-division for the periods presented.

20. ESOP disclosures

Statutory Disclosures Regarding Joining Stock Option Scheme:

The Bank has Five Employee Stock Option Schemes 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).

The schemes include provisions for grant of options to eligible employees of the Bank and its subsidiaries/affiliates. All the aforesaid schemes have been approved by the Board Remuneration Committee and the Board of Directors and were also approved by the members of the Bank. All these schemes are administered by the Board Remuneration Committee.

JESOP II and JESOP III were in force for employees joining the Bank up to March 31, 2006 and March 31, 2007 respectively.

YBL JESOP V is in force for employees joining the Bank from time to time. Under JESOP V, 50% options vest takes place at the end of three years and remaining 50% at the end of five years from the date of Grant.

PESOP I, PESOP II and PESOP II - 2010 are Performance Stock Option Plans. Under PESOP I, 25% of the options granted would vest at the end of each year from the date of grant. Under PESOP II, 30% of the granted options vest at the end of first year, 30% vest at the end of second year and balance 40% vest at the end of third year. Under YBL PESOP II - 2010, 30% of the granted options vest at the end of the third year, 30% vest at the end of the fourth year and balance 40% vest at the end of the fifth year.

Further, grants under PESOP II had been discontinued with effect from January 20, 2010.

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.

The Bank has charged Nil amount, being the intrinsic value of the stock options granted for the year ended March 31, 2018 and March 31, 2017. 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 Rs,414.98 millions (previous year: Rs,464.49 millions), the basic earnings per share would have been Rs,18.24 (previous year: Rs,15.56) per share instead of Rs,18.43 (previous year: Rs,15.78) per share; and diluted earnings per share would have been Rs,17.88 (previous year: Rs,15.14) per share instead of Rs,18.06 ( previous year: Rs,15.35) per share.

The deferred tax asset of Rs,8,717.59 millions as at March 31, 2018 and Rs,6,029.82 millions as at March 31, 2017, is included

21. OTHER DISCLOSURES

22. Disclosure on Remuneration

a. Information relating to the composition and mandate of the Nomination & Remuneration Committee.-

The Board of Directors of the Bank through its Nomination and Remuneration Committee (N&RC) shall exercise oversight & effective governance over the framing and implementing of the Compensation policy. The N&RC shall comprise a minimum of 3 nonexecutive Directors, majority being Independent Directors.

Composition of the N&RC of the Bank as on March 31, 2018 is as follows:

Mr. Brahm Dutt, Independent Director (Chairman)

Mr. Mukesh Sabharwal, Independent Director

Mr. Ajai Kumar, Non-Executive NonIndependent Director

The roles and responsibilities of the N&RC are as under-

To review the current Board composition, its governance framework and determine future requirements and making recommendations to the Board for approval;

To examine the qualification, knowledge, skill sets and experience of each director

vis-a-vis the Bank’s requirements and their effectiveness to the Board on a yearly basis and accordingly recommend to the Board for the induction of new Directors;

To review:

a.    The composition of the existing Committees of the Board and to examine annually whether there is any need to have a special committee of directors to meet the business requirements of the Bank and accordingly recommend to the Board for formation of a special committee.

b.    Review the Terms of Reference of the Board Level Committees and recommend the changes therein, if any, to the Board;

To scrutinize nominations for Independent/ Non-Executive Directors with reference to their qualifications and experience and making recommendations to the Board for appointment/filling of vacancies;

To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal;

To Formulate criteria for evaluation of performance of independent directors and the board of directors;

To carry out evaluation of every director’s performance;

Whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors;

To validate ‘fit and proper’ status of all Directors on the Board of the Bank in terms of the Guidelines issued by the RBI or other regulatory authorities;

To develop and recommend to the Board Corporate Governance guidelines applicable to the Bank for incorporating best practices;

To implement policies and processes relating to Corporate Governance principles;

To formulate the criteria for determining qualifications, positive attributes and independence of a director;

To devise a Policy on Board diversity;

To recommend to the Board a policy relating to, the remuneration for the directors, key managerial personnel and other employees including performance/achievement bonus, perquisites, retirals, sitting fee, etc.;

To review the Bank’s overall compensation structure and related polices with a view to attract, motivate and retain employees and review compensation levels vis-a-vis other Banks and the industry in general;

To ensure the following while formulating the policy on the aforesaid matters:

a.    the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors, key managerial personnel and senior management of the quality required to run the company successfully;

b.    relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c.    remuneration to Whole time directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long- term performance objectives appropriate to the working of the company and its goals.

To consider grant of Stock Options to employees including employees of subsidiaries and administer and supervise the Employee Stock Option Plans;

To function as the Compensation Committee as prescribed under the SEBI (Share Based Employee Benefits) Regulations, 2014 and is authorized to allot shares pursuant to exercise of Stock Options by employees;

To review the Human Capital Capacity Planning on annual basis;

To review the HCM Policies and provide suitable guidance for additions/ modification/ deletions, if any;

To review the Succession Planning; and

To perform any other functions or duties as stipulated by the Companies Act, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges and any other regulatory authority or under any applicable laws as may be prescribed from time to time.

b. Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy-

The Bank has framed Compensation and benefit policy based on the guidelines contained in the RBI circular DBOD No. BC.72/29.67.001/2011-12 dated January 13, 2012 which is approved by the Nomination and Remuneration Committee on January 7, 2013. The remuneration of MD&CEO/Whole time Directors will be in accordance with the above mentioned circular and shall be reviewed basis RBI guidelines issued from time to time and approved by N&RC before obtaining Regulatory approvals.

The compensation philosophy of the Bank is aligned to the organizational values aimed at encouraging Professional Entrepreneurship and reinforcing a strong culture promoting meritocracy, performance, potential and prudent risk taking.

The Bank’s Remuneration policy is to position its pay structure competitively in relation to the market to be able to attract and retain critical talent. The compensation strategy clearly endeavors to differentiate performance significantly and link the same with quality and quantum of rewards. The Bank also strives to create long term wealth creation opportunities through stock option schemes.

Human Capital Management shall review the policy annually or as required, based on changes in statutory, regulatory requirements and industry practices pertaining to Compensation and Benefits.

c. Description of the ways in which current and future risks are taken into account in the remuneration processes. It should include the nature and type of the key measures used to take account of these risks The broad factors taken into account for the Annual Review /revision of Fixed Compensation (TCC) & Performance Bonus are:

1.    Individual performance based on the Annual Performance Review (APR) process of the Bank.

2.    Business Unit performance in terms of financial outcomes, productivity, etc.

3.    Consideration of all types of risk factors and shall be symmetrical with risk outcomes as well as sensitive to the time horizon of risk.

4.    Profitability of the Bank.

5.    Industry Benchmarking and consideration towards cost of living adjustment/ inflation

The Bank subscribes to a ‘Sum-of-Parts’ compensation methodology, which is reflective of the Bank’s commitment and philosophy of creating and sharing value with its employee partners.

The sum-of-parts compensation comprises: Fixed Compensation

Variable Compensation in the form of Performance Bonus

Employee Stock Option Plans (ESOP)

The Board of Directors of the Bank through its Nomination and Remuneration Committee (N&RC) shall exercise oversight & effective governance over the framing and implementing of the Compensation policy. Human Capital Management under the guidance of MD & CEO shall administer the Compensation and

Benefits structure in line with Industry practices and statutory requirements as applicable from time to time.

d. Description of the ways in which the Bank seeks to link performance during a performance measurement period with levels of remuneration and a discussion of the bank’s policy and criteria for adjusting deferred remuneration before vesting and after vesting.

The Bank ensures that the compensation remains adjusted for all types of risk, symmetrical with risk outcomes as well as sensitive to the time horizon of risk. Further, the compensation in all forms will be consistent with the risk alignment.

One of the key factors to be considered for the Annual Review /revision of Fixed Compensation (TCC) & Performance Bonus includes individual performance based on the Annual Performance Review (APR) process of the Bank. The evaluation on risk management parameters is an integral part of the Annual Performance Review process, forming part of Key Result Areas of the executives with suitable weight age. The inputs for assessment on these parameters will be independently provided by the Risk Management function of the Bank.

For the services pertaining to financial year 2016-17 where variable pay is 50% or more, 4060% shall be deferred over minimum period of 3 years. In the event of a negative contribution, deferred compensation shall be subject to appropriate malus/claw back arrangements as decided by the Board Remuneration Committee. Guaranteed bonus shall not be a part of the compensation plan.

The compensation for executives in Risk Control and Compliance functions shall be independent of the business areas they oversee.

The Bank shall not provide any facility or funds or permit employees to insure or hedge their compensation structure to offset the risk alignment effects embedded in their compensation arrangement.

e.    Description of the different forms of variable remuneration (i.e. cash, shares, ESOPs and other forms) that the Bank utilizes and the rationale for using these different forms.

The Bank subscribes to a ‘Sum-of-Parts’ compensation methodology, which is reflective of the commitment and philosophy of creating and sharing value with the employee partners. The sum-of-parts compensation for executives comprises:

Fixed Compensation (Total Cost to Company-TCC) - Includes value of perquisites.

Variable compensation in the form of Performance /Deferred Bonus - Variable pay shall be in the form of Performance Bonus which will be calculated as a percentage of Fixed Pay. The evaluation on risk management parameters is an integral part of the Annual Performance Review process, forming part of Key Result Areas of the executives with suitable weight age. The inputs for assessment on these parameters will be independently provided by the Risk Management function of the Bank.

Employee Stock Options Plans - These are formulated on a mid to long term basis by the Bank in accordance with SEBI and other Regulatory guidelines. The grant of ESOP shall be under approval from MD & CEO, which shall be subsequently ratified by the Board Remuneration Committee.

f.    Quantitative Disclosures on Remuneration for MD & CEO and other risk takers

There were 4 meetings of the N&RC held during the year ended March 31, 2018. The Bank had paid a remuneration of '0.60 millions to the members of the N&RC for attending the meetings of the N&RC.

Note:

1.    Amounts disclosed represents variable pay paid during the year ended March 31,2018 and March 31,2017 is for services rendered by the risk takers during the year March 31, 2017 and March 31,2016 respectively, as the bonus pool for the year ended March 31, 2018 has not yet been allocated and accordingly, the deferred component for the risk takers is yet to be determined.

2.    Compensation for MD & CEO is as approved by the RBI and paid by the Bank to the MD & CEO. Compensation for other risk takers is as approved by the Bank.

3.    For the Financial Year ended March 31, 2018, 6,50,000 esops were issued to 6 risk takers (previous year: 75,000 esops to 1 risktaker)

23.    Movement in Floating Provisions

The Bank has not created or utilized any floating provisions during the financial year ended March 31, 2018 and financial year ended March 31, 2017. The floating provision as at March 31, 2018 was ' Nil (previous year: ' Nil).

24.    Drawdown on Reserves

During the financial year ended March 31, 2018, the Bank has not drawn down any reserve. (previous year: ' Nil).

The Bank measures and monitors the LCR in line with the Reserve Bank of India’s circular dated June 09, 2014 and November 28, 2014 on “Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR),Liquidity Risk Monitoring Tools and LCR Disclosure Standards” as amended for “Prudential Guidelines on Capital Adequacy and Liquidity Standards” dated March 31, 2015. The LCR guidelines aims to ensure that a bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario. At a minimum, the stock of liquid assets should enable the bank to survive until day 30 of the stress scenario, by which time it is assumed that appropriate corrective actions can be taken. Banks are required to maintain High Quality Liquid Assets of a minimum of 100% of its Net Cash Outflows by January 01, 2019. However, with a view to provide transition time, the guidelines mandate a minimum requirement of 60% w.e.f. January 01, 2015 and a step up of 10% every year to reach the minimum requirement of 100% by January 01, 2019. The LCR applicable from January 01, 2018 onwards is 90%.

The adequacy in the LCR maintenance is an outcome of a conscious strategy of the Bank towards complying with LCR mandate ahead of the stipulated timelines. The maintenance of LCR, both on end of period and on a average basis, has been on account of multiple factors viz. increase in excess SLR, existing eligibility in Corporate Bond Investments, increase in Retail deposits and increase in non callable deposits.

The Board of Directors of the Bank has empowered ALCO (Top Management Executive Committee) to monitor and strategize the Balance Sheet profile of the Bank. In line with the business strategy,

ALCO forms an Interest Rate/Liquidity view for the bank with the help of the economic analysis provided by the in-house economic research team of the bank. ALCO of the Bank channelizes various business segments of the Bank to target good quality asset and liability profile to meet the Bank’s profitability as well as Liquidity requirements with the help of robust MIS and Risk Limit architecture of the Bank.

Funding strategies are formulated by the ALCO of the Bank. The objective of the funding strategy is to achieve an optimal funding mix which is consistent with prudent liquidity, diversity of sources and servicing costs. Accordingly, BSMG (Balance Sheet Management Group) of the Bank estimates daily liquidity requirement of the various business segments and manages the same on consolidated basis under ALCO guidance. With the help of Structural and Liquidity Statement prepared by the Bank, BSMG evaluates liquidity requirement and takes necessary action. Periodical reports are also placed before the ALCO for perusal and review.

The Bank’s HQLA comprises of Excess CRR, Excess SLR, eligible foreign sovereign investments, Marginal Standing Facility (MSF) and Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) as permitted under prudential guidance and eligible Level 2 investments. The Bank has a very limited exposure to liquidity risk on account of its Derivatives portfolio. Further, the Bank believes that all inflows and outflows which might have a material impact under the liquidity stress scenario have been considered for the purpose of LCR. Further, SLR investments as well as Corporate Bond portfolio of the Bank considered for HQLA are well diversified across various instruments and Liquid Asset Type are likely to provide the Bank with adequate and timely liquidity.

The daily average LCR for quarter ending March 31, 2018 is 102.1% which is above RBI prescribed minimum requirement of 90%.

The Bank has started classifying deposit as operational deposit based on the ALCO approved methodology w.e.f. from January 01, 2018 for the purpose of LCR computation.

The Bank has three subsidiaries viz. “YES Securities (India) Limited, Yes Asset Management (India) Limited and Yes Trustee Limited.” Below mentioned are details of Intra-Group Exposure as of March 31, 2018 and March 31, 2017.

During the year ended 31 March, 2018 and 31 March, 2017, the intra-group exposures were within the limits specified by RBI.

25.    Investor Education and Protection Fund

The unclaimed dividend amount due to be transferred to the Investor Education and Protection Fund (IEPF) during the year ended March 31, 2018 has been transferred without any delay

26.    Unhedged Foreign Currency Exposure of Bank’s Customer

The Bank has in place a policy on managing credit risk arising out of unhedged foreign currency exposures of its borrowers. The objective of this policy is to maximize the hedging on foreign currency exposures of borrowers by reviewing their foreign currency product portfolio and encouraging them to hedge the unhedged portion. In line with the policy, assessment of unhedged foreign currency exposure is a part of assessment of borrowers and is undertaken while proposing limits or at the review stage. Additionally, at the time of sanctioning limits for all clients, the Bank stipulates a limit on the unhedged foreign currency exposure of the client (as a % of total foreign currency exposure sanctioned by the Bank) after considering factors such as internal rating of the borrower, size, possibility of natural hedging, sophistication of borrower and maturity of borrower’s financial systems, relative size of unhedged foreign currency exposure with respect to total borrowings of the client, etc. Further, the Bank reviews the unhedged foreign currency exposure across its portfolio on a periodic basis. The Bank also maintains incremental provision and capital towards the unhedged foreign currency exposures of its borrowers in line with the extant RBI guidelines.

The Bank has maintained provision of '560.49 millions (previous year: '558.08 millions) and additional capital of '1,710.94 millions (previous year: '2,413.54 millions) on account of Unhedged Foreign Currency Exposure of its borrowers as at March 31, 2018.

27. Provisioning pertaining to Fraud Accounts

The Bank has reported 91 cases of fraud in the financial year ended March 31, 2018 amounting to '9.51 millions (previous year: 61 cases amounting to '160.77 millions). The Bank has expensed off/ provided for the expected loss arising from these frauds and does not have any unamortized provision.

28.    Dues to Micro and Small Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been no reported cases of interest payments due to delays in such payments to Micro, Small and Medium enterprises.

Auditors have relied upon the above management assertion.

29.    Securitization Transactions

The Bank has not done any securitization transactions during the year ended March 31, 2018 and March 31, 2017.

30.    Letter of comfort

The Bank has not issued any letter of comfort which is not recorded as contingent liability during the year ended March 31, 2018 and March 31, 2017.

31. Provision for Long Term contracts

The Bank has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Bank has reviewed and recorded adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) in the books of account and disclosed the same under the relevant notes in the financial statements.

 

 


Mar 31, 2017

Note:

1) Denotes absolute value of loss which the Bank could suffer on account of a change in interest rates by 1% which however doesn''t capture the off-setting exposures between interest rate and currency derivatives.

2) PV01 exposures reported above may not necessarily indicate the interest rate risk the Bank is exposed to, given that PV01 exposures in Investments (which may offset the PV01 reflected above) do not form part of the above table.

3) The notional principal amount of foreign exchange contracts classified as trading at March 31, 2017 amounted to Rs,1,631,110.62 million (previous year: Rs,1,752,326.72 million). For these trading contracts, at March 31, 2017, marked to market position was asset of Rs,35,428.99 million (Previous year: Rs,18,477.52 million) and liability of Rs,40,014.63 million (Previous Year: Rs,18,406.34 million).The notional principal amount of foreign exchange contracts classified as hedging at March 31, 2017 amounted to Rs,2,329.98 million (previous year: Rs,13,583.12 million). Credit exposure on forward exchange contracts at March 31, 2017 was Rs,66,733.58 million (Previous Year: Rs,54,081.82 million) of which exposure on CCIL is Rs,35,132.52 million (Previous Year: Rs,33,307.68 million).

The Bank does not have any advances which are outstanding in the books of the branches, but have been written-off (fully or partially) at Head Office level.

4. PROVISION COVERAGE RATIO

The provision coverage ratio of the Bank as at March 31, 2017 computed as per the RBI guidelines is 46.88% (previous year 62.02%)

The table above is in conformity with RBI circular issued on April 18, 2017 and as per approval from Board of Directors at its Board meeting held on April 19, 2017, the audited financial statements of the Bank for the year ended March 31, 2017, duly incorporates the current impact of divergences observed recently by RBI

a) With ongoing remedial actions undertaken by the Bank during FY 16-17, there have been several reductions / exits / improvement in account conduct which has reduced the overall Gross NPA outstanding to Rs,10,399.76 million as on March 31, 2017.

After duly factoring the provision impact of divergences, Banks credit cost for FY 17 is at 53 basis points

5. DETAILS OF SINGLE BORROWER LIMIT (SBL) AND GROUP BORROWER LIMIT (GBL)

During the year ended March 31, 2017 and March 31, 2016, the Bank has complied with the Reserve Bank of India guidelines on single borrower and borrower group limit. As per the exposure limits permitted under the extant RBI regulation, the Bank, with the approval of the Board of Directors, can enhance exposure to a single borrower or borrower group by a further 5 percent of capital funds.

During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned enhancement in single borrower limit for Nirma Limited within the ceiling of 20% of Capital Funds. As on March 31, 2017, the exposure to Nirma Limited as a percentage of capital funds was 0.1%.

During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned enhancement in single borrower limit for Reliance Ports and Terminals Limited within the ceiling of 25% of Capital Funds. As on March 31, 2017, the exposure to Reliance Ports and Terminals Limited as a percentage of capital funds was 4.6%.

During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned enhancement in group borrower limit for Reliance Group within the ceiling of 55% of Capital Funds. As on March 31, 2017, the exposure to Reliance Group as a percentage of capital funds was 21.0%.

During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned enhancement in group borrower limit for Tata Group within the ceiling of 55% of Capital Funds. As on March 31, 2017, the exposure to Tata Group as a percentage of capital funds was 18.3%.

During the year ended March 31, 2016, the Bank has not exceeded regulatory single borrower or group borrower exposure limit.

6. DETAILS OF FACTORING EXPOSURE

The factoring exposure of the Bank as on March 31, 2017 is Rs,4,426.83 million (previous year: Rs,1,289.26 million)

7. DISCLOSURE OF PENALTIES IMPOSED BY RBI

During the financial year ended March 31, 2017 and March 31, 2016, there were no penalties imposed on the Bank by RBI.

8. FEES/ REMUNERATION RECEIVED FROM BANCASSURANCE

Bank has earned Rs,1,003.58 million from banc assurance business during year ended March 31, 2017 (previous year: Rs,564.96 million).

9. CONCENTRATION OF DEPOSITS

As at March 31, 2017, the deposits of top 20 depositors aggregated to Rs,158,244.68 million (previous year: Rs,131,000.94 million) (excluding certificate of deposits, which are tradable instruments), representing 11.08% (previous year: 11.73%) of the total deposit base.

10. CONCENTRATION OF ADVANCES

As at March 31, 2017 the top 20 advances aggregated to Rs,330,579.80 million (previous year Rs,276,325.91 million), representing 12.38% (previous year 13.79%) of the total advances. For this purpose, advance is computed as per definition of Credit Exposure in RBI Master Circular on Exposure Norms DBR.No.Dir.BC.12/13.03.00/2015-16 dated July 1, 2015.

11. CONCENTRATION OF EXPOSURES

As at March 31, 2017 the top 20 exposures aggregated to Rs,361,516.54 million (previous year Rs,287,740.91 million), representing 12.55% (previous year 13.24%) of the total exposures. Exposure is computed as per definition of Credit and Investment Exposure in RBI Master Circular on Exposure Norms DBR.No.Dir.BC.12/13.03.00/2015-16 dated July 1, 2015.

12. OVERSEAS ASSETS, NPAS AND REVENUE

The below table shows total assets, NPAs and revenue for the overseas branches of the Bank

13. SPONSORED SPVS

The Bank has not sponsored any SPV and hence there is no consolidation due to SPVs in Bank''s books.

14. CREDIT / DEBIT CARD REWARD POINTS

During financial year ending March 31, 2017, the Bank has provided Rs,34.42 million for accumulated rewards points on credit and debit card (previous year nil) using an actuarial valuation method by employing an independent actuary.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR)

a) Amount required to be spent by the Bank on CSR during the year Rs,600.17 million (previous year Rs,477.47 million)

16. STAFF RETIREMENT BENEFITS

The following table sets out the funded status of the Gratuity Plan and the amounts recognized in the Bank''s financial statements as of March 31, 2017 and March 31, 2016:

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Net gratuity cost for the year ended March 31, 2017 and March 31, 2016 comprises the following components:

The Bank is yet to determine future contribution to Gratuity fund for Financial Year 2017-18

17. SEGMENT RESULTS

Pursuant to the guidelines issued by RBI on AS-17 (Segment Reporting) - Enhancement of Disclosures dated

April 18, 2007, effective from period ending March 31, 2008, the following business segments have been reported.

- Treasury: Includes investments, all financial markets activities undertaken on behalf of the Bank''s customers, Proprietary trading, maintenance of reserve requirements and resource mobilisation from other banks and financial institutions.

- Corporate / Wholesale Banking: Includes lending, deposit taking and other services offered to corporate customers.

- Retail Banking: Includes lending, deposit taking and other services offered to retail customers.

- Other Banking Operations: Includes para banking activities like third party product distribution, merchant banking etc.

NOTES FOR SEGMENT REPORTING:

1. The business of the Bank is concentrated largely in India. Accordingly, geographical segment results have not been reported in accordance with AS-17 (Segment Reporting).

2. In computing the above information, certain estimates and assumptions have been made by the Management and have been relied upon by the auditors.

3. I ncome, expense, assets and liabilities have been either specifically identified with individual segment or allocated to segments on a systematic basis or classified as unallocated.

4. The unallocated assets includes tax paid in advance/tax deducted at source and deferred tax asset.

5. The unallocated liabilities include Share Capital and Reserves and Surplus.

6. I nter-segment transactions have been generally based on transfer pricing measures as determined by the Management.

7. The Bank has refined the allocation methodology and has allocated certain items that were previously classified as unallocated, to various segments. The same have been applied to segment information for previous periods also.

18. RELATED PARTY DISCLOSURES

The Bank has transactions with its related parties comprising of subsidiary, key management personnel and the relative of key management personnel per AS 18 "Related Party Disclosures”, notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014, the Bank''s related parties for the year ended March 31, 2017 are disclosed below:

SUBSIDIARY

- Yes Securities (India) Limited

INDIVIDUALS HAVING SIGNIFICANT INFLUENCE:

- Mr. Rana Kapoor, Managing Director & CEO

* Represents outstanding as of March 31, 2016

# In Financial Year 2015-16 there was only one related party in the said category, hence the Bank has not disclosed the details of transactions in accordance with circular issued by the RBI on March 29, 2003 “Guidance on compliance with the accounting standards by banks”.

19 OPERATING LEASES

Lease payments recognized in the profit and loss account for the year ended March 31, 2017 was Rs,3,334.71 million (Previous year: Rs,2,653.83 million).

As at March 31, 2017 and March 31, 2016 the Bank had certain non-cancellable outsourcing contracts for information technology assets and branches on rent. The future minimum lease obligations against the same were as follows:

The Bank does not have any provisions relating to contingent rent.

The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements. There are no undue restrictions or onerous clauses in the agreements.

20. EARNINGS PER SHARE (‘EPS’)

The Bank reports basic and diluted earnings per equity share in accordance with Accounting Standard (AS) 20, “Earnings Per Share”. The dilutive impact is mainly due to stock options granted to employees by the Bank.

The difference between weighted average number of equity shares outstanding between basic and diluted in the above mentioned disclosure is on account of outstanding ESOPs.

21. ESOP DISCLOSURES

Statutory Disclosures Regarding Joining Stock Option Scheme:

The Bank has Five Employee Stock Option Schemes 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).

The schemes include provisions for grant of options to eligible employees of the Bank and its subsidiaries/ affiliates. All the aforesaid schemes have been approved by the Nomination and Remuneration Committee (N&RC) and the Board of Directors and were also approved by the members of the Bank. All these schemes are administered by the N&RC.

JESOP II and JESOP III were in force for employees joining the Bank up to March 31, 2006 and March 31, 2007 respectively.

YBL JESOP V is in force for employees joining the Bank from time to time. Under JESOP V, 50% options vest takes place at the end of three years and remaining 50% at the end of five years from the date of Grant.

PESOP I, PESOP II and PESOP II - 2010 are Performance Stock Option Plans. Under PESOP I, 25% of the options granted would vest at the end of each year from the date of grant. Under PESOP II, 30% of the granted options vest at the end of first year, 30% vest at the end of second year and balance 40% vest at the end of third year. Under YBL PESOP II - 2010, 30% of the granted options vest at the end of the third year, 30% vest at the end of the fourth year and balance 40% vest at the end of the fifth year.

Further, grants under PESOP II had been discontinued with effect from January 20, 2010.

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.

The Bank has charged Nil amount, being the intrinsic value of the stock options granted for the year ended March 31, 2017 and March 31, 2016. 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 Rs,464.49 million (Previous year: Rs,414.23 million), the basic earnings per share would have been Rs,77.79 (Previous year: Rs,59.63) per share instead of Rs,78.89 (Previous year: Rs,60.62) per share; and diluted earnings per share would have been Rs,75.70 (Previous year: Rs,58.34) per share instead of Rs,76.77 (Previous year: Rs,59.31) per share.

The following assumptions have been made for computation of the fair value of ESOP granted for the year ended March 31, 2017 and March 31, 2016.

In computing the above information, certain estimates and assumptions have been made by the Management.

22. DEFERRED TAXATION

The deferred tax asset of Rs,6,029.82 million as at March 31, 2017 and Rs,4,774.50 million as at March 31, 2016, is included under other assets and the corresponding credits have been taken to the profit and loss account.

23. OTHER DISCLOSURES

24. DISCLOSURE ON REMUNERATION

a. Information relating to the composition and mandate of the Nomination & Remuneration Committee.-

The Board of Directors of the Bank through its Nomination and Remuneration Committee (N&RC) shall exercise oversight & effective governance over the framing and implementing of the Compensation policy. The N&RC shall comprise a minimum of 3 non-executive Directors, majority being Independent Directors.

Composition of the N&RC of the Bank as on March 31, 2017 is as follows:

- Mr. Brahm Dutt, Independent Director (Chairman)

- Mr. Mukesh Sabharwal, Independent Director

- Mr. Ajai Kumar, Non-Executive NonIndependent Director (appointed w.e.f. October 30, 2016)

The roles and responsibilities of the N & RC are as under-

- Reviewing the current Board composition, its governance framework and determine future requirements and making recommendations to the Board for approval;

O Examining the qualification, knowledge, skill sets and experience of each director vis-a-vis the Bank''s requirements and their effectiveness to the Board on a yearly basis and accordingly recommend to the Board for the induction of new Directors;

- To review the composition of the existing Committees of the Board and to examine annually whether there is any need to have a special committee of directors to meet the business requirements of the Bank and accordingly recommend to the Board for formation of a special committee;

- To scrutinize nominations for Independent/ Non Executive Directors with reference to their qualifications and experience and making recommendations to the Board for appointment/filling of vacancies;

- To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal;

-Formulating the criteria for evaluation of performance of independent directors and the board of directors;

- Carrying out evaluation of every director''s performance;

- To evaluate whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors;

- To validate ‘fit and proper'' status of all Directors on the Board of the Bank in terms of the Guidelines issued by the RBI or other regulatory authorities;

- To develop and recommend to the Board Corporate Governance guidelines applicable to the Bank for incorporating best practices;

- To implement policies and processes relating to Corporate Governance principles;

- To formulate the criteria for determining qualifications, positive attributes and independence of a director;

- To devise a Policy on Board diversity;

- To recommend to the Board a policy relating to, the remuneration for the directors, key managerial personnel and other employees;

- Reviewing the Bank''s overall compensation structure and related polices with a view to attract, motivate and retain employees and review compensation levels vis-a-vis other Banks and the industry in general;

- Ensuring the following while formulating the policy on the aforesaid matters:

- the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors, key managerial personnel and senior management of the quality required to run the company successfully;

- relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

- remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long- term performance objectives appropriate to the working of the company and its goals,

- To formulate and determine the Bank''s policies on remuneration packages payable to the Directors and key managerial personnel including performance/achievement bonus, perquisites, retrials, sitting fee, etc.;

- To consider grant of Stock Options to employees including employees of subsidiaries and administer and supervise the Employee Stock Option Plans;

- To function as the Compensation Committee as prescribed under the SEBI (Share Based Employee Benefits) Regulations, 2014 and is authorized to allot shares pursuant to exercise of Stock Options by employees;

- Performing any other function or duty as stipulated by the Companies Act, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges and any other regulatory authority or under any applicable laws as may be prescribed from time to time.

b. Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy-

The Bank has framed Compensation and benefit policy based on the guidelines contained in the RBI circular DBOD No. BC.72/29.67.001/2011-12 dated January 13, 2012 which is approved by the Nomination and Remuneration Committee on January 7, 2013. The remuneration of MD & CEO/Whole time Directors will be in accordance with the above mentioned circular and shall be reviewed basis RBI guidelines issued from time to time and approved by N&RC before obtaining Regulatory approvals.

The compensation philosophy of the Bank is aligned to the organizational values aimed at encouraging Professional Entrepreneurship and reinforcing a strong culture promoting meritocracy, performance, potential and prudent risk taking.

The Bank''s Remuneration policy is to position its pay structure competitively in relation to the market to be able to attract and retain critical talent. The compensation strategy clearly endeavors to differentiate performance significantly and link the same with quality and quantum of rewards. The Bank also strives to create long term wealth creation opportunities through stock option schemes.

Human Capital Management shall review the policy annually or as required, based on changes in statutory, regulatory requirements and industry practices pertaining to Compensation and Benefits.

c. Description of the ways in which current and future risks are taken into account in the remuneration processes. It should include the nature and type of the key measures used to take account of these risks

The broad factors taken into account for the Annual Review /revision of Fixed Compensation (TCC) & Performance Bonus are:

1. Individual performance based on the Annual Performance Review (APR) process of the Bank.

2. Business Unit performance in terms of financial outcomes, productivity, etc.

3. Consideration of all types of risk factors and shall be symmetrical with risk outcomes as well as sensitive to the time horizon of risk.

4. Profitability of the Bank.

5. Industry Benchmarking and consideration towards cost of living adjustment/inflation

The Bank subscribes to a ''Sum-of-Parts'' compensation methodology, which is reflective of the Bank''s commitment and philosophy of creating and sharing value with its employee partners.

The sum-of-parts compensation comprises: FIXED COMPENSATION

Variable Compensation in the form of Performance Bonus

EMPLOYEE STOCK OPTION PLANS (ESOP) The Board of Directors of the Bank through its Nomination and Remuneration Committee (N&RC) shall exercise oversight & effective governance over the framing and implementing of the Compensation policy. Human Capital Management under the guidance of MD & CEO shall administer the Compensation and Benefits structure in line with Industry practices and statutory requirements as applicable from time to time.

d. Description of the ways in which the Bank seeks to link performance during a performance measurement period with levels of remuneration and a discussion of the bank''s policy and criteria for adjusting deferred remuneration before vesting and after vesting.

The Bank ensures that the compensation remains adjusted for all types of risk, symmetrical with risk outcomes as well as sensitive to the time horizon of risk. Further, the compensation in all forms will be consistent with the risk alignment.

One of the key factors to be considered for the Annual Review /revision of Fixed Compensation (TCC) & Performance Bonus includes individual performance based on the Annual Performance Review (APR) process of the Bank. The evaluation on risk management parameters is an integral part of the Annual Performance Review process, forming part of Key Result Areas of the executives with suitable weight age. The inputs for assessment on these parameters will be independently provided by the Risk Management function of the Bank.

For the services pertaining to financial year 2015-16 where variable pay is 50% or more, 40-60% shall be deferred over minimum period of 3 years. In the event of a negative contribution, deferred compensation shall be subject to appropriate malus/claw back arrangements as decided by the N&RC . Guaranteed bonus shall not be a part of the compensation plan.

The compensation for executives in Risk Control and Compliance functions shall be independent of the business areas they oversee.

The Bank shall not provide any facility or funds or permit employees to insure or hedge their compensation structure to offset the risk alignment effects embedded in their compensation arrangement.

e. Description of the different forms of variable remuneration (i.e. cash, shares, ESOPs and other forms) that the Bank utilizes and the rationale for using these different forms.

The Bank subscribes to a ''Sum-of-Parts'' compensation methodology, which is reflective of the commitment and philosophy of creating and sharing value with the employee partners. The sum-of-parts compensation for executives comprises:

Fixed Compensation (Total Cost to Company-TCC) - Includes value of perquisites.

Variable compensation in the form of Performance /Deferred Bonus - Variable pay shall be in the form of Performance Bonus which will be calculated as a percentage of Fixed Pay. The evaluation on risk management parameters is an integral part of the Annual Performance Review process, forming part of Key Result Areas of the executives with suitable weightage. The inputs for assessment on these parameters will be independently provided by the Risk Management function of the Bank.

Employee Stock Options Plans - These are formulated on a mid to long term basis by the Bank in accordance with SEBI and other Regulatory guidelines. The grant of ESOP shall be under approval from MD & CEO, which shall be subsequently ratified by the N&RC.

f. Quantitative Disclosures on Remuneration for MD & CEO and other risk takers

There were 4 meetings of the N&RC held during the year ended March 31, 2017. The Bank had paid a remuneration of '' 0.60 million* to the members of the N&RC for attending the meetings of the N&RC.

Note:

1. Amounts disclosed represents variable pay paid during the year ended March 31,2017 and March 31,2016 is for services rendered by the risk takers during the year March 31, 2016 and March 31,2015 respectively, since the bonus pool for the year ended March 31, 2017 has not yet been allocated and accordingly, the deferred component for the risk takers is yet to be determined.

2. Compensation for MD & CEO is as approved by the RBI and paid by the Bank to the MD & CEO. Compensation for other risk takers is as approved by the Bank.

3. For the Financial Year ended March 31, 2017, 15,000 ESOPs were issued to 1 risk takers (previous year 285,000 ESOPs to 4 risk takers)

26. MOVEMENT IN FLOATING PROVISIONS

The Bank has not created or utilized any floating provisions during the financial year ended March 31, 2017 and

financial year ended March 31, 2016. The floating provision as at March 31, 2017 was '' Nil (Previous year: '' Nil).

27. DRAWDOWN ON RESERVES

During the financial year ended March 31, 2017, the Bank has not drawn down any reserve. (Previous year: '' Nil).

28. LIQUIDITY COVERAGE RATIO (LCR)

Below mentioned is a position of Liquidity Coverage Ratio. The Bank has moved from annual disclosures in the previous year to quarterly disclosures in the current financial year in lines with the LCR disclosure standards notified by RBI.

LIQUIDITY COVERAGE RATIO (LCR):

The Bank measures and monitors the LCR in line with the Reserve Bank of India''s circular dated June 09, 2014 and November 28, 2014 on "Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards” as amended for "Prudential Guidelines on Capital Adequacy and Liquidity Standards” dated March 31, 2015. The LCR guidelines aims to ensure that a bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario. At a minimum, the stock of liquid assets should enable the bank to survive until day 30 of the stress scenario, by which time it is assumed that appropriate corrective actions can be taken. Banks are required to maintain High Quality Liquid Assets of a minimum of 100% of its Net Cash Outflows by January 01, 2019. However, with a view to provide transition time, the guidelines mandate a minimum requirement of 60% w.e.f. January 01, 2015 and a step up of 10% every year to reach the minimum requirement of 100% by January 01, 2019. Currently, the LCR applicable is 80%. The adequacy in the LCR maintenance is an outcome of a conscious strategy of the Bank towards complying with LCR mandate ahead of the stipulated timelines. The maintenance of LCR, both on end of period and on a average basis, has been on account of multiple factors viz. increase in excess SLR, existing eligibility in Corporate Bond Investments, increase in Retail deposits and increase in non callable deposits.

Board of Directors of the Bank has empowered ALCO (Top Management Executive Committee) to monitor and strategize the Balance Sheet profile of the Bank. In line with the business strategy, ALCO forms an Interest Rate/Liquidity view for the bank with the help of the economic analysis provided by the in-house economic research team of the bank. ALCO of the Bank channelizes various business segments of the Bank to target good quality asset and liability profile to meet the Bank''s profitability as well as Liquidity requirements with the help of robust MIS and Risk Limit architecture of the Bank.

Funding strategies are formulated by the ALCO of the Bank. The objective of the funding strategy is to achieve an optimal funding mix which is consistent with prudent liquidity, diversity of sources and servicing costs. Accordingly, BSMG (Balance Sheet Management Group) of the Bank estimates daily liquidity requirement of the various business segments and manages the same on consolidated basis under ALCO guidance. With the help of Structural and Liquidity Statement prepared by the Bank, BSMG evaluates liquidity requirement and takes necessary action. Periodical reports are also placed before the ALCO for perusal and review.

The Bank''s HQLA comprises of Excess CRR, Excess SLR, eligible foreign sovereign investments, Marginal Standing Facility (MSF) and Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) as permitted under prudential guidance and eligible Level 2 investments. The Bank has a very limited exposure to liquidity risk on account of its Derivatives portfolio. Further, the Bank believes that all inflows and outflows which might have a material impact under the liquidity stress scenario have been considered for the purpose of LCR. Further, SLR investments as well as Corporate Bond portfolio of the Bank considered for HQLA is also well diversified across various instruments and Liquid Asset Type Mix and should provide the Bank with adequate and timely liquidity.

The daily average LCR for quarter ending March 31, 2017 is 88.1% which is comfortably above RBI prescribed minimum requirement of 80%.

Further for the financial year ending 2016 and 2017, the Bank has considered nil operational deposit pending approval from RBI.

29. INVESTOR EDUCATION AND PROTECTION FUND

There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Bank as on March 31, 2017.

30. UNHEDGED FOREIGN CURRENCY EXPOSURE OF BANK’S CUSTOMER

The Bank has in place a policy on managing credit risk arising out of unhedged foreign currency exposures of its borrowers. The objective of this policy is to maximize the hedging on foreign currency exposures of borrowers by reviewing their foreign currency product portfolio and encouraging them to hedge the unhedged portion. In line with the policy, assessment of unhedged foreign currency exposure is a part of assessment of borrowers and is undertaken while proposing limits or at the review stage. Additionally, at the time of sanctioning limits for all clients, the Bank stipulates a limit on the unhedged foreign currency exposure of the client (as a % of total foreign currency exposure sanctioned by the

Bank) after considering factors such as internal rating of the borrower, size, possibility of natural hedging, sophistication of borrower and maturity of borrower''s financial systems, relative size of unhedged foreign currency exposure with respect to total borrowings of the client, etc. Further, the Bank reviews the unhedged foreign currency exposure across its portfolio on a periodic basis. The Bank also maintains incremental provision and capital towards the unhedged foreign currency exposures of its borrowers in line with the extant RBI guidelines.

The Bank has maintained provision of Rs,558.08 million (previous year of Rs,586.87 million) and additional capital of Rs,2,413.54 million (previous year of Rs,2,485.69 million) on account of Unheeded Foreign Currency Exposure of its borrowers as at March 31, 2017.

31. PROVISIONING PERTAINING TO FRAUD ACCOUNTS

The Bank has reported 61 cases of fraud in the financial year ended March 31, 2017 amounting to Rs,160.77 million (Previous Year: 35 cases amounting to Rs,16.01 million). The Bank has expensed off/ provided for the expected loss arising from these frauds and does not have any unamortized provision.

32. DUES TO MICRO AND SMALL ENTERPRISES

Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October

2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been no reported cases of interest payments due to delays in such payments to Micro, Small and Medium enterprises. Auditors have relied upon the above management assertion.

33. SECURITIZATION TRANSACTIONS

The Bank has not done any securitization transactions during the year ended March 31, 2017 and March 31, 2016.

34. LETTER OF COMFORT

The Bank has not issued any letter of comfort during the year ended March 31, 2017 and March 31, 2016.

35. DESCRIPTION OF CONTINGENT LIABILITIES

Contingent Liabilities Brief

No.

1. Claims against The Bank is a party to various legal and tax proceedings in the normal course of the Bank not business. The Bank does not expect the outcome of these proceedings to have a acknowledged as material adverse effect on the Bank''s financial conditions, results of operations or debts cash flows.

2. Liability on account The Bank enters into foreign exchange contracts, currency options, forward rate of forward exchange agreements, currency swaps and interest rate swaps with interbank participants and derivative and customers. Forward exchange contracts are commitments to buy or sell foreign contracts. currency at a future date at the contracted rate. Currency swaps are commitments

to exchange cash flows by way of interest/principal in one currency against another, based on predetermined rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows. The notional amounts of financial instruments of such foreign exchange contracts and derivatives provide a basis for comparison with instruments recognized on the balance sheet but do not necessarily indicate the amounts of future cash flows involved or the current fair value of the instruments and, therefore, do not indicate the Bank''s exposure to credit or price risks. The derivative instruments become favorable (assets) or unfavorable (liabilities) as a result of fluctuations in market rates or prices relative to their terms. The aggregate contractual or notional amount of derivative financial instruments on hand, the extent to which instruments are favorable or unfavorable and, thus the aggregate fair values of derivative financial assets and liabilities can fluctuate significantly.

3. Guarantees given As a part of its commercial banking activities the Bank issues documentary credit on behalf of and guarantees on behalf of its customers. Documentary credits such as letters of constituents, credit enhance the credit standing of the customers of the Bank. Guarantees generally acceptances, represent irrevocable assurances that the Bank will make payments in the event of the endorsements and customer failing to fulfill its financial or performance obligations. other obligations

4. Other items for - Value dated purchase of securities which the Bank is - Capital commitments contingently liable - Amount deposited with RBI under Depositor Education Awareness Fund - Foreign Exchange Contracts (Tom & Spot)

Refer Schedule 12 for amounts relating to contingent liability

36. PROVISION FOR LONG TERM CONTRACTS

The Bank has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Bank has reviewed and recorded adequate provision as required under any law / accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) in the books of account and disclosed the same under the relevant notes in the financial statements.

37. DISCLOSURE ON SPECIFIED BANK NOTES (SBNs)

The Bank believes that the MCA notification G.S.R. 308(E) dated March 30, 2017 regarding holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 is not applicable to banking companies. RBI has expressed a similar view in response to the Bank''s question. Accordingly, the disclosures prescribed under the said notification are not required to be made by the Bank.

38. PSLCs SOLD AND PURCHASED DURING THE YEAR ENDED MARCH 31, 2017

39. AUDIT OF FINANCIAL STATEMENTS-

The figures for the year ended March 31, 2016 were audited by previous statutory auditors.

40. PRIOR PERIOD COMPARATIVES

Previous year''s figures have been regrouped where necessary to conform to current year classification.


Mar 31, 2015

1.1.1 Segment Results

Pursuant to the guidelines issued by RBI on AS-17 (Segment Reporting) - Enhancement of Disclosures dated ApriL 18, 2007,effective from period ending March 31,2008,the foLLowing business segments have been reported.

Treasury: IncLudes investments, aLL financial markets activities undertaken on behaLf of the Bank''s customers, proprietary trading, maintenance of reserve requirements and resource mobiLization from other banks and financial institutions.

Corporate / Wholesale Banking: IncLudes Lending, deposit taking and other services offered to corporate customers.

Retail Banking: IncLudes Lending, deposit taking and other services offered to retail customers.

Other Banking Operations: IncLudes para banking activities Like third party product distribution, merchant banking etc.

1.1.2 Related Party Disclosures

The Bank has transactions with its reLated parties comprising of subsidiary, key management personneL and the reLative of key management personneL

As per AS 18 "ReLated Party DiscLosures", prescribed by notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) RuLes 2014, the Bank''s reLated parties for the year ended March 31,2015 are discLosed beLow:

Subsidiary

Yes Securities (India) Limited.

IndividuaLs having significant influence:

- Mr. Rana Kapoor, Managing Director & CEO

Key Management PersonneL (''KMP'') (WhoLe time Director)

Mr. Rana Kapoor, Managing Director & CEO

As per AS 18"ReLated Party Disclosures", prescribed by the Companies (Accounting Standards) RuLes, 2006,the Bank''s reLated parties for the year ended March 31,2014 are discLosed beLow:

Subsidiary

Yes Securities (India) Limited.

Individuals having significant influence:

Mr. Rana Kapoor, Managing Director & CEO

Key Management Personnel (''KMP'') (WhoLe time Director)

Mr. Rana Kapoor, Managing Director & CEO

1.2.1 Operating Leases

Lease payments recognized in the profit and Loss account for the year ended March 31, 2015 was Rs.2,206,079 thousands (Previous year:Rs. 1,976,918 thousands).

As at March 31,2015 and March 31,2014 the Bank had certain non-canceLLabLe outsourcing contracts for information technology assets and branches on rent. The future minimum Lease obLigations against the same were as foLLows:

The Bank does not have any provisions reLating to contingent rent.

The terms of renewal/purchase options and escaLation cLauses are those normaLLy prevaLent in simiLar agreements. There are no undue restrictions or onerous clauses in the agreements.

1.1.5 Earnings Per Share (''EPS'')

The Bank reports basic and diLuted earnings per equity share in accordance with AS-20, "Earnings Per Share". The diLutive impact is mainLy due to stock options granted to empLoyees by the Bank.

1.1.6 ESOP disclosures

Statutory Disclosures Regarding Joining Stock Option Scheme:

The Bank has Five EmpLoyee Stock Option Schemes viz.

Joining Stock Option PLan I (JSOP I),

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 ll/PESOP II -2010).

The schemes incLude provisions for grant of options to eLigibLe empLoyees of the Bank and its subsidiaries/ affiliates. ALL the aforesaid schemes have been approved by the Board Remuneration Committee and the Board of Directors and were aLso approved by the members of the Bank. ALL these schemes are administered by the Board Remuneration Committee.

JSOP I was for empLoyees joining the Bank on or before March 31,2005. ALL the grants under JSOP I were made before the IPO of the Bank. JESOP II and JESOP III were in force for empLoyees joining the Bank up to March 31, 2006 and March 31,2007 respectively.

YBL JESOP V is in force for empLoyees joining the Bank from time to time. Under JESOP V, 50% options vest takes pLace at the end of three years and remaining 50% at the end of five years from the date of Grant.

PESOP I, PESOP II and PESOP II - 2010 are Performance Stock Option PLans. Under PESOP 1,25% of the options granted wouLd vest at the end of each year from the date of grant. Under PESOP II, 30% of the granted options vest at the end of first year, 30% vest at the end of second year and baLance 40% vest at the end of third year. Under YBL PESOP II - 2010, 30% of the granted options vest at the end of the third year, 30% vest at the end of the fourth year and baLance 40% vest at the end of the fifth year.

Further, grants under PESOP II had been discontinued with effect from January 20,2010.

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.

The Bank has charged NiL, being the intrinsic vaLue of the stock options granted for the year ended March 31, 2015 and March 31, 2014. Had the Bank adopted the Fair VaLue method (based on BLack- SchoLes pricing modeL),for pricing and accounting of options, net profit aftertaxwouLd have been Lower byRs. 353,234thousands

(Previous year: Rs.341,904 thousands), the basic earnings per share wouLd have been Rs.48.47 (Previous year: Rs. 43.97) per share instead of Rs.49.34 (Previous year: Rs. 44.92) per share; and diLuted earnings per share wouLd have been Rs. 47.16 (Previous year: Rs. 43.42) per share instead of Rs. 48.01 (Previous year:Rs. 44.35) per share

The foLLowing assumptions have been made for computation of the fair vaLue of ESOP granted for the year ended March 31,2015 and March 31,2014.

In computing the above information, certain estimates and assumptions have been made by the Management.

1.7.7 Deferred Taxation

The deferred tax asset of Rs. 3,554,425 thousands as at March 31,2015 and Rs. 2,493,325 thousands as at March 31,2014, is included under other assets and the corresponding credits have been taken to the profit and Loss account.

1.8 Other Disclosures

1.8.1 Disclosure on Remuneration

a. Information reLating to the composition and mandate ofthe Remuneration Committee.-

The Board of Directors of the Bank through its Nomination and Remuneration Committee (N&RC) shaLL exercise oversight & effective governance over the framing and implementing of the Compensation poLicy. The BRC shaLL comprise a minimum of 3 Board members, of which two wouLd be independent directors, besides the MD and CEO.

Composition of the Nomination & Remuneration Committee (N&RC) of the Bank as on March 31, 2015 is as follows:

Mr. Brahm Dutt, Independent Director (Chairman)

Ms. Radha Singh, Non-Executive Chairperson

Mr. Mukesh SabharwaL, Independent Director

The roLes and responsibilities of the Nomination and Remuneration Committee (N&RC) are as under-

to review the Bank''s overaLL Compensation Structure and reLated poLicies with a view to attract, motivate and retain employees and review compensation LeveLs vis-a-vis other banks and the industry in general;

to determine the Bank''s poLicies on remuneration packages payabLe to the Directors incLuding performance/achievement bonus, perquisites, retriaLs,sitting fee, etc;

consider grant of stock options to empLoyees and administer and supervise the EmpLoyee Stock Option PLans with particular reference to:

- determination of quantum of options to be granted;

- determination of grant price, vesting scheduLe, exercise period, etc

- procedure for making fair and reasonable adjustments to the number of options granted in case of a corporate action such as rights issues, bonus,share spLit, mergers, etc.

- conditions under which options wouLd Lapse in case oftermination due to mis-conduct;

- procedure for cashless exercise of options, if any;

- to frame suitabLe poLicies to ensure compliance with aLL appLicabLe Laws, regulations.

Perform any other act, duty as stipulated by the Companies Act, Reserve Bank of India, Securities & Exchange Board of India, Stock Exchanges, and any other reguLatory authority, as prescribed from time to time.

b. Information reLating to the design and structure of remuneration processes and the key features and objectives of remuneration poLicy-

The Bank has framed Compensation and benefit poLicy based on the guidelines contained in the RBI circuLar DBOD No. BC.72/29.67.001/2011- 12 dated January 13, 2012 which is approved by the Nomination and Remuneration Committee on January 7, 2013. The remuneration of MD&CEO/ WhoLetime Directors wiLL be in accordance with the above mentioned circuLar and shaLL be reviewed basis RBI guidelines issued from time to time and approved by N&RC before obtaining ReguLatory approvals.

The compensation phiLosophy of the Bank is aligned to the organizational values aimed at encouraging Professional Entrepreneurship and reinforcing a strong cuLture promoting meritocracy, performance, potentiaLand prudent risk taking.

The Bank''s Remuneration poLicy is to position its pay structure competitively in relation to the market to beabLeto attract and retain criticaLtaLent. The compensation strategy clearly endeavors to differentiate performance significantLy and Link the same with quaLity and quantum of rewards. The Bank aLso strives to create Long term weaLth creation opportunities through stock option schemes.

Human CapitaL Management shaLL review the poLicy annuaLLy or as required, based on changes in statutory, reguLatory requirements and industry practices pertaining to Compensation and Benefits.

c. Description of the ways in which current and future risks are taken into account in the remuneration processes. It should include the nature and type of the key measures used to take account of these risks

The broad factors taken into account for the AnnuaL Review /revision of Fixed Compensation (TCC) & Performance Bonus are:

1. Individual performance based on the AnnuaL Performance Review (APR) process of the Bank.

2. Business Unit performance in terms of financial outcomes, productivity,etc.

3. Consideration of aLL types of risk factors and shaLL be symmetrical with risk outcomes as weLL as sensitive to the time horizon of risk.

4. Profitability oftheBank.

5. Industry Benchmarking and consideration towards cost of Living adjustment/inflation

The Bank subscribes to a ''Sum-of-Parts'' compensation methodoLogy, which is reflective of the Bank''s commitment and phiLosophy of creating and sharing vaLue with its empLoyee partners.

The sum-of-parts compensation comprises:

Fixed Compensation

VariabLe Compensation in the form of Performance Bonus

EmpLoyee Stock Option PLans (ESOP)

The Board of Directors of the Bank through its Nomination and Remuneration Committee (N&RC) shaLL exercise oversight & effective governance over the framing and implementing of the Compensation poLicy. Human CapitaL Management under the guidance of MD & CEO shaLL administer the Compensation and Benefits structure in Line with Industry practices and statutory requirements as appLicabLe from time to time.

d. Description of the ways in which the bank seeks to Link performance during a performance measurement period with Levels of remuneration and a discussion of the bank''s poLicy and criteria for adjusting deferred remuneration before vesting and after vesting.

The Bank ensures that the compensation remains adjusted for aLL types of risk, symmetricaL with risk outcomes as weLL as sensitive to the time horizon of risk. Further, the compensation in aLL forms wiLL be consistent with the risk aLignment.

One of the key factors to be considered for the AnnuaL Review /revision of Fixed Compensation (TCC) & Performance Bonus incLudes individuaL performance based on the AnnuaL Performance Review (APR) process of the Bank. The evaLuation on risk management parameters is an integraL part of the AnnuaL Performance Review process, forming part of Key ResuLt Areas of the executives with suitabLe weightage. The inputs for assessment on these parameters wiLL be independentLy provided by the Risk Management function ofthe Bank.

For the services pertaining to FY 2014-15 where variabLe pay is 50% or more, 40-60% shaLL be deferred over minimum period of 3 years. In the event of a negative contribution, deferred compensation shaLL be subject to appropriate maLus/cLaw back arrangements as decided by the Board Remuneration Committee. Guaranteed bonus shaLL not be a part ofthe compensation pLan.

The compensation for executives in Risk ControL and CompLiance functions shaLL be independent of the business areas they oversee.

The Bank shaLL not provide any faciLity or funds or permit empLoyees to insure or hedge their compensation structure to offset the risk aLignment effects embedded in their compensation arrangement.

e. Description of the different forms of variabLe remuneration (i.e. cash, shares, ESOPs and other forms) that the bank utiLizes and the rationaLe for using these different forms.

The Bank subscribes to a ''Sum-of-Parts'' compensation methodoLogy, which is reflective of the commitment and phiLosophy of creating and sharing vaLue with the empLoyee partners. The sum-of-parts compensation for executives comprises:

Fixed Compensation (Total Cost to Company-TCC) -

IncLudes vaLue of perquisites.

Variable compensation in the form of Performance /Deferred Bonus - VariabLe pay shaLL be in the form of Performance Bonus which wiLL be caLcuLated as a percentage of Fixed Pay. The evaLuation on risk management parameters is an integraL part ofthe AnnuaL Performance Review process, forming part of Key ResuLt Areas of the executives with suitabLe weightage. The inputs for assessment on these parameters wiLL be independentLy provided by the Risk Management function of the Bank.

Employee Stock Options Plans - These are formuLated on a mid to Long term basis by the Bank in accordance with SEBI and other ReguLatory guideLines. The grant of ESOP shaLL be under approvaL from MD & CEO, which shaLL be subsequentLy ratified by the Board Remuneration Committee.

f. Quantitative DiscLosures on Remuneration for MD & CEO and other risk takers

There were 3 meetings of the erstwhiLe Board Remuneration & Human CapitaL Management committee (now known as Nomination & Remuneration Committee) heLd during the year ended March 31, 2015. The Bank had paid a remuneration of Rs.160 thousands to the members ofthe remuneration committee.

1.8.2 Movement in Floating Provisions

The bank has not created or utiLized any floating provisions during the financial, year ended March 31,2015 and financial.year ended March 31,2014.The floating provision as at March 31,2015 was Rs.NiL (Previous year:Rs. NiL).

1.8.3 Drawdown on Reserves

During the financial, year ended March 31,2015,the Bank has not drawn down any reserve. (Previous year:Rs. NiL).

1.8.4 Liquidity Coverage Ratio (LCR)

BeLow mentioned is a position of Liquidity Coverage Ratio computed based on simpLe average of month end position during the quarter ended March 31,2015.

Liquidity Coverage Ratio (LCR):

The Bank measures and monitors the LCR in Line with the Reserve Bank of India''s circuLar dated June 9, 2014 on "Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards". The LCR guidelines aims to ensure that a bank maintains an adequate LeveL of unencumbered High OuaLity Liquid Assets (HOLAs) that can be converted into cash to meet its Liquidity needs for a 30 caLendar daytime horizon under a significantLy severe Liquidity stress scenario. At a minimum, the stock of Liquid assets shouLd enabLe the bank to survive until day 30 ofthe stress scenario, by which time it is assumed that appropriate corrective actions can be taken. Banks are required to maintain High OuaLity Liquid Assets of a minimum of 100% of its Net Cash Outflows by January 1, 2019. However, with a view to provide transition time, the guidelines mandate a minimum requirement of 60% w.e.f. January 1,2015 and a step up of 10% every year to reach the minimum requirement of 100% by January 1,2019.

The adequacy in the LCR maintenance is an outcome of a conscious strategy of the Bank towards complying with LCR mandate ahead of the stipulated timeLines. The maintenance of LCR, both on end of period and on a average basis, has been on account of muLtipLe factors viz. increase in excess SLR, existing eligibility in Corporate Bond Investments, increase in RetaiL deposits and increase in non caLLabLe deposits.

The Bank has been maintaining HOLA primariLy in the form of SLR investments over and above mandatory requirement; Corporate NCDs issued by non financiaL entities with rating AA- and above apart from reguLatory dispensation aLLowed upto 7% of NDTL in the form of borrowing Limit avaiLabLe through MarginaL Standing FaciLity (MSF) and FaciLity to AvaiL Liquidity for Liquidity Coverage Ratio (FALLCR). SLR investments as weLL as Corporate Bond portfoLio of the Bank considered for HOLA is aLso weLL diversified across various instruments and Liquid Asset Type Mix and shouLd provide the Bank with adequate and timeLy Liquidity.

The Bank has a diversified Liability mix. The deposits of the Bank are diversified, granuLar and the Bank has sticky deposit mix from muLtipLe sources. The Bank has witnessed continuing growth in number of Liability accounts from both retaiL as weLL as corporate customers. CASA deposits of the Bank increased by 29.0% year-on-year from Rs. 163,447 miLLion as at March 31, 2014 to Rs. 210,790 miLLion as on March 31, 2015. Continued investment in retaiL branches and retaiL saLes force has resuLted in achieving consistent CASA growth. This represents a steady improvement in the share of granuLar and retaiL deposits with widespread geographic national coverage.

The Bank has not been maintaining HOLA in FCY given the Lack of reguLatory options as weLL as Limited caLLabLe FCY Liabilities. Further the Bank has a very Limited exposure to Liquidity on account of its Derivatives portfoLio. Further, the Bank beLieves that aLL inflows and outflows which might have a materiaL impact under the Liquidity stress scenario have been considered for the purpose of LCR.

Board of Directors of the Bank has empowered ALCO (Top Management Executive Committee) to monitor and strategize the BaLance Sheet profiLe ofthe Bank. In Line with the business strategy,ALCO forms an Interest Rate/ Liquidity view forthe bankwiththe heLp ofthe economic anaLysis provided by the in-house economic research team ofthe bank. ALCO ofthe Bank channelizes various business segments of the Bank to target good quaLity asset and Liability profiLe to meet the Bank''s profitability as weLL as Liquidity requirements with the heLp of robust MIS and Risk Limit architecture ofthe Bank.

Funding strategies are formuLated by the BaLance sheet management group (BSMG) in accordance with the ALCO guidance. The objective of the funding strategy is to achieve an optimaL funding mix which is consistent with prudent Liquidity, diversity of sources and servicing costs. Accordingly, BSMG ofthe Bank estimates daily Liquidity requirement of the various business segments and manages the same on consolidated basis. With the heLp of Structural and DaiLy Liquidity Statement prepared by the Bank, BSMG evaluates current and future Liquidity requirement and takes necessary action.

1.8.6 Transfers to Depositor Education and Awareness Fund (DEAF)

The Bank has not transferred any funds to Depositor Education and Awareness Fund during financial, year ended March 31,2015.

1.8.7 Unhedged Foreign Currency Exposure of Bank''s Customer

The Bank has in pLace a poLicy on managing credit risk arising out of unhedged foreign currency exposures of its borrowers. The objective of this poLicy is to maximize the hedging on foreign currency exposures of borrowers by reviewing their foreign currency product portfolio and encouraging them to hedge the unhedged portion. In Line with the poLicy,assessment of unhedged foreign currency exposure is a part of assessment of borrowers and is undertaken whiLe proposing Limits or at the review stage. AdditionaLLy, at the time of sanctioning Limits for aLL cLients, the Bank stipuLates a Limit on the unhedged foreign currency exposure of the cLient (as a % of totaL foreign currency exposure sanctioned by the Bank) after considering factors such as internaL rating of the borrower, size, possibiLity of naturaL hedging, sophistication of borrower and maturity of borrower''s financiaL systems, reLative size of unhedged foreign currency exposure with respect to totaL borrowings of the cLient, etc. Further, the Bank reviews the unhedged foreign currency exposure across its portfoLio on a periodic basis. The Bank aLso maintains incrementaL provision towards the unhedged foreign currency exposures of its borrowers in Line with the extant RBI guidelines.

The Bank has maintained provision of Rs. 443,939 thousands and additionaL capitaL of Rs. 1,483,954 thousands on account of Unhedged Foreign Currency Exposure of its borrowers as at March 31,2015.

1.8.9 Dues to Micro and Small Enterprises

Underthe Micro and SmaLL Enterprises Development Act, 2006 which came into force from October 2,2006, certain disclosures are required to be made reLating to Micro and SmaLL enterprises. On the basis of information and records avaiLabLe with the management and confirmation sought by the management from suppLiers on their registration with the specified authority under the said Act, there have been no reported cases of deLays in payments to micro and smaLL enterprises or of interest payments due to deLays in such payments.

1.8.10 Securitization Transactions

The Bank has not done any securitization transactions during the year ended March 31,2015 and March 31,2014.

1.8.11 Letter of comfort

The Bank has not issued any Letter of comfort during the year ended March 31,2015 and March 31,2014.

1.8.12 Fixed Assets

The software capitalized under Fixed Asset was Rs.200,409 thousands and Rs.215,448 thousands as at March 31,2015 and March 31,2014 respectively.

1.8.13 Description of contingent liabilities

Sr. No. Contingent Liabilities Brief

1. Claims against the Bank not acknowledged as debts The Bank is a party to various Legal and tax proceedings in the normal course of business. The Bank does not expect the outcome of these proceedings to have a material adverse effect on the Bank''s financial conditions, results of operations or cash flows.

2. Liability on account of forward exchange and derivative The Bank enters into foreign exchange contracts, currency contracts. options, forward rate agreements, currency swaps and interest rate swaps with interbank participants and customers. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to exchange cash flows by way of interest/principal in one currency against another,based on predetermined rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows. The notional amounts of financial instruments of such foreign exchange contracts and derivatives provide a basis for comparison with instruments recognized on the balance sheet but do not necessarily indicate the amounts of future cash flows involved or the current fair value of the instruments and, therefore, do not indicate the Bank''s exposure to credit or price risks.

Liability on account of forward exchange and derivative The derivative instruments become favorable (assets) or contracts. unfavorable (liabilities) as a result of fluctuations in market rates or prices relative to their terms. The aggregate contractual or notional amount of derivative financial instruments on hand, the extent to which instruments are favorable or unfavorable and,thus the aggregate fairvalues of derivative financial assets and liabilities can fluctuate significantly.

3. Guarantees given on behalf of constituents, As a part of its commercial banking activities the Bank issues acceptances,endorsements and other obligationsdocumentary credit and guarantees on behalf of its customers.

Documentary credits such as letters of credit enhance the credit standing of the customers of the Bank. Guarantees generally represent irrevocable assurances that the Bank will make payments in the event of the customer failing to fulfill its financial or performance obligations.

4. Other items forwhich the bank is contingently liable -Value dated purchase ofsecurities

- Capital commitments

- Foreign Exchange Contracts (Tom & Spot)

Refer Schedule 12 for amounts relating to contingent liability

1.8.14 Provision for Long Term contracts

The Bank has a process whereby periodically aLL Long term contracts (incLuding derivative contracts) are assessed for materiaL foreseeable Losses. At the year end,the Bank has reviewed and recorded adequate provision as required under any Law / accounting standards for materiaL foreseeable Losses on such Long term contracts (incLuding derivative contracts) in the books of account and discLosed the same under the reLevant notes in the financial statements.

1.8.15 Prior period comparatives

Previous period''s figures have been regrouped where necessary to conform to current year classification.


Mar 31, 2014

Notes for segment reporting:

1. The business of the Bank is concentrated in India. Accordingly, geographical segment results have not been reported.

2. In computing the above information, certain estimates and assumptions have been made by the Management and have been relied upon by the auditors.

3. Income, expense, assets and liabilities have been either specifically identified with individual segment or allocated to segments on a systematic basis or classified as unallocated.

4. Fixed assets and related depreciation on fixed assets, non treasury related bank balances at branches, Bills payable, Tax related accounts, Tier II instruments, IPDI instruments and relevant interest and rent expenses which cannot be allocated to any segments have been classified as unallocated. The unallocated liabilities include Share Capital and Reserves and Surplus.

5. Inter-segment transactions have been generally based on transfer pricing measures as determined by the Management.

6. Related party Disclosures

The Bank has transactions with its related parties comprising of subsidiary, key management personnel and the relative of key management personnel

a) As per AS 18 "Related Party Disclosures", prescribed by the Companies (Accounting Standards) Rules, 2006, the Bank''s related parties for the year ended March 31, 2014 are disclosed below:

Subsidiary

- Yes Securities (India) Limited.

Individuals having significant influence:

- Mr. Rana Kapoor, Managing Director & CEO

b) As per AS 18 "Related Party Disclosures", prescribed by the Companies (Accounting Standards) Rules, 2006, the Bank''s related parties for the year ended March 31, 2013 are disclosed below:

Subsidiary

- Yes Securities (India) Limited. Individuals having significant influence:

- Mr. Rana Kapoor, Managing Director & CEO

key Management personnel (''kMp'') (Whole time Director)

- Mr. Rana Kapoor, Managing Director & CEO

7. Operating Leases

Lease payments recognized in the profit and loss account for the year ended March 31, 2014 was Rs.1,976,918 thousands (Previous year: Rs.1,550,742 thousands).

8. earnings per Share (''epS'')

The Bank reports basic and diluted earnings per equity share in accordance with AS-20, "Earnings Per Share". The dilutive impact is mainly due to stock options granted to employees by the Bank.

9. eSOp disclosures

Statutory Disclosures Regarding Joining Stock Option Scheme:

The Bank has Five Employee Stock Option Schemes viz.

- Joining Stock Option Plan I (JSOP I),

- Joining Employee Stock Option Plan II (JESOP II),

- Joining Employee Stock Option Plan III (JESOP III),

- YBL ESOP (consisting of JESOP IV and PESOP I)

- YBL JESOP V/PESOP II (consisting JESOP V, PESOP II and PESOP II - 2010).

The schemes include provisions for grant of options to eligible employees of the Bank and its subsidiaries. All the aforesaid schemes have been approved by the Board Remuneration Committee and the Board of Directors and were also approved by the members of the Bank. All these schemes are administered by the Board Remuneration Committee.

JSOP I was for employees joining the Bank on or before March 31, 2005. All the grants under JSOP I were made before the IPO of the Bank. JESOP II and JESOP III were in force for employees joining the Bank up to March 31, 2006 and March 31, 2007 respectively.

YBL JESOP V is in force for employees joining the Bank from time to time. Under JESOP V, 50% options vest takes place at the end of three years and remaining 50% at the end of five years from the date of Grant.

PESOP I, PESOP II and PESOP II - 2010 are Performance Stock Option Plans. Under PESOP I, 25% of the options granted would vest at the end of each year from the date of grant. Under PESOP II, 30% of the granted options vest at the end of first year, 30% vest at the end of second year and balance 40% vest at the end of third year. Under YBL PESOP II – 2010, 30% of the granted options vest at the end of the third year, 30% vest at the end of the fourth year and balance 40% vest at the end of the fifth year.

Further, grants under PESOP II had been discontinued with effect from January 20, 2010.

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.

10. Other Disclosures

11. Disclosure on Remuneration

a. Information relating to the composition and mandate of the Remuneration Committee.-

The Board of Directors of the Bank through its Board Remuneration Committee (BRC) shall exercise oversight & effective governance over the framing and implementing of the Compensation policy. The BRC shall comprise a minimum of 3 Board members, of which two would be independent directors, besides the MD and CEO.

Composition of the Board Remuneration Committee (BRC) of the Bank as on March 31, 2014 is as follows:

- Lt Gen (Retd.) Mukesh Sabharwal

- Mr. Diwan Arun Nanda – Chairman

- Mr. Rana Kapoor

The roles and responsibilities of the Remuneration Committee are as under-

- to review the Bank''s overall Compensation Structure and related policies with a view to attract, motivate and retain employees and review compensation levels vis-à- vis other banks and the industry in general;

- to determine the Bank''s policies on remuneration packages payable to the Directors including performance/achievement bonus, perquisites, retirals, sitting fee, etc;

- consider grant of stock options to employees and administer and supervise the Employee Stock Option Plans with particular reference to:

- determination of quantum of options to be granted;

- determination of grant price, vesting schedule, exercise period, etc

- procedure for making fair and reasonable adjustments to the number of options granted in case of a corporate action such as rights issues, bonus, share split, mergers, etc.

- conditions under which options would lapse in case of termination due to mis-conduct;

- procedure for cashless exercise of options, if any;

- to frame suitable policies to ensure compliance with all applicable laws, regulations.

- Perform any other act, duty as stipulated by the Companies Act, Reserve Bank of India, Securities & Exchange Board of India, Stock Exchanges, and any other regulatory authority, as prescribed from time to time.

b. Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy- The Bank has framed Compensation and benefit policy based on the guidelines contained in the RBI circular DBOD No. BC.72/29.67.001/2011-12 dated January 13, 2012 which is approved by the Board Remuneration committee on January 7, 2013. The remuneration of MD & CEO/Wholetime Directors will be in accordance with the above mentioned circular and shall be reviewed basis RBI guidelines issued from time to time and approved by BRC before obtaining Regulatory approvals.

The compensation philosophy of the Bank is aligned to the organizational values aimed at encouraging Professional Entrepreneurship and reinforcing a strong culture promoting meritocracy, performance, potential and prudent risk taking.

The Bank''s Remuneration policy is to position its pay structure competitively in relation to the market to be able to attract and retain critical talent. The compensation strategy clearly endeavours to differentiate performance significantly and link the same with quality and quantum of rewards. The Bank also strives to create long term wealth creation opportunities through stock option schemes.

Human Capital Management shall review the policy annually or as required, based on changes in statutory, regulatory requirements and industry practices pertaining to Compensation and Benefits.

c. Description of the ways in which current and future risks are taken into account in the remuneration processes. It should include the nature and type of the key measures used to take account of these risks

The broad factors taken into account for the Annual Review/revision of Fixed Compensation (TCC) & Performance Bonus are:

1. Individual performance based on the Annual Performance Review (APR) process of the Bank.

2. Business Unit performance in terms of financial outcomes, productivity, etc.

3. Consideration of all types of risk factors and shall be symmetrical with risk outcomes as well as sensitive to the time horizon of risk.

4. Profitability of the Bank.

5. Industry Benchmarking and consideration towards cost of living adjustment/inflation

The Bank subscribes to a ''Sum-of-Parts'' compensation methodology, which is reflective of the Bank''s commitment and philosophy of creating and sharing value with its employee partners.

The sum-of-parts compensation comprises:

- Fixed Compensation

- Variable Compensation in the form of Performance Bonus

- Employee Stock Option Plans (ESOP)

The Board of Directors of the Bank through its Board Remuneration Committee (BRC) shall exercise oversight & effective governance over the framing and implementing of the Compensation policy. Human Capital Management under the guidance of MD & CEO shall administer the Compensation and Benefits structure in line with Industry practices and statutory requirements as applicable from time to time.

d. Description of the ways in which the bank seeks to link performance during a performance measurement period with levels of remuneration and A discussion of the bank''s policy on deferral and vesting of variable remuneration and a discussion of the bank''s policy and criteria for adjusting deferred remuneration before vesting and after vesting.

The Bank ensures that the compensation remains adjusted for all types of risk, symmetrical with risk outcomes as well as sensitive to the time horizon of risk. Further, the compensation in all forms will be consistent with the risk alignment.

One of the key factors to be considered for the Annual Review/revision of Fixed Compensation (TCC) & Performance Bonus includes individual performance based on the Annual Performance Review (APR) process of the Bank. The evaluation on risk management parameters is an integral part of the Annual Performance Review process, forming part of Key Result Areas of the executives with suitable weightage. The inputs for assessment on these parameters will be independently provided by the Risk Management function of the Bank.

For the services pertaining to financial year 2013-14 where variable pay is 50% or more, 40-60% shall be deferred over minimum period of 3 years. In the event of a negative contribution, deferred compensation shall be subject to appropriate malus/claw back arrangements as decided by the Board Remuneration Committee. Guaranteed bonus shall not be a part of the compensation plan.

The compensation for executives in Risk Control and Compliance functions shall be independent of the business areas they oversee.

The Bank shall not provide any facility or funds or permit employees to insure or hedge their compensation structure to offset the risk alignment effects embedded in their compensation arrangement.

e. Description of the different forms of variable remuneration (i.e. cash, shares, ESOPs and other forms) that the bank utilizes and the rationale for using these different forms.

The Bank subscribes to a ''Sum-of-Parts'' compensation methodology, which is reflective of the commitment and philosophy of creating and sharing value with the employee partners. The sum-of-parts compensation for executives comprises:

- Fixed Compensation (Total Cost to Company-TCC) - Includes value of perquisites.

- Variable compensation in the form of Performance/ Deferred Bonus -

Variable pay shall be in the form of Performance Bonus which will be calculated as a percentage of Fixed Pay. The evaluation on risk management parameters is an integral part of the Annual Performance Review process, forming part of Key Result Areas of the executives with suitable weightage. The inputs for assessment on these parameters will be independently provided by the Risk Management function of the Bank.

Employee Stock Options Plans - These are formulated on a mid to long term basis by the Bank in accordance with SEBI and other Regulatory guidelines. The grant of ESOP shall be under approval from MD & CEO, which shal be subsequently ratified by the Board Remuneration Committee.

12. Movement in Floating provisions

The bank has not created or utilized any floating provisions during the financial year ended March 31, 2014 and financial year ended March 31, 2013. The floating provision as at March 31, 2014 was H Nil (Previous year: H Nil).

13. Drawdown on Reserves

During the financial year ended March 31, 2014, the Bank has not drawn down any reserve. (Previous year: H Nil).

14. Dues to Micro and Small enterprises

Under the Micro and Small Enterprises Development Act, 2006 which came into force from October 02, 2006, certain disclosures are required to be made relating to Micro and Small enterprises. On the basis of information and records available with the management and confirmation sought by the management from suppliers on their registration with the specified authority under the said Act, there have been no reported cases of delays in payments to micro and small enterprises or of interest payments due to delays in such payments.

15 Securitization Transactions

The Bank has not done any securitization transactions during the year ended March 31, 2014 and March 31, 2013.

16 Letter of comfort

The Bank has not issued any letter of comfort during the year ended March 31, 2014 and March 31, 2013.

17 Description of contingent liabilities

1. Claims against the Bank not acknowledged as debts

The Bank is a party to various legal proceedings in the normal course of business. The Bank does not expect the outcome of these proceedings to have a material adverse effect on the Bank''s financial conditions, results of operations or cash flows.

2. Liability on account of forward exchange and derivative contracts.

The Bank enters into foreign exchange contracts, currency options, forward rate agreements, currency swaps and interest rate swaps with interbank participants and customers. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to exchange cash flows by way of interest/principal in one currency against another, based on predetermined rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows. The notional amounts of financial instruments of such foreign exchange contracts and derivatives provide a basis for comparison with instruments recognized on the balance sheet but do not necessarily indicate the amounts of future cash flows involved or the current fair value of the instruments and, therefore, do not indicate the Bank''s exposure to credit or price risks. The derivative instruments become favorable (assets) or unfavorable (liabilities) as a result of fluctuations in market rates or prices relative to their terms. The aggregate contractual or notional amount of derivative financial instruments on hand, the extent to which instruments are favourable or unfavourable and, thus the aggregate fair values of derivative financial assets and liabilities can fluctuate significantly.

Guarantees given on behalf of constituents, acceptances, endorsements and other obligations

As a part of its commercial banking activities the Bank issues documentary credit and guarantees on behalf of its customers. Documentary credits such as letters of credit enhance the credit standing of the customers of the Bank. Guarantees generally represent irrevocable assurances that the Bank will make payments in the event of the customer failing to fulfill its financial or performance obligations.

Other items for which the bank is contingently liable

- Value dated purchase of securities

- Capital commitments

- Foreign Exchange Contracts (Tom & Spot)

Refer Schedule 12 for amounts relating to contingent liability

18. Fixed assets

The software capitalized under Fixed Asset was Rs.215,448 thousands and Rs.261,194 thousands as at March 31, 2014 and March 31, 2013 respectively.

19. prior period comparatives

Previous period''s figures have been regrouped where necessary to conform to current year classification.


Mar 31, 2013

1.1 Background

YES BANK Limited (the ''Bank'' or ''YES BANK'') is a private sector Bank promoted by the late Mr. Ashok Kapur and Mr. Rana Kapoor. YES BANK Limited is a publicly held bank engaged in providing a wide range of banking and financial services. YES BANK Limited is a banking company governed by the Banking Regulation Act, 1949. The Bank was incorporated as a limited company under the Companies Act, 1956 on November 21, 2003. The Bank received the licence to commence banking operations from the Reserve Bank of India (''RBI'') on May 24, 2004. Further, YES BANK was included to the Second Schedule of the Reserve Bank of India Act, 1934 with effect from August 21, 2004.

1.2 Basis of preparation

The financial statements have been prepared in accordance with requirements prescribed under the Third Schedule (Form A and Form B) of the Banking Regulation Act, 1949. The accounting and reporting policies of the Bank used in the preparation of these financial statements conform to Generally Accepted Accounting Principles in India (Indian GAAP), the guidelines issued by the Reserve Bank of India (RBI) from time to time, the Accounting Standards (AS) issued by Institute of Chartered Accountants of India (ICAI) and notified by Companies (Accounting Standards) Rules, 2006 to the extent applicable and practices generally prevalent in the banking industry in India. The Bank follows the accrual method of accounting and the historical cost convention.

1.3 Use of estimates

The preparation of financial statements requires the management to make estimates and assumptions that are considered while reporting amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

1.4.1 Capital

1.4.1.1 Equity Issue

During the financial year ended March 31, 2013, the Bank has issued 5,634,865 shares (previous year: 5,840,300 shares) pursuant to the exercise of stock option aggregating to Rs. 813,123 thousands (previous year: Rs. 696,190 thousands).

1.4.1.2 Capital Reserve

Profit on sale of investments in the HTM category is credited to the profit and loss account and thereafter appropriated to capital reserve (net of applicable taxes and transfer to statutory reserve requirements). During the year Rs. 348,646 thousands (previous year: Rs. 253,337 thousands) was transferred to capital reserve.

1.4.1.3 Investment Reserve

The Bank has transferred Rs. 97,136 thousands (Previous year: Rs. 228 thousands) (net of applicable taxes and transfer to statutory reserve requirements) towards Investment Reserve on provisions for depreciation on investments credited to profit and loss account.

As at March 31, 2013 the Bank is required to maintain minimum capital which is higher of the minimum capital requirement under Basel II framework or 80% (80% as at March 31, 2012) of the minimum capital requirement under Basel I framework. As at March 31, 2013, the capital funds of the Bank are higher than the minimum capital requirement.

1.4.1.5 Tier I and Tier II Capital

During the financial year 2012-13, the Bank has raised Tier II Debt instruments amounting to Rs. 17,638,000 thousands and Innovative Perpetual Debt Instruments (IPDI) amounting to Rs. 1,400,000 thousands. Details of the same are as follows:

*Borrowings in foreign currency converted at the rate prevalent on the date of borrowing for the purpose of capital adequacy.

**Of which amount qualified for Tier I Capital as of March 31, 2012 was Rs. 1,423,193 thousands.

c) As at March 31, 2013 the Bank had non performing Non SLR investments of Rs. 145,367 thousands against which the Bank carried a provision of Rs. 145,367 thousands as at March 31, 2013 (Previous year - Nil).

d) The Bank has not sold and transferred securities to or from HTM category exceeding 5% of the book value of investment held in HTM category at the beginning of the year. The 5% threshold referred to above does not include onetime transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks at the beginning of the year and sale of securities under pre-announced Open Market Operation (OMO) auction to the RBI.

1.4.5 Derivatives 18.5.5.1 Forward Rate Agreement/ Interest Rate Swap

The details of Forward Rate Agreements / Interest Rate Swaps outstanding as at March 31, 2013 are provided in accordance with the RBI guidelines on Forward Rate Agreements and Interest Rate Swaps (MPD. BC.187/07.01.279/1999-2000) as applicable to Indian Rupee transactions. These contracts are subject to the risk of changes in market interest rates as well as credit risk with counterparties.

1.4.5.2 Unhedged / uncovered foreign currency exposure

The Bank''s foreign currency exposures as at March 31, 2013 that are not hedged/covered by either derivative instruments or otherwise are within the Net Overnight Open Position limit (NOOP) and the Aggregate Gap limit, as approved by the RBI. NOOP at March 31, 2013 is Rs. 519,379 thousands (March 31, 2012 Rs. 366,454 thousands).

1.4.5.3 Exchange Traded Interest Rate Derivatives

The Bank has not dealt in exchange traded interest rate derivatives during the financial year ended March 31, 2013 (Previous Year: NIL)

1.4.5.4 Currency Futures

As on March 31, 2013, there were NIL open contracts. As at March 31, 2012 the open contracts on the exchange were USD 403,000 (Rs. 20,642,667) for April 2012 expiry.

1.4.5.5 Disclosures on risk exposure in derivatives

As per RBI Master circular DBOD.No.BP BC.16/21.06.001/2012-13 dated July 2, 2012, the following disclosures are being made with respect to risk exposure in derivatives of the Bank:

a) Purpose: The Bank uses Derivatives including Forwards & swaps for various purposes viz. hedging its currency and interest rate risk in its balance sheet, customer offerings and proprietary trading. The management of these products and businesses is governed by the Market Risk Policy, Investment Policy, Derivatives Policy, Derivatives Appropriateness Policy, Hedging Policy and ALM policy.

b) Structure: The Board of Directors of the Bank have constituted a Board level sub-committee, the Risk Monitoring Committee (''RMC'') and delegated to it all functions and responsibilities relating to the risk management policy of the Bank and its supervision thereof.

c) As part of prudent business and risk management practice, the Bank has also instituted a comprehensive limit and control structure encompassing Value-at-Risk (VAR), Stop loss & credit limits for derivative transactions. The Bank has an elaborate internal reporting mechanism providing regular reports to the RMC.

d) The Bank has an independent Middle Office, which is responsible for monitoring, measurement and analysis of derivative related risks, among others. The Bank has a Credit Risk Management unit which is responsible for setting up counterparty limits and also a treasury operation unit which is responsible for managing operational aspects of derivatives control function and settlement of transactions. The Bank is subject to a concurrent audit for all treasury transactions, including derivatives, a monthly report of which is periodically submitted to the Audit & Compliance Committee of the Bank.

e) In addition to the above, the Bank independently evaluates the potential credit exposure on account of all derivative transactions, wherein risk limits are specified separately for each product, in terms of both credit exposure and tenor. As mandated by the Credit Policy of the Bank, the Bank has instituted an approval structure for all treasury/derivative related credit exposures. Wherever necessary, appropriate credit covenants are stipulated as trigger events to call for collaterals or terminate a transaction and contain the risk.

f) The Bank reports all trading positions to the management on a daily basis. The Bank revalues its trading position on a daily basis for Management and Information System (''MIS'') and control purposes and records the same in the books of accounts on a monthly basis.

g) For derivative contracts in the banking book designated as hedge, the Bank documents at the inception of the relationship between the hedging instrument and the hedged item, the risk management objective for undertaking the hedge.

h) Refer Note 18.4.6 for accounting policy on derivatives.

1. Forwards, Options, cross currency swaps and currency futures are included in currency derivatives

2. Currency Derivatives excludes notional amount of option sold of Rs. 4,072,253 thousands and Rs. 27,086,499 thousands as on March 31, 2013 and March 31, 2012 respectively.

3. Trading portfolio including accrued interest.

4. Mark to Market for credit exposure includes accrued interest. Does not include Forward exchange contracts of original maturity of 14 days or less, Swap facility entered with RBI under Expansion of Export Credit in Foreign currency and forward contracts settling through CCIL under Forex Forward Segment (however includes 100% of Margin under Settlement Guarantee Fund and Default Fund with CCIL).

Note:

1) Denotes absolute value of loss which the Bank could suffer on account of a change in interest rates by 1% which however doesn''t capture the off-setting exposures between interest rate and currency derivatives.

2) PV01 exposures reported above may not necessarily indicate the interest rate risk the bank is exposed to, given that PV01 exposures in Investments (which may offset the PV01 reflected above) do not form part of the above table.

1.4.6.2 Provision coverage Ratio

The provision coverage ratio of the Bank as at March 31, 2013 computed as per the RBI guidelines is 92.59% (previous year 79.18%) (excluding technical write-offs).

1.4.6.3 Concentration of NPAs

Exposure (Funded Non Funded) of the Bank to top four NPA is Rs. 558,250 thousands as at March 31, 2013 (previous year Rs. 586,371 thousands) and the Bank has provided for Rs. 558,250 thousands (previous year Rs. 522,545 thousands) for the same.

1.4.6.4 Sector-wise NPAs

The details of Sector-wise NPAs as at March 31, 2013 and March 31, 2012 are given below:

1.4.8 Non-performing financial assets purchased/ sold from/ to other bank

The Bank has not purchased/sold any non performing financial assets from/to bank during the year ended March 31, 2013 and March 31, 2012.

1.4.9 Provisions for Standard Assets

Provision on standard advances is Rs. 2,655,326 thousands and Rs. 2,107,828 thousands as at March 31, 2013 and March 31, 2012 respectively.

1 Working funds represents the average of total assets as reported in Return Form X to RBI under Section 27 of the Banking Regulation Act, 1949.

2 For the purpose of computation of business per employee (deposits plus advances), interbank deposits have been excluded and average employees have been considered.

1.4.11 Asset Liability Management

In compiling the information of maturity pattern (refer 18.5.11 (a) and (b) below), estimates and assumptions have been made by the management and have been relied upon by the auditors. For Investment Securities, the Bank buckets HFT portfolio and related depreciation in 29-90 days bucket or actual maturity whichever is earlier.

*For the purpose of disclosing the maturity pattern, loan and advances that have been subject to risk participation vide Inter-Bank Participation Certificates (''IBPCs'') have been classified in the maturity bucket corresponding to the original maturity of such loans and advances gross of any risk participation. Correspondingly, the balances have been reported net of IBPC maturities falling due in the respective buckets.

1.4.12 Exposures

The Bank has lending to sectors, which are sensitive to asset price fluctuations. Such sectors include capital market, real estate and commodities.

1.4.12.3 Risk Category wise Country Exposure

As per the extant RBI guidelines, the country exposure of the Bank is categorised into various risk categories listed in the following table. As at March 31, 2013, the Bank''s funded exposure to any individual country did not exceed 1% of the total funded assets of the Bank

1.4.12.4 Details of Single Borrower Limit (SBL) and Group Borrower Limit (GBL)

During the year ended March 31, 2013, the Bank has complied with the Reserve Bank of India guidelines on single borrower and borrower group limit. As per the exposure limits permitted under the extant RBI regulation, the Bank, with the approval of the Board of Directors, can enhance exposure to a single borrower or borrower group by a further 5 percent of capital funds. During the year ended March 31, 2013, with the prior approval of the Board of Directors, the Bank exceeded the single borrower limit of 15% of capital funds to Tata Steel and Hindalco Industries. At March 31, 2013, the exposure to Tata Steel as a percentage of capital funds was 11.68% and exposure to Hindalco Industries as a percentage of capital funds was 5.32%.

ii) The Bank nets off the Income tax provision with Advance and tax deducted at source. This net position is reflected in Other Assets (Schedule 11) as at March 31, 2012 and in Other Liabilities (Schedule 5) as at March 31, 2013.

1.5.2 Disclosure of penalties imposed by RBI

No penalty has been imposed by RBI on the Bank during the financial year ended March 31, 2013.

For the financial year ended March 31, 2012, pursuant to the show cause notice received by the Bank in October 2010 relating to contravention of directions and guidelines on derivative transactions, RBI has levied penalty of Rs. 1,500 thousand under section 47A (1) (b) read with section 46(4) of Banking Regulation Act, 1949.

1.5.3 Fees/ Remuneration received from bancassurance

Bank has earned Rs. 200,049 thousands from bancassurance business during year ended March 31, 2013 (previous year: Rs. 148,458 thousands).

1.5.4 Concentration of Deposits

As at March 31, 2013, the deposits of top 20 depositors aggregated to Rs. 100,431,510 thousands (previous year: Rs. 86,463,978 thousands) (excluding certificate of deposits, which are tradable instruments), representing 15.01% (previous year: 17.59%) of the total deposit base.

1.5.5 Concentration of Advances

As at March 31, 2013 the top 20 advances aggregated to Rs. 140,002,772 thousands (previous year Rs. 116,461,727 thousands), representing 13.38% (previous year 13.02%) of the total advances. For this purpose, advance is computed as per definition of Credit Exposure in RBI Master Circular on Exposure Norms DB0D.No.Dir.BC.3/13.03.00/2012-13 dated July 2, 2012.

1.5.6 Concentration of Exposures

As at March 31, 2013 the top 20 exposures aggregated to Rs. 193,299,61 1 thousands (previous year Rs. 139,821,108 thousands), representing 15.55% (previous year 13.80%) of the total exposures. Exposure is computed as per definition of Credit and Investment Exposure in RBI Master Circular on Exposure Norms DB0D.No.Dir.BC.3/13.03.00/2012- 13 dated July 2, 2012.

1.5.7 Overseas Assets, NPAs and Revenue

For the year ended March 31, 2013 and March 31, 2012, the Bank has not earned any revenue from overseas branches. The Bank does not have any assets or NPA from overseas branches as at March 31, 2013 and March 31, 2012.

1.5.8 Sponsored SPVs

The Bank has not sponsored any SPV and hence there is no consolidation in Bank''s books.

1.6.1 Staff retirement benefits

The following table sets out the funded status of the Gratuity Plan and the amounts recognised in the Bank''s financial statements as of March 31, 2013 and March 31, 2012:

1.6.2 Segment Reporting

Pursuant to the guidelines issued by RBI on AS-17 (Segment Reporting) - Enhancement of Disclosures dated April 18, 2007, effective from period ending March 31, 2008, the following business segments have been reported.

- Treasury: Includes investments, all financial markets activities undertaken on behalf of the Bank''s customers, proprietary trading, maintenance of reserve requirements and resource mobilisation from other banks and financial institutions.

- Corporate / Wholesale Banking: Includes lending, deposit taking and other services offered to corporate customers.

- Retail Banking: Includes lending, deposit taking and other services offered to retail customers.

- Other Banking Operations: Includes para banking activities like third party product distribution, merchant banking etc.

Notes for segment reporting:

1. The business of the Bank is concentrated in India. Accordingly, geographical segment results have not been reported.

2. In computing the above information, certain estimates and assumptions have been made by the Management and have been relied upon by the auditors.

3. Income, expense, assets and liabilities have been either specifically identified with individual segment or allocated to segments on a systematic basis or classified as unallocated.

4. Fixed assets and related depreciation on fixed assets, non treasury related bank balances at branches, Bills payable, Tax related accounts, Tier II instruments, IPDI instruments and relevant interest and rent expenses which cannot be allocated to any segments have been classified as unallocated. The unallocated liabilities include Share Capital and Reserves and Surplus.

5. Inter-segment transactions have been generally based on transfer pricing measures as determined by the Management.

1.6.3 Related Party Disclosures

The Bank has transactions with its related parties comprising of subsidiary, key management personnel and the relative of key management personnel

a) As per AS 18 "Related Party Disclosures", prescribed by the Companies (Accounting Standards) Rules, 2006, the Bank''s related parties for the year ended March 31, 2013 are disclosed below:

Subsidiary

- Yes Securities (India) Limited.

Individuals having significant influence:

- Mr. Rana Kapoor, Managing Director & CEO

Key Management Personnel (''KMP'') (Whole time Director)

- Mr. Rana Kapoor, Managing Director & CEO

* Represents outstanding as of March 31, 2013

# In Financial Year 2012-13 there was only one related party in the said category, hence the Bank has not disclosed the details of transactions in accordance with circular issued by the RBI on March 29, 2003 "Guidance on compliance with the accounting standards by banks".

b) As per AS 18 "Related Party Disclosures", prescribed by the Companies (Accounting Standards) Rules, 2006, the Bank''s related parties for the year ended March 31, 2012 are disclosed below:

Individuals having significant influence:

- Mr. Rana Kapoor, Managing Director & CEO

Key Management Personnel (''KMP'') (Whole time Director)

- Mr. Rana Kapoor, Managing Director & CEO

# In Financial Year 2011-12 there was only one related party in the said category, hence the Bank has not disclosed the details of transactions in accordance with circular issued by the RBI on March 29, 2003 "Guidance on compliance with the accounting standards by banks"

1.6.4 Operating Leases

Lease payments recognised in the profit and loss account for the year ended March 31, 2013 was Rs. 1,550,742 thousands (Previous year: Rs. 1,203,222 thousands).

The Bank does not have any provisions relating to contingent rent.

The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements. There are no undue restrictions or onerous clauses in the agreements.

1.6.5 Earnings Per Share (''EPS'')

The Bank reports basic and diluted earnings per equity share in accordance with AS-20, "Earnings Per Share". The dilutive impact is mainly due to stock options granted to employees by the Bank.

1.6.6 ESOP disclosures

Statutory Disclosures Regarding Joining Stock Option Scheme:

The Bank has five Employee Stock Option Schemes viz. Joining Stock Option Plan I (JSOP I) , Joining Employee Stock Option Plan II (JESOP II), Joining Employee Stock Option Plan III (JESOP III), YBL ESOP (consisting of two sub schemes) and YBL JESOP V/ PESOP II (consisting of three sub schemes). The schemes include provisions for grant of options to eligible employees. All the aforesaid schemes have been approved by the Board Remuneration Committee and the Board of Directors and were also approved by the members of the Bank.

JSOP I is administered by the Board Remuneration Committee of the Bank and was in force for employees joining the Bank on or before March 31, 2005. All the grants under JSOP I were made before the IPO of the Bank.

JESOP II and JESOP III are administered by the Board Remuneration Committee of the Bank and were in force for employees joining the Bank up to March 31, 2006 and March 31, 2007 respectively.

YBL ESOP (JESOP IV), a sub scheme of YBL ESOP and YBL JESOP V, a sub scheme of YBL JESOP V/ PESOP II are also administered by the Board Remuneration Committee of the Bank and are in force for employees joining the Bank from time to time.

Under the above Plans, vesting takes place at the end of three years from the grant date for 50% of the options granted and at the end of five years for the balance. Options under all these 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.

YBL ESOP (PESOP I), a sub scheme of YBL ESOP YBL PESOP II and YBL PESOP II - 2010, sub schemes of YBL JESOP V/ PESOP II are Performance Stock Option Plans and are also administered by the Board Remuneration Committee of the Bank. Under YBL ESOP (PESOP I) vesting takes place at the end of each year from the grant date for 25% of the options granted and are settled with equity shares being allotted to the beneficiary upon exercise. Under YBL PESOP II, 30% of the granted options vest at the end of first year, 30% vest at the end of second year and balance 40% vest at the end of third year. Further grants under PESOP II had been discontinued with effect from January 20, 2010. Under YBL PESOP II - 2010, 30% of the granted options vest at the end of the third year, 30% vest at the end of the fourth year and balance vest at the end of the fifth year.

The Bank has charged Nil, being the intrinsic value of the stock options granted for the year ended March 31, 2013. 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 Rs. 292,207 thousands, the basic earnings per share would have been Rs. 35.71 per share instead of Rs. 36.53 per share; and diluted earnings per share would have been Rs. 34.75 per share instead of Rs. 35.55 per share.

The Bank has charged Nil, being the intrinsic value of the stock options granted for the year ended March 31, 2012. 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 Rs. 294,869 thousands, the basic earnings per share would have been Rs. 27.03 per share instead of Rs. 27.87 per share; and diluted earnings per share would have been Rs. 26.31 per share instead of Rs. 27.13 per share.

1.6.7 Deferred Taxation

The net deferred tax asset of Rs. 1,794,222 thousands as at March 31, 2013 and Rs. 1,367,098 thousands as at March 31, 2012, is included under other assets and the corresponding credits have been taken to the profit and loss account.

1.7 Other Disclosures

1.7.1 Disclosure on Remuneration

a. Information relating to the composition and mandate of the Remuneration Committee.-

The Board of Directors of the Bank through its Board Remuneration Committee (BRC) shall exercise oversight & effective governance over the framing and implementing of the Compensation policy. The BRC shall comprise a minimum of 3 Board members, of which two would be independent directors, besides the MD and CEO.

Composition of the Board Remuneration Committee (BRC) of the Bank as on March 31, 2013 is as follows:

- Mr. Arun Mago (Retired)

- Mr. Wouter Kolff (Retired)

- Lt Gen (Retd.) Mukesh Sabharwal

- Mr. Diwan Arun Nanda - Chairman

- Mr. Rana Kapoor

The roles and responsibilities of the Remuneration Committee are as under-

- to review the Bank''s overall Compensation Structure and related policies with a view to attract, motivate and retain employees and review compensation levels vis-a-vis other banks and the industry in general;

- to determine the Bank''s policies on remuneration packages payable to the Directors including performance/achievement bonus, perquisites, retirals, sitting fee, etc;

- consider grant of stock options to employees and administer and supervise the Employee Stock Option Plans with particular reference to:

- determination of quantum of options to be granted;

- determination of grant price, vesting schedule, exercise period, etc

- procedure for making fair and reasonable adjustments to the number of options granted in case of a corporate action such as rights issues, bonus, share split, mergers, etc.

- conditions under which options would lapse in case of termination due to mis- conduct;

- procedure for cashless exercise of options, if any;

- to frame suitable policies to ensure compliance with all applicable laws, regulations.

- Perform any other act, duty as stipulated by the Companies Act, Reserve Bank of India, Securities & Exchange Board of India, Stock Exchanges, and any other regulatory authority, as prescribed from time to time.

b. Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy-

The Bank has framed Compensation and benefit policy based on the guidelines contained in the RBI circular DBOD No. BC.72/29.67.001/2011-12 dated January 13, 2012 which is approved by the Board Remuneration committee on January 7, 2013. The remuneration of MD&CEO/Wholetime Directors will be in accordance with the above mentioned circular and shall be reviewed basis RBI guidelines issued from time to time and approved by BRC before obtaining Regulatory approvals.

The compensation philosophy of the Bank is aligned to the organisational values aimed at encouraging Professional Entrepreneurship and reinforcing a strong culture promoting meritocracy, performance, potential and prudent risk taking.

The Bank''s Remuneration policy is to position its pay structure competitively in relation to the market to be able to attract and retain critical talent. The compensation strategy clearly endeavours to differentiate performance significantly and link the same with quality and quantum of rewards. The Bank also strives to create long term wealth creation opportunities through stock option schemes.

Human Capital Management shall review the policy annually or as required, based on changes in statutory, regulatory requirements and industry practices pertaining to Compensation and Benefits.

c. Description of the ways in which current and future risks are taken into account in the remuneration processes. It should include the nature and type of the key measures used to take account of these risks

The broad factors taken into account for the Annual Review /revision of Fixed Compensation (TCC) & Performance Bonus are:

1. Individual performance based on the Annual Performance Review (APR) process of the Bank.

2. Business Unit performance in terms of financial outcomes, productivity, etc.

3. Consideration of all types of risk factors and shall be symmetrical with risk outcomes as well as sensitive to the time horizon of risk.

4. Profitability of the Bank.

5. Industry Benchmarking and consideration towards cost of living adjustment/inflation

The Bank subscribes to a ''Sum-of-Parts'' compensation methodology, which is reflective of the Bank''s commitment and philosophy of creating and sharing value with its employee partners.

The sum-of-parts compensation comprises:

Fixed Compensation

Variable Compensation in the form of Performance Bonus

Employee Stock Option Plans (ESOP)

The Board of Directors of the Bank through its Board Remuneration Committee (BRC) shall exercise oversight & effective governance over the framing and implementing of the Compensation policy. Human Capital Management under the guidance of MD & CEO shall administer the Compensation and Benefits structure in line with Industry practices and statutory requirements as applicable from time to time.

d. Description of the ways in which the bank seeks to link performance during a performance measurement period with levels of remuneration and a discussion of the bank''s policy on deferral and vesting of variable remuneration and a discussion of the bank''s policy and criteria for adjusting deferred remuneration before vesting and after vesting.

The Bank ensures that the compensation remains adjusted for all types of risk, symmetrical with risk outcomes as well as sensitive to the time horizon of risk. Further, the compensation in all forms will be consistent with the risk alignment.

One of the key factors to be considered for the Annual Review /revision of Fixed Compensation (TCC) & Performance Bonus includes individual performance based on the Annual Performance Review (APR) process of the Bank. The evaluation on risk management parameters is an integral part of the Annual Performance Review process, forming part of Key Result Areas of the executives with suitable weightage. The inputs for assessment on these parameters will be independently provided by the Risk Management function of the Bank.

For the services pertaining to financial year 2012- 13 where variable pay is 50% or more, 40-60% shall be deferred over minimum period of 3 years. In the event of a negative contribution, deferred compensation shall be subject to appropriate malus/claw back arrangements as decided by the Board Remuneration Committee. Guaranteed bonus shall not be a part of the compensation plan.

The compensation for executives in Risk Control and Compliance functions shall be independent of the business areas they oversee.

The Bank shall not provide any facility or funds or permit employees to insure or hedge their compensation structure to offset the risk alignment effects embedded in their compensation arrangement.

e. Description of the different forms of variable remuneration (i.e. cash, shares, ESOPs and other forms) that the bank utilises and the rationale for using these different forms.

The Bank subscribes to a ''Sum-of-Parts'' compensation methodology, which is reflective of the commitment and philosophy of creating and sharing value with the employee partners. The sum- of-parts compensation for executives comprises:

Fixed Compensation (Total Cost to Company-TCC)

- Includes value of perquisites.

Variable compensation in the form of Performance /Deferred Bonus -

Variable pay shall be in the form of Performance Bonus which will be calculated as a percentage of Fixed Pay. The evaluation on risk management parameters is an integral part of the Annual Performance Review process, forming part of Key Result Areas of the executives with suitable weightage. The inputs for assessment on these parameters will be independently provided by the Risk Management function of the Bank.

Employee Stock Options Plans - These are formulated on a mid to long term basis by the Bank in accordance with SEBI and other Regulatory guidelines. The grant of ESOP shall be under approval from MD & CEO, which shall be subsequently ratified by the Board Remuneration Committee.

f. Quantitative Disclosures on Remuneration for MD & CEO and other risk takers

There were 2 meetings of the Board remuneration committee held during the year ended March 31, 2013. The Bank had paid a remuneration of Rs. 80 thousands to the members of the remuneration committee.

Note:

1. Amounts disclosed represents variable pay paid during the year ended March 31, 2013 for services rendered by the risk takers during the year March 31, 2012, since the bonus pool for the year ended March 31, 2013 has not yet been allocated and accordingly, the deferred component for the risk takers is yet to be determined.

2. Amounts disclosed represents only fixed component paid during the year ended March 31, 2013 to the risk takers since the bonus pool for the year ended March 31, 2013 has not yet been allocated and accordingly, the deferred component for the risk takers is yet to be determined.

3. Compensation for MD & CEO is as approved by the RBI and paid by the Bank to the MD & CEO. Compensation for other risk takers is as approved by the Bank.

4. ESOPs have not been considered as per the extant RBI guidelines.

1.7.1 Movement in Floating Provisions

The bank has not created or utilised any floating provisions during the financial year ended March 31, 2013 and financial year ended March 31, 2012. The floating provision as at March 31, 2013 was Rs. Nil (Previous year: Rs. Nil).

1.7.2 Drawdown on Reserves

During the financial year ended March 31, 2013, the Bank has not drawn down any reserve. (Previous year: Rs. Nil).

1.7.3 Dues to Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October 02, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. On the basis of information and records available with the management and confirmation sought by the management from suppliers on their registration with the specified authority under MSMED, there have been no reported cases of delays in payments to micro, small and medium enterprises or of interest payments due to delays in such payments.

1.7.4 Securitisation Transactions

The Bank has not done any securitisation transactions during the year ended March 31, 2013 and March 31, 2012.

1.7.5 Letter of comfort

The Bank has not issued any letter of comfort during the year ended March 31, 2013 and March 31, 2012.

1.7.6 Fixed Assets

The software capitalised under Fixed Asset was Rs. 261,194 thousands and Rs. 110,866 thousands as at March 31, 2013 and March 31, 2012 respectively.

1.7.5 Prior period comparatives

Previous period''s figures have been regrouped where necessary to conform to current year classification.


Mar 31, 2011

1.1 Background

Yes Bank Limited (the Bank or Yes Bank) is a private sector Bank promoted by the late Mr. ashok kapur and Mr. Rana kapoor. Yes Bank Limited is a publicly held Bank engaged in providing a wide range of banking and financial services. Yes Bank Limited is a banking company governed by the Banking Regulation act, 1949. The Bank was incorporated as a limited company under the Companies act, 1956 on november 21, 2003. The Bank received the licence to commence banking operations from the Reserve Bank of India (RBI) on May 24, 2004. Further, Yes Bank was included to the second schedule of the Reserve Bank of India act, 1934 with effect from august 21, 2004.

1.2 Basis of preparation

The financial statements have been prepared in accordance with requirements prescribed under the Third schedule (Form a and Form B) of the Banking Regulation act, 1949. The accounting and reporting policies of the Bank used in the preparation of these financial statements conform to Generally accepted accounting Principles in India (Indian GaaP), the guidelines issued by the Reserve Bank of India (RBI) from time to time, the accounting standards (as) prescribed by the Companies (accounting standards) Rules, 2006 to the extent applicable and practices generally prevalent in the banking industry in India. The Bank follows the accrual method of accounting (except where otherwise stated), and the historical cost convention.

1.3 Use of estimates

The preparation of financial statements requires the management to make estimates and assumptions that are considered while reporting amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. any revision to accounting estimates is recognized prospectively in current and future periods.

1.3.1 Segment Reporting

Pursuant to the guidelines issued by RBI on as-17 (segment Reporting) - enhancement of Disclosures dated april 18, 2007, effective from period ending March 31, 2008, the following business segments have been reported.

- Treasury: Includes investments, all financial markets activities undertaken on behalf of the Banks customers, proprietary trading, maintenance of reserve requirements and resource mobilisation from other Banks and financial institutions.

- Corporate - Wholesale Banking: Includes lending, deposit taking and other services offered to corporate customers.

- Retail Banking: Includes lending, deposit taking and other services offered to retail customers.

- Other Banking Operations: Includes para banking activities like third party product distribution, merchant banking etc.

1.3.2 Related Party Disclosures

a) as per as 18 "Related Party Disclosures", prescribed by the Companies (accounting standards) Rules, 2006, the Banks related parties for the year ended March 31, 2011 are disclosed below:

Individuals having significant infuence:

- Mr. Rana Kapoor, Managing Director & CEO

Key Management Personnel (KMP) (Wholetime Director)

- Mr. Rana Kapoor, Managing Director & CEO

# In Financial Year 2010-11, there was only one related party in the said category, hence the Bank has not disclosed the details of transactions in accordance with circular issued by the RBI on March 29, 2003 "Guidance on compliance with the accounting standards by banks."

b) as per as 18 "Related Party Disclosures", prescribed by the Companies (accounting standards) Rules, 2006, the Banks related parties for the year ended March 31, 2010 are disclosed below:

Individuals having significant infuence:

- Mr. Rana Kapoor, Managing Director & CEO

Key Management Personnel (KMP) (Wholetime Director)

- Mr. Rana Kapoor, Managing Director & CEO

1.3.4 Operating Leases

Lease payments recognised in the Profit and loss account for the year ended March 31, 2011 was Rs. 833,371 thousands (Previous year: Rs. 823,443 thousands).

1.3.5 Earnings Per Share (EPS)

The Bank reports basic and diluted earnings per equity share in accordance with as-20, "earnings per share". The dilutive impact is mainly due to stock options granted to employees by the Bank.

1.3.6 ESOP disclosures

statutory Disclosures Regarding Joining stock Option scheme:

The Bank has fve employee stock Option schemes viz. Joining stock Option Plan I (JsOP I) , Joining employee stock Option Plan II (JesOP II), Joining employee stock Option Plan III (JesOP III), YBL esOP (consisting of two sub schemes) and YBL JesOP V- PesOP II (consisting of three sub-schemes). The schemes include provisions for grant of options to eligible employees. all the aforesaid schemes have been approved by the Board Remuneration Committee and the Board of Directors and were also approved by the members of the Bank.

JSOP I is administered by the Board Remuneration Committee of the Bank and was in force for employees joining the Bank on or before March 31, 2005. all the grants under JsOP I were made before the IPO of the Bank.

JESOP II and JESOP III are administered by the Board Remuneration Committee of the Bank and were in force for employees joining the Bank up to March 31, 2006 and March 31, 2007 respectively.

YBL ESOP (JESOP IV), a sub scheme of YBL esOP and YBL JESOP V, a sub-scheme of YBL JesOP V- PesOP II are also administered by the Board Remuneration Committee of the Bank and are in force for employees joining the Bank from time to time.

Under the above Plans, vesting takes place at the end of three years from the grant date for 50% of the options granted and at the end of fve years for the balance. Options under all these plans are granted for a term of 10 years (inclusive of the vesting period) and are settled with equity shares being allotted to the benefciary upon exercise.

YBL ESOP (PESOP I), a sub scheme of YBL ESOP, YBL PESOP II and YBL PESOP II - 2010, sub-schemes of YBL JESOP V- PESOP II are Performance stock Option Plans and are also administered by the Board Remuneration Committee of the Bank. Under YBL esOP (PESOP I) vesting takes place at the end of each year from the grant date for 25% of the options granted and are settled with equity shares being allotted to the benefciary upon exercise. Under YBL PESOP II, 30% of the granted options vest at the end of frst year, 30% vest at the end of second year and balance 40% vest at the end of third year. Further grants under PESOP II had been discontinued with effect from January 20, 2010. Under YBL PESOP II – 2010, 30% of the granted options vest at the end of the third year, 30% vest at the end of the fourth year and balance vest at the end of the ffth year.

1.3.7 Provisions and Contingencies

The breakup of provisions of the Bank for the year ended March 31, 2011 and March 31, 2010 are given below:

(Rs. in thousands) March 31, 2011 March 31, 2010

Provision for taxation 3,650,407 2,487,461

Provision for investments (71,892) 154,103

Provision for standard advances 520,976 388,655

Provision made- write off for non performing advances- off balance sheet exposure 392,628 876,039

Other provisions 140,408 (50,335)

TOTAL 4,632,527 3,855,923

1.4 Other Disclosures

1.4.1 Movement in Floating Provisions

The bank has not created or utilized any foating provisions during the financial year ended March 31, 2011 and financial year ended March 31, 2010. The foating provision as at March 31, 2011 was Rs. nil (Previous year: Rs. nil).

1.4.2 Drawdown on Reserves

During the financial year ended March 31, 2011, the Bank has charged to share Premium account, an amount of Rs. 54,457 thousands on account of the possible disallowance of tax beneft on certain expenses incurred in the financial year ended March 31, 2006, in connection with the Initial Public Offering. In the Financial Year ended March 31, 2006, these expenses were charged net of taxes to the share premium account.

In financial year ended March 31, 2010 the Bank has utilized the share premium received from issue of shares under QIP to meet the share issue expenses of Rs. 146,065 thousands .

1.4.3 Disclosure of complaints

A. Customer Complaints

Year ended March 31, 2011 i) no. of Complaints pending at the beginning of the year 5

ii) no. of Complaints received during the year 629

iii) no. of Complaints redressed during the year 628

iv) no. of Complaints pending at the end of the year 6

B. Awards passed by the Banking Ombudsman

Year ended March 31, 2011 i) no. of unimplemented awards at the beginning of the year nil

ii) no. of awards passed by the Banking Ombudsman during the year nil

iii) no. of awards implemented during the year nil

iv) no. of unimplemented awards at the end of the year nil

1.4.3 Dues to Micro, Small and Medium Enterprises

Under the Micro, small and Medium enterprises Development act, 2006 (MsMeD) which came into force from October 02, 2006, certain disclosures are required to be made relating to Micro, small and Medium enterprises. On the basis of information and records available with the management and confrmation sought by the management from suppliers on their registration with the specifed authority under MsMeD, there have been no reported cases of delays in payments to micro, small and medium enterprises or of interest payments due to delays in such payments.

1.4.4 Letter of comfort

The Bank has not issued any letter of comfort during the year ended March 31, 2011 and March 31, 2010.

1.4.5 Description of contingent liabilities

1. Claims against the Bank not acknowledged as debts

The Bank is a party to various legal proceedings in the normal course of business. The Bank does not expect the outcome of these proceedings to have a material adverse effect on the Banks financial conditions, results of operations or cash fows.

2. Liability on account of forward exchange and derivative contracts.

The Bank enters into foreign exchange contracts, currency options, forward rate agreements, currency swaps and interest rate swaps with interbank participants and customers. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to exchange cash fows by way of interest-principal in one currency against another, based on predetermined rates. Interest rate swaps are commitments to exchange fixed and foating interest rate cash fows. The notional amounts of financial instruments of such foreign exchange contracts and derivatives provide a basis for comparison with instruments recognized on the balance sheet but do not necessarily indicate the amounts of future cash fows involved or the current fair value of the instruments and, therefore, do not indicate the Banks exposure to credit or price risks. The derivative instruments become favorable (assets) or unfavorable (liabilities) as a result of fuctuations in market rates or prices relative to their terms. The aggregate contractual or notional amount of derivative financial instruments on hand, the extent to which instruments are favourable or unfavourable and, thus the aggregate fair values of derivative financial assets and liabilities can fuctuate significantly.

3. Guarantees given on behalf of constituents, acceptances, endorsements and other obligations as a part of its commercial banking activities the Bank issues documentary credit and , guarantees on behalf of its customers. Documentary credits such as letters of credit enhance the credit standing of the customers of the Bank. Guarantees generally represent irrevocable assurances that the Bank will make payments in the event of the customer failing to fulfll its financial or performance obligations.

4. Other items for which the Bank is contingently liable

- Value dated purchase of securities

- Capital commitments

- Foreign exchange Contracts (Tom and spot)

1.4.6 Prior period comparatives

Previous periods fgures have been regrouped where necessary to conform to current year Classification.


Mar 31, 2010

1.1 Background

YES BANK Limited (the Bank orYES BANK) is a private sector Bank promoted by the late Mr Ashok Kapur and Mr Rana KapoorYES BANK Limited is a publicly held Bank engaged in providing a wide range of banking and financial services.YES BANK Limited is a banking company governed by the Banking Regulation Act, 1949.The Bank was incorporated as a limited company under the Companies Act, 1956, on November 21,2003.The Bank received the licence to commence banking operations from the Reserve Bank of India (RBI) on May 24, 2004. Further, YES BANK was included to the Second Schedule of the Reserve Bank of India Act, 1934 with effect from August 21, 2004.

1.2.1 Segment Reporting

Pursuant to the guidelines issued by RBI on Accounting Standard - 17 (Segment Reporting) - Enhancement of Disclosures dated April 18,2007, effective from period ending March 31, 2008, the following business segments have been reported.

- Treasury: Includes all financial markets activities undertaken on behalf of the Banks customers, proprietary trading, maintenance of reserve requirements and resource mobilisation from other banks and financial institutions.

- Corporate/Wholesale Banking: Includes lending, deposit taking and other services offered to corporate customers.

- Retail Banking: Includes lending, deposit taking and other services offered to retail customers.

- Other banking operations: Includes para-banking activities like third party product distribution, merchant banking etc.

1.2.2 Related Party Disclosures

a) As per AS 18 "Related Party Disclosures", prescribed by the Companies (Accounting Standards) Rules, 2006, the Banks related parties for the year ended March 31,2010 are disclosed below:

Individuals having significant influence:

- Mr, Rana Kapoor, Managing Director & CEO

Key Management Personnel (KMP) (Wholetime Director)

- Mr. Rana Kapoor, Managing Director & CEO

b) As per AS 18 "Related Party Disclosures", prescribed by the Companies (Accounting Standards) Rules, 2006, the Banks related parties for the year ended March 31,2009 are disclosed below:

Individuals having significant influence:

- Mr Rana Kapoor Managing Director & CEO

- Mr H. Srikrishnan, Executive Director ( Up to April 25,2008) Key Management Personnel (KMP) (Wholetime Director)

- Mr Rana Kapoor Managing Director & CEO

- Mr H. Srikrishnan, Executive Director ( Up to April 25,2008)

1.3.1 Operating Leases

Lease payments recognised in the profit and loss account for the year ended March 31, 2010 was Rs. 823,443 thousands (Previous year: Rs. 581,105 thousands).

1.3.2 Earnings Per Share (EPS)

The Bank reports basic and diluted earnings per equity share in accordance with Accounting Standard 20, "Earnings per Share". The dilutive impact is mainly due to stock options granted to employees by the Bank.

1.3.3 ESOP disclosures

Statutory Disclosures Regarding Joining Stock Option Scheme:

The Bank has five Employee Stock Option Schemes viz. Joining Stock Option Plan I (JSOP I), Joining Employee Stock Option Plan II (JESOP II), Joining Employee Stock Option Plan III (JESOP lll),YBL ESOP (consisting of two sub schemes) and YBL JESOP V/ PESOP II (consisting of two sub schemes).The schemes include provisions for grant of options to eligible employees. All the aforesaid schemes have been approved by the Board Remuneration Committee and the Board of Directors and were also approved by the members of the Bank.

JESOP I is administered by the Board Remuneration Committee of the Bank and was in force for employees joining the Bank on or before March 3 1, 2005. Ail the grants under JESOP I were made before the IPO of the Bank.

JESOP II and JESOP III are administered by the Board Remuneration Committee of the Bank and were in force for employees joining the Bank up to March 31, 2006, March 31, 2007 and March 31,2008.

YBL ESOP GESOP IV), a sub scheme of YBL ESOP and YBL JESOP V, a sub scheme of YBL JESOP V/ PESOP II are also administered by the Board Remuneration Committee of the Bank and are in force for employees joining the Bank from time to time.

Under the above Plans, vesting takes place at the end of three years from the grant date for 50% of the options granted and at the end of five years for the balance, Options under all these 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.

YBL ESOP (PESOP I), a sub scheme ofYBL ESOP and YBL PESOP II, a sub scheme ofYBL JESOP V/ PESOP II are Performance Stock Option Plans and are also administered by the Board Remuneration Committee of the Bank. UnderYBL ESOP (PESOP I) vesting takes place at the end of each year from the grant date for 25% of the options granted and are settled with equity shares being allotted to the beneficiary upon exercise. UnderYBL PESOP II, 3096 of the granted options vest at the end of first year; 30 % vest at the end of second year and balance 4096 vest at the end of third year

1.4.1 Deferred Taxation

The net deferred tax asset of Rs. 652,928 thousands as at March 31,2010, is included under other assets and the corresponding credits have been taken to the profit and loss account.

1,5 Other Disclosures

1.5.1 Movement in Floating Provisions

The Bank has not created or utilised any floating provisions during the year ended March 31, 2010 and year ended March 31, 2009.The floating provision as at March 31, 2010 was Nil (Previous year: Nil).

1.5.2 Drawdown on Reserves

The Bank has utilised the share premium received from issue of shares under Qualified Institutions Placements (QIP) to meet the share issue expenses of Rs. 146,065 thousands (Previous year: NIL).

1.5.3 Dues to Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October 02, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. On the basis of information and records available with the management and confirmation sought by the management from suppliers on their registration with the specified authority under MSMED, there have been no reported cases of delays in payments to micro, small and medium enterprises or of interest payments due to delays in such payments.

1.5.4 Letter of comfort

The Bank has not issued any letter of comfort during the year ended March 31, 2010 and March 31, 2009.

1.5.5 Description of contingent liabilities

Sr. No. Contingent Liabilities Brief

1. Claims against the Bank not The Bank is a party to various legal proceedings in the normal course of business. The acknowledged as debts Bank does not expect the outcome of these proceedings to have a material adverse effect on the Banks financial conditions, results of operations or cash flows.

2. Liability on account of forward The Bank enters into foreign exchange contracts, currency options, forward rate exchange and derivative contracts agreements, currency swaps and interest rate swaps with interbank participants and customers. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to exchange cash flows by way of interest/principal in one currency against another; based on predetermined rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows. The notional amounts of financial instruments of such foreign exchange contracts and derivatives provide a basis for comparison with instruments recognised on the balance sheet but do not necessarily indicate the amounts of future cash flows involved or the current fair value of the instruments and, therefore. do not indicate the Banks exposure to credit or price risks.The derivative instruments become favourable (assets) or unfavourable (liabilities) as a result of fluctuations in market rates or prices relative to their terms. The aggregate contractual or notional amount of derivative financial instruments on hand, the extent to which instruments are favourable or unfavourable and, thus the aggregate fair values of derivative financial assets and liabilities can fluctuate significantly.

3. Guarantees given on behalf As a part of its commercial banking activities the Bank issues documentary credit and of constituents, acceptances, guarantees on behalf of its customers. Documentary credits such as letters of credit endorsements and other enhance the credit standing of the customers of the Bank. Guarantees generally represent obligations irrevocable assurances that the Bank will make payments in the event of the customer failing to fulfil its financial or performance obligations.

4. Other items for which the Bank is -Value dated purchase of securities contingently liable

- Capital commitments

- Foreign Exchange Contracts (Tom & Spot)

1.6.1 Priorperiod comparatives

Previous periods figures have been regrouped where necessary to conform to current year classification.

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