ALIYA FA

MCOM PART-I SEMESTER –I ROLL. NO: 04

EXECUTIVE SUMMARY

Yes Bank Limited provides banking and financial services in India and internationally. It operates through Treasury, Corporate/Wholesale Banking, Retail Banking, and Other Banking Operations segments. The company offers corporate banking services, such as working capital finance, term loans, corporate finance products, treasury services, and liquidity management solutions; and commercial banking services.

It also provides retail banking products, including secured business, car, two wheeler, commercial vehicle, construction equipment, tractor, gold, personal, and home loans, as well as loans against securities; and business banking services to small and medium businesses.

In addition, the company offers financial and advisory services to ministries under the union government, state government, central and state public sector undertakings, boards, and other affiliates; and banking solutions to banks, non-banking finance companies, housing finance companies, micro finance institutions, insurance companies and brokers, mutual funds, finance institutions, and capital market participants.

Further, it provides Internet payment gateway, debit cards, CASA products, ATMs, and mobile banking services; and transaction banking services comprising corporate current accounts, cash management, capital markets and escrow, trade finance, and bullion trading services.

Additionally, the company offers financial products and services; loan syndication and asset management services; investment banking services, including mergers and acquisition advisory, private equity fundraising, and equity capital markets services; and microcredit, micro-saving, micro-insurance, and remittance services. As of March 31, 2015, it operated 630 branches; 2 national operating centers in Mumbai and New Delhi; 1,194 ATMs; and 35 bunch note acceptors.

Yes Bank Limited has a strategic partnership with Taisys Technologies Co. Ltd. The company was incorporated in 2003 and is headquartered in Mumbai, India

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CHAPTER – 1

INTRODUCTION

INTRODUCTION :-

Yes Bank represents a true spirit of business excellence, encompassing facets of knowledge,

human capital, trust & transparency, technology and responsibility.

Yes bank are India’s fifth largest private sector bank. Yes bank have steadily built a full-

service commercial bank with Corporate, Retail and SME Banking platforms, and with a

comprehensive product suite encompassing Financial Markets, Investment Banking, Corporate

Finance, Branch Banking, Business Banking and Transaction Banking, as well as Wealth

Management offerings. Yes Bank is the only Greenfield Bank licence awarded by the RBI in the last two

decades. YES BANK has adopted international best,practises the highest standard of service quality and

operational excellence and offers comprehensive banking and financial solutions to all its valued

customer .Today YES BANK has a wide spread branch network of over 630 branches across 375

cities ,with 1150 ATMS across India

YES BANK has been recognized amongst the top and fastest growing bank in various India banking

leagues tables by prestigious media houses and global Advisiory firms has received several national and

international honours for YES BANK

YES BANK includes various businesses such as corporate ,investment banking,treasury,transaction

banking and sustainable practises through responsible banking

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YES BANK is steadily evolving as a professional BANK OF INDIA with the long term mission of

building the finest quality BANK OF WORLD in INDIA by 2020

“A very good validation of YES BANK business and financial model was the fact that instead of

getting granular investors, YESBANK chose to institutionalise the bank from the very inception.

Strong governance and transparency in the business model, right from the beginning, has built

confidence with the team, in the market place and with the regulators. In fact, from its inception,

YES Bank has had a strong governing board, with more than 50 per cent being independent

directorsThe bank is part of global thought leadership forums like the Clinton Global Initiative

(CGI), Triple Bottom Line Investing (TBLI) and Tallberg Forum. Recently, it became the first

Indian Bank to become a signatory with the United Nations Environment Programme (Financial

Initiative).

CHAPTER - 2

HISTORYYes Bank was incorporated as a Public Limited Company on November 21, 2003.Subsequently,

on December 11, 2003, RBI was informed of the participation of three private equity investors

namely {Citicorp International Finance Corporation, ChrysCapital II, LLC and AIF Capital Inc.),

to achieve the financial closure of the Bank. RBI by their letter dated February 26, 2004 provided

their no-objection to the participation of the three private equity investors namely Citicor

International Finance Corporation, ChrysCapital II, LLC and AIF Capital Inc. in the equity of the

Bank at 10%, 7,5% and 7.5%, respectively, and also advised the Bank to infuse a sum of Rs.

2000 million as the paid up capital. Additionally, the RBI advised the Bank to submit an

application for final approval after completion of all formalities for incorporation as a banking

company and setting out the capital structure of the Bank as approved by RBI.

RBI by their letter dated December 29,2003 decided to further extending `In Principle' approval

for a period up to February 29, 2004 to allow the Bank to complete all financial arrangements.

Yes Bank obtained its certificate of Commencement of Business on January 21, 2004.

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Subsequently, in March 2004, the Bank achieved the mobilization of the initial minimum paid up

capital of Rs. 2,000 million. Further, the Promoters by their letter dated March 29, 2004 made a

final application for a banking licence under Section 22 (1) of the Banking Regulation Act, 1949

providing complete details of the capital structure, the composition of Board of Directors, the

proposed human resources, information technology, premises and legal-policies and the

business and financial plan of the Bank.

RBI by their letter dated May 24, 2004, under Section 22 (1) of the Banking Regulation Act,

1949, granted us the licence to commence banking operations in India on certain terms and

conditions including a term that 49.0% of our pre-Issue share capital held by the Promoters

(domestic and foreign) was to be locked-in for five years from the licensing of the Bank, being

May 24,2004. In our case, this 49.0% has been met by locking-in Equity Shares representing

29.0% of the share capital held by Mr. Rana Kapoor and Mr. Ashok Kapur and Equity Shares

representing 20.0% of the share capital held by Rabobank International Holding. See Note 2 in

the section titled Capital Structure-Promoter Contribution and Lock-In on page 13 of this Red

Herring Prospectus.

Further, the terms of the banking license granted to us by RBI require that the promoter holding

in excess of 49%, shall be diluted after one year of the Bank's operation. It is also stipulated that

the paid up capital (which currently stands at 2,000 million) must be raised to Rs. 3,000 million

within three years of commencement of business. Further, by their letter dated September 2,

2004, RBI included the Bank in the Second Schedule of the RBI Act, 1934 with effect from

August 21, 2004 and a corresponding notification was published in the OfficialGazette of India

(PART III-Section 4) on August 16, 2004.

Share Subscription The Promoters, the Promoter Group Companies and Rabobank INTERNATIONAL Holding

executed a Share Subscription Agreement dated November 5, 2003, (the SSA), whereby they

agreed to subscribe to the Equity Shares along with the Private Equity Investors (with whom a

separate agreement was to be executed).

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Under the terms of the SSA, the Promoters have represented that a substantial part of the

consideration received by them from the sale of their shares in Rabo India would be applied

towards the subscription of the Equity Shares. Further, in terms of the SSA, the Promoters have

also represented not to transfer their shareholding in Mags or Morgan, respectively, until the

loans taken by Mags and Morgan from Rabobank International Holding for the purpose of the

purchase of the Equity Shares have been repaid.

The SSA provides that we shall have a Board consisting of a minimum of three and a maximum

of 15 directors. So long as any of the parties to the SSA hold at least 10.0% of the equity share

capital, the Promoters and Doit, as shareholders, have the fight to nominate three independent

directors on the Board, in addition to Mr. Ashok Kapur being the non-executive Chairman of the

Bank and Mr. Rana Kapoor being the Managing Director and Chief Executive Officer of the

Bank. Rabobank International Holding also has the right to nominate one non-rotational director

on the Board, The SSA provides that the Promoters and Doit, and Rabobank International

Holding, are not permitted to transfer their locked-in shareholding in the Bank for a period of

five years from March 10, 2004. Under the terms of the SSA, locked-in shares refer to

40 million Equity Shares.

CHAPTER – 3COMPANY PROFILE

Vision, Mission and Business Strategy:-

VISIONS:-

1) To be recognized as the finest quality bank by 2020

2 ) To evolve as the professionals bank of India

MISSIONS:-

To establish a high quality,customer centic,service driven,private Indian Bank catering to the

Future Business of India

The version 2.0 launched in April 2010 aims to achieve the following by march 2015:-

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Human Capital-12750

Branch Network-900

Balance Sheet-150000 crore

Yes Bank’s vision is to emerge as the ‘Finest Quality Bank of the World in India by 2020’ and

evolve its brand into the ‘Professionals’ Bank of India’.

In April 2010, your Bank launched Version 2.0 aligned with this vision and to build scale,

granularity and diversity. Your Bank sustained its Version 2.0 strategy around relationships,

knowledge and service to deliver customized and comprehensive customer solutions. Yes Bank

focused on seven strategic objectives related to Version 2.0, which are explained below:

1. Liabilities Generation

The principal objective of Yes Bank was to increase Current and Savings Account

(CASA) deposits and granular term deposits. Yes Bank used a business-to-businessto-

customer (B2B2C) strategy with a focused target segment approach, offering products

centered around customer needs. Yes Bank continued to capitalize on the deregulation of

interest rates on saving accounts starting October 2011. Yes Bank was the first to

increase rates on saving accounts, offering 7% on accounts for balances greater than or

equal to ` 100,000 and 6% for balances below 100,000. Yes Bank reinforced its pan-India

presence through more than 630 branches and 1,190+ ATMs, covering all 29 States and 7

Union Territories, and also extended the highly attractive services to NRI customers,

through its Global Indian Banking proposition. On the Current Account and Corporate

(Savings Account) front, your Bank identified current account-centric corporate customer

segments and offered customized products - wealth products to owner-promoters and

Directors of corporates and salary accounts to these companies under the Y-COPs

Program (Corporate Salary Programs). Yes Bank tapped the supply chain of large

corporate customers by offering superior technology-driven cash management and

liquidity management solutions. Yes Bank engaged with brokers and insurance firms,

offering innovative products to their customers as a part of its strategy to address

financial intermediaries and capitalize on references of technology-savvy and

transactionheavy customers. During FY 2014-15, yes Bank’s retail broking business has

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enhanced the synergy of the overall retail liabilities business, strengthening the overall

retail franchise.

The result of these initiatives was that your Bank’s CASA ratio increased from 22.0% of

total deposits as on March 31, 2014 to 23.1% as on March 31, 2015.

2. Robust Risk Management:

Yes Bank balanced and reconciled growth with high asset quality through effective risk

mitigation. Yes Bank’s risk strategy fostered disciplined risk management and control.

Principally, yes Bank intended to optimize capital needs and maximize returns. Over 12-

18 months, yes Bank focused on asset quality preservation and capital optimization. Yes

Bank’s best-in-class asset quality reflected a gross NPA of 0.41% and net NPA of 0.12%

at the close of the year under review.

3. Sustainable / Diversified Revenue Generation:

Yes Bank focused on deepening and acquiring new relationships with customers in its

identified knowledge sectors, across its Corporate Banking, Commercial Banking,

Business and Branch Banking, Multinational Corporations, Government relationships

divisions. Yes Bank’s goal was to increase business volumes per customer by

Management Discussion and Analysisbuilding relationships and the cross-sale of banking

and advisory products. Going ahead, your Bank will continue to diversify its business

across relationship groups, increasing granularity and revenue diversity.

4. Consistent Customer Service and Brand Management:

Yes Bank’s brand was built around the key pillars of Trust, Growth, Knowledgedriven Human

Capital, Innovation, Technology, Transparency and Responsible Banking. Yes Bank reinforced

these pillars through various activities: by advertising across print, radio, television and the

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internet; organizing, attending and sponsoring industry trade and knowledge seminars; authoring

knowledge-based publications; benchmarking against the best customer service-driven

companies across industry verticals; adopting best practices in customer service and delivery

from consumer goods industries; investing in continuous product, process and soft skills training

for employees; improving customer service.

5. Human Capital Management :

Your Bank leveraged its rich experience in project management and execution supported by

competent human capital; your Bank offered opportunities in a professional and

entrepreneurial workplace along with competitive compensation and relevant training. The

result: your Bank attracted the best talent from leading financial institutions and business

schools, where it continued to be an employer of choice. Besides, your Bank hired a number

of senior banking professionals from other private sector banks that strengthened its retail

banking leadership. Your Bank continued to balance the recruitment of top and senior

management professionals at one end with middle, junior and general management

professionals at the other.

6. Effective Cost Management:

Yes Bank continued to report one of the best cost-to-income ratios in India’s banking sector.

Yes Bank effectively managed costs by reducing wastage, negotiating vendor rates

efficiently and reducing technology process and soft skills training for employees; improving

customer service. costs. Yes Bank focused on re-engineering its processes and despite your

Bank being in a significant investment mode, it maintained the best-in-class cost-to-income

ratio of 41.3% in FY 2014-15.

7. Continuous Strengthening of Systems, Controls, Processes and Procedures:

Yes Bank developed technology-based solutions in conjunction with robust processes and

controls through centralized operations in cost control, risk mitigation and scaleup

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opportunities. Even as the scale of the business presented internal control challenges, yes

Bank continued to strengthen its risk management framework and operational controls.

Financial inclusion

at yes bank, financial inclusion is a key component of business excellence; we pioneered several

initiatives to further this socially relevant aspect of banking. Financial inclusion is not just a

social and regulatory obligation but a business opportunity as well. YES BANK created a

specialized inclusive and social banking division (ISB) responsible for the design and

implementation of various financial inclusion initiatives. In line with the guiding principles of

Frugal Innovation for Financial Inclusion (FI4FI), ISB developed innovative business models

and forged partnerships, leading to their seamless implementation. The division aimed at creating

viable business models while providing ‘access to finance’ to the bottom-of-the-pyramid

customers.

Some of the key initiatives undertaken by YES BANK to promote financial inclusion included

YES SAHAJ – Mobile Transaction Kit, YES MONEY – Domestic Remittance service and YES

LEAP – product suite for self-help groups (SHGs).

As on March 31, 2014:

YES SAHAJ had recorded 430,000 transactions with a corresponding transaction value of

H325 crore

YES MONEY had more than 15,400 Business Correspondent Agents enrolled through 15

Business Correspondents serving over 18 lac customers. The service reported 103,60,000

transactions with a volume of H4,265 crore

YES LEAP reported 40,000 credit and savings-linked selfhelp groups with a total outstanding

loan of H648.5 crore

Highlights YES BANK, in its endeavor to strengthen government relations and its advisory

services portfolio, signed an MoU with the Technical Consultancy Services Organization of

Karnataka (TECSOK), a Government of Karnataka organization, to carry out a joint business

development in the government advisory space.

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YES BANK, in association with the Ministry of Tourism, launched the ‘Incredible India

Tourism Card’ for inbound tourists, which was successfully operationalized.

The Bank was mandated by the Gujarat Government to prepare a ‘Vision Document’ on

improving the tourism infrastructure in that state. The Bank submitted a roadmap to the Tourism

Corporation of Gujarat Limited in positioning Gujarat as the most favored tourist destination by

identifying key development themes.

YES BANK, in its role as a country manager for a cooperative tourism development project,

implemented two pilot initiatives in Bageshwar (Uttarakhand) and Purulia (West Bengal). Efforts

were ongoing for a successful replication in other states

Backed by experienced professionals, the Financial Markets Group at your Bank offers a

competitive and comprehensive line of financial market products and services to its clients. Your

Bank’s Financial Markets (FM) business model provides effective risk management solutions

relating to foreign currency and interest rate exposures faced by its corporate clients. The FM

group proactively assists clients by making them aware about the risks they face with respect to

capital raising, investments, exports, imports and other market risks.

Your Bank has created a buoyant Debt Capital Markets (DCM) franchise with a deep-rooted

knowledge of the underlying market dynamics, coupled with strong distribution and structuring

capabilities. Since its inception, the DCM group has originated and efficiently executed over 550

transactions, across the product suite, for clients including corporate, PSUs, Central and State

Government entities and many NBFCs.

Your Bank was adjudged ‘India Bond House’ by IFR Asia for 2013. Your Bank was ranked No.

2 by Prime Database in the ‘Private Issuers Category’ of the Arrangers tables and ranked No. 7

in the all issuers category for FY 2014. Further, your Bank was ranked No. 4 by Bloomberg in

the India Domestic Bonds underwriting league tables for CY 2013.

Financial Markets also conducts proprietary trading to maximize earnings by optimal risk taking

across key fixed income, equities and global foreign exchange markets. Additionally, it is

responsible for Balance Sheet

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CHAPTER – 4

BUSINESS GROWTH

BUSINESS GROWTH

YES BANK has continued its steady GROWTH trajectory, and has had a highly satisfactory

business and financial performance for Financial Year 2008–09, clearly the most challenging

year in the Bank's evolution. Despite the financial challenges, we have been able to effectively

demonstrate our combined abilities and competencies in managing and responding to the impact

of the global crisis on the Indian Financial Sector and YES BANK. This gives us further

confidence that the terrific resilience and inherent strengths of our young and dynamic Bank will

be sustained on a continuous basis, with even greater commitment and dedication in the future

years to truly evolve as a WINNER par excellence

KEY PILLARS

The sustained growth of Yes Bank is based on the key pillars of Growth, Trust, Technology,

Knowledge Driven Human Capital, Transparency and Responsible Banking. A growing

understanding of the need for sustainability in the new knowledge economy framework, has

paved the way for a new generation of business leaders involved with the development of the

community, and the need for socially responsible investing. YES BANK is committed to be a

key partner towards further augmenting societal responsiveness. As part of the Triple Bottom

Line approach of 'People', 'Planet', 'Profit', YES BANK have integrated the principles of

Corporate Social Responsibility and Sustainability as key business drivers within our Bank as

well as in the broader context of the Indian financial community.

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YES BANK sustainability mission is to propel economic growth through proactive social and

environmental engagement across countries and regions.

FASTEST GROWING BANK

YES BANK has also been recognized amongst the Top and the Fastest Growing Banks in

various Indian Banking League Tables by prestigious media houses and Global Advisory Firms.

YES BANK has received national and international honours for YES BANK various Businesses

including Corporate Finance, Investment Banking, Treasury, Transaction Banking, and

Sustainable practices through Responsible Banking. The Bank has received several recognitions

for YES BANK world–class IT Infrastructure, and Payments Solutions, as well as excellence in

Human Capital. This year, we have also received several awards and accolades that provide a

significant validation of our entrepreneurial and innovative business model in the competitive

Indian Banking landscape

YES BANK is focused to become the Bank for EMERGING INDIA, catering to the vast

banking needs of YES BANK Corporate and Retail Communities. Our achievements over this

year and our robust performance are a testimony to the united efforts of the entire team that has

insulated us against any significant adverse impact arising from developments in the external

business environment. This exceptional growth and unparalleled success is a direct outcome of

the efforts of all YES BANKers, and I am certain that with your continued valuable support,

YES BANK will emerge even stronger in the future to become India's best private, relationship–

driven Banking organization, and steadily achieve our ultimate vision of developing into 'The

Best Quality Bank of the World in India'.

BUSINESS AREAS

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Corporate and Institutional Banking– The bank offers a broad range of financial and risk

management solutions to clients such as large Indian corporates and groups, multinational

companies, central and state governments, government bodies and public sector enterprises.

Business Banking– Yes Bank offers a range of products, services and resources to small and

medium businesses.

Corporate Finance– It offers corporate finance solutions to various clients such as local

corporates, multinational companies, financial institutions and public sector undertakings.

Retail Banking– Under this, the bank offers wide range of products and services such as saving

account, current account, fixed deposit, retail loan, depository services and many more.

Investment Banking– Yes Bank offers investment banking services in area of mergers and

acquisitions, divestitures, private equity syndication and IPO advisory.

FINANCIAL MARKET BUSINESS Financial markets’ products and services offered include:

Spot foreign exchange for the conversion of foreign currencies; Forward foreign exchange for

hedging future receivables and payables up to a maximum period of three years but generally up

to a period of six months; and Foreign exchange and interest rate derivatives for hedging market

risk exposures up to 10 years but generally up to a period of five years.

Yes Bank customers pay a commission for these products, which may be included in the rate at

which we transact with them. We also employ these products to hedge the interest rate and

currency risk exposures of their own balance sheet.

Their believe that their financial markets business has the potential to be a key contributor to

revenues, especially through fee earnings. They provide products and services as well as risk

hedging solutions in several currencies to meet the trade, capital and risk related requirements of

our C&IB and Business Banking customers.

They have put in place a financial markets team, comprising 13 professionals, several of whom

were previously employed in business and product leadership roles with various foreign and

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domestic private sector banks in India. They have also obtained registration with SEBI as

Category Merchant Bankers.

The financial markets team possesses understanding of a wide range of financial market products

and thus provides a single point of access to their customers for most of their financial market

needs. This understanding enables them to take a holistic view of customers’ businesses and

assess their risk management requirements.

CHAPTER – 5

SWOT ANALYSIS

Strengths :-

Yes Bank has displayed strong financial health since inception even during the global financial

turmoil in 2008-09 and subsequent weak macro-economic environment reigning in India over the

last three years. The Capital Adequacy Ratio of the Bank has been well above minimum

requirements at all times reflecting upon the soundness and sustainability of the business over the

longer term. Yes Bank had delivered RoA (annualized) at or above 1.5% over last three years

and RoE (annualized) at or above 20% over last six years. Yes Bank also has the best asset

quality among private and public sector banks with one of the lowest Net NPA and Gross NPA

ratios. Yes Bank continues to maintain cost-to-income ratios below the industry average and

retain high profitability per employee as compared to peers as a result of a continued focus on

productivity enhancement measures and unlocking economies-of-scale over the last couple of

years.

Yes Bank has had a proven track record to raise capital necessary to sustain the high growth

witnessed. It has raised capital (both equity and other forms of capital) at appropriate times. This

ability to augment capital funds will help capture growth opportunities with the macroeconomic

environment improving in the future.

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Weakness

Although yes Bank has made significant strides over the last few years, it is still a relatively

small player in the banking space. It has a lower market share as its network of branches is still

relatively smaller and its legacy is little less richer than its peers in both public and private sector.

Being a new bank, brand awareness among retail customers is lower than its peers who have

been in the business for a significantly longer time. However, yes Bank believes that this

represents an opportunity for the bank. Yes Bank has been expanding its branch network and

ATM base and augmenting its customer base at a rapid pace. Furthermore, Yes Bank’s rural

presence has also been correspondingly lower than the larger private and public banking players.

Consequently your Bank faces challenges in directly reaching rural farmers. Yes Bank has build

a specialized group for Agri & Rural Banking and financial inclusion to create an outreach in this

domain.

Opportunities

Although the global economy is still short of full recovery from the 2008 financial crisis,

normalization of monetary policy is now back on agenda for the developed world. This suggests

that recovery is becoming broad-based and investors are now less worried about the

sustainability of debt levels. New dynamics imply higher import demand from regions like the

US, the eurozone and Japan; creating new opportunities for the emerging world. For India, as

exports grow, a push is also expected to come in the form of governmental efforts, to revive the

investment climate, thereby creating new opportunities in the field of trade and infrastructural

financing.

The Indian banking sector continues to experience demographic tailwinds. The large middle

class with increasing incomes and banking needs along with a huge unbanked population below

the age of 25 offers an enormous retail opportunity for banks in India. Smaller towns and rural

India still provide a huge untapped potential for expansion and there are significant opportunities

especially in the small and medium enterprise space. Further the ability to use technology to

profitably deliver banking solutions to masses is an exciting opportunity. Additionally, the goal

of financial inclusion would benefit immensely from key government initiatives like the UID

program to the use of smart cards, mobile-based payments, mobile-based card transaction

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facilities and thereby would help develop the knowledge infrastructure for enhancing reach of

the banking sector.

Savings rate deregulation by the RBI has offered your Bank an opportunity to gain significant

savings account market share by offering better rates and services to customers. An International

Branch (subject to regulatory permissions) would significantly augment and diversify our overall

long-term fund raising capabilities. Your Bank has been ranked by Financial Times among the

top-600 banks in the world, and with Moody’s credit rating of Baa3, at par with India’s

sovereign rating, both these events help make the Bank’s international foray, a logical next step.

The Bank’s entry into new product/segments viz. retail assets offers significant potential for the

Bank to build on its expanding customer base. The ability to cross sell products to retail

customers would enhance the profitability of the Bank over the long run. Your Bank also has the

opportunity to increase brand awareness through focused and adept marketing campaigns and

leverage the growing retail footprint.

Threats :

While risks have certainly reduced in the recent past, complete regularization is yet to happen.

On the domestic front, it is widely anticipated that the rural growth story is losing steam and as

such is likely to offer limited upside to growth in FY 2014-15. Moreover, the possibility of El

Nino continues to pose a risk to rural growth. While we expect average CPI inflation to decline

in FY 2014-15, development of El Nino could add marginal upside risk to food inflation. In such

a scenario, revival of external demand and recovery in the capex cycle would have to play a key

role in driving the economy ahead.

Changes in the RBI regulations requiring banks to set up a higher number of rural branches could

result in lower profitability for banks. Also, the RBI awarding additional licenses could

potentially result in increasing competition in the banking industry over the medium to long-

term. There may be some erosion in projected growth due to market captured by new entrants

and also due to the competition among banks in retaining quality staff.

Expansion may lead to increase in costs and overall reduction in operating profit accompanied by

some

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impact on quality of assets with seasoning of retail assets in the future. yes Bank could also face

intense competition from allied firms in financial services (e.g. broking/investment banking,

among others) who compete for human capital. Further, recent regulatory changes including

revised priority sector norms, adoption of BASEL-III norms could result in lower profitability

for the banking system in general, thereby also impacting your Bank.

Chapter – 6

FINANCIAL REPORTS

6.1 DIRECTORS REPORT:-

Business Overview and Outlook:-

Yes Bank performed well in Financial Year (FY) 2014-15 with a net profit of ` 2,005 Crores

which is an increase of 24% from FY 2013-14. Yes Bank posted robust growth in advances and

deposits while gradually increasing diversification and granularity as reflected in higher

contribution of Retail and SME advances and CASA Deposits. Yes Bank has also successfully

completed its Version 2.0 journey over the last 5 years, growing from a small sized bank and

emerged as a meaningful entrant into the Large Bank transforming into a high quality, world-

class institution in Indian banking amidst periods of global and domestic downturn. In terms of

Human Capital strength, your Bank has achieved a significant milestone in FY 2014-15 crossing

the 10,000 mark.

Given the overall optimism and the fact that the Indian economy is set to receive a major impetus

owing to prudent policy reforms, your Bank is geared up to capitalize on this momentum with a

renewed vigour and enthusiasm and establish itself as the ‘Finest Large Bank’ in the country.

Yes Bank has also now achieved a critical mass and momentum in terms of state-of-the-art

branch network with 630 branches and 1,190 ATMs across all 29 states and 7 Union Territories

of India. Your Bank has invested significantly in offering ‘Digital Banking’ services via various

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channels while continuing to ramp up the existing branch network. We believe that the future of

Banking lies in establishing a ‘DIGICAL – Digital + Physical’ infrastructure which consists of a

fine blend of offline and online channels employing innovation and technology combined with

the effectiveness of human touch points as a means of customer service excellence.

State of the Affairs of the Bank:-

FY 2014-15 was a significant year in yes Bank’s lifecycle. Yes Bank continued on its consistent

performance with PAT growing to ` 2,005 Crores from ` 1,617 Crores resulting in a Y-o-Y

growth of 24%.

In FY 2014-15, your Bank raised over USD 1.2 Billion in equity and long term debt by

partnering with marquee global investors who have reposed tremendous faith in yes Bank’s

consistent performance and robust business model. On May 30, 2014, your Bank successfully

closed a global USD 500 Million Qualified Institutions Placement (QIP) which was the FIRST

significant capital raising by an Indian Company post formation of the new government. The

Global QIP was oversubscribed 5 times with a demand of USD 2.5 billion from investors across

USA, UK, Europe and Asia.

Yes Bank also raised a USD 422 Million Dual Currency Loan in October, 2014 which received

commitment from 21 Banks across USA, Europe, Africa, Middle East, Far East and Australia.

More recently, in December, your Bank received a USD 200 Million Unsecured Loan from the

Asian Development Bank which will be used to finance working capital and investment loans

targeted towards small farm households and rural women in Self Help Groups (SHGs). In

February 2015, yes Bank issued India’s 1st ever Green Infrastructure Bonds raising an amount of

USD 160 Million (` 1,000 Crores). The issue launched for ` 500 Crores plus green shoe option

witnessed strong demand from leading investors including Insurance companies, Pension &

Provident Funds, Foreign Portfolio Investors, New Pension Schemes and Mutual Funds,

resulting in a total subscription of ` 1,000 Crores.

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Further information on the Business overview and outlook and State of the affairs of the Bank is

discussed in detail in the Management Discussion & Analysis.

Dividend:-

Your Bank is rewarding its shareholders by way of consecutive cash dividends considering the

consistent financial performance of your bank and promising future prospects while retaining

capital to maintain a healthy Capital Adequacy Ratio and to support future growth. In view of the

excellent financial performance of your Bank and in continuance of the earlier trends of cash

dividends, the Board of Directors have recommended Dividend at a rate of ` 9 per equity share

for approval by the shareholders at the 11th Annual General Meeting.

6.2 CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheet as on 31 st march 2015

(Rs in thousands)

scheduleAs on March 31,2015

As onMarch31,2014

Capital and liabilities Capital 1 4177361 3606336Reserve and surplus 2 112477858 67545861Deposits 3 911587769 741856356Borrowings 4 262204013 213142862Other liabilities and provision 5 70982741 63896369 Total 1361429742 1090047684Assets Cash and balances with reserve bank of india 6 52406527 45415835Balances with banks & money at call &short notice

7 23167452 13500955

Investments 8 465702366 409328624Advances 9 755498162 556329622Fixed assets 10 3218219 2970942Other assets 11 61437016 62501706 Total 1361429742 1090047684Contingent liabilities 12 3372992517 2010168222

Bills for collection 13739445 9970631

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CONSOLIDATED PROFIT AND LOSS ACCOUNT

scheduleApril 1,2014 to march31, 2015

April 1,2013 to march ,31 2014

I. Income Interest earned 13 115720065 99813521Other income 14 20479127 17215800 Total 136199192 117029321ExpenditureInterest earned 15 80833820 72645498Operating expenses 16 22948548 17568753Provision and contingencies 17 12445297 10702483 Total 116224965 100916734ProfitNet profit for the period 19974227 16112587Profit brought forward 32009349 23383674 Total 51983576 39496261AppropriationsTransfer to capital reserve 262447 41359

Transfer to statutory reserve 5013404 4044451Transfer to investment reserve 124099 4385Dividend paid for last year 2253 4026Tax on dividend paid for last year 383 17305

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Proposed dividend 3759625 2885069Tax on dividend 765460 490317Balance carried over to balance sheet 42055905 32009349

Total 51983576 39496261

SchedulesAs at March 31,2015

As at March 31,2014

Schedule 1 – capital Authorised capital600000000 equity shares of Rs 10/- each 6000000 6000000Issued ,subscribed and paid up capital417736098 equity shares of Rs 10 each[march 31,2014 : 360633626 equity shares of Rs 10/- each]

4177361 3606336

Total 4177361 3606336

Schedule 2 – reserve and surplusStatutory reserveOpening balance 14384732 10340281Additions during the year 5013404 4044451Closing balance 19398136 14384732Share premiuimOpening balance 19265118 18925609Additions during the year 29657964 339509Deductions during the year 172473 -Closing balance 48750609 19265118Capital reserveOpening balance 1784564 1743205Additions during the year 262447 41359Closing balance 2047011 1784564Investment reserveOpening balance 102098 97713Additions during the year 124099 4385Closing balance 226197 102098

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Balance in profit and loss account 42055905 32009349 Total 112477858 67545861

Schedule 3- deposits

Demand depositsFrom banks 3756166 2346947From others 81224486 67824661Saving bank deposit 125795428 93275190Term deposits From bank 50676446 63293491From others 650135243 515115967 Total 91158769 741856256Deposits of branches in india 91158769 741856256

Deposits of branches outside india

Total 911587769 741856256

Schedule 4- borrowings

Innovative perpetual debt instruments & tier ii debtBorrowing in india IPDI 7410000 7410000 Upper tier ii borrowing 19367000 19367000 Lower tier ii borrowing 30255000 30255000 Total(A) 57032000 57032000Borrowings outside india IPDI 312500 299575 Upper tier ii borrowing 10577768 10382401 Lower tier ii borrowing Total(B) 10890268 10681976 Total (A+B) 67922268 677136976Other borrowings

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Borrowings in india Reserve bank of india 24000000 35020000 Other banks 14925000 26610000 Other institutions and agencies 67210000 31554417 Total(A) 106135000 93184417Borrowings outside india (B) 88146745 52244469 Total(A+B) 194281745 145428886 Total (1+2) 262204013 213142862

Schedule -5 other liabilities and provisionBills payable 3508352 2050477Inter office adjustment Interest accrued 12168775 8868695Others(including provision)

- provisions for standard advances 6593528 4153204- Others 48812086 48823993

Total 70982741 63896369

Schedule -6 cash and balance with reserve bank of india Cash in hand 3645849 2300121Balances with reserve bank of india In current account 48760678 43115714 Total 52406527 45415835

Schedule -7 balances with banks, money at call & short notice In india Balances with bank In current account 260854 420177 In other deposit account 65 60Money at call and short noticeWith banks 450000 500000With other institutionslending under reverse repo 9000000 555030 Total(1) 9710919 1475267Outside india

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In current account 8769033 9329513Money at call and short notice 4687500 2696175 Total (2) 13456533 12025688 Total (1+2) 23167452 13500955

Schedule -8 investmentInvestment in india in Govt securities 300012130 224290105Other approved securities Shares 601370 932480Debentures and bonds 94667483 103155907Others 70421383 80950132 Total 465702366 409328624Investment outside india Total 465702366 409328624

Schedule – 9 Advances Bills purchased and discounted 16024073 12871890Cash credit, over drafts & loans payable on demand

173764530 142758282

Term loans 565709559 400699450 Total 755498162 556329622Secured by tangible assets 518241518 374024050Covered by bank 1553036 5625707 Unsecured 235703608 176679865 Total 755498162 556329622Advances in india Priority sectors 189458960 145642222Public sector 38511 62516Banks 331699 1656781Others 565668992 408968103 Total 755498162 556329622

Schedule – 10 fixed assetsPremisesOther fixed assets At cost as on 31st march of preceding year 5359762 4271173

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Additions during the year 1075454 1245993Deductions during the year 114355 154705Accumulated deprecition to date 3359963 2593271

2960898 2769190Capital work in progress 257321 201752 Total 3218219 2970942

Schedule -11 other assetsInterest accrued 18018071 15452407Advance tax and tax deducted at source 722534 442198Deffered tax assets 3553450 2492698Non banking assets acquired in satisfaction of claims

452030 510030

Others 38690931 43604372 Total 61437016 62501706

Schedule – 12 contingent liabilitiesClaims against the bank not acknowledged as debts

4521

Liability for partly paid investmentLiability on account of outstanding forward exchange contracts

2116095628 1104666493

Liability on account of outstanding derivative contracts Single currency interest rate swap 634287012 498750662 Others 193447010 95971508Guarantee given on behalf on constituents In india 142909758 104640628 Outside indiaAcceptance ,endorsement and other obligations 225393720 164442130Other items for which the bank is contingently liable Value dated purchase of securities 119018 206475 Capital commitment 346840 238440 Foreign exchange contracts 60389010 41251886

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Total 3372992517 2010168222

Schedule -13 interest earnedInterest/discount on advances/bills 80160944 65399853Income on investments 35106289 34144577Interest on balances with reserve bank of india and other inter bank funds

428932 238880

Others 23900 30211 Total 115720065 99813521

Schedule – 14 other incomeCommission ,exchange and brokerage 19779375 12609234Profit on sale of investment 1420957 1661620Loss on sale of land building and other assets (1577) (948)Profit on exchange transactions (670297) 1985108Miscellaneous income (49331) 960786 Total 20479127 17215800

Schedule – 15 interest expendedInterest on deposits 65360308 56180977Interest on reserve bank of india/inter bank borrowings/tier I &tier ii debt instruments

14722956 15824830

Others 750556 639691 total 80833820 72645498

Schedule – 16 operating expensesPayments to and provision for employees 9866274 7886371Rent , taxes and lighting 2682159 2303815Printing and stationery 168241 131930Advertisement and publicity 703212 597823Depreciaton on bank’s property 860714 635429Directors fees , allowances and expenses 12367 5739Auditor fees and expenses 8655 7788Law charges 11899 21051Postage ,telegram, telephones etc 306046 250479Repairs and maintenance 159600 110318Insurance 691460 528209Other expenditure 7477921 5089801

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Total 22948548 17568753

Schedule -17 provision and contingenciesProvision for taxation 9047813 7085642Provision for investment (584289) 860079Provision for standard advances 2440324 1278978Provision / write off for non perfoming advances 1300099 1358169Other provisions 238650 119615 Total 12442597 10702483

6.3AUDITORS REPORT

Management’s Responsibility for the Standalone Financial Statements:-

The Bank’s Board of Directors is responsible for the matters stated in section 134(5) of the

Companies Act, 2013 (“the Act”) with respect to preparation of these standalone financial

statements that give a true and fair view of the financial position, financial performance and cash

flows of the Bank in accordance with the accounting principles generally accepted in India,

including the Accounting Standards specified under section 133 of the Act read with Rule 7 of

the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of

adequate accounting records in accordance with the provisions of the Act for safeguarding of the

assets of the Bank and for preventing and detecting frauds and other irregularities; selection and

application of appropriate accounting policies, making judgments and estimates that are

reasonable and prudent; and design, implementation and maintenance of internal financial

controls, that were operating effectively for ensuring the accuracy and completeness of the

accounting records, relevant to the preparation of the financial statements that give a true and fair

view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility:-

Our responsibility is to express an opinion on these standalone financial statements based on our

audit. We have taken into account the provisions of the Act, the accounting and auditing

JAI HIND Page 27


standards and matters which are required to be included in the audit report under the provisions

of the Act and the Rules made thereunder. We conducted our audit in accordance with the

Standards on Auditing specified under section 143(10) of the Act. Those Standards require that

we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor considers

internal control relevant to the Bank’s preparation of the financial statements that give a true and

fair view in order to design audit procedures that are appropriate in the circumstances, but not for

the purpose of expressing an opinion on whether the Bank has in place an adequate internal

financial controls system over financial reporting and the operating effectiveness of such

controls. An audit also includes evaluating the appropriateness of accounting policies used and

the reasonableness of the accounting estimates made by the Bank’s Directors, as well as

evaluating the overall presentation of the financial statements. We believe that the audit evidence

we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion :-

In our opinion and to the best of our information and according to the explanations given to us,

the aforesaid standalone financial statements together with the notes thereon give the information

required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013, in the

manner so required for the banking companies and give a true and fair view of the state of affairs

of the Bank as at 31 March 2015, and its profit and its cash flows for the year then ended.

Report on Other Legal and Regulatory Matters:-

The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the

provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 133 of the

Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

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As required sub section (3) of section 30 of the Banking Regulation Act, 1949 and the

appointment letter dated 27 May2014, we report that:

(a) We have obtained all the information and explanations which, to the best of our knowledge

and belief, were necessary for the purpose of our audit and have found them to be satisfactory;

(b) The transactions of the Bank, which have come to our notice, have been within the powers

of the Bank; and

(c) The financial accounting systems of the Bank are centralised and therefore, accounting

returns for the purpose of preparing financial statements are not required to be submitted by the

branches; we have visited 20 branches for the purpose of our audit.

Further, as required by section 143(3) of the Companies Act, 2013, we further report that:

(a) We have sought and obtained all the information and explanation which to the best of our

knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Bank so

far as appears from our examination of those books;

(c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by

us in the Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting

Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)

Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31 March, 2015

taken on record by the Board of Directors, none of the directors is disqualified as on 31 March,

2015 from being appointed as a director in terms of Section 164 (2) of the Act.

Other Matters :-

With respect to the other matters to be included in the Auditor’s Report in accordance with Rule

11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our

information and according to the explanations given to us:

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(a) The Bank has disclosed the impact of pending litigations on its financial position in its

standalone financial statements – Refer Note 18.8.13 to the standalone financial statements;

(b) The Bank has made provision, as required under the applicable law or accounting

standards, for material foreseeable losses on long-term contracts including derivative contracts –

Refer Note 18.8.14 to the financial statements.

(c) There were no amounts which were required to be transferred to the Investor Education and

Protection Fund by the Bank.

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Chapter - 7

CONCLUSION Yes Bank's Corporate Finance practice offers a combination of advisory services and

customized products to optimize risk based on "Knowledge Arbitrage"

Yes Bank has banking network of over 600 branches and 2,000 ATMs giving it a major presence in urban India. Yes bank is one of the fastest growing private bank in India.

The sustain growth of yes bank is based on the key pillars of growth, trust, technology, human capital, transparency, and responsible banking.

Yes bank has a knowledge driven approach towards banking, and a superior customer experience for its retail, corporate and emerging corporate banking clients.

The business strategy implied by yes bank was a runaway success.Unrelenting efforts to provide world-class service coupled with steadfast maintenance of operational standards were the prime reason for bank phenomenal growth.

The growth was even impressive considering it came at a time when the banking sector was on the verge of consolidation phase.

Yes Bank's is a major player in Investment Banking in India and is involved in the identification, structuring and execution of transactions for its clients in diverse industries and geographies. Some of the typical transactions include mergers & acquisitions, divestitures, private equity syndication and IPO advisory.

Yes bank has been recognized amongst the top and fastest growing bank in various Indian banking league tables by prestigious media houses and global advisory firms and has receive several national and international honours for our business including corporate investment banking treasury transaction banking and sustainable practices through responsible banking.

Yes bank is steadily involving as the professional bank of India with the long term mission of building finest quality bank of the world in India by 2020.

JAI HIND Page 31


BIBLOGRAPHY

https//www.yesbank.in/

https//en.wikipedia.org/wiki

www.moneycontrol.com

info.shine.com

www.researchbites.com

www.businesstoday.in/

www.profitndtv.com

www.indiatoday.in

www.businesstandard.com

JAI HIND Page 32

http://www.indiatoday.in/

http://www.profitndtv.com/

http://www.business/

http://www.researchbites.com/

http://www.moneycontrol.com/

ALIYA FA

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