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YES Bank Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018

Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018

1. The unaudited financial results have been taken on record by the Board of Directors of the Bank at its meeting held in Mumbai today The results have been subject to "Limited Review" by the Statutory Auditors of the Bank. There are 110 qualifications in the auditor's review report for the quarter and Nine Months ended December 31, 2018.

2. During the quarter and Nine Months ended December 31, 2018, the Bank allotted 3,036,930 shares and 9,347,530 shares respectively, pursuant to the exercise of stock options by employees.

3. During quarter and Nine Months ended December 31, 2018, the Bank has raised Rs. Nil and Rs. 304,200 Lakhs of Basel III Compliant Tier II Bonds.

4. As at December 31, 2018, the total capital infused and outstanding is Rs. 14,900 lakhs in Yes Securities (India) Limited, Rs. 7,450 Lakhs in YES Asset Management (India) Limited and Rs. 50 Lakhs in Yes Trustee Limited. During quarter ended December 31, 2018, the Bank has infused a capital of Rs. 9,900 lakhs in Yes Securities (India) Limited. AH three are wholly owned subsidiary companies of the Bank.

5. Other income includes fees and commission earned from guarantees/letters of credit, loans, financial advisory fees, selling of third party products, earnings from foreign exchange transactions and profit/loss from sale of securities

6. Return on assets is computed using a simple average of total assets at the beginning and at the end of the relevant period.

7. The disclosures for NPA referred to in point 17(iv) above correspond to Non Performing Advances.

8. In accordance with RBI circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on 'Basel III Capital Regulations' read together with RBI circular DBR.No.BP BC80/21.06.201/2014-15 dated March 31, 2015 on 'Prudential Guidelines on Capital Adequacy and Liquidity Standards - Amendments' requires banks to make applicable Pillar 3 disclosures including leverage ratio and liquidity coverage ratio under Basel III Framework. The Pillar III disclosures have not been subjected to review by the statutory auditors. The Bank has made these disclosures which are available on its website at the following link
https://www.yesbank in/pdf/basel_iii_disclosure_dec_31_2018.pdf

9. The Capital Adequacy Ratio is computed on the basis of RBI guidelines applicable on the relevant reporting dates and the ratio for the corresponding previous period is not adjusted to consider the impact of subsequent changes if any, in the guidelines

10. In view of the continuing rise in the yields on Government Securities, RBI vide its circular DBR.No.BP.BC.113/21.04.048/2017-18 dated June 15, 2018 has granted banks the option to spread provisioning for their net mark to market (MTM) losses on all investments held in AFS and HFT for the quarter ended June 30, 2018. As per the RBI circular, the provisioning cost for the quarter ended June 30, 2018, may be spread equally over up to four quarters, commencing with the quarter ended June 30, 2018. Consequently, the Bank will amortize Rs. 6,638.34 Lakhs in the quarter ending March 31, 2019.

11. In accordance with the disclosure requirements of Schedule IV, of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Bank has an aggregate outstanding funded exposure of Rs. 252,973 lakhs as on December 31, 2018 to various companies and SPVs of a stressed infrastructure conglomerate (Nil to the Parent / NBFC / Financial Services entities). Out of this, in accordance and compliance with RBI Master Circular on Prudential Norms on Income Recognition, Assets Classification and Provisioning, the Bank has classified Rs. 191,301 lakhs of the advances as Non-Performing with a specific provision of Rs. 47,825 lakhs (25%). Further, the Bank has prudently made a provision of Rs. 9,251 lakhs on outstanding advances of Rs. 61,672 lakhs which has been classified as Standard as per IRAC norms (15% provision). Such provisions on Standard Advances have been classified under 'Other Liabilities and Provisions'. Additionally the Bank has a non-funded based exposure of Rs. 8,779 lakhs to this conglomerate.

12. As reported in the previous quarter, the Bank received communication on its operations including through the stock exchanges. The Bank had responded to the communication received from the stock exchanges which has been disclosed by the exchanges. Since then, the Bank has appointed an external] firm to independently examine this matter. Further, the Bank had also inter alia received communication from RBI approving the tenure of its current MD&CEO till January 31, 2019 and for appointing a successor by February 01, 2019. The Bank had submitted an application to the Reserve Bank of India ("RBI") with potential candidates seeking their approval. The Bank have received the approval from RBI to appoint a new MD & CEO effective March 01, 2019.

13. As the business of the Bank is concentrated in India; the segment disclosures made pertain to domestic segment.

14. The Bank has followed the same significant accounting policies in the preparation of these financial results as those followed in the annual financial statement for the year ended March 31, 2018.

15. Previous period figures have been regrouped /reclassified wherever necessary to conform to current period classification.