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.
|