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Yes Bank Ltd.

BSE: 532648 | NSE: YESBANK |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE528G01035 | SECTOR: Banks - Private Sector

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Annual Report

For Year :
2021 2018 2017 2016 2015 2014 2013 2012 2011

Auditor's Report

To the Members of YES BANK Limited

Report on the audit of the standalone financial statements

Opinion

We have audited the standalone financial statements of YES BANK Limited (the ''Bank''), which comprise the Balance Sheet as at March 31, 2021, the Profit and Loss Account and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the section 29 of the Banking Regulation Act, 1949 as well as the Companies Act, 2013 (the ''Act'') and circulars and guidelines issued by the Reserve Bank of India, in the manner so required for banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, read with rules made thereunder, of the state of affairs of the Bank as at March 31,2021 and its loss and its cash flows for the year ended on that date.

Basis of opinion

We conducted our audit in accordance with the Standards on Auditing (''SAs'') specified under

Section 143 (10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act, and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Emphasis of matter

a) We draw attention to Note 18.6.69 which describes the state of affairs pertaining to the whistle blower complaints received in prior years and the subsequent actions including the corrective steps initiated by the Bank. The Management has made provisions in accordance with the

relevant prudential norms issued by the Reserve Bank of India in respect of income recognition, asset classification and provisioning and does not expect any further substantial impact on the financial position of the Bank. Our opinion is not modified of this matter.

b) We draw attention to Note 18.5.1 and 18.6.24 which describes the business uncertainties due to the outbreak of SARS-CoV-2 virus (COVID-19). In view of these uncertainties, the impact on the Bank''s financial statements is significantly dependent on future developments. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report:

Key Audit Matters

Auditor''s Response

Recognition and Measurement of Deferred Tax Asset

The Bank has recognised a net deferred

Our audit procedures involved gaining an understanding of

tax asset of ?95,538,433 (in ''000) as on

the applicable tax laws and relevant regulations applicable

March 31,2021, including net increase of

to the Bank. We performed the following audit procedures

12,728,473 (in ''000) during the year.

as part of our controls testing including:

Besides objective estimation, recognition

» evaluation of the policies used for recognition and

and measurement of deferred tax asset

measurement of deferred tax assets in accordance with

is based on the judgment and numerous

AS 22 Accounting for Taxes on Income;

estimates regarding the availability and visibility of profits in the future and also

» assessed the probability of the availability of future

considering probable impact of Covid-19 pandemic.

taxable profits based on assumptions and other parameters used by the Management including the probable impact of Covid-19 pandemic against which

The amount of deferred tax assets

the Bank will be able to use this deferred tax asset in the

recognised presumes availability and

future with reference to forecast as noted by the Board

forecasting of profits over an extended

of Directors while adopting the standalone financial

period of time thus increasing uncertainty

statements.

and the inherent risk of inappropriate

» assessed the method for determining the Deferred Tax

recognition of the said asset.

Asset with reference to applicable tax rates and tested the arithmetical accuracy.

Key Audit Matters

Auditor''s Response

Income Recognition and Asset Classification of Advances

(IRAC) and Provisioning as per regulatory norms

Please refer to Note nos. 18.6.16 and

Our audit approach included testing the design, operating

18.6.10(ii) relating to Asset Quality

effectiveness of internal controls and substantive audit

in respect of movement of Non-

procedures in respect of income recognition, asset

Performing Assets (NPAs) and related

classification and provisioning pertaining to advances and

provisions and disclosures with regard

investments. In particular:

to Non Performing Investments (NPI) respectively.

» we have evaluated and understood the Bank''s internal

control system in adhering to the relevant RBI guidelines

Compliance of relevant prudential norms

regarding income recognition, asset classification and

issued by the Reserve Bank of India (RBI)

provisioning pertaining to advances and investments;

in respect of income recognition, asset classification and provisioning pertaining to advances as well as those pertaining to investments is a key audit matter due to materiality involved and the current processes at the Bank which are not fully automated, management estimates and

» we have tested key IT systems/ applications used and their design and implementation as well as operational effectiveness of relevant controls, including involvement

of manual process and manual controls in relation to income recognition, asset classification and provisioning pertaining to advances and investments;

judgement.

» we have test checked advances to examine the validity of

the recorded amounts, loan documentation, examined the statement of accounts, indicators of impairment, impairment provision for non-performing assets and compliance with income recognition, asset classification and provisioning pertaining to advances in terms of applicable RBI guidelines;

» we have evaluated the past trends of management

judgement, governance process and review controls over impairment provision calculations and discussed the provisions made with the top and senior management of

IT Systems and Controls over financial reporting

The Bank''s key financial accounting

» We have planned, designed and carried out the desired

and reporting processes are highly

audit procedures and sample checks, taking into

dependent on Core Banking and Treasury

consideration the IT systems of the Bank. The procedure

Solutions and other supporting software

adopted by us are, in our opinion, adequate to provide

and hardware controls such that there

reasonable assurance on the adequacy of IT controls in

exists a risk that gaps in the IT control

place. Towards this end, we obtained an understanding

environment could result in the financial accounting and reporting records being

of Bank''s IT environment.

Key Audit Matters

Auditor''s Response

materially misstated. Appropriate IT controls are required to ensure that the IT applications perform as planned and the changes made are properly controlled. Such controls contribute to risk mitigation of erroneous output data. The audit outcome is dependent on the extent of IT controls and systems.

» In addition, we have also relied on IS audit conducted by internal audit department, and also the audit of Internal Financial Control over Financial Reporting conducted by the Operational Risk Management department of the Bank. We also tested key automated and manual business cycle controls and logic for system generated reports relevant to the audit; including testing of compensating controls or performed alternate procedures to assess whether there were any unaddressed IT risks that would materially impact the financial statements.

Information other than the standalone financial statements and Auditor''s Report thereon

The Bank''s management and Board of Directors are responsible for the Other Information. The other information comprises the Management Discussion and Analysis, Directors'' Report including Annexures to Directors'' Report (collectively called as Other Information) but does not include the standalone financial statements and our auditor''s report thereon and the Pillar III Disclosures under the New Capital Adequacy Framework (Basel III disclosures). The other information is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the Other Information identified above when it becomes available and, in doing so, consider whether the Other Information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Management''s and Board of Director''s Responsibility for the Standalone Financial Statements

The Bank''s management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, loss 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, provisions of Section 29 of the Banking Regulation Act, 1949 and the circulars and guidelines issued by Reserve Bank of India (''RBI'') from time to time. 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 adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Bank''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management and Board of Directors either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Bank''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

» Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or

» Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the bank has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

» Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the Management and Board of Directors.

» Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause a Bank to cease to continue as a going concern.

» Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

The Standalone Financial Statements of the Bank for the previous year ended March 31,2020 were audited by the predecessor auditors. The auditors have expressed Qualified opinion vide their report dated May 6, 2020 on such financial statements.

Report on other legal and regulatory requirements

The standalone balance sheet and the standalone profit and loss account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 and Section 133 of the Act.

A. As required by sub-section (3) of Section 30 of the Banking Regulation Act, 1949, 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) since the key operations of the Bank are automated with the key applications integrated to the core banking systems, the audit is carried out centrally as all the necessary records and data required for the purposes of our audit are available therein. However, during the course of our audit we have visited 2 branches to examine the records maintained at such branches for the purpose of our audit. Subsequently, due to the ongoing Covid-19 pandemic and the lockdowns the audit processes were conducted remotely without visiting the branches.

B. Further, as required by Section 143(3) of the Act, we report that:

(a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books;

(c) the standalone balance sheet, the standalone profit and loss account, and the standalone cash flow statement dealt with by this 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, to the extent they are not inconsistent with the accounting policies prescribed by RBI;

(e) on the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the Act; and

(f) with respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Bank and the operating effectiveness of such controls, refer to our separate Report in ''Annexure A''.

C. 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:

(a) the Bank has disclosed the impact of pending litigations as at March 31,2021 on its financial position in its standalone financial statements - Refer Note 18.6.70 to the standalone financial statements;

(b) the Bank has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 18.6.67 to the standalone financial statements;

(c) there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Bank - Refer Note 18.6.59 to the standalone financial statements.

D. With respect to the matter to be included in the Auditor''s Report under section 197(16) of the Act:

The Bank is a banking company as defined under Banking Regulation Act, 1949. Accordingly, the requirements prescribed under Section 197 of the Companies Act, 2013 do not apply by virtue of Section 35B(2A) of the Banking Regulation Act, 1949.

For M. P. Chitale & Co.

Chartered Accountants

ICAI Firm Registration. No.: 101851W

Ashutosh Pednekar

Partner

Place : Mumbai ICAI Membership No.: 041037

Date : April 30, 2021 UDIN : 21041037AAAACF7681