YES BANK Limited
Report on the Audit of the Standalone FinancialStatements
Opinion
We have audited the standalone financial statements of YES BANK Limited ('the Bank'), which comprise the Balance Sheet as at March 31, 2025, the Profit and Loss Account and the Cash Flow Statement for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statements").
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 Companies (Accounting Standards) Rules, 2021 as amended to the extent applicable, of the state of affairs of the Bank as at March 31, 2025, and its profit, and its cash flows for the year ended on that date.
Basis for 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 ('the ICAI') 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.
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 year. 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:
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Key Audit Matters
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Auditor's Response
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Identification, classification and provisioning of non-performing advances (NPA)
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Refer to schedule 9, read with relevant Notes relating to provisions and contingencies, disclosures with regard Asset Quality in respect of movement of Non-Performing Assets (NPAs) and related provisions respectively.
As required under prudential norms on Income Recognition and Asset Classification and Provisioning related to Advances read with relevant circulars, notifications and directives issued by the Reserve Bank of India (RBI) in respect of identification, classification and provisioning on such NPAs, which were collectively considered by the Bank till March 31, 2025, identifies and classifies NPA advances into Sub-standard, Doubtful and Loss and makes appropriate provisions.
The Bank, as per its governing framework, made NPA provisions based on Management's assessment of the degree of impairment of the advances subject to and guided by minimum provisioning levels prescribed under RBI guidelines.
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Our audit approach included testing the design, operating effectiveness of internal controls and substantive audit procedures in respect of identification, classification and provisioning of NPA In particular:
• Evaluated the Bank's internal control system in adhering to the relevant RBI guidelines regarding identification, classification and provisioning of NPA;
• 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 identification and classification viz., substandard, doubtful and loss with reference to their days-past-due (DPD) status and provisioning pertaining to NPA;
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Key Audit Matters
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Auditor's Response
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The identification, classification and provisioning of NPAs has been
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Test checked advances to examine the validity of the recorded
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identified is a Key Audit Matter as the Bank has significant credit
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amounts, loan documentation, examined the statement of
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risk exposure to a large number of borrowers across various sectors,
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accounts, indicators of impairment, impairment provision for
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products, industries and geographies and there is a high degree of
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non-performing assets, and compliance with asset classification
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complexity, uncertainty and judgment involved in recoverability of advances, nature of transactions and estimation of provisions thereon
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and provisioning pertaining to advances.
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and identification of accounts to be written off.
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Testing of controls for computation of provision of NPA and its compliance with board approved policy and RBI regulations.
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Undertaken the walkthrough for the automated E-NPA system and tested the core functionality for selected samples considering the audit universe.
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Re-performed, for a sample of retail and corporate portfolios, as part of our substantive audit procedures the calculation of provisions, to determine the accuracy of the same;
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Assessed the adequacy of disclosures against the RBI regulations.
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Information Technology (IT) Systems and General Controls
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The Bank's key financial accounting and reporting processes are
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Our audit approach/procedures included the following:
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highly dependent on Core Banking and Treasury Solutions and other supporting software and hardware controls. The volume of
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We have planned, designed and carried out the desired audit
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transactions processed and recorded is huge and hence the IT controls
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procedures and sample checked, taking into consideration the IT
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are required to ensure that applications process data as expected
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systems of the Bank.
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and that changes are made in an appropriate manner. The Bank's IT
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Assessment and identification of key IT applications including
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control framework includes automated, semi-automated and manual
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those identified by the management for audit trail (audit log)
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controls designed to address identified risks. IT controls are stated in
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further verifying, testing, and reviewing the design and operating
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Entity Level Controls (ELC), IT General Controls (ITGC) and IT Application
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effectiveness of the IT system based on reports and other
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Controls (ITAC). Such controls contribute to risk mitigation of erroneous
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financial and non-financial information generated from the
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output data.
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system on a test check basis.
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We have identified IT Controls Framework as a Key Audit Matter
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Gaining understanding of IT controls framework through
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as the Bank's business is highly dependent on technology. The IT
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Walkthrough of processes. We also discussed and referred to
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environment is complex and the design and operating effectiveness
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reports of internal auditors, Internal Financial Control and other
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of IT controls have a direct impact on its financial reporting process.
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assurance functions in carrying out our audit procedures.
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Such controls provide assurance on the integrity and completeness of
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The IT audit specialists (who are integral part of audit team) have
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data processed through various IT applications which are used for the
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carried out testing of effectiveness of general and application
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preparation of financial reports.
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controls.
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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.
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1 n ITGC testing, on sample basis, we reviewed control areas such as User Management, Change Management, Physical & Environmental Security, Creation and maintenance of edit logs, Backup and Restoration etc.
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We
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have also carried out other audit procedures like substantive
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testing, analytical procedures etc. to verify the accuracy of the data generated from the IT system.
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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, Business Responsibility and Sustainability Report, Directors' Report forming part of the Annual Report, but does not include the Standalone Financial Statements, Consolidated Financial Statements and our auditor's report thereon and the Pillar III Disclosures under Basel III Capital Regulation, Leverage Ratio, Liquidity Coverage Ratio and Net Stable Funding Ratio. The Annual Report 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.
Responsibilities of Management and Those Charged with Governance 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 and presentation 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 Companies (Accounting Standards) Rules, 2021 as amended to the extent applicable, 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, as applicable to the Bank. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act and the RBI Guidelines for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection of the appropriate accounting software for ensuring compliance with applicable laws and regulations including those related to retention of audit logs
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 Board of Directors either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are 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:
• I dentify 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 the override of internal control.
• 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 Director's 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 the 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 financial statements 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 year 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 Matter
The Standalone Financial Statements for the year ended March 31, 2024, have been audited by one of the predecessor auditors Chokshi & Chokshi LLP and continuing joint statutory auditors G. M. Kapadia & Co., whose report dated April 27, 2024 had expressed an unmodified opinion. The above report has been furnished to us by the management and has been relied upon by us for the purpose of our audit of the Standalone Financial Statements.
Our opinion is not modified in respect of this matter.
Report on other legal and regulatory requirements
1) 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 and Section 133 of the Act and relevant rules issued thereunder.
2) 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) t he transactions of the Bank, which have come to our notice, have been within the powers of the Bank; and
(c) The Bank considers its key operations, with the key applications largely integrated to the Core Banking System, it does not require its branches to submit any financial returns. Accordingly, our audit is carried out centrally based on the records and data made available to us at Head Office. During the course of our audit, we have visited and performed select relevant procedures at 62 branches; and
(d) The profit and loss account shows a true balance of profit for the year then ended
3) 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) i n our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Accounting Standard) Rules, 2021, as amended, 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, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2025 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'.
4) 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, as amended in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
(a) the Bank has disclosed the impact of pending litigations as at March 31, 2025 on its financial position in its standalone financial statements - Refer Note No. 17.5.11 and 17.5.80 to the standalone financial statements;
(b) t he 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 No. 17.5.74 read with Note No. 17.5.19 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 during the year ended March 31, 2025 - Refer Note No. 17.5.64 to the standalone financial statements.
(d) (i) The management of the Bank has represented
that, to the best of its knowledge and belief, other than as disclosed in the notes to accounts (Refer Note No. 17.5.36), no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Bank ('Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(ii) The management of the Bank has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to accounts (Refer Note No. 17.5.36) no funds have been received by the Bank from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, the Bank shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ('Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(iii) Based on such audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) above contain any material misstatement.
(e) No dividend has been declared or paid during the year by the Bank.
(f) Based on our examination which included test checks, the Bank has used accounting software for maintaining its books of account which, along with
access management tools, as applicable, have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. Additionally, the audit trail been preserved by the bank as per the statutory requirements for record retention
5) With respect to the matter to be included in the Auditors' 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 (the 'act') do not apply by virtue of Section 35B(2A) of the Banking Regulation Act, 1949.
For G.M. Kapadia & Co. For C N K & Associates LLP
Chartered Accountants Chartered Accountants
(Registration No. 104767W) (Registration No. 101961W/ W100036)
Atul Shah Suresh Agaskar
Partner Partner
(Membership No. 039569) (Membership No. 110321)
UDIN: 25039569BMLNBR6268 UDIN: 25110321BMKWGX7002
Place: Mumbai Place: Mumbai
Date: April 19, 2025 Date: April 19, 2025
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